Some Sears Holdings locations are being sold online, eBay-style.
The retailer is attempting to offload 16 locations through auctions on the Real Insight Marketplace site, according to The Wall Street Journal. The sale and leaseback deals are being managed by Cushman & Wakefield, which reportedly began shopping the boxes around in February.
“We feel that is the best method,” James Shevlin, managing director at CWCapital LLC, the commercial real estate services firm that owns Real Insight Marketplace, told the paper. “It’s highly transparent for everyone, and levels the playing field.”
The retail services firm said it has some 200 interested parties. The deadline for requesting a place in the auction is May 1, after which point those that have been selected to participate will be invited to place bids.
In an effort to slash costs, Sears has been closing doors at a regular clip and with each earnings call, the management team has reiterated its commitment to mining the value from its properties—both intellectual and physical. This latest development follows last month’s transaction, which earned the retail group $28.5 million on the sale of four locations which it reserves the right to lease back.
Sears is not alone in this strategy. Rough economic times coupled with a surfeit of stores has chains looking to sell off property. J.C. Penney and The Bon-Ton Stores, which filed for bankruptcy in February, are among the department store chains that have boosted liquidity in this way.
In some cases, real estate developers have been happy to get the properties back since they represent opportunities to make more off of new tenants than they were off of the department stores—most of which pay a fraction of what other tenants pay. These reclaimed spaces also provide the chance to put in businesses that will be a bigger draw.
On Monday, leading mall owner Simon Property, announced plans to redevelop five Sears locations.
“We are excited to redevelop the former Sears stores with uses that will benefit the community and the existing retailers in these destinations,” said COO Michael McCarty.
Simon will use the space for a mix of residential, retail, restaurants and entertainment uses.