I know this old news, but I still am going to make a post about the stupidness of companies' increased interested in establishing REIT for their previously owned corporate properties, especially if you are a company that is struggling financially.
Unless you don't pay attention to retail news, you would have likely heard of the new trend of companies establishing a REIT (Real Estate Investment Trust) for their stores. If you ask me, this whole REIT plan is a way to really establish increased trouble for the companies involved. Sears Holdings is the obvious company this post is about, but there are more and more companies at least expressing interest in doing the same. Bon Ton followed Sears example, but unlike Sears, only put a handful of their stores on a REIT.
Sears Holdings has put many of their previously corporate owned stores as a part of their 'Strategic Growth.' Sure, Sears gains some profit now, but in the long run, all these stores that were previously owned by corporate are now being leased. Now Sears is adding even more burden to itself by having to pay lease on buildings it previously did not. Obviously, this leads to the conclusion that these stores, my local Kmart store included, are more likely to close. I hate saying this as a fan of Kmart, but I can see my local store closing in the future since it is on the REIT.
In the Twin Tiers Blog coverage area, the following Sears Holdings locations are a part of the Strategic Growth property list:
Sears:
Clay, NY (Great Northern Mall)
Johnson City, NY (Oakdale Mall)
Rochester, NY (Mall at Greece Ridge)
Victor, NY (Eastview Mall)
Kmart:
Olean, NY (my local store)
All the properties listed above are Type II properties, an explanation is below:
I do know Bon Ton has established a real estate investment trust, but I could not find any list for stores included, so can not tell if you any are affected in the Twin Tiers coverage area.
Like I said at the beginning of the post, I realize this is old news. But, it does affect the Twin Tiers coverage area, so I thought a post about REIT would still be a good idea. Hopefully my local store doesn't close, but if it ever does, you can be sure that I'll be there to take pictures.