Berkshire Hathaway Inc (BRK.A)

[fung_derf]

Geez, red flags everywhere!

Real estate was the ace in the hole in Eddie Lampert's investment strategy for Sears Holdings. So in 2015 -- a decade after the hedge fund manager's ESL Investments took over the struggling retail chain -- Sears spun off its interests in some 260 shopping mall properties into a real estate investment trust called Seritage Growth Properties.

Before that year was out, Berkshire Hathaway CEO Warren Buffett used his own money to buy a 7% stake in Seritage (SRG) for about $35 a share. The stock hit $57 the next year amid enthusiasm that Seritage would replace the bargain rents paid by Sears with market-rate tenants. The real estate play looked like a winner to Barron's in early 2017.

But Sears was still Seritage's main tenant. When Sears Holdings (SHLDQ) filed for bankruptcy protection in 2018, the retailer still filled 70% of Seritage's space.