Author Topic: SRG - Seritage Growth Properties  (Read 535488 times)

glorysk87

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Re: SRG - Seritage Growth Properties
« Reply #140 on: September 07, 2016, 10:09:18 AM »
If Sears goes bankrupt, then the maximum amount of time that they can extend the time to decide on assuming or rejecting the lease is 210 days. (Starts at 120 days with the option to petition the court for an extra 90 days, but that's it.)

Alternatively, in theory, if Sears vacates those stores, then isn't that better for Seritage as they now can reclaim significantly more square footage (and release at a higher rent) than originally thought under the current agreement?

What's the main worry if Sears goes bankrupt? It's not like they can force Seritage to re-lease the properties to them for $1 per square foot from $4 per square foot.

Are the main considerations here (A) absorption of the additional square footage and (B) possible loss of rent during that period and/or low recovery prospects for 210 days of rent as an unsecured claimant?

Someone has to pay the property level expenses if Sears goes bankrupt. Property taxes, utilities, etc...

SRG doesn't have much cash to pay those properties for too long...


Mephistopheles

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Re: SRG - Seritage Growth Properties
« Reply #141 on: September 07, 2016, 10:12:48 AM »
Now, they aren't that leveraged so they can set up a larger line of credit and more borrowings and perhaps JV more of their stores as a precaution against a SHLD bankruptcy so I don't see it as a huge risk.

I also don't see SHLD going bankrupt anytime soon as they still have the inventory, KCD and the rest of the real estate that they can monetize.

FCharlie

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Re: SRG - Seritage Growth Properties
« Reply #142 on: September 07, 2016, 04:10:20 PM »
People have been claiming Sears and Kmart would be bankrupt for over a decade.

Also, even if they filed bankruptcy, unless it was a liquidation, wouldn't Sears have to continue to honor the leases at least in the beginning?

Finally, I know everyone thinks Eddie Lampert is an idiot and is going to ride his SHLD stock to zero, but let's refresh our memory about how aggressively Eddie dumped his Orchard Supply shares when it because obvious they were going bankrupt.....  All we have ever seen from Eddie regarding SHLD is accumulation of stock, repurchase of stock, paying himself in stock, loaning money to SHLD personally and/or through his hedge fund etc...    In other words... I think bankruptcy fears are WAY overblown.



https://www.sec.gov/Archives/edgar/data/860585/000118143113031604/xslF345X03/rrd381721.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113029487/xslF345X03/rrd380748.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113027478/xslF345X03/rrd379615.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113026292/xslF345X03/rrd379043.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113025302/xslF345X03/rrd378531.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113023855/xslF345X03/rrd377827.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113023324/xslF345X03/rrd377473.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113022019/xslF345X03/rrd376720.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113020660/xslF345X03/rrd376025.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113019420/xslF345X03/rrd375413.xml

https://www.sec.gov/Archives/edgar/data/860585/000118143113018648/xslF345X03/rrd375066.xml



« Last Edit: September 07, 2016, 04:17:19 PM by FCharlie »

eclecticvalue

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Re: SRG - Seritage Growth Properties
« Reply #143 on: September 07, 2016, 05:02:53 PM »
Let's not fool ourselves the share performance hasn't been great for SHLD in the past 10 years. And how long it will be until Eddie and company create value?

FCharlie

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Re: SRG - Seritage Growth Properties
« Reply #144 on: September 07, 2016, 06:24:31 PM »
Creating value and share performance are one thing.... But the worries among some of the posters here that SHLD will go bankrupt and dump all their leases on Seritage makes no sense to me. Even if eventually SHLD is bankrupt, it won't be soon. They have been figuring out a way to get by for half a decade. Net inventory, asset sales, loans from Eddie & Bruce... people under appreciate those things....

My SHLD bonds are at 88 cents on the dollar right now. Look at Chesapeake Energy, a lot of their debt was at 15 cents on the dollar and they are still around. People over simplify things and forget that corporations are capable of doing many things to stay afloat.


glorysk87

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Re: SRG - Seritage Growth Properties
« Reply #145 on: September 07, 2016, 09:23:02 PM »
Anyone interested in this should look at the CMBS sponsored by Seritage in conjunction with the spinoff last year, originated by JPM.  The annex file for the CMBS issue contains property level financial data for almost all the properties that Seritage owns, including rent coverage (EBITDAR/Rent) on a store-level.  The data is obviously a year old at this point but I still think it paints a really interesting picture.  The large majority of the properties they own have significant rent coverage, indicating that even in a bankruptcy situation the chances of Sears rejecting their lease is relatively low (keep in mind they can't pick and choose which stores to reject leases for considering they signed one master lease with SRG, so it's all or nothing).  Chances are even in a worst case scenario Sears would look to restructure their lease rather than simply dump the properties, since most of them are cash flow positive even after rent payment. Anyone interested it's CUSIP 46645CAA5.

Mjs3382

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Re: SRG - Seritage Growth Properties
« Reply #146 on: September 25, 2016, 06:02:57 PM »
Anyone interested in this should look at the CMBS sponsored by Seritage in conjunction with the spinoff last year, originated by JPM.  The annex file for the CMBS issue contains property level financial data for almost all the properties that Seritage owns, including rent coverage (EBITDAR/Rent) on a store-level.  The data is obviously a year old at this point but I still think it paints a really interesting picture.  The large majority of the properties they own have significant rent coverage, indicating that even in a bankruptcy situation the chances of Sears rejecting their lease is relatively low (keep in mind they can't pick and choose which stores to reject leases for considering they signed one master lease with SRG, so it's all or nothing).  Chances are even in a worst case scenario Sears would look to restructure their lease rather than simply dump the properties, since most of them are cash flow positive even after rent payment. Anyone interested it's CUSIP 46645CAA5.

Could you post a link? Having trouble finding the document. Thanks.

literally_it

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Re: SRG - Seritage Growth Properties
« Reply #147 on: September 26, 2016, 08:48:00 AM »
Here's the CMBS Annex file. Not sure how to get these aside from a Bloomberg terminal.

SlowAppreciation

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Re: SRG - Seritage Growth Properties
« Reply #148 on: September 27, 2016, 05:04:14 AM »
Here's the CMBS Annex file. Not sure how to get these aside from a Bloomberg terminal.

Thanks for sharing, this is really good info.