Seritage Growth Properties Announces Amendment to Senior Secured Term Loan Agreement

Rhea-AI Summary

Seritage Growth Properties (NYSE: SRG) announced an amendment to its $1.6 billion Senior Secured Term Loan Agreement with Berkshire Hathaway Life Insurance Company. This amendment allows Seritage to prepay up to $800 million of the loan principal and extend the maturity date from July 31, 2023, to July 31, 2025, contingent on the principal reduction. The 'make whole' provision will not apply to these prepayments. As of September 30, 2021, Seritage's portfolio included interests in 170 properties totaling approximately 10 million square feet of GLA.

Positive

• Ability to prepay up to $800 million of loan principal, improving financial flexibility.
• Extension of loan maturity date to July 2025 enhances liquidity and reduces immediate repayment pressure.

Negative

• Company faces ongoing negative operating cash flow, which may hinder its ability to fund operations and development.

Provides Seritage Ability to Prepay Loan and Opportunity to Extend Maturity Date Until July 2025, Subject to $800 Million of Prepayments

NEW YORK--(BUSINESS WIRE)-- Seritage Growth Properties (NYSE: SRG) (the “Company”), a national owner and developer of 170 retail, residential and mixed-use properties, today announced an amendment to Seritage Growth Properties L.P.’s and the Company’s Senior Secured Term Loan Agreement (the “Agreement”) with Berkshire Hathaway Life Insurance Company of Nebraska for the $1.6 billion term loan facility previously announced on July 31, 2018.

Under the terms of the amendment, the companies mutually agreed that the “make whole” provision of the Agreement shall not be applicable to prepayments of the term loan facility’s principal. Additionally, the companies agreed that, at Seritage’s election, the Agreement may be extended for two years from the July 31, 2023 maturity date (the “Maturity Date”) to July 31, 2025 provided that the term loan facility’s principal has been reduced to $800 million by the Maturity Date.

In all other respects, the Agreement remains unchanged.

About Seritage Growth Properties

Seritage is principally engaged in the ownership, development, redevelopment, management and leasing of diversified and mixed-use properties throughout the United States. As of September 30, 2021, the Company’s portfolio consisted of interests in 170 properties comprised of approximately 10.0 million square feet of GLA or build-to-suit leased area (approximately 8.0 million at share), approximately 4.0 million of which is held by unconsolidated entities (approximately 2.0 million at share), approximately 600 acres held for or under development and approximately 10.0 million square feet of GLA or approximately 850 acres to be disposed of.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that could cause or contribute to such differences include, but are not limited to: declines in retail, real estate and general economic conditions; the impact of ongoing negative operating cash flow on the Company’s ability to fund operations and ongoing development; the impact of the COVID-19 pandemic on the business of the Company’s tenants and the Company’s business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service the Company’s debt obligations and ability to pay dividends and other distributions to shareholders; competition in the real estate and retail industries; risks relating to redevelopment activities and potential acquisition or disposition of properties; failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; contingencies to the commencement of rent under leases; the Company’s historical exposure to Sears Holdings and the effects of its previously announced bankruptcy filing; the litigation filed against the Company and other defendants in the Sears Holdings adversarial proceeding pending in bankruptcy court; the terms of the Company’s indebtedness and availability or sources of liquidity, including the Company’s ability to access or obtain sufficient sources of financing to fund its liquidity needs and economic conditions that may affect the cost of borrowing; environmental, health, safety and land use laws and regulations; restrictions with which the Company is required to comply in order to maintain REIT status and other legal requirements to which the Company is subject; risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions; and the Company’s relatively limited operating history as an independent public company. For additional discussion of these and other applicable risks, assumptions and uncertainties, see the “Risk Factors” and forward-looking statement disclosure contained in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2020 and any subsequent quarterly reports on Form 10-Q. While the Company believes that its forecasts and assumptions are reasonable, the Company cautions that actual results may differ materially. The Company intends 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211129005154/en/

Seritage Growth Properties

Amanda Lombard, CFO

(212) 355-7800

IR@Seritage.com

Source: Seritage Growth Properties

FAQ

What recent financial amendment did Seritage Growth Properties announce?

Seritage announced an amendment to its $1.6 billion Senior Secured Term Loan Agreement allowing for up to $800 million in prepayments and an extension of the maturity date to July 2025.

What is the significance of the maturity date extension for Seritage (NYSE: SRG)?

The extension to July 2025 provides Seritage with increased liquidity and reduced repayment pressure on its loan obligations.

How many properties does Seritage Growth Properties own?

As of September 30, 2021, Seritage owned interests in 170 properties, totaling approximately 10 million square feet of gross leasable area.