A Website to Sell Surplus Real Estate Won't Revive Sears

Last Updated Apr 26, 2010 4:49 PM EDT

Sears Holdings Corp. (SHLD) recently launched a new Web site, SHC Realty, in order to sell vacant stores and lease space in existing locations. Though not a bad idea, it's not an uncommon retailer offering and won't likely result in a mass dump of the retailer's excess real estate.

When Kmart and Sears merged in 2004, many speculated at the time that Edward Lampert, currently the chairman of the combined entity, sell off the potentially high-priced real estate owned by the struggling chains. That never happened.

Fast forward to 2010, and a period of major commercial real estate malaise. The transaction volume of properties trading hands -- including retail assets -- is way down from 2007, and prices have since dropped 41.8 percent, according to Moody's. A new website is not likely to draw more capital into the market looking to buy a vacant Kmart store, or even get all of Sears a desirable price.

Plus, Sears' concept isn't exactly new. Walmart (WMT) has promoted a real estate Web site for years that lists buildings and land plots for lease. Grocer Safeway (SWY) runs a similar site.

To Sears' credit, though, SHC Realty is thorough. One interesting aspect of the site is a section that offers spaces for lease in current stores. It gives other businesses the chance to open smaller stores within a Sears, build locations directly beside a current store, or construct outlets in a store's parking lot. In an interview with the Chicago Tribune, retail consultant Alan Barocas sounded impressed. "It's purely an income stream," he said.

But as Sears continues to close under performing stores, it would be nice of management found a way to sell them off. Unfortunately, in this environment, it's going to take more than a clever website to pull that off.