Greetings, and welcome to the Seaport Entertainment Group Third Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jason Wilk, Senior Vice President of Finance. Thank you. You may begin.

Thank you, operator, and good morning, everyone. With me today is our President and Chief Executive Officer, Matthew Morris Partridge, and our interim Chief Financial Officer, Lina Eliwat. 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-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. With that, I will now turn the call over to Matthew Morris Partridge.

Thanks, Jason, and good morning, everyone. First, I'd like to begin by thanking our team, Board of Directors, shareholders, and partners for their support through the company's recent leadership transition. I also want to thank Anton Nikodemus for his contributions during the initial phase of the company's development. I'm honored to be given the opportunity to step into the CEO role, and I'm excited about what the future holds for our company. I'm also thrilled for Lina and the opportunity she has in front of her with her new role. Lina and I have worked together closely since the beginning of Seaport Entertainment Group, including on SEG's separation from Howard Hughes, and in developing the company's accounting and financial infrastructure. She's done an exceptional job stepping into the interim CFO role over the past few months, and I expect that to continue as we finalize 2026 budgets and work our way into the new year. As we move forward, it's important that we continue to refine the company's focus and priorities as we seek to stabilize and then optimize our operating models. This includes continuous reassessment of our existing businesses and organizational structure to ensure we're working towards improved efficiency and ultimately positive operating income. We also want to prioritize financial discipline and thoughtful capital deployment. With our existing cash on balance sheet and expected additional cash from the sale of 250 Water Street, we plan to allocate capital in a way that positions the company to deliver long-term value. This strategy will include further reinvestment into our existing assets to fill vacancies, improve space utilization, and drive customer visitation and engagement. Beyond our existing portfolio, we plan to be opportunistic as we look for opportunities to create long-term value and grow that leverages our existing partnerships and real estate-driven…

Thanks, Matt, and good morning, everyone. Before I get into the company's third-quarter financial performance, I'd like to remind everyone of some changes made at the start of the year, 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 sponsorship or event. These changes are reflected in both the current and prior year periods presented in our consolidated and combined statements of operations. Beginning in 2025 and in conjunction with internalizing 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 and earnings or losses from unconsolidated ventures line on our consolidated and combined statement of operations. In an effort to provide more comparable information, we'll 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 the third quarter, total consolidated revenues were $45.1 million, a 1% year-over-year increase when compared to pro forma Q3 2024. Consolidated revenues exclude the financial results of our unconsolidated ventures, such as the Lawn Club and our investment in John George restaurants, since they are reflected in the equity and earnings or loss from unconsolidated ventures line on our consolidated and combined statements of operations. In our Hospitality segment, hospitality revenues declined 4% compared to pro forma year-over-year in the third quarter. As Matt noted earlier, the decline in hospitality revenue mainly reflects lower revenues at the Tin Building and softness among certain legacy stand-alone…

Thank you. If you'd like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you'd like to remove your question from the queue. Our first question comes from the line of Matthew Erdner with Jones Trading. Please proceed with your question.

Hey, guys. Good morning. Thanks for taking the question and congrats on the continued improvement. You know, as we look to profitability, what do you think are the biggest levers that you guys can pull, you know, to drive that path forward?

Hey, Matt. Good to hear from you. It's a good question, and, obviously, it's a pertinent one. Because we have made a lot of progress. But most of the leasing that we've done, if not all of the leasing that we've done other than Jatano, hasn't rent commenced or started operating. So I think getting some of these tenants open and operating and paying rent, the remaining vacancy, which continuing the momentum on the leasing front to fill up if we include the Nike space that we'll get back in 2027, it's about 100,000 square feet left to program or lease. And then I think focusing on the operational model and the G&A to try to create some efficiencies with what we've already done, but there's more room to go, is really going to be the path to get us to breakeven and then profitability.

Got it. That's helpful. And then, you know, following up on the leasing, could you talk a little bit about the demand that you guys are experiencing down there and I guess the mix of tenants that are looking at your prospective spaces?

Yeah. I think demand's been really strong. There's plenty of articles out there speaking to demand for restaurant space over the last few months in New York City. We've obviously had a lot of success with food and beverage operators, in getting them in the space, whether that's Jatano or Flanker or Cork or Willett. So I think the food and beverage has been strong. We're now starting to focus a little bit more on the more traditional retail tenants while filling out some of our legacy F&B spaces. So we're not short on demand. We're more focused on finding the right partners, the right experiences, and the right tenants for the diverse community and customer base that we're trying to serve.

Got it. And then is there anything that we should expect kind of timing-wise? You know, are you guys wanting to kind of get all of these guys in and opened up prior to Meow Wolf? So say maybe middle second half of next year, we should look for velocity to really pick up.

Yeah. I think the velocity is definitely going to be in the back half of the year. I think Cork will probably get open before the midpoint. Willett will be around that July 4 time frame, hopefully. And then, in Flanker and some of the other stuff we're working on will hopefully be on the back end of 2026. And then depending on who we fill the other vacancies with, will either be a late 2026 or call it first half 2027. So the goal is to get everybody open and operating before Meow Wolf, but, obviously, it'll depend on how things get phased in here from a leasing standpoint.

Got it. And then, last one for me. You know, how do you guys position yourself to continue bringing the special events such as Macy's Wine and Food Festival? And then could you also talk about just the importance that these events really bring in helping drive exposure and awareness to the district?

Yeah. On the latter point, you know, I'm relatively new to New York. I've been here about two years now. And a lot of the conversations I have with people who live in New York say, oh, I went to the Seaport pre-COVID or I haven't been there in a handful of years. And so I think these events help pull people down who may otherwise wouldn't have the Seaport top of mind. So it's a great marketing opportunity for us and for the community and for the neighborhood. And then I think more broadly, positioning the Seaport as a cultural and experiential destination just more broadly for New York. I think is an important part of pulling people down here and ultimately making all the tenants and partners that we're bringing here successful. So it's as much about foot traffic and time and destination as it is anything else. And I think these events definitely help with that. In terms of how to keep building on that momentum, obviously, the team has done a great job of pulling a number of events down here this year, and we're hoping to bring all of those events back and more next year. Some of that will be through programming the rooftop. Some of that will be doing special events out on the pier or in the cobblestone. So it's an array of different opportunities that we have in front of us, and we just have to keep working and keep networking and creating the partnerships that bring these things down here over a multiyear period.

That's great. Appreciate the comments as always. Thank you, guys.

Thanks, Matt.

Thank you. As a reminder, if you'd like to join the question queue, please press 1 on your telephone keypad. Our next question comes from the line of Ross Haberman with RLH Investments. Please proceed with your question.

Good morning. Thanks again for having the call. Could you focus specifically, you talked a little bit in your queue about the restructuring with Jean-Georges. Do you think you'll hit a breakeven with that cash-wise in '26? Let me start off with that. Thanks.

Morning, Ross. When you say hit a breakeven in '26, are you talking about specifically in the hospitality segment or something else?

Jean-Georges, the Tin Building. That's what I'm referring to.

Oh, for the Tin Building? Yeah. You know, I'm not in a position today to give forward guidance on what the Tin Building will do in '26. We've spent a lot of time on it. And as we mentioned in the prepared remarks, it's a big focus for us, and we plan to be able to outline that plan on the next earnings call. So I'd say give us a couple of months to finalize the budget process, and we'll make sure to appropriately lay out our plans for that building. Call it early March.

With the restructuring, let me ask you. With the restructuring, are basically are you cutting costs there?

The restructuring was really to bring the employee base in-house. It was previously third-party managed by Jean-Georges. So that's what the restructuring allowed us to do. And by bringing it in-house, we were able to restructure those agreements. So we have license agreements now instead of management agreements. And so we were able to reduce some of the management fees that we're paying for that external management.

Is a new concept or adjusted concept part of the thinking?

I think everything's on the table. Now we're obviously working very closely with our counterparts at Jean-Georges. It's a great relationship for us. It's one that we obviously value quite a bit, especially with our 25% ownership in their broader organization. So we're working hand in hand with them to try to figure out the best path forward, and like I said, I think we'll have a pretty well-laid-out plan by March on the next earnings call.

You talked about 100,000 square feet of space to rent. How is that coming? And I don't know. Do you think you'll be able to make a dent of half of that in '26, or what's your thought in terms of the people you're currently negotiating or speaking with now? Do you have a couple of larger prospects that could use, I don't know, half or more of that within '26?

So the biggest chunk of that 100,000 is the Nike space. We won't get that back until 2027, but, obviously, we're not going to wait to try to work through that. A lot of the remaining space is small shop space. So we should be able to drive higher rents on those spaces just given the size and the use. We are working on a whole host of different opportunities, some of which I'm sure will get over the finish line and some of which maybe won't make it there. But, you know, I'm pretty excited about some of the stuff we have in the queue that we haven't been able to talk about yet. That hopefully will get over the finish line before the end of the year, and we can have some more announcements.

And just one final question, if I may. What do you expect for the capital expenditures for the fourth quarter?

So for the fourth quarter, it'll probably be somewhat light. We're deep into the Meow Wolf landlord work right now, and we're doing some work on Willetts and Cork. You know, it'll probably ramp up in 2026. You know, we've got about $50 million or so committed between all the projects that we've announced. I think the majority of that's going to go out sort of in 2026.

Okay. Thanks again for having the call. I appreciate it.

Of course. Thanks, Ross.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Matthew Morris Partridge for any final comments.

Appreciate it, operator. Thank you, everybody, for joining us today. We'll look forward to sharing more progress on the fourth quarter and year-end conference call in the early part of the new year. Have a great holiday. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.