Seritage Growth Properties

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 March 31, 2026, our 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 154 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 83 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 June 30, 2026, our portfolio consisted of interests in nine properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 139 acres of land. The portfolio encompasses four consolidated properties consisting of approximately 0.3 million square feet of GLA and 56 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 83 acres.

Previous wording

For the three months ended March 31, 2026, we recognized a total of $15.2 million of impairment losses, due to a marketed process that resulted in receiving offers below carrying value, which are included in impairment of real estate assets within the condensed consolidated statements of operations. In addition, we recognized $5.2 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the three months ended March 31, 2026, which is included in equity in income (loss) of unconsolidated entities within the condensed consolidated statements of operations. 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 wording

We did not recognize any impairment losses for the three months ended June 30, 2026. For the six months ended June 30, 2026, we recognized a total of $15.2 million of impairment losses due to a marketed process that resulted in receiving offers below carrying value, which are included in impairment of real estate assets within the condensed consolidated statements of operations. In addition, we recognized $5.2 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the six months ended June 30, 2026, which is included in equity in income (loss) of unconsolidated entities within the condensed consolidated statements of operations. 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 wording

-27 - shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT for the 2021 tax year and prior tax years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, 2021. Refer to Note 7 – Income Taxes of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

On March 31, 2022, the Company announced that its Board of Trustees, with the recommendation of the Special Committee, approved a plan to terminate the Company's REIT status and become a taxable C Corporation effective January 1, 2022. As a result, the Company is no longer required to operate under REIT rules, including the requirement to distribute at least 90% of REIT taxable income to its shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT for the 2021 tax year and prior tax years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, 2021. Refer to Note 7 – Income Taxes of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Real estate taxes decreased by approximately $0.6 million due to property sales.

Current wording

Real estate taxes decreased by approximately $0.3 million for the three months ended June 30, 2026 due to property sales.

Previous wording

The decrease of $10.4 million for the three months ended March 31, 2026 was primarily driven by a $9.8 million decrease in personnel expense, including $6.5 million of severance expense; a decrease of $0.4 million of office rent and ground rent, and a decrease of $0.2 million of legal fees.

Current wording

The decrease of $1.1 million for the three months ended June 30, 2026 was primarily driven by a decrease of $0.5 million in personnel costs, $0.4 million in office and ground rent, and $0.2 million in legal fees.

Previous wording

Gain on Sale of Real Estate, Net

Current wording

Gain on Sale of Real Estate

Previous wording

For the three months ended March 31, 2026, interest and other income (expense), net decreased by $0.5 million primarily due to a decrease in interest income as a result of maintaining lower cash balances.

Current wording

For the three months ended June 30, 2026, interest and other income (expense), net increased by $92.0 thousand primarily due to large legal refunds partially offset by a decrease in interest income as a result of maintaining lower cash balances.

Previous wording

The decrease of $2.3 million in interest expense for the three months ended March 31, 2026 was driven by partial Term Loan Facility pay downs subsequent to March 31, 2025, partially offset by an increase in amortization expense of deferred financing costs.

Current wording

The decrease of $2.2 million in interest expense for the three months ended June 30, 2026 was driven by the partial Term Loan Facility paydowns subsequent to June 30, 2025, partially offset by an increase in amortization expense of deferred financing costs.

Previous wording

During the three months ended March 31, 2026, the Company recognized a $15.2 million of impairment of real estate assets due to a marketed process that resulted in receiving offers below carrying value.

Current wording

During the six months ended June 30, 2026 the Company recognized a $15.2 million impairment of real estate assets due to a marketed process that resulted in receiving offers below carrying value.

Previous wording

During the three months ended March 31, 2026, $5.2 million of other-than-temporary impairment losses and a $2.7 million loss on sale of a portion of an Unconsolidated Property were recorded compared to an $8.5 million other-than-temporary impairment loss. A sale of the Company’s interest in the SPS Portfolio Holdings II LLC joint venture during the second quarter of 2025 resulted in decreased losses for three months ended March 31, 2026. These factors resulted in a decrease in loss of $0.8 million.

Current wording

During the six months ended June 30, 2026, $5.2 million of other-than-temporary impairment losses and a $2.7 million loss on sale of a portion of an Unconsolidated Property were recorded, compared to an $8.5 million other-than-temporary impairment loss recorded during the six months ended June 30, 2025. These factors resulted in a decrease in loss of $0.5 million.

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 during the three months ended March 31, 2026 and the Company recorded net operating cash outflows of $5.7 million. Additionally, the Company generated net investing cash inflows of $3.4 million

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 during the six months ended June 30, 2026 and the Company recorded net operating cash outflows of $7.3 million. Additionally, the Company generated net investing cash inflows of $12.0 million during the six months ended June 30, 2026, which were driven by distributions from unconsolidated entities and sales of real estate partially offset by development expenditures and investments in unconsolidated entities.

Previous wording

Obligations are projected to continue to exceed property rental income and we expect to fund such Obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and potential financing transactions, subject to any approvals that may be required under the Term Loan Agreement. Below is our sales activity since we began our capital recycling program:

Current wording

Obligations are projected to continue to exceed property rental income and we expect to fund such Obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and financing transactions, subject to any approvals that may be required under the loan agreements. Below is our sales activity since we began our capital recycling program:

Previous wording

From the approval of the Plan of Sale on October 24, 2022 through March 31, 2026, we sold 94 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.2 billion of gross proceeds.

Current wording

From the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold 95 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.3 billion of gross proceeds.

Previous wording

From the approval of the Plan of Sale on October 24, 2022 through March 31, 2026, we sold our interests in 12 Unconsolidated Properties and generated approximately $159.6 million of gross proceeds.

Current wording

From the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold our interests in 12 Unconsolidated Properties and generated approximately $165.3 million of gross proceeds.

Previous wording

Subsequent to March 31, 2026, we sold one Consolidated Property for gross proceeds of $11.0 million.

Current wording

Subsequent to June 30, 2026, we sold one Consolidated Property for gross proceeds of $3.0 million and received a distribution of $8.9 million from an Unconsolidated Property as a result of the sale of a portion of the underlying property. The Company has entered into an option purchase and sale agreement (the “PSA”) to sell one vacant non-income producing premier asset in Dallas, Texas for anticipated gross proceeds of $50.8 million before applicable credits and costs. The sale is subject to customary closing conditions and is also cross-conditioned and cross-defaulted with an option purchase and sale agreement between the buyer and unaffiliated owners of a neighboring parcel. The buyer made an initial option payment of $169,200, then (i) commencing on July 1, 2026, and each month thereafter that the PSA remains in effect through December 1, 2026, the Company shall receive an option payment equal to $126,900 and (ii) commencing on January 1, 2027, and each month thereafter that the PSA remains in effect through January 1, 2028, the Company shall receive an option payment equal to $274,950. All option payments are incremental to the purchase price and are non-refundable except as otherwise provided for in the PSA. There can be no assurances that the buyer will exercise the option to purchase the property.

Previous 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). 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 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 permitted 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”) was equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership was 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 should not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest should accrue interest at 2.0% in excess of the then applicable interest rate and should be due and

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. The Third Term Loan Amendment (as defined

Current wording

Additionally, the Term Loan Amendment provided that the administrative agent and the lenders expressed 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 I, Item I of this Quarterly Report on Form 10-Q) executed on June 16, 2022 provided exceptions to this right.

Previous wording

On July 28, 2025, the Company exercised its extension option pursuant to the Fourth Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) 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 wording

On July 28, 2025, the Company exercised its extension option pursuant to the Fourth Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) 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 should remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.

Previous wording

During the three months ended March 31, 2026, we did not make any payments against the principal of the Term Loan Facility. Our outstanding balance as of March 31, 2026, is $50.0 million.

Current wording

During the six months ended June 30, 2026, we did not make any payments against the principal of the Term Loan Facility. Our outstanding balance as of June 30, 2026, is $50.0 million.

Previous wording

Cash Flows for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Current wording

Cash Flows for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025

Previous wording

The following table summarizes the Company’s cash flow activities for the three months ended March 31, 2026 and 2025, respectively (in thousands):

Current wording

The following table summarizes the Company’s cash flow activities for the six months ended June 30, 2026 and 2025, respectively (in thousands):

Previous wording

In 2025, $28.8 million of net proceeds from the sale of real estate and $4.4 million of distributions from unconsolidated entities partially offset by development of real estate of ($13.3) million.

Current wording

In 2026, $6.4 million distributions from unconsolidated joint ventures, $9.0 million of net proceeds from the sale of real estate, offset by $2.5 million of investment in consolidated joint ventures and $0.9 of development of real estate; and

Previous wording

In 2026, $6.0 million of distributions from unconsolidated entities, partially offset by ($2.4) million of investment in unconsolidated entities and ($0.1) million of development of real estate; and

Current wording

In 2025, $51.6 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 $4.9 of distributions from unconsolidated entities offset by development of real estate of $18.0 million.

Previous wording

In 2026, cash payments of preferred dividends, ($1.2) million partially offset by a contribution from non-controlling interest of $54.0 thousand; and

Current wording

In 2026, $2.5 million cash payments of preferred dividends and a distribution to non-controlling interest of $1.7 million; and

Previous wording

The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during the three months ended March 31, 2026 and 2025, respectively. The last dividend on the Company’s Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019.

Current wording

The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during the six months ended June 30, 2026 and 2025, respectively. The last dividend on the Company’s Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019.

Previous wording

-32 - 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 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 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.

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

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2025 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the three months ended March 31, 2026, there were no material changes to these policies.

Current wording

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2025 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the six months ended June 30, 2026, there were no material changes to these policies.