Seritage Growth Properties Reports Third Quarter 2025 Operating Results
Seritage Growth Properties (NYSE: SRG), a national owner and developer of retail, residential, and mixed-use properties, today announced its financial and operational results for the three and nine months ended September 30, 2025.
Adam Metz, CEO and President of Seritage Growth Properties, commented, “We continue to make meaningful progress across our various asset sale initiatives. While there is no guarantee of completion, we currently anticipate near-term closings for all three assets under contract with no due diligence contingencies. If these transactions are completed, they would allow us to make a significant prepayment on our Term Loan Facility principal balance before year-end.”
Q3 2025 Sale Highlights
As of November 13, 2025, Seritage Growth Properties has four assets under contract with total anticipated gross proceeds of approximately $240.8 million before applicable credits and costs. Of these, three assets are under contract with no due diligence contingencies, representing anticipated gross proceeds of $170.0 million. One asset remains subject to a due diligence contingency with projected gross proceeds of $70.8 million. All sales remain subject to customary closing conditions.
The assets under contract include:
- Income-producing asset: Anticipated gross proceeds of $28.5 million, reflecting a 7.4% capitalization rate.
- Non-stabilized premier income-producing asset: Anticipated gross proceeds of $131.0 million.
- Vacant/non-income-producing asset: Anticipated gross proceeds of $10.5 million, eliminating $0.1 million in carrying costs.
- Premier development asset: Anticipated gross proceeds of $70.8 million, subject to a long-dated closing and pursuit of a master plan amendment.
In addition, the Company is negotiating definitive purchase and sale agreements on three joint venture assets, which would result in anticipated gross distributions of approximately $47.3 million. These negotiations involve various closing conditions, credits, costs, and timelines.
Financial Highlights
For the three months ended September 30, 2025:
- As of September 30, 2025, the Company held $59.9 million in cash, including $8.3 million of restricted cash. By November 13, 2025, cash on hand had increased to $65.0 million, including $8.3 million in restricted funds.
- During Q3, the Company invested $3.8 million in its consolidated properties, primarily for tenant leasing costs, and received $2.1 million in distributions from unconsolidated properties.
- On July 28, 2025, Seritage exercised an extension option on its Term Loan Facility and paid a 2% extension fee of $4.0 million on the $200 million outstanding balance, extending the loan maturity to July 31, 2026. An additional incremental facility fee of $4.0 million was also paid. All other terms, including interest rates, remained unchanged during the extension period.
- The Company recognized an impairment charge of $0.8 million on consolidated properties.
- Net loss attributable to common shareholders for the quarter totaled $13.6 million, or $0.24 per share.
- Net Operating Income—cash basis at share (“NOI-cash basis at share”) was $1.6 million.
For the nine months ended September 30, 2025:
- Seritage invested $21.8 million in its consolidated properties and $0.4 million in unconsolidated properties, primarily related to tenant leasing costs.
- The Company received $9.6 million in distributions from unconsolidated properties.
- Principal repayments of $40.0 million were made on the Term Loan Facility.
- Impairment charges of $18.8 million were recognized on consolidated properties.
- Net loss attributable to common shareholders totaled $66.8 million, or $1.19 per share.
- NOI-cash basis at share amounted to $6.8 million.
Dividends
Seritage Growth Properties continued its preferred stock dividend payments in 2025:
- February 26: Declared $0.4375 per Series A Preferred Share, paid on April 15.
- May 8: Declared $0.4375 per Series A Preferred Share, paid on July 15.
- July 23: Declared $0.4375 per Series A Preferred Share, paid on October 15.
- October 29: Declared $0.4375 per Series A Preferred Share, payable on January 15, 2026.
Strategic Review
At its 2022 Annual Meeting, Seritage shareholders approved the Company’s Plan of Sale. The strategic review remains ongoing, with management continuing to pursue value-maximizing alternatives, including a potential sale of the Company. While no assurances can be given regarding the success of the process, the Company remains focused on executing the Plan of Sale.
Market Update
Seritage continues to navigate challenging market conditions, including elevated interest rates, constrained availability of debt and equity capital, and potential macroeconomic impacts such as supply chain disruptions, tariffs, and labor constraints. Although interest rates have begun to decline, they remain high relative to 2022, making capital raising for land development projects difficult. These factors may exert downward pressure on the pricing of remaining assets and influence the timing and amounts of future shareholder distributions.
Non-GAAP Financial Measures
The Company reports certain non-GAAP measures, including NOI-cash basis and NOI-cash basis at share. These measures adjust for items such as straight-line rent, amortization of lease intangibles, and termination fee income. While useful for assessing property-level operating performance, they do not represent cash flow from operations under GAAP, nor should they be viewed as alternatives to net income. Reconciliations to GAAP measures are provided in accompanying tables.
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