CBL & Associates Properties, Inc. has closed on a sale-leaseback deal for five Sears department stores and two Sears Auto Centers located in CBL-owned malls, including the Sears store at Brookfield Square.
The $72.5 million acquisition will allow Sears to continue to operate the department stores under new 10-year leases while CBL receives aggregate initial base rent of approximately $5.1 million.
Under the deal, Chattanooga, Tenn.-based CBL, which is one of the largest owners and developers of malls and shopping centers in the United States, has the right to terminate any of the leases at any time.
If terminated, Sears has the option to relocate its operation.
“We are pro-actively transforming our market-dominant shopping centers to meet the changing preferences of consumers,” Stephen Lebovitz, president & chief executive officer of CBL, said in a statement. “This transaction provides CBL with the opportunity to redevelop prime real estate and attract exciting new uses at some of our best shopping centers. The leaseback of the real estate by Sears will generate income to CBL and gives us control over the timing of closures while we finalize our redevelopment plans at each location.”
The other locations included in the sale leaseback are located in Chattanooga, Fayetteville, N.C., Cincinnati, Louisville, Ky, and Daytona, Fla.
The move could save the Brookfield Square Sears store, at least temporarily. The retail chain has struggled for years. Earlier this month, Hoffman Estates, Ill.-based Sears Holdings Corp., announced it would close 108 Kmart stores and 42 Sears stores nationwide this spring.
Several area Sears stores have already closed including stores at Bayshore Town Center in Glendale, Sheboygan and in Racine. The Racine store was located in Regency Mall, which had been owned by CBL until recently, when it was purchased by Augusta, Ga-based Hull Property Group $9.6 million.
