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Sears to Shutter Last Chicago Store

Once the Anchor of Iconic Six Corners Business District, Redevelopment of Former Flagship Store Could Include Housing, Retail, Movies
April 12, 2018
Sears Holdings, struggling to maintain a retail presence throughout the U.S., is closing the doors on one of its first flagship stores within Chicago city limits, the company said Wednesday.

The 160,500-square-foot building, which encompasses an entire city block at 4730 W. Irving Park Rd., will be totally shuttered by mid-July to make room for a massive mixed-use development that has been dubbed Six Corners Marketplace. The block is comprised now of the four-story Sears store facing Six Corners at Irving and Cicero, with a stand-alone Sears Auto Center on the north end of the site. The Hoffman Estates, IL-based company plans to start liquidating the inventory and fixtures by April 27 with the auto center closing slated for mid-May and the store going dark by mid-July.

That will be just shy of the 80-year anniversary of the Sears opening on Oct. 20, 1938, of what would become the anchor of the Six Corners’ business district. The opening was greeted with as much enthusiasm for its air-conditioning - the first retail store to have it - and the ultra-large display windows, then the largest in the Midwest, as its merchandise that more than 99,500 customers from throughout the city and suburbs scrambled to get in, according to published reports.

"For more than 120 years, Sears has called Illinois home, and that is not changing," Sears spokesperson Howard Riefs said in a statement. "Although we are disappointed by this last store closure in Chicago, by no means does this change our commitment to our customers and presence to Chicago’s residents."

The closing is part of the 2015 deal Sears inked with Seritage Growth Properties when the publicly traded REIT was formed as a real estate spin off of Sears Holdings. Seritage’s public offering funded the $2.7 billion it paid Sears for 235 Sears and Kmart store sites as well as Sears’ 50 percent interest in joint ventures on 31 properties with Simon Property Group, General Growth Properties and the Macerich Co. Seritage sold its 50 percent interest in the Simon joint venture for $68 million last year, and Simon is currently redeveloping five of the former Sears stores.

Sears has leased its properties from Seritage since 2015. The Master Lease filed then with the Securities and Exchange Commission calls for an initial term of 10 years on all the properties with options for five-year renewals. It also notes that Seritage could "recapture" 100 percent of certain spaces, which includes the Six Corners site, and terminate the leases with Sears. Those sites, 21 in all, were selected in 2015 by Sears "based on their suitability for future development activity," according to the SEC filing.

A 2016 brochure on the Six Corners site called for a 556-unit residential complex surrounded by 111,750 square feet of retail plus a movie theater and fitness center. Seritage is actively leasing the property on its site but does not have the 2016 plans included. The site is being leased by CBRE, but calls to the broker were unanswered at press time. A brochure sent to CoStar research Thursday did not include the specifications of the plan.

Earlier this week, it was reported that 16 Sears and Kmart locations were being auctioned online through Cushman & Wakefield and Real Insight Marketplace, an online bidding platform. Bids close May 1 for the properties, which are located in Texas, Missouri, Indiana, Ohio and Michigan, according to the Real Insight site.

Jennifer Waters, Chicago Reporter  CoStar Group   
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