What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-07 · 286 added, 456 removed, 411 unchanged (64% of the section changed)

1 unchanged sentence

SEAPORT ENTERTAINMENT GROUP INC.

Condensed Consolidated and Combined Balance Sheets

September 30,

Consolidated Balance Sheets

in thousands, except par value amounts

15 unchanged sentences

Preferred stock, $ 0.01 par value, 20,000 shares authorized, none issued or outstanding

Common stock, $ 0.01 par value, 480,000 shares authorized, 5,704 issued and outstanding in 2024 and none issued or outstanding in 2023

Common stock, $ 0.01 par value, 480,000 shares authorized, 12,699 issued and outstanding as of March 31, 2025 and 12,708 issued and outstanding as of December 31, 2024

Additional paid in capital

Accumulated deficit

Net parent investment

Stockholders' equity

Total stockholders' equity

Noncontrolling interest in subsidiary

Total liabilities and equity

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

SEAPORT ENTERTAINMENT GROUP INC.

Condensed Consolidated and Combined Statements of Operations

Three months ended September 30,

Nine months ended September 30,

in thousands except share amounts

Sponsorships, events, and entertainment revenue

Consolidated and Combined Statements of Operations

Three months ended March 31,

in thousands, except per share data

Hospitality revenue

Entertainment revenue

Rental revenue

1 unchanged sentence

Total revenues

Sponsorships, events, and entertainment costs

Hospitality costs

Entertainment costs

Operating costs

Provision for (recovery of) doubtful accounts

General and administrative

1 unchanged sentence

Total expenses

Provision for impairment

Other income (loss), net

Operating income (loss)

Other income, net

Operating loss

Interest income (expense)

Equity in earnings (losses) from unconsolidated ventures

Loss on early extinguishment of debt

Income (loss) before income taxes

Loss before income taxes

Income tax expense (benefit)

2 unchanged sentences

Total weighted average shares

Earnings (loss) per share attributable to common shareholders

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

Net loss per share attributable to common stockholders

The accompanying notes are an integral part of these consolidated and combined financial statements.

SEAPORT ENTERTAINMENT GROUP INC.

Condensed Consolidated and Combined Statements of Cash Flows

Nine months ended September 30,

Consolidated and Combined Statements of Cash Flows

Three months ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Stock compensation expense

(Gain) loss on extinguishment of debt

Impairment charges

Equity in losses from unconsolidated ventures and distributions

Provision for doubtful accounts

Equity in earnings (losses) from unconsolidated ventures, net of distributions and impairment charges

Provision for (recovery of) doubtful accounts

Accounts receivable

Other assets, net

Deferred expenses, net

Other assets and deferred expenses

Accounts payable and other liabilities

3 unchanged sentences

Property development and redevelopment

Cash and restricted cash received upon consolidation of previously unconsolidated entity

Investments in unconsolidated ventures

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from mortgages payable

Deferred financing costs and bond issuance costs

Principal payments on mortgages payable

Taxes paid on restricted stock vesting

Preferred distributions to noncontrolling interest in subsidiary

Net transfers from parent

Cash provided by financing activities

Fees paid in connection with equity issuances

Net investment by Former Parent

Cash (used in) provided by financing activities

Net change in cash, cash equivalents and restricted cash

11 unchanged sentences

Capitalized stock compensation

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

The accompanying notes are an integral part of these consolidated and combined financial statements.

SEAPORT ENTERTAINMENT GROUP INC.

Condensed Consolidated and Combined Statements of Equity

Consolidated and Combined Statements of Equity

Net investment

Additional paid

1 unchanged sentence

Noncontrolling

Balance, June 30, 2024

Net income (loss)

Net transfers from parent

Issuance of noncontrolling interests

Reclassification of net parent investment to common stock and additional paid in capital

Preferred distributions to noncontrolling interest in subsidiary

Stock compensation

Balance, September 30, 2024

Balance, June 30, 2023

Net transfers from parent

Balance, September 30, 2023

by Former Parent

Balance, December 31, 2023

Net investment by Former Parent

Balance, March 31, 2024

Balance, December 31, 2024

Net income (loss)

Net transfers from parent

Issuance of noncontrolling interests

Reclassification of net parent investment to common stock and additional paid in capital

Fees paid in connection with equity issuances

Shares acquired to satisfy minimum required tax withholding on vesting restricted stock

Preferred distributions to noncontrolling interest in subsidiary

Stock compensation

Balance, September 30, 2024

Balance, December 31, 2022

Net transfers from parent

Balance, September 30, 2023

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

Balance, March 31, 2025

The accompanying notes are an integral part of these consolidated and combined financial statements.

SEAPORT ENTERTAINMENT GROUP INC.

Notes to Condensed Consolidated and Combined Financial Statements

Notes to Consolidated and Combined Financial Statements

(Dollars in thousands, unless otherwise stated)

1 unchanged sentence

Description of the Company

On July 31, 2024, the previously announced separation (the “Separation”) of Seaport Entertainment Group Inc.

(“SEG” or the “Company”) from Howard Hughes Holdings Inc.

(“HHH”) was completed.

The Separation was achieved through HHH’s pro rata distribution of 100 % of the then-outstanding shares of SEG common stock to HHH’s stockholders in a distribution intended to be tax-free for U.S.

federal income tax purposes, except for cash received in lieu of fractional shares of common stock (the “Separation”).

Under the terms of the Separation, each stockholder who held HHH common stock as of the close of business on July 29, 2024, the record date for the distribution, received one share of SEG common stock for every nine shares of HHH common stock held as of the close of business on such date.

SEG common stock began trading on the NYSE American stock exchange on August 1, 2024, under the symbol “SEG”.

Prior to the Separation, the Company’s portfolio consisted of the Seaport Entertainment division of Howard Hughes (the “Seaport Entertainment division”), which included HHH’s entertainment-related real estate assets and operations, which are primarily in New York and Las Vegas, including the Seaport neighborhood in Lower Manhattan (the “Seaport”), 250 Water Street, a one-acre development site directly adjacent to the Seaport, a 25 % ownership stake in Jean-Georges Restaurants as well as other partnerships, the Las Vegas Aviators Triple-A Minor League Baseball team (the “Aviators”) and the Las Vegas Ballpark, and an interest in and to 80 % of the air rights above the Fashion Show mall in Las Vegas.

In connection with the Separation, on July 31, 2024, the Company entered into a separation and distribution agreement with HHH.

On this date, the Company also entered into various other agreements that provide a framework for the Company’s relationship with HHH after the Separation, including a transition services agreement, an employee matters agreement, and a tax matters agreement.

These agreements provide for the allocation between the Company and HHH of the assets, employees, services, liabilities, and obligations (including their respective investments, property and employee benefits and tax-related assets and liabilities) of HHH and its subsidiaries attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and HHH after the Separation.

Additionally, HHH contributed capital of $ 23.4 million to the Company prior to the Separation to support the operating, investing, and financing activities of the Company.

Also in connection with the Separation, on July 31, 2024, the Company entered into a revolving credit agreement (the “Revolving Credit Agreement”) with HHH, as lender.

The Revolving Credit Agreement provides for a revolving commitment of $ 5.0 million, with an interest rate of 10.0 % and a term of 1 year , which may be extended for an additional 6 months at the discretion of HHH.

The Revolving Credit Agreement requires the Company to comply with a number of customary covenants and includes customary provisions relating to the occurrence of events of default.

The Company’s obligation under the Revolving Credit Agreement are unsecured, and the agreement provides for the mandatory prepayment of any revolving loans from the net proceeds of the Rights Offering (defined below) and asset sales by the Company.

The Company does not currently have any outstanding borrowings under this agreement, nor were there any outstanding borrowings at the completion of the Rights Offering.

Further in connection with certain restructuring transactions to effectuate the Separation, on July 31, 2024, a subsidiary of HHH that became the Company’s subsidiary in connection with the Separation issued 10,000 shares of 14.000 % Series A preferred stock, par value $ 0.01 per share, with an aggregate liquidation preference of $ 10.0 million (the “Series A Preferred Stock”).

The Series A Preferred Stock ranks senior to the Company’s interest in its subsidiary with respect to dividend rights and rights upon liquidation, dissolution and other considerations.

The Series A Preferred Stock has no maturity date and will remain outstanding unless redeemed.

The Series A Preferred Stock is not redeemable by the Company prior to July 11, 2029 except under limited circumstances intended to preserve certain tax benefits for HHH.

On September 23, 2024, the Company commenced a rights offering (the “Rights Offering”), in the form of a pro rata distribution at no charge to holders of SEG common stock of transferable subscription rights to purchase up to an aggregate of 7,000,000 shares of its common stock at a cash subscription price of $ 25.00 per whole share.

In connection with the Rights Offering, and prior to the Separation, the Company entered into a backstop agreement with Pershing Square, which through investment funds advised by it, is SEG’s largest stockholder.

Pursuant to that agreement Pershing Square agreed to (i) exercise its pro rata subscription right with respect to the Rights Offering at a price of $ 25.00 per share of the Company’s common stock and (ii) purchase any shares not purchased upon the expiration of the Rights Offering at the Rights Offering price, up to $ 175 million in the aggregate.

On October 17, 2024, the Company completed the Rights Offering and issued an aggregate 7.0 million shares of common stock at the subscription price of $ 25.00 per whole share for total gross proceeds of $ 175.0 million.

Principles of Combination and Basis of Presentation

The accompanying Unaudited Condensed Consolidated and Combined Financial Statements represent the assets, liabilities, and operations of Seaport Entertainment Group Inc.

as well as the assets, liabilities and operations related to the Seaport Entertainment division of Howard Hughes prior to the Separation that were transferred to Seaport Entertainment Group Inc.

Seaport Entertainment Group Inc.

(“Seaport Entertainment Group,” “SEG,” the “Company,” “we,” “our” and “us”) is a Delaware corporation and was incorporated in 2024 in connection with, and anticipation of, Howard Hughes Holdings Inc.’s (“HHH” or “Former Parent”) spin-off of its entertainment-related assets in New York City and Las Vegas.

The separation of Seaport Entertainment Group from HHH (the “Separation”), which was achieved through HHH’s pro rata distribution of 100 % of the then-outstanding shares of common stock of Seaport Entertainment Group to holders of HHH common stock, was completed on July 31, 2024.

Following the completion of the Separation, Seaport Entertainment Group became an independent, publicly traded company.

On August 1, 2024, the Company’s common stock began trading on the NYSE American LLC under the symbol “SEG”.

The Company was formed to own, operate and develop a unique collection of assets positioned at the intersection of entertainment and real estate and consists of three operating segments:

(1) Hospitality;

(2) Entertainment (previously Sponsorships, Events, and Entertainment);

and (3) Landlord Operations.

Our assets, which are primarily concentrated in New York City and Las Vegas, include the Seaport in Lower Manhattan (the “Seaport”), a 25 % minority interest in Jean-Georges Restaurants (defined below) as well as other partnerships, the Las Vegas Aviators Triple-A baseball team (the “Aviators”) and the Las Vegas Ballpark and an interest in and to 80 % of the air rights above the Fashion Show mall in Las Vegas.

On July 31, 2024, in connection with the Separation, the Company entered into several agreements with HHH that govern the relationship between HHH and the Company following the Separation, including a separation and distribution agreement, tax matters agreement, employee matters agreement, and transition services agreement.

The Former Parent retained no ownership interest in the Company following the Separation.

Principles of Consolidation and Combination and Basis of Presentation

The accompanying Unaudited Consolidated and Combined Financial Statements represent the assets, liabilities, and operations of Seaport Entertainment Group Inc.

as well as the assets, liabilities, and operations related to the Seaport Entertainment division of HHH prior to the Separation that were transferred to Seaport Entertainment Group Inc.

on July 31, 2024 in connection with the Separation.

The results of Seaport Entertainment Group Inc.

are referred to throughout these Unaudited Consolidated and Combined Financial Statements as “Seaport Entertainment Group,” “SEG,” “the Company,” “we,” “us” or “our”.

The accompanying Unaudited Condensed Consolidated and Combined Financial Statements as of September 30, 2024 and for the nine and three months ended September 30, 2024 have been prepared on a standalone basis derived from the consolidated financial statements and accounting records of SEG from August 1, 2024 to September 30, 2024 and from the combined financial statements and accounting records of HHH for January 1, 2024 to July 31, 2024.

The accompanying Unaudited Condensed Combined Financial Statements as of December 31, 2023 and for the three and nine months ended September 30, 2023 have been prepared on a standalone basis derived from the combined financial statements and accounting records of HHH.

These statements reflect the unaudited condensed consolidated and combined historical results of operations, financial position, and cash flows of Seaport Entertainment Group in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The unaudited interim financial information included in this quarterly report on Form 10-Q (“Quarterly Report”) reflects all adjustments, all of which are of a normal and recurring nature, that management believes are necessary for a fair statement of the results of operations, financial position, equity, and cash flows for the periods presented.

The information included in this Quarterly Report should be read in conjunction with our Combined Financial Statements and accompanying notes included in the Information Statement filed as Exhibit 99.1 to Amendment No.

5 to our Registration Statement on Form 10, as amended, filed with the Securities and Exchange Commission on July 23, 2024.

The Condensed Combined Balance Sheet information at December 31, 2023 was derived from annual audited financial statements but does not include all disclosures required by GAAP.

The results of operations for the quarter and year-to-date period ended September 30, 2024, are not necessarily indicative of the results to be expected for other interim periods or the full year.

The Condensed Combined Balance Sheet as of December 31, 2023, and the Unaudited Condensed Combined Financial Statements for the periods from January 1, 2024 to July 31, 2024 and from January 1, 2023 to September 30, 2023 are presented as if Seaport Entertainment Group had been carved out of HHH.

These Unaudited Condensed Combined Financial Statements include the attribution of certain assets and liabilities that have been held at HHH which are specifically identifiable or attributable to the Company.

The assets and liabilities in the carve-out financial statements have been presented on a historical cost basis.

Prior to the Separation, we operated as part of HHH and not as a standalone company.

Our financial statements for the periods until the Separation on July 31, 2024 are combined financial statements prepared on a carve-out basis derived from the accounting records of HHH.

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.

The accompanying Unaudited Consolidated Financial Statements as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 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 months ended March 31, 2024 have been prepared on a carve-out basis and are derived from the combined financial statements and accounting records of HHH as discussed below.

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

The accompanying Unaudited Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the Company’s financial position, results of operations, and cash flows would have been had the Company operated as a standalone company during all of the periods presented.

The accompanying Unaudited Consolidated and Combined Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial statements.

Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared under GAAP have been condensed or omitted.

In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included.

The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year.

These financial statements should be read in conjunction with our financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Basis of Presentation - Prior to Separation

The Unaudited Combined Financial Statements for the three months ended March 31, 2024 are presented as if the Company had been carved out of HHH.

These Unaudited Combined Financial Statements reflect historical operations attributable to the Company and significant assumptions and allocations as well as attribution of certain assets and liabilities that were held by HHH prior to the Separation which are specifically identifiable or attributable to the Company.

All significant intercompany transactions within the Company have been eliminated.

All transactions between the Company and HHH are considered to be effectively settled in the Unaudited Condensed Consolidated and Combined Financial Statements at the time the transaction is recorded, other than transactions described in Note 13 – Related-Party Transactions that have historically been settled in cash.

The total net effect of the settlement of these intercompany transactions is reflected in the Unaudited Condensed Consolidated and Combined Statements of Cash Flows as a financing

activity and in the Unaudited Condensed Consolidated Balance Sheet as of September 30, 2024 as an adjustment to additional paid-in capital and in the Unaudited Condensed Combined Balance Sheet as of December 31, 2023 as net parent investment.

These Unaudited Condensed Consolidated and Combined Financial Statements include expense allocations for:

(1) certain support functions that are 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, facilities, and risk management;

All transactions between the Company and HHH are considered to be effectively settled in the Unaudited Combined Financial Statements at the time the transaction is recorded, other than transactions described in Note 12 – Related-Party Transactions that have historically been settled in cash.

The total net effect of the settlement of these intercompany transactions is reflected in the Unaudited Combined Statements of Cash Flows for the three months ended March 31, 2024 as a financing activity.

These Unaudited Combined Financial Statements for the three months ended March 31, 2024 include expense allocations for:

(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, facilities, and risk management;

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

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For an additional discussion and quantification of expense allocations, see Note 12 – Related-Party Transactions .

Management believes the assumptions underlying these Unaudited Condensed Consolidated and Combined Financial Statements, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods presented.

Nevertheless, the Unaudited Condensed Consolidated and Combined Financial Statements may not reflect the results of operations, financial position and cash flows had the Company been a standalone company during the periods presented.

Actual costs that the Company may have incurred had it been a standalone company would depend on several factors, including the chosen organization structure, whether functions were outsourced or performed by its employees and strategic decisions made in areas such as executive leadership, corporate infrastructure, and information technology.

Debt obligations and related financing costs of HHH have not been included in the Unaudited Condensed Consolidated and Combined Financial Statements of the Company, because the Company’s business was not a party to the obligations between HHH and the debt holders.

Management believes the assumptions underlying the Unaudited Combined Financial Statements for the three months ended March 31, 2024, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods presented.

Nevertheless, the Unaudited Combined Financial Statements for the three months ended March 31, 2024 may not reflect the results of operations, financial position and cash flows had the Company been a standalone company during the period.

Actual costs that the Company may have incurred had it been a standalone company during the three months ended March 31, 2024 would depend on several factors, including the chosen organization structure, whether functions were outsourced or performed by Company employees and strategic decisions made in areas such as executive leadership, corporate infrastructure, and information technology.

Debt obligations and related financing costs of HHH have not been included in the Unaudited Combined Financial Statements for the three months ended March 31, 2024, because the Company’s business was not a party to the obligations between HHH and the debt holders.

Further, the Company did not guarantee any of HHH’s debt obligations.

The income tax provision in the Unaudited Condensed Consolidated and Combined Statements of Operations has been calculated as if the Company was operating on a standalone basis and filed separate tax returns in the jurisdictions in which it operates.

Prior to the Separation, the income tax provision in the Unaudited Combined Statements of Operations was calculated as if the Company was operating on a standalone basis and filed separate tax returns in the jurisdictions in which it operates.

Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the Company’s actual tax balances prior to or subsequent to the carve-out.

Following the Separation, the Company files its own tax return and the income tax provision reflects the Company’s tax balances that are realizable.

HHH maintains stock-based compensation plans at a corporate level.

The Company’s employees participated in such plans prior to the Separation and the portion of the cost of those plans related to the Company’s employees is included in the Unaudited Condensed Combined Statements of Operations from January 1, 2024 to July 31, 2024 and from January 1, 2023 to December 31, 2023.

However, the Unaudited Condensed Combined Balance Sheets as of December 31, 2023 do not include any equity issued related to stock-based compensation plans.

Prior to the Separation, the Company established the Seaport Entertainment Group Inc.

2024 Equity Incentive Plan, and subsequent to July 31, 2024, the Company issued stock-based awards pursuant to such plan – see Note 11 – Equity .

The equity balance in these Unaudited Condensed Consolidated and Combined Financial Statements as of December 31, 2023 represents the excess of total assets over total liabilities, including intercompany balances between the Company and HHH (net parent investment).

Liquidity and Going Concern

The Company historically managed liquidity risk by effectively managing its operations, capital expenditures, development and redevelopment activities, and cash flows, making use of a central treasury function and other shared services provided by HHH.

Prior to the Separation, the Company did not have, nor did it expect to generate from operations, adequate liquidity to fund its operations for the next twelve months.

To mitigate such conditions, HHH contributed capital of $ 23.4 million to the Company on July 31, 2024, prior to the Separation, to support the operating, investing, and financing activities of the Company, and the Company launched the Rights Offering, pursuant to which the Company received gross proceeds of $ 175.0 million upon its closing on October 17, 2024.

The Company has additional access to liquidity up to $ 5.0 million under the Revolving Credit Agreement.

Management believes that cash on hand, including the $ 175.0 million of gross proceeds from the Rights Offering, and the contribution of $ 23.4 million of cash by HHH pursuant to the separation and distribution agreement will provide sufficient liquidity to meet the Company’s projected obligations for at least twelve months.

The Unaudited Consolidated and Combined Financial Statements for the Company have been prepared on the basis of accounting policies applicable to a going concern.

The going concern basis presumes that for the foreseeable future, funds will be available to finance future operations and that the realization of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The Company’s employees participated in such plans prior to the Separation and the portion of the cost of those plans related to the Company’s employees is included in the Unaudited Combined Statements of Operations for the three months ended March 31, 2024.

Prior to the Separation,

the Company established the Seaport Entertainment Group Inc.

2024 Equity Incentive Plan, and subsequent to July 31, 2024, the Company issued stock-based awards pursuant to such plan.

Net investment by Former Parent in the Unaudited Combined Statement of Equity for the three months ended March 31, 2024 represents HHH’s historical investment in the Company, the net effect of transactions with and allocations from HHH, and the Company’s retained earnings.

All transactions reflected in Net investment by Former Parent have been considered as financing activities for purposes of the Unaudited Combined Statement of Cash Flows for the three months ended March 31, 2024.

For additional information, see “Basis of Presentation - Prior to Separation” above and Note 12 – Related-Party Transactions .

Use of Estimates

4 unchanged sentences

Actual results could differ from these and other estimates.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.

The Company has reclassified an aggregate of $ 1.6 million of Operating costs to Hospitality and Entertainment costs in the amounts of $ 0.5 million and $ 1.1 million, respectively, on our Unaudited Combined Statement of Operations for the three months ended March 31, 2024.

The provision for (recovery of) doubtful accounts has been reclassified into Hospitality costs, Entertainment costs, and Operating costs for all periods presented.

Certain reclassifications were also made to conform the prior period segment reporting to the current period segment presentation.

These reclassifications are not material to the Unaudited Combined Statement of Operations for the three months ended March 31, 2024.

Refer to Note 11 – Segments for additional information regarding the Company’s reportable operating segments.

Segment information is prepared on the same basis that management reviews information for operational decision-making purposes.

Management evaluates the performance of each of the Company’s real estate assets and investments individually and combines such properties and investments into segments based on their economic characteristics and types of revenue streams.

As of January 1, 2025, the Company’s reportable operating segments are as follows:

(i) Hospitality, (ii) Entertainment (previously Sponsorships, Events, and Entertainment), and (iii) Landlord Operations.

Fair Value Measurements

9 unchanged sentences

Restricted cash reflects amounts segregated in escrow accounts in the name of the Company, primarily related to the payment of principal and interest on the Company’s outstanding mortgages payable.

In August 2024, following the final resolution of the 250 Water Street litigation, the escrow amount of $ 40 million related to 250 Water Street was released to the City of New York.

See Note 7 – Commitments and Contingencies for additional information on the 250 Water Street litigation.

Accounts Receivable, net

7 unchanged sentences

As required under ASC 326 Financial Instruments – Credit Losses (ASC 326), the Company assesses its exposure to credit loss related to these receivables on a quarterly basis based on historical collection experience and future expectations by portfolio.

As of September 30, 2024, and December 31, 2023, there were no material past due receivables and there have been no material write-offs or recoveries of amounts previously written-off.

The following table represents the components of Accounts receivable, net of amounts considered uncollectible, in the accompanying Unaudited Condensed Consolidated and Combined Balance Sheets as of:

September 30,

As of March 31, 2025 and December 31, 2024, there were no material past due receivables and there have been no material write-offs or recoveries of amounts previously written-off.

The following table represents the components of Accounts receivable, net of amounts considered uncollectible, in the accompanying Unaudited Consolidated Balance Sheets as of:

Tenant receivables

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Accounts receivable, net (a)

(a) As of September 30, 2024, and December 31, 2023, the total reserve balance was $ 3.5 million and $ 1.4 million, respectively.

The following table summarizes the impacts of the collectability reserves in the accompanying Unaudited Condensed Consolidated and Combined Statements of Operations:

Three months ended September 30,

Nine months ended September 30,

(a) As of March 31, 2025 and December 31, 2024, the total reserve balance was $ 1.4 million and $ 2.6 million, respectively.

The following table summarizes the impacts of the collectability reserves in the accompanying Unaudited Consolidated and Combined Statements of Operations:

Three months ended March 31,

Statements of Operations Location

Rental revenue

Provision for (recovery of) doubtful accounts

Hospitality costs

Entertainment costs

Operating costs

Total (income) expense impact

As of September 30, 2024, two related parties had accounts receivable balances of $ 2.3 million and $ 1.4 million, which represented approximately 24.5 % and 15.1 % of the Company’s accounts receivable, respectively.

See Note 13 – Related-Party Transactions for additional information.

As of December 31, 2023, two customers had an accounts receivable balance of $ 2.1 million and $ 1.7 million, which represented approximately 15.1 % and 12.2 % of the Company’s accounts receivable balance, respectively.

Additionally, one related party had an accounts receivable balance of $ 3.1 million, which represented approximately 22.8 % of the Company’s accounts receivable.

As of March 31, 2025, one related party had an accounts receivable balance of $ 1.5 million, which represented approximately 13.7 % of the Company’s accounts receivable.

See Note 12 – Related-Party Transactions for additional information.

Deferred Offering Costs

Deferred offering costs represent amounts paid for legal, accounting, consulting and other offering expenses in conjunction with the proposed or actual offering of securities and are recorded as a reduction against the gross proceeds of the offering.

Deferred offering costs are included as part of other assets in the Unaudited Condensed Consolidated and Combined Balance Sheets and netted against additional paid-in capital upon closing of the offering.

As of December 31, 2024, no customer accounted for greater than 10% of the Company’s accounts receivable.

Stock-Based Compensation

Prior to the Separation on July 31, 2024, certain employees of the Company participated in HHH’s stock-based compensation plans.

Stock-based compensation expense was attributed to the Company based on the awards and terms previously granted to those employees and was recorded in the Unaudited Condensed Consolidated and Combined Statements of Operations.

Stock-based compensation expense was attributed to the Company based on the awards and terms previously granted to those employees and was recorded in the Unaudited Consolidated and Combined Statements of Operations.

Subsequent to the Separation, the Company issued stock options, restricted stock and restricted stock units.

for the award, except for shares of stock granted to non-employee directors which, unless otherwise provided under the applicable award agreement, are fully vested, and are expensed at the grant date.

Stock-based compensation expense is measured based on the grant date fair value of those awards and is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award, except for shares of stock granted to non-employee directors which, unless otherwise provided under the applicable award agreement, are fully vested, and are expensed at the grant date.

Stock-based compensation expense is based on awards outstanding, and forfeitures are recognized as they occur.

Stock-based compensation expense is included as part of expenses in the accompanying Unaudited Condensed Consolidated and Combined Statements of Operations.

Stock-based compensation expense is included as part of General and administrative expenses in the accompanying Unaudited Consolidated and Combined Statements of Operations.

Earnings (Loss) per Share

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Revenue Recognition and Related Matters

Sponsorships, Events, and Entertainment Revenue

Sponsorships, events, and entertainment revenue related to contracts with customers is generally comprised of baseball-related ticket sales, concert-related ticket sales, events-related service revenue, concession sales, and advertising and sponsorships revenue.

Hospitality Revenue

Hospitality revenue is generated by the Seaport restaurants and the Tin Building by Jean-Georges through customer transactions or through agreements with sponsors.

The customer transaction price is the net amount collected from the customer and is recognized as revenue at a point in time when the food or beverage is provided to the customer.

These transactions are ordinarily settled with cash or credit card over a short period of time.

Sponsorship related revenue is recognized on a straight-line basis over the contractual period of time.

Entertainment Revenue

Entertainment revenue related to contracts with customers is generally comprised of baseball-related ticket sales, concert-related ticket sales, events-related service revenue, concession sales, and related advertising and sponsorships revenue.

Baseball season ticket sales are recognized over time as games take place.

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Consideration terms for these services are fixed in each respective agreement and paid in accordance with individual contractual terms.

Sponsorships, events, and entertainment revenue is disclosed net of any refunds, which are settled and recorded at the time of an event cancellation.

Entertainment revenue is disclosed net of any refunds, which are settled and recorded at the time of an event cancellation.

The Company does not accrue or estimate any obligations related to refunds.

Hospitality Revenue

Hospitality revenue is generated by the Seaport restaurants.

The transaction price is the net amount collected from the customer and is recognized as revenue at a point in time when the food or beverage is provided to the customer.

These transactions are ordinarily settled with cash or credit card over a short period of time.

Rental Revenue

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When the Company is the owner of the tenant improvements, rental revenue begins when the improvements are substantially complete.

When the tenant is the owner of the tenant improvements, any tenant allowance funded by the Company is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term.

When the tenant is the owner of the tenant improvements, any tenant

allowance funded by the Company is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term.

Other Revenue

Other revenue is comprised of parking revenue and other miscellaneous revenue.

Other revenue is recognized at a point in time, at the time of sale when payment is received, and the customer receives the good or service.

In all cases, the transaction prices are fixed, stipulated in the contract or product, and representative in each case of a single performance obligation.

Other revenue is comprised of sponsorship agreement revenue on our Landlord Operations assets and other miscellaneous revenue.

Sponsorship related revenue is recognized on a straight-line basis over the contractual period of time.

Other miscellaneous revenue is recognized at a point in time, at the time of sale when payment is received, and the customer receives the good or service.

Recently Issued or Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2023-07, Improvement to Reportable Segment Disclosures.

This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses.

The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily

computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts.

It does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the guidance and its impact on the Company’s Condensed Consolidated and Combined Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes.

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The amendments in this ASU are effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the guidance and its impact on the Company’s Condensed Consolidated and Combined Financial Statements.

The Company is currently evaluating the guidance and its impact on the Company’s Unaudited Consolidated and Combined Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods.

The amendments in this ASU will become effective for fiscal year 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted.

The Company will plan to adopt the standard when it becomes effective beginning with the fiscal year 2027 annual financial statements, and is currently evaluating the impact this guidance will have on the disclosures included in the Unaudited Notes to the Consolidated and Combined Financial Statements.

Investments in Unconsolidated Ventures

In the normal course of business, the Company enters into partnerships and ventures with an emphasis on investments associated with businesses that operate at the Company’s real estate assets and other hospitality and entertainment-related investments.

The Company does not consolidate the investments in the periods presented below as it does not have a controlling financial interest in these ventures.

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Carrying Value

Share of Earnings (Losses)/ Dividends

Share of Earnings (Losses)/ Distributions

Three months ended

Nine months ended

September 30,

in thousands except percentages

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The Lawn Club (b)

Tin Building by Jean-Georges (b) (d) (f)

Tin Building by Jean-Georges (b) (c)

Jean-Georges Restaurants

Other equity investments (e)

Investments in unconsolidated ventures

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For these investments, the Company recognizes income or loss based on the venture’s distribution priorities, which could fluctuate over time and may be different from its stated ownership or final profit-sharing interest.

(c) On January 1, 2025, the Company became the primary beneficiary of the Tin Building by Jean-Georges and began consolidating the Company’s investment in this venture into the Company’s financial statements.

Refer to discussion below for additional details.

(d) Classified as a VIE;

however, the Company is not the primary beneficiary and accounts for its investment in accordance with the equity method.

Refer to discussion below for additional information.

(e) Other equity investments represent investments not accounted for under the equity method.

As of September 30, 2024, Other equity investments consist of $ 10.0 million of warrants, which represents cash paid by the Company for the option to acquire additional ownership interest in Jean-Georges Restaurants.

The Company elected the measurement

alternative as this investment does not have readily determinable fair value.

There was no impairment , or upward or downward adjustment to the carrying amount of this security either during the current year, or cumulatively.

Refer to discussion below for additional detail.

(f) These investments were impaired as part of the Seaport impairment recognized in 2023.

Refer to specific investment discussion below and Note 3 – Impairment for additional information.

The Lawn Club

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This concept opened in the fourth quarter of 2023.

Under the terms of the initial agreement, the Company funded 80 % of the cost to construct the restaurant, and Endorphin Ventures contributed the remaining 20 %.

In October 2023, the members executed an amended LLC agreement, in which the Company will fund 90 % of any remaining capital requirements, and Endorphin Ventures will contribute 10 %.

Under the terms of the initial LLC agreement, the Company funded 80 % of the cost to construct the restaurant, and Endorphin Ventures contributed the remaining 20 %.

In October 2023, the members executed an amended LLC agreement, pursuant to which the Company agreed to fund 90 % of any remaining capital requirements for the venture, and Endorphin Ventures agreed to fund 10 % of any remaining capital requirements for the venture.

The Company recognizes its share of income or loss based on the joint venture distribution priorities, which could fluctuate over time.

Upon the return of each member’s contributed capital and a preferred return to the Company, distributions and recognition of income or loss will be allocated to the Company based on its final profit-sharing interest.

The Company also entered into a lease agreement with HHC Lawn Games, LLC pursuant to which the Company agreed to lease 20,000 square feet of the Fulton Market Building to this venture.

In 2016, the Company formed Pier 17 Restaurant C101, LLC (“Ssäm Bar”) with MomoPier, LLC (“Momofuku”) to construct and operate a restaurant and bar at Pier 17 in the Seaport, which opened in 2019.

The Company recognized its share of income or loss based on the joint venture’s distribution priorities, which could fluctuate over time.

The Ssäm Bar restaurant closed during the third quarter of 2023, and the venture was liquidated in May 2024.

The Company received a liquidating distribution of its share of the venture’s remaining assets during the third quarter of 2024.

The Company also entered into a lease agreement with HHC Lawn Games, LLC pursuant to which the Company agreed to lease approximately 27,000 square feet of the Fulton Market Building to this venture.

Tin Building by Jean-Georges

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The Fulton Partner is a wholly owned subsidiary of Jean-Georges Restaurants.

The Company purchased a 25 % interest in Jean-George Restaurants in March 2022 as discussed below.

The Company purchased a 25 % interest in Jean-Georges Restaurants in March 2022 as discussed below.

The Company owns 100 % of the Tin Building and leased 100 % of the space to the Tin Building by Jean-Georges joint venture.

Throughout this information statement, references to the Tin Building relate to the Company’s 100 % owned landlord operations and references to the Tin Building by Jean-Georges refer to the hospitality business in which the Company has an equity ownership interest.

Throughout these Unaudited Notes to the Consolidated and Combined Financial Statements, references to the Tin Building relate to the Company’s 100 % owned landlord operations and references to the Tin Building by Jean-Georges refer to the hospitality business in which the Company has an equity ownership interest.

The Company, as landlord, funded 100 % of the development and construction of the Tin Building.

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Upon return of the Company’s contributed capital and a preferred return to the Company, distribution and recognition of income or loss will be allocated to the Company based on its final profit-sharing interest.

As of September 30, 2024, the Tin Building by Jean-Georges is classified as a VIE because the equity holders, as a group, lack the characteristics of a controlling financial interest.

The Company further concluded that it is not the primary beneficiary of the VIE as it does not have the power to direct the restaurant-related activities that most significantly impact its economic performance.

As the Company is unable to quantify the maximum amount of additional capital contributions that may be funded in the future associated with this investment, the Company’s maximum exposure to loss is currently equal to the $ 4.3 million carrying value of the investment as of September 30, 2024.

The Company funded capital

contributions of $ 16.8 million for the nine months ended September 30, 2024, and $ 48.1 million for the year ended December 31, 2023.

The Company’s investment in the Tin Building by Jean-Georges meets the threshold for disclosure of summarized financials for the nine months ended September 30, 2024, and 2023.

Relevant financial statement information is summarized as follows:

September 30,

Balance Sheet

The Tin Building by Jean-Georges was previously classified as a variable interest entity.

As of January 1, 2025, in conjunction with the internalization of food and beverage operations, the Company, through employing the management team personnel and directing the operating activities that most significantly impact the Tin Building by Jean-Georges’ economic performance, became the primary beneficiary of the Tin Building by Jean-Georges and began consolidating the Tin Building by Jean-Georges into the Company’s financial statements.

In accordance with ASC 805, identifiable assets and liabilities assumed were recorded at their estimated fair values on the date of consolidation.

The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change.

We will continue to obtain information to assist in determining the fair value of net assets assumed during the measurement period.

The Company expects to finalize these amounts as soon as possible but no later than one

year from the date of consolidation.

The table below presents the preliminary allocation to the estimated fair value of identifiable assets and liabilities assumed:

Preliminary Purchase Price Allocation

Building and equipment

Cash and cash equivalents

Accounts receivable, net

Other assets, net

Accounts payable and other liabilities

Total liabilities

Net assets assumed

The unaudited supplemental pro forma revenues and net losses of the Company were $ 18.2 million and $ 44.1 million, respectively, for the three months ended March 31 2024, and have been prepared for the Company as if the Tin Building by Jean-Georges was consolidated by the Company on January 1, 2024.

The most significant adjustments in the pro forma financial information includes the elimination of rents between the Company and the joint venture and the elimination of the previous equity method investment in the joint venture as though the consolidation had occurred on January 1, 2024.

The unaudited pro forma financial information above is provided for informational purposes only and is not necessarily indicative of what actual results of operations would have been had the consolidation and related transactions been completed as of January 1, 2024 or that may be achieved in the future.

The Company’s investment in the Tin Building by Jean-Georges meets the threshold for disclosure of summarized income statement information for the three months ended March 31, 2024.

Relevant financial statement information is summarized as follows:

Three months ended

Nine months ended

September 30,

Income Statement

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Should the warrant agreement be exercised by the Company, the $ 10.0 million will be credited against the aggregate exercise price of the warrants.

Per the warrant agreement, the $ 10.0 million is to be used for working capital of Jean-Georges Restaurants.

The warrant became exercisable on March 2, 2022, subject to automatic exercise in the event of dissolution or liquidation and will expire on March 2, 2026.

As of September 30, 2024, this warrant had not been exercised.

The Company elected the measurement alternative for this purchase option as the equity security does not have a readily determinable fair value.

As such, the investment is measured at cost, less any identified impairment charges.

Creative Culinary Management Company, LLC (“CCMC”), a wholly owned subsidiary of Jean-Georges Restaurants, provides management services for certain retail and food and beverage businesses that the Company owns, either wholly or through partnerships with third parties.

Pursuant to the various management agreements, CCMC is responsible for employment and supervision of all employees providing services for the food and beverage operations and restaurant as well as the day-to-day operations and accounting for the food and beverage operations.

The Company reviews its long-lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Impairment or disposal of long-lived assets in accordance with ASC 360 Property, Plant, and Equipment (ASC 360) requires that if impairment indicators exist and expected undiscounted cash flows generated by the asset over an anticipated holding period are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of the asset to its fair value.

The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above- or below-market rate of return.

The Company evaluates each investment in an unconsolidated venture discussed in Note 2 – Investments in Unconsolidated Ventures periodically for recoverability and valuation declines that are other-than-temporary.

If the decrease in value of an investment is deemed to be other-than-temporary, the investment is reduced to its estimated fair value.

During the three months ended September 30, 2023, the Company recorded a $ 709.5 million impairment charge related to Seaport properties in the Landlord Operations segment and investments in the Hospitality segment.

The Company recognized the impairment due to decreases in estimated future cash flows due to significant uncertainty of future performance as stabilization and profitability are taking longer than expected, pressure on the current cost structure, decreased demand for office space, as well as an increase in the capitalization rate and a decrease in restaurant multiples used to evaluate future cash flows.

The Company used a discounted cash flow analysis to determine fair value, with capitalization rates ranging from 5.5 % to 6.75 %, discount rates ranging from 8.5 % to 13.3 %, and restaurant multiples ranging from 8.3 to 11.8 .

The assumptions and estimates included in the Company’s impairment analysis require significant judgment about future events, market conditions, and financial performance.

Actual results may differ from these assumptions.

There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future.

There were no impairments recorded in the nine months ended September 30, 2024.

The following table summarizes the pre-tax impacts of the impairment mentioned above to the Combined Statements of Operations for the year ended December 31, 2023.

Statements of Operations Line Item

Building and equipment

Provision for impairment

Net investments in real estate

Investments in unconsolidated ventures

Equity in losses from unconsolidated ventures

Total impairment (a)

(a) Impairment charges relate to the Company’s investments in Jean-Georges Restaurants, Ss äm Bar, and Tin Building by Jean-Georges unconsolidated ventures.

See Note 2 – Investments in Unconsolidated Ventures for additional information.

As of March 31, 2025, this warrant had not been exercised and has a carrying value of zero .

Creative Culinary Management Company, LLC (“CCMC”), a wholly owned indirect subsidiary of Jean-Georges Restaurants, provides management services for certain retail and food and beverage businesses that the Company owns, either wholly or through partnerships with third parties.

Pursuant to the various management agreements, CCMC is responsible for employment and/or supervision of all employees providing services for the food and beverage operations and restaurant as well as the day-to-day operations and accounting for the food and beverage operations.

Effective January 1, 2025, as the Company’s initial step to internalize food and beverage operations at most of its wholly owned and joint venture-owned restaurants at the Seaport, the Company hired and onboarded employees of CCMC and entered into a services agreement with CCMC to provide the necessary employees and services for CCMC to perform CCMC’s responsibilities under the various management agreements.

Other Assets and Liabilities

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The following table summarizes the significant components of Other assets, net:

September 30,

Security and other deposits

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The following table summarizes the significant components of Accounts payable and other liabilities:

September 30,

Deferred income

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Mortgages payable, net are summarized as follows:

September 30,

Fixed-rate debt

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Mortgages payable, net

As of September 30, 2024, land, buildings and equipment, developments, and other collateral with an aggregate net book value of $ 237.8 million have been pledged as collateral for the Company’s debt obligations.

Secured mortgages payable are without recourse to the Company at September 30, 2024.

As of March 31, 2025, land, buildings and equipment, developments, and other collateral with an aggregate net book value of $ 241.0 million have been pledged as collateral for the Company’s debt obligations.

Secured mortgages payable are without recourse to the Company at March 31, 2025.

Secured Mortgages Payable

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The Company’s fixed-rate debt obligation requires semi-annual installments of principal and interest, and the Company’s variable-rate debt requires monthly installments of only interest.

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

As of March 31, 2025, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development.

The following table summarizes the Company’s secured mortgages payable:

September 30, 2024

March 31, 2025

December 31, 2024

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Variable rate (b) (c)

September 1, 2026

Secured mortgages payable

(a) The Company has one fixed-rate debt obligation as of September 30, 2024, and December 31, 2023.

(a) The Company has one fixed-rate debt obligation as of March 31, 2025 and December 31, 2024.

The interest rate presented is based upon the coupon rate of the debt.

(b) The Company has one variable-rate debt obligation as of September 30, 2024, and December 31, 2023.

The interest rate presented is based on the applicable reference interest rate as of September 30, 2024, and December 31, 2023.

(b) The Company has one variable-rate debt obligation as of March 31, 2025 and December 31, 2024.

The interest rate presented is based on the applicable reference interest rate as of March 31, 2025 and December 31, 2024.

At September 30, 2024, the assumed rate of the indebtedness associated with our variable-rate debt obligation is based on SOFR + 4.5 % , which is the combination of the interest rates on two instruments:

At March 31, 2025, the assumed rate of the indebtedness associated with our variable-rate debt obligation is based on SOFR + 4.5 % , which is the combination of the interest rates on two instruments:

(i) the variable-rate debt obligation, pursuant to which the Company is obligated to pay the lender an amount equal to SOFR + 7.0 % , and (ii) the total return swap, pursuant to which the Company is entitled to receive 2.5 % from the lender.

The cash flows from this total return swap does not vary based on any underlying and there is no net settlement, as such, it is not considered to meet the criteria of ASC 815 “Derivatives and Hedging” and determined to not be a derivative.

During the nine months ended September 30, 2024, the Company’s mortgage activity included a $ 0.9 million repayment of our fixed rate debt.

In connection with and prior to 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 % and scheduled maturity date of July 1, 2029.

The cash flows from this total return swap do not vary based on any underlying variable and there is no net settlement, as such, it is not considered to meet the criteria of ASC 815 Derivatives and Hedging and determined to not be a derivative.

On January 1, 2025, the mortgage loan on the Company’s 250 Water Street development (“250 Water Street”) was amended to increase the margin from 5.0 % to 7.0 %.

The Company is entitled to receive this 2.0 % increase from the lender by way of the total return swap, resulting in no change in cash flows to the Company.

ASC 820 Fair Value Measurement (ASC 820) emphasizes that fair value is a market-based measurement that should be determined using assumptions market participants would use in pricing an asset or liability.

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The following table presents the fair value measurement hierarchy levels required under ASC 820 for the estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis:

September 30, 2024

March 31, 2025

December 31, 2024

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Variable-rate debt (b)

(a) Accounts receivable, net is shown net of an allowance of $ 3.5 million at September 30, 2024 and $ 1.4 million at December 31, 2023, respectively.

(a) Accounts receivable, net is shown net of an allowance of $ 1.4 million at March 31, 2025 and $ 2.6 million at December 31, 2024.

Refer to Note 1 - Summary of Significant Accounting Policies for additional information on the allowance.

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The fair value of fixed-rate debt in the table above was estimated based on a discounted future cash payment model, which includes risk premiums and risk-free rates derived from the SOFR or U.S.

Treasury obligation interest rates as of September 30, 2024.

Treasury obligation interest rates as of March 31, 2025.

Refer to Note 4 - Mortgages Payable, Net for additional information.

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In the normal course of business, from time to time, the Company is involved in legal proceedings relating to the ownership and operations of its properties.

In management’s opinion, the liabilities, if any, that may ultimately result from normal course of business legal actions are not expected to have a material effect on the Company’s consolidated and combined financial position, results of operations, or liquidity.

250 Water Street

In 2021, the Company received the necessary approvals for its 250 Water Street development project, which includes a mixed-use development with affordable and market-rate apartments, community-oriented spaces, and office space.

In May 2021, the Company received approval from the New York City Landmarks Preservation Commission (“LPC”) on its proposed design for the 250 Water Street site.

The Company received final approvals in December 2021 through the New York City Uniform Land Use Review Procedure known as ULURP, which allowed the necessary transfer of development rights to the parking lot site.

The Company began initial foundation and voluntary site remediation work in the second quarter of 2022 and completed remediation work in December 2023.

The Company has prevailed in various lawsuits filed in 2021 and 2022 challenging the development approvals in order to prevent construction of this project.

A separate lawsuit was filed in July 2022 again challenging the Landmarks Preservation Commission approval.

In January 2023, a Court ruled in favor of the petitioners vacating the Certificate of Appropriateness (“COA”) issued by the

The Company immediately appealed this decision to the New York State Supreme Court’s Appellate Division and on June 6, 2023, an Appellate Division panel of five judges unanimously reversed the lower Court’s decision, reinstating the COA.

Subsequently, on June 29, 2023, petitioners filed a motion requesting reargument or, in the alternative, permission to appeal the decision of the Appellate Division to the New York State Court of Appeals.

On August 31, 2023, the Appellate Division denied petitioners’ motion in full.

Subsequently, petitioners filed a motion in the Court of Appeals for permission to appeal to that court.

On May 21, 2024, the Court of Appeals denied this motion.

The petitioners have no options for further appeal and the judgment is final.

In management’s opinion, the liabilities, if any, that may ultimately result from normal course of business legal actions are not expected to have a material effect on the Company’s Unaudited Consolidated and Combined Financial Statements or liquidity.

Operating Leases

The Company leases land or buildings at certain properties from third parties, which are recorded in Operating lease right-of-use assets, net, and Operating lease obligations on the Unaudited Condensed Consolidated and Combined Balance Sheets.

See Note 10 – Leases for additional information.

Contractual rental expense was $ 1.3 million and $ 1.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 5.0 million and $ 5.6 million or the nine months ended September 30, 2024, and 2023, respectively.

The amortization of straight‑line rents included in the contractual rent amount was $ 0.2 million and $ 0.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 1.4 million and $ 1.9 million for the nine months ended September 30, 2024, and 2023, respectively.

Leases for additional information.

Contractual rental expense was $ 1.6 million and $ 2.1 million for the three months ended March 31, 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 March 31, 2025 and 2024.

The Company’s tax provision for interim periods is determined using an estimate of its annual current and deferred effective tax rates, adjusted for discrete items.

The Company generated operating losses in the interim periods presented.

The income tax benefit recognized related to this loss was zero for the three and nine months ended September 30, 2024, and 2023, after an assessment of the available positive and negative evidence, which causes the Company’s effective tax rate to deviate from the federal statutory rate.

The income tax benefit recognized related to this loss was zero for each of the three months ended March 31, 2025 and 2024, after an assessment of the available positive and negative evidence, which causes the Company’s effective tax rate to deviate from the federal statutory rate.

Revenues from contracts with customers (excluding lease-related revenues) are recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following presents the Company’s revenues disaggregated by revenue source:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Revenues from contracts with customers

Recognized at a point in time or over time

Sponsorships, events, and entertainment revenue

Other revenue

Recognized at a point in time

Hospitality revenue

Entertainment revenue

Other revenue

Rental and lease-related revenues

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Consideration received during the period

Balance at September 30, 2023

Balance at March 31, 2024

Balance at December 31, 2024

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Consideration received during the period

Balance at September 30, 2024

Remaining Unsatisfied Performance Obligation

Balance at March 31, 2025

Remaining Unsatisfied Performance Obligations

The Company’s remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts executed and in progress.

These performance obligations primarily relate to the completion of the 2025 Aviators baseball season and 2025 concert series, as well as performance under various sponsorship agreements.

The aggregate amount of the transaction price allocated to the Company’s remaining unsatisfied performance obligations from contracts with customers as of September 30, 2024, is $ 17.5 million.

The aggregate amount of the transaction price allocated to the Company’s remaining unsatisfied performance obligations from contracts with customers as of March 31, 2025 is $ 22.9 million.

The Company expects to recognize this amount as revenue over the following periods:

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The Company’s remaining performance obligations are adjusted to reflect any known contract cancellations, revisions to customer agreements, and deferrals, as appropriate.

During the three months ended September 30, 2024, and 2023, no customers accounted for greater than 10% of the Company’s revenue.

During the nine months ended September 30, 2024, revenue from one customer accounted for approximately 10.1 % of the Company’s total revenue, respectively, through a related-party transaction.

See Note 13 – Related-Party Transactions for additional information.

During the nine months ended September 30, 2023, no customers accounted for greater than 10% of the Company’s revenue.

During the three months ended March 31, 2025, no customer accounted for 10 % or more of the Company’s total revenue.

During the three months ended March 31, 2024, revenue from one customer accounted for approximately 19 % of the Company’s total revenue.

Lessee Arrangements

The Company determines whether an arrangement is a lease at inception.

Operating leases are included in Operating lease right-of-use assets, net, and Operating lease obligations on the Unaudited Condensed Consolidated and Combined Balance Sheets.

Operating leases are included in Operating lease right-of-use assets, net, and Operating lease obligations on the Unaudited Consolidated Balance Sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

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The Company does not have any finance leases.

The Company elected the practical expedient to not separate lease components from non-lease components of its lease agreements for all classes

of underlying assets.

The Company elected the practical expedient to not separate lease components from non-lease components of its lease agreements for all classes of underlying assets.

Certain of the Company’s lease agreements include non-lease components such as fixed common area maintenance charges.

9 unchanged sentences

The Company’s leased assets and liabilities are as follows:

September 30,

Operating lease right-of-use assets, net

2 unchanged sentences

Three months ended

Nine months ended

September 30,

Operating lease cost

1 unchanged sentence

Total lease cost

Future minimum lease payments as of September 30, 2024, are as follows:

Future minimum lease payments as of March 31, 2025, are as follows:

Operating Leases

4 unchanged sentences

Other information related to the Company’s lessee agreements is as follows:

Supplemental Unaudited Condensed Combined Statements of Cash Flows Information

Nine months ended September 30,

Supplemental Unaudited Consolidated and Combined Statements of Cash Flows Information

Three months ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows on operating leases

September 30,

Other Information

5 unchanged sentences

The Company receives rental income from the leasing of retail, office, multi-family, and other space under operating leases, as well as certain variable tenant recoveries.

Operating leases for our retail, office, and other properties are with a variety of tenants and have a remaining average term of approximately seven years .

Operating leases for our retail, office, and other properties are with a variety of tenants and have a remaining average term of approximately six years .

Lease terms generally vary among tenants and may include early termination options, extension options, and fixed rental rate increases or rental rate increases based on an index.

Multi-family leases generally have a term of 12 months or less.

The Company elected the practical expedient to not separate lease components from non-lease components of its lease agreements for all classes of underlying assets.

Minimum rent revenues related to operating leases are as follows:

Three months ended September 30,

Nine months ended September 30,

Total minimum rent payments

Total future minimum rents associated with operating leases are as follows as of September 30, 2024:

The Company elected the practical expedient

to not separate lease components from non-lease components of its lease agreements for all classes of underlying assets.

Minimum rent revenues related to commenced operating leases are as follows:

Three months ended March 31,

Total minimum rent revenues

Total future minimum rents associated with operating leases are as follows as of March 31, 2025:

Total Minimum

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Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants.

Minimum rent revenues reported on the Unaudited Condensed Consolidated and Combined Statements of Operations also include amortization related to above and below‑market tenant leases on acquired properties.

Stock-Based Compensation

Prior to and in connection with the Separation, the Company established the Seaport Entertainment Group Inc.

2024 Equity Incentive Plan (the “Plan”) with the purpose of attracting, retaining and motivating officers, employees, non-employee directors, and consultants providing services to the Company and promoting the success of the Company’s business by providing the participants of the Plan with equity incentives.

In addition, the Plan is intended to govern awards granted pursuant to or resulting from the adjustment and/or conversion of awards originally granted prior to the Separation under the Howard Hughes Corporation 2020 Equity Incentive Plan and under the Howard Hughes Corporation Amended and Restated 2010 Incentive Plan in accordance with the terms of the employee matters agreement entered into in connection with the Separation.

The Plan was approved prior to the Separation by HHH, at the time the Company’s sole stockholder, and is administered by the compensation committee of the board of directors (the “Committee”).

The Plan authorizes the Committee to grant stock-based compensation awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards, to eligible participants.

The Committee has the full power to interpret and administer the Plan and award agreements, subject to the limitations set forth in the Plan.

A total of 6.8 million shares of Class A common stock were initially reserved for issuance under the Plan.

At September 30, 2024, approximately 5.9 million shares remained available to be issued.

Restricted Shares and Restricted Stock Unit Awards

In connection with the Separation, shares of HHH restricted stock subject to time-based and performance-based vesting that were previously awarded to certain grantees under the Howard Hughes Corporation 2020 Equity Incentive Plan or the Howard Hughes Corporation Amended and Restated 2010 Incentive Plan were adjusted and converted into shares of restricted stock of the Company that vest in the same percentages, on the same dates and schedule as any shares of HHH restricted stock held by such grantees that were unvested and outstanding immediately prior to the Separation.

This conversion resulted in the issuance of total restricted stock awards subject to time-based vesting of 69,997 to non-executive employees and 111,682 to executive officers with fair values of $ 2.0 million and $ 3.2 million, respectively.

Also in August 2024, the Company separately issued 76,641 restricted stock unit awards subject to time-based vesting to non-executive employees and a consultant and 168,660 restricted stock unit awards subject to time-based vesting to executive officers, with fair values of $ 2.0 million and $ 4.5 million, respectively.

Each restricted stock unit award represents a contingent right to receive one share of the Company’s common stock at vesting.

The restricted stock unit awards issued under the Plan generally vest over requisite service periods of one to three years , except for the award to one of the Company’s executive officers that cliff vests on August 1, 2029 subject to continued service through that date.

A summary of the activity related to the Company’s restricted stock and restricted stock unit awards are as follows:

Weighted-Average

Grant Fair Value

Unvested at August 1, 2024

Unvested at September 30, 2024

Restricted stock and restricted stock unit awards issued during the nine-months ended September 30, 2024 were valued at $ 11.6 million and the weighted average per share or unit value was $ 27.24 .

At September 30, 2024, unrecognized share-based compensation costs for restricted stock and restricted stock unit awards was $ 11.1 million which is expected to be recognized over a weighted average period of 3.0 years.

Non-Qualified Stock Options

Non-qualified stock option awards issued under the Plan generally cliff vest over a requisite service period of three to five years and have a term of ten years from the grant date.

The weighted average fair value of non-qualified stock options and the related assumptions used in the Black Scholes model to calculate grant date fair value of the awards are as follows:

September 30, 2024

Weighted-average fair value

Dividend yield

Expected volatility of stock

Risk-free interest rate

3.9 % to 4.0 %

Expected option life (in years)

Weighted-average exercise price per share

A summary of the activity related to the Company’s non-qualified stock options is as follows:

Weighted-Average

Remaining Contractual

Aggregate Intrinsic

Exercise Price

Value ( in thousands )

Outstanding at August 1, 2024

Forfeited or expired

Outstanding at September 30, 2024

Non-qualified stock option awards issued during the nine-months ended September 30, 2024 were valued at $ 6.9 million.

At September 30, 2024, unrecognized share-based compensation costs for non-qualified stock option awards was $ 6.7 million which is expected to be recognized over a weighted average period of 4.6 years.

Stock-based compensation expense for restricted stock, restricted stock units and non-qualified stock options is generally recognized straight-line over the vesting term of the award, which typically provides for graded or cliff vesting subject to continued employment with the Company.

Stock-based compensation is classified in the same financial statement line items as cash compensation.

The following table presents the location of stock-based compensation expense on the Unaudited Condensed Consolidated and Combined Statements of Operations (amounts in thousands):

Three months ended

Nine months ended

September 30,

Sponsorships, events, and entertainment costs

Hospitality costs

Operating costs

General and administrative

Total stock-based compensation expense

Minimum rent revenues reported on the Unaudited Consolidated and Combined Statements of Operations also include amortization related to above and below‑market tenant leases on acquired properties.

Earnings Per Share

2 unchanged sentences

On the date of Separation, immediately prior to the Separation, there were 5,521,884 shares that were issued and outstanding .

This share amount is being utilized for the calculation of basic earnings (loss) per share for all periods in 2023 because the Company was not a standalone public company prior to the date of Separation and there was no stock trading information available to calculate earnings (loss) per share.

In addition, for all periods in 2023, the computation of diluted earnings per share equals the basic earnings (loss) per share calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260 and since common stock equivalents were antidilutive due to losses from operations.

For the three and nine months ended September 30, 2024 and 2023, earnings (loss) per share is computed as follows (amounts in thousands, except per share amounts):

Three months ended September 30

Nine months ended September 30

This share amount is being utilized for the calculation of basic earnings (loss) per share attributable to common stockholders for all periods in 2024 because the Company was not a standalone public company prior to the date of Separation and there was no stock trading information available to calculate earnings (loss) per share attributable to common stockholders.

In addition, for all periods in 2024, the computation of diluted earnings per share equals the basic earnings (loss) per share attributable to common stockholders calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260 and since common stock equivalents were antidilutive due to losses from operations.

For the three months ended March 31, 2025 and 2024, loss per share attributable to common stockholders is computed as follows:

Three months ended March 31,

in thousands, except per share data

Numerator - Basic

4 unchanged sentences

Weighted average shares outstanding - diluted

Earnings (loss) per share - basic and dilutive

The calculation of diluted earnings per share excluded the following shares that could potentially dilute basic earnings per share in the future because their inclusion would have been antidilutive.

Net loss per share attributable to common stockholders - basic and diluted

The calculation of diluted earnings per share attributable to common stockholders excluded the following shares that could potentially dilute basic earnings per share in the future because their inclusion would have been antidilutive:

Three months ended

Nine months ended

September 30, 2024

March 31, 2025

Shares issuable upon exercise of restricted stock and restricted stock units

5 unchanged sentences

The Series A Preferred Stock is not redeemable by the Company prior to July 11, 2029 except under limited circumstances intended to preserve certain tax benefits for HHH.

Upon consolidation, the issued and outstanding preferred share interest is shown as Noncontrolling interest in subsidiary in our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2024 and the related dividends are reflected as Preferred share distributions in our Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2024.

Upon consolidation, the issued and outstanding preferred share interest is shown as Noncontrolling interest in subsidiary in our Unaudited Consolidated Balance Sheet as of March 31, 2025 and the related dividends are reflected as Preferred distributions to noncontrolling interest in subsidiary in our Consolidated Statement of Operations during the three months ended March 31, 2025.

The Company has three business segments that offer different products and services.

The Company’s three segments are managed separately as each requires different operating strategies or management expertise.

Adjusted EBITDA is used to assess operating results for each of the Company’s business segments.

Our chief operating decision maker (“CODM”) is our Chief Executive Officer.

Our CODM uses Adjusted EBITDA to assess operating results for each of the Company’s business segments.

The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, equity in earnings (losses) from unconsolidated ventures, general and administrative expenses, and other expenses.

2 unchanged sentences

The Company’s reportable segments are as follows:

● Hospitality – consists of restaurant and retail businesses in the Historic District, Pier 17, and the Tin Building by Jean-Georges that are owned, either wholly or through joint ventures, and operated by the Company or through license and management agreements.

The hospitality segment also includes the equity interest in Jean-Georges

For the three months ended March 31, 2024, the net loss from the Tin Building by Jean-Georges is included in Equity in losses from unconsolidated ventures in the segment operating results below.

● Entertainment – consists of baseball operations of the Aviators and Las Vegas Ballpark along with concert and other revenue generated at the Seaport in New York, New York.

● Landlord Operations – consists of the Company’s rental operations associated with over 478,000 square feet of properties situated in three primary locations at the Seaport in New York, New York:

Pier 17, Historic Area/Uplands, and Tin Building, as well as the 250 Water Street development.

● Hospitality – consists of restaurant and retail businesses in the Historic District and Pier 17 that are owned, either wholly or through joint ventures, and operated by the Company or through license and management agreements, and also includes the equity interest in Jean-Georges Restaurants.

● Sponsorships, Events, and Entertainment – consists of baseball operations of the Aviators and Las Vegas Ballpark along with sponsorships, events, and other revenue generated at the Seaport in New York, New York.

Pier 17, Historic Area/Uplands, and Tin Building, as well as 250 Water Street.

Segment operating results are as follows:

Sponsorships,

Hospitality (1)

Entertainment

Three months ended September 30, 2024

Three months ended March 31, 2025

Total revenues

Hospitality Costs

Entertainment Costs

Operating costs

Total operating expenses

Other income (loss), net

Total segment expenses

Equity in earnings (losses) from unconsolidated ventures

Segment Adjusted EBITDA

Depreciation and amortization

Interest expense, net

Equity in losses from unconsolidated ventures

Provision for impairment

Loss on early extinguishment of debt

Corporate expenses and other items

Interest income (expense)

General and administrative expenses

Loss before income taxes

Income tax benefit (expense)

Three months ended September 30, 2023

Three months ended March 31, 2024

Total revenues

Hospitality Costs

Entertainment Costs

Operating costs

Total operating expenses

Other income, net

Total segment expenses

Equity in earnings (losses) from unconsolidated ventures

Segment Adjusted EBITDA

Depreciation and amortization

Interest expense, net

Equity in losses from unconsolidated ventures

Provision for impairment

Loss on early extinguishment of debt

Corporate expenses and other items

Interest income (expense)

General and administrative expenses

Loss before income taxes

Income tax benefit (expense)

Sponsorships,

(1) Period-over-period comparability is impacted by the consolidation of the Tin Building by Jean-Georges as of January 1, 2025.

For prior periods in 2024, the Tin Building by Jean-Georges was an unconsolidated joint venture accounted for under the equity method in the Equity in earnings (losses) from unconsolidated ventures within our Hospitality segment.

(2) Other includes any inter-segment eliminations necessary to reconcile to Unaudited Consolidated and Combined Company totals.

The following represents assets by segment and the reconciliation of total segment assets to total assets in the Unaudited Consolidated Balance Sheets as of:

Entertainment

Nine months ended September 30, 2024

Total revenues

Total segment expenses

Segment Adjusted EBITDA

Depreciation and amortization

Interest expense, net

Equity in losses from unconsolidated ventures

Provision for impairment

Loss on early extinguishment of debt

Corporate expenses and other items

Loss before income taxes

Income tax benefit (expense)

Nine months ended September 30, 2023

Total revenues

Total segment expenses

Segment Adjusted EBITDA

Depreciation and amortization

Interest expense, net

Equity in losses from unconsolidated ventures

Provision for impairment

Loss on early extinguishment of debt

Corporate expenses and other items

Loss before income taxes

Income tax benefit (expense)

The following represents assets by segment and the reconciliation of total segment assets to Total assets in the Unaudited Condensed Combined Balance Sheets as of:

September 30,

Landlord Operations

Sponsorships, Events, and Entertainment

Total segment assets

2 unchanged sentences

The Company also engages in transactions with CCMC and generates rental revenue by leasing space to equity method investees, which are related parties, as described below.

Net Transfers from Parent

As discussed in Note 1 – Summary of Significant Accounting Policies in the basis of presentation section and below, net parent investment is primarily impacted by allocation of expenses for certain services related to shared functions provided by HHH prior to the Separation and contributions from HHH which are the result of net funding provided by or distributed to HHH.

The components of net parent investment are:

Net Transfers from Former Parent

As discussed in Note 1 – Summary of Significant Accounting Policies in the basis of presentation section and below, net investment by Former Parent is primarily impacted by allocation of expenses for certain services related to shared functions provided by HHH prior to the Separation and contributions from HHH which are the result of net funding provided by or distributed to HHH.

The components of net investment by Former Parent are:

Three months ended

Nine months ended

September 30,

Net transfers from Parent as reflected in the Unaudited Condensed Combined Statements of Cash Flows

Net investment by Former Parent as reflected in the Unaudited Combined Statement of Cash Flows

Non-cash stock compensation expense

Net transfers from Parent as reflected in the Unaudited Condensed Combined Statements of Equity

Net investment by Former Parent as reflected in the Unaudited Combined Statement of Equity

Corporate Overhead and Other Allocations

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 executive oversight, treasury, accounting, finance, internal audit, legal, information technology, human resources, communications, and risk management;

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 Condensed Consolidated and Combined Financial Statements reflect an allocation of these costs.

The Company’s Unaudited Combined Financial Statements for the three months ended March 31, 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 allocation of expenses, net of amounts capitalized, from HHH to the Company were reflected as follows in the Unaudited Condensed Consolidated and Combined Statements of Operations:

Three months ended September 30,

Nine months ended September 30,

The allocation of expenses, net of amounts capitalized, from HHH to the Company were reflected as follows in the Unaudited Combined Statements of Operations:

Three months ended

Operating costs

2 unchanged sentences

Allocated expenses recorded in operating costs, general and administrative expenses, and other income, net in the table above primarily include the allocation of employee benefits and compensation costs, including stock compensation expense, as well as overhead and other costs for shared support functions provided by HHH on a centralized basis prior to the Separation.

Operating costs as provided in the table above include immaterial expenses recorded to hospitality costs and sponsorships, events, and entertainment costs with the remainder recorded to operating costs.

During the nine months ended September 30, 2024, the Company capitalized costs of $ 0.3 million and $ 0.2 million that were incurred by HHH for the Company’s benefit in Developments and Buildings and equipment, respectively.

During the nine months ended September 30, 2023, the Company capitalized costs of $ 1.8 million and $ 0.4 million that were incurred by HHH for the Company’s benefit in Developments and Building and equipment, respectively.

The financial information herein may not necessarily reflect the combined financial position, results of operations, and cash flows of the Company in the future or what they would have been had the Company been a separate, standalone entity during the period from January 1, 2024 to July 31, 2024 and for the year ended December 31, 2023.

Operating costs as provided in the table above include immaterial expenses recorded to hospitality costs and entertainment costs with the remainder recorded to operating costs.

During the three months ended March 31, 2024, the Company capitalized costs of $ 0.4 million and $ 0.2 million that were incurred by HHH for the Company’s benefit in Developments and Building and equipment, respectively.

The financial information herein may not necessarily reflect the combined financial position, results of operations, and cash flows of the Company in the future or what they would have been had the Company been a separate, standalone entity during the period from January 1, 2024 to March 31, 2024 and for the full year ended December 31, 2024.

Management believes that the methods used to allocate expenses to the Company are reasonable;

however, the allocations may not be indicative of actual expenses that would have been incurred had the Company operated as an independent, publicly traded company prior to the date of Separation.

Actual costs that the Company may have incurred had it been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by the Company employees and strategic decisions made in areas such as executive leadership, corporate infrastructure, and information technology.

Unless otherwise stated, these intercompany transactions between the Company and HHH have been included in these Unaudited Condensed Consolidated and Combined Financial Statements and are considered to be effectively settled at the time the transaction is recorded.

The total net effect of the settlement of these intercompany transactions is reflected in the Unaudited Condensed Consolidated and Combined Statements of Cash Flows as a financing activity and in the Unaudited Condensed Consolidated and Combined Balance Sheets as an adjustment to additional paid-in capital as of September 30, 2024 and net parent investment as of December 31, 2023.

Actual costs that the Company may have incurred had it been a standalone company during the three months ended March 31, 2024 would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by Company employees and strategic decisions made in areas such as executive leadership, corporate infrastructure, and information technology.

Unless otherwise stated, these intercompany transactions between the Company and HHH have been included in the Unaudited Combined Financial Statements for the three months ended March 31, 2024 and are considered to be effectively settled at the time the transaction is recorded.

The total net effect of the settlement of these intercompany transactions is reflected in the Unaudited Combined Statements of Cash Flows as a financing activity for the three months ended March 31, 2024 and in the Unaudited Consolidated Balance Sheets as an adjustment to additional paid-in capital as of March 31, 2025 and as of December 31, 2024.

Stock Compensation

Prior to the Separation, the Company’s employees participated in HHH’s stock-compensation plan and the Company is allocated a portion of stock compensation expense based on the services provided to the Company.

The non-cash stock compensation expense (income) for employee services directly attributable to the Company totaled $ 0.2 million for the three months ended September 30, 2024, and $0.3 million for the nine months ended September 30, 2024, compared to $ 0.7 million for the three months ended September 30, 2023, and $ 1.2 million for the nine months ended September 30, 2023, and is included within general and administrative expenses in the Unaudited Condensed Consolidated and Combined Statements of Operations and included in the table above.

These expenses are presented net of zero and $ 0.7 million capitalized to development projects during the three months ended September 30, 2024, and 2023, respectively, and $ 0.3 million and $ 1.1 million capitalized to development projects during the nine months ended September 30, 2024, and 2023, respectively.

Employee benefits and compensation expense, including stock-based compensation expense, related to the HHH employees who provided shared services to the Company following the Separation pursuant to the transition services agreement entered into in connection with the Separation, have also been allocated to the Company and is recorded in general and administrative expenses in the Unaudited Condensed Consolidated and Combined Statements of Operations and included in the table above.

Related-party Management Fees

Prior to the Separation, the Company’s employees participated in HHH’s stock-compensation plan and the Company was allocated a portion of stock compensation expense based on the services provided to the Company.

The non-cash stock compensation expense for employee services directly attributable to the Company totaled $ 0.7 million for the three months ended March 31, 2024, and is included within general and administrative expenses in the Unaudited Combined Statement of Operations for the three months ended March 31, 2024 and included in the table above.

These expenses are presented net of $ 0.4 million capitalized to development projects during the three months ended March 31, 2024.

Employee benefits and compensation expense, including stock-based compensation expense, related to the HHH employees who provided shared services to the Company prior to the Separation have also been allocated to the Company and are recorded in general and administrative expenses and included in the table above.

Related-Party Management Fees and Transition Services

Prior to the Separation, HHH provided management services to the Company for managing its real estate assets and the Company reimbursed HHH for expenses incurred and paid HHH a management fee for services provided.

The amounts outstanding pursuant to the management fee agreement between the Company and HHH were cash settled each month and are reflected in the Unaudited Condensed Consolidated and Combined Balance Sheets as related-party payables to the extent unpaid as of each balance sheet date.

During the nine months ended September 30, 2024, and 2023, the Unaudited Condensed Consolidated and Combined Balance Sheets reflects immaterial outstanding payables due to HHH with respect to the landlord management fees.

These landlord management fees amounted to $ 0.1 million and $ 0.1 million for the three months ended September 30, 2024, and 2023, and $ 0.3 million and $ 0.3 million for the nine months ended September 30, 2024, and 2023, respectively.

As discussed in Note 2 – Investments in Unconsolidated Ventures , CCMC, a wholly owned subsidiary of Jean-Georges Restaurants, which is a related party of the Company, also provides management services for certain of the Company’s retail and food and beverage businesses, either wholly owned or through partnerships with third parties.

These landlord management fees amounted to $ 0.1 million for the three months ended March 31, 2024.

As discussed in Note 2 – Investments in Unconsolidated Ventures , CCMC, a wholly owned indirect subsidiary of Jean-Georges Restaurants, which is a related party of the Company, also provides management services for certain of the Company’s retail and food and beverage businesses, either wholly owned or through partnerships with third parties.

The Company’s businesses managed by CCMC include, but are not limited to, locations such as The Tin Building by Jean-Georges, The Fulton, and Malibu Farm.

As of September 30, 2024, and December 31, 2023, the Unaudited Condensed Consolidated and Combined Balance Sheets reflect receivables for funds provided to CCMC to fund operations of $ 1.4 million and $ 1.2 million, respectively and accounts payable of $ 0.9 million and $ 0.2 million, respectively due to CCMC with respect to reimbursable expenses to be funded by the Company.

The Company’s related-party management fees due to CCMC amounted to $ 0.6 million during the three months ended September 30, 2024, and $ 1.8 million during the nine months ended September 30, 2024, compared to $ 0.5 million during the three months ended September 30, 2023, and $ 1.6 million during the nine months ended September 30, 2023.

Accordingly, employee compensation and benefits costs previously paid by, and reimbursed to, CCMC are now paid directly by the Company.

As of December 31, 2024, the Consolidated Balance Sheet reflects receivables for funds provided to CCMC to fund operations of $ 0.1 million with no corresponding receivable as of March 31, 2025.

As of March 31, 2025 and December 31, 2024, the Unaudited Consolidated Balance Sheets reflect accounts payable of $ 0.3 million and $ 0.5 million, respectively due to CCMC with respect to reimbursable expenses and management fees to be funded by the Company.

The Company’s related-party management fees due to CCMC amounted to $ 1.1 million and $ 0.5 million during the three months ended March 31, 2025 and 2024, respectively.

Related party management fees for the three months ended March 31, 2025 include $ 0.6 million of fees related to the Tin Building by Jean-Georges, a previously unconsolidated joint venture accounted for under the equity method.

Refer to Note 2 – Investments in Unconsolidated Ventures for further information.

In connection with the Separation, the Company entered into a transition services agreement with HHH that provides for the performance of certain services by HHH for our benefit for a period of time after the Separation.

During the three months ended March 31, 2025, the Company recorded expenses of $ 0.1 million related to this transition services agreement with HHH within general and administrative expenses.

In connection with and prior to the Separation, on July 31, 2024, the variable rate mortgage related to 250 Water Street was refinanced.

Pursuant to the terms of the refinanced loan, we entered into a total return swap with the lender.

See Note 4 – Mortgages Payable, Net for additional information.

Our obligations under such total return swap are in turn supported by a guaranty provided by a subsidiary of HHH.

In consideration of providing such guarantee, the Company entered into an Indemnity Fee Agreement with HHH and pays an annual guaranty fee equal to 2.0 % of the $ 61.3 million refinanced debt balance.

The Company capitalized $ 0.3 million of such fees to Net investment in real estate in the three months ended March 31, 2025.

Related-party Rental Revenue

The Company owns the real estate assets that are leased by Lawn Club and the Tin Building by Jean-Georges.

As discussed in Note 2 – Investments in Unconsolidated Ventures , the Company owns a noncontrolling interest in these ventures and accounts for its interests in accordance with the equity method.

As of September 30, 2024, and December 31, 2023, the Unaudited Condensed Consolidated and Combined Balance Sheets reflect accounts receivable of $ 2.6 million and $ 0.1 million, respectively, due from these ventures generated by rental revenue earned by the Company.

During the three months ended September 30, 2024, and 2023, the Unaudited Condensed Consolidated and Combined Income Statements reflect rental revenue associated with these related parties of $ 3.2 million and $ 2.9 million, respectively.

This is primarily comprised of $ 2.9 million and $ 2.7 million from the Tin Building by Jean-Georges during the three months ended September 30, 2024, and 2023, respectively.

During the nine months ended September 30, 2024 and 2023, the Unaudited Condensed Consolidated and Combined Income Statements reflect rental revenue associated with these related parties of $ 9.2 million and $ 9.1 million, respectively.

This is primarily comprised of $ 8.6 million and $ 8.7 million from the Tin Building by Jean-Georges during the nine months ended September 30, 2024, and 2023, respectively.

The Company owns the real estate assets that are leased by the Lawn Club and the Tin Building by Jean-Georges.

As discussed in Note 2 – Investments in Unconsolidated Ventures , the Company owned a noncontrolling interest in both of these ventures and accounted for its interests in accordance with the equity method in 2024.

As of January 1, 2025, the Company consolidates the Tin Building by Jean-Georges, and the rental revenue related to the applicable lease is eliminated in consolidation.

The Unaudited Consolidated Balance Sheets reflect accounts receivable generated by rental revenue earned by the Company of $ 0.3 million due from the Lawn Club as of March 31, 2025 and $ 0.2 million due from both ventures as of December 31, 2024.

During each of the three months ended March 31, 2025 and 2024, the Unaudited Consolidated and Combined Statements of Operations reflect rental revenue associated with these related parties of $ 0.3 million and $ 2.9 million, respectively.

This is primarily comprised of $ 2.9 million from the Tin Building by Jean-Georges during the three months ended March 31, 2024.

Related-party Other Receivables

As of September 30, 2024, and December 31, 2023, the Unaudited Condensed Consolidated and Combined Balance Sheets include a $ 0.0 million and $ 3.1 million receivable related to development costs incurred by the Company, which will be reimbursed by the Lawn Club venture.

As of March 31, 2025, the Unaudited Consolidated Balance Sheets includes a $ 1.2 million receivable mainly related to employee compensation and benefits to be reimbursed by the Lawn Club venture.

There was no other receivable balance as of December 31, 2024.

Subsequent Events

In September 2024, the Company commenced the Rights Offering, in the form of a pro rata distribution at no charge to holders of our common stock of transferable subscription rights to purchase up to an aggregate of 7,000,000 shares of its common stock at a cash subscription price of $ 25.00 per whole share.

On October 17, 2024, the Company completed the Rights Offering and issued an aggregate 7.0 million shares of common stock at the subscription price of $ 25.00 per whole share, for total gross proceeds of $ 175.0 million.

The Company has evaluated subsequent events through the date of issuance of these financial statements and has determined that no subsequent events have occurred that require recognition or disclosure.

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 1. Financial Statements