A broker for Seritage Properties said a tenant has signed a lease to occupy about half of the Sears store space at Manchester Center in Fresno.
Written by David Castellon
By this time next year, the Sears at Fresno’s Manchester Center could occupy only half the space it now has, while a new retail tenant could occupy the rest.
Matt Kircher, the San Francisco-based commercial real estate broker handling the matter, said today that a lease agreement has been signed on 98,770 square feet of the current Sears department store, essentially the north half of the building.
He declined to say what business is leasing the space, but estimated that the new tenant could take over the space and be open by summer of next year.
The entire 21,450-square-foot, detached Sears Auto Center at Manchester also is available for lease, but so far there have been no takers, Kircher said.
What’s happening at the Manchester Sears follows a national trend of big box stores moving into smaller spaces than they have in the past or downsizing existing stores to reduce overhead costs.
In Sears’ case, the one-time retail giant has been losing money, along with its Kmart stores, and earlier this year announced the closures of more than 100 stores in both chains, which included the Sears at the Hanford Mall.
Kircher said he’s handling similar efforts to downsize other Sears stores, including those at the Sequoia Mall in Visalia and at the Merced Mall.
All three are owned by New York-based Seritage Holdings Corp., which in 2015 acquired 235 Sears and Kmart stores, along with interest in an 31 more stores, from Sears Holding Corp., the parent company of both department store chains, according to news reports.
Sears and Kmart, in turn, have been leasing those buildings from Seritage.
Kircher said that part of the deal in Seritage acquiring the store properties was to reduce their sizes, presumably to seek tenants for the vacated portions willing to pay higher lease rates while allowing Sears to continue operating leaner brick-and-mortar stores.