CBL acquires five Sears stores in sale-leaseback deal
CBL has worked out sales-leaseback deals with Sears Holdings to take ownership of five Sears department stores and two Auto Centers located at company malls in the Southeast. The deal was consummated for $72.5 million.
The Sears properties acquired are located at Cross Creek Mall in Fayetteville, North Carolina; Brookfield Square in Brookfield, Wisconsin; Hamilton Place Mall in Chattanooga, Tennessee; Eastgate Mall in Cincinnati, Ohio; and Jefferson Mall in Louisville, Kentucky. The Sears Auto Centers are at Northgate Mall in Chattanooga, Tennessee, and Volusia Mall in Daytona, Florida.
“We are pro-actively transforming our market-dominant shopping centers to meet the changing preferences of consumers,” said CBL president and CEO Stephen Lebovitz. “This transaction provides CBL with the opportunity to redevelop prime real estate and attract exciting new uses at some of our best shopping centers.”
CBL will have the right to terminate each Sears lease with six months’ notice at any time outside of the holiday selling season. This clause takes effect following a lock-out period of four years for the Sears store at Jefferson Mall, two years for the other four Sears stores, and one year for the two Sears Auto Centers. Upon termination by either party, Sears has the option to relocate its operations at each mall to a location of up to 15,000 sq. ft.
Sears will continue to operate the department stores under new 10-year leases. CBL will receive aggregate initial base rent of approximately $5 million, with Sears responsible for paying common area maintenance charges, taxes, insurance, and utilities.
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