Seritage Growth Properties
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
SRG$1.71+1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0000950170-25-047860
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001193125-26-134736
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 113 current paragraphs.
62 unchanged; 32 reworded; 16 added; 42 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
For the year ended December 31, 2025, we recognized a total of $18.8 million of impairment losses, mostly due to accepting an offer to sell below carrying value, which are included in impairment of real estate assets within the consolidated statements of operations. During the year ended December 31, 2025 we recognized $8.5 million in other-than-temporary impairment losses on our investments in unconsolidated entities, which is included in equity in loss of unconsolidated entities within the consolidated statements of operations. In addition, during the year ended December 31, 2025, we recognized an equity loss of $7.1 million representing our proportionate share of an impairment charge at one of our unconsolidated entities. The equity loss recognized was net of previous basis differences. We continue to evaluate our portfolio, including our development plans, hold periods and, if applicable, offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities.
Current report
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.
Current report
Rental income increased by $0.5 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is primarily due to lease up at the Aventura, FL property. The increase was partially offset by a decrease of rental income due to property sales.
Current report
The decrease of $2.4 million in property operating expense for the year ended December 31, 2025 was primarily due to a decrease in $1.5 million of common area maintenance costs and $0.8 million of insurance expense related to sold properties, as well as savings in utilities expenses.
Current report
The increase of $1.9 million for the year ended December 31, 2025 was primarily driven by an increase in severance expense of $6.7 million, partially offset by decreases in personnel costs of $4.8 million.
Current report
During the year ended December 31, 2025, the Company recognized $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value. In addition, the Company also recognized a $0.8 million impairment of real estate assets as a result of the Company transferring the Aventura, FL property to held for sale which requires the asset to be carried at the lower of book value or fair value less estimated costs to sell.
Current report
The increase in loss for the year ended December 31, 2025 was driven by the recognition of $8.5 million of other-than-temporary impairment losses and the Company’s share of impairment losses of $7.1 million from one of its investments in unconsolidated entities.
Current report
The increase in loss was partially offset by an increase in income of $0.5 million from the Company’s investment in UTC and a decrease in losses on sale of unconsolidated entities of $5.1 million.
Current report
For the year ended December 31, 2025, interest income decreased by $1.5 million due to a decrease in cash balances and a decrease of interest rates. The decrease was partially offset by a decrease in other expenses of $0.5 million, primarily driven by a decrease in settlement expenses related to litigation.
Current report
Term Loan Facility / Incremental Funding Facility
Current report
On July 28, 2025, the Company exercised its extension option and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid the incremental facility fee of $4.0 million. All other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.
Current report
During the year ended December 31, 2025, we repaid $190.0 million against the principal of the Term Loan Facility. Our outstanding balance as of December 31, 2025 is $50.0 million.
Current report
See Note 1 – Organization of the Notes to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for a discussion of liquidity and going concern.
Current report
Includes expected interest payments.
Current report
Off-Balance Sheet Arrangements
Current report
The Company accounts for its investments in entities that it does not have a controlling interest in but exercises significant influence under the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated entities. As of December 31, 2025 and December 31, 2024, we did not have any off balance sheet financing arrangements.
Removed paragraphs (42)
Previous report
Due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipmentwas triggered. We also agreed to sell certain assets below carrying value. As such, we recorded impairment losses of $87.5 million for the year ended December 31, 2024, primarily due to changes in discount rates and residual capitalization rates between June 2023 and June 2024. We did not recognize any other-than-temporary impairment losses on our investments in unconsolidated entities during the year ended December 31, 2024. Due to increasing development and construction costs, deteriorating market conditions and, in certain instances excluding Aventura, FL, agreeing to sell below carrying value, we recognized $107.0 million of impairment losses during the year ended December 31, 2023. We recognized $11.7 million of other-than-temporary impairment losses on our investments in unconsolidated entities during the year ended December 31, 2023. We continue to evaluate our portfolio, including our development plans, hold periods and, if applicable, offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities.
Previous report
Appointment of New Chief Executive Officer and President
Previous report
On March 28, 2025, we announced that our Board of Trustees and Andrea L. Olshan have agreed that Ms. Olshan will step down as the Company’s Chief Executive Officer and President (“CEO”) and as a member of the Board effective as of April 11, 2025 (the “Separation Date”). Also on March 28, 2025, we announced that our Board of Trustees appointed Board Chairman Adam Metz as Interim CEO as of the Separation Date. In his role as Interim CEO, Mr. Metz will serve as the principal executive officer of the Company until his successor is duly appointed and qualified, or until his earlier termination or removal, and will receive a monthly salary of $80,000. Mr. Metz will also continue to serve as Board Chairman, and the Board has appointed Mitchell Sabshon to serve as Lead Independent Director as of the Separation Date.
Previous report
The following table presents the results for rental income for the year ended December 31, 2024, as compared to the corresponding year ended December 31, 2023 (in thousands):
Previous report
In-place retail tenants rental income decreased $13.9 million during 2024 primarily due to property sales. The decrease was partially offset by an increase of $2.3 million in rental income from the Aventura, FL property.
Previous report
The decrease of $16.0 million in straight-line rental expense during 2024 was due primarily to the decrease in property sales of tenanted properties in 2024, decreasing the amount of straight-line rental income reversals.
Previous report
The decrease of $4.9 million in property operating expense for the year ended December 31, 2024 was due primarily to decreases of $7.5 million of operating expenses related to asset sales which was partially offset by increases of demolition costs of $0.6 million and $1.5 million in insurance expense.
Previous report
The decrease of $16.0 million for the year ended December 31, 2024 was primarily driven by a decrease of $14.2 million related to third-party consulting fees utilized to execute the Plan of Sale as well as a decrease of $2.8 million in personnel costs.
Previous report
During the year ended December 31, 2024, the Company recorded $3.2 million of loss from investments in unconsolidated entities primarily due to $2.6 million of loss on the sale of one of the underlying properties. During the year ended December 31, 2023, the Company recorded $55.9 million of loss from investments in unconsolidated entities primarily due to impairment charges of $70.8 million and $41.9 million recorded on two underlying investments resulting in the Company picking up its share of these impairments of $35.4 million and $5.5 million, respectively, and an $11.7 million other-than-temporary impairment charge recorded against three other investments.
Previous report
Interest and Other Income
Previous report
The decrease of $14.5 million in interest and other income is primarily due to the receipt of $11.6 million in settlement proceeds during the year ended December 31, 2023.
Previous report
Term Loan Facility
Previous report
On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (as amended, the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent. The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. On February 2, 2023, the Company made a $230 million voluntary prepayment, reducing the unpaid principal balance to $800 million, and the debt maturity was extended for two years to July 31, 2025. The Company made additional voluntary prepayments aggregating $440 million during the remainder of 2023 and additional voluntary prepayments aggregating $120.0 million during 2024, reducing the unpaid principal balance to $240.0 million at December 31, 2024.
Previous report
Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the consolidated statements of operations.
Previous report
The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Operating Partnership. The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Operating Partnership and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities.
Previous report
The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.20 to 1.00 for each fiscal quarter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.30 to 1.00 for each fiscal quarter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion. Any failure to satisfy any of these financial metrics limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default. The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.
Previous report
The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, and bankruptcy or insolvency proceedings. If there is an event of default, the lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.
Previous report
As of December 31, 2024, the Company was not in compliance with certain of the financial metrics described above. The Company was previously required to receive the consent of Berkshire Hathaway to dispose of assets via sale or contribution to another entity and, as of June 16, 2022, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. The Third Term Loan Amendment (defined below) executed on June 16, 2022 eliminates this requirement. The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.
Previous report
The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement. As of December 31, 2023 the Company's debt issuance costs were fully amortized.
Previous report
On November 24, 2021, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Second Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that (i) the “make whole” provision in the Senior Secured Term Loan Agreement shall not be applicable to prepayments of principal ; and (ii) the Senior Secured Term Loan Agreement, as amended for (i) above, may at the Operating Partnership's election be extended for two years from July 31, 2023 to July 31, 2025 (the “Maturity Date”) if its principal has been reduced to $800 million by July 31, 2023. The outstanding principal balance was reduced to $800 million on February 2, 2023, and the Maturity Date has been extended to July 31, 2025. In all other respects, the Senior Secured Term Loan Agreement remains unchanged.
Previous report
On June 16, 2022, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Third Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that notwithstanding anything to the contrary in the asset sale covenant, the parent, borrower, and their respective subsidiaries will be permitted without the consent of the administrative agent to sell, transfer, or otherwise dispose of properties (including but not limited to properties or equity interests of any subsidiary) to unaffiliated third parties for no less than fair market value, provided that the borrower deposits all net proceeds received into a controlled account and the use of such net proceeds will be subject to the terms and conditions of the Term Loan Agreement, including but not limited to the restricted payments and investments/loans covenants.
Previous report
On November 20, 2024, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Fourth Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway pursuant to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that the Term Loan Agreement may, at the Operating Partnership’s election, be extended for one year from the Maturity Date to July 31, 2026 if the Operating Partnership pays a 2% extension fee on the then outstanding principal balance as of the Maturity Date.
Previous report
As of December 31, 2024, the Company has paid down $1.36 billion towards the Term Loan’s unpaid principal balance. The aggregate principal amount outstanding under the Term Loan Facility as of December 31, 2024 was $240.0 million.
Previous report
The Company currently anticipates it will continue to use cash on hand together with sales of Consolidated Properties, sales of interests in Unconsolidated Properties and potential financing transactions as the primary source of capital to repay principal on the Term Loan and its obligations.
Previous report
Preferred Shares
Previous report
As of December 31, 2024, we had 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) outstanding. As of December 14, 2022, we may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends.
Previous report
Our Board of Trustees will continue to assess the Company’s investment opportunities and its expectations of taxable income in its determination of future distributions, if any.
Previous report
In 2024, a decrease in rental income and gain on sale of real estate assets and a decrease in accounts payable, accrued expenses and other liabilities; and
Previous report
In 2023, a decrease in rental income and gain on sale of real estate assets and a decrease in accounts payable, accrued expenses and other liabilities.
Previous report
Non-GAAP Supplemental Financial Measures and Definitions
Previous report
The Company makes reference to NOI-cash basis and NOI-cash basis at share which are financial measures that include adjustments to GAAP.
Previous report
Net Operating Income (Loss)-cash basis (“NOI”-cash basis) and Net Operating Income (Loss)-cash basis at share (“NOI-cash basis at share”)
Previous report
NOI - cash basis is defined as income from property operations less property operating expenses, adjusted for variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles. Other real estate companies may use different methodologies for calculating NOI-cash basis, and accordingly the Company’s depiction of NOI-cash basis may not be comparable to other real estate companies. The Company believes NOI-cash basis provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.
Previous report
The Company also uses NOI-cash basis at share, which includes its proportional share of Unconsolidated Properties. The Company does not control any of the joint ventures constituting such properties and NOI-cash basis at share does not reflect our legal claim with respect to the economic activity of such joint ventures. We have included this adjustment because the Company believes this form of presentation offers insights into the financial performance and condition of the Company as a whole given our ownership of
Previous report
Unconsolidated Properties that are accounted for under GAAP using the equity method. The operating agreements of the Unconsolidated Properties generally allow each investor to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.
Previous report
The Company also considers NOI-cash basis and NOI-cash basis at share to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.
Previous report
Due to the adjustments noted, NOI-cash basis and NOI-cash basis at share should only be used as an alternative measure of the Company’s financial performance.
Previous report
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
Previous report
Neither NOI-cash basis nor NOI-cash basis at share are measures that (i) represent cash flow from operations as defined by GAAP; (ii) are indicative of cash available to fund all cash flow needs, including the ability to make distributions; (iii) are alternatives to cash flow as a measure of liquidity; or (iv) should be considered alternatives to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. Reconciliations of these measures to the respective GAAP measures we deem most comparable are presented below on a comparative basis for all periods.
Previous report
The following table reconciles NOI-cash basis and NOI-cash basis at share to GAAP net loss for the years ended December 31, 2024 and 2023 (in thousands):
Showing the first 40 of 42 passages. Open the source sections for the rest.
Reworded paragraphs (32)
Previous wording
Prior to our adoption of the Plan of Sale, we were 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, 2024, our portfolio consisted of interests in 17 properties comprised of approximately 1.7 million square feet of GLA or build-to-suit leased area and 274 acres of land. The portfolio encompasses 10 wholly owned properties consisting of approximately 0.9 million square feet of GLA and 166 acres and seven unconsolidated entities consisting of approximately 0.8 million square feet of GLA and 108 acres.
Current wording
Prior to our adoption of the Plan of Sale, we were 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, our portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of 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 and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres.
Previous wording
On March 1, 2022, the Company announced that its Board of Trustees has commenced a process to review a broad range of strategic alternatives to enhance shareholder value. The Board of Trustees created a special committee of the Board of Trustees (the “Special Committee”) to oversee the process. The Special Committee retained Barclays as its financial advisor from March 2022 to August 2023 to assist with the strategic review. The Company sought a shareholder vote to approve a proposed plan of sale of our assets and dissolution (the “Plan of Sale”) that would allow our board to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company.
Current wording
On March 1, 2022, the Company announced that its Board of Trustees has commenced a process to review a broad range of strategic alternatives to enhance shareholder value. The Board of Trustees created a special committee of the Board of Trustees (the “Special Committee”) to oversee the process. The Special Committee retained Barclays as its financial advisor from March 2022 to August 2023 to assist with the strategic review. The Company sought a shareholder vote to approve a proposed plan of sale of our assets and dissolution (the “Plan of Sale”) that would allow our Board of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company.
Previous wording
During the year ended December 31, 2024, the Company sold 13 wholly owned assets, generating gross proceeds of $163.5 million and monetized two unconsolidated properties for an additional $14.9 million, or $10.8 million at share, of gross proceeds.
Current wording
During the year ended December 31, 2025, the Company sold five wholly owned assets, generating gross proceeds of $222.6 million and monetized two unconsolidated properties for an additional $8.1 million of gross proceeds.
Previous wording
As of March 31, 2025, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $14.0 million, subject to buyer diligence and closing conditions.
Current wording
As of March 31, 2026, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $11.0 million, subject to buyer diligence and closing conditions.
Previous wording
The Company assessed the impact of the natural disasters that occurred during the year ended December 31, 2024 and determined that natural disasters did not have a material impact on our operating results or financial position. The wildfires in Los Angeles, CA that occurred in January 2025 did not have a material impact on our operating results or financial condition but could create a delay in our ability to sell the Santa Monica asset. The Company did not experience interruptions in rental payments related to natural disasters nor has it incurred material capital expenditures to repair any property damage. As a result of changes to weather patterns caused by climate change, our properties could experience increased storm intensity and other natural disasters in future periods and, as such, we cannot provide assurance that natural disasters will not have a material impact on our financial condition, results of operations or cash flows over the foreseeable future.
Current wording
The Company assessed the impact of the natural disasters that occurred during the year ended December 31, 2025 and determined that natural disasters did not have a material impact on our operating results or financial position. The Company did not experience interruptions in rental payments related to natural disasters nor has it incurred material capital expenditures to repair any property damage. As a result of changes to weather patterns caused by climate change, our properties could experience increased storm intensity and other natural disasters in future periods and, as such, we cannot provide assurance that natural disasters will not have a material impact on our financial condition, results of operations or cash flows over the foreseeable future.
Previous wording
During the year ended December 31, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property which the Company is not currently pursuing entitlements.
Current wording
During the year ended December 31, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property which the Company is not currently pursuing entitlements. There were no abandoned project costs in 2025.
Previous wording
Real estate taxes decreased by approximately $5.0 million due to property sales. The decrease was partially offset by an increase of $1.0 million in Aventura, FL real estate taxes and a reduction of capitalized real estate taxes of approximately $1.3 million.
Current wording
Real estate taxes decreased by approximately $1.5 million due to property sales.
Previous wording
The decrease of $1.4 million in depreciation and amortization expenses for the year ended December 31, 2024 was due primarily to a $3.9 million decrease due to property sales which was partially offset by $1.5 million in depreciation related to moving a property out of held for sale.
Current wording
The decrease of $6.8 million in depreciation and amortization expenses for the year ended December 31, 2025 was primarily due to property sales which was partially offset by $1.5 million in depreciation related to moving a property out of held for sale in 2024.
Previous wording
General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.
Current wording
General and administrative expenses consist of personnel costs, including share-based compensation and third party consulting fees, professional fees, office expenses and overhead expenses.
Previous wording
During the year ended December 31, 2023, the Company sold 60 properties, for aggregate consideration of $702.0 million and recorded a gain totaling $96.2 million.
Current wording
During the year ended December 31, 2025, the Company sold five properties for aggregate consideration of $222.6 million and recorded a gain totaling $20.3 million.
Previous wording
During the year ended December 31, 2023, the Company sold its interest in eight unconsolidated properties, and recorded a gain totaling $6.4 million.
Current wording
During the year ended December 31, 2025, the Company sold its interest in one unconsolidated property and recorded a loss of $1.4 million.
Previous wording
During the year ended December 31, 2024, the Company recognized $1.7 million impairment of real estate assets as a result of the Company accepting offers below book value on three properties and an $85.8 million impairment of real estate assets on the Company's development property in Aventura, FL due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 which triggered the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipment. The Company determined the fair value of this property by applying a discount to projected cash flows over the estimated hold period. During the year ended December 31, 2023, the Company recognized $107.0 million of impairment losses as a result of recognizing an impairment on the Company's development property in Aventura, FL, which is included within the condensed consolidated statements of operations
Current wording
During the year ended December 31, 2024, the Company recognized $1.7 million impairment of real estate assets as a result of the Company accepting offers below book value on three properties and an $85.8 million impairment of real estate assets on the Company's development property in Aventura, FL due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 which triggered the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipment. The Company determined the fair value of this property by applying a discount to projected cash flows over the estimated hold period.
Previous wording
On March 2, 2021, we 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”). Our lawsuit sought, 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 related to the bankruptcy of Sears Holdings (the “Litigation”). The Litigation was settled in 2022 and the Litigation was dismissed. Any amounts received from the insurers will offset the Seritage Defendants’ contribution. We reached settlement agreements with two of the D&O Insurers for gross proceeds of $12.7 million which is recorded in interest and other income (expense), net in the consolidated statements of operations during the year ended December 31, 2022. In 2023, we reached settlement agreements with the other two D&O Insurers for gross proceeds of $11.6 million. We received $11.6 million during the year ended December 31, 2023, which is recorded in interest and other income (expense), net in the consolidated statements of operations.
Current wording
Interest and Other Income (Expense), Net
Previous wording
The decrease of $19.6 million in interest expense for the year ended December 31, 2024 was driven by partial Term Loan Facility pay downs.
Current wording
The decrease of $4.7 million in interest expense for the year ended December 31, 2025 was driven by partial Term Loan Facility pay downs, partially offset by an increase in amortization expense of deferred financing costs.
Previous wording
Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures. Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the year ended December 31, 2024 and the Company recorded net operating cash outflows of $53.5 million. Additionally, the Company generated net investing cash inflows of $126.9 million during the year ended December 31, 2024, which were driven by asset sales and partially offset by development expenditures and recorded financing cash outflows of $125.3 million, primarily due to partial repayments of the Term Loan Facility.
Current wording
Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures. Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the year ended December 31, 2025 and the Company recorded net operating cash outflows of $34.9 million. Additionally, the Company generated net investing cash inflows of $198.5 million during the year ended December 31, 2025, which were driven by asset sales and partially offset by development expenditures.
Previous wording
From the approval of the Plan of Sale on October 24, 2022 through December 31, 2024, we sold 89 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.0 billion of gross proceeds.
Current wording
From the approval of the Plan of Sale on October 24, 2022 through December 31, 2025, we sold 94 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.2 billion of gross proceeds.
Previous wording
From the approval of the Plan of Sale on October 24, 2022 through December 31, 2024, we sold our interests in 10 Unconsolidated Properties and generated approximately $151.5 million of gross proceeds.
Current wording
From the approval of the Plan of Sale on October 24, 2022 through December 31, 2025, we sold our interests in 12 Unconsolidated Properties and generated approximately $159.6 million of gross proceeds.
Previous wording
Unconsolidated Properties. As of December 31, 2024, we had contributed interests in 12 properties to unconsolidated entities, which generated approximately $242.4 million of gross proceeds since July 2017. In addition to generating liquidity upon closing, these entities also reduce our development expenditures by the amount of our partners’ interests in the unconsolidated entities.
Current wording
Unconsolidated Properties. We had contributed interests in 12 properties to unconsolidated entities, which generated approximately $242.4 million of gross proceeds from July 2017 through December 31, 2025. In addition to generating liquidity upon closing, these entities also reduce our development expenditures by the amount of our partners’ interests in the unconsolidated entities.
Previous wording
Subsequent to December 31, 2024, we sold one asset for gross proceeds of $29.9 million. As of March 31, 2025, we had one asset owned by our consolidated joint venture under contract for sale subject to customary due diligence for total anticipated proceeds of $14.0 million and is subject to closing conditions.
Current wording
Subsequent to year end we sold an interest in an unconsolidated property and received a distribution of $5.7 million. As of March 31, 2026, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $11.0 million, subject to buyer diligence and closing conditions.
Previous wording
On May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on the maturity date of the Term Loan; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest is a condition to any borrowings under the $400 million incremental funding facility under the Term Loan Agreement. The Company has paid all interest due under the Term Loan Agreement and has not deferred any interest as permitted under the Term Loan Amendment.
Current wording
As previously disclosed, on May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on July 31, 2023; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion).
Previous wording
Additionally, the Term Loan Amendment provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement.
Current wording
Additionally, the Term Loan Amendment provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement. The Third Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K) executed on June 16, 2022 provided exceptions to this right.
Previous wording
The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million, (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million, and (iii) the repayment by the Operating Partnership of any deferred interest permitted under the Term Loan Amendment as further described below. As of December 31, 2024, the Company has not yet achieved the requirements to access the Incremental Funding Facility.
Current wording
Our Term Loan Facility includes a $400.0 million Incremental Funding Facility, access to which is subject to rental income from non-Sears Holdings tenants of at least $200.0 million, on an annualized basis and after giving effect to SNO leases expected to commence rent payment within 12 months, which we have not yet achieved, as disclosed in Note 6. There is no assurance of the Company’s ability to access the Incremental Funding Facility.
Previous wording
The Company’s Board of Trustees also declared the following dividends on Company’s Series A Preferred Shares during 2025, 2024 and 2023:
Current wording
The Company’s Board of Trustees also declared the following dividends on the Company’s Series A Preferred Shares during 2026, 2025 and 2024:
Previous wording
During the year ended December 31, 2023 the Company invested $79.7 million in our consolidated development and operating properties and an additional $13.4 million into our unconsolidated joint ventures.
Current wording
During the year ended December 31, 2025 the Company invested $26.3 million in our consolidated properties and $0.5 million in its unconsolidated entities.
Previous wording
During the year ended December 31, 2024 the Company invested $27.5 million in our consolidated development and operating properties and an additional $9.3 million into our unconsolidated joint ventures.
Current wording
During the year ended December 31, 2024 the Company invested $27.5 million in its consolidated properties and $9.3 million in its unconsolidated entities.
Previous wording
In 2023, $673.5 million of net proceeds from the sale of real estate and $152.6 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($79.7) million and investments in unconsolidated entities of ($13.4) million.
Current wording
In 2025, $210.0 million of net proceeds from the sale of real estate, $8.1 million of net proceeds from the sale of interests in unconsolidated entities and $7.1 million of distributions from the unconsolidated entities offset by development of real estate of ($26.3) million and investments in unconsolidated entities of ($0.5) million; and
Previous wording
In 2024, $155.7 million of net proceeds from the sale of real estate and $8.0 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($27.5) million and investments in unconsolidated entities of ($9.3) million; and
Current wording
In 2024, $155.7 million of net proceeds from the sale of real estate and $8.0 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($27.5) million and investments in unconsolidated entities of ($9.3) million.
Previous wording
In 2023, ($670.0) million cash repayment of Term Loan Facility principal and ($4.9) million cash payment of preferred dividends.
Current wording
In 2025, ($190.0) million cash repayment of Term Loan Facility principal, payment of deferred financing costs of ($4.0) million and ($4.9) million cash payments of preferred dividends; and
Previous wording
In 2024, ($120.0) million cash repayment of Term Loan Facility principal and ($4.9) million cash payment of preferred dividends; and
Current wording
In 2024, ($120.0) million cash repayment of Term Loan Facility principal and ($4.9) million cash payment of preferred dividends.
Previous wording
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 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. 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 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
Current wording
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 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. 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. 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 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 speci…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The Company on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired. If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects including the effects of demand, competition, and other economic factors such as discount rates and market comparables. Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. The Company recognized $87.5 million and $107.0 million in impairment losses for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company, on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired. If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects
Previous wording
On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions which include macroeconomic conditions that the value of the Company’s investments in unconsolidated entities may be impaired. An investment’s value is impaired if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value. The Company did not record any other-than-temporary impairment losses for the year December 31, 2024. The Company recorded $11.7 million in other-than-temporary impairment losses in investments in unconsolidated entities for the year ended December 31, 2023.
Current wording
On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions which include macroeconomic conditions that the value of the Company’s investments in unconsolidated entities may be impaired. An investment’s value is impaired if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value. The Company recorded $8.5 million in other-than-temporary impairment losses in investments in in unconsolidated entities for the year ended December 31, 2025. The Company did not record any other-than-temporary impairment losses for the years ending December 31, 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In addition, repayment of any outstanding deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement (the “Incremental Funding Facility”).
Current report — wording carried from elsewhere
Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses. Rental revenues are not sufficient to cover these expenses.
Current report — wording carried from elsewhere
-36 - including the effects of demand, competition, and other economic factors such as discount rates and market comparables. Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. The Company recognized $18.8 million and $87.5 million in impairment losses for the years ended December 31, 2025 and 2024, respectively.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Significant components of net cash used in operating activities include:
Previous report — wording carried elsewhere
-41 - 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. On February 13, 2025, the parties to the Derivative Actions filed a stipulation and proposed order seeking to consolidate the Derivative Actions and appoint lead counsel. The Company intends to vigorously defend itself against the allegations in these lawsuits.