Seritage Growth Properties eyes new $200 million unsecured term loan

By Wendy Van Sickle

Columbus, Ohio, Dec. 28 – Seritage Growth Properties said it entered into a non-binding term sheet with ESL Investments, Inc. for a new $200 million unsecured term loan facility.

Proceeds of the term loan will be used to fund redevelopment projects and for other general corporate purposes, Seritage said in a press release.

The loan will be undrawn at closing and may be borrowed in multiple draws.

Interest will be 6.5%, according to an 8-K filing with the Securities and Exchange Commission, and will step up to 8% under some circumstances.

There will be a 50 basis points commitment fee.

The maturity will be Dec. 31, 2017 and borrowings will be prepayable at any time without a fee.

“This financing would provide us with access to additional capital, on an unsecured basis, to further support the value creation strategies we are executing across our national platform,” Brian Dickman, Seritage executive vice president and chief financial officer, said in the release.

“We continue to scale our redevelopment business, which included 40 commenced or completed projects representing $350 million of investment capital as of Sept. 30, 2016, and pursue additional opportunities to unlock value at properties throughout the portfolio. The contemplated terms of the facility also would provide us with the necessary flexibility to further evaluate additional capital sources as we head into 2017.”

The press release noted that the financing may not be consummated.

Seritage is a real estate investment trust formed by Hoffman Estates, Ill.-based Sears Holdings.

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