Seritage Growth Properties (SRG) Q1 2025 earnings summary

Executive summary

• The company is executing a shareholder-approved Plan of Sale to monetize all assets and dissolve, with ongoing review of value-maximizing alternatives, including a potential sale of the company.

• As of March 31, 2025, the portfolio included interests in 16 properties (1.6 million sq. ft. GLA, 240 acres), with nine wholly owned and seven unconsolidated properties.

• Generated $29.9 million from the sale of an income-producing asset at a 7.7% cap rate in Q1 2025.

• Andrea Olshan resigned as CEO effective April 11, 2025, with Adam Metz appointed as Interim CEO and President.

• Negotiating sale of a premier development asset for $70 million and a JV asset under contract for $14 million gross.

Financial highlights

• Net loss attributable to common shareholders was $23.4 million for Q1 2025, compared to $20.2 million in Q1 2024.

• Total revenue was $4.6 million, down from $5.8 million year-over-year, primarily due to property sales.

• Gain on sale of real estate was $6.9 million (one property sold for $29.6 million), compared to $1.1 million in Q1 2024 (five properties sold for $48.8 million).

• NOI - cash basis at share was $2.6 million, up from $2.1 million in Q1 2024.

• Cash and cash equivalents (including restricted) were $107.1 million at quarter end.

Outlook and guidance

• Obligations are expected to continue to exceed property rental income; funding will rely on cash on hand, asset sales, and potential financing.

• Future asset sales projected for later in 2025 and beyond, with estimated gross proceeds per asset ranging from under $5 million to $200 million.

• The company has the option to extend its $240 million term loan maturity to July 31, 2026, by paying a 2% fee.

• Management believes current plans alleviate substantial doubt about the company's ability to continue as a going concern for the next year.

• Actual sale results may differ materially from projections due to market conditions.