Seritage Growth Properties Makes $15 Million Loan Prepayment

Rhea-AI Summary

Seritage Growth Properties (NYSE: SRG) has made a voluntary prepayment of $15 million toward its $1.6 billion term loan facility from Berkshire Hathaway Life Insurance Company of Nebraska. The company has now repaid a total of $1.36 billion since December 2021, leaving $240 million outstanding. This latest prepayment will reduce annual interest expense by $1.05 million, while cumulative repayments have decreased annual interest expenses by approximately $95.2 million.

Positive

• Reduced outstanding debt by $15 million through voluntary prepayment
• Decreased annual interest expense by $1.05 million
• Total debt reduction of $1.36 billion since December 2021
• Cumulative annual interest expense reduction of $95.2 million

Negative

• $240 million in term loan debt still outstanding

Insights

Financial Analyst

This $15 million loan prepayment is part of Seritage's ongoing debt reduction strategy, bringing their total repayment to $1.36 billion since December 2021. The remaining balance on the Berkshire Hathaway term loan now stands at $240 million. The prepayment yields immediate benefits, reducing annual interest expenses by $1.05 million. The cumulative interest savings from all repayments total an impressive $95.2 million annually, significantly improving the company's cash flow position.

This strategic debt management demonstrates strong financial discipline and improved balance sheet health. With a market cap of $254 million, the company's ability to make voluntary prepayments suggests healthy cash flow from their real estate operations and asset sales. The reduced debt burden and lower interest expenses enhance financial flexibility and strengthen the company's position for future growth initiatives in their retail, residential and mixed-use property portfolio.

 

NEW YORK--(BUSINESS WIRE)-- Seritage Growth Properties (NYSE: SRG) (the “Company”), a national owner and developer of retail, residential and mixed-use properties, today announced that on November 27, 2024, the Company has made a voluntary prepayment of $15 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”).

With the prepayments, the Company has now repaid a total of $1.36 billion since December 2021 and $240 million of the term loan facility remains outstanding. The current prepayments will reduce Seritage’s total annual interest expense related to the term loan facility by approximately $1.05 million. The cumulative repayments since December 2021 have reduced Seritage’s total annual interest expense related to the term loan facility by approximately $95.2 million.

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, 2024, the Company’s portfolio consisted of interests in 21 properties comprised of approximately 2.7 million square feet of gross leaseable area (“GLA”) or build-to-suit leased area and 342 acres of land. The portfolio consists of approximately 1.5 million square feet of GLA and 208 acres held by 12 wholly owned properties and 1.2 million square feet of GLA and 134 acres held by nine unconsolidated entities.

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,” “potential,” “will,” “approximately,” or ”anticipates” 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; risks relating to redevelopment activities; contingencies to the commencement of rent under leases; the terms of the Company’s indebtedness and other legal requirements to which the Company is subject; failure to achieve expected occupancy and/or rent levels within the projected time frame or at all; the impact of ongoing negative operating cash flow on the Company’s ability to fund operations and ongoing development; the Company’s ability to access or obtain sufficient sources of financing to fund the Company’s liquidity needs; environmental, health, safety and land use laws and regulations; and possible acts of war, terrorist activity or other acts of violence or cybersecurity incidents. 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 (SEC), including the Company’s annual report on Form 10-K for the year ended December 31, 2023 and any subsequent Form 10-Qs. 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/20241202732004/en/

Seritage Growth Properties

John Garilli

Interim Chief Financial Officer

(212) 355-7800

IR@Seritage.com

Source: Seritage Growth Properties

FAQ

How much did Seritage Growth Properties (SRG) prepay on its term loan in November 2024?

Seritage Growth Properties made a voluntary prepayment of $15 million toward its term loan facility on November 27, 2024.

How much has Seritage (SRG) repaid on its Berkshire Hathaway term loan since December 2021?

Seritage has repaid a total of $1.36 billion on its term loan facility since December 2021.

What is the remaining balance on Seritage's (SRG) Berkshire Hathaway term loan?

After the latest prepayment, $240 million remains outstanding on Seritage's term loan facility.

How much will Seritage (SRG) save in annual interest expense from its latest prepayment?

The latest $15 million prepayment will reduce Seritage's annual interest expense by approximately $1.05 million.