Seritage Growth Properties

What they do

Seritage owns and manages a portfolio of 10 properties (0.8 million sq ft and 154 acres of land as of March 31, 2026), consisting of five consolidated and five unconsolidated interests. The company is executing a Plan of Sale approved by shareholders in October 2022, which involves selling all assets, distributing net proceeds, and dissolving the company. It is also exploring a potential sale of the company as an alternative.

Revenue drivers

• Multi-Tenant Retail (Consolidated) — One property, 209 sq ft of built space and 14 acres, 83.6% leased; contributes rental revenue.
• Residential (Consolidated) — Two properties, 33 sq ft of built ancillary retail space and 19 acres, 36.7% leased; minimal near-term income.
• Premier (Consolidated and Unconsolidated) — Five properties combined (2 consolidated, 3 unconsolidated) with 166 sq ft of space and 93 acres; 100% leased on consolidated, 67.4% on unconsolidated; key source of rental and distribution income.
• Other Joint Ventures (Unconsolidated) — Two properties, 93 sq ft and 28 acres, 5.1% leased; contributes equity income/loss and distributions from property sales.

Recent performance

For Q1 2026, Seritage reported a net loss attributable to common shareholders of $31.5 million ($0.56 per share), compared to a $23.4 million loss ($0.42 per share) in Q1 2025. The quarter included $15.2 million of impairment charges on a consolidated property and $5.2 million of other-than-temporary impairment on an unconsolidated entity. Cash on hand was $58.8 million (including $14.3 million restricted) as of March 31, 2026, and $63.2 million as of May 14, 2026. The company received $7.4 million in distributions from unconsolidated properties and generated $11.0 million in gross proceeds from a post-quarter asset sale.

Strategy

Management is executing the Plan of Sale, monetizing remaining assets through sales and distributions, with a focus on maximizing shareholder value. The company is also advancing discussions to refinance $50 million of corporate debt maturing July 31, 2026, and exploring a potential strategic transaction. In 2025, Seritage sold five wholly owned assets for gross proceeds of $222.6 million and monetized two unconsolidated properties for $8.1 million. As of March 31, 2026, one consolidated property was under contract to sell for anticipated proceeds of $11.0 million.

Risks

• Going concern — Cash on hand is insufficient to fund obligations because the term loan facility matures July 31, 2026, raising substantial doubt about the ability to continue as a going concern.
• Liquidity and refinancing — The company must refinance $50 million of debt maturing at the end of July 2026; failure to do so could accelerate asset sales at unfavorable terms.
• Impairment risk — Continued asset sales below carrying value and other-than-temporary impairments on unconsolidated entities have driven losses; further impairments may occur as the portfolio is marketed.
• Limited portfolio income — With only 10 properties and low leasing levels (e.g., 5.1% leased in Other JVs), ongoing rental revenue is minimal, making the company highly dependent on asset sales and distributions.

Outlook

Management continues to execute the Plan of Sale, with no assets currently under contract with closings deemed probable. The near-term focus is on refinancing the July 31, 2026 debt maturity and exploring a potential strategic transaction. The company expects additional impairments as it markets remaining assets and works to maximize value for shareholders.