While few people are shopping at Sears these days, even fewer have ever considered shopping for a Sears. But, via the magic of online auctions, it will be a coming-soon opportunity for the adequately capitalized.
The troubled department store chain is hoping to leverage the remaining value in its real estate holdings, and reports from The Wall Street Journal indicate that the web will (perhaps ironically) be the place the company is looking to unload them.
Real Insight Marketplace, an online auctions platform, will be working with real estate services firm Cushman & Wakefield to help Sears sell 16 profitable store locations. Of the lot, 15 are attached to malls, and all are being offered as sale or lease back deals. Some of the properties have agreements that make changing the use for the space fairly easy. Those spaces could be utilized for storage or transformed into residential or hotel properties.
“We feel that is the best method,” said James Shevlin, managing director at CWCapital LLC, a commercial real estate services firm that owns Real Insight Marketplace, of the online auction. “It’s highly transparent for everyone and levels the playing field.”
“The offering has been pushed out to about 10,000 investor groups, of which about 200 have showed some early interest. Potential investors range from developers, retailers and real estate investment funds,” said Sean Hayes, managing director at Cushman & Wakefield.
Those intent on bidding must make their interest known by May 1. The shortlisted bidders will then be invited to bid and compete with each other in real time on an online platform hosted by Real Insight Marketplace in the second round, which could take place a few weeks later.
Sears has been struggling for some time. Until recently, the retailer held a S&P Global Ratings corporate credit rating of “SD,” or “selective default,” which is assigned when a company has selectively defaulted on a specific issue but will continue to meet its payment obligations on others. That increased on Monday to a “CCC” in light of debt extensions, progress on cost reductions and access to new liquidity notched by Sears.