Seritage Growth Properties Reports Fourth Quarter and Full Year 2025 Operating Results

Company Release - 3/31/2026 04:43 PM ET 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 year ended December 31, 2025. "In 2025, we continued to execute our plan of sale. We generated total gross proceeds of $230.7 million and repaid $190.0 million of debt, leaving a balance of $50.0 million on our term loan facility. As we look ahead in 2026, the team is focused on continuing to execute on the monetization of our remaining assets, many of which are currently in the market. In addition, we are pursuing several different financing alternatives to address our upcoming term loan facility maturity and we are also continuing to explore the possibility of a strategic transaction now that we have a simplified portfolio,” said Adam Metz, CEO & President. Q4 Sale Highlights: Generated $10.5 million of gross proceeds from the sale of one vacant/non-income producing asset eliminating $0.1 million of carrying costs.Generated $28.5 million of gross proceeds from the sale of one income producing asset reflecting a 7.4% capitalization rate.Generated $131.0 million of gross proceeds from the sale of one non-stabilized premier income producing property.Subsequent to December 31, 2025, the Company received a distribution of $5.7 million from an unconsolidated entity as a result of the sale of a portion of the underlying property.As of March 31, 2026, the Company has one asset under contract to sell for anticipated gross proceeds of $11.0 million before applicable credits and costs, subject to customary due diligence and customary closing conditions. Financial Highlights: For the three and twelve months ended December 31, 2025: As of December 31, 2025, the Company had cash on hand of $62.3 million, including $14.2 million of restricted cash. As of March 31, 2026, the Company has cash on hand of $59.1 million, including $14.3 million of restricted cash.During the three and twelve months ended December 31, 2025, the Company invested $4.5 million and $26.3 million, respectively, in its consolidated properties primarily related to tenant leasing costs and invested $0.1 million and $0.5 million, respectively, in its unconsolidated properties.During the three and twelve months ended December 31, 2025, the Company received distributions of $1.7 million and $11.3 million, respectively, from its unconsolidated properties.During the three months ended December 31, 2025, the Company made $150.0 million in principal repayments on the Company's term loan facility. For the year, the Company made $190.0 million in principal repayments on its term loan facility, reducing the outstanding principal balance to $50.0 million at December 31, 2025.The Company recognized impairment charges of $18.8 million on its consolidated properties for the twelve months ended December 31, 2025.During the three months ended December 31, 2025, the Company recorded its proportional share of an impairment charge, adjusted to reflect the impact of basis differences, of $7.1 million from one of its unconsolidated entities. During the twelve months ended December 31, 2025, the Company recorded an other-than-temporary impairment of $8.5 million on one of its unconsolidated entities.Net loss attributable to common shareholders of ($6.3) million, or ($0.11) per share and ($73.1) million, or ($1.30) per share for the three and twelve months ended December 31, 2025, respectively. Portfolio The table below represents a summary of the Company’s properties as of December 31, 2025 (in thousands except number of leases and acreage data): Total Built SF / Acreage(1) Leased SF(2) (3) % Leased Avg. Acreage / Site Consolidated Multi-Tenant Retail 1 209 sf / 14 acres 175 83.6 % 14.1 Residential(3) 2 33 sf / 19 acres 12 36.7 % 9.5 Premier 2 8 sf / 38 acres 8 100.0 % 18.6 Unconsolidated Other Entities 2 93 sf / 28 acres 5 5.1 % 14.2 Premier 3 158 sf / 57 acres 105 98.9 % 19.0 (1) Square footage and acreage are presented at the Company’s proportional share. (2) Based on signed leases at December 31, 2025. (3) Square footage represents built ancillary retail space whereas acreage represents both retail and residential acreage. Retail and residential are counted separately. Financial Summary The table below provides a summary of the Company’s financial results for the three months and year ended December 31, 2025: (in thousands except per share amounts) Three Months Ended Year Ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Net loss attributable to Seritage common shareholders $ (6,310 ) $ (12,576 ) $ (73,115 ) $ (158,436 ) Net loss per share attributable to Seritage common shareholders (0.11 ) (0.22 ) (1.30 ) (2.82 ) As of December 31, 2025, the Company had cash on hand of $62.3 million, including $14.2 million of restricted cash. Subsequent to the year ended December 31, 2025, the Company sold an interest in an unconsolidated property and received a distribution of $5.7 million. As of March 30, 2026 there is one consolidated property under contract to sell for aggregate gross proceeds of $11.0 million. The anticipated proceeds from the sales of assets under contract with closings that are deemed probable and existing cash on hand will not allow the Company to fund its operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”) because the term loan facility, which matures on July 31, 2026, is presently a current Obligation. This uncertainty raises substantial doubt about the Company’s ability to continue as a going concern. For more information on our liquidity position, including our going concern analysis, please see the notes to the consolidated financial statements included in Part II, Item 7 and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each in our Annual Report on Form 10-K. 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”). 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 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 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 The Company's Board of Trustees has declared the following dividends on the preferred shares during 2026 and 2025: Series A Declaration Date Record Date Payment Date Preferred Share 2026 February 25 March 31 April 15 $ 0.43750 2025 October 29 December 31 January 15, 2026 $ 0.43750 July 23 September 30 October 15 0.43750 May 8 June 30 July 15 0.43750 February 26 March 31 April 15 0.43750 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 it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues, and uncertainty caused by wars. While interest rates have started to decline, they remain high relative to interest rates in 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 including 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. 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,” “pro forma,” “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 and disposition of properties; the process and results of the Company’s review of strategic alternatives and our Plan of Sale; to 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; competition and related challenges in the real estate and retail industries and the ability of the Company’s top tenants to successfully operate their businesses; 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, 2025 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 December 31, 2025, the Company’s portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 156 acres of land. The portfolio encompasses five consolidated properties consisting of approximately 0.3 million square feet of GLA and 71 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) December 31, 2025 December 31, 2024 ASSETS Investment in real estate Land $ 25,406 $ 65,009 Buildings and improvements 134,946 239,978 Accumulated depreciation (14,908 ) (39,940 ) 145,444 265,047 Construction in progress 629 93,587 Net investment in real estate 146,073 358,634 Real estate held for sale 8,692 — Investment in unconsolidated entities 156,242 189,699 Cash and cash equivalents 48,088 85,206 Restricted cash 14,197 12,503 Tenant and other receivables, net 3,665 7,894 Lease intangible assets, net 171 1,047 Prepaid expenses, deferred expenses and other assets, net 16,651 22,791 Total assets(1) $ 393,779 $ 677,774 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Term loan facility, net $ 47,677 $ 240,000 Accounts payable, accrued expenses and other liabilities 13,302 31,971 Total liabilities(1) 60,979 271,971 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 December 31, 2025 and 2024, respectively 562 562 Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of December 31, 2025 and 2024; liquidation preference of $70,000 28 28 Additional paid-in capital 1,362,719 1,362,644 Accumulated deficit (1,031,893 ) (958,778 ) Total shareholders' equity 331,416 404,456 Non-controlling interests 1,384 1,347 Total equity 332,800 405,803 Total liabilities and equity $ 393,779 $ 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 December 31, 2025, include the following amounts related to our consolidated VIEs: $8.7 million included in real estate held for sale, $9.9 thousand of cash, $9.5 thousand of tenant and other receivables and $74.5 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) Year Ended December 31, 2025 2024 REVENUE Rental income $ 17,597 $ 17,055 Management and other fee income 607 567 Total revenue 18,204 17,622 EXPENSES Property operating 13,984 16,339 Abandoned project costs - 5,732 Real estate taxes 2,455 3,935 Depreciation and amortization 6,282 13,118 General and administrative 31,949 30,021 Total expenses 54,670 69,145 Gain on sale of real estate, net 20,342 10,678 (Loss) gain on sale of interests in unconsolidated entities (1,417 ) 2,042 Impairment of real estate assets (18,800 ) (87,536 ) Equity in loss of unconsolidated entities (13,169 ) (3,154 ) Interest and other income (expense), net 1,568 2,513 Interest expense (20,273 ) (24,972 ) Loss before income taxes (68,215 ) (151,952 ) Provision for income taxes - (1,584 ) Net loss (68,215 ) (153,536 ) Preferred dividends (4,900 ) (4,900 ) Net loss attributable to Seritage common shareholders $ (73,115 ) $ (158,436 ) Net loss per share attributable to Seritage Class A common shareholders - Basic $ (1.30 ) $ (2.82 ) Net loss per share attributable to Seritage Class A common shareholders - Diluted $ (1.30 ) $ (2.82 ) Weighted average Class A common shares outstanding - Basic 56,314 56,255 Weighted average Class A common shares outstanding - Diluted 56,314 56,255 Properties sold during the year ended December 31, 2025: Total 2025 Qtr City State Full / Partial Sale SF(1) Sold Clearwater FL Full Site 212,900 Q4 Aventura FL Full Site 216,100 Q4 Panama City FL Full Site 134,300 Q4 Boca Raton FL Full Site 4,200 Q2 Barton Creek TX Full Site 82,300 Q2 Santa Rosa CA Full Site 82,700 Q2 Braintree MA Full Site 85,100 Q1 (1) Square footage at share Source: Seritage Growth Properties