PORT RICHEY — The Sears property at Gulf View Square is up for sale, along with three other Sears buildings in Florida.
But so far, there is no sign Sears Holdings Corp. is closing its Port Richey store. Instead, the possible sale will likely be a leaseback, which is a way to raise capital, according to the firm tasked with selling the property.
The Port Richey building is being sold by Avison Young's Florida Capital Markets Group. The Canadian company with Florida offices will sell three department store sites and the largest distribution center in Florida. Together, the buildings total 2.35 million square feet of commercial real estate.
It's unclear whether that means Sears plans to close the Gulf View Square store. Representatives from Sears Holding Co. Inc. did not return calls from Suncoast News. Often, businesses will sell their buildings and then sign a lease with a new owner. The leaseback option allows companies to raise cash from their real estate holdings without leaving the property, according to Investopedia.
The properties include the Sears building at Gulf View Square in Port Richey. That building comprises 126,336 square feet at the location at 9409 U.S. 19 in Port Richey. The other properties Avison has up for sale are the 152,542-square-foot building in the Volusia Mall, along West International Speedway Boulevard in Daytona Beach; and the 123,790-square foot building at Westfield Citrus Park, in Hillsborough County, along with the 10,132-square-foot adjacent Sears Auto building at the same location.
But the biggest Sears building is not a store. Avison Young is also charged with selling the 1.94 million-square-foot Sears Southeast Distribution Center in Ocala.
According to Joshua Ladle, a senior associate with Avison Young, there has already been at least one offer on each property. Sears is not asking a specific price for each building, though.
“It's an active market across the spectrum,” Ladle told Suncoast News, saying investors are eyeing small retail buildings and large ones too. With internet giants like Amazon vexing old bricks-and-mortar retailers like Sears, new strategies have to be devised, and that sometimes means new sizes for stores.
“Internet retailers have certainly hurt some retailers,” said Ladle. “Sometimes it means scaling back (on bigger properties).”
Sears Holdings, which owns Kmart as well, has been struggling to compete with Amazon and others. But the Port Richey store has avoided closure, escaping the most recent list, released on Aug. 23, of yet more stores to be shuttered. On that day, Sears officials said it would close 46 stores nationwide.
Still, Sears is mindful of what consumers might assume. When Sears announced its closures in August, managers put a blue banner above the Port Richey doors. It read: “We're Open.”
Gulf View Square also has its problems, and its potential. JC Penney closed its Gulf View Square store in 2014, and Macy’s left the mall in 2015. Simon Property Group of Indianapolis, which owns dozens of retail properties across the nation, sold the mall in 2017. Namdar Realty Group now owns Gulf View Square.
The privately held commercial real estate investment firm is based in Great Neck, N.Y. A blurb on its website says the company owns and manages more than 33 million square feet of commercial real estate throughout the United States. It was founded in 1999, with a small retail storefront on Long Island.
Ladle said it's possible long-term investors will buy the Sears stores and lease to the retailer for as long as possible, switching to other development strategies should Sears vacate the premises. The buildings could be redeveloped and turned into housing, a strategy similar to the one being tried on the west side of the Port Richey mall.
In April, Namdar proposed building 400 apartments on the west side of the mall, where JCPenney and Macy's stood. Some site preparation has already begun, with demolition ongoing at the site.