Sears Files REIT Plans; Enters Separate JV With General Growth

Sears Holdings Corp. has filed plans for its real estate investment trust with the Securities and Exchange Commission. The REIT will be called Seritage Growth Properties, a Maryland trust company. The filing includes a rights offering by Seritage to partially finance the purchase of 254 properties operated as Sears and Kmart nameplates. Sears said proceeds from the sale, which will go to Sears, are expected to be over $2.5 billion. As part of the structure, Sears will enter into a master lease agreement to lease back the properties from Seritage. The subscription rights would be distributed on a pro rata basis to Sears shareholders. Edward S. Lambert, chairman and chief executive officer of Sears and chairman and ceo of ESL Investments, said they plan to exercise their pro rata subscription rights. Fairholme Capital Management has told Sears it expects its clients will also exercise the rights they receive in connection with the REIT. The rights offering is still subject to the approval of Sears’ board, and until the transaction closes, Sears can abandon or modify its terms. In a separate move, Sears and General Growth Properties Inc. entered into a joint venture for 12 Sears properties located at General Growth’s malls. Those sites include some

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