New York based Seritage Growth Properties, a publicly-traded, self-administered and self-managed REIT, along with and Invesco Real Estate, a global real estate investment manager, revealed a joint venture partnership to own The Mark 302, the mixed-use redevelopment of the former Sears building in downtown Santa Monica, CA.
The transaction values The Mark 302 at approximately $145 million, including costs remaining to complete the project. Seritage sold a 50% interest in the project to Invesco Real Estate and received proceeds of approximately $50 million at closing, which it utilized to repay existing mortgage debt associated with the property.
The partnership will invest, or pursue construction financing to fund, the additional capital required to convert the historic 96,500 square foot building into flagship office space with spectacular rooftop and outdoor terraces, along with a tailored mix of smaller shop retail, restaurants and food and beverage offerings.
“We are pleased to partner with Invesco Real Estate, one of the leading investment managers in the country, to redevelop this iconic property into a first-class, institutional-quality asset, and look forward to potential future opportunities together,” says Benjamin Schall, President and Chief Executive Officer of Seritage Growth Properties. “We believe this strategic transaction is a testament to both the quality of the asset and the strength of our platform to envision, entitle and execute on the extensive repurposings of formerly single-tenant buildings into multi-tenant, mixed-use destinations.”
Schall continues that “in addition to capturing meaningful value upon the formation of the joint venture, we paid down our existing mortgage debt and are positioned to participate in the additional value generated upon stabilization of the project.”
Invesco is excited to partner with Seritage and create long-term value through the transformation of this trophy site in the very desirable downtown Santa Monica market, adds Pete Cassiano, managing director of Invesco Real Estate.
The Mark 302 will be a premier mixed-use asset with flagship creative office space and unique retail offerings with an emphasis on food and beverage. The landmarked property is exceptionally well-located in downtown Santa Monica, directly across the street from the Metro Expo Line station and two blocks from the beach and Santa Monica Pier. The Mark 302 represents the first phase of the redevelopment of the site, with potential opportunities for additional development of the site’s surface parking lot.
Seritage Growth Properties currently has 230 wholly-owned properties and 23 joint venture properties totaling over 39 million square feet of space across 49 states and Puerto Rico.