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, 2019

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.)

500 Fifth Avenue, Suite 1530, New York, New York	10110
(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:

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

Title of each class	Trading Symbols	Name of each exchange on which registered
Class A common shares of beneficial interest, par value $0.01 per share	SRG	New York Stock Exchange
7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share	SRG-PA	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

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 every Interactive Data File required to be submitted 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 such files). Yes  ☒    No  ☐

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

Large accelerated filer	☒	Accelerated filer	☐	Non-Accelerated filer	☐
Smaller reporting company	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

On June 28, 2019, 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 $1,527,000,000 based upon the closing price of $42.96 of the common stock as reported on the New York Stock Exchange on such date.

As of February 21, 2020, the registrant had the following common shares outstanding:

Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	36,902,940
Class B common shares of beneficial interest, par value $0.01 per share	1,242,536
Class C common shares of beneficial interest, par value $0.01 per share	0

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Seritage Growth Properties’ Proxy Statement for its 2020 Annual Meeting of Shareholders, to be held May 21, 2020, 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, 2019

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	27
Item 3.	Legal Proceedings	38
Item 4.	Mine Safety Disclosures	38
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	39
Item 6.	Selected Financial Data	41
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 8.	Financial Statements and Supplementary Data	59
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	59
Item 9A.	Controls and Procedures	59
Item 9B.	Other Information	59
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	60
Item 11.	Executive Compensation	60
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	60
Item 13.	Certain Relationships and Related Transactions, and Director Independence	60
Item 14.	Principal Accounting Fees and Services	60
PART IV
Item 15.	Exhibits and Financial Statement Schedule	61
	Signatures	65

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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;

• Competition in the real estate and retail industries;

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

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

• Contingencies to the commencement of rent under signed leases;

• Holdco’s termination and other rights under its master lease with us;

• Our historical exposure to Sears Holdings and the effects of its previously announced bankruptcy filing;

• The litigation filed against us and other defendants in the Sears Holdings adversarial proceeding pending in bankruptcy court;

• The terms of our indebtedness and availability or sources of liquidity;

• Environmental, health, safety and land use laws and regulations;

• Restrictions with which we are required to comply in order to maintain REIT status and other legal requirements to which we are subject;

• The impact of ongoing negative operating cash flow on our ability to fund operations and ongoing development; and

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

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

The Company

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

The Company’s mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experiences for consumers and local communities, and create long-term value for our shareholders.

Background

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings” or “Sears”) 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 (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties, and (ii) its 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (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 and commenced operations.  The Company did not have any operations prior to the completion of the Rights Offering and Transaction.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).  On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., executed a master lease with respect to 51 Wholly Owned Properties (the “Holdco Master Lease”), which became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the original master lease between the Company and affiliates of Sears Holdings (the “Original Master Lease”).

As of December 31, 2019, the Company leased space at 48 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at three JV Properties. As of December 31, 2019, three Wholly Owned Properties were subject to 100% recapture notices pursuant to the terms of the Holdco Master Lease, and 28 Wholly Owned Properties and one JV Property were subject to termination notices pursuant to the terms of the Holdco Master Lease and the lease with Holdco at the JV Property, respectively. Giving effect to this recapture and termination activity, the Company leased space at 17 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at two JV Properties.

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco.  Mr. Lampert is also the Chairman of Seritage and controls each of the tenant entities that is a party to the Holdco Master Lease.

Business Strategies

The Company’s primary objective is to create value for its shareholders through the re-leasing and redevelopment of the majority of its Wholly Owned Properties and JV Properties.  In doing so, the Company expects to meaningfully grow net operating income (“NOI”) and diversify its tenant base while transforming its portfolio from one with a single-tenant retail orientation to one comprised predominately of multi-tenant shopping centers, multifamily properties and larger-scale, mixed-use environments.

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In order to achieve its objective, the Company intends to execute the following strategies:

• Convert single-tenant buildings into multi-tenant properties at meaningfully higher rents.  We intend to increase NOI and diversify our portfolio by actively redeveloping space at our properties and re-leasing such space to new, diversified tenants at higher rents than those paid for space currently or formerly occupied by Sears or Kmart prior to redevelopment.

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, 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.

As of December 31, 2019, we had originated 91 primarily retail redevelopment projects since inception representing an estimated total investment of $1.6-1.7 billion.

• Maximize value of vast land holdings through retail and mixed-use densification.  As of December 31, 2019, our portfolio included approximately 2,800 acres of land, or an average of 13 acres per site, and our most significant geographic concentrations were 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 particular, we have identified approximately three dozen sites that we believe have the real estate characteristics and demographic profile to support integrated mixed-use development, including retail, residential, office and other uses.  Given our fee ownership of these properties and control over parking lots and outparcels, we believe that these sites, as well as others throughout the portfolio, will provide attractive and value-enhancing redevelopment opportunities.  In 2019, the Company announced its first three multifamily projects totaling approximately 900 units and 135,000 square feet of integrated retail space.  These projects represent the first phases of three larger, mixed-use developments that are entitled for approximately 1,500 multifamily units and over 1,900,000 square feet of commercial space, including office, retail and hotel uses.

• Leverage existing and future joint venture relationships with leading real estate and financial partners.  As of December 31, 2019, we owned 50% interests in 28 JV Properties, including 23 properties in joint ventures with leading regional mall REITs and five properties in joint ventures with other institutional partners, each of which is focused on driving value creation through the same intensive re-leasing and redevelopment activities we pursue at our Wholly Owned Properties.

We expect to 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 development 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.

As of December 31, 2019, we had signed joint venture agreements with multifamily partners to entitle and develop over 5,400 apartment units across 14 sites. These agreements are subject to the achievement of certain milestones and other closing conditions and there can be no assurance that such transactions will be consummated.

• 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 continue to fund our operations and redevelopment opportunities.  We believe that our current capital structure and potential sources of liquidity, including but not limited to, sales of Wholly Owned Properties, sales of interests in JV Properties and potential credit and capital markets transactions (each of which may be subject to compliance with certain conditions and/or the consent of the lender under our $2.0 billion term loan facility), should continue to provide us with access to capital to operate our business and fund our operations and investments in value-creating projects.  In addition, our $2.0 billion term loan facility includes an undrawn $400 million incremental funding facility, access to which is subject to certain conditions that we have not yet achieved.

Significant Tenants

As of December 31, 2019, a material amount of the Company’s in-place rental income was generated from Holdco, which leased space at 48 of the Company’s 184 Wholly Owned Properties and three of its 28 JV Properties.

As of December 31, 2019, three Wholly Owned Properties were subject to 100% recapture notices pursuant to the terms of the Holdco Master Lease, and 28 Wholly Owned Properties and one JV Property were subject to termination notices pursuant to the terms of the Holdco Master Lease and the lease with Holdco at the JV Property, respectively.  Giving effect to this recapture and termination

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activity, the Company leased space at 17 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at two JV Properties.

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 Holdco Master Lease obligates Holdco 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 Holdco Master Lease. Other leases include, or are expected 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.

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 Holdco Master Lease, Holdco 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 Holdco, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities.  In addition, an environmental reserve was funded at the closing of the Transaction in the amount of approximately $12.0 million.  As of December 31, 2019, the balance of the environmental reserve was approximately $9.5 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.

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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 real estate 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 21, 2020, we had 77 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 500 Fifth Avenue, New York, New York 10110 and our telephone number is (212) 355-7800. Our website address is www.seritage.com. Our reports electronically filed with or furnished to the Securities and Exchange Commission (“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 are dependent on the ability of our top tenants, including Holdco, to successfully operate their businesses. Our tenants’ failure to operate their businesses successfully, or the occurrence of an event that has a material adverse effect on the business, financial condition or results of operations of any of our major tenants, could have a material adverse effect on our business, financial condition or results of operations.

A significant portion of our leased properties are leased to our major tenants, including Holdco. For the year ended December 31, 2019, rents paid to us under the Holdco Master Lease represented 30.6% of our revenue for the year. As a result, the success of our investments, at least in the short-term, is materially dependent on the financial condition of our major tenants. At any time, our tenants may experience a downturn in their respective businesses that may significantly weaken their financial condition, particularly during periods of economic uncertainty.  This uncertainty may be exacerbated as a result of actual changes in economic conditions, including as a result of market dynamics, trends in consumer income, rising energy prices, tariffs or trade disputes, and natural or manmade disasters, including epidemic or pandemic disease, or the impact of the fear of such changes on consumer behavior.  As a result, our tenants may delay lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close a number of locations or declare bankruptcy. For example, in November 2019, Holdco exercised its rights under the Holdco Master Lease to terminate the Holdco Master Lease, effective March 2020, with respect to 29 stores, 16 of which will be terminated without the payment of a termination fee.

The inability or unwillingness of our any of major tenants, including Holdco, to meet rent obligations and other obligations could materially adversely affect our business, financial condition or results of operations, including a reduction in operating cash flow that can be used to pay the interest, principal and other costs and expenses under our financings, or to pay cash dividends to Seritage shareholders.

In addition, certain of our lease agreements, including the Holdco Master Lease, require our tenants to pay certain insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties and to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective business, subject to proportionate sharing of expenses and certain other limitations. Our exposure to rental payments from our major tenants, including Holdco, as a material source of our rental income may limit our ability to enforce our rights under our lease agreements with such tenants.

The risk of financial failure of, or default in payment by, a major tenant is magnified in situations where we lease multiple properties to a single tenant under a master lease, and we may be limited in our ability to enforce our rights under such agreements. For example, the Holdco Master Lease 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 Holdco to comply with the terms of the Holdco 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 Holdco. 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.

There can be no assurance as to how our major tenants, including Holdco, will perform in the future. Outcomes not currently foreseen by us may occur, any of which could have a material and adverse impact on our business, results of operations and financial condition.

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

The future bankruptcy or insolvency of any of our tenants, including Holdco, 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. Any claims against bankrupt tenants for unpaid future rent are 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 may not be paid in full. Federal law may prohibit us from evicting a tenant based

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solely upon its recent bankruptcy filing (or a tenant in the event of such tenant’s 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.

Bankruptcy laws afford certain protections to tenants that may also affect the treatment of master leases, such as the Holdco Master Lease. 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 Holdco Master Lease constitutes a unitary lease 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 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 were to allow the Holdco Master Lease to be rejected in part, certain underperforming leases related to properties we  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.

In addition, although we believe that the Holdco 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 Holdco Master Lease as a secured lending transaction. If the Holdco Master Lease is 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 a bankruptcy proceeding.

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, or when the Holdco Master Lease or a Holdco JV Lease, as applicable, is recaptured or terminated with respect to particular properties, the premises may not be re-leased in a timely manner or at all, or the terms of re-leasing, including the cost of allowances and concessions to tenants, may be less favorable than the then-existing 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. In November 2019, Holdco exercised its rights under the Holdco Master Lease to terminate the Holdco Master Lease with respect to 29 stores effective March 2020.

Following the Sears Holdings bankruptcy, we have been named as a defendant in litigation that could adversely affect our business and financial condition, divert management’s attention from our business, and subject us to significant liabilities, including remedies that may be imposed as a result of a finding of fraudulent conveyance.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, plaintiffs Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC commenced a litigation (the “Litigation”) in the Bankruptcy Court naming us and certain of our affiliates, as well as affiliates of ESL Investments, Inc. and Sears Holdings, and certain other third parties, as defendants. The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD).  The initial complaint has been superseded by the Amended Complaint described below.

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter 11 Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Official Committee

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of Unsecured Creditors’ (the “Creditors’ Committee”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On November 25, 2019, the Creditors’ Committee filed a first amended complaint (the “Amended Complaint”) in the Bankruptcy Court naming us and certain of our affiliates, as well as affiliates of ESL Investments, Inc. and Sears Holdings, and certain other third parties, as defendants. The Amended Complaint alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 (including the July 2015 transactions giving rise to Seritage, the execution of the Master Lease with Sears Holdings (the “Original Master Lease”), and the acquisition of real estate from Sears Holdings) constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings and that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth hundreds of millions of dollars more than the purchase price paid.  The Amended Complaint further alleges that certain releases provided to Seritage and certain other defendants in connection with the Sears Holdings derivative litigation in the Delaware Court of Chancery in 2017 should be avoided and/or declared null and void as an actual and/or constructive fraudulent conveyance.  The Amended Complaint seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers, disgorgement, recovery of the property fraudulently transferred or, in the alternative, compensatory damages in an unspecified amount to be determined at trial, equitable subordination and disallowance of defendants’ claims as creditors, punitive and exemplary damages for any intentional wrongdoing, and reasonable attorneys’ fees, costs, and expenses.  On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation unjust enrichment and equitable subordination.

Fraudulent transfers or 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, a court could require our shareholders to return to Sears Holdings or its creditors some or all of the securities issued in the distribution made in connection with the formation of Seritage.

Although we believe that the claims against us in the Litigation are without merit and intend to defend against them vigorously, we are not able to predict the ultimate outcome of the Litigation, the magnitude of any potential losses or the effect such litigation may have on us or our operations. It is possible that the Litigation could cause us to incur substantial costs and that they could be resolved adversely to us, result in substantial damages or other forms of relief, result in or be connected to additional claims, affect our relations with counterparties to commercial transactions and divert management’s attention and resources, any of which could harm our business. Protracted litigation, including any adverse outcomes, may have an adverse impact on our business, results of operations or financial condition and could subject us to adverse publicity and require us to incur significant legal fees.  Please see Note 9 – Commitments and Contingencies – in this Annual Report on Form 10-K for additional information regarding the Litigation.

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 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. In addition, our ability to enter into asset sales or joint ventures is subject to among other uncertainties, our ability to identify prospective purchasers, the willingness of prospective purchasers to enter into transactions on commercially reasonable terms, negotiations with counterparties, satisfactory examination of property and title by the purchasers, the ability to obtain title and other relevant insurance, applicable consent rights of the lender under our term loan facility, the ability of purchasers to obtain adequate financing, and customary closing conditions.

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 may be subject to the Holdco Master Lease, as the terms of such master lease or the fact that Holdco 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.

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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 retail 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 Holdco, 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;

• 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.

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In addition, we intend to redevelop a significant portion of the properties purchased from Sears Holdings in prior years in order to make space available for lease to additional retail tenants and potentially other 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 the risk that Holdco 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, including from Holdco related to space that is recaptured pursuant to the Holdco Master Lease, 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;

• failure to successfully manage, or find suitable third-party development partners for, the development of residential, office or other mixed-use properties;

• 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;

• 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 Holdco Master Lease are generally subject to a triple-net lease basis (subject to proportionate sharing of operating expenses with respect to space not leased by Holdco), 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

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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.

We have ongoing capital needs and may not be able to obtain additional financing or other sources of funding on acceptable terms.

As of December 31, 2019, we had aggregate outstanding indebtedness of $1.6 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 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.

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service, and the reinvestment in and redevelopment of our properties.  As a result of a decrease in occupancy levels due to our recapture of space for redevelopment purposes and the execution of termination rights under the Original Master Lease, our property rental income, which is our primary source of operating cash flow, did not fully fund property operating and other expenses incurred during the year ended December 31, 2019. Property operating and other expenses are projected to continue to exceed property rental income until such time as additional tenants commence paying rent, and we plan to incur additional development expenditures as we continue to invest in the redevelopment of our portfolio. While we do not currently have the liquid funds available to fully fund projected property and other expenses and planned development expenditures, we expect to fund these uses of cash with a combination of capital sources including, but not limited to, sales of Wholly Owned Properties, sales of interests in JV Properties and potential credit and capital markets transactions, subject to compliance with certain conditions and/or the consent of our lender under our $2.0 billion term loan facility.

As of December 31, 2019, we were not in compliance with certain financial metrics applicable to us under the agreements governing our term loan facility. As a result, we must receive the consent of the lender to dispose of assets via sale or joint venture and, as of December 31, 2019, the lender had provided such consent for all such transactions submitted for approval. There can be no assurance that the lender will consent to future dispositions of assets.  Additionally, the lender has the right to request mortgages against our assets pursuant to the mortgage and collateral requirement and, during the year ended December 31, 2019, the lender has requested mortgages on a majority of our portfolio.

The term loan facility also provides for a $400 million incremental facility. Our ability to access the incremental facility is subject to (i) our achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the incremental facility, of not less than $200 million and (ii) our good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million. As of December 31, 2019, we have not achieved this level of rental income from non-Sears Holdings tenants.

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. A decrease in available liquidity could also impair our ability to pay dividends to our shareholders.

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

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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.

Changes in federal tax law could materially adversely affect our business, financial condition and profitability by increasing our tax or tax compliance costs.

On December 20, 2017, the U.S. Congress passed Public Law No. 1, known as the “Tax Cuts and Jobs Act of 2017” (the “TCJA”), which was signed into law on December 22, 2017. The enactment of the TCJA has given rise to numerous interpretive issues and ambiguities and future legislation may be enacted to clarify or modify the TCJA. Any such future legislation, as well as any regulations or other interpretive guidance, could take effect retroactively, and could adversely affect our business and financial condition increasing our tax or tax compliance costs. The impact of any such law, regulation or interpretation may have a material and adverse impact on us and our shareholders.

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 and/or redevelopment 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 Holdco Master Lease permits, and some other leases may also 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 in, among other things, 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 consider the most likely course of action at 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

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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, two 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 operation or cessation of business operations, on the encumbered property.  From time to time, we have been involved in disputes or legal proceedings relating to such Property Restrictions, which may result in the incurrence of legal costs and diversion of management resources to resolve.

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 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

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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 other 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, a predecessor to Holdco, did not incur significant expenditures to comply with these laws with respect to the substantial majority of the space at the properties that were subject to the Original Master Lease. 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.

The Original Master Lease contained requirements that Sears Holdings indemnify us from certain environmental liabilities; however, following Sears Holdings’ bankruptcy, there can be no assurance that we would be able to collect any amounts due under such indemnification obligations. Under the Holdco Master Lease, Holdco is required to indemnify us from certain environmental liabilities at certain properties, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities. Although existing and future other 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 Holdco or other third parties would be 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.

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.

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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.

Cybersecurity incidents could cause a disruption to our operations, a compromise of confidential information and damage to our business relationships, all of which could negatively impact our business, financial condition and operating results.

Seritage is susceptible to cybersecurity risks that include, among other things, theft, unauthorized monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized access to relevant systems, compromises to networks or devices; or operational disruption or failures in the physical infrastructure or operating systems of Seritage’s information systems. Seritage’s information systems are essential to the operation of our business and our ability to perform day-to-day operations, including for the secure processing, storage and transmission of confidential and personal information. Seritage must continuously monitor and develop its systems to protect its technology infrastructure and data from misappropriation, corruption and disruption. Cybersecurity risks may also impact properties in which we invest on behalf of clients and tenants of those properties, which could result in a loss of value in our clients’ investment. In addition, due to Seritage’s interconnectivity with third-party service providers and other entities with which Seritage conducts business, Seritage could be adversely impacted if any of them is subject to a successful cyber incident. Although we and our service providers have implemented processes, procedures and controls to help mitigate these risks, there can be no assurance that these measures will be effective or that security breaches or disruptions will not occur. The result of these incidents may include disrupted operations, liability for loss or misappropriation of data, stolen assets or information, increased cybersecurity protection and insurance costs, increased compliance costs, litigation, regulatory enforcement actions and damage to our reputation or business relationships.

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We may 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 finance newly acquired properties or capital contributions to joint ventures, or to fund retenanting and redevelopment projects. As of December 31, 2019, we were required to provide mortgages to the lender under our term loan facility on a majority of our portfolio. This restriction, together with the other provisions of the Term Loan Facility, will limit our ability to obtain additional secured financing using such properties as collateral. We may also borrow if we need funds or deem it necessary or advisable to ensure that we maintain our qualification as a REIT for U.S. 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 U.S. federal income tax purposes, a foreclosure of any of our properties generally 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.

Covenants in our term loan facility may limit our operational flexibility and a covenant breach or default could adversely affect our business and financial condition.

Our term loan facility includes certain financial metrics to govern certain collateral and covenant exceptions set forth in the agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion. Any failure to satisfy any of these financial metrics will limit our ability to dispose of assets via sale or joint venture and trigger a requirement for us to provide mortgage collateral to our lender, but will not result in an event of default, mandatory amortization, cash flow sweep or similar provision. As of December 31, 2019, we were in breach of one or more of the financial metrics described above, as a result of which we were required to provide mortgages to the lender under the term loan facility with respect to a majority of our portfolio. Additionally, the lender under our term loan facility has the right to consent to dispositions of properties via asset sales and formation of new joint ventures. This consent right may have the effect of limiting our ability to dispose of properties, whether for strategic reasons or to raise liquidity to fund our operations. The term loan facility also includes certain limitations relating to, among other activities, our ability to: sell assets or merge, consolidate or transfer all or substantially all of our assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for our properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase our capital stock; and enter into certain transactions with affiliates.

The term loan facility also provides for a $400 million incremental facility. Our ability to access the incremental facility is subject to (i) our achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the incremental facility, of not less than $200 million and (ii) our good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million. As of December 31, 2019, we have not achieved this level of rental income from non-Sears Holdings tenants.

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 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. We are required to implement substantial control systems and procedures in order to maintain our qualification as a REIT, satisfy our 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.

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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, our Declaration of Trust authorizes us and our bylaws obligate us to indemnify our 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.

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 shares of beneficial interest 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 our shares of beneficial interest during at least 335 days of a taxable year (other than 2015, the first taxable year for which we elected to be taxed as a REIT). The Company’s Declaration of Trust, with certain exceptions, authorizes the Company’s board of trustees (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 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, Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”), or other shares of beneficial interest that would generally result in (i) our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT, ii) our being beneficially owned by fewer than 100 persons, (iii) any of our income that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code failing to qualify as such, or (iv) our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code. Any attempt to own or transfer Class A common shares, Series A Preferred Shares or any of our other shares of beneficial interest in violation of the 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 if any purposted transfer of Class A common shares, Series A Preferred

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Shares, or other such shares of beneficial interest would otherwise result in any person violating the ownership limits or any other restriction on ownership and transfer of shares of beneficial interest described above, then that number of shares (rounded up to the nearest whole share) that would cause the violation will be automatically transferred to, and held by, a trust for the exclusive benefit of a designated charitable beneficiary. Any person who acquires such shares in violation of the ownership limits or any other restriction on ownership and transfer of shares of beneficial interest described above 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 5.6% of the voting power of the Company, all of which are held by ESL Partners, L.P. and its affiliates, including Edward S. Lampert (together “ESL”). We have also issued 2,800,000 shares of Series A Preferred Shares that are senior to our common shares with respect to priority of dividend payments and rights upon liquidation, dissolution or winding up. 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 Two-Thirds of the Class A Common Shares and Class B Non-Economic Common Shares Votes Cast. 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 two-thirds of the votes cast 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. 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 two-thirds of the votes cast 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 two-thirds of the votes cast 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, which controls approximately 5.6% 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:

o “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

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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;

o “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

o 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 Fairholme Capital Management L.L.C. (“FCM”) and/or certain clients of FCM or their respective affiliates and (b) between us and any other person, provided that in the latter case the 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 Holdco Master Lease and other existing other 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 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.

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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.

As of December 31, 2019, ESL owns approximately 33.9% 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 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 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. Because ESL currently owns a majority of the outstanding Operating Partnership units not held by the Company and entities controlled by it, ESL’s approval will be required in order for the general partner to undertake such actions unless ESL no longer owns a majority of such units. If ESL refuses to approve any such action, our business could be materially adversely affected. Furthermore, ESL owns approximately 2.4% of the outstanding Class A common shares, as well as Class B non-economic common shares having, in the aggregate, 5.6% 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 Holdco, and its interests may differ from or conflict with the interests of our other shareholders.

ESL beneficially owns approximately 33.9% of the Operating Partnership units, and approximately 2.4% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively, having, in the aggregate, 5.6% of the voting power of Seritage. Sears Holdings was, and Holdco is, an affiliate of ESL. In addition, Mr. Lampert, who previously served as the Chairman of the Board and Chief Executive Officer of Sears Holdings, and is the 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 Holdco. In any matter affecting us, including our relationship with Holdco, the interests of ESL may differ from or conflict with the interests of our other shareholders.

The businesses of each of the GGP JVs, 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 JVs, the Simon JV and/or the Macerich JV.

The GGP JVs are joint ventures that own and operate certain JV Properties, which consist of nine 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 five other

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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 Holdco 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 JVs, the Simon JV and the Macerich JV, and responsibility for leasing and redevelopment activities related to the JV Properties owned by the GGP JVs, 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 JVs are located at malls owned and operated by Brookfield Properties Retail (formerly GGP Inc.), 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 JVs, 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.

We will continue to depend on Holdco to provide certain services at properties where Holdco 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 Holdco expire or are terminated.

On February 28, 2019, we and certain affiliates of Holdco executed the Holdco Master Lease. The Holdco Master Lease became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease. The Holdco Master Lease governs the terms of the use and operation of 17 properties leased by us to Holdco as of December 31, 2019 after giving effect to pending recapture or termination activity), including our redevelopment and recapture rights and Holdco’s lease termination rights, and the repair, maintenance and redevelopment-related services Holdco may provide to us. The agreements between us and certain affiliates of Holdco also govern our various interim and ongoing relationships.

If the Holdco Master Lease expires or is terminated, or if Holdco is unable to meet its obligations under the Holdco Master Lease as a result of bankruptcy or otherwise, 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.

Holdco 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 Holdco’s ability to satisfy its indemnification obligations may be impaired in the future.

Pursuant to the Holdco Master Lease, Holdco has agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that Holdco has agreed to retain, and Holdco may be unable to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from Holdco any amounts for which we are held liable, we may be temporarily required to bear these losses while seeking recovery from Holdco. Any liabilities in excess of amounts for which we receive timely indemnification from Holdco 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. In connection with the Transaction, and the December 2017 offering of Series A Preferred Shares, we received opinions of counsel concluding that we have been organized in conformity with the requirements for qualification as a REIT and our current and/or proposed method of operation should enable us to satisfy the requirements for qualification as a REIT as of the respective dates. Investors should be aware, however, that opinions of counsel are not binding on the IRS or any court, and that each opinion was expressed as of the date it was issued and has not been updated. We believe we have continued to operate in conformity with the requirements to qualify as a REIT and that we continue to

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satisfy all requirements to maintain our REIT status. However, qualification as a REIT involves the application of highly technical and complex provisions of the Code, for which only a limited number of judicial and administrative interpretations exist.

If we were to fail to qualify as a REIT in any taxable year, and no available relief provision applied, we would be subject to U.S. federal income tax, including, for any taxable year ending on or before December 31, 2017, any applicable alternative minimum tax, on our taxable income at regular corporate rates (which, in the case of U.S. federal income tax, is a maximum of 35% for periods ending on or before December 31, 2017 and 21% thereafter), as well as U.S. state and local income tax, and dividends paid to our shareholders would not be deductible by us 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, we 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.

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. Our 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 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 tenants may not be treated as qualifying rent for purposes of these requirements if the applicable 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. We believe that the Holdco Master Lease should be respected as a true lease for U.S. federal income tax purposes. If, contrary to expectations, the Holdco 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 our 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 our outstanding shares (by value) actually or constructively owns 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock of such tenant entitled to vote or 10% or more of the total value of all classes of stock of such tenant. For purposes of determining whether rental payments received by a REIT are treated as qualifying rent, the stock, assets or net profits owned by a partner in an entity classified as a partnership for U.S. federal income tax purposes are attributed to such partnership only if the partner owns (directly or indirectly) 25% or more of the capital interest or profits interest in the partnership. As a result of these rules, it is possible that we could be treated as owning 10% or more of a tenant due to entering into a joint venture with a third party that is an actual or constructive owner of such tenant, and in such case rent payments received from such tenant may not be treated as qualifying rent for purposes of these requirements. Our Declaration of Trust provides for restrictions on ownership and transfer of Class A common shares and Series A Preferred Shares, including restrictions on such ownership or transfer that would cause the rents we receive or accrue from a tenant 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 our 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 certain “qualified dividends,” but would generally qualify for a partial deduction with respect to certain taxpayers.

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%. Ordinary 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. However, for taxable years beginning after December 31, 2017 and ending before January 1, 2026, a U.S. shareholder that is an individual, trust or estate would

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generally be entitled to deduct up to 20% of certain ordinary REIT dividends, effectively reducing the rate at which such ordinary REIT dividends are subject to tax. U.S. shareholders should consult their own tax advisors regarding all aspects of such rules and their potential application to dividends from us.

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 declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and have not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2020. We intend to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred shares.

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 “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”. 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 tenants to make rental payments under any applicable lease could 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 we have no current intention to do so, we may in the future distribute taxable stock dividends to our shareholders in the form of additional shares of our stock. Taxable shareholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our 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 our 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, we 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, we 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. For taxable years beginning after December 31, 2017, taxpayers, including TRSs, are subject to a limitation on their ability to deduct net business interest (i.e., interest paid or accrued on indebtedness allocable to a trade or business), generally up to 30% of adjusted taxable income, subject to certain exceptions. This provision may limit the ability of our TRS to deduct interest, which could increase its taxable income and corporate income tax. Further, we may incur a

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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 we fail 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 and, in certain cases, maintain ownership of 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 the 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 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 may only be carried forward and may only be deducted against 80% or future taxable income in the TRS if the losses are incurred generally after December 31, 2017.

Changes in federal tax law affected the taxation of us and may affect the desirability of investing in a REIT relative to a regular non-REIT corporation.

The TCJA reduced the relative competitive advantage of operating as a REIT as compared with operating as a regular non-REIT corporation by reducing the maximum tax rate applicable to regular corporations from 35% to 21% beginning on January 1, 2018. On the other hand, the TCJA also decreased the U.S. federal income tax rate applicable to non-corporate shareholders on ordinary REIT dividends by lowering the maximum applicable individual rate from 39.6% to 37% and permitting non-corporate shareholders of REITs to deduct 20% of ordinary REIT dividends from their taxable income for the taxable years beginning after December 31, 2017 and ending before January 1, 2026 (as discussed above). The TCJA also provided a new limitation on the deduction of net business interest (ad discussed above). A taxpayer engaged in certain businesses relating to real property may elect out of the business interest provision; however, the requirements of this election may be onerous to implement and would require the REIT to utilize potentially disadvantageous depreciation methods on some or all of its assets, including certain “qualified improvement property.” We will determine whether or not to make such an election in our sole discretion and based on all the facts and circumstances. In addition, proposed U.S. Treasury regulations could limit the deduction we may claim for our proportionate share of the compensation expense attributable to the remuneration paid by the Operating Partnership for services performed by certain of our highly ranked and highly compensated employees.

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. 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

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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 us and our investors of such qualification.

Risks Related to Ownership of our Securities

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

The market price of our securities may be volatile, and the trading volume in our securities may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect the market price of our securities or result in fluctuations in the price or trading volume of our securities 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 securities 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 by institutional shareholders;

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

• adverse performance or potential financial distress or bankruptcy of our major tenants, including Holdco;

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

• adverse developments in the Litigation;

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

• general market and economic conditions.

We have issued Series A Preferred Shares, which, along with future offerings of debt or preferred equity securities, rank senior to our common shares for purposes of distributions or upon liquidation, may adversely affect the market price of our common shares.

We have issued 2,800,000 Series A Cumulative Redeemable Preferred Shares, which are senior to our common shares for purposes of distributions or upon liquidation. The Series A Preferred Shares may limit our ability to make distributions to holders 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, Series A Preferred Shares and any additional preferred shares and lenders with respect to other borrowings may receive distributions of our available assets prior to the holders of our common shares. Any 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 Series A Preferred Shares have, and any additional preferred shares of beneficial interest issued could have, a preference on liquidating distributions or a preference on distribution payments that could 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 and Holdco 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 historical transactions with Sears Holdings or future transactions with Holdco, 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 or Holdco could arise in connection with any of our past or future agreements with those counterparties.

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On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC commenced the Litigation in the Bankruptcy Court against the Seritage Defendants. The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). On November 25, 2019, acting pursuant to the Confirmation Order, the Creditors’ Committee filed the Amended Complaint alleging, among other things, that certain transactions undertaken by Sears Holdings since 2011 (including the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings) constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings and that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth hundreds of millions of dollars more than the purchase price paid.  The Amended Complaint further alleges, among other things, that certain releases provided to Seritage and certain other defendants in connection with the Sears Holdings derivative litigation in the Delaware Court of Chancery in 2017 should be avoided and/or declared null and void as an actual and/or constructive fraudulent conveyance.  The Amended Complaint seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers, disgorgement, recovery of the property fraudulently transferred or, in the alternative, compensatory damages in an unspecified amount to be determined at trial, equitable subordination and disallowance of defendants’ claims as creditors, punitive and exemplary damages for any intentional wrongdoing, and reasonable attorneys’ fees, costs, and expenses.  On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination.

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 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.

The Series A Preferred Shares have not been rated.

The Series A Preferred Shares have not been rated, and may never be rated, by any nationally recognized statistical rating organization, which may negatively affect their market value and your ability to sell such shares. It is possible, however, that one or more rating agencies might independently determine to assign a rating to the Series A Preferred Shares or that we may elect to obtain a rating of the Series A Preferred Shares in the future. Furthermore, we may elect to issue other securities for which we may seek to obtain a rating. If any ratings are assigned to the Series A Preferred Shares in the future or if we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or the market value of the Series A Preferred Shares. Ratings only reflect the views of the issuing rating agency or agencies, and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. Any such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series A Preferred Shares. Further, a rating is not a recommendation to purchase, sell or hold any particular security, including the Series A Preferred Shares. In addition, ratings do not reflect market prices or suitability of a security for a particular investor and any future rating of the Series A Preferred Shares may not reflect all risks related to us and our business, or the structure or market value of the Series A Preferred Shares.

An active trading market may not develop for the Series A Preferred Shares or, even if it does develop, may not continue, which may negatively affect the market value of, and the ability of holders of our Series A Preferred Shares to transfer or sell, their shares.

Since the Series A Preferred Shares have no stated maturity date, investors seeking liquidity will be limited to selling their shares in the secondary market. The Series A Preferred Shares are listed on the NYSE under the symbol “SRG PrA,” but there can be no assurance that an active trading market on the NYSE for the Series A Preferred Shares will develop or continue, in which case the market price of the Series A Preferred Shares could be materially and adversely affected and the ability to transfer or sell Series A Preferred Shares would be limited. The market price of the shares will depend on many factors, including:

• prevailing interest rates;

• the market for similar securities;

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• investors’ perceptions of us;

• our issuance of additional preferred equity or indebtedness;

• general economic and market conditions; and

• our financial condition, results of operations, business and prospects.

The Series A Preferred Shares are subordinate in right of payment to our existing and future debt, and the interests of the holders of Series A Preferred Shares could be diluted by the issuance of additional preferred shares, including additional Series A Preferred Shares, and by other transactions.

The Series A Preferred Shares rank junior to all of our existing and future debt and to other non-equity claims on us and our assets available to satisfy claims against us, including claims in bankruptcy, liquidation or similar proceedings. Our future debt may include restrictions on our ability to pay dividends to preferred shareholders. As of December 31, 2019, our total indebtedness was $1.6 billion. In addition, we may incur additional indebtedness in the future. Our Declaration of Trust currently authorizes the issuance of up to 10,000,000 shares of preferred shares in one or more classes or series. Our board of trustees has the power to reclassify unissued common shares and preferred shares and to amend our Declaration of Trust, without any action by our shareholders, to increase the aggregate number of shares of beneficial interest of any class or series, including preferred shares, that we are authorized to issue. The issuance of additional preferred shares on parity with or senior to the Series A Preferred Shares with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up would dilute the interests of the holders of the Series A Preferred Shares, and any issuance of preferred shares senior to the Series A Preferred Shares or of additional indebtedness could adversely affect our ability to pay dividends on, redeem or pay the liquidation preference on the Series A Preferred Shares. Other than the limited conversion right afforded to holders of Series A Preferred Shares that may occur in connection with a Change of Control, none of the provisions relating to the Series A Preferred Shares contain any provisions relating to or limiting our indebtedness or affording the holders of the Series A Preferred Shares protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of the Series A Preferred Shares, so long as the rights of holders of the Series A Preferred Shares are not materially and adversely affected.

Dividends on our preferred shares, including the Series A Preferred Shares, are discretionary. We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future period.

Future dividends on our preferred shares, including the Series A Preferred Shares, will be authorized by our Board of Trustees and declared by us at the discretion of our board of trustees and will depend on, among other things, our results of operations, cash flow from operations, financial condition and capital requirements, any debt service requirements and any other factors our Board of Trustees deems relevant. Accordingly, we cannot guarantee that we will be able to make cash dividends on our preferred shares or what the actual dividends will be for any future period. However, until we declare payment and pay or set apart the accrued dividends on the Series A Preferred Shares, our ability to pay dividends and make other distributions on our common shares and non-voting shares (including redemptions) will be limited by the terms of the Series A Preferred Shares.

Holders of Series A Preferred Shares will have limited voting rights.

Holders of the Series A Preferred Shares have limited voting rights. Our Class A common shares and our non-economic shares are currently the only shares of beneficial interest of our company with full voting rights. Voting rights for holders of Series A Preferred Shares exist primarily with respect to the right to elect two additional trustees to our Board of Trustees in the event that six quarterly dividends (whether or not consecutive) payable on the Series A Preferred Shares are in arrears, and with respect to voting on amendments to our Declaration of Trust or articles supplementary relating to the Series A Preferred Shares that would materially and adversely affect the rights of holders of the Series A Preferred Shares or create additional classes or series of our shares that are senior to the Series A Preferred Shares with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of our affairs. Other than in limited circumstances, holders of Series A Preferred Shares will not have any voting rights.

ITEM 1B. UNRESOLVED STAFF COMMENTS

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

- 26 -

ITEM 2. PROPERTIES

As of December 31, 2019, the Company’s portfolio consisted of interests in 212 properties totaling approximately 33.4 million square feet of GLA, including 184 Wholly Owned Properties totaling approximately 28.7 million square feet of GLA across 44 states and Puerto Rico and interests in 28 JV Properties totaling approximately 4.7 million square feet of GLA across 14 states.  The following tables set forth certain information regarding our Wholly Owned Properties and JV Properties based on signed leases as of December 31, 2019, including signed but not yet open leases (“SNO” or “SNO Leases”), and after giving effect to all pending recapture and termination notices:

Wholly Owned Properties
				GLA (2)
	City	State	Holdco Master Lease (1)	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (2)	Leased (2)
1	Anchorage	AK			158,500		130,600		—		27,900	Safeway, Guitar Center, Nordstrom Rack		82.4	%
2	Cullman	AL			88,500		88,500		—		—	Bargain Hunt, Tractor Supply, Planet Fitness		100.0	%
3	North Little Rock	AR	X, (3)		177,000		9,800		—		167,200	Aspen Dental, Longhorn Steakhouse		5.5	%
4	Mesa	AZ			121,900		16,800		—		105,100	n/a		13.8	%
5	Peoria	AZ			104,400		104,400		—		—	At Home		100.0	%
6	Phoenix	AZ			144,200		12,000		—		132,200	n/a		8.3	%
7	Phoenix	AZ			151,200		151,200		—		—	At Home		100.0	%
8	Prescott	AZ	X, (3)		102,300		—		—		102,300	n/a		0.0	%
9	Sierra Vista	AZ			94,700		—		—		94,700	n/a		0.0	%
10	Tucson	AZ			218,900		75,500		—		143,400	Round One Entertainment, Carvana		34.5	%
11	Yuma	AZ			90,400		—		—		90,400	n/a		0.0	%
12	Antioch	CA			95,200		—		—		95,200	n/a		0.0	%
13	Big Bear Lake	CA	X		80,000		4,000		69,300		6,700	Kmart, Wells Fargo Bank		91.6	%
14	Carson	CA			182,200		109,700		—		72,500	Burlington Stores, Ross Dress for Less		60.2	%
15	Chula Vista	CA	X, (3)		250,100		—		—		250,100	n/a		0.0	%
16	Citrus Heights	CA			289,500		—		—		289,500	n/a		0.0	%
17	Delano	CA			86,100		—		—		86,100	n/a		0.0	%
18	El Cajon	CA			244,900		187,700		—		57,200	Ashley Furniture, Bob’s Discount Furniture, Burlington Stores, Extra Space Storage		76.6	%
19	El Centro	CA			139,700		52,600		—		87,100	Hobby Lobby		37.7	%
20	Fairfield	CA			163,500		45,100		—		118,400	Dave & Busters		27.6	%
21	Florin	CA			329,700		69,000		—		260,700	Maya Cinemas		20.9	%
22	Fresno	CA	X, (3)		216,600		43,400		—		173,200	Ross Dress for Less, dd's Discounts		20.0	%
23	McKinleyville	CA	X		94,800		—		94,800		—	Kmart		100.0	%
24	Merced	CA			92,600		79,800		—		12,800	Burlington Stores, dd's Discounts, Five Below		86.2	%
25	Montclair	CA	X, (3)		174,700		—		—		174,700	n/a		0.0	%
26	Moreno Valley	CA	X, (3)		169,400		—		—		169,400	n/a		0.0	%
27	Newark	CA			145,800		36,000		—		109,800	n/a		24.7	%
28	North Hollywood	CA	X, (3)		161,900		74,900		—		87,000	Burlington Stores, Ross Dress for Less		46.3	%
29	Palm Desert	CA	X, (3)		136,500		28,800		—		107,700	Dave & Busters		21.1	%
30	Ramona	CA	X		107,500		14,700		87,000		5,800	Kmart, Dollar Tree		94.6	%
31	Riverside	CA	X, (3)		214,200		12,200		—		202,000	Bank of America		5.7	%
32	Riverside	CA			132,600		38,100		—		94,500	Stater Brothers		28.7	%
33	Roseville	CA			136,200		119,900		—		16,300	Cinemark, AAA, Round One Entertainment		88.0	%
34	Salinas	CA	X		133,000		—		133,000		—	Sears		100.0	%
35	San Bernardino	CA	X, (3)		264,700		—		—		264,700	n/a		0.0	%
36	San Bruno	CA	X, (3)		276,600		39,400		—		237,200	n/a		14.2	%
37	San Jose	CA	X, (3)		262,500		—		—		262,500	n/a		0.0	%
38	Santa Maria	CA	X, (3)		108,600		—		—		108,600	n/a		0.0	%
39	Santa Paula	CA	X, (3)		71,300		—		—		71,300	n/a		0.0	%
40	Temecula	CA	X, (3)		120,100		48,700		—		71,400	Round One Entertainment		40.5	%

- 27 -

Wholly Owned Properties
				GLA (2)
	City	State	Holdco Master Lease (1)	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (2)	Leased (2)
41	Thousand Oaks	CA			161,400		161,400		—		—	Dave & Busters, DSW		100.0	%
42	Ventura	CA	X, (3)		178,600		12,000		—		166,600	n/a		6.7	%
43	West Covina	CA	X, (3)		142,000		—		—		142,000	n/a		0.0	%
44	Westminster	CA			197,900		—		—		197,900	n/a		0.0	%
45	Lakewood	CO			153,000		12,000		—		141,000	n/a		7.8	%
46	Thornton	CO			203,100		154,400		—		48,700	Extra Space Storage, Vasa Fitness		76.0	%
47	Waterford	CT			149,200		—		—		149,200	n/a		0.0	%
48	Rehoboth Beach	DE	X, (3)		118,300		53,100		—		65,200	andThat!, PetSmart		44.9	%
49	Boca Raton	FL			178,500		4,200		—		174,300	Washington Mutual		2.4	%
50	Bradenton	FL	X, (3)		82,900		—		—		82,900	n/a		0.0	%
51	Clearwater	FL			211,300		87,600		—		123,700	Whole Foods, Nordstrom Rack		41.5	%
52	Doral	FL			212,900		—		—		212,900	n/a		0.0	%
53	Ft. Myers	FL	X, (3)		146,800		—		—		146,800	n/a		0.0	%
54	Hialeah	FL	X, (4)		148,200		95,100		—		53,100	Paragon Theater, Five Below, Ulta Beauty, Forever 21, Blink Fitness		64.2	%
55	Hialeah	FL			106,300		106,300		—		—	Aldi, Bed Bath & Beyond, Ross Dress for Less, dd’s Discounts		100.0	%
56	Kissimmee	FL			140,400		103,400		—		37,000	Big Lots, Conn's, Planet Fitness		73.6	%
57	Lakeland	FL			156,200		—		—		156,200	n/a		0.0	%
58	Melbourne	FL			102,600		—		—		102,600	n/a		0.0	%
59	Aventura	FL			215,500		107,300		—		108,200	Mercado del Rio, Pinstripes, Industrious		49.8	%
60	Miami	FL	X, (3)		170,100		—		—		170,100	n/a		0.0	%
61	North Miami	FL			125,400		125,400		—		—	Aldi, Burlington Stores, Ross Dress for Less, Michaels Stores		100.0	%
62	Ocala	FL			146,200		—		—		146,200	n/a		0.0	%
63	Orange Park	FL			87,400		87,400		—		—	Freddy's Frozen Custard, Old Time Pottery		100.0	%
64	Orlando	FL			135,700		128,700		—		7,000	EOS Fitness, Floor & Décor		94.8	%
65	Panama City	FL			139,300		—		—		139,300	n/a		0.0	%
66	Pensacola	FL			122,100		108,900		—		13,200	BJ's Wholesale Club, Bubba's 33		89.2	%
67	Plantation	FL			184,400		151,000		—		33,400	GameTime, Lazy Dog, Powerhouse Gym, Whiskey Cake		81.9	%
68	Sarasota	FL			212,400		—		—		212,400	n/a		0.0	%
69	St. Petersburg	FL	X, (4)		113,800		98,800		—		15,000	At Home		86.8	%
70	St. Petersburg	FL			149,300		138,400		—		10,900	Dick's Sporting Goods, Five Below, Longhorn Steakhouse, PetSmart		92.7	%
71	Savannah	GA			167,300		—		—		167,300	n/a		0.0	%
72	Honolulu	HI			76,100		76,100		—		—	Long's Drugs (CVS), Ross Dress for Less, PetSmart		100.0	%
73	Algona	IA	X, (3)		99,300		—		—		99,300	n/a		0.0	%
74	Cedar Rapids	IA			146,000		—		—		146,000	n/a		0.0	%
75	Charles City	IA	X, (3)		96,600		—		—		96,600	n/a		0.0	%
76	Webster City	IA			40,800		—		—		40,800	n/a		0.0	%
77	Boise	ID			123,600		—		—		123,600	n/a		0.0	%
78	Chicago	IL			356,700		42,000		—		314,700	24 Hour Fitness		11.8	%
79	Chicago	IL			293,700		75,300		—		218,400	24 Hour Fitness		25.6	%
80	Chicago	IL			120,700		89,100		—		31,600	Ross Dress for Less, dd's Discounts, Five Below		73.8	%

- 28 -

Wholly Owned Properties
				GLA (2)
	City	State	Holdco Master Lease (1)	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (2)	Leased (2)
81	Homewood	IL			196,100		196,100		—		—	Wal-Mart		100.0	%
82	Joliet	IL			204,600		40,100		—		164,500	24 Hour Fitness		19.6	%
83	Lombard	IL			139,300		139,300		—		—	The Dump		100.0	%
84	North Riverside	IL	X		196,500		69,900		94,200		32,400	Round One Entertainment, Blink Fitness, Sears		83.5	%
85	Orland Park	IL			140,000		85,600		—		54,400	AMC, 24 Hour Fitness		61.1	%
86	Springfield	IL			119,500		101,000		—		18,500	Binny's Beverage Depot, Burlington Stores, Marshalls		84.5	%
87	Steger	IL			87,400		—		—		87,400	n/a		0.0	%
88	Elkhart	IN			86,600		86,600		—		—	Big R Stores		100.0	%
89	Ft. Wayne	IN			84,400		63,700		—		20,700	Dave & Busters, Five Below, HomeGoods		75.5	%
90	Merrillville	IN			170,900		148,900		—		22,000	At Home, Dollar Tree		87.1	%
91	Overland Park	KS			215,000		12,000		—		203,000	n/a		5.6	%
92	Hopkinsville	KY			85,100		64,600		—		20,500	Bargain Hunt, Farmer's Furniture, Harbor Freight		75.9	%
93	Paducah	KY			97,300		66,800		—		30,500	Burlington Stores, Ross Dress for Less		68.7	%
94	Lafayette	LA			194,900		—		—		194,900	n/a		0.0	%
95	New Iberia	LA			114,600		114,600		—		—	Rouse Supermarkets, Ross Dress for Less, Hobby Lobby		100.0	%
96	Braintree	MA			89,700		85,000		—		4,700	Nordstrom Rack, Ulta Beauty		94.8	%
97	Saugus	MA	X		210,700		111,700		6,100		92,900	APEX Entertainment, Sears		55.9	%
98	Bowie	MD			130,500		22,500		—		108,000	BJ's Brewhouse, Carvana		17.2	%
99	Edgewater	MD	X		117,200		—		117,200		—	Kmart		100.0	%
100	Madawaska	ME			49,700		—		—		49,700	n/a		0.0	%
101	Lincoln Park	MI			301,700		68,800		—		232,900	Bank of America, Burlington Stores, Planet Fitness		22.8	%
102	Manistee	MI			94,700		—		—		94,700	n/a		0.0	%
103	Roseville	MI			364,600		154,600		—		210,000	At Home, Hobby Lobby		42.4	%
104	Sault Ste. Marie	MI			92,700		—		—		92,700	n/a		0.0	%
105	St. Clair Shores	MI			103,000		103,000		—		—	Kroger		100.0	%
106	Troy	MI			379,600		99,200		—		280,400	At Home		26.1	%
107	Ypsilanti	MI			99,400		99,400		—		—	At Home		100.0	%
108	Burnsville	MN			167,300		—		—		167,300	n/a		0.0	%
109	Maplewood	MN			175,000		—		—		175,000	n/a		0.0	%
110	St. Paul	MN			217,900		100		—		217,800	n/a		0.0	%
111	Florissant	MO			124,000		21,300		—		102,700	Chick-fil-A		17.2	%
112	Jefferson City	MO			97,700		97,700		—		—	Orscheln Farm and Home, Ruby Tuesday		100.0	%
113	Springfield	MO			112,900		112,900		—		—	At Home		100.0	%
114	Columbus	MS			166,700		45,400		—		121,300	Bargain Hunt		27.2	%
115	Asheville	NC			110,600		45,000		—		65,600	Alamo Drafthouse		40.7	%
116	Greensboro	NC			178,500		140,000		—		38,500	Floor & Décor, Gabriel Brothers		78.4	%
117	Kearney	NE			64,900		64,900		—		—	Ross Dress for Less, Five Below, Marshall's		100.0	%
118	Manchester	NH			106,600		80,400		—		26,200	Dick's Sporting Goods, Dave & Buster's		75.4	%
119	Nashua	NH	X, (3)		167,100		—		—		167,100	n/a		0.0	%
120	Portsmouth	NH			127,100		—		—		127,100	n/a		0.0	%

- 29 -

Wholly Owned Properties
				GLA (2)
	City	State	Holdco Master Lease (1)	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (2)	Leased (2)
121	Salem	NH			207,200		123,000		—		84,200	Cinemark, Dick's Sporting Goods		59.4	%
122	Middletown	NJ			191,200		191,200		—		—	ShopRite, Investors Bank		100.0	%
123	Watchung	NJ			116,400		111,400		—		5,000	Cinemark, HomeGoods, Sierra Trading Post, Ulta Beauty, Chick-fil-A		95.7	%
124	Deming	NM			96,600		—		—		96,600	n/a		0.0	%
125	Henderson	NV			143,500		143,500		—		—	At Home, Seafood City		100.0	%
126	Las Vegas	NV	X, (3)		130,300		42,500		—		87,800	Round One Entertainment		32.6	%
127	Reno	NV			162,700		41,300		—		121,400	Round One Entertainment		25.4	%
128	Albany	NY			277,900		80,200		—		197,700	Whole Foods, REI, Ethan Allen		28.9	%
129	Clay	NY			146,500		—		—		146,500	n/a		0.0	%
130	East Northport	NY			179,700		93,300		—		86,400	24 Hour Fitness, AMC		51.9	%
131	Hicksville	NY			284,800		100,700		—		184,100	24 Hour Fitness, Chipotle		35.4	%
132	Olean	NY			120,700		55,400		—		65,300	Marshall's, Ollie's Bargain Hunt		45.9	%
133	Rochester	NY			128,500		—		—		128,500	n/a		0.0	%
134	Sidney	NY	X, (3)		94,400		—		—		94,400	n/a		0.0	%
135	Victor	NY			122,700		102,600		—		20,100	Dick's Sporting Goods		83.6	%
136	Yorktown Heights	NY			160,000		38,500		—		121,500	24 Hour Fitness		24.1	%
137	Canton	OH	X, (4)		190,600		124,400		—		66,200	Dick's Sporting Goods, Dave & Busters, Cheddar's		65.3	%
138	Akron	OH			194,700		—		—		194,700	n/a		0.0	%
139	Dayton	OH			180,200		13,400		—		166,800	Outback Steakhouse		7.4	%
140	Kenton	OH			96,100		—		—		96,100	n/a		0.0	%
141	Mentor	OH			219,100		—		—		219,100	n/a		0.0	%
142	Middleburg Heights	OH			359,000		35,800		—		323,200	Carvana		10.0	%
143	North Canton	OH	X, (3)		87,100		2,900		—		84,200	Burger King		3.3	%
144	Toledo	OH			218,700		—		—		218,700	n/a		0.0	%
145	Oklahoma City	OK			223,600		50,300		—		173,300	Vasa Fitness		22.5	%
146	Tulsa	OK			87,200		87,200		—		—	Hobby Lobby		100.0	%
147	Happy Valley	OR			144,300		45,000		—		99,300	Dick's Sporting Goods		31.2	%
148	Columbia	PA	X		86,700		—		86,700		—	Kmart		100.0	%
149	King of Prussia (5)	PA			210,800		174,500		—		36,300	Dick's Sporting Goods, Primark, Outback Steakhouse, Yardhouse		82.8	%
150	Lebanon	PA	X, (3)		117,200		—		—		117,200	n/a		0.0	%
151	Mount Pleasant	PA			86,300		58,400		—		27,900	Aldi, Big Lots		67.7	%
152	Walnutport	PA	X		121,200		—		121,200		—	Kmart		100.0	%
153	Bayamon	PR	X		114,600		—		114,600		—	Kmart		100.0	%
154	Caguas	PR	X		138,700		—		138,700		—	Sears		100.0	%
155	Carolina	PR	X		198,000		—		198,000		—	Sears		100.0	%
156	Guaynabo	PR	X		223,500		147,600		57,700		18,200	Capri, McDonald’s., Kmart, Planet Fitness, Supermercado Amigo		91.9	%
157	Mayaguez	PR	X		118,200		—		118,200		—	Kmart		100.0	%
158	Ponce	PR	X		126,900		—		126,900		—	Kmart		100.0	%
159	Warwick	RI			131,500		123,100		—		8,400	At Home, Hook & Reel, Skechers		93.6	%
160	Anderson	SC			119,300		119,300		—		—	Burlington Stores, Gold's Gym		100.0	%

- 30 -

Wholly Owned Properties
				GLA (2)
	City	State	Holdco Master Lease (1)	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (2)	Leased (2)
161	Charleston	SC			121,300		67,800		—		53,500	Burlington Stores, Carrabba’s Italian Grill		55.9	%
162	Cordova	TN			160,900		—		—		160,900	n/a		0.0	%
163	Memphis	TN			112,700		98,800		—		13,900	LA Fitness, Hopdoddy, Nordstrom Rack		87.7	%
164	Austin	TX			52,700		52,700		—		—	AMC, Discovery		100.0	%
165	El Paso	TX			114,200		68,700		—		45,500	Ross Dress for Less, dd's Discount, Five Below		60.2	%
166	Friendswood	TX			166,000		—		—		166,000	n/a		0.0	%
167	Houston	TX			214,400		214,400		—		—	MetroNational		100.0	%
168	Houston	TX			134,000		134,000		—		—	At Home		100.0	%
169	Ingram	TX			168,400		—		—		168,400	n/a		0.0	%
170	Irving	TX			92,000		76,800		—		15,200	Conn's, Chick-fil-A, Carvana		83.5	%
171	San Antonio	TX			164,200		157,800		—		6,400	Bed Bath & Beyond, buybuyBaby, Painted Treehouse, Tru Fit		96.1	%
172	Houston	TX	X		201,700		—		201,700		—	Sears		100.0	%
173	Valley View	TX			235,000		58,500		—		176,500	n/a		24.9	%
174	Westwood	TX			213,600		213,600		—		—	n/a		100.0	%
175	Layton	UT			176,800		148,700		—		28,100	Arby's, Vasa Fitness		84.1	%
176	West Jordan	UT			171,000		171,000		—		—	At Home, Burlington Stores, Planet Fitness		100.0	%
177	Alexandria	VA	X		262,100		9,600		252,500		—	Lands' End, Sears		100.0	%
178	Chesapeake	VA			162,000		82,000		—		80,000	Rosie's		50.6	%
179	Fairfax	VA			211,000		179,400		—		31,600	Dick's Sporting Goods, Dave & Busters, Lazy Dog		85.0	%
180	Virginia Beach	VA			197,300		110,400		—		86,900	The Fresh Market, Nordstrom Rack,  REI		56.0	%
181	Warrenton	VA			75,500		62,200		—		13,300	Five Below, HomeGoods, Planet Fitness		82.4	%
182	Redmond	WA			230,700		—		—		230,700	n/a		0.0	%
183	Greendale	WI			187,400		141,400		—		46,000	Dick's Sporting Goods, Round One Entertainment		75.5	%
184	Madison	WI			112,800		110,600		—		2,200	Dave & Busters, Hobby Lobby, Total Wine & More		98.0	%
	Total - Wholly Owned Properties				28,720,800		10,415,700		2,017,800		16,287,300			43.3	%

(1) Property subject to the Holdco Master Lease.

(2) Based on signed leases as of December 31, 2019, including SNO Leases.

(3) Property subject to termination notices pursuant to the terms of the Holdco Master Lease.

(4) Property subject to recapture notices pursuant to the terms of the Holdco Master Lease.

(5) Property subject to a ground lease.

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JV Properties
					GLA (1)
		City	State	Joint Venture	Total		Diversified		Sears or Kmart		Not Leased		Significant Tenants (1)	Leased (1)
1		Natick (2)	MA	GGP I JV		190,700		40,100		—		150,600	Dave & Busters		21.0	%
2		Norman (2)	OK	GGP I JV		66,900		—		—		66,900	n/a		0.0	%
3		Frisco	TX	GGP I JV		162,900		—		—		162,900	n/a		0.0	%
4		Lynnwood	WA	GGP I JV		100,000		49,300		—		50,700	Dave & Busters, Cheesecake Factory		49.3	%
5		Northridge (3)	CA	GGP II JV		291,700		237,500		—		54,200	Ashley Furniture, Curacao, Dick's Sporting Goods		81.4	%
6		Altamonte Springs	FL	GGP II JV		184,400		77,400		—		107,000	Seasons 52, Main Event, Yardhouse		42.0	%
7		Naples	FL	GGP II JV		83,800		59,400		—		24,400	CMX Cinebistro, Uncle Julio’s		70.9	%
8		Atlanta	GA	GGP II JV		193,900		193,900		—		—	Dick's Sporting Goods, Planet Fitness, Round One Entertainment		100.0	%
9		Wayne	NJ	GGP II JV		281,000		100,400		—		180,600	Cinemark, Dave & Busters, Yardhouse		35.7	%
10		Chandler	AZ	Macerich JV		139,500		74,000		—		65,500	Firestone		53.0	%
11		Glendale	AZ	Macerich JV		125,000		—		—		125,000	n/a		0.0	%
12		Cerritos	CA	Macerich JV		277,600		—		—		277,600	n/a		0.0	%
13		Modesto	CA	Macerich JV		148,500		80,500		—		68,000	Dave & Busters, Dick's Sporting Goods		54.2	%
14		Danbury	CT	Macerich JV		178,500		70,100		108,400		—	Primark, Sears		100.0	%
15		Deptford	NJ	Macerich JV		191,700		145,900		—		45,800	Dick's Sporting Goods, Round One Entertainment, Crunch Fitness		76.1	%
16		Freehold	NJ	Macerich JV		138,800		132,700		6,100		—	Primark, Sears		100.0	%
17		Portland	OR	Macerich JV		220,000		—		—		220,000	n/a		0.0	%
18		Lubbock	TX	Macerich JV		150,600		—		—		150,600	n/a		0.0	%
19		Santa Rosa	CA	Simon JV		165,400		—		—		165,400	n/a		0.0	%
20		Ann Arbor	MI	Simon JV		170,600		—		—		170,600	n/a		0.0	%
21		Nanuet	NY	Simon JV		221,400		—		—		221,400	n/a		0.0	%
22		Tulsa	OK	Simon JV		150,200		—		—		150,200	n/a		0.0	%
23		Austin	TX	Simon JV		164,600		—		—		164,600	n/a		0.0	%
24		Santa Monica	CA	Mark 302 JV		103,000		—		—		103,000	n/a		0.0	%
25		San Diego	CA	UTC JV		226,300		150,400		—		75,900	Equinox, Maison Tang, Pinstripes, CB2, Industrious		66.5	%
26		West Hartford	CT	West Hartford JV		163,700		146,700		—		17,000	buybuy Baby, REI, Cost Plus World Market, Shake Shack, Saks OFF 5th		89.6	%
27		Cockeysville	MD	Cockeysville JV		160,200		98,300		—		61,900	HomeGoods, Michaels Stores, OneLife Fitness		61.4	%
28		Austin	TX	Tech Ridge JV		—		—		—		—	n/a		0.0	%
		Total - JV Properties				4,650,900		1,656,600		114,500		2,879,800			38.1	%
(1)     Based on signed leases as of December 31, 2019, including SNO Leases.
(2)     Property subject to a lease or ground lease.
(3)     Property subject to a termination notice pursuant to the terms of the lease between the Company’s unconsolidated joint venture and Holdco.
	212	Grand Total - All Properties				33,371,700		12,072,300		2,132,300		19,167,100			42.6	%
	212	Grand Total - All Properties (at share)				31,046,250		11,244,000		2,075,050		17,727,200			42.9	%

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

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

(1) Includes 35 states.

The Holdco Master Lease

On February 28, 2019, the Company and certain affiliates of Holdco executed the Holdco Master Lease which became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the original master lease between the Company and certain affiliates of Sears Holdings (the “Original Master Lease”).  The Company analyzed this transaction under applicable accounting guidance and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification in accordance with ASC 842.

The structure of the Holdco Master Lease is consistent with the structure of the Original Master Lease in all material respects, including (i) it is a unitary, non-divisible lease as to all properties, pursuant to which the tenant’s obligations as to each property are cross-defaulted with all obligations of the tenant with respect to all other properties; (ii) it is a triple net lease with respect to all space which is leased thereunder to the tenant, subject to proportional sharing by the tenant for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by the tenant and other space occupied by other tenants in the same or other buildings, space which is recaptured pursuant to the Company’s recapture rights described below and all other space which is constructed on the properties; (iii) the tenant 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; and (iv) the tenant is generally prohibited from subleasing any space demised under the lease.

Term and Renewals

Consistent with the terms of the Original Master Lease, the Holdco Master Lease will expire in July 2025, and contains three options for five-year renewals of the term and a final option for a four-year renewal, as was the case under the Original Master Lease.

The Holdco Master Lease provides for an initial base rent at the same rates which were in place at the time of the modification for accounting purposes. In each of the initial term and the first two renewal terms, consistent with the Original Master Lease, base rent under the Holdco Master Lease will be increased in August of each year by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, consistent with the Original Master Lease, rent will be set at the commencement of the renewal term for the Holdco Master Lease at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Holdco 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 base rent under the Holdco Master Lease will be subject to an adjustment in the form of a rent credit of up to approximately $12 million in each of the first and second years of the Holdco Master Lease.  The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018.  If any such properties are recaptured by the Company or terminated by Holdco, the base rent credit attributable to such property will no longer be applicable.  The rent credit is applicable to base rent only and Holdco is responsible for

- 33 -

repair and maintenance charges, real property taxes, insurance and other costs and expenses associated with its occupancy of the subject properties.

Seritage Recapture Rights

The Holdco Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by the tenant at all properties (other than five specified properties) and 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 parking areas and common areas.  Upon exercise of any of these partial recapture rights, the Company will generally incur, as applicable, certain costs and expenses for the separation of the recaptured space from the remaining tenant space.

Additionally, in contrast to the Original Master Lease, which permitted the Company to recapture 100% of certain properties upon payment of a specified recapture fee, the Holdco Master Lease provides the Company with the right, beginning in March 2020, to recapture 100% of the space occupied by the tenant at any of the properties included in the Holdco Master Lease (other than five specified properties) without paying a recapture fee.  This right to recapture 100% of any property is limited to 10 properties in each year of the Holdco Master Lease term, with carry-over rights if less than 10 properties are recaptured in any given lease year.  In the event of a 100% recapture of a property (or termination of a property by Holdco that is subject to a termination fee) and any subsequent redevelopment of such property for retail purposes, Holdco has certain rights of first offer to lease space at specified predefined rates depending on the condition the space is delivered.  If the Company does not provide Holdco with a right of first offer on at least one-third of any such properties that are recaptured 100% by the Company (or terminated by Holdco with payment of a termination fee) in a given lease year, then the Company’s 100% recapture rights are subject to payment of a recapture fee until such time as the Company has complied with the foregoing ratio.

Upon the exercise of any of its recapture rights, the Company can reconfigure and rent the recaptured space to new tenants on potentially superior terms as determined by the Company and for its own account.

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

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

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

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

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

Holdco Termination Rights

Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, beginning in March 2020, Holdco has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year of the term of the Holdco Master Lease, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.

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

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The following table provides a summary of Sears Holdings’ and Holdco’s termination activity (excluding 31 properties totaling 4.3 million square feet that were rejected on March 12, 2019 as part of Sears Holdings’ bankruptcy filing):

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

(1) Two properties were terminated in October 2018.

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

As of December 31, 2019, the Company had commenced or completed redevelopment projects at 46 of the terminated properties and sold an additional 24 of the terminated properties. The Company intends to continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears or Kmart.

Tenant Overview

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

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

(1) Includes 17 properties subject to the Holdco Master Lease and two leases between the Company’s unconsolidated joint ventures and Holdco.

(2) Excludes 32 properties subject to previously exercised recapture or terminations notices.

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Top Tenants

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

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

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

(1) Includes 17 properties subject to the Holdco Master Lease and two leases between the Company’s unconsolidated joint ventures and Holdco.

(2) Excludes 32 properties subject to previously exercised recapture or terminations notices.

- 36 -

Lease Expirations

The following table sets forth a summary schedule of lease expirations for signed leases, including SNO leases, as of December 31, 2019, including JV Properties presented at the Company’s proportional share and giving effect to all pending recapture and termination notices.  The information set forth in the table assumes that no other tenants exercise renewal options or early termination rights: 

(in thousands except number of leases)
Year	Number of Leases (1)		Leased GLA		% of Total Leased GLA			Annual Rent		% of Total Annual Rent
Month-to-Month		11		38		0.3	%	$	442		0.2	%
2020		11		96		0.7	%		1,312		0.7	%
2021		14		227		1.7	%		2,265		1.2	%
2022		22		450		3.4	%		4,257		2.2	%
2023		16		445		3.3	%		7,402		3.9	%
2024		18		379		2.9	%		4,351		2.3	%
2025 (1)(2)		30		2,472		18.6	%		14,707		7.7	%
2026		18		428		3.2	%		7,408		3.9	%
2027		12		412		3.1	%		4,400		2.3	%
2028		36		825		6.2	%		13,027		6.8	%
2029		67		1,540		11.6	%		25,308		13.2	%
Thereafter		46		1,804		13.5	%		22,807		11.9	%
SNO Leases		174		4,204		31.6	%		84,348		43.9	%
Total		475		13,320		100.0	%	$	192,034		100.0	%

(1) Includes 17 properties subject to the Holdco Master Lease and two leases between the Company’s unconsolidated joint ventures and Holdco.

(2)     Excludes 32 properties subject to previously exercised recapture or terminations notices.

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ITEM 3. LEGAL PROCEEDINGS

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, and the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (the Company, the Operating Partnership, and certain of our affiliates and subsidiaries collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of the proceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.  

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On November 25, 2019, the Creditors’ Committee filed a first amended complaint (the “Amended Complaint”) in the Bankruptcy Court naming us and certain of our affiliates, as well as affiliates of ESL and Sears Holdings, and certain other third parties, as defendants. The Amended Complaint alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 (including the July 2015 transactions giving rise to Seritage, the execution of the Master Lease with Sears Holdings (the “Original Master Lease”), and the acquisition of real estate from Sears Holdings) constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings and that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth hundreds of millions of dollars more than the purchase price paid.  The Amended Complaint further alleges that certain releases provided to Seritage and certain other defendants in connection with the Sears Holdings derivative litigation in the Delaware Court of Chancery in 2017 should be avoided and/or declared null and void as an actual and/or constructive fraudulent conveyance.  The Amended Complaint seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers, disgorgement, recovery of the property fraudulently transferred or, in the alternative, compensatory damages in an unspecified amount to be determined at trial, equitable subordination and disallowance of defendants’ claims as creditors, punitive and exemplary damages for any intentional wrongdoing, and reasonable attorneys’ fees, costs, and expenses. On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination.  The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intends to defend against them vigorously.

In addition to the litigation described above, 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. As of December 31, 2019, and December 31, 2018, the Company did not record any amounts for litigation or other matters.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

- 38 -

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 following graph provides a comparison, from July 6, 2015 through December 31, 2019, 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 LLC.

Index		7/6/15		12/31/15			12/31/16		12/31/17		12/31/18		12/31/19
Seritage Growth Properties	Cum $		100		138			149		145		119		148
	Return %				37.6			49.3		44.7		18.7		48.0
S&P 500	Cum $		100		100			112		136		130		171
	Return %				(0.2	)		11.8		36.2		30.2		71.2
SNL US REIT Equity	Cum $		100		106			116		125		119		153
	Return %				6.3			15.7		25.3		19.1		53.0

Common Shares and Operating Partnership Units

On February 21, 2020, the reported closing sale price per share of our Class A common stock on the NYSE was $37.93.

As of February 21, 2020, there were 36,902,940 Class A common shares issued and outstanding which were held by approximately 139 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 21, 2020, there were 1,242,536 Class B non-economic common shares issued and outstanding and 18,904,645 outstanding Operating Partnership units (“OP Units”) held by limited partners other than the Company.  There are no Class C non-voting common shares outstanding.

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.

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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.

The OP Units are generally exchangeable into shares of Class A common stock on a one-for-one basis.

Share-Based Compensation

The following table provides information with respect to the Company’s equity compensation plan at December 31, 2019:

	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)
Equity compensation plans approved    by security holders		351,284	(1)	n/a		(2)		2,591,816	(3)
Equity compensation plans not    approved by security holders		—			—			—
Total		351,284			—			2,591,816

(1) Represents restricted stock awards and units previously granted and that remain unvested as of December 31, 2019.

(2) Weighted average exercise price does not apply to restricted stock units (“RSU”).

(3) 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 441,349 shares subject to grants of RSUs previously granted (including those that remain unvested reported in column (a)).

Dividends and Distributions

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.

The Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for remainder of 2020.  The Company intends to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s preferred shares.

REIT Election

We have elected to be treated as a REIT for U.S. federal income tax 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 its 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 U.S. federal income tax 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:

(dollars and square foot amounts in thousands)
													July 7, 2015
													(Date Operations
	Year Ended December 31,												Commenced) to
	2019			2018			2017			2016			December 31, 2015
Operating Data
Total revenue	$	168,633		$	214,754		$	241,017		$	248,674		$	113,571
Total expenses		224,455			332,871			355,584			279,121			122,944
Equity in (loss) income of unconsolidated    joint ventures		(17,994	)		(10,448	)		(7,788	)		4,646			4,772
Net loss		(90,603	)		(114,878	)		(120,813	)		(91,009	)		(38,803	)
Net loss attributable to common shareholders		(64,297	)		(78,375	)		(73,999	)		(51,558	)		(22,338	)
Net loss per share attributable to Class A and    Class C common shareholders -    Basic and diluted		(1.77	)		(2.20	)		(2.19	)		(1.64	)		(0.71	)
Dividends declared per share		0.25			1.00			1.00			1.00			0.50
Total NOI (1)		72,667			143,107			174,758			190,492			89,493
Funds from Operations ("FFO") (1)		(33,793	)		24,111			91,690			106,475			36,061
Company FFO (1)		(33,896	)		15,746			81,797			127,326			61,954
Cash Flow Data (2)
Operating activities	$	(57,660	)	$	54,899		$	59,609		$	97,215		$	18,179
Investing activities		(299,490	)		(119,475	)		37,189			(62,429	)		(2,638,432	)
Financing activities		(36,447	)		180,199			180,794			(50,486	)		2,775,595
	December 31,
	2019			2018			2017			2016			2015
Balance Sheet Data
Investment in real estate, net	$	1,970,633		$	1,751,067		$	1,714,560		$	1,644,952		$	1,639,275
Total assets		2,750,612			2,876,076			2,775,817			2,712,237			2,833,359
Term loan facility, net		1,598,487			1,598,053			—			—			—
Mortgage loans payable, net		—			—			1,202,314			1,166,871			1,142,422
Total liabilities		1,707,242			1,725,618			1,454,957			1,287,926			1,263,282
Non-controlling interests		311,951			369,688			434,164			619,754			683,382
Total equity		1,043,370			1,150,458			1,320,860			1,424,311			1,570,077
Other Data (3)
Number of properties		212			232			253			266			266
Gross leasable area (sq. ft.)		31,046			33,951			37,270			39,522			39,743
Percentage leased		42.6	%		67.0	%		80.0	%		99.2	%		99.4	%
Annual rent	$	192,034		$	210,838		$	214,676		$	231,675		$	202,938
Rent PSF		14.42			9.36			7.20			5.91			5.13

(1) Total NOI, FFO and Company FFO are supplemental, non-GAAP financial measurements and do not represent net income as defined by GAAP. For reconciliations of these measures to the respective GAAP measures that we deem most comparable, see “Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures” below.

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

(3) Other than number of properties, data is based on signed leases as of December 31, 2019, 2018, 2017, 2016 and 2015, respectively, including JV Properties presented at the Company’s proportional share and after giving effect to all pending recapture and termination notices.

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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 accounting principles generally accepted in the United States (“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, 2019, the Company’s portfolio consisted of interests in 212 properties totaling approximately 33.4 million square feet of gross leasable area, including 184 Wholly Owned Properties totaling approximately 28.7 million square feet of GLA across 44 states and Puerto Rico, and interests in 28 JV Properties totaling approximately 4.7 million square feet of GLA across 14 states.

We were formed to unlock the underlying real estate value of a high-quality retail portfolio we acquired from Sears Holdings in July 2015 and 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 retail orientation to one comprised predominately of multi-tenant shopping centers, multifamily properties and larger-scale, mixed-use environments.

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.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the Bankruptcy Court.  On February 28, 2019, the Company and Holdco, an affiliate of ESL Investments, Inc., executed the Holdco Master Lease with respect to 51 Wholly Owned Properties, which became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.

As of December 31, 2019, the Company leased space at 48 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at three JV Properties. As of December 31, 2019, three Wholly Owned Properties were subject to 100% recapture notices pursuant to the terms of the Holdco Master Lease, and 28 Wholly Owned Properties and one JV Property were subject to termination notices pursuant to the terms of the Holdco Master Lease and the lease with Holdco at the JV Property, respectively.  Giving effect to this recapture and termination activity, the Company leased space at 17 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at two JV Properties.

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco.  Mr. Lampert is also the Chairman of Seritage and controls each of the tenant entities that is a party to the Holdco Master Lease.

Asset Sales and Joint Ventures

During the year ended December 31, 2019, the Company sold 21 properties, plus additional outparcels, totaling 2.5 million square feet and generated gross proceeds of $144.3 million and also completed two joint ventures with adjacent property owners that generated an additional $10.9 million of gross proceeds.

Subsequent to December 31, 2019, the Company sold three assets for $57 million and entered into contracts to sell an additional seven assets.  As of February 28, 2020, the Company had assets under contract to sell for anticipated proceeds of $125 million, subject to certain closing conditions.

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Effects of Natural Disasters

The Company assessed the impact of the natural disasters (primarily Tropical Storm Karen) that occurred during the year ended December 31, 2019 and determined that this natural disaster did not have a material impact on our operating results or financial position.  The Company did not experience interruptions in rental payments nor has it incurred material capital expenditures to repair any property damage.

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 fees, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense is on our term loan facility.  In addition, we incur substantial non-cash charges for depreciation of our properties and amortization of intangible assets and liabilities.

Comparison of the Year Ended December 31, 2019 to the Year Ended December 31, 2018

The following table presents selected data on comparative results from the Company’s consolidated statements of operations for the year ended December 31, 2019, as compared to the year ended December 31, 2018 (in thousands):

	Year Ended December 31,
	2019			2018			$ Change
Revenue
Rental income (1)	$	167,035		$	213,558		$	(46,523	)
Expenses
Property operating		42,123			28,705			13,418
Real estate taxes		38,595			42,446			(3,851	)
Depreciation and amortization		104,581			226,675			(122,094	)
General and administrative		39,156			34,788			4,368
Gain on sale of real estate		71,104			96,165			(25,061	)
Interest expense		(94,519	)		(90,020	)		(4,499	)

(1) Upon adoption of the new lease standard in accordance with Accounting Standard Codification (“ASC”) 842, tenant reimbursements for 2018 have been reclassified to rental income in the consolidated statements of operations to conform to the 2019 financial statement presentation.

Rental Income

The following table presents the results for rental income for the year ended December 31, 2019, as compared to the corresponding period in 2018 (in thousands):

	Year Ended December 31,
	2019					2018
	Rental Income		% of Total Rental Income			Rental Income			% of Total Rental Income			$ Change
Sears/Kmart	$	51,153		30.6	%	$	151,674			71.0	%	$	(100,521	)
Diversified tenants		99,797		59.8	%		63,826			29.9	%		35,971
Straight-line rent		15,590		9.3	%		(2,825	)		-1.3	%		18,415
Amortization of above/below market leases		495		0.3	%		883			0.4	%		(388	)
Total rental income	$	167,035		100.0	%	$	213,558			100.0	%	$	(46,523	)

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The decrease of $100.5 million in Sears or Kmart rental income during 2019 is primarily due to a reduction in the number of properties leased to Sears or Kmart under the Original Master Lease, as applicable, as a result of recapture and termination activity.

The increase of $36.0 million in diversified tenants rental income during 2019 is primarily due to newly commenced leases at locations formerly occupied by Sears or Kmart.  

The increase of $18.4 million in straight-line rental income during 2019 is due to an increase in straight-line rent receivables related to diversified tenants under newly commenced leases during 2019. 

Property Operating Expenses and Real Estate Taxes

The Company incurs certain property operating and real estate tax expenses.  

The following table presents the comparative results for property operating expenses and real estate taxes for the year ended December 31, 2019, as compared to the corresponding period in 2018 (in thousands):

	Year Ended December 31,
	2019		2018		$ Change
Property operating expenses	$	42,123	$	28,705	$	13,418
Real estate taxes		38,595		42,446		(3,851	)

The increase of $13.4 million in property operating expense in 2019 is primarily due to the Company directly incurring utility and certain common area maintenance expenses at properties for which Sears or Kmart paid such expenses directly during 2018, partially offset by a decrease in property operating expenses as a result of asset sales and an increase in amounts capitalized due to development activity.

The decrease of $3.8 million in real estate taxes in 2019 is primarily due to asset sales and an increase in amounts capitalized due to development activity.

Depreciation and Amortization Expenses

The decrease of $122.0 million in depreciation and amortization expenses in 2019 was due primarily to (i) a reduction of $117.1 million in accelerated amortization attributable to certain lease intangible assets, (ii) approximately $10.0 million of lower net scheduled depreciation and amortization and (iii) $5.2 million increase of accelerated depreciation attributable to certain buildings that were demolished for redevelopment in 2019.

Accelerated amortization results from the recapture of space from, or the termination of space by, Sears Holdings or Holdco. 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 share-based compensation, professional fees, office expenses and related expenses.

The increase of $4.4 million in general and administrative expenses in 2019 was driven primarily by (i) changes to the accounting for leasing personnel and legal costs related to leasing activity as a result of the adoption of the new leasing standard in 2019, (ii) legal and advisory fees related to the Sears Holdings’ bankruptcy filing and (iii) increased compensation and related costs resulting from an increase in personnel.

Gain on Sale of Real Estate

During the year ended December 31, 2019, the Company:

− Sold properties for aggregate consideration of $144.3 million and recorded gains totaling $63.7 million, which are included in gain on the sale of real estate within the consolidated statements of operations;

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− Contributed two properties into joint ventures with adjacent property owners for an aggregate contribution value of $21.7 million and recorded a gain of approximately $3.9 million, which is included in gain on sale of real estate within the consolidated statements of operations;

− Exchanged land parcels of approximately equal size with an adjacent land owner and recorded a gain of $6.9 million.

Interest Expense

The Company incurs interest expense on its debt net of capitalized costs.

The increase of $4.5 million in interest expense in 2019 was driven by higher average borrowings and interest rates under the term loan facility, partially offset by an increase in amounts capitalized due to increased development activity.

Liquidity and Capital Resources

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “obligations”), and the reinvestment in and redevelopment of our properties (“development expenditures”).  As a result of a decrease in occupancy levels due to our recapture of space for redevelopment purposes and the execution of certain termination rights by Sears Holdings under the Original Master Lease, property rental income, which is our primary source of operating cash flow, did not fully fund obligations incurred during the year ended December 31, 2019 and we had operating cash outflows of $57.7 million.  Additionally, our development expenditures during the year ended December 31, 2019 drove investing cash outflows of $299.5 million.

Obligations are projected to continue to exceed property rental income until such time as additional tenants commence paying rent (we had approximately $84.3 million of SNO leases under contract as of December 31, 2019) that will commence paying rent as tenants occupy their leased space), and we plan to incur additional development expenditures as we continue to invest in the redevelopment of our portfolio. While we do not currently have the liquid funds available to satisfy the obligations and development expenditures, we expect to fund our obligations and development expenditures with a combination of capital sources including, but not limited to the following, subject to any approvals that may be required under the Term Loan Agreement:

• Sales of Wholly Owned Properties.  As of December 31, 2019, we had sold 42 Wholly Owned Properties, and additional outparcels at several properties, and generated approximately $258 million of gross proceeds since we began our capital recycling program in July 2017.  Subsequent to December 31, 2019, the Company sold three assets for $57 million and entered into contracts to sell an additional seven assets. As of February 28, 2020, the Company had assets under contract to sell for total anticipated proceeds of $125 million, subject to certain closing conditions;

• Sales of Interests in JV Properties.  As of December 31, 2019, we had sold our interests in 13 JV Properties and generated approximately $258 million of gross proceeds since July 2017.  Certain of our joint venture agreements also include rights that allow us to sell our interests in select JV Properties to our partners at fair market value;

• New joint ventures.  As of December 31, 2019, we had closed new joint ventures for 10 properties that generated approximately $185 million of gross proceeds since July 2017.  In addition to generating liquidity upon closing, new joint ventures also reduce our development expenditures by the amount of our partners’ interests in the ventures;

• Joint venture debt.  We may incur property-level debt in new or existing joint ventures, including construction financing for properties under development and longer-term mortgage debt for stabilized properties; and

• Other credit and capital markets transactions.  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.

In addition, our Term Loan Facility includes a $400 Incremental Funding Facility, access to which is subject to rental income from non-Sears Holdings tenants of at least $200 million, on an annualized basis and after giving effect to SNO leases expected to commence rent payment within 12 months, which we have not yet achieved.

The availability of liquidity from the above sources or initiatives is subject to a range of risks and uncertainties, including those discussed under “Risk Factors—Real estate investments are relatively illiquid” and “Risk Factors—We have ongoing capital needs and may not be able to obtain additional financing or other sources of funding on acceptable terms.”

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Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent.  The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”). The Term Loan Facility matures on July 31, 2023.

The Company used a portion of the proceeds from the Initial Funding to (i) repay existing indebtedness and (ii) pay transaction and related costs.  The remaining proceeds from the Initial Funding, as well as borrowings under the Incremental Funding Facility, will be used to fund the Company’s redevelopment pipeline and to pay operating expenses of the Company and its subsidiaries.  

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the consolidated statements of operations.

As of December 31, 2019, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million and (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Borrower.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Borrower and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement.

The Term Loan Facility includes certain financial metrics to govern springing collateral and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion.  Any failure to satisfy any of these financial metrics limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default.  The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, 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 Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of December 31, 2019, the Company was not in compliance with certain of the financial metrics described above.  As a result, the Company must receive the consent of Berkshire Hathaway to dispose of assets via sale or joint venture and, as of December 31, 2019, Berkshire Hathaway had provided such consent for all such transactions submitted for approval.  There can be no assurance that the lender will consent to future dispositions of assets.  Additionally, Berkshire Hathaway has the right to request mortgages against the Company’s assets pursuant to the mortgage and collateral requirement. During the year ended December 31, 2019, Berkshire Hathaway requested mortgages on a majority of the Company’s portfolio which were recorded in accordance with the requirement (the “Lender Request”). There are no changes to the terms and conditions of the Term Loan Facility, or the Company’s ability to operate thereunder, as a result of providing mortgages against any of the Company’s assets pursuant to the mortgage and collateral

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requirement. The Company accounted for the Lender Request transaction as a modification of debt as of December 31, 2019. Related to the modification, the Company incurred $5.0 million in mortgage recording costs which are classified as interest expenses on the consolidated statements of operations.

The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement.  As of December 31, 2019, the unamortized balance of the Company’s debt issuance costs was $1.5 million.

Preferred Shares

As of December 31, 2019, we had 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) outstanding.  We may not redeem the Series A Preferred Shares before December 14, 2022, except to preserve our status as a REIT or upon the occurrence of a Change of Control, as defined in the trust agreement addendums designating the Series A Preferred Shares.  On and after December 14, 2022, we may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends.  In addition, upon the occurrence of a Change of Control, we may redeem any or all of the Series A Preferred Shares for cash within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accrued and unpaid dividends.

Hedging Instruments

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 original debt facility that funded part of the Transaction in July 2015, 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 was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets.  The Company had elected not to utilize hedge accounting and therefore the change in fair value was included within change in fair value of interest rate cap on the consolidated statements of operations.

During the year ended December 31, 2018, the Company terminated the interest rate cap concurrent with the repayment of the original debt facility.

For the year ended December 31, 2018 and December 31, 2017, the Company recorded a change in the fair value of the interest rate cap of ($23) thousand, and ($0.7) million, respectively.

Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of OP Units entitled to an equal distribution per OP unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

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. 

The Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2020.  The Company intends to, at a minimum, make distributions to shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred Shares.

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The Company’s Board of Trustees also declared the following dividends on Company’s Series A Preferred Shares during 2019 and 2018:

Declaration Date	Record Date	Payment Date	Preferred Share
2019
October 23	December 31	January 15, 2020	$	0.43750
July 23	September 30	October 15		0.43750
April 30	June 28	July 15		0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

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, 2019 and December 31, 2018, the Company did not have any off-balance sheet financing arrangements.

Contractual Obligations

Our contractual obligations relate to our Term Loan 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, 2019 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)	$	2,011,911	$	113,867	$	227,111	$	1,670,933	$	-
Operating leases		10,468		1,611		2,296		2,344		4,217
Total	$	2,022,379	$	115,478	$	229,407	$	1,673,277	$	4,217

(1) Includes expected interest payments.

Capital Expenditures

The majority of our capital expenditures, tenant improvement costs and leasing commissions are from our retenanting and redevelopment projects described under the caption “—Retenanting and Redevelopment Projects” below.

During the year ended December 31, 2019, we incurred maintenance capital expenditures of approximately $6.6 million that were not associated with retenanting and redevelopment projects.

During the year ended December 31, 2018, we incurred maintenance capital expenditures of approximately $2.2 million and tenant improvement costs of $0.1 million that were not associated with retenanting and redevelopment projects.

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Cash Flows for the Year Ended December 31, 2019 Compared to December 31, 2018

The following table summarizes the Company’s cash flow activities for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019			2018			$ Change
Net cash (used in) provided by operating activities	$	(57,660	)	$	54,899		$	(112,559	)
Net cash used in investing activities		(299,490	)		(119,475	)		(180,015	)
Net cash (used in) provided by financing activities		(36,447	)		180,199			(216,646	)

Cash Flows from Operating Activities

Significant changes in the components of net cash (used in) provided by operating activities include:

− In 2019, a decrease in operating cash inflows due to net reductions in rental income under the Original Master Lease as a result of recapture and termination activity and an increase in unleased properties, partially offset by an increase in income from new, diversified tenants.

Cash Flows from Investing Activities

Significant components of net cash used in investing activities include:

− In 2019, development of real estate and property improvements of ($387.7) million and investments in unconsolidated joint ventures of ($54.2) million, partially offset by $140.1 million of net proceeds from the sale of real estate; and

− In 2018, development of real estate and property improvements of ($313.6) million and investments in unconsolidated joint ventures of ($16.0) million, partially offset by $210.1 million of net proceeds from the sale of real estate.

Cash Flows from Financing Activities

Significant components of net cash (used in) and provided by financing activities include:

− In 2019, cash distributions to common stockholders and holders of OP Units, ($28.0) million;

− In 2019, cash distributions to preferred shareholders, ($4.9) million;

− In 2018, proceeds from the Term Loan Facility, $1,600.0 million;

− In 2018, repayment of mortgage loans payables, ($1,210.6) million;

− In 2018, repayment of the Unsecured Term Loan, ($145.0) million;

− In 2018, cash distributions to common stockholders and holders of OP Units, ($55.8) million; and

− In 2018, cash distributions to preferred shareholders, ($4.0) million;

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.

During the Sears Holdings bankruptcy proceedings, the Official Committee of Unsecured Creditors of Sears Holdings (the “UCC”) and others, including the Restructuring Subcommittee of the Board of Directors of Sears Holdings, alleged that the 2015 Transactions between us and Sears Holdings constituted a fraudulent conveyance, and indicated an intent to pursue litigation challenging the 2015

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Transactions on that and other grounds.  The approval of the Holdco Acquisition by the Bankruptcy Court expressly preserved claims relating to the 2015 Transactions between us and Sears Holdings.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings Corporation, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (the Company, the Operating Partnership, and certain of our affiliates and subsidiaries collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD).

The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015, return of the proceeds of the transactions between Sears Holdings and Seritage, or (ii) in the alternative, payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination.  The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intends to defend against them vigorously.

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, the final outcome of such ordinary course legal proceedings and claims will not have a material effect on the consolidated financial position, results of operations or liquidity of the Company.

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Retenanting and Redevelopment Projects

We are currently retenanting or redeveloping several properties primarily to convert single-tenant buildings occupied, or formerly occupied, by Sears or Kmart into multi-tenant properties occupied by a diversity of retailers and related concepts.  The table below provides a brief description of each of the 91 new redevelopment projects originated on our platform as of December 31, 2019.  Excluding five projects that have been sold, these projects represent an estimated total investment of $1,580-1,660 million ($1,440-1,520 million at share), of which an estimated $660-740 million ($580-660 million at share) remains to be spent.

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 Escape Room		25,300	Complete
Merrillville, IN	Redevelop existing store for At Home and small shop retail		132,000	Complete
Elkhart, IN	Store has been re-leased to Big R Stores		86,600	Complete
Bowie, MD	Recapture and repurpose auto center space for BJ's Brewhouse		7,500	Complete
Troy, MI	Redevelop existing store for At Home		100,000	Complete
Rehoboth Beach, DE	Redevelop existing store for andThat! and PetSmart		73,100	Complete
Henderson, NV	Redevelop existing store for At Home, Seafood City, Blink Fitness and additional retail		144,400	Complete
Cullman, AL	Redevelop existing store for Bargain Hunt, Tractor Supply and Planet Fitness		99,000	Complete
Jefferson City, MO	Redevelop existing store for Orscheln Farm and Home		96,000	Complete
Guaynabo, PR	Redevelop existing store for Planet Fitness, Capri and additional retail and restaurants		56,300	Complete
Westwood, TX	Site has been ground leased to Sonic Automotive for an auto dealership		213,600	Complete
Florissant, MO	Site densification; new outparcel for Chick-fil-A		5,000	Complete
Kearney, NE	Redevelop existing store for Marshall's, PetSmart, Ross Dress for Less and Five Below		64,900	Complete
New Iberia, LA	Redevelop existing store for Ross Dress for Less, Rouses Supermarkets, Hobby Lobby and small shop retail		93,100	Complete
Layton, UT	A portion of the space has been leased to Extra Space Storage; existing tenants include Vasa Fitness and small shop retail		183,200	Complete
St. Clair Shores, MI	Demolish existing store and develop site for new Kroger grocery store		106,500	Complete
Houston, TX (Memorial City)	Entered into ground lease with adjacent mall owner; potential to participate in future redevelopment		214,400	Complete
Albany, NY	Repurpose auto center space for BJ's Brewhouse, Ethan Allen and additional small shop retail		28,000	Substantially complete
Dayton, OH	Repurpose auto center space for Outback Steakhouse and Hook & Reel		14,100	Substantially complete
Hopkinsville, KY	Redevelop existing store for Bargain Hunt, Farmer's Furniture, Harbor Freight Tools and small shop retail		85,100	Substantially complete
Mt. Pleasant, PA	Redevelop existing store for Aldi, Big Lots and additional retail		84,300	Substantially complete
Oklahoma City, OK	Site densification; new fitness center for Vasa Fitness		59,500	Substantially complete
North Little Rock, AR	Repurpose auto center space for LongHorn Steakhouse, Aspen Dental and additional retail		16,600	Delivered to tenant(s)
Greensboro, NC	Site densification; new outparcel for Mavis Tires		6,900	Q1 2020	Q4 2020
Middletown, NJ	Redevelop site for new ShopRite grocery store and additional retail		184,500	Q1 2020	Q2 2021
St. Petersburg, FL (freestanding)	Redevelop existing store for At Home, Blink Fitness and additional small shop retail		188,800	Q2 2020	Q4 2020
Florin, CA	Densify site with new theatre for Maya Cinemas		57,000	Q2 2021	Q3 2022
Gainesville, FL	Repurpose existing store as office space for Florida Clinical Practice Association / University of Florida College of Medicine		139,100	Sold
Hagerstown, MD	Repurpose auto center space for BJ's Brewhouse, Verizon and additional retail		15,400	Sold
Hampton, VA	Site densification; new outparcel for Chick-fil-A		2,200	Sold

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Total Project Costs $10 - $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Braintree, MA	Redevelop existing store for Nordstrom Rack, Saks OFF 5th and additional retail		78,700	Complete
Honolulu, HI	Redevelop existing store for Longs Drugs (CVS), PetSmart and Ross Dress for Less		76,100	Complete
Anderson, SC	Redevelop existing store for Burlington Stores, Gold's Gym, Sportsman's Warehouse, additional retail and restaurants		119,300	Complete
Springfield, IL	Redevelop existing store for Burlington Stores, Binny's Beverage Depot, Marshall's, Orangetheory Fitness, Outback Steakhouse, Core Life Eatery and additional small shop retail		119,300	Complete
Warwick, RI	Redevelop existing store and detached auto center for At Home, BJ's Brewhouse, Raymour & Flanigan, additional retail and restaurants		190,700	Complete
Hialeah, FL (freestanding)	Redevelop existing store for Bed, Bath & Beyond, Ross Dress for Less and dd's Discounts to join current tenant, Aldi		88,400	Complete
North Hollywood, CA	Redevelop existing store for Burlington Stores and Ross Dress for Less		74,900	Complete
Paducah, KY	Redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail		102,300	Substantially complete
Thornton, CO	Redevelop existing store for Vasa Fitness and additional junior anchors		198,600	Substantially complete
Temecula, CA	Redevelop existing store and detached auto center for Round One, small shop retail and restaurants		65,100	Substantially complete
West Jordan, UT	Redevelop existing store and attached auto center for At Home, Burlington Stores, Planet Fitness and small shop retail		190,300	Substantially complete
Austin, TX (Tech Ridge)	Redevelop existing store for AMC Theatres and restaurants (note: a portion of this property was contributed to the Tech Ridge JV in Q3 2019; this project reflects the retained, wholly-owned redevelopment)		53,900	Substantially complete
Roseville, MI	Redevelop existing store for At Home and Hobby Lobby		164,000	Substantially complete
Salem, NH	Densify site with new theatre for Cinemark and recapture and repurpose auto center for restaurant space to join existing tenant Dick's Sporting Goods		71,500	Delivered to tenant(s)
North Riverside, IL	Redevelop existing store and detached auto center for Blink Fitness, Round One, additional junior anchors, small shop retail and restaurants		118,500	Delivered to tenant(s)
Olean, NY	Redevelop existing store for Marshall's, Ollie's Bargain Basement and additional retail		125,700	Delivered to tenant(s)
Las Vegas, NV	Redevelop existing store for Round One and additional retail		78,800	Delivered to tenant(s)
Warrenton, VA	Redevelop existing store for HomeGoods and additional retail		97,300	Delivered to tenant(s)
Yorktown Heights, NY	Redevelop existing store for 24 Hour Fitness and other retail uses		85,200	Delivered to tenant(s)
Reno, NV	Redevelop existing store and auto center for Round One and additional retail		183,700	Delivered to tenant(s)
Charleston, SC	Redevelop existing store and detached auto center for Burlington Stores and additional retail		111,400	Delivered to tenant(s)
El Paso, TX	Redevelop existing store for Ross Dress for Less, dd's Discounts, Five Below and additional retail		111,600	Delivered to tenant(s)
Victor, NY	Redevelop existing store for Dick's Sporting Goods and additional retail		140,500	Delivered to tenant(s)
Pensacola, FL	Redevelop existing store for BJ's Wholesale, additional retail and restaurants		124,100	Underway	Q1 2020
Fresno, CA	Redevelop existing store and detached auto center for Ross Dress for Less, dd's Discounts and additional retail		78,300	Underway	Q1 2020
North Miami, FL	Redevelop existing store for Burlington Stores, Michael's and Ross Dress for Less		106,300	Underway	Q2 2020
Manchester, NH	Redevelop existing store for Dick's Sporting Goods, Dave & Busters, additional retail and restaurants		117,700	Underway	Q3 2020
Chicago, IL (Kedzie)	Redevelop existing store for Ross Dress for Less, dd's Discounts, Five Below, Blink Fitness and additional retail		123,300	Underway	Q3 2020
Fairfax, VA	Redevelop existing store and attached auto center for Industrious, Dave & Busters, Dick's Sporting Goods, Lazy Dog and additional restaurants		211,000	Underway	Q1 2021
Madison, WI	Redevelop existing store for Dave & Busters, Total Wine & More, Hobby Lobby and additional retail and restaurants		130,800	Underway	Q1 2021
Merced, CA	Redevelop existing store for Burlington Stores, dd's Discounts, Five Below, Ulta Beauty and additional retail		92,600	Underway	Q2 2021
Cockeysville, MD	Partial recapture; redevelop existing store for HomeGoods, Michael's Stores, Onelife Fitness, additional retail and restaurants (note: contributed to the Cockeysville JV in Q1 2019)		160,300	Underway	Q3 2021
Chesapeake, VA	Redevelop existing store for Rosie's Gaming Emporium, additional entertainment and restaurants		185,900	Q2 2020	Q3 2021
Kissimmee, FL	Redevelop existing store for Conn’s HomePlus, Planet Fitness and additional retail to join existing tenant Big Lots		116,000	Q2 2021	Q1 2022
Santa Cruz, CA	Redevelop existing store for TJ Maxx, HomeGoods and additional junior anchors		60,400	Sold
Vancouver, WA	Redevelop existing store for Round One, Hobby Lobby and additional retail and restaurants		72,400	Sold
Saugus, MA	Redevelop existing store and detached auto center (temporarily on hold)		99,000	To be determined

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Total Project Costs over $20 Million
		Total		Estimated	Estimated
		Project		Construction	Substantial
Property	Description	Square Feet		Start	Completion
Memphis, TN	Demolish and construct new buildings for LA Fitness, Nordstrom Rack, Ulta Beauty, Hopdoddy Burger Bar and additional retail and restaurants		125,200	Complete
St. Petersburg, FL (Tyrone Square)	Demolish and construct new buildings for Dick's Sporting Goods, Lucky's Market, PetSmart, Five Below, Chili's Grill & Bar, Pollo Tropical, LongHorn Steakhouse, Verizon and additional small shop retail and restaurants		135,400	Complete
Orlando, FL	Demolish and construct new buildings for Floor & Decor, LongHorn Steakhouse, Olive Garden and additional small shop retail and restaurants		139,200	Substantially complete
West Hartford, CT	Redevelop existing store and detached auto center for buybuyBaby, Cost Plus World Market, REI, Saks OFF Fifth, other junior anchors, Shake Shack and additional small shop retail (note: contributed to the West Hartford JV in Q2 2018)		156,000	Substantially complete
Watchung, NJ	Demolish full-line store and detached auto center and construct new buildings for Cinemark, HomeSense, Sierra Trading Post, Ulta Beauty, Chick-fil-A, small shop retail and additional restaurants		126,700	Substantially complete
Wayne, NJ	Redevelop existing store and detached auto center for Cinemark, Dave & Busters, Yardhouse and additional retail and restaurants (note: contributed to the GGP II JV in Q3 2017)		156,700	Delivered to tenant(s)
Carson, CA	Redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail		163,800	Substantially complete
Greendale, WI	Redevelop existing store and attached auto center for Dick's Sporting Goods, Round One, TJ Maxx, additional retail and restaurants		223,800	Substantially complete
Anchorage, AK	Redevelop existing store for Safeway, Guitar Center, Planet Fitness and additional retail to join current tenant, Nordstrom Rack		142,500	Substantially complete
Aventura, FL	Demolish existing store and construct new, multi-level open air retail destination featuring a leading collection of experiential shopping, dining and entertainment concepts, including Industrious and Pinstripes, alongside a treelined esplanade and activated plazas		216,600	Initial deliveries to tenants Q1 2020
San Diego, CA	Redevelop existing store into two highly-visible, multi-level buildings with exterior facing retail space leased to Equinox Fitness, Industrious, Pinstripes and a premier mix of experiential shopping, dining, and entertainment concepts (note: contributed to UTC JV in Q2 2018)		206,000	Delivered to tenant(s)
Santa Monica, CA	Redevelop existing building into premier, mixed-use asset featuring unique, small-shop retail and creative office space (note: contributed to the Mark 302 JV in Q1 2018)		101,700	Completed core building construction
Tucson, AZ	Redevelop existing store for Round One		50,600	Substantially complete
El Cajon, CA	Redevelop existing store and auto center for Ashley Furniture, Bob's Discount Furniture, Burlington Stores and additional retail and restaurants; a portion of the basement has been leased to Extra Space Storage		242,700	Delivered to tenant(s)
East Northport, NY	Redevelop existing store and attached auto center for AMC Theatres, 24 Hour Fitness, additional junior anchors and small shop retail		179,700	Delivered to tenant(s)
Fairfield, CA	Redevelop existing store and auto center for Dave & Busters, AAA Auto Repair Center and additional retail		166,700	Underway	Q1 2020
Plantation, FL	Redevelop existing store and auto center for Industrious, GameTime, Powerhouse Gym, additional retail and restaurants		184,400	Underway	Q1 2020
Roseville, CA	Redevelop existing store and auto center for Cinemark, Round One, AAA Auto Repair Center, additional retail and restaurants		147,400	Underway	Q2 2020
San Antonio, TX	Redevelop existing store for Bed Bath & Beyond, buybuyBaby, Tru Fit and additional retail to complement repurposed auto center occupied by Orvis, Jared's Jeweler and Shake Shack		215,900	Underway	Q2 2020
Ft. Wayne, IN	Redevelop existing store for Dave & Buster's, HomeGoods and additional retail to complement new outparcels for BJ's Brewhouse, Chick-fil-A and Portillo's		96,400	Underway	Q4 2020
Canton, OH	Redevelop existing store for Dick's Sporting Goods, Dave & Busters and additional retail and restaurants		208,200	Underway	Q1 2021
Hialeah, FL (Westland Mall)	Redevelop existing store and auto center for Paragon Theaters, Ulta Beauty, Five Below, Panera Bread and additional retail and restaurants		148,100	Underway	Q2 2021
Orland Park, IL	Redevelop existing store for AMC Theatres, 24 Hour Fitness, additional retail and restaurants		181,900	Q1 2020	Q2 2021
Asheville, NC	Redevelop existing store and auto center for Alamo Drafthouse, restaurants and small shop retail		110,600	Q3 2020	Q1 2022

We continue to evaluate a number of additional similar projects that are consistent with our primary objective to maximize the value of our properties by redeveloping space currently or formerly occupied by Sears and Kmart and re-leasing it to new, diversified 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 this Annual Report. We also refer you to our disclosure related to forward-looking statements.

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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.

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:

Buildings:	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.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. 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 impairment losses on real estate assets were recognized for the years ended December 31, 2019, 2018 or 2017.

During the year ended December 31, 2019, the Company sold 21 properties and recognized gain on sale of real estate of $42.3 million.  The Company also sold 13 outparcel properties and one condo unit and recorded gains totaling $20.6 million and exchanged a portion of one land parcel for two parcels of approximately equal size and recorded a gain of $6.9 million.  The Company also contributed a portion of its property located in Austin, TX to a joint venture and its property located in Cockeysville, MD to a joint venture and recorded a gain of approximately $67 thousand and $3.8 million, respectively, which is included in gain on sale of real estate within the consolidated statements of operations.

During the year ended December 31, 2018, the Company sold 21 properties and recognized gain on sale of real estate of $96.2 million.  During the year ended December 31, 2017, the Company sold a 50% interest in five properties and recognized gain on sale of real estate of $11.4 million. 

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.

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

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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.  No such impairment losses were recognized for the years ended December 31, 2019, 2018 or 2017.

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base 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 sheets.

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 a straight-line basis.

The Company commences recognizing revenue based on an evaluation of several factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.  

Reimbursement of property operating expenses 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 expenses are incurred.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5

Seritage Recapture Rights. The Company generally treats the delivery of a recapture notice as a modification of the 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, if any, is amortized over the remaining life of the 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, if any, is amortized over the remaining useful life of the asset or liability.

A 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 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 Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations 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.

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− Termination fees required to be paid 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 vacancy.

• 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 and Company FFO which are financial measures that include adjustments to GAAP.

Net Operating Income ("NOI") and Total NOI

NOI is defined 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.  The Company believes NOI provides useful information regarding Seritage, its financial condition, and results of operations because it reflects only those income and expense items that are incurred at the property level.

The Company also uses Total NOI, which includes its proportional share of unconsolidated properties.  The Company believes 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.  The Company also considers Total NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles.

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

Funds from Operations ("FFO") and Company FFO

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

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

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, 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 years ended December 31, 2019, 2018 and 2017 (in thousands):

	Year Ended December 31,
NOI and Total NOI	2019			2018			2017
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Termination fee income		(5,545	)		(18,711	)		(19,314	)
Management and other fee income		(1,598	)		(1,196	)		—
Depreciation and amortization		104,581			226,675			262,171
General and administrative expenses		39,156			34,788			27,902
Equity in loss of unconsolidated    joint ventures		17,994			10,448			7,788
Gain on sale of interests in unconsolidated    joint ventures		—			—			(60,302	)
Gain on sale of real estate		(71,104	)		(96,165	)		(11,447	)
Interest and other income		(6,824	)		(7,886	)		(877	)
Interest expense		94,519			90,020			70,112
Change in fair value of interest rate cap		—			23			701
Provision for income taxes		196			321			271
NOI	$	80,772		$	123,439		$	156,192
NOI of unconsolidated joint ventures		9,851			19,138			23,547
Straight-line rent adjustment (1)		(15,742	)		2,170			(3,918	)
Above/below market rental income/expense (1)		(2,214	)		(1,640	)		(1,063	)
Total NOI	$	72,667		$	143,107		$	174,758

(1) Includes adjustments for unconsolidated joint ventures.

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The following table reconciles FFO and Company FFO to GAAP net loss the years ended December 31, 2019, 2018 and 2017 (in thousands):

	Year Ended December 31,
FFO and Company FFO	2019			2018			2017
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Real estate depreciation and amortization    (consolidated properties)	$	102,439			224,217			260,543
Real estate depreciation and amortization    (unconsolidated joint ventures)		30,375			15,840			23,954
Gain on sale of interests in unconsolidated    joint ventures		—			—			(60,302	)
Gain on sale of real estate		(71,104	)		(96,165	)		(11,447	)
Dividends on preferred shares		(4,900	)		(4,903	)		(245	)
FFO attributable to common shareholders    and unitholders	$	(33,793	)	$	24,111		$	91,690
Termination fee income		(5,545	)		(18,711	)		(19,314	)
Change in fair value of interest rate cap		—			23			701
Amortization of deferred financing costs		434			10,323			8,720
Mortgage recording costs		5,008			—			-
Company FFO attributable to common    shareholders and unitholders	$	(33,896	)	$	15,746		$	81,797
FFO per diluted common share and unit	$	(0.61	)	$	0.43		$	1.65
Company FFO per diluted common share and unit	$	(0.61	)	$	0.28		$	1.47
Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		36,413			35,560			33,804
Weighted average OP Units outstanding		19,387			20,153			21,820
Weighted average common shares and    units outstanding		55,800			55,713			55,624

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2019, we had $1.6 billion of consolidated debt, all of which is borrowed under our fixed-rate Term Loan Facility and therefore not subject to interest rate fluctuations.

As of December 31, 2019, the estimated fair value of our consolidated debt was $1.6 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.

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’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). 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, 2019, 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, 2019, 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 (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during quarter ended December 31, 2019 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

The information required by Item 10 is hereby incorporated by reference to our definitive proxy statement with respect to our 2020 Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of our fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is hereby incorporated by reference to our definitive proxy statement with respect to our 2020 Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of our fiscal year.

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

The information required by Item 12 is hereby incorporated by reference to our definitive proxy statement with respect to our 2020 Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of our fiscal year.

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

The information required by Item 13 is hereby incorporated by reference to our definitive proxy statement with respect to our 2020 Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of our fiscal year.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 is hereby incorporated by reference to our definitive proxy statement with respect to our 2020 Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of our fiscal year.

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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	Articles Supplementary Establishing and Fixing the Rights and Preferences of 7.00% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share	Incorporated by reference to Exhibit 3.1 to our Registration Statement on Form 8-A, filed on December 14, 2017.
3.3	Amended and Restated Bylaws	Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q, filed on May 3, 2019.
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.
4.2	Form of specimen certificate evidencing the 7.00% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share	Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form 8-A, filed on December 14, 2017.
4.3	Description of Capital Stock of Seritage Growth Properties Registered Pursuant to Section 12 of the Securities Exchange Act of 1934	Filed herewith
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	Amended and Restated Agreement of Limited Partnership of Seritage Growth Properties, L.P., dated as of December 14, 2017	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on December 14, 2017.
10.3	Holdco Master Lease by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Transform SR Operations LLC and Transform KM Operations LLC, dated as of February 28, 2019	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on March 15, 2019.
10.4	Side Letter to Holdco Master Lease, by and among Seritage KMT Finance LLC, Seritage SRC Finance LLC, Transform SR Operations LLC and Transform KM Operations LLC, dated as of February 28, 2019	Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on March 15, 2019.
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.

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Exhibit No.	Description	SEC Document Reference
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	Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K, filed on March 1, 2017.
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	Incorporated by reference to Exhibit 10.7 to our Annual Report on Form 10-K, filed on March 1, 2017.
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.	Incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K, filed on March 1, 2017.
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	Incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K, filed on March 1, 2017.
10.11	Third Amendment to Mezzanine Loan Agreement, entered into as of November 8, 2017 and effective as of June 30, 2017, 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	Incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K, filed on February 28, 2018.
10.12	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.
10.13	Senior Unsecured Term Loan Agreement, dated as of December 27, 2017, among Seritage Growth Properties, L.P., Seritage Growth Properties, JPP, LLC, JPP II, LLC and Empyrean Investments, LLC, as lenders, and JPP, LLC, as administrative agent.	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on December 28, 2017.
10.14	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.
10.15	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.
10.16	Form of Seritage Growth Properties Restricted Share Agreement	Incorporated by reference to Exhibit 10.14 to our Annual Report on Form 10-K, filed on March 1, 2017.
10.17	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.

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Exhibit No.	Description	SEC Document Reference
10.18	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.
10.19	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.
10.20	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.
10.21	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.
10.22	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.
10.23	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.
10.24	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.
10.25	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.
10.26	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.
10.27	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.
10.28	Senior Secured Term Loan Agreement, dated July 31, 2018, among Seritage Growth Properties, Seritage Growth Properties, L.P. and Berkshire Hathaway Life Insurance Company of Nebraska	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on July 31, 2018.
10.29	Employment Agreement, dated May 2, 2018, among Seritage Growth Properties, Seritage Growth Properties, L.P. and Benjamin Schall	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 7, 2018.
10.30	Employment Agreement, dated May 16, 2018, among Seritage Growth Properties, Seritage Growth Properties, L.P. and Kenneth Lombard	Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q, filed on August 3, 2018.
10.31	Form of Seritage Growth Properties Time-Vesting Restricted Share Unit Agreement – 2018 Incentive RSUs	Incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q, filed on August 3, 2018.
10.32	Form of Seritage Growth Properties Performance-Vesting Restricted Share Unit Agreement – 2018 Incentive P-RSUs	Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q, filed on August 3, 2018.
10.33	First Amendment to the Master Lease, effective as of October 29, 2019, by and among Seritage SRC Finance LLC and Seritage KMT Finance LLC	Filed herewith.
21.1	List of subsidiaries	Filed herewith.
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm	Filed herewith.

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Exhibit No.	Description	SEC Document Reference
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	Furnished 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	Furnished herewith.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	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.

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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 2, 2020	/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 2, 2020
Edward S. Lampert
/s/ Benjamin W. Schall	President, Chief Executive Officer and Trustee (Principal Executive Officer)	March 2, 2020
Benjamin W. Schall
/s/ Brian R. Dickman	Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)	March 2, 2020
Brian R. Dickman
/s/ David S. Fawer	Trustee	March 2, 2020
David S. Fawer
/s/ John T. McClain	Trustee	March 2, 2020
John T. McClain
/s/ Sharon Osberg	Trustee	March 2, 2020
Sharon Osberg
/s/ Thomas M. Steinberg	Trustee	March 2, 2020
Thomas M. Steinberg
/s/ Allison Thrush	Trustee	March 2, 2020
Allison Thrush

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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, 2019 and 2018	F-5
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017	F-6
Consolidated Statements of Equity for the years ended December 31, 2019, 2018 and 2017	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017	F-10
Notes to Consolidated Financial Statements	F-12
Financial Statement Schedule
Schedule III—Real estate and accumulated depreciation	F-40

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Seritage Growth Properties and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 2, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liquidity — Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “obligations”), and the reinvestment in and redevelopment of its properties (“development expenditures”).  As a result of a decrease in occupancy levels due to the Company’s recapture of space for redevelopment purposes and the execution of certain termination rights by Sears Holdings Corporation under a master lease agreement, property rental income, which is the Company’s primary source of operating cash flow, did not fully fund obligations incurred during the year ended December 31, 2019. Obligations are projected to continue to exceed property rental income until such time as additional tenants commence paying rent, and the Company plans to incur additional development expenditures as it continues to invest in the redevelopment of its portfolio.

The Company plans to fund its obligations and development expenditures with a combination of capital sources including, but not limited to, sales of wholly owned properties, sales of interests in joint venture properties (which may include the exercise of certain rights that allow the Company to sell its interests in select joint venture properties to its partners at fair market value) and potential credit and capital markets transactions.

F-2

We identified the Company’s liquidity disclosure as a critical audit matter because of the significant judgments in management’s plans to fund its obligations and development expenditures. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate management’s conclusion that it is probable the Company’s plans will be effectively implemented within one year after the date the financial statements are issued and will provide the necessary cash flows to fund the Company’s obligations and development expenditures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s liquidity disclosure included the following, among others:

• We tested the effectiveness of the controls over management’s plans and related disclosures.

• We tested management’s key assumptions, including projected rental income and property operating costs by comparing such assumptions to underlying lease agreements and historical operating costs.

• We evaluated management’s estimates relating to redevelopment costs by comparing to underlying development plans and costs spent to date.

• We evaluated the timing and likelihood of potential sales of wholly owned properties and exercise of put rights within select joint ventures by comparing expected proceeds to comparable market information and historical transactions effectuated by the Company, as well as evaluating the terms and conditions present in joint venture agreements, as applicable.

• We engaged in discussions with management, including the Chief Executive Officer and Chief Financial Officer regarding management’s intent and ability to generate the planned sources of capital.

• We evaluated management’s plans in the context of other audit evidence obtained during the audit to determine whether it supported or contradicted the conclusion reached by management.

Real Estate Investments – Holding period — Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company’s investments in real estate assets are evaluated for impairment periodically or when events or changes in circumstances indicate that the carrying amount of a real estate asset may not be recoverable.  The Company uses significant judgment in assessing events or circumstances which might indicate impairment, including but not limited to, changes in management’s intent to hold the asset over a specified period of time.  Changes in the Company’s intent to hold a property have a significant impact on the undiscounted cash flows expected to result from the use and eventual disposition of the asset and whether a potential impairment loss shall be measured.

The Company’s use of judgement in the determination the hold period for real estate assets as part of their recoverability assessment is subjective and requires judgment. Because of this, auditing these judgements required a high degree of auditor judgment and extensive auditor effort, especially given the inherent unpredictability involved in the timing of sales of real estate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the hold period utilized by management in their assessment of real estate assets for recoverability include the following, among others:

• We tested the effectiveness of the controls over management’s identification of possible circumstances that could indicate the carrying amounts of real estate assets may not be recoverable, including controls over management’s review of significant estimates, specifically, the determination or changes in the Company’s intent to hold a property.    

• We evaluated the reasonableness of management’s assertions regarding its intended period over which to hold its real estate assets by performing the following:

o Engaged in discussions with management, including the Chief Executive Officer and Chief Financial Officer to evaluate the Company’s plans to develop an asset or dispose of an asset before the end of its estimated useful life.

o Inspected Board of Directors meeting minutes to identify whether assets have been identified for potential sale.

o Compared management’s assertions regarding its intent to hold an asset with internal strategic and operating plans.

/s/ DELOITTE & TOUCHE LLP

New York, New York

March 2, 2020

We have served as the Company's auditor since 2015.

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

Seritage Growth Properties

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Seritage Growth Properties and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report dated March 2, 2020, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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 directors 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

New York, New York

March 2, 2020

F-4

SERITAGE GROWTH PROPERTIES

CONSOLIDATED BALANCE SHEETS

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

	December 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	667,004		$	696,792
Buildings and improvements		1,112,653			900,173
Accumulated depreciation		(147,696	)		(137,947	)
		1,631,961			1,459,018
Construction in progress		338,672			292,049
Net investment in real estate		1,970,633			1,751,067
Real estate held for sale		5,275			3,094
Investment in unconsolidated joint ventures		445,077			398,577
Cash and cash equivalents		139,260			532,857
Tenant and other receivables, net		54,470			36,926
Lease intangible assets, net		68,153			123,656
Prepaid expenses, deferred expenses and other assets, net		67,744			29,899
Total assets	$	2,750,612		$	2,876,076
LIABILITIES AND EQUITY
Liabilities
Term loan facility, net	$	1,598,487		$	1,598,053
Accounts payable, accrued expenses and other liabilities		108,755			127,565
Total liabilities		1,707,242			1,725,618
Commitments and contingencies (Note 9)
Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized;    36,897,364 and  35,667,521 shares issued and outstanding    as of December 31, 2019 and December 31, 2018, respectively		369			357
Class B common shares $0.01 par value; 5,000,000 shares authorized;   1,242,536 and 1,322,365 shares issued and outstanding    as of December 31, 2019 and December 31, 2018, respectively		12			13
Series A preferred shares $0.01 par value; 10,000,000 shares authorized;     2,800,000 shares issued and outstanding as of December 31, 2019 and     December 31, 2018; liquidation preference of $70,000		28			28
Additional paid-in capital		1,149,721			1,124,504
Accumulated deficit		(418,711	)		(344,132	)
Total shareholders' equity		731,419			780,770
Non-controlling interests		311,951			369,688
Total equity		1,043,370			1,150,458
Total liabilities and equity	$	2,750,612		$	2,876,076

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

F-5

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

	Year Ended December 31,
	2019			2018			2017
REVENUE
Rental income	$	167,035		$	213,558		$	241,017
Management and other fee income		1,598			1,196			—
Total revenue		168,633			214,754			241,017
EXPENSES
Property operating		42,123			28,705			19,700
Real estate taxes		38,595			42,446			45,653
Depreciation and amortization		104,581			226,675			262,171
General and administrative		39,156			34,788			27,902
Provision for doubtful accounts		—			257			158
Total expenses		224,455			332,871			355,584
Gain on sale of real estate		71,104			96,165			11,447
Gain on sale of interests in unconsolidated    joint ventures		—			—			60,302
Equity in loss of unconsolidated    joint ventures		(17,994	)		(10,448	)		(7,788	)
Interest and other income		6,824			7,886			877
Interest expense		(94,519	)		(90,020	)		(70,112	)
Change in fair value of interest rate cap		—			(23	)		(701	)
Loss before income taxes		(90,407	)		(114,557	)		(120,542	)
Provision for income taxes		(196	)		(321	)		(271	)
Net loss		(90,603	)		(114,878	)		(120,813	)
Net loss attributable to    non-controlling interests		31,206			41,406			47,059
Net loss attributable to Seritage	$	(59,397	)	$	(73,472	)	$	(73,754	)
Preferred dividends		(4,900	)		(4,903	)		(245	)
Net loss attributable to Seritage common    shareholders	$	(64,297	)	$	(78,375	)	$	(73,999	)
Net loss per share attributable to Seritage    Class A and Class C common shareholders - Basic	$	(1.77	)	$	(2.20	)	$	(2.19	)
Net loss per share attributable to Seritage    Class A and Class C common shareholders - Diluted	$	(1.77	)	$	(2.20	)	$	(2.19	)
Weighted average Class A and Class C common    shares outstanding - Basic		36,413			35,560			33,804
Weighted average Class A and Class C common    shares outstanding - Diluted		36,413			35,560			33,804

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

F-6

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF EQUITY

(Amounts in thousands)

																					Additional						Non-
	Class A Common				Class B Common						Class C Common						Series A Preferred				Paid-In			Accumulated			Controlling			Total
	Shares		Amount		Shares			Amount			Shares			Amount			Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2017		25,843	$	258		1,589		$	16			5,755		$	58			—	$	—	$	925,563		$	(121,338	)	$	619,754		$	1,424,311
Net loss		—		—		—			—			—			—			—		—		—			(73,754	)		(47,059	)		(120,813	)
Common dividends and    distributions declared    ($1.00 per share and unit)		—		—		—			—			—			—			—		—		—			(34,668	)		(21,449	)		(56,117	)
Vesting of restricted share units		11		—		—			—			—			—			—		—		(13	)		—			—			(13	)
Share-based compensation		—		—		—			—			—			—			—		—		7,018			—			—			7,018
Issuance of preferred stock		—		—		—			—			—			—			2,800		28		66,446			—			—			66,474
Share class exchanges, net    (2,603,554 common shares)		2,604		27		—			—			(2,604	)		(27	)		—		—		—			—			—			—
Share class surrenders    (260,154 common shares)		—		—		(260	)		(3	)		—			—			—		—		3			—			—
OP Unit exchanges    (3,958,182 units)		3,958		39		—			—			—			—			—		—		117,043			—			(117,082	)
Balance at December 31, 2017		32,416	$	324		1,329		$	13			3,151		$	31			2,800	$	28	$	1,116,060		$	(229,760	)	$	434,164		$	1,320,860

F-7

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF EQUITY (Continued)

(Amounts in thousands)

																				Additional						Non-
	Class A Common				Class B Common					Class C Common						Series A Preferred				Paid-In			Accumulated			Controlling			Total
	Shares		Amount		Shares			Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2018		32,416	$	324		1,329		$	13		3,151		$	31			2,800	$	28	$	1,116,060		$	(229,760	)	$	434,164		$	1,320,860
Net loss		—		—		—			—		—			—			—		—		—			(73,472	)		(41,406	)		(114,878	)
Common dividends and    distributions declared    ($1.00 per share and unit)		—		—		—			—		—			—			—		—		—			(35,997	)		(20,144	)		(56,141	)
Preferred dividends    declared ($1.75 per share)																								(4,093	)		—			(4,093	)
Vesting of restricted share units		2		—		—			—		—			—			—		—		—			—			—			—
Share-based compensation		—		—		—			—		—			—			—		—		5,632			—			—			5,632
Preferred stock offering costs																					(113	)		—			—			(113	)
Share class exchanges, net    (3,151,131 common shares)		3,151		32		—			—		(3,151	)		(31	)		—		—		—			—			—			1
Share class surrenders    (6,501 common shares)		—		—		(7	)		—		—			—			—		—		—			—			—			—
OP Unit exchanges    (98,923 units)		99		1		—			—		—			—			—		—		2,925			—			(2,926	)		—
Balance at December 31, 2018		35,668	$	357		1,322		$	13		—			—			2,800	$	28	$	1,124,504		$	(344,132	)	$	369,688		$	1,150,458

F-8

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF EQUITY (Continued)

(Amounts in thousands)

																			Additional						Non-
	Class A Common				Class B Common						Class C Common				Series A Preferred				Paid-In			Accumulated			Controlling			Total
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2019		35,668	$	357		1,322		$	13			-	$	-		2,800	$	28	$	1,124,504		$	(344,132	)	$	369,688		$	1,150,458
Net loss		—		—		—			—			—		—		—		—		—			(59,397	)		(31,206	)		(90,603	)
Cumulative effect of    accounting change    (see Note 2)		—		—		—			—			—		—		—		—		—			(1,286	)		-			(1,286	)
Common dividends and    distributions declared    ($0.25 per share and unit)		—		—		—			—			—		—		—		—		—			(8,996	)		(5,030	)		(14,026	)
Preferred dividends    declared ($1.75 per share)		—		—		—			—			—		—		—		—		—			(4,900	)		—			(4,900	)
Vesting of restricted share units		15		—		—			—			—		—		—		—		(3,523	)		—			—			(3,523	)
Share-based compensation		—		—		—			—			—		—		—		—		7,250			—			—			7,250
Share class surrenders    (79,829 common shares)		—		—		(79	)		(1	)		—		—		—		—		1			—			—			—
OP Unit exchanges    (1,214,577 units)		1,214		12		—			—			—		—		—		—		21,489			—			(21,501	)		—
Balance at December 31, 2019		36,897	$	369		1,243		$	12			—		—		2,800	$	28	$	1,149,721		$	(418,711	)	$	311,951		$	1,043,370

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

F-9

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Amounts in thousands)

	Year Ended December 31,
	2019			2018			2017
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Adjustments to reconcile net loss to net cash provided by operating    activities:
Equity in loss of unconsolidated joint ventures		17,994			10,448			7,788
Distributions from unconsolidated joint ventures		877			3,956			4,305
Gain on sale of real estate		(71,104	)		(96,165	)		(11,447	)
Gain on sale of interest in unconsolidated joint venture		—			—			(60,302	)
Change in fair value of interest rate cap		—			23			701
Share-based compensation		6,845			7,472			7,018
Depreciation and amortization		104,581			226,675			262,171
Amortization of deferred financing costs		434			10,322			8,719
Amortization of above and below market leases, net		(495	)		(768	)		(720	)
Straight-line rent adjustment		(15,590	)		2,825			(3,719	)
Change in operating assets and liabilities
Tenants and other receivables		2,556			(256	)		(4,753	)
Prepaid expenses, deferred expenses and other assets		(5,149	)		(9,811	)		(7,877	)
Accounts payable, accrued expenses and other liabilities		(8,006	)		15,056			(21,462	)
Net cash (used in) provided by operating activities		(57,660	)		54,899			59,609
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated joint ventures		(54,193	)		(27,005	)		(37,993	)
Distributions from unconsolidated joint ventures		1,884			10,988			10,039
Net proceeds from disposition of interest in unconsolidated    joint ventures		—			—			257,373
Net proceeds from sale of real estate		140,505			210,097			50,875
Development of real estate		(387,686	)		(313,555	)		(243,105	)
Net cash (used in) provided by investing activities		(299,490	)		(119,475	)		37,189
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Term Loan Facility		—			1,600,000			—
Repayment of mortgage loans payable		—			(1,210,561	)		(50,634	)
Repayment of Unsecured Term Loan		—			(145,000	)		—
Proceeds from Future Funding Facility		—			—			79,998
Proceeds from Unsecured Term Loan		—			—			230,000
Repayment of Unsecured Delayed Draw Term Loan		—			—			(85,000	)
Payment of deferred financing costs		—			(2,472	)		(4,348	)
Proceeds from issuance of preferred stock		—			—			70,000
Preferred stock offering costs		—			(113	)		(3,526	)
Purchase of shares related to stock grant recipients' tax withholdings		(3,523	)		(1,840	)		—
Preferred dividends paid		(4,900	)		(4,020	)		—
Common dividends paid		(17,964	)		(35,677	)		(34,248	)
Non-controlling interests distributions paid		(10,060	)		(20,118	)		(21,448	)
Net cash provided by (used in) financing activities		(36,447	)		180,199			180,794
Net increase (decrease) in cash, cash equivalents, and restricted cash		(393,597	)		115,623			277,592
Cash, cash equivalents, and restricted cash, beginning of period		532,857			417,234			139,642
Cash, cash equivalents, and restricted cash, end of period	$	139,260		$	532,857		$	417,234

F-10

SERITAGE GROWTH PROPERTIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

(Amounts in thousands)

	Year Ended December 31,
	2019			2018			2017
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	117,556		$	102,786		$	73,870
Capitalized interest		28,497			23,183			13,142
Income taxes paid		285			321			271
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND    FINANCING ACTIVITIES
Development of real estate financed with accounts payable	$	17,006		$	26,180		$	21,449
Common dividends and OP unit distributions declared and unpaid		—			14,027			13,968
Preferred dividends declared and unpaid		1,225			1,225			—
Decrease in real estate, net resulting from deconsolidated properties
Real estate, net		(17,237	)		(156,568	)		(67,616	)
Tenants and other receivables, net		(2	)		—			(814	)
Lease intangible assets, net		(26	)		(1,416	)		(13,480	)
Prepaid expenses, deferred expenses and other assets, net		(84	)		(193	)		(8	)
Accounts payable, accrued expenses and other liabilities		6			—			3,612
Transfer to real estate assets held for sale		(5,275	)		(3,094	)		—
Transfer of below market asset to right of use asset		(11,005	)		—			—
Recording of right of use assets		19,373			—			—
Recording of lease liabilities		(8,368	)		—			—
Property delivered in exchange		(2,075	)		—			—
Property received in exchange		11,326			—			—
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND    RESTRICTED CASH
Cash and cash equivalents	$	139,260		$	532,857		$	241,569
Restricted cash		—			—			175,665
Total cash, cash equivalents, and restricted cash shown in the statement of    cash flows	$	139,260		$	532,857		$	417,234

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

F-11

SERITAGE GROWTH PROPERTIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization

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, directly or indirectly, through 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” and “Seritage” 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 and mixed-use properties throughout the United States.  As of December 31, 2019, the Company’s portfolio consisted of interests in 212 properties totaling approximately 33.4 million square feet of GLA, including 184 Wholly Owned Properties totaling approximately 28.7 million square feet of GLA across 44 states and Puerto Rico, and interests in 28 JV Properties totaling approximately 4.7 million square feet of GLA across 14 states.

The Company’s mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experiences for consumers and local communities, and create long-term value for our shareholders.

Background

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings” or “Sears”) 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 (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties, and (ii) its 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (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 and commenced operations.  The Company did not have any operations prior to the completion of the Rights Offering and Transaction.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).  On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., executed a master lease with respect to 51 Wholly Owned Properties (the “Holdco Master Lease”), which became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the original master lease between the Company and affiliates of Sears Holdings (the “Original Master Lease”).

As of December 31, 2019, the Company leased space at 48 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at three JV Properties. As of December 31, 2019, three Wholly Owned Properties were subject to 100% recapture notices pursuant to the terms of the Holdco Master Lease, and 28 Wholly Owned Properties and one JV Property were subject to termination notices pursuant to the terms of the Holdco Master Lease and the lease with Holdco at the JV Property, respectively. In November 2019, Holdco exercised its rights under the Holdco Master Lease to terminate the Holdco Master Lease, effective March 2020, with respect to 29 stores. Giving effect to this recapture and termination activity, the Company leased space at 17 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at two JV Properties.

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco.  Mr. Lampert is also the Chairman of Seritage and controls each of the tenant entities that is a party to the Holdco Master Lease.

Liquidity

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “obligations”), and the reinvestment in and redevelopment of its properties (“development expenditures”).  As a result of a decrease in occupancy levels due to the Company’s recapture of space for redevelopment purposes and the execution of certain termination rights by Sears Holdings under the Original Master Lease, property rental income, which is the Company’s primary source of operating cash flow, did not fully fund obligations incurred during the year ended December 31, 2019 and the Company had operating cash outflows of $57.7 million.  Additionally, the Company’s development expenditures during the year ended December 31, 2019 drove investing cash outflows of $299.5 million.

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Obligations are projected to continue to exceed property rental income until such time as additional tenants commence paying rent, and the Company plans to incur additional development expenditures as it continues to invest in the redevelopment of its portfolio. While the Company does not currently have the liquid funds available to satisfy the obligations and development expenditures, the Company expects to fund the obligations and development expenditures with a combination of capital sources including, but not limited to, sales of Wholly Owned Properties, sales of interests in JV Properties (which may include the exercise of certain rights that allow the Company to sell its interests in select JV Properties to its partners at fair market value) and potential credit and capital markets transactions, subject to any approvals that may be required under the Term Loan Agreement, as described in Note 6, Debt.  Management has determined that it is probable its plans will be effectively implemented within one year after the date the financial statements are issued and that these actions will provide the necessary cash flows to fund the Company’s obligations and development expenditures.  

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. As of December 31, 2019 and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of December 31, 2019, the Company holds a 66.1% 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.  The Company has determined 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.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

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.

Reclassification

Upon adoption on January 1, 2019 of the new lease standard in accordance with ASC 842, tenant reimbursements for 2018 and 2017 have been reclassified to rental income in the consolidated statements of operations to conform to the 2019 financial statement presentation.

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 the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  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.

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Segment Reporting

The Company currently operates in a single reportable segment which includes the acquisition, ownership, development, redevelopment, management, and leasing of real estate 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.

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:

Buildings:	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.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. 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 impairment losses were recognized for the years ended December 31, 2019, 2018 or 2017.

Real Estate Dispositions

The following table summarizes our gain on sale of real estate, net during the years ended December 31, 2019, 2018, and 2017 (in thousands):

	Year Ended December 31,
	2019		2018		2017
Contributions to unconsolidated joint ventures
Gross proceeds	$	21.7	$	232.7	$	57.5
Gain (loss) on sale of real estate, net		3.9		63.9		11.4
Dispositions to third parties
Gross proceeds	$	144.3	$	114.3	$	—
Gain (loss) on sale of real estate, net		63.7		29.5		—
Total gains on contributions and dispositions, net	$	67.6	$	93.4	$	11.4

For the year ended December 31, 2019, gain on sales on the consolidated statements of operations also includes a gain of $6.9 million related to an exchange of land parcels of approximately equal size with an adjacent land owner and a loss of $2.3 million related to the West Hartford JV revaluation as discussed in Note 4.

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Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of December 31, 2019, two properties were classified as held for sale with assets of $5.3 million and no liabilities, and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

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 years ended December 31, 2019, 2018 or 2017.

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, 2019 and December 31, 2018, the Company did not have any restricted cash.  Restricted cash accounts were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.   

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.  For accrued rental income related to the straight-line method of reporting rental income, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.  Any receivables that are deemed to be uncollectible are recognized as a reduction to rental income in the Company’s consolidated statements of operations.  Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental income.

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Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated joint ventures. In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base 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 sheets.

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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of several factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.

Reimbursement of property operating expenses 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 expenses are incurred.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated joint ventures. Property management fee income is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.  Leasing and development fees are initially reported at the portion of fees attributable to outside ownership of the related unconsolidated joint ventures.  The Company’s share in management fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage Recapture Rights. The Company generally treats the delivery of a recapture notice as a modification of the 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

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portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space, if any, is amortized over the remaining life of the 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, if any, is amortized over the remaining useful life of the asset or liability.

A 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 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 Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations 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 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 vacancy.

• 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 in July 2015, 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 was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets.  The Company had elected not to utilize hedge accounting and therefore the change in fair value was included within change in fair value of interest rate cap on the consolidated statements of operations.

During the year ended December 31, 2018, the Company terminated the interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility and as such there were no instruments as of December 31, 2019 and December 31, 2018.

For the year ended December 31, 2019, the Company did not record any gain or loss on derivatives.  For the year ended December 31, 2018 and December 31, 2017, the Company recorded a change in the fair value of the interest rate cap of ($23) thousand, and ($0.7) million, respectively.

Share-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 based on the grant date fair value of the awards. Compensation expense is recognized ratably over the vesting period for awards with time-based vesting and awards with market-based vesting conditions (e.g. total shareholder return). For awards with performance-based vesting determined by Company operating criteria, the Company recognizes compensation expense at the date the achievement of performance criteria is deemed probable for the amount 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.  The Company utilizes a third-party valuation firm to measure the grant date fair value of restricted stock unit awards with market-based criteria using the Monte Carlo model. Forfeitures are recorded on an actual basis.

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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, 2019, 49 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the year ended December 31, 2019 was derived from the Holdco Master Lease.  However, in November 2019, Holdco exercised its termination rights under the Holdco Master Lease with respect to 29 stores effective as of the first quarter of 2020.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on the business, financial condition or results of operations of Holdco or another major tenant could have a material adverse effect on the Company’s business, financial condition or results of operations.  

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, 2019, the Company's portfolio of 184 Wholly Owned Properties and 28 JV Properties was diversified by location across 44 states and Puerto Rico.

Earnings 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.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings 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

The following presents Accounting Standards Updates (“ASU”) issued by Financial Accounting Standards Board (“FASB”) which have been adopted by the Company:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets	This standard provides guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach).	January 1, 2018	The Company adopted this update with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

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ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	This standard 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 2016-15 is effective, on a retrospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.	January 1, 2018	The Company adopted this standard and applied the cumulative earnings approach to classify distributions received from our equity method investees.  The adoption (i) changes our statements of cash flows so that distributions from unconsolidated joint ventures in excess of cumulative equity in earnings are now classified as inflows from investing activities for each period presented and (ii) resulted in a decrease to net cash provided by operating activities and an increase to net cash provided by investing activities of $10.0 million for the year ended December 31, 2017.
ASU 2014-09, Revenue from Contracts with Customers and the related FASB ASU Nos. 2016-12 and 2016-20	This standard provides practical expedients, technical corrections, and improvements for certain aspects of ASU 2014-09.  ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update’s core principle is that an entity should recognize 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. Companies are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. Those steps include the following: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation in the contract, and (v) recognize revenue when or as the entity satisfies a performance obligation.  The Company estimates the total transaction price, which generally includes a fixed contract price and may also include variable components. Variable components of the contract price are included in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its performance obligations.	January 1, 2018	The Company adopted this standard using the modified retrospective method. Management concluded that the majority of total revenues consist of rental income from leasing arrangements, which is specifically excluded from the standard. As of January 1, 2018, the Company began accounting for the sale of real estate properties under Subtopic 610-20 which provides for revenue recognition based on transfer of ownership.

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ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (“Topic 842”) ASU 2018-10, Codification Improvements ASU 2018-11, Leases, Targeted Improvements ASU 2018-20, Leases	This standard, as amended by subsequent ASUs on the topic, sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for consistent with earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.	January 1, 2019	The Company adopted this standard by electing the package of practical expedients without hindsight which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date. The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4 million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the consolidated balance sheets. Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption. The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the consolidated balance sheets.
ASU 2018-01, Leases, Land Easement Practical Expedient for Transition to Topic 842	In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately.	January 1, 2019	The Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the consolidated statements of operations for leases where the Company is the lessor. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our consolidated financial statements.

F-20

The following table represents ASUs to the FASB’s ASC that, as of the year ended December 31, 2019, are not yet effective for the Company and for which the Company has not elected early adoption, where permitted:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) ASU 2018-19, Codification improvements to Topic 326, Financial Instruments – Credit Losses	ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, requiring the use of an "expected credit loss" model and adding more disclosure requirements. ASU 2018-19 clarifies that impairment of receivables arising from operating leases should accounted for in accordance with Topic 842, Leases.	January 1, 2020	This standard is not expected to have a significant impact to our consolidated financial statements.

Note 3 – 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 $68.2 million and $10.6 million, respectively, as of December 31, 2019, and $123.7 million and $12.3 million, respectively, as of December 31, 2018.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): 

December 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	245,745	$	(180,639	)	$	65,106
Above-market leases, net		6,625		(3,578	)		3,047
Total	$	252,370	$	(184,217	)	$	68,153

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	15,912	$	(5,264	)	$	10,648
Total	$	15,912	$	(5,264	)	$	10,648

December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

F-21

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.5 million, $0.9 million and $1.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.  Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

2020	$	287
2021		148
2022		118
2023		175
2024		190

Amortization of acquired below-market ground leases resulted in additional rent expense of  $0.2 million for each of the years ended December 31, 2019, 2018 and 2017. Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

2020	$	203
2021		203
2022		203
2023		203
2024		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $40.5 million, $173.1 million and $139.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

2020	$	14,396
2021		13,226
2022		12,918
2023		12,118
2024		11,574

Note 4 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures.  The Company’s partners in these joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its 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.

F-22

As of December 31, 2019, the Company had investments in nine unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed    by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by    Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington    Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons		50.0	%		1		159,000
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management		50.0	%		1		—
						28		4,855,600

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

In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective joint venture agreements, which may result in an adjustment to the Gain (Loss) recognized. If the Contribution Value is subject to revaluation, the Company initially recognizes the Gain (Loss) at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a periodic basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the joint venture partners, as well as an adjustment to the Initial Gain (Loss).

Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the Gain (Loss) for those joint ventures subject to a revaluation.  The following table presents summarizes the properties contributed to the Company’s unconsolidated joint ventures:

		December 31, 2019
Unconsolidated Joint Venture	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	90.0	$	38.8
UTC JV	May 18, 2018		68.0		28.3
West Hartford JV (2)	May 18, 2018		20.3		(1.1	)
2019
Cockeysville JV (3)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (4)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate. The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million.

(2) The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022. The primary inputs in determining the Contribution Value for the West Hartford JV are

F-23

property operating income, real estate taxes and total project costs. The Contribution Value cannot be more than $29.6  million or less than $20.4  million, and the Gain (Loss) cannot be more than $5.8 million or more than a $3.4 million loss. As of December 31, 2019, the Company revaluated the Contribution Value and recorded an additional loss of $2.3 million.

(3) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the Cockeysville JV if certain milestones are met with respect to entitling the Additional Land Parcel for residential use. If the Additional Land Parcel is contributed to the Cockeysville JV, the Company will record an increased investment in the Cockeysville JV in an amount equal to 50% of the fair value of the Additional Land Parcel at the time of contribution. The Contribution Value of the Cockeysville JV is based upon the Company’s assessment of the probability of the Additional Land Parcel being entitled for residential use.  The maximum Gain (Loss) is the fair value of the Additional Land Parcel at the time the Contribution Value is revalued, which cannot be less than $3.8 million.

(4) The Tech Ridge JV is subject to a revaluation primarily based upon, the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

Other Joint Venture Transactions

The Company has contributed certain property to the following joint ventures in 2017:

GGP JVs

On July 12, 2017, the Company completed two transactions with Brookfield Retail Properties for gross consideration of $247.6 million whereby the Company (i) sold to Brookfield Retail Properties the Company’s 50% JV Interests in eight of the 12 assets in the GGP I JV for $190.1 million and recorded a gain of $43.7 million which is included in gain on sale of interest in unconsolidated joint venture within the consolidated statements of operations; and (ii) contributed five Wholly Owned Properties to the GGP II JV and sold a 50% interest in the new JV Properties to Brookfield Retail Properties for $57.5 million and recorded a gain of $11.5 million which is included in gain on sale of real estate within the consolidated statements of operations.

Simon JV

On November 3, 2017, the Company sold to its partner, Simon Property Group, Inc., its 50% joint venture interests in five of the ten assets in the Simon JV for $68.0 million and recorded a gain of $16.6 million which is included in gain on sale of interest in unconsolidated joint venture within the consolidated statements of operations.

Joint Venture Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV, the UTC JV, and Tech Ridge JV. The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its joint ventures. The Company also acts as the development manager for one of the properties in the GGP II JV which entitles the Company to receive certain development fees. The Company earned $1.6 million and $1.2 million from these services for the years ended December 31, 2019 and December 31, 2018, respectively.

F-24

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

	December 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	336,739		$	321,853
Buildings and improvements		517,068			508,302
Accumulated depreciation		(86,496	)		(72,239	)
		767,311			757,916
Construction in progress		177,028			78,227
Net investment in real estate		944,339			836,143
Cash and cash equivalents		27,977			14,741
Tenant and other receivables, net		3,113			5,220
Other assets, net		26,051			38,285
Total assets	$	1,001,480		$	894,389
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	14,218		$	10,406
Accounts payable, accrued expenses    and other liabilities		89,110			71,791
Total liabilities		103,328			82,197
Members Interest
Additional paid in capital		934,120			833,168
Retained earnings		(35,968	)		(20,976	)
Total members interest		898,152			812,192
Total liabilities and members interest	$	1,001,480		$	894,389

	Year Ended December 31,
	2019			2018			2017
EQUITY IN INCOME OF      UNCONSOLIDATED JOINT VENTURES
Total revenue	$	31,470		$	48,455		$	58,264
Property operating expenses		(11,385	)		(9,357	)		(11,358	)
Depreciation and amortization		(60,745	)		(31,676	)		(47,948	)
Operating income (loss)		(40,660	)		7,422			(1,042	)
Other expenses		(2,049	)		(28,317	)		(14,533	)
Gain on sale of real estate, net		6,721			—			—
Net (loss) income	$	(35,988	)	$	(20,895	)	$	(15,575	)
Equity in (loss) income of unconsolidated    joint ventures	$	(17,994	)	$	(10,448	)	$	(7,788	)

Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP.  The Company shares in the profits and losses of these unconsolidated joint ventures generally in accordance with the Company’s respective equity interests.  In some instances, the Company may recognize profits and losses related to investment in an unconsolidated 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 or other items.  There were no joint venture impairment charges for the years ended December 31, 2019, 2018 and 2017.

F-25

Note 5 – Leases

On February 28, 2019, the Company and certain affiliates of Holdco executed the Holdco Master Lease which became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.  The Company analyzed this transaction under applicable accounting guidance and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification in accordance with ASC 842.

Lease Structure

The structure of the Holdco Master Lease is consistent with the structure of the Original Master Lease in all material respects, including (i) it is a unitary, non-divisible lease as to all properties, pursuant to which the tenant’s obligations as to each property are cross-defaulted with all obligations of the tenant with respect to all other properties; (ii) it is a triple net lease with respect to all space which is leased thereunder to the tenant, subject to proportional sharing by the tenant for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by the tenant and other space occupied by other tenants in the same or other buildings, space which is recaptured pursuant to the Company’s recapture rights described below and all other space which is constructed on the properties; (iii) the tenant 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; and (iv) the tenant is generally prohibited from subleasing any space demised under the lease.

Term and Renewals

Consistent with the terms of the Original Master Lease, the Holdco Master Lease will expire in July 2025, and contains three options for five-year renewals of the term and a final option for a four-year renewal, as was the case under the Original Master Lease.

Rental Revenue

The Holdco Master Lease provides for an initial base rent at the same rates which were in place at the time the Original Master Lease was rejected. In each of the initial term and the first two renewal terms, consistent with the Original Master Lease, base rent under the Holdco Master Lease will be increased in August of each year by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, consistent with the Original Master Lease, rent will be set at the commencement of the renewal term for the Holdco Master Lease at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Holdco 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 base rent under the Holdco Master Lease will be subject to an adjustment in the form of a rent credit of up to approximately $12 million in each of the first and second years of the Holdco Master Lease.  The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018.  If any such properties are recaptured by the Company or terminated by Holdco, the base rent credit attributable to such property will no longer be applicable.  The rent credit is applicable to base rent only and Holdco is responsible for repair and maintenance charges, real property taxes, insurance and other costs and expenses associated with its occupancy of the subject properties.

Revenues from the Holdco Master Lease and the Original Master Lease for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands and excluding straight-line rental income of $0.3 million, ($4.9) million and $0.8 million, respectively.

	Year Ended December 31,
	2019		2018		2017
Fixed rental income	$	27,628	$	86,224	$	112,881
Variable rental income		23,525		65,450		70,987
Total rental income	$	51,153	$	151,674	$	183,868

Seritage Recapture Rights

The Holdco Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by the tenant at all properties (other than five specified properties) and 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 parking areas and common areas.  Upon exercise of any of these partial recapture rights the Company will generally incur, as applicable, certain costs and expenses for the separation of the recaptured space from the remaining tenant space.

Additionally, in contrast to the Original Master Lease, which permitted the Company to recapture 100% of certain properties upon payment of a specified recapture fee, the Holdco Master Lease provides the Company with the right, beginning in March 2020, to recapture 100% of the space occupied by the tenant at any of the properties included in the Holdco Master Lease (other than five

F-26

specified properties) without paying a recapture fee.  This right to recapture 100% of any property is limited to 10 properties in each year of the Holdco Master Lease term, with carry-over rights if less than 10 properties are recaptured in any given lease year.  In the event of a 100% recapture of a property (or termination of a property by Holdco that is subject to a termination fee) and any subsequent redevelopment of such property for retail purposes, Holdco has certain rights of first offer to lease space at specified predefined rates depending on the condition the space is delivered.  If the Company does not provide Holdco with a right of first offer on at least one-third of any such properties that are recaptured 100% by the Company (or terminated by Holdco with payment of a termination fee) in a given lease year, then the Company’s 100% recaptures rights are subject to payment of a recapture fee until such time as the Company has complied with the foregoing ratio.

Upon the exercise of any of its recapture rights, the Company can reconfigure and rent the recaptured space to new, diversified tenants on potentially superior terms as determined by the Company and for its own account.

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

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

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

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

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

Holdco Termination Rights

Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, beginning in March 2020, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year of the term of the Holdco Master Lease, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.  

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

The following table provides a summary of Sears Holdings’ and Holdco’s termination activity (excluding 31 properties totaling 4.3 million square feet that were rejected on March 12, 2019 as part of Sears Holdings’ bankruptcy filing):

F-27

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

(1) Two properties were terminated in October 2018.

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

As of December 31, 2019, the Company had commenced or completed redevelopment projects at 46 of the terminated properties, and sold an additional 24 of the terminated properties, and will continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears or Kmart.

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of December 31, 2019 and December 31, 2018 is approximately as follows:

(in thousands)	December 31, 2019
2020		113,265
2021		121,909
2022		124,067
2023		119,745
2024		116,607
Thereafter		1,019,054
Total Lease Payments	$	1,614,647

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

The components of lease revenues for the years ended December 31, 2019, December 31, 2018 and December 31, 2017 were as follows:

	Year Ended December 31,
(in thousands)	2019		2018		2017
Fixed rental income		104,956		140,661		154,599
Variable rental income		45,994		74,839		81,528
Total rental income	$	150,950	$	215,500	$	236,127

F-28

Lessee Disclosures

The Company has one ground lease and multiple corporate office leases which are classified as operating leases.  The Company initially recorded $8.6 million of right-of-use, or ROU, assets and lease liabilities. The Company’s ROU assets were subsequently increased by $11.0 million as a result of the reclassification of acquired below-market lease assets, net, from lease intangible assets, net, during the years ended 2019. As of December 31, 2019, the outstanding amount of ROU assets were $18.5 million.

The Company recorded rent expense related to leased corporate office space of $1.6 million, $0.7 million, and $0.7 million for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively. Such rent expense is classified within general and administrative expenses on the consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $45 thousand for each of the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively. Such rent expense is classified within general and administrative expenses on the consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

The following table sets forth information related to the measurement of our lease liabilities as of December 31, 2019:

(dollar amounts in thousands)	As of December 31, 2019
Weighted average remaining lease term (in years)		10.54
Weighted average discount rate		7.20	%
Cash paid for operating leases	$	2,161

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent.  The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. The Term Loan Facility matures on July 31, 2023.

The Company used a portion of the proceeds from the Initial Funding to (i) repay existing indebtedness and (ii) pay transaction and related costs.  The remaining proceeds from the Initial Funding, as well as borrowings under the Incremental Funding Facility, will be used to fund the Company’s redevelopment pipeline and to pay operating expenses of the Company and its subsidiaries.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the consolidated statements of operations.

As of December 31, 2019, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million and (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Borrower.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Borrower and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal

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quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion.  Any failure to satisfy any of these financial metrics limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default.  The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, 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 Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of December 31, 2019, the Company was not in compliance with certain of the financial metrics described above.  As a result, the Company must receive the consent of Berkshire Hathaway to dispose of assets via sale or joint venture and, as of December 31, 2019, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. There can be no assurance that the lender will consent to future dispositions of assets. Additionally, Berkshire Hathaway has the right to request mortgages against the Company’s assets pursuant to the mortgage and collateral requirement. During the year ended December 31, 2019, Berkshire Hathaway requested mortgages on a majority of the Company’s portfolio which were recorded in accordance with the requirement (the “Lender Request”). There are no other changes to the terms and conditions of the Term Loan Facility, or the Company’s ability to operate thereunder, as a result of providing mortgages against any of the Company’s assets pursuant to the mortgage and collateral requirement. The Company accounted for the Lender Request transaction as a modification of debt as of December 31, 2019. Related to the modification, the Company incurred $5.0 million mortgage recording costs which are classified as interest expenses on the consolidated statements of operations.

The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement.  As of December 31, 2019, the unamortized balance of the Company’s debt issuance costs was $1.5 million.

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 “Mortgage 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”).  The Mortgage Loans and Future Funding Facility were secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs.  Pursuant to the terms of the Mortgage Loan Agreements, amounts available under the Future Funding Facility were fully drawn by the Company on June 30, 2017.  Such amounts were deposited into a redevelopment reserve and used to fund redevelopment activity at the Company’s properties.  

Interest under the Mortgage Loans was due and payable on the payment dates, and all outstanding principal amounts were due when the loan was scheduled to mature on the payment date in July 2019, pursuant to the Loan Agreements.  The Company had two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions.  Borrowings under the Mortgage Loans bore interest at the London Interbank Offered Rates (“LIBOR”) plus, as of July 31, 2018, a weighted-average spread of 485 basis points; payments were made monthly on an interest-only basis.  The weighted-average interest rates for the Mortgage Loans and Future Funding Facility for the year ended December 31, 2017 was 6.03%.

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The Company incurred $22.3 million of debt issuance costs related to the Mortgage Loans and Future Funding Facility which were recorded as a direct deduction from the carrying amount of the Mortgage Loans and Future Funding Facility and amortized over the term of the Mortgage Loan Agreements.  During the year ended December 31, 2018, the Company fully amortized the remaining unamortized debt issuance costs as a result of the full repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018.  As of December 31, 2019 and December 31, 2018, the Company had no unamortized debt issuance costs related to the Mortgage Loans and Future Funding Facility.

On July 31, 2018, the aggregate principal amounts outstanding under the Mortgage Loans and the Future Funding Facility were repaid in full and no amounts were outstanding as of December 31, 2019.

Unsecured Delayed Draw Term Loan

On February 23, 2017, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a $200 million senior unsecured delayed draw term loan facility (the “Unsecured Delayed Draw Term Loan”) with JPP, LLC and JPP II, LLC as lenders (collectively, the “Original Lenders”) and JPP, LLC as administrative agent.

The total commitment of the Lenders under the Unsecured Delayed Draw Term Loan was $200 million and the maturity date was December 31, 2017.  On February 23, 2017, the Operating Partnership paid to the Original Lenders an upfront commitment fee equal to $1.0 million.  On May 24, 2017, the Operating Partnership paid to the Original Lenders an additional, and final, commitment fee of $1.0 million.  

The principal amount of loans outstanding under the Unsecured Delayed Draw Term Loan, prior to its repayment, bore a base annual interest rate of 6.50%.

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

Unsecured Term Loan

On December 27, 2017, the Operating Partnership, as borrower, and the Company, as guarantor, refinanced the Unsecured Delayed Draw Term Loan with a $200 million unsecured term loan facility (the “Unsecured Term Loan”).  The principal amount outstanding under the Unsecured Delayed Draw Term Loan at termination was $85 million. No prepayment penalties were triggered and the Unsecured Delayed Draw Term Loan terminated in accordance with its terms.

The lenders under the Unsecured Delayed Draw Term Loan, JPP, LLC and JPP II, LLC, maintained their funding of $85 million in the Unsecured Term Loan, with JPP, LLC appointed as administrative agent under the Unsecured Term Loan.  An affiliate of Empyrean Capital Partners, L.P., a Delaware limited partnership (and together with JPP, LLC and JPP II LLC, each an “Initial Lender” and collectively, the “Initial Lenders”), funded $60 million under the Unsecured Term Loan, resulting in a total of $145 million committed and funded under the Unsecured Term Loan at closing.  The Borrower paid to each Initial Lender an upfront fee in an aggregate amount equal to 1.00% of the principal amount of the loan made by such Initial Lender.

Under an accordion feature, the Company had the right to increase the total commitments up to $200 million and place an additional $55 million of incremental loans with the Initial Lenders or new lenders. The Initial Lenders under the Unsecured Term Loan were not obligated to make all or any portion of the incremental loans.

The Company used the proceeds of the Unsecured Term Loan, among other things, to refinance the Unsecured Delayed Draw Term Loan, to fund redevelopment projects and for other general corporate purposes.  Loans under the Unsecured Term Loan were guaranteed by the Company.

The Unsecured Term Loan matured on the earlier of (i) December 31, 2018 and (ii) the date on which the outstanding indebtedness under the Company’s existing mortgage and mezzanine facilities are repaid in full.  The Unsecured Term Loan was prepayable at any time in whole or in part, without any penalty or premium.  Amounts drawn under the Unsecured Term Loan and repaid may not have been redrawn.

The principal amount of loans outstanding under the Unsecured Term Loan bore a base annual interest rate of 6.75%.

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The Company incurred $1.8 million of debt issuance costs related to the Unsecured Term Loan which was recorded as a direct deduction from the carrying amount of the Unsecured Term Loan and amortized over the term of the loan.  During the year ended December 31, 2018, the Company fully amortized the remaining unamortized debt issuance costs as a result of the full repayment of the Unsecured Term Loan on July 31, 2018.  As of December 31, 2019 and December 31, 2018, the Company had no unamortized debt issuance costs related to the Unsecured Term Loan.

Edward S. Lampert, the Company’s Chairman, is the Chairman and Chief Executive Officer of ESL Investments, Inc., 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. Lampert recusing himself).

On July 31, 2018, the principal amounts outstanding under the Unsecured Term Loan were repaid in full and no amounts were outstanding as of December 31, 2019.

Note 7 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for U.S. 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 U.S. 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 U.S. federal income tax  at regular corporate rates (including for any taxable year ended on or before December 31, 2017, any applicable alternative minimum tax) and any applicable state and local income taxes.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain U.S. state, local and Puerto Rico taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed REIT taxable income. The Company’s taxable REIT subsidiaries are subject to corporate income tax.

The Company evaluated whether any uncertain tax positions existed as of December 31, 2019 and 2018 and concluded that there are no uncertain tax positions.

Note 8 – 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.  The Company also considers 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 were carried at fair value and were valued using Level 2 inputs.  The Company had no derivative instruments as of December 31, 2019 (an interest rate cap associated with the Mortgage Loans and Future Funding Facility was terminated subsequent to the repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018). The Company utilized an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The Company had elected not to utilize hedge accounting, and therefore, the change in fair value was included in previous periods within change in fair value of interest rate cap on the consolidated statements of operations.  For the year ended December 31, 2019, the Company did not record any gain or loss compared to losses of $23 thousand and $0.7 million for the years ended December 31, 2018 and 2017, respectively.

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Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash equivalents, term loan facility and mortgage loans payable.  The fair value of cash equivalents is classified as Level 1 and the fair value of term loan facility and mortgage loans payable are classified as Level 2. Cash equivalents are carried at cost, which approximates fair value.  The fair value of debt obligations 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, 2019 and December 31, 2018, the estimated fair values of the Company’s debt obligations were $1.6 billion and $1.6 billion, respectively, which approximated the carrying value at such dates as the current risk-adjusted rate approximates the stated rates on the Company’s debt obligations.

Note 9 – 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 2027.

Insurance premiums are charged directly to each of the 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 Holdco Master Lease, Holdco is required to indemnify the Company from certain environmental liabilities at the Wholly Owned Properties before or during the period in which each Wholly Owned Property was leased to Holdco, including removal and remediation of all affected facilities and equipment constituting the automotive care center.  In addition, an environmental reserve was funded at the closing of the Transaction in the amount of approximately $12.0 million.  As of December 31, 2019, the balance of the environmental reserve was approximately $9.5 million.

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 discloses 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.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, and the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (the Company, the Operating Partnership, and certain of our affiliates and subsidiaries collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of the proceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.  

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On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination. The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intends to defend against them vigorously.

In addition to the litigation described above, 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. As of December 31, 2019, and December 31, 2018, the Company did not record any amounts for litigation or other matters.

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings.  Mr. Lampert is also the Chairman of Seritage.

As of December 31, 2019, Mr. Lampert beneficially owned a 33.9% interest in the Operating Partnership and approximately 2.4% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.

Subsidiaries of Holdco, as lessees, and subsidiaries of the Company, as lessors, are parties to the Holdco Master Lease and subsidiaries of Sears Holdings, as lessees, and subsidiaries of the Company, as lessors, were parties to the Original Master Lease (see Note 5).

Unconsolidated Joint Ventures

Certain unconsolidated joint ventures have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated joint ventures.  Fees for the services performed are reported at 100% of the revenue earned from such joint ventures in management and other fee income on the consolidated statements of operations.  The Company’s share of the expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.

In addition, as of December 31, 2019, the Company had incurred $9.7 million of development expenditures at properties owned by certain unconsolidated joint ventures for which the Company will be repaid by the respective unconsolidated joint ventures.  These amounts are included in tenant and other receivables, net on the Company’s consolidated balance sheets.  As of December 31, 2018, the Company had incurred $2.1 million of these development expenditures.

Note 11 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership which was amended and restated on December 14, 2017.  Pursuant to this partnership agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners.

As of December 31, 2019, the Company held a 66.1% interest in the Operating Partnership and ESL held a 33.9% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the periods presented.

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Note 12 – 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 Brookfield Properties Retail and Simon Property Group, Inc. 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 Brookfield Properties Retail liquidated its position during the year ended December 31, 2016 and the subsidiary of Simon Property Group, Inc. liquidated its position during the year ended December 31, 2017.

During the year ended December 31, 2019, 1,214,577 OP Units were exchanged for an equal number of Class A shares.

As of December 31, 2019, 36,897,364 Class A common shares were issued and outstanding.

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.

During the year ended December 31, 2019, 79,829 Class B non-economic common shares were surrendered to the Company.

As of December 31, 2019, 1,242,536 Class B non-economic common shares were issued and outstanding.  

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

As of December 31, 2019, there were no Class C non-voting common shares issued or outstanding.

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

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Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share.  The Company received net proceeds from the offering of approximately $66.4 million, after deducting payment of the underwriting discount and offering expenses, which it used to fund its redevelopment pipeline and for general corporate purposes.

The Company may not redeem the Series A Preferred Shares before December 14, 2022 except to preserve its status as a REIT or upon the occurrence of a Change of Control, as defined in the trust agreement addendum designating the Series A Preferred Shares.  On and after December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. In addition, upon the occurrence of a Change of Control, the Company may redeem any or all of the Series A Preferred Shares for cash within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of OP Units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

As previously disclosed, the Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2020.  The Company intends to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred shares.

The Company declared total dividends of $0.25, $1.00 and $1.00 per common share for the years ended December 31, 2019, 2018 and 2017, respectively. The dividends have been reflected as follows for U.S. federal income tax purposes:

	Year Ended December 31,
	2019			2018		2017
Ordinary income	$	—		$	0.01	$	0.53
Capital gain distributions		—			0.35		0.47
Return of capital		0.50			0.39		—
Dividends reallocation (1)		(0.25	)		0.25		—
Total	$	0.25		$	1.00	$	1.00

(1) In 2018, the fourth quarter dividend of 2018 declared on October 23, 2018 was allocated to the 2019 tax year. 

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The Company’s Board of Trustees also declared the following dividends on preferred shares during 2019 and 2018:

Declaration Date	Record Date	Payment Date	Preferred Share
2019
October 23	December 31	January 15, 2020	$	0.43750
July 23	September 30	October 15		0.43750
April 30	June 28	July 15		0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

Note 13 – 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 the 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.

	Year Ended December 31,
(in thousands except per share amounts)	2019			2018			2017
Numerator - Basic and Diluted
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Net loss attributable to non-controlling interests		31,206			41,406			47,059
Preferred dividends		(4,900	)		(4,903	)		(245	)
Net loss attributable to common shareholders	$	(64,297	)	$	(78,375	)	$	(73,999	)
Earnings allocated to unvested participating securities		—			—			—
Net loss available to common shareholders - Basic    and diluted	$	(64,297	)	$	(78,375	)	$	(73,999	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		36,413			35,103			28,249
Weighted average Class C common shares outstanding		-			457			5,555
Weighted average Class A and Class C common shares outstanding		36,413			35,560			33,804
Net income (loss) per share attributable to Class A and    Class C common shareholders	$	(1.77	)	$	(2.20	)	$	(2.19	)

No adjustments were made to the numerator for the years ended December 31, 2019, 2018 or 2017 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 years ended December 31, 2019, 2018 or 2017 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

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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, 2019, 2018 and 2017, there were 349,318, 403,129 and 245,570 shares, respectively, of non-vested restricted shares outstanding.

Note 14 – Share-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. 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 and Share Units

Pursuant to the Plan, the Company has periodically made grants of restricted shares or share units. 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 in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vest on the third, and in some instances, the fourth anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units 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 and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares. See Note 2 for valuation information related to the grants of the awards that are subject to market-based vesting conditions.

The following table summarizes restricted share activity for the grant periods ended December 31, 2019 and 2018:

	Year Ended December 31, 2019					Year Ended December 31, 2018
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57		245,570		$	41.33
Restricted shares granted		76,948			57.04		261,059			40.80
Restricted shares vested		(127,767	)		41.76		(99,956	)		39.04
Restricted shares forfeited		(2,992	)		45.02		(3,544	)		38.83
Unvested restricted shares at end of period		349,318		$	44.88		403,129		$	41.57

The Company recognized share-based compensation of $6.8 million, $7.5 million and $7.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company's consolidated statements of operations.

As of December 31, 2019, there were $7.4 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 1.6 years. As of December 31, 2018, there were $9.3 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 1.9 years.

F-38

Note 15 – Quarterly Financial Information (unaudited)

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

	2019												2018
	First			Second			Third			Fourth			First		Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter			Quarter		Quarter			Quarter			Quarter
Total revenue	$	43,860		$	40,511		$	47,628		$	36,634		$	53,777	$	49,270		$	56,593		$	55,114
Total expenses		56,404			47,952			50,349			69,750			61,147		74,083			76,802			120,839
Net income (loss)		(10,894	)		(25,885	)		(16,482	)		(37,342	)		16,201		(10,602	)		(34,744	)		(85,733	)
Net income (loss) attributable to    common shareholders		(8,192	)		(18,128	)		(12,103	)		(25,874	)		9,100		(7,996	)		(23,441	)		(56,038	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Basic		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Diluted		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Weighted average Class A and Class C    common shares outstanding - Basic		35,671			36,291			36,829			36,846			35,414		35,483			35,598			35,589
Weighted average Class A and Class C    common shares outstanding - Diluted		35,671			36,291			36,829			36,846			35,501		35,483			35,598			35,589

Certain of the above selected quarterly financial data includes significant depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles as a result of the recapture of space from, or the termination of space by, Holdco and Sears Holdings. Certain of the above selected quarterly financial data also includes gains on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.  The following table sets forth these selected quarterly financial data for the Company (in thousands, except per share amounts):

	2019								2018
	First		Second		Third		Fourth		First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Depreciation and amortization expense (1)	$	10,800	$	2,059	$	4,286	$	18,548	$	11,016	$	26,758	$	31,444	$	78,311
Gains on the sale of interests (2)		21,260		11,613		12,445		25,786		41,831		34,187		17,401		2,745

(1) Denotes depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles.

(2) Denotes gains on the on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.

F-39

SERITAGE GROWTH PROPERTIES

SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2019

(Dollars in thousands)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Broadway Center	Merrillville, IN	(2)	$	3,413	$	3,224	$	—		$	612		$	3,413	$	3,836	$	7,249	$	(1,585	)	July, 2015	(3)
Stand-Alone Location	Tulsa, OK	(2)		2,048		5,386		—			2,767			2,048		8,153		10,201		(1,688	)	July, 2015	(3)
Sherwood Plaza	Springfield, IL	(2)		2,182		5,051		(213	)		14,796			1,969		19,847		21,816		(1,600	)	July, 2015	(3)
Kmart Plaza	North Canton, OH	(2)		1,044		1,126		—			1			1,044		1,127		2,171		(549	)	July, 2015	(3)
North Pointe Plaza	Elkhart, IN	(2)		1,349		869		—			36			1,349		905		2,254		(386	)	July, 2015	(3)
Kedzie Square	Chicago, IL	(2)		2,385		7,924		—			17			2,385		7,941		10,326		(1,585	)	July, 2015	(3)
Ramona Station	Ramona, CA	(2)		7,239		1,452		—			(318	)		7,239		1,134		8,373		(156	)	July, 2015	(3)
Stand-Alone Location	Kearney, NE	(2)		272		483		—			7,838			272		8,321		8,593		(546	)	July, 2015	(3)
Braintree Marketplace	Braintree, MA	(2)		6,585		5,614		—			11,308			6,585		16,922		23,507		(2,329	)	July, 2015	(3)
Western Plaza	Mayaguez, PR	(2)		564		4,555		—			—			564		4,555		5,119		(1,149	)	July, 2015	(3)
Stand-Alone Location	Delano, CA	(2)		1,905		2,208		—			—			1,905		2,208		4,113		(592	)	July, 2015	(3)
Stand-Alone Location	Walnutport, PA	(2)		885		3,452		—			—			885		3,452		4,337		(1,268	)	July, 2015	(3)
Stand-Alone Location	St. Clair Shores, MI	(2)		2,399		1,797		—			(129	)		2,399		1,668		4,067		(232	)	July, 2015	(3)
Stand-Alone Location	El Paso, TX	(2)		2,008		1,778		—			2,427			2,008		4,205		6,213		(237	)	July, 2015	(3)
Stand-Alone Location	Hialeah, FL	(2)		5,492		2,344		—			13,480			5,492		15,824		21,316		(701	)	July, 2015	(3)
Stand-Alone Location	North Miami, FL	(2)		4,748		2,434		—			(278	)		4,748		2,156		6,904		(323	)	July, 2015	(3)
Flower Valley Shopping Center	Florissant, MO	(2)		2,430		1,607		—			221			2,430		1,828		4,258		(176	)	July, 2015	(3)
Stand-Alone Location	St. Petersburg, FL	(2)		1,653		777		—			(279	)		1,653		498		2,151		(75	)	July, 2015	(3)
Stand-Alone Location	Riverside, CA	(2)		2,670		2,489		—			66			2,670		2,555		5,225		(1,002	)	July, 2015	(3)
Kmart Center	Antioch, CA	(2)		1,594		2,525		—			—			1,594		2,525		4,119		(741	)	July, 2015	(3)
Hillside Plaza	Manistee, MI	(2)		508		3,045		—			(625	)		508		2,420		2,928		(330	)	July, 2015	(3)
Thornton Place	Thornton, CO	(2)		1,881		1,300		—			2,899			1,881		4,199		6,080		(378	)	July, 2015	(3)
Stand-Alone Location	Jefferson City, MO	(2)		957		2,224		—			285			957		2,509		3,466		(743	)	July, 2015	(3)
Stand-Alone Location	New Iberia, LA	(2)		450		1,819		—			6,629			450		8,448		8,898		(1,057	)	July, 2015	(3)
Center of Osceola	Kissimmee, FL	(2)		2,107		2,556		—			47			2,107		2,603		4,710		(925	)	July, 2015	(3)
Stand-Alone Location	Steger, IL	(2)		589		2,846		—			—			589		2,846		3,435		(479	)	July, 2015	(3)
Beachway Plaza	Bradenton, FL	(2)		1,420		1,479		—			(414	)		1,420		1,065		2,485		(155	)	July, 2015	(3)
Mill Creek Marketplace	McKinleyville, CA	(2)		1,354		1,655		—			—			1,354		1,655		3,009		(646	)	July, 2015	(3)
Antelope Square	Layton, UT	(2)		2,234		974		—			4,792			2,234		5,766		8,000		(832	)	July, 2015	(3)
Stand-Alone Location	Honolulu, HI	(2)		6,824		2,195		—			21,276			6,824		23,471		30,295		(1,779	)	July, 2015	(3)
Pennyrile Marketplace	Hopkinsville, KY	(2)		553		2,815		—			2,202			553		5,017		5,570		(461	)	July, 2015	(3)
Stand-Alone Location	Santa Paula, CA	(2)		2,002		1,147		—			—			2,002		1,147		3,149		(676	)	July, 2015	(3)
Big Bear Lake Shopping Center	Big Bear Lake, CA	(2)		3,664		2,945		—			66			3,664		3,011		6,675		(792	)	July, 2015	(3)
Sidney Plaza	Sidney, NY	(2)		1,942		1,769		—			(641	)		1,942		1,128		3,070		(154	)	July, 2015	(3)
Stand-Alone Location	Olean, NY	(2)		249		2,124		—			5,133			249		7,257		7,506		(422	)	July, 2015	(3)
Kmart & Lowes Shopping Center	Lebanon, PA	(2)		1,333		2,085		—			(952	)		1,333		1,133		2,466		(154	)	July, 2015	(3)
South River Colony	Edgewater, MD	(2)		5,534		2,116		—			(630	)		5,534		1,486		7,020		(202	)	July, 2015	(3)
Columbus Centre	Columbus, MS	(2)		2,940		2,547		—			1,187			2,940		3,734		6,674		(1,445	)	July, 2015	(3)

F-40

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Stand-Alone Location	Rehoboth Beach, DE	(2)	$	714	$	4,523	$	(134	)	$	6,837		$	580	$	11,360	$	11,940	$	(1,860	)	July, 2015	(3)
Stand-Alone Location	Kenton, OH	(2)		340		417		—			(233	)		340		184		524		(25	)	July, 2015	(3)
Ponce Towne Center	Ponce, PR	(2)		473		3,965		—			—			473		3,965		4,438		(953	)	July, 2015	(3)
Boulevard Market Fair	Anderson, SC	(2)		1,297		638		—			9,325			1,297		9,963		11,260		(1,547	)	July, 2015	(3)
Stand-Alone Location	Deming, NM	(2)		1,085		1,194		—			—			1,085		1,194		2,279		(586	)	July, 2015	(3)
Stand-Alone Location	Charles City, IA	(2)		793		1,914		—			—			793		1,914		2,707		(763	)	July, 2015	(3)
Plaza Guaynabo	Guaynabo, PR	(2)		1,603		26,695		—			5,042			1,603		31,737		33,340		(4,518	)	July, 2015	(3)
Rexville (Bayamon) Towne Center	Bayamon, PR	(2)		656		7,173		—			1			656		7,174		7,830		(1,318	)	July, 2015	(3)
Stand-Alone Location	Algona, IA	(2)		644		2,796		—			—			644		2,796		3,440		(692	)	July, 2015	(3)
Webster City Plaza	Webster City, IA	(2)		392		896		—			—			392		896		1,288		(301	)	July, 2015	(3)
Midtown Shopping Center	Madawaska, ME	(2)		140		942		—			—			140		942		1,082		(191	)	July, 2015	(3)
Stand-Alone Location	Cullman, AL	(2)		947		846		—			4,059			947		4,905		5,852		(410	)	July, 2015	(3)
Stand-Alone Location	Sault Ste. Marie, MI	(2)		946		917		—			(478	)		946		439		1,385		(64	)	July, 2015	(3)
Countryside Shopping Center	Mount Pleasant, PA	(2)		970		1,520		—			2,696			970		4,216		5,186		(281	)	July, 2015	(3)
Eastern Commons Shopping Center	Henderson, NV	(2)		3,124		1,362		—			2,023			3,124		3,385		6,509		(216	)	July, 2015	(3)
The Mall at Rockingham Park	Salem, NH	(2)		3,321		12,198		—			9,766			3,321		21,964		25,285		(2,809	)	July, 2015	(3)
Paddock Mall	Ocala, FL	(2)		2,468		1,150		—			(456	)		2,468		694		3,162		(101	)	July, 2015	(3)
Stand-Alone Location	St Paul, MN	(2)		1,866		1,028		—			(309	)		1,866		719		2,585		(107	)	July, 2015	(3)
Square One Mall	Saugus, MA	(2)		1,656		2,835		—			—			1,656		2,835		4,491		(1,250	)	July, 2015	(3)
Valley View Center	Valley View, TX	(2)		4,706		3,230		—			(3,230	)		4,706		-		4,706		-		July, 2015	(3)
Memorial City SC	Memorial, TX	(2)		7,967		4,625		—			(812	)		7,967		3,813		11,780		(591	)	July, 2015	(3)
Overlake Plaza	Redmond Pk, WA	(2)		5,133		4,133		10,513			(244	)		15,646		3,889		19,535		(1,337	)	July, 2015	(3)
Westland Shopping Center	Lakewood, CO	(2)		1,290		4,550		—			—			1,290		4,550		5,840		(1,017	)	July, 2015	(3)
Superstition Springs Center	Mesa/East, AZ	(2)		2,661		2,559		—			(642	)		2,661		1,917		4,578		(261	)	July, 2015	(3)
Southridge Mall	Greendale, WI	(2)		3,208		2,340		—			14,406			3,208		16,746		19,954		(594	)	July, 2015	(3)
Rhode Island Mall	Warwick, RI	(2)		9,166		3,388		(696	)		8,816			8,470		12,204		20,674		(672	)	July, 2015	(3)
Caguas Mall	Caguas, PR	(2)		431		9,362		—			—			431		9,362		9,793		(1,604	)	July, 2015	(3)
The Mall at Sears	Anchorage(Sur), AK	(2)		11,517		11,729		—			19,339			11,517		31,068		42,585		(2,247	)	July, 2015	(3)
Stand-Alone Location	Chicago, IL	(2)		905		804		—			(241	)		905		563		1,468		(87	)	July, 2015	(3)
Stand-Alone Location	Okla City/Sequoyah, OK	(2)		1,542		2,210		—			4,631			1,542		6,841		8,383		(539	)	July, 2015	(3)
University Mall	Pensacola, FL	(2)		2,620		2,990		—			6,414			2,620		9,404		12,024		(30	)	July, 2015	(3)
Metcalf South Shopping Center	Overland Pk, KS	(2)		2,775		1,766		—			(646	)		2,775		1,120		3,895		(172	)	July, 2015	(3)
Colonie Center	Albany, NY	(2)		8,289		6,523		—			6,410			8,289		12,933		21,222		(1,260	)	July, 2015	(3)
Promenade in Temecula	Temecula, CA	(2)		6,098		2,214		—			8,525			6,098		10,739		16,837		(1,240	)	July, 2015	(3)
Clackamas Town Center	Happy Valley, OR	(2)		6,659		1,271		—			(166	)		6,659		1,105		7,764		(160	)	July, 2015	(3)
Maplewood Mall	Maplewood, MN	(2)		3,605		1,162		—			(521	)		3,605		641		4,246		(96	)	July, 2015	(3)
Stand-Alone Location	Shepherd, TX	(2)		5,457		2,081		—			(510	)		5,457		1,571		7,028		(244	)	July, 2015	(3)
Burnsville Center	Burnsville, MN	(2)		3,513		1,281		—			(505	)		3,513		776		4,289		(113	)	July, 2015	(3)

F-41

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Wolfchase Galleria	Cordova, TN	(2)	$	2,581	$	4,279	$	—		$	—		$	2,581	$	4,279	$	6,860	$	(1,025	)	July, 2015	(3)
Pacific View Mall	Ventura, CA	(2)		5,578		6,172		—			—			5,578		6,172		11,750		(841	)	July, 2015	(3)
Westfield Galleria at Roseville	Roseville, CA	(2)		4,848		3,215		—			9,078			4,848		12,293		17,141		(995	)	July, 2015	(3)
Westfield Solano	Fairfield, CA	(2)		3,679		1,366		—			2,348			3,679		3,714		7,393		(587	)	July, 2015	(3)
Stand-Alone Location	Central Park, TX	(2)		5,468		1,457		(1,904	)		6,171			3,564		7,628		11,192		(133	)	July, 2015	(3)
Valley Plaza	No Hollywood, CA	(2)		8,049		3,172		—			18,546			8,049		21,718		29,767		(1,302	)	July, 2015	(3)
Asheville Mall	Asheville, NC	(2)		4,141		2,036		—			(750	)		4,141		1,286		5,427		(193	)	July, 2015	(3)
Stand-Alone Location	Memphis/Poplar, TN	(2)		2,827		2,475		—			24,740			2,827		27,215		30,042		(2,301	)	July, 2015	(3)
Westfield West Covina	West Covina, CA	(2)		5,972		2,053		—			(648	)		5,972		1,405		7,377		(218	)	July, 2015	(3)
Crystal Mall	Waterford, CT	(2)		1,371		2,534		—			—			1,371		2,534		3,905		(881	)	July, 2015	(3)
Stand-Alone Location	Westwood, TX	(2)		2,899		1,748		—			(427	)		2,899		1,321		4,220		(180	)	July, 2015	(3)
McCain Mall	North Little Rock, AR	(2)		1,288		2,881		—			2,016			1,288		4,897		6,185		(399	)	July, 2015	(3)
Manchester Center	Fresno, CA	(2)		1,370		2,000		—			(920	)		1,370		1,080		2,450		(168	)	July, 2015	(3)
North Riverside Park Mall	N Riverside, IL	(2)		1,846		3,178		—			12,822			1,846		16,000		17,846		(1,589	)	July, 2015	(3)
Westgate Village Shopping Center	Toledo, OH	(2)		1,664		1,289		—			17			1,664		1,306		2,970		(669	)	July, 2015	(3)
Orlando Fashion Square	Orlando Colonial, FL	(2)		4,403		3,626		—			16,046			4,403		19,672		24,075		(572	)	July, 2015	(3)
Boise Towne Center	Boise, ID	(2)		1,828		1,848		—			—			1,828		1,848		3,676		(641	)	July, 2015	(3)
Lincoln Park Shopping Center	Lincoln Park, MI	(2)		1,106		3,198		—			(493	)		1,106		2,705		3,811		(420	)	July, 2015	(3)
Baybrook Mall	Friendswd/Baybrk, TX	(2)		6,124		2,038		—			2			6,124		2,040		8,164		(905	)	July, 2015	(3)
Stand-Alone Location	Hicksville, NYC	(2)		38,625		19,066		—			(888	)		38,625		18,178		56,803		(2,821	)	July, 2015	(3)
Pembroke Mall	Virginia Beach, VA	(2)		10,413		4,760		—			13,972			10,413		18,732		29,145		(3,477	)	July, 2015	(3)
Ingram Park Mall	Ingram, TX	(2)		4,651		2,560		—			—			4,651		2,560		7,211		(887	)	July, 2015	(3)
Landmark Mall	Alexandria, VA	(2)		3,728		3,294		—			(738	)		3,728		2,556		6,284		(383	)	July, 2015	(3)
Stand-Alone Location	Watchung, NYC	(2)		6,704		4,110		—			28,437			6,704		32,547		39,251		(593	)	July, 2015	(3)
Tyrone Square Mall	St Petersburg, FL	(2)		2,381		2,420		—			23,002			2,381		25,422		27,803		(2,209	)	July, 2015	(3)
Stand-Alone Location	Riverside, CA	(2)		4,397		4,407		—			(1,136	)		4,397		3,271		7,668		(508	)	July, 2015	(3)
Oglethorpe Mall	Savannah, GA	(2)		5,285		3,012		—			(344	)		5,285		2,668		7,953		(343	)	July, 2015	(3)
Pheasant Lane Mall	Nashua, NH	(2)		1,794		7,255		—			—			1,794		7,255		9,049		(1,082	)	July, 2015	(3)
Northwoods Mall	Chrlstn/Northwoods, SC	(2)		3,576		1,497		—			10,143			3,576		11,640		15,216		(621	)	July, 2015	(3)
Park Place	Park Mall, AZ	(2)		5,207		3,458		—			567			5,207		4,025		9,232		(421	)	July, 2015	(3)
Westfield Hialeah	Hialeah/Westland, FL	(2)		9,683		3,472		—			1,506			9,683		4,978		14,661		(1,368	)	July, 2015	(3)
Mall of Acadiana	Lafayette, LA	(2)		1,406		5,094		—			—			1,406		5,094		6,500		(1,508	)	July, 2015	(3)
Chula Vista Center	Chula Vista, CA	(2)		7,315		6,834		—			(902	)		7,315		5,932		13,247		(921	)	July, 2015	(3)
Southland Mall	Miami/Cutler Rdg, FL	(2)		5,219		1,236		—			(206	)		5,219		1,030		6,249		(155	)	July, 2015	(3)
Stand-Alone Location	Chicago, IL	(2)		3,665		3,504		—			—			3,665		3,504		7,169		(580	)	July, 2015	(3)
Inland Center	San Bernardino, CA	(2)		4,131		2,066		—			(780	)		4,131		1,286		5,417		(193	)	July, 2015	(3)
Florin Mall	Florin, CA	(2)		1,022		1,366		—			(293	)		1,022		1,073		2,095		(161	)	July, 2015	(3)
Westfield Belden Village	Canton, OH	(2)		1,650		5,854		—			4,894			1,650		10,748		12,398		(722	)	July, 2015	(3)

F-42

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Westfield Countryside	Clearwater/Cntrysd, FL	(2)	$	5,852	$	17,777	$	—		$	834		$	5,852	$	18,611	$	24,463	$	(3,560	)	July, 2015	(3)
Southland Shopping Center	Middleburg Hts, OH	(2)		698		1,547		—			(322	)		698		1,225		1,923		(190	)	July, 2015	(3)
Westfield Parkway	El Cajon, CA	(2)		10,573		2,883		—			1,709			10,573		4,592		15,165		(288	)	July, 2015	(3)
Macomb Mall	Roseville, MI	(2)		3,286		4,778		—			11,557			3,286		16,335		19,621		(2,583	)	July, 2015	(3)
Shops at Tanforan	San Bruno, CA	(2)		7,854		4,642		—			(977	)		7,854		3,665		11,519		(550	)	July, 2015	(3)
Eastridge Mall	San Jose-Eastridge, CA	(2)		1,531		2,356		—			(805	)		1,531		1,551		3,082		(233	)	July, 2015	(3)
Oakland Mall	Troy, MI	(2)		7,954		2,651		(815	)		5,719			7,139		8,370		15,509		(1,263	)	July, 2015	(3)
Edison Mall	Ft Myers, FL	(2)		3,168		2,853		—			(418	)		3,168		2,435		5,603		(378	)	July, 2015	(3)
Chapel Hill Mall	Chapel Hill, OH	(2)		444		1,460		—			(819	)		444		641		1,085		(96	)	July, 2015	(3)
Greece Ridge Center	Rochester-Greece, NY	(2)		3,082		1,560		—			(380	)		3,082		1,180		4,262		(171	)	July, 2015	(3)
Westfield Broward	Plantation, FL	(2)		6,933		2,509		—			(823	)		6,933		1,686		8,619		(245	)	July, 2015	(3)
Sunrise Mall	Citrus Hts-Sunrise, CA	(2)		3,778		2,088		—			(775	)		3,778		1,313		5,091		(197	)	July, 2015	(3)
Dayton Mall	Dayton Mall, OH	(2)		2,650		1,223		—			2,360			2,650		3,583		6,233		(273	)	July, 2015	(3)
Southbay Pavilion	Carson, CA	(2)		11,476		5,223		—			17,835			11,476		23,058		34,534		(1,852	)	July, 2015	(3)
Stand-Alone Location	Middletown, NJ	(2)		5,647		2,941		—			(1,041	)		5,647		1,900		7,547		(279	)	July, 2015	(3)
Eastview Mal	Victor, NY	(2)		4,144		1,391		—			(397	)		4,144		994		5,138		(149	)	July, 2015	(3)
Westminster Mall	Westminster, CA	(2)		6,845		5,651		—			—			6,845		5,651		12,496		(1,615	)	July, 2015	(3)
Greenbrier Mall	Chspk/Greenbrier, VA	(2)		4,236		1,700		—			(482	)		4,236		1,218		5,454		(177	)	July, 2015	(3)
Great Northern Mall	Clay, NY	(2)		787		4,134		—			—			787		4,134		4,921		(1,081	)	July, 2015	(3)
Westfield Sarasota	Sarasota, FL	(2)		3,920		2,200		—			—			3,920		2,200		6,120		(947	)	July, 2015	(3)
Town Center at Boca Raton	Boca Raton, FL	(2)		16,089		7,480		—			(515	)		16,089		6,965		23,054		(1,011	)	July, 2015	(3)
Aventura Mall	Miami, FL	(2)		13,264		61,577		—			(61,520	)		13,264		57		13,321		(52	)	July, 2015	(3)
Meadows Mall	Las Vegas(Meadows), NV	(2)		3,354		1,879		—			2,777			3,354		4,656		8,010		(219	)	July, 2015	(3)
Northridge Center	Salinas, CA	(2)		2,644		4,394		—			—			2,644		4,394		7,038		(1,233	)	July, 2015	(3)
Newpark Mall	Newark, CA	(2)		4,312		3,268		—			(660	)		4,312		2,608		6,920		(379	)	July, 2015	(3)
Desert Sky Mall	Phoenix-Desert Sky, AZ	(2)		2,605		2,448		—			—			2,605		2,448		5,053		(860	)	July, 2015	(3)
Miami International Mall	Doral(Miami), FL	(2)		9,214		2,654		—			(600	)		9,214		2,054		11,268		(298	)	July, 2015	(3)
Louis Joliet Mall	Joliet, IL	(2)		2,557		3,108		—			—			2,557		3,108		5,665		(1,488	)	July, 2015	(3)
Montclair Plaza	Montclair, CA	(2)		2,498		2,119		—			—			2,498		2,119		4,617		(420	)	July, 2015	(3)
Orland Square	Orland Park, IL	(2)		1,783		974		—			(380	)		1,783		594		2,377		(86	)	July, 2015	(3)
Huntington Square Mall	East Northport, NY	(2)		7,617		2,065		—			20,351			7,617		22,416		30,033		(477	)	July, 2015	(3)
Fair Oaks Mall	Fairfax, VA	(2)		10,873		1,491		—			13,643			10,873		15,134		26,007		(589	)	July, 2015	(3)
Glenbrook Square	Ft Wayne, IN	(2)		3,247		5,476		(796	)		(3,382	)		2,451		2,094		4,545		(6	)	July, 2015	(3)
Tech Ridge	Austin, TX	(2)		3,164		2,858		(1,453	)		15,368			1,711		18,226		19,937		(976	)	July, 2015	(3)
Moreno Valley Mall at Towngate	Moreno Vly, CA	(2)		3,898		3,407		—			(751	)		3,898		2,656		6,554		(362	)	July, 2015	(3)
Jordan Landing Shopping Center	West Jordan, UT	(2)		3,190		2,305		—			6,471			3,190		8,776		11,966		(1,645	)	July, 2015	(3)
Plaza Carolina Mall	Carolina, PR	(2)		611		8,640		—			—			611		8,640		9,251		(1,726	)	July, 2015	(3)
Jefferson Valley Mall	Yorktown Hts, NY	(2)		3,584		1,569		—			(529	)		3,584		1,040		4,624		(149	)	July, 2015	(3)

F-43

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Lakeland Square	Lakeland, FL	(2)	$	1,503	$	1,045	$	—		$	(378	)	$	1,503	$	667	$	2,170	$	(91	)	July, 2015	(3)
Westfield Palm Desert	Palm Desert, CA	(2)		5,473		1,705		(542	)		(167	)		4,931		1,538		6,469		(610	)	July, 2015	(3)
Meadowood Mall	Reno, NV	(2)		2,135		5,748		—			1,039			2,135		6,787		8,922		(896	)	July, 2015	(3)
Imperial Valley Mall	El Centro, CA	(2)		3,877		3,977		—			—			3,877		3,977		7,854		(1,205	)	July, 2015	(3)
Bowie Town Center	Bowie, MD	(2)		4,583		2,335		—			1,560			4,583		3,895		8,478		(1,030	)	July, 2015	(3)
Mall at Sierra Vista	Sierra Vista, AZ	(2)		1,252		1,791		—			—			1,252		1,791		3,043		(525	)	July, 2015	(3)
Southgate Mall	Yuma, AZ	(2)		1,485		1,596		—			(401	)		1,485		1,195		2,680		(179	)	July, 2015	(3)
Town Center Mall 81	Santa Maria, CA	(2)		3,967		2,635		—			—			3,967		2,635		6,602		(638	)	July, 2015	(3)
Irving Mall	Irving, TX	(2)		4,493		5,743		—			(722	)		4,493		5,021		9,514		(753	)	July, 2015	(3)
Kentucky Oaks Mall	Paducah, KY	(2)		1,022		2,868		—			9,151			1,022		12,019		13,041		(1,037	)	July, 2015	(3)
Lindale Mall	Cedar Rapids, IA	(2)		2,833		2,197		—			(457	)		2,833		1,740		4,573		(245	)	July, 2015	(3)
Prescott Gateway	Prescott, AZ	(2)		1,071		835		—			(305	)		1,071		530		1,601		(68	)	July, 2015	(3)
Stand-Alone Location	Melbourne, FL	(2)		2,441		1,981		—			(650	)		2,441		1,331		3,772		(200	)	July, 2015	(3)
Merced Mall	Merced, CA	(2)		2,534		1,604		—			(634	)		2,534		970		3,504		(146	)	July, 2015	(3)
Janss Marketplace	Thousand Oaks, CA	(2)		9,853		14,785		—			7,102			9,853		21,887		31,740		(3,722	)	July, 2015	(3)
West Towne Mall	Madison-West, WI	(2)		3,053		2,130		—			14,789			3,053		16,919		19,972		(1,011	)	July, 2015	(3)
The Mall of New Hampshire	Manchester, NH	(2)		1,458		4,160		—			3,557			1,458		7,717		9,175		(1,086	)	July, 2015	(3)
Warrenton Village	Warrenton, VA	(2)		1,956		2,480		—			1,731			1,956		4,211		6,167		(713	)	July, 2015	(3)
Fox Run Mall	Portsmouth, NH	(2)		3,934		3,375		—			(739	)		3,934		2,636		6,570		(383	)	July, 2015	(3)
Panama City Mall	Panama City, FL	(2)		3,227		1,614		—			(461	)		3,227		1,153		4,380		(167	)	July, 2015	(3)
Shopping Center	Peoria, AZ	(2)		1,204		509		—			219			1,204		728		1,932		(44	)	July, 2015	(3)
Stand-Alone Location	Phoenix , AZ	(2)		568		1,088		—			13			568		1,101		1,669		(632	)	July, 2015	(3)
Kmart Shopping Center	Orange Park, FL	(2)		1,477		1,701		—			462			1,477		2,163		3,640		(795	)	July, 2015	(3)
Homewood Square	Homewood, IL	(2)		3,954		4,766		—			36			3,954		4,802		8,756		(1,463	)	July, 2015	(3)
Stand-Alone Location	Lombard, IL	(2)		2,685		8,281		—			—			2,685		8,281		10,966		(1,379	)	July, 2015	(3)
Stand-Alone Location	Ypsilanti, MI	(2)		2,462		1,277		—			(515	)		2,462		762		3,224		(119	)	July, 2015	(3)
Kickapoo Corners	Springfield, MO	(2)		922		2,050		—			47			922		2,097		3,019		(611	)	July, 2015	(3)
Landmark Center	Greensboro, NC	(2)		3,869		4,387		—			423			3,869		4,810		8,679		(887	)	July, 2015	(3)
Stand-Alone Location	Houston, TX	(2)		6,114		1,515		—			(525	)		6,114		990		7,104		(132	)	July, 2015	(3)
King of Prussia	King of Prussia, PA	(2)		-		42,300		—			2,982			-		45,282		45,282		(7,048	)	July, 2015	(3)
Construction in Progress	Various	(2)	-			—		—			338,672			—		338,672		338,672		-		n/a	(3)
			$	663,044	$	693,550	$	3,960		$	757,775		$	667,004	$	1,451,325	$	2,118,329	$	(147,696	)

(1) The aggregate cost of land, building and improvements (which includes construction in process) for U.S. federal income tax purposes is approximately $2.5 billion.

(2) The Term Loan Facility is secured on a first lien basis by individual mortgages and a pledge of the capital stock of the direct subsidiaries of the Company, including those that own each of the Company’s properties.  See Note 6.

(3) 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-44

SERITAGE GROWTH PROPERTIES

NOTES TO SCHEDULE III

(Dollars in thousands)

Reconciliation of Real Estate

	2019			2018			2017
Balance at beginning of period	$	1,889,014		$	1,854,043		$	1,734,892
Additions		364,970			318,820			257,933
Impairments		—			—			—
Dispositions		(95,270	)		(244,815	)		(71,117	)
Write-offs		(40,385	)		(39,034	)		(67,665	)
Balance at end of period	$	2,118,329		$	1,889,014		$	1,854,043

Reconciliation of Accumulated Depreciation

	2019			2018			2017
Balance at beginning of period	$	137,947		$	139,483		$	89,940
Depreciation expense		59,289			50,272			120,709
Dispositions		(9,174	)		(12,772	)		(3,501	)
Write-offs		(40,366	)		(39,036	)		(67,665	)
Balance at end of period	$	147,696		$	137,947		$	139,483

F-45

EX-4.3

Exhibit 4.3

Description of Securities Registered Pursuant to

Section 12 of the Securities Exchange Act of 1934

The following summary is a brief description of the shares of beneficial interest of Seritage Growth Properties, a Maryland real estate investment trust formed under Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.  Unless the context requires otherwise, references to “we,” “us,” “our”, “Seritage Growth” and “our company” refer to Seritage Growth Properties. Capitalized terms used and not defined herein have the meaning ascribed to them in our annual report on Form 10-K to which this Description of Securities is an exhibit.  As of December 31, 2019 and the date hereof, our Class A common shares of beneficial interest, $0.01 par value per share (the “Class A Common Shares”), and our 7.00% Series A cumulative redeemable preferred shares, $0.01 par value per share (the “Series A Preferred Shares”), are the only securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The following description of our shares of beneficial interest does not purport to be complete and is subject to and qualified in its entirety by reference to our declaration of trust, including the Articles Supplementary establishing the Series A Preferred Shares (the “declaration of trust”), and our Amended and Restated Bylaws (the “bylaws”), copies of which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein, and to the applicable provisions of Maryland and U.S. federal law. We encourage you to read our declaration of trust and bylaws, and the applicable provisions of Maryland and U.S. federal law for additional information.

General

Our declaration of trust provides that we may issue (a) up to 100,000,000 Class A Common Shares, (b) up to 5,000,000 Class B common shares of beneficial interest, $0.01 par value per share, referred to as “Seritage Growth non-economic shares,” (c) up to 50,000,000 Class C common shares of beneficial interest, $0.01 par value per share, which we refer to as “Seritage Growth non-voting shares,” and (d) up to 10,000,000 preferred shares of beneficial interest, $0.01 par value per share, of which 3,220,000 are classified as Series A Preferred Shares.  The Class A Common Shares, the Seritage Growth non-economic shares and the Seritage Growth non-voting shares are collectively referred to as the “common shares.” The Seritage Growth declaration of trust authorizes a majority of the entire Seritage Growth Board of Trustees, without shareholder approval, to amend Seritage Growth’s declaration of trust to increase or decrease the aggregate number of shares that we are authorized to issue or the number of authorized shares of any class or series of shares of beneficial interest. Under Maryland law, Seritage Growth shareholders generally are not liable for our debts or obligations solely as a result of their status as shareholders.

Class A Common Shares

Subject to the preferential rights, if any, of holders of any other class or series of Seritage Growth shares of beneficial interest and to the provisions of Seritage Growth’s declaration of trust relating to the restrictions on ownership and transfer of its shares of beneficial interest, holders of Class A Common Shares and Seritage non-voting shares are entitled under our declaration of trust to receive distributions when authorized by our Board of Trustees and declared by Seritage Growth out of assets legally available for distribution to shareholders and will be entitled to share ratably in assets legally available for distribution to shareholders in the event of Seritage Growth’s liquidation, dissolution or winding up after payment of or adequate provision for all of its known debts and liabilities.  Under our declaration of trust, Holders of Seritage Growth non-economic shares are not entitled to any regular or special dividend payments or other distributions, including any dividends or other distributions declared or paid with respect to the Class A Common Shares and Seritage Growth non-voting shares or any other class or series of our shares of beneficial interest, and are not entitled to receive any distributions in the event of our liquidation, dissolution or winding up.  

Subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest and except as may be otherwise specified in the terms of any class or series of Seritage Growth shares of beneficial interest, under our declaration of trust each outstanding Class A Common Share entitles the holder to one vote and each Seritage Growth non-economic share entitles the

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holder to one vote on each matter on which holders of Class A Common Shares are entitled to vote, provided, however, that upon any transfer of a Seritage Growth non-economic share to any person other than an affiliate of the initial holder, such share shall thereafter entitle the holder thereof to one one-hundredth of a vote on each matter on which holders of Class A Common Shares are entitled to vote on all matters submitted to a vote of shareholders, including the election of trustees, and, except as may be provided with respect to any other class or series of Seritage Growth shares of beneficial interest, the holders of Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, will possess the exclusive voting power, provided that the holders of Seritage Growth non-economic shares will have exclusive voting rights with respect to amendments to the Seritage Growth declaration of trust that would materially and adversely affect any right or voting power of the Seritage Growth non-economic shares. The holders of Seritage Growth non-voting shares have no voting rights except with regard to amendments to Seritage Growth’s declaration of trust that would materially and adversely affect any of the rights of the Seritage Growth non-voting shares.  

Holders of Class A Common Shares and Seritage Growth non-economic shares and, except for the conversion rights discussed below, holders of Seritage Growth non-voting shares have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for the sale or issuance of any securities of our company. Subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of its shares of beneficial interest, Class A Common Shares will have equal distribution, liquidation and other rights.

The Seritage Growth declaration of trust provides that (i) in the event the number of issued and outstanding Class A Common Shares is increased or decreased as a result of any share distribution, share split, reverse share split or certain other changes, the number of votes per Seritage Growth non-economic share shall be adjusted to preserve the then existing voting power of the holders of Seritage Growth non-economic shares and (ii) in the event the number of issued and outstanding Class A Common Shares is increased or decreased as a result of any share split, reverse share split or certain other changes, the number of Seritage Growth non-voting shares shall be adjusted to preserve the holders of Seritage Growth non-voting shares then existing economic rights.

ESL Partners, L.P. and Edward S. Lampert (collectively, “ESL”) have agreed with us that upon any sale or other transfer to a non-affiliate of any of its units in Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”), ESL will surrender to us a pro rata portion of the Seritage Growth non-economic shares that it holds prior to the sale or other transfer, whereupon the surrendered Seritage Growth non-economic shares will be cancelled and the aggregate voting power of the non-economic shares held by ESL proportionately reduced.

In addition, our declaration of trust provides that (i) upon any transfer of a Seritage Growth non-economic share to any person other than an affiliate of the holder of such share, such non-economic share will thereafter be entitled to only one one-hundredth of a vote per share and (ii) upon any transfer of a non-voting share to any person other than an affiliate of the holder of such share, such non-voting share shall automatically convert into one Class A Common Share.

Seritage GrowthNon-Economic Shares

Seritage Growth non-economic shares are not entitled to receive distributions when distributions to the Class A Common Shares and Seritage Growth non-voting shares are authorized by the Board of Trustees and declared by us, nor are they entitled to share ratably in assets legally available for distribution to shareholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all of our known debts and liabilities.

Seritage GrowthNon-Voting Shares

Seritage Growth non-voting shares having identical preferences, rights, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as the Class A Common Shares; provided that in the event that our Board of Trustees authorizes and we declare a regular or special dividend payment or other distribution in the form of Class A Common Shares, the holders of Seritage Growth non-voting shares shall be entitled to receive Seritage Growth non-voting shares in lieu of such Class A Common Shares

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and provided further, that the holders of Seritage Growth non-voting shares will have no voting rights except with regard to amendments to our declaration of trust that would materially and adversely affect any of the rights of theSeritage Growth non-voting shares. In addition, eachSeritage Growth non-voting share will automatically convert into one Class A Common Shareupon a transfer to any person other than an affiliate of the holder of such share.

Preferred Shares

Pursuant to our declaration of trust, the Board of Trustees is empowered, without any approval of our shareholders, to issue preferred shares in one or more classes or series, to establish the number of shares in each class or series, and to set the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of each such class or series.

Power to Increase or Decrease Authorized Shares, Reclassify Unissued Shares and Issue Additional Common Shares and Preferred Shares of Beneficial Interest

The Seritage Growth declaration of trust authorizes our Board of Trustees, with the approval of a majority of the entire Board of Trustees and without shareholder approval, to amend Seritage Growth’s declaration of trust to increase or decrease the aggregate number of shares of beneficial interest or the number of shares of any class or series of shares of beneficial interest that Seritage Growth is authorized to issue. In addition, the declaration of trust authorizes the Board of Trustees to authorize the issuance from time to time of shares of beneficial interest of any class or series, including preferred shares.

The Seritage Growth declaration of trust also authorizes the Board of Trustees to classify and reclassify any unissued common shares or preferred shares of beneficial interest into other classes or series of shares of beneficial interest, including one or more classes or series of shares of beneficial interest that have priority over Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares with respect to voting rights, distributions or upon liquidation, and authorize us to issue the newly classified shares. Prior to the issuance of shares of each new class or series of shares of beneficial interest, the Board of Trustees is required by Maryland law and by Seritage Growth’s declaration of trust to set, subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of shares of beneficial interest, the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series. Therefore, the Board of Trustees could authorize the issuance of common shares or preferred shares of beneficial interest with terms and conditions that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for common shares or otherwise be in the best interests of Seritage Growth shareholders.

Series A Preferred Shares

Ranking

With respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of our affairs, the Series A Preferred Shares rank:

•senior to our Class A Common Shares and Seritage Growth non-voting shares and to all other equity securities issued by us ranking junior to such Series A Preferred Shares;

•pari passu with any class or series of our equity securities issued by us, the terms of which specifically provide that such class or series are of equal rank with the Series A Preferred Shares; and

•junior to all our existing and future indebtedness and to all equity securities issued by us, the terms of which specifically provide that such securities rank senior to the Series A Preferred Shares.

Dividends

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Holders of Series A Preferred Shares are entitled to receive, when and as authorized by our Board of Trustees and declared by us, out of assets legally available for the payment of dividends, cumulative cash dividends at the rate of 7.00% per year of the $25.00 liquidation preference per share, equivalent to a fixed annual amount of $1.75 per share. Dividends on the Series A Preferred Shares are payable quarterly in arrears on January 15th, April 15th, July 15th and October 15th of each year, and if such day is not a business day, the next succeeding business day. We refer to each of these dates as a “dividend payment date” in this exhibit, and the period beginning on, and including, each dividend payment date and ending on, but excluding, the next succeeding dividend payment date is referred to as the “dividend period.”

Dividends are payable in arrears to holders of record as they appear in our records at the close of business on the applicable record date, which is the first day of the calendar month in which the applicable dividend payment date falls or on such other date designated by our Board of Trustees for the payment of dividends that is not more than 30 nor less than 10 days prior to such dividend payment date.

No dividends on Series A Preferred Shares may be authorized by our Board of Trustees or declared by us or paid or set apart for payment by us if such declaration or payment is restricted or prohibited by law, or at any time at which one or more of our contractual agreements, including any agreement relating to our outstanding indebtedness:

•prohibits the declaration, payment or setting apart for payment of dividends; or

•provides that the declaration, payment or setting apart for payment of dividends would constitute a breach thereof or a default thereunder.

Notwithstanding the foregoing, dividends on the Series A Preferred Shares will accrue regardless of whether:

•our agreements at any time prohibit the current payment of dividends;

•we have earnings;

•there are funds legally available for the payment of such dividends; or

•such dividends are authorized by our Board of Trustees or declared by us.

Accrued but unpaid dividends on the Series A Preferred Shares accumulate from, and including, the dividend payment date on which they first become payable. Except as set forth in the immediately succeeding paragraph, no dividends will be declared or paid or set apart for payment, and no distribution will be made, on any of our Class A Common Shares or Seritage Growth non-voting shares or any other series of preferred shares ranking, as to dividends, on a parity with or junior to the Series A Preferred Shares, other than a dividend that consists of our Class A Common Shares or Seritage Growth non-voting shares or shares of any other class of shares ranking junior to the Series A Preferred Shares as to dividends and upon liquidation, for any period unless full cumulative dividends on the Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for such payment for all past dividend periods.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) with respect to the Series A Preferred Shares and any other class or series of preferred shares ranking on a parity as to dividends with the Series A Preferred Shares, all dividends declared upon the Series A Preferred Shares and such other class or series of preferred shares ranking on a parity as to dividends with the Series A Preferred Shares will be declared pro rata so that the amount of dividends declared per share of Series A Preferred Shares and such other class or series of preferred shares shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Shares and such other class or series of preferred shares (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such other class or series of preferred shares do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on the Series A Preferred Shares which may be in arrears.

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Except as provided in the immediately preceding paragraph, unless full cumulative dividends on the Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment, for all past dividend periods:

•no dividends (other than in our Class A Common Shares, Seritage Growth non-voting shares or other shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation) shall be declared or paid or set apart for payment;

•no other distribution may be declared or made upon our Class A Common Shares, Seritage Growth non-voting shares or any other shares of beneficial interest ranking junior to or on a parity with the Series A Preferred Shares as to dividends or upon liquidation; and

•none of our Class A Common Shares, Seritage Growth non-voting shares or any other shares of beneficial interest ranking junior to or on a parity with the Series A Preferred Shares as to dividends or upon liquidation may be redeemed, purchased or otherwise acquired by us for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) (except by conversion into or exchange for other of our shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation, and except for our redemption, purchase or acquisition of shares of beneficial interest under incentive, benefit or share purchase plans for officers, trustees or employees or others performing or providing similar services or for the purposes of enforcing restrictions upon ownership and transfer of our shares of beneficial interest contained in our declaration of trust in order to preserve our status as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”)).

Holders of the Series A Preferred Shares are not be entitled to any dividend, whether payable in cash, property or shares of beneficial interest, in excess of full cumulative dividends on the Series A Preferred Shares. Any dividend payment made on the Series A Preferred Shares will first be credited against the earliest accrued but unpaid dividend due with respect to such shares which remains payable.

Liquidation Preference

Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of the Series A Preferred Shares will be entitled to be paid out of our assets legally available for distribution to our shareholders a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the date of payment, before any distribution of assets is made to holders of our Class A Common Shares, Seritage Growth non-voting shares or any other class or series of our shares of beneficial interest that ranks junior to the Series A Preferred Shares as to liquidation rights.

In the event that, upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, our available assets are insufficient to pay in full the amount of the liquidating distributions on all outstanding Series A Preferred Shares and the corresponding amounts payable on all other classes or series of our shares of beneficial interest ranking on a parity with the Series A Preferred Shares in the distribution of assets upon liquidation, then the holders of the Series A Preferred Shares and the holders of all other such classes or series will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Our consolidation, conversion, combination or merger with or into any other corporation, trust or entity or consolidation, conversion or merger of any other corporation, trust or entity with or into us, the sale, lease or conveyance of all or substantially all of our assets, property or business or any statutory share exchange, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.

Optional Redemption

Except with respect to the special optional redemption described below and in certain limited circumstances relating to our maintenance of our ability to qualify as a REIT as described in “—Restrictions on Ownership and Transfer” below, we are not entitled to redeem the Series A Preferred Shares prior to December 14,

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2022.

 On and after December 14, 2022, we may, at our option upon not less than 30 nor more than 60 days’ prior written notice, redeem the Series A Preferred Shares, in whole or in part, at any time or from time to time, for cash by paying $25.00 per share, plus all accrued and unpaid dividends on such shares to, but excluding, the redemption date, without interest (except as provided below), without interest. Holders of Series A Preferred Shares to be redeemed must surrender the certificates evidencing the Series A Preferred Shares (if any) at the place designated in the notice and will be entitled to the redemption price and any accrued and unpaid dividends payable upon the redemption following surrender.

If notice of redemption of any Series A Preferred Shares has been given and if the funds necessary for such redemption have been set apart by us in trust for the benefit of the holders of any Series A Preferred Shares called for redemption, then from and after the redemption date:

•dividends will cease to accrue on the Series A Preferred Shares;

•the Series A Preferred Shares will no longer be deemed outstanding; and

•all rights of the holders of the Series A Preferred Shares will terminate, except the holders’ right to receive the redemption price and all accrued and unpaid dividends through, but excluding, the redemption date.

If less than all of the outstanding Series A Preferred Shares are to be redeemed, the Series A Preferred Shares to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional shares) in compliance with applicable procedures of Depository Trust Company (“DTC”).

Unless full cumulative dividends on all Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment for all dividend periods ending on or prior to the date of any applicable redemption, purchase or acquisition, no Series A Preferred Shares may be redeemed unless all outstanding Series A Preferred Shares are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any Series A Preferred Shares (except by exchange for shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation). This requirement will not prevent us from redeeming, purchasing or otherwise acquiring the Series A Preferred Shares pursuant to our declaration of trust in order to assist us in qualifying as a REIT for federal income tax purposes.

Subject to applicable law and the limitation on purchases when dividends on the Series A Preferred Shares are in arrears, we, at any time and from time to time, may purchase Series A Preferred Shares or any other class or series of our shares of beneficial interest in the open market, by tender or by private agreement.

Notice of redemption will be mailed by us, postage prepaid, not less than 30 nor more than 60 days before the redemption date, addressed to each of the holders of record of the Series A Preferred Shares to be redeemed at their respective addresses as they appear on our share transfer records. If the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC. No failure to give such notice or any defect therein or in the mailing thereof will affect the validity of the proceedings for the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective or not given. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. Each notice will state:

•the redemption date;

•the redemption price;

•the number of Series A Preferred Shares to be redeemed;

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•the place or places where certificates for the Series A Preferred Shares (if any) are to be surrendered for payment of the redemption price; and

•that dividends on the Series A Preferred Shares to be redeemed will cease to accrue on such redemption date, except as otherwise provided in the articles supplementary.

If fewer than all of the Series A Preferred Shares held by any holder are to be redeemed, the notice mailed to the holder will also specify the number of shares to be redeemed.

Holders of the Series A Preferred Shares at the close of business on a dividend record date will be entitled to receive the dividend payable with respect to the Series A Preferred Shares on the corresponding dividend payment date notwithstanding the redemption thereof between the dividend record date and the corresponding dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Shares that are called for redemption.

The Series A Preferred Shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption.

Special Optional Redemption

Upon the occurrence of a Change of Control (as defined below), we may, at our option and upon giving notice, redeem the Series A Preferred Shares, in whole or in part and within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per share, plus all accrued and unpaid dividends to, but excluding, the redemption date. If, prior to the Change of Control Conversion Date (as described below), we have provided or provide notice of redemption with respect to the Series A Preferred Shares (whether pursuant to our optional redemption right or our special optional redemption right), holders of the Series A Preferred Shares will not have the conversion right described below under “—Change of Control Rights,” below.

A “Change of Control” is when, after the original issuance of the Series A Preferred Shares, the following have occurred and are continuing:

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of our company entitling that person to exercise more than 50% of the total voting power of all shares of our company entitled to vote generally in elections of trustees (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

•following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts  representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE American LLC (the “NYSE American”) or the Nasdaq Stock Market (“Nasdaq”), or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or Nasdaq.

We will mail to you, if you are a record holder of the Series A Preferred Shares, a notice of redemption no fewer than 30 days nor more than 60 days before the redemption date. We will send the notice to your address shown on our share transfer books. A failure to give notice of redemption or any defect in the notice or in its mailing will not affect the validity of the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. Each notice will state the following:

•the redemption date;

•the redemption price;

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•the number of Series A Preferred Shares to be redeemed;

•the place or places where the certificates for the Series A Preferred Shares (if any) are to be surrendered for payment of the redemption price;

•that the Series A Preferred Shares are being redeemed pursuant to our special optional redemption right in connection with the occurrence of a Change of Control and a brief description of the transaction or transactions constituting such Change of Control;

•that the holders of the Series A Preferred Shares to which the notice relates will not be permitted to tender such Series A Preferred Shares for conversion in connection with the Change of Control and each Series A Preferred Share tendered for conversion that is selected, prior to the Change of Control Conversion Date, for redemption will be redeemed on the related redemption date instead of converted on the Change of Control Conversion Date; and

•that dividends on the Series A Preferred Shares to be redeemed will cease to accrue on the redemption date, except as otherwise provided in the articles supplementary.

If we redeem fewer than all of the outstanding Series A Preferred Shares, the notice of redemption mailed to each shareholder will also specify the number of Series A Preferred Shares that we will redeem from each shareholder. In this case, we will determine the number of Series A Preferred Shares to be redeemed on a pro rata basis (as nearly as may be practicable without creating fractional shares) in compliance with applicable procedures of DTC.

Unless full cumulative dividends on all Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment for all dividend periods ending on or prior to the date of any applicable redemption, purchase or acquisition, no Series A Preferred Shares may be redeemed unless all outstanding Series A Preferred Shares are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any Series A Preferred Shares (except by exchange for shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation). This requirement will not prevent us from redeeming, purchasing or otherwise acquiring the Series A Preferred Shares pursuant to our declaration of trust in order to assist us in qualifying as a REIT for federal income tax purposes.

If we have given a notice of redemption and have set apart sufficient funds for the redemption in trust for the benefit of the holders of the Series A Preferred Shares called for redemption, then from and after the redemption date, those Series A Preferred Shares will be treated as no longer being outstanding, no further dividends will accrue and all other rights of the holders of those Series A Preferred Shares will terminate. The holders of those Series A Preferred Shares will retain their right to receive the redemption price for their shares and all accrued and unpaid dividends through, but excluding, the redemption date.

Holders of the Series A Preferred Shares at the close of business on a dividend record date will be entitled to receive the dividend payable with respect to the Series A Preferred Shares on the corresponding payment date notwithstanding the redemption of the Series A Preferred Shares between such record date and the corresponding payment date or our default in the payment of the dividend due. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Shares to be redeemed.

Notwithstanding the foregoing, if the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC.

Change of Control Rights

Except as provided below in connection with a Change of Control, the Series A Preferred Shares are not convertible into or exchangeable for any other securities or property.

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Upon the occurrence of a Change of Control, each holder of Series A Preferred Shares will have the right, unless, prior to the Change of Control Conversion Date, we have provided or provide notice of our election to redeem the Series A Preferred Shares as described above under “—Optional Redemption” or “—Special Optional Redemption,” to convert some or all of the Series A Preferred Shares held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of our Class A Common Shares per Series A Preferred Share (the “Common Share Conversion Consideration”) equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date for a Series A Preferred Share dividend payment and prior to the corresponding Series A Preferred Share dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Share Price (such quotient, the “Conversion Rate”); and

•1.26008 (the “Share Cap”).

The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of our Class A Common Shares), subdivisions or combinations (in each case, a “Share Split”) with respect to our Class A Common Shares. The adjusted Share Cap as the result of a Share Split will be the number of our Class A Common Shares that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of our Class A Common Shares outstanding after giving effect to such Share Split and the denominator of which is the number of our Class A Common Shares outstanding immediately prior to such Share Split.

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of our common shares (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable in connection with the exercise of the Change of Control Conversion Right will not exceed 3,528,224 Class A Common Shares (or equivalent Alternative Conversion Consideration, as applicable), subject to increase to the extent the underwriters’ option to purchase additional Series A Preferred Shares is exercised, not to exceed 4,057,457 Class A Common Shares (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap is subject to pro rata adjustments for any Share Splits on the same basis as the corresponding adjustment to the Share Cap and is subject to increase in the event that additional Series A Preferred Shares are issued in the future.

In the case of a Change of Control pursuant to which our Class A Common Shares will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of Series A Preferred Shares will receive upon conversion of such Series A Preferred Shares the kind and amount of Alternative Form Consideration which such holder of Series A Preferred Shares would have owned or been entitled to receive upon the Change of Control had such holder of Series A Preferred Shares held a number of our Class A Common Shares equal to the Common Share Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration,” and the Common Share Conversion Consideration or the Alternative Conversion Consideration, as may be applicable to a Change of Control, is referred to as the “Conversion Consideration”).

If the holders of our Class A Common Shares have the opportunity to elect the form of consideration to be received in the Change of Control, the consideration that the holders of the Series A Preferred Shares will receive will be the form and proportion of the aggregate consideration elected by the holders of our Class A Common Shares who participate in the determination (based on the weighted average of elections) and will be subject to any limitations to which all holders of our Class A Common Shares are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change of Control.

We will not issue fractional Class A Common Shares upon the conversion of the Series A Preferred Shares. Instead, we will pay the cash value of such fractional shares based on the Common Share Price.

Within 15 days following the occurrence of a Change of Control, we will provide to holders of Series A

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Preferred Shares a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right. No failure to give such notice or any defect therein or in the mailing thereof will affect the validity of the proceedings for the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective or not given. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. This notice will state the following:

•the events constituting the Change of Control;

•the date of the Change of Control;

•the Change of Control Conversion Date;

•the method and period for calculating the Common Share Price;

•that if, prior to the Change of Control Conversion Date, we provide notice of our election to redeem all or any portion of the Series A Preferred Shares, holders of the Series A Preferred Shares will not be permitted to convert Series A Preferred Shares and such shares will be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change of Control Conversion Right;

•if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per Series A Preferred Share;

•the name and address of the paying agent and the conversion agent; and

•the procedures that holders of the Series A Preferred Shares must follow to exercise the Change of Control Conversion Right.

We will issue a press release for publication on the Dow Jones & Company, Inc., The Wall Street Journal, Business Wire, PR Newswire, Bloomberg Business News or such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public, or post a notice on our website, in any event prior to the opening of business on the first business day following any date on which we provide the notice described above to holders of the Series A Preferred Shares.

To exercise the Change of Control Conversion Right, the holder of Series A Preferred Shares will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) evidencing the Series A Preferred Shares, to the extent such shares are certificated, to be converted, duly endorsed for transfer, together with a written conversion notice completed, to our transfer agent. The conversion notice must state:

•the relevant Change of Control Conversion Date;

•the number of Series A Preferred Shares to be converted; and

•that the Series A Preferred Shares are to be converted pursuant to the applicable provisions of the Series A Preferred Shares.

The “Change of Control Conversion Date” is the date fixed by our Board of Trustees, in its sole discretion, as the date the Series A Preferred Shares are to be converted, which will be a business day that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to holders of the Series A Preferred Shares.

The “Common Share Price” will be: (i) the amount of cash consideration per Class A Common Share, if the consideration to be received in the Change of Control by the holders of our Class A Common Shares is solely cash; and (ii) the average of the closing prices for our Class A Common Shares on the NYSE for the ten consecutive

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trading days immediately preceding, but excluding, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of our Class A Common Shares is other than solely cash.

Holders of Series A Preferred Shares may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal must state:

•the number of withdrawn Series A Preferred Shares;

•if certificated Series A Preferred Shares have been issued, the certificate numbers of the withdrawn Series A Preferred Shares; and

•the number of Series A Preferred Shares, if any, which remain subject to the conversion notice.

Notwithstanding the foregoing, if the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC.

Series A Preferred Shares as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date we have provided or provide notice of our election to redeem such Series A Preferred Shares, whether pursuant to our optional redemption right or our special optional redemption right. If we elect to redeem Series A Preferred Shares that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such Series A Preferred Shares will not be so converted and the holders of such shares will be entitled to receive on the applicable redemption date $25.00 per share, plus all accrued and unpaid dividends thereon to, but excluding, the redemption date, in accordance with our optional redemption right or special optional redemption right. See “—Optional Redemption” and “—Special Optional Redemption” above.

We will deliver amounts owing upon conversion no later than the third business day following the Change of Control Conversion Date.

In connection with the exercise of any Change of Control Conversion Right, we will comply with all federal and state securities laws and stock exchange rules in connection with any conversion of Series A Preferred Shares into our Class A Common Shares. Notwithstanding any other provision of the Series A Preferred Shares, no holder of Series A Preferred Shares will be entitled to convert such Series A Preferred Shares for our Class A Common Shares to the extent that receipt of such Class A Common Shares would cause such holder (or any other person) to exceed the share ownership limits contained in our declaration of trust and the articles supplementary setting forth the terms of the Series A Preferred Shares, unless we provide an exemption from this limitation for such holder. See “—Restrictions on Ownership and Transfer” below.

These Change of Control conversion and redemption features may make it more difficult for a party to take over control of our company or discourage a party from taking over control of our company.  

Voting Rights

Holders of the Series A Preferred Shares will not have any voting rights, except as set forth below.

If and whenever we fail to pay dividends on any Series A Preferred Shares for six or more quarterly periods, whether or not consecutive, which we refer to in this description as a “preferred dividend default,” the number of trustees then constituting our Board of Trustees will be increased by two, if not already increased by reason of similar provisions with respect to another series of parity preferred, and holders of the Series A Preferred Shares (voting together as a single class with the holders of all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable) will be entitled to vote, if not already elected by the

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holders of parity preferred by reason of similar types of provisions with respect to preferred share trustees, for the election of a total of two members of our Board of Trustees, referred to in this description as “preferred trustees”:

•at a special meeting of the shareholders called by the holders of record of at least 20% of the Series A Preferred Shares or the holders of 20% of any other series of such parity preferred so in arrears (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the shareholders); and

•at each subsequent annual meeting of shareholders until all dividends accrued on Series A Preferred Shares for all dividend periods ending on or prior to the date of any applicable annual meeting shall have been fully paid.

The preferred trustees will be elected by a plurality of the votes cast by the holders of the Series A Preferred Shares and the holders of all other classes or series of parity preferred upon which like voting rights have been conferred and are exercisable (voting together as a single class).

If and when all accrued dividends on the Series A Preferred Shares shall have been declared and paid in full, the holders thereof shall be divested of the foregoing voting rights (subject to revesting in the event of each and every preferred dividend default) and, if all accrued dividends have been paid in full on all series of parity preferred upon which like voting rights have been conferred and are exercisable, each preferred trustee so elected shall cease to be a trustee.

Any preferred trustee may be removed at any time with or without cause by, and shall not be removed otherwise than by the vote of, the holders of record of a majority of the outstanding Series A Preferred Shares (voting together as a single class with all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable). So long as a preferred dividend default shall continue, any vacancy among the preferred trustees may be filled by written consent of the remaining preferred trustee, or if none remains in office, by a vote of the holders of record of a majority of the outstanding Series A Preferred Shares when they have the voting rights described above (voting together as a single class with all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable). The preferred trustees will each be entitled to one vote per trustee on any matter considered by the board.

So long as any Series A Preferred Shares remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the Series A Preferred Shares outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class):

•authorize or create, or increase the number of authorized or issued shares of any class or series of shares of beneficial interest ranking senior to Series A Preferred Shares with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of our affairs or reclassify any authorized shares of our equity securities into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or

•amend, alter or repeal the provisions of our declaration of trust, including the articles supplementary creating the Series A Preferred Shares, whether by merger, consolidation or otherwise (an “event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Shares or the holders thereof,

provided, however, with respect to the occurrence of any event set forth in the second bullet point above, (a) the occurrence of any such event will not be deemed to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Shares or the holders thereof so long as the Series A Preferred Shares remain outstanding with the terms thereof materially unchanged, or (b) if we are not the surviving entity in any merger, consolidation or other event and the successor entity issues to holders of Series A Preferred Shares preferred shares with substantially identical rights, preferences, privileges and voting powers as the Series A Preferred Shares. Any increase in the number of the authorized common shares or preferred shares or the creation or issuance of any other class or series of common shares or preferred shares, ranking on a parity with or junior to Series A Preferred Shares with respect to payment of dividends and the distribution of assets upon liquidation, dissolution or winding

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up of our affairs, or any change to the number or classification of our trustees, will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. In addition, any amendment to Article VII of our declaration of trust, including the ownership limits, will not be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of holders of the Series A Preferred Shares.  

With respect to the exercise of the above described voting rights, each Series A Preferred Share shall have one vote, except that when holders of any other class or series of preferred shares shall have the right to vote with the Series A Preferred Shares as a single class, then holders of the Series A Preferred Shares and such other class or series shall have one vote per $25.00 of stated liquidation preference. The holders of Series A Preferred Shares will have exclusive voting rights on any amendment to our declaration of trust that would alter the contract rights, as expressly set forth in the declaration of trust, of only the Series A Preferred Shares.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required to be effected, all outstanding Series A Preferred Shares have been redeemed or called for redemption upon proper notice and sufficient funds have been deposited in trust to effect such redemption.

Restrictions on Ownership and Transfer

In order for us to qualify to be taxed as a REIT under the Code, Seritage Growth shares of beneficial interest must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to qualify as a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding Seritage Growth shares of beneficial interest (after taking into account options to acquire shares of beneficial interest) may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities such as qualified pension plans) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

In addition, rent from related party tenants (generally, a tenant of a REIT owned, actually or constructively, 10% or more by (1) the REIT or (2) a 10% owner of the REIT) is not qualifying income for purposes of the gross income tests under the Code (the “related party tenant rule”). To qualify to be taxed as a REIT, we must satisfy other requirements as well.

Seritage Growth’s declaration of trust contains restrictions on the ownership and transfer of Seritage Growth shares of beneficial interest that are intended to, among other purposes, assist us in complying with these requirements. The relevant sections of Seritage Growth’s declaration of trust provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than 9.6%, in value or in number of shares, whichever is more restrictive, of all outstanding shares, or all outstanding common shares of beneficial interest of Seritage Growth (the “ownership limits”). We refer to the person or entity that, but for operation of the ownership limits or another restriction on ownership and transfer of Class A Common Shares as described below, would beneficially own or constructively own Class A Common Shares in violation of such limits or restrictions and, if appropriate in the context, a person or entity that would have been the record owner of such Class A Common Shares as a “prohibited owner.”

The constructive ownership rules under the Code are complex and may cause shares of beneficial interest owned beneficially or constructively by a group of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition of less than 9.6% of the outstanding shares of beneficial interest of Seritage Growth (or the acquisition by an individual or entity of an interest in an entity that owns, beneficially or constructively, such shares), could, nevertheless, cause that individual or entity, or another individual or entity, to own beneficially or constructively shares of beneficial interest of Seritage Growth in excess of the ownership limits. In addition, a person that did not acquire more than 9.6% of the outstanding shares of beneficial interest of Seritage Growth may become subject to these restrictions if repurchases by us cause such person’s holdings to exceed 9.6%, in value or in number of shares, whichever is more restrictive, of all outstanding shares, or all outstanding common shares (including Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares), of beneficial interest of Seritage Growth.

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Pursuant to our declaration of trust, the Board of Trustees, in its sole and absolute discretion, may exempt, prospectively or retroactively, a particular shareholder from either or both of the ownership limits or establish a different limit on ownership (the “excepted holder limit”) if the Board of Trustees determines that:

•no individual’s beneficial or constructive ownership of Seritage Growth shares of beneficial interest will result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify to be taxed as a REIT;

•no person shall constructively own Seritage Growth shares of beneficial interest to the extent that such person’s constructive ownership will cause any of Seritage Growth’s income that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such; and

•such shareholder does not and represents that it will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity owned or controlled by us, including the Operating Partnership) that would cause us to own, actually or constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (or the Board of Trustees in its sole and absolute discretion, determines that revenue derived from such tenant will not affect our ability to qualify to be taxed as a REIT).

Any violation or attempted violation of the representations or undertakings discussed above will result in such shareholder’s shares being automatically transferred to a charitable trust. As a condition of granting the waiver or establishing the excepted holder limit, our Board of Trustees may require an opinion of counsel or a ruling from the Internal Revenue Service, in either case in form and substance satisfactory to the Board of Trustees, in its sole discretion, in order to determine or ensure Seritage Growth’s status as a REIT and such representations and undertakings from the person requesting the exception as the Board of Trustees may require in its sole discretion to make the determinations above. The Board of Trustees may impose such conditions or restrictions as it deems appropriate in connection with granting such a waiver or establishing an excepted holder limit.

At any time, the Board of Trustees may from time to time increase or decrease the ownership limits for all other persons, unless, after giving effect to such increase, five or fewer individuals could beneficially own, in the aggregate, more than 49.9% in value of our outstanding shares of beneficial interest or we would otherwise fail to qualify as a REIT. A reduced ownership limit will not apply to any person or entity whose percentage ownership of common shares (including Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares) of beneficial interest, or all shares of beneficial interest, as applicable, of Seritage Growth is, at the effective time of such reduction, in excess of such decreased ownership limit until such time as such person’s or entity’s percentage ownership, equals or falls below the decreased ownership limit, but any further acquisition of shares of beneficial interest of Seritage Growth will violate the decreased ownership limit.

Seritage Growth’s declaration of trust further prohibits:

•any person from beneficially or constructively owning, applying certain attribution rules of the Code, our shares of beneficial interest that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to qualify to be taxed as a REIT;

•any person from transferring our shares of beneficial interest if the transfer would result in our shares of beneficial interest being beneficially owned by fewer than 100 persons (determined with reference to the rules of attribution under Section 544 of the Code);

•any person from constructively owning our shares of beneficial interest to the extent that such constructive ownership would cause any of our income that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such; and

•any person from beneficially owning or constructively owning our shares of beneficial interest to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code.

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Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of our shares of beneficial interest that will or may violate either or both of the ownership limits or any of the other restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above, or who would have owned our shares of beneficial interest transferred to the charitable trust as described below, must immediately give notice to Seritage Growth of such event or, in the case of an attempted or proposed transaction, give Seritage Growth at least 15 days’ prior written notice and provide Seritage Growth with such other information as it may request in order to determine the effect of such transfer on Seritage Growth’s status as a REIT.

The foregoing restrictions on ownership and transfer of Seritage Growth shares of beneficial interest will not apply if the Board of Trustees determines that it is no longer in Seritage Growth’s best interests to attempt to qualify, or to continue to qualify, to be taxed as a REIT or that compliance with the restrictions and limits on ownership and transfer of Seritage Growth shares of beneficial interest described above is no longer required in order for us to qualify to be taxed as a REIT.

If any purported transfer of our shares of beneficial interest or any other event would otherwise result in any person violating the ownership limits or any other restriction on ownership and transfer of our shares of beneficial interest described above, then that number of shares (rounded up to the nearest whole share) that would cause the violation will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us, and the intended transferee or other prohibited owner will acquire no rights in the shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or any other restriction on ownership and transfer of our shares of beneficial interest described above, then Seritage Growth’s declaration of trust provides that the transfer of the shares will be null and void and the intended transferee will acquire no rights in such shares.

Our shares of beneficial interest held in the trust will be issued and outstanding shares. The prohibited owner will not be permitted to benefit economically from ownership of any our shares of beneficial interest held in the trust and will not be permitted to have any rights to distributions or any rights to vote or other rights attributable to our shares of beneficial interest held in the trust. The trustee of the trust will exercise all voting rights and receive all distributions with respect to shares held in the trust for the exclusive benefit of the charitable beneficiary of the trust. Any distribution made before we discover that the shares have been transferred to a trust as described above must be repaid by the recipient to the trustee upon demand by us. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority to rescind as void any vote cast by a prohibited owner before our discovery that the shares have been transferred to the trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary of the trust. However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.

Our shares of beneficial interest transferred to the trustee will be deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, in the case of a devise or gift, the market price at the time of the devise or gift), or (ii) the market price on the date we, or our designee, accepts such offer. We may reduce the amount so payable to the prohibited owner by the amount of any distribution that we made to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed by the prohibited owner to the trustee as described above, and we may pay the amount of any such reduction to the trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold our shares of beneficial interest held in the trust as discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, and the trustee must distribute the net proceeds of the sale to the prohibited owner and must distribute any distributions held by the trustee with respect to such shares to the charitable beneficiary.

If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee that could own the shares without violating either of the ownership limits or the other restrictions on ownership and transfer of Seritage Growth shares of beneficial interest. After the sale of the shares, the interest of the charitable beneficiary in the shares sold will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, if the prohibited owner did not give value for the shares in connection with

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the event causing the shares to be held in the trust (for example, in the case of a gift, devise or other such transaction), the market price of the shares on the day of the event causing the shares to be held in the trust) and (ii) the sales proceeds (net of any commissions and other expenses of sale) received by the trust for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any distribution that we paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed by the prohibited owner to the trustee as described above. Any net sales proceeds in excess of the amount payable to the prohibited owner must be paid immediately to the charitable beneficiary, together with any distributions thereon. In addition, if, prior to the discovery by us that shares of beneficial interest have been transferred to a trust, such shares are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount will be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee.

In addition, if the Seritage Growth Board of Trustees determines that a transfer or other event has occurred that would violate the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above or that a person or entity intends to acquire or has attempted to acquire beneficial or constructive ownership of any of our shares of beneficial interest in violation of the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above, the Board of Trustees shall take such action as it deems advisable to refuse to give effect to or to prevent such transfer or other event, including, but not limited to, causing us to redeem our shares of beneficial interest, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer or other event.

Every person or entity who will be a beneficial or constructive owner of more than 5% (or such lower percentage as required by the Code or the regulations promulgated thereunder) in number or value of Seritage Growth shares of beneficial interest, whichever is more restrictive, within 30 days after the end of each taxable year, and within 30 days of initially reaching such threshold must give Seritage Growth written notice stating the person’s or entity’s name and address, the number of shares of each class and series of Seritage Growth shares of beneficial interest that the shareholder beneficially or constructively owns and a description of the manner in which the shares are held. Each such owner must provide to Seritage Growth in writing such additional information as we may request in order to determine the effect, if any, of the shareholder’s beneficial ownership on Seritage Growth’s status as a REIT and to ensure compliance with the applicable ownership limits. In addition, any person or entity that is a beneficial owner or constructive owner of our shares of beneficial interest and any person or entity (including the shareholder of record) that is holding our shares of beneficial interest for a beneficial owner or constructive owner must provide to us such information as we may request in order to determine Seritage Growth’s status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance and to ensure compliance with the ownership limits.

Any certificates evidencing our shares of beneficial interest will bear a legend referring to the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above and elsewhere in this prospectus.

These restrictions on ownership and transfer of Seritage Growth shares of beneficial will not apply if the Seritage Growth Board of Trustees determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance is no longer required in order for us to qualify as a REIT.

Provisions of Maryland Law and of Seritage Growth’s Declaration of Trust and Bylaws

The Seritage Growth Board of Trustees

The Board of Trustees of Seritage Growth consists of seven trustees. In accordance with the terms of Seritage Growth’s declaration of trust, the Board of Trustees is divided into three classes of as nearly equal size as possible, with the trustees of each class serving until the third annual meeting of shareholders after their election and until their successors are duly elected and qualify. At each annual meeting of shareholders, upon the expiration of the term of a class of trustees, the successor to each such trustee in the class will be elected to serve from the time of election and qualification until the third annual meeting following his or her election and until his or her successor is

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duly elected and qualifies.

Seritage Growth’s declaration of trust and bylaws provide that the number of our trustees may be established, increased or decreased only by a majority of the entire Board of Trustees but, unless our bylaws are amended, may not be more than 15.

Election of Trustees; Removals; Vacancies

Seritage Growth’s bylaws provide that trustees will be elected by a vote of at least two-thirds of the votes of the Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, cast in both contested and uncontested elections. In the event that an incumbent trustee does not receive a sufficient percentage of votes entitled to be cast for election, he or she will continue to serve on the Board of Trustees until a successor is duly elected and qualifies.  

Seritage Growth’s declaration of trust provides that, subject to the rights, if any, of holders of any class or series of preferred shares of beneficial interest to elect or remove one or more trustees, our trustees may be removed only for cause, as such term is defined in our declaration of trust, and only by the affirmative vote of not less than 75% of the votes of Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, entitled to be cast generally in the election of trustees.

We have elected by a provision of Seritage Growth’s declaration of trust to be subject to provisions of Maryland law requiring that, except as otherwise provided in the terms of any class or series of Seritage Growth shares of beneficial interest, vacancies on the Board of Trustees may be filled only by a majority of the remaining trustees, even if the remaining trustees do not constitute a quorum, and that any individual elected to fill a vacancy will serve for the remainder of the full term of the trusteeship in which the vacancy occurred and until his or her successor is duly elected and qualifies.

Business Combinations

Under certain provisions of the Maryland General Corporation Law (“MGCL”) that are applicable to Maryland REITs, certain “business combinations” (including a merger, consolidation, statutory share exchange and, in certain circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) 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 Maryland REIT’s outstanding voting shares of beneficial interest or an affiliate or associate of the Maryland REIT who, at any time during 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 beneficial interest of the Maryland REIT) or an affiliate of such an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. Thereafter, any such business combination must generally be recommended by the board of trustees of the Maryland REIT and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by the holders of outstanding voting shares of beneficial interest of the REIT, voting together as a single class, and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of beneficial interest of the Maryland REIT, other than shares held by the interested shareholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested shareholder, unless, among other conditions, the Maryland REIT’s common shareholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares. A person is not an interested shareholder under the statute if the board of trustees exempted or approved in advance the transaction by which the person otherwise would have become an interested shareholder. A Maryland REIT’s board of trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of trustees.

Pursuant to the statute, the Seritage Growth Board of Trustees has by resolution exempted business combinations (a) between us and (i) Sears Holdings or its affiliates or (ii) ESL or Fairholme Capital Management L.L.C. (“FCM”) and/or certain clients of FCM (the “Fairholme Clients”) or their respective affiliates and (b) between us and any other person, provided that in the latter case the business combination is first approved by the Seritage Growth Board of Trustees (including a majority of our trustees who are not affiliates or associates of such

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person). Consequently, the five-year prohibition and the supermajority vote requirements will not apply to a business combination between us and Sears Holdings, ESL or FCM and/or Fairholme Clients or their respective affiliates or to a business combination between us and any other person, in the latter case, if the Board of Trustees has first approved the combination. As a result, any person described in the preceding sentence may be able to enter into business combinations with us that may not be in the best interests of Seritage Growth shareholders, without compliance with the supermajority vote requirements and other provisions of the statute. We cannot assure you that the Seritage Growth Board of Trustees will not amend or repeal this resolution in the future.

Control Share Acquisitions

The MGCL provides with regards to Maryland REITs that holders of “control shares” of a Maryland REIT acquired in a “control share acquisition” have no voting rights with respect to such shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the Maryland REIT or an employee of the Maryland REIT who is also a trustee of the Maryland REIT are excluded from shares entitled to vote on the matter.

“Control shares” are voting shares of beneficial interest that, if aggregated with all other such shares owned by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing trustees within one of the following ranges of voting power:

•one-tenth or more but less than one-third;

•one-third or more but less than a majority; or

•a majority or more of all voting power.

Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval or shares acquired directly from the Maryland REIT. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person statement” as described in the MGCL), may compel the board of trustees to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the Maryland REIT may itself present the question at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to certain conditions and limitations, the Maryland REIT may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or, if a meeting of shareholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The control share acquisition statute does not apply to shares acquired in a merger, consolidation or statutory share exchange if the Maryland REIT is a party to the transaction or acquisitions approved or exempted by the declaration of trust or bylaws of the Maryland REIT.

Seritage Growth’s bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of beneficial interest. This provision may be amended or eliminated at any time in the future by the Seritage Growth Board of Trustees.

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Subtitle 8

Subtitle 8 of Title 3 of the MGCL (“Subtitle 8”) permits a Maryland REIT with a class of equity securities registered under the Exchange Act and at least three independent trustees to elect to be subject, by provision in its declaration of trust or bylaws or a resolution of its board of trustees and notwithstanding any contrary provision in the declaration of trust or bylaws, to any or all of five provisions of the MGCL that provide, respectively, for:

•a classified board of trustees;

•a two-thirds vote requirement for removing a trustee;

•a requirement that the number of trustees be fixed only by vote of the board of trustees;

•a requirement that a vacancy on the board of trustees be filled only by the remaining trustees in office for the remainder of the full term of the class of trustees in which the vacancy occurred; and

•a majority requirement for the calling of a shareholder-requested special meeting of shareholders.

We have elected by a provision in our declaration of trust to be subject to the provisions of Subtitle 8 relating to the filling of vacancies on our Board of Trustees. Through provisions in the declaration of trust and bylaws unrelated to Subtitle 8, we (i) have a classified board of trustees, (ii) vest in the Board of Trustees the exclusive power to fix the number of trusteeships and (iii) provide that only our chairman, our chief executive officer, president or our Board of Trustees, may call a special meeting. Under the declaration of trust, trustees may be removed only for cause by the affirmative vote of not less than 75% of the votes of the Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, entitled to be cast generally in the election of trustees.

Special Meetings of Shareholders

Pursuant to Seritage Growth’s bylaws, the chairman, the chief executive officer, the president or the Board of Trustees may call a special meeting of Seritage Growth shareholders. Under the provisions of Seritage Growth’s bylaws, a special meeting of Seritage Growth shareholders may not be called by shareholders.  

Shareholder Actions by Unanimous Consent

Under the Seritage Growth declaration of trust and bylaws, shareholder action may be taken only at an annual or special meeting of shareholders or by unanimous consent in lieu of a meeting.

Approval of Extraordinary REIT Action; Amendment of Declaration of Trust and Bylaws

Under Maryland law, a Maryland REIT generally may not amend its declaration of trust, merge, or convert unless advised by its board of trustees and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter, unless the REIT provides in its declaration of trust for approval of these matters by a lesser percentage, but not less than a majority, of all of the votes entitled to be cast on the matter. The Seritage Growth declaration of trust does not provide for a lesser percentage.  Our declaration of trust also provides that we may only sell or transfer all or substantially all of our assets or terminate if approved by our Board of Trustees and by the affirmative vote of shareholders entitled to cast two-thirds of all the votes entitled to be cast on the matter.

Seritage Growth’s declaration of trust and bylaws provide that the Board of Trustees will have the exclusive power to make, alter, amend or repeal any provision of Seritage Growth’s bylaws.

Advance Notice of Trustee Nominations and New Business

Seritage Growth’s bylaws provide that nominations of individuals for election as trustees and proposals of

19

business to be considered by shareholders at any annual meeting may be made only (1) pursuant to notice of the meeting, (2) by or at the direction of the Board of Trustees or (3) by any shareholder who was a shareholder of record at the time of giving the notice required by Seritage Growth’s bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each of the individuals so nominated or on such other proposed business and who has complied with the advance notice procedures of Seritage Growth’s bylaws. Shareholders generally must provide notice to our secretary not earlier than the 150th day or later than the close of business on the 120th day before the first anniversary of the date of our proxy statement for the preceding year’s annual meeting.

Only the business specified in the notice of the meeting may be brought before a special meeting of Seritage Growth shareholders. Nominations of individuals for election as trustees at a special meeting of shareholders may be made only (1) by or at the direction of the Board of Trustees or (2) if the special meeting has been called in accordance with Seritage Growth’s bylaws for the purpose of electing trustees, by a shareholder who is a shareholder of record both at the time of giving the notice required by Seritage Growth’s bylaws and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice procedures of Seritage Growth’s bylaws. Shareholders generally must provide notice to Seritage Growth’s secretary not earlier than the 120th day before such special meeting or later than the later of the close of business on the 90th day before the special meeting or the tenth day after the first public announcement of the date of the special meeting and the nominees of Seritage Growth’s Board of Trustees to be elected at the meeting.  

A shareholder’s notice must contain certain information specified by Seritage Growth’s bylaws about the shareholder, its affiliates and any proposed business or nominee for election as a trustee, including information about the economic interest of the shareholder, its affiliates and any proposed nominee in Seritage Growth.

Forum Selection Clause

Seritage Growth’s bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of any duty owed by any of our trustees, officers or other employees to us or to our shareholders, (c) any action asserting a claim against us or any of our trustees, officers or other employees arising pursuant to any provision of the MGCL, the Maryland REIT Law (the “MRL”) or Seritage Growth’s declaration of trust or bylaws or (d) any action asserting a claim against us or any of our trustees, officers or other employees that is governed by the internal affairs doctrine.  

REIT Qualification

The Seritage Growth declaration of trust provides that the Board of Trustees may authorize us to revoke or otherwise terminate its REIT election, without approval of Seritage Growth shareholders, if it determines that it is no longer in Seritage Growth’s best interests to attempt to qualify, or to continue to qualify, as a REIT.

Limitation of Trustees’ and Officers’ Liability and Indemnification

Maryland law permits a Maryland REIT to include in its declaration of trust a provision eliminating the liability of its trustees and officers to the REIT and its shareholders for money damages, except for liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or (ii) active and deliberate dishonesty that is established by a final judgment and that is material to the cause of action. Seritage Growth’s declaration of trust contains a provision that eliminates the liability of our trustees and officers to the maximum extent permitted by Maryland law.

The MRL permits a Maryland REIT to indemnify and advance expenses to its trustees, officers, employees and agents to the same extent as permitted by the MGCL for directors, officers, employees and agents of a Maryland corporation. The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our declaration of trust does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her

20

service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

•the act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty;

•the director or officer actually received an improper personal benefit in money, property or services; or

•in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

Under the MGCL, a Maryland corporation may not indemnify a director or officer in a suit by the corporation or in its right in which the director or officer was adjudged liable to the corporation or in a suit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct for indemnification or was adjudged liable on the basis that a personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by us or in our right, or for a judgment of liability on the basis that a personal benefit was improperly received, is limited to expenses.

In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon receipt of:

•a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

•a written undertaking by or on behalf of the director or officer to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did not meet the standard of conduct.

Seritage Growth’s declaration of trust authorizes it to obligate itself, and Seritage Growth’s bylaws obligate it, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

•any present or former trustee or officer who is made or threatened to be made a party to, or witness in, a proceeding by reason of his or her service in that capacity; or

•any individual who, while a trustee or officer of our company and at our request, serves or has served as a trustee, director, officer, partner, member or manager of another real estate investment trust, corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or any other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity.

Seritage Growth’s declaration of trust and bylaws also permit it to indemnify and advance expenses to any person who served a predecessor of Seritage Growth in any of the capacities described above and to any employee or agent of Seritage Growth or a predecessor of Seritage Growth.

Stock Exchange Listing

The Class A Common Shares are listed on the NYSE under the symbol “SRG”. The Series A Preferred Shares are listed on the NYSE under the symbol “SRG-PA.”

21

Transfer Agent and Registrar

The transfer agent and registrar for the common shares of beneficial interest and the preferred shares of Seritage Growth is Computershare Trust Company, N.A.

22

EX-10.33

Exhibit 10.33

FIRST AMENDMENT TO MASTER LEASE

THIS FIRST AMENDMENT TO MASTER LEASE (this "Amendment") is made and entered into by and among Seritage SRC Finance LLC and Seritage KMT Finance LLC (together with their successors and assigns, collectively, jointly and severally, "Landlord"), and Transform KM Operations LLC and Transform SR Operations LLC (together with their permitted successors and assigns, collectively, jointly and severally, "Tenant"), to be effective on October 29, 2019 (the "Effective Date").

RECITALS

Landlord and Tenant entered into that certain Master Lease dated as of February 28, 2019 (the "Master Lease").

Landlord and Tenant desire to amend the Master Lease as more fully set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the Master Lease is hereby amended, and Landlord and Tenant further agree as follows:

1. Definitions. All capitalized terms used herein shall have the same meaning as defined in the Master Lease, unless otherwise defined in this Amendment.

2. Recitals. The Recitals set forth above are true and correct and are incorporated herein by reference as if fully set forth herein.

3. Lease Year. The definition of "Lease Year" in the Master Lease is hereby deleted and replaced by the following: "The first (1st) Lease Year shall be the period commencing on the Commencement Date and ending on February 29, 2020, and each subsequent Lease Year shall be each period of twelve (12) full calendar months after the last day of the prior Lease Year (i.e., the second Lease Year shall commence on March 1, 2020, and end on February 28, 2021), except that (a) unless the first Renewal Term is exercised, the final Lease Year of the Initial Term shall end on July 31, 2025, and (b) unless each subsequent Renewal Term is exercised, the final Lease Year of any Renewal Term shall end on July 31st of the applicable year."

4. New Leases.

(a)In connection with a New Lease under Section 1.12 of the Master Lease, Landlord and Tenant agree that if Tenant elects for the provisions under the Master Lease regarding Designated Termination Properties to apply to such New Lease, then the Designated Termination Properties Limit under the Master Lease shall be reduced by the number of Removal Properties subject to such provisions in the New Lease only if and when such Designated Termination Property provisions are exercised by Tenant under such New Lease and the Termination Property Termination Date occurs with respect to such Removal Properties under the New Lease. (For illustrative purposes only, if a New Lease is executed in the second Lease Year, Tenant elects for the provisions under the Master Lease regarding Designated Termination Properties to apply to  such New Lease, and the Termination Property Termination Date occurs under such New Lease in the third Lease Year (because Tenant has terminated such New Lease), then the Designated Termination Properties Limit under the Master Lease is reduced by one for the third Lease Year under the Master Lease).

(b)Tenant shall notify Landlord of the exercise of the Designated Termination Property provisions under a New Lease and of the occurrence of the Termination Property Termination Date with respect to such New Lease.

5.Authority. Landlord and Tenant represent and warrant to each other that the person(s) executing this Amendment on behalf of Landlord or Tenant, as the case may be, have been duly authorized by all requisite corporate or other action of Landlord or Tenant, as the case may be. Landlord and Tenant agree to furnish to the other from time to time upon request such written proof of such authorization as the other may reasonably request.

6.Landlord's Liability. The liability of Landlord to Tenant under this Amendment will be limited as provided in Section 21.3 of the Master Lease, which Section is incorporated herein by reference as though fully set forth herein.

7.Conflict in Terms. To the extent a conflict exists between the terms of the Master Lease and the terms of this Amendment, the terms of this Amendment shall control.

8.Reaffirmation. Except as otherwise provided in this Amendment, the Master Lease shall remain unmodified and in full force and effect, and it is hereby reaffirmed by Landlord and Tenant.

9.Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall constitute one instrument. Copies of this Amendment, including copies delivered by facsimile, pdf or other electronic means, bearing the signatures of Landlord and Tenant shall be as binding as originals.

10.Master Lease Remains a Single, Unitary Lease.The Master Lease shall remain and constitute one single, unitary, indivisible lease of the Demised Premises under the Master Lease, and not separable or severable leases governed by similar terms, and such Demised Premises shall constitute on indivisible economic unit, all as provided in Section 1 of the Master Lease.

11.Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns.

12. Brokers. Tenant represents and warrants that Tenant has dealt not with any broker in connection with this Amendment, and agrees to indemnify and hold Landlord harmless from all loss, damages, liabilities, claims, costs and expenses (including reasonable attorneys' fees) arising from any claims or demands of any broker or brokers or finders with whom Tenant dealt for any commission alleged to be due such broker, brokers or finders.

[SIGNATURE PAGE FOLLOWS]

[AM_ACTIVE 401699880_3]

IN WITNESS WHEREOF, this Amendment has been executed and delivered by the parties hereto effective as of the Effective Date.

LANDLORD:

SERITAGE SRC FINANCE LLC,

a Delaware limited liability company

/s/ Matthew Fernand

Matthew Fernand

Vice President

SERITAGE KMT FINANCE LLC,

a Delaware limited liability company

/s/ Matthew Fernand

Matthew Fernand

Vice President

TENANT:

TRANSFORM SR OPERATIONS LLC,

a Delaware limited liability company

/s/ Jane S. Borden

Jane S. Borden

Authorized Representative

TRANSFORM KM OPERATIONS LLC,

a Delaware limited liability company

/s/ Jane S. Borden

Jane S. Borden

Authorized Representative

First Amendment to Master Lease

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
Seritage GS Holdings (2017) LLC	Delaware
SRG Mark 302 Member LLC	Delaware
Mark 302 JV LLC	Delaware
Mark 302 Property Owner LLC	Delaware
SRG UTC Member LLC	Delaware
SI UTC LLC	Delaware
SI UTC Property Owner LLC	Delaware
SRC WH Member LLC	Delaware
SF WH Joint Venture LLC	Delaware
SF WH Property Owner LLC	Delaware
SRC NJ Holdings LLC	Delaware
Seritage JV Holdco LLC	Delaware
SRG Landmark Member LLC	Delaware
SRG Cockeysville Member LLC	Delaware
SPS Portfolio Holdings II LLC	Delaware
SRG Tech Ridge Member LLC	Delaware
Tech Ridge JV Holdings LLC	Delaware
Tech Ridge JV Developer 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 and Registration Statement No. 333-221934 on Forms S-8 and S-3 of our reports dated March 2, 2020, relating to the consolidated financial statements and financial statement schedules 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, 2019.

/s/ DELOITTE & TOUCHE LLP

New York, New York

March 2, 2020

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 2, 2020
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 2, 2020
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, 2019 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 2, 2020

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, 2019 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 2, 2020

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.

XML

Non-controlling Interests - Additional Information (Detail) - Operating Partnership [Member]	Dec. 31, 2019
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	66.10%
ESL [Member]
Noncontrolling Interest [Line Items]
Ownership interest percentage held by related party	33.90%

XML

Shareholders' Equity - Summary of Preferred Stock Dividends and Distributions (Detail) - $ / shares								1 Months Ended			12 Months Ended
	Oct. 23, 2019	Jul. 23, 2019	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018	Apr. 30, 2019	Dec. 31, 2017	[1]	Dec. 31, 2019	Dec. 31, 2018
Dividends Payable [Line Items]
Preferred Share											$ 1.75	$ 1.75
Series A Preferred Shares [Member]
Dividends Payable [Line Items]
Declaration Date	Oct. 31, 2023	Jul. 31, 2023	Feb. 28, 2025	Oct. 31, 2023	Jul. 31, 2024	Apr. 30, 2024	Feb. 29, 2020	Apr. 30, 2030	Feb. 29, 2020
Record Date	Dec. 31, 2031	Sep. 30, 2030	Mar. 31, 2029	Dec. 31, 2031	Sep. 30, 2028	Jun. 30, 2029	Mar. 31, 2030	Jun. 30, 2028	Mar. 31, 2030
Payment Date	Jan. 15, 2020	Oct. 31, 2015	Apr. 30, 2015	Jan. 14, 2019	Oct. 31, 2015	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2016
Preferred Share	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.43750	$ 0.15556

[1] This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

XML

Share Based Compensation - Summary of Restricted Share (Detail) - Restricted Share [Member] - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares at beginning of period	403,129	245,570
Restricted shares granted	76,948	261,059
Restricted shares vested	(127,767)	(99,956)
Restricted shares forfeited	(2,992)	(3,544)
Unvested restricted shares at end of period	349,318	403,129
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period	$ 41.57	$ 41.33
Weighted-Average Grant Date Fair Value, Restricted shares granted	57.04	40.80
Weighted-Average Grant Date Fair Value, Restricted shares vested	41.76	39.04
Weighted-Average Grant Date Fair Value, Restricted shares forfeited	45.02	38.83
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period	$ 44.88	$ 41.57

XML

Investments in Unconsolidated Joint Ventures - Additional Information (Detail)			12 Months Ended
	Nov. 03, 2017 USD ($) Property	Jul. 12, 2017 USD ($) Property	Dec. 31, 2019 USD ($) Property	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Schedule Of Equity Method Investments [Line Items]
Net proceeds from disposition of interest in unconsolidated joint ventures		$ 247,600,000			$ 257,373,000
Number of properties | Property			28
Gain on sale of interest in unconsolidated joint venture			$ 6,721,000		60,302,000
Gain on sale of real estate			71,104,000	$ 96,165,000	11,447,000
Joint venture impairment charges			0	0	$ 0
West Hartford JV [Member]
Schedule Of Equity Method Investments [Line Items]
Income earned from servicing activities			$ 1,600,000	$ 1,200,000
General Growth Properties, Inc. I [Member]
Schedule Of Equity Method Investments [Line Items]
Net proceeds from disposition of interest in unconsolidated joint ventures		$ 190,100,000
Percentage of interests sold		50.00%
Number of joint venture properties sold | Property		8
Number of properties | Property		12
Gain on sale of interest in unconsolidated joint venture		$ 43,700,000
General Growth Properties, Inc. II [Member]
Schedule Of Equity Method Investments [Line Items]
Number of wholly owned properties contributed | Property		5
New JV Properties [Member]
Schedule Of Equity Method Investments [Line Items]
Net proceeds from disposition of interest in unconsolidated joint ventures		$ 57,500,000
Percentage of interests sold		50.00%
Gain on sale of real estate		$ 11,500,000
Simon Property Group Inc [Member]
Schedule Of Equity Method Investments [Line Items]
Net proceeds from disposition of interest in unconsolidated joint ventures	$ 68,000,000.0
Percentage of interests sold	50.00%
Number of joint venture properties sold | Property	5
Number of properties | Property	10		5
Gain on sale of interest in unconsolidated joint venture	$ 16,600,000

XML

Lease Intangible Assets and Liabilities - Schedule of Future Estimated Amortization of Acquired In-Place Leases (Detail) - In-Place Leases, Net [Member] $ in Thousands	Dec. 31, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
2020	$ 14,396
2021	13,226
2022	12,918
2023	12,118
2024	$ 11,574

XML

Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2019

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, 2019

(Dollars in thousands)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Broadway Center	Merrillville, IN	(2)	$	3,413	$	3,224	$	—		$	612		$	3,413	$	3,836	$	7,249	$	(1,585	)	July, 2015	(3)
Stand-Alone Location	Tulsa, OK	(2)		2,048		5,386		—			2,767			2,048		8,153		10,201		(1,688	)	July, 2015	(3)
Sherwood Plaza	Springfield, IL	(2)		2,182		5,051		(213	)		14,796			1,969		19,847		21,816		(1,600	)	July, 2015	(3)
Kmart Plaza	North Canton, OH	(2)		1,044		1,126		—			1			1,044		1,127		2,171		(549	)	July, 2015	(3)
North Pointe Plaza	Elkhart, IN	(2)		1,349		869		—			36			1,349		905		2,254		(386	)	July, 2015	(3)
Kedzie Square	Chicago, IL	(2)		2,385		7,924		—			17			2,385		7,941		10,326		(1,585	)	July, 2015	(3)
Ramona Station	Ramona, CA	(2)		7,239		1,452		—			(318	)		7,239		1,134		8,373		(156	)	July, 2015	(3)
Stand-Alone Location	Kearney, NE	(2)		272		483		—			7,838			272		8,321		8,593		(546	)	July, 2015	(3)
Braintree Marketplace	Braintree, MA	(2)		6,585		5,614		—			11,308			6,585		16,922		23,507		(2,329	)	July, 2015	(3)
Western Plaza	Mayaguez, PR	(2)		564		4,555		—			—			564		4,555		5,119		(1,149	)	July, 2015	(3)
Stand-Alone Location	Delano, CA	(2)		1,905		2,208		—			—			1,905		2,208		4,113		(592	)	July, 2015	(3)
Stand-Alone Location	Walnutport, PA	(2)		885		3,452		—			—			885		3,452		4,337		(1,268	)	July, 2015	(3)
Stand-Alone Location	St. Clair Shores, MI	(2)		2,399		1,797		—			(129	)		2,399		1,668		4,067		(232	)	July, 2015	(3)
Stand-Alone Location	El Paso, TX	(2)		2,008		1,778		—			2,427			2,008		4,205		6,213		(237	)	July, 2015	(3)
Stand-Alone Location	Hialeah, FL	(2)		5,492		2,344		—			13,480			5,492		15,824		21,316		(701	)	July, 2015	(3)
Stand-Alone Location	North Miami, FL	(2)		4,748		2,434		—			(278	)		4,748		2,156		6,904		(323	)	July, 2015	(3)
Flower Valley Shopping Center	Florissant, MO	(2)		2,430		1,607		—			221			2,430		1,828		4,258		(176	)	July, 2015	(3)
Stand-Alone Location	St. Petersburg, FL	(2)		1,653		777		—			(279	)		1,653		498		2,151		(75	)	July, 2015	(3)
Stand-Alone Location	Riverside, CA	(2)		2,670		2,489		—			66			2,670		2,555		5,225		(1,002	)	July, 2015	(3)
Kmart Center	Antioch, CA	(2)		1,594		2,525		—			—			1,594		2,525		4,119		(741	)	July, 2015	(3)
Hillside Plaza	Manistee, MI	(2)		508		3,045		—			(625	)		508		2,420		2,928		(330	)	July, 2015	(3)
Thornton Place	Thornton, CO	(2)		1,881		1,300		—			2,899			1,881		4,199		6,080		(378	)	July, 2015	(3)
Stand-Alone Location	Jefferson City, MO	(2)		957		2,224		—			285			957		2,509		3,466		(743	)	July, 2015	(3)
Stand-Alone Location	New Iberia, LA	(2)		450		1,819		—			6,629			450		8,448		8,898		(1,057	)	July, 2015	(3)
Center of Osceola	Kissimmee, FL	(2)		2,107		2,556		—			47			2,107		2,603		4,710		(925	)	July, 2015	(3)
Stand-Alone Location	Steger, IL	(2)		589		2,846		—			—			589		2,846		3,435		(479	)	July, 2015	(3)
Beachway Plaza	Bradenton, FL	(2)		1,420		1,479		—			(414	)		1,420		1,065		2,485		(155	)	July, 2015	(3)
Mill Creek Marketplace	McKinleyville, CA	(2)		1,354		1,655		—			—			1,354		1,655		3,009		(646	)	July, 2015	(3)
Antelope Square	Layton, UT	(2)		2,234		974		—			4,792			2,234		5,766		8,000		(832	)	July, 2015	(3)
Stand-Alone Location	Honolulu, HI	(2)		6,824		2,195		—			21,276			6,824		23,471		30,295		(1,779	)	July, 2015	(3)
Pennyrile Marketplace	Hopkinsville, KY	(2)		553		2,815		—			2,202			553		5,017		5,570		(461	)	July, 2015	(3)
Stand-Alone Location	Santa Paula, CA	(2)		2,002		1,147		—			—			2,002		1,147		3,149		(676	)	July, 2015	(3)
Big Bear Lake Shopping Center	Big Bear Lake, CA	(2)		3,664		2,945		—			66			3,664		3,011		6,675		(792	)	July, 2015	(3)
Sidney Plaza	Sidney, NY	(2)		1,942		1,769		—			(641	)		1,942		1,128		3,070		(154	)	July, 2015	(3)
Stand-Alone Location	Olean, NY	(2)		249		2,124		—			5,133			249		7,257		7,506		(422	)	July, 2015	(3)
Kmart & Lowes Shopping Center	Lebanon, PA	(2)		1,333		2,085		—			(952	)		1,333		1,133		2,466		(154	)	July, 2015	(3)
South River Colony	Edgewater, MD	(2)		5,534		2,116		—			(630	)		5,534		1,486		7,020		(202	)	July, 2015	(3)
Columbus Centre	Columbus, MS	(2)		2,940		2,547		—			1,187			2,940		3,734		6,674		(1,445	)	July, 2015	(3)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Stand-Alone Location	Rehoboth Beach, DE	(2)	$	714	$	4,523	$	(134	)	$	6,837		$	580	$	11,360	$	11,940	$	(1,860	)	July, 2015	(3)
Stand-Alone Location	Kenton, OH	(2)		340		417		—			(233	)		340		184		524		(25	)	July, 2015	(3)
Ponce Towne Center	Ponce, PR	(2)		473		3,965		—			—			473		3,965		4,438		(953	)	July, 2015	(3)
Boulevard Market Fair	Anderson, SC	(2)		1,297		638		—			9,325			1,297		9,963		11,260		(1,547	)	July, 2015	(3)
Stand-Alone Location	Deming, NM	(2)		1,085		1,194		—			—			1,085		1,194		2,279		(586	)	July, 2015	(3)
Stand-Alone Location	Charles City, IA	(2)		793		1,914		—			—			793		1,914		2,707		(763	)	July, 2015	(3)
Plaza Guaynabo	Guaynabo, PR	(2)		1,603		26,695		—			5,042			1,603		31,737		33,340		(4,518	)	July, 2015	(3)
Rexville (Bayamon) Towne Center	Bayamon, PR	(2)		656		7,173		—			1			656		7,174		7,830		(1,318	)	July, 2015	(3)
Stand-Alone Location	Algona, IA	(2)		644		2,796		—			—			644		2,796		3,440		(692	)	July, 2015	(3)
Webster City Plaza	Webster City, IA	(2)		392		896		—			—			392		896		1,288		(301	)	July, 2015	(3)
Midtown Shopping Center	Madawaska, ME	(2)		140		942		—			—			140		942		1,082		(191	)	July, 2015	(3)
Stand-Alone Location	Cullman, AL	(2)		947		846		—			4,059			947		4,905		5,852		(410	)	July, 2015	(3)
Stand-Alone Location	Sault Ste. Marie, MI	(2)		946		917		—			(478	)		946		439		1,385		(64	)	July, 2015	(3)
Countryside Shopping Center	Mount Pleasant, PA	(2)		970		1,520		—			2,696			970		4,216		5,186		(281	)	July, 2015	(3)
Eastern Commons Shopping Center	Henderson, NV	(2)		3,124		1,362		—			2,023			3,124		3,385		6,509		(216	)	July, 2015	(3)
The Mall at Rockingham Park	Salem, NH	(2)		3,321		12,198		—			9,766			3,321		21,964		25,285		(2,809	)	July, 2015	(3)
Paddock Mall	Ocala, FL	(2)		2,468		1,150		—			(456	)		2,468		694		3,162		(101	)	July, 2015	(3)
Stand-Alone Location	St Paul, MN	(2)		1,866		1,028		—			(309	)		1,866		719		2,585		(107	)	July, 2015	(3)
Square One Mall	Saugus, MA	(2)		1,656		2,835		—			—			1,656		2,835		4,491		(1,250	)	July, 2015	(3)
Valley View Center	Valley View, TX	(2)		4,706		3,230		—			(3,230	)		4,706		-		4,706		-		July, 2015	(3)
Memorial City SC	Memorial, TX	(2)		7,967		4,625		—			(812	)		7,967		3,813		11,780		(591	)	July, 2015	(3)
Overlake Plaza	Redmond Pk, WA	(2)		5,133		4,133		10,513			(244	)		15,646		3,889		19,535		(1,337	)	July, 2015	(3)
Westland Shopping Center	Lakewood, CO	(2)		1,290		4,550		—			—			1,290		4,550		5,840		(1,017	)	July, 2015	(3)
Superstition Springs Center	Mesa/East, AZ	(2)		2,661		2,559		—			(642	)		2,661		1,917		4,578		(261	)	July, 2015	(3)
Southridge Mall	Greendale, WI	(2)		3,208		2,340		—			14,406			3,208		16,746		19,954		(594	)	July, 2015	(3)
Rhode Island Mall	Warwick, RI	(2)		9,166		3,388		(696	)		8,816			8,470		12,204		20,674		(672	)	July, 2015	(3)
Caguas Mall	Caguas, PR	(2)		431		9,362		—			—			431		9,362		9,793		(1,604	)	July, 2015	(3)
The Mall at Sears	Anchorage(Sur), AK	(2)		11,517		11,729		—			19,339			11,517		31,068		42,585		(2,247	)	July, 2015	(3)
Stand-Alone Location	Chicago, IL	(2)		905		804		—			(241	)		905		563		1,468		(87	)	July, 2015	(3)
Stand-Alone Location	Okla City/Sequoyah, OK	(2)		1,542		2,210		—			4,631			1,542		6,841		8,383		(539	)	July, 2015	(3)
University Mall	Pensacola, FL	(2)		2,620		2,990		—			6,414			2,620		9,404		12,024		(30	)	July, 2015	(3)
Metcalf South Shopping Center	Overland Pk, KS	(2)		2,775		1,766		—			(646	)		2,775		1,120		3,895		(172	)	July, 2015	(3)
Colonie Center	Albany, NY	(2)		8,289		6,523		—			6,410			8,289		12,933		21,222		(1,260	)	July, 2015	(3)
Promenade in Temecula	Temecula, CA	(2)		6,098		2,214		—			8,525			6,098		10,739		16,837		(1,240	)	July, 2015	(3)
Clackamas Town Center	Happy Valley, OR	(2)		6,659		1,271		—			(166	)		6,659		1,105		7,764		(160	)	July, 2015	(3)
Maplewood Mall	Maplewood, MN	(2)		3,605		1,162		—			(521	)		3,605		641		4,246		(96	)	July, 2015	(3)
Stand-Alone Location	Shepherd, TX	(2)		5,457		2,081		—			(510	)		5,457		1,571		7,028		(244	)	July, 2015	(3)
Burnsville Center	Burnsville, MN	(2)		3,513		1,281		—			(505	)		3,513		776		4,289		(113	)	July, 2015	(3)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Wolfchase Galleria	Cordova, TN	(2)	$	2,581	$	4,279	$	—		$	—		$	2,581	$	4,279	$	6,860	$	(1,025	)	July, 2015	(3)
Pacific View Mall	Ventura, CA	(2)		5,578		6,172		—			—			5,578		6,172		11,750		(841	)	July, 2015	(3)
Westfield Galleria at Roseville	Roseville, CA	(2)		4,848		3,215		—			9,078			4,848		12,293		17,141		(995	)	July, 2015	(3)
Westfield Solano	Fairfield, CA	(2)		3,679		1,366		—			2,348			3,679		3,714		7,393		(587	)	July, 2015	(3)
Stand-Alone Location	Central Park, TX	(2)		5,468		1,457		(1,904	)		6,171			3,564		7,628		11,192		(133	)	July, 2015	(3)
Valley Plaza	No Hollywood, CA	(2)		8,049		3,172		—			18,546			8,049		21,718		29,767		(1,302	)	July, 2015	(3)
Asheville Mall	Asheville, NC	(2)		4,141		2,036		—			(750	)		4,141		1,286		5,427		(193	)	July, 2015	(3)
Stand-Alone Location	Memphis/Poplar, TN	(2)		2,827		2,475		—			24,740			2,827		27,215		30,042		(2,301	)	July, 2015	(3)
Westfield West Covina	West Covina, CA	(2)		5,972		2,053		—			(648	)		5,972		1,405		7,377		(218	)	July, 2015	(3)
Crystal Mall	Waterford, CT	(2)		1,371		2,534		—			—			1,371		2,534		3,905		(881	)	July, 2015	(3)
Stand-Alone Location	Westwood, TX	(2)		2,899		1,748		—			(427	)		2,899		1,321		4,220		(180	)	July, 2015	(3)
McCain Mall	North Little Rock, AR	(2)		1,288		2,881		—			2,016			1,288		4,897		6,185		(399	)	July, 2015	(3)
Manchester Center	Fresno, CA	(2)		1,370		2,000		—			(920	)		1,370		1,080		2,450		(168	)	July, 2015	(3)
North Riverside Park Mall	N Riverside, IL	(2)		1,846		3,178		—			12,822			1,846		16,000		17,846		(1,589	)	July, 2015	(3)
Westgate Village Shopping Center	Toledo, OH	(2)		1,664		1,289		—			17			1,664		1,306		2,970		(669	)	July, 2015	(3)
Orlando Fashion Square	Orlando Colonial, FL	(2)		4,403		3,626		—			16,046			4,403		19,672		24,075		(572	)	July, 2015	(3)
Boise Towne Center	Boise, ID	(2)		1,828		1,848		—			—			1,828		1,848		3,676		(641	)	July, 2015	(3)
Lincoln Park Shopping Center	Lincoln Park, MI	(2)		1,106		3,198		—			(493	)		1,106		2,705		3,811		(420	)	July, 2015	(3)
Baybrook Mall	Friendswd/Baybrk, TX	(2)		6,124		2,038		—			2			6,124		2,040		8,164		(905	)	July, 2015	(3)
Stand-Alone Location	Hicksville, NYC	(2)		38,625		19,066		—			(888	)		38,625		18,178		56,803		(2,821	)	July, 2015	(3)
Pembroke Mall	Virginia Beach, VA	(2)		10,413		4,760		—			13,972			10,413		18,732		29,145		(3,477	)	July, 2015	(3)
Ingram Park Mall	Ingram, TX	(2)		4,651		2,560		—			—			4,651		2,560		7,211		(887	)	July, 2015	(3)
Landmark Mall	Alexandria, VA	(2)		3,728		3,294		—			(738	)		3,728		2,556		6,284		(383	)	July, 2015	(3)
Stand-Alone Location	Watchung, NYC	(2)		6,704		4,110		—			28,437			6,704		32,547		39,251		(593	)	July, 2015	(3)
Tyrone Square Mall	St Petersburg, FL	(2)		2,381		2,420		—			23,002			2,381		25,422		27,803		(2,209	)	July, 2015	(3)
Stand-Alone Location	Riverside, CA	(2)		4,397		4,407		—			(1,136	)		4,397		3,271		7,668		(508	)	July, 2015	(3)
Oglethorpe Mall	Savannah, GA	(2)		5,285		3,012		—			(344	)		5,285		2,668		7,953		(343	)	July, 2015	(3)
Pheasant Lane Mall	Nashua, NH	(2)		1,794		7,255		—			—			1,794		7,255		9,049		(1,082	)	July, 2015	(3)
Northwoods Mall	Chrlstn/Northwoods, SC	(2)		3,576		1,497		—			10,143			3,576		11,640		15,216		(621	)	July, 2015	(3)
Park Place	Park Mall, AZ	(2)		5,207		3,458		—			567			5,207		4,025		9,232		(421	)	July, 2015	(3)
Westfield Hialeah	Hialeah/Westland, FL	(2)		9,683		3,472		—			1,506			9,683		4,978		14,661		(1,368	)	July, 2015	(3)
Mall of Acadiana	Lafayette, LA	(2)		1,406		5,094		—			—			1,406		5,094		6,500		(1,508	)	July, 2015	(3)
Chula Vista Center	Chula Vista, CA	(2)		7,315		6,834		—			(902	)		7,315		5,932		13,247		(921	)	July, 2015	(3)
Southland Mall	Miami/Cutler Rdg, FL	(2)		5,219		1,236		—			(206	)		5,219		1,030		6,249		(155	)	July, 2015	(3)
Stand-Alone Location	Chicago, IL	(2)		3,665		3,504		—			—			3,665		3,504		7,169		(580	)	July, 2015	(3)
Inland Center	San Bernardino, CA	(2)		4,131		2,066		—			(780	)		4,131		1,286		5,417		(193	)	July, 2015	(3)
Florin Mall	Florin, CA	(2)		1,022		1,366		—			(293	)		1,022		1,073		2,095		(161	)	July, 2015	(3)
Westfield Belden Village	Canton, OH	(2)		1,650		5,854		—			4,894			1,650		10,748		12,398		(722	)	July, 2015	(3)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Westfield Countryside	Clearwater/Cntrysd, FL	(2)	$	5,852	$	17,777	$	—		$	834		$	5,852	$	18,611	$	24,463	$	(3,560	)	July, 2015	(3)
Southland Shopping Center	Middleburg Hts, OH	(2)		698		1,547		—			(322	)		698		1,225		1,923		(190	)	July, 2015	(3)
Westfield Parkway	El Cajon, CA	(2)		10,573		2,883		—			1,709			10,573		4,592		15,165		(288	)	July, 2015	(3)
Macomb Mall	Roseville, MI	(2)		3,286		4,778		—			11,557			3,286		16,335		19,621		(2,583	)	July, 2015	(3)
Shops at Tanforan	San Bruno, CA	(2)		7,854		4,642		—			(977	)		7,854		3,665		11,519		(550	)	July, 2015	(3)
Eastridge Mall	San Jose-Eastridge, CA	(2)		1,531		2,356		—			(805	)		1,531		1,551		3,082		(233	)	July, 2015	(3)
Oakland Mall	Troy, MI	(2)		7,954		2,651		(815	)		5,719			7,139		8,370		15,509		(1,263	)	July, 2015	(3)
Edison Mall	Ft Myers, FL	(2)		3,168		2,853		—			(418	)		3,168		2,435		5,603		(378	)	July, 2015	(3)
Chapel Hill Mall	Chapel Hill, OH	(2)		444		1,460		—			(819	)		444		641		1,085		(96	)	July, 2015	(3)
Greece Ridge Center	Rochester-Greece, NY	(2)		3,082		1,560		—			(380	)		3,082		1,180		4,262		(171	)	July, 2015	(3)
Westfield Broward	Plantation, FL	(2)		6,933		2,509		—			(823	)		6,933		1,686		8,619		(245	)	July, 2015	(3)
Sunrise Mall	Citrus Hts-Sunrise, CA	(2)		3,778		2,088		—			(775	)		3,778		1,313		5,091		(197	)	July, 2015	(3)
Dayton Mall	Dayton Mall, OH	(2)		2,650		1,223		—			2,360			2,650		3,583		6,233		(273	)	July, 2015	(3)
Southbay Pavilion	Carson, CA	(2)		11,476		5,223		—			17,835			11,476		23,058		34,534		(1,852	)	July, 2015	(3)
Stand-Alone Location	Middletown, NJ	(2)		5,647		2,941		—			(1,041	)		5,647		1,900		7,547		(279	)	July, 2015	(3)
Eastview Mal	Victor, NY	(2)		4,144		1,391		—			(397	)		4,144		994		5,138		(149	)	July, 2015	(3)
Westminster Mall	Westminster, CA	(2)		6,845		5,651		—			—			6,845		5,651		12,496		(1,615	)	July, 2015	(3)
Greenbrier Mall	Chspk/Greenbrier, VA	(2)		4,236		1,700		—			(482	)		4,236		1,218		5,454		(177	)	July, 2015	(3)
Great Northern Mall	Clay, NY	(2)		787		4,134		—			—			787		4,134		4,921		(1,081	)	July, 2015	(3)
Westfield Sarasota	Sarasota, FL	(2)		3,920		2,200		—			—			3,920		2,200		6,120		(947	)	July, 2015	(3)
Town Center at Boca Raton	Boca Raton, FL	(2)		16,089		7,480		—			(515	)		16,089		6,965		23,054		(1,011	)	July, 2015	(3)
Aventura Mall	Miami, FL	(2)		13,264		61,577		—			(61,520	)		13,264		57		13,321		(52	)	July, 2015	(3)
Meadows Mall	Las Vegas(Meadows), NV	(2)		3,354		1,879		—			2,777			3,354		4,656		8,010		(219	)	July, 2015	(3)
Northridge Center	Salinas, CA	(2)		2,644		4,394		—			—			2,644		4,394		7,038		(1,233	)	July, 2015	(3)
Newpark Mall	Newark, CA	(2)		4,312		3,268		—			(660	)		4,312		2,608		6,920		(379	)	July, 2015	(3)
Desert Sky Mall	Phoenix-Desert Sky, AZ	(2)		2,605		2,448		—			—			2,605		2,448		5,053		(860	)	July, 2015	(3)
Miami International Mall	Doral(Miami), FL	(2)		9,214		2,654		—			(600	)		9,214		2,054		11,268		(298	)	July, 2015	(3)
Louis Joliet Mall	Joliet, IL	(2)		2,557		3,108		—			—			2,557		3,108		5,665		(1,488	)	July, 2015	(3)
Montclair Plaza	Montclair, CA	(2)		2,498		2,119		—			—			2,498		2,119		4,617		(420	)	July, 2015	(3)
Orland Square	Orland Park, IL	(2)		1,783		974		—			(380	)		1,783		594		2,377		(86	)	July, 2015	(3)
Huntington Square Mall	East Northport, NY	(2)		7,617		2,065		—			20,351			7,617		22,416		30,033		(477	)	July, 2015	(3)
Fair Oaks Mall	Fairfax, VA	(2)		10,873		1,491		—			13,643			10,873		15,134		26,007		(589	)	July, 2015	(3)
Glenbrook Square	Ft Wayne, IN	(2)		3,247		5,476		(796	)		(3,382	)		2,451		2,094		4,545		(6	)	July, 2015	(3)
Tech Ridge	Austin, TX	(2)		3,164		2,858		(1,453	)		15,368			1,711		18,226		19,937		(976	)	July, 2015	(3)
Moreno Valley Mall at Towngate	Moreno Vly, CA	(2)		3,898		3,407		—			(751	)		3,898		2,656		6,554		(362	)	July, 2015	(3)
Jordan Landing Shopping Center	West Jordan, UT	(2)		3,190		2,305		—			6,471			3,190		8,776		11,966		(1,645	)	July, 2015	(3)
Plaza Carolina Mall	Carolina, PR	(2)		611		8,640		—			—			611		8,640		9,251		(1,726	)	July, 2015	(3)
Jefferson Valley Mall	Yorktown Hts, NY	(2)		3,584		1,569		—			(529	)		3,584		1,040		4,624		(149	)	July, 2015	(3)

							Costs Capitalized						Gross Amount at Which Carried
			Acquisition Costs				Subsequent to Acquisition						at Close of Period (1)										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
Lakeland Square	Lakeland, FL	(2)	$	1,503	$	1,045	$	—		$	(378	)	$	1,503	$	667	$	2,170	$	(91	)	July, 2015	(3)
Westfield Palm Desert	Palm Desert, CA	(2)		5,473		1,705		(542	)		(167	)		4,931		1,538		6,469		(610	)	July, 2015	(3)
Meadowood Mall	Reno, NV	(2)		2,135		5,748		—			1,039			2,135		6,787		8,922		(896	)	July, 2015	(3)
Imperial Valley Mall	El Centro, CA	(2)		3,877		3,977		—			—			3,877		3,977		7,854		(1,205	)	July, 2015	(3)
Bowie Town Center	Bowie, MD	(2)		4,583		2,335		—			1,560			4,583		3,895		8,478		(1,030	)	July, 2015	(3)
Mall at Sierra Vista	Sierra Vista, AZ	(2)		1,252		1,791		—			—			1,252		1,791		3,043		(525	)	July, 2015	(3)
Southgate Mall	Yuma, AZ	(2)		1,485		1,596		—			(401	)		1,485		1,195		2,680		(179	)	July, 2015	(3)
Town Center Mall 81	Santa Maria, CA	(2)		3,967		2,635		—			—			3,967		2,635		6,602		(638	)	July, 2015	(3)
Irving Mall	Irving, TX	(2)		4,493		5,743		—			(722	)		4,493		5,021		9,514		(753	)	July, 2015	(3)
Kentucky Oaks Mall	Paducah, KY	(2)		1,022		2,868		—			9,151			1,022		12,019		13,041		(1,037	)	July, 2015	(3)
Lindale Mall	Cedar Rapids, IA	(2)		2,833		2,197		—			(457	)		2,833		1,740		4,573		(245	)	July, 2015	(3)
Prescott Gateway	Prescott, AZ	(2)		1,071		835		—			(305	)		1,071		530		1,601		(68	)	July, 2015	(3)
Stand-Alone Location	Melbourne, FL	(2)		2,441		1,981		—			(650	)		2,441		1,331		3,772		(200	)	July, 2015	(3)
Merced Mall	Merced, CA	(2)		2,534		1,604		—			(634	)		2,534		970		3,504		(146	)	July, 2015	(3)
Janss Marketplace	Thousand Oaks, CA	(2)		9,853		14,785		—			7,102			9,853		21,887		31,740		(3,722	)	July, 2015	(3)
West Towne Mall	Madison-West, WI	(2)		3,053		2,130		—			14,789			3,053		16,919		19,972		(1,011	)	July, 2015	(3)
The Mall of New Hampshire	Manchester, NH	(2)		1,458		4,160		—			3,557			1,458		7,717		9,175		(1,086	)	July, 2015	(3)
Warrenton Village	Warrenton, VA	(2)		1,956		2,480		—			1,731			1,956		4,211		6,167		(713	)	July, 2015	(3)
Fox Run Mall	Portsmouth, NH	(2)		3,934		3,375		—			(739	)		3,934		2,636		6,570		(383	)	July, 2015	(3)
Panama City Mall	Panama City, FL	(2)		3,227		1,614		—			(461	)		3,227		1,153		4,380		(167	)	July, 2015	(3)
Shopping Center	Peoria, AZ	(2)		1,204		509		—			219			1,204		728		1,932		(44	)	July, 2015	(3)
Stand-Alone Location	Phoenix , AZ	(2)		568		1,088		—			13			568		1,101		1,669		(632	)	July, 2015	(3)
Kmart Shopping Center	Orange Park, FL	(2)		1,477		1,701		—			462			1,477		2,163		3,640		(795	)	July, 2015	(3)
Homewood Square	Homewood, IL	(2)		3,954		4,766		—			36			3,954		4,802		8,756		(1,463	)	July, 2015	(3)
Stand-Alone Location	Lombard, IL	(2)		2,685		8,281		—			—			2,685		8,281		10,966		(1,379	)	July, 2015	(3)
Stand-Alone Location	Ypsilanti, MI	(2)		2,462		1,277		—			(515	)		2,462		762		3,224		(119	)	July, 2015	(3)
Kickapoo Corners	Springfield, MO	(2)		922		2,050		—			47			922		2,097		3,019		(611	)	July, 2015	(3)
Landmark Center	Greensboro, NC	(2)		3,869		4,387		—			423			3,869		4,810		8,679		(887	)	July, 2015	(3)
Stand-Alone Location	Houston, TX	(2)		6,114		1,515		—			(525	)		6,114		990		7,104		(132	)	July, 2015	(3)
King of Prussia	King of Prussia, PA	(2)		-		42,300		—			2,982			-		45,282		45,282		(7,048	)	July, 2015	(3)
Construction in Progress	Various	(2)	-			—		—			338,672			—		338,672		338,672		-		n/a	(3)
			$	663,044	$	693,550	$	3,960		$	757,775		$	667,004	$	1,451,325	$	2,118,329	$	(147,696	)

(1) The aggregate cost of land, building and improvements (which includes construction in process) for U.S. federal income tax purposes is approximately $2.5 billion.

(2) The Term Loan Facility is secured on a first lien basis by individual mortgages and a pledge of the capital stock of the direct subsidiaries of the Company, including those that own each of the Company’s properties.  See Note 6.

(3) 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-44

SERITAGE GROWTH PROPERTIES

NOTES TO SCHEDULE III

(Dollars in thousands)

Reconciliation of Real Estate

	2019			2018			2017
Balance at beginning of period	$	1,889,014		$	1,854,043		$	1,734,892
Additions		364,970			318,820			257,933
Impairments		—			—			—
Dispositions		(95,270	)		(244,815	)		(71,117	)
Write-offs		(40,385	)		(39,034	)		(67,665	)
Balance at end of period	$	2,118,329		$	1,889,014		$	1,854,043

Reconciliation of Accumulated Depreciation

	2019			2018			2017
Balance at beginning of period	$	137,947		$	139,483		$	89,940
Depreciation expense		59,289			50,272			120,709
Dispositions		(9,174	)		(12,772	)		(3,501	)
Write-offs		(40,366	)		(39,036	)		(67,665	)
Balance at end of period	$	147,696		$	137,947		$	139,483

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Investments in Unconsolidated Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2019

Equity Method Investments And Joint Ventures [Abstract]

Summary of Company's Investments in Unconsolidated Joint Ventures

As of December 31, 2019, the Company had investments in nine unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed    by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by    Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington    Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons		50.0	%		1		159,000
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management		50.0	%		1		—
						28		4,855,600

Summary of Properties Contributed In Unconsolidated Joint Ventures

The following table presents summarizes the properties contributed to the Company’s unconsolidated joint ventures:

		December 31, 2019
Unconsolidated Joint Venture	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	90.0	$	38.8
UTC JV	May 18, 2018		68.0		28.3
West Hartford JV (2)	May 18, 2018		20.3		(1.1	)
2019
Cockeysville JV (3)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (4)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate. The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million.

(2) The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022. The primary inputs in determining the Contribution Value for the West Hartford JV are

property operating income, real estate taxes and total project costs. The Contribution Value cannot be more than $29.6  million or less than $20.4  million, and the Gain (Loss) cannot be more than $5.8 million or more than a $3.4 million loss. As of December 31, 2019, the Company revaluated the Contribution Value and recorded an additional loss of $2.3 million.

(3) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the Cockeysville JV if certain milestones are met with respect to entitling the Additional Land Parcel for residential use. If the Additional Land Parcel is contributed to the Cockeysville JV, the Company will record an increased investment in the Cockeysville JV in an amount equal to 50% of the fair value of the Additional Land Parcel at the time of contribution. The Contribution Value of the Cockeysville JV is based upon the Company’s assessment of the probability of the Additional Land Parcel being entitled for residential use.  The maximum Gain (Loss) is the fair value of the Additional Land Parcel at the time the Contribution Value is revalued, which cannot be less than $3.8 million.

(4) The Tech Ridge JV is subject to a revaluation primarily based upon, the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

Summary of Combined Financial Data of Unconsolidated Joint Ventures

	December 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	336,739		$	321,853
Buildings and improvements		517,068			508,302
Accumulated depreciation		(86,496	)		(72,239	)
		767,311			757,916
Construction in progress		177,028			78,227
Net investment in real estate		944,339			836,143
Cash and cash equivalents		27,977			14,741
Tenant and other receivables, net		3,113			5,220
Other assets, net		26,051			38,285
Total assets	$	1,001,480		$	894,389
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	14,218		$	10,406
Accounts payable, accrued expenses    and other liabilities		89,110			71,791
Total liabilities		103,328			82,197
Members Interest
Additional paid in capital		934,120			833,168
Retained earnings		(35,968	)		(20,976	)
Total members interest		898,152			812,192
Total liabilities and members interest	$	1,001,480		$	894,389

	Year Ended December 31,
	2019			2018			2017
EQUITY IN INCOME OF      UNCONSOLIDATED JOINT VENTURES
Total revenue	$	31,470		$	48,455		$	58,264
Property operating expenses		(11,385	)		(9,357	)		(11,358	)
Depreciation and amortization		(60,745	)		(31,676	)		(47,948	)
Operating income (loss)		(40,660	)		7,422			(1,042	)
Other expenses		(2,049	)		(28,317	)		(14,533	)
Gain on sale of real estate, net		6,721			—			—
Net (loss) income	$	(35,988	)	$	(20,895	)	$	(15,575	)
Equity in (loss) income of unconsolidated    joint ventures	$	(17,994	)	$	(10,448	)	$	(7,788	)

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Summary of Significant Accounting Policies - Schedule of Gain on Sale of Real Estate (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Contributions to unconsolidated joint ventures
Gross proceeds	$ 21,700	$ 232,700	$ 57,500
Gain (loss) on sale of real estate, net	3,900	63,900	11,400
Dispositions to third parties
Gross proceeds	144,300	114,300
Gain (loss) on sale of real estate, net	63,700	29,500
Total gains on contributions and dispositions, net	$ 67,600	$ 93,400	$ 11,400

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Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

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):

	2019												2018
	First			Second			Third			Fourth			First		Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter			Quarter		Quarter			Quarter			Quarter
Total revenue	$	43,860		$	40,511		$	47,628		$	36,634		$	53,777	$	49,270		$	56,593		$	55,114
Total expenses		56,404			47,952			50,349			69,750			61,147		74,083			76,802			120,839
Net income (loss)		(10,894	)		(25,885	)		(16,482	)		(37,342	)		16,201		(10,602	)		(34,744	)		(85,733	)
Net income (loss) attributable to    common shareholders		(8,192	)		(18,128	)		(12,103	)		(25,874	)		9,100		(7,996	)		(23,441	)		(56,038	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Basic		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Diluted		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Weighted average Class A and Class C    common shares outstanding - Basic		35,671			36,291			36,829			36,846			35,414		35,483			35,598			35,589
Weighted average Class A and Class C    common shares outstanding - Diluted		35,671			36,291			36,829			36,846			35,501		35,483			35,598			35,589

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

	2019								2018
	First		Second		Third		Fourth		First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Depreciation and amortization expense (1)	$	10,800	$	2,059	$	4,286	$	18,548	$	11,016	$	26,758	$	31,444	$	78,311
Gains on the sale of interests (2)		21,260		11,613		12,445		25,786		41,831		34,187		17,401		2,745

(1) Denotes depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles.

(2) Denotes gains on the on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.

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Investments in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2019

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Note 4 – Investments in Unconsolidated Joint Ventures

The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures.  The Company’s partners in these joint ventures are unrelated real estate entities or commercial enterprises.  The Company and its 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.

As of December 31, 2019, the Company had investments in nine unconsolidated joint ventures as follows:

		Seritage %			# of		Total
Unconsolidated Joint Venture	Joint Venture Partner	Ownership			Properties		GLA
GS Portfolio Holdings II LLC    ("GGP I JV")	Brookfield Properties Retail		50.0	%		4		598,200
GS Portfolio Holdings (2017) LLC    ("GGP II JV")	Brookfield Properties Retail		50.0	%		5		1,168,000
MS Portfolio LLC    ("Macerich JV")	The Macerich Company		50.0	%		9		1,572,000
SPS Portfolio Holdings II LLC    ("Simon JV")	Simon Property Group, Inc.		50.0	%		5		872,200
Mark 302 JV LLC    ("Mark 302 JV")	An investment fund managed    by Invesco Real Estate		50.1	%		1		96,400
SI UTC LLC    ("UTC JV")	A separate account advised by    Invesco Real Estate		50.0	%		1		226,200
SF WH Joint Venture LLC    ("West Hartford JV")	An affiliate of First Washington    Realty		50.0	%		1		163,600
GGCAL SRG HV LLC    ("Cockeysville JV")	An affiliate of    Greenberg Gibbons		50.0	%		1		159,000
Tech Ridge JV Holding LLC    ("Tech Ridge JV")	An affiliate of    RD Management		50.0	%		1		—
						28		4,855,600

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

In certain circumstances, the Contribution Value is subject to revaluation as defined in the respective joint venture agreements, which may result in an adjustment to the Gain (Loss) recognized. If the Contribution Value is subject to revaluation, the Company initially recognizes the Gain (Loss) at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a periodic basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the joint venture partners, as well as an adjustment to the Initial Gain (Loss).

Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the Gain (Loss) for those joint ventures subject to a revaluation.  The following table presents summarizes the properties contributed to the Company’s unconsolidated joint ventures:

		December 31, 2019
Unconsolidated Joint Venture	Contribution Date	Contribution Value		Gain (Loss)
2018
Mark 302 JV (1)	March 20, 2018	$	90.0	$	38.8
UTC JV	May 18, 2018		68.0		28.3
West Hartford JV (2)	May 18, 2018		20.3		(1.1	)
2019
Cockeysville JV (3)	March 29, 2019	$	12.5	$	3.8
Tech Ridge JV (4)	September 27, 2019		3.0		0.1

(1) The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate. The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million.

(2) The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022. The primary inputs in determining the Contribution Value for the West Hartford JV are

property operating income, real estate taxes and total project costs. The Contribution Value cannot be more than $29.6  million or less than $20.4  million, and the Gain (Loss) cannot be more than $5.8 million or more than a $3.4 million loss. As of December 31, 2019, the Company revaluated the Contribution Value and recorded an additional loss of $2.3 million.

(3) The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the Cockeysville JV if certain milestones are met with respect to entitling the Additional Land Parcel for residential use. If the Additional Land Parcel is contributed to the Cockeysville JV, the Company will record an increased investment in the Cockeysville JV in an amount equal to 50% of the fair value of the Additional Land Parcel at the time of contribution. The Contribution Value of the Cockeysville JV is based upon the Company’s assessment of the probability of the Additional Land Parcel being entitled for residential use.  The maximum Gain (Loss) is the fair value of the Additional Land Parcel at the time the Contribution Value is revalued, which cannot be less than $3.8 million.

(4) The Tech Ridge JV is subject to a revaluation primarily based upon, the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

Other Joint Venture Transactions

The Company has contributed certain property to the following joint ventures in 2017:

GGP JVs

On July 12, 2017, the Company completed two transactions with Brookfield Retail Properties for gross consideration of $247.6 million whereby the Company (i) sold to Brookfield Retail Properties the Company’s 50% JV Interests in eight of the 12 assets in the GGP I JV for $190.1 million and recorded a gain of $43.7 million which is included in gain on sale of interest in unconsolidated joint venture within the consolidated statements of operations; and (ii) contributed five Wholly Owned Properties to the GGP II JV and sold a 50% interest in the new JV Properties to Brookfield Retail Properties for $57.5 million and recorded a gain of $11.5 million which is included in gain on sale of real estate within the consolidated statements of operations.

Simon JV

On November 3, 2017, the Company sold to its partner, Simon Property Group, Inc., its 50% joint venture interests in five of the ten assets in the Simon JV for $68.0 million and recorded a gain of $16.6 million which is included in gain on sale of interest in unconsolidated joint venture within the consolidated statements of operations.

Joint Venture Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the West Hartford JV, the UTC JV, and Tech Ridge JV. The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its joint ventures. The Company also acts as the development manager for one of the properties in the GGP II JV which entitles the Company to receive certain development fees. The Company earned $1.6 million and $1.2 million from these services for the years ended December 31, 2019 and December 31, 2018, respectively.

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

	December 31, 2019			December 31, 2018
ASSETS
Investment in real estate
Land	$	336,739		$	321,853
Buildings and improvements		517,068			508,302
Accumulated depreciation		(86,496	)		(72,239	)
		767,311			757,916
Construction in progress		177,028			78,227
Net investment in real estate		944,339			836,143
Cash and cash equivalents		27,977			14,741
Tenant and other receivables, net		3,113			5,220
Other assets, net		26,051			38,285
Total assets	$	1,001,480		$	894,389
LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Mortgage loans payable, net	$	14,218		$	10,406
Accounts payable, accrued expenses    and other liabilities		89,110			71,791
Total liabilities		103,328			82,197
Members Interest
Additional paid in capital		934,120			833,168
Retained earnings		(35,968	)		(20,976	)
Total members interest		898,152			812,192
Total liabilities and members interest	$	1,001,480		$	894,389

	Year Ended December 31,
	2019			2018			2017
EQUITY IN INCOME OF      UNCONSOLIDATED JOINT VENTURES
Total revenue	$	31,470		$	48,455		$	58,264
Property operating expenses		(11,385	)		(9,357	)		(11,358	)
Depreciation and amortization		(60,745	)		(31,676	)		(47,948	)
Operating income (loss)		(40,660	)		7,422			(1,042	)
Other expenses		(2,049	)		(28,317	)		(14,533	)
Gain on sale of real estate, net		6,721			—			—
Net (loss) income	$	(35,988	)	$	(20,895	)	$	(15,575	)
Equity in (loss) income of unconsolidated    joint ventures	$	(17,994	)	$	(10,448	)	$	(7,788	)

Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP.  The Company shares in the profits and losses of these unconsolidated joint ventures generally in accordance with the Company’s respective equity interests.  In some instances, the Company may recognize profits and losses related to investment in an unconsolidated 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 or other items.  There were no joint venture impairment charges for the years ended December 31, 2019, 2018 and 2017.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 – 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.  The Company also considers 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 were carried at fair value and were valued using Level 2 inputs.  The Company had no derivative instruments as of December 31, 2019 (an interest rate cap associated with the Mortgage Loans and Future Funding Facility was terminated subsequent to the repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018). The Company utilized an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument.

The Company had elected not to utilize hedge accounting, and therefore, the change in fair value was included in previous periods within change in fair value of interest rate cap on the consolidated statements of operations.  For the year ended December 31, 2019, the Company did not record any gain or loss compared to losses of $23 thousand and $0.7 million for the years ended December 31, 2018 and 2017, respectively.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash equivalents, term loan facility and mortgage loans payable.  The fair value of cash equivalents is classified as Level 1 and the fair value of term loan facility and mortgage loans payable are classified as Level 2. Cash equivalents are carried at cost, which approximates fair value.  The fair value of debt obligations 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, 2019 and December 31, 2018, the estimated fair values of the Company’s debt obligations were $1.6 billion and $1.6 billion, respectively, which approximated the carrying value at such dates as the current risk-adjusted rate approximates the stated rates on the Company’s debt obligations.

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Investment in real estate
Land	$ 667,004	$ 696,792
Buildings and improvements	1,112,653	900,173
Accumulated depreciation	(147,696)	(137,947)
Real Estate Investment Property, at Cost, Total	1,631,961	1,459,018
Construction in progress	338,672	292,049
Net investment in real estate	1,970,633	1,751,067
Real estate held for sale	5,275	3,094
Investment in unconsolidated joint ventures	445,077	398,577
Cash and cash equivalents	139,260	532,857
Tenant and other receivables, net	54,470	36,926
Lease intangible assets, net	68,153	123,656
Prepaid expenses, deferred expenses and other assets, net	67,744	29,899
Total assets	2,750,612	2,876,076
Liabilities
Term loan facility, net	1,598,487	1,598,053
Accounts payable, accrued expenses and other liabilities	108,755	127,565
Total liabilities	1,707,242	1,725,618
Commitments and contingencies (Note 9)
Shareholders' Equity
Additional paid-in capital	1,149,721	1,124,504
Accumulated deficit	(418,711)	(344,132)
Total shareholders' equity	731,419	780,770
Non-controlling interests	311,951	369,688
Total equity	1,043,370	1,150,458
Total liabilities and equity	2,750,612	2,876,076
Class A Common Shares [Member]
Shareholders' Equity
Common shares	369	357
Total equity	369	357
Class B Common Shares [Member]
Shareholders' Equity
Common shares	12	13
Total equity	12	13
Series A Preferred Shares [Member]
Shareholders' Equity
Preferred shares	28	28
Total equity	$ 28	$ 28

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Common dividends and distributions declared, per share	$ 0.25	$ 1.00	$ 1.00
Preferred dividends declared, per share	$ 1.75	$ 1.75
Class B Common Shares [Member]
Share class surrenders, shares	79,829	6,501	260,154
Class A Common Shares [Member]
Share class exchanges, common shares		3,151,131	2,603,554
OP Unit exchanges, shares	1,214,577	98,923	3,958,182

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Shareholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Shareholders' Equity

Note 12 – 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 Brookfield Properties Retail and Simon Property Group, Inc. 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 Brookfield Properties Retail liquidated its position during the year ended December 31, 2016 and the subsidiary of Simon Property Group, Inc. liquidated its position during the year ended December 31, 2017.

During the year ended December 31, 2019, 1,214,577 OP Units were exchanged for an equal number of Class A shares.

As of December 31, 2019, 36,897,364 Class A common shares were issued and outstanding.

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.

During the year ended December 31, 2019, 79,829 Class B non-economic common shares were surrendered to the Company.

As of December 31, 2019, 1,242,536 Class B non-economic common shares were issued and outstanding.  

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

As of December 31, 2019, there were no Class C non-voting common shares issued or outstanding.

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

Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share.  The Company received net proceeds from the offering of approximately $66.4 million, after deducting payment of the underwriting discount and offering expenses, which it used to fund its redevelopment pipeline and for general corporate purposes.

The Company may not redeem the Series A Preferred Shares before December 14, 2022 except to preserve its status as a REIT or upon the occurrence of a Change of Control, as defined in the trust agreement addendum designating the Series A Preferred Shares.  On and after December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. In addition, upon the occurrence of a Change of Control, the Company may redeem any or all of the Series A Preferred Shares for cash within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of OP Units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

As previously disclosed, the Company declared a dividend on the Company’s Class A and Class C common shares for the first quarter of 2019 and has not declared dividends on the Company’s Class A and Class C common shares since that time, based on our Board of Trustees’ assessment of the Company’s investment opportunities and its expectations of taxable income for the remainder of 2020.  The Company intends to, at a minimum, make distributions to our shareholders to comply with the REIT requirements of the Code, which may be satisfied by dividends on the Company’s Series A Preferred shares.

The Company declared total dividends of $0.25, $1.00 and $1.00 per common share for the years ended December 31, 2019, 2018 and 2017, respectively. The dividends have been reflected as follows for U.S. federal income tax purposes:

	Year Ended December 31,
	2019			2018		2017
Ordinary income	$	—		$	0.01	$	0.53
Capital gain distributions		—			0.35		0.47
Return of capital		0.50			0.39		—
Dividends reallocation (1)		(0.25	)		0.25		—
Total	$	0.25		$	1.00	$	1.00

(1) In 2018, the fourth quarter dividend of 2018 declared on October 23, 2018 was allocated to the 2019 tax year. 

The Company’s Board of Trustees also declared the following dividends on preferred shares during 2019 and 2018:

Declaration Date	Record Date	Payment Date	Preferred Share
2019
October 23	December 31	January 15, 2020	$	0.43750
July 23	September 30	October 15		0.43750
April 30	June 28	July 15		0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

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Schedule III - Reconciliation of Accumulated Depreciation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation Of Real Estate Accumulated Depreciation Roll Forward
Balance at beginning of period	$ 137,947	$ 139,483	$ 89,940
Depreciation expense	59,289	50,272	120,709
Dispositions	(9,174)	(12,772)	(3,501)
Write-offs	(40,366)	(39,036)	(67,665)
Balance at end of period	$ 147,696	$ 137,947	$ 139,483

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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								12 Months Ended
		Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restructuring Cost And Reserve [Line Items]
Total revenue		$ 36,634	$ 47,628	$ 40,511	$ 43,860	$ 55,114	$ 56,593	$ 49,270	$ 53,777	$ 168,633	$ 214,754	$ 241,017
Total expenses		69,750	50,349	47,952	56,404	120,839	76,802	74,083	61,147	224,455	332,871	355,584
Net loss		(37,342)	(16,482)	(25,885)	(10,894)	(85,733)	(34,744)	(10,602)	16,201	(90,603)	(114,878)	(120,813)
Net income (loss) attributable to common shareholders		$ (25,874)	$ (12,103)	$ (18,128)	$ (8,192)	$ (56,038)	$ (23,441)	$ (7,996)	$ 9,100	$ (64,297)	$ (78,375)	$ (73,999)
Net income (loss) per share attributable to Class A and Class C common shareholders - Basic		$ (0.70)	$ (0.33)	$ (0.50)	$ (0.23)	$ (1.57)	$ (0.66)	$ (0.23)	$ 0.26	$ (1.77)	$ (2.20)	$ (2.19)
Net income (loss) per share attributable to Class A and Class C common shareholders - Diluted		$ (0.70)	$ (0.33)	$ (0.50)	$ (0.23)	$ (1.57)	$ (0.66)	$ (0.23)	$ 0.26	$ (1.77)	$ (2.20)	$ (2.19)
Weighted average Class A and Class C common shares outstanding - Basic		36,846	36,829	36,291	35,671	35,589	35,598	35,483	35,414	36,413	35,560	33,804
Weighted average Class A and Class C common shares outstanding - Diluted		36,846	36,829	36,291	35,671	35,589	35,598	35,483	35,501	36,413	35,560	33,804
Gains on the sale of interests	[1]	$ 25,786	$ 12,445	$ 11,613	$ 21,260	$ 2,745	$ 17,401	$ 34,187	$ 41,831
Holdco and Sears Holdings Corporation [Member]
Restructuring Cost And Reserve [Line Items]
Depreciation and amortization expense	[2]	$ 18,548	$ 4,286	$ 2,059	$ 10,800	$ 78,311	$ 31,444	$ 26,758	$ 11,016

[1] Denotes gains on the on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.

[2] Denotes depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles

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Leases - Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases (Detail) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
2020	$ 113,265
2021	121,909
2022	124,067
2023	119,745
2024	116,607
Thereafter	1,019,054
Total Lease Payments	$ 1,614,647
2019		$ 120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments		$ 1,026,768

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Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
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%

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Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	$ 68,153	$ 123,656
Identified intangible liability, net of accumulated amortization	10,648	12,281
Amortization of below-market leases, net of above-market leases	500	900	$ 1,200
Additional property expense	200	200	200
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	65,106	108,662
Amortization expense of intangible assets	$ 40,500	$ 173,100	$ 139,500

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Organization - Additional Information (Detail) $ in Thousands			1 Months Ended	12 Months Ended
	Feb. 28, 2019 Property	Jun. 11, 2015 USD ($) Property JointVenture RetailFacility	Nov. 30, 2019 Property	Dec. 31, 2019 USD ($) ft² Property State JointVenture	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Organization And Basis Of Presentation [Line Items]
Number of properties interested in the portfolio				212
Area of real estate property (in square feet) | ft²				9,232
Number of states in properties located | State				44
Number of properties				28
Number of joint venture acquired | JointVenture				28
Net cash (used in) provided by operating activities | $				$ 57,660	$ (54,899)	$ (59,609)
Net cash (used in) provided by investing activities | $				$ 299,490	$ 119,475	$ (37,189)
Master Lease [Member]
Organization And Basis Of Presentation [Line Items]
Number of real estate properties wholly-owned				10
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price | $		$ 2,700,000
Number of real estate properties acquired		234
Number of ground leased properties acquired		1
Interests in joint ventures acquired		50.00%
Number of joint venture acquired | JointVenture		3
Sears Holdings Corporation [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities | RetailFacility		28
Holdco Master Lease [Member] | Termination [Member]
Organization And Basis Of Presentation [Line Items]
Number of properties to be terminated			29
Wholly Owned Properties [Member] | Holdco Master Lease [Member]
Organization And Basis Of Presentation [Line Items]
Number of wholly owned properties				48
Wholly Owned Properties [Member] | Holdco Master Lease [Member] | Termination [Member]
Organization And Basis Of Presentation [Line Items]
Number of wholly owned properties				28
Wholly Owned Properties [Member] | Holdco Master Lease [Member] | Recapturing And Termination [Member]
Organization And Basis Of Presentation [Line Items]
Number of wholly owned properties				17
Wholly Owned Properties [Member] | Holdco Master Lease [Member] | Master Lease [Member] | Recapture [Member]
Organization And Basis Of Presentation [Line Items]
Right to recapture property space exercised				100.00%
Number of real estate properties wholly-owned				3
Joint Venture Properties [Member] | Holdco JV Leases [Member]
Organization And Basis Of Presentation [Line Items]
Number of properties leased				3
Joint Venture Properties [Member] | Holdco JV Leases [Member] | Termination [Member]
Organization And Basis Of Presentation [Line Items]
Number of properties leased				1
Joint Venture Properties [Member] | Holdco JV Leases [Member] | Recapturing And Termination [Member]
Organization And Basis Of Presentation [Line Items]
Number of properties leased				2
Joint Venture Properties [Member] | Sears Holdings Corporation [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities subject to ground lease | RetailFacility		1
Number of retail facilities subject to lease | RetailFacility		2
Real Estate Investment Trust [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²				33,400,000
Real Estate Investment Trust [Member] | Wholly Owned Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²				28,700,000
Number of wholly owned properties	51			184
Number of states in properties located | State				44
Real Estate Investment Trust [Member] | Joint Venture Properties [Member]
Organization And Basis Of Presentation [Line Items]
Area of real estate property (in square feet) | ft²				4,700,000
Number of states in properties located | State				14
Number of properties				28

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
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	36,897,364	35,667,521
Common shares, issued	36,897,364	35,667,521
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	1,242,536	1,322,365
Common shares, issued	1,242,536	1,322,365
Series A Preferred Shares [Member]
Common shares, outstanding	2,800,000	2,800,000
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	10,000,000	10,000,000
Preferred shares, outstanding	2,800,000	2,800,000
Preferred shares, issued	2,800,000	2,800,000
Preferred shares, liquidation preference	$ 70,000	$ 70,000

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Non-Controlling Interests

12 Months Ended

Dec. 31, 2019

Noncontrolling Interest [Abstract]

Non-Controlling Interests

Note 11 – Non-Controlling Interests

Partnership Agreement

On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership which was amended and restated on December 14, 2017.  Pursuant to this partnership agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners.

As of December 31, 2019, the Company held a 66.1% interest in the Operating Partnership and ESL held a 33.9% interest.  The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the periods presented.

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CONSOLIDATED STATEMENT OF CASH FLOWS $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (90,603)	$ (114,878)	$ (120,813)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in loss of unconsolidated joint ventures	17,994	10,448	7,788
Distributions from unconsolidated joint ventures	877	3,956	4,305
Gain on sale of real estate	(71,104)	(96,165)	(11,447)
Gain on sale of interest in unconsolidated joint venture	(6,721)		(60,302)
Change in fair value of interest rate cap		23	701
Share-based compensation	6,845	7,472	7,018
Depreciation and amortization	104,581	226,675	262,171
Amortization of deferred financing costs	434	10,322	8,719
Amortization of above and below market leases, net	(495)	(768)	(720)
Straight-line rent adjustment	(15,590)	2,825	(3,719)
Change in operating assets and liabilities
Tenants and other receivables	2,556	(256)	(4,753)
Prepaid expenses, deferred expenses and other assets	(5,149)	(9,811)	(7,877)
Accounts payable, accrued expenses and other liabilities	(8,006)	15,056	(21,462)
Net cash (used in) provided by operating activities	(57,660)	54,899	59,609
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated joint ventures	(54,193)	(27,005)	(37,993)
Distributions from unconsolidated joint ventures	1,884	10,988	10,039
Net proceeds from disposition of interest in unconsolidated joint ventures			257,373
Net proceeds from sale of real estate	140,505	210,097	50,875
Development of real estate	(387,686)	(313,555)	(243,105)
Net cash (used in) provided by investing activities	(299,490)	(119,475)	37,189
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Term Loan Facility		1,600,000
Repayment of mortgage loans payable		(1,210,561)	(50,634)
Repayment of Unsecured Term Loan		(145,000)
Proceeds from Future Funding Facility			79,998
Proceeds from Unsecured Term Loan			230,000
Repayment of Unsecured Delayed Draw Term Loan			(85,000)
Payment of deferred financing costs		(2,472)	(4,348)
Proceeds from issuance of preferred stock			70,000
Preferred stock offering costs		(113)	(3,526)
Purchase of shares related to stock grant recipients' tax withholdings	(3,523)	(1,840)
Preferred dividends paid	(4,900)	(4,020)
Common dividends paid	(17,964)	(35,677)	(34,248)
Non-controlling interests distributions paid	(10,060)	(20,118)	(21,448)
Net cash provided by (used in) financing activities	(36,447)	180,199	180,794
Net increase (decrease) in cash, cash equivalents, and restricted cash	(393,597)	115,623	277,592
Cash, cash equivalents, and restricted cash, beginning of period	532,857	417,234	139,642
Cash, cash equivalents, and restricted cash, end of period	139,260	532,857	417,234
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	117,556	102,786	73,870
Capitalized interest	28,497	23,183	13,142
Income taxes paid	285	321	271
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	17,006	26,180	21,449
Common dividends and OP unit distributions declared and unpaid		14,027	13,968
Preferred dividends declared and unpaid	1,225	1,225
Decrease in real estate, net resulting from deconsolidated properties
Real estate, net	(17,237)	(156,568)	(67,616)
Tenants and other receivables, net	(2)		(814)
Lease intangible assets, net	(26)	(1,416)	(13,480)
Prepaid expenses, deferred expenses and other assets, net	(84)	(193)	(8)
Accounts payable, accrued expenses and other liabilities	6		3,612
Transfer to real estate assets held for sale	(5,275)	(3,094)
Transfer of below market asset to right of use asset	(11,005)
Recording of right of use assets	19,373
Recording of lease liabilities	(8,368)
Property delivered in exchange	(2,075)
Property received in exchange	11,326
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	139,260	532,857	241,569
Restricted cash	0	0	175,665
Cash, cash equivalents, and restricted cash, end of period	$ 139,260	$ 532,857	$ 417,234

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Lease Intangible Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Real Estate [Abstract]

Lease Intangible Assets and Liabilities

Note 3 – 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 $68.2 million and $10.6 million, respectively, as of December 31, 2019, and $123.7 million and $12.3 million, respectively, as of December 31, 2018.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): 

December 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	245,745	$	(180,639	)	$	65,106
Above-market leases, net		6,625		(3,578	)		3,047
Total	$	252,370	$	(184,217	)	$	68,153

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	15,912	$	(5,264	)	$	10,648
Total	$	15,912	$	(5,264	)	$	10,648

December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.5 million, $0.9 million and $1.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.  Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

2020	$	287
2021		148
2022		118
2023		175
2024		190

Amortization of acquired below-market ground leases resulted in additional rent expense of  $0.2 million for each of the years ended December 31, 2019, 2018 and 2017. Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

2020	$	203
2021		203
2022		203
2023		203
2024		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $40.5 million, $173.1 million and $139.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

2020	$	14,396
2021		13,226
2022		12,918
2023		12,118
2024		11,574

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Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 – Income Taxes

The Company has elected to be taxed as a REIT as defined under Section 856(c) of the Code for U.S. 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 U.S. 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 U.S. federal income tax  at regular corporate rates (including for any taxable year ended on or before December 31, 2017, any applicable alternative minimum tax) and any applicable state and local income taxes.

Even if the Company qualifies for taxation as a REIT, the Company is subject to certain U.S. state, local and Puerto Rico taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed REIT taxable income. The Company’s taxable REIT subsidiaries are subject to corporate income tax.

The Company evaluated whether any uncertain tax positions existed as of December 31, 2019 and 2018 and concluded that there are no uncertain tax positions.

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Schedule III - Real Estate and Accumulated Depreciation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 663,044
Acquisition Costs, Buildings and Improvements	693,550
Costs Capitalized Subsequent to Acquisition, Land	3,960
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	757,775
Gross Amount at Which Carried at Close of Period , Land	667,004
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,451,325
Gross Amount at Which Carried at Close of Period, Total	2,118,329	$ 1,889,014	$ 1,854,043	$ 1,734,892
Accumulated Depreciation	(147,696)	$ (137,947)	$ (139,483)	$ (89,940)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	612
Gross Amount at Which Carried at Close of Period , Land	3,413
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,836
Gross Amount at Which Carried at Close of Period, Total	7,249
Accumulated Depreciation	$ (1,585)
Date Acquired	2015-07
Stand-Alone Location - 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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,767
Gross Amount at Which Carried at Close of Period , Land	2,048
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,153
Gross Amount at Which Carried at Close of Period, Total	10,201
Accumulated Depreciation	$ (1,688)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(279)
Gross Amount at Which Carried at Close of Period , Land	1,653
Gross Amount at Which Carried at Close of Period, Building and Improvements	498
Gross Amount at Which Carried at Close of Period, Total	2,151
Accumulated Depreciation	$ (75)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	(213)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	14,796
Gross Amount at Which Carried at Close of Period , Land	1,969
Gross Amount at Which Carried at Close of Period, Building and Improvements	19,847
Gross Amount at Which Carried at Close of Period, Total	21,816
Accumulated Depreciation	$ (1,600)
Date Acquired	2015-07
Kmart Plazan - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1
Gross Amount at Which Carried at Close of Period , Land	1,044
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,127
Gross Amount at Which Carried at Close of Period, Total	2,171
Accumulated Depreciation	$ (549)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	36
Gross Amount at Which Carried at Close of Period , Land	1,349
Gross Amount at Which Carried at Close of Period, Building and Improvements	905
Gross Amount at Which Carried at Close of Period, Total	2,254
Accumulated Depreciation	$ (386)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	17
Gross Amount at Which Carried at Close of Period , Land	2,385
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,941
Gross Amount at Which Carried at Close of Period, Total	10,326
Accumulated Depreciation	$ (1,585)
Date Acquired	2015-07
Stand-Alone Location - Kearney, NE [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 272
Acquisition Costs, Buildings and Improvements	483
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	7,838
Gross Amount at Which Carried at Close of Period , Land	272
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,321
Gross Amount at Which Carried at Close of Period, Total	8,593
Accumulated Depreciation	$ (546)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	66
Gross Amount at Which Carried at Close of Period , Land	2,670
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,555
Gross Amount at Which Carried at Close of Period, Total	5,225
Accumulated Depreciation	$ (1,002)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	11,308
Gross Amount at Which Carried at Close of Period , Land	6,585
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,922
Gross Amount at Which Carried at Close of Period, Total	23,507
Accumulated Depreciation	$ (2,329)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	5,119
Accumulated Depreciation	$ (1,149)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	4,113
Accumulated Depreciation	$ (592)
Date Acquired	2015-07
Stand-Alone Location - Walnutport, PA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 885
Acquisition Costs, Buildings and Improvements	3,452
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	4,337
Accumulated Depreciation	$ (1,268)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(129)
Gross Amount at Which Carried at Close of Period , Land	2,399
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,668
Gross Amount at Which Carried at Close of Period, Total	4,067
Accumulated Depreciation	$ (232)
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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	4,119
Accumulated Depreciation	$ (741)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,427
Gross Amount at Which Carried at Close of Period , Land	2,008
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,205
Gross Amount at Which Carried at Close of Period, Total	6,213
Accumulated Depreciation	$ (237)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	66
Gross Amount at Which Carried at Close of Period , Land	3,664
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,011
Gross Amount at Which Carried at Close of Period, Total	6,675
Accumulated Depreciation	$ (792)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	13,480
Gross Amount at Which Carried at Close of Period , Land	5,492
Gross Amount at Which Carried at Close of Period, Building and Improvements	15,824
Gross Amount at Which Carried at Close of Period, Total	21,316
Accumulated Depreciation	$ (701)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(278)
Gross Amount at Which Carried at Close of Period , Land	4,748
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,156
Gross Amount at Which Carried at Close of Period, Total	6,904
Accumulated Depreciation	$ (323)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	221
Gross Amount at Which Carried at Close of Period , Land	2,430
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,828
Gross Amount at Which Carried at Close of Period, Total	4,258
Accumulated Depreciation	$ (176)
Date Acquired	2015-07
Stand-Alone Location - Steger, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 589
Acquisition Costs, Buildings and Improvements	2,846
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	3,435
Accumulated Depreciation	$ (479)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(625)
Gross Amount at Which Carried at Close of Period , Land	508
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,420
Gross Amount at Which Carried at Close of Period, Total	2,928
Accumulated Depreciation	$ (330)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,899
Gross Amount at Which Carried at Close of Period , Land	1,881
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,199
Gross Amount at Which Carried at Close of Period, Total	6,080
Accumulated Depreciation	$ (378)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	285
Gross Amount at Which Carried at Close of Period , Land	957
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,509
Gross Amount at Which Carried at Close of Period, Total	3,466
Accumulated Depreciation	$ (743)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,629
Gross Amount at Which Carried at Close of Period , Land	450
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,448
Gross Amount at Which Carried at Close of Period, Total	8,898
Accumulated Depreciation	$ (1,057)
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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	3,009
Accumulated Depreciation	$ (646)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	47
Gross Amount at Which Carried at Close of Period , Land	2,107
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,603
Gross Amount at Which Carried at Close of Period, Total	4,710
Accumulated Depreciation	$ (925)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(414)
Gross Amount at Which Carried at Close of Period , Land	1,420
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,065
Gross Amount at Which Carried at Close of Period, Total	2,485
Accumulated Depreciation	$ (155)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	4,792
Gross Amount at Which Carried at Close of Period , Land	2,234
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,766
Gross Amount at Which Carried at Close of Period, Total	8,000
Accumulated Depreciation	$ (832)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	21,276
Gross Amount at Which Carried at Close of Period , Land	6,824
Gross Amount at Which Carried at Close of Period, Building and Improvements	23,471
Gross Amount at Which Carried at Close of Period, Total	30,295
Accumulated Depreciation	$ (1,779)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(318)
Gross Amount at Which Carried at Close of Period , Land	7,239
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,134
Gross Amount at Which Carried at Close of Period, Total	8,373
Accumulated Depreciation	$ (156)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,202
Gross Amount at Which Carried at Close of Period , Land	553
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,017
Gross Amount at Which Carried at Close of Period, Total	5,570
Accumulated Depreciation	$ (461)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	3,149
Accumulated Depreciation	$ (676)
Date Acquired	2015-07
Stand-Alone Location - Olean, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 249
Acquisition Costs, Buildings and Improvements	2,124
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	5,133
Gross Amount at Which Carried at Close of Period , Land	249
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,257
Gross Amount at Which Carried at Close of Period, Total	7,506
Accumulated Depreciation	$ (422)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(641)
Gross Amount at Which Carried at Close of Period , Land	1,942
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,128
Gross Amount at Which Carried at Close of Period, Total	3,070
Accumulated Depreciation	$ (154)
Date Acquired	2015-07
Kmart & 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(952)
Gross Amount at Which Carried at Close of Period , Land	1,333
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,133
Gross Amount at Which Carried at Close of Period, Total	2,466
Accumulated Depreciation	$ (154)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(630)
Gross Amount at Which Carried at Close of Period , Land	5,534
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,486
Gross Amount at Which Carried at Close of Period, Total	7,020
Accumulated Depreciation	$ (202)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,187
Gross Amount at Which Carried at Close of Period , Land	2,940
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,734
Gross Amount at Which Carried at Close of Period, Total	6,674
Accumulated Depreciation	$ (1,445)
Date Acquired	2015-07
Stand Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	(134)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,837
Gross Amount at Which Carried at Close of Period , Land	580
Gross Amount at Which Carried at Close of Period, Building and Improvements	11,360
Gross Amount at Which Carried at Close of Period, Total	11,940
Accumulated Depreciation	$ (1,860)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	4,438
Accumulated Depreciation	$ (953)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	8,525
Gross Amount at Which Carried at Close of Period , Land	6,098
Gross Amount at Which Carried at Close of Period, Building and Improvements	10,739
Gross Amount at Which Carried at Close of Period, Total	16,837
Accumulated Depreciation	$ (1,240)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	9,325
Gross Amount at Which Carried at Close of Period , Land	1,297
Gross Amount at Which Carried at Close of Period, Building and Improvements	9,963
Gross Amount at Which Carried at Close of Period, Total	11,260
Accumulated Depreciation	$ (1,547)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	2,279
Accumulated Depreciation	$ (586)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	2,707
Accumulated Depreciation	$ (763)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	5,042
Gross Amount at Which Carried at Close of Period , Land	1,603
Gross Amount at Which Carried at Close of Period, Building and Improvements	31,737
Gross Amount at Which Carried at Close of Period, Total	33,340
Accumulated Depreciation	$ (4,518)
Date Acquired	2015-07
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, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	7,830
Accumulated Depreciation	$ (1,318)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	5,840
Accumulated Depreciation	$ (1,017)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Gross Amount at Which Carried at Close of Period , Land	392
Gross Amount at Which Carried at Close of Period, Building and Improvements	896
Gross Amount at Which Carried at Close of Period, Total	1,288
Accumulated Depreciation	$ (301)
Date Acquired	2015-07
Stand-Alone Location - Kenton, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 340
Acquisition Costs, Buildings and Improvements	417
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(233)
Gross Amount at Which Carried at Close of Period , Land	340
Gross Amount at Which Carried at Close of Period, Building and Improvements	184
Gross Amount at Which Carried at Close of Period, Total	524
Accumulated Depreciation	$ (25)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Gross Amount at Which Carried at Close of Period , Land	140
Gross Amount at Which Carried at Close of Period, Building and Improvements	942
Gross Amount at Which Carried at Close of Period, Total	1,082
Accumulated Depreciation	$ (191)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,696
Gross Amount at Which Carried at Close of Period , Land	970
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,216
Gross Amount at Which Carried at Close of Period, Total	5,186
Accumulated Depreciation	$ (281)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,023
Gross Amount at Which Carried at Close of Period , Land	3,124
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,385
Gross Amount at Which Carried at Close of Period, Total	6,509
Accumulated Depreciation	$ (216)
Date Acquired	2015-07
The 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	9,766
Gross Amount at Which Carried at Close of Period , Land	3,321
Gross Amount at Which Carried at Close of Period, Building and Improvements	21,964
Gross Amount at Which Carried at Close of Period, Total	25,285
Accumulated Depreciation	$ (2,809)
Date Acquired	2015-07
Stand-Alone Location - Algona, IA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 644
Acquisition Costs, Buildings and Improvements	2,796
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	3,440
Accumulated Depreciation	$ (692)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	4,491
Accumulated Depreciation	$ (1,250)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, 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, Total	$ 4,706
Date Acquired	2015-07
Memorial City SC - Memorial, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 7,967
Acquisition Costs, Buildings and Improvements	4,625
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(812)
Gross Amount at Which Carried at Close of Period , Land	7,967
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,813
Gross Amount at Which Carried at Close of Period, Total	11,780
Accumulated Depreciation	$ (591)
Date Acquired	2015-07
Overlake Plaza - Redmond Pk, WA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,133
Acquisition Costs, Buildings and Improvements	4,133
Costs Capitalized Subsequent to Acquisition, Land	10,513
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(244)
Gross Amount at Which Carried at Close of Period , Land	15,646
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,889
Gross Amount at Which Carried at Close of Period, Total	19,535
Accumulated Depreciation	$ (1,337)
Date Acquired	2015-07
Stand-Alone Location - Cullman, AL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 947
Acquisition Costs, Buildings and Improvements	846
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	4,059
Gross Amount at Which Carried at Close of Period , Land	947
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,905
Gross Amount at Which Carried at Close of Period, Total	5,852
Accumulated Depreciation	$ (410)
Date Acquired	2015-07
Superstition Springs Center - Mesa/East, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,661
Acquisition Costs, Buildings and Improvements	2,559
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(642)
Gross Amount at Which Carried at Close of Period , Land	2,661
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,917
Gross Amount at Which Carried at Close of Period, Total	4,578
Accumulated Depreciation	$ (261)
Date Acquired	2015-07
Southridge Mall - Greendale, WI [Memeber]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,208
Acquisition Costs, Buildings and Improvements	2,340
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	14,406
Gross Amount at Which Carried at Close of Period , Land	3,208
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,746
Gross Amount at Which Carried at Close of Period, Total	19,954
Accumulated Depreciation	$ (594)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(478)
Gross Amount at Which Carried at Close of Period , Land	946
Gross Amount at Which Carried at Close of Period, Building and Improvements	439
Gross Amount at Which Carried at Close of Period, Total	1,385
Accumulated Depreciation	$ (64)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	(696)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	8,816
Gross Amount at Which Carried at Close of Period , Land	8,470
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,204
Gross Amount at Which Carried at Close of Period, Total	20,674
Accumulated Depreciation	$ (672)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(456)
Gross Amount at Which Carried at Close of Period , Land	2,468
Gross Amount at Which Carried at Close of Period, Building and Improvements	694
Gross Amount at Which Carried at Close of Period, Total	3,162
Accumulated Depreciation	$ (101)
Date Acquired	2015-07
Caguas Mall - Caguas, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 431
Acquisition Costs, Buildings and Improvements	9,362
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	9,793
Accumulated Depreciation	$ (1,604)
Date Acquired	2015-07
The Mall at Sears - Anchorage(Sur), AK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 11,517
Acquisition Costs, Buildings and Improvements	11,729
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	19,339
Gross Amount at Which Carried at Close of Period , Land	11,517
Gross Amount at Which Carried at Close of Period, Building and Improvements	31,068
Gross Amount at Which Carried at Close of Period, Total	42,585
Accumulated Depreciation	$ (2,247)
Date Acquired	2015-07
Stand-Alone Location - Chicago, IL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 905
Acquisition Costs, Buildings and Improvements	804
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(241)
Gross Amount at Which Carried at Close of Period , Land	905
Gross Amount at Which Carried at Close of Period, Building and Improvements	563
Gross Amount at Which Carried at Close of Period, Total	1,468
Accumulated Depreciation	$ (87)
Date Acquired	2015-07
University Mall - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,414
Gross Amount at Which Carried at Close of Period , Land	2,620
Gross Amount at Which Carried at Close of Period, Building and Improvements	9,404
Gross Amount at Which Carried at Close of Period, Total	12,024
Accumulated Depreciation	$ (30)
Date Acquired	2015-07
Metcalf South 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(646)
Gross Amount at Which Carried at Close of Period , Land	2,775
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,120
Gross Amount at Which Carried at Close of Period, Total	3,895
Accumulated Depreciation	$ (172)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,410
Gross Amount at Which Carried at Close of Period , Land	8,289
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,933
Gross Amount at Which Carried at Close of Period, Total	21,222
Accumulated Depreciation	$ (1,260)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(309)
Gross Amount at Which Carried at Close of Period , Land	1,866
Gross Amount at Which Carried at Close of Period, Building and Improvements	719
Gross Amount at Which Carried at Close of Period, Total	2,585
Accumulated Depreciation	$ (107)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(166)
Gross Amount at Which Carried at Close of Period , Land	6,659
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,105
Gross Amount at Which Carried at Close of Period, Total	7,764
Accumulated Depreciation	$ (160)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(521)
Gross Amount at Which Carried at Close of Period , Land	3,605
Gross Amount at Which Carried at Close of Period, Building and Improvements	641
Gross Amount at Which Carried at Close of Period, Total	4,246
Accumulated Depreciation	$ (96)
Date Acquired	2015-07
Stand Alone Location - Okla City/Sequoyah, OK [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,542
Acquisition Costs, Buildings and Improvements	2,210
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	4,631
Gross Amount at Which Carried at Close of Period , Land	1,542
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,841
Gross Amount at Which Carried at Close of Period, Total	8,383
Accumulated Depreciation	$ (539)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(510)
Gross Amount at Which Carried at Close of Period , Land	5,457
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,571
Gross Amount at Which Carried at Close of Period, Total	7,028
Accumulated Depreciation	$ (244)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(505)
Gross Amount at Which Carried at Close of Period , Land	3,513
Gross Amount at Which Carried at Close of Period, Building and Improvements	776
Gross Amount at Which Carried at Close of Period, Total	4,289
Accumulated Depreciation	$ (113)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	6,860
Accumulated Depreciation	$ (1,025)
Date Acquired	2015-07
Pacific View Mall - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	11,750
Accumulated Depreciation	$ (841)
Date Acquired	2015-07
Stand-Alone Location - Central Park, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,468
Acquisition Costs, Buildings and Improvements	1,457
Costs Capitalized Subsequent to Acquisition, Land	(1,904)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,171
Gross Amount at Which Carried at Close of Period , Land	3,564
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,628
Gross Amount at Which Carried at Close of Period, Total	11,192
Accumulated Depreciation	$ (133)
Date Acquired	2015-07
Westfield 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	9,078
Gross Amount at Which Carried at Close of Period , Land	4,848
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,293
Gross Amount at Which Carried at Close of Period, Total	17,141
Accumulated Depreciation	$ (995)
Date Acquired	2015-07
Westfield 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,348
Gross Amount at Which Carried at Close of Period , Land	3,679
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,714
Gross Amount at Which Carried at Close of Period, Total	7,393
Accumulated Depreciation	$ (587)
Date Acquired	2015-07
Boise Towne Center - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	3,676
Accumulated Depreciation	$ (641)
Date Acquired	2015-07
Valley Plaza - No 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	18,546
Gross Amount at Which Carried at Close of Period , Land	8,049
Gross Amount at Which Carried at Close of Period, Building and Improvements	21,718
Gross Amount at Which Carried at Close of Period, Total	29,767
Accumulated Depreciation	$ (1,302)
Date Acquired	2015-07
Stand-Alone Location One - Memphis/Poplar, 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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	24,740
Gross Amount at Which Carried at Close of Period , Land	2,827
Gross Amount at Which Carried at Close of Period, Building and Improvements	27,215
Gross Amount at Which Carried at Close of Period, Total	30,042
Accumulated Depreciation	$ (2,301)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(750)
Gross Amount at Which Carried at Close of Period , Land	4,141
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,286
Gross Amount at Which Carried at Close of Period, Total	5,427
Accumulated Depreciation	$ (193)
Date Acquired	2015-07
Stand-Alone Location Two - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(427)
Gross Amount at Which Carried at Close of Period , Land	2,899
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,321
Gross Amount at Which Carried at Close of Period, Total	4,220
Accumulated Depreciation	$ (180)
Date Acquired	2015-07
Westfield 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(648)
Gross Amount at Which Carried at Close of Period , Land	5,972
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,405
Gross Amount at Which Carried at Close of Period, Total	7,377
Accumulated Depreciation	$ (218)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	3,905
Accumulated Depreciation	$ (881)
Date Acquired	2015-07
Stand-Alone Location - Hicksville, NYC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 38,625
Acquisition Costs, Buildings and Improvements	19,066
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(888)
Gross Amount at Which Carried at Close of Period , Land	38,625
Gross Amount at Which Carried at Close of Period, Building and Improvements	18,178
Gross Amount at Which Carried at Close of Period, Total	56,803
Accumulated Depreciation	$ (2,821)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	12,822
Gross Amount at Which Carried at Close of Period , Land	1,846
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,000
Gross Amount at Which Carried at Close of Period, Total	17,846
Accumulated Depreciation	$ (1,589)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,016
Gross Amount at Which Carried at Close of Period , Land	1,288
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,897
Gross Amount at Which Carried at Close of Period, Total	6,185
Accumulated Depreciation	$ (399)
Date Acquired	2015-07
Manchester Center - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(920)
Gross Amount at Which Carried at Close of Period , Land	1,370
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,080
Gross Amount at Which Carried at Close of Period, Total	2,450
Accumulated Depreciation	$ (168)
Date Acquired	2015-07
Stand-Alone Location - Watchung, NYC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 6,704
Acquisition Costs, Buildings and Improvements	4,110
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	28,437
Gross Amount at Which Carried at Close of Period , Land	6,704
Gross Amount at Which Carried at Close of Period, Building and Improvements	32,547
Gross Amount at Which Carried at Close of Period, Total	39,251
Accumulated Depreciation	$ (593)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	17
Gross Amount at Which Carried at Close of Period , Land	1,664
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,306
Gross Amount at Which Carried at Close of Period, Total	2,970
Accumulated Depreciation	$ (669)
Date Acquired	2015-07
Orlando Fashion Square - Orlando Colonial, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,403
Acquisition Costs, Buildings and Improvements	3,626
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	16,046
Gross Amount at Which Carried at Close of Period , Land	4,403
Gross Amount at Which Carried at Close of Period, Building and Improvements	19,672
Gross Amount at Which Carried at Close of Period, Total	24,075
Accumulated Depreciation	$ (572)
Date Acquired	2015-07
Stand-Alone Location Two - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(1,136)
Gross Amount at Which Carried at Close of Period , Land	4,397
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,271
Gross Amount at Which Carried at Close of Period, Total	7,668
Accumulated Depreciation	$ (508)
Date Acquired	2015-07
Baybrook Mall - Friendswd/Baybrk, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 6,124
Acquisition Costs, Buildings and Improvements	2,038
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2
Gross Amount at Which Carried at Close of Period , Land	6,124
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,040
Gross Amount at Which Carried at Close of Period, Total	8,164
Accumulated Depreciation	$ (905)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	13,972
Gross Amount at Which Carried at Close of Period , Land	10,413
Gross Amount at Which Carried at Close of Period, Building and Improvements	18,732
Gross Amount at Which Carried at Close of Period, Total	29,145
Accumulated Depreciation	$ (3,477)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	7,211
Accumulated Depreciation	$ (887)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	6,500
Accumulated Depreciation	$ (1,508)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(738)
Gross Amount at Which Carried at Close of Period , Land	3,728
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,556
Gross Amount at Which Carried at Close of Period, Total	6,284
Accumulated Depreciation	$ (383)
Date Acquired	2015-07
Stand-Alone Location One - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	7,169
Accumulated Depreciation	$ (580)
Date Acquired	2015-07
Tyrone Square Mall - Tyrone Square Mall [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,381
Acquisition Costs, Buildings and Improvements	2,420
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	23,002
Gross Amount at Which Carried at Close of Period , Land	2,381
Gross Amount at Which Carried at Close of Period, Building and Improvements	25,422
Gross Amount at Which Carried at Close of Period, Total	27,803
Accumulated Depreciation	$ (2,209)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(344)
Gross Amount at Which Carried at Close of Period , Land	5,285
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,668
Gross Amount at Which Carried at Close of Period, Total	7,953
Accumulated Depreciation	$ (343)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	9,049
Accumulated Depreciation	$ (1,082)
Date Acquired	2015-07
Northwoods Mall - Chrlstn/Northwoods, SC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,576
Acquisition Costs, Buildings and Improvements	1,497
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	10,143
Gross Amount at Which Carried at Close of Period , Land	3,576
Gross Amount at Which Carried at Close of Period, Building and Improvements	11,640
Gross Amount at Which Carried at Close of Period, Total	15,216
Accumulated Depreciation	$ (621)
Date Acquired	2015-07
Park Place - Park Mall, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,207
Acquisition Costs, Buildings and Improvements	3,458
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	567
Gross Amount at Which Carried at Close of Period , Land	5,207
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,025
Gross Amount at Which Carried at Close of Period, Total	9,232
Accumulated Depreciation	$ (421)
Date Acquired	2015-07
Westfield Hialeah - Hialeah/Westland, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 9,683
Acquisition Costs, Buildings and Improvements	3,472
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,506
Gross Amount at Which Carried at Close of Period , Land	9,683
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,978
Gross Amount at Which Carried at Close of Period, Total	14,661
Accumulated Depreciation	$ (1,368)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(493)
Gross Amount at Which Carried at Close of Period , Land	1,106
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,705
Gross Amount at Which Carried at Close of Period, Total	3,811
Accumulated Depreciation	$ (420)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(902)
Gross Amount at Which Carried at Close of Period , Land	7,315
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,932
Gross Amount at Which Carried at Close of Period, Total	13,247
Accumulated Depreciation	$ (921)
Date Acquired	2015-07
Southland Mall - Miami/Cutler Rdg, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 5,219
Acquisition Costs, Buildings and Improvements	1,236
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(206)
Gross Amount at Which Carried at Close of Period , Land	5,219
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,030
Gross Amount at Which Carried at Close of Period, Total	6,249
Accumulated Depreciation	$ (155)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(780)
Gross Amount at Which Carried at Close of Period , Land	4,131
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,286
Gross Amount at Which Carried at Close of Period, Total	5,417
Accumulated Depreciation	$ (193)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(293)
Gross Amount at Which Carried at Close of Period , Land	1,022
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,073
Gross Amount at Which Carried at Close of Period, Total	2,095
Accumulated Depreciation	$ (161)
Date Acquired	2015-07
Westfield 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	4,894
Gross Amount at Which Carried at Close of Period , Land	1,650
Gross Amount at Which Carried at Close of Period, Building and Improvements	10,748
Gross Amount at Which Carried at Close of Period, Total	12,398
Accumulated Depreciation	$ (722)
Date Acquired	2015-07
Westfield Countryside - Clearwater/Cntrysd, 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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	834
Gross Amount at Which Carried at Close of Period , Land	5,852
Gross Amount at Which Carried at Close of Period, Building and Improvements	18,611
Gross Amount at Which Carried at Close of Period, Total	24,463
Accumulated Depreciation	$ (3,560)
Date Acquired	2015-07
Southland Shopping Center - Middleburg Hts, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 698
Acquisition Costs, Buildings and Improvements	1,547
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(322)
Gross Amount at Which Carried at Close of Period , Land	698
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,225
Gross Amount at Which Carried at Close of Period, Total	1,923
Accumulated Depreciation	$ (190)
Date Acquired	2015-07
Westfield Parkway - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,709
Gross Amount at Which Carried at Close of Period , Land	10,573
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,592
Gross Amount at Which Carried at Close of Period, Total	15,165
Accumulated Depreciation	$ (288)
Date Acquired	2015-07
Macomb Mall - Roseville, MI [Mmeber]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,286
Acquisition Costs, Buildings and Improvements	4,778
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	11,557
Gross Amount at Which Carried at Close of Period , Land	3,286
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,335
Gross Amount at Which Carried at Close of Period, Total	19,621
Accumulated Depreciation	$ (2,583)
Date Acquired	2015-07
Stand-Alone Location - 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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(1,041)
Gross Amount at Which Carried at Close of Period , Land	5,647
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,900
Gross Amount at Which Carried at Close of Period, Total	7,547
Accumulated Depreciation	$ (279)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(977)
Gross Amount at Which Carried at Close of Period , Land	7,854
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,665
Gross Amount at Which Carried at Close of Period, Total	11,519
Accumulated Depreciation	$ (550)
Date Acquired	2015-07
Eastridge Mall - San Jose-Eastridge, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,531
Acquisition Costs, Buildings and Improvements	2,356
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(805)
Gross Amount at Which Carried at Close of Period , Land	1,531
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,551
Gross Amount at Which Carried at Close of Period, Total	3,082
Accumulated Depreciation	$ (233)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	(815)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	5,719
Gross Amount at Which Carried at Close of Period , Land	7,139
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,370
Gross Amount at Which Carried at Close of Period, Total	15,509
Accumulated Depreciation	$ (1,263)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(418)
Gross Amount at Which Carried at Close of Period , Land	3,168
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,435
Gross Amount at Which Carried at Close of Period, Total	5,603
Accumulated Depreciation	$ (378)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(823)
Gross Amount at Which Carried at Close of Period , Land	6,933
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,686
Gross Amount at Which Carried at Close of Period, Total	8,619
Accumulated Depreciation	$ (245)
Date Acquired	2015-07
Sunrise Mall - Citrus Hts-Sunrise, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,778
Acquisition Costs, Buildings and Improvements	2,088
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(775)
Gross Amount at Which Carried at Close of Period , Land	3,778
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,313
Gross Amount at Which Carried at Close of Period, Total	5,091
Accumulated Depreciation	$ (197)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	17,835
Gross Amount at Which Carried at Close of Period , Land	11,476
Gross Amount at Which Carried at Close of Period, Building and Improvements	23,058
Gross Amount at Which Carried at Close of Period, Total	34,534
Accumulated Depreciation	$ (1,852)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	12,496
Accumulated Depreciation	$ (1,615)
Date Acquired	2015-07
Greenbrier Mall - Chspk/Greenbrier, VA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 4,236
Acquisition Costs, Buildings and Improvements	1,700
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(482)
Gross Amount at Which Carried at Close of Period , Land	4,236
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,218
Gross Amount at Which Carried at Close of Period, Total	5,454
Accumulated Depreciation	$ (177)
Date Acquired	2015-07
Westfield Sarasota - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	6,120
Accumulated Depreciation	$ (947)
Date Acquired	2015-07
Town Center at Boca Raton - Boca Raton, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 16,089
Acquisition Costs, Buildings and Improvements	7,480
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(515)
Gross Amount at Which Carried at Close of Period , Land	16,089
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,965
Gross Amount at Which Carried at Close of Period, Total	23,054
Accumulated Depreciation	$ (1,011)
Date Acquired	2015-07
Aventura Mall - Miami, FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 13,264
Acquisition Costs, Buildings and Improvements	61,577
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(61,520)
Gross Amount at Which Carried at Close of Period , Land	13,264
Gross Amount at Which Carried at Close of Period, Building and Improvements	57
Gross Amount at Which Carried at Close of Period, Total	13,321
Accumulated Depreciation	$ (52)
Date Acquired	2015-07
Meadows Mall - Las Vegas(Meadows), NV [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,354
Acquisition Costs, Buildings and Improvements	1,879
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,777
Gross Amount at Which Carried at Close of Period , Land	3,354
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,656
Gross Amount at Which Carried at Close of Period, Total	8,010
Accumulated Depreciation	$ (219)
Date Acquired	2015-07
Northridge Center - 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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	7,038
Accumulated Depreciation	$ (1,233)
Date Acquired	2015-07
Newpark 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(660)
Gross Amount at Which Carried at Close of Period , Land	4,312
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,608
Gross Amount at Which Carried at Close of Period, Total	6,920
Accumulated Depreciation	$ (379)
Date Acquired	2015-07
Desert Sky Mall - Phoenix-Desert Sky, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,605
Acquisition Costs, Buildings and Improvements	2,448
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	5,053
Accumulated Depreciation	$ (860)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	4,921
Accumulated Depreciation	$ (1,081)
Date Acquired	2015-07
Miami International Mall - Doral(Miami), FL [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 9,214
Acquisition Costs, Buildings and Improvements	2,654
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(600)
Gross Amount at Which Carried at Close of Period , Land	9,214
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,054
Gross Amount at Which Carried at Close of Period, Total	11,268
Accumulated Depreciation	$ (298)
Date Acquired	2015-07
Louis Joliet 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	5,665
Accumulated Depreciation	$ (1,488)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	20,351
Gross Amount at Which Carried at Close of Period , Land	7,617
Gross Amount at Which Carried at Close of Period, Building and Improvements	22,416
Gross Amount at Which Carried at Close of Period, Total	30,033
Accumulated Depreciation	$ (477)
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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	4,617
Accumulated Depreciation	$ (420)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(380)
Gross Amount at Which Carried at Close of Period , Land	1,783
Gross Amount at Which Carried at Close of Period, Building and Improvements	594
Gross Amount at Which Carried at Close of Period, Total	2,377
Accumulated Depreciation	$ (86)
Date Acquired	2015-07
Greece Ridge Center - Rochester-Greece, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,082
Acquisition Costs, Buildings and Improvements	1,560
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(380)
Gross Amount at Which Carried at Close of Period , Land	3,082
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,180
Gross Amount at Which Carried at Close of Period, Total	4,262
Accumulated Depreciation	$ (171)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	13,643
Gross Amount at Which Carried at Close of Period , Land	10,873
Gross Amount at Which Carried at Close of Period, Building and Improvements	15,134
Gross Amount at Which Carried at Close of Period, Total	26,007
Accumulated Depreciation	$ (589)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	(796)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(3,382)
Gross Amount at Which Carried at Close of Period , Land	2,451
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,094
Gross Amount at Which Carried at Close of Period, Total	4,545
Accumulated Depreciation	$ (6)
Date Acquired	2015-07
Eastview Mal - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(397)
Gross Amount at Which Carried at Close of Period , Land	4,144
Gross Amount at Which Carried at Close of Period, Building and Improvements	994
Gross Amount at Which Carried at Close of Period, Total	5,138
Accumulated Depreciation	$ (149)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	(1,453)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	15,368
Gross Amount at Which Carried at Close of Period , Land	1,711
Gross Amount at Which Carried at Close of Period, Building and Improvements	18,226
Gross Amount at Which Carried at Close of Period, Total	19,937
Accumulated Depreciation	$ (976)
Date Acquired	2015-07
Moreno Valley Mall at Towngate - Moreno Vly, CA [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,898
Acquisition Costs, Buildings and Improvements	3,407
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(751)
Gross Amount at Which Carried at Close of Period , Land	3,898
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,656
Gross Amount at Which Carried at Close of Period, Total	6,554
Accumulated Depreciation	$ (362)
Date Acquired	2015-07
Jefferson Valley Mall - Yorktown Hts, NY [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,584
Acquisition Costs, Buildings and Improvements	1,569
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(529)
Gross Amount at Which Carried at Close of Period , Land	3,584
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,040
Gross Amount at Which Carried at Close of Period, Total	4,624
Accumulated Depreciation	$ (149)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	6,471
Gross Amount at Which Carried at Close of Period , Land	3,190
Gross Amount at Which Carried at Close of Period, Building and Improvements	8,776
Gross Amount at Which Carried at Close of Period, Total	11,966
Accumulated Depreciation	$ (1,645)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(819)
Gross Amount at Which Carried at Close of Period , Land	444
Gross Amount at Which Carried at Close of Period, Building and Improvements	641
Gross Amount at Which Carried at Close of Period, Total	1,085
Accumulated Depreciation	$ (96)
Date Acquired	2015-07
Plaza Carolina Mall - Carolina, PR [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 611
Acquisition Costs, Buildings and Improvements	8,640
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	9,251
Accumulated Depreciation	$ (1,726)
Date Acquired	2015-07
Dayton Mall - Dayton Mall, OH [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,650
Acquisition Costs, Buildings and Improvements	1,223
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,360
Gross Amount at Which Carried at Close of Period , Land	2,650
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,583
Gross Amount at Which Carried at Close of Period, Total	6,233
Accumulated Depreciation	$ (273)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(378)
Gross Amount at Which Carried at Close of Period , Land	1,503
Gross Amount at Which Carried at Close of Period, Building and Improvements	667
Gross Amount at Which Carried at Close of Period, Total	2,170
Accumulated Depreciation	$ (91)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(650)
Gross Amount at Which Carried at Close of Period , Land	2,441
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,331
Gross Amount at Which Carried at Close of Period, Total	3,772
Accumulated Depreciation	$ (200)
Date Acquired	2015-07
Westfield 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
Costs Capitalized Subsequent to Acquisition, Land	(542)
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(167)
Gross Amount at Which Carried at Close of Period , Land	4,931
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,538
Gross Amount at Which Carried at Close of Period, Total	6,469
Accumulated Depreciation	$ (610)
Date Acquired	2015-07
Stand-Alone Location - Phoenix , AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 568
Acquisition Costs, Buildings and Improvements	1,088
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	13
Gross Amount at Which Carried at Close of Period , Land	568
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,101
Gross Amount at Which Carried at Close of Period, Total	1,669
Accumulated Depreciation	$ (632)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,039
Gross Amount at Which Carried at Close of Period , Land	2,135
Gross Amount at Which Carried at Close of Period, Building and Improvements	6,787
Gross Amount at Which Carried at Close of Period, Total	8,922
Accumulated Depreciation	$ (896)
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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	7,854
Accumulated Depreciation	$ (1,205)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,560
Gross Amount at Which Carried at Close of Period , Land	4,583
Gross Amount at Which Carried at Close of Period, Building and Improvements	3,895
Gross Amount at Which Carried at Close of Period, Total	8,478
Accumulated Depreciation	$ (1,030)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	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
Gross Amount at Which Carried at Close of Period, Total	3,043
Accumulated Depreciation	$ (525)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	10,966
Accumulated Depreciation	$ (1,379)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(401)
Gross Amount at Which Carried at Close of Period , Land	1,485
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,195
Gross Amount at Which Carried at Close of Period, Total	2,680
Accumulated Depreciation	$ (179)
Date Acquired	2015-07
Town Center Mall 81 - 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
Costs Capitalized Subsequent to Acquisition, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	6,602
Accumulated Depreciation	$ (638)
Date Acquired	2015-07
Stand-Alone Location - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(515)
Gross Amount at Which Carried at Close of Period , Land	2,462
Gross Amount at Which Carried at Close of Period, Building and Improvements	762
Gross Amount at Which Carried at Close of Period, Total	3,224
Accumulated Depreciation	$ (119)
Date Acquired	2015-07
Stand-Alone Location - Houston, TX [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 6,114
Acquisition Costs, Buildings and Improvements	1,515
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(525)
Gross Amount at Which Carried at Close of Period , Land	6,114
Gross Amount at Which Carried at Close of Period, Building and Improvements	990
Gross Amount at Which Carried at Close of Period, Total	7,104
Accumulated Depreciation	$ (132)
Date Acquired	2015-07
Kentucky Oaks Mall - 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	9,151
Gross Amount at Which Carried at Close of Period , Land	1,022
Gross Amount at Which Carried at Close of Period, Building and Improvements	12,019
Gross Amount at Which Carried at Close of Period, Total	13,041
Accumulated Depreciation	$ (1,037)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(457)
Gross Amount at Which Carried at Close of Period , Land	2,833
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,740
Gross Amount at Which Carried at Close of Period, Total	4,573
Accumulated Depreciation	$ (245)
Date Acquired	2015-07
Prescott Gateway - Prescott, AZ [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 1,071
Acquisition Costs, Buildings and Improvements	835
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(305)
Gross Amount at Which Carried at Close of Period , Land	1,071
Gross Amount at Which Carried at Close of Period, Building and Improvements	530
Gross Amount at Which Carried at Close of Period, Total	1,601
Accumulated Depreciation	$ (68)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	2,982
Gross Amount at Which Carried at Close of Period, Building and Improvements	45,282
Gross Amount at Which Carried at Close of Period, Total	45,282
Accumulated Depreciation	$ (7,048)
Date Acquired	2015-07
Merced Mall - Merced Mall [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 2,534
Acquisition Costs, Buildings and Improvements	1,604
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(634)
Gross Amount at Which Carried at Close of Period , Land	2,534
Gross Amount at Which Carried at Close of Period, Building and Improvements	970
Gross Amount at Which Carried at Close of Period, Total	3,504
Accumulated Depreciation	$ (146)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	7,102
Gross Amount at Which Carried at Close of Period , Land	9,853
Gross Amount at Which Carried at Close of Period, Building and Improvements	21,887
Gross Amount at Which Carried at Close of Period, Total	31,740
Accumulated Depreciation	$ (3,722)
Date Acquired	2015-07
West Towne Mall - Madison-West, WI [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 3,053
Acquisition Costs, Buildings and Improvements	2,130
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	14,789
Gross Amount at Which Carried at Close of Period , Land	3,053
Gross Amount at Which Carried at Close of Period, Building and Improvements	16,919
Gross Amount at Which Carried at Close of Period, Total	19,972
Accumulated Depreciation	$ (1,011)
Date Acquired	2015-07
The 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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	3,557
Gross Amount at Which Carried at Close of Period , Land	1,458
Gross Amount at Which Carried at Close of Period, Building and Improvements	7,717
Gross Amount at Which Carried at Close of Period, Total	9,175
Accumulated Depreciation	$ (1,086)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	1,731
Gross Amount at Which Carried at Close of Period , Land	1,956
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,211
Gross Amount at Which Carried at Close of Period, Total	6,167
Accumulated Depreciation	$ (713)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(739)
Gross Amount at Which Carried at Close of Period , Land	3,934
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,636
Gross Amount at Which Carried at Close of Period, Total	6,570
Accumulated Depreciation	$ (383)
Date Acquired	2015-07
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(461)
Gross Amount at Which Carried at Close of Period , Land	3,227
Gross Amount at Which Carried at Close of Period, Building and Improvements	1,153
Gross Amount at Which Carried at Close of Period, Total	4,380
Accumulated Depreciation	$ (167)
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	219
Gross Amount at Which Carried at Close of Period , Land	1,204
Gross Amount at Which Carried at Close of Period, Building and Improvements	728
Gross Amount at Which Carried at Close of Period, Total	1,932
Accumulated Depreciation	$ (44)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	462
Gross Amount at Which Carried at Close of Period , Land	1,477
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,163
Gross Amount at Which Carried at Close of Period, Total	3,640
Accumulated Depreciation	$ (795)
Date Acquired	2015-07
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, Land	0
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
Gross Amount at Which Carried at Close of Period, Total	8,756
Accumulated Depreciation	$ (1,463)
Date Acquired	2015-07
Kickapoo Corners - Springfield, MO [Mwember]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Acquisition Costs, Land	$ 922
Acquisition Costs, Buildings and Improvements	2,050
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	47
Gross Amount at Which Carried at Close of Period , Land	922
Gross Amount at Which Carried at Close of Period, Building and Improvements	2,097
Gross Amount at Which Carried at Close of Period, Total	3,019
Accumulated Depreciation	$ (611)
Date Acquired	2015-07
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, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	423
Gross Amount at Which Carried at Close of Period , Land	3,869
Gross Amount at Which Carried at Close of Period, Building and Improvements	4,810
Gross Amount at Which Carried at Close of Period, Total	8,679
Accumulated Depreciation	$ (887)
Date Acquired	2015-07
Construction in Progress [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Costs Capitalized Subsequent to Acquisition, Land	$ 0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	338,672
Gross Amount at Which Carried at Close of Period, Building and Improvements	338,672
Gross Amount at Which Carried at Close of Period, Total	338,672
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
Costs Capitalized Subsequent to Acquisition, Land	0
Costs Capitalized Subsequent to Acquisition, Buildings and Improvements	(722)
Gross Amount at Which Carried at Close of Period , Land	4,493
Gross Amount at Which Carried at Close of Period, Building and Improvements	5,021
Gross Amount at Which Carried at Close of Period, Total	9,514
Accumulated Depreciation	$ (753)
Date Acquired	2015-07

XML

Leases - Summary of Termination and Redevelopement Properties (Detail)		12 Months Ended
		Dec. 31, 2019 ft² Property	Dec. 31, 2018 Property
Property Subject to or Available for Operating Lease [Line Items]
Area of real estate property (in square feet) | ft²		9,232
Number of Properties Classified		2	1
Lease Terminations [Member]
Property Subject to or Available for Operating Lease [Line Items]
Area of real estate property (in square feet) | ft²		16,060
Number of Properties Classified		116
Number of Properties Redeveloped by the Company		46
Number of Properties Sold by the Company		24
Lease Terminations [Member] | Master Lease [Member] | Holdco [Member] | November 2019 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2019-11
Termination Date		2020-03
Area of real estate property (in square feet) | ft²		4,332
Number of Properties Classified		29
Number of Properties Redeveloped by the Company		7
Number of Properties Sold by the Company		1
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | August 2018 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2018-08
Termination Date		2018-12
Area of real estate property (in square feet) | ft²		1,605
Number of Properties Classified		13
Number of Properties Redeveloped by the Company		6
Number of Properties Sold by the Company		3
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | June 2018 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2018-06
Termination Date	[1]	2018-11
Area of real estate property (in square feet) | ft²		1,218
Number of Properties Classified		9
Number of Properties Redeveloped by the Company		6
Number of Properties Sold by the Company		1
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | April 2018 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2018-04
Termination Date		2018-08
Area of real estate property (in square feet) | ft²		1,494
Number of Properties Classified		9
Number of Properties Redeveloped by the Company		4
Number of Properties Sold by the Company		1
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | June 2017 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2017-06
Termination Date	[2]	2017-10
Area of real estate property (in square feet) | ft²		3,812
Number of Properties Classified		20
Number of Properties Redeveloped by the Company		8
Number of Properties Sold by the Company		4
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | January 2017 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2017-01
Termination Date		2017-04
Area of real estate property (in square feet) | ft²		1,872
Number of Properties Classified		19
Number of Properties Redeveloped by the Company		7
Number of Properties Sold by the Company		8
Lease Terminations [Member] | Master Lease [Member] | Sears Holdings Corporation [Member] | September 2016 [Member]
Property Subject to or Available for Operating Lease [Line Items]
Notice Date		2016-09
Termination Date		2017-01
Area of real estate property (in square feet) | ft²		1,727
Number of Properties Classified		17
Number of Properties Redeveloped by the Company		8
Number of Properties Sold by the Company		6

[1] Two properties were terminated in October 2018.

[2] One property was terminated in November 2017 and another one was terminated in January 2018.

XML

Debt - Additional Information (Detail) - USD ($)						12 Months Ended
	Oct. 23, 2019	Jul. 31, 2018	Dec. 27, 2017	May 24, 2017	Feb. 23, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jul. 07, 2015
Debt Instrument [Line Items]
Debt instrument, base annual interest rate						6.50%
interest expenses	$ 5,000,000.0					$ 94,519,000	$ 90,020,000	$ 70,112,000
Debt instrument, interest rate terms						The principal amount of loans outstanding under the Unsecured Delayed Draw Term Loan, prior to its repayment, bore a base annual interest rate of 6.50%.
Mortgage Loans and Future Funding Facility [Member]
Debt Instrument [Line Items]
Principal amount outstanding						$ 0
Term Loan Facility [Member] | Berkshire Hathaway [Member]
Debt Instrument [Line Items]
Date of senior secured term loan agreement		Jul. 31, 2018
Principal amount outstanding		$ 2,000,000,000.0				$ 1,600,000,000
Line of credit, maturity date						Jul. 31, 2023
Minimum rental income to achieve from tenants on annual basis to access incremental funding facility		200,000,000
Minimum rental income to achieve from tenants for succeeding four consecutive fiscal quarters to access incremental funding facility		200,000,000
Minimum net worth required for loan documentation		$ 1,200,000,000
Default interest rate on overdue amounts excess of base interest rate		2.00%
Debt issuance costs		$ 2,100,000
Unamortized debt issuance costs						$ 1,500,000
Term Loan Facility [Member] | Berkshire Hathaway [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio for each fiscal quarter till June 30, 2021		1.00%
Fixed charge coverage ratio for each fiscal quarter after June 30, 2021		1.20%
Unencumbered fixed charge coverage ratio for each fiscal quarter till June 30, 2021		1.05%
Unencumbered fixed charge coverage ratio to each fiscal quarter after June 30, 2021		1.30%
Term Loan Facility [Member] | Berkshire Hathaway [Member] | Maximum [Member]
Debt Instrument [Line Items]
Unencumbered fixed charge coverage ratio		60.00%
Maximum leverage ratio		65.00%
Term Loan Facility [Member] | Berkshire Hathaway [Member] | Initial Funding [Member]
Debt Instrument [Line Items]
Principal amount outstanding		$ 1,600,000,000
Debt instrument, base annual interest rate		7.00%
Term Loan Facility [Member] | Berkshire Hathaway [Member] | Incremental Funding Facility [Member]
Debt Instrument [Line Items]
Principal amount outstanding		$ 400,000,000
Debt instrument, base annual interest rate		1.00%
Mortgage Loans [Member] | Mortgage Loans over $1,000,000 [Member]
Debt Instrument [Line Items]
Expiration date						Jul. 31, 2019
Interest rate description						Borrowings under the Mortgage Loans bore interest at the London Interbank Offered Rates (“LIBOR”) plus, as of July 31, 2018, a weighted-average spread of 485 basis points; payments were made monthly on an interest-only basis.
Basis spread on variable rate		4.85%
Frequency of interest payment						monthly
Mortgage Loans [Member] | Term Loans [Member] | Mortgage Loans over $1,000,000 [Member]
Debt Instrument [Line Items]
Loan, face amount									$ 1,161,000,000
Mortgage Loans [Member] | Future Funding Facility [Member]
Debt Instrument [Line Items]
Debt issuance costs						$ 22,300,000
Unamortized debt issuance costs						0	0
Mortgage Loans [Member] | Future Funding Facility [Member] | Mortgage Loans over $1,000,000 [Member]
Debt Instrument [Line Items]
Loan, face amount									$ 100,000,000
Weighted average interest rates								6.03%
Unsecured Delayed Draw Term Loan [Member]
Debt Instrument [Line Items]
Line of credit, maturity date					Dec. 31, 2017
Line of credit facility, maximum					$ 200,000,000
Amount outstanding at termination						85,000,000
Unsecured Delayed Draw Term Loan [Member] | Operating Partnership [Member]
Debt Instrument [Line Items]
Principal amount outstanding					200,000,000
Upfront commitment fee					$ 1,000,000.0
Additional and final commitment fee paid				$ 1,000,000.0
Unsecured Term Loan [Member]
Debt Instrument [Line Items]
Principal amount outstanding			$ 200,000,000			$ 0
Line of credit, maturity date						Dec. 31, 2018
Debt instrument, base annual interest rate						6.75%
Debt issuance costs		$ 1,800,000
Unamortized debt issuance costs						$ 0	$ 0
Line of credit facility, maximum						$ 200,000,000
Debt instrument, interest rate terms						The principal amount of loans outstanding under the Unsecured Term Loan bore a base annual interest rate of 6.75%.
Line of credit facility, current funding						$ 85,000,000
Additional Incremental loans						55,000,000
Line of credit facility, fee percentage			1.00%
Unsecured Term Loan [Member] | Empyrean Capital Partners, L.P. [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum						145,000,000
Line of credit facility, current funding						$ 60,000,000

XML

Share Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	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	$ 7.4	$ 9.3
Unrecognized compensation costs, weighted average expected recognition period	1 year 7 months 6 days	1 year 10 months 24 days
Restricted Share [Member] | General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized		$ 6.8	$ 7.5	$ 7.0
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

XML

Related Party Disclosure - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Schedule of Other Related Party Transactions [Line Items]
Property development expenditures receivable	$ 54,470	$ 36,926
Unconsolidated Joint Ventures [Member]
Schedule of Other Related Party Transactions [Line Items]
Percentage of fees for service performed on revenue earned from management and other fee income	100.00%
Property development expenditures receivable	$ 9,700	$ 2,100
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	33.90%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | Class A Common Shares [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	2.40%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | Class B Non-Economic Common Shares [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party	100.00%

XML

Shareholders' Equity - Summary of Dividends Reflected for U.S. Federal Income Tax Purposes (Detail) - $ / shares					12 Months Ended
		Feb. 25, 2019	Jul. 24, 2018	Feb. 20, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividends Payable [Line Items]
Total					$ 0.25	$ 1.00	$ 1.00
Class A and Class C Common Share [Member]
Dividends Payable [Line Items]
Total		$ 0.25	$ 0.25	$ 0.25	0.25	1.00	1.00
Class A and Class C Common Share [Member] | Federal Income Tax [Member] | Dividend Declared [Member]
Dividends Payable [Line Items]
Ordinary income						0.01	0.53
Capital gain distributions					0	0.35	0.47
Return of capital					0.50	0.39	0
Dividends reallocation	[1]				(0.25)	0.25	0
Total					$ 0.25	$ 1.00	$ 1.00

[1] In 2018, the fourth quarter dividend of 2018 declared on October 23, 2018 was allocated to the 2019 tax year.

XML

Investments in Unconsolidated Joint Ventures - Summary of Combined Financial Data of Unconsolidated Joint Ventures (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Land	$ 336,739	$ 321,853
Buildings and improvements	517,068	508,302
Accumulated depreciation	(86,496)	(72,239)
Investment in real estate, gross	767,311	757,916
Construction in progress	177,028	78,227
Net investment in real estate	944,339	836,143
Cash and cash equivalents	27,977	14,741
Tenant and other receivables, net	3,113	5,220
Other assets, net	26,051	38,285
Total assets	1,001,480	894,389
LIABILITIES AND MEMBERS' INTERESTS
Mortgage loans payable, net	14,218	10,406
Accounts payable, accrued expenses and other liabilities	89,110	71,791
Total liabilities	103,328	82,197
Members Interest
Additional paid in capital	934,120	833,168
Retained earnings	(35,968)	(20,976)
Total members interest	898,152	812,192
Total liabilities and members interest	1,001,480	894,389
EQUITY IN INCOME OF UNCONSOLIDATED JOINT VENTURES
Total revenue	31,470	48,455	$ 58,264
Property operating expenses	(11,385)	(9,357)	(11,358)
Depreciation and amortization	(60,745)	(31,676)	(47,948)
Operating income (loss)	(40,660)	7,422	(1,042)
Other expenses	(2,049)	(28,317)	(14,533)
Gain on sale of interests in unconsolidated joint ventures	6,721		60,302
Net (loss) income	(35,988)	(20,895)	(15,575)
Equity in (loss) income of unconsolidated joint ventures	$ (17,994)	$ (10,448)	$ (7,788)

XML

Investments in Unconsolidated Joint Ventures - Summary of Company's Investments in Unconsolidated Joint Ventures (Detail)		12 Months Ended
	Nov. 03, 2017 Property	Dec. 31, 2019 ft² Property
Income Statement Equity Method Investments [Line Items]
Number of properties		28
Total GLA | ft²		4,855,600
Brookfield Properties Retail I [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		4
Total GLA | ft²		598,200
Brookfield Properties Retail II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		5
Total GLA | ft²		1,168,000
The Macerich Company [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		9
Total GLA | ft²		1,572,000
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties	10	5
Total GLA | ft²		872,200
Invesco Real Estate [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.10%
Number of properties		1
Total GLA | ft²		96,400
Invesco Real Estate II [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		1
Total GLA | ft²		226,200
First Washington Realty [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		1
Total GLA | ft²		163,600
Greenberg Gibbons [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		1
Total GLA | ft²		159,000
RD Management [Member]
Income Statement Equity Method Investments [Line Items]
Seritage % Ownership		50.00%
Number of properties		1

XML

Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (unaudited)

Note 15 – Quarterly Financial Information (unaudited)

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

	2019												2018
	First			Second			Third			Fourth			First		Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter			Quarter		Quarter			Quarter			Quarter
Total revenue	$	43,860		$	40,511		$	47,628		$	36,634		$	53,777	$	49,270		$	56,593		$	55,114
Total expenses		56,404			47,952			50,349			69,750			61,147		74,083			76,802			120,839
Net income (loss)		(10,894	)		(25,885	)		(16,482	)		(37,342	)		16,201		(10,602	)		(34,744	)		(85,733	)
Net income (loss) attributable to    common shareholders		(8,192	)		(18,128	)		(12,103	)		(25,874	)		9,100		(7,996	)		(23,441	)		(56,038	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Basic		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Net income (loss) per share attributable    to Class A and Class C common    shareholders - Diluted		(0.23	)		(0.50	)		(0.33	)		(0.70	)		0.26		(0.23	)		(0.66	)		(1.57	)
Weighted average Class A and Class C    common shares outstanding - Basic		35,671			36,291			36,829			36,846			35,414		35,483			35,598			35,589
Weighted average Class A and Class C    common shares outstanding - Diluted		35,671			36,291			36,829			36,846			35,501		35,483			35,598			35,589

Certain of the above selected quarterly financial data includes significant depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles as a result of the recapture of space from, or the termination of space by, Holdco and Sears Holdings. Certain of the above selected quarterly financial data also includes gains on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.  The following table sets forth these selected quarterly financial data for the Company (in thousands, except per share amounts):

	2019								2018
	First		Second		Third		Fourth		First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Depreciation and amortization expense (1)	$	10,800	$	2,059	$	4,286	$	18,548	$	11,016	$	26,758	$	31,444	$	78,311
Gains on the sale of interests (2)		21,260		11,613		12,445		25,786		41,831		34,187		17,401		2,745

(1) Denotes depreciation and amortization expense related to the demolition of certain buildings for redevelopment and the accelerated amortization of certain lease intangibles.

(2) Denotes gains on the on the sale of interests in unconsolidated joint ventures and gains on the sale of real estate.

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Lease Intangible Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Finite-Lived Intangible Assets [Line Items]

Summary of Lease Intangible Assets

The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

December 31, 2019
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	245,745	$	(180,639	)	$	65,106
Above-market leases, net		6,625		(3,578	)		3,047
Total	$	252,370	$	(184,217	)	$	68,153

December 31, 2018
	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	266,897	$	(158,235	)	$	108,662
Below-market ground leases, net		11,766		(710	)		11,056
Above-market leases, net		8,338		(4,400	)		3,938
Total	$	287,001	$	(163,345	)	$	123,656

Summary of Lease Intangible Liabilities

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	15,912	$	(5,264	)	$	10,648
Total	$	15,912	$	(5,264	)	$	10,648

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,720	$	(7,439	)	$	12,281
Total	$	19,720	$	(7,439	)	$	12,281

Schedule of Future Amortization for Below-Market Ground Leases

Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

2020	$	203
2021		203
2022		203
2023		203
2024		203

Above-Market Leases, Net [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Future Amortization of Acquired Leases

Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

2020	$	287
2021		148
2022		118
2023		175
2024		190

In-Place Leases, Net [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Future Amortization of Acquired Leases

Future estimated amortization of acquired in-place leases is set forth below (in thousands):

2020	$	14,396
2021		13,226
2022		12,918
2023		12,118
2024		11,574

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2019	Feb. 21, 2020	Jun. 28, 2019
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
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 Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 1,527,000,000
Entity Interactive Data Current	Yes
Entity File Number	001-37420
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	38-3976287
Entity Address, Address Line One	500 Fifth Avenue
Entity Address, Address Line Two	Suite 1530
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10110
City Area Code	212
Local Phone Number	355-7800
Document Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of Seritage Growth Properties’ Proxy Statement for its 2020 Annual Meeting of Shareholders, to be held May 21, 2020, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Series A Cumulative Redeemable Preferred Shares [Member]
Document Information [Line Items]
Trading Symbol	SRG-PA
Title of 12(b) Security	7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share
Security Exchange Name	NYSE
Class A Common Shares [Member]
Document Information [Line Items]
Trading Symbol	SRG
Entity Common Stock, Shares Outstanding		36,902,940
Title of 12(b) Security	Class A common shares of beneficial interest, par value $0.01 per share
Security Exchange Name	NYSE
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,242,536
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

XML

CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands	Total	Class A Common Shares [Member]	Class B Common Shares [Member]	Class C Common Shares [Member]	Series A Preferred Shares [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]
Beginning balance at Dec. 31, 2016	$ 1,424,311	$ 258	$ 16	$ 58		$ 925,563	$ (121,338)	$ 619,754
Beginning balance, shares at Dec. 31, 2016		25,843,000	1,589,000	5,755,000
Net loss	(120,813)						(73,754)	(47,059)
Common dividends and distributions declared	(56,117)						(34,668)	(21,449)
Vesting of restricted share units	(13)					(13)
Vesting of restricted share units, shares		11,000
Share-based compensation	7,018					7,018
Issuance of preferred stock	66,474				$ 28	66,446
Issuance of preferred stock, shares					2,800
Share class exchanges, net		$ 27		$ 27
Share class exchanges, net, shares		2,603,554		2,604,000
Share class surrenders			$ (3)			3
Share class surrenders, shares			(260,000)
OP Unit exchanges		$ 39				117,043		(117,082)
OP Unit exchanges, shares		3,958,000
Ending balance at Dec. 31, 2017	1,320,860	$ 324	$ 13	$ 31	$ 28	1,116,060	(229,760)	434,164
Ending balance, shares at Dec. 31, 2017		32,416,000	1,329,000	3,151,000	2,800,000
Net loss	(114,878)						(73,472)	(41,406)
Common dividends and distributions declared	(56,141)						(35,997)	(20,144)
Preferred dividends declared	(4,093)						(4,093)
Vesting of restricted share units, shares		2,000
Share-based compensation	5,632					5,632
Preferred stock offering costs	(113)					(113)
Share class exchanges, net	1	$ 32		$ 31
Share class exchanges, net, shares		3,151,131		3,151,000
Share class surrenders, shares			(7,000)
OP Unit exchanges		$ 1				2,925		(2,926)
OP Unit exchanges, shares		99,000
Ending balance at Dec. 31, 2018	1,150,458	$ 357	$ 13		$ 28	1,124,504	(344,132)	369,688
Ending balance, shares at Dec. 31, 2018		35,667,521	1,322,365		2,800,000
Net loss	(90,603)						(59,397)	(31,206)
Cumulative effect of accounting change	(1,286)						(1,286)
Common dividends and distributions declared	(14,026)						(8,996)	(5,030)
Preferred dividends declared	(4,900)						(4,900)
Vesting of restricted share units	(3,523)					(3,523)
Vesting of restricted share units, shares		15,000
Share-based compensation	7,250					7,250
Share class surrenders			$ (1)			1
Share class surrenders, shares			(79,000)
OP Unit exchanges		$ 12				21,489		(21,501)
OP Unit exchanges, shares		1,214,000
Ending balance at Dec. 31, 2019	$ 1,043,370	$ 369	$ 12		$ 28	$ 1,149,721	$ (418,711)	$ 311,951
Ending balance, shares at Dec. 31, 2019		36,897,364	1,242,536		2,800,000

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Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Note 5 – Leases

On February 28, 2019, the Company and certain affiliates of Holdco executed the Holdco Master Lease which became effective on March 12, 2019 when the Bankruptcy Court issued an order approving the rejection of the Original Master Lease.  The Company analyzed this transaction under applicable accounting guidance and determined that the termination of the Original Master Lease and entering into the Holdco Master Lease should be accounted for as a modification in accordance with ASC 842.

Lease Structure

The structure of the Holdco Master Lease is consistent with the structure of the Original Master Lease in all material respects, including (i) it is a unitary, non-divisible lease as to all properties, pursuant to which the tenant’s obligations as to each property are cross-defaulted with all obligations of the tenant with respect to all other properties; (ii) it is a triple net lease with respect to all space which is leased thereunder to the tenant, subject to proportional sharing by the tenant for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by the tenant and other space occupied by other tenants in the same or other buildings, space which is recaptured pursuant to the Company’s recapture rights described below and all other space which is constructed on the properties; (iii) the tenant 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; and (iv) the tenant is generally prohibited from subleasing any space demised under the lease.

Term and Renewals

Consistent with the terms of the Original Master Lease, the Holdco Master Lease will expire in July 2025, and contains three options for five-year renewals of the term and a final option for a four-year renewal, as was the case under the Original Master Lease.

Rental Revenue

The Holdco Master Lease provides for an initial base rent at the same rates which were in place at the time the Original Master Lease was rejected. In each of the initial term and the first two renewal terms, consistent with the Original Master Lease, base rent under the Holdco Master Lease will be increased in August of each year by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, consistent with the Original Master Lease, rent will be set at the commencement of the renewal term for the Holdco Master Lease at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Holdco 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 base rent under the Holdco Master Lease will be subject to an adjustment in the form of a rent credit of up to approximately $12 million in each of the first and second years of the Holdco Master Lease.  The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018.  If any such properties are recaptured by the Company or terminated by Holdco, the base rent credit attributable to such property will no longer be applicable.  The rent credit is applicable to base rent only and Holdco is responsible for repair and maintenance charges, real property taxes, insurance and other costs and expenses associated with its occupancy of the subject properties.

Revenues from the Holdco Master Lease and the Original Master Lease for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands and excluding straight-line rental income of $0.3 million, ($4.9) million and $0.8 million, respectively.

	Year Ended December 31,
	2019		2018		2017
Fixed rental income	$	27,628	$	86,224	$	112,881
Variable rental income		23,525		65,450		70,987
Total rental income	$	51,153	$	151,674	$	183,868

Seritage Recapture Rights

The Holdco Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by the tenant at all properties (other than five specified properties) and 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 parking areas and common areas.  Upon exercise of any of these partial recapture rights the Company will generally incur, as applicable, certain costs and expenses for the separation of the recaptured space from the remaining tenant space.

Additionally, in contrast to the Original Master Lease, which permitted the Company to recapture 100% of certain properties upon payment of a specified recapture fee, the Holdco Master Lease provides the Company with the right, beginning in March 2020, to recapture 100% of the space occupied by the tenant at any of the properties included in the Holdco Master Lease (other than five

specified properties) without paying a recapture fee.  This right to recapture 100% of any property is limited to 10 properties in each year of the Holdco Master Lease term, with carry-over rights if less than 10 properties are recaptured in any given lease year.  In the event of a 100% recapture of a property (or termination of a property by Holdco that is subject to a termination fee) and any subsequent redevelopment of such property for retail purposes, Holdco has certain rights of first offer to lease space at specified predefined rates depending on the condition the space is delivered.  If the Company does not provide Holdco with a right of first offer on at least one-third of any such properties that are recaptured 100% by the Company (or terminated by Holdco with payment of a termination fee) in a given lease year, then the Company’s 100% recaptures rights are subject to payment of a recapture fee until such time as the Company has complied with the foregoing ratio.

Upon the exercise of any of its recapture rights, the Company can reconfigure and rent the recaptured space to new, diversified tenants on potentially superior terms as determined by the Company and for its own account.

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

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

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

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

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

Holdco Termination Rights

Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, beginning in March 2020, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year of the term of the Holdco Master Lease, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.  

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

The following table provides a summary of Sears Holdings’ and Holdco’s termination activity (excluding 31 properties totaling 4.3 million square feet that were rejected on March 12, 2019 as part of Sears Holdings’ bankruptcy filing):

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

(1) Two properties were terminated in October 2018.

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

As of December 31, 2019, the Company had commenced or completed redevelopment projects at 46 of the terminated properties, and sold an additional 24 of the terminated properties, and will continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears or Kmart.

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of December 31, 2019 and December 31, 2018 is approximately as follows:

(in thousands)	December 31, 2019
2020		113,265
2021		121,909
2022		124,067
2023		119,745
2024		116,607
Thereafter		1,019,054
Total Lease Payments	$	1,614,647

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

The components of lease revenues for the years ended December 31, 2019, December 31, 2018 and December 31, 2017 were as follows:

	Year Ended December 31,
(in thousands)	2019		2018		2017
Fixed rental income		104,956		140,661		154,599
Variable rental income		45,994		74,839		81,528
Total rental income	$	150,950	$	215,500	$	236,127

Lessee Disclosures

The Company has one ground lease and multiple corporate office leases which are classified as operating leases.  The Company initially recorded $8.6 million of right-of-use, or ROU, assets and lease liabilities. The Company’s ROU assets were subsequently increased by $11.0 million as a result of the reclassification of acquired below-market lease assets, net, from lease intangible assets, net, during the years ended 2019. As of December 31, 2019, the outstanding amount of ROU assets were $18.5 million.

The Company recorded rent expense related to leased corporate office space of $1.6 million, $0.7 million, and $0.7 million for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively. Such rent expense is classified within general and administrative expenses on the consolidated statements of operations.

In addition, the Company recorded ground rent expense of approximately $45 thousand for each of the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively. Such rent expense is classified within general and administrative expenses on the consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

The following table sets forth information related to the measurement of our lease liabilities as of December 31, 2019:

(dollar amounts in thousands)	As of December 31, 2019
Weighted average remaining lease term (in years)		10.54
Weighted average discount rate		7.20	%
Cash paid for operating leases	$	2,161

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

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. As of December 31, 2019 and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of December 31, 2019, the Company holds a 66.1% 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.  The Company has determined 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.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

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.

Reclassification

Upon adoption on January 1, 2019 of the new lease standard in accordance with ASC 842, tenant reimbursements for 2018 and 2017 have been reclassified to rental income in the consolidated statements of operations to conform to the 2019 financial statement presentation.

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 the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  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 real estate 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.

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:

Buildings:	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.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. 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 impairment losses were recognized for the years ended December 31, 2019, 2018 or 2017.

Real Estate Dispositions

The following table summarizes our gain on sale of real estate, net during the years ended December 31, 2019, 2018, and 2017 (in thousands):

	Year Ended December 31,
	2019		2018		2017
Contributions to unconsolidated joint ventures
Gross proceeds	$	21.7	$	232.7	$	57.5
Gain (loss) on sale of real estate, net		3.9		63.9		11.4
Dispositions to third parties
Gross proceeds	$	144.3	$	114.3	$	—
Gain (loss) on sale of real estate, net		63.7		29.5		—
Total gains on contributions and dispositions, net	$	67.6	$	93.4	$	11.4

For the year ended December 31, 2019, gain on sales on the consolidated statements of operations also includes a gain of $6.9 million related to an exchange of land parcels of approximately equal size with an adjacent land owner and a loss of $2.3 million related to the West Hartford JV revaluation as discussed in Note 4.

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of December 31, 2019, two properties were classified as held for sale with assets of $5.3 million and no liabilities, and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

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 years ended December 31, 2019, 2018 or 2017.

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, 2019 and December 31, 2018, the Company did not have any restricted cash.  Restricted cash accounts were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.   

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.  For accrued rental income related to the straight-line method of reporting rental income, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.  Any receivables that are deemed to be uncollectible are recognized as a reduction to rental income in the Company’s consolidated statements of operations.  Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental income.

Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated joint ventures. In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base 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 sheets.

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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of several factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.

Reimbursement of property operating expenses 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 expenses are incurred.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated joint ventures. Property management fee income is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.  Leasing and development fees are initially reported at the portion of fees attributable to outside ownership of the related unconsolidated joint ventures.  The Company’s share in management fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage Recapture Rights. The Company generally treats the delivery of a recapture notice as a modification of the 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, if any, is amortized over the remaining life of the 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, if any, is amortized over the remaining useful life of the asset or liability.

A 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 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 Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations 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 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 vacancy.

• 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 in July 2015, 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 was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets.  The Company had elected not to utilize hedge accounting and therefore the change in fair value was included within change in fair value of interest rate cap on the consolidated statements of operations.

During the year ended December 31, 2018, the Company terminated the interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility and as such there were no instruments as of December 31, 2019 and December 31, 2018.

For the year ended December 31, 2019, the Company did not record any gain or loss on derivatives.  For the year ended December 31, 2018 and December 31, 2017, the Company recorded a change in the fair value of the interest rate cap of ($23) thousand, and ($0.7) million, respectively.

Share-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 based on the grant date fair value of the awards. Compensation expense is recognized ratably over the vesting period for awards with time-based vesting and awards with market-based vesting conditions (e.g. total shareholder return). For awards with performance-based vesting determined by Company operating criteria, the Company recognizes compensation expense at the date the achievement of performance criteria is deemed probable for the amount 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.  The Company utilizes a third-party valuation firm to measure the grant date fair value of restricted stock unit awards with market-based criteria using the Monte Carlo model. Forfeitures are recorded on an actual basis.

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, 2019, 49 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the year ended December 31, 2019 was derived from the Holdco Master Lease.  However, in November 2019, Holdco exercised its termination rights under the Holdco Master Lease with respect to 29 stores effective as of the first quarter of 2020.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on the business, financial condition or results of operations of Holdco or another major tenant could have a material adverse effect on the Company’s business, financial condition or results of operations.  

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, 2019, the Company's portfolio of 184 Wholly Owned Properties and 28 JV Properties was diversified by location across 44 states and Puerto Rico.

Earnings 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.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings 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

The following presents Accounting Standards Updates (“ASU”) issued by Financial Accounting Standards Board (“FASB”) which have been adopted by the Company:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets	This standard provides guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach).	January 1, 2018	The Company adopted this update with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	This standard 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 2016-15 is effective, on a retrospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.	January 1, 2018	The Company adopted this standard and applied the cumulative earnings approach to classify distributions received from our equity method investees.  The adoption (i) changes our statements of cash flows so that distributions from unconsolidated joint ventures in excess of cumulative equity in earnings are now classified as inflows from investing activities for each period presented and (ii) resulted in a decrease to net cash provided by operating activities and an increase to net cash provided by investing activities of $10.0 million for the year ended December 31, 2017.
ASU 2014-09, Revenue from Contracts with Customers and the related FASB ASU Nos. 2016-12 and 2016-20	This standard provides practical expedients, technical corrections, and improvements for certain aspects of ASU 2014-09.  ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update’s core principle is that an entity should recognize 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. Companies are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. Those steps include the following: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation in the contract, and (v) recognize revenue when or as the entity satisfies a performance obligation.  The Company estimates the total transaction price, which generally includes a fixed contract price and may also include variable components. Variable components of the contract price are included in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its performance obligations.	January 1, 2018	The Company adopted this standard using the modified retrospective method. Management concluded that the majority of total revenues consist of rental income from leasing arrangements, which is specifically excluded from the standard. As of January 1, 2018, the Company began accounting for the sale of real estate properties under Subtopic 610-20 which provides for revenue recognition based on transfer of ownership.

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (“Topic 842”) ASU 2018-10, Codification Improvements ASU 2018-11, Leases, Targeted Improvements ASU 2018-20, Leases	This standard, as amended by subsequent ASUs on the topic, sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for consistent with earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.	January 1, 2019	The Company adopted this standard by electing the package of practical expedients without hindsight which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date. The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4 million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the consolidated balance sheets. Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption. The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the consolidated balance sheets.
ASU 2018-01, Leases, Land Easement Practical Expedient for Transition to Topic 842	In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately.	January 1, 2019	The Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the consolidated statements of operations for leases where the Company is the lessor. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our consolidated financial statements.

The following table represents ASUs to the FASB’s ASC that, as of the year ended December 31, 2019, are not yet effective for the Company and for which the Company has not elected early adoption, where permitted:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) ASU 2018-19, Codification improvements to Topic 326, Financial Instruments – Credit Losses	ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, requiring the use of an "expected credit loss" model and adding more disclosure requirements. ASU 2018-19 clarifies that impairment of receivables arising from operating leases should accounted for in accordance with Topic 842, Leases.	January 1, 2020	This standard is not expected to have a significant impact to our consolidated financial statements.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9 – 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 2027.

Insurance premiums are charged directly to each of the 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 Holdco Master Lease, Holdco is required to indemnify the Company from certain environmental liabilities at the Wholly Owned Properties before or during the period in which each Wholly Owned Property was leased to Holdco, including removal and remediation of all affected facilities and equipment constituting the automotive care center.  In addition, an environmental reserve was funded at the closing of the Transaction in the amount of approximately $12.0 million.  As of December 31, 2019, the balance of the environmental reserve was approximately $9.5 million.

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 discloses 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.

On April 18, 2019, at the direction of the Restructuring Sub-Committee of the Restructuring Committee of the Board of Directors of Sears Holdings, Sears Holdings, Sears, Roebuck & Co., Sears Development Co., Kmart Corporation, and Kmart of Washington, LLC filed a lawsuit (the “Litigation”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) against, among others, Edward S. Lampert, ESL Investments, Inc. and certain of its affiliates and investors, Fairholme Capital Management, L.L.C., certain members of the Sears Holdings board of directors, and the Company, the Operating Partnership, and certain of our affiliates and subsidiaries (the Company, the Operating Partnership, and certain of our affiliates and subsidiaries collectively, the “Seritage Defendants”). The Litigation is dual captioned as In re: Sears Holdings Corporation, et al., Case No. 18-23538 (RDD) and Sears Holdings Corporation et al., v. Lampert et al., Case No. 19-08250 (RDD). The Litigation alleges, among other things, that certain transactions undertaken by Sears Holdings since 2011 constituted actual and/or constructive fraudulent transfers and/or illegal dividends by Sears Holdings. The challenged transactions include the July 2015 transactions giving rise to Seritage, the execution of the Original Master Lease with Sears Holdings, and the acquisition of real estate from Sears Holdings. The Litigation alleges, among other things, that the real estate acquired by Seritage from Sears Holdings in July 2015 was worth at least $649 to $749 million more than the purchase price paid. The Litigation seeks as relief, among other things, declaratory relief, avoidance of the allegedly actual and/or constructive fraudulent transfers and either (i) rescission of the transfers of real estate from Sears Holdings to Seritage in 2015 and return of the proceeds of the transactions between Sears Holdings and Seritage, or, in the alternative, (ii) payment by Seritage to Sears Holdings of damages at least equal to the value of the transferred property.  

On October 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings and its affiliated debtors (the “Chapter 11 Plan”).  Pursuant to the terms of the Confirmation Order, upon the effective date of the Chapter Plan, a liquidating trust will be formed, and the Litigation will vest in the liquidating trust.  The Confirmation Order further provides that, prior to the effective date of the Chapter 11 Plan and the formation of the liquidating trust, the Litigation shall be controlled by five litigation designees selected by Sears Holdings and the Unsecured Creditors’ Committee (the “UCC”). For further information, refer to the Chapter 11 Plan, Confirmation Order and liquidating trust agreement, each of which has been publicly filed with the Bankruptcy Court.

On February 21, 2020, the Seritage defendants filed a partial motion to dismiss seeking dismissal of the claims in the Amended Complaint relating to the release received in the Sears Holdings derivative litigation, unjust enrichment, and equitable subordination. The Company believes that the claims against the Seritage Defendants in the Litigation are without merit and intends to defend against them vigorously.

In addition to the litigation described above, 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. As of December 31, 2019, and December 31, 2018, the Company did not record any amounts for litigation or other matters.

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Below Market Lease Net [Abstract]
Gross Liability	$ 15,912	$ 19,720
Accumulated Amortization	(5,264)	(7,439)
Balance	$ 10,648	$ 12,281

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Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	12 Months Ended
	Dec. 31, 2019
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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Share Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018:

	Year Ended December 31, 2019					Year Ended December 31, 2018
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57		245,570		$	41.33
Restricted shares granted		76,948			57.04		261,059			40.80
Restricted shares vested		(127,767	)		41.76		(99,956	)		39.04
Restricted shares forfeited		(2,992	)		45.02		(3,544	)		38.83
Unvested restricted shares at end of period		349,318		$	44.88		403,129		$	41.57

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Leases - Summary of Recapture Rights Exercised by the Company (Detail)	12 Months Ended
	Dec. 31, 2019 ft² Property
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	9,232
Number of Properties	71
Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	43	[1]
Partial Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	28	[2]
2019
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	629
Number of Properties	4
2019 | Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	3	[1]
2019 | Partial Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	1	[2]
2018
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	3,428
Number of Properties	20
2018 | Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	17	[1]
2018 | Partial Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	3	[2]
2017
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	3,302
Number of Properties	27
2017 | Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	16	[1]
2017 | Partial Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	11	[2]
2016
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	1,501
Number of Properties	17
2016 | Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	4	[1]
2016 | Partial Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	13	[2]
2015
Property Subject to or Available for Operating Lease [Line Items]
Gross leasable area | ft²	372
Number of Properties	3
2015 | Hundred Percent Recaptures
Property Subject to or Available for Operating Lease [Line Items]
Number of Properties	3	[1]

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

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

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Leases - Components of Lease Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Lessor Disclosure [Abstract]
Fixed rental income	$ 104,956	$ 140,661	$ 154,599
Variable rental income	45,994	74,839	81,528
Total rental income	$ 150,950	$ 215,500	$ 236,127

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Fair Value Measurements - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2019 USD ($) DerivativeInstrument
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of derivative instruments | DerivativeInstrument			0
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Debt obligations, fair value	$ 1,600,000		$ 1,600,000
Interest Rate Cap [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative gain (loss)	$ 23	$ 700

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Schedule III - Reconciliation of Real Estate (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation Of Carrying Amount Of Real Estate Investments Roll Forward
Balance at beginning of period	$ 1,889,014,000	$ 1,854,043,000	$ 1,734,892,000
Additions	364,970,000	318,820,000	257,933,000
Impairments	0	0	0
Dispositions	(95,270,000)	(244,815,000)	(71,117,000)
Write-offs	(40,385,000)	(39,034,000)	(67,665,000)
Balance at end of period	$ 2,118,329,000	$ 1,889,014,000	$ 1,854,043,000

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Leases - Summary of Revenue from Master Lease (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property Subject to or Available for Operating Lease [Line Items]
Fixed rental income	$ 104,956	$ 140,661	$ 154,599
Variable rental income	45,994	74,839	81,528
Total rental income	150,950	215,500	236,127
Original and Holdco Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Fixed rental income	27,628	86,224	112,881
Variable rental income	23,525	65,450	70,987
Total rental income	$ 51,153	$ 151,674	$ 183,868

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Investments in Unconsolidated Joint Ventures - Summary of Properties Contributed In Unconsolidated Joint Ventures (Parenthetical) (Detail) - USD ($)				12 Months Ended
	Mar. 29, 2019	May 18, 2018	Mar. 20, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Sep. 27, 2019
Related Party Transaction [Line Items]
Final contribution value				$ 2,300,000
Gain or loss on sale of real estate based on final contribution value				2,300,000
Contribution value				2,300,000
Gain on sale of real estate				$ 71,104,000	$ 96,165,000	$ 11,447,000
Invesco Real Estate [Member] | Santa Monica C A | Mark 302 JV [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Investment in joint venture revaluation date			Dec. 31, 2020
Final contribution value			$ 105,000,000.0
Gain or loss on sale of real estate based on final contribution value			53,800,000
Contribution value			105,000,000.0
Invesco Real Estate [Member] | Santa Monica C A | Mark 302 JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value			60,000,000.0
Gain or loss on sale of real estate based on final contribution value			8,800,000
Contribution value			$ 60,000,000.0
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Investment in joint venture revaluation date		Dec. 31, 2019
Final contribution value		$ 29,600,000
Gain or loss on sale of real estate based on final contribution value		5,800,000
Contribution value		29,600,000
Invesco Real Estate [Member] | West Hartford, CT [Member] | West Hartford JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value		20,400,000
Gain or loss on sale of real estate based on final contribution value		3,400,000
Contribution value		$ 20,400,000
Invesco Real Estate [Member] | Cockeysville, MD [Member] | Cockeysville JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Gain on sale of real estate	$ 3,800,000
Invesco Real Estate [Member] | Cockeysville, MD [Member] | Tech Ridge JV [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Final contribution value							$ 2,750,000
Contribution value							$ 2,750,000

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Lease Intangible Assets and Liabilities - Schedule of Future Amortization for Below-Market Ground Lease (Detail) $ in Thousands	Dec. 31, 2019 USD ($)
Below Market Lease Amortization Income Maturity Schedule [Abstract]
2020	$ 203
2021	203
2022	203
2023	203
2024	$ 203

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Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands						12 Months Ended
	Dec. 14, 2022	Feb. 25, 2019	Jul. 24, 2018	Feb. 20, 2018	Jul. 07, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 29, 2018	Dec. 31, 2016
Class of Stock [Line Items]
Stock issuance cost							$ 113	$ 3,526
Common shares, outstanding									0
Cash dividend declared						$ 0.25	$ 1.00	$ 1.00
Class A Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued						36,897,364	35,667,521
OP Unit exchanges, shares						1,214,577	98,923	3,958,182
Common shares, outstanding						36,897,364	35,667,521	32,416,000		25,843,000
Common shares, par value					$ 0.01	$ 0.01	$ 0.01
Class A Common Shares [Member] | Rights Offering [Member]
Class of Stock [Line Items]
Common shares, issued					22,332,037
Common shares price per share					$ 29.58
Aggregate proceeds from issuance of common shares					$ 660,600
Stock issuance cost					$ 8,200
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, issued						1,242,536
Common shares, outstanding						1,242,536
Common shares, par value					$ 0.01
Common shares surrendered						79,829
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 C Non Voting Common Shares [Member]
Class of Stock [Line Items]
Common shares, issued					6,790,635	0
Common shares price per share					$ 29.58
Aggregate proceeds from issuance of common shares					$ 200,900
Common shares, outstanding						0
Common shares, par value					$ 0.01
Series A Cumulative Redeemable Preferred Shares [Member]
Class of Stock [Line Items]
Preferred shares, issued								2,800,000
Percentage of preferred dividend rate								7.00%
Preferred shares public offering price per share								$ 25.00
Net proceeds from public offering								$ 66,400
Series A Cumulative Redeemable Preferred Shares [Member] | Scenario, Forecast [Member]
Class of Stock [Line Items]
Preferred shares redemption price per share plus any accrued and unpaid dividends	$ 25.00
Series A Cumulative Redeemable Preferred Shares [Member] | Scenario, Forecast [Member] | Maximum [Member]
Class of Stock [Line Items]
Preferred shares redemption threshold period	120 days
Class A and Class C Common Share [Member]
Class of Stock [Line Items]
Cash dividend declared		$ 0.25	$ 0.25	$ 0.25		$ 0.25	$ 1.00	$ 1.00

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Earnings per Share - Reconciliation of Net Income (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								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator - Basic and Diluted
Net loss	$ (37,342)	$ (16,482)	$ (25,885)	$ (10,894)	$ (85,733)	$ (34,744)	$ (10,602)	$ 16,201	$ (90,603)	$ (114,878)	$ (120,813)
Net loss attributable to non-controlling interests									31,206	41,406	47,059
Preferred dividends									(4,900)	(4,903)	(245)
Net loss attributable to Seritage common shareholders	$ (25,874)	$ (12,103)	$ (18,128)	$ (8,192)	$ (56,038)	$ (23,441)	$ (7,996)	$ 9,100	(64,297)	(78,375)	(73,999)
Net loss available to common shareholders - Basic and diluted									$ (64,297)	$ (78,375)	$ (73,999)
Denominator - Basic and Diluted
Weighted average common shares outstanding									36,413	35,560	33,804
Net income (loss) per share attributable to Class A and Class C common shareholders									$ (1.77)	$ (2.20)	$ (2.19)
Class A Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding									36,413	35,103	28,249
Class C Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding										457	5,555

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Earnings per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings per Share

Note 13 – 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 the 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.

	Year Ended December 31,
(in thousands except per share amounts)	2019			2018			2017
Numerator - Basic and Diluted
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Net loss attributable to non-controlling interests		31,206			41,406			47,059
Preferred dividends		(4,900	)		(4,903	)		(245	)
Net loss attributable to common shareholders	$	(64,297	)	$	(78,375	)	$	(73,999	)
Earnings allocated to unvested participating securities		—			—			—
Net loss available to common shareholders - Basic    and diluted	$	(64,297	)	$	(78,375	)	$	(73,999	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		36,413			35,103			28,249
Weighted average Class C common shares outstanding		-			457			5,555
Weighted average Class A and Class C common shares outstanding		36,413			35,560			33,804
Net income (loss) per share attributable to Class A and    Class C common shareholders	$	(1.77	)	$	(2.20	)	$	(2.19	)

No adjustments were made to the numerator for the years ended December 31, 2019, 2018 or 2017 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 years ended December 31, 2019, 2018 or 2017 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, 2019, 2018 and 2017, there were 349,318, 403,129 and 245,570 shares, respectively, of non-vested restricted shares outstanding.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

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. As of December 31, 2019 and December 31, 2018, the Company has several unconsolidated VIEs in the form of joint ventures (see Note 4). The Company does not consolidate these entities because the Company is not the primary beneficiary and the nature of its involvement in the activities of these entities does not give the Company power over decisions that significantly affect these entities’ economic performance.

As of December 31, 2019, the Company holds a 66.1% 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.  The Company has determined 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.  The assets and liabilities of the Operating Partnership are the same as those of the Company and are presented in the consolidated balance sheet.

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.

Reclassification

Reclassification

Upon adoption on January 1, 2019 of the new lease standard in accordance with ASC 842, tenant reimbursements for 2018 and 2017 have been reclassified to rental income in the consolidated statements of operations to conform to the 2019 financial statement presentation.

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 the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivable.  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 real estate 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.

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:

Buildings:	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.  Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected operating cash flows. 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 impairment losses were recognized for the years ended December 31, 2019, 2018 or 2017.

Real Estate Dispositions

The following table summarizes our gain on sale of real estate, net during the years ended December 31, 2019, 2018, and 2017 (in thousands):

	Year Ended December 31,
	2019		2018		2017
Contributions to unconsolidated joint ventures
Gross proceeds	$	21.7	$	232.7	$	57.5
Gain (loss) on sale of real estate, net		3.9		63.9		11.4
Dispositions to third parties
Gross proceeds	$	144.3	$	114.3	$	—
Gain (loss) on sale of real estate, net		63.7		29.5		—
Total gains on contributions and dispositions, net	$	67.6	$	93.4	$	11.4

Real Estate Held for Sale

For the year ended December 31, 2019, gain on sales on the consolidated statements of operations also includes a gain of $6.9 million related to an exchange of land parcels of approximately equal size with an adjacent land owner and a loss of $2.3 million related to the West Hartford JV revaluation as discussed in Note 4.

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell.  If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.  Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated.  Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract.  In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance.  As a result, properties under contract may not close within the expected time period or at all.

As of December 31, 2019, two properties were classified as held for sale with assets of $5.3 million and no liabilities, and as of December 31, 2018, one property was classified as held for sale with assets of $3.1 million and no liabilities.

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 years ended December 31, 2019, 2018 or 2017.

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, 2019 and December 31, 2018, the Company did not have any restricted cash.  Restricted cash accounts were closed in conjunction with the full repayment of the Mortgage Loans and the Future Funding Facility on July 31, 2018.   

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.  For accrued rental income related to the straight-line method of reporting rental income, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.  Any receivables that are deemed to be uncollectible are recognized as a reduction to rental income in the Company’s consolidated statements of operations.  Prior period provision for doubtful accounts is presented on the Company's consolidated statements of operations in accordance with the Company's previous presentation and has not been reclassified to rental income.

Tenant and other receivables also include management fees receivable for services performed for the benefit of certain unconsolidated joint ventures. In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Revenue Recognition

Revenue Recognition

Rental income is comprised of base rent and reimbursements of property operating expenses.  Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases.  For leases that have fixed and measurable base 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 sheets.

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 a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

The Company commences recognizing revenue based on an evaluation of several factors. Revenue recognition under a lease begins when the lessee takes control of the physical use of the leased asset.

Reimbursement of property operating expenses 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 expenses are incurred.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated joint ventures. Property management fee income is reported at 100% of the revenue earned from such joint ventures in management and other fee income on the consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.  Leasing and development fees are initially reported at the portion of fees attributable to outside ownership of the related unconsolidated joint ventures.  The Company’s share in management fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects at our unconsolidated joint venture properties based on a percentage of project costs or a fixed fee.  Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be a single performance obligation, satisfied as of a point in time.  The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment.  For these services, the obligation is typically the execution of the lease and, as such, revenues are recognized at the point in time when that obligation has been satisfied.

Accounting for Recapture and Termination Activity Pursuant to the Master Lease

Accounting for Recapture and Termination Activity Pursuant to the Original Master Lease and Holdco Master Lease (see Note 5)

Seritage Recapture Rights. The Company generally treats the delivery of a recapture notice as a modification of the 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, if any, is amortized over the remaining life of the 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, if any, is amortized over the remaining useful life of the asset or liability.

A 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 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 Rights.  The Original Master Lease provided, and the Holdco Master Lease provides the tenant with certain rights to terminate their lease.  Such terminations 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 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 vacancy.

• 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 in July 2015, 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 was measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets.  The Company had elected not to utilize hedge accounting and therefore the change in fair value was included within change in fair value of interest rate cap on the consolidated statements of operations.

During the year ended December 31, 2018, the Company terminated the interest rate cap concurrent with the repayment of the Mortgage Loans and the Future Funding Facility and as such there were no instruments as of December 31, 2019 and December 31, 2018.

For the year ended December 31, 2019, the Company did not record any gain or loss on derivatives.  For the year ended December 31, 2018 and December 31, 2017, the Company recorded a change in the fair value of the interest rate cap of ($23) thousand, and ($0.7) million, respectively.

Share-Based Compensation

Share-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 based on the grant date fair value of the awards. Compensation expense is recognized ratably over the vesting period for awards with time-based vesting and awards with market-based vesting conditions (e.g. total shareholder return). For awards with performance-based vesting determined by Company operating criteria, the Company recognizes compensation expense at the date the achievement of performance criteria is deemed probable for the amount 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.  The Company utilizes a third-party valuation firm to measure the grant date fair value of restricted stock unit awards with market-based criteria using the Monte Carlo model. Forfeitures are recorded on an actual basis.

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, 2019, 49 of the Company's real estate properties were leased to Holdco and a material amount of the Company’s rental revenues for the year ended December 31, 2019 was derived from the Holdco Master Lease.  However, in November 2019, Holdco exercised its termination rights under the Holdco Master Lease with respect to 29 stores effective as of the first quarter of 2020.  Until the Company further diversifies the tenancy of its portfolio, an event that has a material adverse effect on the business, financial condition or results of operations of Holdco or another major tenant could have a material adverse effect on the Company’s business, financial condition or results of operations.  

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, 2019, the Company's portfolio of 184 Wholly Owned Properties and 28 JV Properties was diversified by location across 44 states and Puerto Rico.

Earnings per Share

Earnings 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.  As of August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings 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

The following presents Accounting Standards Updates (“ASU”) issued by Financial Accounting Standards Board (“FASB”) which have been adopted by the Company:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets	This standard provides guidance for recognizing gains and losses from the transfer of nonfinancial assets. The standard requires a company to derecognize nonfinancial assets once it transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial assets to noncustomers. Additionally, when a company transfers its controlling interest in a nonfinancial asset, but retains a non-controlling ownership interest, the company is required to measure any non-controlling interest it receives or retains at fair value. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach).	January 1, 2018	The Company adopted this update with no impact to beginning retained earnings/accumulated deficit because there were no open contracts at the time of adoption.

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	This standard 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 2016-15 is effective, on a retrospective basis, for interim and annual periods beginning after December 15, 2017; early adoption is permitted.	January 1, 2018	The Company adopted this standard and applied the cumulative earnings approach to classify distributions received from our equity method investees.  The adoption (i) changes our statements of cash flows so that distributions from unconsolidated joint ventures in excess of cumulative equity in earnings are now classified as inflows from investing activities for each period presented and (ii) resulted in a decrease to net cash provided by operating activities and an increase to net cash provided by investing activities of $10.0 million for the year ended December 31, 2017.
ASU 2014-09, Revenue from Contracts with Customers and the related FASB ASU Nos. 2016-12 and 2016-20	This standard provides practical expedients, technical corrections, and improvements for certain aspects of ASU 2014-09.  ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update’s core principle is that an entity should recognize 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. Companies are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. Those steps include the following: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation in the contract, and (v) recognize revenue when or as the entity satisfies a performance obligation.  The Company estimates the total transaction price, which generally includes a fixed contract price and may also include variable components. Variable components of the contract price are included in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its performance obligations.	January 1, 2018	The Company adopted this standard using the modified retrospective method. Management concluded that the majority of total revenues consist of rental income from leasing arrangements, which is specifically excluded from the standard. As of January 1, 2018, the Company began accounting for the sale of real estate properties under Subtopic 610-20 which provides for revenue recognition based on transfer of ownership.

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (“Topic 842”) ASU 2018-10, Codification Improvements ASU 2018-11, Leases, Targeted Improvements ASU 2018-20, Leases	This standard, as amended by subsequent ASUs on the topic, sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. However, ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less should be accounted for consistent with earlier guidance under ASC 840 for operating leases. Lessees should recognize an expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.	January 1, 2019	The Company adopted this standard by electing the package of practical expedients without hindsight which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the adoption date. The Company has a ground lease and several corporate office leases, which are classified as operating leases, for which the Company is required to record a right-of-use asset and a lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis for these leases. On January 1, 2019, the Company recorded an aggregate of approximately $8.4 million of right-of-use assets and corresponding $8.4 million of lease liabilities upon adoption of this standard.  Right-of-use assets and corresponding lease liabilities are included in the prepaid expenses, deferred expenses and other assets and accounts payable, accrued expenses and other liabilities line item respectively on the consolidated balance sheets. Additionally, the Company is no longer able to capitalize certain internal and external leasing costs. Because of this change, $1.3 million of such costs incurred in previous periods for leases which had not commenced at the beginning of current period were adjusted against opening equity upon adoption. The Company also combined $11,005 of below-market lease assets pertaining to the ground lease where we are a lessee with the right of use asset recorded for the ground lease as required upon adoption of ASU 2016-02. The below-market lease asset was previously recorded within the lease intangibles on the consolidated balance sheets.
ASU 2018-01, Leases, Land Easement Practical Expedient for Transition to Topic 842	In March 2018, the FASB finalized changes with respect to optional transition relief and approved a practical expedient for lessors that would permit lessors to make an accounting policy election to not separate non-lease components from the associated lease components, by class of underlying asset, if the following two criteria are met: (1) the timing and pattern of transfer of the lease and non-lease components are the same and (2) the lease component would be classified as an operating lease if accounted for separately.	January 1, 2019	The Company has elected the optional transition relief and has determined that it is not required to bifurcate and separately report non-lease components, such as common area maintenance revenue, for operating leases on the consolidated statements of operations for leases where the Company is the lessor. As a result, leases where the Company is the lessor have been accounted for in a similar method to earlier guidance under ASC 840. The Company’s adoption of ASC 842 did not have a material impact on our consolidated financial statements.

The following table represents ASUs to the FASB’s ASC that, as of the year ended December 31, 2019, are not yet effective for the Company and for which the Company has not elected early adoption, where permitted:

ASU	Description	Adoption Date	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) ASU 2018-19, Codification improvements to Topic 326, Financial Instruments – Credit Losses	ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, requiring the use of an "expected credit loss" model and adding more disclosure requirements. ASU 2018-19 clarifies that impairment of receivables arising from operating leases should accounted for in accordance with Topic 842, Leases.	January 1, 2020	This standard is not expected to have a significant impact to our consolidated financial statements.

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Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Summary of Revenue from Master Lease

Revenues from the Holdco Master Lease and the Original Master Lease for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands and excluding straight-line rental income of $0.3 million, ($4.9) million and $0.8 million, respectively.

	Year Ended December 31,
	2019		2018		2017
Fixed rental income	$	27,628	$	86,224	$	112,881
Variable rental income		23,525		65,450		70,987
Total rental income	$	51,153	$	151,674	$	183,868

Summary of the Company’s Recapture Activity

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

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

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

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

Summary of Termination and Redevelopment Properties

The following table provides a summary of Sears Holdings’ and Holdco’s termination activity (excluding 31 properties totaling 4.3 million square feet that were rejected on March 12, 2019 as part of Sears Holdings’ bankruptcy filing):

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

(1) Two properties were terminated in October 2018.

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

Schedule of Future Minimum Rental Receipts excluding Variable Payments and Tenant Reimbursements of Expenses Under Non-cancelable Operating Leases

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of December 31, 2019 and December 31, 2018 is approximately as follows:

(in thousands)	December 31, 2019
2020		113,265
2021		121,909
2022		124,067
2023		119,745
2024		116,607
Thereafter		1,019,054
Total Lease Payments	$	1,614,647

(in thousands)	December 31, 2018
2019	$	120,132
2020		122,263
2021		125,963
2022		124,949
2023		120,672
Thereafter		412,789
Total Lease Payments	$	1,026,768

Components of Lease Revenues

The components of lease revenues for the years ended December 31, 2019, December 31, 2018 and December 31, 2017 were as follows:

	Year Ended December 31,
(in thousands)	2019		2018		2017
Fixed rental income		104,956		140,661		154,599
Variable rental income		45,994		74,839		81,528
Total rental income	$	150,950	$	215,500	$	236,127

Information Related to Measurement of Lease Liabilities

The following table sets forth information related to the measurement of our lease liabilities as of December 31, 2019:

(dollar amounts in thousands)	As of December 31, 2019
Weighted average remaining lease term (in years)		10.54
Weighted average discount rate		7.20	%
Cash paid for operating leases	$	2,161

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Investments in Unconsolidated Joint Ventures - Summary of Properties Contributed In Unconsolidated Joint Ventures (Detail)	12 Months Ended
	Dec. 31, 2019 USD ($)
Mark 302 JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Mar. 20, 2018	[1]
Contribution Value	$ 90.0	[1]
Gain (Loss)	$ 38.8	[1]
UTC Joint Venture [Member]
Related Party Transaction [Line Items]
Contribution Date	May 18, 2018
Contribution Value	$ 68.0
Gain (Loss)	$ 28.3
West Hartford JV [Member]
Related Party Transaction [Line Items]
Contribution Date	May 18, 2018	[2]
Contribution Value	$ 20.3	[2]
Gain (Loss)	$ (1.1)	[2]
Cockeysville JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Mar. 29, 2019	[3]
Contribution Value	$ 12.5	[3]
Gain (Loss)	$ 3.8	[3]
Tech Ridge JV [Member]
Related Party Transaction [Line Items]
Contribution Date	Sep. 27, 2019	[4]
Contribution Value	$ 3.0	[4]
Gain (Loss)	$ 0.1	[4]

[1] The Mark 302 JV is subject to a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2020. The primary inputs in determining the Contribution Value for the Mark 302 JV are property operating income and total project costs and the Contribution Value will be recalculated to yield a pre-determined rate of return to the investment fund managed by Invesco Real Estate. The Contribution Value cannot be more than $105.0 million or less than $60.0 million, and the Gain (Loss) will not be more than $53.8 million or less than $8.8 million.

[2] The West Hartford JV is subject to (i) a revaluation upon the earlier of the first anniversary of project stabilization or December 31, 2019, and (ii) an adjustment based on the timing, method and magnitude of the reassessment of the property for real estate tax purposes between 2018 and 2022. The primary inputs in determining the Contribution Value for the West Hartford JV are property operating income, real estate taxes and total project costs. The Contribution Value cannot be more than $29.6  million or less than $20.4  million, and the Gain (Loss) cannot be more than $5.8 million or more than a $3.4 million loss. As of December 31, 2019, the Company revaluated the Contribution Value and recorded an additional loss of $2.3 million.

[3] The Cockeysville JV is subject to revaluation if an affiliate of Greenberg Gibbons contributes another adjacent parcel of land (the “Additional Land Parcel”) to the Cockeysville JV if certain milestones are met with respect to entitling the Additional Land Parcel for residential use. If the Additional Land Parcel is contributed to the Cockeysville JV, the Company will record an increased investment in the Cockeysville JV in an amount equal to 50% of the fair value of the Additional Land Parcel at the time of contribution. The Contribution Value of the Cockeysville JV is based upon the Company’s assessment of the probability of the Additional Land Parcel being entitled for residential use.  The maximum Gain (Loss) is the fair value of the Additional Land Parcel at the time the Contribution Value is revalued, which cannot be less than $3.8 million.

[4] The Tech Ridge JV is subject to a revaluation primarily based upon, the number of residential units constructed by the Tech Ridge JV.  The Contribution Value cannot be less than $2.75 million.

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Lease Intangible Assets and Liabilities - Schedule of Future Amortization of Intangibles (Detail) - Above-Market Leases, Net [Member] $ in Thousands	Dec. 31, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
2020	$ 287
2021	148
2022	118
2023	175
2024	$ 190

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Leases - Additional Information (Detail) ft² in Millions			12 Months Ended
	Mar. 12, 2019 ft² Property	Feb. 28, 2019 USD ($) Lease Option	Dec. 31, 2019 USD ($) Property	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space			50.00%
Number of real estate specified properties			5
Right to recapture property space exercised			100.00%
Number of real estate properties acquisition exercised			70
Number of terminated properties commenced or completed for redevelopment			46
Number of terminated properties sold			24
Number of properties subject to ground lease			1
Number of properties subject to corporate office lease			1
ROU assets | $			$ 18,500,000
Lease liabilities | $			8,600,000
Increase in ROU assets | $			$ 11,000,000.0
Operating leases expiration year			2073
General and Administrative Expenses [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense | $			$ 1,600,000	$ 700,000	$ 700,000
Property Operating Expense
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Rent expense | $			$ 45,000	45,000	45,000
Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of properties terminated under lease	31
Area of properties rejected under leases | ft²	4.3
Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease expiration date		Jul. 31, 2025
Number of options for renewal of lease | Option		3
Renewal period of leases		5 years
Final option renewal period		4 years
Number of renewal term that will be increased | Lease		2
Percentage of increase annual lease rent		2.00%
Rent credit allocation description			The rent credit is allocated to specific properties based on the trailing twelve- month EBITDA of the particular property as of December 2018.
Number of real estate properties acquisition exercised			4
Lease termination, description			Under the terms of the Holdco Master Lease, Holdco has the right, at any time, to terminate the Holdco Master Lease with respect to any property upon the payment of a termination fee equal to one year of base rent plus annual taxes and other operating expenses.  Additionally, beginning in March 2020, the tenant has the right to terminate without payment of a termination fee: (i) up to 16 properties in the second year of the term of the Holdco Master Lease, (ii) up to 12 properties in the third year, (iii) up to 10 properties in the fourth year, and (iv) thereafter, the remaining properties, in each instance with carry over rights if less than the maximum permitted number of properties are terminated in any lease year.
Number of properties right to terminate without termination fee second year			16
Number of properties right to terminate without termination fee third year			12
Number of properties right to terminate without termination fee fourth year			10
Holdco Master Lease [Member] | Holdco [Member] | Lease Terminations [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised			29
Holdco Master Lease [Member] | Maximum [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease adjustment in form of rent credit | $		$ 12,000,000
Original and Holdco Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Straight-line rental income | $			$ 300,000	$ (4,900,000)	$ 800,000
Master Lease [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			10
Right to recapture property space exercised			100.00%
Master Lease [Member] | Sears Holdings Corporation [Member] | Lease Terminations [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised			87
Original Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised			3

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Shareholders' Equity - Summary of Common Stock Dividends and Distributions (Detail) - $ / shares						12 Months Ended
	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividends Payable [Line Items]
Dividends per Class A and Class C Common Share						$ 0.25	$ 1.00	$ 1.00
Class A and Class C Common Share [Member]
Dividends Payable [Line Items]
Declaration Date	Feb. 25, 2019	Oct. 23, 2018	Jul. 24, 2018	Apr. 24, 2018	Feb. 20, 2018
Record Date	Mar. 29, 2019	Dec. 31, 2018	Sep. 28, 2018	Jun. 29, 2018	Mar. 30, 2018
Payment Date	Apr. 11, 2019	Jan. 10, 2019	Oct. 11, 2018	Jul. 12, 2018	Apr. 12, 2018
Dividends per Class A and Class C Common Share	$ 0.25		$ 0.25		$ 0.25	$ 0.25	$ 1.00	$ 1.00

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Earnings Per Share - Additional Information (Detail) - shares	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Time Based Restricted Shares and Share Units [Member]
Earning Per Share [Line Items]
Non-vested restricted shares outstanding	349,318	403,129	245,570

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Class A and Class C Common Share [Member]

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees declared the following common stock dividends during 2019 and 2018, with holders of OP Units entitled to an equal distribution per Operating Partnership unit held on the record date:

			Dividends per
			Class A and Class C
Declaration Date	Record Date	Payment Date	Common Share
2019
February 25	March 29	April 11	$	0.25
2018
October 23	December 31	January 10, 2019	$	0.25
July 24	September 28	October 11		0.25
April 24	June 29	July 12		0.25
February 20	March 30	April 12		0.25

The dividends have been reflected as follows for U.S. federal income tax purposes:

	Year Ended December 31,
	2019			2018		2017
Ordinary income	$	—		$	0.01	$	0.53
Capital gain distributions		—			0.35		0.47
Return of capital		0.50			0.39		—
Dividends reallocation (1)		(0.25	)		0.25		—
Total	$	0.25		$	1.00	$	1.00

In 2018, the fourth quarter dividend of 2018 declared on October 23, 2018 was allocated to the 2019 tax year.

Series A Preferred Shares [Member]

Class of Stock [Line Items]

Summary of Dividends and Distributions

The Company’s Board of Trustees also declared the following dividends on preferred shares during 2019 and 2018:

Declaration Date	Record Date	Payment Date	Preferred Share
2019
October 23	December 31	January 15, 2020	$	0.43750
July 23	September 30	October 15		0.43750
April 30	June 28	July 15		0.43750
February 25	March 29	April 15		0.43750
2018
October 23	December 31	January 14, 2019	$	0.43750
July 24	September 28	October 15		0.43750
April 24	June 29	July 16		0.43750
February 20	March 30	April 16		0.43750
February 20 (1)	March 30	April 16		0.15556

(1) This dividend covers the period from, and including, December 14, 2017 to December 31, 2017.

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Share Based Compensation

12 Months Ended

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share Based Compensation

Note 14 – Share-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. 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 and Share Units

Pursuant to the Plan, the Company has periodically made grants of restricted shares or share units. 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 in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vest on the third, and in some instances, the fourth anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units 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 and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares. See Note 2 for valuation information related to the grants of the awards that are subject to market-based vesting conditions.

The following table summarizes restricted share activity for the grant periods ended December 31, 2019 and 2018:

	Year Ended December 31, 2019					Year Ended December 31, 2018
				Weighted-					Weighted-
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Unvested restricted shares at beginning of period		403,129		$	41.57		245,570		$	41.33
Restricted shares granted		76,948			57.04		261,059			40.80
Restricted shares vested		(127,767	)		41.76		(99,956	)		39.04
Restricted shares forfeited		(2,992	)		45.02		(3,544	)		38.83
Unvested restricted shares at end of period		349,318		$	44.88		403,129		$	41.57

The Company recognized share-based compensation of $6.8 million, $7.5 million and $7.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company's consolidated statements of operations.

As of December 31, 2019, there were $7.4 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 1.6 years. As of December 31, 2018, there were $9.3 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 1.9 years.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

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:

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

Schedule Of Gain On Sale Of Real Estate

The following table summarizes our gain on sale of real estate, net during the years ended December 31, 2019, 2018, and 2017 (in thousands):

	Year Ended December 31,
	2019		2018		2017
Contributions to unconsolidated joint ventures
Gross proceeds	$	21.7	$	232.7	$	57.5
Gain (loss) on sale of real estate, net		3.9		63.9		11.4
Dispositions to third parties
Gross proceeds	$	144.3	$	114.3	$	—
Gain (loss) on sale of real estate, net		63.7		29.5		—
Total gains on contributions and dispositions, net	$	67.6	$	93.4	$	11.4

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Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent.  The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. The Term Loan Facility matures on July 31, 2023.

The Company used a portion of the proceeds from the Initial Funding to (i) repay existing indebtedness and (ii) pay transaction and related costs.  The remaining proceeds from the Initial Funding, as well as borrowings under the Incremental Funding Facility, will be used to fund the Company’s redevelopment pipeline and to pay operating expenses of the Company and its subsidiaries.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the consolidated statements of operations.

As of December 31, 2019, the aggregate principal amount outstanding under the Term Loan Facility was $1.6 billion.

The Company’s ability to access the Incremental Funding Facility is subject to (i) the Company achieving rental income from non-Sears Holdings tenants, on an annualized basis (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the fiscal quarter ending prior to the date of incurrence of the Incremental Funding Facility, of not less than $200 million and (ii) the Company’s good faith projection that rental income from non-Sears Holdings tenants (after giving effect to SNO Leases expected to commence rent payment within 12 months) for the succeeding four consecutive fiscal quarters (beginning with the fiscal quarter during which the incremental facility is accessed) will be not less than $200 million.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Borrower.  The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Borrower and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.00 to 1.00 for each fiscal

quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.20 to 1.00 for each fiscal quarter thereafter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.05 to 1.00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2018 through the fiscal quarter ending June 30, 2021, and not less than 1.30 to 1.00 for each fiscal quarter thereafter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion.  Any failure to satisfy any of these financial metrics limits the Company’s ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default.  The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, 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 Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

As of December 31, 2019, the Company was not in compliance with certain of the financial metrics described above.  As a result, the Company must receive the consent of Berkshire Hathaway to dispose of assets via sale or joint venture and, as of December 31, 2019, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. There can be no assurance that the lender will consent to future dispositions of assets. Additionally, Berkshire Hathaway has the right to request mortgages against the Company’s assets pursuant to the mortgage and collateral requirement. During the year ended December 31, 2019, Berkshire Hathaway requested mortgages on a majority of the Company’s portfolio which were recorded in accordance with the requirement (the “Lender Request”). There are no other changes to the terms and conditions of the Term Loan Facility, or the Company’s ability to operate thereunder, as a result of providing mortgages against any of the Company’s assets pursuant to the mortgage and collateral requirement. The Company accounted for the Lender Request transaction as a modification of debt as of December 31, 2019. Related to the modification, the Company incurred $5.0 million mortgage recording costs which are classified as interest expenses on the consolidated statements of operations.

The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

The Company incurred $2.1 million of debt issuance costs related to the Term Loan Facility which are recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the term of the Term Loan Agreement.  As of December 31, 2019, the unamortized balance of the Company’s debt issuance costs was $1.5 million.

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 “Mortgage 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”).  The Mortgage Loans and Future Funding Facility were secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs.  Pursuant to the terms of the Mortgage Loan Agreements, amounts available under the Future Funding Facility were fully drawn by the Company on June 30, 2017.  Such amounts were deposited into a redevelopment reserve and used to fund redevelopment activity at the Company’s properties.  

Interest under the Mortgage Loans was due and payable on the payment dates, and all outstanding principal amounts were due when the loan was scheduled to mature on the payment date in July 2019, pursuant to the Loan Agreements.  The Company had two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions.  Borrowings under the Mortgage Loans bore interest at the London Interbank Offered Rates (“LIBOR”) plus, as of July 31, 2018, a weighted-average spread of 485 basis points; payments were made monthly on an interest-only basis.  The weighted-average interest rates for the Mortgage Loans and Future Funding Facility for the year ended December 31, 2017 was 6.03%.

The Company incurred $22.3 million of debt issuance costs related to the Mortgage Loans and Future Funding Facility which were recorded as a direct deduction from the carrying amount of the Mortgage Loans and Future Funding Facility and amortized over the term of the Mortgage Loan Agreements.  During the year ended December 31, 2018, the Company fully amortized the remaining unamortized debt issuance costs as a result of the full repayment of the Mortgage Loans and Future Funding Facility on July 31, 2018.  As of December 31, 2019 and December 31, 2018, the Company had no unamortized debt issuance costs related to the Mortgage Loans and Future Funding Facility.

On July 31, 2018, the aggregate principal amounts outstanding under the Mortgage Loans and the Future Funding Facility were repaid in full and no amounts were outstanding as of December 31, 2019.

Unsecured Delayed Draw Term Loan

On February 23, 2017, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a $200 million senior unsecured delayed draw term loan facility (the “Unsecured Delayed Draw Term Loan”) with JPP, LLC and JPP II, LLC as lenders (collectively, the “Original Lenders”) and JPP, LLC as administrative agent.

The total commitment of the Lenders under the Unsecured Delayed Draw Term Loan was $200 million and the maturity date was December 31, 2017.  On February 23, 2017, the Operating Partnership paid to the Original Lenders an upfront commitment fee equal to $1.0 million.  On May 24, 2017, the Operating Partnership paid to the Original Lenders an additional, and final, commitment fee of $1.0 million.  

The principal amount of loans outstanding under the Unsecured Delayed Draw Term Loan, prior to its repayment, bore a base annual interest rate of 6.50%.

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

Unsecured Term Loan

On December 27, 2017, the Operating Partnership, as borrower, and the Company, as guarantor, refinanced the Unsecured Delayed Draw Term Loan with a $200 million unsecured term loan facility (the “Unsecured Term Loan”).  The principal amount outstanding under the Unsecured Delayed Draw Term Loan at termination was $85 million. No prepayment penalties were triggered and the Unsecured Delayed Draw Term Loan terminated in accordance with its terms.

The lenders under the Unsecured Delayed Draw Term Loan, JPP, LLC and JPP II, LLC, maintained their funding of $85 million in the Unsecured Term Loan, with JPP, LLC appointed as administrative agent under the Unsecured Term Loan.  An affiliate of Empyrean Capital Partners, L.P., a Delaware limited partnership (and together with JPP, LLC and JPP II LLC, each an “Initial Lender” and collectively, the “Initial Lenders”), funded $60 million under the Unsecured Term Loan, resulting in a total of $145 million committed and funded under the Unsecured Term Loan at closing.  The Borrower paid to each Initial Lender an upfront fee in an aggregate amount equal to 1.00% of the principal amount of the loan made by such Initial Lender.

Under an accordion feature, the Company had the right to increase the total commitments up to $200 million and place an additional $55 million of incremental loans with the Initial Lenders or new lenders. The Initial Lenders under the Unsecured Term Loan were not obligated to make all or any portion of the incremental loans.

The Company used the proceeds of the Unsecured Term Loan, among other things, to refinance the Unsecured Delayed Draw Term Loan, to fund redevelopment projects and for other general corporate purposes.  Loans under the Unsecured Term Loan were guaranteed by the Company.

The Unsecured Term Loan matured on the earlier of (i) December 31, 2018 and (ii) the date on which the outstanding indebtedness under the Company’s existing mortgage and mezzanine facilities are repaid in full.  The Unsecured Term Loan was prepayable at any time in whole or in part, without any penalty or premium.  Amounts drawn under the Unsecured Term Loan and repaid may not have been redrawn.

The principal amount of loans outstanding under the Unsecured Term Loan bore a base annual interest rate of 6.75%.

The Company incurred $1.8 million of debt issuance costs related to the Unsecured Term Loan which was recorded as a direct deduction from the carrying amount of the Unsecured Term Loan and amortized over the term of the loan.  During the year ended December 31, 2018, the Company fully amortized the remaining unamortized debt issuance costs as a result of the full repayment of the Unsecured Term Loan on July 31, 2018.  As of December 31, 2019 and December 31, 2018, the Company had no unamortized debt issuance costs related to the Unsecured Term Loan.

Edward S. Lampert, the Company’s Chairman, is the Chairman and Chief Executive Officer of ESL Investments, Inc., 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. Lampert recusing himself).

On July 31, 2018, the principal amounts outstanding under the Unsecured Term Loan were repaid in full and no amounts were outstanding as of December 31, 2019.

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Related Party Disclosure

12 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

Related Party Disclosure

Note 10 – Related Party Disclosure

Edward S. Lampert

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings.  Mr. Lampert is also the Chairman of Seritage.

As of December 31, 2019, Mr. Lampert beneficially owned a 33.9% interest in the Operating Partnership and approximately 2.4% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively.

Subsidiaries of Holdco, as lessees, and subsidiaries of the Company, as lessors, are parties to the Holdco Master Lease and subsidiaries of Sears Holdings, as lessees, and subsidiaries of the Company, as lessors, were parties to the Original Master Lease (see Note 5).

Unconsolidated Joint Ventures

Certain unconsolidated joint ventures have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated joint ventures.  Fees for the services performed are reported at 100% of the revenue earned from such joint ventures in management and other fee income on the consolidated statements of operations.  The Company’s share of the expenses incurred by the unconsolidated joint ventures is reported in equity in income (loss) of unconsolidated joint ventures on the consolidated statements of operations and in other expenses in the combined financial data in Note 4.

In addition, as of December 31, 2019, the Company had incurred $9.7 million of development expenditures at properties owned by certain unconsolidated joint ventures for which the Company will be repaid by the respective unconsolidated joint ventures.  These amounts are included in tenant and other receivables, net on the Company’s consolidated balance sheets.  As of December 31, 2018, the Company had incurred $2.1 million of these development expenditures.

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Organization

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

Note 1 – Organization

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, directly or indirectly, through 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” and “Seritage” 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 and mixed-use properties throughout the United States.  As of December 31, 2019, the Company’s portfolio consisted of interests in 212 properties totaling approximately 33.4 million square feet of GLA, including 184 Wholly Owned Properties totaling approximately 28.7 million square feet of GLA across 44 states and Puerto Rico, and interests in 28 JV Properties totaling approximately 4.7 million square feet of GLA across 14 states.

The Company’s mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experiences for consumers and local communities, and create long-term value for our shareholders.

Background

On June 11, 2015, Sears Holdings Corporation (“Sears Holdings” or “Sears”) 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 (i) 234 of Sears Holdings’ owned properties and one of its ground leased properties, and (ii) its 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (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 and commenced operations.  The Company did not have any operations prior to the completion of the Rights Offering and Transaction.

On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).  On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., executed a master lease with respect to 51 Wholly Owned Properties (the “Holdco Master Lease”), which became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the original master lease between the Company and affiliates of Sears Holdings (the “Original Master Lease”).

As of December 31, 2019, the Company leased space at 48 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at three JV Properties. As of December 31, 2019, three Wholly Owned Properties were subject to 100% recapture notices pursuant to the terms of the Holdco Master Lease, and 28 Wholly Owned Properties and one JV Property were subject to termination notices pursuant to the terms of the Holdco Master Lease and the lease with Holdco at the JV Property, respectively. In November 2019, Holdco exercised its rights under the Holdco Master Lease to terminate the Holdco Master Lease, effective March 2020, with respect to 29 stores. Giving effect to this recapture and termination activity, the Company leased space at 17 Wholly Owned Properties to Holdco under the Holdco Master Lease and also leased space to Holdco at two JV Properties.

Edward S. Lampert is the Chairman and Chief Executive Officer of ESL Investments, Inc, which owns Holdco.  Mr. Lampert is also the Chairman of Seritage and controls each of the tenant entities that is a party to the Holdco Master Lease.

Liquidity

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “obligations”), and the reinvestment in and redevelopment of its properties (“development expenditures”).  As a result of a decrease in occupancy levels due to the Company’s recapture of space for redevelopment purposes and the execution of certain termination rights by Sears Holdings under the Original Master Lease, property rental income, which is the Company’s primary source of operating cash flow, did not fully fund obligations incurred during the year ended December 31, 2019 and the Company had operating cash outflows of $57.7 million.  Additionally, the Company’s development expenditures during the year ended December 31, 2019 drove investing cash outflows of $299.5 million.

Obligations are projected to continue to exceed property rental income until such time as additional tenants commence paying rent, and the Company plans to incur additional development expenditures as it continues to invest in the redevelopment of its portfolio. While the Company does not currently have the liquid funds available to satisfy the obligations and development expenditures, the Company expects to fund the obligations and development expenditures with a combination of capital sources including, but not limited to, sales of Wholly Owned Properties, sales of interests in JV Properties (which may include the exercise of certain rights that allow the Company to sell its interests in select JV Properties to its partners at fair market value) and potential credit and capital markets transactions, subject to any approvals that may be required under the Term Loan Agreement, as described in Note 6, Debt.  Management has determined that it is probable its plans will be effectively implemented within one year after the date the financial statements are issued and that these actions will provide the necessary cash flows to fund the Company’s obligations and development expenditures.  

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
REVENUE
Rental income	$ 167,035	$ 213,558	$ 241,017
Management and other fee income	$ 1,598	$ 1,196
Type of Revenue [Extensible List]	us-gaap:ManagementServiceMember	us-gaap:ManagementServiceMember	us-gaap:ManagementServiceMember
Total revenue	$ 168,633	$ 214,754	$ 241,017
EXPENSES
Property operating	42,123	28,705	19,700
Real estate taxes	38,595	42,446	45,653
Depreciation and amortization	104,581	226,675	262,171
General and administrative	39,156	34,788	27,902
Provision for doubtful accounts		257	158
Total expenses	224,455	332,871	355,584
Gain on sale of real estate	71,104	96,165	11,447
Gain on sale of interests in unconsolidated joint ventures	6,721		60,302
Equity in loss of unconsolidated joint ventures	(17,994)	(10,448)	(7,788)
Interest and other income	6,824	7,886	877
Interest expense	(94,519)	(90,020)	(70,112)
Change in fair value of interest rate cap		(23)	(701)
Loss before income taxes	(90,407)	(114,557)	(120,542)
Provision for income taxes	(196)	(321)	(271)
Net loss	(90,603)	(114,878)	(120,813)
Net loss attributable to non-controlling interests	31,206	41,406	47,059
Net loss attributable to Seritage	(59,397)	(73,472)	(73,754)
Preferred dividends	(4,900)	(4,903)	(245)
Net loss attributable to Seritage common shareholders	$ (64,297)	$ (78,375)	$ (73,999)
Net loss per share attributable to Seritage Class A and Class C common shareholders - Basic	$ (1.77)	$ (2.20)	$ (2.19)
Net loss per share attributable to Seritage Class A and Class C common shareholders - Diluted	$ (1.77)	$ (2.20)	$ (2.19)
Weighted average Class A and Class C common shares outstanding - Basic	36,413	35,560	33,804
Weighted average Class A and Class C common shares outstanding - Diluted	36,413	35,560	33,804

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Summary of Significant Accounting Policies - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2019 USD ($) Property State JointVenture Segment	Dec. 31, 2018 USD ($) Property	Dec. 31, 2017 USD ($)	Jan. 01, 2019 USD ($)	Aug. 29, 2018 shares
Summary Of Significant Accounting Policies [Line Items]
Number of Reportable Segments | Segment	1
Impairment loss on real estate assets	$ 0	$ 0	$ 0
Gain related to exchange of land parcels	6,900,000
Gain or loss on sale of real estate based on final contribution value	$ 2,300,000
Number of Properties Classified | Property	2	1
Real estate held for sale, assets	$ 5,275,000	$ 3,094,000
Real estate held for sale, liabilities	0	0
Restricted cash	$ 0	0	175,665,000
Unrealized loss related to change in fair value		(23,000)	(701,000)
Number of real estate properties leased | Property	49
Number of wholly owned properties acquired | Property	184
Number of joint venture properties acquired | JointVenture	28
Number of states in properties located | State	44
Common shares, outstanding | shares					0
Net Cash Provided by (Used in) Operating Activities	$ (57,660,000)	54,899,000	59,609,000
Net Cash Provided by (Used in) Investing Activities	(299,490,000)	(119,475,000)	37,189,000
Operating Lease, Right-of-Use Asset	18,500,000
Operating Lease, Liability	8,600,000
Below Market Lease assets	10,648,000	12,281,000
Accounting Standards Update 2019-15 [Member]
Summary Of Significant Accounting Policies [Line Items]
Net Cash Provided by (Used in) Operating Activities			(10,000,000.0)
Net Cash Provided by (Used in) Investing Activities			(10,000,000.0)
Operating Lease, Right-of-Use Asset				$ 8,400,000
Operating Lease, Liability				$ 8,400,000
ASU 2016-02 [Member]
Summary Of Significant Accounting Policies [Line Items]
Lease, Cost	1,300,000
Below Market Lease assets	$ 11,005,000
Interest Rate Cap [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest rate caps purchased		$ 5,000,000.0
Derivative, term of contract		4 years
Notional amount		$ 1,261,000,000
Derivative strike rate		3.50%
Unrealized loss related to change in fair value		$ (23,000,000)	$ (700,000)
Management and Other Fee Income [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of revenue earned from unconsolidated joint ventures		100.00%
Operating Partnership [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent	66.10%

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Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of Net Income (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 the 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.

	Year Ended December 31,
(in thousands except per share amounts)	2019			2018			2017
Numerator - Basic and Diluted
Net loss	$	(90,603	)	$	(114,878	)	$	(120,813	)
Net loss attributable to non-controlling interests		31,206			41,406			47,059
Preferred dividends		(4,900	)		(4,903	)		(245	)
Net loss attributable to common shareholders	$	(64,297	)	$	(78,375	)	$	(73,999	)
Earnings allocated to unvested participating securities		—			—			—
Net loss available to common shareholders - Basic    and diluted	$	(64,297	)	$	(78,375	)	$	(73,999	)
Denominator - Basic and Diluted
Weighted average Class A common shares outstanding		36,413			35,103			28,249
Weighted average Class C common shares outstanding		-			457			5,555
Weighted average Class A and Class C common shares outstanding		36,413			35,560			33,804
Net income (loss) per share attributable to Class A and    Class C common shareholders	$	(1.77	)	$	(2.20	)	$	(2.19	)

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Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 252,370	$ 287,001
Accumulated Amortization	(184,217)	(163,345)
Balance	68,153	123,656
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	245,745	266,897
Accumulated Amortization	(180,639)	(158,235)
Balance	65,106	108,662
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	6,625	8,338
Accumulated Amortization	(3,578)	(4,400)
Balance	$ 3,047	3,938
Below-Market Ground Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset		11,766
Accumulated Amortization		(710)
Balance		$ 11,056

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	Apr. 18, 2019	Dec. 31, 2019	Jul. 07, 2015
Loss Contingencies [Line Items]
Environmental reserve		$ 9.5	$ 12.0
Sears Holdings Corporation [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 649.0
Sears Holdings Corporation [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Worth of real estate in excess of purchase price paid	$ 749.0

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Leases - Summary of Recapture Rights Exercised by the Company (Parenthetical) (Detail)	Dec. 31, 2019
Property Subject To Or Available For Operating Lease Net [Abstract]
Right to recapture property space exercised	100.00%
Right to recapture property space	50.00%

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Leases - Information Related to Measurement of Lease Liabilities (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Lessee Disclosure [Abstract]
Weighted average remaining lease term (in years)	10 years 6 months 14 days
Weighted average discount rate	7.20%
Cash paid for operating leases	$ 2,161

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Schedule III - Real Estate and Accumulated Depreciation (Parenthetical) (Detail) $ in Billions	12 Months Ended
	Dec. 31, 2019 USD ($)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Aggregate cost of land, building and improvements for federal income tax purpose	$ 2.5
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