Investors - APRIL 2, 2015

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Sears to spin off properties into new REIT

by Zoe Loza

Sears Holdings announced April 1 that the retailer plans to raise $2.5 billion by spinning off at least 254 stores into a real estate investment trust. The REIT, called Seritage Growth Properties, will buy and lease back the Sears and Kmart stores.

This has been in the works since November 2014 and comes after three consecutive years of losses for the retailer.

Sears Holdings is the latest of many companies to launch a REIT, as the REIT structure has become increasingly popular in the past few years.

Pinnacle Entertainment, a gaming company with 15 casinos in eight states, announced plans to form a REIT in November 2014. Target Corp. has been considering doing the same since 2008. Industry research firm CoStar Group reports that it is tracking more than 30 firms that are considering potential REIT conversions or offerings.

Launching a new REIT allows a company such as Sears, which has seen significant financial losses, to regain some of what

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