SRG

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “would,” “may,” “will,” “continue to,” “pro forma” or the opposite of these words and phrases or other similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of this Quarterly Report. Overview Prior to our adoption of the Plan of Sale, we were principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of June 30, 2026, our portfolio consisted of interests in nine properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 139 acres of land. The portfolio encompasses four consolidated properties consisting of approximately 0.3 million square feet of GLA and 56 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 83 acres. Review of Strategic Alternatives On March 1, 2022, the Company announced that its Board of Trustees commenced a process to review a broad range of strategic alternatives to enhance shareholder value. The Board of Trustees created a special committee of the Board of Trustees (the “Special Committee”) to oversee the process. The Special Committee retained Barclays as its financial advisor from March 2022 to August 2023 to assist with the strategic review. The Company sought a shareholder vote to approve a proposed plan of sale of our assets and dissolution (the “Plan of Sale”) that would allow our Board of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company. The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, at which time the Plan of Sale was approved by the shareholders, following our filing of a final proxy statement with the SEC on September 14, 2022. See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about the Plan of Sale. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing on the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale. Impairment of Real Estate Assets and Investments in Unconsolidated Entities We did not recognize any impairment losses for the three months ended June 30, 2026. For the six months ended June 30, 2026, we recognized a total of $15.2 million of impairment losses due to a marketed process that resulted in receiving offers below carrying value, which are included in impairment of real estate assets within the condensed consolidated statements of operations. In addition, we recognized $5.2 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the six months ended June 30, 2026, which is included in equity in income (loss) of unconsolidated entities within the condensed consolidated statements of operations. We continue to evaluate our portfolio, including our development plans, hold periods and, if applicable, offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities. - 27 - REIT Qualification On March 31, 2022, the Company announced that its Board of Trustees, with the recommendation of the Special Committee, approved a plan to terminate the Company's REIT status and become a taxable C Corporation effective January 1, 2022. As a result, the Company is no longer required to operate under REIT rules, including the requirement to distribute at least 90% of REIT taxable income to its shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT for the 2021 tax year and prior tax years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, 2021. Refer to Note 7 – Income Taxes of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Market Update The Company continues to face challenging market conditions such as elevated interest rates and the availability of debt and equity capital, and it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues, and uncertainty caused by wars. While interest rates have started to decline, they remain high relative to interest rates in 2022. Additionally, raising equity capital for land development deals remains challenging. These conditions could apply downward pricing pressures on our remaining assets. In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset. If these challenging market conditions persist, then we expect that they will continue to adversely impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders. Business Strategies The Company’s primary objective is to create value for its shareholders through the monetization of the Company's assets through the Plan of Sale, which can be suspended by the Board of Trustees. We look to enhance sale value through leasing our built footprint, densification of our sites, achievement of entitlements and modification of agreements that govern our properties. We continue to position all remaining assets for sale. Results of Operations We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties. This revenue generally includes fixed base rents and recoveries of expenses that we have incurred and that we pass through to the individual tenants, in each case as provided in the respective leases. Our primary cash expenses consist of our property operating expenses, general and administrative expenses, interest expense, and construction and development related costs. Property operating expenses include: real estate taxes, repairs and maintenance, management fees, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense includes interest on our Term Loan Facility. In addition, we incur substantial non-cash charges for depreciation of our properties and amortization of intangible assets and liabilities. - 28 - Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025 The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 (in thousands): Three Months Ended June 30, 2026 2025 $ Change Revenue Rental income $ 1,760 $ 4,526 $ (2,766 ) Expenses Property operating (761 ) (3,237 ) 2,476 Real estate taxes (384 ) (692 ) 308 Depreciation and amortization (390 ) (2,040 ) 1,650 General and administrative (5,096 ) (6,172 ) 1,076 Gain on sale of real estate 35 1,967 (1,932 ) Loss on sale of interests in unconsolidated entities — (1,417 ) 1,417 Impairment of real estate assets — (18,000 ) 18,000 Equity in loss of unconsolidated entities 508 756 (248 ) Interest and other income (expense), net 1,022 930 92 Interest expense (2,936 ) (5,139 ) 2,203 Rental Income Rental income decreased by $2.8 million for the three months ended June 30, 2026, primarily due to property sales. Property Operating Expenses Property operating expenses decreased by $2.5 million primarily due to sales. The largest decreases were in common area maintenance, utilities, and insurance. Real Estate Taxes Real estate taxes decreased by approximately $0.3 million for the three months ended June 30, 2026 due to property sales. Depreciation and Amortization Expenses The decrease of $1.7 million in depreciation and amortization expenses for the three months ended June 30, 2026 was primarily due to property sales. General and Administrative Expenses General and administrative expenses consist of personnel costs, including share-based compensation and third-party consulting fees, professional fees, office expenses and overhead expenses. The decrease of $1.1 million for the three months ended June 30, 2026 was primarily driven by a decrease of $0.5 million in personnel costs, $0.4 million in office and ground rent, and $0.2 million in legal fees. Gain on Sale of Real Estate During the three months ended June 30, 2026, the company sold one property for $11.0 million and recorded a gain totaling $35.2 thousand, which is included in the gain on sale of real estate within the condensed consolidated statements of operations. During the three months ended June 30, 2025, the Company sold one property for $23.0 million and recorded a gain totaling $2.0 million which is included in gain on sale of real estate within the condensed consolidated statements of operations. Loss on Sale of Interests in Unconsolidated Entities There were no sales of interest in Unconsolidated entities during the three months ended June 30, 2026. - 29 - During the three months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale. Impairment of Real Estate Assets The Company did not recognize any impairment charges during the three months ended June 30, 2026. During the three months ended June 30, 2025, the Company recognized an $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value. Equity in Loss of Unconsolidated Entities During the three months ended June 30, 2026, equity in loss of Unconsolidated Entities decreased by ($0.2) million due an increase in income of $0.4 million from the Company’s investment in the UTC JV offset by an increase of losses of $0.2 million related to the Company’s other investments. Interest and Other Income (Expense), Net For the three months ended June 30, 2026, interest and other income (expense), net increased by $92.0 thousand primarily due to large legal refunds partially offset by a decrease in interest income as a result of maintaining lower cash balances. Interest Expense The decrease of $2.2 million in interest expense for the three months ended June 30, 2026 was driven by the partial Term Loan Facility paydowns subsequent to June 30, 2025, partially offset by an increase in amortization expense of deferred financing costs. Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025 The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands): Six Months Ended June 30, 2026 2025 $ Change Revenue Rental income $ 3,669 $ 8,983 $ (5,314 ) Expenses Property operating (2,222 ) (6,145 ) 3,923 Real estate taxes (717 ) (1,645 ) 928 Depreciation and amortization (790 ) (4,115 ) 3,325 General and administrative (10,388 ) (21,865 ) 11,477 Gain on sale of real estate 35 8,903 (8,868 ) Loss on sale of interests in unconsolidated entities — (1,417 ) 1,417 Impairment of real estate assets (15,183 ) (18,000 ) 2,817 Equity in income (loss) of unconsolidated entities (6,659 ) (7,172 ) 513 Interest and other income (expense), net 1,393 1,790 (397 ) Interest expense (5,839 ) (10,369 ) 4,530 Rental Income Rental income decreased by $5.3 million primarily due to property sales. Property Operating Expenses Property operating expenses decreased by $3.9 million primarily due to sales. The largest decreases were in common area maintenance, utilities, and insurance. Real Estate Taxes Real estate taxes decreased by $0.9 million primarily due to sales. Additionally, during the six months ended June 30, 2026, there were no real estate tax reduction fees and therefore no real estate tax refunds. - 30 - Depreciation and Amortization Expenses The decrease of $3.3 million in depreciation and amortization during the six months ended June 30, 2026 was primarily due to property sales. General and Administrative Expenses General and administrative expenses consist of personnel costs, including share-based compensation and third-party consulting fees, professional fees, office expenses and overhead expenses. The decrease of $11.5 million was partially driven by the recognition of severance expense of $6.5 million for the six months ended June 30, 2025. Other decreasing costs include $3.1 million in personnel costs, $0.8 million office and ground rent, and $0.4 million in legal fees. Gain on Sale of Real Estate During the six months ended June 30, 2026, the company sold one property for $11.0 million and recorded a gain totaling $35.2 thousand, which is included in the gain on sale of real estate within the condensed consolidated statements of operations. During the six months ended June 30, 2025, the Company sold two properties for $52.6 million and recorded a gain totaling $8.9 million which is included in gain on sale of real estate within the condensed consolidated statements of operations. Loss on Sale of Interests in Unconsolidated Entities There were no sales of interests in Unconsolidated entities for the six months ended June 30, 2026. During the six months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale. Impairment of Real Estate Assets During the six months ended June 30, 2026 the Company recognized a $15.2 million impairment of real estate assets due to a marketed process that resulted in receiving offers below carrying value. During the six months ended June 30, 2025, the Company recognized an $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value. Equity in Income (Loss) of Unconsolidated Entities During the six months ended June 30, 2026, $5.2 million of other-than-temporary impairment losses and a $2.7 million loss on sale of a portion of an Unconsolidated Property were recorded, compared to an $8.5 million other-than-temporary impairment loss recorded during the six months ended June 30, 2025. These factors resulted in a decrease in loss of $0.5 million. Interest and Other Income (Expense), Net For the six months ended June 30, 2026, interest and other income decreased by $0.4 million primarily due to holding lower cash balances. Interest Expense The decrease of $4.5 million in interest expense for the six months ended June 30, 2026 was driven by the $150.0 million of Term Loan Facility paydowns made since June 30, 2025. Liquidity and Capital Resources Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures. Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations during the six months ended June 30, 2026 and the Company recorded net operating cash outflows of $7.3 million. Additionally, the Company generated net investing cash inflows of $12.0 million during the six months ended June 30, 2026, which were driven by distributions from unconsolidated entities and sales of real estate partially offset by development expenditures and investments in unconsolidated entities. - 31 - Obligations are projected to continue to exceed property rental income and we expect to fund such Obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and financing transactions, subject to any approvals that may be required under the loan agreements. Below is our sales activity since we began our capital recycling program: •Sales of Consolidated Properties. We began our capital recycling program in July 2017 and have been monetizing assets since. In March of 2022, we elected to terminate our REIT status effective January 1, 2022 in order to remove any restrictions around asset sales. On October 24, 2022, we received shareholder approval of the Plan of Sale. oWe sold 90 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $986.8 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021; oWe sold 40 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $438.1 million of gross proceeds from December 31, 2021, the date we terminated our REIT status, through the approval of the Plan of Sale on October 24, 2022; oFrom the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold 95 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.3 billion of gross proceeds. •Sales of interests in Unconsolidated Properties. Certain of our unconsolidated entity agreements also include rights that allow us to sell our interests in select Unconsolidated Properties to our partners at fair market value; oWe sold our interests in 15 Unconsolidated Properties and generated approximately $278.1 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021; oWe sold our interests in 8 Unconsolidated Properties and generated approximately $84.8 million of gross proceeds since we terminated our REIT status on December 31, 2021, through the approval of the Plan of Sale on October 24, 2022; oFrom the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold our interests in 12 Unconsolidated Properties and generated approximately $165.3 million of gross proceeds. •Unconsolidated Properties. We had contributed interests in 12 properties to unconsolidated entities, which generated approximately $242.4 million of gross proceeds from July 2017 through June 30, 2026. In addition to generating liquidity upon closing, these entities also reduce our development expenditures by the amount of our partners’ interests in the unconsolidated entities. Subsequent to June 30, 2026, we sold one Consolidated Property for gross proceeds of $3.0 million and received a distribution of $8.9 million from an Unconsolidated Property as a result of the sale of a portion of the underlying property. The Company has entered into an option purchase and sale agreement (the “PSA”) to sell one vacant non-income producing premier asset in Dallas, Texas for anticipated gross proceeds of $50.8 million before applicable credits and costs. The sale is subject to customary closing conditions and is also cross-conditioned and cross-defaulted with an option purchase and sale agreement between the buyer and unaffiliated owners of a neighboring parcel. The buyer made an initial option payment of $169,200, then (i) commencing on July 1, 2026, and each month thereafter that the PSA remains in effect through December 1, 2026, the Company shall receive an option payment equal to $126,900 and (ii) commencing on January 1, 2027, and each month thereafter that the PSA remains in effect through January 1, 2028, the Company shall receive an option payment equal to $274,950. All option payments are incremental to the purchase price and are non-refundable except as otherwise provided for in the PSA. There can be no assurances that the buyer will exercise the option to purchase the property. Term Loan Facility / Incremental Funding Facility As previously disclosed, on May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permitted the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) was equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership was obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment should not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest should accrue interest at 2.0% in excess of the then applicable interest rate and should be due and - 32 - payable on July 31, 2023; provided, that the Operating Partnership was required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest was a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement (the “Incremental Funding Facility”). Additionally, the Term Loan Amendment provided that the administrative agent and the lenders expressed their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement. The Third Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) executed on June 16, 2022 provided exceptions to this right. On July 28, 2025, the Company exercised its extension option pursuant to the Fourth Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid the incremental facility fee of $4.0 million. All other terms under the Term Loan Agreement should remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement. During the six months ended June 30, 2026, we did not make any payments against the principal of the Term Loan Facility. Our outstanding balance as of June 30, 2026, is $50.0 million. Real Estate Loan / Revolver On July 24, 2026, certain affiliates of the Company the Company entered into (i) a Loan and Security Agreement (the “Real Estate Loan”) providing for a $15.0 million term loan and (ii) a Business Loan Agreement (the “Revolver”), as amended by an omnibus agreement, providing for a $25.0 million revolving loan. At closing of the Revolver, the Company drew $15.0 million, and has $10.0 million available and unfunded. The Company used the proceeds from the closing of the Real Estate Loan and the initial draw under the Revolver, together with cash on hand, to fully repay the $50.0 million outstanding balance on the existing Term Loan Facility and to pay transaction and related costs. The Real Estate Loan is collateralized by the Company’s interest in three Consolidated Properties and bears interest at an annual rate of one-month SOFR plus 2.75% which interest rate shall be reduced to one-month SOFR plus 2.25% if the outstanding balance is reduced to $10.0 million or less. The Revolver is collateralized by $25.0 million of cash held in a restricted account with the lender. Drawn amounts under the Revolver bear interest at an annual rate equal to a spread of 2.0% above the money market rate on the cash collateral which is currently 3.5% for 12 months from closing and thereafter resets annually. Both the Real Estate Loan and the Revolver mature on July 24, 2028 and have a one-year extension option. See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of liquidity and going concern. Cash Flows for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 The following table summarizes the Company’s cash flow activities for the six months ended June 30, 2026 and 2025, respectively (in thousands): Six Months Ended June 30, 2026 2025 $ Change Net cash used in operating activities $ (7,291 ) $ (21,234 ) $ 13,943 Net cash provided by investing activities 12,004 46,087 (34,083 ) Net cash used in financing activities (4,137 ) (42,432 ) 38,295 Cash Flows from Operating Activities Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses. Rental revenues are not sufficient to cover these expenses. Significant components of net cash used in operating activities included: •In 2026, a decrease in operating cash, partially offset by an increase to tenant and other receivables and in prepaid expenses, deferred expenses, and other assets. - 33 - •In 2025, a decrease in operating cash, partially offset by an increase to tenant and other receivables and an increase to accounts payable, accrued expenses and other liabilities. Cash Flows from Investing Activities Significant components of net cash provided by investing activities include: •In 2026, $6.4 million distributions from unconsolidated joint ventures, $9.0 million of net proceeds from the sale of real estate, offset by $2.5 million of investment in consolidated joint ventures and $0.9 of development of real estate; and •In 2025, $51.6 million of net proceeds from the sale of real estate, $8.1 million of net proceeds from the sale of interests in unconsolidated entities and $4.9 of distributions from unconsolidated entities offset by development of real estate of $18.0 million. Cash Flows from Financing Activities Significant components of net cash used in financing activities include: •In 2026, $2.5 million cash payments of preferred dividends and a distribution to non-controlling interest of $1.7 million; and •In 2025, $40.0 million cash repayment of Term Loan Facility principal and cash payments of preferred dividends of $2.5 million. Dividends and Distributions The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during the six months ended June 30, 2026 and 2025, respectively. The last dividend on the Company’s Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019. The Company’s Board of Trustees also declared the following dividends on the Company’s Series A Preferred Shares during 2026 and 2025: Series A Declaration Date Record Date Payment Date Preferred Share 2026 July 28 September 30 October 15 $ 0.43750 April 20 June 30 July 15 0.43750 February 25 March 31 April 15 0.43750 2025 October 29 December 31 January 15, 2026 $ 0.43750 July 23 September 30 October 15 0.43750 May 8 June 30 July 15 0.43750 February 26 March 31 April 15 0.43750 Off-Balance Sheet Arrangements The Company accounts for its investments in entities that it does not have a controlling interest in but exercises significant influence under the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated entities. As of June 30, 2026 and December 31, 2025, we did not have any off balance sheet financing arrangements. Contractual Obligations There have been no significant changes in the contractual obligations disclosed in our Form 10-K for the year ended December 31, 2025. Capital Expenditures During the three and six months ended June 30, 2026, the Company invested $0.8 million and $0.9 million, respectively, in our consolidated properties. The Company also invested $0.1 million and $2.5 million in our unconsolidated joint ventures during three and six months ended June 30, 2026, respectively. During the three and six months ended June 30, 2025, the Company invested $4.6 million and $17.9 million, respectively, in our consolidated properties. The Company also invested $0.4 million in our unconsolidated joint ventures during the three and six months ended June 30, 2025. - 34 - Litigation and Other Matters In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, we disclose the nature of the material contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made. On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws. The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152. On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190. On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152. The derivative actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the derivative actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action and appointed lead counsel. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits. We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, the final outcome of such ordinary course legal proceedings and claims will not have a material effect on the condensed consolidated financial position, results of operations or liquidity of the Company. See Note 9 – Commitments and Contingencies Litigation and Other Matters of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of the Litigation and related matters. Critical Accounting Policies A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2025 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the six months ended June 30, 2026, there were no material changes to these policies. - 35 -