Sears Holdings is taking a new step to cash in on its real estate. The struggling retailer is auctioning 16 profitable Sears stores on an online auction platform. Cushman & Wakefield, a real estate services firm, is partnering with Real Insight Marketplace to sell the stores.
Approximately 200 investor groups have expressed interest in bidding on the properties, according to The Wall Street Journal. The Real Insight Marketplace web site says that all bids are due by May 1 at 8 pm Eastern.
Despite posting a positive net income of $182 million in Q4, aided largely by $470 million in benefits from the new tax reform package, same-store sales in the holiday quarter still dipped 15.6%. Despite massive cost cuts across the board, the only guarantee for Sears right now is that more stores will close or be sold off.
The stores to be auctioned, 15 of which are attached to malls, are being marketed as sale and lease-back deals. Some properties with agreements that allow modifications could be turned into self-storage, hotel or residential space.
Real estate investment trusts (REITs) and mall operators have welcomed the opportunity to take back control of a Sears location, either to bring in a tenant (or multiple tenants) that can pay more rent per square foot or to transform it into something else entirely.
For example, PREIT revealed that it would move Five Below and HomeGoods into a space once occupied by a Sears store in a South Carolina mall. The two retailers join Burlington, which first opened in the space in September 2017. With three retailers occupying one former anchor space, PREIT can still command a reasonable rent price, while the retailers don’t feel the pressure of generating sales commensurate with a massive space.
Simon Property Group laid out plans to redevelop five former Sears stores, with plans to bring in dining halls, residential space, fitness centers and new retailers to those properties.
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