The former Sears space at Colonie Center is one of only two New York properties remaining in the once-vast holdings of Seritage Growth Properties, created in 2015 to help struggling retailers Sears and Kmart by buying up store sites and becoming their landlord.
After that rescue plan failed as Sears and Kmart rapidly closed stores, Seritage attempted to “unlock the underlying value” of the properties by redeveloping them for new tenants or pursuing larger schemes for lifestyle centers with apartments, offices, restaurants, cinemas and green space.
Those ideas, though, ran head-on into the bottom-line reality of the big bill that was due this summer on a $1.6 billion term loan, so Seritage pivoted last fall and decided to sell off its entire real estate portfolio. By the end of the first quarter this year, enough properties had been sold to meet a payback target that triggered a two-year extension on the loan.
Seritage used to have 10 holdings in New York; now, there are just the Colonie Center property and one in Westchester County, part of The Shops at Nanuet, a joint venture with national retail real estate investor and owner Simon Property Group. While Sears occupied separately owned property at Colonie Center, it was an original anchor at the mall.
In reporting second-quarter results earlier this month, Manhattan-based Seritage said it has sold 54 properties so far in 2023, bringing in $654.6 million. Additionally, more than $200 million in assets are either under contract or with accepted offers.
Parallel to the sales, though, “we continue to build asset value through leasing, development and entitlement activity for the properties slated for sale later in our process,” CEO Andrea Olshan said in the second-quarter news release.
That would seem to include the two-story Sears space in Colonie, which sat vacant for five years — save for an earlier carve-out on the first floor for grocer Whole Foods — before a burst of leasing activity this year.
Slated to open in the fall is Floor & Decor, a specialty retailer that carries hard-surface flooring, which will take another big chunk of the first floor. Earlier this week, its name was being affixed to the store facade along Central Avenue.
A site plan on Seritage’s website also shows Sierra, an outdoors apparel and gear store owned by TJX Cos., parent of the T.J. Maxx and Marshalls chains, as taking first-floor space on the other side of Whole Foods from Floor & Decor.
The schematic also depicts a not-yet-built outparcel in a far corner of the Sears parking lot near Central Avenue as leased by Bank of America.
All told, that would put occupancy for the former Sears space at 58%.
However, more than 93,000 square feet remain vacant on the second floor.
Asked this week about the prospects for that space and a future sale of the Sears property, a representative for Seritage responded, “we have nothing further to share here.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.