Seritage Growth Properties gets $2 billion financing from Berkshire Hathaway

A real estate investment trust that was spun off from Sears Holding Corp. has secured new financing from an early investor.

Seritage Growth Properties, a national owner of 249 properties totaling over 39 million sq. ft. of space, announced that the company has entered into a $2 billion term loan facility with Warren Buffett’s Berkshire Hathaway Life Insurance Company of Nebraska. Buffett, an early investor in Seritage, is a top shareholder in the REIT, owning about 5.7% of its outstanding shares.

Seritage was formed in July 2015 when it acquired a portfolio of real estate from Sears Holdings. Although Seritage’s original focus was mainly on properties occupied by Sears, the company has been evolving as the retailer has closed stores. Seritage recently said Sears will eventually account for less than 35% of contractual rental income by year-end, according to Bloomberg, down from 80% when the business was established.

“This new financing is a transformational step in the evolution of our company, which we started three years ago, and positions us to further accelerate our role as a leading retail and mixed-use developer across the country,” said Benjamin Schall, president and CEO, Seritage Growth Properties. “We very much appreciate Berkshire Hathaway’s confidence in our team and platform, and are energized by our growing opportunities to create lasting value for our shareholders, partners and local communities.”

The new loan, which matures on July 31, 2023, provides for an initial funding of $1.6 billion at closing with an option borrow an additional $400 million.