Seritage Growth Properties (SRG) risk factors, FY2025 10-K

Other

1. 01Our Declaration of Trust and Maryland law contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in controlNew

Risks Related to Ownership of our Securities

1. 02The market price and trading volume of our securities may be volatile88% rewritten
2. 03A lack of active trading market for the Series A Preferred Shares may negatively affect the market value of, and the ability of holders of our Series A Preferred Shares to transfer or sell, their Series A Preferred Shares
3. 44The market price and trading volume of our securities may be volatile88% rewritten
4. 45We have issued 2,800,000 Series A Cumulative Redeemable Preferred Shares, which are senior to our common shares for purposes of distributions or upon liquidation. The Series A Preferred Shares may limit our ability to make distributions to holders of our common shares
5. 46The number of shares available for future sale could adversely affect the market price of Class A common shares
6. 47An active trading market may not develop for the Series A Preferred Shares or, even if it does develop, may not continue, which may negatively affect the market value of, and the ability of holders of our Series A Preferred Shares to transfer or sell, their shares
7. 48The Series A Preferred Shares are subordinate in right of payment to our existing and future debt, and the interests of the holders of Series A Preferred Shares could be diluted by the issuance of additional preferred shares, including additional Series A Preferred Shares, and by other transactions
8. 49Dividends on our preferred shares, including the Series A Preferred Shares, are discretionary. We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future period
9. 50Holders of Series A Preferred Shares will have limited voting rights

Risks Related to Our Business and Operations

1. 04There can be no assurance that we will be able to complete any strategic transaction or strategic change on terms satisfactory to the Board of Trustees
2. 05We have experienced challenging market conditions and there can be no assurances that these challenges will abate, which may adversely impact the net Plan of Sale proceeds from our assets
3. 06We cannot assure our shareholders of the amount they will receive in shareholder distributions under the Plan of Sale or when they will receive them
4. 07If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our shareholder distributions under the Plan of Sale may be delayed or reduced
5. 08Our expected sales prices may be impacted by tenant issues at our properties
6. 09We have ongoing capital needs and may not be able to obtain additional financing or other sources of funding on acceptable terms21% rewritten
7. 10Real estate related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced
8. 11Changes in building and/or zoning laws may require us to update a property or prevent us from fully restoring a property in the event of a substantial casualty loss and/or require us to meet additional or more stringent construction requirements
9. 12Our real estate assets and equity method investments may be subject to impairment charges62% rewritten
10. 13Properties in our portfolio may be subject to ground leases; if we are found to be in breach of these ground leases or are unable to renew them, we could be materially and adversely affected
11. 14Certain properties within our portfolio are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements, some of which contain a purchase option or right of first refusal or right of first offer in favor of a third party
12. 15Economic conditions, high interest rates and macroeconomic uncertainty could materially adversely affect our business and/or the net proceeds available from the sale of our assets22% rewritten
13. 16macroeconomic uncertainty, in the U.S. and/or globally, including trade wars or tariffs and the possibility of a recession
14. 17Rising expenses could reduce cash flow
15. 18We may face increased risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions, which may adversely affect the status of our construction projects
16. 19Compliance with the Americans with Disabilities Act may require us to make expenditures that adversely affect our cash flows
17. 20Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations or otherwise cause us to incur significant costs
18. 21Environmental costs and liabilities associated with contamination at real estate properties owned by us may materially and adversely affect us
19. 22Our business faces potential risks associated with natural disasters, severe weather conditions and climate change and related legislation and regulations, which could have an adverse effect on our cash flow and operating results
20. 23Possible acts of war, terrorist activity or other acts of violence could adversely affect our financial condition and results of operations
21. 24Cybersecurity incidents could cause a disruption to our operations, a compromise of confidential information and damage to our business relationships, all of which could negatively impact our business, financial condition and operating results
22. 25We may incur mortgage indebtedness and other borrowings, which may increase our business risks
23. 26Covenants in our Term Loan Facility may limit our operational flexibility and a covenant breach or default could adversely affect our business and financial condition
24. 27Our rights and the rights of our shareholders to take action against our trustees and officers are limited
25. 28a final judgment based upon a finding of active and deliberate dishonesty by the trustee or officer that was material to the cause of action adjudicated
26. 29Our Declaration of Trust and bylaws and Maryland law contain provisions that may delay, defer or prevent an acquisition of Class A common shares or a change in control
27. 30Additionally, Title 3, Subtitle 8 of the MGCL permits the Board of Trustees, without shareholder approval and notwithstanding any contrary provisions in our Declaration of Trust or bylaws, to implement certain takeover defenses
28. 31We may experience uninsured or underinsured losses, or insurance proceeds may not otherwise be available to us which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur unanticipated expense
29. 32Mr. Lampert may exert substantial influence over us, and his interests may differ from or conflict with the interests of our other shareholders
30. 33Our investments in or redevelopment of properties may be unsuccessful or fail to meet our expectations
31. 34our properties may be subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities
32. 35Current and future redevelopment may not yield expected returns
33. 36vacancies or ability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options
34. 37If members of our management team terminate their employment with us or we are unable to retain talented employees our financial results and/or the Plan of Sale may be adversely affected21% rewritten
35. 38The future outbreak of highly infectious or contagious diseases may materially and adversely impact the business of our tenants and materially or adversely impact and disrupt our business, income, cash flow, results of operations, financial condition, liquidity, prospects and ability to service our debt obligations
36. 39We have been, and in the future may be, subject to securities class action, derivative, and other litigation, which may harm our business and results of operations22% rewritten
37. 40Due to the uncertainty of our ability to continue as a going concern within one year after the date that our financial statements as ofNew

Risks Related to Our Tax Status

1. 41and our desire to preserve our net operating losses and net capital loss carryforwards may cause us to forgo otherwise attractive opportunitiesNew
2. 42If we do not qualify to be taxed as a REIT for any taxable year through 2021, we will be subject to U.S. federal income tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders
3. 43We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the price of our Class A common shares