UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 14, 2023, the Company issued a press release regarding its financial results for the three and six months ended June 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report.
In addition, on August 14, 2023, the Company published certain supplementary financial information relating to the three and six months ended June 30, 2023. Such information is furnished as Exhibit 99.2 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD.
On August 14, 2023, Seritage Growth Properties (the “Company”) announced that it made a voluntary prepayment in the amount of $70 million under its $1.6 billion Senior Secured Term Loan Agreement, dated July 31, 2018, among the Company, Seritage Growth Properties, L.P. and Berkshire Hathaway Life Insurance Company of Nebraska (as amended by amendment no. 1, dated May 5, 2020, by amendment no. 2, dated November 24, 2021, and by amendment no. 3, dated June 16, 2022, the “Term Loan Agreement”). Following the prepayment, the Company has repaid $1.12 billion since December 2021 and $480 million remains outstanding under the Term Loan Agreement. The prepayment will also reduce the Company's total annual interest expense related to the term loan facility by approximately $4.9 million.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SERITAGE GROWTH PROPERTIES |
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By: |
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/s/ Matthew Fernand |
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Matthew Fernand |
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Chief Legal Officer |
Date: August 14, 2023
Exhibit 99.1
Seritage Growth Properties Reports Second Quarter 2023 Operating Results
New York – August 14, 2023– Seritage Growth Properties (NYSE: SRG) (the “Company”), a national owner and developer of retail, residential and mixed-use properties today reported financial and operating results for the three and six months ended June 30, 2023.
“We continue to make to progress on our strategy to maximize value for our shareholders. Since initiating our plan of sale in March of 2022, we have sold 127 properties for approximately $1.4 billion in gross proceeds and paid down $960 million on our term loan. Our rapid deleveraging has eliminated $67.2 million in debt service, $21.9 million in negative carry on wholly owned vacant or non-income producing properties and significant annual carry and development costs on disposed Joint Venture assets. Year to date we have sold 54 wholly owned, consolidated or joint venture properties for total gross proceeds of $654.6 million. Additionally, we have over $200 million of assets either under contract or with accepted offers. We plan to continue to use excess sales proceeds to reduce the Company’s term loan balance. In conjunction with our sales activity, we continue to build asset value through leasing, development and entitlement activity for the properties slated for sale later in our process,” said Andrea L. Olshan, Chief Executive Officer and President.
Sale Highlights:
Financial Highlights:
For the three months ended June 30, 2023:
Other Highlights
1
Sales Activity
The two tables below provide additional information regarding the Company’s disposition activity. The first table provides disposition information as of August 11, 2023. The second table provides updated information, as of August 11, 2023, on portfolio status by market, property type and transaction size consistent.
Sales Progress as of August 11, 2023 (1) (2) |
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Stabilized |
Number |
Cap |
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2023 Sales |
2024 & Beyond Sales |
Gross Proceeds |
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Closed since March 31, 2023 |
2 |
7.2% |
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2 |
- |
$ |
36,650 |
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Under Contract - No DD |
2 |
7.5% |
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2 |
- |
$ |
48,200 |
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Under Contract - In DD |
1 |
6.6% |
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1 |
- |
$ |
5,200 |
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PSA Neg. / Accepted Offer |
1 |
7..4% |
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1 |
- |
$ |
34,000 |
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Total |
6 |
7.3% |
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6 |
- |
$ |
124,050 |
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Remaining Stabilized Sales Parcels |
3 |
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- |
3 |
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Partially Stabilized |
Number |
Cap |
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2023 Sales |
2024 & Beyond Sales |
Gross Proceeds |
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Closed since March 31, 2023 |
5 |
7.3% |
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5 |
- |
$ |
102,450 |
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Under Contract - No DD |
2 |
5.8% |
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1 |
1 |
$ |
43,500 |
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Under Contract - In DD |
- |
N/A |
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- |
- |
$ |
- |
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PSA Neg. / Accepted Offer |
- |
N/A |
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- |
- |
$ |
- |
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Total |
7 |
6.8% |
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6 |
1 |
$ |
145,950 |
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Remaining Partially Stabilized Sales Parcels |
5 |
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2 |
3 |
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Pads |
Number |
Cap |
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2023 Sales |
2024 & Beyond Sales |
Gross Proceeds |
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Closed since March 31, 2023 |
2 |
5.7% |
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2 |
- |
$ |
7,015 |
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Under Contract - No DD |
1 |
9.8% |
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1 |
- |
$ |
2,450 |
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Under Contract - In DD |
1 |
5.5% |
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1 |
- |
$ |
2,727 |
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PSA Neg. / Accepted Offer |
1 |
6.1% |
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1 |
- |
$ |
4,000 |
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Total |
5 |
6.4% |
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5 |
- |
$ |
16,192 |
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Remaining Pad Sales Parcels |
- |
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- |
- |
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Joint Ventures |
Number |
PSF |
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2023 Sales |
2024 & Beyond Sales |
Gross Proceeds |
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Closed since March 31, 2023 |
7 |
$ |
101.47 |
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7 |
- |
$ |
114,675 |
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Under Contract - No DD |
1 |
$ |
97.82 |
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1 |
- |
$ |
25,964 |
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Under Contract - In DD |
- |
N/A |
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- |
- |
$ |
- |
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PSA Neg. / Accepted Offer |
1 |
$ |
43.53 |
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1 |
- |
$ |
8,139 |
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Total |
9 |
$ |
94.01 |
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9 |
- |
$ |
148,778 |
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Remaining Joint Venture Sales Parcels |
7 |
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1 |
6 |
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Non-Income Producing |
Number |
PSF |
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Per Acre |
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Carry Cost |
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2023 Sales |
2024 & Beyond Sales |
Gross Proceeds |
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Closed since March 31, 2023 |
11 |
$ |
76.19 |
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$ |
754 |
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$ |
(5,809 |
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11 |
- |
$ |
102,997 |
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Under Contract - No DD (3) |
3 |
$ |
19.60 |
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$ |
417 |
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$ |
(822 |
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3 |
- |
$ |
13,137 |
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Under Contract - In DD |
2 |
$ |
69.73 |
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$ |
890 |
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$ |
(602 |
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2 |
- |
$ |
18,952 |
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PSA Neg. / Accepted Offer |
4 |
$ |
24.28 |
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$ |
259 |
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$ |
(1,241 |
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3 |
1 |
$ |
16,100 |
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Total |
20 |
$ |
51.13 |
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$ |
601 |
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$ |
(8,474 |
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19 |
1 |
$ |
151,186 |
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Remaining Non-Income Producing Sales Parcels |
18 |
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5 |
13 |
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2
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As of |
2023 Sales Projections as of August 11, 2023 |
2024 & Beyond Sales Projections as of August 11, 2023 |
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Category |
Sales Portfolio |
Sold |
Under Contract - No DD |
Under Contract - in DD |
PSA Neg. / Accepted Offer |
Pipeline |
Under Contract - No DD |
PSA Neg. / Accepted Offer |
Pipeline |
Gateway markets |
11 |
1 |
- |
- |
- |
- |
- |
- |
10 |
Primary markets |
44 |
20 |
5 |
2 |
1 |
4 |
1 |
- |
11 |
Secondary markets |
35 |
24 |
1 |
2 |
2 |
2 |
- |
1 |
3 |
Tertiary markets |
17 |
9 |
2 |
- |
3 |
2 |
- |
- |
1 |
Market Composition Total |
107 |
54 |
8 |
4 |
6 |
8 |
1 |
1 |
25 |
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Multi-Tenant Retail |
32 |
23 |
2 |
- |
1 |
1 |
1 |
- |
4 |
Premier |
10 |
1 |
- |
- |
- |
- |
- |
- |
9 |
Residential |
5 |
3 |
- |
- |
- |
- |
- |
- |
2 |
Other Unconsolidated Entities |
13 |
6 |
1 |
- |
1 |
1 |
- |
- |
4 |
Non-Core Properties |
47 |
21 |
5 |
4 |
4 |
6 |
- |
1 |
6 |
Property Type Total |
107 |
54 |
8 |
4 |
6 |
8 |
1 |
1 |
25 |
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Under $10M |
60 |
31 |
5 |
3 |
5 |
7 |
- |
1 |
8 |
$10M - $30M |
28 |
19 |
2 |
1 |
- |
1 |
- |
- |
5 |
$30M - $50M |
11 |
2 |
1 |
- |
1 |
- |
1 |
- |
6 |
Over $50M |
8 |
2 |
- |
- |
- |
- |
- |
- |
6 |
Transaction Size Total |
107 |
54 |
8 |
4 |
6 |
8 |
1 |
1 |
25 |
(1) 2023 and 2024 sales projections are based on the Company’s latest forecasts and assumptions, but the Company cautions that actual results may differ materially.
(2) Includes both partial and full asset transactions currently being forecasted by Seritage. At January 1, 2023, the Company had an interest in 97 properties. It is currently projected that nine of these properties will be parceled and sold in two or more separate transactions each, which is subject to change, resulting in a total portfolio count of 107 transactions at this time.
Portfolio
The table below represents a summary of the Company’s properties by planned usage as of June 30, 2023:
(in thousands except number of leases and acreage data)
Planned Usage |
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Total |
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Built SF / Acreage (1) |
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Leased SF (1)(2) |
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Avg. Acreage / Site |
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Consolidated |
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Multi-Tenant Retail |
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8 |
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1,299 sf / 130 acres |
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948 |
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16.3 |
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Residential (3) |
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2 |
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33 sf / 19 acres |
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33 |
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9.5 |
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Premier |
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4 |
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228 sf / 69 acres |
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156 |
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17.2 |
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Non-Core (4) |
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24 |
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3,624 sf / 303 acres |
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182 |
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12.6 |
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Unconsolidated |
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Other Entities |
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8 |
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626 sf / 130 acres |
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152 |
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16.2 |
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Residential (3) |
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1 |
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49 sf / 12 acres |
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32 |
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11.7 |
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Premier |
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3 |
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158 sf / 57 acres |
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106 |
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19.0 |
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(1) Square footage is presented at the Company’s proportional share.
(2) Based on signed leases at June 30, 2023.
(3) Square footage represents built ancillary retail space whereas acreage represents both retail and residential acreage.
(4) Represents assets the Company previously designated for sale.
3
Multi-Tenant Retail
During the three months ended June 30, 2023, the Company invested $1.2 million in its multi-tenant retail properties. The remaining capital expenditures in the multi-tenant retail portfolio are primarily comprised of tenant improvements.
The table below provides a summary of all Multi-Tenant Retail signed leases as of June 30, 2023, including unconsolidated entities at the Company’s proportional share:
(in thousands except number of leases and PSF data) |
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Number of |
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Leased |
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% of Total |
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Gross Annual Base |
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% of |
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Gross Annual |
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Tenant |
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Leases |
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GLA |
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Leasable GLA |
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Rent ("ABR") |
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Total ABR |
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Rent PSF ("ABR PSF") |
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In-place retail leases |
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38 |
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784 |
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60.3 |
% |
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$ |
19,126 |
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85.9 |
% |
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$ |
24.40 |
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SNO retail leases (1)(2) |
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8 |
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164 |
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12.7 |
% |
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3,146 |
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14.1 |
% |
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19.18 |
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Total retail leases |
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46 |
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948 |
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73.0 |
% |
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$ |
22,272 |
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100.0 |
% |
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$ |
23.49 |
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(1) SNO = signed not yet opened leases. |
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(2) SNO GLA and rent include one tenant expansion signed in Q2 2023 not counted as a lease. |
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During the three months ended June 30, 2023, the Company signed one new lease and one lease expansion at its retail properties totaling approximately 11 thousand square feet at an average base rent of $30.91 PSF stabilized net. Additionally, the Company generated a leasing pipeline of over 100 thousand square feet. The Company has 784 thousand leased square feet and approximately 164 thousand square feet signed but not opened. Seritage has total occupancy of 73.0% for its multi-tenant retail properties. As of June 30, 2023, there is an additional approximately 351 thousand square feet available for lease.
(in thousands except number of leases and PSF data) |
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Number of |
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Annual |
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SNO Leases |
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GLA |
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ABR |
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Rent PSF |
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As of March 31, 2023 |
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9 |
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159 |
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$ |
3,085 |
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$ |
19.40 |
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Opened |
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(1 |
) |
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(4 |
) |
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(129 |
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32.25 |
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Sold / terminated |
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(1 |
) |
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(2 |
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(150 |
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75.00 |
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Signed |
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1 |
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11 |
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340 |
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30.91 |
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As of June 30, 2023 |
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8 |
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164 |
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$ |
3,146 |
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$ |
19.18 |
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Premier Mixed-Use
The Company has three premier mixed-use projects in the active leasing/tenant opening stage: Aventura, FL, Santa Monica, CA and San Diego, CA. As of June 30, 2023, the Company has 205 thousand in-place leased square feet (109 thousand square feet at share), 163 thousand square feet signed but not opened (153 thousand square feet at share), and 175 thousand square feet available for lease (124 thousand square feet at share).
The table below provides a summary of all signed leases at Premier assets as of June 30, 2023, including unconsolidated entities at the Company’s proportional share:
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Number of |
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Leased |
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% of Total |
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Net Annual |
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% of Total |
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Net Annual |
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Tenant |
Leases |
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GLA |
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Leasable GLA |
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Base Rent |
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Annual Rent |
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Rent PSF |
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In-place retail leases |
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24 |
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47 |
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12.1 |
% |
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$ |
3,070 |
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17.3 |
% |
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$ |
65.32 |
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In-place office leases |
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1 |
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62 |
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16.0 |
% |
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4,220 |
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23.8 |
% |
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68.06 |
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SNO retail leases as of March 31, 2022(1) |
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22 |
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111 |
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8,679 |
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78.19 |
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Opened |
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(4 |
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(4 |
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(381 |
) |
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95.25 |
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SNO retail leases as of June 30, 2023(1) |
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18 |
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107 |
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27.8 |
% |
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8,298 |
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46.9 |
% |
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77.55 |
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SNO office leases as of March 31, 2022(1) |
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3 |
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46 |
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2,109 |
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45.85 |
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Opened |
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— |
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— |
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— |
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— |
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SNO retail leases as of June 30, 2023(1) |
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3 |
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46 |
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11.9 |
% |
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2,109 |
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11.9 |
% |
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45.85 |
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Total diversified leases as of June 30, 2023 |
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46 |
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262 |
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67.8 |
% |
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$ |
17,697 |
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100.0 |
% |
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$ |
67.55 |
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(1) SNO = Signed not yet opened leases |
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(2) In thousands except number of leases and PSF data |
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During the three months ended June 30, 2023, the Company invested $15.4 million in its consolidated premier development and operating properties and an additional $3.0 million into its unconsolidated premier entities.
4
Aventura
During the second quarter of 2023, the Company continued to advance 216 thousand square feet of office and retail leasing at the project in Aventura, FL. The Company is finalizing construction on the asset and opened its first tenants to the public in July and August 2023 representing approximately 26 thousand square feet and will continue with rolling openings going forward.
With occupancy at 66.6%, the Company has 72 thousand square feet available for lease, of which 32 thousand square feet is in lease negotiation and has leasing activity on over an additional 31 thousand square feet. See the “Impairment” section below for a discussion of the impairment the Company recognized for the three months ended June 30, 2023 on its development property in Aventura, FL.
Financial Summary
The table below provides a summary of the Company’s financial results for the three and six months ended June 30, 2023:
(in thousands except per share amounts) |
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Three Months Ended |
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Six Months Ended |
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June 30, 2023 |
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June 30, 2022 |
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June 30, 2023 |
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June 30, 2022 |
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Net loss attributable to Seritage |
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$ |
(96,932 |
) |
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$ |
(111,980 |
) |
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$ |
(160,143 |
) |
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$ |
(165,410 |
) |
Net loss per share attributable to Seritage |
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(1.73 |
) |
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(2.56 |
) |
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(2.85 |
) |
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(3.79 |
) |
Total NOI |
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2,996 |
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|
|
10,602 |
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|
|
6,099 |
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|
21,095 |
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For the quarter ended June 30, 2023:
Total NOI is comprised of:
(in thousands) |
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Three Months Ended June 30, |
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|||||
Consolidated Properties |
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2023 |
|
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2022 |
|
||
Multi-tenant retail |
|
$ |
3,920 |
|
|
$ |
3,936 |
|
Premier |
|
|
(402 |
) |
|
|
(163 |
) |
Residential |
|
|
(57 |
) |
|
|
— |
|
Non-Core |
|
|
(1,331 |
) |
|
|
(1,044 |
) |
Sold |
|
|
(138 |
) |
|
|
5,828 |
|
Total |
|
|
1,992 |
|
|
|
8,557 |
|
Unconsolidated Properties |
|
|
|
|
||||
Residential |
|
|
194 |
|
|
|
84 |
|
Premier |
|
|
306 |
|
|
|
(96 |
) |
Other joint ventures |
|
|
504 |
|
|
|
2,057 |
|
Total |
|
|
1,004 |
|
|
|
2,045 |
|
Total NOI |
|
$ |
2,996 |
|
|
$ |
10,602 |
|
As of June 30, 2023, the Company had cash on hand of $137.8 million, including $12.9 million of restricted cash. The Company expects to use these sources of liquidity, together with a combination of future sales and/or potential debt and capital markets transactions, to pay its financing obligations and fund its operations and development activity. The availability of funding from sales of assets, partnerships and credit or capital markets transactions is subject to various conditions, and there can be no assurance that such transactions will be consummated. For more information on our liquidity position, including our going concern analysis, please see the notes to the consolidated financial statements included in Part I, Item 1 and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each in our Quarterly Report on Form 10-Q.
Impairment
During the quarter ended June 30, 2023, due to increasing development and construction costs and deteriorating market conditions, the Company recognized a $101.5 million impairment on its development property in Aventura, FL. In accordance with GAAP, the impairment was recognized as a result of the carrying value of the asset exceeding the undiscounted cash flows over the estimated holding period. The amount of the impairment is determined by applying a discount to the projected cash flows and writing down the carrying value to the discounted current fair value.
The Company will continue to evaluate its portfolio, including its development plans and holding periods, which may result in additional impairments in future periods.
5
Dividends
On February 15, 2023, the Company’s Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend was paid on April 17, 2023 to holders of record on March 31, 2023.
On April 27, 2023, the Company’s Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend was paid on July 14, 2023 to holders of record on June 30, 2023.
On July 23, 2023, the Company’s Board of Trustees declared a preferred stock dividend of $0.4375 per each Series A Preferred Share. The preferred dividend will be paid on October 13, 2023 to holders of record on September 30, 2023.
The Company’s Board of Trustees does not expect to declare dividends on its common shares until such time as the Term Loan Facility has been repaid in full.
Strategic Review
At the 2022 Annual Meeting of Shareholders on October 24, 2022, Seritage shareholders approved the Company’s Plan of Sale. 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. There can be no assurance regarding the success of the process.
Market Update
As the Company has previously disclosed, the Company, along with the commercial real estate market as a whole, has experienced and continues to experience progressively more challenging market conditions as a result of a variety of factors. These conditions have applied and continue to apply downward pricing pressure on all of our assets. 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. If these challenging market conditions persist, then we expect that they will impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders.
D&O Insurance Litigation
On March 2, 2021, the Company brought a lawsuit in Delaware state court against QBE Insurance Corporation, Endurance American Insurance Company, Allianz Global Risks US Insurance Company and Continental Casualty Company, each of which are D&O insurance providers of the Company (the “D&O Insurers”). The Company’s lawsuit sought, among other things, declaratory relief and money damages as a result of certain of the D&O Insurers refusal to pay certain costs and expenses related to the defense of the Sears Bankruptcy Litigation. During the fourth quarter of 2022, the Company reached settlement agreements with two of the D&O Insurers and received gross proceeds of $12.7 million. During the three months ended March 31, 2023, the Company reached settlement agreements with the other two D&O Insurers for gross proceeds of $11.6 million. The Company received $3.8 million during the three months ended March 31, 2023 and received $7.8 million during the three months ended June 30, 2023, which is recorded in interest and other income in the consolidated statements of operations.
Supplemental Report
A Supplemental Report will be available in the Investors section of the Company’s website, www.seritage.com.
Non-GAAP Financial Measures
The Company makes references to NOI and Total NOI which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI are measures that (i) represent cash flow from operations as defined by GAAP; (ii) are indicative of cash available to fund all cash flow needs, including the ability to make distributions; (iii) are alternatives to cash flow as a measure of liquidity; or (iv) should be considered alternatives to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. Reconciliations of these measures to the respective GAAP measures the Company deems most comparable have been provided in the tables accompanying this press release.
6
Net Operating Income ("NOI”) and Total NOI
NOI is defined as income from property operations less property operating expenses. Other real estate companies may use different methodologies for calculating NOI, and accordingly the Company’s depiction of NOI may not be comparable to other real estate companies. The Company believes NOI provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.
The Company also uses Total NOI, which includes its proportional share of unconsolidated properties. This form of presentation offers insights into the financial performance and condition of the Company as a whole given the Company’s ownership of unconsolidated properties that are accounted for under GAAP using the equity method.
The Company also considers NOI and Total NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that could cause or contribute to such differences include, but are not limited to: declines in retail, real estate and general economic conditions; the impact of the COVID-19 pandemic on the business of the Company’s tenants and business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service the Company’s debt obligations and ability to pay dividends and other distributions to shareholders; risks relating to redevelopment activities; contingencies to the commencement of rent under leases; the terms of the Company’s indebtedness and other legal requirements to which the Company is subject; failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; the impact of ongoing negative operating cash flow on the Company’s ability to fund operations and ongoing development; the Company’s ability to access or obtain sufficient sources of financing to fund the Company’s liquidity needs; the Company’s relatively limited history as an operating company; and environmental, health, safety and land use laws and regulations. For additional discussion of these and other applicable risks, assumptions and uncertainties, see the “Risk Factors” and forward-looking statement disclosure contained in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2022 and any subsequent Form 10-Qs. While the Company believes that its forecasts and assumptions are reasonable, the Company cautions that actual results may differ materially. The Company intends the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
About Seritage Growth Properties
Seritage is principally engaged in the ownership, development, redevelopment, management and leasing of retail and mixed-use properties throughout the United States. As of June 30, 2023, the Company’s portfolio consisted of interests in 50 properties comprised of approximately 6.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area, approximately 157 acres held for or under development and approximately 3.6 million square feet or approximately 303 acres to be disposed of. The portfolio consists of approximately 5.2 million square feet of GLA held by 38 wholly owned properties (such properties, the “Consolidated Properties”) and 1.7 million square feet of GLA held by 12 unconsolidated entities (such properties, the “Unconsolidated Properties”).
Contact
Seritage Growth Properties
(212) 355-7800
IR@Seritage.com
7
Seritage Growth Properties
Consolidated Balance SheetS
(In thousands, except share and per share amounts)
(Unaudited)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Investment in real estate |
|
|
|
|
|
|
||
Land |
|
$ |
134,291 |
|
|
$ |
172,813 |
|
Buildings and improvements |
|
|
356,952 |
|
|
|
463,616 |
|
Accumulated depreciation |
|
|
(43,369 |
) |
|
|
(57,330 |
) |
|
|
|
447,874 |
|
|
|
579,099 |
|
Construction in progress |
|
|
128,931 |
|
|
|
185,324 |
|
Net investment in real estate |
|
|
576,805 |
|
|
|
764,423 |
|
Real estate held for sale |
|
|
98,084 |
|
|
|
455,617 |
|
Investment in unconsolidated entities |
|
|
301,493 |
|
|
|
382,597 |
|
Cash and cash equivalents |
|
|
124,850 |
|
|
|
133,480 |
|
Restricted cash |
|
|
12,904 |
|
|
|
11,459 |
|
Tenant and other receivables, net |
|
|
22,188 |
|
|
|
41,495 |
|
Lease intangible assets, net |
|
|
1,524 |
|
|
|
1,791 |
|
Prepaid expenses, deferred expenses and other assets, net |
|
|
30,119 |
|
|
|
50,859 |
|
Total assets (1) |
|
$ |
1,167,967 |
|
|
$ |
1,841,721 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Term loan facility, net |
|
$ |
549,965 |
|
|
$ |
1,029,754 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
56,320 |
|
|
|
89,368 |
|
Total liabilities (1) |
|
|
606,285 |
|
|
|
1,119,122 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Shareholders' Equity |
|
|
|
|
|
|
||
Class A common shares $0.01 par value; 100,000,000 shares authorized; |
|
|
562 |
|
|
|
561 |
|
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; |
|
|
28 |
|
|
|
28 |
|
Additional paid-in capital |
|
|
1,360,718 |
|
|
|
1,360,411 |
|
Accumulated deficit |
|
|
(800,674 |
) |
|
|
(640,531 |
) |
Total shareholders' equity |
|
|
560,634 |
|
|
|
720,469 |
|
Non-controlling interests |
|
|
1,048 |
|
|
|
2,130 |
|
Total equity |
|
|
561,682 |
|
|
|
722,599 |
|
Total liabilities and equity |
|
$ |
1,167,967 |
|
|
$ |
1,841,721 |
|
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets, as of June 30, 2023, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $3.3 million of land, $2.8 million of building and improvements, $(0.8) million of accumulated depreciation and $2.3 million of other assets included in other line items. The Company's consolidated balance sheets as of December 31, 2022, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $6.6 million of land, $3.9 million of building and improvements, $(1.0) million of accumulated depreciation and $4.0 million of other assets included in other line items. |
|
8
Seritage Growth Properties
Consolidated Statements of OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
5,517 |
|
|
$ |
29,418 |
|
|
$ |
5,935 |
|
|
$ |
58,502 |
|
Management and other fee income |
|
|
367 |
|
|
|
286 |
|
|
|
629 |
|
|
|
2,107 |
|
Total revenue |
|
|
5,884 |
|
|
|
29,704 |
|
|
|
6,564 |
|
|
|
60,609 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating |
|
|
5,196 |
|
|
|
10,801 |
|
|
|
13,381 |
|
|
|
21,833 |
|
Real estate taxes |
|
|
2,170 |
|
|
|
6,425 |
|
|
|
3,707 |
|
|
|
14,575 |
|
Depreciation and amortization |
|
|
4,151 |
|
|
|
10,669 |
|
|
|
8,715 |
|
|
|
22,603 |
|
General and administrative |
|
|
10,099 |
|
|
|
11,093 |
|
|
|
22,319 |
|
|
|
20,185 |
|
Litigation settlement |
|
|
— |
|
|
|
35,000 |
|
|
|
— |
|
|
|
35,000 |
|
Total expenses |
|
|
21,616 |
|
|
|
73,988 |
|
|
|
48,122 |
|
|
|
114,196 |
|
Gain on sale of real estate, net |
|
|
33,488 |
|
|
|
68,031 |
|
|
|
45,880 |
|
|
|
67,016 |
|
Gain on sale of interest in unconsolidated entities |
|
|
7,323 |
|
|
|
— |
|
|
|
7,323 |
|
|
|
— |
|
Impairment of real estate assets |
|
|
(104,467 |
) |
|
|
(109,343 |
) |
|
|
(107,043 |
) |
|
|
(110,334 |
) |
Equity in loss of unconsolidated entities |
|
|
(13,698 |
) |
|
|
(33,720 |
) |
|
|
(50,070 |
) |
|
|
(66,796 |
) |
Interest and other income |
|
|
9,869 |
|
|
|
99 |
|
|
|
15,454 |
|
|
|
110 |
|
Interest expense |
|
|
(12,528 |
) |
|
|
(22,663 |
) |
|
|
(27,730 |
) |
|
|
(45,251 |
) |
Loss before income taxes |
|
|
(95,745 |
) |
|
|
(141,880 |
) |
|
|
(157,744 |
) |
|
|
(208,842 |
) |
Benefit (provision) for income taxes |
|
|
38 |
|
|
|
(203 |
) |
|
|
51 |
|
|
|
(228 |
) |
Net loss |
|
|
(95,707 |
) |
|
|
(142,083 |
) |
|
|
(157,693 |
) |
|
|
(209,070 |
) |
Net loss attributable to non-controlling interests |
|
|
— |
|
|
|
31,328 |
|
|
|
— |
|
|
|
46,110 |
|
Net loss attributable to Seritage |
|
$ |
(95,707 |
) |
|
$ |
(110,755 |
) |
|
$ |
(157,693 |
) |
|
$ |
(162,960 |
) |
Preferred dividends |
|
|
(1,225 |
) |
|
|
(1,225 |
) |
|
|
(2,450 |
) |
|
|
(2,450 |
) |
Net loss attributable to Seritage common shareholders |
|
$ |
(96,932 |
) |
|
$ |
(111,980 |
) |
|
$ |
(160,143 |
) |
|
$ |
(165,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to Seritage Class A |
|
$ |
(1.73 |
) |
|
$ |
(2.56 |
) |
|
$ |
(2.85 |
) |
|
$ |
(3.79 |
) |
Net loss per share attributable to Seritage Class A |
|
$ |
(1.73 |
) |
|
$ |
(2.56 |
) |
|
$ |
(2.85 |
) |
|
$ |
(3.79 |
) |
Weighted average Class A common shares |
|
|
56,173 |
|
|
|
43,677 |
|
|
|
56,116 |
|
|
|
43,656 |
|
Weighted average Class A common shares |
|
|
56,173 |
|
|
|
43,677 |
|
|
|
56,116 |
|
|
|
43,656 |
|
9
Reconciliation of Net Loss to NOI and Total NOI (in thousands)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
NOI and Total NOI |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
|
$ |
(95,707 |
) |
|
$ |
(142,083 |
) |
|
$ |
(157,693 |
) |
|
$ |
(209,070 |
) |
Termination fee income |
|
|
— |
|
|
|
(92 |
) |
|
|
— |
|
|
|
(369 |
) |
Management and other fee income |
|
|
(367 |
) |
|
|
(286 |
) |
|
|
(629 |
) |
|
|
(2,107 |
) |
Depreciation and amortization |
|
|
4,151 |
|
|
|
10,669 |
|
|
|
8,715 |
|
|
|
22,603 |
|
General and administrative expenses |
|
|
10,099 |
|
|
|
11,093 |
|
|
|
22,319 |
|
|
|
20,185 |
|
Litigation settlement |
|
|
— |
|
|
|
35,000 |
|
|
|
— |
|
|
|
35,000 |
|
Equity in loss of unconsolidated entities |
|
|
13,698 |
|
|
|
33,720 |
|
|
|
50,070 |
|
|
|
66,796 |
|
Gain on sale of interest in unconsolidated entities |
|
|
(7,323 |
) |
|
|
— |
|
|
|
(7,323 |
) |
|
|
— |
|
Gain on sale of real estate, net |
|
|
(33,488 |
) |
|
|
(68,031 |
) |
|
|
(45,880 |
) |
|
|
(67,016 |
) |
Impairment of real estate assets |
|
|
104,467 |
|
|
|
109,343 |
|
|
|
107,043 |
|
|
|
110,334 |
|
Interest and other income |
|
|
(9,869 |
) |
|
|
(99 |
) |
|
|
(15,454 |
) |
|
|
(110 |
) |
Interest expense |
|
|
12,528 |
|
|
|
22,663 |
|
|
|
27,730 |
|
|
|
45,251 |
|
(Benefit) provision for income taxes |
|
|
(38 |
) |
|
|
203 |
|
|
|
(51 |
) |
|
|
228 |
|
Straight-line rent |
|
|
3,796 |
|
|
|
(3,599 |
) |
|
|
14,638 |
|
|
|
(4,320 |
) |
Above/below market rental expense |
|
|
45 |
|
|
|
56 |
|
|
|
93 |
|
|
|
121 |
|
NOI |
|
$ |
1,992 |
|
|
$ |
8,557 |
|
|
$ |
3,578 |
|
|
$ |
17,526 |
|
Unconsolidated entities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net operating income of unconsolidated entities |
|
|
1,301 |
|
|
|
2,267 |
|
|
|
2,959 |
|
|
|
4,113 |
|
Straight-line rent |
|
|
(294 |
) |
|
|
(228 |
) |
|
|
(440 |
) |
|
|
(556 |
) |
Above/below market rental expense |
|
|
(3 |
) |
|
|
6 |
|
|
|
2 |
|
|
|
12 |
|
Total NOI |
|
$ |
2,996 |
|
|
$ |
10,602 |
|
|
$ |
6,099 |
|
|
$ |
21,095 |
|
10
Exhibit 99.2
1
Forward-Looking Statements
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “would,” “may” or other similar expressions in the Company’s Annual Report on Form 10-K. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and in any of our subsequent Form 10-Qs. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date hereof. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date hereof. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of the Quarterly Report.
2
Financial Information
3
Summary Information
June 30, 2023
(in thousands, except per share and PSF amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Financial Results |
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss attributable to Seritage |
|
$ |
(96,932 |
) |
|
$ |
(53,430 |
) |
|
$ |
(160,143 |
) |
|
$ |
(104,769 |
) |
Total NOI |
|
$ |
2,996 |
|
|
$ |
10,493 |
|
|
$ |
6,099 |
|
|
$ |
25,061 |
|
Net loss per share attributable to Seritage |
|
$ |
(1.73 |
) |
|
$ |
(1.22 |
) |
|
$ |
(2.85 |
) |
|
$ |
(2.50 |
) |
Wtd. avg. shares - EPS |
|
|
56,173 |
|
|
|
43,634 |
|
|
|
56,116 |
|
|
|
41,976 |
|
Stock trading price range |
|
$7.25 to $8.94 |
|
|
$5.24 to $13.20 |
|
|
$7.25 to $12.70 |
|
|
$5.24 to $14.45 |
|
4
Consolidated Balance Sheets (unaudited)
June 30, 2023
(in thousands, except share and per share amounts)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Investment in real estate |
|
|
|
|
|
|
||
Land |
|
$ |
134,291 |
|
|
$ |
172,813 |
|
Buildings and improvements |
|
|
356,952 |
|
|
|
463,616 |
|
Accumulated depreciation |
|
|
(43,369 |
) |
|
|
(57,330 |
) |
|
|
|
447,874 |
|
|
|
579,099 |
|
Construction in progress |
|
|
128,931 |
|
|
|
185,324 |
|
Net investment in real estate |
|
|
576,805 |
|
|
|
764,423 |
|
Real estate held for sale |
|
|
98,084 |
|
|
|
455,617 |
|
Investment in unconsolidated entities |
|
|
301,493 |
|
|
|
382,597 |
|
Cash and cash equivalents |
|
|
124,850 |
|
|
|
133,480 |
|
Restricted cash |
|
|
12,904 |
|
|
|
11,459 |
|
Tenant and other receivables, net |
|
|
22,188 |
|
|
|
41,495 |
|
Lease intangible assets, net |
|
|
1,524 |
|
|
|
1,791 |
|
Prepaid expenses, deferred expenses and other assets, net |
|
|
30,119 |
|
|
|
50,859 |
|
Total assets (1) |
|
$ |
1,167,967 |
|
|
$ |
1,841,721 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Term loan facility, net |
|
$ |
549,965 |
|
|
$ |
1,029,754 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
56,320 |
|
|
|
89,368 |
|
Total liabilities (1) |
|
|
606,285 |
|
|
|
1,119,122 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Shareholders' Equity |
|
|
|
|
|
|
||
Class A common shares $0.01 par value; 100,000,000 shares authorized; |
|
|
562 |
|
|
|
561 |
|
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; |
|
|
28 |
|
|
|
28 |
|
Additional paid-in capital |
|
|
1,360,718 |
|
|
|
1,360,411 |
|
Accumulated deficit |
|
|
(800,674 |
) |
|
|
(640,531 |
) |
Total shareholders' equity |
|
|
560,634 |
|
|
|
720,469 |
|
Non-controlling interests |
|
|
1,048 |
|
|
|
2,130 |
|
Total equity |
|
|
561,682 |
|
|
|
722,599 |
|
Total liabilities and equity |
|
$ |
1,167,967 |
|
|
$ |
1,841,721 |
|
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets, as of June 30, 2023, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $3.3 million of land, $2.8 million of building and improvements, $(0.8) million of accumulated depreciation and $2.3 million of other assets included in other line items. The Company's consolidated balance sheets as of December 31, 2022, include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $6.6 million of land, $3.9 million of building and improvements, $(1.0) million of accumulated depreciation and $4.0 million of other assets included in other line items. |
|
5
Consolidated Statements of Operations (unaudited)
June 30, 2023
(in thousands, except per share amounts)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
5,517 |
|
|
$ |
29,418 |
|
|
$ |
5,935 |
|
|
$ |
58,502 |
|
Management and other fee income |
|
|
367 |
|
|
|
286 |
|
|
|
629 |
|
|
|
2,107 |
|
Total revenue |
|
|
5,884 |
|
|
|
29,704 |
|
|
|
6,564 |
|
|
|
60,609 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating |
|
|
5,196 |
|
|
|
10,801 |
|
|
|
13,381 |
|
|
|
21,833 |
|
Real estate taxes |
|
|
2,170 |
|
|
|
6,425 |
|
|
|
3,707 |
|
|
|
14,575 |
|
Depreciation and amortization |
|
|
4,151 |
|
|
|
10,669 |
|
|
|
8,715 |
|
|
|
22,603 |
|
General and administrative |
|
|
10,099 |
|
|
|
11,093 |
|
|
|
22,319 |
|
|
|
20,185 |
|
Litigation settlement |
|
|
— |
|
|
|
35,000 |
|
|
|
— |
|
|
|
35,000 |
|
Total expenses |
|
|
21,616 |
|
|
|
73,988 |
|
|
|
48,122 |
|
|
|
114,196 |
|
Gain on sale of real estate, net |
|
|
33,488 |
|
|
|
68,031 |
|
|
|
45,880 |
|
|
|
67,016 |
|
Gain on sale of interest in unconsolidated entities |
|
|
7,323 |
|
|
|
— |
|
|
|
7,323 |
|
|
|
— |
|
Impairment of real estate assets |
|
|
(104,467 |
) |
|
|
(109,343 |
) |
|
|
(107,043 |
) |
|
|
(110,334 |
) |
Equity in loss of unconsolidated entities |
|
|
(13,698 |
) |
|
|
(33,720 |
) |
|
|
(50,070 |
) |
|
|
(66,796 |
) |
Interest and other income |
|
|
9,869 |
|
|
|
99 |
|
|
|
15,454 |
|
|
|
110 |
|
Interest expense |
|
|
(12,528 |
) |
|
|
(22,663 |
) |
|
|
(27,730 |
) |
|
|
(45,251 |
) |
Loss before income taxes |
|
|
(95,745 |
) |
|
|
(141,880 |
) |
|
|
(157,744 |
) |
|
|
(208,842 |
) |
Benefit (provision) for income taxes |
|
|
38 |
|
|
|
(203 |
) |
|
|
51 |
|
|
|
(228 |
) |
Net loss |
|
|
(95,707 |
) |
|
|
(142,083 |
) |
|
|
(157,693 |
) |
|
|
(209,070 |
) |
Net loss attributable to non-controlling interests |
|
|
— |
|
|
|
31,328 |
|
|
|
— |
|
|
|
46,110 |
|
Net loss attributable to Seritage |
|
$ |
(95,707 |
) |
|
$ |
(110,755 |
) |
|
$ |
(157,693 |
) |
|
$ |
(162,960 |
) |
Preferred dividends |
|
|
(1,225 |
) |
|
|
(1,225 |
) |
|
|
(2,450 |
) |
|
|
(2,450 |
) |
Net loss attributable to Seritage common shareholders |
|
$ |
(96,932 |
) |
|
$ |
(111,980 |
) |
|
$ |
(160,143 |
) |
|
$ |
(165,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to Seritage Class A |
|
$ |
(1.73 |
) |
|
$ |
(2.56 |
) |
|
$ |
(2.85 |
) |
|
$ |
(3.79 |
) |
Net loss per share attributable to Seritage Class A |
|
$ |
(1.73 |
) |
|
$ |
(2.56 |
) |
|
$ |
(2.85 |
) |
|
$ |
(3.79 |
) |
Weighted average Class A common shares |
|
|
56,173 |
|
|
|
43,677 |
|
|
|
56,116 |
|
|
|
43,656 |
|
Weighted average Class A common shares |
|
|
56,173 |
|
|
|
43,677 |
|
|
|
56,116 |
|
|
|
43,656 |
|
6
Total Net Operating Income
June 30, 2023
(in thousands)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
NOI and Total NOI |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
|
$ |
(95,707 |
) |
|
$ |
(142,083 |
) |
|
$ |
(157,693 |
) |
|
$ |
(209,070 |
) |
Termination fee income |
|
|
— |
|
|
|
(92 |
) |
|
|
— |
|
|
|
(369 |
) |
Management and other fee income |
|
|
(367 |
) |
|
|
(286 |
) |
|
|
(629 |
) |
|
|
(2,107 |
) |
Depreciation and amortization |
|
|
4,151 |
|
|
|
10,669 |
|
|
|
8,715 |
|
|
|
22,603 |
|
General and administrative expenses |
|
|
10,099 |
|
|
|
11,093 |
|
|
|
22,319 |
|
|
|
20,185 |
|
Litigation settlement |
|
|
— |
|
|
|
35,000 |
|
|
|
— |
|
|
|
35,000 |
|
Equity in loss of unconsolidated entities |
|
|
13,698 |
|
|
|
33,720 |
|
|
|
50,070 |
|
|
|
66,796 |
|
Gain on sale of interest in unconsolidated entities |
|
|
(7,323 |
) |
|
|
— |
|
|
|
(7,323 |
) |
|
|
— |
|
Gain on sale of real estate, net |
|
|
(33,488 |
) |
|
|
(68,031 |
) |
|
|
(45,880 |
) |
|
|
(67,016 |
) |
Impairment of real estate assets |
|
|
104,467 |
|
|
|
109,343 |
|
|
|
107,043 |
|
|
|
110,334 |
|
Interest and other income |
|
|
(9,869 |
) |
|
|
(99 |
) |
|
|
(15,454 |
) |
|
|
(110 |
) |
Interest expense |
|
|
12,528 |
|
|
|
22,663 |
|
|
|
27,730 |
|
|
|
45,251 |
|
(Benefit) provision for income taxes |
|
|
(38 |
) |
|
|
203 |
|
|
|
(51 |
) |
|
|
228 |
|
Straight-line rent |
|
|
3,796 |
|
|
|
(3,599 |
) |
|
|
14,638 |
|
|
|
(4,320 |
) |
Above/below market rental expense |
|
|
45 |
|
|
|
56 |
|
|
|
93 |
|
|
|
121 |
|
NOI |
|
$ |
1,992 |
|
|
$ |
8,557 |
|
|
$ |
3,578 |
|
|
$ |
17,526 |
|
Unconsolidated entities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net operating income of unconsolidated entities |
|
|
1,301 |
|
|
|
2,267 |
|
|
|
2,959 |
|
|
|
4,113 |
|
Straight-line rent |
|
|
(294 |
) |
|
|
(228 |
) |
|
|
(440 |
) |
|
|
(556 |
) |
Above/below market rental expense |
|
|
(3 |
) |
|
|
6 |
|
|
|
2 |
|
|
|
12 |
|
Total NOI |
|
$ |
2,996 |
|
|
$ |
10,602 |
|
|
$ |
6,099 |
|
|
$ |
21,095 |
|
7
Additional Information
June 30, 2023
(in thousands)
|
|
As of |
|
|
As of |
|
||
Debt Summary |
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
Term Loan Facility (drawn / undrawn) |
|
$550,000 / 400,000 |
|
|
$1,030,000 / 400,000 |
|
||
Interest rate / undrawn rate |
|
7.00% / 1.00% |
|
|
7.00% / 1.00% |
|
||
Maturity |
|
July 2025 |
|
|
July 2023 |
|
||
|
|
|
|
|
|
|
||
Prepaid Expenses, Deferred Expenses and Other Assets |
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
Right of Use Asset |
|
$ |
15,722 |
|
|
$ |
16,161 |
|
Other assets |
|
|
5,128 |
|
|
|
5,551 |
|
Deferred expenses |
|
|
4,770 |
|
|
|
17,367 |
|
Prepaid insurance |
|
|
2,847 |
|
|
|
5,492 |
|
Other prepaid expenses |
|
|
1,190 |
|
|
|
4,133 |
|
FF&E |
|
|
825 |
|
|
|
1,129 |
|
Prepaid real estate taxes |
|
|
443 |
|
|
|
1,026 |
|
Total prepaid expenses, deferred expenses and other assets |
|
$ |
30,925 |
|
|
$ |
50,859 |
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
Accrued development expenditures |
|
$ |
21,799 |
|
|
$ |
37,983 |
|
Accounts payable and accrued expenses |
|
|
18,388 |
|
|
|
25,454 |
|
Lease liability |
|
|
5,579 |
|
|
|
5,916 |
|
Accrued real estate taxes |
|
|
4,088 |
|
|
|
8,638 |
|
Prepaid rental income |
|
|
2,439 |
|
|
|
4,977 |
|
Accrued interest |
|
|
1,604 |
|
|
|
3,286 |
|
Below-market leases |
|
|
1,361 |
|
|
|
1,560 |
|
Common and preferred dividends and OP |
|
|
1,062 |
|
|
|
1,554 |
|
Total accounts payable, accrued expenses and |
|
$ |
56,320 |
|
|
$ |
89,368 |
|
8
Additional Information (cont’d)
June 30, 2023
(in thousands, except per share amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Rental Revenue Detail |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
5,506 |
|
|
$ |
24,016 |
|
|
|
4,730 |
|
|
|
47,994 |
|
Tenant reimbursements |
|
|
11 |
|
|
|
5,310 |
|
|
|
1,205 |
|
|
|
10,138 |
|
Termination income |
|
|
- |
|
|
|
92 |
|
|
|
- |
|
|
|
370 |
|
Total |
|
$ |
5,517 |
|
|
$ |
29,418 |
|
|
$ |
5,935 |
|
|
$ |
58,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Select Non-Cash Items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Straight-line rental income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Wholly-owned |
|
$ |
(3,796 |
) |
|
$ |
3,599 |
|
|
$ |
(14,638 |
) |
|
$ |
4,320 |
|
Joint ventures |
|
|
294 |
|
|
|
228 |
|
|
|
440 |
|
|
|
556 |
|
Total |
|
$ |
(3,502 |
) |
|
$ |
3,827 |
|
|
$ |
(14,198 |
) |
|
$ |
4,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net amortization of above/below market |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Wholly-owned |
|
$ |
(45 |
) |
|
$ |
(56 |
) |
|
$ |
(93 |
) |
|
$ |
(121 |
) |
Joint ventures |
|
|
3 |
|
|
|
(6 |
) |
|
|
(2 |
) |
|
|
(12 |
) |
Total |
|
$ |
(42 |
) |
|
$ |
(62 |
) |
|
$ |
(95 |
) |
|
$ |
(133 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of deferred financing costs |
|
$ |
(106 |
) |
|
$ |
(106 |
) |
|
$ |
(211 |
) |
|
$ |
(211 |
) |
Share-based compensation expense |
|
|
(653 |
) |
|
|
467 |
|
|
|
(1,427 |
) |
|
|
892 |
|
9
SNO Lease Summary
Multi-Tenant Retail
The table below provides a summary of all multi-tenant Retail signed leases as of June 30, 2023, including unconsolidated entities at the Company’s proportional share:
(in thousands except number of leases and PSF data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Number of |
|
|
Leased |
|
|
% of Total |
|
|
Gross Annual Base |
|
|
% of |
|
|
Gross Annual |
|
||||||
Tenant |
|
Leases |
|
|
GLA |
|
|
Leasable GLA |
|
|
Rent ("ABR") |
|
|
Total ABR |
|
|
Rent PSF ("ABR PSF") |
|
||||||
In-place retail leases |
|
|
38 |
|
|
|
784 |
|
|
|
60.3 |
% |
|
$ |
19,126 |
|
|
|
85.9 |
% |
|
$ |
24.40 |
|
SNO retail leases (1)(2) |
|
|
8 |
|
|
|
164 |
|
|
|
12.7 |
% |
|
|
3,146 |
|
|
|
14.1 |
% |
|
|
19.18 |
|
Total retail leases |
|
|
46 |
|
|
|
948 |
|
|
|
73.0 |
% |
|
$ |
22,272 |
|
|
|
100.0 |
% |
|
$ |
23.49 |
|
(1) SNO = signed not yet opened leases. |
|
|||||||||||||||||||||||
(2) SNO GLA and rent include one tenant expansion signed in Q2 2023 not counted as a lease. |
|
(in thousands except number of leases and PSF data) |
|
Number of |
|
|
|
|
|
|
|
|
Annual |
|
|
||||
|
|
SNO Leases |
|
|
GLA |
|
|
ABR |
|
|
Rent PSF |
|
|
||||
As of March 31, 2023 |
|
|
9 |
|
|
|
159 |
|
|
$ |
3,085 |
|
|
$ |
19.40 |
|
|
Opened |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(129 |
) |
|
|
32.25 |
|
|
Sold / terminated |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(150 |
) |
|
|
75.00 |
|
|
Signed |
|
|
1 |
|
|
|
11 |
|
|
|
340 |
|
|
|
30.91 |
|
|
As of June 30, 2023 |
|
|
8 |
|
|
|
164 |
|
|
$ |
3,146 |
|
|
$ |
19.18 |
|
|
Premier Mixed-Use
The table below provides a summary of all signed leases at Premier assets as of June 30, 2023, including unconsolidated entities at the Company’s proportional share:
|
Number of |
|
|
Leased |
|
|
% of Total |
|
|
Net Annual |
|
|
% of Total |
|
|
Net Annual |
|
||||||
Tenant |
Leases |
|
|
GLA |
|
|
Leasable GLA |
|
|
Base Rent |
|
|
Annual Rent |
|
|
Rent PSF |
|
||||||
In-place retail leases |
|
24 |
|
|
|
47 |
|
|
|
12.1 |
% |
|
$ |
3,070 |
|
|
|
17.3 |
% |
|
$ |
65.32 |
|
In-place office leases |
|
1 |
|
|
|
62 |
|
|
|
16.0 |
% |
|
|
4,220 |
|
|
|
23.8 |
% |
|
|
68.06 |
|
SNO retail leases as of March 31, 2022(1) |
|
22 |
|
|
|
111 |
|
|
|
|
|
|
8,679 |
|
|
|
|
|
|
78.19 |
|
||
Opened |
|
(4 |
) |
|
|
(4 |
) |
|
|
|
|
|
(381 |
) |
|
|
|
|
|
95.25 |
|
||
SNO retail leases as of June 30, 2023(1) |
|
18 |
|
|
|
107 |
|
|
|
27.8 |
% |
|
|
8,298 |
|
|
|
46.9 |
% |
|
|
77.55 |
|
SNO office leases as of March 31, 2022(1) |
|
3 |
|
|
|
46 |
|
|
|
|
|
|
2,109 |
|
|
|
|
|
|
45.85 |
|
||
Opened |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
SNO retail leases as of June 30, 2023(1) |
|
3 |
|
|
|
46 |
|
|
|
11.9 |
% |
|
|
2,109 |
|
|
|
11.9 |
% |
|
|
45.85 |
|
Total diversified leases as of June 30, 2023 |
|
46 |
|
|
|
262 |
|
|
|
67.8 |
% |
|
$ |
17,697 |
|
|
|
100.0 |
% |
|
$ |
67.55 |
|
(1) SNO = Signed not yet opened leases |
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(2) In thousands except number of leases and PSF data |
|
|
|
|
|
|
|
|
|
|
10
Top Tenants
June 30, 2023
(rent in thousands)
The following table lists the top tenants in the portfolio as of June 30, 2023, based on signed leases and including Unconsolidated Properties presented at the Company’s proportional share:
|
Number of |
|
|
Total |
|
% of Total |
|
||
Tenant |
Leases |
SF |
|
Rent |
|
Rent |
Concepts / Brands |
||
Amazon |
2 |
|
99,193 |
|
|
5,435 |
|
11.1% |
|
Dick's Sporting Goods |
4 |
|
232,038 |
|
|
4,889 |
|
10.0% |
|
Nordstrom Rack |
3 |
|
116,868 |
|
|
2,578 |
|
5.3% |
|
Dave & Buster's |
3 |
|
83,805 |
|
|
2,365 |
|
4.8% |
|
Round One Entertainment |
2 |
|
96,922 |
|
|
2,205 |
|
4.5% |
|
Mixtura |
1 |
|
22,038 |
|
|
1,820 |
|
3.7% |
|
Cinemark |
2 |
|
59,470 |
|
|
1,750 |
|
3.6% |
|
Primark |
1 |
|
65,747 |
|
|
1,644 |
|
3.4% |
|
Pinstripes |
1 |
|
26,515 |
|
|
1,482 |
|
3.0% |
|
Whole Foods |
2 |
|
71,235 |
|
|
1,258 |
|
2.6% |
|
CCRM |
1 |
|
18,179 |
|
|
1,000 |
|
2.0% |
|
Industrious |
1 |
|
26,501 |
|
|
999 |
|
2.0% |
|
GameTime |
1 |
|
49,811 |
|
|
996 |
|
2.0% |
|
BJ's Wholesale Club |
1 |
|
52,516 |
|
|
840 |
|
1.7% |
|
TJX |
2 |
|
41,926 |
|
|
839 |
|
1.7% |
HomeGoods, Sierra Trading Post |
Grupo Carolo |
1 |
|
7,742 |
|
|
774 |
|
1.6% |
|
Darden |
3 |
|
23,818 |
|
|
762 |
|
1.6% |
Longhorn Steakhouse, Yardhouse, Bahama Breeze |
Joey |
1 |
|
8,150 |
|
|
734 |
|
1.5% |
|
Ulta Salon |
2 |
|
21,498 |
|
|
686 |
|
1.4% |
|
Aldi |
2 |
|
49,000 |
|
|
615 |
|
1.3% |
|
Total |
36 |
|
1,172,972 |
|
|
33,670 |
|
68.7% |
|
11
Multi-tenant Retail
Consolidated Properties
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
Land |
|
|
|
||||
Property Address |
|
City |
|
State |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
|
Significant Tenants (1) |
||||
40710 Winchester Road |
|
Temecula |
|
CA |
|
|
126,500 |
|
|
|
112,800 |
|
|
|
13,800 |
|
|
100.0% |
|
|
10 |
|
|
Round One Entertainment, Dick's Sporting Goods, Texas Roadhouse |
145 West Hillcrest Drive |
|
Thousand Oaks |
|
CA |
|
|
172,000 |
|
|
|
102,600 |
|
|
|
- |
|
|
59.7% |
|
|
11 |
|
|
Dave & Busters, DSW, Nordstrom Rack |
2300 Tyrone Boulevard North |
|
St. Petersburg |
|
FL |
|
|
125,700 |
|
|
|
97,700 |
|
|
|
28,000 |
|
|
100.0% |
|
|
13 |
|
|
Dick's Sporting Goods, Five Below, PetSmart, Verizon |
200 Grossman Drive |
|
Braintree |
|
MA |
|
|
85,100 |
|
|
|
47,600 |
|
|
|
37,500 |
|
|
100.0% |
|
|
34 |
|
|
Nordstrom Rack, Ulta Beauty |
1640 Route 22 |
|
Watchung |
|
NJ |
|
|
124,900 |
|
|
|
121,400 |
|
|
|
3,600 |
|
|
100.0% |
|
|
12 |
|
|
Cinemark, HomeGoods, Sierra Trading Post, Ulta Beauty, Chick-fil-A , City MD, Starbucks |
160 North Gulph Road |
|
King of Prussia (2) |
|
PA |
|
|
208,700 |
|
|
|
166,400 |
|
|
|
- |
|
|
79.7% |
|
|
14 |
|
|
Dick's Sporting Goods, Primark,Yardhouse |
27001 U.S. 19 North |
|
Clearwater |
|
FL |
|
|
212,900 |
|
|
|
75,500 |
|
|
|
- |
|
|
35.5% |
|
|
14 |
|
|
Whole Foods, Nordstrom Rack |
1425 Central Avenue |
|
Albany |
|
NY |
|
|
242,800 |
|
|
|
59,600 |
|
|
|
81,500 |
|
|
58.1% |
|
|
21 |
|
|
Whole Foods, Ethan Allen |
Total |
|
|
|
|
|
|
1,298,600 |
|
|
|
783,600 |
|
|
|
164,400 |
|
|
73.0% |
|
|
130 |
|
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
(2) Property is subject to a ground lease
12
Residential
Consolidated Properties
|
|
|
|
|
|
Land |
|
|
% of Auxiliary |
|
Auxiliary |
|
|
|
||
Property Address |
|
City |
|
State |
|
Acres |
|
|
Leased SF (1) |
|
Leased SF (1) |
|
|
Significant Tenants (1) |
||
5261 Arlington Avenue |
|
Riverside - Resi |
|
CA |
|
|
14 |
|
|
0% |
|
|
- |
|
|
n/a |
5261 Arlington Avenue |
|
Riverside - Retail (2) |
|
CA |
|
|
5 |
|
|
100% |
|
|
33,200 |
|
|
Bank of America, Aldi |
Total |
|
|
|
|
|
|
19 |
|
|
100% |
|
|
33,200 |
|
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
(2) Riverside Retail doesn’t include residential but includes retail leasing that is 100% SRG owned and complementary to the Residential developments at the sites.
Joint Ventures
Brookfield Retail Partners (formerly GGP, Inc.) Joint Venture Properties |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
Land |
|
|
% of Auxiliary |
|
Auxiliary |
|
|
|
||
Mall Name |
|
City |
|
State |
|
Joint Venture |
|
Acres |
|
|
Leased SF |
|
SF (1) |
|
|
Significant Tenants (1) |
||
Alderwood |
|
Lynnwood (2) |
|
WA |
|
GGP I JV |
|
|
12 |
|
|
65.5% |
|
|
31,900 |
|
|
Dave & Busters, Cheesecake Factory, Shake Shack |
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
(2) Indicates assets that have been sold subsequent to June 30, 2023
13
Premier Mixed-Use Properties
Consolidated Properties
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
|
Land |
|
|
||||
Property Address |
|
City |
|
State |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
|
Acres |
|
Significant Tenants (1) |
||||
19505 Biscayne Boulevard |
|
Aventura |
|
FL |
|
|
216,100 |
|
|
|
- |
|
|
|
143,900 |
|
|
|
66.6 |
% |
|
13 |
|
CCRM, Industrious, One Medical |
5900 Glades Road |
|
Boca Raton |
|
FL |
|
|
4,200 |
|
|
|
4,200 |
|
|
|
- |
|
|
|
100.0 |
% |
|
19 |
|
n/a |
13131 Preston Road |
|
Dallas |
|
TX |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.0 |
% |
|
23 |
|
n/a |
2200 148th Avenue Northeast |
|
Redmond |
|
WA |
|
|
7,500 |
|
|
|
7,500 |
|
|
|
- |
|
|
|
100.0 |
% |
|
15 |
|
n/a |
Total |
|
|
|
|
|
|
227,800 |
|
|
|
11,700 |
|
|
|
143,900 |
|
|
|
68.3 |
% |
|
70 |
|
|
Joint Ventures
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
Land |
|
|
|||
Property Address |
|
City |
|
State |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
Significant Tenants (1) |
|||
302 Colorado Ave |
|
Santa Monica |
|
CA |
|
|
51,500 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
3 |
|
n/a |
4575 La Jolla Village Dr |
|
San Diego |
|
CA |
|
|
106,200 |
|
|
|
92,800 |
|
|
|
13,400 |
|
|
100.0% |
|
13 |
|
Amazon, Williams-Sonoma, One Medical, Rejuvenation |
5901 Duke St |
|
Alexandria |
|
VA |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
41 |
|
n/a |
Total |
|
|
|
|
|
|
157,700 |
|
|
|
92,800 |
|
|
|
13,400 |
|
|
67.3% |
|
57 |
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
14
Other Unconsolidated Entities
Other Joint Ventures
Brookfield Retail Partners (formerly GGP, Inc.) Joint Venture Properties |
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
Total |
|
|
In-Place |
|
|
SNO |
|
|
|
|
Land |
|
|
|||
Mall Name |
|
City |
|
State |
|
Joint Venture |
|
SF (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
Significant Tenants (1) |
|||
Altamonte Mall |
|
Altamonte Springs |
|
FL |
|
GGP II JV |
|
|
93,500 |
|
|
|
4,700 |
|
|
|
- |
|
|
5.0% |
|
17 |
|
n/a |
Coastland Center |
|
Naples (2) |
|
FL |
|
GGP II JV |
|
|
36,300 |
|
|
|
28,300 |
|
|
|
8,000 |
|
|
100.0% |
|
12 |
|
CMX Cinebistro, Uncle Julio’s |
Willowbrook Mall |
|
Wayne (3) |
|
NJ |
|
GGP II JV |
|
|
132,700 |
|
|
|
105,200 |
|
|
|
- |
|
|
79.3% |
|
41 |
|
Cinemark, Dave & Busters, Yardhouse, BJ's Wholesale |
Stonebriar Centre |
|
Frisco |
|
TX |
|
GCP I JV |
|
|
87,500 |
|
|
|
6,000 |
|
|
|
- |
|
|
6.9% |
|
11 |
|
n/a |
Total |
|
|
|
|
|
|
|
|
350,000 |
|
|
|
144,200 |
|
|
|
8,000 |
|
|
43.5% |
|
81 |
|
|
Simon Joint Venture Properties |
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
Land |
|
|
|||
Mall Name |
|
City |
|
State |
|
Joint Venture |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
Significant Tenants (1) |
|||
Santa Rosa Plaza |
|
Santa Rosa |
|
CA |
|
Simon JV |
|
|
82,700 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
7 |
|
n/a |
The Shops at Nanuet |
|
Nanuet |
|
NY |
|
Simon JV |
|
|
110,700 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
14 |
|
n/a |
Barton Creek Square |
|
Austin |
|
TX |
|
Simon JV |
|
|
82,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
16 |
|
n/a |
Total |
|
|
|
|
|
|
|
|
275,700 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
Land |
|
|
|||
Property Address |
|
City |
|
State |
|
Joint Venture |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
Significant Tenants (1) |
|||
12625 North Interstate Highway 35 |
|
Austin |
|
TX |
|
RD Development JV |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
11 |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
(2) Indicates assets that have been sold subsequent to June 30, 2023
(3) Indicates assets that are put right eligible as of August 11, 2023
15
Non-core Properties
Consolidated Properties
|
|
|
|
|
|
Total |
|
|
Leased |
|
|
SNO |
|
|
|
|
Land |
|
|
|
||||
Property Address |
|
City |
|
State |
|
GLA (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Acres |
|
|
Significant Tenants (1) |
||||
3930 McCain Boulevard |
|
North Little Rock |
|
AR |
|
|
177,300 |
|
|
|
13,000 |
|
|
|
- |
|
|
7.3% |
|
|
15 |
|
|
Aspen Dental, Longhorn Steakhouse |
3150 South 4th Avenue |
|
Yuma |
|
AZ |
|
|
90,100 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
15 |
|
|
n/a |
1011 West Olive Avenue |
|
Merced |
|
CA |
|
|
5,300 |
|
|
|
5,300 |
|
|
|
- |
|
|
100.0% |
|
|
9 |
|
|
Chilis |
1625 Northwest 107th Avenue |
|
Doral |
|
FL |
|
|
195,600 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
13 |
|
|
n/a |
733 North Highway 231 |
|
Panama City |
|
FL |
|
|
134,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
15 |
|
|
n/a |
7171 North Davis Highway |
|
Pensacola |
|
FL |
|
|
7,900 |
|
|
|
7,900 |
|
|
|
- |
|
|
100.0% |
|
|
14 |
|
|
Bubba's 33 |
4600 1st Avenue Northeast |
|
Cedar Rapids |
|
IA |
|
|
146,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
12 |
|
|
n/a |
4000 Meadows Lane |
|
Las Vegas |
|
NV |
|
|
132,600 |
|
|
|
42,500 |
|
|
|
- |
|
|
32.1% |
|
|
11 |
|
|
Round One Entertainment |
5400 Meadowood Mall Circle |
|
Reno |
|
NV |
|
|
18,000 |
|
|
|
18,000 |
|
|
|
- |
|
|
100.0% |
|
|
3 |
|
|
4 Wheel Parts |
4000 North Shepherd |
|
Houston |
|
TX |
|
|
201,600 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
12 |
|
|
n/a |
8000 West Broward Boulevard |
|
Plantation |
|
FL |
|
|
204,100 |
|
|
|
- |
|
|
|
49,800 |
|
|
24.4% |
|
|
18 |
|
|
GameTime |
1180 Southeast 82nd Avenue |
|
Happy Valley |
|
OR |
|
|
139,800 |
|
|
|
45,000 |
|
|
|
- |
|
|
32.2% |
|
|
12 |
|
|
Dick's Sporting Goods |
6515 East Southern Avenue |
|
Mesa |
|
AZ |
|
|
136,000 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
5 |
|
|
n/a |
7611 West Thomas Road |
|
Phoenix |
|
AZ |
|
|
144,500 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
5 |
|
|
n/a |
6950 West 130th Street |
|
Middleburg Heights (2) |
|
OH |
|
|
369,500 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
19 |
|
|
n/a |
7875 Johnnycake Ridge Road |
|
Mentor |
|
OH |
|
|
215,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
20 |
|
|
n/a |
100 Inland Center |
|
San Bernardino |
|
CA |
|
|
264,700 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
20 |
|
|
n/a |
850 Hartford Turnpike |
|
Waterford |
|
CT |
|
|
149,200 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
11 |
|
|
n/a |
4125 Cleveland Avenue |
|
Ft. Myers |
|
FL |
|
|
146,800 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
12 |
|
|
n/a |
3800 US Highway 98 North |
|
Lakeland |
|
FL |
|
|
156,200 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
12 |
|
|
n/a |
14250 Buck Hill Road |
|
Burnsville |
|
MN |
|
|
167,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
15 |
|
|
n/a |
3001 White Bear Avenue North |
|
Maplewood |
|
MN |
|
|
175,000 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
14 |
|
|
n/a |
7780 W Arrowhead Towne Center |
|
Glendale |
|
AZ |
|
|
125,000 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
15 |
|
|
n/a |
3207 Solomons Island Road |
|
Edgewater |
|
MD |
|
|
122,000 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
|
14 |
|
|
n/a |
Total |
|
|
|
|
|
|
3,624,400 |
|
|
|
131,700 |
|
|
|
49,800 |
|
|
5.0% |
|
|
311 |
|
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
(2) Indicates assets with a partial sale subsequent to June 30, 2023
16
Sold Properties through June 30, 2023
|
|
|
|
|
|
|
|
Total |
|
|
In-Place |
|
|
SNO |
|
|
|
|
2023 Qtr |
|
|||
Property Address |
|
City |
|
State |
|
Full / Partial Sale |
|
SF (1) |
|
|
SF (1) |
|
|
SF (1) |
|
|
Leased (1) |
|
Sold |
|
|||
2 Orland Square Drive |
|
Orland Park |
|
IL |
|
Full Site |
|
|
202,800 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q1 |
|
4000 Jericho Turnpike |
|
East Northport |
|
NY |
|
Full Site |
|
|
179,800 |
|
|
|
167,600 |
|
|
|
- |
|
|
93.2% |
|
Q1 |
|
12025 North 32nd Street |
|
Phoenix |
|
AZ |
|
Full Site |
|
|
151,200 |
|
|
|
151,200 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
2860 South Highland Avenue |
|
Lombard |
|
IL |
|
Full Site |
|
|
139,300 |
|
|
|
139,300 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
7503 West Cermak Road |
|
North Riverside |
|
IL |
|
Full Site |
|
|
214,700 |
|
|
|
163,900 |
|
|
|
19,700 |
|
|
85.5% |
|
Q1 |
|
2500 Wabash Avenue |
|
Springfield |
|
IL |
|
Full Site |
|
|
119,400 |
|
|
|
108,000 |
|
|
|
11,400 |
|
|
100.0% |
|
Q1 |
|
4201 Coldwater Road |
|
Ft. Wayne |
|
IN |
|
Full Site |
|
|
84,100 |
|
|
|
76,700 |
|
|
|
6,200 |
|
|
98.6% |
|
Q1 |
|
101 West Lincoln Highway |
|
Merrillville |
|
IN |
|
Full Site |
|
|
171,300 |
|
|
|
163,000 |
|
|
|
1,600 |
|
|
96.1% |
|
Q1 |
|
4700 2nd Avenue |
|
Kearney |
|
NE |
|
Full Site |
|
|
64,900 |
|
|
|
64,900 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
4100 Belden Village Avenue Northwest |
|
Canton |
|
OH |
|
Full Site |
|
|
192,300 |
|
|
|
128,300 |
|
|
|
10,000 |
|
|
71.9% |
|
Q1 |
|
4570 Poplar Avenue |
|
Memphis |
|
TN |
|
Full Site |
|
|
116,000 |
|
|
|
101,200 |
|
|
|
8,800 |
|
|
94.8% |
|
Q1 |
|
12625 North Interstate Highway 35 |
|
Austin |
|
TX |
|
Full Site |
|
|
52,700 |
|
|
|
45,000 |
|
|
|
- |
|
|
85.4% |
|
Q1 |
|
9484 Dyer Street |
|
El Paso |
|
TX |
|
Full Site |
|
|
107,800 |
|
|
|
99,100 |
|
|
|
- |
|
|
91.9% |
|
Q1 |
|
12605 North Gessner Road |
|
Houston |
|
TX |
|
Full Site |
|
|
134,000 |
|
|
|
134,000 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
201 Central Park Mall |
|
San Antonio |
|
TX |
|
Full Site |
|
|
164,600 |
|
|
|
158,200 |
|
|
|
- |
|
|
96.1% |
|
Q1 |
|
5200 South 76th Street |
|
Greendale |
|
WI |
|
Full Site |
|
|
217,600 |
|
|
|
133,700 |
|
|
|
- |
|
|
61.4% |
|
Q1 |
|
53 West Towne Mall |
|
Madison |
|
WI |
|
Full Site |
|
|
110,600 |
|
|
|
110,600 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
2501 Irving Mall |
|
Irving |
|
TX |
|
Partial Site |
|
|
94,865 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q1 |
|
2010 North Main Street |
|
Layton |
|
UT |
|
Full Site |
|
|
82,700 |
|
|
|
67,500 |
|
|
|
- |
|
|
81.6% |
|
Q1 |
|
7801 Rivers Avenue |
|
Charleston |
|
SC |
|
Full Site |
|
|
106,200 |
|
|
|
52,900 |
|
|
|
- |
|
|
49.8% |
|
Q1 |
|
1209 Plaza Drive |
|
West Covina - Retail |
|
CA |
|
Full Site |
|
|
11,000 |
|
|
|
11,000 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
1209 Plaza Drive |
|
West Covina - Resi |
|
CA |
|
Full Site |
|
|
11,000 |
|
|
|
11,000 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
2501 Irving Mall |
|
Irving |
|
TX |
|
Partial Site |
|
|
4,992 |
|
|
|
4,992 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
2501 Irving Mall |
|
Irving |
|
TX |
|
Partial Site |
|
|
7,500 |
|
|
|
7,500 |
|
|
|
- |
|
|
100.0% |
|
Q1 |
|
3636 North Blackstone Avenue |
|
Fresno |
|
CA |
|
Full Site |
|
|
201,800 |
|
|
|
43,400 |
|
|
|
- |
|
|
21.5% |
|
Q1 |
|
6301 Northwest Loop 410 |
|
Ingram |
|
TX |
|
Full Site |
|
|
169,900 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q1 |
|
600 Lee Boulevard |
|
Yorktown Heights |
|
NY |
|
Full Site |
|
|
153,200 |
|
|
|
38,500 |
|
|
|
- |
|
|
25.1% |
|
Q1 |
|
575 Fletcher Parkway |
|
El Cajon |
|
CA |
|
Full Site |
|
|
227,300 |
|
|
|
184,400 |
|
|
|
- |
|
|
81.1% |
|
Q2 |
|
3111 East Colonial Drive |
|
Orlando |
|
FL |
|
Full Site |
|
|
107,600 |
|
|
|
94,300 |
|
|
|
2,300 |
|
|
89.8% |
|
Q2 |
|
1500 South Willow Street |
|
Manchester |
|
NH |
|
Full Site |
|
|
105,700 |
|
|
|
80,400 |
|
|
|
- |
|
|
76.1% |
|
Q2 |
|
12000 Fair Oaks Mall |
|
Fairfax |
|
VA |
|
Full Site |
|
|
212,700 |
|
|
|
154,400 |
|
|
|
- |
|
|
72.6% |
|
Q2 |
|
141 West Lee Highway |
|
Warrenton |
|
VA |
|
Full Site |
|
|
71,500 |
|
|
|
62,400 |
|
|
|
- |
|
|
87.3% |
|
Q2 |
|
195 North Broadway |
|
Hicksville |
|
NY |
|
Full Site |
|
|
7,600 |
|
|
|
7,600 |
|
|
|
- |
|
|
100.0% |
|
Q2 |
|
3751 South Dogwood Road |
|
El Centro |
|
CA |
|
Full Site |
|
|
9,700 |
|
|
|
9,700 |
|
|
|
- |
|
|
100.0% |
|
Q2 |
|
1400 East 104th Avenue |
|
Thornton |
|
CO |
|
Full Site |
|
|
193,700 |
|
|
|
61,700 |
|
|
|
- |
|
|
31.9% |
|
Q2 |
|
5050 South Kedzie Avenue |
|
Chicago |
|
IL |
|
Full Site |
|
|
175,900 |
|
|
|
17,200 |
|
|
|
- |
|
|
9.8% |
|
Q2 |
|
3231 Chicago Road |
|
Steger |
|
IL |
|
Full Site |
|
|
101,700 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
317 Greece Ridge Center Drive |
|
Rochester |
|
NY |
|
Full Site |
|
|
139,600 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
2700 Miamisburg Centerville Road |
|
Dayton |
|
OH |
|
Full Site |
|
|
13,400 |
|
|
|
13,400 |
|
|
|
- |
|
|
100.0% |
|
Q2 |
|
4400 South Western Avenue |
|
Oklahoma City |
|
OK |
|
Full Site |
|
|
147,500 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
1675 West 49th Street |
|
Hialeah |
|
FL |
|
Full Site |
|
|
153,200 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
15700 Emerald Way |
|
Bowie |
|
MD |
|
Full Site |
|
|
126,400 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
425 Rice Street |
|
St. Paul |
|
MN |
|
Full Site |
|
|
201,900 |
|
|
|
100 |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
2800 North Germantown Parkway |
|
Cordova |
|
TN |
|
Full Site |
|
|
160,600 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
3177 Chandler Village Dr |
|
Chandler |
|
AZ |
|
Full Site |
|
|
70,300 |
|
|
|
5,000 |
|
|
|
- |
|
|
7.1% |
|
Q2 |
|
100 Los Cerritos Mall |
|
Cerritos |
|
CA |
|
Full Site |
|
|
138,800 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
7 Backus Ave (Ex 3 Rt 84) |
|
Danbury |
|
CT |
|
Full Site |
|
|
88,000 |
|
|
|
24,700 |
|
|
|
63,300 |
|
|
100.0% |
|
Q2 |
|
3710 US Hwy 9 site 1100 |
|
Freehold |
|
NJ |
|
Full Site |
|
|
68,800 |
|
|
|
32,700 |
|
|
|
- |
|
|
47.5% |
|
Q2 |
|
9800 SW Washington Square Rd |
|
Portland |
|
OR |
|
Full Site |
|
|
114,300 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
1011 West Olive Avenue |
|
Merced |
|
CA |
|
Partial Site |
|
|
87,400 |
|
|
|
- |
|
|
|
- |
|
|
0.0% |
|
Q2 |
|
Total |
|
|
|
|
|
|
|
|
5,989,857 |
|
|
|
2,929,492 |
|
|
|
123,300 |
|
|
51.0% |
|
|
|
(1) Based on signed leases as of June 30, 2023; GLA presented at the Company’s proportional share
17
REA Status by Sites and Category
|
|
No / Expired REA |
|
|
Expires in <5 years |
|
|
Expires in >5 years |
|
|
Total |
|
||||
Multi-Tenant Retail |
|
|
2 |
|
|
|
- |
|
|
|
6 |
|
|
|
8 |
|
Premier Mixed-use |
|
|
5 |
|
|
|
1 |
|
|
|
1 |
|
|
|
7 |
|
Residential |
|
|
3 |
|
|
|
- |
|
|
|
- |
|
|
|
3 |
|
Other Unconsolidated Entities |
|
|
- |
|
|
|
- |
|
|
|
8 |
|
|
|
8 |
|
Non-Core Properties |
|
|
8 |
|
|
|
1 |
|
|
|
15 |
|
|
|
24 |
|
Total |
|
|
18 |
|
|
|
2 |
|
|
|
30 |
|
|
|
50 |
|
% of Total |
|
|
36 |
% |
|
|
4 |
% |
|
|
60 |
% |
|
|
100 |
% |
18
Non-GAAP Financial Measures
The Company makes reference to NOI and Total NOI which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI are measures that (i) represent cash flow from operations as defined by GAAP; (ii) are indicative of cash available to fund all cash flow needs, including the ability to make distributions; (iii) are alternatives to cash flow as a measure of liquidity; or (iv) should be considered alternatives to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. Reconciliations of these measures to the respective GAAP measures the Company deems most comparable have been provided in the tables accompanying this press release.
Net Operating Income (“NOI”) and Total NOI
NOI is defined as income from property operations less property operating expenses. Other real estate companies may use different methodologies for calculating NOI, and accordingly the Company’s depiction of NOI may not be comparable to other real estate companies. The Company believes NOI provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.
The Company also uses Total NOI, which includes its proportional share of unconsolidated properties. This form of presentation offers insights into the financial performance and condition of the Company as a whole given the Company’s ownership of unconsolidated properties that are accounted for under GAAP using the equity method.
The Company also considers NOI and Total NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.
19
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