Seritage Growth Properties is contracting its holdings in the Capital Region as it continues to get smaller.
The real estate investment trust sold its portion of the Colonie Center in Albany to New Jersey-based Heidenberg Properties Group for $28 million, the Albany Business Review reported. The deal by the firm, which spun off from Sears to handle the retailer’s real estate footprint, closed last Tuesday.
Seritage was formed in 2015 to “unlock the underlying value” of Sears’ real estate, which at that point was more valuable than the failing retailer’s brand. In 2022, it decided the best way to do that was to liquidate. At the time, it had 161 properties. Its website now lists 24.
Provident Bank of New Jersey provided Heidenberg $17 million of acquisition financing for the Albany deal, according to the Times Union.
Only part of the shopping mall traded hands in the deal. Heidenberg acquired 243,000 square feet of mall property — anchored by a Whole Foods Market — a 28,000-square-foot building with a BJ’s Restaurant, Ethan Allen and more, and two development pads, one of which Bank of America will lease.
Whole Foods has been on the ground floor of the Colonie Center for a decade, replacing part of a Sears store that fully closed in 2017. The rest of the mall portion had been largely vacant before Floor & Decor moved in several months ago. A Sierra discount store is anticipated to open in the summer.
There is still 94,000 square feet of vacant space on the second floor of Heidenberg’s property. The firm plans on investing in the property and finding tenants for the open space; one undisclosed tenant signed a letter of intent. RedMark Realty is responsible for leasing.
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Pacific Retail Capital Partners owns the rest of the Colonie Center core. An LLC affiliated with the owner defaulted on debt backed by its portion of the 1.3 million-square-foot mall. Macy’s, meanwhile, owns its own space at the mall.
Heidenberg chief operating officer Jason Lazar was tight-lipped on if the firm would be interested in acquiring the rest of the mall, only telling the Times Union that “owning Colonie Center might make the mall attractive to us under the right circumstances.”
Heidenberg owns more than 2.4 million square feet of retail space across the Northeast to the Mid-Atlantic, including the Kohl’s shopping center plaza on Central Avenue in New York’s capital city.