Seritage Growth Properties Reports Third Quarter 2023 Operating Results

In This Article:

NEW YORK, November 08, 2023--(BUSINESS WIRE)--Seritage Growth Properties (NYSE: SRG) (the "Company"), a national owner and developer of retail, residential and mixed-use properties today reported financial and operating results for the three and nine months ended September 30, 2023.

"We continue to make significant progress on asset sales, grossing more than $156 million during the quarter. We now have a line of sight to a portfolio of approximately 25 assets comprised of many of our best properties in prime markets around the country. Our team's operational discipline has allowed us to reduce run rate G&A, a trend we expect to continue into 2024. We remain focused on our balance sheet, keeping ample cash balances while using excess proceeds to progressively pay down our debt. Looking ahead, we will press on with our plan of sale with a continued focus on delivering value to our shareholders," said Andrea L. Olshan, Chief Executive Officer and President.

Sale Highlights:

  • Generated $156.8 million of gross proceeds during the quarter ended September 30, 2023 from sales including:

    • $48.2 million in gross proceeds from two income producing Multi-Tenant Retail assets reflecting a 7.5% blended capitalization rate;

    • $8.4 million in gross proceeds from two income producing Non-Core assets reflecting a 6.7% blended capitalization rate;

    • $6.2 million in gross proceeds from two vacant / non-income producing Non-Core assets sold at $11.79 PSF eliminating $0.6M of carry costs; and

    • $94.0 million in gross proceeds from monetizing three unconsolidated entity interests.

  • Subsequent to quarter end, generated $78.6 million of gross proceeds from sales including:

    • $27.5 million in gross proceeds from one income producing Multi-Tenant Retail asset reflecting a 6.4% capitalization rate; and

    • $51.1 million in gross proceeds from five vacant / non-income producing Non-Core assets sold at $64.28 PSF eliminating $1.7M of carry costs.

  • The Company has eight assets under contract for anticipated gross proceeds of $78.0 million. All assets for sale are subject to customary closing conditions. Of these eight assets, three are for sale with no due diligence contingencies for total anticipated gross proceeds of $11.8 million, four assets are under contract for sale subject to customary due diligence for total anticipated gross proceeds of $28.7 million and one asset is subject to a buyer termination right for anticipated gross proceeds of $37.5 million including:

    • $37.5 million in gross proceeds from one income producing Multi-Tenant Retail asset reflecting a 5.8% capitalization rate;

    • $9.2 million in gross proceeds from two income producing Non-Core assets reflecting a 6.4% blended capitalization rate; and

    • $31.3 million in gross proceeds from five vacant / non-income producing Non-Core assets sold at $39.56 PSF eliminating $1.8M of carry costs.

  • The Company has accepted offers on and is currently negotiating definitive purchase and sale agreements on seven assets for total gross proceeds of approximately $59.0 million including:

    • $28.0 million in gross proceeds from one income producing Multi-Tenant Retail asset reflecting a 7.7% capitalization rate;

    • $2.7 million in gross proceeds from one income producing Non-Core asset reflecting a 5.5% capitalization rate;

    • $8.5 million in gross proceeds from two vacant / non-income producing Non-Core assets sold at $37.59 PSF eliminating $0.4M of carry costs; and

    • $19.8 million in gross proceeds from monetizing three unconsolidated entity interests.