Sears Gets Big Break With $2B Loan From Warren Buffett's Berkshire Hathaway

Sears, facing major debt issues, just got a huge lift from Warren Buffett's Berkshire Hathaway.

Real estate mogul Warren Buffett
Real Estate Mogul Warren Buffett

Berkshire Hathaway agreed to lend $2B to Seritage Growth Properties, the real estate spinoff of Sears Holding Co., the Wall Street Journal reports. The loan is separated into two parts: a $1.6B fixed-rate loan and an additional $400M that Seritage can take out until 2023.

Seritage owns a major portion of Sears real estate after spinning off from Sears Holding Co. in 2015. Sears Holding, which also owns Kmart, defaulted on a $500M loan earlier this year. Berkshire Hathaway's $2B credit loan will go toward paying off other debt Seritage has accrued.

With a mountain of debt obligations resulting in wave after wave of store closures to shed expenses, analysts believe Sears has been in danger of entering bankruptcy for some time. With its fate inextricably linked to Sears, Seritage saw its stock increase in value by 13% as of press time after news broke of Berkshire Hathaway's loan.

Berkshire Hathaway head honcho Warren Buffett already owns 5.7% of Seritage outright, rather than through the company, which WSJ noted is far from commonplace. Though $2B may seem like a big bet on a company that has fallen out of favor with shoppers and landlords alike, Berkshire Hathaway is reportedly dealing from a $100B war chest.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

The Bridge-To-Bridge Bet Is Holding Off CRE's 'Day Of Reckoning' — For Now

Augmentation, Not Replacement: How AI Platforms Are Streamlining Front Desk Teams

Lawmakers Punt On Stripping Approvals From 15 Projects In Data Center Alley

Success Of Top-Tier Malls Masks Enduring Distress In Sector's Underbelly

HUD Launches Investigation Into Wells Fargo's Efforts To Support Black Homeownership

Holographic Zoo Leases 51K SF Coconut Grove Building For First Location

Delaware Statutory Trust Fundraising Jumps 27% From 2025

Hines Spends $170.5M On Mixed-Use Portfolio In Dallas' Bishop Arts District

Bank OZK Shares Drop After Citi Flags $915M Mortgage Concern

Local Investor Pays $30M For Block 37 In Heart Of Downtown Chicago

Soaring Yields Strand REITs In M&A No-Man's-Land

How UK Investment Giant L&G Plans To Grow Its U.S. Multifamily Holdings