Seritage Growth Properties Provides Tenant Activity Update

6/4/20

NEW YORK--(BUSINESS WIRE)--Seritage Growth Properties (NYSE: SRG), a national owner of 203 retail and mixed-use properties totaling approximately 32.2 million square feet, today provided an update related to its master lease (the Holdco Master Lease) with Transform Holdco LLC and other tenant activity in light of the COVID-19 pandemic.

On June 3, 2020, the Company entered into an amendment to the Holdco Master Lease which includes the remaining 17 Sears and Kmart stores in the Company’s wholly-owned portfolio. Pursuant to the amendment:

  • The Company will terminate the Holdco Master Lease at 12 stores, each of which Sears has the right to terminate without penalty on March 1, 2021 under the terms of the Holdco Master Lease, in return for a termination payment of $5.3 million payable upon the earlier of the completion of going-out-of-business sales or September 30, 2020; and
  • The Company will allow Sears to defer 100% of base rent at five stores for six months (April 2020 through September 2020) with the deferred rent payable over a 12-month period beginning October 2020. Sears will continue to pay all other additional rent (representing real estate taxes, utilities, common area maintenance and other property operating expenses) during the deferral period.

Also, as of June 3, 2020:

  • 224 of the Company’s 280 in-place tenants, or approximately 80% of such tenants, were open and/or operating, including 171 stores that were fully open and 53 stores that were open for pick-up and/or delivery.
  • The Company had collected April rental income representing 65% of contractual amounts, and agreed to defer an additional 6%, from tenants other than Sears.
  • The Company had collected May rental income representing 52% of contractual amounts, and agreed to defer an additional 6%, from tenants other than Sears.

In addition, as of June 3, 2020, the Company had completed the sale of ten assets representing $105 million of gross proceeds year to date, including six assets for gross proceeds of $45 million during the second quarter.

About Seritage Growth Properties

Seritage Growth Properties is a publicly-traded, self-administered and self-managed REIT with 175 wholly-owned properties and 28 joint venture properties totaling approximately 32.2 million square feet of space across 44 states and Puerto Rico. The Company was formed to unlock the underlying real estate value of a high-quality retail portfolio it acquired from Sears Holdings in July 2015. The Company’s mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experiences for consumers and local communities, and create long-term value for our shareholders.