Washington Prime Group Inc. (fka WPGGQ)

[Enterprising Investor]

Washington Prime Group to Acquire Four Sears Stores Located at Tier One Assets through a Sale-Leaseback (3/12/18)

COLUMBUS, Ohio, March 12, 2018 (GLOBE NEWSWIRE) -- Washington Prime Group Inc. (NYSE:WPG) today announced that it has signed a definitive agreement to acquire through a sale-leaseback transaction four Sears department stores and four adjacent Sears Auto Centers (collectively, the “Properties”) located at Tier One assets. The purchase price is approximately $28.5 million, and Washington Prime Group (the “Company”) expects to complete the acquisition during the second quarter of 2018, subject to due diligence and customary closing conditions.

The Company will have control of these Properties for future redevelopment. Sears will continue to operate the Properties under new leases with the Company. Aggregate base rent under these leases is approximately $1.25 million per annum. In addition, Sears will be responsible for paying common area maintenance charges, taxes, insurance and utilities.

Lou Conforti, CEO and Director stated: “When Washington Prime Group is presented with the opportunity to improve a Tier One asset via retrofit of an underutilized department store space, it is imperative we act accordingly. The first step is to gain control of the space in question, and in this light we have recently agreed to purchase these Properties at competitive terms and conditions. Sears will continue to operate these locations for a period of time that provides us with a suitable timeframe to evaluate the best adaptive reuse.”

“As exhibited by our previous redevelopment successes, the aforementioned acquisition allows us to further our charter of creating hybrid town centers which capture both open air and enclosed retail space as well as assessing the viability for non-retail use,” Conforti added. “I would also like to mention we look forward to working with Sears as they continue their omnichannel transformation and stand ready to assist regarding this undertaking as warranted.”

Upon completion of the acquisition, the Company will have the right to terminate each store lease under certain circumstances as stated in each lease. Termination cannot occur between November 1 of a calendar year and January 15 of the next following calendar year. In the event Sears decides to no longer operate these locations, the Company will have the right to terminate the applicable lease upon thirty days’ prior written notice.

The Properties are located at the following Tier One assets: Longview Mall, located in Longview, Texas; Polaris Fashion Place, located in Columbus, Ohio; Southern Hills Mall, located in Sioux City, Iowa; and Town Center at Aurora, located in Aurora, Colorado.

As part of its ongoing anchor repositioning efforts, the Company plans to redevelop these Properties to further diversify tenancy and strengthen the asset’s dominant positioning within its respective marketplace. Additional details on the redevelopment projects will be announced in the future.

About Washington Prime Group

Washington Prime Group Inc. is a retail REIT and a recognized leader in the ownership, management, acquisition and development of retail properties. The Company combines a national real estate portfolio with an investment grade balance sheet, leveraging its expertise across the entire shopping center sector to increase cash flow through rigorous management of assets and provide new opportunities to retailers looking for growth throughout the U.S. Washington Prime Group® is a registered trademark of the Company. Learn more at www.washingtonprime.com.

https://globenewswire.com/news-release/2018/03/12/1420886/0/en/Washington-Prime-Group-to-Acquire-Four-Sears-Stores-Located-at-Tier-One-Assets-through-a-Sale-Leaseback.html