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Sears real estate spinoff explores alternatives; Eddie Lampert exits board

business strategy
Seritage Growth Properties is exploring strategic alternatives for its business.

Seritage Growth Properties announced Tuesday it is exploring strategic alternatives for its business.

Seritage, the real estate investment trust that was spun out of embattled Sears’ in 2015, is a national owner and developer of 170 residential, retail and mixed-use properties. The company said that its board has started a review a broad range of strategic alternatives to enhance shareholder value.

Seritage also said that hedge fund millionaire and former Sears CEO Edward Lampert, chair of its board, is retiring, effective immediately. In a statement, Lampert, who owned a 22.1% interest in the company and about 9.3% of Seritage’s Class A shares as of the end of September, said he was retiring because he wanted “greater flexibility to explore alternatives for my investment in Seritage, which could include participating with parties that may be interested in acquiring certain of the company’s assets and trading shares in open market transactions.”

Andrea Olshan, who was named president and CEO of Seritage president in March 2021, said that the company’s board” and management believe that there is an ongoing disconnect between the company’s stock price and net asset value.”

“We believe that embarking on this process represents the most efficient way to unlock the full potential of this portfolio, she said. “We are committed to exploring a variety of opportunities to pull forward this value and deliver it to Seritage shareholders in the near-term.”

Olshan, who was named chief executive in has been focused on redeveloping the roughly 170 properties in which Seritage has interests.

“This includes diversifying our tenant base with high quality tech office, life sciences and medical tenants while improving rents and credit quality, pursuing densification opportunities and entitling properties for their highest and best use,” she said.  Our successful implementation of this strategy at UTC and Aventura demonstrates the strength and diversity of the portfolio and exemplifies the type of development execution and value creation currently underway at Seritage.

Seritage noted is in the early stages of the strategic review process and there can be no assurance that the review process will result in any transaction or any strategic change at this time.

In a press release last year, Seritage said it had terminated its leases connected to Sears and that, as of March 2021, it has no remaining exposure to Sears or Kmart.

As of September 30, 2021, the company’s portfolio consisted of interests in 170 properties comprised of approximately 10.0 million square feet of GLA or build-to-suit leased area (approximately 8.0 million at share), approximately 4.0 million of which is held by unconsolidated entities (approximately 2.0 million at share), approximately 600 acres held for or under development and approximately 10.0 million square feet of GLA or approximately 850 acres to be disposed of.

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