• Blog
  • What the Sears Bankruptcy Means for the Real Estate Behind the Stores

What the Sears Bankruptcy Means for the Real Estate Behind the Stores

What does the Sears bankruptcy mean for Seritage Growth Properties, the real estate investment trust that Eddie Lampert spun off Sears in 2015 in a bid to capitalize on the underlying real estate value of over 200 Sears properties?

Share prices have dipped over the past week as Seritage has been trying to calm investors. The REIT is telling shareholders that $1 billion in cash plus its August loan from Warren Buffett‘s Berkshire Hathaway for up to $2 billion would cover any shortfall in cash flow ‒ but rental income could certainly take a hit in the short term as Sears closes more stores, the Wall Street Journal reported this week.

Most of the 74 stores Sears closed after Seritage was created are partly vacant, according to a shareholder letter cited by the Journal.

At roughly 100,000-280,000 square feet, each of those stores has a lot of space to fill, Stenn Parton, chief retail officer at real estate developer DJM Capital Management, told the Journal.  “It’s tough to find a retail tenant today that can backfill that space,” he said.

On the flip side, Seritage has been rapidly working on diversifying its portfolio and moving higher-paying tenants into the space. One way it is doing that is turning the large spaces provided by Sears store into something else entirely.

In Aventura, Florida, that something else is an open-air shopping village anchored by the luxury mall where Sears used to be just one commercial tenants of Aventura Mall on Biscayne Boulevard in Aventura, Florida, a high-end mall owned by Simon Property Group and Turnberry Associates that also includes department stores such as Nordstrom and Bloomingdales, and luxury retailers like Gucci and Cartier.

Sears and Sears Auto Center at Aventura Mall used to be a place for Florida residents to get an oil change or pick up a toaster oven.

But in late 2019, those two stores, along with parking lots near the mall, are slated to house a 215,000-square-foot, three-story open-air retail, dining and entertainment complex with outdoor plazas and a pedestrian boulevard. (Two additional levels will be designated for parking.)

The retailers and restaurants will be a mix of American and international businesses, many of which will be new to the south Florida market, and the complex is meant to attract tourists as well as residents. The space is located in one of the most affluent markets in south Florida, a few miles from the beach and 15-20 miles south of Miami and Fort Lauderdale.

“If they can do something that creates that community feel where it becomes more of a community hub, there are a lot of people that will choose that over an enclosed mall,” Zach Winkler, senior vice president of retail brokerage at JLL, told the Miami Herald. “What makes something potentially a destination is that you go there because you can’t get it anywhere else.”

At the same time, six Sears stores in Florida are slated to close, in areas including Panama City, Melbourne, Lakeland and Ocala.

Part of the plan

Seritage’s switch to a more experiential, high-end retail vibe that isn’t centered around Sears is part of the plan, with other sites for premier developments including Santa Monica and San Diego, the REIT said in its 2017 annual report.

Seritage has also been aiming for accelerated tenant diversification, reporting that by the end of 2018 it expects 65% of its income to come from non-Sears properties, up from 20% when it was first launched in July 2015. At that time, just 11 of the 266 assets in its initial portfolio did not have Sears Holdings as the primary tenant. By year-end 2017, 111 assets in the portfolio no longer had Sears as the primary tenant.

And when Sears moves out, tenants providing higher rent income tend to move in.

Seritage said it is earning almost as much rental income on the partially rented stores as it was when the space was fully rented to Sears ‒ a trend that a leading Seritage shareholder said could ultimately make the Sears bankruptcy a good thing for Seritage, the Journal reported.

Whether Seritage was a good thing for Sears is another question entirely.

Harness the power of CRE finance data
Related stories:
This European Lender Is Beating Out U.S. Banks on CRE Financing in New York City. And No, It’s Not German
CMBS Delinquency Rate Expected to Stay at Post-Crisis Lows, but Retail Remains a Concern
Is Commercial Real Estate Lending on the Decline?
Close Menu

book your personalized
cre data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















increase your lending
opportunities.
speak with a credifx
representative today.





increase your lending
opportunities.
speak with a credifx
representative today.





request a credifi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





request a credifi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





increase your lending
opportunities.
speak with a credifx
representative today.





increase your lending
opportunities.
speak with a credifx
representative today.





decure the financing
you need.





secure the financing
you need.





how would you like
your cre data
delivered





request a credifi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





request a credifi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





request a credifi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





How would you like
your cre data
delivered





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















book your personalized
cre data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.

















We track over
10,000 CRE lenders.
What data would
you like to demo?

















book your personalized
cre data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.

















Discover new opportunities.
Speak with a CredifX representative today.





Increase your lending opportunities.
Speak with a CredifX representative today.





Demo our up-to-date
ownership & contact
information.





We track finance data
on all U.S. markets.
Which market's CRE data
would you like to demo?





We track over
10,000 CRE lenders.
What data would
you like to demo?





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Find the lenders who
give you the best terms –
not just the ones you
already know.

Gain access to CRE finance data on 6M properties & 4M loans.





Secure the financing
you need.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





View Madison Realty
Capital's lending profile,
documenting recent loan,
owner and property information.





How would you like
your CRE data
delivered?





Demo our up-to-date
lender, owner & contact
information.





Demo our up-to-date loan,
ownership & contact
information.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Request a CrediFi
demo today.

Gain access to CRE finance data on 6M properties & 4M loans.





Book your personalized
CRE data consult today.

Gain access to CRE finance data on 6M properties & 4M loans.





Alex Veksler

Head of Content

Alex Veksler has 16 years of finance, data analysis and project management experience. He is a former vice president at Morgan Stanley, where he worked on product control of equity and fixed-income derivatives products as well as various projects involving finance and technology, such as revamping risk attribution and balance-sheet systems for profits and losses. Alex has previously worked at hedge funds, most recently as a director at Exigent Capital. He has a bachelor’s in computer science from Yeshiva University and an MBA from New York University.

Ely Razin

CEO

Ely Razin founded CrediFi in 2014 with Battery Ventures. A rare combination of seasoned corporate executive and technology entrepreneur, Ely previously served as global head of board governance for Thomson Reuters Accelus and head of business law for Thomson Reuters, after the software company he founded was acquired in 2004. The company, Expert Ease Software, developed AI-based software that automatically summarizes key deal terms for transactions in fields including capital markets, M&A and real estate. Ely began his career as a corporate and securities lawyer, and holds an LLB and MBA from York University.

Frank Muhlon

Head of Transactions

Frank Muhlon oversees CredifX, the commercial real estate financing marketplace that mines the CrediFi database at its core. Prior to joining CrediFi, Frank served as vice president of Northeast region business operations for online CRE property trading platform Ten-X, which has closed over $40 billion in transactions since its inception. He has also held key positions at Orix USA/Houlihan Lokey, Silverstein Properties and Trammell Crow Company. Frank received his master’s degree in real estate finance from New York University and his bachelor’s in finance from Rutgers University.

Charles Mctiernan

Head of Sales

Charles Mctiernan comes to CrediFi from Ned Davis Research Group and Roubini Global Economics, where he was the global head of sales. He also spent more than 10 years at Reuters America Holdings, where he held a number of senior sales leadership roles, including head of solutions sales and head of global accounts. Charles, who received his bachelor’s in economics from East Carolina University, has more than 25 years of experience in technology, data and research sales.

Amichai Levy

VP R&D

Amichai Levy is the former VP of R&D at Israeli high-tech firm Payoneer, where he developed its signature cross-border payment platform and integrated it with existing bank technology. In his prior role at Ness Technologies, Amichai was a key player in developing an electronic case filing system for Israel’s courts. He has over 20 years of experience in software engineering.

David Fajgman

Head of Finance

David Fajgman brings over 14 years of financial and managerial experience to CrediFi. Prior to joining the CrediFi team, he served as finance director of Bioness Neuromodulation Ltd., which develops and manufactures medical devices involved in neurological rehabilitation. He has previously worked in multiple finance roles at Thomson Reuters and as an accounting and consulting manager at Ernst & Young, where he was responsible for a wide range of clients, including companies listed on the Nasdaq and privately held high-tech companies. David is an Israel-licensed certified public accountant and has a bachelor’s degree in business and accounting.

Liat Bar David

Head of Human Resources

Liat Bar David has over nine years of human resources experience, primarily focused on the high-tech industry. She is a former HR business partner at semiconductor solutions provider Broadcom, where she was responsible for onboarding processes, benefits, policies, training and development, performance management and employee retention. Liat holds a bachelor’s in communication and human services and a master’s in human resources and services, both from the University of Haifa.