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What changed in Seritage Growth Properties's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Seritage Growth Properties's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+188 added−214 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Seritage Growth Properties's 2025 10-K

188 paragraphs added · 214 removed · 144 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

19 edited+3 added−3 removed34 unchanged
Biggest changeThe 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 of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company, which Plan of Sale can be suspended by the Board of Trustees. - 1 - 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 Securities and Exchange Commission ("SEC") on September 14, 2022.
Biggest changeThe 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 of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company, which Plan of Sale can be suspended by the Board of Trustees.
In addition, a substantial portion of the properties we acquired from Sears Holdings currently include, or previously included, automotive care center facilities and retail fueling facilities, and are or were subject to laws and regulations governing the handling, storage and disposal of hazardous substances contained in some of the products or materials used or sold in the automotive care center facilities (such as motor oil, fluid in hydraulic lifts, antifreeze and solvents and lubricants), the recycling/disposal of batteries and tires, air emissions, wastewater discharges and waste management.
In addition, a substantial portion of the properties we acquired from Sears Holdings currently include, or previously included, automotive care center facilities and retail fueling facilities, and are or were subject to laws and regulations governing the handling, storage and disposal of hazardous substances contained in some of the - 2 - products or materials used or sold in the automotive care center facilities (such as motor oil, fluid in hydraulic lifts, antifreeze and solvents and lubricants), the recycling/disposal of batteries and tires, air emissions, wastewater discharges and waste management.
ITEM 1. B USINESS The Company 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(c) of the Internal Revenue Code (the “Code”) from formation through December 31, 2021.
ITEM 1. B USINESS The Company Seritage Growth Properties (“Seritage”) (NYSE: SRG), was formed as a Maryland real estate investment trust on June 3, 2015, operated as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(c) of the Internal Revenue Code (the “Code”) from formation through December 31, 2021.
Environmental Matters Our properties are subject to environmental laws regulating, among other things, air emissions, wastewater discharges and the handling and disposal of waste. Certain properties were built during the time that asbestos-containing building materials were - 2 - routinely installed in residential and commercial structures.
Environmental Matters Our properties are subject to environmental laws regulating, among other things, air emissions, wastewater discharges and the handling and disposal of waste. Certain properties were built during the time that asbestos-containing building materials were routinely installed in residential and commercial structures.
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.
The strategic review process remains ongoing as the Company - 1 - executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company.
Financial Information about Industry Segments During the year ended December 31 2024, given the continued decline in size of the portfolio and the continued progression of the Plan of Sale, the Company has concluded that they have one operating segment and one reportable segment as the Company is assessing performance and making operating decisions on an aggregated single segment basis.
Financial Information about Industry Segments During the year ended December 31, 2025, given the continued decline in size of the portfolio and the continued progression of the Plan of Sale, the Company has concluded that they have one operating segment and one reportable segment as the Company is assessing performance and making operating decisions on an aggregated single segment basis.
Background The Company commenced operations on July 7, 2015 following a rights offering to the shareholders of Sears Holding 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 master lease agreements (the “Original Master Lease” and the “JV Original Master Leases”, respectively).
Background The Company commenced operations on July 7, 2015 following a rights offering to the shareholders of Sears Holding 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 master lease agreements (the “Original Master Lease” and the “Original JV Master Leases”, respectively).
In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company will consider various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset.
In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset.
The Company currently operates in a single reportable segment which includes the ownership, development, redevelopment, management, sale and leasing of real estate properties. Human Capital As of December 31, 2024, we had seven full-time employees, all of whom are located in the United States, with the majority located in New York.
The Company currently operates in a single reportable segment which includes the ownership, development, redevelopment, management, sale and leasing of real estate properties. Human Capital As of December 31, 2025, we had five full-time employees, all of whom are located in the United States, with the majority located in New York.
Since March 2021, the Company has not leased any properties to Sears Holdings or its successors after giving effect to the termination of the remaining Consolidated Properties. Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco. Mr.
Since March 2021, the Company has not leased any properties to Sears Holdings or its successors after giving effect to the termination of the Holdco Master Lease. Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco. Mr.
In addition, our seven member Board of Trustees has three female members. Available Information Our office is located at 500 Fifth Avenue, New York, New York 10110 and our telephone number is (212) 355-7800. Our website address is www.seritage.com .
In addition, our six member Board of Trustees has two female members. - 3 - Available Information Our office is located at 500 Fifth Avenue, New York, New York 10110 and our telephone number is (212) 355-7800. Our website address is www.seritage.com .
Review of Strategic Alternatives On March 1, 2022, the Company announced that its Board of Trustees has 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.
Review of Strategic Alternatives On March 1, 2022, the Company announced that its board of trustees (“Board of Trustees”) has 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.
As a result, we are not currently seeking to hire additional employees. We have also transitioned certain responsibilities to contractors to ensure that proper staffing is available. - 3 - As of March 31, 2025, we had five full-time employees, one of whom is female, and 16 contractors, nine of whom were female.
As a result, we are not currently seeking to hire additional employees. We have also transitioned certain responsibilities to contractors to ensure that proper staffing is available. As of March 31, 2026, we had five full-time employees and 14 contractors, eight of whom were female.
As of December 31, 2024, the Company’s portfolio consisted of interests in 17 properties comprised of approximately 1.7 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 274 acres of land.
As of December 31, 2025, the Company’s portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 156 acres of land.
(“Barclays”) as its financial advisor from March 2022 through August 2023 to assist with the strategic review.
The Special Committee retained Barclays Capital, Inc. (“Barclays”) as its financial advisor from March 2022 to August 2023 to assist with the strategic review.
Prior to the adoption of the Company’s Plan of Sale (defined below), Seritage was principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. Seritage will continue to actively manage each location until such time as each property is sold.
Prior to the adoption of the Company’s Plan of Sale (defined below), Seritage was principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States.
The portfolio encompasses 10 wholly owned properties consisting of approximately 0.9 million square feet of GLA and 166 acres (such properties, the “Consolidated Properties”) and seven unconsolidated entities consisting of approximately 0.8 million square feet of GLA and 108 acres (such properties, the “Unconsolidated Properties”).
The portfolio encompasses five consolidated properties consisting of approximately 0.3 million square feet of GLA and 71 acres (such properties, the “Consolidated Properties”) and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres (such properties, the “Unconsolidated Properties”).
The Company's portfolio of 10 Consolidated Properties and seven Unconsolidated Properties was diversified by location across seven states. Competition We currently compete with other properties located in markets in which our assets are located both from an operations perspective and with respect to the disposition of our assets.
Competition We currently compete with other properties located in markets in which our assets are located both from an operations perspective and with respect to the disposition of our assets. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business.
We continue to position all remaining assets for sale. Significant Tenants Management believes the Company’s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk. As of December 31, 2024, the Company has one tenant that comprises 12.5% of annualized base rent, with no other tenants exceeding 10% of annualized base rent.
We continue to position all remaining assets for sale. Significant Tenants As of December 31, 2025, the Company had two tenants that comprise 43.5% and 32.1%, respectively, of annualized base rent, with no other tenants exceeding 10% of annualized base rent. The Company's portfolio of five Consolidated Properties and five Unconsolidated Properties was diversified by location across six states.
Removed
Market Update Since the latter months of 2022, the Company, along with the commercial real estate market as a whole, has experienced and continues to experience challenging market conditions as a result of, among other things, elevated interest rates, increases to required return hurdles for institutional buyers, availability of debt capital, continued inflation, decreased demand for office properties, the threat of tariffs and trade wars, political uncertainty in the United States and the possibility of geopolitical conflict spreading to other regions.
Added
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 Securities and Exchange Commission (“SEC”) on September 14, 2022.
Removed
These conditions have applied and continue to apply downward pricing pressure on all of our assets.
Added
Market Update The Company continues to face challenging market conditions, such as elevated interest rates and the availability of debt and equity capital, and it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues and uncertainty caused by wars.
Removed
We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business.
Added
While interest rates have started to decline, they remain high relative to interest rates in 2022. Additionally, raising equity capital for land development deals remains challenging. These conditions could apply downward pricing pressures on our remaining assets.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+16 added−11 removed206 unchanged
Biggest changeAs a result of any of the foregoing circumstances, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our results of operations and financial condition. - 12 - Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations or otherwise cause us to incur significant costs.
Biggest changeMoreover, certain other leases may require the landlord to comply with the ADA with respect to the building as a whole and/or the tenant’s space. As a result of any of the foregoing circumstances, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our results of operations and financial condition.
These projects are subject to a number of risks including (but not limited to): • abandonment of redevelopment activities after expending resources to determine feasibility; • loss of rental income, as well as payments of maintenance, repair, real estate taxes and other charges; • restrictions or obligations imposed pursuant to other agreements; • construction and/or lease-up costs (including tenant improvements or allowances) and delays and cost overruns, including construction costs that exceed original estimates; • failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; • failure to successfully manage, or find suitable third-party development partners for, the development of residential, office or other mixed-use properties; • inability to successfully integrate re-developed properties into existing operations; • difficulty obtaining financing on acceptable terms or paying operating expenses and debt service costs associated with redevelopment properties prior to sufficient occupancy and commencement of rental obligations under new leases; • changes in zoning, building and land-use laws, and conditions, restrictions or limitations of, and delays or failures to obtain, necessary zoning, building, occupancy, land-use and other governmental permits; • changes in local real-estate market conditions, including an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability of current and prospective tenants; • negative perceptions by retailers or shoppers of the safety, convenience and attractiveness of the property; • exposure to fluctuations in the general economy due to the significant time lag between commencement and completion of redevelopment projects; and • vacancies or ability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options.
These projects are subject to a number of risks including (but not limited to): • abandonment of redevelopment activities after expending resources to determine feasibility; • loss of rental income, as well as payments of maintenance, repair, real estate taxes and other charges; • restrictions or obligations imposed pursuant to other agreements; • construction and/or lease-up costs (including tenant improvements or allowances) and delays and cost overruns, including construction costs that exceed original estimates; • failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; - 17 - • failure to successfully manage, or find suitable third-party development partners for, the development of residential, office or other mixed-use properties; • inability to successfully integrate re-developed properties into existing operations; • difficulty obtaining financing on acceptable terms or paying operating expenses and debt service costs associated with redevelopment properties prior to sufficient occupancy and commencement of rental obligations under new leases; • changes in zoning, building and land-use laws, and conditions, restrictions or limitations of, and delays or failures to obtain, necessary zoning, building, occupancy, land-use and other governmental permits; • changes in local real-estate market conditions, including an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability of current and prospective tenants; • negative perceptions by retailers or shoppers of the safety, convenience and attractiveness of the property; • exposure to fluctuations in the general economy due to the significant time lag between commencement and completion of redevelopment projects; and • vacancies or ability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options.
Risks Related to Our Tax Status If we experience an “ownership change” for purposes of Section 382 of the Code, our ability to utilize our net operating loss and net capital loss carryforwards and certain built-in losses to reduce our future taxable income could be limited, potentially increasing the net taxable income on which we must pay corporate-level taxes, and potentially adversely affecting our liquidity, and our desire to preserve our net operating losses and net capital loss carryforwards may cause us to forgo otherwise attractive opportunities.
Risks Related to Our Tax Status If we experience an “ownership change” for purposes of Section 382 of the Code, our ability to utilize our net operating loss and net capital loss carryforwards and certain built-in losses to reduce our future taxable income could be limited, potentially increasing the net taxable income on which we must pay corporate-level taxes, and potentially adversely affecting our liquidity, - 19 - and our desire to preserve our net operating losses and net capital loss carryforwards may cause us to forgo otherwise attractive opportunities.
Voting rights for holders of Series A Preferred Shares exist primarily with respect to the right to elect two additional trustees to our Board of Trustees in the event that six quarterly dividends (whether or not consecutive) payable on the Series A Preferred Shares are in arrears, and with respect to voting on amendments to our Declaration of Trust or articles supplementary relating to the Series A Preferred Shares that would materially and adversely affect the rights of holders of the Series A Preferred Shares or create additional classes or series of our shares that are senior to the Series A Preferred Shares with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of our affairs.
Voting rights for holders of Series A Preferred Shares exist primarily with respect to the right to elect two additional trustees to our Board of Trustees in the event that six quarterly - 22 - dividends (whether or not consecutive) payable on the Series A Preferred Shares are in arrears, and with respect to voting on amendments to our Declaration of Trust or articles supplementary relating to the Series A Preferred Shares that would materially and adversely affect the rights of holders of the Series A Preferred Shares or create additional classes or series of our shares that are senior to the Series A Preferred Shares with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of our affairs.
As a result, our shareholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common shares. • Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially adversely affected. • Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party. • Economic conditions, elevated interest rates and a possible recession could materially adversely affect our business. • Rising expenses could reduce cash flow. • We may face increased risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions, which may adversely affect the status of our construction projects. • Compliance with the Americans with Disabilities Act may require us to make expenditures. • Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations or otherwise cause us to incur significant costs. • Environmental costs and liabilities associated with contamination at real estate properties owned by us may materially and adversely affect us. • Our business faces potential risks associated with natural disasters, severe weather conditions and climate change and related legislation and regulations, which could have an adverse effect on our cash flow and operating results. • Possible acts of war, terrorist activity or other acts of violence or cybersecurity incidents could adversely affect our financial condition and results of operations. • Cybersecurity incidents could cause a disruption to our operations, a compromise of confidential information and damage to our business relationships, all of which could negatively impact our business, financial condition and operating results. - 5 - • We may incur mortgage indebtedness and other borrowings, which may increase our business risks. • Covenants in our Term Loan Facility may limit our operational flexibility and a covenant breach or default could adversely affect our business and financial condition. • Our rights and the rights of our shareholders to take action against our trustees and officers are limited. • Our Declaration of Trust and Maryland law contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in control. • We may experience insurance-related losses or insurance proceeds may not be available to us, which could result in a significant loss, decrease anticipated future revenues or cause us to incur unanticipated expense. • Mr.
As a result, our shareholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common stock. • Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially adversely affected. • Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party. • Economic conditions, elevated interest rates and a possible recession could materially adversely affect our business. • Rising expenses could reduce cash flow. • We may face increased risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions, which may adversely affect the status of our construction projects. • Compliance with the Americans with Disabilities Act may require us to make expenditures. • Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations or otherwise cause us to incur significant costs. • Environmental costs and liabilities associated with contamination at real estate properties owned by us may materially and adversely affect us. • Our business faces potential risks associated with natural disasters, severe weather conditions and climate change and related legislation and regulations, which could have an adverse effect on our cash flow and operating results. • Possible acts of war, terrorist activity or other acts of violence or cybersecurity incidents could adversely affect our financial condition and results of operations. - 5 - • Cybersecurity incidents could cause a disruption to our operations, a compromise of confidential information and damage to our business relationships, all of which could negatively impact our business, financial condition and operating results. • We may incur mortgage indebtedness and other borrowings, which may increase our business risks. • Covenants in our Term Loan Facility may limit our operational flexibility and certain covenant breaches or defaults could adversely affect our business and financial condition. • Our rights and the rights of our shareholders to take action against our trustees and officers are limited. • Our Declaration of Trust and Maryland law contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in control. • We may experience insurance-related losses or insurance proceeds may not be available to us, which could result in a significant loss, decrease anticipated future revenues or cause us to incur unanticipated expense. • Mr.
In addition, such estimated shareholder distributions do not reflect estimated costs or liabilities related to pending and any future litigation. If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our shareholder distributions under the Plan of Sale may be delayed or reduced.
In addition, such estimated shareholder distributions do not reflect estimated costs or liabilities related to pending and any future litigation. - 7 - If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our shareholder distributions under the Plan of Sale may be delayed or reduced.
Further, as we implement the Plan of Sale, it may dissuade parties that might have an interest in acquiring our Company as a whole by means of a merger transaction or otherwise from pursing such an acquisition and may also preclude other possible courses of action not yet identified by our Board.
Further, as we implement the Plan of Sale, it may dissuade parties that might have an interest in acquiring our Company as a whole by means of a merger transaction or otherwise from pursing such an acquisition and may also preclude other possible courses of action not yet identified by our Board of Trustees.
The result of these incidents may include disrupted operations, liability for loss or misappropriation of data, stolen assets or information, increased cybersecurity protection and insurance costs, increased compliance costs, litigation, regulatory enforcement actions and damage to our reputation or business relationships. - 14 - We may incur mortgage indebtedness and other borrowings, which may increase our business risks.
The result of these incidents may include disrupted operations, liability for loss or misappropriation of data, stolen assets or information, increased cybersecurity protection and insurance costs, increased compliance costs, litigation, regulatory enforcement actions and damage to our reputation or business relationships. We may incur mortgage indebtedness and other borrowings, which may increase our business risks.
Our properties are subject to increases in tax rates and tax assessments, utility costs, insurance costs, repairs, maintenance and administrative expenses, and other operating expenses. We may also incur significant expenditures as a result of deferred maintenance for the properties we have already acquired (subject to reserved funds to cover certain of these costs).
Our properties are subject to increases in tax rates and tax assessments, utility costs, insurance costs, repairs, maintenance and - 11 - administrative expenses, and other operating expenses. We may also incur significant expenditures as a result of deferred maintenance for the properties we have already acquired (subject to reserved funds to cover certain of these costs).
Increased future debt service obligations may limit our operational flexibility, including our ability to finance or refinance our properties, contribute properties to joint ventures or sell properties as needed. - 8 - Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service, and the reinvestment in and redevelopment of our properties.
Increased future debt service obligations may limit our operational flexibility, including our ability to finance or refinance our properties, contribute properties to joint ventures or sell properties as needed. Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service, and the reinvestment in and redevelopment of our properties.
We also note that, if our liabilities (including, without limitation, tax liabilities and compliance costs) are greater than we currently expect or if the sales prices of our assets are less than we expect, shareholders will receive less distributions for each common share - 7 - that they currently own than we initially estimated.
We also note that, if our liabilities (including, without limitation, tax liabilities and compliance costs) are greater than we currently expect or if the sales prices of our assets are less than we expect, shareholders will receive less distributions for each common share that they currently own than we initially estimated.
The Company sought a shareholder vote to approve 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 affirmative vote of at least two-thirds of all outstanding common shares of the Company was required to approve the Plan of Sale.
The Company sought a shareholder vote to approve the Plan of Sale that would allow our Board of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company. The affirmative vote of at least two-thirds of all outstanding common shares of the Company was required to approve the Plan of Sale.
Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our own results of operations. - 11 - Any economic slowdown, including a possible recession, could impair our ability to sell our properties.
Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our own results of operations. Any economic slowdown, including a possible recession, could impair our ability to sell our properties.
In addition, ratings do not reflect market prices or suitability of a security for a particular investor and any future rating of the Series A Preferred Shares may not reflect all risks related to us and our business, or the structure or market value of the Series A Preferred Shares.
In - 21 - addition, ratings do not reflect market prices or suitability of a security for a particular investor and any future rating of the Series A Preferred Shares may not reflect all risks related to us and our business, or the structure or market value of the Series A Preferred Shares.
However, qualification as a - 20 - REIT involves the application of highly technical and complex provisions of the Code, for which only a limited number of judicial and administrative interpretations exist. Even a technical or inadvertent violation could jeopardize our REIT qualification through 2021.
However, qualification as a REIT involves the application of highly technical and complex provisions of the Code, for which only a limited number of judicial and administrative interpretations exist. Even a technical or inadvertent violation could jeopardize our REIT qualification through 2021.
In the event of any such transaction, the interests of Mr. Lampert and his affiliates, may differ from or conflict with the interests of our other shareholders. - 17 - Our investments in or redevelopment of properties may be unsuccessful or fail to meet our expectations.
In the event of any such transaction, the interests of Mr. Lampert and his affiliates, may differ from or conflict with the interests of our other shareholders. Our investments in or redevelopment of properties may be unsuccessful or fail to meet our expectations.
Sales of a substantial number of Class A common shares in the public market, or the perception that such sales might occur, could adversely affect the market price of the Class A common shares. - 22 - The Series A Preferred Shares have not been rated.
Sales of a substantial number of Class A common shares in the public market, or the perception that such sales might occur, could adversely affect the market price of the Class A common shares. The Series A Preferred Shares have not been rated.
Such a resulting decrease in retail demand, could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates.
Such a resulting decrease in retail demand, could make it difficult for us to renew or re-lease our properties at lease rates - 13 - equal to or above historical rates.
In our estimate of cash flow projections, we consider factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors.
In our estimate of cash flow projections, we consider factors such as - 9 - expected future operating income, trends and prospects, the effects of demand, competition and other factors.
For example, as discussed further in Note 9 – Commitments and Contingencies to consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, (a) on July 1, 2024, a purported shareholder of the Company filed a class action lawsuit alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets, and (b) on or around January 15, 2025 and January 20, 2025, two derivative lawsuits alleging the same or similar claimed acts and omissions was filed against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees.
For example, as discussed further in Note 9 – Commitments and Contingencies to consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, (a) on July 1, 2024, a purported shareholder of the Company filed a class action lawsuit alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets, and (b) on or around January 15, 2025, January 20, 2025 and May 8, 2025, three derivative lawsuits alleging the same or similar claimed acts and omissions was filed against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees.
Risks Related to Our Business and Operations • There can be no assurance that we will be able to complete any strategic transaction or strategic change on terms satisfactory to the Board of Trustees. • We have experienced challenging market conditions and there can be no assurances that these challenges will abate, which may adversely impact the net Plan of Sale proceeds from our assets. • We cannot assure our shareholders of the amount they will receive in shareholder distributions under the Plan of Sale or when they will receive them. • If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our shareholder distributions under the Plan of Sale may be delayed or reduced. • Our expected sales prices may be impacted by tenant issues at our properties. • We have ongoing capital needs and may not be able to obtain additional financing or other sources of funding on acceptable terms. • Real estate taxes may increase, and if these increases are not passed on to tenants, our net income will be reduced. • Changes in building and/or zoning laws may require us to meet additional or more stringent construction requirements. • Our real estate assets and equity method investments may be subject to impairment charges. • We have previously identified material weaknesses in our internal control over financial reporting which we have since remediated.
Risks Related to Our Business and Operations • There can be no assurance that we will be able to complete any strategic transaction or strategic change on terms satisfactory to the Board of Trustees. • We have experienced challenging market conditions and there can be no assurances that these challenges will abate, which may adversely impact the net Plan of Sale proceeds from our assets. • We cannot assure our shareholders of the amount they will receive in shareholder distributions under the Plan of Sale or when they will receive them. • If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our shareholder distributions under the Plan of Sale may be delayed or reduced. • Our expected sales prices may be impacted by tenant issues at our properties. • We have ongoing capital needs and may not be able to obtain additional financing or other sources of funding on acceptable terms. • Real estate taxes may increase, and if these increases are not passed on to tenants, our net income will be reduced. • Changes in building and/or zoning laws may require us to meet additional or more stringent construction requirements. • Our real estate assets and equity method investments may be subject to impairment charges. • We have identified material weaknesses in our internal control over financial reporting and such material weaknesses have not yet been fully remediated.
Many of the properties in our portfolio are subject to use restrictions and/or operational requirements imposed pursuant to ground leases, restrictive covenants or conditions, reciprocal easement agreements or operating agreements (collectively, “Property Restrictions”) that could adversely affect our ability to redevelop the properties or lease space to third parties or sell the properties.
Most of the properties in our portfolio are subject to use restrictions and/or operational requirements imposed pursuant to ground leases, restrictive covenants or conditions, reciprocal easement agreements or operating agreements (collectively, “Property Restrictions”) that could adversely affect our ability to redevelop the properties or lease space to third parties or sell the properties.
You are urged to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. - 21 - Risks Related to Ownership of our Securities The market price and trading volume of our securities may be volatile.
You are urged to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. - 20 - Risks Related to Ownership of our Securities The market price and trading volume of our securities may be volatile.
While many of our existing leases require, and new lease agreements are expected to require, that comprehensive general insurance and hazard insurance be maintained by the tenants with respect to their premises, and we have obtained casualty insurance with respect to the vast majority of our properties other than certain vacant properties and development land sites, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that may be uninsurable or not economically insurable.
While most of our existing leases require, and any new lease agreements are expected to require, that comprehensive general insurance and hazard insurance be maintained by the tenants with respect to their premises, and we have obtained casualty insurance with respect to the vast majority of our properties other than certain vacant properties and development land sites, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that may be uninsurable or not economically insurable.
As a result of a decrease in property rental income, primarily due to sales, operating cash flow did not fully fund property operating and other expenses incurred during the year ended December 31, 2024. In the near term, our asset sales are our principal source of cash flow.
As a result of a decrease in property rental income, primarily due to sales, operating cash flow did not fully fund property operating and other expenses incurred during the year ended December 31, 2025. In the near term, our asset sales are our principal source of cash flow.
These factors include, but are not limited to: • interest rates and credit spreads remained high throughout 2024, which could negatively impact potential buyers’ ability to purchase our properties; • the availability of credit, including the price, terms and conditions under which it can be obtained; • a decrease in consumer spending or sentiment, including as a result of increases in savings rates and tax increases, and any effect that this may have on retail activity; • the actual and perceived state of the real estate and retail markets and public capital markets in general; • unemployment rates, both nationwide and within the primary markets in which we operate; and • macroeconomic uncertainty, in the U.S. and/or globally, including trade wars or tariffs and the possibility of a recession.
These factors include, but are not limited to: • although interest rates started to decline in 2025, interest and credit spreads remained high throughout 2025, and high interest rates and credit spreads could negatively impact potential buyers’ ability to purchase our properties; • the availability of credit, including the price, terms and conditions under which it can be obtained; • a decrease in consumer spending or sentiment, including as a result of increases in savings rates and tax increases, and any effect that this may have on retail activity; • the actual and perceived state of the real estate and retail markets and public capital markets in general; • unemployment rates, both nationwide and within the primary markets in which we operate; and • macroeconomic uncertainty, in the U.S. and/or globally, including trade wars or tariffs and the possibility of a recession.
A future pandemic could have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations, liquidity and cash flows due to, among other factors: • Difficulty accessing debt and equity capital on attractive terms, or at all, impacts to our credit ratings, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants' ability to fund their business operations and meet their obligations to us; • The financial impact could negatively impact our ability to pay dividends on our preferred shares, including the Series A Preferred Shares; • The financial impact of a pandemic could negatively impact our future compliance with financial covenants of our term loan facility (the “Term Loan Facility”) with Berkshire Hathaway or result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our Incremental Funding Facility (as defined below), conduct asset sales, fund development activity or pay dividends on our preferred shares, including the Series A Preferred Shares; • The worsening of estimated future cash flows due to a change in our plans, policies, or views of market and economic conditions as it relates to one or more of our adversely impacted properties could result in the recognition of substantial impairment charges imposed on our assets; • The credit quality of our tenants could be negatively impacted and we may significantly increase our allowance for doubtful accounts; • Difficulties completing our redevelopment projects on a timely basis, on budget or at all; • A general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to reinvest in or redevelop our properties; and • The potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption. - 19 - We have been, and in the future may be, subject to securities class action, derivative, and other litigation, which may harm our business and results of operations.
A future pandemic could have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations, liquidity and cash flows due to, among other factors: • Difficulty accessing debt and equity capital on attractive terms, or at all, impacts to our credit ratings, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants' ability to fund their business operations and meet their obligations to us; • The financial impact could negatively impact our ability to pay dividends on our preferred shares, including the Series A Preferred Shares; • The financial impact of a pandemic could negatively impact our future compliance with financial covenants of our term loan facility (the “Term Loan Facility”) with Berkshire Hathaway or result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our - 18 - Incremental Funding Facility (as defined below), conduct asset sales, fund development activity or pay dividends on our preferred shares, including the Series A Preferred Shares; • The worsening of estimated future cash flows due to a change in our plans, policies, or views of market and economic conditions as it relates to one or more of our adversely impacted properties could result in the recognition of substantial impairment charges imposed on our assets; • The credit quality of our tenants could be negatively impacted and we may significantly increase our allowance for doubtful accounts; • Difficulties completing our redevelopment projects on a timely basis, on budget or at all; • A general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to reinvest in or redevelop our properties; and • The potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.
As of December 31, 2024, we have not achieved this level of rental income from non-Sears Holdings tenants. Our rights and the rights of our shareholders to take action against our trustees and officers are limited.
As of December 31, 2025, we have not achieved this level of rental income from non-Sears Holdings tenants. Our rights and the rights of our shareholders to take action against our trustees and officers are limited.
Other than the limited conversion right afforded to holders of Series A Preferred Shares that may occur in connection with a Change of Control, none of the provisions relating to the Series A Preferred Shares contain any provisions relating to or limiting our indebtedness or affording the holders of the Series A Preferred Shares protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of the Series A Preferred Shares, so long as the rights of holders of the Series A Preferred Shares are not materially and adversely affected. - 23 - Dividends on our preferred shares, including the Series A Preferred Shares, are discretionary.
Other than the limited conversion right afforded to holders of Series A Preferred Shares that may occur in connection with a Change of Control, none of the provisions relating to the Series A Preferred Shares contain any provisions relating to or limiting our indebtedness or affording the holders of the Series A Preferred Shares protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of the Series A Preferred Shares, so long as the rights of holders of the Series A Preferred Shares are not materially and adversely affected.
The Term Loan Facility also includes certain limitations relating to, among other activities, our ability to: sell assets or merge, consolidate or transfer all or substantially all of our assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for our properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase our capital stock; and enter into certain transactions with affiliates.
The Term Loan Facility also includes certain limitations relating to, among other activities, our ability to: sell assets or merge, consolidate or transfer all or substantially all of our assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for our properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase our capital stock; and enter into certain transactions with affiliates. - 14 - The Term Loan Facility also provides for the Incremental Funding Facility.
As of December 31, 2024, our total indebtedness was $240.0 million. In addition, we may incur additional indebtedness in the future. Our Declaration of Trust currently authorizes the issuance of up to 10,000,000 shares of preferred shares in one or more classes or series.
As of December 31, 2025, our total indebtedness was $50.0 million. In addition, we may incur additional indebtedness in the future. Our Declaration of Trust currently authorizes the issuance of up to 10,000,000 shares of preferred shares in one or more classes or series.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) applicable to Maryland REITs may have the effect of inhibiting a third party from acquiring us or of impeding a change of control of the Company under circumstances that otherwise could provide Class A common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares or otherwise be in the best interest of shareholders, including: o “business combination” provisions that, subject to certain exceptions and limitations, prohibit certain business combinations between a Maryland REIT and an “interested shareholder” (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the Company’s outstanding voting shares or an affiliate or associate of the Maryland REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of the Company) or an affiliate of any interested shareholder and the Maryland REIT for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes two supermajority shareholder voting requirements on these combinations; o “control share” provisions that provide that, subject to certain exceptions, holders of “control shares” of our company (defined as voting shares that, if aggregated with all other shares owned or controlled by the acquirer, would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of issued and outstanding “control shares”) have no voting rights with respect to the control shares except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares; and o Additionally, Title 3, Subtitle 8 of the MGCL permits the Board of Trustees, without shareholder approval and notwithstanding any contrary provisions in our Declaration of Trust or bylaws, to implement certain takeover defenses. - 16 - The Board of Trustees has, by resolution, exempted from the provisions of the Maryland Business Combination Act all business combinations (a) between us and (i) Sears Holdings or its affiliates or (ii) ESL Investments, Inc. or Fairholme Capital Management L.L.C.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) applicable to Maryland REITs may have the effect of inhibiting a third party from acquiring us or of impeding a change of control of the Company under circumstances that otherwise could - 15 - provide Class A common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares or otherwise be in the best interest of shareholders, including: o “business combination” provisions that, subject to certain exceptions and limitations, prohibit certain business combinations between a Maryland REIT and an “interested shareholder” (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the Company’s outstanding voting shares or an affiliate or associate of the Maryland REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of the Company) or an affiliate of any interested shareholder and the Maryland REIT for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes two supermajority shareholder voting requirements on these combinations; o “control share” provisions that provide that, subject to certain exceptions, holders of “control shares” of our company (defined as voting shares that, if aggregated with all other shares owned or controlled by the acquirer, would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of issued and outstanding “control shares”) have no voting rights with respect to the control shares except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares; and o Additionally, Title 3, Subtitle 8 of the MGCL permits the Board of Trustees, without shareholder approval and notwithstanding any contrary provisions in our Declaration of Trust or bylaws, to implement certain takeover defenses.
As of December 31, 2024, the Company has not yet achieved the requirements to access the Incremental Funding Facility.
As of December 31, 2025, the Company has not yet achieved the requirements to access the Incremental Funding Facility.
During the year ended December 31, 2024, the Company made aggregate principal prepayments of $120.0 million on the Term Loan Facility, reducing the Term Loan Facility balance to $240.0 million as of December 31, 2024. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions.
During the year ended December 31, 2025, the Company made aggregate principal prepayments of $190.0 million on the Term Loan Facility, reducing the Term Loan Facility balance to $50.0 million as of December 31, 2025. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions.
Lampert may exert substantial influence over us, and his interests may differ from or conflict with the interests of our other shareholders. • Our investments in or redevelopment of properties may be unsuccessful or fail to meet our expectations. • Current and future redevelopment may not yield expected returns. • If members of our management team terminate their employment with us or we are unable to retain talented employees our financial results and/or the Plan of Sale may be adversely affected. • The future outbreak of highly infectious or contagious diseases may, materially and adversely impact the business of our tenants and our business. • We have been, and in the future may be, subject to securities class action, derivative, and other litigation, which may harm our business and results of operations.
Lampert may exert substantial influence over us, and his interests may differ from or conflict with the interests of our other shareholders. • Our investments in or redevelopment of properties may be unsuccessful or fail to meet our expectations. • Current and future redevelopment may not yield expected returns. • If members of our management team terminate their employment with us or we are unable to retain talented employees our financial results and/or the Plan of Sale may be adversely affected. • The future outbreak of highly infectious or contagious diseases may, materially and adversely impact the business of our tenants and our business. • We have been, and in the future may be, subject to securities class action, derivative, and other litigation, which may harm our business and results of operations. • We have concluded that management’s plans do not alleviate substantial doubt as to our ability to continue as a going concern.
While we do not currently have the liquid funds available to fully fund projected property and other expenses and planned development expenditures, we expect to fund these uses of cash with a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and potential financing transactions, subject to compliance with certain conditions and/or the consent of our lender under our Term Loan Facility.
While we do not currently have the liquid funds available to fully fund projected property and other expenses and planned development expenditures, we expect to fund these uses of cash with a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and potential financing transactions, subject to compliance with certain conditions and/or the consent of our lender under our Term Loan Facility. - 8 - Since 2019, we have not been in compliance with certain financial metrics applicable to us under the agreements governing our term loan facility.
As of December 31, 2024, we had aggregate outstanding indebtedness of $240 million. Our existing debt could require a substantial portion of our cash flow to make interest and principal payments.
As of December 31, 2025, we had aggregate outstanding indebtedness of $50.0 million. Our existing debt could require a substantial portion of our cash flow to make interest and principal payments.
Lampert may exert substantial influence over us, and his interests may differ from or conflict with the interests of our other shareholders. As of December 31, 2024, Mr. Lampert owned approximately 24.0% of our outstanding Class A common shares. Mr.
Lampert may exert substantial influence over us, and his interests may differ from or conflict with the interests of our other shareholders. As of December 31, 2025, Mr. Lampert owned approximately 23.8% of our outstanding Class A common shares. Mr.
Lampert, who owned approximately 24.0% of the Company’s outstanding Class A common shares as of December 31, 2024. • Certain Provisions of Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us .
Lampert, who owned approximately 23.8% of the Company’s outstanding Class A common shares as of December 31, 2025. • Certain Provisions of Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us .
Edward Lampert, who owned approximately 24.0% of our outstanding Class A shares as of December 31, 2024, voted in favor of the Plan of Sale, pursuant to an agreement with the Company.
Edward Lampert, who owned approximately 23.8% of our outstanding Class A shares as of December 31, 2025, voted in favor of the Plan of Sale, pursuant to an agreement with the Company.
On a periodic basis, we must assess whether there are any indicators that the value of our real estate assets and other investments may be impaired.
Our real estate assets and equity method investments may be subject to impairment charges. On a periodic basis, we must assess whether there are any indicators that the value of our real estate assets and other investments may be impaired.
If we are unable to restore a property to its prior use after a substantial casualty loss or are required to comply with more stringent building or zoning codes and regulations, we may be unable to re-lease the space at a comparable effective rent or sell the property at an acceptable price, which may materially and adversely affect us. - 9 - Our real estate assets and equity method investments may be subject to impairment charges.
If we are unable to restore a property to its prior use after a substantial casualty loss or are required to comply with more stringent building or zoning codes and regulations, we may be unable to re-lease the space at a comparable effective rent or sell the property at an acceptable price, which may materially and adversely affect us.
We may take impairment charges in the future related to the impairment of our assets, and any future impairment could have a material adverse effect on our results of operations in the period in which the impairment charge is taken. We have previously identified material weaknesses in our internal control over financial reporting, which we have since remediated.
We may take impairment charges in the future related to the impairment of our assets, and any future impairment could have a material adverse effect on our results of operations in the period in which the impairment charge is taken.
Department of the Treasury. The 119th Congress and President Trump have announced plans to make significant changes to the Code. Changes to the tax laws or interpretations thereof, with or without retroactive application, could materially and adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us.
Department of the Treasury. Changes to the tax laws or interpretations thereof, with or without retroactive application, could materially and adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us.
Andrea Olshan and extended and revised the retention agreements with Mr. Matthew Fernand and Mr. Eric Dinenberg. The amended agreements are structured generally to incentivize the executives to remain employed until the Plan of Sale has been fully, or nearly fully, completed, but each of these executives could elect to terminate their respective agreements at any time.
The agreements are structured generally to incentivize the executives to remain employed until the Plan of Sale has been fully, or nearly fully, completed, but each of these executives could elect to terminate their respective agreements at any time.
As of March 31, 2025, the Company has one asset owned by our consolidated joint venture under contract for anticipated proceeds of $14.0 million and is currently negotiating definitive purchase and sale agreements of approximately $70.0 million. The Company continues to use the proceeds from sold assets to further reduce the outstanding balance of the Term Loan Facility.
As of March 31, 2026, the Company has one asset owned by our consolidated joint venture under contract to sell for anticipated proceeds of $11.0 million. The Company continues to use the proceeds from sold assets to further reduce the outstanding balance of the Term Loan Facility.
However, in the future we might identify additional material weaknesses or significant deficiencies or fail to maintain an effective system of internal controls, which may cause us to not be able to accurately report our financial results or prevent fraud.
No assurance can be made that additional material weaknesses or significant deficiencies will not occur in the future. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future period.
Dividends on our preferred shares, including the Series A Preferred Shares, are discretionary. We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future period.
The amount of any environmental liabilities could exceed the amounts for which third parties would be required to indemnify us (or the applicable unconsolidated entity) or their financial ability to do so. - 13 - Each unconsolidated entity is subject to similar risks relating to environmental costs and liabilities associated with its Unconsolidated Properties, which may reduce the value of our investment in, or distributions to us by, one or more unconsolidated entities, or require that we make additional capital contributions to one or more unconsolidated entities.
Each unconsolidated entity is subject to similar risks relating to environmental costs and liabilities associated with its Unconsolidated Properties, which may reduce the value of our investment in, or distributions to us by, one or more unconsolidated entities, or require that we make additional capital contributions to one or more unconsolidated entities.
If we are found to be in breach of a ground lease, we could lose the right to use the property and could also be liable to the ground lessor for damages.
Accordingly, we only own a long-term leasehold in the land underlying this property, and we own the improvements thereon only during the term of the ground lease. If we are found to be in breach of a ground lease, we could lose the right to use the property and could also be liable to the ground lessor for damages.
There can be no assurance that similar control issues will not be identified in the future. If any other material weaknesses or other deficiencies arise in the future, we may be unable to accurately report our financial results, which could cause our financial results to be materially misstated and require restatement.
If we are unable to remediate successfully our existing material weaknesses or if any other material weaknesses or other deficiencies arise in the future, we may be unable to accurately report our financial results, which could cause our financial results to be materially misstated and require restatement.
As the owner or operator of various real properties and facilities, we must comply with various federal, state and local environmental, health, safety and land use laws and regulations.
Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations or otherwise cause us to incur significant costs. As the owner or operator of various real properties and facilities, we must comply with various federal, state and local environmental, health, safety and land use laws and regulations.
We are involved in legal proceedings related to various matters, including securities and derivative litigation, and may become involved in other legal proceedings that arise from time to time in the future.
We have been, and in the future may be, subject to securities class action, derivative, and other litigation, which may harm our business and results of operations. We are involved in legal proceedings related to various matters, including securities and derivative litigation, and may become involved in other legal proceedings that arise from time to time in the future.
Accordingly, in the event that our trustees or officers are immune or exculpated from, or indemnified against, liability in connection with actions taken by any such trustees or officers, which actions impede our performance, the Company and our shareholders’ ability to recover damages from that trustee or officer will be limited. - 15 - Our Declaration of Trust and bylaws and Maryland law contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in control.
Accordingly, in the event that our trustees or officers are immune or exculpated from, or indemnified against, liability in connection with actions taken by any such trustees or officers, which actions impede our performance, the Company and our shareholders’ ability to recover damages from that trustee or officer will be limited.
Since 2020, at the request of the lender, nearly all Consolidated Properties have mortgages. The Term Loan Facility also provides for a $400 million incremental facility (the “Incremental Funding Facility”).
As a result of the non-compliance, the lender had the right to request mortgages against our assets pursuant to the mortgage and collateral requirement. Since 2020, at the request of the lender, nearly all Consolidated Properties have mortgages. The Term Loan Facility also provides for a $400 million incremental facility (the “Incremental Funding Facility”).
If we were to lose the right to use a property due to a breach or non-renewal or final expiration of the ground lease, we would be unable to derive income from such property, which could materially and adversely affect our business, financial conditions or results of operations.
If we were to lose the right to use a property due to a breach or non-renewal or final expiration of the ground lease, we would be unable to derive income from such property, which could materially and adversely affect our business, financial conditions or results of operations. - 10 - Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party.
A disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies and any insurer’s ability to meet its claim payment obligations.
Further, if one of our tenants has insurance but is underinsured, that tenant may be unable to satisfy its payment obligations under its lease with us or its other payment or other obligations. - 16 - A disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies and any insurer’s ability to meet its claim payment obligations.
Environmental, health and safety laws require that ACM be properly managed and maintained and may impose fines or penalties on owners, operators or employers for non-compliance with those requirements. These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during maintenance, renovation or demolition of a building, potentially resulting in substantial costs.
These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be - 12 - disturbed during maintenance, renovation or demolition of a building, potentially resulting in substantial costs.
In addition, we may not have sufficient liquidity to fund such projects, and delays in the completion of a development project may provide various tenants the rights to withdraw from a property. - 18 - If members of our management team terminate their employment with us or we are unable to retain talented employees our financial results and/or the Plan of Sale may be adversely affected.
In addition, we may not have sufficient liquidity to fund such projects, and delays in the completion of a development project may provide various tenants the rights to withdraw from a property.
The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Management identified material weaknesses due to deficiencies in the design and operating effectiveness of controls which remain unremediated as of, and for the year ended December 31, 2025.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will prevent or avoid potential future material weaknesses. - 10 - Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially and adversely affected.
Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially and adversely affected. We currently have one property in our consolidated portfolio that is on land subject to a ground lease.
However, in the future we might identify additional material weaknesses or significant deficiencies or fail to maintain an effective system of internal controls, which may cause us to not be able to accurately report our financial results or prevent fraud.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common stock.
If the Operating Partnership exercises the extension option, all other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.
All other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement. See Note 6 - Debt of the Notes to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Our business depends, to a meaningful extent, upon the continued services of our management team and, more broadly, our employees generally. Our executives have substantial experience in our industry. During 2023, in an effort to continue to incentivize and retain our management team, we amended the employment agreement with Ms.
If members of our management team terminate their employment with us or we are unable to retain talented employees our financial results and/or the Plan of Sale may be adversely affected. Our business depends, to a meaningful extent, upon the continued services of our management team and, more broadly, our employees generally.
In such cases, we may incur costs and expenses under such leases or as a matter of law.
In such cases, we may incur costs and expenses under such leases or as a matter of law. The amount of any environmental liabilities could exceed the amounts for which third parties would be required to indemnify us (or the applicable unconsolidated entity) or their financial ability to do so.
Removed
Since 2019, we have not been in compliance with certain financial metrics applicable to us under the agreements governing our term loan facility. As a result of the non-compliance, the lender had the right to request mortgages against our assets pursuant to the mortgage and collateral requirement.
Added
On July 28, 2025, the Company exercised its extension option and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid an incremental facility fee of $4.0 million.
Removed
As a result, our shareholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common shares.
Added
We have identified material weaknesses in our internal control over financial reporting and such material weaknesses have not yet been fully remediated. No assurance can be made that additional material weaknesses or significant deficiencies will not occur in the future.
Removed
In the course of preparing our financial statements for the year ended December 31, 2023, we identified material weaknesses in our internal control over financial reporting that existed 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.
Added
The material weaknesses identified in our internal control over financial reporting related to: (i) level of precision of the review of the general ledger and underlying reconciliations, and (ii) lack of appropriate segregation of duties over journal entries. These deficiencies contributed to the potential for there to be material errors in our financial statements.
Removed
The deficiencies related to the identification of impairment indicators. Additionally, management did not maintain 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. Further, management identified a deficiency in the operating effectiveness in our review over the calculation of other than temporary impairments.
Added
Since identifying these material weaknesses, we have been, and are currently in the process of, remediating them. While progress has been made to remediate the material weaknesses we have not yet fully remediated these material weaknesses because additional time is needed to complete the remediation and allow for the internal controls to be tested by management.
Removed
These deficiencies contributed to the potential for there to be material errors in our financial statements. Additionally, during the same period, we 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.
Added
Accordingly, we will continue to monitor and evaluate the effectiveness of our internal control over financial reporting. For further discussion of our remedial efforts, see Item 9A. Controls and Procedures. There can be no assurance that similar control issues will not be identified in the future.
Removed
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. Since identifying these material weaknesses, we have completed the process of remediating them.
Added
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the control deficiencies that led to these material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.
Removed
We currently have one property in our consolidated portfolio that is on land subject to a ground lease. Accordingly, we only own a long-term leasehold in the land underlying this property, and we own the improvements thereon only during the term of the ground lease.
Added
Environmental, health and safety laws require that ACM be properly managed and maintained and may impose fines or penalties on owners, operators or employers for non-compliance with those requirements.
Removed
Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor additional information regarding risks from cybersecurity threats, refer to Item 1A, “Risk Factors”, in this Annual Report on Form 10-K. - 24 - Governance Our Board of Trustees considers cybersecurity risk as part of its risk oversight function. In February 2024, the Board delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
Biggest changeFor additional information regarding risks from cybersecurity threats, refer to Item 1A, “Risk Factors”, in this Annual Report on Form 10-K. Governance Our Board of Trustees considers cybersecurity risk as part of its risk oversight function. The Board of Trustees has delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
As of December 31, 2024 , we do not believe such risks have materially affected or are reasonably likely to materially affect the Company, including the Company’s business strategy, results of operations or financial condition. However, there can be no assurance that the Company will not be materially affected by such risks in the future.
As of December 31, 2025 , we do not believe such risks have materially affected or are reasonably likely to materially affect the Company, including the Company’s business strategy, results of operations or financial condition. However, there can be no assurance that the Company will not be materially affected by such risks in the future.
Garilli and other members of our executive management team with any network issues on a weekly basis and make recommendations for security upgrades as needed. The Interim Chief Financial Officer or the Chief Legal Officer will update the Audit Committee quarterly, or more frequently in the case of a significant cybersecurity incident impacting our information systems. - 25 -
Garilli and other members of our executive management team with any network issues on a weekly basis and make recommendations for security upgrades as needed. The Interim Chief Financial Officer or the Chief Legal Officer updates the Audit Committee quarterly, or more frequently in the case of a significant cybersecurity incident impacting our information systems. - 23 -
Our Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee will receive periodic reports from our Interim Chief Financial Officer or our Chief Legal Officer on our cybersecurity risks.
Our Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee receives periodic reports from our Interim Chief Financial Officer or our Chief Legal Officer on our cybersecurity risks.
In addition, our Interim Chief Financial Officer or our Chief Legal Officer will update our Audit Committee, as necessary, regarding any significant cybersecurity incidents impacting our information systems . Our entire Board will also receive briefings from our Interim Chief Financial Officer or Chief Legal Officer on our cybersecurity risk management program as part of our overall business risk updates.
In addition, our Interim Chief Financial Officer or our Chief Legal Officer updates our Audit Committee, as necessary, regarding any significant cybersecurity incidents impacting our information systems . Our entire Board of Trustees also receives briefings from our Interim Chief Financial Officer or Chief Legal Officer on our cybersecurity risk management program as part of our overall business risk updates.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following tables set forth certain information regarding our Consolidated Properties and Unconsolidated Properties based on signed leases as of December 31, 2024, including signed but not yet open leases (“SNO” or “SNO Leases”): City State Total GLA Leased (1) Not Leased Land Acres Significant Tenants (1) Leased 1 Braintree (2) MA 85,100 85,100 - 34 Nordstrom Rack, Ulta Beauty, Amazon 100.0 % 2 King of Prussia (3) PA 208,700 174,500 34,200 14 Dick's Sporting Goods, Primark 83.6 % 3 Clearwater FL 212,900 75,500 137,400 14 Whole Foods, Nordstrom Rack 35.5 % 4 Aventura FL 216,100 170,100 46,000 13 CCRM, Industrious, Pinstripes, Anatomy Fitness 78.7 % 5 Boca Raton FL 4,200 4,200 - 19 JP Morgan Chase 100.0 % 6 Dallas TX - - - 23 n/a 0.0 % 7 Redmond WA 7,500 7,500 - 15 Red Robin 100.0 % 8 Riverside - Resi CA - - - 14 n/a 0.0 % 9 Riverside - Retail CA 33,200 33,200 - 5 Bank of America, Aldi 100.0 % 10 Panama City FL 134,300 - 134,300 15 n/a 0.0 % Total - Consolidated Properties 902,000 550,100 351,900 166 61.0 % City State Total GLA Leased (1) Not Leased Joint Venture Land Acres Significant Tenants (1) Leased 1 Santa Monica CA 103,000 - 103,000 Mark 302 JV 3 n/a 0.0 % 2 San Diego CA 212,500 212,500 - UTC JV 13 Amazon 100.0 % 3 Alexandria VA - - - Foulger Pratt / Howard Hughes 41 n/a 0.0 % 4 Altamonte Springs FL 186,900 9,500 177,400 GGP II JV 17 Darden 5.1 % 5 Santa Rosa CA 165,400 - 165,400 Simon JV 7 n/a 0.0 % 6 Austin TX 164,600 - 164,600 Simon JV 16 n/a 0.0 % 7 Austin TX - - - RD Development JV 11 n/a 0.0 % Total - Unconsolidated Properties 832,400 222,000 610,400 108 26.7 % Grand Total - All Properties 1,734,400 772,100 962,300 274 44.5 % Grand Total - All Properties (at Share) 1,318,200 661,100 657,100 220 50.2 % (1) Based on signed leases as of December 31, 2024, including SNO Leases.
Biggest changeThe following tables set forth certain information regarding our Consolidated Properties and Unconsolidated Properties based on signed leases as of December 31, 2025, including signed but not yet open leases (“SNO” or “SNO Leases”): City State Total GLA Leased (1) Not Leased Land Acres Significant Tenants (1) Leased 1 King of Prussia (2) PA 208,700 174,500 34,200 14 Dick's Sporting Goods, Primark 83.6 % 2 Dallas TX - - - 23 n/a 0.0 % 3 Redmond WA 7,500 7,500 - 15 Red Robin 100.0 % 4 Riverside - Resi CA - - - 14 n/a 0.0 % 5 Riverside - Retail CA 33,200 12,200 21,000 5 Bank of America 36.7 % Total - Consolidated Properties 249,400 194,200 55,200 71 77.9 % City State Total GLA Leased (1) Not Leased Joint Venture Land Acres Significant Tenants (1) Leased 1 Santa Monica CA 103,000 - 103,000 Mark 302 JV 3 n/a 0.0 % 2 San Diego CA 212,500 210,100 2,400 UTC JV 13 Amazon 98.9 % 3 Alexandria VA - - - Foulger Pratt / Howard Hughes 41 n/a 0.0 % 4 Altamonte Springs FL 186,900 9,500 177,400 GGP II JV 17 Darden 5.1 % 5 Austin TX - - - RD Development JV 11 n/a 0.0 % Total - Unconsolidated Properties 502,400 219,600 282,800 85 43.7 % Grand Total - All Properties 751,800 413,800 338,000 156 55.0 % Grand Total - All Properties (at Share) 500,600 304,000 196,600 114 60.7 % (1) Based on signed leases as of December 31, 2025, including SNO Leases.
ITEM 2. PR OPERTIES As of December 31, 2024, the Company’s portfolio consisted of interests in 17 properties comprised of approximately 1.7 million square feet of GLA or build-to-suit leased area and 274 acres of land.
ITEM 2. PR OPERTIES As of December 31, 2025, the Company’s portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of GLA or build-to-suit leased area and 156 acres of land.
The portfolio consists of approximately 0.9 million square feet of GLA and 166 acres held by 10 Consolidated Properties and 0.8 million square feet of GLA and 108 acres held by seven Unconsolidated Properties.
The portfolio consists of approximately 0.3 million square feet of GLA and 71 acres held by five Consolidated Properties and 0.5 million square feet of GLA and 85 acres held by five Unconsolidated Properties.
(3) Property subject to a lease or ground lease. - 26 - Consolidated Properties Geographic Diversification The following table sets forth information regarding the geographic diversification of the portfolio based on signed leases as of December 31, 2024: State Number of Properties Annual Rent % of Annual Rent PSF Florida 4 $ 13,874,000 64.2 % $ 55.52 Pennsylvania 1 4,901,000 22.7 % 28.08 Massachusetts 1 2,421,000 11.2 % 28.44 California 2 236,000 1.1 % 7.10 Washington 1 190,000 0.9 % 25.33 Texas 1 - 0.0 % - Total 10 $ 21,622,000 100.0 % $ 39.31 Tenant Overview The following table provides a summary of annual base rent for the portfolio based on signed leases as of December 31, 2024: Tenant Number of Leases Leased GLA % of Total Leasable GLA Gross Annual Base Rent ("ABR") % of Total Annual Rent Gross Annual Rent PSF ("ABR PSF") In-place leases 30 484,000 53.7 % $ 17,973,000 83.1 % $ 37.13 SNO leases (1) 11 66,000 7.3 % 3,649,000 16.9 % 55.29 Total 41 550,000 61.0 % $ 21,622,000 100.0 % $ 39.31 (1) SNO = Signed not yet opened leases Unconsolidated Properties Geographic Diversification The following table sets forth information regarding the geographic diversification of the Unconsolidated Properties based on signed leases as of December 31, 2024: State Number of Properties Annual Rent % of Annual Rent PSF California 3 $ 15,276,000 98.8 % $ 71.89 Florida 1 186,000 1.2 % 19.72 Texas 2 - 0.0 % - Virginia 1 - 0.0 % - Total 7 $ 15,462,000 100.0 % $ 69.67 - 27 - Tenant Overview The following table provides a summary of annual base rent for the Unconsolidated Properties based on signed leases as of December 31, 2024: Tenant Number of Leases Leased GLA % of Total Leasable GLA Gross Annual Base Rent ("ABR") % of Total Annual Rent Gross Annual Rent PSF ("ABR PSF") In-place leases 27 222,000 26.7 % $ 15,462,000 100.0 % $ 69.65 Total 27 222,000 26.7 % $ 15,462,000 100.0 % $ 69.65 - 28 -
Consolidated Properties Geographic Diversification The following table sets forth information regarding the geographic diversification of the portfolio based on signed leases as of December 31, 2025: State Number of Properties Annual Rent % of Annual Rent PSF Pennsylvania 1 $ 4,901,000 95.6 % $ 28.08 California 2 34,000 0.7 % 1.03 Washington 1 190,000 3.7 % 25.33 Texas 1 - 0.0 % - Total 5 $ 5,125,000 100.0 % $ 26.39 - 24 - Tenant Overview The following table provides a summary of annual base rent for the portfolio based on signed leases as of December 31, 2025: Tenant Number of Leases Leased GLA % of Total Leasable GLA Gross Annual Base Rent ("ABR") % of Total Annual Rent Gross Annual Rent PSF ("ABR PSF") In-place leases 7 194,000 77.9 % $ 5,125,000 83.1 % $ 26.39 Total 7 194,000 77.9 % $ 5,125,000 83.1 % $ 26.39 Unconsolidated Properties Geographic Diversification The following table sets forth information regarding the geographic diversification of the Unconsolidated Properties based on signed leases as of December 31, 2025: State Number of Properties Annual Rent % of Annual Rent PSF California 2 $ 15,474,000 98.8 % $ 73.66 Florida 1 186,000 1.2 % 19.72 Texas 1 - 0.0 % - Virginia 1 - 0.0 % - Total 5 $ 15,660,000 100.0 % $ 71.34 Tenant Overview The following table provides a summary of annual base rent for the Unconsolidated Properties based on signed leases as of December 31, 2025: Tenant Number of Leases Leased GLA % of Total Leasable GLA Gross Annual Base Rent ("ABR") % of Total Annual Rent Gross Annual Rent PSF ("ABR PSF") In-place leases 26 220,000 43.7 % $ 15,660,000 100.0 % $ 71.34 Total 26 220,000 43.7 % $ 15,660,000 100.0 % $ 71.34 - 25 -
Removed
(2) Asset sold subsequent to December 31, 2024.
Added
(2) Property subject to a lease or ground lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn February 13, 2025, the parties to the Derivative Actions filed a stipulation and proposed order seeking to consolidate the Derivative Actions and appoint lead counsel. The Company intends to vigorously defend itself against the allegations in these lawsuits. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. - 29 - PART II
Biggest changeOn November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. - 26 - PART II
As of December 31, 2024, and 2023, the Company did not record any amounts for litigation or other matters aside from payments made by our D&O insurers, which we received during the year ended December 31, 2023. Details of the litigation and these payments are described in Note 9 to our consolidated financial statements.
As of December 31, 2025, and 2024, the Company did not record any amounts for litigation or other matters aside from payments made by our D&O insurers, which we received during the year ended December 31, 2023. Details of the litigation and these payments are described in Note 9 to our consolidated financial statements.
Removed
Seritage Growth Properties, Case No. 1:25-cv-00190 (the “Wallen Derivative Action” and, together with the Sidhu Derivative Action, the “Derivative Actions”).
Added
Seritage Growth Properties, Case No. 1:25-cv-00190 (the “Wallen Derivative Action”). On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152 (the “Cheroti Derivative Action”).
Added
The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust.
Added
On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action (the “Consolidated Derivative Action”) and appointed lead counsel.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends and Distributions The timing, amount and composition of all distributions will be made by the Company at the discretion of its Board of Trustees. Such distributions will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants, applicable law and other factors as the Board of Trustees of Seritage deems relevant.
Biggest changeSuch distributions will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants, applicable law and other factors as the Board of Trustees of Seritage deems relevant.
The Company operated as a REIT for the 2021 tax year and prior years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, - 30 - 2021.
The Company operated as a REIT for the 2021 tax year and prior years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, 2021.
The number of shareholders of record does not reflect persons or entities that held their shares in nominee or “street” name. As of March 27, 2025, no outstanding Operating Partnership units (“OP Units”) were held by limited partners other than the Company. Seritage, and its consolidating subsidiaries, own all outstanding Operating Partnership interests.
The number of shareholders of record does not reflect persons or entities that held their shares in nominee or “street” name. As of March 30, 2026, no outstanding Operating Partnership units (“OP Units”) were held by limited partners other than the Company. Seritage, and its consolidating subsidiaries, own all outstanding Operating Partnership interests.
Upon any transfer of a Class C non-voting common share to any person other than an affiliate of the holder of such share, such share shall automatically convert into one Class A common share. As of March 31, 2025, there are no Class B non-economic common shares outstanding and there are no Class C non-voting common shares outstanding.
Upon any transfer of a Class C non-voting common share to any person other than an affiliate of the holder of such share, such share shall automatically convert into one Class A common share. As of March 30, 2026, there are no Class B non-economic common shares outstanding and there are no Class C non-voting common shares outstanding.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Class A common shares are listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “SRG”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOL DER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Class A common shares are listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “SRG”.
Refer to Note 7 – Income Taxes of the Notes to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. - 31 - ITEM 6. RESERVED - 32 -
Refer to Note 7 – Income Taxes of the Notes to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. - 27 - ITEM 6. RESERVED - 28 -
Common Shares and Operating Partnership Units On March 27, 2025, the reported closing sale price per share of our Class A common shares on the NYSE was $3.30. As of March 27, 2025, there were 56,324,607 Class A common shares issued and outstanding which were held by approximately 120 shareholders of record.
Common Shares and Operating Partnership Units On March 30, 2026, the reported closing sale price per share of our Class A common shares on the NYSE was $2.66. As of March 30, 2026, there were 56,324,607 Class A common shares issued and outstanding which were held by approximately 120 shareholders of record.
Removed
Share-Based Compensation The following table provides information with respect to the Company’s equity compensation plan as of December 31, 2024: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders 87,899 (1) n/a (2) 2,048,587 (3) Total 87,899 — 2,048,587 (1) Represents restricted stock awards and units previously granted and that remain unvested as of December 31, 2024.
Added
Share-Based Compensation There were no unvested restricted stock awards or units at December 31, 2025. There are 2,048,587 securities available for future issuance under the equity compensation plans at December 31, 2025. Dividends and Distributions The timing, amount and composition of all distributions will be made by the Company at the discretion of its Board of Trustees.
Removed
(2) Weighted average exercise price does not apply to restricted stock units (“RSU”). (3) Shares remaining available for future issuance under the Seritage Growth Properties 2015 Share Plan, taking into account 84,216 shares of restricted stock previously granted and 1,117,197 shares subject to grants of RSUs previously granted (including those that remain unvested reported in column (a)).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeComparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table presents selected data on comparative results from the Company’s consolidated statements of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023 (in thousands): Year Ended December 31, 2024 2023 $ Change Revenue Rental income $ 17,055 $ 15,060 $ 1,995 Expenses Property operating (16,339 ) (21,282 ) 4,943 Abandoned project cots (5,732 ) - (5,732 ) Real estate taxes (3,935 ) (6,128 ) 2,193 Depreciation and amortization (13,118 ) (14,471 ) 1,353 General and administrative (30,021 ) (45,988 ) 15,967 Gain on sale of real estate, net 10,678 96,214 (85,536 ) Gain on sale of interest in unconsolidated entities 2,042 6,407 (4,365 ) Impairment of real estate assets (87,536 ) (107,043 ) 19,507 Equity in loss of unconsolidated entities (3,154 ) (55,857 ) 52,703 Interest and other income (expense), net 2,513 17,067 (14,554 ) Interest expense (24,972 ) (44,571 ) 19,599 Rental Income The following table presents the results for rental income for the year ended December 31, 2024, as compared to the corresponding year ended December 31, 2023 (in thousands): Year Ended December 31, Year Ended December 31, 2024 2023 Rental Income % of Total Rental Income Rental Income % of Total Rental Income $ Change In-place retail leases $ 17,957 105.3 % $ 31,904 211.8 % $ (13,947 ) Straight-line rent expense (917 ) -5.4 % (16,872 ) -112.0 % 15,955 Amortization of above/below market leases 15 0.1 % 28 0.2 % (13 ) Total rental income $ 17,055 100.0 % $ 15,060 100.0 % $ 1,995 In-place retail tenants rental income decreased $13.9 million during 2024 primarily due to property sales.
Biggest changeComparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table presents selected data on comparative results from the Company’s consolidated statements of operations for the year ended December 31, 2025, as compared to the year ended December 31, 2024 (in thousands): Year Ended December 31, 2025 2024 $ Change Revenue Rental income $ 17,597 $ 17,055 $ 542 Expenses Property operating (13,984 ) (16,339 ) 2,355 Abandoned project costs - (5,732 ) 5,732 Real estate taxes (2,455 ) (3,935 ) 1,480 Depreciation and amortization (6,282 ) (13,118 ) 6,836 General and administrative (31,949 ) (30,021 ) (1,928 ) Gain on sale of real estate, net 20,342 10,678 9,664 Gain/(loss) on sale of interest in unconsolidated entities (1,417 ) 2,042 (3,459 ) Impairment of real estate assets (18,800 ) (87,536 ) 68,736 Equity in income (loss) of unconsolidated entities (13,169 ) (3,154 ) (10,015 ) Interest and other income (expense), net 1,568 2,513 (945 ) Interest expense (20,273 ) (24,972 ) 4,699 Rental Income Rental income increased by $0.5 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Impairment of Real Estate Assets During the year ended December 31, 2024, the Company recognized $1.7 million impairment of real estate assets as a result of the Company accepting offers below book value on three properties and an $85.8 million impairment of real estate assets on the Company's development property in Aventura, FL due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 which triggered the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipment .
During the year ended December 31, 2024, the Company recognized $1.7 million impairment of real estate assets as a result of the Company accepting offers below book value on three properties and an $85.8 million impairment of real estate assets on the Company's development property in Aventura, FL due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 which triggered the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipment .
The complaint in each of the Derivative Actions seeks compensatory - 41 - damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper.
The complaint in each of the derivative actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper.
The 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 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 of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company.
On October 24, 2022, we received shareholder approval of the Plan of Sale. o 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; o 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; o From the approval of the Plan of Sale on October 24, 2022 through December 31, 2024, we sold 89 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.0 billion of gross proceeds. • Sales of interests in Unconsolidated Properties.
On October 24, 2022, we received shareholder approval of the Plan of Sale. o 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; o 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; o From the approval of the Plan of Sale on October 24, 2022 through December 31, 2025, we sold 94 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.2 billion 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. o 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; o 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; o From the approval of the Plan of Sale on October 24, 2022 through December 31, 2024, we sold our interests in 10 Unconsolidated Properties and generated approximately $151.5 million of gross proceeds. • 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. o 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; o 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; o From the approval of the Plan of Sale on October 24, 2022 through December 31, 2025, we sold our interests in 12 Unconsolidated Properties and generated approximately $159.6 million of gross proceeds. • Unconsolidated Properties.
As of December 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.
We had contributed interests in 12 properties to unconsolidated entities, which generated approximately $242.4 million of gross proceeds from July 2017 through December 31, 2025. 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.
General and Administrative Expenses General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.
General and Administrative Expenses General and administrative expenses consist of personnel costs, including share-based compensation and third party consulting fees, professional fees, office expenses and overhead expenses.
Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the year ended December 31, 2024 and the Company recorded net operating cash outflows of $53.5 million.
Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the year ended December 31, 2025 and the Company recorded net operating cash outflows of $34.9 million.
As of December 31, 2023 the Company's debt issuance costs were fully amortized. - 38 - 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.
Term Loan Facility / Incremental Funding Facility 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.
Gain/Loss on Sale of Interests in Unconsolidated Entities During the year ended December 31, 2024, the Company sold its interest in one unconsolidated property and recorded a gain of $2.0 million. During the year ended December 31, 2023, the Company sold its interest in eight unconsolidated properties, and recorded a gain totaling $6.4 million.
Gain/Loss on Sale of Interests in Unconsolidated Entities During the year ended December 31, 2025, the Company sold its interest in one unconsolidated property and recorded a loss of $1.4 million. During the year ended December 31, 2024, the Company sold its interest in one unconsolidated property, and recorded a gain of $2.0 million.
As a result of changes to weather patterns caused by climate change, our properties could experience increased storm intensity and other natural disasters in future periods and, as such, we cannot provide assurance that natural disasters will not have a material impact on our financial condition, results of operations or cash flows over the foreseeable future.
As a result of changes to weather patterns caused by climate change, our properties could experience increased storm intensity and other natural disasters in future periods and, as such, we cannot provide assurance that natural disasters will not have a material impact on our financial condition, results of operations or cash flows over the foreseeable future. - 30 - Results of Operations We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties.
Cash Flows from Investing Activities Significant components of net cash provided by investing activities include: − In 2024, $155.7 million of net proceeds from the sale of real estate and $8.0 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($27.5) million and investments in unconsolidated entities of ($9.3) million; and − In 2023, $673.5 million of net proceeds from the sale of real estate and $152.6 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($79.7) million and investments in unconsolidated entities of ($13.4) million.
Cash Flows from Investing Activities Significant components of net cash provided by investing activities include: − In 2025, $210.0 million of net proceeds from the sale of real estate, $8.1 million of net proceeds from the sale of interests in unconsolidated entities and $7.1 million of distributions from the unconsolidated entities offset by development of real estate of ($26.3) million and investments in unconsolidated entities of ($0.5) million; and − In 2024, $155.7 million of net proceeds from the sale of real estate and $8.0 million of distributions and proceeds from the disposition of interests in unconsolidated entities offset by development of real estate of ($27.5) million and investments in unconsolidated entities of ($9.3) million.
Depreciation and Amortization Expenses The decrease of $1.4 million in depreciation and amortization expenses for the year ended December 31, 2024 was due primarily to a $3.9 million decrease due to property sales which was partially offset by $1.5 million in depreciation related to moving a property out of held for sale.
Real Estate Taxes Real estate taxes decreased by approximately $1.5 million due to property sales. - 31 - Depreciation and Amortization Expenses The decrease of $6.8 million in depreciation and amortization expenses for the year ended December 31, 2025 was primarily due to property sales which was partially offset by $1.5 million in depreciation related to moving a property out of held for sale in 2024.
Interest Expense The decrease of $19.6 million in interest expense for the year ended December 31, 2024 was driven by partial Term Loan Facility pay downs. 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.
Interest Expense The decrease of $4.7 million in interest expense for the year ended December 31, 2025 was driven by partial Term Loan Facility pay downs, partially offset by an increase in amortization expense of deferred financing costs. - 32 - 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.
The Company did not record any other-than-temporary impairment losses for the year December 31, 2024. The Company recorded $11.7 million in other-than-temporary impairment losses in investments in unconsolidated entities for the year ended December 31, 2023.
The Company recorded $8.5 million in other-than-temporary impairment losses in investments in in unconsolidated entities for the year ended December 31, 2025. The Company did not record any other-than-temporary impairment losses for the years ending December 31, 2024.
Information concerning our obligations and commitments to make future payments under contracts for these loan and lease agreements as of December 31, 2024 is aggregated in the following table (in thousands): Payments due by Period Within After Minimum Cash Requirements Total 1 year 2 - 3 years 4 -5 years 5 years Long-term debt (1) $ 250,640 $ 250,640 $ — $ — $ — Operating leases 2,765 605 90 90 1,980 Total $ 253,405 $ 251,245 $ 90 $ 90 $ 1,980 (1) Includes expected interest payments.
Information concerning our obligations and commitments to make future payments under contracts for these loan and lease agreements as of December 31, 2025 is aggregated in the following table (in thousands): - 34 - Payments due by Period Within After Minimum Cash Requirements Total 1 year 2 - 3 years 4 -5 years 5 years Long-term debt (1) $ 52,217 $ 52,217 $ — $ — $ — Operating leases 2,292 177 90 90 1,935 Total $ 54,509 $ 52,394 $ 90 $ 90 $ 1,935 (1) Includes expected interest payments.
Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on the maturity date of the Term Loan; 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).
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). - 33 - 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”).
As of December 31, 2024, our portfolio consisted of interests in 17 properties comprised of approximately 1.7 million square feet of GLA or build-to-suit leased area and 274 acres of land.
As of December 31, 2025, our portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of GLA or build-to-suit leased area and 156 acres of land.
Gain on Sale of Real Estate During the year ended December 31, 2024, the Company sold 13 properties for aggregate consideration of $163.5 million and recorded a gain totaling $10.7 million. During the year ended December 31, 2023, the Company sold 60 properties, for aggregate consideration of $702.0 million and recorded a gain totaling $96.2 million.
Gain on Sale of Real Estate During the year ended December 31, 2025, the Company sold five properties for aggregate consideration of $222.6 million and recorded a gain totaling $20.3 million. During the year ended December 31, 2024, the Company sold 13 properties, for aggregate consideration of $163.5 million and recorded a gain totaling $10.7 million.
Asset Sales and Sales of Unconsolidated Properties During the year ended December 31, 2024, the Company sold 13 wholly owned assets, generating gross proceeds of $163.5 million and monetized two unconsolidated properties for an additional $14.9 million, or $10.8 million at share, of gross proceeds.
Asset Sales and Sales of Unconsolidated Properties During the year ended December 31, 2025, the Company sold five wholly owned assets, generating gross proceeds of $222.6 million and monetized two unconsolidated properties for an additional $8.1 million of gross proceeds.
Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant, and other factors.
Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant, and other factors. Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our consolidated statements of income.
In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects including 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.
In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects - 36 - including the effects of demand, competition, and other economic factors such as discount rates and market comparables.
Capital Expenditures During the year ended December 31, 2024 the Company invested $27.5 million in our consolidated development and operating properties and an additional $9.3 million into our unconsolidated joint ventures.
During the year ended December 31, 2024 the Company invested $27.5 million in its consolidated properties and $9.3 million in its unconsolidated entities.
Additionally, the Company generated net investing cash inflows of $126.9 million during the year ended December 31, 2024, which were driven by asset sales and partially offset by development expenditures and recorded financing cash outflows of $125.3 million, primarily due to partial repayments of the Term Loan Facility.
Additionally, the Company generated net investing cash inflows of $198.5 million during the year ended December 31, 2025, which were driven by asset sales and partially offset by development expenditures.
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.
Cash Flows from Financing Activities Significant components of net cash used in financing activities include: − In 2025, ($190.0) million cash repayment of Term Loan Facility principal, payment of deferred financing costs of ($4.0) million and ($4.9) million cash payments of preferred dividends; and − In 2024, ($120.0) million cash repayment of Term Loan Facility principal and ($4.9) million cash payment of preferred dividends. - 35 - 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.
Property Operating Expenses The decrease of $4.9 million in property operating expense for the year ended December 31, 2024 was due primarily to decreases of $7.5 million of operating expenses related to asset sales which was partially offset by increases of demolition costs of $0.6 million and $1.5 million in insurance expense. - 35 - Abandoned project costs During the year ended December 31, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property which the Company is not currently pursuing entitlements.
Abandoned Project Costs During the year ended December 31, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property which the Company is not currently pursuing entitlements. There were no abandoned project costs in 2025.
The portfolio encompasses 10 wholly owned properties consisting of approximately 0.9 million square feet of GLA and 166 acres and seven unconsolidated entities consisting of approximately 0.8 million square feet of GLA and 108 acres.
The portfolio encompasses five consolidated properties consisting of approximately 0.3 million square feet of GLA and 71 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres.
As of March 31, 2025, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $14.0 million, subject to buyer diligence and closing conditions. - 33 - Effects of Natural Disasters The Company assessed the impact of the natural disasters that occurred during the year ended December 31, 2024 and determined that natural disasters did not have a material impact on our operating results or financial position.
Effects of Natural Disasters The Company assessed the impact of the natural disasters that occurred during the year ended December 31, 2025 and determined that natural disasters did not have a material impact on our operating results or financial position.
Dividends and Distributions The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during 2024.
Dividends and Distributions The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during 2025. 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.
Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our consolidated statements of income. - 42 - Recent Accounting Pronouncements Refer to Note 2 of the consolidated financial statements for recently issued accounting pronouncements.
Recent Accounting Pronouncements Refer to Note 2 of the consolidated financial statements for recently issued accounting pronouncements. - 37 -
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 $87.5 million and $107.0 million in impairment losses for the years ended December 31, 2024 and 2023, respectively.
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.
Minimum Cash Requirements Our contractual obligations relate to our Term Loan Facility and non-cancelable operating leases in the form of a ground lease at one of our properties, as well as an operating lease for our corporate office.
The Company’s Board of Trustees also declared the following dividends on the Company’s Series A Preferred Shares during 2026, 2025 and 2024: Series A Declaration Date Record Date Payment Date Preferred Share 2026 February 25 March 31 April 15 $ 0.43750 2025 October 29 December 31 January 15, 2026 $ 0.43750 July 23 September 30 October 15 0.43750 May 8 June 30 July 15 0.43750 February 26 March 31 April 15 0.43750 2024 October 28 December 31 January 15, 2025 $ 0.43750 July 31 September 30 October 15 0.43750 May 2 June 28 July 15 0.43750 February 29 March 29 April 15 0.43750 Minimum Cash Requirements Our contractual obligations relate to our Term Loan Facility and non-cancelable operating leases in the form of a ground lease at one of our properties, as well as an operating lease for our corporate office.
The decrease was partially offset by an increase of $2.3 million in rental income from the Aventura, FL property. The decrease of $16.0 million in straight-line rental expense during 2024 was due primarily to the decrease in property sales of tenanted properties in 2024, decreasing the amount of straight-line rental income reversals.
The increase is primarily due to lease up at the Aventura, FL property. The increase was partially offset by a decrease of rental income due to property sales.
During the year ended December 31, 2023, the Company recognized $107.0 million of impairment losses as a result of recognizing an impairment on the Company's development property in Aventura, FL, which is included within the condensed consolidated statements of operations Equity in Loss of Unconsolidated Entities During the year ended December 31, 2024, the Company recorded $3.2 million of loss from investments in unconsolidated entities primarily due to $2.6 million of loss on the sale of one of the underlying properties.
During the year ended December 31, 2025 we recognized $8.5 million in other-than-temporary impairment losses on our investments in unconsolidated entities, which is included in equity in loss of unconsolidated entities within the 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 Term Loan Amendment as further described below.
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.
The decrease of $16.0 million for the year ended December 31, 2024 was primarily driven by a decrease of $14.2 million related to third-party consulting fees utilized to execute the Plan of Sale as well as a decrease of $2.8 million in personnel costs.
Property Operating Expenses The decrease of $2.4 million in property operating expense for the year ended December 31, 2025 was primarily due to a decrease in $1.5 million of common area maintenance costs and $0.8 million of insurance expense related to sold properties, as well as savings in utilities expenses.
During the year ended December 31, 2023 the Company invested $79.7 million in our consolidated development and operating properties and an additional $13.4 million into our unconsolidated joint ventures. - 40 - Cash Flows for the Year Ended December 31, 2024 Compared to December 31, 2023 The following table summarizes the Company’s cash flow activities for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 $ Change Net cash used in operating activities $ (53,548 ) $ (53,061 ) $ (487 ) Net cash provided by investing activities 126,870 732,911 (606,041 ) Net cash used in financing activities (125,313 ) (675,089 ) 549,776 Cash Flows from Operating Activities Significant components of net cash used in operating activities include: − In 2024, a decrease in rental income and gain on sale of real estate assets and a decrease in accounts payable, accrued expenses and other liabilities; and − In 2023, a decrease in rental income and gain on sale of real estate assets and a decrease in accounts payable, accrued expenses and other liabilities.
Cash Flows for the Year Ended December 31, 2025 Compared to December 31, 2024 The following table summarizes the Company’s cash flow activities for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 $ Change Net cash used in operating activities $ (34,903 ) $ (53,548 ) $ 18,645 Net cash provided by investing activities 198,468 126,870 71,598 Net cash used in financing activities (198,989 ) (125,313 ) (73,676 ) Cash Flows from Operating Activities Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses.
Real Estate Taxes Real estate taxes decreased by approximately $5.0 million due to property sales. The decrease was partially offset by an increase of $1.0 million in Aventura, FL real estate taxes and a reduction of capitalized real estate taxes of approximately $1.3 million.
The increase in loss was partially offset by an increase in income of $0.5 million from the Company’s investment in UTC and a decrease in losses on sale of unconsolidated entities of $5.1 million.
As of March 31, 2025, we had one asset owned by our consolidated joint venture under contract for sale subject to customary due diligence for total anticipated proceeds of $14.0 million and is subject to closing conditions. - 37 - 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 (as amended, 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 Berkshire Hathaway as administrative agent.
Subsequent to the year ended December 31, 2025, the Company sold an interest in an unconsolidated property and received a distribution of $5.7 million. - 29 - As of March 31, 2026, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $11.0 million, subject to buyer diligence and closing conditions.
Removed
Impairment of real estate assets and investments in unconsolidated entities Due to negotiations for rent relief with existing tenants that began during the second quarter of 2024 the need for an impairment analysis pursuant to ASC 360, Property, Plant and Equipment was triggered. We also agreed to sell certain assets below carrying value.
Added
Impairment of Real Estate Assets and Investments in Unconsolidated Entities For the year ended December 31, 2025, we recognized a total of $18.8 million of impairment losses, mostly due to accepting an offer to sell below carrying value, which are included in impairment of real estate assets within the consolidated statements of operations.
Removed
As such, we recorded impairment losses of $87.5 million for the year ended December 31, 2024, primarily due to changes in discount rates and residual capitalization rates between June 2023 and June 2024. We did not recognize any other-than-temporary impairment losses on our investments in unconsolidated entities during the year ended December 31, 2024.
Added
In addition, during the year ended December 31, 2025, we recognized an equity loss of $7.1 million representing our proportionate share of an impairment charge at one of our unconsolidated entities. The equity loss recognized was net of previous basis differences.
Removed
Due to increasing development and construction costs, deteriorating market conditions and, in certain instances excluding Aventura, FL, agreeing to sell below carrying value, we recognized $107.0 million of impairment losses during the year ended December 31, 2023. We recognized $11.7 million of other-than-temporary impairment losses on our investments in unconsolidated entities during the year ended December 31, 2023.
Added
The increase of $1.9 million for the year ended December 31, 2025 was primarily driven by an increase in severance expense of $6.7 million, partially offset by decreases in personnel costs of $4.8 million.
Removed
The wildfires in Los Angeles, CA that occurred in January 2025 did not have a material impact on our operating results or financial condition but could create a delay in our ability to sell the Santa Monica asset.
Added
Impairment of Real Estate Assets During the year ended December 31, 2025, the Company recognized $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value.
Removed
Appointment of New Chief Executive Officer and President On March 28, 2025, we announced that our Board of Trustees and Andrea L. Olshan have agreed that Ms. Olshan will step down as the Company’s Chief Executive Officer and President (“CEO”) and as a member of the Board effective as of April 11, 2025 (the “Separation Date”).
Added
In addition, the Company also recognized a $0.8 million impairment of real estate assets as a result of the Company transferring the Aventura, FL property to held for sale which requires the asset to be carried at the lower of book value or fair value less estimated costs to sell.
Removed
Also on March 28, 2025, we announced that our Board of Trustees appointed Board Chairman Adam Metz as Interim CEO as of the Separation Date. In his role as Interim CEO, Mr.
Added
Equity in Loss of Unconsolidated Entities The increase in loss for the year ended December 31, 2025 was driven by the recognition of $8.5 million of other-than-temporary impairment losses and the Company’s share of impairment losses of $7.1 million from one of its investments in unconsolidated entities.
Removed
Metz will serve as the principal executive officer of the Company until his successor is duly appointed and qualified, or until his earlier termination or removal, and will receive a monthly salary of $80,000. Mr.
Added
Interest and Other Income (Expense), Net For the year ended December 31, 2025, interest income decreased by $1.5 million due to a decrease in cash balances and a decrease of interest rates. The decrease was partially offset by a decrease in other expenses of $0.5 million, primarily driven by a decrease in settlement expenses related to litigation.
Removed
Metz will also continue to serve as Board Chairman, and the Board has appointed Mitchell Sabshon to serve as Lead Independent Director as of the Separation Date. - 34 - Results of Operations We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties.
Added
Subsequent to year end we sold an interest in an unconsolidated property and received a distribution of $5.7 million. As of March 31, 2026, we had one asset owned by our consolidated joint venture under contract to sell for total anticipated proceeds of $11.0 million, subject to buyer diligence and closing conditions.
Removed
During the year ended December 31, 2023, the Company recorded $55.9 million of loss from investments in unconsolidated entities primarily due to impairment charges of $70.8 million and $41.9 million recorded on two underlying investments resulting in the Company picking up its share of these impairments of $35.4 million and $5.5 million, respectively, and an $11.7 million other-than-temporary impairment charge recorded against three other investments. - 36 - Interest and Other Income The decrease of $14.5 million in interest and other income is primarily due to the receipt of $11.6 million in settlement proceeds during the year ended December 31, 2023.
Added
The Third Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K) executed on June 16, 2022 provided exceptions to this right.
Removed
Subsequent to December 31, 2024, we sold one asset for gross proceeds of $29.9 million.
Added
There is no assurance of the Company’s ability to access the Incremental Funding Facility. On July 28, 2025, the Company exercised its extension option and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid the incremental facility fee of $4.0 million.
Removed
The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below.
Added
All other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement. During the year ended December 31, 2025, we repaid $190.0 million against the principal of the Term Loan Facility.
Removed
On February 2, 2023, the Company made a $230 million voluntary prepayment, reducing the unpaid principal balance to $800 million, and the debt maturity was extended for two years to July 31, 2025.
Added
Our outstanding balance as of December 31, 2025 is $50.0 million. See Note 1 – Organization of the Notes to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for a discussion of liquidity and going concern.
Removed
The Company made additional voluntary prepayments aggregating $440 million during the remainder of 2023 and additional voluntary prepayments aggregating $120.0 million during 2024, reducing the unpaid principal balance to $240.0 million at December 31, 2024.
Added
Off-Balance Sheet Arrangements The Company accounts for its investments in entities that it does not have a controlling interest in but exercises significant influence under the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated entities.
Removed
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 consolidated statements of operations.
Added
As of December 31, 2025 and December 31, 2024, we did not have any off balance sheet financing arrangements. Capital Expenditures During the year ended December 31, 2025 the Company invested $26.3 million in our consolidated properties and $0.5 million in its unconsolidated entities.
Removed
As of December 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.
Added
Rental revenues are not sufficient to cover these expenses.
Removed
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.
Added
On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152.
Removed
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.
Added
The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust.
Removed
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.
Added
On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action and appointed lead counsel.
Removed
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.
Added
On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.
Removed
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.
Added
The Company recognized $18.8 million and $87.5 million in impairment losses for the years ended December 31, 2025 and 2024, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2024, we had $240.0 million of consolidated debt, all of which is borrowed under our fixed-rate Term Loan Facility which is based on a fixed term and imputed interest rate and therefore, neither are subject to interest rate fluctuations.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2025, we had $50.0 million of consolidated debt, all of which is borrowed under our fixed-rate Term Loan Facility which is based on a fixed term and imputed interest rate and therefore, neither are subject to interest rate fluctuations.
As of December 31, 2024, the estimated fair value of our consolidated debt was $235.7 million. The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt.
As of December 31, 2025, the estimated fair value of our consolidated debt was $50.0 million. The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt.

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