Seritage Growth Properties 8-K

What Happened
Seritage Growth Properties (the Company) announced on July 24, 2026 that certain affiliates entered into a $15.0 million term loan and a $25.0 million revolving loan with b1Bank. At closing the Company drew $15.0 million on the revolver (leaving $10.0 million available) and used the Term Loan and initial revolver draw plus cash on hand to repay the $50.0 million outstanding balance under its existing loan (originally part of a $1.60 billion facility) and to pay transaction costs. On July 28, 2026 the Board also declared a cash dividend of $0.4375 per share on the Company’s 7.00% Series A cumulative redeemable preferred shares (payable Oct 15, 2026; record date Sep 30, 2026).

Key Details

• New facilities: $15.0M Term Loan (Real Estate Loan Agreement) and $25.0M Revolving Loan (Business Loan Agreement); total committed capacity $40.0M.
• Initial draw: $15.0M on the Revolving Loan; $10.0M remains available.
• Interest and maturity: Term Loan at One‑Month SOFR + 2.75% (reduces to +2.25% if balance ≤ $10.0M); Revolver funded amounts at 2.00% + money market rate (money market rate currently 3.50% for 12 months). Both facilities mature July 24, 2028 and include a one‑year extension option.
• Security and guarantees: Term Loan secured by mortgages on three wholly‑owned properties; Revolver collateralized by $25.0M of restricted cash; both facilities guaranteed by the Company and certain subsidiaries.
• Covenants and defaults: Minimum liquidity tests ($5.0M quarter‑end; Term Loan also requires $10.0M as of Dec 31, 2027), a 1.15:1.00 debt service coverage ratio on collateralized properties (Term Loan), limits on asset sales, additional debt and distributions; default interest = an extra 4.0% over the applicable rate if default occurs.
• Existing loan: $50.0M outstanding was repaid and the prior loan agreement terminated per its terms; that loan bore 7.0% interest and was set to mature July 31, 2026.
• Preferred dividend: $0.4375 per share on 7.00% Series A preferred, payable Oct 15, 2026 to holders of record Sep 30, 2026.

Why It Matters
The transaction refinances a near‑term maturing $50.0M obligation with new facilities that extend the maturity to July 24, 2028, provides $10.0M of undrawn revolver capacity and formalizes collateral and covenant terms investors should monitor (liquidity tests, debt service coverage, and property mortgages). The refinancing and associated covenants could affect Seritage’s liquidity flexibility and property-level cash flow. The declared preferred dividend confirms the Board’s intent to continue scheduled distributions on the Series A preferred shares.