# Seritage Growth Properties: Form 10-Q for the period ended Jun 30, 2025

- Company: [Seritage Growth Properties](/companies/srg.md) (CIK 1628063)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 16:33 ET
- Period: 2025-06-30
- Accession: 0000950170-25-108985
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1628063/000095017025108985/srg-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1628063/000095017025108985/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $127.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $269.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $5.1m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $10.4m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $115.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | −$75.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$28.5m | us-gaap:ProfitLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$50.7m | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.53 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.94 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.53 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.94 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 56,324,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 56,304,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$21.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $71.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $575.7m | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $223.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $351.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 40,705 characters.

*Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “would,” “may,” “will,” “continue to,” “pro forma” or the opposite of these words and phrases or other similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of this Quarterly Report.*

### Overview

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, 2025, our portfolio consisted of interests in 13 properties comprised of approximately 1.3 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 198 acres of land. The portfolio encompasses eight consolidated properties consisting of approximately 0.8 million square feet of GLA and 113 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres.

### Review of Strategic Alternatives

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.

The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, at which time the Plan of Sale was approved by the shareholders, following our filing of a final proxy statement with the SEC on September 14, 2022. See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about the Plan of Sale. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing on the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale.

### Impairment of Real Estate Assets and Investments in Unconsolidated Entities

In July 2025, we accepted an offer to sell an asset below book value resulting in the recognition of an impairment loss of $18.0 million for the three months ended June 30, 2025, which is included in impairment of real estate assets within the consolidated statements of operations. We recognized $8.5 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the six months ended June 30, 2025, which is included in equity in income (loss) of unconsolidated entities within the 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.

### REIT Qualification

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.

### Market Update

The Company continues to face challenging market conditions such as elevated interest rates and the availability of debt and equity capital and continues to assess other potential macroeconomic impacts including supply chain issues and international conflicts associated with tariffs as well as potential labor issues. These conditions could apply downward pricing pressures on our remaining assets. In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset. If these challenging market conditions persist, then we expect that they will continue to adversely impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders.

### Business Strategies

The Company’s primary objective is to create value for its shareholders through the monetization of the Company's assets through the Plan of Sale, which can be suspended by the Board of Trustees. We look to enhance sale value through leasing our built footprint, densification of our sites, achievement of entitlements and modification of agreements that govern our properties. We continue to position all remaining assets for sale.

### Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties. This revenue generally includes fixed base rents and recoveries of expenses that we have incurred and that we pass through to the individual tenants, in each case as provided in the respective leases.

Our primary cash expenses consist of our property operating expenses, general and administrative expenses, interest expense, and construction and development related costs. Property operating expenses include: real estate taxes, repairs and maintenance, management fees, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense on our term loan facility. In addition, we incur substantial non-cash charges for depreciation of our properties and amortization of intangible assets and liabilities.

### Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024 (in thousands):

| Revenue | Three Months Ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Rental income | $4,526 | $4,166 | $360 |
| Expenses |  |  |  |
| Property operating | (3,237) | (4,160) | 923 |
| Real estate taxes | (692) | (1,238) | 546 |
| Depreciation and amortization | (2,040) | (1,212) | (828) |
| General and administrative | (6,172) | (6,874) | 702 |
| Gain on sale of real estate, net | 1,967 | 2,034 | (67) |
| Loss on sale of interests in unconsolidated entities | (1,417) | — | (1,417) |
| Impairment of real estate assets | (18,000) | (86,388) | 68,388 |
| Equity in income (loss) of unconsolidated entities | 756 | (566) | 1,322 |
| Interest and other income (expense), net | 930 | 717 | 213 |
| Interest expense | (5,139) | (6,282) | 1,143 |

- 29 -

#### Rental Income

Rental income increased $0.4 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to an increase in rental income from the Aventura, FL property. The increase was partially offset by property sales of two income producing properties throughout 2024 and one income producing property in the first quarter of 2025.

#### Property Operating Expenses

The decrease of $0.9 million in property operating expense for the three months ended June 30, 2025 was primarily due to a decrease in common area maintenance expense of $0.7 million.

#### Real Estate Taxes

Real estate taxes decreased by $0.2 million related to sold properties and by $0.3 million related to prior year’s tax refunds.

#### Depreciation and Amortization Expenses

The increase of $0.8 million in depreciation and amortization expenses for the three months ended June 30, 2025 was primarily due to a $1.2 million increase in depreciation related to Aventura tenant improvements partially offset by a $0.6 million decrease in depreciation related to properties sold.

#### General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.

The decrease of $0.7 million for the three months ended June 30, 2025 reflects an overall decrease in costs including share based compensation, consulting expense and personnel costs.

#### Gain on Sale of Real Estate

During the three months ended June 30, 2025, the Company sold one property for $23.0 million and recorded a gain totaling $2.0 million which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

During the three months ended June 30, 2024, the Company sold four properties for aggregate consideration of $40.4 million and recorded a net gain totaling $2.0 million, which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

#### Loss on Sale of Interests in Unconsolidated Entities

During the three months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale.

#### Impairment of Real Estate Assets

During the three months ended June 30, 2025, the Company recognized an $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.

During the three months ended June 30, 2024, the Company recognized a $0.6 million impairment of real estate assets as a result of the Company entering a contract at a gross selling price below book value on one property 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.

#### Equity in Income (Loss) of Unconsolidated Entities

The increase in equity in income for the three months ended June 30, 2025 was driven by an increase in income $0.7 million from the Company’s investment in the UTC JV and a decrease of losses of $0.6 million related to the Company’s other investments.

#### Interest Expense

The decrease of $1.1 million in interest expense for the three months ended June 30, 2025 was driven by partial Term Loan Facility pay downs during the second half 2024.

### Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024 (in thousands):

| Revenue | Six Months Ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Rental income | $8,983 | $9,891 | $(908) |
| Expenses |  |  |  |
| Property operating | (6,145) | (7,833) | 1,688 |
| Real estate taxes | (1,645) | (2,631) | 986 |
| Depreciation and amortization | (4,115) | (6,483) | 2,368 |
| General and administrative | (21,865) | (16,066) | (5,799) |
| Gain on sale of real estate, net | 8,903 | 3,173 | 5,730 |
| Loss on sale of interests in unconsolidated entities | (1,417) | — | (1,417) |
| Impairment of real estate assets | (18,000) | (87,536) | 69,536 |
| Equity in loss of unconsolidated entities | (7,172) | (187) | (6,985) |
| Interest and other income (expense), net | 1,790 | 2,140 | (350) |
| Interest expense | (10,369) | (13,293) | 2,924 |

#### Rental Income

Rental income decreased $0.9 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease is primarily driven by the sales of four income producing properties. The decrease is offset by in increase of rental income from the Aventura, FL property as well as a decrease in bad debt expense.

#### Property Operating Expenses

The decrease of $1.7 million in property operating expense for the six months ended June 30, 2025 was primarily due to a decrease in common area expenses of $0.8 million and a decrease in insurance of $0.7 million primarily as a result of sold properties.

#### Real Estate Taxes

Real estate taxes decreased by $0.8 million related to sold properties and by $0.1 million related to prior year’s tax refunds.

#### Depreciation and Amortization Expenses

The decrease of $2.4 million in depreciation and amortization expenses for the six months ended June 30, 2025 was primarily due to property sales and was partially offset by an increase in depreciation related to Aventura tenant improvements.

#### General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.

The increase for the six months ended June 30, 2025 was primarily due to the recognition of severance expense of $6.5 million. The increase was partially offset by a decrease in overall costs including accounting fees and consulting expense.

#### Gain on Sale of Real Estate

During the six months ended June 30, 2025, the Company sold two properties for $52.6 million and recorded a gain totaling $8.9 million which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

During the six months ended June 30, 2024, the Company sold nine properties for aggregate consideration of $87.7 million and recorded a gain totaling $3.2 million which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

#### Loss on Sale of Interests in Unconsolidated Entities

During the six months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale.

#### Impairment of Real Estate Assets

During the six months ended June 30, 2025, the Company recognized an $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.

During the six months ended June 30, 2024, the Company recognized a $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.

#### Equity in Income (Loss) of Unconsolidated Entities

The increase in loss for the six months ended June 30, 2025 is driven by the recognition of $8.5 million of other-than-temporary impairment losses which was partially offset by an increase in income of $0.9 million from the Company’s investment in the UTC JV and a decrease of losses of $0.6 million related the Company’s other investments.

#### Interest and Other Income

For the six months ended June 30, 2025, interest and other income decreased by $0.4 million primarily due to lower interest rates.

#### Interest Expense

The decrease of $2.9 million in interest expense for the six months ended June 30, 2025 was driven by partial Term Loan Facility pay downs during 2024.

### Liquidity and Capital Resources

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 six months ended June 30, 2025 and the Company recorded net operating cash outflows of $21.2 million. Additionally, the Company generated net investing cash inflows of $46.1 million during the six months ended June 30, 2025, which were driven by asset sales and partially offset by development expenditures.

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:

- Sales of Consolidated Properties. We began our capital recycling program in July 2017 and have been monetizing assets since. In March of 2022, we elected to terminate our REIT status effective January 1, 2022 in order to remove any restrictions around asset sales. On October 24, 2022, we received shareholder approval of the Plan of Sale.
- We sold 90 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $986.8 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021;
- We sold 40 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $438.1 million of gross proceeds from December 31, 2021, the date we terminated our REIT status, through the approval of the Plan of Sale on October 24, 2022;
- From the approval of the Plan of Sale on October 24, 2022 through June 30, 2025, we sold 91 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.1 billion of gross proceeds.
- Sales of interests in Unconsolidated Properties. Certain of our unconsolidated entity agreements also include rights that allow us to sell our interests in select Unconsolidated Properties to our partners at fair market value;
- We sold our interests in 15 Unconsolidated Properties and generated approximately $278.1 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021;
- We sold our interests in 8 Unconsolidated Properties and generated approximately $84.8 million of gross proceeds since we terminated our REIT status on December 31, 2021, through the approval of the Plan of Sale on October 24, 2022;
- From the approval of the Plan of Sale on October 24, 2022 through June 30, 2025, we sold our interests in 12 Unconsolidated Properties and generated approximately $159.6 million of gross proceeds.
- Unconsolidated Properties. As of June 30, 2025, 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.

As of August 14, 2025, we had three assets under contract for sale for total anticipated proceeds of $109.8 million. One asset is a development asset and is subject to a pursuit of a master plan amendment and customary due diligence. All are subject to closing conditions.

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”).

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 I, Item I of this Quarterly Report on Form 10-Q) executed on June 16, 2022 provided exceptions to this right.

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.

During the six months ended June 30, 2025, we repaid $40.0 million against the principal of the Term Loan Facility. Our outstanding balance as of June 30, 2025, is $200.0 million.

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.

See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of liquidity and going concern.

### Cash Flows for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

The following table summarizes the Company’s cash flow activities for the six months ended June 30, 2025 and 2024, respectively (in thousands):

|  | Six Months Ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Net cash used in operating activities | $(21,234) | $(24,152) | $2,918 |
| Net cash provided by investing activities | 46,087 | 57,362 | (11,275) |
| Net cash used in financing activities | (42,432) | (82,395) | 39,963 |

#### Cash Flows from Operating Activities

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.

#### Cash Flows from Investing Activities

Significant components of net cash provided by investing activities include:

- 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; and
- In 2024, $83.0 million of net proceeds from the sale of real estate, offset by development of real estate of ($22.4) million and investments in unconsolidated entities of ($3.2) million.

#### Cash Flows from Financing Activities

Significant components of net cash used in financing activities include:

- In 2025, ($40.0) million cash repayment of Term Loan Facility principal and cash payments of preferred dividends of ($2.5) million; and
- In 2024, ($80.0) million cash repayment of Term Loan Facility principal and cash payments of preferred dividends of ($2.5) million.

#### Dividends and Distributions

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, 2025 and 2024, 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.

The Company’s Board of Trustees also declared the following dividends on the Company’s Series A Preferred Shares during 2025 and 2024:

| Declaration Date 2025 | Record Date | Payment Date | Series A Preferred Share |
| --- | --- | --- | ---: |
| July 23 | September 30 | October 15 | $0.43750 |
| May 8 | June 30 | July 15 | 0.43750 |
| February 26 | March 31 | April 15 | 0.43750 |
| **2024** |  |  |  |
| October 28 | December 31 | January 15, 2025 | $0.43750 |
| July 31 | September 30 | October 15 | 0.43750 |
| May 2 | June 28 | July 15 | 0.43750 |
| February 29 | March 29 | April 15 | 0.43750 |

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.

#### Off-Balance Sheet Arrangements

The Company accounts for its investments in entities that it does not have a controlling interest in or is not the primary beneficiary using 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 June 30, 2025 and December 31, 2024, we did not have any off balance sheet financing arrangements.

#### Contractual Obligations

There have been no significant changes in the contractual obligations disclosed in our Form 10-K for the year ended December 31, 2024.

#### Capital Expenditures

During the three and six months ended June 30, 2025, the Company invested $4.6 million and $17.9 million, respectively, in our consolidated properties. The Company also invested $0.4 million in our unconsolidated joint ventures during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, the Company invested $9.9 million and $22.4 million, respectively, in our consolidated properties and an additional $0.3 million and $3.2 million, respectively, in our unconsolidated joint ventures.

#### Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, we disclose the nature of the material contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

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 special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On February 13, 2025, the parties to the Sidhu Derivative Action and the Wallen Derivative Action filed a stipulation and proposed order seeking to consolidate the Sidhu Derivative Action and the Wallen Derivative Action and appoint lead counsel. The Company intends to vigorously defend itself against the allegations in these lawsuits.

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, the final outcome of such ordinary course legal proceedings and claims will not have a material effect on the condensed consolidated financial position, results of operations or liquidity of the Company.

See Note 9 – Commitments and Contingencies Litigation and Other Matters of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of the Litigation and related matters.

### Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2024 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the six months ended June 30, 2025, there were no material changes to these policies.

### Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI-cash basis and NOI-cash basis at share which are financial measures that include adjustments to GAAP.

#### Net Operating Income (Loss)-cash basis (“NOI”-cash basis) and Net Operating Income (Loss)-cash basis at share (“NOI-cash basis at share”)

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.

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

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.

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.

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.

### Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

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.

The following table reconciles NOI-cash basis and NOI-cash basis at share to GAAP net loss for the three and six months ended June 30, 2025 and 2024 (in thousands):

| NOI-cash basis and NOI-cash basis at share | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net loss | $(28,506) | $(101,227) | $(50,708) | $(120,212) |
| Management and other fee income | (127) | (50) | (269) | (98) |
| Depreciation and amortization | 2,040 | 1,212 | 4,115 | 6,483 |
| General and administrative expenses | 6,172 | 6,874 | 21,865 | 16,066 |
| Equity in (income) loss of unconsolidated entities | (756) | 566 | 7,172 | 187 |
| Loss on sale of interests in unconsolidated entities | 1,417 | - | 1,417 | - |
| Gain on sale of real estate, net | (1,967) | (2,034) | (8,903) | (3,173) |
| Impairment of real estate assets | 18,000 | 86,388 | 18,000 | 87,536 |
| Interest and other income (expense), net | (930) | (717) | (1,790) | (2,140) |
| Interest expense | 5,139 | 6,282 | 10,369 | 13,293 |
| (Benefit) provision for income taxes | 115 | 1,474 | (75) | 1,485 |
| Straight-line rent | (34) | 179 | 225 | 246 |
| Above/below market rental expense | 44 | 38 | 87 | 76 |
| NOI-cash basis | $607 | $(1,015) | $1,505 | $(251) |
| Unconsolidated entities (1) |  |  |  |  |
| Net operating income of unconsolidated entities (2) | 2,026 | 1,020 | 3,820 | 2,551 |
| Straight-line rent | (42) | (133) | (137) | (321) |
| Above/below market rental expense | (9) | (9) | (18) | (18) |
| NOI-cash basis at share | $2,582 | $(137) | $5,170 | $1,961 |

(1) Activity represents the Company’s proportionate share of unconsolidated entity activity.

(2) Net operating income of unconsolidated properties excludes depreciation and amortization, gains, losses and impairments and management and administrative costs.

## Market risk

As filed, 146 characters.

There were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in our 2024 Annual Report on Form 10-K.

## Controls and procedures

As filed, 899 characters.

### Evaluation of Disclosure Controls and Procedures

An evaluation was performed by our management under the supervision and with the participation of our principal executive officer (“PEO”) and principal financial officer (“PFO”) of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of June 30, 2025. Based on the evaluation, our PEO and PFO have concluded that our disclosure controls and procedures were effective as of June 30, 2025.

### Changes in Internal Controls over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 389 characters.

Please refer to Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 for a description of certain material risks and uncertainties to which our business, financial condition and results of operations are subject. There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-108985. Last ingested by Listed: Oct 27, 2026, 16:53 ET. No prices; not investment advice.