NEW YORK--(BUSINESS WIRE)--Seritage Growth Properties (NYSE: SRG), a national owner of 183 retail and mixed-use properties totaling approximately 28.5 million square feet, today provided an update on the Company’s leasing, development and transaction activity as of December 31, 2020, and provided an update on the Company’s CEO transition.

Q4 2020 Business Update

• Collected 91% of rental revenue and agreed to defer an additional 5%;
• Generated $144.9 million of gross proceeds through monetization activity; and,
• As of December 31, 2020, the Company had cash on hand of $161.2 million, including $6.5 million of restricted cash and after taking into account one transaction which closed on December 31, 2020 but funded on January 4, 2021.

Leasing Activity

During the twelve months ended December 31, 2020, the Company signed leases totaling approximately 445,000 square feet, including the Company’s proportional share of unconsolidated entities, at an average rent of $18.13 PSF. The Company also brought leases on-line totaling approximately 875,000 square feet, including the Company’s proportional share of unconsolidated entities, at an average rent of $17.01 PSF, generating approximately $15 million of annual base rent.

In addition, Transform Holdco LLC (“Holdco”), an affiliate of ESL Investments, Inc., terminated the five remaining leases related to wholly owned properties effective in March 2021, and as a result, the Company has no remaining exposure to Sears or Kmart.

During the three months ended December 31, 2020, the majority of the $6.8 million of SNO leases that were sold or terminated was comprised of leases terminated with fitness, entertainment and food & beverage tenants at projects at which the Company had not yet deployed significant amounts of capital.

Transaction Activity

Monetization activity for the twelve months ended December 31, 2020 consisted of 32 properties and 15 out-parcels totaling 4.8 million square feet and generating $417 million of gross proceeds. The transactions consisted of:

• $235 million of gross proceeds were for income-producing properties sold at a blended cap rate of 6.2%.
• An additional $134 million of gross proceeds were from vacant assets sold at $54 PSF.
• The remaining $48 million of gross proceeds were from joint venture and sale leaseback transactions.

Subsequent to December 31, 2020, the Company sold one asset for $3.5 million of gross proceeds, and as of January 25, 2020, the Company had additional asset sales under contract for anticipated gross proceeds of $61.5 million, subject to buyer diligence and closing conditions.

Development Activity

Mixed-Use and Premier Projects: The Company, together with Foulger-Pratt and The Howard Hughes Corporation (NYSE: HHC), announced that it had entered into an initial agreement with the City of Alexandria and Inova Health System to advance the development of a four million-square-foot mixed-use community to include a new hospital campus at the site of the former Landmark Mall.

Retail Projects: The Company continued work on components of certain suburban retail redevelopment projects. The Company had previously resumed $46 million of suburban retail development activity which was expected to generate total potential annual rental revenue of $13 million. As of December 31, 2020, $31 million has now been incurred and $6 million of annual rental income has commenced. The remaining potential annual rental income is expected to commence in the next twelve months, subject to tenant opening schedules.

In addition, during the fourth quarter, the Company resumed $39 million of additional suburban retail development activity with total potential income of $6 million.

CEO Transition Update

As the Company previously disclosed on December 10, 2020, Benjamin W. Schall, the Chief Executive Officer, President and Trustee of Seritage Growth Properties, notified the Company of his resignation from the Company and the Board of Trustees to pursue another opportunity. Mr. Schall’s departure date was January 22, 2021.

The Board of Trustees remains focused on its search for a Chief Executive Officer candidate to succeed Mr. Schall. The Board of Trustees has engaged a national search firm to assist in the search process and is actively evaluating several internal and external candidates. The Board of Trustees expects to announce the Company’s new Chief Executive Officer in the coming weeks. There is and there can be no assurance about the timing and certainty of any such appointment and announcement by the Company. In the interim, the day-to-day operations of the Company continue to be overseen by members of existing senior management, who are reporting directly to the Board of Trustees.

About Seritage Growth Properties

Seritage Growth Properties is a publicly-traded, self-administered and self-managed REIT with 158 wholly-owned properties and 25 unconsolidated properties totaling approximately 28.5 million square feet of space across 41 states and Puerto Rico. The Company was formed to unlock the underlying real estate value of a high-quality retail portfolio it acquired from Sears Holdings in July 2015. The Company’s mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experiences for consumers and local communities, and create long-term value for our shareholders.