8-K
Seritage Growth Properties (SRG)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): November 09, 2022 |
|---|
SERITAGE GROWTH PROPERTIES
(Exact name of Registrant as Specified in Its Charter)
| Maryland | 001-37420 | 38-3976287 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 500 Fifth Avenue, Suite 1530 | ||
| New York, New York | 10110 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 212 355-7800 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A common shares of beneficial interest, par value $0.01 per share | SRG | New York Stock Exchange |
| 7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share | SRG-PA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 9, 2022, the Company issued a press release regarding its financial results for the three and nine months ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report.
In addition, on November 9, 2022, the Company published certain supplementary financial information relating to the three and nine months ended September 30, 2022. Such information is furnished as Exhibit 99.2 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated November 9, 2022. |
| 99.2 | Supplementary Financial Information dated November 9, 2022. |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SERITAGE GROWTH PROPERTIES | |
|---|---|
| By: | /s/ Matthew Fernand |
| Matthew Fernand | |
| Chief Legal Officer |
Date: November 9, 2022
EX-99.1
Exhibit 99.1
Seritage Growth Properties Reports Third Quarter 2022 Operating Results
New York – November 9, 2022– 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 and nine months ended September 30, 2022.
“In the third quarter the Company made tremendous progress advancing our plan of sale, which our shareholders overwhelmingly supported at our annual shareholders meeting last month. During the quarter and subsequent to quarter end, our gross proceeds from asset sales totaled $411.6 million, and we have now monetized $583.9 million of assets year to date. This allowed us to repay $280 million of debt from the beginning of Q3 to date, for a total of $440 million of principal repayments since the end of 2021, resulting in annualized interest savings of approximately $30.8 million. We have also developed a robust sales pipeline of over $800 million worth of assets either under contract or with accepted offers, providing a clear path towards further significant debt paydowns. In addition to our success in selling assets and paying down our debt, we continue to create value across the portfolio through leasing, development and securing entitlements” said Andrea Olshan, Chief Executive Officer and President.
Plan of Sale:
On October 24, 2022, at the 2022 Annual Meeting of Shareholders, the shareholders voted to approve the Plan of Sale as detailed in the Company’s Definitive Proxy statement filed with Securities and Exchange Commission on September 14, 2022.
Sale Highlights:
• Generated $235.2 million of gross proceeds during the three months ended September 30, 2022 from the sale of 22 wholly owned properties and 8 joint venture assets.
• Subsequent to quarter end, generated $176.4 million of gross proceeds from the sale of 12 assets.
• The Company has 10 assets under contract for sale with no due diligence contingencies for total anticipated proceeds of $124.9 million and 26 assets under contract for sale subject to customary due diligence for total anticipated proceeds of $421.5 million. All assets for sale are subject to closing conditions. Additionally, the Company has accepted offers and is currently negotiating definitive purchase and sale agreements on assets with accepted offers of approximately $299.2 million.
Financial Highlights:
For the three months ended September 30, 2022:
• Net loss attributable to common shareholders of ($4.7) million, or ($0.08) per share, as compared to net loss attributable to common shareholders of ($21.8) million, or ($0.50) per share for the same period last year.
• Total Net Operating Income (“Total NOI”) of $12.2 million, which is an increase of 50% when compared to assets held in the same manner at September 30, 2021.
• As of September 30, 2022, the Company had cash on hand of $140.6 million, including $10.8 million of restricted cash. As of November 4, 2022, the Company had cash on hand of $134.1 million, including $10.8 million of restricted cash.
• During the quarter, the Company made $170 million in principal repayments on the Company’s term loan facility (“Term Loan Facility”). Subsequent to quarter end, the Company made an additional $110 million in principal repayments, reducing the balance of the Term Loan Facility to $1.16 billion and resulting in a reduction to $360 million of paydowns required by July 31, 2023 to extend the Term Loan Facility for an additional two years.
Other Highlights
• Signed 13 leases covering 85 thousand square feet (75 thousand at share) in the third quarter at an average projected annual rent of $22.06 PSF ($21.20 PSF at share).
• Signed leases in the third quarter included:
• Four new leases covering approximately 7 thousand square feet (4 thousand at share) at Premier assets at an average projected annual rent of $91.39 PSF net ($87.72 PSF at share), bringing the portfolio to 63.5% leased;
• Six leases covering approximately 24 thousand square feet at Multi-Tenant Retail assets at an average projected annual rent of $34.13 PSF net, bringing occupancy of the Multi-Tenant Retail portfolio up to 84.2%;
• Two retail leases covering approximately 39 thousand square feet at Non-Core assets at an average projected annual rent of $9.39 PSF net; and
• One retail lease covering approximately 15 thousand square feet (7.5 thousand at share) at one other unconsolidated entity signed at an average projected annual rent of $5.64 PSF net.
• Leases signed subsequent to quarter end were:
• One thousand square feet of second floor retail was leased at a Premier asset at a base rent of $44.00 PSF net; and
• Ten thousand square feet (5 thousand at share) of ground floor retail at Premier assets at a base rent of $55.65 PSF net ($60.81 PSF at share).
• An additional eight leases under negotiation representing over 100 thousand square feet at an average projected base rent of $23.90 PSF net; and
• Brought 11 tenants online representing 207 thousand square feet (202 thousand at share) and $4.0 million in annual base rent ($3.6 million at share).
Portfolio
The table below represents a summary of the Company’s properties by planned usage as of September 30, 2022:
(in thousands except number of leases and acreage data)
| Planned Usage | Total | Built SF / Acreage (1) | Leased SF (1)(2) | Avg. Acreage / Site | ||
|---|---|---|---|---|---|---|
| Consolidated | ||||||
| Multi-Tenant Retail | 38 | 5,334 sf / 523 acres | 4,492 | 13.8 | ||
| Residential (3) | 11 | 44 sf / 134 acres | 44 | 12.2 | ||
| Premier | 5 | 235 sf / 99 acres | 147 | 19.7 | ||
| Non-Core (4) | 50 | 7,899 sf / 631 acres | 815 | 12.6 | ||
| Unconsolidated | ||||||
| Other Entities | 14 | 1,106 sf / 226 acres | 311 | 16.1 | ||
| Residential (3) | 1 | 49 sf / 12 acres | 30 | 11.7 | ||
| Premier | 2 | 158 sf / 16 acres | 101 | 8.0 |
(1) Square footage is presented at the Company’s proportional share.
(2) Based on signed leases at September 30, 2022.
(3) Represents ancillary tenants currently in place at assets intended for residential use.
(4) Represents assets the Company previously designated for sale.
Multi-Tenant Retail
During the three months ended September 30, 2022, the Company invested $9.2 million in its multi-tenant retail properties. The remaining capital expenditures in the multi-tenant retail portfolio are primarily comprised of tenant improvements. During the third quarter, the Company opened stores representing 188 thousand square feet and $3.0 million of annual base rent. The portfolio inclusive of SNO is 84.2% leased at an average lease term of over 10 years and average rates of $16.87 PSF gross.
The table below provides a summary of all Multi-Tenant Retail signed leases as of September 30, 2022, including unconsolidated entities at the Company’s proportional share:
| (in thousands except 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 | 161 | 4,306 | 80.7 | % | $ | 71,277 | 94.0 | % | $ | 16.55 | ||||
| SNO retail leases (1) | 17 | 185 | 3.5 | % | 4,510 | 6.0 | % | 24.38 | ||||||
| Leases in negotiation | 2 | 102 | 1.9 | % | 1,076 | N/A | 10.65 | |||||||
| Total retail leases | 180 | 4,593 | 86.1 | % | $ | 76,863 | 100.0 | % | $ | 16.73 | ||||
| (1) SNO = signed not yet opened leases. |
During the three months ended September 30, 2022, the Company signed new leases at its retail properties totaling 24 thousand square feet at an average base rent of $34.13 PSF net. The Company has 4.3 million in-place leased square feet and approximately 185 thousand square feet signed but not opened. Seritage has total occupancy of 84.2% for its multi-tenant retail properties. As of September 30, 2022, there is an additional approximately 842 thousand square feet available for lease in the Multi-Tenant Retail portfolio, with multi-tenant retail leases under negotiation for 102 thousand square feet at an average base rent of $10.65 PSF net.
| (in thousands except number of leases and PSF data) | Number of | Annual | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SNO Leases | GLA | ABR | Rent PSF | ||||||||
| As of June 30, 2022 | 17 | 357 | $ | 6,833 | $ | 19.14 | |||||
| Opened | (5 | ) | (188 | ) | (3,028 | ) | 16.11 | ||||
| Sold / terminated | (1 | ) | (8 | ) | (125 | ) | 15.63 | ||||
| Signed | 6 | 24 | 830 | 34.58 | |||||||
| As of September 30, 2022 | 17 | 185 | $ | 4,510 | $ | 24.38 |
Premier Mixed-Use
The Company has one premier mixed-use project in the active leasing stage, which is our property in Aventura, FL. As of September 30, 2022, the Company has 66 thousand in-place leased square feet (43 thousand at share), 283 thousand square feet signed but not opened (205 thousand at share), and 201 thousand square feet available for lease (145 thousand at share) with leases under negotiation for over 20 thousand square feet.
The table below provides a summary of all signed leases at Premier assets as of September 30, 2022, including unconsolidated entities at the Company’s proportional share:
| (in thousands except 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 | 17 | 43 | 10.9 | % | $ | 2,527 | 15.2 | % | $ | 58.77 | ||||
| SNO retail leases (1) | 22 | 93 | 23.8 | % | 7,422 | 44.4 | % | 79.81 | ||||||
| SNO office\ leases (1) | 5 | 112 | 28.5 | % | 6,758 | 40.4 | % | 60.34 | ||||||
| Leases in negotiation | 6 | 23 | 5.8 | % | 1,880 | N/A | 85.45 | |||||||
| Total Premier leases | 50 | 271 | 69.0 | % | $ | 18,587 | 100.0 | % | $ | 68.59 | ||||
| (1) SNO = signed not yet opened leases. |
Premier - Retail
| (in thousands except number of leases and PSF data) | Number of | Annual | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SNO Leases | GLA | ABR | Rent PSF | ||||||||
| As of June 30, 2022 | 23 | 105 | $ | 8,781 | $ | 83.63 | |||||
| Opened | (2 | ) | (3 | ) | (262 | ) | 96.00 | ||||
| Terminated | (2 | ) | (11 | ) | (1,211 | ) | 112.52 | ||||
| Signed | 3 | 3 | 244 | 81.33 | |||||||
| Changes in Asset Categories / Tenant Amendments (1) | - | (1 | ) | (130 | ) | N/A | |||||
| As of September 30, 2022 | 22 | 93 | $ | 7,422 | $ | 79.81 | |||||
| (1) Represents short-term leases now represented in specialty leasing or amendments negotiated with the tenant. |
Premier - Office
| (in thousands except number of leases and PSF data) | Number of | Annual | ||||||
|---|---|---|---|---|---|---|---|---|
| SNO Leases | GLA | ABR | Rent PSF | |||||
| As of June 30, 2022 | 4 | 110 | $ | 6,648 | $ | 60.44 | ||
| Signed | 1 | 2 | 110 | 55.00 | ||||
| As of September 30, 2022 | 5 | 112 | $ | 6,758 | $ | 60.34 |
During the three months ended September 30, 2022, the Company invested $15.1 million in its consolidated development and operating properties and an additional $2.9 million into its unconsolidated entities.
Aventura:
During the third quarter of 2022, the Company continued to advance 216,000 square feet of mixed-use activation at the project in Aventura, FL. The Company continues to advance construction on Aventura and remains on track to open its first tenants to the public in the fourth quarter of 2022, with rolling openings thereafter.
During the quarter ended September 30, 2022, the Company signed one new lease totaling two thousand square feet at an average base rent of $72.00 PSF net. As of September 30, 2022, the Company has 127 thousand square feet signed but not opened. With occupancy at 59.0%, the Company has 89 thousand square feet available for lease, of which 22 thousand square feet is in lease negotiation and has leasing activity on over an additional 20 thousand square feet.
San Diego UTC:
As of September 30, 2022, the property has 47 thousand in-place leased square feet and 156 thousand square feet signed but not opened. Subsequent to quarter close, the remaining 10 thousand square feet in vacant space was signed bringing office and retail space to 100% leased.
Dispositions
During the three months ended September 30, 2022, the Company sold 30 properties, generating $235.2 million of gross proceeds. The Company also repurchased one asset for $22.2 million, which it sold during the three months ended September 30, 2022. Of the Q3 transactions:
• $94.2 million of gross proceeds were from vacant or non-income producing assets sold at $40.09 PSF. The sale of these assets eliminates $4.9 million of carrying costs;
• $75.0 million of gross proceeds were from income producing stabilized properties, partially leased development sites and outparcel pads reflecting a 4.3% blended in-place capitalization rate; and
• $66.0 million of gross proceeds from monetizing unconsolidated entity interests.
During the quarter and subsequently, the Company was able to generate a robust sales pipeline. As of November 4, 2022, we had assets under contract for sale with no due diligence contingencies for total anticipated proceeds of $124.9 million and assets under contract for sale, subject to customary due diligence, for total anticipated proceeds of $421.5 million. All assets for sale are subject to closing conditions. Though all of these deals are anticipated to close prior to July 31, 2023, even if only a portion of the contracts actually closed prior to such date, the proceeds from such portion of the contracts that actually closed would provide sufficient proceeds to qualify the Company for the extension of its Term Loan Facility. Additionally, the Company has accepted offers and is currently negotiating definitive purchase and sale agreements on assets with offers of approximately $299.2 million.
Financial Summary
The table below provides a summary of the Company’s financial results for the three and nine months ended September 30, 2022:
| (in thousands except per share amounts) | Three Months Ended | Nine Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||
| Net loss attributable to Seritage<br> common shareholders | $ | (4,664 | ) | $ | (21,759 | ) | $ | (170,074 | ) | $ | (104,769 | ) |
| Net loss per share attributable to Seritage<br> common shareholders | (0.08 | ) | (0.50 | ) | (3.57 | ) | (2.50 | ) | ||||
| Total NOI | 12,150 | 8,075 | 33,245 | 25,061 |
For the quarter ended September 30, 2022:
• Total NOI for the third quarter of 2022 reflects the impact of $(1.0) million total NOI relating to sold properties.
Total NOI is comprised of:
| (in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Properties | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||
| Multi-tenant retail | $ | 14,109 | $ | 11,395 | $ | 40,681 | $ | 32,986 | ||||
| Premier | (1,061 | ) | (458 | ) | (2,900 | ) | (1,540 | ) | ||||
| Residential | 1,229 | (3,099 | ) | (1,917 | ) | (6,440 | ) | |||||
| Sell | (3,304 | ) | (974 | ) | (7,995 | ) | (4,040 | ) | ||||
| Sold | (976 | ) | 492 | (346 | ) | 411 | ||||||
| Total | 9,997 | 7,356 | 27,523 | 21,377 | ||||||||
| Unconsolidated Properties | ||||||||||||
| Residential | 282 | 50 | 77 | 50 | ||||||||
| Premier | 2,158 | 132 | 1,854 | 660 | ||||||||
| Other joint ventures | (287 | ) | 537 | 3,791 | 2,974 | |||||||
| Total | 2,153 | 719 | 5,722 | 3,684 | ||||||||
| Total NOI | $ | 12,150 | $ | 8,075 | $ | 33,245 | $ | 25,061 |
The Company collected 99% of its base rent for the third quarter.
As of September 30, 2022, the Company had cash on hand of $140.6 million, including $10.8 million of restricted cash. The Company expects to use these sources of liquidity, together with a combination of future sales and/or potential debt and capital markets transactions, to fund its operations and select development activity. The availability of funding from sales of assets, partnerships and credit or capital markets transactions 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 condensed consolidated financial statements included in Part I, Item 1 and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each in our Quarterly Report on Form 10-Q.
Dividends
On February 16, 2022, 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, 2022 to holders of record on March 31, 2022.
On April 26, 2022, 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 payable on July 15, 2022 to holders of record on June 30, 2022.
On July 26, 2022, 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 payable on October 17, 2022 to holders of record on September 30, 2022.
On November 1, 2022, 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 payable on January 16, 2022 to holders of record on December 30, 2022.
The Company’s Board of Trustees does not expect to declare dividends on its common shares in 2022.
Strategic Review
The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, following our filing of a final proxy statement with the SEC on September 14, 2022. During the meeting, the Plan of Sale was approved by the shareholders. 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.
Sears Bankruptcy Litigation
On April 6, 2022, the Court entered an order in the Consolidated Litigation, upon the agreement of the parties thereto, providing for a mediation of the litigation. The parties and the Court extended the mediation several times, through August, and up until the settlement described below was reached.
On August 9, 2022, following the mediation, all of the parties to the Litigation and certain of the parties to the Shareholder Litigation (to which Seritage is not a defendant) entered into a settlement agreement pursuant to which the defendants paid to the Sears estate $175 million (of which the Seritage Defendants contributed approximately $35.0 million) in exchange for dismissal of the Consolidated Litigation and for the full and final satisfaction and release of all claims in the Consolidated Litigation (including, in the case of the Seritage Defendants, any and all claims between the Seritage Defendants and the Sears estate in the Sears bankruptcy proceeding).
On September 2, 2022, the United States Bankruptcy Court for the Southern District of New York entered an order approving the settlement and, on October 18, 2022, the Litigation was dismissed. While the Company believes that the claims against the Seritage Defendants in the Litigation were without merit, the Company entered into the settlement, without admitting any fault or wrongdoing, in order to avoid the continued imposition of legal defense costs, distraction, and the uncertainty and risk inherent in any litigation.
The Company has reserved the settlement amount described above based on the Company’s contributions to the settlement of the Litigation. This estimate is recorded as litigation reserve in the condensed consolidated statement of operations during the nine months ended September 30, 2022. The Company paid the settlement amount described above in October 2022.
On March 2, 2021, the Company brought a lawsuit in Delaware state court against QBE Insurance Corporation, Endurance American Insurance Company, Allianz Global Risks US Insurance Company and Continental Casualty Company, each of which are D&O insurance providers of the Company (the “D&O Insurers”). The Company’s lawsuit is seeking, among other things, declaratory relief and money damages as a result of certain of the D&O Insurers refusal to pay certain costs and expenses related to the defense of the Litigation discussed above. Any amounts received from the insurers will offset the Seritage Defendants' contribution. Subsequent to September 30, 2022, the Company reached settlement agreements with two of the D&O Insurers for gross proceeds of $12.7 million. The litigation remains outstanding with respect to the remaining D&O Insurers.
Supplemental Report
A Supplemental Report will be available in the Investors section of the Company’s website, www.seritage.com.
COVID-19 Pandemic
The Coronavirus (“COVID-19”) pandemic has caused significant impacts on the real estate industry in the United States, including the Company’s properties.
As a result of the development, fluidity and uncertainty surrounding this situation, the Company expects that these conditions may change, potentially significantly, in future periods and results for the three and nine months ended September 30, 2022 may not be indicative of the impact of the COVID-19 pandemic on the Company’s business for future periods. As such, the Company cannot reasonably estimate the impact of COVID-19 on its financial condition, results of operations or cash flows over the foreseeable future.
Non-GAAP Financial Measures
The Company makes reference to NOI and Total NOI which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI 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 ("NOI”) and Total NOI
NOI is defined as income from property operations less property operating expenses. Other real estate companies may use different methodologies for calculating NOI, and accordingly the Company’s depiction of NOI may not be comparable to other real estate companies. The Company believes NOI 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 Total NOI, which includes its proportional share of unconsolidated properties. 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 Company also considers NOI and Total NOI 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.
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,” or “potential” 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; the impact of the COVID-19 pandemic on the business of the Company’s tenants and business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service the Company’s debt obligations and ability to pay dividends and other distributions to shareholders; 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; the Company’s relatively limited history as an operating company; and environmental, health, safety and land use laws and regulations. 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, 2021 and in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022. 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
Seritage is principally engaged in the ownership, development, redevelopment, management and leasing of retail and mixed-use properties throughout the United States. As of September 30, 2022, the Company’s portfolio consisted of interests in 121 properties comprised of approximately 16.1 million square feet of gross leasable area ("GLA") or build-to-suit leased area, approximately 313 acres held for or under development and approximately 7.9 million square feet or approximately 631 acres to be disposed of. The portfolio consists of approximately 13.5 million square feet of GLA held by 104 wholly owned properties (such properties, the “Consolidated Properties”) and 2.6 million square feet of GLA held by 17 unconsolidated entities (such properties, the “Unconsolidated Properties”).
Contact
Seritage Growth Properties
(212) 355-7800
IR@Seritage.com
Seritage Growth Properties
CONDENSED Consolidated Balance SheetS
(In thousands, except share and per share amounts)
(Unaudited)
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Investment in real estate | |||||
| Land | 282,917 | $ | 475,667 | ||
| Buildings and improvements | 804,882 | 994,221 | |||
| Accumulated depreciation | (127,043 | ) | (154,971 | ) | |
| 960,756 | 1,314,917 | ||||
| Construction in progress | 260,007 | 381,194 | |||
| Net investment in real estate | 1,220,763 | 1,696,111 | |||
| Real estate held for sale | 202,777 | — | |||
| Investment in unconsolidated entities | 383,061 | 498,563 | |||
| Cash and cash equivalents | 129,767 | 106,602 | |||
| Restricted cash | 10,821 | 7,151 | |||
| Tenant and other receivables, net | 39,943 | 29,111 | |||
| Lease intangible assets, net | 4,511 | 14,817 | |||
| Prepaid expenses, deferred expenses and other assets, net | 62,883 | 61,783 | |||
| Total assets (1) | 2,054,526 | $ | 2,414,138 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Liabilities | |||||
| Term loan facility, net | 1,269,648 | $ | 1,439,332 | ||
| Sales-leaseback financing obligations | — | 20,627 | |||
| Litigation reserve | 35,533 | — | |||
| Accounts payable, accrued expenses and other liabilities | 118,700 | 109,379 | |||
| Total liabilities (1) | 1,423,881 | 1,569,338 | |||
| Commitments and contingencies (Note 9) | |||||
| Shareholders' Equity | |||||
| Class A common shares 0.01 par value; 100,000,000 shares authorized; 56,032,381 and 43,632,364 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 560 | 436 | |||
| Series A preferred shares 0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of September 30, 2022 December 31, 2021; liquidation preference of 70,000 | 28 | 28 | |||
| Additional paid-in capital | 1,359,686 | 1,241,048 | |||
| Accumulated deficit | (731,759 | ) | (553,771 | ) | |
| Total shareholders' equity | 628,515 | 687,741 | |||
| Non-controlling interests | 2,130 | 157,059 | |||
| Total equity | 630,645 | 844,800 | |||
| Total liabilities and shareholders' equity | 2,054,526 | $ | 2,414,138 | ||
| (1) The Company's condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The condensed consolidated balance sheets, as of September 30, 2022, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: 6.6 million of land, 3.9 million of building and improvements, (1.0) million of accumulated depreciation and 4.0 million of other assets included in other line items. The Company's condensed consolidated balance sheets as of December 31, 2021, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: 6.6 million of land, 3.9 million of building and improvements, (0.9) million of accumulated depreciation and 4.0 million of other assets included in other line items. |
All values are in US Dollars.
Seritage Growth Properties
CONDENSED Consolidated Statements of OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended <br>September 30, | Nine Months Ended <br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| REVENUE | ||||||||||||
| Rental income | $ | 23,253 | $ | 28,819 | $ | 81,755 | $ | 87,560 | ||||
| Management and other fee income | 248 | 184 | 2,355 | 598 | ||||||||
| Total revenue | 23,501 | 29,003 | 84,110 | 88,158 | ||||||||
| EXPENSES | ||||||||||||
| Property operating | 9,700 | 11,585 | 31,535 | 33,514 | ||||||||
| Real estate taxes | 6,483 | 8,542 | 21,056 | 27,758 | ||||||||
| Depreciation and amortization | 9,169 | 13,159 | 31,772 | 39,629 | ||||||||
| General and administrative | 10,811 | 8,780 | 30,996 | 32,002 | ||||||||
| Litigation reserve | 533 | — | 35,533 | — | ||||||||
| Total expenses | 36,696 | 42,066 | 150,892 | 132,903 | ||||||||
| Gain on sale of real estate, net | 45,433 | 22,774 | 112,449 | 65,079 | ||||||||
| Loss on sale of interests in unconsolidated entities | (139 | ) | — | (139 | ) | — | ||||||
| Impairment of real estate assets | (10,275 | ) | (3,814 | ) | (120,609 | ) | (70,053 | ) | ||||
| Equity in loss of unconsolidated entities | (2,275 | ) | (5,535 | ) | (69,071 | ) | (9,024 | ) | ||||
| Interest and other (expense) income | (1,047 | ) | 48 | (937 | ) | 8,202 | ||||||
| Interest expense | (21,916 | ) | (26,721 | ) | (67,167 | ) | (81,847 | ) | ||||
| Loss before income taxes | (3,414 | ) | (26,311 | ) | (212,256 | ) | (132,388 | ) | ||||
| Provision for income taxes | (67 | ) | (38 | ) | (295 | ) | (198 | ) | ||||
| Net loss | (3,481 | ) | (26,349 | ) | (212,551 | ) | (132,586 | ) | ||||
| Net loss attributable to non-controlling interests | 42 | 5,815 | 46,152 | 31,492 | ||||||||
| Net loss attributable to Seritage | $ | (3,439 | ) | $ | (20,534 | ) | $ | (166,399 | ) | $ | (101,094 | ) |
| Preferred dividends | (1,225 | ) | (1,225 | ) | (3,675 | ) | (3,675 | ) | ||||
| Net loss attributable to Seritage common shareholders | $ | (4,664 | ) | $ | (21,759 | ) | $ | (170,074 | ) | $ | (104,769 | ) |
| Net loss per share attributable to Seritage Class A<br> common shareholders - Basic | $ | (0.08 | ) | $ | (0.50 | ) | $ | (3.57 | ) | $ | (2.50 | ) |
| Net loss per share attributable to Seritage Class A<br> common shareholders - Diluted | $ | (0.08 | ) | $ | (0.50 | ) | $ | (3.57 | ) | $ | (2.50 | ) |
| Weighted average Class A common shares<br> outstanding - Basic | 55,361 | 43,631 | 47,600 | 41,976 | ||||||||
| Weighted average Class A common shares<br> outstanding - Diluted | 55,361 | 43,631 | 47,600 | 41,976 |
Reconciliation of Net Loss to NOI and Total NOI (in thousands)
| Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| NOI and Total NOI | September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||
| Net loss | $ | (3,481 | ) | $ | (142,083 | ) | $ | (26,349 | ) |
| Termination fee income | — | (92 | ) | (379 | ) | ||||
| Management and other fee income | (248 | ) | (286 | ) | (184 | ) | |||
| Depreciation and amortization | 9,169 | 10,669 | 13,159 | ||||||
| General and administrative expenses | 10,811 | 11,093 | 8,780 | ||||||
| Litigation reserve | 533 | 35,000 | — | ||||||
| Equity in loss of unconsolidated entities | 2,275 | 33,720 | 5,535 | ||||||
| Gain on sale of interests in unconsolidated entities | 139 | — | — | ||||||
| Gain on sale of real estate, net | (45,433 | ) | (68,031 | ) | (22,774 | ) | |||
| Impairment of real estate assets | 10,275 | 109,343 | 3,814 | ||||||
| Interest and other (income) expense | 1,047 | (99 | ) | (48 | ) | ||||
| Interest expense | 21,916 | 22,663 | 26,721 | ||||||
| Provision for income taxes | 67 | 203 | 38 | ||||||
| Straight-line rent | 2,873 | (3,599 | ) | (1,005 | ) | ||||
| Above/below market rental expense | 54 | 56 | 48 | ||||||
| NOI | $ | 9,997 | $ | 8,557 | $ | 7,356 | |||
| Unconsolidated entities | |||||||||
| Net operating income of unconsolidated entities | 2,450 | 2,267 | 666 | ||||||
| Straight-line rent | (305 | ) | (228 | ) | (272 | ) | |||
| Above/below market rental (income)/expense | 8 | 6 | 181 | ||||||
| Termination fee income | — | — | 144 | ||||||
| Total NOI | $ | 12,150 | $ | 10,602 | $ | 8,075 |
EX-99.2
Exhibit 99.2
Forward-Looking Statements
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “would,” “may” or other similar expressions in the Company’s Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of the Company’s Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of the Quarterly Report.
Financial Information
Summary Information
September 30, 2022
(in thousands, except per share and PSF amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| Financial Results | 2022 | 2021 | 2022 | 2021 | ||||
| Net loss attributable to Seritage<br> common shareholders | ) | ) | ) | ) | ||||
| Total NOI | ||||||||
| Net loss per share attributable to Seritage<br> common shareholders | ) | ) | ) | ) | ||||
| Wtd. avg. shares - EPS | ||||||||
| Stock trading price range | 5.40 to 14.06 | 14.25 to 18.22 | 5.21 to 14.45 | 13.86 to 23.22 |
All values are in US Dollars.
Condensed Consolidated Balance Sheets (unaudited)
September 30, 2022
(in thousands, except share and per share amounts)
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Investment in real estate | |||||
| Land | 282,917 | $ | 475,667 | ||
| Buildings and improvements | 804,882 | 994,221 | |||
| Accumulated depreciation | (127,043 | ) | (154,971 | ) | |
| 960,756 | 1,314,917 | ||||
| Construction in progress | 260,007 | 381,194 | |||
| Net investment in real estate | 1,220,763 | 1,696,111 | |||
| Real estate held for sale | 202,777 | — | |||
| Investment in unconsolidated entities | 383,061 | 498,563 | |||
| Cash and cash equivalents | 129,767 | 106,602 | |||
| Restricted cash | 10,821 | 7,151 | |||
| Tenant and other receivables, net | 39,943 | 29,111 | |||
| Lease intangible assets, net | 4,511 | 14,817 | |||
| Prepaid expenses, deferred expenses and other assets, net | 62,883 | 61,783 | |||
| Total assets (1) | 2,054,526 | $ | 2,414,138 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Liabilities | |||||
| Term loan facility, net | 1,269,648 | $ | 1,439,332 | ||
| Sales-leaseback financing obligations | — | 20,627 | |||
| Litigation reserve | 35,533 | — | |||
| Accounts payable, accrued expenses and other liabilities | 118,700 | 109,379 | |||
| Total liabilities (1) | 1,423,881 | 1,569,338 | |||
| Commitments and contingencies (Note 9) | |||||
| Shareholders' Equity | |||||
| Class A common shares 0.01 par value; 100,000,000 shares authorized; 56,032,381 and 43,632,364 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 560 | 436 | |||
| Series A preferred shares 0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of September 30, 2022 December 31, 2021; liquidation preference of 70,000 | 28 | 28 | |||
| Additional paid-in capital | 1,359,686 | 1,241,048 | |||
| Accumulated deficit | (731,759 | ) | (553,771 | ) | |
| Total shareholders' equity | 628,515 | 687,741 | |||
| Non-controlling interests | 2,130 | 157,059 | |||
| Total equity | 630,645 | 844,800 | |||
| Total liabilities and shareholders' equity | 2,054,526 | $ | 2,414,138 | ||
| (1) The Company's condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The condensed consolidated balance sheets, as of September 30, 2022, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: 6.6 million of land, 3.9 million of building and improvements, (1.0) million of accumulated depreciation and 4.0 million of other assets included in other line items. The Company's condensed consolidated balance sheets as of December 31, 2021, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: 6.6 million of land, 3.9 million of building and improvements, (0.9) million of accumulated depreciation and 4.0 million of other assets included in other line items. |
All values are in US Dollars.
Condensed Consolidated Statements of Operations (unaudited)
September 30, 2022
(in thousands, except per share amounts)
| Three Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | |||||||||||||||
| REVENUE | |||||||||||||||||||||
| Rental income | $ | 23,253 | $ | 29,418 | $ | 29,084 | $ | 28,091 | $ | 28,819 | $ | 27,595 | $ | 31,146 | |||||||
| Management and other fee income / (expense) | 248 | 286 | 1,821 | 434 | 184 | 279 | 135 | ||||||||||||||
| Total revenue | 23,501 | 29,704 | 30,905 | 28,525 | 29,003 | 27,874 | 31,281 | ||||||||||||||
| EXPENSES | |||||||||||||||||||||
| Property operating | 9,700 | 10,801 | 11,032 | 11,493 | 11,585 | 11,286 | 10,643 | ||||||||||||||
| Real estate taxes | 6,483 | 6,425 | 8,150 | 7,497 | 8,542 | 9,061 | 10,155 | ||||||||||||||
| Depreciation and amortization | 9,169 | 10,669 | 11,934 | 11,570 | 13,159 | 13,328 | 13,142 | ||||||||||||||
| General and administrative | 10,811 | 11,093 | 9,092 | 9,947 | 8,780 | 11,990 | 11,232 | ||||||||||||||
| Litigation reserve | 533 | 35,000 | — | — | — | — | — | ||||||||||||||
| Total expenses | 36,696 | 73,988 | 40,208 | 40,507 | 42,066 | 45,665 | 45,172 | ||||||||||||||
| Gain/(loss) on sale of real estate, net | 45,433 | 68,031 | (1,015 | ) | 156,602 | 22,774 | 18,097 | 24,208 | |||||||||||||
| Gain on sale of interests in unconsolidated entities | (139 | ) | — | — | — | — | — | — | |||||||||||||
| Impairment of real estate assets | (10,275 | ) | (109,343 | ) | (991 | ) | (25,773 | ) | (3,814 | ) | (64,539 | ) | (1,700 | ) | |||||||
| Equity in loss of unconsolidated entities | (2,275 | ) | (33,720 | ) | (33,076 | ) | (202 | ) | (5,535 | ) | (2,327 | ) | (1,162 | ) | |||||||
| Interest and other income | (1,047 | ) | 99 | 11 | 1,083 | 48 | 530 | 7,624 | |||||||||||||
| Interest expense | (21,916 | ) | (22,663 | ) | (22,588 | ) | (26,128 | ) | (26,721 | ) | (28,976 | ) | (26,150 | ) | |||||||
| (Loss)/income before taxes | (3,414 | ) | (141,880 | ) | (66,962 | ) | 93,600 | (26,311 | ) | (95,006 | ) | (11,071 | ) | ||||||||
| (Provision)/benefit from taxes | (67 | ) | (203 | ) | (25 | ) | 1 | (38 | ) | (298 | ) | 138 | |||||||||
| Net (loss)/income | (3,481 | ) | (142,083 | ) | (66,987 | ) | 93,601 | (26,349 | ) | (95,304 | ) | (10,933 | ) | ||||||||
| Net loss/(income) attributable to non-controlling interests | 42 | 31,328 | 14,782 | (20,655 | ) | 5,815 | 22,464 | 3,213 | |||||||||||||
| Net (loss)/income attributable to Seritage | $ | (3,439 | ) | $ | (110,755 | ) | $ | (52,205 | ) | $ | 72,946 | $ | (20,534 | ) | $ | (72,840 | ) | $ | (7,720 | ) | |
| Preferred dividends | (1,225 | ) | (1,225 | ) | (1,225 | ) | (1,225 | ) | (1,225 | ) | (1,225 | ) | (1,225 | ) | |||||||
| Net (loss)/income attributable to Seritage common shareholders | $ | (4,664 | ) | $ | (111,980 | ) | $ | (53,430 | ) | $ | 71,721 | $ | (21,759 | ) | $ | (74,065 | ) | $ | (8,945 | ) | |
| Net (loss)/income per share attributable to Seritage Class A<br> common shareholders - Basic | $ | (0.08 | ) | $ | (2.56 | ) | $ | (1.22 | ) | $ | 1.64 | $ | (0.50 | ) | $ | (1.73 | ) | $ | (0.23 | ) | |
| Net (loss)/income per share attributable to Seritage Class A<br> common shareholders - Diluted | $ | (0.08 | ) | $ | (2.56 | ) | $ | (1.22 | ) | $ | 1.64 | $ | (0.50 | ) | $ | (1.73 | ) | $ | (0.23 | ) | |
| Weighted average Class A common shares<br> outstanding - Basic | 55,361 | 43,677 | 43,634 | 43,632 | 43,631 | 42,772 | 39,477 | ||||||||||||||
| Weighted average Class A common shares<br> outstanding - Diluted | 55,361 | 43,677 | 43,634 | 43,632 | 43,631 | 42,772 | 39,477 |
Total Net Operating Income
September 30, 2022
(in thousands)
| Three Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NOI and Total NOI | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | ||||||||||||||
| Net (loss)/income | $ | (3,481 | ) | $ | (142,083 | ) | $ | (66,987 | ) | $ | 93,601 | $ | (26,349 | ) | $ | (95,304 | ) | $ | (10,933 | ) | |
| Termination fee income | - | (92 | ) | (277 | ) | (388 | ) | (379 | ) | - | (2,611 | ) | |||||||||
| Management and other fee income | (248 | ) | (286 | ) | (1,821 | ) | (434 | ) | (184 | ) | (279 | ) | (135 | ) | |||||||
| Depreciation and amortization | 9,169 | 10,669 | 11,934 | 11,570 | 13,159 | 13,328 | 13,142 | ||||||||||||||
| General and administrative expenses | 10,811 | 11,093 | 9,092 | 9,947 | 8,780 | 11,990 | 11,232 | ||||||||||||||
| Litigation reserve | 533 | 35,000 | — | — | — | — | — | ||||||||||||||
| Equity in loss of unconsolidated entities | 2,275 | 33,720 | 33,076 | 202 | 5,535 | 2,327 | 1,162 | ||||||||||||||
| Gain on sale of interests in unconsolidated<br> entities | 139 | — | — | — | — | — | — | ||||||||||||||
| Gain on sale of real estate, net | (45,433 | ) | (68,031 | ) | 1,015 | (156,602 | ) | (22,774 | ) | (18,097 | ) | (24,208 | ) | ||||||||
| Impairment of real estate assets | 10,275 | 109,343 | 991 | 25,773 | 3,814 | 64,539 | 1,700 | ||||||||||||||
| Interest and other (income) expense | 1,047 | (99 | ) | (11 | ) | (1,083 | ) | (48 | ) | (530 | ) | (7,624 | ) | ||||||||
| Interest expense | 21,916 | 22,663 | 22,588 | 26,128 | 26,721 | 28,976 | 26,150 | ||||||||||||||
| Provision/(benefit) for income taxes | 67 | 203 | 25 | (2 | ) | 38 | 298 | (138 | ) | ||||||||||||
| Straight-line (rent)/expense | 2,873 | (3,599 | ) | (721 | ) | (236 | ) | (1,005 | ) | (1,238 | ) | 210 | |||||||||
| Above/below market rental (income)/expense | 54 | 56 | 65 | 65 | 48 | 102 | (39 | ) | |||||||||||||
| NOI | $ | 9,997 | $ | 8,557 | $ | 8,969 | $ | 8,541 | $ | 7,356 | $ | 6,112 | $ | 7,908 | |||||||
| Unconsolidated entities | |||||||||||||||||||||
| Net operating income of unconsolidated entities | $ | 2,450 | $ | 2,267 | $ | 1,846 | $ | 2,193 | $ | 666 | $ | 1,646 | $ | 2,437 | |||||||
| Straight-line (rent)/expense | (305 | ) | (228 | ) | (328 | ) | (309 | ) | (272 | ) | (168 | ) | (137 | ) | |||||||
| Above/below market rental (income)/expense | 8 | 6 | 6 | 12 | 181 | (29 | ) | (33 | ) | ||||||||||||
| Termination fee income | — | — | — | 19 | 144 | (9 | ) | (742 | ) | ||||||||||||
| Total NOI | $ | 12,150 | $ | 10,602 | $ | 10,493 | $ | 10,456 | $ | 8,075 | $ | 7,553 | $ | 9,433 |
Additional Information
September 30, 2022
(in thousands)
| As of | As of | |
|---|---|---|
| Debt Summary | September 30, 2022 | December 31, 2021 |
| Term Loan Facility (drawn / undrawn) | 1,270,000 / 400,000 | 1,440,000 / 400,000 |
| Interest rate / undrawn rate | 7.00% / 1.00% | 7.00% / 1.00% |
| Maturity | July 2023 | July 2023 |
| Prepaid Expenses, Deferred Expenses and Other Assets | September 30, 2022 | December 31, 2021 |
| Deferred expenses | ||
| Right of Use Asset | ||
| Other assets | ||
| Prepaid insurance | ||
| FF&E | ||
| Other prepaid expenses | ||
| Prepaid real estate taxes | ||
| Total prepaid expenses, deferred expenses and other assets |
All values are in US Dollars.
| September 30, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Accounts payable and accrued expenses | $ | 36,891 | $ | 36,022 |
| Accrued development expenditures | 31,524 | 27,198 | ||
| Accrued real estate taxes | 16,189 | 11,751 | ||
| Environmental reserve | 9,477 | 9,477 | ||
| Prepaid rental income | 8,423 | 6,478 | ||
| Lease liability | 6,079 | 6,543 | ||
| Accrued interest | 3,908 | 4,978 | ||
| Below-market leases | 2,933 | 3,656 | ||
| Deferred maintenance | 1,722 | 1,722 | ||
| Common and preferred dividends and OP<br> Unit distributions payable | 1,554 | 1,554 | ||
| Total accounts payable, accrued expenses and<br> other liabilities | $ | 118,700 | $ | 109,379 |
Additional Information (cont’d)
September 30, 2022
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rental Revenue Detail | 2022 | 2021 | 2022 | 2021 | ||||||||
| Revenue | ||||||||||||
| Rental income | $ | 19,004 | $ | 22,893 | 66,998 | 67,999 | ||||||
| Tenant reimbursements | 4,249 | 5,547 | 14,387 | 16,571 | ||||||||
| Termination income | - | 379 | 370 | 2,990 | ||||||||
| Total | $ | 23,253 | $ | 28,819 | $ | 81,755 | $ | 87,560 | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Select Non-Cash Items | ||||||||||||
| Straight-line rental income | ||||||||||||
| Wholly-owned | $ | (2,873 | ) | $ | 1,005 | $ | 1,447 | $ | 2,033 | |||
| Joint ventures | 305 | 272 | 860 | 576 | ||||||||
| Total | $ | (2,568 | ) | $ | 1,277 | $ | 2,307 | $ | 2,609 | |||
| Net amortization of above/below market<br> rental income/expense | ||||||||||||
| Wholly-owned | $ | (54 | ) | $ | (48 | ) | $ | (175 | ) | $ | (111 | ) |
| Joint ventures | (8 | ) | (181 | ) | (19 | ) | (119 | ) | ||||
| Total | $ | (62 | ) | $ | (229 | ) | $ | (194 | ) | $ | (230 | ) |
| Amortization of deferred financing costs | $ | (105 | ) | $ | (106 | ) | $ | (316 | ) | $ | (317 | ) |
| Share-based compensation expense | (843 | ) | (272 | ) | (1,735 | ) | (1,225 | ) |
SNO Lease Summary
Multi-Tenant Retail
The table below provides a summary of all multi-tenant Retail signed leases as of September 30, 2022, including unconsolidated entities at the Company’s proportional share:
| (in thousands except 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 | 161 | 4,306 | 80.7 | % | $ | 71,277 | 94.0 | % | $ | 16.55 | ||||
| SNO retail leases (1) | 17 | 185 | 3.5 | % | 4,510 | 6.0 | % | 24.38 | ||||||
| Leases in negotiation | 2 | 102 | 1.9 | % | 1,076 | N/A | 10.65 | |||||||
| Total retail leases | 180 | 4,593 | 86.1 | % | $ | 76,863 | 100.0 | % | $ | 16.73 | ||||
| (1) SNO = signed not yet opened leases. | ||||||||||||||
| (in thousands except number of leases and PSF data) | Number of | Annual | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| SNO Leases | GLA | ABR | Rent PSF | |||||||||||
| As of June 30, 2022 | 17 | 357 | $ | 6,833 | $ | 19.14 | ||||||||
| Opened | (5 | ) | (188 | ) | (3,028 | ) | 16.11 | |||||||
| Sold / terminated | (1 | ) | (8 | ) | (125 | ) | 15.63 | |||||||
| Signed | 6 | 24 | 830 | 34.58 | ||||||||||
| As of September 30, 2022 | 17 | 185 | $ | 4,510 | $ | 24.38 |
Premier Mixed-Use
The table below provides a summary of all signed leases at Premier assets as of September 30, 2022, including unconsolidated entities at the Company’s proportional share:
| (in thousands except 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 | 17 | 43 | 10.9 | % | $ | 2,527 | 15.2 | % | $ | 58.77 | ||||
| SNO retail leases (1) | 22 | 93 | 23.8 | % | 7,422 | 44.4 | % | 79.81 | ||||||
| SNO office\ leases (1) | 5 | 112 | 28.5 | % | 6,758 | 40.4 | % | 60.34 | ||||||
| Leases in negotiation | 6 | 23 | 5.8 | % | 1,880 | N/A | 85.45 | |||||||
| Total Premier leases | 50 | 271 | 69.0 | % | $ | 18,587 | 100.0 | % | $ | 68.59 | ||||
| (1) SNO = signed not yet opened leases. |
Premier Mixed-Use - Retail
| (in thousands except number of leases and PSF data) | Number of | Annual | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SNO Leases | GLA | ABR | Rent PSF | ||||||||
| As of June 30, 2022 | 23 | 105 | $ | 8,781 | $ | 83.63 | |||||
| Opened | (2 | ) | (3 | ) | (262 | ) | 96.00 | ||||
| Terminated | (2 | ) | (11 | ) | (1,211 | ) | 112.52 | ||||
| Signed | 3 | 3 | 244 | 81.33 | |||||||
| Changes in Asset Categories / Tenant Amendments (1) | - | (1 | ) | (130 | ) | N/A | |||||
| As of September 30, 2022 | 22 | 93 | $ | 7,422 | $ | 79.81 | |||||
| (1) Represents short-term leases now represented in specialty leasing or amendments negotiated with the tenant. |
Premier Mixed-Use - Office
| (in thousands except number of leases and PSF data) | Number of | Annual | ||||||
|---|---|---|---|---|---|---|---|---|
| SNO Leases | GLA | ABR | Rent PSF | |||||
| As of June 30, 2022 | 4 | 110 | $ | 6,648 | $ | 60.44 | ||
| Signed | 1 | 2 | 110 | 55.00 | ||||
| As of September 30, 2022 | 5 | 112 | $ | 6,758 | $ | 60.34 |
Top Tenants
September 30, 2022
(rent in thousands)
The following table lists the top tenants in the portfolio as of September 30, 2022, based on signed leases and including Unconsolidated Properties presented at the Company’s proportional share:
| Number of | Total | % of Total | |||||
|---|---|---|---|---|---|---|---|
| Tenant | Leases | SF | Rent | Rent | Concepts / Brands | ||
| Dick's Sporting Goods | 10 | 725,912 | 11,754 | 10.6% | Dick's Sporting Goods, House of Sport | ||
| At Home | 5 | 557,328 | 3,217 | 2.9% | |||
| Round One Entertainment | 6 | 267,473 | 5,786 | 5.2% | |||
| Burlington Stores | 6 | 259,830 | 3,383 | 3.0% | |||
| Dave & Buster's | 8 | 256,526 | 7,657 | 6.9% | |||
| Nordstrom Rack | 5 | 182,518 | 3,897 | 3.5% | |||
| TJX | 8 | 179,075 | 2,312 | 2.1% | TJ Maxx, Marshalls, HomeGoods, HomeSense, Sierra Trading Post | ||
| Cinemark | 4 | 166,570 | 4,673 | 4.2% | |||
| Floor & Décor | 2 | 163,917 | 2,032 | 1.8% | |||
| Vasa Fitness | 3 | 163,912 | 1,928 | 1.7% | |||
| Ross Dress For Less | 7 | 158,647 | 1,692 | 1.5% | Ross Dress for Less, dd's Discounts | ||
| The Dump | 1 | 139,265 | 1,114 | 1.0% | |||
| Primark | 3 | 115,685 | 3,129 | 2.8% | |||
| AMC | 2 | 99,218 | 2,803 | 2.5% | |||
| Amazon | 2 | 99,193 | 5,435 | 4.9% | |||
| Forman Mills | 1 | 94,000 | 675 | 0.6% | |||
| Bed Bath & Beyond | 3 | 91,331 | 1,527 | 1.4% | Bed Bath & Beyond, BuyBuyBaby, andThat! | ||
| Aldi | 4 | 83,448 | 840 | 0.8% | |||
| 24 Hour Fitness | 2 | 77,646 | 1,433 | 1.3% | |||
| Extra Space Storage | 1 | 73,996 | 499 | 0.4% | |||
| Total | 83 | 3,955,490 | 65,786 | 59.2% |
Multi-tenant Retail
Consolidated Properties
| Total | Leased | SNO | Land | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property Address | City | State | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | ||||
| 12025 North 32nd Street | Phoenix | AZ | 151,200 | 151,200 | - | 100.0% | 11 | At Home | ||||
| 575 Fletcher Parkway | El Cajon | CA | 227,300 | 184,400 | - | 81.1% | 20 | Ashley Furniture, Bob's Discount Furniture, Burlington Stores, Extra Space Storage | ||||
| 1191 Galleria Boulevard | Roseville | CA | 122,700 | 107,800 | - | 87.9% | 7 | Cinemark, Round One Entertainment | ||||
| 40710 Winchester Road | Temecula | CA | 126,500 | 112,800 | 8,000 | 95.5% | 10 | Round One Entertainment, Dick's Sporting Goods, Texas Roadhouse | ||||
| 145 West Hillcrest Drive | Thousand Oaks | CA | 172,000 | 113,700 | - | 66.1% | 11 | Dave & Busters, DSW, Nordstrom Rack | ||||
| 19563 Coastal Highway | Rehoboth Beach | DE | 101,900 | 75,900 | 26,000 | 100.0% | 13 | andThat!, PetSmart, Aldi, TJ Maxx | ||||
| 10700 Biscayne Boulevard | North Miami(3) | FL | 129,300 | 129,300 | - | 100.0% | 11 | Aldi, Burlington Stores, Ross Dress for Less, Michaels Stores | ||||
| 3111 East Colonial Drive | Orlando | FL | 107,600 | 94,300 | 2,300 | 89.8% | 18 | Floor & Décor, Aspen Dental, Del Taco | ||||
| 2300 Tyrone Boulevard North | St. Petersburg(4) | FL | 134,700 | 134,700 | - | 100.0% | 15 | Dick's Sporting Goods, Five Below, PetSmart, Verizon | ||||
| 2860 South Highland Avenue | Lombard | IL | 139,300 | 139,300 | - | 100.0% | 8 | The Dump | ||||
| 7503 West Cermak Road | North Riverside | IL | 214,700 | 163,900 | 19,700 | 85.5% | 13 | Round One Entertainment, Aldi, Blink Fitness, Amita Health | ||||
| 2500 Wabash Avenue | Springfield | IL | 119,400 | 108,000 | 11,400 | 100.0% | 5 | Binny's Beverage Depot, Burlington Stores, Marshalls | ||||
| 4201 Coldwater Road | Ft. Wayne | IN | 84,100 | 76,700 | 6,200 | 98.6% | 19 | Five Below, HomeGoods, Bob's Discount Furniture, LensCrafters | ||||
| 101 West Lincoln Highway | Merrillville | IN | 171,300 | 163,000 | 1,600 | 96.1% | 9 | At Home, Dollar Tree | ||||
| 200 Grossman Drive | Braintree | MA | 85,100 | 47,600 | 37,500 | 100.0% | 34 | Nordstrom Rack, Ulta Beauty | ||||
| 1302 Bridford Parkway | Greensboro | NC | 168,200 | 168,200 | - | 100.0% | 16 | Floor & Décor, Gabriel Brothers | ||||
| 4700 2nd Avenue | Kearney | NE | 64,900 | 64,900 | - | 100.0% | 8 | Ross Dress for Less, Five Below, Marshall's, Petsmart | ||||
| 1500 South Willow Street | Manchester | NH | 105,700 | 80,400 | - | 76.1% | 11 | Dick's Sporting Goods, Dave & Buster's | ||||
| 1640 Route 22 | Watchung | NJ | 124,900 | 117,100 | 7,900 | 100.1% | 12 | Cinemark, HomeGoods, Sierra Trading Post, Ulta Beauty, Chick-fil-A , City MD, Starbucks | ||||
| 4000 Jericho Turnpike | East Northport | NY | 179,800 | 167,600 | - | 93.2% | 18 | 24 Hour Fitness, AMC, At Home | ||||
| 200 Eastview Mall | Victor(3) | NY | 139,700 | 119,600 | - | 85.6% | 14 | Dick's House of Sport | ||||
| 4100 Belden Village Avenue Northwest | Canton | OH | 192,300 | 116,300 | 22,000 | 71.9% | 19 | Dick's Sporting Goods, Dave & Busters | ||||
| 160 North Gulph Road | King of Prussia (2) | PA | 208,700 | 174,500 | 34,200 | 100.0% | 14 | Dick's Sporting Goods, Primark, Outback Steakhouse, Yardhouse, Dave & Busters | ||||
| 3801B Clemson Boulevard | Anderson | SC | 117,100 | 117,100 | - | 100.0% | 12 | Burlington Stores, Sportsman's Warehouse, Golds Gym | ||||
| 7801 Rivers Avenue | Charleston | SC | 106,200 | 52,900 | - | 49.8% | 15 | Burlington Stores | ||||
| 4570 Poplar Avenue | Memphis | TN | 116,000 | 101,200 | 8,800 | 94.8% | 11 | LA Fitness, Hopdoddy, Nordstrom Rack, Ulta Beauty, Chase | ||||
| 12625 North Interstate Highway 35 | Austin | TX | 52,700 | 45,000 | - | 85.4% | 13 | AMC | ||||
| 12605 North Gessner Road | Houston | TX | 134,000 | 134,000 | - | 100.0% | 11 | At Home | ||||
| 201 Central Park Mall | San Antonio | TX | 164,600 | 158,200 | - | 96.1% | 17 | Tru Fit, Bed Bath & Beyond, Buy Buy Baby | ||||
| 2010 North Main Street | Layton | UT | 82,700 | 67,500 | - | 81.6% | 7 | Vasa Fitness | ||||
| 12000 Fair Oaks Mall | Fairfax | VA | 212,700 | 154,400 | - | 72.6% | 15 | Dave & Busters, Dick's Sporting Goods | ||||
| 4588 Virginia Beach Boulevard | Virginia Beach (3) | VA | 124,200 | 124,200 | - | 100.0% | 15 | DSW, The Fresh Market, Nordstrom Rack | ||||
| 141 West Lee Highway | Warrenton | VA | 71,500 | 62,400 | - | 87.3% | 9 | HomeGoods, Ulta, Five Below | ||||
| 5200 South 76th Street | Greendale | WI | 217,600 | 133,700 | - | 61.4% | 19 | Dick's Sporting Goods, Round One Entertainment, TJ Maxx | ||||
| 27001 U.S. 19 North | Clearwater | FL | 212,900 | 75,500 | - | 35.5% | 14 | Whole Foods, Nordstrom Rack | ||||
| 1425 Central Avenue | Albany | NY | 232,500 | 59,600 | - | 25.6% | 21 | Whole Foods, Ethan Allen | ||||
| 9484 Dyer Street | El Paso | TX | 107,800 | 99,100 | - | 91.9% | 11 | dd's Discount, Ross Dress for Less, Five Below, Burlington Stores | ||||
| 53 West Towne Mall | Madison | WI | 110,600 | 110,600 | - | 100.0% | 17 | Dave & Busters, Total Wine & More, Hobby Lobby | ||||
| Total | 5,334,400 | 4,306,600 | 185,600 | 84.2% | 523 |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
(2) Property is subject to a ground lease
(3) Asset sold subsequent to September 30, 2022.
(4) Asset with a partial sale subsequent to September 30, 2022.
Residential
Consolidated Properties
| Land | % of Auxiliary | Auxiliary | Outparcel | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Property Address | City | State | Acres | Leased SF (1) | Leased SF (1) | Opportunities | Significant Tenants (1) | |||
| 5261 Arlington Avenue | Riverside - Resi | CA | 14 | 0% | - | - | n/a | |||
| 100 Inland Center | San Bernardino | CA | 20 | 0% | - | 2 | n/a | |||
| 1209 Plaza Drive | West Covina - Resi | CA | 8 | 0% | - | - | n/a | |||
| 850 Hartford Turnpike | Waterford | CT | 11 | 0% | - | - | n/a | |||
| 4125 Cleveland Avenue | Ft. Myers | FL | 12 | 0% | - | - | n/a | |||
| 3800 US Highway 98 North | Lakeland | FL | 12 | 0% | - | - | n/a | |||
| 3340 Mall Loop Drive | Joliet | IL | 17 | 0% | - | - | n/a | |||
| 14250 Buck Hill Road | Burnsville | MN | 15 | 0% | - | 2 | n/a | |||
| 3001 White Bear Avenue North | Maplewood | MN | 14 | 0% | - | 3 | n/a | |||
| 5261 Arlington Avenue | Riverside - Retail | CA | 5 | 100% | 33,200 | - | Bank of America, Aldi | |||
| 1209 Plaza Drive | West Covina - Retail | CA | 7 | 100% | 11,000 | - | VinFast | |||
| Total | 135 | 100% | 44,200 | 7 |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
(2) Riverside & West Covina Retail doesn’t include residential but includes retail leasing that is 100% SRG owned and complementary to the Residential developments at the sites.
Residential
Joint Ventures
| Brookfield Retail Partners (formerly GGP, Inc.) Joint Venture Properties | ||||||||
|---|---|---|---|---|---|---|---|---|
| % of Auxiliary | Auxiliary | Outparcel | ||||||
| Mall Name | City | State | Joint Venture | Leased SF | SF (1) | Opportunities | Significant Tenants (1) | |
| Alderwood | Lynnwood | WA | GGP I JV | 62.6% | 97,167 | - | Dave & Busters, Cheesecake Factory, Fogo De Chao, Shake Shack | |
| Total | 62.6% | 97,167 | - |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
Premier Mixed-Use Properties
Consolidated Properties
| Total | Leased | SNO | Land | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property Address | City | State | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Site Opportunities | |||||
| 19505 Biscayne Boulevard | Aventura | FL | 216,100 | - | 127,500 | 59.0 | % | 13 | Retail, Office | ||||
| 5900 Glades Road | Boca Raton | FL | 4,200 | 4,200 | - | 100.0 | % | 19 | Retail | ||||
| 195 North Broadway | Hicksville | NY | 7,600 | 7,600 | - | 100.0 | % | 30 | Retail | ||||
| 13131 Preston Road | Dallas | TX | - | - | - | 0.0 | % | 23 | Residential, Retail, Office | ||||
| 2200 148th Avenue Northeast | Redmond | WA | 7,500 | 7,500 | - | 100.0 | % | 15 | Residential, Retail, Office | ||||
| Total | 235,400 | 19,300 | 127,500 | 62.4 | % | 100 |
Joint Ventures
| Invesco Real Estate Joint Venture Properties | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | Leased | SNO | Land | |||||||||
| Property Address | City | State | Joint Venture | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Site Opportunities | |||
| 302 Colorado Ave | Santa Monica | CA | Mark 302 JV | 51,500 | - | - | 0.0% | 3 | Residential, Retail, Office | |||
| 4575 La Jolla Village Dr | San Diego | CA | UTC JV | 106,300 | 23,500 | 77,900 | 95.4% | 13 | Life Sciences / Office, Retail | |||
| Total | 157,800 | 23,500 | 77,900 | 64.3% | 16 |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
Other Unconsolidated Entities
Other Joint Ventures
| Brookfield Retail Partners (formerly GGP, Inc.) Joint Venture Properties | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | In-Place | SNO | Land | |||||||||
| Mall Name | City | State | Joint Venture | SF (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | |||
| Altamonte Mall | Altamonte Springs | FL | GGP II JV | 93,500 | 4,700 | - | 5.0% | 17 | n/a | |||
| Coastland Center | Naples (2) | FL | GGP II JV | 36,300 | 28,300 | 8,000 | 100.0% | 12 | CMX Cinebistro, Uncle Julio’s | |||
| Willowbrook Mall | Wayne (2) | NJ | GGP II JV | 132,700 | 52,700 | 52,500 | 79.3% | 41 | Cinemark, Dave & Busters, Yardhouse, BJ's Wholesale | |||
| Total | 262,500 | 85,700 | 60,500 | 55.7% | 70 | |||||||
| Total | Leased | SNO | Land | |||||||||
| Mall Name | City | State | Joint Venture | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | |||
| Stonebriar Centre | Frisco | TX | GCP I JV | 87,500 | 6,000 | - | 6.9% | 11 | 4 Wheel Parts | |||
| Total | 87,500 | 6,000 | - | 6.9% | 11 | |||||||
| Simon Joint Venture Properties | ||||||||||||
| Total | Leased | SNO | Land | |||||||||
| Mall Name | City | State | Joint Venture | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | |||
| Santa Rosa Plaza | Santa Rosa | CA | Simon JV | 82,700 | - | - | 0.0% | 7 | n/a | |||
| The Shops at Nanuet | Nanuet | NY | Simon JV | 110,700 | - | - | 0.0% | 14 | n/a | |||
| Barton Creek Square | Austin | TX | Simon JV | 82,300 | - | - | 0.0% | 16 | n/a | |||
| Total | 275,700 | - | - | 0.0% | 37 | |||||||
| Macerich Joint Venture Properties | ||||||||||||
| Total | Leased | SNO | Land | |||||||||
| Mall Name | City | State | Joint Venture | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | |||
| Chandler Fashion Center | Chandler | AZ | Macerich JV | 70,300 | 5,000 | 32,500 | 53.3% | 10 | Firestone | |||
| Los Cerritos Center | Cerritos | CA | Macerich JV | 138,800 | - | - | 0.0% | 20 | n/a | |||
| Danbury Fair | Danbury | CT | Macerich JV | 88,000 | 24,700 | 63,300 | 100.0% | 12 | Primark, Target | |||
| Freehold Raceway Mall | Freehold | NJ | Macerich JV | 68,800 | 25,200 | 7,500 | 47.5% | 10 | Primark, Bob's Discount Furniture | |||
| Washington Square Mall | Portland | OR | Macerich JV | 114,300 | - | - | 0.0% | 4 | n/a | |||
| Total | 480,200 | 54,900 | 103,300 | 32.9% | 56 | |||||||
| Other | ||||||||||||
| Total | Leased | SNO | Land | |||||||||
| Property Address | City | State | Joint Venture | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | |||
| 12625 North Interstate Highway 35 | Austin | TX | RD Development JV | - | - | - | 0.0% | 11 | n/a | |||
| 5901 Duke Street | Alexandria | VA | Foulger Pratt/ Howard Hughes | - | - | - | 0.0% | 41 | n/a | |||
| Total | - | - | - | 0.0% | 52 |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
(2) Indicates assets that are put right eligible as of November 4, 2022
(3) Indicates assets that have been sold subsequent to September 30, 2022
Non-core Properties
Consolidated Properties
| Total | Leased | SNO | Land | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property Address | City | State | GLA (1) | SF (1) | SF (1) | Leased (1) | Acres | Significant Tenants (1) | ||||
| 3930 McCain Boulevard | North Little Rock | AR | 177,300 | 13,000 | - | 7.3% | 15 | Aspen Dental, Longhorn Steakhouse | ||||
| 3150 South 4th Avenue | Yuma | AZ | 90,100 | - | - | 0.0% | 15 | n/a | ||||
| 42126 Big Bear Boulevard | Big Bear Lake | CA | 92,600 | 4,000 | - | 4.3% | 7 | Subway, Wells Fargo Bank | ||||
| 3751 South Dogwood Road | El Centro | CA | 139,900 | 9,700 | - | 6.9% | 13 | n/a | ||||
| 3636 North Blackstone Avenue | Fresno | CA | 201,800 | 43,400 | 21,500 | 32.2% | 13 | Ross Dress for Less, dd's Discounts, UEI College | ||||
| 1011 West Olive Avenue | Merced | CA | 92,700 | - | 5,600 | 6.0% | 9 | Chilis | ||||
| 10785 West Colfax Avenue | Lakewood | CO | 164,000 | - | - | 0.0% | 8 | n/a | ||||
| 1400 East 104th Avenue | Thornton | CO | 193,700 | 61,700 | - | 31.9% | 23 | Vasa Fitness | ||||
| 1625 Northwest 107th Avenue | Doral | FL | 195,600 | - | - | 0.0% | 13 | n/a | ||||
| 733 North Highway 231 | Panama City | FL | 134,300 | - | - | 0.0% | 15 | n/a | ||||
| 7171 North Davis Highway | Pensacola | FL | 7,900 | 7,900 | - | 100.0% | 14 | Bubba's 33 | ||||
| 8201 South Tamiami Trail | Sarasota(2) | FL | 217,000 | - | - | 0.0% | 15 | n/a | ||||
| 4600 1st Avenue Northeast | Cedar Rapids | IA | 146,300 | - | - | 0.0% | 12 | n/a | ||||
| 5050 South Kedzie Avenue | Chicago | IL | 175,900 | 17,200 | - | 9.8% | 9 | Chuck E Cheese | ||||
| 3231 Chicago Road | Steger | IL | 101,700 | - | - | 0.0% | 3 | n/a | ||||
| 3010 Fort Campbell Boulevard | Hopkinsville(2) | KY | 85,100 | 64,600 | - | 75.9% | 13 | Bargain Hunt, Farmer's Furniture, Harbor Freight | ||||
| 3100 Washtenaw Road | Ypsilanti | MI | 91,700 | 91,700 | - | 100.0% | 11 | At Home | ||||
| 2308 Highway 45 North | Columbus | MS | 121,900 | - | - | 0.0% | 15 | n/a | ||||
| 77 Rockingham Park Boulevard | Salem (2) | NH | 233,000 | 123,800 | - | 53.1% | 12 | Cinemark, Dick's Sporting Goods | ||||
| 4000 Meadows Lane | Las Vegas | NV | 132,600 | 42,500 | - | 32.1% | 11 | Round One Entertainment | ||||
| 5400 Meadowood Mall Circle | Reno | NV | 174,900 | 41,300 | 18,000 | 33.9% | 3 | Round One Entertainment, 4 Wheel Parts | ||||
| 317 Greece Ridge Center Drive | Rochester | NY | 139,600 | - | - | 0.0% | 14 | n/a | ||||
| 600 Lee Boulevard | Yorktown Heights | NY | 153,200 | 38,500 | - | 25.1% | 12 | 24 Hour Fitness | ||||
| 2700 Miamisburg Centerville Road | Dayton | OH | 13,400 | 13,400 | - | 100.0% | 5 | Outback Steakhouse, Hook & Reel | ||||
| 4400 South Western Avenue | Oklahoma City(3) | OK | 197,800 | 50,300 | - | 25.4% | 19 | Vasa Fitness | ||||
| 400 Calle Betances | Caguas (2) | PR | 138,800 | - | - | 0.0% | 8 | n/a | ||||
| Plaza Carolina Station | Carolina (2) | PR | 194,300 | - | - | 0.0% | 11 | n/a | ||||
| 2 Orland Square Drive | Orland Park | IL | 202,800 | - | - | 0.0% | 16 | n/a | ||||
| 1675 West 49th Street | Hialeah | FL | 153,200 | - | - | 0.0% | 15 | n/a | ||||
| 4000 North Shepherd | Houston | TX | 201,600 | - | - | 0.0% | 12 | n/a | ||||
| 2501 Irving Mall | Irving | TX | 107,400 | 12,500 | - | 11.6% | 18 | CareNow, Chick-fil-A | ||||
| 20701 Southwest 112th Avenue | Miami(2) | FL | 178,300 | - | - | 0.0% | 15 | n/a | ||||
| 5900 Sunrise Mall | Citrus Heights | CA | 281,300 | - | - | 0.0% | 21 | n/a | ||||
| 5901 Florin Road | Florin (2) | CA | 245,600 | - | - | 0.0% | 20 | n/a | ||||
| 72880 Highway 111 | Palm Desert | CA | 136,400 | - | - | 0.0% | 7 | n/a | ||||
| 8000 West Broward Boulevard | Plantation | FL | 204,100 | - | 49,800 | 24.4% | 18 | GameTime | ||||
| 15700 Emerald Way | Bowie | MD | 126,400 | - | - | 0.0% | 11 | n/a | ||||
| 425 Rice Street | St. Paul | MN | 201,900 | 100 | - | 0.0% | 17 | n/a | ||||
| 310 Daniel Webster Highway | Nashua | NH | 166,300 | - | - | 0.0% | 12 | n/a | ||||
| 1180 Southeast 82nd Avenue | Happy Valley | OR | 139,800 | 45,000 | - | 32.2% | 12 | Dick's Sporting Goods | ||||
| 300 Baybrook Mall | Friendswood | TX | 165,800 | - | - | 0.0% | 13 | n/a | ||||
| 6301 Northwest Loop 410 | Ingram | TX | 169,900 | - | - | 0.0% | 12 | n/a | ||||
| 7780 W Arrowhead Towne Center | Glendale | AZ | 125,000 | - | - | 0.0% | 9 | n/a | ||||
| 6515 East Southern Avenue | Mesa | AZ | 136,000 | - | - | 0.0% | 5 | n/a | ||||
| 7611 West Thomas Road | Phoenix | AZ | 144,500 | - | - | 0.0% | 5 | n/a | ||||
| 6950 West 130th Street | Middleburg Heights | OH | 369,500 | 35,800 | - | 9.7% | 19 | Carvana | ||||
| 7875 Johnnycake Ridge Road | Mentor | OH | 215,300 | - | - | 0.0% | 20 | n/a | ||||
| 1700 North Main Street | Salinas | CA | 138,400 | - | 3,300 | 2.4% | 10 | Raising Can'es | ||||
| 2800 North Germantown Parkway | Cordova | TN | 160,600 | - | - | 0.0% | 12 | n/a | ||||
| 3207 Solomons Island Road | Edgewater | MD | 122,000 | - | - | 0.0% | 14 | n/a | ||||
| Total | 7,899,200 | 716,400 | 98,200 | 10.3% | 631 |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
(2) Indicates assets that have been sold subsequent to September 30, 2022
(3) Indicates assets with a partial sale subsequent to September 30, 2022
Sold Properties through September 30, 2022
| Total | In-Place | SNO | 2022 Qtr | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Property Address | City | State | Full / Partial Sale | SF (1) | SF (1) | SF (1) | Leased (1) | Sold | |||
| 1420 Travis Boulevard | Fairfield | CA | Full Site | 150,013 | 28,469 | 3,500 | 21.3% | Q1 | |||
| 700 East Northern Lights Boulevard | Anchorage | AK | Full Site | 158,517 | 133,972 | - | 84.5% | Q2 | |||
| 3101 Northview Drive | Elkhart | IN | Full Site | 86,581 | 86,581 | - | 100.0% | Q2 | |||
| 3408 West Central Avenue | Toledo | OH | Full Site | 218,720 | - | - | 0.0% | Q2 | |||
| 4155 State Route 31 | Clay | NY | Full Site | 146,504 | - | - | 0.0% | Q2 | |||
| 5101 Hinkleville Road | Paducah | KY | Full Site | 97,261 | 64,403 | - | 66.2% | Q2 | |||
| 400 North Best Avenue | Walnutport | PA | Full Site | 121,159 | - | - | 0.0% | Q2 | |||
| 195 North Broadway | Hicksville | NY | Partial Site | 14,856 | 14,856 | - | 100.0% | Q2 | |||
| 2100 Southfield Road | Lincoln Park | MI | Full Site | 297,905 | - | - | 0.0% | Q2 | |||
| 3001 Iowa Avenue | Riverside (Iowa) | CA | Full Site | 132,632 | 38,132 | - | 28.8% | Q2 | |||
| 200 Town Center East | Santa Maria | CA | Full Site | 108,596 | - | - | 0.0% | Q2 | |||
| 4588 Virginia Beach Boulevard | Virginia Beach | VA | Partial Site | 7,800 | 7,800 | - | 100.0% | Q2 | |||
| 2801 West State Street | Olean | NY | Full Site | 120,685 | 55,360 | - | 45.9% | Q2 | |||
| 100 Westminster Mall | Westminster | CA | Full Site | 197,904 | - | - | 0.0% | Q2 | |||
| 3700 South Campbell Avenue | Springfield | MO | Full Site | 112,900 | 112,900 | - | 100.0% | Q3 | |||
| 5950 East Broadway Boulevard | Tucson | AZ | Full Site | 237,600 | 50,600 | - | 21.3% | Q3 | |||
| 1675 West 49th Street | Hialeah | FL | Full Site | 145,200 | - | 3,000 | 2.1% | Q3 | |||
| 2700 Miamisburg Centerville Road | Dayton | OH | Partial Asset | 167,582 | - | - | 0.0% | Q3 | |||
| 1405 South Grand Avenue | Charles City | IA | Full Site | 109,900 | - | - | 0.0% | Q3 | |||
| 2307 Superior Street | Webster City | IA | Full Site | 41,000 | - | - | 0.0% | Q3 | |||
| 3100 Southwest College Road | Ocala | FL | Full Site | 145,900 | - | - | 0.0% | Q3 | |||
| 650 Bald Hill Road | Warwick | RI | Full Site | 130,900 | 123,100 | - | 94.0% | Q3 | |||
| 2760 I-75 Business Spur | Sault Ste. Marie | MI | Full Site | 98,500 | - | - | 0.0% | Q3 | |||
| 1560 US 31 South | Manistee | MI | Full Site | 107,800 | - | - | 0.0% | Q3 | |||
| 1855 Main Street | Ramona | CA | Full Site | 122,000 | 14,700 | - | 12.0% | Q3 | |||
| 417 Main Street | Madawaska | ME | Full Site | 55,000 | - | - | 0.0% | Q3 | |||
| 171 Delaware Avenue | Sidney | NY | Full Site | 113,300 | - | - | 0.0% | Q3 | |||
| 32123 Gratiot Avenue | Roseville | MI | Full Site | 364,300 | 154,600 | - | 42.4% | Q3 | |||
| 2180 Tully Road | San Jose | CA | Full Site | 260,100 | - | - | 0.0% | Q3 | |||
| 1401 Greenbrier Parkway | Chesapeake | VA | Full Site | 179,300 | - | - | 0.0% | Q3 | |||
| 1325 Broadway | Saugus | MA | Full Site | 211,500 | - | - | 0.0% | Q3 | |||
| 50 Fox Run Road | Portsmouth | NH | Full Site | 129,700 | - | - | 0.0% | Q3 | |||
| 5901 Florin Road | Florin | CA | Full Site | 245,600 | - | - | 0.0% | Q3 | |||
| 3295 East Main Street | Ventura | CA | Full Site | 183,100 | - | 14,100 | 7.7% | Q3 | |||
| 2250 El Mercado Loop | Sierra Vista | AZ | Full Site | 95,500 | - | - | 0.0% | Q3 | |||
| 5715 Johnston Street | Lafayette | LA | Full Site | 196,000 | - | - | 0.0% | Q3 | |||
| 20700 South Avalon Boulevard | Carson | CA | Full Site | 36,400 | 21,900 | 5,000 | 73.9% | Q3 | |||
| Vintage Faire Mall | Modesto | CA | Full Site | 60,200 | 40,300 | - | 66.9% | Q3 | |||
| Chandler Fashion Center | Deptford | NJ | Full Site | 95,900 | 74,600 | - | 77.8% | Q3 | |||
| Briarwood | Ann Arbor | MI | Full Site | 85,300 | - | - | 0.0% | Q3 | |||
| Woodland Hills Mall | Tulsa | OK | Full Site | 75,100 | - | - | 0.0% | Q3 | |||
| 126 Shawan Road | Cockeysville | MD | Full Site | 80,100 | 65,600 | - | 81.9% | Q3 | |||
| 1445 New Britain Ave | West Hartford | CT | Full Site | 81,100 | 58,700 | 1,900 | 74.7% | Q3 | |||
| Natick Collection | Natick | MA | Full Site | 95,400 | 44,300 | - | 46.4% | Q3 | |||
| Total | 5,921,315 | 1,190,873 | 27,500 | 20.6% |
(1) Based on signed leases as of September 30, 2022; GLA presented at the Company’s proportional share
REA Status by Sites and Category
| No / Expired REA | Expires in <5 years | Expires in >5 years | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Joint Venture (Mall REIT) | 1 | - | 11 | 12 | ||||||||
| Joint Venture (Other) | - | - | 1 | 1 | ||||||||
| Joint Venture (Residential) | 4 | - | 2 | 6 | ||||||||
| Multi-Tenant Retail | 12 | 1 | 25 | 38 | ||||||||
| Premier Mixed-use | 5 | 1 | 1 | 7 | ||||||||
| ResiCo | 1 | 1 | 5 | 7 | ||||||||
| Sell | 15 | 3 | 32 | 50 | ||||||||
| Total | 38 | 6 | 77 | 121 | ||||||||
| % of Total | 31 | % | 5 | % | 64 | % | 100 | % |
Non-GAAP Financial Measures
The Company makes reference to NOI and Total NOI which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI 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 (“NOI”) and Total NOI
NOI is defined as income from property operations less property operating expenses. Other real estate companies may use different methodologies for calculating NOI, and accordingly the Company’s depiction of NOI may not be comparable to other real estate companies. The Company believes NOI 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 Total NOI, which includes its proportional share of unconsolidated properties. 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 Company also considers NOI and Total NOI 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.