Seritage Growth Properties Reports First Quarter 2026 Operating Results

Key Terms

going concern financial

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

impairment charges financial

Impairment charges are one-time accounting write-downs taken when a company decides an asset — like a factory, brand, patent, or investment — is worth less than it was recorded for. Like marking down the price of a damaged item on a store shelf, they reduce reported profits and the asset’s book value; investors watch them because they can signal lasting business problems or change future earnings and balance-sheet strength.

other-than-temporary impairment financial

Other-than-temporary impairment is an accounting write-down taken when a company concludes that an asset—most often an investment or loan—has lost value that is unlikely to recover. For investors, it matters because the write-down reduces reported profits and the company’s net worth and can signal lasting credit or portfolio problems, similar to recognizing a car has been permanently damaged and selling it for much less.

class action lawsuit regulatory

A class action lawsuit is a single legal case filed by a group of people who claim they suffered similar harm from the same company or product, pooling resources to pursue the claim together like a neighborhood suing over a shared problem. It matters to investors because a class action can lead to large payouts, regulatory scrutiny, management distractions or reputational damage that may reduce a company’s profits and drive its stock price down.

derivative lawsuit regulatory

A derivative lawsuit is a legal claim brought by a shareholder on behalf of the company against insiders — typically directors or executives — who are accused of harming the company through misconduct or self-dealing. Think of it like a concerned owner suing a manager for breaking the rules to protect the business; investors care because such suits can lead to financial penalties, changes in leadership or governance, and swings in stock value as risks and liabilities are revealed or resolved.

cumulative redeemable preferred shares financial

Cumulative redeemable preferred shares are a type of stock that pays regular dividends which, if skipped, accumulate and must be paid later; think of it like an interest-bearing note where missed payments pile up. The redeemable feature means the issuer can (or sometimes must) buy the shares back at a preset price or date, so investors get a clearer path to getting their money back. These features matter because they provide steadier income than common stock and a higher claim on payouts, but they also carry the issuer’s repayment risk and limited upside.

term loan facility financial

A term loan facility is a type of loan provided by a lender that is repaid over a set period of time, usually with fixed payments. It functions like a large, upfront loan that a borrower agrees to pay back gradually, often used to fund major investments or projects. For investors, understanding a company's use of such loans helps assess its financial stability and risk level.

variable interest entities financial

A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.

NEW YORK--(BUSINESS WIRE)-- 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, 2026.

"We continue to advance discussions to refinance our remaining $50 million of corporate debt that matures at the end of July. We are furthering our exploration of the possibility of a strategic transaction while we simultaneously continue our efforts to monetize our remaining assets pursuant to our plan of sale,” said Adam Metz, CEO & President.

Q1 Sale Highlights:

• Received a distribution of $5.7 million from an unconsolidated entity as a result of the sale of a portion of the underlying property.
• Subsequent to March 31, 2026, generated $11.0 million in gross proceeds from the sale of one vacant/non-income producing asset.

Financial Highlights:

For the three months ended March 31, 2026:

• As of March 31, 2026, the Company had cash on hand of $58.8 million, including $14.3 million of restricted cash. As of May 14, 2026, the Company has cash on hand of $63.2 million, including $14.4 million of restricted cash.
• The Company invested $0.1 million in its consolidated properties and invested $2.4 million in its unconsolidated properties.
• The Company received distributions of $7.4 million from its unconsolidated properties.
• The Company recognized impairment charges of $15.2 million on one of its consolidated properties.
• The Company recorded an other-than-temporary impairment loss of $5.2 million on one of its unconsolidated entities.
• Net loss attributable to common shareholders of ($31.3) million, or ($0.56) per share.

Portfolio

The table below represents a summary of the Company’s properties as of March 31, 2026 (in thousands except number of leases and acreage data):

Planned Usage		Total		Built SF / Acreage (1)		Leased SF (1)(2)				% Leased		Avg. Acreage / Site
Consolidated
Multi-Tenant Retail		1		209 sf / 14 acres			175			83.6%			14.1
Residential (3)		2		33 sf / 19 acres			12			36.7%			9.5
Premier		2		8 sf / 38 acres			8			100.0%			18.6
Unconsolidated
Other Joint Ventures		2		93 sf / 28 acres			5			5.1%			14.2
Premier		3		158 sf / 55 acres			106			67.4%			18.2
(1) Square footage and acreage are presented at the Company’s proportional share.
(2) Based on signed leases at March 31, 2026.
(3) Square footage represents built ancillary retail space whereas acreage represents both retail and residential acreage. Retail and residential are counted separately.

Financial Summary

The table below provides a summary of the Company’s financial results for the three months ended March 31, 2026:

		Three Months Ended
		March 31, 2026				March 31, 2025
Net loss attributable to Seritage common shareholders		$	(31,543	)		$	(23,427	)
Net loss per share attributable to Seritage common shareholders			(0.56	)			(0.42	)

As of March 31, 2026, the Company had cash on hand of $58.8 million, including $14.3 million of restricted cash. Subsequent to the three months ended March 31, 2026, the Company sold one of its consolidated properties for aggregate gross proceeds of $11.0 million. The Company does not currently have any assets under contract with closings that are deemed probable. Our existing cash on hand will not allow the Company to fund its operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”) because the term loan facility, which matures on July 31, 2026, is presently a current Obligation. This uncertainty raises substantial doubt about the Company’s ability to continue as a going concern. 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.

Litigation Matters

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 “Securities Action”). 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 (the “Sidhu Derivative Action”). 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 (the “Wallen Derivative Action”). 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 “Cheroti Derivative Action”). 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 September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action (the “Consolidated Derivative Action”) and appointed lead counsel. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

Dividends

The Company's Board of Trustees has declared the following dividends on the preferred shares during 2026:

						Series A
Declaration Date		Record Date		Payment Date		Preferred Share
2026
April 20		June 30		July 15		$	0.43750
February 25		March 31		April 15			0.43750

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

The Company continues to face challenging market conditions, such as elevated interest rates and the availability of debt and equity capital, and it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues, and uncertainty caused by wars and the impacts thereof. While interest rates have started to decline, they remain high relative to interest rates in 2022. Additionally, raising equity capital for land development deals remains challenging. 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 including 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.

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,” “pro forma,” “believes,” “estimates,” “predicts,” “potential,” "will," "approximately," or "anticipates" 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; risks relating to redevelopment activities and disposition of properties; the process and results of the Company’s review of strategic alternatives and our Plan of Sale; to 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; competition and related challenges in the real estate and retail industries and the ability of the Company’s top tenants to successfully operate their businesses; 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; environmental, health, safety and land use laws and regulations; and possible acts of war, terrorist activity or other acts of violence or cybersecurity incidents. 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, 2025 and any subsequent Form 10-Qs. 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

Prior to the adoption of the Company’s Plan of Sale, Seritage was principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of March 31, 2026, the Company’s portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 154 acres of land. The portfolio encompasses five consolidated properties consisting of approximately 0.3 million square feet of GLA and 71 acres (such properties, the “Consolidated Properties”) and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 83 acres (such properties, the “Unconsolidated Properties”).

SERITAGE GROWTH PROPERTIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited)
		March 31, 2026				December 31, 2025
ASSETS
Investment in real estate
Land		$	20,808			$	25,406
Buildings and improvements			124,538				134,946
Accumulated depreciation			(15,278	)			(14,908	)
			130,068				145,444
Construction in progress			629				629
Net investment in real estate			130,697				146,073
Real estate held for sale			8,953				8,692
Investment in unconsolidated entities			144,102				156,242
Cash and cash equivalents			44,499				48,088
Restricted cash			14,315				14,197
Tenant and other receivables, net			3,750				3,665
Lease intangible assets, net			168				171
Prepaid expenses, deferred expenses and other assets, net			14,682				16,651
Total assets (1)		$	361,166			$	393,779
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Term loan facility, net		$	48,663			$	47,677
Accounts payable, accrued expenses and other liabilities			11,192				13,302
Total liabilities (1)			59,855				60,979
Commitments and Contingencies (Note 9)
Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 56,324,607 shares issued and outstanding as of March 31, 2026 and December 31, 2025			562				562
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025; liquidation preference of $70,000			28				28
Additional paid-in capital			1,362,719				1,362,719
Accumulated deficit			(1,063,436	)			(1,031,893	)
Total shareholders' equity			299,873				331,416
Non-controlling interests			1,438				1,384
Total equity			301,311				332,800
Total liabilities and equity		$	361,166			$	393,779
(1) The Company's condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The condensed consolidated balance sheets, as of March 31, 2026, include the following amounts related to our consolidated VIEs: $9.0 million included in real estate held for sale, $60.7 thousand of cash and $9.5 thousand of tenant and other receivables and $116.7 thousand of accounts payable, accrued expenses and other liabilities. The consolidated balance sheets, as of December 31, 2025, include the following amounts related to our consolidated VIEs: $8.7 million included in real estate held for sale, $9.9 thousand of cash, $9.5 thousand of tenant and other receivables and $74.5 thousand of accounts payable, accrued expenses and other liabilities.

SERITAGE GROWTH PROPERTIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
		For the Three Months Ended March 31,
		2026				2025
REVENUE
Rental income		$	1,909			$	4,457
Management and other fee income			141				142
Total revenue			2,050				4,599
EXPENSES
Property operating			1,461				2,908
Real estate taxes			333				953
Depreciation and amortization			400				2,075
General and administrative			5,292				15,693
Total expenses			7,486				21,629
Gain on sale of real estate, net			-				6,936
Impairment of real estate assets			(15,183	)			-
Equity in loss of unconsolidated entities			(7,167	)			(7,928	)
Interest and other income (expense), net			371				860
Interest expense			(2,903	)			(5,230	)
Loss before income taxes			(30,318	)			(22,392	)
Benefit from income taxes			-				190
Net loss			(30,318	)			(22,202	)
Preferred dividends			(1,225	)			(1,225	)
Net loss attributable to Seritage common shareholders		$	(31,543	)		$	(23,427	)
Net loss per share attributable to Seritage Class A common shareholders - Basic		$	(0.56	)		$	(0.42	)
Net loss per share attributable to Seritage Class A common shareholders - Diluted		$	(0.56	)		$	(0.42	)
Weighted-average Class A common shares outstanding - Basic			56,324				56,283
Weighted-average Class A common shares outstanding - Diluted			56,324				56,283

Properties sold during the three months ended March 31, 2026:

						Total				2026 Qtr
City		State		Full / Partial Sale		Built SF (1)				Sold
Alexandria		VA		Partial Site			-			Q1

 

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Seritage Growth Properties
(212) 355-7800
IR@Seritage.com

Source: Seritage Growth Properties