Results Seritage Growth Properties Reports Q1 2025 Operating Performance
NEW YORK, May 15, 2025 — Seritage Growth Properties (NYSE: SRG), a national real estate investment trust (REIT) focused on owning, developing, and selling retail, residential, and mixed-use properties, today announced its financial and operational results for the three-month period ended March 31, 2025. The report reflects the Company’s continued progress in executing its strategic Plan of Sale and monetizing assets to repay outstanding debt and deliver shareholder value.
CEO Transition and Strategic Focus
Following a smooth leadership transition, Interim CEO and President Adam Metz reaffirmed the Company’s commitment to its strategic direction. “The Company’s strategy following the completion of a smooth CEO transition remains the same,” Metz stated. “We will continue to pursue our Plan of Sale with the priority of repaying our remaining debt from the sale of assets. Our team is focused on executing transactions at appropriate pricing for our assets already in the market, as well as taking the necessary steps to monetize the remaining assets in our portfolio to create value for our shareholders.”
First Quarter 2025 Sale Highlights
During the first quarter of 2025, Seritage made significant progress in asset disposition, generating gross proceeds of $29.9 million from the sale of an income-producing asset. This transaction achieved a capitalization rate of 7.7%, underscoring the Company’s ability to secure favorable terms in current market conditions.
As of May 15, 2025, Seritage had an additional asset, owned through a consolidated joint venture, under contract for sale. This pending transaction, which remains subject to customary due diligence, is expected to yield gross proceeds of $14.0 million, or $11.2 million at Seritage’s share.
In addition, the Company is in the final stages of negotiating a definitive purchase and sale agreement for a premier development asset. If executed, the deal would generate approximately $70.0 million in gross proceeds. However, the agreement anticipates a long-dated closing due to both parties’ commitment to pursue an amendment to the asset’s master plan, which is expected to enhance its long-term value.
Financial Overview for Q1 2025
As of March 31, 2025, Seritage held total cash of $107.1 million, of which $12.9 million was classified as restricted. By May 13, 2025, cash levels slightly decreased to $99.9 million, including $11.9 million in restricted funds. These resources provide the Company with operational flexibility as it continues its asset monetization process.
The Company invested $13.3 million into its consolidated properties during the quarter to maintain and improve asset value. Despite this investment, Seritage reported a net loss attributable to common shareholders of $23.4 million, or $0.42 per share. The Company’s net operating income on a cash basis, adjusted for its ownership share (NOI-cash basis at share), stood at $2.6 million.
Future Sales Projections and Asset Portfolio
Looking ahead, Seritage has a range of assets in its pipeline that are either currently being marketed or are scheduled to be marketed later in 2025, depending on market dynamics. The Company’s latest internal estimates for potential gross sales proceeds from these assets—excluding those already under contract or in active negotiation—are as follows:
Gateway Markets:
- One multi-tenant asset: $25–$30 million
- Eight premier assets (Dallas and San Diego each assumed to be sold in two parts):
- One asset: $15–$20 million
- One asset: $20–$30 million
- Three assets: $30–$40 million each
- One asset: $60–$70 million
- One asset: $100–$150 million
- One asset: $150–$200 million
Primary Markets:
- One multi-tenant asset: $25–$30 million
- Two joint venture assets: $5–$10 million each
- One joint venture asset: under $5 million
Secondary Markets:
- One retail asset: $5–$10 million
- One joint venture asset: under $5 million
- One non-core asset: $5–$10 million
These figures are based on Seritage’s most recent internal forecasts and assumptions. However, the Company cautions that actual sale prices and timelines may vary significantly due to market conditions. Investors are encouraged to review the “Market Update” and “Risk Factors” sections in Seritage’s filings with the Securities and Exchange Commission for further details on associated risks.
Operational and Leasing Activity
During the quarter ended March 31, 2025, Seritage executed new leases totaling over 141,000 square feet. This brought total leased space across its multi-tenant retail properties to 391,000 square feet, representing a robust occupancy rate of 92%. An additional 34,000 square feet remained available for lease as of quarter-end.
Premier Mixed-Use Assets
The Company continues to see leasing traction at its premier mixed-use assets. As of March 31, 2025, the portfolio included:
- 352,000 square feet of in-place leased space (246,000 square feet at Seritage’s proportional share)
- 50,000 square feet of space signed but not yet opened (fully at share)
- 141,000 square feet of available space (90,000 square feet at share)
In Aventura, Florida, a marquee development for the Company, Seritage advanced its leasing efforts with a total of 216,000 square feet of office and retail space. The property was 82.2% leased by the end of Q1 2025, leaving 38,000 square feet (or 17.8%) available. Of the remaining space, about 9,000 square feet (roughly 4%) was in active lease negotiations.
The NOI-cash basis at share for the first quarter included $0.5 million attributable to properties sold during the period.
