Seritage Growth Properties Reports Significant Revenue Decline and Increased Net Loss in Q1 2026

Seritage Growth Properties reported a significant decline in financial performance for the first quarter of 2026, with total revenue falling to $2.05 million, down from $4.60 million in the same period last year. The decrease in revenue was primarily attributed to a $2.55 million drop in rental income, which fell to $1.91 million from $4.46 million, largely due to property sales. The company also recognized a substantial impairment loss of $15.2 million on real estate assets during the quarter, compared to no such losses in the prior year.

Total expenses for the quarter decreased to $7.49 million from $21.63 million in the previous year, driven by reductions in property operating expenses, depreciation, and general administrative costs. Notably, general and administrative expenses saw a significant reduction of $10.4 million, primarily due to lower personnel costs, including severance expenses. Despite these reductions, the company reported a net loss of $30.32 million, compared to a net loss of $22.20 million in the first quarter of 2025. The loss per share attributable to Seritage common shareholders was $(0.56), compared to $(0.42) in the prior year.

Operationally, Seritage continues to execute its Plan of Sale, which was approved by shareholders in October 2022. As of March 31, 2026, the company had interests in 10 properties, encompassing approximately 0.8 million square feet of gross leasable area. The company has been actively selling properties as part of its strategy to enhance shareholder value, having sold 94 consolidated properties since the approval of the Plan of Sale, generating approximately $1.2 billion in gross proceeds.

The company’s liquidity remains a concern, as it recorded net operating cash outflows of $5.72 million during the quarter. Seritage's primary cash uses include property operating expenses and general administrative costs, which have not been fully covered by rental income. The company anticipates continuing to fund its obligations through a combination of cash on hand, sales of properties, and potential financing transactions. As of March 31, 2026, Seritage had an outstanding balance of $50 million on its Term Loan Facility, which matures on July 31, 2026.

Looking ahead, Seritage faces ongoing challenges due to elevated interest rates and market conditions that may impact the pricing of its remaining assets. The company is committed to enhancing the value of its properties through leasing and development strategies while remaining open to pursuing additional strategic alternatives. However, the uncertainty surrounding its ability to execute the Plan of Sale and the potential for further impairments raises questions about its future financial stability.