Seritage Selling Assets Because No One Wants The Whole Company

Courtesy of Seritage Growth Properties
A Seritage Property In San Diego

Retail property owner Seritage Growth Properties is selling its assets piecemeal, the company said in a filing with the Securities and Exchange Commission.

Over the course of this year, Seritage's financial adviser, Barclays, approached about 20 potential buyers to take it as a whole, but none of them were interested, the filing says.

Sales of individual assets have so far generated a little more than $410M, which represents the sale of 45 properties and joint venture interests. The company says that it also has pending sales totaling about $400M.

As of October, the outstanding principal balance owed by Seritage to Berkshire Hathaway was $1.27B, after taking into account $170M of loan prepayments, the filing noted.

Earlier this year, Seritage said it was exploring a sale, as well as transitioning from a REIT to a standard corporation. At the time, it owned an interest in 170 retail properties totaling about 10M SF, plus about 600 developable acres.

The company was formed in 2015 to sell off a retail real estate portfolio acquired from Sears Holdings, including former Sears and Kmart locations. By this year, Seritage no longer had any former Sears or Kmart locations.

When word of the filing broke, investors took note, with shares in Sertiage rising from about $8.30 at the close of trading on Friday to nearly $10 at the close on Monday. The price continued to inch upward early Tuesday.

Since this time last year, however, Seritage has dropped from about $15 a share, a loss of roughly 30%.

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