Seritage Exploring Sale As REIT M&A Builds On Record Year

M&A, mergers, acquisitions, JV

Seritage Growth Properties is exploring a possible sale, Bloomberg reports, citing anonymous sources. The company was formed in 2015 to sell off a retail real estate portfolio acquired from Sears Holdings, including former Sears and Kmart locations.

New York-based Sertiage no longer has any former Sears or Kmart sites. Rather, it owns an interest in 170 retail properties totaling about 10M SF nationwide, along with 600 developable acres and 850 acres it plans to sell.

Seritage is open to a full sale of the company or selling its assets in a piecemeal fashion. Possible buyers include private equity firms and real estate companies, but also its chairman, Eddie Lampert, Bloomberg reports.

Seritage shares rose more than 13% on Monday. Over the last year, however, its shares have dropped more than 51%.

Seritage's possible sale is the latest in a raft of M&A deals and possible deals among REITs. Such deals totaled $108B through the first three quarters of 2021, setting an all-time annual record even before the fourth quarter was tabulated.

Last week, the largest two medical office REITs were reported to be in merger talks. On Monday, Healthcare Realty Trust agreed to buy Healthcare Trust of America for a bit more than $35 a share. The combined entity will have a market cap of about $17.6B, with 727 properties totaling 44M SF.

Also on Friday, Paramount Group said that it had received an unsolicited proposal from Monarch Alternative Capital to acquire all of its outstanding common stock for $12 per share in cash. New York-based Paramount Group is a REIT that owns Class-A office properties in Manhattan and Downtown San Francisco.

In the industrial sector, LXP Industrial Trust, a REIT that owns single-tenant warehouse and distribution real estate assets, said that it is reviewing strategic alternatives, including a possible sale.

On Monday, Industrial Logistics Properties Trust completed its previously announced acquisition of Monmouth Real Estate Investment Corp. for $21 per share in an all-cash deal valued at about $4B. Monmouth had been the subject of bidding between Sam Zell's Equity Commonwealth and Barry Sternlicht's Starwood Capital Group, neither of which prevailed.

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