Seritage Growth Properties is partnering with Invesco Real Estate as it converts the former Sears department store in Downtown Santa Monica into a creative office space.
A New York-based real estate investment trust, Seritage sold half its stake in the 100,000-square-foot building, entering into a joint venture with Atlanta-based Invesco, a real estate investment firm. Invesco paid $50 million, the two companies said in a statement announcing the deal on Thursday.
Seritage will use part of the proceeds to pay off the mortgage on the property, which is valued at $145 million. The rest will go toward the $50 million planned conversion.
The landmarked Art Deco building, at 302 Colorado Avenue, will reopen as a four-story mixed-use creative office space called the Mark 302.
It will include a beer garden and a rooftop garden and leisure space meant to appeal to tenants looking to get in on the burgeoning tech scene in Santa Monica. It sits a few blocks from the Santa Monica Pier, across Colorado Avenue from the high-end Santa Monica Place shopping mall, and a block from the last stop on the Metro Expo Line.
Seritage calls the conversion the “first phase of the redevelopment of the site,” and hinted at a future development on parking lot space there.
The Sears store opened there in 1947 and was landmarked in 2004. Seritage first proposed a redevelopment in 2016. The store shuttered a year ago.
Seritage controls 224 wholly-owned Sears and Kmart stores and 31 stores as joint ventures with firms including General Growth Properties, Simon Property Group, and Macerich.
Invesco is no stranger to Santa Monica, nor the tech industry. In November 2016, it sold an office building at 2700 Colorado Avenue for $368 million to Larry Ellison’s Oracle company, which penciled out to $1,165 per square foot, making it the most expensive office deal in the city at the time.
That same year it inked a deal with Google for a portion of its Hercules campus in nearby Playa Vista, including the “Spruce Goose Hangar” where Howard Hughes built his gigantic wooden airplane in the 1940s.