What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-12 · 168 added, 79 removed, 249 unchanged (50% of the section changed)

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We also have a 25% interest in Jean-Georges Restaurants.

Creative Culinary Management Company (“CCMC”), a wholly owned indirect subsidiary of Jean-Georges Restaurants and a related party of the Company, provides management services for certain retail and food and beverage businesses in the Seaport.

On 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, we hired and onboarded employees of CCMC and entered into a services agreement with CCMC.

We aim to capitalize on opportunities in the food and beverage space to leverage growing consumer appetite for unique restaurant experiences as a catalyst to further expand the Company’s culinary footprint.

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Entertainment

Entertainment includes the Las Vegas Aviators Triple-A Minor League Baseball team (the “Aviators”) and the Las Vegas Ballpark, our interest in and to the Fashion Show Mall Air Rights, events at The Rooftop at Pier 17, and sponsorship agreements related to these venues.

agreements related to these venues.

The Aviators are a Triple-A affiliate of the Oakland Athletics and play at the Las Vegas Ballpark, a 10,000-person capacity ballpark located in Downtown Summerlin.

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

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

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

Landlord Operations

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Our financial statements for the periods until the Separation on July 31, 2024 are combined financial statements prepared on a carve-out basis and are 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.

Accordingly, 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.

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

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

The accompanying Unaudited Combined Financial

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

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

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

The Company’s Unaudited Combined Financial Statements for the three months ended March 31, 2024 reflect an allocation of these costs.

As a standalone public company, our ongoing costs related to such support functions may differ from, and may potentially exceed, the amounts that have been allocated to the Company in the Company’s Unaudited Combined Financial Statements for the three months ended March 31, 2024.

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

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

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

However, Landlord Operations Adjusted EBITDA, as defined below, includes only rental revenue related to the Tin Building lease payments, and does not include rent expense in Equity in losses from unconsolidated ventures for the three months ended March 31, 2024 or rent expense for the three months ended March 31, 2025 included in Hospitality costs in Hospitality Adjusted EBITDA.

The rental revenue and hospitality costs associated with the lease payments are eliminated in the Unaudited Consolidated Statement of Operations for the three months ended March 31, 2025.

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

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

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

The Tin Building by Jean-Georges is managed by CCMC, a related party that is indirectly owned by Jean-Georges Restaurants.

On June 30, 2025, the Assignors entered into a membership interest transfer agreement pursuant to which the Assignors transferred 100% of their interests in the Tin Building by Jean-Georges to an indirect subsidiary of the Company.

As a result of the transfer, an indirect subsidiary of the Company became the sole member of the Tin Building by Jean-Georges.

Prior to June 30, 2025, the Tin Building by Jean-Georges was managed by CCMC, a related party that is indirectly owned by Jean-Georges Restaurants.

On June 30, 2025, indirect subsidiaries of the Company and wholly owned subsidiaries of Jean-Georges Restaurants entered into License Agreements with respect to the license of certain intellectual property of Jean-Georges Restaurants for the Tin Building by Jean-Georges and the Fulton Restaurant.

As part of the restructuring transactions described above and in consideration of entry into the License Agreements, on July 1, 2025, an indirect subsidiary of the Company provided notice to CCMC terminating certain management agreements between CCMC and affiliates of the Company.

As a result, the Services Agreement has been terminated pursuant to its terms.

The Tin Building by Jean-Georges had a soft opening in August 2022 and a grand opening celebration in late September 2022, with an expanded focus on experiences including in-person dining, retail shopping and delivery and limited operating hours.

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

Performance at the Tin Building by Jean-Georges improved in 2024 and into the first quarter of 2025, primarily due to reductions in operating and labor costs.

As the Company currently funds any operating shortfall and recognizes all of the economic interest in the venture, the future success of the Tin Building by Jean-Georges may have a significant impact on our results of operations.

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

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

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

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This seasonality pattern results in lower revenues during these periods.

Moreover, severe winter weather conditions, such as snowstorms and freezing temperatures, can further deter customers from visiting our restaurants, further impacting our revenues and cash flow.

Moreover, severe winter weather conditions, such as snowstorms and freezing temperatures, can further deter customers from visiting our restaurants, further impacting our revenues and cash

Our seasonality also results in fluctuations in cash and cash equivalents, accounts receivable, deferred expenses, and accounts payable and other liabilities at different times during the year.

Lease Renewals and Occupancy

As of March 31, 2025, the average remaining term of our retail, office, and other properties leases where we are the lessor was approximately six years, excluding renewal options.

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

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

To the extent our properties become vacant, we would forego rental income while remaining responsible for the payment of property taxes and maintaining the property until it is re-leased, which could negatively impact our operating results.

In January 2025, the Company entered into a lease with immersive entertainment

and experience creator, Meow Wolf, to occupy approximately 74,000 square feet of vacant space in Pier 17, inclusive of a space currently occupied and expiring in December 2025.

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

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

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

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

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

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

We continue to monitor our lease renewals and occupancy rates.

As of March 31, 2025, our real estate assets at the Seaport were 83% leased or programmed.

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

Inflationary Pressures and Other Macroeconomic Trends

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Separation Costs.

The Company incurred pre-tax charges related to the planned separation from HHH, primarily related to legal and consulting costs, of $9.2 million for the three months ended March 31, 2024.

No costs related to the Separation were incurred or recorded for the three months ended March 31, 2025.

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

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

Shared Service Costs.

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

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 Company recorded expenses associated with shared services that are not directly attributable to the Company of $3.6 million for the three months ended March 31, 2024.

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

When specific identification or a direct attribution of costs

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

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

Tin Building by Jean-Georges.

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.

During the three months ended March 31, 2024, the Company recognized 100% of the economic interest in the venture in accordance with the equity method within Equity in earnings (losses) from unconsolidated joint ventures in the Unaudited Consolidated and Combined Statements of Operations.

As a result of the transfer, an indirect subsidiary of the Company became the sole member of the Tin Building by Jean-Georges.

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 Form 10-Q, 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 previously had an equity ownership interest, and as of June 30, 2025, owns 100%.

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

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

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

The following table sets forth our operating results:

Three Months Ended March 31,

Three Months Ended June 30,

in thousands except percentages

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Total expenses

Other income (loss), net

Operating loss

Interest income (expense)

Equity in earnings (losses) from unconsolidated ventures

Loss before income taxes

Income tax (benefit) expense

Preferred distributions to noncontrolling interest in subsidiary

Net loss attributable to common stockholders

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

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

Items Included in Segment Adjusted EBITDA

Segment Adjusted EBITDA for each segment includes certain intersegment revenues and expenses that eliminate in the Consolidated Statements of Operations for all periods presented.

See “Segment Operating Results” for discussion of significant variances in revenues and expenses included in Adjusted EBITDA.

Items Excluded from Segment Adjusted EBITDA

The following includes information on the significant variances in expenses and other items not directly related to segment activities.

General and Administrative .

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

Interest Income (Expense) .

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

This change is primarily due to a $1.2 million increase in interest income, a $1.7 million increase in amounts capitalized to development assets and a $1.0 million decrease in interest expense on secured mortgages payable.

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

The following table sets forth our operating results:

Six Months Ended June 30,

in thousands except percentages

Hospitality revenue

Entertainment revenue

Rental revenue

Other revenue

Total revenue

Hospitality costs

Entertainment costs

Operating costs

General and administrative

Depreciation and amortization

Total expenses

Other income, net

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Net loss attributable to common stockholders

Net loss attributable to common stockholders decreased $12.2 million, or 28%, to $31.9 million for the three months ended March 31, 2025, compared to $44.1 million in the prior-year period, primarily due to a $6.8 million decrease in general and administrative expenses and a $3.5 million increase in interest income.

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

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

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General and Administrative .

General and administrative costs decreased $6.8 million to $9.8 million for the three months ended March 31, 2025, compared to $16.6 million in the prior-year period, primarily due to a $9.2 million decrease in separation costs, partially offset by a $2.4 million increase in personnel and overhead expenses.

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

Interest Income (Expense) .

Interest income increased $3.5 million to $1.0 million for the three months ended March 31, 2025, compared to a net expense of $2.5 million in the prior-year period.

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

This change is primarily due to a $2.6 million increase in interest income, a $2.7 million increase in amounts capitalized to development assets and a $2.0 million decrease in interest expense on secured mortgages payable.

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Three Months Ended

Six Months Ended

Hospitality Adjusted EBITDA (a)

in thousands except percentages

Hospitality revenue

Hospitality revenue (b)

Total revenues

Hospitality costs (b)

Hospitality costs (c)

Total operating expenses

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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.

(b) Hospitality costs include amounts related to intercompany leases that eliminate in the Statement of Operations.

(b) Hospitality revenue includes amounts related to intercompany transactions that eliminate in the Statement of Operations.

For the three months ended June 30, 2025

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

Hospitality Revenue

Hospitality revenue increased $3.6 million to $7.7 million for the three months ended March 31, 2025, compared to $4.1 million in the prior-year period.

This change was primarily due to a $4.5 million increase as a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, offset by decreased revenue across various restaurants within the Seaport as a result of reduced operating hours during the three months ended March 31, 2025.

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

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

Hospitality Costs

Hospitality costs increased $12.6 million to $20.4 million for the three months ended March 31, 2025, compared to $7.8 million in the prior-year period.

The increase is primarily due to the consolidation of the Tin Building by Jean-Georges as of January 1, 2025, partially offset by reduced expenses across various restaurants within the Seaport as a result of reduced operating hours during the three months ended March 31, 2025.

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

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

Equity in Earnings (Losses) from Unconsolidated Ventures

Equity in earnings (losses) from unconsolidated ventures increased $10.4 million to $0.2 million for the three months ended March 31, 2025, compared to losses of $10.2 million in the prior-year period.

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

This change was primarily due to a $7.0 million decrease in losses as a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, and a $0.3 million increase in earnings for the Lawn Club.

For the six months ended June 30, 2025

Hospitality Adjusted EBITDA losses decreased $2.8 million compared to the prior-year period primarily due to the following:

Hospitality Revenue

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

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

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

Hospitality Costs

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

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

Equity in Earnings (Losses) from Unconsolidated Ventures

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

This change was primarily due to a $16.7 million decrease in losses as a result of consolidating the Tin Building by Jean-Georges as of January 1, 2025, a $0.5 million increase in earnings from Jean-Georges Restaurants, and a $0.6 million increase in earnings for the Lawn Club.

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Entertainment Adjusted EBITDA

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

in thousands except percentages

Entertainment revenue

Entertainment revenue (a)

Total revenues

Entertainment costs

Entertainment costs (b)

Total operating expenses

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Adjusted EBITDA

Entertainment Adjusted EBITDA decreased $0.1 million compared to the prior-year period primarily due to the following:

(a) Entertainment revenue includes amounts related to intercompany transactions that eliminate in the Statement of Operations.

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

For the three months ended June 30, 2025

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

Entertainment Revenue

Entertainment revenue increased $0.6 million to $4.2 million for the three months ended March 31, 2025, compared to $3.6 million in the prior-year period.

This change was primarily due to a $0.4 million increase in Aviators ticket revenue and a $0.2 million increase in sponsorship revenue related to the concert series at the Seaport.

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

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

Entertainment Costs

Entertainment costs increased $0.7 million to $7.1 million for the three months ended March 31, 2025, compared to $6.4 million in the prior-year period.

This change was primarily due to a $0.5 million increase in breakdown and removal costs associated with the seasonal Winterland Skating concept at the Seaport as well as a $0.2 million increase in costs at the Las Vegas Ballpark, primarily due to higher cost of sales and labor costs as expected with additional games.

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

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

For the six months ended June 30, 2025

Entertainment Adjusted EBITDA increased $2.6 million compared to the prior-year period primarily due to the following:

Entertainment Revenue

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

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

Entertainment Costs

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

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

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

Landlord Operations

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Three Months Ended

Six Months Ended

Landlord Operations Adjusted EBITDA

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Total revenues

Operating costs

Operating costs (b)

Total operating expenses

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(a) Rental revenue includes amounts related to intercompany leases that eliminate in the Company’s Statement of Operations.

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

For the three months ended June 30, 2025

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

Rental Revenue

Rental revenue increased $0.4 million to $8.5 million for the three months ended March 31, 2025, compared to $8.1 million in the prior-year period.

This change was primarily driven by an increase in rent escalation revenue as well as an increase in revenue generated by variable-rent leases.

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

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

Other Revenue

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

Operating Costs

Operating costs decreased $0.5 million to $8.1 million for the three months ended March 31, 2025, compared to $8.6 million in the prior year period.

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

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

For the six months ended June 30, 2025

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

Rental Revenue

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

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

Other Revenue

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

Operating Costs

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

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

Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, our cash and cash equivalents were $129.9 million and $165.7 million, respectively.

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

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

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

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

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

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

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

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

As of each of March 31, 2025 and December 31, 2024, we had third-party mortgages payable of $102.4 million related to our 250 Water Street development, a variable-rate mortgage which requires monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest.

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

property development.

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

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

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

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

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

The cash flows presented in our Unaudited Consolidated and Combined Statement of Cash Flows for the three months ended March 31, 2024 may not be indicative of the cash flows we would have recognized had we operated as a standalone publicly traded company for the period presented.

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

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

Three Months Ended March 31,

Six Months Ended June 30,

Cash used in operating activities

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Operating Activities

Cash used in operating activities increased $1.7 million to $20.5 million in the three months ended March 31, 2025, compared to $18.8 million in the prior-year period.

The increase primarily relates to changes in cash used in operating activities in each of our segments and increases in short-term receivables with our unconsolidated joint ventures.

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

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

Investing Activities

Cash used in investing activities decreased $14.1 million to $14.5 million in the three months ended March 31, 2025, compared to $28.6 million in the prior-year period.

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

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

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

Financing Activities

Cash provided by financing activities decreased $48.5 million to cash used in financing activities of $0.9 million in the three months ended March 31, 2025, compared to cash provided by financing activities of $47.7 million in the prior-

year period, primarily due to the elimination of net transfers provided by HHH to fund the operating and investing activities described above.

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

Contractual Obligations

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

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

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

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

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

Contractual rental expense was $1.6 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.

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

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

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

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

Critical Accounting Estimates

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As such, the evaluation of anticipated cash flows is highly subjective and is based in part on assumptions that could differ materially from actual results in future periods.

changes in any of the primary assumptions could result in a reduction of anticipated future cash flows and could indicate property impairment.

Unfavorable changes in any of the primary assumptions could result in a reduction of anticipated future cash flows and could indicate property impairment.

Uncertainties related to the primary assumptions could affect the timing of an impairment.

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

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

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

Judgments and Uncertainties

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The determination of whether an entity is a VIE and whether the Company is the primary beneficiary of a VIE is based upon facts and circumstances for the VIE and requires significant judgments such as whether the entity is a VIE, whether the Company’s interest in a VIE is a variable interest, the determination of the activities that most significantly impact the economic performance of the entity, whether the Company controls those activities, and whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

The Tin Building by Jean-Georges was previously classified as a VIE.

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 economic performance of the Tin Building by Jean-Georges, became the primary beneficiary of the VIE and consolidated the VIE on January 1, 2025 and for the three month period ending March 31, 2025.

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.

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

As a result of the transfer, an indirect subsidiary of the Company became the sole member of the Tin Building by Jean-Georges.

Investments in Unconsolidated Ventures

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Generally, joint venture operating agreements provide that assets, liabilities, funding obligations, profits and losses, and cash flows are shared in accordance with ownership percentages.

For certain equity method investments, various provisions in the joint venture operating agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and preferred returns may result in the Company’s economic interest differing from its stated ownership or if applicable, the Company’s final profit-sharing interest after receipt of any preferred returns based

on the venture’s distribution priorities.

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

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Capitalized costs related to a project where the Company has determined not to move forward are expensed if they are not deemed recoverable.

Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period.

Capitalized interest costs are based on qualified

expenditures and interest rates in place during the construction period.

Demolition costs associated with redevelopments are expensed as incurred unless the demolition was included in the Company’s development plans and imminent as of the acquisition date of an asset.

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

For the three months ended March 31, 2025 and 2024, we capitalized development costs of $2.3 million and $2.4 million, respectively.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis