Seritage Growth Properties (SRG) 10-Q 6 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	SRG
Entity Registrant Name	SERITAGE GROWTH PROPERTIES
Entity Central Index Key	1,628,063
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Class A Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		25,865,492
Class B Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,589,020
Class C Common Shares [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,725,535

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment in real estate
Land	$ 840,563	$ 840,563
Buildings and improvements	817,025	814,652
Accumulated depreciation	(45,368)	(29,076)
Real Estate Investment Property, at Cost, Total	1,612,220	1,626,139
Construction in progress	18,797	13,136
Net investment in real estate	1,631,017	1,639,275
Investments in unconsolidated joint ventures	425,287	427,052
Cash and cash equivalents	56,425	62,867
Restricted cash	89,183	92,475
Tenant and other receivables, net	14,557	9,772
Lease intangible assets, net	555,359	578,795
Prepaid expenses, deferred expenses and other assets, net	20,350	23,123
Total assets	2,792,178	2,833,359
Liabilities
Mortgage loans payable, net	1,143,756	1,142,422
Accounts payable, accrued expenses and other liabilities	106,744	120,860
Total liabilities	$ 1,250,500	$ 1,263,282
Commitments and contingencies (Note 10)
Shareholders' Equity
Additional paid-in capital	$ 924,775	$ 924,508
Accumulated deficit	(54,388)	(38,145)
Total shareholders' equity	870,719	886,695
Non-controlling interests	670,959	683,382
Total equity	1,541,678	1,570,077
Total liabilities and equity	2,792,178	2,833,359
Class A Common Shares [Member]
Shareholders' Equity
Common shares	259	248
Total equity	259	248
Class B Common Shares [Member]
Shareholders' Equity
Common shares	16	16
Total equity	16	16
Class C Common Shares [Member]
Shareholders' Equity
Common shares	57	68
Total equity	$ 57	$ 68

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Class A Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	100,000,000	100,000,000
Common shares, outstanding	25,868,442	24,817,842
Common shares, issued	25,868,442	24,817,842
Class B Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	5,000,000	5,000,000
Common shares, outstanding	1,589,020	1,589,020
Common shares, issued	1,589,020	1,589,020
Class C Common Shares [Member]
Common shares, par value	$ 0.01	$ 0.01
Common shares, authorized	50,000,000	50,000,000
Common shares, outstanding	5,722,585	6,773,185
Common shares, issued	5,722,585	6,773,185

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
REVENUE
Rental income	$ 45,226
Tenant reimbursements	17,778
Total revenue	63,004
EXPENSES
Property operating	7,118
Real estate taxes	11,469
Depreciation and amortization	39,509
General and administrative	4,439
Acquisition-related expenses	73
Total expenses	62,608
Operating income	396
Equity in income of unconsolidated joint ventures	2,086
Interest and other income	60
Interest expense	(15,730)
Unrealized loss on interest rate cap	(1,371)
Loss before income taxes	(14,559)
Provision for income taxes	(155)
Net loss	(14,714)
Net loss attributable to non-controlling interests	6,379
Net loss attributable to common shareholders	$ (8,335)
Net loss per share attributable to Class A and Class C common shareholders - Basic and diluted | $ / shares	$ (0.27)
Weighted average Class A and Class C common shares outstanding - Basic and diluted | shares	31,391

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]	Class A Common Shares [Member]	Class B Common Shares [Member]	Class C Common Shares [Member]
Beginning balance at Dec. 31, 2015	$ 1,570,077	$ 924,508	$ (38,145)	$ 683,382	$ 248	$ 16	$ 68
Beginning balance, shares at Dec. 31, 2015					24,817,842	1,589,020	6,773,185
Net loss	(14,714)		(8,335)	(6,379)
Dividends and distributions declared	(13,952)		(7,908)	(6,044)
Stock-based compensation	267	267
Stock issued in conversion of securities					$ 11
Stock sold in conversion of securities							$ (11)
Stock issued in conversion securities, shares					1,050,600
Stock sold in conversion of securities, shares							(1,051,000)
Ending balance at Mar. 31, 2016	$ 1,541,678	$ 924,775	$ (54,388)	$ 670,959	$ 259	$ 16	$ 57
Ending balance, shares at Mar. 31, 2016					25,868,442	1,589,020	5,722,585

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares	Mar. 08, 2016	Dec. 17, 2015	Mar. 31, 2016
Dividends and distributions declared, per share			$ 0.25
Class A Common Shares [Member]
Dividends and distributions declared, per share	$ 0.25	$ 0.50
Share class exchanges, common shares			1,050,600

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (14,714)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in income of unconsolidated joint ventures	(2,086)
Distributions from unconsolidated joint ventures	3,851
Unrealized loss on interest rate cap	1,371
Stock-based compensation	267
Depreciation and amortization	39,509
Amortization of deferred financing costs	1,340
Amortization of above and below market leases, net	(192)
Straight-line rent adjustment	(4,404)
Change in operating assets and liabilities
Tenants and other receivables	(381)
Prepaid expenses, deferred expenses and other assets	1,540
Restricted cash	(209)
Accounts payable, accrued expenses and other liabilities	(970)
Net cash provided by operating activities	24,922
CASH FLOW FROM INVESTING ACTIVITIES
Development of real estate	(7,033)
Decrease in restricted cash	3,501
Net cash used in investing activities	(3,532)
CASH FLOW FROM FINANCING ACTIVITIES
Payment of financing costs	(6)
Common dividends paid	(15,738)
Non-controlling interests distributions paid	(12,088)
Net cash used by financing activities	(27,832)
Net decrease in cash and cash equivalents	(6,442)
Cash and cash equivalents, beginning of period	62,867
Cash and cash equivalents, end of period	56,425
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	14,805
Capitalized interest	560
Income taxes paid	155
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Development of real estate financed with accounts payable	3,857
Dividends and distribution declared and unpaid	$ 13,952

Organization

Organization	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Note 1 – Organization Seritage Growth Properties was organized in Maryland on June 3, 2015 and initially capitalized with 100 shares of Class A common shares. The Company conducts its operations through Seritage Growth Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership that was formed on April 22, 2015. Unless the context otherwise requires, “Seritage” and the “Company” refer to Seritage Growth Properties, the Operating Partnership, and its subsidiaries. On June 11, 2015, Sears Holdings Corporation (“Sears Holdings”) effected a rights offering (the “Rights Offering”) to Sears Holdings stockholders to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of 234 of Sears Holdings’ owned properties and one of its ground leased properties (the “Wholly Owned Properties”), and its 50% interests in three joint ventures (such joint ventures, the “JVs,” and such 50% joint venture interests the “JV Interests”) that collectively own 28 properties, ground lease one property and lease two properties (collectively, the “JV Properties”) (collectively, the “Transaction”). The Rights Offering ended on July 2, 2015 and the Company’s Class A common shares were listed on the New York Stock Exchange (“NYSE”) on July 6, 2015. On July 7, 2015, the Company completed the Transaction with Sears Holdings (see Note 3) and commenced operations. The Company did not have any operations prior to the completion of the Rights Offering and Transaction. Seritage is a fully-integrated, self-administered, self-managed real estate investment trust (“REIT”) primarily engaged in the real property business through the Company’s investment in the Operating Partnership. Subsidiaries of the Operating Partnership lease a substantial majority of the space at all but 12 of the Wholly Owned Properties back to Sears Holdings under a master lease agreement (the “Master Lease”), with the remainder of such space leased to third-party tenants. A substantial majority of the space at the JV Properties is also leased (or subleased) by the JVs to Sears Holdings under master lease agreements (collectively, the “JV Master Leases”). The Master Lease and the JV Master Leases provide the Company and the JVs with the right to recapture certain space from Sears Holdings at each property for retenanting or redevelopment purposes.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, (the “Annual Report”) for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015. Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report. Capitalized terms used, but not defined in this quarterly report, have the same meanings as in our Annual Report. The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the variable interest entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity. All intercompany accounts and transactions have been eliminated. If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting. Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting. The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. To the extent such variable interests are in entities that cannot be evaluated under the variable interest entity model, the Company evaluates its interests using the voting interest entity model. The Company holds a 56.6% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership. Through consideration of new consolidation guidance effective for the Company as of January 1, 2016, it has been concluded that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Accordingly, the Company consolidates its interest in the Operating Partnership. However, as the Company holds what is deemed a majority voting interest in the Operating Partnership, it qualifies for the exemption from providing certain of the disclosure requirements associated with investments in VIEs. The portions of consolidated entities not owned by the Company and the Operating Partnership are presented as non-controlling interests as of and during the period presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant assumptions and estimates relate to fair values of acquired assets and liabilities assumed for purposes of applying the acquisition method of accounting, the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivables. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from these estimates. Segment Reporting The Company currently operates in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management, and leasing of retail properties. The Company reviews operating and financial information for each property on an individual basis, and therefore, each property represents an individual operating segment. The Company does not distinguish or group consolidated operations based on geography, size, or type. The Company aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process. Accounting for Real Estate Acquisitions Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments. In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located. The fair values of tangible assets are determined on an “if vacant” basis. The “if vacant” fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use. The “if vacant” value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties. Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value. The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and includes an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheets and amortized over the remaining lease term for each tenant. Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheets; below-market tenant leases and above-market ground leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. The values assigned to above-market and below-market tenant leases are amortized as reductions and increases, respectively, to base rental revenue over the remaining term of the respective leases. The values assigned to below-market and above-market ground leases are amortized as increases and reductions, respectively, to property operating expenses over the remaining term of the respective leases. The Company expenses transaction costs associated with business combinations in the period incurred. These costs are included in acquisition-related expenses within the consolidated statement of operations. Real Estate Investments Real estate assets are recorded at cost, less accumulated depreciation and amortization. Expenditures for ordinary repairs and maintenance will be expensed as incurred. Significant renovations which improve the property or extend the useful life of the assets are capitalized. As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized. The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete. Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows: Building: 25 – 40 years Site improvements: 5 – 15 years Tenant improvements: shorter of the estimated useful life or non-cancelable term of lease The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease. On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value. Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. No such impairment losses were recognized for the three months ended March 31, 2016. Investments in Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement. On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value. No such impairment losses were recognized for the three months ended March 31, 2016. Cash and Cash Equivalents The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government. Restricted Cash Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits. As of March 31, 2016, the Company had approximately $89.2 million of restricted cash, including $47.8 million related to future capital investments such as unfunded construction commitments, deferred maintenance and environmental reserves, and $41.4 million related to basic property carrying costs such as real estate taxes, insurance and ground rent. Tenant and Other Receivables Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent. The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located. In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific rent receivable will be made. For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions. Revenue Recognition Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheets. In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on a straight-line basis. The Company commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. Tenant reimbursement income arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is accrued in the same periods as the expenses are incurred. Accounting for Recapture and Termination Activity Pursuant to the Master Lease Seritage 100% Recapture Rights. The Company generally treats the delivery of a 100% recapture notice as a modification of the Master Lease as of the date of notice. Such a notice and lease modification result in the following accounting adjustments for the recaptured property: • Accrued rental revenues related to the straight-line method of reporting rental revenue that is deemed uncollectable as result of the lease modification is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. • Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project. As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved. Seritage 50% Recapture Rights. The Company generally treats the delivery of a 50% recapture notice as a modification of the Master Lease as of the date of notice. Such a notice and lease modification result in the following accounting adjustments for the recaptured property: • The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is subject to the lease modification is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the Master Lease. • The portion of intangible lease assets and liabilities that are deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability. Sears Holdings Termination Rights. The Master Lease provides Sears Holdings with certain rights to terminate the Master Lease with respect to properties that cease to be profitable for operation by Sears Holdings. Such a termination would generally result in the following accounting adjustments for the terminated property: • Accrued rental revenues related to the straight-line method of reporting rental revenue that is subject to the termination is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. • Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. Additionally, termination fees required to be paid by Sears Holdings to the Company are recognized as income over the remaining shortened life of the lease from the date of notice to the date of termination. Derivatives The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes. In connection with the issuance of the Company’s mortgage loans, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1.26 billion and a strike rate of 3.5%. The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets. The Company has elected not to utilize hedge accounting and, therefore, the change in fair value is included within change in fair value of interest rate cap on the consolidated statement of operations. For the three months ended March 31, 2016, the Company recorded a loss of $1.4 million related to the change in fair value of the interest rate cap. Stock-Based Compensation The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses on the consolidated statement of operations. Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period. Concentration of Credit Risk Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of March 31, 2016, substantially all of the Company’s real estate properties were leased to Sears Holdings, and the majority of Company’s rental revenues were derived from the Master Lease (see Note 6). Sears Holdings is a publicly traded company that is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K and Form 10-Q with the SEC. Refer to www.sec.gov for Sears Holdings Corporation publicly-available financial information. Other than the Company’s tenant concentration, management believes the Company’s portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk. As of March 31, 2016, the Company’s portfolio of 235 Wholly Owned Properties was diversified by location across 49 states and Puerto Rico. Earnings per Share The Company has three classes of common stock. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights. All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share. Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which amends accounting for income taxes related to share-based compensation, the related classification in the statement of cash flows and share award forfeiture accounting. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting,” which eliminates the requirement to retroactively adjust an investment that subsequently qualifies for equity method accounting (as a result of an increase in level of ownership interest or degree of influence) as if the equity method of accounting had been applied during all prior periods that the investment was held. The new standard requires that the investor add the cost of acquiring additional ownership interest in the investee to its current basis and prospectively adopt the equity method of accounting. Any unrealized gains or losses in an available-for-sale investment that subsequently qualifies as an equity method investment should be recognized in earnings at the date the investment qualifies as an equity method investment. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods and requires prospective adoption. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases, the lessee would recognize a straight-line total lease expense. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. The Company adopted ASU 2015-02 on January 1, 2016. The adoption of this standard did not have a material impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016. The standard can be applied either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment recognized as of the date of initial application. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements.

Acquisitions

Acquisitions	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Acquisitions	Note 3 – Acquisitions On July 7, 2015, the Company purchased the Wholly Owned Properties and JV Interests at their fair value for $2.7 billion, with the substantial majority of such properties being leased back to Sears Holdings. The following table summarizes the final purchase price and fair values of the net assets acquired in the Transaction (in thousands): Proceeds from issuance of common stock and non-controlling interest $ 1,644,042 Less: Offering related costs (8,212 ) Proceeds from issuance of mortgage loans payable 1,161,196 Less: Deferred financing costs (21,446 ) Total sources of funds net of offering and financing costs 2,775,580 Real estate assets acquired Land 840,563 Buildings and improvements 810,499 Lease intangibles In-place leases 595,443 Below-market ground lease 11,766 Above-market leases 9,058 Below-market leases (20,045 ) Investments in unconsolidated joint ventures 429,012 Total fair value of real estate assets acquired 2,676,296 Plus: Restricted cash Environmental expenses reserve 12,034 Deferred maintenance reserve 10,575 Total restricted cash 22,609 Less: Assumed liabilities Real estate taxes payable (23,277 ) Environmental expenses (12,034 ) Deferred maintenance (10,575 ) Total assumed liabilities (45,886 ) Net cash paid for acquisition of real estate and unconsolidated joint ventures 2,653,019 Additional (sources) / uses of cash Prepaid rent (26,855 ) Initial funding of unfunded construction commitments reserve (restricted cash) 42,470 Initial funding of property carry costs reserve (restricted cash) 32,482 Initial funding of interest expense reserve (restricted cash) 4,924 Acquisition-related expenses 18,340 Prepaid interest expense 1,249 Total additional (sources) uses of cash, net 72,610 Remaining excess cash from Transaction $ 49,951 The Company utilized an independent third party to assist management with its determination of the final allocation of value.

Lease Intangible Assets and Lia

Lease Intangible Assets and Liabilities	3 Months Ended
	Mar. 31, 2016
Real Estate [Abstract]
Lease Intangible Assets and Liabilities	Note 4 – Lease Intangible Assets and Liabilities As of March 31, 2016, lease intangible assets (acquired in-place leases, above-market leases, and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $555.4 million and $18.5 million, respectively. The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): Lease Intangible Assets Gross Accumulated Balance In-place leases, net $ 595,443 $ (59,894 ) $ 535,549 Below-market ground leases, net 11,766 (152 ) 11,614 Above-market leases, net 9,058 (862 ) 8,196 Total $ 616,267 $ (60,908 ) $ 555,359 Lease Intangible Liabilities Gross Accumulated Balance Below-market leases, net $ 20,045 $ (1,593 ) $ 18,452 Total $ 20,045 $ (1,593 ) $ 18,452 Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.2 million for the three months ended March 31, 2016. Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands): Remainder of 2016 $ (734 ) 2017 (978 ) 2018 (978 ) 2019 (951 ) 2020 (822 ) 2021 (817 ) Amortization of acquired below-market ground leases resulted in additional property expense of less than $0.1 million for the three months ended March 31, 2016. Future amortization of below-market ground leases is estimated to increase property expenses as set forth below (in thousands): Remainder of 2016 $ 152 2017 203 2018 203 2019 203 2020 203 2021 203 Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $23.1 million for the three months ended March 31, 2016. Future estimated amortization of acquired in-place leases is set forth below (in thousands): Remainder of 2016 $ 55,419 2017 72,496 2018 71,927 2019 69,122 2020 66,394 2021 58,662

Investments in Unconsolidated J

Investments in Unconsolidated Joint Ventures	3 Months Ended
	Mar. 31, 2016
Equity Method Investments and Joint Ventures [Abstract]
Investments in Unconsolidated Joint Ventures	Note 5 – Investments in Unconsolidated Joint Ventures The Company conducts a portion of its property rental activities through investments in unconsolidated joint ventures for which the Company holds less than a controlling interest. The Company’s partners in these unconsolidated joint ventures are unrelated real estate entities or commercial enterprises. The Company and its unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures. The obligations to make capital contributions are governed by each unconsolidated joint venture’s respective operating agreement and related governing documents. The Company currently has investments in three unconsolidated entities: GS Portfolio Holdings LLC (the “GGP JV”), a joint venture between Seritage and a subsidiary of General Growth Properties, Inc. (together with its subsidiaries, “GGP”), SPS Portfolio Holdings LLC (the “Simon JV”), a joint venture between Seritage and a subsidiary of Simon Property Group, Inc. (together with its subsidiaries, “Simon”), and MS Portfolio LLC (the “Macerich JV”), a joint venture between Seritage and a subsidiary of The Macerich Company (together with its subsidiaries, “Macerich”). A substantial majority of the space at the JV Properties is leased to Sears Holdings under the JV Master Leases which include recapture rights and termination rights with similar terms as those described under the Master Lease. During the three months ended March 31, 2016, the GGP JV submitted recapture notices related to Pembroke Lakes Mall in Pembroke Pines, FL and Valley Plaza Mall in Bakersfield, CA. During the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015, the GGP JV submitted recapture notices related to Staten Island Mall in Staten Island, NY and Coronado Mall in Albuquerque, NM. The Company’s investments in unconsolidated joint ventures at March 31, 2016, consisted of (in thousands): Joint Venture # of Total Initial Seritage % GGP JV 12 2,162 $ 165,000 50 % Macerich JV 9 1,714 150,000 50 % Simon JV 10 1,574 114,012 50 % Total 31 5,450 $ 429,012 Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP. The Company shares in the profits and losses of these unconsolidated joint ventures generally in accordance with the Company’s respective equity interests. In some instances, the Company may recognize profits and losses related to investment in an unconsolidated joint venture that differ from the Company’s equity interest in the unconsolidated joint venture. This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated joint venture recognizes with respect to its assets; differences between the Company’s basis in assets it has transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets; the Company’s deferral of the unconsolidated joint venture’s profits from land sales to the Company; or other items. There were no joint venture impairment charges during the three months ended March 31, 2016. The following table presents combined condensed financial data for all of the Company’s unconsolidated joint ventures as of March 31, 2016 (in thousands): March 31, 2016 December 31, 2015 ASSETS Investment in real estate Land $ 214,190 $ 214,726 Buildings and improvements 603,312 603,265 Accumulated depreciation (32,587 ) (24,111 ) 784,915 793,880 Construction in progress 2,289 1,481 Net investment in real estate 787,204 795,361 Cash and cash equivalents 18,528 19,903 Tenant and other receivables, net 3,149 4,990 Other assets, net 26,845 30,506 Total assets $ 835,726 $ 850,760 LIABILITIES AND EQUITY Liabilities Accounts payable, accrued expenses and other liabilities $ 10,948 $ 13,973 Total liabilities 10,948 13,973 Equity Partnership equity 820,606 823,923 Retained earnings 4,172 12,864 Total equity 824,778 836,787 Total liabilities and equity $ 835,726 $ 850,760 Three Months Ended EQUITY IN INCOME OF UNCONSOLIDATED JOINT VENTURES Total revenue $ 17,538 Property operating expenses (3,404 ) Depreciation and amortization (9,739 ) Operating income 4,395 Other expenses (223 ) Net income $ 4,172 Equity in income of unconsolidated joint ventures $ 2,086

Leases

Leases	3 Months Ended
	Mar. 31, 2016
Leases [Abstract]
Leases	Note 6 – Leases Master Lease On July 7, 2015, subsidiaries of Seritage and subsidiaries of Sears Holdings entered into the Master Lease. The Master Lease generally is a triple net lease with respect to all space which is leased thereunder to Sears Holdings, subject to proportional sharing by Sears Holdings for repair and maintenance charges, real property taxes, insurance and other costs and expenses which are common to both the space leased by Sears Holdings and other space occupied by unrelated third-party tenants in the same or other buildings pursuant to third-party leases, space which is recaptured pursuant to the Company recapture rights described below and all other space which is constructed on the properties. Under the Master Lease, Sears Holdings and/or one or more of its subsidiaries will be required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as they are in occupancy. The Master Lease has an initial term of 10 years and contains three options for five-year renewals of the term and a final option for a four-year renewal. As of March 31, 2016, the annual base rent paid directly by Sears Holdings and its subsidiaries under the Master Lease was approximately $133.3 million. In each of the initial and first two renewal terms, annual base rent will be increased by 2.0% per annum for each lease year over the rent for the immediately preceding lease year. For subsequent renewal terms, rent will be set at the commencement of the renewal term at a fair market rent based on a customary third-party appraisal process, taking into account all the terms of the Master Lease and other relevant factors, but in no event will the renewal rent be less than the rent payable in the immediately preceding lease year. The Master Lease provides the Company with the right to recapture up to approximately 50% of the space occupied by Sears Holdings at the 224 Wholly Owned Properties initially included in the Master Lease (subject to certain exceptions). While the Company will be permitted to exercise its recapture rights all at once or in stages as to any particular property, it will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year. In addition, Seritage has the right to recapture any automotive care centers which are free-standing or attached as “appendages” to the properties, all outparcels or outlots and certain portions of the parking areas and common areas. Upon exercise of these recapture rights, the Company will generally incur certain costs and expenses for the separation of the recaptured space from the remaining Sears Holdings space and can reconfigure and rent the recaptured space to third-party tenants. During the three months ended March 31, 2016, the Company exercised its recapture right with respect to one property, an auto center in San Antonio, TX. Subsequent to March 31, 2016, the Company submitted recapture notices for portions of the space occupied by Sears Holdings at five properties, including full-line stores in Wayne, NJ and Fairfax, VA and auto centers in Albany, NY, Bowie, MD and Hagerstown, MD. The Company also has the right to recapture 100% of the space occupied by Sears Holdings at each of 21 identified Wholly Owned Properties by making a specified lease termination payment to Sears Holdings, after which the Company can reposition and re-lease those stores. The lease termination payment is calculated as the greater of an amount specified at the time the Company entered into the Master Lease with Sears Holding and an amount equal to 10 times the adjusted EBITDA attributable to such space within the Sears Holdings main store which is not attributable to the space subject to the separate 50% recapture right discussed above for the 12-month period ending at the end of the fiscal quarter ending immediately prior to recapturing such space. During the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015, the Company exercised its 100% recapture rights with respect to three properties, including full-line stores in Braintree, MA and Honolulu, HI, and a full-line store and automotive care center in Memphis, TN. During the three months ended March 31, 2016, Sears Holdings vacated the store at Braintree, MA and it is no longer subject to the Master Lease. The Master Lease also provides for certain rights to Sears Holdings to terminate the Master Lease with respect to Wholly Owned Properties that cease to be profitable for operation by Sears Holdings. In order to terminate the Master Lease with respect to a certain property, Sears Holdings must make a payment to the Company of an amount equal to one year of rent (together with taxes and other expenses) with respect to such property. Such termination right, however, will be limited so that it will not have the effect of reducing the fixed rent under the Master Lease by more than 20% per annum. Further, Sears Holdings must provide notice of not less than 90 days of their intent to exercise such termination right and such notice cannot be given prior to August 1, 2016. Revenues from the Master Lease for the three months ended March 31, 2016 are as follows (in thousands and excluding the effect of straight-line rent): Three Months Ended Rental income $ 33,385 Tenant reimbursements 16,752 Total revenue $ 50,137

Mortgage Loans Payable

Mortgage Loans Payable	3 Months Ended
	Mar. 31, 2016
Mortgage Loans on Real Estate [Abstract]
Mortgage Loans Payable	Note 7 – Mortgage Loans Payable On July 7, 2015, pursuant to the Transaction, the Company entered into a mortgage and mezzanine loan agreement (collectively, the “Loan Agreements”), providing for term loans in an initial principal amount of approximately $1.16 billion (collectively, the “Mortgage Loans”) and a $100 million future funding facility (the “Future Funding Facility”), which the Company expects to be available to finance the redevelopment of properties in its portfolio from time to time, subject to satisfaction of certain conditions. No amounts have been drawn under the Future Funding Facility as of March 31, 2016. All outstanding principal and interest under the Mortgage Loans is due and payable on the payment dates and will mature on the payment date in July 2019, pursuant to the Loan Agreements. The Company has two one-year extension options subject to the payment of an extension fee and satisfaction of certain other conditions. Borrowings under the Mortgage Loans bear interest at the London Interbank Offered Rates (“LIBOR”) plus, as of March 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis. The weighted-average interest rate for the Mortgage Loans for the three months ended March 31, 2016 was 5.16%. The Mortgage Loans are secured by all of the Company’s Wholly Owned Properties and a pledge of its equity in the JVs. The Loan Agreements contain customary covenants for a real estate financing, including terms that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based on certain measures of the Company’s financial and operating performance, including in the case that “Debt Yield” (the ratio of net operating income for the borrowers to their debt) is less than 11.0% or if the Company fails to achieve certain thresholds for tenant diversification. If the performance of Sears Holdings at the stores subject to the Master Lease fails to meet specified thresholds and if the Company fails to satisfy additional tenant diversification tests and declines to provide a specified amount of cash collateral, then the cash flow sweep provisions of the Loan Agreements may also be triggered. The Loan Agreements prohibit repayment of any amounts outstanding for the first 12 months (other than repayments in connection with property releases and certain other exceptions) and contains a yield maintenance provision for the early extinguishment of the debt within the first 30 months. The Company believes it is currently in compliance with all material terms and conditions of the Loan Agreements. All obligations under the Loan Agreements are non-recourse to the borrowers and the pledgors of the JV Interests and the guarantors thereunder, except that (i) the borrowers and the guarantors will be liable, on a joint and several basis, for losses incurred by the lenders in respect of certain matters customary for commercial real estate loans, including misappropriation of funds and certain environmental liabilities and (ii) the indebtedness under the Loan Agreements will be fully recourse to the borrowers and guarantors upon the occurrence of certain events customary for commercial real estate loans, including without limitation prohibited transfers, prohibited voluntary liens, and bankruptcy. Additionally the guarantors delivered a limited completion guaranty with respect to future redevelopments undertaken by the borrowers at the properties. The Company incurred $21.4 million of debt issuance costs related to the Mortgage Loans, which are recorded as a direct deduction from the carrying amount of the Mortgage Loans and amortized over the term of the Loan Agreements. As of March 31, 2016, the unamortized balance of the Company’s debt issuance costs was $17.4 million.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note 8 – Income Taxes The Company will elect to be taxed as a REIT as defined under Section 856(c) of the Code for federal income tax purposes, upon filing its initial tax return for the taxable year ended December 31, 2015 and expects to continue to qualify as a REIT. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to currently distribute at least 90% of its adjusted REIT taxable income to its shareholders. As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to its shareholders. If the Company fails to qualify as a REIT or does not distribute 100% of its taxable income in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state, local and Puerto Rico taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. The Company has evaluated whether any uncertain tax provisions exist as of March 31, 2016 and has concluded that there are no uncertain tax positions.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 9 – Fair Value Measurements ASC 820, Fair Value Measurement Level 1—quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities Level 2—observable prices based on inputs not quoted in active markets, but corroborated by market data Level 3—unobservable inputs used when little or no market data is available The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in its assessment of fair value. Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis All derivative instruments are carried at fair value and are valued using Level 2 input. The Company’s derivative instruments as of March 31, 2016 included an interest rate cap. The Company utilizes an independent third party and interest rate market pricing models to assist management in determining the fair value of this instrument. The fair value of the Company’s interest rate cap at March 31, 2016 was approximately $0.7 million and is included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets. The Company has elected not to utilize hedge accounting, and therefore, the change in fair value is included within change in fair value of interest rate cap on the consolidated statement of operations. For the three months ended March 31, 2016, the Company recorded a loss of $1.4 million related to the change in fair value of the interest rate cap. Financial Assets and Liabilities not Measured at Fair Value Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash equivalents and mortgages payable. The fair value of cash equivalents is classified as Level 1 and the fair value of mortgages payable is classified as Level 2. Cash equivalents are carried at cost, which approximates fair value. The fair value of mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings. As of March 31, 2016, the estimated fair value of the Company’s debt was $1.2 billion which approximated the carrying value at such date as the current risk-adjusted rate approximates the stated rates on the Company’s mortgages.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 10 – Commitments and Contingencies Insurance The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties. The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2020. Insurance premiums are charged directly to each of the retail properties. The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material. The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future. Environmental Matters Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines, and injuries to persons and property. The Company does not believe that any resulting liability from such matters will have a material effect on the consolidated financial position, results of operations, or liquidity of the Company. Under the Master Lease, Sears Holdings has indemnified the Company from certain environmental liabilities at the Wholly Owned Properties existing before, or caused by Sears Holdings during, the period in which each Wholly Owned Property is leased to Sears Holdings, including removal and remediation of all affected facilities and equipment constituting the automotive care center facilities (and each JV Master Lease includes a similar requirement of Sears Holdings). As of March 31, 2016, the Company had approximately $12.0 million of restricted cash in a lender reserve account to fund potential environmental costs that were identified during due diligence related to the Transaction. Litigation and Other Matters In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses 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. The Company does 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, the Company discloses the nature of the contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made. The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company. In May and June of 2015, four purported Sears Holdings shareholders filed lawsuits in the Delaware Court of Chancery challenging the Transaction, which lawsuits have since been consolidated into a single action captioned In re Sears Holdings Corporation Stockholder and Derivative Litigation, Consol. C.A. No. 11081-VCL (the “Action”). On October 15, 2015, plaintiffs filed a verified consolidated stockholder derivative complaint (the “Complaint”) in the Action against defendants the individual members of Sears Holdings’ Board of Directors, ESL Investments, Inc. (together with its affiliates, “ESL”), Sears Holdings’ CEO, Fairholme Capital Management L.L.C. (“FCM”), and Seritage. The plaintiffs have brought the Action derivatively on behalf of Sears Holdings, which is named as a nominal defendant, and allege that the Sears Holdings directors, as well as ESL (in its capacity as the alleged controlling stockholder of Sears Holdings), breached their fiduciary duties to Sears Holdings shareholders by selling the Wholly Owned Properties to Seritage at a price that was unfairly low and was the result of a process that allegedly was flawed. The Complaint also alleges that Seritage and FCM aided and abetted these alleged fiduciary breaches. Among other forms of relief, the plaintiffs are currently seeking damages in unspecified amounts. The Company believes that the plaintiffs’ claims and allegations against the Company are legally without merit and intends to contest these lawsuits vigorously. Due to, among other things, the fact that the litigation is at a very early stage, management cannot reasonably estimate the possible loss or range of loss, if any, that may arise from this matter.

Related Party Disclosure

Related Party Disclosure	3 Months Ended
	Mar. 31, 2016
Related Party Transactions [Abstract]
Related Party Disclosure	Note 11 – Related Party Disclosure Edward S. Lampert Edward S. Lampert is Chairman and Chief Executive Officer of Sears Holdings and is the Chairman and Chief Executive Officer of ESL. As of March 21, 2016, ESL beneficially owned approximately 54.6% of Sears Holdings’ outstanding common stock, including shares issuable upon the exercise of warrants held by ESL. Mr. Lampert is also the Chairman of Seritage. For purposes of funding the purchase price for the acquisition of the Wholly Owned Properties and the JV Interests from Sears Holdings, the Company effected the Rights Offering to existing Sears Holdings shareholders, including ESL. As of March 31, 2016, ESL held an approximately 43.4% interest in Operating Partnership and approximately 3.8% and 100% of the outstanding Class A common shares and Class B non-economic common shares, respectively. Transition Services Agreement On July 7, 2015, the Operating Partnership and Sears Holdings Management Corporation (“SHMC”), a wholly owned subsidiary of Sears Holdings, entered into a transition services agreement (the “Transition Services Agreement,” or “TSA”). Pursuant to the TSA, SHMC will provide certain limited services to the Operating Partnership during the period from the closing of the Transaction through the 18-month anniversary of the closing, unless the Operating Partnership terminates the agreement. During the three months ended March 31, 2016, the services provided by SHMC were limited to specific accounting and tax services in support of the Company’s 2015 year end activities. Fees incurred for these services were approximately $0.1 million and are included in general and administrative expenses on the consolidated statement of operations. SHMC does not provide the Company with any business managerial, leasing, development or construction services or direct any of the Company’s business, financial, or strategic policies or decisions.

Non-Controlling Interests

Non-Controlling Interests	3 Months Ended
	Mar. 31, 2016
Noncontrolling Interest [Abstract]
Non-Controlling Interests	Note 12 – Non-Controlling Interests Partnership Agreement On July 7, 2015, Seritage and ESL entered into the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”). Pursuant to the Partnership Agreement, as the sole general partner of the Operating Partnership, Seritage exercises exclusive and complete responsibility and discretion in its day-to-day management, authority to make decisions, and control of the Operating Partnership, and may not be removed as general partner by the limited partners. As of March 31, 2016, the Company held a 56.6% interest in the Operating Partnership and ESL held a 43.4% interest. The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the period presented.

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Shareholders' Equity	Note 13 – Shareholders’ Equity Dividends and Distributions On May 3, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ending June 30, 2016. The holders of Operating Partnership units are entitled to an equal distribution per Operating Partnership unit held on June 30, 2016. These amounts will be paid on July 14, 2016. On March 8, 2016, the Company declared a cash dividend of $0.25 per Class A and Class C common share for the three months ended March 31, 2016. The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held as of March 31, 2016. The dividends and distributions payable are recorded as liabilities in the Company’s consolidated balance sheet at March 31, 2016. The dividend has been reflected as a reduction of shareholders’ equity, and the distribution has been reflected as a reduction of the limited partners’ non-controlling interest. These amounts were paid on April 14, 2016 On December 17, 2015, the Company declared a cash dividend of $0.50 per Class A and Class C common share for the period from July 7, 2015 (Date Operations Commenced) through December 31, 2015. The holders of Operating Partnership units were entitled to an equal distribution per Operating Partnership unit held as of December 31, 2015. The dividends and distributions payable are recorded as liabilities in the Company’s consolidated balance sheet at December 31, 2015. The dividend has been reflected as a reduction of shareholders’ equity, and the distribution has been reflected as a reduction of the limited partners’ non-controlling interest. These amounts were paid on January 14, 2016.

Earnings per Share

Earnings per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Earnings per Share	Note 14 – Earnings per Share The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares. Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership. All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS. Earnings per share has not been presented for Class B shareholders as they do not have economic rights. (in thousands except per share amounts) Three Months Ended Numerator—Basic and Diluted Net loss $ (14,714 ) Net loss attributable to non-controlling interests 6,379 Net loss attributable to common shareholders $ (8,335 ) Denominator—Basic and Diluted Weighted average Class A common shares outstanding 24,947 Weighted average Class C common shares outstanding 6,444 Weighted average Class A and Class C common shares outstanding 31,391 Net loss per share attributable to Class A and Class C common shareholders $ (0.27 ) No adjustments were made to the numerator for the three months ended March 31, 2016 because the Company generated a net loss. During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses. No adjustments were made to the denominator for the three months ended March 31, 2016 because (i) the inclusion of outstanding non-vested restricted shares would have had an anti-dilutive effect and (ii) including the non-controlling interest in the Operating Partnership would also require that the share of the Operating Partnership loss attributable to such interests be added back to net loss, therefore, resulting in no effect on earnings per share. As of March 31, 2016, there were 244,808 non-vested restricted shares and share units outstanding.

Stock Based Compensation

Stock Based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based Compensation	Note 15 – Stock Based Compensation On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the “Awards”). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards. Restricted Shares Pursuant to the Plan, the Company made grants of restricted share units during the three months ended March 31, 2016. The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted share units vest in equal annual amounts over the next three years (time-based vesting) and a portion of the restricted share units vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting). In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that do not vest are forfeited. Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest. Dividends on restricted shares and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares. The following table summarizes restricted share activity for the grant the three months ended March 31, 2016: Shares Weighted- Unvested restricted shares and share units at beginning of period 221,484 $ 37.18 Restricted shares and share units granted 23,324 46.48 Restricted shares and share units vested — — Restricted shares and share units forfeited — — Unvested restricted shares and share units at end of period 244,808 $ 38.07 The Company recognized $0.3 million in compensation expense related to the restricted shares for the three months ended March 31, 2016, which is included in general and administrative on the Company’s consolidated statement of operations. As of March 31, 2016, there were approximately $9.1 million of total unrecognized compensation costs related to the outstanding restricted shares which are expected to be recognized over a weighted-average period of approximately 2.8 years.

Accounts Payable, Accrued Expen

Accounts Payable, Accrued Expenses and Other Liabilities	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
Accounts Payable, Accrued Expenses and Other Liabilities	Note 16 – Accounts Payable, Accrued Expenses and Other Liabilities The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities as of March 31, 2016 (in thousands): March 31, 2016 December 31, 2015 Accrued real estate taxes $ 21,293 $ 25,333 Below-market leases 18,452 18,986 Prepaid rent 14,094 1,331 Accounts payable and accrued expenses 14,041 13,793 Dividends payable 13,953 27,894 Environmental reserve 11,824 11,824 Deferred maintenance 10,281 10,281 Accrued interest 2,806 2,748 Sears Holdings payable — 8,670 Total accounts payable, accrued expenses and other liabilities $ 106,744 $ 120,860

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, (the “Annual Report”) for the period from July 7, 2015 (Date Operations Commenced) to December 31, 2015. Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report. Capitalized terms used, but not defined in this quarterly report, have the same meanings as in our Annual Report. The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly-owned subsidiaries, and all other entities in which they have a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) in which the Company has, as a result of ownership, contractual interests or other financial interests, both the power to direct activities that most significantly impact the economic performance of the variable interest entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity. All intercompany accounts and transactions have been eliminated. If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting. Similarly, for those entities which are not VIEs and over which the Company has the ability to exercise significant influence, but does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting. The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. To the extent such variable interests are in entities that cannot be evaluated under the variable interest entity model, the Company evaluates its interests using the voting interest entity model. The Company holds a 56.6% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership. Through consideration of new consolidation guidance effective for the Company as of January 1, 2016, it has been concluded that the Operating Partnership is a VIE as the limited partners in the Operating Partnership, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Accordingly, the Company consolidates its interest in the Operating Partnership. However, as the Company holds what is deemed a majority voting interest in the Operating Partnership, it qualifies for the exemption from providing certain of the disclosure requirements associated with investments in VIEs. The portions of consolidated entities not owned by the Company and the Operating Partnership are presented as non-controlling interests as of and during the period presented.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant assumptions and estimates relate to fair values of acquired assets and liabilities assumed for purposes of applying the acquisition method of accounting, the useful lives of tangible and intangible assets, real estate impairment assessments, and assessing the recoverability of accounts receivables. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from these estimates.
Segment Reporting	Segment Reporting The Company currently operates in a single reportable segment, which includes the acquisition, ownership, development, redevelopment, management, and leasing of retail properties. The Company reviews operating and financial information for each property on an individual basis, and therefore, each property represents an individual operating segment. The Company does not distinguish or group consolidated operations based on geography, size, or type. The Company aggregates all properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants, and operational process.
Accounting for Real Estate Acquisitions	Accounting for Real Estate Acquisitions Upon the acquisition of real estate, the Company assesses the fair value of acquired assets and liabilities assumed, including land, buildings, improvements and identified intangibles such as above-market and below-market leases, in-place leases and other items, as applicable, and allocates the purchase price based on these assessments. In making estimates of fair values, the Company may use a number of sources, including data provided by third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located. The fair values of tangible assets are determined on an “if vacant” basis. The “if vacant” fair value allocated to land is generally estimated via a market or sales comparison approach with the subject site being compared to similar properties that have sold or are currently listed for sale. The comparable properties are adjusted for dissimilar characteristics such as market conditions, location, access/frontage, size, shape/topography, or intended use, including the impact of any encumbrances on such use. The “if vacant” value allocated to buildings and site improvements is generally estimated using an income approach and a cost approach that utilizes published guidelines for current replacement cost or actual construction costs for similar, recently developed properties. Assumptions used in the income approach include capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value. The estimated fair value of in-place tenant leases includes lease origination costs (the costs the Company would have incurred to lease the property to the current occupancy level) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, the Company evaluates the time period over which such occupancy level would be achieved and includes an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in lease intangible assets on the consolidated balance sheets and amortized over the remaining lease term for each tenant. Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where the Company is either the lessor or the lessee. The difference between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. Above-market tenant leases and below-market ground leases are included in lease intangible assets on the consolidated balance sheets; below-market tenant leases and above-market ground leases are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. The values assigned to above-market and below-market tenant leases are amortized as reductions and increases, respectively, to base rental revenue over the remaining term of the respective leases. The values assigned to below-market and above-market ground leases are amortized as increases and reductions, respectively, to property operating expenses over the remaining term of the respective leases. The Company expenses transaction costs associated with business combinations in the period incurred. These costs are included in acquisition-related expenses within the consolidated statement of operations.
Real Estate Investments	Real Estate Investments Real estate assets are recorded at cost, less accumulated depreciation and amortization. Expenditures for ordinary repairs and maintenance will be expensed as incurred. Significant renovations which improve the property or extend the useful life of the assets are capitalized. As real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved and other miscellaneous costs incurred during the period of redevelopment, are capitalized. The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete. Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows: Building: 25 – 40 years Site improvements: 5 – 15 years Tenant improvements: shorter of the estimated useful life or non-cancelable term of lease The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease. On a periodic basis, management assesses whether there are indicators that the value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset’s carrying value. Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. No such impairment losses were recognized for the three months ended March 31, 2016.
Investments in Unconsolidated Joint Ventures	Investments in Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings which are recognized in accordance with the terms of the applicable agreement. On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value. No such impairment losses were recognized for the three months ended March 31, 2016.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.
Restricted Cash	Restricted Cash Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits. As of March 31, 2016, the Company had approximately $89.2 million of restricted cash, including $47.8 million related to future capital investments such as unfunded construction commitments, deferred maintenance and environmental reserves, and $41.4 million related to basic property carrying costs such as real estate taxes, insurance and ground rent.
Tenant and Other Receivables	Tenant and Other Receivables Accounts receivable includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent. The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located. In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific rent receivable will be made. For accrued rental revenues related to the straight-line method of reporting rental revenue, the Company performs a periodic review of receivable balances to assess the risk of uncollectible amounts and establish appropriate provisions.
Revenue Recognition	Revenue Recognition Rental income is recognized on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of tenant and other receivables on the consolidated balance sheets. In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as reduction of rental revenue on a straight-line basis. The Company commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. Tenant reimbursement income arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is accrued in the same periods as the expenses are incurred.
Accounting for Recapture and Termination Activity Pursuant to the Master Lease	Accounting for Recapture and Termination Activity Pursuant to the Master Lease Seritage 100% Recapture Rights. The Company generally treats the delivery of a 100% recapture notice as a modification of the Master Lease as of the date of notice. Such a notice and lease modification result in the following accounting adjustments for the recaptured property: • Accrued rental revenues related to the straight-line method of reporting rental revenue that is deemed uncollectable as result of the lease modification is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. • Intangible lease assets and liabilities that are deemed to be impacted by the lease modification are amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. A 100% recapture will generally occur in conjunction with obtaining a new tenant or a real estate development project. As such, termination fees, if any, associated with the 100% recapture notice are generally capitalized as either an initial direct cost of obtaining a new lease or a necessary cost of the real estate project and depreciated over the life of the new lease obtained or the real estate asset being constructed or improved. Seritage 50% Recapture Rights. The Company generally treats the delivery of a 50% recapture notice as a modification of the Master Lease as of the date of notice. Such a notice and lease modification result in the following accounting adjustments for the recaptured property: • The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is subject to the lease modification is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. The portion of accrued rental revenues related to the straight-line method of reporting rental revenue that is attributable to the retained space is amortized over the remaining life of the Master Lease. • The portion of intangible lease assets and liabilities that are deemed to be impacted by the lease modification is amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. The portion of intangible lease assets and liabilities that is attributable to the retained space is amortized over the remaining useful life of the asset or liability. Sears Holdings Termination Rights. The Master Lease provides Sears Holdings with certain rights to terminate the Master Lease with respect to properties that cease to be profitable for operation by Sears Holdings. Such a termination would generally result in the following accounting adjustments for the terminated property: • Accrued rental revenues related to the straight-line method of reporting rental revenue that is subject to the termination is amortized over the remaining shortened life of the lease from the date of notice to the date of termination. • Intangible lease assets and liabilities that are deemed to be impacted by the termination are amortized over the shorter of the shortened lease term or the remaining useful life of the asset or liability. Additionally, termination fees required to be paid by Sears Holdings to the Company are recognized as income over the remaining shortened life of the lease from the date of notice to the date of termination.
Derivatives	Derivatives The Company’s use of derivative instruments is limited to the management of interest rate exposure and not for speculative purposes. In connection with the issuance of the Company’s mortgage loans, the Company purchased for $5.0 million an interest rate cap with a term of four years, a notional amount of $1.26 billion and a strike rate of 3.5%. The interest rate cap is measured at fair value and included as a component of prepaid expenses, deferred expenses and other assets on the consolidated balance sheets. The Company has elected not to utilize hedge accounting and, therefore, the change in fair value is included within change in fair value of interest rate cap on the consolidated statement of operations. For the three months ended March 31, 2016, the Company recorded a loss of $1.4 million related to the change in fair value of the interest rate cap.
Stock-Based Compensation	Stock-Based Compensation The Company generally recognizes equity awards to employees as compensation expense and includes such expense within general and administrative expenses on the consolidated statement of operations. Compensation expense for equity awards is generally based on the fair value of the common shares at the date of the grant and is recognized (i) ratably over the vesting period for awards with time-based vesting and (ii) for awards with performance-based vesting, at the date the achievement of performance criteria is deemed probable, an amount equal to that which would have been recognized ratably from the date of the grant through the date the achievement of performance criteria is deemed probable, and then ratably from the date the achievement of performance criteria is deemed probable through the remainder of the vesting period.
Concentration of Credit Risk	Concentration of Credit Risk Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of March 31, 2016, substantially all of the Company’s real estate properties were leased to Sears Holdings, and the majority of Company’s rental revenues were derived from the Master Lease (see Note 6). Sears Holdings is a publicly traded company that is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K and Form 10-Q with the SEC. Refer to www.sec.gov for Sears Holdings Corporation publicly-available financial information. Other than the Company’s tenant concentration, management believes the Company’s portfolio was reasonably diversified by geographical location and did not contain any other significant concentrations of credit risk. As of March 31, 2016, the Company’s portfolio of 235 Wholly Owned Properties was diversified by location across 49 states and Puerto Rico.
Earnings per Share	Earnings per Share The Company has three classes of common stock. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights. All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing earnings per share pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of earnings per share.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which amends accounting for income taxes related to share-based compensation, the related classification in the statement of cash flows and share award forfeiture accounting. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting,” which eliminates the requirement to retroactively adjust an investment that subsequently qualifies for equity method accounting (as a result of an increase in level of ownership interest or degree of influence) as if the equity method of accounting had been applied during all prior periods that the investment was held. The new standard requires that the investor add the cost of acquiring additional ownership interest in the investee to its current basis and prospectively adopt the equity method of accounting. Any unrealized gains or losses in an available-for-sale investment that subsequently qualifies as an equity method investment should be recognized in earnings at the date the investment qualifies as an equity method investment. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods and requires prospective adoption. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases, the lessee would recognize a straight-line total lease expense. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. The Company adopted ASU 2015-02 on January 1, 2016. The adoption of this standard did not have a material impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016. The standard can be applied either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment recognized as of the date of initial application. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements.

Summary of Significant Accoun25

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Estimated Useful Lives	Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives as follows: Building: 25 – 40 years Site improvements: 5 – 15 years Tenant improvements: shorter of the estimated useful life or non-cancelable term of lease

Acquisitions (Tables)

Acquisitions (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Summary of Purchase Price and Fair Value of Net Assets Acquired	The following table summarizes the final purchase price and fair values of the net assets acquired in the Transaction (in thousands): Proceeds from issuance of common stock and non-controlling interest $ 1,644,042 Less: Offering related costs (8,212 ) Proceeds from issuance of mortgage loans payable 1,161,196 Less: Deferred financing costs (21,446 ) Total sources of funds net of offering and financing costs 2,775,580 Real estate assets acquired Land 840,563 Buildings and improvements 810,499 Lease intangibles In-place leases 595,443 Below-market ground lease 11,766 Above-market leases 9,058 Below-market leases (20,045 ) Investments in unconsolidated joint ventures 429,012 Total fair value of real estate assets acquired 2,676,296 Plus: Restricted cash Environmental expenses reserve 12,034 Deferred maintenance reserve 10,575 Total restricted cash 22,609 Less: Assumed liabilities Real estate taxes payable (23,277 ) Environmental expenses (12,034 ) Deferred maintenance (10,575 ) Total assumed liabilities (45,886 ) Net cash paid for acquisition of real estate and unconsolidated joint ventures 2,653,019 Additional (sources) / uses of cash Prepaid rent (26,855 ) Initial funding of unfunded construction commitments reserve (restricted cash) 42,470 Initial funding of property carry costs reserve (restricted cash) 32,482 Initial funding of interest expense reserve (restricted cash) 4,924 Acquisition-related expenses 18,340 Prepaid interest expense 1,249 Total additional (sources) uses of cash, net 72,610 Remaining excess cash from Transaction $ 49,951

Lease Intangible Assets and L27

Lease Intangible Assets and Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Lease Intangible Assets	The following table summarizes the Company’s lease intangible assets and liabilities (in thousands): Lease Intangible Assets Gross Accumulated Balance In-place leases, net $ 595,443 $ (59,894 ) $ 535,549 Below-market ground leases, net 11,766 (152 ) 11,614 Above-market leases, net 9,058 (862 ) 8,196 Total $ 616,267 $ (60,908 ) $ 555,359
Summary of Lease Intangible Liabilities	The following table summarizes the Company’s lease intangible liabilities: Lease Intangible Liabilities Gross Accumulated Balance Below-market leases, net $ 20,045 $ (1,593 ) $ 18,452 Total $ 20,045 $ (1,593 ) $ 18,452
Schedule of Future Amortization for Below-Market Ground Leases	Future amortization of below-market ground leases is estimated to increase property expenses as set forth below (in thousands): Remainder of 2016 $ 152 2017 203 2018 203 2019 203 2020 203 2021 203
Above-Market Leases, Net [Member]
Schedule of Future Amortization of Leases	Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands): Remainder of 2016 $ (734 ) 2017 (978 ) 2018 (978 ) 2019 (951 ) 2020 (822 ) 2021 (817 )
In-Place Leases, Net [Member]
Schedule of Future Amortization of Leases	Future estimated amortization of acquired in-place leases is set forth below (in thousands): Remainder of 2016 $ 55,419 2017 72,496 2018 71,927 2019 69,122 2020 66,394 2021 58,662

Investments in Unconsolidated28

Investments in Unconsolidated Joint Ventures (Tables)	3 Months Ended
	Mar. 31, 2016
Equity Method Investments and Joint Ventures [Abstract]
Summary of Company's Investments in Unconsolidated Joint Ventures	The Company’s investments in unconsolidated joint ventures at March 31, 2016, consisted of (in thousands): Joint Venture # of Total Initial Seritage % GGP JV 12 2,162 $ 165,000 50 % Macerich JV 9 1,714 150,000 50 % Simon JV 10 1,574 114,012 50 % Total 31 5,450 $ 429,012
Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures	The following table presents combined condensed financial data for all of the Company’s unconsolidated joint ventures as of March 31, 2016 (in thousands): March 31, 2016 December 31, 2015 ASSETS Investment in real estate Land $ 214,190 $ 214,726 Buildings and improvements 603,312 603,265 Accumulated depreciation (32,587 ) (24,111 ) 784,915 793,880 Construction in progress 2,289 1,481 Net investment in real estate 787,204 795,361 Cash and cash equivalents 18,528 19,903 Tenant and other receivables, net 3,149 4,990 Other assets, net 26,845 30,506 Total assets $ 835,726 $ 850,760 LIABILITIES AND EQUITY Liabilities Accounts payable, accrued expenses and other liabilities $ 10,948 $ 13,973 Total liabilities 10,948 13,973 Equity Partnership equity 820,606 823,923 Retained earnings 4,172 12,864 Total equity 824,778 836,787 Total liabilities and equity $ 835,726 $ 850,760 Three Months Ended EQUITY IN INCOME OF UNCONSOLIDATED JOINT VENTURES Total revenue $ 17,538 Property operating expenses (3,404 ) Depreciation and amortization (9,739 ) Operating income 4,395 Other expenses (223 ) Net income $ 4,172 Equity in income of unconsolidated joint ventures $ 2,086

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2016
Leases [Abstract]
Summary of Revenue from Master Lease	Revenues from the Master Lease for the three months ended March 31, 2016 are as follows (in thousands and excluding the effect of straight-line rent): Three Months Ended March 31, 2016 Rental income $ 33,385 Tenant reimbursements 16,752 Total revenue $ 50,137

Earnings per Share (Tables)

Earnings per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Reconciliation of Net Loss and Number of Common Shares Used in Computations of Basic Earnings Per Share	The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares. Potentially dilutive securities consist of shares of non-vested restricted stock and the redeemable non-controlling interests in the Operating Partnership. All outstanding non-vested shares that contain non-forfeitable rights to dividends are considered participating securities and are included in computing EPS pursuant to the two-class method which specifies that all outstanding non-vested share-based payment awards that contain non-forfeitable rights to distributions are considered participating securities and should be included in the computation of EPS. Earnings per share has not been presented for Class B shareholders as they do not have economic rights. (in thousands except per share amounts) Three Months Ended Numerator—Basic and Diluted Net loss $ (14,714 ) Net loss attributable to non-controlling interests 6,379 Net loss attributable to common shareholders $ (8,335 ) Denominator—Basic and Diluted Weighted average Class A common shares outstanding 24,947 Weighted average Class C common shares outstanding 6,444 Weighted average Class A and Class C common shares outstanding 31,391 Net loss per share attributable to Class A and Class C common shareholders $ (0.27 )

Stock Based Compensation (Table

Stock Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Restricted Share	The following table summarizes restricted share activity for the grant the three months ended March 31, 2016: Shares Weighted- Unvested restricted shares and share units at beginning of period 221,484 $ 37.18 Restricted shares and share units granted 23,324 46.48 Restricted shares and share units vested — — Restricted shares and share units forfeited — — Unvested restricted shares and share units at end of period 244,808 $ 38.07

Accounts Payable, Accrued Exp32

Accounts Payable, Accrued Expenses and Other Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
Components of Accounts Payable, Accrued Expenses and Other Liabilities	The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities as of March 31, 2016 (in thousands): March 31, 2016 December 31, 2015 Accrued real estate taxes $ 21,293 $ 25,333 Below-market leases 18,452 18,986 Prepaid rent 14,094 1,331 Accounts payable and accrued expenses 14,041 13,793 Dividends payable 13,953 27,894 Environmental reserve 11,824 11,824 Deferred maintenance 10,281 10,281 Accrued interest 2,806 2,748 Sears Holdings payable — 8,670 Total accounts payable, accrued expenses and other liabilities $ 106,744 $ 120,860

Organization - Additional Infor

Organization - Additional Information (Detail) $ in Billions	Jul. 07, 2015USD ($)	Jun. 11, 2015USD ($)RetailFacilitiesPropertyJointVenture	Jun. 03, 2015shares	Mar. 31, 2016Property
Organization And Basis Of Presentation [Line Items]
Operations Commenced Date				Jul. 7, 2015
Class A Common Shares [Member]
Organization And Basis Of Presentation [Line Items]
Number of shares initially capitalized | shares			100
Sears Holdings Corporation [Member]
Organization And Basis Of Presentation [Line Items]
Business acquisition fair value, purchase price | $	$ 2.7	$ 2.7
Number of real estate properties acquired | Property		234
Number of ground leased properties acquired | Property		1
Interests in joint ventures acquired		50.00%
Number of joint venture acquired | JointVenture		3
Number of Wholly Owned Properties not lease back to Sears Holdings | Property				12
Sears Holdings Corporation [Member] | Joint Venture [Member]
Organization And Basis Of Presentation [Line Items]
Number of retail facilities | RetailFacilities		28
Number of retail facilities subject to ground lease | RetailFacilities		1
Number of retail facilities subject to lease | RetailFacilities		2

Summary of Significant Accoun34

Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016USD ($)StatesPropertySegment	Dec. 31, 2015USD ($)	Jul. 07, 2015USD ($)
Summary Of Significant Accounting Policies [Line Items]
Number of reportable segments | Segment	1
Impairment loss on real estate assets	$ 0
Impairment loss	0
Restricted cash	$ 89,183,000	$ 92,475,000
Number of wholly owned properties acquired | Property	235
Number of states in properties located | States	49
Interest Rate Cap [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest rate caps purchased	$ 5,000,000
Derivative, term of contract	4 years
Notional amount	$ 1,260,000,000
Derivative strike rate	3.50%
Derivative loss	$ 1,400,000
Future Capital Investments [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	47,800,000
Basic Property Carrying Costs [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	$ 41,400,000
Operating Partnership [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of operating partnership interest held by parent	56.60%
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Cash and cash equivalent maturity period	3 months
Sears Holdings Corporation [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash			$ 22,609,000
Right to recapture property space	100.00%
Master Lease [Member]
Summary Of Significant Accounting Policies [Line Items]
Right to recapture property space	50.00%
Master Lease [Member] | Sears Holdings Corporation [Member]
Summary Of Significant Accounting Policies [Line Items]
Right to recapture property space	100.00%

Summary of Significant Accoun35

Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail)	3 Months Ended
	Mar. 31, 2016
Minimum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	25 years
Minimum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Maximum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Maximum [Member] | Site Improvement [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	15 years

Acquisitions - Additional Infor

Acquisitions - Additional Information (Detail) - USD ($) $ in Billions	Jul. 07, 2015	Jun. 11, 2015
Sears Holdings Corporation [Member]
Business Acquisition [Line Items]
Business acquisition fair value, purchase price	$ 2.7	$ 2.7

Acquisitions - Summary of Fair

Acquisitions - Summary of Fair Values of Net Assets Acquired (Detail) - USD ($) $ in Thousands	Jul. 07, 2015	Mar. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Less: Deferred financing costs		$ (6)
Plus: Restricted cash
Restricted cash		89,183	$ 92,475
Environmental Expenses Reserve [Member]
Plus: Restricted cash
Restricted cash		$ 12,000
Sears Holdings Corporation [Member]
Business Acquisition [Line Items]
Proceeds from issuance of common stock and non-controlling interest	$ 1,644,042
Less: Offering related costs	(8,212)
Proceeds from issuance of mortgage loans payable	1,161,196
Less: Deferred financing costs	(21,446)
Total sources of funds net of offering and financing costs	2,775,580
Real estate assets acquired
Land	840,563
Buildings and improvements	810,499
In-place leases	595,443
Below-market ground lease	11,766
Above-market leases	9,058
Below-market leases	(20,045)
Investments in unconsolidated joint ventures	429,012
Total fair value of real estate assets acquired	2,676,296
Plus: Restricted cash
Restricted cash	22,609
Less: Assumed liabilities
Real estate taxes payable	(23,277)
Environmental expenses	(12,034)
Deferred maintenance	(10,575)
Total assumed liabilities	(45,886)
Net cash paid for acquisition of real estate and unconsolidated joint ventures	2,653,019
Additional (sources) / uses of cash
Prepaid rent	(26,855)
Initial funding of unfunded construction commitments reserve (restricted cash)	42,470
Initial funding of property carry costs reserve (restricted cash)	32,482
Initial funding of interest expense reserve (restricted cash)	4,924
Acquisition-related expenses	18,340
Prepaid interest expense	1,249
Total additional (sources) uses of cash, net	72,610
Remaining excess cash from Transaction	49,951
Sears Holdings Corporation [Member] | Environmental Expenses Reserve [Member]
Plus: Restricted cash
Restricted cash	12,034
Sears Holdings Corporation [Member] | Deferred Maintenance Reserve [Member]
Plus: Restricted cash
Restricted cash	$ 10,575

Lease Intangible Assets and L38

Lease Intangible Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	$ 555,359	$ 578,795
Identified intangible liability, net of accumulated amortization	18,452	$ 18,986
Amortization of below-market leases, net of above-market leases	200
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Additional property expense	100
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net of accumulated amortization	535,549
Amortization expense of intangible assets	$ 23,100

Lease Intangible Assets and L39

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 616,267
Accumulated Amortization	(60,908)
Balance	555,359	$ 578,795
In-Place Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	595,443
Accumulated Amortization	(59,894)
Balance	535,549
Below-Market Ground Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	11,766
Accumulated Amortization	(152)
Balance	11,614
Above-Market Leases, Net [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Asset	9,058
Accumulated Amortization	(862)
Balance	$ 8,196

Lease Intangible Assets and L40

Lease Intangible Assets and Liabilities - Summary of Lease Intangible Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Below Market Lease, Net [Abstract]
Gross Liability	$ 20,045
Accumulated Amortization	(1,593)
Balance	$ 18,452	$ 18,986

Lease Intangible Assets and L41

Lease Intangible Assets and Liabilities - Schedule of Future Annual Amortization of Below Market Leases (Detail) - Above-Market Leases, Net [Member] $ in Thousands	Mar. 31, 2016USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2016	$ (734)
2,017	(978)
2,018	(978)
2,019	(951)
2,020	(822)
2,021	$ (817)

Lease Intangible Assets and L42

Lease Intangible Assets and Liabilities - Schedule of Future Amortization for Below-Market Ground Leases (Detail) - Leases Acquired In-Place Market Adjustment [Member] $ in Thousands	Mar. 31, 2016USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2016	$ 152
2,017	203
2,018	203
2,019	203
2,020	203
2,021	$ 203

Lease Intangible Assets and L43

Lease Intangible Assets and Liabilities - Schedule of Future Estimated Annual Amortization of Acquired In Place Leases (Detail) - In-Place Leases, Net [Member] $ in Thousands	Mar. 31, 2016USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Remainder of 2016	$ 55,419
2,017	72,496
2,018	71,927
2,019	69,122
2,020	66,394
2,021	$ 58,662

Investments in Unconsolidated44

Investments in Unconsolidated Joint Ventures - Summary of Company's Investments in Unconsolidated Joint Ventures (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)ft²Property
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	31
Total GLA | ft²	5,450
Initial Investment | $	$ 429,012
General Growth Properties, Inc. [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	12
Total GLA | ft²	2,162
Initial Investment | $	$ 165,000
Seritage % Ownership	50.00%
The Macerich Company [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	9
Total GLA | ft²	1,714
Initial Investment | $	$ 150,000
Seritage % Ownership	50.00%
Simon Property Group Inc [Member]
Income Statement Equity Method Investments [Line Items]
Number of properties | Property	10
Total GLA | ft²	1,574
Initial Investment | $	$ 114,012
Seritage % Ownership	50.00%

Investments in Unconsolidated45

Investments in Unconsolidated Joint Ventures - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016USD ($)
Equity Method Investments and Joint Ventures [Abstract]
Joint venture impairment charges	$ 0

Investments in Unconsolidated46

Investments in Unconsolidated Joint Ventures - Summary of Combined Condensed Financial Data of Unconsolidated Joint Ventures (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Land	$ 214,190	$ 214,726
Buildings and improvements	603,312	603,265
Accumulated depreciation	(32,587)	(24,111)
Investment in real estate, gross	784,915	793,880
Construction in progress	2,289	1,481
Net investment in real estate	787,204	795,361
Cash and cash equivalents	18,528	19,903
Tenant and other receivables, net	3,149	4,990
Other assets, net	26,845	30,506
Total assets	835,726	850,760
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and other liabilities	10,948	13,973
Total liabilities	10,948	13,973
Equity
Partnership equity	820,606	823,923
Retained earnings	4,172	12,864
Total equity	824,778	836,787
Total liabilities and equity	835,726	$ 850,760
Total revenue	17,538
Property operating expenses	(3,404)
Depreciation and amortization	(9,739)
Operating income	4,395
Other expenses	(223)
Net income	4,172
Equity in income of unconsolidated joint ventures	$ 2,086

Leases - Additional Information

Leases - Additional Information (Detail) $ in Millions	Jul. 07, 2015LeaseOptions	Jun. 11, 2015Property	May. 06, 2016Property	Mar. 31, 2016USD ($)Property	Dec. 31, 2015Property
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised					3
Right to recapture property space exercised percentage					100.00%
San Antonio TX [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised				1
Subsequent Event [Member] | Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of real estate properties acquisition exercised			5
Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space				100.00%
Number of real estate properties wholly-owned		234
Master Lease [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Lease term	10 years
Renewal period of leases	5 years
Final option renewal period	4 years
Base rent paid by Sears Holdings and subsidiaries under master lease | $				$ 133.3
Number of renewal term that will be increased | Lease	2
Percentage of increase annual lease rent	2.00%
Right to recapture property space				50.00%
Number of real estate properties wholly-owned				224
Lease termination, description				While the Company will be permitted to exercise its recapture rights all at once or in stages as to any particular property, it will not be permitted to recapture all or substantially all of the space subject to the recapture right at more than 50 Wholly Owned Properties during any lease year.
Number of real estate properties wholly-owned				50
Master Lease [Member] | Five Year Renewal [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of options for renewal of lease | Options	3
Master Lease [Member] | Four Year Renewal [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Number of options for renewal of lease | Options	1
Master Lease [Member] | Sears Holdings Corporation [Member]
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items]
Right to recapture property space				100.00%
Number of real estate properties wholly-owned				21
Lease termination, description				The lease termination payment is calculated as the greater of an amount specified at the time the Company entered into the Master Lease with Sears Holding and an amount equal to 10 times the adjusted EBITDA attributable to such space within the Sears Holdings main store which is not attributable to the space subject to the separate 50% recapture right discussed above for the 12-month period ending at the end of the fiscal quarter ending immediately prior to recapturing such space.
Percentage of reduction of fixed rent under master lease				20.00%
Lease termination notice period				90 days

Leases - Summary of Revenue fro

Leases - Summary of Revenue from Master Lease (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Property Subject to or Available for Operating Lease [Line Items]
Rental income	$ 45,226
Tenant reimbursements	17,778
Total revenue	63,004
Master Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Rental income	33,385
Tenant reimbursements	16,752
Total revenue	$ 50,137

Mortgage Loans Payable - Additi

Mortgage Loans Payable - Additional Information (Detail) - USD ($)	Jul. 07, 2015	Mar. 31, 2016
Mortgage Loans on Real Estate [Line Items]
Debt issuance costs related to the mortgage loans		$ 6,000
Mortgage Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage loan agreement, description		The Loan Agreements contain customary covenants for a real estate financing, including terms that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based on certain measures of the Company’s financial and operating performance, including in the case that “Debt Yield” (the ratio of net operating income for the borrowers to their debt) is less than 11.0% or if the Company fails to achieve certain thresholds for tenant diversification. The Loan Agreements prohibit repayment of any amounts outstanding for the first 12 months (other than repayments in connection with property releases and certain other exceptions) and contains a yield maintenance provision for the early extinguishment of the debt within the first 30 months.
Maximum debt yield percentage		11.00%
Debt issuance costs related to the mortgage loans	$ 21,400,000
Unamortized balance of company's debt issuance costs		$ 17,400,000
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Expiration date		Jul. 31, 2019
Maturity description		The Loan Agreements contain customary covenants for a real estate financing, including terms that limit the Company’s ability to grant liens on its assets, incur additional indebtedness, or transfer or sell assets, as well as those that may require the Company to obtain lender approval for certain major tenant leases or significant redevelopment projects. Such restrictions also include cash flow sweep provisions based on certain measures of the Company’s financial and operating performance, including in the case that “Debt Yield” (the ratio of net operating income for the borrowers to their debt) is less than 11.0% or if the Company fails to achieve certain thresholds for tenant diversification. If the performance of Sears Holdings at the stores subject to the Master Lease fails to meet specified thresholds and if the Company fails to satisfy additional tenant diversification tests and declines to provide a specified amount of cash collateral, then the cash flow sweep provisions of the Loan Agreements may also be triggered. The Loan Agreements prohibit repayment of any amounts outstanding for the first 12 months (other than repayments in connection with property releases and certain other exceptions) and contains a yield maintenance provision for the early extinguishment of the debt within the first 30 months.
Interest rate description		Borrowings under the Mortgage Loans bear interest at the London Interbank Offered Rates ("LIBOR") plus, as of March 31, 2016, a weighted-average spread of 465 basis points; payments are made monthly on an interest-only basis.
Basis spread on variable rate		4.65%
Frequency of interest payment		Monthly
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member] | Term Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Loan, face amount	1,160,000,000
Weighted average interest rate		5.16%
Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member] | Future Funding Facility [Member]
Mortgage Loans on Real Estate [Line Items]
Loan, face amount	$ 100,000,000

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016USD ($)
Income Tax Contingency [Line Items]
Uncertain tax positions	$ 0
Minimum [Member]
Income Tax Contingency [Line Items]
Distribution of taxable income to qualify as REIT, percent	90.00%

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)
Fair Value, Inputs, Level 2 [Member] | Mortgage Loans over $1,000,000 [Member] | Mortgage Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgages payable, fair value	$ 1,200
Interest Rate Cap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative loss	1.4
Interest Rate Cap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets, fair value	$ 0.7

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Thousands	1 Months Ended
	Jun. 30, 2015Lawsuits	May. 31, 2015Lawsuits	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Loss Contingencies [Line Items]
Restricted cash			$ 89,183	$ 92,475
Number of Sears Holdings shareholders filed lawsuits | Lawsuits	4	4
Environmental Expenses Reserve [Member]
Loss Contingencies [Line Items]
Restricted cash			$ 12,000

Related Party Disclosure - Addi

Related Party Disclosure - Additional Information (Detail) - USD ($) $ in Millions	Mar. 21, 2016	Jul. 07, 2015	Mar. 31, 2016
Transaction Services Agreement [Member]
Schedule of Other Related Party Transactions [Line Items]
Transition service agreement period		18 months
Transition service agreement fees			$ 0.1
Operating Partnership [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party			43.40%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Beneficiary Ownership interest percentage held by related party	54.60%
Ownership interest percentage held by related party			43.40%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | Class A Common Shares [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party			3.80%
Operating Partnership [Member] | Sears Holdings Corporation [Member] | Class B Non-Economic Common Shares [Member] | ESL [Member]
Schedule of Other Related Party Transactions [Line Items]
Ownership interest percentage held by related party			100.00%

Non-controlling Interests - Add

Non-controlling Interests - Additional Information (Detail) - Operating Partnership [Member]	Mar. 31, 2016
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	56.60%
ESL [Member]
Noncontrolling Interest [Line Items]
Percentage of operating partnership interest held by parent	56.60%
Ownership interest percentage held by related party	43.40%

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Detail) - $ / shares	May. 03, 2016	Mar. 08, 2016	Dec. 17, 2015	Mar. 31, 2016
Class of Stock [Line Items]
Cash dividend declared				$ 0.25
Subsequent Event [Member]
Class of Stock [Line Items]
Date dividends to be paid	Jul. 14, 2016
Class A Common Shares [Member]
Class of Stock [Line Items]
Cash dividend declared		$ 0.25	$ 0.50
Class A Common Shares [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Cash dividend declared	$ 0.25
Class C Common Shares [Member]
Class of Stock [Line Items]
Cash dividend declared		$ 0.25	$ 0.50
Class C Common Shares [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Cash dividend declared	$ 0.25

Earnings per Share - Reconcilia

Earnings per Share - Reconciliation of Net Loss and Number of Common Shares Used in Computations of Basic Earnings Per Share (Detail) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
Numerator - Basic and Diluted
Net loss | $	$ (14,714)
Net loss attributable to non-controlling interests | $	6,379
Net loss attributable to common shareholders | $	$ (8,335)
Denominator - Basic and Diluted
Weighted average common shares outstanding | shares	31,391
Net loss per share attributable to Class A and Class C common shareholders | $ / shares	$ (0.27)
Class A Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding | shares	24,947
Class C Common Shares [Member]
Denominator - Basic and Diluted
Weighted average common shares outstanding | shares	6,444

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail)	Mar. 31, 2016shares
Restricted Shares and Share Units [Member]
Earning Per Share [Line Items]
Non-vested restricted shares and share units outstanding	244,808

Stock Based Compensation - Addi

Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	Jul. 07, 2015	Mar. 31, 2016
Time Based Restricted Shares and Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Restricted Share [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs		$ 9.1
Unrecognized compensation costs, weighted average expected recognition period		2 years 9 months 18 days
Restricted Share [Member] | General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized		$ 0.3
Seritage Growth Properties 2015 Share Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	3,250,000
Maximum number of shares available for grant per participants	0

Stock Based Compensation - Summ

Stock Based Compensation - Summary of Restricted Share (Detail) - Restricted Share [Member]	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares and share units at beginning of period | shares	221,484
Restricted shares and share units granted | shares	23,324
Restricted shares and share units vested | shares	0
Restricted shares and share units forfeited | shares	0
Unvested restricted shares and share units at end of period | shares	244,808
Weighted-Average Grant Date Fair Value, Unvested restricted shares at beginning of period | $ / shares	$ 37.18
Weighted-Average Grant Date Fair Value, Restricted shares and share units granted | $ / shares	46.48
Weighted-Average Grant Date Fair Value, Restricted shares and share units vested | $ / shares	0
Weighted-Average Grant Date Fair Value, Restricted shares and share units forfeited | $ / shares	0
Weighted-Average Grant Date Fair Value, Unvested restricted shares at end of period | $ / shares	$ 38.07

Accounts Payable, Accrued Exp60

Accounts Payable, Accrued Expenses and Other Liabilities - Components of Accounts Payable, Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued real estate taxes	$ 21,293	$ 25,333
Below-market leases	18,452	18,986
Prepaid rent	14,094	1,331
Accounts payable and accrued expenses	14,041	13,793
Dividends payable	13,953	27,894
Environmental reserve	11,824	11,824
Deferred maintenance	10,281	10,281
Accrued interest	2,806	2,748
Sears Holdings payable		8,670
Total accounts payable, accrued expenses and other liabilities	$ 106,744	$ 120,860