Seritage Growth Properties Reports $22.2 Million Net Loss in Q1 2025

Seritage Growth Properties reported a net loss of $22.2 million for the first quarter of 2025, compared to a net loss of $19.0 million in the same period of the previous year. The company's total revenue decreased to $4.6 million from $5.8 million, primarily driven by a decline in rental income, which fell to $4.5 million from $5.7 million. This reduction in rental income was attributed to the sale of income-producing properties throughout 2024, although it was partially offset by increased rental income from the Aventura, Florida property.

Total expenses for the quarter increased to $21.6 million from $19.5 million year-over-year. Notably, general and administrative expenses surged to $15.7 million, up from $9.2 million, largely due to severance expenses. Conversely, property operating expenses decreased to $2.9 million from $3.7 million, and depreciation and amortization expenses dropped significantly to $2.1 million from $5.3 million, reflecting the impact of property sales. The company also recorded a gain on the sale of real estate of $6.9 million, compared to $1.1 million in the prior year.

As of March 31, 2025, Seritage's total assets were valued at $649.7 million, down from $677.8 million at the end of 2024. The decrease was primarily due to the sale of properties and a reduction in the net investment in real estate, which fell to $330.0 million from $358.6 million. The company’s liabilities remained relatively stable at $267.3 million, with a term loan facility balance of $240 million. The company has the option to extend the maturity of this loan to July 31, 2026, which it is considering.

In terms of strategic developments, Seritage continues to execute its Plan of Sale, which was approved by shareholders in October 2022. The company aims to enhance shareholder value through the monetization of its assets. As of March 31, 2025, Seritage's portfolio consisted of 16 properties, encompassing approximately 1.6 million square feet of gross leasable area. The company is actively pursuing sales of both consolidated and unconsolidated properties, having generated significant proceeds from these transactions in recent years.

Looking ahead, Seritage anticipates that its obligations will continue to exceed property rental income, necessitating funding through asset sales and other capital sources. The company remains cautious about market conditions, including elevated interest rates and potential macroeconomic impacts, which could affect the pricing of its remaining assets. Management is focused on positioning its properties for sale while exploring various strategic alternatives to maximize value for shareholders.