Commentary: Shopping center owner ahead on the curve on Sears
Sears Holdings Corp.’s acknowledgement in a filing on Tuesday that the retailer had “serious doubt” about its future came as no big surprise to the retail industry, including Joseph Coradino, chairman and CEO of PREIT, a publicly traded real estate investment trust that owns and manages 23 million square feet of retail and lifestyle space.
Coradino explains his firm’s strategy with regards to Sears in the commentary below.
"It has been no secret in our industry that this possibility would come. PREIT’s perspective has been to get ahead of the curve so we wouldn't find ourselves in a highly competitive environment with significant inventory available.
We have been hard at work proactively replacing Sears stores throughout our portfolio in addition to aggressively selling properties we did not want to allocate shareholder capital to. This effort has resulted in a sharp reduction in the presence of Sears and Kmart stores in our portfolio, from 27 in 2012 to nine-and-a-half today (Sears subleased its Willow Grove, Pa., store to Primark which opened last year.) Notably, Sears is no longer one of our top 20 tenants. Just five years ago, they ranked 7th in our portfolio.
Today, we have under construction four former Sears stores and one former Kmart in a portfolio of only 24 properties, so you can see this has been a high priority for the company. These were operating stores that we requested to terminate or buy from Sears.
The exciting tenants we have secured as replacements highlight the power and quality of the new portfolio we have created and consumer demand for differentiated offerings in the mall setting.
The replacement tenants are listed below:
Sears
• Viewmont Mall: Dick's Sporting Goods / Field & Stream and HomeGoods – opening 2017
• Capital City Mall: Dick's Sporting Goods – opening 2017
• Magnolia Mall: Burlington Stores – opening 2017
• Woodland Mall: Von Maur – opening 2019
KMart
• Exton Square Mall: Whole Foods – opening 2017/2018"