Fairholme Reveals 13.2 Percent Stake In Sears Holdings (SHLD) REIT

Fairholme Capital Management made an investment in Seritage Growth Properties, the real investment trust (REIT) formed by Sears Holdings (SHLD) in partnership with General Growth Properties.

Based on its 13G filing with the Securities and Exchange Commission (SEC), Fairholme Capital Management, and its affiliate funds own 3,252,750 shares or 13.2% of the Class A common stock of Seritage Growth Properties.

Fairholme Allocation Fund owns 974,050 shares; Fairholme Fund owns 2,021,100 shares, and Fairholme Focused Income Fund owns 257,600 shares of Seritage Growth Properties.

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Bruce Berkowitz is the founder and manager of Fairholme Capital Management. He has voting or dispositive power over all the shares of Seritage Growth Properties beneficially owned by the firm.

Sale-leaseback transaction

In February, Berkowitz commented that Sears Holdings “remained a complex sum-of-parts story,” which was largely misunderstood by traditional retail analysts and business reporters. He also noted that Sears acknowledged the need to improve its performance and to accelerate its transformation into an integrated retail platform.

Berkowitz believed that Sears Holdings’ sale-leaseback transaction with Seritage Growth Properties would be accretive for long-term shareholders based on its longstanding focus on the retailer’s real estate portfolio.

Kenneth Griffin’s Citadel Advisors also recently submitted a 13G filing with SEC indicating its ownership of 3,841,231 shares or 7.2% stake in Seritage Growth Properties.

  Sears Holdings SHLD – Seritage Growth Properties subscription rights offering

Seritage Growth Properties began trading on the New York Stock Exchange (NYSE) und the symbol “SRG” on July 6. The company completed launched a $1.57 billion subscription rights offering after the Sec declared it effective.

The shares of Seritage Growth Properties are trading at $39.40 per share, up by almost 4% at the time of this writing around 3:33 in the afternoon in New York.

The company recently completed the appointment of its executive management, which includes CEO Benjamin Schall, CFO Brian Dickman; Mary Rottler, EVP of leasing & operations; James Bry, EVP of development & construction, and Matthew Fernand, EVP & general counsel.