Kennedy: 'Recapturing' Sears space in Colonie Center a slow-go

PHOTOGRAPHER: Peter R. Barber

Colonie Center's former Sears store is seen on June 22, 2017.

Judging from the parking lot, the lunch trade looked brisk one day this week at BJ’s Restaurant & Brewhouse, which opened in mid-June in a portion of the former Sears Auto outparcel at Colonie Center.

A similar busyness was missing from the nearby lots where shoppers used to park when visiting the mall’s Sears store, which closed last fall.

Seritage Growth Properties of New York City, which owns the space inside and outside the mall where Sears was a tenant, announced a year ago its plan to “recapture” and redevelop the site, which includes more than 1,500 surface parking spaces.

So far, though, there is little sign of new life, save the debut of BJ’s casual restaurant.

Seritage’s website advertises the availability of four ground-floor spaces for lease inside the mall, carved from what was once the Sears store. It also lists three spaces at the former auto center, with BJ’s occupying one of them.

But that still leaves more than 125,000 square feet on the mall’s upper and lower levels, which a site plan on the website labels as “Sears” and does not list as “available,” as it does the other spaces.

A Seritage leasing executive did not return multiple requests for comment.

While Seritage owns the former Sears space, the bulk of the mall is owned by an affiliate of investment firm Kohlberg Kravis Roberts. A marketing executive with one of the affiliate’s retail partners indicated they are “in communication” with Seritage about the Sears space in Colonie, but deferred questions about its redevelopment to Seritage.

Seritage formed in 2015 as a real estate investment trust with its holdings primarily in the sites occupied by Sears and Kmart. As those retailers faltered, Seritage took back the leases on closed stores and made them available to other tenants – at rents significantly higher than Sears and Kmart paid.

A review of Seritage regulatory filings and press releases shows no cookie-cutter pattern for redeveloping the recaptured space.

In some cases, Seritage has partnered with real estate investors and retail developers to create new upscale shopping. In others, it has gone farther afield, with joint ventures to turn the upper floors of a former Sears store in downtown Santa Monica, California, into “creative” office space, and to raze a store near Seattle as part of a massive residential-hotel-office proposal.

Earlier this year, Seritage also agreed to sell its Sears property near San Francisco back to the owner of the mall in which it was located.

William Cappelletti of Clifton Realty Management, who handles leasing for Colonie Center, said the KKR affiliates “would like to see the [Sears] building re-tenanted, and have offered our services to help/assist in any way possible.”

He indicated that any decision to acquire the building would have to come from KKR, but that, “Currently, the building is not for sale.”

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].