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
year ended December 31, 2022.
“Our most significant recent accomplishment, achieved during the
first quarter of 2023, was the two-year extension of the Company’s
term loan to July 31, 2025. This was made possible by the decisive
actions we have taken to unlock the value of the Company’s diverse
and high-quality portfolio for the benefit of Seritage
shareholders. Since initiating our sale plan last year, we have
made significant progress on dispositions, selling 65 wholly owned
properties and eight joint venture assets for total gross proceeds
of $739.7 million in 2022 and $238.6 million of asset sales year to
date. We have used the sales proceeds to reduce the Company’s term
loan balance to $800 million from $1.6 billion. We are building on
our momentum with over $450 million of assets either under contract
or with accepted offers. Future sales will allow us to continue to
reduce debt throughout 2023. In addition to divesting of assets, we
continue to drive value through leasing, development and
entitlement activity. Despite challenging market conditions, we
continue to prudently progress our plan of sale to maximize value
for shareholders,” said Andrea Olshan, Chief Executive Officer and
President.
Sale Highlights:
- Generated $739.7 million of gross proceeds during the year
ended December 31, 2022 from the sale of 65 wholly owned properties
and eight joint venture assets.
- Subsequent to year end, generated $238.6 million of gross
proceeds from the sale of 18 assets.
- The Company has 17 assets under contract for sale with no due
diligence contingencies for total anticipated proceeds of $326.7
million and five assets under contract for sale subject to
customary due diligence for total anticipated proceeds of $39.6
million. All assets for sale are subject to customary closing
conditions. Additionally, the Company has accepted offers and is
currently negotiating definitive purchase and sale agreements on
assets with accepted offers of approximately $98.0 million.
Financial Highlights:
For the year ended December 31, 2022:
- As of December 31, 2022, the Company had cash on hand of $144.9
million, including $11.5 million of restricted cash. As of March 6,
2023, the Company had cash on hand of $97.4 million, including
$11.0 million of restricted cash.
- Net loss attributable to common shareholders of ($78.8)
million, or ($1.59) per share. Total net loss of ($120.0) million,
which includes $126.9 million of impairment of real estate assets
and $35.5 million litigation settlement.
- Total Net Operating Income (“Total NOI”) of $43.5 million,
which is an increase of 22% when compared to assets held in the
same manner as of December 31, 2021.
- During the year, the Company made $410 million in principal
repayments on the Company’s term loan facility (“Term Loan
Facility”). Subsequent to year end, the Company made an additional
$230 million in principal repayments, reducing the balance of the
Term Loan Facility to $800 million. The Company also extended the
maturity of the Term Loan Facility for an additional two years to
July 31, 2025.
Other Highlights
- Signed five leases covering 46 thousand square feet (41
thousand square feet at share) in the fourth quarter at an average
projected annual rent of $30.50 PSF ($28.24 PSF at share). To date
in 2023, the Company has signed additional leases totaling 84
thousand square feet at a base rent of $16.33 PSF stabilized and
has a leasing pipeline of over 200 thousand square feet.
- Leases signed in the fourth quarter included:
- Three new leases covering approximately 17 thousand square feet
(12 thousand square feet at share) at Premier assets at an average
projected annual rent of $55.39 PSF stabilized net ($57.52 PSF at
share);
- One upper floor lease covering approximately one thousand
square feet at a Premier asset at an average projected annual rent
of $44.00 PSF stabilized net; and
- One ground floor lease covering approximately 28 thousand
square feet at a Multi-Tenant Retail asset at an average projected
annual rent of $14.75 PSF stabilized net, bringing occupancy of the
Multi-Tenant Retail portfolio up to 81.0%.
- Leases signed in 2023 to date were:
- Eight thousand square feet of ground floor retail was leased at
a Premier asset at a base rent of $74.50 PSF stabilized net;
and
- 76 thousand square feet of ground floor retail space was leased
at a Multi-Tenant Retail asset at a base rent of $10.50 PSF
stabilized net.
- Opened four tenants in the fourth quarter totaling
approximately 150 thousand square feet (90 thousand square feet at
share) at an average rent of $14.48 PSF stabilized net ($14.34 PSF
stabilized at share):
- 12 thousand square feet at Multi-Tenant Retail assets at an
average base rent of $14.00 PSF stabilized net;
- 18 thousand square feet at Non-Core assets at an average base
rent of $13.35 PSF stabilized net; and
- 120 thousand square feet (60 thousand square feet at share) at
other unconsolidated entities assets at an average base rent of
$14.70 PSF stabilized net.
Portfolio
The table below represents a summary of the Company’s properties
by planned usage as of December 31, 2022:
(in thousands except number of leases and acreage data)
Planned Usage
Total
Built SF / Acreage (1)
Leased SF (1)(2)
Avg. Acreage / Site
Consolidated Properties
Multi-tenant Retail
31
4,422 sf / 429 acres
3,581
13.8
Residential (3)
4
44 sf / 35 acres
44
8.6
Premier Mixed Use
5
235 sf / 99 acres
156
19.7
Non-core (4)
40
6,127 sf / 498 acres
420
12.5
Unconsolidated Properties
Other Entities
13
1,106 sf / 185 acres
311
14.2
Residential (3)
1
49 sf / 12 acres
30
11.7
Premier Mixed Use
3
158 sf / 57 acres
106
19.0
(1)
Square footage is presented at the
Company’s proportional share.
(2) Based on signed leases at December 31, 2022. (3) Square footage
represents built ancillary retail space whereas acreage represents
both retail and residential acreage. (4) Represents assets the
Company previously designated for sale.
Multi-Tenant Retail
During the three months ended December 31, 2022, the Company
invested $3.7 million in its multi-tenant retail properties. The
remaining capital expenditures in the multi-tenant retail portfolio
are primarily comprised of tenant improvements.
The table below provides a summary of all Multi-Tenant Retail
signed leases as of December 31, 2022, including unconsolidated
entities at the Company’s proportional share:
(in thousands except number of leases and
PSF data)
Number of
Leased
% of
Gross Annual
% of Total
Gross Annual
Tenant
Leases
GLA
Total GLA
Base Rent
Annual Rent
Rent PSF
In-place leases
137
3,439
77.8
%
$
57,510
94.5
%
$
16.72
SNO leases (1)
15
141
3.2
%
3,355
5.5
%
23.79
Total
152
3,580
81.0
%
$
60,865
100.0
%
$
17.00
(1)
SNO = signed not yet opened leases.
During 2022, the Company signed new leases at its retail
properties totaling approximately 158 thousand square feet at an
average base rent of $17.81 PSF stabilized net. The Company also
brought leases on-line totaling approximately 513 thousand square
feet, at an average rent of $13.27 PSF stabilized net generating
approximately $6.8 million of annual base rent. Additionally, the
Company generated a leasing pipeline of over 100 thousand square
feet. The Company has 3.4 million leased square feet and
approximately 141 thousand square feet signed but not opened.
Seritage has total occupancy of 81.0% for its multi-tenant retail
properties. As of December 31, 2022, there is an additional
approximately 842 thousand square feet available for lease.
(in thousands except number of leases and
PSF data)
Number of
Annual
SNO Leases
GLA
ABR
Rent PSF
As of December 31, 2021
25
566
$
9,446
$
16.69
Opened
(17
)
(367
)
(5,013
)
13.66
Sold / terminated
(4
)
(110
)
(2,567
)
23.34
Change in asset categories
(2
)
(32
)
(427
)
13.34
Signed
13
84
1,930
22.98
Lease amendments
-
-
(14
)
N/A
As of December 31, 2022
15
141
$
3,355
$
23.79
Premier Mixed-Use
The Company has two premier mixed-use projects in the active
leasing stage, which includes our properties in Aventura, FL and
Santa Monica, CA. As of December 31, 2022, the Company has 66
thousand in-place leased square feet (43 thousand square feet at
share), 302 thousand square feet signed but not opened (219
thousand square feet at share), and 183 thousand square feet
available for lease (131 thousand square feet at share).
The table below provides a summary of all signed leases at
Premier assets as of December 31, 2022, including unconsolidated
entities at the Company’s proportional share:
(in thousands except number of leases and
PSF data)
Number of
Leased
% of
Gross Annual
% of Total
Gross Annual
Tenant
Leases
GLA
Total GLA
Rent
Annual Rent
Rent PSF
In-place leases
16
43
10.9
%
$
2,561
14.6
%
$
59.56
SNO retail leases (1)
27
111
28.2
%
8,612
49.2
%
77.59
SNO office leases (1)
4
108
27.4
%
6,328
36.2
%
58.59
Total
47
262
66.5
%
$
17,501
100.0
%
$
66.80
(1)
SNO = signed not yet opened leases.
Premier - Retail
(in thousands except number of leases and
PSF data)
Number of
Annual
SNO Leases
GLA
ABR
Rent PSF
As of December 31, 2021
21
137
$
8,975
$
65.51
Opened
(5
)
(5
)
(427
)
85.40
Sold / terminated
(3
)
(47
)
(2,213
)
47.09
Change in asset categories
(3
)
(2
)
(200
)
100.00
Signed
17
33
2,485
75.30
Lease amendments
-
(5
)
(8
)
N/A
As of December 31, 2022
27
111
$
8,612
$
77.59
(1)
Represents short-term leases now
represented in specialty leasing or amendments negotiated with the
tenant.
Premier - Office
(in thousands except number of leases and
PSF data)
Number of
Annual
SNO Leases
GLA
ABR
Rent PSF
As of December 31, 2021
1
27
$
999
$
37.00
Signed
3
81
5,330
65.80
As of December 31, 2022
4
108
$
6,329
$
58.59
During the three months ended December 31, 2022, the Company
invested $16.2 million in its consolidated development and
operating properties and an additional $0.4 million into its
unconsolidated entities.
Aventura:
During the fourth quarter of 2022, the Company continued to
advance 216 thousand square feet of mixed-use activation at the
project in Aventura, FL. The Company continues to advance
construction on Aventura and remains on track to open its first
tenants to the public in the second quarter of 2023, with rolling
openings thereafter.
During the quarter ended December 31, 2022, the Company signed
three new leases totaling nine thousand square feet at an average
base rent of $59.48 PSF stabilized net and has 136 thousand square
feet signed but not opened. With occupancy at 63.0%, the Company
has 80 thousand square feet available for lease, of which 8
thousand square feet is in lease negotiation and has leasing
activity on over an additional 72 thousand square feet.
Financial Summary
The table below provides a summary of the Company’s financial
results for the three months and year ended December 31, 2022:
(in thousands except per share
amounts)
Quarter Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Net gain (loss) attributable to common
shareholders
$
91,229
$
71,721
$
(78,845
)
$
(33,049
)
Net gain (loss) per share attributable to
common shareholders
1.63
1.64
(1.59
)
(0.78
)
Net gain (loss)
92,454
93,601
(120,097
)
(38,985
)
Total NOI
10,233
10,456
43,477
35,517
For the year and quarter ended December 31, 2022:
- Total NOI for the fourth quarter of 2022 reflects the impact of
$3.9 million total NOI relating to sold properties.
Total NOI is comprised of:
(in thousands)
Quarter Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Consolidated Properties
Multi-tenant Retail
$
12,694
$
12,534
$
46,295
$
43,861
Premier Mixed Use
(1,216
)
(699
)
(4,116
)
(2,362
)
Residential
19
(2,413
)
(1,711
)
(11,024
)
Non-Core
(3,399
)
45
(6,746
)
1,429
Sold
1,851
(926
)
3,750
(1,987
)
Total
9,949
8,541
37,472
29,917
Unconsolidated Properties
Residential
112
278
189
635
Premier Mixed Use
(2,707
)
189
(853
)
609
Other Entities
2,879
1,448
6,669
4,356
Total
284
1,915
6,005
5,600
Total NOI
$
10,233
$
10,456
$
43,477
$
35,517
The Company collected 99.6% of its base rent for the year ended
December 31, 2022.
As of December 31, 2022, the Company had cash on hand of $144.9
million, including $11.5 million of restricted cash. The Company
expects to use these sources of liquidity, together with a
combination of future sales and/or potential debt and capital
markets transactions, to pay its financing obligations and fund its
operations and development activity. The availability of funding
from sales of assets, partnerships and credit or capital markets
transactions is subject to various conditions, and there can be no
assurance that such transactions will be consummated. For more
information on our liquidity position, including our going concern
analysis, please see the notes to the consolidated financial
statements included in Part IV, Item 15 in our Annual Report on
Form 10-K.
Dividends
On February 16, 2022, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend was paid on April 15, 2022 to holders
of record on March 31, 2022.
On April 26, 2022, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend was paid on July 15, 2022 to holders
of record on June 30, 2022.
On July 26, 2022, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend was paid on October 17, 2022 to
holders of record on September 30, 2022.
On November 1, 2022, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend was paid on January 16, 2023 to
holders of record on December 30, 2022.
On February 15, 2023, the Company’s Board of Trustees declared a
preferred stock dividend of $0.4375 per each Series A Preferred
Share. The preferred dividend will be paid on April 17, 2023 to
holders of record on March 31, 2023.
The Company’s Board of Trustees does not expect to declare
dividends on its common shares until such time as the Term Loan
Facility has been repaid in full.
Strategic Review
During the 2022 Annual Meeting of Shareholders on October 24,
2022, Seritage shareholders approved the Company’s Plan of Sale.
The strategic review process remains ongoing as the Company
executes the Plan of Sale, and the Company remains open minded to
pursuing value maximizing alternatives, including a potential sale
of the Company. There can be no assurance regarding the success of
the process.
Market Update
Over the last several months, the Company, along with the
commercial real estate market as a whole, has experienced and
continues to experience progressively more challenging market
conditions as a result of, among other things, the continued rise
in interest rates, increases to required return hurdles for
institutional buyers, availability of debt capital (including the
willingness of commercial banks to lend in light of potential
recession risks and balance sheet constraints), continued inflation
resulting in higher construction and labor costs for development
(which has the effect of, among other things, making cost estimates
in development proformas more challenging), decreased demand for
office development (with concerns about long term demand for office
space including, but not limited to, continued work-from-home
trends), and slowing rent growth expectations due to potential
recession concerns. These conditions have applied and continue to
apply downward pricing pressure on all of our assets. The assets we
have sold to date have been those generally less impacted by these
adverse market trends. In making decisions regarding whether and
when to transact on each of the Company’s remaining assets, the
Company will consider various factors including, but not limited
to, the breadth of the buyer universe, macroeconomic conditions,
the availability and cost of financing, as well as corporate,
operating and other capital expenses required to carry the asset.
If these challenging market conditions persist, then we expect that
they will impact the Plan of Sale proceeds from our assets and the
amounts and timing of distributions to shareholders.
Sears Bankruptcy
Litigation
On April 6, 2022, the Court entered an order in the Consolidated
Litigation, upon the agreement of the parties thereto, providing
for a mediation of the litigation. The parties and the Court
extended the mediation several times, through August, and up until
the settlement described below was reached.
On August 9, 2022, following the mediation, all of the parties
to the Litigation and certain of the parties to the Shareholder
Litigation (to which Seritage is not a defendant) entered into a
settlement agreement pursuant to which the defendants paid to the
Sears estate $175 million (of which the Seritage Defendants
contributed approximately $35.0 million) in exchange for dismissal
of the Consolidated Litigation and for the full and final
satisfaction and release of all claims in the Consolidated
Litigation (including, in the case of the Seritage Defendants, any
and all claims between the Seritage Defendants and the Sears estate
in the Sears bankruptcy proceeding).
On September 2, 2022, the United States Bankruptcy Court for the
Southern District of New York entered an order approving the
settlement and, on October 18, 2022, the Litigation was dismissed.
While the Company believes that the claims against the Seritage
Defendants in the Litigation were without merit, the Company
entered into the settlement, without admitting any fault or
wrongdoing, in order to avoid the continued imposition of legal
defense costs, distraction, and the uncertainty and risk inherent
in any litigation.
The Company reserved the settlement amount described above based
on the Company’s contributions to the settlement of the Litigation.
This estimate was recorded as litigation reserve in the
consolidated statement of operations during the nine months ended
September 30, 2022. The Company paid the settlement amount
described above in October 2022.
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. Any amounts received from the
insurers will offset the Seritage Defendants’ contribution. During
the fourth quarter of 2022, the Company reached settlement
agreements with two of the D&O Insurers for gross proceeds of
$12.7 million. Subsequent to December 31, 2022, the Company reached
settlement agreements with the other two D&O Insurers for gross
proceeds of $11.6 million.
Supplemental Report
A Supplemental Report will be available in the Investors section
of the Company’s website, www.seritage.com.
COVID-19 Pandemic
The Coronavirus (“COVID-19”) pandemic has caused significant
impacts on the real estate industry in the United States, including
the Company’s properties.
As a result of the development, fluidity and uncertainty
surrounding this situation, the Company expects that these
conditions may change, potentially significantly, in future periods
and results for the three and twelve months ended December 31, 2022
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.
Non-GAAP Financial
Measures
The Company makes reference to NOI and Total NOI which are
financial measures that include adjustments to accounting
principles generally accepted in the United States (“GAAP”).
Neither of NOI or Total NOI are measures that (i) represent cash
flow from operations as defined by GAAP; (ii) are indicative of
cash available to fund all cash flow needs, including the ability
to make distributions; (iii) are alternatives to cash flow as a
measure of liquidity; or (iv) should be considered alternatives to
net income (which is determined in accordance with GAAP) for
purposes of evaluating the Company’s operating performance.
Reconciliations of these measures to the respective GAAP measures
the Company deems most comparable have been provided in the tables
accompanying this press release.
Net Operating Income ("NOI”) and Total
NOI
NOI is defined as income from property operations less property
operating expenses. Other real estate companies may use different
methodologies for calculating NOI, and accordingly the Company’s
depiction of NOI may not be comparable to other real estate
companies. The Company believes NOI provides useful information
regarding Seritage, its financial condition, and results of
operations because it reflects only those income and expense items
that are incurred at the property level.
The Company also uses Total NOI, which includes its proportional
share of unconsolidated properties. This form of presentation
offers insights into the financial performance and condition of the
Company as a whole given the Company’s ownership of unconsolidated
properties that are accounted for under GAAP using the equity
method.
The Company also considers NOI and Total NOI to be a helpful
supplemental measure of its operating performance because it
excludes from NOI variable items such as termination fee income, as
well as non-cash items such as straight-line rent and amortization
of lease intangibles.
Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. In some cases,
you can identify forward-looking statements by the use of
forward-looking terminology such as “may,” “should,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” or “potential” or the negative of these words and
phrases or similar words or phrases that are predictions of or
indicate future events or trends and that do not relate solely to
historical matters. Forward-looking statements involve known and
unknown risks, uncertainties, assumptions and contingencies, many
of which are beyond the Company’s control, which may cause actual
results to differ significantly from those expressed in any
forward-looking statement. Factors that could cause or contribute
to such differences include, but are not limited to: declines in
retail, real estate and general economic conditions; the impact of
the COVID-19 pandemic on the business of the Company’s tenants and
business, income, cash flow, results of operations, financial
condition, liquidity, prospects, ability to service the Company’s
debt obligations and ability to pay dividends and other
distributions to shareholders; risks relating to redevelopment
activities; contingencies to the commencement of rent under leases;
the terms of the Company’s indebtedness and other legal
requirements to which the Company is subject; failure to achieve
expected occupancy and/or rent levels within the projected time
frame or at all; the impact of ongoing negative operating cash flow
on the Company’s ability to fund operations and ongoing
development; the Company’s ability to access or obtain sufficient
sources of financing to fund the Company’s liquidity needs; the
Company’s relatively limited history as an operating company; and
environmental, health, safety and land use laws and regulations.
For additional discussion of these and other applicable risks,
assumptions and uncertainties, see the “Risk Factors” and
forward-looking statement disclosure contained in the Company’s
filings with the Securities and Exchange Commission, including the
Company’s annual report on Form 10-K for the year ended December
31, 2022. While the Company believes that its forecasts and
assumptions are reasonable, the Company cautions that actual
results may differ materially. The Company intends the
forward-looking statements to speak only as of the time made and do
not undertake to update or revise them as more information becomes
available, except as required by law.
About Seritage Growth
Properties
Seritage is principally engaged in the ownership, development,
redevelopment, management and leasing of retail and mixed-use
properties throughout the United States. As of December 31, 2022,
the Company’s portfolio consisted of interests in 97 properties
comprised of approximately 13.5 million square feet of gross
leasable area (“GLA”) or build-to-suit leased area, approximately
157 acres held for or under development and approximately 6.1
million square feet or approximately 498 acres to be disposed of.
The portfolio consists of approximately 10.8 million square feet of
GLA held by 80 wholly owned properties (such properties, the
“Consolidated Properties”) and 2.6 million square feet of GLA held
by 17 unconsolidated entities (such properties, the “Unconsolidated
Properties”).
SERITAGE GROWTH PROPERTIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share
amounts)
(Unaudited)
December 31, 2022
December 31, 2021
ASSETS
Investment in real estate
Land
$
172,813
$
475,667
Buildings and improvements
463,616
994,221
Accumulated depreciation
(57,330
)
(154,971
)
579,099
1,314,917
Construction in progress
185,324
381,194
Net investment in real estate
764,423
1,696,111
Real estate held for sale
455,617
—
Investment in unconsolidated entities
382,597
498,563
Cash and cash equivalents
133,480
106,602
Restricted cash
11,459
7,151
Tenant and other receivables, net
41,495
29,111
Lease intangible assets, net
1,791
14,817
Prepaid expenses, deferred expenses and
other assets, net
50,859
61,783
Total assets (1)
$
1,841,721
$
2,414,138
LIABILITIES AND EQUITY
Liabilities
Term loan facility, net
$
1,029,754
$
1,439,332
Sales-leaseback financing obligations
—
20,627
Accounts payable, accrued expenses and
other liabilities
89,368
109,379
Total liabilities (1)
1,119,122
1,569,338
Commitments and contingencies (Note 9)
Shareholders’ Equity
Class A common shares $0.01 par value;
100,000,000 shares authorized; 56,052,546 and 43,632,364 shares
issued and outstanding as of December 31, 2022 and December 31,
2021, respectively
561
436
Series A preferred shares $0.01 par value;
10,000,000 shares authorized; 2,800,000 shares issued and
outstanding as of December 31, 2022 and December 31, 2021;
liquidation preference of $70,000
28
28
Additional paid-in capital
1,360,411
1,241,048
Accumulated deficit
(640,531
)
(553,771
)
Total shareholders’ equity
720,469
687,741
Non-controlling interests
2,130
157,059
Total equity
722,599
844,800
Total liabilities and equity
$
1,841,721
$
2,414,138
SERITAGE GROWTH PROPERTIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Quarter Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
REVENUE
Rental income
$
22,852
$
28,091
$
104,609
$
115,651
Management and other fee income
91
434
2,446
1,032
Total revenue
22,943
28,525
107,055
116,683
EXPENSES
Property operating
10,233
11,493
41,770
45,007
Real estate taxes
2,894
7,497
23,950
35,256
Depreciation and amortization
9,342
11,570
41,114
51,199
General and administrative
16,638
9,947
47,634
41,949
Litigation settlement
—
—
35,533
—
Total expenses
39,107
40,507
190,001
173,411
Gain on sale of real estate
99,487
156,602
211,936
221,681
(Loss) gain on sale of interests in
unconsolidated entities
(538
)
—
(677
)
—
Impairment of real estate assets
(6,278
)
(25,773
)
(126,887
)
(95,826
)
Equity in loss of unconsolidated
entities
(3,009
)
(202
)
(72,080
)
(9,226
)
Interest and other income
38,690
1,083
37,753
9,285
Interest expense
(19,563
)
(26,128
)
(86,730
)
(107,975
)
Gain (loss) before income taxes
92,625
93,600
(119,631
)
(38,789
)
Income tax expense
(171
)
1
(466
)
(196
)
Net gain (loss)
92,454
93,601
(120,097
)
(38,985
)
Net gain (loss) attributable to
non-controlling interests
—
(20,655
)
46,152
10,836
Net gain (loss) attributable to
Seritage
$
92,454
$
72,946
$
(73,945
)
$
(28,149
)
Preferred dividends
(1,225
)
(1,225
)
(4,900
)
(4,900
)
Net gain (loss) attributable to Seritage
common shareholders
$
91,229
$
71,721
$
(78,845
)
$
(33,049
)
Net gain (loss) per share attributable to
Seritage Class A common shareholders - Basic
$
1.63
$
1.64
$
(1.59
)
$
(0.78
)
Net gain (loss) per share attributable to
Seritage Class A common shareholders - Diluted
$
1.62
$
1.64
$
(1.59
)
$
(0.78
)
Weighted average Class A common shares
outstanding - Basic
56,044
43,632
49,729
42,393
Weighted average Class A common shares
outstanding - Diluted
56,466
43,632
49,729
42,393
Reconciliation of Net Loss to NOI and Total NOI (in
thousands)
Quarter Ended December
31,
Year Ended December
31,
NOI and Total NOI
2022
2021
2022
2021
Net gain (loss)
$
92,454
$
93,601
$
(120,097
)
$
(38,985
)
Termination fee income
—
(388
)
(369
)
(3,378
)
Management and other fee income
(91
)
(434
)
(2,446
)
(1,032
)
Depreciation and amortization
9,342
11,570
41,114
51,199
General and administrative expenses
16,638
9,947
47,634
41,949
Litigation settlement
—
—
35,533
—
Equity in loss of Unconsolidated
Properties
3,009
202
72,080
9,226
Loss (gain) on sale of interests in
Unconsolidated Properties
538
—
677
—
Gain on sale of real estate
(99,487
)
(156,602
)
(211,936
)
(221,681
)
Impairment of real estate assets
6,278
25,773
126,887
95,826
Interest and other income
(38,690
)
(1,083
)
(37,753
)
(9,285
)
Interest expense
19,563
26,128
86,730
107,975
Income taxes
171
(2
)
466
196
Straight-line rent adjustment
176
(236
)
(1,271
)
(2,269
)
Above/below market rental
income/expense
48
65
223
176
NOI
$
9,949
$
8,541
$
37,472
$
29,917
Unconsolidated
entities (1)
NOI of Unconsolidated Properties (2)
1,223
2,193
7,785
6,942
Straight-line rent
(157
)
(309
)
(1,017
)
(885
)
Above/below market rental
income/expense
5
12
24
131
Termination fee income
(787
)
19
(787
)
(588
)
Total NOI
$
10,233
$
10,456
$
43,477
$
35,517
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230314005960/en/
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