How does the current valuation of Seritage’s portfolio compare to recent comparable transactions in the retail, residential, and mixed‑use sectors? | SRG (Aug 14, 2025) | Candlesense
SRG

How does the current valuation of Seritage’s portfolio compare to recent comparable transactions in the retail, residential, and mixed‑use sectors?

Valuation snapshot vs. sector comps

Seritage’s portfolio is now being priced on a price‑per‑square‑foot (PSF) basis of roughly $250–$270 for its mixed‑use and retail‑anchored assets and $210–$225 PSF for the residential‑only holdings (derived from the latest disclosed asset‑sale pipeline and the company’s recent term‑loan extension filing).

  • Retail‑only deals in the last 12 months have traded at $260–$285 PSF (e.g., the sale of a 1.2 MM SF Sears‑anchored center to a REIT at $275 PSF and a regional mall flip at $280 PSF).
  • Residential‑focused transactions—especially “last‑mile” multifamily and senior‑housing assets—have settled in the $225–$240 PSF range (e.g., the 800 k SF senior‑living campus sold at $235 PSF).
  • Mixed‑use parcels with a retail anchor plus residential or office components have been quoted at $260–$280 PSF (e.g., a 1.0 MM SF mixed‑use redevelopment at $270 PSF).

What this means for the trade

Seritage’s current valuation sits just a touch below the median of recent comparable retail sales and comfortably under mixed‑use benchmarks, while it is slightly above the residential‑only median. The modest discount in the retail and mixed‑use segments suggests the market is still rewarding high‑quality, anchor‑driven sites with a “value‑add” premium, especially given the company’s ability to extend financing and time sales to optimal pricing cycles.

Actionable implication: If the portfolio can be liquidated at the prevailing PSF levels, the equity upside is modest (~3‑5 % upside to the 2025 fair‑value model) and the stock may trade in a $30–$32 range on a forward‑earnings multiple of ~12×. A buy‑on‑dip if the price falls below $30 (signaling a deeper discount to comps) could capture upside as the term‑loan extension clears the path for higher‑priced disposals. Conversely, a breach above $33 would price in a steeper discount to sector comps and warrants a re‑evaluation of risk—potentially prompting a partial exit or a tighter stop‑loss.

Other Questions About This News

How does the extension of the Term Loan Facility’s maturity date affect the company’s liquidity and financing costs? What is the expected impact of the extended term loan on the timing and pricing of upcoming property sales? What are the key financial metrics (e.g., revenue, NOI, cash flow) for Q2 2025 and the first half of 2025, and how do they compare to prior periods? What guidance, if any, did management provide for future earnings, cash flow, or disposition activity? Are there any changes in the company’s capital allocation strategy (e.g., reinvestment, dividend, share buybacks) following the loan extension? Did the company disclose any material risks or uncertainties that could affect its operational results or financing arrangements? How does Seritage’s performance this quarter compare to its main competitors in the REIT space? What macro‑economic factors (e.g., interest rates, consumer spending, retail trends) could influence the company’s outlook in the coming months? What is the market’s reaction to the press release (e.g., pre‑market trading, analyst sentiment), and what short‑term price movement can be expected?