10-K: Seaport Entertainment Narrows Losses, Boosts Revenue in 2025

Seaport Entertainment Group Inc. reported a significant reduction in net losses and an 18% revenue increase for fiscal year 2025, driven by hospitality and entertainment growth, despite ongoing negative operating cash flow.

Summary

• Net loss decreased by 24% to $116.7 million for the year ended December 31, 2025, compared to $153.2 million in the prior-year period.
• Total revenue increased by 18% to $130.4 million in 2025, up from $110.2 million in 2024.
• Hospitality revenue increased by 72% to $51.7 million, primarily due to the consolidation of Tin Building by Jean-Georges and the opening of new hospitality concepts.
• Entertainment revenue increased by 14% to $58.8 million, driven by increased revenue from the Las Vegas Aviators, special events at the Las Vegas Ballpark, and additional concerts at The Rooftop at Pier 17.
• Operating cash flow remained negative at $49.7 million in 2025, a slight improvement from $52.7 million in 2024.
• The company completed the sale of its 250 Water Street development site in February 2026 for gross proceeds of $143.0 million, recognizing an $11.0 million loss on assets held for sale in 2025.
• The Board of Directors approved a common stock repurchase program of up to $50.0 million on February 25, 2026.
• Occupancy for Landlord Operations at the Seaport was 55%, with 90% leased or programmed, as of December 31, 2025.
• The Tin Building by Jean-Georges ceased operations in February 2026, with the company entering into a lease for 100% of the Tin Building with Lux Entertainment to open the Balloon Museum.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, reflecting significant progress in reducing net losses and growing revenue, particularly in core entertainment and hospitality segments. However, the persistent negative operating cash flow, the capital-intensive nature of its business, and the inherent volatility and competitive risks in the entertainment and real estate sectors temper the overall sentiment.

Positives

• Net loss decreased significantly by $36.5 million (24%) year-over-year, indicating improved financial performance.
• Total revenue increased by $20.2 million (18%) year-over-year, demonstrating growth across business segments.
• Hospitality segment Adjusted EBITDA loss decreased by $13.7 million, primarily due to the consolidation of Tin Building by Jean-Georges and increased event revenue.
• Entertainment segment Adjusted EBITDA increased by $1.2 million (152%), driven by strong performance from the Aviators, Las Vegas Ballpark events, and Pier 17 concerts.
• Equity in earnings from unconsolidated ventures improved by $44.5 million, swinging from a $42.1 million loss in 2024 to a $2.4 million gain in 2025.
• General and administrative costs decreased by $20.5 million (32%), contributing to overall expense reduction.
• Interest income (expense) improved by $7.2 million, shifting from a net expense to a net income of $0.5 million.
• The successful rights offering in October 2024 generated $166.8 million in net proceeds, bolstering liquidity.
• The sale of 250 Water Street for $143.0 million in February 2026 provides substantial cash proceeds.
• The Board's approval of a $50.0 million common stock repurchase program signals confidence in future value and a commitment to shareholder returns.
• The Rooftop at Pier 17 sold approximately 190,000 tickets (89% of available) across 62 shows in 2025, generating over $10 million in gross ticket sales, highlighting strong demand.
• Meow Wolf leased approximately 74,000 square feet of vacant space in Pier 17, improving occupancy and future revenue prospects.

Negatives

• The company continues to incur significant net losses, totaling $116.7 million in 2025.
• Operating cash flow remained negative at $49.7 million in 2025, indicating ongoing reliance on financing activities.
• Landlord Operations Adjusted EBITDA swung to a $7.7 million loss in 2025 from a $2.3 million income in 2024.
• An $11.0 million loss was recognized on assets held for sale (250 Water Street) in 2025.
• Other income (loss), net, decreased by $9.5 million, resulting in a $2.8 million loss in 2025.
• Hospitality costs increased significantly by $47.6 million (114%), primarily due to the consolidation of Tin Building by Jean-Georges.
• Leadership transition costs of $12.2 million were incurred in 2025.
• The Tin Building by Jean-Georges ceased operations in February 2026, and the company expects to record a loss on disposal of certain assets in the first quarter of 2026.
• The Tin Building will not generate rental income from Lux Entertainment until substantial renovations are completed and rent payments commence, potentially leading to a period of reduced cash flow from that asset.
• The company has significant outstanding indebtedness of approximately $99.6 million as of December 31, 2025.
• No dividends are anticipated to be paid to common stockholders in the foreseeable future.

Risks

• The portfolio has experienced, and is expected to continue to experience, significant negative operating cash flow and net losses, requiring substantial cash and potentially forcing changes to the business plan or asset disposals.
• Business is dependent on discretionary consumer spending patterns and could be materially impacted by economic downturns, recessions, financial instability, inflation, or changes in consumer tastes and preferences.
• Downturns in tenants' businesses may reduce revenues and cash flows, with increased default rates due to factors like higher interest rates.
• Inability to renew leases, lease vacant space, or re-lease space as leases expire could adversely affect financial condition.
• Operational results of some assets, especially the Seaport, may be volatile due to seasonality, event revenue, demand for space, and risks from start-up businesses.
• Significant competition across all business segments (retail, office, hospitality, entertainment, sports) could adversely affect the business.
• Concentration of assets and operations in New York City and Las Vegas exposes revenues and asset values to adverse changes in local economic conditions, including tourism and specific industry downturns.
• Exposure to risks associated with the development, redevelopment, or construction of properties, including the Fashion Show Mall Air Rights, such as inability to obtain financing, cost overruns, delays, and regulatory hurdles.
• Development projects may subject the company to certain liabilities, including claims for construction defects or negligent performance by third-party contractors.
• The continued popularity and/or competitive success of the Las Vegas Aviators baseball team cannot be assured, impacting financial results.
• The planned move of the Athletics MLB team to Las Vegas in 2028 could create competition for the Aviators, potentially negatively impacting attendance and revenue.
• Decisions by the MLB Professional Development Leagues (MLB PDL) may have a material negative effect on the Aviators' business and results of operations, including affiliation license renewal and control over certain revenues.
• Injuries to, and illness of, players on the sports team could hinder the Aviators' success.
• Inability to develop, redevelop, or expand properties without sufficient capital or financing.
• Outstanding indebtedness of approximately $99.6 million and potential future indebtedness could adversely affect the business and prevent fulfillment of financial obligations, especially with changing interest rates.
• Inflation has adversely affected and may continue to adversely affect the company by increasing costs beyond what can be recovered through price increases.
• Extensive governmental regulation and failure to comply could adversely affect the business (e.g., liquor licenses, data privacy, building codes, environmental laws).
• Development of properties entails a lengthy, uncertain, and costly entitlement process, subject to political support and regulatory discretion.
• Government regulations and legal challenges may delay or increase expenses for property development.
• Compliance with the Americans with Disabilities Act (ADA) and similar laws may incur significant costs.
• Community opposition and changing public sentiment can delay, restrict, or prevent projects and operations.
• Risks related to the company's separation from Howard Hughes Holdings Inc. (HHH), including no prior history as a separate public company, not achieving expected benefits, and potential indemnification obligations to HHH.
• Future sales of common stock, or the perception of such sales, could depress the stock price.
• Suppliers or other business partners may conclude the company's financial stability as a separate entity is insufficient.
• Anti-takeover provisions in corporate documents, Delaware law, and the Investor Rights Agreement may prevent or delay an acquisition.
• MLB rules require prior approval for any person or group seeking to acquire a controlling interest in the company or the Aviators, restricting change of control opportunities.
• Loss of key personnel could adversely affect the business and operations.
• Actual or threatened terrorist activity, acts of violence, or civil unrest could adversely affect financial condition and results of operations.
• Weakness or instability in the general economy could result in future asset impairments.
• Exposure to significant potential risk from lawsuits, investigations, and other legal proceedings.
• Cybersecurity risks and incidents, including data breaches and third-party vendor vulnerabilities, could compromise information and expose the company to liability.
• Artificial intelligence and other machine learning techniques could increase competitive, operational, legal, and regulatory risks.
• Health, safety, and security risks in live entertainment offerings and venue operations.
• Brand and reputation could be harmed by negative publicity.
• Risks related to intellectual property, including inability to renew licenses or allegations of infringement.
• Global economic and political instability and conflicts could adversely affect the business, financial condition, or results of operations.
• Some directors' involvement in other businesses may create competing or conflicting interests.
• Real estate assets are illiquid, limiting the ability to sell properties promptly in response to changing conditions.
• The sponsorship business is cyclical and sensitive to brand safety concerns, market conditions, and event performance.
• Exposure to risks related to third-party ticketing platforms and payment processors, including outages, fee disputes, and regulatory scrutiny.

Future Outlook

The company expects to continue experiencing significant negative operating cash flow and net losses for the foreseeable future. Management believes existing cash balances, restricted cash, and access to capital markets will provide adequate liquidity for current and long-term obligations, including capital expenditures for the next twelve months. The strategic plan involves further transforming the Seaport into a vibrant neighborhood, focusing on leasing up existing assets, improving operational efficiencies, expanding the Jean-Georges Restaurants partnership, and leveraging events and sponsorships. The company also intends to opportunistically acquire entertainment-related assets and utilize strategic partnerships, while evaluating development opportunities for the Fashion Show Mall Air Rights. A loss on disposal of certain assets related to the Tin Building by Jean-Georges is expected in the first quarter of 2026, and the Tin Building will not generate rental income from its new tenant, Lux Entertainment, until renovations are completed and rent payments commence.

Management Comments

• Management believes that our future success largely depends upon our continued ability to attract and retain highly skilled talent.
• Management believes that our existing cash balances and restricted cash balances, along with access to capital markets, taken as a whole, provide (i) adequate liquidity to meet all of our current and long-term (beyond 12 months) obligations when due, including our third-party mortgages payable, and (ii) adequate liquidity to fund capital expenditures and development and redevelopment projects.
• Management is continuing to evaluate the nature and amount of the loss [on disposal of Tin Building by Jean-Georges assets], including identifying the specific assets to be disposed of, confirming their carrying values, and assessing expected proceeds, if any.

Industry Context

StockSavvy.ai notes that Seaport Entertainment Group operates in the highly competitive and capital-intensive intersection of entertainment and real estate, a sector increasingly focused on experiential offerings over traditional goods. The company's strategy to create unique entertainment destinations aligns with broader consumer trends favoring experiences, particularly in high-barrier-to-entry markets like New York City and Las Vegas. The shift towards internalizing food and beverage operations and securing new tenants like Meow Wolf and Lux Entertainment reflects a proactive approach to asset management and diversification within its core real estate holdings, aiming to capture more value directly from consumer spending. The challenges of negative operating cash flow and the need for substantial capital are common in development-heavy real estate and entertainment ventures, especially post-spin-off.

Comparison to Industry Standards

• The company's focus on mixed-use entertainment and real estate is a growing trend, seen in projects like Hudson Yards (New York City) or The Grand (Los Angeles), which integrate retail, dining, and entertainment to create destination experiences.
• The Las Vegas Ballpark, named Triple-A Best of the Ballparks multiple times, demonstrates strong performance within the Minor League Baseball system, often outperforming many peer venues in attendance and revenue generation.
• The Rooftop at Pier 17, ranked seventh top club worldwide by Pollstar in 2025 and awarded Best Outdoor Music Venue by 2026 Rolling Stone Audio Awards, indicates a strong competitive position against major concert venues globally, such as Red Rocks Amphitheatre (Colorado) or The Gorge Amphitheatre (Washington), despite its smaller capacity.
• The 55% occupancy rate for Landlord Operations at the Seaport, while 90% leased/programmed, suggests a lag in physical occupation compared to stabilized, prime urban retail/office properties which often target 90%+ occupancy. This indicates ongoing lease-up efforts are critical.
• The significant negative operating cash flow is not uncommon for companies in heavy development or post-spin-off phases, but sustained losses require careful monitoring compared to mature, cash-generative REITs or entertainment conglomerates.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently a party to any pending or threatened legal proceedings that are believed to have a material adverse effect on the company's business or financial condition as of December 31, 2025.
• Received a $2.0 million litigation settlement in 2024, which did not recur in 2025.

Related Party Transactions

• Prior to the spin-off, Howard Hughes Holdings Inc. (HHH) provided various centralized services (e.g., property management, executive oversight, accounting, IT, HR) and allocated expenses to the company.
• A transition services agreement with HHH resulted in expenses of $0.1 million in 2025 and $0.3 million in 2024 for ongoing services.
• An Indemnity Fee Agreement with HHH for a guaranty supporting the 250 Water Street variable rate mortgage involved an annual guaranty fee of 2.0% of the $61.3 million refinanced debt balance, with $0.8 million capitalized and $0.4 million expensed to interest in 2025.
• Creative Culinary Management Company, LLC (CCMC), an indirect wholly owned subsidiary of Jean-Georges Restaurants (a related party), provided management services for certain retail and food and beverage businesses.
• Related-party management fees paid to CCMC amounted to $1.5 million in 2025, $2.3 million in 2024, and $2.2 million in 2023.
• Effective January 1, 2025, the company internalized food and beverage operations from CCMC, and terminated management agreements with CCMC on July 1, 2025.
• License Agreements were entered into with a wholly owned subsidiary of Jean-Georges Restaurants for intellectual property for the Tin Building by Jean-Georges and The Fulton Restaurant, resulting in related party license fees of $1.2 million in 2025.
• The company leases real estate assets to The Lawn Club (an equity method investee), generating rental revenue of $1.2 million in 2025, $13.0 million in 2024, and $12.0 million in 2023 (primarily from Tin Building by Jean-Georges before consolidation).
• A $0.6 million receivable from The Lawn Club for operational and development costs was recorded as of December 31, 2025.

Stakeholder Impact

• **Shareholders**: Potential for increased value from reduced net losses, revenue growth, and the newly approved share repurchase program. However, dilution risk from future equity issuances and the significant influence of Pershing Square Capital Management, L.P. remain factors.
• **Employees**: Benefits from competitive salaries, bonuses, equity ownership opportunities, and development programs. Leadership transition costs indicate some personnel changes and associated impacts.
• **Customers**: Continued focus on delivering unique and unparalleled experiences through diverse restaurant, entertainment, sports, retail, and hospitality offerings. The introduction of Lux Entertainment's Balloon Museum at the Tin Building offers a new attraction.
• **Tenants**: Efforts to lease up vacant space at the Seaport and drive foot traffic are beneficial. However, tenants face risks from economic downturns and competition in the highly competitive New York City and Las Vegas markets.
• **Creditors**: The company's outstanding indebtedness of $99.6 million is a consideration, though management believes existing liquidity is adequate. The post-year-end payoff of the $61.3 million mortgage related to 250 Water Street improves the debt profile.
• **Community (New York City & Las Vegas)**: Ongoing development and revitalization efforts in the Seaport and Summerlin areas contribute to local economies and tourism. The company's venues host numerous events, integrating into the local culture.

Next Steps

• Continue dedicated management of existing assets and expand existing and create new partnerships.
• Pursue strategic acquisitions of entertainment-related real estate and operating assets.
• Complete or monetize development and redevelopment projects, including evaluating strategic alternatives for the Fashion Show Mall Air Rights.
• Lease up remaining vacant space at the Seaport, including converting space from office to hospitality uses.
• Expand the purpose-built meeting and event space in Pier 17 to approximately 41,000 square feet.
• Improve efficiencies and increase margins in operating businesses.
• Explore new avenues for Jean-Georges Restaurants growth, including new restaurants, franchise models, fast-casual concepts, and private label wholesale product distribution.
• Leverage events and sponsorships at the Seaport to drive foot traffic and revenue.
• Improve and increase special event offerings at the Las Vegas Ballpark.
• Complete renovations of the Tin Building for Lux Entertainment's Balloon Museum.
• Execute the $50.0 million common stock repurchase program approved in February 2026.
• File the Proxy Statement for the 2026 Annual Meeting of Stockholders no later than 120 days after December 31, 2025.

Key Dates

Recommendation

The company demonstrates positive momentum with a significant reduction in net losses and robust revenue growth across its core entertainment and hospitality segments. Strategic moves like the sale of 250 Water Street and the approval of a share repurchase program are favorable. However, the persistent negative operating cash flow, the capital-intensive nature of its development projects, and the inherent volatility and competitive risks in the entertainment and real estate sectors warrant a cautious 'hold' recommendation. Long-term success hinges on sustained improvements in cash generation and effective execution of its strategic initiatives, which still carry considerable risk.

Keywords

Entertainment, Real Estate, Hospitality, New York City, Las Vegas, Seaport, Las Vegas Aviators, Las Vegas Ballpark, Jean-Georges Restaurants, Pier 17, Tin Building, Mixed-Use Development, SEC Filing, 10-K, Financial Report, Corporate Governance, Risk Management, Spin-Off, NYSE, SEG