A big change could be coming to the Town Center mall in Boca Raton — the replacement of the Sears department store with new tenants, such as restaurants and boutique shops.
The change is being sought by Sears’ landlord, Seritage Growth Properties, a real estate investment trust spun out of the department store chain.
Sears Holdings leases some stores from malls and owns hundreds of others. Last summer, Sears Holdings sold 265 of those stores, including the store at the Town Center mall, to Seritage, and Sears now leases those stores back from the real estate investment trust, a Sears spokesman said.
Finding new tenants for the prime Sears space has a greater sense of urgency now that Fitch ratings agency has announced Sears could file for bankruptcy protection within the next 12 to 24 months.
At the 36-year-old Town Center mall, Sears owned the land on which the 151,087-square-foot store sits, as well as the 23,250-square-foot auto service center adjacent to the store.
In addition, Seritage also owns parking lot land east of the store, to St. Andrews Boulevard.
Simon Property Group of Indianapolis owns the rest of the mall.
In recent months, Seritage actively has been seeking to redo the Sears properties and replace them with new shops, eateries and entertainment-oriented tenants. For example, Sears wants to redevelop its 13-acre property at the Aventura Mall in Miami-Dade County into an open-air village featuring stores, restaurants, offices and a hotel.
Richard Lackey, a restaurant broker in Palm Beach Gardens, said he recently was contacted by Seritage about finding tenants for its Sears properties, including at the Town Center mall. Restaurants are in hot demand at suburban malls because they draw a lot of people, Lackey said.
Seritage was vague about its plans for the Town Center mall. “Seritage is currently evaluating different ways to best maximize the value of its property at Town Center at Boca Raton,” spokesman Matthew Chudoba said Tuesday.
“While the company can’t share any specific details at this time, it is very excited about the property’s potential and look forwards to sharing its plans in the future,” Chudoba added.
A Sears spokesman confirmed that Seritage owns the Sears store and auto center and noted that Seritage “has the right to recapture all of the space occupied by the Sears store itself and all of the space occupied by the Sears Auto Center location.”
But Sears spokesman Howard Riefs added: “To date, we have not received notice from Seritage that they will be exercising that right. As such, the auto center and store will continue to remain open as is and we will continue to serve our customers and members.”
Some department stores lease space at malls, and others own it. The latter is especially the case if the malls are old and were built when mall developers were trying to entice large national department retailers to open a new location.
For instance, Dillard’s owned its store at the 31-year-old Boynton Beach Mall in Boynton Beach. Dillard’s sold the store to Christ Fellowship Church for $4.6 million in 2012.
At malls where Sears leases space but does not own land, Sears has been trying to sublease its space to other retailers.
Sears tried to sublease its space at The Gardens mall in Palm Beach Gardens to Dick’s Sporting Goods. But the effort was thwarted by mall owner The Forbes Co., which obtained a judge’s OK to block Sears from subleasing the space without Forbes’ permission.
But Sears has been more successful at other properties: For instance, Sears subleases store space at the King of Prussia mall in Pennsylvania to Dick’s.
Efforts by Sears to find new users for its prime mall locations quietly have been taking place for years.
In 2013, a Sears spokesman confirmed Sears had hired High Street Retail USA to find tenants for the Town Center space, as well as tenants for The Gardens Mall in Palm Beach Gardens and the Sears at the Boynton Beach Mall.
But since then the stores owned by Sears have been spun off to the publicly traded Seritage.
A Simon Property Group spokesman said the company had no comment on Seritage’s efforts to lease Sears’ space at the Boca Town Center mall.
Alexandra Clough writes about the economy, real estate and the law.