Why do people like this more than/why does it generate so much more interest than Howard Hughes?
Put another way, why are people more interested in the opportunity to invest a lot of capital into Sears' collection of real estate, as opposed to Howard Hughes' assets, e.g., Ward Village, the South Street Seaport, the Woodlands and Columbia, MD?
I think the higher level of interest on this site is just due to SRG being related to the Sears/Eddie Lampert story, which many here find so remarkable/fascinating/shocking/disturbing/etc.
I have owned HHC since 2013 and I would certainly not say that SRG has better assets... I'm not sure anyone would claim that. SRG is easier to analyze because we know exactly what the properties are and they are quite similar. So we take a $15 or $20 average rent, or whatever you want to use, and it's pretty simple to discount back cash flows over 10 or 20 years.
HHC is different because we really don't know what they are going to build in the future. What will HHC's operating asset NOI be in 10 years? Who the heck knows. Sure, some people are assuming they build 1 condo tower a year for a decade in Ward Village (or whatever they plug into their DCF model), but the degree of confidence in that sort of guesswork is probably quite low given the outside factors that will influence build-out plans.
But I guess your main question is, if HHC has better assets, a great balance sheet, and what appears to be a solid management team, why even bother with SRG if you are interested in long-term real estate development stories? To me, it's the valuation. I might be willing to pay up a little for HHC's assets, but at the right price, SRG might look attractive too even if the assets are worse. It's all about what you are getting and what price you paying, right?
SRG: $2.2B equity/$3.3B E/V
HHC: $4.3B equity/$5.9B E/V
Including signed leases, Seritage's annualized FFO is pushing $150M.
Howard Hughes is projecting 2019 NOI of $220M ex-SSSP. Let's call it $300M all-in. You would get roughly the same FFO ($150M) in 2019 using current interest and G&A run-rates.
So there's a clear valuation gap between the two. I would argue that is due to the asset quality differential. So at current stock prices, SRG might outperform even with less desirable assets.