10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

Commission file number 001-37420

SERITAGE GROWTH PROPERTIES

(Exact name of registrant as specified in its charter)

Maryland	38-3976287
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

489 Fifth Avenue, 18th Floor, New York, New York	10017
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 355-7800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A common shares of beneficial interest, par value $0.01 per share	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ☐    No  ☒

On June 30, 2016, the last business day of the most recently completed second quarter of the registrant, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $1,526,300,000 based upon the closing price of $49.84 of the common stock as reported on the New York Stock Exchange on such date. 

As of February 24, 2017, the registrant had the following common shares outstanding:

Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	27,942,572
Class B common shares of beneficial interest, par value $0.01 per share	1,451,336
Class C common shares of beneficial interest, par value $0.01 per share	5,750,185

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Seritage Growth Properties’ Proxy Statement for its 2017 Annual Meeting of Shareholders, to be held April 25, 2017, are incorporated by reference into Part III of this Annual Report on Form 10-K.

SERITAGE GROWTH PROPERTIES

ANNUAL REPORT ON FORM 10-K

DECEMBER 31, 2016

TABLE OF CONTENTS

PART I		Page
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	23
Item 2.	Properties	24
Item 3.	Legal Proceedings	34
Item 4.	Mine Safety Disclosures	34
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6.	Selected Financial Data	37
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 8.	Financial Statements and Supplementary Data	53
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	54
Item 9A.	Controls and Procedures	54
Item 9B.	Other Information	54
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	55
Item 11.	Executive Compensation	55
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	55
Item 13.	Certain Relationships and Related Transactions, and Director Independence	55
Item 14.	Principal Accounting Fees and Services	55
PART IV
Item 15.	Exhibits and Financial Statement Schedule	56
	Signatures	59

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Annual Report”) of Seritage Growth Properties contains statements that constitute forward-looking statements within the meaning of the federal securities laws.  Any statements that do not relate to historical or current facts or matters are forward-looking statements.  You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the opposite of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters.  Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions.  You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.  Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them.  The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• Declines in retail, real estate and general economic conditions;

• Our current dependence on Sears Holdings Corporation for a majority of our revenue;

• Sears Holdings Corporation’s termination and other rights under its master lease with us;

• Risks relating to our recapture and redevelopment activities and potential acquisition or disposition of properties;

• Our relatively limited operating history as an independent public company;

• The terms of our indebtedness;

• Tax, environmental, health, safety and land use laws and regulations; and

• Restrictions with which we are required to comply in order to maintain REIT status.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance.  Except as required by law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors of new information, data or methods, future events or other changes.  For a further discussion of these and other factors that could impact our future results, performance or transactions, see “Item 1A. Risk Factors.”

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PART I

ITEM 1. BUSINESS

Seritage Growth Properties (“Seritage”) (NYSE: SRG), a Maryland real estate investment trust formed on June 3, 2015, is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(c) of the Internal Revenue Code (the “Code”).  Seritage’s assets are held by and its operations are primarily conducted through, directly or indirectly, Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”).  Under the partnership agreement of the Operating Partnership, Seritage, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.  Unless otherwise expressly stated or the context otherwise requires, the “Company”, “we,” “us,” and “our” as used herein refer to Seritage, the Operating Partnership and its owned and controlled subsidiaries.

Seritage is principally engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail real estate throughout the United States.  As of December 31, 2016, our portfolio included approximately 42.2 million square feet of gross leasable area (“GLA”), consisting of 235 wholly owned properties totaling over 36.8 million square feet of GLA across 49 states and Puerto Rico, and interests in 31 joint venture properties totaling over 5.4 million square feet of GLA across 17 states.

On June 11, 2015 Sears Holdings Corporation (“Sears Holdings”) effected a rights offering (the “Rights Offering”) to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Wholly Owned Properties”), and its 50% interests in three joint ventures (the “JV Interests”) that collectively own 28 properties, ground lease one property and lease two properties (collectively, the “JV Properties”) (collectively, the “Transaction”).  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 Transaction with Sears Holdings and commenced operations.  The Company’s only operations prior to the completion of the Rights Offering and Transaction were those incidental to the completion of such activities.

As of December 31, 2016, we leased a substantial majority of the space in our portfolio at all but 15 of the Wholly Owned Properties (such 15 properties, the “Third-Party Properties”) to Sears Holdings under a master lease agreement (the “Master Lease”), with the remainder of such space leased to third-party tenants.  The Third-Party Properties, which do not contain a Sears Holdings store or have any space leased to Sears Holdings, are leased solely to third-party tenants.  A substantial majority of the space at the JV Properties is also leased to Sears Holdings by, as applicable, GS Portfolio Holdings LLC (the “GGP JV”), a joint venture between a subsidiary of the Operating Partnership and a subsidiary of GGP Inc. (together with its other subsidiaries, “GGP”), SPS Portfolio Holdings LLC (the “Simon JV”), a joint venture between a subsidiary of the Operating Partnership and a subsidiary of Simon Property Group, Inc. (together with its other subsidiaries, “Simon”), or MS Portfolio LLC (the “Macerich JV” and, together with the GGP JV and the Simon JV, each, a “JV” and collectively, the “JVs”), a joint venture between a subsidiary of the Operating Partnership and a subsidiary of The Macerich Company (together with its subsidiaries, “Macerich”), in each case under a separate master lease with each JV (the “JV Master Leases”).

The Master Lease and the JV Master Leases provide the Company and the JVs with certain recapture rights, including the right to recapture up to 50% of the space occupied by Sears Holdings at substantially all of the properties subject to the Master Leases and JV Master Leases.  The Company and the JVs will generally exercise these rights to facilitate the redevelopment and retenanting of the subject properties.  See “Item 2. Properties” for a description of our current portfolio.

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Business Strategies

Our primary objective is to create value for our shareholders through the re-leasing and redevelopment of the majority of our Wholly Owned Properties and JV Properties.  In doing so, we expect to meaningfully grow net operating income (“NOI”) by re-leasing space to third-party retailers at materially higher rents while also substantially diversifying our tenant base. In order to achieve our objective, we intend to execute the following strategies:

• Convert single-tenant buildings into multi-tenant properties at meaningfully higher rents.  We intend to increase NOI and diversify our portfolio by actively recapturing space at our properties and re-leasing such space to third-party retailers for higher rents than are payable under the Master Lease by Sears Holdings.

We seek to optimize the mix of tenants at, and maximize the value of, our properties by focusing on growing national retailers and taking into account customer demographics and the competitive environment of each property's market area.  We believe that the superior real estate locations, diversity of property types and national footprint that characterize our portfolio, combined with the recapture features of the Master Lease, make us well-positioned to meet the store growth needs of retailers across a variety of sectors and concepts.  As we lease space to such retailers, we aim to create multi-tenant shopping centers that command superior rents and valuations due to their prime locations, synergies with adjoining retailers and proximity to productive malls and shopping centers.

• Maximize value of vast land holdings through retail and mixed-use densification.  Our portfolio includes over 3,000 acres of land, or approximately 13 acres per site for our Wholly Owned Properties, and our most significant geographic concentrations are in higher growth markets in California, Florida, Texas and the Northeast.  We believe these land holdings will provide meaningful opportunities for additional retail and mixed-use development.

In addition to the right to recapture up to approximately 50% of the space occupied by Sears Holdings at substantially all of our Wholly Owned Properties, the Master Lease provides us with the right to recapture (i) 100% of the stores located at 21 identified properties; (ii) all of any automotive care centers which are free-standing or attached as “appendages” to the stores; and (iii) outparcels or outlots, as well as certain portions of parking areas and common areas.

The 21 identified properties for which we have 100% recapture rights include over 3.9 million square feet of entitled commercial space on over 350 acres of land and our portfolio of automotive care centers encompasses approximately 3.5 million square feet of scarce real estate typically located on the most visible and highly-trafficked site at a property.  Given our fee ownership of these properties and control over parking lots and outparcels, we believe that many of these sites, as well as others throughout the portfolio, will provide attractive and value-enhancing development, redevelopment and densification opportunities.

• Leverage existing and future joint venture relationships with leading real estate and financial partners.  We currently own 50% interests in 31 JV Properties with leading regional mall REITs each of which, we believe, is focused on driving value creation at the JV Properties through recapturing and re-leasing space pursuant to the JV Master Leases.

We participate in 50% of all net value created at the JV Properties and expect to benefit from the leasing and redevelopment platforms of our JV partners, as well as stores that are, generally, located at high-productivity malls within their respective portfolios.

We may participate in future joint ventures to leverage our human and capital resources and pursue additional value-creating projects.  We will generally seek partners that provide incremental expertise and/or capital, or, as a result of circumstances, allow us to create more value together than we believe we could create on our own.

• Maintain a flexible capital structure to support value creation activities.  We expect to maintain a capital structure that provides us with the financial flexibility and capacity to fund our redevelopment opportunities.  We believe that the capital structure resulting from the Transaction positioned us with sufficient liquidity and flexibility to commence the execution of our redevelopment business strategy, and that we have access to multiple forms of capital to continue investing in value-creating projects, including internally generated cash from operations.  We may also raise capital through the public or private issuance of equity and debt securities, as well as through asset sales and additional joint ventures.

Significant Tenants

A substantial majority of the Company’s real estate properties are leased to Sears Holdings, and the majority of our rental revenues are derived from the Master Lease.  See “Risk Factors—Risks Related to Our Business and Operations.”

The Master Lease provides Seritage the right to recapture up to approximately 50% of the space occupied by Sears Holdings at each of the Wholly Owned Properties included in the Master Lease (subject to certain exceptions).  In addition, Seritage has the right to

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recapture any automotive care centers which are freestanding or attached as “appendages” to the stores, and all outparcels or outlots, as well as certain portions of parking areas and common areas.  We also have the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings.  While we will be permitted to exercise our recapture rights all at once or in stages as to any particular property, we will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.

The Master Lease also provides for certain rights to Sears Holdings to terminate the Master Lease with respect to Wholly Owned Properties that cease to be profitable for operation by Sears Holdings.  In order to terminate the Master Lease with respect to a certain property, Sears Holdings must make a payment to us of an amount equal to one year of rent (together with taxes and other expenses) with respect to such property.  Such termination right, however, will be limited so that it will not have the effect of reducing the fixed rent under the Master Lease by more than 20% per annum.

A substantial majority of the space at the JV Properties is leased to Sears Holdings under the JV Master Leases which include recapture rights and termination rights with similar terms as the Master Lease.

Sears Holdings is a publicly traded company and is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is required to file periodic reports on Form 10-K and Form 10-Q with the Securities and Exchange Commission (“SEC”); refer to www.sec.gov for Sears Holdings’ publicly available financial information.  We make no representation as to the accuracy or completeness of the information regarding Sears Holdings that is available through the SEC’s website or otherwise made available by Sears Holdings or any third party, and none of such information is incorporated by reference herein.

Competition

We compete for investment opportunities and prospective tenants with other REITs, real estate partnerships and other real estate companies, private individuals, investment companies, private equity and hedge fund investors, sovereign funds, pension funds, insurance companies, lenders and other investors, including retailer operators that may close stores and pursue similar real estate strategies.  In addition, revenues from our properties are dependent on the ability of our tenants and operators to compete with other retail operators.

Some of our competitors are significantly larger and have greater financial resources and lower costs of capital than we have.  Increased competition will make it more challenging to identify and successfully capitalize on investment opportunities that meet our objectives.  Our ability to compete is also impacted by national and local economic trends, availability of investment alternatives, availability and cost of capital, construction and renovation costs, existing laws and regulations, new legislation and population trends.

As a landlord, we compete in the real estate market with numerous developers and owners of properties, including the shopping centers in which our properties are located.  Some of our competitors have greater economies of scale, relationships with national tenants at multiple properties which are owned or operated by such competitors, access to more resources and greater name recognition than we do.  If our competitors offer space at rental rates below the current market rates or below the rentals we currently charge, or on terms and conditions which include locations at multiple properties, we may lose our existing and/or potential tenants and we may be pressured to reduce our rental rates or to offer substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options in order to win new tenants and retain tenants when our leases expire.

Environmental Matters

Our properties are subject to environmental laws regulating, among other things, air emissions, wastewater discharges and the handling and disposal of wastes.  Certain of the properties were built during the time that asbestos-containing building materials were routinely installed in residential and commercial structures.  In addition, a substantial portion of the properties we acquired from Sears Holdings currently include, or previously included, automotive care center facilities and retail fueling facilities, and are or were subject to laws and regulations governing the handling, storage and disposal of hazardous substances contained in some of the products or materials used or sold in the automotive care center facilities (such as motor oil, fluid in hydraulic lifts, antifreeze and solvents and lubricants), the recycling/disposal of batteries and tires, air emissions, wastewater discharges and waste management.  In addition to these products or materials, the equipment in use or previously used at such properties, such as service equipment, car lifts, oil/water separators, and storage tanks, has been subject to increasing environmental regulation relating to, among other things, the storage, handling, use, disposal, and transportation of hazardous materials.  The Master Lease obligates Sears Holdings to comply with applicable environmental laws and to indemnify us if their noncompliance results in losses or claims against us, and to remove all automotive care center equipment and facilities upon the expiration or sooner termination of the Master Lease. We expect other leases to include similar provisions for other operators of their respective spaces with respect to environmental matters first arising during their occupancy.  An operator’s failure to comply could result in fines and penalties or the requirement to undertake corrective actions which may result in significant costs to the operator and thus adversely affect their ability to meet their obligations to us.

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Pursuant to U.S. federal, state and local environmental laws and regulations, a current or previous owner or operator of real property may be required to investigate, remove and/or remediate a release of hazardous substances or other regulated materials at, or emanating from, such property.  Further, under certain circumstances, such owners or operators of real property may be held liable for property damage, personal injury and/or natural resource damage resulting from or arising in connection with such releases.  Certain of these laws have been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility.  We also may be liable under certain of these laws for damage that occurred prior to our ownership of a property or at a site where we sent wastes for disposal.  The failure to properly remediate a property may also adversely affect our ability to lease, sell or rent the property or to borrow funds using the property as collateral.

Under the Master Lease, Sears Holdings is required to indemnify us from certain environmental liabilities at the Wholly Owned Properties before or during the period in which each Wholly Owned Property is leased to Sears Holdings, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities (and each JV Master Lease includes a similar requirement of Sears Holdings).  In addition, pursuant to the terms our debt financing agreements, an escrow account for environment remediation was funded at the closing of the Transaction in the amount of approximately $12.0 million.  As of December 31, 2016, the balance of the escrow account was approximately $11.8 million.

In connection with the ownership of our current or past properties and any properties that we may acquire in the future, we could be legally responsible for environmental liabilities or costs relating to a release of hazardous substances or other regulated materials at or emanating from such property.  We are not aware of any environmental issues that are expected to have a material impact on the operations of our properties.

Insurance

We have comprehensive liability, property and rental loss insurance with respect to our portfolio of properties. We believe that such insurance provides adequate coverage.

REIT Qualification

We elected to be treated as a REIT commencing with the taxable year ended December 31, 2015 and expect to continue to operate so as to qualify as a REIT.  So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on net taxable income that we distribute annually to our shareholders.  In order to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, including, but not limited to, the real estate qualification of sources of our income, the composition and values of our assets, the amounts we distribute to our shareholders and the diversity of ownership of our stock.  In order to comply with REIT requirements, we may need to forego otherwise attractive opportunities and limit our expansion opportunities and the manner in which we conduct our operations.  See “Risk Factors—Risks Related to Status as a REIT.”

Financial Information about Industry Segments

We currently operate in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management and leasing of retail properties.  We review operating and financial results for each property on an individual basis and do not distinguish or group our properties based on geography, size, or type.  We, therefore, aggregate all of our properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operational process.

Employees

As of February 24, 2017, we had 38 full-time employees.  Our employees are not covered by a collective bargaining agreement, and we consider our employee relations to be satisfactory.

Available Information

Our principal offices are located at 489 Fifth Avenue, New York, New York 10017 and our telephone number is (212) 355-7800. Our website address is www.seritage.com. Our reports electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can be accessed through this site, free of charge, as soon as reasonably practicable after we electronically file or furnish such reports. These filings are also available on the SEC’s website at www.sec.gov. Our website also contains copies of our corporate governance guidelines and code of business conduct and ethics as well as the charters of our audit, compensation and nominating and corporate governance committees. The information on our website is not part of this or any other report we file with or furnish to the SEC.

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ITEM 1A. RISK FACTORS

Certain factors may have a material adverse effect on our business, financial condition and results of operations. You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Annual Report, including our consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face.  Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.  If any of the following risks actually occurs, our business, financial condition, results of operations, and future prospects could be materially and adversely affected.  In that event, the trading price of our common shares of beneficial interest could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Operations

We will be substantially dependent on Sears Holdings, as a tenant, until we further diversify the tenancy of our portfolio, and an event that has a material adverse effect on Sears Holdings’ business, financial condition or results of operations could have a material adverse effect on our business, financial condition or results of operations.

Sears Holdings is the lessee of a substantial majority of our properties and accounts for a substantial majority of our revenues.  Under the Master Lease, Sears Holdings is required to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with these leased properties and to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with its business, subject to proportionate sharing of certain of these expenses with occupants of the remainder of the space not leased to Sears Holdings.  Sears Holdings may not in the future have sufficient assets, income and access to financing to enable it to satisfy its payment obligations under the Master Lease.  In addition, Sears Holdings has disclosed that its domestic pension and postretirement benefit plan obligations are currently underfunded.  Sears Holdings may have to make significant cash payments to some or all of its pension and postretirement benefit plans, which would reduce the cash available for its businesses, potentially including its rent obligations under the Master Lease.  The inability or unwillingness of Sears Holdings to meet its rent obligations and other obligations under the Master Lease could materially adversely affect our business, financial condition or results of operations, including our ability to pay the interest, principal and other costs and expenses under our financings, or to pay cash dividends to Seritage shareholders.  For these reasons, if Sears Holdings were to experience a material adverse effect on its business, financial condition or results of operations, our business, financial condition or results of operations could also be materially adversely affected.

Our dependence on rental payments from Sears Holdings as our main source of revenues may limit our ability to enforce our rights under the Master Lease.  In addition, we may be limited in our ability to enforce our rights under the Master Lease because it is a unitary lease and does not provide for termination with respect to individual properties by reason of the default of the tenant.  Failure by Sears Holdings to comply with the terms of the Master Lease or to comply with the regulations to which the leased properties are subject could require us to find another master lessee for all such leased property and there could be a decrease or cessation of rental payments by Sears Holdings.  In such event, we may be unable to locate a suitable master lessee or a lessee for individual properties at similar rental rates and other obligations and in a timely manner or at all, which would have the effect of reducing our rental revenues.  In addition, each JV is subject to similar limitations on enforcements of remedies and risks under its respective JV Master Lease, which could reduce the value of our investment in, or distributions to us by, one or more of the JVs.

The bankruptcy or insolvency of any of our tenants, particularly Sears Holdings, could result in the termination of such tenant’s lease and material losses to us.

A tenant bankruptcy or insolvency could diminish the rental revenue we receive from that property or could force us to “take back” tenant space as a result of a default or a rejection of the lease by a tenant in bankruptcy.  In particular, a bankruptcy or insolvency of Sears Holdings, which is our primary tenant, could result in a loss of a substantial portion of our rental revenue and materially and adversely affect us.  Any claims against bankrupt tenants for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under their leases or no payments at all.  In addition, any claim we have for unpaid past rent will likely not be paid in full.  If a tenant becomes bankrupt or insolvent, federal law may prohibit us from evicting such tenant based solely upon such bankruptcy or insolvency.  We may also be unable to re-lease a terminated or rejected space or re-lease it on comparable or more favorable terms. If we do re-lease rejected space, we may incur costs for brokerage, marketing and tenant expenses.

Sears Holdings leases a substantial majority of our properties. Bankruptcy laws afford certain protections to tenants that may also affect the Master Lease or JV Master Leases.  Subject to certain restrictions, a tenant under a master lease generally is required to assume or reject the master lease as a whole, rather than making the decision on a property-by-property basis.  This prevents the tenant from assuming only the better performing properties and terminating the master lease with respect to the poorer performing properties.  While we believe that our Master Lease and JV Master Lease are unitary leases that would need to be assumed or rejected as a whole in any bankruptcy proceeding, whether or not a bankruptcy court would require that a master lease be assumed or rejected as a whole depends upon a “facts and circumstances” analysis considering a number of factors, including the parties’ intent, the nature and

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purpose of the relevant documents, whether there was separate and distinct consideration for each property included in the master lease, the provisions contained in the relevant documents and applicable state law.  If a bankruptcy court in a Sears Holdings bankruptcy were to allow the Master Lease or a JV Master Lease to be rejected in part, certain underperforming leases related to properties we or the applicable JV as landlord under a JV Master Lease, respectively, own could be rejected by the tenant in bankruptcy while tenant-favorable leases are allowed to remain in place, thereby adversely affecting payments to us derived from the properties.  For this and other reasons, a Sears Holdings bankruptcy could materially and adversely affect us.

In addition, although we believe that the Master Lease is a “true lease” for purposes of bankruptcy law, it is possible that a bankruptcy court could re-characterize the lease transaction set forth in the Master Lease as a secured lending transaction.  If the Master Lease were judicially recharacterized as a secured lending transaction, we would not be treated as the owner of the property and could lose certain rights as the owner in the bankruptcy proceeding.  In addition, each JV is subject to this risk with respect to its JV Master Lease, which could reduce the value of our investment in, or distribution to us by, one or more of the JVs.

Sears Holdings’ right to terminate the Master Lease with respect to a portion of our properties could negatively impact our business, results of operations and financial condition.

Under the terms of the Master Lease, in each year after the first lease year, Sears Holdings will have the right to terminate the Master Lease with respect to properties representing up to 20% of the aggregate annual rent payment under the Master Lease with respect to all properties, if, with respect to a property leased under the Master Lease, the EBITDAR for the 12-month period ending as of the most recent fiscal quarter end produced by the Sears Holdings store operated there is less than the rent allocated to such property payable during that year. While Sears Holdings must pay a termination fee equal to one year of rent (together with taxes and other expenses) with respect to such property, the value of some of the properties could be materially adversely affected if we are not able to re-lease such properties at the same rates which Sears Holdings was paying in a timely manner or at all, and this may negatively impact our business, results of operations and financial condition.

In addition, Sears Holdings will have the right to terminate a portion of the JV Master Lease with the GGP JV with respect to up to four JV Properties in any lease year, the JV Master Lease with the Simon JV with respect to up to three JV Properties in any lease year and the JV Master Lease with the Macerich JV with respect to up to three JV Properties in any lease year, in each case if, with respect to a JV Property owned by the applicable JV, the same EBITDAR condition is satisfied, which could reduce the value of our investment in, or distributions to us by, one or more of the JVs.

During the year ended December 31, 2016, Sears Holdings terminated the Master Lease with respect to 17 stores totaling 1.7 million square feet of gross leasable area and, in January 2017, provided notice that it intended to exercise its right to terminate the Master Lease with respect to an additional 19 stores totaling 1.9 million square feet of gross leasable area. The aggregate base rent at these 36 stores was approximately $11.9 million as of December 31, 2016.

We may not be able to renew leases or re-lease space at our properties, or lease space in newly recaptured properties, and property vacancies could result in significant capital expenditures.

When leases for our properties expire, the premises may not be re-released in a timely manner or at all, or the terms of re-releasing, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms.  The loss of a tenant through lease expiration or other circumstances may require us to spend (in addition to other re-letting expenses) significant amounts of capital to renovate the property before it is suitable for a new tenant and cause us to incur significant costs in the form of ongoing expenses for property maintenance, taxes, insurance and other expenses.  Many of the leases we will enter into or acquire may be for properties that are especially suited to the particular business of the tenants operating on those properties.  Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions to re-lease the property. In addition, if we are required or otherwise determine to sell the property, we may have difficulty selling it to a party other than the tenant due to the special purpose for which the property may have been designed or modified.  This potential illiquidity may limit our ability to quickly modify our portfolio in response to changes in economic or other conditions, including tenant demand. Also, we may not be able to lease new properties to an appropriate mix of tenants or for rents that are consistent with our expectations. To the extent that our leasing plans are not achieved or we incur significant capital expenditures as a result of property vacancies, our business, results of operations and financial condition could be materially adversely affected.

Real estate investments are relatively illiquid.

Our properties represent a substantial portion of our total consolidated assets, and these investments are relatively illiquid. Significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes, insurance, and repair and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a

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property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of our mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt or other costs and expenses. As a result, our ability to sell one or more of our properties or investments in real estate in response to any changes in economic or other conditions may be limited. If we want to sell a property, we may not be able to dispose of it in the desired time period or at a sale price that would exceed the cost of our investment in that property.

The number of potential buyers for certain properties that we may seek to sell may be limited by the presence of such properties in retail or mall complexes owned or managed by other property owners. In addition, our ability to sell or dispose of certain properties may be hindered by the fact that such properties are subject to the Master Lease or a JV Master Lease, as the terms of the Master Lease and the JV Master Leases or the fact that Sears Holdings is the lessee may make such properties less attractive to a potential buyer than alternative properties that may be for sale. Furthermore, if we decide to sell any of our properties, we may provide financing to purchasers and bear the risk that the purchasers may default, which may delay or prevent our use of the proceeds of the sales for other purposes or the distribution of such proceeds to our shareholders.

Both we and our tenants face a wide range of competition that could affect our ability to operate profitably.

The presence of competitive alternatives, both to our properties and the businesses that lease our properties, affects our ability to lease space and the level of rents we can obtain. Our properties operate in locations that compete with other retail properties and also compete with other forms of retailing, such as catalogs and e-commerce websites. Competition may also come from strip centers, outlet centers, lifestyle centers and malls, and both existing and future development projects. New construction, renovations and expansions at competing sites could also negatively affect our properties. In addition, we compete with other retail property companies for tenants and qualified management. These other retail property companies may have relationships with tenants that we do not have since we have a limited operating history, including with respect to national chains that may be desirable tenants. If we are unable to successfully compete, our business, results of operations and financial condition could be materially adversely affected.  See also “Item 1. Business – Competition.”

In addition, the retail business is highly competitive and if our tenants fail to differentiate their shopping experiences, create an attractive value proposition or execute their business strategies, they may terminate, default on, or fail to renew their leases with us, and our results of operations and financial condition could be materially adversely affected. Furthermore, we believe that the increase in digital and mobile technology usage has increased the speed of the transition from shopping at physical locations to web-based purchases and that our tenants, including Sears Holdings, may be negatively affected by these changing consumer spending habits. If our tenants are unsuccessful in adapting their businesses, and, as a result terminate, default on, or fail to renew their leases with us, our results of operations and financial condition could be materially adversely affected.

Our pursuit of investments in and redevelopment of properties, and investments in and acquisitions or development of additional properties, may be unsuccessful or fail to meet our expectations.

We intend to grow our business through investments in, and acquisitions or development of, properties, including through the recapture and redevelopment of space at many of our properties. However, our industry is highly competitive, and we face competition from other REITs, investment companies, private equity and hedge fund investors, sovereign funds, lenders, and other investors, some of whom are significantly larger and have greater resources and lower costs of capital. This competition will make it more challenging to identify and successfully capitalize on acquisition and development opportunities that meet our investment objectives. If we are unable to finance acquisitions or other development opportunities on commercially favorable terms, our business, financial condition or results of operations could be materially adversely affected. Additionally, the fact that we must distribute 90% of our net taxable income in order to maintain our qualification as a REIT may limit our ability to rely upon rental payments from leased properties or subsequently acquired properties in order to finance acquisitions. As a result, if debt or equity financing is not available on acceptable terms, further acquisitions or other development opportunities might be limited or curtailed.

Investments in, and acquisitions of, properties we might seek to acquire entail risks associated with real estate investments generally, including (but not limited to) the following risks and as noted elsewhere in this section:

• we may be unable to acquire a desired property because of competition;

• even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price;

• even if we enter into agreements for the acquisition of properties, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction;

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• we may incur significant costs and divert management attention in connection with evaluation and negotiation of potential acquisitions, including ones that we are subsequently unable to complete;

• we may acquire properties that are not initially accretive to our results upon acquisition, and we may not successfully manage and lease those properties to meet our expectations;

• we may be unable to finance the acquisition on favorable terms in the time period we desire, or at all;

• even if we are able to finance the acquisition, our cash flow may be insufficient to meet our required principal and interest payments;

• we may spend more than budgeted to make necessary improvements or renovations to acquired properties;

• we may be unable to quickly and efficiently integrate new acquisitions, particularly the acquisition of portfolios of properties, into our existing operations;

• market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and

• we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities.

In addition, we intend to redevelop a significant portion of the properties purchased from Sears Holdings in order to make space available for lease to additional retail tenants and potentially other third-party lessees for other uses. The redevelopment of these properties involves the risks associated with real estate development activities generally. Our redevelopment strategies also involve additional risks, including that Sears Holdings may terminate or fail to renew leases with us for the applicable portion of the redeveloped space as a result of our redevelopment activities. If we are unable to successfully redevelop properties or to lease the redeveloped properties to third parties on acceptable terms, our business, results of operations and financial condition could be materially adversely affected.

Current and future redevelopment may not yield expected returns.

We expect to undertake redevelopment, expansion and reinvestment projects involving our properties as part of our long-term strategy. Likewise, each JV expects to undertake redevelopment, expansion and reinvestment projects involving its JV Properties, with respect to which we may be required to make additional capital contributions to the applicable JV under certain circumstances. These projects are subject to a number of risks, including (but not limited to):

• abandonment of redevelopment activities after expending resources to determine feasibility;

• loss of rental income, as well as payments of maintenance, repair, real estate taxes and other charges, from Sears Holdings related to space that is recaptured pursuant to the Master Lease (or the JV Master Leases) and which may not be re-leased to third parties;

• restrictions or obligations imposed pursuant to other agreements;

• construction and/or lease-up costs (including tenant improvements or allowances) and delays and cost overruns, including construction costs that exceed original estimates;

• failure to achieve expected occupancy and/or rent levels within the projected time frame or at all;

• inability to operate successfully in new markets where new properties are located;

• inability to successfully integrate new or redeveloped properties into existing operations;

• difficulty obtaining financing on acceptable terms or paying operating expenses and debt service costs associated with redevelopment properties prior to sufficient occupancy and commencement of rental obligations under new leases;

• changes in zoning, building and land use laws, and conditions, restrictions or limitations of, and delays or failures to obtain, necessary zoning, building, occupancy, land use and other governmental permits;

• changes in local real estate market conditions, including an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants;

• negative perceptions by retailers or shoppers of the safety, convenience and attractiveness of the property;

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• exposure to fluctuations in the general economy due to the significant time lag between commencement and completion of redevelopment projects; and

• vacancies or ability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options.

If any of these events occur at any time during the process with respect to any project, overall project costs may significantly exceed initial cost estimates, which could result in reduced returns or losses from such investments. In addition, we may not have sufficient liquidity to fund such projects, and delays in the completion of a redevelopment project may provide various tenants the right to withdraw from a property.

Rising expenses could reduce cash flow and funds available for future development.

If any property is not fully occupied or becomes vacant in whole or in part, or if rents are being paid in an amount that is insufficient to cover operating costs and expenses, we could be required to expend funds with respect to that property for operating expenses. Our properties are subject to increases in tax rates and tax assessments, utility costs, insurance costs, repairs, maintenance and administrative expenses, and other operating expenses. We may also incur significant expenditures as a result of deferred maintenance for the properties we have already acquired (subject to reserved funds to cover certain of these costs) and other properties we may acquire in the future. While properties under the Master Lease and the JV Master Leases are generally leased on a triple-net basis (subject to proportionate sharing of operating expenses with respect to space not leased by Sears Holdings), renewals of leases or future leases may not be negotiated on that basis, in which event we may have to pay those costs. If we are unable to lease properties on a triple-net-lease basis or on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions and other operating expenses, we could be required to pay those costs which could adversely affect funds available for future development or cash available for distributions.

Real estate related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced.

Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisitions of properties. Generally, from time to time, our property taxes increase as property values or assessment rates change or for other reasons deemed relevant by the assessors. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property. Although the Master Lease and some third-party tenant leases may permit us to pass through such tax increases to the tenants for payment, there is no assurance that renewal leases or future leases will be negotiated on the same basis. Increases not passed through to tenants will reduce our income and the cash available for distributions to our shareholders.

Changes in building and/or zoning laws may require us to update a property in the event of recapture or prevent us from fully restoring a property in the event of a substantial casualty loss and/or require us to meet additional or more stringent construction requirements.

Due to changes, among other things, in applicable building and zoning laws, ordinances and codes that may affect certain of our properties that have come into effect after the initial construction of the properties, certain properties may not comply fully with current building and/or zoning laws, including electrical, fire, health and safety codes and regulations, use, lot coverage, parking and setback requirements, but may qualify as permitted non-conforming uses. Such changes in building and zoning laws may require updating various existing physical conditions of buildings in connection with our recapture, renovation, and/or redevelopment of properties. In addition, such changes in building and zoning laws may limit our or our tenants’ ability to restore the premises of a property to its previous condition in the event of a substantial casualty loss with respect to the property or the ability to refurbish, expand or renovate such property to remain compliant, or increase the cost of construction in order to comply with changes in building or zoning codes and regulations. If we are unable to restore a property to its prior use after a substantial casualty loss or are required to comply with more stringent building or zoning codes and regulations, we may be unable to re-lease the space at a comparable effective rent or sell the property at an acceptable price, which may materially and adversely affect us.

Our real estate assets may be subject to impairment charges.

On a periodic basis, we must assess whether there are any indicators that the value of our real estate assets and other investments may be impaired.  If an impairment indicator is identified, a property’s value is considered to be impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unlevered), taking into account the anticipated and probability weighted holdings periods, are less than the carrying value of the property. In our estimate of cash flows model, we consider factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. If we are evaluating the potential sale of an asset or development alternatives, the undiscounted future cash flows considers the most likely course of action at

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the balance sheet date based on current plans, intended holding periods and available market information. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. These assessments may have a direct impact on our earnings because recording an impairment charge results in an immediate negative adjustment to earnings. We may take impairment charges in the future related to the impairment of our assets, and any future impairment could have a material adverse effect on our results of operations in the period in which the impairment charge is taken.

Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially and adversely affected.

We currently have one property in our wholly-owned portfolio that is on land subject to a ground lease. Accordingly, we only own a long-term leasehold in the land underlying this property, and we own the improvements thereon only during the term of the ground lease. In the future, our portfolio may include additional properties subject to ground leases or similar interests. If we are found to be in breach of a ground lease, we could lose the right to use the property and could also be liable to the ground lessor for damages. In addition, unless we can purchase a fee interest in the underlying land or extend the terms of these leases before their expiration, which we may be unable to do, we will lose our right to operate these properties and our interest in the improvements upon expiration of the leases. Our ability to exercise options to extend the term of our ground lease is subject to the condition that we are not in default under the terms of the ground lease at the time that we exercise such options, and we may not be able to exercise our options at such time. In addition, three JV Properties are currently ground leased or leased and, therefore, subject to similar risks. Furthermore, we may not be able to renew our ground lease or future ground leases upon their expiration (after the exercise of all renewal options). If we were to lose the right to use a property due to a breach or non-renewal or final expiration of the ground lease, we would be unable to derive income from such property, which could materially and adversely affect our business, financial conditions or results of operations.

Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party.

Many of the properties in our portfolio are, and properties that we acquire in the future may be, subject to use restrictions and/or operational requirements imposed pursuant to ground leases, restrictive covenants or conditions, reciprocal easement agreements or operating agreements (collectively, “Property Restrictions”) that could adversely affect our ability to redevelop the properties or lease space to third parties. Such Property Restrictions could include, for example, limitations on alterations, changes, expansions, or reconfiguration of properties; limitations on use of properties, including for retail uses only; limitations affecting parking requirements; restrictions on exterior or interior signage or facades; or access to an adjoining mall, among other things. In certain cases, consent of the other party or parties to such agreements may be required when altering, reconfiguring, expanding, redeveloping or re-leasing properties. Failure to secure such consents when necessary may harm our ability to execute leasing, redevelopment or expansion strategies, which could adversely affect our business, financial condition or results of operations. In certain cases, a third party may have a purchase option or right of first refusal or right of first offer that is activated by a sale or transfer of the property, or a change in use or operations, including a closing of the Sears Holdings operation or cessation of business operations, on the encumbered property.

Economic conditions may affect the cost of borrowing, which could materially adversely affect our business.

Our business is affected by a number of factors that are largely beyond our control but may nevertheless have a significant negative impact on us. These factors include, but are not limited to:

• interest rates and credit spreads;

• the availability of credit, including the price, terms and conditions under which it can be obtained;

• a decrease in consumer spending or sentiment, including as a result of increases in savings rates and tax increases, and any effect that this may have on retail activity;

• the actual and perceived state of the real estate and retail markets, market for dividend-paying stocks and public capital markets in general; and

• unemployment rates, both nationwide and within the primary markets in which we operate.

In addition, economic conditions such as inflation or deflation could materially adversely affect our business, financial condition and results of operations. Deflation may have an impact on our ability to repay our debt. Deflation may delay consumption and thus weaken tenant sales, which may reduce our tenants’ ability to pay rents. Deflationary pressure on retailers may diminish their ability to rent our space and decrease our ability to re-lease the space on favorable terms to us. In an inflationary economic environment, increased inflation may have a pronounced negative impact on the interest expense we pay in connection with our indebtedness and

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our general and administrative expenses, as these costs could increase at a rate higher than rents we collect. Also, inflation may adversely affect tenant leases with stated rent increases, which could be lower than the increase in inflation at any given time. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our own results of operations. Restricted lending practices may impact our ability to obtain financing for our properties and may also negatively impact our tenants’ ability to obtain credit. Decreases in consumer demand can have a direct impact on our tenants and the rents we receive.

Compliance with the Americans with Disabilities Act may require us to make expenditures that adversely affect our cash flows.

The Americans with Disabilities Act (the “ADA”) has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the United States government or an award of damages to private litigants, or both. While the tenants to whom our properties are leased are generally obligated by law or lease to comply with the ADA provisions applicable to the property being leased to them, if required changes involve other property not being leased to such tenants, if the required changes include greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. Moreover, certain third-party leases may require the landlord to comply with the ADA with respect to the building as a whole and/or the tenant’s space. As a result of any of the foregoing circumstances, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our results of operations and financial condition.

Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations.

As the owner or operator of various real properties and facilities, we must comply with various federal, state and local environmental, health, safety and land use laws and regulations. We and our properties are subject to such laws and regulations relating to the use, storage, disposal, emission and release of hazardous and non-hazardous substances and employee health and safety, as well as zoning restrictions. Historically, Sears Holdings has not incurred significant expenditures to comply with these laws with respect to the substantial majority of the space at the properties. However, a substantial portion of our properties that have resulted in certain remediation activities currently include, or previously included, automotive care center facilities and retail fueling facilities, and/or above-ground or underground storage tanks, and are or were subject to laws and regulations governing the handling, storage and disposal of hazardous substances contained in some of the products or materials used or sold in the automotive care center facilities (such as gasoline, motor oil, fluid in hydraulic lifts, antifreeze, solvents and lubricants), the recycling/disposal of batteries and tires, air emissions, wastewater discharges and waste management. In addition to these products, the equipment in use or previously used at such properties, such as service equipment, car lifts, oil/water separators, and storage tanks, has been subject to increasing environmental regulation relating to, among other things, the storage, handling, use, disposal and transportation of hazardous materials. There are also federal, state and local laws, regulations and ordinances that govern the use, removal and/or replacement of underground storage tanks in the event of a release on, or an upgrade or redevelopment of, certain properties. Such laws, as well as common-law standards, may impose liability for any releases of hazardous substances associated with the underground storage tanks and may provide for third parties to seek recovery from owners or operators of such properties for damages associated with such releases. If hazardous substances are released from any underground storage tanks on any of our properties, we may be materially and adversely affected. In a few states, transfers of some types of sites are conditioned upon clean-up of contamination prior to transfer. If any of our properties are subject to such contamination, we may be subject to substantial clean-up costs before we are able to sell or otherwise transfer the property.

Under the Master Lease, Sears Holdings is required to indemnify us from certain environmental liabilities at the properties purchased from Sears Holdings before or during the period in which each property is leased to Sears Holdings, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities (and each JV Master Lease includes a similar requirement of Sears Holdings). Although existing and future third-party leases are expected to require tenants generally to indemnify us for such tenants’ non-compliance with environmental laws as a result of their occupancy, such tenants typically will not be required to indemnify us for environmental non-compliance arising prior to their occupancy. In such cases, we may incur costs and expenses under such leases or as a matter of law. The amount of any environmental liabilities could exceed the amounts for which Sears Holdings or other third parties are required to indemnify us (or the applicable JV) or their financial ability to do so. In addition, under the terms of the agreements governing our indebtedness, we have deposited funds in a reserve account that will be used to fund costs incurred in correcting certain environmental and other conditions. The amount of such funds may not be sufficient to correct the environmental and other conditions to which they are expected to be applied.

In addition, additional laws which may be passed in the future, or a finding of a violation of or liability under existing laws, could require us and/or one or more of the JVs to make significant expenditures and otherwise limit or restrict some of our or its or their operations, which could have an adverse effect on our business, financial condition and results of operations.

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Environmental compliance costs and liabilities associated with real estate properties owned by us may materially and adversely affect us.

Our properties may be subject to known and unknown environmental liabilities under various federal, state and local laws and regulations relating to human health and the environment. Certain of these laws and regulations may impose joint and several liability on certain statutory classes of persons, including owners or operators, for the costs of investigation or remediation of contaminated properties. These laws and regulations apply to past and present business operations on the properties, and the use, storage, handling and recycling or disposal of hazardous substances or wastes. We may face liability regardless of our knowledge of the contamination, the timing of the contamination, the cause of the contamination or the party responsible for the contamination of the property.

We may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any of our properties from which there has been a release or threatened release of a regulated material as well as other affected properties, regardless of whether we knew of or caused the release.

As the owner or operator of real property, we may also incur liability based on various building conditions. For example, buildings and other structures on properties that we currently own or operate or those we acquire or operate in the future contain, may contain, or may have contained, asbestos-containing material (or “ACM”). Environmental, health and safety laws require that ACM be properly managed and maintained and may impose fines or penalties on owners, operators or employers for non-compliance with those requirements. These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during maintenance, renovation or demolition of a building, potentially resulting in substantial costs. In addition, we may be subject to liability for personal injury or property damage sustained as a result of exposure to ACM or releases of ACM into the environment. In addition, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants or increase ventilation and/or expose us to liability from our tenants, employees of our tenants, or others if property damage or personal injury occurs.

In addition to these costs, which are typically not limited by law or regulation and could exceed a property’s value, we could be liable for certain other costs, including governmental fines, and injuries to persons, property or natural resources. Further, some environmental laws create a lien on the contaminated site in favor of the government for damages and the costs the government incurs in connection with such contamination. Any such costs or liens could have a material adverse effect on our business or financial condition.

Although we intend to require our tenants to undertake to indemnify us for certain environmental liabilities, including environmental liabilities they cause, the amount of such liabilities could exceed the financial ability of the tenant to indemnify us. The presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease the real estate or to borrow using the real estate as collateral.

Each JV is subject to similar risks relating to environmental compliance costs and liabilities associated with its JV Properties, which may reduce the value of our investment in, or distributions to us by, one or more JVs, or require that we make additional capital contributions to one or more JVs.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.

Terrorist attacks or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand, could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by future attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.

We may have future capital needs and may not be able to obtain additional financing on acceptable terms.

As of December 31, 2016, we had aggregate outstanding indebtedness of approximately $1.2 billion. We may incur additional indebtedness in the future to refinance our existing indebtedness, to finance newly acquired properties or capital contributions to joint ventures, or to fund retenanting and redevelopment projects. Our existing debt and any significant additional indebtedness could

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require a substantial portion of our cash flow to make interest and principal payments. Demands on our cash resources from debt service will reduce funds available to us to pay dividends, make capital expenditures and acquisitions or carry out other aspects of our business strategy. Our indebtedness may also limit our ability to adjust rapidly to changing market conditions, make us more vulnerable to general adverse economic and industry conditions and create competitive disadvantages for us compared to other companies with relatively lower debt levels. Increased future debt service obligations may limit our operational flexibility, including our ability to acquire properties, finance or refinance our properties, contribute properties to joint ventures or sell properties as needed.

Moreover, our ability to obtain additional financing and satisfy our financial obligations under indebtedness outstanding from time to time will depend upon our future operating performance, which is subject to then-prevailing general economic, real estate and credit market conditions, including interest rate levels and the availability of credit generally, and financial, business and other factors, many of which are beyond our control. A prolonged worsening of credit market conditions would have a material adverse effect on our ability to obtain financing on favorable terms, if at all.

We may be unable to obtain additional financing or financing on favorable terms or our operating cash flow may be insufficient to satisfy our financial obligations under any indebtedness outstanding from time to time. Among other things, the absence of an investment grade credit rating or any credit rating downgrade could increase our financing costs and could limit our access to financing sources. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to enhance our properties or develop new properties, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

If additional funds are raised through the issuance of equity securities, our shareholders may experience significant dilution. Additionally, sales of substantial amounts of Class A common shares in the public market, or the perception that such sales could occur, could adversely affect the market price of Class A common shares, may make it more difficult for our shareholders to sell their common shares at a time and price that they deem appropriate, and could impair our future ability to raise capital through an offering of our equity securities.

We expect to incur mortgage indebtedness and other borrowings, which may increase our business risks.

We may incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire additional real properties. The Company may also borrow if it needs funds or deems it necessary or advisable to assure that it maintains its qualification as a REIT for federal income tax purposes. If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on a property, then the amount available for distributions to shareholders may be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. In such event, the Company may be unable to pay the amount of distributions required in order to maintain its REIT status. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any properties are foreclosed upon due to a default, our ability to pay cash distributions to our shareholders may be adversely affected, which could result in our being required to pay taxable stock dividends in order to maintain our REIT status.

Covenants in our debt agreements may limit our operational flexibility, and a covenant breach or default could materially adversely affect our business and financial condition.

The agreements governing our indebtedness contain customary covenants for a real estate financing, including restrictions on the ability of the borrowers under the agreements governing our existing indebtedness to grant liens on their assets (including the Wholly Owned Properties and JV Interests, which comprise substantially all of our assets), incur additional indebtedness, or transfer or sell assets. Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds.  

In November 2016, the Company and the servicer for our Mortgage Loans (as defined below) entered into amendments to our Loan Agreements to resolve a disagreement regarding one of the cash flow sweep provisions in our Loan Agreements. The principal terms of these amendments are that the Company has (i) posted $30 million, and will post $3.3 million on a monthly basis, to a

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redevelopment reserve account, which amounts may be used by the Company to fund redevelopment projects and (ii) extended the spread maintenance provision for prepayment of the loan by two months through March 9, 2018 (with the spread maintenance premium for the second month at a reduced amount).  As a result of this amendment and the resolution of the related disagreement, no cash flow sweep was imposed.

Were a cash flow sweep to be imposed (and for so long as a cash flow sweep period is imposed), we potentially could be constrained in our ability to use cash generated by the Wholly Owned Properties.  In addition, during the pendency of the cash flow sweep, the lender would have certain consent rights over, among other things, our annual budget and variances thereto, redevelopment budgets and variances thereto, and capital improvements requiring capital expenditures that are not consistent with the approved annual budget or an approved redevelopment plan and budget.   These enhanced consent rights potentially could limit our operational flexibility.

The covenants in our Loan Agreements also require Seritage to maintain a minimum consolidated liquidity and minimum consolidated net worth. Covenants that limit our operational flexibility as well as defaults under our debt instruments could have a material adverse effect on our business and financial condition.

We have limited operating history as a REIT and an independent public company, and our inexperience may impede our ability to successfully manage our business or implement effective internal controls.

We have limited operating history owning, leasing or developing properties independent from Sears Holdings or operating as a REIT. Similarly, we have limited operating history as an independent public company. We cannot assure you that our past experience will be sufficient to successfully operate our company as a REIT and an independent public company. The Company is required to implement substantial control systems and procedures in order to maintain its qualification as a REIT, satisfy its periodic and current reporting requirements under applicable SEC regulations and comply with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the NYSE listing standards. As a result, our management and other personnel need to devote a substantial amount of time to comply with these rules and regulations and establish the corporate infrastructure and controls demanded of a publicly traded REIT. These costs and time commitments could be substantially more than we currently expect. If our finance and accounting organization is unable for any reason to respond adequately to the increased demands, the quality and timeliness of our financial reporting may suffer, and we could experience significant deficiencies or material weaknesses in our disclosure controls and procedures or our internal control over financial reporting.

An inability to establish effective disclosure controls and procedures and internal control over financial reporting or remediate existing deficiencies could cause us to fail to meet our reporting obligations under the Exchange Act, or result in material weaknesses, material misstatements or omissions in our Exchange Act reports, any of which could cause investors to lose confidence in our company, which could have an adverse effect on our revenues and results of operations or the market price of Class A common shares, par value $0.01 per share, Class B non-economic common shares of beneficial interest, par value $0.01 per share (“Class B non-economic common shares”), and Class C non-voting common shares of beneficial interest, par value $0.01 per share (“Class C non-voting common shares”).

Our rights and the rights of our shareholders to take action against our trustees and officers are limited.

As permitted by the Maryland REIT Law, the Company’s Declaration of Trust limits the liability of its trustees and officers to Seritage and its shareholders for money damages, except for liability resulting from:

• actual receipt of an improper benefit or profit in money, property or services; or

• a final judgment based upon a finding of active and deliberate dishonesty by the trustee or officer that was material to the cause of action adjudicated.

In addition, the Company’s Declaration of Trust authorizes it and Seritage’s bylaws obligate it to indemnify its present and former trustees and officers for actions taken by them in those capacities and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding to the maximum extent permitted by Maryland law, and we have entered into indemnification agreements with our trustees and executive officers. As a result, the Company and our shareholders may have more limited rights against our trustees and officers than might otherwise exist absent the provisions in our Declaration of Trust and bylaws or that might exist with other companies. Accordingly, in the event that actions taken by any of our trustees or officers are immune or exculpated from, or indemnified against, liability but which impede our performance, the Company and our shareholders’ ability to recover damages from that trustee or officer will be limited.

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Seritage’s Declaration of Trust and bylaws, Maryland law, and the partnership agreement of Operating Partnership contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in control.

The Company’s Declaration of Trust and bylaws, Maryland law and the partnership agreement of Operating Partnership contain a number of provisions, the exercise or existence of which could delay, defer or prevent a transaction or a change in control that might involve a premium price for our shareholders or otherwise be in their best interests, including the following:

• The Company’s Declaration of Trust Contains Restrictions on the Ownership and Transfer of Seritage Shares of Beneficial Interest. In order for us to qualify as a REIT, no more than 50% of the value of all outstanding common shares may be owned, beneficially or constructively, by five or fewer individuals at any time during the last half of each taxable year other than 2015, the first taxable year for which we elected to be taxed as a REIT. Additionally, at least 100 persons must beneficially own Class A common shares during at least 335 days of a taxable year (other than the first taxable year for which we elect to be taxed as a REIT). The Company’s Declaration of Trust, with certain exceptions, authorizes the Board of Trustees to take such actions as are necessary and desirable to preserve its qualification as a REIT. For this and other purposes, subject to certain exceptions, our Declaration of Trust provides that no person may beneficially or constructively own more than 9.6%, in value or in number of shares, whichever is more restrictive, of all outstanding shares, or all outstanding common shares (including our Class A common shares, our Class B non-economic common shares and our Class C non-voting common shares), of beneficial interest of the Company. We refer to these restrictions collectively as the “ownership limits.” The constructive ownership rules under the Code are complex and may cause shares owned directly or constructively by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.6% of the outstanding shares of beneficial interest of our shares by an individual or entity could cause that individual or entity or another individual or entity to own, beneficially or constructively, the Company’s shares of beneficial interest in violation of the ownership limits.  In addition, because we have multiple classes of common shares, the acquisition of Class A common shares may result in a shareholder inadvertently owning, beneficially or constructively, the Company’s shares of beneficial interest in violation of the ownership limits.  Our Declaration of Trust also prohibits any person from owning Class A common shares that would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT. Any attempt to own or transfer Class A common shares or any of our other shares of beneficial interest in violation of these restrictions or other restrictions on ownership or transfer in our Declaration of Trust may result in the transfer being automatically void. The Company’s Declaration of Trust also provides that Class A common shares in excess of the ownership limits will be transferred to a trust for the exclusive benefit of a designated charitable beneficiary, and that any person who acquires Class A common shares in violation of the ownership limits will not be entitled to any dividends on the shares or be entitled to vote the shares or receive any proceeds from the subsequent sale of the shares in excess of the lesser of the price paid by such person for the shares (or, if such person did not give value for such shares, the market price on the day the shares were transferred to the trust) or the amount realized from the sale. We or our designee will have the right to purchase the shares from the trustee at this calculated price as well. The ownership limits and other restrictions on ownership and transfer in our Declaration of Trust may have the effect of preventing, or may be relied upon to prevent, a third party from acquiring control of us if the Board of Trustees does not grant an exemption from the ownership limits, even if our shareholders believe the change in control is in their best interests.

• The Company’s Board of Trustees Has the Power to Cause Us to Issue Additional Shares of Beneficial Interest and Classify and Reclassify Any Unissued Class A Common Shares without Shareholder Approval. The Company has issued and outstanding, in addition to the Class A common shares, Class B non-economic common shares having, in the aggregate, approximately 4.9% of the voting power of the Company, all of which are held by ESL Partners, L.P. and Edward S. Lampert (“ESL”), and Class C non-voting common shares entitled to, in the aggregate, 17.1% of the dividends or other distributions issued to holders of shares of beneficial interest of the Company, all of which are held by clients (“Fairholme Clients”) of Fairholme Capital Management L.L.C. (“FCM”).  Our Declaration of Trust authorizes us to issue additional authorized but unissued common shares or preferred shares of beneficial interest. In addition, the Board of Trustees may, without shareholder approval, (i) amend the Declaration of Trust to increase or decrease the aggregate number of shares of beneficial interest or the number of shares of beneficial interest of any class or series that we have authority to issue and (ii) classify or reclassify any unissued common shares or preferred shares of beneficial interest and set the preferences, rights and other terms of the classified or reclassified shares. As a result, the Board of Trustees may establish a class or series of common shares or preferred shares of beneficial interest that could delay or prevent a transaction or a change in control that might involve a premium price for Class A common shares or otherwise be in the best interests of our shareholders.

• The Board of Trustees Is Divided into Three Classes and Trustee Elections Require a Vote of 75% of the Class A Common Shares and Class B Non-Economic Common Shares Entitled to Vote. The Board of Trustees is divided into three classes of trustees, with each class to be as nearly equal in number as possible. As a result, approximately one-third of the Board of Trustees will be elected at each annual meeting of shareholders, with, in both contested and uncontested elections, trustees elected by the vote of 75% of the votes of the Class A common shares and Class B non-economic

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common shares (voting together as a single class) entitled to be cast in the election of trustees. In the event that an incumbent trustee does not receive a sufficient percentage of votes cast for election, he or she will continue to serve on the Board of Trustees until a successor is duly elected and qualifies. The classification of trustees and requirement that trustee nominees receive a vote of 75% of the votes of the Class A common shares and Class B non-economic common shares (voting together as a single class) entitled to be cast in the election of trustees may have the effect of making it more difficult for shareholders to change the composition of the Board of Trustees. The requirement that trustee nominees receive a vote of 75% of the votes of the Class A common shares and Class B non-economic common shares (voting together as a single class) entitled to be cast in the election of trustees may also have the effect of making it more difficult for shareholders to elect trustee nominees that do not receive the votes of shares of beneficial interest held by ESL and/or Fairholme Clients, which control approximately 8.2% and approximately 9.0%, respectively, of the voting power of the Company.

• The Partnership Agreement of Operating Partnership Provides Holders of Operating Partnership Units Approval Rights over Certain Change in Control Transactions Involving the Company or Operating Partnership. Pursuant to the partnership agreement of Operating Partnership, certain transactions, including mergers, consolidations, conversions or other combinations or extraordinary transactions or transactions that constitute a “change of control” of the Company or Operating Partnership, as defined in the partnership agreement, will require the approval of the partners (other than the Company and entities controlled by it) holding a majority of all the outstanding Operating Partnership units held by all partners (other than the Company and entities controlled by it). These provisions could have the effect of delaying or preventing a change in control. ESL holds all of the Operating Partnership units not held by the Company and entities controlled by it.

• Certain Provisions of Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us. Certain provisions of the Maryland General Corporation Law (the “MGCL”) applicable to Maryland REITs may have the effect of inhibiting a third party from acquiring us or of impeding a change of control of the Company under circumstances that otherwise could provide Class A common shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares or otherwise be in the best interest of shareholders, including:

• “business combination” provisions that, subject to certain exceptions and limitations, prohibit certain business combinations between a Maryland REIT and an “interested shareholder” (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the Company’s outstanding voting shares or an affiliate or associate of the Maryland REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of the Company) or an affiliate of any interested shareholder and the Maryland REIT for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes two supermajority shareholder voting requirements on these combinations;

• “control share” provisions that provide that, subject to certain exceptions, holders of “control shares” of our company (defined as voting shares that, if aggregated with all other shares owned or controlled by the acquirer, would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of issued and outstanding “control shares”) have no voting rights with respect to the control shares except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares; and

• Additionally, Title 3, Subtitle 8 of the MGCL permits the Board of Trustees, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or bylaws, to implement certain takeover defenses.

The Board of Trustees has, by resolution, exempted from the provisions of the Maryland Business Combination Act all business combinations (a) between us and (i) Sears Holdings or its affiliates or (ii) ESL or FCM and/or Fairholme Clients and their respective affiliates and (b) between us and any other person, provided that such business combination is first approved by the Board of Trustees (including a majority of our trustees who are not affiliates or associates of such person). In addition, our bylaws contain a provision opting out of the Maryland control share acquisition act.

We may experience uninsured or underinsured losses, or insurance proceeds may not otherwise be available to us which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur unanticipated expense.

While the Master Lease and other existing third-party leases require, and new lease agreements are expected to require, that comprehensive general insurance and hazard insurance be maintained by the tenants with respect to their premises, and we have

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obtained casualty insurance with respect to our properties, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that may be uninsurable or not economically insurable. Insurance coverage (net of deductibles) may not be effective or be sufficient to pay the full current market value or current replacement cost of a loss. Inflation, changes in building and zoning codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to restore or replace the property after such property has been damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to such property or to comply with the requirements of our mortgages and Property Restrictions. Moreover, the holders of any mortgage indebtedness may require some or all property insurance proceeds to be applied to reduce such indebtedness, rather than being made available for property restoration.

If we experience a loss that is uninsured or that exceeds our policy coverage limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties were subject to recourse indebtedness, Property Restrictions or ground leases, we could continue to be liable for the indebtedness or subject to claims for damages even if these properties were irreparably damaged.

In addition, even if damage to our properties is covered by insurance, a disruption of our business or that of our tenants caused by a casualty event may result in the loss of business and/or tenants. The business interruption insurance we or our tenants carry may not fully compensate us for the loss of business or tenants due to an interruption caused by a casualty event. Further, if one of our tenants has insurance but is underinsured, that tenant may be unable to satisfy its payment obligations under its lease with us or its other payment or other obligations.

A disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies and any insurer’s ability to meet its claim payment obligations. A failure of an insurance company to make payments to us upon an event of loss covered by an insurance policy, losses in excess of our policy coverage limits or disruptions to our business or the business of our tenants caused by a casualty event could adversely affect our business, financial condition and results of operations.

Each JV may also experience uninsured or underinsured losses, and also faces other risks related to insurance that are similar to those we face, which could reduce the value of our investment in, or distributions to us by, one or more JVs, or require that we make additional capital contributions to one or more JVs.

Conflicts of interest may exist or could arise in the future between the interests of Seritage shareholders and the interests of holders of Operating Partnership units, and the partnership agreement of Operating Partnership grants holders of Operating Partnership units certain rights, which may harm the interests of Seritage shareholders.

Conflicts of interest may exist or could arise in the future as a result of the relationships between Seritage and its affiliates, on the one hand, and Operating Partnership or any of its partners, on the other. Seritage’s trustees and officers have duties to Seritage under Maryland law in connection with their oversight and management of the company. At the same time, Seritage, as general partner of Operating Partnership, will have duties and obligations to Operating Partnership and its limited partners under Delaware law, as modified by the partnership agreement of Operating Partnership in connection with the management of Operating Partnership.

For example, without the approval of the majority of the Operating Partnership units not held by Seritage and entities controlled by it, Seritage will be prohibited from taking certain extraordinary actions, including change of control transactions of Seritage or Operating Partnership.

ESL owns a substantial percentage of the Operating Partnership Units, which may be exchanged for cash or, at the election of Seritage, Class A common shares, and which will result in certain transactions involving Seritage or Operating Partnership requiring the approval of ESL.

ESL owns approximately 39.6% of the Operating Partnership units, with the remainder of the units held by the Company. In addition, ESL will have the right to acquire additional Operating Partnership units in order to allow it to maintain its relative ownership interest in Operating Partnership if Operating Partnership issues additional units to the Company under certain circumstances, including if we issue additional equity and contribute the funds to Operating Partnership to fund acquisitions or redevelopment of properties, among other uses. In addition, ESL will have the right to require the Operating Partnership to redeem its Operating Partnership units in whole or in part in exchange for cash or, at the election of the Company, Class A common shares, except as described below. Due to the ownership limits set forth in our Declaration of Trust, ESL may dispose of some or all of the Class A common shares it beneficially owns prior to exercising its right to require Operating Partnership to redeem Operating Partnership units, and the partnership agreement of Operating Partnership will permit ESL (and only ESL) to transfer its Operating Partnership units to one or more underwriters to be exchanged for Class A common shares in connection with certain dispositions in order to achieve the same effect as

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would occur if ESL were to exchange a larger portion of its Operating Partnership units for Class A common shares and then dispose of those shares in an underwritten offering. Sales of a substantial number of Class A common shares in connection with or to raise cash proceeds to facilitate, such a redemption, or the perception that such sales may occur, could adversely affect the market price of the Class A common shares.

In addition, the partnership agreement of Operating Partnership requires the approval of a majority of the Operating Partnership units not held by the Company and entities controlled by it for certain transactions and other actions, including certain change of control transactions involving Seritage or Operating Partnership, sales of all or substantially all of the assets of Operating Partnership, waivers to the excess share provision in the Declaration of Trust of the Company, certain modifications to the partnership agreement, withdrawal or succession of the Company as general partner of Operating Partnership, limits on the right of holders of Operating Partnership units to redeem their units, tax elections and certain other matters. As long as ESL owns a majority of the outstanding Operating Partnership units not held by the Company and entities controlled by it (and, for certain actions, as long as ESL holds at least 40% of the economic interests of Seritage and Operating Partnership on a combined basis), ESL’s approval will be required in order for the general partner to undertake such actions. If ESL refuses to approve a transaction, our business could be materially adversely affected. Furthermore, ESL owns approximately 3.5% of the outstanding Class A common shares, as well as Class B non-economic common shares having, in the aggregate, 4.9% of the voting power of the Company. In any of these matters, the interests of ESL may differ from or conflict with the interests of our other shareholders.

ESL exerts substantial influence over us and Sears Holdings, and its interests may differ from or conflict with the interests of our other shareholders.

ESL beneficially owns approximately 39.6% of the Operating Partnership units, and approximately 3.5% of the outstanding Class A common shares and Class B non-economic common shares having, in the aggregate, 4.9% of the voting power of Seritage. ESL also beneficially owns approximately 50.1% of the outstanding common stock of Sears Holdings.  In addition, Mr. Lampert, the Chairman of the Board and Chief Executive Officer of Sears Holdings and Chairman and Chief Executive Officer of ESL, serves as the Chairman of the Seritage Board of Trustees. As a result, ESL and its affiliates have substantial influence over us and Sears Holdings. In any matter affecting us, including our relationship with Sears Holdings, the interests of ESL may differ from or conflict with the interests of our other shareholders.

The businesses of each of the GGP JV, the Simon JV, and the Macerich JV are similar to our business and the occurrence of risks that adversely affect us could also adversely affect our investment in the GGP JV, the Simon JV and/or the Macerich JV.

The GGP JV is a joint venture that owns and operates certain JV Properties, which consist of 12 properties formerly owned or leased by Sears Holdings, the Simon JV is a joint venture that owns and operates certain other JV Properties, which consist of ten other properties formerly owned by Sears Holdings and the Macerich JV is a joint venture that owns and operates the remaining JV Properties, which consist of nine other properties formerly owned by Sears Holdings. A substantial majority of the space at the JV Properties is leased by the applicable JV to Sears Holdings under the applicable JV Master Lease. Except with respect to the rent amounts and the properties covered, the general formats of the JV Master Leases are similar to one another and to the Master Lease, including with respect to the lessor’s right to recapture space leased to Sears Holdings (other than at one property owned by the Macerich JV) and Sears Holdings’ right to terminate a portion of the lease as to certain properties. As a result, each JV’s business is similar to our business, and each JV is subject to many of the same risks that we face. The occurrence of risks that adversely affect us could also adversely affect one or more JVs and reduce the value of our investment in, or distributions to us from, one or more JVs, or require that we make additional capital contributions to one or more JVs.

In addition, our influence over each JV may be limited by the fact that day-to-day operation of the GGP JV, the Simon JV and the Macerich JV, and responsibility for leasing and redevelopment activities related to the JV Properties owned by the GGP JV, the Simon JV and the Macerich JV, as applicable, are generally delegated to GGP, Simon and Macerich, respectively, subject to certain exceptions. The JV Properties owned by the GGP JV are located at malls owned and operated by GGP, the JV Properties owned by the Simon JV are located at malls owned and operated by the Simon JV and the JV Properties owned by the Macerich JV are located at malls owned and operated by the Macerich JV. As a result, conflicts of interest may exist or could arise in the future between the interests of GGP, Simon or Macerich and our interests as a holder of 50% interests in the GGP JV, the Simon JV and the Macerich JV, respectively, including, for example, with respect to decisions as to whether to lease to third parties space at a JV Property or other space at the mall at which such JV Property is located.

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We depend on Sears Holdings to provide certain services at properties where Sears Holdings is the sole or primary tenant and may have difficulty finding replacement services or be required to pay increased costs to replace these services after our agreements with Sears Holdings expire.

We entered into various agreements that effected the purchase and sale of the acquired properties and the lease or sublease of a substantial majority of the acquired properties to Sears Holdings, including, among others, the Subscription, Distribution and Purchase and Sale Agreement and the Master Lease. The Master Lease governs the terms of the use and operation of the properties leased by us to Sears Holdings, including our redevelopment and recapture rights and Sears Holdings’ lease termination rights, and the repair, maintenance and redevelopment-related services Sears Holdings may provide to us. In addition, the Subscription, Distribution and Purchase and Sale Agreement provides for, among other things, our responsibility for liabilities relating to our business and the responsibility of Sears Holdings for liabilities unrelated to our business. The agreements between us and Sears Holdings also govern our various interim and ongoing relationships. The Subscription, Distribution and Purchase and Sale Agreement also contains indemnification obligations and ongoing commitments of us and Sears Holdings.

After the Master Lease expires, or if Sears Holdings is unable to meet its obligations under the Master Lease, we may be forced to seek replacement services from alternate providers. These replacement services may be more costly to us or of lower quality, and the transition process to a new service provider may result in interruptions to our business or operations, which could harm our financial condition or results of operations.

Sears Holdings has agreed to indemnify us for certain liabilities. However, these indemnities may be insufficient to insure us against the full amount of such liabilities, and Sears Holdings’ ability to satisfy its indemnification obligations may be impaired in the future.

Pursuant to the Subscription, Distribution and Purchase and Sale Agreement and the Master Lease, Sears Holdings has agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that Sears Holdings has agreed to retain, and Sears Holdings may be unable to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from Sears Holdings any amounts for which we are held liable, we may be temporarily required to bear these losses while seeking recovery from Sears Holdings. Any liabilities in excess of amounts for which we receive timely indemnification from Sears Holdings could have a material adverse effect on our business and financial condition.

Risks Related to Status as a REIT

If we do not qualify to be taxed as a REIT, or fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders.

We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our initial taxable year ended December 31, 2015 and have operated, and expect to continue to operate, to qualify as a REIT.  References throughout this document to the “first taxable year” for which we have elected to be taxed as a REIT refer to the taxable year ended December 31, 2015. In connection with the Transaction, the Company received an opinion of Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) with respect to its qualification as a REIT. Investors should be aware, however, that opinions of counsel are not binding on the IRS or any court. The opinion of Wachtell Lipton represented only the view of Wachtell Lipton based on its review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including representations relating to the values of our assets and the sources of our income. The opinion was expressed as of the date it was issued and has not been updated. Wachtell Lipton has no obligation to advise us or the holders of Class A common shares of any subsequent change in the matters stated, represented or assumed or of any subsequent change in applicable law. Furthermore, both the validity of the opinion of Wachtell Lipton and our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis, the results of which will not be monitored by Wachtell Lipton. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for some of which we will not obtain independent appraisals.

If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our shareholders would not be deductible by the Company in computing our taxable income. Any resulting corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our shareholders, which in turn could have an adverse impact on the value of Class A common shares. Unless we were entitled to relief under certain Code provisions, the Company also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify as a REIT.

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Qualifying as a REIT involves highly technical and complex provisions of the Code.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. The Company’s qualification as a REIT depends on the satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT may depend in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for U.S. federal income tax purposes.

We could fail to qualify to be taxed as a REIT if income we receive from Sears Holdings is not treated as qualifying income.

Under applicable provisions of the Code, we will not be treated as a REIT unless we satisfy various requirements, including requirements relating to the sources of our gross income. Rents we receive or accrue from Sears Holdings will not be treated as qualifying rent for purposes of these requirements if the Master Lease is not respected as a true lease for U.S. federal income tax purposes and is instead treated as a service contract, joint venture, financing, or some other type of arrangement. If the Master Lease is not respected as a true lease for U.S. federal income tax purposes, we may fail to qualify to be taxed as a REIT. Furthermore, our qualification as a REIT depends on the satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for some of which we will not obtain independent appraisals.

In addition, subject to certain exceptions, rents we receive or accrue from Sears Holdings (or other tenants) will not be treated as qualifying rent for purposes of these requirements if we or an actual or constructive owner of 10% or more of the Class A common shares actually or constructively owns 10% or more of the total combined voting power of all classes of Sears Holdings stock (or the stock of such other tenant) entitled to vote or 10% or more of the total value of all classes of Sears Holdings stock (or the stock of such other tenant). The Company’s Declaration of Trust provides for restrictions on ownership and transfer of Class A common shares, including restrictions on such ownership or transfer that would cause the rents we receive or accrue from Sears Holdings (or other tenants) to be treated as non-qualifying rent for purposes of the REIT gross income requirements. Nevertheless, such restrictions may not be effective in ensuring that rents we receive or accrue from Sears Holdings (or other tenants) will be treated as qualifying rent for purposes of REIT qualification requirements.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum U.S. federal income tax rate applicable to income from “qualified dividends” payable by U.S. corporations to U.S. shareholders that are individuals, trusts and estates is currently 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates. Although these rules do not adversely affect the taxation of REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including the Class A common shares.

REIT distribution requirements could adversely affect our ability to execute our business plan.

We generally must distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, in order for us to qualify to be taxed as a REIT (assuming that certain other requirements are also satisfied) so that U.S. federal corporate income tax does not apply to earnings that we distribute. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, we will be subject to U.S. federal corporate income tax on our undistributed net taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. We intend to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code.

From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices or distribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year; alternatively, we may distribute taxable stock dividends to our shareholders in the form of additional shares of stock – see “Seritage may from time to time make

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distributions to our shareholders in the form of taxable stock dividends, which could result in shareholders incurring a tax liability without receiving sufficient cash to pay such tax”. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of Class A common shares.

Restrictions in our indebtedness, including restrictions on our ability to incur additional indebtedness or make certain distributions, could preclude us from meeting the 90% distribution requirement. Decreases in funds from operations due to unfinanced expenditures for acquisitions of properties or increases in the number of Class A common shares outstanding without commensurate increases in funds from operations each would adversely affect our ability to maintain distributions to our shareholders. Moreover, the failure of Sears Holdings to make rental payments under the Master Lease would materially impair our ability to make distributions. Consequently, we may be unable to make distributions at the anticipated distribution rate or any other rate.

We may from time to time make distributions to our shareholders in the form of taxable stock dividends, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax.

Although it has no current intention to do so, Seritage may in the future distribute taxable stock dividends to its shareholders in the form of additional shares of its stock. Taxable shareholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of Seritage’s current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, shareholders may be required to pay income taxes with respect to such dividends in excess of the cash distributions received. If a U.S. shareholder sells Seritage shares that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our shares at the time of the sale. Furthermore, with respect to certain non-U.S. shareholders, Seritage may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in its common stock.

Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.

Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. federal, state, local and foreign taxes on our income and assets, including taxes on any undistributed income and state, local or foreign income, property and transfer taxes. For example, in order to meet the REIT qualification requirements, Seritage may hold some of our assets or conduct certain of our activities through one or more taxable REIT subsidiaries (“TRSs”) or other subsidiary corporations that will be subject to federal, state and local corporate-level income taxes as regular C corporations. In addition, we may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s-length basis. Any of these taxes would decrease cash available for distribution to our shareholders.

Complying with REIT requirements may cause us to liquidate or forgo otherwise attractive opportunities.

To qualify to be taxed as a REIT, we must ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and “real estate assets” (as defined in the Code), including certain mortgage loans and securities. The remainder of our investments (other than government securities, qualified real estate assets and securities issued by a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than government securities, qualified real estate assets and securities issued by a TRS) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by securities of one or more TRSs. If the Company fails to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate or forgo otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

In addition to the asset tests set forth above, to qualify to be taxed as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our shareholders and the ownership of our shares of beneficial interest. We may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder our ability to make certain attractive investments.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Any income from a hedging transaction that we enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets (or that we enter into to manage risk with respect to a prior hedge entered into in connection with property that has been disposed of or liabilities that have been extinguished) does not constitute “gross income” for purposes of the 75% or 95% gross

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income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.

Legislative or other actions affecting REITs or other entities could have a negative effect on us.

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury (the “Treasury”). Changes to the tax laws or interpretations thereof, with or without retroactive application, could materially and adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences to our investors and the Company of such qualification. In particular, the tax reform proposals being proposed by the new U.S. presidential administration and being considered in the U.S. Congress create uncertainty with respect to the future tax treatment of the Company and its investors.  For example, certain of the proposals may result in changes to the tax treatment of REITs and/or corporate entities. Other proposals could limit or eliminate the deduction for interest expense.  It is unclear whether, when, how and to what extent any of these (or other) proposals will be adopted.

Risks Related to Ownership of our Common Shares

The market price and trading volume of our common shares may be volatile.

The market price of our common shares may be volatile, and the trading volume in our common shares may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect the market price of our common shares or result in fluctuations in the price or trading volume of our common shares include:

• actual or anticipated variations in our quarterly results of operations or distributions;

• changes in our funds from operations or earnings estimates;

• publication of research reports about us or the real estate or retail industries;

• increases in market interest rates that may cause purchasers of our common shares to demand a higher yield;

• changes in market valuations of similar companies;

• adverse market reaction to any additional debt we may incur in the future;

• actions by ESL or FCM and/or Fairholme Clients, or by institutional shareholders;

• speculation in the press or investment community about our company or industry or the economy in general;

• adverse performance by Sears Holdings, our primary tenant;

• the occurrence of any of the other risk factors presented in this filing;

• specific real estate market and real estate economic conditions; and

• general market and economic conditions.

Future offerings of debt, which would be senior to our common shares upon liquidation, and/or preferred equity securities, which may be senior to our common shares for purposes of distributions or upon liquidation, may adversely affect the market price of our common shares.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including medium-term notes, trust preferred securities, senior or subordinated notes and preferred shares. Upon liquidation, holders of our debt securities and preferred shares and lenders with respect to other borrowings may receive distributions of our available assets prior to the holders of our common shares. Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of our common shares, or both. Holders of our common shares are not entitled to preemptive rights or other protections against dilution, and will have no voting rights in connection with the issuance of these securities. Our preferred shares of beneficial interest, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could

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limit our ability to make a distribution to the holders of our common shares. Since our decision to issue securities in any future offering will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our shareholders bear the risk of our future offerings reducing the market price of our common shares and diluting their holdings in us.

The transactions with Sears Holdings could give rise to disputes or other unfavorable effects, which could have a material adverse effect on our business, financial condition or results of operations.

Disputes with third parties could arise out of our transactions with Sears Holdings, and we could experience unfavorable reactions from employees, ratings agencies, regulators or other interested parties. These disputes and reactions of third parties could have a material adverse effect on our business, financial condition or results of operations. In addition, disputes between us and Sears Holdings (and our subsidiaries) could arise in connection with any of the Subscription, Distribution and Purchase and Sale Agreement, the Master Lease or other agreements.

A court could deem aspects of the transactions with Sears Holdings to be a fraudulent conveyance and void the transaction or impose substantial liabilities upon us.

A court could deem aspects of the transactions with Sears Holdings (such as the acquisition of properties from Sears Holdings) to be a fraudulent conveyance upon a subsequent legal challenge by unpaid creditors or a bankruptcy trustee of the debtor that made the conveyance. Fraudulent conveyances include transfers made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors, or transfers made or obligations incurred in exchange for less than reasonably equivalent value when the debtor was, or was rendered, insolvent, inadequately capitalized or unable to pay its debts as they become due. To remedy a fraudulent conveyance, a court could void the challenged transfer or obligation, requiring us to return consideration that we received, or impose substantial liabilities upon us for the benefit of unpaid creditors of the debtor that made the fraudulent conveyance, which could adversely affect our financial condition and our results of operations. Among other things, the court could require our shareholders to return to Sears Holdings some or all of the Class A common shares issued in the distribution. Whether a transaction is a fraudulent conveyance may vary depending upon, among other things, the jurisdiction whose law is being applied.

The number of shares available for future sale could adversely affect the market price of Class A common shares.

We cannot predict whether future issuances of Class A common shares, the availability of Class A common shares for resale in the open market or the conversion of Class C non-voting common shares into Class A common shares will decrease the market price per share of Class A common shares. Sales of a substantial number of Class A common shares in the public market, or the perception that such sales might occur, could adversely affect the market price of the Class A common shares.

Our earnings and cash distributions will affect the market price of Class A common shares.

We believe that the market value of a REIT’s equity securities is based primarily upon market perception of the REIT’s growth potential and its current and potential future cash distributions, whether from operations, sales, acquisitions, development or refinancing, and is secondarily based upon the value of the underlying assets. For these reasons, Class A common shares and Class C non-voting common shares may trade at prices that are higher or lower than the net asset value per share. To the extent we retain operating cash flow for investment purposes, working capital reserves or other purposes rather than distributing the cash flow to shareholders, these retained funds, while increasing the value of our underlying assets, may negatively impact the market price of Class A common shares. Our failure to meet market expectations with regard to future earnings and cash distributions would likely adversely affect the market price of Class A common shares and Class C non-voting common shares.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no unresolved comments from the staff of the SEC as of the date of this Annual Report.

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ITEM 2. PROPERTIES

As of December 31, 2016, our portfolio included 235 Wholly Owned Properties totaling over 36.8 million square feet of GLA across 49 states and Puerto Rico, and 50% interests in 31 JV Properties totaling over 5.4 million square feet of GLA across 17 states.  The following tables set forth certain information regarding our Wholly Owned Properties and JV Properties based on signed leases as of December 31, 2016, including signed but not yet open leases (“SNO leases”):

Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
1	Anchorage	AK		100%	Sears		257,700		204,100		42,700		10,900	Lands' End, Nordstrom Rack		95.8	%
2	Cullman (5)	AL	n/a		Kmart		98,500		98,500		—		—	n/a		100.0	%
3	North Little Rock	AR		50%	Sears		185,700		185,700		—		—	n/a		100.0	%
4	Russellville	AR		50%	Kmart		88,000		88,000		—		—	n/a		100.0	%
5	Flagstaff	AZ		50%	Sears		66,200		66,200		—		—	n/a		100.0	%
6	Mesa	AZ		50%	Sears		121,900		121,900		—		—	n/a		100.0	%
7	Peoria	AZ	n/a		n/a		104,400		—		104,400		—	At Home		100.0	%
8	Phoenix	AZ		50%	Sears		144,200		144,200		—		—	n/a		100.0	%
9	Phoenix	AZ	n/a		n/a		151,200		—		151,200		—	At Home		100.0	%
10	Prescott	AZ		50%	Sears		102,300		102,300		—		—	n/a		100.0	%
11	Sierra Vista	AZ		50%	Sears		94,700		94,700		—		—	n/a		100.0	%
12	Sierra Vista (5)	AZ	n/a		Kmart		86,100		86,100		—		—	n/a		100.0	%
13	Tucson	AZ		50%	Sears		250,100		250,100		—		—	n/a		100.0	%
14	Yuma	AZ		50%	Sears		90,400		90,400		—		—	n/a		100.0	%
15	Antioch	CA		50%	Kmart		95,200		95,200		—		—	n/a		100.0	%
16	Big Bear Lake	CA		50%	Kmart		80,400		69,300		7,400		3,700	Radio Shack, Subway, Wells Fargo Bank		95.4	%
17	Carson (4)	CA		50%	Sears		181,200		115,100		66,100		—	Applebee’s, Burlington Stores, Chick-Fil-A, Chipotle Mexican Grill, Jersey Mike’s, Smash Burger		100.0	%
18	Chula Vista	CA		50%	Sears		250,100		250,100		—		—	n/a		100.0	%
19	Citrus Heights	CA		50%	Sears		289,500		280,700		8,800		—	Lands' End		100.0	%
20	Delano	CA		50%	Kmart		86,100		86,100		—		—	n/a		100.0	%
21	El Cajon	CA		50%	Sears		286,500		275,700		10,800		—	Lands' End		100.0	%
22	El Centro	CA		50%	Sears		139,700		139,700		—		—	n/a		100.0	%
23	Fairfield	CA		50%	Sears		164,100		159,300		4,800		—	Lands' End		100.0	%
24	Florin	CA		50%	Sears		272,700		272,700		—		—	n/a		100.0	%
25	Fresno	CA		50%	Sears		217,600		217,600		—		—	n/a		100.0	%
26	McKinleyville	CA		50%	Kmart		94,800		94,800		—		—	n/a		100.0	%
27	Merced	CA		50%	Sears		92,600		92,600		—		—	n/a		100.0	%
28	Montclair	CA		50%	Sears		174,700		174,700		—		—	n/a		100.0	%
29	Moreno Valley	CA		50%	Sears		169,400		169,400		—		—	n/a		100.0	%
30	Newark	CA		50%	Sears		145,800		145,800		—		—	n/a		100.0	%
31	North Hollywood (4)	CA		50%	Sears		151,000		108,300		42,700		—	Burlington Stores		100.0	%
32	Northridge	CA		50%	Sears		291,800		256,900		34,900		—	Ashley Furniture		100.0	%
33	Palm Desert	CA		50%	Sears		151,500		151,500		—		—	n/a		100.0	%
34	Ramona	CA		50%	Kmart		107,600		87,000		14,700		5,900	Dollar Tree		94.5	%
35	Riverside	CA		50%	Sears		214,200		202,000		12,200		—	Bank of America		100.0	%
36	Riverside (6)	CA		50%	Kmart		132,600		94,500		38,100		—	Jack in the Box, Stater Brothers		100.0	%
37	Roseville	CA		50%	Sears		139,000		131,400		7,600		—	Lands' End		100.0	%
38	Salinas	CA		50%	Sears		133,000		133,000		—		—	n/a		100.0	%
39	San Bernardino	CA		100%	Sears		264,700		264,700		—		—	n/a		100.0	%
40	San Bruno	CA		50%	Sears		276,600		267,900		8,700		—	Lands' End		100.0	%

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Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
41	San Diego	CA		50%	Sears		194,800		164,800		30,000		—	Lands' End, Williams-Sonoma		100.0	%
42	San Jose	CA		50%	Sears		262,500		262,500		—		—	n/a		100.0	%
43	Santa Cruz (4)	CA		50%	Sears		119,600		53,400		66,200		—	Lands' End, Petco, TJ Maxx		100.0	%
44	Santa Maria	CA		50%	Sears		108,600		108,600		—		—	n/a		100.0	%
45	Santa Monica (4)	CA	n/a		n/a		117,800		112,000		5,800		—	Lands' End		100.0	%
46	Santa Paula	CA		50%	Kmart		71,300		71,300		—		—	n/a		100.0	%
47	Temecula	CA		50%	Sears		115,600		115,600		—		—	n/a		100.0	%
48	Thousand Oaks	CA		50%	Sears		164,000		50,300		113,700		—	Dave & Busters, DSW, Nordstrom Rack		100.0	%
49	Ventura	CA		50%	Sears		178,600		171,900		6,700		—	Lands' End		100.0	%
50	Visalia	CA		50%	Sears		75,600		75,600		—		—	n/a		100.0	%
51	West Covina	CA		50%	Sears		142,000		142,000		—		—	n/a		100.0	%
52	Westminster	CA		100%	Sears		197,900		197,900		—		—	n/a		100.0	%
53	Lakewood	CO		50%	Sears		153,000		153,000		—		—	n/a		100.0	%
54	Thornton (5)	CO	n/a		Kmart		190,200		190,200		—		—	n/a		100.0	%
55	Waterford	CT		50%	Sears		149,300		141,800		7,500		—	Lands' End		100.0	%
56	West Hartford (4)	CT	n/a		n/a		202,100		132,100		70,000		—	Lands' End, Olive Garden, REI, Saks OFF Fifth, Shake Shack		100.0	%
57	Rehoboth Beach (4)	DE		50%	Kmart		122,100		64,000		58,100		—	Bed, Bath & Beyond, Chick-Fil-A, PetSmart		100.0	%
58	Altamonte Springs	FL		50%	Sears		214,300		205,600		8,700		—	Seasons 52		100.0	%
59	Boca Raton	FL		50%	Sears		178,500		167,600		10,900		—	Lands' End, Washington Mutual		100.0	%
60	Bradenton	FL		50%	Sears		99,900		99,900		—		—	n/a		100.0	%
61	Bradenton	FL		50%	Kmart		82,900		82,900		—		—	n/a		100.0	%
62	Clearwater	FL		50%	Sears		211,700		129,700		82,000		—	Lands' End, Nordstrom Rack, Whole Foods		100.0	%
63	Doral	FL		50%	Sears		212,900		212,900		—		—	n/a		100.0	%
64	Ft. Myers	FL		50%	Sears		146,800		146,800		—		—	n/a		100.0	%
65	Gainesville	FL		50%	Sears		140,500		140,500		—		—	n/a		100.0	%
66	Hialeah	FL		50%	Sears		197,400		184,400		13,000		—	Forever 21, Goodwill		100.0	%
67	Hialeah	FL		50%	Kmart		106,400		62,200		44,200		—	Aldi, Bed, Bath & Beyond		100.0	%
68	Kissimmee (6)	FL		50%	Kmart		148,900		112,500		36,400		—	Big Lots		100.0	%
69	Lakeland	FL		50%	Sears		156,200		156,200		—		—	n/a		100.0	%
70	Melbourne	FL		50%	Sears		102,600		102,600		—		—	n/a		100.0	%
71	Miami	FL		100%	Sears		173,300		173,300		—		—	n/a		100.0	%
72	Miami	FL		100%	Sears		170,100		170,100		—		—	n/a		100.0	%
73	Naples	FL		50%	Sears		161,900		151,800		10,100		—	n/a		100.0	%
74	North Miami	FL		100%	Kmart		122,300		88,300		34,000		—	Aldi, PetSmart		100.0	%
75	Ocala	FL		50%	Sears		146,200		146,200		—		—	n/a		100.0	%
76	Orange Park	FL	n/a		n/a		87,400		—		87,400		—	Freddy's Frozen Custard, Old Time Pottery		100.0	%
77	Orlando (4)	FL	n/a		n/a		139,600		—		100,400		39,200	Floor & Décor, Orchard Supply Hardware		71.9	%
78	Panama City	FL		50%	Sears		139,300		139,300		—		—	n/a		100.0	%
79	Pensacola	FL		50%	Sears		212,300		212,300		—		—	n/a		100.0	%
80	Plantation	FL		50%	Sears		201,600		201,600		—		—	n/a		100.0	%
81	Sarasota	FL		50%	Sears		212,500		204,500		8,000		—	Lands' End		100.0	%
82	St. Petersburg	FL		50%	Kmart		120,600		120,600		—		—	n/a		100.0	%
83	St. Petersburg (4)	FL	n/a		n/a		193,900		88,900		105,000		—	Dick's Sporting Goods, Lucky's Market, PetSmart		100.0	%

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Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
84	Atlanta	GA		50%	Sears		226,300		218,700		7,600		—	Lands' End		100.0	%
85	Savannah	GA		100%	Sears		167,300		155,700		11,600		—	Golden Corral		100.0	%
86	Honolulu (4)	HI	n/a		n/a		76,100		—		76,100		—	Long's Drugs (CVS), PetSmart, Ross Dress for Less		100.0	%
87	Algona	IA		50%	Kmart		99,300		99,300		—		—	n/a		100.0	%
88	Cedar Rapids	IA		50%	Sears		146,000		141,100		4,900		—	Lands' End		100.0	%
89	Charles City	IA		50%	Kmart		96,600		96,600		—		—	n/a		100.0	%
90	Webster City	IA		50%	Kmart		40,800		40,800		—		—	n/a		100.0	%
91	Boise	ID		50%	Sears		123,600		123,600		—		—	n/a		100.0	%
92	Chicago	IL		50%	Sears		356,700		356,700		—		—	n/a		100.0	%
93	Chicago	IL		50%	Sears		293,700		293,700		—		—	n/a		100.0	%
94	Chicago (5)	IL	n/a		Kmart		168,500		118,800		49,700		—	China Town Buffet, Chuck E Cheese		100.0	%
95	Homewood	IL	n/a		n/a		196,100		—		196,100		—	Wal-Mart		100.0	%
96	Joliet	IL		50%	Sears		204,600		204,600		—		—	n/a		100.0	%
97	Lombard	IL	n/a		n/a		139,300		—		139,300		—	The Dump		100.0	%
98	Moline	IL		50%	Kmart		123,700		120,500		3,200		—	n/a		100.0	%
99	North Riverside	IL		50%	Sears		203,000		203,000		—		—	n/a		100.0	%
100	Orland Park	IL		50%	Sears		199,600		192,400		7,200		—	Lands' End		100.0	%
101	Springfield (5)	IL	n/a		Kmart		133,400		23,200		107,000		3,200	Binny's Beverage Depot, Burlington Stores, Outback Steakhouse		97.6	%
102	Steger	IL		50%	Kmart		87,400		87,400		—		—	n/a		100.0	%
103	Elkhart (5)	IN	n/a		Kmart		86,600		—		86,600		—	Big R Stores		100.0	%
104	Ft. Wayne (4)	IN		50%	Sears		227,600		213,500		14,100		—	Lands' End, BJ's Brewhouse		100.0	%
105	Merrillville (5)	IN	n/a		Kmart		170,900		—		145,000		25,900	At Home, Dollar Tree, Payless ShoeSource, Sherwin-Williams		84.8	%
106	Leavenworth (6)	KS		50%	Kmart		83,600		76,900		6,700		—	Sears Hometown		100.0	%
107	Overland Park	KS		50%	Sears		223,200		215,000		8,200		—	Lands' End		100.0	%
108	Hopkinsville (6)	KY		50%	Kmart		93,000		70,300		4,900		17,800	Cato		80.9	%
109	Owensboro (6)	KY		50%	Kmart		68,300		68,300		—		—	n/a		100.0	%
110	Paducah (6)	KY		50%	Sears		108,200		108,200		—		—	n/a		100.0	%
111	Houma (5)	LA	n/a		Kmart		101,400		96,700		4,700		—	Meineke Car Care		100.0	%
112	Lafayette	LA		50%	Sears		194,900		194,900		—		—	n/a		100.0	%
113	New Iberia (5)	LA	n/a		Kmart		91,700		91,700		—		—	n/a		100.0	%
114	Braintree (4)	MA	n/a		n/a		89,300		—		80,600		8,700	Nordstrom Rack, Saks Off 5th, Ulta Beauty		90.3	%
115	Saugus (4)	MA		50%	Sears		210,500		204,900		5,600		—	Lands' End, Round 1		100.0	%
116	Bowie (4)	MD		50%	Sears		131,700		123,500		8,200		—	BJ's Brewhouse		100.0	%
117	Cockeysville	MD		50%	Sears		165,900		149,700		16,200		—	Lands' End		100.0	%
118	Edgewater	MD		50%	Kmart		117,200		117,200		—		—	n/a		100.0	%
119	Hagerstown (4)	MD		50%	Sears		122,700		107,300		7,500		7,900	BJ's Brewhouse		93.6	%
120	Madawaska	ME		50%	Kmart		49,700		49,700		—		—	n/a		100.0	%
121	Alpena (5)	MI	n/a		Kmart		118,200		118,200		—		—	n/a		100.0	%
122	Jackson	MI		50%	Sears		152,700		144,200		8,500		—	Panera Bread, Pizza Hut		100.0	%
123	Lincoln Park	MI		50%	Sears		301,700		297,900		3,800		—	Bank of America		100.0	%
124	Manistee (5)	MI	n/a		Kmart		94,600		87,800		6,800		—	Hometown Dealer		100.0	%
125	Roseville (4)	MI		50%	Sears		385,400		277,000		108,400		—	At Home, Lands' End, Red Robin		100.0	%
126	Sault Ste. Marie (5)	MI	n/a		Kmart		92,700		92,700		—		—	n/a		100.0	%

- 26 -

Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
127	St. Clair Shores	MI		100%	Kmart		122,200		15,000		107,200		—	Kroger		100.0	%
128	Troy (4)	MI		50%	Sears		402,600		289,800		112,800		—	At Home, Krispy Kreme, Lands' End, Logan's Roadhouse		100.0	%
129	Ypsilanti	MI	n/a		n/a		99,400		—		99,400		—	At Home		100.0	%
130	Burnsville	MN		50%	Sears		167,400		161,700		5,700		—	Lands' End		100.0	%
131	Detroit Lakes (6)	MN		50%	Kmart		87,100		79,100		8,000		—	Hometown Dealer		100.0	%
132	Maplewood	MN		50%	Sears		174,900		168,500		6,400		—	Lands' End		100.0	%
133	St. Paul	MN		100%	Sears		217,900		216,300		1,600		—	n/a		100.0	%
134	Cape Girardeau	MO		50%	Kmart		82,600		82,600		—		—	n/a		100.0	%
135	Florissant	MO		50%	Kmart		119,000		114,700		4,300		—	n/a		100.0	%
136	Jefferson City (6)	MO		50%	Kmart		97,100		92,000		5,100		—	Ruby Tuesday		100.0	%
137	Springfield	MO	n/a		n/a		112,900		—		112,900		—	At Home		100.0	%
138	Columbus	MS		50%	Kmart		166,700		117,100		45,400		4,200	Bargain Hunt		97.5	%
139	Havre	MT		50%	Kmart		94,700		94,700		—		—	n/a		100.0	%
140	Asheville	NC		50%	Sears		240,700		232,400		8,300		—	Lands' End		100.0	%
141	Concord (6)	NC		50%	Kmart		171,300		137,500		33,800		—	Sears Outlet		100.0	%
142	Greensboro	NC	n/a		n/a		173,300		—		171,600		1,700	Floor & Décor, Gabriel Brothers, Sears Outlet		99.0	%
143	Minot	ND		50%	Kmart		110,400		108,100		2,300		—	US Bank		100.0	%
144	Kearney (5)	NE	n/a		Kmart		86,500		68,500		18,000		—	PetSmart		100.0	%
145	Manchester	NH		50%	Sears		144,100		135,100		9,000		—	Lands' End		100.0	%
146	Nashua	NH		50%	Sears		167,100		159,500		7,600		—	Lands' End		100.0	%
147	Portsmouth	NH		50%	Sears		127,000		120,100		6,900		—	Lands' End		100.0	%
148	Salem	NH		50%	Sears		250,500		119,000		131,500		—	Cinemark, Dick's Sporting Goods, Lands' End		100.0	%
149	Middletown	NJ		100%	Sears		191,200		176,100		15,100		—	Investors Bank, Lands' End, Wendy's		100.0	%
150	Watchung	NJ		100%	Sears		262,900		216,200		46,700		—	Cinemark, Lands' End		100.0	%
151	Wayne (4)	NJ		50%	Sears		327,300		235,400		91,900		—	Cinemark, Dave & Busters		100.0	%
152	Deming (5)	NM	n/a		Kmart		96,600		96,600		—		—	n/a		100.0	%
153	Farmington	NM		50%	Kmart		90,700		90,700		—		—	n/a		100.0	%
154	Hobbs	NM		50%	Kmart		88,900		88,900		—		—	n/a		100.0	%
155	Henderson (6)	NV		50%	Kmart		143,900		30,200		113,700		—	At Home, Sears Outlet		100.0	%
156	Las Vegas	NV		50%	Sears		150,200		150,200		—		—	n/a		100.0	%
157	Reno	NV		50%	Sears		198,800		198,800		—		—	n/a		100.0	%
158	Albany (4)	NY		50%	Sears		285,500		216,200		48,800		20,500	BJ's Brewhouse, Lands' End, Whole Foods		92.8	%
159	Clay	NY		50%	Sears		146,500		138,000		8,500		—	Lands' End		100.0	%
160	East Northport	NY		50%	Sears		195,300		139,000		56,300		—	AMC, Lands' End		100.0	%
161	Hicksville	NY		100%	Sears		362,600		332,100		30,500		—	Chase Bank, Chipotle Mexican Grill, Citigroup, Lands' End, Red Lobster, TD Bank		100.0	%
162	Johnson City	NY		50%	Sears		155,100		155,100		—		—	n/a		100.0	%
163	Olean	NY		50%	Kmart		118,000		118,000		—		—	n/a		100.0	%
164	Rochester	NY		50%	Sears		128,500		128,500		—		—	n/a		100.0	%
165	Sidney	NY		50%	Kmart		94,400		94,400		—		—	n/a		100.0	%
166	Victor	NY		50%	Sears		123,000		115,300		7,700		—	Lands' End		100.0	%
167	Yorktown Heights	NY		50%	Sears		160,000		153,700		6,300		—	Lands' End		100.0	%
168	Canton	OH		50%	Sears		219,400		177,700		41,700		—	Dave & Busters, Lands' End		100.0	%
169	Chapel Hill (6)	OH		50%	Sears		194,700		187,200		7,500		—	Lands' End		100.0	%

- 27 -

Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
170	Dayton	OH		50%	Sears		192,500		183,500		9,000		—	Lands' End		100.0	%
171	Kenton (6)	OH		50%	Kmart		96,100		96,100		—		—	n/a		100.0	%
172	Marietta	OH		50%	Kmart		87,500		87,500		—		—	n/a		100.0	%
173	Mentor	OH		50%	Sears		219,100		208,700		10,400		—	Lands' End		100.0	%
174	Middleburg Heights	OH		50%	Sears		359,000		351,600		7,400		—	Lands' End		100.0	%
175	North Canton	OH		50%	Kmart		87,100		84,200		2,900		—	Burger King		100.0	%
176	Tallmadge	OH		50%	Kmart		84,200		84,200		—		—	n/a		100.0	%
177	Toledo	OH		50%	Sears		218,700		209,900		8,800		—	Lands' End		100.0	%
178	Muskogee (6)	OK		50%	Kmart		87,500		87,500		—		—	n/a		100.0	%
179	Oklahoma City	OK		50%	Sears		173,700		173,700		—		—	n/a		100.0	%
180	Tulsa	OK	n/a		n/a		87,200		—		87,200		—	Long John Silver's, Hobby Lobby		100.0	%
181	Happy Valley	OR		50%	Sears		144,300		137,900		6,400		—	Lands' End		100.0	%
182	The Dalles	OR		50%	Kmart		87,100		87,100		—		—	n/a		100.0	%
183	Carlisle	PA		50%	Kmart		117,800		117,800		—		—	n/a		100.0	%
184	Columbia	PA		50%	Kmart		86,700		86,700		—		—	n/a		100.0	%
185	King Of Prussia (7)	PA	n/a		n/a		210,900		—		205,900		5,000	Dick's Sporting Goods, Primark, Outback Steakhouse, Yardhouse		97.6	%
186	Lebanon	PA		50%	Kmart		117,200		117,200		—		—	n/a		100.0	%
187	Mount Pleasant (6)	PA		50%	Kmart		83,500		83,500		—		—	n/a		100.0	%
188	Walnutport	PA		50%	Kmart		121,200		121,200		—		—	n/a		100.0	%
189	York	PA		50%	Kmart		82,000		82,000		—		—	n/a		100.0	%
190	Bayamon	PR		50%	Kmart		115,200		115,200		—		—	n/a		100.0	%
191	Caguas	PR		50%	Sears		138,700		138,700		—		—	n/a		100.0	%
192	Carolina	PR		50%	Sears		198,000		198,000		—		—	n/a		100.0	%
193	Guaynabo (4)	PR		50%	Kmart		217,400		97,300		108,000		12,100	All Ways 99, Baskin Robbins, Doral Bank, Firstbank, Kress Kids, La Defensa, La Nueva Era, McDonald’s, Me Salve, Ocean Garden Buffet, Payless Shoesource, Planet Fitness, Rainbow, Rent-a-Center, Sally Beauty Supply, T-Mobile		94.4	%
194	Mayaguez	PR		50%	Kmart		118,200		118,200		—		—	n/a		100.0	%
195	Ponce	PR		50%	Kmart		126,900		126,900		—		—	n/a		100.0	%
196	Warwick (4)	RI		50%	Sears		246,100		150,000		96,100		—	BJ's Brewhouse, Chuck E Cheese, Lands' End, On The Border, Wendy’s		100.0	%
197	Anderson (4)	SC		50%	Kmart		118,800		67,500		51,300		—	Burlington Stores		100.0	%
198	Charleston (4)	SC		50%	Sears		138,900		79,200		59,700		—	Burlington Stores, Carrabba’s Italian Grill		100.0	%
199	Rock Hill	SC		50%	Kmart		89,300		89,300		—		—	n/a		100.0	%
200	Sioux Falls (6)	SD		50%	Kmart		72,500		72,500		—		—	n/a		100.0	%
201	Cordova	TN		50%	Sears		160,900		156,100		4,800		—	Lands' End		100.0	%
202	Memphis (4)	TN	n/a		n/a		135,200		—		77,300		57,900	LA Fitness, Nordstrom Rack, Ulta Beauty		57.2	%
203	Austin	TX		50%	Sears		172,000		172,000		—		—	n/a		100.0	%
204	Dallas	TX		50%	Sears		205,300		205,300		—		—	n/a		100.0	%
205	El Paso (6)	TX		50%	Kmart		112,100		103,700		8,400		—	n/a		100.0	%
206	Friendswood	TX		50%	Sears		166,000		166,000		—		—	n/a		100.0	%
207	Harlingen (5)	TX	n/a		Kmart		91,700		91,700		—		—	n/a		100.0	%
208	Houston	TX		50%	Sears		214,400		209,500		4,900		—	Lands' End		100.0	%
209	Houston	TX	n/a		n/a		134,000		—		134,000		—	At Home		100.0	%
210	Ingram	TX		50%	Sears		168,400		168,400		—		—	n/a		100.0	%
211	Irving	TX		50%	Sears		86,900		79,500		7,400		—	n/a		100.0	%

- 28 -

Wholly-Owned Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Significant Third Party Tenants (3)	Leased(3)
212	San Antonio (4)	TX		50%	Sears		213,100		187,800		20,700		4,600	Long Horn Steakhouse, Orvis, Jared's, Shake Shack		97.8	%
213	Shepherd	TX		50%	Sears		201,700		201,700		—		—	n/a		100.0	%
214	Valley View	TX		100%	Sears		235,000		229,200		5,800		—	Jared Galleria of Jewelry		100.0	%
215	Westwood	TX		50%	Sears		215,000		215,000		—		—	n/a		100.0	%
216	Layton (6)	UT		50%	Kmart		176,700		90,000		60,300		26,400	Arby's,Vasa Fitness		85.1	%
217	West Jordan (4)	UT		50%	Sears		205,400		158,800		46,600		—	Burlington Stores		100.0	%
218	Alexandria	VA		50%	Sears		262,100		252,500		9,600		—	Lands' End		100.0	%
219	Chesapeake	VA		50%	Sears		169,400		169,400		—		—	n/a		100.0	%
220	Fairfax (4)	VA		50%	Sears		219,900		157,300		51,600		11,000	Lands' End, Dave & Busters		95.0	%
221	Hampton	VA		50%	Sears		245,000		245,000		—		—	n/a		100.0	%
222	Virginia Beach	VA		50%	Sears		197,300		86,900		110,400		—	BB&T, DSW, The Fresh Market, Nordstrom Rack,  REI, Smokey Bones		100.0	%
223	Warrenton	VA		50%	Sears		121,000		113,900		7,100		—	Lands' End		100.0	%
224	Redmond	WA		50%	Sears		267,400		255,900		11,500		—	Lands' End, Red Robin		100.0	%
225	Vancouver	WA		50%	Sears		129,700		124,900		4,800		—	Lands' End		100.0	%
226	Yakima (5)	WA	n/a		Kmart		117,300		97,300		—		20,000	n/a		82.9	%
227	Greendale	WI		50%	Sears		238,400		238,400		—		—	n/a		100.0	%
228	Madison (4)	WI		50%	Sears		138,300		82,200		56,100		—	Dave & Busters, Total Wine & More		100.0	%
229	Platteville (6)	WI		50%	Kmart		94,800		94,800		—		—	n/a		100.0	%
230	Charleston	WV		50%	Kmart		105,600		105,600		—		—	n/a		100.0	%
231	Elkins (6)	WV		50%	Kmart		99,600		94,900		—		4,700	n/a		95.3	%
232	Scott Depot	WV		50%	Kmart		89,800		89,800		—		—	n/a		100.0	%
233	Casper	WY		50%	Kmart		91,400		91,300		100		—	n/a		100.0	%
234	Gillette	WY		50%	Kmart		94,600		94,600		—		—	n/a		100.0	%
235	Riverton (5)	WY	n/a		Kmart		94,800		94,800		—		—	n/a		100.0	%
	Total - Wholly-Owned Properties						36,794,900		31,284,900		5,218,700		291,300			99.2	%

(1) Properties with 50% recapture rights are subject to the Company's right to recapture approximately 50% of the space within a store (subject to certain exceptions).  In addition, the Company has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the stores and all outparcels or outlots, as well as certain portions of parking areas and common areas.  These properties were referred to as "Type II" properties in the Company's Form S-11 dated June 8, 2015.

(2) In addition to the 50% recapture rights described above, properties with 100% recapture rights are subject to the Company's right to recapture the entire space within a store for a specified fee.  These properties were referred to as "Type I" properties in the Company's Form S-11 dated June 8, 2015.

(3) Based on signed leases as of December 31, 2016, including SNO leases.

(4) As of December 31, 2016, the Company had exercised certain recapture rights with respect to this property.

(5) Sears Holdings exercised its termination rights with respect to this property in September 2016 and vacated the property in January 2017.

(6) Sears Holdings notified the Company of its intent to exercise its termination rights with respect to this property in January 2017 and expects to vacate the property in April 2017.

(7) Property is subject to a ground lease.

- 29 -

JV Properties
			Recapture			GLA (3)
	City	State	Rights (1)(2)		Sears or Kmart	Total		Sears Holdings		Third Parties		Vacant		Third Party Tenants (3)	Leased(3)
1	Bakersfield (4)	CA		50%	Sears		204,200		204,200		—		—	n/a		100	%
2	Pembroke Pines (4)(5)	FL		50%	Sears		149,000		102,200		46,800		—	AMC Theatres		100	%
3	Oak Brook (4)	IL		50%	Sears		314,000		204,600		109,400		—	Ballard Designs, Lands' End, Pinstripes, Walter E Smithe Furniture, Williams-Sonoma		100	%
4	Natick (4)(5)	MA		50%	Sears		190,600		176,200		14,400		—	Lands' End		100	%
5	Columbia (4)	MD		50%	Sears		149,000		142,000		7,000		—	Lands' End		100	%
6	Minnetonka	MN		50%	Sears		205,000		199,200		5,800		—	Lands' End		100	%
7	Paramus (4)	NJ		100%	Sears		192,400		177,200		15,200		—	Lands' End		100	%
8	Albuquerque (4)	NM		50%	Sears		166,800		72,400		43,800		50,600	Bath & Body Works/White Barn Candle, Container Store		70	%
9	Staten Island (4)	NY		50%	Sears		188,800		82,800		106,000		—	Container Store, Lands' End, Primark		100	%
10	Norman (5)	OK		50%	Sears		66,800		66,800		—		—	n/a		100	%
11	Frisco	TX		50%	Sears		163,000		163,000		—		—	n/a		100	%
12	Lynnwood (4)	WA		100%	Sears		177,600		170,600		7,000		—	Lands' End		100	%
13	Chandler	AZ		50%	Sears		141,600		141,600		—		—	n/a		100	%
14	Glendale	AZ		50%	Sears		125,000		125,000		—		—	n/a		100	%
15	Cerritos	CA		50%	Sears		277,600		277,600		—		—	n/a		100	%
16	Modesto	CA		50%	Sears		148,600		148,600		—		—	n/a		100	%
17	Danbury	CT		50%	Sears		178,400		108,400		70,000		—	Primark		100	%
18	Deptford	NJ		50%	Sears		191,800		183,800		8,000		—	Lands' End		100	%
19	Freehold	NJ		50%	Sears		139,400		72,200		67,200		—	Primark		100	%
20	Portland	OR		50%	Sears		220,000		205,800		14,200		—	Lands' End		100	%
21	Lubbock	TX		50%	Sears		150,600		150,600		—		—	n/a		100	%
22	Brea	CA		50%	Sears		168,200		163,800		4,400		—	Lands' End		100	%
23	Santa Rosa	CA		50%	Sears		165,400		161,600		3,800		—	Lands' End		100	%
24	Burlington	MA		50%	Sears		271,200		184,800		86,400		—	Lands' End, Primark		100	%
25	Ann Arbor	MI		50%	Sears		170,600		156,400		14,200		—	Lands' End		100	%
26	Toms River	NJ		50%	Sears		109,200		109,200		—		—	n/a		100	%
27	Nanuet	NY		50%	Sears		221,400		213,800		7,600		—	Lands' End		100	%
28	Tulsa	OK		50%	Sears		150,200		150,200		—		—	n/a		100	%
29	Pittsburgh	PA		50%	Sears		176,600		159,600		17,000		—	Lands' End		100	%
30	Austin	TX		50%	Sears		164,600		164,600		—		—	n/a		100	%
31	Midland	TX		50%	Sears		116,600		116,600		—		—	n/a		100	%
	Total - JV Properties						5,454,200		4,755,400		648,200		50,600			99.1	%
(1)  Properties with 50% recapture rights are subject to the JVs' right to recapture approximately 50% of the space within a store (subject to certain exceptions).  In addition, the JVs have the right to recapture any        automotive care centers which are free-standing or attached as “appendages” to the stores and all outparcels or outlots, as well as certain portions of parking areas and common areas.
(2)  In addition to the 50% recapture rights described above, properties with 100% recapture rights are subject to the JVs; right to recapture the entire space within a store for a specified fee.
(3)  Based on signed leases as of December 31, 2016, including SNO leases.
(4)  As of December 31, 2016, the JVs had exercised certain recapture rights with respect to this property or announced plans to exercise such rights according to a specific schedule.
(5)  Property is subject to a lease or ground lease.
266	Grand Total - All Properties						42,249,100		36,040,300		5,866,900		341,900			99.2	%
266	Grand Total - All Properties    (at share)						39,522,000		33,662,600		5,542,800		316,600			99.2	%

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The following table sets forth information regarding the geographic diversification of our portfolio, with JV Properties presented at our proportional share, based on signed leases as of December 31, 2016, including SNO leases:

(in thousands except property count and PSF data)
	Number of		Annual		% of Total			Rent
State	Properties		Rent		Annual Rent			PSF
California		43	$	42,937		18.5	%	$	6.29
Florida		27		27,601		11.9	%		6.71
New York		12		14,370		6.2	%		7.35
Texas		17		12,527		5.4	%		4.99
Illinois		12		10,467		4.5	%		4.63
New Jersey		7		10,880		4.7	%		9.91
Pennsylvania		8		8,462		3.7	%		9.38
Virginia		6		7,854		3.4	%		6.52
Michigan		10		7,556		3.3	%		4.07
Puerto Rico		6		6,518		2.8	%		7.23
Total Top 10		148	$	149,172		64.4	%	$	6.31
Other (1)		118		82,503		35.6	%		5.29
Total		266	$	231,675		100.0	%	$	5.91

(1) Includes 40 states.

The Master Lease and JV Master Leases

The Master Lease

The Master Lease is a unitary, non-divisible lease as to all properties, with Sears Holdings’ obligations as to each property cross-defaulted with all obligations of Sears Holdings with respect to all other properties. The Master Lease generally is a triple net lease with respect to all space which is leased thereunder to Sears Holdings, subject to proportional sharing by Sears Holdings for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by Sears Holdings and other space occupied by unrelated third-party tenants in the same or other buildings pursuant to third-party leases, space which is recaptured pursuant to the Company recapture rights described below and all other space which is constructed on the properties. Under the Master Lease, Sears Holdings is required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they are in occupancy.

The Master Lease has an initial term of 10 years and contains three options for five-year renewals of the term and a final option for a four-year renewal. In each of the initial and first two renewal terms, base rent will be increased by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, rent will be set at the commencement of the renewal term at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year.

The Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by Sears Holdings at the 224 Wholly Owned Properties initially included in the Master Lease (subject to certain exceptions).  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of the parking areas and common areas.  Upon exercise of this recapture right, we will generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears Holdings space and can reconfigure and rent the recaptured space to third-party tenants on potentially superior terms determined by us and for our own account.  We also have the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings, after which we expect to be able to reposition and re-lease those stores on potentially superior terms determined by us and for our own account.  While we will be permitted to exercise our recapture rights all at once or in stages as to any particular property, we will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.

The Master Lease also provides for certain rights of Sears Holdings to terminate the Master Lease with respect to Wholly Owned Properties that cease to be profitable for operation by Sears Holdings (those stores that possess Earnings Before Interest, Taxes, Depreciation, Amortization and Rent (or “EBITDAR”) for the 12 month period ending as of the last day of the most recently completed fiscal quarter of Sears Holdings that is less than the base rent for that store) after the first lease year.  In order to terminate the Master Lease with respect to a certain property, Sears Holdings must make a payment to us of an amount equal to one year of rent

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(together with taxes and other expenses) with respect to such property.  Sears Holdings’ termination right is limited to terminating the Master Lease with respect to properties representing up to 20% of the aggregate annual rent payment under the Master Lease with respect to all properties in any lease year.

The JV Master Leases

The JV Master Leases are unitary, non-severable leases for all JV Properties in the applicable JV Master Lease and are generally triple net leases with respect to the space occupied by Sears Holdings, subject to Sears Holdings’ proportionate sharing of taxes and other operating expenses with respect to properties that have third-party tenants of the GGP JV, the Simon JV and the Macerich JV, as applicable. The JV Master Leases each have an initial term of 10 years, and in each case Sears Holdings has three separate, consecutive five-year renewal options to extend the initial term. For each JV Master Lease in each of the initial and renewal terms, after the third lease year of the initial term, the annual base rent for the remainder of the term and all renewal terms will be increased by 2.0% per annum for each lease year over the rent for the immediately preceding lease year.

Each JV Master Lease provides the GGP JV, the Simon JV and the Macerich JV, as applicable, with the right to recapture (without additional payment) up to approximately 50% of the space occupied by Sears Holdings under such JV Master Lease (subject to certain exceptions).  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the JV Properties, all outparcels or outlots, and certain portions of parking areas and common areas at the JV Properties, in each case under such JV Master Lease (other than with respect to one property owned by the Macerich JV). The Simon JV has the additional right to recapture 100% of the space occupied by Sears Holdings at some of the JV Properties under its JV Master Lease for termination fees as provided in such JV Master Lease.

Each JV Master Lease also provides Sears Holdings with the right to terminate the lease with respect to underperforming stores upon payment of a termination fee calculated as provided in the JV Master Lease.  In the case of the JV Properties owned by the GGP JV, the Simon JV and the Macerich JV, Sears Holdings’ termination right is limited to no more than four JV Properties, three JV Properties and three JV Properties, respectively, in any lease year.

Except with respect to the rent amounts and the properties covered, the general formats of the JV Master Leases are similar to one another and to the Master Lease.

Tenant Summary

The following table sets forth information regarding our tenants and our leases, with JV Properties presented at our proportional share, based on signed leases as of December 31, 2016, including SNO leases:

(in thousands except number of leases and PSF data)
	Numberof		Leased		% of Total			Annual		% of Total			Annual
Tenant	Leases		GLA		Leased GLA			Rent		Annual Rent			Rent PSF
Sears Holdings (1)		251		33,663		85.9	%	$	148,167		63.9	%	$	4.40
In-Place Third-Party Leases		243		3,325		8.5	%		42,356		18.3	%		12.74
SNO Third-Party Leases		77		2,218		5.7	%		41,152		17.8	%		18.55
Sub-Total Third-Party Leases		320		5,543		14.1	%		83,508		36.1	%		15.07
Total		571		39,206		100.0	%	$	231,675		100.0	%	$	5.91

(1) Leases reflects number of properties subject to the Master Lease and JV Master Leases.

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The following table lists the top tenants at our properties, including JV Properties presented at our proportional share, based on signed leases as of December 31, 2016, including SNO leases:

(dollars in thousands)
	Numberof		Annual		% of Total
Tenant	Leases		Rent		AnnualRent
Sears Holdings (1)		251	$	148,167		63.9	%
Lands' End (2)		69		6,674		2.9	%
Dave & Busters		5		5,961		2.6	%
Primark		5		5,544		2.4	%
At Home		9		5,214		2.3	%
Nordstrom Rack		6		4,385		1.9	%
Burlington Stores		6		4,075		1.8	%
Dick's Sporting Goods		3		3,498		1.5	%
Cinemark		3		3,240		1.4	%
PetSmart		5		2,391		1.0	%
AMC		2		2,217		1.0	%
Floor & Décor		2		1,691		0.7	%
Saks OFF 5th		2		1,595		0.7	%
Bed, Bath & Beyond		2		1,338		0.6	%
BJ's Brewhouse		5		1,213		0.5	%
Whole Foods		2		1,143		0.5	%

(1) Leases reflects number of properties subject to the Master Lease and JV Master Leases.

(2) Lease agreements between Sears Holdings and Lands’ End were retained as a sublease under the Master Lease.  However, Sears Holdings pays us additional rent under the Master Lease (in lieu of base rent attributable to the Lands’ End space leased to Sears Holdings under the Master Lease) an amount equal to rent payments (including expenses) required to be made by Lands’ End under the Lands’ End leases.

Lease Expirations

The following table sets forth a summary schedule of lease expirations for signed leases, including SNO leases, with JV Properties presented at our proportional share, as of December 31, 2016.  The information set forth in the table assumes that no tenants exercise renewal options or early termination rights:

(in thousands except number of leases)
	Numberof		Leased		% of Total			Annual		% of Total
Year	Leases (1)		GLA		LeasedGLA			Rent		AnnualRent
Month-to-Month		21		82		0.2	%	$	1,033		0.5	%
2017		26		174		0.4	%		2,472		1.1	%
2018		37		223		0.6	%		4,113		1.8	%
2019		40		590		1.5	%		4,461		1.9	%
2020		40		410		1.0	%		3,815		1.6	%
2021		15		254		0.7	%		2,670		1.2	%
2022		4		18		0.1	%		810		0.3	%
2023		7		347		0.9	%		6,221		2.7	%
2024		3		54		0.1	%		654		0.3	%
2025		255		33,927		86.5	%		151,402		65.4	%
2026		17		465		1.2	%		8,398		3.6	%
Thereafter		29		444		1.1	%		4,474		1.9	%
SNO Leases		77		2,218		5.7	%		41,152		17.8	%
Total		571		39,206		100.0	%	$	231,675		100.0	%

(1) In 2025, includes 251 properties subject to the Master Lease and JV Master Leases.

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ITEM 3. LEGAL PROCEEDINGS

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

Litigation Relating to the Transaction

In May and June of 2015, four purported Sears Holdings shareholders filed lawsuits in the Delaware Court of Chancery challenging the Transaction, which lawsuits have since been consolidated into a single action captioned In re Sears Holdings Corporation Stockholder and Derivative Litigation, Consol. C.A. No. 11081-VCL (the “Action”).  On October 15, 2015, plaintiffs filed a verified consolidated stockholder derivative complaint in the Action against the individual members of Sears Holdings’ Board of Directors, ESL Investments, Inc. (together with its affiliates, “ESL”), Sears Holdings’ CEO, Fairholme Capital Management L.L.C. (“FCM”), and Seritage.  On July 12, 2016, the plaintiffs filed a verified consolidated amended stockholder derivative complaint (the “Amended Complaint”) against the same defendants and asserting substantially the same claims as set forth in the complaint filed in October 2015.  The plaintiffs have brought the Action derivatively on behalf of Sears Holdings, which is named as a nominal defendant, and allege that the Sears Holdings directors, as well as ESL and Edward S. Lampert (in their capacity as the alleged controlling stockholder of Sears Holdings), breached their fiduciary duties to Sears Holdings shareholders by selling the Wholly Owned Properties to Seritage at a price that was unfairly low and was the result of a process that allegedly was flawed.  The Amended Complaint also alleges that Seritage and FCM aided and abetted these alleged fiduciary breaches.  Among other forms of relief, the Amended Complaint seeks damages in unspecified amounts.  In October 2016, following mediation, the parties reached an agreement-in-principle to settle the Action, which ultimately was reflected in a definitive Stipulation and Agreement of Settlement, Compromise and Release executed on February 8, 2017.  Pursuant to the settlement, (a) the defendants and the D&O insurers for the individual members of the Sears Holdings’ Board of Directors have agreed to pay (assuming satisfaction of all conditions) $40 million, of which Seritage has agreed to pay $19 million; and (b) all defendants will receive customary releases.  The Delaware Court of Chancery has scheduled a hearing on May 9, 2017, at which it will determine whether to approve the settlement, after customary notice to Sears Holding stockholders and an opportunity for them to object.  The defendants continue to deny the claims asserted and have entered into the settlement solely to avoid the burden, expense, distraction, and inherent risk in and of litigation.  While there can be no assurance that the settlement agreement will result in a definitive, court-approved agreement, the Company determined that its liability is both probable and estimable and recorded a litigation charge of $19.0 million during the year ended December 31, 2016.  The Company believes that the plaintiffs’ claims and allegations against the Company are legally without merit and, if the settlement is not approved, intends to contest the Action vigorously.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s Class A common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “SRG”.  The Company's Class A common stock began trading on July 6, 2015.  The following table presents the high and low sales prices for our Class A common stock on the NYSE and the dividends declared per share for the periods indicated:

	Stock Price				Dividends
Quarter Ended	High		Low		Declared
2016
December 31	$	50.76	$	42.48	$	0.25
September 30		51.37		44.50		0.25
June 30		56.47		42.91		0.25
March 31		51.19		37.51		0.25
2015
December 31	$	42.50	$	33.84	$	0.50
September 30		44.00		36.97		—

The following graph provides a comparison, from July 6, 2015 through December 31, 2016, of the percentage change in the cumulative total shareholder return (assuming reinvestment of dividends) on $100 invested in each of Class A shares of the Company, the Standard & Poor's ("S&P") 500 Index and the SNL US REIT Index, an industry index of publicly-traded REITs (including the Company).

Data for the S&P 500 Index and the SNL US REIT Index were provided by SNL Financial LC.

Index		7/6/15		9/30/15			12/31/15			3/31/16		6/30/16		9/30/16		12/31/16
Seritage Growth Properties	Cum $		100		126			138			169		168		171		144
	Return %				25.93			37.64			68.93		68.49		71.33		44.39
S&P 500	Cum $		100		93			100			101		104		108		112
	Return %				(6.72	)		(0.15	)		1.20		3.68		7.67		11.79
SNL US REIT Equity	Cum $		100		99			106			113		121		119		116
	Return %				(1.12	)		6.28			12.73		20.97		19.47		15.73

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On February 24, 2017, the reported closing sale price per share of our Class A common stock on the NYSE was $47.22.

As of February 24, 2017, there were 27,942,572 Class A common shares issued and outstanding which were held by approximately 148 shareholders of record.  The number of shareholders of record does not reflect persons or entities that held their shares in nominee or “street” name.

In addition, as of February 24, 2017, there were 1,451,336 Class B non-economic common shares issued and outstanding, 5,750,185 Class C non-voting common shares issued and outstanding and 22,081,506 outstanding Operating Partnership units held by limited partners other than the Company.

The Class B non-economic common shares have voting rights, but do not have economic rights and, as such, do not receive dividends and are not included in earnings per share computations.

The Class C non-voting common shares have economic rights, but do not have voting rights.  Upon any transfer of a Class C non-voting common share to any person other than an affiliate of the holder of such share, such share shall automatically convert into one Class A common share.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2016, a total of 1,035,950 net shares of Class C non-voting common shares were converted to Class A common shares.

The Operating Partnership units are generally exchangeable into shares of Class A common stock on a one-for-one basis.

The following table provides information with respect to the Company’s equity compensation plan at December 31, 2016:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)			(b)			(c) (1)
Equity compensation plans approved    by security holders (1)		37,692	(2)	n/a		(3)		2,988,289	(4)
Equity compensation plans not    approved by security holders		—			—			—
Total		37,692			—			2,988,289

(1) Consists of restricted stock units granted under the Seritage Growth Properties 2015 Share Plan.

(2) Full number represents RSUs previously granted and that remain unvested as of December 31, 2016.

(3) Weighted average exercise price does not apply to RSUs.

(4) Shares remaining available for future issuance under the Seritage Growth Properties 2015 Share Plan, taking into account 216,835 shares of restricted stock previously granted and 44,876 shares subject to grants of RSUs previously granted (including those that remain unvested reported in column (a)).

We currently intend to pay quarterly distributions in cash.  However, the timing, amount and composition of all distributions will be made by the Company at the discretion of its Board of Trustees.  Such distributions will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants, applicable law and other factors as the Board of Trustees of Seritage deems relevant.

We have elected to be treated as a REIT for U.S. Federal income tax purposes in connection with the filing of our first U.S. federal tax return and intend to maintain this status in future periods.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of our ordinary taxable income and to either distribute capital gains to shareholders, or pay corporate income tax on the undistributed capital gains.  A REIT will generally not pay federal taxes if it distributes 100% of its capital gains and ordinary income.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data which should be read in conjunction with the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report:

				July 7, 2015
				(Date Operations
	Year Ended			Commenced) to
	December 31, 2016			December 31, 2015
Operating Data
Total revenue	$	248,674		$	113,571
Total expenses		279,121			122,944
Equity in income of unconsolidated joint ventures		4,646			4,772
Net loss		(91,009	)		(38,803	)
Net loss attributable to common shareholders		(51,558	)		(22,338	)
Net loss per share attributable to Class A and Class C    common shareholders - Basic and diluted	$	(1.64	)	$	(0.71	)
Dividends declared per share		1.00			0.50
Total NOI (1)	$	190,492		$	89,493
EBITDA (1)		171,324			67,496
Adjusted EBITDA (1)		186,815			90,732
Funds from Operations ("FFO") (1)		106,475			36,061
Company FFO (1)		127,326			61,954
Cash Flow Data (2)
Operating activities	$	92,425		$	17,671
Investing activities		(52,780	)		(2,730,399	)
Financing activities		(50,486	)		2,775,595
Balance Sheet Data
Investment in real estate, net	$	1,644,952		$	1,639,275
Total assets		2,712,237			2,833,359
Mortgage loans payable, net		1,166,871			1,142,422
Total liabilities		1,287,926			1,263,282
Non-controlling interests		619,754			683,382
Total equity		1,424,311			1,570,077
Other Data (3)
Number of properties		266			266
Gross leasable area (sq. ft.)		39,522			39,743
Percentage leased		99.2	%		99.4	%
Annual rent	$	231,675		$	202,938
Rent PSF	$	5.91		$	5.13

(1) Total NOI, EBITDA, Adjusted EBITDA, FFO and Company FFO are supplemental, non-GAAP financial measurements and do not represent net income as defined by GAAP.  See pages 50-53.

(2) Cash flow data only represents the Company's consolidated cash flows as defined by GAAP and as such, operating cash flow does not include the cash received from our unconsolidated joint ventures, except to the extent of operating distributions from our unconsolidated joint ventures.

(3) Other than number of properties, data based on signed leases as of December 31, 2016, including SNO leases.  JV Properties are presented at our proportional share.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section contains forward-looking statements that involve risks and uncertainties.  Our actual results may vary materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in "Risk Factors" and the other matters set forth in this Annual Report.  See "Cautionary Statement Regarding Forward-Looking Statements."

All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report.  You should read this discussion in conjunction with our Consolidated Financial Statements, the notes thereto and other financial information included elsewhere in this Annual Report.  Our financial statements are prepared in accordance with GAAP.  Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") have the same meanings as in such Notes.

Overview

We are principally engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail real estate throughout the United States.  As of December 31, 2016, our portfolio included over 42.2 million square feet of GLA, consisting of 235 Wholly Owned Properties totaling over 36.8 million square feet of GLA across 49 states and Puerto Rico, and interests in 31 JV Properties totaling over 5.4 million square feet of GLA across 17 states.

As of December 31, 2016, we leased a substantial majority of the space in our portfolio at all but 15 of the Wholly Owned Properties (such 15 properties, the “Third-Party Properties”) to Sears Holdings under a Master Lease agreement, with the remainder of such space leased to third-party tenants.  The Third-Party Properties, which do not contain a Sears Holdings store or have any space leased to Sears Holdings, are leased solely to third-party tenants.  A substantial majority of the space at the JV Properties is also leased to Sears Holdings by, as applicable, the GGP JV, the Simon JV or the Macerich JV in each case under a separate JV Master Lease.

We generate revenues primarily by leasing our properties to tenants, including both Sears Holdings and third-party tenants, who operate retail stores (and potentially other uses) in the leased premises, a business model common to many publicly traded REITs.  In addition to revenues generated under the Master Lease through rent payments from Sears Holdings, we generate revenue through leases to third-party tenants under existing and future leases for space at our properties.

The Master Lease provides us with the right to recapture up to approximately 50% of the space occupied by Sears Holdings at the 224 Wholly Owned Properties initially included in the Master Lease (subject to certain exceptions and limitations).  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, and all outparcels or outlots and certain portions of parking areas and common areas.  Upon exercise of this recapture right, we will generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears Holdings space and can reconfigure and rent the recaptured space to third-party tenants on potentially superior terms determined by us and for our own account.  We also have the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings, after which we expect to be able to reposition and re-lease those stores on potentially superior terms determined by us and for our own account.

With respect to the JV Properties, each JV Master Lease provides for similar recapture rights as the Master Lease governing the Company’s Wholly Owned Properties.

Our primary objective is to create value for our shareholders through the re-leasing and redevelopment of the majority of our Wholly Owned Properties and JV Properties.  In doing so, we expect to meaningfully grow NOI and diversify our tenant base while transforming our portfolio from one with a single-tenant orientation to one comprised predominately of first-class, multi-tenant shopping centers.  In order to achieve our objective, we intend to execute the following strategies:

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

• Maximize 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.

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Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties. This revenue generally includes fixed base rents and recoveries of expenses that we have incurred and that we pass through to the individual tenants, in each case as provided in the respective leases.

Our primary cash expenses consist of our property operating expenses, general and administrative expenses, interest expense and construction and development related costs.  Property operating expenses include: real estate taxes, repairs and maintenance, management expenses, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense is primarily on our mortgage loan payable.  In addition, we incur substantial non-cash charges for depreciation and amortization on our properties and related intangible assets and liabilities resulting from the Transaction.

We did not have any revenues or expenses until we completed the Transaction on July 7, 2015.

Rental Income

For the year ended December 31, 2016, the Company recognized total rental income of $186.4 million as compared to $86.6 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  The $99.8 million increase was primarily due to additional days in the reporting period, new rents from completed redevelopments and the annual increase in base rent under the Master Lease, offset by reduced base rent under the Master Lease as a result of recapture activity initiated by the Company.  In addition, the Company recorded $5.3 million of termination fee income as a result of the termination of the Master Lease at 17 properties by Sears Holdings.

Straight-line rent for the twelve months ended December 31, 2016 was $12.9 million and other adjustments were approximately $0.9 million. For the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015, straight-line rent was $8.3 million and other adjustments were approximately $0.5 million.  The $4.6 million increase in straight-line rent was primarily due to additional days in the reporting period, offset by the amortization of accrued straight-line rents that are deemed uncollectable as result of recapture and termination activity initiated by the Company and Sears Holdings, respectively.

A significant portion of our earnings are derived from rental payments made by Sears Holdings under the Master Lease.  For the year ended December 31, 2016, and excluding the effect of straight-line rent, the rental income attributable directly to Sears Holdings was $133.2 million, or approximately 79.5% of total rental income earned in the period.  For the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015, the comparable rental income attributable directly to Sears Holdings was $64.8 million, or approximately 83.5% of total rental income earned in the period.

In addition to revenue generated under the Master Lease through rent payments from Sears Holdings, we generate revenue through direct leases to third-party tenants for space at our properties.  For the year ended December 31, 2016, and excluding the effect of straight-line rent, the rental income attributable to third-party tenants was $34.3 million, or approximately 20.5% of total rental income earned in the period.  For the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015, the comparable rental income attributable to third-party tenants was $12.9 million, or approximately 16.5% of total rental income earned in the period.

On an annual basis, and taking into account all signed leases, including those which have not yet commenced rental payments, rental income attributable to third-party tenants represented approximately 36.1% of total annual base rental income as of December 31, 2016 as compared to 24.0% as of December 31, 2015.

The increase in rental income attributable to third-party tenants, and the reduction in rental income attributable directly to Sears Holdings, are driven by the Company’s leasing and redevelopment activity, including signing leases with new, third-party tenants and recapturing space from Sears Holdings.

Tenant Reimbursements and Property Operating Expenses

Pursuant to the provisions of the Master Lease and many third-party leases, the Company is entitled to be reimbursed for certain property related expenses.  For the year ended December 31, 2016, the Company recorded tenant reimbursement income of $62.3 million, compared to property operating expenses and real estate tax expense aggregating $65.2 million.  For the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015, the Company recorded tenant reimbursement income of $26.9 million, compared to property operating expenses and real estate tax expense aggregating $28.7 million.  The increase in both tenant reimbursement income and property operating expenses was primarily due to additional days in the reporting period.

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Depreciation and Amortization Expenses

Depreciation and amortization expenses consist of depreciation of real property, depreciation of furniture, fixtures and equipment, and amortization of certain lease intangible assets.  For the year ended December 31, 2016, the Company incurred depreciation and amortization expenses of $177.1 million as compared to depreciation and amortization expenses of $65.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  The increase of $111.2 million was primarily due to additional days in the reporting period, as well as approximately $40.4 million of accelerated amortization related to certain lease intangible assets.  Accelerated amortization results from the recapture of space from, or the termination of space by, Sears Holdings.  Such recaptures and terminations are deemed lease modifications and require related lease intangibles to be amortized over the shorter of the shortened lease term or the remaining useful life of the asset.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including stock-based compensation, professional fees, office expenses, including information technology, and other overhead expenses.  For the year ended December 31, 2016, the Company incurred general and administrative expenses of $17.5 million compared to general and administrative expenses of $10.0 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  The increase in general and administrative expenses was primarily due to additional days in the reporting period and the hiring of additional personnel, offset by reduced up-front personnel costs related to the hiring of certain employees. The period from July 7, 2015 (Date Operations Commenced) to December 31, 2015 included $1.9 million of such up-front personnel costs.

Litigation Charge

In October 2016, an agreement-in-principle was reached to settle a legal action to which we were a party, which agreement ultimately was reflected in a definitive Stipulation and Agreement of Settlement, Compromise and Release executed on February 8, 2017 (see Note 10).  The defendants, including the Company, continue to deny the claims asserted and have entered into the settlement solely to avoid the burden, expense, distraction, and inherent risk in and of litigation.  While there can be no assurance that the settlement agreement will result in a definitive, court-approved agreement, we have determined that the Company’s liability is both probable and estimable.  Accordingly, we recorded a charge of $19.0 million, representing the Company’s share of the settlement as contemplated, during the year ended December 31, 2016.

Acquisition-Related Expenses

The Company incurred acquisition-related expenses, primarily remaining legal fees, of less than $0.1 million during the year ended December 31, 2016 as compared to acquisition-related expenses of $18.4 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  These costs consisted of due diligence, legal, consulting and other similar expenses related to the Transaction.

Interest Expense

For the year ended December 31, 2016, the Company incurred $63.6 million of interest expense (net of amounts capitalized) as compared to interest expense of $30.5 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  Amortization of debt issuance costs was approximately $5.4 million for the year ended December 31, 2016 and $2.7 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.

The increase in interest expense was driven primarily by additional days in the reporting period, as well as higher average borrowings under the Future Funding Facility (as defined below) and higher average LIBOR rates.

Unrealized Loss on Interest Rate Cap

For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap associated with its Mortgage Loan as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  As of December 31, 2016, the interest rate cap had a fair value of approximately $0.7 million as compared to $2.1 million at December 31, 2015.

Liquidity and Capital Resources

Property rental income is our primary source of cash and is dependent on a number of factors, including occupancy levels and rental rates, as well as our tenants’ ability to pay rent.  Our primary uses of cash include payment of operating expenses, debt service,

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reinvestment in and redevelopment of properties, and distributions to shareholders and unitholders.  We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $52.0 million of unrestricted cash, $87.6 million of restricted cash, and $80.0 million of borrowing capacity under our Future Funding Facility as of December 31, 2016, as well as $100.0 million of availability under the $200.0 million Unsecured Term Loan (as defined below) we entered into subsequent to December 31, 2016.  We may raise additional capital through the public or private issuance of debt securities, common or preferred equity or other instruments convertible into or exchangeable for common or preferred equity, as well as through asset sales or joint ventures.

Mortgage Loans Payable

On July 7, 2015, pursuant to the Transaction, the Company entered into a mortgage loan agreement (the “Mortgage Loan Agreement”) and mezzanine loan agreement (collectively, the “Loan Agreements”) providing for term loans in an initial principal amount of approximately $1,161 million (collectively, the “Mortgage Loans”) and a $100 million future funding facility (the “Future Funding Facility”), which we expect to be available to us to finance the redevelopment of properties in our portfolio from time to time, subject to satisfaction of certain conditions.  As of December 31, 2016, the total principal amounts outstanding under the Mortgage Loans and the Future Funding Facility were $1,161 million and $20 million, respectively, and $80 million remained available under the Future Funding Facility for future draws by the Company.

Interest under the Mortgage Loans and Future Funding Facility is due and payable on the payment dates, and all outstanding principal amounts are due when the loans mature on the payment date in July 2019, pursuant to the Loan Agreements.  The Company has two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions.  Borrowings under the Mortgage Loans and Future Funding Facility bear interest at the London Interbank Offered Rates (“LIBOR”) plus, as of December 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis.  The weighted-average interest rate for the Mortgage Loans and Future Funding Facility for the year ended December 31, 2016 was 5.24%.  For the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the weighted-average interest rate for the Mortgage Loans was 4.96%.

The Loan Agreements contain a yield maintenance provision for the early extinguishment of the debt before March 9, 2018.  

The Mortgage Loans and Future Funding Facility are secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs.  The Loan Agreements contain customary covenants for a real estate financing, including restrictions that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects.  Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds.

All obligations under the Loan Agreements are non-recourse to the borrowers and the pledgors of the JV Interests and the guarantors thereunder, except that (i) the borrowers and the guarantors will be liable, on a joint and several basis, for losses incurred by the lenders in respect of certain matters customary for commercial real estate loans, including misappropriation of funds and certain environmental liabilities and (ii) the indebtedness under the Loan Agreements will be fully recourse to the borrowers and guarantors upon the occurrence of certain events customary for commercial real estate loans, including without limitation prohibited transfers, prohibited voluntary liens, and bankruptcy.  Additionally, the guarantors delivered a limited completion guaranty with respect to future redevelopments undertaken by the borrowers at the properties, and the Company must maintain (i) a net worth of not less than $1 billion and (ii) a minimum liquidity of not less than $50.0 million, throughout the term of the Loan Agreements.

The Company has incurred $22.3 million of debt issuance and other costs related to the Mortgage Loans and Future Funding Facility which are recorded as a direct deduction from the carrying amount of the Mortgage Loans and Future Funding Facility and amortized over the term of the Loan Agreements.  As of December 31, 2016, the unamortized balance of the Company’s debt issuance costs was $14.3 million as compared to $18.8 million as December 31, 2015.

In November 2016, the Company and the servicer for our Mortgage Loans entered into amendments to our Loan Agreements to resolve a disagreement regarding one of the cash flow sweep provisions in our Loan Agreements.  The principal terms of these amendments are that the Company has (i) posted $30 million, and will post $3.3 million on a monthly basis, to a redevelopment project reserve account, which amounts may be used by the Company to fund redevelopment activity and (ii) extended the spread maintenance provision for prepayment of the loan by two months through March 9, 2018 (with the spread maintenance premium for the second month at a reduced amount).  As a result of this amendment and the resolution of the related disagreement, no cash flow sweep was imposed.

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The Company believes it is currently in compliance with all material terms and conditions of the Loan Agreements.

Unsecured Term Loan

On February 23, 2017 (the “Closing Date”), the Operating Partnership, as borrower, and the Company, as guarantor, entered into a $200.0 million senior unsecured delayed draw term loan facility (the “Unsecured Term Loan”) with JPP, LLC (“JPP”) and JPP II, LLC, as lenders (collectively, the “Initial Lenders”), and JPP, as administrative agent (the “Administrative Agent”).

Loans under the Unsecured Term Loan (which was undrawn on the Closing Date) may be requested by the Operating Partnership at any time from the Closing Date until thirty days prior to the stated maturity date, upon five business days prior notice to the Administrative Agent.  The total commitments of the lenders under the Unsecured Term Loan is $200.0 million, provided, that, the maximum draw amount under the Unsecured Term Loan through April 30, 2017 is $100.0 million, which amount increases to $150.0 million on May 1, 2017 and $200.0 million on September 1, 2017, in each instance so long as no cash flow sweep period is then in effect and continuing as of such date under the Company’s Mortgage Loan Agreement.  Amounts drawn under the Unsecured Term Loan and repaid may not be redrawn.  

The Unsecured Term Loan will mature the earlier of (i) December 31, 2017 and (ii) the date on which the outstanding indebtedness under the Loan Agreements are repaid or refinanced in full.  The Unsecured Term Loan may be prepaid at any time in whole or in part, without any penalty or premium.    

The principal amount of loans outstanding under the Unsecured Term Loan will bear a base annual interest rate of 6.50%.  If a cash flow sweep period were to occur and be continuing under the Company’s Mortgage Loan Agreement (i) the interest rate on any outstanding advances would increase from and after such date by 1.5% per annum above the base interest rate and (ii) the interest rate on any advances made after such date would increase by 3.5% per annum above the base interest rate.  Accrued and unpaid interest will be payable in cash, except that during the continuance of a cash flow sweep period under the existing mortgage loan agreement, the Operating Partnership may defer the payment of interest which deferred amount would be added to the outstanding  principal balance of the loans.

On the Closing Date, the Operating Partnership paid to the Initial Lenders an upfront commitment fee equal to $1 million.  The Operating Partnership will also be required to pay an additional commitment fee of $1.0 million on the date that is ninety days after the Closing Date unless prior thereto (i) at least 33.3% of the principal amount of the Facility has been syndicated to lenders who are not affiliates of the Initial Lenders or (ii) the Unsecured Term Loan has been paid in full and the commitments have been terminated.  

The Unsecured Term Loan documentation requires that the Company at all times maintain (i) a net worth of not less than $1.0 billion, and (ii) a leverage ratio not to exceed 60.0%.

The Unsecured Term Loan includes customary representations and warranties, covenants and indemnities.  The Unsecured Term Loan also has customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, and bankruptcy or insolvency proceedings.  If there is an event of default, the Lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Unsecured Term Loan documents, and require the Operating Partnership to pay a default interest rate on overdue amounts equal to 1.50% in excess of the applicable base interest rate.

Hedging Instruments

In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility, we purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements.  The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company did not elect hedge accounting and therefore the change in fair value is included within unrealized loss on interest rate cap in the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  As of December 31, 2016, the interest rate cap had a fair value of approximately $0.7 million as compared to $2.1 million on December 31, 2015.

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Dividends and Distributions

On February 28, 2017, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ending March 31, 2017.  The holders of Operating Partnership units are entitled to an equal distribution per Operating Partnership unit held on March 31, 2017.  These amounts will be paid on April 13, 2017.

On November 1, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended December 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2016.  The dividends and distributions payable were recorded as liabilities on the Company's condensed consolidated balance sheet at December 31, 2016.  The dividend has been reflected as a reduction of shareholders' equity and the distribution has been reflected as a reduction of the limited partners' non-controlling interest.  These amounts were paid on January 12, 2017.

On August 2, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended September 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held as of September 30, 2016.  These amounts were paid on October 13, 2016.

On May 3, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended June 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on June 30, 2016. These amounts were paid on July 14, 2016.

On March 8, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended March 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on March 31, 2016.  These amounts were paid on April 14, 2016.

On December 17, 2015, the Company declared a cash dividend of $0.50 per Class A and Class C common share for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2015.  These amounts were paid on January 14, 2016.

We currently intend to pay quarterly dividends and distributions in cash.  However, the timing, amount, and composition of all dividends and distributions will be made by the Company at the discretion of its Board of Trustees.  Such dividends and distributions will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants, applicable law, and other factors as the Board of Trustees of Seritage deems relevant.

Off-Balance Sheet Arrangements

The Company accounts for its investments in joint ventures that it does not have a controlling interest or is not the primary beneficiary using the equity method of accounting and those investments are reflected on the consolidated balance sheets of the Company as investments in unconsolidated joint ventures.  As of December 31, 2016 we did not have any off-balance sheet financing arrangements.

Contractual Obligations

Our contractual obligations relate to our Mortgage Loans, Future Funding Facility and non-cancelable operating leases in the form of a ground lease at one of our properties, as well as operating leases for our corporate offices.

Information concerning our obligations and commitments to make future payments under contracts for these loan and lease agreements as of December 31, 2016 is aggregated in the following table (in thousands):

			Payments due by Period
			Within						After
Contractual Obligation	Total		1 year		1 - 3 years		3 -5 years		5 years
Long-term debt (1)	$	1,339,772	$	63,430	$	1,276,342	$	—	$	—
Operating leases		2,987		533		1,058		428		968

(1) Includes expected interest payments.

(2) Does not include obligations under the Unsecured Term Loan entered into on February 23, 2017.

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Capital Expenditures

Capital expenditures for Wholly Owned Properties under the Master Lease are generally the responsibility of the tenant.  Given that the substantial majority of our GLA is subject to the Master Lease as of December 31, 2016, we do not currently anticipate incurring material expenses related to maintenance capital expenditures, tenant improvement costs or leasing commissions, outside of those associated with retenanting and redevelopment projects as described below.

During the year ended December 31, 2016, we incurred maintenance capital expenditures of approximately $0.5 million and tenant improvement costs and leasing commissions of $1.3 million and $0.1 million, respectively, that were not associated with retenanting and redevelopment projects.

During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, we incurred maintenance capital expenditures of less than $0.1 million and did not pay for any tenant improvement costs or leasing commissions that were not associated with retenanting and redevelopment projects.

Cash Flows from Operating Activities

Net cash provided by operating activities for the year ended December 31, 2016 was $92.4 million and included (i) $91.4 million of cash from operating income and (ii) a $1.0 million net increase in cash due to timing of cash receipts and payments related to changes in operating assets and liabilities.

Net cash provided by operating activities for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 was $17.7 million and included (i) $26.9 million of cash from operating income (net of acquisition-related expenses of $18.4 million) and (ii) a $9.2 million net decrease in cash due to timing of cash receipts and payments related to changes in operating assets and liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities for the year ended December 31, 2016 was $52.8 million which was entirely due to our property redevelopment activities.

Net cash used in investing activities for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 was $2.7 billion which was primarily a result of the Transaction.

Cash Flows from Financing Activities

Net cash used in financing activities for the year ended December 31, 2016 was $50.5 million which consisted primarily of $69.5 million of dividends and distributions paid, offset by $20.0 million of borrowings under the Company’s Future Funding Facility.

Net cash provided by financing activities for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 was $2.8 billion and included (i) $1.6 billion of gross cash proceeds from the issuance of common stock and non-controlling interests; (ii) $1.2 billion of gross cash proceeds from the issuance of the Mortgage Loans; and (iii) $29.6 million of offering and financing costs.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, we disclose the nature of the contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations or liquidity of the Company.

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In May and June of 2015, four purported Sears Holdings shareholders filed lawsuits in the Delaware Court of Chancery challenging the Transaction, which lawsuits have since been consolidated into a single action captioned In re Sears Holdings Corporation Stockholder and Derivative Litigation, Consol. C.A. No. 11081-VCL (the “Action”).  On October 15, 2015, plaintiffs filed a verified consolidated stockholder derivative complaint in the Action against the individual members of Sears Holdings’ Board of Directors, ESL Investments, Inc. (together with its affiliates, “ESL”), Sears Holdings’ CEO, Fairholme Capital Management L.L.C. (“FCM”), and Seritage.  On July 12, 2016, the plaintiffs filed a verified consolidated amended stockholder derivative complaint (the “Amended Complaint”) against the same defendants and asserting substantially the same claims as set forth in the complaint filed in October 2015.  The plaintiffs have brought the Action derivatively on behalf of Sears Holdings, which is named as a nominal defendant, and allege that the Sears Holdings directors, as well as ESL and Edward S. Lampert (in their capacity as the alleged controlling stockholder of Sears Holdings), breached their fiduciary duties to Sears Holdings shareholders by selling the Wholly Owned Properties to Seritage at a price that was unfairly low and was the result of a process that allegedly was flawed.  The Amended Complaint also alleges that Seritage and FCM aided and abetted these alleged fiduciary breaches.  Among other forms of relief, the Amended Complaint seeks damages in unspecified amounts.  In October 2016, following mediation, the parties reached an agreement-in-principle to settle the Action, which ultimately was reflected in a definitive Stipulation and Agreement of Settlement, Compromise and Release executed on February 8, 2017.  Pursuant to the settlement, (a) the defendants and the D&O insurers for the individual members of the Sears Holdings’ Board of Directors have agreed to pay (assuming satisfaction of all conditions) $40 million, of which Seritage has agreed to pay $19.0 million; and (b) all defendants will receive customary releases.  The Delaware Court of Chancery has scheduled a hearing on May 9, 2017, at which it will determine whether to approve the settlement, after customary notice to Sears Holding stockholders and an opportunity for them to object.  The defendants continue to deny the claims asserted and have entered into the settlement solely to avoid the burden, expense, distraction, and inherent risk in and of litigation.  While there can be no assurance that the settlement agreement will result in a definitive, court-approved agreement, the Company determined that its liability is both probable and estimable and recorded a litigation charge of $19.0 million during the year ended December 30, 2016.  The Company believes that the plaintiffs’ claims and allegations against the Company are legally without merit and, if the settlement is not approved, intends to contest the Action vigorously.

Retenanting and Redevelopment Projects

We are currently retenanting or redeveloping several properties primarily to convert single-tenant buildings occupied by Sears Holdings into multi-tenant properties occupied by a diversity of retailers and related concepts.  As of December 31, 2016, the Company’s wholly-owned development pipeline consisted primarily of 33 projects originated on the Seritage platform.  These projects represent an estimated total investment of $399.1 million, of which $353.9 million remained to be spent.  The table below summarizes the 33 new projects initiated by the Company during the period from July 7, 2015 (Date Operations Commenced) through December 31, 2016:

(dollars in thousands)
					Aggregate		Aggregate
Total			Aggregate		Estimated		Estimated								Estimated
Estimated	Number		Project		Development		Project		Projected Annual Income (2)						Incremental
Project Cost (1)	of Projects		Square Feet		Costs (1)		Costs (1)		Total		Existing		Incremental		Yield (3)
< $10,000		15		883,600	$	67,200	$	67,200	$	14,900	$	5,800	$	9,100
$10,001 - $20,000		13		1,169,400		176,900		188,800		29,500		8,900		20,600
> $20,000		5		633,100		133,100		143,100		25,300		6,300		19,000
New Projects		33		2,686,100	$	377,200	$	399,100	$	69,700	$	21,000	$	48,700	12.0 - 13.0%
Acquired projects		15				63,600		63,600
Total		48			$	440,800	$	462,700

(1) Total estimated development cost exclude, and total estimated project cost include, termination fees to recapture 100% of the property.

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

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

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The table below provides additional information, including a brief description, of each of the 33 new redevelopment projects:

Total Project Costs under $10 Million
		Total		Estimated	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 small shop retail		29,100	Delivered to tenants
Ft. Wayne, IN	Site densification; new outparcel for BJ's Brewhouse		7,594	Underway	Q2 2017
San Antonio, TX	Recapture and repurpose auto center space for Orvis, Jared's Jeweler, Shake Shack and small shop retail		18,890	Underway	Q2 2017
Albany, NY	Recapture and repurpose auto center space for BJ's Brewhouse and additional restaurants		27,973	Underway	Q3 2017
Bowie, MD	Recapture and repurpose auto center space for BJ's Brewhouse		8,202	Underway	Q3 2017
Hagerstown, MD	Recapture and repurpose auto center space for BJ's Brewhouse and additional restaurants		15,427	Underway	Q4 2017
Merrillville, IN	Termination property; redevelopment of existing store for At Home		132,000	Q1 2017	Q2 2017
Roseville, MI	Partial recapture; redevelopment of existing store for At Home		100,374	Q1 2017	Q4 2017
Troy, MI	Partial recapture; redevelopment of existing store for At Home		100,046	Q1 2017	Q4 2017
Warwick, RI	Recapture and repurpose auto center space for BJ's Brewhouse and additional retail		27,906	Q1 2017	Q4 2017
Anderson, SC	Partial recapture; redevelopment of existing building for Burlington Stores		124,331	Q2 2017	Q4 2017
Rehoboth Beach, DE	Partial recapture; redevelopment of existing store to be anchored by Christmas Tree Shops and That! and PetSmart		56,691	Q2 2017	Q1 2018
Kearney, NE	Sears termination property; redevelopment of existing store for PetSmart and additional junior anchors		92,451	Q2 2017	Q2 2018
Elkhart, IN	Termination property; existing store has been released to Big R Stores		86,500	Q3 2017	Q2 2018
Guaynabo, PR	Partial recapture; redevelopment of existing store for Planet Fitness and additional retail		56,100	Q3 2017	Q2 2018
Total Project Costs $10 - $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Braintree, MA	100% recapture; redevelopment of existing building for Nordstrom Rack and Saks OFF 5th		90,000	Substantially complete
Honolulu, HI	100% recapture; redevelopment of existing building for Longs Drugs (CVS), PetSmart and Ross Dress for Less		79,000	Underway	Q2 2017
Fairfax, VA	Partial recapture; redevelopment of existing store and attached auto center for Dave & Busters, additional junior anchors and restaurants		110,252	Q1 2017	Q4 2017
Madison, WI	Partial recapture; redevelopment of existing store for Dave & Busters, Total Wine & More, additional junior anchors, small shop retail and restaurants		75,300	Q1 2017	Q4 2017
West Jordan, UT	Partial recapture; redevelopment of existing store and attached auto center for Burlington Stores and small shop retail		81,427	Q1 2017	Q4 2017
Charleston, SC	Partial recapture; redevelopment of existing store and detached auto center for Burlington Stores and additional retail		71,710	Q2 2017	Q1 2018
NorthHollywood, CA	Partial recapture; redevelopment of existing store for Burlington Stores and additional junior anchors		79,788	Q2 2017	Q1 2018
Orlando, FL	100% recapture; demolish and construct new buildings for Floor & Décor, Orchard Supply Hardware, small shop retail and restaurants		139,209	Q2 2017	Q2 2018
Springfield, IL	Sears termination property; redevelopment of existing store for Burlington Stores, Binny's Beverage Depot, Outback Steakhouse, additional junior anchors and small shop retail		133,351	Q2 2017	Q2 2018
Santa Cruz, CA	Partial recapture; redevelopment of existing store for TJ Maxx, Homegoods and Petco		62,200	Q3 2017	Q1 2018
Saugus, MA	Partial recapture; redevelopment of existing store and detached auto center for Round 1 Entertainment and restaurants		99,000	Q3 2017	Q1 2018
Carson, CA	Partial recapture; redevelopment of existing store for Burlington Stores and additional retail		77,000	Q3 2017	Q1 2019
Salem, NH	Site densification; new theatre for Cinemark Recapture and repurpose auto center for restaurant space		71,200	Q4 2017	Q3 2018

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Total Project Costs over $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Memphis, TN	100% recapture; demolish and construct new buildings for LA Fitness, Nordstrom Rack, Ulta Beauty, additional junior anchors, small shop retail and restaurants		135,220	Underway	Q3 2017
Wayne, NJ	Partial recapture; redevelopment of existing store for Dave & Busters, additional junior anchors and restaurants		111,346	Q1 2017	Q4 2017
West Hartford, CT	100% recapture; redevelopment of existing building for REI, Saks OFF Fifth, other junior anchors, Shake Shack and additional small shop retail		147,630	Q1 2017	Q1 2018
St. Petersburg, FL	100% recapture; demolish and construct new buildings for Dick's Sporting Goods, Lucky's Market, PetSmart and additional junior anchors, small shop retail and restaurants		142,366	Q2 2017	Q2 2018
Santa Monica, CA	100% recapture; redevelopment of existing building into premier, mixed-use asset featuring unique, small-shop retail and creative office space		96,500	Q4 2017	Q4 2019

We plan to fund these projects with available cash balances, cash flow from operations, draws against the Future Funding Facility and other potential capital raising activities, including the Unsecured Term Loan we entered into subsequent to December 31, 2016.

The Company also acquired 15 retenanting or redevelopment projects that were in various stages of development at the closing of the Transaction.  The projected total cost of these projects was approximately $63.6 million of which a portion was incurred by Sears Holdings prior to the Transaction and for which reserve accounts were established at the closing of the Transaction to fund the remaining costs to be incurred by the Company.  Of the projects acquired by the Company, 12 have been substantially completed and delivered to tenants as of December 31, 2016.  The remaining projects, representing a total Company investment of approximately $5.1 million, are under development and have approximately $3.8 million remaining to be deployed as of December 31, 2016.

We continue to evaluate a number of additional retenanting and redevelopment projects that are consistent with our primary objective to maximize the value of our properties by recapturing space from Sears Holdings and re-leasing it to third-party tenants at higher rents.  Investment returns are dependent on the success of the leasing and development plans in place for each project, as well as the successful completion of each project.  Investment returns are subject to a number of variables, risks, and uncertainties including those disclosed within Item 1A of our Annual Report. We also refer you to our disclosure related to forward-looking statements.

Critical Accounting Policies

In preparing the consolidated financial statements, we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.  Set forth below is a summary of the accounting policies that we believe are critical to the preparation of our consolidated financial statements.  The summary should be read in conjunction with the more complete discussion of our accounting policies included in Note 2 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report.

Accounting for Real Estate Acquisitions

Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments.  In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located.

The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use.  The "if vacant" value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties.  Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.

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The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheet and amortized over the remaining lease term for each tenant.

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheet and below-market tenant leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet.

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range from five to 40 years.  Tenant improvements are amortized on a straight-line basis over the shorter of the estimated useful life or non-cancelable term of lease.

We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions and earnings which are recognized in accordance with the terms of the applicable agreement.

To determine the method of accounting for partially owned joint ventures, we evaluate the characteristics of associated entities and determine whether an entity is a variable interest entity ("VIE") and, if so, determine which party is primary beneficiary by analyzing whether we have both the power to direct the entity's significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits.  We will consolidate a VIE if we have determined that we are the primary beneficiary.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.

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Revenue Recognition

Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheet.

In leasing tenant space, we may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, we will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If we are considered the owner of the improvements for accounting purposes, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on straight-line basis.

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

We generally treat recapture and termination activity pursuant to the Master Lease as modifications of the Master Lease as of the date of notice.  Such notices and lease modifications result in the following accounting adjustments for the recaptured or terminated property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as a result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of (i) the shortened life of the lease from the date of notice to the date of vacancy or (ii) the remaining useful life of the asset or liability.

Additionally, termination fees paid by us to Sears Holding, if any, in connection with a 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Termination fees required to be paid by Sears Holdings to us in connection with a lease termination by Sears Holdings are recognized, for the portion of the termination fee attributable to the annual base rent of the subject property, on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of termination and, for the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Recent Accounting Pronouncements

Refer to Note 2 of the Consolidated Financial Statements for recently issued accounting pronouncements.

Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI, Total NOI, FFO, Company FFO, EBITDA and Adjusted EBITDA which are considered non-GAAP measures.

Net Operating Income ("NOI") and Total NOI

We define NOI as income from property operations less property operating expenses.  Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's depiction of NOI may not be comparable to other REITs.  We believe NOI provides useful information regarding the Company, 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.  We believe this form of presentation offers insights into the financial performance and condition of the Company as a whole given our ownership of unconsolidated properties that are accounted for under GAAP using the equity method.  We also consider Total NOI to be a helpful supplemental measure of our operating performance because it excludes from NOI items such as straight-line rent, and amortization of intangibles resulting from acquisition accounting.

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Due to the adjustments noted, NOI and Total NOI should only be used as an alternative measure of the Company's financial performance.

Earnings Before Interest Expense, Income Tax, Depreciation, and Amortization ("EBITDA") and Adjusted EBITDA

We define EBITDA as net income less depreciation, amortization, interest expense and provision for income and other taxes.  EBITDA is a commonly used measure of performance in many industries, but may not be comparable to measures calculated by other companies.  We believe EBITDA provides useful information to investors regarding our results of operations because it removes the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization).  Management also believes the use of EBITDA facilitates comparisons between us and other equity REITs, retail property owners who are not REITs, and other capital-intensive companies.

The Company makes certain adjustments to EBITDA, which it refers to as Adjusted 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 up-front-hiring and personnel costs, that it does not believe are representative of ongoing operating results.

Due to the adjustments noted, EBITDA and Adjusted EBITDA should only be used as an alternative measure of the Company's financial performance

Funds From Operations ("FFO") and Company FFO

We define FFO using 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 FFO.  FFO is calculated 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.

We consider 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.  FFO facilitates an understanding of the operating performance of our properties between periods because it does not give effect to real estate depreciation and amortization which are calculated to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.

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, litigations charges, acquisition-related expenses, amortization of deferred financing costs and up-front-hiring and personnel costs, that it does not believe are representative of ongoing operating results.  The Company previously referred to this metric as Normalized FFO; the definition and calculation remain the same.

Due to the adjustments noted, FFO and Company FFO should only be used as an alternative measure of the Company's financial performance.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

None of NOI, Total NOI, EBITDA, Adjusted EBITDA, FFO and 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 are presented below on a comparative basis for all periods.

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The following table reconciles NOI and Total NOI to GAAP net loss for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 (in thousands):

				July 7, 2015
	Year Ended			(date operations commenced) to
NOI	December 31, 2016			December 31, 2015
Net loss	$	(91,009	)	$	(38,803	)
Termination fee income		(5,288	)		—
Depreciation and amortization		177,119			65,907
General and administrative		17,469			9,956
Litigation charge		19,000			—
Acquisition-related expenses		73			18,397
Equity in income of unconsolidated joint ventures		(4,646	)		(4,772	)
Interest and other income		(266	)		(136	)
Interest expense		63,591			30,461
Unrealized loss on interest rate cap		1,378			2,933
Provision for income taxes		505			944
NOI	$	177,926		$	84,887
Total NOI
NOI		177,926			84,887
NOI of unconsolidated joint ventures		26,611			14,456
Straight-line rent adjustment (1)		(13,168	)		(9,353	)
Above/below market rental income/expense (1)		(877	)		(497	)
Total NOI	$	190,492		$	89,493

(1) Includes adjustments for unconsolidated joint ventures.

The following table reconciles EBITDA and Adjusted EBITDA to GAAP net loss for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 (in thousands):

				July 7, 2015
	Year Ended			(date operations commenced) to
EBITDA	December 31, 2016			December 31, 2015
Net loss	$	(91,009	)	$	(38,803	)
Depreciation and amortization		177,119			65,907
Depreciation and amortization (unconsolidated    joint ventures)		21,118			8,987
Interest expense		63,591			30,461
Provision for income and other taxes		505			944
EBITDA	$	171,324		$	67,496
Adjusted EBITDA
EBITDA	$	171,324		$	67,496
Termination fee income		(5,288	)		—
Unrealized loss on interest rate cap		1,378			2,933
Litigation charge		19,000			—
Acquisition-related expenses		73			18,397
Up-front hiring and personnel costs		328			1,906
Adjusted EBITDA	$	186,815		$	90,732

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The following table reconciles FFO and Company FFO to GAAP net loss for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 (in thousands):

				July 7, 2015
	Year Ended			(date operations commenced) to
Funds from Operations	December 31, 2016			December 31, 2015
Net loss	$	(91,009	)	$	(38,803	)
Real estate depreciation and amortization    (consolidated properties)		176,366			65,877
Real estate depreciation and amortization    (unconsolidated joint ventures)		21,118			8,987
FFO attributable to common shareholders    and unitholders	$	106,475		$	36,061
FFO per diluted common share and unit	$	1.92		$	0.65
Company Funds from Operations
Funds from Operations attributable to Seritage    Growth Properties	$	106,475		$	36,061
Termination fee income		(5,288	)		—
Unrealized loss on interest rate cap		1,378			2,933
Amortization of deferred financing costs		5,360			2,657
Litigation charge		19,000			—
Acquisition-related expenses		73			18,397
Up-front hiring and personnel costs		328			1,906
Company FFO attributable to common    shareholders and unitholders	$	127,326		$	61,954
Company FFO per diluted common share and unit	$	2.29		$	1.12
Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		31,416			31,386
Weighted average OP units outstanding		24,176			24,176
Weighted average common shares and    units outstanding		55,592			55,562

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to market risk associated with changes in interest rates both in terms of existing variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and to fund investments.  As of December 31, 2016, we had $1.2 billion of consolidated debt, including our variable-rate Mortgage Loans and Future Funding Facility.  An immediate 100 basis point change in the underlying interest rate would result in an $11.8 million increase to interest expense and corresponding decrease to operating cash flow.

The Company has managed and will continue to manage interest rate risk through the use of interest rate caps and/or swaps and by taking advantage of favorable market conditions for fixed-rate debt and/or equity or equity-linked capital, depending on our analysis of the interest rate environment and the costs and risks of such strategies.

As of December 31, 2016, the estimated fair value of our consolidated debt was $1.2 billion.  The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the Consolidated Financial Statements and Consolidated Financial Statement Schedule beginning on page F-1 for the required information.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.

Management Report or Attestation Report Regarding Internal Control

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

As of December 31, 2016, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in "Internal Control—Integrated Framework (2013)." Based on this assessment, management believes that, as of December 31, 2016, the Company maintained effective internal controls over financial reporting. Deloitte & Touche LLP, the independent registered public accounting firm who audited our consolidated financial statements contained in this Form 10-K, has issued a report on our internal control over financial reporting, which is included herein.

Changes in Internal Controls over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the three months ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Incorporated herein by reference to our definitive proxy statement with respect to our 2017 Annual Meeting of Shareholders.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated herein by reference to our definitive proxy statement with respect to our 2017 Annual Meeting of Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated herein by reference to our definitive proxy statement with respect to our 2017 Annual Meeting of Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated herein by reference to our definitive proxy statement with respect to our 2017 Annual Meeting of Shareholders.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated herein by reference to our definitive proxy statement with respect to our 2017 Annual Meeting of Shareholders.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Consolidated Financial Statements and Consolidated Financial Statement Schedule.

The consolidated financial statements and consolidated financial statement schedule listed in the accompanying Index to Consolidated Financial Statements and Consolidated Financial Statement Schedule are filed as part of this Annual Report.

(b) Exhibits.

Exhibit No.	Description	SEC Document Reference
2.1	Subscription, Distribution and Purchase and Sale Agreement, dated as of June 8, 2015, by and between Seritage Growth Properties and Sears Holdings Corporation	Incorporated by reference to Exhibit 2.1 to our Registration Statement on Form S-11, filed on June 9, 2015
3.1	Articles of Amendment and Restatement	Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on July 10, 2015
3.2	Amended and Restated Bylaws	Incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K, filed on July 10, 2015
4.1	Registration Rights Agreement by and among Seritage Growth Properties, ESL Investments, Inc., and Seritage Growth Properties, L.P., dated as of July 7, 2015	Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on July 10, 2015
10.1	Transition Services Agreement by and between Sears Holdings Management Corporation and Seritage Growth Properties, L.P., dated as of July 7, 2015	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on July 10, 2015
10.2	Agreement of Limited Partnership of Seritage Growth Properties, L.P., dated as of July 7, 2015	Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on July 10, 2015
10.3	Master Lease by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Kmart Operations, LLC, and Sears Operations, LLC, dated as of July 7, 2015	Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K, filed on July 10, 2015
10.4*	Side Letter to Master Lease, by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Kmart Operations, LLC, and Sears Operations, LLC, dated as of July 7, 2015	Filed herewith.
10.5	Mortgage Loan Agreement by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, certain other subsidiaries of Operating Partnership, JPMorgan Chase Bank, National Association and H/2 SO III Funding LLC, dated as of July 7, 2015	Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K, filed on July 10, 2015
10.6	Omnibus Amendment to the Mortgage Loan Agreement, dated as of September 28, 2015, by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, certain other subsidiaries of Operating Partnership, Seritage Growth Properties, Seritage Growth Properties L.P., JPMorgan Chase Bank, National Association and H/2 SO III Funding LLC	Filed herewith.
10.7	Second Amendment to Mortgage Loan Agreement, dated as of November 8, 2016, by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, certain other subsidiaries of Operating Partnership, Seritage Growth Properties, Seritage Growth Properties L.P. and Wells Fargo Bank, National Association	Filed herewith.

- 56 -

Exhibit No.	Description	SEC Document Reference
10.8	Mezzanine Loan Agreement by and among Seritage SRC Mezzanine Finance LLC, Seritage KMT Mezzanine Finance LLC, JPMorgan Chase Bank, National Association and H/2 Special Opportunities III Corp., dated as of July 7, 2015	Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K, filed on July 10, 2015
10.9	Omnibus Amendment to Mezzanine Loan Agreement, dated as of September 28, 2015, by and among Seritage SRC Mezzanine Finance LLC, Seritage KMT Mezzanine Finance LLC, Seritage Growth Properties, Seritage Growth Properties L.P., JPMorgan Chase Bank, National Association and H/2 Special Opportunities III Corp.	Filed herewith.
10.10	Second Amendment to Mezzanine Loan Agreement, dated as of November 8, 2016, by and among Seritage SRC Mezzanine Finance LLC, Seritage KMT Mezzanine Finance LLC, Seritage Growth Properties, Seritage Growth Properties, L.P. and Wells Fargo Bank, National Association	Filed herewith.
10.11	Term Loan Facility by and among Seritage Growth Properties, L.P., Seritage Growth Properties, JPP, LLC and JPP II, LLC, dated as of February 23, 2017	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on February 24, 2017
10.12	Form of Seritage Growth Properties 2015 Share Plan	Incorporated by reference to Exhibit 10.6 to our Registration Statement on Form S-11, filed on May 11, 2015
10.13	Seritage Growth Properties Restricted Share Agreement	Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K, filed on July 10, 2015
10.14	Form of Seritage Growth Properties Restricted Share Agreement	Filed herewith.
10.15	Form of Seritage Growth Properties Sign-On P-RSU Restricted Share Agreement	Incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K, filed on July 10, 2015
10.16	Form of Seritage Growth Properties Time-Vesting Restricted Share Unit Agreement	Incorporated by reference to Exhibit 10.8 to our Current Report on Form 8-K, filed on July 10, 2015
10.17	Form of Seritage Growth Properties Annual P-RSU Restricted Share Agreement	Incorporated by reference to Exhibit 10.9 to our Current Report on Form 8-K, filed on July 10, 2015
10.18	Employment Agreement with Brian Dickman, dated as of July 6, 2015.	Incorporated by reference to Exhibit 10.10 to our Current Report on Form 8-K, filed on July 10, 2015
10.19	Employment Agreement with Mary Rottler, dated as of June 2, 2015	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on June 19, 2015
10.20	Employment Agreement, dated April 17, 2015, between Benjamin Schall and Seritage Growth Properties	Incorporated by reference to Exhibit 10.8 to our Registration Statement on Form S-11, filed on May 26, 2015
10.21	Letter Agreement, dated April 30, 2015, among Seritage Growth Properties, Seritage Growth Properties, L.P. and Benjamin Schall	Incorporated by reference to Exhibit 10.9 to our Registration Statement on Form S-11, filed on May 26, 2015
10.22	Letter Agreement, dated May 15, 2015, between Matthew Fernand and Seritage Growth Properties	Incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-11, filed on May 26, 2015
10.23	Letter Agreement, dated May 13, 2015, between James Bry and Seritage Growth Properties	Incorporated by reference to Exhibit 10.11 to our Registration Statement on Form S-11, filed on May 26, 2015

- 57 -

Exhibit No.	Description	SEC Document Reference
10.24	Exchange Agreement by and among Seritage Growth Properties, Seritage Growth Properties, L.P., ESL Partners, L.P., and Edward S. Lampert, dated as of June 26, 2015	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on July 2, 2015
10.25	Exchange Agreement by and among Seritage Growth Properties and Fairholme Capital Management, L.L.C., dated as of June 30, 2015	Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on July 2, 2015
21.1	List of subsidiaries	Filed herewith.
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm	Filed herewith.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Certification of the Chief Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Filed herewith.
32.2	Certification of the Chief Financial Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Filed herewith.
101.INS	XBRL Instance Document	Filed herewith.
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.

* Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

- 58 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SERITAGE GROWTH PROPERTIES
Dated: March 1, 2017	/s/ Benjamin W. Schall

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Edward S. Lampert	Chairman of the Board of Trustees	March 1, 2017
Edward S. Lampert
/s/ Benjamin W. Schall	President, Chief Executive Officer and Trustee (Principal Executive Officer)	March 1, 2017
Benjamin W. Schall
/s/ Brian R. Dickman	Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)	March 1, 2017
Brian R. Dickman
/s/ David S. Fawer	Trustee	March 1, 2017
David S. Fawer
/s/ Kenneth T. Lombard	Trustee	March 1, 2017
Kenneth T. Lombard
/s/ John. T. McClain	Trustee	March 1, 2017
John T. McClain
/s/ Thomas M. Steinberg	Trustee	March 1, 2017
Thomas M. Steinberg

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SERITAGE GROWTH PROPERTIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

Financial Statements

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015	F-4
Consolidated Statements of Operations for the year ended December 31, 2016 and the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015	F-5
Consolidated Statements of Equity for the year ended December 31, 2016 and the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015	F-6
Consolidated Statements of Cash Flows for the year ended December 31, 2016 and the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015	F-7
Notes to Consolidated Financial Statements	F-8
Financial Statement Schedule
Schedule III—Real estate and accumulated depreciation	F-31

All other schedules are omitted since the required information is either not present in any amounts, is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and related notes.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

Seritage Growth Properties

New York, New York

We have audited the accompanying consolidated balance sheets of Seritage Growth Properties and subsidiaries (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, equity, and cash flows for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Seritage Growth Properties and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2017 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

New York, New York

March 1, 2017

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

Seritage Growth Properties

New York, New York

We have audited the internal control over financial reporting of Seritage Growth Properties and subsidiaries (the “Company”) as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report or Attestation Report Regarding Internal Control. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trustees, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2016 of the Company and our report dated March 1, 2017 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP

New York, New York

March 1, 2017

F-3

SERITAGE GROWTH PROPERTIES

CONSOLIDATED BALANCE SHEET

(Amounts in thousands, except share and per share amounts)

	December 31, 2016			December 31, 2015
ASSETS
Investment in real estate
Land	$	840,021		$	840,563
Buildings and improvements		839,663			814,652
Accumulated depreciation		(89,940	)		(29,076	)
		1,589,744			1,626,139
Construction in progress		55,208			13,136
Net investment in real estate		1,644,952			1,639,275
Investment in unconsolidated joint ventures		425,020			427,052
Cash and cash equivalents		52,026			62,867
Restricted cash		87,616			92,475
Tenant and other receivables, net		23,172			9,772
Lease intangible assets, net		464,399			578,795
Prepaid expenses, deferred expenses and other assets, net		15,052			23,123
Total assets	$	2,712,237		$	2,833,359
LIABILITIES AND EQUITY
Liabilities
Mortgage loans payable, net	$	1,166,871		$	1,142,422
Accounts payable, accrued expenses and other liabilities		121,055			120,860
Total liabilities		1,287,926			1,263,282
Commitments and contingencies (Note 10)
Shareholders' Equity
Class A shares $0.01 par value; 100,000,000 shares authorized;    25,843,251 and 24,817,842 shares issued and outstanding as of    December 31, 2016 and December 31, 2015, respectively		258			248
Class B shares $0.01 par value; 5,000,000 shares authorized; 1,589,020    shares issued and outstanding as of December 31, 2016 and    December 31, 2015		16			16
Class C shares $0.01 par value; 50,000,000 shares authorized;    5,754,685 and 6,773,185 shares issued and outstanding as of    December 31, 2016 and December 31, 2015, respectively		58			68
Additional paid-in capital		925,563			924,508
Accumulated deficit		(121,338	)		(38,145	)
Total shareholders' equity		804,557			886,695
Non-controlling interests		619,754			683,382
Total equity		1,424,311			1,570,077
Total liabilities and equity	$	2,712,237		$	2,833,359

The accompanying notes are an integral part of these consolidated financial statements.

F-4

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Amounts in thousands, except per share amounts)

				July 7, 2015
	Year Ended			(date operations commenced) to
	December 31, 2016			December 31, 2015
REVENUE
Rental income	$	186,421		$	86,645
Tenant reimbursements		62,253			26,926
Total revenue		248,674			113,571
EXPENSES
Property operating		21,510			6,329
Real estate taxes		43,681			22,355
Depreciation and amortization		177,119			65,907
General and administrative		17,469			9,956
Litigation charge		19,000			—
Provision for doubtful accounts		269			—
Acquisition-related expenses		73			18,397
Total expenses		279,121			122,944
Operating loss		(30,447	)		(9,373	)
Equity in income of unconsolidated joint ventures		4,646			4,772
Interest and other income		266			136
Interest expense		(63,591	)		(30,461	)
Unrealized loss on interest rate cap		(1,378	)		(2,933	)
Loss before income taxes		(90,504	)		(37,859	)
Provision for income taxes		(505	)		(944	)
Net loss		(91,009	)		(38,803	)
Net loss attributable to non-controlling interests		39,451			16,465
Net loss attributable to common shareholders	$	(51,558	)	$	(22,338	)
Net loss per share attributable to Class A and Class C common shareholders – Basic    and diluted	$	(1.64	)	$	(0.71	)
Weighted average Class A and Class C common shares outstanding - Basic and diluted		31,416			31,386

The accompanying notes are an integral part of these consolidated financial statements.

F-5

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF EQUITY

(Amounts in thousands)

															Additional						Non-
	Class A				Class B				Class C						Paid-In			Accumulated			Controlling			Total
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Interests			Equity
Balance at July 7, 2015 (date    operations commenced)		24,584	$	246		1,589	$	16		6,790		$	68		$	923,636		$	—		$	711,991		$	1,635,957
Net loss		—		—		—		—		—			—			—			(22,338	)		(16,465	)		(38,803	)
Offering related costs		—		—		—		—		—			—			(70	)		—			(56	)		(126	)
Dividends and    distributions declared    ($0.50 per share and unit)		—		—		—		—		—			—			—			(15,807	)		(12,088	)		(27,895	)
Issuance of restricted shares		217		2		—		—		—			—			(2	)		—			—			—
Stock-based compensation		—		—		—		—		—			—			944			—			—			944
Share class exchanges, net    (17,450 common shares)		17		0		—		—		(17	)		(0	)		—			—			—			—
Balance at December 31, 2015		24,818	$	248		1,589	$	16		6,773		$	68		$	924,508		$	(38,145	)	$	683,382		$	1,570,077
Balance at January 1, 2016		24,818	$	248		1,589	$	16		6,773		$	68		$	924,508		$	(38,145	)	$	683,382		$	1,570,077
Net loss		—		—		—		—		—			—			—			(51,558	)		(39,451	)		(91,009	)
Dividends and    distributions declared    ($1.00 per share and unit)		—		—		—		—		—			—			—			(31,635	)		(24,177	)		(55,812	)
Vesting of restricted share units		7		0		—		—		—			—			(13	)		—			—			(13	)
Stock-based compensation		—		—		—		—		—			—			1,068			—			—			1,068
Share class exchanges, net    (1,018,500 common shares)		1,018		10		—		—		(1,018	)		(10	)		—			—			—			—
Balance at December 31, 2016		25,843	$	258		1,589	$	16		5,755		$	58		$	925,563		$	(121,338	)	$	619,754		$	1,424,311

The accompanying notes are an integral part of these consolidated financial statements.

F-6

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Amounts in thousands)

				July 7, 2015
				(Date Operations
	Year Ended			Commenced) to
	December 31, 2016			December 31, 2015
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(91,009	)	$	(38,803	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in income of unconsolidated joint ventures		(4,646	)		(4,772	)
Distributions from unconsolidated joint ventures		15,677			6,733
Unrealized loss on interest rate cap		1,378			2,933
Stock-based compensation		1,068			944
Depreciation and amortization		177,119			65,907
Amortization of deferred financing costs		5,361			2,657
Amortization of above and below market leases, net		(680	)		(388	)
Straight-line rent adjustment		(12,862	)		(8,299	)
Change in operating assets and liabilities
Tenants and other receivables		350			(1,473	)
Prepaid expenses, deferred expenses and other assets		6,080			(25,596	)
Restricted cash		(17,554	)		(3,761	)
Accounts payable, accrued expenses and other liabilities		12,143			21,589
Net cash provided by operating activities		92,425			17,671
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of real estate and unconsolidated joint ventures		—			(2,653,019	)
Investments in unconsolidated joint ventures		(9,000	)		—
Development of real estate		(66,193	)		(11,273	)
Decrease (increase) in restricted cash		22,413			(66,107	)
Net cash used in investing activities		(52,780	)		(2,730,399	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of mortgage loans payable, net		—			1,161,196
Proceeds from Future Funding Facility		20,002			—
Payment of deferred financing costs		(914	)		(21,431	)
Proceeds from issuance of common stock and non-controlling interest		—			1,644,042
Offering related costs		—			(8,212	)
Common dividends paid		(39,354	)		—
Non-controlling interests distributions paid		(30,220	)		—
Net cash (used in) provided by financing activities		(50,486	)		2,775,595
Net (decrease) increase in cash and cash equivalents		(10,841	)		62,867
Cash and cash equivalents, beginning of period		62,867			—
Cash and cash equivalents, end of period	$	52,026		$	62,867
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	61,051		$	25,325
Capitalized interest		3,077			226
Income taxes paid		505			944
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND    FINANCING ACTIVITIES
Development of real estate financed with accounts payable		6,369			2,856
Dividends and distribution declared and unpaid		13,954			27,894

The accompanying notes are an integral part of these consolidated financial statements.

F-7

SERITAGE GROWTH PROPERTIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization

Seritage Growth Properties was organized in Maryland on June 3, 2015 and initially capitalized with 100 shares of Class A common shares.  The Company conducts its operations through Seritage Growth Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership that was formed on April 22, 2015.  Unless the context otherwise requires, “Seritage” and the “Company” refer to Seritage Growth Properties, the Operating Partnership and its subsidiaries.

On June 11, 2015 Sears Holdings Corporation (“Sears Holdings”) effected a rights offering (the “Rights Offering”) to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Wholly Owned Properties”), and its 50% interests in three joint ventures (such joint ventures, the “JVs,” and such 50% joint venture interests the “JV Interests”) that collectively own 28 properties, ground lease one property and lease two properties (collectively, the “JV Properties”) (collectively, the “Transaction”).  The Rights Offering ended on July 2, 2015 and the Company’s Class A common shares were listed on the New York Stock Exchange (“NYSE”) on July 6, 2015.

On July 7, 2015, the Company completed the Transaction with Sears Holdings (see Note 3) and commenced operations.  The Company did not have any operations prior to the completion of the Rights Offering and Transaction.

Seritage is a fully-integrated, self-administered, self-managed real estate investment trust (“REIT”) primarily engaged in the real property business through the Company’s investment in the Operating Partnership.  Subsidiaries of the Operating Partnership lease a substantial majority of the space at all but 15 of the Wholly Owned Properties back to Sears Holdings under a master lease agreement (“Master Lease”), with the remainder of such space leased to third-party tenants.  A substantial majority of the space at the JV Properties is also leased (or subleased) by the JVs to Sears Holdings under master lease agreements (collectively, the “JV Master Leases”).  The Master Lease and the JV Master Leases provide the Company and the JVs with the right to recapture certain space from Sears Holdings at each property for retenanting or redevelopment purposes.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.  The Company holds a 56.7% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  Through consideration of new consolidation guidance effective for the Company as of January 1, 2016, it has been concluded that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  However, as the Company holds what is deemed a majority voting interest in the Operating Partnership, it qualifies for the exemption from providing certain of the disclosure requirements associated with investments in VIEs.

The portions of consolidated entities not owned by the Company and the Operating Partnership are presented as non-controlling interests as of and during the periods presented.

F-8

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to fair values of acquired assets and liabilities assumed for purposes of applying the acquisition method of accounting, the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivables.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

The Company currently operates in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management and leasing of retail properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operational process.

Accounting for Real Estate Acquisitions

Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments.  In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located.

The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use.  The "if vacant" value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties.  Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.

The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheet and amortized over the remaining lease term for each tenant.

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheet; below-market tenant leases and above-market ground leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet.  The values assigned to above-market and below-market tenant leases are amortized as reductions and increases, respectively, to base rental revenue over the remaining term of the respective leases.  The values assigned to below-market and above-market ground leases are amortized as increases and reductions, respectively, to property operating expenses over the remaining term of the respective leases.

The Company expenses transaction costs associated with business combinations in the period incurred.  These costs are included in acquisition-related expenses within the consolidated statements of operations.

F-9

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.  As of December 31, 2016, the Company had approximately $87.6 million of restricted cash, consisting of $65.5 million reserved for redevelopment costs, tenant allowances and leasing commissions, deferred maintenance, environmental remediation and other capital expenditures, $19.2  million related to basic property carrying costs such as real estate taxes, insurance and ground rent; and $2.9 million of other restricted cash which consists primarily of prepaid rental income.

F-10

As of December 31, 2015, the Company had approximately $92.5 million of restricted cash, including $51.3 million reserved for redevelopment costs, deferred maintenance, environmental remediation and other capital expenditures; $38.5 million related to basic property carrying costs such as real estate taxes, insurance and ground rent and $2.7 million of other restricted cash which consists primarily of prepaid rental income.

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located.  In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific rent receivable will be made.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.

Revenue Recognition

Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheet.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.

Tenant reimbursement income arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the related expenses are incurred.

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

F-11

Seritage 50% Recapture Rights.  The Company generally treats the delivery of a 50% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the Master Lease.

• The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Sears Holdings Termination Rights.  The Master Lease provides Sears Holdings with certain rights to terminate the Master Lease with respect to properties that cease to be profitable for operation by Sears Holdings.  Such a termination would generally result in the following accounting adjustments for the terminated property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

• Termination fees required to be paid by Sears Holdings are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of termination.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company has elected not to utilize hedge accounting and therefore the change in fair value is included within change in fair value of interest rate cap on the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  As of December 31, 2016, the interest rate cap had a fair value of approximately $0.7 million as compared to $2.1 million at December 31, 2015.

Stock-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions.

F-12

As of December 31, 2016, substantially all of the Company's real estate properties were leased to Sears Holdings and the majority of Company’s rental revenues were derived from the Master Lease (see Note 6).  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Sears Holdings’ business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  Sears Holdings is a publicly traded company that is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K and Form 10-Q with the SEC.  Refer to www.sec.gov for Sears Holdings Corporation publicly-available financial information.

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of December 31, 2016, the Company's portfolio of 235 Wholly Owned Properties was diversified by location across 49 states and Puerto Rico.

Earnings (Loss) per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  Class B non-economic common shares are excluded from earnings (loss) per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

In January 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01 which changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets.  While there are various differences between the accounting for an asset acquisition and a business combination, the Company expects that the largest impact will be the capitalization of transaction costs for asset acquisitions which are expensed for business combinations.  ASU 2007-01 is effective, on a prospective basis, for interim and annual periods beginning after January 1, 2019; early adoption is permitted.  The Company has chosen to early adopt ASU 2017-01 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows - Restricted Cash." ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or cash equivalents.  Therefore, amounts generally described as restricted cash and equivalents should be included with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows.  Currently, there is no specific guidance to address how to classify or present these changes. ASU 2016-18 is effective, on a retroactive basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 provides classification guidance for eight specific topics including debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. ASU 2016-18 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

On February 25, 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases.  ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018.  ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases.  Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability.  For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases, the lessee would recognize a straight-line total lease expense.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

F-13

In September 2015, the FASB issued ASU 2015-16, which amends Topic 805, Business Combinations, and requires the recognition of purchase price allocation adjustments that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, and eliminates the requirement to retrospectively account for these adjustments.  ASU 2015-16 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2015; early adoption is permitted.  The Company has chosen to early adopt ASU 2015-16 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  The recognition and measurement guidance for debt issuance costs are not affected.  ASU 2015-03 is effective for annual periods beginning after December 31, 2015.  Early adoption is permitted.  The Company elected to early adopt ASU 2015-03 during the current period for the costs related to the Mortgage Loans issued in connection with the Transaction.  As the Company has not previously reported debt issuance costs and mortgage loans payable within the consolidated financial statements, retrospective application is not required.  As such, debt issuance costs, net of accumulated amortization, are netted against mortgage loans payable on the consolidated balance sheet.

In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015.  Although the Company has not yet finalized its evaluation of this new accounting standard, aside from certain expanded disclosure requirements, it is not expected that the adoption of this standard will have a material impact on the consolidated financial statements.

In May 2014, with subsequent updates issued in August 2015 and March, April, May and December 2016, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment.  In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year.  Accordingly, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016.  The standard can be applied either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment recognized as of the date of initial application. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this guidance. While the Company anticipates additional disclosure, it does not expect the adoption of this pronouncement will have a material effect on its consolidated financial statements; however, it will continue to evaluate this assessment until the guidance becomes effective.

F-14

Note 3 – Acquisitions

On July 7, 2015, the Company purchased the Wholly Owned Properties and JV Interests at their fair value for $2.7 billion, with the substantial majority of such properties being leased back to Sears Holdings.

The following table summarizes the purchase price and fair values of the net assets acquired in the Transaction (in thousands):

Proceeds from issuance of common stock and    non-controlling interest			$	1,644,042
Less: Offering related costs				(8,212	)
Proceeds from issuance of mortgage loans payable				1,161,196
Less: Deferred financing costs				(21,446	)
Total sources of funds net of offering and financing costs				2,775,580
Real estate assets acquired
Land	840,563
Buildings and improvements	810,499
Lease intangibles
In-place leases	595,443
Below-market ground lease	11,766
Above-market leases	9,058
Below-market leases	(20,045	)
Investments in unconsolidated joint ventures	429,012
Total fair value of real estate assets acquired				2,676,296
Plus: Restricted cash
Environmental expenses reserve	12,034
Deferred maintenance reserve	10,575
Total restricted cash				22,609
Less: Assumed liabilities
Real estate taxes payable	(23,277	)
Environmental expenses	(12,034	)
Deferred maintenance	(10,575	)
Total assumed liabilities				(45,886	)
Net cash paid for acquisition of real estate and unconsolidated    joint ventures				2,653,019
Additional (sources) / uses of cash
Prepaid rent	(26,855	)
Initial funding of unfunded construction commitments    reserve (restricted cash)	42,470
Initial funding of property carry costs reserve    (restricted cash)	32,482
Initial funding of interest expense reserve (restricted cash)	4,924
Acquisition related expenses	18,340
Prepaid interest expense	1,249
Total additional (sources) uses of cash, net				72,610
Remaining excess cash from transaction			$	49,951

F-15

Note 4 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $464.4 million and $16.8 million as of December 31, 2016, respectively.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): 

December 31, 2016
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	592,871	$	(146,964	)	$	445,907
Below-market ground leases, net		11,766		(305	)		11,461
Above-market leases, net		8,964		(1,933	)		7,031
Total	$	613,601	$	(149,202	)	$	464,399

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	20,011	$	(3,184	)	$	16,827
Total	$	20,011	$	(3,184	)	$	16,827

December 31, 2015								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Assets	Asset		Amortization			Balance		Period
In-place leases, net	$	595,443	$	(36,800	)	$	558,643		8.4	years
Below-market ground leases, net		11,766		(102	)		11,664		57.5	years
Above-market leases, net		9,058		(570	)		8,488		8.8	years
Total	$	616,267	$	(37,472	)	$	578,795		9.4	years

								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Liabilities	Liability		Amortization			Balance		Period
Below-market leases, net	$	20,045	$	(1,059	)	$	18,986		11.4	years
Total	$	20,045	$	(1,059	)	$	18,986		11.4	years

Amortization of acquired below-market leases, net of acquired above-market leases resulted in additional rental income of $0.9 million for the year ended December 31, 2016 and $0.5 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	(970	)
2018		(970	)
2019		(943	)
2020		(808	)
2021		(792	)

Amortization of acquired below-market ground leases resulted in additional rent expense of $0.2 million for the year ended December 31, 2016 and $0.1 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired below-market ground leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	203
2018		203
2019		203
2020		203
2021		203

F-16

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $110.2 million for the year ended December 31, 2016 and $36.8 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired in-place leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	102,380
2018		61,988
2019		59,823
2020		58,088
2021		52,248

Note 5 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures for which the Company holds less than a controlling interest.  The Company’s partners in these unconsolidated joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures.  The obligations to make capital contributions are governed by each unconsolidated joint venture’s respective operating agreement and related governing documents.

The Company currently has investments in three unconsolidated entities: GS Portfolio Holdings LLC (the “GGP JV”), a joint venture between Seritage and a subsidiary of GGP Inc. (together with its subsidiaries, “GGP”), SPS Portfolio Holdings LLC (the “Simon JV”), a joint venture between Seritage and a subsidiary of Simon Property Group, Inc. (together with its subsidiaries, “Simon”), and MS Portfolio LLC (the “Macerich JV”), a joint venture between Seritage and a subsidiary of The Macerich Company (together with its subsidiaries, “Macerich”).  A substantial majority of the space at the JV Properties is leased to Sears Holdings under the JV Master Leases which include recapture rights and termination rights with similar terms as those described under the Master Lease.

As of December 31, 2016, the GGP JV had submitted recapture notices related to Pembroke Lakes Mall in Pembroke Pines, FL, Valley Plaza Mall in Bakersfield, CA, Staten Island Mall in Staten Island, NY and Coronado Mall in Albuquerque, NM.  In addition, the GGP JV announced plans to recapture space at five additional locations according to a specific schedule, including Oakbrook Center in Oak Brook, IL, The Mall at Columbia in Columbia, MD, Natick Collection in Natick, MA, Paramus Park in Paramus, NJ and Alderwood in Lynnwood, WA.  The GGP JV will recapture 100% of the space currently occupied by Sears Holdings at Alderwood and Paramus Park, while Sears Holdings will continue to occupy a downsized space at the other locations.

No recaptures notices have been submitted related to properties in the Macerich JV or the Simon JV as of December 31, 2016.

The Company’s investments in unconsolidated joint ventures at December 31, 2016, consisted of (in thousands):

	# of		Total		Initial		Seritage %
Joint Venture	Properties		GLA		Investment		Ownership
GGP JV		12		2,167	$	165,000		50	%
Macerich JV		9		1,573		150,000		50	%
Simon JV		10		1,714		114,012		50	%
Total		31		5,454	$	429,012

Each unconsolidated joint venture is obligated to prepare financial statements in accordance with GAAP.  The Company generally shares in the profits and losses of these unconsolidated joint ventures 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 joint venture that differ from the Company’s equity interest in the unconsolidated joint venture.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated joint venture recognizes with respect to its assets; differences between the Company’s basis in assets it has transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets; the Company’s deferral of the unconsolidated joint venture’s profits from land sales to the Company; or other items. There were no joint venture impairment charges during the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

F-17

The following table presents combined condensed financial data for all of the Company’s unconsolidated joint ventures as of December 31, 2016 and December 31, 2015, and for the year ended December 31, 2016 and the period from July 7, 2015 (Date operations Commenced) to December 31, 2015:

	December 31 2016			December 31, 2015
ASSETS
Investment in real estate
Land	$	214,109		$	214,726
Buildings and improvements		598,978			603,265
Accumulated depreciation		(56,324	)		(24,111	)
		756,763			793,880
Construction in progress		48,885			1,481
Net investment in real estate		805,648			795,361
Cash and cash equivalents		3,434			19,903
Tenant and other receivables, net		6,133			4,990
Other assets, net		38,646			30,506
Total assets	$	853,861		$	850,760
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Accounts payable, accrued expenses and other liabilities	$	14,177		$	13,973
Total liabilities		14,177			13,973
Members Interest
Additional paid in capital		830,389			823,923
Retained earnings		9,295			12,864
Total members interest		839,684			836,787
Total liabilities and members interest	$	853,861		$	850,760

				July 7, 2015
	Year Ended			(dateoperations commenced) to
	December 31, 2016			December 31, 2015
EQUITY IN INCOME OF UNCONSOLIDATED    JOINT VENTURES
Total revenue	$	66,417		$	35,150
Property operating expenses		(12,787	)		(7,339	)
Depreciation and amortization		(42,233	)		(17,975	)
Operating income		11,397			9,836
Other expenses		(2,105	)		(292	)
Net income	$	9,292		$	9,544
Equity in income of unconsolidated joint ventures	$	4,646		$	4,772

Note 6 – Leases

Master Lease

On July 7, 2015, subsidiaries of Seritage and subsidiaries of Sears Holdings entered into the Master Lease.  The Master Lease generally is a triple net lease with respect to all space which is leased thereunder to Sears Holdings, subject to proportional sharing by Sears Holdings for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by Sears Holdings and other space occupied by unrelated third-party tenants in the same or other buildings pursuant to third-party leases, space which is recaptured pursuant to the Company recapture rights described below and all other space which is constructed on the properties.  Under the Master Lease, Sears Holdings and/or one or more of its subsidiaries will be required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they lease the space.

F-18

The Master Lease has an initial term of 10 years and contains three options for five-year renewals of the term and a final option for a four-year renewal.  As of December 31, 2016 and December 31, 2015, the annual base rent paid directly by Sears Holdings and its subsidiaries under the Master Lease was approximately $134.0 million.  In each of the initial and first two renewal terms, annual base rent will be increased by 2.0% per annum for each lease year over the rent for the immediately preceding lease year.  For subsequent renewal terms, rent will be set at the commencement of the renewal term at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year.

Revenues from the Master Lease for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 are as follows (in thousands and excluding the effect of straight-line rent):

			July 7, 2015
			(Date Operations
	Year Ended		Commenced) to
	December 31, 2016		December 31, 2015
Rental income	$	133,237	$	64,838
Tenant reimbursements		55,823		25,204
Total revenue	$	189,060	$	90,042

The Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by Sears Holdings at the 224 Wholly Owned Properties initially included in the Master Lease (subject to certain exceptions).  While the Company will be permitted to exercise its recapture rights all at once or in stages as to any particular property, it will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of the parking areas and common areas.  Upon exercise of these recapture rights, the Company will generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears Holdings space and can reconfigure and rent the recaptured space to third-party tenants.

The Company also has the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings, after which the Company can reposition and re-lease those stores.  The lease termination payment is calculated as the greater of an amount specified at the time the Company entered into the Master Lease with Sears Holdings and an amount equal to 10 times the adjusted EBITDA attributable to such space within the Sears Holdings main store which is not attributable to the space subject to the separate 50% recapture right discussed above for the 12-month period ending at the end of the fiscal quarter ending immediately prior to recapturing such space.

F-19

As of December 31, 2016, the Company had exercised certain recapture rights with respect to 27 properties as follows:

Property	Recapture Type		Notice Date
Braintree, MA		100%	November 2015
Honolulu, HI		100%	December 2015
Memphis, TN		100%	December 2015
San Antonio, TX	Auto center		March 2016
Bowie, MD	Auto center		May 2016
Hagerstown, MD	Auto center		May 2016
Albany, NY	Auto center		May 2016
Fairfax, VA	Partial + autocenter		May 2016
Wayne, NJ	Partial		May 2016
Ft. Wayne, IN	Out parcel		July 2016
Orlando, FL		100%	July 2016
Anderson, SC	Partial		July 2016
West Jordan, UT	Partial		July 2016
Madison, WI	Partial + auto center		July 2016
North Hollywood, CA	Partial		July 2016
Warwick, RI	Auto center		October 2016
Rehoboth Beach, DE	Partial		October 2016
Charleston, SC	Partial		October 2016
West Hartford, CT		100%	October 2016
St. Petersburg, FL		100%	October 2016
Roseville, MI	Partial		November 2016
Troy, MI	Partial		November 2016
Santa Monica, CA		100%	December 2016
Santa Cruz, CA	Partial		December 2016
Guaynabo, PR	Partial		December 2016
Saugus, MA	Partial		December 2016
Carson, CA	Partial		December 2016

The Master Lease also provides for certain rights to Sears Holdings to terminate the Master Lease with respect to Wholly Owned Properties that cease to be profitable for operation by Sears Holdings.  In order to terminate the Master Lease with respect to a certain property, Sears Holdings must make a payment to the Company of an amount equal to one year of rent (together with taxes and other expenses) with respect to such property.  Sears Holdings must provide notice of not less than 90 days of their intent to exercise such termination right and such termination right will be limited so that it will not have the effect of reducing the fixed rent under the Master Lease by more than 20% per annum.

During the year ended December 31, 2016, Sears Holdings provided notice that it intended to exercise its right to terminate the Master Lease with respect to 17 stores totaling 1.7 million square feet of gross leasable area.  The aggregate annual base rent at these stores was approximately $6.0 million. Sears Holdings continued to pay Seritage rent until it vacated the stores in January 2017 and also paid Seritage a termination fee of approximately $10.0 million, an amount equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expenses.

F-20

The 17 properties are as follows:

Property	Square Feet
Cullman, AL		98,500
Sierra Vista, AZ		86,100
Thornton, CO		190,200
Chicago, IL		118,800
Springfield, IL		84,200
Elkhart, IN		86,500
Merrillville, IN		108,300
Houma, LA		96,700
New Iberia, LA		91,700
Alpena, MI		118,200
Manistee, MI		87,800
Sault Sainte Marie, MI		92,700
Kearney, NE		86,500
Deming, NM		96,600
Harlingen, TX		91,700
Yakima, WA		97,300
Riverton, WY		94,800
Total square feet		1,726,600

Subsequent to December 31, 2016, Sears Holdings provided notice that it intended to exercise its right to terminate the Master Lease with respect to 19 additional stores totaling 1.9 million square feet of gross leasable area.  The aggregate annual base rent at these stores is approximately $5.9 million.  Sears Holdings will continue to pay Seritage rent until it vacates the stores which is expected to occur in April 2017, and also will pay Seritage a termination fee equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expenses.

The 19 properties are as follows:

Property	Square Feet
El Paso, TX		103,657
Paducah, KY		108,244
Henderson, NV		122,823
Jefferson City, MO		92,016
Riverside, CA		94,500
Kissimmee, FL		112,505
Mount Pleasant, PA		83,536
Chapel Hill, OH		187,179
Concord, NC		137,499
Sioux Falls, SD		72,511
Platteville, WI		94,841
Muskogee, OK		87,500
Elkins, WV		94,885
Layton, UT		90,010
Detroit Lakes, MN		79,102
Hopkinsville, KY		70,326
Owensboro, KY		68,334
Leavenworth, KS		76,853
Kenton, OH		96,066
Total square feet		1,872,387

Lessor

The Company generally leases space to tenants under non-cancelable operating leases.  The leases typically provide for the payment of fixed base rents, as well as reimbursements of real estate taxes, insurance, maintenance and other costs.  Certain leases also provide for the payment by the lessee of additional rents based on a percentage of their sales.

F-21

As of December 31, 2016, future base rental revenue under non-cancelable operating leases, excluding extension options and signed leases for which rental payments have not yet commenced, is as follows (in thousands):

2017		164,242
2018		163,598
2019		163,537
2020		162,174
2021		163,442
Thereafter		622,419
	$	1,439,412

These future minimum amounts do not include tenant reimbursement income or additional rents based on a percentage of tenants’ sales.  For the year ended December 31, 2016, the Company recognized $62.5 million of tenant reimbursement income, as well as approximately $0.1 million of additional rent based on a percentage of tenants’ sales which was included in rental income.  For the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the Company recognized $26.9 million of tenant reimbursement income, as well as approximately $0.1 million of additional rent based on a percentage of tenants’ sales which was included in rental income.

As Lessee

In connection with the Transaction, the Company acquired a ground lease for one property.  During the year ended December 31, 2016, the Company recorded rent expense of approximately $0.2 million, which is classified within property operating expenses on the consolidated statements of operations.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the Company recorded rent expense of less than $0.1 million.  The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all options are exercised.

Note 7 – Mortgage Loans Payable

On July 7, 2015, pursuant to the Transaction, the Company entered into a mortgage loan agreement (the “Mortgage Loan Agreement”) and mezzanine loan agreement (collectively, the “Loan Agreements”), providing for term loans in an initial principal amount of approximately $1,161 million (collectively, the “Mortgage Loans”) and a $100 million future funding facility (the “Future Funding Facility”), which the Company expects to be available to finance the redevelopment of properties in its portfolio from time to time, subject to satisfaction of certain conditions.  As of December 31, 2016, the total principal amounts outstanding under the Mortgage Loans and the Future Funding Facility were $1,161 million and $20 million, respectively, and $80 million remained available under the Future Funding Facility for future draws by the Company.

Interest under the Mortgage Loans is due and payable on the payment dates, and all outstanding principal amounts are due when the loan matures on the payment date in July 2019, pursuant to the Loan Agreements.  The Company has two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions.  Borrowings under the Mortgage Loans bear interest at the London Interbank Offered Rates (“LIBOR”) plus, as of December 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis.  The weighted-average interest rate for the Mortgage Loans and Future Funding Facility for the year ended December 31, 2016 was 5.24%.  For the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the weighted-average interest rate for the Mortgage Loans was 4.96%.

The Loan Agreements contain a yield maintenance provision for the early extinguishment of the debt before March 9, 2018.  

The Mortgage Loans and Future Funding Facility are secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs.  The Loan Agreements contain customary covenants for a real estate financing, including restrictions that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds.

F-22

In November 2016, the Company and the servicer for our Mortgage Loans entered into amendments to our Loan Agreements to resolve a disagreement regarding one of the cash flow sweep provisions in our Loan Agreements.  The principal terms of these amendments are that the Company has (i) posted $30.0 million, and will post $3.3 million on a monthly basis, to a redevelopment project reserve account, which amounts may be used by the Company to fund redevelopment activity and (ii) extended the spread maintenance provision for prepayment of the loan by two months through March 9, 2018 (with the spread maintenance premium for the second month at a reduced amount).

The Company believes it is currently in compliance with all material terms and conditions of the Loan Agreements.

All obligations under the Loan Agreements are non-recourse to the borrowers and the pledgors of the JV Interests and the guarantors thereunder, except that (i) the borrowers and the guarantors will be liable, on a joint and several basis, for losses incurred by the lenders in respect of certain matters customary for commercial real estate loans, including misappropriation of funds and certain environmental liabilities and (ii) the indebtedness under the Loan Agreements will be fully recourse to the borrowers and guarantors upon the occurrence of certain events customary for commercial real estate loans, including without limitation prohibited transfers, prohibited voluntary liens, and bankruptcy.  Additionally the guarantors delivered a limited completion guaranty with respect to future redevelopments undertaken by the borrowers at the properties, and the Company must maintain (i) a net worth of not less than $1 billion and (ii) a minimum liquidity of not less than $50.0 million, throughout the term of the Loan Agreements.

The Company has incurred $22.3 million of debt issuance and other costs related to the Mortgage Loans and Future Funding Facility, including $0.9 million during the year ended December 31, 2016 and $21.4 million during the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, which are recorded as a direct deduction from the carrying amount of the Mortgage Loans and Future Funding Facility and amortized over the term of the Loan Agreements.  As of December 31, 2016, the unamortized balance of the Company’s debt issuance costs was $14.3 million as compared to $18.8 million as December 31, 2015.

Note 8 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for federal income tax purposes and expects to continue to operate to qualify as a REIT.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to currently distribute at least 90% of its adjusted REIT taxable income to its shareholders.

As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to its shareholders.  If the Company fails to qualify as a REIT or does not distribute 100% of its taxable income in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state, local and Puerto Rico taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income.

The Company evaluated whether any uncertain tax provisions exist as of December 31, 2016 and December 31, 2015 and concluded that there are no uncertain tax positions.

Note 9 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value.  The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).  ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.  In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in its assessment of fair value.

F-23

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

All derivative instruments are carried at fair value and are valued using Level 2 inputs.  The Company’s derivative instruments as of December 31, 2016 and December 31, 2015 included an interest rate cap.  The Company utilizes an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The fair value of the Company’s interest rate cap at December 31, 2016 and December 31, 2015 was approximately $0.7 million and $2.1 million, respectively, and is included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company has elected not to utilize hedge accounting and therefore the change in fair value is included within change in fair value of interest rate cap in the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the consolidated balance sheet include cash equivalents and mortgage loans payable.  The fair value of cash equivalents is classified as Level 1 and the fair value of mortgage loans payable is classified as Level 2.

Cash equivalents are carried at cost, which approximates fair value.  The fair value of mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings.  As of December 31, 2016 and December 31, 2015, the estimated fair value of the Company’s debt was $1.2 billion which approximated the carrying value at such date as the current risk-adjusted rate approximates the stated rates on the Company’s mortgages.

Note 10 – Commitments and Contingencies

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties.  The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2020.

Insurance premiums are charged directly to each of the retail properties.  The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material.  The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.  However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.  The Company does not believe that any resulting liability from such matters will have a material effect on the consolidated financial position, results of operations or liquidity of the Company.  Under the Master Lease, Sears Holdings has indemnified the Company from certain environmental liabilities at the Wholly Owned Properties existing before, or caused by Sears Holdings during, the period in which each Wholly Owned Property is leased to Sears Holdings, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities (and each JV Master Lease includes a similar requirement of Sears Holdings).  As of December 31, 2016 and December 31, 2015, the Company had approximately $11.8 million and $12.0 million, respectively, of restricted cash in a lender reserve account to fund potential environmental costs that were identified during due diligence related to the Transaction.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, the Company discloses the nature of the contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

F-24

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

In May and June of 2015, four purported Sears Holdings shareholders filed lawsuits in the Delaware Court of Chancery challenging the Transaction, which lawsuits have since been consolidated into a single action captioned In re Sears Holdings Corporation Stockholder and Derivative Litigation, Consol. C.A. No. 11081-VCL (the “Action”).  On October 15, 2015, plaintiffs filed a verified consolidated stockholder derivative complaint in the Action against the individual members of Sears Holdings’ Board of Directors, ESL Investments, Inc. (together with its affiliates, “ESL”), Sears Holdings’ CEO, Fairholme Capital Management L.L.C. (“FCM”), and Seritage.  On July 12, 2016, the plaintiffs filed a verified consolidated amended stockholder derivative complaint (the “Amended Complaint”) against the same defendants and asserting substantially the same claims as set forth in the complaint filed in October 2015.  The plaintiffs have brought the Action derivatively on behalf of Sears Holdings, which is named as a nominal defendant, and allege that the Sears Holdings directors, as well as ESL and Edward S. Lampert (in their capacity as the alleged controlling stockholder of Sears Holdings), breached their fiduciary duties to Sears Holdings shareholders by selling the Wholly Owned Properties to Seritage at a price that was unfairly low and was the result of a process that allegedly was flawed.  The Amended Complaint also alleges that Seritage and FCM aided and abetted these alleged fiduciary breaches.  Among other forms of relief, the Amended Complaint seeks damages in unspecified amounts.  In October 2016, following mediation, the parties reached an agreement-in-principle to settle the Action, which ultimately was reflected in a definitive Stipulation and Agreement of Settlement, Compromise and Release executed on February 8, 2017.  Pursuant to the settlement, (a) the defendants and the D&O insurers for the individual members of the Sears Holdings’ Board of Directors have agreed to pay (assuming satisfaction of all conditions) $40 million, of which Seritage has agreed to pay $19 million; and (b) all defendants will receive customary releases.  The Delaware Court of Chancery has scheduled a hearing on May 9, 2017, at which it will determine whether to approve the settlement, after customary notice to Sears Holding stockholders and an opportunity for them to object.  The defendants continue to deny the claims asserted and have entered into the settlement solely to avoid the burden, expense, distraction, and inherent risk in and of litigation.  While there can be no assurance that the settlement agreement will result in a definitive, court-approved agreement, the Company determined that its liability is both probable and estimable and recorded a litigation charge of $19.0 million during the year ended December 31, 2016.  The Company believes that the plaintiffs’ claims and allegations against the Company are legally without merit and, if the settlement is not approved, intends to contest the Action.

Note 11 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is Chairman and Chief Executive Officer of Sears Holdings and is the Chairman and Chief Executive Officer of ESL.  ESL beneficially owned approximately 53.2% and 49.6% of Sears Holdings’ outstanding common stock at December 31, 2016 and December 31, 2015, respectively.  Mr. Lampert is also the Chairman of Seritage.

As of December 31, 2016, ESL held an approximately 43.3% interest in Operating Partnership and approximately 3.7% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.  As of December 31, 2015, ESL held an approximately 43.4% interest in Operating Partnership and approximately 3.9% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively

Unsecured Term Loan

On February 23, 2017 (the “Closing Date”), the Operating Partnership, as borrower, and the Company, as guarantor, entered into a $200.0 million senior unsecured delayed draw term loan facility (the “Unsecured Term Loan”) with JPP, LLC (“JPP”) and JPP II, LLC, as lenders (collectively, the “Initial Lenders”), and JPP, as administrative agent (the “Administrative Agent”).

Loans under the Unsecured Term Loan (which was undrawn on the Closing Date) may be requested by the Operating Partnership at any time from the Closing Date until thirty days prior to the stated maturity date, upon five business days prior notice to the Administrative Agent.  The total commitments of the lenders under the Unsecured Term Loan is $200.0 million, provided, that, the maximum draw amount under the Unsecured Term Loan through April 30, 2017 is $100.0 million, which amount increases to $150.0 million on May 1, 2017 and $200.0 million on September 1, 2017, in each instance so long as no cash flow sweep period is then in effect and continuing as of such date under the Company’s Mortgage Loan Agreement.  Amounts drawn under the Unsecured Term Loan and repaid may not be redrawn.  

F-25

The Unsecured Term Loan will mature the earlier of (i) December 31, 2017 and (ii) the date on which the outstanding indebtedness under the Loan Agreements are repaid or refinanced in full.  The Unsecured Term Loan may be prepaid at any time in whole or in part, without any penalty or premium.    

The principal amount of loans outstanding under the Unsecured Term Loan will bear a base annual interest rate of 6.50%.  If a cash flow sweep period were to occur and be continuing under the Company’s Mortgage Loan Agreement (i) the interest rate on any outstanding advances would increase from and after such date by 1.5% per annum above the base interest rate and (ii) the interest rate on any advances made after such date would increase by 3.5% per annum above the base interest rate.  Accrued and unpaid interest will be payable in cash, except that during the continuance of a cash flow sweep period under the existing mortgage loan agreement, the Operating Partnership may defer the payment of interest which deferred amount would be added to the outstanding  principal balance of the loans.

On the Closing Date, the Operating Partnership paid to the Initial Lenders an upfront commitment fee equal to $1.0 million.  The Operating Partnership will also be required to pay an additional commitment fee of $1.0 million on the date that is ninety days after the Closing Date unless prior thereto (i) at least 33.3% of the principal amount of the Facility has been syndicated to lenders who are not affiliates of the Initial Lenders or (ii) the Unsecured Term Loan has been paid in full and the commitments have been terminated.  

The Unsecured Term Loan documentation requires that the Company at all times maintain (i) a net worth of not less than $1.0 billion, and (ii) a leverage ratio not to exceed 60.0%.

The Unsecured Term Loan includes customary representations and warranties, covenants and indemnities.  The Unsecured Term Loan also has customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, and bankruptcy or insolvency proceedings.  If there is an event of default, the Lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Unsecured Term Loan documents, and require the Operating Partnership to pay a default interest rate on overdue amounts equal to 1.50% in excess of the applicable base interest rate.

Mr. Edward S. Lampert, the Company’s Chairman, is the Chairman and Chief Executive Officer of ESL, which controls JPP, LLC and JPP II, LLC.  The terms of the Unsecured Term Loan were approved by the Company’s Audit Committee and the Company’s Board of Trustees (with Mr. Edward S. Lampert recusing himself).

Transition Services Agreement

On July 7, 2015, the Operating Partnership and Sears Holdings Management Corporation (“SHMC”), a wholly owned subsidiary of Sears Holdings, entered into a transition services agreement (the “Transition Services Agreement”, or “TSA”).  Pursuant to the TSA, SHMC was to provide certain limited services to the Operating Partnership during the period from the closing of the Transaction through the 18-month anniversary of the closing.  On January 7, 2017, the TSA expired by its terms.

During the year ended December 31, 2016, the services provided by SHMC were limited to specific accounting and tax services, substantially all of which were in support of the Company’s 2015 year-end activities.  Fees incurred for these services were approximately $0.1 million and are included in general and administrative expenses in the consolidated statements of operations.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the services provided by SHMC included select facilities management, accounting, treasury, tax and related support services.  Fees incurred for these services were approximately $0.2 million and are included in general and administrative expenses in the consolidated statements of operations.

Note 12 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”).  Pursuant to the Partnership Agreement, as the sole general partner of Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions and control of Operating Partnership, and may not be removed as general partner by the limited partners.  As of December 31, 2016, the Company held a 56.7% interest in the Operating Partnership and ESL held a 43.3% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the period presented.

Subsequent to December 31, 2016, 2,094,821 Operating Partnership units were converted to Class A shares resulting in the Company holding a 60.4% interest in the Operating Partnership and ESL holding a 39.6% interest.

F-26

Note 13 – Shareholders’ Equity

Class A Common Shares

On July 7, 2015, the Company issued 22,332,037 Class A common shares at a price of $29.58 per share, for aggregate proceeds of $660.6 million, pursuant to the Rights Offering.  The Company incurred costs of approximately $8.2 million related to the Rights Offering.  In addition, the Company issued and sold to subsidiaries of each of GGP and Simon 1,125,760 Class A common shares at a price of $29.58 per share, or an aggregate purchase price of $33.3 million, in transactions exempt from registration under the Securities Act. The subsidiary of GGP liquidated its position during the year ended December 31, 2016.

Subsequent to December 31, 2016, 2,094,821 Operating Partnership units were converted to Class A shares.

Class A shares have a par value of $0.01 per share.

Class B Non-Economic Common Shares

On July 7, 2015, the Company issued and sold to ESL 1,589,020 Class B non-economic common shares of beneficial interest in connection with an exchange of cash and subscription rights for Class B non-economic common shares in a transaction exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof.  The aggregate purchase price for the Class B non-economic common shares purchased by ESL was $0.9 million.  The Class B non-economic common shares have voting rights, but do not have economic rights and, as such, do not receive dividends and are not included in earnings per share computations.

Subsequent to December 31, 2016, 137,684 Class B shares were surrendered to the Company.

Class B non-economic common shares have a par value of $0.01 per share.

Class C Non-Voting Common Shares

On July 7, 2015, the Company issued 6,790,635 Class C non-voting common shares at a price of $29.58 per share, for aggregate proceeds of $200.9 million, pursuant to the Rights Offering.  The Class C non-voting common shares have economic rights, but do not have voting rights.  Upon any transfer of a Class C non-voting common share to any person other than an affiliate of the holder of such share, such share shall automatically convert into one Class A common share.

During the year ended December 31, 2016, 1,018,500 net shares of Class C non-voting common shares were converted to Class A common shares.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, 17,450 net shares of Class C non-voting common shares were converted to Class A common shares.

Class C non-voting shares have a par value of $0.01 per share.

Dividends and Distributions

On November 1, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended December 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2016.  The dividends and distributions payable were recorded as liabilities on the Company's condensed consolidated balance sheet at December 31, 2016.  The dividend has been reflected as a reduction of shareholders' equity and the distribution has been reflected as a reduction of the limited partners' non-controlling interest.  These amounts were paid on January 12, 2017.

On August 2, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended September 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held as of September 30, 2016.  These amounts were paid on October 13, 2016.

On May 3, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended June 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on June 30, 2016. These amounts were paid on July 14, 2016.

On March 8, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended March 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on March 31, 2016.  These amounts were paid on April 14, 2016.

F-27

On December 17, 2015, the Company declared a cash dividend of $0.50 per Class A and Class C common share for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2015.  These amounts were paid on January 14, 2016.

The Company declared total dividends of $1.00 per Class A and Class C common share during the year ended December 31, 2016 and $0.50 per Class A and Class C common share during the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The dividends have been reflected as follows for federal income tax purposes:

			July 7, 2015
	Year Ended		(date operations commenced) to
	December 31,		December 31,
	2016		2015
Ordinary income	$	1.00	$	0.50
Return of capital		—		—
Total	$	1.00	$	0.50

On February 28, 2017, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ending March 31, 2017.  The holders of Operating Partnership units are entitled to an equal distribution per Operating Partnership unit held on March 31, 2016.  These amounts will be paid on April 13, 2017.

Note 14 – Earnings per Share

The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders as they do not have economic rights.

(in thousands except per share amounts)				July 7, 2015
				(Date Operations
	Year Ended			Commenced) to
	December 31, 2016			December 31, 2015
Numerator - Basic and Diluted
Net loss	$	(91,009	)	$	(38,803	)
Net loss attributable to non-controlling interests		39,451			16,465
Net loss attributable to common shareholders	$	(51,558	)	$	(22,338	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		25,497			24,707
Weighted average Class C common shares outstanding		5,919			6,679
Weighted average Class A and Class C common    shares outstanding		31,416			31,386
Net loss per share attributable to Class A and Class C    common shareholders	$	(1.64	)	$	(0.71	)

No adjustments were made to the numerator for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, because the Company generated a net loss.  During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

F-28

No adjustments were made to the denominator for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share.

As of December 31, 2016 and December 31, 2015, there were 216,348 and 221,484 shares, respectively, of non-vested restricted stock outstanding.

Note 15 – Stock Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000 shares have been registered with the SEC. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the “Awards”).  Directors, officers, other employees and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares

Pursuant to the Plan, the Company made grants of restricted shares and share units during the year ended December 31, 2016 and the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted shares and share units vest either immediately or in equal annual amounts over the next three years (time-based vesting) and a portion of the restricted shares vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting).  As of December 31, 2016, the performance criteria have not been met.

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares that do not vest are forfeited.  Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest.  Dividends on restricted shares with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares.

The following table summarizes restricted share activity for the grant periods ended December 31, 2016 and December 31, 2015:

						July 7, 2015 (date operations commenced)
	Year Ended December 31, 2016					to December 31, 2015
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		221,484		$	37.18		—		$	—
Restricted shares granted		23,324			46.48		238,387			30.73
Restricted shares vested		(28,460	)		31.18		(16,903	)		29.58
Restricted shares forfeited		—			—		—			—
Unvested restricted shares at end of period		216,348		$	38.98		221,484		$	37.18

The Company recognized $1.1 million in compensation expense related to the restricted shares during the year ended December 31, 2016 and $0.9 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015. Compensation expenses related to the restricted shares are included in general and administrative on the Company's consolidated statements of operations.  As of December 31, 2016, there were $8.2 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.7 years. As of December 31, 2015 there were $6.4 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.8 years.

F-29

Note 16 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities (in thousands):

	December 31, 2016		December 31, 2015
Accounts payable and accrued expenses	$	26,463	$	13,793
Accrued real estate taxes		23,942		25,333
Litigation charge		19,000		—
Below-market leases		16,827		18,986
Dividends payable		14,132		27,894
Environmental reserve		11,584		11,824
Deferred maintenance		4,124		10,281
Accrued interest		3,004		2,748
Prepaid rental income		1,979		1,331
Sears Holdings payable		—		8,670
Total accounts payable, accrued expenses and other    liabilities	$	121,055	$	120,860

Note 17 – Quarterly Financial Information (unaudited)

The following table sets forth the selected quarterly financial data for the Company (in thousands, except per share amounts):

	2016												2015
													July 7 (Date
													Operations
	Quarter Ended			Quarter Ended			Quarter Ended			QuarterEnded			Commenced) to			Quarter Ended
	March 31			June 30			September 30			December 31			September 30			December 31
Total revenue	$	63,004		$	61,867		$	57,607		$	66,196		$	54,063		$	59,508
Operating income (loss)		396			2,765			(22,771	)		(10,837	)		(16,550	)		7,177
Net loss		(14,714	)		(12,565	)		(37,247	)		(26,483	)		(31,853	)		(6,950	)
Net loss attributable to common shareholders		(8,335	)		(7,117	)		(21,102	)		(15,004	)		(18,301	)		(4,037	)
Net loss per share attributable to Class A and    Class C common shareholders - Basic    and diluted		(0.27	)		(0.23	)		(0.67	)		(0.48	)		(0.58	)		(0.13	)
Weighted average Class A and Class C    common shares outstanding - Basic    and diluted		31,391			31,391			31,419			31,418			31,384			31,391

F-30

SERITAGE GROWTH PROPERTIES

SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2016

(Dollars in thousands)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition						at Close of Period (2)										Life Upon Which
					Buildings and					Buildings and					Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land			Improvements			Land		Improvements		Total		Depreciation			Acquired	is Computed
The Mall at Sears	Anchorage, AK	(3)	$	11,517	$	11,729	$	—		$	819		$	11,517	$	12,548	$	24,065	$	(1,267	)	July, 2015	(4)
Freestanding	Cullman, AL	(3)		947		846		—			—			947		846		1,793		(117	)	July, 2015	(4)
McCain Mall	North Little Rock, AR	(3)		1,288		2,881		—			—			1,288		2,881		4,169		(447	)	July, 2015	(4)
Freestanding	Russellville, AR	(3)		318		1,270		—			—			318		1,270		1,588		(150	)	July, 2015	(4)
Flagstaff Mall	Flagstaff, AZ	(3)		932		2,179		—			—			932		2,179		3,111		(216	)	July, 2015	(4)
Superstition Springs	Mesa, AZ	(3)		2,661		2,559		—			—			2,661		2,559		5,220		(337	)	July, 2015	(4)
Shopping Center	Peoria, AZ	(3)		1,204		509		—			—			1,204		509		1,713		(196	)	July, 2015	(4)
Desert Sky Mall	Phoenix , AZ	(3)		2,605		2,448		—			—			2,605		2,448		5,053		(293	)	July, 2015	(4)
Freestanding	Phoenix , AZ	(3)		568		1,088		—			—			568		1,088		1,656		(215	)	July, 2015	(4)
Prescott Gateway Mall	Prescott, AZ	(3)		1,071		835		—			—			1,071		835		1,906		(183	)	July, 2015	(4)
The Mall at Sierra Vista	Sierra Vista, AZ	(3)		1,252		1,791		—			—			1,252		1,791		3,043		(177	)	July, 2015	(4)
Freestanding	Sierra Vista, AZ	(3)		938		1,736		—			—			938		1,736		2,674		(266	)	July, 2015	(4)
Park Place	Tucson, AZ	(3)		5,207		3,458		—			—			5,207		3,458		8,665		(406	)	July, 2015	(4)
Southgate Mall	Yuma, AZ	(3)		1,485		1,596		—			—			1,485		1,596		3,081		(272	)	July, 2015	(4)
Kmart Center	Antioch, CA	(3)		1,594		2,525		—			—			1,594		2,525		4,119		(245	)	July, 2015	(4)
Big Bear Lake Shopping Center	Big Bear Lake, CA	(3)		3,664		2,945		—			—			3,664		2,945		6,609		(257	)	July, 2015	(4)
Southbay Pavilion	Carson, CA	(3)		11,476		5,223		—			7			11,476		5,230		16,706		(574	)	July, 2015	(4)
Chula Vista Center	Chula Vista, CA	(3)		7,315		6,834		—			—			7,315		6,834		14,149		(586	)	July, 2015	(4)
Sunrise Mall	Citrus Heights, CA	(3)		3,778		2,088		—			—			3,778		2,088		5,866		(707	)	July, 2015	(4)
Freestanding	Delano, CA	(3)		1,905		2,208		—			—			1,905		2,208		4,113		(263	)	July, 2015	(4)
Parkway Plaza	El Cajon, CA	(3)		10,573		2,883		—			—			10,573		2,883		13,456		(647	)	July, 2015	(4)
Imperial Valley Mall	El Centro, CA	(3)		3,877		3,977		—			—			3,877		3,977		7,854		(403	)	July, 2015	(4)
Solano	Fairfield, CA	(3)		3,679		1,366		—			—			3,679		1,366		5,045		(195	)	July, 2015	(4)
Florin Mall	Florin, CA	(3)		1,022		1,366		—			—			1,022		1,366		2,388		(306	)	July, 2015	(4)
Manchester Mall	Fresno, CA	(3)		1,370		2,000		—			—			1,370		2,000		3,370		(577	)	July, 2015	(4)
Mill Creek Marketplace	McKinleyville, CA	(3)		1,354		1,655		—			—			1,354		1,655		3,009		(233	)	July, 2015	(4)
Merced Mall	Merced, CA	(3)		2,534		1,604		—			—			2,534		1,604		4,138		(337	)	July, 2015	(4)
Montclair Plaza	Montclair, CA	(3)		2,498		2,119		—			—			2,498		2,119		4,617		(144	)	July, 2015	(4)
Moreno Valley Mall	Moreno Valley, CA	(3)		3,898		3,407		—			—			3,898		3,407		7,305		(394	)	July, 2015	(4)
NewPark Mall	Newark, CA	(3)		4,312		3,268		—			—			4,312		3,268		7,580		(475	)	July, 2015	(4)
Valley Plaza	North Hollywood, CA	(3)		8,049		3,172		—			—			8,049		3,172		11,221		(205	)	July, 2015	(4)
Northridge Fashion Center	Northridge, CA	(3)		5,402		3,466		—			—			5,402		3,466		8,868		(412	)	July, 2015	(4)
Palm Desert	Palm Desert, CA	(3)		5,473		1,705		(542	)		(169	)		4,931		1,536		6,467		(279	)	July, 2015	(4)
Ramona Station	Ramona, CA	(3)		7,239		1,452		—			16			7,239		1,468		8,707		(324	)	July, 2015	(4)
Freestanding	Riverside, CA	(3)		4,397		4,407		—			—			4,397		4,407		8,804		(620	)	July, 2015	(4)
Freestanding	Riverside, CA	(3)		2,670		2,489		—			54			2,670		2,543		5,213		(334	)	July, 2015	(4)
Galleria at Roseville	Roseville, CA	(3)		4,848		3,215		—			—			4,848		3,215		8,063		(331	)	July, 2015	(4)
Northridge Mall	Salinas, CA	(3)		2,644		4,394		—			—			2,644		4,394		7,038		(547	)	July, 2015	(4)
Inland Center	San Bernardino, CA	(3)		4,131		2,066		—			—			4,131		2,066		6,197		(385	)	July, 2015	(4)

F-31

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Shops at Tanforan	San Bruno, CA	(3)		7,854		4,642		—		—		7,854		4,642		12,496		(528	)	July, 2015	(4)
University Town Centre (UTC)	San Diego, CA	(3)		22,445		14,094		—		1,738		22,445		15,832		38,277		(873	)	July, 2015	(4)
Eastridge Mall (CA)	San Jose, CA	(3)		1,531		2,356		—		—		1,531		2,356		3,887		(722	)	July, 2015	(4)
Capitola Mall	Santa Cruz, CA	(3)		4,338		4,803		—		—		4,338		4,803		9,141		(391	)	July, 2015	(4)
Santa Maria Town Center	Santa Maria, CA	(3)		3,967		2,635		—		—		3,967		2,635		6,602		(225	)	July, 2015	(4)
Freestanding	Santa Monica, CA	(3)		43,916		3,973		—		—		43,916		3,973		47,889		(251	)	July, 2015	(4)
Freestanding	Santa Paula, CA	(3)		2,002		1,147		—		—		2,002		1,147		3,149		(249	)	July, 2015	(4)
Promenade in Temecula	Temecula, CA	(3)		6,098		2,214		—		—		6,098		2,214		8,312		(401	)	July, 2015	(4)
Janss Marketplace	Thousand Oaks, CA	(3)		9,853		14,785		—		2,768		9,853		17,553		27,406		(850	)	July, 2015	(4)
Pacific View	Ventura, CA	(3)		5,578		6,172		—		—		5,578		6,172		11,750		(229	)	July, 2015	(4)
Sequoia Mall	Visalia, CA	(3)		2,967		2,243		—		—		2,967		2,243		5,210		(232	)	July, 2015	(4)
West Covina	West Covina, CA	(3)		5,972		2,053		—		—		5,972		2,053		8,025		(459	)	July, 2015	(4)
Westminster Mall	Westminster, CA	(3)		6,845		5,651		—		—		6,845		5,651		12,496		(497	)	July, 2015	(4)
Westland Shopping Center	Lakewood, CO	(3)		1,290		4,550		—		—		1,290		4,550		5,840		(343	)	July, 2015	(4)
Thornton Place	Thornton, CO	(3)		1,881		1,300		—		—		1,881		1,300		3,181		(585	)	July, 2015	(4)
Crystal Mall	Waterford, CT	(3)		1,371		2,534		—		—		1,371		2,534		3,905		(300	)	July, 2015	(4)
Corbin's Corner	West Hartford, CT	(3)		6,434		10,466		—		—		6,434		10,466		16,900		(765	)	July, 2015	(4)
Freestanding	Rehoboth Beach, DE	(3)		714		4,523		—		—		714		4,523		5,237		(412	)	July, 2015	(4)
Altamonte Mall	Altamonte Springs, FL	(3)		4,051		6,788		—		—		4,051		6,788		10,839		(582	)	July, 2015	(4)
Town Center at Boca Raton	Boca Raton, FL	(3)		16,090		7,479		—		—		16,090		7,479		23,569		(701	)	July, 2015	(4)
DeSoto Square	Bradenton, FL	(3)		958		900		—		7		958		907		1,865		(263	)	July, 2015	(4)
Beachway Plaza	Bradenton, FL	(3)		1,420		1,479		—		—		1,420		1,479		2,899		(207	)	July, 2015	(4)
Countryside	Clearwater, FL	(3)		5,852		17,777		—		818		5,852		18,595		24,447		(932	)	July, 2015	(4)
Miami International Mall	Doral, FL	(3)		9,214		2,654		—		—		9,214		2,654		11,868		(552	)	July, 2015	(4)
Edison Mall	Ft. Myers, FL	(3)		3,168		2,853		—		—		3,168		2,853		6,021		(287	)	July, 2015	(4)
The Oaks Mall	Gainesville, FL	(3)		2,439		1,205		—		—		2,439		1,205		3,644		(167	)	July, 2015	(4)
Westland Shopping Mall	Hialeah, FL	(3)		9,683		3,472		—		—		9,683		3,472		13,155		(363	)	July, 2015	(4)
Freestanding	Hialeah, FL	(3)		5,492		2,344		—		—		5,492		2,344		7,836		(222	)	July, 2015	(4)
Center of Osceola	Kissimmee, FL	(3)		2,107		2,556		—		—		2,107		2,556		4,663		(318	)	July, 2015	(4)
Lakeland Square	Lakeland, FL	(3)		1,503		1,045		—		—		1,503		1,045		2,548		(204	)	July, 2015	(4)
Freestanding	Melbourne, FL	(3)		2,441		1,981		—		—		2,441		1,981		4,422		(324	)	July, 2015	(4)
Aventura Mall	Miami, FL	(3)		13,265		61,576		—		—		13,265		61,576		74,841		(2,462	)	July, 2015	(4)
Southland Mall (FL)	Miami, FL	(3)		5,219		1,236		—		—		5,219		1,236		6,455		(412	)	July, 2015	(4)
Coastland Center	Naples, FL	(3)		8,857		2,209		—		—		8,857		2,209		11,066		(347	)	July, 2015	(4)
Freestanding	North Miami, FL	(3)		4,748		2,434		—		—		4,748		2,434		7,182		(336	)	July, 2015	(4)
Paddock Mall	Ocala, FL	(3)		2,468		1,150		—		—		2,468		1,150		3,618		(220	)	July, 2015	(4)
Kmart Shopping Center	Orange Park, FL	(3)		1,477		1,701		—		401		1,477		2,102		3,579		(249	)	July, 2015	(4)
Orlando Fashion Square	Orlando, FL	(3)		4,403		3,626		—		—		4,403		3,626		8,029		(581	)	July, 2015	(4)
Panama City Mall	Panama City, FL	(3)		3,227		1,614		—		—		3,227		1,614		4,841		(1,107	)	July, 2015	(4)
University Town Plaza	Pensacola, FL	(3)		2,620		2,990		—		—		2,620		2,990		5,610		(357	)	July, 2015	(4)
Westfield Broward	Plantation, FL	(3)		6,933		2,509		—		—		6,933		2,509		9,442		(424	)	July, 2015	(4)
Sarasota Square	Sarasota, FL	(3)		3,920		2,200		—		—		3,920		2,200		6,120		(333	)	July, 2015	(4)

F-32

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Freestanding	St. Petersburg, FL	(3)		1,653		777		—		—		1,653		777		2,430		(253	)	July, 2015	(4)
Tyrone Square Mall	St. Petersburg, FL	(3)		2,381		2,420		—		—		2,381		2,420		4,801		(412	)	July, 2015	(4)
Cumberland Mall	Atlanta, GA	(3)		8,891		6,469		—		3		8,891		6,472		15,363		(495	)	July, 2015	(4)
Oglethorpe Mall	Savannah, GA	(3)		5,285		3,012		—		—		5,285		3,012		8,297		(296	)	July, 2015	(4)
Freestanding	Honolulu (5), HI	(3)		6,824		2,195		—		—		6,824		2,195		9,019		(138	)	July, 2015	(4)
Freestanding	Algona, IA	(3)		644		2,796		—		—		644		2,796		3,440		(234	)	July, 2015	(4)
Lindale Mall	Cedar Rapids, IA	(3)		2,833		2,197		—		—		2,833		2,197		5,030		(268	)	July, 2015	(4)
Freestanding	Charles City, IA	(3)		793		1,914		—		—		793		1,914		2,707		(259	)	July, 2015	(4)
Webster City Plaza	Webster City, IA	(3)		392		896		—		—		392		896		1,288		(102	)	July, 2015	(4)
Boise Towne Square	Boise, ID	(3)		1,828		1,848		—		—		1,828		1,848		3,676		(217	)	July, 2015	(4)
Freestanding	Chicago, IL	(3)		3,665		3,504		—		—		3,665		3,504		7,169		(193	)	July, 2015	(4)
Freestanding	Chicago, IL	(3)		905		804		—		—		905		804		1,709		(156	)	July, 2015	(4)
Kedzie Square	Chicago, IL	(3)		2,385		7,924		—		—		2,385		7,924		10,309		(531	)	July, 2015	(4)
Homewood Square	Homewood, IL	(3)		3,954		4,766		—		36		3,954		4,802		8,756		(493	)	July, 2015	(4)
Louis Joliet Shopping Mall	Joliet, IL	(3)		2,557		3,108		—		—		2,557		3,108		5,665		(507	)	July, 2015	(4)
Freestanding	Lombard, IL	(3)		2,685		8,281		—		—		2,685		8,281		10,966		(462	)	July, 2015	(4)
Freestanding	Moline, IL	(3)		2,010		751		—		—		2,010		751		2,761		(263	)	July, 2015	(4)
North Riverside Park Mall	North Riverside, IL	(3)		1,846		3,178		—		—		1,846		3,178		5,024		(387	)	July, 2015	(4)
Orland Square	Orland Park, IL	(3)		1,783		974		—		—		1,783		974		2,757		(229	)	July, 2015	(4)
Sherwood Plaza	Springfield, IL	(3)		2,182		5,051		—		—		2,182		5,051		7,233		(527	)	July, 2015	(4)
Freestanding	Steger, IL	(3)		589		2,846		—		—		589		2,846		3,435		(160	)	July, 2015	(4)
North Pointe Plaza	Elkhart, IN	(3)		1,349		869		—		—		1,349		869		2,218		(128	)	July, 2015	(4)
Glenbrook Square	Ft. Wayne, IN	(3)		3,247		5,476		—		—		3,247		5,476		8,723		(475	)	July, 2015	(4)
Broadway Center	Merrillville, IN	(3)		3,413		3,224		—		—		3,413		3,224		6,637		(509	)	July, 2015	(4)
Freestanding	Leavenworth, KS	(3)		397		705		—		—		397		705		1,102		(161	)	July, 2015	(4)
Metcalf Shopping Center	Overland Park, KS	(3)		2,775		1,766		—		—		2,775		1,766		4,541		(408	)	July, 2015	(4)
Pennyrile Marketplace	Hopkinsville, KY	(3)		553		2,815		—		—		553		2,815		3,368		(325	)	July, 2015	(4)
Audubon Plaza	Owensboro, KY	(3)		411		1,083		—		—		411		1,083		1,494		(107	)	July, 2015	(4)
Kentucky Oaks	Paducah, KY	(3)		1,022		2,868		—		—		1,022		2,868		3,890		(298	)	July, 2015	(4)
Freestanding	Houma, LA	(3)		590		2,030		—		—		590		2,030		2,620		(239	)	July, 2015	(4)
The Mall of Acadiana	Lafayette, LA	(3)		1,406		5,094		—		—		1,406		5,094		6,500		(512	)	July, 2015	(4)
Freestanding	New Iberia, LA	(3)		450		1,819		—		—		450		1,819		2,269		(291	)	July, 2015	(4)
Braintree Marketplace	Braintree (5), MA	(3)		6,585		5,614		—		9,889		6,585		15,503		22,088		(358	)	July, 2015	(4)
Square One Mall	Saugus, MA	(3)		1,656		2,835		—		—		1,656		2,835		4,491		(426	)	July, 2015	(4)
Bowie Town Center	Bowie, MD	(3)		4,583		2,335		—		—		4,583		2,335		6,918		(280	)	July, 2015	(4)
Hunt Valley Towne Centre	Cockeysville, MD	(3)		5,768		2,319		—		—		5,768		2,319		8,087		(306	)	July, 2015	(4)
South River Colony	Edgewater, MD	(3)		5,534		2,116		—		—		5,534		2,116		7,650		(317	)	July, 2015	(4)
Valley Mall (MD)	Hagerstown, MD	(3)		2,877		1,378		—		—		2,877		1,378		4,255		(298	)	July, 2015	(4)
Midtown Shopping Center	Madawaska, ME	(3)		140		942		—		—		140		942		1,082		(64	)	July, 2015	(4)
Freestanding	Alpena, MI	(3)		782		1,427		—		—		782		1,427		2,209		(228	)	July, 2015	(4)
Jackson Crossing	Jackson, MI	(3)		2,720		1,184		—		—		2,720		1,184		3,904		(297	)	July, 2015	(4)
Lincoln Park Shopping Center	Lincoln Park, MI	(3)		1,106		3,198		—		—		1,106		3,198		4,304		(390	)	July, 2015	(4)
Hillside Plaza	Manistee, MI	(3)		508		3,045		—		—		508		3,045		3,553		(355	)	July, 2015	(4)

F-33

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Macomb Mall	Roseville, MI	(3)		3,286		4,778		—		—		3,286		4,778		8,064		(557	)	July, 2015	(4)
Freestanding	Sault Ste. Marie, MI	(3)		946		917		—		—		946		917		1,863		(192	)	July, 2015	(4)
Freestanding	St. Clair Shores, MI	(3)		2,399		1,797		—		—		2,399		1,797		4,196		(249	)	July, 2015	(4)
Oakland Mall	Troy, MI	(3)		7,954		2,651		—		—		7,954		2,651		10,605		(758	)	July, 2015	(4)
Freestanding	Ypsilanti, MI	(3)		2,462		1,277		—		—		2,462		1,277		3,739		(331	)	July, 2015	(4)
Burnsville Center	Burnsville, MN	(3)		3,513		1,281		—		—		3,513		1,281		4,794		(452	)	July, 2015	(4)
Detroit Lakes K Mart Plaza	Detroit Lakes, MN	(3)		1,130		1,220		—		—		1,130		1,220		2,350		(287	)	July, 2015	(4)
Maplewood Mall	Maplewood, MN	(3)		3,605		1,162		—		—		3,605		1,162		4,767		(307	)	July, 2015	(4)
Freestanding	St. Paul, MN	(3)		1,866		1,028		—		—		1,866		1,028		2,894		(348	)	July, 2015	(4)
Freestanding	Cape Girardeau, MO	(3)		609		908		—		—		609		908		1,517		(95	)	July, 2015	(4)
Flower Valley Shopping Center	Florissant, MO	(3)		2,430		1,607		—		—		2,430		1,607		4,037		(290	)	July, 2015	(4)
Freestanding	Jefferson City, MO	(3)		957		2,224		—		—		957		2,224		3,181		(243	)	July, 2015	(4)
Kickapoo Corners	Springfield, MO	(3)		922		2,050		—		—		922		2,050		2,972		(215	)	July, 2015	(4)
Columbus Centre	Columbus, MS	(3)		2,940		2,547		—		—		2,940		2,547		5,487		(360	)	July, 2015	(4)
Freestanding	Havre, MT	(3)		600		790		—		—		600		790		1,390		(138	)	July, 2015	(4)
Asheville Mall	Asheville, NC	(3)		4,141		2,036		—		—		4,141		2,036		6,177		(347	)	July, 2015	(4)
Concord Plaza	Concord, NC	(3)		2,325		1,275		—		—		2,325		1,275		3,600		(414	)	July, 2015	(4)
Landmark Center	Greensboro, NC	(3)		3,869		4,387		—		746		3,869		5,133		9,002		(528	)	July, 2015	(4)
Kmart Shopping Center	Minot, ND	(3)		1,724		2,925		—		—		1,724		2,925		4,649		(327	)	July, 2015	(4)
Freestanding	Kearney, NE	(3)		272		483		—		—		272		483		755		(93	)	July, 2015	(4)
Mall of New Hampshire	Manchester, NH	(3)		1,458		4,160		—		—		1,458		4,160		5,618		(355	)	July, 2015	(4)
Pheasant Lane Mall	Nashua, NH	(3)		1,794		7,255		—		—		1,794		7,255		9,049		(363	)	July, 2015	(4)
Fox Run Mall	Portsmouth, NH	(3)		3,934		3,375		—		—		3,934		3,375		7,309		(427	)	July, 2015	(4)
Mall at Rockingham Park	Salem, NH	(3)		3,321		12,198		—		—		3,321		12,198		15,519		(777	)	July, 2015	(4)
Freestanding	Middletown, NJ	(3)		5,647		2,941		—		161		5,647		3,102		8,749		(769	)	July, 2015	(4)
Freestanding	Watchung, NJ	(3)		6,704		4,110		—		—		6,704		4,110		10,814		(550	)	July, 2015	(4)
Willowbrook Mall	Wayne, NJ	(3)		12,850		4,553		—		—		12,850		4,553		17,403		(763	)	July, 2015	(4)
Freestanding	Deming, NM	(3)		1,085		1,194		—		—		1,085		1,194		2,279		(191	)	July, 2015	(4)
Freestanding	Farmington, NM	(3)		1,480		1,845		—		—		1,480		1,845		3,325		(241	)	July, 2015	(4)
Kmart Shopping Center	Hobbs, NM	(3)		1,386		2,557		—		—		1,386		2,557		3,943		(260	)	July, 2015	(4)
Eastern Commons Shopping Center	Henderson, NV	(3)		3,124		1,362		—		—		3,124		1,362		4,486		(308	)	July, 2015	(4)
Meadows Mall	Las Vegas, NV	(3)		3,354		1,879		—		—		3,354		1,879		5,233		(324	)	July, 2015	(4)
Meadowood Mall	Reno, NV	(3)		2,135		5,748		—		—		2,135		5,748		7,883		(299	)	July, 2015	(4)
Colonie Center	Albany, NY	(3)		8,289		6,523		—		—		8,289		6,523		14,812		(693	)	July, 2015	(4)
Great Northern Mall	Clay, NY	(3)		787		4,134		—		—		787		4,134		4,921		(368	)	July, 2015	(4)
Huntington Square Mall	East Northport, NY	(3)		7,617		2,065		—		—		7,617		2,065		9,682		(377	)	July, 2015	(4)
Freestanding	Hicksville, NY	(3)		38,626		19,065		—		—		38,626		19,065		57,691		(1,695	)	July, 2015	(4)
Oakdale Mall	Johnson City, NY	(3)		2,169		934		—		—		2,169		934		3,103		(183	)	July, 2015	(4)
Freestanding	Olean, NY	(3)		249		2,124		—		—		249		2,124		2,373		(238	)	July, 2015	(4)
Mall at Greece Ridge Center	Rochester, NY	(3)		3,082		1,560		—		—		3,082		1,560		4,642		(367	)	July, 2015	(4)
Sidney Plaza	Sidney, NY	(3)		1,942		1,769		—		—		1,942		1,769		3,711		(576	)	July, 2015	(4)
Eastview Mall	Victor, NY	(3)		4,144		1,391		—		—		4,144		1,391		5,535		(374	)	July, 2015	(4)

F-34

							Costs Capitalized					Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition					at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and					Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements			Land		Improvements		Total		Depreciation			Acquired	is Computed
Jefferson Valley Mall	Yorktown Heights, NY	(3)		3,584		1,569		—		—			3,584		1,569		5,153		(345	)	July, 2015	(4)
Belden Village	Canton, OH	(3)		1,650		5,854		—		—			1,650		5,854		7,504		(631	)	July, 2015	(4)
Chapel Hill Mall	Chapel Hill, OH	(3)		444		1,460		—		—			444		1,460		1,904		(469	)	July, 2015	(4)
Dayton Mall	Dayton, OH	(3)		2,650		1,223		—		—			2,650		1,223		3,873		(381	)	July, 2015	(4)
Freestanding	Kenton, OH	(3)		340		417		—		—			340		417		757		(187	)	July, 2015	(4)
Freestanding	Marietta, OH	(3)		598		706		—		—			598		706		1,304		(132	)	July, 2015	(4)
Great Lakes Mall	Mentor, OH	(3)		1,092		1,776		—		—			1,092		1,776		2,868		(343	)	July, 2015	(4)
Southland Shopping Center	Middleburg Heights, OH	(3)		698		1,547		—		—			698		1,547		2,245		(249	)	July, 2015	(4)
Kmart Plaza	North Canton, OH	(3)		1,044		1,126		—		—			1,044		1,126		2,170		(189	)	July, 2015	(4)
Freestanding	Tallmadge, OH	(3)		870		682		—		—			870		682		1,552		(173	)	July, 2015	(4)
Westgate Village Shopping Center	Toledo, OH	(3)		1,664		1,289		—		—			1,664		1,289		2,953		(229	)	July, 2015	(4)
Freestanding	Muskogee, OK	(3)		647		966		—		—			647		966		1,613		(210	)	July, 2015	(4)
Freestanding	Oklahoma City, OK	(3)		1,542		2,210		—		—			1,542		2,210		3,752		(583	)	July, 2015	(4)
Freestanding	Tulsa, OK	(3)		2,048		5,386		—		1,573			2,048		6,959		9,007		(508	)	July, 2015	(4)
Clackamas Town Center	Happy Valley, OR	(3)		6,659		1,271		—		—			6,659		1,271		7,930		(196	)	July, 2015	(4)
Freestanding	The Dalles, OR	(3)		616		775		—		—			616		775		1,391		(147	)	July, 2015	(4)
Walnut Bottom Towne Centre	Carlisle, PA	(3)		1,103		1,725		—		—			1,103		1,725		2,828		(86	)	July, 2015	(4)
Shops at Prospect	Columbia, PA	(3)		897		2,202		—		6			897		2,208		3,105		(204	)	July, 2015	(4)
King of Prussia	King Of Prussia (6), PA	(3)		—		42,300		—		-			—		42,300		42,300		(1,849	)	July, 2015	(4)
Kmart & Lowes Shopping Center	Lebanon, PA	(3)		1,333		2,085		—		—			1,333		2,085		3,418		(423	)	July, 2015	(4)
Countryside Shopping Center	Mount Pleasant, PA	(3)		970		1,520		—		—			970		1,520		2,490		(262	)	July, 2015	(4)
Freestanding	Walnutport, PA	(3)		885		3,452		—		—			885		3,452		4,337		(434	)	July, 2015	(4)
Haines Acres Shopping Center	York, PA	(3)		1,096		1,414		—		3			1,096		1,417		2,513		(176	)	July, 2015	(4)
Rexville (Bayamon) Towne Center	Bayamon, PR	(3)		656		7,173		—		1			656		7,174		7,830		(445	)	July, 2015	(4)
Las Catalinas	Caguas, PR	(3)		431		9,362		—		—			431		9,362		9,793		(536	)	July, 2015	(4)
Plaza Carolina	Carolina, PR	(3)		611		8,640		—		—			611		8,640		9,251		(584	)	July, 2015	(4)
Plaza Guaynabo	Guaynabo, PR	(3)		1,603		26,695		—		—			1,603		26,695		28,298		(1,436	)	July, 2015	(4)
Western Plaza	Mayaguez, PR	(3)		564		4,555		—		—			564		4,555		5,119		(387	)	July, 2015	(4)
Ponce Towne Center	Ponce, PR	(3)		473		3,965		—		—			473		3,965		4,438		(302	)	July, 2015	(4)
Rhode Island Mall	Warwick, RI	(3)		9,166		3,388		—		—			9,166		3,388		12,554		(675	)	July, 2015	(4)
Boulevard Market Fair	Anderson, SC	(3)		1,297		638		—		—			1,297		638		1,935		(107	)	July, 2015	(4)
Northwoods Mall	Charleston, SC	(3)		3,576		1,497		—		—			3,576		1,497		5,073		(291	)	July, 2015	(4)
Kmart Plaza	Rock Hill, SC	(3)		1,432		1,079		—		—			1,432		1,079		2,511		(227	)	July, 2015	(4)
Freestanding	Sioux Falls, SD	(3)		1,025		1,783		—		—			1,025		1,783		2,808		(153	)	July, 2015	(4)
Wolfchase Galleria	Cordova, TN	(3)		2,581		4,279		—		—			2,581		4,279		6,860		(340	)	July, 2015	(4)
Freestanding	Memphis (5), TN	(3)		2,827		2,475		—		(2,475	)		2,827		-		2,827		-		July, 2015	(4)
Tech Ridge	Austin, TX	(3)		3,164		2,858		—		—			3,164		2,858		6,022		(446	)	July, 2015	(4)
Southwest Center Mall	Dallas, TX	(3)		1,154		1,314		—		—			1,154		1,314		2,468		(280	)	July, 2015	(4)
Freestanding	El Paso, TX	(3)		2,008		1,778		—		—			2,008		1,778		3,786		(248	)	July, 2015	(4)
Baybrook Mall	Friendswood, TX	(3)		6,124		2,038		—		—			6,124		2,038		8,162		(309	)	July, 2015	(4)
Kmart Plaza	Harlingen, TX	(3)		1,795		1,183		—		—			1,795		1,183		2,978		(120	)	July, 2015	(4)
Memorial City Mall	Houston, TX	(3)		7,967		4,625		—		—			7,967		4,625		12,592		(627	)	July, 2015	(4)
Freestanding	Houston, TX	(3)		6,110		1,525		—		—			6,110		1,525		7,635		(247	)	July, 2015	(4)

F-35

							Costs Capitalized					Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition					at Close of Period (2)										Life Upon Which
					Buildings and					Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land			Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Ingram Park Mall	Ingram, TX	(3)		4,651		2,560		—			—		4,651		2,560		7,211		(302	)	July, 2015	(4)
Irving Mall	Irving, TX	(3)		4,493		5,743		—			—		4,493		5,743		10,236		(525	)	July, 2015	(4)
Freestanding	San Antonio, TX	(3)		5,468		1,457		—			—		5,468		1,457		6,925		(255	)	July, 2015	(4)
Freestanding	Shepherd, TX	(3)		5,457		2,081		—			—		5,457		2,081		7,538		(279	)	July, 2015	(4)
Valley View Center	Valley View, TX	(3)		4,706		3,230		—			—		4,706		3,230		7,936		(573	)	July, 2015	(4)
Freestanding	Westwood, TX	(3)		2,899		1,748		—			—		2,899		1,748		4,647		(353	)	July, 2015	(4)
Antelope Square	Layton, UT	(3)		2,234		974		—			527		2,234		1,501		3,735		(229	)	July, 2015	(4)
Jordan Landing Shopping    Center	West Jordan, UT	(3)		3,190		2,305		—			—		3,190		2,305		5,495		(237	)	July, 2015	(4)
Landmark Mall	Alexandria, VA	(3)		3,728		3,294		—			—		3,728		3,294		7,022		(522	)	July, 2015	(4)
Greenbrier Mall	Chesapeake, VA	(3)		4,236		1,700		—			—		4,236		1,700		5,936		(306	)	July, 2015	(4)
Fair Oaks Mall	Fairfax, VA	(3)		10,873		1,491		—			—		10,873		1,491		12,364		(332	)	July, 2015	(4)
Newmarket Fair Mall	Hampton, VA	(3)		771		1,011		—			—		771		1,011		1,782		(339	)	July, 2015	(4)
Pembroke Mall	Virginia Beach, VA	(3)		10,413		4,760		—			12,235		10,413		16,995		27,408		(733	)	July, 2015	(4)
Warrenton Village	Warrenton, VA	(3)		1,956		2,480		—			—		1,956		2,480		4,436		(242	)	July, 2015	(4)
Overland Plaza	Redmond, WA	(3)		5,133		4,133		—			—		5,133		4,133		9,266		(509	)	July, 2015	(4)
Westfield Vancouver	Vancouver, WA	(3)		3,378		1,136		—			—		3,378		1,136		4,514		(259	)	July, 2015	(4)
Freestanding	Yakima, WA	(3)		1,863		2,856		—			—		1,863		2,856		4,719		(420	)	July, 2015	(4)
Southridge Mall	Greendale, WI	(3)		3,208		2,340		—			—		3,208		2,340		5,548		(564	)	July, 2015	(4)
West Towne Mall	Madison, WI	(3)		3,053		2,130		—			—		3,053		2,130		5,183		(533	)	July, 2015	(4)
Freestanding	Platteville, WI	(3)		748		1,195		—			—		748		1,195		1,943		(195	)	July, 2015	(4)
Patrick Street Plaza	Charleston, WV	(3)		2,030		797		—			—		2,030		797		2,827		(215	)	July, 2015	(4)
Valley Point	Elkins, WV	(3)		788		1,147		—			—		788		1,147		1,935		(192	)	July, 2015	(4)
Freestanding	Scott Depot, WV	(3)		987		484		—			—		987		484		1,471		(141	)	July, 2015	(4)
Mountain Plaza	Casper, WY	(3)		509		1,303		—			—		509		1,303		1,812		(182	)	July, 2015	(4)
Freestanding	Gillette, WY	(3)		846		876		—			—		846		876		1,722		(189	)	July, 2015	(4)
Freestanding	Riverton, WY	(3)		561		847		—			—		561		847		1,408		(181	)	July, 2015	(4)
Construction in process	Various	(3)		—		—		—			55,208		—		55,208		55,208	—			n/a	n/a
				840,563		810,499		(542	)		84,372		840,021		894,871		1,734,892		(89,940	)

(1) Acquisition costs are based on initial purchase price acquisition and are subject to adjustment.  See Note 3.

(2) The aggregate cost of land, building and improvements (which includes construction in process) for federal income tax purposes is approximately $2.3 billion.

(3) All properties are encumbered by our Mortgage Loans and Future Funding Facility.  See Note 7.

(4) Depreciation is computed based on the following estimated useful lives:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

F-36

SERITAGE GROWTH PROPERTIES

NOTES TO SCHEDULE III

(Dollars in thousands)

Reconciliation of Real Estate

	2016			2015
Balance at beginning of period	$	1,668,351		$	1,651,062
Additions		69,726			17,289
Impairments					—
Dispositions and write-offs		(3,185	)		—
Balance at end of period	$	1,734,892		$	1,668,351

Reconciliation of Accumulated Depreciation

	2016			2015
Balance at beginning of period	$	29,076		$	—
Depreciation expense		60,972			29,076
Dispositions and write-offs		(108	)		—
Balance at end of period	$	89,940		$	29,076

F-37

EX-10.4

Exhibit 10.4

SERITAGE GROWTH PROPERTIES

July 7, 2015

Sears Holdings Corporation

3333 Beverly Road

Hoffman Estates, Illinois 60179

Ladies and Gentlemen:

Reference is made to that certain Master Lease of even date herewith (the “Master Lease”) by and among Seritage SRC Finance LLC and Seritage KMT Finance LLC (together with their successors and assigns, collectively, jointly and severally, “Landlord”), and Kmart Operations LLC (“Kmart Tenant”) and Sears Operations LLC (“Sears Tenant”) (together with their permitted successors and assigns, collectively, jointly and severally,“Tenant”).

The parties hereby acknowledge and agree that the following Schedules which are attached to and described in this letter (“Side Letter”), shall constitute the respective Schedules referred to in the Master Lease, and each of such Schedules is hereby, and for all purposes shall be deemed to have been, incorporated as a part of the Master Lease as if fully set forth therein. Capitalized terms not otherwise defined herein shall have the meaning as set forth in the Master Lease. The respective Schedules are:

1. Schedule 1.7(c): Preliminary Recapture Plans that the parties to the Master Lease have agreedupon.

2. Schedule1.9: 100% Recapture Property Termination Fees (Fixed Element of Calculation).

3. Schedule2: Base RentAdjustment.

4. Schedule4.5: InstallmentExpenses.

5. Schedule 10.1 DeferredMaintenance

6. Schedule 20.3 Initial EnvironmentalRemediation

This letter agreement shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

If the above-referenced terms are acceptable to you, please counter execute where provided for below and return the same to the undersigned. The fully executed Side Letter will also serve to supplement the Master Lease to add the information included on the Schedules described herein, and as so supplemented, the Master Lease shall continue in full force and effect on all of its same terms and conditions.  For purposes hereof, transmission by email will be binding as iforiginal.

[signature page follows]

Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Redacted portions are indicated with the notation“[**]”.

IN WITNESS WHEREOF, this Side Letter has been executed and delivered by the parties set forth above.

Tenant:

KMART OPERATIONS LLC

By:

Name:

Title:

SEARS OPERATIONS LLC

By:

Name:

Title:

Landlord:

SERITAGE KMT FINANCE LLC

By:

Name:

Title:

SERITAGE SRC FINANCE LLC

By:

Name:

Title:

(Master Lease Side Letter)

SCHEDULE 1.7(C)

PRELIMINARY RECAPTURE PLANS

[**]

SCHEDULE 1.9

100% Recapture Property Termination Fees

(Fixed Element of Calculation)

	Site	Type	City	State	As Leased Market Value	Go Dark Value*	Amount in Section 1.9(a)(iv)(A) of Master Lease
1	1089	Sears	Anchorage	AK	[**]
2	1398	Sears	San Bernardino	CA
3	1178	Sears	Santa Monica	CA
4	1608	Sears	Westminster	CA
5	1063	Sears	West Hartford	CT
6	1645	Sears	Boca Raton	FL
7	1655	Sears	Miami	FL
8	1365	Sears	Miami	FL
9	4295	Kmart	North Miami	FL
10	1225	Sears	Orlando	FL
11	1295	Sears	St Petersburg	FL
12	1305	Sears	Savannah	GA
13	7480	Kmart	Honolulu	HI
14	3879	Kmart	Braintree	MA
15	4177	Kmart	St. Clair Shores	MI
16	1052	Sears	St Paul	MN
17	1574	Sears	Middletown	NJ
18	1294	Sears	Watchung	NJ
19	1264	Sears	Hicksville	NY
20	1186	Sears	Memphis	TN
21	1057	Sears	Valley View	TX
TOTAL

*“Go Dark Value” is the value of the Demised Premises vacant and free and clear of the Master Lease.

Schedule 2

Base Rent Adjustment

As of Commencement Date

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
1	1089	Sears	Anchorage	AK	204,149	[**]	7,930	[**]			Y	257,948	[**]
2	9571	Kmart	Cullman	AL	98,522		0				N	98,522
3	1206	Sears	North Little Rock	AR	185,718		0				N	185,718
4	9711	Kmart	Russellville	AR	88,032		0				N	88,032
5	2358	Sears	Flagstaff	AZ	66,162		0				N	66,162
6	1078	Sears	Mesa	AZ	121,911		0				N	121,911
7	1708	Sears	Phoenix	AZ	144,228		0				N	144,228
8	2218	Sears	Prescott	AZ	102,338		0				N	102,338
9	2047	Sears	Sierra Vista	AZ	94,707		0				N	94,707
10	3695	Kmart	Sierra Vista	AZ	86,079		0				N	86,079
11	1338	Sears	Tucson	AZ	250,096		0				N	250,096
12	2078	Sears	Yuma	AZ	90,376		0				N	90,376
13	4762	Kmart	Antioch	CA	95,165		0				N	95,165
14	7653	Kmart	Big Bear Lake	CA	69,288		0				Y	80,008
15	1568	Sears	Carson	CA	163,440		0				Y	194,547
16	1358	Sears	Chula Vista	CA	250,092		0				N	250,092
17	1538	Sears	Citrus Heights	CA	280,714		8,827				N	289,541
18	3945	Kmart	Delano	CA	86,079		0				N	86,079
19	1438	Sears	El Cajon	CA	275,670		6,511				Y	286,481
20	1988	Sears	El Centro	CA	139,738		0				N	139,738
21	1159	Sears	Fairfield	CA	159,278		4,848				N	164,126
22	1408	Sears	Florin	CA	272,691		0				N	272,691
23	1208	Sears	Fresno	CA	217,566		0				N	217,566
24	7390	Kmart	McKinleyville	CA	94,774		0				N	94,774
25	2298	Sears	Merced	CA	92,624		0				N	92,624
26	1748	Sears	Montclair	CA	174,675		0				N	174,675
27	1868	Sears	Moreno Valley	CA	169,371		0				N	169,371
28	1698	Sears	Newark	CA	145,801		0				N	145,801
29	1168	Sears	North Hollywood	CA	150,982		0				N	150,982
30	1508	Sears	Northridge	CA	256,917		0				Y	291,767

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 1

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
31	1968	Sears	Palm Desert	CA	151,458	[**]	0	[**]			N	151,458	[**]
32	3678	Kmart	Ramona	CA	86,988		0				Y	107,470
33	1298	Sears	Riverside	CA	202,030		0				Y	214,230
34	4432	Kmart	Riverside	CA	94,500		0				Y	132,632
35	1156	Sears	Roseville	CA	131,425		7,565				N	138,990
36	1688	Sears	Salinas	CA	132,974		0				N	132,974
37	1398	Sears	San Bernardino	CA	264,682		0				N	264,682
38	1478	Sears	San Bruno	CA	267,896		8,698				Y	276,594
39	1648	Sears	San Diego	CA	164,830		9,818				Y	228,724
40	1488	Sears	San Jose	CA	262,491		0				N	262,491
41	2308	Sears	Santa Cruz	CA	105,769		5,709				Y	119,576
42	2088	Sears	Santa Maria	CA	108,596		0				N	108,596
43	1178	Sears	Santa Monica	CA	111,983		5,818				N	117,801
44	7639	Kmart	Santa Paula	CA	71,257		0				N	71,257
45	1108	Sears	Temecula	CA	115,636		0				N	115,636
46	2318	Sears	Thousand Oaks	CA	50,334		0				Y	164,040
47	1148	Sears	Ventura	CA	171,874		6,691				N	178,565
48	2068	Sears	Visalia	CA	75,570		0				N	75,570
49	1189	Sears	West Covina	CA	142,000		0				N	142,000
50	1608	Sears	Westminster	CA	197,904		0				N	197,904
51	1071	Sears	Lakewood	CO	153,000		0				Y	153,000
52	4917	Kmart	Thornton	CO	190,174		0				N	190,174
53	1193	Sears	Waterford	CT	141,756		7,484				N	149,240
54	1063	Sears	West Hartford	CT	186,904		7,481				Y	202,072
55	7725	Kmart	Rehoboth Beach	DE	117,162		0				Y	122,162
56	1355	Sears	Altamonte Springs	FL	205,628		0				Y	214,357
57	1645	Sears	Boca Raton	FL	167,637		6,696				Y	178,547
58	2565	Sears	Bradenton	FL	99,946		0				N	99,946
59	7321	Kmart	Bradenton	FL	82,938		0				N	82,938
60	1415	Sears	Clearwater	FL	129,693		6,012				Y	211,739
61	1715	Sears	Doral	FL	212,884		0				N	212,884
62	1495	Sears	Ft. Myers	FL	146,792		0				N	146,792
63	1665	Sears	Gainesville	FL	140,529		0				N	140,529
64	1345	Sears	Hialeah	FL	184,442		0				Y	197,453
65	4292	Kmart	Hialeah	FL	88,390		0				Y	106,390
66	7233	Kmart	Kissimmee	FL	112,505		0				Y	148,885

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 2

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
67	1955	Sears	Lakeland	FL	156,226	[**]	0	[**]			N	156,226	[**]
68	2245	Sears	Melbourne	FL	102,577		0				N	102,577
69	1365	Sears	Miami	FL	170,122		0				N	170,122
70	1655	Sears	Miami	FL	173,322		0				N	173,322
71	2695	Sears	Naples	FL	151,798		0				Y	161,892
72	4295	Kmart	North Miami	FL	106,305		0				Y	122,250
73	1006	Sears	Ocala	FL	146,236		0				N	146,236
74	1225	Sears	Orlando	FL	197,469		4,531				Y	202,000
75	2805	Sears	Panama City	FL	139,315		0				N	139,315
76	1096	Sears	Pensacola	FL	212,274		0				N	212,274
77	1535	Sears	Plantation	FL	201,596		0				N	201,596
78	1625	Sears	Sarasota	FL	204,453		7,975				N	212,428
79	1295	Sears	St. Petersburg	FL	187,000		0				Y	193,896
80	4355	Kmart	St. Petersburg	FL	120,631		0				N	120,631
81	1385	Sears	Atlanta	GA	218,710		7,587				N	226,297
82	1305	Sears	Savannah	GA	155,684		0				Y	167,284
83	7480	Kmart	Honolulu	HI	77,452		0				N	77,452
84	9220	Kmart	Algona	IA	99,260		0				N	99,260
85	2212	Sears	Cedar Rapids	IA	141,124		4,876				N	146,000
86	7767	Kmart	Charles City	IA	96,569		0				N	96,569
87	9309	Kmart	Webster City	IA	40,800		0				N	40,800
88	1229	Sears	Boise	ID	123,623		0				N	123,623
89	1090	Sears	Chicago	IL	293,718		0				N	293,718
90	1380	Sears	Chicago	IL	356,744		0				N	356,744
91	3594	Kmart	Chicago	IL	118,816		0				Y	168,537
92	1740	Sears	Joliet	IL	204,629		0				N	204,629
93	4297	Kmart	Moline	IL	120,488		0				Y	123,693
94	1212	Sears	North Riverside	IL	203,001		0				N	203,001
95	1750	Sears	Orland Park	IL	192,445		7,154				N	199,599
96	3241	Kmart	Springfield	IL	84,180		0				Y	127,385
97	7289	Kmart	Steger	IL	87,406		0				N	87,406
98	3556	Kmart	Elkhart	IN	86,479		0				N	86,479
99	1830	Sears	Ft. Wayne	IN	213,545		6,455				N	220,000
100	3180	Kmart	Merrillville	IN	108,339		0				Y	173,146
101	9647	Kmart	Leavenworth*	KS	76,853		0				N	83,552
102	1101	Sears	Overland Pk	KS	215,018		8,234				N	223,252

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 3

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
103	7607	Kmart	Hopkinsville	KY	70,326	[**]	0	[**]			Y	92,985	[**]
104	7430	Kmart	Owensboro	KY	68,334		0				N	68,334
105	2176	Sears	Paducah	KY	108,244		0				N	108,244
106	3320	Kmart	Houma	LA	96,681		0				Y	101,393
107	1347	Sears	Lafayette	LA	194,933		0				N	194,933
108	7061	Kmart	New Iberia	LA	91,653		0				N	91,653
109	3879	Kmart	Braintree	MA	102,396		0				Y	113,442
110	1053	Sears	Saugus	MA	204,862		5,565				N	210,427
111	2034	Sears	Bowie	MD	131,536		0				N	131,536
112	1864	Sears	Cockeysville	MD	149,704		16,242				N	165,946
113	7713	Kmart	Edgewater	MD	117,162		0				Y	117,162
114	2945	Sears	Hagerstown	MD	122,711		0				N	122,711
115	9521	Kmart	Madawaska	ME	49,650		0				N	49,650
116	7733	Kmart	Alpena	MI	118,200		0				N	118,200
117	2050	Sears	Jackson	MI	144,162		0				Y	152,662
118	1250	Sears	Lincoln Park	MI	297,905		0				Y	301,663
119	4845	Kmart	Manistee	MI	87,848		0				Y	94,696
120	1450	Sears	Roseville	MI	367,378		10,019				Y	385,397
121	9586	Kmart	Sault Ste. Marie	MI	92,650		0				N	92,650
122	4177	Kmart	St. Clair Shores	MI	117,959		0				Y	122,137
123	1490	Sears	Troy	MI	380,926		9,074				Y	402,630
124	1132	Sears	Burnsville	MN	161,678		5,659				N	167,337
125	3775	Kmart	Detroit Lakes	MN	79,102		0				Y	87,102
126	1122	Sears	Maplewood	MN	168,549		6,421				N	174,970
127	1052	Sears	St. Paul	MN	216,304		0				Y	217,930
128	7021	Kmart	Cape Girardeau	MO	82,597		0				N	82,597
129	4304	Kmart	Florissant	MO	114,740		0				Y	119,040
130	7018	Kmart	Jefferson City	MO	92,016		0				Y	97,141
131	7719	Kmart	Columbus	MS	117,082		0				Y	166,682
132	4814	Kmart	Havre	MT	94,658		0				N	94,658
133	1185	Sears	Asheville	NC	232,380		8,263				N	240,643
134	4758	Kmart	Concord	NC	137,499		0				Y	171,266
135	4353	Kmart	Minot	ND	108,110		0				Y	110,413
136	3814	Kmart	Kearney	NE	86,479		0				N	86,479
137	2443	Sears	Manchester	NH	135,109		8,961				N	144,070
138	1313	Sears	Nashua	NH	159,509		7,573				N	167,082

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 4

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
139	2663	Sears	Portsmouth	NH	120,120	[**]	6,938	[**]			N	127,058	[**]
140	1003	Sears	Salem	NH	119,036		8,532				Y	206,558
141	1574	Sears	Middletown	NJ	176,069		8,471				Y	191,230
142	1294	Sears	Watchung	NJ	253,860		9,042				Y	262,902
143	1434	Sears	Wayne	NJ	317,682		9,652				N	327,334
144	7755	Kmart	Deming	NM	96,571		0				N	96,571
145	7035	Kmart	Farmington	NM	90,651		0				N	90,651
146	7016	Kmart	Hobbs	NM	88,914		0				N	88,914
147	9819	Kmart	Henderson	NV	122,823		0				Y	143,914
148	1668	Sears	Las Vegas	NV	150,185		0				N	150,185
149	1978	Sears	Reno	NV	198,833		0				N	198,833
150	1103	Sears	Albany	NY	264,271		7,616				Y	305,670
151	1623	Sears	Clay	NY	137,962		8,542				N	146,504
152	1794	Sears	East Northport	NY	186,950		8,350				Y	195,300
153	1264	Sears	Hicksville	NY	332,065		8,369				Y	362,572
154	1784	Sears	Johnson City	NY	155,126		0				N	155,126
155	7695	Kmart	Olean	NY	118,004		0				N	118,004
156	1524	Sears	Rochester	NY	128,513		0				N	128,513
157	7676	Kmart	Sidney	NY	94,428		0				N	94,428
158	1584	Sears	Victor	NY	115,312		7,688				N	123,000
159	1944	Sears	Yorktown Heights	NY	153,670		6,334				N	160,004
160	1410	Sears	Canton	OH	210,384		8,979				N	219,363
161	1520	Sears	Chapel Hill	OH	187,179		7,495				Y	196,240
162	1560	Sears	Dayton	OH	183,532		8,969				N	192,501
163	7736	Kmart	Kenton	OH	96,066		0				N	96,066
164	7477	Kmart	Marietta	OH	87,543		0				N	87,543
165	1350	Sears	Mentor	OH	208,712		10,420				N	219,132
166	1430	Sears	Middleburg Heights	OH	351,610		7,381				N	358,991
167	3243	Kmart	North Canton	OH	84,180		0				Y	87,114
168	3142	Kmart	Tallmadge	OH	84,180		0				N	84,180
169	1220	Sears	Toledo	OH	209,948		8,772				N	218,720
170	7003	Kmart	Muskogee	OK	87,500		0				N	87,500
171	1091	Sears	Oklahoma City	OK	173,658		0				N	173,658
172	1119	Sears	Happy Valley	OR	137,879		6,442				N	144,321
173	3888	Kmart	The Dalles	OR	87,101		0				N	87,101
174	7746	Kmart	Carlisle	PA	117,781		0				N	117,781

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 5

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
175	3911	Kmart	Columbia	PA	86,721	[**]	0	[**]			N	86,721	[**]
176	7699	Kmart	Lebanon	PA	117,162		0				N	117,162
177	9770	Kmart	Mount Pleasant	PA	83,536		0				N	83,536
178	3954	Kmart	Walnutport	PA	121,159		0				N	121,159
179	4313	Kmart	York	PA	82,033		0				N	82,033
180	7788	Kmart	Bayamon	PR	114,600		0				Y	115,191
181	1085	Sears	Caguas	PR	138,686		0				N	138,686
182	1925	Sears	Carolina	PR	198,009		0				N	198,009
183	7768	Kmart	Guaynabo	PR	115,745		0				Y	217,335
184	3882	Kmart	Mayaguez	PR	118,242		0				N	118,242
185	7741	Kmart	Ponce	PR	126,887		0				N	126,887
186	1083	Sears	Warwick	RI	216,916		8,188				Y	246,052
187	7754	Kmart	Anderson	SC	118,749		0				N	118,749
188	1325	Sears	Charleston	SC	132,031		0				Y	138,828
189	7043	Kmart	Rock Hill	SC	89,299		0				Y	89,299
190	7318	Kmart	Sioux Falls	SD	72,511		0				N	72,511
191	1146	Sears	Cordova	TN	156,131		4,754				N	160,885
192	1186	Sears	Memphis	TN	191,665		4,899				Y	202,399
193	1847	Sears	Austin	TX	172,016		0				N	172,016
194	1227	Sears	Dallas	TX	205,297		0				N	205,297
195	4205	Kmart	El Paso	TX	103,657		0				Y	112,099
196	1257	Sears	Friendswood	TX	166,012		0				N	166,012
197	7077	Kmart	Harlingen	TX	91,653		0				N	91,653
198	1067	Sears	Houston	TX	209,488		4,941				Y	218,603
199	1277	Sears	Ingram	TX	168,397		0				N	168,397
200	2147	Sears	Irving	TX	79,535		0				Y	174,535
201	1167	Sears	San Antonio	TX	215,458		0				Y	221,837
202	1127	Sears	Shepherd	TX	201,700		0				N	201,700
203	1057	Sears	Valley View	TX	229,227		0				Y	235,007
204	1197	Sears	Westwood	TX	215,016		0				N	215,016
205	7426	Kmart	Layton	UT	90,010		0				Y	166,869
206	1888	Sears	West Jordan	UT	201,125		4,333				N	205,458
207	1284	Sears	Alexandria	VA	252,504		9,608				N	262,112
208	1615	Sears	Chesapeake	VA	169,376		0				N	169,376
209	1814	Sears	Fairfax	VA	214,110		11,668				N	225,778
210	1575	Sears	Hampton	VA	245,000		0				N	245,000

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 6

	Site	Type	City	State	SHC SF	SHC Base Rent Adjustment	Lands’ End SF	Lands’ End Rent	Total SHC and Lands’ End SF	Total Base Rent Adjustment Plus Lands’ End Rent	Occurrence of Multi- Tenancy Occupancy Date (Y/N)	Total SF (including all third-party leases)	Tenant’s Proportionate Share **
211	1265	Sears	Virginia Beach	VA	86,855	[**]	0	[**]			Y	200,315	[**]
212	2514	Sears	Warrenton	VA	113,948		7,130				N	121,078
213	1069	Sears	Redmond	WA	255,949		11,458				Y	274,907
214	2239	Sears	Vancouver	WA	124,888		4,750				N	129,638
215	4439	Kmart	Yakima	WA	97,251		0				Y	117,251
216	1082	Sears	Greendale	WI	238,416		0				N	238,416
217	2382	Sears	Madison	WI	130,201		8,062				N	138,263
218	3970	Kmart	Platteville	WI	94,841		0				N	94,841
219	4188	Kmart	Charleston	WV	105,575		0				N	105,575
220	3877	Kmart	Elkins	WV	94,885		0				Y	99,598
221	3724	Kmart	Scott Depot	WV	89,790		0				N	89,790
222	4736	Kmart	Casper	WY	91,266		0				Y	91,366
223	4863	Kmart	Gillette	WY	94,587		0				N	94,587
224	4837	Kmart	Riverton	WY	94,840		0				N	94,840
TOTAL					33,534,252	$133,999,528	452,460	$5,603,314	33,993,411	$139,626,841		35,573,891	95.56%

* Amounts include approximately 6,700 square feet of space with an annualrentof   [**]  occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 7

* Amounts include approximately 6,700 square feet of space with an annualrentof[**]occupied by Sears Hometown at Kmart site#9647

** Footnote re:  pro-rata share and GL improvements

* Amounts include approximately 6,700 square feet of space with an annualrentof [**]occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 2 Base Rent Adjustment - 8

1. All capitalized terms which are not otherwise defined, shall have the same meaning as in the Master Lease

2. At any time during the Term, the Base Rent for all Demised Premises which remains subject to this Master Lease shall be the Initial Base Rent as set forth above, as increased during the Initial and Renewal Terms as provided in the definition of “Base Rent” in Section 2.1 of the Master Lease, and as decreased as provided in Paragraph 3 of this Schedule 2.

3. On each Actual Recapture Date, on each Actual Additional Space Termination Date (only with respect to buildings thereon which are included in the Initial Leased Square Feet, if any), on each Actual Property 100% Recapture Termination Date, on each Nonprofitable Property Termination Date, and on each other date on which the Master Lease is terminated with respect to any Termination Space as provided in this Master Lease, the annual Base Rent payable thereafter shall be adjusted downward, so that the new annual Base Rent for all of the Tenant’s Space from time to time shall be as follows:

(a) With respect to any Demised Premises as to which the Master Lease is terminated with respect to the entire Demised Premises, the new annual Base Rent shall be reduced by the entire amount as set forth above (as adjusted for annual percentage increases and/or by appraisal as provided in the Master Lease).

(b) With respect to any Demised Premises as to which the Master Lease is terminated only as to a portion of such Demised Premises, the new annual Base Rent shall be reduced by an amount equal to the product of (i) the entire amount as set forth above (as adjusted for annual percentage increases and/or by appraisal as provided in the Master Lease), multiplied by (ii) a fraction, the numerator of which shall be the Gross Leasable Square Footage of all the Tenant’s Space at the applicable Demised Premises (prior to recapture by Tenant of any Lands’ End Space or Sears Hometown Space), and the denominator of which shall be the Gross Leasable Square Footage (as set forth above) of the individual Demised Premises (less fifty percent (50%) of the Gross Leasable Square Footage of any Exclusive Store Areas). If the date for adjustment occurs on any date other than the first (1st) day of the month, any prepayment of Base Rent shall be credited against the next monthly installment of Base Rent. All references to “SF” in the above chart refers to Gross Leasable Square Footage. As of the Commencement Date, the “Total SF” indicated in the above chart comprises one hundred percent (100%) of the Gross Leasable Square Footage with respect to each individual Demised Premises.

(c) In the case of Tenant’s recapture of any Lands’ End Space or Sears Hometown Space as provided in Section 10.5(b), the new annual Base Rent (as reduced in subparagraph 3(b) above), shall be increased by an amount equal to the product of (a) the entire amount for the applicable Demised Premises as set forth above, multiplied by (b) a fraction, the numerator of which is the Gross Leasable Square Footage of the Lands’ End Space or Sears Hometown Space which is the subject of such recapture, and the denominator of which is the total Gross Leasable Square Footage of the Demised Premises existing at the Commencement Date, including the Gross Leasable Space Footage of the applicable Lands’ End Space or Sears Hometown Space.

(d) As of the Commencement Date, Tenant’s Proportionate Share with respect to each Demised Premises is as set forth in the above chart.

4. All disputes with respect to the foregoing calculations in Paragraph 3 of this Schedule 2shall be subject to the dispute resolution provisions of Article XXIX.

Schedule 4.5

Installment Expenses

As of Commencement Date

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
1	1089	Sears	Anchorage	AK				[**]
2	9571	Kmart	Cullman	AL
3	1206	Sears	North Little Rock	AR
4	9711	Kmart	Russellville	AR
5	2358	Sears	Flagstaff	AZ
6	1078	Sears	Mesa	AZ
7	1708	Sears	Phoenix	AZ
8	2218	Sears	Prescott	AZ
9	2047	Sears	Sierra Vista	AZ
10	3695	Kmart	Sierra Vista	AZ
11	1338	Sears	Tucson	AZ
12	2078	Sears	Yuma	AZ
13	4762	Kmart	Antioch	CA
14	7653	Kmart	Big Bear Lake	CA
15	1568	Sears	Carson	CA
16	1358	Sears	Chula Vista	CA
17	1538	Sears	Citrus Heights	CA
18	3945	Kmart	Delano	CA
19	1438	Sears	El Cajon	CA
20	1988	Sears	El Centro	CA
21	1159	Sears	Fairfield	CA
22	1408	Sears	Florin	CA
23	1208	Sears	Fresno	CA
24	7390	Kmart	McKinleyville	CA
25	2298	Sears	Merced	CA
26	1748	Sears	Montclair	CA

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 1

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
27	1868	Sears	Moreno Valley	CA				[**]
28	1698	Sears	Newark	CA
29	1168	Sears	North Hollywood	CA
30	1508	Sears	Northridge	CA
31	1968	Sears	Palm Desert	CA
32	3678	Kmart	Ramona	CA
33	1298	Sears	Riverside	CA
34	4432	Kmart	Riverside	CA
35	1156	Sears	Roseville	CA
36	1688	Sears	Salinas	CA
37	1398	Sears	San Bernardino	CA
38	1478	Sears	San Bruno	CA
39	1648	Sears	San Diego	CA
40	1488	Sears	San Jose	CA
41	2308	Sears	Santa Cruz	CA
42	2088	Sears	Santa Maria	CA
43	1178	Sears	Santa Monica	CA
44	7639	Kmart	Santa Paula	CA
45	1108	Sears	Temecula	CA
46	2318	Sears	Thousand Oaks	CA
47	1148	Sears	Ventura	CA
48	2068	Sears	Visalia	CA
49	1189	Sears	West Covina	CA
50	1608	Sears	Westminster	CA
51	1071	Sears	Lakewood	CO
52	4917	Kmart	Thornton	CO
53	1193	Sears	Waterford	CT
54	1063	Sears	West Hartford	CT
55	7725	Kmart	Rehoboth Beach	DE
56	1355	Sears	Altamonte Springs	FL
57	1645	Sears	Boca Raton	FL
58	2565	Sears	Bradenton	FL

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 2

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
59	7321	Kmart	Bradenton	FL				[**]
60	1415	Sears	Clearwater	FL
61	1715	Sears	Doral	FL
62	1495	Sears	Ft. Myers	FL
63	1665	Sears	Gainesville	FL
64	1345	Sears	Hialeah	FL
65	4292	Kmart	Hialeah	FL
66	7233	Kmart	Kissimmee	FL
67	1955	Sears	Lakeland	FL
68	2245	Sears	Melbourne	FL
69	1365	Sears	Miami	FL
70	1655	Sears	Miami	FL
71	2695	Sears	Naples	FL
72	4295	Kmart	North Miami	FL
73	1006	Sears	Ocala	FL
74	1225	Sears	Orlando	FL
75	2805	Sears	Panama City	FL
76	1096	Sears	Pensacola	FL
77	1535	Sears	Plantation	FL
78	1625	Sears	Sarasota	FL
79	1295	Sears	St. Petersburg	FL
80	4355	Kmart	St. Petersburg	FL
81	1385	Sears	Atlanta	GA
82	1305	Sears	Savannah	GA
83	7480	Kmart	Honolulu	HI
84	9220	Kmart	Algona	IA
85	2212	Sears	Cedar Rapids	IA
86	7767	Kmart	Charles City	IA
87	9309	Kmart	Webster City	IA
88	1229	Sears	Boise	ID
89	1090	Sears	Chicago	IL
90	1380	Sears	Chicago	IL

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 3

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
91	3594	Kmart	Chicago	IL				[**]
92	1740	Sears	Joliet	IL
93	4297	Kmart	Moline	IL
94	1212	Sears	North Riverside	IL
95	1750	Sears	Orland Park	IL
96	3241	Kmart	Springfield	IL
97	7289	Kmart	Steger	IL
98	3556	Kmart	Elkhart	IN
99	1830	Sears	Ft. Wayne	IN
100	3180	Kmart	Merrillville	IN
101	9647	Kmart	Leavenworth*	KS
102	1101	Sears	Overland Pk	KS
103	7607	Kmart	Hopkinsville	KY
104	7430	Kmart	Owensboro	KY
105	2176	Sears	Paducah	KY
106	3320	Kmart	Houma	LA
107	1347	Sears	Lafayette	LA
108	7061	Kmart	New Iberia	LA
109	3879	Kmart	Braintree	MA
110	1053	Sears	Saugus	MA
111	2034	Sears	Bowie	MD
112	1864	Sears	Cockeysville	MD
113	7713	Kmart	Edgewater	MD
114	2945	Sears	Hagerstown	MD
115	9521	Kmart	Madawaska	ME
116	7733	Kmart	Alpena	MI
117	2050	Sears	Jackson	MI
118	1250	Sears	Lincoln Park	MI
119	4845	Kmart	Manistee	MI
120	1450	Sears	Roseville	MI
121	9586	Kmart	Sault Ste. Marie	MI
122	4177	Kmart	St. Clair Shores	MI

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 4

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
123	1490	Sears	Troy	MI				[**]
124	1132	Sears	Burnsville	MN
125	3775	Kmart	Detroit Lakes	MN
126	1122	Sears	Maplewood	MN
127	1052	Sears	St. Paul	MN
128	7021	Kmart	Cape Girardeau	MO
129	4304	Kmart	Florissant	MO
130	7018	Kmart	Jefferson City	MO
131	7719	Kmart	Columbus	MS
132	4814	Kmart	Havre	MT
133	1185	Sears	Asheville	NC
134	4758	Kmart	Concord	NC
135	4353	Kmart	Minot	ND
136	3814	Kmart	Kearney	NE
137	2443	Sears	Manchester	NH
138	1313	Sears	Nashua	NH
139	2663	Sears	Portsmouth	NH
140	1003	Sears	Salem	NH
141	1574	Sears	Middletown	NJ
142	1294	Sears	Watchung	NJ
143	1434	Sears	Wayne	NJ
144	7755	Kmart	Deming	NM
145	7035	Kmart	Farmington	NM
146	7016	Kmart	Hobbs	NM
147	9819	Kmart	Henderson	NV
148	1668	Sears	Las Vegas	NV
149	1978	Sears	Reno	NV
150	1103	Sears	Albany	NY
151	1623	Sears	Clay	NY
152	1794	Sears	East Northport	NY
153	1264	Sears	Hicksville	NY
154	1784	Sears	Johnson City	NY

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 5

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
155	7695	Kmart	Olean	NY				[**]
156	1524	Sears	Rochester	NY
157	7676	Kmart	Sidney	NY
158	1584	Sears	Victor	NY
159	1944	Sears	Yorktown Heights	NY
160	1410	Sears	Canton	OH
161	1520	Sears	Chapel Hill	OH
162	1560	Sears	Dayton	OH
163	7736	Kmart	Kenton	OH
164	7477	Kmart	Marietta	OH
165	1350	Sears	Mentor	OH
166	1430	Sears	Middleburg Heights	OH
167	3243	Kmart	North Canton	OH
168	3142	Kmart	Tallmadge	OH
169	1220	Sears	Toledo	OH
170	7003	Kmart	Muskogee	OK
171	1091	Sears	Oklahoma City	OK
172	1119	Sears	Happy Valley	OR
173	3888	Kmart	The Dalles	OR
174	7746	Kmart	Carlisle	PA
175	3911	Kmart	Columbia	PA
176	7699	Kmart	Lebanon	PA
177	9770	Kmart	Mount Pleasant	PA
178	3954	Kmart	Walnutport	PA
179	4313	Kmart	York	PA
180	7788	Kmart	Bayamon	PR
181	1085	Sears	Caguas	PR
182	1925	Sears	Carolina	PR
183	7768	Kmart	Guaynabo	PR
184	3882	Kmart	Mayaguez	PR
185	7741	Kmart	Ponce	PR
186	1083	Sears	Warwick	RI

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 6

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
187	7754	Kmart	Anderson	SC				[**]
188	1325	Sears	Charleston	SC
189	7043	Kmart	Rock Hill	SC
190	7318	Kmart	Sioux Falls	SD
191	1146	Sears	Cordova	TN
192	1186	Sears	Memphis	TN
193	1847	Sears	Austin	TX
194	1227	Sears	Dallas	TX
195	4205	Kmart	El Paso	TX
196	1257	Sears	Friendswood	TX
197	7077	Kmart	Harlingen	TX
198	1067	Sears	Houston	TX
199	1277	Sears	Ingram	TX
200	2147	Sears	Irving	TX
201	1167	Sears	San Antonio	TX
202	1127	Sears	Shepherd	TX
203	1057	Sears	Valley View	TX
204	1197	Sears	Westwood	TX
205	7426	Kmart	Layton	UT
206	1888	Sears	West Jordan	UT
207	1284	Sears	Alexandria	VA
208	1615	Sears	Chesapeake	VA
209	1814	Sears	Fairfax	VA
210	1575	Sears	Hampton	VA
211	1265	Sears	Virginia Beach	VA
212	2514	Sears	Warrenton	VA
213	1069	Sears	Redmond	WA
214	2239	Sears	Vancouver	WA
215	4439	Kmart	Yakima	WA
216	1082	Sears	Greendale	WI
217	2382	Sears	Madison	WI
218	3970	Kmart	Platteville	WI

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 7

Location & Pro-Rata
	Site	Type	City	State	Tenant’s Proportionate Share	Estimated CAM	Estimated Taxes ***	Estimated Insurance	Estimated Utilities	Other Operating Expenses	Total
219	4188	Kmart	Charleston	WV				[**]
220	3877	Kmart	Elkins	WV
221	3724	Kmart	Scott Depot	WV
222	4736	Kmart	Casper	WY
223	4863	Kmart	Gillette	WY
224	4837	Kmart	Riverton	WY
TOTAL

* Calculation includes approximately 6,700 square feet of space occupied by Sears Hometown at Kmart site #9647

** Notwithstanding the foregoing computations of Tenant’s Proportionate share, with respect to those Properties which are subject, as of the Commencement Date, to Leases which consist of ground leases of portions of the Property on which free-standing buildings have been constructed (“Third-Party Ground Leases”), Landlord and Tenant shall work together cooperatively and in good faith to determine and make, as appropriate, any adjustments in Tenant’s Proportionate Share with respect to any such Properties to take into account the effect of any payments required to be made to the landlord under such Third-Party Ground Leases with respect to Property Changes for such Properties, such adjustment to continue so long as such Third-Party Leases remain in effect.

Schedule 4.5 Installment Expenses - 8

Schedule 10.1

Deferred Maintenance

This schedule is a summary of the latest property condition report delivered by the firm identified as the “Firm Preparing Report” in the schedule below prior to July 7, 2015. This schedule incorporates each such report by reference and nothing herein shall be deemed to supersede such reports. The conditions to be remediated pursuant hereto are identified as “Immediate Needs” and “Short-Term Costs” in the reports by Bock & Clark and as “Immediate Repair Costs Estimate” in the reports by EFI Global.

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
1	1003	Sears	Salem	NH	[**]	II	EFI Global
2	1006	Sears	Ocala	FL		II	EFI Global
3	1052	Sears	St. Paul	MN		I	EFI Global
4	1053	Sears	Saugus	MA		II	EFI Global
5	1057	Sears	Valley View	TX		I	EFI Global
6	1063	Sears	West Hartford	CT		I	EFI Global
7	1067	Sears	Houston	TX		II	EFI Global
8	1069	Sears	Redmond	WA		II	EFI Global
9	1071	Sears	Lakewood	CO		II	Bock & Clark
10	1078	Sears	Mesa	AZ		II	EFI Global
11	1082	Sears	Greendale	WI		II	Bock & Clark
12	1083	Sears	Warwick	RI		II	EFI Global
13	1085	Sears	Caguas	PR		II	EFI Global
14	1089	Sears	Anchorage	AK		I	EFI Global
15	1090	Sears	Chicago	IL		II	EFI Global
16	1091	Sears	Oklahoma City	OK		II	EFI Global
17	1096	Sears	Pensacola	FL		II	EFI Global
18	1101	Sears	Overland Pk	KS		II	EFI Global
19	1103	Sears	Albany	NY		II	EFI Global
20	1108	Sears	Temecula	CA		II	EFI Global
21	1119	Sears	Happy Valley	OR		II	EFI Global
22	1122	Sears	Maplewood	MN		II	EFI Global
23	1127	Sears	Shepherd	TX		II	EFI Global
24	1132	Sears	Burnsville	MN		II	EFI Global
25	1146	Sears	Cordova	TN		II	Bock & Clark
26	1148	Sears	Ventura	CA		II	EFI Global
27	1156	Sears	Roseville	CA		II	Bock & Clark
28	1159	Sears	Fairfield	CA		II	EFI Global
29	1167	Sears	San Antonio	TX		II	EFI Global
30	1168	Sears	North Hollywood	CA		II	EFI Global

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 1

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
31	1178	Sears	Santa Monica	CA	[**]	I	EFI Global
32	1185	Sears	Asheville	NC		II	EFI Global
33	1186	Sears	Memphis	TN		I	EFI Global
34	1189	Sears	West Covina	CA		II	EFI Global
35	1193	Sears	Waterford	CT		II	EFI Global
36	1197	Sears	Westwood	TX		II	EFI Global
37	1206	Sears	North Little Rock	AR		II	EFI Global
38	1208	Sears	Fresno	CA		II	Bock & Clark
39	1212	Sears	North Riverside	IL		II	EFI Global
40	1220	Sears	Toledo	OH		II	EFI Global
41	1225	Sears	Orlando	FL		I	EFI Global
42	1227	Sears	Dallas	TX		II	EFI Global
43	1229	Sears	Boise	ID		II	EFI Global
44	1250	Sears	Lincoln Park	MI		II	EFI Global
45	1257	Sears	Friendswood	TX		II	EFI Global
46	1264	Sears	Hicksville	NY		I	EFI Global
47	1265	Sears	Virginia Beach	VA		II	EFI Global
48	1277	Sears	Ingram	TX		II	EFI Global
49	1284	Sears	Alexandria	VA		II	EFI Global
50	1294	Sears	Watchung	NJ		I	EFI Global
51	1295	Sears	St. Petersburg	FL		I	Bock & Clark
52	1298	Sears	Riverside	CA		II	Bock & Clark
53	1305	Sears	Savannah	GA		I	EFI Global
54	1313	Sears	Nashua	NH		II	EFI Global
55	1325	Sears	Charleston	SC		II	EFI Global
56	1338	Sears	Tucson	AZ		II	EFI Global
57	1345	Sears	Hialeah	FL		II	EFI Global
58	1347	Sears	Lafayette	LA		II	EFI Global
59	1350	Sears	Mentor	OH		II	EFI Global
60	1355	Sears	Altamonte Springs	FL		II	EFI Global
61	1358	Sears	Chula Vista	CA		II	EFI Global
62	1365	Sears	Miami	FL		I	EFI Global
63	1380	Sears	Chicago	IL		II	EFI Global
64	1385	Sears	Atlanta	GA		II	EFI Global
65	1398	Sears	San Bernardino	CA		I	Bock & Clark
66	1408	Sears	Florin	CA		II	Bock & Clark
67	1410	Sears	Canton	OH		II	EFI Global
68	1415	Sears	Clearwater	FL		II	Bock & Clark

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 2

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
69	1430	Sears	Middleburg Heights	OH	[**]	II	EFI Global
70	1434	Sears	Wayne	NJ		II	EFI Global
71	1438	Sears	El Cajon	CA		II	EFI Global
72	1450	Sears	Roseville	MI		II	EFI Global
73	1478	Sears	San Bruno	CA		II	Bock & Clark
74	1488	Sears	San Jose	CA		II	Bock & Clark
75	1490	Sears	Troy	MI		II	EFI Global
76	1495	Sears	Ft. Myers	FL		II	EFI Global
77	1508	Sears	Northridge	CA		II	EFI Global
78	1520	Sears	Chapel Hill	OH		II	EFI Global
79	1524	Sears	Rochester	NY		II	Bock & Clark
80	1535	Sears	Plantation	FL		II	Bock & Clark
81	1538	Sears	Citrus Heights	CA		II	Bock & Clark
82	1560	Sears	Dayton	OH		II	EFI Global
83	1568	Sears	Carson	CA		II	EFI Global
84	1574	Sears	Middletown	NJ		I	EFI Global
85	1575	Sears	Hampton	VA		II	EFI Global
86	1584	Sears	Victor	NY		II	Bock & Clark
87	1608	Sears	Westminster	CA		I	EFI Global
88	1615	Sears	Chesapeake	VA		II	EFI Global
89	1623	Sears	Clay	NY		II	EFI Global
90	1625	Sears	Sarasota	FL		II	Bock & Clark
91	1645	Sears	Boca Raton	FL		I	EFI Global
92	1648	Sears	San Diego	CA		II	EFI Global
93	1655	Sears	Miami	FL		I	EFI Global
94	1665	Sears	Gainesville	FL		II	EFI Global
95	1668	Sears	Las Vegas	NV		II	Bock & Clark
96	1688	Sears	Salinas	CA		II	Bock & Clark
97	1698	Sears	Newark	CA		II	Bock & Clark
98	1708	Sears	Phoenix	AZ		II	EFI Global
99	1715	Sears	Doral	FL		II	EFI Global
100	1740	Sears	Joliet	IL		II	EFI Global
101	1748	Sears	Montclair	CA		II	EFI Global
102	1750	Sears	Orland Park	IL		II	EFI Global
103	1784	Sears	Johnson City	NY		II	EFI Global
104	1794	Sears	East Northport	NY		II	EFI Global
105	1814	Sears	Fairfax	VA		II	EFI Global

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 3

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
106	1830	Sears	Ft. Wayne	IN	[**]	II	Bock & Clark
107	1847	Sears	Austin	TX		II	EFI Global
108	1864	Sears	Cockeysville	MD		II	EFI Global
109	1868	Sears	Moreno Valley	CA		II	EFI Global
110	1884	Not Applicable	King of Prussia	PA		III	Bock & Clark
111	1888	Sears	West Jordan	UT		II	EFI Global
112	1925	Sears	Carolina	PR		II	EFI Global
113	1944	Sears	Yorktown Heights	NY		II	EFI Global
114	1955	Sears	Lakeland	FL		II	Bock & Clark
115	1968	Sears	Palm Desert	CA		II	Bock & Clark
116	1978	Sears	Reno	NV		II	Bock & Clark
117	1988	Sears	El Centro	CA		II	Bock & Clark
118	2034	Sears	Bowie	MD		II	EFI Global
119	2047	Sears	Sierra Vista	AZ		II	EFI Global
120	2050	Sears	Jackson	MI		II	Bock & Clark
121	2068	Sears	Visalia	CA		II	Bock & Clark
122	2078	Sears	Yuma	AZ		II	EFI Global
123	2088	Sears	Santa Maria	CA		II	EFI Global
124	2147	Sears	Irving	TX		II	EFI Global
125	2176	Sears	Paducah	KY		II	Bock & Clark
126	2212	Sears	Cedar Rapids	IA		II	EFI Global
127	2218	Sears	Prescott	AZ		II	EFI Global
128	2239	Sears	Vancouver	WA		II	EFI Global
129	2245	Sears	Melbourne	FL		II	EFI Global
130	2298	Sears	Merced	CA		II	Bock & Clark
131	2308	Sears	Santa Cruz	CA		II	Bock & Clark
132	2318	Sears	Thousand Oaks	CA		II	Bock & Clark
133	2358	Sears	Flagstaff	AZ		II	EFI Global
134	2382	Sears	Madison	WI		II	Bock & Clark
135	2443	Sears	Manchester	NH		II	EFI Global
136	2514	Sears	Warrenton	VA		II	EFI Global
137	2565	Sears	Bradenton	FL		II	Bock & Clark
138	2663	Sears	Portsmouth	NH		II	EFI Global
139	2695	Sears	Naples	FL		II	EFI Global
140	2805	Sears	Panama City	FL		II	EFI Global
141	2945	Sears	Hagerstown	MD		II	EFI Global
142	3142	Kmart	Tallmadge	OH		II	EFI Global
143	3180	Kmart	Merrillville	IN		II	Bock & Clark

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 4

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
144	3238	Not Applicable	Tulsa	OK	[**]	III	EFI Global
145	3241	Kmart	Springfield	IL		II	EFI Global
146	3243	Kmart	North Canton	OH		II	EFI Global
147	3320	Kmart	Houma	LA		II	EFI Global
148	3353	Not Applicable	Orange Park	FL		III	Bock & Clark
149	3556	Kmart	Elkhart	IN		II	Bock & Clark
150	3579	Not Applicable	Springfield	MO		III	Bock & Clark
151	3594	Kmart	Chicago	IL		II	EFI Global
152	3678	Kmart	Ramona	CA		II	EFI Global
153	3695	Kmart	Sierra Vista	AZ		II	EFI Global
154	3724	Kmart	Scott Depot	WV		II	Bock & Clark
155	3775	Kmart	Detroit Lakes	MN		II	EFI Global
156	3814	Kmart	Kearney	NE		II	Bock & Clark
157	3877	Kmart	Elkins	WV		II	Bock & Clark
158	3879	Kmart	Braintree	MA		I	EFI Global
159	3882	Kmart	Mayaguez	PR		II	EFI Global
160	3888	Kmart	The Dalles	OR		II	EFI Global
161	3911	Kmart	Columbia	PA		II	EFI Global
162	3945	Kmart	Delano	CA		II	Bock & Clark
163	3954	Kmart	Walnutport	PA		II	Bock & Clark
164	3970	Kmart	Platteville	WI		II	Bock & Clark
165	4106	Not Applicable	Ypsilanti	MI		III	Bock & Clark
166	4177	Kmart	St. Clair Shores	MI		I	EFI Global
167	4188	Kmart	Charleston	WV		II	Bock & Clark
168	4205	Kmart	El Paso	TX		II	EFI Global
169	4292	Kmart	Hialeah	FL		II	EFI Global
170	4295	Kmart	North Miami	FL		I	EFI Global
171	4297	Kmart	Moline	IL		II	Bock & Clark
172	4304	Kmart	Florissant	MO		II	EFI Global
173	4313	Kmart	York	PA		II	EFI Global
174	4353	Kmart	Minot	ND		II	Bock & Clark
175	4355	Kmart	St. Petersburg	FL		II	Bock & Clark
176	4432	Kmart	Riverside	CA		II	Bock & Clark
177	4439	Kmart	Yakima	WA		II	EFI Global
178	4736	Kmart	Casper	WY		II	Bock & Clark
179	4758	Kmart	Concord	NC		II	EFI Global
180	4762	Kmart	Antioch	CA		II	EFI Global
181	4814	Kmart	Havre	MT		II	Bock & Clark

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 5

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
182	4837	Kmart	Riverton	WY	[**]	II	Bock & Clark
183	4845	Kmart	Manistee	MI		II	EFI Global
184	4863	Kmart	Gillette	WY		II	Bock & Clark
185	4917	Kmart	Thornton	CO		II	Bock & Clark
186	4956	Not Applicable	Greensboro	NC		III	Bock & Clark
187	7003	Kmart	Muskogee	OK		II	EFI Global
188	7016	Kmart	Hobbs	NM		II	Bock & Clark
189	7018	Kmart	Jefferson City	MO		II	EFI Global
190	7021	Kmart	Cape Girardeau	MO		II	EFI Global
191	7035	Kmart	Farmington	NM		II	EFI Global
192	7043	Kmart	Rock Hill	SC		II	EFI Global
193	7061	Kmart	New Iberia	LA		II	EFI Global
194	7077	Kmart	Harlingen	TX		II	EFI Global
195	7233	Kmart	Kissimmee	FL		II	EFI Global
196	7289	Kmart	Steger	IL		II	EFI Global
197	7318	Kmart	Sioux Falls	SD		II	Bock & Clark
198	7321	Kmart	Bradenton	FL		II	Bock & Clark
199	7390	Kmart	McKinleyville	CA		II	Bock & Clark
200	7416	Not Applicable	Homewood	IL		III	Bock & Clark
201	7426	Kmart	Layton	UT		II	EFI Global
202	7430	Kmart	Owensboro	KY		II	Bock & Clark
203	7477	Kmart	Marietta	OH		II	EFI Global
204	7480	Kmart	Honolulu	HI		I	EFI Global
205	7607	Kmart	Hopkinsville	KY		II	Bock & Clark
206	7639	Kmart	Santa Paula	CA		II	Bock & Clark
207	7653	Kmart	Big Bear Lake	CA		II	Bock & Clark
208	7676	Kmart	Sidney	NY		II	Bock & Clark
209	7695	Kmart	Olean	NY		II	Bock & Clark
210	7699	Kmart	Lebanon	PA		II	EFI Global
211	7713	Kmart	Edgewater	MD		II	EFI Global
212	7719	Kmart	Columbus	MS		II	EFI Global
213	7725	Kmart	Rehoboth Beach	DE		II	EFI Global
214	7733	Kmart	Alpena	MI		II	Bock & Clark
215	7736	Kmart	Kenton	OH		II	EFI Global
216	7741	Kmart	Ponce	PR		II	EFI Global
217	7746	Kmart	Carlisle	PA		II	EFI Global
218	7754	Kmart	Anderson	SC		II	EFI Global

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 6

	Site	Type	City	State	Property Reserves*	Property Type	Firm Preparing Report
219	7755	Kmart	Deming	NM	[**]	II	Bock & Clark
220	7767	Kmart	Charles City	IA		II	EFI Global
221	7768	Kmart	Guaynabo	PR		II	EFI Global
222	7788	Kmart	Bayamon	PR		II	EFI Global
223	9220	Kmart	Algona	IA		II	EFI Global
224	9309	Kmart	Webster City	IA		II	EFI Global
225	9406	Not Applicable	Peoria	AZ		III	Bock & Clark
226	9521	Kmart	Madawaska	ME		II	EFI Global
227	9571	Kmart	Cullman	AL		II	EFI Global
228	9586	Kmart	Sault Ste. Marie	MI		II	Bock & Clark
229	9647	Kmart	Leavenworth*	KS		II	EFI Global
230	9711	Kmart	Russellville	AR		II	EFI Global
231	9770	Kmart	Mount Pleasant	PA		II	Bock & Clark
232	9819	Kmart	Henderson	NV		II	Bock & Clark
233	9825	Not Applicable	Phoenix	AZ		III	Bock & Clark
234	61907	Not Applicable	Lombard	IL		III	Bock & Clark
235	61916	Not Applicable	Houston	TX		III	Bock & Clark
TOTAL

* Property Reserves represent 110% of Immediate Repair costs

Schedule 10.1 Deferred Maintenance - 7

Schedule 20.3

REIT Environmental Cost Estimation Summary

SEARS or KMART UNIT NUMBER	City	State	Firm Performing Due Diligence	Phase I Complet ed (Y/N)	Phase II Complet ed (Y/N)	Notes and Conditions of Environmental Issues Identified (For more detail, refer to the Phase I and II Environmental Site Assessment Reports for each location)	Anticipated Scope of Work to Address Environmental Issues	Estimated Date to Begin Remedial Efforts (To begin Within either 3 or 6 months Post Closing)	Projected Duration in Months of Remedial Efforts Based on Data Compiled to Date (Duration May Vary Pending Approved SOW)	Potential Delays or other Assumptions 1,2,3,4	As discussed between Sears, H2 and EBI (H2's Consultant)
1003	Salem	NH	BBJ Group	YES	YES	[**]		3 months	12	[**]
1052	St Paul	MN	Terracon	YES	YES			6 months	40
1053	Saugus	MA	BBJ Group	YES	YES			3 months	12
1057	Valley View	TX	Terracon	YES	YES			6 months	22
1067	Memorial	TX	Terracon	YES	YES			6 months	22
1069	Redmond- Overlake Pk	WA	Terracon	YES	YES			6 months	36
1082	Greendale	WI	Terracon	YES	YES			3 months	22
1083	Warwick	RI	BBJ Group	YES	YES			3 months	18
1090	Chicago	IL	Terracon	YES	YES			6 months	30
1091	Oklahoma City/Sequoyah	OK	Terracon	YES	YES			6 months	40
1096	Pensacola	FL	AECOM	YES	YES			3 months	6
1101	Overland Park	KS	Terracon	YES	YES			3 months	12
1103	Albany	NY	BBJ Group	YES	YES			3 months	6
1108	Temecula	CA	Terracon	YES	YES			3 months	6
1122	Maplewood	MN	Terracon	YES	YES			6 months	18
1127	Shepherd	TX	Terracon	YES	YES			3 months	9
1132	Burnsville	MN	Terracon	YES	YES			3 months	22
1159	Fairfield	CA	Terracon	YES	YES			3 months	12
1167	San Antonio Central Park	TX	AECOM	YES	YES			6 months	30
1168	No Hollywood	CA	Terracon	YES	YES			6 months	22
1185	Asheville	NC	AECOM	YES	YES			6 months	40
1186	Memphis/Popl	TN	Terracon	YES	YES			3 months	6
1193	Waterford	CT	BBJ Group	YES	YES			3 months	6
1206	North Little Rock	AR	AECOM	YES	YES			6 months	30
1208	Fresno	CA	Terracon	YES	YES			3 months	8

Schedule 20.3 REIT Environmental Cost Estimation Summary - 1

SEARS or KMART UNIT NUMBER	City	State	Firm Performing Due Diligence	Phase I Complet ed (Y/N)	Phase II Complet ed (Y/N)	Notes and Conditions of Environmental Issues Identified (For more detail, refer to the Phase I and II Environmental Site Assessment Reports for each location)	Anticipated Scope of Work to Address Environmental Issues	Estimated Date to Begin Remedial Efforts (To begin Within either 3 or 6 months Post Closing)	Projected Duration in Months of Remedial Efforts Based on Data Compiled to Date (Duration May Vary Pending Approved SOW)	Potential Delays or other Assumptions 1,2,3,4	As discussed between Sears, H2 and EBI (H2's Consultant)
1212	North Riverside	IL	Terracon	YES	YES	[**]		3 months	6	[**]
1220	Toledo	OH	Terracon	YES	YES			6 months	40
1225	Orlando Colonial	FL	AECOM	YES	YES			6 months	39
1227	Dallas	TX	AECOM	YES	YES			3 months	6
1229	Boise	ID	Terracon	YES	YES			3 months	38
1250	Lincoln Park	MI	Terracon	YES	YES			6 months	39
1264	Hicksville	NY	BBJ Group	YES	YES			6 months	39
1284	Alexandria	VA	BBJ Group	YES	YES			6 months	48
1294	Watchung	NJ	Terracon	YES	YES			6 months	30
1295	St Petersburg	FL	AECOM	YES	YES			6 months	48
1298	Riverside	CA	Terracon	YES	YES			6 months	39
1325	Charleston/ No rthwoods	SC	AECOM	YES	YES			3 months	18
1345	Hialeah	FL	AECOM	YES	YES			6 months	48
1347	Lafayette	LA	AECOM	YES	YES			3 months	26
1350	Mentor	OH	Terracon	YES	YES			6 months	39
1358	Chula Vista	CA	Terracon	YES	YES			3 months	20
1365	Miami/ Southla nd	FL	AECOM	YES	YES			6 months	39
1380	Chicago	IL	Terracon	YES	YES			6 months	35
1385	Atlanta	GA	AECOM	YES	YES			3 months	6
1408	Sacramento	CA	Terracon	YES	YES			6 months	35
1434	Wayne	NJ	Terracon	YES	YES			3 months	20
1450	Roseville	MI	Terracon	YES	YES			6 months	35
1478	San Bruno	CA	Terracon	YES	YES			3 months	100
1488	San Jose	CA	Terracon	YES	YES			6 months	40
1490	Troy	MI	Terracon	YES	YES			6 months	40
1495	Ft Myers	FL	AECOM	YES	YES			6 months	35
1508	Northridge	CA	Terracon	YES	YES			6 months	30
1520	Akron	OH	Terracon	YES	YES			6 months	30
1524	Rochester	NY	BBJ Group	YES	YES			6 months	30
1535	Plantation	FL	AECOM	YES	YES			6 months	28
1538	Citrus Hts	CA	Terracon	YES	YES			3 months	20

Schedule 20.3 REIT Environmental Cost Estimation Summary - 2

SEARS or KMART UNIT NUMBER	City	State	Firm Performing Due Diligence	Phase I Complet ed (Y/N)	Phase II Complet ed (Y/N)	Notes and Conditions of Environmental Issues Identified (For more detail, refer to the Phase I and II Environmental Site Assessment Reports for each location)	Anticipated Scope of Work to Address Environmental Issues	Estimated Date to Begin Remedial Efforts (To begin Within either 3 or 6 months Post Closing)	Projected Duration in Months of Remedial Efforts Based on Data Compiled to Date (Duration May Vary Pending Approved SOW)	Potential Delays or other Assumptions 1,2,3,4	As discussed between Sears, H2 and EBI (H2's Consultant)
1568	Carson	CA	Terracon	YES	YES	[**]		6 months	28	[**]
1574	Middletown	NJ	BBJ Group	YES	YES			3 months	20
1584	Victor	NY	BBJ Group	YES	YES			3 months	6
1608	Westminster	CA	Terracon	YES	YES			3 months	26
1645	Boca Raton	FL	Terracon	YES	YES			3 months	6
1648	San Diego- North	CA	Terracon	YES	YES			3 months	22
1655	Miami/Aventu ra	FL	Terracon	YES	YES			6 months	26
1665	Gainesville	FL	AECOM	YES	YES			3 months	10
1668	Las   Vegas/Meado ws	NV	Terracon	YES	YES			3 months	6
1698	Newark	CA	Terracon	YES	YES			6 months	32
1708	Phoenix	AZ	Terracon	YES	YES			3 months	10
1715	Miami/Doral	FL	AECOM	YES	YES			6 months	30
1740	Joliet	IL	Terracon	YES	YES			6 months	34
1750	Orland Park	IL	Terracon	YES	YES			3 months	10
1784	Johnson City	NY	BBJ Group	YES	YES			3 months	6
1794	East Northport	NY	BBJ Group	YES	YES			3 months	6
1884	King Of Prussia	PA	BBJ Group	YES	YES			3 months	18
1944	Yorktown Heights	NY	BBJ Group	YES	YES			3 months	16
1955	Lakeland	FL	AECOM	YES	YES			3 months	6
2034	Bowie	MD	BBJ Group	YES	YES			6 months	29
2050	Jackson	MI	Terracon	YES	YES			3 months	6
2147	Irving	TX	AECOM	YES	YES			3 months	16
2176	Paducah	KY	Terracon	YES	YES			6 months	20
2245	Melbourne	FL	AECOM	YES	YES			6 months	34
2298	Merced	CA	Terracon	YES	YES			3 months	16
2308	Santa Cruz	CA	Terracon	YES	YES			3 months	6
2358	Flagstaff	AZ	Terracon	YES	YES			3 months	10
2382	Madison	WI	Terracon	YES	YES			3 months	16
2443	Manchester	NH	BBJ Group	YES	YES			3 months	18
2565	Bradenton	FL	AECOM	YES	YES			6 months	28

Schedule 20.3 REIT Environmental Cost Estimation Summary - 3

SEARS or KMART UNIT NUMBER	City	State	Firm Performing Due Diligence	Phase I Complet ed (Y/N)	Phase II Complet ed (Y/N)	Notes and Conditions of Environmental Issues Identified (For more detail, refer to the Phase I and II Environmental Site Assessment Reports for each location)	Anticipated Scope of Work to Address Environmental Issues	Estimated Date to Begin Remedial Efforts (To begin Within either 3 or 6 months Post Closing)	Projected Duration in Months of Remedial Efforts Based on Data Compiled to Date (Duration May Vary Pending Approved SOW)	Potential Delays or other Assumptions 1,2,3,4	As discussed between Sears, H2 and EBI (H2's Consultant)
2663	Newington/Po rtsmouth	NH	BBJ Group	YES	YES	[**]		3 months	6	[**]
2805	Panama City	FL	AECOM	YES	YES			6 months	35
2945	Hagerstown	MD	BBJ Group	YES	YES			6 months	14
3238	TULSA	OK	Terracon	YES	YES			3 months	6
3243	North Canton	OH	Terracon	YES	YES			3 months	18
3353	ORANGE PARK	FL	BBJ Group	YES	YES			6 months	34
3594	Chicago	IL	Terracon	YES	YES			6 months	35
3877	ELKINS	WV	BBJ Group	YES	YES			3 months	6
3911	COLUMBIA	PA	BBJ Group	YES	YES			3 months	9
4106	YPSILANTI	MI	BBJ Group	YES	YES			3 months	6
4177	ST CLAIR SHORES	MI	Terracon	YES	YES			3 months	16
4188	CHARLESTO N	WV	BBJ Group	YES	YES			6 months	30
4295	NORTH MIAMI	FL	AECOM	YES	YES			3 months	30
4297	MOLINE	IL	Terracon	YES	YES			6 months	28
4353	MINOT	ND	Terracon	YES	YES			6 months	35
4432	RIVERSIDE	CA	Terracon	YES	YES			3 months	10
4758	CONCORD	NC	AECOM	YES	NO			3 months	6
4762	ANTIOCH	CA	Terracon	YES	YES			6 months	35
4845	MANISTEE	MI	Terracon	YES	YES			3 months	6
4956	GREENSBOR O	NC	BBJ Group	YES	YES			3 months	12
7003	MUSKOGEE	OK	Terracon	YES	YES			6 months	35
7016	HOBBS	NM	Terracon	YES	YES			3 months	22
7018	JEFFERSON CITY	MO	Terracon	YES	YES			3 months	16
7061	NEW IBERIA	LA	AECOM	YES	YES			6 months	30
7077	HARLINGEN	TX	AECOM	YES	YES			6 months	34
7289	STEGER	IL	Terracon	YES	YES			3 months	16
7321	BRADENTO N	FL	AECOM	YES	YES			6 months	16
7416	HOMEWOO D	IL	BBJ Group	YES	YES			3 months	12
7430	OWENSBOR O	KY	Terracon	YES	YES			6 months	28
7477	Marietta	OH	Terracon	YES	NO			3 months	6

Schedule 20.3 REIT Environmental Cost Estimation Summary - 4

SEARS or KMART UNIT NUMBER	City	State	Firm Performing Due Diligence	Phase I Complet ed (Y/N)	Phase II Complet ed (Y/N)	Notes and Conditions of Environmental Issues Identified (For more detail, refer to the Phase I and II Environmental Site Assessment Reports for each location)	Anticipated Scope of Work to Address Environmental Issues	Estimated Date to Begin Remedial Efforts (To begin Within either 3 or 6 months Post Closing)	Projected Duration in Months of Remedial Efforts Based on Data Compiled to Date (Duration May Vary Pending Approved SOW)	Potential Delays or other Assumptions 1,2,3,4	As discussed between Sears, H2 and EBI (H2's Consultant)
7653	BIG BEAR LAKE	CA	Terracon	YES	YES	[**]		6 months	35	[**]
7676	SIDNEY	NY	BBJ Group	YES	YES			3 months	12
7733	ALPENA	MI	Terracon	YES	YES			6 months	28
7741	Ponce	PR	AECOM	YES	NO			3 months	6
9521	MADAWASK A	ME	BBJ Group	YES	NO			3 months	6
9571	CULLMAN	AL	AECOM	YES	YES			3 months	22
9819	HENDERSO N	NV	Terracon	YES	YES			6 months	28
$12,034,171

Schedule 20.3 REIT Environmental Cost Estimation Summary - 5

Notes:

1. RegulatorResponse:Tocompletetheclosureprocessofareportedspill,closuredocumentationwillbesubmittedtotherespectivestateregulator.Regulatorresponsetoreportingandcorrespondencecanvary (sometimes up to 12 months). A delayed response from the respective regulator may delay to closure of a site beyond the anticipated closure date providedabove.

2 Complex Groundwater (GW) Regulation: State environmental regulations can vary from one state to the other; however, it is typical for cleanup guidance of groundwater impacts to be lengthy and more stringent.

3 PotentialComingling:TwomoreRECsareidentifiedashavingsubsurfaceimpacts,assuch,theimpactsmayhavecomingledmakingdelineationeffortsmorecomplex.

4 Source Identification: COCs identified at the REC are disconnected from the one another. i.e., solvents are not used in underground hydraulic lift components; therefore, if solvents are found in the immediate vicinity of an UHL, it is possible for the true source of impacts to beundefined.

5 Remediationcostsrepresent110%ofthecostsreferencedintheRecommendationsLetters.

– The schedule provided above is a summary of findings based on the Phase I and II Environmental Site Assessments, which incorporates all of the reports by reference, and nothing in the schedule supersedes the findings in thereports.

– CoststocleanupweretriggeredwhenanyCOCwasdetectedaboveapplicableStateremediation/screeninglevelsbasedonsiteuse.

– The REIT contains 235 total sites. This table presents the findings and projections to clean up those (123) sites in which environmental issues were identified through the recent due diligence efforts and correspondence withEBI.

– The scope of work summarized above assumes that spill reporting is required for each exceedance in every state. However, reporting obligations will be re-evaluated during the SOW preparation at the onset of each project. Should reporting be deemed unnecessary, remediation will continue without the oversight of a Stateregulator.

Abbreviations:

ASTM	American Society for TestingandMaterialsCOC constituent ofconcern
LUST	Leaking UndergroundStorageTank NFA No FurtherAction
ND	Constituent not detected inlaboratoryanalysisOWS Oil WaterSeparator
PCB	PolychlorinatedBiphenyls
PCE	tetrachloroethelene
REC	RecognizedEnvironmentalCondition SL Screeninglevels
SRP	Site RemediationProgram
TCE	Trichloroethene
TPH	Total Petroleumhydrocarbons
UHL	Underground HydraulicLift
UST	Underground StorageTank
VOC	Volatile organiccompounds

Schedule 20.3 REIT Environmental Cost Estimation Summary - 6

EX-10.6

Exhibit 10.6

Execution Version

OMNIBUS AMENDMENT

THIS OMNIBUS AMENDMENT (this “Amendment”) is entered into as of September 28, 2015 by and among JPMorgan Chase Bank, National Association, a national banking association (together with its successors and assigns, “JPM”) and H/2 SO III Funding I LLC, a Delaware limited liability company (together with its successors and assigns, “H/2” and with JPM, individually or collectively, as the context may require “Lender”), Seritage SRC Finance LLC, a Delaware limited liability company (together with its permitted successors and assigns, “SRC Borrower”), and Seritage KMT Finance LLC, a Delaware limited liability company (together with its permitted successors and assigns, “KMT Borrower” and, with SRC Borrower, individually or collectively, as the context may require, “Borrower”) and Seritage GS Holdings LLC, a Delaware limited liability company (together with its permitted successors and assigns, “GS JV Pledgor”), Seritage SPS Holdings LLC, a Delaware limited liability company (together with its permitted successors and assigns, “SPS JV Pledgor”), and Seritage MS Holdings LLC, a Delaware limited liability company (together with its permitted successors and assigns, “MS JV Pledgor” and with GS JV Pledgor and SPS JV Pledgor, individually or collectively, as the context may require, “JV Pledgor”) and Seritage Growth Properties, a Maryland real estate investment trust (together with its permitted successors and assigns, “Seritage REIT”), and Seritage Growth Properties, L.P., a Delaware limited partnership (together with its permitted successors and assigns, “Seritage OP” and together with Seritage REIT, collectively, jointly and severally “Guarantor”), and amends (i) that certain Loan Agreement, dated as of July 7, 2015, by and between Lender and Borrower (the “Loan Agreement”) and (ii) that certain Guaranty, dated as of July 7, 2015, by Seritage REIT and Seritage OP for the benefit of Lender (the “Guaranty”).  Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Loan Agreement.

WHEREAS, the parties hereto desire to amend the Loan Agreement and the Guaranty and provide for the bifurcation of the A-1 Note into Note Components, in each case, in the manner hereinafter set forth.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows, effective from and after the date hereof:

1. Definitions.  

a. The following definitions in the Loan Agreement are hereby amended and restated in their entirety as follows:

“Acceptable Counterparty” means any counterparty to an Interest Rate Cap Agreement (or the guarantor of such counterparty’s obligations pursuant to a guaranty acceptable to Lender and the Rating Agencies) that has and maintains (a) either (i) a long term unsecured debt rating or counterparty rating of A-  or higher from S&P and A- or higher from Fitch if rated by Fitch, or (ii) a short term unsecured debt rating of A-2 or higher from S&P and F2 or higher from Fitch if rated by Fitch, and (b) a long term unsecured debt rating of A3 or higher from Moody’s.

“Eligible Account” means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts (or subaccounts thereof) maintained with a federal or state‑chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts (or subaccounts thereof) maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity that has a Moody’s rating of at least “Baa3”, Fitch rating of at least “BBB-” or S&P rating of at least “BBB‑” and which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal and state authority.  An Eligible Account shall not be evidenced by a certificate of deposit, passbook or other instrument.

1

[NEWYORK 3105190_16]

“Eligible Institution” means either (a) a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short‑term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “F1+” by Fitch or “P‑1” by Moody’s in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of letters of credit and accounts in which funds are held for more than thirty (30) days, the long‑term unsecured debt obligations of which are rated at least “A+” by S&P, “A+” by Fitch if rated by Fitch and “Aa3” by Moody’s), or (b) (i) Bank of America, N.A., (ii) PNC Bank, National Association and (iii) any other depository institution or trust company approved by Lender and with respect to which the Rating Condition is satisfied; provided that, in each case, the rating by S&P and the other Rating Agencies for the short term unsecured debt obligations or commercial paper and long term unsecured debt obligations of the same does not decrease below the ratings in effect as of the Closing Date.

“JV Profits” means distributions of JV Capital Event Proceeds on any JV Interests in excess of the sum of (i) (a) (1) with respect to the GGP JV, $165,000,000, (2) with respect to the Macerich JV, $150,000,000 and (3) with respect to the Simon JV, $114,000,000 or (b) with respect to any JV Release Property, the Release Price paid by Borrower to obtain release of such JV Release Property plus (ii) in any case, additional invested capital and any applicable preferred return on such JV Interests in accordance with the applicable JV Documents.

“Lands’ End Master Lease” means that certain Master Lease Agreement by and between Sears, Roebuck and Co. as Landlord and Lands’ End, Inc. as Tenant, entered into as of April 4, 2014 and each effective as of February 1, 2014.

“Mezzanine Loan Spread” means 7.25%.

“Property Release Threshold” means an amount equal to the difference of (i) $307,500,000 minus (ii) any amounts required to be deducted therefrom in accordance with Section 2.1(b)(ii) minus (iii) (x) any Designated Net Sales Proceeds deposited in the TI/LC Reserve Account and/or the Redevelopment Project Reserve Account in accordance with Section 2.2(a)(iv) multiplied by (y) the Loan Pro Rata Share.  

“SHLD EBITDAR” means, with respect to any Test Period and the Properties subject to the SHLD Master Lease, the aggregate net income (which for the purposes of this calculation shall exclude all rents collected by the SHLD Master Tenant from any Affiliate of SHLD Master Tenant unless such Affiliate is a Tenant at the applicable Properties and also a tenant at similar properties owned or leased by SHLD and/or its subsidiaries under a master agreement in connection with a national or regional roll-out by such Tenant at Sears stores and/or Kmart stores) or loss for such Test Period calculated with respect to the operations of the SHLD Master Tenants at the Properties subject to the SHLD Master Lease on a Property-by-Property or “four wall” basis, determined in accordance with GAAP and adjusted by excluding (1) income tax expense, (2) consolidated interest expense (net of interest income), (3) depreciation and amortization expense, (4) any income, gains or losses attributable to the early extinguishment or conversion of indebtedness or cancellation of indebtedness, (5) gains or losses on discontinued operations and asset sales, disposals or abandonments, (6) impairment charges or asset write-offs, including, without limitation, those related to goodwill or intangible assets, Long-Lived Assets, and investments in debt and equity securities, in each case, in accordance with GAAP, (7) any noncash items of expense (other than to the extent such noncash items of expense require or result in an accrual or reserve for future cash expenses), (8) extraordinary gains or losses, (9) unusual or nonrecurring gains or items of income or loss and (10) SHLD Master Lease Rent for such Test Period; provided that each of net income and the foregoing adjustments shall be determined using the methodologies and practices of SHLD in effect as of the Closing Date as shown on Schedule K hereto.

“Spread Maintenance Premium” means the sum of (i) with respect to any prepayment of the Loan evidenced by the A-1 Note (a) permitted in accordance with the terms of this Agreement or (b) during the continuance of an Event of Default, an amount equal to the product of (A) the principal amount of the Note Component so prepaid, times (B) the applicable Spread, times (C) 1/360, times (D) the number of days from (but excluding) the conclusion of the Interest Accrual Period through which interest has been (or, in connection with such prepayment, will be) paid on such prepayment in accordance with this Agreement through and including the applicable Spread Maintenance Expiration Dateplus (ii) with respect to any prepayment of the Loan evidenced by the A-2 Notes (a) permitted in accordance with the terms of this Agreement or (b) during the continuance of an Event of Default, an amount equal to the product of (A) the principal amount so prepaid, times (B) the applicable Spread, times (C) 1/360, times (D) the number of days from (but excluding) the conclusion of the Interest Accrual Period through which interest has been (or, in connection with such prepayment, will be)  paid on such prepayment in accordance with this Agreement through and including the applicable Spread Maintenance Expiration Date; provided that, in each case, no Spread Maintenance Premium shall be payable with respect to Excluded Prepayments.

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b.The following definitions are hereby added to the Loan Agreement:

“Additional Conveyance Parcels” means those certain parcels relating to automotive centers associated with Property #1968 (Palm Desert, CA) and Property #1978 (Reno, NV) and a warehouse associated with Property #1089 (Anchorage, AK), each as more particularly described on Schedule T.

“Leased Additional Conveyance Parcel” means that certain parcel relating to an automotive center associated with Property #1968 (Palm Desert, CA), as more particularly described on Schedule T.

2. Voluntary Prepayment.

a. Section 2.1(a) of the Loan Agreement is hereby amended and restated in its entirety as follows:

Borrower shall be prohibited from prepaying the Loan, in whole or in part, during the Lockout Period except in connection with (i) the application of Loss Proceeds following a Casualty or Condemnation with respect to a Property in accordance with Section 5.16 or pursuant to Section 2.1(c) or (ii) in connection with the release of one or more Properties in accordance with Section 2.2 or Section 2.3.  After the expiration of the Lockout Period, Borrower shall have the right, at its option, upon not less than 5 Business Days’ prior written notice to Lender (or such other notice period as specified), to prepay the Loan in whole or, to the extent provided in Section 1.1(d)(iii), Section 2.1(b), Section 2.1(c), Section 2.2 and Section 2.3 in part; provided that (x) Borrower shall pay to Lender simultaneously with such prepayment the applicable Spread Maintenance Premium, if any, (y) there is a simultaneous and pro rata prepayment of the Mezzanine Loan with the result that, after giving effect to such prepayments, the Loan Pro Rata Share remains unchanged and (z) each prepayment of the Loan shall be accompanied by the amount of unpaid interest that would have accrued on the principal amount of the Loan to be prepaid through and including the last day of the Interest Accrual Period related to the Payment Date next occurring following the date of such prepayment or, if such prepayment occurs on a Payment Date, the amount of interest that would have accrued on the principal amount of the Loan to be prepaid through and including the last day of the Interest Accrual Period related to such Payment Date.  Borrower’s notice of prepayment may be rescinded with one (1) Business Days’ written notice by Borrower to Lender (subject to payment of any reasonable out‑of‑pocket costs and expenses actually incurred by Lender, including breakage costs actually incurred by Lender, resulting from such rescission).

b. Section 2.1(c) of the Loan Agreement is hereby amended and restated in its entirety as follows:

If the Debt Yield is less than the applicable 11.0% as of the end of any Test Period at any time, Borrower shall be permitted to (but not obligated to) prepay a portion of the Loan (together with a simultaneous pro rata prepayment by Mezzanine Borrower of the Mezzanine Loan) in the amount required to cause the Debt Yield to equal 11.0%, which prepayment shall be accompanied by interest on the principal amount so prepaid as required by Section 2.1(a), plus the applicable Spread Maintenance Premium.

c. The word “party” in the final sentence of Section 2.1(e) of the Loan Agreement is hereby replaced with the word “part”.

3. Property Releases.  The final sentence of Section 2.2(a)(iv) of the Loan Agreement is hereby amended and restated in its entirety as follows:

Notwithstanding the foregoing, Borrower may, with respect to any Release Property, deposit a portion of the Net Sales Proceeds thereof in excess of 150% of the sum of the Allocated Loan Amount and the Mezzanine Loan Allocated Loan Amount of such Release Property into the Redevelopment Project Reserve Account or the TI/LC Reserve Account (any such Net Sales Proceeds so deposited, “Designated Net Sales Proceeds”); provided that (1) the aggregate amount of the Designated Net Sales Proceeds deposited pursuant to this sentence and the corresponding sentence in Section 2.2(a)(iv) of the Mezzanine Loan Agreement shall not exceed $75,000,000 during the life of the Loan and (2) not more than $50,000,000 in the aggregate of such Net Sales Proceeds shall remain in the Redevelopment Project Reserve Account and/or the TI/LC Reserve Account at any one time.

4. Distributions from Cash Management Account.  Section 3.2(b)(ii) of the Loan Agreement is hereby amended and restated in its entirety as follows:

(i) to Lender (i) first, for payment to Servicer, the Primary Servicing Fee and (ii) second, the amount of all scheduled or delinquent interest and principal on the Loan and all other amounts, in each case, then due and payable under the Loan Documents (with any amounts in respect of principal paid last);

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5.New Borrowers.  Section 9.30(a)(iii) of the Loan Agreement is hereby amended and restated in its entirety as follows:

(iii) each of Seritage REIT and Seritage OP shall have duly executed and delivered to Lender a reaffirmation of the Guaranty and a reaffirmation of the Completion Guaranty;

6. Additional Conveyances.  The following is hereby added as new Section 5.25 to the Loan Agreement:

Section 5.25.  Additional Conveyances.

(a) Borrower represents and warrants that Borrower and SHLD have agreed that the failure to convey the Additional Conveyance Parcels to Borrower of record on the Closing Date was unintentional and each shall use reasonable best efforts to cause the conveyance to be completed expeditiously and in accordance with Section 8.1 (Further Assurances) of the SHLD PSA without additional consideration being required of any party to the SHLD PSA.

(b) Borrower shall, at Borrower’s sole cost and expense, use commercially reasonable efforts to, as promptly as reasonably practicable, (i) cause fee simple or ground leasehold, as applicable, interests in the Additional Conveyance Parcels to be conveyed to Borrower pursuant to conveyance documentation prepared by Borrower and reasonably acceptable to the Lender, (ii) cause a Title Insurance Policy to be issued and Survey to be provided with respect to each of the Additional Conveyance Parcels, (iii) provide Lender evidence of insurance satisfying the applicable requirements of the Loan Agreement with respect to each of the Additional Conveyance Parcels, (iv) to the extent the Additional Conveyance Parcels were not included in the applicable reports provided to Lender in connection with origination of the Loan, provide Lender property condition reports, Environmental Reports and zoning reports with respect to each of the Additional Conveyance Parcels, in each case consistent with the forms and standards for reports provided to Lender in respect of Properties other than the Additional Conveyance Parcels in connection with origination of the Loan and reasonably acceptable to Lender and (v) execute such mortgages, deeds of trust, mortgage amendments or deed of trust amendments as the Lender may reasonably require in connection therewith, in each case in form and substance reasonably acceptable to the Lender.  This Section 5.25 shall supersede Section 5.9 of this Agreement and similar provisions of the Loan Documents with respect to the matters set forth herein.

(c) Notwithstanding the foregoing, Borrower shall not be required to take title to the leasehold interest in the Leased Additional Conveyance Parcel to the extent that, after the use of commercially reasonable efforts, it is unable to obtain the consent of the lessor in respect thereof or to enter into an amendment with such lessor to the lease in respect thereof that would permit the Leased Additional Conveyance Parcel to be used and developed by Borrower consistent with the commercial standards applicable to the other Properties in all material respects.  If, after the use of commercially reasonable efforts, Borrower is unable to obtain the requisite consent and amendment, Borrower shall relinquish the right to the Leased Additional Conveyance Parcel to SHLD in exchange for the repayment by SHLD to the Borrower of the purchase price paid by Borrower for the Leased Additional Conveyance Parcel  in the Transaction; provided, (i) Borrower shall cause such payment to be made or immediately deposited into the Redevelopment Project Reserve Account to be held or disbursed in accordance with the terms of this Agreement applicable to funds in the Redevelopment Project Reserve Account, and (ii) the “Base Rent” (as defined in the SHLD Master Lease) shall be decreased by the amount attributable to the Leased Additional Conveyance Parcel.  

(d) Any reasonable out-of-pocket expenses actually incurred by Lender (including reasonable attorneys’ fees and expenses) in connection with Section 5.25(b) shall be paid by Borrower to Lender promptly (and in any event within five Business Days) following demand.

7. Definition of Indemnified Liabilities.  Section 1.2 of the Guaranty is hereby amended and restated in its entirety as follows:

1.2 Definition of Indemnified Liabilities.  As used herein, the term “Indemnified Liabilities” means all obligations and liabilities of Borrower pursuant to Section 9.19(b) and Section 9.19(c) of the Loan Agreement.

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8.Note Components.

a. In accordance with Section 1(c) of the Loan Agreement, effective as of the date hereof, the A-1 Note has been subdivided into Note Components, each with the original principal balance and Component Spread set forth below:

Note Component	Original Principal Balance	Component Spread
Component A-1	$205,000,000	2.3064022%
Component A-2	$114,000,000	2.3064022%
Component B	$125,300,000	3.3564022%
Component C	$116,600,000	4.1064022%
Component D	$121,100,000	5.1064022%
Component E	$88,200,000	5.7564022%
Component F	$154,800,000	5.9815022%
Total/Weighted Average	$925,000,000	3.9861000%

b. Interest on the Principal Indebtedness evidenced by the A-1 Note paid pursuant to Section 1.2(a) of the Loan Agreement shall be applied: (i) first, to the payment of interest due and payable on Component A-1; (ii) second, to the payment of interest due and payable on Component A-2; (iii) third, to the payment of interest due and payable on Component B; (iv) fourth, to the payment of interest and principal due on Component C; (v) fifth, to the payment of interest due and payable on Component D; (vi) sixth, to the payment of interest due and payable on Component E; and (vii) seventh, to the payment of interest due and payable on Component F.

c. Any prepayment of the principal of the Loan evidenced by the A-1 Note, in whole or in part, voluntary or involuntary, when no Event of Default exists, shall be applied sequentially, as follows: (a) first, to the reduction of the outstanding principal balance of Component A-1 until reduced to zero; (b) second, to the reduction of the outstanding principal balance of Component A-2 until reduced to zero; (c) third, to the reduction of the outstanding principal balance of Component B until reduced to zero; (d) fourth, to the reduction of the outstanding principal balance of Component C until reduced to zero; (e) fifth, to the reduction of the outstanding principal balance of Component D until reduced to zero; (f) sixth, to the reduction of the outstanding principal balance of Component E until reduced to zero; and (g) seventh, to the reduction of the outstanding principal balance of Component F.  Subsequent to any continuing Event of Default, any payment of principal from whatever source may be applied by Lender between the Note Components in Lender’s sole discretion.

d. Any Extension Fees collected pursuant to Section 1.1(d) of the Loan Agreement in connection with an extension of the Loan evidenced by the A-1 Note shall be applied to the Note Components, pro rata, with respect to their respective outstanding principal balances.

9. Specified Leases.  Schedule P to the Loan Agreement is hereby replaced in its entirety with Schedule P attached hereto.

10. Virginia Beach Property.  Borrower has become aware that the legal description attached to the deed conveying the Property located in Virginia Beach, Virginia (Property #1265) (the “Virginia Beach Property”) to Borrower pursuant to the Approved Separation Transaction, and attached to the Mortgage associated with such property, contains the inaccuracies depicted on Exhibit A hereto, and Borrower hereby covenants to, with respect to the Virginia Beach Property, (i) deliver an amended deed with a corrected legal description, (ii) execute and deliver an amended Mortgage with a corrected legal description, (iii) deliver an updated Survey, and (iv) deliver an updated lender’s Title Insurance Policy in favor of Lender.

11. Waiver.  By their signatures below, the Lender hereby waives any Default or Event of Default, if any, arising from the failure of the Borrower to obtain title to the Additional Conveyance Parcels on the Closing Date and from the inaccuracies in the deed conveying the Virginia Beach Property and the mortgage with respect to the Virginia Beach Property (in each case, as depicted on Exhibit A hereto), including without limitation any Default or Event of Default arising from the breach of a representation or warranty in any Loan Document relating to ownership of the Additional Conveyance Parcels or such inaccuracies.

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12.Change of Notice Address.  Effective as of October 1, 2015, by its signature below each of Borrower, JV Pledgor and Guarantor hereby provide notice of a change in its notice address as follows for all purposes of the Loan Documents:

If to Borrower or JV Pledgor:

c/o Seritage Growth Properties, L.P.

489 Fifth Avenue

18^th Floor

New York, NY 10017

Attention:     Matthew Fernand

Executive Vice President & General Counsel

mfernand@seritage.com

and

Mary Rottler 

Executive Vice President, Operations and Leasing

mrottler@seritage.com

with copies to:

Mayer Brown LLP

71 S. Wacker Dr.

Chicago, IL 60606

Attention:  Heather Adkerson

HAdkerson@mayerbrown.com

and:

Wachtell, Lipton, Rosen & Katz

51 W. 52^nd Street

New York, NY 10019

Attention:  Josh Feltman

jafeltman@wlrk.com

If to Guarantor:

Seritage Growth Properties

c/o Seritage Growth Properties, L.P.

489 Fifth Avenue

18^th Floor

New York, NY 10017

Attention:    Matthew Fernand

Executive Vice President & General Counsel

mfernand@seritage.com

and

Mary Rottler 

Executive Vice President, Operations and Leasing

mrottler@seritage.com

with copies to:

Mayer Brown LLP

71 S. Wacker Dr.

Chicago, IL 60606

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Attention:  Heather Adkerson

HAdkerson@mayerbrown.com

and:

Wachtell, Lipton, Rosen & Katz

51 W. 52^nd Street

New York, NY 10019

Attention:  Josh Feltman

jafeltman@wlrk.com.

13. Governing Law.  This Amendment shall be governed by and construed and interpreted in accordance with the laws of the State of New York.

14. Successors and Assigns.  This Amendment shall be binding upon Guarantor and its successors and assigns, and shall be binding upon and inure to the benefit of Lender and its successors and assigns, including any subsequent holder of all or any portion of the Note.

15. Miscellaneous.  All of the terms and conditions of the Loan Documents, as modified or waived by this Amendment, are hereby ratified and confirmed in all respects and shall remain in full force and effect in accordance with their terms.  All references to the Loan Agreement and to the Guaranty in any Loan Document shall, from and after the execution and delivery of this Amendment, be deemed a reference to the Loan Agreement and Guaranty as amended hereby and as hereafter amended, modified or extended from time to time. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Copies of originals, including copies delivered by facsimile, pdf or other electronic means, shall have the same import and effect as original counterparts and shall be valid, enforceable and binding for the purposes of this Amendment.

[Signatures appear on following page.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized representatives, all as of the day and year first above written.  

LENDER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America
By:
Name:	Jennifer Lewin
Title:	Vice President

[Signatures continue on next page.]

Omnibus Amendment to Loan Documents

[NEWYORK 3105190_16]

H/2 SO III FUNDING I LLC, a Delaware limited liability company
By:
Name:	Daniel Ottensoser
Title:	Authorized Signatory
By:
Name:	Ben Doramus
Title:	Authorized Signatory

[Signatures continue on next page.]

Omnibus Amendment to Loan Documents

[NEWYORK 3105190_16]

BORROWER:
SERITAGE SRC FINANCE LLC,
a Delaware limited liability company
By:
Name:	Benjamin Schall
Title:	President
SERITAGE KMT FINANCE LLC,
a Delaware limited liability company
By:
Name:		Benjamin Schall
Title:		President
JV PLEDGOR:
SERITAGE GS HOLDINGS LLC,
a Delaware limited liability company
By:
Name:			Benjamin Schall
Title:			President
SERITAGE SPS HOLDINGS LLC,
a Delaware limited liability company
By:
Name:		Benjamin Schall
Title:		President
SERITAGE MS HOLDINGS LLC,
a Delaware limited liability company
By:
Name:		Benjamin Schall
Title:		President

[Signatures continue on next page.]

Omnibus Amendment to Loan Documents

[NEWYORK 3105190_16]

GUARANTOR:

SERITAGE GROWTH PROPERTIES,
a Maryland real estate investment trust
By:
Name:	Matthew Fernand
Title:	Executive Vice President, General
	Counsel and Secretary
SERITAGE GROWTH PROPERTIES, L.P.,
a Delaware limited partnership
By:	Seritage Growth Properties, its general partner
By:
Name:	Matthew Fernand
Title:	Executive Vice President, General
	Counsel and Secretary

Omnibus Amendment to Loan Documents

[NEWYORK 3105190_16]

Exhibit A

Virginia Beach Property Inaccuracies

Exhibit A

Schedule P

Specified Leases

Schedule P

[NEWYORK 3105190_16]

Schedule T

Additional Conveyance Parcels

Schedule T

[NEWYORK 3105190_16]

EX-10.7

Exhibit 10.7

SECOND AMENDMENT TO LOAN AGREEMENT

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is made as of the 8th day of November, 2016 (the “Amendment Date”), by and among:

(A) Wells Fargo Bank, National Association (“Wells Fargo”), not individually but solely in its capacity as: (i) trustee (the “Trustee”) for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Commercial Mortgage Pass-Through Certificates, Series 2015-SGP (as successor-in-interest to JPMorgan Chase Bank, National Association, a national banking association (“JPM”), in its capacity as an originating lender); and (ii) collateral agent (the “Collateral Agent”) for JPM and H/2 SO III Funding I LLC, a Delaware limited liability company (“H/2 SO III”, and collectively with JPM, “Original Lender”), as co-lenders pursuant to the Co-Lender Agreement dated as of July 7, 2015 (Wells Fargo, together with its successors and assigns, including any party that acquires the Property by foreclosure, conveyance in lieu of foreclosure or similar transaction and any subsequent owner of the Property, "Lender");

(B) SERITAGE SRC FINANCE LLC and SERITAGE KMT FINANCE LLC, each a Delaware limited liabilitycompany (individually and/or collectively, as the context may require, “Borrower”);

(C) SERITAGE GS HOLDINGS LLC, SERITAGE SPS HOLDINGS LLC and SERITAGE MS HOLDINGS LLC, each a Delaware limited liabilitycompany(individually and/or collectively, as the context may require, “JV Pledgor”); and

(D) Seritage Growth Properties, a Maryland real estate investment trust, andSeritage Growth Properties, L.P., a Delaware limited partnership (individually and/or collectively, as the context may require, the “Guarantor”).

RECITALS:

WHEREAS, on July 7, 2015 (the “Closing Date”) Original Lender made a loan to Borrower in the maximum principal amount of $1,025,000,000 (the “Loan”), which Loan is evidenced by, inter alia: (i) the A-1 Note (as defined in the Loan Agreement) in the original principal amount of $925,000,000; (ii) the A-2-1 Note (as defined in the Loan Agreement) in the original principal amount of $50,000,000; (iii) the A-2-2 Note (as defined in the Loan Agreement) in the original principal amount of $50,000,000; and (iv) that certain Loan Agreement (the “Original Loan Agreement”), dated as of the Closing Date, by and among Borrower, JV Pledgor and Original Lender, as amended by that certain Omnibus Amendment, dated as of September 28, 2015, by and among JPM, H/2 SO III, Borrower, JV Pledgor and Guarantor (the “Omnibus Amendment”; and together with the Original Loan Agreement, as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Loan Agreement”);

WHEREAS, in connection with the origination of the Loan, (i) Guarantor executed and delivered that certain Guaranty, dated as of the Closing Date, as amended by the Omnibus Amendment (as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Guaranty”), (ii) Borrower and Guarantor executed and delivered that certain environmental indemnity agreement, dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Environmental Indemnity”), and (iii) Guarantor executed and delivered that certain completion guaranty, dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Completion Guaranty”);

WHEREAS, (i) the A-1 Note and the Loan were subsequently transferred to J.P. Morgan Chase Commercial Mortgage Securities Corp. (the “Depositor”) and included in the J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP (the “Trust”), Commercial Mortgage Pass-Through Certificates, Series 2015-SGP transaction (the “Securitization”); (ii) the A-2-1 Note was retained by JPM; and (iii) the A-2-2 Note was retained by H/2 SO III;

WHEREAS, (i) Strategic Asset Services LLC (“SAS”) has been appointed as primary servicer (in such capacity, the “Primary Servicer”) with respect to each of the Loan and the Mezzanine Loan (as defined in the Loan Agreement); (ii) SAS has been appointed as special servicer of the Loan (in such capacity, the “Mortgage Special Servicer”); and (iii) Berkadia Commercial Mortgage LLC (“Berkadia”) has been appointed as the master servicer of the Loan and the Mezzanine Loan (in such capacities, the “Master Servicer”) and as the special servicer of the Mezzanine Loan (in such capacity, the “Mezzanine Special Servicer”); and

WHEREAS, Borrower, JV Pledgor and Lender hereby agree to amend the Loan Agreement on the terms set forth herein.  All capitalized terms used but not defined herein have the meanings ascribed to them in the Loan Agreement.

22660855.16.BUSINESS

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.

AMENDMENTS TO LOAN AGREEMENT

1.1. Amendments to Definitions.

(a) The definition of “Cash Flow Sweep Trigger Event” set forth in the Loan Agreement is hereby amended by inserting at the end of clause (ii) of such definition the following provision: “or (c) no such Cash Flow Sweep Trigger Event shall be deemed to have occurred if (x) Borrower shall have delivered to Lender the Lump Sum Redevelopment Deposit as and when required pursuant to Section 3.11(a)(ii) and (y) Borrower makes all of the Monthly Redevelopment Reserve Deposits as and when required pursuant to Section 3.11(a)(ii);”.

(b) The definition of “Liquidity” set forth in the Loan Agreement is hereby amended by deleting the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account not earmarked for a specific use and (b) undrawn amounts of the Future Advance Amount (to the extent not designated by Borrower to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter” that appears therein and replacing it with the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account and in the Redevelopment Project Reserve Account, in each case, not earmarked for a specific use and (b) undrawn amounts of the Future Advance Amount (to the extent not designated by Borrower to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter”.

(c) The definition of “Spread Maintenance Expiration Date” set forth in the Loan Agreement is hereby amended by deleting each reference to “January 9, 2018” that appears therein and replacing each such reference with “March 9, 2018”.

(d) The definition of “Spread Maintenance Premium” set forth in the Loan Agreement is hereby amended by inserting at the end thereof the following provision: “; and provided further, that, notwithstanding anything in this Agreement or any other Loan Document to the contrary, the amount of Spread Maintenance Premium calculated pursuant to this definition shall be adjusted so that the Spread Maintenance Premium calculated for the period of time from February 9, 2018 through March 9, 2018 shall be an amount equal to $1,000,000 multiplied by (A) a fraction equal to the principal balance of the Loan being repaid divided by an amount equal to the principal balance of the Loan being repaid plus the principal amount of the Mezzanine Loan being repaid with the result further multiplied by (B) a fraction equal to the amount of the Loan being repaid divided by the outstanding principal balance of the Loan immediately prior to such repayment.”  

(e) A new definition of “Amendment Date” is hereby added to the “Definitions” section of the Loan Agreement in alphabetical order, as follows: “Amendment Date” shall mean November 8, 2016.

1.2. Amendment to Section 3.11(a).  Section 3.11(a) of the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“(a) (i) Lender will establish and maintain an Eligible Account (which may be a subaccount of the Cash Management Account) for the purpose of reserving amounts in respect of Approved Redevelopment Costs of Redevelopment Projects (the “Redevelopment Project  Reserve Account”). Notwithstanding anything herein to the contrary, except with respect to any amounts deposited into the Redevelopment Project Reserve Account pursuant to Section 3.11(a)(ii) below and provided no Event of Default shall have occurred and be continuing, in lieu of making any required deposit into the Redevelopment Project Reserve Account, Borrower may elect in writing by notice to Lender, in Borrower’s sole discretion, to designate all or any portion of the undrawn balance of the Future Advance Amount (to the extent not previously designated for use on any other Redevelopment Project) for application to one or more Redevelopment Projects, and such election, unless revoked by written notice from Borrower to Lender (which notice Borrower may elect to give in Borrower’s sole discretion) shall be deemed to constitute available funds in the Redevelopment Project Reserve Account; provided that such revocation by Borrower shall only be permitted so long as Borrower has not incurred any costs in respect of such Redevelopment Project that have been or are expected to be funded by advances by Future Advance Lender of the Future Advance Amount or has otherwise demonstrated to Lender’s reasonable satisfaction that the conditions set forth in Section 5.22(b)(ii) are satisfied as of the date of such revocation.

(ii) On or prior to the Amendment Date Borrower shall have deposited into the Redevelopment Project Reserve Account an amount equal to $30,000,000 (the “Lump Sum Redevelopment Deposit”).  Commencing on and including the

2

Payment Date occurring in December 2016 and on each Payment Date thereafter for so long as Third Party In-Place NOI as of the most recently ended Test Period does not exceed the Third Party In-Place NOI Threshold, Borrower shall deposit into the Redevelopment Project Reserve Account an amount equal to $3,300,000 (the “Monthly Redevelopment Reserve Deposit”); provided; however that the Monthly Redevelopment Reserve Deposits will not be required at any time (x) during which a Cash Flow Sweep Period (other than a Cash Flow Sweep Period caused by a Cash Flow Sweep Trigger Event pursuant to clause (ii) of the definition thereof) is in effect or (y) the SHLD EBITDAR Rent Ratio is equal to or greater than 1.50(x).”  

1.3. Amendment to Section 5.22(a).  Section 5.22(a) of the Loan Agreement is hereby amended by adding the following sentences to the end of such clause (a):

“From and after the Amendment Date and for so long as there are undrawn amounts of the Future Advance Amount (to the extent not previously designated by Borrower to fund a specific Redevelopment Project), all new Redevelopment Plans and Budgets submitted by Borrower to Lender shall provide that the source of funding of such Redevelopment Projects shall be the Future Advance Amount and the costs shall be funded from the Future Advance Amount for so long as such amounts are available and subject to the satisfaction of all conditions for the advance of such funds (it being understood that with respect to any Redevelopment Project that has been approved by Lender and the conditions set forth in Section 5.22(b) have been satisfied, if the conditions of Section 5.22(c)(ii) or (vi) are not satisfied despite Borrower’s good faith efforts to satisfy such conditions or such conditions are waived by Lender, then Borrower shall be permitted to pay the costs related to such Redevelopment Project with unrestricted cash; provided that in such circumstances Borrower shall diligently pursue the satisfaction of such conditions and cause Property Owner to request a draw of the Future Advance Amount promptly following satisfaction of such conditions).  Notwithstanding anything in this clause (a) to the contrary, with respect to the first $80,000,000 of new Redevelopment Plans and Budgets submitted to Lender from and after the Amendment Date, all references to $5,000,000 in this clause (a) shall mean $15,000,000 and all references to $7,500,000 in this clause (a) shall mean $15,000,000, in each case, for the purposes of Section 5.22(a) only, and shall not modify the definition of “Major Redevelopment Project” or the amounts referenced therein with respect to any other provision of the Loan Documents.”  

1.4. Change of Notice Address.  Effective as of the date hereof, by its signature below each of Borrower, JV Pledgor and Guarantor hereby provides notice of a change of its address as follows for all purposes of the Loan Documents:  

“If to Borrower, JV Pledgor or Guarantor:

c/o Seritage Growth Properties, L.P.
489 Fifth Avenue 18th Floor
New York, New York 10017
Attention:	Matthew Fernand
	Executive Vice President & General Counsel
	mfernand@seritage.com
	and
	Mary Rottler
	Executive Vice President, Operations and Leasing
	mrottler@seritage.com
with copies to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention:	Jonathan L. Mechanic
	jonathan.mechanic@friedfrank.com”

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ARTICLE II.

REPRESENTATIONS AND RATIFICATION

2.1. Representations.  Borrower, JV Pledgor and Guarantor each represent and warrant, that this Amendment constitutes a legal, valid and binding obligation of such party, enforceable against such party, in accordance with its terms, subject to bankruptcy, insolvency and other limitations on creditors’ rights generally and to equitable principles.  Borrower, JV Pledgor and Guarantor each represent and warrant that as of the Amendment Date, the execution and delivery by such party of this Amendment and the performance of its respective obligations hereunder: (i) have been duly authorized by all requisite action on the part of such party; (ii) will not violate any provision of any applicable legal requirements, decree, injunction or demand of any court or other governmental authority, any organizational document of such party, or any indenture or agreement or other instrument to which such party is a party or by which such party is bound; (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien of any nature whatsoever upon any of the property or assets of such party pursuant to any such indenture or agreement or instrument; (iv) has been duly executed and delivered by such party; (v) except for those obtained or filed on or prior to the Amendment Date, it is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any governmental authority or other agency in connection with or as a condition to such party’s execution, delivery or performance of this Amendment; and (vi) this Amendment has been duly executed and delivered.  

2.2. Borrower and JV Pledgor Ratification of Loan Documents.  Borrower and JV Pledgor each hereby: (i) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Loan Documents (as defined in the Loan Agreement), as amended hereby; (ii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms, covenants and conditions of the Loan Documents, without impairment, and remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Loan Documents, as amended hereby; (iii) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Borrower or JV Pledgor under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (iv) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Loan Documents, as amended hereby; and (v) represents and warrants that all representations and warranties made by such party contained in the Loan Documents are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate.

2.3. Guarantor Ratification of Loan Documents.  Guarantor hereby: (i) agrees to the modification of the Loan as set forth herein; (ii) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (iii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against Guarantor in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents, without impairment, and remain unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents; (iv) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Guarantor, Borrower and JV Pledgor under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (v) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (vi) represents, warrants and agrees that, as of the Amendment Date, it has no defenses, set-offs, rights of recoupment, claims or counterclaims of any nature with respect to its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty or any other Loan Document to which it is a party or the enforcement thereof; and (vii) represents and warrants that all representations and warranties made by Guarantor contained in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate.

4

ARTICLE III.

WAIVERS AND RELEASES

3.1. Consideration.  Borrower, JV Pledgor and Guarantor each hereby acknowledges and agrees that: (i) it has received good and valuable consideration for its agreement to the terms and provisions of this Amendment; (ii) its agreement to such terms and provisions is a material condition and inducement to Lender’s willingness to enter into this Amendment; (iii) Lender has relied upon the agreement of each of Borrower, JV Pledgor and Guarantor to such terms and provisions in entering into this Amendment and Lender would not have entered into this Amendment without the agreement of Borrower, JV Pledgor and Guarantor to the terms and provisions of this Amendment, and Article III of this Amendment in particular; and (iv) it has been represented by competent counsel of its own choosing in the negotiation of this Amendment and Article III of this Amendment in particular, and it has discussed these provisions with counsel and hereby knowingly and willingly waives its rights as described in this Article III of this Amendment.  This Amendment may be introduced as evidence in any judicial or other proceeding, without further authentication or foundation, and shall constitute prima facie evidence of the facts and agreements set forth herein.

3.2. No Defaults; Defenses, Counterclaims or Offsets.  Each of Borrower, JV Pledgor and Guarantor acknowledge, agree, represent and warrant as to itself that, as of the Amendment Date, after giving effect to the modification of the Loan as contemplated hereby, no Event of Default has occurred and is continuing under any of the Loan Documents.  Borrower, JV Pledgor and Guarantor, each for itself and its respective successors and assigns, and by its execution hereof each: (i) hereby acknowledges, admits and agrees that, as of the Amendment Date, there are no objections, claims, defenses, counterclaims or offsets relating to its obligations under or in respect of the Loan, the Loan Documents or to the enforcement or exercise by Lender of any of its rights, powers or remedies under or in respect of the Loan Documents, at law or in equity; (ii) hereby irrevocably waives, relinquishes and releases any and all such objections, claims, defenses, counterclaims or offsets that may now exist, including without limitation, any and all such objections, claims, defenses, counterclaims or offsets whether known or unknown, foreseeable or unforeseeable; and (iii) hereby irrevocably further waives and renounces, to the fullest extent permitted by law, all rights to the benefits of any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead now or hereafter provided by the Constitution and laws of the United States of America and of each state thereof, both as to itself and in and to all of its property, real and personal, against the enforcement and collection of the obligations evidenced by the Notes or the other Loan Documents; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.2 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s, JV Pledgor’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.

3.3. Releases.  Borrower, JV Pledgor and Guarantor each on behalf of itself and its respective successors and assigns (collectively, the “Borrower Releasing Parties”) each hereby irrevocably releases, and forever discharges each Exculpated Party from any and all manner of controversies, liabilities, expenses, damages, judgments, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, whether known or unknown, which any of Borrower Releasing Parties now have by reason of any matter, cause or thing, from the beginning of the world to and including the Amendment Date arising out of or relating to any Exculpated Matter; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.3 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s, JV Pledgor’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.  As used herein, “Exculpated Matter” means: (i) the interpretation, calculation, application and/or timing of the provisions of the Loan Documents related to any Cash Flow Sweep Cure Collateral, any Cash Flow Sweep Period and any Cash Flow Sweep Trigger Event (collectively, the “Cash Flow Sweep Definitions”), and, solely as they relate to the Cash Flow Sweep Definitions, In-Place NOI, Operating Expenses, Operating Income, SHLD EBITDAR, SHLD EBITDAR Rent Ratio, any Test Period, Third Party In-Place NOI and/or the Third Party In-Place NOI Threshold, and in each case, solely as they relate to the Cash Flow Sweep Definitions, any definitions or provisions of the Loan Documents referred to therein or upon which the interpretation, calculation, application and/or timing of any of the foregoing rely; (ii) the granting of any extension or waiver of the applicability or timing with respect to the determination of any of the provisions described in clause (i) of this definition; and (iii) any matter with respect to any pre-negotiation agreement between SAS, Borrower and the other parties thereto in connection with the foregoing.  As used herein, “Exculpated Party” means each of the following: (i) each Original Lender; (ii) the Trustee; (iii) the Collateral Agent; (iv) the Trust; (v) the Primary Servicer; (vi) the Master Servicer; (vii) the Mortgage Special Servicer; (viii) the Mezzanine Special Servicer; (ix) the Depositor; (x) each other Lender (including holders and beneficial owners of certificates issued in connection with the Securitization); and (xi) all Related Parties of the foregoing.  As used herein, “Related Parties” shall mean with respect to any Person, such Person’s affiliates, and such Person’s and such Person’s affiliates partners, officers, directors, employees, agents, attorneys, servicers, subservicers, primary servicers, special servicers, contractors, representatives, participants, successors, assigns, subsidiaries, equity owners and predecessors-in-interest.

5

ARTICLE IV.

MISCELLANEOUS

4.1. Severability.  In case any provision of this Amendment shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal, and enforceable, provided that any such modification does not prevent the practical realization of the principal benefits intended by this Amendment.  In the event of such modification, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.2. No Modification Except in Writing.  None of the terms of this Amendment may be waived, altered, terminated or amended except by an instrument in writing duly executed by Borrower, JV Pledgor, Guarantor and Lender.

4.3. Further Assurances.  This Amendment shall be subject to Section 5.9 of the Loan Agreement.

4.4. Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed in such state (without regard to principles of conflicts of laws).  Borrower hereby waives any claim to assert that the law of any other jurisdiction governs this Amendment, and this Amendment shall be governed by and construed in accordance with the laws of the State of New York pursuant to Section 5-1401 of the New York General Obligations Law.

4.5. Joint and Several Liability. If Borrower, JV Pledgor or Guarantor consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint and several.

4.6. Costs and Expenses. Borrower and JV Pledgor shall pay all of Lender’s reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust)) incurred in connection with this Amendment.

4.7. Miscellaneous.

(a) The captions and Section headings in this Amendment are for convenience only and are not intended to define, alter, limit or enlarge in any way the scope or meaning of this Amendment or any term or provision set forth in this Amendment.

(b) The Recitals set forth at the beginning of this Amendment are incorporated in and made a part of this Amendment by this reference.

(c) Each reference in this Amendment to any gender shall be deemed also to include any other gender, and the use in this Amendment of the singular shall be deemed also to include the plural and vice versa, unless the context requires otherwise.

(d) This Amendment is, and shall be deemed to be, the product of joint drafting by the parties hereto and shall not be construed against any of them as the drafter hereof.

(e) This Amendment, together with the Loan Documents, constitute the entire agreement among the parties relating to the subject matter hereof.  To the extent this Amendment conflicts with any of the other Loan Documents, this Amendment shall control.

(f) This Amendment shall inure to the benefit of and be binding upon the parties and their respective heirs, successors and assigns.

(g) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Amendment will not be binding on or constitute evidence of a contract between the parties until such time as a counterpart of this document has been executed by each party and a copy thereof is delivered to each party to this Amendment.

4.8. Mezzanine Lender Consent. Wells Fargo Bank, National Association, not individually but solely in its capacity as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ, Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ (together with its successors and assigns, “Mezzanine Lender”) hereby executes this Amendment in order to consent to this Amendment and agrees that the Lender shall be entitled to rely upon the consent contained herein as satisfying any notice and consent obligations contained under the Intercreditor Agreement between the Lender and the Mezzanine Lender.

6

4.9. Conditions Precedent to the Effectiveness of this Amendment.  The parties hereto acknowledge and agree that this Amendment shall have no force or effect until Lender has received the Lump Sum Redevelopment Deposit, executed counterparts of this Amendment from each party hereto, and Borrower has paid Lender’s reasonable, out-of-pocket attorneys’ fees incurred in connection herewith (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust).

[Signatures appear on following pages]

7

IN WITNESS WHEREOF, the parties have hereunto executed this Amendment as of the date first written above.

BORROWER:
SERITAGE SRC FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE KMT FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:

22660855.16.BUSINESS

JV PLEDGOR:
SERITAGE GS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE SPS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE MS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:

GUARANTOR:
Seritage Growth Properties, a Maryland real estate investment trust
By:
	Name:
	Title:
Seritage Growth Properties, L.P., a Delaware limited partnership
By:	Seritage Growth Properties,
	its general partner
	By:
		Name:
		Title:

LENDER:
wells fargo bank, national association, not individually but solely in its capacity as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Commercial Mortgage Pass-Through Certificates, Series 2015-SGP
By:	Strategic Asset Services LLC,
	in its capacity as Primary Servicer
	By:
		Name:
		Title:
	By:
		Name:
		Title:

ACKNOWLEDGED AND AGREED:

MEZZANINE BORROWERS:

SERITAGE SRC MEZZANINE FINANCE LLC,

a Delaware limited liability company

By:
	Name:
	Title:

SERITAGE KMT MEZZANINE FINANCE LLC,

a Delaware limited liability company

By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED, as a party to, and

as Guarantor (as defined in the Mezzanine Loan Agreement)

under and with respect to, any Mezzanine Loan Document:

SERITAGE GROWTH PROPERTIES,

a Maryland real estate investment trust

By:
	Name:
	Title:

SERITAGE GROWTH PROPERTIES, L.P.,

a Delaware limited partnership

By:	Seritage Growth Properties,
	its general partner
	By:
		Name:
		Title:

ACKNOWLEDGED AND AGREED:

MEZZANINE LENDER:

wells fargo bank, national association,

NOT INDIVIDUALLY BUT SOLELY IN ITS

CAPACITY as trustee for the holders of

J.P. Morgan Chase Commercial

Mortgage Securities Trust 2015-SGP MZ,

Commercial Mezzanine Pass-Through

Certificates, Series 2015-SGP MZ

By:	Strategic Asset Services LLC,
	in its capacity as Primary Servicer
	By:
		Name:
		Title:
	By:
		Name:
		Title:

EX-10.9

Exhibit 10.9

Execution Version

OMNIBUS AMENDMENT

(Mezzanine Loan)

THIS OMNIBUS AMENDMENT (this “Amendment”) is entered into as of September 28, 2015 by and among H/2 Special Opportunities III Corp., H/2 Credit Partners Master Fund Ltd., H/2 Investors, Ltd., H/2 Investors II, L.P. and H/2 Targeted Return Strategies II Ltd. (together with their respective successors and assigns, individually or collectively, as the context may require “Lender”), Seritage SRC Mezzanine Finance LLC, a Delaware limited liability company (together with its permitted successors and assigns, “SRC Borrower”), and Seritage KMT Mezzanine Finance LLC, a Delaware limited liability company (together with its permitted successors and assigns, “KMT Borrower” and, with SRC Borrower, individually or collectively, as the context may require, “Borrower”) and Seritage Growth Properties, a Maryland real estate investment trust (together with its permitted successors and assigns, “Seritage REIT”), and Seritage Growth Properties, L.P., a Delaware limited partnership (together with its permitted successors and assigns, “Seritage OP” and together with Seritage REIT, collectively, jointly and severally “Guarantor”), and amends (i) that certain Mezzanine Loan Agreement, dated as of July 7, 2015, by and between Lender and Borrower (the “Loan Agreement”) and (ii) that certain Guaranty, dated as of July 7, 2015, by Seritage REIT and Seritage OP for the benefit of Lender (the “Guaranty”).  Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Loan Agreement.

WHEREAS, the parties hereto desire to amend the Loan Agreement and the Guaranty in the manner hereinafter set forth.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows, effective from and after the date hereof:

1. Definitions.  

a. The following definitions in the Loan Agreement are hereby amended and restated in their entirety as follows:

“Acceptable Counterparty” means any counterparty to an Interest Rate Cap Agreement (or the guarantor of such counterparty’s obligations pursuant to a guaranty acceptable to Lender and the Rating Agencies) that has and maintains (a) either (i) a long term unsecured debt rating or counterparty rating of A-  or higher from S&P and A- or higher from Fitch if rated by Fitch, or (ii) a short term unsecured debt rating of A-2 or higher from S&P and F2 or higher from Fitch if rated by Fitch, and (b) a long term unsecured debt rating of A3 or higher from Moody’s.

“Eligible Account” means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts (or subaccounts thereof) maintained with a federal or state‑chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts (or subaccounts thereof) maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity that has a Moody’s rating of at least “Baa3”, Fitch rating of at least “BBB-” or S&P rating of at least “BBB‑” and which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal and state authority.  An Eligible Account shall not be evidenced by a certificate of deposit, passbook or other instrument.

“JV Profits” means distributions of JV Capital Event Proceeds on any JV Interests in excess of the sum of (i) (a) (1) with respect to the GGP JV, $165,000,000, (2) with respect to the Macerich JV, $150,000,000 and (3) with respect to the Simon JV, $114,000,000 or (b) with respect to any JV Release Property, the Release Price paid by Borrower to obtain release of such JV Release Property plus (ii) in any case, additional invested capital and any applicable preferred return on such JV Interests in accordance with the applicable JV Documents.

“Lands’ End Master Lease” means that certain Master Lease Agreement by and between Sears, Roebuck and Co. as Landlord and Lands’ End, Inc. as Tenant, entered into as of April 4, 2014 and each effective as of February 1, 2014.

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[NEWYORK 3109630_12]

“Property Release Threshold” means an amount equal to the difference of (i) $70,858,696.80 minus (ii) any amounts required to be deducted therefrom in accordance with Section 2.1(b)(ii)minus (iii) (x) any Designated Net Sales Proceeds deposited in the TI/LC Reserve Account and/or the Redevelopment Project Reserve Account in accordance with Section 2.2(a)(iv) multiplied by (y) the Loan Pro Rata Share.  

“SHLD EBITDAR” means, with respect to any Test Period and the Properties subject to the SHLD Master Lease, the aggregate net income (which for the purposes of this calculation shall exclude all rents collected by the SHLD Master Tenant from any Affiliate of SHLD Master Tenant unless such Affiliate is a Tenant at the applicable Properties and also a tenant at similar properties owned or leased by SHLD and/or its subsidiaries under a master agreement in connection with a national or regional roll-out by such Tenant at Sears stores and/or Kmart stores) or loss for such Test Period calculated with respect to the operations of the SHLD Master Tenants at the Properties subject to the SHLD Master Lease on a Property-by-Property or “four wall” basis, determined in accordance with GAAP and adjusted by excluding (1) income tax expense, (2) consolidated interest expense (net of interest income), (3) depreciation and amortization expense, (4) any income, gains or losses attributable to the early extinguishment or conversion of indebtedness or cancellation of indebtedness, (5) gains or losses on discontinued operations and asset sales, disposals or abandonments, (6) impairment charges or asset write-offs, including, without limitation, those related to goodwill or intangible assets, Long-Lived Assets, and investments in debt and equity securities, in each case, in accordance with GAAP, (7) any noncash items of expense (other than to the extent such noncash items of expense require or result in an accrual or reserve for future cash expenses), (8) extraordinary gains or losses, (9) unusual or nonrecurring gains or items of income or loss and (10) SHLD Master Lease Rent for such Test Period; provided that each of net income and the foregoing adjustments shall be determined using the methodologies and practices of SHLD in effect as of the Closing Date as shown on Schedule K to the Mortgage Loan Agreement.

“Spread Maintenance Premium” means (i) with respect to any prepayment of the Loan in accordance with the terms of this Agreement or (ii) during the continuance of an Event of Default, an amount equal to the product of (a) the principal amount so prepaid, times (b) the applicable Spread, times (c) 1/360, times (d) the number of days from (but excluding) the conclusion of the Interest Accrual Period through which interest has been (or, in connection with such prepayment, will be) paid on such prepayment in accordance with this Agreement through and including the applicable Spread Maintenance Expiration Date; provided that no Spread Maintenance Premium shall be payable with respect to Excluded Prepayments.

b. The following definitions are hereby added to the Loan Agreement:

“Additional Conveyance Parcels” means those certain parcels relating to automotive centers associated with Property #1968 (Palm Desert, CA) and Property #1978 (Reno, NV) and a warehouse associated with Property #1089 (Anchorage, AK), each as more particularly described on Schedule T to the Mortgage Loan Agreement.

“Leased Additional Conveyance Parcel” means that certain parcel relating to an automotive center associated with Property #1968 (Palm Desert, CA), as more particularly described on Schedule T to the Mortgage Loan Agreement.

“Mortgage Loan Allocated Loan Amount” means the “Allocated Loan Amount” as defined in the Mortgage Loan Agreement.

2. Voluntary Prepayment.

a. Section 2.1(a) of the Loan Agreement is hereby amended and restated in its entirety as follows:

Borrower shall be prohibited from prepaying the Loan, in whole or in part, during the Lockout Period except in connection with (i) the application of Loss Proceeds following a Casualty or Condemnation with respect to a Property in accordance with Section 5.16 or pursuant to Section 2.1(c) or (ii) in connection with the release of one or more Properties in accordance with Section 2.2 or Section 2.3.  After the expiration of the Lockout Period, Borrower shall have the right, at its option, upon not less than 5 Business Days’ prior written notice to Lender (or such other notice period as specified), to prepay the Loan in whole or, to the extent provided in Section 1.1(d)(iii), Section 2.1(b), Section 2.1(c), Section 2.2 and Section 2.3 in part; provided that (x) Borrower shall pay to Lender simultaneously with such prepayment the applicable Spread Maintenance Premium, if any, (y) there is a simultaneous and pro rata prepayment of the Mortgage Loan with the result that, after giving effect to such prepayments, the Loan Pro Rata Share remains unchanged and (z) each prepayment of the Loan shall be accompanied by the amount of unpaid interest that would have accrued on the principal amount of the Loan to be prepaid through and including the last day of the Interest Accrual Period related to the Payment Date next occurring following the date of such prepayment or, if such prepayment occurs on a Payment Date, the amount of interest that would have accrued on the principal amount of the Loan to be prepaid through and including the last day of the Interest Accrual Period related to such Payment Date.  Borrower’s notice of prepayment may be rescinded with one (1) Business Days’ written

2

[NEWYORK 3109630_12]

notice by Borrower to Lender (subject to payment of any reasonable out‑of‑pocket costs and expenses actually incurred by Lender, including breakage costs actually incurred by Lender, resulting from such rescission).

b. Section 2.1(c) of the Loan Agreement is hereby amended and restated in its entirety as follows:

If the Debt Yield is less than the applicable 11.0% as of the end of any Test Period at any time, Borrower shall be permitted to (but not obligated to) prepay a portion of the Loan (together with a simultaneous pro rata prepayment by Mortgage Borrower of the Mortgage Loan) in the amount required to cause the Debt Yield to equal 11.0%, which prepayment shall be accompanied by interest on the principal amount so prepaid as required by Section 2.1(a), plus the applicable Spread Maintenance Premium.

c. The word “party” in the final sentence of Section 2.1(e) of the Loan Agreement is hereby replaced with the word “part”.

3. Property Releases.  The final sentence of Section 2.2(a)(iv) of the Loan Agreement is hereby amended and restated in its entirety as follows:

Notwithstanding the foregoing, Property Owner may, with respect to any Release Property, deposit a portion of the Net Sales Proceeds thereof in excess of 150% of the sum of the Allocated Loan Amount and the Mortgage Loan Allocated Loan Amount of such Release Property into the Redevelopment Project Reserve Account or the TI/LC Reserve Account (any such Net Sales Proceeds so deposited, “Designated Net Sales Proceeds”); provided that (1) the aggregate amount of the Designated Net Sales Proceeds deposited pursuant to this sentence and the corresponding sentence in Section 2.2(a)(iv) of the Mortgage Loan Agreement shall not exceed $75,000,000 during the life of the Loan and (2) not more than $50,000,000 in the aggregate of such Net Sales Proceeds shall remain in the Redevelopment Project Reserve Account and/or the TI/LC Reserve Account at any one time.

4. New Borrowers.  Section 9.30(c) of the Loan Agreement is hereby amended and restated in its entirety as follows:

(iii) each of Seritage REIT and Seritage OP shall have duly executed and delivered to Lender a reaffirmation of the Guaranty and a reaffirmation of the Completion Guaranty;

5. Additional Conveyances.  The following is hereby added as new Section 5.25 to the Loan Agreement:

Section 5.25.  Additional Conveyances.

(a) Borrower represents and warrants that Property Owner and SHLD have agreed that the failure to convey the Additional Conveyance Parcels to Property Owner of record on the Closing Date was unintentional and each shall use reasonable best efforts to cause the conveyance to be completed expeditiously and in accordance with Section 8.1 (Further Assurances) of the SHLD PSA without additional consideration being required of any party to the SHLD PSA.

(b) Borrower shall, at Borrower’s sole cost and expense, use commercially reasonable efforts to, as promptly as reasonably practicable, (i) cause fee simple or ground leasehold, as applicable, interests in the Additional Conveyance Parcels to be conveyed to Property Owner pursuant to conveyance documentation prepared by Borrower and reasonably acceptable to the Lender, (ii) cause an owner’s policy of title insurance with a mezzanine endorsement in form and substance reasonably acceptable to Lender to be issued and a Survey to be provided with respect to each of the Additional Conveyance Parcels, (iii) provide Lender evidence of insurance satisfying the applicable requirements of the Mortgage Loan Agreement with respect to each of the Additional Conveyance Parcels , (iv) to the extent the Additional Conveyance Parcels were not included in the applicable reports provided to Lender in connection with origination of the Loan, provide Lender property condition reports, Environmental Reports and zoning reports with respect to each of the Additional Conveyance Parcels, in each case consistent with the forms and standards for reports provided to Lender in respect of Properties other than the Additional Conveyance Parcels in connection with origination of the Loan and reasonably acceptable to Lender and (v) execute such mortgages, deeds of trust, mortgage amendments or deed of trust amendments as the Lender may reasonably require in connection therewith, in each case in form and substance reasonably acceptable to the Lender.  This Section 5.25 shall supersede Section 5.9 of this Agreement and similar provisions of the Loan Documents with respect to the matters set forth herein.

(c) Notwithstanding the foregoing, Borrower shall not be required to cause Property Owner to take title to the leasehold interest in the Leased Additional Conveyance Parcel to the extent that, after the use of commercially reasonable efforts, it is unable to obtain the consent of the lessor in respect thereof or to enter into an amendment with such lessor to the lease in respect

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[NEWYORK 3109630_12]

thereof that would permit the Leased Additional Conveyance Parcel to be used and developed by Property Owner consistent with the commercial standards applicable to the other Properties in all material respects.  If, after the use of commercially reasonable efforts, Borrower is unable to obtain the requisite consent and amendment, Borrower shall cause Property Owner to relinquish the right to the Leased Additional Conveyance Parcel to SHLD in exchange for the repayment by SHLD to the Property Owner of the purchase price paid by Property Owner for the Leased Additional Conveyance Parcel in the Transaction; provided, (i) Borrower shall cause Property Owner to cause such payment to be made or immediately deposited into the Redevelopment Project Reserve Account to be held or disbursed in accordance with the terms of this Agreement applicable to funds in the Redevelopment Project Reserve Account, and (ii) the “Base Rent” (as defined in the SHLD Master Lease) shall be decreased by the amount attributable to the Leased Additional Conveyance Parcel.

(d) Any reasonable out-of-pocket expenses actually incurred by Lender (including reasonable attorneys’ fees and expenses) in connection with Section 5.25(b) shall be paid by Borrower to Lender promptly (and in any event within five Business Days) following demand.

6. Definition of Indemnified Liabilities.  Section 1.2 of the Guaranty is hereby amended and restated in its entirety as follows:

1.2 Definition of Indemnified Liabilities.  As used herein, the term “Indemnified Liabilities” means all obligations and liabilities of Borrower pursuant to Section 9.19(b) and Section 9.19(c) of the Loan Agreement.

7. Virginia Beach Property.  Borrower has become aware that the legal description attached to the deed conveying the Property located in Virginia Beach, Virginia (Sears #1265) (the “Virginia Beach Property”) to Property Owner pursuant to the Approved Separation Transaction, contains the inaccuracies depicted on Exhibit A hereto, and Borrower hereby covenants to deliver, or cause Property Owner to deliver, with respect to the Virginia Beach Property, (i) an amended deed with a corrected legal description, (ii) an updated Survey, and (iii) an updated owner’s Title Insurance Policy in favor of Property Owner.

8. Waiver.  By their signatures below, the Lender hereby waives any Default or Event of Default, if any, arising from the failure of the Borrower to cause Property Owner to obtain title to the Additional Conveyance Parcels on the Closing Date and from the innacuracies in the deed conveying the Virginia Beach Property (as depicted on Exhibit A hereto), including without limitation any Default or Event of Default arising from the breach of a representation or warranty in any Loan Document relating to ownership of the Additional Conveyance Parcels or such inaccuracies.

9. Change of Notice Address.  Effective as of October 1, 2015, by its signature below each of Borrower and Guarantor hereby provide notice of a change in its notice address as follows for all purposes of the Loan Documents:

If to Borrower:

c/o Seritage Growth Properties, L.P.

489 Fifth Avenue

18^th Floor

New York, NY 10017

Attention:     Matthew Fernand

Executive Vice President & General Counsel

mfernand@seritage.com

and

Mary Rottler 

Executive Vice President, Operations and Leasing

mrottler@seritage.com

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with copies to:

Mayer Brown LLP

71 S. Wacker Dr.

Chicago, IL 60606

Attention:  Heather Adkerson

HAdkerson@mayerbrown.com

and:

Wachtell, Lipton, Rosen & Katz

51 W. 52^nd Street

New York, NY 10019

Attention:  Josh Feltman

jafeltman@wlrk.com.

If to Guarantor:

Seritage Growth Properties

c/o Seritage Growth Properties, L.P.

489 Fifth Avenue

18^th Floor

New York, NY 10017

Attention:     Matthew Fernand

Executive Vice President & General Counsel

mfernand@seritage.com

and

Mary Rottler 

Executive Vice President, Operations and Leasing

mrottler@seritage.com

with copies to:

Mayer Brown LLP

71 S. Wacker Dr.

Chicago, IL 60606

Attention:  Heather Adkerson

HAdkerson@mayerbrown.com

and:

Wachtell, Lipton, Rosen & Katz

51 W. 52^nd Street

New York, NY 10019

Attention:  Josh Feltman

jafeltman@wlrk.com.

10. Governing Law.  This Amendment shall be governed by and construed and interpreted in accordance with the laws of the State of New York.

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11.Successors and Assigns.  This Amendment shall be binding upon Guarantor and its successors and assigns, and shall be binding upon and inure to the benefit of Lender and its successors and assigns, including any subsequent holder of all or any portion of the Note.

12. Miscellaneous.  All of the terms and conditions of the Loan Documents, as modified or waived by this Amendment, are hereby ratified and confirmed in all respects and shall remain in full force and effect in accordance with their terms.  All references to the Loan Agreement and to the Guaranty in any Loan Document shall, from and after the execution and delivery of this Amendment, be deemed a reference to the Loan Agreement and Guaranty as amended hereby and as hereafter amended, modified or extended from time to time. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Copies of originals, including copies delivered by facsimile, pdf or other electronic means, shall have the same import and effect as original counterparts and shall be valid, enforceable and binding for the purposes of this Amendment.

[Signatures appear on following page.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized representatives, all as of the day and year first above written.  

LENDER:
H/2 SPECIAL OPPORTUNITIES III CORP.
By:
Name:	Daniel Ottensoser
Title:	Authorized Signatory
By:
Name:	Ben Doramus
Title:	Authorized Signatory

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

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H/2 CREDIT PARTNERS MASTER FUND LTD.
By:
Name:	Spencer B. Haber
Title:	Director

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

[NEWYORK 3109630_12]

H/2 INVESTORS, LTD.
By:
Name:	Spencer B. Haber
Title:	Director

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

[NEWYORK 3109630_12]

H/2 INVESTORS II, L.P.
By:	H/2 Investors II GP LLC, the general partner
By:
Name:	Spencer B. Haber
Title:	Managing Member

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

[NEWYORK 3109630_12]

H/2 TARGETED RETURN STRATEGIES II LTD.
By:
Name:	Spencer B. Haber
Title:	Director

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

[NEWYORK 3109630_12]

BORROWER:
SERITAGE SRC MEZZANINE FINANCE LLC,
a Delaware limited liability company
By:
Name:	Benjamin Schall
Title:	President
SERITAGE KMT MEZZANINE FINANCE LLC,
a Delaware limited liability company
By:
Name:		Benjamin Schall
Title:		President

[Signatures continue on next page.]

Omnibus Amendment to Mezzanine Loan Documents

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GUARANTOR:

SERITAGE GROWTH PROPERTIES,
a Maryland real estate investment trust
By:
Name:	Matthew Fernand
Title:	Executive Vice President, General
	Counsel and Secretary
SERITAGE GROWTH PROPERTIES, L.P.,
a Delaware limited partnership
By:	Seritage Growth Properties, its general partner
By:
Name:	Matthew Fernand
Title:	Executive Vice President, General
	Counsel and Secretary

Omnibus Amendment to Mezzanine Loan Documents

[NEWYORK 3109630_12]

Exhibit A

Virginia Beach Property Inaccuracies

Exhibit A

EX-10.10

Exhibit 10.10

SECOND AMENDMENT TO MEZZANINE LOAN AGREEMENT

THIS SECOND AMENDMENT TO MEZZANINE LOAN AGREEMENT (this “Amendment”) is made as of the 8^th day of November, 2016 (the “Amendment Date”), by and among:

(A) Wells Fargo Bank, National Association (“Wells Fargo”), not individually but solely in its capacity as trustee (the “Trustee”) for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ, Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ (as successor-in-interest to JPMorgan Chase Bank, National Association, a national banking association (“JPM”), and H/2 Special Opportunities III Corp., a Delaware corporation, collectively with JPM, “Original Lender”) (Wells Fargo, together with its successors and assigns, "Lender");

(B) SERITAGE SRC MEZZANINE FINANCE LLC and SERITAGE KMT MEZZANINE FINANCE LLC, each a Delaware limited liabilitycompany (individually and/or collectively, as the context may require, “Borrower”); and

(C) Seritage Growth Properties, a Maryland real estate investment trust, andSeritage Growth Properties, L.P., a Delaware limited partnership (individually and/or collectively, as the context may require, the “Guarantor”).  

RECITALS:

WHEREAS, on July 7, 2015 (the “Closing Date”) Original Lender made a loan to Borrower in the original principal amount of $236,195,656 (the “Loan”), which Loan is evidenced by, inter alia: (i) the Notes (as defined in the Loan Agreement) and (ii) that certain Mezzanine Loan Agreement (the “Original Loan Agreement”), dated as of the Closing Date, by and among Borrower and Original Lender, as amended by that certain Omnibus Amendment (Mezzanine Loan), dated as of September 28, 2015, by and among Original Lender, Borrower and Guarantor (the “Omnibus Amendment”; and together with the Original Loan Agreement, as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Loan Agreement”);

WHEREAS, in connection with the origination of the Loan, (i) Guarantor executed and delivered that certain Guaranty, dated as of the Closing Date, as amended by the Omnibus Amendment (as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Guaranty”), (ii) Borrower and Guarantor executed and delivered that certain environmental indemnity agreement, dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Environmental Indemnity”), and (iii) Guarantor executed and delivered that certain Completion Guaranty (Mezzanine), dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Completion Guaranty”);

WHEREAS, the Notes and the Loan were subsequently transferred to J.P. Morgan Chase Commercial Mortgage Securities Corp. (the “Depositor”) and included in the J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ (the “Trust”), Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ transaction (the “Securitization”);

WHEREAS, (i) Strategic Asset Services LLC (“SAS”) has been appointed as primary servicer (in such capacity, the “Primary Servicer”) with respect to each of the Loan and the Mortgage Loan (as defined in the Loan Agreement); (ii) SAS has been appointed as special servicer of the Mortgage Loan (in such capacity, the “Mortgage Special Servicer”); and (iii) Berkadia Commercial Mortgage LLC (“Berkadia”) has been appointed as the master servicer of the Loan and the Mortgage Loan (in such capacities, the “Master Servicer”) and as the special servicer of the Loan (in such capacity, the “Mezzanine Special Servicer”); and

WHEREAS, Borrower and Lender hereby agree to amend the Loan Agreement on the terms set forth herein.  All capitalized terms used but not defined herein have the meanings ascribed to them in the Loan Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

22790655.6.BUSINESS

ARTICLE I.

AMENDMENTS TO LOAN AGREEMENT

1.1. Amendments to Definitions.

(a) The definition of “Liquidity” set forth in the Loan Agreement is hereby amended by deleting the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account not earmarked for a specific use and (b) undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not designated by Property Owner to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter” that appears therein and replacing it with the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account and in the Redevelopment Project Reserve Account, in each case, not earmarked for a specific use and (b) undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not designated by Property Owner to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter”.

(b) The definition of “Spread Maintenance Expiration Date” set forth in the Loan Agreement is hereby amended by deleting each reference to “January 9, 2018” that appears therein and replacing each such reference with “March 9, 2018”.

(c) The definition of “Spread Maintenance Premium” set forth in the Loan Agreement is hereby amended by inserting at the end thereof the following provision: “; and provided further, that, notwithstanding anything in this Agreement or any other Loan Document to the contrary, the amount of Spread Maintenance Premium calculated pursuant to this definition shall be adjusted so that the Spread Maintenance Premium calculated for the period of time from February 9, 2018 through March 9, 2018 shall be an amount equal to $1,000,000 multiplied by (A) a fraction equal to the principal balance of the Loan being repaid divided by an amount equal to the principal balance of the Loan being repaid plus the principal amount of the Mortgage Loan being repaid with the result further multiplied by (B) a fraction equal to the amount of the Loan being repaid divided by the outstanding principal balance of the Loan immediately prior to such repayment.”  

(d) A new definition of “Amendment Date” is hereby added to the “Definitions” section of the Loan Agreement in alphabetical order, as follows: “Amendment Date” shall mean November 8, 2016.

1.2. Amendment to Section 5.22(a).  Section 5.22(a) of the Loan Agreement is hereby amended by adding the following sentences to the end of such clause (a):

“From and after the Amendment Date and for so long as there are undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not previously designated by Borrower or Property Owner to fund a specific Redevelopment Project), all new Redevelopment Plans and Budgets submitted by Borrower or Property Owner to Lender shall provide that the source of funding of such Redevelopment Projects shall be the Mortgage Loan Future Advance Amount and the costs shall be funded from the Mortgage Loan Future Advance Amount for so long as such amounts are available and subject to the satisfaction of all conditions for the advance of such funds (it being understood that with respect to any Redevelopment Project that has been approved by Lender and the conditions set forth in Section 5.22(b) have been satisfied, if the conditions of Section 5.22(c)(ii) or (vi) of the Mortgage Loan Agreement are not satisfied despite Property Owner’s good faith efforts to satisfy such conditions or such conditions are waived by Lender, then Property Owner or Borrower shall be permitted to pay the costs related to such Redevelopment Project with unrestricted cash; provided that in such circumstances Borrower shall cause Property Owner to diligently pursue the satisfaction of such conditions and cause Property Owner to request a draw of the Mortgage Loan Future Advance Amount promptly following satisfaction of such conditions).  Notwithstanding anything in this clause (a) to the contrary, with respect to the first $80,000,000 of new Redevelopment Plans and Budgets submitted to Lender from and after the Amendment Date, all references to $5,000,000 in this clause (a) shall mean $15,000,000 and all references to $7,500,000 in this clause (a) shall mean $15,000,000, in each case, for the purposes of Section 5.22(a) only, and shall not modify the definition of “Major Redevelopment Project” or the amounts referenced therein with respect to any other provision of the Loan Documents.”  

1.3. Change of Notice Address.  Effective as of the date hereof, by its signature below each of Borrower and Guarantor hereby provides notice of a change of its address as follows for all purposes of the Loan Documents:

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“If to Borrower or Guarantor:

c/o Seritage Growth Properties, L.P.
489 Fifth Avenue 18th Floor
New York, New York 10017
Attention:	Matthew Fernand
	Executive Vice President & General Counsel
	mfernand@seritage.com
	and
	Mary Rottler
	Executive Vice President, Operations and Leasing
	mrottler@seritage.com
with copies to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention:	Jonathan L. Mechanic
	jonathan.mechanic@friedfrank.com”

ARTICLE II.

REPRESENTATIONS AND RATIFICATION

2.1. Representations.  Borrower and Guarantor each represent and warrant, that this Amendment constitutes a legal, valid and binding obligation of such party, enforceable against such party, in accordance with its terms, subject to bankruptcy, insolvency and other limitations on creditors’ rights generally and to equitable principles.  Borrower and Guarantor each represent and warrant that as of the Amendment Date, the execution and delivery by such party of this Amendment and the performance of its respective obligations hereunder: (i) have been duly authorized by all requisite action on the part of such party; (ii) will not violate any provision of any applicable legal requirements, decree, injunction or demand of any court or other governmental authority, any organizational document of such party, or any indenture or agreement or other instrument to which such party is a party or by which such party is bound; (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien of any nature whatsoever upon any of the property or assets of such party pursuant to any such indenture or agreement or instrument; (iv) has been duly executed and delivered by such party; (v) except for those obtained or filed on or prior to the Amendment Date, it is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any governmental authority or other agency in connection with or as a condition to such party’s execution, delivery or performance of this Amendment; and (vi) this Amendment has been duly executed and delivered.  

2.2. Borrower Ratification of Loan Documents.  Borrower hereby: (i) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Loan Documents (as defined in the Loan Agreement), as amended hereby; (ii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms, covenants and conditions of the Loan Documents, without impairment, and remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Loan Documents, as amended hereby; (iii) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Borrower under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (iv) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Loan Documents, as amended hereby; and (v) represents and warrants that all representations and warranties made by Borrower contained in the Loan Documents are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate.

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2.3.Guarantor Ratification of Loan Documents.  Guarantor hereby: (i) agrees to the modification of the Loan as set forth herein; (ii) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (iii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against Guarantor in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents, without impairment, and remain unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents; (iv) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Guarantor and Borrower under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (v) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (vi) represents, warrants and agrees that, as of the Amendment Date, it has no defenses, set-offs, rights of recoupment, claims or counterclaims of any nature with respect to its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty or any other Loan Document to which it is a party or the enforcement thereof; and (vii) represents and warrants that all representations and warranties made by Guarantor contained in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate.

ARTICLE III.

WAIVERS AND RELEASES

3.1. Consideration.  Borrower and Guarantor each hereby acknowledges and agrees that: (i) it has received good and valuable consideration for its agreement to the terms and provisions of this Amendment; (ii) its agreement to such terms and provisions is a material condition and inducement to Lender’s willingness to enter into this Amendment; (iii) Lender has relied upon the agreement of each of Borrower and Guarantor to such terms and provisions in entering into this Amendment and Lender would not have entered into this Amendment without the agreement of Borrower and Guarantor to the terms and provisions of this Amendment, and Article III of this Amendment in particular; and (iv) it has been represented by competent counsel of its own choosing in the negotiation of this Amendment and Article III of this Amendment in particular, and it has discussed these provisions with counsel and hereby knowingly and willingly waives its rights as described in this Article III of this Amendment.  This Amendment may be introduced as evidence in any judicial or other proceeding, without further authentication or foundation, and shall constitute prima facie evidence of the facts and agreements set forth herein.

3.2. No Defaults; Defenses, Counterclaims or Offsets.  Each of Borrower and Guarantor acknowledge, agree, represent and warrant as to itself that, as of the Amendment Date, after giving effect to the modification of the Loan as contemplated hereby, no Event of Default has occurred and is continuing under any of the Loan Documents.  Borrower and Guarantor, each for itself and its respective successors and assigns, and by its execution hereof each: (i) hereby acknowledges, admits and agrees that, as of the Amendment Date, there are no objections, claims, defenses, counterclaims or offsets relating to its obligations under or in respect of the Loan, the Loan Documents or to the enforcement or exercise by Lender of any of its rights, powers or remedies under or in respect of the Loan Documents, at law or in equity; (ii) hereby irrevocably waives, relinquishes and releases any and all such objections, claims, defenses, counterclaims or offsets that may now exist, including without limitation, any and all such objections, claims, defenses, counterclaims or offsets whether known or unknown, foreseeable or unforeseeable; and (iii) hereby irrevocably further waives and renounces, to the fullest extent permitted by law, all rights to the benefits of any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead now or hereafter provided by the Constitution and laws of the United States of America and of each state thereof, both as to itself and in and to all of its property, real and personal, against the enforcement and collection of the obligations evidenced by the Notes or the other Loan Documents; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.2 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.

3.3. Releases.  Borrower and Guarantor each on behalf of itself and its respective successors and assigns (collectively, the “Borrower Releasing Parties”) each hereby irrevocably releases, and forever discharges each Exculpated Party from any and all

4

manner of controversies, liabilities, expenses, damages, judgments, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, whether known or unknown, which any of Borrower Releasing Parties now have by reason of any matter, cause or thing, from the beginning of the world to and including the Amendment Date arising out of or relating to any Exculpated Matter; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.3 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.  As used herein, “Exculpated Matter” means: (i) the interpretation, calculation, application and/or timing of the provisions of the Loan Documents or Mortgage Loan Documents related to any Cash Flow Sweep Cure Collateral, any Cash Flow Sweep Period and any Cash Flow Sweep Trigger Event (collectively, the “Cash Flow Sweep Definitions”), and, solely as they relate to the Cash Flow Sweep Definitions, In-Place NOI, Operating Expenses, Operating Income, SHLD EBITDAR, SHLD EBITDAR Rent Ratio, any Test Period, Third Party In-Place NOI and/or the Third Party In-Place NOI Threshold, and in each case, solely as they relate to the Cash Flow Sweep Definitions, any definitions or provisions of the Loan Documents or the Mortgage Loan Documents referred to therein or upon which the interpretation, calculation, application and/or timing of any of the foregoing rely; (ii) the granting of any extension or waiver of the applicability or timing with respect to the determination of any of the provisions described in clause (i) of this definition; and (iii) any matter with respect to any pre-negotiation agreement among SAS, Borrower and the other parties thereto in connection with the foregoing.  As used herein, “Exculpated Party” means each of the following: (i) each Original Lender; (ii) the Trustee; (iii) the Collateral Agent; (iv) the Trust; (v) the Primary Servicer; (vi) the Master Servicer; (vii) the Mortgage Special Servicer; (viii) the Mezzanine Special Servicer; (ix) the Depositor; (x) each other Lender (including holders and beneficial owners of certificates issued in connection with the Securitization); and (xi) all Related Parties of the foregoing.  As used herein, “Related Parties” shall mean with respect to any Person, such Person’s affiliates, and such Person’s and such Person’s affiliates partners, officers, directors, employees, agents, attorneys, servicers, subservicers, primary servicers, special servicers, contractors, representatives, participants, successors, assigns, subsidiaries, equity owners and predecessors-in-interest.

ARTICLE IV.

MISCELLANEOUS

4.1. Severability.  In case any provision of this Amendment shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal, and enforceable, provided that any such modification does not prevent the practical realization of the principal benefits intended by this Amendment.  In the event of such modification, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.2. No Modification Except in Writing.  None of the terms of this Amendment may be waived, altered, terminated or amended except by an instrument in writing duly executed by Borrower, Guarantor and Lender.

4.3. Further Assurances.  This Amendment shall be subject to Section 5.9 of the Loan Agreement.

4.4. Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed in such state (without regard to principles of conflicts of laws).  Borrower hereby waives any claim to assert that the law of any other jurisdiction governs this Amendment, and this Amendment shall be governed by and construed in accordance with the laws of the State of New York pursuant to Section 5-1401 of the New York General Obligations Law.

4.5. Joint and Several Liability. If Borrower or Guarantor consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint and several.

4.6. Costs and Expenses. Borrower shall pay all of Lender’s reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust)) incurred in connection with this Amendment.

4.7. Miscellaneous.

(a) The captions and Section headings in this Amendment are for convenience only and are not intended to define, alter, limit or enlarge in any way the scope or meaning of this Amendment or any term or provision set forth in this Amendment.

(b) The Recitals set forth at the beginning of this Amendment are incorporated in and made a part of this Amendment by this reference.

5

(c)Each reference in this Amendment to any gender shall be deemed also to include any other gender, and the use in this Amendment of the singular shall be deemed also to include the plural and vice versa, unless the context requires otherwise.

(d) This Amendment is, and shall be deemed to be, the product of joint drafting by the parties hereto and shall not be construed against any of them as the drafter hereof.

(e) This Amendment, together with the Loan Documents, constitute the entire agreement among the parties relating to the subject matter hereof.  To the extent this Amendment conflicts with any of the other Loan Documents, this Amendment shall control.

(f) This Amendment shall inure to the benefit of and be binding upon the parties and their respective heirs, successors and assigns.

(g) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Amendment will not be binding on or constitute evidence of a contract between the parties until such time as a counterpart of this document has been executed by each party and a copy thereof is delivered to each party to this Amendment.

4.8. Mortgage Lender Consent. Wells Fargo Bank, National Association, not individually but solely in its capacity as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Commercial Mortgage Pass-Through Certificates, Series 2015-SGP (together with its successors and assigns, “Mortgage Lender”) hereby executes this Amendment in order to consent to this Amendment and agrees that the Lender shall be entitled to rely upon the consent contained herein as satisfying any notice and consent obligations contained under the Intercreditor Agreement between the Lender and the Mortgage Lender.

4.9. Conditions Precedent to the Effectiveness of this Amendment.  The parties hereto acknowledge and agree that this Amendment shall have no force or effect until Mortgage Lender has received the Lump Sum Redevelopment Deposit (as defined in the Mortgage Loan Agreement), executed counterparts of this Amendment from each party hereto, and Borrower has paid Lender’s reasonable, out-of-pocket attorneys’ fees incurred in connection herewith (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust).

[Signatures appear on following pages]

6

IN WITNESS WHEREOF, the parties have hereunto executed this Amendment as of the date first written above.

BORROWER:
SERITAGE SRC MEZZANINE FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE KMT MEZZANINE FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:

22790655.6.BUSINESS

GUARANTOR:
Seritage Growth Properties, a Maryland real estate investment trust
By:
	Name:
	Title:
Seritage Growth Properties, L.P., a Delaware limited partnership
By:	Seritage Growth Properties,
	its general partner
	By:
		Name:
		Title:

LENDER:
wells fargo bank, national association, NOT INDIVIDUALLY BUT SOLELY IN ITS CAPACITY as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ, Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ
By:	Strategic Asset Services LLC,
	in its capacity as Primary Servicer
	By:
		Name:
		Title:
	By:
		Name:
		Title:

ACKNOWLEDGED AND AGREED:
MORTGAGE BORROWERS:
SERITAGE SRC FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE KMT FINANCE LLC, a Delaware limited liability company
By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED:
JV PLEDGORS:
SERITAGE GS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE SPS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:
SERITAGE MS HOLDINGS LLC, a Delaware limited liability company
By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED, as a party to, and as Guarantor (as defined in the Mortgage Loan Agreement) under and with respect to, any Mortgage Loan Document:
SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust
By:
	Name:
	Title:
SERITAGE GROWTH PROPERTIES, L.P., a Delaware limited partnership
By:	Seritage Growth Properties,
	its general partner
	By:
		Name:
		Title:

ACKNOWLEDGED AND AGREED:
MORTGAGE LENDER:
wells fargo bank, national association, not individually but solely in its capacity as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Commercial Mortgage Pass-Through Certificates, Series 2015-SGP
By:	Strategic Asset Services LLC,
	in its capacity as Primary Servicer
	By:
		Name:
		Title:
	By:
		Name:
		Title:

EX-10.14

Exhibit 10.14

EXECUTION VERSION

SERITAGE GROWTH PROPERTIES

TIME-VESTING RESTRICTED SHARE AGREEMENT

Name of Grantee:	(the “Grantee”)
No. of Restricted Shares:
Issuance Date:	(the “Issuance Date”)

WHEREAS, the Grantee currently provides services to Seritage Growth Properties, a Maryland real estate investment trust (the “Company”) and its Subsidiaries as defined in the Seritage Growth Properties 2015 Share Plan (the “Plan”);

WHEREAS, the Company desires to (i) provide the Grantee with an incentive to remain in the employ of the Company or its Subsidiaries and (ii) increase the Grantee’s interest in the success of the Company by granting restricted Shares (the “Restricted Shares”);

WHEREAS, reference is made herein to the Grantee’s employment agreement with the Company dated May 15, 2015 (the “Employment Agreement”), as this issuance of Restricted Shares constitutes the grant of equity awards contemplated as a “Sign-On Award TV-RSU Award” for purposes of the Company satisfying its obligations to grant such an award pursuant to the Employment Agreement; and

WHEREAS, the issuance of the Restricted Shares is made pursuant to the Plan; and made subject to the terms and conditions of this Seritage Growth Properties Restricted Share Agreement (the “Agreement”).

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

1. Definitions; Incorporation of Plan Terms. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Plan. This Agreement and the Restricted Shares shall be subject to the Plan and the terms of the Plan are incorporated into this Agreement by reference. In the event of any difference between the provisions of this Agreement and the terms of the Plan, the terms of this Agreement will control. The Grantee hereby acknowledges receipt of a copy of the Plan.

2. Grant of Restricted Shares. Subject to the provisions of this Agreement and pursuant to the provisions of the Plan, the Company hereby grants and issues to the Grantee the Restricted Shares specified above.  The Grantee agrees that within thirty days of the Issuance Date, the Grantee shall give notice to the Company as to whether the Grantee has made an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended.

3. Vesting of Restricted Shares.  

(a) All Restricted Shares shall be subject to the vesting requirements set forth on Schedule A of this Agreement.

(b) Except as provided in the Grantee’s Employment Agreement, if the Grantee resigns or the Grantee’s employment is terminated by the Company for any reason other than the Grantee’s death or Disability, the Grantee’s Restricted Shares will be forfeited as of the date of termination.

(c) If the Grantee’s employment terminates due to the Grantee’s death or Disability (as defined below), then, unless the Grantee’s Employment Agreement separately provides for treatment of unvested Restricted Shares upon the Grantee’s death or Disability, any outstanding, unvested Restricted Shares as of the date of termination shall vest as of the date of termination, and performance with respect to such Restricted Shares will be determined as of the date of termination.  “Disability” shall be defined as in the Grantee’s Employment Agreement, or, if not defined in the Grantee’s Employment Agreement, shall mean disability as defined under the Company’s long-term disability plan (regardless of whether the Grantee is a participant under such plan), or, if no such plan exists, Grantee’s inability by reason of disability to perform Grantee’s duties for 180 consecutive days.

B-1

(d)Upon a Change in Control, the treatment of the Grantee’s Restricted Shares will determined in accordance with Section 13 of the Plan.

4. Forfeiture.  Except as otherwise set forth in this Agreement or the Employment Agreement, all unvested Restricted Shares shall be automatically cancelled and forfeited upon any termination of the Grantee’s employment with the Company and its Subsidiaries prior to vesting.

5. Grantee’s Rights During the Restricted Period.

(a) Except as otherwise provided in the Plan or this Agreement, during any period when the Restricted Shares are forfeitable, the Grantee may exercise all the rights of a shareholder with respect to the Restricted Shares, including the right to vote such shares and to receive any ordinary cash dividends (without regard to any vesting requirements set forth on Schedule A of this Agreement). The Grantee’s rights to a dividend other than an ordinary cash dividend shall be subject to the terms of the Plan. The Grantee will not be entitled to voting or dividend rights with respect to record dates occurring before the Issuance Date, nor with respect to record dates occurring on or after the date, if any, on which the Grantee forfeits the Restricted Shares.

(b) No rights granted under the Plan or this Agreement and no shares issued pursuant to a Restricted Share Award Agreement shall be transferable by the Grantee other than by will or by the laws of descent and distribution prior to the time the Grantee’s interest in such shares has become fully vested. The transferability of the shares shall also be limited by any legend restricting transferability on any certificates representing such shares.

(c) No physical certificates evidencing the Restricted Shares will be issued to the Grantee. Instead, the Restricted Shares will be evidenced by certificates held by or on behalf of the Company, in book-entry form, or otherwise, as determined by the Company.

6. Delivery of Vested Shares.

(a) Restricted Shares that have vested in accordance with Section 3 shall be delivered (via certificate or such other method as the Committee determines) to the Grantee as soon as practicable after vesting occurs.

(b) By accepting Restricted Shares, the Grantee agrees not to sell shares at a time when applicable laws or the Company’s rules prohibit a sale. This restriction will apply as long as the Grantee is an employee, consultant or director of the Company or a Subsidiary.

(c) To the extent that Grantee does not vest in any Restricted Shares, all interest in such shares shall be forfeited. The Grantee has no right or interest in Restricted Shares that are forfeited.

(d) The Company shall have the right to refuse to issue or transfer any shares under this Agreement if the Company acting in its absolute discretion determines that the issuance or transfer of such shares might violate any applicable law or regulation.

7. Taxes.

(a) This Section 7(a) applies only to (a) all Grantees who are U.S. employees, and (b) to those Grantees who are employed by a Subsidiary of the Company that is obligated under applicable local law to withhold taxes with respect to the settlement of the Restricted Shares. Such Grantee shall pay to the Company or a designated Subsidiary, promptly upon request, and in any event at the time the Grantee recognizes taxable income with respect to the Restricted Shares, an amount equal to the taxes the Company determines it is required to withhold under applicable tax laws with respect to the Restricted Shares. The Grantee may satisfy the foregoing requirement by making a payment to the Company in cash or by delivering already owned unrestricted Shares or by having the Company withhold a number of Shares in which the Grantee would otherwise become vested under this Agreement, in each case, having a value equal to the minimum amount of tax required to be withheld. Such Shares shall be valued at their Fair Market Value on the date as of which the amount of tax to be withheld is determined.

(b) The Grantee acknowledges that the tax laws and regulations applicable to the Restricted Shares and the disposition of the shares following the settlement of Restricted Shares are complex and subject to change.

B-2

8.Exchange of Restricted Shares for LTIP Units.  Within thirty (30) days after the Grant Date, the Company and the Grantee may agree to exchange the Restricted Shares for LTIP Units, which, upon any such exchange, shall be subject to the same vesting terms as set forth in this Agreement, but which shall not provide the Grantee with the rights of a Company shareholder (including as provided under this Agreement, but which shall instead entitled the Grantee with such rights as may attach to LTIP Units pursuant to the applicable terms of the limited partnership agreement of Seritage GrowthProperties,L.P.

9. Protections Against Violations of Agreement. No purported sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Restricted Shares by any holder thereof in violation of the provisions of this Agreement or the Declaration of Trust or the Bylaws of the Company, will be valid, and the Company will not transfer any shares resulting from the settlement of Restricted Shares on its books nor will any of such shares be entitled to vote, nor will any dividends be paid thereon, unless and until there has been full compliance with such provisions to the satisfaction of the Company. The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce such provisions.

10. Survival of Terms. This Agreement shall apply to and bind the Grantee and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.

11. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or sent by certified or registered mail, return receipt requested, postage prepaid, addressed, if to the Grantee, to the Grantee’s attention at the mailing address set forth at the foot of this Agreement (or to such other address as the Grantee shall have specified to the Company in writing) and, if to the Company, to the Company’s office at 333 Beverly Road, Hoffman Estates, IL 60179, Attention: General Counsel (or to such other address as the Company shall have specified to the Grantee in writing). All such notices shall be conclusively deemed to be received and shall be effective, if sent by hand delivery, upon receipt, or if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.

12. Waiver. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

13. Authority of the Administrator. In accordance with the terms of the Plan, the Committee shall have full authority to interpret and construe the terms of the Plan and this Agreement. The determination of the Committee as to any such matter of interpretation or construction shall be final, binding and conclusive.

14. Representations. The Grantee has reviewed with her own tax advisors the applicable tax (U.S., foreign, state, and local) consequences of the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that he (and not the Company) shall be responsible for any tax liability imposed on him that may arise as a result of the transactions contemplated by this Agreement.

15. Entire Agreement; Governing Law. This Agreement and the Plan and the other related agreements expressly referred to herein set forth the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Maryland.

16. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable, or enforceable only if modified, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties hereto with any such modification (if any) to become a part hereof and treated as though contained in this original Agreement. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable, in lieu of severing such unenforceable provision, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear, and such determination by such judicial body shall not affect the enforceability of such provisions or provisions in any other jurisdiction.

17. Amendments; Construction. The Committee may amend the terms of this Agreement prospectively or retroactively at any time, but no such amendment shall impair the rights of the Grantee hereunder without his consent. Headings to Sections of this Agreement are intended for convenience of reference only, are not part of this Agreement and shall have no effect on the interpretation hereof.

B-3

18.Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understand the terms and provision thereof, and accepts the shares of Restricted Shares subject to all the terms and conditions of the Plan and this Agreement. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under this Agreement.

19. Miscellaneous.

(a) No Rights to Grants or Continued Employment. The Grantee acknowledges that the award granted under this Agreement is not an employment right. Neither the Plan nor this Agreement, nor any action taken or omitted to be taken hereunder or thereunder, shall be deemed to create or confer on the Grantee any right to be retained as an employee of the Company or any Subsidiary thereof, or to interfere with or to limit in any way the right of the Company or any Subsidiary thereof to terminate the employment of the Grantee at any time.

(b) No Restriction on Right of Company to Effect Corporate Changes. Neither the Plan nor this Agreement shall affect in any way the right or power of the Company or its Shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of Share or of options, warrants or rights to purchase Share or of bonds, debentures, preferred, or prior preference Shares whose rights are superior to or affect the Common Share or the rights thereof or which are convertible into or exchangeable for Common Share, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the assets or business of the Company, or any other corporate act or proceeding, whether of a similar character or otherwise.

(c) Assignment. The Company shall have the right to assign any of its rights and to delegate any of its duties under this Agreement to any of its affiliates.

THIS AGREEMENT SHALL BE NULL AND VOID AND UNENFORCEABLE BY THE GRANTEE UNLESS SIGNED AND DELIVERED TO THE COMPANY NOT LATER THAN THIRTY (30) DAYS SUBSEQUENT TO THE ISSUANCE DATE.

BY SIGNING THIS AGREEMENT, THE GRANTEE IS HEREBY CONSENTING TO THE PROCESSING AND TRANSFER OF THE GRANTEE’S PERSONAL DATA BY THE COMPANY TO THE EXTENT NECESSARY TO ADMINISTER AND PROCESS THE AWARDS GRANTED UNDER THIS AGREEMENT.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Grantee has executed this Agreement, both as of the day and year first above written.

[SIGNATURE PAGE FOLLOWS]

B-4

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the date first above written.

COMPANY
SERITAGE GROWTH PROPERTIES
By:
	Name:	Benjamin Schall
	Title:	Chief Executive Officer

GRANTEE
By:
	Name:	Matthew Fernand
	Address:

SCHEDULE A

(TIME-VESTING RESTRICTED SHARES)

The Restricted Shares shall vest on the corresponding date(s) set forth in the vesting schedule set forth below (each, a “Vesting Date”) and provided that, subject to Sections 3 and 4 of the Time-Vesting Restricted Share Agreement, on each Vesting Date, the Grantee is an active employee of the Company from the Issuance Date through such Vesting Date (without consideration of any severance-related salary continuation period, if applicable).

Vesting Date	Vesting of Restricted Shares
First anniversary of Issuance Date		33.3	%
Second anniversary of Issuance Date		33.3	%
Third anniversary of Issuance Date		33.4	%

B-6

EX-21.1

Exhibit 21.1

Subsidiary Name	State or Other Jurisdiction of Incorporation or Organization
Seritage Growth Properties, L.P.	Delaware
Seritage SRC Finance LLC	Delaware
Seritage KMT Finance LLC	Delaware
Seritage SRC Mezzanine Finance LLC	Delaware
Seritage KMT Mezzanine Finance LLC	Delaware
Seritage Management LLC	Delaware
Seritage GS Holdings LLC	Delaware
Seritage SPS Holdings LLC	Delaware
Seritage MS Holdings LLC	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-205538 on Form S-8 of our reports dated March 1, 2017, relating to the consolidated financial statements and financial statement schedule of Seritage Growth Properties and subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Seritage Growth Properties for the year ended December 31, 2016.

/s/ Deloitte & Touche LLP

New York, New York

March 1, 2017

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Benjamin Schall, certify that:

1. I have reviewed this annual report on Form 10-K of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Benjamin Schall	Date: March 1, 2017
Benjamin Schall
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Brian Dickman, certify that:

1. I have reviewed this annual report on Form 10-K of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Brian Dickman	Date: March 1, 2017
Brian Dickman
Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Benjamin Schall, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Benjamin Schall

Benjamin Schall

President and Chief Executive Officer

March 1, 2017

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Brian Dickman, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian Dickman

Brian Dickman

Executive Vice President and Chief Financial Officer

March 1, 2017

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 24, 2017	Jun. 30, 2016
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Trading Symbol	SRG
Entity Registrant Name	SERITAGE GROWTH PROPERTIES
Entity Central Index Key	0001628063
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,526,300,000
Class A Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		27,942,572
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,451,336
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,750,185

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CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Investment in real estate
Land	$ 840,021	$ 840,563
Buildings and improvements	839,663	814,652
Accumulated depreciation	(89,940)	(29,076)
Real Estate Investment Property, at Cost, Total	1,589,744	1,626,139
Construction in progress	55,208	13,136
Net investment in real estate	1,644,952	1,639,275
Investment in unconsolidated joint ventures	425,020	427,052
Cash and cash equivalents	52,026	62,867
Restricted cash	87,616	92,475
Tenant and other receivables, net	23,172	9,772
Lease intangible assets, net	464,399	578,795
Prepaid expenses, deferred expenses and other assets, net	15,052	23,123
Total assets	2,712,237	2,833,359
Liabilities
Mortgage loans payable, net	1,166,871	1,142,422
Accounts payable, accrued expenses and other liabilities	121,055	120,860
Total liabilities	1,287,926	1,263,282
Commitments and contingencies (Note 10)
Shareholders' Equity
Additional paid-in capital	925,563	924,508
Accumulated deficit	(121,338)	(38,145)
Total shareholders' equity	804,557	886,695
Non-controlling interests	619,754	683,382
Total equity	1,424,311	1,570,077
Total liabilities and equity	2,712,237	2,833,359
Class A Common Shares [Member]
Shareholders' Equity
Common shares	258	248
Total equity	258	248
Class B Common Shares [Member]
Shareholders' Equity
Common shares	16	16
Total equity	16	16
Class C Common Shares [Member]
Shareholders' Equity
Common shares	58	68
Total equity	$ 58	$ 68

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CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Class A Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	100,000,000	100,000,000
Common shares, outstanding	25,843,251	24,817,842
Common shares, issued	25,843,251	24,817,842
Class B Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	5,000,000	5,000,000
Common shares, outstanding	1,589,020	1,589,020
Common shares, issued	1,589,020	1,589,020
Class C Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	50,000,000	50,000,000
Common shares, outstanding	5,754,685	6,773,185
Common shares, issued	5,754,685	6,773,185

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CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
REVENUE
Rental income	$ 86,645	$ 186,421
Tenant reimbursements	26,926	62,253
Total revenue	113,571	248,674
EXPENSES
Property operating	6,329	21,510
Real estate taxes	22,355	43,681
Depreciation and amortization	65,907	177,119
General and administrative	9,956	17,469
Litigation charge		19,000
Provision for doubtful accounts		269
Acquisition-related expenses	18,397	73
Total expenses	122,944	279,121
Operating loss	(9,373)	(30,447)
Equity in income of unconsolidated joint ventures	4,772	4,646
Interest and other income	136	266
Interest expense	(30,461)	(63,591)
Unrealized loss on interest rate cap	(2,933)	(1,378)
Loss before income taxes	(37,859)	(90,504)
Provision for income taxes	(944)	(505)
Net loss	(38,803)	(91,009)
Net loss attributable to non-controlling interests	16,465	39,451
Net loss attributable to common shareholders	$ (22,338)	$ (51,558)
Net loss per share attributable to Class A and Class C common shareholders – Basic and diluted	$ (0.71)	$ (1.64)
Weighted average Class A and Class C common shares outstanding - Basic and diluted	31,386	31,416

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CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands	Total	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]	Class A Common Shares [Member]	Class B Common Shares [Member]	Class C Common Shares [Member]
Beginning balance at Jul. 07, 2015	$ 1,635,957	$ 923,636		$ 711,991	$ 246	$ 16	$ 68
Beginning balance, shares at Jul. 07, 2015					24,584,000	1,589,000	6,790,000
Net loss	(38,803)		$ (22,338)	(16,465)
Offering related costs	(126)	(70)		(56)
Dividends and distributions declared	(27,895)		(15,807)	(12,088)
Issuance of restricted shares		(2)			$ 2
Issuance of restricted shares, shares					217,000
Stock-based compensation	944	944
Stock issued in conversion of securities					$ 0
Stock sold in conversion of securities							$ 0
Stock issued in conversion securities, shares					17,450
Stock sold in conversion of securities, shares							(17,000)
Ending balance at Dec. 31, 2015	1,570,077	924,508	(38,145)	683,382	$ 248	$ 16	$ 68
Ending balance, shares at Dec. 31, 2015					24,817,842	1,589,020	6,773,185
Net loss	(91,009)		(51,558)	(39,451)
Dividends and distributions declared	(55,812)		(31,635)	(24,177)
Vesting of restricted share units	(13)	(13)			$ 0
Vesting of restricted share units, shares					7,000
Stock-based compensation	1,068	1,068
Stock issued in conversion of securities					$ 10
Stock sold in conversion of securities							$ (10)
Stock issued in conversion securities, shares					1,018,500
Stock sold in conversion of securities, shares							(1,018,000)
Ending balance at Dec. 31, 2016	$ 1,424,311	$ 925,563	$ (121,338)	$ 619,754	$ 258	$ 16	$ 58
Ending balance, shares at Dec. 31, 2016					25,843,251	1,589,020	5,754,685

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CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares						6 Months Ended	12 Months Ended
	Nov. 02, 2016	Aug. 02, 2016	May 03, 2016	Mar. 08, 2016	Dec. 17, 2015	Dec. 31, 2015	Dec. 31, 2016
Dividends and distributions declared, per share						$ 0.50	$ 1.00
Class A Common Shares [Member]
Dividends and distributions declared, per share	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.50	$ 0.50	$ 1.00
Share class exchanges, common shares						17,450	1,018,500

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CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (38,803)	$ (91,009)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in income of unconsolidated joint ventures	(4,772)	(4,646)
Distributions from unconsolidated joint ventures	6,733	15,677
Unrealized loss on interest rate cap	2,933	1,378
Stock-based compensation	944	1,068
Depreciation and amortization	65,907	177,119
Amortization of deferred financing costs	2,657	5,361
Amortization of above and below market leases, net	(388)	(680)
Straight-line rent adjustment	(8,299)	(12,862)
Change in operating assets and liabilities
Tenants and other receivables	(1,473)	350
Prepaid expenses, deferred expenses and other assets	(25,596)	6,080
Restricted cash	(3,761)	(17,554)
Accounts payable, accrued expenses and other liabilities	21,589	12,143
Net cash provided by operating activities	17,671	92,425
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of real estate and unconsolidated joint ventures	(2,653,019)
Investments in unconsolidated joint ventures		(9,000)
Development of real estate	(11,273)	(66,193)
Decrease (increase) in restricted cash	(66,107)	22,413
Net cash used in investing activities	(2,730,399)	(52,780)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of mortgage loans payable, net	1,161,196
Proceeds from Future Funding Facility		20,002
Payment of deferred financing costs	(21,431)	(914)
Proceeds from issuance of common stock and non-controlling interest	1,644,042
Offering related costs	(8,212)
Common dividends paid		(39,354)
Non-controlling interests distributions paid		(30,220)
Net cash (used in) provided by financing activities	2,775,595	(50,486)
Net (decrease) increase in cash and cash equivalents	62,867	(10,841)
Cash and cash equivalents, beginning of period		62,867
Cash and cash equivalents, end of period	62,867	52,026
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	25,325	61,051
Capitalized interest	226	3,077
Income taxes paid	944	505
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	2,856	6,369
Dividends and distribution declared and unpaid	$ 27,894	$ 13,954

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Organization

12 Months Ended

Dec. 31, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

Note 1 – Organization

Seritage Growth Properties was organized in Maryland on June 3, 2015 and initially capitalized with 100 shares of Class A common shares.  The Company conducts its operations through Seritage Growth Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership that was formed on April 22, 2015.  Unless the context otherwise requires, “Seritage” and the “Company” refer to Seritage Growth Properties, the Operating Partnership and its subsidiaries.

On June 11, 2015 Sears Holdings Corporation (“Sears Holdings”) effected a rights offering (the “Rights Offering”) to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Wholly Owned Properties”), and its 50% interests in three joint ventures (such joint ventures, the “JVs,” and such 50% joint venture interests the “JV Interests”) that collectively own 28 properties, ground lease one property and lease two properties (collectively, the “JV Properties”) (collectively, the “Transaction”).  The Rights Offering ended on July 2, 2015 and the Company’s Class A common shares were listed on the New York Stock Exchange (“NYSE”) on July 6, 2015.

On July 7, 2015, the Company completed the Transaction with Sears Holdings (see Note 3) and commenced operations.  The Company did not have any operations prior to the completion of the Rights Offering and Transaction.

Seritage is a fully-integrated, self-administered, self-managed real estate investment trust (“REIT”) primarily engaged in the real property business through the Company’s investment in the Operating Partnership.  Subsidiaries of the Operating Partnership lease a substantial majority of the space at all but 15 of the Wholly Owned Properties back to Sears Holdings under a master lease agreement (“Master Lease”), with the remainder of such space leased to third-party tenants.  A substantial majority of the space at the JV Properties is also leased (or subleased) by the JVs to Sears Holdings under master lease agreements (collectively, the “JV Master Leases”).  The Master Lease and the JV Master Leases provide the Company and the JVs with the right to recapture certain space from Sears Holdings at each property for retenanting or redevelopment purposes.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.  The Company holds a 56.7% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  Through consideration of new consolidation guidance effective for the Company as of January 1, 2016, it has been concluded that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  However, as the Company holds what is deemed a majority voting interest in the Operating Partnership, it qualifies for the exemption from providing certain of the disclosure requirements associated with investments in VIEs.

The portions of consolidated entities not owned by the Company and the Operating Partnership are presented as non-controlling interests as of and during the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to fair values of acquired assets and liabilities assumed for purposes of applying the acquisition method of accounting, the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivables.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

The Company currently operates in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management and leasing of retail properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operational process.

Accounting for Real Estate Acquisitions

Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments.  In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located.

The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use.  The "if vacant" value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties.  Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.

The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheet and amortized over the remaining lease term for each tenant.

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheet; below-market tenant leases and above-market ground leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet.  The values assigned to above-market and below-market tenant leases are amortized as reductions and increases, respectively, to base rental revenue over the remaining term of the respective leases.  The values assigned to below-market and above-market ground leases are amortized as increases and reductions, respectively, to property operating expenses over the remaining term of the respective leases.

The Company expenses transaction costs associated with business combinations in the period incurred.  These costs are included in acquisition-related expenses within the consolidated statements of operations.

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.  As of December 31, 2016, the Company had approximately $87.6 million of restricted cash, consisting of $65.5 million reserved for redevelopment costs, tenant allowances and leasing commissions, deferred maintenance, environmental remediation and other capital expenditures, $19.2 million related to basic property carrying costs such as real estate taxes, insurance and ground rent; and $2.9 million of other restricted cash which consists primarily of prepaid rental income.

As of December 31, 2015, the Company had approximately $92.5 million of restricted cash, including $51.3 million reserved for redevelopment costs, deferred maintenance, environmental remediation and other capital expenditures; $38.5 million related to basic property carrying costs such as real estate taxes, insurance and ground rent and $2.7 million of other restricted cash which consists primarily of prepaid rental income.

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located.  In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific rent receivable will be made.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.

Revenue Recognition

Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheet.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.

Tenant reimbursement income arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the related expenses are incurred.

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Seritage 50% Recapture Rights.  The Company generally treats the delivery of a 50% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the Master Lease.

• The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Sears Holdings Termination Rights.  The Master Lease provides Sears Holdings with certain rights to terminate the Master Lease with respect to properties that cease to be profitable for operation by Sears Holdings.  Such a termination would generally result in the following accounting adjustments for the terminated property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

• Termination fees required to be paid by Sears Holdings are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of termination.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company has elected not to utilize hedge accounting and therefore the change in fair value is included within change in fair value of interest rate cap on the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  As of December 31, 2016, the interest rate cap had a fair value of approximately $0.7 million as compared to $2.1 million at December 31, 2015.

Stock-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of December 31, 2016, substantially all of the Company's real estate properties were leased to Sears Holdings and the majority of Company’s rental revenues were derived from the Master Lease (see Note 6).  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Sears Holdings’ business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  Sears Holdings is a publicly traded company that is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K and Form 10-Q with the SEC.  Refer to www.sec.gov for Sears Holdings Corporation publicly-available financial information.

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of December 31, 2016, the Company's portfolio of 235 Wholly Owned Properties was diversified by location across 49 states and Puerto Rico.

Earnings (Loss) per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  Class B non-economic common shares are excluded from earnings (loss) per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

In January 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01 which changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets.  While there are various differences between the accounting for an asset acquisition and a business combination, the Company expects that the largest impact will be the capitalization of transaction costs for asset acquisitions which are expensed for business combinations.  ASU 2007-01 is effective, on a prospective basis, for interim and annual periods beginning after January 1, 2019; early adoption is permitted.  The Company has chosen to early adopt ASU 2017-01 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows - Restricted Cash." ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or cash equivalents.  Therefore, amounts generally described as restricted cash and equivalents should be included with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows.  Currently, there is no specific guidance to address how to classify or present these changes. ASU 2016-18 is effective, on a retroactive basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 provides classification guidance for eight specific topics including debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. ASU 2016-18 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

On February 25, 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases.  ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018.  ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases.  Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability.  For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases, the lessee would recognize a straight-line total lease expense.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

In September 2015, the FASB issued ASU 2015-16, which amends Topic 805, Business Combinations, and requires the recognition of purchase price allocation adjustments that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, and eliminates the requirement to retrospectively account for these adjustments.  ASU 2015-16 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2015; early adoption is permitted.  The Company has chosen to early adopt ASU 2015-16 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  The recognition and measurement guidance for debt issuance costs are not affected.  ASU 2015-03 is effective for annual periods beginning after December 31, 2015.  Early adoption is permitted.  The Company elected to early adopt ASU 2015-03 during the current period for the costs related to the Mortgage Loans issued in connection with the Transaction.  As the Company has not previously reported debt issuance costs and mortgage loans payable within the consolidated financial statements, retrospective application is not required.  As such, debt issuance costs, net of accumulated amortization, are netted against mortgage loans payable on the consolidated balance sheet.

In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015.  Although the Company has not yet finalized its evaluation of this new accounting standard, aside from certain expanded disclosure requirements, it is not expected that the adoption of this standard will have a material impact on the consolidated financial statements.

In May 2014, with subsequent updates issued in August 2015 and March, April, May and December 2016, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment.  In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year.  Accordingly, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016.  The standard can be applied either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment recognized as of the date of initial application. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this guidance. While the Company anticipates additional disclosure, it does not expect the adoption of this pronouncement will have a material effect on its consolidated financial statements; however, it will continue to evaluate this assessment until the guidance becomes effective.

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Acquisitions

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Acquisitions

Note 3 – Acquisitions

On July 7, 2015, the Company purchased the Wholly Owned Properties and JV Interests at their fair value for $2.7 billion, with the substantial majority of such properties being leased back to Sears Holdings.

The following table summarizes the purchase price and fair values of the net assets acquired in the Transaction (in thousands):

Proceeds from issuance of common stock and    non-controlling interest			$	1,644,042
Less: Offering related costs				(8,212	)
Proceeds from issuance of mortgage loans payable				1,161,196
Less: Deferred financing costs				(21,446	)
Total sources of funds net of offering and financing costs				2,775,580
Real estate assets acquired
Land	840,563
Buildings and improvements	810,499
Lease intangibles
In-place leases	595,443
Below-market ground lease	11,766
Above-market leases	9,058
Below-market leases	(20,045	)
Investments in unconsolidated joint ventures	429,012
Total fair value of real estate assets acquired				2,676,296
Plus: Restricted cash
Environmental expenses reserve	12,034
Deferred maintenance reserve	10,575
Total restricted cash				22,609
Less: Assumed liabilities
Real estate taxes payable	(23,277	)
Environmental expenses	(12,034	)
Deferred maintenance	(10,575	)
Total assumed liabilities				(45,886	)
Net cash paid for acquisition of real estate and unconsolidated    joint ventures				2,653,019
Additional (sources) / uses of cash
Prepaid rent	(26,855	)
Initial funding of unfunded construction commitments    reserve (restricted cash)	42,470
Initial funding of property carry costs reserve    (restricted cash)	32,482
Initial funding of interest expense reserve (restricted cash)	4,924
Acquisition related expenses	18,340
Prepaid interest expense	1,249
Total additional (sources) uses of cash, net				72,610
Remaining excess cash from transaction			$	49,951

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Lease Intangible Assets and Liabilities

12 Months Ended

Dec. 31, 2016

Real Estate [Abstract]

Lease Intangible Assets and Liabilities

Note 4 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $464.4 million and $16.8 million as of December 31, 2016, respectively.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): 

December 31, 2016
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	592,871	$	(146,964	)	$	445,907
Below-market ground leases, net		11,766		(305	)		11,461
Above-market leases, net		8,964		(1,933	)		7,031
Total	$	613,601	$	(149,202	)	$	464,399

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	20,011	$	(3,184	)	$	16,827
Total	$	20,011	$	(3,184	)	$	16,827

December 31, 2015								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Assets	Asset		Amortization			Balance		Period
In-place leases, net	$	595,443	$	(36,800	)	$	558,643		8.4	years
Below-market ground leases, net		11,766		(102	)		11,664		57.5	years
Above-market leases, net		9,058		(570	)		8,488		8.8	years
Total	$	616,267	$	(37,472	)	$	578,795		9.4	years

								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Liabilities	Liability		Amortization			Balance		Period
Below-market leases, net	$	20,045	$	(1,059	)	$	18,986		11.4	years
Total	$	20,045	$	(1,059	)	$	18,986		11.4	years

Amortization of acquired below-market leases, net of acquired above-market leases resulted in additional rental income of $0.9 million for the year ended December 31, 2016 and $0.5 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	(970	)
2018		(970	)
2019		(943	)
2020		(808	)
2021		(792	)

Amortization of acquired below-market ground leases resulted in additional rent expense of $0.2 million for the year ended December 31, 2016 and $0.1 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired below-market ground leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	203
2018		203
2019		203
2020		203
2021		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $110.2 million for the year ended December 31, 2016 and $36.8 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  Estimated annual amortization of acquired in-place leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	102,380
2018		61,988
2019		59,823
2020		58,088
2021		52,248

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Investments in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2016

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Note 5 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures for which the Company holds less than a controlling interest.  The Company’s partners in these unconsolidated joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures.  The obligations to make capital contributions are governed by each unconsolidated joint venture’s respective operating agreement and related governing documents.

The Company currently has investments in three unconsolidated entities: GS Portfolio Holdings LLC (the “GGP JV”), a joint venture between Seritage and a subsidiary of GGP Inc. (together with its subsidiaries, “GGP”), SPS Portfolio Holdings LLC (the “Simon JV”), a joint venture between Seritage and a subsidiary of Simon Property Group, Inc. (together with its subsidiaries, “Simon”), and MS Portfolio LLC (the “Macerich JV”), a joint venture between Seritage and a subsidiary of The Macerich Company (together with its subsidiaries, “Macerich”).  A substantial majority of the space at the JV Properties is leased to Sears Holdings under the JV Master Leases which include recapture rights and termination rights with similar terms as those described under the Master Lease.

As of December 31, 2016, the GGP JV had submitted recapture notices related to Pembroke Lakes Mall in Pembroke Pines, FL, Valley Plaza Mall in Bakersfield, CA, Staten Island Mall in Staten Island, NY and Coronado Mall in Albuquerque, NM.  In addition, the GGP JV announced plans to recapture space at five additional locations according to a specific schedule, including Oakbrook Center in Oak Brook, IL, The Mall at Columbia in Columbia, MD, Natick Collection in Natick, MA, Paramus Park in Paramus, NJ and Alderwood in Lynnwood, WA.  The GGP JV will recapture 100% of the space currently occupied by Sears Holdings at Alderwood and Paramus Park, while Sears Holdings will continue to occupy a downsized space at the other locations.

No recaptures notices have been submitted related to properties in the Macerich JV or the Simon JV as of December 31, 2016.

The Company’s investments in unconsolidated joint ventures at December 31, 2016, consisted of (in thousands):

	# of		Total		Initial		Seritage %
Joint Venture	Properties		GLA		Investment		Ownership
GGP JV		12		2,167	$	165,000		50	%
Macerich JV		9		1,573		150,000		50	%
Simon JV		10		1,714		114,012		50	%
Total		31		5,454	$	429,012

Each unconsolidated joint venture is obligated to prepare financial statements in accordance with GAAP.  The Company generally shares in the profits and losses of these unconsolidated joint ventures 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 joint venture that differ from the Company’s equity interest in the unconsolidated joint venture.  This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated joint venture recognizes with respect to its assets; differences between the Company’s basis in assets it has transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets; the Company’s deferral of the unconsolidated joint venture’s profits from land sales to the Company; or other items.  There were no joint venture impairment charges during the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

The following table presents combined condensed financial data for all of the Company’s unconsolidated joint ventures as of December 31, 2016 and December 31, 2015, and for the year ended December 31, 2016 and the period from July 7, 2015 (Date operations Commenced) to December 31, 2015:

	December 31 2016			December 31, 2015
ASSETS
Investment in real estate
Land	$	214,109		$	214,726
Buildings and improvements		598,978			603,265
Accumulated depreciation		(56,324	)		(24,111	)
		756,763			793,880
Construction in progress		48,885			1,481
Net investment in real estate		805,648			795,361
Cash and cash equivalents		3,434			19,903
Tenant and other receivables, net		6,133			4,990
Other assets, net		38,646			30,506
Total assets	$	853,861		$	850,760
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Accounts payable, accrued expenses and other liabilities	$	14,177		$	13,973
Total liabilities		14,177			13,973
Members Interest
Additional paid in capital		830,389			823,923
Retained earnings		9,295			12,864
Total members interest		839,684			836,787
Total liabilities and members interest	$	853,861		$	850,760

				July 7, 2015
	Year Ended			(dateoperations commenced) to
	December 31, 2016			December 31, 2015
EQUITY IN INCOME OF UNCONSOLIDATED    JOINT VENTURES
Total revenue	$	66,417		$	35,150
Property operating expenses		(12,787	)		(7,339	)
Depreciation and amortization		(42,233	)		(17,975	)
Operating income		11,397			9,836
Other expenses		(2,105	)		(292	)
Net income	$	9,292		$	9,544
Equity in income of unconsolidated joint ventures	$	4,646		$	4,772

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Leases

12 Months Ended

Dec. 31, 2016

Leases [Abstract]

Leases

Note 6 – Leases

Master Lease

On July 7, 2015, subsidiaries of Seritage and subsidiaries of Sears Holdings entered into the Master Lease.  The Master Lease generally is a triple net lease with respect to all space which is leased thereunder to Sears Holdings, subject to proportional sharing by Sears Holdings for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by Sears Holdings and other space occupied by unrelated third-party tenants in the same or other buildings pursuant to third-party leases, space which is recaptured pursuant to the Company recapture rights described below and all other space which is constructed on the properties.  Under the Master Lease, Sears Holdings and/or one or more of its subsidiaries will be required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they lease the space.

The Master Lease has an initial term of 10 years and contains three options for five-year renewals of the term and a final option for a four-year renewal.  As of December 31, 2016 and December 31, 2015, the annual base rent paid directly by Sears Holdings and its subsidiaries under the Master Lease was approximately $134.0 million.  In each of the initial and first two renewal terms, annual base rent will be increased by 2.0% per annum for each lease year over the rent for the immediately preceding lease year.  For subsequent renewal terms, rent will be set at the commencement of the renewal term at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year.

Revenues from the Master Lease for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 are as follows (in thousands and excluding the effect of straight-line rent):

			July 7, 2015
			(Date Operations
	Year Ended		Commenced) to
	December 31, 2016		December 31, 2015
Rental income	$	133,237	$	64,838
Tenant reimbursements		55,823		25,204
Total revenue	$	189,060	$	90,042

The Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by Sears Holdings at the 224 Wholly Owned Properties initially included in the Master Lease (subject to certain exceptions).  While the Company will be permitted to exercise its recapture rights all at once or in stages as to any particular property, it will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.  In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of the parking areas and common areas.  Upon exercise of these recapture rights, the Company will generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears Holdings space and can reconfigure and rent the recaptured space to third-party tenants.

The Company also has the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings, after which the Company can reposition and re-lease those stores.  The lease termination payment is calculated as the greater of an amount specified at the time the Company entered into the Master Lease with Sears Holdings and an amount equal to 10 times the adjusted EBITDA attributable to such space within the Sears Holdings main store which is not attributable to the space subject to the separate 50% recapture right discussed above for the 12-month period ending at the end of the fiscal quarter ending immediately prior to recapturing such space.

As of December 31, 2016, the Company had exercised certain recapture rights with respect to 27 properties as follows:

Property	Recapture Type		Notice Date
Braintree, MA		100%	November 2015
Honolulu, HI		100%	December 2015
Memphis, TN		100%	December 2015
San Antonio, TX	Auto center		March 2016
Bowie, MD	Auto center		May 2016
Hagerstown, MD	Auto center		May 2016
Albany, NY	Auto center		May 2016
Fairfax, VA	Partial + autocenter		May 2016
Wayne, NJ	Partial		May 2016
Ft. Wayne, IN	Out parcel		July 2016
Orlando, FL		100%	July 2016
Anderson, SC	Partial		July 2016
West Jordan, UT	Partial		July 2016
Madison, WI	Partial + auto center		July 2016
North Hollywood, CA	Partial		July 2016
Warwick, RI	Auto center		October 2016
Rehoboth Beach, DE	Partial		October 2016
Charleston, SC	Partial		October 2016
West Hartford, CT		100%	October 2016
St. Petersburg, FL		100%	October 2016
Roseville, MI	Partial		November 2016
Troy, MI	Partial		November 2016
Santa Monica, CA		100%	December 2016
Santa Cruz, CA	Partial		December 2016
Guaynabo, PR	Partial		December 2016
Saugus, MA	Partial		December 2016
Carson, CA	Partial		December 2016

The Master Lease also provides for certain rights to Sears Holdings to terminate the Master Lease with respect to Wholly Owned Properties that cease to be profitable for operation by Sears Holdings.  In order to terminate the Master Lease with respect to a certain property, Sears Holdings must make a payment to the Company of an amount equal to one year of rent (together with taxes and other expenses) with respect to such property.  Sears Holdings must provide notice of not less than 90 days of their intent to exercise such termination right and such termination right will be limited so that it will not have the effect of reducing the fixed rent under the Master Lease by more than 20% per annum.

During the year ended December 31, 2016, Sears Holdings provided notice that it intended to exercise its right to terminate the Master Lease with respect to 17 stores totaling 1.7 million square feet of gross leasable area.  The aggregate annual base rent at these stores was approximately $6.0 million. Sears Holdings continued to pay Seritage rent until it vacated the stores in January 2017 and also paid Seritage a termination fee of approximately $10.0 million, an amount equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expenses.

The 17 properties are as follows:

Property	Square Feet
Cullman, AL		98,500
Sierra Vista, AZ		86,100
Thornton, CO		190,200
Chicago, IL		118,800
Springfield, IL		84,200
Elkhart, IN		86,500
Merrillville, IN		108,300
Houma, LA		96,700
New Iberia, LA		91,700
Alpena, MI		118,200
Manistee, MI		87,800
Sault Sainte Marie, MI		92,700
Kearney, NE		86,500
Deming, NM		96,600
Harlingen, TX		91,700
Yakima, WA		97,300
Riverton, WY		94,800
Total square feet		1,726,600

Subsequent to December 31, 2016, Sears Holdings provided notice that it intended to exercise its right to terminate the Master Lease with respect to 19 additional stores totaling 1.9 million square feet of gross leasable area.  The aggregate annual base rent at these stores is approximately $5.9 million.  Sears Holdings will continue to pay Seritage rent until it vacates the stores which is expected to occur in April 2017, and also will pay Seritage a termination fee equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expenses.

The 19 properties are as follows:

Property	Square Feet
El Paso, TX		103,657
Paducah, KY		108,244
Henderson, NV		122,823
Jefferson City, MO		92,016
Riverside, CA		94,500
Kissimmee, FL		112,505
Mount Pleasant, PA		83,536
Chapel Hill, OH		187,179
Concord, NC		137,499
Sioux Falls, SD		72,511
Platteville, WI		94,841
Muskogee, OK		87,500
Elkins, WV		94,885
Layton, UT		90,010
Detroit Lakes, MN		79,102
Hopkinsville, KY		70,326
Owensboro, KY		68,334
Leavenworth, KS		76,853
Kenton, OH		96,066
Total square feet		1,872,387

Lessor

The Company generally leases space to tenants under non-cancelable operating leases.  The leases typically provide for the payment of fixed base rents, as well as reimbursements of real estate taxes, insurance, maintenance and other costs.  Certain leases also provide for the payment by the lessee of additional rents based on a percentage of their sales.

As of December 31, 2016, future base rental revenue under non-cancelable operating leases, excluding extension options and signed leases for which rental payments have not yet commenced, is as follows (in thousands):

2017		164,242
2018		163,598
2019		163,537
2020		162,174
2021		163,442
Thereafter		622,419
	$	1,439,412

These future minimum amounts do not include tenant reimbursement income or additional rents based on a percentage of tenants’ sales.  For the year ended December 31, 2016, the Company recognized $62.5 million of tenant reimbursement income, as well as approximately $0.1 million of additional rent based on a percentage of tenants’ sales which was included in rental income.  For the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the Company recognized $26.9 million of tenant reimbursement income, as well as approximately $0.1 million of additional rent based on a percentage of tenants’ sales which was included in rental income.

As Lessee

In connection with the Transaction, the Company acquired a ground lease for one property.  During the year ended December 31, 2016, the Company recorded rent expense of approximately $0.2 million, which is classified within property operating expenses on the consolidated statements of operations.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the Company recorded rent expense of less than $0.1 million.  The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all options are exercised.

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Mortgage Loans Payable

12 Months Ended

Dec. 31, 2016

Mortgage Loans On Real Estate [Abstract]

Mortgage Loans Payable

Note 7 – Mortgage Loans Payable

On July 7, 2015, pursuant to the Transaction, the Company entered into a mortgage loan agreement (the “Mortgage Loan Agreement”) and mezzanine loan agreement (collectively, the “Loan Agreements”), providing for term loans in an initial principal amount of approximately $1,161 million (collectively, the “Mortgage Loans”) and a $100 million future funding facility (the “Future Funding Facility”), which the Company expects to be available to finance the redevelopment of properties in its portfolio from time to time, subject to satisfaction of certain conditions.  As of December 31, 2016, the total principal amounts outstanding under the Mortgage Loans and the Future Funding Facility were $1,161 million and $20 million, respectively, and $80 million remained available under the Future Funding Facility for future draws by the Company.

Interest under the Mortgage Loans is due and payable on the payment dates, and all outstanding principal amounts are due when the loan matures on the payment date in July 2019, pursuant to the Loan Agreements.  The Company has two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions.  Borrowings under the Mortgage Loans bear interest at the London Interbank Offered Rates (“LIBOR”) plus, as of December 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis.  The weighted-average interest rate for the Mortgage Loans and Future Funding Facility for the year ended December 31, 2016 was 5.24%.  For the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the weighted-average interest rate for the Mortgage Loans was 4.96%.

The Loan Agreements contain a yield maintenance provision for the early extinguishment of the debt before March 9, 2018.  

The Mortgage Loans and Future Funding Facility are secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs.  The Loan Agreements contain customary covenants for a real estate financing, including restrictions that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects.  Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds.

In November 2016, the Company and the servicer for our Mortgage Loans entered into amendments to our Loan Agreements to resolve a disagreement regarding one of the cash flow sweep provisions in our Loan Agreements.  The principal terms of these amendments are that the Company has (i) posted $30.0 million, and will post $3.3 million on a monthly basis, to a redevelopment project reserve account, which amounts may be used by the Company to fund redevelopment activity and (ii) extended the spread maintenance provision for prepayment of the loan by two months through March 9, 2018 (with the spread maintenance premium for the second month at a reduced amount).

The Company believes it is currently in compliance with all material terms and conditions of the Loan Agreements.

All obligations under the Loan Agreements are non-recourse to the borrowers and the pledgors of the JV Interests and the guarantors thereunder, except that (i) the borrowers and the guarantors will be liable, on a joint and several basis, for losses incurred by the lenders in respect of certain matters customary for commercial real estate loans, including misappropriation of funds and certain environmental liabilities and (ii) the indebtedness under the Loan Agreements will be fully recourse to the borrowers and guarantors upon the occurrence of certain events customary for commercial real estate loans, including without limitation prohibited transfers, prohibited voluntary liens, and bankruptcy.  Additionally the guarantors delivered a limited completion guaranty with respect to future redevelopments undertaken by the borrowers at the properties, and the Company must maintain (i) a net worth of not less than $1 billion and (ii) a minimum liquidity of not less than $50.0 million, throughout the term of the Loan Agreements.

The Company has incurred $22.3 million of debt issuance and other costs related to the Mortgage Loans and Future Funding Facility, including $0.9 million during the year ended December 31, 2016 and $21.4 million during the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, which are recorded as a direct deduction from the carrying amount of the Mortgage Loans and Future Funding Facility and amortized over the term of the Loan Agreements.  As of December 31, 2016, the unamortized balance of the Company’s debt issuance costs was $14.3 million as compared to $18.8 million as December 31, 2015.

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Note 8 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for federal income tax purposes and expects to continue to operate to qualify as a REIT.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to currently distribute at least 90% of its adjusted REIT taxable income to its shareholders.

As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to its shareholders.  If the Company fails to qualify as a REIT or does not distribute 100% of its taxable income in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state, local and Puerto Rico taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income.

The Company evaluated whether any uncertain tax provisions exist as of December 31, 2016 and December 31, 2015 and concluded that there are no uncertain tax positions.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 9 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value.  The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).  ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.  In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in its assessment of fair value.

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

All derivative instruments are carried at fair value and are valued using Level 2 inputs.  The Company’s derivative instruments as of December 31, 2016 and December 31, 2015 included an interest rate cap.  The Company utilizes an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The fair value of the Company’s interest rate cap at December 31, 2016 and December 31, 2015 was approximately $0.7 million and $2.1 million, respectively, and is included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company has elected not to utilize hedge accounting and therefore the change in fair value is included within change in fair value of interest rate cap in the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the consolidated balance sheet include cash equivalents and mortgage loans payable.  The fair value of cash equivalents is classified as Level 1 and the fair value of mortgage loans payable is classified as Level 2.

Cash equivalents are carried at cost, which approximates fair value.  The fair value of mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings.  As of December 31, 2016 and December 31, 2015, the estimated fair value of the Company’s debt was $1.2 billion which approximated the carrying value at such date as the current risk-adjusted rate approximates the stated rates on the Company’s mortgages.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10 – Commitments and Contingencies

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties.  The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2020.

Insurance premiums are charged directly to each of the retail properties.  The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material.  The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.  However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.  The Company does not believe that any resulting liability from such matters will have a material effect on the consolidated financial position, results of operations or liquidity of the Company.  Under the Master Lease, Sears Holdings has indemnified the Company from certain environmental liabilities at the Wholly Owned Properties existing before, or caused by Sears Holdings during, the period in which each Wholly Owned Property is leased to Sears Holdings, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities (and each JV Master Lease includes a similar requirement of Sears Holdings).  As of December 31, 2016 and December 31, 2015, the Company had approximately $11.8 million and $12.0 million, respectively, of restricted cash in a lender reserve account to fund potential environmental costs that were identified during due diligence related to the Transaction.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, the Company discloses the nature of the contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business.  While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

In May and June of 2015, four purported Sears Holdings shareholders filed lawsuits in the Delaware Court of Chancery challenging the Transaction, which lawsuits have since been consolidated into a single action captioned In re Sears Holdings Corporation Stockholder and Derivative Litigation, Consol. C.A. No. 11081-VCL (the “Action”).  On October 15, 2015, plaintiffs filed a verified consolidated stockholder derivative complaint in the Action against the individual members of Sears Holdings’ Board of Directors, ESL Investments, Inc. (together with its affiliates, “ESL”), Sears Holdings’ CEO, Fairholme Capital Management L.L.C. (“FCM”), and Seritage.  On July 12, 2016, the plaintiffs filed a verified consolidated amended stockholder derivative complaint (the “Amended Complaint”) against the same defendants and asserting substantially the same claims as set forth in the complaint filed in October 2015.  The plaintiffs have brought the Action derivatively on behalf of Sears Holdings, which is named as a nominal defendant, and allege that the Sears Holdings directors, as well as ESL and Edward S. Lampert (in their capacity as the alleged controlling stockholder of Sears Holdings), breached their fiduciary duties to Sears Holdings shareholders by selling the Wholly Owned Properties to Seritage at a price that was unfairly low and was the result of a process that allegedly was flawed.  The Amended Complaint also alleges that Seritage and FCM aided and abetted these alleged fiduciary breaches.  Among other forms of relief, the Amended Complaint seeks damages in unspecified amounts.  In October 2016, following mediation, the parties reached an agreement-in-principle to settle the Action, which ultimately was reflected in a definitive Stipulation and Agreement of Settlement, Compromise and Release executed on February 8, 2017.  Pursuant to the settlement, (a) the defendants and the D&O insurers for the individual members of the Sears Holdings’ Board of Directors have agreed to pay (assuming satisfaction of all conditions) $40 million, of which Seritage has agreed to pay $19 million; and (b) all defendants will receive customary releases.  The Delaware Court of Chancery has scheduled a hearing on May 9, 2017, at which it will determine whether to approve the settlement, after customary notice to Sears Holding stockholders and an opportunity for them to object.  The defendants continue to deny the claims asserted and have entered into the settlement solely to avoid the burden, expense, distraction, and inherent risk in and of litigation.  While there can be no assurance that the settlement agreement will result in a definitive, court-approved agreement, the Company determined that its liability is both probable and estimable and recorded a litigation charge of $19.0 million during the year ended December 31, 2016.  The Company believes that the plaintiffs’ claims and allegations against the Company are legally without merit and, if the settlement is not approved, intends to contest the Action.

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Related Party Disclosure

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Related Party Disclosure

Note 11 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is Chairman and Chief Executive Officer of Sears Holdings and is the Chairman and Chief Executive Officer of ESL.  ESL beneficially owned approximately 53.2% and 49.6% of Sears Holdings’ outstanding common stock at December 31, 2016 and December 31, 2015, respectively.  Mr. Lampert is also the Chairman of Seritage.

As of December 31, 2016, ESL held an approximately 43.3% interest in Operating Partnership and approximately 3.7% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.  As of December 31, 2015, ESL held an approximately 43.4% interest in Operating Partnership and approximately 3.9% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively

Unsecured Term Loan

On February 23, 2017 (the “Closing Date”), the Operating Partnership, as borrower, and the Company, as guarantor, entered into a $200.0 million senior unsecured delayed draw term loan facility (the “Unsecured Term Loan”) with JPP, LLC (“JPP”) and JPP II, LLC, as lenders (collectively, the “Initial Lenders”), and JPP, as administrative agent (the “Administrative Agent”).

Loans under the Unsecured Term Loan (which was undrawn on the Closing Date) may be requested by the Operating Partnership at any time from the Closing Date until thirty days prior to the stated maturity date, upon five business days prior notice to the Administrative Agent.  The total commitments of the lenders under the Unsecured Term Loan is $200.0 million, provided, that, the maximum draw amount under the Unsecured Term Loan through April 30, 2017 is $100.0 million, which amount increases to $150.0 million on May 1, 2017 and $200.0 million on September 1, 2017, in each instance so long as no cash flow sweep period is then in effect and continuing as of such date under the Company’s Mortgage Loan Agreement.  Amounts drawn under the Unsecured Term Loan and repaid may not be redrawn.  

The Unsecured Term Loan will mature the earlier of (i) December 31, 2017 and (ii) the date on which the outstanding indebtedness under the Loan Agreements are repaid or refinanced in full.  The Unsecured Term Loan may be prepaid at any time in whole or in part, without any penalty or premium.    

The principal amount of loans outstanding under the Unsecured Term Loan will bear a base annual interest rate of 6.50%.  If a cash flow sweep period were to occur and be continuing under the Company’s Mortgage Loan Agreement (i) the interest rate on any outstanding advances would increase from and after such date by 1.5% per annum above the base interest rate and (ii) the interest rate on any advances made after such date would increase by 3.5% per annum above the base interest rate.  Accrued and unpaid interest will be payable in cash, except that during the continuance of a cash flow sweep period under the existing mortgage loan agreement, the Operating Partnership may defer the payment of interest which deferred amount would be added to the outstanding  principal balance of the loans.

On the Closing Date, the Operating Partnership paid to the Initial Lenders an upfront commitment fee equal to $1.0 million.  The Operating Partnership will also be required to pay an additional commitment fee of $1.0 million on the date that is ninety days after the Closing Date unless prior thereto (i) at least 33.3% of the principal amount of the Facility has been syndicated to lenders who are not affiliates of the Initial Lenders or (ii) the Unsecured Term Loan has been paid in full and the commitments have been terminated.  

The Unsecured Term Loan documentation requires that the Company at all times maintain (i) a net worth of not less than $1.0 billion, and (ii) a leverage ratio not to exceed 60.0%.

The Unsecured Term Loan includes customary representations and warranties, covenants and indemnities.  The Unsecured Term Loan also has customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, and bankruptcy or insolvency proceedings.  If there is an event of default, the Lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Unsecured Term Loan documents, and require the Operating Partnership to pay a default interest rate on overdue amounts equal to 1.50% in excess of the applicable base interest rate.

Mr. Edward S. Lampert, the Company’s Chairman, is the Chairman and Chief Executive Officer of ESL, which controls JPP, LLC and JPP II, LLC.  The terms of the Unsecured Term Loan were approved by the Company’s Audit Committee and the Company’s Board of Trustees (with Mr. Edward S. Lampert recusing himself).

Transition Services Agreement

On July 7, 2015, the Operating Partnership and Sears Holdings Management Corporation (“SHMC”), a wholly owned subsidiary of Sears Holdings, entered into a transition services agreement (the “Transition Services Agreement”, or “TSA”).  Pursuant to the TSA, SHMC was to provide certain limited services to the Operating Partnership during the period from the closing of the Transaction through the 18-month anniversary of the closing.  On January 7, 2017, the TSA expired by its terms.

During the year ended December 31, 2016, the services provided by SHMC were limited to specific accounting and tax services, substantially all of which were in support of the Company’s 2015 year-end activities.  Fees incurred for these services were approximately $0.1 million and are included in general and administrative expenses in the consolidated statements of operations.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the services provided by SHMC included select facilities management, accounting, treasury, tax and related support services.  Fees incurred for these services were approximately $0.2 million and are included in general and administrative expenses in the consolidated statements of operations.

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Non-Controlling Interests

12 Months Ended

Dec. 31, 2016

Noncontrolling Interest [Abstract]

Non-Controlling Interests

Note 12 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”).  Pursuant to the Partnership Agreement, as the sole general partner of Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions and control of Operating Partnership, and may not be removed as general partner by the limited partners.  As of December 31, 2016, the Company held a 56.7% interest in the Operating Partnership and ESL held a 43.3% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the period presented.

Subsequent to December 31, 2016, 2,094,821 Operating Partnership units were converted to Class A shares resulting in the Company holding a 60.4% interest in the Operating Partnership and ESL holding a 39.6% interest.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Shareholders' Equity

Note 13 – Shareholders’ Equity

Class A Common Shares

On July 7, 2015, the Company issued 22,332,037 Class A common shares at a price of $29.58 per share, for aggregate proceeds of $660.6 million, pursuant to the Rights Offering.  The Company incurred costs of approximately $8.2 million related to the Rights Offering.  In addition, the Company issued and sold to subsidiaries of each of GGP and Simon 1,125,760 Class A common shares at a price of $29.58 per share, or an aggregate purchase price of $33.3 million, in transactions exempt from registration under the Securities Act. The subsidiary of GGP liquidated its position during the year ended December 31, 2016.

Subsequent to December 31, 2016, 2,094,821 Operating Partnership units were converted to Class A shares.

Class A shares have a par value of $0.01 per share.

Class B Non-Economic Common Shares

On July 7, 2015, the Company issued and sold to ESL 1,589,020 Class B non-economic common shares of beneficial interest in connection with an exchange of cash and subscription rights for Class B non-economic common shares in a transaction exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof.  The aggregate purchase price for the Class B non-economic common shares purchased by ESL was $0.9 million.  The Class B non-economic common shares have voting rights, but do not have economic rights and, as such, do not receive dividends and are not included in earnings per share computations.

Subsequent to December 31, 2016, 137,684 Class B shares were surrendered to the Company.

Class B non-economic common shares have a par value of $0.01 per share.

Class C Non-Voting Common Shares

On July 7, 2015, the Company issued 6,790,635 Class C non-voting common shares at a price of $29.58 per share, for aggregate proceeds of $200.9 million, pursuant to the Rights Offering.  The Class C non-voting common shares have economic rights, but do not have voting rights.  Upon any transfer of a Class C non-voting common share to any person other than an affiliate of the holder of such share, such share shall automatically convert into one Class A common share.

During the year ended December 31, 2016, 1,018,500 net shares of Class C non-voting common shares were converted to Class A common shares.  During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, 17,450 net shares of Class C non-voting common shares were converted to Class A common shares.

Class C non-voting shares have a par value of $0.01 per share.

Dividends and Distributions

On November 1, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended December 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2016.  The dividends and distributions payable were recorded as liabilities on the Company's condensed consolidated balance sheet at December 31, 2016.  The dividend has been reflected as a reduction of shareholders' equity and the distribution has been reflected as a reduction of the limited partners' non-controlling interest.  These amounts were paid on January 12, 2017.

On August 2, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended September 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held as of September 30, 2016.  These amounts were paid on October 13, 2016.

On May 3, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended June 30, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on June 30, 2016. These amounts were paid on July 14, 2016.

On March 8, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended March 31, 2016.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on March 31, 2016.  These amounts were paid on April 14, 2016.

On December 17, 2015, the Company declared a cash dividend of $0.50 per Class A and Class C common share for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held on December 31, 2015.  These amounts were paid on January 14, 2016.

The Company declared total dividends of $1.00 per Class A and Class C common share during the year ended December 31, 2016 and $0.50 per Class A and Class C common share during the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The dividends have been reflected as follows for federal income tax purposes:

			July 7, 2015
	Year Ended		(date operations commenced) to
	December 31,		December 31,
	2016		2015
Ordinary income	$	1.00	$	0.50
Return of capital		—		—
Total	$	1.00	$	0.50

On February 28, 2017, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ending March 31, 2017.  The holders of Operating Partnership units are entitled to an equal distribution per Operating Partnership unit held on March 31, 2016.  These amounts will be paid on April 13, 2017.

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Earnings per Share

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings per Share

Note 14 – Earnings per Share

The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders as they do not have economic rights.

(in thousands except per share amounts)				July 7, 2015
				(Date Operations
	Year Ended			Commenced) to
	December 31, 2016			December 31, 2015
Numerator - Basic and Diluted
Net loss	$	(91,009	)	$	(38,803	)
Net loss attributable to non-controlling interests		39,451			16,465
Net loss attributable to common shareholders	$	(51,558	)	$	(22,338	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		25,497			24,707
Weighted average Class C common shares outstanding		5,919			6,679
Weighted average Class A and Class C common    shares outstanding		31,416			31,386
Net loss per share attributable to Class A and Class C    common shareholders	$	(1.64	)	$	(0.71	)

No adjustments were made to the numerator for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, because the Company generated a net loss.  During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

No adjustments were made to the denominator for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share.

As of December 31, 2016 and December 31, 2015, there were 216,348 and 221,484 shares, respectively, of non-vested restricted stock outstanding.

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Stock Based Compensation

12 Months Ended

Dec. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

Note 15 – Stock Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000 shares have been registered with the SEC. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the “Awards”).  Directors, officers, other employees and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares

Pursuant to the Plan, the Company made grants of restricted shares and share units during the year ended December 31, 2016 and the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.  The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted shares and share units vest either immediately or in equal annual amounts over the next three years (time-based vesting) and a portion of the restricted shares vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting).  As of December 31, 2016, the performance criteria have not been met.

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares that do not vest are forfeited.  Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest.  Dividends on restricted shares with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares.

The following table summarizes restricted share activity for the grant periods ended December 31, 2016 and December 31, 2015:

						July 7, 2015 (date operations commenced)
	Year Ended December 31, 2016					to December 31, 2015
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		221,484		$	37.18		—		$	—
Restricted shares granted		23,324			46.48		238,387			30.73
Restricted shares vested		(28,460	)		31.18		(16,903	)		29.58
Restricted shares forfeited		—			—		—			—
Unvested restricted shares at end of period		216,348		$	38.98		221,484		$	37.18

The Company recognized $1.1 million in compensation expense related to the restricted shares during the year ended December 31, 2016 and $0.9 million for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015. Compensation expenses related to the restricted shares are included in general and administrative on the Company's consolidated statements of operations.  As of December 31, 2016, there were $8.2 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.7 years. As of December 31, 2015 there were $6.4 million of total unrecognized compensation costs related to the outstanding restricted shares which is expected to be recognized over a weighted-average period of approximately 2.8 years.

XML

Accounts Payable, Accrued Expenses and Other Liabilities

12 Months Ended

Dec. 31, 2016

Payables And Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Note 16 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities (in thousands):

	December 31, 2016		December 31, 2015
Accounts payable and accrued expenses	$	26,463	$	13,793
Accrued real estate taxes		23,942		25,333
Litigation charge		19,000		—
Below-market leases		16,827		18,986
Dividends payable		14,132		27,894
Environmental reserve		11,584		11,824
Deferred maintenance		4,124		10,281
Accrued interest		3,004		2,748
Prepaid rental income		1,979		1,331
Sears Holdings payable		—		8,670
Total accounts payable, accrued expenses and other    liabilities	$	121,055	$	120,860

XML

Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (unaudited)

Note 17 – Quarterly Financial Information (unaudited)

The following table sets forth the selected quarterly financial data for the Company (in thousands, except per share amounts):

	2016												2015
													July 7 (Date
													Operations
	Quarter Ended			Quarter Ended			Quarter Ended			QuarterEnded			Commenced) to			Quarter Ended
	March 31			June 30			September 30			December 31			September 30			December 31
Total revenue	$	63,004		$	61,867		$	57,607		$	66,196		$	54,063		$	59,508
Operating income (loss)		396			2,765			(22,771	)		(10,837	)		(16,550	)		7,177
Net loss		(14,714	)		(12,565	)		(37,247	)		(26,483	)		(31,853	)		(6,950	)
Net loss attributable to common shareholders		(8,335	)		(7,117	)		(21,102	)		(15,004	)		(18,301	)		(4,037	)
Net loss per share attributable to Class A and    Class C common shareholders - Basic    and diluted		(0.27	)		(0.23	)		(0.67	)		(0.48	)		(0.58	)		(0.13	)
Weighted average Class A and Class C    common shares outstanding - Basic    and diluted		31,391			31,391			31,419			31,418			31,384			31,391

XML

Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2016

Real Estate And Accumulated Depreciation Disclosure [Abstract]

Schedule III - Real Estate and Accumulated Depreciation

SERITAGE GROWTH PROPERTIES

SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2016

(Dollars in thousands)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition						at Close of Period (2)										Life Upon Which
					Buildings and					Buildings and					Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land			Improvements			Land		Improvements		Total		Depreciation			Acquired	is Computed
The Mall at Sears	Anchorage, AK	(3)	$	11,517	$	11,729	$	—		$	819		$	11,517	$	12,548	$	24,065	$	(1,267	)	July, 2015	(4)
Freestanding	Cullman, AL	(3)		947		846		—			—			947		846		1,793		(117	)	July, 2015	(4)
McCain Mall	North Little Rock, AR	(3)		1,288		2,881		—			—			1,288		2,881		4,169		(447	)	July, 2015	(4)
Freestanding	Russellville, AR	(3)		318		1,270		—			—			318		1,270		1,588		(150	)	July, 2015	(4)
Flagstaff Mall	Flagstaff, AZ	(3)		932		2,179		—			—			932		2,179		3,111		(216	)	July, 2015	(4)
Superstition Springs	Mesa, AZ	(3)		2,661		2,559		—			—			2,661		2,559		5,220		(337	)	July, 2015	(4)
Shopping Center	Peoria, AZ	(3)		1,204		509		—			—			1,204		509		1,713		(196	)	July, 2015	(4)
Desert Sky Mall	Phoenix , AZ	(3)		2,605		2,448		—			—			2,605		2,448		5,053		(293	)	July, 2015	(4)
Freestanding	Phoenix , AZ	(3)		568		1,088		—			—			568		1,088		1,656		(215	)	July, 2015	(4)
Prescott Gateway Mall	Prescott, AZ	(3)		1,071		835		—			—			1,071		835		1,906		(183	)	July, 2015	(4)
The Mall at Sierra Vista	Sierra Vista, AZ	(3)		1,252		1,791		—			—			1,252		1,791		3,043		(177	)	July, 2015	(4)
Freestanding	Sierra Vista, AZ	(3)		938		1,736		—			—			938		1,736		2,674		(266	)	July, 2015	(4)
Park Place	Tucson, AZ	(3)		5,207		3,458		—			—			5,207		3,458		8,665		(406	)	July, 2015	(4)
Southgate Mall	Yuma, AZ	(3)		1,485		1,596		—			—			1,485		1,596		3,081		(272	)	July, 2015	(4)
Kmart Center	Antioch, CA	(3)		1,594		2,525		—			—			1,594		2,525		4,119		(245	)	July, 2015	(4)
Big Bear Lake Shopping Center	Big Bear Lake, CA	(3)		3,664		2,945		—			—			3,664		2,945		6,609		(257	)	July, 2015	(4)
Southbay Pavilion	Carson, CA	(3)		11,476		5,223		—			7			11,476		5,230		16,706		(574	)	July, 2015	(4)
Chula Vista Center	Chula Vista, CA	(3)		7,315		6,834		—			—			7,315		6,834		14,149		(586	)	July, 2015	(4)
Sunrise Mall	Citrus Heights, CA	(3)		3,778		2,088		—			—			3,778		2,088		5,866		(707	)	July, 2015	(4)
Freestanding	Delano, CA	(3)		1,905		2,208		—			—			1,905		2,208		4,113		(263	)	July, 2015	(4)
Parkway Plaza	El Cajon, CA	(3)		10,573		2,883		—			—			10,573		2,883		13,456		(647	)	July, 2015	(4)
Imperial Valley Mall	El Centro, CA	(3)		3,877		3,977		—			—			3,877		3,977		7,854		(403	)	July, 2015	(4)
Solano	Fairfield, CA	(3)		3,679		1,366		—			—			3,679		1,366		5,045		(195	)	July, 2015	(4)
Florin Mall	Florin, CA	(3)		1,022		1,366		—			—			1,022		1,366		2,388		(306	)	July, 2015	(4)
Manchester Mall	Fresno, CA	(3)		1,370		2,000		—			—			1,370		2,000		3,370		(577	)	July, 2015	(4)
Mill Creek Marketplace	McKinleyville, CA	(3)		1,354		1,655		—			—			1,354		1,655		3,009		(233	)	July, 2015	(4)
Merced Mall	Merced, CA	(3)		2,534		1,604		—			—			2,534		1,604		4,138		(337	)	July, 2015	(4)
Montclair Plaza	Montclair, CA	(3)		2,498		2,119		—			—			2,498		2,119		4,617		(144	)	July, 2015	(4)
Moreno Valley Mall	Moreno Valley, CA	(3)		3,898		3,407		—			—			3,898		3,407		7,305		(394	)	July, 2015	(4)
NewPark Mall	Newark, CA	(3)		4,312		3,268		—			—			4,312		3,268		7,580		(475	)	July, 2015	(4)
Valley Plaza	North Hollywood, CA	(3)		8,049		3,172		—			—			8,049		3,172		11,221		(205	)	July, 2015	(4)
Northridge Fashion Center	Northridge, CA	(3)		5,402		3,466		—			—			5,402		3,466		8,868		(412	)	July, 2015	(4)
Palm Desert	Palm Desert, CA	(3)		5,473		1,705		(542	)		(169	)		4,931		1,536		6,467		(279	)	July, 2015	(4)
Ramona Station	Ramona, CA	(3)		7,239		1,452		—			16			7,239		1,468		8,707		(324	)	July, 2015	(4)
Freestanding	Riverside, CA	(3)		4,397		4,407		—			—			4,397		4,407		8,804		(620	)	July, 2015	(4)
Freestanding	Riverside, CA	(3)		2,670		2,489		—			54			2,670		2,543		5,213		(334	)	July, 2015	(4)
Galleria at Roseville	Roseville, CA	(3)		4,848		3,215		—			—			4,848		3,215		8,063		(331	)	July, 2015	(4)
Northridge Mall	Salinas, CA	(3)		2,644		4,394		—			—			2,644		4,394		7,038		(547	)	July, 2015	(4)
Inland Center	San Bernardino, CA	(3)		4,131		2,066		—			—			4,131		2,066		6,197		(385	)	July, 2015	(4)

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Shops at Tanforan	San Bruno, CA	(3)		7,854		4,642		—		—		7,854		4,642		12,496		(528	)	July, 2015	(4)
University Town Centre (UTC)	San Diego, CA	(3)		22,445		14,094		—		1,738		22,445		15,832		38,277		(873	)	July, 2015	(4)
Eastridge Mall (CA)	San Jose, CA	(3)		1,531		2,356		—		—		1,531		2,356		3,887		(722	)	July, 2015	(4)
Capitola Mall	Santa Cruz, CA	(3)		4,338		4,803		—		—		4,338		4,803		9,141		(391	)	July, 2015	(4)
Santa Maria Town Center	Santa Maria, CA	(3)		3,967		2,635		—		—		3,967		2,635		6,602		(225	)	July, 2015	(4)
Freestanding	Santa Monica, CA	(3)		43,916		3,973		—		—		43,916		3,973		47,889		(251	)	July, 2015	(4)
Freestanding	Santa Paula, CA	(3)		2,002		1,147		—		—		2,002		1,147		3,149		(249	)	July, 2015	(4)
Promenade in Temecula	Temecula, CA	(3)		6,098		2,214		—		—		6,098		2,214		8,312		(401	)	July, 2015	(4)
Janss Marketplace	Thousand Oaks, CA	(3)		9,853		14,785		—		2,768		9,853		17,553		27,406		(850	)	July, 2015	(4)
Pacific View	Ventura, CA	(3)		5,578		6,172		—		—		5,578		6,172		11,750		(229	)	July, 2015	(4)
Sequoia Mall	Visalia, CA	(3)		2,967		2,243		—		—		2,967		2,243		5,210		(232	)	July, 2015	(4)
West Covina	West Covina, CA	(3)		5,972		2,053		—		—		5,972		2,053		8,025		(459	)	July, 2015	(4)
Westminster Mall	Westminster, CA	(3)		6,845		5,651		—		—		6,845		5,651		12,496		(497	)	July, 2015	(4)
Westland Shopping Center	Lakewood, CO	(3)		1,290		4,550		—		—		1,290		4,550		5,840		(343	)	July, 2015	(4)
Thornton Place	Thornton, CO	(3)		1,881		1,300		—		—		1,881		1,300		3,181		(585	)	July, 2015	(4)
Crystal Mall	Waterford, CT	(3)		1,371		2,534		—		—		1,371		2,534		3,905		(300	)	July, 2015	(4)
Corbin's Corner	West Hartford, CT	(3)		6,434		10,466		—		—		6,434		10,466		16,900		(765	)	July, 2015	(4)
Freestanding	Rehoboth Beach, DE	(3)		714		4,523		—		—		714		4,523		5,237		(412	)	July, 2015	(4)
Altamonte Mall	Altamonte Springs, FL	(3)		4,051		6,788		—		—		4,051		6,788		10,839		(582	)	July, 2015	(4)
Town Center at Boca Raton	Boca Raton, FL	(3)		16,090		7,479		—		—		16,090		7,479		23,569		(701	)	July, 2015	(4)
DeSoto Square	Bradenton, FL	(3)		958		900		—		7		958		907		1,865		(263	)	July, 2015	(4)
Beachway Plaza	Bradenton, FL	(3)		1,420		1,479		—		—		1,420		1,479		2,899		(207	)	July, 2015	(4)
Countryside	Clearwater, FL	(3)		5,852		17,777		—		818		5,852		18,595		24,447		(932	)	July, 2015	(4)
Miami International Mall	Doral, FL	(3)		9,214		2,654		—		—		9,214		2,654		11,868		(552	)	July, 2015	(4)
Edison Mall	Ft. Myers, FL	(3)		3,168		2,853		—		—		3,168		2,853		6,021		(287	)	July, 2015	(4)
The Oaks Mall	Gainesville, FL	(3)		2,439		1,205		—		—		2,439		1,205		3,644		(167	)	July, 2015	(4)
Westland Shopping Mall	Hialeah, FL	(3)		9,683		3,472		—		—		9,683		3,472		13,155		(363	)	July, 2015	(4)
Freestanding	Hialeah, FL	(3)		5,492		2,344		—		—		5,492		2,344		7,836		(222	)	July, 2015	(4)
Center of Osceola	Kissimmee, FL	(3)		2,107		2,556		—		—		2,107		2,556		4,663		(318	)	July, 2015	(4)
Lakeland Square	Lakeland, FL	(3)		1,503		1,045		—		—		1,503		1,045		2,548		(204	)	July, 2015	(4)
Freestanding	Melbourne, FL	(3)		2,441		1,981		—		—		2,441		1,981		4,422		(324	)	July, 2015	(4)
Aventura Mall	Miami, FL	(3)		13,265		61,576		—		—		13,265		61,576		74,841		(2,462	)	July, 2015	(4)
Southland Mall (FL)	Miami, FL	(3)		5,219		1,236		—		—		5,219		1,236		6,455		(412	)	July, 2015	(4)
Coastland Center	Naples, FL	(3)		8,857		2,209		—		—		8,857		2,209		11,066		(347	)	July, 2015	(4)
Freestanding	North Miami, FL	(3)		4,748		2,434		—		—		4,748		2,434		7,182		(336	)	July, 2015	(4)
Paddock Mall	Ocala, FL	(3)		2,468		1,150		—		—		2,468		1,150		3,618		(220	)	July, 2015	(4)
Kmart Shopping Center	Orange Park, FL	(3)		1,477		1,701		—		401		1,477		2,102		3,579		(249	)	July, 2015	(4)
Orlando Fashion Square	Orlando, FL	(3)		4,403		3,626		—		—		4,403		3,626		8,029		(581	)	July, 2015	(4)
Panama City Mall	Panama City, FL	(3)		3,227		1,614		—		—		3,227		1,614		4,841		(1,107	)	July, 2015	(4)
University Town Plaza	Pensacola, FL	(3)		2,620		2,990		—		—		2,620		2,990		5,610		(357	)	July, 2015	(4)
Westfield Broward	Plantation, FL	(3)		6,933		2,509		—		—		6,933		2,509		9,442		(424	)	July, 2015	(4)
Sarasota Square	Sarasota, FL	(3)		3,920		2,200		—		—		3,920		2,200		6,120		(333	)	July, 2015	(4)

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Freestanding	St. Petersburg, FL	(3)		1,653		777		—		—		1,653		777		2,430		(253	)	July, 2015	(4)
Tyrone Square Mall	St. Petersburg, FL	(3)		2,381		2,420		—		—		2,381		2,420		4,801		(412	)	July, 2015	(4)
Cumberland Mall	Atlanta, GA	(3)		8,891		6,469		—		3		8,891		6,472		15,363		(495	)	July, 2015	(4)
Oglethorpe Mall	Savannah, GA	(3)		5,285		3,012		—		—		5,285		3,012		8,297		(296	)	July, 2015	(4)
Freestanding	Honolulu (5), HI	(3)		6,824		2,195		—		—		6,824		2,195		9,019		(138	)	July, 2015	(4)
Freestanding	Algona, IA	(3)		644		2,796		—		—		644		2,796		3,440		(234	)	July, 2015	(4)
Lindale Mall	Cedar Rapids, IA	(3)		2,833		2,197		—		—		2,833		2,197		5,030		(268	)	July, 2015	(4)
Freestanding	Charles City, IA	(3)		793		1,914		—		—		793		1,914		2,707		(259	)	July, 2015	(4)
Webster City Plaza	Webster City, IA	(3)		392		896		—		—		392		896		1,288		(102	)	July, 2015	(4)
Boise Towne Square	Boise, ID	(3)		1,828		1,848		—		—		1,828		1,848		3,676		(217	)	July, 2015	(4)
Freestanding	Chicago, IL	(3)		3,665		3,504		—		—		3,665		3,504		7,169		(193	)	July, 2015	(4)
Freestanding	Chicago, IL	(3)		905		804		—		—		905		804		1,709		(156	)	July, 2015	(4)
Kedzie Square	Chicago, IL	(3)		2,385		7,924		—		—		2,385		7,924		10,309		(531	)	July, 2015	(4)
Homewood Square	Homewood, IL	(3)		3,954		4,766		—		36		3,954		4,802		8,756		(493	)	July, 2015	(4)
Louis Joliet Shopping Mall	Joliet, IL	(3)		2,557		3,108		—		—		2,557		3,108		5,665		(507	)	July, 2015	(4)
Freestanding	Lombard, IL	(3)		2,685		8,281		—		—		2,685		8,281		10,966		(462	)	July, 2015	(4)
Freestanding	Moline, IL	(3)		2,010		751		—		—		2,010		751		2,761		(263	)	July, 2015	(4)
North Riverside Park Mall	North Riverside, IL	(3)		1,846		3,178		—		—		1,846		3,178		5,024		(387	)	July, 2015	(4)
Orland Square	Orland Park, IL	(3)		1,783		974		—		—		1,783		974		2,757		(229	)	July, 2015	(4)
Sherwood Plaza	Springfield, IL	(3)		2,182		5,051		—		—		2,182		5,051		7,233		(527	)	July, 2015	(4)
Freestanding	Steger, IL	(3)		589		2,846		—		—		589		2,846		3,435		(160	)	July, 2015	(4)
North Pointe Plaza	Elkhart, IN	(3)		1,349		869		—		—		1,349		869		2,218		(128	)	July, 2015	(4)
Glenbrook Square	Ft. Wayne, IN	(3)		3,247		5,476		—		—		3,247		5,476		8,723		(475	)	July, 2015	(4)
Broadway Center	Merrillville, IN	(3)		3,413		3,224		—		—		3,413		3,224		6,637		(509	)	July, 2015	(4)
Freestanding	Leavenworth, KS	(3)		397		705		—		—		397		705		1,102		(161	)	July, 2015	(4)
Metcalf Shopping Center	Overland Park, KS	(3)		2,775		1,766		—		—		2,775		1,766		4,541		(408	)	July, 2015	(4)
Pennyrile Marketplace	Hopkinsville, KY	(3)		553		2,815		—		—		553		2,815		3,368		(325	)	July, 2015	(4)
Audubon Plaza	Owensboro, KY	(3)		411		1,083		—		—		411		1,083		1,494		(107	)	July, 2015	(4)
Kentucky Oaks	Paducah, KY	(3)		1,022		2,868		—		—		1,022		2,868		3,890		(298	)	July, 2015	(4)
Freestanding	Houma, LA	(3)		590		2,030		—		—		590		2,030		2,620		(239	)	July, 2015	(4)
The Mall of Acadiana	Lafayette, LA	(3)		1,406		5,094		—		—		1,406		5,094		6,500		(512	)	July, 2015	(4)
Freestanding	New Iberia, LA	(3)		450		1,819		—		—		450		1,819		2,269		(291	)	July, 2015	(4)
Braintree Marketplace	Braintree (5), MA	(3)		6,585		5,614		—		9,889		6,585		15,503		22,088		(358	)	July, 2015	(4)
Square One Mall	Saugus, MA	(3)		1,656		2,835		—		—		1,656		2,835		4,491		(426	)	July, 2015	(4)
Bowie Town Center	Bowie, MD	(3)		4,583		2,335		—		—		4,583		2,335		6,918		(280	)	July, 2015	(4)
Hunt Valley Towne Centre	Cockeysville, MD	(3)		5,768		2,319		—		—		5,768		2,319		8,087		(306	)	July, 2015	(4)
South River Colony	Edgewater, MD	(3)		5,534		2,116		—		—		5,534		2,116		7,650		(317	)	July, 2015	(4)
Valley Mall (MD)	Hagerstown, MD	(3)		2,877		1,378		—		—		2,877		1,378		4,255		(298	)	July, 2015	(4)
Midtown Shopping Center	Madawaska, ME	(3)		140		942		—		—		140		942		1,082		(64	)	July, 2015	(4)
Freestanding	Alpena, MI	(3)		782		1,427		—		—		782		1,427		2,209		(228	)	July, 2015	(4)
Jackson Crossing	Jackson, MI	(3)		2,720		1,184		—		—		2,720		1,184		3,904		(297	)	July, 2015	(4)
Lincoln Park Shopping Center	Lincoln Park, MI	(3)		1,106		3,198		—		—		1,106		3,198		4,304		(390	)	July, 2015	(4)
Hillside Plaza	Manistee, MI	(3)		508		3,045		—		—		508		3,045		3,553		(355	)	July, 2015	(4)

							Costs Capitalized				Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition				at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Macomb Mall	Roseville, MI	(3)		3,286		4,778		—		—		3,286		4,778		8,064		(557	)	July, 2015	(4)
Freestanding	Sault Ste. Marie, MI	(3)		946		917		—		—		946		917		1,863		(192	)	July, 2015	(4)
Freestanding	St. Clair Shores, MI	(3)		2,399		1,797		—		—		2,399		1,797		4,196		(249	)	July, 2015	(4)
Oakland Mall	Troy, MI	(3)		7,954		2,651		—		—		7,954		2,651		10,605		(758	)	July, 2015	(4)
Freestanding	Ypsilanti, MI	(3)		2,462		1,277		—		—		2,462		1,277		3,739		(331	)	July, 2015	(4)
Burnsville Center	Burnsville, MN	(3)		3,513		1,281		—		—		3,513		1,281		4,794		(452	)	July, 2015	(4)
Detroit Lakes K Mart Plaza	Detroit Lakes, MN	(3)		1,130		1,220		—		—		1,130		1,220		2,350		(287	)	July, 2015	(4)
Maplewood Mall	Maplewood, MN	(3)		3,605		1,162		—		—		3,605		1,162		4,767		(307	)	July, 2015	(4)
Freestanding	St. Paul, MN	(3)		1,866		1,028		—		—		1,866		1,028		2,894		(348	)	July, 2015	(4)
Freestanding	Cape Girardeau, MO	(3)		609		908		—		—		609		908		1,517		(95	)	July, 2015	(4)
Flower Valley Shopping Center	Florissant, MO	(3)		2,430		1,607		—		—		2,430		1,607		4,037		(290	)	July, 2015	(4)
Freestanding	Jefferson City, MO	(3)		957		2,224		—		—		957		2,224		3,181		(243	)	July, 2015	(4)
Kickapoo Corners	Springfield, MO	(3)		922		2,050		—		—		922		2,050		2,972		(215	)	July, 2015	(4)
Columbus Centre	Columbus, MS	(3)		2,940		2,547		—		—		2,940		2,547		5,487		(360	)	July, 2015	(4)
Freestanding	Havre, MT	(3)		600		790		—		—		600		790		1,390		(138	)	July, 2015	(4)
Asheville Mall	Asheville, NC	(3)		4,141		2,036		—		—		4,141		2,036		6,177		(347	)	July, 2015	(4)
Concord Plaza	Concord, NC	(3)		2,325		1,275		—		—		2,325		1,275		3,600		(414	)	July, 2015	(4)
Landmark Center	Greensboro, NC	(3)		3,869		4,387		—		746		3,869		5,133		9,002		(528	)	July, 2015	(4)
Kmart Shopping Center	Minot, ND	(3)		1,724		2,925		—		—		1,724		2,925		4,649		(327	)	July, 2015	(4)
Freestanding	Kearney, NE	(3)		272		483		—		—		272		483		755		(93	)	July, 2015	(4)
Mall of New Hampshire	Manchester, NH	(3)		1,458		4,160		—		—		1,458		4,160		5,618		(355	)	July, 2015	(4)
Pheasant Lane Mall	Nashua, NH	(3)		1,794		7,255		—		—		1,794		7,255		9,049		(363	)	July, 2015	(4)
Fox Run Mall	Portsmouth, NH	(3)		3,934		3,375		—		—		3,934		3,375		7,309		(427	)	July, 2015	(4)
Mall at Rockingham Park	Salem, NH	(3)		3,321		12,198		—		—		3,321		12,198		15,519		(777	)	July, 2015	(4)
Freestanding	Middletown, NJ	(3)		5,647		2,941		—		161		5,647		3,102		8,749		(769	)	July, 2015	(4)
Freestanding	Watchung, NJ	(3)		6,704		4,110		—		—		6,704		4,110		10,814		(550	)	July, 2015	(4)
Willowbrook Mall	Wayne, NJ	(3)		12,850		4,553		—		—		12,850		4,553		17,403		(763	)	July, 2015	(4)
Freestanding	Deming, NM	(3)		1,085		1,194		—		—		1,085		1,194		2,279		(191	)	July, 2015	(4)
Freestanding	Farmington, NM	(3)		1,480		1,845		—		—		1,480		1,845		3,325		(241	)	July, 2015	(4)
Kmart Shopping Center	Hobbs, NM	(3)		1,386		2,557		—		—		1,386		2,557		3,943		(260	)	July, 2015	(4)
Eastern Commons Shopping Center	Henderson, NV	(3)		3,124		1,362		—		—		3,124		1,362		4,486		(308	)	July, 2015	(4)
Meadows Mall	Las Vegas, NV	(3)		3,354		1,879		—		—		3,354		1,879		5,233		(324	)	July, 2015	(4)
Meadowood Mall	Reno, NV	(3)		2,135		5,748		—		—		2,135		5,748		7,883		(299	)	July, 2015	(4)
Colonie Center	Albany, NY	(3)		8,289		6,523		—		—		8,289		6,523		14,812		(693	)	July, 2015	(4)
Great Northern Mall	Clay, NY	(3)		787		4,134		—		—		787		4,134		4,921		(368	)	July, 2015	(4)
Huntington Square Mall	East Northport, NY	(3)		7,617		2,065		—		—		7,617		2,065		9,682		(377	)	July, 2015	(4)
Freestanding	Hicksville, NY	(3)		38,626		19,065		—		—		38,626		19,065		57,691		(1,695	)	July, 2015	(4)
Oakdale Mall	Johnson City, NY	(3)		2,169		934		—		—		2,169		934		3,103		(183	)	July, 2015	(4)
Freestanding	Olean, NY	(3)		249		2,124		—		—		249		2,124		2,373		(238	)	July, 2015	(4)
Mall at Greece Ridge Center	Rochester, NY	(3)		3,082		1,560		—		—		3,082		1,560		4,642		(367	)	July, 2015	(4)
Sidney Plaza	Sidney, NY	(3)		1,942		1,769		—		—		1,942		1,769		3,711		(576	)	July, 2015	(4)
Eastview Mall	Victor, NY	(3)		4,144		1,391		—		—		4,144		1,391		5,535		(374	)	July, 2015	(4)

							Costs Capitalized					Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition					at Close of Period (2)										Life Upon Which
					Buildings and				Buildings and					Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land		Improvements			Land		Improvements		Total		Depreciation			Acquired	is Computed
Jefferson Valley Mall	Yorktown Heights, NY	(3)		3,584		1,569		—		—			3,584		1,569		5,153		(345	)	July, 2015	(4)
Belden Village	Canton, OH	(3)		1,650		5,854		—		—			1,650		5,854		7,504		(631	)	July, 2015	(4)
Chapel Hill Mall	Chapel Hill, OH	(3)		444		1,460		—		—			444		1,460		1,904		(469	)	July, 2015	(4)
Dayton Mall	Dayton, OH	(3)		2,650		1,223		—		—			2,650		1,223		3,873		(381	)	July, 2015	(4)
Freestanding	Kenton, OH	(3)		340		417		—		—			340		417		757		(187	)	July, 2015	(4)
Freestanding	Marietta, OH	(3)		598		706		—		—			598		706		1,304		(132	)	July, 2015	(4)
Great Lakes Mall	Mentor, OH	(3)		1,092		1,776		—		—			1,092		1,776		2,868		(343	)	July, 2015	(4)
Southland Shopping Center	Middleburg Heights, OH	(3)		698		1,547		—		—			698		1,547		2,245		(249	)	July, 2015	(4)
Kmart Plaza	North Canton, OH	(3)		1,044		1,126		—		—			1,044		1,126		2,170		(189	)	July, 2015	(4)
Freestanding	Tallmadge, OH	(3)		870		682		—		—			870		682		1,552		(173	)	July, 2015	(4)
Westgate Village Shopping Center	Toledo, OH	(3)		1,664		1,289		—		—			1,664		1,289		2,953		(229	)	July, 2015	(4)
Freestanding	Muskogee, OK	(3)		647		966		—		—			647		966		1,613		(210	)	July, 2015	(4)
Freestanding	Oklahoma City, OK	(3)		1,542		2,210		—		—			1,542		2,210		3,752		(583	)	July, 2015	(4)
Freestanding	Tulsa, OK	(3)		2,048		5,386		—		1,573			2,048		6,959		9,007		(508	)	July, 2015	(4)
Clackamas Town Center	Happy Valley, OR	(3)		6,659		1,271		—		—			6,659		1,271		7,930		(196	)	July, 2015	(4)
Freestanding	The Dalles, OR	(3)		616		775		—		—			616		775		1,391		(147	)	July, 2015	(4)
Walnut Bottom Towne Centre	Carlisle, PA	(3)		1,103		1,725		—		—			1,103		1,725		2,828		(86	)	July, 2015	(4)
Shops at Prospect	Columbia, PA	(3)		897		2,202		—		6			897		2,208		3,105		(204	)	July, 2015	(4)
King of Prussia	King Of Prussia (6), PA	(3)		—		42,300		—		-			—		42,300		42,300		(1,849	)	July, 2015	(4)
Kmart & Lowes Shopping Center	Lebanon, PA	(3)		1,333		2,085		—		—			1,333		2,085		3,418		(423	)	July, 2015	(4)
Countryside Shopping Center	Mount Pleasant, PA	(3)		970		1,520		—		—			970		1,520		2,490		(262	)	July, 2015	(4)
Freestanding	Walnutport, PA	(3)		885		3,452		—		—			885		3,452		4,337		(434	)	July, 2015	(4)
Haines Acres Shopping Center	York, PA	(3)		1,096		1,414		—		3			1,096		1,417		2,513		(176	)	July, 2015	(4)
Rexville (Bayamon) Towne Center	Bayamon, PR	(3)		656		7,173		—		1			656		7,174		7,830		(445	)	July, 2015	(4)
Las Catalinas	Caguas, PR	(3)		431		9,362		—		—			431		9,362		9,793		(536	)	July, 2015	(4)
Plaza Carolina	Carolina, PR	(3)		611		8,640		—		—			611		8,640		9,251		(584	)	July, 2015	(4)
Plaza Guaynabo	Guaynabo, PR	(3)		1,603		26,695		—		—			1,603		26,695		28,298		(1,436	)	July, 2015	(4)
Western Plaza	Mayaguez, PR	(3)		564		4,555		—		—			564		4,555		5,119		(387	)	July, 2015	(4)
Ponce Towne Center	Ponce, PR	(3)		473		3,965		—		—			473		3,965		4,438		(302	)	July, 2015	(4)
Rhode Island Mall	Warwick, RI	(3)		9,166		3,388		—		—			9,166		3,388		12,554		(675	)	July, 2015	(4)
Boulevard Market Fair	Anderson, SC	(3)		1,297		638		—		—			1,297		638		1,935		(107	)	July, 2015	(4)
Northwoods Mall	Charleston, SC	(3)		3,576		1,497		—		—			3,576		1,497		5,073		(291	)	July, 2015	(4)
Kmart Plaza	Rock Hill, SC	(3)		1,432		1,079		—		—			1,432		1,079		2,511		(227	)	July, 2015	(4)
Freestanding	Sioux Falls, SD	(3)		1,025		1,783		—		—			1,025		1,783		2,808		(153	)	July, 2015	(4)
Wolfchase Galleria	Cordova, TN	(3)		2,581		4,279		—		—			2,581		4,279		6,860		(340	)	July, 2015	(4)
Freestanding	Memphis (5), TN	(3)		2,827		2,475		—		(2,475	)		2,827		-		2,827		-		July, 2015	(4)
Tech Ridge	Austin, TX	(3)		3,164		2,858		—		—			3,164		2,858		6,022		(446	)	July, 2015	(4)
Southwest Center Mall	Dallas, TX	(3)		1,154		1,314		—		—			1,154		1,314		2,468		(280	)	July, 2015	(4)
Freestanding	El Paso, TX	(3)		2,008		1,778		—		—			2,008		1,778		3,786		(248	)	July, 2015	(4)
Baybrook Mall	Friendswood, TX	(3)		6,124		2,038		—		—			6,124		2,038		8,162		(309	)	July, 2015	(4)
Kmart Plaza	Harlingen, TX	(3)		1,795		1,183		—		—			1,795		1,183		2,978		(120	)	July, 2015	(4)
Memorial City Mall	Houston, TX	(3)		7,967		4,625		—		—			7,967		4,625		12,592		(627	)	July, 2015	(4)
Freestanding	Houston, TX	(3)		6,110		1,525		—		—			6,110		1,525		7,635		(247	)	July, 2015	(4)

							Costs Capitalized					Gross Amount at Which Carried
			Acquisition Costs (1)				Subsequent to Acquisition					at Close of Period (2)										Life Upon Which
					Buildings and					Buildings and				Buildings and				Accumulated			Date	Depreciation
Name of Center	Location	Encumbrances	Land		Improvements		Land			Improvements		Land		Improvements		Total		Depreciation			Acquired	is Computed
Ingram Park Mall	Ingram, TX	(3)		4,651		2,560		—			—		4,651		2,560		7,211		(302	)	July, 2015	(4)
Irving Mall	Irving, TX	(3)		4,493		5,743		—			—		4,493		5,743		10,236		(525	)	July, 2015	(4)
Freestanding	San Antonio, TX	(3)		5,468		1,457		—			—		5,468		1,457		6,925		(255	)	July, 2015	(4)
Freestanding	Shepherd, TX	(3)		5,457		2,081		—			—		5,457		2,081		7,538		(279	)	July, 2015	(4)
Valley View Center	Valley View, TX	(3)		4,706		3,230		—			—		4,706		3,230		7,936		(573	)	July, 2015	(4)
Freestanding	Westwood, TX	(3)		2,899		1,748		—			—		2,899		1,748		4,647		(353	)	July, 2015	(4)
Antelope Square	Layton, UT	(3)		2,234		974		—			527		2,234		1,501		3,735		(229	)	July, 2015	(4)
Jordan Landing Shopping    Center	West Jordan, UT	(3)		3,190		2,305		—			—		3,190		2,305		5,495		(237	)	July, 2015	(4)
Landmark Mall	Alexandria, VA	(3)		3,728		3,294		—			—		3,728		3,294		7,022		(522	)	July, 2015	(4)
Greenbrier Mall	Chesapeake, VA	(3)		4,236		1,700		—			—		4,236		1,700		5,936		(306	)	July, 2015	(4)
Fair Oaks Mall	Fairfax, VA	(3)		10,873		1,491		—			—		10,873		1,491		12,364		(332	)	July, 2015	(4)
Newmarket Fair Mall	Hampton, VA	(3)		771		1,011		—			—		771		1,011		1,782		(339	)	July, 2015	(4)
Pembroke Mall	Virginia Beach, VA	(3)		10,413		4,760		—			12,235		10,413		16,995		27,408		(733	)	July, 2015	(4)
Warrenton Village	Warrenton, VA	(3)		1,956		2,480		—			—		1,956		2,480		4,436		(242	)	July, 2015	(4)
Overland Plaza	Redmond, WA	(3)		5,133		4,133		—			—		5,133		4,133		9,266		(509	)	July, 2015	(4)
Westfield Vancouver	Vancouver, WA	(3)		3,378		1,136		—			—		3,378		1,136		4,514		(259	)	July, 2015	(4)
Freestanding	Yakima, WA	(3)		1,863		2,856		—			—		1,863		2,856		4,719		(420	)	July, 2015	(4)
Southridge Mall	Greendale, WI	(3)		3,208		2,340		—			—		3,208		2,340		5,548		(564	)	July, 2015	(4)
West Towne Mall	Madison, WI	(3)		3,053		2,130		—			—		3,053		2,130		5,183		(533	)	July, 2015	(4)
Freestanding	Platteville, WI	(3)		748		1,195		—			—		748		1,195		1,943		(195	)	July, 2015	(4)
Patrick Street Plaza	Charleston, WV	(3)		2,030		797		—			—		2,030		797		2,827		(215	)	July, 2015	(4)
Valley Point	Elkins, WV	(3)		788		1,147		—			—		788		1,147		1,935		(192	)	July, 2015	(4)
Freestanding	Scott Depot, WV	(3)		987		484		—			—		987		484		1,471		(141	)	July, 2015	(4)
Mountain Plaza	Casper, WY	(3)		509		1,303		—			—		509		1,303		1,812		(182	)	July, 2015	(4)
Freestanding	Gillette, WY	(3)		846		876		—			—		846		876		1,722		(189	)	July, 2015	(4)
Freestanding	Riverton, WY	(3)		561		847		—			—		561		847		1,408		(181	)	July, 2015	(4)
Construction in process	Various	(3)		—		—		—			55,208		—		55,208		55,208	—			n/a	n/a
				840,563		810,499		(542	)		84,372		840,021		894,871		1,734,892		(89,940	)

(1) Acquisition costs are based on initial purchase price acquisition and are subject to adjustment.  See Note 3.

(2) The aggregate cost of land, building and improvements (which includes construction in process) for federal income tax purposes is approximately $2.3 billion.

(3) All properties are encumbered by our Mortgage Loans and Future Funding Facility.  See Note 7.

(4) Depreciation is computed based on the following estimated useful lives:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

SERITAGE GROWTH PROPERTIES

NOTES TO SCHEDULE III

(Dollars in thousands)

Reconciliation of Real Estate

	2016			2015
Balance at beginning of period	$	1,668,351		$	1,651,062
Additions		69,726			17,289
Impairments					—
Dispositions and write-offs		(3,185	)		—
Balance at end of period	$	1,734,892		$	1,668,351

Reconciliation of Accumulated Depreciation

	2016			2015
Balance at beginning of period	$	29,076		$	—
Depreciation expense		60,972			29,076
Dispositions and write-offs		(108	)		—
Balance at end of period	$	89,940		$	29,076

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.  All intercompany accounts and transactions have been eliminated.

If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting.  Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting.  The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.  The Company holds a 56.7% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.  Through consideration of new consolidation guidance effective for the Company as of January 1, 2016, it has been concluded that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.  Accordingly, the Company consolidates its interest in the Operating Partnership.  However, as the Company holds what is deemed a majority voting interest in the Operating Partnership, it qualifies for the exemption from providing certain of the disclosure requirements associated with investments in VIEs.

The portions of consolidated entities not owned by the Company and the Operating Partnership are presented as non-controlling interests as of and during the periods presented.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  The most significant assumptions and estimates relate to fair values of acquired assets and liabilities assumed for purposes of applying the acquisition method of accounting, the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivables.  These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances.  Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.  Actual results could differ from these estimates.

Segment Reporting

Segment Reporting

The Company currently operates in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management and leasing of retail properties.  The Company’s chief operating decision maker, its Chief Executive Officer, assesses and measures the operating and financial results for each property on an individual basis and does not distinguish or group properties based on geography, size, or type. The Company, therefore, aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operational process.

Accounting for Real Estate Acquisitions

Accounting for Real Estate Acquisitions

Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments.  In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located.

The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use.  The "if vacant" value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties.  Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.

The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheet and amortized over the remaining lease term for each tenant.

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheet; below-market tenant leases and above-market ground leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet.  The values assigned to above-market and below-market tenant leases are amortized as reductions and increases, respectively, to base rental revenue over the remaining term of the respective leases.  The values assigned to below-market and above-market ground leases are amortized as increases and reductions, respectively, to property operating expenses over the remaining term of the respective leases.

The Company expenses transaction costs associated with business combinations in the period incurred.  These costs are included in acquisition-related expenses within the consolidated statements of operations.

Real Estate Investments

Real Estate Investments

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred.  Significant renovations which improve the property or extend the useful life of the assets are capitalized.  As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized.  The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired.  If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value.  Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors.  If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions and earnings which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary.  To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.  No such impairment losses were recognized for the year ended December 31, 2016 or the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted Cash

Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits.  As of December 31, 2016, the Company had approximately $87.6 million of restricted cash, consisting of $65.5 million reserved for redevelopment costs, tenant allowances and leasing commissions, deferred maintenance, environmental remediation and other capital expenditures, $19.2 million related to basic property carrying costs such as real estate taxes, insurance and ground rent; and $2.9 million of other restricted cash which consists primarily of prepaid rental income.

As of December 31, 2015, the Company had approximately $92.5 million of restricted cash, including $51.3 million reserved for redevelopment costs, deferred maintenance, environmental remediation and other capital expenditures; $38.5 million related to basic property carrying costs such as real estate taxes, insurance and ground rent and $2.7 million of other restricted cash which consists primarily of prepaid rental income.

Tenant and Other Receivables

Tenant and Other Receivables

Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses and amounts arising from the straight-lining of rent.  The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located.  In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific rent receivable will be made.  For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.

Revenue Recognition

Revenue Recognition

Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheet.

In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance.  In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements.  If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term.  If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on straight-line basis.

The Company commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset.  Generally, this occurs on the lease commencement date.

Tenant reimbursement income arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  This revenue is accrued in the same periods as the related expenses are incurred.

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

Seritage 100% Recapture Rights.  The Company generally treats the delivery of a 100% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are deemed uncollectable as result of the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project.  As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved.

Seritage 50% Recapture Rights.  The Company generally treats the delivery of a 50% recapture notice as a modification of the Master Lease as of the date of notice.  Such a notice and lease modification result in the following accounting adjustments for the recaptured property:

• The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the lease modification are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.  The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the Master Lease.

• The portion of intangible lease assets and liabilities that is deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.  The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability.

Sears Holdings Termination Rights.  The Master Lease provides Sears Holdings with certain rights to terminate the Master Lease with respect to properties that cease to be profitable for operation by Sears Holdings.  Such a termination would generally result in the following accounting adjustments for the terminated property:

• Accrued rental revenues related to the straight-line method of reporting rental revenue that are subject to the termination are amortized over the remaining shortened life of the lease from the date of notice to the date of vacancy.

• Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term from the date of notice to the date of vacancy or the remaining useful life of the asset or liability.

• Termination fees required to be paid by Sears Holdings are recognized as follows:

• For the portion of the termination fee attributable to the annual base rent of the subject property, termination income is recognized on a straight-line basis over the shortened life of the lease from the date the termination fee becomes legally binding to the date of termination.

• For the portion of the termination fee attributable to estimated real estate taxes and property operating expenses for the subject property, prepaid rental income is recorded in the period such fee is received and recognized as tenant reimbursement revenue in the same periods as the expenses are incurred.

Derivatives

Derivatives

The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes.  In connection with the issuance of the Company’s Mortgage Loans and Future Funding Facility, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1,261 million and a strike rate of 3.5%.  The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheet.  The Company has elected not to utilize hedge accounting and therefore the change in fair value is included within change in fair value of interest rate cap on the consolidated statements of operations.  For the year ended December 31, 2016, the Company recorded an unrealized loss of $1.4 million related to the change in fair value of the interest rate cap as compared to an unrealized loss of $2.9 million for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015.  As of December 31, 2016, the interest rate cap had a fair value of approximately $0.7 million as compared to $2.1 million at December 31, 2015.

Stock-Based Compensation

Stock-Based Compensation

The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses in the consolidated statements of operations.  Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.

Concentration of Credit Risk

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of December 31, 2016, substantially all of the Company's real estate properties were leased to Sears Holdings and the majority of Company’s rental revenues were derived from the Master Lease (see Note 6).  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on Sears Holdings’ business, financial condition or results of operations could have a material adverse effect on the Company’s business, financial condition or results of operations.  Sears Holdings is a publicly traded company that is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K and Form 10-Q with the SEC.  Refer to www.sec.gov for Sears Holdings Corporation publicly-available financial information.

Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk.  As of December 31, 2016, the Company's portfolio of 235 Wholly Owned Properties was diversified by location across 49 states and Puerto Rico.

Earnings (Loss) per Share

Earnings (Loss) per Share

The Company has three classes of common stock.  The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.  Class B non-economic common shares are excluded from earnings (loss) per share computations as they do not have economic rights.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In January 2017, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01 which changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets.  While there are various differences between the accounting for an asset acquisition and a business combination, the Company expects that the largest impact will be the capitalization of transaction costs for asset acquisitions which are expensed for business combinations.  ASU 2007-01 is effective, on a prospective basis, for interim and annual periods beginning after January 1, 2019; early adoption is permitted.  The Company has chosen to early adopt ASU 2017-01 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows - Restricted Cash." ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or cash equivalents.  Therefore, amounts generally described as restricted cash and equivalents should be included with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows.  Currently, there is no specific guidance to address how to classify or present these changes. ASU 2016-18 is effective, on a retroactive basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 provides classification guidance for eight specific topics including debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. ASU 2016-18 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

On February 25, 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases.  ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018.  ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases.  Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability.  For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases, the lessee would recognize a straight-line total lease expense.  The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures.

In September 2015, the FASB issued ASU 2015-16, which amends Topic 805, Business Combinations, and requires the recognition of purchase price allocation adjustments that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, and eliminates the requirement to retrospectively account for these adjustments.  ASU 2015-16 is effective, on a prospective basis, for interim and annual periods beginning after December 15, 2015; early adoption is permitted.  The Company has chosen to early adopt ASU 2015-16 during the current period on a prospective basis and it did not have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  The recognition and measurement guidance for debt issuance costs are not affected.  ASU 2015-03 is effective for annual periods beginning after December 31, 2015.  Early adoption is permitted.  The Company elected to early adopt ASU 2015-03 during the current period for the costs related to the Mortgage Loans issued in connection with the Transaction.  As the Company has not previously reported debt issuance costs and mortgage loans payable within the consolidated financial statements, retrospective application is not required.  As such, debt issuance costs, net of accumulated amortization, are netted against mortgage loans payable on the consolidated balance sheet.

In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.  ASU 2015-02 is effective for annual periods beginning after December 15, 2015.  Although the Company has not yet finalized its evaluation of this new accounting standard, aside from certain expanded disclosure requirements, it is not expected that the adoption of this standard will have a material impact on the consolidated financial statements.

In May 2014, with subsequent updates issued in August 2015 and March, April, May and December 2016, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.  ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”  While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment.  In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year.  Accordingly, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016.  The standard can be applied either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment recognized as of the date of initial application. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this guidance. While the Company anticipates additional disclosure, it does not expect the adoption of this pronouncement will have a material effect on its consolidated financial statements; however, it will continue to evaluate this assessment until the guidance becomes effective.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of Estimated Useful Lives

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows:

Building:	25 – 40 years
Site improvements:	5 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Summary of Purchase Price and Fair Value of Net Assets Acquired

The following table summarizes the purchase price and fair values of the net assets acquired in the Transaction (in thousands):

Proceeds from issuance of common stock and    non-controlling interest			$	1,644,042
Less: Offering related costs				(8,212	)
Proceeds from issuance of mortgage loans payable				1,161,196
Less: Deferred financing costs				(21,446	)
Total sources of funds net of offering and financing costs				2,775,580
Real estate assets acquired
Land	840,563
Buildings and improvements	810,499
Lease intangibles
In-place leases	595,443
Below-market ground lease	11,766
Above-market leases	9,058
Below-market leases	(20,045	)
Investments in unconsolidated joint ventures	429,012
Total fair value of real estate assets acquired				2,676,296
Plus: Restricted cash
Environmental expenses reserve	12,034
Deferred maintenance reserve	10,575
Total restricted cash				22,609
Less: Assumed liabilities
Real estate taxes payable	(23,277	)
Environmental expenses	(12,034	)
Deferred maintenance	(10,575	)
Total assumed liabilities				(45,886	)
Net cash paid for acquisition of real estate and unconsolidated    joint ventures				2,653,019
Additional (sources) / uses of cash
Prepaid rent	(26,855	)
Initial funding of unfunded construction commitments    reserve (restricted cash)	42,470
Initial funding of property carry costs reserve    (restricted cash)	32,482
Initial funding of interest expense reserve (restricted cash)	4,924
Acquisition related expenses	18,340
Prepaid interest expense	1,249
Total additional (sources) uses of cash, net				72,610
Remaining excess cash from transaction			$	49,951

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Lease Intangible Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Lease Intangible Assets

The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

December 31, 2016
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	592,871	$	(146,964	)	$	445,907
Below-market ground leases, net		11,766		(305	)		11,461
Above-market leases, net		8,964		(1,933	)		7,031
Total	$	613,601	$	(149,202	)	$	464,399

December 31, 2015								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Assets	Asset		Amortization			Balance		Period
In-place leases, net	$	595,443	$	(36,800	)	$	558,643		8.4	years
Below-market ground leases, net		11,766		(102	)		11,664		57.5	years
Above-market leases, net		9,058		(570	)		8,488		8.8	years
Total	$	616,267	$	(37,472	)	$	578,795		9.4	years

Summary of Lease Intangible Liabilities

The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	20,011	$	(3,184	)	$	16,827
Total	$	20,011	$	(3,184	)	$	16,827

								Wtd. Avg.
								Remaining
	Gross		Accumulated					Amortization
Lease Intangible Liabilities	Liability		Amortization			Balance		Period
Below-market leases, net	$	20,045	$	(1,059	)	$	18,986		11.4	years
Total	$	20,045	$	(1,059	)	$	18,986		11.4	years

Schedule of Estimated Amortization for Below-Market Ground Leases

Estimated annual amortization of acquired below-market ground leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	203
2018		203
2019		203
2020		203
2021		203

Above-Market Leases, Net [Member]

Schedule of Estimated Annual Amortization of Acquired In Place Leases

Estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	(970	)
2018		(970	)
2019		(943	)
2020		(808	)
2021		(792	)

In-Place Leases, Net [Member]

Schedule of Estimated Annual Amortization of Acquired In Place Leases

Estimated annual amortization of acquired in-place leases for each of the five succeeding years commencing January 1, 2017 is as follows (in thousands):

2017	$	102,380
2018		61,988
2019		59,823
2020		58,088
2021		52,248

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Investments in Unconsolidated Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2016

Equity Method Investments And Joint Ventures [Abstract]

Summary of Company's Investments in Unconsolidated Joint Ventures

The Company’s investments in unconsolidated joint ventures at December 31, 2016, consisted of (in thousands):

	# of		Total		Initial		Seritage %
Joint Venture	Properties		GLA		Investment		Ownership
GGP JV		12		2,167	$	165,000		50	%
Macerich JV		9		1,573		150,000		50	%
Simon JV		10		1,714		114,012		50	%
Total		31		5,454	$	429,012

Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures

The following table presents combined condensed financial data for all of the Company’s unconsolidated joint ventures as of December 31, 2016 and December 31, 2015, and for the year ended December 31, 2016 and the period from July 7, 2015 (Date operations Commenced) to December 31, 2015:

	December 31 2016			December 31, 2015
ASSETS
Investment in real estate
Land	$	214,109		$	214,726
Buildings and improvements		598,978			603,265
Accumulated depreciation		(56,324	)		(24,111	)
		756,763			793,880
Construction in progress		48,885			1,481
Net investment in real estate		805,648			795,361
Cash and cash equivalents		3,434			19,903
Tenant and other receivables, net		6,133			4,990
Other assets, net		38,646			30,506
Total assets	$	853,861		$	850,760
LIABILITIES AND MEMBERS INTERESTS
Liabilities
Accounts payable, accrued expenses and other liabilities	$	14,177		$	13,973
Total liabilities		14,177			13,973
Members Interest
Additional paid in capital		830,389			823,923
Retained earnings		9,295			12,864
Total members interest		839,684			836,787
Total liabilities and members interest	$	853,861		$	850,760

				July 7, 2015
	Year Ended			(dateoperations commenced) to
	December 31, 2016			December 31, 2015
EQUITY IN INCOME OF UNCONSOLIDATED    JOINT VENTURES
Total revenue	$	66,417		$	35,150
Property operating expenses		(12,787	)		(7,339	)
Depreciation and amortization		(42,233	)		(17,975	)
Operating income		11,397			9,836
Other expenses		(2,105	)		(292	)
Net income	$	9,292		$	9,544
Equity in income of unconsolidated joint ventures	$	4,646		$	4,772

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Leases (Tables)

12 Months Ended

Dec. 31, 2016

Leases [Abstract]

Summary of Revenue from Master Lease

Revenues from the Master Lease for the year ended December 31, 2016 and for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015 are as follows (in thousands and excluding the effect of straight-line rent):

			July 7, 2015
			(Date Operations
	Year Ended		Commenced) to
	December 31, 2016		December 31, 2015
Rental income	$	133,237	$	64,838
Tenant reimbursements		55,823		25,204
Total revenue	$	189,060	$	90,042

Summary of Recapture Rights Exercised by the Company

As of December 31, 2016, the Company had exercised certain recapture rights with respect to 27 properties as follows:

Property	Recapture Type		Notice Date
Braintree, MA		100%	November 2015
Honolulu, HI		100%	December 2015
Memphis, TN		100%	December 2015
San Antonio, TX	Auto center		March 2016
Bowie, MD	Auto center		May 2016
Hagerstown, MD	Auto center		May 2016
Albany, NY	Auto center		May 2016
Fairfax, VA	Partial + autocenter		May 2016
Wayne, NJ	Partial		May 2016
Ft. Wayne, IN	Out parcel		July 2016
Orlando, FL		100%	July 2016
Anderson, SC	Partial		July 2016
West Jordan, UT	Partial		July 2016
Madison, WI	Partial + auto center		July 2016
North Hollywood, CA	Partial		July 2016
Warwick, RI	Auto center		October 2016
Rehoboth Beach, DE	Partial		October 2016
Charleston, SC	Partial		October 2016
West Hartford, CT		100%	October 2016
St. Petersburg, FL		100%	October 2016
Roseville, MI	Partial		November 2016
Troy, MI	Partial		November 2016
Santa Monica, CA		100%	December 2016
Santa Cruz, CA	Partial		December 2016
Guaynabo, PR	Partial		December 2016
Saugus, MA	Partial		December 2016
Carson, CA	Partial		December 2016

Summary of Properties

The 17 properties are as follows:

Property	Square Feet
Cullman, AL		98,500
Sierra Vista, AZ		86,100
Thornton, CO		190,200
Chicago, IL		118,800
Springfield, IL		84,200
Elkhart, IN		86,500
Merrillville, IN		108,300
Houma, LA		96,700
New Iberia, LA		91,700
Alpena, MI		118,200
Manistee, MI		87,800
Sault Sainte Marie, MI		92,700
Kearney, NE		86,500
Deming, NM		96,600
Harlingen, TX		91,700
Yakima, WA		97,300
Riverton, WY		94,800
Total square feet		1,726,600

The 19 properties are as follows:

Property	Square Feet
El Paso, TX		103,657
Paducah, KY		108,244
Henderson, NV		122,823
Jefferson City, MO		92,016
Riverside, CA		94,500
Kissimmee, FL		112,505
Mount Pleasant, PA		83,536
Chapel Hill, OH		187,179
Concord, NC		137,499
Sioux Falls, SD		72,511
Platteville, WI		94,841
Muskogee, OK		87,500
Elkins, WV		94,885
Layton, UT		90,010
Detroit Lakes, MN		79,102
Hopkinsville, KY		70,326
Owensboro, KY		68,334
Leavenworth, KS		76,853
Kenton, OH		96,066
Total square feet		1,872,387

Schedule of Future Rental Revenue Under Non-cancelable Operating Leases

As of December 31, 2016, future base rental revenue under non-cancelable operating leases, excluding extension options and signed leases for which rental payments have not yet commenced, is as follows (in thousands):

2017		164,242
2018		163,598
2019		163,537
2020		162,174
2021		163,442
Thereafter		622,419
	$	1,439,412

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Summary of Dividends Reflected for Federal Income Tax Purposes

The dividends have been reflected as follows for federal income tax purposes:

			July 7, 2015
	Year Ended		(date operations commenced) to
	December 31,		December 31,
	2016		2015
Ordinary income	$	1.00	$	0.50
Return of capital		—		—
Total	$	1.00	$	0.50

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Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Reconciliation of Net Loss and Number of Common Shares Used in Computations of Basic Earnings Per Share

The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.  Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in Operating Partnership.

All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS.

Earnings per share has not been presented for Class B shareholders as they do not have economic rights.

(in thousands except per share amounts)				July 7, 2015
				(Date Operations
	Year Ended			Commenced) to
	December 31, 2016			December 31, 2015
Numerator - Basic and Diluted
Net loss	$	(91,009	)	$	(38,803	)
Net loss attributable to non-controlling interests		39,451			16,465
Net loss attributable to common shareholders	$	(51,558	)	$	(22,338	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		25,497			24,707
Weighted average Class C common shares outstanding		5,919			6,679
Weighted average Class A and Class C common    shares outstanding		31,416			31,386
Net loss per share attributable to Class A and Class C    common shareholders	$	(1.64	)	$	(0.71	)

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Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Restricted Share

The following table summarizes restricted share activity for the grant periods ended December 31, 2016 and December 31, 2015:

						July 7, 2015 (date operations commenced)
	Year Ended December 31, 2016					to December 31, 2015
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		221,484		$	37.18		—		$	—
Restricted shares granted		23,324			46.48		238,387			30.73
Restricted shares vested		(28,460	)		31.18		(16,903	)		29.58
Restricted shares forfeited		—			—		—			—
Unvested restricted shares at end of period		216,348		$	38.98		221,484		$	37.18

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Accounts Payable, Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

Payables And Accruals [Abstract]

Components of Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities (in thousands):

	December 31, 2016		December 31, 2015
Accounts payable and accrued expenses	$	26,463	$	13,793
Accrued real estate taxes		23,942		25,333
Litigation charge		19,000		—
Below-market leases		16,827		18,986
Dividends payable		14,132		27,894
Environmental reserve		11,584		11,824
Deferred maintenance		4,124		10,281
Accrued interest		3,004		2,748
Prepaid rental income		1,979		1,331
Sears Holdings payable		—		8,670
Total accounts payable, accrued expenses and other    liabilities	$	121,055	$	120,860

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Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Summary of Selected Quarterly Financial Data

The following table sets forth the selected quarterly financial data for the Company (in thousands, except per share amounts):

	2016												2015
													July 7 (Date
													Operations
	Quarter Ended			Quarter Ended			Quarter Ended			QuarterEnded			Commenced) to			Quarter Ended
	March 31			June 30			September 30			December 31			September 30			December 31
Total revenue	$	63,004		$	61,867		$	57,607		$	66,196		$	54,063		$	59,508
Operating income (loss)		396			2,765			(22,771	)		(10,837	)		(16,550	)		7,177
Net loss		(14,714	)		(12,565	)		(37,247	)		(26,483	)		(31,853	)		(6,950	)
Net loss attributable to common shareholders		(8,335	)		(7,117	)		(21,102	)		(15,004	)		(18,301	)		(4,037	)
Net loss per share attributable to Class A and    Class C common shareholders - Basic    and diluted		(0.27	)		(0.23	)		(0.67	)		(0.48	)		(0.58	)		(0.13	)
Weighted average Class A and Class C    common shares outstanding - Basic    and diluted		31,391			31,391			31,419			31,418			31,384			31,391

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Organization - Additional Information (Detail) $ in Billions				12 Months Ended
	Jul. 07, 2015 USD ($)	Jun. 11, 2015 USD ($) Property JointVenture RetailFacility	Jun. 03, 2015 shares	Dec. 31, 2016 Property
Organization And Basis Of Presentation [Line Items]
Operations Commenced Date				Jul. 07, 2015
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price | $	$ 2.7	$ 2.7
Number of real estate properties acquired | Property		234
Number of ground leased properties acquired | Property		1
Interests in joint ventures acquired		50.00%
Number of joint venture acquired | JointVenture		3
Number of Wholly Owned Properties not lease back to Sears Holdings | Property				15
Sears Holdings Corporation [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities | RetailFacility		28
Number of retail facilities subject to ground lease | RetailFacility		1
Number of retail facilities subject to lease | RetailFacility		2
Class A Common Shares [Member]
Organization And Basis Of Presentation [Line Items]
Number of shares initially capitalized | shares			100

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Summary of Significant Accounting Policies - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) Property Segment State	Jul. 07, 2015 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Number of reportable segments | Segment		1
Impairment loss on real estate assets	$ 0	$ 0
Impairment loss	0	0
Restricted cash	92,475,000	87,616,000
Prepaid rental income	2,700,000	2,900,000
Unrealized loss on interest rate cap	2,933,000	$ 1,378,000
Number of wholly owned properties acquired | Property		235
Number of states in properties located | State		49
Interest Rate Cap [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest rate caps purchased		$ 5,000,000
Derivative, term of contract		4 years
Notional amount		$ 1,261,000,000
Derivative strike rate		3.50%
Unrealized loss on interest rate cap	2,900,000	$ 1,400,000
Derivative assets, fair value	2,100,000	$ 700,000
Master Lease [Member]
Summary Of Significant Accounting Policies [Line Items]
Right to recapture property space		50.00%
Sears Holdings Corporation [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash			$ 22,609,000
Right to recapture property space		100.00%
Sears Holdings Corporation [Member] | Master Lease [Member]
Summary Of Significant Accounting Policies [Line Items]
Right to recapture property space		100.00%
Restricted Cash Reserves [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	51,300,000	$ 65,500,000
Basic Property Carrying Costs [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	$ 38,500,000	$ 19,200,000
Operating Partnership [Member] | ESL [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent		56.70%

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Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	12 Months Ended
	Dec. 31, 2016
Minimum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	25 years
Minimum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Maximum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Maximum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	15 years

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Acquisitions - Additional Information (Detail) - USD ($) $ in Billions	Jul. 07, 2015	Jun. 11, 2015
Sears Holdings Corporation [Member]
Business Acquisition [Line Items]
Business acquisition fair value, purchase price	$ 2.7	$ 2.7

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Acquisitions - Summary of Purchase Price and Fair Value of Net Assets Acquired (Detail) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
	Jul. 07, 2015	Dec. 31, 2015	Dec. 31, 2016
Business Acquisition [Line Items]
Proceeds from issuance of common stock and non-controlling interest		$ 1,644,042
Less: Offering related costs		(8,212)
Proceeds from issuance of mortgage loans payable		1,161,196
Less: Deferred financing costs		(21,431)	$ (914)
Plus: Restricted cash
Restricted cash		92,475	87,616
Environmental Expenses Reserve [Member]
Plus: Restricted cash
Restricted cash		$ 12,000	$ 11,800
Sears Holdings Corporation [Member]
Business Acquisition [Line Items]
Proceeds from issuance of common stock and non-controlling interest	$ 1,644,042
Less: Offering related costs	(8,212)
Proceeds from issuance of mortgage loans payable	1,161,196
Less: Deferred financing costs	(21,446)
Total sources of funds net of offering and financing costs	2,775,580
Real estate assets acquired
Land	840,563
Buildings and improvements	810,499
In-place leases	595,443
Below-market ground lease	11,766
Above-market leases	9,058
Below-market leases	(20,045)
Investments in unconsolidated joint ventures	429,012
Total fair value of real estate assets acquired	2,676,296
Plus: Restricted cash
Restricted cash	22,609
Less: Assumed liabilities
Real estate taxes payable	(23,277)
Environmental expenses	(12,034)
Deferred maintenance	(10,575)
Total assumed liabilities	(45,886)
Net cash paid for acquisition of real estate and unconsolidated joint ventures	2,653,019
Additional (sources) / uses of cash
Prepaid rent	(26,855)
Initial funding of unfunded construction commitments reserve (restricted cash)	42,470
Initial funding of property carry costs reserve (restricted cash)	32,482
Initial funding of interest expense reserve (restricted cash)	4,924
Acquisition related expenses	18,340
Prepaid interest expense	1,249
Total additional (sources) uses of cash, net	72,610
Remaining excess cash from transaction	49,951
Sears Holdings Corporation [Member] | Environmental Expenses Reserve [Member]
Plus: Restricted cash
Restricted cash	12,034
Sears Holdings Corporation [Member] | Deferred Maintenance Reserve [Member]
Plus: Restricted cash
Restricted cash	$ 10,575

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Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	$ 578,795	$ 464,399
Identified intangible liability, net of accumulated amortization	18,986	16,827
Amortization of below-market leases, net of above-market leases	500	900
Additional property expense	100	200
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	558,643	445,907
Amortization expense of intangible assets	$ 36,800	$ 110,200

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 616,267	$ 613,601
Accumulated Amortization	(37,472)	(149,202)
Balance	$ 578,795	464,399
Wtd.Avg. Remaining Amortization Period	9 years 4 months 24 days
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 595,443	592,871
Accumulated Amortization	(36,800)	(146,964)
Balance	$ 558,643	445,907
Wtd.Avg. Remaining Amortization Period	8 years 4 months 24 days
Below-Market Ground Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 11,766	11,766
Accumulated Amortization	(102)	(305)
Balance	$ 11,664	11,461
Wtd.Avg. Remaining Amortization Period	57 years 6 months
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 9,058	8,964
Accumulated Amortization	(570)	(1,933)
Balance	$ 8,488	$ 7,031
Wtd.Avg. Remaining Amortization Period	8 years 9 months 18 days

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Below Market Lease Net [Abstract]
Gross Liability	$ 20,045	$ 20,011
Accumulated Amortization	(1,059)	(3,184)
Balance	$ 18,986	$ 16,827
Wtd. Avg. Remaining Amortization Period	11 years 4 months 24 days

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Lease Intangible Assets and Liabilities - Schedule of Estimated Annual Amortization of Below Market Leases (Detail) - Above-Market Leases, Net [Member] $ in Thousands	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets [Line Items]
2017	$ (970)
2018	(970)
2019	(943)
2020	(808)
2021	$ (792)

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Lease Intangible Assets and Liabilities - Schedule of Estimated Amortization for Below-Market Ground Leases (Detail) - Leases Acquired In-Place Market Adjustment [Member] $ in Thousands	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets [Line Items]
2017	$ 203
2018	203
2019	203
2020	203
2021	$ 203

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Lease Intangible Assets and Liabilities - Schedule of Estimated Annual Amortization of Acquired In Place Leases (Detail) - In-Place Leases, Net [Member] $ in Thousands	Dec. 31, 2016 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
2017	$ 102,380
2018	61,988
2019	59,823
2020	58,088
2021	$ 52,248

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Investments in Unconsolidated Joint Ventures - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) Location
Income Statement Equity Method Investments [Line Items]
Joint venture impairment charges | $	$ 0	$ 0
General Growth Properties, Inc. [Member]
Income Statement Equity Method Investments [Line Items]
Joint venture plans to recapture property space | Location		5
Recapture property space, percentage		100.00%

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Investments in Unconsolidated Joint Ventures - Summary of Company's Investments in Unconsolidated Joint Ventures (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) ft² Property
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	31
Total GLA | ft²	5,454
Initial Investment | $	$ 429,012
General Growth Properties, Inc. [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	12
Total GLA | ft²	2,167
Initial Investment | $	$ 165,000
Seritage % Ownership	50.00%
The Macerich Company [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	9
Total GLA | ft²	1,573
Initial Investment | $	$ 150,000
Seritage % Ownership	50.00%
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	10
Total GLA | ft²	1,714
Initial Investment | $	$ 114,012
Seritage % Ownership	50.00%

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Investments in Unconsolidated Joint Ventures - Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
ASSETS
Land	$ 214,726	$ 214,109
Buildings and improvements	603,265	598,978
Accumulated depreciation	(24,111)	(56,324)
Investment in real estate, gross	793,880	756,763
Construction in progress	1,481	48,885
Net investment in real estate	795,361	805,648
Cash and cash equivalents	19,903	3,434
Tenant and other receivables, net	4,990	6,133
Other assets, net	30,506	38,646
Total assets	850,760	853,861
LIABILITIES AND MEMBERS INTERESTS
Accounts payable, accrued expenses and other liabilities	13,973	14,177
Total liabilities	13,973	14,177
Members Interest
Additional paid in capital	823,923	830,389
Retained earnings	12,864	9,295
Total members interest	836,787	839,684
Total liabilities and members interest	850,760	853,861
Total revenue	35,150	66,417
Property operating expenses	(7,339)	(12,787)
Depreciation and amortization	(17,975)	(42,233)
Operating income	9,836	11,397
Other expenses	(292)	(2,105)
Net income	9,544	9,292
Equity in income of unconsolidated joint ventures	$ 4,772	$ 4,646

XML

Leases - Additional Information (Detail) $ in Thousands				6 Months Ended	12 Months Ended
	Mar. 01, 2017 USD ($) ft² Property	Jul. 06, 2015 Lease Option	Jun. 11, 2015 Property	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) ft² Property	Jul. 07, 2015
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Base rent paid by Sears Holdings and subsidiaries under master lease				$ 100	$ 200
Number of real estate properties acquisition exercised | Property					27
Tenant reimbursements				26,926	$ 62,253
Additional rent based on percentage of tenants' sales				100	$ 100
Number of properties subject to ground lease | Property					1
Rent expense				$ 100	$ 200
Operating leases expiration year				2073
Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space					100.00%
Number of real estate properties wholly-owned | Property			234
Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease term		10 years
Number of options for renewal of lease | Option		3
Renewal period of leases		5 years
Final option renewal period		4 years
Base rent paid by Sears Holdings and subsidiaries under master lease				$ 134,000	$ 134,000
Number of renewal term that will be increased | Lease		2
Percentage of increase annual lease rent						2.00%
Right to recapture property space					50.00%
Number of real estate properties wholly-owned | Property					224
Lease termination, description					While the Company will be permitted to exercise its recapture rights all at once or in stages as to any particular property, it will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.
Number of real estate properties wholly-owned | Property					50
Tenant reimbursements				$ 25,204	$ 55,823
Master Lease [Member] | Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of options for renewal of lease | Option		1
Right to recapture property space					100.00%
Number of real estate properties wholly-owned | Property					21
Lease termination, description					The lease termination payment is calculated as the greater of an amount specified at the time the Company entered into the Master Lease with Sears Holdings and an amount equal to 10 times the adjusted EBITDA attributable to such space within the Sears Holdings main store which is not attributable to the space subject to the separate 50% recapture right discussed above for the 12-month period ending at the end of the fiscal quarter ending immediately prior to recapturing such space.
Percentage of reduction of fixed rent under master lease					20.00%
Lease termination notice period					90 days
Master Lease [Member] | Sears Holdings Corporation [Member] | Lease Terminations [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Base rent paid by Sears Holdings and subsidiaries under master lease					$ 6,000
Number of unprofitable stores to terminate | Property					17
Gross leasable area | ft²					1,726,600
Lease termination fees paid					$ 10,000
Master Lease [Member] | Sears Holdings Corporation [Member] | Lease Terminations [Member] | Subsequent Event [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Base rent paid by Sears Holdings and subsidiaries under master lease	$ 5,900
Number of unprofitable stores to terminate | Property	19
Gross leasable area | ft²	1,872,387

XML

Leases - Summary of Revenue from Master Lease (Detail) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2016
Property Subject to or Available for Operating Lease [Line Items]
Rental income							$ 86,645	$ 186,421
Tenant reimbursements							26,926	62,253
Total revenue	$ 66,196	$ 57,607	$ 61,867	$ 63,004	$ 59,508	$ 54,063	113,571	248,674
Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Rental income							64,838	133,237
Tenant reimbursements							25,204	55,823
Total revenue							$ 90,042	$ 189,060

XML

Leases - Summary of Recapture Rights Exercised by the Company (Detail)	12 Months Ended
	Dec. 31, 2016
Braintree, MA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2015-11
Honolulu, HI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2015-12
Memphis, TN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2015-12
San Antonio, TX [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date	2016-03
Bowie, MD [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date	2016-05
Hagerstown, MD [member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date	2016-05
Albany, NY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date	2016-05
Fairfax, VA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial + auto center
Notice Date	2016-05
Wayne, NJ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-05
Ft. Wayne, IN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Out parcel
Notice Date	2016-07
Orlando, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2016-07
Anderson, SC [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-07
West Jordan, UT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-07
Madison, WI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial + auto center
Notice Date	2016-07
North Hollywood, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-07
Warwick, RI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Auto center
Notice Date	2016-10
Rehoboth Beach, DE [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-10
Charleston, SC [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-10
West Hartford, CT [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2016-10
St. Petersburg, FL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2016-10
Roseville, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-11
Troy, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-11
Santa Monica, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type, Percentage	100.00%
Notice Date	2016-12
Santa Cruz, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-12
Guaynabo, PR [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-12
Saugus, MA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-12
Carson, CA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Recapture Type	Partial
Notice Date	2016-12

XML

Leases - Summary of Properties (Detail) - Lease Terminations [Member] - Master Lease [Member] - Sears Holdings Corporation [Member] - ft²	Mar. 01, 2017	Dec. 31, 2016
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		1,726,600
Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	1,872,387
Cullman, AL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		98,500
Sierra Vista, AZ [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		86,100
Thornton, CO [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		190,200
Chicago, IL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		118,800
Springfield, IL [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		84,200
Elkhart, IN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		86,500
Merrillville, IN [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		108,300
Houma, LA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		96,700
New Iberia, LA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		91,700
Alpena, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		118,200
Manistee, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		87,800
Sault Sainte Marie, MI [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		92,700
Kearney, NE [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		86,500
Deming, NM [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		96,600
Harlingen, TX [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		91,700
Yakima, WA [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		97,300
Riverton, WY [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area		94,800
El Paso, TX [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	103,657
Paducah, KY [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	108,244
Henderson, NV [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	122,823
Jefferson City, MO [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	92,016
Riverside, CA [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,500
Kissimmee, FL [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	112,505
Mount Pleasant, PA [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	83,536
Chapel Hill, OH [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	187,179
Concord, NC [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	137,499
Sioux Falls, SD [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	72,511
Platteville, WI [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,841
Muskogee, OK [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	87,500
Elkins, WV [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	94,885
Layton, UT [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	90,010
Detroit Lakes, MN [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	79,102
Hopkinsville, KY [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	70,326
Owensboro K Y | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	68,334
Leavenworth, KS [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	76,853
Kenton, OH [Member] | Subsequent Event [Member]
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area	96,066

XML

Leases - Schedule of Future Rental Revenue Under Non-cancelable Operating Leases (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
Leases [Abstract]
2017	$ 164,242
2018	163,598
2019	163,537
2020	162,174
2021	163,442
Thereafter	622,419
Total operating leases	$ 1,439,412

XML

Mortgage Loans Payable - Additional Information (Detail) - USD ($)	1 Months Ended	6 Months Ended	12 Months Ended	18 Months Ended
	Nov. 30, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2016	Jul. 07, 2015
Mortgage Loans on Real Estate [Line Items]
Amount transferred to redevelopment project reserve	$ 30,000,000
Amount to be transferred to redevelopment project reserve on monthly basis	$ 3,300,000
Principal terms of amendments			Company has (i) posted $30.0 million, and will post $3.3 million on a monthly basis, to a redevelopment project reserve account, which amounts may be used by the Company to fund redevelopment activity and (ii) extended the spread maintenance provision for prepayment of the loan by two months through March 9, 2018 (with the spread maintenance premium for the second month at a reduced amount).
Minimum net worth			$ 1,000,000,000	$ 1,000,000,000
Minimum liquidity			50,000,000	50,000,000
Future Funding Facility [Member]
Mortgage Loans on Real Estate [Line Items]
Principal amount outstanding			20,000,000	20,000,000
Amount available under funding facility			80,000,000	80,000,000
Mortgage Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Principal amount outstanding			$ 1,161,000,000	1,161,000,000
Mortgage loan agreement, description			The Loan Agreements contain customary covenants for a real estate financing, including restrictions that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds.
Maximum debt yield percentage			11.00%
Unamortized balance of company's debt issuance costs		$ 18,800,000	$ 14,300,000	14,300,000
Mortgage Loans [Member] | Future Funding Facility [Member]
Mortgage Loans on Real Estate [Line Items]
Debt issuance and other costs		$ 21,400,000	$ 900,000	$ 22,300,000
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Expiration date			Jul. 31, 2019
Interest rate description			Borrowings under the Mortgage Loans bear interest at the London Interbank Offered Rates (“LIBOR”) plus, as of December 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis.
Basis spread on variable rate			4.65%
Frequency of interest payment			Monthly
Weighted average interest rates		4.96%
Early extinguishment of debt			Mar. 09, 2018
Maturity description			The Loan Agreements contain customary covenants for a real estate financing, including restrictions that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based upon certain measures of the Company’s and Sears Holdings’ financial and operating performance, including (a) where the “Debt Yield” (the ratio of net operating income for the mortgage borrowers to their debt) is less than 11.0%, (b) if the performance of Sears Holdings at the stores subject to the Master Lease with Sears Holdings fails to meet specified rent ratio thresholds, (c) if the Company fails to meet specified tenant diversification tests and (d) upon the occurrence of a bankruptcy or insolvency action with respect to Sears Holdings or if there is a payment default under the Master Lease with Sears Holdings, in each case, subject to cure rights, including providing specified amounts of cash collateral or satisfying tenant diversification thresholds. The Loan Agreements contain a yield maintenance provision for the early extinguishment of the debt before March 9, 2018.
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member] | Term Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Loan, face amount					$ 1,161,000,000
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member] | Future Funding Facility [Member]
Mortgage Loans on Real Estate [Line Items]
Loan, face amount					$ 100,000,000
Weighted average interest rates			5.24%

XML

Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Tax Contingency [Line Items]
Uncertain tax positions	$ 0	$ 0
Minimum [Member]
Income Tax Contingency [Line Items]
Distribution of taxable income to qualify as REIT, percent	90.00%

XML

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized loss related to change in fair value	$ 2,933	$ 1,378
Fair Value, Inputs, Level 2 [Member] | Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgages payable, fair value	1,200,000	1,200,000
Interest Rate Cap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, fair value	2,100	700
Unrealized loss related to change in fair value	2,900	1,400
Interest Rate Cap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, fair value	$ 2,100	$ 700

XML

Commitments and Contingencies - Additional Information (Detail) $ in Thousands	1 Months Ended			12 Months Ended
	Oct. 31, 2016 USD ($)	Jun. 30, 2015 Lawsuit	May 31, 2015 Lawsuit	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jul. 07, 2015 USD ($)
Loss Contingencies [Line Items]
Restricted cash				$ 87,616	$ 92,475
Number of Sears Holdings shareholders filed lawsuits | Lawsuit		4	4
Litigation settlement, amount	$ 19,000
Litigation charge				19,000
Sears Holdings Corporation [Member]
Loss Contingencies [Line Items]
Restricted cash						$ 22,609
Litigation settlement, amount	$ 40,000
Environmental Expenses Reserve [Member]
Loss Contingencies [Line Items]
Restricted cash				$ 11,800	$ 12,000
Environmental Expenses Reserve [Member] | Sears Holdings Corporation [Member]
Loss Contingencies [Line Items]
Restricted cash						$ 12,034

XML

Related Party Disclosure - Additional Information (Detail) - USD ($)			6 Months Ended	12 Months Ended
	Feb. 28, 2017	Jul. 07, 2015	Dec. 31, 2015	Dec. 31, 2016	Mar. 01, 2017	Feb. 23, 2017
Transaction Services Agreement [Member]
Schedule of Other Related Party Transactions [Line Items]
Transition service agreement period		18 months
Transition service agreement expiration date Date				Jan. 17, 2017
Transition service agreement fees			$ 200,000	$ 100,000
Unsecured Term Loan [Member]
Schedule of Other Related Party Transactions [Line Items]
Line of credit, maturity date				Dec. 31, 2017
Line of credit facility, maximum				$ 200,000,000
Debt instrument, interest rate terms				The principal amount of loans outstanding under the Unsecured Term Loan will bear a base annual interest rate of 6.50%. If a cash flow sweep period were to occur and be continuing under the Company’s Mortgage Loan Agreement (i) the interest rate on any outstanding advances would increase from and after such date by 1.5% per annum above the base interest rate and (ii) the interest rate on any advances made after such date would increase by 3.5% per annum above the base interest rate.
Maximum net worth required for loan documentation				$ 1,000,000,000
Unsecured Term Loan [Member] | Mortgage Loan Agreement [Member]
Schedule of Other Related Party Transactions [Line Items]
Debt instrument, base annual interest rate				6.50%
Unsecured Term Loan [Member] | Minimum [Member] | Mortgage Loan Agreement [Member]
Schedule of Other Related Party Transactions [Line Items]
Debt instrument, base interest rate period one				1.50%
Debt instrument, base interest rate period two				3.50%
Unsecured Term Loan [Member] | Maximum [Member]
Schedule of Other Related Party Transactions [Line Items]
Maximum leverage ratio				60.00%
Unsecured Term Loan [Member] | April 30, 2017 [Member]
Schedule of Other Related Party Transactions [Line Items]
Line of credit facility, maximum				$ 100,000,000
Unsecured Term Loan [Member] | May 1, 2017 [Member]
Schedule of Other Related Party Transactions [Line Items]
Line of credit facility, maximum				150,000,000
Unsecured Term Loan [Member] | September 1, 2017 [Member]
Schedule of Other Related Party Transactions [Line Items]
Line of credit facility, maximum				$ 200,000,000
Operating Partnership [Member] | Unsecured Term Loan [Member]
Schedule of Other Related Party Transactions [Line Items]
Line of credit, maturity date				Feb. 28, 2017
Default interest rate on overdue amounts excess of base interest rate				1.50%
Operating Partnership [Member] | Unsecured Term Loan [Member] | Subsequent Event [Member]
Schedule of Other Related Party Transactions [Line Items]
Principal amount outstanding						$ 200,000,000
Upfront commitment fee	$ 1,000,000
Additional commitment fee	$ 1,000,000
Number of days due to pay commitment fee after closing date	90 days
Operating Partnership [Member] | Unsecured Term Loan [Member] | Subsequent Event [Member] | Minimum [Member]
Schedule of Other Related Party Transactions [Line Items]
Principal amount of commitment fee percentage	33.30%
Operating Partnership [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party				43.30%
Operating Partnership [Member] | ESL [Member] | Subsequent Event [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party					39.60%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Beneficiary Ownership interest percentage held by related party			49.60%	53.20%
Ownership interest percentage held by related party			43.40%	43.30%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member] | Class A Common Shares [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party			3.90%	3.70%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member] | Class B Non-Economic Common Shares [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party			100.00%	100.00%

XML

Non-controlling Interests - Additional Information (Detail) - Operating Partnership [Member] - shares	Mar. 01, 2017	Dec. 31, 2016
Subsequent Event [Member]
Noncontrolling Interest [Line Items]
Conversion of units into class A shares	2,094,821
ESL [Member]
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent		56.70%
Ownership interest percentage held by related party		43.30%
ESL [Member] | Subsequent Event [Member]
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	60.40%
Ownership interest percentage held by related party	39.60%

XML

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands									6 Months Ended	12 Months Ended
	Mar. 01, 2017	Feb. 28, 2017	Nov. 02, 2016	Aug. 02, 2016	May 03, 2016	Mar. 08, 2016	Dec. 17, 2015	Jul. 07, 2015	Dec. 31, 2015	Dec. 31, 2016
Class of Stock [Line Items]
Stock issuance cost									$ 8,212
Cash dividend declared									$ 0.50	$ 1.00
Date dividends to be paid			Jan. 12, 2017	Oct. 13, 2016	Jul. 14, 2016	Apr. 14, 2016	Jan. 14, 2016
Dividends payable, date of record			Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Subsequent Event [Member]
Class of Stock [Line Items]
Date dividends to be paid		Apr. 13, 2017
Dividends payable, date of record		Mar. 31, 2017
Operating Partnership [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Conversion of units into class A shares	2,094,821
Class A Common Shares [Member]
Class of Stock [Line Items]
Common shares issued								22,332,037	24,817,842	25,843,251
Common shares price per share								$ 29.58
Aggregate proceeds from issuance of common shares								$ 660,600
Stock issuance cost								$ 8,200
Common shares, par value								$ 0.01	$ 0.01	$ 0.01
Cash dividend declared			$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.50		$ 0.50	$ 1.00
Dividends payable, date of record							Dec. 31, 2015
Class A Common Shares [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Cash dividend declared		$ 0.25
Class A Common Shares [Member] | General Growth Properties, Inc. [Member]
Class of Stock [Line Items]
Common shares issued								1,125,760
Common shares price per share								$ 29.58
Aggregate proceeds from issuance of common shares								$ 33,300
Class A Common Shares [Member] | Simon Property Group Inc [Member]
Class of Stock [Line Items]
Common shares issued								1,125,760
Common shares price per share								$ 29.58
Aggregate proceeds from issuance of common shares								$ 33,300
Class B Non-Economic Common Shares [Member]
Class of Stock [Line Items]
Common shares, par value								$ 0.01
Class B Non-Economic Common Shares [Member] | ESL [Member]
Class of Stock [Line Items]
Common shares issued								1,589,020
Aggregate proceeds from issuance of common shares								$ 900
Class B Non-Economic Common Shares [Member] | Subsequent Event [Member] | ESL [Member]
Class of Stock [Line Items]
Common shares surrendered	137,684
Class C Non Voting Common Shares [Member]
Class of Stock [Line Items]
Common shares issued								6,790,635
Common shares price per share								$ 29.58
Aggregate proceeds from issuance of common shares								$ 200,900
Common shares, par value								$ 0.01
Common shares converted to Class A common shares									17,450	1,018,500
Class C Common Shares [Member]
Class of Stock [Line Items]
Common shares issued									6,773,185	5,754,685
Common shares, par value									$ 0.01	$ 0.01
Cash dividend declared			$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.50		$ 0.50	$ 1.00
Class C Common Shares [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Cash dividend declared		$ 0.25

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Shareholders' Equity - Summary of Dividends Reflected for Federal Income Tax Purposes (Detail) - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Dividends Payable [Line Items]
Total	$ 0.50	$ 1.00
Federal Income Tax [Member] | Dividend Declared [Member]
Dividends Payable [Line Items]
Ordinary income	0.50	1.00
Return of capital	0	0
Total	$ 0.50	$ 1.00

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Earnings per Share - Reconciliation of Net Loss and Number of Common Shares Used in Computations of Basic Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						6 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2016
Numerator - Basic and Diluted
Net loss	$ (26,483)	$ (37,247)	$ (12,565)	$ (14,714)	$ (6,950)	$ (31,853)	$ (38,803)	$ (91,009)
Net loss attributable to non-controlling interests							16,465	39,451
Net loss attributable to common shareholders	$ (15,004)	$ (21,102)	$ (7,117)	$ (8,335)	$ (4,037)	$ (18,301)	$ (22,338)	$ (51,558)
Denominator - Basic and Diluted
Weighted average common shares outstanding	31,418	31,419	31,391	31,391	31,391	31,384	31,386	31,416
Net loss per share attributable to Class A and Class C common shareholders							$ (0.71)	$ (1.64)
Class A Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding							24,707	25,497
Class C Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding							6,679	5,919

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Earnings Per Share - Additional Information (Detail) - shares	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Restricted Share [Member]
Earning Per Share [Line Items]
Non-vested restricted stock outstanding	216,348	221,484	0

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Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016	Jul. 07, 2015
Time Based Restricted Shares and Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Restricted Share [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 6.4	$ 8.2
Unrecognized compensation costs, weighted average expected recognition period	2 years 9 months 18 days	2 years 8 months 12 days
Restricted Share [Member] | General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized	$ 0.9	$ 1.1
Seritage Growth Properties 2015 Share Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance			3,250,000

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Stock Based Compensation - Summary of Restricted Share (Detail) - Restricted Share [Member] - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares at beginning of period		221,484
Restricted shares granted	238,387	23,324
Restricted shares vested	(16,903)	(28,460)
Restricted shares forfeited	0	0
Unvested restricted shares at end of period	221,484	216,348
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period	$ 0	$ 37.18
Weighted-Average Grant Date Fair Value, Restricted shares granted	30.73	46.48
Weighted-Average Grant Date Fair Value, Restricted shares vested	29.58	31.18
Weighted-Average Grant Date Fair Value, Restricted shares forfeited	0	0
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period	$ 37.18	$ 38.98

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Accounts Payable, Accrued Expenses and Other Liabilities - Components of Accounts Payable, Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Payables And Accruals [Abstract]
Accounts payable and accrued expenses	$ 26,463	$ 13,793
Accrued real estate taxes	23,942	25,333
Litigation charge	19,000
Below-market leases	16,827	18,986
Dividends payable	14,132	27,894
Environmental reserve	11,584	11,824
Deferred maintenance	4,124	10,281
Accrued interest	3,004	2,748
Prepaid rental income	1,979	1,331
Sears Holdings payable		8,670
Total accounts payable, accrued expenses and other liabilities	$ 121,055	$ 120,860

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Quarterly Financial Information (unaudited) - Summary of Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						6 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Total revenue	$ 66,196	$ 57,607	$ 61,867	$ 63,004	$ 59,508	$ 54,063	$ 113,571	$ 248,674
Operating income (loss)	(10,837)	(22,771)	2,765	396	7,177	(16,550)	(9,373)	(30,447)
Net loss	(26,483)	(37,247)	(12,565)	(14,714)	(6,950)	(31,853)	(38,803)	(91,009)
Net loss attributable to common shareholders	$ (15,004)	$ (21,102)	$ (7,117)	$ (8,335)	$ (4,037)	$ (18,301)	$ (22,338)	$ (51,558)
Net loss per share attributable to Class A and Class C common shareholders – Basic and diluted	$ (0.48)	$ (0.67)	$ (0.23)	$ (0.27)	$ (0.13)	$ (0.58)	$ (0.71)	$ (1.64)
Weighted average Class A and Class C common shares outstanding - Basic and diluted	31,418	31,419	31,391	31,391	31,391	31,384	31,386	31,416

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Schedule III - Real Estate and Accumulated Depreciation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Jul. 07, 2015
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 840,563
Acquisition Costs, Buildings and Improvements	810,499
Accounts payable and accrued expenses	26,463	$ 13,793
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	84,372
Gross Amount at Which Carried at Close of Period , Land	840,021
Gross Amount at Which Carried at Close of Period, Building and Improvements	894,871
Total	1,734,892	1,668,351	$ 1,651,062
Accumulated Depreciation	(89,940)	$ (29,076)	$ 0
Costs Capitalized Subsequent to Acquisition, Land	(542)
Construction in Process [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	55,208
Gross Amount at Which Carried at Close of Period, Building and Improvements	55,208
Total	55,208
Costs Capitalized Subsequent to Acquisition, Land	0
The Mall at Sears - Anchorage, AK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	11,517
Acquisition Costs, Buildings and Improvements	11,729
Accounts payable and accrued expenses	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	819
Gross Amount at Which Carried at Close of Period , Land	11,517
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,548
Total	24,065
Accumulated Depreciation	$ (1,267)
Date Acquired	2015-07
Freestanding - Cullman, AL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 947
Acquisition Costs, Buildings and Improvements	846
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	947
Gross Amount at Which Carried at Close of Period, Building and Improvements	846
Total	1,793
Accumulated Depreciation	$ (117)
Date Acquired	2015-07
McCain Mall - North Little Rock, AR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,288
Acquisition Costs, Buildings and Improvements	2,881
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,288
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,881
Total	4,169
Accumulated Depreciation	$ (447)
Date Acquired	2015-07
Freestanding - Russellville, AR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 318
Acquisition Costs, Buildings and Improvements	1,270
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	318
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,270
Total	1,588
Accumulated Depreciation	$ (150)
Date Acquired	2015-07
Flagstaff Mall - Flagstaff, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 932
Acquisition Costs, Buildings and Improvements	2,179
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	932
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,179
Total	3,111
Accumulated Depreciation	$ (216)
Date Acquired	2015-07
Superstition Springs - Mesa, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,661
Acquisition Costs, Buildings and Improvements	2,559
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	2,661
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,559
Total	5,220
Accumulated Depreciation	$ (337)
Date Acquired	2015-07
Shopping Center - Peoria, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,204
Acquisition Costs, Buildings and Improvements	509
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,204
Gross Amount at Which Carried at Close of Period, Building and Improvements	509
Total	1,713
Accumulated Depreciation	$ (196)
Date Acquired	2015-07
Desert Sky Mall - Phoenix, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,605
Acquisition Costs, Buildings and Improvements	2,448
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	2,605
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,448
Total	5,053
Accumulated Depreciation	$ (293)
Date Acquired	2015-07
Freestanding - Phoenix, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 568
Acquisition Costs, Buildings and Improvements	1,088
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	568
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,088
Total	1,656
Accumulated Depreciation	$ (215)
Date Acquired	2015-07
Prescott Gateway Mall - Prescott, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,071
Acquisition Costs, Buildings and Improvements	835
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,071
Gross Amount at Which Carried at Close of Period, Building and Improvements	835
Total	1,906
Accumulated Depreciation	$ (183)
Date Acquired	2015-07
The Mall at Sierra Vista - Sierra Vista, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,252
Acquisition Costs, Buildings and Improvements	1,791
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,252
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,791
Total	3,043
Accumulated Depreciation	$ (177)
Date Acquired	2015-07
Freestanding - Sierra Vista, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 938
Acquisition Costs, Buildings and Improvements	1,736
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	938
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,736
Total	2,674
Accumulated Depreciation	$ (266)
Date Acquired	2015-07
Park Place - Tucson, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,207
Acquisition Costs, Buildings and Improvements	3,458
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	5,207
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,458
Total	8,665
Accumulated Depreciation	$ (406)
Date Acquired	2015-07
Southgate Mall - Yuma, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,485
Acquisition Costs, Buildings and Improvements	1,596
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,485
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,596
Total	3,081
Accumulated Depreciation	$ (272)
Date Acquired	2015-07
Kmart Center - Antioch, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,594
Acquisition Costs, Buildings and Improvements	2,525
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,594
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,525
Total	4,119
Accumulated Depreciation	$ (245)
Date Acquired	2015-07
Big Bear Lake Shopping Center - Big Bear Lake, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,664
Acquisition Costs, Buildings and Improvements	2,945
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	3,664
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,945
Total	6,609
Accumulated Depreciation	$ (257)
Date Acquired	2015-07
Southbay Pavilion - Carson, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 11,476
Acquisition Costs, Buildings and Improvements	5,223
Accounts payable and accrued expenses	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	7
Gross Amount at Which Carried at Close of Period , Land	11,476
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,230
Total	16,706
Accumulated Depreciation	$ (574)
Date Acquired	2015-07
Chula Vista Center - Chula Vista, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 7,315
Acquisition Costs, Buildings and Improvements	6,834
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	7,315
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,834
Total	14,149
Accumulated Depreciation	$ (586)
Date Acquired	2015-07
Sunrise Mall - Citrus Heights, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,778
Acquisition Costs, Buildings and Improvements	2,088
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	3,778
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,088
Total	5,866
Accumulated Depreciation	$ (707)
Date Acquired	2015-07
Freestanding - Delano, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,905
Acquisition Costs, Buildings and Improvements	2,208
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,905
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,208
Total	4,113
Accumulated Depreciation	$ (263)
Date Acquired	2015-07
Parkway Plaza - El Cajon, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 10,573
Acquisition Costs, Buildings and Improvements	2,883
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	10,573
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,883
Total	13,456
Accumulated Depreciation	$ (647)
Date Acquired	2015-07
Imperial Valley Mall - El Centro, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,877
Acquisition Costs, Buildings and Improvements	3,977
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	3,877
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,977
Total	7,854
Accumulated Depreciation	$ (403)
Date Acquired	2015-07
Solano - Fairfield, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,679
Acquisition Costs, Buildings and Improvements	1,366
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	3,679
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,366
Total	5,045
Accumulated Depreciation	$ (195)
Date Acquired	2015-07
Florin Mall - Florin, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,022
Acquisition Costs, Buildings and Improvements	1,366
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,022
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,366
Total	2,388
Accumulated Depreciation	$ (306)
Date Acquired	2015-07
Manchester Mall - Fresno, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,370
Acquisition Costs, Buildings and Improvements	2,000
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,370
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,000
Total	3,370
Accumulated Depreciation	$ (577)
Date Acquired	2015-07
Mill Creek Marketplace - McKinleyville, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,354
Acquisition Costs, Buildings and Improvements	1,655
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	1,354
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,655
Total	3,009
Accumulated Depreciation	$ (233)
Date Acquired	2015-07
Merced Mall - Merced, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,534
Acquisition Costs, Buildings and Improvements	1,604
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	2,534
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,604
Total	4,138
Accumulated Depreciation	$ (337)
Date Acquired	2015-07
Montclair Plaza - Montclair, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,498
Acquisition Costs, Buildings and Improvements	2,119
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	2,498
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,119
Total	4,617
Accumulated Depreciation	$ (144)
Date Acquired	2015-07
Moreno Valley Mall - Moreno Valley, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,898
Acquisition Costs, Buildings and Improvements	3,407
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	3,898
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,407
Total	7,305
Accumulated Depreciation	$ (394)
Date Acquired	2015-07
New Park Mall - Newark, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,312
Acquisition Costs, Buildings and Improvements	3,268
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	4,312
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,268
Total	7,580
Accumulated Depreciation	$ (475)
Date Acquired	2015-07
Valley Plaza - North Hollywood, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 8,049
Acquisition Costs, Buildings and Improvements	3,172
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	8,049
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,172
Total	11,221
Accumulated Depreciation	$ (205)
Date Acquired	2015-07
Northridge Fashion Center - Northridge, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,402
Acquisition Costs, Buildings and Improvements	3,466
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	5,402
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,466
Total	8,868
Accumulated Depreciation	$ (412)
Date Acquired	2015-07
Palm Desert - Palm Desert, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,473
Acquisition Costs, Buildings and Improvements	1,705
Accounts payable and accrued expenses	(542)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(169)
Gross Amount at Which Carried at Close of Period , Land	4,931
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,536
Total	6,467
Accumulated Depreciation	$ (279)
Date Acquired	2015-07
Ramona Station Ramona CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 7,239
Acquisition Costs, Buildings and Improvements	1,452
Accounts payable and accrued expenses	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	16
Gross Amount at Which Carried at Close of Period , Land	7,239
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,468
Total	8,707
Accumulated Depreciation	$ (324)
Date Acquired	2015-07
Freestanding - Riverside, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,397
Acquisition Costs, Buildings and Improvements	4,407
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	4,397
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,407
Total	8,804
Accumulated Depreciation	$ (620)
Date Acquired	2015-07
Freestanding - Riverside, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,670
Acquisition Costs, Buildings and Improvements	2,489
Accounts payable and accrued expenses	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	54
Gross Amount at Which Carried at Close of Period , Land	2,670
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,543
Total	5,213
Accumulated Depreciation	$ (334)
Date Acquired	2015-07
Galleria at Roseville - Roseville, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,848
Acquisition Costs, Buildings and Improvements	3,215
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	4,848
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,215
Total	8,063
Accumulated Depreciation	$ (331)
Date Acquired	2015-07
Northridge Mall - Salinas, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,644
Acquisition Costs, Buildings and Improvements	4,394
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	2,644
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,394
Total	7,038
Accumulated Depreciation	$ (547)
Date Acquired	2015-07
Inland Center - San Bernardino, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,131
Acquisition Costs, Buildings and Improvements	2,066
Accounts payable and accrued expenses	0
Gross Amount at Which Carried at Close of Period , Land	4,131
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,066
Total	6,197
Accumulated Depreciation	$ (385)
Date Acquired	2015-07
Shops at Tanforan - San Bruno, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 7,854
Acquisition Costs, Buildings and Improvements	4,642
Gross Amount at Which Carried at Close of Period , Land	7,854
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,642
Total	12,496
Accumulated Depreciation	$ (528)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
University Town Centre - San Diego, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	22,445
Acquisition Costs, Buildings and Improvements	14,094
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,738
Gross Amount at Which Carried at Close of Period , Land	22,445
Gross Amount at Which Carried at Close of Period, Building and Improvements	15,832
Total	38,277
Accumulated Depreciation	$ (873)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Eastridge Mall - San Jose, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,531
Acquisition Costs, Buildings and Improvements	2,356
Gross Amount at Which Carried at Close of Period , Land	1,531
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,356
Total	3,887
Accumulated Depreciation	$ (722)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Capitola Mall - Santa Cruz, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,338
Acquisition Costs, Buildings and Improvements	4,803
Gross Amount at Which Carried at Close of Period , Land	4,338
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,803
Total	9,141
Accumulated Depreciation	$ (391)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Santa Maria Town Center - Santa Maria, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,967
Acquisition Costs, Buildings and Improvements	2,635
Gross Amount at Which Carried at Close of Period , Land	3,967
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,635
Total	6,602
Accumulated Depreciation	$ (225)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Santa Monica, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	43,916
Acquisition Costs, Buildings and Improvements	3,973
Gross Amount at Which Carried at Close of Period , Land	43,916
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,973
Total	47,889
Accumulated Depreciation	$ (251)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Santa Paula, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,002
Acquisition Costs, Buildings and Improvements	1,147
Gross Amount at Which Carried at Close of Period , Land	2,002
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,147
Total	3,149
Accumulated Depreciation	$ (249)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Promenade in Temecula - Temecula, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,098
Acquisition Costs, Buildings and Improvements	2,214
Gross Amount at Which Carried at Close of Period , Land	6,098
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,214
Total	8,312
Accumulated Depreciation	$ (401)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Janss Marketplace - Thousand Oaks, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	9,853
Acquisition Costs, Buildings and Improvements	14,785
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,768
Gross Amount at Which Carried at Close of Period , Land	9,853
Gross Amount at Which Carried at Close of Period, Building and Improvements	17,553
Total	27,406
Accumulated Depreciation	$ (850)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Pacific View - Ventura, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,578
Acquisition Costs, Buildings and Improvements	6,172
Gross Amount at Which Carried at Close of Period , Land	5,578
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,172
Total	11,750
Accumulated Depreciation	$ (229)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Sequoia Mall - Visalia, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,967
Acquisition Costs, Buildings and Improvements	2,243
Gross Amount at Which Carried at Close of Period , Land	2,967
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,243
Total	5,210
Accumulated Depreciation	$ (232)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
West Covina - West Covina, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,972
Acquisition Costs, Buildings and Improvements	2,053
Gross Amount at Which Carried at Close of Period , Land	5,972
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,053
Total	8,025
Accumulated Depreciation	$ (459)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westminster Mall - Westminster, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,845
Acquisition Costs, Buildings and Improvements	5,651
Gross Amount at Which Carried at Close of Period , Land	6,845
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,651
Total	12,496
Accumulated Depreciation	$ (497)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westland Shopping Center - Lakewood, CO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,290
Acquisition Costs, Buildings and Improvements	4,550
Gross Amount at Which Carried at Close of Period , Land	1,290
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,550
Total	5,840
Accumulated Depreciation	$ (343)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Thornton Place - Thornton, CO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,881
Acquisition Costs, Buildings and Improvements	1,300
Gross Amount at Which Carried at Close of Period , Land	1,881
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,300
Total	3,181
Accumulated Depreciation	$ (585)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Crystal Mall - Waterford, CT [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,371
Acquisition Costs, Buildings and Improvements	2,534
Gross Amount at Which Carried at Close of Period , Land	1,371
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,534
Total	3,905
Accumulated Depreciation	$ (300)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Corbin's Corner - West Hartford, CT [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,434
Acquisition Costs, Buildings and Improvements	10,466
Gross Amount at Which Carried at Close of Period , Land	6,434
Gross Amount at Which Carried at Close of Period, Building and Improvements	10,466
Total	16,900
Accumulated Depreciation	$ (765)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Rehoboth Beach, DE [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	714
Acquisition Costs, Buildings and Improvements	4,523
Gross Amount at Which Carried at Close of Period , Land	714
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,523
Total	5,237
Accumulated Depreciation	$ (412)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Altamonte Mall - Altamonte Springs, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,051
Acquisition Costs, Buildings and Improvements	6,788
Gross Amount at Which Carried at Close of Period , Land	4,051
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,788
Total	10,839
Accumulated Depreciation	$ (582)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Town Center at Boca - Raton Boca Raton, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	16,090
Acquisition Costs, Buildings and Improvements	7,479
Gross Amount at Which Carried at Close of Period , Land	16,090
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,479
Total	23,569
Accumulated Depreciation	$ (701)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
DeSoto Square - Bradenton, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	958
Acquisition Costs, Buildings and Improvements	900
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	7
Gross Amount at Which Carried at Close of Period , Land	958
Gross Amount at Which Carried at Close of Period, Building and Improvements	907
Total	1,865
Accumulated Depreciation	$ (263)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Beachway Plaza - Bradenton, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,420
Acquisition Costs, Buildings and Improvements	1,479
Gross Amount at Which Carried at Close of Period , Land	1,420
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,479
Total	2,899
Accumulated Depreciation	$ (207)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Countryside - Clearwater, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,852
Acquisition Costs, Buildings and Improvements	17,777
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	818
Gross Amount at Which Carried at Close of Period , Land	5,852
Gross Amount at Which Carried at Close of Period, Building and Improvements	18,595
Total	24,447
Accumulated Depreciation	$ (932)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Miami International Mall - Doral, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	9,214
Acquisition Costs, Buildings and Improvements	2,654
Gross Amount at Which Carried at Close of Period , Land	9,214
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,654
Total	11,868
Accumulated Depreciation	$ (552)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Edison Mall - Ft. Myers, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,168
Acquisition Costs, Buildings and Improvements	2,853
Gross Amount at Which Carried at Close of Period , Land	3,168
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,853
Total	6,021
Accumulated Depreciation	$ (287)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
The Oaks Mall - Gainesville, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,439
Acquisition Costs, Buildings and Improvements	1,205
Gross Amount at Which Carried at Close of Period , Land	2,439
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,205
Total	3,644
Accumulated Depreciation	$ (167)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westland Shopping Mall - Hialeah, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	9,683
Acquisition Costs, Buildings and Improvements	3,472
Gross Amount at Which Carried at Close of Period , Land	9,683
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,472
Total	13,155
Accumulated Depreciation	$ (363)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Hialeah, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,492
Acquisition Costs, Buildings and Improvements	2,344
Gross Amount at Which Carried at Close of Period , Land	5,492
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,344
Total	7,836
Accumulated Depreciation	$ (222)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Center of Osceola - Kissimmee, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,107
Acquisition Costs, Buildings and Improvements	2,556
Gross Amount at Which Carried at Close of Period , Land	2,107
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,556
Total	4,663
Accumulated Depreciation	$ (318)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Lakeland Square - Lakeland, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,503
Acquisition Costs, Buildings and Improvements	1,045
Gross Amount at Which Carried at Close of Period , Land	1,503
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,045
Total	2,548
Accumulated Depreciation	$ (204)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Melbourne, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,441
Acquisition Costs, Buildings and Improvements	1,981
Gross Amount at Which Carried at Close of Period , Land	2,441
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,981
Total	4,422
Accumulated Depreciation	$ (324)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Aventura Mall - Miami, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	13,265
Acquisition Costs, Buildings and Improvements	61,576
Gross Amount at Which Carried at Close of Period , Land	13,265
Gross Amount at Which Carried at Close of Period, Building and Improvements	61,576
Total	74,841
Accumulated Depreciation	$ (2,462)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Southland Mall - Miami, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,219
Acquisition Costs, Buildings and Improvements	1,236
Gross Amount at Which Carried at Close of Period , Land	5,219
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,236
Total	6,455
Accumulated Depreciation	$ (412)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Coastland Center - Naples, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	8,857
Acquisition Costs, Buildings and Improvements	2,209
Gross Amount at Which Carried at Close of Period , Land	8,857
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,209
Total	11,066
Accumulated Depreciation	$ (347)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - North Miami, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,748
Acquisition Costs, Buildings and Improvements	2,434
Gross Amount at Which Carried at Close of Period , Land	4,748
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,434
Total	7,182
Accumulated Depreciation	$ (336)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Paddock Mall - Ocala, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,468
Acquisition Costs, Buildings and Improvements	1,150
Gross Amount at Which Carried at Close of Period , Land	2,468
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,150
Total	3,618
Accumulated Depreciation	$ (220)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Shopping Center - Orange Park, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,477
Acquisition Costs, Buildings and Improvements	1,701
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	401
Gross Amount at Which Carried at Close of Period , Land	1,477
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,102
Total	3,579
Accumulated Depreciation	$ (249)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Orlando Fashion Square - Orlando, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,403
Acquisition Costs, Buildings and Improvements	3,626
Gross Amount at Which Carried at Close of Period , Land	4,403
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,626
Total	8,029
Accumulated Depreciation	$ (581)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Panama City Mall - Panama City, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,227
Acquisition Costs, Buildings and Improvements	1,614
Gross Amount at Which Carried at Close of Period , Land	3,227
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,614
Total	4,841
Accumulated Depreciation	$ (1,107)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
University Town Plaza - Pensacola, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,620
Acquisition Costs, Buildings and Improvements	2,990
Gross Amount at Which Carried at Close of Period , Land	2,620
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,990
Total	5,610
Accumulated Depreciation	$ (357)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westfield Broward - Plantation, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,933
Acquisition Costs, Buildings and Improvements	2,509
Gross Amount at Which Carried at Close of Period , Land	6,933
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,509
Total	9,442
Accumulated Depreciation	$ (424)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Sarasota Square - Sarasota, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,920
Acquisition Costs, Buildings and Improvements	2,200
Gross Amount at Which Carried at Close of Period , Land	3,920
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,200
Total	6,120
Accumulated Depreciation	$ (333)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - St. Petersburg, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,653
Acquisition Costs, Buildings and Improvements	777
Gross Amount at Which Carried at Close of Period , Land	1,653
Gross Amount at Which Carried at Close of Period, Building and Improvements	777
Total	2,430
Accumulated Depreciation	$ (253)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Tyrone Square Mall - St. Petersburg, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,381
Acquisition Costs, Buildings and Improvements	2,420
Gross Amount at Which Carried at Close of Period , Land	2,381
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,420
Total	4,801
Accumulated Depreciation	$ (412)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Cumberland Mall - Atlanta, GA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	8,891
Acquisition Costs, Buildings and Improvements	6,469
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	3
Gross Amount at Which Carried at Close of Period , Land	8,891
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,472
Total	15,363
Accumulated Depreciation	$ (495)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Oglethorpe Mall - Savannah, GA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,285
Acquisition Costs, Buildings and Improvements	3,012
Gross Amount at Which Carried at Close of Period , Land	5,285
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,012
Total	8,297
Accumulated Depreciation	$ (296)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Honolulu, HI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,824
Acquisition Costs, Buildings and Improvements	2,195
Gross Amount at Which Carried at Close of Period , Land	6,824
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,195
Total	9,019
Accumulated Depreciation	$ (138)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Algona, IA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	644
Acquisition Costs, Buildings and Improvements	2,796
Gross Amount at Which Carried at Close of Period , Land	644
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,796
Total	3,440
Accumulated Depreciation	$ (234)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Lindale Mall - Cedar Rapids, IA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,833
Acquisition Costs, Buildings and Improvements	2,197
Gross Amount at Which Carried at Close of Period , Land	2,833
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,197
Total	5,030
Accumulated Depreciation	$ (268)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Charles City, IA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	793
Acquisition Costs, Buildings and Improvements	1,914
Gross Amount at Which Carried at Close of Period , Land	793
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,914
Total	2,707
Accumulated Depreciation	$ (259)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Webster City Plaza - Webster City, IA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	392
Acquisition Costs, Buildings and Improvements	896
Gross Amount at Which Carried at Close of Period , Land	392
Gross Amount at Which Carried at Close of Period, Building and Improvements	896
Total	1,288
Accumulated Depreciation	$ (102)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Boise Towne Square - Boise, ID [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,828
Acquisition Costs, Buildings and Improvements	1,848
Gross Amount at Which Carried at Close of Period , Land	1,828
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,848
Total	3,676
Accumulated Depreciation	$ (217)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Chicago, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,665
Acquisition Costs, Buildings and Improvements	3,504
Gross Amount at Which Carried at Close of Period , Land	3,665
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,504
Total	7,169
Accumulated Depreciation	$ (193)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Chicago, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	905
Acquisition Costs, Buildings and Improvements	804
Gross Amount at Which Carried at Close of Period , Land	905
Gross Amount at Which Carried at Close of Period, Building and Improvements	804
Total	1,709
Accumulated Depreciation	$ (156)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kedzie Square - Chicago, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,385
Acquisition Costs, Buildings and Improvements	7,924
Gross Amount at Which Carried at Close of Period , Land	2,385
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,924
Total	10,309
Accumulated Depreciation	$ (531)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Homewood Square - Homewood, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,954
Acquisition Costs, Buildings and Improvements	4,766
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	36
Gross Amount at Which Carried at Close of Period , Land	3,954
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,802
Total	8,756
Accumulated Depreciation	$ (493)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Louis Joliet Shopping Mall - Joliet, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,557
Acquisition Costs, Buildings and Improvements	3,108
Gross Amount at Which Carried at Close of Period , Land	2,557
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,108
Total	5,665
Accumulated Depreciation	$ (507)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Lombard, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,685
Acquisition Costs, Buildings and Improvements	8,281
Gross Amount at Which Carried at Close of Period , Land	2,685
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,281
Total	10,966
Accumulated Depreciation	$ (462)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Moline, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,010
Acquisition Costs, Buildings and Improvements	751
Gross Amount at Which Carried at Close of Period , Land	2,010
Gross Amount at Which Carried at Close of Period, Building and Improvements	751
Total	2,761
Accumulated Depreciation	$ (263)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
North Riverside Park Mall - North Riverside, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,846
Acquisition Costs, Buildings and Improvements	3,178
Gross Amount at Which Carried at Close of Period , Land	1,846
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,178
Total	5,024
Accumulated Depreciation	$ (387)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Orland Square - Orland Park, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,783
Acquisition Costs, Buildings and Improvements	974
Gross Amount at Which Carried at Close of Period , Land	1,783
Gross Amount at Which Carried at Close of Period, Building and Improvements	974
Total	2,757
Accumulated Depreciation	$ (229)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Sherwood Plaza - Springfield, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,182
Acquisition Costs, Buildings and Improvements	5,051
Gross Amount at Which Carried at Close of Period , Land	2,182
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,051
Total	7,233
Accumulated Depreciation	$ (527)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Steger, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	589
Acquisition Costs, Buildings and Improvements	2,846
Gross Amount at Which Carried at Close of Period , Land	589
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,846
Total	3,435
Accumulated Depreciation	$ (160)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
North Pointe Plaza - Elkhart, IN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,349
Acquisition Costs, Buildings and Improvements	869
Gross Amount at Which Carried at Close of Period , Land	1,349
Gross Amount at Which Carried at Close of Period, Building and Improvements	869
Total	2,218
Accumulated Depreciation	$ (128)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Glenbrook Square - Ft. Wayne, IN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,247
Acquisition Costs, Buildings and Improvements	5,476
Gross Amount at Which Carried at Close of Period , Land	3,247
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,476
Total	8,723
Accumulated Depreciation	$ (475)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Broadway Center - Merrillville, IN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,413
Acquisition Costs, Buildings and Improvements	3,224
Gross Amount at Which Carried at Close of Period , Land	3,413
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,224
Total	6,637
Accumulated Depreciation	$ (509)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Leavenworth, KS [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	397
Acquisition Costs, Buildings and Improvements	705
Gross Amount at Which Carried at Close of Period , Land	397
Gross Amount at Which Carried at Close of Period, Building and Improvements	705
Total	1,102
Accumulated Depreciation	$ (161)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Metcalf Shopping Center - Overland Pk, KS [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,775
Acquisition Costs, Buildings and Improvements	1,766
Gross Amount at Which Carried at Close of Period , Land	2,775
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,766
Total	4,541
Accumulated Depreciation	$ (408)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Pennyrile Marketplace - Hopkinsville, KY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	553
Acquisition Costs, Buildings and Improvements	2,815
Gross Amount at Which Carried at Close of Period , Land	553
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,815
Total	3,368
Accumulated Depreciation	$ (325)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Audubon Plaza - Owensboro, KY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	411
Acquisition Costs, Buildings and Improvements	1,083
Gross Amount at Which Carried at Close of Period , Land	411
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,083
Total	1,494
Accumulated Depreciation	$ (107)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kentucky Oaks - Paducah, KY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,022
Acquisition Costs, Buildings and Improvements	2,868
Gross Amount at Which Carried at Close of Period , Land	1,022
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,868
Total	3,890
Accumulated Depreciation	$ (298)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Houma, LA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	590
Acquisition Costs, Buildings and Improvements	2,030
Gross Amount at Which Carried at Close of Period , Land	590
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,030
Total	2,620
Accumulated Depreciation	$ (239)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
The Mall of Acadiana - Lafayette, LA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,406
Acquisition Costs, Buildings and Improvements	5,094
Gross Amount at Which Carried at Close of Period , Land	1,406
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,094
Total	6,500
Accumulated Depreciation	$ (512)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - New Iberia, LA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	450
Acquisition Costs, Buildings and Improvements	1,819
Gross Amount at Which Carried at Close of Period , Land	450
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,819
Total	2,269
Accumulated Depreciation	$ (291)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Braintree Marketplace - Braintree, MA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,585
Acquisition Costs, Buildings and Improvements	5,614
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	9,889
Gross Amount at Which Carried at Close of Period , Land	6,585
Gross Amount at Which Carried at Close of Period, Building and Improvements	15,503
Total	22,088
Accumulated Depreciation	$ (358)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Square One Mall - Saugus, MA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,656
Acquisition Costs, Buildings and Improvements	2,835
Gross Amount at Which Carried at Close of Period , Land	1,656
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,835
Total	4,491
Accumulated Depreciation	$ (426)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Bowie Town Center - Bowie, MD [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,583
Acquisition Costs, Buildings and Improvements	2,335
Gross Amount at Which Carried at Close of Period , Land	4,583
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,335
Total	6,918
Accumulated Depreciation	$ (280)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Hunt Valley Towne Centre - Cockeysville, MD [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,768
Acquisition Costs, Buildings and Improvements	2,319
Gross Amount at Which Carried at Close of Period , Land	5,768
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,319
Total	8,087
Accumulated Depreciation	$ (306)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
South River Colony - Edgewater, MD [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,534
Acquisition Costs, Buildings and Improvements	2,116
Gross Amount at Which Carried at Close of Period , Land	5,534
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,116
Total	7,650
Accumulated Depreciation	$ (317)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Valley Mall - Hagerstown, MD [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,877
Acquisition Costs, Buildings and Improvements	1,378
Gross Amount at Which Carried at Close of Period , Land	2,877
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,378
Total	4,255
Accumulated Depreciation	$ (298)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Midtown Shopping Center - Madawaska, ME [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	140
Acquisition Costs, Buildings and Improvements	942
Gross Amount at Which Carried at Close of Period , Land	140
Gross Amount at Which Carried at Close of Period, Building and Improvements	942
Total	1,082
Accumulated Depreciation	$ (64)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Alpena, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	782
Acquisition Costs, Buildings and Improvements	1,427
Gross Amount at Which Carried at Close of Period , Land	782
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,427
Total	2,209
Accumulated Depreciation	$ (228)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Jackson Crossing - Jackson, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,720
Acquisition Costs, Buildings and Improvements	1,184
Gross Amount at Which Carried at Close of Period , Land	2,720
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,184
Total	3,904
Accumulated Depreciation	$ (297)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Lincoln Park Shopping Center - Lincoln Park, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,106
Acquisition Costs, Buildings and Improvements	3,198
Gross Amount at Which Carried at Close of Period , Land	1,106
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,198
Total	4,304
Accumulated Depreciation	$ (390)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Hillside Plaza - Manistee, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	508
Acquisition Costs, Buildings and Improvements	3,045
Gross Amount at Which Carried at Close of Period , Land	508
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,045
Total	3,553
Accumulated Depreciation	$ (355)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Macomb Mall - Roseville, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,286
Acquisition Costs, Buildings and Improvements	4,778
Gross Amount at Which Carried at Close of Period , Land	3,286
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,778
Total	8,064
Accumulated Depreciation	$ (557)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Sault Ste. Marie, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	946
Acquisition Costs, Buildings and Improvements	917
Gross Amount at Which Carried at Close of Period , Land	946
Gross Amount at Which Carried at Close of Period, Building and Improvements	917
Total	1,863
Accumulated Depreciation	$ (192)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - St. Clair Shores, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,399
Acquisition Costs, Buildings and Improvements	1,797
Gross Amount at Which Carried at Close of Period , Land	2,399
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,797
Total	4,196
Accumulated Depreciation	$ (249)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Oakland Mall - Troy, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	7,954
Acquisition Costs, Buildings and Improvements	2,651
Gross Amount at Which Carried at Close of Period , Land	7,954
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,651
Total	10,605
Accumulated Depreciation	$ (758)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Ypsilanti, MI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,462
Acquisition Costs, Buildings and Improvements	1,277
Gross Amount at Which Carried at Close of Period , Land	2,462
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,277
Total	3,739
Accumulated Depreciation	$ (331)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Burnsville Center - Burnsville, MN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,513
Acquisition Costs, Buildings and Improvements	1,281
Gross Amount at Which Carried at Close of Period , Land	3,513
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,281
Total	4,794
Accumulated Depreciation	$ (452)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Detroit Lakes K Mart Plaza - Detroit Lakes, MN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,130
Acquisition Costs, Buildings and Improvements	1,220
Gross Amount at Which Carried at Close of Period , Land	1,130
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,220
Total	2,350
Accumulated Depreciation	$ (287)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Maplewood Mall - Maplewood, MN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,605
Acquisition Costs, Buildings and Improvements	1,162
Gross Amount at Which Carried at Close of Period , Land	3,605
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,162
Total	4,767
Accumulated Depreciation	$ (307)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - St. Paul, MN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,866
Acquisition Costs, Buildings and Improvements	1,028
Gross Amount at Which Carried at Close of Period , Land	1,866
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,028
Total	2,894
Accumulated Depreciation	$ (348)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Cape Girardeau, MO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	609
Acquisition Costs, Buildings and Improvements	908
Gross Amount at Which Carried at Close of Period , Land	609
Gross Amount at Which Carried at Close of Period, Building and Improvements	908
Total	1,517
Accumulated Depreciation	$ (95)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Flower Valley Shopping Center - Florissant, MO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,430
Acquisition Costs, Buildings and Improvements	1,607
Gross Amount at Which Carried at Close of Period , Land	2,430
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,607
Total	4,037
Accumulated Depreciation	$ (290)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Jefferson City, MO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	957
Acquisition Costs, Buildings and Improvements	2,224
Gross Amount at Which Carried at Close of Period , Land	957
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,224
Total	3,181
Accumulated Depreciation	$ (243)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kickapoo Corners - Springfield, MO [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	922
Acquisition Costs, Buildings and Improvements	2,050
Gross Amount at Which Carried at Close of Period , Land	922
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,050
Total	2,972
Accumulated Depreciation	$ (215)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Columbus Centre - Columbus, MS [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,940
Acquisition Costs, Buildings and Improvements	2,547
Gross Amount at Which Carried at Close of Period , Land	2,940
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,547
Total	5,487
Accumulated Depreciation	$ (360)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Havre, MT [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	600
Acquisition Costs, Buildings and Improvements	790
Gross Amount at Which Carried at Close of Period , Land	600
Gross Amount at Which Carried at Close of Period, Building and Improvements	790
Total	1,390
Accumulated Depreciation	$ (138)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Asheville Mall - Asheville, NC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,141
Acquisition Costs, Buildings and Improvements	2,036
Gross Amount at Which Carried at Close of Period , Land	4,141
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,036
Total	6,177
Accumulated Depreciation	$ (347)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Concord Plaza - Concord, NC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,325
Acquisition Costs, Buildings and Improvements	1,275
Gross Amount at Which Carried at Close of Period , Land	2,325
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,275
Total	3,600
Accumulated Depreciation	$ (414)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Landmark Center - Greensboro, NC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,869
Acquisition Costs, Buildings and Improvements	4,387
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	746
Gross Amount at Which Carried at Close of Period , Land	3,869
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,133
Total	9,002
Accumulated Depreciation	$ (528)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Shopping Center - Minot, ND [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,724
Acquisition Costs, Buildings and Improvements	2,925
Gross Amount at Which Carried at Close of Period , Land	1,724
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,925
Total	4,649
Accumulated Depreciation	$ (327)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Kearney, NE [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	272
Acquisition Costs, Buildings and Improvements	483
Gross Amount at Which Carried at Close of Period , Land	272
Gross Amount at Which Carried at Close of Period, Building and Improvements	483
Total	755
Accumulated Depreciation	$ (93)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Mall of New Hampshire - Manchester, NH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,458
Acquisition Costs, Buildings and Improvements	4,160
Gross Amount at Which Carried at Close of Period , Land	1,458
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,160
Total	5,618
Accumulated Depreciation	$ (355)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Pheasant Lane Mall - Nashua, NH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,794
Acquisition Costs, Buildings and Improvements	7,255
Gross Amount at Which Carried at Close of Period , Land	1,794
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,255
Total	9,049
Accumulated Depreciation	$ (363)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Fox Run Mall - Portsmouth, NH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,934
Acquisition Costs, Buildings and Improvements	3,375
Gross Amount at Which Carried at Close of Period , Land	3,934
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,375
Total	7,309
Accumulated Depreciation	$ (427)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Mall at Rockingham Park - Salem, NH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,321
Acquisition Costs, Buildings and Improvements	12,198
Gross Amount at Which Carried at Close of Period , Land	3,321
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,198
Total	15,519
Accumulated Depreciation	$ (777)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Middletown, NJ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,647
Acquisition Costs, Buildings and Improvements	2,941
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	161
Gross Amount at Which Carried at Close of Period , Land	5,647
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,102
Total	8,749
Accumulated Depreciation	$ (769)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Watchung, NJ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,704
Acquisition Costs, Buildings and Improvements	4,110
Gross Amount at Which Carried at Close of Period , Land	6,704
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,110
Total	10,814
Accumulated Depreciation	$ (550)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Willowbrook Mall - Wayne, NJ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	12,850
Acquisition Costs, Buildings and Improvements	4,553
Gross Amount at Which Carried at Close of Period , Land	12,850
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,553
Total	17,403
Accumulated Depreciation	$ (763)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Deming, NM [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,085
Acquisition Costs, Buildings and Improvements	1,194
Gross Amount at Which Carried at Close of Period , Land	1,085
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,194
Total	2,279
Accumulated Depreciation	$ (191)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Farmington, NM [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,480
Acquisition Costs, Buildings and Improvements	1,845
Gross Amount at Which Carried at Close of Period , Land	1,480
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,845
Total	3,325
Accumulated Depreciation	$ (241)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Shopping Center - Hobbs, NM [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,386
Acquisition Costs, Buildings and Improvements	2,557
Gross Amount at Which Carried at Close of Period , Land	1,386
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,557
Total	3,943
Accumulated Depreciation	$ (260)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Eastern Commons Shopping Center - Henderson, NV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,124
Acquisition Costs, Buildings and Improvements	1,362
Gross Amount at Which Carried at Close of Period , Land	3,124
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,362
Total	4,486
Accumulated Depreciation	$ (308)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Meadows Mall - Las Vegas, NV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,354
Acquisition Costs, Buildings and Improvements	1,879
Gross Amount at Which Carried at Close of Period , Land	3,354
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,879
Total	5,233
Accumulated Depreciation	$ (324)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Meadowood Mall - Reno, NV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,135
Acquisition Costs, Buildings and Improvements	5,748
Gross Amount at Which Carried at Close of Period , Land	2,135
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,748
Total	7,883
Accumulated Depreciation	$ (299)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Colonie Center - Albany, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	8,289
Acquisition Costs, Buildings and Improvements	6,523
Gross Amount at Which Carried at Close of Period , Land	8,289
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,523
Total	14,812
Accumulated Depreciation	$ (693)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Great Northern Mall - Clay, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	787
Acquisition Costs, Buildings and Improvements	4,134
Gross Amount at Which Carried at Close of Period , Land	787
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,134
Total	4,921
Accumulated Depreciation	$ (368)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Huntington Square Mall - East Northport, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	7,617
Acquisition Costs, Buildings and Improvements	2,065
Gross Amount at Which Carried at Close of Period , Land	7,617
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,065
Total	9,682
Accumulated Depreciation	$ (377)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Hicksville, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	38,626
Acquisition Costs, Buildings and Improvements	19,065
Gross Amount at Which Carried at Close of Period , Land	38,626
Gross Amount at Which Carried at Close of Period, Building and Improvements	19,065
Total	57,691
Accumulated Depreciation	$ (1,695)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Oakdale Mall - Johnson City, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,169
Acquisition Costs, Buildings and Improvements	934
Gross Amount at Which Carried at Close of Period , Land	2,169
Gross Amount at Which Carried at Close of Period, Building and Improvements	934
Total	3,103
Accumulated Depreciation	$ (183)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Olean, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	249
Acquisition Costs, Buildings and Improvements	2,124
Gross Amount at Which Carried at Close of Period , Land	249
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,124
Total	2,373
Accumulated Depreciation	$ (238)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Mall at Greece Ridge Center - Rochester, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,082
Acquisition Costs, Buildings and Improvements	1,560
Gross Amount at Which Carried at Close of Period , Land	3,082
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,560
Total	4,642
Accumulated Depreciation	$ (367)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Sidney Plaza - Sidney, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,942
Acquisition Costs, Buildings and Improvements	1,769
Gross Amount at Which Carried at Close of Period , Land	1,942
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,769
Total	3,711
Accumulated Depreciation	$ (576)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Eastview Mall - Victor, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,144
Acquisition Costs, Buildings and Improvements	1,391
Gross Amount at Which Carried at Close of Period , Land	4,144
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,391
Total	5,535
Accumulated Depreciation	$ (374)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Jefferson Valley Mall - Yorktown Heights, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,584
Acquisition Costs, Buildings and Improvements	1,569
Gross Amount at Which Carried at Close of Period , Land	3,584
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,569
Total	5,153
Accumulated Depreciation	$ (345)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Belden Village - Canton, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,650
Acquisition Costs, Buildings and Improvements	5,854
Gross Amount at Which Carried at Close of Period , Land	1,650
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,854
Total	7,504
Accumulated Depreciation	$ (631)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Chapel Hill Mall Chapel Hill OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	444
Acquisition Costs, Buildings and Improvements	1,460
Gross Amount at Which Carried at Close of Period , Land	444
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,460
Total	1,904
Accumulated Depreciation	$ (469)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Dayton Mall - Dayton, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,650
Acquisition Costs, Buildings and Improvements	1,223
Gross Amount at Which Carried at Close of Period , Land	2,650
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,223
Total	3,873
Accumulated Depreciation	$ (381)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Kenton, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	340
Acquisition Costs, Buildings and Improvements	417
Gross Amount at Which Carried at Close of Period , Land	340
Gross Amount at Which Carried at Close of Period, Building and Improvements	417
Total	757
Accumulated Depreciation	$ (187)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Marietta, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	598
Acquisition Costs, Buildings and Improvements	706
Gross Amount at Which Carried at Close of Period , Land	598
Gross Amount at Which Carried at Close of Period, Building and Improvements	706
Total	1,304
Accumulated Depreciation	$ (132)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Great Lakes Mall - Mentor, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,092
Acquisition Costs, Buildings and Improvements	1,776
Gross Amount at Which Carried at Close of Period , Land	1,092
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,776
Total	2,868
Accumulated Depreciation	$ (343)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Southland Shopping Center - Middleburg Heights, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	698
Acquisition Costs, Buildings and Improvements	1,547
Gross Amount at Which Carried at Close of Period , Land	698
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,547
Total	2,245
Accumulated Depreciation	$ (249)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Plaza - North Canton, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,044
Acquisition Costs, Buildings and Improvements	1,126
Gross Amount at Which Carried at Close of Period , Land	1,044
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,126
Total	2,170
Accumulated Depreciation	$ (189)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Tallmadge, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	870
Acquisition Costs, Buildings and Improvements	682
Gross Amount at Which Carried at Close of Period , Land	870
Gross Amount at Which Carried at Close of Period, Building and Improvements	682
Total	1,552
Accumulated Depreciation	$ (173)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westgate Village Shopping Center - Toledo, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,664
Acquisition Costs, Buildings and Improvements	1,289
Gross Amount at Which Carried at Close of Period , Land	1,664
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,289
Total	2,953
Accumulated Depreciation	$ (229)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Muskogee, OK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	647
Acquisition Costs, Buildings and Improvements	966
Gross Amount at Which Carried at Close of Period , Land	647
Gross Amount at Which Carried at Close of Period, Building and Improvements	966
Total	1,613
Accumulated Depreciation	$ (210)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Oklahoma City, OK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,542
Acquisition Costs, Buildings and Improvements	2,210
Gross Amount at Which Carried at Close of Period , Land	1,542
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,210
Total	3,752
Accumulated Depreciation	$ (583)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Tulsa, OK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,048
Acquisition Costs, Buildings and Improvements	5,386
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,573
Gross Amount at Which Carried at Close of Period , Land	2,048
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,959
Total	9,007
Accumulated Depreciation	$ (508)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Clackamas Town Center - Happy Valley, OR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,659
Acquisition Costs, Buildings and Improvements	1,271
Gross Amount at Which Carried at Close of Period , Land	6,659
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,271
Total	7,930
Accumulated Depreciation	$ (196)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - The Dalles, OR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	616
Acquisition Costs, Buildings and Improvements	775
Gross Amount at Which Carried at Close of Period , Land	616
Gross Amount at Which Carried at Close of Period, Building and Improvements	775
Total	1,391
Accumulated Depreciation	$ (147)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Walnut Bottom Towne Centre - Carlisle, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,103
Acquisition Costs, Buildings and Improvements	1,725
Gross Amount at Which Carried at Close of Period , Land	1,103
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,725
Total	2,828
Accumulated Depreciation	$ (86)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Shops at Prospect - Columbia, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	897
Acquisition Costs, Buildings and Improvements	2,202
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6
Gross Amount at Which Carried at Close of Period , Land	897
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,208
Total	3,105
Accumulated Depreciation	$ (204)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
King of Prussia - King Of Prussia, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Buildings and Improvements	42,300
Gross Amount at Which Carried at Close of Period, Building and Improvements	42,300
Total	42,300
Accumulated Depreciation	$ (1,849)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart And Lowes Shopping Center - Lebanon, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,333
Acquisition Costs, Buildings and Improvements	2,085
Gross Amount at Which Carried at Close of Period , Land	1,333
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,085
Total	3,418
Accumulated Depreciation	$ (423)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Countryside Shopping Center - Mount Pleasant, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	970
Acquisition Costs, Buildings and Improvements	1,520
Gross Amount at Which Carried at Close of Period , Land	970
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,520
Total	2,490
Accumulated Depreciation	$ (262)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Walnutport, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	885
Acquisition Costs, Buildings and Improvements	3,452
Gross Amount at Which Carried at Close of Period , Land	885
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,452
Total	4,337
Accumulated Depreciation	$ (434)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Haines Acres Shopping Center -York, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,096
Acquisition Costs, Buildings and Improvements	1,414
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	3
Gross Amount at Which Carried at Close of Period , Land	1,096
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,417
Total	2,513
Accumulated Depreciation	$ (176)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Rexville Bayamon Towne Center - Bayamon, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	656
Acquisition Costs, Buildings and Improvements	7,173
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1
Gross Amount at Which Carried at Close of Period , Land	656
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,174
Total	7,830
Accumulated Depreciation	$ (445)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Las Catalinas - Caguas, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	431
Acquisition Costs, Buildings and Improvements	9,362
Gross Amount at Which Carried at Close of Period , Land	431
Gross Amount at Which Carried at Close of Period, Building and Improvements	9,362
Total	9,793
Accumulated Depreciation	$ (536)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Plaza Carolina - Carolina, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	611
Acquisition Costs, Buildings and Improvements	8,640
Gross Amount at Which Carried at Close of Period , Land	611
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,640
Total	9,251
Accumulated Depreciation	$ (584)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Plaza Guaynabo Guaynabo PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,603
Acquisition Costs, Buildings and Improvements	26,695
Gross Amount at Which Carried at Close of Period , Land	1,603
Gross Amount at Which Carried at Close of Period, Building and Improvements	26,695
Total	28,298
Accumulated Depreciation	$ (1,436)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Western Plaza - Mayaguez, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	564
Acquisition Costs, Buildings and Improvements	4,555
Gross Amount at Which Carried at Close of Period , Land	564
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,555
Total	5,119
Accumulated Depreciation	$ (387)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Ponce Towne Center - Ponce, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	473
Acquisition Costs, Buildings and Improvements	3,965
Gross Amount at Which Carried at Close of Period , Land	473
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,965
Total	4,438
Accumulated Depreciation	$ (302)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Rhode Island Mall - Warwick, RI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	9,166
Acquisition Costs, Buildings and Improvements	3,388
Gross Amount at Which Carried at Close of Period , Land	9,166
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,388
Total	12,554
Accumulated Depreciation	$ (675)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Boulevard Market Fair - Anderson, SC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,297
Acquisition Costs, Buildings and Improvements	638
Gross Amount at Which Carried at Close of Period , Land	1,297
Gross Amount at Which Carried at Close of Period, Building and Improvements	638
Total	1,935
Accumulated Depreciation	$ (107)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Northwoods Mall - Charleston, SC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,576
Acquisition Costs, Buildings and Improvements	1,497
Gross Amount at Which Carried at Close of Period , Land	3,576
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,497
Total	5,073
Accumulated Depreciation	$ (291)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Plaza - Rock Hill, SC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,432
Acquisition Costs, Buildings and Improvements	1,079
Gross Amount at Which Carried at Close of Period , Land	1,432
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,079
Total	2,511
Accumulated Depreciation	$ (227)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Sioux Falls, SD [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,025
Acquisition Costs, Buildings and Improvements	1,783
Gross Amount at Which Carried at Close of Period , Land	1,025
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,783
Total	2,808
Accumulated Depreciation	$ (153)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Wolfchase Galleria - Cordova, TN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,581
Acquisition Costs, Buildings and Improvements	4,279
Gross Amount at Which Carried at Close of Period , Land	2,581
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,279
Total	6,860
Accumulated Depreciation	$ (340)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Memphis, TN [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,827
Acquisition Costs, Buildings and Improvements	2,475
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(2,475)
Gross Amount at Which Carried at Close of Period , Land	2,827
Total	$ 2,827
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Tech Ridge - Austin, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,164
Acquisition Costs, Buildings and Improvements	2,858
Gross Amount at Which Carried at Close of Period , Land	3,164
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,858
Total	6,022
Accumulated Depreciation	$ (446)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Southwest Center Mall - Dallas, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,154
Acquisition Costs, Buildings and Improvements	1,314
Gross Amount at Which Carried at Close of Period , Land	1,154
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,314
Total	2,468
Accumulated Depreciation	$ (280)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - El Paso, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,008
Acquisition Costs, Buildings and Improvements	1,778
Gross Amount at Which Carried at Close of Period , Land	2,008
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,778
Total	3,786
Accumulated Depreciation	$ (248)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Baybrook Mall - Friendswood, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,124
Acquisition Costs, Buildings and Improvements	2,038
Gross Amount at Which Carried at Close of Period , Land	6,124
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,038
Total	8,162
Accumulated Depreciation	$ (309)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Kmart Plaza - Harlingen, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,795
Acquisition Costs, Buildings and Improvements	1,183
Gross Amount at Which Carried at Close of Period , Land	1,795
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,183
Total	2,978
Accumulated Depreciation	$ (120)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Memorial City Mall - Houston, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	7,967
Acquisition Costs, Buildings and Improvements	4,625
Gross Amount at Which Carried at Close of Period , Land	7,967
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,625
Total	12,592
Accumulated Depreciation	$ (627)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Houston, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	6,110
Acquisition Costs, Buildings and Improvements	1,525
Gross Amount at Which Carried at Close of Period , Land	6,110
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,525
Total	7,635
Accumulated Depreciation	$ (247)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Ingram Park Mall - Ingram, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,651
Acquisition Costs, Buildings and Improvements	2,560
Gross Amount at Which Carried at Close of Period , Land	4,651
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,560
Total	7,211
Accumulated Depreciation	$ (302)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Irving Mall - Irving, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,493
Acquisition Costs, Buildings and Improvements	5,743
Gross Amount at Which Carried at Close of Period , Land	4,493
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,743
Total	10,236
Accumulated Depreciation	$ (525)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding -San Antonio, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,468
Acquisition Costs, Buildings and Improvements	1,457
Gross Amount at Which Carried at Close of Period , Land	5,468
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,457
Total	6,925
Accumulated Depreciation	$ (255)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Shepherd, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,457
Acquisition Costs, Buildings and Improvements	2,081
Gross Amount at Which Carried at Close of Period , Land	5,457
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,081
Total	7,538
Accumulated Depreciation	$ (279)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Valley View Center - Valley View, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,706
Acquisition Costs, Buildings and Improvements	3,230
Gross Amount at Which Carried at Close of Period , Land	4,706
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,230
Total	7,936
Accumulated Depreciation	$ (573)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Westwood, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,899
Acquisition Costs, Buildings and Improvements	1,748
Gross Amount at Which Carried at Close of Period , Land	2,899
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,748
Total	4,647
Accumulated Depreciation	$ (353)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Antelope Square - Layton, UT [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,234
Acquisition Costs, Buildings and Improvements	974
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	527
Gross Amount at Which Carried at Close of Period , Land	2,234
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,501
Total	3,735
Accumulated Depreciation	$ (229)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Jordan Landing Shopping Center - West Jordan, UT [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,190
Acquisition Costs, Buildings and Improvements	2,305
Gross Amount at Which Carried at Close of Period , Land	3,190
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,305
Total	5,495
Accumulated Depreciation	$ (237)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Landmark Mall - Alexandria, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,728
Acquisition Costs, Buildings and Improvements	3,294
Gross Amount at Which Carried at Close of Period , Land	3,728
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,294
Total	7,022
Accumulated Depreciation	$ (522)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Greenbrier Mall - Chesapeake, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	4,236
Acquisition Costs, Buildings and Improvements	1,700
Gross Amount at Which Carried at Close of Period , Land	4,236
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,700
Total	5,936
Accumulated Depreciation	$ (306)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Fair Oaks Mall - Fairfax, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	10,873
Acquisition Costs, Buildings and Improvements	1,491
Gross Amount at Which Carried at Close of Period , Land	10,873
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,491
Total	12,364
Accumulated Depreciation	$ (332)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Newmarket Fair Mall - Hampton, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	771
Acquisition Costs, Buildings and Improvements	1,011
Gross Amount at Which Carried at Close of Period , Land	771
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,011
Total	1,782
Accumulated Depreciation	$ (339)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Pembroke Mall - Virginia Beach, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	10,413
Acquisition Costs, Buildings and Improvements	4,760
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	12,235
Gross Amount at Which Carried at Close of Period , Land	10,413
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,995
Total	27,408
Accumulated Depreciation	$ (733)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Warrenton Village - Warrenton, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,956
Acquisition Costs, Buildings and Improvements	2,480
Gross Amount at Which Carried at Close of Period , Land	1,956
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,480
Total	4,436
Accumulated Depreciation	$ (242)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Overland Plaza - Redmond, WA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	5,133
Acquisition Costs, Buildings and Improvements	4,133
Gross Amount at Which Carried at Close of Period , Land	5,133
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,133
Total	9,266
Accumulated Depreciation	$ (509)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Westfield Vancouver - Vancouver, WA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,378
Acquisition Costs, Buildings and Improvements	1,136
Gross Amount at Which Carried at Close of Period , Land	3,378
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,136
Total	4,514
Accumulated Depreciation	$ (259)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Yakima, WA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	1,863
Acquisition Costs, Buildings and Improvements	2,856
Gross Amount at Which Carried at Close of Period , Land	1,863
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,856
Total	4,719
Accumulated Depreciation	$ (420)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Southridge Mall [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,208
Acquisition Costs, Buildings and Improvements	2,340
Gross Amount at Which Carried at Close of Period , Land	3,208
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,340
Total	5,548
Accumulated Depreciation	$ (564)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
West Towne Mall - Madison, WI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	3,053
Acquisition Costs, Buildings and Improvements	2,130
Gross Amount at Which Carried at Close of Period , Land	3,053
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,130
Total	5,183
Accumulated Depreciation	$ (533)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Platteville, WI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	748
Acquisition Costs, Buildings and Improvements	1,195
Gross Amount at Which Carried at Close of Period , Land	748
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,195
Total	1,943
Accumulated Depreciation	$ (195)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Patrick Street Plaza - Charleston, WV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	2,030
Acquisition Costs, Buildings and Improvements	797
Gross Amount at Which Carried at Close of Period , Land	2,030
Gross Amount at Which Carried at Close of Period, Building and Improvements	797
Total	2,827
Accumulated Depreciation	$ (215)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Valley Point - Elkins, WV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	788
Acquisition Costs, Buildings and Improvements	1,147
Gross Amount at Which Carried at Close of Period , Land	788
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,147
Total	1,935
Accumulated Depreciation	$ (192)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Scott Depot, WV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	987
Acquisition Costs, Buildings and Improvements	484
Gross Amount at Which Carried at Close of Period , Land	987
Gross Amount at Which Carried at Close of Period, Building and Improvements	484
Total	1,471
Accumulated Depreciation	$ (141)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Mountain Plaza - Casper, WY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	509
Acquisition Costs, Buildings and Improvements	1,303
Gross Amount at Which Carried at Close of Period , Land	509
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,303
Total	1,812
Accumulated Depreciation	$ (182)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Gillette, WY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	846
Acquisition Costs, Buildings and Improvements	876
Gross Amount at Which Carried at Close of Period , Land	846
Gross Amount at Which Carried at Close of Period, Building and Improvements	876
Total	1,722
Accumulated Depreciation	$ (189)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Freestanding - Riverton, WY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	561
Acquisition Costs, Buildings and Improvements	847
Gross Amount at Which Carried at Close of Period , Land	561
Gross Amount at Which Carried at Close of Period, Building and Improvements	847
Total	1,408
Accumulated Depreciation	$ (181)
Date Acquired	2015-07
Costs Capitalized Subsequent to Acquisition, Land	$ 0

XML

Schedule III - Real Estate and Accumulated Depreciation (Parenthetical) (Detail) $ in Billions	12 Months Ended
	Dec. 31, 2016 USD ($)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Aggregate cost of land, building and improvements for federal income tax purpose	$ 2.3
Building [Member] | Minimum [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Life upon Which Depreciation is Computed	25 years
Building [Member] | Maximum [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Life upon Which Depreciation is Computed	40 years
Site Improvement [Member] | Minimum [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Life upon Which Depreciation is Computed	5 years
Site Improvement [Member] | Maximum [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Life upon Which Depreciation is Computed	15 years
Tenant Improvements [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Life upon which depreciation is computed, description	shorter of the estimated useful life or non-cancelable term of lease

XML

Schedule III - Reconciliation of Real Estate (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Reconciliation Of Carrying Amount Of Real Estate Investments Roll Forward
Balance at beginning of period	$ 1,651,062,000	$ 1,668,351,000
Additions	17,289,000	69,726,000
Impairments	0	0
Dispositions and write-offs	0	(3,185,000)
Balance at end of period	$ 1,668,351,000	$ 1,734,892,000

XML

Schedule III - Reconciliation of Accumulated Depreciation (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Reconciliation Of Real Estate Accumulated Depreciation Roll Forward
Balance at beginning of period	$ 0	$ 29,076
Depreciation expense	29,076	60,972
Dispositions and write-offs	0	(108)
Balance at end of period	$ 29,076	$ 89,940