Sears (NYSE:SHLD) has formed a joint venture with The Macerich Company as part of the retailer's continued efforts to give financial flexibility to its real estate portfolio.
Sears has contributed nine operative properties in Macerich malls, including property with space leased to third parties. Sears will lease back from the joint venture and continue to operate existing stores at the properties.
Macerich contributed $150 million in cash to the joint venture and the arrangements will provide the ability to create additional value by re-leasing that space to third-party tenants.
"Since the filing of the registration statement for Seritage Growth Properties a few weeks ago, we have entered into JV agreements with the leading mall operators in the U.S., demonstrating the value of Sears Holdings' real estate portfolio," said Edward Lampert, Chairman and CEO of Sears Holdings. "We are pleased to be in a position to unlock substantial value for Sears Holdings shareholders and further facilitate the company's transformation. Through these transactions, we have additional capital to invest in our membership and integrated retail platforms."
The total purchase price for the nine properties is $300 million, with both Sears and Macerich contributing $150 million.
Earlier this month Sears made a deal with Seritage Growth Properties to buy and lease back about 254 Sears and Kmart stores. An additional 12 stores will be sold as part of a joint venture with General Growth Properties. In total, the REIT was set up to raise more than $2.5 billion in much needed cash for Sears. In a similar deal, Sears entered into a joint venture with Simon Property in which the retailer contributed 10 properties located at Simon malls.
-See this Sears press release
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