Seaport Entertainment Group Inc Stock

Thank you. Greetings. Welcome to the Seaport Entertainment Group's second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Jason Wilk, Senior Vice President of Finance. Thank you, Jason. You may begin.

Matt Partridge, Chief Financial Officer and Treasurer, Lena Eliwot, 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, quarterly supplemental information. information and our most recent investor presentation on our website at seaportentertainment.com. With that, I will turn the call over to Matt.

Thanks, Jason, and good morning, everyone. On our last earnings call, I described the first quarter as a turning point for our company, and I'm excited to start today's call by sharing an important milestone for Seaport Entertainment Group. In the second quarter of 2026, we achieved positive operating EBITDA and positive non-gap adjusted net income for the first time in the company's history. This quarter's results reflect continued momentum since our inception, representing our seventh consecutive quarter of double digit non-GAAP adjusted net income per share improvement, and a 103% year over year improvement in Q2 is the highest comparable quarter of per share improvement during our two year existence. Our progress and improving trajectory towards profitability are a direct reflection of the work our team has been doing since our spinoff to stabilize the company and its operations. While we're proud of that financial results are beginning to reflect the hard work put in by our team, we want to maintain balanced expectations. Timing of new tenant openings, scheduling nuances related to our event, concert, and baseball operations, and the general seasonality of our businesses all create variability quarter-to-quarter.

As a result, the next three quarters should show year-over-year improvement but may not result in the same level of per share performance we achieved this quarter. As our tenants and new businesses open, we will continue to work on the same level of open and stabilize, our events business continues to grow, and we realize the full year benefits of the changes we've made to improve our organizational efficiency. We anticipate an improved earnings profile in 2027, and even more so in 2028. This is further supported by the fact we have more than 194,000 square feet of non-income producing space opening with new concepts in the next 18 months, including the Balloon Museum, Willits, Flanker Kitchen and Sports Bar, Hidden Boots Saloon, the new concept from the team behind Public Records, the Pier 17 event space, and That is more than 20 million of incremental annualized operating EBITDA that is yet to materialize in our numbers. As we work towards initial stabilization in 2028, we are focused on operating our assets in a way that delivers a more compelling growth profile than a traditional real estate investment company. This means day-to-day placemaking, marquee events, brand and culturally driven activations and sponsorships, and customer engagement that not only brings people into our venues, but drives incremental revenue, percentage rent, and improved leasing spreads. This quarter is a reflection of the progress we can continue to create as we emphasize disciplined execution, and it gives us conviction in our long-term plan.

We're building a set of complementary businesses that we believe are capable of generating sustainable long-term operational cash flow and earnings growth. One of the key contributors to our improved financial performance has been our focus on optimizing our G&A cost structure. We've made meaningful progress this year towards reducing audit fees, technology costs, and the reshaping of our organization. For some context, after adjusting for one-time leadership transition costs, we have reduced our trailing 12-month general and administrative costs by more than 20% over the past nine months, going from $34 million in trailing 12-month G&A as of Q3 2025 to less than $27 million as of Q2 2026. We expect this trend to continue as the full year benefits of the changes we've made are holistically reflected in 2027, and we'll evaluate further opportunities to reduce costs through, among other things, the non-renewal or renegotiation of expiring legacy contracts and service agreements. From a seaport leasing perspective, activity has slowed a bit this quarter, though for good reason. We've simply leased or programmed most of our available space.

At SPIN, we had roughly 150,000 square feet of space available to lease or program, or just under 200,000 square feet if we factor in the repositioning and leasing of the 10 building. Today, that number is still high. stands at less than 50,000 square feet, or just over 10% of the total space on the seaport. The remaining vacant spaces continue to generate strong interest, especially after our recent leasing and programming announcements. However, the remaining spaces are generally smaller footprints with broader appeal, which is leading to more detailed negotiations as we work to identify the right tenants and deal structures for each space. As a result, we expect leasing timelines for the remaining spaces to take a bit longer, though we remain confident in our ability to drive overall leasing and programming demand and improve rent terms. One of the more notable leases we signed earlier this year is with the Balloon Museum. This was an ambitious project from the start, requiring us to deliver a white box to the tenant in less than 120 days, and then working with the tenant towards their planned opening within 60 days thereafter.

Needless to say, our team delivered on time and is expected to commence later this month. When open, we anticipate the Balloon Museum will be a key driver of additional foot traffic to the Seaport neighborhood, benefiting many of the businesses in the area. As an indoor ticketed experience, we also hope it will partially offset some of the seasonality related to the colder months when pedestrian activity typically slows. Combined with the rooftop at Pier 17 and the upcoming opening of Meow Wolf in 2028, the Balloon Museum adds to the neighborhood's growing roster of culturally relevant entertainment experiences, helping solidify the seaport as one of New York City's premier entertainment destinations. On the rooftop of Pier 17, we are seeing continued strength in our concert business. In the second quarter, the rooftop hosted 22 shows, including 13 sellouts, and achieved a 91% sell-through rate. Demand for our premium upsell offerings, including the Patron Patio, Heineken Silver Zone, and the Liberty Club continues to build.

And we are also seeing a higher average food and beverage spend per attendee. With more than 40 shows remaining in the 2026 season, the concert series continues to perform well and a growing demand for event driven experiences on the rooftop reinforces the increasing value of the venue beyond concerts for our company and the broader community. I spoke about the growth of our events pipeline last quarter and demand has continued with several high profile events that have helped maintain the Seaports position as a premier destination for sports, music, entertainment and cultural events. Some of our recent event highlights at the Seaport include hosting the first ever live U.S. Men's National Team World Cup roster reveal and fan celebration in advance of the 2026 FIFA World Cup, which we previewed during our last earnings call. HBO Max's premiere screening of the newest season of House of the Dragon, TNT Sports' first ever Roland Garros experience, which was an immersive three-day fan experience with custom-built tennis courts celebrating the iconic French Open. Posse Barbecue, an annual music festival featuring Australian talent and culture, which relocated to the seaport this year from Central Park's Summer Stage, and Lululemon's Summer Series, which kicked off their New York residency on the rooftop at Pier 17 with a packed Pilates session followed by a performance by DJ Cascade.

Part of what has helped drive increased event activity is our new restaurant concept, Sadie's and Sadie's Garden Bar. We previously shared that we envisioned Sadie's as the central hub of activity on the cobblestones this summer, serving as a destination for sporting events, watch parties, live music, happy hours, and cultural programming. That vision played out even better than we expected. One key driver behind the outperformance was the New York Knicks' historic NBA championship run, which brought thousands of fans to Sadie's and Sadie's Garden Bar, Lawn Club, and other businesses throughout the Seaport for every postseason game. The excitement culminated with multiple Game 5 watch parties that stretched from the Heineken River Deck on Pier 17 to the cobblestones at Sadie's, bringing more than 10,000 people to the seaport. It was an unforgettable moment for New York City, and we're proud that Sadie's became a place for New Yorkers to experience the excitement together. That celebratory spirit rolled right into FIFA World Cup, driving strong visitation to the neighborhood from locals and tourists alike.

These garden bar in particular benefited from consistent soccer programming, making it a go-to destination for fans looking for a great atmosphere to catch their favorite game. In addition to the 2026 activities driven by the FIFO World Cup, we also benefited from events tied to America's 250th anniversary. On July 4th, Pier 17 welcomed two tall ships as part of the international Sail 250 celebration that took over the New York waterfront. We also hosted the 50th anniversary of the Macy's 4th of July fireworks, including the NBC broadcast of the event on the rooftop at Pier 17, with Sadie's hosting a sold out 4th of July the July block party as part of the broader holiday celebrations. Also as part of the America 250 celebrations, the South Street Seaport Museum is hosting the Promise of Liberty, a limited time exhibition featuring several of the nation's original founding documents, including the Declaration of Independence, the United States Constitution, and an copy of Dr. Martin Luther King Jr.'s I Have a Dream speech delivered during the March on Washington. It has truly been a special summer for the Seaport to play such a central role in the celebrations around this milestone anniversary.

As one of New York City's oldest neighborhoods and a place deeply connected to the nation's early history, the Seaport provides a fitting backdrop for celebrating America's founding. The visibility and visitation our events and programming brings to the seaport are invaluable, and the financial benefits they bring have been a key catalyst to our improvement. We look forward to continuing the momentum with an ongoing slate of activities, which includes the return of Seaport Cinema, our popular outdoor movie series at Pier 17, Bassett's Barbecue, a hip hop music and food festival, which will take over Sadie's Garden Bar in the Cobblestones this weekend. expansion of the Seaport Racquet Club in celebration of tennis's US Open, and the second year of New York City Wine and Food Festival, among many others. Moving west, the momentum is just as strong out in Las Vegas. The Aviators opened the season in first place in the Pacific Coast League, and I'm excited to report they held that position through the first half of the season. As a result, they've secured their spot in the playoffs this fall. Additionally, in April, the team held its highest attended regular season game in franchise history with more than 11,000 fans.

The Las Vegas ballpark also hosted a sold-out six-game series with the Athletics, drawing more than 50,000 fans in three sold-out games of banana ball, the fast-paced, high-energy version of baseball made possible. popular by the Savannah Bananas. These non-aviator events resulted in the highest grossing one-day food and beverage sales and the highest grossing one-day merchandise sales in the history of the ballpark. Combined with an increasing focus on expense management, we're encouraged by the progress made by our team in Las Vegas as they continue to deliver an amazing and ballpark experience across multiple event types. Overall, everything I've discussed comes back to progress. We're making progress organizationally, operationally, and financially. we were entering the year from the strongest position since our inception and that we expect our momentum will carry through 2027 with continued operating efficiency and cash flow improvement, allowing us to achieve initial stabilization of our existing assets by 2028. This quarter's results are first with positive operating EBITDA in all segments along with positive non-GAAP adjusted net income. that improving trajectory remains firmly intact. I'm optimistic about where we're headed in our opportunities for future growth, but none of this happens without our team, and I want to thank everyone across the organization for their continued commitment and hard work as we keep moving forward.

With that, I'll turn it over to Lena, who will walk through our second quarter financial performance in more detail. Thanks, Matt, and good morning, everyone.

As you've likely gathered from Matt's remarks, it's been a busy quarter. Our results show the meaningful progress we've made reflecting the exceptional execution, hard work, and dedication of our team. Before I walk through our Q2 results in detail, I want to remind everyone that we changed our segment reporting at the start of the year to better reflect how we view the business. We use operating EBITDA to report the overall performance of our three operating segments, landlord operations, hospitality, and entertainment. We think the revised definition we shared during our last call gives a clearer, more comparable picture of how each operating business is performing. Unless we know otherwise, all operating EBITDA figures discussed today are net of intercompany transactions. For the quarter ending June 30, 2026, total operating EBITDA improved by $5.6 million, from a loss of $1.1 million in the same quarter prior year to positive operating EBITDA of $4.5 million, with all business segments generating positive results.

The improvement was driven primarily by the benefits recognized from closing the TIN building operations in Q1 of 2026 and the early termination of the Nike lease at Pier 17, along with several operational improvements that I'll outline shortly. As we previously disclosed in 2025, Nike exercised the lease termination option that revised their lease term to expire in Q1 of 2027, three years ahead of the original contractual end date. At that time, we received 2 million of termination fees with another 2 million due in Q1 of 2027. And we were continuing to receive contractual rent through the duration of this revised lease period. During the second quarter of this year, we entered into an agreement with Nike to terminate the lease effective April 30, 2026, and concurrently received the remaining termination payment and a payment for the majority of the remaining rent due under the lease. The full effects of these payments, as well as our write-off of our... straight-line rent balance related to this lease were recognized into rental income this quarter for a net effect of an additional $2.7 million in rental revenue year-over-year when compared to Nike's contractual rent revenue in prior year. Overall, rental revenue for the quarter increased $2.8 million, or 67% year-over-year, mainly due to this transaction.

This is a positive outcome for us, as Nike's surrender of this space allows us to begin the construction of our planned event space in Pier 17 sooner than we originally anticipated. Additionally, year-over-year event-driven rental revenue increased across the property, as demand for marquee events and activations has strengthened the Seaports' reputation as an entertainment destination. That growth, along with the start of Gitano's lease in April and Cork's opening that same month, fully upset the loss of rental income from the ESPN lease, which ended in the third quarter of 2025. I also want to share an update on the former IPIC theater located in the seaport. Blue Fox Entertainment, a global film distribution and film sales company, acquired the 46,000 square foot lease through IPIC's bankruptcy process, paying all outstanding balances. Blue Fox Entertainment plans to reimagine and rebrand the space to enhance the movie theater experience, and we look forward to working with their team. Within the landlord segment, operating costs continue to improve down about 800,000 or 10% versus the prior year.

The largest savings came from insurance premium reductions along with reduced spending on cleaning security and technology. Operating EBITDA for the quarter was $600,000, which improved by $3.6 million year-over-year. When excluding the effects of the Nike lease in both periods, landlord operating EBITDA improved by 23% over Q2 of prior year. Moving on to hospitality, this quarter also marks two important milestones within the segment. First, hospitality generated positive operating EBITDA of approximately 280,000, an improvement of 3.1 million year-over-year, driven primarily by a full quarter benefit of the closure of the TIN building, which in prior year impacted EBITDA with a loss of $2.8 million. Second, SADIs, our first internally developed and operated restaurant concept, generated positive operating EBITDA in its first full quarter of operation, which speaks to the strength of the concept and our team's execution. Further, Sadie's Garden Bar generated a 125% increase in year-over-year revenue compared to prior year, when the outdoor bar at the center of the cobblestones was not managed directly by SEG.

While Sadie's has exceeded expectations, fueled in large part by the Knicks championship run and World Cup activity, our legacy full-service restaurants have faced softer top-line sales. response, the hospitality team is continuing to evaluate opportunities to strengthen performance, including menu optimization, expanded programming, and targeted marketing to build awareness and drive visitation. Turning to entertainment, operating EBITDA declined 1 million or 23% year-over-year, driven mainly by the concert series on the rooftop at Pier 17. In Q2 of 2026, we incurred increased repair and maintenance expenses, as well as increased operating expenses related to the rooftop. Concerts EBITDA was also affected by decreased sponsorship revenue compared to prior year following the non-renewal of a legacy sponsor. Replacing sponsorship partners is a longer-term proposition. It also opens the door to diversified opportunities that align with our entertainment-focused strategy and customer base. In Las Vegas, the team delivered higher operating EBITDA year-over-year, despite hosting seven fewer aviators' home games.

Those results came from a focused strategy of disciplined cost management, matching game day expenses to attendance to continue improving operating costs. Las Vegas operating EBITDA also benefited from hosting the sold-out three-day banana ball series, as well as the six-game sold-out athletics run. The athletics games drove an increase in quarterly merchandise sales of over 50% year over year. and excluding merchandise sold during the athletics games at Las Vegas Ballpark, the Aviators' retail sales increased 8% year-over-year, despite seven fewer games. Increasing merchandise sales has been a focus of the team this season. The family-friendly nature of the ballpark and Summerlin community allows the team to find fun and creative ways to engage the community with theme nights and related merchandise. Looking ahead, the remainder of the aviator season promises plenty of excitement, including another chance at the Pacific Coast League Championship this September. In looking at GNA, a continued key initiative has been reducing our corporate cost structure towards stabilization, and we're seeing those efforts reflected in our quarterly results.

General and administrative expense totaled $6.6 million in the second quarter, a $1.7 million or 20% improvement compared to $8.3 million in the second quarter of last year. When excluding restructuring-related severance costs and leadership transition costs, second quarter GNA improved by 2.9 million, or 35%, when compared to prior year, and 1.2 million, or 18%, when sequentially compared to Q1 of 2026, as we've continued to streamline our cost structure. In other income or loss, we recorded a net expense of approximately $700,000 in the second quarter, mainly reflecting certain non-recurring items such as pre-opening costs for SATEs, tin building wind-down costs, and certain legal expenses. In Q2 of 2026, we also recorded an additional $1.4 million loss on the sale of 250 Water Street. This loss is related to the estimated post-closing obligations required under the purchase and sale agreement and will be funded by the escrow that was set up at closing. During the quarter, we recorded net interest income of approximately $700,000, down approximately $100,000 or 14% from prior year, reflecting a lower interest rate environment. Equity in earnings or losses from unconsolidated ventures declined approximately half a million or 61% year over year, reflecting lower EBITDA from Lawn Club and reduced earnings from the John George Restaurant Group.

At Lawn Club, revenue grew year over year, though higher operational costs resulted in lower net income. At John George Restaurant Group, performance has been challenged thus far in 26 as new restaurants ramp up. Their team continues to focus on driving value through increased license and management fee income while improving existing restaurant operations. operations. Second quarter net loss attributable to common stockholders improved 29% year-over-year to $10.5 million, while net loss per share improved to $0.82 from $1.16 loss in the second quarter of 2025. These year-over-year improvements reflect the benefits of stronger operational execution across multiple businesses, the TIN building closure, termination revenue from Nike, and continued progress on our G&A cost initiatives. On the balance sheet, capital expenditures totaled $14.8 million in the second quarter, with the majority invested in landlord work related to Balloon Museum, Flanker Kitchen and Sports Bar, Hidden Booth Saloon, and other maintenance projects. We completed landlord work and delivered the tin building space to the Balloon Museum in June of 2026.

And as Matt mentioned, we expect the museum to open soon and rent to commence concurrently with opening. At quarter end, we held a net cash position of $88.9 million, with $127 million of cash, cash equivalents, and restricted cash as of June 30, 2026. Of note during the quarter, we received $20.8 million of the $27.8 million escrow related to the 250 Water Street post-closing obligations. Our only outstanding debt remains the $38.1 million Las Vegas ballpark loan, and we paid approximately $1 million of recurring principal payments during the quarter. We continue to maintain a strong balance sheet, which gives us flexibility as we deploy capital and keep improving operations. Before we open the call for questions, I wanted to close with a milestone mentioned earlier, positive non-GAAP adjusted net income of $320,000. This represents an improvement of $7.7 million year-over-year from a non-GAAP-adjusted net loss of $7.4 million.

On a per-share basis, non-GAAP-adjusted net income attributable to common stockholders was $0.02, compared to a loss of 58 cents per share a year ago. As we've noted, this quarter's results benefited from the accelerated Nike payment and other favorable timing items. However, they also reflect the progress we've made over the past two years, stabilizing operations, corporate costs, and repositioning our assets in SPIN.

With that, we'll go ahead and start the Q&A portion of the call. Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. Using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment please while we poll for questions.

Our first question comes from Matthew Edner with Jones Trading. Please go ahead.

Hey, good morning, guys. Congrats on the continued progress and thanks for taking my question. So you guys still have a pretty strong cash position. I'm just trying to get a scope of what you guys are thinking for continued CapEx or investment into the properties as you continue to re-invest. tenant is it still kind of that 70 to 90 ish million range hey Matt good morning.

Yes, that's 70 to 90. So we've spent about 20 million over the first half of the year. And so we're thinking that 50 to 70 remaining is still the right number for a lot of the projects and committed capital we have already in.

announced. Got it. That's helpful. And then, you know, could you kind of speak about the event space and what you guys are putting in there now that you have your hands back on that, you know, actual space? You know, what you guys are thinking and then, you know, what's the next step?.

How are you looking to kind of program that out? Hey, Matt. Thanks for the questions. We're really excited about the event space. You know, it's going to have a dedicated entrance on the ground floor of Pier 17 with dedicated elevator transportation up to both the second, third, and fourth floor of the pier. All three floors will have sweeping views of the Manhattan skyline, the Brooklyn Bridge, the Brooklyn skyline, the East River. So it's pretty unique space. The way that we're designing it is to be as flexible as possible. because in our minds, we're going to have everything from traditional corporate off-sites to small convention-style programming to product launches and consumer-facing. opportunities and we're designing some elements of it to factor in the consumer facing consumer engagement side of things. So it's going to be, uh, able to accommodate a lot of different program types, but it's going to have all the infrastructure to make it as easy as possible for people to come and activate.

Got it. That's awesome. And then, you know, as it relates to the remaining space, you know, you mentioned a little bit about the discussions there. Have you guys looked or, I guess, thought about any internally developed concepts similar to Sadie's that you had put in there, or are you going to just lease that out to the.

somebody over the near term? You know, the way we think about internal concepts is we want to operate the stuff that's systemically important. You know, Sadie's being at the center of the cobblestones with the garden bar. and putting the LED screen out there for watch parties like the Knicks and World Cup and things like that. combined with the open container district we have associated with it that's a systemically important operation within the seaport same with the concert venue same with the event space um But the small shop space, some of the smaller remaining restaurant spaces we have, those aren't as systemically important. And so we'd look to shift the operating execution over to a third-party tenant who's going to live and breathe it every day, right? A big emphasis that we have from a leasing perspective is getting one of ones down here. We don't want chains. We want people who are going to live and breathe their businesses, be entrepreneurial about how they operate them, and provide something unique to the neighborhood and the community and the people who come to the seaport. And so that's what, like I said in the prepared comments. what's taking longer is finding those right people, understanding how they think about their businesses and the value proposition to the customer base that comes down here, and also where we're headed with Balloon Museum opening Meow Wolf in the event space.

Right, right. That makes sense. And then, as it relates to the stuff that's in progress of opening up, have there been any delays in timing or construction, anything like that?.

No, not really. I mean, the event space is a bit of a fluid process, just given the negotiations that we had to go through with Nike, but we're obviously on the other side of that. I think, you know, Balloon Museum has gone as quickly as feasible. given the amount of work that was done in that space. And I think we still feel good about the path that Meow Wolf is on. Those are obviously the big ones that are on deck. And then the restaurants and things like that public records and flanker and hidden booth saloon those are all on on pace.

Awesome. Um, and then a couple more for me and then I'll, I'll hop out. Um, 85 South, are you guys still kind of exploring, uh,.

You know, I guess, selling that we are we've had some starts and stops, I think, as I mentioned on the last call, you know, with 250 water street, we were required, given the materiality of the asset to disclose a little bit more. But it puts us at a competitive disadvantage when we're negotiating with different potential buyers. So for 85 South. Like I said, we've had starts and stops, but we'll probably be relatively quiet in terms of progress until we get to a transaction just to maintain as much negotiating leverage as possible.

Got it. Yes, that makes sense. And then, you know, Matt, since you've joined, you guys have had a bunch of progress. How does it kind of align with the expectations when you decided to come over versus where you are now? Just, you know, kind of put a big picture, you know,.

at the seaport i mean i'd love to say this was all planned out and we're right on on track um You know, things ebb and flow. We get lucky here or there. We have setbacks here and there. So, you know, it's not a linear path, but... I can't say enough how proud I am of the team and how much progress we've made, especially over the last call it 910 months since I've been here. I stepped into the seat, you know, everybody's run really hard towards executing on the strategy. And I think, look, we've always said it was going to take three plus years to stabilize everything.

And I think we're right on track with that for 2028 being that initial stabilization year.

Awesome. Great. Thank you, guys. Appreciate it as always. Thanks, Matt.

Our next question comes from Ross Haberman with RLH Investments. Please go ahead.

Good morning. Nice quarter, Matt. You guys are really coming along here. can I go Lena can I go back to the 50 to 70 million in CapEx which you referred to um.

What is the, that's over what the next two years, is that correct? Yes. Hey, good morning, Ross. Thank you. Yes. It's over the next two years. It's, it's until we reach that stabilization point and, and get through all of the projects we've committed to.

And Ross, I would just elaborate that, you know, how these things go. Dollars typically trail construction progress. So even though something like Meow Wolf may open late Q4 2027, early Q1 2028, you know, dollars will trail that opening just as we close out the project. So to Lena's point, you know, it's about two years to put us into mid 2028 before we expect all the dollars to go.

the door. In the past you threw out a number that if all these projects were if all these leases were in place how much revenue or cash flow they would generate. What is that number today?.

Yes, we still have that out there. It's in the supplemental. It is, give me one sec, Ross. I'm sorry, I'm missing the call. Yes, it's around 26 million. Yes, it's just over 26 million, Ross. And as we continue to make progress from a leasing standpoint, yes, the additional, as we keep making progress from a leasing standpoint, hopefully that number will increase. things open and as we lap over things like Nike and ESPN no longer being in the historical trailing 12, that number will move around.

And that's a pre-G&A number. Correct. Is there more room? You said you hope to get the GNA down to about 27 million. Is there more room on that to lower that further?.

Yes, I think so. I mean, we're going to start budgeting this month for 2027, and that'll continue to be a focus. We inherited some existing service contracts and arrangements that had two, three-year lives on them, so we're coming up on the expiration of some of those where we can either renegotiate them or move on from them. Some of those are related to systems, some of those are related to consultants and other relationships. continue to be an emphasis, but I think, you know, we've made a lot of progress and not all of that progress is reflected in the number in Q2. So we'll start to see the full year benefits of that as we get into 2027.

That's about it. Thank you for the help. The best of luck. Thanks, Ross.

Our next question comes from Dan Joseph with a parent capital. Please go ahead.

Hi, Matt. Hi, Lena. Congratulations. This was an outstanding quarter. Great progress for the company. I also want to call out your presentation and materials, particularly pages 47 through 49. For me personally, I thought that was incredible progress, very transparent, very good communication, and continues to help me understand the company in a better and better way. So thank you, guys. for continuing to lean into improving the way that you communicate with us as shareholders.

Thanks, Dan. Always happy to provide information as we can. I think you know things move around, so that limits our ability to be forward-looking, but I think we're getting to a better and better stabilization point where we'll be able to start providing more forward-looking information in the coming months and quarters.

That's great. So on that subject, from a stabilization standpoint, as you now are in the cash flow positive realm, kind of ahead of expectations, Have your expectations for stabilized EBITDA in 2028 changed at all?.

I wouldn't say they've changed. I think, obviously, if we can continue to accelerate positive earnings earlier, that's going to help with cash burn. You know, Q1 is obviously a seasonally slower month, so that's going to be a harder one to get to a positive place. but, you know, the event space, balloon museum opening, eventually Meow Wolf and all the other concepts that are in the queue are obviously going to help. How the event space ramps up in terms of business and bookings and things like that, I think, is an area where we have different iterations of models. Obviously, we have optimistic models and conservative models related to that. team is very focused on putting structure around that and getting that ramped up as quickly as possible. I'd say that's probably the most volatile component of what we have in the queue right now, given how operationally involved it'll be.

Got it. Couple questions on some of the challenges that you guys are having. You mentioned the loss of a sponsor at the rooftop. Could you elaborate on that a little bit?.

Yes, it was Chase. They had historically been a founding sponsor when the Pier and Rooftop Concert Series were launched. You know, they've had some turnover or change in the team that we were working with, and they've looked to prioritize what I would call more exclusive and unique experiences. for their cardholders. And so, you know, we're in active conversations with different groups, whether in the financial services world or entertainment world or. everything in between about replacing that sponsorship income. Those deals don't happen overnight. The team that we have is a terrific team that's got a lot of deep relationships. But these are typically multiple year deals. And so they take a lot longer to negotiate and ultimately replace that cash flow.

Got it. And Lawn Club, you mentioned that the EBITDA at the Lawn Club was down. Is there a plan in place to kind of reverse that trend? Do you see upside there? How do you guys look at Lawn Club as a, and obviously it's a meaningful contributor?.

Hey, Dan. Yes, Lawn Club is certainly a meaningful contributor to us and a part of the decline year over year is that in prior year the Lawn Club operated the Sadie's Garden Bar. And so that was a tremendous benefit to the Lawn Club at the time that effectively got shifted over to Sadie's. So the Lawn Club team is doing a great job in trying to make up that revenue and continuing activations inside and outside the space. So we definitely see the progress they're making. you know, it was for us, it's more of a shift from one venue to another versus.

decline at the long club, that would be a serious issue. Yes, Dan, just anecdotally, I think long club hit an all-time record in revenue for July. So they're not slowing down. I think And obviously the Sadie's Garden Bar, given our comments earlier, has performed better than last year. So I think everybody's in the aggregate coming out ahead. It's just... you know, shifting where the revenue is coming from. And I think Long Club will have a very strong back half of the year based on how they've reforecasted and their expectations for the remainder of Q3 and into Q4.

That's helpful. That doesn't feel like a negative. That actually feels like a positive, just given the strength of Sadie's. As you know, I've been down there, and the Sadie's traffic is unbelievable. I look at that from a positive light. One more question, which at the last call, you may... having the board having approved share repurchase program, as well as having a shelf offering, I think, for $125 million for the potential launch when the stock strengthens. Any kind of new news or information that you can share on the share repurchase program or any plans to raise capital?.

Or are you kind of standing put right now on that front? No, I wouldn't say there's any new news. We continue to view the shelf and the buyback program as tools. as we continue to get clarity in terms of opening timelines and things like that, and capital costs and stuff like that, we'll have a better sense of cash burn as we get into 2027 and ultimately 2028. And that will certainly influence whether or not the share buyback program becomes more actionable. Obviously, the performance of the stock will also impact that. But I think generally what you investors should expect is that we won't talk about share buybacks until they happen, if they do happen. And as we've said, it is a tool in the toolbox. I think beyond that, from a capital raising standpoint, no, we haven't suggested that.

I don't suggest that there's any imminent capital raising. And I think from our standpoint, we're focused on executing and continuing to march towards that 2028 stabilization point with the existing asset base. As I've said in the past, we're going to be opportunistic in evaluating other opportunities, but as I've also said, we're not going to race towards something or feel like we have to do something just to put capital to work. We want to do it because it's the right investment decision and the right capital allocation decision for the company long term.

It makes sense. It's really smart. As you know, I think you guys are just doing a great job blocking, tackling, and making really great strategic decisions. So again, congratulations on everything. I don't want to monopolize any more time. Looking forward to seeing the Blue Museum when it opens up. continued good work ahead. Thank you. Thanks, Dan. Really appreciate it.

Our next question comes from Ross Haberman with RLH Investments. Please go ahead.

Sorry, guys, I left out one question. Could you talk in general about leasing rates and prices given the political environment in the city? What do you see in there? What kind of trends, if there are any?.

I wouldn't say there's any trends in relation to politics or anything along those lines. I think if you look at the city broadly, there's an inordinate amount of strength in the Midtown corridor. Yes. you know, office has been red hot during the summer in terms of office leasing. And I think we're starting to see some of that play out downtown. I would say the seaport's a little bit unique in that there was, including our property, a decent amount of inventory on the market available. And as we continue to chip away at that inventory and filling it up, in the occupancy. That's going to give us more pricing power, and I think we're starting to see that, especially as we make different announcements that are relevant to potential tenants.

So for us, it's not a demand issue. It's a use consideration, and we're trying to be judicious in terms of how we evaluate the demand.

tenant mix and the placemaking that we're trying to create down here. All right. I was just trying to get a general sense if the prices are firmer today or not today or less than they were a year ago or so.

I would say they're firmer today, broadly speaking, and I think certainly for the seaport, they're firmer, just given all the progress that we've made. Thanks again. Best of luck. Bye. Thanks, Ross.

We have reached the end of our question and answer session. I would now like to turn the floor back over to Matt Partridge for closing comments.

Thanks, everybody, for joining us today. We really appreciate the support and look forward to sharing updates on the progress on the next earnings call in November. Have a great rest of the summer break.

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

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good morning, and welcome to Seaport Entertainment Group's First Quarter 2026 Earnings Conference Call. [Operator Instructions] And as a reminder, today's call is being recorded. I would now like to turn the call over to 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, 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, and good morning, everyone. Let's start with the headline items from the first 4 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 in 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. And 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 noncash and nonrecurring 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. The disciplined execution and a common focus is what will carry our progress forward as we create 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 onetime nature of the associated events, the addition of year-round experience-led anchors like the Balloon Museum opening later this summer and the 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 business is expected to benefit the most from the improved demand trends in our active programming calendar is the recently opened Sadie's Restaurant in 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 in Daily Brunch. With it, we opened Sadie's Garden Bar, one of the largest outdoor bars in Manhattan 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 and 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 and 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 2, 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 Patron 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 4th 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 of 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. Moreover, 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.

Pier 17, we recently achieved an important milestone with the delivery of the landlord required work for 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 and 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 Abramovic, 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 in 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 in 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 Enchant, we expect improved execution and stronger margins as we build on last year's learnings.

Looking at the 2026 Las Vegas Aviator 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 fifth year in a row. In March, we hosted 2 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, and 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, and they should be incredibly proud of what they've accomplished.

With that, I'll turn it over to Lenah 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 Operations 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 nonrecurring 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 a 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 2 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 New York, 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 we'll continue recording rent received on a cash basis until bankruptcy proceedings are completed. Excluding the iPic noncash 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 was 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 1, 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, opened their doors in April, and 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.

Furthermore, 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 field 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 of 2026.

In concerts, the Rooftop at Pier 17 stage is typically constructed in April and is a Q2 cost when referencing prior years. However, 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 the 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 preopening expenses. Of this, $2 million of restructuring costs were predominantly related to the Tin Building transition to the Balloon Museum. The remaining impact included preopening expenses largely associated with the ramp-up of the newly opened Sadie's Restaurant in 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 G&A.

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 and 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 to $90 million of capital expenditures discussed in our prior earnings call represents our total remaining investment from year-end 2025 to 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 '26, 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.

With that, we'll now open the line for questions.

[Operator Instructions] Your first question comes from Matthew with JonesTrading.

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

Thanks, Matt. Yes, I think the $70 million to $90 million is still the number. We had minimal spend in Q1. I think it was about $6 million. So that will come off of that number, but that's still the right number to get to stabilization. In terms of the rest of the cash, I think we're going to 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 2-year anniversary mark.

Beyond that, I think the company is evolving, right? It's -- it was a disparate collection of real estate and operating assets. And I think we've rounded it into more of an experiential platform focused on owning operating and activating the destinations. So we've got hospitality, food and beverage, live entertainment, cultural programming, retail, public activations, but it all centers around creating that emotional connectivity that we talked about in the remarks. So 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. And we'll evaluate other opportunities as they come our way. But capital allocation is a point-in-time decision, and we're going to evaluate all of our options before we put anything to work.

Got it. That's helpful. And then as it relates to the event space, what are you guys expecting there in terms of time line? I know you mentioned kind of that middle of the year '27. Is there anything that needs to happen before you guys kind of break ground there and start...

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

Yes, Matt. And earlier, we had said the Nike lease didn't expire until February of 2027, which was a part of our planned event space. So the timing was a little uncertain. But 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. So that happened really recently. So it will be a Q2 event, but 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. And then it looks like the largest space that you guys kind of still have to lease up at the Seaport is One Seaport Plaza. What have the talks been like there? What are the possible tenants? And then 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?

Yes, 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 because 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. So 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. And then looking on Slide 15 of the supplemental, could you kind of walk me through the differences of what an operating and license structure is and how that kind of impacts the model?

Yes. No, it's a good question, and GITANO is a good reference point. So 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. So as Lenah 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 preopening costs related to that.

So for us, the owner of that business is going to operate it more entrepreneurially and they're going to live and breathe the concept. But we're going to shift 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, the Public Records -- or I'm sorry, 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, 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 Fulton, where we operate the Fulton, but it's a Jean-Georges or Carne Mare, where it's an Andrew Carmellini concept, but they operate it on our behalf. So each one is a little bit different. On the license deals, those are going to have more operational leverage on them because the full impact of the P&L, both revenues and operating expenses is going to be on our P&L, whereas, obviously, the leases are going to be -- are going to come through the landlord operations side, and there'll be pretty high flow-through, but less revenue to flow through.

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

I mean opening is going to 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. So there's always moving parts, especially when we're doing the amount of work that we're doing in the time frame that we're doing it. But our team has 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.

Your next question comes from Ross with RLH Investments.

Just a couple of quick questions. He hit upon your prior question -- he hit upon most of my questions. But going back to Page 14 on the remaining vacancies, could you talk about -- I guess you touched upon the Pier 17. You think you're going to 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 the lease-up for that maybe over the next year or so? What are your potential there?

Yes. I touched on One 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 going to 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 the Meow Wolf signed up and Public along with some of the restaurant spaces, we've got those anchors in place. And so 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. So 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.

And 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 14. Is that correct?

Correct. That's correct. So there's no projections for the vacancy in there, and the $31 million is either what we reasonably think will be a year 1 operating yield or it's the contractual rent. So 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 2 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 '27, '28?

I think we're going to 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 and those moving pieces sometimes cost money. I think we'll have fewer moving pieces going forward, which will allow us to get more efficient. So 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.

And just one final thing, 85 South Street, any new developments there?

No, it's on the market. We're having active conversations with buyers. 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 because it puts us at a competitive disadvantage when we're negotiating. But 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.

[Operator Instructions] 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 Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] 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, Matt Partridge; and our Chief Financial Officer, 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 now turn the call over to Matt.

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 and 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 Miaba, Flanker Kitchen and Sports Bar, Hidden boot Saloon, Willis cork wine bar and other exciting additions I'll discuss shortly.

Internalizing food and beverage operations across many of our company's wholly owned and joint venture owned restaurants in the Seaport neighborhood, the Las Vegas Aviators winning the 2025 Pacific Coast League Championship, the franchise's first BCL title since 1988 and hosting and competing in the Minor League Baseball AAA 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 in the New York City Wine & Food Festival and putting 250 Water Street under contract to sell, which subsequently closed last month in early February.

The process of finalizing the sale of 250 Water Street was longer than anticipated. And after completing additional diligence in evaluating market conditions, we believe this transaction represented the best risk-adjusted outcome for the company. The transaction will generate net proceeds of approximately $75 million after we work through some post-closing obligations, which should largely be resolved in Q3 2026. The sale complete, we've eliminated $7 million of annual cash burn related to interest expense and carrying costs, and we now have additional capital on our balance sheet and a clear 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 John George, his team and the Tin Building staff for their partnership, dedication and effort. The tin building was an ambitious undertaking and Chef Jean-Georges created a truly beautiful and distinct destination. Our partnership with 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-George 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 the use and operating structure to achieve long-term sustainability. As a result, we signed a new lease with Lux Entertainment to bring their highly successful 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, the Balloon museum is an award-winning large-format interactive contemporary art experience. To date, the Blue museum exhibitions have toured through 23 major cities across Europe, North America and Asia often within historic and landmark buildings and with work from internationally recognized artists. They've welcomed more than 7 million visitors globally. And when set alongside Meal 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, the Blue 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 5 years with 2 5-year extension options. The base rent includes annual contractual escalations and a percentage rate component above a contractually established revenue threshold. From a capital standpoint, work is underway at an estimated cost of approximately $5 million with delivery to the tenant expected by the end of Q2 2026. Luxe 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 assets 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 is not experienced in a 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 10-year agreement with a renowned Brooklyn-based arts, culture and hospitality concept to occupy approximately 11,000 square feet in the historic cable stones. Plan to announce our partner in 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 experiences 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 Cities. Cetes will occu by the first and second floor from 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 cable stones. The restaurant 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. Savings 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, OctoberFest and other evergreen programming.

And finally, in January, we made the difficult decision to close the Malibu Farm location at Pure 17. We've 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 3 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 skylines.

All levels will be accessible via dedicated ground floor elevator entrants and staircases with connectivity to the rooftop of Pier 17. The event space will also leverage Pier 17's other unique attributes, including proximity to major transportation hubs, and access control 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 caters creating a compelling weather contingency option that improves the rooftops 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 One in Food Festival in Mac's fourth of July fireworks and improving utilization of space that was previously positioned for office use.

While we're 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 5 years. We will provide more information about the events based on our first quarter earnings call. At the rooftop of 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 Petrom patio. These initiatives are designed to drive incremental high-margin revenue while enhancing the overall guest experience through 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 or pro forma 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 to Las Vegas, I do want to highlight that we are continuing to explore the sale of our 21 unit apartment building at 85 South Stream. We'll 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 in champ back to regular season baseball programming. During the fourth quarter, we internalized the day-to-day operations 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 7, 8, followed by opening date for the Las Vegas Aviators on March 27. Additionally, after last year's hiatus, the Las Vegas Ballpark will once again host the Savanna bananas for 3 games starting April 30 with ticket sales currently outpacing 2024 levels.

Overall, we're excited about the support for the team and how it's 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 to 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 Lenah, I want to sincerely thank our team for their resilience, hard work and compassion. The support of the company and sell a team members, especially through these transitional moments has been tremendous. I'm proud of the progress we've made.

I'm confident we'll continue building on the strong momentum we saw through year-end 2025 and into 2026. With that, I'll now turn the call over to Lenah.

Thanks, Matt. Before I get into the company's fourth quarter and full year financial performance, I'd 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 and earnings or losses from unconsolidated ventures line on our consolidated and combined statements 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 addition, we'll reference operating EBITDA which excludes losses on assets held for sale, impairment charges and other nonrecurring items included in other income or losses 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 of 2025 and $9.18 for the full year of 2025 and representing a 20% and 45% improvement, respectively. Non-GAAP adjusted net loss attributable to common stockholders was $17.5 million for the fourth quarter and $54.1 million for the full year, representing improvements of 9% and 49%, respectively, compared to the same periods in 2024.

On a per share basis, non-GAAP adjusted net loss was $1.37 for the fourth quarter 2025 and $4.26 for the full year 2025, representing a year-over-year improvement of 18% and 64%, respectively. In the fourth quarter of 2025, total consolidated revenues were $29.5 million, a 7% year-over-year increase when compared to pro forma Q4 of 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 Long Club and our investment in John George restaurants since they are reflected in the equity and 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 of 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 theme partnership on the rooftop at Pier 17 with the Dead Rabbit, a world-renowned Irish cocktail bar in Lower Manhattan and another was a large-scale private event across multiple venues at Pier 17. Total food and beverage revenues within the hospitality segment, inclusive of Loan Club, declined 15% year-over-year. On a same-store basis, food and beverage revenue declined 20%, with the most meaningful difference relating to Jitano, which was not included in the same-store revenues in the fourth quarter due to it being under construction during Q4 of 2024.

In the fourth quarter of 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 John George 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 LanClub/Injatano, 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 of 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 Jitano 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 Long 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 nonrepeating 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 John George warrant impairment recorded in 2024. Excluding other income and losses, which was primarily impacted by a onetime 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 Long Club and Jitano. Turning to the Entertainment segment. Fourth quarter revenues increased 68% year-over-year, primarily driven by the internalization of Enhance 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 2 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 pertial 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 Q4 of 2024. Total 2025 year-over-year entertainment revenues increased 14% due to the internalization of 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 & Food Festival contributing to the current quarter improvements. These gains are partially offset by the termination of the ESPN lease in Q3 of 2025, resulting in the loss of year-over-year comparable rental revenue in Q4 of 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 Q4 of '24.

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 accruals for operating expenses, such as cleaning, security and utilities along with the effects of the nonrepeating rent reserves placed in Q4 of '24. For the full year of 2025, rental revenue increased 21% year-over-year on a pro forma basis, driving most of the landlords 18% year-over-year revenue growth. Increases to rental revenue were driven by private event rental activity, most notably Jordan Brands the 1 tournament Global finals event and the New York City Wine & Food Festival as well as termination-related income associated with our Nike office lease and a decrease in rent reserves compared to prior year.

As a reminder, Nike exercised their termination option within their lease but remains a tenant of Pier 17 through February of 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 onetime nonrecurring charges. These included 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 spend 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 of 2025, which reflects segment performance before G&A, interest, depreciation and 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 held-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 structure stabilizes in our first full year as a stand-alone public company, as well as overall cost optimization initiatives we've 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 of 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 Q4 of '24 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 second half of 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 the $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 financing costs following our separation.

Compared to Q4 of 2024, equity and 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 warrants previously described in Q4 of 2024. Excluding the warrant impairment, equity and earnings or losses from unconsolidated ventures declined approximately $0.3 million 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 the full year. This is reflective of continued strength of the lawn Club as it scales through its second full year of operations.

Capital expenditures in the fourth quarter of 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 Malo landlord work, the rooftop winter structure, the completion of Jatano and River deck 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 group 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've materially improved the company's financial performance, strengthen the company's balance sheet and laid the groundwork for sustainable long-term growth and value creation. With that, we'll now open the line for questions.

[Operator Instructions] First question comes from Matthew Edner with Jones Trading.

Congrats on all the progress so far. Lenah, you just mentioned that you guys have $163 million cash pro forma. How much of that is committed to current projects and getting them online at the Seaport and then with the -- whatever is remaining there, what are you guys kind of targeting there for deployment?

So we spent about $30 million in 2025 in capital with our expectation for everything we've announced, plus the existing vacancy to get to stabilization is another -- we expect around another $70 million to $90 million. We had initially said at the onset, a range of $100 million to $125 million to get to stabilization. So I believe we're still expecting to target something within that range.

In terms of capital allocation, we're sort of at the front end of this. Obviously, we've been focused on the existing asset base. I think we're going to look at a lot of different things, right? We're evaluating -- we're starting to evaluate opportunities in the hospitality, entertainment and event spaces. Obviously, that's core to what we're 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're going to be opportunistic, and I don't think we have any definitive path yet because we're sort of at the forefront of evaluating the opportunity set.

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

I think it depends on the business. 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've got a lot of talent in the building. And obviously, they're doing a great job executing on what we have. So if we can find things that complement the existing skill set that's going to improve the flow-through of whatever we allocate capital to. So -- it's a moving target. I wouldn't say we have any hard and fast financial targets yet, but we're obviously focused on growing earnings as efficiently as possible with the best flow-through possible.

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

Yes. So we've -- like Lenah or I think maybe I said in the prepared remarks, we've got a little over 50,000 square feet left I'd say 1/3 of that is probably restaurant-oriented space, and it also includes the former Malibu Farm space. So we'll be looking at some restaurant concepts that are complementary to all the stuff that we've announced and what still exists at the Seaport. I think beyond that, we've got the Balloon Museum coming. We have NealWolf coming. We have the event space and then we have the rooftop of Pier 17 concentrators. That's a great set of anchors and then the removal of the Tin building F&B, I think 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 Blue Museum is going to help all the other F&B that we've either announced exist down here that we'll look to fill the existing vacancy with.

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

Yes. I think CAD is definitely going to be a unique asset for us to program around. The long Club has been very successful doing a lot of corporate events and social event-related business. And so I think those 2 concepts with the Open Container district that we announced are going to give us a lot of flexibility. We're going to look at everything from doing concerts on the cobblestones or concerts out on the peer. 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's also Americas 250-year anniversary. So there'll be a lot of activity during the summer around that, especially with the Fourth of July fireworks. And then we're going to do a lot of programming around cultural events and sporting events because I think whether it's watch parties, whether it's whether it's community-oriented events like what we have coming up at this weekend around Holy we're 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've got down here.

Yes, that's awesome. And then last one for me, and I'll step out. Lenah, 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've 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're continuing to try and refine that. But I would I would use Q4 as our reference point for right now.

Yes. I think it will be a little up and down, Matt. Q1 is going to have some transitional costs related to the closures that we've 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 Lenah's point, Q4 is a good reference point moving forward, and hopefully, we can improve upon it.

Next question, Patrick Sather with Congreve.

Congrats on all the recent announcements. My question, first one is around the kind of criteria for the buybacks. You have a great slide in Medacta shows that the stock is trading at $0.50 on $1 or probably less than that. And obviously, that's a great hurdle rate. And so a lot of companies use buybacks on weakness, but you could argue the stock, it's been all weakness. So I'm just curious what caused 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're very happy to see.

I appreciate the question. For the buyback program, we won't put out any public comments related to parameters or timing. We'll 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're referencing in our supplemental but we're also cognizant that we're building an organization that can grow over time, and we have relatively limited float. So that's always a consideration when you're using buybacks. This is my fifth public company that I've been part of. We've had buyback programs at all but one of them, and we use them opportunistically and I think opportunistic the approach that we'll use, but that ultimately will be a Board decision, and we'll 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 ever complementing or competing with the Moat experience that's coming a year later, just how do these 2 go together.

Great question. I think the balloon Museum is definitely complementary. Both of those teams, the Malwa team and the Blue Museum know each other, and there's a lot of mutual respect for 1 another. We spoke with MealWolf before moving forward with the Blue Museum and they were very supportive of it. So I think they're going to be complementary to 1 another. They're both ticketed experiences. They both have done very well in other markets. The Blue Museum was here in 2023 and did exceptionally well, a little farther up the river on Pier 36. So I think activity breeds more activity and having them both open down here really gives the local population, workers, 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 blue 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're really trying to create a district that can support the local community because we've got a growing residential population down here. but there can also be a destination for an entire day for a family, a couple an individual or anybody in between.

That's great. Is a part we build and you're 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.

Yes. It is cash flowing. There's a component of the units that are rent stabilized. It's almost 100% leased. I think we have 1 or 2 vacant units, it's got a lot of interest. There's 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 has definitely ramped up. So unlike 250 Water Street, where we had some disclosure obligations related to the materiality of that sale, we'll probably speak more to 85 South Street if and when we sell it rather than providing more real-time updates just because it's providing real-time updates can sometimes put us at a competitive disadvantage when we're trying to work through a transaction.

Understood. The 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're kind of local there and kind of how do the Vegas properties still fit into the company given both the geographic reports of it and just less news from there.

Yes. I think look, in Las Vegas, we've got a phenomenal facility with the ballpark. It's at the center of Howard Hughes' 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'd love to see Howard Hughes continuing to invest in that project that ultimately will enure benefit to the baseball team. 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 bit more creative from a ticketing perspective because we've got a great ticketing team out there.

Doing things like that on the off-season is only going to help the profitability of that overall operation out there. So I think we've got some room to create value. That being said, I think live sports is a great business. It's a business that has seen tremendous value appreciation over time. So if and when somebody has an interest in the team, we'll always listen. But I think we faced a pretty high premium on the team in the ballpark given the quality of the facility and the quality of the operation that we have out there.

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

Thanks, everybody. I 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.

Greetings, and welcome to the Seaport Entertainment Group Third Quarter 2025 Earnings Call. [Operator Instructions] 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, Matt Partridge; and our Interim Chief Financial Officer, 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 now turn the call over to Matt.

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 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 Lenah and the opportunity she has in front of her with her new role. Lenah 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 has 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 hospitality and entertainment platforms. With respect to our current portfolio, let's start with New York.

I want to address the recent questions about New York City tourism and real estate trends and their broader impacts on our business. The New York City market continues to present a mixed picture. On the tourism front, international visitation remains below pre-pandemic levels, currently at about 90% of 2019 volume and will likely remain soft in the near term.

This has impacted higher spending patterns typically associated with international guests. That said, domestic travel remains resilient and total New York City visitation is projected to reach almost 65 million visitors in 2025, surpassing 2024 levels and approaching pre-pandemic visitation levels.

Meanwhile, the Manhattan office market has shown strength. It is one of the few major U.S. cities to exceed pre-COVID office leasing activity, driven by increasing return to office momentum, particularly within the financial services, technology and media industries.

While office leasing in Lower Manhattan hasn't rebounded at the same levels as Midtown, Midtown South and some of the higher-end corridors, Lower Manhattan office leasing will benefit from taking supply out of the submarket through office to residential conversions.

An estimated 10,000 new residential units have recently come to market or are expected to come to market over the next few years, which will further enhance the area's vibrancy and residential density. Since 2010, Lower Manhattan has seen its population grow by nearly 29%, which is the fastest-growing district in all of Manhattan and the second fastest-growing district in all of New York City behind Brooklyn CD2, which includes Downtown Brooklyn, DUMBO, Brooklyn Heights and other submarkets that are right across the East River with easy access to the Seaport via the Subway Ferry and Brooklyn Bridge transportation networks.

As part of Lower Manhattan's growth, 2 of the most proximate submarkets to the Seaport, the Financial District and the Seaport neighborhood itself experienced residential population growth of 45% and 34%, respectively, well above New York City's 7.7% growth rate over the same time frame.

Furthermore, the under 18 population in Lower Manhattan grew more than 60%, the fastest in all of New York City and FireEye residents between the ages of 20 and 34 years old have increased by 12.5%, a 60% higher growth rate than Manhattan's 20- to 34-year-old population growth rate.

As a result of the office leasing strength in other submarkets, moderating supply from these conversions and a continued shift to becoming more of a younger residential neighborhood, incremental demand for commercial space in Lower Manhattan should grow faster than most, if not all, submarkets in New York City, which should ultimately help push rents higher over the long term for all commercial uses.

In the near term, our opportunity lies in our ability to curate and deliver compelling high-quality experiences within the Seaport, experiences that drive visitation, time spent in neighborhood and customer spending regardless of broader market cycles or submarket dynamics.

Sticking with New York, I'd like to provide a quick update on the sale of 250 Water Street. In August, we announced we entered into an agreement to sell the 250 Water Street development project for $150.5 million to Tavros, an experienced and active mixed-use New York City-based developer.

In September, Tavros exercised its first extension option and more recently, they exercised their second and final extension option. As a result, the outside closing date for the sale is now December 15. The deposit has increased to $7.5 million and the sale price has increased to $152 million.

Once completed, we estimate the sale will positively improve historical cash burn by more than $7 million as a result of eliminating interest expense through the repayment of the associated land loan and other related carrying costs such as taxes, insurance and site maintenance expenses.

We remain confident in Tavros' ability to execute on the project and continue to believe this will be a terrific addition to Lower Manhattan and the Seaport neighborhood. Hospitality operations during the third quarter and year-to-date have seen top line demand level off in certain legacy venues, while newer concepts such as Duutano, which opened in May and Lawn Club, which is in its second full year of operation, have both continued to outperform on a relative basis due to strong social and corporate demand.

During the quarter, same-store Seaport food and beverage revenues were up 8%, while overall hospitality revenues increased 3% year-over-year, both of which are also sequential improvements from the first and second quarters. We expect a moderation in food and beverage revenue growth during the fourth quarter as we prioritize flow-through and profitability potentially at the expense of revenue growth.

But we believe the recently announced additions of Flanker Kitchen and Sports Bar and Hidden Boot Saloon will help drive momentum at Pier 17 in the back half of 2026. We believe that top line softness we are experiencing in certain legacy venues is due to structural challenges. Such as the type of offering or price point, and we intend to address those issues as part of our ongoing repositioning efforts. Those repositioning efforts will also include a full assessment and go-forward plan for the Tin Building, which we intend to provide along with our broader hospitality strategy during our next earnings call.

And finally, before moving on from our hospitality segment, I'm pleased to share that we have now completed a number of technology initiatives, including fully centralizing our point-of-sale and procurement systems across all of our hospitality businesses.

This integration enhances our purchasing power, financial visibility and reporting accuracy, enabling us to better optimize performance and margins across the portfolio. This represents a significant milestone for our company, and I want to take a moment to thank our team for the tremendous work over the past year to bring these projects to completion.

As we previously disclosed, we made the decision not to move forward with the rooftop winter structure. Despite its strong appeal as a way to transform the rooftop into a year-round venue, as capital costs and operational complexities rose, the project became less feasible. Despite this change, we remain excited and committed to the rooftop of Pier 17 as one of the preeminent outdoor entertainment and event venues in New York City.

Pollstar's third quarter worldwide top 200 club rankings placed the rooftop of Pier 17 seventh by gross ticket sales among venues of its size, a 5-spot improvement from last year's position. This achievement underscores the venue's continued growth, global recognition and strength of our live entertainment programming.

In the third quarter, we hosted 35 concerts, including 22 performances that were at or near sellout capacity. The sell-through rate or the number of tickets sold relative to overall show capacity was 86%, driving nearly 100,000 people to the Seaport.

We're encouraged by the performance of 2 newly introduced add-on experiences for this year's concert season, the Patron Patio, a 2-level offering with a dedicated bar that provides elevated views of the performances and Liberty Club, an enclosed lounge area with seating, a dedicated bar and all-inclusive food offerings.

Both initiatives create meaningful upsell opportunities and deliver unique experiences that drive incremental spending and improve the guest experience. In addition to the concert series, we hosted several unique events on the rooftop of Pier 17.

Among them was the NBC broadcasted 49th Annual Macy's 4th of July Fireworks celebration, Nike's the One Global Finals held under the Jordan Brand banner, which showcased some of the top used basketball players worldwide and the North American premiere of the M.M. documentary Stands featuring a special appearance by Marshall Mathers.

The benefit of hosting these events and experiences is best represented by the Macy's 4th of July Fireworks celebration, which helped drive the single highest grossing revenue day in SEG's history. We achieved this through multiple buyouts across our dining venues and through our partnership with Macy's, while also working with New York City to provide thousands of free tickets and viewing opportunities for city residents.

In addition to the fireworks, in October, we hosted the New York City Wine & Food Festival with Chefs Jean-George acting as culinary host. The 5-day festival, which included an opening party at the Tin Building, drew more than 35,000 visitors across a variety of events driving significant awareness to the Seaport.

The experience showcased some of the world's most celebrated chefs creating a truly one-of-a-kind culinary event. These events, among others, hosted at the Seaport this year have further validated our conviction in our ability to deliver marquee events that drive substantial visitation to the neighborhood and position us as a premier destination for cultural experiences in New York City.

As mentioned previously and highlighted in our press release last week, we are pleased to announce Flanker Kitchen and Sports Bar and Hidden Boot Saloon, 2 concepts from Carver Road Hospitality. The award-winning Flanker brand currently includes locations in Salt Lake City, Glendale and Las Vegas, and we're excited to welcome their East Coast flagship location to the Seaport.

These concepts will occupy over 14,000 square feet at Pier 17. Flanker Kitchen and Sports Bar will offer an elevated cocktail-focused sports and dining experience with Hidden Boot Saloon offering live music and country style atmosphere, both with private event spaces.

This new venue introduces fresh, differentiated concepts that will be a complement to the recently opened dining and nightlife venue in Toronto as well as to our existing restaurant portfolio in the neighborhood. Our Seaport neighborhood merchandising plan, which also includes Meow Wolf and the aforementioned Duutano and Lawn Club should appeal to the more social and sometimes younger demographic that is becoming increasingly prevalent in Lower Manhattan.

Overall, with more than 110,000 square feet of space leased or programmed over the past 12 months, our plan for the Seaport should build momentum in the coming years as our concepts further support Lower Manhattan's increasing residential density and evolving population.

Finally, I want to congratulate the Las Vegas Aviators on a historic season as Pacific Coast League champions, celebrating the franchise's first PCL title since 1988. While we didn't take home the Championship title, the team narrowly lost the AAA National Championship game by way of walk-off home run in the bottom of the ninth inning. We're extremely proud of their achievements.

Our team in Las Vegas is now in the midst of transforming the Las Vegas ballpark to Enchant, a winter wonderland activation complete with ice rink and other festive activities, which opens later this month and runs through the holiday season.

This year, we made the decision to bring the operations in-house, which required upfront investment and start-up costs, but we believe it will prove to be a worthwhile endeavor as it should strengthen guest engagement, introduce new audiences to the venue and allow us to cross-market to a broader customer base.

We anticipate more than 175,000 guests will visit this season, driving revenue to the ballpark during baseball's off-season. With that, want to again thank the entire SEG team for their extraordinary effort to date as we continue to drive improvement quarter-to-quarter. I'm so appreciative of their commitment and enthusiasm, and I know we'll deliver further progress over the coming months as we get into 2026.

I'll now turn it over to Lenah.

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 their respective segments that most appropriately reflect the source of sponsorship or events. 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 Jean-George Restaurants since they are reflected in the equity and earnings or losses 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 restaurants.

Including results of our unconsolidated venture Lawn Club, total hospitality revenues increased 5% year-over-year, while same-store hospitality revenue rose 11%. These gains were driven by the continued success of the Lawn Club, the strong launch of Duutano and the benefit our venues received from hosting events on the 4th of July.

Hospitality segment adjusted EBITDA, including earnings from unconsolidated ventures, declined by $2.9 million year-over-year as a result of reflecting a favorable onetime benefit from reimbursements received in the third quarter of 2024 related to prior period operating expenses.

Excluding this onetime item, the Hospitality segment adjusted EBITDA improved by 40% year-over-year, supported by the growth of the Lawn Club, improvements from Duutano, event-driven restaurant buyouts during Macy's 4th of July celebration and overall lower operating expenses achieved through cost-cutting measures.

Moving to the Entertainment segment. Revenues declined 5% year-over-year, primarily due to hosting 7 fewer concerts at the rooftop at Pier 17 compared to prior year. As we noted on the last call, the show count was favorable in the second quarter compared to prior year, but unfavorable to the third quarter, reflecting a timing shift in shows rather than a change in demand.

Partially offsetting the lower number of concerts was revenue from the Macy's 4th of July broadcast as well as the Las Vegas Aviators post-season run, which included 3 additional playoff games, resulting in a Pacific Coast League championship game appearance, all held at our Las Vegas ballpark.

Entertainment segment adjusted EBITDA decreased 51% year-over-year in the third quarter, primarily reflecting decreases resulting from the reduced concert count, variances in allocations of overhead compared to prior year, along with increased sponsorship fulfillment costs, which mainly occurred during peak concert season.

Within the landlord segment, rental revenue drove most of the consolidated revenue increase in the third quarter, rising 56% year-over-year on a pro forma basis. We benefited from approximately $1 million in termination-related income in the quarter associated with Nike and ESPN, both tenants of Pier 17.

Rental revenue growth also included private event activity, most notably Nike's the One Global Finals event, which took place on the rooftop at Pier 17. Looking ahead, we'll no longer receive or recognize any rental revenue from ESPN while continuing to recognize NIKE's termination income through 2026 and into the first quarter of 2027.

In addition, Nike will continue with its ongoing monthly rent payments under the lease agreement. Landlord segment adjusted EBITDA decreased 45% year-over-year in the third quarter, primarily due to onetime non-cash charges totaling around $6 million, which include a $4 million loss recorded on 250 Water Street in conjunction with classifying the property as held for sale and a $2 million write-off related to capital spend on the rooftop winter structure.

Excluding these non-recurring items, landlord segment adjusted EBITDA improved 76% year-over-year, reflecting both the revenue gains discussed earlier and lower operating expenses compared to the prior year period.

Overall, total segment adjusted EBITDA for the company in the third quarter of 2025, which reflects the financial performance of each of our segments before the effects of G&A interest income and expense and depreciation and amortization and includes the results of unconsolidated ventures, declined by $7 million compared to Q3 2024 on a pro forma basis.

When you exclude the impact of the nonrecurring items discussed earlier from both periods, notably the 250 Water Street loss on held-for-sale classification, the rooftop winter structure write-off and the favorable hospitality operating expense reimbursement recognized in the prior year, consolidated segment adjusted EBITDA improved by 76% or over $4 million year-over-year.

General and administrative expenses during the quarter were $18 million, resulting in a quarterly year-over-year reduction of 2%. While prior year G&A continues to be impacted by our predecessor cost structure, in the quarter, we recognized approximately $11 million in accruals related to the leadership transition.

Excluding this onetime accrual, our corporate cost structure continues to reflect sequential improvement as we work towards a sustainable operating model. Interest expense decreased by $3 million compared to Q3 of 2024 as a result of a $1 million decrease in interest expense related to 250 Water Street when compared to 2024 because of a loan paydown that occurred around the time of our separation from Howard Hughes.

An approximately $800,000 decrease in interest expense related to the capitalization of interest on the 250 Water Street loan and $1 million of offsetting interest income earned on invested cash deposits. During the quarter, we suspended capitalization of interest for 250 Water Street midway through the period as it was classified as held for sale, which resulted in higher interest expense compared to the second quarter.

When compared to pro forma Q3 2024 results, equity and earnings or losses from unconsolidated ventures improved 180% year-over-year, mainly driven by continued growth at Lawn Club, which in its second year of operations continues to meet a strong demand for private events.

Third quarter net loss attributable to common stockholders was $33.2 million, representing a year-over-year decline of around $700,000 or 2% with a net loss attributable to common stockholders per share of $2.61, an improvement of $3.28 per share or 56% compared to the third quarter of 2024.

The non-GAAP adjusted net loss attributable to common stockholders for the third quarter was $7.2 million, representing an improvement of around $18 million or 71% versus the comparable period in 2024. Q3 2025 non-GAAP adjusted net loss attributable to common stockholders per share was $0.57, an improvement of $3.97 per share or 87% compared to the third quarter of 2024.

Capital expenditures in Q3 2025 totaled $4.8 million. Excluding capitalized costs associated with the 250 Water Street development, the majority of the capital expenditures were related to the rooftop winter structure, completing the River Deck Bar build-out and landlord work and maintenance capital for our existing operations.

Long-term debt outstanding as of September 30 remained at $101.4 million, unchanged from year-end 2024, except for regular way amortization of the Las Vegas ballpark loan. Net debt to gross assets at quarter end was negative 2%. Our negative net debt position continues to reflect the strength of our balance sheet and cash restricted cash and cash equivalents balances, which totaled $117 million as of September 30.

Before we open it up for questions, I want to take a moment to thank Matt for his leadership and guidance in our time working together, but especially over the past few weeks during this transition. I'd also like to thank the entire SEG team, our partners and our Board of Directors for their continued support and collaboration.

I'm excited about the opportunities ahead as we move into planning for 2026, and I look forward to building on the progress we've made as a team. With that, we'll now open the line for questions.

[Operator Instructions] Our first question comes from the line of Matthew Erdner with JonesTrading.

Congrats on the continued improvement. As we look to profitability, what do you think are the biggest levers that you guys can pull to drive that path forward?

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 Duutano hasn't rent commenced or started operating.

So I think getting some of these tenants open and operating and paying rent, continuing the momentum on the leasing front to fill up the remaining vacancy, which if we include the Nike space that we'll get back in 2027, it's about 100,000 square feet left of programmer 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 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?

Yes. I think demand has been really strong. There's plenty of articles out there speaking to demand specifically 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 and getting them in the space, whether that's Duutano or Flanker or Cork or Willets. 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? Are you guys wanting to kind of get all of these guys in and opened up prior to Meow Wolf to say, maybe middle, second half of next year, we should look for velocity to really pick up?

Yes. I think velocity is definitely going to be in the back half of the year. I think Cork will probably get open before the midpoint. Willets will be around that 4th of July time frame, hopefully. And then in Flanker and some of the other stuff we're working on will hopefully be in the back end of 2026.

And then depending on who we fill the other vacancies with will either be a late '26 or call it, first half of 2027. So the goal is to get everybody open and operating before Meow Wolf, but obviously, it will depend on how things get phased in here from a leasing standpoint.

Got it. And then last one for me. 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?

Yes. On the latter point, I'm relatively new to New York. I've been here about 2 years now. And a lot of the conversations I have with people who live in New York, say, 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 maybe 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 concepts 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 in more next year.

Some of that will be through programming the rooftops. Some of that will be doing special events out on the Pier and 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.

[Operator Instructions] Our next question comes from the line of Ross Haberman with RLH Investments.

Could you talk specifically -- you talked a little bit in your Q about the restructuring with Jean-George. Do you think you'll hit a breakeven with that cash-wise in '26? Let me start off with that.

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

Jean-George, the Tin Building, that's what I'm talking about.

For the Tin Building. 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, basically, are you cutting costs there?

Or...

No, sorry, the restructuring was really to bring the employee base in-house. It was previously third-party managed by Jean-George. 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 had license agreements now instead of management agreements. And so we were able to reduce some of the management fees that we were paying for that external management.

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

I think everything is on the table. Now we're obviously working very closely with our counterparts at Jean-George. 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?

And I mean, 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 not -- maybe won't make it there. But 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 will probably be somewhat light. We're deep into the Meow Wolf landlord work right now, and we're doing some work on Willets and Cork. It will probably ramp up in the first half of 2026. We've got about $50 million or so committed between all the projects that we've announced. I think the majority of that is going to go out sort of in the mid to back half of 2026.

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. 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.