The Company conducts a portion of its property rental activities through investments in unconsolidated entities. The Company’s partners in these unconsolidated entities are unrelated real estate entities or commercial enterprises. The Company and its partners in these unconsolidated entities make initial and/or ongoing capital contributions to these unconsolidated entities. The obligations to make capital contributions are governed by each unconsolidated entity’s respective operating agreement and related governing documents.

As of March 31, 2023, the Company had investments in eight unconsolidated entities as follows:


		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings II LLC ("GGP I JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	2		113,400
GS Portfolio Holdings (2017) LLC ("GGP II JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	3		262,500
MS Portfolio LLC ("Macerich JV")	The Macerich Company	50.0%	5		480,200
SPS Portfolio Holdings II LLC ("Simon JV")	Simon Property Group, Inc.	50.0%	3		275,700
Mark 302 JV LLC ("Mark 302 JV")	An investment fund managed by Invesco Real Estate	50.0%	1		103,000
SI UTC LLC ("UTC JV")	A separate account advised by Invesco Real Estate	50.0%	1		226,200
Tech Ridge JV Holding LLC ("Tech Ridge JV")	An affiliate of RD Management	50.0%	1		—
Landmark Land Holdings, LLC ("Landmark JV")	Landmark Holdings, LLC	31.3%	1		—
			17		1,461,000

The Company has contributed certain properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities. The contribution of property to unconsolidated entities is accounted for as a sale of real estate and the Company recognizes the gain or loss on the sale (the “Gain (Loss)”) based upon the transaction price attributed to the property at the closing of the unconsolidated entities transaction (the “Contribution Value”). The Gain or (Loss) is included in gain on sale of real estate on the condensed consolidated statements of operations.

In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective unconsolidated entity agreements, which may result in an adjustment to the gain or loss recognized. If the Contribution Value is subject to revaluation, the Company initially recognizes the gain or loss at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a quarterly basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the unconsolidated entity partners, as well as an adjustment to the initial gain or loss.

Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the gain or loss for those unconsolidated entities subject to a revaluation. The following table summarizes the properties contributed to the Company’s unconsolidated entities (in millions):

The following tables present combined condensed financial data for the Company’s unconsolidated entities (in thousands):


	March 31, 2023			December 31, 2022
ASSETS
Investment in real estate
Land	$	239,358		$	263,169
Buildings and improvements		383,817			419,920
Accumulated depreciation		(73,577	)		(68,482	)
		549,598			614,607
Construction in progress		204,830			219,870
Net investment in real estate		754,428			834,477
Cash and cash equivalents		45,191			29,072
Investment in unconsolidated entities		54,393			55,247
Tenant and other receivables, net		6,574			5,041
Other assets, net		12,600			14,245
Total assets	$	873,186		$	938,082

LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Accounts payable, accrued expenses and other liabilities		50,608			52,808
Total liabilities		50,608			52,808

Members' Interest
Additional paid in capital		895,455			957,154
Retained earnings (accumulated deficit)		(72,877	)		(71,880	)
Total members' interest		822,578			885,274
Total liabilities and members' interest	$	873,186		$	938,082


	Three Months Ended March 31,
	2023			2022
Total revenue	$	6,304		$	7,840
Property operating expenses		(2,993	)		(3,926	)
Depreciation and amortization		(4,975	)		(7,508	)
Operating loss		(1,664	)		(3,594	)
Other expenses		(276	)		(1,434	)
Gains (losses) and (impairments)		(70,806	)		(61,140	)
Net loss	$	(72,746	)	$	(66,168	)
Equity in loss of unconsolidated entities (1)	$	(36,372	)	$	(33,076	)

(1)

Equity in loss of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

The Company shares in the profits and losses of these unconsolidated entities generally in accordance with the Company’s respective equity interests. In some instances, the Company may recognize profits and losses related to investment in an unconsolidated entity that differ from the Company’s equity interest in the unconsolidated entity. This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated entity recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated entity and the unconsolidated entity’s basis in those assets or other items. In conjunction with the Plan of Sale, the Company recognized a change in plan to reduce the holding periods of all its investments in unconsolidated entities, which triggered the need for a quarterly impairment analysis pursuant to ASC 323, Equity Method and Joint Ventures. The Company utilizes appraisals and third-party prepared fair value estimates as well as negotiated offers to sell the investments for the impairment analysis. No other than temporary impairment was recorded for the three months ended March 31, 2023 and 2022, respectively.

During the three months ended March 31, 2023, the Company exercised the put rights that it has on one of its Unconsolidated Properties. The Company has exercised its put rights on seven Unconsolidated Properties since the beginning of 2022. The Company did not close on the sale of any exercised put rights during the three months ended March 31, 2023. Through December 31, 2022, the Company closed on the sale of three of the previously exercised put rights. The Company’s partners assess impairment on its underlying assets pursuant to ASC 360, Property, Plant and Equipment, and recorded impairment on unconsolidated properties of $70.8 million and $61.1 million for the three months ended March 31, 2023 and 2022, respectively.

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the UTC JV, and Tech Ridge JV. The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its unconsolidated entities. During the three months ended March 31, 2023 and 2022, the Company recorded management and related fees of $0.3 million and $1.8 million, respectively. Refer to Note 2 for the Company’s accounting policies.