SEG

Good morning, and welcome to Seaport Entertainment Group's first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow today's formal presentation. As a reminder, today's call is being recorded. I would now like to turn the call over to Jason Blake Wilk, Senior Vice President of Finance. Please go ahead.

Thank you, operator, and good morning, everyone. With me today is our President and Chief Executive Officer, Matt Partridge, and our Chief Financial Officer and Treasurer, Lenah Elaiwat. Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC reports, earnings release, and quarterly supplemental information on our website at seaportentertainment.com. With that, I will turn the call over to Matt.

Thanks, Jason. Good morning, everyone. Let's start with the headline items from the first four months of 2026, some of which we discussed during our previous earnings call in March, but are still incredibly important accomplishments as we continue to position the organization as a scalable real estate-centric hospitality and entertainment company. To start the year, we completed the sale of 250 Water Street, generating more than $75 million of liquidity and eliminating ongoing carry costs. We leased the Tin Building to Lux Entertainment, the operator of the interactive contemporary art experience, Balloon Museum, transitioning the property to a leased and soon to be cash flowing asset. We opened Sadie's Restaurant & Garden Bar, our self-developed new American restaurant, which has received very positive initial reviews and has exceeded our expectations.

We announced our arts, culture, and hospitality-focused partnership with Public Service, the creative and curatorial team behind the highly acclaimed concept Public Records, to develop a new offering for the Seaport. We've developed a comprehensive calendar of seasonal, sporting, cultural, and evergreen programming, which serves as the foundation for guest engagement and increased visitation. During the first quarter, we generated a 21% year-over-year improvement in our non-GAAP adjusted net loss, which adjusts our GAAP net loss for certain non-cash and non-recurring items. These achievements represent significant progress towards improving liquidity and cash flow, stabilizing and optimizing operations, and creating sustainable long-term value for our shareholders, community, and other stakeholders. Said differently, this is the turning point, and as a result of our progress, we believe we are on a path to drive positive long-term operational cash flow and earnings growth.

That said, we are still early in building what Seaport Entertainment Group can become. The broader opportunity for strategic positioning of our company is centered on real estate assets with market-specific multi-revenue ecosystems that drive outsized demand to the destinations through integrated experiences and curated placemaking. Consumer wallet share is being structurally reallocated towards time, social connections, and place-based spending. As screens get louder, digital content gets more crowded, and AI makes it harder to know what is real, we believe people will place even greater value on memorable in-person experiences they can feel and share with others. People want human connection, and that is where we are focused. By creating places, events, and activations that bring people together, we are giving them a reason to come back and building lasting value.

This should ultimately result in more tenant and concept success, leading to long-term growth in rents and operational cash flow, and in turn, improving overall real estate and organizational value. We know there is still a considerable amount of work to be done, and it's not going to happen overnight. Disciplined execution and a common focus is what will carry our progress forward as we create a financially viable, community-driven destinations that are grounded in live entertainment, food and beverage, arts and culture, and event-based experiences. At the Seaport in New York, many of our recent announcements will be supported by the long-term growth we are seeing in our nearby residential population and the momentum in New York City tourism.

Lower Manhattan is home to more than 70,000 residents, continues to be one of the fastest-growing residential districts in New York City, and is set to benefit from nearly 9,000 new units in the pipeline, driven by ongoing office conversions and ground-up development projects. From a tourism perspective, in spite of policy actions and geopolitical events that have created headwinds for growth and visitation, New York City 2026 visitation is expected to grow by more than 1 million visitors as it benefits from several large events, including the FIFA World Cup and America's 250th anniversary. We plan to leverage both events through a growing programming calendar tied to these unique experiences. Taken all together, these market dynamics reinforce our confidence in the underlying demand trends that support the Seaport.

While some of this demand will be transient due to the one-time nature of the associated events, the addition of year-round experience-led anchors like the Balloon Museum opening later this summer and Meow Wolf opening late 2027 or early 2028 will drive consistent visitation even during seasonally slower periods, as well as longer time spent in the neighborhood and increased spending in adjacent businesses. One of our businesses expected to benefit the most from the improved demand trends in our active programming calendar is the recently opened Sadie's Restaurant & Garden Bar. As I mentioned earlier, Sadie's is our first self-developed restaurant concept, which offers an approachable new American menu, including familiar favorites and daily brunch.

With it, we opened Sadie's Garden Bar, one of the largest outdoor bars in Manhattan that can accommodate up to 1,000 guests. One of Sadie's differentiators is the scale and flexibility of its space, which is being combined with our robust programming calendar to drive consistent traffic and events to the neighborhood. In April, Sadie's Garden Bar hosted part of the neighborhood-wide New York Jets Draft Night Fan Fest, bringing thousands of visitors to the Seaport. It also played host to our Kentucky Derby event in early May, resulting in strong attendance, guest engagement, and food and beverage sales. Opening a new restaurant is no small accomplishment, and one on this scale is even more impressive. I couldn't be more proud of the Sadie's team for what they've achieved in such a short period of time.

As we look ahead to the summer, we envision Sadie's as the central hub of activity on the historic cobblestones. With its outdoor video wall, we expect to continue our momentum with sporting event watch parties, live music, and other cultural programming, including serving as a key destination for viewing the World Cup. In addition to Sadie's, we recently announced our long-term agreement with Public Service, the team behind Public Records, to open their first experience in Manhattan in approximately 11,000 square feet of previously vacant space in the cobblestones. For those who are not familiar, Public Records is an experience-driven hospitality and music concept located in Brooklyn that blends food and beverage, live music performances, and art with thoughtfully designed spaces in creating a single cohesive destination.

The Public Service team is an incredible group of tastemakers with a strong track record of generating consistent demand through a continuously evolving platform that has helped define culture in New York City. While this new project is expected to open in 2027 and more details will be announced in the coming months, it reflects the continued demand we're seeing for experience-driven destinations and reinforces the Seaport's unique position as a home for these concepts. Speaking of experience-driven concepts, we kicked off the 2026 concert series at The Rooftop at Pier 17 on May 2nd with a sold-out show from Mika. This year's lineup is our largest ever with nearly 70 confirmed shows, roughly half of which are already on sale and seeing strong demand.

Some of the more notable acts include Belle and Sebastian, Billy Currington and Kip Moore, Jimmy Eat World, Lupe Fiasco, Passion Pit, and Sam Barber. We are also welcoming back many returning artists this season, which speaks to the exceptional experience our team continues to deliver for both fans and artists. Alongside the expanded lineup, we are continuing to improve the premium experience, growing offerings like the Liberty Club, Heineken Silver Zone, and Patrón Patio, while introducing new social engagement tools designed to enhance the guest experience, expand venue visibility, and increase guest spending. Beyond concerts, our events pipeline continues to grow due to our demonstrated ability to curate, produce, and host large-scale activations such as the New York City Wine & Food Festival and Macy's Fourth of July fireworks.

In addition to the return of many of these marquee events, we have a strong pipeline of several high-profile one-off activations being hosted in the Seaport, with a recent standout being Spotify's BTS Swimside fan experience on The Rooftop at Pier 17 in March. The 2,000 person event marked the group's first U.S. performance in 4 years and is a powerful example of our ability to attract high-impact experiences from culturally relevant brands. It was recently announced that The Rooftop will host U.S. Soccer's first ever live U.S. Men's National Team World Cup roster reveal and fan celebration later this month. While we have a tremendous amount of momentum in our programming calendar, we continue to make progress on our expanded event space at Pier 17.

This remains a priority due to its ability to generate high margin revenue and increase our operational scale, especially given it is a fully enclosed indoor facility with unique market positioning and amenities. We're refining the scope and timing, but we currently expect to have the space operational by mid-2027. On the concept and tenant build-out side of things, execution remains a top priority, and we are making great progress across several material projects. At Pier 17, we recently achieved an important milestone with the delivery of the landlord-required work from Meow Wolf. Meow Wolf will now take the handoff and push forward with their build-out for a late 2027 or early 2028 opening.

Work is also ongoing for Flanker Kitchen + Sports Bar and Hidden Boot Saloon, with Flanker expected to open in late 2026 and Hidden Boot Saloon targeting an opening date in early 2027. The Tin Building, the landlord work for the Balloon Museum's flagship U.S. location, is progressing on schedule with delivery to the tenant expected in late June. Current projections have the museum opening this summer. Notably, the exhibition will feature a major installation by Marina Abramović, the renowned contemporary artist who has exhibited across some of the world's most esteemed museums and cultural institutions. Her installation, combined with other notable artists and the museum's interactive curation, will deliver an experience that we believe will be on par with some of the most in-demand cultural experiences in New York City.

Against that backdrop and all of the progress we've highlighted, we're encouraged by how our vision for the Seaport is coming together. In Las Vegas, our focus remains on delivering a high-quality guest experience at the Las Vegas Ballpark while continuing to refine our operating model to drive greater efficiency and profitability. A key part of that strategy is leaning into our position as a true local offering, which is differentiated from the Major League sports franchises on the Strip. The Las Vegas Aviators provide a more approachable, family-friendly, and community-oriented experience. This is supported by consistent programming and fan-friendly promotions that drive repeat visitation at an accessible price point. That positioning is being bolstered by continued growth in the Summerlin community and the surrounding area.

Today, Summerlin is home to more than 125,000 residents with a long-term plan to reach approximately 200,000 at full build-out, creating a growing and highly engaged customer base near the ballpark. We remain focused on ticket pacing and pricing, expanding programming through theme nights, in-game experiences, and non-baseball activations, leaning into our robust merchandising strategy and driving operational efficiencies. As we enter our second year operating our holiday activation in Enchant, we expect improved execution and stronger margins as we build on last year's learnings. Looking at the 2026 Las Vegas Aviators season, we're seeing encouraging early results.

Coming off of our 2025 Pacific Coast League championship, the Aviators are once again sitting in first place in the PCL, and I'm proud to say our Las Vegas Ballpark will once again host the AAA Minor League championship game this fall for the 5th year in a row. In March, we hosted two sold-out games between the Athletics and the Los Angeles Angels, welcoming more than 20,000 attendees and driving year-over-year growth in ticket revenue. We're seeing that demand continue across both group and season ticket sales for the Aviators, supported by a full calendar of themed promotions and fan-focused programming, with solid pacing for individual ticket sales for many of the upcoming games. This strong start reflects the consistent demand in the market and aligns with our position as one of the top-performing teams in Minor League Baseball.

To wrap it up, we've had a very productive first quarter. We're entering the rest of the year from the strongest position since our inception. We are very excited about the momentum we are building, which will carry into 2027 and ultimately stabilize our existing assets in 2028. I want to recognize our entire team for their hard work and commitment. Our results and continuing improvement are a product of their energy and dedication. They should be incredibly proud of what they've accomplished. With that, I'll turn it over to Lena to talk through our first quarter financial performance in detail.

Thanks, Matt. Before walking through our Q1 results, I want to highlight a change to our segment reporting that was implemented at the start of the year in an effort to improve clarity and better reflect how we view the operations of the business. Beginning with the first quarter of 2026, our segment reporting measure used for reporting the performance of the hospitality, entertainment, and landlord operation segments is operating EBITDA. We define operating EBITDA as earnings before interest, taxes, depreciation, amortization, other income or loss, gains or losses from the sale of assets, equity and earnings or losses from unconsolidated ventures, provisions for impairment, G&A expenses, and any intercompany transactions between segments. We believe that because operating EBITDA excludes non-recurring and below-the-line income and expenses, it's a more comparable representation of the core performance of our operating businesses.

For the quarter ending March 31, 2026, total operating EBITDA of the company improved by $3.1 million or 21% year-over-year to a loss of $11.8 million despite a 21% reduction in revenue. The majority of the company's EBITDA improvement year-over-year is a result of progress made within the hospitality segment. Hospitality operating EBITDA improved by $2.9 million or 36% year-over-year, driven by the closures of the Tin Building and Malibu Farm. While hospitality operating EBITDA improved, revenue within the hospitality segment decreased 34% or $2.6 million year-over-year, primarily driven by the closures of the Tin Building and Malibu Farm, which together accounted for approximately $3.1 million of the decline.

This was partially offset by favorable year-over-year comparison at Gitano, which operated for a full quarter in 2026. Excluding the impact of Tin Building, Malibu Farm, and Gitano, hospitality revenue declined 22% year-over-year, primarily driven by inclement weather, including extended periods of below freezing temperatures and two major snowstorms that reduced operating hours and overall foot traffic this winter across our restaurants. Additionally, we strategically closed Mister Dips for the winter, and we'll reopen the concept in conjunction with our concert season, and we suspended or limited lunch service at numerous other venues for most of the period. These actions reflect our focus on optimizing the financial outcomes of the businesses.

While the Tin Building repositioning and closure of Malibu Farm will continue to result in decreases in hospitality revenue as we progress through 2026, we've only realized a small portion of the EBITDA benefit expected from these changes. These actions are part of our broader effort to reposition key parts of the portfolio into new high-potential concepts. Staying in N.Y., landlord operating EBITDA remained flat year-over-year. Rental revenue decreased $1 million or 27%, driven by a straight-line rent adjustment related to the iPic's long-term lease of approximately $800,000 following its Chapter 11 filing in February. We received Q1 cash rent in full and will continue recording rent received on a cash basis until bankruptcy proceedings are completed.

Excluding the iPic non-cash adjustment, Q1 rental revenue decreased 4% year over year on a consolidated basis, primarily reflecting the expiration of the ESPN lease in Q3 of 2025, partially offset by Nike termination fees recognized in the current quarter. The decrease in revenue is offset by expense savings of $1.1 million or 14%, achieved through a focus of driving cost efficiencies within our landlord operations. We expect these savings to build throughout the year, further supported by additional cost reduction initiatives and efficiencies. Looking ahead, we expect incremental improvements to rental revenue as the year progresses. Effective April 1st, we transitioned Gitano NYC from an internally managed hospitality venue to a third-party lease agreement.

We also had a new tenant, Cork, a local wine bar, open their doors in April. They will be followed by Willett's and the Balloon Museum rent commencements in the coming months. Moving to entertainment, operating EBITDA improved by 3% compared to the prior year as the suspension of the Pier 17 rooftop ice rink more than offset accelerated Q1 expenses related to the Las Vegas operations and the concert series. As Matt mentioned earlier, Las Vegas had a great start to the year. Las Vegas revenue grew by 8%, driven by 2 sold-out games between the Athletics and the Los Angeles Angels during Big League Weekend, with over 20,000 people in attendance, resulting in strong growth in ticket and concession revenues versus prior year. The Aviators hosted 4 regular season games in Q1 compared to 3 in the prior year.

Las Vegas year-over-year expenses were up 26% and were unfavorably impacted by PCL replacement following our Enchant holiday activation and certain front-loaded costs of the season, such as sponsorship signage, as well as costs incurred as a result of the additional home game in Q1 2026. Concerts. The rooftop at Pier 17 stage is typically constructed in April and is a Q2 cost when referencing prior years. This year, the stage was built in March to accommodate the Spotify BTS event, pulling some production costs forward into Q1. As mentioned in our previous earnings call, we referenced Q4 2025 as a baseline for what our general and administrative expenses can be going forward, with certain quarter-to-quarter fluctuations. Total G&A for Q1 2026 is $8.1 million.

Excluding $1.4 million of restructuring costs related to the Tin Building and corporate restructurings, in the quarter, G&A totaled $6.7 million, generally in line with the prior quarter reference point. On a year-over-year basis, G&A improved by $1.7 million inclusive of restructuring costs, or an improvement of $3.1 million or 31%, excluding these restructuring costs. Underscoring our focus on finding savings within our corporate infrastructure while continuing to effectively support the business. Excluding current quarter's restructuring costs, savings were primarily driven by year-over-year payroll reductions, lower legal and consulting fees as we continue to work towards stabilization post-spin, along with broader cost discipline across the company. In Q1, we announced a change in auditor from KPMG to Grant Thornton, which we expect to contribute to further reductions in G&A expense.

In the quarter, we recorded $20.1 million of depreciation and amortization expense, resulting in a $12 million year-over-year increase, mainly driven by a $14 million impact from write-offs related to the Tin Building repositioning as we complete our landlord obligations under the Balloon Museum lease. Within other income or loss, we recognized a $2.2 million net expense in Q1, primarily driven by restructuring costs and pre-opening expenses. Of this, $2 million of restructuring costs were predominantly related to the Tin Building transition to the Balloon Museum. The remaining impact included pre-opening expenses largely associated with the ramp-up of the newly opened Sadie's Restaurant & Garden Bar. Separately, in conjunction with the Tin Building closure, we recorded an approximate $340,000 provision for impairment related to unamortized artwork specific to the business.

Moving to interest income and expense, we experienced an unfavorable swing with net interest expense of $0.3 million in the quarter compared to net interest income of approximately $1 million in the comparative quarter of the prior year. This change was driven by the capitalization of interest related to 250 Water Street in the prior year period, whereas in 2026, we incurred interest expense through the date of closing, along with lower interest earned on invested cash balances. Within equity and earnings or losses from unconsolidated ventures, both Lawn Club and Jean-Georges Restaurant Group were negatively impacted by the inclement weather and snowstorms in Q1, a trend seen across the broader New York City hospitality sector, resulting in an approximate $1 million loss for the quarter.

The Lawn Club was further impacted by a 10-day closure in January due to waterline repairs, as well as higher depreciation expense compared to the prior year quarter. First quarter net loss attributable to common stockholders was $44.1 million, an increase of $12.2 million in loss or 38% year-over-year. Net loss per share was $3.47 compared to $2.51 in the prior year, representing a $0.96 per share increase in loss or 38%. The key drivers, as stated earlier, were the accelerated depreciation resulting from the repositioning of the Tin Building, restructuring costs, and the inclement weather in New York venues, both in hospitality and unconsolidated ventures.

On a non-GAAP adjusted net income basis, results improved by 21% or approximately $4.9 million year over year to a loss of $17.9 million or a loss of $1.41 per share. The improvement was driven by the early benefits of the Tin Building repositioning and continued improvements to GNA. Capital expenditures in Q1 totaled $6.1 million, with the majority of investments related to landlord work from Meow Wolf and the continued build-out of Flanker Kitchen + Sports Bar and Hidden Boot Saloon, along with our other projects, including Sadie's and the Public Service concept. As a reminder, the $70 million-$90 million of capital expenditures discussed in our prior earnings call represents our total remaining investment from year-end 2025 through stabilization of the portfolio, which we currently anticipate by 2028 rather than a single year spend.

This includes tenant improvements and leasing commissions associated with executed leases, landlord work and capital required to activate remaining vacancies, as well as internal build-outs, including the Pier 17 event space and other experiential offerings. Total cash, including restricted cash, increased by $57.3 million from year-end 2025 to $144.7 million as of Q1 2026, mainly as a result of the completion of the sale of 250 Water Street in February of this year. A portion of our restricted cash balance, over $27 million, is held in escrow to complete certain post-closing obligations related to 250 Water Street, where we anticipate the completion of these obligations and receipt of the majority of these proceeds by year-end. With the 250 Water Street loan now repaid, the only outstanding debt of the company is the $39 million Las Vegas Ballpark loan.

At quarter end, we held a net cash position of $105.6 million as of March 31, 2026, reinforcing the strength of our balance sheet as we continue executing on our transformation and positioning the company for long-term sustainable growth. With the changes made over the past 4 months, our efforts to simplify our operating structure through the Tin Building repositioning and sale of 250 Water Street, combined with the grand opening of Sadie's and kickoff of the Aviators and Rooftop at Pier 17 concert seasons, are helping us build momentum on all fronts towards creating authentic experiences for our guests and long-term value for our shareholders. We'll now open the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Your first question comes from Matthew with Jones Trading. Please go ahead.

Hey, guys. Good morning. Congrats on all the continued progress. With 250 Water Street behind you guys have an ample amount of cash. I apologize if I missed the number for continued CapEx at the Seaport, but historically, it was in that $70 million-$90 million range. You know, is that still kind of what you guys are expecting? You know, with the cash that's remaining, you know, what should we expect for you guys to look for in terms of deployment?

Thanks, Matt. Yeah, I think the $70 million-$90 million is still the number. We had minimal spend in Q1. I think it was about $6 million. That'll come off of that number, but that's still the right number to get the stabilization. In terms of the rest of the cash, you know, I think we're gonna continue to be opportunistic, right? We have the buyback program in place, which gives us the tool in the toolbox in the event that it makes sense to use. I think we've been pretty consistent in saying that there are some limitations around that until we get past our two-year anniversary mark. You know, beyond that, I think the company is evolving, right?

It was a disparate collection of real estate and operating assets, and I think we've rounded it into a more of an experiential platform focused on owning, operating, and activating the destination. You know, we've got hospitality, food and beverage, live entertainment, cultural programming, retail, public activations. It all, it all centers around creating that emotional connectivity that we talked about in the remarks. We'll evaluate different models, whether that's an asset-light model, where we're bringing our special sauce, so to speak, to other real estate owners. We'll evaluate other opportunities as they come our way. You know, capital allocation is a point-in-time decision, and we're gonna evaluate all of our options before we put anything to work.

Got it. That's helpful. Then, you know, as it relates to the event space, you know, what are you guys expecting there in terms of timeline? I know you mentioned kind of that middle of the year 2027. Is there anything that needs to happen before you guys kinda, you know, break ground there?

Yeah

construction?

I'll let Lenah talk about how we've gotten back control of some of that space. You know, we're in design. We're largely through design, now we're getting into sort of the nuts and bolts of scope and timing and all of those things. I think mid-2027 is a pretty safe timeline. Hopefully, we're ready to go earlier than that because we wanna start booking events as soon as we can.

Yeah, Matt. Earlier we had said, you know, the Nike lease didn't expire until February of 2027, which was a part of our planned event space. We've actually recently been able to negotiate an agreement with Nike to get back the space early, finalize the termination of the lease, and accelerate the payments of the past due rent and termination fee. That happened really recently, so it'll be a Q2 event. We have the space back now, and we're able to start the planning and build out of that space.

Awesome. Appreciate the color there. You know, it looks like the largest space that you guys kinda still have to lease up at the Seaport is One Seaport Plaza. You know, what have the talks been like there? You know, what are the possible tenants? You know, do you think you guys could foresee splitting that box up to do something similar to what you've already done at the Seaport in terms of smaller tenants?

Yeah, you're right, Matt. That is the largest space remaining. It's 2 floors, about 20,000 square feet, give or take. I think it can be split up. Previously, it was an Abercrombie and a Superdry, some more traditional retail. We've had a lot of conversations around it. I think what we're trying to do is figure out the phasing of it. It arguably has some of the best visibility of space that we have 'cause it sits right on the corner of Fulton and Water Street, and there's a lot of foot traffic and driving traffic that go by it. Just finding the right tenant and then playing off of that right tenant who has that corner visibility is really where our focus is for that.

Got it. That's helpful. You know, looking on, slide 15 of the supplemental, could you kinda walk me through the differences of, you know, what an operating and license structure is and how that kinda, you know, impacts the model?

Yeah, no, it's a, it's a good question, and Gitano's a good reference point. When we launched Gitano, we wanted to get it open as soon as we could for the season, and so we operated the space under their brand while they went through the liquor license approval process. They've recently gotten their liquor license approval process, as Lenah Elaiwat mentioned in the prepared remarks, we've transitioned that from a license to a lease. We'll probably make mid to high $6 figures more cash flow this year than last year, just given the ramp-up of the business and some of the pre-opening costs related to that. For us, you know, the owner of that business is gonna operate it more entrepreneurially, and they're gonna live and breathe the concept.

You know, we're gonna ship the execution risk to them and just purely get the rental income. I think that rental income approach applies to Meow Wolf, to Willett's, to Cork, to the Balloon Museum. All of those have percentage rent lease structures, so if they do better than their projections, we should get additional rent beyond what's contractual. And then things like Flanker, and the Public Service, Public Records concept, you know, those are license agreements where we'll either operate the concept or they'll manage it for us, which is very similar to how we work with The Fulton, where we operate The Fulton, but it's a Jean-Georges concept, or Carne Mare, where it's an Andrew Carmellini concept, but they operate it on our behalf.

Each one's a little bit different. On the license deals, those are gonna have more operational leverage on them because the full impact of the P&L, both revenues and operating expenses, is gonna be on our P&L. Whereas obviously the leases are gonna come through the landlord operation side, and they'll be pretty high flow through, but less revenue to flow through.

Got it. Yeah, that's helpful there. Then touching on the Tin Building and kind of the Balloon Museum, has, I think you kind of mentioned June, July-ish there for the opening. You know, were there any setbacks that you guys kind of experienced as you went through the process or, you know, that you foresee that could delay that opening a little bit?

I mean, opening's gonna be dependent on the Balloon Museum fitting out their space. We're on target and on track to deliver to them as expected in the lease when we negotiated it. There's always moving parts, especially when we're doing the amount of work that we're doing in the timeframe that we're doing it. Our team's done a great job working through some of the challenges that pop up, and we're still on schedule to hand it over to Balloon Museum.

Awesome. That's great. Thank you for the call this morning. I appreciate it as always.

Thanks, Matt.

Thank you. Your next question comes from Ross with RLH Investment. Please go ahead.

Good morning, Matt. How are you?

Hey, Ross.

Quick questions. He hit upon your prior question, he hit upon most of my questions. Going back to page 414 on the remaining vacancies, could you talk about, I guess you touched upon the Pier 17. You think you're gonna be able to use up most of that 7,700 square feet in the next year or so, or what's your plan for the excess there, as well as, I guess the Schermerhorn Row, the 10,000 square feet there. Give us some thought on, you know, the lease up for that maybe over the next year or so. What are your potential there? Thank you.

Yeah. I touched on 1 Seaport with Matt. In terms of the rest of the vacancy, Schermerhorn Row and Museum Block are largely smaller spaces and we historically have held back on trying to fill those because that's where we're gonna get the highest rent per square foot, and we wanted to have the anchors in place to allow us a little bit more pricing power. Obviously, with Balloon Museum and Meow Wolf signed up and public, along with some of the restaurant spaces, we've got those anchors in place. Now we're just trying to figure out the right merchandising mix between traditional retail, service-based retail, and everything in between. In terms of the Pier 17, that 7,700 square feet is largely the Malibu Farm space that we closed at the beginning of the year.

We're working with some different partners on different options. I think we'll probably have more to talk about on the next earnings call related to that space, but we're making a lot of progress there.

That, the $31 million you're talking about in EBITDA pro forma, that is just all those names on page 15 and excludes all of the vacancies on page.

Correct

14. Is that correct?

That's correct. There's no projections for the vacancy in there, the $31 million is either what we reasonably think will be a year one operating yield, or it's the contractual rent. If the tenants come out of the gate and perform better than expected and there's percentage rent, that would be upside to the $31 million in some of those leases.

Just two last questions. The $6.7 million of corporate quarterly overhead, is that a good ongoing number or would you hope to bring that down to a lesser number in 2027, 2028?

I think we're gonna continue to evaluate it. As you very well know, following the story for as long as you have, we've had a lot of moving pieces. Those moving pieces sometimes cost money. I think we'll have fewer moving pieces going forward, which will allow us to get more efficient. My hope is that that number will continue to come down, probably not at the pace that it's come down over the last 12 months, but we should continue to see improvement there over the next 12 months.

Just one final thing. 85 South Street, any new developments there?

No, it's on the market. We're having active conversations with buyers. you know, we had to disclose a lot more than we traditionally would with the 250 Water Street process, given the materiality of that asset on our balance sheet. I would say our typical approach is not to talk about transactions until they're done.

Okay

disadvantage when we're negotiating. It is on the market, and we are having a whole host of conversations with various potential buyers on how to move that process forward.

Okay. The best of luck. Thank you very much.

Thanks, Ross.

Thank you. Ladies and gentlemen, as a reminder, if you have a question, please press star one. All right. There are no further questions at this time. I will turn the call back over to Matt Partridge. Please go ahead.

Thanks, operator. I appreciate everybody joining us today. Thank you for the support, and we'll talk to you on the next earnings call.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Greetings, and welcome to the Seaport Entertainment Group Inc. Fourth Quarter and Full Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jason Wilk, Senior Vice President of Finance. Please go ahead.

Thank you, operator, and good morning, everyone. With me today is our President and Chief Executive Officer, Matthew Morris Partridge, and our Chief Financial Officer, Lina Eliwat. Before we begin, I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-Ks, Form 10-Qs, and other SEC filings. You can find our SEC reports, earnings release, and quarterly supplemental information on our website at seaportentertainment.com. I will now turn the call over to Matthew.

Thanks, Jason, and good morning, everyone. As we outlined during our inaugural earnings call last March, our focus in the first full year as a stand-alone public company was to address multiple opportunities for improvement, including outsized priorities within the Seaport, as we work to position the organization as a scalable real estate-centric hospitality and entertainment company. Looking back and taking stock of our accomplishments, we made tremendous progress in 2025 and year to date 2026, addressing these opportunities. Some of our more notable achievements in 2025 include generating a 24% year-over-year improvement in our net loss, a 49% year-over-year improvement in our non-GAAP adjusted net loss, leasing, programming, and finalizing development plans for approximately 153,000 square feet across the Seaport, including signing agreements with Meow Wolf, Planker Kitchen and Sports Bar, Hidden Boots Saloon, Willits NYC, Cork Wine Bar, and other exciting additions I will discuss shortly, internalizing food and beverage operations across many of our company wholly owned and joint venture owned restaurants in the Seaport neighborhood, Las Vegas Aviators winning the 2025 Pacific Coast League championship, the franchise's first PCL title since 1988, and hosting and competing in the Minor League Baseball Triple-A National Championship Game, further establishing the Seaport as a premier event destination by hosting multiple rooftop and neighborhood-wide marquee events, including more than 60 concerts, the Macy’s Fourth of July Fireworks, and the New York City Wine and Food Festival, and putting 250 Water Street under contract to sell, which subsequently closed last month, early February. The process of finalizing the sale of 250 Water Street was longer than anticipated. After completing additional diligence and evaluating market conditions, we believe this transaction represented the best risk-adjusted outcome for the company. The transaction will generate net proceeds of approximately million after we work through some post-closing obligations, which should largely be resolved in 2026. With the sale complete, we have eliminated $7 million of cash burn related to interest expense and carry costs, and we now have additional capital on our balance sheet and a clearer runway to execute against our strategic priorities. In addition to the 250 Water Street sale, the other significant announcement in early 2026 was the closure of the Tin Building in its current form as a culinary experience. We are very appreciative of Chef Jean-Georges, his team, and the Tin Building staff for their partnership, dedication, and effort. Tin Building was an ambitious undertaking and Chef Jean-Georges created a truly beautiful and distinct destination. Our partnership with the Chef and his team remains strong, and we look forward to continuing to work with them both at the Seaport and more broadly as a 25% owner in Jean-Georges Restaurants. Given the historical challenges of the Tin Building, we conducted a comprehensive assessment of the operating model and evaluated a range of alternatives. In the end, we concluded that the asset required a fundamental repositioning of both its use and operating structure to achieve long-term sustainability. As a result, we signed a new lease with Lux Entertainment to bring their highly Balloon Museum experience to the Tin Building, which will serve as their flagship U.S. location. For those of you who are less familiar with the concept, Balloon Museum is an award-winning large-format interactive contemporary art experience. To date, the Balloon Museum exhibitions have toured through 23 major cities across Europe, North America, and Asia, often within historic and landmark buildings and with works from internationally recognized artists. They have welcomed more than 7 million visitors globally, and when set alongside Meow Wolf, the Rooftop at Pier 17 concerts, existing and new restaurant offerings, our recently announced expanded event space, and other retail, cultural, and event-driven initiatives, Balloon Museum further complements the growing set of experiences within the Seaport that we believe will drive broad-based visitation by local residents, New Yorkers, and tourists alike. Under our agreement with Lux Entertainment, the initial lease term is five years with two five-year extension options. The base rent includes annual contractual escalations and a percentage rent component above a contractually established revenue threshold. From a capital standpoint, work is under way at an estimated cost of approximately $5 million with delivery to the tenant expected by the 2026. Lux Entertainment will complete its interior fit-out at its own expense, and they anticipate opening this summer. Strategically, this agreement fundamentally changes the financial profile of the Tin Building, transitioning it from a negative cash-burning operation to a stabilized positive free cash-flowing asset that further complements the broader programming of the neighborhood. When compared to the financial performance of the Tin Building in 2025, the Balloon Museum lease has the opportunity to improve the company's pro forma annual EBITDA by more than $22 million. This progress has positioned us for long-term financial stability, something this collection of assets has not experienced in recent history. In terms of our go-forward focus, we have some very exciting things on the horizon. During the fourth quarter, we signed a ten-year agreement with a renowned Brooklyn-based 11,000 square feet in the historic cobblestones. We plan to announce our partner and the name of the project in the coming months, and we believe this new concept, which is centered around a multifaceted, evolving hospitality and music experience, further expands on the diversified programming we are curating throughout the Seaport neighborhood. Additionally, we will open a new 400-seat, 1,000-person open container district that will be anchored by a new restaurant called Sadie’s. Sadie’s will occupy the first and second floors of a previously vacant restaurant space located at 19 Fulton Street and will include the outdoor garden bar that sits at the center of the historic pedestrian-only cobblestones. The restaurant and bar will feature New American food at an accessible price point, filling a need for a larger format communal and approachable restaurant within the Seaport. Sadie’s will also have a robust programming calendar featuring celebrations for seasonal, sporting, and cultural moments including events centered around music-driven activations, the Kentucky Derby, People World Cup, U.S. Open, America 250, Oktoberfest, and other evergreen programming. And finally, in January, we made the difficult decision to close the Malibu Farm location at Pier 17. We have had preliminary discussions regarding several replacement concepts that we believe could be additive to our overall plan for the Seaport, including replacing some of the culinary gaps that have been created with the closing of the Tin Building. Beyond the incoming entertainment and food and beverage opportunities, we intend to expand the previously announced Pier 17 event space from 17,500 square feet to more than 40,000 square feet across three floors with a focus on premium corporate, not-for-profit, convention, and social events. This will create one of the largest multifaceted event spaces in New York City featuring iconic, expansive views of the East River, Brooklyn Bridge, and Manhattan and Brooklyn skyline. All levels will be accessible via a dedicated ground floor elevator entrance and staircases with connectivity to the Rooftop at Pier 17. The event space will also leverage Pier 17’s other unique attributes including proximity to major transportation hubs, an access-controlled driveway, and adjacency to a dense mix of entertainment and dining options. Furthermore, the expanded event space at Pier 17 provides several strategic benefits to the company including further positioning the Seaport as a destination for large-scale meetings and events through integrated partnerships with third-party planners and caterers, creating a compelling weather contingency option that improves the rooftop’s utilization for non-concert events, diversifying our revenue sources with incremental weekday and off-peak demand, leveraging our existing infrastructure and capabilities—which were on display during our campus-wide activations during the New York City Wine and Food Festival and mid-July 4 fireworks—and improving utilization of space that was previously positioned for office use. While we are still finalizing some of the details for this project, including timing, we currently expect this initiative to generate long-term unlevered cash-on-cash returns above 20% with an estimated payback period under five years. We will provide more information about the event space on our first quarter earnings call. At the Rooftop at Pier 17, which was recently named by the 2026 Rolling Stone Audio Awards as the Best Outdoor Music Venue in the United States, our team is ramping up for the 2026 Seaport Concert Series, which begins May 2. This year builds on a strong 2025 season that delivered our highest ever total attendance and all-time highs in customer experience and staff friendliness scores. From a revenue optimization standpoint, we are focused on expanding premium upsell offerings at the Liberty Club and Patriot. These initiatives are designed to drive incremental high-margin revenue while enhancing the overall guest experience with more customized and differentiated hospitality offerings. Taking a step back and looking at the Seaport overall, as of December 31, the Seaport neighborhood was approximately 90% leased or programmed, leaving roughly 47,000 square feet of vacancy. On a pro forma basis for the Malibu Farm closure, this number is closer to 53,000 square feet. For the remaining vacancy, we are predominantly focused on complementary daily-needs and amenity-oriented tenants and incremental food and beverage opportunities where we have existing restaurant infrastructure. Since we became a stand-alone public company in August 2024, we have leased or programmed more than 220,000 square feet which we anticipate will result in additional stabilized EBITDA of more than $30 million. Lastly, before we shift along to Vegas, I do want to highlight that we are continuing to explore the sale of our 21-unit apartment building at 85 South Street. We will provide further updates on that transaction if or when it is completed. Moving west, the team in Las Vegas is transitioning from the winter activation, Enchant, back to regular season baseball programming. During the fourth quarter, we internalized the day-to-day operations of Enchant to strengthen our customer engagement and introduce new audiences to the ballpark. This process resulted in some transitional costs, but overall better positions us for improved execution and profitability in 2026. In terms of early demand for the baseball season, group and season ticket sales are pacing ahead of last year, including strong momentum for Big League Weekend when the Athletics face the Angels on March, followed by Opening Day for the Las Vegas Aviators, March 27. Additionally, after last year's hiatus, Las Vegas Ballpark will once again host the Savannah Bananas for three games starting April 30 with ticket sales currently outpacing 2024 levels. Overall, we are excited about the support for the team and how it is materializing in ticket sales. And from an operating standpoint, we expect incremental efficiencies in 2026 as we apply the learnings from Enchant and better control certain variable expenses. As a result, we expect continued margin improvement in 2026 across the entire Las Vegas operation. At the corporate level, we recently received Board approval to file a $150 million shelf registration statement and a $50 million stock repurchase program. The shelf gives us flexibility and allows us to access the capital markets efficiently in the future if a strategic opportunity makes sense. At the same time, with a strong balance sheet and our recent momentum, maintaining optionality to buy back stock could be a good long-term capital allocation decision. Both programs are tools for us as a public company that provide the ability to be opportunistic, but neither should be interpreted as an immediate plan to issue or repurchase securities. Finally, before I turn it over to Lina, I want to sincerely thank our team for their resilience and hard work and compassion. Their support of the company and fellow team members, especially through these transitional moments, has been tremendous. I am proud of the progress we have made. I am confident we will continue building on the strong momentum we saw through year-end 2025 and into 2026. With that, I will now turn the call over to Lina.

Thanks, Matt. Before I get into the company's fourth quarter and full year financial performance, I would like to remind everyone of some changes made at the start of 2025, including renaming our Sponsorship, Events, and Entertainment segment to Entertainment. In conjunction with this change, we reallocated sponsorship and events revenues and expenses to the respective segments that most appropriately reflect the source of the sponsorship or event. These changes are reflected in both the current and prior-year periods presented on our consolidated and combined statements of operations. Beginning in 2025, and in conjunction with the internalization of our food and beverage operations, we consolidated the Tin Building into our Hospitality segment. In prior years, the Tin Building was accounted for as an unconsolidated joint venture, and our share of net loss was reflected in the equity in earnings or losses from unconsolidated ventures line on our consolidated and combined statements of operations. In an effort to provide more comparable information, we will refer to the 2024 operating results on a pro forma basis reflecting the inclusion of the Tin Building as a consolidated entity during the prior-year period when providing year-over-year comparisons on this call. In addition, we will reference operating EBITDA, which excludes losses on assets held for sale, impairment charges, and other nonrecurring items included in other income or loss related to the segment or on a consolidated basis, to provide more comparable operating results. Fourth quarter and full year 2025 net loss attributable to common stockholders was $36.9 million and $116.7 million, respectively, representing a year-over-year improvement of 11% for Q4 2025 and 24% for the full year 2025. On a per share basis, net loss attributable to common stockholders was $2.89 in Q4 2025 and $9.18 for the full year 2025, representing a 2045% improvement, respectively. Non-GAAP adjusted net loss attributable to common stockholders was $17.5 million for the fourth quarter 2025 and $54.1 million for the full year, representing improvements of 949%, respectively, compared to the same periods in 2024. On a per share basis, non-GAAP adjusted net loss was $1.30 for the fourth quarter 2025 and $4.26 for the full year 2025, representing a year-over-year improvement of 184%, respectively. In the fourth quarter 2025, total consolidated revenues were $29.5 million, a 7% year-over-year increase when compared to pro forma 2024. For the full year 2025, total consolidated revenues were $130.4 million, which is essentially flat to full year 2024 consolidated revenue on a pro forma basis. As a reminder, consolidated revenues exclude the financial results of our unconsolidated ventures, such as the Lawn Club and our investment in Jean-Georges Restaurants, since they are reflected in the equity in earnings or losses from unconsolidated ventures line on our consolidated and combined statements of operations. In Hospitality, fourth quarter revenues declined 23% on a pro forma basis, primarily driven by lower performance at the Tin Building and unfavorable year-over-year comparisons resulting from events and activations in Q4 2024 that did not repeat in 2025. One of those activations was a holiday-themed partnership on the Rooftop at Pier 17 with The Dead Rabbit, a world-renowned Irish cocktail bar in Lower Manhattan. Another was a large-scale private event across multiple venues at Pier 17. Total food and beverage revenues within the Hospitality segment, inclusive of Lawn Club, declined 15% year over year. On a same-store basis, food and beverage revenue declined 20%, the most meaningful difference relating to Gitano, which was not included in the same-store revenues in the fourth quarter due to it being under construction during 2024. In the fourth quarter 2025, Hospitality consolidated adjusted EBITDA, including earnings from unconsolidated ventures, improved by $11 million year over year on a pro forma basis, mainly as a result of the $10 million impairment charge recognized in the prior year relating to warrants of Jean-Georges Restaurants, which were nearing expiration. Excluding this impairment and other items included in other income and loss, Hospitality operating EBITDA improved by 17% year over year on a pro forma basis, driven by better flow-through at the Tin Building, continued growth at the Lawn Club and Gitano—which continues to drive increased revenue as they refine their operations—as well as the cost savings realized from the internalization of food and beverage operations earlier in 2025. During the full year 2025, Hospitality revenue declined by 16% on a pro forma basis. The decline was primarily driven by overall performance at the Tin Building, reflecting both the closure of certain venues within the building and increasing top-line softness, as well as declines from certain legacy stand-alone restaurants. This was partially offset by the continued growth of Gitano and the incremental revenue generated from larger events such as the Macy’s Fourth of July Fireworks event. Total 2025 food and beverage revenue, including Lawn Club, declined 8% year over year. On a same-store basis, food and beverage revenue declined 5%. This more moderate decline reflects the exclusion of the non–Dead Rabbit holiday activation and closure of some of the Tin Building outlets in 2025. For the full year 2025, Hospitality consolidated adjusted EBITDA increased $10.5 million year over year on a pro forma basis, mainly reflective of the $10 million Jean-Georges warrant impairment recorded in 2024. Excluding other income and losses—which was primarily impacted by a one-time favorable Hospitality expense reimbursement in 2024—along with excluding the 2024 warrant impairment charge, Hospitality operating EBITDA increased 25% year over year. The improvement was predominantly driven by the internalization of food and beverage operations, disciplined cost-cutting controls at the Tin Building, more measured marketing spend across the portfolio, and continued strong performance at the Lawn Club and Gitano. Turning to the Entertainment segment, fourth quarter revenues increased 68% year over year, primarily driven by the internalization of Enchant’s operations in Las Vegas. Partially offsetting this initiative was the timing of Las Vegas Aviators sponsorship revenue, the absence of the seasonal holiday activations on the Rooftop at Pier 17 in 2025, and two fewer concerts in New York during the prior year’s comparable quarter. Despite hosting fewer shows during the period, concert series food and beverage revenue increased 3% year over year, driven by increased per-show attendance and higher per-customer spend. With the concert and baseball season ending in October, Q4 2025 Entertainment operating EBITDA increased 18% year over year, mainly from better flow-through achieved by foregoing the seasonal holiday activation on the Rooftop at Pier 17, but partially offset by the lower concert count compared to 2024. Total 2025 year-over-year Entertainment revenues increased 14% due to the internalization of Enchant operations in Las Vegas, increased sponsorship revenue in both New York and Las Vegas, and new revenue from previously referenced larger-format events. On a full-year basis, adjusted EBITDA for the Entertainment segment increased by 124% when compared to the prior year, benefiting from improved collections and reduced bad debt, as well as better flow-through by foregoing the seasonal holiday activation on the Rooftop at Pier 17. Our concert business also benefited from the internalization of food and beverage operations as well as strategic reductions in per-show operating expenses. Within the Landlord segment, fourth quarter rental revenue increased 14% year over year on a pro forma basis. This is mainly from the growth of our private events rental revenue, with large-scale events such as New York City Wine and Food Festival contributing to the current quarter improvements. These gains are partially offset by the termination of the ESPN lease in 2025, resulting in the loss of year-over-year comparable rental revenue in 2025. Landlord consolidated adjusted EBITDA declined by $10.1 million on a pro forma basis, primarily driven by a $7 million write-down of 250 Water Street to its final sales price. It was further impacted by the nonrepeating $2 million legal settlement proceeds recognized in 2024. Excluding these nonrecurring items, Landlord operating EBITDA declined 37% year over year on a pro forma basis as expenses increased relating to the timing of accrual for operating expenses such as cleaning, security, and utilities, along with the effects of the nonrepeating rent reserves placed in 2024. For the full year of 2025, rental revenue increased 21% year over year on a pro forma basis, driving most of the Landlord’s 18% year-over-year revenue growth. The increases to rental revenue were driven by private event rental activity—most notably Jordan Brand’s The One Tournament Global Finals event and the New York City Wine and Food Festival—as well as termination income associated with our Nike office lease, and a decrease in rent reserves compared to prior year. As a reminder, Nike exercised their termination within their lease but remains a tenant of Pier 17 through February 2027. The Landlord segment’s 2025 consolidated adjusted EBITDA declined 55% year over year on a pro forma basis, primarily due to $13.4 million of one-time nonrecurring charges. These include an $11 million loss on the write-down of 250 Water Street in conjunction with its classification as held for sale and a $2 million write-off of capital spent on the rooftop winter structure. Excluding these nonrecurring items, the Landlord segment operating EBITDA for the full year increased 36% year over year on a pro forma basis. The improvement reflects the previously mentioned revenue growth, reduced overhead compared to the pre-spin structure in prior year, and improved operating expense savings year over year. Overall, consolidated segment adjusted EBITDA for the fourth quarter 2025—which reflects segment performance before G&A, interest, depreciation, amortization, and includes results from unconsolidated ventures—improved by $1.3 million year over year on a pro forma basis. Excluding the nonrecurring items discussed earlier, such as the loss on 250 Water Street, the prior-year warrant impairment, and the favorable legal settlement recognized in the prior year, consolidated operating EBITDA increased 5% year over year on a pro forma basis in the fourth quarter. For the full year 2025, consolidated segment adjusted EBITDA improved by $2.8 million on a pro forma basis. Excluding the nonrecurring items—the 250 Water Street for-sale loss, the rooftop winter structure write-off, the prior-year warrant impairment, the favorable Hospitality expense reimbursement and legal settlement recorded in the prior year—consolidated operating EBITDA increased 33%, or more than $13 million, year over year on a pro forma basis. Overall, with total year-over-year revenue relatively stable, this bottom-line improvement was driven by reduced costs as our operating stabilizes in our first full year as a stand-alone public company as well as overall cost optimization initiatives we have implemented across each segment in 2025. During Q4 2025, we incurred general and administrative expenses of $6.8 million, an improvement of 31% when compared to the fourth quarter of prior year. For the full year 2025, G&A expenses were $42.8 million, representing a 32% improvement compared to 2024. Prior-year G&A was higher overall due to our predecessor’s cost structure and transitional expenses related to our separation from Howard Hughes. While there were significant G&A improvements achieved in 2025 through streamlining and optimizing operations, they were partially offset by $12 million in expenses related to our leadership transition. As we continue to stabilize our operating model, we expect to continue to improve upon our cost structure with Q4 2024 as our new benchmark. During the fourth quarter 2025, interest expense increased by $3.3 million compared to the comparable prior-year quarter, primarily due to interest expense capitalized on 250 Water Street in 2024 that did not recur in the current period and a decrease in interest earned on invested cash. As a reminder, we suspended interest capitalization on 250 Water Street midway through Q3 once the asset was classified as held for sale, resulting in higher reported interest expense in the fourth quarter 2025. For the full year, net interest income totaled just under $0.5 million, compared to net interest expense of $6.8 million in the prior year, a $7.2 million year-over-year improvement driven by higher interest income on invested cash, increased interest capitalization earlier in the year prior to the held-for-sale classification of 250 Water Street, and lower amortization of finance costs following our separation. Compared to 2024, equity in earnings or losses from unconsolidated ventures improved by $9.7 million year over year on a pro forma basis, and for the full year improved $11.5 million year over year on a pro forma basis. This is mainly a result of the $10 million impairment of the warrant previously described in 2024. Excluding the warrant impairment, equity in earnings or losses from unconsolidated ventures declined approximately $300,000 in the fourth quarter year over year on a pro forma basis and increased 169%, or $1.5 million, on a pro forma basis for full year. This is reflective of continued strength at the Lawn Club as it scaled through its second full year of operations. Capital expenditures in the fourth quarter 2025 totaled $2.8 million. For the full year, capital expenditures totaled $30.8 million. Excluding capitalized costs associated with 250 Water Street development, the majority of spending was related to Meow Wolf landlord work, rooftop winter structure, completion of Gitano and Riverdeck Bar build-outs, as well as other landlord work and maintenance capital costs across our existing operations. Long-term debt outstanding as of year-end was reduced to $100.4 million, reflecting a $1 million decrease primarily related to the scheduled principal amortization on the Las Vegas Ballpark loan. Net debt to gross sales at year end was approximately 2%. Subsequent to year end, and in conjunction with the sale of 250 Water Street, we paid off the $61.3 million variable-rate loan associated with the property, further strengthening our balance sheet. Our year-end 2025 cash, restricted cash, and cash equivalents balance was just over $87 million, and pro forma to reflect the proceeds from the sale of 250 Water Street, our cash, restricted cash, and cash equivalents balance would be $163 million. As we move through 2026, our cash position provides meaningful liquidity and optionality for the company as we explore various investment and capital allocation opportunities for the long-term benefit of the organization and our shareholders. With the progress made, we have materially improved the company's financial performance, strengthened the company's balance sheet, and laid the groundwork for sustainable long-term growth and value creation. We will now open for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from Matthew Erdner with JonesTrading. Please go ahead.

Hey, good morning, guys. Thanks for taking the question, and congrats on all the progress so far. Lina, you just mentioned that you guys have $163 million cash pro forma. How much of that is committed to, you know, current projects and getting them online at the Seaport? And then with whatever is remaining there, you know, what are you guys kind of targeting there for deployment?

Hey, Matt. Good morning. So we spent about $30 million in 2025 in capital. With our expectation for everything we have announced plus existing vacancy to get to stabilization is another—we expect around another $70 to $90 million. We had initially said at the onset a range of $100 to $125 million to get to stabilization. So I believe we are still, you know, expecting to target something within that range.

Hey, Matt. In terms of capital allocation, you know, we are sort of at the front end of this. Obviously, we have been focused on the existing asset base. I think we are going to look at a lot of different things. Right? We are evaluating or we are starting to evaluate opportunities in the hospitality, entertainment, and event spaces. Obviously, that is core to what we are doing at the Seaport and what we do out in Las Vegas at the ballpark. I think we could potentially look at other assets similar to the Seaport, we could look at companies that operate within those businesses that have scalable intellectual property and brand recognition. But we could also be opportunistic and utilize the buyback program that we announced from a capital allocation standpoint and effectively reinvest into the company, depending on where the stock is trading. So we are going to be opportunistic. And I do not think we have any definitive path yet because we are sort of at the forefront of evaluating the opportunity. So—

Got it. That makes sense, and that is helpful. And then you know, you mentioned on the event space, kind of that 20% return there. Are there any internal hurdles that you guys are looking to achieve, you know, as you guys deploy this cash?

I think it depends on the business. You know, obviously, the hospitality space is notorious for relatively low margins. I think the events business is a much better margin-oriented business. I think where we see some opportunity potentially is to leverage the existing team. We have a lot of talent in the building, and obviously, they are doing a great job executing on what we have. So if we can find things that complement the existing skill set, that is going to improve the flow-through of whatever we allocate capital to. So it is a moving target. I would not say we have any hard and fast financial targets yet, but, you know, we are obviously focused on growing earnings as efficiently as possible with the best flow-through possible.

Yep. Yep. Got it. And then, you know, as it relates to the remaining space at the Seaport, you know, have you had any discussions there? And then, you know, I guess, what additional growth do you think that can drive on top of the—call it, $33 million, $32 million of EBITDA that has been leased.

Yeah. So we have, like Lina said—or maybe I said in the prepared remarks—we have got a little over 50,000 square feet left. You know, I would say a third of that is probably restaurant-oriented space, and it also includes the former Malibu Farm space. So we will be looking at some restaurant concepts that are complementary to all the stuff that we have announced and what still exists at the Seaport. I think beyond that, you know, we have got the Balloon Museum coming. We have Meow Wolf coming. We have the event space, and then we have the Rooftop at Pier 17 concert series. That is a great set of anchors. And then the removal of the Tin Building F&B, you know, I think that the anchor—or the amount of people that the anchors will drive—will benefit all the businesses, and then pulling some of the food and beverage supply out with the closure of the Tin Building and positioning it to Balloon Museum is going to help all the other F&B that we have either announced exist down here or that we will look to fill the existing vacancy with.

Got it. Got it. And then, you know, as it relates to kind of the special events, you know, you had the Wine and Food Festival last year. You know, do you have anything set up like that so far across the year? Is it, you know, going to be event-driven stuff like you said around the World Cup, you know, people going to the bars, interacting in the cobblestones and whatnot?

Yeah. I think Sadie’s is definitely going to be a unique asset for us to program around. The Lawn Club has been very successful doing a lot of corporate events and social event-related business. And so I think those two concepts with the open container that we announced are going to give us a lot of flexibility. We are going to look at everything from doing concerts on the cobblestones or concerts out on the pier—obviously, we do them up on the Rooftop as well. I think FIFA and the World Cup are going to be a unique event this year. It is also America’s 250-year anniversary. So there will be a lot of activity during the summer around that, especially with the Fourth of July fireworks. We are going to do a lot of programming around cultural events and sporting events because I think, you know, whether it is watch parties, whether it is community-oriented events like what we have coming up this weekend around Holi, you know, we are going to do a lot of stuff down here, which I think will bring a lot of people down to the Seaport. It will give them an opportunity to experience everything we have down here, and it will support the businesses that we have got down here.

Yeah. Yeah. That is awesome. And then last one for me, and I will step out. Lina, you touched on it a little bit about G&A, but is there anything that we should expect kind of as a run rate throughout the year?

We have definitely been trending positively throughout the year on G&A, stabilizing our organizational structure, working through technology initiatives. We hope to continue that trend into 2026. Right now, I think Q4 is our new reference point, and we are continuing to try and refine that. But I would use Q4 as our reference point for right now.

Yeah. I think it will be a little up and down, Matt. You know, Q1 is going to have some transitional costs related to the closures that we have announced, plus some other changes to the team. And then I think that will benefit us in the back half of the year. But it will be a little up and down this year. But I think, to Lina’s point, Q4 is a good reference point moving forward, and hopefully we can improve upon it.

Got it. Awesome. Thank you, guys. Appreciate it, and look forward to the continued progress.

Thanks, Matt. Thanks, Matt.

Next question, Patrick Stedelhofer with Kahn Brothers Group. Please go ahead.

Hey, good morning, and congrats on all the recent announcements.

Thanks, Patrick.

My first question is around the kind of criteria for the buyback. You have this great slide on the deck that shows that, you know, the stock is trading at $0.50 of a dollar or probably less than that. And, obviously, that is a great hurdle rate. And so a lot of companies use buybacks on weakness, but you could argue the stock has—it's been all weakness. So I am just curious what would cause you to pull the trigger on this buyback program, kind of when would you ramp it up? And how do you think about allocating it given what an incredible return on investment you can earn by doing this buyback program, which we are very happy to see.

I appreciate the question. You know, for the buyback program, we will not put out any public comments related to parameters or timing. We will report after things are executed on, if and when we use it. Obviously, we think the stock is undervalued, especially given the slide that you are referencing in our supplemental. But we are also cognizant that we are building an organization that can grow over time, and we have relatively limited float. So that is always a consideration when you are using buybacks. This is my fifth public company that I have been part of. We have had buyback programs at all but one of them, and we use them opportunistically. And I think opportunistic is the approach that we will use, but that ultimately will be a Board decision, and we will continue to have those conversations with the Board as we look at the performance of the stock and our relative alternatives from a capital allocation perspective.

Got it. And then the new Balloon Museum, just how do you view that as either complementing or competing with the Meow Wolf experience coming a year later? Just how do these two go together?

Great question. You know, I think the Balloon Museum is definitely complementary. Both of those teams—the Meow Wolf team and the Balloon Museum—know each other, and there is a lot of mutual respect for one another. We spoke with Meow Wolf before moving forward with the Balloon Museum, and they were very supportive of it. So they are going to be complementary to one another. They are both ticketed experiences. They both have done very well in other markets. The Balloon Museum was here in 2023 and did exceptionally well a little farther up the river on Pier 36. So, you know, I think activity breeds more, and having them both open down here really gives the local population, New Yorkers, visitors—everybody—sort of a full-day opportunity to spend at the Seaport. Right? You can come down here for brunch, you can go to the Balloon Museum, you can have lunch, you can go to the Seaport Museum or do some shopping, stay for dinner and a concert, go out to some bars. So we are really trying to create a district that can support the local community because we have got a growing residential population down here, but that can also be a destination for an entire day for a family, a couple, an individual, or anybody in between.

That is great. And on this apartment building you are monetizing or maybe monetizing, could you provide any more details around—kind of is it fully leased? Is it cash flowing? Just anything you can share about what you might be able to achieve by monetizing that asset.

It is cash flowing. You know, there is a component of the units that are rent-stabilized. It is almost 100% leased. I think we have one or two vacant units. It has got a lot of interest. Obviously, we launched it at the end of 2025, the marketing process, knowing that it would be sort of a slow process to end the year and start the year, but the interest is definitely ramped up. So, you know, unlike 250 Water Street where we had some disclosure obligations related to the materiality of that sale, we will probably speak more to 85 South Street if and when we sell it rather than providing more real-time updates, just because providing real-time updates can sometimes put us at a competitive disadvantage when we are trying to work through a transaction.

Understood. Every bit helps. And then last one from us, just how do you think about Vegas versus New York? Obviously, you have a lot happening at the Seaport and you are kind of local there. How do the Vegas properties still fit into the company given both the geographic remoteness of it and all the—just the less news from there. Thanks a lot.

Yeah. I think, look, in Las Vegas, we have got a phenomenal facility with the ballpark. You know, it is at the center of Howard Hughes’s Summerlin community that they continue to add amenities to and grow the population around the ballpark. The fan base of the Aviators is largely a local population, so we would love to see Howard Hughes continuing to invest in that project. That ultimately will inure benefit to the baseball team. I think things like Enchant are where we can add a lot of value—doing 40 days of holiday activation and bringing that in-house and, ultimately, over the long term, being able to implement better cost controls and be a little more creative from a ticketing perspective because we have got a great ticketing team out there. Doing things like that in the off-season is only going to help the profitability of that overall operation out there. So I think we have got some room to create value. That being said, you know, I think live sports is a great business. It is a business that has seen tremendous value appreciation over time. So, you know, if and when somebody has an interest in the team, we will always listen. But I think we would pay some pretty high premium on the team and the ballpark given the quality of the facility and the quality of the operation that we have out there.

Wonderful. Thank you so much.

Thanks, Patrick.

Thank you. I would like to turn the floor over to Matt for closing remarks.

Thanks, everybody. Appreciate the interest and support. We look forward to providing more updates on our first quarter earnings call in early May. Have a great rest of the week.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.