Seritage Growth Properties Reports Third Quarter 2025 Operating Results

NEW YORK--( BUSINESS WIRE)--Seritage Growth Properties (NYSE: SRG) (the “Company”), a national owner and developer of retail, residential and mixed-use properties today reported financial and operating results for the three months and nine months ended September 30, 2025.

"We continue to see good progress on our various asset sale processes. While not guaranteed, we currently expect to see near-term closings for all three assets under contract with no due diligence contingencies, which, if completed, would allow us to make a sizeable prepayment of our Term Loan Facility outstanding principal balance prior to year end,” said Adam Metz, CEO & President.

Q3 Sale Highlights:

Financial Highlights:

For the three months ended September 30, 2025:

For the nine months ended September 30, 2025:

Future Sales Projections

As of November 13, 2025, all but six of our remaining assets are either under contract or are in PSA negotiations. Information on the assets that are either under contract or are in PSA negotiations is provided above under Q3 Sales Highlights. The remaining six assets are either being marketed or are expected to be marketed at the appropriate time based on market conditions, and, as a result, any sales thereof are anticipated to occur in 2026 and beyond. Given that we have reduced the number of assets remaining that are neither under contract nor in PSA negotiation, we believe that the continued presentation of future sales projections on a property specific basis could potentially adversely impact our marketing efforts for these assets. As a result, for this quarter, we will be providing an aggregate range of projected gross sale proceeds for all remaining assets that are neither under contract nor in PSA negotiations. Going forward, we will no longer provide future sales projections in any form as such presentations may adversely impact our marketing efforts for the remaining assets as we continue to execute our Plan of Sale.

As of November 13, 2025, the Company's current estimated gross sales proceeds for assets not under contract or in PSA negotiation is $220 - $310 million. Estimated gross sale proceeds for our unconsolidated properties are reflected at the Company's share of estimated proceeds. Sales projections, including timing of sales, are based on the Company's latest forecasts and assumptions, but the Company cautions that actual results may differ materially for all assets until closings are consummated. In addition, see "Market Update" below and the "Risk Factors" section contained in the Company's filings with the Securities and Exchange Commission for the discussion of risks associated with such estimated gross sale proceeds and resulting distributions.

Portfolio

The table below represents a summary of the Company’s properties by planned usage as of September 30, 2025 (in thousands except number of leases and acreage data):

Planned Usage

Total

Built SF / Acreage (1)

Leased SF (1)(2)

% Leased

Avg. Acreage / Site

Consolidated

Multi-Tenant Retail

425 sf / 28 acres

391

92.0%

14.2

Residential (3)

33 sf / 19 acres

100.0%

9.5

Premier

224 sf / 51 acres

189

84.0%

16.8

Non-Core (4)

134 sf /15 acres

0.0%

14.8

Unconsolidated

Other Joint Ventures

93 sf / 28 acres

5.1%

14.2

Premier

158 sf / 57 acres

105

66.6%

19.0

(1) Square footage is presented at the Company’s proportional share.

(2) Based on signed leases at September 30, 2025.

(3) Square footage represents built ancillary retail space whereas acreage represents both retail and residential acreage. Retail and residential are counted separately.

(4) Represents assets the Company previously designated for sale.

Multi-Tenant Retail

The table below provides a summary of all Multi-Tenant Retail signed and in negotiation leases as of September 30, 2025 (in thousands except for number of leases and PSF data):

Number of

Leased

% of Total

Gross Annual Base

% of

Gross Annual

Tenant

Leases

GLA

Leasable GLA

Rent ("ABR")

Total ABR

Rent PSF ("ABR PSF")

In-place retail leases

250.1

58.8

6,474.3

90.7

25.89

SNO retail leases (1)

141.1

33.2

663.5

9.3

4.7

Total retail leases

391.2

92.0

7,137.8

100.0

18.25

(1) SNO = Signed not yet opened leases

The Company has 391 thousand leased square feet. The Company has total occupancy of 92% for its Multi-Tenant retail properties. As of September 30, 2025, there is an additional approximately 34 thousand square feet available for lease.

Premier Mixed-Use

As of September 30, 2025, the Company has 331 thousand in-place leased square feet (226 thousand square feet at share), 40 thousand square feet signed but not opened (40 thousand square feet at share), and 168 thousand square feet available for lease (115 thousand square feet at share).

The table below provides a summary of all signed leases at Premier assets as of September 30, 2025, including unconsolidated entities at the Company’s proportional share (in thousands except for number of leases and PSF data):

Number of

Leased

% of Total

Gross Annual

% of

Gross Annual

Tenant

Leases

GLA

Leasable GLA

Base Rent ("ABR")

Total ABR

Rent PSF ("ABR PSF")

In-place retail leases

118.1

31.0

9,574.2

49.3

81.07

In-place office leases

108.0

28.3

7,101.6

36.5

65.76

SNO retail leases as of June 30, 2025 (1)

44.6

3,276.3

73.46

Opened

)

(4.3

)

(453.9

)

105.56

Terminated

)

(0.7

)

(60.0

)

85.71

SNO retail leases as of September 30, 2025 (1)

39.6

10.4

2,762.4

14.2

69.76

Total diversified leases as of September 30, 2025

265.7

69.7

19,438.2

100.0

73.16

(1) SNO = Signed not yet opened leases

Financial Summary

The table below provides a summary of the Company’s financial results for the three months ended September 30, 2025:

Three Months Ended

September 30, 2025

September 30, 2024

Net loss attributable to Seritage common shareholders

(13,647

)

(23,198

)

Net loss per share attributable to Seritage common shareholders

(0.24

)

(0.41

)

NOI-cash basis at share

1,599

(934

)

For the quarter ended September 30, 2025, NOI-cash basis at share reflects the impact of ($0.5) million NOI-cash basis at share relating to sold properties.

As of September 30, 2025, the Company had cash on hand of $59.9 million, including $8.3 million of restricted cash. The Company expects to use these sources of liquidity, together with a combination of future sales and/or potential alternative financing arrangements, to pay its financing obligations and fund its operations and development activity. The availability of funding from sales of assets is subject to various conditions, and there can be no assurance that such transactions will be consummated. For more information on our liquidity position, including our going concern analysis, please see the notes to the consolidated financial statements included in Part I, Item 1 and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each in our Quarterly Report on Form 10-Q.

Litigation Matters

On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws (the “Securities Action”). The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152 (the “Sidhu Derivative Action”. On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190 (the “Wallen Derivative Action”). On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152 (the “Cheroti Derivative Action” and, together with the Sidhu Derivative Action and the Wallen Derivative Action, the “Derivative Actions”). The Derivative Actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the Derivative Actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On February 13, 2025, the parties to the Sidhu Derivative Action and the Wallen Derivative Action filed a stipulation and proposed order seeking to consolidate the Sidhu Derivative Action and the Wallen Derivative Action and appoint lead counsel. On August 29, 2025, the parties in the Cheroti Derivative Action filed a stipulation and proposed order seeking to stay the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action (the "Consolidated Derivative Action") and appointed lead counsel. On November 7, 2025, the parties in the Consolidated Derivative Action filed a stipulation and proposed order seeking to stay the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

Dividends

On February 26, 2025, the Company’s Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend was paid on April 15, 2025 to holders of record on March 31, 2025.

On May 8, 2025, the Company’s Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend was paid on July 15, 2025 to holders of record on June 30, 2025.

On July 23, 2025, the Company's Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend was paid on October 15, 2025 to holders of record on September 30, 2025.

On October 29, 2025, the Company's Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend will be paid on January 15, 2026 to holders of record on December 31, 2025.

Strategic Review

At the 2022 Annual Meeting of Shareholders on October 24, 2022, Seritage shareholders approved the Company’s Plan of Sale. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance regarding the success of the process.

Market Update

The Company continues to face challenging market conditions such as elevated interest rates and the availability of debt and equity capital and continues to assess other potential macroeconomic impacts including supply chain issues and international conflicts associated with tariffs as well as potential labor issues. While interest rates have begun to come down, they remain high relative to 2022. Additionally, raising equity capital for land development deals remains challenging. These conditions could apply downward pricing pressures on our remaining assets. In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset. If these challenging market conditions persist, then we expect that they will continue to adversely impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders.

Non-GAAP Financial Measures

The Company makes references to NOI-cash basis and NOI-cash basis at share which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).

Neither of NOI-cash basis or NOI-cash basis at share are measures that (i) represent cash flow from operations as defined by GAAP; (ii) are indicative of cash available to fund all cash flow needs, including the ability to make distributions; (iii) are alternatives to cash flow as a measure of liquidity; or (iv) should be considered alternatives to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. Reconciliations of these measures to the respective GAAP measures the Company deems most comparable have been provided in the tables accompanying this press release.

Net Operating Income (Loss)-cash basis ("NOI-cash basis”) and Net Operating Income (Loss)-cash basis at share ("NOI-cash basis at share")

NOI-cash basis is defined as income from property operations less property operating expenses, adjusted for variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles. Other real estate companies may use different methodologies for calculating NOI-cash basis, and accordingly the Company’s depiction of NOI-cash basis may not be comparable to other real estate companies. The Company believes NOI-cash basis provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.

The Company also uses NOI-cash basis at share, which includes its proportional share of Unconsolidated Properties. The Company does not control any of the joint ventures constituting such properties and NOI-cash basis at share does not reflect our legal claim with respect to the economic activity of such joint ventures. We have included this adjustment because the Company believes this form of presentation offers insights into the financial performance and condition of the Company as a whole given the Company’s ownership of Unconsolidated Properties that are accounted for under GAAP using the equity method. The operating agreements of the Unconsolidated Properties generally allow each investor to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.

The Company also considers NOI-cash basis and NOI-cash basis at share to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.

Due to the adjustments noted, NOI-cash basis and NOI-cash basis at share should only be used as an alternative measure of the Company’s financial performance.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” "will," "approximately," or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that could cause or contribute to such differences include, but are not limited to: declines in retail, real estate and general economic conditions; risks relating to redevelopment activities; contingencies to the commencement of rent under leases; the terms of the Company’s indebtedness and other legal requirements to which the Company is subject; failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; the impact of ongoing negative operating cash flow on the Company’s ability to fund operations and ongoing development; the Company’s ability to access or obtain sufficient sources of financing to fund the Company’s liquidity needs; environmental, health, safety and land use laws and regulations; and possible acts of war, terrorist activity or other acts of violence or cybersecurity incidents. For additional discussion of these and other applicable risks, assumptions and uncertainties, see the “Risk Factors” and forward-looking statement disclosure contained in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2024 and any subsequent Form 10-Qs. While the Company believes that its forecasts and assumptions are reasonable, the Company cautions that actual results may differ materially. The Company intends the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

About Seritage Growth Properties

Prior to the adoption of the Company’s Plan of Sale, Seritage was principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of September 30, 2025, the Company’s portfolio consisted of interests in 13 properties comprised of approximately 1.3 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 198 acres of land. The portfolio encompasses eight consolidated properties consisting of approximately 0.8 million square feet of GLA and 113 acres (such properties, the “Consolidated Properties”) and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres (such properties, the “Unconsolidated Properties”).

SERITAGE GROWTH PROPERTIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

September 30, 2025

December 31, 2024

ASSETS

Investment in real estate

Land

31,258

65,009

Buildings and improvements

152,611

239,978

Accumulated depreciation

(21,328

)

(39,940

)

162,541

265,047

Construction in progress

2,093

93,587

Net investment in real estate

164,634

358,634

Real estate held for sale

141,447

Investment in unconsolidated entities

164,463

189,699

Cash and cash equivalents

51,540

85,206

Restricted cash

8,332

12,503

Tenant and other receivables, net

7,167

7,894

Lease intangible assets, net

901

1,047

Prepaid expenses, deferred expenses and other assets, net

20,126

22,791

Total assets (1)

558,610

677,774

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Term loan facility, net

196,668

240,000

Accounts payable, accrued expenses and other liabilities

22,852

31,971

Total liabilities (1)

219,520

271,971

Commitments and Contingencies (Note 9)

Shareholders' Equity

Class A common shares $0.01 par value; 100,000,000 shares authorized; 56,324,607 and 56,274,466 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

562

Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024; liquidation preference of $70,000

Additional paid-in capital

1,362,718

1,362,644

Accumulated deficit

(1,025,583

)

(958,778

)

Total shareholders' equity

337,725

404,456

Non-controlling interests

1,365

1,347

Total equity

339,090

405,803

Total liabilities and equity

558,610

677,774

(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets, as of September 30, 2025, include the following amounts related to our consolidated VIEs: $8.5 million included in real estate held for sale, $64.0 thousand of cash and $62.6 thousand of accounts payable, accrued expenses and other liabilities. The Company's consolidated balance sheets as of December 31, 2024, include the following amounts related to our consolidated VIEs: $3.3 million of land, $2.8 million of building and improvements, $(0.9) million of accumulated depreciation and $3.2 million of other assets included in other line items.

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

2025

2024

2025

2024

REVENUE

Rental income

4,603

2,899

13,586

12,790

Management and other fee income

182

352

451

450

Total revenue

4,785

3,251

14,037

13,240

EXPENSES

Property operating

3,625

4,258

9,770

12,091

Abandoned project costs

—

5,732

—

5,732

Real estate taxes

607

971

2,252

3,602

Depreciation and amortization

1,698

4,377

5,813

10,860

General and administrative

4,922

7,178

26,787

23,244

Total expenses

10,852

22,516

44,622

55,529

Gain on sale of real estate, net

—

4,184

8,903

7,357

Loss on sale of interests in unconsolidated entities

—

(1,417

)

—

Impairment of real estate assets

(800

)

—

(18,800

)

(87,536

)

Equity in income (loss) of unconsolidated entities

644

118

(6,528

)

(69

)

Interest and other income (expense), net

(834

)

(872

)

956

1,268

Interest expense

(5,290

)

(6,051

)

(15,659

)

(19,344

)

Loss before income taxes

(12,347

)

(21,886

)

(63,130

)

(140,613

)

Provision for income taxes

(75

)

(87

)

(1,572

)

Net loss

(12,422

)

(21,973

)

(63,130

)

(142,185

)

Preferred dividends

(1,225

)

(1,225

)

(3,675

)

(3,675

)

Net loss attributable to Seritage common shareholders

(13,647

)

(23,198

)

(66,805

)

(145,860

)

Net loss per share attributable to Seritage Class A common shareholders - Basic

(0.24

)

(0.41

)

(1.19

)

(2.59

)

Net loss per share attributable to Seritage Class A common shareholders - Diluted

(0.24

)

(0.41

)

(1.19

)

(2.59

)

Weighted-average Class A common shares outstanding - Basic

56,324

56,268

56,311

56,251

Weighted-average Class A common shares outstanding - Diluted

56,324

56,268

56,311

56,251

Reconciliation of Net Loss to NOI-cash basis and NOI-cash basis at share (in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

NOI-cash basis and NOI-cash basis at share

2025

2024

2025

2024

Net loss

(12,422

)

(21,973

)

(63,130

)

(142,185

)

Management and other fee income

(182

)

(352

)

(451

)

(450

)

Abandoned project costs

—

5,732

—

5,732

Depreciation and amortization

1,698

4,377

5,813

10,860

General and administrative expenses

4,922

7,178

26,787

23,244

Equity in (income) loss of unconsolidated entities

(644

)

(118

)

6,528

Loss on sale of interests in unconsolidated entities

—

1,417

—

Gain on sale of real estate, net

—

(4,184

)

(8,903

)

(7,357

)

Impairment of real estate assets

800

—

18,800

87,536

Interest and other (income) expense, net

834

872

(956

)

(1,268

)

Interest expense

5,290

6,051

15,659

19,344

Provision for income taxes

—

1,572

Straight-line rent

(166

)

251

Above/below market rental expense

117

145

NOI-cash basis

235

(2,256

)

1,740

(2,507

)

Unconsolidated entities (1)

Net operating income of unconsolidated entities (2)

1,448

1,461

5,268

4,012

Straight-line rent

(75

)

(130

)

(212

)

(451

)

Above/below market rental expense

)

(27

)

(27

)

NOI-cash basis at share

1,599

(934

)

6,769

1,027

(1) Activity represents the Company's proportionate share of unconsolidated entity activity.

(2) Net operating income of unconsolidated entities excludes depreciation and amortization, gains, losses and impairments and management and administrative costs.

Properties sold during the nine months ended September 30, 2025:

Total

2025 Qtr

City

State

Full / Partial Sale

SF (1)

Sold

Boca Raton

Full Site

4,200

Barton Creek

Full Site

82,300

Santa Rosa

Full Site

82,700

Braintree

Full Site

85,100

(1) Square footage at share