Seritage Growth Properties - FORM 8-K - EX-99.2

Attached files

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EX-99.1 - EX-99.1 - Seritage Growth Properties	srg-ex991_7.htm
8-K - 8-K - Seritage Growth Properties	srg-8k_20200227.htm

Exhibit 99.2

SUPPLEMENTAL INFORMATION || PERIOD ENDED DECEMBER 31, 2019

INTRODUCTION

Overview

Seritage Growth Properties (NYSE: SRG) (“Seritage” or the “Company”) is a fully-integrated, self-administered and self-managed REIT that is principally engaged in the acquisition, ownership, development, redevelopment, management, and leasing of diversified retail and mixed-use real estate throughout the United States.

As of December 31, 2019, the Company’s portfolio consisted of interests in 212 properties totaling approximately 33.4 million square feet of gross leasable area, including 184 wholly owned properties totaling approximately 28.7 million square feet of GLA across 44 states and Puerto Rico (the “Wholly Owned Properties”), and interests in 28 joint venture properties totaling approximately 4.7 million square feet of GLA across 14 states (the “JV Properties”).

The Company’s primary objective is to create value for its shareholders through the re-leasing and redevelopment of the majority of its Wholly Owned Properties and JV Properties. In doing so, the Company expects to meaningfully grow net operating income and diversify its tenant base while transforming its portfolio from one with a single-tenant orientation to one comprised predominately of first-class, multi-tenant shopping centers and larger-scale, mixed-use properties. In order to achieve its objective, the Company intends to execute the following strategies:

•	Convert single-tenant buildings into multi-tenant properties at meaningfully higher rents;

•	Maximize the value of vast land holdings through retail and mixed-use densification;

•	Leverage existing and future joint venture relationships with leading landlords and financial partners; and

•	Maintain a flexible capital structure to support value creation activities.

Background

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings”) effected a rights offering to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Acquired Properties”), and (ii) Sears Holdings’ 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (the “Acquired JV Properties”). Concurrent with the acquisition, the Company leased back to Sears Holdings space at 224 of the Acquired Properties under a master lease agreement (the “Original Master Lease”) and space at all 31 Acquired JV Properties under multiple master lease agreements (the “Original JV Master Leases”).

The rights offering ended on July 2, 2015, and the Company’s Class A common shares were listed on the New York Stock Exchange on July 6, 2015. On July 7, 2015, the Company completed the transactions with Sears Holdings and commenced operations. The Company did not have any operations prior to the completion of the rights offering and the transactions with Sears Holdings.

As of December 31, 2019, and after giving effect to certain Sears and Kmart properties that are subject to pending recapture or termination notices, the Company leased space at 17 Wholly Owned Properties to Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc. (“ESL”) and the successor to Sears Holdings, under a master lease (the “Holdco Master Lease”). The Company also leased space to Holdco at two JV Properties (the “Holdco JV Leases”).

General Information

Unless the context indicates otherwise, references in this supplemental information package (the "Supplemental") to "Seritage Growth,” “Seritage,” the “Company,” or “SRG” refer to Seritage Growth Properties and its subsidiaries. Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.


TABLE OF CONTENTS

SERITAGE GROWTH PROPERTIES

SUPPLEMENTAL INFORMATION

PERIOD ENDED DECEMBER 31, 2019

		Page
COMPANY INFORMATION		1

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets		2
Condensed Consolidated Statements of Operations		3

SUPPLEMENTAL FINANCIAL INFORMATION
Market Capitalization and Financial Ratios		4
Total Net Operating Income		5
EBITDAre and Company EBITDA		6
Funds from Operations and Company FFO		7
Additional Information		8

PROPERTY INFORMATION
Portfolio Overview		10
Leasing Activity		13
Retail Redevelopment Projects		14
Mixed-Use Redevelopment Projects		20
Recapture and Termination Properties		21
Joint Venture Properties		22
Wholly Owned Properties		24

DISCLOSURES
Non-GAAP Measures		30
Forward-Looking Statements		31


COMPANY INFORMATION



Company Contacts
Benjamin Schall	President and Chief Executive Officer	Kenneth Lombard	EVP and Chief Operating Officer
Brian Dickman	EVP and Chief Financial Officer	Matthew Fernand	EVP and General Counsel
James Bry	EVP, Development and Construction	Mary Rottler	EVP, Leasing and Operations
ir@seritage.com	Investor Relations and Communications	646.277.1268

Summary Information

December 31, 2019

(In thousands, except per share, PSF and ratio amounts)

	Quarter Ended December 31,						Year Ended December 31,
Financial Results	2019			2018			2019			2018
Net loss attributable to Seritage common shareholders (page 3)	$	(25,874	)	$	(56,038	)	$	(64,297	)	$	(78,375	)
Total NOI (page 5)		19,083			34,055			72,667			143,107
FFO (page 7)		(20,059	)		7,009			(33,793	)		24,111
Company FFO (page 7)		(14,966	)		(4,438	)		(33,896	)		15,746
Net loss per diluted share attributable to Seritage common shareholders (page 3)	$	(0.70	)	$	(1.57	)	$	(1.77	)	$	(2.20	)
FFO per diluted share (page 7)		(0.36	)		0.13			(0.61	)		0.43
Company FFO per diluted share (page 7)		(0.27	)		(0.08	)		(0.61	)		0.28
Wtd. avg. diluted shares - EPS		36,846			35,589			36,413			35,560
Wtd. avg diluted shares - FFO/share		55,802			55,747			55,800			55,713
Stock trading price range	$39.02 to $45.50			$31.17 to $47.88			$32.98 to $46.49			$31.17 to $51.53

							As of			As of
Financial Ratios (page 4)							December 31, 2019			December 31, 2018
Total debt to total market capitalization								41.0	%		46.1	%
Net debt to Company EBITDA								21.5	x		10.3	x
Company EBITDA to cash interest expense								0.7	x		1.3	x

							As of			As of
Property Data (page 10)							December 31, 2019			December 31, 2018
Number of properties								212			232
Gross leasable area (total / at share)							33,371 / 31,046			36,299 / 33,951
Percentage leased (total / at share)							42.6% / 42.9%			67.0% / 66.3%

				As of December 31, 2019
							% of Total
Tenant Data (pages 10-11)				Annual Rent			Annual Rent			Annual Rent PSF
In-place diversified leases				$	97,109			50.6	%	$	13.79
Signed not yet opened ("SNO") diversified leases					84,348			43.9	%		20.06
Sears/Kmart					10,577			5.5	%		5.10
Total				$	192,034			100.0	%	$	14.42

				As of December 31, 2018
							% of Total
				Annual Rent			Annual Rent			Annual Rent PSF
In-place diversified leases				$	66,200			31.4	%	$	13.13
SNO diversified leases					83,297			39.5	%		17.17
Sears/Kmart					61,341			29.1	%		4.86
Total				$	210,838			100.0	%	$	9.36

- 1 -


CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets (unaudited)

December 31, 2019

(In thousands, except share and per share amounts)

	December 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	667,004		$	696,792
Buildings and improvements		1,112,653			900,173
Accumulated depreciation		(147,696	)		(137,947	)
		1,631,961			1,459,018
Construction in progress		338,672			292,049
Net investment in real estate		1,970,633			1,751,067
Real estate held for sale		5,275			3,094
Investment in unconsolidated joint ventures		445,077			398,577
Cash and cash equivalents		139,260			532,857
Tenant and other receivables, net		54,470			36,926
Lease intangible assets, net		68,153			123,656
Prepaid expenses, deferred expenses and other assets, net		67,744			29,899
Total assets	$	2,750,612		$	2,876,076

LIABILITIES AND EQUITY
Liabilities
Term loan facility, net	$	1,598,487		$	1,598,053
Accounts payable, accrued expenses and other liabilities		108,755			127,565
Total liabilities		1,707,242			1,725,618

Commitments and contingencies

Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 36,897,364 and 35,667,521 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively		369			357
Class B common shares $0.01 par value; 5,000,000 shares authorized; 1,242,536 and 1,322,365 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively		12			13
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of December 31, 2019 and December 31, 2018; liquidation preference of $70,000		28			28
Additional paid-in capital		1,149,721			1,124,504
Accumulated deficit		(418,711	)		(344,132	)
Total shareholders' equity		731,419			780,770
Non-controlling interests		311,951			369,688
Total equity		1,043,370			1,150,458
Total liabilities and equity	$	2,750,612		$	2,876,076

- 2 -


CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Statements of Operations (unaudited)

December 31, 2019

(In thousands, except per share amounts)

	Quarter Ended December 31,						Year Ended December 31,
	2019			2018			2019			2018
REVENUE
Rental income	$	37,927			54,947		$	167,035		$	213,558
Management and other fee income		(1,293	)		167			1,598			1,196
Total revenue		36,634			55,114			168,633			214,754
EXPENSES
Property operating		11,122			8,583			42,123			28,705
Real estate taxes		9,080			9,649			38,595			42,446
Depreciation and amortization		36,578			92,627			104,581			226,675
General and administrative		12,970			9,980			39,156			34,788
Provision for doubtful accounts		—			—			—			257
Total expenses		69,750			120,839			224,455			332,871
Gain on sale of real estate		25,786			2,746			71,104			96,165
Equity in loss of unconsolidated joint ventures		(3,656	)		(3,442	)		(17,994	)		(10,448	)
Interest and other income		635			5,588			6,824			7,886
Interest expense		(26,878	)		(25,016	)		(94,519	)		(90,020	)
Change in fair value of interest rate cap		—			—			—			(23	)
Loss before income taxes		(37,229	)		(85,849	)		(90,407	)		(114,557	)
Provision for income taxes		(113	)		116			(196	)		(321	)
Net loss		(37,342	)		(85,733	)		(90,603	)		(114,878	)
Net loss attributable to non-controlling interests		12,693			30,920			31,206			41,406
Net loss attributable to Seritage	$	(24,649	)	$	(54,813	)	$	(59,397	)	$	(73,472	)
Preferred dividends		(1,225	)		(1,225	)		(4,900	)		(4,903	)
Net loss attributable to Seritage common shareholders	$	(25,874	)	$	(56,038	)	$	(64,297	)	$	(78,375	)

Net loss per share attributable to Seritage Class A and Class C common shareholders - Basic	$	(0.70	)	$	(1.57	)	$	(1.77	)	$	(2.20	)
Net loss per share attributable to Seritage Class A and Class C common shareholders - Diluted	$	(0.70	)	$	(1.57	)	$	(1.77	)	$	(2.20	)
Weighted average Class A and Class C common shares outstanding - Basic		36,846			35,589			36,413			35,560
Weighted average Class A and Class C common shares outstanding - Diluted		36,846			35,589			36,413			35,560

- 3 -


SUPPLEMENTAL FINANCIAL INFORMATION

Market Capitalization and Financial Ratios

December 31, 2019

(In thousands, except per share and ratio amounts)

	As of			As of
Equity Market Capitalization	December 31, 2019			December 31, 2018
Class A common shares outstanding		36,897			35,668
OP units outstanding		18,905			20,119
Total shares & units outstanding		55,802			55,787
Share Price	$	40.08		$	32.33
Equity market capitalization	$	2,236,544		$	1,803,594

Total Market Capitalization
Equity market capitalization	$	2,236,544		$	1,803,594
Preferred equity		70,000			70,000
Total debt		1,600,000			1,600,000
Total market capitalization	$	3,906,544		$	3,473,594

Financial Ratios
Total debt to total market capitalization		41.0	%		46.1	%

Total debt	$	1,600,000		$	1,600,000
Cash and cash equivalents		(139,260	)		(532,857	)
Net Debt	$	1,460,740		$	1,067,143

Net debt to Company EBITDA (1)		21.5	x		10.3	x

Gross real estate investments	$	2,354,787		$	2,156,295
Investment in unconsolidated joint ventures		445,077			398,577
Total real estate investments	$	2,799,864		$	2,554,872

Net debt to total real estate investments		52.2	%		41.8	%

Interest expense (net of amounts capitalized) (1)	$	94,519		$	90,020
Amortization of deferred financing costs (1)		(434	)		(10,323	)
Cash interest expense (net of amounts capitalized) (1)	$	94,085		$	79,697

Company EBITDA to cash interest expense (net of amounts capitalized) (1)		0.7	x		1.3	x

(1)	For the twelve months ended December 31, 2019 and December 31, 2018, respectively.

- 4 -


SUPPLEMENTAL FINANCIAL INFORMATION

Total Net Operating Income

December 31, 2019

(In thousands)

	Quarter Ended December 31,						Year Ended December 31,
NOI and Total NOI	2019			2018			2019			2018
Net loss	$	(37,342	)	$	(85,733	)	$	(90,603	)	$	(114,878	)
Termination fee income		(20	)		(11,549	)		(5,545	)		(18,711	)
Management and other fee income		1,293			(167	)		(1,598	)		(1,196	)
Depreciation and amortization		36,578			92,627			104,581			226,675
General and administrative expenses		12,970			9,980			39,156			34,788
Equity in loss of unconsolidated joint ventures		3,656			3,442			17,994			10,448
Gain on sale of real estate		(25,786	)		(2,746	)		(71,104	)		(96,165	)
Interest and other income		(635	)		(5,588	)		(6,824	)		(7,886	)
Interest expense		26,878			25,016			94,519			90,020
Change in fair value of interest rate cap		—			—			—			23
Provision for income taxes		113			(116	)		196			321
NOI	$	17,705		$	25,166		$	80,772		$	123,439
NOI of unconsolidated joint ventures		1,606			5,036			9,851			19,138
Straight-line rent adjustment (1)		(80	)		4,459			(15,742	)		2,170
Above/below market rental income/expense (1)		(148	)		(606	)		(2,214	)		(1,640	)
Total NOI	$	19,083		$	34,055		$	72,667		$	143,107

	As of December 31,
Annualized Total NOI	2019			2018
Total NOI (per above)	$	19,083		$	34,055
Period adjustments (2)		1,428			163
Adjusted Total NOI		20,511			34,218
Annualize		x 4			x 4
Adjusted Total NOI annualized		82,044			136,872
Plus: estimated annual Total NOI from SNO leases		81,323			80,223
Less: estimated annual Total NOI from associated space to be recaptured from Sears		(2,656	)		(4,354	)
Annualized Total NOI	$	160,711		$	212,741

(1)	Includes adjustments for unconsolidated joint ventures.

(2)	Includes adjustments to account for leases not in place for the full period.

- 5 -


SUPPLEMENTAL FINANCIAL INFORMATION

EBITDAre and Company EBITDA

December 31, 2019

(In thousands)

	Quarter Ended December 31,						Year Ended December 31,
EBITDAre and Company EBITDA	2019			2018			2019			2018
Net loss	$	(37,342	)	$	(85,733	)	$	(90,603	)	$	(114,878	)
Interest expense		26,878			25,016			94,519			90,020
Interest expense (unconsolidated joint venture)		108			—			357			—
Provision for income and other taxes		113			(116	)		196			321
Depreciation and amortization		36,578			92,627			104,581			226,675
Depreciation and amortization (unconsolidated joint ventures)		8,241			4,860			30,375			15,840
Gain on sale of real estate		(25,786	)		(2,746	)		(71,104	)		(96,165	)
EBITDAre	$	8,790		$	33,908		$	68,321		$	121,813
Termination fee income	$	(20	)	$	(11,549	)	$	(5,545	)	$	(18,711	)
Mortgage recording costs		5,008			—			5,008			—
Change in fair value of interest rate cap		—			—			—			23
Company EBITDA	$	13,778		$	22,359		$	67,784		$	103,125

- 6 -


SUPPLEMENTAL FINANCIAL INFORMATION

Funds from Operations and Company FFO

December 31, 2019

(In thousands, except per share amounts)

	Quarter Ended December 31,						Year Ended December 31,
FFO and Company FFO	2019			2018			2019			2018
Net loss	$	(37,342	)	$	(85,733	)	$	(90,603	)	$	(114,878	)
Real estate depreciation and amortization (consolidated properties)		36,053			91,853		$	102,439			224,217
Real estate depreciation and amortization (unconsolidated joint ventures)		8,241			4,860			30,375			15,840
Gain on sale of real estate		(25,786	)		(2,746	)		(71,104	)		(96,165	)
Dividends on preferred shares		(1,225	)		(1,225	)		(4,900	)		(4,903	)
FFO attributable to common shareholders and unitholders	$	(20,059	)	$	7,009		$	(33,793	)	$	24,111
Termination fee income		(20	)		(11,549	)		(5,545	)		(18,711	)
Change in fair value of interest rate cap		—			—			—			23
Amortization of deferred financing costs		105			102			434			10,323
Mortgage recording costs		5,008			—			5,008			—
Company FFO attributable to common shareholders and unitholders	$	(14,966	)	$	(4,438	)	$	(33,896	)	$	15,746

FFO per diluted common share and unit	$	(0.36	)	$	0.13		$	(0.61	)	$	0.43
Company FFO per diluted common share and unit	$	(0.27	)	$	(0.08	)	$	(0.61	)	$	0.28

Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		36,846			35,589			36,413			35,560
Weighted average OP units outstanding		18,956			20,158			19,387			20,153
Weighted average common shares and units outstanding		55,802			55,747			55,800			55,713

- 7 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information

December 31, 2019

(In thousands)

	As of		As of
Debt Summary	December 31, 2019		December 31, 2018
Term Loan Facility (drawn / undrawn)	$1,600,000 / 400,000		$1,600,000 / 400,000
Interest rate / undrawn rate	7.00% / 1.00%		7.00% / 1.00%
Maturity	July 2023		July 2023

Prepaid Expenses, Deferred Expenses and Other Assets
Deferred expenses	$	24,607	$	9,621
Right of Use Asset		18,521		—
Other assets		9,275		5,411
Prepaid insurance		4,386		3,283
FF&E		4,321		5,299
Other prepaid expenses		4,133		3,605
Prepaid real estate taxes		2,501		2,680
Total prepaid expenses, deferred expenses and other assets	$	67,744	$	29,899

Accounts Payable, Accrued Expenses and Other Liabilities
Accounts payable and accrued expenses	$	34,379	$	28,065
Accrued development expenditures		17,006		26,180
Accrued real estate taxes		12,979		14,108
Below-market leases		10,648		12,281
Environmental reserve		9,477		9,477
Lease liability		7,668		—
Prepaid rental income		6,750		4,021
Accrued interest		4,978		4,978
Deferred maintenance		1,722		1,722
Unearned tenant reimbursements		1,575		10,975
Common and preferred dividends and OP Unit distributions payable		1,573		15,758
Total accounts payable, accrued expenses and other liabilities	$	108,755	$	127,565

- 8 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information (cont’d)

December 31, 2019

(In thousands, except per share amounts)

	Quarter Ended December 31,						Year Ended December 31,
Rental Income Detail	2019			2018			2019			2018
Rental income	$	27,498		$	30,436		$	118,935		$	137,344
Tenant reimbursements		10,409			12,962			42,555			57,503
Termination income		20			11,549			5,545			18,711
Total	$	37,927		$	54,947		$	167,035		$	213,558

Select Non-Cash Items
Straight-line rental income
Wholly-owned	$	(35	)	$	(4,575	)	$	15,590		$	(2,825	)
Joint ventures		115			116			152			655
Total	$	80		$	(4,459	)	$	15,742		$	(2,170	)

Net amortization of above/below market rental income/expense
Wholly-owned	$	113		$	178		$	495		$	768
Joint ventures		35			428			1,719			872
Total	$	148		$	606		$	2,214		$	1,640

Amortization of deferred financing costs	$	(105	)	$	(101	)	$	(434	)	$	(10,322	)
Stock-based compensation expense		(2,611	)		(1,883	)		(6,845	)		(7,472	)

Dividends
Dividends per Class A and Class C common share	$	—		$	0.25		$	0.25		$	1.00
Declaration date				October 23
Record date				December 31
Payment date				January 10, 2019

- 9 -


PROPERTY INFORMATION

Portfolio Overview

December 31, 2019

(In thousands, except number of properties/leases and PSF amounts)

Portfolio Summary

The following table provides a summary of the Company’s portfolio as of December 31, 2019, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices:

	Wholly Owned			Unconsolidated
	Portfolio			Joint Ventures			Total
Number of properties		184			28			212

Total GLA		28,721			4,650			33,371
At share		28,721			2,325			31,046

Leased GLA		12,434			1,771			14,205
At share		12,434			886			13,320

Percentage leased		43.29	%		38.09	%		42.57	%
At share		43.29	%		38.09	%		42.90	%

Property Type

As of December 31, 2019, the portfolio included 113 properties characterized as attached to regional malls and 99 characterized as shopping center or freestanding properties. The following table provides a summary of the portfolio as of December 31, 2019, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices:

	Number of		Leased		Annual		Rent
Property Type (1)	Properties		GLA		Rent		PSF		Leased
Mall		113		5,746	$	106,093	$	18.46		32.8	%
Shopping Center		99		7,574		85,941		11.35		56.0	%
Total		212		13,320	$	192,034	$	14.42		42.9	%

(1)	Company classification. Mall properties are attached to regional malls; Shopping Center properties include properties attached to, within or adjacent to neighborhood shopping or power centers, as well as freestanding properties.

Tenant Overview

The following table provides a summary of annual base rent for the portfolio as of December 31, 2019, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices:

	Number of		Leased		% of Total			Annual		% of Total			Annual
Tenant	Leases		GLA		Leased GLA			Rent		Annual Rent			Rent PSF
In-place diversified leases		282		7,041		52.9	%	$	97,109		50.6	%	$	13.79
SNO diversified leases		174		4,204		31.5	%		84,348		43.9	%		20.06
Total diversified leases		456		11,245		84.4	%		181,457		94.5	%		16.14
Sears or Kmart (1)		19		2,075		15.6	%		10,577		5.5	%		5.10
Total		475		13,320		100.0	%	$	192,034		100.0	%	$	14.42

(1)	Number of leases reflects number of properties subject to the Holdco Master Lease and leases between the Company’s unconsolidated joint ventures and Holdco.

- 10 -


PROPERTY INFORMATION

Portfolio Overview (cont’d)

December 31, 2019

(In thousands, except number of leases and PSF amounts)

Top Tenants

The following table lists the top tenants in the portfolio as of December 31, 2019, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices:

(dollars in thousands)
Tenant	Number of Leases		Annual Rent		% of Total Annual Rent			Concepts/Brands
Dick's Sporting Goods		13	$	12,170		6.3	%
Sears/Kmart (1)		19		10,577		5.5	%	Sears, Sears Auto Center, Kmart
Dave & Buster's		12		9,975		5.2	%
Round One Entertainment		10		8,575		4.5	%
At Home		12		7,358		3.8	%
Burlington Stores		11		6,685		3.5	%
24 Hour Fitness		7		6,658		3.5	%
Ross Dress For Less		17		6,112		3.2	%	Ross Dress for Less, dd's Discounts
Cinemark		4		4,899		2.6	%
Nordstrom Rack		6		4,385		2.3	%
AMC		3		4,202		2.2	%
Equinox Fitness		15		3,996		2.1	%	Equinox, Blink Fitness
Primark		3		3,002		1.6	%
Hobby Lobby		5		2,587		1.3	%
Bed Bath & Beyond		6		2,489		1.3	%	Bed Bath & Beyond, buybuyBaby, Cost Plus World Market, andThat!
TJX		9		2,356		1.2	%	TJ Maxx, Marshalls, HomeGoods, HomeSense, Sierra Trading Post
Darden		12		2,312		1.2	%	Longhorn Steakhouse, Olive Garden, Seasons 52, Yardhouse, Bahama Breeze, Cheddar's
Pinstripes		2		2,035		1.1	%
PetSmart		4		2,012		1.0	%
Planet Fitness		8		2,011		1.0	%

*	The Company has signed 10 leases with Industrious to occupy 330,000 SF under revenue-sharing agreements that are expected to place Industrious among the Company’s top tenants.

(1)	Number of leases reflects number of properties subject to the Holdco Master Lease and leases between the Company’s unconsolidated joint ventures and Holdco.

- 11 -


PROPERTY INFORMATION

Portfolio Overview (cont’d)

December 31, 2019

(In thousands, except number of properties and PSF amounts)

Geographic Summary

The following table sets forth information regarding the geographic diversification of the portfolio as of December 31, 2019, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices:

(in thousands except property count and PSF data)

State	Number of Properties		Annual Rent		% of Total Annual Rent			Rent PSF
Florida		24	$	32,980		17.2	%	$	23.37
California		39		32,543		16.9	%		18.12
Texas		15		11,572		6.0	%		9.82
Illinois		10		11,439		6.0	%		12.26
New York		10		10,635		5.5	%		22.58
New Jersey		5		9,209		4.8	%		18.60
Virginia		5		8,890		4.6	%		12.77
Puerto Rico		6		6,911		3.6	%		7.66
Pennsylvania		5		6,051		3.2	%		13.72
Massachusetts		3		4,593		2.4	%		20.60
Total Top 10		122	$	134,823		70.2	%	$	15.78
Other (1)		90		57,211		29.8	%		11.99
Total		212	$	192,034		100.0	%	$	14.42

(1)	Includes 35 states.

- 12 -


PROPERTY INFORMATION

Leasing Activity

December 31, 2019

(In thousands, except number of leases and PSF amounts)

Signed Leases

The table below provides a summary of the Company’s leasing activity since inception through December 31, 2019, including JV Properties presented at the Company’s proportional share:

(in thousands except number of leases and PSF data)

	Total								Release of Sears Holdings Space
			Leased		Annual		Annual				Leased		Annual		Annual		Releasing
Period	Leases		GLA		Rent		Rent PSF		Leases		GLA		Rent		Rent PSF		Multiple
2015		9		154	$	4,650	$	30.28		6		130	$	3,820	$	29.41		4.4	x
2016		65		2,070		36,600		17.68		59		1,882		33,610		17.86		4.5	x
2017		94		2,606		44,717		17.16		86		2,476		43,299		17.49		4.0	x
2018		114		2,315		40,041		17.30		108		2,291		39,361		17.18		3.9	x
2019		106		2,287		46,541		20.35		96		2,150		44,640		20.76		3.9	x
Total Retail		388		9,432	$	172,549	$	18.29		355		8,929	$	164,730	$	18.45		4.0	x
Other (1)		14		995		7,219
Total		402		10,427	$	179,768

(1)	Reflects retail leasing activity and excludes certain self storage, auto-related, medical office and ground leases.

SNO Lease Summary

The table below provides a summary of the Company’s SNO leases from September 30, 2019 to December 31, 2019, including JV Properties presented at the Company’s proportional share:

							Total
	Number of						Annual			Annual
	SNO Leases			GLA			Rent			Rent PSF
As of September 30, 2019		178			4,534		$	89,443		$	19.73
Opened		(25	)		(913	)		(13,813	)		15.13
Sold / contributed to JVs / terminated		(9	)		(231	)		(3,663	)		15.86
Signed		30			814			12,381			15.21
As of December 31, 2019		174			4,204		$	84,348		$	20.06

- 13 -


PROPERTY INFORMATION

Retail Redevelopment Projects

December 31, 2019

(In millions, except number of projects)

As of December 31, 2019, the Company had originated 91 retail redevelopment projects since the Company’s inception. Excluding five projects that have been sold, these projects represent an estimated total investment of $1,580-1,660 million ($1,440-1,520 million at share), of which an estimated $660-740 million ($580-660 million at share) remains to be spent, and are expected to generate an incremental yield on cost of approximately 10-11%.

Below is a summary of the Company’s announced retail redevelopment activity from inception through December 31, 2019, presented at 100% share and including certain assets that have been monetized through sale or joint venture:

(in millions)
								Total						Estimated
	Number		Project		Percentage			Estimated		Spent		Projected Annual Income (2)		Incremental
Project Status	of Projects		Square Feet		Leased			Project Costs (1)		to Date		Total	Incremental	Yield (3)
Complete		26		2.7		94	%	$ 215 - 225		$	211
Substantially Complete / Delivered to Tenant(s)		33		3.9		70	%	630 - 655			451
Underway		18		2.6		68	%	615 - 645			245
Announced		9		1.1		71	%	120 - 135			12
Current Projects		86		10.3		76	%	$ 1,580 - 1,660		$	919	$ 201 - 217	$ 161 - 177	10.2 - 10.7%
Acquired		15							64
Sold		5							37
Total Projects		106						$ 1,680 - 1,760

(1)	Total estimated project costs include aggregate termination fees of approximately $81.0 million to recapture 100% of certain properties.

(2)	Projected annual income is based on assumptions for stabilized rents to be achieved at space under redevelopment. There can be no assurance that stabilized rent targets will be achieved.

(3)	Projected incremental annual income divided by total estimated project costs.

- 14 -


PROPERTY INFORMATION

Retail Redevelopment Projects (cont’d)

December 31, 2019

The tables below provide brief descriptions of each of the redevelopment projects originated on the Company’s platform since its inception:

Total Project Costs under $10 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

King of Prussia, PA

Repurpose former auto center space for Outback Steakhouse, Yard House and Escape Room

25,300

Complete

Merrillville, IN

Redevelop existing store for At Home and small shop retail

132,000

Complete

Elkhart, IN

Store has been re-leased to Big R Stores

86,600

Complete

Bowie, MD

Recapture and repurpose auto center space for BJ's Brewhouse

7,500

Complete

Troy, MI

Redevelop existing store for At Home

100,000

Complete

Rehoboth Beach, DE

Redevelop existing store for andThat! and PetSmart

73,100

Complete

Henderson, NV

Redevelop existing store for At Home, Seafood City, Blink Fitness and additional retail

144,400

Complete

Cullman, AL

Redevelop existing store for Bargain Hunt, Tractor Supply and Planet Fitness

99,000

Complete

Jefferson City, MO

Redevelop existing store for Orscheln Farm and Home

96,000

Complete

Guaynabo, PR

Redevelop existing store for Planet Fitness, Capri and additional retail and restaurants

56,300

Complete

Westwood, TX

Site has been ground leased to Sonic Automotive for an auto dealership

213,600

Complete

Florissant, MO

Site densification; new outparcel for Chick-fil-A

5,000

Complete

Kearney, NE

Redevelop existing store for Marshall's, PetSmart, Ross Dress for Less and Five Below

64,900

Complete

New Iberia, LA

Redevelop existing store for Ross Dress for Less, Rouses Supermarkets, Hobby Lobby and small shop retail

93,100

Complete

Layton, UT

A portion of the space has been leased to Extra Space Storage; existing tenants include Vasa Fitness and small shop retail

183,200

Complete

St. Clair Shores, MI

Demolish existing store and develop site for new Kroger grocery store

106,500

Complete

Houston, TX

(Memorial City)

Entered into ground lease with adjacent mall owner; potential to participate in future redevelopment

214,400

Complete

Albany, NY

Repurpose auto center space for BJ's Brewhouse, Ethan Allen and additional small shop retail

28,000

Substantially complete

Dayton, OH

Repurpose auto center space for Outback Steakhouse and Hook & Reel

14,100

Substantially complete

Hopkinsville, KY

Redevelop existing store for Bargain Hunt, Farmer's Furniture, Harbor Freight Tools and small shop retail

85,100

Substantially complete

Mt. Pleasant, PA

Redevelop existing store for Aldi, Big Lots and additional retail

84,300

Substantially complete

Oklahoma City, OK

Site densification; new fitness center for Vasa Fitness

59,500

Substantially complete

North Little Rock, AR

Repurpose auto center space for LongHorn Steakhouse, Aspen Dental and additional retail

16,600

Delivered to tenant(s)

Greensboro, NC

Site densification; new outparcel for Mavis Tires

6,900

Q1 2020

Q4 2020

Middletown, NJ

Redevelop site for new ShopRite grocery store and additional retail

184,500

Q1 2020

Q2 2021

St. Petersburg, FL

(freestanding)

Redevelop existing store for At Home, Blink Fitness and additional small shop retail

188,800

Q2 2020

Q4 2020

Florin, CA

Densify site with new theatre for Maya Cinemas

57,000

Q2 2021

Q3 2022

Gainesville, FL

Repurpose existing store as office space for Florida Clinical Practice Association / University of Florida College of Medicine

139,100

Sold

Hagerstown, MD

Repurpose auto center space for BJ's Brewhouse, Verizon and additional retail

15,400

Sold

Hampton, VA

Site densification; new outparcel for Chick-fil-A

2,200

Sold

- 15 -


PROPERTY INFORMATION

Retail Redevelopment Projects (cont’d)

December 31, 2019

Total Project Costs $10 - $20 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Braintree, MA

Redevelop existing store for Nordstrom Rack, Saks OFF 5th and additional retail

78,700

Complete

Honolulu, HI

Redevelop existing store for Longs Drugs (CVS), PetSmart and Ross Dress for Less

76,100

Complete

Anderson, SC

Redevelop existing store for Burlington Stores, Gold's Gym, Sportsman's Warehouse, additional retail and restaurants

119,300

Complete

Springfield, IL

Redevelop existing store for Burlington Stores, Binny's Beverage Depot, Marshall's, Orangetheory Fitness, Outback Steakhouse, Core Life Eatery and additional small shop retail

119,300

Complete

Warwick, RI

Redevelop existing store and detached auto center for At Home, BJ's Brewhouse, Raymour & Flanigan, additional retail and restaurants

190,700

Complete

Hialeah, FL

(freestanding)

Redevelop existing store for Bed, Bath & Beyond, Ross Dress for Less and dd's Discounts to join current tenant, Aldi

88,400

Complete

North Hollywood, CA

Redevelop existing store for Burlington Stores and Ross Dress for Less

74,900

Complete

Paducah, KY

Redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail

102,300

Substantially complete

Thornton, CO

Redevelop existing store for Vasa Fitness and additional junior anchors

198,600

Substantially complete

Temecula, CA

Redevelop existing store and detached auto center for Round One, small shop retail and restaurants

65,100

Substantially complete

West Jordan, UT

Redevelop existing store and attached auto center for At Home, Burlington Stores, Planet Fitness and small shop retail

190,300

Substantially complete

Austin, TX

(Tech Ridge)

Redevelop existing store for AMC Theatres and restaurants (note: a portion of this property was contributed to the Tech Ridge JV in Q3 2019; this project reflects the retained, wholly-owned redevelopment)

53,900

Substantially complete

Roseville, MI

Redevelop existing store for At Home and Hobby Lobby

164,000

Substantially complete

Salem, NH

Densify site with new theatre for Cinemark and recapture and repurpose auto center for restaurant space to join existing tenant Dick's Sporting Goods

71,500

Delivered to tenant(s)

North Riverside, IL

Redevelop existing store and detached auto center for Blink Fitness, Round One, additional junior anchors, small shop retail and restaurants

118,500

Delivered to tenant(s)

Olean, NY

Redevelop existing store for Marshall's, Ollie's Bargain Basement and additional retail

125,700

Delivered to tenant(s)

Las Vegas, NV

Redevelop existing store for Round One and additional retail

78,800

Delivered to tenant(s)

Warrenton, VA

Redevelop existing store for HomeGoods and additional retail

97,300

Delivered to tenant(s)

Yorktown Heights, NY

Redevelop existing store for 24 Hour Fitness and other retail uses

85,200

Delivered to tenant(s)

Reno, NV

Redevelop existing store and auto center for Round One and additional retail

183,700

Delivered to tenant(s)

Charleston, SC

Redevelop existing store and detached auto center for Burlington Stores and additional retail

111,400

Delivered to tenant(s)

El Paso, TX

Redevelop existing store for Ross Dress for Less, dd's Discounts, Five Below and additional retail

111,600

Delivered to tenant(s)

Victor, NY

Redevelop existing store for Dick's Sporting Goods and additional retail

140,500

Delivered to tenant(s)

Pensacola, FL

Redevelop existing store for BJ's Wholesale, additional retail and restaurants

124,100

Underway

Q1 2020

Fresno, CA

Redevelop existing store and detached auto center for Ross Dress for Less, dd's Discounts and additional retail

78,300

Underway

Q1 2020

North Miami, FL

Redevelop existing store for Burlington Stores, Michael's and Ross Dress for Less

106,300

Underway

Q2 2020

Manchester, NH

Redevelop existing store for Dick's Sporting Goods, Dave & Busters, additional retail and restaurants

117,700

Underway

Q3 2020

Chicago, IL

(Kedzie)

Redevelop existing store for Ross Dress for Less, dd's Discounts, Five Below, Blink Fitness and additional retail

123,300

Underway

Q3 2020

Fairfax, VA

Redevelop existing store and attached auto center for Industrious, Dave & Busters, Dick's Sporting Goods, Lazy Dog and additional restaurants

211,000

Underway

Q1 2021

- 16 -


PROPERTY INFORMATION

Retail Redevelopment Projects (cont’d)

December 31, 2019

Total Project Costs $10 - $20 Million (cont’d)

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Madison, WI

Redevelop existing store for Dave & Busters, Total Wine & More, Hobby Lobby and additional retail and restaurants

130,800

Underway

Q1 2021

Merced, CA

Redevelop existing store for Burlington Stores, dd's Discounts, Five Below, Ulta Beauty and additional retail

92,600

Underway

Q2 2021

Cockeysville, MD

Partial recapture; redevelop existing store for HomeGoods, Michael's Stores, Onelife Fitness, additional retail and restaurants (note: contributed to the Cockeysville JV in Q1 2019)

160,300

Underway

Q3 2021

Chesapeake, VA

Redevelop existing store for Rosie's Gaming Emporium, additional entertainment and restaurants

185,900

Q2 2020

Q3 2021

Kissimmee, FL

Redevelop existing store for Conn’s HomePlus, Planet Fitness and additional retail to join existing tenant Big Lots

116,000

Q2 2021

Q1 2022

Santa Cruz, CA

Redevelop existing store for TJ Maxx, HomeGoods and additional junior anchors

60,400

Sold

Vancouver, WA

Redevelop existing store for Round One, Hobby Lobby and additional retail and restaurants

72,400

Sold

Saugus, MA

Redevelop existing store and detached auto center (temporarily on hold)

99,000

To be determined

- 17 -


PROPERTY INFORMATION

Retail Redevelopment Projects (cont’d)

December 31, 2019

Total Project Costs over $20 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Memphis, TN

Demolish and construct new buildings for LA Fitness, Nordstrom Rack, Ulta Beauty, Hopdoddy Burger Bar and additional retail and restaurants

125,200

Complete

St. Petersburg, FL

(Tyrone Square)

Demolish and construct new buildings for Dick's Sporting Goods, Lucky's Market, PetSmart, Five Below, Chili's Grill & Bar, Pollo Tropical, LongHorn Steakhouse, Verizon and additional small shop retail and restaurants

135,400

Complete

Orlando, FL

Demolish and construct new buildings for Floor & Decor, LongHorn Steakhouse, Olive Garden and additional small shop retail and restaurants

139,200

Substantially complete

West Hartford, CT

Redevelop existing store and detached auto center for buybuyBaby, Cost Plus World Market, REI, Saks OFF Fifth, other junior anchors, Shake Shack and additional small shop retail (note: contributed to the West Hartford JV in Q2 2018)

156,000

Substantially complete

Watchung, NJ

Demolish full-line store and detached auto center and construct new buildings for Cinemark, HomeSense, Sierra Trading Post, Ulta Beauty, Chick-fil-A, small shop retail and additional restaurants

126,700

Substantially complete

Wayne, NJ

Redevelop existing store and detached auto center for Cinemark, Dave & Busters, Yardhouse and additional retail and restaurants (note: contributed to the GGP II JV in Q3 2017)

156,700

Delivered to tenant(s)

Carson, CA

Redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail

163,800

Substantially complete

Greendale, WI

Redevelop existing store and attached auto center for Dick's Sporting Goods, Round One, TJ Maxx, additional retail and restaurants

223,800

Substantially complete

Anchorage, AK

Redevelop existing store for Safeway, Guitar Center, Planet Fitness and additional retail to join current tenant, Nordstrom Rack

142,500

Substantially complete

Aventura, FL

Demolish existing store and construct new, multi-level open air retail destination featuring a leading collection of additional experiential shopping, dining and entertainment concepts, including Industrious and Pinstripes, alongside a treelined esplanade and activated plazas

216,600

Initial deliveries to tenants Q1 2020

San Diego, CA

Redevelop existing store into two highly-visible, multi-level buildings with exterior facing retail space leased to Equinox Fitness, Industrious, Pinstripes and a premier mix of additional experiential shopping, dining, and entertainment concepts (note: contributed to UTC JV in Q2 2018)

206,000

Delivered to tenant(s)

Santa Monica, CA

Redevelop existing building into premier, mixed-use asset featuring unique, small-shop retail and creative office space (note: contributed to the Mark 302 JV in Q1 2018)

101,700

Completed core building construction

Tucson, AZ

Redevelop existing store for Round One

50,600

Substantially complete

El Cajon, CA

Redevelop existing store and auto center for Ashley Furniture, Bob's Discount Furniture, Burlington Stores and additional retail and restaurants; a portion of the basement has been leased to Extra Space Storage

242,700

Delivered to tenant(s)

East Northport, NY

Redevelop existing store and attached auto center for AMC Theatres, 24 Hour Fitness, additional junior anchors and small shop retail

179,700

Delivered to tenant(s)

Fairfield, CA

Redevelop existing store and auto center for Dave & Busters, AAA Auto Repair Center and additional retail

166,700

Underway

Q1 2020

Plantation, FL

Redevelop existing store and auto center for Industrious, GameTime, Powerhouse Gym, additional retail and restaurants

184,400

Underway

Q1 2020

Roseville, CA

Redevelop existing store and auto center for Cinemark, Round One, AAA Auto Repair Center, additional retail and restaurants

147,400

Underway

Q2 2020

San Antonio, TX

Redevelop existing store for Bed Bath & Beyond, buybuyBaby, Tru Fit and additional retail to complement repurposed auto center occupied by Orvis, Jared's Jeweler and Shake Shack

215,900

Underway

Q2 2020

- 18 -


PROPERTY INFORMATION

Retail Redevelopment Projects (cont’d)

December 31, 2019

Total Project Costs over $20 Million (cont’d)

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Ft. Wayne, IN

Redevelop existing store for Dave & Buster's, HomeGoods and additional retail to complement new outparcels for BJ's Brewhouse, Chick-fil-A and Portillo's

96,400

Underway

Q4 2020

Canton, OH

Redevelop existing store for Dick's Sporting Goods, Dave & Busters and additional retail and restaurants

208,200

Underway

Q1 2021

Hialeah, FL

(Westland Mall)

Redevelop existing store and auto center for Paragon Theaters, Ulta Beauty, Five Below, Panera Bread and additional retail and restaurants

148,100

Underway

Q2 2021

Orland Park, IL

Redevelop existing store for AMC Theatres, 24 Hour Fitness, additional retail and restaurants

181,900

Q3 2020

Q4 2021

Asheville, NC

Redevelop existing store and auto center for Alamo Drafthouse, restaurants and small shop retail

110,600

Q3 2020

Q1 2022

- 19 -


PROPERTY INFORMATION

Mixed-Use Redevelopment Projects

December 31, 2019

In the fourth quarter of 2019, the Company announced its first three multifamily projects, each of which represents the first phase of a larger, mixed-use development and are expected to have an aggregate incremental cost of $325-350 million for the initial phases.

Below is a summary and brief description of the Company’s recently announced mixed-use projects:

($ in millions)

Total

Estimated SRG Equity (3)

Number

Multifamily

Commercial

Estimated

Target Yield on Cost (2)

$ Value

% of Total

Project Status

of Projects

Units

SF (000s)

Costs (1)

Incremental

SRG Basis

Incl. Land

Est. Costs

Announced

850 - 925

125 - 145

$350 - 375

6.5% - 7.0%

6.3% - 6.8%

$95 - 130

25.0% - 35.0%

(1)	Total estimated costs equal incremental project costs plus land basis, including step-ups in land basis upon contribution to joint ventures, as applicable.

(2)	Incremental yield on cost equals estimated stabilized NOI divided by incremental project costs. Yield on cost at SRG basis equals estimated stabilized NOI divided by estimated project costs including land at Seritage cost basis. There can be no assurance that target yields will be achieved.

(3)	Estimated SRG equity is after giving effect to 50-60% loan-to-cost construction financing and joint venture partner contributions, as applicable. There can be no assurance that construction financing will be obtained on the terms assumed, or at all..

Mixed-Use Projects

Multifamily

Commercial

Estimated Project Schedule

Property

Project Description

Units

Square Feet

Start

Opening

Heritage Place

(Redmond, WA)

Demolish existing buildings and create 14-acre master-planned redevelopment approved for over one million square feet of residential, retail and office development

Current Project Activity

Class A multifamily development with ground-level retail

425 - 450

30,000 - 35,000

2020

2023

Additional Entitlements

Up to 490,000 square feet of office space and 75,000 square feet of additional retail and restaurant space, plus public parks and other site amenities

500,000 - 575,000

TBD

Park Heritage

(Dallas, TX)

Demolish existing buildings and create 23-acre urban-infill redevelopment in Midtown Dallas approved for over two million square feet of residential, retail, office and hotel development

Current Project Activity

Class A multifamily development with ground-level retail

275 - 300

20,000 - 25,000

2020

2022

Additional Entitlements

Up to 315 additional multifamily units, 1,400,000 square feet of office space and 395,000 square feet of additional retail and restaurant space, plus public spaces and other site amenities

300 - 325

1,250,000 - 1,750,000

TBD

North & Harlem

(Chicago, IL)

Redevelop existing site and create best-in-class mixed-use project that redefines the crossroads of the City of Chicago and the Village of Elmwood Park

Current Project Activity

Redevelop the Chicago West parcel into a mixed-use property featuring multifamily units and retail anchored by national grocer and fitness club

150 - 175

75,000 - 85,000

2020

2022

Additional Entitlements

Redevelop the Elmwood and Chicago East parcels adding up to 300 additional multifamily units and 20,000 square feet of additional retail

275 - 300

15,000 - 20,000

TBD

- 20 -


PROPERTY INFORMATION

Recapture and Termination Properties

December 31, 2019

Recapture Properties

The Company exercised recapture rights with respect to 70 properties under the Original Master Lease prior to its rejection on March 12, 2019 and with respect to four properties under the Holdco Master Lease during the year ended December 31, 2019, including three properties where the Company had previously exercised certain recapture rights under the Original Master Lease.

The following table provides a summary of the Company’s recapture activity:

(in thousands except property count)
Year	Square Feet		Total Number of Properties	100% Recaptures (1)	Partial Recaptures (2)
2019		629	4	3	1
2018		3,428	20	17	3
2017		3,302	27	16	11
2016		1,501	17	4	13
2015		372	3	3		—
Total		9,232	71	43	28

(1)	Includes properties for which the Company had converted partial recapture rights to 100% recapture rights.

(2)

Partial recaptures include the recapture of (i) up to approximately 50% of the space occupied by the tenant at all properties, (ii) automotive care centers which are free-standing or attached as “appendages” to the properties, and/or (iii) outparcels or outlots and certain portions of parking areas and common areas

Termination Properties

Sears Holdings exercised termination rights with respect to 87 properties under the Original Master Lease prior to its rejection on March 12, 2019 and Holdco exercised termination rights with respect to 29 properties under the Holdco Master Lease during the year ended December 31, 2019.

The following table provides a summary of Sears Holdings’ and Holdco’s termination activity (note than leases at an additional 31 properties totaling 4.3 million square feet were rejected in March 12, 2019 as part of Sears Holdings’ bankruptcy filing):

(in thousands except property count)
Notice Date	Termination Date	Square Feet		Total Number of Properties		Number of Properties Redeveloped by the Company		Number of Properties Sold by the Company
November 2019	March 2020		4,332		29		7		1
August 2018	December 2018		1,605		13		6		3
June 2018	November 2018 (1)		1,218		9		6		1
April 2018	August 2018		1,494		9		4		1
June 2017	October 2017 (2)		3,812		20		8		4
January 2017	April 2017		1,872		19		7		8
September 2016	January 2017		1,727		17		8		6
Total			16,060		116		46		24

(1)	Two properties were terminated in October 2018.

(2)	One property was terminated in November 2017 and another one was terminated in January 2018.

- 21 -


PROPERTY INFORMATION

Joint Venture Properties

December 31, 2019

Brookfield Retail Partners (formerly GGP, Inc.) Joint Ventures

					Total
	Mall Name	City	State	Joint Venture	GLA (1)		Leased (1)
1	Northridge Fashion Center	Northridge	CA	GGP II JV		145,850		81.4	%
2	Altamonte Mall	Altamonte Springs	FL	GGP II JV		92,200		42.0	%
3	Coastland Center	Naples	FL	GGP II JV		41,900		70.9	%
4	Cumberland Mall	Atlanta	GA	GGP II JV		96,950		100.0	%
5	Natick Collection (2)	Natick	MA	GGP I JV		95,350		21.0	%
6	Willowbrook Mall	Wayne	NJ	GGP II JV		140,500		35.7	%
7	Sooner Mall (2)	Norman	OK	GGP I JV		33,450		0.0	%
8	Stonebriar Centre	Frisco	TX	GGP I JV		81,450		0.0	%
9	Alderwood	Lynnwood	WA	GGP I JV		50,000		49.3	%

(1)	Based on signed leases as of December 31, 2019; GLA presented at the Company's proportional share.

(2)	Property is subject to a lease or ground lease agreement.

Simon Joint Venture

					Total
	Mall Name	City	State	Joint Venture	GLA (1)		Leased (1)
1	Santa Rosa Plaza	Santa Rosa	CA	Simon JV		82,700		0.0	%
2	Briarwood	Ann Arbor	MI	Simon JV		85,300		0.0	%
3	The Shops at Nanuet	Nanuet	NY	Simon JV		110,700		0.0	%
4	Woodland Hills Mall	Tulsa	OK	Simon JV		75,100		0.0	%
5	Barton Creek Square	Austin	TX	Simon JV		82,300		0.0	%

(1)	Based on signed leases as of December 31, 2019; GLA presented at the Company's proportional share.

Macerich Joint Venture

					Total
	Mall Name	City	State	Joint Venture	GLA (1)		Leased (1)
1	Chandler Fashion Center	Chandler	AZ	Macerich JV		69,750		53.0	%
2	Arrowhead Towne Center	Glendale	AZ	Macerich JV		62,500		0.0	%
3	Los Cerritos Center	Cerritos	CA	Macerich JV		138,800		0.0	%
4	Vintage Faire Mall	Modesto	CA	Macerich JV		74,250		54.2	%
5	Danbury Fair	Danbury	CT	Macerich JV		89,250		100.0	%
6	Deptford Mall	Deptford	NJ	Macerich JV		95,850		76.1	%
7	Freehold Raceway Mall	Freehold	NJ	Macerich JV		69,400		100.0	%
8	Washington Square Mall	Portland	OR	Macerich JV		110,000		0.0	%
9	South Plains Mall	Lubbock	TX	Macerich JV		75,300		0.0	%

(1)	Based on signed leases as of December 31, 2019; GLA presented at the Company's proportional share.

- 22 -


PROPERTY INFORMATION

Joint Venture Properties (cont’d)

December 31, 2019

Invesco Real Estate Joint Ventures

Total

Property Address

City

State

Joint Venture

GLA (1)

Leased (1)

302 Colorado Avenue

Santa Monica

Mark 302 JV

51,500

0.0

4575 La Jolla Village Drive

San Diego

UTC JV

113,150

66.5

(1)	Based on signed leases as of December 31, 2019; GLA presented at the Company's proportional share.

Other Joint Ventures

Total

Property Address

City

State

Joint Venture

GLA (1)

Leased (1)

1445 New Britain Avenue

West Hartford

West Hartford JV

81,850

89.6

126 Shawan Road

Cockeysville

Cockeysville JV

80,100

61.4

12625 North Interstate Highway 35

Austin

Tech Ridge JV

(1)	Based on signed leases as of December 31, 2019; GLA presented at the Company's proportional share.

- 23 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
1	700 East Northern Lights Boulevard	Anchorage	AK	Shopping Center			158,500		82.4	%		26
2	1731 2nd Avenue Southwest	Cullman	AL	Freestanding			88,500		100.0	%		6
3	3930 McCain Boulevard	North Little Rock	AR	Mall	X(4)		177,000		5.5	%		15
4	6515 East Southern Avenue	Mesa	AZ	Mall			121,900		13.8	%		11
5	10140 North 91st Avenue	Peoria	AZ	Shopping Center			104,400		100.0	%		10
6	7611 West Thomas Road	Phoenix	AZ	Mall			144,200		8.3	%		10
7	12025 North 32nd Street	Phoenix	AZ	Freestanding			151,200		100.0	%		11
8	3400 Gateway Boulevard	Prescott	AZ	Mall	X(4)		102,300		0.0	%		10
9	2250 El Mercado Loop	Sierra Vista	AZ	Mall			94,700		0.0	%		7
10	5950 East Broadway Boulevard	Tucson	AZ	Mall			218,900		34.5	%		20
11	3150 South 4th Avenue	Yuma	AZ	Shopping Center			90,400		0.0	%		14
12	3625 East 18th Street	Antioch	CA	Shopping Center			95,200		0.0	%		7
13	42126 Big Bear Boulevard	Big Bear Lake	CA	Shopping Center	X		80,000		91.6	%		8
14	20700 South Avalon Boulevard	Carson	CA	Mall			182,200		60.2	%		13
15	565 Broadway	Chula Vista	CA	Mall	X(4)		250,100		0.0	%		16
16	5900 Sunrise Mall	Citrus Heights	CA	Mall			289,500		0.0	%		22
17	912 County Line Road	Delano	CA	Freestanding			86,100		0.0	%		6
18	575 Fletcher Parkway	El Cajon	CA	Mall			244,900		76.6	%		22
19	3751 South Dogwood Road	El Centro	CA	Mall			139,700		37.7	%		14
20	1420 Travis Boulevard	Fairfield	CA	Mall			163,500		27.6	%		9
21	5901 Florin Road	Florin	CA	Shopping Center			329,700		20.9	%		20
22	3636 North Blackstone Avenue	Fresno	CA	Shopping Center	X(4)		216,600		20.0	%		13
23	1500 Anna Sparks Way	McKinleyville	CA	Shopping Center	X		94,800		100.0	%		8
24	1011 West Olive Avenue	Merced	CA	Shopping Center			92,600		86.2	%		10
25	5080 East Montclair Plaza Lane	Montclair	CA	Mall	X(4)		174,700		0.0	%		3
26	22550 Town Circle	Moreno Valley	CA	Mall	X(4)		169,400		0.0	%		11
27	6000 Mowry Avenue	Newark	CA	Mall			145,800		24.7	%		10
28	12121 Victory Boulevard	North Hollywood	CA	Shopping Center	X(4)		161,900		46.3	%		4
29	72880 Highway 111	Palm Desert	CA	Mall	X(4)		136,500		21.1	%		8
30	1855 Main Street	Ramona	CA	Shopping Center	X		107,500		94.6	%		10
31	5261 Arlington Avenue	Riverside	CA	Freestanding	X(4)		214,200		5.7	%		19
32	3001 Iowa Avenue	Riverside	CA	Freestanding			132,600		28.7	%		13
33	1191 Galleria Boulevard	Roseville	CA	Mall			136,200		88.0	%		9
34	1700 North Main Street	Salinas	CA	Mall	X		133,000		100.0	%		10
35	100 Inland Center	San Bernardino	CA	Mall	X(4)		264,700		0.0	%		22
36	1178 El Camino Real	San Bruno	CA	Mall	X(4)		276,600		14.2	%		13

- 24 -


PROPERTY INFORMATION

Wholly Owned Properties (cont’d)

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
37	2180 Tully Road	San Jose	CA	Mall	X(4)		262,500		0.0	%		22
38	200 Town Center East	Santa Maria	CA	Mall	X(4)		108,600		0.0	%		5
39	895 Faulkner Road	Santa Paula	CA	Freestanding	X(4)		71,300		0.0	%		10
40	40710 Winchester Road	Temecula	CA	Mall	X(4)		120,100		40.5	%		10
41	145 West Hillcrest Drive	Thousand Oaks	CA	Shopping Center			161,400		100.0	%		11
42	3295 East Main Street	Ventura	CA	Mall	X(4)		178,600		6.7	%		2
43	1209 Plaza Drive	West Covina	CA	Mall	X(4)		142,000		0.0	%		16
44	100 Westminster Mall	Westminster	CA	Mall			197,900		0.0	%		14
45	10785 West Colfax Avenue	Lakewood	CO	Shopping Center			153,000		7.8	%		8
46	1400 East 104th Avenue	Thornton	CO	Shopping Center			203,100		76.0	%		25
47	850 Hartford Turnpike	Waterford	CT	Mall			149,200		0.0	%		11
48	19563 Coastal Highway	Rehoboth Beach	DE	Freestanding	X(4)		118,300		44.9	%		13
49	5900 Glades Road	Boca Raton	FL	Mall			178,500		2.4	%		19
50	7350 Manatee Avenue West	Bradenton	FL	Shopping Center	X(4)		82,900		0.0	%		9
51	27001 U.S. 19 North	Clearwater	FL	Mall			211,300		41.5	%		14
52	1625 Northwest 107th Avenue	Doral	FL	Mall			212,900		0.0	%		13
53	4125 Cleveland Avenue	Ft. Myers	FL	Mall	X(4)		146,800		0.0	%		12
54	1675 West 49th Street	Hialeah	FL	Mall			148,200		64.2	%		8
55	1460 West 49th Street	Hialeah	FL	Freestanding			106,300		100.0	%		9
56	2211 West Vine Street	Kissimmee	FL	Shopping Center			140,400		73.6	%		14
57	3800 US Highway 98 North	Lakeland	FL	Mall			156,200		0.0	%		12
58	1050 South Babcock Street	Melbourne	FL	Freestanding			102,600		0.0	%		14
59	19505 Biscayne Boulevard	Miami	FL	Mall			215,500		49.8	%		12
60	20701 Southwest 112th Avenue	Miami	FL	Mall	X(4)		170,100		0.0	%		15
61	10700 Biscayne Boulevard	North Miami	FL	Freestanding			125,400		100.0	%		11
62	3100 Southwest College Road	Ocala	FL	Mall			146,200		0.0	%		12
63	380 Blanding Boulevard	Orange Park	FL	Shopping Center			87,400		100.0	%		9
64	3111 East Colonial Drive	Orlando	FL	Mall			135,700		94.8	%		18
65	733 North Highway 231	Panama City	FL	Mall			139,300		0.0	%		15
66	7171 North Davis Highway	Pensacola	FL	Shopping Center			122,100		89.2	%		15
67	8000 West Broward Boulevard	Plantation	FL	Mall			184,400		81.9	%		18
68	8201 South Tamiami Trail	Sarasota	FL	Mall			212,400		0.0	%		15
69	4501 66th Street North	St. Petersburg	FL	Freestanding			113,800		86.8	%		11
70	2300 Tyrone Boulevard North	St. Petersburg	FL	Mall			149,300		92.7	%		14
71	7810 Abercorn Street	Savannah	GA	Mall			167,300		0.0	%		15
72	500 North Nimitz Highway	Honolulu	HI	Freestanding			76,100		100.0	%		4

- 25 -


PROPERTY INFORMATION

Wholly Owned Properties (cont’d)

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
73	1501 Highway 169 North	Algona	IA	Freestanding	X(4)		99,300		0.0	%		7
74	4600 1st Avenue Northeast	Cedar Rapids	IA	Mall			146,000		0.0	%		12
75	1405 South Grand Avenue	Charles City	IA	Freestanding	X(4)		96,600		0.0	%		11
76	2307 Superior Street	Webster City	IA	Shopping Center			40,800		0.0	%		4
77	460 North Milwaukee Street	Boise	ID	Mall			123,600		0.0	%		8
78	4730 West Irving Park Road	Chicago	IL	Freestanding			356,700		11.8	%		6
79	1601 North Harlem Avenue	Chicago	IL	Freestanding			293,700		25.6	%		7
80	5050 South Kedzie Avenue	Chicago	IL	Shopping Center			120,700		73.8	%		9
81	17550 Halsted Street	Homewood	IL	Shopping Center			196,100		100.0	%		19
82	3340 Mall Loop Drive	Joliet	IL	Mall			204,600		19.6	%		17
83	2860 South Highland Avenue	Lombard	IL	Freestanding			139,300		100.0	%		8
84	7503 West Cermak Road	North Riverside	IL	Mall	X		196,500		83.5	%		13
85	2 Orland Square Drive	Orland Park	IL	Mall			140,000		61.1	%		16
86	2500 Wabash Avenue	Springfield	IL	Shopping Center			119,500		84.5	%		14
87	3231 Chicago Road	Steger	IL	Freestanding			87,400		0.0	%		3
88	3101 Northview Drive	Elkhart	IN	Shopping Center			86,600		100.0	%		8
89	4201 Coldwater Road	Ft. Wayne	IN	Mall			84,400		75.5	%		15
90	101 West Lincoln Highway	Merrillville	IN	Shopping Center			170,900		87.1	%		17
91	9701 Metcalf Avenue	Overland Park	KS	Shopping Center			215,000		5.6	%		19
92	3010 Fort Campbell Boulevard	Hopkinsville	KY	Shopping Center			85,100		75.9	%		13
93	5101 Hinkleville Road	Paducah	KY	Mall			97,300		68.7	%		9
94	5715 Johnston Street	Lafayette	LA	Mall			194,900		0.0	%		16
95	900 East Admiral Doyle Drive	New Iberia	LA	Freestanding			114,600		100.0	%		12
96	200 Grossman Drive	Braintree	MA	Shopping Center			89,700		94.8	%		34
97	1325 Broadway	Saugus	MA	Mall	X		210,700		55.9	%		16
98	15700 Emerald Way	Bowie	MD	Shopping Center			130,500		17.2	%		11
99	3207 Solomons Island Road	Edgewater	MD	Shopping Center	X		117,200		100.0	%		14
100	417 Main Street	Madawaska	ME	Shopping Center			49,700		0.0	%		2
101	2100 Southfield Road	Lincoln Park	MI	Shopping Center			301,700		22.8	%		17
102	1560 US 31 South	Manistee	MI	Shopping Center			94,700		0.0	%		12
103	32123 Gratiot Avenue	Roseville	MI	Mall			364,600		42.4	%		21
104	2760 I-75 Business Spur	Sault Sainte Marie	MI	Freestanding			92,700		0.0	%		11
105	22801 Harper Avenue	St. Clair Shores	MI	Freestanding			103,000		100.0	%		11
106	300 West 14 Mile Road	Troy	MI	Mall			379,600		26.1	%		30
107	3100 Washtenaw Road	Ypsilanti	MI	Freestanding			99,400		100.0	%		12
108	14250 Buck Hill Road	Burnsville	MN	Mall			167,300		0.0	%		15

- 26 -


PROPERTY INFORMATION

Wholly Owned Properties (cont’d)

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
109	3001 White Bear Avenue North	Maplewood	MN	Mall			175,000		0.0	%		14
110	425 Rice Street	St. Paul	MN	Freestanding			217,900		0.0	%		17
111	1 Flower Valley Shopping Center	Florissant	MO	Shopping Center			124,000		17.2	%		11
112	2304 Missouri Boulevard	Jefferson City	MO	Freestanding			97,700		100.0	%		10
113	3700 South Campbell Avenue	Springfield	MO	Shopping Center			112,900		100.0	%		8
114	2308 Highway 45 North	Columbus	MS	Shopping Center			166,700		27.2	%		18
115	1 South Tunnel Road	Asheville	NC	Mall			110,600		40.7	%		16
116	1302 Bridford Parkway	Greensboro	NC	Shopping Center			178,500		78.4	%		16
117	4700 2nd Avenue	Kearney	NE	Freestanding			64,900		100.0	%		8
118	1500 South Willow Street	Manchester	NH	Mall			106,600		75.4	%		11
119	310 Daniel Webster Highway	Nashua	NH	Mall	X(4)		167,100		0.0	%		7
120	50 Fox Run Road	Portsmouth	NH	Mall			127,100		0.0	%		13
121	77 Rockingham Park Boulevard	Salem	NH	Mall			207,200		59.4	%		14
122	1500 Highway 35	Middletown	NJ	Freestanding			191,200		100.0	%		23
123	1640 Route 22	Watchung	NJ	Freestanding			116,400		95.7	%		19
124	1205 East Pine Street	Deming	NM	Freestanding			96,600		0.0	%		10
125	10405 South Eastern Avenue	Henderson	NV	Shopping Center			143,500		100.0	%		12
126	4000 Meadows Lane	Las Vegas	NV	Mall	X(4)		130,300		32.6	%		11
127	5400 Meadowood Mall Circle	Reno	NV	Mall			162,700		25.4	%		3
128	1425 Central Avenue	Albany	NY	Mall			277,900		28.9	%		21
129	4155 State Route 31	Clay	NY	Mall			146,500		0.0	%		12
130	4000 Jericho Turnpike	East Northport	NY	Shopping Center			179,700		51.9	%		18
131	195 North Broadway	Hicksville	NY	Freestanding			284,800		35.4	%		30
132	2801 West State Street	Olean	NY	Freestanding			120,700		45.9	%		13
133	317 Greece Ridge Center Drive	Rochester	NY	Mall			128,500		0.0	%		15
134	171 Delaware Avenue	Sidney	NY	Shopping Center	X(4)		94,400		0.0	%		19
135	200 Eastview Mall	Victor	NY	Mall			122,700		83.6	%		14
136	600 Lee Boulevard	Yorktown Heights	NY	Mall			160,000		24.1	%		12
137	4100 Belden Village Avenue Northwest	Canton	OH	Mall			190,600		65.3	%		19
138	2000 Brittain Road	Chapel Hill	OH	Mall			194,700		0.0	%		21
139	2700 Miamisburg Centerville Road	Dayton	OH	Mall			180,200		7.4	%		16
140	1005 East Columbus Street	Kenton	OH	Freestanding			96,100		0.0	%		11
141	7875 Johnnycake Ridge Road	Mentor	OH	Mall			219,100		0.0	%		20
142	6950 West 130th Street	Middleburg Heights	OH	Shopping Center			359,000		10.0	%		15
143	1447 North Main Street	North Canton	OH	Shopping Center	X(4)		87,100		3.3	%		9
144	3408 West Central Avenue	Toledo	OH	Shopping Center			218,700		0.0	%		11

- 27 -


PROPERTY INFORMATION

Wholly Owned Properties (cont’d)

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
145	4400 South Western Avenue	Oklahoma City	OK	Freestanding			223,600		22.5	%		24
146	3132 East 51st Street	Tulsa	OK	Freestanding			87,200		100.0	%		9
147	1180 Southeast 82nd Avenue	Happy Valley	OR	Mall			144,300		31.2	%		12
148	3975 Columbia Avenue	Columbia	PA	Shopping Center	X		86,700		100.0	%		8
149	160 North Gulph Road (5)	King Of Prussia	PA	Mall			210,800		82.8	%		14
150	1745 Quentin Road	Lebanon	PA	Shopping Center	X(4)		117,200		0.0	%		15
151	100 Cross Roads Plaza	Mount Pleasant	PA	Shopping Center			86,300		67.7	%		10
152	400 North Best Avenue	Walnutport	PA	Freestanding	X		121,200		100.0	%		16
153	PR 167 & Las Cumbres	Bayamon	PR	Shopping Center	X		114,600		100.0	%		10
154	400 Calle Betances	Caguas	PR	Mall	X		138,700		100.0	%		8
155	Plaza Carolina Station	Carolina	PR	Mall	X		198,000		100.0	%		11
156	Martinez Nadal Avenue	Guaynabo	PR	Shopping Center	X		223,500		91.9	%		18
157	PR Road 2, Km 149.5	Mayaguez	PR	Shopping Center	X		118,200		100.0	%		13
158	2643 Ponce Bypass	Ponce	PR	Shopping Center	X		126,900		100.0	%		9
159	650 Bald Hill Road	Warwick	RI	Shopping Center			131,500		93.6	%		20
160	3801B Clemson Boulevard	Anderson	SC	Shopping Center			119,300		100.0	%		12
161	7801 Rivers Avenue	Charleston	SC	Mall			121,300		55.9	%		14
162	2800 North Germantown Parkway	Cordova	TN	Mall			160,900		0.0	%		12
163	4570 Poplar Avenue	Memphis	TN	Freestanding			112,700		87.7	%		11
164	12625 North Interstate Highway 35	Austin	TX	Shopping Center			52,700		100.0	%		25
165	9484 Dyer Street	El Paso	TX	Freestanding			114,200		60.2	%		11
166	300 Baybrook Mall	Friendswood	TX	Mall			166,000		0.0	%		13
167	303 Memorial City	Houston	TX	Mall			214,400		100.0	%		20
168	12605 North Gessner Road	Houston	TX	Freestanding			134,000		100.0	%		11
169	6301 Northwest Loop 410	Ingram	TX	Mall			168,400		0.0	%		12
170	2501 Irving Mall	Irving	TX	Mall			92,000		83.5	%		18
171	201 Central Park Mall	San Antonio	TX	Freestanding			164,200		96.1	%		15
172	4000 North Shepherd	Shepherd	TX	Freestanding	X		201,700		100.0	%		12
173	13131 Preston Road	Valley View	TX	Mall			235,000		24.9	%		23
174	9570 Southwest Freeway	Westwood	TX	Freestanding			213,600		100.0	%		18
175	2010 North Main Street	Layton	UT	Shopping Center			176,800		84.1	%		14
176	7453 South Plaza Center Drive	West Jordan	UT	Shopping Center			171,000		100.0	%		12
177	5901 Duke Street	Alexandria	VA	Mall	X		262,100		100.0	%		18
178	1401 Greenbrier Parkway	Chesapeake	VA	Mall			162,000		50.6	%		15
179	12000 Fair Oaks Mall	Fairfax	VA	Mall			211,000		85.0	%		15
180	4588 Virginia Beach Boulevard	Virginia Beach	VA	Mall			197,300		56.0	%		14

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PROPERTY INFORMATION

Wholly Owned Properties (cont’d)

December 31, 2019

					Holdco	Total					Land
	Property Address	City	State	Property Type (1)	Master Lease (2)	GLA (3)		Leased (3)			Acres
181	141 West Lee Highway	Warrenton	VA	Shopping Center			75,500		82.4	%		9
182	2200 148th Avenue Northeast	Redmond	WA	Shopping Center			230,700		0.0	%		15
183	5200 South 76th Street	Greendale	WI	Mall			187,400		75.5	%		21
184	53 West Towne Mall	Madison	WI	Mall			112,800		98.0	%		18
	Total - Wholly-Owned Properties						28,720,800		43.3	%		2,456

(1)	Company classification. Mall properties are attached to regional malls; Shopping Center properties include properties attached, within or adjacent to neighborhood shopping or power centers, as well as freestanding properties.

(2)	Denotes property subject to the Holdco Master Lease.

(3)	Based on signed leases as of December 31, 2019.

(4)	Denotes property subject to a recapture or termination notice pursuant to the terms of the Holdco Master Lease.

(5)	Property is subject to a ground lease.

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DISCLOSURES

Non-GAAP Measures

The Company makes reference to NOI, Total NOI, EBITDAre, Company EBITDA, FFO and Company FFO which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).

None of NOI, Total NOI, EBITDAre, Company EBITDA, FFO or Company FFO, 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 we deem most comparable have been provided in this Supplemental Information package.

Net Operating Income ("NOI”), Total NOI and Annualized Total NOI

NOI is defined as income from property operations less property operating expenses. 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 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.

Annualized Total NOI is an estimate, as of the end of the reporting period, of the annual Total NOI to be generated by the Company’s portfolio including all signed leases and modifications to the Original Master Lease and Holdco Master Lease with respect to recaptured space. We calculate Annualized Total NOI by adding or subtracting current period adjustments for leases that commenced or expired during the period to Total NOI (as defined) for the period and annualizing, and then adding estimated annual Total NOI attributable to SNO leases and subtracting estimated annual Total NOI attributable to Sears Holdings and Holdco space to be recaptured.

Annualized Total NOI is a forward-looking non-GAAP measure for which the Company does not believe it can provide reconciling information to a corresponding forward-looking GAAP measure without unreasonable effort.

Earnings before Interest Expense, Income Tax, Depreciation, and Amortization for Real Estate ("EBITDAre") and Company EBITDA

EBITDAre is calculated in accordance with the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"), which may not be comparable to measures calculated by other companies who do not use the NAREIT definition of EBITDA. EBITDAre is calculated as net income computed in accordance with GAAP, excluding interest expense, income tax expense, depreciation and amortization, gains (or losses) from property sales and impairment charges on depreciable real estate assets. The Company believes EBITDAre provides useful information to investors regarding our results of operations because it removes the impact of the Company’s capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). Management also believes the use of EBITDAre facilitates comparisons between us and other equity REITs and real property owners that are not REITs.

The Company makes certain adjustments to EBITDAre, which it refers to as Company EBITDA, to account for certain non-cash and non-comparable items, such as termination fee income, unrealized loss on interest rate cap, litigation charges, acquisition-related expenses and certain up-front-hiring costs that it does not believe are representative of ongoing operating results.

Funds From Operations ("FFO") and Company FFO

FFO is calculated in accordance with NAREIT which defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from property sales, real estate related depreciation and amortization, and impairment charges on depreciable real estate assets. The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry.

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DISCLOSURES

The Company makes certain adjustments to FFO, which it refers to as Company FFO, to account for certain non-cash and non-comparable items, such as termination fee income, unrealized loss on interest rate cap, litigation charges, acquisition-related expenses, amortization of deferred financing costs and certain up-front-hiring costs, that it does not believe are representative of ongoing operating results.

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,” “will,” “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: our historical exposure to Sears Holdings and the effects of its previously announced bankruptcy filing; Holdco’s termination and other rights under its master lease with us; competition in the real estate and retail industries; risks relating to our recapture and redevelopment activities; contingencies to the commencement of rent under leases; the terms of our indebtedness; restrictions with which we are required to comply in order to maintain REIT status and other legal requirements to which we are subject; and our relatively limited history as an operating company. For additional discussion of these and other applicable risks, assumptions and uncertainties, see the “Risk Factors” and forward-looking statement disclosure contained in our filings with the Securities and Exchange Commission, including the risk factors relating to Sears Holdings and Holdco. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend 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.

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Seritage Growth Properties

500 Fifth Avenue | New York, NY 10110

212-355-7800 | www.seritage.com

Seritage Growth Properties - FORM 8-K - EX-99.2 - February 27, 2020

Attached files

Seritage Growth Properties Reports