10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number 001-37420

SERITAGE GROWTH PROPERTIES

(Exact name of registrant as specified in its charter)

Maryland	38-3976287
(State of Incorporation)	(I.R.S. Employer Identification No.)

500 Fifth Avenue, Suite 1530, New York, New York	10110
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 355-7800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Class A common shares of beneficial interest, par value $0.01 per share	SRG	New York Stock Exchange
7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share	SRG-PA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
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.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

As of April 30, 2019, the registrant had the following common shares outstanding:

Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	35,689,708
Class B common shares of beneficial interest, par value $0.01 per share	1,322,365
Class C common shares of beneficial interest, par value $0.01 per share	0

SERITAGE GROWTH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED MARCH 31, 2019

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018	4
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	43
Item 4.	Controls and Procedures	43
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
SIGNATURES		46

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share and per share amounts)

	March 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	682,176		$	696,792
Buildings and improvements		912,767			900,173
Accumulated depreciation		(147,679	)		(137,947	)
		1,447,264			1,459,018
Construction in progress		327,006			292,049
Net investment in real estate		1,774,270			1,751,067
Real estate held for sale		7,510			3,094
Investment in unconsolidated joint ventures		419,528			398,577
Cash and cash equivalents		442,625			532,857
Tenant and other receivables, net		41,740			36,926
Lease intangible assets, net		101,452			123,656
Prepaid expenses, deferred expenses and other assets, net		52,700			29,899
Total assets	$	2,839,825		$	2,876,076
LIABILITIES AND EQUITY
Liabilities
Term Loan Facility, net	$	1,598,171		$	1,598,053
Accounts payable, accrued expenses and other liabilities		118,674			127,565
Total liabilities		1,716,845			1,725,618
Commitments and contingencies (Note 9)
Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized;    35,689,708 and 35,667,521 shares issued and outstanding    as of March 31, 2019 and December 31, 2018, respectively		357			357
Class B common shares $0.01 par value; 5,000,000 shares authorized;    1,322,365 shares issued and outstanding    as of March 31, 2019 and December 31, 2018		13			13
Series A preferred shares $0.01 par value; 10,000,000 shares authorized;     2,800,000 shares issued and outstanding as of March 31, 2019 and     December 31, 2018; liquidation preference of $70,000		28			28
Additional paid-in capital		1,124,457			1,124,504
Accumulated deficit		(362,606	)		(344,132	)
Total shareholders' equity		762,249			780,770
Non-controlling interests		360,731			369,688
Total equity		1,122,980			1,150,458
Total liabilities and equity	$	2,839,825		$	2,876,076

The accompanying notes are an integral part of these condensed consolidated financial statements. 

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except per share amounts)

	Three Months Ended March 31,
	2019			2018
REVENUE
Rental revenue	$	43,578		$	53,777
Management and other fee income		282			—
Total revenue		43,860			53,777
EXPENSES
Property operating		10,237			7,241
Real estate taxes		10,192			11,381
Depreciation and amortization		26,216			34,667
General and administrative		9,759			7,797
Provision for doubtful accounts		—			61
Total expenses		56,404			61,147
Gain on sale of real estate, net		21,261			41,831
Equity in income (loss) of unconsolidated joint ventures		1,222			(2,582	)
Interest and other income		2,598			680
Interest expense		(23,454	)		(16,419	)
Change in fair value of interest rate cap		—			165
(Loss) income before income taxes		(10,917	)		16,305
Provision for income taxes		23			(104	)
Net (loss) income		(10,894	)		16,201
Net income (loss) attributable to non-controlling interests		3,927			(5,873	)
Net loss (income) attributable to Seritage	$	(6,967	)	$	10,328
Preferred dividends		(1,225	)		(1,228	)
Net (loss) income attributable to Seritage common shareholders	$	(8,192	)	$	9,100
Net (loss) income per share attributable to Seritage Class A    and Class C common shareholders - Basic	$	(0.23	)	$	0.26
Net (loss) income per share attributable to Seritage Class A    and Class C common shareholders - Diluted	$	(0.23	)	$	0.26
Weighted average Class A and Class C common shares outstanding - Basic		35,671			35,414
Weighted average Class A and Class C common shares outstanding - Diluted		35,671			35,501

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, amounts in thousands)

																				Additional						Non-
	Class A Common					Class B Common				Class C Common						Series A Preferred				Paid-In			Accumulated			Controlling			Total
	Shares			Amount		Shares		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2018		32,416		$	324		1,329	$	13		3,151		$	31			2,800	$	28	$	1,116,060		$	(229,760	)	$	434,164		$	1,320,860
Net Income		—			—		—		—		—			—			—		—		—			10,328			5,873			16,201
Common dividends and    distributions declared    ($0.25 per share and unit)		—			—		—		—		—			—			—		—		—			(8,992	)		(5,054	)		(14,046	)
Preferred dividends    declared ($0.4375 per share)																								(1,228	)		—			(1,228	)
Vesting of restricted share units		14			—		—		—		—			—			—		—		—			—			—			—
Share-based compensation		—			—		—		—		—			—			—		—		869			—			—			869
Preferred stock offering costs		—			—		—		—		—			—			—		—		(88	)		—			—			(88	)
Share class exchanges, net    (2,779,121 common shares)		2,779			28		—		—		(2,779	)		(27	)		—		—		—			—			—			1
Balance at March 31, 2018		35,209		$	352		1,329	$	13		372		$	4			2,800	$	28	$	1,116,841		$	(229,652	)	$	434,983		$	1,322,569
Balance at January 1, 2019		35,668		$	357		1,322	$	13		—		$	—			2,800	$	28	$	1,124,504		$	(344,132	)	$	369,688		$	1,150,458
Net loss		—			—		—		—		—			—			—		—		—			(6,967	)		(3,927	)		(10,894	)
Cumulative effect of accounting    change (see Note 2)		—			—		—		—		—			—			—		—		—			(1,286	)		—			(1,286	)
Common dividends and    distributions declared    ($0.25 per share and unit)		—			—		—		—		—			—			—		—		—			(8,996	)		(5,030	)		(14,026	)
Preferred dividends    declared ($0.4375 per share)		—			—		—		—		—			—			—		—		—			(1,225	)					(1,225	)
Vesting of restricted share units		(23	)		—		—		—		—			—			—		—		(1,613	)		—			—			(1,613	)
Share-based compensation		45			—		—		—		—			—			—		—		1,566			—			—			1,566
Balance at March 31, 2019		35,690		$	357		1,322	$	13		—		$	—			2,800	$	28	$	1,124,457		$	(362,606	)	$	360,731		$	1,122,980

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

	Three Months Ended March 31,
	2019			2018
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$	(10,894	)	$	16,201
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in (income) loss of unconsolidated joint ventures		(1,222	)		2,582
Distributions from unconsolidated joint ventures		781			—
Gain on sale of real estate, net		(21,261	)		(41,831	)
Unrealized (gain) loss on interest rate cap		—			(165	)
Share-based compensation		1,532			869
Depreciation and amortization		26,216			34,667
Amortization of deferred financing costs		118			1,720
Amortization of above and below market leases, net		(104	)		(234	)
Straight-line rent adjustment		(3,355	)		(2,453	)
Change in operating assets and liabilities
Tenants and other receivables		484			1,034
Prepaid expenses, deferred expenses and other assets		(248	)		(4,229	)
Accounts payable, accrued expenses and other liabilities		(8,818	)		(502	)
Net cash (used in) provided by operating activities		(16,771	)		7,659
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated joint ventures		(9,140	)		(1,616	)
Distributions from unconsolidated joint ventures		389			2,110
Net proceeds from sale of real estate		37,569			60,435
Development of real estate		(85,413	)		(85,983	)
Net cash used in by investing activities		(56,595	)		(25,054	)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of mortgage loans payable		—			(73,034	)
Payment of deferred financing costs		—			(363	)
Purchase of shares related to stock grant recipients' tax withholdings		(1,613	)		—
Preferred dividends paid		(1,225	)		—
Common dividends paid		(8,998	)		(8,877	)
Non-controlling interests distributions paid		(5,030	)		(5,055	)
Net cash used in financing activities		(16,866	)		(87,329	)
Net decrease in cash, cash equivalents, and restricted cash		(90,232	)		(104,724	)
Cash, cash equivalents, and restricted cash, beginning of period		532,857			417,234
Cash, cash equivalents, and restricted cash, end of period	$	442,625		$	312,510

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited, amounts in thousands)

	Three Months Ended March 31,
	2019			2018
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	28,000		$	21,105
Capitalized interest		5,666			6,862
Income taxes paid		25			104
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING    ACTIVITIES
Development of real estate financed with accounts payable	$	17,438		$	19,964
Common dividends and OP unit distributions declared and unpaid		14,026			14,046
Preferred dividends declared and unpaid		1,225			—
Decrease in real estate, net resulting from deconsolidated properties
Real estate, net		(14,656	)		(58,190	)
Tenants and other receivables, net		(2	)		—
Prepaid expenses, deferred expenses and other assets, net		(84	)		—
Accounts payable, accrued expenses and other liabilities		6			—
Transfer to real estate assets held for sale		4,416			—
Transfer of below market asset to Right of Use Asset		(11,005	)		—
Recording of Lease Right of Use Assets		19,373			—
Recording of Lease Liabilities		(8,368	)		—
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND    RESTRICTED CASH
Cash and cash equivalents		442,625			135,091
Restricted cash		—			177,419
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	442,625		$	312,510

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SERITAGE GROWTH PROPERTIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization

Seritage Growth Properties (“Seritage” or the “Company”) was organized in Maryland on June 3, 2015.  The Company is a fully-integrated, self-administered, self-managed real estate investment trust (“REIT”) primarily engaged in the real property business through its investment in Seritage Growth Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership that was formed on April 22, 2015.  Unless the context otherwise requires, “Seritage” and the “Company” refer to Seritage, the Operating Partnership, and its subsidiaries.

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings”) effected a rights offering to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Acquired Properties”), and (ii) Sears Holdings’ 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (the “Acquired JV Properties”).  Concurrent with the acquisition, the Company leased back to Sears Holdings space at 224 of the Acquired Properties under a master lease agreement (the “Original Master Lease”) and space at all 31 Acquired JV Properties under multiple master lease agreements (the “Original JV Master Leases”).

The rights offering ended on July 2, 2015, and the Company’s Class A common shares were listed on the New York Stock Exchange (“NYSE”) on July 6, 2015.  On July 7, 2015, the Company completed the transactions with Sears Holdings and commenced operations.  The Company did not have any operations prior to the completion of the rights offering and the transactions with Sears Holdings.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).On February 11, 2019, Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc.(“ESL”), completed the acquisition of an approximately 425-store retail footprint and other assets and component businesses of Sears Holdings on a going-concern basis (the “Holdco Acquisition”).  In connection with the Holdco Acquisition, Holdco acquired certain designation rights with respect to certain executory contracts and leases of Sears Holdings, including the Original Master Lease.  On February 28, 2019, the Company and certain affiliates of Holdco executed a master lease with respect to 51 Acquired Properties (the “Holdco Master Lease”).   The Holdco Master Lease became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease. For accounting purposes, the Holdco Master Lease is treated as a modification to the Original Master Lease.

As of March 31, 2019, the Company’s portfolio consisted of interests in 225 properties totaling approximately 35.6 million square feet of gross leasable area (“GLA”), including 198 wholly owned properties totaling approximately 30.8 million square feet of GLA across 46 states and Puerto Rico (the “Wholly Owned Properties), and interests in 27 joint venture properties totaling approximately 4.8 million square feet of GLA across 13 states (the “JV Properties”).

As of March 31, 2019, the Company leased space at 51 Wholly Owned Properties to Holdco pursuant to the Holdco Master Lease and space at 19 JV Properties continued to be leased to Sears Holdings pursuant to the Original JV Master Leases.  Under the Holdco Master Lease and Original JV Master Leases, the Company has the right to recapture certain space at each property occupied by Holdco and Sears Holdings, respectively, for retenanting or redevelopment purposes.  Tenants under the Holdco Master Lease and Original JV Master Leases also have rights to terminate the lease at individual locations subject to certain parameters (see Note 5).

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, (the “Annual Report”), for the year ended December 31, 2018.  Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report.  In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report.  Operating results of three months ended March 31, 2019 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2019.  Capitalized terms used, but not defined in this quarterly report, have the same meanings as set forth in our Annual Report.

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The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. As of March 31, 2019, and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of March 31, 2019, the Company holds a 63.9% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  The Company has determined that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

Reclassification

Upon adoption of the new lease standard, rental recoveries for 2018 have been reclassified to rental revenues in the consolidated statements of operations to conform to the 2019 financial statement presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

The Company currently operates in a single reportable segment which includes the acquisition, ownership, development, redevelopment, management, and leasing of real estate properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process.

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved, and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

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Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

During the three months ended March 31, 2019, the Company sold interests in eight properties for net proceeds of $38.8 million and recognized gain on sale of real estate of $21.5 million.

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of March 31, 2019, two properties were classified as held for sale with assets of $7.5 million and no liabilities and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

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Restricted Cash

Restricted cash represents cash deposited in escrow accounts which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.

As of March 31, 2019, the Company did not have any restricted cash. As of March 31, 2018, the Company had approximately $177.4 million of restricted cash accounts which were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.  

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions. Any receivables that are deemed to be uncollectible are recognized as a reduction to rental revenue in the Company’s consolidated statements of operations. Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental revenue.

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.  Generally, this occurs on the rent commencement date.  In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

Reimbursement of property operating expenses arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the expenses are incurred.

Management and Other Fee Income

Management and other fee income represents management, leasing, and development fees for services performed for the benefit of certain unconsolidated joint ventures and is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the condensed consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the condensed consolidated statements of operations and in other expenses in the combined condensed financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

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Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Seritage Partial Recapture Rights.  The Company generally treats the delivery of a partial recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the lease.

− The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Termination Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations would generally result in the following accounting adjustments for the terminated property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

− Termination fees required to be paid are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of vacancy.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility on July 7, 2015, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the condensed consolidated balance sheets.  The Company elected not to utilize hedge accounting, and therefore, the change in fair value is included within change in fair value of interest rate cap on the condensed consolidated statements of operations.  

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During the year ended December 31, 2018, the Company terminated its interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility andas such there was no balance outstanding as of March 31, 2019 and December 31, 2018. For the three months ended March 31, 2018, the Company recorded a gain of $0.2 million.

Share-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the condensed consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of March 31, 2019, 51 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the quarter were derived from the Original Master Lease, prior to its rejection, and subsequently from the Holdco Master Lease.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Holdco’s business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of March 31, 2019, the Company's portfolio of 198 Wholly Owned Properties and 27 JV Properties was diversified by location across 46 states and Puerto Rico.

Earnings per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

In February 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets” to provide guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach). We adopted this update on January 1, 2018 with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

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In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases ("ASC 842"), as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for like earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.

Effective January 1, 2019, the Company adopted ASU 2016-02 electing the package of practical expedients without hindsight whichpermits the Company to notreassess(1)whetheranyexpiredorexistingcontractsareorcontainleases,(2)leaseclassificationforany expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date.

The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the condensed consolidated balance sheets.

Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption.

The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the condensed consolidated balance sheets.

In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately. For leases where the Company is the lessor, the Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the condensed consolidated statements of operations. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our condensed consolidated financial statements.

Note 3 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $101.5 million and $11.9 million, respectively, as of March 31, 2019 and $123.7 million and $12.3 million, respectively, as of December 31, 2018.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

March 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	253,149	$	(155,404	)	$	97,745
Above-market leases, net		7,126		(3,419	)		3,707
Total	$	260,275	$	(158,823	)	$	101,452

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	16,652	$	(4,705	)	$	11,947
Total	$	16,652	$	(4,705	)	$	11,947

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December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.1  million and $0.2 million for the three months ended March 31, 2019, and March 31, 2018, respectively. Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

Remainder of 2019	$	288
2020		191
2021		123
2022		157
2023		207

Amortization of an acquired below-market ground lease resulted in additional property expense of $50 thousand for the three months ended March 31, 2019, and March 31, 2018. Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

Remainder of 2019	$	152
2020		203
2021		203
2022		203
2023		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $10.3 million and $18.0 million for the three months ended March 31, 2019 and March 31, 2018, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

Remainder of 2019	$	12,060
2020		14,494
2021		14,000
2022		13,727
2023		12,730

Note 4 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures.  The Company’s partners in these joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures.  The obligations to make capital contributions are governed by each unconsolidated joint venture’s respective operating agreement and related governing documents.

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As of March 31, 2019, the Company had investments in eight unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of Greenberg Gibbons		50.0	%		1		159,000
						27		4,855,600

Mark 302 JV

On March 20, 2018, the Company contributed its property located in Santa Monica, CA to the Mark 302 JV and sold a 49.9% interest to an investment fund managed by Invesco Real Estate based on a contribution value of $90.0 million (the “Initial Mark 302 Contribution Value”) and pre-transaction development and other costs of approximately $10.4 million.  As a result of the transaction, the Company received cash of approximately $50.1 million and recorded a gain of $38.8 million (the “Initial Mark 302 Gain”) which is included in gain on sale of real estate within the consolidated statements of operations for the year ended December 31, 2018. The Initial Mark 302 Gain is comprised of $19.4 million attributable to the increase in fair value of the retained 50.1% interest due to application of the ASU 2017-05, while the remaining $19.4 million is the gain on sale of the remaining 49.9% interest.

The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization (as defined in the operating agreement of the Mark 302 JV) or December 31, 2020. Upon revaluation, the primary inputs in determining the Initial Mark 302 Contribution Value, which consist of property operating income and total project costs, will be updated for actual results and a value (the “Final Mark 302 Contribution Value”) will be calculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Final Mark 302 Contribution Value cannot be more than $105.0 million or less than $60.0 million and will result in a cash settlement between the two parties.

The Company recorded the Initial Mark 302 Gain based on the Initial Mark 302 Contribution Value because it determined it to be the expected amount in the range of possible amounts. The Company made this determination based on its analysis of the primary inputs that determine both the Initial Mark 302 Contribution Value and Final Mark 302 Contribution Value, which consist of property operating income and total project costs. The gain on sale of real estate based on the Final Mark 302 Contribution Value (the “Final Mark 302 Gain”) will not be more than $53.8 million or less than $8.8 million.

Each reporting period the Company re-analyzes the primary inputs that determine the Final Mark 302 Contribution Value and Final Mark 302 Gain.   For the three months ended March 31, 2019 and the period from March 20, 2018 to March 31, 2018, there were no adjustments to the Initial Mark 302 Contribution Value or the Initial Mark 302 Gain resulting from such analysis.

West Hartford JV

On May 18, 2018, the Company contributed its property located in West Hartford, CT to the West Hartford JV and sold a 50.0% interest to First Washington Realty based on a contribution value of $25.0 million (the “Initial West Hartford JV Contribution Value”) and pre-transaction development and other costs of approximately $20.2 million.  As a result of the transaction, the Company received cash of approximately $22.6 million and recorded a gain of $1.2 million (the “Initial West Hartford JV Gain”) which is included in gain on sale of real estate within the consolidated statements of operations for the year ended December 31, 2018. The Initial West Hartford JV Gain is comprised of $0.6 million attributable to the increase in fair value of the retained 50.0% interest due to application of the ASU 2017-05, while the remaining $0.6 million is the gain on sale of the remaining 50.0% interest.

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The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization (as defined in the operating agreement of the West Hartford JV) or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022.  Upon revaluation, the primary inputs in determining the Initial West Hartford JV Contribution Value, which consist of property operating income and total project costs, will be updated for actual results and a value (the “Final West Hartford JV Contribution Value”) will be calculated to yield a pre-determined rate of return to First Washington Realty.  The Final West Hartford JV Contribution Value cannot be more than $29.6 million or less than $20.4 million.  Upon adjustment for real estate tax purposes, an amount based on the difference between actual real estate taxes and tenant recoveries for such real estate taxes will be determined and the capitalized value of such amount will be applied as an adjustment to the transaction price (the “Real Estate Tax Adjustment Amount”).  The Real Estate Tax Adjustment Amount, and the aggregate transaction price adjustment resulting from (i) the difference between the Initial West Hartford JV Contribution Value and the Final West Hartford JV Contribution Value, and (ii) the Real Estate Tax Adjustment Amount, cannot exceed $4.6 million and will result in a cash settlement between the two parties.

The Company recorded the Initial West Hartford JV Gain based on the Initial West Hartford JV Contribution Value because it determined it to be the expected amount in the range of possible amounts. The Company made this determination based on its analysis of the primary inputs that determine both the Initial West Hartford JV Contribution Value and Initial West Hartford JV Contribution Value, which consist of property operating income, including the difference between actual real estate taxes and tenant recoveries for such real estate taxes, and total project costs. The gain on sale of real estate based on the Final West Hartford JV Contribution Value (the “Final West Hartford JV Gain”) will not be more than $5.8 million or less than $3.4 million.

Each reporting period the Company re-analyzes the primary inputs that determine the Initial West Hartford JV Contribution Value and Initial West Hartford JV Gain.  For the three months ended March 31, 2019, there were no adjustments to the Initial West Hartford JV Contribution Value or the Initial West Hartford JV Gain resulting from such analysis.

Cockeysville JV

On March 29, 2019, the Company contributed its property located in Cockeysville, MD to the Cockeysville JV and sold a 50.0% interest to an affiliate of the owner of the adjacent shopping center based on a contribution value of $12.5 million and pre-transaction development and other costs of approximately $6.2 million. As a result of the transaction, the Company received cash of approximately $9.3 million and recorded a gain of $3.8 million which is included in gain on sale of real estate within the condensed consolidated statements of operations for the three months ended March 31, 2019. The gain is comprised of $1.9 million attributable to the increase in fair value of the retained 50.0% interest due to application of the ASU 2017-05, while the remaining $1.9 million is the gain on sale of the remaining 50.0% interest.

Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP.  The Company shares in the profits and losses of these unconsolidated joint ventures generally in accordance with the Company’s respective equity interests.  In some instances, the Company may recognize profits and losses related to investment in an unconsolidated joint venture that differ from the Company’s equity interest in the unconsolidated joint venture.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated joint venture recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets or other items.  There were no joint venture impairment charges for the three months ended March 31, 2019 or March 31, 2018.

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV and the UTC JV. The Company is entitled to receive fees for providing management, leasing, and construction supervision services to these joint ventures. The Company earned $282 thousand and $0 from these services for the three months ended March 31, 2019 and March 31, 2018, respectively.

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The following tables present combined condensed financial data for the Company’s unconsolidated joint ventures (in thousands):

	March 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	329,349		$	321,853
Buildings and improvements		516,723			508,302
Accumulated depreciation		(76,439	)		(72,239	)
		769,633			757,916
Construction in progress		88,628			78,227
Net investment in real estate		858,261			836,143
Cash and cash equivalents		16,266			14,741
Tenant and other receivables, net		5,037			5,220
Other assets, net		39,733			38,285
Total assets	$	919,297		$	894,389
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Mortgage loans payable, net	$	13,805		$	10,406
Accounts payable, accrued expenses and other    liabilities		60,518			71,791
Total liabilities		74,323			82,197
Members Interest
Additional paid in capital		842,986			833,168
Retained earnings		1,988			(20,976	)
Total members interest		844,974			812,192
Total liabilities and members interest	$	919,297		$	894,389

	Three Months Ended March 31,
	2019			2018
EQUITY IN INCOME OF UNCONSOLIDATED    JOINT VENTURES
Total revenue	$	11,218		$	11,227
Property operating expenses		(2,598	)		(1,712	)
Depreciation and amortization		(5,253	)		(7,586	)
Operating income		3,367			1,929
Other expenses		(922	)		(7,094	)
Net (loss) income	$	2,445		$	(5,165	)
Equity in (loss) income of unconsolidated    joint ventures	$	1,222		$	(2,582	)

Note 5 – Leases

On February 28, 2019, the Company and certain affiliates of Holdco executed the Holdco Master Lease which became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.  The Company analyzed this transaction under applicable accounting guidance and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification in accordance with ASC 842.

Lease Structure

The structure of the Holdco Master Lease is consistent with the structure of the Original Master Lease in all material respects, including (i) it is a unitary, non-divisible lease as to all properties, pursuant to which the tenant’s obligations as to each property are cross-defaulted with all obligations of the tenant with respect to all other properties; (ii) it is a triple net lease with respect to all space which is leased thereunder to the tenant, subject to proportional sharing by the tenant for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by the tenant and other space occupied by other tenants in the same or other buildings, space which is recaptured pursuant to the Company’s recapture rights described below and all other space which is constructed on the properties; (iii) the tenant is required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they are in occupancy; and (iv) the tenant is generally prohibited from subleasing any space demised under the lease.

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Term and Renewals

Consistent with the terms of the Original Master Lease, the Holdco Master Lease will expire in July 2025, and contains three options for five-year renewals of the term and a final option for a four-year renewal, as was the case under the Original Master Lease.

Rental Revenue

The Holdco Master Lease provides for an initial base rent at the same rates which were in place at the time of the modification for accounting purposes. In each of the initial term and the first two renewal terms, consistent with the Original Master Lease, base rent under the Holdco Master Lease will be increased in August of each year by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, consistent with the Original Master Lease, rent will be set at the commencement of the renewal term for the Holdco Master Lease at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Holdco Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year.  The base rent under the Holdco Master Lease will be subject to an adjustment in the form of a rent credit of up to approximately $12 million in each of the first and second years of the Holdco Master Lease.  The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018. If any such properties are recaptured by the Company or terminated by Holdco, the base rent credit attributable to such property will no longer be applicable.  The rent credit is applicable to base rent only and Holdco is responsible for repair and maintenance charges, real property taxes, insurance and other costs and expenses associated with its occupancy of the subject properties.

Revenues from the Holdco Master Lease and the Original Master Lease for the three months ended March 31, 2019 and March 31, 2018 are as follows (in thousands and excluding straight-line rental income of $0.5 million and $0.5 million, respectively.

	Three Months Ended March 31,
	2019		2018
Fixed lease revenue	$	12,288	$	22,531
Variable lease revenue		8,398		13,442
Total rental revenue	$	20,686	$	35,973

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2019 and December 31, 2018 are approximately as follows:

(in thousands)	March 31, 2019
Remainder of 2019	$	76,637
2020		104,249
2021		106,925
2022		106,006
2023		101,240
2024		98,470
Thereafter		332,817
Total Lease Payments	$	926,344

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

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The components of lease revenues for the three months ended March 31, 2019 were as follows:

(in thousands)	Three months ended March 31, 2019
Fixed lease revenues	$	28,989
Variable lease revenues		11,129
Lease revenues	$	40,118

Lessee Disclosures

We have one ground lease and corporate office leases which are classified as operating leases.  As of March 31, 2019, we recorded $8.6 million of ROU assets and lease liabilities. Our ROU assets were increased by $11 million of acquired below-market lease assets, net, reclassified from Lease intangible assets, net.

The Company recorded rent expense related to leased corporate office space of $285 thousand as of March 31, 2019 and $176 thousand as of March 31, 2018.  Such rent expense is classified within general and administrative expenses on the consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $11 thousand for the three months ended March 31, 2019 and $11 thousand for the three months ended March 31, 2018.  Such ground rent expense is classified within property operating expenses on the consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2019:

(in thousands)	As of March 31, 2019
Weighted average remaining lease term (in years)		11.29
Weighted average discount rate		7.19	%
Cash paid for operating leases	$	501

Seritage Recapture Rights

The Holdco Master Lease, consistent with the Original Master Lease, provides the Company with the right to recapture up to approximately 50% of the space occupied by the tenant at all properties (other than five specified properties) and the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of parking areas and common areas.  Upon exercise of any of these partial recapture rights, consistent with the Original Master Lease, the Company will generally incur, as applicable, certain costs and expenses for the separation of the recaptured space from the remaining tenant space.

Additionally, in contrast to Original Master Lease, which permitted the Company to recapture 100% of certain properties upon payment of a specified recapture fee, the Holdco Master Lease provides the Company with the right, beginning in the second year of the term, to recapture 100% of the space occupied by the tenant at any of the properties included in the Holdco Master Lease (other than five specified properties) without paying a recapture fee.  This right to recapture 100% of any property is limited to 10 properties in each year of the Holdco Master Lease term, with carry-over rights if less than 10 properties are recaptured in any given lease year.  In the event of a 100% recapture of a property (or termination of a property by Holdco that is subject to a termination fee) and any subsequent redevelopment of such property for retail purposes, Holdco has certain rights of first offer to lease space at specified predefined rates depending on the condition the space is delivered.  If the Company does not provide Holdco with a right of first offer on at least one-third of any such properties that are recaptured 100% by the Company (or terminated by Holdco with payment of a termination fee) in a given lease year, then the Company’s 100% recaptures rights are subject to payment of a recapture fee until such time as the Company has complied with the foregoing ratio.

Upon the exercise of any of its recapture rights, the Company can reconfigure and rent the recaptured space to new, diversified tenants on potentially superior terms as determined by the Company and for its own account.

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As shown in the table below, the Company had exercised certain recapture rights with respect to70 propertiesunder the Original Master Lease prior to its rejection on March 12, 2019.  As of March 31, 2019, the Company had not exercised any of its recapture rights under the Holdco Master Lease.

Property	Recapture Type	Notice Date(s)
Hialeah, FL (Westland)	Auto Center	September 2018
Cape Girardeau, MO	100% (1)	September 2018
Doral, FL	100% (1)	September 2018
Fairfax, VA	100% (1)	September 2018 / May 2016
Gillette, WY	100% (1)	September 2018
Happy Valley, OR	100% (1)	September 2018
Houston, TX (Memorial City)	100% (1)	September 2018
Santa Cruz, CA	100% (1)	September 2018 / December 2016
Vancouver, WA	100% (1)	September 2018
Fresno, CA	Partial	May 2018
Asheville, NC	100% (1)	March 2018
Chicago, IL (Six Corners)	100% (1)	March 2018
Clearwater, FL	100% (1)	March 2018
El Cajon, CA	100% (1)	March 2018
Fairfield, CA	100% (1)	March 2018 / December 2017
Oklahoma City, OK	Out parcel	March 2018
Plantation, FL	100% (1)	March 2018 / December 2017
Redmond, WA	100% (1)	March 2018 / September 2017
Reno, NV	100% (1)	March 2018
Tucson, AZ	100% (1)	March 2018
Anchorage, AK	100%	December 2017
Boca Raton, FL	100%	December 2017
Westminster, CA	100%	December 2017
Hicksville, NY	100%	December 2017
Orland Park, IL	100% (1)	December 2017
Florissant, MO	Out parcel	December 2017
Salem, NH	Out parcel	December 2017
Las Vegas, NV	Partial	December 2017
Yorktown Heights, NY	Partial	December 2017
Austin, TX (Tech Ridge)	100% (1)	December 2017 / September 2017
Ft. Wayne, IN	Out parcel	September 2017 / July 2016
North Little Rock, AR	Auto Center	September 2017
St. Clair Shores, MI	100%	September 2017
Canton, OH	Partial	June 2017
Dayton, OH	Auto center	June 2017
North Riverside, IL	Partial	June 2017
Roseville, CA	Auto center	June 2017
Temecula, CA	Partial	June 2017
Watchung, NJ	100%	June 2017
Anderson, SC	100% (1)	April 2017 / July 2016
Aventura, FL	100%	April 2017
Carson, CA	100% (1)	April 2017 / December 2016
Charleston, SC	100% (1)	April 2017 / October 2016
Hialeah, FL (freestanding)	100% (1)	April 2017
San Diego, CA (2)	100% (1)	April 2017
Valley View, TX	100%	April 2017
Cockeysville, MD (3)	Partial	March 2017
North Miami, FL	100%	March 2017
Olean, NY	Partial	March 2017
Guaynabo, PR	Partial	December 2016
Santa Monica, CA (4)	100%	December 2016
Saugus, MA	Partial	December 2016
Roseville, MI	Partial	November 2016
Troy, MI	Partial	November 2016
Rehoboth Beach, DE	Partial	October 2016
St. Petersburg, FL (Tyrone Square)	100%	October 2016
Warwick, RI	Auto center	October 2016
West Hartford, CT (5)	100%	October 2016
Madison, WI	Partial	July 2016
North Hollywood, CA	Partial	July 2016

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Orlando, FL	100%	July 2016
West Jordan, UT	Partial + auto center	July 2016
Albany, NY	Auto center	May 2016
Bowie, MD	Auto center	May 2016
Hagerstown, MD	Auto center	May 2016
Wayne, NJ (6)	Partial + auto center	May 2016
San Antonio, TX	Auto center	March 2016
Braintree, MA	100%	November 2015
Honolulu, HI	100%	December 2015
Memphis, TN	100%	December 2015

(1) The Company converted partial recapture rights at this property to 100% recapture rights and exercised such rights.

(2) In May 2018, the Company contributed this property to the UTC JV and retained a 50.0% interest in the joint venture.

(3) In March 2019, the Company contributed this property to the Cockeysville JV and retained a 50.0% interest in the joint venture.

(4) In March 2018, the Company contributed this asset to the Mark 302 JV and retained a 50.1% interest in the joint venture.

(5) In May 2018, the Company contributed this property to the West Hartford JV and retained a 50.0% interest in the joint venture.

(6) In July 2017, the Company contributed this asset to the GGP II JV and retained a 50.0% interest in the joint venture.

Tenant Termination Rights

Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, unlike the Original Master Lease, beginning in the second year of the term of the Holdco Master Lease, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.  As of March 31, 2019, Holdco had not exercised any of its termination rights under the Holdco Master Lease.

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The table below includes the 87 properties at which Sears Holdings had exercised its termination rights under the Original Master Lease prior to its rejection on March 12, 2019:

					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Antioch, CA		95,200	August 2018	December 2018
Columbus, MS		117,100	August 2018	December 2018
Dayton, OH		148,800	August 2018	December 2018	Q2 2017
Flagstaff, AZ		66,200	August 2018	December 2018
Ft. Wayne, IN		213,600	August 2018	December 2018	Q3 2016 / Q3 2017
Jackson, MI		144,200	August 2018	December 2018
Manchester, NH		135,100	August 2018	December 2018	Q4 2018
Salem, NH		119,000	August 2018	December 2018	Q4 2017
Savannah, GA		155,700	August 2018	December 2018
Scott Depot, WV		89,800	August 2018	December 2018	Sold
Steger, IL		87,400	August 2018	December 2018
Victor, NY		115,300	August 2018	December 2018
West Jordan, UT		117,300	August 2018	December 2018	Q3 2016 / Q3 2018
Chesapeake, VA		169,400	June 2018	November 2018
Clay, NY		138,000	June 2018	November 2018
Havre, MT		94,700	June 2018	November 2018	Sold
Newark, CA		145,800	June 2018	November 2018
Oklahoma City, OK		173,700	June 2018	November 2018	Q3 2017
Troy, MI		271,300	June 2018	November 2018	Q3 2016
Virginia Beach, VA		86,900	June 2018	November 2018	Q3 2015
Madison, WI		88,100	June 2018	October 2018	Q2 2016
Thousand Oaks, CA		50,300	June 2018	October 2018	Q3 2015
Cedar Rapids, IA		141,100	April 2018	August 2018
Citrus Heights, CA		280,700	April 2018	August 2018
Gainesville, FL		140,500	April 2018	August 2018	Q2 2018
Maplewood, MN		168,500	April 2018	August 2018
Pensacola, FL		212,300	April 2018	August 2018	Q2 2018
Rochester, NY		128,500	April 2018	August 2018
Roseville, CA		121,000	April 2018	August 2018	Q2 2017 / Q1 2018
San Antonio, TX		187,800	April 2018	August 2018	Q4 2015
Warrenton, VA		113,900	April 2018	August 2018	Q1 2018
Westwood, TX		215,000	June 2017	January 2018 (1)	Q3 2018
Friendswood, TX		166,000	June 2017	November 2017 (1)
Albany, NY		216,200	June 2017	October 2017	Q1 2016
Burnsville, MN		161,700	June 2017	October 2017
Chicago, IL (N Harlem)		293,700	June 2017	October 2017
Cockeysville, MD		83,900	June 2017	October 2017	Q1 2017
East Northport, NY		187,000	June 2017	October 2017	Q2 2017
Greendale, WI		238,400	June 2017	October 2017	Q4 2017
Hagerstown, MD		107,300	June 2017	October 2017	Q1 2016 / Sold
Johnson City, NY		155,100	June 2017	October 2017
Lafayette, LA		194,900	June 2017	October 2017
Mentor, OH		208,700	June 2017	October 2017
Middleburg Heights, OH		351,600	June 2017	October 2017
Olean, NY		75,100	June 2017	October 2017	Q1 2017
Overland Park, KS		215,000	June 2017	October 2017
Roseville, MI		277,000	June 2017	October 2017	Q3 2016
Sarasota, FL		204,500	June 2017	October 2017
Toledo, OH		209,900	June 2017	October 2017
Warwick, RI		169,200	June 2017	October 2017	Q3 2016 / Q3 2017
York, PA		82,000	June 2017	October 2017	Sold
Chapel Hill, OH		187,179	January 2017	April 2017
Concord, NC		137,499	January 2017	April 2017
Detroit Lakes, MN		79,102	January 2017	April 2017
El Paso, TX		103,657	January 2017	April 2017	Q2 2018
Elkins, WV		94,885	January 2017	April 2017	Sold
Henderson, NV		122,823	January 2017	April 2017	Q1 2017
Hopkinsville, KY		70,326	January 2017	April 2017	Q1 2018
Jefferson City, MO		92,016	January 2017	April 2017	Q2 2017
Kenton, OH		96,066	January 2017	April 2017

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					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Kissimmee, FL		112,505	January 2017	April 2017
Layton, UT		90,010	January 2017	April 2017	Q3 2018
Leavenworth, KS		76,853	January 2017	April 2017	Sold
Mt. Pleasant, PA		83,536	January 2017	April 2017	Q2 2018
Muskogee, OK		87,500	January 2017	April 2017	Sold
Owensboro, KY		68,334	January 2017	April 2017	Sold
Paducah, KY		108,244	January 2017	April 2017	Q3 2017
Platteville, WI		94,841	January 2017	April 2017	Sold
Riverside, CA (Iowa Ave.)		94,500	January 2017	April 2017
Sioux Falls, SD		72,511	January 2017	April 2017	Sold
Alpena, MI		118,200	September 2016	January 2017
Chicago, IL (S Kedzie)		118,800	September 2016	January 2017	Q3 2018
Cullman, AL		98,500	September 2016	January 2017	Q2 2017
Deming, NM		96,600	September 2016	January 2017
Elkhart, IN		86,500	September 2016	January 2017	Q4 2016
Harlingen, TX		91,700	September 2016	January 2017	Sold
Houma, LA		96,700	September 2016	January 2017	Sold
Kearney, NE		86,500	September 2016	January 2017	Q3 2016
Manistee, MI		87,800	September 2016	January 2017
Merrillville, IN		108,300	September 2016	January 2017	Q4 2016
New Iberia, LA		91,700	September 2016	January 2017	Q2 2017
Riverton, WY		94,800	September 2016	January 2017	Sold
Sault Sainte Marie, MI		92,700	September 2016	January 2017
Sierra Vista, AZ		86,100	September 2016	January 2017	Sold
Springfield, IL		84,200	September 2016	January 2017	Q3 2016
Thornton, CO		190,200	September 2016	January 2017	Q1 2017
Yakima, WA		97,300	September 2016	January 2017	Sold
Total square feet		11,728,387

(1) The Company and Sears Holdings agreed to extend occupancy beyond October 2017 under the existing Original Master Lease terms.

As of March 31, 2019, the Company had commenced or completed redevelopment projects at 39 of the terminated properties and will continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears Holdings.

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent.  The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”). The Term Loan Facility matures on July 31, 2023.

The Company used a portion of the proceeds from the Initial Funding to (i) repay the Mortgage Loans and Future Funding Facility due July 2019; (ii) repay the Unsecured Term Loan due December 2018; and (iii) pay transaction and related costs.  The Company expects the remaining proceeds from the Initial Funding, as well as borrowings under the Incremental Funding Facility, will be used to fund the Company’s redevelopment pipeline and to pay operating expenses of the Company and its subsidiaries.  

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepaid an annual fee of $4.0 million at closing and is amortizing the expense to interest expense on the consolidated statement of operations.

As of March 31, 2019, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to certain signed but not open leases) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million and (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to certain signed but not open leases) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million.

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The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Borrower.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Borrower and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a springing requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement.

The Term Loan Facility includes certain financial metrics to govern springing collateral and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion.  Any failure to satisfy any of these financial metrics will limit the Company’s ability to dispose of assets via sale or joint venture and will trigger the springing mortgage and collateral requirements but will not result in an event of default.  The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, and bankruptcy or insolvency proceedings.  If there is an event of default, the lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of March 31, 2019, the Company was not in compliance with certain of the financial metrics described above.  As a result, the Company must receive the consent of Berkshire Hathaway to dispose of assets via sale or joint venture and Berkshire Hathaway has the right to request mortgages against the Company’s assets pursuant to the springing mortgage and collateral requirement.

The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement.  As of March 31, 2019, the unamortized balance of the Company’s debt issuance costs was $1.8 million.

Note 7 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for federal income tax purposes and expects to continue to operate to qualify as a REIT.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to currently distribute at least 90% of its adjusted REIT taxable income to its shareholders.

As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to its shareholders.  If the Company fails to qualify as a REIT or does not distribute 100% of its taxable income in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state, local and Puerto Rico taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income.

On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the “TCJA”) was signed into law and included wide-scale changes to individual, pass-through and corporation tax laws, including those that impact the real estate industry, the ownership of real estate and real estate investments, and REITs. The Company has reviewed the provisions of the law that pertain to the Company and has determined that they have no material income tax effect for financial statement purposes.

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Note 8 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value.  The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”).  ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.  In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.  The Company also considers counterparty credit risk in its assessment of fair value.

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

All derivative instruments are carried at fair value and are valued using Level 2 inputs.  The Company had no derivative instruments as of March 31, 2019 (an interest rate cap associated with the Mortgage Loans and Future Funding Facility was terminated subsequent to the repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018). The Company utilized an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The Company had elected not to utilize hedge accounting, and therefore, the change in fair value was included in previous periods within change in fair value of interest rate cap on the condensed consolidated statements of operations.  For the three months ended March 31, 2019, the Company did not record any gain or loss compared to a gain of $0.2 million for the three months ended March 31, 2018.  

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the condensed consolidated balance sheets include cash equivalents and debt obligations.  The fair value of cash equivalents is classified as Level 1 and the fair value of debt obligations is classified as Level 2.

Cash equivalents are carried at cost, which approximates fair value.  The fair value of debt obligations is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings.  As of March 31, 2019 and December 31, 2018, the estimated fair values of the Company’s debt obligations were $1.60 billion and $1.60 billion, respectively, which approximated the carrying value at such dates as the current risk-adjusted rate approximates the stated rates on the Company’s debt obligations.

Note 9 – Commitments and Contingencies

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or discloses the fact that such a range of loss cannot be estimated. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, and the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the master lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief,

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avoidance of the allegedly actual and/orconstructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of theproceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at leastequal to the value of the transferred property.  The Litigation is at early stages, and the defendants thereto have not yet filed a response to the complaint described above.  The Company believes that the claims against the Seritage Defendants in the Litigation arewithout merit and intend to defend against them vigorously.

In addition to the litigation described above, the Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the condensed consolidated financial position, results of operations, cash flows or liquidity of the Company. As of March 31, 2019, and December 31, 2018, the Company did not record any amounts for litigation or other matters.

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert was Chairman of Sears Holdings and is the Chairman and Chief Executive Officer of ESL, which owns Holdco. Mr. Lampert beneficially owns approximately 74.1 % of Sears Holdings’ outstanding common stock (according to a Schedule 13D filed October 17, 2018). Mr. Lampert is also the Chairman of Seritage.

As of March 31, 2019, Mr. Lampert beneficially owned a 36.1% interest in the Operating Partnership and approximately 2.7% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.

Subsidiaries of Sears Holdings, as lessees, and subsidiaries of the Company, as lessors, are parties to the Original Master Lease (see Note 5), and subsidiaries of Holdco, as lessees, and subsidiaries of the Company, as lessors, are parties to the Holdco Master Lease.

Unconsolidated Joint Ventures

Certain unconsolidated joint ventures have engaged the Company to provide management, leasing and development services at the properties owned by the unconsolidated joint ventures.  Fees for the services performed are reported at 100% of the revenue earned from such joint ventures in management and other fee income on the condensed consolidated statements of operations.  The Company’s share of the expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the condensed consolidated statements of operations and in other expenses in the combined condensed financial data in Note 4.

In addition, as of March 31, 2019, the Company had incurred $2.9 million of development expenditures at properties owned by certain unconsolidated joint ventures for which the Company will be repaid by the respective unconsolidated joint ventures.  These amounts are included in tenant and other receivables, net on the Company’s condensed consolidated balance sheets.  As of December 31, 2018, the Company had incurred $2.1 million of these development expenditures.

Note 11 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”).  Pursuant to the Partnership Agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners.

As of March 31, 2019, the Company held a 63.9% interest in the Operating Partnership and ESL held a 36.1% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the periods presented.

Note 12 – Shareholders’ Equity

Class A Common Shares

During the three months ended March 31, 2019, 45,549 Class A common shares vested, net of 23,362 shares withheld for employee income taxes.

As of March 31, 2019, 35,689,708 Class A common shares were issued and outstanding.

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Class B Non-Economic Common Shares

During the three months ended March 31, 2019, there was no Class B non-economic common shares activity.

As of March 31, 2019, 1,322,365 Class B non-economic common shares were issued and outstanding.  The Class B non-economic common shares have voting rights, but do not have economic rights and, as such, do not receive dividends and are not included in earnings per share computations.

Class C Non-Voting Common Shares

As of March 31, 2019, there were noClass C non-voting common shares issued or outstanding.

Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share.  The Company received net proceeds from the offering of approximately $66.7 million, after deducting payment of the underwriting discount and offering expenses, which it used to fund its redevelopment pipeline and for general corporate purposes.

The Company may not redeem the Series A Preferred Shares before December 14, 2022 except to preserve its status as a REIT or upon the occurrence of a Change of Control, as defined in the Trust Agreement addendum designating the Series A Preferred Shares.  On and after December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. In addition, upon the occurrence of a Change of Control, the Company may redeem any or all of the Series A Preferred Shares for cash within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of Operating Partnership units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

The Company’s Board of Trustees declared the following preferred stock dividends during 2019 and 2018:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2019
April 30	June 28	July 15	$	0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

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The Company has announced that the Board of Trustees does not currently expect to declare additional dividends on the Company’s Class A and Class C common shares for the remainder of 2019, based on its assessment of the Company’s investment opportunities and its expectations of taxable income for the year. The Board of Trustees will reevaluate this position at the end of 2019, if necessary, to ensure that the Company meets its distribution requirements as a REIT. The Company has also announced that the Board of Trustees expects that cash dividends for the Company’s preferred shares will continue to be paid each quarter.

Note 13 – Earnings per Share

The table below provides a reconciliation of net income (loss) and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders, as they do not have economic rights.

(in thousands except per share amounts)	Three Months Ended March 31,
	2019			2018
Numerator
Net loss (income)	$	(10,894	)		16,201
Net income (loss) attributable to non-controlling interests		3,927			(5,873	)
Preferred dividends		(1,225	)		(1,228	)
Net income (loss) attributable to common shareholders	$	(8,192	)	$	9,100
Earnings allocated to unvested participating securities		—			(22	)
Net income (loss) available to common shareholders - Basic and diluted	$	(8,192	)	$	9,078
Denominator
Weighted average Class A common shares outstanding		35,671			33,673
Weighted average Class C common shares outstanding		—			1,741
Weighted average Class A and Class C common shares outstanding - Basic		35,671			35,414
Restricted shares and share units		—			87
Weighted average Class A and Class C common shares outstanding - Diluted		35,671			35,501
Net income (loss) per share attributable to Class A and Class C common    shareholders - Basic	$	(0.23	)	$	0.26
Net income (loss) per share attributable to Class A and Class C common    shareholders - Diluted	$	(0.23	)	$	0.26

No adjustments were made to the numerator for the three months ended March 31, 2019 because the Company generated a net loss.  During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

No adjustments were made to the denominator for the three months ended March 31, 2019 because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of the Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share.

As of March 31, 2019, and December 31, 2018, there were 350,240 and 403,129 shares, respectively, of non-vested restricted shares and share units outstanding.

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Note 14 – Share Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the "Awards"). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares and Share Units

Pursuant to the Plan, the Company has periodically made grants of restricted shares or share units. The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted shares and share units vest in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that do not vest are forfeited. Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest.  Dividends on restricted shares and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares.

The following table summarizes restricted share activity for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57
Restricted shares vested		(52,390	)		42.25
Restricted shares forfeited		(499	)		36.17
Unvested restricted shares at end of period		350,240			41.48

The Company recognized $1.5 million and $0.9 million in compensation expense related to the restricted shares for the three months ended March 31, 2019 and March 31, 2018, respectively.Such expenses are included in general and administrative expenses on the Company's condensed consolidated statements of operations.  

As of March 31, 2019, there were approximately $6.6 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 1.6 years. As of March 31, 2018, there were approximately $6.8 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.0 years.

Note 15 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and accrued expenses	$	24,013	$	28,065
Accrued development expenditures		17,438		26,180
Dividends and distributions payable		15,668		15,758
Below-market leases		11,947		12,281
Accrued real estate taxes		10,760		14,108
Environmental reserve		9,477		9,477
Lease Liability		8,368		—
Unearned tenant reimbursements		7,530		10,975
Prepaid rental income		6,773		4,021
Accrued interest		4,978		4,978
Deferred maintenance		1,722		1,722
Total accounts payable, accrued expenses and    other liabilities	$	118,674	$	127,565

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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,” “will,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q.  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, 2018.  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 of this Quarterly Report on Form 10-Q.  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 of this Quarterly Report on Form 10-Q.  The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of this Quarterly Report.

Overview

We are principally engaged in the acquisition, ownership, development, redevelopment, management, and leasing of diversified retail real estate throughout the United States.  As of March 31, 2019, the Company’s portfolio consisted of interests in 225 properties totaling approximately 35.6 million square feet of gross leasable area, including 198 wholly owned properties totaling approximately 30.8 million square feet of GLA across 46 states and Puerto Rico, and interests in 27 joint venture properties totaling approximately 4.8 million square feet of GLA across 13 states.

We have historically generated revenues primarily by leasing our properties to tenants, including both Sears and diversified, non-Sears tenants, who operate retail stores (and potentially other uses) in the leased premises.

Our primary objective is to create value for our shareholders through the re-leasing and redevelopment of the majority of our Wholly Owned Properties and JV Properties.  In doing so, we expect to meaningfully grow NOI and diversify our tenant base while transforming our portfolio from one with a single-tenant orientation to one comprised predominately of first-class, multi-tenant shopping centers and larger-scale, mixed-use properties.  In order to achieve our objective, we intend to execute the following strategies:

• Convert single-tenant buildings into multi-tenant properties at meaningfully higher rents

• Maximize value of vast land holdings through retail and mixed-use densification;

• Leverage existing and future joint venture relationships with leading landlords and financial partners; and

• Maintain a flexible capital structure to support value creation activities.

As of March 31, 2019, the Company leased space at 51 Wholly Owned Properties to Holdco pursuant to the Holdco Master Lease and space at 19 JV Properties continued to be leased to Sears Holdings pursuant to the Original JV Master Leases.

The Holdco Master Lease and Original JV Master Leases contain provisions that help facilitate the redevelopment of our properties and the diversification of our tenant base. The Holdco Master Lease provides us with the right to recapture all or some of the space occupied by Holdco at each of the Wholly Owned Properties included in the lease (subject to certain exceptions and limitations).  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, and all outparcels or outlots and certain portions of parking areas and common areas.  Upon exercise of this recapture right, we generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears space, if any, and can reconfigure and rent the recaptured space to diversified, non-Sears tenants at potentially superior terms.  

As of March 31, 2019, under the Original Master Lease, we had recaptured space at 70 properties, including 17 properties at which we had recaptured portions of the occupied space, 40 properties at which we had recaptured 100% of the occupied space, and 13 properties at which we had recaptured only automotive care centers or outparcels.

With respect to the JV Properties, the Original JV Master Leases provide for similar recapture rights as the Original Master Lease governing the Company’s Wholly Owned Properties.

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On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Codewith the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).  On February 11, 2019, Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., completed the acquisition of an approximately 425-store retail footprint and other assets and component businesses of Sears Holdings on a going-concern basis (“Holdco Acquisition”).  In connection with the Holdco Acquisition, Holdco acquired certain designation rights with respect to certain executory contracts and leases of Sears Holdings, including the Original Master Lease.  On February 28, 2019, the Company and certain affiliates of Holdco executed a master lease with respect to 51 Acquired Properties.   The Holdco Master Lease became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.  The Company has analyzed this transaction and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification under ASC 842.

As of March 31, 2019, a substantial majority of the space at the JV Properties was leased to Sears Holdings under the Original JV Master Leases. As of March 31, 2019, none of the Original JV Master Leases where Sears Holdings is the principal tenant have been assumed or rejected. There can be no assurance that any such leases will not be assumed or rejected, or that Sears Holdings will continue to perform its obligations under the existing JV Master Leases to which it is a party.

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco.  Mr. Lampert is also the Chairman of Seritage and the Chairman of the Board of each of the tenant entities that is a party to the Holdco Master Lease.

Joint Ventures and Asset Sales

During the three months ended March 31, 2019, the Company contributed its property in Cockeysville, MD into a new joint venture at an aggregate valuation of $18.7 million. During the year ended December 31, 2018, the Company contributed its assets in Santa Monica (CA), La Jolla (CA) and West Hartford (CT) into three new joint ventures with institutional capital partners representing an aggregate transaction value of $362 million.

During the three months ended March 31, 2019, the Company also sold seven properties totaling approximately 639,000 square feet across multiple transactions representing an aggregate transaction value of $29.5 million, or $46 PSF. These properties were generally located in smaller markets and six of the properties were vacant at the time of sale.  During the year ended December 31, 2018, the Company also sold 21 properties totaling 2.1 million square feet across multiple transactions representing an aggregate transaction value of $114.3 million. These properties were generally located in smaller markets and 11 of the properties had been vacated by Sears Holdings prior to the time of sale.

Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties. This revenue generally includes fixed base rents and recoveries of expenses that we have incurred and that we pass through to the individual tenants, in each case as provided in the respective leases.

Our primary cash expenses consist of our property operating expenses, general and administrative expenses, interest expense, and construction and development related costs.  Property operating expenses include: real estate taxes, repairs and maintenance, management expenses, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense is primarily on our mortgage loans payable.  In addition, we incur substantial non-cash charges for depreciation and amortization on our properties and related intangible assets and liabilities resulting from the Transaction.

Rental Income

For the three months ended March 31, 2019, the Company recognized total rental income of $43.6 million as compared to $53.8 million for the three months ended March 31, 2018.  The $10.2 million decrease was driven primarily by (i) reduced rental income under the Original Master Lease and Holdco Master Lease of $10.2 million, (ii) reduced reimbursements of $5.2 million, and (iii) lower termination fee income of $0.2 million, offset by (i) increased third-party rental income of $5.4 million and increased straight-line rent of $0.8 million.

Rental income attributable to Sears Holdings and Holdco was $20.7 million (excluding straight-line rental income of less than $0.5 million), or 47.5% of total rental income earned in the period.  For the prior year period, the comparable rental income attributable to Sears Holding was $35.8 million, or approximately 66.5% of total rental income earned in the period.

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Rental income attributable to diversified, non-Sears tenants was $20.5 million (excluding straight-line rental income of $2.7 million), or 47.0% of total rental income earned in the period.  For the prior year period, the comparable rental income attributable to diversified, non-Sears tenantswas $15.1 million, or approximately 28.1% of total rental income earned in the period.

Straight-line rent was $3.4 million as compared to $2.5 million for the prior year period. The prior year period amount of straight-line rental income was lower primarily due to the amortization of accrued rental revenues related to the straight-line method of reporting that were deemed uncollectable as result of recapture and termination activity under the Original Master Lease.

On an annualized basis, and taking into account all signed leases, including those which have not yet commenced rental payments, rental income attributable to diversified, non-Sears tenants would have represented approximately 88.1% of total annual base rental income as of March 31, 2019.

The increase in rental income attributable to diversified, non-Sears tenants, and the reduction in rental income attributable directly to Sears, are driven by the Company’s leasing and redevelopment activity, including signing leases with new, diversified, non-Sears tenants and recapturing space from Sears.

Property Operating Expenses

The Company incurs certain property operating and real estate tax expenses.  For the three months ended March 31, 2019, the Company incurred property operating and real estate tax expenses totaling $20.4 million. For the three months ended March 31, 2018, the Company incurred property operating and real estate tax expenses totaling $18.6 million. The primary reason for the $1.8 million increase in property operating and real estate taxes was primarily due to the Company incurring utility, CAM, and real estate taxes expenses at certain properties vacated by Sears Holdings and for which Sears Holdings paid such expenses directly during the prior year period.

Depreciation and Amortization Expenses

Depreciation and amortization expenses consist of depreciation of real property, depreciation of furniture, fixtures and equipment, and amortization of certain lease intangible assets.

For the three months ended March 31, 2019, the Company incurred depreciation and amortization expenses of $26.2 million as compared to depreciation and amortization expenses of $34.7 million in the prior year period.  The decrease of $8.5 million was due primarily to (i) approximately $8.3 million of lower scheduled amortization resulting from an increase in fully-amortized lease intangibles, (ii) a reduction of $1.0 million of accelerated depreciation attributable to certain buildings that were demolished for redevelopment in 2018, and (iii) a reduction of $0.8 million in accelerated amortization attributable to certain lease intangible assets.

Accelerated amortization results from the recapture of space from, or the termination of space by, Sears Holdings.  Such recaptures and terminations are deemed lease modifications and require related lease intangibles to be amortized over the shorter of the shortened lease term or the remaining useful life of the asset.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.

For the three months ended March 31, 2019, the Company incurred general and administrative expenses of $9.8 million, including share-based compensation of $1.5 million, compared to general and administrative expenses of $7.8 million, including share-based compensation of $0.9 million, for the prior year period.  The $0.6 million increase in share-based compensation was driven primarily by the out performance of targets related to equity awards with performance-based vesting.  The Company also incurred $0.9 million of legal and advisory expenses attributable to the Sears Holdings’ bankruptcy filing.

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Gain on Sale of Real Estate

During the first quarter of 2019, the Company sold seven properties for aggregate consideration of $29.5 million and recorded gains totaling $17.7 million which is included in gain on the sale of real estate within the condensed consolidated statement of operations.

In March 2019, the Company contributed its property located in Cockeysville, MD to the Cockeysville JV and sold a 50.0% interest to a joint venture based on a contribution value of $12.5 million and pre-transaction development and other costs of approximately $6.2 million. As a result of the transaction, the Company received cash of approximately $9.3 million and recorded a gain of $3.8 million which is included in gain on sale of real estate within the condensed consolidated statements of operations for the three months ended March 31, 2019.

In March 2018, the Company also sold four former Kmart stores for $13.5 million and recorded a gain of $2.1 million which is included in gain on the sale of real estate within the condensed consolidated statements of operations.  The Company also contributed property located in Santa Monica, CA to the Mark 302 JV for a gross contribution value of $90.0 million and a gain of $38.8 million.

Interest Expense

For the three months ended March 31, 2019, the Company incurred $23.5 million of interest expense (net of amounts capitalized) as compared to interest expense of $16.4 million for the prior year period.  The increase in interest expense is driven by higher average borrowings and interest rates under the Term Loan Facility.

Liquidity and Capital Resources

Property rental income is our primary source of cash and is dependent on a number of factors, including occupancy levels and rental rates, as well as our tenants’ ability to pay rent.  Our primary uses of cash include payment of operating expenses, debt service, and reinvestment in and redevelopment of properties.  We believe that we currently have sufficient liquidity to fund such uses in the form of, as of March 31, 2019, (i) $442.6 million of unrestricted cash, and (ii) our $400 million Incremental Funding Facility (subject to compliance with specified ratios and as defined below).  We may also raise additional capital through the public or private issuance of debt securities, common or preferred equity or other instruments convertible into or exchangeable for common or preferred equity, as well as through asset sales or joint ventures.

Summary of Cash Flows

Net cash used in operating activities was $16.8 million for the three months ended March 31, 2019 compared to net cash provided by operating activities of $7.7 million for the three months ended March 31, 2018.  Significant changes in the components of net cash used and provided by operating activities include:

• In 2019, a decrease in operating cash inflows due to net reductions in rental income under the Original Master Lease and the Holdco Master Lease and an increase in unleased properties, partly offset by additional third-party rental income.

Net cash used by investing activities was $56.6 million for the three months ended March 31, 2019 compared to $25.0 million for the three months ended March 31, 2018.  Significant components of net cash used in investing activities include:

• In 2019, investments in unconsolidated joint ventures of ($9.1) million, and development of real estate and property improvements of ($85.4) million, partly offset by $37.6 million of net proceeds from the sale of real estate.

• In 2018, development of real estate and property improvements of ($86.0) million, partly offset by $60.4 million of net proceeds from the sale of real estate.

Net cash used by financing activities was $16.9 million for the three months ended March 31, 2018 compared to $87.3 million for the three months ended March 31, 2018. Significant components of net cash used in financings activities include:

• In 2019, cash distributions to common stockholders and holders of Operating Partnership units, ($14.0) million;

• In 2019, cash payments of preferred dividends, ($1.2) million;

• In 2018, repayment of mortgage loan payables, ($73.0) million;

• In 2018, cash distributions to common stockholders and holders of Operating Partnership units, ($13.9) million;

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Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of Operating Partnership units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

The timing, amount, and composition of all dividends and distributions will be made by the Company at the discretion of its Board of Trustees.  Such dividends and distributions will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants, applicable law, and other factors as the Board of Trustees of Seritage deems relevant. The Company’s Board of Trustees does not currently expect to declare additional dividends on the Company’s Class A and Class C common shares for the remainder of 2019, based on its assessment of the Company’s investment opportunities and its expectations of taxable income for the year.  The Board of Trustees will reevaluate this position at the end of 2019, if necessary, to ensure that the Company meets its distribution requirements as a REIT.

The Company’s Board of Trustees declared the following preferred stock dividends during 2019 and 2018:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2019
April 30	June 28	July 15	$	0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

Off-Balance Sheet Arrangements

The Company accounts for its investments in joint ventures that it does not have a controlling interest or is not the primary beneficiary using the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated joint ventures.  As of March 31, 2019, and December 31, 2018, we did not have any off-balance sheet financing arrangements.

Capital Expenditures

We do not currently anticipate incurring material expenses related to maintenance capital expenditures, tenant improvement costs or leasing commissions, outside of those associated with retenanting and redevelopment projects as described below.

During the three months ended March 31, 2019, we incurred maintenance capital expenditures of approximately $0.1 million that were not associated with retenanting and redevelopment projects.

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During the year ended December 31, 2018, we incurred maintenance capital expenditures of approximately $2.2 million and tenant improvement costs of $0.1 million that were not associated with retenanting and redevelopment projects.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, we disclose the nature of the contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

During the Sears Holdings bankruptcy proceedings, the Official Committee of Unsecured Creditors of Sears Holdings (the “UCC”) and others, including the Restructuring Subcommittee of the Board of Directors of Sears Holdings, alleged that the 2015 Transactions between us and Sears Holdings constituted a fraudulent conveyance, and indicated an intent to pursue litigation challenging the 2015 Transactions on that and other grounds.  The approval of the Holdco Acquisition by the Bankruptcy Court expressly preserved claims relating to the 2015 Transactions between us and Sears Holdings.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings Corporation, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD).

The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the master lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015, return of the proceeds of the transactions between Sears Holdings and Seritage, or (ii) in the alternative, payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property. The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intend to defend against them vigorously.

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, the final outcome of such ordinary course legal proceedings and claims will not have a material effect on the consolidated financial position, results of operations or liquidity of the Company.

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Retenanting and Redevelopment Projects

We are currently retenanting or redeveloping several properties primarily to convert single-tenant buildings occupied by Sears Holdings into multi-tenant properties occupied by a diversity of retailers and related concepts.  The table below provides a brief description of each of the 84 new redevelopment projects originated on the Seritage platform as of March 31, 2019.  These projects represent an estimated total investment of $1.5 billion ($1.4 billion at share), of which approximately $890 million ($835 million at share) remains to be spent.

Total Project Costs under $10 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
King of Prussia, PA	Repurpose former auto center space for Outback Steakhouse, Yard House and Escape Room		29,100	Complete
Merrillville, IN	Termination property; redevelop existing store for At Home and small shop retail		132,000	Complete
Elkhart, IN	Termination property; existing store has been released to Big R Stores		86,500	Complete
Bowie, MD	Recapture and repurpose auto center space for BJ's Brewhouse		8,200	Complete
Troy, MI	Partial recapture; redevelop existing store for At Home		100,000	Complete
Rehoboth Beach, DE	Partial recapture; redevelop existing store for andThat! and PetSmart		56,700	Complete
Henderson, NV	Termination property; redevelop existing store for At Home, Seafood City, Blink Fitness and additional retail		144,400	Complete
Cullman, AL	Termination property; redevelop existing store for Bargain Hunt, Tractor Supply and Planet Fitness		99,000	Complete
Jefferson City, MO	Termination property; redevelop existing store for Orscheln Farm and Home		96,000	Complete
Guaynabo, PR	Partial recapture; redevelop existing store for Planet Fitness, Capri and additional retail and restaurants		56,100	Complete
Westwood, TX	Termination property; site has been leased to Sonic Automotive and will be repurposed as an auto dealership		213,600	Complete
Florissant, MO	Site densification; new outparcel for Chick-fil-A		5,000	Complete
Albany, NY	Recapture and repurpose auto center space for BJ's Brewhouse, Ethan Allen and additional small shop retail		28,000	Substantially Complete
Kearney, NE	Termination property; redevelop existing store for Marshall's, PetSmart, Ross Dress for Less and Five Below		92,500	Substantially Complete
Dayton, OH	Recapture and repurpose auto center space for Outback Steakhouse and additional restaurants		14,100	Substantially Complete
St. Clair Shores, MI	100% recapture; demolish existing store and develop site for new Kroger grocery store		107,200	Delivered to Tenant(s)
New Iberia, LA	Termination property; redevelop existing store for Ross Dress for Less, Rouses Supermarkets, Hobby Lobby and small shop retail		93,100	Delivered to Tenant(s)
Hopkinsville, KY	Termination property; redevelop existing store for Bargain Hunt, Farmer's Furniture, Harbor Freight Tools and small shop retail		87,900	Delivered to Tenant(s)
Mt. Pleasant, PA	Termination property; redevelop existing store for Aldi, Big Lots and additional retail		86,300	Delivered to Tenant(s)
Gainesville, FL	Termination property; repurpose existing store as office space for Florida Clinical Practice Association / University of Florida College of Medicine		139,100	Delivered to Tenant(s)
Layton, UT	Termination property; a portion of the space has been leased to Extra Space Storage and will be repurposed as self storage; existing tenants include Vasa Fitness and small shop retail		172,100	Delivered to Tenant(s)
North Little Rock, AR	Recapture and repurpose auto center space for LongHorn Steakhouse and additional small shop retail		17,300	Underway	Q2 2019
Houston, TX	100% recapture; entered into ground lease with adjacent mall with potential to participate in future redevelopment		214,400	Underway	Q2 2019
Oklahoma City, OK	Site densification; new fitness center for Vasa Fitness		59,500	Underway	Q3 2019
Ft. Wayne, IN	Site densification (project expansion); new outparcels for BJ's Brewhouse, Chick-fil-A and Portillo's		20,100	Underway	Q4 2019
Hagerstown, MD	Recapture and repurpose auto center space for BJ's Brewhouse, Verizon and additional retail		15,400	Sold
Hampton, VA	Site densification; new outparcel for Chick-fil-A		2,200	Sold

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Total Project Costs $10 - $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Braintree, MA	100% recapture; redevelop existing store for Nordstrom Rack, Saks OFF 5th and 5.11 Tactical to join existing tenant, Ulta Beauty		90,000	Complete
Honolulu, HI	100% recapture; redevelop existing store for Longs Drugs (CVS), PetSmart and Ross Dress for Less		79,000	Complete
Anderson, SC	100% recapture (project expansion); redevelop existing store for Burlington Stores, Gold's Gym, Sportsman's Warehouse, additional retail and restaurants		111,300	Complete
Madison, WI	Partial recapture; redevelop existing store for Dave & Busters, Total Wine & More, additional retail and restaurants		75,300	Substantially Complete
Orlando, FL	100% recapture; demolish and construct new buildings for Floor & Decor, Orchard Supply Hardware, LongHorn Steakhouse, Mission BBQ, Olive Garden and additional small shop retail and restaurants		139,200	Substantially Complete
Paducah, KY	Termination property; redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail		102,300	Substantially Complete
Springfield, IL	Termination property; redevelop existing store for Burlington Stores, Binny's Beverage Depot, Marshall's, Orangetheory Fitness, Outback Steakhouse, Core Life Eatery and additional small shop retail		133,400	Substantially Complete
Thornton, CO	Termination property; redevelop existing store for Vasa Fitness and additional junior anchors		191,600	Substantially Complete
Cockeysville, MD	Partial recapture; redevelop existing store for HomeGoods, Michael's Stores, additional junior anchors and restaurants (note: contributed to Cockeysville JV in Q1 2019)		83,500	Substantially Complete
Warwick, RI	Termination property (project expansion); redevelop existing store and detached auto center for At Home, BJ's Brewhouse, Raymour & Flanigan, additional retail and restaurants		190,700	Substantially Complete
Salem, NH	Densify site with new theatre for Cinemark and recapture and repurpose auto center for restaurant space to join existing tenant Dick's Sporting Goods		71,200	Delivered to Tenant(s)
Fairfax, VA	Partial recapture; redevelop existing store and attached auto center for Dave & Busters, Lazy Dog Restaurant & Bar, additional junior anchors and restaurants		110,300	Delivered to Tenant(s)
Temecula, CA	Partial recapture; redevelop existing store and detached auto center for Round One, small shop retail and restaurants		65,100	Delivered to Tenant(s)
Hialeah, FL	100% recapture; redevelop existing store for Bed, Bath & Beyond, Ross Dress for Less and dd's Discounts to join existing tenant, Aldi		88,400	Delivered to Tenant(s)
NorthHollywood, CA	Partial recapture; redevelop existing store for Burlington Stores and Ross Dress for Less		79,800	Delivered to Tenant(s)
North Miami, FL	100% recapture; redevelop existing store for Burlington Stores, Michael's and Ross Dress for Less		124,300	Underway	Q2 2019
Canton, OH	Partial recapture; redevelop existing store for Dave & Busters and restaurants		83,900	Underway	Q2 2019
North Riverside, IL	Partial recapture; redevelop existing store and detached auto center for Blink Fitness, Round One, additional junior anchors, small shop retail and restaurants		103,900	Underway	Q2 2019
Olean, NY	Termination property (project expansion); redevelop existing store for Marshall's, Ollie's Bargain Basement and additional retail		125,700	Underway	Q2 2019
West Jordan, UT	Termination property (project expansion); redevelop existing store and attached auto center for At Home, Burlington Stores and additional retail		190,300	Underway	Q2 2019
Las Vegas, NV	Partial recapture; redevelop existing store for Round One and additional retail		78,800	Underway	Q3 2019
Roseville, MI	Termination property (project expansion); redevelop existing store for At Home, Hobby Lobby, Chick-fil-A and additional retail		369,800	Underway	Q3 2019
Warrenton, VA	Termination property; redevelop existing store for HomeGoods and retail uses		97,300	Underway	Q3 2019
Yorktown Heights, NY	Partial recapture; redevelop existing store for 24 Hour Fitness and retail uses		85,200	Underway	Q4 2019
Charleston, SC	100% recapture (project expansion); redevelop existing store and detached auto center for Burlington Stores and additional retail		126,700	Underway	Q4 2019
Chicago, IL (Kedzie)	Termination property; redevelop existing store for Ross Dress for Less, dd's Discounts, Five Below, Blink Fitness and additional retail		123,300	Underway	Q4 2019

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El Paso, TX	Termination property; redevelop existing store for Ross Dress for Less, dd's Discounts and additional retail	114,700	Underway	Q4 2019
Pensacola, FL	Termination property; redevelop existing store for BJ's Wholesale, additional retail and restaurants	134,700	Underway	Q1 2020
Fresno, CA	Partial recapture, redevelop existing store and detached auto center for Ross Dress for Less, dd's Discounts and additional retail	78,300	Q2 2019	Q1 2020
Vancouver, WA	Partial recapture; redevelop existing store for Round One, Hobby Lobby and additional retail and restaurants	72,400	Q2 2019	Q2 2020
Manchester, NH	Termination property; redevelop existing store for Dick's Sporting Goods, Dave & Busters, additional retail and restaurants	117,700	Q3 2019	Q3 2020
Merced, CA	Termination property; redevelop existing store for Burlington Stores and additional retail	92,600	Q3 2019	Q1 2021
Santa Cruz, CA	Partial recapture; redevelop existing store for TJ Maxx, HomeGoods and additional junior anchors	62,200	Sold
Saugus, MA	Partial recapture; redevelop existing store and detached auto center (note: temporarily postponed while the Company identifies a new lead tenant)	99,000	To be determined

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Total Project Costs over $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Memphis, TN	100% recapture; demolish and construct new buildings for LA Fitness, Nordstrom Rack, Ulta Beauty, Hopdoddy Burger Bar and additional junior anchors, restaurants and small shop retail		135,200	Complete
St. Petersburg, FL	100% recapture; demolish and construct new buildings for Dick's Sporting Goods, Lucky's Market, PetSmart, Five Below, Chili's Grill & Bar, Pollo Tropical, LongHorn Steakhouse, Verizon and additional small shop retail and restaurants		142,400	Complete
WestHartford, CT	100% recapture; redevelop existing store and detached auto center for buybuyBaby, Cost Plus World Market, REI, Saks OFF Fifth, other junior anchors, Shake Shack and additional small shop retail (note: contributed to West Hartford JV in Q2 2018)		147,600	Substantially Complete
Wayne, NJ	Partial recapture (project expansion); redevelop existing store and detached auto center for Cinemark, Dave & Busters and additional junior anchors and restaurants (note: contributed to GGP II JV in Q3 2017)		156,700	Delivered to Tenant(s)
Carson, CA	100% recapture (project expansion); redevelop existing store for Burlington Stores, Ross Dress for Less, Gold's Gym and additional retail		163,800	Delivered to Tenant(s)
Greendale, WI	Termination property; redevelop existing store and attached auto center for Dick's Sporting Goods, Golf Galaxy, Round One, TJ Maxx, additional retail and restaurants		223,800	Delivered to Tenant(s)
Watchung, NJ	100% recapture; demolish full-line store and detached auto center and construct new buildings for Cinemark, HomeSense, Sierra Trading Post, Ulta Beauty, Chick-fil-A, small shop retail and additional restaurants		126,700	Underway	Q2 2019
Austin, TX	100% recapture (project expansion); redevelop existing store for AMC Theatres, additional junior anchors and restaurants		177,400	Underway	Q3 2019
El Cajon, CA	100% recapture; redevelop existing store and auto center for Ashley Furniture, Bob's Discount Furniture, Burlington Stores and additional retail and restaurants; a portion of the space has been leased to Extra Space Storage and will be repurposed as self storage		242,700	Underway	Q3 2019
Anchorage, AK	100% recapture; redevelop existing store for Guitar Center, Safeway, Planet Fitness and additional retail to join current tenant, Nordstrom Rack		142,500	Underway	Q4 2019
Aventura, FL	100% recapture; demolish existing store and construct new, multi-level open air retail destination featuring a leading collection of experiential shopping, dining and entertainment concepts alongside a treelined esplanade and activated plazas		216,600	Underway	Q4 2019
East Northport, NY	Termination property; redevelop existing store and attached auto center for AMC Theatres, 24 Hour Fitness, additional junior anchors and small shop retail		179,700	Underway	Q4 2019
Reno, NV	100% recapture; redevelop existing store and auto center for Round One and additional retail		169,800	Underway	Q4 2019
San Diego, CA	100% recapture; redevelop existing store into two highly-visible, multi-level buildings with exterior facing retail space leased to Equinox Fitness and a premier mix of experiential shopping, dining, and entertainment concepts (note: contributed to UTC JV in Q2 2018)		206,000	Underway	Q4 2019
Santa Monica, CA	100% recapture; redevelop existing building into premier, mixed-use asset featuring unique, small-shop retail and creative office space (note: contributed to Mark 302 JV in Q1 2018)		96,500	Underway	Q4 2019
Tucson, AZ	100% recapture; redevelop existing store and auto center for Round One and additional retail		224,300	Underway	Q4 2019
Fairfield, CA	100% recapture (project expansion); redevelop existing store and auto center for Dave & Busters, AAA Auto Repair Center and additional retail		146,500	Underway	Q1 2020
Plantation, FL	100% recapture (project expansion); redevelop existing store and auto center for GameTime, Powerhouse Gym, Lazy Dog Restaurant & Bar, additional retail and restaurants		184,400	Underway	Q1 2020
Roseville, CA	Termination property (project expansion): redevelop existing store and auto center for Cinemark, Round One, AAA Auto Repair Center, additional retail and restaurants		147,400	Underway	Q2 2020
San Antonio, TX	Termination property (project expansion); redevelop existing store for Bed Bath & Beyond, buybuyBaby, Tru Fit, additional retail and health & wellness to complement repurposed auto center occupied by Orvis, Jared's Jeweler and Shake Shack		215,900	Q2 2019	Q2 2020
Hialeah, FL	100% recapture (project expansion); redevelop existing store and auto center for Paragon Theaters, Ulta Beauty, Five Below, Panera Bread and additional retail and restaurants		158,100	Q2 2019	Q2 2021
Orland Park, IL	100% recapture; redevelop existing store for AMC Theatres, 24 Hour Fitness, additional retail and restaurants		181,900	Q3 2019	Q4 2020
Asheville, NC	100% recapture; redevelop existing store and auto center for Alamo Drafthouse, restaurants and small shop retail		110,600	Q4 2019	Q2 2021

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Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2018 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the three months ended March 31, 2019, there were no material changes to these policies, other than the adoption of the Accounting Standards Codification Topic 842, Leases, described in Note 2 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q.

Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI, Total NOI, FFO and Company FFO which are considered non-GAAP measures.

Net Operating Income ("NOI") and Total NOI

We define NOI as income from property operations less property operating expenses.  Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's depiction of NOI may not be comparable to other REITs.  We believe NOI provides useful information regarding the Company, 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.  We believe this form of presentation offers insights into the financial performance and condition of the Company as a whole given our ownership of unconsolidated properties that are accounted for under GAAP using the equity method.  We also consider Total NOI to be a helpful supplemental measure of our 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.

Due to the adjustments noted, NOI and Total NOI should only be used as an alternative measure of the Company's financial performance.

Funds from Operations ("FFO") and Company FFO

We define FFO using the definition set forth by NAREIT, which may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO.  FFO is calculated as net income computed in accordance with GAAP, excluding gains (or losses) from property sales, real estate related depreciation and amortization, and impairment charges on depreciable real estate assets.

In November 2018, NAREIT restated its definition of FFO effective for annual periods beginning after December 15, 2018. The definition was restated to additionally exclude from net income amortization of a lessee’s right-of-use asset and gains and losses from change in control. The Company will calculate FFO under the restated definition beginning in 2019.

We consider FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry.  FFO facilitates an understanding of the operating performance of our properties between periods because it does not give effect to real estate depreciation and amortization which are calculated to allocate the cost of a property over its useful life.  Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.

The Company makes certain adjustments to FFO, which it refers to as Company FFO, to account for certain non-cash and non-comparable items, such as termination fee income, changes in fair value of interest rate cap, litigations charges, acquisition-related expenses, amortization of deferred financing costs and up-front-hiring and personnel costs, that it does not believe are representative of ongoing operating results.

Due to the adjustments noted, FFO and Company FFO should only be used as an alternative measure of the Company's financial performance.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

None of NOI, Total NOI, FFO and Company FFO 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 we deem most comparable are presented below on a comparative basis for all periods.

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The following table reconciles NOI and Total NOI to GAAP net income (loss) for the three months ended March 31, 2019 and March 31, 2018 (in thousands):

	Three Months Ended March 31,
NOI and Total NOI	2019			2018
Net (loss) income	$	(10,894	)	$	16,201
Termination fee income		—			(174	)
Management and other fee income		(282	)		—
Depreciation and amortization		26,216			34,667
General and administrative expenses		9,759			7,797
Equity in loss of unconsolidated    joint ventures		(1,222	)		2,582
Gain on sale of real estate		(21,261	)		(41,831	)
Interest and other income		(2,598	)		(680	)
Interest expense		23,454			16,419
Change in fair value of interest rate cap		—			(165	)
Provision for income taxes		(23	)		104
NOI	$	23,149		$	34,920
NOI of unconsolidated joint ventures		4,310			4,758
Straight-line rent adjustment (1)		(2,980	)		(2,568	)
Above/below market rental income/expense (1)		(201	)		(231	)
Total NOI	$	24,278		$	36,879

(1) Includes adjustments for unconsolidated joint ventures.

The following table reconciles FFO and Company FFO to GAAP net income (loss) for the for the three months ended March 31, 2019 and March 31, 2018 (in thousands):

	Three Months Ended March 31,
FFO and Company FFO	2019			2018
Net (loss) income	$	(10,894	)	$	16,201
Real estate depreciation and amortization    (consolidated properties)		25,575			34,113
Real estate depreciation and amortization    (unconsolidated joint ventures)		2,627			3,793
Gain on sale of real estate		(21,261	)		(41,831	)
Dividends on preferred shares		(1,225	)		(1,228	)
FFO attributable to common shareholders    and unitholders	$	(5,178	)	$	11,048
Termination fee income		—			(174	)
Change in fair value of interest rate cap		—			(165	)
Amortization of deferred financing costs		118			1,720
Company FFO attributable to common    shareholders and unitholders	$	(5,060	)	$	12,429
FFO per diluted common share and unit	$	(0.09	)	$	0.20
Company FFO per diluted common share and unit	$	(0.09	)	$	0.22
Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		35,671			35,501
Weighted average OP units outstanding		20,119			20,218
Weighted average common shares and    units outstanding		55,790			55,719

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Item 3. Quantitative and Qualitative Disclosure about Market Risk

Except as discussed below, there were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in our 2018 Annual Report on Form 10-K.

Interest Rate Fluctuations

As of March 31, 2019, we had $1.60 billion of consolidated debt, all of which is borrowed under our fixed-rate Term Loan Facility that is not subject to interest rate fluctuations.

Fair Value of Debt

As of March 31, 2019, the estimated fair value of our debt was $1.60 billion.  The estimated fair value of our debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date.

Changes in Internal Controls.

There were no changes in our internal control over financial reporting that occurred during the period ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is incorporated by reference to Note 9 of the condensed consolidated financial statements included herein.

Item 1A. Risk Factors

Information regarding risk factors appears in our 2018 Annual Report on Form 10-K in Part I, Item 1A. Risk Factors.  Other than as noted, there have been no material changes from the risk factors previously disclosed in our 2018 Annual Report on Form 10-K.

Following the Sears Holdings bankruptcy, we have been named as a defendant in litigation that could adversely affect our business and financial condition, divert management’s attention from our business, and subject us to significant liabilities.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, plaintiffs Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York naming us and certain of our affiliates, as well as affiliates of ESL and Sears Holdings, as defendants. The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings.  The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings.  The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid.  The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of the proceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.  

A court could deem aspects of the transactions with Sears Holdings (such as the acquisition of properties from Sears Holdings) to be a fraudulent conveyance. Fraudulent conveyances include transfers made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors, or transfers made or obligations incurred in exchange for less than reasonably equivalent value when the debtor was, or was rendered, insolvent, inadequately capitalized or unable to pay its debts as they become due. To remedy a fraudulent conveyance, a court could void the challenged transfer or obligation, requiring us to return consideration that we received, or impose substantial liabilities upon us for the benefit of unpaid creditors of the debtor that made the fraudulent conveyance, which could adversely affect our financial condition and our results of operations. Among other things, the court could require our shareholders to return to Sears Holdings or its creditors some or all of the securities issued in the distribution. Whether a transaction is a fraudulent conveyance may vary depending upon, among other things, the jurisdiction whose law is being applied.

Although we believe that the claims against us in the Litigation are without merit and intend to defend against them vigorously, we are not able to predict the ultimate outcome of the Litigation, the magnitude of any potential losses or the effect such litigation may have on us or our operations. It is possible that the Litigation could cause us to incur substantial costs and that they could be resolved adversely to us, result in substantial damages or other forms of relief, result in or be connected to additional claims, and divert management’s attention and resources, any of which could harm our business. Protracted litigation, including any adverse outcomes, may have an adverse impact on our business, results of operations or financial condition and could subject us to adverse publicity and require us to incur significant legal fees.  Please see Note 9 – Commitments and Contingencies – in this Quarterly Report on Form 10-Q for additional information regarding the Litigation.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description	SEC Document Reference
3.1	Amended and Restated Bylaws, as amended as of March 12, 2019	Filed herewith.
10.1	Holdco Master Lease by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Transform SR Operations LLC and Transform KM Operations LLC, dated as of February 28, 2019	Incorporated by reference to Exhibit 10.1 to Seritage Growth Properties’ Current Report on Form 8-K (File No. 001-37420) filed with the SEC on March 15, 2019
10.2	Side Letter to Holdco Master Lease, by and among Seritage KMT Finance LLC, Seritage SRC Finance LLC, Transform SR Operations LLC and Transform KM Operations LLC, dated as of February 28, 2019 *	Incorporated by reference to Exhibit 10.2 to Seritage Growth Properties’ Current Report on Form 8-K (File No. 001-37420) filed with the SEC on March 15, 2019
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Filed herewith.
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Filed herewith.
101.INS	XBRL Instance Document	Filed herewith.
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.

* Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

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SIGNATURES

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 thereunto duly authorized.

	SERITAGE GROWTH PROPERTIES
Dated: May 3, 2019	/s/ Benjamin Schall
	By:	Benjamin Schall
	President and Chief Executive Officer
Dated: May 3, 2019	/s/ Brian Dickman
	By:	Brian Dickman
	Executive Vice President and Chief Financial Officer

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED BYLAWS

ARTICLE I

OFFICES

                        Section 1.        PRINCIPAL OFFICE.  The principal office of the Trust in the State of Maryland shall be located at such place as the Board of Trustees may designate.

                         Section 2.        ADDITIONAL OFFICES.  The Trust may have additional offices, including a principal executive office, at such places as the Board of Trustees may from time to time determine or the business of the Trust may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

                        Section 1.        PLACE.  All meetings of shareholders shall be held at the principal executive office of the Trust or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.

                        Section 2.        ANNUAL MEETING.  An annual meeting of shareholders for the election of trustees and the transaction of any business within the powers of the Trust shall be held on the date and at the time and place set by the Board of Trustees.

                        Section 3.        SPECIAL MEETINGS.  The chairman of the board, chief executive officer, president and Board of Trustees shall have the exclusive power to call a special meeting of shareholders.  A special meeting of shareholders shall be held on the date and at the time and place set by the chairman of the board, chief executive officer, president or Board of Trustees, whoever has called the meeting.

                        Section 4.        NOTICE.  Not less than ten nor more than 90 days before each meeting of shareholders, the secretary shall give to each shareholder entitled to vote at such meeting, and to each shareholder not entitled to vote who is entitled to notice of the meeting, notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such shareholder personally, by leaving it at the shareholder’s residence or usual place of business, by electronic transmission or by any other means permitted by Maryland law.  If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the shareholder at the shareholder’s address as it appears on the records of the Trust, with postage thereon prepaid.  If transmitted electronically, such notice shall be deemed to be given when transmitted to the shareholder by an electronic transmission to any address or number of the shareholder at which the shareholder receives electronic transmissions.  The Trust may give a single notice to all shareholders who share an address, which single notice shall be effective as to any shareholder at such address, unless such shareholder objects to receiving such single notice or revokes a prior consent to receiving such single notice.  Failure to give notice of any meeting to one or more shareholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.  

                        Subject to Section 12(a) of this Article II, any business of the Trust may be transacted at an annual meeting of shareholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice.  No business shall be transacted at a special meeting of shareholders except as specifically designated in the notice.  The Trust may postpone or cancel a meeting of shareholders by making a “public announcement” (as defined in Section 12(c)(3) of this Article II) of such postponement or cancellation prior to the meeting.  Notice of the date, time and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in this section.

                        Section 5.        ORGANIZATION AND CONDUCT.  Every meeting of shareholders shall be conducted by an individual appointed by the Board of Trustees to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the board or, in the case of a vacancy in the office or absence of the chairman of the board, by one of the following officers present at the meeting in the following order:  the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and, within each rank, in their order of seniority, the secretary or, in the absence of such officers, a chairman chosen by the shareholders by the vote of a majority of the votes cast by shareholders present in person or by proxy.  The secretary, or, in the case of a vacancy in the office or absence of the secretary, an assistant secretary, or, in the case of a vacancy in the office of assistant secretary or the absence of both the secretary and all assistant secretaries, an individual appointed by the Board of Trustees or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary.  In the event that the secretary presides at a meeting of shareholders, an assistant secretary or, in the absence of all assistant secretaries, an individual appointed by the Board of Trustees or the chairman of the meeting, shall record the minutes of the meeting.  The order of business and all other matters of procedure at any meeting of shareholders shall be determined by the chairman of the meeting.  The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the shareholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to shareholders of record of the Trust, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to shareholders of record of the Trust entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments; (e) determining when and for how long the polls should be opened and when the polls should be closed; (f) maintaining order and security at the meeting; (g) removing any shareholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place announced at the meeting; and (i) complying with any state and local laws and regulations concerning safety and security.  Unless otherwise determined by the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

                        Section 6.        QUORUM.  At any meeting of shareholders, the presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the Declaration of Trust of the Trust (the “Declaration of Trust”) for the vote necessary for the approval of any matter.  If such quorum is not established at any meeting of the shareholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting.  At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

                        The shareholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough shareholders to leave fewer than would be required to establish a quorum.

                        Section 7.        VOTING.At least two-thirds of the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be required to elect a trustee.  Each share entitles the holder thereto to vote for as many individuals as there are trustees to be elected and for whose election the holder is entitled to vote.  A majority of the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Declaration of Trust or Bylaws.  Unless otherwise provided by statute or by the Declaration of Trust, each outstanding share of beneficial interest, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of shareholders.  Voting on any question or in any election may be viva voce unless the chairman of the meeting shall order that voting be by ballot or otherwise.

                        Section 8.        PROXIES.  A holder of record of shares of beneficial interest of the Trust may cast votes in person or by proxy executed by the shareholder or by the shareholder’s duly authorized agent in any manner permitted by law.  Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Trust before or at the meeting.  No proxy shall be valid more than eleven months after its date, unless otherwise provided in the proxy.

                        Section 9.        VOTING OF SHARES BY CERTAIN HOLDERS.  Shares of beneficial interest of the Trust registered in the name of a corporation, limited liability company, partnership, joint venture, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, managing member, manager, general partner or trustee, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such shares pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such shares.  Any trustee or fiduciary, in such capacity, may vote shares of beneficial interest registered in such trustee’s or fiduciary’s name, either in person or by proxy.

                        Shares of beneficial interest of the Trust directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

                        The Board of Trustees may adopt by resolution a procedure by which a shareholder may certify in writing to the Trust that any shares of beneficial interest registered in the name of the shareholder are held for the account of a specified person other than the shareholder.  The resolution shall set forth the class of shareholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Trust; and any other provisions with respect to the procedure which the Board of Trustees considers necessary or desirable.  On receipt by the Trust of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the shareholder of record of the specified shares of beneficial interest in place of the shareholder who makes the certification.

                        Section 10.      INSPECTORS.  The Board of Trustees or the chairman of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting and any successor to the inspector.  Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of beneficial interest represented at the meeting in person or by proxy and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the right to vote, and (v) do such acts as are proper to fairly conduct the election or vote.  Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting.  If there is more than one inspector, the report of a majority shall be the report of the inspectors.  The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be primafacie evidence thereof.

                        Section 11.      SHAREHOLDERS’ CONSENT IN LIEU OF MEETING.  Any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting if a unanimous consent setting forth the action is given in writing or by electronic transmission by each shareholder entitled to vote on the matter and filed with the minutes of proceedings of the shareholders.

                        Section 12.      ADVANCE NOTICE OF SHAREHOLDER NOMINEES FOR TRUSTEE AND OTHER SHAREHOLDER PROPOSALS.

                        (a)  Annual Meetings of Shareholders.  (1) Nominations of individuals for election to the Board of Trustees and the proposal of other business to be considered by the shareholders may be made at an annual meeting of shareholders (i) pursuant to the Trust’s notice of meeting, (ii) by or at the direction of the Board of Trustees or (iii) by any shareholder of the Trust who was a shareholder of record both at the time of giving of notice by the shareholder as provided for in this Section 12(a) and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 12(a).

                                    (2)       For any nomination or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (iii) of paragraph (a)(1) of this Section 12, the shareholder must have given timely notice thereof in writing to the secretary of the Trust and any such other business must otherwise be a proper matter for action by the shareholders.  To be timely, a shareholder’s notice shall set forth all information required under this Section 12 and shall be delivered to the secretary at the principal executive office of the Trust not earlier than the 150^th day nor later than 5:00 p.m., Eastern Time, on the 120^th day prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting; provided, however, that, in connection with the Trust’s first annual meeting or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the shareholder to be timely, such notice must be so delivered not earlier than the 150^th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120^th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made.  The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a shareholder’s notice as described above.

                                    (3)       Such shareholder’s notice shall set forth:

                                                (i)        as to each individual whom the shareholder proposes to nominate for election or reelection as a trustee (each, a “Proposed Nominee”), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a trustee in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”);

                                                (ii)       as to any other business that the shareholder proposes to bring before the meeting, a description of such business, the shareholder’s reasons for proposing such business at the meeting and any material interest in such business of such shareholder or any Shareholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the shareholder or the Shareholder Associated Person therefrom;

                                                (iii)      as to the shareholder giving the notice, any Proposed Nominee and any Shareholder Associated Person,

                                                            (A)      the class, series and number of all shares of beneficial interest or other securities of the Trust or any affiliate thereof (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such shareholder, Proposed Nominee or Shareholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such shares or other security) in any Company Securities of any such person,

                                                            (B)       the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such shareholder, Proposed Nominee or Shareholder Associated Person,

                                                            (C)       whether and the extent to which such shareholder, Proposed Nominee or Shareholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of Company Securities for such shareholder, Proposed Nominee or Shareholder Associated Person or (II) increase or decrease the voting power of such shareholder, Proposed Nominee or Shareholder Associated Person in the Trust or any affiliate thereof disproportionately to such person’s economic interest in the Company Securities, and

                                                            (D)       any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Trust), by security holdings or otherwise, of such shareholder, Proposed Nominee or Shareholder Associated Person, in the Trust or any affiliate thereof, other than an interest arising from the ownership of Company Securities where such shareholder, Proposed Nominee or Shareholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

                                                (iv)      as to the shareholder giving the notice, any Shareholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (3) of this Section 12(a) and any Proposed Nominee,

                                                            (A)      the name and address of such shareholder, as they appear on the Trust’s share ledger, and the current name and business address, if different, of each such Shareholder Associated Person and any Proposed Nominee, and

                                                            (B)       the investment strategy or objective, if any, of such shareholder and each such Shareholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such shareholder and each such Shareholder Associated Person;

                                                (v) the name and address of any person who contacted or was contacted by the shareholder giving the notice or any Shareholder Associated Person about the Proposed Nominee or other business proposal prior to the date of such shareholder’s notice; and

                                                (vi) to the extent known by the shareholder giving the notice, the name and address of any other shareholder supporting the Proposed Nominee or the proposal of other business on the date of such shareholder’s notice.

                                    (4)       Such shareholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a written undertaking executed by the Proposed Nominee (i) that such Proposed Nominee (a) is not, and will not become, a party to any agreement, arrangement or understanding with any person or entity other than the Trust in connection with service or action as a trustee that has not been disclosed to the Trust and (b) will serve as a trustee of the Trust if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Trust, upon request, to the shareholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a trustee in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange on which any securities of the Trust are listed or over-the-counter market on which any securities of the Trust are traded).

                                    (5)       Notwithstanding anything in this subsection (a) of this Section 12 to the contrary, in the event that the number of trustees to be elected to the Board of Trustees is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting, a shareholder’s notice required by this Section 12(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Trust not later than 5:00 p.m., Eastern Time, on the tenth day following the day on which such public announcement is first made by the Trust.

                                    (6)       For purposes of this Section 12, “Shareholder Associated Person” of any shareholder shall mean (i) any person acting in concert with such shareholder, (ii) any beneficial owner of shares of beneficial interest of the Trust owned of record or beneficially by such shareholder (other than a shareholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such shareholder or Shareholder Associated Person.

                        (b)       Special Meetings of Shareholders.  Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Trust’s notice of meeting.  Nominations of individuals for election to the Board of Trustees may be made at a special meeting of shareholders at which trustees are to be elected only (i) by or at the direction of the Board of Trustees or(ii) provided that the special meeting has been called in accordance with Section 3 of this Article II for the purpose of electing trustees, by any shareholder of the Trust who is a shareholder of record both at the time of giving of notice provided for in this Section 12 and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 12.  In the event the Trust calls a special meeting of shareholders for the purpose of electing one or more individuals to the Board of Trustees, any shareholder may nominate an individual or individuals (as the case may be) for election as a trustee as specified in the Trust’s notice of meeting, if the shareholder’s notice, containing the information required by paragraphs (a)(3) and (4) of this Section 12 is delivered to the secretary at the principal executive office of the Trust not earlier than the 120^th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of the 90^th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Trustees to be elected at such meeting.  The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a shareholder’s notice as described above.

                         (c)        General.  (1)  If information submitted pursuant to this Section 12 by any shareholder proposing a nominee for election as a trustee or any proposal for other business at a meeting of shareholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 12.  Any such shareholder shall notify the Trust of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information.  Upon written request by the secretary or the Board of Trustees, any such shareholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Trustees or any authorized officer of the Trust, to demonstrate the accuracy of any information submitted by the shareholder pursuant to this Section 12 and (B) a written update of any information (including, if requested by the Trust, written confirmation by such shareholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the shareholder pursuant to this Section 12 as of an earlier date.  If a shareholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 12.

                                    (2)       Only such individuals who are nominated in accordance with this Section 12 shall be eligible for election by shareholders as trustees, and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with this Section 12.  The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 12.

                                    (3)       For purposes of this Section 12, “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time.  “Public announcement” shall mean disclosure (A) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (B) in a document publicly filed by the Trust with the Securities and Exchange Commission pursuant to the Exchange Act.

(4)Notwithstanding the foregoing provisions of this Section 12, a shareholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 12.  Nothing in this Section 12 shall be deemed to affect any right of a shareholder to request inclusion of a proposal in, or the right of the Trust to omit a proposal from, any proxy statement filed by the Trust with the Securities and Exchange Commission pursuant to Rule 14a‑8 (or any successor provision) under the Exchange Act.  Nothing in this Section 12 shall require disclosure of revocable proxies received by the shareholder or Shareholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such shareholder or Shareholder Associated Person under Section 14(a) of the Exchange Act.

                                    (5)       For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York are authorized or obligated by law or executive order to close.

                        Section 13.      CONTROL SHARE ACQUISITION ACT.  Notwithstanding any other provision of the Declaration of Trust or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (the “MGCL”) (or any successor statute) shall not apply to any acquisition by any person of shares of beneficial interest of the Trust.  This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

ARTICLE III

TRUSTEES

                        Section 1.        GENERAL POWERS.  The business and affairs of the Trust shall be managed under the direction of its Board of Trustees.

                        Section 2.        NUMBER, TENURE, QUALIFICATIONSAND RESIGNATION.  At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Trustees may establish, increase or decrease the number of trustees, provided that the number thereof shall never be more than 15, and further provided that the tenure of office of a trustee shall not be affected by any decrease in the number of trustees.  In case of failure to elect trustees at the designated time, the trustees holding over shall continue to serve as trustees with full rights and powers until their successors are elected and qualify.  Any trustee of the Trust may resign at any time by delivering his or her resignation to the Board of Trustees, the chairman of the board or the secretary.  Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation.  The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.  

                        Section 3.        ANNUAL AND REGULAR MEETINGS.  An annual meeting of the Board of Trustees shall be held immediately after and at the same place as the annual meeting of shareholders, no notice other than this Bylaw being necessary.  In the event that such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Trustees.  The Board of Trustees may provide, by resolution, the time and place of regular meetings of the Board of Trustees without other notice than such resolution.

                        Section 4.        SPECIAL MEETINGS.  Special meetings of the Board of Trustees may be called by or at the request of the chairman of the board, the chief executive officer, the president or a majority of the trustees then in office.  The person or persons authorized to call special meetings of the Board of Trustees may fix the time and place of any special meeting of the Board of Trustees called by them.  The Board of Trustees may provide, by resolution, the time and place of special meetings of the Board of Trustees without other notice than such resolution.

                        Section 5.        NOTICE.  Notice of any special meeting of the Board of Trustees shall be delivered personally or by telephone, electronic mail, facsimile transmission, courier or United States mail to each trustee at his or her business or residence address.  Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting.  Notice by United States mail shall be given at least three days prior to the meeting.  Notice by courier shall be given at least two days prior to the meeting.  Telephone notice shall be deemed to be given when the trustee or his or her agent is personally given such notice in a telephone call to which the trustee or his or her agent is a party.  Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Trust by the trustee.  Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Trust by the trustee and receipt of a completed answer‑back indicating receipt.  Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid.  Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed.  Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Trustees need be stated in the notice, unless specifically required by statute or these Bylaws.

                        Section 6.        QUORUM.  A majority of the trustees shall constitute a quorum for transaction of business at any meeting of the Board of Trustees, provided that, if less than a majority of such trustees is present at such meeting, a majority of the trustees present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Declaration of Trust or these Bylaws, the vote of a majority or other percentage of a particular group of trustees is required for action, a quorum must also include a majority or such other percentage of such group.

                        The trustees present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough trustees to leave fewer than required to establish a quorum.

                        Section 7.        VOTING.  The action of a majority of the trustees present at a meeting at which a quorum is present shall be the action of the Board of Trustees, unless the concurrence of a greater proportion is required for such action by applicable law, the Declaration of Trust or these Bylaws.  If enough trustees have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of trustees necessary to constitute a quorum at such meeting shall be the action of the Board of Trustees, unless the concurrence of a greater proportion is required for such action by applicable law, the Declaration of Trust or these Bylaws.

                        Section 8.        ORGANIZATION.  At each meeting of the Board of Trustees, the chairman of the board or, in the absence of the chairman, the vice chair­man of the board, if any, shall act as chairman of the meeting.  In the absence of both the chairman and vice chairman of the board, the chief executive officer or, in the absence of the chief executive officer, the presi­dent or, in the absence of the

presi­dent, a trustee chosen by a majority of the trustees present, shall act as chair­man of the meeting.  The secretary or, in his or her ab­sence, an assis­tant secretary of the Trust or, in the absence of the secre­tary and all assistant secretar­ies, an individual ap­pointed by the chairman of the meeting, shall act as secre­tary of the meeting.

                        Section 9.        TELEPHONE MEETINGS.  Trustees may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time.  Participation in a meeting by these means shall constitute presence in person at the meeting.

                        Section 10.      CONSENT BY TRUSTEES WITHOUT A MEETING.  Any action required or permitted to be taken at any meeting of the Board of Trustees may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each trustee and is filed with the minutes of proceedings of the Board of Trustees.

                        Section 11.      VACANCIES.  If for any reason any or all the trustees cease to be trustees, such event shall not terminate the Trust or affect these Bylaws or the powers of the remaining trustees hereunder.  Except as may be provided by the Board of Trustees in setting the terms of any class or series of preferred shares of beneficial interest, any vacancy on the Board of Trustees may be filled only by a majority of the remaining trustees, even if the remaining trustees do not constitute a quorum.  Any trustee elected to fill a vacancy shall serve for the remainder of the full term of the trusteeship in which the vacancy occurred and until a successor is elected and qualifies.

                        Section 12.      COMPENSATION.  Trustees shall not receive any stated salary for their services as trustees but, by resolution of the Board of Trustees, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Trust and for any service or activity they performed or engaged in as trustees.  Trustees may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Trustees or any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as trustees; but nothing herein contained shall be construed to preclude any trustees from serving the Trust in any other capacity and receiving compensation therefor.

                        Section 13.      RELIANCE.  Each trustee and officer of the Trust shall, in the performance of his or her duties with respect to the Trust, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Trust whom the trustee or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the trustee or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a trustee, by a committee of the Board of Trustees on which the trustee does not serve, as to a matter within its designated authority, if the trustee reasonably believes the committee to merit confidence.  

                        Section 14.      RATIFICATION.  The Board of Trustees or the shareholders may ratify any action or inaction by the Trust or its officers to the extent that the Board of Trustees or the shareholders could have originally authorized the matter, and if so ratified, shall have the same force and effect as if originally duly authorized, and such ratification shall be binding upon the Trust and its shareholders.  Any action or inaction questioned in any shareholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a

trustee, officer or shareholder, nondisclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Trustees or by the shareholders, and such ratification shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

                        Section 15.      INTERESTED TRUSTEE TRANSACTIONS.  Section 2-419 of the MGCLshall be available for and apply to any contract or other transaction between the Trust and any of its trustees or between the Trust and any other trust, corporation, firm or other entity in which any of its trustees is a trustee or director or has a material financial interest.

                        Section 16.      CERTAIN RIGHTS OF TRUSTEES.  Any trustee or officer, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with those of or relating to the Trust.

                        Section 17.      EMERGENCY PROVISIONS.  Notwithstanding any other provision in the Declaration of Trust or these Bylaws, this Section 17 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Trustees under Article III of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Boardof Trustees, (i) a meeting of the Board of Trustees or a committee thereof may be called by any trustee or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Trustees during such an Emergency may be given less than 24 hours prior to the meeting to as many trustees and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of trustees necessary to constitute a quorum shall be one-third of the entire Board of Trustees.

ARTICLE IV

COMMITTEES

                        Section 1.        NUMBER, TENURE AND QUALIFICATIONS.  The Board of Trustees may appoint from among its members an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and one or more other committees, composed of one or more trustees, to serve at the pleasure of the Board of Trustees.  In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another trustee to act in the place of such absent member, unless the Board of Trustees shall otherwise provide.  

                        Section 2.        POWERS.  The Board of Trustees may delegate to committees appointed under Section 1 of this Article IV any of the powers of the Board of Trustees.  Except as may be otherwise provided by the Board of Trustees, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more trustees, as the committee deems appropriate in its sole and absolute discretion.

                        Section 3.        MEETINGS.  Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Trustees.  A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee.  The act of a majority of the committee members present at a meeting shall be the act of such committee.  The

Board of Trustees may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board of Trustees shall otherwise provide.  

                        Section 4.        TELEPHONE MEETINGS.  Members of a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time.  Participation in a meeting by these means shall constitute presence in person at the meeting.

                        Section 5.        CONSENT BY COMMITTEES WITHOUT A MEETING.  Any action required or permitted to be taken at any meeting of a committee of the Board of Trustees may be taken without a meeting, if a consent to such action is given in writing or by electronic transmission by each member of the committee and is filed with the minutes of proceedings of such committee.

                        Section 6.        VACANCIES.  Subject to the provisions hereof, the Board of Trustees shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

ARTICLE V

OFFICERS

                        Section 1.        GENERAL PROVISIONS.  The officers of the Trust shall includea president, a secretary and a treasurer and may include a chairman of the board, a vice chairman of the board, a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, one or more assistant secretaries and one or more assistant treasurers.  In addition, the Board of Trustees may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable.  The officers of the Trust shall be elected annually by the Board of Trustees, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers.  Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided.  Any two or more offices except president and vice president may be held by the same person.  Election of an officer or agent shall not of itself create contract rights between the Trust and such officer or agent.

                        Section 2.        REMOVAL AND RESIGNATION.  Any officer or agent of the Trust may be removed, with or without cause, by the Board of Trustees if in its judgment the best interests of the Trust would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.  Any officer of the Trust may resign at any time by delivering his or her resignation to the Board of Trustees, the chairman of the board, the chief executive officer, the president or the secretary.  Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation.  The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.  Such resignation shall be without prejudice to the contract rights, if any, of the Trust.

                        Section 3.        VACANCIES.  A vacancy in any office may be filled by the Board of Trustees for the balance of the term.

                        Section 4.        CHAIRMAN OF THE BOARD.  The Board of Trustees may designate from among its members a chairman of the board, who shall not, solely by reason of these Bylaws, be an officer of the Trust.  The Board of Trustees may designate the chairman of the board as an executive or non-executive chairman.  The chairman of the board shall preside over the meetings of the Board of Trustees.  The chairman of the board shall perform such other duties as may be assigned to him or her by these Bylaws or the Board of Trustees.

                        Section 5.        CHIEF EXECUTIVE OFFICER.  The Board of Trustees may designate a chief executive officer.  In the absence of such designation, the chairman of the board shall be the chief executive officer of the Trust.  The chief executive officer shall have general responsibility for implementation of the policies of the Trust, as determined by the Board of Trustees, and for the management of the business and affairs of the Trust.  He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or agent of the Trust or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Trustees from time to time.

                        Section 6.        CHIEF OPERATING OFFICER.  The Board of Trustees may designate a chief operating officer.  The chief operating officer shall have the responsibilities and duties as determined by the Board of Trustees or the chief executive officer.

                        Section 7.        CHIEF FINANCIAL OFFICER.  The Board of Trustees may designate a chief financial officer.  The chief financial officer shall have the responsibilities and duties as determined by the Board of Trustees or the chief executive officer.

                        Section 8.        PRESIDENT.  In the absence of a chief executive officer, the president shall in general supervise and control all of the business and affairs of the Trust.  In the absence of a designation of a chief operating officer by the Board of Trustees, the president shall be the chief operating officer.  He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or agent of the Trust or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Trustees from time to time.

                        Section 9.        VICE PRESIDENTS.  In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event that there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the chief executive officer, the president or the Board of Trustees.  The Board of Trustees may designate one or more vice presidents as executive vice president, senior vice president, or vice president for particular areas of responsibility.

                        Section 10.      SECRETARY.  The secretary shall (a) keep the minutes of the proceedings of the shareholders, the Board of Trustees and committees of the Board of Trustees in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the trust records and of the seal of the Trust; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) have general charge of the share transfer books of the Trust; and (f) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Trustees.

                        Section 11.      TREASURER.  The treasurer shall have the custody of the funds and securities of the Trust, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Trust, shall deposit all moneys and other valuable effects in the name and to the credit of the Trust in such depositories as may be designated by the Board of Trustees and in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Trustees.  In the absence of a designation of a chief financial officer by the Board of Trustees, the treasurer shall be the chief financial officer of the Trust.

                        The treasurer shall disburse the funds of the Trust as may be ordered by the Board of Trustees, taking proper vouchers for such disbursements, and shall render to the president and Board of Trustees, at the regular meetings of the Board of Trustees or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Trust.

                        Section 12.      ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.  The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the chief executive officer, the president or the Board of Trustees.

                        Section 13.      COMPENSATION.  The compensation of the officers shall be fixed from time to time by or under the authority of the Board of Trustees and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a trustee.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

                        Section 1.        CONTRACTS.  The Board of Trustees may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Trust and such authority may be general or confined to specific instances.  Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Trust when duly authorized or ratified by action of the Board of Trustees and executed by an authorized person.

                        Section 2.        CHECKS AND DRAFTS.  All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Trust shall be signed by such officer or agent of the Trust in such manner as shall from time to time be determined by the Board of Trustees.

                        Section 3.        DEPOSITS.  All funds of the Trust not otherwise employed shall be deposited or invested from time to time to the credit of the Trust as the Board of Trustees, the chief executive officer, the president, the chief financial officer, or any other officer designated by the Board of Trustees may determine.

ARTICLE VII

SHARES

                        Section 1.        CERTIFICATES.  Except as may be otherwise provided by the Board of Trustees, shareholders of the Trust are not entitled to certificates evidencing the shares of beneficial interest held by them. In the event that the Trustissues shares of beneficial interest evidenced by certificates, such certificates shall be in such form as prescribed by the Board of Trustees or a duly authorized officer, shall contain the statements and information required by the Maryland REIT Law (the “MRL”) and shall be signed by the officers of the Trust in any manner permitted by the MRL.  In the event that the Trust issues shares of beneficial interest without certificates, to the extent then required by the MRL, the Trust shall provide to the record holders of such shares a written statement of the information required by the MRL to be included on share certificates.  There shall be no differences in the rights and obligations of shareholders based on whether or not their shares are evidenced by certificates.  

                        Section 2.        TRANSFERS.  All transfers of shares shall be made on the books of the Trust, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Trustees or any officer of the Trust may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed.  The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Trustees that such shares shall no longer be evidenced by certificates.  Upon the transfer of any uncertificated shares, the Trust shall provide to the record holders of such shares, to the extent then required by the MRL, a written statement of the information required by the MRL to be included on share certificates.

                        The Trust shall be entitled to treat the holder of record of any share of beneficial interest as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

                        Notwithstanding the foregoing, transfers of shares of any class or series of beneficial interest will be subject in all respects to the Declaration of Trust and all of the terms and conditions contained therein.

                        Section 3.        REPLACEMENT CERTIFICATE.  Any officer of the Trust may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Trust alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such shareholder and the Board of Trustees has determined that such certificates may be issued.  Unless otherwise determined by an officer of the Trust, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Trust a bond in such sums as it may direct as indemnity against any claim that may be made against the Trust.

                        Section 4.        FIXING OF RECORD DATE.  The Board of Trustees may set, in advance, a record date for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or determining shareholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of shareholders for any other proper purpose.  Such

date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of shareholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of shareholders of record is to be held or taken.

                        When a record date for the determination of shareholders entitled to notice of and to vote at any meeting of shareholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

                        Section 5.        SHARE LEDGER.  The Trust shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each shareholder and the number of shares of each class held by such shareholder.  

                        Section 6.        FRACTIONAL SHARES; ISSUANCE OF UNITS.  The Board of Trustees may authorize the Trust to issue fractional shares or authorize the issuance of scrip, all on such terms and under such conditions as it may determine.  Notwithstanding any other provision of the Declaration of Trust or these Bylaws, the Board of Trustees may authorize the issuance of units consisting of different securities of the Trust.  Any security issued in a unit shall have the same characteristics as any identical securities issued by the Trust, except that the Board of Trustees may provide that for a specified period securities of the Trust issued in such unit may be transferred on the books of the Trust only in such unit.

ARTICLE VIII

ACCOUNTING YEAR

                        The Board of Trustees shall have the power, from time to time, to fix the fiscal year of the Trust by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

                        Section 1.        AUTHORIZATION.  Dividends and other distributions upon the shares of beneficial interest of the Trust may be authorized by the Board of Trustees, subject to the provisions of law and the Declaration of Trust.  Dividends and other distributions may be paid in cash, property or shares of beneficial interest of the Trust, subject to the provisions of law and the Declaration of Trust.

                        Section 2.        CONTINGENCIES.  Before payment of any dividends or other distributions, there may be set aside out of any assets of the Trust available for dividends or other distributions such sum or sums as the Board of Trustees may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends, for repairing or maintaining any property of the Trust or for such other purpose as the Board of Trustees shall determine, and the Board of Trustees may modify or abolish any such reserve.

ARTICLE X

INVESTMENT POLICY

                        Subject to the provisions of the Declaration of Trust, the Board of Trustees may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Trust as it shall deem appropriate in its sole discretion.

ARTICLE XI

SEAL

                        Section 1.        SEAL.  The Board of Trustees may authorize the adoption of a seal by the Trust.  The seal shall contain the name of the Trust and the year of its formation and the words “Formed Maryland.”  The Board of Trustees may authorize one or more duplicate seals and provide for the custody thereof.

                        Section 2.        AFFIXING SEAL.  Whenever the Trust is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Trust.

ARTICLE XII

INDEMNIFICATION AND ADVANCE OF EXPENSES

                         Section 1.         RIGHT TO INDEMNIFICATION.  To the maximum extent permitted by Maryland law in effect from time to time, the Trust shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former trustee or officer of the Trust and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity or (b) any individual who, while a trustee or officer of the Trust and at the request of the Trust, serves or has served as a trustee, director, officer, member, manager or partner of another real estate investment trust, corporation limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity.  The rights to indemnification and advancement of expenses provided by the Declaration of Trust and these Bylaws shall vest immediately upon election of a trustee or officer. The Trust may, with the approval of its Board of Trustees, provide such indemnification and advancement of expenses to an individual who served a predecessor of the Trust in any of the capacities described in clause (a) or (b) above and to any employee or agent of the Trust or a predecessor of the Trust.

                         Section 2.        NON‑EXCLUSIVITY OF RIGHTS.  The right to indemnification and the payment or reimbursement of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article XII shall not be exclusive of any other right which any person may be or may become entitled under any statute, resolution, insurance, provision of the Declaration of Trust, bylaw, agreement, vote of shareholders or disinterested trustees or otherwise.

Section 3.        INSURANCE.  The Trust may maintain insurance, at its expense, to protect itself and any trustee, officer, employee or agent of the Trust or another corporation, partnership, joint venture, trust, limited liability company or other enterprise against any such expense, liability or loss, whether or not the Trust would have the power to indemnify such person against such expense, liability or loss under the MRL.

                         Section 4.        AMENDMENT.  Neither the amendment nor repeal of this Article XII, nor the adoption or amendment of any other provision of the Declaration of Trust or these Bylaws inconsistent with this Article XII, shall apply to or affect in any respect the applicability of this Article XII with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

ARTICLE XIII

WAIVER OF NOTICE

                        Whenever any notice of a meeting is required to be given pursuant to the Declaration of Trust or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.  Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute.  The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

ARTICLE XIV

EXCLUSIVE FORUM FOR CERTAIN LITIGATION

                        Unless the Trust consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Trust, (b) any action asserting a claim of breach of any duty owed by any trustee or officer or other employee of the Trust to the Trust or to the shareholders of the Trust, (c) any action asserting a claim against the Trust or any trustee or officer or other employee of the Trust arising pursuant to any provision of the MGCL, MRL, the Declaration of Trust or these Bylaws, or (d) any action asserting a claim against the Trust or any trustee or officer or other employee of the Trust that is governed by the internal affairs doctrine.

ARTICLE XV

AMENDMENT OF BYLAWS

                        The Board of Trustees shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

ARTICLE XVI

MISCELLANEOUS

                        All references to the Declaration of Trust shall include all amendments and supplements thereto and any other documents filed with and accepted for record by the State Department of Assessments and Taxation related thereto.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Benjamin Schall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Benjamin Schall	Date:  May 3, 2019
Benjamin Schall
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Brian Dickman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Brian Dickman	Date:  May 3, 2019
Brian Dickman
Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Benjamin Schall, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Benjamin Schall

Benjamin Schall

President and Chief Executive Officer

May 3, 2019

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Brian Dickman, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian Dickman

Brian Dickman

Executive Vice President and Chief Financial Officer

May 3, 2019

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	SRG
Entity Registrant Name	SERITAGE GROWTH PROPERTIES
Entity Central Index Key	0001628063
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Class A Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		35,689,708
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,322,365
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment in real estate
Land	$ 682,176	$ 696,792
Buildings and improvements	912,767	900,173
Accumulated depreciation	(147,679)	(137,947)
Real Estate Investment Property, at Cost, Total	1,447,264	1,459,018
Construction in progress	327,006	292,049
Net investment in real estate	1,774,270	1,751,067
Real estate held for sale	7,510	3,094
Investment in unconsolidated joint ventures	419,528	398,577
Cash and cash equivalents	442,625	532,857
Tenant and other receivables, net	41,740	36,926
Lease intangible assets, net	101,452	123,656
Prepaid expenses, deferred expenses and other assets, net	52,700	29,899
Total assets	2,839,825	2,876,076
Liabilities
Term Loan Facility, net	1,598,171	1,598,053
Accounts payable, accrued expenses and other liabilities	118,674	127,565
Total liabilities	1,716,845	1,725,618
Commitments and contingencies (Note 9)
Shareholders' Equity
Additional paid-in capital	1,124,457	1,124,504
Accumulated deficit	(362,606)	(344,132)
Total shareholders' equity	762,249	780,770
Non-controlling interests	360,731	369,688
Total equity	1,122,980	1,150,458
Total liabilities and equity	2,839,825	2,876,076
Class A Common Shares [Member]
Shareholders' Equity
Common shares	357	357
Total equity	357	357
Class B Common Shares [Member]
Shareholders' Equity
Common shares	13	13
Total equity	13	13
Series A Preferred Shares [Member]
Shareholders' Equity
Preferred shares	28	28
Total equity	$ 28	$ 28

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Class A Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	100,000,000	100,000,000
Common shares, outstanding	35,689,708	35,667,521
Common shares, issued	35,689,708	35,667,521
Class B Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	5,000,000	5,000,000
Common shares, outstanding	1,322,365	1,322,365
Common shares, issued	1,322,365	1,322,365
Series A Preferred Shares [Member]
Common shares, outstanding	2,800,000	2,800,000
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	10,000,000	10,000,000
Preferred shares, outstanding	2,800,000	2,800,000
Preferred shares, issued	2,800,000	2,800,000
Preferred shares, liquidation preference	$ 70,000	$ 70,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUE
Rental revenue	$ 43,578	$ 53,777
Management and other fee income	$ 282
Type of Revenue [Extensible List]	us-gaap:ManagementServiceMember	us-gaap:ManagementServiceMember
Total revenue	$ 43,860	$ 53,777
EXPENSES
Property operating	10,237	7,241
Real estate taxes	10,192	11,381
Depreciation and amortization	26,216	34,667
General and administrative	9,759	7,797
Provision for doubtful accounts		61
Total expenses	56,404	61,147
Gain on sale of real estate, net	21,261	41,831
Equity in income (loss) of unconsolidated joint ventures	1,222	(2,582)
Interest and other income	2,598	680
Interest expense	(23,454)	(16,419)
Change in fair value of interest rate cap		165
(Loss) income before income taxes	(10,917)	16,305
Provision for income taxes	23	(104)
Net (loss) income	(10,894)	16,201
Net income (loss) attributable to non-controlling interests	3,927	(5,873)
Net loss (income) attributable to Seritage	(6,967)	10,328
Preferred dividends	(1,225)	(1,228)
Net (loss) income attributable to Seritage common shareholders	$ (8,192)	$ 9,100
Net (loss) income per share attributable to Seritage Class A and Class C common shareholders - Basic	$ (0.23)	$ 0.26
Net (loss) income per share attributable to Seritage Class A and Class C common shareholders - Diluted	$ (0.23)	$ 0.26
Weighted average Class A and Class C common shares outstanding - Basic	35,671	35,414
Weighted average Class A and Class C common shares outstanding - Diluted	35,671	35,501

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands	Total	Class A Common Shares [Member]	Class B Common Shares [Member]	Class C Common Shares [Member]	Series A Preferred Shares [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]
Beginning balance at Dec. 31, 2017	$ 1,320,860	$ 324	$ 13	$ 31	$ 28	$ 1,116,060	$ (229,760)	$ 434,164
Beginning balance, shares at Dec. 31, 2017		32,416,000	1,329,000	3,151,000	2,800,000
Net income (loss)	16,201						10,328	5,873
Common dividends and distributions declared	(14,046)						(8,992)	(5,054)
Preferred dividends declared	(1,228)						(1,228)
Vesting of restricted share units, shares		14,000
Share-based compensation	869					869
Preferred stock offering costs	(88)					(88)
Stock issued in conversion of securities	1	$ 28
Stock issued in conversion securities, shares		2,779,121
Stock sold in conversion of securities, shares				(2,779,000)
Stock sold in conversion of securities				$ 27
Ending balance at Mar. 31, 2018	1,322,569	$ 352	$ 13	$ 4	$ 28	1,116,841	(229,652)	434,983
Ending balance, shares at Mar. 31, 2018		35,209,000	1,329,000	372,000	2,800,000
Beginning balance at Dec. 31, 2018	1,150,458	$ 357	$ 13		$ 28	1,124,504	(344,132)	369,688
Beginning balance, shares at Dec. 31, 2018		35,667,521	1,322,365		2,800,000
Net income (loss)	(10,894)						(6,967)	(3,927)
Cumulative effect of accounting change (see Note 2)	(1,286)						(1,286)
Common dividends and distributions declared	(14,026)						(8,996)	(5,030)
Preferred dividends declared	(1,225)						(1,225)
Vesting of restricted share units, shares		(23,000)
Vesting of restricted share units	(1,613)					(1,613)
Share-based compensation	1,566					1,566
Share-based compensation, shares		45,000
Ending balance at Mar. 31, 2019	$ 1,122,980	$ 357	$ 13		$ 28	$ 1,124,457	$ (362,606)	$ 360,731
Ending balance, shares at Mar. 31, 2019		35,689,708	1,322,365		2,800,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Dividends and distributions declared, per share	$ 0.25	$ 0.25
Preferred dividends declared, per share	$ 0.4375	$ 0.4375
Class A Common Shares [Member]
Share class exchanges, common shares		2,779,121

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$ (10,894)	$ 16,201
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in (income) loss of unconsolidated joint ventures	(1,222)	2,582
Distributions from unconsolidated joint ventures	781
Gain on sale of real estate, net	(21,261)	(41,831)
Unrealized (gain) loss on interest rate cap		(165)
Share-based compensation	1,532	869
Depreciation and amortization	26,216	34,667
Amortization of deferred financing costs	118	1,720
Amortization of above and below market leases, net	(104)	(234)
Straight-line rent adjustment	(3,355)	(2,453)
Change in operating assets and liabilities
Tenants and other receivables	484	1,034
Prepaid expenses, deferred expenses and other assets	(248)	(4,229)
Accounts payable, accrued expenses and other liabilities	(8,818)	(502)
Net cash (used in) provided by operating activities	(16,771)	7,659
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated joint ventures	(9,140)	(1,616)
Distributions from unconsolidated joint ventures	389	2,110
Net proceeds from sale of real estate	37,569	60,435
Development of real estate	(85,413)	(85,983)
Net cash used in by investing activities	(56,595)	(25,054)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of mortgage loans payable		(73,034)
Payment of deferred financing costs		(363)
Purchase of shares related to stock grant recipients' tax withholdings	(1,613)
Preferred dividends paid	(1,225)
Common dividends paid	(8,998)	(8,877)
Non-controlling interests distributions paid	(5,030)	(5,055)
Net cash used in financing activities	(16,866)	(87,329)
Net decrease in cash, cash equivalents, and restricted cash	(90,232)	(104,724)
Cash, cash equivalents, and restricted cash, beginning of period	532,857	417,234
Cash, cash equivalents, and restricted cash, end of period	442,625	312,510
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	28,000	21,105
Capitalized interest	5,666	6,862
Income taxes paid	25	104
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	17,438	19,964
Common dividends and OP unit distributions declared and unpaid	14,026	14,046
Preferred dividends declared and unpaid	1,225
Decrease in real estate, net resulting from deconsolidated properties
Real estate, net	(14,656)	(58,190)
Tenants and other receivables, net	(2)
Prepaid expenses, deferred expenses and other assets, net	(84)
Accounts payable, accrued expenses and other liabilities	6
Transfer to real estate assets held for sale	4,416
Transfer of below market asset to Right of Use Asset	(11,005)
Recording of Lease Right of Use Assets	19,373
Recording of Lease Liabilities	(8,368)
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	442,625	135,091
Restricted cash	0	177,419
Cash, cash equivalents, and restricted cash, end of period	$ 442,625	$ 312,510

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Organization

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

Note 1 – Organization

Seritage Growth Properties (“Seritage” or the “Company”) was organized in Maryland on June 3, 2015.  The Company is a fully-integrated, self-administered, self-managed real estate investment trust (“REIT”) primarily engaged in the real property business through its investment in Seritage Growth Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership that was formed on April 22, 2015.  Unless the context otherwise requires, “Seritage” and the “Company” refer to Seritage, the Operating Partnership, and its subsidiaries.

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings”) effected a rights offering to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Acquired Properties”), and (ii) Sears Holdings’ 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (the “Acquired JV Properties”).  Concurrent with the acquisition, the Company leased back to Sears Holdings space at 224 of the Acquired Properties under a master lease agreement (the “Original Master Lease”) and space at all 31 Acquired JV Properties under multiple master lease agreements (the “Original JV Master Leases”).

The rights offering ended on July 2, 2015, and the Company’s Class A common shares were listed on the New York Stock Exchange (“NYSE”) on July 6, 2015.  On July 7, 2015, the Company completed the transactions with Sears Holdings and commenced operations.  The Company did not have any operations prior to the completion of the rights offering and the transactions with Sears Holdings.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).On February 11, 2019, Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc.(“ESL”), completed the acquisition of an approximately 425-store retail footprint and other assets and component businesses of Sears Holdings on a going-concern basis (the “Holdco Acquisition”).  In connection with the Holdco Acquisition, Holdco acquired certain designation rights with respect to certain executory contracts and leases of Sears Holdings, including the Original Master Lease.  On February 28, 2019, the Company and certain affiliates of Holdco executed a master lease with respect to 51 Acquired Properties (the “Holdco Master Lease”).   The Holdco Master Lease became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease. For accounting purposes, the Holdco Master Lease is treated as a modification to the Original Master Lease.

As of March 31, 2019, the Company’s portfolio consisted of interests in 225 properties totaling approximately 35.6 million square feet of gross leasable area (“GLA”), including 198 wholly owned properties totaling approximately 30.8 million square feet of GLA across 46 states and Puerto Rico (the “Wholly Owned Properties), and interests in 27 joint venture properties totaling approximately 4.8 million square feet of GLA across 13 states (the “JV Properties”).

As of March 31, 2019, the Company leased space at 51 Wholly Owned Properties to Holdco pursuant to the Holdco Master Lease and space at 19 JV Properties continued to be leased to Sears Holdings pursuant to the Original JV Master Leases.  Under the Holdco Master Lease and Original JV Master Leases, the Company has the right to recapture certain space at each property occupied by Holdco and Sears Holdings, respectively, for retenanting or redevelopment purposes.  Tenants under the Holdco Master Lease and Original JV Master Leases also have rights to terminate the lease at individual locations subject to certain parameters (see Note 5).

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, (the “Annual Report”), for the year ended December 31, 2018.  Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report.  In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report.  Operating results of three months ended March 31, 2019 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2019.  Capitalized terms used, but not defined in this quarterly report, have the same meanings as set forth in our Annual Report.

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. As of March 31, 2019, and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of March 31, 2019, the Company holds a 63.9% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  The Company has determined that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

Reclassification

Upon adoption of the new lease standard, rental recoveries for 2018 have been reclassified to rental revenues in the consolidated statements of operations to conform to the 2019 financial statement presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

The Company currently operates in a single reportable segment which includes the acquisition, ownership, development, redevelopment, management, and leasing of real estate properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process.

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved, and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

During the three months ended March 31, 2019, the Company sold interests in eight properties for net proceeds of $38.8 million and recognized gain on sale of real estate of $21.5 million.

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of March 31, 2019, two properties were classified as held for sale with assets of $7.5 million and no liabilities and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted cash represents cash deposited in escrow accounts which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.

As of March 31, 2019, the Company did not have any restricted cash. As of March 31, 2018, the Company had approximately $177.4 million of restricted cash accounts which were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.  

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions. Any receivables that are deemed to be uncollectible are recognized as a reduction to rental revenue in the Company’s consolidated statements of operations. Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental revenue.

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.  Generally, this occurs on the rent commencement date.  In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

Reimbursement of property operating expenses arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the expenses are incurred.

Management and Other Fee Income

Management and other fee income represents management, leasing, and development fees for services performed for the benefit of certain unconsolidated joint ventures and is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the condensed consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the condensed consolidated statements of operations and in other expenses in the combined condensed financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Seritage Partial Recapture Rights.  The Company generally treats the delivery of a partial recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the lease.

− The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Termination Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations would generally result in the following accounting adjustments for the terminated property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

− Termination fees required to be paid are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of vacancy.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility on July 7, 2015, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the condensed consolidated balance sheets.  The Company elected not to utilize hedge accounting, and therefore, the change in fair value is included within change in fair value of interest rate cap on the condensed consolidated statements of operations.  

During the year ended December 31, 2018, the Company terminated its interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility and as such there was no balance outstanding as of March 31, 2019 and December 31, 2018. For the three months ended March 31, 2018, the Company recorded a gain of $0.2 million.

Share-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the condensed consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of March 31, 2019, 51 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the quarter were derived from the Original Master Lease, prior to its rejection, and subsequently from the Holdco Master Lease.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Holdco’s business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of March 31, 2019, the Company's portfolio of 198 Wholly Owned Properties and 27 JV Properties was diversified by location across 46 states and Puerto Rico.

Earnings per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

In February 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets” to provide guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach). We adopted this update on January 1, 2018 with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases ("ASC 842"), as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for like earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.

Effective January 1, 2019, the Company adopted ASU 2016-02 electing the package of practical expedients without hindsight whichpermits the Company to notreassess(1)whetheranyexpiredorexistingcontractsareorcontainleases,(2)leaseclassificationforany expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date.

The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the condensed consolidated balance sheets.

Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption.

The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the condensed consolidated balance sheets.

In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately. For leases where the Company is the lessor, the Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the condensed consolidated statements of operations. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our condensed consolidated financial statements.

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Lease Intangible Assets and Liabilities

3 Months Ended

Mar. 31, 2019

Real Estate [Abstract]

Lease Intangible Assets and Liabilities

Note 3 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $101.5 million and $11.9 million, respectively, as of March 31, 2019 and $123.7 million and $12.3 million, respectively, as of December 31, 2018.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

March 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	253,149	$	(155,404	)	$	97,745
Above-market leases, net		7,126		(3,419	)		3,707
Total	$	260,275	$	(158,823	)	$	101,452

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	16,652	$	(4,705	)	$	11,947
Total	$	16,652	$	(4,705	)	$	11,947

December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.1  million and $0.2 million for the three months ended March 31, 2019, and March 31, 2018, respectively. Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

Remainder of 2019	$	288
2020		191
2021		123
2022		157
2023		207

Amortization of an acquired below-market ground lease resulted in additional property expense of $50 thousand for the three months ended March 31, 2019, and March 31, 2018. Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

Remainder of 2019	$	152
2020		203
2021		203
2022		203
2023		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $10.3 million and $18.0 million for the three months ended March 31, 2019 and March 31, 2018, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

Remainder of 2019	$	12,060
2020		14,494
2021		14,000
2022		13,727
2023		12,730

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Investments in Unconsolidated Joint Ventures

3 Months Ended

Mar. 31, 2019

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Note 4 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures.  The Company’s partners in these joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures.  The obligations to make capital contributions are governed by each unconsolidated joint venture’s respective operating agreement and related governing documents.

As of March 31, 2019, the Company had investments in eight unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of Greenberg Gibbons		50.0	%		1		159,000
						27		4,855,600

Mark 302 JV

On March 20, 2018, the Company contributed its property located in Santa Monica, CA to the Mark 302 JV and sold a 49.9% interest to an investment fund managed by Invesco Real Estate based on a contribution value of $90.0 million (the “Initial Mark 302 Contribution Value”) and pre-transaction development and other costs of approximately $10.4 million.  As a result of the transaction, the Company received cash of approximately $50.1 million and recorded a gain of $38.8 million (the “Initial Mark 302 Gain”) which is included in gain on sale of real estate within the consolidated statements of operations for the year ended December 31, 2018. The Initial Mark 302 Gain is comprised of $19.4 million attributable to the increase in fair value of the retained 50.1% interest due to application of the ASU 2017-05, while the remaining $19.4 million is the gain on sale of the remaining 49.9% interest.

The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization (as defined in the operating agreement of the Mark 302 JV) or December 31, 2020. Upon revaluation, the primary inputs in determining the Initial Mark 302 Contribution Value, which consist of property operating income and total project costs, will be updated for actual results and a value (the “Final Mark 302 Contribution Value”) will be calculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Final Mark 302 Contribution Value cannot be more than $105.0 million or less than $60.0 million and will result in a cash settlement between the two parties.

The Company recorded the Initial Mark 302 Gain based on the Initial Mark 302 Contribution Value because it determined it to be the expected amount in the range of possible amounts. The Company made this determination based on its analysis of the primary inputs that determine both the Initial Mark 302 Contribution Value and Final Mark 302 Contribution Value, which consist of property operating income and total project costs. The gain on sale of real estate based on the Final Mark 302 Contribution Value (the “Final Mark 302 Gain”) will not be more than $53.8 million or less than $8.8 million.

Each reporting period the Company re-analyzes the primary inputs that determine the Final Mark 302 Contribution Value and Final Mark 302 Gain.   For the three months ended March 31, 2019 and the period from March 20, 2018 to March 31, 2018, there were no adjustments to the Initial Mark 302 Contribution Value or the Initial Mark 302 Gain resulting from such analysis.

West Hartford JV

On May 18, 2018, the Company contributed its property located in West Hartford, CT to the West Hartford JV and sold a 50.0% interest to First Washington Realty based on a contribution value of $25.0 million (the “Initial West Hartford JV Contribution Value”) and pre-transaction development and other costs of approximately $20.2 million.  As a result of the transaction, the Company received cash of approximately $22.6 million and recorded a gain of $1.2 million (the “Initial West Hartford JV Gain”) which is included in gain on sale of real estate within the consolidated statements of operations for the year ended December 31, 2018. The Initial West Hartford JV Gain is comprised of $0.6 million attributable to the increase in fair value of the retained 50.0% interest due to application of the ASU 2017-05, while the remaining $0.6 million is the gain on sale of the remaining 50.0% interest.

The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization (as defined in the operating agreement of the West Hartford JV) or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022.  Upon revaluation, the primary inputs in determining the Initial West Hartford JV Contribution Value, which consist of property operating income and total project costs, will be updated for actual results and a value (the “Final West Hartford JV Contribution Value”) will be calculated to yield a pre-determined rate of return to First Washington Realty.  The Final West Hartford JV Contribution Value cannot be more than $29.6 million or less than $20.4 million.  Upon adjustment for real estate tax purposes, an amount based on the difference between actual real estate taxes and tenant recoveries for such real estate taxes will be determined and the capitalized value of such amount will be applied as an adjustment to the transaction price (the “Real Estate Tax Adjustment Amount”).  The Real Estate Tax Adjustment Amount, and the aggregate transaction price adjustment resulting from (i) the difference between the Initial West Hartford JV Contribution Value and the Final West Hartford JV Contribution Value, and (ii) the Real Estate Tax Adjustment Amount, cannot exceed $4.6 million and will result in a cash settlement between the two parties.

The Company recorded the Initial West Hartford JV Gain based on the Initial West Hartford JV Contribution Value because it determined it to be the expected amount in the range of possible amounts. The Company made this determination based on its analysis of the primary inputs that determine both the Initial West Hartford JV Contribution Value and Initial West Hartford JV Contribution Value, which consist of property operating income, including the difference between actual real estate taxes and tenant recoveries for such real estate taxes, and total project costs. The gain on sale of real estate based on the Final West Hartford JV Contribution Value (the “Final West Hartford JV Gain”) will not be more than $5.8 million or less than $3.4 million.

Each reporting period the Company re-analyzes the primary inputs that determine the Initial West Hartford JV Contribution Value and Initial West Hartford JV Gain.  For the three months ended March 31, 2019, there were no adjustments to the Initial West Hartford JV Contribution Value or the Initial West Hartford JV Gain resulting from such analysis.

Cockeysville JV

On March 29, 2019, the Company contributed its property located in Cockeysville, MD to the Cockeysville JV and sold a 50.0% interest to an affiliate of the owner of the adjacent shopping center based on a contribution value of $12.5 million and pre-transaction development and other costs of approximately $6.2 million. As a result of the transaction, the Company received cash of approximately $9.3 million and recorded a gain of $3.8 million which is included in gain on sale of real estate within the condensed consolidated statements of operations for the three months ended March 31, 2019. The gain is comprised of $1.9 million attributable to the increase in fair value of the retained 50.0% interest due to application of the ASU 2017-05, while the remaining $1.9 million is the gain on sale of the remaining 50.0% interest.

Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP.  The Company shares in the profits and losses of these unconsolidated joint ventures generally in accordance with the Company’s respective equity interests.  In some instances, the Company may recognize profits and losses related to investment in an unconsolidated joint venture that differ from the Company’s equity interest in the unconsolidated joint venture.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated joint venture recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets or other items.  There were no joint venture impairment charges for the three months ended March 31, 2019 or March 31, 2018.

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV and the UTC JV. The Company is entitled to receive fees for providing management, leasing, and construction supervision services to these joint ventures. The Company earned $282 thousand and $0 from these services for the three months ended March 31, 2019 and March 31, 2018, respectively.

The following tables present combined condensed financial data for the Company’s unconsolidated joint ventures (in thousands):

	March 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	329,349		$	321,853
Buildings and improvements		516,723			508,302
Accumulated depreciation		(76,439	)		(72,239	)
		769,633			757,916
Construction in progress		88,628			78,227
Net investment in real estate		858,261			836,143
Cash and cash equivalents		16,266			14,741
Tenant and other receivables, net		5,037			5,220
Other assets, net		39,733			38,285
Total assets	$	919,297		$	894,389
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Mortgage loans payable, net	$	13,805		$	10,406
Accounts payable, accrued expenses and other    liabilities		60,518			71,791
Total liabilities		74,323			82,197
Members Interest
Additional paid in capital		842,986			833,168
Retained earnings		1,988			(20,976	)
Total members interest		844,974			812,192
Total liabilities and members interest	$	919,297		$	894,389

	Three Months Ended March 31,
	2019			2018
EQUITY IN INCOME OF UNCONSOLIDATED    JOINT VENTURES
Total revenue	$	11,218		$	11,227
Property operating expenses		(2,598	)		(1,712	)
Depreciation and amortization		(5,253	)		(7,586	)
Operating income		3,367			1,929
Other expenses		(922	)		(7,094	)
Net (loss) income	$	2,445		$	(5,165	)
Equity in (loss) income of unconsolidated    joint ventures	$	1,222		$	(2,582	)

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Note 5 – Leases

On February 28, 2019, the Company and certain affiliates of Holdco executed the Holdco Master Lease which became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.  The Company analyzed this transaction under applicable accounting guidance and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification in accordance with ASC 842.

Lease Structure

The structure of the Holdco Master Lease is consistent with the structure of the Original Master Lease in all material respects, including (i) it is a unitary, non-divisible lease as to all properties, pursuant to which the tenant’s obligations as to each property are cross-defaulted with all obligations of the tenant with respect to all other properties; (ii) it is a triple net lease with respect to all space which is leased thereunder to the tenant, subject to proportional sharing by the tenant for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by the tenant and other space occupied by other tenants in the same or other buildings, space which is recaptured pursuant to the Company’s recapture rights described below and all other space which is constructed on the properties; (iii) the tenant is required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they are in occupancy; and (iv) the tenant is generally prohibited from subleasing any space demised under the lease.

Term and Renewals

Consistent with the terms of the Original Master Lease, the Holdco Master Lease will expire in July 2025, and contains three options for five-year renewals of the term and a final option for a four-year renewal, as was the case under the Original Master Lease.

Rental Revenue

The Holdco Master Lease provides for an initial base rent at the same rates which were in place at the time of the modification for accounting purposes. In each of the initial term and the first two renewal terms, consistent with the Original Master Lease, base rent under the Holdco Master Lease will be increased in August of each year by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, consistent with the Original Master Lease, rent will be set at the commencement of the renewal term for the Holdco Master Lease at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Holdco Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year.  The base rent under the Holdco Master Lease will be subject to an adjustment in the form of a rent credit of up to approximately $12 million in each of the first and second years of the Holdco Master Lease.  The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018. If any such properties are recaptured by the Company or terminated by Holdco, the base rent credit attributable to such property will no longer be applicable.  The rent credit is applicable to base rent only and Holdco is responsible for repair and maintenance charges, real property taxes, insurance and other costs and expenses associated with its occupancy of the subject properties.

Revenues from the Holdco Master Lease and the Original Master Lease for the three months ended March 31, 2019 and March 31, 2018 are as follows (in thousands and excluding straight-line rental income of $0.5 million and $0.5 million, respectively.

	Three Months Ended March 31,
	2019		2018
Fixed lease revenue	$	12,288	$	22,531
Variable lease revenue		8,398		13,442
Total rental revenue	$	20,686	$	35,973

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2019 and December 31, 2018 are approximately as follows:

(in thousands)	March 31, 2019
Remainder of 2019	$	76,637
2020		104,249
2021		106,925
2022		106,006
2023		101,240
2024		98,470
Thereafter		332,817
Total Lease Payments	$	926,344

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

The components of lease revenues for the three months ended March 31, 2019 were as follows:

(in thousands)	Three months ended March 31, 2019
Fixed lease revenues	$	28,989
Variable lease revenues		11,129
Lease revenues	$	40,118

Lessee Disclosures

We have one ground lease and corporate office leases which are classified as operating leases.  As of March 31, 2019, we recorded $8.6 million of ROU assets and lease liabilities. Our ROU assets were increased by $11 million of acquired below-market lease assets, net, reclassified from Lease intangible assets, net.

The Company recorded rent expense related to leased corporate office space of $285 thousand as of March 31, 2019 and $176 thousand as of March 31, 2018.  Such rent expense is classified within general and administrative expenses on the consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $11 thousand for the three months ended March 31, 2019 and $11 thousand for the three months ended March 31, 2018.  Such ground rent expense is classified within property operating expenses on the consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2019:

(in thousands)	As of March 31, 2019
Weighted average remaining lease term (in years)		11.29
Weighted average discount rate		7.19	%
Cash paid for operating leases	$	501

Seritage Recapture Rights

The Holdco Master Lease, consistent with the Original Master Lease, provides the Company with the right to recapture up to approximately 50% of the space occupied by the tenant at all properties (other than five specified properties) and the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of parking areas and common areas.  Upon exercise of any of these partial recapture rights, consistent with the Original Master Lease, the Company will generally incur, as applicable, certain costs and expenses for the separation of the recaptured space from the remaining tenant space.

Additionally, in contrast to Original Master Lease, which permitted the Company to recapture 100% of certain properties upon payment of a specified recapture fee, the Holdco Master Lease provides the Company with the right, beginning in the second year of the term, to recapture 100% of the space occupied by the tenant at any of the properties included in the Holdco Master Lease (other than five specified properties) without paying a recapture fee.  This right to recapture 100% of any property is limited to 10 properties in each year of the Holdco Master Lease term, with carry-over rights if less than 10 properties are recaptured in any given lease year.  In the event of a 100% recapture of a property (or termination of a property by Holdco that is subject to a termination fee) and any subsequent redevelopment of such property for retail purposes, Holdco has certain rights of first offer to lease space at specified predefined rates depending on the condition the space is delivered.  If the Company does not provide Holdco with a right of first offer on at least one-third of any such properties that are recaptured 100% by the Company (or terminated by Holdco with payment of a termination fee) in a given lease year, then the Company’s 100% recaptures rights are subject to payment of a recapture fee until such time as the Company has complied with the foregoing ratio.

Upon the exercise of any of its recapture rights, the Company can reconfigure and rent the recaptured space to new, diversified tenants on potentially superior terms as determined by the Company and for its own account.

As shown in the table below, the Company had exercised certain recapture rights with respect to 70 properties under the Original Master Lease prior to its rejection on March 12, 2019.  As of March 31, 2019, the Company had not exercised any of its recapture rights under the Holdco Master Lease.

Property	Recapture Type	Notice Date(s)
Hialeah, FL (Westland)	Auto Center	September 2018
Cape Girardeau, MO	100% (1)	September 2018
Doral, FL	100% (1)	September 2018
Fairfax, VA	100% (1)	September 2018 / May 2016
Gillette, WY	100% (1)	September 2018
Happy Valley, OR	100% (1)	September 2018
Houston, TX (Memorial City)	100% (1)	September 2018
Santa Cruz, CA	100% (1)	September 2018 / December 2016
Vancouver, WA	100% (1)	September 2018
Fresno, CA	Partial	May 2018
Asheville, NC	100% (1)	March 2018
Chicago, IL (Six Corners)	100% (1)	March 2018
Clearwater, FL	100% (1)	March 2018
El Cajon, CA	100% (1)	March 2018
Fairfield, CA	100% (1)	March 2018 / December 2017
Oklahoma City, OK	Out parcel	March 2018
Plantation, FL	100% (1)	March 2018 / December 2017
Redmond, WA	100% (1)	March 2018 / September 2017
Reno, NV	100% (1)	March 2018
Tucson, AZ	100% (1)	March 2018
Anchorage, AK	100%	December 2017
Boca Raton, FL	100%	December 2017
Westminster, CA	100%	December 2017
Hicksville, NY	100%	December 2017
Orland Park, IL	100% (1)	December 2017
Florissant, MO	Out parcel	December 2017
Salem, NH	Out parcel	December 2017
Las Vegas, NV	Partial	December 2017
Yorktown Heights, NY	Partial	December 2017
Austin, TX (Tech Ridge)	100% (1)	December 2017 / September 2017
Ft. Wayne, IN	Out parcel	September 2017 / July 2016
North Little Rock, AR	Auto Center	September 2017
St. Clair Shores, MI	100%	September 2017
Canton, OH	Partial	June 2017
Dayton, OH	Auto center	June 2017
North Riverside, IL	Partial	June 2017
Roseville, CA	Auto center	June 2017
Temecula, CA	Partial	June 2017
Watchung, NJ	100%	June 2017
Anderson, SC	100% (1)	April 2017 / July 2016
Aventura, FL	100%	April 2017
Carson, CA	100% (1)	April 2017 / December 2016
Charleston, SC	100% (1)	April 2017 / October 2016
Hialeah, FL (freestanding)	100% (1)	April 2017
San Diego, CA (2)	100% (1)	April 2017
Valley View, TX	100%	April 2017
Cockeysville, MD (3)	Partial	March 2017
North Miami, FL	100%	March 2017
Olean, NY	Partial	March 2017
Guaynabo, PR	Partial	December 2016
Santa Monica, CA (4)	100%	December 2016
Saugus, MA	Partial	December 2016
Roseville, MI	Partial	November 2016
Troy, MI	Partial	November 2016
Rehoboth Beach, DE	Partial	October 2016
St. Petersburg, FL (Tyrone Square)	100%	October 2016
Warwick, RI	Auto center	October 2016
West Hartford, CT (5)	100%	October 2016
Madison, WI	Partial	July 2016
North Hollywood, CA	Partial	July 2016
Orlando, FL	100%	July 2016
West Jordan, UT	Partial + auto center	July 2016
Albany, NY	Auto center	May 2016
Bowie, MD	Auto center	May 2016
Hagerstown, MD	Auto center	May 2016
Wayne, NJ (6)	Partial + auto center	May 2016
San Antonio, TX	Auto center	March 2016
Braintree, MA	100%	November 2015
Honolulu, HI	100%	December 2015
Memphis, TN	100%	December 2015

(1) The Company converted partial recapture rights at this property to 100% recapture rights and exercised such rights.

(2) In May 2018, the Company contributed this property to the UTC JV and retained a 50.0% interest in the joint venture.

(3) In March 2019, the Company contributed this property to the Cockeysville JV and retained a 50.0% interest in the joint venture.

(4) In March 2018, the Company contributed this asset to the Mark 302 JV and retained a 50.1% interest in the joint venture.

(5) In May 2018, the Company contributed this property to the West Hartford JV and retained a 50.0% interest in the joint venture.

(6) In July 2017, the Company contributed this asset to the GGP II JV and retained a 50.0% interest in the joint venture.

Tenant Termination Rights

Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, unlike the Original Master Lease, beginning in the second year of the term of the Holdco Master Lease, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.  As of March 31, 2019, Holdco had not exercised any of its termination rights under the Holdco Master Lease.

The table below includes the 87 properties at which Sears Holdings had exercised its termination rights under the Original Master Lease prior to its rejection on March 12, 2019:

					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Antioch, CA		95,200	August 2018	December 2018
Columbus, MS		117,100	August 2018	December 2018
Dayton, OH		148,800	August 2018	December 2018	Q2 2017
Flagstaff, AZ		66,200	August 2018	December 2018
Ft. Wayne, IN		213,600	August 2018	December 2018	Q3 2016 / Q3 2017
Jackson, MI		144,200	August 2018	December 2018
Manchester, NH		135,100	August 2018	December 2018	Q4 2018
Salem, NH		119,000	August 2018	December 2018	Q4 2017
Savannah, GA		155,700	August 2018	December 2018
Scott Depot, WV		89,800	August 2018	December 2018	Sold
Steger, IL		87,400	August 2018	December 2018
Victor, NY		115,300	August 2018	December 2018
West Jordan, UT		117,300	August 2018	December 2018	Q3 2016 / Q3 2018
Chesapeake, VA		169,400	June 2018	November 2018
Clay, NY		138,000	June 2018	November 2018
Havre, MT		94,700	June 2018	November 2018	Sold
Newark, CA		145,800	June 2018	November 2018
Oklahoma City, OK		173,700	June 2018	November 2018	Q3 2017
Troy, MI		271,300	June 2018	November 2018	Q3 2016
Virginia Beach, VA		86,900	June 2018	November 2018	Q3 2015
Madison, WI		88,100	June 2018	October 2018	Q2 2016
Thousand Oaks, CA		50,300	June 2018	October 2018	Q3 2015
Cedar Rapids, IA		141,100	April 2018	August 2018
Citrus Heights, CA		280,700	April 2018	August 2018
Gainesville, FL		140,500	April 2018	August 2018	Q2 2018
Maplewood, MN		168,500	April 2018	August 2018
Pensacola, FL		212,300	April 2018	August 2018	Q2 2018
Rochester, NY		128,500	April 2018	August 2018
Roseville, CA		121,000	April 2018	August 2018	Q2 2017 / Q1 2018
San Antonio, TX		187,800	April 2018	August 2018	Q4 2015
Warrenton, VA		113,900	April 2018	August 2018	Q1 2018
Westwood, TX		215,000	June 2017	January 2018 (1)	Q3 2018
Friendswood, TX		166,000	June 2017	November 2017 (1)
Albany, NY		216,200	June 2017	October 2017	Q1 2016
Burnsville, MN		161,700	June 2017	October 2017
Chicago, IL (N Harlem)		293,700	June 2017	October 2017
Cockeysville, MD		83,900	June 2017	October 2017	Q1 2017
East Northport, NY		187,000	June 2017	October 2017	Q2 2017
Greendale, WI		238,400	June 2017	October 2017	Q4 2017
Hagerstown, MD		107,300	June 2017	October 2017	Q1 2016 / Sold
Johnson City, NY		155,100	June 2017	October 2017
Lafayette, LA		194,900	June 2017	October 2017
Mentor, OH		208,700	June 2017	October 2017
Middleburg Heights, OH		351,600	June 2017	October 2017
Olean, NY		75,100	June 2017	October 2017	Q1 2017
Overland Park, KS		215,000	June 2017	October 2017
Roseville, MI		277,000	June 2017	October 2017	Q3 2016
Sarasota, FL		204,500	June 2017	October 2017
Toledo, OH		209,900	June 2017	October 2017
Warwick, RI		169,200	June 2017	October 2017	Q3 2016 / Q3 2017
York, PA		82,000	June 2017	October 2017	Sold
Chapel Hill, OH		187,179	January 2017	April 2017
Concord, NC		137,499	January 2017	April 2017
Detroit Lakes, MN		79,102	January 2017	April 2017
El Paso, TX		103,657	January 2017	April 2017	Q2 2018
Elkins, WV		94,885	January 2017	April 2017	Sold
Henderson, NV		122,823	January 2017	April 2017	Q1 2017
Hopkinsville, KY		70,326	January 2017	April 2017	Q1 2018
Jefferson City, MO		92,016	January 2017	April 2017	Q2 2017
Kenton, OH		96,066	January 2017	April 2017
Kissimmee, FL		112,505	January 2017	April 2017
Layton, UT		90,010	January 2017	April 2017	Q3 2018
Leavenworth, KS		76,853	January 2017	April 2017	Sold
Mt. Pleasant, PA		83,536	January 2017	April 2017	Q2 2018
Muskogee, OK		87,500	January 2017	April 2017	Sold
Owensboro, KY		68,334	January 2017	April 2017	Sold
Paducah, KY		108,244	January 2017	April 2017	Q3 2017
Platteville, WI		94,841	January 2017	April 2017	Sold
Riverside, CA (Iowa Ave.)		94,500	January 2017	April 2017
Sioux Falls, SD		72,511	January 2017	April 2017	Sold
Alpena, MI		118,200	September 2016	January 2017
Chicago, IL (S Kedzie)		118,800	September 2016	January 2017	Q3 2018
Cullman, AL		98,500	September 2016	January 2017	Q2 2017
Deming, NM		96,600	September 2016	January 2017
Elkhart, IN		86,500	September 2016	January 2017	Q4 2016
Harlingen, TX		91,700	September 2016	January 2017	Sold
Houma, LA		96,700	September 2016	January 2017	Sold
Kearney, NE		86,500	September 2016	January 2017	Q3 2016
Manistee, MI		87,800	September 2016	January 2017
Merrillville, IN		108,300	September 2016	January 2017	Q4 2016
New Iberia, LA		91,700	September 2016	January 2017	Q2 2017
Riverton, WY		94,800	September 2016	January 2017	Sold
Sault Sainte Marie, MI		92,700	September 2016	January 2017
Sierra Vista, AZ		86,100	September 2016	January 2017	Sold
Springfield, IL		84,200	September 2016	January 2017	Q3 2016
Thornton, CO		190,200	September 2016	January 2017	Q1 2017
Yakima, WA		97,300	September 2016	January 2017	Sold
Total square feet		11,728,387

(1) The Company and Sears Holdings agreed to extend occupancy beyond October 2017 under the existing Original Master Lease terms.

As of March 31, 2019, the Company had commenced or completed redevelopment projects at 39 of the terminated properties and will continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears Holdings.

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Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent.  The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”). The Term Loan Facility matures on July 31, 2023.

The Company used a portion of the proceeds from the Initial Funding to (i) repay the Mortgage Loans and Future Funding Facility due July 2019; (ii) repay the Unsecured Term Loan due December 2018; and (iii) pay transaction and related costs.  The Company expects the remaining proceeds from the Initial Funding, as well as borrowings under the Incremental Funding Facility, will be used to fund the Company’s redevelopment pipeline and to pay operating expenses of the Company and its subsidiaries.  

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepaid an annual fee of $4.0 million at closing and is amortizing the expense to interest expense on the consolidated statement of operations.

As of March 31, 2019, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to certain signed but not open leases) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million and (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to certain signed but not open leases) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Borrower.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Borrower and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a springing requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement.

The Term Loan Facility includes certain financial metrics to govern springing collateral and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion.  Any failure to satisfy any of these financial metrics will limit the Company’s ability to dispose of assets via sale or joint venture and will trigger the springing mortgage and collateral requirements but will not result in an event of default.  The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, and bankruptcy or insolvency proceedings.  If there is an event of default, the lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of March 31, 2019, the Company was not in compliance with certain of the financial metrics described above.  As a result, the Company must receive the consent of Berkshire Hathaway to dispose of assets via sale or joint venture and Berkshire Hathaway has the right to request mortgages against the Company’s assets pursuant to the springing mortgage and collateral requirement.

The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement.  As of March 31, 2019, the unamortized balance of the Company’s debt issuance costs was $1.8 million.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for federal income tax purposes and expects to continue to operate to qualify as a REIT.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to currently distribute at least 90% of its adjusted REIT taxable income to its shareholders.

As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to its shareholders.  If the Company fails to qualify as a REIT or does not distribute 100% of its taxable income in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state, local and Puerto Rico taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income.

On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the “TCJA”) was signed into law and included wide-scale changes to individual, pass-through and corporation tax laws, including those that impact the real estate industry, the ownership of real estate and real estate investments, and REITs. The Company has reviewed the provisions of the law that pertain to the Company and has determined that they have no material income tax effect for financial statement purposes.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value.  The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”).  ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.  In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.  The Company also considers counterparty credit risk in its assessment of fair value.

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

All derivative instruments are carried at fair value and are valued using Level 2 inputs.  The Company had no derivative instruments as of March 31, 2019 (an interest rate cap associated with the Mortgage Loans and Future Funding Facility was terminated subsequent to the repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018). The Company utilized an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The Company had elected not to utilize hedge accounting, and therefore, the change in fair value was included in previous periods within change in fair value of interest rate cap on the condensed consolidated statements of operations.  For the three months ended March 31, 2019, the Company did not record any gain or loss compared to a gain of $0.2 million for the three months ended March 31, 2018.  

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the condensed consolidated balance sheets include cash equivalents and debt obligations.  The fair value of cash equivalents is classified as Level 1 and the fair value of debt obligations is classified as Level 2.

Cash equivalents are carried at cost, which approximates fair value.  The fair value of debt obligations is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings.  As of March 31, 2019 and December 31, 2018, the estimated fair values of the Company’s debt obligations were $1.60 billion and $1.60 billion, respectively, which approximated the carrying value at such dates as the current risk-adjusted rate approximates the stated rates on the Company’s debt obligations.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9 – Commitments and Contingencies

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or discloses the fact that such a range of loss cannot be estimated. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, and the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the master lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of the proceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.  The Litigation is at early stages, and the defendants there to have not yet filed a response to the complaint described above.  The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intend to defend against them vigorously.

In addition to the litigation described above, the Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the condensed consolidated financial position, results of operations, cash flows or liquidity of the Company. As of March 31, 2019, and December 31, 2018, the Company did not record any amounts for litigation or other matters.

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Related Party Disclosure

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Disclosure

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert was Chairman of Sears Holdings and is the Chairman and Chief Executive Officer of ESL, which owns Holdco. Mr. Lampert beneficially owns approximately 74.1 % of Sears Holdings’ outstanding common stock (according to a Schedule 13D filed October 17, 2018). Mr. Lampert is also the Chairman of Seritage.

As of March 31, 2019, Mr. Lampert beneficially owned a 36.1% interest in the Operating Partnership and approximately 2.7% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.

Subsidiaries of Sears Holdings, as lessees, and subsidiaries of the Company, as lessors, are parties to the Original Master Lease (see Note 5), and subsidiaries of Holdco, as lessees, and subsidiaries of the Company, as lessors, are parties to the Holdco Master Lease.

Unconsolidated Joint Ventures

Certain unconsolidated joint ventures have engaged the Company to provide management, leasing and development services at the properties owned by the unconsolidated joint ventures.  Fees for the services performed are reported at 100% of the revenue earned from such joint ventures in management and other fee income on the condensed consolidated statements of operations.  The Company’s share of the expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the condensed consolidated statements of operations and in other expenses in the combined condensed financial data in Note 4.

In addition, as of March 31, 2019, the Company had incurred $2.9 million of development expenditures at properties owned by certain unconsolidated joint ventures for which the Company will be repaid by the respective unconsolidated joint ventures.  These amounts are included in tenant and other receivables, net on the Company’s condensed consolidated balance sheets.  As of December 31, 2018, the Company had incurred $2.1 million of these development expenditures.

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Non-Controlling Interests

3 Months Ended

Mar. 31, 2019

Noncontrolling Interest [Abstract]

Non-Controlling Interests

Note 11 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”).  Pursuant to the Partnership Agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners.

As of March 31, 2019, the Company held a 63.9% interest in the Operating Partnership and ESL held a 36.1% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the periods presented.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Shareholders' Equity

Note 12 – Shareholders’ Equity

Class A Common Shares

During the three months ended March 31, 2019, 45,549 Class A common shares vested, net of 23,362 shares withheld for employee income taxes.

As of March 31, 2019, 35,689,708 Class A common shares were issued and outstanding.

Class B Non-Economic Common Shares

During the three months ended March 31, 2019, there was no Class B non-economic common shares activity.

As of March 31, 2019, 1,322,365 Class B non-economic common shares were issued and outstanding.  The Class B non-economic common shares have voting rights, but do not have economic rights and, as such, do not receive dividends and are not included in earnings per share computations.

Class C Non-Voting Common Shares

As of March 31, 2019, there were noClass C non-voting common shares issued or outstanding.

Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share.  The Company received net proceeds from the offering of approximately $66.7 million, after deducting payment of the underwriting discount and offering expenses, which it used to fund its redevelopment pipeline and for general corporate purposes.

The Company may not redeem the Series A Preferred Shares before December 14, 2022 except to preserve its status as a REIT or upon the occurrence of a Change of Control, as defined in the Trust Agreement addendum designating the Series A Preferred Shares.  On and after December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. In addition, upon the occurrence of a Change of Control, the Company may redeem any or all of the Series A Preferred Shares for cash within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of Operating Partnership units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

The Company’s Board of Trustees declared the following preferred stock dividends during 2019 and 2018:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2019
April 30	June 28	July 15	$	0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

The Company has announced that the Board of Trustees does not currently expect to declare additional dividends on the Company’s Class A and Class C common shares for the remainder of 2019, based on its assessment of the Company’s investment opportunities and its expectations of taxable income for the year. The Board of Trustees will reevaluate this position at the end of 2019, if necessary, to ensure that the Company meets its distribution requirements as a REIT. The Company has also announced that the Board of Trustees expects that cash dividends for the Company’s preferred shares will continue to be paid each quarter.

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Earnings per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings per Share

Note 13 – Earnings per Share

The table below provides a reconciliation of net income (loss) and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders, as they do not have economic rights.

(in thousands except per share amounts)	Three Months Ended March 31,
	2019			2018
Numerator
Net loss (income)	$	(10,894	)		16,201
Net income (loss) attributable to non-controlling interests		3,927			(5,873	)
Preferred dividends		(1,225	)		(1,228	)
Net income (loss) attributable to common shareholders	$	(8,192	)	$	9,100
Earnings allocated to unvested participating securities		—			(22	)
Net income (loss) available to common shareholders - Basic and diluted	$	(8,192	)	$	9,078
Denominator
Weighted average Class A common shares outstanding		35,671			33,673
Weighted average Class C common shares outstanding		—			1,741
Weighted average Class A and Class C common shares outstanding - Basic		35,671			35,414
Restricted shares and share units		—			87
Weighted average Class A and Class C common shares outstanding - Diluted		35,671			35,501
Net income (loss) per share attributable to Class A and Class C common    shareholders - Basic	$	(0.23	)	$	0.26
Net income (loss) per share attributable to Class A and Class C common    shareholders - Diluted	$	(0.23	)	$	0.26

No adjustments were made to the numerator for the three months ended March 31, 2019 because the Company generated a net loss.  During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

No adjustments were made to the denominator for the three months ended March 31, 2019 because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of the Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share.

As of March 31, 2019, and December 31, 2018, there were 350,240 and 403,129 shares, respectively, of non-vested restricted shares and share units outstanding.

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Share Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share Based Compensation

Note 14 – Share Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the "Awards"). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares and Share Units

Pursuant to the Plan, the Company has periodically made grants of restricted shares or share units. The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted shares and share units vest in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that do not vest are forfeited. Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest.  Dividends on restricted shares and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares.

The following table summarizes restricted share activity for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57
Restricted shares vested		(52,390	)		42.25
Restricted shares forfeited		(499	)		36.17
Unvested restricted shares at end of period		350,240			41.48

The Company recognized $1.5 million and $0.9 million in compensation expense related to the restricted shares for the three months ended March 31, 2019 and March 31, 2018, respectively.Such expenses are included in general and administrative expenses on the Company's condensed consolidated statements of operations.  

As of March 31, 2019, there were approximately $6.6 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 1.6 years. As of March 31, 2018, there were approximately $6.8 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.0 years.

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Accounts Payable, Accrued Expenses and Other Liabilities

3 Months Ended

Mar. 31, 2019

Payables And Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Note 15 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and accrued expenses	$	24,013	$	28,065
Accrued development expenditures		17,438		26,180
Dividends and distributions payable		15,668		15,758
Below-market leases		11,947		12,281
Accrued real estate taxes		10,760		14,108
Environmental reserve		9,477		9,477
Lease Liability		8,368		—
Unearned tenant reimbursements		7,530		10,975
Prepaid rental income		6,773		4,021
Accrued interest		4,978		4,978
Deferred maintenance		1,722		1,722
Total accounts payable, accrued expenses and    other liabilities	$	118,674	$	127,565

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, (the “Annual Report”), for the year ended December 31, 2018.  Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report.  In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report.  Operating results of three months ended March 31, 2019 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2019.  Capitalized terms used, but not defined in this quarterly report, have the same meanings as set forth in our Annual Report.

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. As of March 31, 2019, and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of March 31, 2019, the Company holds a 63.9% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  The Company has determined that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

Reclassification

Reclassification

Upon adoption of the new lease standard, rental recoveries for 2018 have been reclassified to rental revenues in the consolidated statements of operations to conform to the 2019 financial statement presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

Segment Reporting

The Company currently operates in a single reportable segment which includes the acquisition, ownership, development, redevelopment, management, and leasing of real estate properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process.

Real Estate Investments

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved, and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

During the three months ended March 31, 2019, the Company sold interests in eight properties for net proceeds of $38.8 million and recognized gain on sale of real estate of $21.5 million.

Real Estate Held for Sale

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of March 31, 2019, two properties were classified as held for sale with assets of $7.5 million and no liabilities and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the three months ended March 31, 2019 or March 31, 2018.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted Cash

Restricted cash represents cash deposited in escrow accounts which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.

As of March 31, 2019, the Company did not have any restricted cash. As of March 31, 2018, the Company had approximately $177.4 million of restricted cash accounts which were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.  

Tenant and Other Receivables

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions. Any receivables that are deemed to be uncollectible are recognized as a reduction to rental revenue in the Company’s consolidated statements of operations. Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental revenue.

Revenue Recognition

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.  Generally, this occurs on the rent commencement date.  In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

Reimbursement of property operating expenses arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the expenses are incurred.

Management and Other Fee Income

Management and Other Fee Income

Management and other fee income represents management, leasing, and development fees for services performed for the benefit of certain unconsolidated joint ventures and is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the condensed consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the condensed consolidated statements of operations and in other expenses in the combined condensed financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Seritage Partial Recapture Rights.  The Company generally treats the delivery of a partial recapture notice as a modification of the lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

− The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the lease.

− The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Termination Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations would generally result in the following accounting adjustments for the terminated property:

− Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

− Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

− Termination fees required to be paid are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of vacancy.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility on July 7, 2015, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the condensed consolidated balance sheets.  The Company elected not to utilize hedge accounting, and therefore, the change in fair value is included within change in fair value of interest rate cap on the condensed consolidated statements of operations.  

During the year ended December 31, 2018, the Company terminated its interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility and as such there was no balance outstanding as of March 31, 2019 and December 31, 2018. For the three months ended March 31, 2018, the Company recorded a gain of $0.2 million.

Stock-Based Compensation

Share-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the condensed consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of March 31, 2019, 51 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the quarter were derived from the Original Master Lease, prior to its rejection, and subsequently from the Holdco Master Lease.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Holdco’s business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of March 31, 2019, the Company's portfolio of 198 Wholly Owned Properties and 27 JV Properties was diversified by location across 46 states and Puerto Rico.

Earnings per Share

Earnings per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets” to provide guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach). We adopted this update on January 1, 2018 with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases ("ASC 842"), as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for like earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.

Effective January 1, 2019, the Company adopted ASU 2016-02 electing the package of practical expedients without hindsight whichpermits the Company to notreassess(1)whetheranyexpiredorexistingcontractsareorcontainleases,(2)leaseclassificationforany expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date.

The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the condensed consolidated balance sheets.

Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption.

The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the condensed consolidated balance sheets.

In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately. For leases where the Company is the lessor, the Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the condensed consolidated statements of operations. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our condensed consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Estimated Useful Lives

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

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Lease Intangible Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Finite-Lived Intangible Assets [Line Items]

Summary of Lease Intangible Assets

The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

March 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	253,149	$	(155,404	)	$	97,745
Above-market leases, net		7,126		(3,419	)		3,707
Total	$	260,275	$	(158,823	)	$	101,452

December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

Summary of Lease Intangible Liabilities

The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	16,652	$	(4,705	)	$	11,947
Total	$	16,652	$	(4,705	)	$	11,947

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

Schedule of Future Amortization for Below-Market Ground Leases

Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

Remainder of 2019	$	152
2020		203
2021		203
2022		203
2023		203

Above-Market Leases, Net [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Future Amortization of Acquired Leases

Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

Remainder of 2019	$	288
2020		191
2021		123
2022		157
2023		207

In-Place Leases, Net [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Future Amortization of Acquired Leases

Future estimated amortization of acquired in-place leases is set forth below (in thousands):

Remainder of 2019	$	12,060
2020		14,494
2021		14,000
2022		13,727
2023		12,730

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Investments in Unconsolidated Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2019

Equity Method Investments And Joint Ventures [Abstract]

Summary of Company's Investments in Unconsolidated Joint Ventures

As of March 31, 2019, the Company had investments in eight unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of Greenberg Gibbons		50.0	%		1		159,000
						27		4,855,600

Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures

The following tables present combined condensed financial data for the Company’s unconsolidated joint ventures (in thousands):

	March 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	329,349		$	321,853
Buildings and improvements		516,723			508,302
Accumulated depreciation		(76,439	)		(72,239	)
		769,633			757,916
Construction in progress		88,628			78,227
Net investment in real estate		858,261			836,143
Cash and cash equivalents		16,266			14,741
Tenant and other receivables, net		5,037			5,220
Other assets, net		39,733			38,285
Total assets	$	919,297		$	894,389
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Mortgage loans payable, net	$	13,805		$	10,406
Accounts payable, accrued expenses and other    liabilities		60,518			71,791
Total liabilities		74,323			82,197
Members Interest
Additional paid in capital		842,986			833,168
Retained earnings		1,988			(20,976	)
Total members interest		844,974			812,192
Total liabilities and members interest	$	919,297		$	894,389

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Summary of Revenue from Master Lease

Revenues from the Holdco Master Lease and the Original Master Lease for the three months ended March 31, 2019 and March 31, 2018 are as follows (in thousands and excluding straight-line rental income of $0.5 million and $0.5 million, respectively.

	Three Months Ended March 31,
	2019		2018
Fixed lease revenue	$	12,288	$	22,531
Variable lease revenue		8,398		13,442
Total rental revenue	$	20,686	$	35,973

Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2019 and December 31, 2018 are approximately as follows:

(in thousands)	March 31, 2019
Remainder of 2019	$	76,637
2020		104,249
2021		106,925
2022		106,006
2023		101,240
2024		98,470
Thereafter		332,817
Total Lease Payments	$	926,344

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

Components of Lease Revenues

The components of lease revenues for the three months ended March 31, 2019 were as follows:

(in thousands)	Three months ended March 31, 2019
Fixed lease revenues	$	28,989
Variable lease revenues		11,129
Lease revenues	$	40,118

Information Related to Measurement of Lease Liabilities

The following table sets forth information related to the measurement of our lease liabilities as of March 31, 2019:

(in thousands)	As of March 31, 2019
Weighted average remaining lease term (in years)		11.29
Weighted average discount rate		7.19	%
Cash paid for operating leases	$	501

Summary of Recapture Rights Exercised by the Company

As shown in the table below, the Company had exercised certain recapture rights with respect to 70 properties under the Original Master Lease prior to its rejection on March 12, 2019.  As of March 31, 2019, the Company had not exercised any of its recapture rights under the Holdco Master Lease.

Property	Recapture Type	Notice Date(s)
Hialeah, FL (Westland)	Auto Center	September 2018
Cape Girardeau, MO	100% (1)	September 2018
Doral, FL	100% (1)	September 2018
Fairfax, VA	100% (1)	September 2018 / May 2016
Gillette, WY	100% (1)	September 2018
Happy Valley, OR	100% (1)	September 2018
Houston, TX (Memorial City)	100% (1)	September 2018
Santa Cruz, CA	100% (1)	September 2018 / December 2016
Vancouver, WA	100% (1)	September 2018
Fresno, CA	Partial	May 2018
Asheville, NC	100% (1)	March 2018
Chicago, IL (Six Corners)	100% (1)	March 2018
Clearwater, FL	100% (1)	March 2018
El Cajon, CA	100% (1)	March 2018
Fairfield, CA	100% (1)	March 2018 / December 2017
Oklahoma City, OK	Out parcel	March 2018
Plantation, FL	100% (1)	March 2018 / December 2017
Redmond, WA	100% (1)	March 2018 / September 2017
Reno, NV	100% (1)	March 2018
Tucson, AZ	100% (1)	March 2018
Anchorage, AK	100%	December 2017
Boca Raton, FL	100%	December 2017
Westminster, CA	100%	December 2017
Hicksville, NY	100%	December 2017
Orland Park, IL	100% (1)	December 2017
Florissant, MO	Out parcel	December 2017
Salem, NH	Out parcel	December 2017
Las Vegas, NV	Partial	December 2017
Yorktown Heights, NY	Partial	December 2017
Austin, TX (Tech Ridge)	100% (1)	December 2017 / September 2017
Ft. Wayne, IN	Out parcel	September 2017 / July 2016
North Little Rock, AR	Auto Center	September 2017
St. Clair Shores, MI	100%	September 2017
Canton, OH	Partial	June 2017
Dayton, OH	Auto center	June 2017
North Riverside, IL	Partial	June 2017
Roseville, CA	Auto center	June 2017
Temecula, CA	Partial	June 2017
Watchung, NJ	100%	June 2017
Anderson, SC	100% (1)	April 2017 / July 2016
Aventura, FL	100%	April 2017
Carson, CA	100% (1)	April 2017 / December 2016
Charleston, SC	100% (1)	April 2017 / October 2016
Hialeah, FL (freestanding)	100% (1)	April 2017
San Diego, CA (2)	100% (1)	April 2017
Valley View, TX	100%	April 2017
Cockeysville, MD (3)	Partial	March 2017
North Miami, FL	100%	March 2017
Olean, NY	Partial	March 2017
Guaynabo, PR	Partial	December 2016
Santa Monica, CA (4)	100%	December 2016
Saugus, MA	Partial	December 2016
Roseville, MI	Partial	November 2016
Troy, MI	Partial	November 2016
Rehoboth Beach, DE	Partial	October 2016
St. Petersburg, FL (Tyrone Square)	100%	October 2016
Warwick, RI	Auto center	October 2016
West Hartford, CT (5)	100%	October 2016
Madison, WI	Partial	July 2016
North Hollywood, CA	Partial	July 2016
Orlando, FL	100%	July 2016
West Jordan, UT	Partial + auto center	July 2016
Albany, NY	Auto center	May 2016
Bowie, MD	Auto center	May 2016
Hagerstown, MD	Auto center	May 2016
Wayne, NJ (6)	Partial + auto center	May 2016
San Antonio, TX	Auto center	March 2016
Braintree, MA	100%	November 2015
Honolulu, HI	100%	December 2015
Memphis, TN	100%	December 2015

(1) The Company converted partial recapture rights at this property to 100% recapture rights and exercised such rights.

(2) In May 2018, the Company contributed this property to the UTC JV and retained a 50.0% interest in the joint venture.

(3) In March 2019, the Company contributed this property to the Cockeysville JV and retained a 50.0% interest in the joint venture.

(4) In March 2018, the Company contributed this asset to the Mark 302 JV and retained a 50.1% interest in the joint venture.

(5) In May 2018, the Company contributed this property to the West Hartford JV and retained a 50.0% interest in the joint venture.

(6) In July 2017, the Company contributed this asset to the GGP II JV and retained a 50.0% interest in the joint venture.

Summary of Termination and Redevelopment Properties

The table below includes the 87 properties at which Sears Holdings had exercised its termination rights under the Original Master Lease prior to its rejection on March 12, 2019:

					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Antioch, CA		95,200	August 2018	December 2018
Columbus, MS		117,100	August 2018	December 2018
Dayton, OH		148,800	August 2018	December 2018	Q2 2017
Flagstaff, AZ		66,200	August 2018	December 2018
Ft. Wayne, IN		213,600	August 2018	December 2018	Q3 2016 / Q3 2017
Jackson, MI		144,200	August 2018	December 2018
Manchester, NH		135,100	August 2018	December 2018	Q4 2018
Salem, NH		119,000	August 2018	December 2018	Q4 2017
Savannah, GA		155,700	August 2018	December 2018
Scott Depot, WV		89,800	August 2018	December 2018	Sold
Steger, IL		87,400	August 2018	December 2018
Victor, NY		115,300	August 2018	December 2018
West Jordan, UT		117,300	August 2018	December 2018	Q3 2016 / Q3 2018
Chesapeake, VA		169,400	June 2018	November 2018
Clay, NY		138,000	June 2018	November 2018
Havre, MT		94,700	June 2018	November 2018	Sold
Newark, CA		145,800	June 2018	November 2018
Oklahoma City, OK		173,700	June 2018	November 2018	Q3 2017
Troy, MI		271,300	June 2018	November 2018	Q3 2016
Virginia Beach, VA		86,900	June 2018	November 2018	Q3 2015
Madison, WI		88,100	June 2018	October 2018	Q2 2016
Thousand Oaks, CA		50,300	June 2018	October 2018	Q3 2015
Cedar Rapids, IA		141,100	April 2018	August 2018
Citrus Heights, CA		280,700	April 2018	August 2018
Gainesville, FL		140,500	April 2018	August 2018	Q2 2018
Maplewood, MN		168,500	April 2018	August 2018
Pensacola, FL		212,300	April 2018	August 2018	Q2 2018
Rochester, NY		128,500	April 2018	August 2018
Roseville, CA		121,000	April 2018	August 2018	Q2 2017 / Q1 2018
San Antonio, TX		187,800	April 2018	August 2018	Q4 2015
Warrenton, VA		113,900	April 2018	August 2018	Q1 2018
Westwood, TX		215,000	June 2017	January 2018 (1)	Q3 2018
Friendswood, TX		166,000	June 2017	November 2017 (1)
Albany, NY		216,200	June 2017	October 2017	Q1 2016
Burnsville, MN		161,700	June 2017	October 2017
Chicago, IL (N Harlem)		293,700	June 2017	October 2017
Cockeysville, MD		83,900	June 2017	October 2017	Q1 2017
East Northport, NY		187,000	June 2017	October 2017	Q2 2017
Greendale, WI		238,400	June 2017	October 2017	Q4 2017
Hagerstown, MD		107,300	June 2017	October 2017	Q1 2016 / Sold
Johnson City, NY		155,100	June 2017	October 2017
Lafayette, LA		194,900	June 2017	October 2017
Mentor, OH		208,700	June 2017	October 2017
Middleburg Heights, OH		351,600	June 2017	October 2017
Olean, NY		75,100	June 2017	October 2017	Q1 2017
Overland Park, KS		215,000	June 2017	October 2017
Roseville, MI		277,000	June 2017	October 2017	Q3 2016
Sarasota, FL		204,500	June 2017	October 2017
Toledo, OH		209,900	June 2017	October 2017
Warwick, RI		169,200	June 2017	October 2017	Q3 2016 / Q3 2017
York, PA		82,000	June 2017	October 2017	Sold
Chapel Hill, OH		187,179	January 2017	April 2017
Concord, NC		137,499	January 2017	April 2017
Detroit Lakes, MN		79,102	January 2017	April 2017
El Paso, TX		103,657	January 2017	April 2017	Q2 2018
Elkins, WV		94,885	January 2017	April 2017	Sold
Henderson, NV		122,823	January 2017	April 2017	Q1 2017
Hopkinsville, KY		70,326	January 2017	April 2017	Q1 2018
Jefferson City, MO		92,016	January 2017	April 2017	Q2 2017
Kenton, OH		96,066	January 2017	April 2017
Kissimmee, FL		112,505	January 2017	April 2017
Layton, UT		90,010	January 2017	April 2017	Q3 2018
Leavenworth, KS		76,853	January 2017	April 2017	Sold
Mt. Pleasant, PA		83,536	January 2017	April 2017	Q2 2018
Muskogee, OK		87,500	January 2017	April 2017	Sold
Owensboro, KY		68,334	January 2017	April 2017	Sold
Paducah, KY		108,244	January 2017	April 2017	Q3 2017
Platteville, WI		94,841	January 2017	April 2017	Sold
Riverside, CA (Iowa Ave.)		94,500	January 2017	April 2017
Sioux Falls, SD		72,511	January 2017	April 2017	Sold
Alpena, MI		118,200	September 2016	January 2017
Chicago, IL (S Kedzie)		118,800	September 2016	January 2017	Q3 2018
Cullman, AL		98,500	September 2016	January 2017	Q2 2017
Deming, NM		96,600	September 2016	January 2017
Elkhart, IN		86,500	September 2016	January 2017	Q4 2016
Harlingen, TX		91,700	September 2016	January 2017	Sold
Houma, LA		96,700	September 2016	January 2017	Sold
Kearney, NE		86,500	September 2016	January 2017	Q3 2016
Manistee, MI		87,800	September 2016	January 2017
Merrillville, IN		108,300	September 2016	January 2017	Q4 2016
New Iberia, LA		91,700	September 2016	January 2017	Q2 2017
Riverton, WY		94,800	September 2016	January 2017	Sold
Sault Sainte Marie, MI		92,700	September 2016	January 2017
Sierra Vista, AZ		86,100	September 2016	January 2017	Sold
Springfield, IL		84,200	September 2016	January 2017	Q3 2016
Thornton, CO		190,200	September 2016	January 2017	Q1 2017
Yakima, WA		97,300	September 2016	January 2017	Sold
Total square feet		11,728,387

(1) The Company and Sears Holdings agreed to extend occupancy beyond October 2017 under the existing Original Master Lease terms.

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2019

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees declared the following preferred stock dividends during 2019 and 2018:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2019
April 30	June 28	July 15	$	0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

Class A and Class C Common Share [Member]

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of Operating Partnership units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

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Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of Net Income (Loss) and Number of Common Shares Used in Computations of Basic Earnings Per Share

The table below provides a reconciliation of net income (loss) and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders, as they do not have economic rights.

(in thousands except per share amounts)	Three Months Ended March 31,
	2019			2018
Numerator
Net loss (income)	$	(10,894	)		16,201
Net income (loss) attributable to non-controlling interests		3,927			(5,873	)
Preferred dividends		(1,225	)		(1,228	)
Net income (loss) attributable to common shareholders	$	(8,192	)	$	9,100
Earnings allocated to unvested participating securities		—			(22	)
Net income (loss) available to common shareholders - Basic and diluted	$	(8,192	)	$	9,078
Denominator
Weighted average Class A common shares outstanding		35,671			33,673
Weighted average Class C common shares outstanding		—			1,741
Weighted average Class A and Class C common shares outstanding - Basic		35,671			35,414
Restricted shares and share units		—			87
Weighted average Class A and Class C common shares outstanding - Diluted		35,671			35,501
Net income (loss) per share attributable to Class A and Class C common    shareholders - Basic	$	(0.23	)	$	0.26
Net income (loss) per share attributable to Class A and Class C common    shareholders - Diluted	$	(0.23	)	$	0.26

XML

Share Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Restricted Share

The following table summarizes restricted share activity for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57
Restricted shares vested		(52,390	)		42.25
Restricted shares forfeited		(499	)		36.17
Unvested restricted shares at end of period		350,240			41.48

XML

Accounts Payable, Accrued Expenses and Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Payables And Accruals [Abstract]

Components of Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and accrued expenses	$	24,013	$	28,065
Accrued development expenditures		17,438		26,180
Dividends and distributions payable		15,668		15,758
Below-market leases		11,947		12,281
Accrued real estate taxes		10,760		14,108
Environmental reserve		9,477		9,477
Lease Liability		8,368		—
Unearned tenant reimbursements		7,530		10,975
Prepaid rental income		6,773		4,021
Accrued interest		4,978		4,978
Deferred maintenance		1,722		1,722
Total accounts payable, accrued expenses and    other liabilities	$	118,674	$	127,565

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Organization - Additional Information (Detail) $ in Billions			3 Months Ended
	Feb. 11, 2019 RetailFacility	Jun. 11, 2015 USD ($) Property JointVenture RetailFacility	Mar. 31, 2019 ft² shares Property JointVenture State	Mar. 12, 2019 ft²	Feb. 28, 2019 Property
Organization And Basis Of Presentation [Line Items]
Number of joint venture acquired | JointVenture			27
Operations Commenced Date			Jul. 07, 2015
Number of properties interested in the portfolio			225
Area of real estate property (in square feet) | ft²			35,600,000	11,728,387
Number of states in properties located | State			46
Number of properties			27
Joint Venture Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²			4,800,000
Number of states in properties located | shares			13
Number of properties			27
Joint Venture Properties [Member] | Original Joint Venture Master Leases [Member]
Organization And Basis Of Presentation [Line Items]
Number of properties leased			19
Wholly Owned Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²			30,800,000
Number of wholly owned properties			198
Number of states in properties located | State			46
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price | $		$ 2.7
Number of real estate properties acquired		234
Number of ground leased properties acquired		1
Interests in joint ventures acquired		50.00%
Number of joint venture acquired | JointVenture		3
Sears Holdings Corporation [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities | RetailFacility		28
Sears Holdings Corporation [Member] | Original Master Lease [Member]
Organization And Basis Of Presentation [Line Items]
Number of acquired properties leased		224
Sears Holdings Corporation [Member] | Joint Venture Properties [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities subject to ground lease | RetailFacility		1
Number of retail facilities subject to lease | RetailFacility		2
Sears Holdings Corporation [Member] | Joint Venture Properties [Member] | Original Joint Venture Master Leases [Member]
Organization And Basis Of Presentation [Line Items]
Number of acquired properties leased		31
Holdco [Member]
Organization And Basis Of Presentation [Line Items]
Number of real estate properties acquired | RetailFacility	425
Holdco Master Lease [Member]
Organization And Basis Of Presentation [Line Items]
Master lease executed, number of acquired properties					51
Holdco Master Lease [Member] | Wholly Owned Properties [Member]
Organization And Basis Of Presentation [Line Items]
Number of wholly owned properties			51

XML

Summary of Significant Accounting Policies - Additional Information (Detail)		3 Months Ended
	Jun. 11, 2015 JointVenture	Mar. 31, 2019 USD ($) Property JointVenture State Segment	Mar. 31, 2018 USD ($) shares	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	Aug. 29, 2018 shares	Dec. 31, 2017 shares
Summary Of Significant Accounting Policies [Line Items]
Number of reportable segments | Segment		1
Impairment loss on real estate assets		$ 0	$ 0
Interest sold in number of properties | Property		8
Net proceeds from sale of real estate		$ 37,569,000	60,435,000
Gain on sale of real estate		21,261,000	41,831,000
Real estate held for sale, assets		7,510,000			$ 3,094,000
Real estate held for sale, liabilities		0			0
Impairment loss		0	0
Restricted cash		$ 0	$ 177,419,000
Revenue performance obligation satisfied over time method used description		Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation.
Number of wholly owned properties acquired | Property		198
Number of joint venture properties acquired | JointVenture		27
Number of states in properties located | State		46
Right-of-use assets		$ 8,600,000
Lease liabilies		8,600,000
ASU 2016-02 [Member]
Summary Of Significant Accounting Policies [Line Items]
Right-of-use assets				$ 8,400,000
Lease liabilies				$ 8,400,000
Capitalized internal leasing and legal leasing costs		1,300,000
Below-market lease right of use asset		11,005
Class C Common Shares [Member]
Summary Of Significant Accounting Policies [Line Items]
Common shares, outstanding | shares			372,000			0	3,151,000
Interest Rate Cap [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest rate caps purchased		$ 5,000,000
Derivative, term of contract		4 years
Notional amount		$ 1,261,000,000
Derivative strike rate		3.50%
Interest rate caps outstanding		$ 0			$ 0
Derivative gain		$ 0	$ 200,000
Sears Holdings Corporation [Member]
Summary Of Significant Accounting Policies [Line Items]
Right to recapture property space		100.00%
Number of joint venture properties acquired | JointVenture	3
Management and Other Fee Income [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of revenue earned from unconsolidated joint ventures		100.00%
Sale of Seven Properties [Member]
Summary Of Significant Accounting Policies [Line Items]
Net proceeds from sale of real estate		$ 38,800,000
Gain on sale of real estate		$ 21,500,000
Operating Partnership [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent		63.90%

XML

Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	3 Months Ended
	Mar. 31, 2019
Minimum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	25 years
Minimum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Maximum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Maximum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	15 years

XML

Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	$ 101,452		$ 123,656
Identified intangible liability, net of accumulated amortization	11,947		12,281
Amortization of below-market leases, net of above-market leases	100	$ 200
Additional property expense	50	50
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	97,745		$ 108,662
Amortization expense of intangible assets	$ 10,300	$ 18,000

XML

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 260,275	$ 287,001
Accumulated Amortization	(158,823)	(163,345)
Balance	101,452	123,656
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	253,149	266,897
Accumulated Amortization	(155,404)	(158,235)
Balance	97,745	108,662
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	7,126	8,338
Accumulated Amortization	(3,419)	(4,400)
Balance	$ 3,707	3,938
Below-Market Ground Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset		11,766
Accumulated Amortization		(710)
Balance		$ 11,056

XML

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Below Market Lease Net [Abstract]
Gross Liability	$ 16,652	$ 19,720
Accumulated Amortization	(4,705)	(7,439)
Balance	$ 11,947	$ 12,281

XML

Lease Intangible Assets and Liabilities - Schedule of Future Amortization of Intangibles (Detail) - Above-Market Leases, Net [Member] $ in Thousands	Mar. 31, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	$ 288
2020	191
2021	123
2022	157
2023	$ 207

XML

Lease Intangible Assets and Liabilities - Schedule of Future Amortization for Below-Market Ground Lease (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Below Market Lease Amortization Income Maturity Schedule [Abstract]
Remainder of 2019	$ 152
2020	203
2021	203
2022	203
2023	$ 203

XML

Lease Intangible Assets and Liabilities - Schedule of Future Estimated Amortization of Acquired In-Place Leases (Detail) - In-Place Leases, Net [Member] $ in Thousands	Mar. 31, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	$ 12,060
2020	14,494
2021	14,000
2022	13,727
2023	$ 12,730

XML

Investments in Unconsolidated Joint Ventures - Summary of Company's Investments in Unconsolidated Joint Ventures (Detail)	3 Months Ended
	Mar. 31, 2019 ft² Property
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	27
Total GLA | ft²	4,855,600
Brookfield Properties Retail I [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	4
Total GLA | ft²	598,200
Brookfield Properties Retail II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	5
Total GLA | ft²	1,168,000
The Macerich Company [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	9
Total GLA | ft²	1,572,000
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	5
Total GLA | ft²	872,200
Invesco Real Estate [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.10%
Number of properties | Property	1
Total GLA | ft²	96,400
Invesco Real Estate II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	1
Total GLA | ft²	226,200
First Washington Realty [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	1
Total GLA | ft²	163,600
Greenberg Gibbons [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of properties | Property	1
Total GLA | ft²	159,000

XML

Investments in Unconsolidated Joint Ventures - Additional Information (Detail) - USD ($)				3 Months Ended
	Mar. 29, 2019	May 18, 2018	Mar. 20, 2018	Mar. 31, 2019	Mar. 31, 2018	May 31, 2018
Schedule Of Equity Method Investments [Line Items]
Cash proceeds from sale of real estate				$ 37,569,000	$ 60,435,000
Gain on sale of real estate				21,261,000	41,831,000
Joint venture impairment charges				0	0
West Hartford JV [Member]
Schedule Of Equity Method Investments [Line Items]
Income earned from servicing activities				$ 282,000	$ 0
Santa Monica, CA [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage					50.10%
West Hartford, CT [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage						50.00%
Cockeysville, MD [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage				50.00%
Invesco Real Estate [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage				50.10%
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member]
Schedule Of Equity Method Investments [Line Items]
Percentage of interest sold			49.90%
Initial contribution value			$ 90,000,000
Pre-transaction development and other costs			10,400,000
Cash proceeds from sale of real estate			50,100,000
Gain on sale of real estate			$ 38,800,000
Real estate investment, ownerhip interest retained percentage			50.10%
Gain on sale of real estate investment, ownership interest			$ 19,400,000
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member] | Maximum [Member]
Schedule Of Equity Method Investments [Line Items]
Investment in joint venture revaluation date			Dec. 31, 2020
Final contribution value			$ 105,000,000
Gain on sale of real estate based on final contribution value			53,800,000
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member] | Minimum [Member]
Schedule Of Equity Method Investments [Line Items]
Final contribution value			60,000,000
Gain on sale of real estate based on final contribution value			8,800,000
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member] | ASU 2017-05 [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, gain from increase in fair value			$ 19,400,000
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member]
Schedule Of Equity Method Investments [Line Items]
Percentage of interest sold		50.00%
Initial contribution value		$ 25,000,000
Pre-transaction development and other costs		20,200,000
Cash proceeds from sale of real estate		22,600,000
Gain on sale of real estate		1,200,000
Real estate investment, gain from increase in fair value		600,000
Gain on sale of real estate investment, ownership interest		$ 600,000
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member] | Maximum [Member]
Schedule Of Equity Method Investments [Line Items]
Investment in joint venture revaluation date		Dec. 31, 2019
Final contribution value		$ 29,600,000
Gain on sale of real estate based on final contribution value		5,800,000
Real estate tax adjustment amount		4,600,000
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member] | Minimum [Member]
Schedule Of Equity Method Investments [Line Items]
Final contribution value		20,400,000
Gain on sale of real estate based on final contribution value		$ 3,400,000
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member] | ASU 2017-05 [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage		50.00%
Invesco Real Estate [Member] | Cockeysville, MD [Member] | Cockeysville JV [Member]
Schedule Of Equity Method Investments [Line Items]
Percentage of interest sold	50.00%
Initial contribution value	$ 12,500,000
Pre-transaction development and other costs	6,200,000
Cash proceeds from sale of real estate	9,300,000
Gain on sale of real estate	3,800,000
Real estate investment, gain from increase in fair value	1,900,000
Gain on sale of real estate investment, ownership interest	$ 1,900,000
Invesco Real Estate [Member] | Cockeysville, MD [Member] | Cockeysville JV [Member] | ASU 2017-05 [Member]
Schedule Of Equity Method Investments [Line Items]
Real estate investment, ownerhip interest retained percentage	50.00%

XML

Investments in Unconsolidated Joint Ventures - Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
ASSETS
Land	$ 329,349		$ 321,853
Buildings and improvements	516,723		508,302
Accumulated depreciation	(76,439)		(72,239)
Investment in real estate, gross	769,633		757,916
Construction in progress	88,628		78,227
Net investment in real estate	858,261		836,143
Cash and cash equivalents	16,266		14,741
Tenant and other receivables, net	5,037		5,220
Other assets, net	39,733		38,285
Total assets	919,297		894,389
LIABILITIES AND MEMBERS INTERESTS
Mortgage loans payable, net	13,805		10,406
Accounts payable, accrued expenses and other liabilities	60,518		71,791
Total liabilities	74,323		82,197
Members Interest
Additional paid in capital	842,986		833,168
Retained earnings	1,988		(20,976)
Total members interest	844,974		812,192
Total liabilities and members interest	919,297		$ 894,389
Total revenue	11,218	$ 11,227
Property operating expenses	(2,598)	(1,712)
Depreciation and amortization	(5,253)	(7,586)
Operating income	3,367	1,929
Other expenses	(922)	(7,094)
Net (loss) income	2,445	(5,165)
Equity in (loss) income of unconsolidated joint ventures	$ 1,222	$ (2,582)

XML

Leases - Additional Information (Detail)		3 Months Ended
	Feb. 28, 2019 USD ($) Lease Option	Mar. 31, 2019 USD ($) Property	Mar. 31, 2018 USD ($)	Mar. 12, 2019 Property
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of properties subject to ground lease		1
Number of properties subject to corporate office lease		1
ROU assets | $		$ 8,600,000
Lease liabilities | $		8,600,000
Increase in ROU assets | $		$ 11,000,000
Operating leases expiration year		2073
Right to recapture property space exercised		100.00%
Number of real estate properties acquisition exercised		70
Number of terminated properties commenced or completed for redevelopment		39
Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space		100.00%
General and Administrative Expenses [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense | $		$ 285,000	$ 176,000
Property operating expense [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense | $		$ 11,000	11,000
Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease expiration date	Jul. 31, 2025
Number of options for renewal of lease | Option	3
Renewal period of leases	5 years
Final option renewal period	4 years
Number of renewal term that will be increased | Lease	2
Percentage of increase annual lease rent	2.00%
Rent credit allocation description		The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018.
Right to recapture property space		50.00%
Number of real estate specified properties		5
Lease termination, description		Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses. Additionally, unlike the Original Master Lease, beginning in the second year of the term of the Holdco Master Lease, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year. As of March 31, 2019, Holdco had not exercised any of its termination rights under the Holdco Master Lease.
Number of properties right to terminate without termination fee second year		16
Number of properties right to terminate without termination fee third year		12
Number of properties right to terminate without termination fee fourth year		10
Holdco Master Lease [Member] | Maximum [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease adjustment in form of rent credit | $	$ 12,000,000
Original and Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Straight-line rental income | $		$ 500,000	$ 500,000
Original Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space		100.00%
Number of properties to recapture		10
Right to recapture property space exercised		100.00%
Master Lease [Member] | Sears Holdings Corporation [Member] | Lease Terminations [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of terminated properties announced for redevelopment				87

XML

Leases - Summary of Revenue from Master Lease (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property Subject to or Available for Operating Lease [Line Items]
Fixed lease revenue	$ 28,989
Variable lease revenue	11,129
Total rental revenue	40,118
Original and Holdco Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Fixed lease revenue	12,288	$ 22,531
Variable lease revenue	8,398	13,442
Total rental revenue	$ 20,686	$ 35,973

XML

Leases - Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Remainder of 2019	$ 76,637
2020	104,249
2021	106,925
2022	106,006
2023	101,240
2024	98,470
Thereafter	332,817
Total Lease Payments	$ 926,344
2019		$ 120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments		$ 1,026,768

XML

Leases - Components of Lease Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessor Disclosure [Abstract]
Fixed lease revenue	$ 28,989
Variable lease revenue	11,129
Total rental revenue	$ 40,118

XML

Leases - Information Related to Measurement of Lease Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessee Disclosure [Abstract]
Weighted average remaining lease term (in years)	11 years 3 months 14 days
Weighted average discount rate	7.19%
Cash paid for operating leases	$ 501

XML

Leases - Summary of Recapture Rights Exercised by the Company (Detail)	3 Months Ended
	Mar. 31, 2019
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Hialeah, FL (Westland) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto Center
Notice Date(s)	2018-09
Cape Girardeau, MO [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
Fresno, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2018-05
Asheville, NC [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
Temecula, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-06
Cockeysville, MD [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-03
Doral, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
Ft. Wayne, IN Property 1 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Out parcel
Notice Date	September 2017 / July 2016
Roseville, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2017-06
North Miami, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-03
Chicago, IL (Six Corners) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
Clearwater, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
St. Clair Shores, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-09
North Riverside, IL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-06
Olean, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-03
Gillette, WY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
El Cajon, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
Watchung, NJ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-06
Carson, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	April 2017 / December 2016
Happy Valley, OR [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
Fairfield, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	March 2018 / December 2017
Redmond WA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	March 2018 / September 2017
Canton, OH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-06
Saugus, MA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-12
Houston, TX (Memorial City) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
Oklahoma City, OK [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Out parcel
Notice Date(s)	2018-03
Dayton, OH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2017-06
Guaynabo, PR [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-12
Santa Cruz, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	September 2018 / December 2016
Plantation, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	March 2018 / December 2017
Vancouver, WA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-09
San Diego, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-04
Santa Monica, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2016-12
Reno, NV [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
Aventura, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-04
Roseville, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-11
Tucson, AZ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2018-03
Troy, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-11
Anchorage, AK [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-12
Charleston, SC [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	April 2017 / October 2016
Boca Raton, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-12
Rehoboth Beach, DE [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-10
Westminster, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-12
Valley View, TX [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-04
Hicksville, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-12
Warwick, RI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2016-10
Orland Park, IL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-12
West Hartford, CT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2016-10
Florissant, MO [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Out parcel
Notice Date(s)	2017-12
North Hollywood, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-07
Salem, NH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Out parcel
Notice Date(s)	2017-12
Anderson, SC [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	April 2017 / July 2016
Las Vegas, NV [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-12
Madison, WI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2016-07
Yorktown Heights, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date(s)	2017-12
Orlando, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2016-07
Austin, TX (Tech Ridge) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	December 2017 / September 2017
West Jordan, UT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial + auto center
Notice Date(s)	2016-07
North Little Rock, AR [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto Center
Notice Date(s)	2017-09
St. Petersburg, FL (Tyrone Square) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2016-10
Albany, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2016-05
Bowie, MD [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2016-05
Fairfax, VA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	September 2018 / May 2016
Hagerstown, MD [member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2016-05
Wayne, NJ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial + auto center
Notice Date(s)	2016-05
San Antonio, TX [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date(s)	2016-03
Memphis, TN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2015-12
Honolulu, HI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2015-12
Braintree, MA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2015-11
Hialeah, FL (freestanding) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date(s)	2017-04

XML

Leases - Summary of Recapture Rights Exercised by the Company (Parenthetical) (Detail)	Mar. 31, 2019	May 31, 2018	Mar. 31, 2018	Jul. 31, 2017
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
San Diego, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Percentage of joint ventures ownership interest retained		50.00%
Santa Monica, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Percentage of joint ventures ownership interest retained			50.10%
Cockeysville, MD [Member]
Property Subject to or Available for Operating Lease [Line Items]
Percentage of joint ventures ownership interest retained	50.00%
Wayne, NJ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Percentage of joint ventures ownership interest retained				50.00%
West Hartford, CT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Percentage of joint ventures ownership interest retained		50.00%

XML

Leases - Summary of Termination and Redevelopement Properties (Detail) - ft²	Mar. 12, 2019	Mar. 31, 2019
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	11,728,387	35,600,000
Antioch, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	95,200
Notice	2018-08
Termination	2018-12
Columbus, MS [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	117,100
Notice	2018-08
Termination	2018-12
Dayton, OH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	148,800
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Q2 2017
Flagstaff, AZ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	66,200
Notice	2018-08
Termination	2018-12
Ft. Wayne, IN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	213,600
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Q3 2016 / Q3 2017
Jackson, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	144,200
Notice	2018-08
Termination	2018-12
Manchester, NH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	135,100
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Q4 2018
Salem, NH [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	119,000
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Q4 2017
Savannah, GA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	155,700
Notice	2018-08
Termination	2018-12
Scott Depot, WV [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	89,800
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Sold
Steger, IL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	87,400
Notice	2018-08
Termination	2018-12
Victor, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	115,300
Notice	2018-08
Termination	2018-12
West Jordan, UT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	117,300
Notice	2018-08
Termination	2018-12
Announced Redevelopment	Q3 2016 / Q3 2018
Chesapeake, VA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	169,400
Notice	2018-06
Termination	2018-11
Clay, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	138,000
Notice	2018-06
Termination	2018-11
Havre, MT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,700
Notice	2018-06
Termination	2018-11
Announced Redevelopment	Sold
Newark, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	145,800
Notice	2018-06
Termination	2018-11
Oklahoma City, OK [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	173,700
Notice	2018-06
Termination	2018-11
Announced Redevelopment	Q3 2017
Troy, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	271,300
Notice	2018-06
Termination	2018-11
Announced Redevelopment	Q3 2016
Virginia Beach, VA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	86,900
Notice	2018-06
Termination	2018-11
Announced Redevelopment	Q3 2015
Madison, WI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	88,100
Notice	2018-06
Termination	2018-10
Announced Redevelopment	Q2 2016
Thousand Oaks, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	50,300
Notice	2018-06
Termination	2018-10
Announced Redevelopment	Q3 2015
Cedar Rapids, IA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	141,100
Notice	2018-04
Termination	2018-08
Citrus Heights, CA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	280,700
Notice	2018-04
Termination	2018-08
Gainesville, FL [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	140,500
Notice	2018-04
Termination	2018-08
Announced Redevelopment	Q2 2018
Maplewood, MN [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	168,500
Notice	2018-04
Termination	2018-08
Pensacola, FL [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	212,300
Notice	2018-04
Termination	2018-08
Announced Redevelopment	Q2 2018
Rochester, NY [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	128,500
Notice	2018-04
Termination	2018-08
Roseville, CA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	121,000
Notice	2018-04
Termination	2018-08
Announced Redevelopment	Q2 2017 / Q1 2018
San Antonio, TX [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	187,800
Notice	2018-04
Termination	2018-08
Announced Redevelopment	Q4 2015
Warrenton, VA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	113,900
Notice	2018-04
Termination	2018-08
Announced Redevelopment	Q1 2018
Westwood, TX [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	215,000
Notice	2017-06
Termination	2018-01
Announced Redevelopment	Q3 2018
Friendswood, TX [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	166,000
Notice	2017-06
Termination	2017-11
Albany, NY [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	216,200
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q1 2016
Burnsville, MN [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	161,700
Notice	2017-06
Termination	2017-10
Chicago, IL (N Harlem) [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	293,700
Notice	2017-06
Termination	2017-10
Cockeysville, MD [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	83,900
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q1 2017
East Northport, NY [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	187,000
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q2 2017
Greendale, WI [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	238,400
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q4 2017
Hagerstown, MD [member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	107,300
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q1 2016 / Sold
Johnson City, NY [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	155,100
Notice	2017-06
Termination	2017-10
Lafayette, LA [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	194,900
Notice	2017-06
Termination	2017-10
Mentor, OH [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	208,700
Notice	2017-06
Termination	2017-10
Middleburg Heights, OH [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	351,600
Notice	2017-06
Termination	2017-10
Olean, NY [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	75,100
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q1 2017
Overland Park, KS [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	215,000
Notice	2017-06
Termination	2017-10
Roseville, MI [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	277,000
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q3 2016
Sarasota, FL [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	204,500
Notice	2017-06
Termination	2017-10
Toledo, OH [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	209,900
Notice	2017-06
Termination	2017-10
Warwick, RI [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	169,200
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Q3 2016 / Q3 2017
York, PA [Member] | Lease Terminations [Member] | Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	82,000
Notice	2017-06
Termination	2017-10
Announced Redevelopment	Sold
Chapel Hill, OH [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	187,179
Notice	2017-01
Termination	2017-04
Concord, NC [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	137,499
Notice	2017-01
Termination	2017-04
Detroit Lakes, MN [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	79,102
Notice	2017-01
Termination	2017-04
El Paso, TX [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	103,657
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q2 2018
Elkins, WV [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,885
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Henderson, NV [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	122,823
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q1 2017
Hopkinsville, KY [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	70,326
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q1 2018
Jefferson City, MO [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	92,016
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q2 2017
Kenton, OH [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	96,066
Notice	2017-01
Termination	2017-04
Kissimmee, FL [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	112,505
Notice	2017-01
Termination	2017-04
Layton, UT [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	90,010
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q3 2018
Leavenworth, KS [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	76,853
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Mt. Pleasant, PA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	83,536
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q2 2018
Muskogee, OK [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	87,500
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Owensboro K Y [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	68,334
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Paducah, KY [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	108,244
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Q3 2017
Platteville, WI [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,841
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Riverside, CA (Iowa Ave.) [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,500
Notice	2017-01
Termination	2017-04
Sioux Falls, SD [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	72,511
Notice	2017-01
Termination	2017-04
Announced Redevelopment	Sold
Alpena, MI [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	118,200
Notice	2016-09
Termination	2017-01
Chicago, IL (S Kedzie) [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	118,800
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q3 2018
Cullman, AL [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	98,500
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q2 2017
Deming, NM [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	96,600
Notice	2016-09
Termination	2017-01
Elkhart, IN [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	86,500
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q4 2016
Harlingen, TX [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	91,700
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Sold
Houma, LA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	96,700
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Sold
Kearney, NE [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	86,500
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q3 2016
Manistee, MI [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	87,800
Notice	2016-09
Termination	2017-01
Merrillville, IN [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	108,300
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q4 2016
New Iberia, LA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	91,700
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q2 2017
Riverton, WY [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,800
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Sold
Sault Sainte Marie, MI [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	92,700
Notice	2016-09
Termination	2017-01
Sierra Vista, AZ [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	86,100
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Sold
Springfield, IL [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	84,200
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q3 2016
Thornton, CO [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	190,200
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Q1 2017
Yakima, WA [Member] | Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	97,300
Notice	2016-09
Termination	2017-01
Announced Redevelopment	Sold

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Debt - Additional Information (Detail) - Term Loan Facility [Member] - Berkshire Hathaway [Member] - USD ($)		3 Months Ended
	Jul. 31, 2018	Mar. 31, 2019
Debt Instrument [Line Items]
Date of senior secured term loan agreement	Jul. 31, 2018
Principal amount outstanding	$ 2,000,000,000	$ 1,600,000,000
Line of credit, maturity date		Jul. 31, 2023
Prepayment annual fee	4,000,000
Minimum rental income to achieve from tenants on annual basis to access incremental funding facility	200,000,000
Minimum rental income to achieve from tenants for succeeding four consecutive fiscal quarters to access incremental funding facility	200,000,000
Minimum net worth required for loan documentation	$ 1,200,000,000
Default interest rate on overdue amounts excess of base interest rate	2.00%
Debt issuance costs	$ 2,100,000
Unamortized debt issuance costs		$ 1,800,000
Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio for each fiscal quarter till June 30, 2021	1.00%
Fixed charge coverage ratio for each fiscal quarter after June 30, 2021	1.20%
Unencumbered fixed charge coverage ratio for each fiscal quarter till June 30, 2021	1.05%
Unencumbered fixed charge coverage ratio to each fiscal quarter after June 30, 2021	1.30%
Maximum [Member]
Debt Instrument [Line Items]
Unencumbered fixed charge coverage ratio	60.00%
Maximum leverage ratio	65.00%
Initial Funding [Member]
Debt Instrument [Line Items]
Principal amount outstanding	$ 1,600,000,000
Debt instrument, base annual interest rate	7.00%
Incremental Funding Facility [Member]
Debt Instrument [Line Items]
Principal amount outstanding	$ 400,000,000
Debt instrument, base annual interest rate	1.00%

XML

Income Taxes - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Minimum [Member]
Income Tax Contingency [Line Items]
Distribution of taxable income to qualify as REIT, percent	90.00%

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Fair Value Measurements - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) DerivativeInstrument	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of derivative instruments | DerivativeInstrument	0
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Debt obligations, fair value	$ 1,600.0		$ 1,600.0
Interest Rate Cap [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative gain (loss)	$ 0.0	$ 0.2

XML

Commitments and Contingencies - Additional Information (Detail) - Sears Holdings Corporation [Member] - Subsquent Event [Member] $ in Millions	Apr. 18, 2019 USD ($)
Minimum [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 649
Maximum [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 749

XML

Related Party Disclosure - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Schedule of Other Related Party Transactions [Line Items]
Property development expenditures receivable	$ 41,740	$ 36,926
Unconsolidated Joint Ventures [Member]
Schedule of Other Related Party Transactions [Line Items]
Percentage of fees for service performed on revenue earned from management and other fee income	100.00%
Property development expenditures receivable	$ 2,900	$ 2,100
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Beneficiary Ownership interest percentage held by related party	74.10%
Ownership interest percentage held by related party	36.10%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member] | Class A Common Shares [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	2.70%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member] | Class B Non-Economic Common Shares [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	100.00%

XML

Non-controlling Interests - Additional Information (Detail) - Operating Partnership [Member]	Mar. 31, 2019
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	63.90%
ESL [Member]
Noncontrolling Interest [Line Items]
Ownership interest percentage held by related party	36.10%

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Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended	12 Months Ended
	Dec. 14, 2022	Mar. 31, 2019	Dec. 31, 2017	Dec. 31, 2018	Mar. 31, 2018
Class A Common Shares [Member]
Class of Stock [Line Items]
Shares vested		45,549
Shares withheld for employee income taxes		23,362
Common shares, issued		35,689,708		35,667,521
Common shares, outstanding		35,689,708	32,416,000	35,667,521	35,209,000
Class B Non-Economic Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued		1,322,365
Common shares, outstanding		1,322,365
Class C Non Voting Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued		0
Common shares, outstanding		0
Series A Cumulative Redeemable Preferred Shares [Member]
Class of Stock [Line Items]
Preferred shares, issued			2,800,000
Percentage of preferred dividend rate			7.00%
Preferred shares public offering price per share			$ 25.00
Net proceeds from public offering			$ 66.7
Series A Cumulative Redeemable Preferred Shares [Member] | Scenario, Forecast [Member]
Class of Stock [Line Items]
Preferred shares redemption price per share plus any accrued and unpaid dividends	$ 25.00
Series A Cumulative Redeemable Preferred Shares [Member] | Scenario, Forecast [Member] | Maximum [Member]
Class of Stock [Line Items]
Preferred shares redemption threshold period	120 days

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Shareholders' Equity - Summary of Common Stock Dividends and Distributions (Detail) - $ / shares						3 Months Ended
	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018	Mar. 31, 2019	Mar. 31, 2018
Dividends Payable [Line Items]
Dividends per Class A and Class C Common Share						$ 0.25	$ 0.25
Class A and Class C Common Share [Member]
Dividends Payable [Line Items]
Declaration Date	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018
Record Date	Mar. 29, 2019	Dec. 31, 2018	Sep. 28, 2018	Jun. 29, 2018	Mar. 30, 2018
Payment Date	Apr. 11, 2019	Jan. 10, 2019	Oct. 11, 2018	Jul. 12, 2018	Apr. 12, 2018
Dividends per Class A and Class C Common Share	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25

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Shareholders' Equity - Summary of Preferred Stock Dividends and Distributions (Detail) - $ / shares						1 Months Ended			3 Months Ended
	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018	Apr. 30, 2019	Dec. 31, 2017	[1]	Mar. 31, 2019	Mar. 31, 2018
Dividends Payable [Line Items]
Dividends per Series A Preferred Share									$ 0.4375	$ 0.4375
Series A Preferred Shares [Member]
Dividends Payable [Line Items]
Declaration Date	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018		Feb. 20, 2018
Record Date	Mar. 29, 2019	Dec. 31, 2018	Sep. 28, 2018	Jun. 29, 2018	Mar. 30, 2018		Mar. 30, 2018
Payment Date	Apr. 15, 2019	Jan. 14, 2019	Oct. 15, 2018	Jul. 16, 2018	Apr. 16, 2018		Apr. 16, 2018
Dividends per Series A Preferred Share	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750		$ 0.15556
Series A Preferred Shares [Member] | Subsquent Event [Member]
Dividends Payable [Line Items]
Declaration Date						Apr. 30, 2019
Record Date						Jun. 28, 2019
Payment Date						Jul. 15, 2019
Dividends per Series A Preferred Share						$ 0.43750

[1] This dividend covers the period from, and including, December 14, 2017 to December 31, 2017

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Earnings per Share - Reconciliation of Net Income (Loss) and Number of Common Shares Used in Computations of Basic Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator
Net loss (income)	$ (10,894)	$ 16,201
Net income (loss) attributable to non-controlling interests	3,927	(5,873)
Preferred dividends	(1,225)	(1,228)
Net (loss) income attributable to Seritage common shareholders	(8,192)	9,100
Earnings allocated to unvested participating securities		(22)
Net income (loss) available to common shareholders - Basic and diluted	$ (8,192)	$ 9,078
Denominator
Weighted average Class A and Class C common shares outstanding - Basic	35,671	35,414
Restricted shares and share units		87
Weighted average Class A and Class C common shares outstanding - Diluted	35,671	35,501
Net income (loss) per share attributable to Class A and Class C common shareholders - Basic	$ (0.23)	$ 0.26
Net income (loss) per share attributable to Class A and Class C common shareholders - Diluted	$ (0.23)	$ 0.26
Class A Common Shares [Member]
Denominator
Weighted average Class A and Class C common shares outstanding - Basic	35,671	33,673
Class C Common Shares [Member]
Denominator
Weighted average Class A and Class C common shares outstanding - Basic		1,741

XML

Earnings Per Share - Additional Information (Detail) - shares	Mar. 31, 2019	Dec. 31, 2018
Time Based Restricted Shares and Share Units [Member]
Earning Per Share [Line Items]
Non-vested restricted shares outstanding	350,240	403,129

XML

Share Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jul. 07, 2015
Time Based Restricted Shares and Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Restricted Share [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 6.6	$ 6.8
Unrecognized compensation costs, weighted average expected recognition period	1 year 7 months 6 days	2 years
Restricted Share [Member] | General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized	$ 1.5	$ 0.9
Seritage Growth Properties 2015 Share Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance			3,250,000

XML

Share Based Compensation - Summary of Restricted Share (Detail) - Restricted Share [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares at beginning of period | shares	403,129
Restricted shares vested | shares	(52,390)
Restricted shares forfeited | shares	(499)
Unvested restricted shares at end of period | shares	350,240
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period | $ / shares	$ 41.57
Weighted-Average Grant Date Fair Value, Restricted shares vested | $ / shares	42.25
Weighted-Average Grant Date Fair Value, Restricted shares forfeited | $ / shares	36.17
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period | $ / shares	$ 41.48

XML

Accounts Payable, Accrued Expenses and Other Liabilities - Components of Accounts Payable, Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Payables And Accruals [Abstract]
Accounts payable and accrued expenses	$ 24,013	$ 28,065
Accrued development expenditures	17,438	26,180
Dividends and distributions payable	15,668	15,758
Below-market leases	11,947	12,281
Accrued real estate taxes	10,760	14,108
Environmental reserve	9,477	9,477
Lease Liability	8,368
Unearned tenant reimbursements	7,530	10,975
Prepaid rental income	6,773	4,021
Accrued interest	4,978	4,978
Deferred maintenance	1,722	1,722
Total accounts payable, accrued expenses and other liabilities	$ 118,674	$ 127,565