Seritage Sells Hialeah Shopping Center for $21M
Seritage sold a 108,000-square-foot shopping center formerly anchored by Kmart in Hialeah for $21 million.
A Daytona Beach-based publicly traded real estate company, CTO Realty Growth, bought the shopping center at 1460 West 49th Street, records show. The company changed its name from Consolidated-Tomoka Land Co. to CTO in May. The sale equates to $194 per square foot.
Publicly traded Seritage was spun off five years ago from Sears. In June, Seritage announced it would terminate the master lease covering 12 of the remaining Sears and Kmart stores in its portfolio.
Seritage’s sale of the Hialeah property is a sale-leaseback. The company signed a lease for 25 years, ending in 2045, according to records. The center was built in 1968.
The company transformed the shopping center from a Kmart-anchored center about a year ago, as part of its statewide plan to repurpose old Sears and Kmart stores since the department store retailer filed for bankruptcy in 2018 and closed more than 100 stores in the U.S.
Current tenants at the Hialeah shopping center include Aldi, Ross Dress for Less, dd’s Discount and Bed, Bath & Beyond. The center is on about 8 acres of land. CTO bought the land through a 1031 exchange, with funding from $12 million generated from previously announced property deals and with CTO’s line of credit, according to a press release.
CTO has completed over $185 million of income property acquisitions in 2020 at a weighted average cap rate of about 7.8 percent, according to the release.
The sale comes at a difficult time for the retail market. Bed, Bath & Beyond has been closing stores this year nationwide, though the Hialeah store is open and has not appeared on any list of the company’s locations slated to close. Bed, Bath & Beyond reaffirmed plans to close 200 stores during its quarterly earnings call this month.
Earlier this month, Seritage sold more than 180,000 square feet at the Shops at SouthBay Pavilion in Carson, California.
In May, Seritage Growth Properties stopped construction at Esplanade at Aventura because of the pandemic, resulting in a lawsuit by Mexican restaurant Carolo, seeking to break its lease.