Seritage Growth Properties (NYSE: SRG) (the “Company”), a
national owner and developer of retail, residential and mixed-use
properties today reported financial and operating results for the
three months ended March 31, 2023.
“We continue to make steady progress on our plan of sale since
initiating the process in March of 2022. Year to date we have sold
31 wholly owned properties for total gross proceeds of $311.9
million. In addition to the sales closed year to date, we have over
$500 million of assets either under contract or with accepted
offers. We plan to continue to use excess sales proceeds to reduce
the Company’s term loan balance. In conjunction with our sales
activity, we continue to build asset value through leasing,
development and entitlement activity for the properties slated for
sale later in our process. Despite the ongoing challenging market
conditions, we are prudently progressing our plan of sale to
maximize value for our shareholders,” said Andrea L. Olshan, Chief
Executive Officer and President.
Sale Highlights:
- Generated $290.8 million of gross proceeds during the quarter
ended March 31, 2023 from the sale of 27 wholly owned or
consolidated assets.
- Subsequent to quarter end, generated $21.1 million of gross
proceeds from the sale of four wholly owned assets.
- The Company has 15 assets under contract for sale with no due
diligence contingencies for total anticipated proceeds of $295.6
million and four assets under contract for sale subject to
customary due diligence for total anticipated proceeds of $37.9
million. All assets for sale are subject to customary closing
conditions.
- The Company has exercised its put rights on four joint venture
properties with anticipated proceeds of $106.5 million.
- The Company has accepted offers on and is currently negotiating
definitive purchase and sale agreements for assets with accepted
offers of approximately $67.7 million on wholly owned assets and
$35 million in joint ventures interests.
Financial Highlights:
For the quarter ended March 31, 2023:
- As of March 31, 2023, the Company had cash on hand of $132.1
million, including $11.6 million of restricted cash. As of May 8,
2023, the Company had cash on hand of $143.5 million, including
$11.6 million of restricted cash.
- Net loss attributable to common shareholders of ($63.2)
million, or ($1.13) per share.
- Total Net Operating Income (“Total NOI”) of $3.1 million.
- During the quarter, the Company made $230 million in principal
repayments on the Company’s term loan facility (“Term Loan
Facility”), reducing the balance of the Term Loan Facility to $800
million. The Company also extended the maturity of the Term Loan
Facility for an additional two years to July 31, 2025.
Other Highlights
- Signed three leases covering 84 thousand square feet in the
first quarter at an average projected annual rent of $16.33 PSF.
- One new lease covering approximately eight thousand square feet
at a Premier asset at an average projected annual net rent of
$71.25 PSF; and
- Two ground floor leases covering approximately 76 thousand
square feet at a Multi-Tenant Retail asset at an average projected
annual net rent of $10.54 PSF.
- Opened seven tenants in the first quarter totaling
approximately 139 thousand square feet (70 thousand square feet at
share) at an average net rent of $67.47 PSF.
Sales Activity
The tables below provide additional information regarding the
Company’s sales activity. The first table provides in chart format
certain information contained in the Company’s April 4, 2023
business update. The second table updates this information as of
May 9, 2023. The third table provides updated information, as of
May 9, 2023, on portfolio status by market, property type and
transaction size consistent with the Company’s prior disclosure on
April 4, 2023.
Sales Progress as of April 4,
2023 (1)
Stabilized
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Under Contract - No DD
2
7.2
%
2
-
$
36,650
Under Contract - In DD
1
8.6
%
1
-
$
25,313
PSA Neg. / Accepted Offer
1
9.2
%
1
-
$
10,400
Total
4
8.0
%
4
-
$
72,363
Remaining Stabilized Sales
Parcels
5
2
3
Partially Stabilized
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Under Contract - No DD
4
7.6
%
4
-
$
115,850
Under Contract - In DD
-
N/A
-
-
$
-
PSA Neg. / Accepted Offer
1
4.0
%
1
-
$
7,600
Total
5
7.5
%
5
-
$
123,450
Remaining Partially Stabilized Sales
Parcels
7
2
5
Pads
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Under Contract - No DD
-
N/A
-
-
$
-
Under Contract - In DD
2
5.7
%
2
-
$
7,015
PSA Neg. / Accepted Offer
-
N/A
-
-
$
-
Total
2
5.7
%
2
-
$
7,015
Remaining Pad Sales Parcels
3
3
-
Joint Ventures
Number
PSF
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Under Contract - No DD
4
$
171.52
4
-
$
104,850
Under Contract - In DD
-
N/A
-
-
$
-
PSA Neg. / Accepted Offer
1
$
38.75
1
-
$
4,500
Total
5
$
150.32
5
-
$
109,350
Remaining Joint Venture Sales
Parcels
10
2
8
Non-Income Producing
Number
PSF
Per Acre
Carry Cost
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Under Contract - No DD
9
$
128.06
$
1,277
$
(5,019
)
9
-
$
155,375
Under Contract - In DD
2
$
38.92
$
491
$
(854
)
2
-
$
11,000
PSA Neg. / Accepted Offer
7
$
33.81
$
453
$
(1,811
)
7
-
$
42,489
Total
18
$
75.87
$
878
$
(7,683
)
18
-
$
208,864
Remaining Non-Income Producing Sales
Parcels
19
9
10
Sales Progress as of May 9,
2023 (1)
Stabilized
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Closed since April 4, 2023
-
N/A
-
-
$
-
Under Contract - No DD
2
7.2%
2
-
$
36,650
Under Contract - In DD
1
9.2%
1
-
$
10,400
PSA Neg. / Accepted Offer
-
N/A
-
-
$
-
Total
3
7.6%
3
-
$
47,050
Remaining Stabilized Sales Parcels
(2)
6
4
2
Partially Stabilized
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Closed since April 4, 2023
-
N/A
-
-
$
-
Under Contract - No DD
4
7.6%
4
-
$
115,850
Under Contract - In DD
1
3.0%
1
-
$
16,500
PSA Neg. / Accepted Offer
2
4.3%
2
-
$
14,600
Total
7
6.9%
7
-
$
146,950
Remaining Partially Stabilized Sales
Parcels
5
2
3
Pads
Number
Cap
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Closed since April 4, 2023
-
N/A
-
-
$
-
Under Contract - No DD
2
5.7%
2
-
$
7,015
Under Contract - In DD
-
N/A
-
-
$
-
PSA Neg. / Accepted Offer
1
5.3%
1
-
$
2,857
Total
3
5.5%
3
-
$
9,872
Remaining Pad Sales Parcels
2
2
-
Joint Ventures
Number
PSF
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Closed since April 4, 2023
$
-
Under Contract - No DD
4
$
174.24
4
-
$
106,515
Under Contract - In DD
-
N/A
-
-
$
-
PSA Neg. / Accepted Offer
4
$
44.63
4
-
$
35,000
Total
8
$
101.40
8
-
$
141,515
Remaining Joint Venture Sales
Parcels
7
2
5
Non-Income Producing
Number
PSF
Per Acre
Carry Cost
2023 Sales
2024 & Beyond
Sales
Gross Proceeds
Closed since April 4, 2023
4
$
33.77
$
457
$
(1,601
)
4
-
$
21,125
Under Contract - No DD (3)
7
$
142.25
$
1,481
$
(4,200
)
5
2
$
136,055
Under Contract - In DD
2
$
38.92
$
491
$
(854
)
2
-
$
11,000
PSA Neg. / Accepted Offer
8
$
41.81
$
491
$
(2,392
)
6
2
$
50,239
Total
21
$
74.13
$
831
$
(9,047
)
17
4
$
218,419
Remaining Non-Income Producing Sales
Parcels
16
7
9
(1) 2023 and 2024 sales projections are based on the Company’s
latest forecasts and assumptions, but the Company cautions that
actual results may differ materially
(2) Remaining Stabilized Sales Parcels includes one asset under
contract as of April 4, 2023 that was subsequently terminated
(3) Gross sales price per square foot excludes one asset which
is land only
As of January 1, 2023
2023 Sales Projections as of
May 9, 2023
2024 & Beyond Sales
Projections as of May 9, 2023
Category
Sales Portfolio
Sold
Under Contract - No DD
Under Contract - in DD
PSA Neg. / Accepted
Offer
Pipeline
Under Contract - No DD
PSA Neg. / Accepted
Offer
Pipeline
Gateway markets
11
-
1
-
-
-
1
-
9
Primary markets
43
11
8
1
4
11
1
-
7
Secondary markets
35
14
6
1
7
3
-
1
3
Tertiary markets
16
6
2
2
2
3
-
1
-
Market Composition Total
105
31
17
4
13
17
2
2
19
Multi-Tenant Retail
32
18
6
1
-
4
-
-
3
Premier
10
-
1
-
-
-
1
-
8
Residential
5
2
1
-
-
-
-
-
2
Other Unconsolidated Entities
13
-
3
-
4
2
-
-
4
Non-Core Properties
45
11
6
3
9
11
1
2
2
Property Type Total
105
31
17
4
13
17
2
2
19
Under $10M
57
20
5
2
10
12
-
2
6
$10M - $30M
29
10
8
2
3
3
1
-
2
$30M - $50M
11
1
2
-
-
2
1
-
5
Over $50M
8
-
2
-
-
-
-
-
6
Transaction Size Total
105
31
17
4
13
17
2
2
19
(1) 2023 and 2024 sales projections are based on the Company’s
latest forecasts and assumptions, but the Company cautions that
actual results may differ materially.
(2) Includes both partial and full asset transactions currently
being forecasted by Seritage. At January 1, 2023, the Company had
an interest in 97 properties. It is currently projected that seven
of these properties will be parceled and sold in two or more
separate transactions each, which is subject to change, resulting
in a total portfolio count of 105 transactions at this time.
Portfolio
The table below represents a summary of the Company’s properties
by planned usage as of March 31, 2023:
(in thousands except number of leases and acreage data)
Planned Usage
Total
Built SF / Acreage (1)
Leased SF (1)(2)
Avg. Acreage / Site
Consolidated
Multi-Tenant Retail
13
2,019 sf / 198 acres
1,534
15.2
Residential (3)
2
33 sf / 19 acres
33
9.5
Premier
5
235 sf / 99 acres
163
19.7
Non-Core (4)
35
5,292 sf / 428 acres
325
12.2
Unconsolidated
Other Entities
13
1,106 sf / 185 acres
278
14.2
Residential (3)
1
49 sf / 12 acres
32
11.7
Premier
3
158 sf / 57 acres
106
19.0
(1) Square footage is presented at the Company’s proportional
share.
(2) Based on signed leases at March 31, 2023.
(3) Square footage represents built ancillary retail space
whereas acreage represents both retail and residential acreage.
(4) Represents assets the Company previously designated for
sale.
Multi-Tenant Retail
During the three months ended March 31, 2023, the Company
invested $4.1 million in its multi-tenant retail properties. The
remaining capital expenditures in the multi-tenant retail portfolio
are primarily comprised of tenant improvements.
The table below provides a summary of all Multi-Tenant Retail
signed leases as of March 31, 2023, including unconsolidated
entities at the Company’s proportional share:
(in thousands except number of leases and
PSF data)
Number of
Leased
% of Total
Gross Annual Base
% of
Gross Annual
Tenant
Leases
GLA
Leasable GLA
Rent ("ABR")
Total ABR
Rent PSF ("ABR PSF")
In-place retail leases
55
1,374
68.1
%
$
30,014
90.7
%
$
21.84
SNO retail leases (1)
9
160
7.9
%
3,085
9.3
%
19.28
Total retail leases
64
1,534
76.0
%
$
33,099
100.0
%
$
21.58
(1) SNO = signed not yet opened
leases.
During the three months ended March 31, 2023, the Company signed
new leases at its retail properties totaling approximately 76
thousand square feet at an average base rent of $10.54 PSF
stabilized net. Additionally, the Company generated a leasing
pipeline of over 100 thousand square feet. The Company has 1.4
million leased square feet and approximately 160 thousand square
feet signed but not opened. Seritage has total occupancy of 76.0%
for its multi-tenant retail properties. As of March 31, 2023, there
is an additional approximately 484 thousand square feet available
for lease.
(in thousands except number of leases and
PSF data)
Number of SNO Leases
GLA
ABR
Annual Rent PSF
As of December 31, 2022
15
141
$
3,355
$
23.79
Sold / terminated
(8
)
(58
)
(1,071
)
18.47
Signed
2
76
801
10.54
As of March 31, 2023
9
159
$
3,085
$
19.28
Premier Mixed-Use
The Company has three premier mixed-use projects in the active
leasing/tenant opening stage: Aventura, FL, Santa Monica, CA and
San Diego, CA. As of March 31, 2023, the Company has 205 thousand
in-place leased square feet (112 thousand square feet at share),
171 thousand square feet signed but not opened (157 thousand square
feet at share), and 175 thousand square feet available for lease
(124 thousand square feet at share).
The table below provides a summary of all signed leases at
Premier assets as of March 31, 2023, including unconsolidated
entities at the Company’s proportional share:
Number of
Leased
% of Total
Net Annual
% of Total
Net Annual
Tenant
Leases
GLA
Leasable GLA
Base Rent
Annual Rent
Rent PSF
In-place retail leases
22
50
12.8
%
$
3,215
17.6
%
$
64.30
In-place office leases
1
62
15.7
%
4,220
23.2
%
68.06
SNO retail leases as of December 31,
2022(1)
27
111
8,612
77.59
Opened
(6
)
(8
)
(503
)
62.88
Signed
1
8
570
71.25
SNO retail leases as of March 31,
2023(1)
22
111
28.2
%
8,679
47.6
%
78.19
SNO office leases as of December 31,
2022(1)
4
108
$
6,329
58.60
Opened
(1
)
(62
)
$
(4,220
)
68.06
SNO retail leases as of March 31,
2023(1)
3
46
11.8
%
$
2,109
11.6
%
45.85
Total diversified leases as of March
31, 2023
48
270
68.5
%
$
18,223
100.0
%
$
67.49
(1) SNO = Signed not yet opened leases
(2) In thousands except number of leases
and PSF data
During the three months ended March 31, 2023, the Company
invested $27.2 million in its consolidated development and
operating properties and an additional $2.8 million into its
unconsolidated entities.
Aventura
During the first quarter of 2023, the Company continued to
advance 216 thousand square feet of office and retail leasing at
the project in Aventura, FL. The Company is finalizing construction
on the asset and remains on track to open its first tenants to the
public in the second quarter of 2023, with rolling openings
thereafter.
During the quarter ended March 31, 2023, the Company signed one
new lease totaling eight thousand square feet at an average base
rent of $71.25 PSF stabilized net and has 144 thousand square feet
signed but not opened. With occupancy at 66.6%, the Company has 72
thousand square feet available for lease, of which one thousand
square feet is in lease negotiation and has leasing activity on
over an additional 71 thousand square feet.
Financial Summary
The table below provides a summary of the Company’s financial
results for the three months ended March 31, 2023:
(in thousands except per share
amounts)
Three Months Ended
March 31, 2023
March 31, 2022
Net loss attributable to Seritage
common shareholders
$
(63,211
)
$
(53,430
)
Net loss per share attributable to
Seritage common shareholders
(1.13
)
(1.22
)
Total NOI
3,104
10,493
For the quarter ended March 31, 2023:
- Total NOI for the first quarter of 2023 reflects the impact of
$0.5 million Total NOI relating to sold properties.
Total NOI is comprised of:
(in thousands)
Three Months Ended March
31,
Consolidated Properties
2023
2022
Multi-tenant retail
$
6,432
$
6,205
Premier
(1,441
)
(1,400
)
Residential
(735
)
(717
)
Non-Core
(2,317
)
(687
)
Sold
(352
)
5,568
Total
1,587
8,969
Unconsolidated Properties
Residential
9
(289
)
Premier
331
(209
)
Other joint ventures
1,177
2,022
Total
1,517
1,524
Total NOI
$
3,104
$
10,493
As of March 31, 2023, the Company had cash on hand of $132.1
million, including $11.6 million of restricted cash. The Company
expects to use these sources of liquidity, together with a
combination of future sales and/or potential debt and capital
markets transactions, to pay its financing obligations and fund its
operations and development activity. The availability of funding
from sales of assets, partnerships and credit or capital markets
transactions is subject to various conditions, and there can be no
assurance that such transactions will be consummated. For more
information on our liquidity position, including our going concern
analysis, please see the notes to the consolidated financial
statements included in Part I, Item 1 and in the section titled
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” each in our Quarterly Report on Form
10-Q.
Dividends
On February 15, 2023, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend was be paid on April 17, 2023 to
holders of record on March 31, 2023.
On April 27, 2023, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend will be paid on July 14, 2023 to
holders of record on June 30, 2023.
The Company’s Board of Trustees does not expect to declare
dividends on its common shares until such time as the Term Loan
Facility has been repaid in full.
Strategic Review
At the 2022 Annual Meeting of Shareholders on October 24, 2022,
Seritage shareholders approved the Company’s 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 regarding the success of the
process.
Market Update
As the Company has previously disclosed, the Company, along with
the commercial real estate market as a whole, has experienced and
continues to experience progressively more challenging market
conditions as a result of a variety of factors. These conditions
have applied and continue to apply downward pricing pressure on all
of our assets. In making decisions regarding whether and when to
transact on each of the Company’s remaining assets, the Company
will consider 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 impact the Plan of Sale proceeds from our assets and the
amounts and timing of distributions to shareholders.
D&O Insurance
Litigation
On March 2, 2021, the Company brought a lawsuit in Delaware
state court against QBE Insurance Corporation, Endurance American
Insurance Company, Allianz Global Risks US Insurance Company and
Continental Casualty Company, each of which are D&O insurance
providers of the Company (the “D&O Insurers”). The Company’s
lawsuit sought, among other things, declaratory relief and money
damages as a result of certain of the D&O Insurers refusal to
pay certain costs and expenses related to the defense of the Sears
Bankruptcy Litigation. During the fourth quarter of 2022, the
Company reached settlement agreements with two of the D&O
Insurers and received gross proceeds of $12.7 million. During the
three months ended March 31, 2023, the Company reached settlement
agreements with the other two D&O Insurers for gross proceeds
of $11.6 million. The Company received $3.8 million during the
three months ended March 31, 2023, which is recorded in interest
and other income in the consolidated statements of operations and
received $7.8 million subsequent to March 31, 2023.
Supplemental Report
A Supplemental Report will be available in the Investors section
of the Company’s website, www.seritage.com.
Non-GAAP Financial
Measures
The Company makes references to NOI and Total NOI which are
financial measures that include adjustments to accounting
principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI 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
the Company deems most comparable have been provided in the tables
accompanying this press release.
Net Operating Income ("NOI”) and Total
NOI
NOI is defined as income from property operations less property
operating expenses. Other real estate companies may use different
methodologies for calculating NOI, and accordingly the Company’s
depiction of NOI may not be comparable to other real estate
companies. The Company believes NOI 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 Total NOI, which includes its proportional
share of unconsolidated properties. This form of presentation
offers insights into the financial performance and condition of the
Company as a whole given the Company’s ownership of unconsolidated
properties that are accounted for under GAAP using the equity
method.
The Company also considers NOI and Total NOI 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.
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 statements by the use of
forward-looking terminology such as “may,” “should,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” or “potential” or the negative of these words and
phrases or similar words or phrases that are predictions of or
indicate future events or trends and that do not relate solely to
historical matters. Forward-looking statements involve known and
unknown risks, uncertainties, assumptions and contingencies, many
of which are beyond the Company’s control, which may cause actual
results to differ significantly from those expressed in any
forward-looking statement. Factors that could cause or contribute
to such differences include, but are not limited to: declines in
retail, real estate and general economic conditions; the impact of
the COVID-19 pandemic on the business of the Company’s tenants and
business, income, cash flow, results of operations, financial
condition, liquidity, prospects, ability to service the Company’s
debt obligations and ability to pay dividends and other
distributions to shareholders; risks relating to redevelopment
activities; contingencies to the commencement of rent under leases;
the terms of the Company’s indebtedness and other legal
requirements to which the Company is subject; failure to achieve
expected occupancy and/or rent levels within the projected time
frame or at all; the impact of ongoing negative operating cash flow
on the Company’s ability to fund operations and ongoing
development; the Company’s ability to access or obtain sufficient
sources of financing to fund the Company’s liquidity needs; the
Company’s relatively limited history as an operating company; and
environmental, health, safety and land use laws and regulations.
For additional discussion of these and other applicable risks,
assumptions and uncertainties, see the “Risk Factors” and
forward-looking statement disclosure contained in the Company’s
filings with the Securities and Exchange Commission, including the
Company’s annual report on Form 10-K for the year ended December
31, 2022. While the Company believes that its forecasts and
assumptions are reasonable, the Company cautions that actual
results may differ materially. The Company intends the
forward-looking statements to speak only as of the time made and do
not undertake to update or revise them as more information becomes
available, except as required by law.
About Seritage Growth
Properties
Seritage is principally engaged in the ownership, development,
redevelopment, management and leasing of retail and mixed-use
properties throughout the United States. As of March 31, 2023, the
Company’s portfolio consisted of interests in 72 properties
comprised of approximately 10.2 million square feet of gross
leasable area (“GLA”) or build-to-suit leased area, approximately
157 acres held for or under development and approximately 5.3
million square feet or approximately 428 acres to be disposed of.
The portfolio consists of approximately 7.6 million square feet of
GLA held by 55 wholly owned properties (such properties, the
“Consolidated Properties”) and 2.6 million square feet of GLA held
by 17 unconsolidated entities (such properties, the “Unconsolidated
Properties”).
SERITAGE GROWTH
PROPERTIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share amounts)
(Unaudited)
March 31, 2023
December 31, 2022
ASSETS
Investment in real estate
Land
$
154,807
$
172,813
Buildings and improvements
464,586
463,616
Accumulated depreciation
(55,347
)
(57,330
)
564,046
579,099
Construction in progress
157,824
185,324
Net investment in real estate
721,870
764,423
Real estate held for sale
245,894
455,617
Investment in unconsolidated entities
353,919
382,597
Cash and cash equivalents
120,476
133,480
Restricted cash
11,576
11,459
Tenant and other receivables, net
25,982
41,495
Lease intangible assets, net
1,615
1,791
Prepaid expenses, deferred expenses and
other assets, net
35,041
50,859
Total assets (1)
$
1,516,373
$
1,841,721
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Term loan facility, net
$
799,859
$
1,029,754
Accounts payable, accrued expenses and
other liabilities
58,559
89,368
Total liabilities (1)
858,418
1,119,122
Commitments and contingencies (Note 9)
Shareholders' Equity
Class A common shares $0.01 par value;
100,000,000 shares authorized; 56,059,530 and
56,052,546 shares issued and outstanding as of
March 31, 2023 and December 31, 2022, respectively
561
561
Series A preferred shares $0.01 par value;
10,000,000 shares authorized; 2,800,000 shares
issued and outstanding as of March 31, 2023 and
December 31, 2022; liquidation preference of
$70,000
28
28
Additional paid-in capital
1,360,060
1,360,411
Accumulated deficit
(703,742
)
(640,531
)
Total shareholders' equity
656,907
720,469
Non-controlling interests
1,048
2,130
Total equity
657,955
722,599
Total liabilities and shareholders'
equity
$
1,516,373
$
1,841,721
(1) The Company's consolidated balance
sheets include assets and liabilities of consolidated variable
interest entities ("VIEs"). See Note 2. The consolidated balance
sheets, as of March 31, 2023, include the following amounts related
to our consolidated VIEs, excluding the Operating Partnership: $3.3
million of land, $2.8 million of building and improvements, $(0.7)
million of accumulated depreciation and $3.4 million of other
assets included in other line items. The Company's consolidated
balance sheets as of December 31, 2022, include the following
amounts related to our consolidated VIEs, excluding the Operating
Partnership: $6.6 million of land, $3.9 million of building and
improvements, $(1.0) million of accumulated depreciation and $4.0
million of other assets included in other line items.
SERITAGE GROWTH
PROPERTIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended March
31,
2023
2022
REVENUE
Rental income
$
418
$
29,084
Management and other fee income
262
1,821
Total revenue
680
30,905
EXPENSES
Property operating
8,185
11,032
Real estate taxes
1,537
8,150
Depreciation and amortization
4,564
11,934
General and administrative
12,220
9,092
Total expenses
26,506
40,208
Gain (loss) on sale of real estate,
net
12,392
(1,015
)
Impairment of real estate assets
(2,576
)
(991
)
Equity in loss of unconsolidated
entities
(36,372
)
(33,076
)
Interest and other income
5,585
11
Interest expense
(15,202
)
(22,588
)
Loss before income taxes
(61,999
)
(66,962
)
Benefit (provision) for income taxes
13
(25
)
Net loss
(61,986
)
(66,987
)
Net loss attributable to non-controlling
interests
—
14,782
Net loss attributable to Seritage
$
(61,986
)
$
(52,205
)
Preferred dividends
(1,225
)
(1,225
)
Net loss attributable to Seritage common
shareholders
$
(63,211
)
$
(53,430
)
Net loss per share attributable to
Seritage Class A common shareholders - Basic
$
(1.13
)
$
(1.22
)
Net loss per share attributable to
Seritage Class A common shareholders -
Diluted
$
(1.13
)
$
(1.22
)
Weighted average Class A common shares
outstanding - Basic
56,059
43,634
Weighted average Class A common shares
outstanding - Diluted
56,059
43,634
Reconciliation of Net Loss to NOI and
Total NOI (in thousands)
Three Months Ended March
31,
NOI and Total NOI
2023
2022
Net loss
$
(61,986
)
$
(66,987
)
Termination fee income
—
(277
)
Management and other fee income
(262
)
(1,821
)
Depreciation and amortization
4,564
11,934
General and administrative expenses
12,220
9,092
Equity in loss of unconsolidated
entities
36,372
33,076
(Gain) loss on sale of real estate,
net
(12,392
)
1,015
Impairment of real estate assets
2,576
991
Interest and other income
(5,585
)
(11
)
Interest expense
15,202
22,588
(Benefit) provision for income taxes
(13
)
25
Straight-line rent
10,843
(721
)
Above/below market rental expense
48
65
NOI
$
1,587
$
8,969
Unconsolidated entities
Net operating income of unconsolidated
entities
1,659
1,846
Straight-line rent
(147
)
(328
)
Above/below market rental expense
5
6
Total NOI
$
3,104
$
10,493
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006215/en/
Seritage Growth Properties (212) 355-7800 IR@Seritage.com
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