NEW YORK--(BUSINESS WIRE)--Seritage Growth Properties (NYSE: SRG) (the "Company†), a national owner and developer of retail, residential and mixed-use properties, announced that today the Company has made a voluntary prepayment of $20.0 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire Hathaway†). With the prepayment, the Company has now repaid a total of $1.55 billion since December 2021 and $50 million of the term. ...

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Core Points - Seritage Growth Properties has made a voluntary prepayment of $130 million towards its $1.6 billion term loan facility with Berkshire Hathaway, funded by recent property sales, including the Aventura, FL property [1][2] - Since December 2021, the company has repaid a total of $1.53 billion, leaving $70 million outstanding on the term loan facility, which will reduce annual interest expenses by approximately $9.2 million [2] - Cumulative repayments since December 2021 have led to a total reduction of approximately $108.6 million in annual interest expenses related to the term loan facility [2] Company Overview - Seritage Growth Properties is a national owner and developer of retail, residential, and mixed-use properties, with a portfolio consisting of interests in 13 properties, totaling approximately 1.3 million square feet of gross leasable area and 198 acres of land as of September 30, 2025 [3]

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Financial Performance - For Q3 2025, the company reported a net loss attributable to common shareholders of $13.6 million, or $0.24 per share, compared to a net loss of $23.2 million, or $0.41 per share in Q3 2024[13]. - Total revenue for Q3 2025 was $4,785,000, a 47.2% increase from $3,251,000 in Q3 2024[33]. - Rental income increased to $4,603,000 in Q3 2025, up 58.8% from $2,899,000 in Q3 2024[33]. - Net loss for Q3 2025 was $12,422,000, compared to a net loss of $21,973,000 in Q3 2024, representing a 43.5% improvement[34]. - Net loss attributable to Seritage common shareholders for Q3 2025 was $13,647,000, down from $23,198,000 in Q3 2024, a reduction of 41.5%[33]. - NOI-cash basis for Q3 2025 was $235,000, compared to a loss of $2,256,000 in Q3 2024, indicating a significant turnaround[34]. - Total expenses for Q3 2025 were $10,852,000, down from $22,516,000 in Q3 2024, a decrease of 51.7%[33]. - Interest expense for Q3 2025 was $5,290,000, a decrease from $6,051,000 in Q3 2024, reflecting a reduction of 12.6%[34]. - Management and other fee income decreased to $182,000 in Q3 2025 from $352,000 in Q3 2024, a decline of 48.2%[33]. Asset Management - The company has four assets under contract with anticipated gross proceeds of $240.8 million, including three assets with no due diligence contingencies expected to generate $170.0 million[4]. - The company's current estimated gross sales proceeds for assets not under contract or in PSA negotiation is projected to be between $220 million and $310 million[6]. - The company’s portfolio consists of interests in 13 properties, totaling approximately 1.3 million square feet of gross leasable area as of September 30, 2025[28]. - Properties sold during the nine months ended September 30, 2025, included Boca Raton, Barton Creek, and Santa Rosa, with total square footage sold of 169,200[36]. Financial Position - As of September 30, 2025, the company had cash on hand of $59.9 million, including $8.3 million of restricted cash, which increased to $65.0 million by November 13, 2025[4]. - As of September 30, 2025, the company's total assets amounted to $558.61 million, a decrease from $677.77 million as of December 31, 2024, reflecting a reduction of approximately 17.6%[30]. - The company's net investment in real estate decreased to $164.63 million from $358.63 million, representing a decline of about 54%[30]. - The total liabilities decreased to $219.52 million from $271.97 million, a reduction of approximately 19.3%[30]. - The company's accumulated deficit increased to $1.03 billion from $958.78 million, indicating a rise of about 7.1%[30]. Strategic Initiatives - The company plans to cease providing future sales projections to avoid negatively impacting marketing efforts for remaining assets[5]. - The strategic review process is ongoing as the company executes its Plan of Sale, with no assurance regarding the success of this process[19]. - The company intends to vigorously defend itself against multiple class action and derivative lawsuits alleging violations of federal securities laws[15][16]. Market Conditions - The company continues to face challenging market conditions, including elevated interest rates and difficulties in raising equity capital for land development deals, which may adversely impact asset pricing and shareholder distributions[20]. Impairment and Investments - The company invested $3.8 million in consolidated properties during Q3 2025, primarily related to tenant leasing costs[4]. - The company recognized an impairment charge of $0.8 million on its consolidated properties during Q3 2025[4]. - Impairment of real estate assets for Q3 2025 was $800,000, compared to $0 in Q3 2024, indicating a new challenge for the company[34]. - For the nine months ended September 30, 2025, the company made $40.0 million in principal repayments on its Term Loan Facility[7]. Non-GAAP Measures - The company utilizes non-GAAP financial measures such as NOI-cash basis to provide insights into its financial performance, which may not be comparable to other real estate companies[21][23].

Core Insights - Seritage Growth Properties reported its financial and operating results for Q3 and the first nine months of 2025, highlighting ongoing asset sales and financial challenges [1][4][5]. Financial Highlights - For Q3 2025, the company has four assets under contract with anticipated gross proceeds of $240.8 million, including $170.0 million from three assets with no due diligence contingencies [4]. - The company recognized a net loss attributable to common shareholders of $13.6 million, or $0.24 per share, for Q3 2025, compared to a net loss of $23.2 million, or $0.41 per share, in Q3 2024 [8][14]. - The company had cash on hand of $59.9 million as of September 30, 2025, which increased to $65.0 million by November 13, 2025 [4][15]. Asset Sales and Future Projections - The company expects to close on three assets under contract soon, which would allow for a significant prepayment of its Term Loan Facility [2]. - As of November 13, 2025, the estimated gross sales proceeds for remaining assets not under contract or in negotiations is projected to be between $220 million and $310 million [6][5]. Portfolio Overview - As of September 30, 2025, the company’s portfolio included interests in 13 properties, totaling approximately 1.3 million square feet of gross leasable area [30]. - The company reported a total occupancy rate of 92% for its Multi-Tenant retail properties, with 391 thousand square feet leased [10]. Strategic Review and Market Conditions - The company is executing its Plan of Sale, which was approved by shareholders in 2022, and remains open to exploring value-maximizing alternatives, including a potential sale of the company [20]. - The company faces challenging market conditions, including elevated interest rates and difficulties in raising equity capital for land development, which may impact asset pricing and sales [21][22].

Financial Performance - Rental income for the three months ended September 30, 2025, increased by $1.7 million to $4.6 million compared to $2.9 million for the same period in 2024 [170]. - Rental income increased by $0.8 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily driven by the Aventura, FL property [182]. - The Company reported a net loss of $12.4 million for the three months ended September 30, 2025, compared to a net loss of $22.0 million for the same period in 2024 [230]. - For the nine months ended September 30, 2025, the net loss was $63.1 million, down from $142.2 million in the same period of 2024 [230]. - Net Operating Income (NOI) on a cash basis for the three months ended September 30, 2025, was $235,000, compared to a loss of $2.3 million in 2024 [230]. - NOI-cash basis at share for the nine months ended September 30, 2025, was $6.8 million, compared to $1.0 million in 2024 [230]. Asset Management - As of September 30, 2025, the company's portfolio consisted of 13 properties with approximately 1.3 million square feet of gross leasable area (GLA) and 198 acres of land [158]. - The company recorded a gain of $8.9 million from the sale of two properties for $52.6 million during the nine months ended September 30, 2025 [188]. - The company sold 91 consolidated properties from October 24, 2022, through September 30, 2025, generating approximately $1.1 billion in gross proceeds [200]. - The company had four assets under contract for sale as of November 13, 2025, with total anticipated proceeds of $240.8 million [201]. - The company is currently executing a Plan of Sale approved by shareholders, which allows for the sale of all assets and distribution of net proceeds [160]. Expenses and Impairments - The company recorded an impairment loss of $0.8 million for the three months ended September 30, 2025, and a total of $18.8 million for the nine months ended September 30, 2025 [161][181]. - The company recorded $8.5 million in other-than-temporary impairment losses on investments in unconsolidated entities during the nine months ended September 30, 2025 [161]. - An impairment of real estate assets of $18.8 million was recognized due to the agreement to sell one property below book value during the nine months ended September 30, 2025 [191]. - General and administrative expenses decreased by $2.3 million for the three months ended September 30, 2025, primarily due to reduced staffing and lower employee bonuses [176]. - Property operating expenses decreased by $2.3 million for the nine months ended September 30, 2025, mainly due to a $1.0 million reduction in common area expenses and a $1.3 million decrease in insurance expenses related to sold properties [183]. Debt and Cash Flow - As of September 30, 2025, the company had outstanding debt of $200.0 million after repaying $40.0 million against the principal of the Term Loan Facility [205]. - Net operating cash outflows amounted to $33.7 million for the nine months ended September 30, 2025, as rental income did not fully cover obligations [197]. - The company generated net investing cash inflows of $43.6 million during the nine months ended September 30, 2025, driven by asset sales [197]. - Interest expense decreased by $0.8 million for the three months ended September 30, 2025, due to partial pay downs of the Term Loan Facility [180]. Legal Matters - The Company is currently involved in multiple derivative lawsuits alleging breaches of fiduciary duty against its executives and board members [220][221]. - The Company intends to vigorously defend itself against the allegations in these lawsuits [221]. - Management believes that the resolution of ordinary course legal proceedings will not have a material effect on the Company's financial position [222]. Strategic Initiatives - The strategic review process for enhancing shareholder value remains ongoing, with the Board of Trustees overseeing the Plan of Sale [159]. - The company faces challenging market conditions, including elevated interest rates and limited availability of debt and equity capital, which may impact asset pricing [164]. Investment Activities - The Company invested $3.8 million and $21.8 million in consolidated properties during the three and nine months ended September 30, 2025, respectively [217]. - For the same periods in 2024, the Company invested $3.3 million and $25.7 million in consolidated properties, along with $5.8 million and $9.0 million in unconsolidated joint ventures [218]. Dividends - The company did not declare dividends on Class A common shares during the nine months ended September 30, 2025, with the last dividend declared on February 25, 2019 [211].

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Core Insights - Bragar Eagel & Squire, P.C. is investigating potential claims against Seritage Growth Properties (NYSE: SRG) on behalf of long-term stockholders following a class action complaint filed on July 1, 2024, concerning breaches of fiduciary duties by the board of directors [1][7] Company Developments - On August 14, 2023, Seritage disclosed a "material weakness" in its internal control over financial reporting, specifically regarding the identification of impairment indicators for real estate investments, leading to a stock price drop of $0.86 (9.67%) to $8.03 per share on August 15, 2023 [7] - On May 10, 2024, Seritage announced an adjustment in pricing projections for its assets, resulting in a gross value reduction of at least $325 million, causing the stock price to fall by $2.54 (27.3%) to $6.78 per share on May 13, 2024 [7] Legal Context - The class action complaint alleges that during the Class Period, Seritage's management made materially false and misleading statements and failed to disclose significant adverse facts about the company's operations and prospects, including ineffective internal controls and overstated asset values [7]

Group 1 - Seritage Growth Properties (NYSE: SRG) completed the sale of three properties for approximately $31 million in gross proceeds during Q2 2025 [2] - The company is making solid progress with its asset sale process [2] - The focus of the investment group Distressed Value Investing includes value opportunities and distressed plays, particularly in the energy sector [2] Group 2 - Aaron Chow, also known as Elephant Analytics, has over 15 years of analytical experience and is a top-rated analyst on TipRanks [2] - Chow co-founded a mobile gaming company that was acquired by PENN Entertainment and has designed in-game economic models for mobile apps with over 30 million combined installs [2] - The investment group Distressed Value Investing offers exclusive research about various companies and opportunities [1]