HOFFMAN ESTATES, Ill. and
SANTA MONICA, Calif., April 30, 2015 /PRNewswire/ -- Sears
Holdings Corporation (NASDAQ: SHLD) ("Sears Holdings") and The
Macerich Company (NYSE: MAC) ("Macerich") today announced that they
have formed a joint venture (the "JV") as part of Sears Holdings'
continued efforts to enhance its financial flexibility and generate
value from its real estate portfolio.
Sears Holdings contributed nine properties where Sears currently
operates stores located at Macerich malls to the JV, including
property with space leased to third parties. Sears Holdings will
lease back from the JV and continue to operate existing Sears
Holdings stores at the properties contributed to the JV.
Macerich contributed $150 million in
cash to the JV, which has been distributed to Sears Holdings.
The lease arrangements between Sears Holdings and the JV provide
the JV with the ability to create additional value through
recapturing certain space leased to Sears Holdings in the
contributed properties and re-leasing that space to third-party
tenants.
"Since the filing of the registration statement for Seritage
Growth Properties a few weeks ago, we have entered into JV
agreements with the leading mall operators in the U.S.,
demonstrating the value of Sears Holdings' real estate portfolio,"
said Edward S. Lampert, Chairman and
CEO of Sears Holdings. "We are pleased to be in a position to
unlock substantial value for Sears Holdings shareholders and
further facilitate the company's transformation. Through
these transactions, we have additional capital to invest in our
membership and integrated retail platforms. We will continue
to operate these nine stores and there will be minimal impact on
their day-to-day operations or the overall shopping experience for
our members."
Arthur Coppola, Chairman and CEO
of Macerich, stated, "This new joint venture with Sears Holdings is
in line with our overall strategy of reinvesting capital into our
portfolio of proven, highly profitable locations. The nine
properties being contributed to the JV are located at centers with
average in-line sales of $680 per
square foot and include some of our top centers including
Washington Square, Los Cerritos Center, Arrowhead Towne Center,
Vintage Faire Mall, Danbury Fair Mall, Chandler Fashion Center,
Freehold Raceway, Deptford Mall and South Plains Mall. Through
ongoing space optimization, we expect this transaction to create
significant value for shoppers, tenants and shareholders
alike."
Transaction Structure
The total purchase price for the 9 properties in the transaction
is $300 million. In exchange for
$150 million and a 50% JV interest,
Sears Holdings contributed to the JV the 9 properties located at
Macerich malls where Sears Holdings currently operates stores.
Macerich contributed $150 million in
cash for its 50% JV interest, which has been distributed to Sears
Holdings in accordance with the terms of the agreements between the
parties.
Proposed Relationship with Seritage Growth Properties
On April 1, 2015, Seritage Growth
Properties ("Seritage"), a real estate investment trust formed by
Sears Holdings, filed a registration statement on Form S-11 with
the Securities and Exchange Commission, providing for a planned
distribution of subscription rights to purchase Seritage shares to
Sears Holdings stockholders. Shortly following the consummation of
the rights offering, Sears Holdings expects Seritage to purchase
its 50% JV interest for a price equal to that paid by Macerich for
its JV interest.
Other Terms
The JV will lease back existing stores to Sears Holdings under a
triple-net master lease agreement (the "Master Lease"), with a ten
year initial term and two five-year renewal options. Sears
Holdings' initial base rent under the Master Lease will be
approximately $14.8 million.
Under the Master Lease, the JV has the ability to recapture a
specified portion of the space leased to Sears Holdings.
Following such recapture, the JV will be able to re-lease this
space to other parties at potentially higher rents. The recapture
provisions and termination rights within the Master Lease will
enable Sears Holdings to continue its transformation into a more
asset-light retailer with less dependence on physical store
locations, and will allow the JV to create additional value through
the re-configuration and re-development of its properties.
Sears Holdings and Macerich will have equal representation on
the executive committee that will govern the JV.
Forward-Looking Statements
Sears Holdings Corporation
This press release contains forward-looking statements, which
are based on the current beliefs and expectations of our management
and are subject to significant risks, assumptions and uncertainties
that may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by these forward-looking
statements. For a discussion of such risks, assumptions and
uncertainties, see "Risk Factors" and the forward-looking statement
disclosure contained in our most recent Annual Report on Form 10-K
and other filings filed with the Securities and Exchange
Commission. While we believe that our forecasts and assumptions are
reasonable, we caution that actual results may differ
materially. We intend the forward-looking statements to speak
only as of the time made and do not undertake to update or revise
them as more information becomes available, except as required by
law.
The Macerich Company
This release contains statements that constitute forward-looking
statements which can be identified by the use of words, such as
"expects," "anticipates," "assumes," "projects," "estimated" and
"scheduled" and similar expressions that do not relate to
historical matters. Stockholders are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to vary
materially from those anticipated, expected or projected. Such
factors include, among others, general industry, as well as
national, regional and local economic and business conditions,
which will, among other things, affect demand for retail space or
retail goods, availability and creditworthiness of current and
prospective tenants, anchor or tenant bankruptcies, closures,
mergers or consolidations, lease rates, terms and payments,
interest rate fluctuations, availability, terms and cost of
financing and operating expenses; adverse changes in the real
estate markets including, among other things, competition from
other companies, retail formats and technology, risks of real
estate development and redevelopment, acquisitions and
dispositions; the liquidity of real estate investments,
governmental actions and initiatives (including legislative and
regulatory changes); environmental and safety requirements; and
terrorist activities or other acts of violence which could
adversely affect all of the above factors. The reader is directed
to the Company's various filings with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2014, for a
discussion of such risks and uncertainties, which discussion is
incorporated herein by reference. The Company does not intend, and
undertakes no obligation, to update any forward-looking information
to reflect events or circumstances after the date of this release
or to reflect the occurrence of unanticipated events unless
required by law to do so.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading
integrated retailer focused on seamlessly connecting the digital
and physical shopping experiences to serve our members - wherever,
whenever and however they want to shop. Sears Holdings is home to
Shop Your Way®, a social shopping platform offering members rewards
for shopping at Sears and Kmart as well as with other retail
partners across categories important to them. The Company operates
through its subsidiaries, including Sears, Roebuck and Co. and
Kmart Corporation, with full-line and specialty retail stores
across the United States. For more
information, visit www.searsholdings.com.
About Macerich
Macerich, an S&P 500 company, is a fully integrated
self-managed and self-administered real estate investment trust,
which focuses on the acquisition, leasing, management, development
and redevelopment of regional malls throughout the United States.
Macerich currently owns 55 million square feet of real estate
consisting primarily of interests in 51 regional shopping centers.
Macerich specializes in successful retail properties in many of the
country\'s most attractive, densely populated markets with
significant presence in the Pacific
Rim, Arizona, Chicago and the Metro New York to Washington, DC corridor. Additional
information about Macerich can be obtained from the Company's
website at www.macerich.com.
NEWS MEDIA CONTACT:
Sears Holdings Public
Relations
Chris Brathwaite
(847) 286-8371
Macerich
John Perry
SVP, Investor Relations
(424) 229-3345
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SOURCE Sears Holdings Corporation