Seritage Growth Properties - FORM 8-K - EX-99.2

Attached files

file	filename
EX-99.1 - EX-99.1 - Seritage Growth Properties	srg-ex991_6.htm
8-K - 8-K - Seritage Growth Properties	srg-8k_20180331.htm

SUPPLEMENTAL INFORMATION \| PERIOD ENDED MARCH 31, 2018	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 225 wholly-owned properties and 24 joint venture properties totaling approximately 39 million square feet of gross leasable area (“GLA”) across 49 states and Puerto Rico. Pursuant to a master lease (the “Master Lease”), 145 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 64 properties, third-party tenants occupy a portion of leasable space alongside Sears and Kmart, 54 properties are leased only to third parties and 26 properties are vacant. The Company also owns 50% interests in 24 properties through joint venture investments with GGP Inc. (“GGP”) (NYSE: GGP), Simon Property Group Inc. (“Simon”) (NYSE: SPG), The Macerich Company (“Macerich”) (NYSE: MAC) and Invesco Real Estate. 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.

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 MARCH 31, 2018

		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
EBITDAre and Company 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		19
Joint Venture Properties		21
Wholly Owned Properties		23

DISCLOSURES
Non-GAAP Measures		30
Forward-Looking Statements		31


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

March 31, 2018

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

			Three Months Ended March 31,
Financial Results			2018			2017
Net income (loss) attributable to Seritage common shareholders (page 3)			$	9,100		$	(19,838	)
Total NOI (page 5)				36,879			46,890
FFO (page 7)				11,048			31,046
Company FFO (page 7)				12,429			26,963
Net income (loss) per diluted share attributable to Seritage common shareholders (page 3)			$	0.26		$	(0.59	)
FFO per diluted share (page 7)				0.20			0.56
Company FFO per diluted share (page 7)				0.22			0.48
Weighted average diluted shares used in EPS computations				35,501			33,510
Weighted average diluted shares used in FFO computations				55,719			55,596
Stock trading price range			$34.60 to $42.77			$39.80 to $47.31

			As of			As of
Financial Ratios (page 4)			March 31, 2018			December 31, 2017
Total debt to total market capitalization				39.3	%		37.5	%
Net debt to adjusted EBITDA				7.3	x		6.5	x
Adjusted EBITDA to cash interest expense				2.2	x		2.4	x

			As of			As of
Property Data (page 10)			March 31, 2018			December 31, 2017
Number of properties				249			253
Gross leasable area (total / at share)			38,869 / 36,710			39,381 / 37,270
Percentage leased (total / at share)			81.0% / 80.3%			80.8% / 80.0%

	As of March 31, 2018
			% of Total
Tenant	Annual Rent		Annual Rent			Annual Rent PSF
Sears Holdings	$	99,065		45.7	%	$	4.52
In-Place Third-Party Leases		52,634		24.3	%		12.86
SNO Third-Party Leases		64,914		30.0	%		18.73
Total	$	216,613		100.0	%	$	7.35

	As of March 31, 2017
			% of Total
Tenant	Annual Rent		Annual Rent			Annual Rent PSF
Sears Holdings	$	139,447		60.3	%	$	4.45
In-Place Third-Party Leases		44,582		19.3	%		12.97
SNO Third-Party Leases		47,194		20.4	%		18.21
Total	$	231,223		100.0	%	$	6.18

- 1 -


CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet (unaudited)

March 31, 2018

(In thousands, except share and per share amounts)

	March 31, 2018			December 31, 2017
ASSETS
Investment in real estate
Land	$	750,870		$	799,971
Buildings and improvements		851,416			829,168
Accumulated depreciation		(148,926	)		(139,483	)
		1,453,360			1,489,656
Construction in progress		252,350			224,904
Net investment in real estate		1,705,710			1,714,560
Investment in unconsolidated joint ventures		330,322			282,990
Cash and cash equivalents		135,091			241,569
Restricted cash		177,419			175,665
Tenant and other receivables, net		32,021			30,787
Lease intangible assets, net		291,613			310,098
Prepaid expenses, deferred expenses and other assets, net		23,839			20,148
Total assets	$	2,696,015		$	2,775,817

LIABILITIES AND EQUITY
Liabilities
Mortgage loans payable, net	$	1,130,793		$	1,202,314
Unsecured term loan, net		143,590			143,210
Accounts payable, accrued expenses and other liabilities		99,063			109,433
Total liabilities		1,373,446			1,454,957

Commitments and contingencies

Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 35,208,666 and 32,415,734 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		352			324
Class B common shares $0.01 par value; 5,000,000 shares authorized; 1,328,866 and 1,328,866 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		13			13
Class C common shares $0.01 par value; 50,000,000 shares authorized; 372,010 and 3,151,131 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		4			31
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of March 31, 2018 and December 31, 2017; liquidation preference of $70,000		28			28
Additional paid-in capital		1,116,841			1,116,060
Accumulated deficit		(229,652	)		(229,760	)
Total shareholders' equity		887,586			886,696
Non-controlling interests		434,983			434,164
Total equity		1,322,569			1,320,860
Total liabilities and equity	$	2,696,015		$	2,775,817

- 2 -


CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Operations (unaudited)

March 31, 2018

(In thousands, except per share amounts)

	Three Months Ended March 31,
	2018			2017
REVENUE
Rental income	$	37,079		$	49,174
Tenant reimbursements		16,698			16,224
Total revenue		53,777			65,398
EXPENSES
Property operating		7,241			4,742
Real estate taxes		11,381			12,422
Depreciation and amortization		34,667			58,663
General and administrative		7,797			6,274
Provision for doubtful accounts		61			39
Total expenses		61,147			82,140
Operating loss		(7,370	)		(16,742	)
Equity in (loss) income of unconsolidated joint ventures		(2,582	)		1,002
Gain on sale of real estate		41,831			—
Interest and other income		680			78
Interest expense		(16,419	)		(16,592	)
Unrealized gain (loss) on interest rate cap		165			(471	)
Income (loss) before income taxes		16,305			(32,725	)
Provision for income taxes		(104	)		(119	)
Net income (loss)		16,201			(32,844	)
Net (income) loss attributable to non-controlling interests		(5,873	)		13,006
Net income (loss) attributable to Seritage	$	10,328		$	(19,838	)
Preferred dividends		(1,228	)		—
Net income (loss) attributable to Seritage common shareholders	$	9,100		$	(19,838	)

Net income (loss) per share attributable to Seritage Class A and Class C common shareholders - Basic	$	0.26		$	(0.59	)
Net income (loss) per share attributable to Seritage Class A and Class C common shareholders - Diluted	$	0.26		$	(0.59	)
Weighted average Class A and Class C common shares outstanding - Basic		35,414			33,510
Weighted average Class A and Class C common shares outstanding - Diluted		35,501			33,510

- 3 -


SUPPLEMENTAL FINANCIAL INFORMATION

Market Capitalization and Financial Ratios

March 31, 2018

(In thousands, except per share and ratio amounts)

	As of			As of
Equity Market Capitalization	March 31, 2018			December 31, 2017
Class A common shares outstanding		35,209			32,416
Class C common shares outstanding		372			3,151
OP units outstanding		20,218			20,218
Total shares & units outstanding		55,799			55,785
Share Price	$	35.55		$	40.46
Equity market capitalization	$	1,983,654		$	2,257,061

Total Market Capitalization
Equity market capitalization	$	1,983,654		$	2,257,061
Total debt		1,282,527			1,355,562
Total market capitalization	$	3,266,181		$	3,612,623

Financial Ratios
Total debt to total market capitalization		39.3	%		37.5	%

Total debt	$	1,282,527		$	1,355,562
Cash and cash equivalents		(135,091	)		(241,569	)
Restricted cash		(177,419	)		(175,665	)
Net Debt	$	970,017		$	938,328

Net debt to Adjusted EBITDA (1)		7.3	x		6.5	x

Gross real estate investments	$	2,386,018		$	2,397,731
Investment in unconsolidated joint ventures		330,322			282,990
Total real estate investments	$	2,716,340		$	2,680,721

Net debt to total real estate investments		35.7	%		35.0	%

Interest expense (net of amounts capitalized) (1)	$	69,839		$	70,012
Amortization of deferred financing costs (1)		(8,857	)		(8,719	)
Cash interest expense (net of amounts capitalized) (1)	$	60,982		$	61,293

Adjusted EBITDA to cash interest expense (net of amounts capitalized) (1)		2.2	x		2.4	x

(1)	For the twelve months ended March 31, 2018 and December 31, 2017, respectively.

- 4 -


SUPPLEMENTAL FINANCIAL INFORMATION

Total Net Operating Income

March 31, 2018

(In thousands)

	Three Months Ended March 31,
NOI and Total NOI	2018			2017
Net income (loss)	$	16,201		$	(32,844	)
Termination fee income		(174	)		(6,136	)
Depreciation and amortization		34,667			58,663
General and administrative expenses		7,797			6,274
Equity in loss (income) of unconsolidated joint ventures		2,582			(1,002	)
Gain on sale of real estate		(41,831	)		—
Interest and other income		(680	)		(78	)
Interest expense		16,419			16,592
Unrealized (gain) loss on interest rate cap		(165	)		471
Provision for income taxes		104			119
NOI	$	34,920		$	42,059
NOI of unconsolidated joint ventures		4,758			6,511
Straight-line rent adjustment (1)		(2,568	)		(1,449	)
Above/below market rental income/expense (1)		(231	)		(231	)
Total NOI	$	36,879		$	46,890

	As of March 31,
Annualized Total NOI	2018			2017
Total NOI (per above)	$	36,879		$	46,890
Period adjustments (2)		911			(432	)
Adjusted Total NOI		37,790			46,458
Annualize		x 4			x 4
Adjusted Total NOI annualized		151,160			185,832
Plus: estimated annual Total NOI from SNO leases		63,600			45,769
Less: estimated annual Total NOI from associated space to be recaptured from Sears		(4,958	)		(5,486	)
Annualized Total NOI	$	209,802		$	226,115

(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

EBITDAre and Company EBITDA

March 31, 2018

(In thousands)

	Three Months Ended March 31,
EBITDAre and Company EBITDA	2018			2017
Net income (loss)	$	16,201		$	(32,844	)
Interest expense		16,419			16,592
Provision for income and other taxes		104			119
Depreciation and amortization		34,667			58,663
Depreciation and amortization (unconsolidated joint ventures)		3,793			5,486
Gain on sale of real estate		(41,831	)		—
EBITDAre	$	29,353		$	48,016
Termination fee income		(174	)		(6,136	)
Unrealized (gain) loss on interest rate cap		(165	)		471
Company EBITDA	$	29,014		$	42,351

- 6 -


SUPPLEMENTAL FINANCIAL INFORMATION

Funds from Operations and Company FFO

March 31, 2018

(In thousands, except per share amounts)

	Three Months Ended March 31,
FFO and Company FFO	2018			2017
Net income (loss)	$	16,201		$	(32,844	)
Real estate depreciation and amortization (consolidated properties)		34,113			58,404
Real estate depreciation and amortization (unconsolidated joint ventures)		3,793			5,486
Gain on sale of real estate		(41,831	)		—
Dividends on preferred shares		(1,228	)		—
FFO attributable to common shareholders and unitholders	$	11,048		$	31,046
Termination fee income		(174	)		(6,136	)
Unrealized (gain) loss on interest rate cap		(165	)		471
Amortization of deferred financing costs		1,720			1,582
Company FFO attributable to common shareholders and unitholders	$	12,429		$	26,963

FFO per diluted common share and unit	$	0.20		$	0.56
Company FFO per diluted common share and unit	$	0.22		$	0.48

Weighted Average Common Shares and Units Outstanding
Weighted average common shares outstanding		35,501			33,510
Weighted average OP units outstanding		20,218			22,086
Weighted average common shares and units outstanding		55,719			55,596

- 7 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information

March 31, 2018

(In thousands)

	As of			As of
Debt Summary	March 31, 2018			December 31, 2017
Mortgage notes payable	$	1,137,527		$	1,210,562
Interest rate	LIBOR + 478			LIBOR + 470
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		$	145,000
Interest rate		6.75	%		6.75	%
Maturity	December 2018			December 2018

Restricted Cash
Reserve for redevelopment projects / capital expenditures	$	141,089		$	137,996
Reserve for property operating expenses		19,611			21,735
Reserve for environmental remediation		10,614			10,751
Other, including prepaid rental income		3,600			2,679
Reserve for deferred maintenance		2,505			2,504
Total restricted cash	$	177,419		$	175,665

Prepaid Expenses, Deferred Expenses and Other Assets
FF&E	$	6,450		$	6,290
Deferred expenses		5,543			4,813
Prepaid real estate taxes		4,608			2,732
Other assets		4,318			2,493
Other prepaid expenses		1,514			1,445
Prepaid insurance		1,218			2,352
Interest rate cap		188			23
Total prepaid expenses, deferred expenses and other assets	$	23,839		$	20,148

Accounts Payable, Accrued Expenses and Other Liabilities
Accrued development expenditures	$	19,964		$	21,449
Dividends payable		15,910			14,559
Accrued real estate taxes		14,920			17,091
Below-market leases		13,945			14,476
Environmental reserve		10,846			11,322
Unearned tenant reimbursements		6,335			10,522
Accounts payable and accrued expenses		5,648			9,588
Prepaid rental income		5,127			4,156
Accrued interest		3,787			3,689
Deferred maintenance		2,581			2,581
Total accounts payable, accrued expenses and other liabilities	$	99,063		$	109,433

- 8 -


SUPPLEMENTAL FINANCIAL INFORMATION

Additional Information (cont’d)

March 31, 2018

(In thousands, except per share amounts)

	Three Months Ended March 31,
Select Non-Cash Items	2018			2017
Straight-line rental income
Wholly-owned	$	2,453		$	1,534
Joint ventures		115			(85	)
Total	$	2,568		$	1,449

Net amortization of above/below market rental income/expense
Wholly-owned	$	234		$	195
Joint ventures		(3	)		36
Total	$	231		$	231

Amortization of deferred financing costs	$	(1,720	)	$	(1,582	)
Stock-based compensation expense		(869	)		(390	)

Dividends
Dividends per Class A and Class C common share	$	0.25		$	0.25
Declaration date	February 20, 2018			February 28, 2017
Record date	March 30, 2018			March 31, 2017
Payment date	April 12, 2018			April 13, 2017

- 9 -


PROPERTY INFORMATION

Portfolio Overview

March 31, 2018

(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 March 31, 2018:

	Consolidated			Unconsolidated			Seritage
	Portfolio			Joint Ventures			Total
Number of properties		225			24			249

Total GLA		34,551			4,318			38,869
At share		34,551			2,159			36,710

Leased GLA		27,477			3,989			31,466
At share		27,477			1,995			29,472

Percentage leased		79.5	%		92.4	%		81.0	%
At share		79.5	%		92.4	%		80.3	%

Property Type

As of March 31, 2018, the portfolio included 120 properties characterized as attached to regional malls and 129 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 March 31, 2018:

	Number of		Leased		Annual		Rent
Property Type (1)	Properties		GLA		Rent		PSF		Leased
Mall		120		16,258	$	119,820	$	7.37		83.8	%
Shopping Center		129		13,213		96,793		7.33		76.3	%
Total		249		29,471	$	216,613	$	7.35		80.3	%

(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 March 31, 2018:

	Number of		Leased		% of Total			Annual		% of Total			Annual
Tenant	Leases		GLA		Leased GLA			Rent		Annual Rent			Rent PSF
Sears Holdings (1)		167		21,913		74.3	%	$	99,065		45.7	%	$	4.52
In-Place Third-Party Leases		219		4,093		13.9	%		52,634		24.3	%		12.86
SNO Third-Party Leases		121		3,465		11.8	%		64,914		30.0	%		18.73
Sub-Total Third-Party Leases		340		7,558		25.7	%		117,548		54.3	%		15.55
Total		507		29,471		100.0	%	$	216,613		100.0	%	$	7.35

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

- 10 -


PROPERTY INFORMATION

Portfolio Overview (cont’d)

March 31, 2018

(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 March 31, 2018:

(dollars in thousands)
	Number of		Annual		% of Total
Tenant	Leases		Rent		Annual Rent			Concepts/Brands
Sears Holdings (1)		167	$	99,065		45.7	%	Sears, Sears Auto Center, Kmart
Round One Entertainment		7		6,821		3.1	%
Dave & Busters		7		6,328		2.9	%
At Home		10		5,896		2.7	%
Burlington Stores		9		5,763		2.7	%
Cinemark		4		4,899		2.3	%
Dick's Sporting Goods		5		4,640		2.1	%
Nordstrom Rack		6		4,385		2.0	%
AMC		3		4,202		1.9	%
Ross Dress for Less		8		4,091		1.9	%	Ross Dress for Less, dd's Discounts
Primark		3		3,925		1.8	%
Floor & Décor		3		3,082		1.4	%
24 Hour Fitness		3		2,909		1.3	%
TJX		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)

March 31, 2018

(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 March 31, 2018:

(in thousands except property count and PSF data)
	Number of		Annual		% of Total			Rent
State	Properties		Rent		Annual Rent			PSF
California		41	$	43,263		20.0	%	$	7.20
Florida		26		26,371		12.2	%		7.96
New York		11		15,665		7.2	%		11.51
Texas		15		9,935		4.6	%		6.07
Illinois		11		8,940		4.1	%		5.65
New Jersey		5		8,553		3.9	%		15.22
Virginia		6		7,798		3.6	%		6.76
Pennsylvania		7		7,027		3.2	%		10.83
Puerto Rico		6		6,974		3.2	%		7.73
Arizona		11		6,688		3.1	%		5.31
Total Top 10		139	$	141,214		65.1	%	$	7.66
Other (1)		110		75,399		34.9	%		6.83
Total		249	$	216,613		100.0	%	$	7.35

(1)	Includes 40 states

- 12 -


PROPERTY INFORMATION

Leasing Activity

March 31, 2018

(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 March 31, 2018, 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
Q1 2018		20		391		7,915		20.24		19		389		7,891		20.29		4.1	x
Total		188		5,221	$	93,882	$	17.98		170		4,877	$	88,620	$	18.17		4.1	x

SNO Lease Summary

The table below provides a summary of the Company’s SNO leases from December 31, 2017 to March 31, 2018, 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 December 31, 2017		114			3,534		$	63,407		$	17.94
Opened		(12	)		(407	)		(6,023	)		14.80
Terminated		(1	)		(53	)		(385	)		7.26
Signed		20			391			7,915			20.24
As of March 31, 2018		121			3,465		$	64,914		$	18.73

- 13 -


PROPERTY INFORMATION

Redevelopment Projects

March 31, 2018

(In thousands, except number of leases)

The table below summarizes the Company’s wholly-owned development activity from inception through March 31, 2018:

(in thousands)
					Estimated		Estimated								Estimated
	Number		Project		Development		Project		Projected Annual Income (2)						Incremental
Estimated Project Costs (1)	of Projects		Square Feet		Costs (1)		Costs (1)		Total		Existing		Incremental		Yield (3)
< $10,000		24		1,504	$	111,200	$	111,200	$	19,900	$	5,100	$	14,800
$10,001 - $20,000 (4)		25		2,554		329,500		349,400		51,700		14,700		36,800
> $20,001		19		3,230		706,500		762,400		104,300		21,800		82,500
Announced projects		68		7,288	$	1,147,200	$	1,223,000	$	175,900	$	41,600	$	134,100	10.5 - 11.5%
Acquired projects		15				63,600		63,600
Total projects		83			$	1,210,800	$	1,286,600

(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.

- 14 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

March 31, 2018

(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

Complete

Merrillville, IN

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

132,000

Complete

Elkhart, IN

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

86,500

Complete

San Antonio, TX

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

18,900

Complete

Bowie, MD

Recapture and repurpose auto center space for BJ's Brewhouse

8,200

Complete

Troy, MI

Partial recapture; redevelop existing store for At Home

100,000

Complete

Roseville, MI

Partial recapture; redevelop existing store for At Home

100,400

Complete

Rehoboth Beach, DE

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

56,700

Complete

Henderson, NV

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

144,400

Complete

Cullman, AL

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

99,000

Complete

Albany, NY

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

28,000

Substantially complete

Hagerstown, MD

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

15,400

Substantially complete

Jefferson City, MO

Termination property; redevelop existing store for Orscheln Farm and Home

96,000

Delivered to tenant

Kearney, NE

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

92,500

Delivered to tenants

Ft. Wayne, IN

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

12,000

Delivered to tenant

Olean, NY

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

45,000

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, Hobby Lobby 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

Hopkinsville, KY

Termination property; redevelop existing store for Bargain Hunt, additional junior anchors and small shop retail

87,900

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)

March 31, 2018

(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

Complete

Honolulu, HI

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

79,000

Complete

Anderson, SC

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

111,300

Complete

West Jordan, UT

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

81,400

Substantially complete

Madison, WI

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

75,300

Substantially complete

Thornton, CO

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

191,600

Delivered to tenant

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

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

Cockeysville, MD

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

83,500

Underway

Q2 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

North Hollywood, CA

Partial recapture; redevelop existing store for Burlington Stores, Ross Dress for Less 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

Paducah, KY

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

102,300

Underway

Q3 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

Q4 2018

North Miami, FL

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

124,300

Underway

Q4 2018

Hialeah, FL

100% recapture; redevelop existing store for Bed, Bath & Beyond, Ross Dress for Less and dd's Discounts to join current tenant, Aldi

88,400

Underway

Q4 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

Las Vegas, NV

Partial recapture; redevelop existing store for Round One 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

Santa Cruz, CA

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

62,200

Q4 2018

Q4 2019

- 16 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

March 31, 2018

(In thousands, except number of leases)

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

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Warrenton, VA

Termination property; redevelop existing store for Homegoods and additional retail

97,300

Q1 2019

Q3 2019

Saugus, MA

Partial recapture; redevelop existing store and detached auto center

NOTE: project which has been temporarily postponed while the Company identifies a new lead tenant.

99,000

To be determined

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

Delivered to tenants

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

Delivered to tenants

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 theater

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

NOTE: contributed to The Mark 302 JV in March 2018

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

Roseville, CA

Termination property; repurpose auto center space for AAA Auto Repair Center

Redevelop existing store for Cinemark, Round One and restaurants (project expansion)

147,400

Underway

Q2 2020

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, additional junior anchors and restaurants

223,800

Q2 2018

Q4 2019

- 17 -


PROPERTY INFORMATION

Redevelopment Projects (cont’d)

March 31, 2018

(In thousands, except number of leases)

Total Project Costs over $20 Million (cont’d)

Total

Estimated

Project

Construction

Substantial

Property

Description

Square Feet

Start

Completion

Anchorage, AK

100% recapture; redevelop existing store for Guitar Center, Safeway, Planet Fitness and additional retail 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, Floor & Decor and small shop retail

179,700

Q2 2018

Q4 2019

El Cajon, CA

100% recapture; redevelop existing store and auto center for Bob's Discount Furniture, Burlington Stores, additional retail and restaurants

242,700

Q3 2018

Q3 2019

Tucson, AZ

100% recapture; redevelop existing store and auto center for Round One and additional retail

224,300

Q3 2018

Q4 2019

Reno, NV

100% recapture; redevelop existing store and auto center for Round One and additional retail

169,800

Q3 2018

Q4 2019

Fairfield, CA

100% recapture (project expansion); redevelop existing store and auto center for Dave & Busters, additional retail and office

146,500

Q3 2018

Q1 2020

Plantation, FL

100% recapture (project expansion); redevelop existing store and auto center for GameTime, Powerhouse Gym, additional retail and restaurants

184,400

Q4 2018

Q1 2020

- 18 -


PROPERTY INFORMATION

Termination Properties

March 31, 2018

As of March 31, 2018, 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 approximately $45.1 million, amounts equal to one year of aggregate annual base rent plus one year of estimated real estate taxes and operating expense.

Subsequent to March 31, 2018, Sears Holdings provided notice that it intended to exercise its rights to terminate the Master Lease with respect to nine additional stores totaling 1.5 million square feet of gross leasable area. The aggregate annual base rent at these stores is approximately $5.8 million, or 2.7% of the Company’s total annual base rent as of March 31, 2018, including all signed leases. Sears Holdings will continue to pay Seritage rent until it vacates the stores which is expected to occur in August 2018. The termination fee is approximately $11.5 million, an amount equal to one year of the aggregate annual base rent, plus one year of estimated annual operating expenses.

As of March 31, 2018, the Company had announced redevelopment projects at 22 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. During the three months ended March 31, 2018, the Company sold four of the terminated properties.

Announced

Property

Square Feet

Notice

Termination

Redevelopment

Alpena, MI

118,200

September 2016

January 2017

Chicago, IL (S Kedzie)

118,800

September 2016

January 2017

Cullman, AL

98,500

September 2016

January 2017

Q2 2017

Deming, NM

96,600

September 2016

January 2017

Elkhart, IN

86,500

September 2016

January 2017

Q4 2016

Harlingen, TX

91,700

September 2016

January 2017

Sold

Houma, LA

96,700

September 2016

January 2017

Sold

Kearney, NE

86,500

September 2016

January 2017

Q3 2016

Manistee, MI

87,800

September 2016

January 2017

Merrillville, IN

108,300

September 2016

January 2017

Q4 2016

New Iberia, LA

91,700

September 2016

January 2017

Q2 2017

Riverton, WY

94,800

September 2016

January 2017

Sault Sainte Marie, MI

92,700

September 2016

January 2017

Sierra Vista, AZ

86,100

September 2016

January 2017

Sold

Springfield, IL

84,200

September 2016

January 2017

Q3 2016

Thornton, CO

190,200

September 2016

January 2017

Q1 2017

Yakima, WA

97,300

September 2016

January 2017

Sold

Chapel Hill, OH

187,179

January 2017

April 2017

Concord, NC

137,499

January 2017

April 2017

Detroit Lakes, MN

79,102

January 2017

April 2017

El Paso, TX

103,657

January 2017

April 2017

Elkins, WV

94,885

January 2017

April 2017

Henderson, NV

122,823

January 2017

April 2017

Q1 2017

Hopkinsville, KY

70,326

January 2017

April 2017

Q1 2018

Jefferson City, MO

92,016

January 2017

April 2017

Q2 2017

Kenton, OH

96,066

January 2017

April 2017

Kissimmee, FL

112,505

January 2017

April 2017

Layton, UT

90,010

January 2017

April 2017

Leavenworth, KS

76,853

January 2017

April 2017

Mount Pleasant, PA

83,536

January 2017

April 2017

Muskogee, OK

87,500

January 2017

April 2017

Owensboro, KY

68,334

January 2017

April 2017

Paducah, KY

108,244

January 2017

April 2017

Q3 2017

Platteville, WI

94,841

January 2017

April 2017

Riverside, CA

94,500

January 2017

April 2017

Sioux Falls, SD

72,511

January 2017

April 2017

Albany, NY

216,200

June 2017

October 2017

Q1 2016

Burnsville, MN

161,700

June 2017

October 2017

- 19 -


PROPERTY INFORMATION

Termination Properties (cont’d)

March 31, 2018

Announced

Property

Square Feet

Notice

Termination

Redevelopment

Chicago, IL (N Harlem)

293,700

June 2017

October 2017

Cockeysville, MD

83,900

June 2017

October 2017

Q1 2017

East Northport, NY

187,000

June 2017

October 2017

Q2 2017

Friendswood, TX

166,000

June 2017

November 2017 (1)

Greendale, WI

238,400

June 2017

October 2017

Q4 2017

Hagerstown, MD

107,300

June 2017

October 2017

Q1 2016

Johnson City, NY

155,100

June 2017

October 2017

Lafayette, LA

194,900

June 2017

October 2017

Mentor, OH

208,700

June 2017

October 2017

Middleburg Heights, OH

351,600

June 2017

October 2017

Olean, NY

75,100

June 2017

October 2017

Q1 2017

Overland Park, KS

215,000

June 2017

October 2017

Roseville, MI

277,000

June 2017

October 2017

Q3 2016

Sarasota, FL

204,500

June 2017

October 2017

Toledo, OH

209,900

June 2017

October 2017

Warwick, RI

169,200

June 2017

October 2017

Q3 2016 / Q3 2017

Westwood, TX

215,000

June 2017

January 2018 (1)

York, PA

82,000

June 2017

October 2017

Cedar Rapids, IA

141,100

April 2018

August 2018

Citrus Heights, CA

280,700

April 2018

August 2018

Gainesville, FL

140,500

April 2018

August 2018

Maplewood, MN

168,500

April 2018

August 2018

Pensacola, FL

212,300

April 2018

August 2018

Rochester, NY

128,500

April 2018

August 2018

Roseville, CA

121,000

April 2018

August 2018

Q2 2017 / Q1 2018

San Antonio, TX

187,800

April 2018

August 2018

Q4 2015

Warrenton, NJ

113,900

April 2018

August 2018

Q1 2018

Total square feet

8,905,487

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

- 20 -


PROPERTY INFORMATION

Joint Venture Properties

March 31, 2018

GGP Joint Ventures

					Sears or	Recapture	Total
	Mall Name	City	State	Joint Venture	Kmart	Rights (1)	GLA (2)		Leased (2)
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 (3)	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 (3)	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	n/a	(4)		88,900		5.2	%

(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)	Based on signed leases as of March 31, 2018; GLA presented at the Company's proportional share.

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

(4)	As of March 31, 2018, the JVs had exercised certain recapture rights with respect to this property or announced plans to exercise such rights according to a specific schedule.

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 March 31, 2018; GLA presented at the Company's proportional share.

- 21 -


PROPERTY INFORMATION

Joint Venture Properties (cont’d)

March 31, 2018

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 March 31, 2018; GLA presented at the Company's proportional share.

Mark 302 (Invesco) Joint Venture

Sears or

Recapture

Total

Mall Name

City

State

Joint Venture

Kmart

Rights

GLA (1)

Leased (1)

302 Colorado Avenue

Santa Monica

Mark 302 JV

n/a

(2)

48,200

0.0

(1)	Based on signed leases as of March 31, 2018; GLA presented at the Company's proportional share.

(2)	As of March 31, 2018, the JV had exercised certain recapture rights with respect to this property.

- 22 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					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		(5)		257,700		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)		177,100		94.2	%		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	5950 East Broadway Boulevard	Tucson	AZ	Mall	Sears		(5)		250,100		100.0	%		20
13	3150 South 4th Avenue	Yuma	AZ	Shopping Center	Sears	50%			90,400		100.0	%		14
14	3625 East 18th Street	Antioch	CA	Shopping Center	Kmart	50%			95,200		100.0	%		7
15	42126 Big Bear Boulevard	Big Bear Lake	CA	Shopping Center	Kmart	50%			80,400		91.2	%		8
16	20700 South Avalon Boulevard	Carson	CA	Mall	n/a		(5)		182,900		55.3	%		13
17	565 Broadway	Chula Vista	CA	Mall	Sears	50%			250,100		100.0	%		16
18	5900 Sunrise Mall	Citrus Heights	CA	Mall	Sears		(7)		289,500		100.0	%		22
19	912 County Line Road	Delano	CA	Freestanding	Kmart	50%			86,100		100.0	%		6
20	575 Fletcher Parkway	El Cajon	CA	Mall	Sears		(5)		286,500		100.0	%		22
21	3751 South Dogwood Road	El Centro	CA	Mall	Sears	50%			139,700		100.0	%		14
22	1420 Travis Boulevard	Fairfield	CA	Mall	Sears		(5)		164,100		100.0	%		9
23	5901 Florin Road	Florin	CA	Shopping Center	Sears	50%			272,700		100.0	%		20
24	3636 North Blackstone Avenue	Fresno	CA	Shopping Center	Sears	50%			217,600		100.0	%		13
25	1500 Anna Sparks Way	McKinleyville	CA	Shopping Center	Kmart	50%			94,800		100.0	%		8
26	1011 West Olive Avenue	Merced	CA	Shopping Center	Sears	50%			92,600		100.0	%		10
27	5080 East Montclair Plaza Lane	Montclair	CA	Mall	Sears	50%			174,700		100.0	%		3
28	22550 Town Circle	Moreno Valley	CA	Mall	Sears	50%			169,400		100.0	%		11
29	6000 Mowry Avenue	Newark	CA	Mall	Sears	50%			145,800		100.0	%		10
30	12121 Victory Boulevard	North Hollywood	CA	Shopping Center	Sears		(5)		161,900		100.0	%		4
31	72880 Highway 111	Palm Desert	CA	Mall	Sears	50%			136,500		100.0	%		8
32	1855 Main Street	Ramona	CA	Shopping Center	Kmart	50%			107,600		94.5	%		10
33	5261 Arlington Avenue	Riverside	CA	Freestanding	Sears	50%			214,200		100.0	%		19
34	3001 Iowa Avenue	Riverside	CA	Freestanding	n/a		(6)		132,600		28.7	%		13
35	1191 Galleria Boulevard	Roseville	CA	Mall	Sears	(5)(7)			139,000		100.0	%		9
36	1700 North Main Street	Salinas	CA	Mall	Sears	50%			133,000		100.0	%		10

- 23 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
37	100 Inland Center	San Bernardino	CA	Mall	Sears	100%			264,700		100.0	%		22
38	1178 El Camino Real	San Bruno	CA	Mall	Sears	50%			276,600		100.0	%		13
39	4575 La Jolla Village Drive	San Diego	CA	Mall	n/a		(5)		226,200		8.9	%		13
40	2180 Tully Road	San Jose	CA	Mall	Sears	50%			262,500		100.0	%		22
41	4015 Capitola Road	Santa Cruz	CA	Mall	Sears		(5)		123,800		90.6	%		10
42	200 Town Center East	Santa Maria	CA	Mall	Sears	50%			108,600		100.0	%		5
43	895 Faulkner Road	Santa Paula	CA	Freestanding	Kmart	50%			71,300		100.0	%		10
44	40710 Winchester Road	Temecula	CA	Mall	Sears		(5)		120,100		94.8	%		10
45	145 West Hillcrest Drive	Thousand Oaks	CA	Shopping Center	Sears	50%			164,000		100.0	%		11
46	3295 East Main Street	Ventura	CA	Mall	Sears	50%			178,600		100.0	%		2
47	3501 South Mooney Boulevard	Visalia	CA	Shopping Center	Sears	50%			75,600		100.0	%		7
48	1209 Plaza Drive	West Covina	CA	Mall	Sears	50%			142,000		100.0	%		16
49	100 Westminster Mall	Westminster	CA	Mall	Sears		(5)		197,900		100.0	%		14
50	10785 West Colfax Avenue	Lakewood	CO	Shopping Center	Sears	50%			153,000		100.0	%		8
51	1400 East 104th Avenue	Thornton	CO	Shopping Center	n/a		(6)		186,800		30.5	%		25
52	850 Hartford Turnpike	Waterford	CT	Mall	Sears	50%			149,300		100.0	%		11
53	1445 New Britain Avenue	West Hartford	CT	Shopping Center	n/a		(5)		163,700		59.3	%		13
54	19563 Coastal Highway	Rehoboth Beach	DE	Freestanding	Kmart		(5)		123,300		100.0	%		13
55	5900 Glades Road	Boca Raton	FL	Mall	Sears		(5)		178,500		100.0	%		19
56	303 U.S. Highway 301 Boulevard West	Bradenton	FL	Mall	Sears	50%			99,900		100.0	%		15
57	7350 Manatee Avenue West	Bradenton	FL	Shopping Center	Kmart	50%			82,900		100.0	%		9
58	27001 U.S. 19 North	Clearwater	FL	Mall	Sears		(5)		211,200		100.0	%		14
59	1625 Northwest 107th Avenue	Doral	FL	Mall	Sears	50%			212,900		100.0	%		13
60	4125 Cleveland Avenue	Ft. Myers	FL	Mall	Sears	50%			146,800		100.0	%		12
61	6201 West Newberry Road	Gainesville	FL	Mall	Sears		(7)		140,500		100.0	%		8
62	1675 West 49th Street	Hialeah	FL	Mall	Sears	50%			197,400		100.0	%		8
63	1460 West 49th Street	Hialeah	FL	Freestanding	n/a		(5)		100,500		100.0	%		9
64	2211 West Vine Street	Kissimmee	FL	Shopping Center	n/a		(6)		148,900		24.4	%		14
65	3800 US Highway 98 North	Lakeland	FL	Mall	Sears	50%			156,200		100.0	%		12
66	1050 South Babcock Street	Melbourne	FL	Freestanding	Sears	50%			102,600		100.0	%		14
67	19505 Biscayne Boulevard	Miami	FL	Mall	n/a		(5)		173,300		3.0	%		12
68	20701 Southwest 112th Avenue	Miami	FL	Mall	Sears	100%			170,100		100.0	%		15
69	10700 Biscayne Boulevard	North Miami	FL	Freestanding	n/a		(5)		119,900		100.0	%		11
70	3100 Southwest College Road	Ocala	FL	Mall	Sears	50%			146,200		100.0	%		12
71	380 Blanding Boulevard	Orange Park	FL	Shopping Center	n/a	n/a			87,400		100.0	%		9
72	3111 East Colonial Drive	Orlando	FL	Mall	n/a		(5)		130,400		90.3	%		18

- 24 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
73	733 North Highway 231	Panama City	FL	Mall	Sears	50%			139,300		100.0	%		15
74	7171 North Davis Highway	Pensacola	FL	Shopping Center	Sears		(7)		212,300		100.0	%		15
75	8000 West Broward Boulevard	Plantation	FL	Mall	Sears		(5)		201,600		100.0	%		18
76	8201 South Tamiami Trail	Sarasota	FL	Mall	n/a		(6)		204,500		0.0	%		15
77	4501 66th Street North	St. Petersburg	FL	Freestanding	Kmart	50%			120,600		100.0	%		11
78	2300 Tyrone Boulevard North	St. Petersburg	FL	Mall	n/a		(5)		147,800		95.2	%		14
79	7810 Abercorn Street	Savannah	GA	Mall	Sears	100%			167,300		100.0	%		15
80	500 North Nimitz Highway	Honolulu	HI	Freestanding	n/a		(5)		76,100		100.0	%		4
81	1501 Highway 169 North	Algona	IA	Freestanding	Kmart	50%			99,300		100.0	%		7
82	4600 1st Avenue Northeast	Cedar Rapids	IA	Mall	Sears		(7)		146,000		100.0	%		12
83	1405 South Grand Avenue	Charles City	IA	Freestanding	Kmart	50%			96,600		100.0	%		11
84	2307 Superior Street	Webster City	IA	Shopping Center	Kmart	50%			40,800		100.0	%		4
85	460 North Milwaukee Street	Boise	ID	Mall	Sears	50%			123,600		100.0	%		8
86	4730 West Irving Park Road	Chicago	IL	Freestanding	Sears		(5)		356,700		100.0	%		6
87	1601 North Harlem Avenue	Chicago	IL	Freestanding	n/a		(6)		293,700		0.0	%		7
88	5050 South Kedzie Avenue	Chicago	IL	Shopping Center	n/a		(6)		168,500		15.3	%		9
89	17550 Halsted Street	Homewood	IL	Shopping Center	n/a	n/a			196,100		100.0	%		19
90	3340 Mall Loop Drive	Joliet	IL	Mall	Sears	50%			204,600		100.0	%		17
91	2860 South Highland Avenue	Lombard	IL	Freestanding	n/a	n/a			139,300		100.0	%		8
92	4902-5000 23rd Avenue	Moline	IL	Freestanding	Kmart	50%			123,700		97.4	%		12
93	7503 West Cermak Road	North Riverside	IL	Mall	Sears		(5)		202,500		81.3	%		13
94	2 Orland Square Drive	Orland Park	IL	Mall	Sears		(5)		199,600		100.0	%		16
95	2500 Wabash Avenue	Springfield	IL	Shopping Center	n/a		(6)		133,400		66.1	%		14
96	3231 Chicago Road	Steger	IL	Freestanding	Kmart	50%			87,400		100.0	%		3
97	3101 Northview Drive	Elkhart	IN	Shopping Center	n/a		(6)		86,600		100.0	%		8
98	4201 Coldwater Road	Ft. Wayne	IN	Mall	Sears		(5)		231,900		100.0	%		15
99	101 West Lincoln Highway	Merrillville	IN	Shopping Center	n/a		(6)		170,900		90.3	%		17
100	4820 South 4th Street Trafficway	Leavenworth	KS	Freestanding	n/a		(6)		83,600		0.0	%		9
101	9701 Metcalf Avenue	Overland Park	KS	Shopping Center	n/a		(6)		215,000		0.0	%		19
102	3010 Fort Campbell Boulevard	Hopkinsville	KY	Shopping Center	n/a		(6)		93,000		33.9	%		13
103	2815 West Parrish Avenue	Owensboro	KY	Shopping Center	n/a		(6)		68,300		0.0	%		5
104	5101 Hinkleville Road	Paducah	KY	Mall	n/a		(6)		97,300		42.1	%		9
105	5715 Johnston Street	Lafayette	LA	Mall	n/a		(6)		194,900		0.0	%		16
106	900 East Admiral Doyle Drive	New Iberia	LA	Freestanding	n/a		(6)		96,600		100.0	%		12
107	200 Grossman Drive	Braintree	MA	Shopping Center	n/a		(5)		84,900		100.0	%		34
108	1325 Broadway	Saugus	MA	Mall	Sears		(5)		210,800		68.8	%		16

- 25 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
109	15700 Emerald Way	Bowie	MD	Shopping Center	Sears		(5)		131,000		100.0	%		11
110	126 Shawan Road	Cockeysville	MD	Shopping Center	n/a	(5)(6)			122,800		37.7	%		12
111	3207 Solomons Island Road	Edgewater	MD	Shopping Center	Kmart	50%			117,200		100.0	%		14
112	17318 Valley Mall Road	Hagerstown	MD	Mall	n/a	(5)(6)			118,900		11.8	%		12
113	417 Main Street	Madawaska	ME	Shopping Center	Kmart	50%			49,700		100.0	%		2
114	2355 US Highway 23 South	Alpena	MI	Freestanding	n/a		(6)		118,200		0.0	%		12
115	1250 Boardman-Jackson Crossing	Jackson	MI	Shopping Center	Sears	50%			152,700		100.0	%		15
116	2100 Southfield Road	Lincoln Park	MI	Shopping Center	Sears	50%			301,700		100.0	%		17
117	1560 US 31 South	Manistee	MI	Shopping Center	n/a		(6)		94,700		0.0	%		12
118	32123 Gratiot Avenue	Roseville	MI	Mall	n/a	(5)(6)			367,900		35.6	%		21
119	2760 I-75 Business Spur	Sault Sainte Marie	MI	Freestanding	n/a		(6)		92,700		0.0	%		11
120	22801 Harper Avenue	St. Clair Shores	MI	Freestanding	n/a		(5)		103,000		100.0	%		11
121	300 West 14 Mile Road	Troy	MI	Mall	Sears		(5)		384,100		100.0	%		30
122	3100 Washtenaw Road	Ypsilanti	MI	Freestanding	n/a	n/a			99,400		100.0	%		12
123	14250 Buck Hill Road	Burnsville	MN	Mall	n/a		(6)		161,700		0.0	%		15
124	1305 Highway 10 West	Detroit Lakes	MN	Shopping Center	n/a		(6)		87,100		9.2	%		15
125	3001 White Bear Avenue North	Maplewood	MN	Mall	Sears		(7)		174,900		100.0	%		14
126	425 Rice Street	St. Paul	MN	Freestanding	Sears	100%			217,900		100.0	%		17
127	11 South Kingshighway Street	Cape Girardeau	MO	Freestanding	Kmart	50%			82,600		100.0	%		6
128	1 Flower Valley Shopping Center	Florissant	MO	Shopping Center	Kmart		(5)		124,000		100.0	%		11
129	2304 Missouri Boulevard	Jefferson City	MO	Freestanding	n/a		(6)		97,700		100.0	%		10
130	3700 South Campbell Avenue	Springfield	MO	Shopping Center	n/a	n/a			112,900		100.0	%		8
131	2308 Highway 45 North	Columbus	MS	Shopping Center	Kmart	50%			166,700		97.5	%		18
132	3180 Highway 2 West	Havre	MT	Freestanding	Kmart	50%			94,700		100.0	%		9
133	1 South Tunnel Road	Asheville	NC	Mall	Sears		(5)		240,700		100.0	%		16
134	545 Concord Parkway North	Concord	NC	Shopping Center	n/a		(6)		171,300		19.7	%		26
135	1302 Bridford Parkway	Greensboro	NC	Shopping Center	n/a	n/a			171,700		77.6	%		16
136	1 20th Avenue Southeast	Minot	ND	Shopping Center	Kmart	50%			110,400		100.0	%		13
137	4700 2nd Avenue	Kearney	NE	Freestanding	n/a		(6)		80,000		47.5	%		8
138	1500 South Willow Street	Manchester	NH	Mall	Sears	50%			144,100		100.0	%		11
139	310 Daniel Webster Highway	Nashua	NH	Mall	Sears	50%			167,100		100.0	%		7
140	50 Fox Run Road	Portsmouth	NH	Mall	Sears	50%			127,000		100.0	%		13
141	77 Rockingham Park Boulevard	Salem	NH	Mall	Sears		(5)		250,500		100.0	%		14
142	1500 Highway 35	Middletown	NJ	Freestanding	n/a	100%			191,100		100.0	%		23
143	1640 Route 22	Watchung	NJ	Freestanding	n/a		(5)		126,700		74.7	%		19
144	1205 East Pine Street	Deming	NM	Freestanding	n/a		(6)		96,600		0.0	%		10

- 26 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
145	3000 East Main Street	Farmington	NM	Freestanding	Kmart	50%			90,700		100.0	%		11
146	2220 North Grimes Street	Hobbs	NM	Shopping Center	Kmart	50%			88,900		100.0	%		8
147	10405 South Eastern Avenue	Henderson	NV	Shopping Center	n/a		(6)		128,500		100.0	%		12
148	4000 Meadows Lane	Las Vegas	NV	Mall	Sears		(5)		150,200		100.0	%		11
149	5400 Meadowood Mall Circle	Reno	NV	Mall	Sears		(5)		198,800		100.0	%		3
150	1425 Central Avenue	Albany	NY	Mall	n/a	(5)(6)			277,900		17.7	%		21
151	4155 State Route 31	Clay	NY	Mall	Sears	50%			146,500		100.0	%		12
152	4000 Jericho Turnpike	East Northport	NY	Shopping Center	n/a		(6)		179,700		92.7	%		18
153	195 North Broadway	Hicksville	NY	Freestanding	Sears		(5)		362,500		100.0	%		30
154	601 Harry L Drive	Johnson City	NY	Mall	n/a		(6)		155,100		0.0	%		11
155	2801 West State Street	Olean	NY	Freestanding	n/a	(5)(6)			118,000		16.9	%		13
156	317 Greece Ridge Center Drive	Rochester	NY	Mall	Sears		(7)		128,500		100.0	%		15
157	171 Delaware Avenue	Sidney	NY	Shopping Center	Kmart	50%			94,400		100.0	%		19
158	200 Eastview Mall	Victor	NY	Mall	Sears	50%			123,000		100.0	%		14
159	600 Lee Boulevard	Yorktown Heights	NY	Mall	Sears		(5)		160,000		100.0	%		12
160	4100 Belden Village Avenue Northwest	Canton	OH	Mall	Sears		(5)		219,400		100.0	%		19
161	2000 Brittain Road	Chapel Hill	OH	Mall	n/a		(6)		193,100		0.0	%		21
162	2700 Miamisburg Centerville Road	Dayton	OH	Mall	Sears		(5)		171,900		95.8	%		16
163	1005 East Columbus Street	Kenton	OH	Freestanding	n/a		(6)		96,100		0.0	%		11
164	502 Pike Street	Marietta	OH	Freestanding	Kmart	50%			87,500		100.0	%		7
165	7875 Johnnycake Ridge Road	Mentor	OH	Mall	n/a		(6)		208,700		0.0	%		20
166	6950 West 130th Street	Middleburg Heights	OH	Shopping Center	n/a		(6)		351,600		0.0	%		15
167	1447 North Main Street	North Canton	OH	Shopping Center	Kmart	50%			87,100		100.0	%		9
168	555 South Avenue	Tallmadge	OH	Freestanding	Kmart	50%			84,200		100.0	%		8
169	3408 West Central Avenue	Toledo	OH	Shopping Center	n/a		(6)		209,900		0.0	%		11
170	4 East Shawnee Road	Muskogee	OK	Freestanding	n/a		(6)		87,500		0.0	%		10
171	4400 South Western Avenue	Oklahoma City	OK	Freestanding	Sears		(5)		223,700		100.0	%		24
172	3132 East 51st Street	Tulsa	OK	Freestanding	n/a	n/a			87,200		100.0	%		9
173	1180 Southeast 82nd Avenue	Happy Valley	OR	Mall	Sears	50%			144,300		100.0	%		12
174	2640 West 6th Street	The Dalles	OR	Freestanding	Kmart	50%			87,100		100.0	%		8
175	1180 Walnut Bottom Road	Carlisle	PA	Shopping Center	Kmart	50%			117,800		100.0	%		3
176	3975 Columbia Avenue	Columbia	PA	Shopping Center	Kmart	50%			86,700		100.0	%		8
177	160 North Gulph Road (7)	King Of Prussia	PA	Mall	n/a	n/a			210,900		97.6	%		14
178	1745 Quentin Road	Lebanon	PA	Shopping Center	Kmart	50%			117,200		100.0	%		15
179	100 Cross Roads Plaza	Mount Pleasant	PA	Shopping Center	n/a		(6)		83,500		0.0	%		10
180	400 North Best Avenue	Walnutport	PA	Freestanding	Kmart	50%			121,200		100.0	%		16

- 27 -

PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
181	1094 Haines Road	York	PA	Shopping Center	n/a		(6)		82,000		0.0	%		6
182	PR 167 & Las Cumbres	Bayamon	PR	Shopping Center	Kmart	50%			115,200		100.0	%		10
183	400 Calle Betances	Caguas	PR	Mall	Sears	50%			138,700		100.0	%		8
184	Avenue 65 Infanteria	Carolina	PR	Mall	Sears	50%			198,000		100.0	%		11
185	Martinez Nadal Avenue	Guaynabo	PR	Shopping Center	Kmart		(5)		217,100		94.4	%		18
186	PR Road 2, Km 149.5	Mayaguez	PR	Shopping Center	Kmart	50%			118,200		100.0	%		13
187	2643 Ponce Bypass	Ponce	PR	Shopping Center	Kmart	50%			126,900		100.0	%		9
188	650 Bald Hill Road	Warwick	RI	Shopping Center	n/a	(5)(6)			211,700		90.6	%		20
189	3801B Clemson Boulevard	Anderson	SC	Shopping Center	n/a		(5)		117,100		100.0	%		12
190	7801 Rivers Avenue	Charleston	SC	Mall	n/a		(5)		127,500		46.8	%		14
191	2302 Cherry Road	Rock Hill	SC	Shopping Center	Kmart	50%			89,300		100.0	%		12
192	3020 West 12th Street	Sioux Falls	SD	Freestanding	n/a		(6)		72,500		0.0	%		6
193	2800 North Germantown Parkway	Cordova	TN	Mall	Sears	50%			160,900		100.0	%		12
194	4570 Poplar Avenue	Memphis	TN	Freestanding	n/a		(5)		112,700		78.3	%		11
195	12625 North Interstate Highway 35	Austin	TX	Shopping Center	Sears		(5)		172,000		100.0	%		25
196	3450 West Camp Wisdom Road	Dallas	TX	Mall	Sears	50%			205,300		100.0	%		13
197	9484 Dyer Street	El Paso	TX	Freestanding	n/a		(6)		112,100		7.5	%		11
198	300 Baybrook Mall	Friendswood	TX	Mall	n/a		(6)		166,000		0.0	%		13
199	303 Memorial City	Houston	TX	Mall	Sears	50%			214,400		100.0	%		20
200	12605 North Gessner Road	Houston	TX	Freestanding	n/a	n/a			134,000		100.0	%		11
201	6301 Northwest Loop 410	Ingram	TX	Mall	Sears	50%			168,400		100.0	%		12
202	2501 Irving Mall	Irving	TX	Mall	Sears	50%			83,200		95.6	%		18
203	201 Central Park Mall	San Antonio	TX	Freestanding	Sears	(5)(7)			213,000		97.8	%		15
204	4000 North Shepherd	Shepherd	TX	Freestanding	Sears	50%			201,700		100.0	%		12
205	13131 Preston Road	Valley View	TX	Mall	n/a		(5)		235,000		2.5	%		23
206	9570 Southwest Freeway	Westwood	TX	Freestanding	n/a		(6)		213,600		0.0	%		18
207	2010 North Main Street	Layton	UT	Shopping Center	n/a		(6)		176,900		35.3	%		14
208	7453 South Plaza Center Drive	West Jordan	UT	Shopping Center	Sears		(5)		200,900		95.3	%		12
209	5901 Duke Street	Alexandria	VA	Mall	Sears	50%			262,100		100.0	%		18
210	1401 Greenbrier Parkway	Chesapeake	VA	Mall	Sears	50%			169,400		100.0	%		15
211	12000 Fair Oaks Mall	Fairfax	VA	Mall	Sears		(5)		220,700		72.3	%		15
212	5200 Mercury Boulevard	Hampton	VA	Shopping Center	Sears	50%			245,000		100.0	%		16
213	4588 Virginia Beach Boulevard	Virginia Beach	VA	Mall	Sears	50%			197,300		100.0	%		14
214	141 West Lee Highway	Warrenton	VA	Shopping Center	Sears		(7)		121,100		100.0	%		9
215	2200 148th Avenue Northeast	Redmond	WA	Shopping Center	Sears		(5)		267,400		86.6	%		15
216	8800 Northeast Vancouver Mall Drive	Vancouver	WA	Mall	Sears	50%			129,700		100.0	%		10

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PROPERTY INFORMATION

Wholly Owned Properties

March 31, 2018

					Sears or	Recapture		Total					Land
	Property Address	City	State	Property Type (1)	Kmart	Rights (2)(3)		GLA (4)		Leased (4)			Acres
217	5200 South 76th Street	Greendale	WI	Mall	n/a		(6)		187,500		56.9	%		21
218	53 West Towne Mall	Madison	WI	Mall	Sears		(5)		142,400		100.0	%		18
219	1425 East Bus Highway 151	Platteville	WI	Freestanding	n/a		(6)		94,800		0.0	%		10
220	1701 4th Avenue West	Charleston	WV	Shopping Center	Kmart	50%			105,600		100.0	%		10
221	731 Beverly Pike	Elkins	WV	Shopping Center	n/a		(6)		99,600		0.0	%		8
222	101 Great Teays Boulevard	Scott Depot	WV	Freestanding	Kmart	50%			89,800		100.0	%		8
223	4000 East 2nd Street	Casper	WY	Shopping Center	Kmart	50%			91,400		100.0	%		8
224	2150 South Douglas Highway	Gillette	WY	Freestanding	Kmart	50%			94,600		100.0	%		10
225	1960 North Federal Boulevard	Riverton	WY	Freestanding	n/a		(6)		94,800		0.0	%		9
	Total - Wholly-Owned Properties								34,551,000		79.5	%		2,874

(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 March 31, 2018.

(5)	As of March 31, 2018, the Company had exercised certain recapture rights with respect to this property.

(6)	As of March 31, 2018, Sears Holdings had exercised its termination rights with respect to this property.

(7)	Subsequent to March 31, 2018, Sears Holdings notified the Company of its intent to exercise its termination rights with respect to this property.

(8)	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 for Real Estate ("EBITDAre") and Company EBITDA

EBITDAre is calculated in accordance with the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"), which may not be comparable to measures calculated by other companies who do not use the NAREIT definition of EBITDA. EBITDAre is calculated as net income computed in accordance with GAAP, excluding interest expense, income tax expense, depreciation and amortization, gains (or losses) from property sales and impairment charges on depreciable real estate assets. The Company believes EBITDAre provides useful information to investors regarding our 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 EBITDAre facilitates comparisons between us and other equity REITs and real property owners that are not REITs.

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

Funds From Operations ("FFO") and Company FFO

FFO is calculated in accordance with 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 - May 4, 2018

Attached files

Seritage Growth Properties Reports