Sears Creates Venture With Macerich in $150 Million Deal

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Sears Holdings Corp.
Sears Holdings Corp. formed a joint venture with shopping-mall owner Macerich Co., the latest step in the department-store chain’s efforts to wring more money from its real estate. Photographer: Daniel Acker/Bloomberg

Sears Holdings Corp. formed a joint venture with shopping-mall owner Macerich Co., the latest step in the department-store chain’s efforts to wring more money from its real estate.

The 50-50 venture is taking over nine Sears properties, all of which are within Macerich malls, according to a statement Thursday. As part of the transaction, Macerich contributed $150 million to Sears. The Hoffman Estates, Illinois-based chain will continue to operate the stores involved in the deal.

The move is part of a broader effort to raise more than $2.5 billion from Sears’s extensive real estate holdings. The retailer formed a real estate investment trust called Seritage Growth Properties, which is buying hundreds of Sears and Kmart locations and leasing them back to the retailer. Sears also will contribute properties to ventures with two other mall operators, General Growth Properties Inc. and Simon Property Group Inc.

“We have entered into JV agreements with the leading mall operators in the U.S.,” Sears Chief Executive Officer Eddie Lampert said in Thursday’s statement. “We are pleased to be in a position to unlock substantial value for Sears Holdings shareholders and further facilitate the company’s transformation.”

For the mall landlords such as Santa Monica, California-based Macerich, the partnerships allow them to redevelop the anchor stores and add new tenants who would pay higher rent than Sears and also may draw more shoppers to the properties.

After the General Growth transaction early this month, Bloomberg Intelligence analysts Jeffrey Langbaum and Colin Winrow wrote that more such deals “may be in the offing as Sears works to maximize the value of its real estate, and REITs seek to upgrade tenant mix.”

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