SRGHIGH SIGNALFINANCIAL10-K

SRG underwent massive portfolio liquidation, shrinking from 17 to 10 properties while operating losses quintupled to $114.6M amid challenging capital market conditions.

The company disposed of nearly half its portfolio (7 properties, ~0.9M sq ft, 108 acres) yet operating losses exploded from $18M to $115M, suggesting either fire-sale pricing or significant impairments during the disposition process. With cash declining 44% to $48M and management citing difficulty accessing debt and equity capital markets, SRG appears to be in financial distress mode prioritizing liquidity over asset optimization.

Comparing 2026-03-31 vs 2025-03-31View on EDGAR →
FINANCIAL ANALYSIS

Despite dramatically shrinking the asset base by 42% and reducing total liabilities by 78%, operating losses quintupled to $115M indicating substantial losses on property dispositions or write-downs. The 44% cash decline to $48M combined with negative $35M operating cash flow signals acute liquidity pressure, though the company did improve its balance sheet leverage by significantly reducing debt. Overall, this reflects a distressed liquidation scenario where asset sales are generating substantial losses rather than providing the capital needed to stabilize operations.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
-536.6%
-$18.0M→-$114.6M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Net Income
P&L
-109.5%
-$73.9M→-$154.9M

Net income declined 109.5% — review whether driven by operations, interest costs, or non-recurring items.

Total Liabilities
Balance Sheet
-77.6%
$272.0M→$61.0M

Liabilities reduced 77.6% — deleveraging improves balance sheet strength and financial flexibility.

Cash & Equivalents
Balance Sheet
-43.6%
$85.2M→$48.1M

Cash declined 43.6% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Total Assets
Balance Sheet
-41.9%
$677.8M→$393.8M

Total assets contracted 41.9% — asset sales, write-downs, or balance sheet optimization underway.

Operating Cash Flow
Cash Flow
+34.8%
-$53.5M→-$34.9M

Operating cash flow surged 34.8% — exceptional cash generation, highest quality earnings signal.

Stockholders Equity
Balance Sheet
-18.1%
$404.5M→$331.4M

Equity decreased 18.1% — buybacks or losses reducing book value, monitor solvency ratios.

LANGUAGE CHANGES
NEW — 2026-03-31
PRIOR — 2025-03-31
ADDED
As of December 31, 2025, the Company s portfolio consisted of interests in 10 properties comprised of approximately 0.8 million square feet of gross leasable area ( GLA ) or build-to-suit leased area and 156 acres of land.
The portfolio encompasses five consolidated properties consisting of approximately 0.3 million square feet of GLA and 71 acres (such properties, the Consolidated Properties ) and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres (such properties, the Unconsolidated Properties ).
Since March 2021, the Company has not leased any properties to Sears Holdings or its successors after giving effect to the termination of the Holdco Master Lease.
Market Update The Company continues to face challenging market conditions, such as elevated interest rates and the availability of debt and equity capital, and it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues and uncertainty caused by wars.
While interest rates have started to decline, they remain high relative to interest rates in 2022.
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REMOVED
Seritage will continue to actively manage each location until such time as each property is sold.
As of December 31, 2024, the Company s portfolio consisted of interests in 17 properties comprised of approximately 1.7 million square feet of gross leasable area ( GLA ) or build-to-suit leased area and 274 acres of land.
The portfolio encompasses 10 wholly owned properties consisting of approximately 0.9 million square feet of GLA and 166 acres (such properties, the Consolidated Properties ) and seven unconsolidated entities consisting of approximately 0.8 million square feet of GLA and 108 acres (such properties, the Unconsolidated Properties ).
Since March 2021, the Company has not leased any properties to Sears Holdings or its successors after giving effect to the termination of the remaining Consolidated Properties.
Significant Tenants Management believes the Company s portfolio is reasonably diversified and does not contain any significant concentrations of credit risk.
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