South Coast Plaza Buys Sears Land
Sears has run a department store and an auto center at the northeast end of luxe retail center South Coast Plaza in Costa Mesa, Calif., for 50 years.
Sears’ parent company, Sears Holdings Corp., owned the real estate where its compound was located. It was recently announced that South Coast Plaza acquired the land for an undisclosed amount. Debra Gunn Downing, executive director for marketing at South Coast Plaza, said that there are no current plans to move a new tenant into the space.
“South Coast Plaza and Sears have enjoyed a long and productive partnership for 50 years. We look forward to continuing that relationship with Sears and the many customers it serves through the South Coast Plaza location,” she said in a statement.
Sears has served as an anchor at South Coast Plaza for so long that the wing around the store is called the “Sears Wing.” Neighbors include the Uniqlo, Express and Bath & Body Works. South Coast Plaza announced that restaurants Barilla and Tsujita Artisan Noodle are scheduled to open in the wing before the end of the year.
The South Coast Plaza announcement comes a couple of weeks after Sears Holdings announced that it closed on over $200 million in real-estate deals, which cut into the company’s debt, according to a company statement. “[It] resulted in a pay-down of the April 2016 real-estate loan from $500 million to $347 million,” Sears Holdings said.
The 131-year-old company has been going through a period of great change. In January, the Chicago-area company announced that it would close 150 nonprofitable stores, including 108 Kmart stores and 42 Sears locations, to control losses. It also planned to generate $1 billion in liquidity through a $500 million real estate–backed loan. In addition, it sold its Craftsman tool line for $900 million to Stanley Black & Decker.
A Sears statement noted that the retailer would be transforming itself into a membership-focused retailer. In July, Sears started selling its Kenmore appliances on Amazon.com after selling the appliances only at its retail locations.
The retailer’s Sears Canada division started liquidation sales recently. According to media reports, 59 Sears and Sears Home stores have been scheduled to close.
There are changes planned for the Sears property in Santa Monica, Calif. The REIT Seritage Growth hopes to turn the 117,800-square-foot area into a mixed-use development with creative offices, retail and restaurants. The project is currently under review by the city of Santa Monica, according to people familiar with the project.