- Seritage Growth Properties (SRG, Financial) generated $29.9 million from asset sales in Q1 2025, maintaining a 7.7% capitalization rate.
- The company reported a net loss of $23.4 million, or $0.42 per share, for Q1 2025.
- SRG's strategic Plan of Sale continues to focus on debt repayment via asset monetization.
Seritage Growth Properties (SRG) reported operating results for the first quarter ending March 31, 2025, emphasizing its ongoing Plan of Sale aimed at reducing debt. The company, involved in the ownership and development of retail, residential, and mixed-use properties, generated $29.9 million in gross proceeds from asset sales during the period, with a capitalization rate of 7.7%.
As of March 31, 2025, the company had $107.1 million in cash reserves, including $12.9 million in restricted cash. However, by May 13, this figure had decreased to $99.9 million, with $11.9 million in restricted cash. During the quarter, Seritage invested $13.3 million into its consolidated properties, demonstrating a strategic investment despite financial pressures.
Financially, Seritage reported a net loss of $23.4 million, equating to a loss of $0.42 per share. The company achieved a Net Operating Income (NOI) on a cash basis of $2.6 million. The company's strategic focus remains on transacting at suitable asset pricing while working to monetize the remaining portfolio assets to enhance shareholder value, according to Interim CEO & President Adam Metz.
Currently, SRG is negotiating the sale of a development asset for about $70 million, with long-term closing terms due to ongoing master plan amendments. Future sales projections suggest that several assets, particularly in primary and gateway markets, could yield between $25 million and $200 million each.
Amid a challenging market marked by elevated interest rates and other macroeconomic factors, SRG acknowledges that these conditions may impact the sale proceeds of its assets. The company intends to address these challenges by considering a wide array of factors, including potential buyer interest and financing availability, as part of its ongoing strategic review and asset sale process.
On the legal front, Seritage faces ongoing litigation, including class-action suits and derivative lawsuits, filed by shareholders over alleged securities law violations relating to internal controls and asset valuation disclosures. Despite these challenges, the company remains committed to defending itself vigorously.
In terms of management changes, Adam Metz was appointed as Interim CEO following the departure of Andrea L. Olshan. Additionally, SRG declared dividends for Series A Preferred Shares amounting to $0.4375 per share, to be paid later in 2025.
