Author Topic: SRG - Seritage Growth Properties  (Read 369537 times)

GCA

  • Newbie
  • *
  • Posts: 37
Re: SRG - Seritage Growth Properties
« Reply #830 on: January 16, 2019, 09:38:40 AM »
How did you guys get details of the previous offer and do you know how I can see the new one?  Is it from following the bankruptcy case documents in PACER?  Been a long time since I looke dup legal documents but I'm interested in this case.  Any advice appreciated thanks.


Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1020
Re: SRG - Seritage Growth Properties
« Reply #831 on: January 23, 2019, 08:29:47 AM »
SRG out with an update this morning. After 30 minutes of my neurons and synapses firing in random patterns, here are some thoughts:

- SRG has $117M in go-forward annual interest expense. If you take away the $56.5M in annual rent from SHLDQ, as of 12/31/18 SRG's combined opened and SNO (some of which won't be open for 1 year +) leases only amount to ~$147M in annual revenue (note that this includes their share of JVs). I think revenue from their non-SHLDQ leases is only approximately enough to cover their interest payments and G&A expenses.

- Given the above, it isn't surprising that SRG is aggressively selling properties to generate cash. They sold 5 properties in Q4 for gross proceeds of $47.3M + 13 other properties are under contract for a total of $59.8M.

- I continue to think they will cancel the dividend

- Given that SHLDQ was teetering on the verge of administrative insolvency and total liquidation before Lampert upped his bid, IMO it would have been in SHLDQ's interests to pursue the elimination of the Master Lease. However, this doesn't appear to have happened. I think this is because Lampert wants to preserve the value of his SRG equity.

- I continue to think fraudulent conveyance lawsuits are a risk, but I don't have the expertise to handicap this type of esoteric legal issue.

scorpioncapital

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1775
    • scorpion capital
Re: SRG - Seritage Growth Properties
« Reply #832 on: January 23, 2019, 09:36:59 AM »
I think things are going quite well. They are funded with 2 billion in development capital from buffet. Sears income is now just 28 percent and very likely zero by mid 2020.
They can sell even 70 percent of their space and just densify 30 percent at ever higher prices , although I don't expect such a dramatic sale of property space.
What I think isn't visible yet is that this new rental income is not fixed. There is nowhere that says in 10 years rental income can't grow at a pace faster then debt expense with natural increase in quality and density of developments.


Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1020
Re: SRG - Seritage Growth Properties
« Reply #834 on: February 27, 2019, 07:06:12 AM »
https://www.businesswire.com/news/home/20190225006054/en/Seritage-Growth-Properties-Announces-Quarter-2019-Dividend

The dividend being canceled shouldn't be much of a surprise for anyone who has been following the company closely. As I have attempted to enunciate in the pages of this hallowed forum, SRG needs moar cash.

The good news is that Sears Holdings isn't liquidating and the master lease (apparently) survived bankruptcy intact.

LongTermView

  • Sr. Member
  • ****
  • Posts: 336
Re: SRG - Seritage Growth Properties
« Reply #835 on: March 20, 2019, 01:21:18 PM »
I've been thinking about this part of the 2018 annual report:
Quote
These 36 [premier] sites currently encompass approximately 7.4 million square feet of existing buildings and total roughly 510 acres. Recognizing that certain of these entitlement processes may take longer than anticipated, we believe the density on these sites could increase by twofold or more over time (growing from 7.4 million to 15+ million square feet) and could include 6,000 to 8,000 residential units.

Where do they list these 36 sites individually? The 4Q18 supplemental shows 22 projects with costs over $20 million each. And there are other sites where projects haven't been approved yet.

Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1020
Re: SRG - Seritage Growth Properties
« Reply #836 on: March 20, 2019, 01:49:53 PM »
I've been thinking about this part of the 2018 annual report:
Quote
These 36 [premier] sites currently encompass approximately 7.4 million square feet of existing buildings and total roughly 510 acres. Recognizing that certain of these entitlement processes may take longer than anticipated, we believe the density on these sites could increase by twofold or more over time (growing from 7.4 million to 15+ million square feet) and could include 6,000 to 8,000 residential units.

Where do they list these 36 sites individually? The 4Q18 supplemental shows 22 projects with costs over $20 million each. And there are other sites where projects haven't been approved yet.

Insofar as I am aware, the company has never broken them out.

LongTermView

  • Sr. Member
  • ****
  • Posts: 336
Re: SRG - Seritage Growth Properties
« Reply #837 on: March 20, 2019, 06:38:11 PM »
Insofar as I am aware, the company has never broken them out.

Thanks, Foreign Tuffett.

LongTermView

  • Sr. Member
  • ****
  • Posts: 336
Re: SRG - Seritage Growth Properties
« Reply #838 on: April 12, 2019, 08:54:06 PM »

Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1020
Re: SRG - Seritage Growth Properties
« Reply #839 on: April 18, 2019, 08:34:33 AM »
"Old Sears", aka the insolvent shell left behind when "New Sears" was bought by ESL, is pursuing....well, they are pursuing just about everyone and every entity (including SRG) that was involved with Sears in the years leading up to its bankruptcy. 

Docket #3728

https://restructuring.primeclerk.com/sears/Home-DocketInfo

I don't have the requisite legal knowledge to handicap the odds of this claim being successful, but I do think that SHLD was effectively insolvent in the years leading up to its bankruptcy.