What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 121 added, 98 removed, 319 unchanged (41% of the section changed)

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Hospitality represents our ownership interests in various food and beverage operating businesses and sponsorship agreements related to these businesses.

We own, either wholly or through partnerships with third parties, and operate, including license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, Malibu Farm and Gitano), as well as the Tin Building by Jean-Georges, which offers a variety of culinary experiences, including restaurants, bars, grocery markets, retail, and private dining, and our unconsolidated venture, the Lawn Club.

We own, either wholly or through partnerships with third parties, and operate, including through license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, Malibu Farm and Gitano), as well as the Tin Building by Jean-Georges, which offers a variety of culinary experiences, including restaurants, bars, grocery markets, retail, and private dining, and our unconsolidated venture, the Lawn Club.

These businesses are all our tenants and are part of our Landlord Operations.

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The Rooftop at Pier 17 is a premier outdoor concert venue that hosts a popular Summer Concert Series featuring emerging and established musicians alike.

Commencing in the fourth quarter of 2025, we plan to launch year-round concerts and events for The Rooftop at Pier 17 utilizing a seasonal floor-to-ceiling glass enclosure for the winter months.

We see The Rooftop at Pier 17 as an opportunity to continue to drive events and entertainment growth as we believe that the demand for live music and private events is strong and accelerating.

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the Fulton Market Building, a mixed-use building containing office and retail spaces, including a movie theater and the Lawn Club, an experiential retail concept focused on “classic lawn games” and cocktails;

the Historic District retail and other locations which include the Museum Block, Schermerhorn Row, and more;

the Cobblestones retail and other locations which include the Museum Block, Schermerhorn Row, and more;

250 Water Street, a full block development site approved for zoning of affordable and market-rate housing, office, retail, and community-oriented gathering space;

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Our financial statements for the periods beginning on and after August 1, 2024 are consolidated financial statements based on our financial position, results of operations and cash flows as a standalone company.

Accordingly, the accompanying Unaudited Consolidated Financial Statements as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 have been prepared on a standalone basis and are derived from the accounting records of the Company.

The accompanying Unaudited Combined Financial

Statements for the three and six months ended June 30, 2024 have been prepared on a carve-out basis and are derived from the combined financial statements and accounting records of HHH.

Accordingly, the accompanying Unaudited Consolidated Financial Statements as of September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 have been prepared on a stand-alone basis and are derived from the accounting records of the Company.

The accompanying Unaudited Consolidated and Combined Financial Statements for the three and nine months ended September 30, 2024 have been prepared on a stand-alone basis and are derived from the combined financial statements and accounting records of the Company from August

1, 2024 to September 30, 2024 and have been prepared on a carve-out basis and are derived from the combined financial statements and accounting records of HHH for January 1, 2024 to July 31, 2024.

The accompanying Unaudited Consolidated and Combined Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

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and (2) employee benefits and compensation, including stock-based compensation.

The Company’s Unaudited Combined Financial Statements for the three and six months ended June 30, 2024 reflect an allocation of these costs.

As a standalone public company, our ongoing costs related to such support functions may differ from, and may potentially exceed, the amounts that have been allocated to the Company in the Company’s Unaudited Combined Financial Statements for the three and six months ended June 30, 2024.

The Company’s Unaudited Consolidated and Combined Financial Statements for the three and nine months ended September 30, 2024 reflect an allocation of these costs.

As a standalone public company, our ongoing costs related to such support functions may differ from, and may potentially exceed, the amounts that have been allocated to the Company in the Company’s Unaudited Consolidated and Combined Financial Statements for the three and nine months ended September 30, 2024.

Following the Separation, HHH continues to provide some of these services on a transitional basis in exchange for agreed-upon fees.

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As the Company recognizes 100% of operating income or losses from the Tin Building by Jean-Georges, the Tin Building lease has no net impact to the Company’s total net loss.

However, Landlord Operations Adjusted EBITDA, as defined below, includes only rental revenue related to the Tin Building lease payments, and does not include rent expense in Equity in losses from unconsolidated ventures for the three and six months ended June 30, 2024 or rent expense for the three and six months ended June 30, 2025 included in Hospitality costs in Hospitality Adjusted EBITDA.

The rental revenue and hospitality costs associated with the lease payments are eliminated in the Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2025.

However, Landlord Operations Adjusted EBITDA, as defined below, includes only rental revenue related to the Tin Building lease payments, and does not include rent expense in Equity in losses from unconsolidated ventures for the three and nine months ended September 30, 2024 or rent expense for the three and nine months ended September 30, 2025 included in Hospitality costs in Hospitality Adjusted EBITDA.

The rental revenue and hospitality costs associated with the lease payments are eliminated in the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025.

See Note 2 – Investments in Unconsolidated Ventures in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report for additional details related to the Tin Building by Jean-Georges joint venture and unaudited pro forma information.

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However, operating losses at the Tin Building by Jean-Georges joint venture remained elevated, as the venture continues to refine its operating model.

Performance at the Tin Building by Jean-Georges improved in 2024 and operating results remained consistent with prior year during the three and six months ended June 30, 2025.

As the Company is the sole owner of the Tin Building by Jean-Georges as of June 30, 2025, the future success of the Tin Building by Jean-Georges may have a significant impact on our results of operations.

Performance at the Tin Building by Jean-Georges improved in 2024 and operating results have improved from prior year during the three and nine months ended September 30, 2025.

As the Company is the sole owner of the Tin Building by Jean-Georges as of September 30, 2025, the future success of the Tin Building by Jean-Georges may have a significant impact on our results of operations.

Our operations are highly seasonal and are significantly impacted by weather conditions.

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Similarly, floods can lead to temporary closures of our restaurants and can disrupt our supply chain, leading to potential revenue losses and increased costs.

During the fall and winter months, our operations tend to slow down due to the colder weather which results in fewer outdoor events, less foot traffic at our restaurants, and the end of the Aviators baseball season.

During the fall and winter months, our operations tend to slow down due to the colder weather, which results in fewer outdoor events and less foot traffic at our restaurants, and the end of the Aviators baseball season.

This seasonality pattern results in lower revenues during these periods.

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Lease Renewals and Occupancy

As of June 30, 2025, the average remaining term of our occupied retail, office, and other properties leases where we are the lessor was approximately six years, excluding renewal options.

As of September 30, 2025, the average remaining term of our occupied retail, office, and other properties leases where we are the lessor was approximately seven years, excluding renewal options.

The stability of the rental revenue generated by our properties depends principally on our tenants’ ability to pay rent and our ability to collect rents, renew expiring leases, re-lease space upon the expiration or other termination of leases, lease currently vacant properties, and maintain or increase rental rates at our leased properties.

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In January 2025, the Company entered into a lease with immersive entertainment and experience creator, Meow Wolf, to occupy approximately 74,000 square feet of vacant space in Pier 17, inclusive of a space currently occupied and expiring in December 2025.

During the three months ending June 30, 2025, an office tenant of Pier 17 exercised a termination option within its lease.

During the nine months ending September 30, 2025, an office tenant of Pier 17 exercised a termination option within its lease.

As a result of the tenant exercising the termination option, the lease term now expires three years earlier than the stated maturity date.

The Company received a $2.0 million payment during the three months ended June 30, 2025 upon exercise of the termination option.

The Company received a $2.0 million payment during the nine months ended September 30, 2025 upon exercise of the termination option.

An additional $2.0 million payment is due at the end of the revised term in February 2027.

The Company recorded the payment received during the three months ended June 30, 2025 in accounts payable and other liabilities on our Unaudited Consolidated Balance Sheet as of June 30, 2025 and the Company will recognize the payment as revenue on the Statement of Operations on a straight-line basis over the revised term of the lease.

The Company recorded the payment received during the nine months ended September 30, 2025 in accounts payable and other liabilities on our Unaudited Consolidated Balance Sheet as of September 30, 2025 and the Company will recognize the payment as revenue on the Statement of Operations on a straight-line basis over the revised term of the lease.

We continue to monitor our lease renewals and occupancy rates.

As of June 30, 2025, our real estate assets at the Seaport were 83% leased or programmed.

As of September 30, 2025, our real estate assets at the Seaport were 83% leased or programmed.

Inflationary Pressures and Other Macroeconomic Trends

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Separation Costs.

The Company incurred pre-tax charges related to the planned separation from HHH, primarily related to legal and consulting costs, of $7.9 million and $17.1 million for the three and six months ended June 30, 2024, respectively.

No costs related to the Separation were incurred or recorded for the three or six months ended June 30, 2025.

The Company incurred pre-tax charges related to the planned separation from HHH, primarily related to legal and consulting costs, of $6.7 million and $23.8 million for the three and nine months ended September 30, 2024, respectively.

No costs related to the Separation were incurred or recorded for the three or nine months ended September 30, 2025.

Shared Service Costs.

Prior to the Separation, HHH provided the Company certain services, including (1) certain support functions that were provided on a centralized basis within HHH, including, but not limited to property management, development, executive oversight, treasury, accounting, finance, internal audit, legal, information technology, human resources, communications, and risk management;

and (2) employee benefits and compensation, including stock-based compensation.

The Company’s Unaudited Combined Financial Statements for the three and six months ended June 30, 2024 reflect an allocation of these costs.

When specific identification or a direct attribution of costs

based on time incurred for the Company’s benefit is not practicable, a proportional cost method is used, primarily based on revenue, headcount, payroll costs or other applicable measures.

The Company recorded expenses associated with shared services that are not directly attributable to the Company of $3.9 million and $7.5 million for the three and six months ended June 30, 2024, respectively.

and (2) employee benefits and compensation,

including stock-based compensation.

The Company’s Unaudited Consolidated and Combined Financial Statements for the three and nine months ended September 30, 2024 reflect an allocation of these costs.

When specific identification or a direct attribution of costs based on time incurred for the Company’s benefit is not practicable, a proportional cost method is used, primarily based on revenue, headcount, payroll costs or other applicable measures.

The Company recorded expenses associated with shared services that are not directly attributable to the Company of $5.3 million and $12.8 million for the three and nine months ended September 30, 2024, respectively.

Tin Building by Jean-Georges.

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See Tin Building and our Investment in the Tin Building by Jean-Georges above for additional details.

Leadership Transition Costs.

The Company incurred leadership transition costs, primarily related to severance costs, bonus accrual and stock compensation expense, of $11.5 million and $12.2 million for the three and nine months ended September 30, 2025, respectively.

No costs related to the leadership transition were incurred or recorded for the three or nine months ended September 30, 2024.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table sets forth our operating results:

Three Months Ended June 30,

Three Months Ended September 30,

in thousands except percentages

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Total expenses

Loss on assets held for sale

Other income (loss), net

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Equity in earnings (losses) from unconsolidated ventures

Loss on early extinguishment of debt

Loss before income taxes

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Net loss attributable to common stockholders

Net loss attributable to common stockholders decreased $20.2 million, or 58%, to $14.8 million for the three months ended June 30, 2025, compared to $35.0 million in the prior-year period, primarily due to a $10.3 million decrease in general and administrative expenses, a $4.0 million increase in interest income, and a decrease of $7.2 million in equity in losses from unconsolidated ventures.

The change in equity in losses from unconsolidated ventures, hospitality revenue, rental revenue, and hospitality costs are primarily due to the consolidation of the Tin Building by Jean-Georges as of January 1, 2025.

Net loss attributable to common stockholders increased $0.7 million, or 2%, to $33.2 million for the three months ended September 30, 2025, compared to $32.5 million in the prior-year period, primarily due to a $7.2 million decrease to other income (loss), net, a $4.0 million increase in loss on assets held for sale, a $0.8 million decrease to depreciation and amortization, a $3.0 million decrease in interest expense, and a decrease of $2.0 million in operating costs.

The decrease in equity in losses from unconsolidated ventures and changes in hospitality revenue, rental revenue, and hospitality costs are primarily due to the consolidation of the Tin Building by Jean-Georges as of January 1, 2025.

Items Included in Segment Adjusted EBITDA

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General and Administrative .

General and administrative costs decreased $10.3 million to $8.3 million for the three months ended June 30, 2025, compared to $18.6 million in the prior-year period, primarily due to a $7.9 million decrease in separation costs, as well as reduced labor and administrative expenses incurred for the period.

General and administrative costs decreased $0.4 million to $17.9 million for the three months ended September 30, 2025, compared to $18.3 million in the prior-year period, primarily due to a $8.1 million decrease in separation costs incurred in the prior period, as well as decreased administrative expenses incurred during the three months ended September 30, 2025 as compared to the prior-year period, partially offset by an increase of $11.5 million of leadership transition costs incurred during the three months ended September 30, 2025, with no such costs incurred during the prior-year period.

Interest Income (Expense) .

Interest income increased $4.0 million to $0.8 million for the three months ended June 30, 2025, compared to a net expense of $3.2 million in the prior-year period.

Interest expense decreased $3.0 million to $0.1 million for the three months ended September 30, 2025 compared to $3.1 million in the prior-year period.

This change is primarily due to a $1.1 million increase in interest income, a $0.8 million increase in amounts capitalized to development assets , and a $1.0 million decrease in interest expense on secured mortgages payable .

Comparison of the Six Months Ended June 30, 2025 and 2024

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table sets forth our operating results:

Six Months Ended June 30,

Nine Months Ended September 30,

in thousands except percentages

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Total expenses

Other income, net

Loss on assets held for sale

Other income (loss), net

Operating loss

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Equity in earnings (losses) from unconsolidated ventures

Loss on early extinguishment of debt

Loss before income taxes

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Net loss attributable to common stockholders

Net loss attributable to common stockholders decreased $32.4 million, or 41%, to $46.7 million for the six months ended June 30, 2025, compared to $79.1 million in the prior-year period, primarily due to a $17.1 million decrease in general and administrative expenses and a decrease of $17.6 million in equity in losses from unconsolidated ventures.

Net loss attributable to common stockholders decreased $31.7 million, or (28)%, to $79.9 million for the nine months ended September 30, 2025, compared to $111.6 million in the prior-year period, primarily due to a $17.5 million decrease in general and administrative expenses, a $4.0 million increase in loss on assets held for sale, a $7.2 million decrease in other income (expense), net, a $10.6 million increase in interest income (expense), and a decrease of $5.2 million in operating costs.

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General and Administrative .

General and administrative costs decreased $17.1 million to $18.1 million for the six months ended June 30, 2025, compared to $35.2 million in the prior-year period, primarily due to a $17.1 million decrease in separation costs.

General and administrative costs decreased $17.5 million to $36.0 million for the nine months ended September 30, 2025, compared to $53.5 million in the prior-year period, primarily due to a $17.1 million decrease in separation costs.

Interest Income (Expense) .

Interest income increased $7.6 million to $1.8 million for the six months ended June 30, 2025, compared to a net expense of $5.8 million in the prior-year period.

Interest income increased $10.6 million to $1.7 million for the nine months ended September 30, 2025 compared to a net expense of $8.9 million in the prior-year period.

This change is primarily due to a $4.1 million increase in interest income, a $3.5 million increase in amounts capitalized to development assets, and a $3.0 million decrease in interest expense on secured mortgages payable.

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Three Months Ended

Six Months Ended

Nine Months Ended

Hospitality Adjusted EBITDA (a)

September 30,

in thousands except percentages

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Total operating expenses

Other income, net

Other income (loss), net

Total expenses

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For the three months ended June 30, 2025

Hospitality Adjusted EBITDA increased $1.4 million compared to the prior-year period primarily due to the following:

For the three months ended September 30, 2025

Hospitality Adjusted EBITDA decreased $0.5 million compared to the prior-year period primarily due to the following:

Hospitality Revenue

Hospitality revenue increased $6.1 million to $15.2 million for the three months ended June 30, 2025, compared to $9.1 million in the prior-year period.

This change was primarily due to an increase as a result of consolidating the Tin Building by Jean-Georges in 2025.

Hospitality revenue increased $7.7 million to $16.7 million for the three months ended September 30, 2025, compared to $9.0 million in the prior-year period.

This change was primarily due to an increase as a result of consolidating the Tin Building by Jean-Georges in 2025, an increase as a result of the opening of new hospitality concepts during the period, as well as increased revenue related to events held at the Seaport.

Hospitality Costs

Hospitality costs increased $11.7 million to $23.1 million for the three months ended June 30, 2025, compared to $11.4 million in the prior-year period.

This is primarily resulting from the consolidation of the Tin Building by Jean-Georges in 2025, partially offset by reduced expenses across various restaurants within the Seaport.

Hospitality costs increased $12.1 million to $23.0 million for the three months ended September 30, 2025, compared to $10.9 million in the prior-year period.

This is primarily resulting from the consolidation of the Tin Building by Jean-Georges in 2025.

Equity in Earnings (Losses) from Unconsolidated Ventures

Equity in earnings (losses) from unconsolidated ventures increased $7.2 million to $0.8 million for the three months ended June 30, 2025, compared to losses of $6.4 million in the prior-year period.

Equity in earnings (losses) from unconsolidated ventures increased $8.6 million to earnings of $1.2 million for the three months ended September 30, 2025, compared to losses of $7.5 million in the prior-year period.

This change was primarily due to a $7.9 million decrease in losses as a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, and a $1.1 million increase in earnings for the Lawn Club.

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

Hospitality Adjusted EBITDA losses decreased $2.3 million compared to the prior-year period primarily due to the following:

Hospitality Revenue

Hospitality revenue increased $9.8 million to $22.9 million for the six months ended June 30, 2025, compared to $13.1 million in the prior-year period.

This change was primarily a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, as well as an increase as a result of the opening of new hospitality concepts during the period.

Hospitality revenue increased $17.5 million to $39.6 million for the nine months ended September 30, 2025, compared to $22.1 million in the prior-year period.

This change was primarily a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, an increase as a result of the opening of new hospitality concepts during the period, as well as increased revenue related to events held at the Seaport.

This is partially offset by decreased revenue across various restaurants within the Seaport as a result of reduced operating hours during the period.

Hospitality Costs

Hospitality costs increased $24.3 million to $43.5 million for the six months ended June 30, 2025, compared to $19.2 million in the prior-year period.

The change is primarily due to the consolidation of the Tin Building by Jean-Georges as of January 1, 2025, partially offset by reduced expenses across various restaurants within the Seaport as a result of reduced operating hours during the period.

Hospitality costs increased $36.4 million to $66.6 million for the nine months ended September 30, 2025, compared to $30.1 million in the prior-year period.

The change is primarily due to the consolidation of the Tin Building by Jean-Georges as of January 1, 2025.

Equity in Earnings (Losses) from Unconsolidated Ventures

Equity in earnings (losses) from unconsolidated ventures increased $17.6 million to $1.0 million for the six months ended June 30, 2025, compared to losses of $16.6 million in the prior-year period.

Equity in earnings (losses) from unconsolidated ventures increased $26.2 million to earnings of $2.1 million for the nine months ended September 30, 2025, compared to losses of $24.1 million in the prior-year period.

This change was primarily due to a $24.5 million decrease in losses as a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, a $0.3 million increase in earnings from Jean-Georges Restaurants, and a $1.7 million increase in earnings for the Lawn Club.

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Entertainment Adjusted EBITDA

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

in thousands except percentages

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(b) Entertainment costs include amounts related to intercompany transactions that eliminate in the Company’s Statement of Operations.

For the three months ended June 30, 2025

Entertainment Adjusted EBITDA increased $2.7 million compared to the prior-year period primarily due to the following:

For the three months ended September 30, 2025

Entertainment Adjusted EBITDA decreased $1.8 million compared to the prior-year period primarily due to the following:

Entertainment Revenue

Entertainment revenue increased $3.0 million to $20.1 million for the three months ended June 30, 2025, compared to $17.2 million in the prior-year period.

This change was primarily due to increased concert-related revenue as a result of additional concerts on The Rooftop at Pier 17 compared to the prior year period.

Entertainment revenue decreased $0.7 million to $22.5 million for the three months ended September 30, 2025 compared to $23.2 million in the prior-year period.

This change was primarily due to decreased concert-related revenue as a result of fewer concerts on The Rooftop at Pier 17 compared to the prior year period, partially offset by increased rooftop events revenue and increased revenue at the Aviators.

Entertainment Costs

Entertainment costs increased $0.5 million to $15.4 million for the three months ended June 30, 2025, compared to $14.9 million in the prior-year period.

This change was primarily due to increased costs related to increased concert activity at the Seaport, partially offset by a reduction of the provision for doubtful accounts compared to the prior year period.

For the six months ended June 30, 2025

Entertainment costs increased $0.9 million to $20.5 million for the three months ended September 30, 2025 compared to $19.7 million in the prior-year period.

This change was primarily due to increased costs related to event expenses and operating costs at the Aviators compared to the prior year period.

For the nine months ended September 30, 2025

Entertainment Adjusted EBITDA increased $0.8 million compared to the prior-year period primarily due to the following:

Entertainment Revenue

Entertainment revenue increased $3.6 million to $24.3 million for the six months ended June 30, 2025, compared to $20.7 million in the prior-year period.

Entertainment revenue increased $2.9 million to $46.9 million for the nine months ended September 30, 2025 compared to $44.0 million in the prior-year period.

This change was primarily due to increased concert-related revenue as a result of additional concerts on The Rooftop at Pier 17 compared to the prior year period, as well as increased revenue from the Aviators.

Entertainment Costs

Entertainment costs increased $1.2 million to $22.5 million for the six months ended June 30, 2025, compared to $21.3 million in the prior-year period.

Entertainment costs increased $2.0 million to $43.0 million for the nine months ended September 30, 2025 compared to $41.0 million in the prior-year period.

This change was primarily due to increased costs related to increased concert activity at the Seaport and increased operating expenses at the Aviators.

This is partially offset by a reduction of the provision for doubtful accounts compared to the prior year period.

Landlord Operations

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Three Months Ended

Six Months Ended

Nine Months Ended

Landlord Operations Adjusted EBITDA

September 30,

in thousands except percentages

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Operating costs (b)

Loss on assets held for sale

Total operating expenses

Other income, net

Other income (loss), net

Total expenses

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(b) Operating costs include amounts related to intercompany transactions that eliminate in the Company’s Statement of Operations.

For the three months ended June 30, 2025

Landlord Operations Adjusted EBITDA increased $3.3 million compared to the prior-year period primarily due to the following:

For the three months ended September 30, 2025

Landlord Operations Adjusted EBITDA loss increased $4.3 million compared to the prior-year period primarily due to the following:

Rental Revenue

Rental revenue increased $0.8 million to $9.3 million for the three months ended June 30, 2025, compared to $8.5 million in the prior-year period.

This change was primarily driven by a decrease in reserves affecting rental revenue compared to the prior-year period, recognition of termination fee revenue, and an increase in rent escalation revenue and revenue generated by variable-rent leases.

Rental revenue increased $0.2 million to $8.5 million for the three months ended September 30, 2025, compared to $8.3 million in the prior-year period.

This change was primarily driven by a decrease in reserves affecting rental revenue compared to the prior-year period, recognition of termination fee revenue, partially offset by lease amendment rental adjustments.

Other Revenue

Other revenue decreased $0.2 million to $0.5 million for the three months ended June 30, 2025, compared to $0.7 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Other revenue decreased $0.1 million to $0.5 million for the three months ended September 30, 2025, compared to $0.6 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Loss on Assets Held for Sale

Loss on assets held for sale increased $4.0 million for the three months ended September 30, 2025, compared to zero for the prior-year period, due to a $4.0 million loss recognized to write down the fair value of assets held for sale relating to 250 Water Street.

Operating Costs

Operating costs decreased $2.6 million to $7.7 million for the three months ended June 30, 2025, compared to $10.4 million in the prior year period.

This change was primarily due to decreases in payroll and marketing costs period over period.

For the six months ended June 30, 2025

Landlord Operations Adjusted EBITDA increased $4.1 million compared to the prior-year period primarily due to the following:

Operating costs decreased $1.9 million to $7.5 million for the three months ended September 30, 2025, compared to $9.4 million in the prior year period.

This change was due to decreases in marketing, insurance, and other landlord specific costs period over period.

Other Income (Loss), Net

Other income (loss), net decreased $2.3 million to a loss of $2.2 million for the three months ended September 30, 2025, compared to income of $0.1 million in the prior year period.

This change was primarily due to a $2.1 million loss on disposal of assets.

For the nine months ended September 30, 2025

Landlord Operations Adjusted EBITDA loss increased $0.1 million compared to the prior-year period primarily due to the following:

Rental Revenue

Rental revenue increased $1.2 million to $17.8 million for the six months ended June 30, 2025, compared to $16.6 million in the prior-year period.

This change was primarily driven by a decrease in reserves affecting rental revenue compared to the prior-year period and an increase in rent escalation revenue and revenue generated by variable-rent leases.

Rental revenue increased $1.4 million to $26.2 million for the nine months ended September 30, 2025, compared to $24.9 million in the prior-year period.

Other Revenue

Other revenue decreased $0.2 million to $0.8 million for the three months ended June 30, 2025, compared to $1.0 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Other revenue decreased $0.2 million to $1.4 million for the nine months ended September 30, 2025, compared to $1.6 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Operating Costs

Operating costs decreased $3.1 million to $15.8 million for the six months ended June 30, 2025, compared to $18.9 million in the prior year period.

This change was primarily due to decreases in payroll and marketing costs period over period.

Operating costs decreased $5.0 million to $23.3 million for the nine months ended September 30, 2025, compared to $28.3 million in the prior year period.

This change was primarily due to decreases in marketing, insurance, and other landlord specific costs period over period.

Loss on Assets Held for Sale

Loss on assets held for sale increased $4.0 million for the nine months ended September 30, 2025, compared to zero for the prior-year period, due to a $4.0 million loss recognized to write down the fair value of assets held for sale relating to 250 Water Street.

Other Income (Loss), Net

Other income (loss), net decreased $2.3 million to a loss of $2.2 million for the nine months ended September 30, 2025, compared to income of $0.1 million in the prior year period.

This change was primarily due to a $2.1 million loss on disposal of assets.

Liquidity and Capital Resources

As of June 30, 2025 and December 31, 2024, our cash and cash equivalents were $123.3 million and $165.7 million, respectively.

As of June 30, 2025 and December 31, 2024, our restricted cash was $2.1 million and $2.2 million, respectively.

As of September 30, 2025 and December 31, 2024, our cash and cash equivalents were $106.2 million and $165.7 million, respectively.

As of September 30, 2025 and December 31, 2024, our restricted cash was $10.6 million and $2.2 million, respectively.

Prior to the Separation, we operated as a division within HHH’s consolidated structure, which used a centralized approach to cash management and financing of our operations.

This arrangement is not reflective of the manner in which we would have financed our operations had we been a standalone, publicly traded company during the six months ended June 30, 2024 and during the full year ended December 31, 2024.

Restricted cash is segregated in escrow accounts related to payment of principal and interest on the Company’s outstanding mortgages payable.

This arrangement is not reflective of the manner in which we would have financed our operations had we been a standalone, publicly traded company during the entirety of the nine month period ended September 30, 2024 and during the full year ended December 31, 2024.

Restricted cash is segregated in escrow accounts related to payment of principal and interest on the Company’s outstanding mortgages payable as well as the deposit related to the sale of 250 Water Street.

HHH’s third-party long-term debt and the related interest expense were not allocated to us for any of the periods presented as we were not the legal obligor nor were we a guarantor of such debt.

As of each of June 30, 2025 and December 31, 2024, we had third-party mortgages payable of $101.4 million related to our 250 Water Street development, a variable-rate mortgage which requires monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest.

As of each of June 30, 2025 and December 31, 2024, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development.

As of each of September 30, 2025 and December 31, 2024, we had third-party mortgages payable of $101.4 million related to our 250 Water Street development, a variable-rate mortgage which requires monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest.

As of each of September 30, 2025 and December 31, 2024, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development.

In connection with the Separation, on July 31, 2024, the variable rate mortgage related to 250 Water Street was refinanced, with HHH paying down $53.7 million of the outstanding principal balance and SEG refinancing the remaining $61.3 million at an interest rate of SOFR plus a margin of 4.5% with a scheduled maturity date of July 1, 2029.

On January 1, 2025, the mortgage loan on 250 Water Street was amended, increasing the stated margin rate from 5.0% to 7.0%.

As of September 30, 2025, we classified the mortgage loan on 250 Water Street as held for sale.

Commencing on the date the mortgage was classified as held for sale, we have expensed interest related to the mortgage into Interest income (expense) on the Consolidated Statement of Operations.

See Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report for additional information.

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Our development and redevelopment opportunities are capital intensive and will require significant additional funding, if and when pursued.

Our ability to fund our operating needs and development and redevelopment projects will depend on our future ability to continue to manage cash flow from operating activities, and on our ability to obtain debt or equity financing on acceptable terms.

Our ability to fund our operating needs and development and redevelopment projects will depend on our future ability to continue to manage cash flow from operating activities, and

on our ability to obtain debt or equity financing on acceptable terms.

In addition, we typically must provide completion guarantees to lenders in connection with their financing for our development and redevelopment projects.

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However, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including (1) our credit ratings, including the lowering of any of our credit ratings, or the absence of a credit rating, (2) the liquidity of the overall capital markets, and (3) the current state of the economy and, accordingly, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms in the future, or at all, which could have a negative impact on our liquidity and capital resources.

The cash flows presented in our Unaudited Consolidated and Combined Statement of Cash Flows for the six months ended June 30, 2024 may not be indicative of the cash flows we would have recognized had we operated as a standalone publicly traded company for the period presented.

The cash flows presented in our Unaudited Consolidated and Combined Statement of Cash Flows for the nine months ended September 30, 2024 may not be indicative of the cash flows we would have recognized had we operated as a standalone publicly traded company for the entirety of that period.

The following table sets forth a summary of our cash flows:

Six Months Ended June 30,

Nine Months Ended September 30,

Cash used in operating activities

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Operating Activities

Cash used in operating activities decreased $17.9 million to $21.2 million in the six months ended June 30, 2025, compared to $39.1 million in the prior-year period.

Cash used in operating activities decreased $21.4 million to $26.6 million in the nine months ended September 30, 2025, compared to $48.0 million in the prior-year period.

The decrease primarily relates to changes in cash used in operating activities in each of our segments and decreased general and administrative expenses.

Investing Activities

Cash used in investing activities decreased $14.3 million to $18.8 million in the six months ended June 30, 2025, compared to $33.0 million in the prior-year period.

Cash used in investing activities decreased $61.1 million to $21.1 million in the nine months ended September 30, 2025, compared to $82.2 million in the prior-year period.

The decrease in cash used in investing activities was primarily related to the consolidation of the Tin Building by Jean-Georges.

Financing Activities

Cash provided by financing activities decreased $76.4 million to cash used in financing activities of $2.5 million in the six months ended June 30, 2025, compared to cash provided by financing activities of $73.9 million in the prior-year period, primarily due to the elimination of net transfers provided by HHH to fund the operating and investing activities described above.

Cash provided by financing activities decreased $117.5 million to cash used in financing activities of $3.4 million in the nine months ended September 30, 2025, compared to cash provided by financing activities of $114.1 million in the prior-year period, primarily due to the elimination of net transfers provided by HHH to fund the operating and investing activities described above.

Contractual Obligations

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We have outstanding mortgages payable related to the 250 Water Street development and Las Vegas Ballpark, which are collateralized by certain of the Company’s real estate assets.

A summary of our mortgages payable as of June 30, 2025 and December 31, 2024 can be found in Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

A summary of our mortgages payable as of September 30, 2025 and December 31, 2024 can be found in Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

We lease land or buildings at certain properties from third parties.

Rental payments are expensed as incurred and have been, to the extent applicable, straight-lined over the term of the lease.

Contractual rental expense was $1.7 million and $1.6 million for the three months ended June 30, 2025 and 2024, respectively, and $3.3 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

The amortization of straight-line rents included in the contractual rent amount was $0.6 million for each of the three months ended June 30, 2025 and 2024, and $1.1 million and $1.2 million for each of the six months ended June 30, 2025 and 2024, respectively.

A summary of our lease obligations as of June 30, 2025 and December 31, 2024, can be found in Note 9 – Leases in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

Contractual rental expense was $1.3 million and $1.3 million for the three months ended September 30, 2025 and 2024, respectively, and $4.6 million and $5.0 million for the nine months ended September 30, 2025 and 2024, respectively.

The amortization of straight-line rents included in the contractual rent amount was $0.5 million and $0.2 million for each of the three months ended September 30, 2025 and 2024, and $1.7 million and $1.4 million for each of the nine months ended September 30, 2025 and 2024, respectively.

A summary of our lease obligations as of September 30, 2025 and December 31, 2024, can be found in Note 9 – Leases in the Unaudited Notes to the Consolidated and Combined Financial Statements included in this Quarterly Report.

Critical Accounting Estimates

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Our Unaudited Consolidated and Combined Financial Statements include all of our accounts, including our majority owned and controlled subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary.

If the Company determined it was not the primary beneficiary of a VIE during the six months ended June 30, 2025 and December 31, 2024, the Company did not consolidate the VIE in which it holds a variable interest.

If the Company determined it was not the primary beneficiary of a VIE during the nine months ended September 30, 2025 and December 31, 2024, the Company did not consolidate the VIE in which it holds a variable interest.

Judgments and Uncertainties

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The capitalization of development costs requires judgment, and can directly and materially impact our results of operations because, for example, (i) if we do not capitalize costs that should be capitalized, then our operating expenses would be overstated during the development period, and the subsequent depreciation of the developed real estate would be understated, or (ii) if we capitalize costs that should not be capitalized, then our operating expenses would be understated during the development period, and the subsequent depreciation of the real estate would be overstated.

For the six months ended June 30, 2025 and 2024, we capitalized development costs of $5.2 million and $3.9 million, respectively.

For the nine months ended September 30, 2025 and 2024, we capitalized development costs of $6.5 million and $46.1 million, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis