May 9, 2013 UPDATE: We’ve received confirmation Sears Canada will actively subleasing space in its stores. We have been informed that Whole Foods’ Canadian expansion plans are already in place and that they will not likely occupy subleased space in Canadian Sears stores.
Sears Canada is looking at ways to utilize its assets, including real estate. An insider at Sears Canada says the company is considering subleasing space inside of existing stores, similar to what is being done with several American locations.
Sears is actively looking to sublease within its American Sears stores via this website: www.SHCRealty.com. Various options for sublease are included. In our investigating we found, for example, about 40,000 square feet of the 175,000 square-foot Town Centre at Boca Raton is available for sublease. Space could be used for retail, restaurants or both.
Images used in this article were copied from the www.SHCRealty.com website as examples of possible Sears subleasing options and configurations.
Sears started its American subleasing trend by leasing 43,000 square feet of its South Coast Plaza (Costa Mesa, California) store to retailer Forever 21. We are not surprised Sears has continued this trend given that many of their stores have considerable space and lack shoppers.
The sublease strategy only works when Sears is able to legally control its space. Some malls and landlords prohibit anchor stores from subleasing space, save for some smaller shop-in-store concepts. Sears Canada could capitalize on its massive store square footage through subleasing while maintaining its struggling operations. Sears already outright-sold three of its Canadian leases to landlord Cadillac Fairview for $170 million, paving the way for Nordstrom’s Canadian entry. Subleasing could be a new way to capitalize on real estate without closing Canadian Sears stores.
Sears has leased space to Whole Foods stores in several American stores in Florida, New York and North Carolina. It has done this by leasing approximately half of the ground-floor of a multi-level Sears store to Whole Foods, with no internal access between the retailers.
We’ll keep you updated on Sears Canada’s possible subleasing strategy in our country, as well as its efforts to re-brand and pull itself out of its financial difficulties.
Sears Canada website:www.sears.ca
Sears’ American subleasing website: www.SHCRealty.com