Gymboree is expected to file bankruptcy and file the majority of its stores. https://www.cnbc.com/2019/01/14/gymboree-reportedly-close-to-bankruptcy-to-liquidate-all-stores.html
Remind me again what makes Sears real estate so valuable?
3 replies (most recent on top)
Nothing. The properties are grossly overvalued and in many places in near-blighted or blighted areas. 50% of assessed value is probably about what the stores are worth on average, outside of a select few (Penn Station Kmart). The malls they are in cannot get financing to buy the properties, and no one in their right mind is going to buy a property like a former Sears store that is hitched to a dead or dying mall. This whole saga was supposed to have been shut down and finished by 2010 (when property values were still sky high), but then the recession struck and Eddie got stuck running a retailer, without a clue what he was doing.
REITs with lots of mall properties and poor cash flow are expected to go bankrupt en masse the next couple of years. 2019 onward is looking pretty grim for them, Seritage among them.
I expect many of Sears' locations will be sold to property developers.