[8-K] Seritage Growth Properties Class A common shares of beneficial interest, par value $0.01 Reports Material Event

Rhea-AI Filing Summary

Office Properties Income Trust (Nasdaq: OPI) filed its Q2-25 Form 10-Q showing mounting financial stress. Rental income fell 7.4% YoY to $114.5 million and interest expense jumped 37% to $52.5 million, driving a net loss of $41.2 million versus a $76.2 million profit in Q2-24. For the six-month period, the loss reached $87.1 million. Same-store occupancy slipped to 81.2% and operating cash flow was just $3.8 million.

Liquidity and leverage are the key concerns. Cash and cash equivalents collapsed to $78.2 million from $261.3 million at 12/31/24, while the $325 million revolver is fully drawn and the $100 million term loan remains outstanding at SOFR + 350 bp (7.9%). Total debt is $2.37 billion (67% of assets) with $13 million maturing in 2025 and $277 million in 2026. Management states there is “substantial doubt” about OPI’s ability to continue as a going concern and is evaluating asset sales, further debt exchanges and equity issuance; a bankruptcy reorganisation is cited as a possible alternative if refinancing fails.

Capital actions: redeemed $171.6 million 4.5% notes, repaid $5.5 million secured debt and exchanged $21.0 million unsecured notes for $14.4 million 8.0% priority notes, cutting unsecured debt to $489 million. Issued 4.2 million shares via ATM for $1.1 million net. Sold three properties for $26.9 million (loss $4.6 million) and recorded a $2.4 million impairment; three more assets are under contract for $28.9 million. On 10 July 2025 the Board suspended the quarterly dividend (previously $0.01/share) to conserve cash.

Positive

• Unsecured debt reduced by $173 million through redemptions and exchanges, lowering 2025 maturities.
• Property dispositions generated $26.9 million of proceeds; additional $28.9 million under contract.
• Government tenants still supply 25% of annualized rent, supporting cash flow stability.

Negative

• Net loss of $41.2 million in Q2-25 versus prior-year profit.
• Rental income down 7.4% YoY and occupancy fell to 81.2%.
• Interest expense surged 37%, reflecting higher-cost refinancing.
• Cash balance fell 70% to $78 million; revolver fully drawn.
• Going-concern doubt disclosed; bankruptcy reorganisation mentioned as option.
• $290 million debt matures by end-2026 with limited refinancing options.
• Dividend suspended, eliminating income support for shareholders.

Insights

REIT Analyst

TL;DR: Cash is dwindling, leverage high and refinancing paths narrow; equity value hinges on successful asset sales or a restructuring.

OPI’s fundamentals deteriorated sharply this quarter. The YoY swing from $76 million profit to a $41 million loss is driven by falling rents, higher vacancies and a 270 bp rise in debt service costs. Cash burn is significant: unrestricted cash dropped 70% in six months while the revolver is maxed. The going-concern warning, coupled with a suspended dividend, effectively removes the REIT from income-oriented mandates and signals covenant pressure. Management’s liability-management moves (note redemptions and exchanges) reduce near-term unsecured maturities but at the cost of higher coupons (8-9% secured paper). Asset sales are small relative to the $2.1 billion secured debt stack and may be difficult in the current office market. Unless capital markets reopen, investors should anticipate dilutive equity issuance or a court-led restructuring.

false00016280630001628063us-gaap:CommonStockMember2025-07-282025-07-280001628063srg:Seven00SeriesACumulativeRedeemablePreferredSharesOfBeneficialInterestParValue001PerShareMember2025-07-282025-07-2800016280632025-07-282025-07-28

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2025

SERITAGE GROWTH PROPERTIES

(Exact name of Registrant as Specified in Its Charter)

Maryland			001-37420	38-3976287
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
500 Fifth Avenue, Suite 1530
New York, New York				10110
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: 212 355-7800

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common shares of beneficial interest, par value $0.01 per share		SRG		New York Stock Exchange
7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share		SRG-PA		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information described below under Item 8.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 8.01 Other Events.

As previously disclosed in Seritage Growth Properties’ (the “Company”) prior filings with the Securities and Exchange Commission, on November 20, 2024, Seritage Growth Properties L.P. (the “Operating Partnership”), the Company and Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) entered into an amendment (the “Amendment”) to the Senior Secured Term Loan Agreement by and among the Operating Partnership as borrower, the Company as parent and guarantor and Berkshire Hathaway as initial lender and administrative agent pursuant to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that the Senior Secured Term Loan Agreement may, at the Operating Partnership’s election, be extended for one year from July 31, 2025 (the “Prior Maturity Date”) to July 31, 2026 if the Operating Partnership pays a two percent (2%) extension fee on the then outstanding principal amount as of the Prior Maturity Date (the “Extension Fee”).

On July 28, 2025, the Operating Partnership exercised the extension option, extending the maturity date under the Senior Secured Term Loan Agreement to July 31, 2026, and on July 30, 2025, the Operating Partnership paid Berkshire Hathaway the Extension Fee of $4,000,000 and the Incremental Facility Fee of $4,000,000 in accordance with the terms of the Senior Secured Term Loan Agreement. All other terms under the Senior Secured Term Loan Agreement shall remain unchanged during the extension period.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	July 30, 2025	By:	/s/Matthew Fernand
			Matthew Fernand Chief Legal Officer and Corporate Secretary

FAQ

Why did OPI report a net loss in Q2 2025?

Lower rental income, higher operating costs and a 37% increase in interest expense resulted in a $41.2 million quarterly loss.

What is OPI’s current liquidity position?

As of 30 June 2025 OPI held $78.2 million cash; total available liquidity on 30 July 2025 was $90.1 million including cash only.

How much debt matures in the near term for OPI?

Principal repayments are $13 million in 2025 and $277 million in 2026, with the $325 million revolver due January 2027.

Has OPI changed its dividend policy?

Yes. On 10 July 2025 the Board suspended the quarterly $0.01 dividend to preserve cash.

What strategies is management pursuing to address refinancing risk?

OPI is working with Moelis & Co. on asset sales, debt exchanges and potential equity issuance; bankruptcy is mentioned if these fail.