12/03/2018 | by Nareit Staff
Seritage Says 70% of Signed Lease Income Coming from Non-Sears Tenants

Benjamin Schall, president and CEO of Seritage Growth Properties (NYSE: SRG), participated in a video interview at Nareit’s REITworld: 2018 Annual Conference in San Francisco.

Seritage was spun off from Sears Holding Corp. in 2015.

Schall noted that the REIT ended the third quarter with 70 percent of its income on a signed lease basis coming from non-Sears tenants. “That income is now with new, growing retailers who are attracted to the quality of our sites and the first-class environments that we’re developing,” he said.

Asked about the potential impact on investors if Seritage’s master lease with Sears were to end, Schall said the company has “more than sufficient” income coming online in the next 12 to 24 months from its commenced and completed redevelopment activity.

Seritage also has about $1 billion in cash on hand due to the closing of a term loan, Schall said, giving the REIT capital to complete its current projects and cover any potential shortfalls from Sears’ income.

Schall pointed out that in the past three-and-a-half years, Seritage has re-leased roughly 7 million square feet and increased rents from about $4 per square foot to $18 per square foot.

Looking ahead, Schall said Seritage will continue to work to unlock value through intensive redevelopment, both in suburban settings and in larger scale projects where it’s integrating retail with mixed use, and often adding significant density.