Seritage Growth Properties Provides Business Update with Respect to Recent Events Regarding Sears Holdings - Seite 2

• Signed Not Opened Leases: the Company has sufficient liquidity to complete all underway projects and, as such, the Company is positioned to fulfill all of its commitments to tenants under signed but not opened (“SNO”) leases. As of September 30, 2018, the Company had 156 SNO leases representing $75.0 million of annual base rent, including the Company’s proportional share of its unconsolidated joint ventures, the majority of which is expected to steadily come on line throughout the next 24 months.
• Lease Up at Underway Projects: completing all underway projects includes the lease-up of remaining unleased space at these projects. The Company projects an additional $80 million of rental income, including the Company’s proportional share of its unconsolidated joint ventures, can be generated as these projects are stabilized without allocating additional capital beyond the $880 million referenced above¹.

Seritage Liquidity

• Cash on Hand: as of September 30, 2018, the Company had approximately $580 million of cash on hand. This capital is available to fund on-going development activities, as well as adverse impacts to operating cash flow that may result from potential reductions of rental income under the Master Lease with Sears Holdings.
• Incremental Funding Facility: the Company’s $2.0 billion term loan facility (the “Term Loan Facility”) includes a committed $400 million incremental funding facility. This capital would also be available, subject to certain conditions, to fund announced and future redevelopment activities.
• Asset Monetization: the Company will continue to opportunistically pursue select asset monetization and new joint ventures that support the Company’s value creation activities.
• Common Stock Dividends: the Company expects to maintain its current common stock dividend policy of making distributions that approximate taxable income so as to retain as much free cash flow as possible for reinvestment back into the portfolio. To the extent estimated taxable income falls meaningfully below current distribution levels (approximately $55 million annually), as a result of reduced income under the Master Lease or reduced capital gains from asset monetization activities, the Board of Trustees may consider adjustments to common stock dividend amounts. Any reduction of the common dividend would be made to allow the Company to reinvest the capital retained into future redevelopment projects at accretive returns.
• Preferred Stock Dividends: the Company expects to continue paying dividends ($4.9 million annually) on its preferred shares.

Master Leases with Sears Holdings