johnny Posted July 23, 2019 Share Posted July 23, 2019 Buying a box for $20 a square foot and immediately renting out a chunk at $18/ft to the city. Sounds like small town capitalism at its finest. Link to comment Share on other sites More sharing options...
RadMan24 Posted July 23, 2019 Share Posted July 23, 2019 Buying a box for $20 a square foot and immediately renting out a chunk at $18/ft to the city. Sounds like small town capitalism at its finest. There's a burlington empty box, Sears empty box, and JCP, on the verge of being empty. I'd also take the $3 million and run. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 3, 2019 Share Posted August 3, 2019 Is anyone still involved here? New Sears is down to 50 properties and $20.3 million in annual rent. SRG continues to sell properties. Notably, they have sold properties that have been wholly or partially redeveloped like Hagerstown, Santa Cruz, and Vancouver (WA). I think this signals that management feels it needs to generate liquidity, even at the cost of maximizing long term value. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 3, 2019 Share Posted August 3, 2019 Is anyone still involved here? New Sears is down to 50 properties and $20.3 million in annual rent. SRG continues to sell properties. Notably, they have sold properties that have been wholly or partially redeveloped like Hagerstown, Santa Cruz, and Vancouver (WA). I think this signals that management feels it needs to generate liquidity, even at the cost of maximizing long term value. I am, but it's a very small position and I'm not optimistic about the near term. Has been an easy trading vehicle for me though - buy below $40 and sell above $45. Sell covered calls in between. Made a few rounds trips in the name so my profits have been secured while I wait. Link to comment Share on other sites More sharing options...
RadMan24 Posted August 3, 2019 Share Posted August 3, 2019 Is anyone still involved here? New Sears is down to 50 properties and $20.3 million in annual rent. SRG continues to sell properties. Notably, they have sold properties that have been wholly or partially redeveloped like Hagerstown, Santa Cruz, and Vancouver (WA). I think this signals that management feels it needs to generate liquidity, even at the cost of maximizing long term value. They have not sold Santa Cruz, entered into a partnership to co-develop property. Could they have developed the property without outside investment? Possibly, but then again, you have to manage the risk of Sears stores not bringing in any income. I would, if you're just starting out, focus on the cash flow - either from rent, property sales, termination fees, minus capex and then look at property development pipeline to get a sense of future cash flows 3-5 years from now Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 3, 2019 Share Posted August 3, 2019 Is anyone still involved here? New Sears is down to 50 properties and $20.3 million in annual rent. SRG continues to sell properties. Notably, they have sold properties that have been wholly or partially redeveloped like Hagerstown, Santa Cruz, and Vancouver (WA). I think this signals that management feels it needs to generate liquidity, even at the cost of maximizing long term value. They have not sold Santa Cruz, entered into a partnership to co-develop property. Could they have developed the property without outside investment? Possibly, but then again, you have to manage the risk of Sears stores not bringing in any income. I would, if you're just starting out, focus on the cash flow - either from rent, property sales, termination fees, minus capex and then look at property development pipeline to get a sense of future cash flows 3-5 years from now Wrong Santa Cruz - sold Santa Monica - 50/50 JV Santa Claus - the fat guy who shows up on Christmas Santa Maria - one of Columbus' ships Hope this helps. Link to comment Share on other sites More sharing options...
RadMan24 Posted August 3, 2019 Share Posted August 3, 2019 fair enough Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted November 8, 2019 Share Posted November 8, 2019 "Transform Holdco" aka "New Sears" is terminating leases for 29 more stores https://www.sec.gov/ix?doc=/Archives/edgar/data/1628063/000156459019042009/srg-8k_20191104.htm Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted December 5, 2019 Share Posted December 5, 2019 Is anyone still involved here? New Sears is down to 50 properties and $20.3 million in annual rent. SRG continues to sell properties. Notably, they have sold properties that have been wholly or partially redeveloped like Hagerstown, Santa Cruz, and Vancouver (WA). I think this signals that management feels it needs to generate liquidity, even at the cost of maximizing long term value. I am, but it's a very small position and I'm not optimistic about the near term. Has been an easy trading vehicle for me though - buy below $40 and sell above $45. Sell covered calls in between. Made a few rounds trips in the name so my profits have been secured while I wait. Last round trip had me stopped out at $43 as my covered calls were ITM at expiration. Looks like we're getting back to the buy point to make another round trip by re-initiating the position. One day this won't be a trading vehicle, but in the interim.... Link to comment Share on other sites More sharing options...
RadMan24 Posted December 19, 2019 Share Posted December 19, 2019 new plans for Chicago development: https://blockclubchicago.org/2019/12/18/six-corners-sears-would-be-saved-turned-into-apartments-and-retail-under-newly-revealed-plans/ Link to comment Share on other sites More sharing options...
RadMan24 Posted February 1, 2020 Share Posted February 1, 2020 Seritage dropping to attractive levels again. Just a FYI on recent develompents: Updated 4Q Leasing and Transformation statistics: https://www.sec.gov/Archives/edgar/data/1628063/000156459020002150/srg-ex991_8.htm Chicago: https://chicago.curbed.com/2018/5/16/17362108/sears-redevelopment-mixed-use-six-corners Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 1, 2020 Share Posted February 1, 2020 Another way to look at it is that SRG with 100 percent Sears leases was trading at the same price as SRG with 100 percent diversified non sears leases now. If you had to pay the same price , which one would you take ? ) Link to comment Share on other sites More sharing options...
Spekulatius Posted February 1, 2020 Share Posted February 1, 2020 Another way to look at it is that SRG with 100 percent Sears leases was trading at the same price as SRG with 100 percent diversified non sears leases now. If you had to pay the same price , which one would you take ? ) Cap rates have moved up since 3 years ago. I think That alone accounts for most differences. if you like to see private market values on real estate, sign up on with some of the reale estate platforms to see the deal flow and the current valuation. I have just gotten a deal presented from Real estate mogul for a B grocery anchored open air shopping center with some hair for a close to 10% unleavened cap rates. I don’t think these sort of deals existed at the same cap rates years ago. And perhaps they may not be a deal at all, if the shopping mall deteriorates. Anyway, I kind of like SRG in a sense that it is basically a developer and can develop properties that may be valuable in the future, rather than those that worked well in the last. But I would guess for sure that the Exit valuation after a project is completed is closer to 7-8% rather than the ~6% that were thrown around in the past, with obvious impact on SRG NAV. I am not sure if above numbers are correct in absolute terms, but I think they are correct directionally Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 3, 2020 Share Posted February 3, 2020 Any thoughts on the ultimate proportion of srg that will be a somewhat rejuvenated strip or regular mall and the proportion that will be mixed use, and alternative type of retail , office , living communities? Is it still going to be pretty much a mall reit 10 years from now (ie. greater than 50 percent)? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted February 3, 2020 Share Posted February 3, 2020 Any thoughts on the ultimate proportion of srg that will be a somewhat rejuvenated strip or regular mall and the proportion that will be mixed use, and alternative type of retail , office , living communities? Is it still going to be pretty much a mall reit 10 years from now (ie. greater than 50 percent)? SRG is not, and has never been a mall REIT, so no. Calling it a mall REIT misses a big part of the bull thesis, which is that SRG's outward-facing boxes can do well even if some of the enclosed malls they are attached to wither and die. Link to comment Share on other sites More sharing options...
rogermunibond Posted February 3, 2020 Share Posted February 3, 2020 From what I've seen of SRG projects, a number of the sites have gotten Dave and Buster or Main Event type entertainment concepts. A number have also added residential. Of the two, it seems like residential might do well. In the past entertainment concepts were too low rent to get mall space. Seems like a very big shift for malls to add these tenants. Also the entertainment tenants seem like they might be economically sensitive? CEC has been through bk once or twice? Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted February 22, 2020 Share Posted February 22, 2020 I looked at this again recently, I still don't get it. If anything, it looks in a worse state than what it did when it originally IPO'ed. It's nearly five years since this company was spun-out from Sears. The original bull thesis was that when Sears were kicked out of the properties, Seritage could bump the rent by a factor of 3x-4x. One of the original VIC write-up's presented such a case, and when you compare it to what has actually happened, it's been hopelessly bullish. We are now at the situation where Sears accounts for just 5% of Seritage revenue, yet overall rental revenue is down from when this company was almost entirely reliant on Sears. I do understand that certain properties are under redevelopment, and that some property will be hard to rent, but I don't think anyone five years ago would have seriously have thought that Seritage could be taking in less rental revenue in the face on an improving economy, low unemployment and low interest rates. The forward run rate for rental revenue is project by management at $180m - of that, Uncle Warren will clip about $100m for the coupon payment for the debt this thing holds. When you strip out the SG&A, there virtually nothing left for self-funding the redevelopment projects that this company has lined up. With Seritage already looking close to being maxed out on the credit line, I just do not see where the liquidity exists to get this on a sustainable footing. I think this either needs a capital raise, or else it need to be taken over by a larger partner with the financial muscle to redevelop the properties at a lower cost than what Seritage does in the public market. Link to comment Share on other sites More sharing options...
Gregmal Posted February 22, 2020 Share Posted February 22, 2020 Maybe Im dated on this, but after a while, looking at this thing, it just gets head scratching as to why people love it so much. Other than of course the fading aura around this being were Eddie and Bruce snuck $150 per share of Sears value....and, oh yea, Warren bought it OMG! I remember thinking, so.... you're the owner of the same assets a lot of companies that are in trouble own, you dont cover the dividend, you dont cover much of your developments, you dont really have any cheap sources of capital, so what exactly is it that you do here and how do you think you are going to create value in the future? And what ever it is, how isn't SPG infinitely better, across the board, in every area and then some, at everything SRG is trying to do? Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 22, 2020 Share Posted February 22, 2020 I would say you create aesthetically pretty mixed use and densified centers in good real estate spots. Not sure if it will be profitable or not but it sure beats the eyesore that were the old sears Kmart malls and units. There is also a value of the land component and I imagine that increases as the land is used in a more modern way. I can even imagine a case where they sell 80 percent of their properties to focus and expand a premium 20 percent portion. Pareto wasn't wrong that 20 percent of your gems in anything bring 80 percent of success. Concentration is a good strategy and I hope they sell more properties to raise capital to develop their premium projects. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted February 24, 2020 Share Posted February 24, 2020 I looked at this again recently, I still don't get it. If anything, it looks in a worse state than what it did when it originally IPO'ed. It's nearly five years since this company was spun-out from Sears. The original bull thesis was that when Sears were kicked out of the properties, Seritage could bump the rent by a factor of 3x-4x. One of the original VIC write-up's presented such a case, and when you compare it to what has actually happened, it's been hopelessly bullish. We are now at the situation where Sears accounts for just 5% of Seritage revenue, yet overall rental revenue is down from when this company was almost entirely reliant on Sears. I do understand that certain properties are under redevelopment, and that some property will be hard to rent, but I don't think anyone five years ago would have seriously have thought that Seritage could be taking in less rental revenue in the face on an improving economy, low unemployment and low interest rates. The forward run rate for rental revenue is project by management at $180m - of that, Uncle Warren will clip about $100m for the coupon payment for the debt this thing holds. When you strip out the SG&A, there virtually nothing left for self-funding the redevelopment projects that this company has lined up. With Seritage already looking close to being maxed out on the credit line, I just do not see where the liquidity exists to get this on a sustainable footing. I think this either needs a capital raise, or else it need to be taken over by a larger partner with the financial muscle to redevelop the properties at a lower cost than what Seritage does in the public market. My #s are a little different than yours, but I basically agree with all of what you are saying. SRG remains liquidity constrained, and its redevelopment projects have been both slower to ramp up and more expensive than expected. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 16, 2020 Share Posted March 16, 2020 This thing has been taken to out back and shot! Link to comment Share on other sites More sharing options...
stahleyp Posted March 16, 2020 Share Posted March 16, 2020 Did Buffett ever sell? Would that be reported? Link to comment Share on other sites More sharing options...
WneverLOSE Posted March 18, 2020 Share Posted March 18, 2020 Can someone explain to me why I lost 90% of my money ? Link to comment Share on other sites More sharing options...
scorpioncapital Posted March 18, 2020 Share Posted March 18, 2020 Me too. In this stock. Seems Eddie is going to go broke 2 for 2. Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted March 18, 2020 Share Posted March 18, 2020 Me too. It's not obviously super leveraged to the virus? (more than other retail/developers etc)? Buffett will bail it out. Link to comment Share on other sites More sharing options...
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