Seritage Growth Properties has made progress separating itself from its former parent, retailer Sears Holdings.

Seritage Growth owns 253 retail properties, totaling some 40 million square feet. When the public REIT spun off from Sears Holdings in 2015, about 22 percent of its rental income came from third parties, while 78 percent was from Sears Holdings. Now, two years later, the parent is no longer the primary tenant at 111 Seritage properties, up from 11 properties at the REIT's formation.

With a cumulative total of 4.8 million square feet of new leases signed, at an average multiple of 4.1 times the previous rents, the firm has achieved its stated goal of boosting non-Sears income (based on signed leases) to upwards of 50 percent of total rental income by year-end 2017, according to President and CEO Benjamin Schall. “We also surpassed our year-end 2017 goal of completing or commencing new redevelopment projects in excess of $1 billion," he said, "with 78 projects totaling $1.1 billion of projected investment, at incremental returns of 10 to 12 percent on an unlevered basis.” The firm is currently redeveloping properties in Aventura, Fla., and in California — in La Jolla and Santa Monica.

Seritage signed new leases totaling 2.6 million square feet in 2017, a 26 percent increase over 2016 leasing activity. Some 870,000 square feet of new leasing was signed in the fourth quarter of 2017 alone, at an average base rent of $17 per square foot.

Sears Holdings has faced declining sales and traffic for years. The retailer reports that its November–December 2017 comps declined by 16 percent, on top of a 12 percent decline for November–December 2016. On Jan. 4, Sears Holdings announced plans to close 103 additional stores, including 64 Kmart units and 39 Sears stores.