Seritage Growth Properties - FORM 8-K - EX-99..2

Attached files

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8-K - 8-K - Seritage Growth Properties	srg-8k_20180227.htm
EX-99..1 - EX-99..1 - Seritage Growth Properties	srg-ex991_6.htm

SUPPLEMENTAL INFORMATION \| PERIOD ENDED DECEMBER 31, 2017	Exhibit 99.2

INTRODUCTION

Background

Seritage Growth Properties (NYSE: SRG) (the “Company”) is a fully-integrated, self-administered and self-managed retail REIT with interests in 230 wholly-owned properties and 23 joint venture properties totaling over 39 million square feet of gross leasable area (“GLA”) across 49 states and Puerto Rico. Pursuant to a master lease (the “Master Lease”), 148 of the Company’s wholly-owned properties are leased to Sears Holdings Corporation (“Sears Holdings”) and are operated under either the Sears or Kmart brand. The Master Lease provides the Company with the right to recapture certain space from Sears Holdings at each property for retenanting or redevelopment purposes. At 72 properties, third-party tenants under direct leases occupy a portion of leasable space alongside Sears and Kmart, 51 properties are leased only to third parties and 31 properties were vacant. The Company also owns 50% interests in 23 properties through joint venture investments with GGP Inc. (“GGP”) (NYSE: GGP), Simon Property Group Inc. (“Simon”) (NYSE: SPG), and The Macerich Company (“Macerich”) (NYSE: MAC). A substantial majority of the space at the Company’s joint venture properties is also leased to Sears Holdings under master lease agreements (the “JV Master Leases”) that provide for similar recapture rights as the Master Lease governing the Company’s wholly-owned properties.

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

On July 7, 2015, the Company completed the Transaction with Sears Holdings and commenced operations. The Company’s only operations prior to the completion of the Rights Offering and Transaction were those incidental to the completion of such activities.

During the year ended December 31, 2017, the Company completed transactions whereby it (i) sold its 50% interests in 13 Original JV Properties and (ii) sold a 50% interest in five Wholly Owned Properties and retained a 50% interest in five new joint venture properties (the “New JV Properties” and, together with the Original JV Properties, the “JV Properties”).

Effects of Natural Disasters

While the Company continues to assess the impact of the natural disasters (wildfires in California and Hurricanes Harvey, Irma, and Maria) that occurred during the year ended December 31, 2017 on our operations our ability to collect rent from tenants, we do not believe these natural disasters will have a material impact on our operating results or financial position. All stores occupied by Sears Holdings are currently open for business and the Company has not experienced interruptions in rental payments nor does it expect to incur material capital expenditures to repair any property damage.

General Information

Unless the context indicates otherwise, references in this supplemental information package (the "Supplemental") to "Seritage Growth,” “Seritage,” the “Company,” or “SRG” refer to Seritage Growth Properties and its subsidiaries. Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.


TABLE OF CONTENTS

SERITAGE GROWTH PROPERTIES

SUPPLEMENTAL INFORMATION

PERIOD ENDED DECEMBER 31, 2017

		Page
COMPANY INFORMATION		1

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets		2
Consolidated Statements of Operations		3

SUPPLEMENTAL FINANCIAL INFORMATION
Market Capitalization and Financial Ratios		4
Total Net Operating Income		5
EBITDA and Adjusted EBITDA		6
Funds from Operations and Company FFO		7
Additional Information		8

PROPERTY INFORMATION
Portfolio Overview		10
Leasing Activity		13
Redevelopment Projects		14
Termination Properties		18
Joint Venture Properties		20
Wholly Owned Properties		22

DISCLOSURES
Non-GAAP Measures		29
Forward-Looking Statements		30


COMPANY INFORMATION

Company Contacts
Benjamin Schall	President and Chief Executive Officer
Brian Dickman	EVP and Chief Financial Officer
Matthew Fernand	EVP and General Counsel
James Bry	EVP, Development and Construction
Mary Rottler	EVP, Leasing and Operations
ir@seritage.com	Investor Relations and Communications	646.277.1268

Summary Information

December 31, 2017

(In thousands, except per share, PSF and ratio amounts)

	Three Months Ended December 31,						Year Ended December 31,
Financial Results	2017			2016			2017			2016
Net loss (page 3)	$	(70,378	)	$	(26,483	)	$	(120,813	)	$	(91,009	)
Total NOI (page 5)		39,560			48,710			174,758			190,492
FFO (page 7)		11,131			34,503			91,690			106,475
Company FFO (page 7)		11,522			30,035			81,797			127,326
Net loss per diluted share (page 3)	$	(1.27	)	$	(0.48	)	$	(2.19	)	$	(1.64	)
FFO per diluted share (page 7)		0.20			0.62			1.65			1.92
Company FFO per diluted share (page 7)		0.21			0.54			1.47			2.29
Weighted average diluted shares used in EPS computations		34,094			31,418			33,804			31,416
Weighted average diluted shares used in FFO computations		55,914			55,594			55,624			55,592
Stock trading price range	$39.68 to $46.34			$42.48 to $50.76			$38.76 to $48.98			$37.51 to $56.47

Financial Ratios (page 4)							December 31, 2017			December 31, 2016
Total debt to total market capitalization								37.5	%		33.1	%
Net debt to adjusted EBITDA								6.5	x		5.6	x
Adjusted EBITDA to cash interest expense								2.4	x		3.2	x

Property Data (page 10)							December 31, 2017			December 31, 2016
Number of properties								253			266
Gross leasable area (total / at share)							39,381 / 37,270			42,249 / 39,522
Percentage leased (total / at share)							80.8% / 80.0%			99.2% / 99.2%

				As of December 31, 2017
							% of Total
Tenant				Annual Rent			Annual Rent			Annual Rent PSF
Sears Holdings				$	102,645			47.8	%	$	4.57
In-Place Third-Party Leases					48,624			22.6	%		12.73
SNO Third-Party Leases					63,407			29.6	%		17.94
Total				$	214,676			100.0	%	$	7.20

				As of December 31, 2016
							% of Total
Tenant				Annual Rent			Annual Rent			Annual Rent PSF
Sears Holdings				$	148,167			64.0	%	$	4.40
In-Place Third-Party Leases					42,356			18.3	%		12.74
SNO Third-Party Leases					41,152			17.8	%		18.55
Total				$	231,675			100.0	%	$	5.91

- 1 -


CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet (unaudited)

December 31, 2017

(In thousands, except share and per share amounts)

	December 31, 2017			December 31, 2016
ASSETS
Investment in real estate
Land	$	799,971		$	840,021
Buildings and improvements		829,168			839,663
Accumulated depreciation		(139,483	)		(89,940	)
		1,489,656			1,589,744
Construction in progress		224,904			55,208
Net investment in real estate		1,714,560			1,644,952
Investment in unconsolidated joint ventures		282,990			425,020
Cash and cash equivalents		241,569			52,026
Restricted cash		175,665			87,616
Tenant and other receivables, net		30,787			23,172
Lease intangible assets, net		310,098			464,399
Prepaid expenses, deferred expenses and other assets, net		20,148			15,052
Total assets	$	2,775,817		$	2,712,237

LIABILITIES AND EQUITY
Liabilities
Mortgage loans payable, net	$	1,202,314		$	1,166,871
Unsecured term loan, net		143,210			—
Accounts payable, accrued expenses and other liabilities		109,433			121,055
Total liabilities		1,454,957			1,287,926

Commitments and contingencies

Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 32,415,734 and 25,843,251 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively		324			258
Class B common shares $0.01 par value; 5,000,000 shares authorized; 1,328,866 and 1,589,020 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively		13			16
Class C common shares $0.01 par value; 50,000,000 shares authorized; 3,151,131 and 5,754,685 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively		31			58
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of December 31, 2017; liquidation preference of $70,000		28			—
Additional paid-in capital		1,116,060			925,563
Accumulated deficit		(229,760	)		(121,338	)
Total shareholders' equity		886,696			804,557
Non-controlling interests		434,164			619,754
Total equity		1,320,860			1,424,311
Total liabilities and equity	$	2,775,817		$	2,712,237

- 2 -


CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Operations (unaudited)

December 31, 2017

(In thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2017			2016			2017			2016
REVENUE
Rental income	$	38,966		$	49,684		$	178,492		$	186,421
Tenant reimbursements		14,712			16,512			62,525			62,253
Total revenue		53,678			66,196			241,017			248,674
EXPENSES
Property operating		5,715			4,334			19,700			21,510
Real estate taxes		9,946			12,580			45,653			43,681
Depreciation and amortization		91,878			55,754			262,171			177,119
General and administrative		11,263			4,365			27,902			17,469
Litigation charge		—			—			—			19,000
Provision for doubtful accounts		39			—			158			269
Acquisition-related expenses		—			—			—			73
Total expenses		118,841			77,033			355,584			279,121
Operating loss		(65,163	)		(10,837	)		(114,567	)		(30,447	)
Equity in (loss) income of unconsolidated joint ventures		(3,562	)		151			(7,788	)		4,646
Gain on sale of interests in unconsolidated joint ventures		16,573			—			60,302			—
Gain on sale of real estate		(1,571	)		—			11,447			—
Interest and other income		405			70			877			266
Interest expense		(17,040	)		(16,294	)		(70,112	)		(63,591	)
Unrealized (loss) gain on interest rate cap		(15	)		520			(701	)		(1,378	)
Loss before income taxes		(70,373	)		(26,390	)		(120,542	)		(90,504	)
Provision for income taxes		(5	)		(93	)		(271	)		(505	)
Net loss		(70,378	)		(26,483	)		(120,813	)		(91,009	)
Net loss attributable to non-controlling interests		27,167			11,479			47,059			39,451
Net loss attributable to Seritage	$	(43,211	)	$	(15,004	)	$	(73,754	)	$	(51,558	)
Preferred dividends		(245	)		—			(245	)		—
Net loss attributable to Seritage common shareholders	$	(43,456	)	$	(15,004	)	$	(73,999	)	$	(51,558	)

Net loss per share attributable to Class A and Class C common shareholders - Basic and diluted	$	(1.27	)	$	(0.48	)	$	(2.19	)	$	(1.64	)
Weighted average Class A and Class C common shares outstanding - Basic and diluted		34,094			31,418			33,804			31,416

- 3 -


SUPPLEMENTAL FINANCIAL INFORMATION

Market Capitalization and Financial Ratios

December 31, 2017

(In thousands, except per share and ratio amounts)

	As of			As of
Equity Market Capitalization	December 31, 2017			December 31, 2016
Class A common shares outstanding		32,416			25,843
Class C common shares outstanding		3,151			5,755
OP units outstanding		20,218			24,176
Total shares & units outstanding		55,785			55,774
Share Price	$	40.46		$	42.71
Equity market capitalization	$	2,257,061		$	2,382,108

Total Market Capitalization
Equity market capitalization	$	2,257,061		$	2,382,108
Total debt		1,355,562			1,181,197
Total market capitalization	$	3,612,623		$	3,563,305

Financial Ratios
Total debt to total market capitalization		37.5	%		33.1	%

Total debt	$	1,355,562		$	1,181,197
Cash and cash equivalents		(241,569	)		(52,026	)
Restricted cash		(175,665	)		(87,616	)
Net Debt	$	938,328		$	1,041,555

Net debt to Adjusted EBITDA (1)		6.5	x		5.6	x

Gross real estate investments	$	2,397,731		$	2,328,482
Investment in unconsolidated joint ventures		282,990			425,020
Total real estate investments	$	2,680,721		$	2,753,502

Net debt to total real estate investments		35.0	%		37.8	%

Interest expense (net of amounts capitalized) (2)	$	70,112		$	63,591
Amortization of deferred financing costs (2)		(8,719	)		(5,361	)
Cash interest expense (net of amounts capitalized) (2)	$	61,393		$	58,230

Adjusted EBITDA to cash interest expense (1)(2)		2.4	x		3.2	x

(1)	Adjusted EBITDA for the years ended December 31, 2017 and December 31, 2016, respectively.

(2)	For the years ended December 31, 2017 and December 31, 2016, respectively.

- 4 -


SUPPLEMENTAL FINANCIAL INFORMATION

Total Net Operating Income

December 31, 2017

(In thousands)


	Three Months Ended December 31,						Year Ended December 31,
NOI and Total NOI	2017			2016			2017			2016
Net loss	$	(70,378	)	$	(26,483	)	$	(120,813	)	$	(91,009	)
Termination fee income		(1,954	)		(5,288	)		(19,314	)		(5,288	)
Depreciation and amortization		91,878			55,754			262,171			177,119
General and administrative expenses		11,263			4,365			27,902			17,469
Litigation charge		—			—			—			19,000
Acquisition-related expenses		—			—			—			73
Equity in loss (income) of unconsolidated joint ventures		3,562			(151	)		7,788			(4,646	)
Gain on sale of interests in unconsolidated joint ventures		(16,573	)		—			(60,302	)		—
Gain on sale of real estate		1,571			—			(11,447	)		—
Interest and other income		(405	)		(70	)		(877	)		(266	)
Interest expense		17,040			16,294			70,112			63,591
Unrealized loss (gain) on interest rate cap		15			(520	)		701			1,378
Provision for income taxes		5			93			271			505
NOI	$	36,024		$	43,994		$	156,192		$	177,926
NOI of unconsolidated joint ventures		5,219			6,554			23,547			26,611
Straight-line rent adjustment (1)		(1,522	)		(1,642	)		(3,918	)		(13,168	)
Above/below market rental income/expense (1)		(161	)		(196	)		(1,063	)		(877	)
Total NOI	$	39,560		$	48,710		$	174,758		$	190,492

	As of December 31,
Annualized Total NOI	2017			2016
Total NOI (per above)	$	39,560		$	48,710
Period adjustments (2)		(698	)		(199	)
Adjusted Total NOI		38,862			48,512
Annualize		x 4			x 4
Adjusted Total NOI annualized		155,448			194,046
Plus: estimated annual Total NOI from SNO leases		62,376			39,217
Less: estimated annual Total NOI from associated space to be recaptured from Sears		(4,994	)		(6,586	)
Annualized Total NOI	$	212,830		$	226,677

(1)	Includes adjustments for unconsolidated joint ventures.

(2)	Includes adjustments to account for leases not in place for the full period.

- 5 -


SUPPLEMENTAL FINANCIAL INFORMATION

EBITDA and Adjusted EBITDA

December 31, 2017

(In thousands)

	Three Months Ended December 31,						Year Ended December 31,
EBITDA and Adjusted EBITDA	2017			2016			2017			2016
Net loss	$	(70,378	)	$	(26,483	)	$	(120,813	)	$	(91,009	)
Depreciation and amortization		91,878			55,754			262,171			177,119
Depreciation and amortization (unconsolidated joint ventures)		5,371			5,465			23,954			21,118
Interest expense		17,040			16,294			70,112			63,591
Provision for income and other taxes		5			93			271			505
EBITDA	$	43,916		$	51,123		$	235,695		$	171,324
Termination fee income		(1,954	)		(5,288	)		(19,314	)		(5,288	)
Unrealized loss (gain) on interest rate cap		15			(520	)		701			1,378
Litigation charge		—			—			—			19,000
Acquisition-related expenses		—			—			—			73
Up-front hiring and personnel costs		—			—			—			328
Gain on sale of interests in unconsolidated joint ventures		(16,573	)		—			(60,302	)		—
Gain on sale of real estate		1,571			—			(11,447	)		—
Adjusted EBITDA	$	26,975		$	45,315		$	145,333		$	186,815

- 6 -


SUPPLEMENTAL FINANCIAL INFORMATION

Funds from Operations and Company FFO

December 31, 2017

(In thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
FFO and Company FFO	2017			2016			2017			2016
Net loss	$	(70,378	)	$	(26,483	)	$	(120,813	)	$	(91,009	)
Real estate depreciation and amortization (consolidated properties)		91,385			55,521			260,543			176,366
Real estate depreciation and amortization (unconsolidated joint ventures)		5,371			5,465			23,954			21,118
Gain on sale of interests in unconsolidated joint ventures		(16,573	)		—			(60,302	)		—
Gain on sale of real estate		1,571			—			(11,447	)		—
Dividends on preferred shares		(245	)		—			(245	)		—
FFO attributable to common shareholders and unitholders	$	11,131		$	34,503		$	91,690		$	106,475
Termination fee income		(1,954	)		(5,288	)		(19,314	)		(5,288	)
Unrealized loss (gain) on interest rate cap		15			(520	)		701			1,378
Amortization of deferred financing costs		2,330			1,340			8,720			5,360
Litigation charge		—			—			—			19,000
Acquisition-related expenses		—			—			—			73
Up-front hiring and personnel costs		—			—			—			328
Company FFO attributable to common shareholders and unitholders	$	11,522		$	30,035		$	81,797		$	127,326

FFO per diluted common share and unit	$	0.20		$	0.62		$	1.65		$	1.92
Company FFO per diluted common share and unit	$	0.21		$	0.54		$	1.47		$	2.29

Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		34,094			31,418			33,804			31,416
Weighted average OP units outstanding		21,820			24,176			21,820			24,176
Weighted average common shares and units outstanding		55,914			55,594			55,624			55,592

- 7 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information

December 31, 2017

(In thousands)

	As of			As of
Debt Summary	December 31, 2017			December 31, 2016
Mortgage notes payable	$	1,210,562		$	1,181,197
Interest rate	LIBOR + 470			LIBOR + 465
Maturity	July 2019			July 2019
Extension options (subject to terms and conditions)	(2) one-year options			(2) one-year options

Unsecured Term Loan	$	145,000			—
Interest rate		6.75	%		—
Maturity	December 2018				—

Restricted Cash
Reserve for redevelopment projects / capital expenditures	$	137,996		$	49,717
Reserve for property operating expenses		21,735			19,157
Reserve for environmental remediation		10,751			11,769
Other, including prepaid rental income		2,679			2,927
Reserve for deferred maintenance		2,504			4,046
Total restricted cash	$	175,665		$	87,616

Prepaid Expenses, Deferred Expenses and Other Assets
FF&E	$	6,290		$	5,447
Prepaid real estate taxes		2,732			194
Prepaid insurance		2,352			2,557
Deferred expenses		4,813			1,574
Other assets		2,493			519
Other prepaid expenses		1,445			1,459
Interest rate cap		23			724
Escrowed recapture fees		—			2,578
Total prepaid expenses, deferred expenses and other assets	$	20,148		$	15,052

Accounts Payable, Accrued Expenses and Other Liabilities
Accrued development expenditures	$	21,449		$	6,369
Accrued real estate taxes		17,091			23,942
Dividends payable		14,559			14,132
Below-market leases		14,476			16,827
Environmental reserve		11,322			11,584
Unearned tenant reimbursements		10,522			4,039
Accounts payable and accrued expenses		9,588			16,055
Prepaid rental income		4,156			1,979
Accrued interest		3,689			3,004
Deferred maintenance		2,581			4,124
Litigation charge		—			19,000
Total accounts payable, accrued expenses and other liabilities	$	109,433		$	121,055

- 8 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information (cont’d)

December 31, 2017

(In thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
Select Non-Cash Items	2017			2016			2017			2016
Straight-line rental income
Wholly-owned	$	1,355		$	1,620		$	3,719		$	12,862
Joint ventures		167			22			199			306
Total	$	1,522		$	1,642		$	3,918		$	13,168

Net amortization of above/below market rental income/expense
Wholly-owned	$	139		$	161		$	720		$	680
Joint ventures		22			35			139			197
Total	$	161		$	196		$	859		$	877

Amortization of deferred financing costs	$	(2,329	)	$	(1,340	)	$	(8,719	)	$	(5,361	)
Stock-based compensation expense		(5,851	)		(267	)		(7,018	)		(1,068	)

Dividends
Dividends per Class A and Class C common share	$	0.25		$	0.25		$	1.00		$	1.00
Declaration date	10/24/17			11/01/16
Record date	12/29/17			12/31/16
Payment date	01/11/18			01/12/17

- 9 -


PROPERTY INFORMATION

Portfolio Overview

December 31, 2017

(In thousands, except number of properties/leases and PSF amounts)

Portfolio Summary

The following table provides a summary of the Company’s portfolio, including JV Properties presented at the Company’s proportional share, as of December 31, 2017:

	Consolidated			Unconsolidated			Seritage
	Portfolio			Joint Ventures			Total
Number of properties		230			23			253

Total GLA		35,159			4,222			39,381
At share		35,159			2,111			37,270

Leased GLA		27,834			3,980			31,814
At share		27,834			1,990			29,824

Percentage leased		79.2	%		94.3	%		80.8	%
At share		79.2	%		94.3	%		80.0	%

Property Type

As of December 31, 2017, the portfolio included 120 properties characterized as attached to regional malls and 133 characterized as shopping center or freestanding properties. The following table provides a summary of the portfolio, including JV Properties presented at the Company’s proportional share, based on these property types and signed leases as of December 31, 2017:

	Number of		Leased		Annual		Rent
Property Type (1)	Properties		GLA		Rent		PSF		Leased
Mall		120		16,582	$	118,516	$	7.15		85.3	%
Shopping Center		133		13,242		96,159		7.26		74.3	%
Total		253		29,824	$	214,676	$	7.20		80.0	%

(1)	Company classification. Mall properties are attached to regional malls; Shopping Center properties include properties attached to, within or adjacent to neighborhood shopping or power centers, as well as freestanding properties.

Tenant Overview

The following table provides a summary of annual base rent for the portfolio, including JV Properties presented at the Company’s proportional share, based on signed leases as of December 31, 2017:

	Number of		Leased		% of Total			Annual		% of Total			Annual
Tenant	Leases		GLA		Leased GLA			Rent		Annual Rent			Rent PSF
Sears Holdings (1)		170		22,471		75.4	%	$	102,645		47.8	%	$	4.57
In-Place Third-Party Leases		225		3,819		12.8	%		48,624		22.6	%		12.73
SNO Third-Party Leases		114		3,534		11.8	%		63,407		29.6	%		17.94
Sub-Total Third-Party Leases		339		7,353		24.6	%		112,031		52.2	%		15.24
Total		509		29,824		100.0	%	$	214,676		100.0	%	$	7.20

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

- 10 -


PROPERTY INFORMATION

Portfolio Overview (cont’d)

December 31, 2017

(In thousands, except number of properties and PSF amounts)

Top Tenants

The following table lists the top tenants in the portfolio, including JV Properties presented at the Company’s proportional share, based on signed leases as of December 31, 2017:

(dollars in thousands)
	Number of		Annual		% of Total
Tenant	Leases		Rent		Annual Rent			Concepts/Brands
Sears Holdings (1)		170	$	102,645		47.8	%	Sears, Sears Auto Center, Kmart
Round One Entertainment		7		6,821		3.2	%
Dave & Busters		7		6,328		2.9	%
At Home		10		5,896		2.7	%
Burlington Stores		8		5,204		2.4	%
Cinemark		4		4,899		2.3	%
Dick's Sporting Goods		5		4,640		2.2	%
Nordstrom Rack		6		4,385		2.0	%
AMC		3		4,202		2.0	%
Primark		3		3,925		1.8	%
Ross Dress for Less		7		3,652		1.7	%	Ross Dress for Less, dd's Discounts
Lands' End (2)		44		3,643		1.7	%
24 Hour Fitness		3		2,909		1.4	%
TJX Companies		7		2,849		1.3	%	TJ Maxx, Marshalls, HomeGoods, HomeSense, Sierra Trading Post
PetSmart		5		2,391		1.1	%

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

(2)

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

- 11 -


PROPERTY INFORMATION

Portfolio Overview (cont’d)

December 31, 2017

(In thousands, except number of leases and PSF amounts)

Geographic Summary

The following table sets forth information regarding the geographic diversification of the portfolio, including JV Properties presented at the Company’s proportional share, based on signed leases as of December 31, 2017:

(in thousands except property count and PSF data)
	Number of		Annual		% of Total			Rent
State	Properties		Rent		Annual Rent			PSF
California		41	$	45,089		21.0	%	$	6.90
Florida		26		24,287		11.3	%		6.36
New York		11		13,061		6.1	%		7.03
Texas		16		10,509		4.9	%		4.29
Illinois		11		9,050		4.2	%		4.30
New Jersey		5		8,568		4.0	%		13.51
Virginia		6		8,135		3.8	%		6.69
Pennsylvania		7		7,027		3.3	%		8.58
Puerto Rico		6		7,023		3.3	%		7.68
Arizona		12		6,688		3.1	%		5.17
Total Top 10		141	$	139,437		65.0	%	$	6.44
Other (1)		112		75,239		35.0	%		9.20
Total		253	$	214,676		100.0	%	$	7.20

(1)	Includes 40 states

- 12 -


PROPERTY INFORMATION

Leasing Activity

December 31, 2017

(In thousands, except number of leases and PSF amounts)

Signed Leases

The table below provides a summary of the Company’s leasing activity since inception through December 31, 2017, including JV Properties presented at the Company’s proportional share:

(in thousands except number of leases and PSF data)

	Total								Release of Sears Holdings Space
			Leased		Annual		Annual				Leased		Annual		Annual		Releasing
Period	Leases		GLA		Rent		Rent PSF		Leases		GLA		Rent		Rent PSF		Multiple
2015		9		154	$	4,650	$	30.28		6		130	$	3,820	$	29.41		4.4	x
Q1 2016		7		214		6,990		32.60		7		214		6,990		32.60		5.7	x
Q2 2016		15		422		7,240		17.15		13		363		6,440		17.75		4.7	x
Q3 2016		14		543		7,470		13.74		12		456		6,250		13.70		4.0	x
Q4 2016		29		891		14,900		16.72		27		849		13,930		16.41		4.1	x
2016		65		2,070		36,600		17.68		59		1,882		33,610		17.86		4.5	x
Q1 2017		22		535		8,780		16.41		21		530		8,660		16.34		4.0	x
Q2 2017		28		598		11,340		18.95		26		592		11,240		18.99		3.7	x
Q3 2017		21		601		9,770		16.25		18		486		8,730		17.97		4.6	x
Q4 2017		23		872		14,827		17.00		21		868		14,669		16.90		3.8	x
2017		94		2,606		44,717		17.16		86		2,476		43,299		17.49		4.0	x
Total		168		4,830	$	85,967	$	17.80		151		4,488	$	80,729	$	17.99		4.1	x

SNO Lease Summary

The table below provides a summary of the Company’s SNO leases from September 30, 2017 to December 31, 2017, including JV Properties presented at the Company’s proportional share:

(in thousands except number of leases and PSF data)							Total
	Number of						Annual			Annual
	SNO Leases			GLA			Rent			Rent PSF
As of September 30, 2017		104			3,017		$	53,868		$	17.85
Opened		(11	)		(283	)		(4,024	)		14.22
Terminated		(2	)		(72	)		(1,264	)		17.56
Signed		23			872			14,827			17.00
As of December 31, 2017		114			3,534		$	63,407		$	17.94

- 13 -


PROPERTY INFORMATION

Redevelopment Projects

December 31, 2017

(In thousands, except number of leases)

The table below summarizes the Company’s wholly-owned development activity from inception through December 31, 2017:

(in thousands)
					Estimated		Estimated								Estimated
Estimated	Number		Project		Development		Project		Projected Annual Income (2)						Incremental
Project Costs (1)	of Projects		Square Feet		Costs (1)		Costs (1)		Total		Existing		Incremental		Yield (3)
< $10,000		24		1,427	$	104,900	$	104,900	$	19,600	$	5,200	$	14,400
$10,001 - $20,000 (4)		25		2,525		331,300		351,200		52,500		15,300		37,100
> $20,000		14		2,245		558,000		610,800		84,500		17,900		66,600
Announced projects		63		6,197	$	994,200	$	1,066,900	$	156,600	$	38,400	$	118,100	10.5 - 11.5%
Acquired projects		15				63,600		63,600
Total projects		78			$	1,057,800	$	1,130,500

(1)	Total estimated development costs exclude, and total estimated project costs include, termination fees to recapture 100% of certain properties.

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

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

(4)	Includes Saugus, MA project which has been temporarily postponed while the Company identifies a new lead tenant. The original lead tenant was unable to obtain a use permit at the site.

- 14 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

December 31, 2017

(In thousands, except number of leases)

The tables below provide brief descriptions of each of the redevelopment projects originated on the Company’s platform since its inception:

Total Project Costs under $10 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

King of Prussia, PA

Repurpose former auto center space for Outback Steakhouse, Yard House and small shop retail

29,100

Substantially complete

Merrillville, IN

Termination property; redevelop existing store for At Home, Powerhouse Gym and small shop retail

132,000

Substantially complete

Elkhart, IN

Termination property; existing store has been released to Big R Stores

86,500

Substantially complete

San Antonio, TX

Recapture and repurpose auto center space for Orvis, Jared's Jeweler, Shake Shack and small shop retail

18,900

Substantially complete

Bowie, MD

Recapture and repurpose auto center space for BJ's Brewhouse

8,200

Substantially complete

Troy, MI

Partial recapture; redevelop existing store for At Home

100,000

Substantially complete

Roseville, MI

Partial recapture; redevelop existing store for At Home

100,400

Substantially complete

Henderson, NV

Termination property; redevelop existing store for At Home, Seafood City and additional retail

144,400

Substantially complete

Rehoboth Beach, DE

Partial recapture; redevelop existing store for Christmas Tree Shops andThat! and PetSmart

56,700

Substantially complete

Cullman, AL

Termination property; redevelop existing store for Bargain Hunt, Tractor Supply and Planet Fitness

99,000

Substantially complete

Jefferson City, MO

Termination property; redevelop existing store for Orscheln Farm and Home

96,000

Delivered to tenant

Albany, NY

Recapture and repurpose auto center space for BJ's Brewhouse and additional small shop retail

28,000

Delivered to tenant

Hagerstown, MD

Recapture and repurpose auto center space for BJ's Brewhouse, Verizon and additional restaurants

15,400

Delivered to tenant

Ft. Wayne, IN

Site densification; new outparcels for BJ's Brewhouse (substantially complete) and Chick-Fil-A (project expansion)

12,000

Underway

Q1 2018

Kearney, NE

Termination property; redevelop existing store for Marshall's, PetSmart and additional junior anchors

92,500

Underway

Q2 2018

Olean, NY

Partial recapture; redevelop existing store for Marshall's and additional retail

45,000

Underway

Q2 2018

Roseville, CA

Recapture and repurpose auto center space for AAA Auto Repair Center

10,400

Underway

Q2 2018

Guaynabo, PR

Partial recapture; redevelop existing store for Planet Fitness and Capri

56,100

Underway

Q3 2018

Florissant, MO

Site densification; new outparcel for Chick-Fil-A

5,000

Underway

Q3 2018

Dayton, OH

Recapture and repurpose auto center space for Outback Steakhouse and additional restaurants

14,100

Underway

Q4 2018

New Iberia, LA

Termination property; redevelop existing store for Rouses Supermarkets, additional junior anchors and small shop retail

93,100

Underway

Q1 2019

North Little Rock, AR

Recapture and repurpose auto center space for LongHorn Steakhouse and additional small shop retail

17,300

Q2 2018

Q2 2019

St. Clair Shores, MI

100% recapture; demolish existing store and develop site for new Kroger store

107,200

Q2 2018

Q2 2019

Oklahoma City, OK

Site densification; new fitness center for Vasa Fitness

59,500

Q3 2018

Q3 2019

- 15 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

December 31, 2017

(In thousands, except number of leases)

Total Project Costs $10 - $20 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Braintree, MA

100% recapture; redevelop existing store for Nordstrom Rack, Saks OFF 5th and additional retail

90,000

Substantially complete

Honolulu, HI

100% recapture; redevelop existing store for Longs Drugs (CVS), PetSmart and Ross Dress for Less

79,000

Substantially complete

West Jordan, UT

Partial recapture; redevelop existing store and attached auto center for Burlington Stores and additional retail

81,400

Substantially complete

Anderson, SC

100% recapture (project expansion); redevelop existing store for Burlington Stores, Sportsman's Warehouse, additional retail and restaurants

111,300

Substantially complete

Madison, WI

Partial recapture; redevelop existing store for Dave & Busters, Total Wine & More, additional retail and restaurants

75,300

Delivered to tenant

Thornton, CO

Termination property; redevelop existing store for Vasa Fitness and additional junior anchors

191,600

Underway

Q1 2018

Fairfax, VA

Partial recapture; redevelop existing store and attached auto center for Dave & Busters, Seasons 52, additional junior anchors and restaurants

110,300

Underway

Q1 2018

Orlando, FL

100% recapture; demolish and construct new buildings for Floor & Décor, Orchard Supply Hardware, LongHorn Steakhouse, Olive Garden, additional small shop retail and restaurants

139,200

Underway

Q2 2018

Springfield, IL

Termination property; redevelop existing store for Burlington Stores, Binny's Beverage Depot, Orangetheory Fitness, Outback Steakhouse, CoreLife Eatery, additional junior anchors and small shop retail

133,400

Underway

Q2 2018

North Miami, FL

100% recapture; redevelop existing store for Michael's, PetSmart and Ross Dress for Less

124,300

Underway

Q2 2018

Hialeah, FL

100% recapture; redevelop existing store for Bed, Bath & Beyond, Ross Dress for Less and additional junior anchors to join current tenant, Aldi

88,400

Underway

Q2 2018

Cockeysville, MD

Partial recapture; redevelop existing store for HomeGoods, Michael's Stores, additional junior anchors and restaurants

83,500

Underway

Q2 2018

North Hollywood, CA

Partial recapture; redevelop existing store for Burlington Stores and additional junior anchors

79,800

Underway

Q3 2018

Salem, NH

Site densification; new theatre for Cinemark

Recapture and repurpose auto center for restaurant space

71,200

Underway

Q3 2018

Charleston, SC

100% recapture (project expansion); redevelop existing store and detached auto center for Burlington Stores and additional retail

126,700

Underway

Q3 2018

Paducah, KY

Termination property; redevelop existing store for Burlington Stores and additional retail

102,300

Underway

Q3 2018

Warwick, RI

Termination property; repurpose auto center space for BJ's Brewhouse and

additional retail Redevelop existing store for At Home and Raymour & Flanigan (project expansion)

190,700

Underway

Q4 2018

Temecula, CA

Partial recapture; redevelop existing store and detached auto center for Round One, small shop retail and restaurants

65,100

Underway

Q4 2018

Canton, OH

Partial recapture; redevelop existing store for Dave & Busters and restaurants

83,900

Underway

Q2 2019

North Riverside, IL

Partial recapture; redevelop existing store and detached auto center for Round One, additional junior anchors, small shop retail and restaurants

103,900

Underway

Q2 2019

Santa Cruz, CA

Partial recapture; redevelop existing store for TJ Maxx, HomeGoods and additional junior anchors

62,200

Q1 2018

Q4 2018

Las Vegas, NV

Partial recapture; redevelop existing store for Round One Entertainment and additional retail

78,800

Q3 2018

Q3 2019

Yorktown Heights, NY

Partial recapture; redevelop existing store for 24 Hour Fitness and additional retail

85,200

Q3 2018

Q4 2019

- 16 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

December 31, 2017

(In thousands, except number of leases)

Total Project Costs $10 - $20 Million (cont’d) (1)

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Fairfield, CA

Partial recapture; redevelop existing store for Dave & Busters and additional junior anchors

68,400

Q3 2018

Q4 2019

(1)	Excludes Saugus, MA project which has been temporarily postponed while the Company identifies a new lead tenant. The original lead tenant was unable to obtain a use permit at the site.

Total Project Costs over $20 Million

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Memphis, TN

100% recapture; demolish and construct new buildings for LA Fitness, Nordstrom Rack, Ulta Beauty, Hopdoddy Burger Bar, additional junior anchors, restaurants and small shop retail

135,200

Substantially complete

West Hartford, CT

100% recapture; redevelop existing store and detached auto center for Buy Buy Baby, Cost Plus World Market, REI, Saks OFF Fifth, other junior anchors, Shake Shack and additional small shop retail

147,600

Underway

Q1 2018

St. Petersburg, FL

100% recapture; demolish and construct new buildings for Dick's Sporting Goods, Lucky's Market, PetSmart, Five Below, Chili's Grill & Bar, Pollo Tropical, LongHorn Steakhouse and additional small shop retail and restaurants

142,400

Underway

Q2 2018

Wayne, NJ

Partial recapture; redevelop existing store for Dave & Busters, additional junior anchors and restaurants

Recapture and repurpose detached auto center for Cinemark (project expansion)

NOTE: contributed to GGP II JV in July 2017

156,700

Underway

Q3 2018

Carson, CA

100% recapture (project expansion); redevelop existing store for Burlington Stores, Ross Dress for Less and additional retail

163,800

Underway

Q1 2019

Watchung, NJ

100% recapture; demolish full-line store and construct new buildings for HomeSense, Sierra Trading Post, Ulta Beauty and additional small shop retail and restaurants

Demolish detached auto center and construct a freestanding Cinemark

126,700

Underway

Q2 2019

Santa Monica, CA

100% recapture; redevelop existing building into premier, mixed-use asset featuring unique, small-shop retail and creative office space

96,500

Underway

Q4 2019

Aventura, FL

100% recapture; demolish existing store and construct new, multi-level open air retail destination featuring a leading collection of experiential shopping, dining and entertainment concepts alongside a treelined esplanade and activated plazas

216,600

Underway

Q4 2019

San Diego, CA

100% recapture; redevelop existing store into two highly-visible, multi-level buildings with exterior facing retail representing a premier mix of experiential shopping, dining, and entertainment concepts

206,000

Underway

Q4 2019

Austin, TX

100% recapture (project expansion); redevelop existing store for AMC Theatres, additional junior anchors and restaurants

177,400

Q2 2018

Q3 2019

Greendale, WI

Termination property; redevelop existing store and attached auto center for Dick's Sporting Goods, Round One Entertainment, additional junior anchors and restaurants

223,800

Q2 2018

Q4 2019

Anchorage, AK

100% recapture; redevelop existing store for Guitar Center, Safeway and additional junior anchors to join current tenant, Nordstrom Rack

142,500

Q2 2018

Q4 2019

East Northport, NY

Termination property; redevelop existing store and attached auto center for AMC Theatres, 24 Hour Fitness, additional junior anchors and small shops

179,700

Q2 2018

Q4 2019

Plantation, FL

Partial recapture; redevelop existing store for GameTime, additional retail and restaurants

130,500

Q3 2018

Q4 2019

- 17 -


PROPERTY INFORMATION

Termination Properties

December 31, 2017

As of December 31, 3017, Sears Holdings had terminated the Master Lease with respect to 56 stores totaling 7.4 million square feet of gross leasable area. The aggregate base rent at these stores at the time of termination was approximately $23.6 million. Sears Holdings continued to pay the Company rent until it vacated the stores and also paid aggregate termination fees of $45.1 million, amounts equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expense.

As of December 31, 2017, the Company had announced redevelopment projects at 18 of the terminated properties and will continue to announce redevelopment activity as new leases are signed to occupy the space formerly occupied by Sears Holdings.

					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Cullman, AL		98,500	September 2016	January 2017	Q2 2017
Sierra Vista, AZ		86,100	September 2016	January 2017
Thornton, CO		190,200	September 2016	January 2017	Q1 2017
Chicago, IL		118,800	September 2016	January 2017
Springfield, IL		84,200	September 2016	January 2017	Q3 2016
Elkhart, IN		86,500	September 2016	January 2017	Q4 2016
Merrillville, IN		108,300	September 2016	January 2017	Q4 2016
Houma, LA		96,700	September 2016	January 2017
New Iberia, LA		91,700	September 2016	January 2017	Q2 2017
Alpena, MI		118,200	September 2016	January 2017
Manistee, MI		87,800	September 2016	January 2017
Sault Sainte Marie, MI		92,700	September 2016	January 2017
Kearney, NE		86,500	September 2016	January 2017	Q3 2016
Deming, NM		96,600	September 2016	January 2017
Harlingen, TX		91,700	September 2016	January 2017
Yakima, WA		97,300	September 2016	January 2017
Riverton, WY		94,800	September 2016	January 2017
Riverside, CA		94,500	January 2017	April 2017
Kissimmee, FL		112,505	January 2017	April 2017
Leavenworth, KS		76,853	January 2017	April 2017
Hopkinsville, KY		70,326	January 2017	April 2017
Paducah, KY		108,244	January 2017	April 2017	Q3 2017
Owensboro, KY		68,334	January 2017	April 2017
Detroit Lakes, MN		79,102	January 2017	April 2017
Jefferson City, MO		92,016	January 2017	April 2017	Q2 2017
Henderson, NV		122,823	January 2017	April 2017	Q1 2017
Concord, NC		137,499	January 2017	April 2017
Chapel Hill, OH		187,179	January 2017	April 2017
Kenton, OH		96,066	January 2017	April 2017
Muskogee, OK		87,500	January 2017	April 2017
Mount Pleasant, PA		83,536	January 2017	April 2017
Sioux Falls, SD		72,511	January 2017	April 2017
El Paso, TX		103,657	January 2017	April 2017
Layton, UT		90,010	January 2017	April 2017
Elkins, WV		94,885	January 2017	April 2017
Platteville, WI		94,841	January 2017	April 2017
Sarasota, FL		204,500	June 2017	October 2017
Chicago, IL		293,700	June 2017	October 2017
Overland Park, KS		215,000	June 2017	October 2017
Lafayette, LA		194,900	June 2017	October 2017
Cockeysville, MD		83,900	June 2017	October 2017	Q1 2017
Hagerstown, MD		107,300	June 2017	October 2017	Q1 2016
Roseville, MI		277,000	June 2017	October 2017	Q3 2016
Burnsville, MN		161,700	June 2017	October 2017
Albany, NY		216,200	June 2017	October 2017	Q1 2016
East Northport, NY		187,000	June 2017	October 2017	Q2 2017

- 18 -


PROPERTY INFORMATION

Termination Properties (cont’d)
December 31, 2017

					Announced
Property	Square Feet		Notice	Termination	Redevelopment
Johnson City, NY		155,100	June 2017	October 2017
Olean, NY		75,100	June 2017	October 2017	Q1 2017
Mentor, OH		208,700	June 2017	October 2017
Middleburg Heights, OH		351,600	June 2017	October 2017
Toledo, OH		209,900	June 2017	October 2017
York, PA		82,000	June 2017	October 2017
Warwick, RI		169,200	June 2017	October 2017	Q3 2016 / Q3 2017
Greendale, WI		238,400	June 2017	October 2017	Q4 2017
Friendswood, TX		166,000	June 2017	November 2017 (1)
Westwood, TX		215,000	June 2017	January 2018 (1)
Total square feet		7,411,187

(1)	The Company and Sears Holdings agreed to extend occupancy beyond October 2017 under the existing Master Lease terms.

- 19 -


PROPERTY INFORMATION

Joint Venture Properties

December 31, 2017

GGP Joint Venture

					Sears or	Recapture			Total
	Mall Name	City	State	Joint Venture	Kmart	Rights (1)(2)			GLA (3)		Leased (3)
1	Northridge Fashion Center	Northridge	CA	GGP II JV	Sears		50	%		145,900		100.0	%
2	Altamonte Mall	Altamonte Springs	FL	GGP II JV	Sears		50	%		107,200		100.0	%
3	Coastland Center	Naples	FL	GGP II JV	Sears		50	%		80,900		100.0	%
4	Cumberland Mall	Atlanta	GA	GGP II JV	Sears		50	%		113,200		100.0	%
5	Natick Collection (5)	Natick	MA	GGP I JV	Sears	(4)				95,400		100.0	%
6	Willowbrook Mall	Wayne	NJ	GGP II JV	Sears	(4)				140,600		77.7	%
7	Sooner Mall (5)	Norman	OK	GGP I JV	Sears		50	%		33,400		100.0	%
8	Stonebriar Centre	Frisco	TX	GGP I JV	Sears		50	%		81,500		100.0	%
9	Alderwood	Lynnwood	WA	GGP I JV	Sears	(4)				88,900		0.0	%

(1)

Properties with 50% recapture rights are subject to the joint venture’s right to recapture approximately 50% of the space within a store (subject to certain exceptions). In addition, the joint venture has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the stores and all outparcels or outlots, as well as certain portions of parking areas and common areas.

(2)	In addition to the 50% recapture rights described above, the joint venture reached an agreement with Sears Holdings to recapture 100% of certain stores for a specified fee.

(3)	Based on signed leases as of December 31, 2017; GLA presented at the Company's proportional share.

(4)	As of December 31, 2017, the JVs had exercised certain recapture rights with respect to this property or announced plans to exercise such rights according to a specific schedule.

(5)	Property is subject to a lease or ground lease agreement.

GGP Transactions

On July 12, 2017, the Company completed the GGP Transactions for gross consideration of $247.6 million. Pursuant to the GGP Transactions, the Company (i) sold to GGP the Company’s 50% interest in eight of the 12 assets in the GGP JV for $190.1 million; and (ii) sold to GGP a 50% joint venture interest in five additional assets for $57.5 million. The new joint venture will own and operate these assets on substantially the same terms as the existing joint venture

As a result of the GGP Transactions, the Company reduced amounts outstanding under its mortgage loan by $50.6 million and received approximately $171.6 million of additional cash proceeds before closing costs, which it intends to use to fund its redevelopment pipeline and for general corporate purposes.

- 20 -


PROPERTY INFORMATION

Joint Venture Properties (cont’d)

December 31, 2017

Simon Joint Venture

					Sears or	Recapture			Total
	Mall Name	City	State	Joint Venture	Kmart	Rights (1)			GLA (2)		Leased (2)

1	Santa Rosa Plaza	Santa Rosa	CA	Simon JV	Sears		50	%		82,700		100.0	%
2	Briarwood	Ann Arbor	MI	Simon JV	Sears		50	%		85,300		100.0	%
3	The Shops at Nanuet	Nanuet	NY	Simon JV	Sears		50	%		110,700		100.0	%
4	Woodland Hills Mall	Tulsa	OK	Simon JV	Sears		50	%		75,100		100.0	%
5	Barton Creek Square	Austin	TX	Simon JV	Sears		50	%		82,300		100.0	%

(1)

(2)	Based on signed leases as of December 31, 2017; GLA presented at the Company's proportional share.

Simon Transaction

On November 3, 2017, the Company sold to Simon the its 50% JV Interests in five of the ten assets in the Simon JV for $68.0 million. Net proceeds from the sale have been used to fund the Company’s redevelopment pipeline and for general corporate purposes.

Macerich Joint Venture

					Sears or	Recapture			Total
	Mall Name	City	State	Joint Venture	Kmart	Rights (1)			GLA (2)		Leased (2)
1	Chandler Fashion Center	Chandler	AZ	Macerich JV	Sears		50	%		70,800		100.0	%
2	Arrowhead Towne Center	Glendale	AZ	Macerich JV	Sears		50	%		62,500		100.0	%
3	Los Cerritos Center	Cerritos	CA	Macerich JV	Sears		50	%		138,800		100.0	%
4	Vintage Faire Mall	Modesto	CA	Macerich JV	Sears		50	%		74,300		100.0	%
5	Danbury Fair	Danbury	CT	Macerich JV	Sears		50	%		89,200		100.0	%
6	Deptford Mall	Deptford	NJ	Macerich JV	Sears		50	%		97,500		100.0	%
7	Freehold Raceway Mall	Freehold	NJ	Macerich JV	Sears		50	%		69,400		100.0	%
8	Washington Square Mall	Portland	OR	Macerich JV	Sears		50	%		110,000		100.0	%
9	South Plains Mall	Lubbock	TX	Macerich JV	Sears		50	%		75,300		100.0	%

(1)

(2)	Based on signed leases as of December 31, 2017; GLA presented at the Company's proportional share.

- 21 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
1	700 East Northern Lights Boulevard	Anchorage	AK	Shopping Center	Sears	(4)				257,800		95.8	%		26
2	1731 2nd Avenue Southwest	Cullman	AL	Freestanding	n/a		(6	)		99,000		89.4	%		6
3	3930 McCain Boulevard	North Little Rock	AR	Mall	Sears		(5	)		185,700		100.0	%		15
4	2821 East Main Street	Russellville	AR	Freestanding	Kmart		50	%		88,000		100.0	%		7
5	4800 North US Highway 89	Flagstaff	AZ	Mall	Sears		50	%		66,200		100.0	%		7
6	6515 East Southern Avenue	Mesa	AZ	Mall	Sears		50	%		121,900		100.0	%		11
7	10140 North 91st Avenue	Peoria	AZ	Shopping Center	n/a	n/a				104,400		100.0	%		10
8	7611 West Thomas Road	Phoenix	AZ	Mall	Sears		50	%		144,200		100.0	%		10
9	12025 North 32nd Street	Phoenix	AZ	Freestanding	n/a	n/a				151,200		100.0	%		11
10	3400 Gateway Boulevard	Prescott	AZ	Mall	Sears		50	%		102,300		100.0	%		10
11	2250 El Mercado Loop	Sierra Vista	AZ	Mall	Sears		50	%		94,700		100.0	%		7
12	2011 East Fry Boulevard	Sierra Vista	AZ	Freestanding	n/a		(6	)		86,100		0.0	%		12
13	5950 East Broadway Boulevard	Tucson	AZ	Mall	Sears		50	%		250,100		100.0	%		20
14	3150 South 4th Avenue	Yuma	AZ	Shopping Center	Sears		50	%		90,400		100.0	%		14
15	3625 East 18th Street	Antioch	CA	Shopping Center	Kmart		50	%		95,200		100.0	%		7
16	42126 Big Bear Boulevard	Big Bear Lake	CA	Shopping Center	Kmart		50	%		80,400		93.2	%		8
17	20700 South Avalon Boulevard	Carson	CA	Mall	n/a		(5	)		182,900		55.3	%		13
18	565 Broadway	Chula Vista	CA	Mall	Sears		50	%		250,100		100.0	%		16
19	5900 Sunrise Mall	Citrus Heights	CA	Mall	Sears		50	%		289,500		100.0	%		22
20	912 County Line Road	Delano	CA	Freestanding	Kmart		50	%		86,100		100.0	%		6
21	575 Fletcher Parkway	El Cajon	CA	Mall	Sears		50	%		286,500		100.0	%		22
22	3751 South Dogwood Road	El Centro	CA	Mall	Sears		50	%		139,700		100.0	%		14
23	1420 Travis Boulevard	Fairfield	CA	Mall	Sears	(4)				164,200		100.0	%		9
24	5901 Florin Road	Florin	CA	Shopping Center	Sears		50	%		272,700		100.0	%		20
25	3636 North Blackstone Avenue	Fresno	CA	Shopping Center	Sears		50	%		217,600		100.0	%		13
26	1500 Anna Sparks Way	McKinleyville	CA	Shopping Center	Kmart		50	%		94,800		100.0	%		8
27	1011 West Olive Avenue	Merced	CA	Shopping Center	Sears		50	%		92,600		100.0	%		10
28	5080 East Montclair Plaza Lane	Montclair	CA	Mall	Sears		50	%		174,700		100.0	%		3
29	22550 Town Circle	Moreno Valley	CA	Mall	Sears		50	%		169,400		100.0	%		11
30	6000 Mowry Avenue	Newark	CA	Mall	Sears		50	%		145,800		100.0	%		10
31	12121 Victory Boulevard	North Hollywood	CA	Shopping Center	Sears		(5	)		166,800		97.1	%		4
32	72880 Highway 111	Palm Desert	CA	Mall	Sears		50	%		136,500		100.0	%		8
33	1855 Main Street	Ramona	CA	Shopping Center	Kmart		50	%		107,600		94.5	%		10
34	5261 Arlington Avenue	Riverside	CA	Freestanding	Sears		50	%		214,200		100.0	%		19
35	3001 Iowa Avenue	Riverside	CA	Freestanding	n/a		(6	)		132,600		28.7	%		13
36	1191 Galleria Boulevard	Roseville	CA	Mall	Sears		(5	)		139,000		100.0	%		9

- 22 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
37	1700 North Main Street	Salinas	CA	Mall	Sears		50	%		133,000		100.0	%		10
38	100 Inland Center	San Bernardino	CA	Mall	Sears		100	%		264,700		100.0	%		22
39	1178 El Camino Real	San Bruno	CA	Mall	Sears		50	%		276,600		100.0	%		13
40	4575 La Jolla Village Drive	San Diego	CA	Mall	n/a		(5	)		226,200		8.9	%		13
41	2180 Tully Road	San Jose	CA	Mall	Sears		50	%		262,500		100.0	%		22
42	4015 Capitola Road	Santa Cruz	CA	Mall	Sears		(5	)		123,800		90.6	%		10
43	200 Town Center East	Santa Maria	CA	Mall	Sears		50	%		108,600		100.0	%		5
44	302 Colorado Avenue	Santa Monica	CA	Freestanding	Sears		(5	)		117,800		100.0	%		3
45	895 Faulkner Road	Santa Paula	CA	Freestanding	Kmart		50	%		71,300		100.0	%		10
46	40710 Winchester Road	Temecula	CA	Mall	Sears		(5	)		115,700		100.0	%		10
47	145 West Hillcrest Drive	Thousand Oaks	CA	Shopping Center	Sears		50	%		164,000		100.0	%		11
48	3295 East Main Street	Ventura	CA	Mall	Sears		50	%		178,600		100.0	%		2
49	3501 South Mooney Boulevard	Visalia	CA	Shopping Center	Sears		50	%		75,600		100.0	%		7
50	1209 Plaza Drive	West Covina	CA	Mall	Sears		50	%		142,000		100.0	%		16
51	100 Westminster Mall	Westminster	CA	Mall	Sears	(4)				197,900		100.0	%		14
52	10785 West Colfax Avenue	Lakewood	CO	Shopping Center	Sears		50	%		153,000		100.0	%		8
53	1400 East 104th Avenue	Thornton	CO	Shopping Center	n/a		(6	)		186,800		30.5	%		25
54	850 Hartford Turnpike	Waterford	CT	Mall	Sears		50	%		149,300		100.0	%		11
55	1445 New Britain Avenue	West Hartford	CT	Shopping Center	n/a		(5	)		163,700		59.3	%		13
56	19563 Coastal Highway	Rehoboth Beach	DE	Freestanding	Kmart		(5	)		123,300		100.0	%		13
57	5900 Glades Road	Boca Raton	FL	Mall	Sears	(4)				178,500		100.0	%		19
58	303 U.S. Highway 301 Boulevard West	Bradenton	FL	Mall	Sears		50	%		99,900		100.0	%		15
59	7350 Manatee Avenue West	Bradenton	FL	Shopping Center	Kmart		50	%		82,900		100.0	%		9
60	27001 U.S. 19 North	Clearwater	FL	Mall	Sears		50	%		211,200		100.0	%		14
61	1625 Northwest 107th Avenue	Doral	FL	Mall	Sears		50	%		212,900		100.0	%		13
62	4125 Cleveland Avenue	Ft. Myers	FL	Mall	Sears		50	%		146,800		100.0	%		12
63	6201 West Newberry Road	Gainesville	FL	Mall	Sears		50	%		140,500		100.0	%		8
64	1675 West 49th Street	Hialeah	FL	Mall	Sears		50	%		197,400		100.0	%		8
65	1460 West 49th Street	Hialeah	FL	Freestanding	n/a		(5	)		100,600		74.3	%		9
66	2211 West Vine Street	Kissimmee	FL	Shopping Center	n/a		(6	)		148,900		24.4	%		14
67	3800 US Highway 98 North	Lakeland	FL	Mall	Sears		50	%		156,200		100.0	%		12
68	1050 South Babcock Street	Melbourne	FL	Freestanding	Sears		50	%		102,600		100.0	%		14
69	19505 Biscayne Boulevard	Miami	FL	Mall	n/a		(5	)		173,300		0.0	%		12
70	20701 Southwest 112th Avenue	Miami	FL	Mall	Sears		100	%		170,100		100.0	%		15
71	10700 Biscayne Boulevard	North Miami	FL	Freestanding	n/a		(5	)		119,900		100.0	%		11
72	3100 Southwest College Road	Ocala	FL	Mall	Sears		50	%		146,200		100.0	%		12

- 23 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
73	380 Blanding Boulevard	Orange Park	FL	Shopping Center	n/a	n/a				87,400		100.0	%		9
74	3111 East Colonial Drive	Orlando	FL	Mall	n/a		(5	)		130,400		87.6	%		18
75	733 North Highway 231	Panama City	FL	Mall	Sears		50	%		139,300		100.0	%		15
76	7171 North Davis Highway	Pensacola	FL	Shopping Center	Sears		50	%		212,300		100.0	%		15
77	8000 West Broward Boulevard	Plantation	FL	Mall	Sears	(4)				201,600		100.0	%		18
78	8201 South Tamiami Trail	Sarasota	FL	Mall	n/a		(6	)		204,500		0.0	%		15
79	4501 66th Street North	St. Petersburg	FL	Freestanding	Kmart		50	%		120,600		100.0	%		11
80	2300 Tyrone Boulevard North	St. Petersburg	FL	Mall	n/a		(5	)		147,800		93.8	%		14
81	7810 Abercorn Street	Savannah	GA	Mall	Sears		100	%		167,300		100.0	%		15
82	500 North Nimitz Highway	Honolulu	HI	Freestanding	n/a		(5	)		128,900		100.0	%		4
83	1501 Highway 169 North	Algona	IA	Freestanding	Kmart		50	%		99,300		100.0	%		7
84	4600 1st Avenue Northeast	Cedar Rapids	IA	Mall	Sears		50	%		146,000		100.0	%		12
85	1405 South Grand Avenue	Charles City	IA	Freestanding	Kmart		50	%		96,600		100.0	%		11
86	2307 Superior Street	Webster City	IA	Shopping Center	Kmart		50	%		40,800		100.0	%		4
87	460 North Milwaukee Street	Boise	ID	Mall	Sears		50	%		123,600		100.0	%		8
88	4730 West Irving Park Road	Chicago	IL	Freestanding	Sears		50	%		356,700		100.0	%		6
89	1601 North Harlem Avenue	Chicago	IL	Freestanding	n/a		(6	)		293,700		0.0	%		7
90	5050 South Kedzie Avenue	Chicago	IL	Shopping Center	n/a		(6	)		168,500		15.3	%		9
91	17550 Halsted Street	Homewood	IL	Shopping Center	n/a	n/a				196,100		100.0	%		19
92	3340 Mall Loop Drive	Joliet	IL	Mall	Sears		50	%		204,600		100.0	%		17
93	2860 South Highland Avenue	Lombard	IL	Freestanding	n/a	n/a				139,300		100.0	%		8
94	4902-5000 23rd Avenue	Moline	IL	Freestanding	Kmart		50	%		123,700		97.4	%		12
95	7503 West Cermak Road	North Riverside	IL	Mall	Sears		(5	)		203,000		100.0	%		13
96	2 Orland Square Drive	Orland Park	IL	Mall	Sears	(4)				199,600		100.0	%		16
97	2500 Wabash Avenue	Springfield	IL	Shopping Center	n/a		(6	)		133,400		66.1	%		14
98	3231 Chicago Road	Steger	IL	Freestanding	Kmart		50	%		87,400		100.0	%		3
99	3101 Northview Drive	Elkhart	IN	Shopping Center	n/a		(6	)		86,600		100.0	%		8
100	4201 Coldwater Road	Ft. Wayne	IN	Mall	Sears		(5	)		231,900		100.0	%		15
101	101 West Lincoln Highway	Merrillville	IN	Shopping Center	n/a		(6	)		170,900		90.3	%		17
102	4820 South 4th Street Trafficway	Leavenworth	KS	Freestanding	n/a		(6	)		83,600		0.0	%		9
103	9701 Metcalf Avenue	Overland Park	KS	Shopping Center	n/a		(6	)		215,000		0.0	%		19
104	3010 Fort Campbell Boulevard	Hopkinsville	KY	Shopping Center	n/a		(6	)		93,000		0.0	%		13
105	2815 West Parrish Avenue	Owensboro	KY	Shopping Center	n/a		(6	)		68,300		0.0	%		5
106	5101 Hinkleville Road	Paducah	KY	Mall	n/a		(6	)		97,300		42.1	%		9
107	133 Monarch Drive	Houma	LA	Freestanding	n/a		(6	)		101,400		4.6	%		9
108	5715 Johnston Street	Lafayette	LA	Mall	n/a		(6	)		194,900		0.0	%		16

- 24 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
109	900 East Admiral Doyle Drive	New Iberia	LA	Freestanding	n/a		(6	)		89,200		52.2	%		12
110	200 Grossman Drive	Braintree	MA	Shopping Center	n/a		(5	)		84,900		100.0	%		34
111	1325 Broadway	Saugus	MA	Mall	Sears		(5	)		210,700		71.7	%		16
112	15700 Emerald Way	Bowie	MD	Shopping Center	Sears		(5	)		131,000		100.0	%		11
113	126 Shawan Road	Cockeysville	MD	Shopping Center	n/a	(5)(6)				122,800		37.7	%		12
114	3207 Solomons Island Road	Edgewater	MD	Shopping Center	Kmart		50	%		117,200		100.0	%		14
115	17318 Valley Mall Road	Hagerstown	MD	Mall	n/a	(5)(6)				130,100		8.6	%		12
116	417 Main Street	Madawaska	ME	Shopping Center	Kmart		50	%		49,700		100.0	%		2
117	2355 US Highway 23 South	Alpena	MI	Freestanding	n/a		(6	)		118,200		0.0	%		12
118	1250 Boardman-Jackson Crossing	Jackson	MI	Shopping Center	Sears		50	%		152,700		100.0	%		15
119	2100 Southfield Road	Lincoln Park	MI	Shopping Center	Sears		50	%		301,700		100.0	%		17
120	1560 US 31 South	Manistee	MI	Shopping Center	n/a		(6	)		94,700		0.0	%		12
121	32123 Gratiot Avenue	Roseville	MI	Mall	n/a	(5)(6)				389,700		33.3	%		21
122	2760 I-75 Business Spur	Sault Sainte Marie	MI	Freestanding	n/a		(6	)		92,700		0.0	%		11
123	22801 Harper Avenue	St. Clair Shores	MI	Freestanding	Kmart		(5	)		122,200		100.0	%		11
124	300 West 14 Mile Road	Troy	MI	Mall	Sears		(5	)		384,100		100.0	%		30
125	3100 Washtenaw Road	Ypsilanti	MI	Freestanding	n/a	n/a				99,400		100.0	%		12
126	14250 Buck Hill Road	Burnsville	MN	Mall	n/a		(6	)		161,700		0.0	%		15
127	1305 Highway 10 West	Detroit Lakes	MN	Shopping Center	n/a		(6	)		87,100		9.2	%		15
128	3001 White Bear Avenue North	Maplewood	MN	Mall	Sears		50	%		174,900		100.0	%		14
129	425 Rice Street	St. Paul	MN	Freestanding	Sears		100	%		217,900		100.0	%		17
130	11 South Kingshighway Street	Cape Girardeau	MO	Freestanding	Kmart		50	%		82,600		100.0	%		6
131	1 Flower Valley Shopping Center	Florissant	MO	Shopping Center	Kmart	(4)				124,000		100.0	%		11
132	2304 Missouri Boulevard	Jefferson City	MO	Freestanding	n/a		(6	)		97,700		100.0	%		10
133	3700 South Campbell Avenue	Springfield	MO	Shopping Center	n/a	n/a				112,900		100.0	%		8
134	2308 Highway 45 North	Columbus	MS	Shopping Center	Kmart		50	%		166,700		97.5	%		18
135	3180 Highway 2 West	Havre	MT	Freestanding	Kmart		50	%		94,700		100.0	%		9
136	1 South Tunnel Road	Asheville	NC	Mall	Sears		50	%		240,700		100.0	%		16
137	545 Concord Parkway North	Concord	NC	Shopping Center	n/a		(6	)		171,300		19.7	%		26
138	1302 Bridford Parkway	Greensboro	NC	Shopping Center	n/a	n/a				171,600		100.0	%		16
139	1 20th Avenue Southeast	Minot	ND	Shopping Center	Kmart		50	%		110,400		100.0	%		13
140	4700 2nd Avenue	Kearney	NE	Freestanding	n/a		(6	)		80,000		47.5	%		8
141	1500 South Willow Street	Manchester	NH	Mall	Sears		50	%		144,100		100.0	%		11
142	310 Daniel Webster Highway	Nashua	NH	Mall	Sears		50	%		167,100		100.0	%		7
143	50 Fox Run Road	Portsmouth	NH	Mall	Sears		50	%		127,000		100.0	%		13
144	77 Rockingham Park Boulevard	Salem	NH	Mall	Sears	(4)				250,500		100.0	%		14

- 25 -

PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
145	1500 Highway 35	Middletown	NJ	Freestanding	n/a		100	%		199,600		100.0	%		23
146	1640 Route 22	Watchung	NJ	Freestanding	n/a		(5	)		126,700		71.0	%		19
147	1205 East Pine Street	Deming	NM	Freestanding	n/a		(6	)		96,600		0.0	%		10
148	3000 East Main Street	Farmington	NM	Freestanding	Kmart		50	%		90,700		100.0	%		11
149	2220 North Grimes Street	Hobbs	NM	Shopping Center	Kmart		50	%		88,900		100.0	%		8
150	10405 South Eastern Avenue	Henderson	NV	Shopping Center	n/a		(6	)		124,800		100.0	%		12
151	4000 Meadows Lane	Las Vegas	NV	Mall	Sears	(4)				150,200		100.0	%		11
152	5400 Meadowood Mall Circle	Reno	NV	Mall	Sears		50	%		198,800		100.0	%		3
153	1425 Central Avenue	Albany	NY	Mall	n/a	(5)(6)				277,900		14.8	%		21
154	4155 State Route 31	Clay	NY	Mall	Sears		50	%		146,500		100.0	%		12
155	4000 Jericho Turnpike	East Northport	NY	Shopping Center	n/a	(5)				179,700		48.4	%		18
156	195 North Broadway	Hicksville	NY	Freestanding	Sears	(4)				362,500		100.0	%		30
157	601 Harry L Drive	Johnson City	NY	Mall	n/a		(6	)		155,100		0.0	%		11
158	2801 West State Street	Olean	NY	Freestanding	n/a	(5)(6)				118,000		16.9	%		13
159	317 Greece Ridge Center Drive	Rochester	NY	Mall	Sears		50	%		128,500		100.0	%		15
160	171 Delaware Avenue	Sidney	NY	Shopping Center	Kmart		50	%		94,400		100.0	%		19
161	200 Eastview Mall	Victor	NY	Mall	Sears		50	%		123,000		100.0	%		14
162	600 Lee Boulevard	Yorktown Heights	NY	Mall	Sears	(4)				160,000		100.0	%		12
163	4100 Belden Village Avenue Northwest	Canton	OH	Mall	Sears		(5	)		219,400		100.0	%		19
164	2000 Brittain Road	Chapel Hill	OH	Mall	n/a		(6	)		193,100		0.0	%		21
165	2700 Miamisburg Centerville Road	Dayton	OH	Mall	Sears		(5	)		180,900		96.0	%		16
166	1005 East Columbus Street	Kenton	OH	Freestanding	n/a		(6	)		96,100		0.0	%		11
167	502 Pike Street	Marietta	OH	Freestanding	Kmart		50	%		87,500		100.0	%		7
168	7875 Johnnycake Ridge Road	Mentor	OH	Mall	n/a		(6	)		208,700		0.0	%		20
169	6950 West 130th Street	Middleburg Heights	OH	Shopping Center	n/a		(6	)		351,600		0.0	%		15
170	1447 North Main Street	North Canton	OH	Shopping Center	Kmart		50	%		87,100		100.0	%		9
171	555 South Avenue	Tallmadge	OH	Freestanding	Kmart		50	%		84,200		100.0	%		8
172	3408 West Central Avenue	Toledo	OH	Shopping Center	n/a		(6	)		209,900		0.0	%		11
173	4 East Shawnee Road	Muskogee	OK	Freestanding	n/a		(6	)		87,500		0.0	%		10
174	4400 South Western Avenue	Oklahoma City	OK	Freestanding	Sears		50	%		223,700		100.0	%		24
175	3132 East 51st Street	Tulsa	OK	Freestanding	n/a	n/a				87,200		100.0	%		9
176	1180 Southeast 82nd Avenue	Happy Valley	OR	Mall	Sears		50	%		144,300		100.0	%		12
177	2640 West 6th Street	The Dalles	OR	Freestanding	Kmart		50	%		87,100		100.0	%		8
178	1180 Walnut Bottom Road	Carlisle	PA	Shopping Center	Kmart		50	%		117,800		100.0	%		3
179	3975 Columbia Avenue	Columbia	PA	Shopping Center	Kmart		50	%		86,700		100.0	%		8
180	160 North Gulph Road (7)	King Of Prussia	PA	Mall	n/a	n/a				210,900		97.6	%		14

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PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
181	1745 Quentin Road	Lebanon	PA	Shopping Center	Kmart		50	%		117,200		100.0	%		15
182	100 Cross Roads Plaza	Mount Pleasant	PA	Shopping Center	n/a		(6	)		83,500		0.0	%		10
183	400 North Best Avenue	Walnutport	PA	Freestanding	Kmart		50	%		121,200		100.0	%		16
184	1094 Haines Road	York	PA	Shopping Center	n/a		(6	)		82,000		0.0	%		6
185	PR 167 & Las Cumbres	Bayamon	PR	Shopping Center	Kmart		50	%		115,200		100.0	%		10
186	400 Calle Betances	Caguas	PR	Mall	Sears		50	%		138,700		100.0	%		8
187	Avenue 65 Infanteria	Carolina	PR	Mall	Sears		50	%		198,000		100.0	%		11
188	Martinez Nadal Avenue	Guaynabo	PR	Shopping Center	Kmart		(5	)		217,100		95.4	%		18
189	PR Road 2, Km 149.5	Mayaguez	PR	Shopping Center	Kmart		50	%		118,200		100.0	%		13
190	2643 Ponce Bypass	Ponce	PR	Shopping Center	Kmart		50	%		126,900		100.0	%		9
191	650 Bald Hill Road	Warwick	RI	Shopping Center	n/a	(5)(6)				211,700		90.3	%		20
192	3801B Clemson Boulevard	Anderson	SC	Shopping Center	n/a		(5	)		117,100		100.0	%		12
193	7801 Rivers Avenue	Charleston	SC	Mall	n/a		(5	)		127,500		46.8	%		14
194	2302 Cherry Road	Rock Hill	SC	Shopping Center	Kmart		50	%		89,300		100.0	%		12
195	3020 West 12th Street	Sioux Falls	SD	Freestanding	n/a		(6	)		72,500		0.0	%		6
196	2800 North Germantown Parkway	Cordova	TN	Mall	Sears		50	%		160,900		100.0	%		12
197	4570 Poplar Avenue	Memphis	TN	Freestanding	n/a		(5	)		112,700		78.3	%		11
198	12625 North Interstate Highway 35	Austin	TX	Shopping Center	Sears		(5	)		172,000		100.0	%		25
199	3450 West Camp Wisdom Road	Dallas	TX	Mall	Sears		50	%		205,300		100.0	%		13
200	9484 Dyer Street	El Paso	TX	Freestanding	n/a		(6	)		112,100		7.5	%		11
201	300 Baybrook Mall	Friendswood	TX	Mall	n/a		(6	)		166,000		0.0	%		13
202	1129 Morgan Boulevard	Harlingen	TX	Shopping Center	n/a		(6	)		91,700		0.0	%		7
203	303 Memorial City	Houston	TX	Mall	Sears		50	%		214,400		100.0	%		20
204	12605 North Gessner Road	Houston	TX	Freestanding	n/a	n/a				134,000		100.0	%		11
205	6301 Northwest Loop 410	Ingram	TX	Mall	Sears		50	%		168,400		100.0	%		12
206	2501 Irving Mall	Irving	TX	Mall	Sears		50	%		83,200		95.6	%		18
207	201 Central Park Mall	San Antonio	TX	Freestanding	Sears		(5	)		213,000		97.8	%		15
208	4000 North Shepherd	Shepherd	TX	Freestanding	Sears		50	%		201,700		100.0	%		12
209	13131 Preston Road	Valley View	TX	Mall	Sears		(5	)		235,000		100.0	%		23
210	9570 Southwest Freeway	Westwood	TX	Freestanding	n/a		(6	)		213,600		0.0	%		18
211	2010 North Main Street	Layton	UT	Shopping Center	n/a		(6	)		176,900		34.9	%		14
212	7453 South Plaza Center Drive	West Jordan	UT	Shopping Center	Sears		(5	)		193,500		95.1	%		12
213	5901 Duke Street	Alexandria	VA	Mall	Sears		50	%		262,100		100.0	%		18
214	1401 Greenbrier Parkway	Chesapeake	VA	Mall	Sears		50	%		169,400		100.0	%		15
215	12000 Fair Oaks Mall	Fairfax	VA	Mall	Sears		(5	)		220,700		72.3	%		15
216	5200 Mercury Boulevard	Hampton	VA	Shopping Center	Sears		50	%		245,000		100.0	%		16

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PROPERTY INFORMATION

Wholly Owned Properties

December 31, 2017

					Sears or	Recapture			Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)			GLA (4)		Leased (4)			Acres
217	4588 Virginia Beach Boulevard	Virginia Beach	VA	Mall	Sears		50	%		197,300		100.0	%		14
218	141 West Lee Highway	Warrenton	VA	Shopping Center	Sears		50	%		121,100		100.0	%		9
219	2200 148th Avenue Northeast	Redmond	WA	Shopping Center	Sears		(5	)		267,400		100.0	%		15
220	8800 Northeast Vancouver Mall Drive	Vancouver	WA	Mall	Sears		50	%		129,700		100.0	%		10
221	2304 East Nob Hill Boulevard	Yakima	WA	Freestanding	n/a		(6	)		97,300		0.0	%		14
222	5200 South 76th Street	Greendale	WI	Mall	n/a		(6	)		187,500		56.9	%		21
223	53 West Towne Mall	Madison	WI	Mall	Sears		(5	)		142,400		100.0	%		18
224	1425 East Bus Highway 151	Platteville	WI	Freestanding	n/a		(6	)		94,800		0.0	%		10
225	1701 4th Avenue West	Charleston	WV	Shopping Center	Kmart		50	%		105,600		100.0	%		10
226	731 Beverly Pike	Elkins	WV	Shopping Center	n/a		(6	)		99,600		0.0	%		8
227	101 Great Teays Boulevard	Scott Depot	WV	Freestanding	Kmart		50	%		89,800		100.0	%		8
228	4000 East 2nd Street	Casper	WY	Shopping Center	Kmart		50	%		91,400		100.0	%		8
229	2150 South Douglas Highway	Gillette	WY	Freestanding	Kmart		50	%		94,600		100.0	%		10
230	1960 North Federal Boulevard	Riverton	WY	Freestanding	n/a		(6	)		94,800		0.0	%		9
	Total - Wholly-Owned Properties									35,159,000		79.2	%		2,919

(1)	Company classification. Mall properties are attached to regional malls; Shopping Center properties include properties attached, within or adjacent to neighborhood shopping or power centers, as well as freestanding properties.

(2)

Properties with 50% recapture rights are subject to the Company's right to recapture approximately 50% of the space within a store (subject to certain exceptions). In addition, the Company has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the stores and all outparcels or outlots, as well as certain portions of parking areas and common areas.

(3)	In addition to the 50% recapture rights described above, properties with 100% recapture rights are subject to the Company's right to recapture the entire space within a store for a specified fee.

(4)	Based on signed leases as of December 31, 2017.

(5)	As of December 31, 2017, the Company had exercised certain recapture rights with respect to this property.

(6)	As of December 31, 2017, Sears Holdings had exercised its termination rights with respect to this property.

(7)	Property is subject to a ground lease.

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DISCLOSURES

Non-GAAP Measures

The Company makes reference to NOI, Total NOI, EBITDA, Adjusted EBITDA, FFO and Company FFO which are financial measures that include adjustments to accounting principles generally accepted in the United States (“GAAP”).

None of Total NOI, EBITDA, Adjusted EBITDA, FFO or 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 have been provided in the tables accompanying this press release.

Net Operating Income ("NOI”), Total NOI and Annualized Total NOI

NOI is defined as income from property operations less property operating expenses. 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. This form of presentation offers insights into the financial performance and condition of the Company as a whole given the Company’s 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.

Annualized Total NOI is an estimate, as of the end of the reporting period, of the annual Total NOI to be generated by the Company’s portfolio including all signed leases and modifications to the Company’s master lease with Sears Holdings with respect to recaptured space. We calculate Annualized Total NOI by adding or subtracting current period adjustments for leases that commenced or expired during the period to Total NOI (as defined) for the period and annualizing, and then adding estimated annual Total NOI attributable to SNO leases and subtracting estimated annual Total NOI attributable to Sears Holdings’ space to be recaptured.

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

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

The Company makes certain adjustments to EBITDA, which it refers to as Adjusted EBITDA, to account for certain non-cash and non-comparable items, such as termination fee income, unrealized loss on interest rate cap, litigation charges, acquisition-related expenses, certain up-front-hiring and personnel costs and gains (or losses) on from property sales, that it does not believe are representative of ongoing operating results.

Funds From Operations ("FFO") and Company FFO

FFO is calculated in accordance with the National Association of Real Estate Investment Trusts ("NAREIT"), 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 lease termination income, loss on interest rate cap, litigation charges, acquisition-related expenses, and certain up-front-hiring and personnel costs, that it does not believe are representative of ongoing operating results. The Company previously referred to this metric as Normalized FFO; the definition and calculation remain the same.

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DISCLOSURES

Forward-Looking Statements

This document contains forward-looking statements, which are based on the current beliefs and expectations of management and are subject to significant risks, assumptions and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: competition in the real estate and retail industries; our substantial dependence on Sears Holdings Corporation; Sears Holdings Corporation’s termination and other rights under its master lease with us; risks relating to our recapture and acquisition of properties and redevelopment activities; contingencies to the commencement of rent under leases; the terms of our indebtedness; restrictions with which we are required to comply in order to maintain REIT status and other legal requirements to which we are subject; and our lack of operating history. For additional discussion of these and other applicable risks, assumptions and uncertainties, see the “Risk Factors” and forward-looking statement disclosure contained in filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

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Seritage Growth Properties

500 Fifth Avenue | New York, NY 10110

212-355-7800 | www.seritage.com

Seritage Growth Properties - FORM 8-K - EX-99..2 - February 28, 2018

Attached files

Seritage Growth Properties Reports