Why Seritage Growth Properties Stock Rallied as Much as 12% Today
Shares of retail landlord Seritage Growth Properties (NYSE: SRG) rallied out of the gate on Jan. 26, gaining as much as 12% in the first few minutes of trading. However, that advance proved short lived, with the stock quickly cooling off. By 1 p.m. EST the shares were up just 4% or so. The initial spike was the result of a business update. The retreat from the peak was likely the realization among investors that there's still a lot of work to be done before this REIT can truly live up to the word "growth" included in its name.
Seritage Growth Properties is the real estate investment trust (REIT) created by Sears Holdings a few years back, when that retailer was looking to raise some much-needed cash. At the start of its life, Seritage was saddled with a portfolio filled with troubled Sears and Kmart stores. The goal then, and now, was to transition away from those retailers, upgrading assets and finding new and better-positioned tenants. It is, and always has been, a turnaround story. Management has made progress, since it has basically no material exposure to Sears or Kmart anymore. But this was always going to be a long, difficult, and costly effort. And then things got extra complicated when the coronavirus pandemic showed up.
Image source: Getty Images.
Source Fool.com
