Next on the cash-strapped saga: Sears forms REIT and enters into joint venture

Sears Holdings Corp. has written a new chapter in its ongoing quest to shore up extra liquidity.

The company announced Wednesday that it is forming a real estate investment trust to buy up several Sears and Kmart stores. It's also forming a joint venture with shopping mall company General Growth Properties in order to sell and lease back a handful of its stores.

"Today's announcement demonstrates our ability to unlock a small portion of Sears Holdings' vast and valuable real estate portfolio, and represents an important step in the continued transformation of Sears Holdings," said chairman and CEO Edward Lampert. "We continue to show that Sears Holdings is an asset-rich enterprise with multiple levers to generate financial flexibility, while creating shareholder value. The JV and its structure are consistent with our transition from a store-focused network to a more asset-light, member-centric retailer and it provides additional capital to invest in the future of our membership and integrated retail platforms."

The new REIT, named Seritage Growth Properties, will buy approximately 254 Sears and Kmart stores for a price tag of over $2.5 billion.

The company also said it's planning to offer rights to acquire Seritage shares to all existing Sears stockholders.

Separately, in the alliance with General Growth Properties, Sears plans to sell and lease back 12 of its stores currently located in General Growth's malls, which are valued at $330 million. These include existing Sears Holdings stores and stores leased to third parties occupying former Sears Holdings stores.

General Growth Properties, which has a 50% stake in the joint venture, has contributed $165 million to Sears. Sears also said that should it complete the rights offering of Seritage shares to its stockholders, it will sell its 50% stake to Seritage for the same amount.

According to Sears chairman and CEO Edward Lampert, Sears Holdings will continue to operate the 12 stores.

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