Is This the REIT Path for Sears?

Today's post highlights Shelby County, TN, retail. And Lowndes County, MS. And a lot of other places around the US - perhaps what's coming soon to a Sears or Kmart store near you.

Look who's back! Toldja the posts might be infrequent. On that note, I think I'm scrapping the "other notable Krogers list" idea. Not to worry though, the décor posts are still in the works and I'll begin working on the first one as soon as possible. As stated, there will be eight of those, featuring mostly pictures... so that's something to look forward to (particularly after today's more text-based post)!

In the meantime, while you hold onto hope for those posts to come out soon, Sears Holdings is holding onto hope for survival - and barely, at that. This week the company created Seritage Growth Properties, a real estate investment trust (REIT), in an attempt to raise some money. 254 Sears and Kmart stores, as well as other third party companies either leasing land from or entirely separate from Sears Holdings, are all a part of the REIT. Sears is hoping this is "the key to unlocking the value inside the stock" - after all, "virtually the only thing of value remaining in the company is its land and buildings." The problem is, now Sears will have to depend on is "ability to continue as a retail operation...[which is] in terrible shape."

The full list of stores in the REIT, per flickr member catnapped1972, can be found here by scrolling to page 75 or hitting "Businesses and Properties" in the table of contents. My flickr friend Random Retail is quite familiar with the REIT because his local store in Olean, NY, is now a part of the trust. He also kindly elaborates for us uninitiated what the REIT entails for its properties:

Type 1: Sears Holdings can be kicked out for other uses.

Type 2: Sears Holdings remains in half of the building if a business would like to share the building as well as any auto centers detached or attached and pad sites. (Some exceptions may apply)

Type 3: Sears Holdings no longer operates at all [meaning they've closed already and the property is vacant but they still own it].

Type 4: Leases which the REIT leases land it is on, and does not own the land on which the property is located.

Here in the Mid-South, two major stores are now a part of Seritage Growth. The Sears Holdings property in Memphis, TN - which I deduce is at Laurelwood because On the Border is listed as a part of the REIT as well - is a Type 1 property, meaning Sears's days at there may well be numbered soon. The other Sears Holdings property is listed as being in Cordova, TN. As far as I can tell, and as odd as it may seem, this is the Sears at Wolfchase Galleria. I thought for sure this would be the former Super Kmart, but there's no mistaking Raleigh for Cordova. Either way, this listing is a Type 2 property, which might spell disaster for the auto center outparcel, or perhaps consolidation into one floor for the two-story anchor.

The Sears store at Wolfchase Galleria, courtesy of l_dawg2000. Another flickr member has pictures of the Laurelwood Sears, but since they're not currently active and I don't have their permission, I won't post those photos; I will, however, link to them - just click and scroll to the right in the album.

Those are the only two listings for Tennessee. Arkansas has a couple of listings, but they're not in the Mid-South, so I won't cover them. The lone Mississippi listing is itself barely part of the Mid-South, but since the NWS includes Lowndes County in its map, I suppose I'll include it in this post: Columbus, MS's, Kmart store is a Type 2 property. Also included in this particular property are quite a few adjoining businesses, including Enterprise, Smart Phone Clinic, Beautiful Nails, and Bokays (which means Sears Holdings owns quite a big portion of land in Columbus).

What does this mean for those stores? No one really knows (or, well, at least I don't). Sears is hoping to make some more money in the long run I'm sure, but in the process a lot of these stores are probably more susceptible to shutting down now... which doesn't bode well for Sears or Kmart stores. They're trying to keep things less publicized though - they're now quietly shuttering stores once their leases run out rather than releasing a giant list of store closures. Of course, this only makes for more uneasiness in shoppers and especially employees...

That's what's happening in the Mid-South and with Sears Holdings nationwide... in the meantime, have fun exploring the retail world wherever you are!

Retail Retell