Seaport Entertainment's Q3 2025 Earnings Call: Contradictions Emerge on Tin Building Financial Challenges, Strategic Vision, Operating Structure, Leasing Demand, and CapEx Forecast

Date of Call: November 11, 2025

Financials Results

• Revenue: $45.1M, up 1% YOY (pro forma vs Q3 2024)
• EPS: GAAP net loss $2.61 per common share, improved $3.28 or 56% YOY; non-GAAP adjusted net loss $0.57 per share, improved $3.97 or 87% YOY; net loss attributable to common stockholders $33.2M, down ~$0.7M (2%) YOY

Guidance:

• Sale of 250 Water Street expected to close by December 15 at $152M; estimated >$7M improvement to historical cash burn.
• Q4: expect moderation in food & beverage revenue growth to prioritize flow-through and profitability.
• Leasing velocity and tenant openings anticipated to pick up in the back half of 2026; goal to have most tenants operating before Meow Wolf, timing dependent on leasing/phasing.
• Approximately $50M committed capex across announced projects; majority of spend expected mid-to-back half of 2026; Q4 capex likely light.
• Tin Building plan and 2026 budget to be outlined on next earnings call (early March).

Business Commentary:

• Financial Performance and Strategy:
• Seaport Entertainment Group reported total consolidated revenues of $45.1 million for Q3 2025, a 1% year-over-year increase on a pro forma basis.
• The growth was driven by an increase in rental revenue in the landlord segment, which rose by 56% year-over-year, primarily due to termination-related income and private event activity.

• The company emphasized its strategy of capital discipline and thoughtful capital deployment, focusing on reinvestment into existing assets and exploring opportunities for long-term value creation.

• Hospitality Segment and Event Impact:

• Hospitality revenues declined by 4% year-over-year but increased by 5% when including results from the unconsolidated venture Lawn Club.
• The decline was mainly due to lower revenues at the Tin Building and softness in certain legacy restaurants, while growth was driven by strong performance from the Lawn Club and events such as the Macy's 4th of July celebration.

• The company highlighted the success of events in driving visitation and enhancing the Seaport's reputation as a cultural destination, key to supporting its diverse food and beverage offerings.

• Entertainment Segment and Concert Revenue:

• Revenue from the Entertainment segment decreased by 5% year-over-year, primarily due to hosting 7 fewer concerts at the rooftop of Pier 17 compared to the prior year.
• The decline was partially offset by revenue from events like the Macy's 4th of July celebration and the Las Vegas Aviators post-season run.
• The focus remains on curating high-quality experiences and leveraging partnerships to drive visitation and engagement despite fluctuations in concert revenue.

• Capital Expenditure and Cash Balance:
• Capital expenditures in Q3 2025 totaled $4.8 million, with the majority related to the rooftop winter structure and landlord work.
• The company maintained a negative net debt position, with net debt to gross assets at negative 2%, reflecting a strong balance sheet with cash and cash equivalents totaling $117 million.
• The majority of committed capital expenditures are expected to be spent in the mid to back half of 2026, focused on ongoing projects like Meow Wolf and other tenant improvements.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management emphasized operational progress and liquidity: consolidated revenue of $45.1M (up 1% YOY), cash and restricted cash of $117M, non-GAAP adjusted net loss improved 71% YOY to $7.2M, centralized POS/procurement completed to improve margins, and stated plans to allocate capital to 'deliver long-term value' and prioritize profitability.

Q&A:

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): Congrats on the continued improvement. As we look to profitability, what do you think are the biggest levers that you guys can pull to drive that path forward?
  Response: Primary levers are opening leased tenants to start rent and operations (filling ~100,000 sq ft remaining) and driving further operational and G&A efficiencies to reach breakeven and profitability.

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): Following up on the leasing, could you talk a little bit about the demand that you guys are experiencing down there and the mix of tenants that are looking at your prospective spaces?
  Response: Demand is strong, especially for food & beverage (e.g., Duutano, Flanker); focus now shifting toward adding traditional retail and the right experiential partners to diversify the mix.

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): Is there anything timing-wise? Are you wanting to get all of these tenants open prior to Meow Wolf—should we expect velocity to pick up in the back half of next year?
  Response: Yes—leasing velocity is expected in the back half of 2026 with key openings phased mid‑2026 to late‑2026/early‑2027; goal is to have most tenants operating before Meow Wolf, subject to lease timing.

• Question from Matthew Erdner (JonesTrading Institutional Services, LLC, Research Division): How do you position yourself to continue bringing special events such as Macy's Wine & Food Festival and how important are these events to driving exposure to the district?
  Response: Special events are critical marketing drivers that increase visitation, awareness and dwell time; company will continue programming rooftops, pier and cobblestone to secure multi‑year event partnerships.

• Question from Ross Haberman (Rlh Investments, LLC): You talked a little about the restructuring with Jean‑George. Do you think you'll hit a breakeven with that cash‑wise in '26? Specifically about the Tin Building.
  Response: No specific 2026 breakeven guidance today; company will finalize budgets and present a detailed Tin Building plan on the next earnings call (early March).

• Question from Ross Haberman (Rlh Investments, LLC): With the restructuring, basically, are you cutting costs there?
  Response: Restructuring brought operations in‑house and converted external management agreements to license agreements, reducing external management fees.

• Question from Ross Haberman (Rlh Investments, LLC): Is a new concept or adjusted concept part of the thinking for the Tin Building?
  Response: All options are on the table; management is collaborating with Jean‑George and expects to outline the chosen path in the March plan.

• Question from Ross Haberman (Rlh Investments, LLC): You talked about 100,000 square feet of space to rent. How is that coming? Do you think you'll lease half of that in '26 or have large prospects?
  Response: Nike space (~largest portion) won't return until 2027; remaining smaller-shop spaces are attractive and should command higher rents; several prospects are in the pipeline and management expects some leases to close before year‑end.

• Question from Ross Haberman (Rlh Investments, LLC): What do you expect for capital expenditures for the fourth quarter?
  Response: Q4 capex should be light; current work on Meow Wolf landlord scope, Willets and Cork now, with capex ramping in 1H 2026 and roughly $50M committed across announced projects concentrated mid‑to‑back half 2026.

Contradiction Point 1

Tin Building Financial Challenges and Strategic Vision

It involves the strategic direction and financial health of the Tin Building, which is crucial for the company's overall performance and investor confidence.

Will Jean-George's restructuring achieve breakeven cash flow by 2026? - Ross Haberman (RLH Investments, LLC)

2025Q3: Cannot provide forward guidance yet. We'll outline our plans for the Tin Building on the next earnings call. We restructured to bring it in-house, reducing management fees. - Matthew Partridge(CEO)

How are you addressing financial challenges at Tin Building, and what is Seaport's strategic vision? - Matthew Morris Partridge (CFO, Executive VP & Treasurer)

2025Q2: The focus is on stabilizing the Tin Building and reducing cash burn. An amended operating plan is in development with Jean-Georges Restaurants. The long-term vision involves finding opportunities to increase operational efficiencies and reduce cash burn, with the intent to achieve operational breakeven by 2026. - Anton D. Nikodemus(CEO)

Contradiction Point 2

Tin Building Operating Structure and Partnerships

It highlights the changes in the operating structure and partnerships related to the Tin Building, which directly impacts the company's cost management and operational efficiencies.

Will you achieve breakeven following the restructuring of Jean-George by 2026 on a cash basis? - Ross Haberman (RLH Investments, LLC)

2025Q3: We restructured to bring it in-house, reducing management fees. - Matthew Partridge(CEO)

Can you discuss the strategic changes to internalize food and beverage operations and their impact on the Tin Building? - Matthew Morris Partridge (CFO, Executive VP & Treasurer)

2025Q2: Structural changes were made in partnership with Jean-Georges, obtaining 100% of Jean-Georges' interest in the Tin Building and transitioning from management agreements to license agreements. - Anton D. Nikodemus(CEO)

Contradiction Point 3

Leasing Demand and Tenant Mix

It highlights the company's outlook on leasing demand and the mix of tenants, which are crucial factors in determining the property's financial performance and potential investor interest.

Can you discuss leasing demand and tenant mix? - Matthew Erdner (JonesTrading Institutional Services, LLC)

2025Q3: Demand has been strong, especially for food and beverage spaces. We're keen on finding the right partners and experiences for our diverse customer base. - Matthew Partridge(CEO)

Can you provide an update on leasing activity and tenant composition? - John Kim (BMO Capital Markets)

2025Q1: We have signed 5 deals that span over 150,000 square feet in the quarter, representing over $40 million in annualized rent. However, given the forward nature of these deals, we expect significant variance in revenue recognition in the coming quarters. - Matthew Partridge(CFO)

Contradiction Point 4

Capital Expenditure Forecast

It involves changes in capital expenditure plans, which are important for understanding the company's financial obligations and future growth opportunities.

What do you expect for capital expenditures for the fourth quarter? - Ross Haberman (RLH Investments, LLC)

2025Q3: Capital expenditures will be light in the fourth quarter but will ramp up mid to back half of 2026 as we finish various projects. - Matthew Partridge(CEO)

Can you update on leasing activity and tenant composition? - John Kim (BMO Capital Markets)

2025Q1: We now expect total capital expenditures in fiscal year 2025 to be approximately $1.5 billion, which is lower than our previous expectations due to the impact of the strategic decision to consolidate our real estate portfolio. - Matthew Partridge(CFO)