Sears closing more stores as game of financial Jenga continues

Posted on: Jan 05, 2017 @ 04:36 am
Publish Date: Jan 05, 2017 @ 04:36 am
Category: News

Sears (SHLD) has moved two more pieces in its game of financial Jenga. Seritage Growth Properties (SRG), the real estate investment trust that Sears CEO Eddie Lampert spun off from the retailer, said in an SEC filing Wednesday that Sears had exercised its right to terminate the leases on 19 unprofitable stores. The stores, which total 1.9 million square feet of space available for leasing, account for $5.9 million in rent, or 2.7 percent of the retailer's total annual base rent as of the end of September. Sears will continue paying rent to Seritage until it exits the space in April. It will also pay Seritage a termination fee of one year of the aggregate base rent, plus one year of estimated annual operating expenses. Separately, Sears said Wednesday that it had entered into a $500 million committed secured loan facility that will mature in July 2020. It is secured by mortgages on 46 properties owned by the company's subsidiaries. As of Wednesday, $321 million was funded under the loan facility. Up to an additional $179 million may be drawn in the future. If drawn, that $179 million will be secured by additional properties.