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.
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:
Type 1: Sears Holdings can be kicked out for other uses at a moment's notice. (A liquidation sale still occurs.)
Type 2: Sears Holdings remains in AT LEAST half of the building if another party were to express interest in opening a store/restaurant on said site. This also includes any attached or detached auto centers. (The exception to this half rule is if the Kmart or Sears store on site closes.)
Type 3: Sears Holdings no longer operates at all.
Type 4: Land Lease. Strategic Growth does not own the land on which the property is located
To see if your local Kmart or Sears is affected, here's a document about Strategic Growth. Properties included in the REIT plan can be found by scrolling to page 75 of the document or clicking the link for properties.
http://www.sec.gov/Archives/edgar/data/1628063/000119312515114974/d836914ds11.htm
http://www.sec.gov/Archives/edgar/data/1628063/000119312515114974/d836914ds11.htm
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.
Creative re-acronym!
ReplyDeleteYeah, had to get my two cents in there!
DeleteInteresting. I came across REIT when I was doing my Signature Inn blog research, and it makes sense now...Jameson Inns was put into REIT status in 2006; by the end of 2012 their location list was only a fraction of what it used to be (12, down from over 100)
ReplyDeleteYeah, REIT seems like a way to slowly kill what remains of a chain.
DeleteI goofed...the REIT was dropped in 2006. Still, they didn't fare too well 6 years after the fact
Delete