SRGHIGH SIGNALOPERATIONAL10-K

SRG has dramatically downsized its portfolio from 17 to 10 properties, reducing total assets by 42% while meaningfully decreasing total liabilities.

The company appears to be executing a significant asset disposition strategy, having sold approximately 41% of its properties and nearly half of its gross leasable area. This portfolio rationalization has generated substantial debt reduction and likely cash proceeds, though the company's operating cash flow remains negative and the challenging capital markets environment continues to constrain growth opportunities.

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

The balance sheet reflects a major downsizing with total assets declining 42% to $394M and total liabilities falling substantially to $61M, indicating significant debt paydown from asset sales. Cash decreased 44% to $48M, while stockholders' equity declined modestly to $331M. Operating cash flow improved meaningfully but remains negative at -$35M, suggesting ongoing operational challenges despite the portfolio optimization efforts.

FINANCIAL STATEMENT CHANGES
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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