Terms

Series

7.00% Series A Cumulative Redeemable Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

7%

Rate Type

Fixed

Annual Dividend

$1.75

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

December 14, 2022

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Any Equity Securities Specifically Designated As Senior To The Series A Preferred Shares; Pari Passu With: Any Parity Preferred Equity Securities Specifically Designated As Equal Rank; Senior To: Common Shares, Non-Voting Shares, All Other Junior Equity Securities

Regulatory (Basel III) Call

Yes

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

2,800,000

Prospectus Summary

Seritage Growth Properties, a Maryland-based self-managed REIT, is offering 2,800,000 shares of its 7.00% Series A Cumulative Redeemable Preferred Shares at a $25.00 liquidation preference per share, with an annual dividend of $1.75 ($0.4375 quarterly), paid on January 15, April 15, July 15, and October 15. The shares are callable at par on or after December 14, 2022. These are cumulative preferred shares, meaning any unpaid dividends accrue and must be paid in full before distributions can be made to common shareholders. The Series A Preferred Shares rank senior to Seritage's common shares and all junior equity securities, and pari passu with any future parity preferred. They rank junior to all existing and future debt obligations of the company. As a holding company REIT, Seritage's obligations are structurally subordinate to liabilities at the operating partnership and property subsidiary level. Notably, the issuer may redeem the preferred shares prior to the December 14, 2022 call date only in limited circumstances to preserve its REIT qualification — a REIT-specific regulatory call provision rather than a traditional bank Tier 1 capital trigger. At the $25.00 issue price, the shares yield exactly 7.00% annually. As a REIT, Seritage's dividends generally do not qualify for the preferential 15%/20% qualified dividend income (QDI) rate available for most corporate dividends, nor for the corporate dividends-received deduction (DRD); they are typically taxable as ordinary income. Dividends accrue regardless of earnings or legal availability of funds. The dividend stopper mechanism means that if preferred dividends fall into arrears, no distributions may be paid to common or junior equity holders until all accrued Series A Preferred dividends are made current.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If dividends on the Series A Preferred Shares are in arrears, the issuer is effectively restricted from paying dividends to holders of common shares or other junior equity securities until all accrued and unpaid preferred dividends are paid.

Other Preferreds from Seritage Growth Properties

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 35 (Weak)