Quarterly Report for Quarter Ending SEPTEMBER 30, 2025 (Form 10-Q)

Management's Discussion and Analysis ofFinancial Condition and Results of Operations

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "projects," "would," "may," "will," "continue to," "pro forma" or the opposite of these words and phrases or other similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of this Quarterly Report.

Overview

Prior to our adoption of the Plan of Sale, we were principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of September 30, 2025, our portfolio consisted of interests in 13 properties comprised of approximately 1.3 million square feet of gross leasable area ("GLA") or build-to-suit leased area and 198 acres of land. The portfolio encompasses eight consolidated properties consisting of approximately 0.8 million square feet of GLA and 113 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 85 acres.

Review of Strategic Alternatives

On March 1, 2022, the Company announced that its Board of Trustees has commenced a process to review a broad range of strategic alternatives to enhance shareholder value. The Board of Trustees created a special committee of the Board of Trustees (the "Special Committee") to oversee the process. The Special Committee retained Barclays as its financial advisor from March 2022 to August 2023 to assist with the strategic review. The Company sought a shareholder vote to approve a proposed plan of sale of our assets and dissolution (the "Plan of Sale") that would allow our board to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company.

The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, at which time the Plan of Sale was approved by the shareholders, following our filing of a final proxy statement with the SEC on September 14, 2022. See Note 1 - Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about the Plan of Sale. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing on the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale.

Impairment of Real Estate Assets and Investments in Unconsolidated Entities

We recorded an impairment loss of $0.8 million during the three months ended September 30, 2025 as a result of transferring the Aventura, FL property to held for sale which requires the asset be carried at the lower of book value or fair value less costs to sell. For the nine months ended September 30, 2025, we recognized a total of $18.8 million of impairment losses, mostly due to accepting an offer to sell below carrying value, which are included in impairment of real estate assets within the consolidated statements of operations. In addition, we recognized $8.5 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the nine months ended September 30, 2025, which is included in equity in income (loss) of unconsolidated entities within the consolidated statements of operations. We continue to evaluate our portfolio, including our development plans, hold periods and, if applicable, offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities.

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REIT Qualification

On March 31, 2022, the Company announced that its Board of Trustees, with the recommendation of the Special Committee, approved a plan to terminate the Company's REIT status and become a taxable C Corporation effective January 1, 2022. As a result, the Company is no longer required to operate under REIT rules, including the requirement to distribute at least 90% of REIT taxable income to its shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT for the 2021 tax year and prior tax years, and existing REIT requirements and limitations, including those established by the Company's organizational documents, remained in place through December 31, 2021. Refer to Note 7 - Income Taxes of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Market Update

The Company continues to face challenging market conditions such as elevated interest rates and the availability of debt and equity capital and continues to assess other potential macroeconomic impacts including supply chain issues and international conflicts associated with tariffs as well as potential labor issues. While interest rates have begun to come down, they remain high relative to 2022. Additionally, raising equity capital for land development deals remains challenging. These conditions could apply downward pricing pressures on our remaining assets. In making decisions regarding whether and when to transact on each of the Company's remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset. If these challenging market conditions persist, then we expect that they will continue to adversely impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders.

Business Strategies

The Company's primary objective is to create value for its shareholders through the monetization of the Company's assets through the Plan of Sale, which can be suspended by the Board of Trustees. We look to enhance sale value through leasing our built footprint, densification of our sites, achievement of entitlements and modification of agreements that govern our properties. We continue to position all remaining assets for sale.

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 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.

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Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

The following table presents selected data on comparative results from the Company's condensed consolidated statements of operations for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024 (in thousands):

Rental Income

Rental income increased by $1.7 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to an increase in rental income from the Aventura, FL property. The increase was partially offset by property sales of one income producing properties during the third quarter of 2024 and one income producing property in the first quarter of 2025.

Property Operating Expenses

The decrease of $0.6 million in property operating expense for the three months ended September 30, 2025 was primarily due to a decrease in insurance expense of $0.6 million and a decrease in common area maintenance expense of $0.2 million offset by an increase in utility expense of $0.2 million primarily as a result of non-recoverable utility deposits related to sold properties.

Abandoned Project Costs

During the three months ended September 30, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property for which the Company is not currently pursuing entitlements.

Real Estate Taxes

Real estate taxes decreased by $0.1 million related to sold properties and by $0.3 million related to prior year's tax refunds.

Depreciation and Amortization Expenses

The decrease of $2.7 million in depreciation and amortization expenses for the three months ended September 30, 2025 was primarily due to a one time $1.6 million depreciation catch up in 2024 for a property transferring out of held for sale and a one time acceleration of expense of $0.8 million in 2024 related to a building that was ultimately demolished. In September 2025, the Aventura, FL property was transferred to held for sale resulting in a decrease of depreciation of $0.3 million.

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General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.

The decrease of $2.3 million for the three months ended September 30, 2025 reflects an overall decrease in costs including employee bonuses, share based compensation, consulting expense and personnel costs primarily as a result of decreased staffing.

Gain on Sale of Real Estate

No sales closed during the three months ended September 30, 2025.

During the three months ended September 30, 2024, the Company sold one property for net proceeds of $24.0 million and recorded a net gain of $4.2 million, which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

Impairment of Real Estate Assets

During the three months ended September 30, 2025, the Company recognized an $0.8 million impairment of real estate assets as a result of the Company transferring the Aventura, FL property to held for sale which requires the asset be carried at the lower of book value or fair value less costs to sell. There were no impairments recognized for the three months ended September 30, 2024.

Equity in Income of Unconsolidated Entities

The increase in equity in income for the three months ended September 30, 2025 was driven by a decrease of losses of $0.5 million related to the sold interests unconsolidated entities and a decrease of losses of $0.2 million related to the Company's other investments offset by a decrease in income of $0.2 million from the Company's investment in the UTC JV.

Interest Expense

The decrease of $0.8 million in interest expense for the three months ended September 30, 2025 was driven by partial Term Loan Facility pay downs since the end of the third quarter 2024 offset by the increase of amortization of deferred financing costs.

Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

The following table presents selected data on comparative results from the Company's condensed consolidated statements of operations for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024 (in thousands):

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Rental Income

Rental income increased by $0.8 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase is primarily driven by the increase of rental income from the Aventura, FL property and a decrease in bad debt expense offset by the sales of four income producing properties.

Property Operating Expenses

The decrease of $2.3 million in property operating expense for the nine months ended September 30, 2025 was primarily due to a decrease in common area expenses of $1.0 million and insurance expense of $1.3 million related to sold properties.

Abandoned Project Costs

During the nine months ended September 30, 2024, the Company expensed costs that were previously capitalized in construction in progress on account of a tenant that defaulted on its lease prior to opening and predevelopment costs on a property which the Company is not currently pursuing entitlements.

Real Estate Taxes

Real estate taxes decreased by $0.9 million related to sold properties and by $0.5 million related to prior year's tax refunds.

Depreciation and Amortization Expenses

The decrease of $5.0 million in depreciation and amortization expenses for the nine months ended September 30, 2025 was primarily due to property sales, $1.6 million of catch up depreciation as a result of moving a property out of held for sale in 2024 and an acceleration of $0.8 million of depreciation due to the ultimate demolition of on property and was partially offset by an increase in depreciation related to Aventura tenant improvements.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation, professional fees, office expenses and overhead expenses.

The increase for the nine months ended September 30, 2025 was primarily due to the recognition of severance expense of $6.5 million. The increase was partially offset by a decrease in overall costs including employee bonuses, share based compensation, accounting fees and consulting expense.

Gain on Sale of Real Estate

During the nine months ended September 30, 2025, the Company sold two properties for $52.6 million and recorded a gain totaling $8.9 million which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

During the nine months ended September 30, 2024, the Company sold ten properties for aggregate consideration of $111.7 million and recorded a gain totaling $7.4 million which is included in gain on sale of real estate, net within the condensed consolidated statements of operations.

Loss on Sale of Interests in Unconsolidated Entities

During the nine months ended September 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale.

Impairment of Real Estate Assets

During the nine months ended September 30, 2025, the Company recognized an $18.8 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value.

During the nine months ended September 30, 2024, the Company recognized a $1.7 million impairment of real estate assets as a result of the Company accepting offers below book value on three properties and an $85.8 million impairment of real estate assets on the Company's development property in Aventura, FL due to negotiations for rent relief with existing tenants that began during the second quarter of 2024.

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Equity in Loss of Unconsolidated Entities

The increase in loss for the nine months ended September 30, 2025 is driven by the recognition of $8.5 million of other-than-temporary impairment losses which was partially offset by an increase in income of $0.7 million from the Company's investment in the UTC JV and a decrease of losses of $1.4 million related the Company's other investments, primarily due to the sale of two interests in unconsolidated entities.

Interest and Other Income (Expense), Net

For the nine months ended September 30, 2025 interest income and other income (expense), net decreased by $0.3 million due to a decrease in interest income of $1.2 million due to a decrease in interest rates and a decrease of cash on hand. The increase was offset by a decrease of other expenses of $0.9 million, primarily driven by a decrease in settlement expenses.

Interest Expense

The decrease of $3.7 million in interest expense for the nine months ended September 30, 2025 was driven by partial Term Loan Facility pay downs since the third quarter of 2024, offset by an increase in amortization expense of deferred financing costs.

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 certain development expenditures. Property rental income, which is the Company's primary source of operating cash flow, did not fully fund Obligations incurred during the nine months ended September 30, 2025 and the Company recorded net operating cash outflows of $33.7 million. Additionally, the Company generated net investing cash inflows of $43.6 million during the nine months ended September 30, 2025, which were driven by asset sales and partially offset by development expenditures.

Obligations are projected to continue to exceed property rental income and we expect to fund such Obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and potential financing transactions, subject to any approvals that may be required under the Term Loan Agreement. Below is our sales activity since we began our capital recycling program:

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As of November 13, 2025, we had four assets under contract for sale for total anticipated proceeds of $240.8 million. One asset is a development asset and is subject to a pursuit of a master plan amendment and customary due diligence. All are subject to closing conditions.

As previously disclosed, on May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the "Term Loan Amendment") to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, "Available Cash") is equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on July 31, 2023; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement (the "Incremental Funding Facility").

Additionally, the Term Loan Amendment provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent's right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement. The Third Term Loan Amendment (as defined in Note 6 - Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) executed on June 16, 2022 provided exceptions to this right.

Our Term Loan Facility includes a $400.0 million Incremental Funding Facility, access to which is subject to rental income from non-Sears Holdings tenants of at least $200.0 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, as disclosed in Note 6. There is no assurance of the Company's ability to access the Incremental Funding Facility.

During the nine months ended September 30, 2025, we repaid $40.0 million against the principal of the Term Loan Facility. Our outstanding balance as of September 30, 2025, is $200.0 million.

On July 28, 2025, the Company exercised its extension option and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid the incremental facility fee of $4.0 million. All other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.

See Note 1 - Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of liquidity and going concern.

Cash Flows for the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

The following table summarizes the Company's cash flow activities for the nine months ended September 30, 2025 and 2024, respectively (in thousands):

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Cash Flows from Operating Activities

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses. Rental revenues are not sufficient to cover these expenses.

Cash Flows from Investing Activities

Significant components of net cash provided by investing activities include:

Cash Flows from Financing Activities

Significant components of net cash used in financing activities include:

Dividends and Distributions

The Company's Board of Trustees did not declare dividends on the Company's Class A common shares during the nine months ended September 30, 2025 and 2024, respectively. The last dividend on the Company's Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019.

The Company's Board of Trustees also declared the following dividends on the Company's Series A Preferred Shares during 2025 and 2024:

Our Board of Trustees will continue to assess the Company's investment opportunities and its expectations of taxable income in its determination of future distributions.

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Off-Balance Sheet Arrangements

The Company accounts for its investments in entities that it does not have a controlling interest in or is not the primary beneficiary using the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated entities. As of September 30, 2025 and December 31, 2024, we did not have any off balance sheet financing arrangements.

Contractual Obligations

There have been no significant changes in the contractual obligations disclosed in our Form 10-K for the year ended December 31, 2024.

Capital Expenditures

During the three and nine months ended September 30, 2025, the Company invested $3.8 million and $21.8 million, respectively, in our consolidated properties. The Company did not make any investments in its unconsolidated joint ventures during the three months ended September 30, 2025. The Company invested $0.4 million in its unconsolidated joint ventures during the nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, the Company invested $3.3 million and $25.7 million, respectively, in our consolidated properties and an additional $5.8 million and $9.0 million, respectively, in our unconsolidated joint ventures.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, we accrue 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 material contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company's Chief Executive Officer, and the Company's Chief Financial Officer violated the federal securities laws. The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company's alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company's value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152. On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190. On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152. The Derivative Actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company's Chief Executive Officer, the Company's Chief Financial Officer, and current and former members of the Company's Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the Derivative Actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company's corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys' and experts' fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On February 13, 2025, the parties to the Sidhu Derivative Action and the Wallen Derivative Action filed a stipulation and proposed order seeking to consolidate the Sidhu Derivative Action and the Wallen Derivative Action and appoint lead counsel. On August 29, 2025, the parties in the Cheroti Derivative Action filed a stipulation and proposed order seeking to stay the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action

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and the Wallen Derivative Action (the "Consolidated Derivative Action") and appointed lead counsel. On November 7, 2025, the parties in the Consolidated Derivative Action filed a stipulation and proposed order seeking to stay the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. 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 condensed consolidated financial position, results of operations or liquidity of the Company.

See Note 9 - Commitments and Contingencies Litigation and Other Matters of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of the Litigation and related matters.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2024 in Management's Discussion and Analysis of Financial Condition and Results of Operations. For the nine months ended September 30, 2025, there were no material changes to these policies.

Non-GAAP Supplemental Financial Measures and Definitions

The Company makes reference to NOI-cash basis and NOI-cash basis at share which are financial measures that include adjustments to GAAP.

Net Operating Income (Loss)-cash basis ("NOI"-cash basis) and Net Operating Income (Loss)-cash basis at share ("NOI-cash basis at share")

NOI - cash basis is defined as income from property operations less property operating expenses, adjusted for variable items such as termination fee income, as well as non-cash items such as straight-line rent and amortization of lease intangibles. Other real estate companies may use different methodologies for calculating NOI-cash basis, and accordingly the Company's depiction of NOI-cash basis may not be comparable to other real estate companies. The Company believes NOI-cash basis 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 NOI-cash basis at share, which includes its proportional share of Unconsolidated Properties. The Company does not control any of the joint ventures constituting such properties and NOI-cash basis at share does not reflect our legal claim with respect to the economic activity of such joint ventures. We have included this adjustment because 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 operating agreements of the Unconsolidated Properties generally allow each investor to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.

The Company also considers NOI-cash basis and NOI-cash basis at share 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-cash basis and NOI-cash basis at share should only be used as an alternative measure of the Company's financial performance.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

Neither NOI-cash basis nor NOI-cash basis at share 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-cash basis and NOI-cash basis at share to GAAP net loss for the three and nine months ended September 30, 2025 and 2024 (in thousands):