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, 2021

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 23, 2021, the registrant had the following common shares outstanding:

Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	42,760,970
Class B common shares of beneficial interest, par value $0.01 per share	0
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, 2021

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	4
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	35
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
SIGNATURES		38

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, 2021			December 31, 2020
ASSETS
Investment in real estate
Land	$	571,334		$	592,770
Buildings and improvements		1,100,525			1,107,532
Accumulated depreciation		(146,884	)		(142,206	)
		1,524,975			1,558,096
Construction in progress		345,648			352,776
Net investment in real estate		1,870,623			1,910,872
Real estate held for sale		24,441			1,864
Investment in unconsolidated entities		459,576			457,033
Cash and cash equivalents		137,940			143,728
Restricted cash		6,526			6,526
Tenant and other receivables, net		33,964			46,570
Lease intangible assets, net		17,702			18,595
Prepaid expenses, deferred expenses and other assets, net		61,604			63,755
Total assets	$	2,612,376		$	2,648,943
LIABILITIES AND EQUITY
Liabilities
Term Loan Facility, net	$	1,599,015		$	1,598,909
Sales-leaseback financing obligations		20,582			20,425
Accounts payable, accrued expenses and other liabilities		121,379			146,882
Total liabilities		1,740,976			1,766,216
Commitments and contingencies (Note 9)
Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized;    40,587,226 and 38,896,428 shares issued and outstanding    as of March 31, 2021 and December 31, 2020, respectively		406			389
Series A preferred shares $0.01 par value; 10,000,000 shares authorized;    2,800,000 shares issued and outstanding as of March 31, 2021    December 31, 2020; liquidation preference of $70,000		28			28
Additional paid-in capital		1,200,874			1,177,260
Accumulated deficit		(537,582	)		(528,637	)
Total shareholders' equity		663,726			649,040
Non-controlling interests		207,674			233,687
Total equity		871,400			882,727
Total liabilities and equity	$	2,612,376		$	2,648,943

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,
	2021			2020
REVENUE
Rental income	$	31,146		$	33,110
Management and other fee income		135			207
Total revenue		31,281			33,317
EXPENSES
Property operating		10,643			10,301
Real estate taxes		10,155			9,225
Depreciation and amortization		13,142			34,097
General and administrative		11,232			9,420
Total expenses		45,172			63,043
Gain on sale of real estate, net		24,208			20,788
Impairment of real estate assets		(1,700	)		—
Equity in loss of unconsolidated entities		(1,162	)		(894	)
Interest and other income		7,624			333
Interest expense		(26,150	)		(21,513	)
Loss before taxes		(11,071	)		(31,012	)
Benefit for taxes		138			37
Net loss		(10,933	)		(30,975	)
Net loss attributable to non-controlling interests		3,213			10,311
Net loss attributable to Seritage	$	(7,720	)	$	(20,664	)
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to Seritage common shareholders	$	(8,945	)	$	(21,889	)
Net loss per share attributable to Seritage Class A    and Class C common shareholders - Basic	$	(0.23	)	$	(0.59	)
Net loss per share attributable to Seritage Class A    and Class C common shareholders - Diluted	$	(0.23	)	$	(0.59	)
Weighted average Class A and Class C common shares    outstanding - Basic		39,477			37,232
Weighted average Class A and Class C common shares    outstanding - Diluted		39,477			37,232

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)

	Class A Common				Class B Common						Series A Preferred				Additional Paid-In			Accumulated			Non- Controlling			Total
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2020		36,897	$	369		1,243		$	12			2,800	$	28	$	1,149,721		$	(418,711	)	$	311,951		$	1,043,370
Net loss		—		—		—			—			—		—		—			(20,664	)		(10,311	)		(30,975	)
Preferred dividends    declared ($0.4375 per share)		—		—		—			—			—		—		—			(1,225	)		—			(1,225	)
Vesting of restricted share units		75		1		—			—			—		—		(1	)		—			—			—
Share-based compensation		—		—		—			—			—		—		1,198			—			—			1,198
Share class surrenders (1,242,536 common shares)		—		—		(1,243	)		(12	)		—		—		12			—			—			—
OP Units exchanges    (1,650,000 units)		1,650		16		—			—			—		—		26,623			—			(26,639	)		—
Balance at March 31, 2020		38,622	$	386		—			—		$	2,800	$	28	$	1,177,553		$	(440,600	)	$	275,001		$	1,012,368
Balance at January 1, 2021		38,896	$	389		—		$	—			2,800	$	28	$	1,177,260		$	(528,637	)	$	233,687		$	882,727
Net loss		—		—		—			—			—		—		—			(7,720	)		(3,213	)		(10,933	)
Preferred dividends    declared ($0.4375 per share)		—		—		—			—			—		—		—			(1,225	)		—			(1,225	)
Vesting of restricted share units		32		—		—			—			—		—		—			—			—			—
Share-based compensation		—		—		—			—			—		—		969			—			—			969
OP Unit exchanges (1,658,855 units)		1,659		17		—			—			—		—		22,645			—			(22,800	)		(138	)
Balance at March 31, 2021		40,587	$	406		—		$	—			2,800	$	28	$	1,200,874		$	(537,582	)	$	207,674		$	871,400

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,
	2021			2020
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(10,933	)	$	(30,975	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of unconsolidated entities		1,162			894
Distributions from unconsolidated entities		1,042			46
Gain on sale of real estate, net		(24,208	)		(20,788	)
Impairment of real estate assets		1,700			—
Share-based compensation		911			1,179
Depreciation and amortization		13,142			34,097
Amortization of deferred financing costs		106			106
Amortization of above and below market leases, net		(39	)		(97	)
Straight-line rent adjustment		210			2,701
Change in operating assets and liabilities
Tenants and other receivables		294			(2,300	)
Prepaid expenses, deferred expenses and other assets		1,151			(124	)
Accounts payable, accrued expenses and other liabilities		3,352			5,061
Net cash used in operating activities		(12,110	)		(10,200	)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated entities		(9,902	)		(16,894	)
Distributions from unconsolidated entities		—			1,150
Net proceeds from sale of real estate		44,234			58,330
Development of real estate		(26,804	)		(73,610	)
Net cash provided by (used in) investing activities		7,528			(31,024	)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of sale-leaseback financing obligations		157			—
Purchase of shares related to stock grant recipients' tax withholdings		(138	)		(74	)
Preferred dividends paid		(1,225	)		(1,225	)
Net cash used in financing activities		(1,206	)		(1,299	)
Net decrease in cash and cash equivalents		(5,788	)		(42,523	)
Cash and cash equivalents, and restricted cash, beginning of period		150,254			139,260
Cash and cash equivalents, and restricted cash, end of period	$	144,466		$	96,737

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SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited, amounts in thousands)

	Three Months Ended March 31,
	2021			2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	27,999		$	28,311
Capitalized interest		2,954			7,914
Income taxes paid (refunded)		(138	)		5
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING    ACTIVITIES
Development of real estate financed with accounts payable	$	8,079		$	57,644
Preferred dividends declared and unpaid		1,225			1,225
Transfer to real estate assets held for sale		22,577			(2,071	)
Recording of right of use assets		—			1,598
Recording of lease liabilities		—			(1,598	)

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”) (NYSE: SRG), a Maryland real estate investment trust formed on June 3, 2015, is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(c) of the Internal Revenue Code (the “Code”).  Seritage’s assets are held by and its operations are primarily conducted, directly or indirectly, through Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”).  Under the partnership agreement of the Operating Partnership, Seritage, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.  Unless otherwise expressly stated or the context otherwise requires, the “Company” and “Seritage” refer to Seritage, the Operating Partnership and its owned and controlled subsidiaries.

Seritage is principally engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail and mixed-use properties throughout the United States.  As of March 31, 2021, the Company’s portfolio consisted of interests in 179 properties totaling approximately 26.0 million square feet of gross leasable area (“GLA”), including 154 wholly owned properties totaling approximately 24.1 million square feet of GLA across 41 states and Puerto Rico (the “Wholly Owned Properties”), and interests in 25 properties totaling approximately 1.9 million square feet of GLA across 13 states that are owned in unconsolidated entities (the “Unconsolidated Properties”).

The Company commenced operations on July 7, 2015, following a rights offering to the shareholders of Sears Holdings Corporation (“Sears Holdings” or “Sears”) to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of certain of Sears Holdings’ owned properties and its 50% interests in three joint ventures which were simultaneously leased back to Sears Holdings under a master lease agreement (the “Original Master Lease” and the “Original JV Master Leases”, respectively).

As of March 31, 2021, the Company did not have any remaining properties leased to Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments Inc., or Sears Holdings after giving effect to the termination of the remaining five Wholly Owned Properties, which were completed on March 15, 2021, as further described in Note 5, Leases.

COVID-19 Pandemic

Beginning in late 2019, a novel strain of Coronavirus (“COVID-19”) began to spread throughout the world, including the United States, ultimately being declared a pandemic by the World Health Organization. The pandemic has caused and continues cause significant impacts on the real estate industry in the United States, including the Company’s properties.

As of March 31, 2021, the Company had collected 97% of rental income for the three months ended March 31, 2021 and agreed to defer an additional 2%.  While the Company intends to enforce its contractual rights under its leases, there can be no assurance that tenants will meet their future obligations or that additional rental modification agreements will not be necessary.

As a result of the development, fluidity and uncertainty surrounding this situation, the Company expects that these conditions will change, potentially significantly, in future periods and results for the three months ended March 31, 2021 may not be indicative of the impact of the COVID-19 pandemic on the Company’s business for future periods.  As such, the Company cannot reasonably estimate the impact of COVID-19 on its financial condition, results of operations or cash flows over the foreseeable future.

Liquidity

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures.  Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the three months ended March 31, 2021 and the Company recorded net operating cash outflows of $12.1 million.  Additionally, the Company’s asset sales during the three months ended March 31, 2021 generated investing cash inflows of $44.2 million.

Obligations are projected to continue to exceed property rental income and the Company expects to fund such costs with a combination of capital sources including, cash on hand, and sales of Wholly Owned Properties, subject to any approvals that may be required under the Company’s Term Loan Facility, as described in Note 6, Debt.  Management has determined that it is probable its plans will be effectively implemented within one year after the date the condensed consolidated financial statements are issued and that these actions will provide the necessary cash flows to fund the Company’s obligations and development expenditures.

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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, 2020.  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, 2021 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2021.  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.

Where the Company has an interest in a VIE and 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 evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration events.  As of March 31, 2021 and December 31, 2020, the Company has several unconsolidated VIEs and 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, 2021, the Company holds a 72.6% 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.  As of April 23, 2021, the Company holds a 76.4% interest in 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 condensed consolidated balance sheets.

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.

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 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.

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:

Buildings:	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.

The Company, on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired.  If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real estate asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects and the effects of demand, competition, and other economic factors such as discount rates and market comparables.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  The Company recognized $1.7 million in impairment losses for the three months ended March 31, 2021 attributable to one property.  Such impairment losses are included within impairment of real estate assets on the condensed consolidated statements of operations.  No impairment losses were recognized for the three months ended March 31, 2020.

Real Estate Dispositions

When the Company disposes of all or a portion of a real estate asset, it recognizes a gain or loss on sale of real estate as the difference between the carrying value and consideration received.  Consideration consists of cash proceeds received and in certain circumstances, non-cash consideration which is typically in the form of equity in unconsolidated entities on the Company’s condensed consolidated statements of operations.  For more information on the Company’s unconsolidated entity transactions refer to Note 4.

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2021 and March 31, 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Dispositions to third parties
Gross proceeds	$	46.9	$	60.4
Gain on sale of real estate, net		24.2		20.8

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, 2021, three properties were classified as held for sale with assets of $24.4 million and no liabilities, and, as of December 31, 2020, one property was classified as held for sale with assets of $1.9 million and no liabilities.

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Investments in Unconsolidated Entities

The Company accounts for its investments in unconsolidated entities using the equity method of accounting as the Company exercises significant influence but does not have a controlling financial interest.  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 which include macroeconomic conditions, that the value of the Company’s investments in unconsolidated entities may be impaired.  An investment’s value is impaired 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, 2021 and 2020.

Restricted Cash

As of March 31, 2021, restricted cash represents cash received as proceeds for a sale which did not meet the criteria for sale accounting at March 31, 2021, as well as cash collateral for a letter of credit.

Rental Revenue Recognition and Tenant Receivables

Rental income is comprised of base rent and reimbursements of property operating expenses. The Company commences rental revenue recognition when the lessee takes control of the physical use of the leased asset based on evaluation of several factors. 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 straight-line rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets. 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.

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. Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectability of substantially all future lease payments from a specified lease is not probable of collection, at which point, the Company will begin recognizing revenue on a cash basis, based on actual amounts received. Any receivables that are deemed to be uncollectable are recognized as a reduction to rental income in the Company’s condensed consolidated statements of operations. If future circumstances change such that the Company believes that it is reasonably certain that the Company will collect all rental income remaining on such leases, the Company will resume accruing rental income and recognize a cumulative catch up for previously written-off receivables. The Company also recognizes a general reserve, as a reduction to rental income, for its portfolio of operating lease receivables which are not expected to be fully collectable.

The Company recorded an increase to rental income of $0.2 million and a reduction to rental income of $0.5 million during the three months ended March 31, 2021 and 2020, respectively, as a result of the Company’s evaluation of collectability.  In addition, the Company also recorded a reversal of previously recorded straight-line rent of $1.0 million for the three months ended March 31, 2021. No such reversals were recorded for the three months ended March 31, 2020. During the three months ended March 31, 2021, the Company recorded an increase to rental income of $0.1 million related to the allowance for deferral agreements.

Due to the COVID-19 pandemic, the Company has entered into amendments to existing leases with certain tenants (the “Rent Deferral Agreements”), that provide for the deferral of all or some portion of rental payments due during the period which such tenant was affected by the COVID-19 pandemic (“Deferred Rent”).  The Rent Deferral Agreements typically provide for repayment of the Deferred Rent within six to twelve months following the end of the rent deferral period and, in many instances, waive certain other conditions in favor of the Company while Deferred Rent is outstanding.  Deferred Rent generally becomes immediately due and payable under the Rent Deferral Agreements if the tenant does not make the minimum contractual payments or otherwise defaults on the lease.  We recognize lease concessions related to the COVID-19 pandemic such as rent deferrals and abatements in accordance with the Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease.  As a result, the Company has not adjusted accrued rental revenues or the portion of accrued rental revenues related to the straight-line method for the portion which has been deferred.  When the Deferred Rents are repaid, the Company will relieve the accrual in tenant and other receivables.

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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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Tenant and Other Receivables

Tenant and other receivables 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, as discussed above.  Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated entities.  In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.  

Property management fee income is reported at 100% of the revenue earned from such unconsolidated properties in management and other fee income on the condensed consolidated statements of operations.  The Company’s share of management expenses incurred by the unconsolidated entities is reported in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.  

Leasing and development fees are initially reported at the portion of revenue earned attributable to outside ownership of the related unconsolidated entities.  The Company’s share in leasing and development fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined 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 services, 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 within our unconsolidated entities 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 performance obligations, 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 obligations are typically satisfied at lease execution and tenant opening date, and revenue is recognized in accordance with the related agreement at the point in time when the obligation has been satisfied.

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.  Management believes the Company’s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk.  As of March 31, 2021, the Company’s portfolio of 154 Wholly Owned Properties and 25 Unconsolidated Properties was diversified by location across 41 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

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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.  As of December 31, 2020, all outstanding Class B common shares have been surrendered and there are currently no Class B common shares outstanding.

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

The Company has not adopted any Accounting Standards Updates (“ASU”) issued by the FASB during the three months ended March 31, 2021.

Note 3 – Lease Intangible Assets and Liabilities

The following tables summarize the Company’s 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, as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	35,452	$	(19,448	)	$	16,004
Above-market leases, net		3,925		(2,227	)	$	1,698
Total	$	39,377	$	(21,675	)	$	17,702

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,575	)	$	4,051
Total	$	6,626	$	(2,575	)	$	4,051

December 31, 2020
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	73,169	$	(56,369	)	$	16,800
Above-market leases, net		4,139		(2,344	)		1,795
Total	$	77,308	$	(58,713	)	$	18,595

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,440	)	$	4,186
Total	$	6,626	$	(2,440	)	$	4,186

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Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.1 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. Amortization of an acquired below-market ground lease resulted in additional property expense of $0.1 million for each of the three months ended March 31, 2021 and 2020, respectively. Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $0.8 million and $21.0 million for the three months ended March 31, 2021 and 2020, respectively. Future amortization of these leases intangibles is set forth below (in thousands):

	Below market leases, net			Below market ground lease		In-place leases
Remainder of 2021	$	10		$	152	$	2,260
2022		(58	)		203		2,787
2023		3			203		1,921
2024		27			203		1,385
2025		97			203		1,077
2026		190			203		724
Thereafter		2,084			9,433		5,850

Note 4 – Investments in Unconsolidated Entities

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

As of March 31, 2021, the Company had investments in ten unconsolidated entities as follows:

		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	4		520,400
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	3		474,100
MS Portfolio LLC    ("Macerich JV")	The Macerich Company	50.0%	7		1,266,600
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	50.0%	1		103,000
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		163,700
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons	50.0%	1		160,200
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management	50.0%	1		—
J&J Baldwin Park LLC    ("Carson Investment")	An affiliate of NewMark Merrilll Companies and other entities	20.0%	1		182,200
			25		3,968,600

The Company has contributed certain properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities. The contribution of property to unconsolidated entities is accounted for as a sale of real estate and the Company recognizes the gain or loss on the sale (the “Gain (Loss)”) based upon the transaction price attributed to the property at the closing of the unconsolidated entities transaction (the “Contribution Value”).  The gain or loss is included in gain on sale of real estate on the condensed consolidated statements of operations.  

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In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective unconsolidated entity agreements, which may result in an adjustment to the gain or loss recognized.  If the Contribution Value is subject to revaluation, the Company initially recognizes the gain or loss at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a quarterly basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the unconsolidated entity partners, as well as an adjustment to the initial gain or loss.  

Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the gain or loss for those unconsolidated entities subject to a revaluation.  The following table presents summarizes the properties contributed to the Company’s unconsolidated entities:

		March 31, 2021
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	60.0	$	8.8
2019
Cockeysville JV (2)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (3)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income based on signed leases and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million. During the year ended December 31, 2020 the Company adjusted the Contribution Value down to $60.0 million and reduced the Gain (Loss) by $30.0 million which is included in gain on sale of real estate on the consolidated statements of operations. The Company also recorded a $15.0 million reduction to the Mark 302 JV investment value and a $15.0 million payable related to the amounts due to its partner which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.  In addition, 2020, the Company and its partner entered into an agreement to extend the revaluation date for the Mark 302 JV to September 30, 2021. Pursuant to the terms of this agreement, the Company will pay its partner a fee of $1.1 million and the Contribution Value cannot be more than $90.0 million or less than $60.0 million. The Company will continue to re-evaluate the expected amount on a periodic basis through the final determination date.

(2) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the joint venture which was conditioned on certain milestones being met with respect to entitling the Additional Land Parcel for residential use. The Additional Land Parcel has been entitled for residential use. The Company has not reflected the contribution value of the Additional Land Parcel in the value of its investment in the Cockeysville JV based on uncertainty related to a potential alternative transaction with respect to the Additional Land Parcel. The Company will record an increased investment in the Cockeysville JV and additional gain in an amount equal to 50% of the fair value of the Additional Land Parcel at the earlier of when it becomes probable that the Additional Land Parcel will be contributed or upon an alternate outcome.

(3) The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

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

	March 31, 2021			December 31, 2020
ASSETS
Investment in real estate
Land	$	318,540		$	318,540
Buildings and improvements		492,335			492,973
Accumulated depreciation		(87,925	)		(81,730	)
		722,950			729,783
Construction in progress		228,349			222,663
Net investment in real estate		951,299			952,446
Cash and cash equivalents		18,785			16,094
Tenant and other receivables, net		5,584			4,104
Other assets, net		65,620			62,882
Total assets	$	1,041,288		$	1,035,526
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	34,675		$	34,672
Accounts payable, accrued expenses and other liabilities		42,627			48,405
Total liabilities		77,302			83,077
Members' Interest
Additional paid in capital		965,949			964,868
Retained earnings (accumulated deficit)		(1,963	)		(12,419	)
Total members' interest		963,986			952,449
Total liabilities and members' interest	$	1,041,288		$	1,035,526

	Three Months Ended March 31,
	2021			2020
Total revenue	$	7,729		$	5,341
Property operating expenses		(2,579	)		(2,737	)
Depreciation and amortization		(6,481	)		(3,687	)
Operating loss		(1,331	)		(1,083	)
Other expenses		(1,043	)		(489	)
Net loss	$	(2,374	)	$	(1,572	)
Equity in loss of unconsolidated    entities (1)	$	(1,162	)	$	(786	)

(1) Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

The Company shares in the profits and losses of these unconsolidated entities 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 entity that differ from the Company’s equity interest in the unconsolidated entity.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated entity recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated entity and the unconsolidated entity’s basis in those assets or other items.  There were no impairment charges related to the Unconsolidated Properties for the three months ended March 31, 2021 and 2020.

Unconsolidated Entity Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV, the UTC JV, and Tech Ridge JV.  The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its unconsolidated entities.  Refer to Note 2 for the Company’s accounting policies.  The Company also acted as the development manager for one of the properties in the GGP II JV which entitled the Company to receive certain development fees

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which ended as of March 31, 2021.  The Company earned $0.1 million and $0.2 million from these services for the three months ended March 31, 2021 and 2020, respectively.

Note 5 – Leases

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	66,971
2022		87,489
2023		80,770
2024		77,428
2025		77,156
2026		72,845
Thereafter		351,262
Total	$	813,921

The components of lease revenues for the three months ended March 31, 2021 and 2020 were as follows:

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	22,271	$	27,648
Variable rental income		9,046		8,066
Total rental income	$	31,317	$	35,714

Lessee Disclosures

The Company has one ground lease and multiple corporate office leases which are classified as operating leases.  As of March 31, 2021, and December 31, 2020, the outstanding amount of right-of-use, or ROU, assets were $18.6 million and $18.8 million, respectively.

The Company recorded rent expense related to leased corporate office space of $0.4 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively. Such rent expense is classified within general and administrative expenses on the condensed consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $0.1 million for the three months ended March 31, 2021 and 2020. Such ground rent expense is classified within property operating expenses on the condensed 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, 2021:

	As of March 31, 2021
Weighted average remaining lease term (in years)		9.69
Weighted average discount rate		6.99	%
Cash paid for operating leases (in thousands)	$	488

Sale-leaseback Financing Obligations

During the year ended December 31, 2020, the Company completed a sale-leaseback transaction of a property in Hialeah, Florida for $21.0 million which is included in sales-leaseback financing obligations on the condensed consolidated balance sheets.  As part of the sale-leaseback transaction, the Company agreed to lease all land and improvements on the land for a fixed term of 25 years at an initial base rent of $1.5 million per annum which will increase by 1.5% per year thereafter.  For the initial periods of the sale-leaseback, cash payments are less than the interest expense recognized, which causes the obligation to increase during the initial years of the lease term.  The implied interest rate is approximately 7.00%.  The Company has a purchase option during years four, five or seven of the 25-year term to reacquire, solely at the Company’s option, the Hialeah property at a predetermined price.  The Hialeah property

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continues to be reflected as a long-lived asset and depreciated over its remaining useful life.

Future sale-leaseback financing obligations as of March 31, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	1,082
2022		1,464
2023		1,486
2024		1,507
2025		1,531
2026		1,554
Thereafter		34,022
Interest		(22,064	)
Total	$	20,582

Original Master Lease and Holdco Master Lease

On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., executed the Holdco Master Lease (the “Holdco Master Lease”) which became effective on March 12, 2019 when the United States Bankruptcy Court for the Southern District of New York (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. The Holdco Master Lease provided 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. Under the terms of the Holdco Master Lease, Holdco had the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses. Sears Holdings exercised termination rights with respect to 87 properties under the Original Master Lease prior to its rejection on March 12, 2019 and Holdco exercised termination rights with respect to all remaining properties under the Holdco Master Lease during the year ended December 31, 2020, with the remaining five properties effective in March 2021.

Revenues from the Holdco Master Lease and the Original Master Lease for the three months ended March 31, 2021, and 2020 are as follows (excluding straight-line rental income for the three months ended March 31, 2021 and 2020 of $0 million and $(4.5) million, respectively).

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	-	$	4,288
Variable rental income		4,510		3,839
Total rental income	$	4,510	$	8,127

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 and includes a $400.0 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. The Term Loan Facility matures on July 31, 2023.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn.  The Company prepays the annual fee and amortizes the expense to interest expense on the condensed consolidated statements of operations.

As of March 31, 2021, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

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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 signed not yet open leases (“SNO Leases”) expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million, and (iii) the repayment by the Operating Partnership of any deferred interest permitted under the amendment to the Term Loan Agreement dated May 5, 2020 (as further described below).

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Operating Partnership.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Operating Partnership and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a 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. During 2019, mortgages were recorded on a majority of the Company’s portfolio and subsequent to March 31, 2021, mortgages have been recorded on nearly all properties.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 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 limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default.  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, 2021, 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, as of March 31, 2021, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. There can be no assurance that the lender will consent to future dispositions of assets. 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, 2021 and December 31, 2020, the unamortized balance of the Company’s debt issuance costs were $1.0 million and $1.1 million, respectively.

On May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million.  In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement).  Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on July 31, 2023; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding

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deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement.  The Company has paid all interest due under the Term Loan Agreement and has not deferred any interest as permitted under the amendment to the Term Loan Agreement.

Additionally, the amendment to the Term Loan Agreement provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Facility.

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 U.S. 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 U.S. federal income tax at regular corporate rates (including for any taxable year ended on or before December 31, 2017, any applicable alternative minimum tax) and any applicable state and local income taxes.  In addition, if the Company fails to qualify as a REIT, it may not be able to qualify as a REIT for four subsequent taxable years in some cases.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain U.S. state, local and Puerto Rico taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed REIT taxable income. The Company’s taxable REIT subsidiaries are subject to U.S. corporate income tax.

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.

Assets Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis on our condensed consolidated balance sheets consist of real estate assets that have been written down to estimated fair value and are classified as Level 3 within the fair value hierarchy.  The Company’s estimates of fair value are determined using discounted cash flow models, which consider, among other things, anticipated holding periods, current market conditions, potential development projects and utilize unobservable quantitative inputs, including appropriate capitalization and discount rates.  In addition, signed contracts or letters of intent from third parties are considered.

For the three months ended March 31, 2021 and 2020, in accordance with ASC 360-10, Property, Plant and Equipment, the Company recorded impairment losses of $1.7 million and $0 million, respectively, on real estate assets which are included in impairment on real estate assets within the condensed consolidated statements of operations.  The most significant inputs utilized in determining the fair value of these assets are capitalization rates and discount rates, which were each between 6.75% and 9.25% and market comparables for land and building.

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 the term loan facility.  The fair value of cash equivalents and restricted cash are classified as Level 1 and the fair value

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of term loan facility is classified as Level 2. Cash equivalents and restricted cash 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, 2021 and December 31, 2020, the estimated fair values of the Company’s debt obligations were $1.6 billion and $1.6 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

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties.  The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2027.

Insurance premiums are charged directly to each of the properties.  The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material.  The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.  However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.  

Under the Original Master Lease and the Holdco Master Lease, Holdco is required to indemnify the Company from certain environmental liabilities at the Wholly Owned Properties before or during the period in which each Wholly Owned Property was leased to Holdco, including removal and remediation of all affected facilities and equipment constituting the automotive care center.  In addition, an environmental reserve was funded at the closing of the transactions in connection with the Company commencing operations in the amount of approximately $12.0 million.  As of March 31, 2021 and December 31, 2020, the balance of the environmental reserve was approximately $9.5 million and $9.5 million, respectively, and is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets.

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 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 (the “Bankruptcy Court”) 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 (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 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.  

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating

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trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”).  For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the operative complaint in the Litigation relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination. Briefing and oral argument on the motions have been completed, and the parties are awaiting a decision.  

On March 15, 2021, the Court consolidated the Litigation with a case captioned Sears Holding Corp. et al. v. Andrew H. Tish, et al., Case No. 20-07007 (RDD) (the “Shareholder Litigation,” and, together with the Litigation, the “Consolidated Litigation”). The Shareholder Litigation was brought by the UCC, Sears Holdings Corporation, and Sears, Roebuck and Co., against certain shareholders of Sears Holdings or its related companies. Seritage was not named as a defendant in the Shareholder Litigation, which alleges, among other things, that certain transactions undertaken by Sears Holdings since 2014 (including 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) constituted actual and/or constructive fraudulent transfers and/or illegal dividends. The Company believes that the claims against the Seritage Defendants in the Consolidated Litigation are without merit and intends 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 and due to the current environment.  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, 2021, and December 31, 2020, the Company did not record any amounts for litigation or other matters.

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings.  Mr. Lampert is also the Chairman of Seritage.

As of March 31, 2021, Mr. Lampert beneficially owned a 27.4% interest in the Operating Partnership and approximately 4.2% of the outstanding Class A common shares.

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

Unconsolidated Entities

Certain unconsolidated entities have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated entities.  Refer to Note 2 for the Company’s accounting policies.

In addition, as of March 31, 2021, the Company had incurred $0.2 million of development expenditures at properties owned by certain unconsolidated entities for which the Company will be repaid by the respective unconsolidated entities.  These amounts are included in tenant and other receivables, net on the Company’s condensed consolidated balance sheets.  As of December 31, 2020, the Company had incurred $5.0 million of such 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 which was amended and restated on December 14, 2017.  Pursuant to this 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, 2021, the Company held a 72.6% interest in the Operating Partnership and ESL held a 27.4% 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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Note 12 – Shareholders’ Equity

Class A Common Shares

As of March 31, 2021, 40,587,226 Class A common shares were issued and outstanding. Class A shares have a par value of $0.01 per share. During the three months ended March 31, 2021, 1,658,855 Operating Partnership Units (“OP Units”) were issued and exchanged for an equal number of Class A shares.

Class B Non-Economic Common Shares

As of March 31, 2021, there were no Class B non-economic common shares issued and outstanding.

Class C Non-Voting Common Shares

As of March 31, 2021, there were no Class 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 $66.4 million, after deducting payment of the underwriting discount and offering expenses.

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 has not declared dividends on the Company’s Class A and Class C common shares during 2020 or 2021.

The Company’s Board of Trustees declared the following dividends on preferred shares during 2021 and 2020:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2021
April 27	June 30	July 15	$	0.43750
February 23	March 31	April 15		0.43750
2020
December 17	December 31	January 15, 2021	$	0.43750
September 17	September 30	October 15		0.43750
June 9	June 30	July 15		0.43750
February 18	March 31	April 15		0.43750

As previously disclosed, the Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2021.  The Company intends to, at a minimum, make distributions to its shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred Shares.

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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,
	2021			2020
Numerator - Basic and Diluted
Net loss		(10,933	)		(30,975	)
Net income attributable to non-controlling interests		3,213			10,311
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic    and diluted	$	(8,945	)	$	(21,889	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		39,477			37,232
Weighted average Class C common shares outstanding		—			—
Weighted average Class A and Class C common shares    outstanding - Basic		39,477			37,232
Restricted shares and share units		—			—
Weighted average Class A and Class C common shares    outstanding - Diluted		39,477			37,232
Net loss per share attributable to Class A and Class C    common shareholders - Basic	$	(0.23	)	$	(0.59	)
Net loss per share attributable to Class A and Class C    common shareholders - Diluted	$	(0.23	)	$	(0.59	)

No adjustments were made to the numerator for the three months ended March 31, 2021 or 2020 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, 2021 or 2020 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, 2021 and December 31, 2020, there were 216,179 and 157,465 shares, respectively, of non-vested restricted shares 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, and in some instances, the fourth anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-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, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares. See Note 2 for valuation information related to the grants of the awards that are subject to market-based vesting conditions.

The following table summarizes restricted share activity for the three months ended March 31, 2021:

	Three Months Ended March 31, 2021
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		157,465		$	38.73
Share units granted		157,390			21.86
Restricted shares vested		(90,195	)		33.70
Restricted shares forfeited		(8,481	)		36.75
Unvested restricted shares at end of period		216,179			28.62

The Company recognized $0.9 million and $1.2 million in compensation expense related to the restricted shares for the three months ended March 31, 2021 and 2020, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company’s condensed consolidated statements of operations.  

As of March 31, 2021, there were approximately $4.3 million of total unrecognized compensation costs related to the outstanding restricted shares which are expected to be recognized over a weighted-average period of approximately 2.5 years. As of March 31, 2020, there were approximately $9.2 million of total unrecognized compensation costs related to the outstanding restricted shares which were expected to be recognized over a weighted-average period of approximately 1.9 years.

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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,” “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, 2019 and in Part II, Item 1A of this Quarterly Report on Form 10-Q.  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 and mixed-use properties throughout the United States.  As of March 31, 2021, our portfolio consisted of interests in 179 properties totaling approximately 26.0 million square feet of gross leasable area (“GLA”), including 154 wholly owned properties totaling approximately 24.1 million square feet of GLA across 41 states and Puerto Rico (the “Wholly Owned Properties”), and interests in 25 properties totaling approximately 1.9 million square feet of GLA across 13 states that are owned in unconsolidated entities (the “Unconsolidated Properties”).

As of March 31, 2021, after giving effect to the termination of the Holdco Master Lease at the five remaining properties, the Company does not lease any properties to Holdco under the Holdco Master Lease.

COVID-19 Pandemic

Beginning in late 2019, a novel strain of Coronavirus (“COVID-19”) began to spread throughout the world, including the United States, ultimately being declared a pandemic by the World Health Organization. The pandemic has caused and continues cause significant impacts on the real estate industry in the United States, including the Company’s properties.

As of March 31, 2021, we had collected 97% of rental income for the three months ended March 31, 2021, and agreed to defer an additional 2%.  While we intend to enforce our contractual rights under our leases, there can be no assurance that tenants will meet their future obligations or that additional rental modification agreements will not be necessary.

As a result of the development, fluidity and uncertainty surrounding this situation, we expect that conditions will change, potentially significantly, in future periods and results for the three months ended March 31, 2021 may not be indicative of the impact of the COVID-19 pandemic on the Company’s business results for future periods.  As such, we cannot reasonably estimate the impact of COVID-19 on our financial condition, results of operations or cash flows over the foreseeable future.

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 fees, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense is on our term loan facility.  In addition, we incur substantial non-cash charges for depreciation of our properties and amortization of intangible assets and liabilities.

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Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021, as compared to the three months ended March 31, 2020 (in thousands):

	Three Months Ended March 31,
	2021			2020		$ Change
Revenue
Rental income	$	31,146		$	33,110	$	(1,964	)
Expenses
Property operating		10,643			10,301		342
Real estate taxes		10,155			9,225		930
Depreciation and amortization		13,142			34,097		(20,955	)
General and administrative		11,232			9,420		1,812
Gain on sale of real estate, net		24,208			20,788		3,420
Impairment of real estate assets		(1,700	)		—		(1,700	)
Interest expense		26,150			21,513		4,637

Rental Income

The following table presents the results for rental income for the three months ended March 31, 2021, as compared to the corresponding period in 2020 (in thousands):

	Three Months Ended March 31,
	2021						2020
	Rental Income			% of Total Rental Income			Rental Income			% of Total Rental Income			$ Change
Sears or Kmart	$	4,510			14.5	%	$	7,725			23.3	%	$	(3,215	)
Diversified tenants		26,807			86.1	%		27,989			84.5	%		(1,182	)
Straight-line rent		(210	)		-0.7	%		(2,701	)		-8.2	%		2,491
Amortization of above/below market leases		39			0.1	%		97			0.3	%		(58	)
Total rental income	$	31,146			100.0	%	$	33,110			100.0	%	$	(1,964	)

The decrease of $3.2 million in Sears or Kmart rental income for the three months ended March 31, 2021 was due to a reduction in the number of properties leased to Sears or Kmart under the Holdco Master Lease, as a result of terminations. For the quarter ended March 31, 2021, $4.5 million Sears or Kmart rental income relates to termination income and agreed-upon reimbursements. Sears no longer occupies space as of March 31, 2021.

The decrease of $1.2 million in diversified tenants rental income for the three months ended March 31, 2021 was due primarily to sold properties.

The increase of $2.5 million in straight-line rental income for the three months ended March 31, 2021 was due primarily to (i) the accelerated amortization of straight-line rent receivables as a result of termination activity under the Holdco Master Lease and (ii) the reversal of previously recorded straight-line rent that the Company deemed was improbable of being collected.

The decrease of $0.1 million in amortization of above/below market leases for the three months ended March 31, 2021 was due primarily to the termination of certain leases previously acquired by the Company.

Property Operating Expenses and Real Estate Taxes

The increase of $0.3 million in property operating expense for the three months ended March 31, 2021 was due primarily to an increase in utility and certain common area maintenance expenses at properties for which Sears or Kmart paid such expenses directly, also a decrease in amounts capitalized due to reduced development activity, partially offset by asset sales.

The increase of $0.9 million in real estate taxes for the three months ended March 31, 2021 was due primarily to an increase in assessed real estate taxes and a decrease in amounts capitalized due to reduced development activity, partially offset by asset sales.

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Depreciation and Amortization Expenses

The decrease of $21 million in depreciation and amortization expenses for the three months ended March 31, 2021 was due primarily to $19.1 million of accelerated depreciation during the three months ended March 31, 2020 resulting from non-Sears terminations and $3.9 million due to properties sold over the past 12 months.

General and Administrative Expenses

The increase of $1.8 million in general and administrative expenses for the three months ended March 31, 2021 was driven by an increase in legal and other expenses related to the Litigation (as described in Litigation and Other Matters below) and an increase in fees related to the annual financial statement audit.

Gain on Sale of Real Estate, Net

During the three months ended March 31, 2021, the Company sold four properties for aggregate consideration of $46.9 million and recorded gains totaling $24.2 million, which are included in gain on sale of real estate, net within the condensed consolidated statements of operations. 

Impairment of Real Estate Assets

During the three months ended March 31, 2021, the Company recognized $1.7 million in impairment of one real estate asset that the Company continues to hold which is included within the condensed consolidated statements of operations.

Interest Expense

The increase of $4.6 million in interest expense for the three months ended March 31, 2021 was driven by a decrease in amounts capitalized due to a decrease in project development activity.

Liquidity and Capital Resources

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures.  Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the three months ended March 31, 2021 and the Company recorded net operating cash outflows of $12.1 million.  Additionally, the Company’s asset sales during the three months ended March 31, 2021 generated investing cash inflows of $44.2 million.

Obligations are projected to continue to exceed property rental income and we expect to fund such obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to the following, subject to any approvals that may be required under the Term Loan Agreement:

- 28 -

• Sales of Wholly Owned Properties.  As of March 31, 2021, we had sold 73 Wholly Owned Properties, and additional outparcels at certain properties, and generated approximately $638.3 million of gross proceeds since we began our capital recycling program in July 2017.  Subsequent to March 31, 2021, we sold two Wholly Owned Properties for gross proceeds of $16.3 million and, as of April 30, 2021, had entered into contracts to sell additional assets for anticipated gross proceeds of $90.2 million, subject to buyer due diligence and closing conditions;

• Sales of interests in Unconsolidated Properties.  As of March 31, 2021, we had sold our interests in 15 Unconsolidated Properties and generated approximately $278.1 million of gross proceeds since July 2017.  Certain of our unconsolidated entity agreements also include rights that allow us to sell our interests in select Unconsolidated Properties to our partners at fair market value;

• New Unconsolidated Entities.  As of March 31, 2021, we had contributed interests in 11 properties to unconsolidated entities, which generated approximately $212.4 million of gross proceeds since July 2017.  In addition to generating liquidity upon closing, these entities also reduce our development expenditures by the amount of our partners’ interests in the unconsolidated entities;

• Unconsolidated entities debt.  We may incur property-level debt in new or existing unconsolidated entities, including construction financing for properties under development and longer-term mortgage debt for stabilized properties; and

• Other credit and capital markets transactions.  We may 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 previously disclosed, on May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million.  In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement).  Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on July 31, 2023; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement (the “Incremental Funding Facility”).

Additionally, the Term Loan Amendment provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement.

Our Term Loan Facility includes a $400.0 million Incremental Funding Facility, access to which is subject to rental income from non-Sears Holdings tenants of at least $200.0 million, on an annualized basis and after giving effect to SNO leases expected to commence rent payment within 12 months, which we have not yet achieved. There is no assurance of the Company’s ability to access the Incremental Funding Facility.  

Cash Flows for the Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

The following table summarizes the Company’s cash flow activities for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021			2020			$ Change
Net cash used in operating activities	$	(12,110	)	$	(10,200	)	$	(1,910	)
Net cash provided by (used in) investing activities		7,528			(31,024	)		38,552
Net cash used in financing activities		(1,206	)		(1,299	)		93

Cash Flows from Operating Activities

Significant components of net cash used in operating activities include:

In 2021, a decrease in rental income and a decrease in accounts payable, accrued expenses and other liabilities.

- 29 -

Cash Flows from Investing Activities

Significant components of net cash provided by (used in) investing activities include:

− In 2021, $44.2 million of net proceeds from the sale of real estate offset by development of real estate of ($26.8) million and investments in unconsolidated entities of ($9.9) million; and

− In 2020, development of real estate and property improvements of ($73.6) million and investments in unconsolidated entities of $(16.9) million, partially offset by $58.3 million of net proceeds from the sale of real estate.

Cash Flows from Financing Activities

Significant components of net cash used in by financing activities include:

− In 2021, cash payments of preferred dividends, ($1.2) million;

− In 2020, cash payments of preferred dividends, ($1.2) million.

Dividends and Distributions

The Company’s Board of Trustees has not declared dividends on the Company’s Class A and Class C common shares during the three months ended March 31, 2021.  

The Company’s Board of Trustees declared the following dividends on preferred shares during 2021 and 2020:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2021
April 27	June 30	July 15	$	0.43750
February 23	March 31	April 15		0.43750
2020
December 17	December 31	January 15, 2021	$	0.43750
September 17	September 30	October 15		0.43750
June 9	June 30	July 15		0.43750
February 18	March 31	April 15		0.43750

As previously disclosed, the Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2021.  The Company intends to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred shares.

Off-Balance Sheet Arrangements

The Company accounts for its investments in entities 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 entities.  As of March 31, 2021 and December 31, 2020, we did not have any off-balance sheet financing arrangements.

Contractual Obligations

There have been no significant changes in the contractual obligations disclosed in our Form 10-K for the year ended December 31, 2020.

Capital Expenditures

During the three months ended March 31, 2021 the Company invested $26.8 million in our consolidated development and operating properties and an additional $9.9 million into our unconsolidated joint ventures.

The Company also continued to advance its previously underway premier projects in Aventura (FL), Santa Monica (CA) and La Jolla (CA), and its pipeline of such projects, including its two previously announced multifamily projects, in Redmond (WA) and Dallas (TX), each of which represents the first phase of larger, mixed-use developments.  A multifamily project in Lynwood (WA) in an Unconsolidated Entity is also underway and has been scheduled for opening in the fourth quarter of 2021.

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During the three months ended March 31, 2021, we incurred maintenance capital expenditures of approximately $0.6 million that were not associated with retenanting and redevelopment projects.

During the three months ended March 31, 2020, we incurred maintenance capital expenditures of approximately $1.8 million that were not associated with retenanting and redevelopment projects.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated.  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 (the “Bankruptcy Court”) 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 (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 master lease agreement (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, 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.

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the operative complaint in the Litigation relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination.  Briefing and oral argument on the motions have been completed, and the parties are awaiting a decision.  

On March 15, 2021, the Court consolidated the Litigation with a case captioned Sears Holding Corp. et al. v. Andrew H. Tish, et al., Case No. 20-07007 (RDD) (the “Shareholder Litigation,” and, together with the Litigation, the “Consolidated Litigation”). The Shareholder Litigation was brought by the UCC, Sears Holdings Corporation, and Sears, Roebuck and Co., against certain shareholders of Sears Holdings or its related companies. Seritage was not named as a defendant in the Shareholder Litigation, which alleges, among other things, that certain transactions undertaken by Sears Holdings since 2014 (including 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) constituted actual and/or constructive fraudulent transfers and/or illegal dividends. We believe that the claims against the Seritage Defendants in the Litigation are without merit and intend to defend against them vigorously.

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On March 2, 2021, the Company brought a lawsuit in Delaware state court against QBE Insurance Corporation, Endurance American

Insurance Company, Allianz Global Risks US Insurance Company and Continental Casualty Company, each of which are D&O

insurance providers of the Company (the “D&O Insurers”). The Company’s lawsuit is seeking, among other things, declaratory relief

and money damages as a result of certain of the D&O Insurers refusal to pay certain costs and expenses related to the defense of the

Litigation discussed above.

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. 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 condensed consolidated financial position, results of operations or liquidity of the Company.

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, 2020 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the three months ended March 31, 2021, there were no material changes to these policies.

Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI, Total NOI, FFO and Company FFO which are financial measures that include adjustments to GAAP.

Net Operating Income ("NOI") and Total NOI

NOI is defined 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.  The Company believes NOI provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.

The Company also uses Total NOI, which includes its proportional share of unconsolidated properties.  The Company believes 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.  

The Company also considers NOI and Total NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.

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

FFO is calculated in accordance with National Association of REITs which defines FFO 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.  The Company considers 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.  

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, unrealized loss on interest rate cap, litigation charges, acquisition-related expenses, amortization of deferred financing costs and certain up-front-hiring 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.

- 32 -

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.

The following table reconciles NOI and Total NOI to GAAP net loss for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
NOI and Total NOI	2021			2020
Net loss	$	(10,933	)	$	(30,975	)
Termination fee income		(2,611	)		(990	)
Management and other fee income		(135	)		(207	)
Depreciation and amortization		13,142			34,097
General and administrative expenses		11,232			9,420
Equity in loss of unconsolidated entities		1,162			894
Gain on sale of real estate		(24,208	)		(20,788	)
Impairment of real estate assets		1,700			—
Interest and other income		(7,624	)		(333	)
Interest expense		26,150			21,513
Benefit for income taxes		(138	)		(37	)
Straight-line rent		210			2,701
Above/below market rental income/expense		(39	)		(97	)
NOI	$	7,908		$	15,198
Unconsolidated entities
NOI of unconsolidated entities		2,437			1,302
Straight-line rent		(137	)		(171	)
Above/below market rental income/expense		(33	)		(482	)
Termination fee income		(742	)		—
Total NOI	$	9,433		$	15,847

- 33 -

The following table reconciles FFO and Company FFO to GAAP net loss for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
FFO and Company FFO	2021			2020
Net loss	$	(10,933	)	$	(30,975	)
Real estate depreciation and amortization    (consolidated properties)		12,756			33,587
Real estate depreciation and amortization    (unconsolidated entities)		3,165			1,844
Gain on sale of real estate		(24,208	)		(20,788	)
Impairment of real estate assets		1,700			—
Dividends on preferred shares		(1,225	)		(1,225	)
FFO attributable to common shareholders    and unitholders	$	(18,745	)	$	(17,557	)
Termination fee income		(2,611	)		(990	)
Termination fee income    (unconsolidated entities)		(742	)		—
Amortization of deferred financing costs		106			106
Company FFO attributable to common    shareholders and unitholders	$	(21,992	)	$	(18,441	)
FFO per diluted common share and unit	$	(0.34	)	$	(0.31	)
Company FFO per diluted common share and unit	$	(0.39	)	$	(0.33	)
Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		39,477			37,232
Weighted average OP units outstanding		16,432			18,578
Weighted average common shares and    units outstanding		55,909			55,810

- 34 -

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in our 2020 Annual Report on Form 10-K.

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, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 35 -

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 2020 Annual Report on Form 10-K in Part I, Item 1A. Risk Factors.  There have been no material changes from the risk factors previously disclosed in our 2020 Annual Report on Form 10-K.

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.

- 36 -

Item 6. Exhibits

Exhibit No.	Description	SEC Document Reference
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	Furnished 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	Furnished herewith.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Filed herewith.

- 37 -

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: April 30, 2021	/s/ Andrea Olshan
	By:	Andrea Olshan
	President and Chief Executive Officer (Principal Executive Officer)
Dated: April 30, 2021	/s/ Amanda Lombard
	By:	Amanda Lombard
	Chief Financial Officer (Principal Financial and Accounting Officer)

- 38 -

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Andrea Olshan, 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/ Andrea Olshan	Date: April 30, 2021
Andrea Olshan
President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Amanda Lombard, 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/ Amanda Lombard	Date:  April 30, 2021
Amanda Lombard
Chief Financial Officer (Principal Financial and Accounting 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, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Andrea Olshan, 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/ Andrea Olshan

Andrea Olshan

President and Chief Executive Officer

(Principal Executive Officer)

April 30, 2021

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, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Amanda Lombard, 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/ Amanda Lombard

Amanda Lombard

Chief Financial Officer

(Principal Financial and Accounting Officer)

April 30, 2021

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, 2021	Apr. 23, 2021
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	SERITAGE GROWTH PROPERTIES
Entity Central Index Key	0001628063
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	001-37420
Entity Tax Identification Number	38-3976287
Entity Address, Address Line One	500 Fifth Avenue
Entity Address, Address Line Two	Suite 1530
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10110
Entity Incorporation, State or Country Code	MD
City Area Code	212
Local Phone Number	355-7800
Document Quarterly Report	true
Document Transition Report	false
Series A Cumulative Redeemable Preferred Shares [Member]
Document Information [Line Items]
Title of 12(b) Security	7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share
Trading Symbol	SRG-PA
Security Exchange Name	NYSE
Class A Common Shares [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common shares of beneficial interest, par value $0.01 per share
Trading Symbol	SRG
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		42,760,970
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Investment in real estate
Land	$ 571,334	$ 592,770
Buildings and improvements	1,100,525	1,107,532
Accumulated depreciation	(146,884)	(142,206)
Real Estate Investment Property, at Cost, Total	1,524,975	1,558,096
Construction in progress	345,648	352,776
Net investment in real estate	1,870,623	1,910,872
Real estate held for sale	24,441	1,864
Investment in unconsolidated entities	459,576	457,033
Cash and cash equivalents	137,940	143,728
Restricted cash	6,526	6,526
Tenant and other receivables, net	33,964	46,570
Lease intangible assets, net	17,702	18,595
Prepaid expenses, deferred expenses and other assets, net	61,604	63,755
Total assets	2,612,376	2,648,943
Liabilities
Term Loan Facility, net	1,599,015	1,598,909
Sales-leaseback financing obligations	20,582	20,425
Accounts payable, accrued expenses and other liabilities	121,379	146,882
Total liabilities	1,740,976	1,766,216
Commitments and contingencies (Note 9)
Shareholders' Equity
Additional paid-in capital	1,200,874	1,177,260
Accumulated deficit	(537,582)	(528,637)
Total shareholders' equity	663,726	649,040
Non-controlling interests	207,674	233,687
Total equity	871,400	882,727
Total liabilities and equity	2,612,376	2,648,943
Class A Common Shares [Member]
Shareholders' Equity
Common shares	406	389
Total equity	406	389
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, 2021	Dec. 31, 2020
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	40,587,226	38,896,428
Common shares, issued	40,587,226	38,896,428
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	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
REVENUE
Rental income	$ 31,146,000	$ 33,110,000
Management and other fee income	$ 135,000	$ 207,000
Type of Revenue [Extensible List]	Management and Other Fee Income [Member]	Management and Other Fee Income [Member]
Total revenue	$ 31,281,000	$ 33,317,000
EXPENSES
Property operating	10,643,000	10,301,000
Real estate taxes	10,155,000	9,225,000
Depreciation and amortization	13,142,000	34,097,000
General and administrative	11,232,000	9,420,000
Total expenses	45,172,000	63,043,000
Gain on sale of real estate, net	24,208,000	20,788,000
Impairment of real estate assets	(1,700,000)	0
Equity in loss of unconsolidated entities	(1,162,000)	(894,000)
Interest and other income	7,624,000	333,000
Interest expense	(26,150,000)	(21,513,000)
Loss before taxes	(11,071,000)	(31,012,000)
Benefit for taxes	138,000	37,000
Net loss	(10,933,000)	(30,975,000)
Net loss attributable to non-controlling interests	3,213,000	10,311,000
Net loss attributable to Seritage	(7,720,000)	(20,664,000)
Preferred dividends	(1,225,000)	(1,225,000)
Net loss attributable to Seritage common shareholders	$ (8,945,000)	$ (21,889,000)
Net loss per share attributable to Seritage Class A and Class C common shareholders - Basic	$ (0.23)	$ (0.59)
Net loss per share attributable to Seritage Class A and Class C common shareholders - Diluted	$ (0.23)	$ (0.59)
Weighted average Class A and Class C common shares outstanding - Basic	39,477	37,232
Weighted average Class A and Class C common shares outstanding - Diluted	39,477	37,232

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical)	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Preferred dividends declared, per share | $ / shares	$ 0.4375
Class B Common Shares [Member]
Share class surrenders, shares	1,242,536
Class A Common Shares [Member]
OP Unit exchanges, shares	1,650,000

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands	Total	Class A Common Shares [Member]	Class B 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, 2019	$ 1,043,370	$ 369	$ 12	$ 28	$ 1,149,721	$ (418,711)	$ 311,951
Beginning balance, shares at Dec. 31, 2019		36,897,000	1,243,000	2,800,000
Net loss	(30,975)					(20,664)	(10,311)
Preferred dividends declared	(1,225)					(1,225)
Vesting of restricted share units		$ 1			(1)
Vesting of restricted share units, shares		75,000
Share-based compensation	1,198				1,198
Share class surrenders			$ (12)		12
Share class surrenders, shares			(1,243,000)
OP Unit exchanges		$ 16			26,623		(26,639)
OP Unit exchanges, shares		1,650,000
Ending balance at Mar. 31, 2020	1,012,368	$ 386		$ 28	1,177,553	(440,600)	275,001
Ending balance, shares at Mar. 31, 2020		38,622,000	0	2,800,000
Beginning balance at Dec. 31, 2020	882,727	$ 389		$ 28	1,177,260	(528,637)	233,687
Beginning balance, shares at Dec. 31, 2020		38,896,428		2,800,000
Net loss	(10,933)					(7,720)	(3,213)
Preferred dividends declared	(1,225)					(1,225)
Vesting of restricted share units, shares		32,000
Share-based compensation	969				969
OP Unit exchanges	(138)	$ 17			22,645		(22,800)
OP Unit exchanges, shares		1,659,000
Ending balance at Mar. 31, 2021	$ 871,400	$ 406		$ 28	$ 1,200,874	$ (537,582)	$ 207,674
Ending balance, shares at Mar. 31, 2021		40,587,226	0	2,800,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (10,933,000)	$ (30,975,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of unconsolidated entities	1,162,000	894,000
Distributions from unconsolidated entities	1,042,000	46,000
Gain on sale of real estate, net	(24,208,000)	(20,788,000)
Impairment of real estate assets	1,700,000	0
Share-based compensation	911,000	1,179,000
Depreciation and amortization	13,142,000	34,097,000
Amortization of deferred financing costs	106,000	106,000
Amortization of above and below market leases, net	(39,000)	(97,000)
Straight-line rent adjustment	210,000	2,701,000
Change in operating assets and liabilities
Tenants and other receivables	294,000	(2,300,000)
Prepaid expenses, deferred expenses and other assets	1,151,000	(124,000)
Accounts payable, accrued expenses and other liabilities	3,352,000	5,061,000
Net cash used in operating activities	(12,110,000)	(10,200,000)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated entities	(9,902,000)	(16,894,000)
Distributions from unconsolidated entities		1,150,000
Net proceeds from sale of real estate	44,234,000	58,330,000
Development of real estate	(26,804,000)	(73,610,000)
Net cash provided by (used in) investing activities	7,528,000	(31,024,000)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of sale-leaseback financing obligations	157,000
Purchase of shares related to stock grant recipients' tax withholdings	(138,000)	(74,000)
Preferred dividends paid	(1,225,000)	(1,225,000)
Net cash used in financing activities	(1,206,000)	(1,299,000)
Net decrease in cash and cash equivalents	(5,788,000)	(42,523,000)
Cash and cash equivalents, and restricted cash, beginning of period	150,254,000	139,260,000
Cash and cash equivalents, and restricted cash, end of period	144,466,000	96,737,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	27,999,000	28,311,000
Capitalized interest	2,954,000	7,914,000
Income taxes paid (refunded)	(138,000)	5,000
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	8,079,000	57,644,000
Preferred dividends declared and unpaid	1,225,000	1,225,000
Transfer to real estate assets held for sale	$ 22,577,000	(2,071,000)
Recording of right of use assets		1,598,000
Recording of lease liabilities		$ (1,598,000)

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Organization

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

Note 1 – Organization

Seritage Growth Properties (“Seritage”) (NYSE: SRG), a Maryland real estate investment trust formed on June 3, 2015, is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(c) of the Internal Revenue Code (the “Code”).  Seritage’s assets are held by and its operations are primarily conducted, directly or indirectly, through Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”).  Under the partnership agreement of the Operating Partnership, Seritage, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.  Unless otherwise expressly stated or the context otherwise requires, the “Company” and “Seritage” refer to Seritage, the Operating Partnership and its owned and controlled subsidiaries.

Seritage is principally engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail and mixed-use properties throughout the United States.  As of March 31, 2021, the Company’s portfolio consisted of interests in 179 properties totaling approximately 26.0 million square feet of gross leasable area (“GLA”), including 154 wholly owned properties totaling approximately 24.1 million square feet of GLA across 41 states and Puerto Rico (the “Wholly Owned Properties”), and interests in 25 properties totaling approximately 1.9 million square feet of GLA across 13 states that are owned in unconsolidated entities (the “Unconsolidated Properties”).

The Company commenced operations on July 7, 2015, following a rights offering to the shareholders of Sears Holdings Corporation (“Sears Holdings” or “Sears”) to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of certain of Sears Holdings’ owned properties and its 50% interests in three joint ventures which were simultaneously leased back to Sears Holdings under a master lease agreement (the “Original Master Lease” and the “Original JV Master Leases”, respectively).

As of March 31, 2021, the Company did not have any remaining properties leased to Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments Inc., or Sears Holdings after giving effect to the termination of the remaining five Wholly Owned Properties, which were completed on March 15, 2021, as further described in Note 5, Leases.

COVID-19 Pandemic

Beginning in late 2019, a novel strain of Coronavirus (“COVID-19”) began to spread throughout the world, including the United States, ultimately being declared a pandemic by the World Health Organization. The pandemic has caused and continues cause significant impacts on the real estate industry in the United States, including the Company’s properties.

As of March 31, 2021, the Company had collected 97% of rental income for the three months ended March 31, 2021 and agreed to defer an additional 2%.  While the Company intends to enforce its contractual rights under its leases, there can be no assurance that tenants will meet their future obligations or that additional rental modification agreements will not be necessary.

As a result of the development, fluidity and uncertainty surrounding this situation, the Company expects that these conditions will change, potentially significantly, in future periods and results for the three months ended March 31, 2021 may not be indicative of the impact of the COVID-19 pandemic on the Company’s business for future periods.  As such, the Company cannot reasonably estimate the impact of COVID-19 on its financial condition, results of operations or cash flows over the foreseeable future.

Liquidity

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures.  Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations incurred during the three months ended March 31, 2021 and the Company recorded net operating cash outflows of $12.1 million.  Additionally, the Company’s asset sales during the three months ended March 31, 2021 generated investing cash inflows of $44.2 million.

Obligations are projected to continue to exceed property rental income and the Company expects to fund such costs with a combination of capital sources including, cash on hand, and sales of Wholly Owned Properties, subject to any approvals that may be required under the Company’s Term Loan Facility, as described in Note 6, Debt.  Management has determined that it is probable its plans will be effectively implemented within one year after the date the condensed consolidated financial statements are issued and that these actions will provide the necessary cash flows to fund the Company’s obligations and development expenditures.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

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, 2020.  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, 2021 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2021.  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.

Where the Company has an interest in a VIE and 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 evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration events.  As of March 31, 2021 and December 31, 2020, the Company has several unconsolidated VIEs and 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, 2021, the Company holds a 72.6% 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.  As of April 23, 2021, the Company holds a 76.4% interest in 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 condensed consolidated balance sheets.

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.

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 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.

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:

Buildings:	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.

The Company, on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired.  If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real estate asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects and the effects of demand, competition, and other economic factors such as discount rates and market comparables.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  The Company recognized $1.7 million in impairment losses for the three months ended March 31, 2021 attributable to one property.  Such impairment losses are included within impairment of real estate assets on the condensed consolidated statements of operations.  No impairment losses were recognized for the three months ended March 31, 2020.

Real Estate Dispositions

When the Company disposes of all or a portion of a real estate asset, it recognizes a gain or loss on sale of real estate as the difference between the carrying value and consideration received.  Consideration consists of cash proceeds received and in certain circumstances, non-cash consideration which is typically in the form of equity in unconsolidated entities on the Company’s condensed consolidated statements of operations.  For more information on the Company’s unconsolidated entity transactions refer to Note 4.

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2021 and March 31, 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Dispositions to third parties
Gross proceeds	$	46.9	$	60.4
Gain on sale of real estate, net		24.2		20.8

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, 2021, three properties were classified as held for sale with assets of $24.4 million and no liabilities, and, as of December 31, 2020, one property was classified as held for sale with assets of $1.9 million and no liabilities.

Investments in Unconsolidated Entities

The Company accounts for its investments in unconsolidated entities using the equity method of accounting as the Company exercises significant influence but does not have a controlling financial interest.  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 which include macroeconomic conditions, that the value of the Company’s investments in unconsolidated entities may be impaired.  An investment’s value is impaired 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, 2021 and 2020.

Restricted Cash

As of March 31, 2021, restricted cash represents cash received as proceeds for a sale which did not meet the criteria for sale accounting at March 31, 2021, as well as cash collateral for a letter of credit.

Rental Revenue Recognition and Tenant Receivables

Rental income is comprised of base rent and reimbursements of property operating expenses. The Company commences rental revenue recognition when the lessee takes control of the physical use of the leased asset based on evaluation of several factors. 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 straight-line rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets. 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.

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. Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectability of substantially all future lease payments from a specified lease is not probable of collection, at which point, the Company will begin recognizing revenue on a cash basis, based on actual amounts received. Any receivables that are deemed to be uncollectable are recognized as a reduction to rental income in the Company’s condensed consolidated statements of operations. If future circumstances change such that the Company believes that it is reasonably certain that the Company will collect all rental income remaining on such leases, the Company will resume accruing rental income and recognize a cumulative catch up for previously written-off receivables. The Company also recognizes a general reserve, as a reduction to rental income, for its portfolio of operating lease receivables which are not expected to be fully collectable.

The Company recorded an increase to rental income of $0.2 million and a reduction to rental income of $0.5 million during the three months ended March 31, 2021 and 2020, respectively, as a result of the Company’s evaluation of collectability.  In addition, the Company also recorded a reversal of previously recorded straight-line rent of $1.0 million for the three months ended March 31, 2021. No such reversals were recorded for the three months ended March 31, 2020. During the three months ended March 31, 2021, the Company recorded an increase to rental income of $0.1 million related to the allowance for deferral agreements.

Due to the COVID-19 pandemic, the Company has entered into amendments to existing leases with certain tenants (the “Rent Deferral Agreements”), that provide for the deferral of all or some portion of rental payments due during the period which such tenant was affected by the COVID-19 pandemic (“Deferred Rent”).  The Rent Deferral Agreements typically provide for repayment of the Deferred Rent within six to twelve months following the end of the rent deferral period and, in many instances, waive certain other conditions in favor of the Company while Deferred Rent is outstanding.  Deferred Rent generally becomes immediately due and payable under the Rent Deferral Agreements if the tenant does not make the minimum contractual payments or otherwise defaults on the lease.  We recognize lease concessions related to the COVID-19 pandemic such as rent deferrals and abatements in accordance with the Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease.  As a result, the Company has not adjusted accrued rental revenues or the portion of accrued rental revenues related to the straight-line method for the portion which has been deferred.  When the Deferred Rents are repaid, the Company will relieve the accrual in tenant and other receivables.

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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Tenant and Other Receivables

Tenant and other receivables 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, as discussed above.  Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated entities.  In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.  

Property management fee income is reported at 100% of the revenue earned from such unconsolidated properties in management and other fee income on the condensed consolidated statements of operations.  The Company’s share of management expenses incurred by the unconsolidated entities is reported in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.  

Leasing and development fees are initially reported at the portion of revenue earned attributable to outside ownership of the related unconsolidated entities.  The Company’s share in leasing and development fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined 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 services, 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 within our unconsolidated entities 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 performance obligations, 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 obligations are typically satisfied at lease execution and tenant opening date, and revenue is recognized in accordance with the related agreement at the point in time when the obligation has been satisfied.

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.  Management believes the Company’s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk.  As of March 31, 2021, the Company’s portfolio of 154 Wholly Owned Properties and 25 Unconsolidated Properties was diversified by location across 41 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.  As of December 31, 2020, all outstanding Class B common shares have been surrendered and there are currently no Class B common shares outstanding.

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

The Company has not adopted any Accounting Standards Updates (“ASU”) issued by the FASB during the three months ended March 31, 2021.

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Lease Intangible Assets and Liabilities

3 Months Ended

Mar. 31, 2021

Real Estate [Abstract]

Lease Intangible Assets and Liabilities

Note 3 – Lease Intangible Assets and Liabilities

The following tables summarize the Company’s 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, as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	35,452	$	(19,448	)	$	16,004
Above-market leases, net		3,925		(2,227	)	$	1,698
Total	$	39,377	$	(21,675	)	$	17,702

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,575	)	$	4,051
Total	$	6,626	$	(2,575	)	$	4,051

December 31, 2020
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	73,169	$	(56,369	)	$	16,800
Above-market leases, net		4,139		(2,344	)		1,795
Total	$	77,308	$	(58,713	)	$	18,595

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,440	)	$	4,186
Total	$	6,626	$	(2,440	)	$	4,186

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.1 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. Amortization of an acquired below-market ground lease resulted in additional property expense of $0.1 million for each of the three months ended March 31, 2021 and 2020, respectively. Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $0.8 million and $21.0 million for the three months ended March 31, 2021 and 2020, respectively. Future amortization of these leases intangibles is set forth below (in thousands):

	Below market leases, net			Below market ground lease		In-place leases
Remainder of 2021	$	10		$	152	$	2,260
2022		(58	)		203		2,787
2023		3			203		1,921
2024		27			203		1,385
2025		97			203		1,077
2026		190			203		724
Thereafter		2,084			9,433		5,850

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Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2021

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Note 4 – Investments in Unconsolidated Entities

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

As of March 31, 2021, the Company had investments in ten unconsolidated entities as follows:

		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	4		520,400
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	3		474,100
MS Portfolio LLC    ("Macerich JV")	The Macerich Company	50.0%	7		1,266,600
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	50.0%	1		103,000
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		163,700
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons	50.0%	1		160,200
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management	50.0%	1		—
J&J Baldwin Park LLC    ("Carson Investment")	An affiliate of NewMark Merrilll Companies and other entities	20.0%	1		182,200
			25		3,968,600

The Company has contributed certain properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities. The contribution of property to unconsolidated entities is accounted for as a sale of real estate and the Company recognizes the gain or loss on the sale (the “Gain (Loss)”) based upon the transaction price attributed to the property at the closing of the unconsolidated entities transaction (the “Contribution Value”).  The gain or loss is included in gain on sale of real estate on the condensed consolidated statements of operations.  

In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective unconsolidated entity agreements, which may result in an adjustment to the gain or loss recognized.  If the Contribution Value is subject to revaluation, the Company initially recognizes the gain or loss at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a quarterly basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the unconsolidated entity partners, as well as an adjustment to the initial gain or loss.  

Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the gain or loss for those unconsolidated entities subject to a revaluation.  The following table presents summarizes the properties contributed to the Company’s unconsolidated entities:

		March 31, 2021
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	60.0	$	8.8
2019
Cockeysville JV (2)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (3)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income based on signed leases and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million. During the year ended December 31, 2020 the Company adjusted the Contribution Value down to $60.0 million and reduced the Gain (Loss) by $30.0 million which is included in gain on sale of real estate on the consolidated statements of operations. The Company also recorded a $15.0 million reduction to the Mark 302 JV investment value and a $15.0 million payable related to the amounts due to its partner which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.  In addition, 2020, the Company and its partner entered into an agreement to extend the revaluation date for the Mark 302 JV to September 30, 2021. Pursuant to the terms of this agreement, the Company will pay its partner a fee of $1.1 million and the Contribution Value cannot be more than $90.0 million or less than $60.0 million. The Company will continue to re-evaluate the expected amount on a periodic basis through the final determination date.

(2) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the joint venture which was conditioned on certain milestones being met with respect to entitling the Additional Land Parcel for residential use. The Additional Land Parcel has been entitled for residential use. The Company has not reflected the contribution value of the Additional Land Parcel in the value of its investment in the Cockeysville JV based on uncertainty related to a potential alternative transaction with respect to the Additional Land Parcel. The Company will record an increased investment in the Cockeysville JV and additional gain in an amount equal to 50% of the fair value of the Additional Land Parcel at the earlier of when it becomes probable that the Additional Land Parcel will be contributed or upon an alternate outcome.

(3) The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

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

	March 31, 2021			December 31, 2020
ASSETS
Investment in real estate
Land	$	318,540		$	318,540
Buildings and improvements		492,335			492,973
Accumulated depreciation		(87,925	)		(81,730	)
		722,950			729,783
Construction in progress		228,349			222,663
Net investment in real estate		951,299			952,446
Cash and cash equivalents		18,785			16,094
Tenant and other receivables, net		5,584			4,104
Other assets, net		65,620			62,882
Total assets	$	1,041,288		$	1,035,526
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	34,675		$	34,672
Accounts payable, accrued expenses and other liabilities		42,627			48,405
Total liabilities		77,302			83,077
Members' Interest
Additional paid in capital		965,949			964,868
Retained earnings (accumulated deficit)		(1,963	)		(12,419	)
Total members' interest		963,986			952,449
Total liabilities and members' interest	$	1,041,288		$	1,035,526

	Three Months Ended March 31,
	2021			2020
Total revenue	$	7,729		$	5,341
Property operating expenses		(2,579	)		(2,737	)
Depreciation and amortization		(6,481	)		(3,687	)
Operating loss		(1,331	)		(1,083	)
Other expenses		(1,043	)		(489	)
Net loss	$	(2,374	)	$	(1,572	)
Equity in loss of unconsolidated    entities (1)	$	(1,162	)	$	(786	)

(1) Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

The Company shares in the profits and losses of these unconsolidated entities 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 entity that differ from the Company’s equity interest in the unconsolidated entity.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated entity recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated entity and the unconsolidated entity’s basis in those assets or other items.  There were no impairment charges related to the Unconsolidated Properties for the three months ended March 31, 2021 and 2020.

Unconsolidated Entity Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV, the UTC JV, and Tech Ridge JV.  The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its unconsolidated entities.  Refer to Note 2 for the Company’s accounting policies.  The Company also acted as the development manager for one of the properties in the GGP II JV which entitled the Company to receive certain development fees

which ended as of March 31, 2021.  The Company earned $0.1 million and $0.2 million from these services for the three months ended March 31, 2021 and 2020, respectively.

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Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Note 5 – Leases

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of March 31, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	66,971
2022		87,489
2023		80,770
2024		77,428
2025		77,156
2026		72,845
Thereafter		351,262
Total	$	813,921

The components of lease revenues for the three months ended March 31, 2021 and 2020 were as follows:

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	22,271	$	27,648
Variable rental income		9,046		8,066
Total rental income	$	31,317	$	35,714

Lessee Disclosures

The Company has one ground lease and multiple corporate office leases which are classified as operating leases.  As of March 31, 2021, and December 31, 2020, the outstanding amount of right-of-use, or ROU, assets were $18.6 million and $18.8 million, respectively.

The Company recorded rent expense related to leased corporate office space of $0.4 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively. Such rent expense is classified within general and administrative expenses on the condensed consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $0.1 million for the three months ended March 31, 2021 and 2020. Such ground rent expense is classified within property operating expenses on the condensed 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, 2021:

	As of March 31, 2021
Weighted average remaining lease term (in years)		9.69
Weighted average discount rate		6.99	%
Cash paid for operating leases (in thousands)	$	488

Sale-leaseback Financing Obligations

During the year ended December 31, 2020, the Company completed a sale-leaseback transaction of a property in Hialeah, Florida for $21.0 million which is included in sales-leaseback financing obligations on the condensed consolidated balance sheets.  As part of the sale-leaseback transaction, the Company agreed to lease all land and improvements on the land for a fixed term of 25 years at an initial base rent of $1.5 million per annum which will increase by 1.5% per year thereafter.  For the initial periods of the sale-leaseback, cash payments are less than the interest expense recognized, which causes the obligation to increase during the initial years of the lease term.  The implied interest rate is approximately 7.00%.  The Company has a purchase option during years four, five or seven of the 25-year term to reacquire, solely at the Company’s option, the Hialeah property at a predetermined price.  The Hialeah property

continues to be reflected as a long-lived asset and depreciated over its remaining useful life.

Future sale-leaseback financing obligations as of March 31, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	1,082
2022		1,464
2023		1,486
2024		1,507
2025		1,531
2026		1,554
Thereafter		34,022
Interest		(22,064	)
Total	$	20,582

Original Master Lease and Holdco Master Lease

On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., executed the Holdco Master Lease (the “Holdco Master Lease”) which became effective on March 12, 2019 when the United States Bankruptcy Court for the Southern District of New York (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. The Holdco Master Lease provided 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. Under the terms of the Holdco Master Lease, Holdco had the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses. Sears Holdings exercised termination rights with respect to 87 properties under the Original Master Lease prior to its rejection on March 12, 2019 and Holdco exercised termination rights with respect to all remaining properties under the Holdco Master Lease during the year ended December 31, 2020, with the remaining five properties effective in March 2021.

Revenues from the Holdco Master Lease and the Original Master Lease for the three months ended March 31, 2021, and 2020 are as follows (excluding straight-line rental income for the three months ended March 31, 2021 and 2020 of $0 million and $(4.5) million, respectively).

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	-	$	4,288
Variable rental income		4,510		3,839
Total rental income	$	4,510	$	8,127

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Debt

3 Months Ended

Mar. 31, 2021

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 and includes a $400.0 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. The Term Loan Facility matures on July 31, 2023.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn.  The Company prepays the annual fee and amortizes the expense to interest expense on the condensed consolidated statements of operations.

As of March 31, 2021, 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 signed not yet open leases (“SNO Leases”) expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million, and (iii) the repayment by the Operating Partnership of any deferred interest permitted under the amendment to the Term Loan Agreement dated May 5, 2020 (as further described below).

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Operating Partnership.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Operating Partnership and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a 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. During 2019, mortgages were recorded on a majority of the Company’s portfolio and subsequent to March 31, 2021, mortgages have been recorded on nearly all properties.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 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 limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default.  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, 2021, 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, as of March 31, 2021, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. There can be no assurance that the lender will consent to future dispositions of assets. 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, 2021 and December 31, 2020, the unamortized balance of the Company’s debt issuance costs were $1.0 million and $1.1 million, respectively.

On May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million.  In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement).  Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on July 31, 2023; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding

deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement.  The Company has paid all interest due under the Term Loan Agreement and has not deferred any interest as permitted under the amendment to the Term Loan Agreement.

Additionally, the amendment to the Term Loan Agreement provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Facility.

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Income Taxes

3 Months Ended

Mar. 31, 2021

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 U.S. 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 U.S. federal income tax at regular corporate rates (including for any taxable year ended on or before December 31, 2017, any applicable alternative minimum tax) and any applicable state and local income taxes.  In addition, if the Company fails to qualify as a REIT, it may not be able to qualify as a REIT for four subsequent taxable years in some cases.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain U.S. state, local and Puerto Rico taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed REIT taxable income. The Company’s taxable REIT subsidiaries are subject to U.S. corporate income tax.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2021

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.

Assets Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis on our condensed consolidated balance sheets consist of real estate assets that have been written down to estimated fair value and are classified as Level 3 within the fair value hierarchy.  The Company’s estimates of fair value are determined using discounted cash flow models, which consider, among other things, anticipated holding periods, current market conditions, potential development projects and utilize unobservable quantitative inputs, including appropriate capitalization and discount rates.  In addition, signed contracts or letters of intent from third parties are considered.

For the three months ended March 31, 2021 and 2020, in accordance with ASC 360-10, Property, Plant and Equipment, the Company recorded impairment losses of $1.7 million and $0 million, respectively, on real estate assets which are included in impairment on real estate assets within the condensed consolidated statements of operations.  The most significant inputs utilized in determining the fair value of these assets are capitalization rates and discount rates, which were each between 6.75% and 9.25% and market comparables for land and building.

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 the term loan facility.  The fair value of cash equivalents and restricted cash are classified as Level 1 and the fair value

of term loan facility is classified as Level 2. Cash equivalents and restricted cash 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, 2021 and December 31, 2020, the estimated fair values of the Company’s debt obligations were $1.6 billion and $1.6 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, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9 – Commitments and Contingencies

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties.  The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2027.

Insurance premiums are charged directly to each of the properties.  The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material.  The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.  However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.  

Under the Original Master Lease and the Holdco Master Lease, Holdco is required to indemnify the Company from certain environmental liabilities at the Wholly Owned Properties before or during the period in which each Wholly Owned Property was leased to Holdco, including removal and remediation of all affected facilities and equipment constituting the automotive care center.  In addition, an environmental reserve was funded at the closing of the transactions in connection with the Company commencing operations in the amount of approximately $12.0 million.  As of March 31, 2021 and December 31, 2020, the balance of the environmental reserve was approximately $9.5 million and $9.5 million, respectively, and is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets.

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 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 (the “Bankruptcy Court”) 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 (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 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.  

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating

trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”).  For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the operative complaint in the Litigation relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination. Briefing and oral argument on the motions have been completed, and the parties are awaiting a decision.  

On March 15, 2021, the Court consolidated the Litigation with a case captioned Sears Holding Corp. et al. v. Andrew H. Tish, et al., Case No. 20-07007 (RDD) (the “Shareholder Litigation,” and, together with the Litigation, the “Consolidated Litigation”). The Shareholder Litigation was brought by the UCC, Sears Holdings Corporation, and Sears, Roebuck and Co., against certain shareholders of Sears Holdings or its related companies. Seritage was not named as a defendant in the Shareholder Litigation, which alleges, among other things, that certain transactions undertaken by Sears Holdings since 2014 (including 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) constituted actual and/or constructive fraudulent transfers and/or illegal dividends. The Company believes that the claims against the Seritage Defendants in the Consolidated Litigation are without merit and intends 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 and due to the current environment.  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, 2021, and December 31, 2020, the Company did not record any amounts for litigation or other matters.

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Related Party Disclosure

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Disclosure

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings.  Mr. Lampert is also the Chairman of Seritage.

As of March 31, 2021, Mr. Lampert beneficially owned a 27.4% interest in the Operating Partnership and approximately 4.2% of the outstanding Class A common shares.

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

Unconsolidated Entities

Certain unconsolidated entities have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated entities.  Refer to Note 2 for the Company’s accounting policies.

In addition, as of March 31, 2021, the Company had incurred $0.2 million of development expenditures at properties owned by certain unconsolidated entities for which the Company will be repaid by the respective unconsolidated entities.  These amounts are included in tenant and other receivables, net on the Company’s condensed consolidated balance sheets.  As of December 31, 2020, the Company had incurred $5.0 million of such development expenditures.

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Non-Controlling Interests

3 Months Ended

Mar. 31, 2021

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 which was amended and restated on December 14, 2017.  Pursuant to this 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, 2021, the Company held a 72.6% interest in the Operating Partnership and ESL held a 27.4% 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, 2021

Equity [Abstract]

Shareholders' Equity

Note 12 – Shareholders’ Equity

Class A Common Shares

As of March 31, 2021, 40,587,226 Class A common shares were issued and outstanding. Class A shares have a par value of $0.01 per share. During the three months ended March 31, 2021, 1,658,855 Operating Partnership Units (“OP Units”) were issued and exchanged for an equal number of Class A shares.

Class B Non-Economic Common Shares

As of March 31, 2021, there were no Class B non-economic common shares issued and outstanding.

Class C Non-Voting Common Shares

As of March 31, 2021, there were no Class 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 $66.4 million, after deducting payment of the underwriting discount and offering expenses.

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 has not declared dividends on the Company’s Class A and Class C common shares during 2020 or 2021.

The Company’s Board of Trustees declared the following dividends on preferred shares during 2021 and 2020:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2021
April 27	June 30	July 15	$	0.43750
February 23	March 31	April 15		0.43750
2020
December 17	December 31	January 15, 2021	$	0.43750
September 17	September 30	October 15		0.43750
June 9	June 30	July 15		0.43750
February 18	March 31	April 15		0.43750

As previously disclosed, the Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2021.  The Company intends to, at a minimum, make distributions to its shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred Shares.

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Earnings per Share

3 Months Ended

Mar. 31, 2021

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,
	2021			2020
Numerator - Basic and Diluted
Net loss		(10,933	)		(30,975	)
Net income attributable to non-controlling interests		3,213			10,311
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic    and diluted	$	(8,945	)	$	(21,889	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		39,477			37,232
Weighted average Class C common shares outstanding		—			—
Weighted average Class A and Class C common shares    outstanding - Basic		39,477			37,232
Restricted shares and share units		—			—
Weighted average Class A and Class C common shares    outstanding - Diluted		39,477			37,232
Net loss per share attributable to Class A and Class C    common shareholders - Basic	$	(0.23	)	$	(0.59	)
Net loss per share attributable to Class A and Class C    common shareholders - Diluted	$	(0.23	)	$	(0.59	)

No adjustments were made to the numerator for the three months ended March 31, 2021 or 2020 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, 2021 or 2020 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, 2021 and December 31, 2020, there were 216,179 and 157,465 shares, respectively, of non-vested restricted shares outstanding.

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Share Based Compensation

3 Months Ended

Mar. 31, 2021

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, and in some instances, the fourth anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-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, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares. See Note 2 for valuation information related to the grants of the awards that are subject to market-based vesting conditions.

The following table summarizes restricted share activity for the three months ended March 31, 2021:

	Three Months Ended March 31, 2021
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		157,465		$	38.73
Share units granted		157,390			21.86
Restricted shares vested		(90,195	)		33.70
Restricted shares forfeited		(8,481	)		36.75
Unvested restricted shares at end of period		216,179			28.62

The Company recognized $0.9 million and $1.2 million in compensation expense related to the restricted shares for the three months ended March 31, 2021 and 2020, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company’s condensed consolidated statements of operations.  

As of March 31, 2021, there were approximately $4.3 million of total unrecognized compensation costs related to the outstanding restricted shares which are expected to be recognized over a weighted-average period of approximately 2.5 years. As of March 31, 2020, there were approximately $9.2 million of total unrecognized compensation costs related to the outstanding restricted shares which were expected to be recognized over a weighted-average period of approximately 1.9 years.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

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, 2020.  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, 2021 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2021.  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.

Where the Company has an interest in a VIE and 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 evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration events.  As of March 31, 2021 and December 31, 2020, the Company has several unconsolidated VIEs and 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, 2021, the Company holds a 72.6% 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.  As of April 23, 2021, the Company holds a 76.4% interest in 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 condensed consolidated balance sheets.

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.

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 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.

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:

Buildings:	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.

The Company, on a periodic basis, assesses whether there are indicators, including macroeconomic conditions, that the value of the real estate assets may be impaired.  If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real estate asset. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects and the effects of demand, competition, and other economic factors such as discount rates and market comparables.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  The Company recognized $1.7 million in impairment losses for the three months ended March 31, 2021 attributable to one property.  Such impairment losses are included within impairment of real estate assets on the condensed consolidated statements of operations.  No impairment losses were recognized for the three months ended March 31, 2020.

Real Estate Dispositions

When the Company disposes of all or a portion of a real estate asset, it recognizes a gain or loss on sale of real estate as the difference between the carrying value and consideration received.  Consideration consists of cash proceeds received and in certain circumstances, non-cash consideration which is typically in the form of equity in unconsolidated entities on the Company’s condensed consolidated statements of operations.  For more information on the Company’s unconsolidated entity transactions refer to Note 4.

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2021 and March 31, 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Dispositions to third parties
Gross proceeds	$	46.9	$	60.4
Gain on sale of real estate, net		24.2		20.8

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, 2021, three properties were classified as held for sale with assets of $24.4 million and no liabilities, and, as of December 31, 2020, one property was classified as held for sale with assets of $1.9 million and no liabilities.

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Entities

The Company accounts for its investments in unconsolidated entities using the equity method of accounting as the Company exercises significant influence but does not have a controlling financial interest.  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 which include macroeconomic conditions, that the value of the Company’s investments in unconsolidated entities may be impaired.  An investment’s value is impaired 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, 2021 and 2020.

Restricted Cash

Restricted Cash

As of March 31, 2021, restricted cash represents cash received as proceeds for a sale which did not meet the criteria for sale accounting at March 31, 2021, as well as cash collateral for a letter of credit.

Rental Revenue Recognition and Tenant Receivables

Rental Revenue Recognition and Tenant Receivables

Rental income is comprised of base rent and reimbursements of property operating expenses. The Company commences rental revenue recognition when the lessee takes control of the physical use of the leased asset based on evaluation of several factors. 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 straight-line rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets. 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.

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. Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectability of substantially all future lease payments from a specified lease is not probable of collection, at which point, the Company will begin recognizing revenue on a cash basis, based on actual amounts received. Any receivables that are deemed to be uncollectable are recognized as a reduction to rental income in the Company’s condensed consolidated statements of operations. If future circumstances change such that the Company believes that it is reasonably certain that the Company will collect all rental income remaining on such leases, the Company will resume accruing rental income and recognize a cumulative catch up for previously written-off receivables. The Company also recognizes a general reserve, as a reduction to rental income, for its portfolio of operating lease receivables which are not expected to be fully collectable.

The Company recorded an increase to rental income of $0.2 million and a reduction to rental income of $0.5 million during the three months ended March 31, 2021 and 2020, respectively, as a result of the Company’s evaluation of collectability.  In addition, the Company also recorded a reversal of previously recorded straight-line rent of $1.0 million for the three months ended March 31, 2021. No such reversals were recorded for the three months ended March 31, 2020. During the three months ended March 31, 2021, the Company recorded an increase to rental income of $0.1 million related to the allowance for deferral agreements.

Due to the COVID-19 pandemic, the Company has entered into amendments to existing leases with certain tenants (the “Rent Deferral Agreements”), that provide for the deferral of all or some portion of rental payments due during the period which such tenant was affected by the COVID-19 pandemic (“Deferred Rent”).  The Rent Deferral Agreements typically provide for repayment of the Deferred Rent within six to twelve months following the end of the rent deferral period and, in many instances, waive certain other conditions in favor of the Company while Deferred Rent is outstanding.  Deferred Rent generally becomes immediately due and payable under the Rent Deferral Agreements if the tenant does not make the minimum contractual payments or otherwise defaults on the lease.  We recognize lease concessions related to the COVID-19 pandemic such as rent deferrals and abatements in accordance with the Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease.  As a result, the Company has not adjusted accrued rental revenues or the portion of accrued rental revenues related to the straight-line method for the portion which has been deferred.  When the Deferred Rents are repaid, the Company will relieve the accrual in tenant and other receivables.

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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Tenant and Other Receivables

Tenant and Other Receivables

Tenant and other receivables 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, as discussed above.  Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated entities.  In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Management and Other Fee Income

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.  

Property management fee income is reported at 100% of the revenue earned from such unconsolidated properties in management and other fee income on the condensed consolidated statements of operations.  The Company’s share of management expenses incurred by the unconsolidated entities is reported in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.  

Leasing and development fees are initially reported at the portion of revenue earned attributable to outside ownership of the related unconsolidated entities.  The Company’s share in leasing and development fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined 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 services, 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 within our unconsolidated entities 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 performance obligations, 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 obligations are typically satisfied at lease execution and tenant opening date, and revenue is recognized in accordance with the related agreement at the point in time when the obligation has been satisfied.

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.  Management believes the Company’s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk.  As of March 31, 2021, the Company’s portfolio of 154 Wholly Owned Properties and 25 Unconsolidated Properties was diversified by location across 41 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.  As of December 31, 2020, all outstanding Class B common shares have been surrendered and there are currently no Class B common shares outstanding.

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

The Company has not adopted any Accounting Standards Updates (“ASU”) issued by the FASB during the three months ended March 31, 2021.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

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:

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

Schedule Of Gain On Sale Of Real Estate

The following table summarizes our gain on sale of real estate, net during the three months ended March 31, 2021 and March 31, 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Dispositions to third parties
Gross proceeds	$	46.9	$	60.4
Gain on sale of real estate, net		24.2		20.8

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Lease Intangible Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Real Estate [Abstract]

Summary of Lease Intangible Assets

The following tables summarize the Company’s 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, as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	35,452	$	(19,448	)	$	16,004
Above-market leases, net		3,925		(2,227	)	$	1,698
Total	$	39,377	$	(21,675	)	$	17,702

December 31, 2020
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	73,169	$	(56,369	)	$	16,800
Above-market leases, net		4,139		(2,344	)		1,795
Total	$	77,308	$	(58,713	)	$	18,595

Summary of Lease Intangible Liabilities

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,575	)	$	4,051
Total	$	6,626	$	(2,575	)	$	4,051

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	6,626	$	(2,440	)	$	4,186
Total	$	6,626	$	(2,440	)	$	4,186

Schedule of Future Amortization of Acquired Leases

Future amortization of these leases intangibles is set forth below (in thousands):

	Below market leases, net			Below market ground lease		In-place leases
Remainder of 2021	$	10		$	152	$	2,260
2022		(58	)		203		2,787
2023		3			203		1,921
2024		27			203		1,385
2025		97			203		1,077
2026		190			203		724
Thereafter		2,084			9,433		5,850

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Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments And Joint Ventures [Abstract]

Summary of Company's Investments in Unconsolidated Entities

As of March 31, 2021, the Company had investments in ten unconsolidated entities as follows:

		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	4		520,400
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail    (formerly GGP Inc.)	50.0%	3		474,100
MS Portfolio LLC    ("Macerich JV")	The Macerich Company	50.0%	7		1,266,600
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	50.0%	1		103,000
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		163,700
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons	50.0%	1		160,200
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management	50.0%	1		—
J&J Baldwin Park LLC    ("Carson Investment")	An affiliate of NewMark Merrilll Companies and other entities	20.0%	1		182,200
			25		3,968,600

Summary of Properties Contributed In Unconsolidated Entities

The following table presents summarizes the properties contributed to the Company’s unconsolidated entities:

		March 31, 2021
Unconsolidated Entities	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	60.0	$	8.8
2019
Cockeysville JV (2)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (3)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income based on signed leases and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million. During the year ended December 31, 2020 the Company adjusted the Contribution Value down to $60.0 million and reduced the Gain (Loss) by $30.0 million which is included in gain on sale of real estate on the consolidated statements of operations. The Company also recorded a $15.0 million reduction to the Mark 302 JV investment value and a $15.0 million payable related to the amounts due to its partner which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.  In addition, 2020, the Company and its partner entered into an agreement to extend the revaluation date for the Mark 302 JV to September 30, 2021. Pursuant to the terms of this agreement, the Company will pay its partner a fee of $1.1 million and the Contribution Value cannot be more than $90.0 million or less than $60.0 million. The Company will continue to re-evaluate the expected amount on a periodic basis through the final determination date.

(2) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the joint venture which was conditioned on certain milestones being met with respect to entitling the Additional Land Parcel for residential use. The Additional Land Parcel has been entitled for residential use. The Company has not reflected the contribution value of the Additional Land Parcel in the value of its investment in the Cockeysville JV based on uncertainty related to a potential alternative transaction with respect to the Additional Land Parcel. The Company will record an increased investment in the Cockeysville JV and additional gain in an amount equal to 50% of the fair value of the Additional Land Parcel at the earlier of when it becomes probable that the Additional Land Parcel will be contributed or upon an alternate outcome.

(3) The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

Summary of Combined Condensed Financial Data of Unconsolidated Entities

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

	March 31, 2021			December 31, 2020
ASSETS
Investment in real estate
Land	$	318,540		$	318,540
Buildings and improvements		492,335			492,973
Accumulated depreciation		(87,925	)		(81,730	)
		722,950			729,783
Construction in progress		228,349			222,663
Net investment in real estate		951,299			952,446
Cash and cash equivalents		18,785			16,094
Tenant and other receivables, net		5,584			4,104
Other assets, net		65,620			62,882
Total assets	$	1,041,288		$	1,035,526
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	34,675		$	34,672
Accounts payable, accrued expenses and other liabilities		42,627			48,405
Total liabilities		77,302			83,077
Members' Interest
Additional paid in capital		965,949			964,868
Retained earnings (accumulated deficit)		(1,963	)		(12,419	)
Total members' interest		963,986			952,449
Total liabilities and members' interest	$	1,041,288		$	1,035,526

	Three Months Ended March 31,
	2021			2020
Total revenue	$	7,729		$	5,341
Property operating expenses		(2,579	)		(2,737	)
Depreciation and amortization		(6,481	)		(3,687	)
Operating loss		(1,331	)		(1,083	)
Other expenses		(1,043	)		(489	)
Net loss	$	(2,374	)	$	(1,572	)
Equity in loss of unconsolidated    entities (1)	$	(1,162	)	$	(786	)

(1) Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

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, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	66,971
2022		87,489
2023		80,770
2024		77,428
2025		77,156
2026		72,845
Thereafter		351,262
Total	$	813,921

Components of Lease Revenues

The components of lease revenues for the three months ended March 31, 2021 and 2020 were as follows:

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	22,271	$	27,648
Variable rental income		9,046		8,066
Total rental income	$	31,317	$	35,714

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, 2021:

	As of March 31, 2021
Weighted average remaining lease term (in years)		9.69
Weighted average discount rate		6.99	%
Cash paid for operating leases (in thousands)	$	488

Schedule of Future Sale-Leaseback Financing Obligations

Future sale-leaseback financing obligations as of March 31, 2021 are approximately as follows:

(in thousands)	March 31, 2021
Remainder of 2021	$	1,082
2022		1,464
2023		1,486
2024		1,507
2025		1,531
2026		1,554
Thereafter		34,022
Interest		(22,064	)
Total	$	20,582

Summary of Revenue from Master Lease

(in thousands)	Three Months Ended March 31,
	2021		2020
Fixed rental income	$	-	$	4,288
Variable rental income		4,510		3,839
Total rental income	$	4,510	$	8,127

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Series A Preferred Shares [Member]

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees declared the following dividends on preferred shares during 2021 and 2020:

			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2021
April 27	June 30	July 15	$	0.43750
February 23	March 31	April 15		0.43750
2020
December 17	December 31	January 15, 2021	$	0.43750
September 17	September 30	October 15		0.43750
June 9	June 30	July 15		0.43750
February 18	March 31	April 15		0.43750

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Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

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

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,
	2021			2020
Numerator - Basic and Diluted
Net loss		(10,933	)		(30,975	)
Net income attributable to non-controlling interests		3,213			10,311
Preferred dividends		(1,225	)		(1,225	)
Net loss attributable to common shareholders - Basic    and diluted	$	(8,945	)	$	(21,889	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		39,477			37,232
Weighted average Class C common shares outstanding		—			—
Weighted average Class A and Class C common shares    outstanding - Basic		39,477			37,232
Restricted shares and share units		—			—
Weighted average Class A and Class C common shares    outstanding - Diluted		39,477			37,232
Net loss per share attributable to Class A and Class C    common shareholders - Basic	$	(0.23	)	$	(0.59	)
Net loss per share attributable to Class A and Class C    common shareholders - Diluted	$	(0.23	)	$	(0.59	)

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Share Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

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, 2021:

	Three Months Ended March 31, 2021
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		157,465		$	38.73
Share units granted		157,390			21.86
Restricted shares vested		(90,195	)		33.70
Restricted shares forfeited		(8,481	)		36.75
Unvested restricted shares at end of period		216,179			28.62

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Organization - Additional Information (Detail) $ in Thousands, ft² in Millions		3 Months Ended
	Jul. 07, 2015 USD ($) JointVenture	Mar. 31, 2021 USD ($) ft² Property State	Mar. 31, 2020 USD ($)
Organization And Basis Of Presentation [Line Items]
Number of properties interested in the portfolio | Property		179
Number of states in properties located | State		41
Net cash (used in) provided by operating activities		$ 12,110	$ 10,200
Net cash (used in) provided by investing activities		$ (7,528)	$ 31,024
COVID-19 Pandemic [Member]
Organization And Basis Of Presentation [Line Items]
Expected future rent, description		Company had collected 97% of
Net cash (used in) provided by operating activities		$ 12,100
Net cash (used in) provided by investing activities		$ 44,200
COVID-19 Pandemic [Member] | March 2021 [Member]
Organization And Basis Of Presentation [Line Items]
Percent of contractual rental income collected		97.00%
Percent of tenant contractual rental income collected		2.00%
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price	$ 2,700,000
Interests in joint ventures acquired	50.00%
Number of joint venture acquired | JointVenture	3
Wholly Owned Properties [Member] | Holdco Master Lease [Member]
Organization And Basis Of Presentation [Line Items]
Number of wholly owned properties | Property		5
Real Estate Investment Trust [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²		26.0
Real Estate Investment Trust [Member] | Wholly Owned Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²		24.1
Number of wholly owned properties | Property		154
Number of states in properties located | State		41
Real Estate Investment Trust [Member] | Unconsolidated Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²		1.9
Number of states in properties located | State		13
Number of properties | Property		25

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Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2021 USD ($) Property State JointVenture shares	Mar. 31, 2020 USD ($) shares	Apr. 23, 2021	Dec. 31, 2020 USD ($) Property	Dec. 31, 2019 shares	Aug. 29, 2018 shares
Summary Of Significant Accounting Policies [Line Items]
Impairment loss on real estate assets	$ 1,700,000	$ 0
Number of real estate assets | Property	1
Number of properties classified | Property	3			1
Real estate held for sale, assets	$ 24,441,000			$ 1,864,000
Real estate held for sale, liabilities	0			$ 0
Impairment loss	0	0
Reduction to rental revenue	200,000	500,000
Reversal of straight line rent	$ 1,000,000.0	$ 0
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	154
Number of entities acquired | JointVenture	25
Number of states in properties located | State	41
Class C Common Shares [Member]
Summary Of Significant Accounting Policies [Line Items]
Common shares, outstanding | shares						0
Class B Common Shares [Member]
Summary Of Significant Accounting Policies [Line Items]
Common shares, outstanding | shares	0	0			1,243,000
Management and Other Fee Income [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of revenue earned from unconsolidated joint ventures	100.00%
Rent Deferral Agreements [Member]
Summary Of Significant Accounting Policies [Line Items]
Allowance to tenant	$ 100,000
Operating Partnership [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent	72.60%
Operating Partnership [Member] | Subsequent Event [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent			76.40%

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Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	3 Months Ended
	Mar. 31, 2021
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

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Summary of Significant Accounting Policies - Schedule of Gain on Sale of Real Estate (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Dispositions to third parties
Gross proceeds	$ 46.9	$ 60.4
Gain on sale of real estate, net	$ 24.2	$ 20.8

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 39,377	$ 77,308
Accumulated Amortization	(21,675)	(58,713)
Balance	17,702	18,595
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	35,452	73,169
Accumulated Amortization	(19,448)	(56,369)
Balance	16,004	16,800
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	3,925	4,139
Accumulated Amortization	(2,227)	(2,344)
Balance	$ 1,698	$ 1,795

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Below Market Lease Net [Abstract]
Gross Liability	$ 6,626	$ 6,626
Accumulated Amortization	(2,575)	(2,440)
Balance	$ 4,051	$ 4,186

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Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Additional property expense	$ 0.1	$ 0.1
Amortization of below-market leases, net of above-market leases	0.1	0.1
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 0.8	$ 21.0

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Lease Intangible Assets and Liabilities - Schedule of Future Amortization of Intangibles (Detail) $ in Thousands	Mar. 31, 2021 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2021	$ 152
2022	203
2023	203
2024	203
2025	203
2026	203
Thereafter	9,433
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2021	10
2022	(58)
2023	3
2024	27
2025	97
2026	190
Thereafter	2,084
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2021	2,260
2022	2,787
2023	1,921
2024	1,385
2025	1,077
2026	724
Thereafter	$ 5,850

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Investments in Unconsolidated Entities - Summary of Company's Investments in Unconsolidated Entities (Detail)	3 Months Ended
	Mar. 31, 2021 ft² Property
Income Statement Equity Method Investments [Line Items]
Number of Properties	25
Total GLA | ft²	3,968,600
Brookfield Properties Retail I [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	4
Total GLA | ft²	520,400
Brookfield Properties Retail II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	3
Total GLA | ft²	474,100
The Macerich Company [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	7
Total GLA | ft²	1,266,600
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	5
Total GLA | ft²	872,200
Invesco Real Estate [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA | ft²	103,000
Invesco Real Estate II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA | ft²	226,200
First Washington Realty [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA | ft²	163,700
Greenberg Gibbons [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
Total GLA | ft²	160,200
RD Management [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	50.00%
Number of Properties	1
New Mark Merrilll Companies And Other Entities [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership	20.00%
Number of Properties	1
Total GLA | ft²	182,200

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Investments in Unconsolidated Entities - Summary of Properties Contributed In Unconsolidated Entities (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Mark 302 JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Mar. 20, 2018	[1]
Contribution Value	$ 60.0	[1]
Gain (Loss)	$ 8.8	[1]
Cockeysville JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Mar. 29, 2019	[2]
Contribution Value	$ 12.5	[2]
Gain (Loss)	$ 3.8	[2]
Tech Ridge JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Sep. 27, 2019	[3]
Contribution Value	$ 3.0	[3]
Gain (Loss)	$ 0.1	[3]

[1] The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income based on signed leases and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million. During the year ended December 31, 2020 the Company adjusted the Contribution Value down to $60.0 million and reduced the Gain (Loss) by $30.0 million which is included in gain on sale of real estate on the consolidated statements of operations. The Company also recorded a $15.0 million reduction to the Mark 302 JV investment value and a $15.0 million payable related to the amounts due to its partner which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.  In addition, 2020, the Company and its partner entered into an agreement to extend the revaluation date for the Mark 302 JV to September 30, 2021. Pursuant to the terms of this agreement, the Company will pay its partner a fee of $1.1 million and the Contribution Value cannot be more than $90.0 million or less than $60.0 million. The Company will continue to re-evaluate the expected amount on a periodic basis through the final determination date

[2] The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the joint venture which was conditioned on certain milestones being met with respect to entitling the Additional Land Parcel for residential use. The Additional Land Parcel has been entitled for residential use. The Company has not reflected the contribution value of the Additional Land Parcel in the value of its investment in the Cockeysville JV based on uncertainty related to a potential alternative transaction with respect to the Additional Land Parcel. The Company will record an increased investment in the Cockeysville JV and additional gain in an amount equal to 50% of the fair value of the Additional Land Parcel at the earlier of when it becomes probable that the Additional Land Parcel will be contributed or upon an alternate outcome.

[3] The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

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Investments in Unconsolidated Entities - Summary of Properties Contributed In Unconsolidated Entities (Parenthetical) (Detail) - USD ($)			3 Months Ended		12 Months Ended
		Mar. 20, 2018	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Sep. 27, 2019
Related Party Transaction [Line Items]
Gain on sale of real estate			$ 24,208,000	$ 20,788,000
Mark 302 JV [Member]
Related Party Transaction [Line Items]
Contribution Date	[1]		Mar. 20, 2018
Cockeysville JV [Member]
Related Party Transaction [Line Items]
Contribution Date	[2]		Mar. 29, 2019
Tech Ridge JV [Member]
Related Party Transaction [Line Items]
Contribution Date	[3]		Sep. 27, 2019
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member]
Related Party Transaction [Line Items]
Accounts Payable On Sale Of Investment Real Estate On Final Contribution Value					$ 15,000,000.0
Real estate fee paid on sale of real estate based on final contribution value					$ 1,100,000
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Contribution Date		Dec. 31, 2020			Sep. 30, 2021
Final contribution value		$ 105,000,000.0			$ 90,000,000.0
Gain or loss on sale of real estate based on final contribution value		53,800,000			30,000,000.0
Contribution value		105,000,000.0			90,000,000.0
Invesco Real Estate [Member] | Santa Monica, CA [Member] | Mark 302 JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value		60,000,000.0			60,000,000.0
Gain or loss on sale of real estate based on final contribution value		8,800,000
Reduction in Final contribution value					15,000,000.0
Contribution value		$ 60,000,000.0			$ 60,000,000.0
Invesco Real Estate [Member] | West Hartford, CT [Member] | Tech Ridge JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value						$ 2,750,000
Contribution value						$ 2,750,000

[1] The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income based on signed leases and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate.  The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million. During the year ended December 31, 2020 the Company adjusted the Contribution Value down to $60.0 million and reduced the Gain (Loss) by $30.0 million which is included in gain on sale of real estate on the consolidated statements of operations. The Company also recorded a $15.0 million reduction to the Mark 302 JV investment value and a $15.0 million payable related to the amounts due to its partner which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.  In addition, 2020, the Company and its partner entered into an agreement to extend the revaluation date for the Mark 302 JV to September 30, 2021. Pursuant to the terms of this agreement, the Company will pay its partner a fee of $1.1 million and the Contribution Value cannot be more than $90.0 million or less than $60.0 million. The Company will continue to re-evaluate the expected amount on a periodic basis through the final determination date

[2] The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the joint venture which was conditioned on certain milestones being met with respect to entitling the Additional Land Parcel for residential use. The Additional Land Parcel has been entitled for residential use. The Company has not reflected the contribution value of the Additional Land Parcel in the value of its investment in the Cockeysville JV based on uncertainty related to a potential alternative transaction with respect to the Additional Land Parcel. The Company will record an increased investment in the Cockeysville JV and additional gain in an amount equal to 50% of the fair value of the Additional Land Parcel at the earlier of when it becomes probable that the Additional Land Parcel will be contributed or upon an alternate outcome.

[3] The Tech Ridge JV is subject to a revaluation primarily based upon the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

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Investments in Unconsolidated Entities - Summary of Combined Condensed Financial Data of Unconsolidated Entities (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Investment in real estate
Land		$ 571,334		$ 592,770
Accumulated depreciation		(146,884)		(142,206)
Net investment in real estate		1,870,623		1,910,872
Cash and cash equivalents		137,940		143,728
Total assets		2,612,376		2,648,943
Liabilities
Total liabilities		1,740,976		1,766,216
Members' Interest
Accumulated deficit		(537,582)		(528,637)
Total equity		871,400	$ 1,012,368	882,727	$ 1,043,370
Total liabilities and equity		2,612,376		2,648,943
Total revenue		31,281	33,317
Net loss		(10,933)	(30,975)
Unconsolidated Entities [Member]
Investment in real estate
Land		318,540		318,540
Buildings and improvements		492,335		492,973
Accumulated depreciation		(87,925)		(81,730)
Investment in real estate, gross		722,950		729,783
Construction in progress		228,349		222,663
Net investment in real estate		951,299		952,446
Cash and cash equivalents		18,785		16,094
Tenant and other receivables, net		5,584		4,104
Other assets, net		65,620		62,882
Total assets		1,041,288		1,035,526
Liabilities
Mortgage loans payable, net		34,675		34,672
Accounts payable, accrued expenses and other liabilities		42,627		48,405
Total liabilities		77,302		83,077
Members' Interest
Additional paid in capital		965,949		964,868
Accumulated deficit		(1,963)		(12,419)
Total equity		963,986		952,449
Total liabilities and equity		1,041,288		$ 1,035,526
Total revenue		7,729	5,341
Property operating expenses		(2,579)	(2,737)
Depreciation and amortization		(6,481)	(3,687)
Operating loss		(1,331)	(1,083)
Other expenses		(1,043)	(489)
Net loss		(2,374)	(1,572)
Equity in loss of unconsolidated entities	[1]	$ (1,162)	$ (786)

[1] Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments

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Investments in Unconsolidated Entities - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Schedule Of Equity Method Investments [Line Items]
Impairment charges related to unconsolidated properties	$ 0	$ 0
West Hartford JV [Member]
Schedule Of Equity Method Investments [Line Items]
Income earned from servicing activities		$ 200
Reverse Servicing Fees Amount	$ 100

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Leases - Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases (Detail) $ in Thousands	Mar. 31, 2021 USD ($)
Leases [Abstract]
Remainder of 2021	$ 66,971
2022	87,489
2023	80,770
2024	77,428
2025	77,156
2026	72,845
Thereafter	351,262
Total	$ 813,921

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Leases - Components of Lease Revenues (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Lessor Disclosure [Abstract]
Fixed rental income	$ 22,271	$ 27,648
Variable rental income	9,046	8,066
Total rental income	$ 31,317	$ 35,714

XML

Leases - Additional Information (Detail) $ in Thousands	1 Months Ended	3 Months Ended
	Dec. 31, 2020 USD ($)	Mar. 31, 2021 USD ($) Property	Mar. 31, 2020 USD ($)
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of properties subject to ground lease | Property		1
Number of properties subject to corporate office lease | Property		1
Operating leases expiration year		2073
Sales-leaseback financing obligations	$ 20,425	$ 20,582
Reversal of straight line rent		$ 1,000	$ 0
Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised | Property | Property		87
Hialeah
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Sales-leaseback financing obligations	$ 21,000
Sale leaseback term	25 years
Sale leaseback Interest rate	7.00%
Sale leaseback base rent	$ 1,500
Percentage of increase in annual rent	1.50%
Sale leaseback description	The Company has a purchase option during years four, five or seven of the 25-year term to reacquire, solely at the Company’s option, the Hialeah property at a predetermined price
Holdco Master Lease [Member] | Original And Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease termination, description		Under the terms of the Holdco Master Lease, Holdco had the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses. Sears Holdings exercised termination rights with respect to 87 properties under the Original Master Lease prior to its rejection on March 12, 2019 and Holdco exercised termination rights with respect to all remaining properties under the Holdco Master Lease during the year ended December 31, 2020, with the remaining five properties effective in March 2021.
Original And Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Reversal of straight line rent		$ 0	4,500
General and Administrative Expenses [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense		400	300
Property Operating Expense
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense		100	$ 100
Prepaid Expenses, Deferred Expenses and Other Assets, Net [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
ROU assets	$ 18,800	$ 18,600

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Leases - Information Related to Measurement of Lease Liabilities (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Lessee Disclosure [Abstract]
Weighted average remaining lease term (in years)	9 years 8 months 8 days
Weighted average discount rate	6.99%
Cash paid for operating leases (in thousands)	$ 488

XML

Leases - Schedule of Future Sale-Leaseback Financing Obligations (Detail) $ in Thousands	Mar. 31, 2021 USD ($)
Leases [Abstract]
Remainder of 2021	$ 1,082
2022	1,464
2023	1,486
2024	1,507
2025	1,531
2026	1,554
Thereafter	34,022
Interest	(22,064)
Total	$ 20,582

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Leases - Summary of Revenue from Master Lease (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property Subject to or Available for Operating Lease [Line Items]
Fixed rental income	$ 22,271	$ 27,648
Variable rental income	9,046	8,066
Total rental income	31,317	35,714
Original And Holdco Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Fixed rental income		4,288
Variable rental income	4,510	3,839
Total rental income	$ 4,510	$ 8,127

XML

Debt - Additional Information (Detail) - Term Loan Facility [Member] - USD ($)		3 Months Ended
	May 05, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Jul. 31, 2018
Debt Instrument [Line Items]
Principal amount outstanding		$ 1,600,000,000
Berkshire Hathaway [Member]
Debt Instrument [Line Items]
Principal amount outstanding					$ 2,000,000,000.0
Line of credit, maturity date			Jul. 31, 2023
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%	2.00%
Debt issuance costs		$ 2,100,000
Unamortized debt issuance costs		$ 1,000,000.0		$ 1,100,000
'Deferred interest	$ 400,000,000.0
Berkshire Hathaway [Member] | 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%
Berkshire Hathaway [Member] | Maximum [Member]
Debt Instrument [Line Items]
Unencumbered fixed charge coverage ratio		60.00%
Maximum leverage ratio		65.00%
Berkshire Hathaway [Member] | Maximum [Member] | Unrestricted cash [Member]
Debt Instrument [Line Items]
Available cash	$ 30,000,000.0
Berkshire Hathaway [Member] | Initial Funding [Member]
Debt Instrument [Line Items]
Principal amount outstanding					1,600,000,000
Debt instrument, base annual interest rate		7.00%
Berkshire Hathaway [Member] | Incremental Funding Facility [Member]
Debt Instrument [Line Items]
Principal amount outstanding					$ 400,000,000.0
Debt instrument, base annual interest rate		1.00%

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Income Taxes - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2021
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) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Asset Impairment Charges [Abstract]
Impairment loss on real estate assets	$ 1,700,000	$ 0
Minimum [Member]
Asset Impairment Charges [Abstract]
Fair value inputs capitalization rate	6.75%
Maximum [Member]
Asset Impairment Charges [Abstract]
Fair value inputs capitalization rate	9.25%
Fair Value, Inputs, Level 2 [Member]
Asset Impairment Charges [Abstract]
Debt obligations, fair value	$ 1,600,000,000		$ 1,600,000,000
Loss on Impairment [Member] | Fair Value, Inputs, Level 3 [Member]
Asset Impairment Charges [Abstract]
Impairment loss on real estate assets	$ 1,700,000	$ 0

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	Apr. 18, 2019	Mar. 31, 2021	Dec. 31, 2020	Jul. 07, 2015
Loss Contingencies [Line Items]
Environmental reserve		$ 9.5	$ 9.5	$ 12.0
Minimum [Member] | Sears Holdings Corporation [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 649.0
Maximum [Member] | Sears Holdings Corporation [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 749.0

XML

Related Party Disclosure - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Schedule of Other Related Party Transactions [Line Items]
Property development expenditures receivable	$ 33,964	$ 46,570
Unconsolidated Entities [Member]
Schedule of Other Related Party Transactions [Line Items]
Property development expenditures receivable	$ 200	$ 5,000
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	27.40%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | Class A Common Shares [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	4.20%

XML

Non-controlling Interests - Additional Information (Detail) - Operating Partnership [Member]	Mar. 31, 2021
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	72.60%
ESL [Member]
Noncontrolling Interest [Line Items]
Ownership interest percentage held by related party	27.40%

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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, 2021	Mar. 31, 2020	Dec. 31, 2017	Dec. 31, 2020	Dec. 31, 2019	Jul. 07, 2015
Class A Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued		40,587,226			38,896,428
Common shares, outstanding		40,587,226	38,622,000		38,896,428	36,897,000
OP Unit exchanges, shares		1,658,855	1,650,000
Common shares, par value		$ 0.01			$ 0.01		$ 0.01
Class B Non-Economic Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued		0
Common shares, outstanding		0
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				$ 66.4
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 Preferred Stock Dividends and Distributions (Detail) - $ / shares							3 Months Ended
	Apr. 27, 2021	Feb. 23, 2021	Dec. 17, 2020	Sep. 17, 2020	Jun. 09, 2020	Feb. 18, 2020	Mar. 31, 2021	Mar. 31, 2020
Dividends Payable [Line Items]
Preferred dividends declared, per share							$ 0.4375	$ 0.4375
Series A Preferred Shares [Member]
Dividends Payable [Line Items]
Dividends Payable Date Declared Day Month And Year		Feb. 28, 2023	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2009	Feb. 28, 2018
Dividends Payable Date Of Record Day Month And Year		Mar. 31, 2031	Dec. 31, 2031	Sep. 30, 2030	Jun. 30, 2030	Mar. 31, 2031
Dividend Payable Date To Be Paid Day Month And Year		Apr. 30, 2015	Jan. 15, 2021	Oct. 31, 2015	Jul. 31, 2015	Apr. 30, 2015
Preferred dividends declared, per share		$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750
Series A Preferred Shares [Member] | Subsequent Event [Member]
Dividends Payable [Line Items]
Dividends Payable Date Declared Day Month And Year	Apr. 30, 2027
Dividends Payable Date Of Record Day Month And Year	Jun. 30, 2030
Dividend Payable Date To Be Paid Day Month And Year	Jul. 31, 2015
Preferred dividends declared, per share	$ 0.43750

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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, 2021	Mar. 31, 2020
Numerator - Basic and Diluted
Net loss	$ (10,933)	$ (30,975)
Net loss attributable to non-controlling interests	3,213	10,311
Preferred dividends	(1,225)	(1,225)
Net loss attributable to common shareholders - Basic and diluted	$ (8,945)	$ (21,889)
Denominator - Basic and Diluted
Weighted average common shares outstanding	39,477	37,232
Weighted average Class A and Class C common shares outstanding - Diluted	39,477	37,232
Net loss per share attributable to Class A and Class C common shareholders - Basic	$ (0.23)	$ (0.59)
Net loss per share attributable to Class A and Class C common shareholders - Diluted	$ (0.23)	$ (0.59)
Class A Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding	39,477	37,232

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Earnings Per Share - Additional Information (Detail) - shares	Mar. 31, 2021	Dec. 31, 2020
Time Based Restricted Shares and Share Units [Member]
Earning Per Share [Line Items]
Non-vested restricted shares outstanding	216,179	157,465

XML

Share Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	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	$ 4.3	$ 9.2
Unrecognized compensation costs, weighted average expected recognition period	2 years 6 months	1 year 10 months 24 days
Restricted Share [Member] | General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized	$ 0.9	$ 1.2
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, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares at beginning of period | shares	157,465
Share units granted | shares	157,390
Restricted shares vested | shares	(90,195)
Restricted shares forfeited | shares	(8,481)
Unvested restricted shares at end of period | shares	216,179
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period | $ / shares	$ 38.73
Weighted-Average Grant Date Fair Value, Share units granted | $ / shares	21.86
Weighted-Average Grant Date Fair Value, Restricted shares vested | $ / shares	33.70
Weighted-Average Grant Date Fair Value, Restricted shares forefeited | $ / shares	36.75
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period | $ / shares	$ 28.62