Online auction of 15 Sears stores put on indefinite hold

31 May 2018

The planned auction of 15 Sears stores has been pulled from the RealINSIGHT Marketplace website pending a decision by the retailer as to whether to sell the properties individually or as a portfolio, according to James Shevlin, a managing director at CWCapital, which owns the online platform.
 
The decision to postpone the 31 May auction was made before the Memorial Day weekend, he said. A new round of store closures announced by Sears today did not factor into the decision, Shevlin said.
Sears said today that it will close 72 more properties, and that a list of the closing stores will be posted on its website around mid-day, as reported (see story, 31 May).
 
No new auction date has been scheduled, Shevlin said. The properties are still on the market but CWCapital pulled details from the site to avoid misleading people, he said.
 
“We’re kind of in a holding pattern waiting,” Shevlin said. “We thought [Sears would] have a decision and they didn’t.”
 
Sears is still reviewing indicative bids that were due by 1 May, and considering how best to maximize the properties’ value, he said. Shevlin is also waiting to learn whether any of the 15 properties are among those slated for closure.
 
Some market participants have said that earlier delays of the planned auction could be a sign of lackluster interest in retail boxes that are not easy to sell amid other store closures and falling retail real estate values, as reported (see story, 21 May).
 
But the delays are not unusual and should not be viewed as a sign of a lack of interest, Shevlin said. “We have generated a number of offers … there’s interest in those boxes,” he said. “But until there’s a decision of whether to sell individually or as a general portfolio we can’t move on. It’s up to them.”
 
Sears owns and currently fully occupies the spaces that are being sold. They range in size from 131,685 sq ft to 244,893 sq ft. Sears originally began marketing 16 US Midwestern and Texas locations for sale in early spring but the number was later trimmed to 15, as reported. Five of those stores are located in malls that back USD 467m in CMBS debt spread across five deals. While the Sears are anchor tenants at the property, none directly back any of that CMBS debt.
 
Last month, Shevlin said there was a lot of interest in the portfolio, but acknowledged that Toys “R” Us’ move to a liquidation process in March was a minor factor in Sears’ decision to delay its auction the first time, from April to May, as reported (see story, 23 April).
 
The Sears portfolio was the largest from a third-party seller that CWCapital has offered on its RealINSIGHT platform.
 
Cushman & Wakefield is brokering the offering. A Sears spokesperson did not respond.
 
by Maura Webber Sadovi