Sears Closures Add Millions of Square Feet to Commercial Real Estate Market

Beleaguered retail behemoth Sears is considering liquidation, which would add an estimated millions more square feet of unused commercial space nationwide, Forbes reports. Since it announced bankruptcy last October, Sears has either closed or plans to close 260 of its 700 retail locations. In 2015, Sears Chairman and former CEO Eddie Lampert created the real estate investment trust Seritage Growth Properties, seeking to capitalize on the real estate value of Sears’ holdings; however, there is no indication if this was done in light of bankruptcy considerations. 

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Sears Files for Bankruptcy

Sears Holdings has filed for Chapter 11 bankruptcy following its inability to make a $134 million debt payment, which was due Monday, CNN Business reports. The company’s chairman and largest shareholder, Eddie Lampert, gave up the title of CEO. Last month, Lampert proposed restructuring Sears’ finances in order to avoid filing for bankruptcy; however, the creditors instead decided to head to bankruptcy court. With the advent of online shopping and big box stores, Sears has been struggling for several years. The last profitable year for the 132-year-old company was 2010. In addition to the 46 store closings planned for next month, the company will also close 142 stores near the end of the year.

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CEO of Sears Proposes Rescue Plan to Avoid Bankruptcy

Upcoming debt payments and a limited cash flow loom over Sears Holdings Corp. CEO Edward Lampert tells the Wall Street Journal. In order to avoid a bankruptcy filing, Lampert, who is also Sears’s chairman, controlling shareholder and biggest creditor, is encouraging creditors to restructure over $1 billion of debt coming due in the next two years. He also proposes that the Sears board sell an additional $1.5 billion of real-estate and divest $1.75 billion of assets, which would include Sears Home Services and the Kenmore appliance brand.  In August, Lampert made an offer to buy the brand for $400 million in cash, but the board has yet to approve it. His proposal requires approval from multiple stakeholders, including Sears’s independent board committee and bondholders.

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