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Investments in Unconsolidated Entities
 6 Months Ended
Jun. 30, 2025
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Unconsolidated Entities

Note 4 – Investments in Unconsolidated Entities

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.

During the three months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale. As of June 30, 2025, the Company had investments in five unconsolidated entities as follows:

 

 

 

 

 

 

Seritage %

 

# of

 

Total

 

Unconsolidated Entities

 

Entity Partner(s)

 

Ownership

 

Properties

 

GLA

 

GS Portfolio Holdings (2017) LLC
   ("GGP II JV")

 

Brookfield Properties Retail
   (formerly GGP Inc.)

 

50.0%

 

1

 

 

93,500

 

Mark 302 JV LLC
   ("Mark 302 JV")

 

An investment fund managed by
   Invesco Real Estate

 

50.0%

 

1

 

 

51,500

 

SI UTC LLC
   ("UTC JV")

 

A separate account advised by
   Invesco Real Estate

 

50.0%

 

1

 

 

106,200

 

Tech Ridge JV Holding LLC
   ("Tech Ridge JV")

 

An affiliate of
   RD Management

 

50.0%

 

1

 

 

—

 

Landmark Land Holdings, LLC
   ("Landmark JV")

 

The Howard Hughes Corporation
   and Foulger-Pratt

 

31.3%

 

1

 

 

—

 

 

 

 

 

 

 

 

 

5

 

 

251,200

 

In certain circumstances, when the Company has contributed properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities, the transaction price attributed to the property at the closing (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. As of June 30, 2025, the Company has one remaining instance where the Contribution

Value is subject to a revaluation under certain conditions. The Company did not recognize any gains or loss on revaluation during the six months ended June 30, 2025 and 2024.

Summarized Financial Information for Unconsolidated Entities

The following tables present summarized financial data for UTC JV (in thousands):

 

 

 

June 30, 2025

 

 

December 31, 2024

 

ASSETS

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

Land

 

$

27,992

 

 

$

27,992

 

Buildings and improvements

 

 

149,396

 

 

 

149,628

 

Accumulated depreciation

 

 

(14,669

)

 

 

(11,943

)

 

 

 

162,719

 

 

 

165,677

 

Construction in progress

 

 

3,302

 

 

 

3,013

 

Net investment in real estate

 

 

166,021

 

 

 

168,690

 

Cash and cash equivalents

 

 

2,152

 

 

 

2,839

 

Tenant and other receivables, net

 

 

11,501

 

 

 

11,408

 

Other assets, net

 

 

10,590

 

 

 

11,131

 

Total assets

 

$

190,264

 

 

$

194,068

 

 

 

 

 

 

 

 

LIABILITIES AND MEMBERS' INTERESTS

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities

 

 

4,038

 

 

 

6,335

 

Total liabilities

 

 

4,038

 

 

 

6,335

 

 

 

 

 

 

 

Members' Interest

 

 

 

 

 

 

Total members' interest

 

 

186,226

 

 

 

187,733

 

Total liabilities and members' interest

 

$

190,264

 

 

$

194,068

 

Carrying value of Company's investments in equity investments

 

$

97,760

 

 

$

98,587

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Total revenue

 

$

5,052

 

 

$

4,478

 

 

$

9,834

 

 

$

9,049

 

Property operating expenses

 

 

(641

)

 

 

(1,561

)

 

 

(1,289

)

 

 

(2,346

)

Depreciation and amortization

 

 

(1,692

)

 

 

(1,565

)

 

 

(3,257

)

 

 

(3,040

)

Operating income

 

 

2,719

 

 

 

1,352

 

 

 

5,288

 

 

 

3,663

 

Other expenses

 

 

(134

)

 

 

(202

)

 

 

(293

)

 

 

(345

)

Net income

 

$

2,585

 

 

$

1,150

 

 

$

4,995

 

 

$

3,318

 

Equity in income of unconsolidated entities (1)

 

$

1,328

 

 

$

612

 

 

$

2,606

 

 

$

1,734

 

 

(1)
Equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

Summarized Financial Information for Unconsolidated Entities

The following tables present combined condensed financial data for all of the Company’s Unconsolidated Entities, excluding UTC JV (in thousands):

 

 

 

June 30, 2025

 

 

December 31, 2024

 

ASSETS

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

Land

 

$

82,214

 

 

$

88,153

 

Buildings and improvements

 

 

40,902

 

 

 

74,644

 

Accumulated depreciation

 

 

(9,561

)

 

 

(30,854

)

 

 

 

113,555

 

 

 

131,943

 

Construction in progress

 

 

68,122

 

 

 

64,212

 

Net investment in real estate

 

 

181,677

 

 

 

196,155

 

Cash and cash equivalents

 

 

10,027

 

 

 

18,164

 

Tenant and other receivables, net

 

 

287

 

 

 

35

 

Other assets, net

 

 

17,088

 

 

 

17,921

 

Total assets

 

$

209,079

 

 

$

232,275

 

 

 

 

 

 

 

 

LIABILITIES AND MEMBERS' INTERESTS

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities

 

 

15,481

 

 

 

12,194

 

Total liabilities

 

 

15,481

 

 

 

12,194

 

 

 

 

 

 

 

Members' Interest

 

 

 

 

 

 

Total members' interest

 

 

193,598

 

 

 

220,081

 

Total liabilities and members' interest

 

$

209,079

 

 

$

232,275

 

Carrying value of Company's investments in equity investments

 

$

68,177

 

 

$

91,112

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Total revenue

 

$

695

 

 

$

695

 

 

$

984

 

 

$

894

 

Property operating expenses

 

 

(1,053

)

 

 

(1,573

)

 

 

(1,889

)

 

 

(2,496

)

Depreciation and amortization

 

 

(754

)

 

 

(1,337

)

 

 

(1,696

)

 

 

(2,095

)

Operating loss

 

 

(1,112

)

 

 

(2,215

)

 

 

(2,601

)

 

 

(3,697

)

Other expenses

 

 

22

 

 

 

(125

)

 

 

157

 

 

 

(107

)

Gains (losses) and (impairments)

 

 

-

 

 

 

3

 

 

 

-

 

 

 

3

 

Net loss

 

$

(1,090

)

 

$

(2,337

)

 

$

(2,444

)

 

$

(3,801

)

Equity in loss of unconsolidated entities (1)

 

$

(572

)

 

$

(1,178

)

 

$

(9,778

)

 

$

(1,921

)

 

(1)
Equity in income (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. The Company utilizes appraisals and third-party prepared fair value estimates as well as negotiated offers to sell the investments for the impairment analysis. The Company did not record an other-than-temporary loss for the three months ended June 30, 2025. The Company recorded $8.5 million in other-than-temporary impairment losses in investments in unconsolidated entities for the six months ended June 30, 2025. The Company did not record any other-than-temporary impairment losses for the three and six months ended June 30, 2024.

As of June 30, 2025, the Company has put rights for one asset in one of its joint ventures, however since this property is vacant, the 50% occupancy threshold to exercise this put right has not been met.

The Company’s partners assess impairment on its underlying assets pursuant to ASC 360, Property, Plant and Equipment, and did not record any impairments on unconsolidated properties for the three and six months ended June 30, 2025 and 2024.

Unconsolidated Entity Management and Related Fees

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. Refer to Note 2 for the Company’s accounting policies. The Company recorded $0.1 million and $50.0 thousand from these services for the three months ended June 30, 2025 and 2024, respectively, and $0.2 million and $98.0 thousand from these services for the six months ended June 30, 2025 and 2024, respectively.