SRG - Seritage: Don't Fear The Deal Slowdown

Summary

• Seritage Growth Properties reduced its term loan balance to $800 million in early February, extending its remaining debt maturities to July 2025.
• Removing liquidity risk hasn't boosted Seritage stock, though, due to investors' concerns about the impact of weak macro conditions on the pace and valuation of future property sales.
• Seritage's remaining multitenant properties are much higher-quality assets (on average) than what has sold recently, supporting better cap rates.
• While Seritage will hold many of its most valuable properties longer than previously planned, distributions to shareholders are still likely to begin in late 2023 or early 2024.
• Seritage stock offers 50%-plus upside over the next two years based on the midpoint of my valuation estimate, with minimal downside risk.

For further details see: