Sears to raise $2.5 billion in REIT; announces joint venture with General Growth

Hoffman Estates, Ill. – Sears Holdings Corp. continues to tap into its vast real estate portfolio to shore up its finances. In a move that was widely expected, the retailer on Wednesday said that it is forming a real estate investment trust. The newly formed REIT, called Seritage Growth Properties, will purchase and lease back 254 Sears and Kmart stores for more than $2.5 billion. (Sears owned or leased 1,725 Sears and Kmart stores as of Jan. 31.)



In addition, Sears announced it is partnering with General Growth Properties to form a joint real estate venture. The chain will contribute 12 Sears properties located in GGP malls. In exchange, Sears will receive $165 million and a 50% stake in the venture, which is valued at $330 million. Sears will continue to run the 12 Sears stores.



“Today’s announcement demonstrates our ability to unlock a small portion of Sears Holdings’ vast and valuable real estate portfolio, and represents an important step in the continued transformation of Sears Holdings,” stated chairman and CEO Eddie Lampert. “We continue to show that Sears Holdings is an asset-rich enterprise with multiple levers to generate financial flexibility, while creating shareholder value.”