Seritage Growth Properties made $6 million in profit in a single day by rapidly transforming a Hialeah mall into RK Centers.
A subsidiary of Seritage purchased Westland Gateway Plaza at 1460 West 49th Street for $22.1 million from Daytona Beach-based CTO Realty Growth on July 25, records show. On the same day, Seritage sold the 117,021 square foot mall for $28.3 million to RK Centers, the Sunny Isles Beach-based commercial real estate investment firm run by Miami Heat minority owner Ranaan Katz. The proceedings have recently been made public.
The deal marks a small bright spot for Seritage, a New York-based publicly traded company that is a spinoff from Sears. Last month, the embattled company recommended a plan to liquidate all of its real estate holdings and return the proceeds to shareholders, as Seritage seeks strategic alternatives to pay off $640 million in debt to billionaire Warren Buffett. The plan requires a two-thirds vote of shareholders.
Seritage’s board is also considering a possible sale of the company, which was upgraded from a real estate investment trust to a C corporation in March.
Westland Gateway Plaza sits on the site of a former Kmart store that Sears acquired for $5.7 million in 2000, records show. When Seritage was established in 2015, the Hialeah property was among 235 former Sears and Kmart department store sites the company acquired, according to published reports. The Hialeah building was completed in 1968, records show.
After the Kmart closed in 2020, Seritage renovated the Hialeah property for several tenants, including Aldi, Ross Dress for Less, Bed Bath & Beyond and dd’s Discount. That same year, Seritage sold the mall to CTO Realty Growth for $21 million, but still managed the property through a 25-year ground lease, records show.
Seritage owns 161 properties with 19 million square feet of retail space across the country, including Esplanade at Aventura, a retail and office project currently under construction on the site of a former Sears at Aventura Mall. The company also owns a mall between Miami Shores and North Miami anchored by Ross Dress For Less, Aldi and Burlington that is part of a nationwide portfolio of 38 properties that Seritage has put up for sale.
While Seritage is in sale mode, RK Centers is looking for more commercial properties to fatten its portfolio. In December, the company purchased three Davie shopping centers for a total of $28.7 million. Also last year, RK Centers acquired a mall anchored in Winn-Dixie in Miramar for $15.7 million; a Best Buy store in West Palm Beach for $12 million; and a Plantation mall anchored in Publix for $17 million.