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Actionable news in SRG: SERITAGE GROWTH PROPERTIES CLASS A COMMON SHARES OF BENEFICIAL INTEREST PAR VALUE $0.01,

Seritage Growth Properties Announces Joint Venture Transactions With GGP Inc.

NEW YORK--(BUSINESS WIRE)--Seritage Growth Properties (NYSE:SRG) (the “Company”) today announced that it has completed two transactions with GGP Inc. (“GGP”) whereby the Company received gross consideration of $247.6 million. Pursuant to the transactions, the Company has (i) sold to GGP the Company’s 50% interest in eight of the 12 assets in the existing joint venture between the two companies for $190.1 million; and (ii) sold to GGP a 50% joint venture interest in five additional assets for $57.5 million.

“In addition, these transactions demonstrate our ability to tap into the value generated through redevelopment activity in order to redeploy capital into our next wave of accretive projects.”

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As a result of these transactions, the Company reduced amounts outstanding under its mortgage loan by $50.6 million and received approximately $171.6 million of additional cash proceeds before closing costs, which it intends to use to fund its expanding redevelopment pipeline and for general corporate purposes.

“Over the last two years, our partnership with GGP has commenced a series of value enhancing redevelopments at high-quality Sears locations attached to dominant GGP retail centers. The transactions announced today allow Seritage to crystalize this value on eight of the existing 12 assets we held in partnership with GGP, and expand our partnership with GGP on five additional assets primed for redevelopment,” said Benjamin Schall, President and Chief Executive Officer. “In addition, these transactions demonstrate our ability to tap into the value generated through redevelopment activity in order to redeploy capital into our next wave of accretive projects.”

Benefits of the Transactions

  • Value Realization: as a result of leasing and development progress to date, the Company realized approximately $50.0 million of value creation above its basis across the 13 properties. The Company will continue to participate in the value creation opportunity at the remaining four assets in the original joint...

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