After exhausting appeals, Transformco retains Mall of America's 100-year Sears lease

After exhausting all appeals, Transformco retains the remaining term of the 100-year Sears lease at Mall of America.

One provision in the Sears lease was very damaging to the landlord. Lease language allowed Sears “after 15 years of operation, to cease to operate and sublease any portion of the property, or assign the entire lease, all without the landlord’s consent.” However, Sears is no longer the tenant or the holder of the lease but Transformco is, a distant Sears successor.

Transformco, officially known as Transform Holdco LLC, is a privately held company established in February of 2019, to acquire assets of Sears Holdings Corporation following its bankruptcy. The Sears store at Mall of America closed permanently in late March 2019.

The store has remained closed for six years, a travesty for a vibrant mall that has been fighting in court to recover the space so it can bring in a productive anchor.

Now, either Transformco assigns the lease to another user or the landlord has to buy the lease from the tenant to revitalize the mall.

Long-term anchor deals made decades ago can have profound consequences even today.

Read more: Supreme Court lets $10-a-year Sears lease stand at Mall of America (CoStar News)