Three years ago, Sears sold 235 stores to Seritage Growth Properties for $2.7 billion, and while Sears stores continue to lose hundreds of millions of dollars every year, many new developments are rising in the footprints of their former properties, according to The New York Times.
From a mixed-used office space in Santa Monica, Calif., fueled by a growing tech industry, to a luxurious shopping center in Aventura, Fla., and a proposed 600-unit apartment complex in Hicksville, N.Y., Seritage is investing heavily in redevelopment of former Sears properties. Warren Buffett recently lent the company $2 billion to help fund the projects, which led Seritage stock to rise 14 percent in one day.
However, Seritage's repurposing of Sears properties has drawn criticism from many Sears shareholders. Edward Lampert is chairman of both Sears and Seritage, while also holding a significant stake in both companies. As Seritage redevelops its best Sears locations and continues to collect rent from stores still in operation, multiple lawsuits from Sears shareholders claim Mr. Lampert is stripping Sears down for his own profit while the company withers.
"This is a play to wring the last drop of value from Sears until there is nothing left," said Mark Cohen, a former CEO of Sears Canada. "And it’s working. They are keeping the patient on life support while Seritage withdraws rent money and lines up new tenants. There is something really wrong with this picture."