Washington Prime Group Inc. has signed an agreement to acquire four Sears stores in a sale-leaseback transaction.
Under the terms of the deal, whose purchase price was put at $28.5 million, Sears will continue to operate the properties (for a time) under new leases with Washington Prime, which will have control of the sites for future redevelopment. Aggregate base rent under these leases is approximately $1.25 million per year.
In addition, Sears will be responsible for paying common area maintenance charges, taxes, insurance and utilities. The four stores are located at Longview Mall, in Longview, Texas; Polaris Fashion Place, located in Columbus, Ohio; Southern Hills Mall, located in Sioux City, Iowa; and Town Center at Aurora, located in Aurora, Colorado. All four include adjacent Sears Auto Centers.
“When Washington Prime Group is presented with the opportunity to improve a Tier One asset via retrofit of an underutilized department store space, it is imperative we act accordingly,” said Lou Conforti, CEO and director, Washington Prime. “Sears will continue to operate these locations for a period of time that provides us with a suitable timeframe to evaluate the best adaptive reuse.”
Washington Prime said plans for the redevelopment of the four properties will be announced in the future.
Upon completion of the acquisition, Washington Prime will have the right to terminate each store lease under certain circumstances as stated in each lease. Termination cannot occur between November 1 of a calendar year and January 15 of the next following calendar year. In the event Sears decides to no longer operate these locations, the company will have the right to terminate the applicable lease upon 30 days' prior written notice.