New Dave & Buster's location in Wayne, New Jersey takes over the second story of a Sears location at Willowbrook Mall

Warren Buffett's Berkshire Hathaway has agreed to loan a landlord to Sears stores, Seritage Growth Properties, up to $2 billion.

Seritage, a real estate investment trust spun off from Sears Holdings roughly three years ago, said late Tuesday it plans to use the funds to forge ahead with plans to redevelop the properties in its portfolio — nearly 250 of them — to either replace locations once occupied by Sears or move Sears into smaller locations at the mall. The New York-based REIT said it already used part of the loan to repay an outstanding mortgage loan and unsecured term loan.

"We very much appreciate Berkshire Hathaway's confidence in our team and platform," Seritage CEO Ben Schall said in a statement.

Seritage shares surged 14.5 percent Wednesday on the news.

Buffett himself was also an early investor in Seritage, and he is still a top shareholder in the REIT, owning about 5.7 percent of its outstanding shares. The billionaire said a few years ago that his investment in Seritage made sense because it didn't conflict with any of Berkshire's companies.

The latest loan that Berkshire made to Seritage gives the REIT an initial loan of $1.6 billion at a fixed rate of 7 percent, with the option for Seritage to borrow an additional $400 million by a maturity date of July 31, 2023.

As Sears trims its brick-and-mortar fleet, struggling with declining sales and a heavy debt load, Seritage has proactively been taking back those stores and repurposing them for mixed uses. It recently laid out plans to redevelop a Sears store in Orland Park, Illinois, for example, to bring in an AMC Theatre, alongside other retailers and restaurants.

Retail real estate analysts believe that so long as Sears' closures don't happen too quickly, and as long as Seritage has enough capital on hand, the REIT will be able to transform its properties into more vibrant centers. As of March 31, Seritage still had 167 leases with Sears Holdings, making the department store chain its top tenant. Other top tenants (by a percentage of total annual rent) include Round One Entertainment, Dave & Busters, At Home and Burlington.

Seritage is set to report second-quarter earnings after the bell on Thursday.