Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number 001-37420

SERITAGE GROWTH PROPERTIES

(Exact name of registrant as specified in its charter)


Maryland	38-3976287
(State of Incorporation)	(I.R.S. 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

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


Title of each class	Trading Symbols	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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2024, the registrant had the following common shares outstanding:


Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	56,268,317
Class B common shares of beneficial interest, par value $0.01 per share	0
Class C common shares of beneficial interest, par value $0.01 per share	0

SERITAGE GROWTH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED March 31, 2024

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION
		Page

Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	35

Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

SIGNATURES		38

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share and per share amounts)


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	72,562		$	102,090
Buildings and improvements		300,148			344,972
Accumulated depreciation		(31,514	)		(36,025	)
		341,196			411,037
Construction in progress		132,210			135,305
Net investment in real estate		473,406			546,342
Real estate held for sale		75,574			39,332
Investment in unconsolidated entities		199,810			196,437
Cash and cash equivalents		114,875			134,001
Restricted cash		15,883			15,699
Tenant and other receivables, net		9,907			12,246
Lease intangible assets, net		191			886
Prepaid expenses, deferred expenses and other assets, net		24,922			28,921
Total assets (1)	$	914,568		$	973,864

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Term loan facility, net	$	330,000		$	360,000
Accounts payable, accrued expenses and other liabilities		40,970			50,700
Total liabilities (1)		370,970			410,700

Commitments and contingencies (Note 9)

Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 56,262,944 and 56,194,727 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		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, 2024 and December 31, 2023; liquidation preference of $70,000		28			28
Additional paid-in capital		1,362,386			1,361,742
Accumulated deficit		(820,552	)		(800,342	)
Total shareholders' equity		542,424			561,990
Non-controlling interests		1,174			1,174
Total equity		543,598			563,164
Total liabilities and equity	$	914,568		$	973,864
(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, 2024, 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, $(0.8) million of accumulated depreciation and $2.6 million of other assets included in other line items. The Company's consolidated balance sheets as of December 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, $(0.8) million of accumulated depreciation and $2.4 million of other assets included in other line items.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except per share amounts)


	Three Months Ended March 31,
	2024			2023
REVENUE
Rental income	$	5,725		$	418
Management and other fee income		48			262
Total revenue		5,773			680
EXPENSES
Property operating		3,673			8,185
Real estate taxes		1,393			1,537
Depreciation and amortization		5,271			4,564
General and administrative		9,192			12,220
Total expenses		19,529			26,506
Gain on sale of real estate, net		1,139			12,392
Impairment of real estate assets		(1,148	)		(2,576	)
Equity in income (loss) of unconsolidated entities		379			(36,372	)
Interest and other income, net		1,423			5,585
Interest expense		(7,011	)		(15,202	)
Loss before income taxes		(18,974	)		(61,999	)
(Provision) benefit for income taxes		(11	)		13
Net loss		(18,985	)		(61,986	)
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to Seritage common shareholders	$	(20,210	)	$	(63,211	)

Net loss per share attributable to Seritage Class A common shareholders - Basic	$	(0.36	)	$	(1.13	)
Net loss per share attributable to Seritage Class A common shareholders - Diluted	$	(0.36	)	$	(1.13	)
Weighted average Class A common shares outstanding - Basic		56,215			56,059
Weighted average Class A common shares outstanding - Diluted		56,215			56,059

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, amounts in thousands, except per share amounts)


	Class A Common				Series A Preferred				Additional Paid-In			Accumulated			Non- Controlling			Total
	Shares		Amount		Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2023		56,053	$	561		2,800	$	28	$	1,360,411		$	(640,531	)	$	2,130		$	722,599
Net loss		—		—		—		—		—			(61,986	)		-			(61,986	)
Preferred dividends declared ($0.4375 per share)		—		—		—		—		—			(1,225	)		—			(1,225	)
Vesting of restricted share units		7		—		—		—		—			—			—			—
Share-based compensation		—		—		—		—		784			—			—			784
Sale of consolidated VIEs		—		—		—		—		(1,135	)		—			(1,082	)		(2,217	)
Balance at March 31, 2023		56,060	$	561	$	2,800	$	28	$	1,360,060		$	(703,742	)	$	1,048		$	657,955

Balance at January 1, 2024		56,195	$	562		2,800	$	28	$	1,361,742		$	(800,342	)	$	1,174		$	563,164
Net loss		—				—		—		—			(18,985	)		—			(18,985	)
Preferred dividends declared ($0.4375 per share)		—		—		—		—		—			(1,225	)		—			(1,225	)
Vesting of restricted share units		68		—		—		—		—			—			—			—
Share-based compensation		—		—		—		—		644			—			—			644
Balance at March 31, 2024		56,263	$	562		2,800	$	28	$	1,362,386		$	(820,552	)	$	1,174		$	543,598

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)


	Three Months Ended March 31,
	2024			2023
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(18,985	)	$	(61,986	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in (income) loss of unconsolidated entities		(379	)		36,372
Gain on sale of real estate, net		(1,139	)		(12,392	)
Impairment of real estate assets		1,148			2,576
Share-based compensation		644			774
Depreciation and amortization		5,271			4,564
Amortization of deferred financing costs		—			105
Amortization of above and below market leases, net		38			48
Straight-line rent adjustment		67			10,842
Change in operating assets and liabilities
Tenants and other receivables		4,351			4,668
Prepaid expenses, deferred expenses and other assets		2,406			5,034
Accounts payable, accrued expenses and other liabilities		(10,046	)		(12,557	)
Net cash used in operating activities		(16,624	)		(21,952	)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated entities		(2,925	)		(7,665	)
Net proceeds from sale of real estate		44,312			279,985
Development of real estate		(12,480	)		(32,030	)
Net cash provided by investing activities		28,907			240,290
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of term loan		(30,000	)		(230,000	)
Preferred dividends paid		(1,225	)		(1,225	)
Net cash used in financing activities		(31,225	)		(231,225	)
Net decrease in cash and cash equivalents		(18,942	)		(12,887	)
Cash and cash equivalents, and restricted cash, beginning of period		149,700			144,939
Cash and cash equivalents, and restricted cash, end of period	$	130,758		$	132,052

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited, amounts in thousands)


	Three Months Ended March 31,
	2024		2023
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	134,001	$	133,480
Restricted cash at beginning of period		15,699		11,459
Cash and cash equivalents and restricted cash at beginning of period	$	149,700	$	144,939

Cash and cash equivalents at end of period	$	114,875	$	120,476
Restricted cash at end of period		15,883		11,576
Cash and cash equivalents and restricted cash at end of period	$	130,758	$	132,052


	Three Months Ended March 31,
	2024		2023
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	6,108	$	16,273
Capitalized interest		—		1,409
Income taxes paid		11		(13	)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	$	20,581	$	22,196
Preferred dividends declared and unpaid		1,225		1,225
Transfer to / (from) real estate assets held for sale		36,242		(209,723	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization

Seritage Growth Properties (“Seritage”) (NYSE: SRG), a Maryland real estate investment trust formed on June 3, 2015, operated as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(a) of the Internal Revenue Code (the “Code”) from formation through December 31, 2021. On March 31, 2022, Seritage revoked its REIT election and became a taxable C Corporation effective January 1, 2022. Seritage’s assets are held by and its operations are primarily conducted, directly or indirectly, through Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”). Under the partnership agreement of the Operating Partnership, Seritage, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership. Unless otherwise expressly stated or the context otherwise requires, the “Company” and “Seritage” refer to Seritage, the Operating Partnership and its owned and controlled subsidiaries.

Prior to the adoption of the Company’s Plan of Sale (defined below), Seritage was principally engaged in the ownership, development, redevelopment, disposition, management and leasing of diversified retail and mixed-use properties throughout the United States. Seritage will continue to actively manage each remaining location until such time as each property is sold. As of March 31, 2024, the Company’s portfolio consisted of interests in 27 properties comprised of approximately 3.5 million square feet of gross leasable area (“GLA”) or build-to-suit leased area, and 410 acres of land. The portfolio consists of approximately 2.3 million square feet of GLA and 276 acres held by 18 consolidated properties (such properties, the “Consolidated Properties”) and 1.2 million square feet of GLA and 134 acres held by nine unconsolidated properties (such properties, the “Unconsolidated Properties”).

The Company commenced operations on July 7, 2015, following a rights offering to the shareholders of Sears Holdings Corporation (“Sears Holdings” or “Sears”) to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of certain of Sears Holdings’ owned properties and its 50% interests in three joint ventures which were simultaneously leased back to Sears Holdings under a master lease agreement (the “Original Master Lease” and the “Original JV Master Leases,” respectively).

As of March 15, 2021, the Company no longer had any remaining properties leased to Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc. or Sears Holdings.

On March 1, 2022, the Company announced that its Board of Trustees had commenced a process to review a broad range of strategic alternatives. The Board of Trustees created a Special Committee (the “Special Committee”) of the Company’s Board of Trustees to oversee the process. The Special Committee retained Barclays as its financial advisor. The agreement with Barclays expired in August 2023. The Company’s strategic review process remains ongoing as the Company executes sales pursuant to 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 the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale.

As a result of the Company's revocation of its REIT election, 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 stockholders, which provides the Company with greater flexibility to sell its assets and use its free cash flow to make principal repayments on its Term Loan Facility. 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 since inception and through the 2021 tax year, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place until December 31, 2021.

As a result of the Company’s change in corporate structure to a taxable C Corporation in fiscal year 2022, the Company incurred a one-time, non-cash deferred tax benefit of approximately $161.3 million during the three months ended March 31, 2022. The Company also recorded a full valuation allowance against the deferred tax asset pursuant to ASC 740, Income Taxes, as discussed in more detail below.

The Company sought a shareholder vote to approve a proposed plan of sale of the Company’s assets and dissolution (the “Plan of Sale”) that would allow the Board to sell all of the Company’s assets, distribute the net proceeds to shareholders and dissolve the Company. The Plan of Sale allows Seritage and potential buyers to enter into and complete value maximizing transactions without subjecting any such transaction to the delay and conditionality associated with having to seek and obtain shareholder approval. On July 6, 2022, Edward Lampert, the Company’s former Chairman, entered into a Voting and Support Agreement under which he exchanged his equity interest in the Operating Partnership for Class A common shares and agreed to vote his shares in favor of the Plan of Sale. As of March 31, 2024, Mr. Lampert owns approximately 24.0% of the Company’s outstanding Class A common shares, and Seritage, including its consolidated subsidiaries, is the sole owner of all outstanding Operating Partnership interests.

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The affirmative vote of at least two-thirds of all outstanding common shares of the Company was required to approve the Plan of Sale. The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, following the Company's filing of a final proxy statement with the SEC on September 14, 2022. During the meeting, the Plan of Sale was approved by the shareholders. 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.

Liquidity

The Company’s 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 and certain development expenditures incurred during the three months ended March 31, 2024 and the Company incurred net operating cash outflows of $16.6 million. Additionally, the Company generated investing cash inflows of $28.9 million during the three months ended March 31, 2024, which were driven by asset sales partially offset by development expenditures and investments in unconsolidated entities.

Obligations are projected to continue to exceed property rental income and the Company expects to fund such costs with a combination of capital sources including, but not limited to, cash on hand, sales of Consolidated and Unconsolidated Properties. and potential financing transactions. During the three months ended March 31, 2024, the Company sold 5 consolidated properties for gross proceeds of $48.8 million and made aggregate principal prepayments of $30.0 million on the Term Loan Facility, reducing the outstanding Term Loan Facility balance to $330.0 million at March 31, 2024. Subsequent to March 31, 2024, the Company made additional principal prepayments totaling $50.0 million reducing the balance of the Term Loan Facility to $280.0 million as of May 1, 2024.

Going Concern

In accordance with ASC 205-40, Presentation of Financial Statements - Going Concern, for each annual and interim reporting period, management evaluates whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. As part of this evaluation, the Company takes into consideration all Obligations due within the subsequent 12 months, as well as cash on hand and expected cash receipts. Management has determined that it is probable its plans, as described under Liquidity, will be effectively implemented within one year after the date the financial statements are issued and that these actions will provide the necessary cash flows to fund the Company’s Obligations and development expenditures for the one-year period.

As the outstanding balance of the Term Loan Facility, which matures on July 31, 2025, is not due within the 12 month period subsequent to the date that these financial statements are issued, the Company’s Term Loan Facility is not factored into the Company’s analysis as a current Obligation.

The anticipated proceeds from the sales of assets under contract of $30.0 million and existing cash on hand, would allow the Company to fund its Obligations and certain development expenditures because the Term Loan Facility is not presently a current obligation as noted in the preceding paragraph. As a result, the Company has concluded that management’s plans do alleviate substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, (the “Annual Report”), for the year ended December 31, 2023. Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report. Operating results for the three months ended March 31, 2024 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2024. Capitalized terms used, but not defined in this quarterly report, have the same meanings as set forth in our Annual Report.

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their consolidated properties, and all other entities in which the Company has a controlling financial interest. For entities that meet the definition of a variable interest entity (“VIE”), the Company consolidates those entities when the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it possesses both the unilateral power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company continually evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration

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events. As of March 31, 2024, the Company consolidates one VIE in which we are considered the primary beneficiary, as the Company has the power to direct the activities of the entity, specifically surrounding the development plan. As of March 31, 2024 and December 31, 2023, the Company has several investments in unconsolidated VIEs and does not consolidate these entities because the Company is not the primary beneficiary. All intercompany accounts and transactions have been eliminated.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

As of March 31, 2024, the Company, and its wholly owned subsidiaries, holds a 100% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.

Certain prior period amounts, if any, have been reclassified to conform to the current period’s presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant assumptions and estimates relate to real estate impairment assessments and assessing the recoverability of accounts receivable. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from these estimates.

Segment Reporting

The Company currently operates in a single reportable segment which includes the ownership, development, redevelopment, management, sale and leasing of real estate properties. The Company’s chief operating decision maker, its principal executive officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process.

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred. Significant renovations which improve the property or extend the useful life of the assets are capitalized. As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved, and other miscellaneous costs incurred during the period of redevelopment, are capitalized. The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range between:


Buildings:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

The Company, on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired. If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real estate asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects and the effects of demand, competition, and other economic factors such as discount rates and market comparables. Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. The Company recognized impairment charges of $1.1 million and $2.6 million during the three months ended March 31, 2024 and 2023, respectively.

Real Estate Dispositions

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When the Company disposes of all or a portion of a real estate asset, it recognizes a gain or loss on sale of real estate as the difference between the carrying value and consideration received. Consideration consists of cash proceeds received.

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2024 and 2023 (in millions):


	Three Months Ended March 31,
	2024		2023
Dispositions to third parties
Gross proceeds	$	48.8	$	290.8
Gain on sale of real estate, net		1.1		12.4

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell. If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value. Properties classified as real estate held for sale generally represent properties that are either under contract for sale or have been identified for sale and all requirements to sell have been satisfied and are probable to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated. Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period or at all.

As of March 31, 2024, seven properties were classified as held for sale with assets of $75.6 million and no liabilities, and, as of December 31, 2023, six properties were classified as held for sale with assets of $39.3 million and no liabilities.

Investments in Unconsolidated Entities

The Company accounts for its investments in unconsolidated entities using the equity method of accounting as the Company exercises significant influence but does not have a controlling financial interest. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions which include macroeconomic conditions, that the value of the Company’s investments in unconsolidated entities may be impaired. An investment’s value is impaired if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.

The Company recorded no other-than-temporary impairment losses in investments in unconsolidated entities for the three months ended March 31, 2024 and 2023.

Restricted Cash

As of March 31, 2024 and December 31, 2023, respectively, restricted cash represents cash collateral for letters of credit and cash escrowed for development purposes.

Rental Revenue Recognition and Tenant Receivables

Rental income is comprised of base rent and reimbursements of property operating expenses. The Company commences rental revenue recognition when the lessee takes control of the physical use of the leased asset based on evaluation of several factors. Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable base rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as straight-line rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets. Reimbursement of property operating expenses arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is accrued in the same periods as the expenses are incurred.

The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located. Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectability of substantially all future lease payments from a specified lease

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is not probable of collection, at which point, the Company will begin recognizing revenue on a cash basis, based on actual amounts received. Any receivables that are deemed to be uncollectible are recognized as a reduction to rental income in the Company’s condensed consolidated statements of operations. If future circumstances change such that the Company believes that it is reasonably certain that the Company will collect all rental income remaining on such leases, the Company will resume accruing rental income and recognize a cumulative catch up for previously written-off receivables.

The Company recorded a reduction to rental income of $29.7 thousand and $0.9 million during the three months ended March 31, 2024 and 2023, respectively, as a result of the Company’s evaluation of collectability. In addition, the Company recorded a reduction of income of previously recorded straight-line rent of $66.5 thousand and an increase of $0.1 million of straight-line rent for the three months ended March 31, 2024 and 2023, respectively.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Tenant and Other Receivables

Tenant and other receivables includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent, as discussed above. Tenant and other receivables also includes management fees receivable for services performed for the benefit of certain unconsolidated entities. In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.

Property management fee income is reported at 100% of the revenue earned from such unconsolidated properties in management and other fee income on the condensed consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated entities is reported in equity in loss of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Leasing and development fees are initially reported at the portion of revenue earned attributable to outside ownership of the related unconsolidated entities. The Company’s share in leasing and development fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in loss of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects within our unconsolidated entities based on a percentage of project costs or a fixed fee. Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be performance obligations, satisfied as of a point in time. The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment. For these services, the obligations are typically satisfied at lease execution and tenant opening date, and revenue is recognized in accordance with the related agreement at the point in time when the obligation has been satisfied.

Share-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the condensed consolidated statements of operations. Compensation expense for equity awards is based on the grant date fair value of the awards. Compensation expense is recognized ratably over the vesting period for awards with time-based vesting and awards with market-based vesting conditions (e.g. total shareholder return). For awards with performance-based vesting determined by Company operating criteria, the Company recognizes compensation expense at the date the achievement

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of performance criteria is deemed probable for the amount which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period. The Company utilized a third-party valuation firm to measure the grant date fair value of restricted stock unit awards with market-based criteria using the Monte Carlo model. Forfeitures are recorded on an actual basis.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. Management believes the Company’s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk. As of March 31, 2024, the Company has one tenant that comprises 15.4% of annualized based rent, with no other tenants exceeding 10.0% of annualized based rent. The Company’s portfolio of 18 Consolidated Properties and 9 Unconsolidated Properties was diversified by location across 10 states.

Earnings/(Loss) per Share

The Company has three classes of common stock. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Since August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings/(loss) per share computations as they do not have economic rights. Since December 31, 2020, all outstanding Class B common shares have been surrendered and there are currently no Class B common shares outstanding.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings/(loss) per share.

Income Taxes

The condensed consolidated financial statements reflect provisions for federal, state and local income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities as a result of a change in tax rates is recognized as income in the period that includes the enactment date. For years prior to 2022, the Company was taxed as a REIT and did not expect to pay federal, state or local income taxes at the REIT level (including its qualified REIT subsidiaries). While a REIT, the Company was required to distribute at least 90% of its REIT level taxable income to shareholders, and the resulting dividends paid deduction offset its REIT taxable income. Consequently, while a REIT, since the Company did not expect to pay taxes on its REIT taxable income, it did not recognize deferred tax assets or liabilities.

Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Significant judgments are required to determine the consolidated provision (benefit) for income taxes. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. Realization of the Company’s deferred tax assets is dependent upon many factors such as tax regulations applicable to the jurisdictions in which the Company operates, estimates of future taxable income and the character of such taxable income.

The Inflation Reduction Act of 2022 was enacted on August 16, 2022 and was effective January 1, 2023. The Inflation Reduction Act includes a 15% corporate alternative minimum tax (the “CAMT”) based on the adjusted financial statement income (“book income”) of applicable corporations. The CAMT generally applies to corporations with average annual book income over a 3-year period exceeding $1 billion. The Company does not expect this legislation to have a material effect on the condensed consolidated financial statements.

Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is recorded to adjust net deferred tax assets to the amount which management believes will more likely than not be recoverable. In making such determination, management considers available positive and

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negative evidence, including future reversals of existing taxable temporary differences, future taxable income, and the implementation of prudent tax planning strategies. In the event that the Company is able to utilize its deferred tax assets in excess of their recorded amount, the valuation allowance will be reduced with a corresponding reduction to income tax expense.

Recently Issued Accounting Pronouncements

The Company has not adopted any Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board ("FASB") during the three months ended March 31, 2024.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within the segment measure of profit or loss, an amount and description of its composition for other segment items to reconcile segment profit or loss, and the title and position of the entity's CODM. ASU 2023-07 will be effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company is currently evaluating the impact of the guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures that requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the guidance on its consolidated financial statements.

Note 3 – Lease Intangible Assets and Liabilities

The following tables summarize the Company’s lease intangible assets (acquired in-place leases and above-market leases) and liabilities (acquired below-market leases, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets), net of accumulated amortization, as of March 31, 2024 and December 31, 2023 (in thousands):


March 31, 2024
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	294	$	(103	)	$	191
Total	$	294	$	(103	)	$	191


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(470	)	$	834
Total	$	1,304	$	(470	)	$	834


December 31, 2023
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	1,541	$	(655	)	$	886
Total	$	1,541	$	(655	)	$	886


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(456	)	$	848
Total	$	1,304	$	(456	)	$	848

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Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $13.4 thousand and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Amortization of an acquired below-market ground lease resulted in additional property expense of $50.7 thousand for each of the three months ended March 31, 2024 and 2023, respectively. Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $19.3 thousand and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. Future amortization of these leases intangibles is set forth below (in thousands):


	(Above) / below market leases, net		Below market ground lease		In-place leases
Remainder of 2024	$	7	$	152	$	1
2025		8		203		2
2026		8		203		2
2027		8		203		2
2028		8		203		2
2029		8		203		2
Thereafter		787		8,841		180

Note 4 – Investments in Unconsolidated Entities

The Company conducts a portion of its property rental activities through investments in unconsolidated entities. The Company’s partners in these unconsolidated entities are unrelated real estate entities or commercial enterprises. The Company and its partners in these unconsolidated entities make initial and/or ongoing capital contributions to these unconsolidated entities. The obligations to make capital contributions are governed by each unconsolidated entity’s respective operating agreement and related governing documents.

As of March 31, 2024, the Company had investments in seven unconsolidated entities as follows:


		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC ("GGP I JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		87,500
GS Portfolio Holdings (2017) LLC ("GGP II JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		93,500
SPS Portfolio Holdings II LLC ("Simon JV")	Simon Property Group, Inc.	50.0%	3		275,700
Mark 302 JV LLC ("Mark 302 JV")	An investment fund managed by Invesco Real Estate	50.0%	1		51,500
SI UTC LLC ("UTC JV")	A separate account advised by Invesco Real Estate	50.0%	1		106,200
Tech Ridge JV Holding LLC ("Tech Ridge JV")	An affiliate of RD Management	50.0%	1		—
Landmark Land Holdings, LLC ("Landmark JV")	The Howard Hughes Corporation and Foulger-Pratt	31.3%	1		—
			9		614,400

The Company has contributed certain properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities. The contribution of property to unconsolidated entities is accounted for as a sale of real estate and the Company recognizes the gain or loss on the sale (the “Gain (Loss)”) based upon the transaction price attributed to the property at the closing of the unconsolidated entities transaction (the “Contribution Value”). The Gain or (Loss) is included in gain on sale of real estate on the condensed consolidated statements of operations.

In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective unconsolidated entity agreements, which may result in an adjustment to the gain or loss recognized. If the Contribution Value is subject to revaluation, the Company initially recognizes the gain or loss at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a quarterly basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the unconsolidated entity partners, as well as an adjustment to the initial gain or loss.

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Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the gain or loss for those unconsolidated entities subject to a revaluation. The following table summarizes the properties contributed to the Company’s unconsolidated entities (in millions):


		March 31, 2024
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2019
Tech Ridge JV (1)	September 27, 2019	$	3.0	$	0.1

(1)

The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV. The Contribution Value cannot be less than $2.75 million.

Summarized Financial Information for Unconsolidated Entities

The following tables present summarized financial data for UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	27,993		$	27,992
Buildings and improvements		158,264			149,625
Accumulated depreciation		(8,119	)		(6,592	)
		178,138			171,025
Construction in progress		2,437			2,362
Net investment in real estate		180,575			173,387
Cash and cash equivalents		8,347			7,355
Tenant and other receivables, net		11,206			11,289
Other assets, net		2,550			11,927
Total assets	$	202,678		$	203,958

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		14,592			18,133
Total liabilities		14,592			18,133

Members' Interest
Additional paid in capital		185,918			180,628
Retained earnings		2,168			5,197
Total members' interest		188,086			185,825
Total liabilities and members' interest	$	202,678		$	203,958
Carrying value of Company's investments in equity investments	$	98,651		$	97,018


	Three Months Ended March 31,
	2024			2023
Total revenue	$	4,571		$	1,943
Property operating expenses		(785	)		(776	)
Depreciation and amortization		(1,475	)		(973	)
Operating income		2,311			194
Other expenses		(143	)		(52	)
Net income	$	2,168		$	142
Equity in income of unconsolidated entities (1)	$	1,122		$	71
(1) Equity in income of unconsolidated entities on the consolidated statements of operations includes basis difference adjustments.

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Summarized Financial Information for Unconsolidated Entities

The following tables present combined condensed financial data for the Company’s unconsolidated entities, excluding UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	117,439		$	117,439
Buildings and improvements		96,099			96,016
Accumulated depreciation		(43,828	)		(43,070	)
		169,710			170,385
Construction in progress		112,275			104,866
Net investment in real estate		281,985			275,251
Cash and cash equivalents		7,558			2,795
Tenant and other receivables, net		24			6
Other assets, net		31,505			34,098
Total assets	$	321,072		$	312,150

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		69,890			65,522
Total liabilities		69,890			65,522

Members' Interest
Additional paid in capital		296,790			340,311
Accumulated deficit		(45,608	)		(93,683	)
Total members' interest		251,182			246,628
Total liabilities and members' interest	$	321,072		$	312,150
Carrying value of Company's investments in equity investments	$	101,159		$	99,419


	Three Months Ended March 31,
	2024			2023
Total revenue	$	199		$	4,361
Property operating expenses		(923	)		(2,217	)
Depreciation and amortization		(758	)		(4,002	)
Operating loss		(1,482	)		(1,858	)
Other expenses		18			(224	)
Gains (losses) and (impairments)		—			(70,806	)
Net loss	$	(1,464	)	$	(72,888	)
Equity in loss of unconsolidated entities (1)	$	(743	)	$	(36,443	)

(1)

Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

The Company shares in the profits and losses of these unconsolidated entities generally in accordance with the Company’s respective equity interests. In some instances, the Company may recognize profits and losses related to investment in an unconsolidated entity that differ from the Company’s equity interest in the unconsolidated entity. This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated entity recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated entity and the unconsolidated entity’s basis in those assets or other items. The Company utilizes internally prepared fair value estimates as well as negotiated offers to sell the investments for the impairment analysis. No other-than-temporary-impairment was recorded for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024, the Company did not exercise any put rights. The Company did not close on the sale of any previously exercised put rights during the three months ended March 31, 2024. During the year ended December 31, 2023, the Company closed on the sale of four of the previously exercised put rights and as of December 31, 2023 the sale of all exercised put rights have closed. The Company’s partners assess impairment on its underlying assets pursuant to ASC 360, Property, Plant and Equipment, and recorded impairment on unconsolidated properties of $0 and $70.8 million for the three months ended March 31, 2024 and 2023, respectively. The Company's share of these impairment charges is included in equity in loss of unconsolidated entities on the condensed consolidated statements of operations.

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Unconsolidated Entity Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the UTC JV, and Tech Ridge JV. The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its unconsolidated entities. During the three months ended March 31, 2024 and 2023, the Company recorded management and related fees of $50.0 thousand and $0.3 million, respectively. These fees are included in management and other fee income on the condensed consolidated statements of operations. Refer to Note 2 for the Company’s accounting policies.

Note 5 – Leases

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2024 are approximately as follows:


(in thousands)	March 31, 2024
Remainder of 2024	$	15,385
2025		22,720
2026		21,543
2027		20,268
2028		17,690
2029		15,302
Thereafter		84,764
Total	$	197,672

The components of lease revenues for the three months ended March 31, 2024 and 2023 were as follows:


(in thousands)	Three Months Ended March 31,
	2024		2023
Fixed rental income	$	4,837	$	12,154
Variable rental income		942		(895	)
Total rental income	$	5,779	$	11,259

Lessee Disclosures

The Company has one ground lease and one corporate office lease which are classified as operating leases. As of March 31, 2024, and December 31, 2023, the outstanding amount of right-of-use, or ROU, assets were $14.2 million and $14.4 million, respectively, which is included in prepaid expenses, deferred expenses and other assets, net on the condensed consolidated balance sheets.

The Company recorded rent expense related to leased corporate office space of $0.3 million for the three months ended March 31, 2024 and 2023. Such rent expense is classified within general and administrative expenses in the condensed consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $0.1 million for the three months ended March 31, 2024 and 2023. Such ground rent expense is classified within property operating expenses in the condensed consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

The Company expects to make cash payments on operating leases of $0.8 million for the remainder of 2024, $1.2 million in 2025, $1.2 million in 2026, $1.2 million in 2027, $0.8 million in 2028, $45.0 thousand in 2029 and $2.0 million for the periods thereafter. The present value discount is ($3.1) million.

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2024:


	March 31, 2024
Weighted average remaining lease term (in years)		10.7
Weighted average discount rate		6.77	%
Cash paid for operating leases (in thousands)	$	330

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Subsequent to March 31, 2024, the Company exercised its early termination right provision of the corporate office lease. This reduced the lease term by 37 months, amending the initial lease end date from August 30, 2028 to July 31, 2025. In connection with electing its termination right, the Company paid a $1.6 million termination fee subsequent to March 31, 2024.

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and administrative agent. The Term Loan Facility provided for an initial funding of $1.6 billion at closing and includes a $400.0 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. On February 2, 2023, the Company made a $230.0 million voluntary prepayment, reducing the unpaid principal balance to $800.0 million, and the debt maturity was extended for two years to July 31, 2025. The Company made additional voluntary prepayments in 2023 aggregating $440.0 million and an additional payment of $30.0 million during the first quarter of 2024, reducing the unpaid principal balance to $330.0 million at March 31, 2024. Subsequent to March 31, 2024, the Company made additional principal payments aggregating $50.0 million, reducing the balance of the Term Loan Facility to $280.0 million as of May 1, 2024.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the condensed consolidated statements of operations.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million, (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million, and (iii) the repayment by the Operating Partnership of any deferred interest permitted under the amendment to the Term Loan Amendment as further described below. As of March 31, 2024, the Company has not yet achieved the requirements to access the Incremental Funding Facility.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Operating Partnership. The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Operating Partnership and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement. During 2019, mortgages were recorded on a majority of the Company’s portfolio and during the year ended December 31, 2021, mortgages were recorded on the remaining unmortgaged properties in all but two locations.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.20 to 1.00 for each fiscal quarter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.30 to 1.00 for each fiscal quarter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion. Any failure to satisfy any of these financial metrics limits the Company's ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default. The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, and bankruptcy or insolvency proceedings. If there is an event of default, the lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of March 31, 2024, the Company was not in compliance with certain of the financial metrics described above. As a result, the Company was previously required to receive the consent of Berkshire Hathaway to dispose of assets via sale or contribution to another entity and as of June 16, 2022, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. The Third Term Loan Amendment (defined below), which was executed on June 16, 2022, eliminated this requirement. There are no other impacts under the Term Loan Facility from non-compliance with the financial metrics described above.

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The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which were recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the initial term of the Term Loan Agreement. As of March 31, 2024 and December 31, 2023, the Company's debt issuance costs were fully amortized.

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 Company has paid all interest due under the Term Loan Agreement and has not deferred any interest as permitted under the amendment to the Term Loan Amendment.

Additionally, the First 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.

On November 24, 2021, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Second Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that (i) the “make whole” provision in the Senior Secured Term Loan Agreement shall not be applicable to prepayments of principal ; and (ii) the Senior Secured Term Loan Agreement, as amended for (i) above, may at the Operating Partnership's election be extended for two years from July 31, 2023 to July 31, 2025 (the “Maturity Date”) if its principal has been reduced to $800 million by the July 31, 2023. The outstanding principal balance was reduced to $800 million on February 2, 2023, and the Maturity Date has been extended to July 31, 2025.

On June 16, 2022, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Third Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that notwithstanding anything to the contrary in the asset sale covenant, the parent, borrower, and their respective subsidiaries will be permitted without the consent of the administrative agent to sell, transfer, or otherwise dispose of properties (including but not limited to properties or equity interests of any subsidiary) to unaffiliated third parties for no less than fair market value, provided that the borrower deposits all net proceeds received into a controlled account and the use of such net proceeds will be subject to the terms and conditions of the Term Loan Agreement, including but not limited to the restricted payments and investments/loans covenants.

As of March 31, 2024, the Company has paid down a total of $1.27 billion towards the Term Loan’s principal balance. The aggregate principal amount outstanding under the Term Loan Facility as of March 31, 2024 was $330.0 million. Subsequent to March 31, 2024, the Company made an additional principal prepayment aggregating $50.0 million, reducing the balance of the Term Loan Facility to $280.0 million.

Note 7 – Income Taxes

The Company had previously elected to be taxed as a REIT as defined under Section 856(a) of the Code for federal income tax purposes upon formation and through December 31, 2021. On March 31, 2022, the Company announced that its Board of Trustees unanimously approved a plan to terminate the Company’s REIT status and become a taxable C Corporation, effective for the year ended December 31, 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 stockholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal, state and local 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 since inception and through the 2021 tax year, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place until December 31, 2021.

As a result of the Company’s revocation of its REIT status in fiscal year 2022, the Company incurred a one-time, non-cash deferred tax benefit of approximately $161.3 million during the three months ended March 31, 2022. As a result of ongoing operations and sales activity, the Company recognized a deferred tax benefit of $4.8 million and $5.5 million during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company has recorded a full valuation allowance of $203.6 million

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against the deferred tax asset pursuant to ASC 740, as discussed in more detail below. While the Company has recorded a full valuation allowance against its DTAs due to the uncertainty that it will be able to utilize them, if the Company is able to sell assets at prices above its tax basis, the DTAs will be utilized to offset any taxes due on those gains to the extent of the DTAs.

The Company’s effective tax rate of 0% differs from the U.S. statutory rate of 21% in 2024 primarily due to the placement of a valuation allowance on its deferred tax assets.

The significant components of the Company’s deferred tax assets of $203.6 million as of March 31, 2024 consist of book to tax basis differences, net operating losses, and carryover net operating losses. As discussed below, the Company has recorded a full valuation allowance on the deferred tax assets as of March 31, 2024 and 2023, respectively.

Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. ASC 740 states that deferred tax assets shall be reduced by a valuation allowance if there is insufficient objectively verifiable evidence to support that it is more likely than not that they will be realized. This evaluation requires significant judgment which should be weighted commensurate with the extent to which the evidence can be objectively verified. Additionally, under ASC 740, forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years. Given the Company’s history of cumulative losses combined with the fact that the Company’s utilization of deferred tax assets is highly dependent on the outcome of the review of a broad range of strategic alternatives announced by its Board of Trustees and the uncertainty in timing and volume of future property sales, we have deemed that their realization, at this time, cannot be objectively verified. The Company has therefore recorded a full valuation allowance against the Company’s deferred tax assets as of March 31, 2024. The Company will evaluate this position each quarter as verifiable positive evidence becomes available, such as the execution of asset sales, to support the future utilization of the deferred tax assets.

Note 8 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company also considers counterparty credit risk in its assessment of fair value.

Assets Measured at Fair Value on a Nonrecurring Basis

The following tables present the Company's assets measured at fair value on a non-recurring basis as of March 31, 2024 and December 31, 2023 (in thousands), aggregated by the level in the fair value hierarchy within which those measurements fall:


	Balance		Fair Value Measurements Using
Description (1)	March 31, 2024		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	8,325	$	8,325	$	-	$	-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.


	Balance		Fair Value Measurements Using
Description (1)	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	207,968	$	6,000	$	5,000	$	196,968
Impaired right-of-use assets		3,020		-		-		3,020
Other-than-temporary impaired investments in unconsolidated entities		14,739		-		14,739		-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.

In accordance with ASC 360-10, Property, Plant and Equipment, the Company reviews the carrying value of its real estate assets at each reporting period. The Company recorded impairment losses of $1.1 million and $2.6 million during the three months ended March 31, 2024 and March 31, 2023, respectively, which are included in impairment on real estate assets within the condensed consolidated statements of operations. We continue to evaluate our portfolio, including our development plans and holding periods, which may result in additional impairments in future periods on our consolidated properties.

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In accordance with ASC 323, Equity Method and Joint Ventures, the Company reviews the carrying value in its investments in unconsolidated entities at each reporting period. The Company did not record any other-than-temporary impairment losses on investments in unconsolidated entities during the three months ended March 31, 2024 and 2023, respectively.

The fair value estimates used to determine the impairment charges for consolidated and unconsolidated properties were determined primarily by discounted cash flow analyses, market comparable data and/or offers received, as applicable. The cash flows utilized in such analyses are comprised of unobservable inputs which include, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates based upon market conditions and future expectations. The most significant unobservable inputs utilized in determining the fair value of these assets are capitalization rates and discount rates which were between 5.5% and 8.0%. Because of these inputs, we have determined that the fair values of these properties are classified within Level 3 of the fair value hierarchy. The most significant observable inputs utilized in determining the fair value of these assets are market comparables for land and building. Comparable data utilizes comparable sales, listings, sales contracts and letters of intent which are subject to judgment as to comparability to the valued property. Because these inputs are derived from observable market data, we have determined that the fair values of these properties are classified within Level 2 of the fair value hierarchy. We consider fair values based upon the agreed-upon contract sales price to be classified within Level 1 of the fair value hierarchy.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the condensed consolidated balance sheets include cash equivalents, restricted cash and the term loan facility. The fair value of cash equivalents and restricted cash are classified as Level 1 and the fair value of term loan facility is classified as Level 2. Cash equivalents and restricted cash are carried at cost, which approximates fair value. The fair value of debt obligations is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings. As of March 31, 2024 and December 31, 2023, respectively, the estimated fair values of the Company’s debt obligations were $322.7 billion and $349.5 million, respectively, which approximated the carrying value at such dates as the current risk-adjusted rate approximates the stated rates on the Company’s debt obligations.

Note 9 – Commitments and Contingencies

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties. The Company also maintains coverage for terrorism acts as defined by the Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2027.

Insurance premiums are charged directly to each of the properties. The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material. The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or discloses the fact that such a range of loss cannot be estimated. The Company does 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.

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 litigation related to the bankruptcy of Sears Holdings (the "Litigation"). The Litigation was settled in 2022 and the Litigation was dismissed. During the year ended December 31, 2022, the Company reached settlement agreements with two of the D&O Insurers and received gross proceeds of $12.7 million, which was recorded in interest and other income in the consolidated statements of operations during the year ended December 31, 2022. 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

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during the three months ended March 31, 2023, which is recorded in interest and other income in the consolidated statements of operations.

In addition to the litigation described above, the Company is 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, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings. Mr. Lampert was also the Chairman of Seritage prior to his retirement effective March 1, 2022.

On July 6, 2022, Mr. Lampert converted all Operating Partnership Units (“OP Units”) to Class A common shares. As a result, he owns 24.0% of the outstanding Class A shares as of March 31, 2024.

Subsidiaries of Holdco, as lessees, and subsidiaries of the Company, as lessors, were parties to the Holdco Master Lease and subsidiaries of Sears Holdings, as lessees, and subsidiaries of the Company, as lessors, were parties to the Original Master Lease.

Winthrop Capital Advisors

On December 29, 2021, the Company entered into a Services Agreement with Winthrop Capital Advisors LLC to provide additional staffing to the Company. On January 7, 2022, the Company announced that John Garilli, an employee of Winthrop, has been appointed interim chief financial officer on a full-time basis, effective January 14, 2022. The Company pays Winthrop a monthly fee for services and reimbursement for certain employees. The Company paid Winthrop $0.8 million and $0.7 million during the three months ended March 31, 2024 and 2023, respectively.

Unconsolidated Entities

Certain unconsolidated entities have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated entities. Refer to Note 2 for the Company’s significant accounting policies.

The Company has certain put rights on properties held by the Unconsolidated Entities, which may require the Company’s partner to buy out the Company’s investment in such properties. During the three months ended March 31, 2024, the Company did not exercise any put rights. During the three months ended March 31, 2023, the Company exercised its put rights on one property.

Note 11 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership which was amended and restated on December 14, 2017 and further amended and restated on January 4, 2023. Pursuant to this partnership agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners.

On July 6, 2022, ESL converted all Operating Partnership Units to Class A common shares. As a result, the Company, and its wholly owned subsidiaries, holds a 100% interest in the Operating Partnership as of March 31, 2024.

Note 12 – Shareholders’ Equity

Class A Common Shares

As of March 31, 2024, 56,262,944 Class A common shares were issued and outstanding. Class A shares have a par value of $0.01 per share.

Class B Non-Economic Common Shares

As of March 31, 2024, there were no Class B non-economic common shares issued and outstanding.

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Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share. The Company received net proceeds from the offering of approximately $66.4 million, after deducting payment of the underwriting discount and offering expenses.

As of December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees has not declared dividends on the Company’s Class A common shares during 2024 or 2023. 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 Board of Trustees will determine future distributions following the pay down of the Term Loan Facility.

The Company’s Board of Trustees declared the following dividends on preferred shares during 2024 and 2023:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2024
May 2	June 28	July 15	$	0.43750
February 29	March 29	April 15		0.43750
2023
October 30	December 29	January 16, 2024	$	0.43750
July 25	September 29	October 13		0.43750
April 27	June 30	July 14		0.43750
February 15	March 31	April 17		0.43750

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Note 13 – Earnings per Share

The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares. Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.


(in thousands except per share amounts)	Three Months Ended March 31,
	2024			2023
Numerator - Basic and Diluted
Net loss	$	(18,985	)	$	(61,986	)
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic	$	(20,210	)	$	(63,211	)

Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		56,215			56,059
Weighted average Class A common shares outstanding - Basic		56,215			56,059
Weighted average Class A common shares outstanding - Diluted		56,215			56,059

Loss per share attributable to Class A common shareholders - Basic	$	(0.36	)	$	(1.13	)
Loss per share attributable to Class A common shareholders - Diluted	$	(0.36	)	$	(1.13	)

No adjustments were made to the numerator for the three months ended March 31, 2024 and 2023, respectively, because the Company generated a net loss. During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

No adjustments were made to the denominator for the three months ended March 31, 2024 and 2023, respectively, because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of the Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share.

As of March 31, 2024 and December 31, 2023, there were 98,398 and 361,645 shares, respectively, of non-vested restricted shares outstanding.

Note 14 – Share-Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the “Awards”). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares and Share Units

Pursuant to the Plan, the Company has periodically made grants of restricted shares or share units. The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted shares and share units vest in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that do not vest are forfeited. Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest. Dividends on restricted shares and share units with performance-based vesting are accrued when declared and paid to holders of

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such shares on the third, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares. See Note 2 for valuation information related to the grants of the awards that are subject to market-based vesting conditions.

The following table summarizes restricted share activity for the three months ended March 31, 2024:



	Three Months Ended March 31, 2024
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		361,645		$	14.31

Share units granted		-
Restricted shares vested		(131,272	)		13.48
Restricted shares forfeited		(131,975	)		17.18
Unvested restricted shares at end of period		98,398		$	11.55

The Company recognized $0.6 million and $0.8 million in compensation expense related to the restricted shares for the three months ended March 31, 2024 and 2023, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company’s condensed consolidated statements of operations.

As of March 31, 2024, there were approximately $1.0 million of total unrecognized compensation costs related to the outstanding restricted shares which are expected to be recognized over a weighted-average period of approximately 0.9 years. As of March 31, 2023, there were approximately $3.7 million of total unrecognized compensation costs related to the outstanding restricted shares which were expected to be recognized over a weighted-average period of approximately 1.6 years.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 no 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, 2023. 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

Review of Strategic Alternatives

On March 1, 2022, the Company announced that its Board of Trustees 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 Capital, Inc. as its financial advisor from March 2022 through 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 Plan of Sale can be suspended by the Board of Trustees.

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 the first quarter of 2022, we announced a Review of Strategic Alternatives and during the second quarter determined that the best plan for all assets is to pursue sales. As a result of the foregoing, the Company’s anticipated holding periods with respect to certain assets changed. During the three months ended March 31, 2024, we agreed to sell two assets below book value resulting in the recognition of impairment losses of $1.1 million, which is included in impairment of real estate assets within the consolidated statements of operations. We did not recognize any other-than-temporary impairment losses on our investments in unconsolidated entities during the three months ended March 31, 2024. We continue to evaluate our portfolio, including our development plans and offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities.

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REIT Election

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 for the year ended December 31, 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 stockholders, 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 since inception and through the 2021 tax year, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place until 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.

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. Additionally, we have identified various sites that we believe have the demographic profile to support other uses such as residential, biotechnology, office and others. Given our fee ownership of these properties and control over parking lots and outparcels, we believe that these sites are well positioned for such value creation opportunities. We additionally look to further lease our built retail footprint and densify any excess parking land through the addition of triple net (“NNN”) pad sites, which are standalone sites upon which a customized space can be built or leased for a tenant, to the extent that we believe these actions would be accretive to shareholder value.

In order to achieve its objective, the Company intends to execute the following strategies:

•

Multi-tenant Retail: Our portfolio of five multitenant retail assets provides positive cash flow and are primarily leased to a variety of national credit tenants. As of March 31, 2024, this portfolio was 68.8% leased. A majority of our leases provide for the collection of recoveries from tenants based on the structure of our leases, providing an important inflation hedge. We are working to maximize value of these assets and position them for sale.

•

Densification and Redevelopment Opportunities: In particular, we have identified various sites that we believe have the demand and demographic profile to support other uses such as residential, biotechnology, office and others. Given our fee ownership of these properties and control over parking lots and outparcels, we believe that these sites are well positioned for such value creation opportunities through entitlements, leasing and development. As of March 31, 2024, our full portfolio included approximately 410 acres of land, or an average of 17.9 acres per site, and our most significant geographic concentrations were in higher growth markets in California, Florida, Texas, and the Northeast. We have developed a number of properties to completion or near completion and have achieved leasing of 100% at UTC and 70% at Aventura.

•

Non-core Assets for Monetization: We continue to assess the best use for all sites within our portfolio, including residential, retail, and converting excess land area to pad sites. The non-core assets are those assets where we believe we will maximize value by selling in its current state.

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 is 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.

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Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2024			2023			$ Change
Revenue
Rental income	$	5,725		$	418		$	5,307
Expenses
Property operating		(3,673	)		(8,185	)		4,512
Real estate taxes		(1,393	)		(1,537	)		144
Depreciation and amortization		(5,271	)		(4,564	)		(707	)
General and administrative		(9,192	)		(12,220	)		3,028
Gain on sale of real estate, net		1,139			12,392			(11,253	)
Impairment of real estate assets		(1,148	)		(2,576	)		1,428
Equity in income (loss) of unconsolidated entities		379			(36,372	)		36,751
Interest and other income, net		1,423			5,585			(4,162	)
Interest expense		(7,011	)		(15,202	)		8,191

Rental Income

The following table presents the results for rental income for the three months ended March 31, 2024, as compared to the corresponding period in 2023 (in thousands):


	Three Months Ended March 31,						Three Months Ended March 31,
	2024						2023
	Rental Income			% of Total Rental Income			Rental Income			% of Total Rental Income			$ Change
In-place retail leases	$	5,779			100.9	%	$	11,259			2693.5	%		(5,480	)
Straight-line rent (expense)		(67	)		(1.2	%)		(10,843	)		(2594.0	)%		10,776
Amortization of the above/below market leases		13			0.2	%		2			0.5	%		11
Total rental income	$	5,725			100.0	%	$	418			100.0	%	$	5,307

The decrease of $5.5 million in in-place retail lease rental income during 2024 is primarily due to property sales.

The decrease of $10.8 million in straight-line rental expense was primarily due to write off of deferred rents related to property sales during the quarter ended March 31, 2023.

Property Operating Expenses

The decrease of $4.5 million in property operating expense for the three months ended March 31, 2024 was due primarily to asset sales and insurance refunds for sold properties that were less than the estimated receivables.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including amortization of costs associated with share-based compensation awarded in prior years, professional fees, office expenses and overhead expenses.

The decrease of $3.0 million in general and administrative expenses for the three months ended March 31, 2024 was driven by a decrease in employee compensation due to reduced headcount and a reduction in consulting services.

Gain on Sale of Real Estate, Net

During the three months ended March 31, 2024, the Company sold five properties for aggregate consideration of $48.8 million and recorded a gain totaling $1.1 million, which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

Impairment of Real Estate Assets

During the three months ended March 31, 2024, the Company recognized $1.1 million impairment of real estate assets as a result of the Company accepting offers below book value on two properties. During the three months ended March 31, 2023, the Company recognized $2.6 million of impairment losses as a result of the Company's plan to pursue the Plan of Sale, which is included within the condensed consolidated statements of operations.

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Equity in Loss of Unconsolidated Entities

The increase of $36.8 million in income (loss) of unconsolidated entities for the three months ended March 31, 2024 was driven by a $70.8 million impairment charge recorded by one unconsolidated entity during the three months ended March 31, 2023. The Company's share of the impairment was $35.4 million and was included in the equity in loss of consolidated entities on the consolidated statements of operations.

Interest and other income, net

The decrease of $4.2 million of interest and other income is driven by the recognition of $3.8 million of income related to the settlement with the D&O insurers for the three months ended March 31, 2023.

Interest Expense

The decrease of $8.2 million in interest expense for the three months ended March 31, 2024 was driven by partial Term Loan Facility pay downs between April 1, 2023 and March 31, 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 three months ended March 31, 2024 and the Company recorded net operating cash outflows of $16.7 million. Additionally, the Company generated investing cash inflows of $28.9 million during the three months ended March 31, 2024, 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 the following, subject to any approvals that may be required under the Term Loan Agreement:

•

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 March 31, 2024, we sold 81 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $905.3 million 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 March 31, 2024, we sold our interests in eight Unconsolidated Properties and generated approximately $140.7 million of gross proceeds.

•

Unconsolidated Properties. As of March 31, 2024, 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;

Subsequent to March 31, 2024, we sold two Consolidated Properties for aggregate gross proceeds of $31.8 million. As of May 7, 2024, we had two assets under contracts for sale with no due diligence contingencies for total anticipated proceeds of $8.3 million and

- 30 -

two assets under contract for sale subject to customary due diligence for total anticipated proceeds of $21.8 million. All four assets 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 three months ended March 31, 2024, we have repaid $30.0 million against the principal of the Term Loan Facility. Our outstanding balance as of March 31, 2024, is $330.0 million. Subsequent to March 31, 2024, the Company made additional principal payments totaling $50.0 million reducing the balance of the Term Loan Facility to $280.0 million as of May 1, 2024.

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 Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following table summarizes the Company’s cash flow activities for the three months ended March 31, 2024 and 2023, respectively (in thousands):


	Three Months Ended March 31,
	2024			2023			$ Change
Net cash used in operating activities	$	(16,624	)	$	(21,952	)	$	5,328
Net cash provided by investing activities		28,907			240,290			(211,383	)
Net cash used in financing activities		(31,225	)		(231,225	)		200,000

Cash Flows from Operating Activities

Significant components of net cash used in operating activities include:

- In 2024, a decrease in rental income and a decrease to accounts payable, accrued expenses and other liabilities, partially offset by a decrease to tenant and other receivables.

Cash Flows from Investing Activities

Significant components of net cash provided by investing activities include:

−

In 2024, $44.3 million of net proceeds from the sale of real estate, offset by development of real estate of ($12.5) million and investments in unconsolidated entities of ($2.9) million; and

−

In 2023, $280.0 million of net proceeds from the sale of real estate offset by development of real estate of ($32.0) million and investments in unconsolidated entities of ($7.7) million.

- 31 -

Cash Flows from Financing Activities

Significant components of net cash used in financing activities include:

−

In 2024, ($30.0) million cash repayment of Term Loan Facility principal and cash payments of preferred dividends, ($1.2) million; and

−

In 2023, ($230.0) million cash repayment of Term Loan Facility principal and cash payments of preferred dividends, ($1.2) million.

Dividends and Distributions

The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during the three months ended March 31, 2024 and 2023, respectively.

The Company’s Board of Trustees declared the following dividends on preferred shares during 2024 and 2023:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2024
May 2	June 28	July 15	$	0.43750
February 29	March 29	April 15		0.43750
2023
October 30	December 29	January 16, 2024	$	0.43750
July 25	September 29	October 13		0.43750
April 27	June 30	July 14		0.43750
February 15	March 31	April 17		0.43750

The Board of Trustees will determine future distributions on the Company's common shares following the pay down of the Term Loan Facility.

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 March 31, 2024 and December 31, 2023, 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, 2023.

Capital Expenditures

During the three months ended March 31, 2024, the Company invested $12.5 million in our consolidated development and operating properties and an additional $2.9 million into our unconsolidated joint ventures, as we continue to advance our business plans, including our previously announced projects.

During the three ended March 31, 2023, the Company invested $32.0 million in our consolidated development and operating properties and an additional $7.7 million into our unconsolidated joint ventures.

During the three months ended March 31, 2024 and 2023, respectively, we incurred no maintenance capital expenditures that were not associated with re-tenanting and redevelopment projects.

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 contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

- 32 -

On March 2, 2021, we 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”). Our 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 litigation related to the bankruptcy of Sears Holdings (the "Litigation"). The Litigation was settled in 2022 and the Litigation was dismissed. Any amounts received from the insurers will offset the Seritage Defendants’ contribution. We reached settlement agreements with two of the D&O Insurers for gross proceeds of $12.7 million which is recorded in interest and other income in the consolidated statements of operations during the year ended December 31, 2022. In 2023, we reached settlement agreements with the other two D&O Insurers for gross proceeds of $11.6 million. We 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.

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, 2023 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the three months ended March 31, 2024, there were no material changes to these policies.

Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI and Total NOI which are financial measures that include adjustments to GAAP.

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. 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 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.

Due to the adjustments noted, NOI and Total NOI should only be used as an alternative measure of the Company’s financial performance.

- 33 -

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

Neither NOI nor 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 we deem most comparable are presented below on a comparative basis for all periods.

The following table reconciles NOI and Total NOI to GAAP net loss for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
NOI and Total NOI	2024			2023
Net loss	$	(18,985	)	$	(61,986	)
Management and other fee income		(48	)		(262	)
Depreciation and amortization		5,271			4,564
General and administrative expenses		9,192			12,220
Equity in (income) loss of unconsolidated entities		(379	)		36,372
Gain on sale of real estate, net		(1,139	)		(12,392	)
Impairment of real estate assets		1,148			2,576
Interest and other income, net		(1,423	)		(5,585	)
Interest expense		7,011			15,202
Provision (Benefit) for income taxes		11			(13	)
Straight-line rent		67			10,843
Above/below market rental expense		38			48
NOI	$	764		$	1,587
Unconsolidated entities
Net operating income of unconsolidated entities		1,531			1,659
Straight-line rent		(188	)		(147	)
Above/below market rental expense		(9	)		5
Total NOI	$	2,098		$	3,104

- 34 -

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in our 2023 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective due to the material weaknesses described below.

Notwithstanding the material weaknesses in our internal control over financial reporting, our principal executive officer and principal financial officer have concluded that the unaudited condensed consolidated financial statements included in this Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Material Weaknesses

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

As previously reported, management identified material weaknesses due to deficiencies in the design and operating effectiveness of our controls over the impairment of investments in real estate and other than temporary impairment of equity method investments. The deficiencies related to the identification of impairment indicators. Additionally, as management determined that it had not maintained adequate evidence of the review of information used in the impairment indicator analysis and the fair value of investments in real estate and equity method investments. As further reported, management had identified a deficiency in the operating effectiveness in our review over the calculation of other than temporary impairments. These deficiencies contributed to the potential for there to be material errors in our financial statements.

Additionally, as previously reported, management identified a material weakness due to a deficiency in the design of our controls over the accounting for certain non-routine transactions, particularly related to accounting for transactions with joint ventures and certain consulting contracts. For these transactions, Management did not possess the adequate technical capabilities to appropriately assess these non-routine transactions to ensure compliance with accounting principles generally accepted in the United States. This deficiency contributed to the potential for there to be material errors in our financial statements.

Update on Remediation Plan

As previously reported, in response to the material weaknesses, management, with oversight of the Audit Committee began to implement steps to remediate the material weaknesses. While the Company has made progress with the remediation of these material weaknesses, the remediation efforts are ongoing, because additional time is needed to complete the remediation and allow for the internal controls to be tested by management.

However, the material weaknesses discussed above cannot be considered completely remediated until the applicable controls are fully implemented, have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Accordingly, we will continue to monitor and evaluate the effectiveness of our internal control over financial reporting.

Changes in Internal Controls over Financial Reporting

Other than described above, there were no other changes in internal control over financial reporting that occurred during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 35 -

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is incorporated by reference to Note 9 of the condensed consolidated financial statements included herein.

Item 1A. Risk Factors

Please refer to Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 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, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

- 36 -

Item 6. Exhibits


Exhibit No.	Description	SEC Document Reference

31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

31.2	Certification of the Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Furnished herewith.

32.2	Certification of the Interim Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Furnished herewith.

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.

101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Filed herewith.

† Management contract or compensatory plan or arrangement.

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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 thereunto duly authorized.


	SERITAGE GROWTH PROPERTIES

Dated: May 10, 2024	/s/ Andrea Olshan
	By:	Andrea Olshan
	President and Chief Executive Officer (Principal Executive Officer)

Dated: May 10, 2024	/s/ John Garilli
	By:	John Garilli
	Interim Chief Financial Officer (Principal Financial and Accounting Officer)

- 38 -

Exhibit 31.1

CERTIFICATION

I, Andrea Olshan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ Andrea Olshan		Date: May 10, 2024
Andrea Olshan
President and Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, John Garilli, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ John Garilli		Date: May 10, 2024
John Garilli
Interim Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, Andrea Olshan, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

    /s/ Andrea Olshan

   

    Andrea Olshan
President and Chief Executive Officer
(Principal Executive Officer)
May 10, 2024

   

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, John Garilli, Interim Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

    /s/ John Garilli

   

    John Garilli
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
May 10, 2024

   

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 07, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Registrant Name	SERITAGE GROWTH PROPERTIES
Entity Central Index Key	0001628063
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	001-37420
Entity Tax Identification Number	38-3976287
Entity Address, Address Line One	500 Fifth Avenue
Entity Address, Address Line Two	Suite 1530
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10110
Entity Incorporation, State or Country Code	MD
City Area Code	212
Local Phone Number	355-7800
Document Quarterly Report	true
Document Transition Report	false
Series A Cumulative Redeemable Preferred Shares [Member]
Document Information [Line Items]
Title of 12(b) Security	7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share
Trading Symbol	SRG-PA
Security Exchange Name	NYSE
Class A Common Shares [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common shares of beneficial interest, par value $0.01 per share
Trading Symbol	SRG
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		56,268,317
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Investment in real estate
Land	$ 72,562	$ 102,090
Buildings and improvements	300,148	344,972
Accumulated depreciation	(31,514)	(36,025)
Real Estate Investment Property, at Cost, Total	341,196	411,037
Construction in progress	132,210	135,305
Net investment in real estate	473,406	546,342
Real estate held for sale	75,574	39,332
Investment in unconsolidated entities	199,810	196,437
Cash and cash equivalents	114,875	134,001
Restricted cash	15,883	15,699
Tenant and other receivables, net	9,907	12,246
Lease intangible assets, net	191	886
Prepaid expenses, deferred expenses and other assets, net	24,922	28,921
Total assets	914,568	973,864
Liabilities
Term loan facility, net	330,000	360,000
Accounts payable, accrued expenses and other liabilities	40,970	50,700
Total liabilities	370,970	410,700
Commitments and contingencies (Note 9)
Shareholders' Equity
Additional paid-in capital	1,362,386	1,361,742
Accumulated deficit	(820,552)	(800,342)
Total shareholders' equity	542,424	561,990
Non-controlling interests	1,174	1,174
Total equity	543,598	563,164
Total liabilities and shareholders' equity	914,568	973,864
Class A Common Shares [Member]
Shareholders' Equity
Common shares	562	562
Series A Preferred Shares [Member]
Shareholders' Equity
Preferred shares	$ 28	$ 28

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Land	$ 72,562	$ 102,090
Buildings and improvements	300,148	344,972
Accumulated depreciation	(31,514)	(36,025)
Variable Interest Entities
Land	3,300	3,300
Buildings and improvements	2,800	2,800
Accumulated depreciation	(800)	(800)
Other assets	$ 2,600	$ 2,400
Class A Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	100,000,000	100,000,000
Common shares, outstanding	56,262,944	56,194,727
Common shares, issued	56,262,944	56,194,727
Series A Preferred Shares [Member]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	10,000,000	10,000,000
Preferred shares, outstanding	2,800,000	2,800,000
Preferred shares, issued	2,800,000	2,800,000
Preferred shares, liquidation preference	$ 70,000	$ 70,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
REVENUE
Rental income	$ 5,725	$ 418
Management and other fee income	$ 48	$ 262
Type of Revenue [Extensible List]	Management and Other Fee Income [Member]	Management and Other Fee Income [Member]
Total revenue	$ 5,773	$ 680
EXPENSES
Property operating	3,673	8,185
Real estate taxes	1,393	1,537
Depreciation and amortization	5,271	4,564
General and administrative	9,192	12,220
Total expenses	19,529	26,506
Gain on sale of real estate, net	1,139	12,392
Impairment of real estate assets	(1,148)	(2,576)
Equity in income (loss) of unconsolidated entities	379	(36,372)
Interest and other income, net	1,423	5,585
Interest expense	(7,011)	(15,202)
Loss before income taxes	(18,974)	(61,999)
(Provision) benefit for income taxes	(11)	13
Net income (loss)	(18,985)	(61,986)
Preferred dividends	(1,225)	(1,225)
Net loss attributable to Seritage common shareholders	$ (20,210)	$ (63,211)
Net loss per share attributable to Seritage Class A common shareholders - Basic	$ (0.36)	$ (1.13)
Net loss per share attributable to Seritage Class A common shareholders - Diluted	$ (0.36)	$ (1.13)
Weighted average Class A common shares outstanding - Basic	56,215	56,059
Weighted average Class A common shares outstanding - Diluted	56,215	56,059

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Class A Common Shares [Member]	Common Stock [Member] Class A Common Shares [Member]	Preferred Stock [Member] Series A Preferred Shares [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]
Beginning balance at Dec. 31, 2022	$ 722,599		$ 561	$ 28	$ 1,360,411	$ (640,531)	$ 2,130
Beginning balance, shares at Dec. 31, 2022			56,053	2,800
Net loss	(61,986)					(61,986)
Preferred dividends declared	(1,225)					(1,225)
Vesting of restricted share units, shares			7
Share-based compensation	784				784
Sale of consolidated VIEs	(2,217)				(1,135)		(1,082)
Ending balance at Mar. 31, 2023	657,955		$ 561	$ 28	1,360,060	(703,742)	1,048
Ending balance, shares at Mar. 31, 2023			56,060	2,800
Beginning balance at Dec. 31, 2023	563,164		$ 562	$ 28	1,361,742	(800,342)	1,174
Beginning balance, shares at Dec. 31, 2023		56,194,727	56,195	2,800
Net loss	(18,985)					(18,985)
Preferred dividends declared	(1,225)					(1,225)
Vesting of restricted share units, shares			68
Share-based compensation	644				644
Ending balance at Mar. 31, 2024	$ 543,598		$ 562	$ 28	$ 1,362,386	$ (820,552)	$ 1,174
Ending balance, shares at Mar. 31, 2024		56,262,944	56,263	2,800

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Preferred dividends declared, per share	$ 0.4375	$ 0.4375

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (18,985)	$ (61,986)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in (income) loss of unconsolidated entities	(379)	36,372
Gain on sale of real estate, net	(1,139)	(12,392)
Impairment of real estate assets	1,148	2,576
Share-based compensation	644	774
Depreciation and amortization	5,271	4,564
Amortization of deferred financing costs		105
Amortization of above and below market leases, net	38	48
Straight-line rent adjustment	67	10,842
Change in operating assets and liabilities
Tenants and other receivables	4,351	4,668
Prepaid expenses, deferred expenses and other assets	2,406	5,034
Accounts payable, accrued expenses and other liabilities	(10,046)	(12,557)
Net cash used in operating activities	(16,624)	(21,952)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated entities	(2,925)	(7,665)
Net proceeds from sale of real estate	44,312	279,985
Development of real estate	(12,480)	(32,030)
Net cash provided by investing activities	28,907	240,290
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of term loan	(30,000)	(230,000)
Preferred dividends paid	(1,225)	(1,225)
Net cash used in financing activities	(31,225)	(231,225)
Net decrease in cash and cash equivalents	(18,942)	(12,887)
Cash and cash equivalents, and restricted cash, beginning of period	149,700	144,939
Cash and cash equivalents, and restricted cash, end of period	130,758	132,052
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	134,001	133,480
Restricted cash at beginning of period	15,699	11,459
Cash and cash equivalents at end of period	114,875	120,476
Restricted cash at end of period	15,883	11,576
Cash and cash equivalents and restricted cash at end of period	130,758	132,052
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	6,108	16,273
Capitalized interest		1,409
Income taxes paid	11	(13)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	20,581	22,196
Preferred dividends declared and unpaid	1,225	1,225
Transfer to / (from) real estate assets held for sale	$ 36,242	$ (209,723)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Organization

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Note 1 – Organization

As of March 15, 2021, the Company no longer had any remaining properties leased to Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc. or Sears Holdings.

Liquidity

Going Concern

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

Certain prior period amounts, if any, have been reclassified to conform to the current period’s presentation.

Use of Estimates

Segment Reporting

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range between:


Buildings:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

Real Estate Dispositions

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2024 and 2023 (in millions):


	Three Months Ended March 31,
	2024		2023
Dispositions to third parties
Gross proceeds	$	48.8	$	290.8
Gain on sale of real estate, net		1.1		12.4

Real Estate Held for Sale

Investments in Unconsolidated Entities

The Company recorded no other-than-temporary impairment losses in investments in unconsolidated entities for the three months ended March 31, 2024 and 2023.

Restricted Cash

As of March 31, 2024 and December 31, 2023, respectively, restricted cash represents cash collateral for letters of credit and cash escrowed for development purposes.

Rental Revenue Recognition and Tenant Receivables

Tenant and Other Receivables

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.

Share-Based Compensation

Concentration of Credit Risk

Earnings/(Loss) per Share

Income Taxes

Recently Issued Accounting Pronouncements

The Company has not adopted any Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board ("FASB") during the three months ended March 31, 2024.

Lease Intangible Assets and Liabilities

3 Months Ended

Mar. 31, 2024

Real Estate [Abstract]

Lease Intangible Assets and Liabilities

Note 3 – Lease Intangible Assets and Liabilities


March 31, 2024
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	294	$	(103	)	$	191
Total	$	294	$	(103	)	$	191


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(470	)	$	834
Total	$	1,304	$	(470	)	$	834


December 31, 2023
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	1,541	$	(655	)	$	886
Total	$	1,541	$	(655	)	$	886


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(456	)	$	848
Total	$	1,304	$	(456	)	$	848


	(Above) / below market leases, net		Below market ground lease		In-place leases
Remainder of 2024	$	7	$	152	$	1
2025		8		203		2
2026		8		203		2
2027		8		203		2
2028		8		203		2
2029		8		203		2
Thereafter		787		8,841		180

Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Note 4 – Investments in Unconsolidated Entities

As of March 31, 2024, the Company had investments in seven unconsolidated entities as follows:


		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC ("GGP I JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		87,500
GS Portfolio Holdings (2017) LLC ("GGP II JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		93,500
SPS Portfolio Holdings II LLC ("Simon JV")	Simon Property Group, Inc.	50.0%	3		275,700
Mark 302 JV LLC ("Mark 302 JV")	An investment fund managed by Invesco Real Estate	50.0%	1		51,500
SI UTC LLC ("UTC JV")	A separate account advised by Invesco Real Estate	50.0%	1		106,200
Tech Ridge JV Holding LLC ("Tech Ridge JV")	An affiliate of RD Management	50.0%	1		—
Landmark Land Holdings, LLC ("Landmark JV")	The Howard Hughes Corporation and Foulger-Pratt	31.3%	1		—
			9		614,400


		March 31, 2024
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2019
Tech Ridge JV (1)	September 27, 2019	$	3.0	$	0.1

(1)

The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV. The Contribution Value cannot be less than $2.75 million.

Summarized Financial Information for Unconsolidated Entities

The following tables present summarized financial data for UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	27,993		$	27,992
Buildings and improvements		158,264			149,625
Accumulated depreciation		(8,119	)		(6,592	)
		178,138			171,025
Construction in progress		2,437			2,362
Net investment in real estate		180,575			173,387
Cash and cash equivalents		8,347			7,355
Tenant and other receivables, net		11,206			11,289
Other assets, net		2,550			11,927
Total assets	$	202,678		$	203,958

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		14,592			18,133
Total liabilities		14,592			18,133

Members' Interest
Additional paid in capital		185,918			180,628
Retained earnings		2,168			5,197
Total members' interest		188,086			185,825
Total liabilities and members' interest	$	202,678		$	203,958
Carrying value of Company's investments in equity investments	$	98,651		$	97,018


	Three Months Ended March 31,
	2024			2023
Total revenue	$	4,571		$	1,943
Property operating expenses		(785	)		(776	)
Depreciation and amortization		(1,475	)		(973	)
Operating income		2,311			194
Other expenses		(143	)		(52	)
Net income	$	2,168		$	142
Equity in income of unconsolidated entities (1)	$	1,122		$	71
(1) Equity in income of unconsolidated entities on the consolidated statements of operations includes basis difference adjustments.

Summarized Financial Information for Unconsolidated Entities

The following tables present combined condensed financial data for the Company’s unconsolidated entities, excluding UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	117,439		$	117,439
Buildings and improvements		96,099			96,016
Accumulated depreciation		(43,828	)		(43,070	)
		169,710			170,385
Construction in progress		112,275			104,866
Net investment in real estate		281,985			275,251
Cash and cash equivalents		7,558			2,795
Tenant and other receivables, net		24			6
Other assets, net		31,505			34,098
Total assets	$	321,072		$	312,150

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		69,890			65,522
Total liabilities		69,890			65,522

Members' Interest
Additional paid in capital		296,790			340,311
Accumulated deficit		(45,608	)		(93,683	)
Total members' interest		251,182			246,628
Total liabilities and members' interest	$	321,072		$	312,150
Carrying value of Company's investments in equity investments	$	101,159		$	99,419


	Three Months Ended March 31,
	2024			2023
Total revenue	$	199		$	4,361
Property operating expenses		(923	)		(2,217	)
Depreciation and amortization		(758	)		(4,002	)
Operating loss		(1,482	)		(1,858	)
Other expenses		18			(224	)
Gains (losses) and (impairments)		—			(70,806	)
Net loss	$	(1,464	)	$	(72,888	)
Equity in loss of unconsolidated entities (1)	$	(743	)	$	(36,443	)

(1)

Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

Unconsolidated Entity Management and Related Fees

Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Note 5 – Leases

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2024 are approximately as follows:


(in thousands)	March 31, 2024
Remainder of 2024	$	15,385
2025		22,720
2026		21,543
2027		20,268
2028		17,690
2029		15,302
Thereafter		84,764
Total	$	197,672

The components of lease revenues for the three months ended March 31, 2024 and 2023 were as follows:


(in thousands)	Three Months Ended March 31,
	2024		2023
Fixed rental income	$	4,837	$	12,154
Variable rental income		942		(895	)
Total rental income	$	5,779	$	11,259

Lessee Disclosures

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2024:


	March 31, 2024
Weighted average remaining lease term (in years)		10.7
Weighted average discount rate		6.77	%
Cash paid for operating leases (in thousands)	$	330

Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

Note 6 – Debt

Term Loan Facility

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 – Income Taxes

The Company’s effective tax rate of 0% differs from the U.S. statutory rate of 21% in 2024 primarily due to the placement of a valuation allowance on its deferred tax assets.

Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 – Fair Value Measurements

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

Assets Measured at Fair Value on a Nonrecurring Basis


	Balance		Fair Value Measurements Using
Description (1)	March 31, 2024		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	8,325	$	8,325	$	-	$	-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.


	Balance		Fair Value Measurements Using
Description (1)	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	207,968	$	6,000	$	5,000	$	196,968
Impaired right-of-use assets		3,020		-		-		3,020
Other-than-temporary impaired investments in unconsolidated entities		14,739		-		14,739		-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.

Financial Assets and Liabilities not Measured at Fair Value

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9 – Commitments and Contingencies

Insurance

Environmental Matters

Litigation and Other Matters

during the three months ended March 31, 2023, which is recorded in interest and other income in the consolidated statements of operations.

Related Party Disclosure

3 Months Ended

Mar. 31, 2024

Related Party Disclosure

Note 10 – Related Party Disclosure

Edward S. Lampert

On July 6, 2022, Mr. Lampert converted all Operating Partnership Units (“OP Units”) to Class A common shares. As a result, he owns 24.0% of the outstanding Class A shares as of March 31, 2024.

Winthrop Capital Advisors

Unconsolidated Entities

Non-Controlling Interests

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Non-Controlling Interests

Note 11 – Non-Controlling Interests

Partnership Agreement

Shareholders' Equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Shareholders' Equity

Note 12 – Shareholders’ Equity

Class A Common Shares

As of March 31, 2024, 56,262,944 Class A common shares were issued and outstanding. Class A shares have a par value of $0.01 per share.

Class B Non-Economic Common Shares

As of March 31, 2024, there were no Class B non-economic common shares issued and outstanding.

Series A Preferred Shares

Dividends and Distributions

The Board of Trustees will determine future distributions following the pay down of the Term Loan Facility.

The Company’s Board of Trustees declared the following dividends on preferred shares during 2024 and 2023:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2024
May 2	June 28	July 15	$	0.43750
February 29	March 29	April 15		0.43750
2023
October 30	December 29	January 16, 2024	$	0.43750
July 25	September 29	October 13		0.43750
April 27	June 30	July 14		0.43750
February 15	March 31	April 17		0.43750

Earnings per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Earnings per Share

Note 13 – Earnings per Share


(in thousands except per share amounts)	Three Months Ended March 31,
	2024			2023
Numerator - Basic and Diluted
Net loss	$	(18,985	)	$	(61,986	)
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic	$	(20,210	)	$	(63,211	)

Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		56,215			56,059
Weighted average Class A common shares outstanding - Basic		56,215			56,059
Weighted average Class A common shares outstanding - Diluted		56,215			56,059

Loss per share attributable to Class A common shareholders - Basic	$	(0.36	)	$	(1.13	)
Loss per share attributable to Class A common shareholders - Diluted	$	(0.36	)	$	(1.13	)

As of March 31, 2024 and December 31, 2023, there were 98,398 and 361,645 shares, respectively, of non-vested restricted shares outstanding.

Share Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share Based Compensation

Note 14 – Share-Based Compensation

Restricted Shares and Share Units

The following table summarizes restricted share activity for the three months ended March 31, 2024:



	Three Months Ended March 31, 2024
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		361,645		$	14.31

Share units granted		-
Restricted shares vested		(131,272	)		13.48
Restricted shares forfeited		(131,975	)		17.18
Unvested restricted shares at end of period		98,398		$	11.55

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

Certain prior period amounts, if any, have been reclassified to conform to the current period’s presentation.

Use of Estimates

Segment Reporting

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range between:


Buildings:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

Real Estate Dispositions

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2024 and 2023 (in millions):


	Three Months Ended March 31,
	2024		2023
Dispositions to third parties
Gross proceeds	$	48.8	$	290.8
Gain on sale of real estate, net		1.1		12.4

Real Estate Held for Sale

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Entities

The Company recorded no other-than-temporary impairment losses in investments in unconsolidated entities for the three months ended March 31, 2024 and 2023.

Restricted Cash

As of March 31, 2024 and December 31, 2023, respectively, restricted cash represents cash collateral for letters of credit and cash escrowed for development purposes.

Rental Revenue Recognition and Tenant Receivables

Tenant and Other Receivables

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.

Share-Based Compensation

Concentration of Credit Risk

Earnings/(Loss) per Share

Income Taxes

Recently Issued Accounting Pronouncements

The Company has not adopted any Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board ("FASB") during the three months ended March 31, 2024.

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Estimated Useful Lives

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range between:


Buildings:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

Schedule of Gain on Sale of Real Estate

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2024 and 2023 (in millions):


	Three Months Ended March 31,
	2024		2023
Dispositions to third parties
Gross proceeds	$	48.8	$	290.8
Gain on sale of real estate, net		1.1		12.4

Lease Intangible Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Real Estate [Abstract]

Summary of Lease Intangible Assets


March 31, 2024
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	294	$	(103	)	$	191
Total	$	294	$	(103	)	$	191


December 31, 2023
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	1,541	$	(655	)	$	886
Total	$	1,541	$	(655	)	$	886

Summary of Lease Intangible Liabilities


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(470	)	$	834
Total	$	1,304	$	(470	)	$	834


	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	1,304	$	(456	)	$	848
Total	$	1,304	$	(456	)	$	848

Schedule of Future Amortization of Acquired Leases

Future amortization of these leases intangibles is set forth below (in thousands):


	(Above) / below market leases, net		Below market ground lease		In-place leases
Remainder of 2024	$	7	$	152	$	1
2025		8		203		2
2026		8		203		2
2027		8		203		2
2028		8		203		2
2029		8		203		2
Thereafter		787		8,841		180

Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Summary of Company's Investments in Unconsolidated Entities

As of March 31, 2024, the Company had investments in seven unconsolidated entities as follows:


		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC ("GGP I JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		87,500
GS Portfolio Holdings (2017) LLC ("GGP II JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		93,500
SPS Portfolio Holdings II LLC ("Simon JV")	Simon Property Group, Inc.	50.0%	3		275,700
Mark 302 JV LLC ("Mark 302 JV")	An investment fund managed by Invesco Real Estate	50.0%	1		51,500
SI UTC LLC ("UTC JV")	A separate account advised by Invesco Real Estate	50.0%	1		106,200
Tech Ridge JV Holding LLC ("Tech Ridge JV")	An affiliate of RD Management	50.0%	1		—
Landmark Land Holdings, LLC ("Landmark JV")	The Howard Hughes Corporation and Foulger-Pratt	31.3%	1		—
			9		614,400

Summary of Properties Contributed In Unconsolidated Entities

The following table summarizes the properties contributed to the Company’s unconsolidated entities (in millions):


		March 31, 2024
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2019
Tech Ridge JV (1)	September 27, 2019	$	3.0	$	0.1

(1)

The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV. The Contribution Value cannot be less than $2.75 million.

Summary of Combined Condensed Financial Data of Unconsolidated Entities

The following tables present summarized financial data for UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	27,993		$	27,992
Buildings and improvements		158,264			149,625
Accumulated depreciation		(8,119	)		(6,592	)
		178,138			171,025
Construction in progress		2,437			2,362
Net investment in real estate		180,575			173,387
Cash and cash equivalents		8,347			7,355
Tenant and other receivables, net		11,206			11,289
Other assets, net		2,550			11,927
Total assets	$	202,678		$	203,958

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		14,592			18,133
Total liabilities		14,592			18,133

Members' Interest
Additional paid in capital		185,918			180,628
Retained earnings		2,168			5,197
Total members' interest		188,086			185,825
Total liabilities and members' interest	$	202,678		$	203,958
Carrying value of Company's investments in equity investments	$	98,651		$	97,018


	Three Months Ended March 31,
	2024			2023
Total revenue	$	4,571		$	1,943
Property operating expenses		(785	)		(776	)
Depreciation and amortization		(1,475	)		(973	)
Operating income		2,311			194
Other expenses		(143	)		(52	)
Net income	$	2,168		$	142
Equity in income of unconsolidated entities (1)	$	1,122		$	71
(1) Equity in income of unconsolidated entities on the consolidated statements of operations includes basis difference adjustments.

Summarized Financial Information for Unconsolidated Entities

The following tables present combined condensed financial data for the Company’s unconsolidated entities, excluding UTC JV (in thousands):


	March 31, 2024			December 31, 2023
ASSETS
Investment in real estate
Land	$	117,439		$	117,439
Buildings and improvements		96,099			96,016
Accumulated depreciation		(43,828	)		(43,070	)
		169,710			170,385
Construction in progress		112,275			104,866
Net investment in real estate		281,985			275,251
Cash and cash equivalents		7,558			2,795
Tenant and other receivables, net		24			6
Other assets, net		31,505			34,098
Total assets	$	321,072		$	312,150

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		69,890			65,522
Total liabilities		69,890			65,522

Members' Interest
Additional paid in capital		296,790			340,311
Accumulated deficit		(45,608	)		(93,683	)
Total members' interest		251,182			246,628
Total liabilities and members' interest	$	321,072		$	312,150
Carrying value of Company's investments in equity investments	$	101,159		$	99,419


	Three Months Ended March 31,
	2024			2023
Total revenue	$	199		$	4,361
Property operating expenses		(923	)		(2,217	)
Depreciation and amortization		(758	)		(4,002	)
Operating loss		(1,482	)		(1,858	)
Other expenses		18			(224	)
Gains (losses) and (impairments)		—			(70,806	)
Net loss	$	(1,464	)	$	(72,888	)
Equity in loss of unconsolidated entities (1)	$	(743	)	$	(36,443	)

(1)

Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2024 are approximately as follows:


(in thousands)	March 31, 2024
Remainder of 2024	$	15,385
2025		22,720
2026		21,543
2027		20,268
2028		17,690
2029		15,302
Thereafter		84,764
Total	$	197,672

Components of Lease Revenues

The components of lease revenues for the three months ended March 31, 2024 and 2023 were as follows:


(in thousands)	Three Months Ended March 31,
	2024		2023
Fixed rental income	$	4,837	$	12,154
Variable rental income		942		(895	)
Total rental income	$	5,779	$	11,259

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2024:


	March 31, 2024
Weighted average remaining lease term (in years)		10.7
Weighted average discount rate		6.77	%
Cash paid for operating leases (in thousands)	$	330

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on Nonrecurring Basis


	Balance		Fair Value Measurements Using
Description (1)	March 31, 2024		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	8,325	$	8,325	$	-	$	-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.


	Balance		Fair Value Measurements Using
Description (1)	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	207,968	$	6,000	$	5,000	$	196,968
Impaired right-of-use assets		3,020		-		-		3,020
Other-than-temporary impaired investments in unconsolidated entities		14,739		-		14,739		-

(1) Represents non-recurring fair value measurement. The fair value is calculated as of the impairment date.

Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Series A Preferred Shares [Member]

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees declared the following dividends on preferred shares during 2024 and 2023:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2024
May 2	June 28	July 15	$	0.43750
February 29	March 29	April 15		0.43750
2023
October 30	December 29	January 16, 2024	$	0.43750
July 25	September 29	October 13		0.43750
April 27	June 30	July 14		0.43750
February 15	March 31	April 17		0.43750

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Reconciliation of Net Income (Loss) and Number of Common Shares Used in Computations of Basic Earnings Per Share


(in thousands except per share amounts)	Three Months Ended March 31,
	2024			2023
Numerator - Basic and Diluted
Net loss	$	(18,985	)	$	(61,986	)
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic	$	(20,210	)	$	(63,211	)

Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		56,215			56,059
Weighted average Class A common shares outstanding - Basic		56,215			56,059
Weighted average Class A common shares outstanding - Diluted		56,215			56,059

Loss per share attributable to Class A common shareholders - Basic	$	(0.36	)	$	(1.13	)
Loss per share attributable to Class A common shareholders - Diluted	$	(0.36	)	$	(1.13	)

Share Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Restricted Share

The following table summarizes restricted share activity for the three months ended March 31, 2024:



	Three Months Ended March 31, 2024
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		361,645		$	14.31

Share units granted		-
Restricted shares vested		(131,272	)		13.48
Restricted shares forfeited		(131,975	)		17.18
Unvested restricted shares at end of period		98,398		$	11.55

Organization - Additional Information (Detail) $ in Thousands, ft² in Millions				3 Months Ended			12 Months Ended
	May 01, 2024 USD ($)	Feb. 02, 2023 USD ($)	Jul. 07, 2015 USD ($) JointVenture	Mar. 31, 2024 USD ($) ft² Property Acres	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) Property	Dec. 31, 2022	May 10, 2024 USD ($)
Organization And Basis Of Presentation [Line Items]
Number of properties interested in the portfolio \| Property				27
Number of acres held under development \| Acres				410
Number of real estate properties \| Property							6
Non cash deferred tax benefit due to revocation of REIT status						$ 161,300
Net cash (used in) provided by operating activities				$ 16,624	$ 21,952
Net cash (used in) provided by investing activities				28,907	240,290
Anticipated proceeds from sale of real estate property				30,000
Proceeds from sale of assets				$ 44,312	$ 279,985
Minimum percentage of outstanding common stock required for affirmative vote to approve plan of sale				66.67%
Term Loan Facility [Member]
Organization And Basis Of Presentation [Line Items]
Principal amount outstanding		$ 800,000		$ 330,000
Number of properties sold \| Property				5
Proceeds from sale of assets				$ 48,800
Principal payment on loan		$ 230,000		$ 30,000			$ 440,000
Debt instrument extended maturity term		2 years
Line of credit, extended maturity date		Jul. 31, 2025		Jul. 31, 2025
Term Loan Facility [Member] \| Subsequent Event [Member]
Organization And Basis Of Presentation [Line Items]
Principal amount outstanding	$ 280,000								$ 280,000
Principal payment on loan	$ 50,000
Minimum [Member]
Organization And Basis Of Presentation [Line Items]
Distribution of taxable income to qualify as REIT, percent				90.00%				90.00%
Voting and Support Agreement [Member] \| Former Chairman [Member]
Organization And Basis Of Presentation [Line Items]
Percentage ownership of outstanding common shares after effect of exchange of operating partnership interest				24.00%
COVID-19 Pandemic [Member]
Organization And Basis Of Presentation [Line Items]
Net cash (used in) provided by operating activities				$ (16,600)
Net cash (used in) provided by investing activities				$ 28,900
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price			$ 2,700,000
Interests in joint ventures acquired			50.00%
Number of joint venture acquired \| JointVenture			3
Unconsolidated Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) \| ft²				1.2
Number of acres held under development \| Acres				134
Consolidated Properties [Member]
Organization And Basis Of Presentation [Line Items]
Number of acres held under development \| Acres				276
Real Estate Investment Trust [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) \| ft²				3.5
Real Estate Investment Trust [Member] \| Consolidated Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) \| ft²				2.3
Number of real estate properties \| Property				18

Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($) Segment JointVenture Entity Tenant State Property shares	Mar. 31, 2023 USD ($)	Dec. 31, 2022	Dec. 31, 2023 USD ($) Property
Summary Of Significant Accounting Policies [Line Items]
Number of VIEs consolidated \| Entity	1
Number of reportable segments \| Segment	1
Impairment of real estate assets	$ 1,148,000	$ 2,576,000
Number of properties classified \| Property				6
Real estate held for sale, assets	75,574,000			$ 39,332,000
Real estate held for sale, liabilities	0			$ 0
Impairment loss	0	0
Increase (reduction) to rental income	(29,700)	(900,000)
Reversal of straight line rent	$ 66,500	$ 100,000
Revenue performance obligation satisfied over time method used description	Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation.
Number of tenant \| Tenant	1
Annualized based rent	15.40%
Number of consolidated properties acquired \| Property	18
Percentage of corporate alternative minimum tax	15.00%
Corporate alternative minimum tax amount	$ 1,000,000,000
Number of entities acquired \| JointVenture	9
Number of states in properties located \| State	10
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Distribution of taxable income to qualify as REIT, percent	90.00%		90.00%
Class C Common Shares [Member]
Summary Of Significant Accounting Policies [Line Items]
Common shares, outstanding \| shares	0
Class B Common Shares [Member]
Summary Of Significant Accounting Policies [Line Items]
Common shares, outstanding \| shares	0
Management and Other Fee Income [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of revenue earned from unconsolidated joint ventures	100.00%
Operating Partnership [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent	100.00%

Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	Mar. 31, 2024
Minimum [Member] \| Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	25 years
Minimum [Member] \| Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Maximum [Member] \| Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Maximum [Member] \| Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	15 years

Summary of Significant Accounting Policies - Schedule of Gain on Sale of Real Estate (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Dispositions to third parties
Gross proceeds	$ 48.8	$ 290.8
Gain on sale of real estate, net	$ 1.1	$ 12.4

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 294	$ 1,541
Accumulated Amortization	(103)	(655)
Balance	191	886
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	294	1,541
Accumulated Amortization	(103)	(655)
Balance	$ 191	$ 886

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Below-Market Leases [Abstract]
Gross Liability	$ 1,304	$ 1,304
Accumulated Amortization	(470)	(456)
Balance	$ 834	$ 848

Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization of below-market leases, net of above-market leases	$ 13,400	$ 100,000
Additional property expense	50,700	50,700
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 19,300	$ 200,000

Lease Intangible Assets and Liabilities - Schedule of Future Amortization of Intangibles (Detail) $ in Thousands	Mar. 31, 2024 USD ($)
(Above)/ Below Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2024	$ 7
2025	8
2026	8
2027	8
2028	8
2029	8
Thereafter	787
Below market ground lease [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2024	152
2025	203
2026	203
2027	203
2028	203
2029	203
Thereafter	8,841
In-Place Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2024	1
2025	2
2026	2
2027	2
2028	2
2029	2
Thereafter	$ 180

Investments in Unconsolidated Entities - Summary of Company's Investments in Unconsolidated Entities (Detail)	3 Months Ended
	Mar. 31, 2024 ft² Property
Income Statement Equity Method Investments [Line Items]
Number of Properties	9
Total GLA \| ft²	614,400
Brookfield Properties Retail I [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA \| ft²	87,500
Brookfield Properties Retail II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA \| ft²	93,500
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	3
Total GLA \| ft²	275,700
Invesco Real Estate [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA \| ft²	51,500
Invesco Real Estate II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA \| ft²	106,200
RD Management [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
The Howard Hughes Corporation and Foulger-Pratt [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	31.30%
Number of Properties	1

Investments in Unconsolidated Entities - Summary of Properties Contributed In Unconsolidated Entities (Detail) - Tech Ridge JV [Member]
$ in Millions

3 Months Ended

Mar. 31, 2024

USD ($)

^[1]

Contribution Date

Sep. 27, 2019

Contribution Value

$ 3.0

Gain (Loss)

$ 0.1

[1]	The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV. The Contribution Value cannot be less than $2.75 million.

Investments in Unconsolidated Entities - Summary of Properties Contributed In Unconsolidated Entities (Parenthetical) (Detail)	Sep. 27, 2019 USD ($)
Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value	$ 2,750,000

Investments in Unconsolidated Entities - Additional Information (Detail)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($) Property Entity	Mar. 31, 2023 USD ($)	Dec. 31, 2023 Property
Schedule of Equity Method Investments [Line Items]
Impairment investments in unconsolidated entities	$ 0	$ 0
Number of put rights option exercised on unconsolidated properties \| Property	0
Number of unconsolidated entity sold its interest \| Property			4
Number of Investments in unconsolidated entities \| Entity	7
Unconsolidated Properties [Member]
Schedule of Equity Method Investments [Line Items]
Impairment	$ 0	70,800,000
Mark 302 JV, UTC JV and Tech Ridge JV [Member]
Schedule of Equity Method Investments [Line Items]
Income earned from management and related fees	$ 50,000	$ 300,000

Investments in Unconsolidated Entities - Summary of Combined Condensed Financial Data of Unconsolidated Entities (Detail) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2023

Dec. 31, 2022

Investment in real estate

Land

$ 72,562

$ 102,090

Accumulated depreciation

(31,514)

(36,025)

Net investment in real estate

473,406

546,342

Cash and cash equivalents

114,875

$ 120,476

134,001

$ 133,480

Investment in unconsolidated entities

199,810

196,437

Total assets

914,568

973,864

Liabilities

Total liabilities

370,970

410,700

Members' Interest

Retained earnings (accumulated deficit)

(820,552)

(800,342)

Total equity

543,598

657,955

563,164

$ 722,599

Total liabilities and shareholders' equity

914,568

973,864

Carrying value of Company's investments in equity investments

101,159

99,419

Total revenue

5,773

680

Net income (loss)

(18,985)

(61,986)

Unconsolidated Entities Including UTC JV [Member]

Investment in real estate

Land

27,993

27,992

Buildings and improvements

158,264

149,625

Accumulated depreciation

(8,119)

(6,592)

Investment in real estate, gross

178,138

171,025

Construction in progress

2,437

2,362

Net investment in real estate

180,575

173,387

Cash and cash equivalents

8,347

7,355

Tenant and other receivables, net

11,206

11,289

Other assets, net

2,550

11,927

Total assets

202,678

203,958

Liabilities

Accounts payable, accrued expenses and other liabilities

14,592

18,133

Total liabilities

14,592

18,133

Members' Interest

Additional paid in capital

185,918

180,628

Retained earnings (accumulated deficit)

2,168

5,197

Total equity

188,086

185,825

Total liabilities and shareholders' equity

202,678

203,958

Total revenue

4,571

1,943

Property operating expenses

(785)

(776)

Depreciation and amortization

(1,475)

(973)

Operating income (loss)

2,311

194

Other expenses

(143)

(52)

Net income (loss)

2,168

142

Equity in income (loss) of unconsolidated entities

^[1]

1,122

Unconsolidated Entities [Member] | Unconsolidated Entities Excluding UTC JV [Member]

Investment in real estate

Land

117,439

Buildings and improvements

96,099

96,016

Accumulated depreciation

(43,828)

(43,070)

Investment in real estate, gross

169,710

170,385

Construction in progress

112,275

104,866

Net investment in real estate

281,985

275,251

Cash and cash equivalents

7,558

2,795

Tenant and other receivables, net

Other assets, net

31,505

34,098

Total assets

321,072

312,150

Liabilities

Accounts payable, accrued expenses and other liabilities

69,890

65,522

Total liabilities

69,890

65,522

Members' Interest

Additional paid in capital

296,790

340,311

Retained earnings (accumulated deficit)

(45,608)

(93,683)

Total equity

251,182

246,628

Total liabilities and shareholders' equity

321,072

$ 312,150

Total revenue

199

4,361

Property operating expenses

(923)

(2,217)

Depreciation and amortization

(758)

(4,002)

Operating income (loss)

(1,482)

(1,858)

Other expenses

(224)

Gains (losses) and (impairments)

(70,806)

Net income (loss)

(1,464)

(72,888)

Equity in income (loss) of unconsolidated entities

^[1]

$ (743)

$ (36,443)

[1]	Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

Leases - Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases (Detail) $ in Thousands	Mar. 31, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 15,385
2025	22,720
2026	21,543
2027	20,268
2028	17,690
2029	15,302
Thereafter	84,764
Total	$ 197,672
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Sale Leaseback Financing Obligations

Leases - Components of Lease Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Lessor Disclosure [Abstract]
Fixed rental income	$ 4,837	$ 12,154
Variable rental income	942	(895)
Total rental income	$ 5,779	$ 11,259
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Lease Income	Lease Income

Leases - Additional Information (Details)		1 Months Ended	3 Months Ended
Leases - Additional Information (Details)	May 10, 2024 USD ($)	May 10, 2024	Mar. 31, 2024 USD ($) Property	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of properties subject to ground lease \| Property			1
Number of properties subject to corporate office lease \| Property			1
ROU assets			$ 14,200,000		$ 14,400,000
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]			Prepaid Expense and Other Assets		Prepaid Expense and Other Assets
Expected cash payments on operating leases for the remainder of 2024			$ 800,000
Expected cash payments on operating leases in 2025			1,200,000
Expected cash payments on operating leases in 2026			1,200,000
Expected cash payments on operating leases in 2027			1,200,000
Expected cash payments on operating leases in 2028			800,000
Expected cash payments on operating leases in 2029			45,000
Expected cash payments on operating leases, thereafter			2,000,000
Present value discount			$ (3,100,000)
Operating leases expiration year			2073
Reduction in initial lease term		37 months
Subsequent Event [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Payment to terminate lease	$ 1,600,000
Initial lease end date		Aug. 30, 2028
Revised lease end date		Jul. 31, 2025
General and Administrative Expenses [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense			$ 300,000	$ 300,000
Property Operating Expense [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense			$ 100,000	$ 100,000

Leases - Information Related to Measurement of Lease Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Lessee Disclosure [Abstract]
Weighted average remaining lease term (in years)	10 years 8 months 12 days
Weighted average discount rate	6.77%
Cash paid for operating leases (in thousands)	$ 330

Debt - Additional Information (Detail) - Term Loan Facility [Member] - USD ($)							3 Months Ended	12 Months Ended
	May 01, 2024	Jul. 31, 2023	Feb. 02, 2023	Nov. 24, 2021	May 05, 2020	Jul. 31, 2018	Mar. 31, 2024	Dec. 31, 2023	May 10, 2024
Debt Instrument [Line Items]
Principal payment on loan			$ 230,000,000				$ 30,000,000	$ 440,000,000
Principal amount outstanding			$ 800,000,000				$ 330,000,000
Line of credit, extended maturity date			Jul. 31, 2025				Jul. 31, 2025
Repayments of principal balance							$ 1,270,000,000
Debt instrument extended maturity term			2 years
Subsequent Event [Member]
Debt Instrument [Line Items]
Principal payment on loan	$ 50,000,000
Principal amount outstanding	$ 280,000,000								$ 280,000,000
Berkshire Hathaway [Member]
Debt Instrument [Line Items]
Date of senior secured term loan agreement						Jul. 31, 2018
Principal amount outstanding						$ 2,000,000,000
Line of credit, maturity date							Jul. 31, 2023
Line of credit, extended maturity date							Jul. 31, 2025
Minimum rental income to achieve from tenants on annual basis to access incremental funding facility							$ 200,000,000
Minimum rental income to achieve from tenants for succeeding four consecutive fiscal quarters to access incremental funding facility							200,000,000
Minimum net worth required for loan documentation on book basis							$ 1,200,000,000
Default interest rate on overdue amounts excess of base interest rate					2.00%		2.00%
Debt issuance costs							$ 2,100,000
Deferred interest					$ 400,000,000
Debt instrument extended maturity term				2 years
Principal reduced by maturity date		$ 800,000,000
Berkshire Hathaway [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio for each fiscal quarter after June 30, 2023							1.20%
Unencumbered fixed charge coverage ratio to each fiscal quarter after June 30, 2023							1.30%
Berkshire Hathaway [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Unencumbered fixed charge coverage ratio							60.00%
Maximum leverage ratio							65.00%
Berkshire Hathaway [Member] \| Maximum [Member] \| Unrestricted Cash [Member]
Debt Instrument [Line Items]
Available cash					$ 30,000,000
Berkshire Hathaway [Member] \| Initial Funding [Member]
Debt Instrument [Line Items]
Principal amount outstanding						1,600,000,000
Debt instrument, base annual interest rate							7.00%
Berkshire Hathaway [Member] \| Incremental Funding Facility [Member]
Debt Instrument [Line Items]
Principal amount outstanding						$ 400,000,000
Debt instrument, base annual interest rate							1.00%

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Contingency [Line Items]
Non cash deferred tax benefit due to revocation of REIT status			$ 161.3
Deferred income tax benefit	$ 4.8	$ 5.5
Valuation allowance	$ 203.6
U.S. statutory rate	21.00%
Effective tax rate	0.00%
Deferred tax assets valuation allowance	$ 203.6
Minimum [Member]
Income Tax Contingency [Line Items]
Distribution of taxable income to qualify as REIT, percent	90.00%			90.00%

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment loss on real estate assets	$ 1,148,000	$ 2,576,000
Impairment of investments in unconsolidated entities	$ 0	0
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs capitalization rate	5.50%
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs capitalization rate	8.00%
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt obligations, fair value	$ 322,700,000		$ 349,500,000
Loss on Impairment [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment loss on real estate assets	$ 1,100,000	$ 2,600,000

Fair Value Measurements - Schedule of Assets Measured at Fair Value on Nonrecurring Basis (Details) - Non-recurring Basis [Member] - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Impaired Real Estate Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 8,325	$ 207,968
Impaired Real Estate Assets [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 8,325	6,000
Impaired Real Estate Assets [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		5,000
Impaired Real Estate Assets [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		196,968
Impaired Right-of-use Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		3,020
Impaired Right-of-use Assets [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		3,020
Other-than-temporary Impaired Investments in Unconsolidated Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		14,739
Other-than-temporary Impaired Investments in Unconsolidated Entities [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		$ 14,739

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Loss Contingencies [Line Items]
Gross proceeds from litigation settlement	$ 11.6	$ 12.7
Interest and Other Income [Member]
Loss Contingencies [Line Items]
Gross proceeds from litigation settlement	$ 3.8

Related Party Disclosure - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($) Property	Dec. 31, 2023 USD ($)
Schedule of Other Related Party Transactions [Line Items]
Property development expenditures receivable	$ 9,907		$ 12,246
Number of put rights exercised on property to partners \| Property		1
Chief Financial Officer [Member]
Schedule of Other Related Party Transactions [Line Items]
Payment of monthly fee and reimburesement expense	$ 800	$ 700
Operating Partnership [Member] \| Sears Holdings Corporation [Member] \| Class A Common Shares [Member] \| ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	24.00%

Non-controlling Interests - Additional Information (Detail)	Mar. 31, 2024
Operating Partnership [Member]
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	100.00%

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Mar. 31, 2024	Dec. 31, 2023	Dec. 14, 2022	Jul. 07, 2015
Class B Non Economic Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued		0
Common shares, outstanding		0
Class A Common Shares [Member]
Class of Stock [Line Items]
Common shares, par value		$ 0.01	$ 0.01		$ 0.01
Common shares, issued		56,262,944	56,194,727
Common shares, outstanding		56,262,944	56,194,727
Series A Cumulative Redeemable Preferred Shares [Member]
Class of Stock [Line Items]
Preferred shares, issued	2,800,000
Percentage of preferred dividend rate	7.00%
Preferred shares public offering price per share	$ 25.00
Net proceeds from public offering	$ 66.4
Preferred shares redemption price per share plus any accrued and unpaid dividends				$ 25.00

Shareholders' Equity - Summary of Preferred Stock Dividends and Distributions (Detail) - $ / shares							3 Months Ended
	May 02, 2024	Feb. 29, 2024	Oct. 30, 2023	Jul. 25, 2023	Apr. 27, 2023	Feb. 15, 2023	Mar. 31, 2024	Mar. 31, 2023
Dividends Payable [Line Items]
Preferred Share							$ 0.4375	$ 0.4375
Series A Preferred Shares [Member]
Dividends Payable [Line Items]
Declaration Date		Feb. 29, 2024	Oct. 30, 2023	Jul. 25, 2023	Apr. 27, 2023	Feb. 15, 2023
Record Date		Mar. 29, 2024	Dec. 29, 2023	Sep. 29, 2023	Jun. 30, 2023	Mar. 31, 2023
Payment Date		Apr. 15, 2024	Jan. 16, 2023	Oct. 13, 2023	Jul. 14, 2023	Apr. 17, 2023
Preferred Share		$ 0.4375	$ 0.4375	$ 0.4375	$ 0.4375	$ 0.4375
Series A Preferred Shares [Member] \| Subsequent Event [Member]
Dividends Payable [Line Items]
Declaration Date	May 02, 2024
Record Date	Jun. 28, 2024
Payment Date	Jul. 15, 2024
Preferred Share	$ 0.4375

Earnings per Share - Reconciliation of Net Income (Loss) and Number of Common Shares Used in Computations of Basic Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator - Basic and Diluted
Net loss	$ (18,985)	$ (61,986)
Preferred dividends	(1,225)	(1,225)
Net loss attributable to Seritage common shareholders	$ (20,210)	$ (63,211)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding	56,215	56,059
Weighted average Class A common shares outstanding - Diluted	56,215	56,059
Loss per share attributable to Class A common shareholders - Basic	$ (0.36)	$ (1.13)
Loss per share attributable to Class A common shareholders - Diluted	$ (0.36)	$ (1.13)
Class A Common Shares [Member]
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding	56,215	56,059

Earnings Per Share - Additional Information (Detail) - shares	Mar. 31, 2024	Dec. 31, 2023
Time Based Restricted Shares and Share Units [Member]
Earning Per Share [Line Items]
Non-vested restricted shares outstanding	98,398	361,645

Share Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Jul. 07, 2015
Time Based Restricted Shares and Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Restricted Share [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 1.0	$ 3.7
Unrecognized compensation costs, weighted average expected recognition period	10 months 24 days	1 year 7 months 6 days
Restricted Share [Member] \| General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized	$ 0.6	$ 0.8
Seritage Growth Properties 2015 Share Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance			3,250,000

Share Based Compensation - Summary of Restricted Share (Detail) - Restricted Share [Member]	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares at beginning of period \| shares	361,645
Restricted shares vested \| shares	(131,272)
Restricted shares forfeited \| shares	(131,975)
Unvested restricted shares at end of period \| shares	98,398
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period \| $ / shares	$ 14.31
Weighted-Average Grant Date Fair Value, Restricted shares vested \| $ / shares	13.48
Weighted-Average Grant Date Fair Value, Restricted shares forefeited \| $ / shares	17.18
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period \| $ / shares	$ 11.55

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