Seritage Growth Prop
Delayed Nyse - 07/19 10:02:01 pm

Seritage Growth Properties Announces Joint Venture Transactions With GGP Inc.

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07/20/2017 | 07:28 pm

By a News Reporter-Staff News Editor at Real Estate Weekly News -- Seritage Growth Properties (NYSE:SRG) (the "Company") announced that it has completed two transactions with GGP Inc. ("GGP") whereby the Company received gross consideration of $247.6 million. Pursuant to the transactions, the Company has (i) sold to GGP the Company's 50% interest in eight of the 12 assets in the existing joint venture between the two companies for $190.1 million; and (ii) sold to GGP a 50% joint venture interest in five additional assets for $57.5 million.

As a result of these transactions, the Company reduced amounts outstanding under its mortgage loan by $50.6 million and received approximately $171.6 million of additional cash proceeds before closing costs, which it intends to use to fund its expanding redevelopment pipeline and for general corporate purposes.

"Over the last two years, our partnership with GGP has commenced a series of value enhancing redevelopments at high-quality Sears locations attached to dominant GGP retail centers. The transactions announced allow Seritage to crystalize this value on eight of the existing 12 assets we held in partnership with GGP, and expand our partnership with GGP on five additional assets primed for redevelopment," said Benjamin Schall, President and Chief Executive Officer. "In addition, these transactions demonstrate our ability to tap into the value generated through redevelopment activity in order to redeploy capital into our next wave of accretive projects." Benefits of the Transactions Value Realization: as a result of leasing and development progress to date, the Company realized approximately $50.0 million of value creation above its basis across the 13 properties. The Company will continue to participate in the value creation opportunity at the remaining four assets in the original joint venture and the five new joint venture properties through its 50% ownership. Incremental Liquidity: the Company received approximately $171.6 million before closing costs of unrestricted cash proceeds and reduced the amounts outstanding under its existing mortgage loan by $50.6 million. In addition, the Company's share of future redevelopment costs was reduced as it no longer has funding obligations on the eight assets sold to GGP, and GGP will fund 50% of redevelopment costs at the five new joint venture assets as the properties are redeveloped. Continued Partnership: the Company and GGP will build upon our successful partnership and expect to unlock additional value through the joint venture's future redevelopment activities. Summary of the Transactions 1) The Company sold to GGP its 50% interests in the Sears parcels at the following eight assets for $190.1 million: - Coronado Center (Albuquerque, NM) - The Mall in Columbia (Columbia, MD) - Oakbrook Center (Oakbrook, IL) - Paramus Park (Paramus, NJ) - Pembroke Lakes Mall (Pembroke Pines, FL) - Ridgedale Center (Minnetonka, MN) - Staten Island Mall (Staten Island, NY) - Valley Plaza Mall (Bakersfield, CA)

The existing joint venture will continue to own the Sears parcels at the following properties on a 50/50 basis: - Alderwood (Lynwood, WA) - Natick Collection (Natick, MA) - Sooner Mall (Norman, OK) - Stonebriar Centre (Frisco, TX)

2) The Company sold to GGP a 50% interest in the Sears parcels at the following five assets for $57.5 million: - Altamonte Mall (Altamonte Springs, FL) - Cumberland Mall (Atlanta, GA) - Coastland Center (Naples, FL) - Northridge Fashion Center (Northridge, CA) - Willowbrook Mall (Wayne, NJ)

Keywords for this news article include: Mortgage, Real Estate, Seritage Growth Properties.

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