Sears in joint venture with General Growth that will help it extract value from real estate

Sears has entered a joint venture with shopping mall owner General Growth Properties Inc. that will help it extract more value from its real estate holdings and increase its financial flexibility.

Its shares climbed nearly 4 percent in Wednesday premarket trading.

Sears has been taking a number of actions, including closing stores and selling assets, as it continues with efforts to turn around its business. The retailer has shifted its focus from running a store network to operating an online and offline business tied together by its Shop Your Way loyalty program.

The joint venture includes 12 Sears properties in General Growth malls that are valued at $330 million. The properties include existing Sears stores as well as some property leased to third parties occupying former Sears stores. The joint venture, which General Growth has given $165 million to, leased back the existing Sears stores.

Sears Chairman and CEO Edward Lampert said in a statement that the Hoffman Estates, Illinois-based company will continue to run the 12 Sears stores.

Sears and Chicago-based General Growth will each have a 50 percent stake in the joint venture, and Sears will receive a $165 million payment.

Separately, Sears Holdings Corp. said that it plans to sell about 254 of its other properties to a real estate investment trust that it is creating, Seritage Growth Properties. The properties involved in the transaction are mostly Sears and Kmart stores. Sears anticipates more than $2.5 billion in proceeds from the sale.

Sears previously announced plans to form the real estate investment trust.

Sears anticipates distributing rights to acquire Seritage shares to all Sears stockholders. If the rights offering is completed, Sears said that it expects to sell its 50 percent stake in the joint venture to Seritage for $165 million.

Sears owned or leased 1,725 Sears and Kmart stores combined as of Jan. 31. Its stock rose $1.62, or 3.9 percent, to $43 before the market open.