UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to _______ Commission File Number 001-37420 SERITAGE GROWTH PROPERTIES | Title of each class | Trading Symbols | Name of each exchange on which registered | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to _______ Commission File Number 001-37420 SERITAGE GROWTH PROPERTIES (Exact name of registrant as specified in its charter) Maryland 38-3976287 (State of Incorpo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (State of Incorporation) (I.R.S. Employer Identification No.) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to _______ Commission File Number 001-37420 SERITAGE GROWTH PROPERTIES (Exact name of registrant as ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 Commission file number 001-37420 SERITAGE GROWTH PROPERTIES (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 500 Fifth Avenue, Suite 1530, New York, New York 10110 (Address of principal executi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to _______ Commission File Number 001-37420 SERITAGE GROWTH PROPERTIES (Exact name of registrant as specified in its charter) Maryland 38-3976287 (State of Incorpo ...

Financial Performance - For the three months ended March 31, 2022, rental income decreased by $2.1 million to $29.1 million compared to $31.1 million in the same period of 2021, primarily due to a reduction in Sears/Kmart rental income [180][182]. - The company recorded a net operating cash outflow of $30.0 million for the three months ended March 31, 2022, as property rental income did not fully cover obligations incurred [194]. - For the three months ended March 31, 2022, the Company reported a net loss of $66,987 thousand, compared to a net loss of $10,933 thousand for the same period in 2021 [223]. - The Company's Net Operating Income (NOI) for Q1 2022 was $8,969 thousand, an increase from $7,908 thousand in Q1 2021, representing a growth of approximately 13.4% [223]. - Total NOI for Q1 2022 was $10,493 thousand, up from $9,433 thousand in Q1 2021, indicating an increase of about 11.2% [223]. - The Company incurred interest expense of $22,588 thousand in Q1 2022, down from $26,150 thousand in Q1 2021, reflecting a decrease of approximately 13.5% [223]. - General and administrative expenses decreased to $9,092 thousand in Q1 2022 from $11,232 thousand in Q1 2021, a reduction of about 19.1% [223]. - The Company reported an equity loss of $33,076 thousand from unconsolidated entities in Q1 2022, significantly higher than the $1,162 thousand loss in Q1 2021 [223]. - Depreciation and amortization expenses were $11,934 thousand in Q1 2022, slightly lower than $13,142 thousand in Q1 2021 [223]. - The Company recognized a gain of $1,015 thousand on the sale of real estate in Q1 2022, compared to a loss of $24,208 thousand in Q1 2021 [223]. Asset Management - As of March 31, 2022, the company's portfolio consisted of 161 properties with approximately 19.0 million square feet of gross leasable area (GLA) and 3.8 million square feet held by unconsolidated entities [166]. - The company collected 96% of rental income for the three months ended March 31, 2022, with no additional deferrals agreed upon [176]. - The company's multi-tenant retail portfolio was 82.7% leased as of March 31, 2022, with a pipeline of 0.2 million square feet [176]. - The company recognized $95.8 million of impairment losses during the year ended December 31, 2021, and $1.0 million during the three months ended March 31, 2022 [177]. - The company recognized $1.0 million in impairment on four real estate assets during the same period, reflecting a strategic decision to sell these properties [190]. - The loss from unconsolidated entities increased by $31.9 million, primarily due to a $61.1 million impairment charge in one investment, resulting in the company's share of this impairment being $30.6 million [191]. - The company sold one property for $9.0 million but recorded a loss of $1.0 million on the sale [189]. - As of March 31, 2022, the company had sold 91 consolidated properties since July 2017, generating approximately $995.8 million in gross proceeds [198]. - The company invested $22.5 million in consolidated development and operating properties and $7.6 million in unconsolidated joint ventures during the three months ended March 31, 2022 [208]. - The company had nine assets under contract for sale with anticipated proceeds of $85.0 million as of May 9, 2022 [195]. - The company is currently marketing assets with an estimated fair value of $636.3 million, which could help meet the $640 million principal pay down required for the Term Loan Facility [201]. Corporate Strategy - The company plans to terminate its REIT status and become a taxable C Corporation effective for the year ending December 31, 2022, allowing greater flexibility in using free cash flow [172]. - The company intends to execute a strategic review process to enhance shareholder value, overseen by a special committee of the Board of Trustees [171]. - The company expects ongoing impacts from the COVID-19 pandemic, which may significantly affect future financial results [175]. Debt and Financing - The outstanding balance of the Term Loan Facility as of March 31, 2022, was $1.44 billion, following a repayment of $160.0 million during the year ended December 31, 2021 [200]. - The company did not declare dividends on Class A common shares during the three months ended March 31, 2022, and 2021 [204]. Market Risk - There were no material changes in the quantitative and qualitative disclosures about market risk compared to the previous year [224].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 Commission file number 001-37420 SERITAGE GROWTH PROPERTIES (Exact name of registrant as specified in its charter) Maryland 38-3976287 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 500 Fifth Avenue, Suite 1530, New York, New York 10110 (Address ...

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Seritage Growth Properties' unaudited condensed consolidated financial statements and notes for the periods ended September 30, 2021, are presented [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2021, total assets decreased to $2.49 billion, liabilities slightly to $1.74 billion, and equity significantly to $751.7 million Condensed Consolidated Balance Sheets (in thousands) | | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total assets** | **$2,494,706** | **$2,648,943** | | Net investment in real estate | $1,746,927 | $1,910,872 | | Cash and cash equivalents | $153,378 | $143,728 | | **Total liabilities** | **$1,743,017** | **$1,766,216** | | Term Loan Facility, net | $1,599,226 | $1,598,909 | | **Total equity** | **$751,689** | **$882,727** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue for Q3 2021 decreased to $29.0 million, with net loss narrowing to $21.8 million, while the nine-month net loss widened to $104.8 million Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$29,003** | **$33,707** | **$88,158** | **$88,843** | | Gain / (loss) on sale of real estate, net | $22,774 | $(14,706) | $65,079 | $59,959 | | Impairment of real estate assets | $(3,814) | $(14,594) | $(70,053) | $(16,407) | | **Net loss** | **$(26,349)** | **$(72,401)** | **$(132,586)** | **$(103,272)** | | Net loss attributable to Seritage common shareholders | $(21,759) | $(51,278) | $(104,769) | $(74,320) | | **Net loss per share - Basic & Diluted** | **$(0.50)** | **$(1.33)** | **$(2.50)** | **$(1.95)** | [Condensed Consolidated Statements of Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity decreased from $882.7 million to $751.7 million as of September 30, 2021, primarily due to a $132.6 million net loss Changes in Total Equity (in thousands) | | Nine Months Ended Sep 30, 2021 | | :--- | :--- | | **Balance at January 1, 2021** | **$882,727** | | Net loss | $(132,586) | | Preferred dividends declared | $(3,675) | | **Balance at September 30, 2021** | **$751,689** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $85.6 million, while investing activities provided $95.8 million, primarily from real estate sales, for the nine months ended September 30, 2021 Condensed Consolidated Statements of Cash Flows (in thousands) | | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net cash (used in) operating activities** | **$(85,566)** | **$(25,300)** | | **Net cash provided by (used in) investing activities** | **$95,820** | **$(9,697)** | | Net proceeds from sale of real estate | $195,183 | $234,777 | | Development of real estate | $(77,554) | $(194,964) | | **Net cash provided by financing activities** | **$20** | **$16,656** | | **Net increase / (decrease) in cash** | **$10,274** | **$(18,341)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's organization, accounting policies, debt, leases, and contingencies, including Sears lease termination, asset sales for liquidity, term loan non-compliance, and a Sears Holdings lawsuit - As of September 30, 2021, the company's portfolio consisted of interests in **170 properties** with approximately **10.0 million square feet of GLA**[24](index=24&type=chunk) - The company's obligations are projected to exceed rental income, and it plans to fund these costs with cash on hand and sales of properties; management believes this plan is probable to be effectively implemented[31](index=31&type=chunk) - The company is a defendant in a lawsuit filed by Sears Holdings, which alleges the 2015 spin-off transaction was a fraudulent transfer and real estate was undervalued by at least **$649 to $749 million**; the company believes the claims are without merit[116](index=116&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk) - As of September 30, 2021, the company was not in compliance with certain financial metrics of its **$1.6 billion Term Loan Facility**, requiring it to obtain consent from the lender (Berkshire Hathaway) for asset sales[98](index=98&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting the impact of COVID-19, restructuring, and portfolio review, noting declining rental income, significant impairment charges, and reliance on asset sales for liquidity - The company is repositioning its portfolio into three business lines: residential developments, premier mixed-use assets, and multi-tenant retail destinations[150](index=150&type=chunk) - A portfolio review led to a modification of plans for certain assets, resulting in **$70.1 million** of impairment losses in the nine months ended September 30, 2021[154](index=154&type=chunk)[181](index=181&type=chunk) - The company's primary source of operating cash flow, property rental income, did not fully fund its obligations during the first nine months of 2021, resulting in net operating cash outflows of **$85.6 million**[183](index=183&type=chunk) - The company plans to fund its obligations and development expenditures with cash on hand and capital from sources like sales of consolidated properties, sales of interests in unconsolidated properties, and creating new joint ventures[184](index=184&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Rental income decreased in Q3 2021 due to Sears lease termination, while nine-month rental income saw a smaller decline; impairment charges significantly increased to **$70.1 million** Rental Income Breakdown (in thousands) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | $ Change | | :--- | :--- | :--- | :--- | | Sears/Kmart | $0 | $5,997 | $(5,997) | | In-place diversified, non-Sears leases | $27,812 | $24,654 | $3,158 | | **Total rental income** | **$28,819** | **$33,966** | **$(5,147)** | Key Expense Changes (Nine Months Ended Sep 30, $ in thousands) | Expense Item | 2021 | 2020 | $ Change | | :--- | :--- | :--- | :--- | | Depreciation and amortization | $39,629 | $81,446 | $(41,817) | | Impairment of real estate assets | $70,053 | $16,407 | $53,646 | | Interest expense | $81,847 | $66,400 | $15,447 | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow was negative **$85.6 million**, with liquidity primarily managed through **$195.2 million** in asset sales, while development expenditures totaled **$77.6 million** on consolidated properties and **$31.7 million** in joint ventures Cash Flow Summary (Nine Months Ended Sep 30, $ in thousands) | | 2021 | 2020 | $ Change | | :--- | :--- | :--- | :--- | | Net cash (used in) operating activities | $(85,566) | $(25,300) | $(60,266) | | Net cash provided by (used in) investing activities | $95,820 | $(9,697) | $105,517 | - During the nine months ended September 30, 2021, the company invested **$77.6 million** in its consolidated development and operating properties and an additional **$31.7 million** into its unconsolidated joint ventures[194](index=194&type=chunk) [Non-GAAP Supplemental Financial Measures and Definitions](index=41&type=section&id=Non-GAAP%20Supplemental%20Financial%20Measures%20and%20Definitions) The company uses non-GAAP measures like NOI and FFO; Q3 2021 Company FFO was negative **$24.9 million**, and Total NOI was **$8.1 million** Reconciliation of Net Loss to Company FFO (in thousands) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net loss | $(26,349) | $(72,401) | | FFO attributable to common shareholders | $(27,696) | $(19,898) | | **Company FFO attributable to common shareholders** | **$(24,909)** | **$(25,093)** | Reconciliation of Net Loss to Total NOI (in thousands) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net loss | $(26,349) | $(72,401) | | NOI | $7,356 | $4,710 | | **Total NOI** | **$8,075** | **$5,979** | [Quantitative and Qualitative Disclosure about Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company states that there were no material changes in its market risk disclosures from those set forth in its 2020 Annual Report on Form 10-K - There were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in the 2020 Annual Report on Form 10-K[217](index=217&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2021; no material changes to internal control over financial reporting occurred during the quarter - Based on an evaluation conducted by management, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[218](index=218&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[219](index=219&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the information on legal proceedings detailed in Note 9 of the condensed consolidated financial statements; the key legal matter is the ongoing litigation with Sears Holdings - Information regarding legal proceedings is incorporated by reference from Note 9 of the condensed consolidated financial statements[221](index=221&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes from 2020 Annual Report risk factors, but updates include potential adverse effects of inflation, rising interest rates, and increased costs and delays for construction projects due to supply chain disruptions - The U.S. economy is experiencing higher inflation, which may increase interest expenses, general and administrative costs, and could adversely affect tenant leases and consumer spending[224](index=224&type=chunk) - The company faces increased risks from volatility in commodity and labor prices, as well as supply chain disruptions, which may adversely affect construction projects[226](index=226&type=chunk) - Significant price increases for construction materials like steel, lumber, and copper, along with major supply chain backlogs at U.S. ports, could result in project delays and increased costs[228](index=228&type=chunk)[229](index=229&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[230](index=230&type=chunk) [Defaults upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[231](index=231&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[232](index=232&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item - None[233](index=233&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications under the Sarbanes-Oxley Act and Inline XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)[235](index=235&type=chunk) [Signatures](index=48&type=section&id=SIGNATURES)

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements detail the company's financial position, operations, and cash flows, showing decreased assets, a significant net loss, and negative operating cash flow funded by asset sales [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$2.50 billion** by June 30, 2021, from **$2.65 billion** at year-end 2020, driven by reduced real estate investment, while equity declined due to net loss Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,502,533** | **$2,648,943** | | Net investment in real estate | $1,745,572 | $1,910,872 | | Cash and cash equivalents | $140,058 | $143,728 | | **Total Liabilities** | **$1,727,644** | **$1,766,216** | | Term Loan Facility, net | $1,599,121 | $1,598,909 | | **Total Equity** | **$774,889** | **$882,727** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **net loss of $95.3 million** for Q2 2021, primarily due to a **$64.5 million impairment charge**, with a **$106.2 million** loss for the six-month period Statement of Operations Highlights (in thousands, except per share amounts) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $27,874 | $21,819 | $59,155 | $55,136 | | Gain on sale of real estate, net | $18,097 | $53,877 | $42,305 | $74,665 | | Impairment of real estate assets | $(64,539) | $(1,813) | $(66,239) | $(1,813) | | Net Income / (Loss) | $(95,304) | $104 | $(106,237) | $(30,871) | | Net Loss Attributable to Seritage | $(72,840) | $72 | $(80,560) | $(20,592) | | Net Loss Per Share - Diluted | $(1.73) | $(0.03) | $(2.02) | $(0.61) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$56.6 million** for the first half of 2021, offset by **$56.1 million** from investing activities, primarily real estate sales Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(56,616) | $(18,345) | | Net cash provided by (used in) investing activities | $56,099 | $(36,705) | | Net cash used in financing activities | $(2,529) | $(2,535) | | **Net decrease in cash** | **$(3,046)** | **$(57,585)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes disclose the company's organization, accounting policies, liquidity challenges, reliance on asset sales, significant debt, and ongoing litigation with Sears Holdings - As of June 30, 2021, the company's portfolio consisted of interests in **172 properties** totaling approximately **24.9 million square feet of GLA**[24](index=24&type=chunk) - The company's primary source of operating cash flow, property rental income, did not fully fund its obligations during the first six months of 2021, resulting in a **net operating cash outflow of $56.6 million**[30](index=30&type=chunk)[31](index=31&type=chunk) - The company recorded significant impairment losses of **$64.5 million for Q2 2021** and **$66.2 million for the first six months of 2021**, triggered by organizational restructuring and a modified strategic plan for certain assets[107](index=107&type=chunk) - Seritage is a defendant in a lawsuit filed by Sears Holdings, alleging the 2015 transaction creating Seritage was a fraudulent transfer, claiming the real estate was undervalued by at least **$649 million to $749 million** and seeking rescission or damages[116](index=116&type=chunk)[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and strategy, highlighting increased net losses from impairment charges and reliance on asset sales to fund operating shortfalls [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2021 saw increased rental income offset by a **$62.7 million** rise in impairment charges and decreased real estate sale gains, leading to higher net losses Key Changes in Operations - Q2 2021 vs Q2 2020 (in thousands) | Account | $ Change | | :--- | :--- | | Rental income | $5,947 | | Depreciation and amortization | $(10,374) | | General and administrative | $3,346 | | Gain on sale of real estate, net | $(35,780) | | Impairment of real estate assets | $(62,726) | - The increase in General and Administrative expenses in Q2 2021 was driven by severance, restructuring costs, D&O insurance, and salary expenses[162](index=162&type=chunk) - The decrease in depreciation and amortization for both the three and six-month periods was primarily due to accelerated expenses recorded in 2020 related to Holdco lease terminations and lower expense from property sales[160](index=160&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Rental income is insufficient to cover obligations, leading to a **$56.6 million** operating cash outflow, with liquidity heavily reliant on asset sales and an undrawn **$400 million** facility contingent on unmet targets - The company's obligations are projected to continue to exceed property rental income, requiring funding from cash on hand and capital sources like asset sales[179](index=179&type=chunk) - Access to the **$400.0 million** Incremental Funding Facility is contingent on achieving at least **$200.0 million** in annualized rental income from non-Sears tenants, a target which has not yet been achieved[182](index=182&type=chunk) Capital Recycling Program Proceeds (Since July 2017, in millions) | Source | Gross Proceeds | | :--- | :--- | | Sales of Wholly Owned Properties | ~$718.3 | | Sales of interests in Unconsolidated Properties | ~$278.1 | | Contributions to new Unconsolidated Entities | ~$212.4 | [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliations for non-GAAP measures show **Total NOI at $7.6 million** for Q2 2021 and a **Company FFO loss of $29.3 million** for the same period Non-GAAP Performance Summary (in thousands) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | NOI | $6,112 | $6,222 | $14,020 | $21,420 | | Total NOI | $7,553 | $7,285 | $16,986 | $23,132 | | FFO | $(33,911) | $(27,387) | $(52,655) | $(44,944) | | Company FFO | $(29,305) | $(27,150) | $(51,296) | $(45,591) | [Item 3. Quantitative and Qualitative Disclosure about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) No material changes were reported in the company's quantitative and qualitative disclosures regarding market risk compared to the 2020 Annual Report - No material changes in Quantitative and Qualitative Disclosures about Market Risk were reported for the period[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[216](index=216&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[217](index=217&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, primarily concerning significant litigation with Sears Holdings, are incorporated by reference from Note 9 of the financial statements - Information regarding legal proceedings is incorporated by reference from Note 9 of the condensed consolidated financial statements[219](index=219&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported from the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K - No material changes from the risk factors disclosed in the 2020 Annual Report on Form 10-K were reported[220](index=220&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as Inline XBRL documents[226](index=226&type=chunk)

N a r e i t R E I T w o r l d 2 0 2 1 A n n u a l C o n f e r e n c e J u n e 8 - 1 0 , 2 0 2 1 Seritage Growth Properties | Forward Looking Statements This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statem ...