SEG Q1 2026 Earnings Transcript

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DATE

Thursday, May 7, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Matthew Partridge
• Chief Financial Officer — Lenah Elaiwat

TAKEAWAYS

• Liquidity Events -- Completed the sale of 250 Water Street, generating over $75 million in liquidity and eliminating ongoing carry costs.
• Tin Building Lease -- Transitioned the Tin Building to a leased asset with Lux Entertainment for the Balloon Museum, with handover expected in late June and a museum opening anticipated this summer.
• Hospitality Expansion -- Opened Sadie's Restaurant and Garden Bar, which exceeded initial expectations and hosted events attracting thousands, including the New York Jets Draft Night Fan Fest.
• Programming Initiatives -- Launched a comprehensive calendar of sporting, cultural, and entertainment programming, including nearly 70 Pier 17 concerts lined up for the year, half already on sale and reportedly experiencing strong demand.
• Non-GAAP Adjusted Net Loss -- Improved by 21% year over year to a loss of $17.9 million, or $1.41 loss per share.
• Operating EBITDA -- Loss improved by $3.1 million, or 21% year over year, to a loss of $11.8 million despite a 21% decrease in revenue.
• Hospitality Segment EBITDA -- Improved by $2.9 million, or 36% year over year, driven by Tin Building and Malibu Farm closures.
• Hospitality Segment Revenue -- Decreased by $2.6 million, or 34% year over year, primarily due to Tin Building and Malibu Farm closures, offset by a favorable comparison at GITANO (which operated a full quarter).
• Weather Impact -- Hospitality revenue, excluding Tin Building, Malibu Farm, and GITANO, declined 22% year over year due to extended below-freezing temperatures and two major Q1 snowstorms affecting New York restaurants.
• Landlord Segment Rental Revenue -- Decreased by $1 million, or 27%, due to an $800,000 straight-line rent adjustment from iPic's Chapter 11 filing; excluding iPic, rental revenue decreased 4% year over year, impacted by the ESPN lease expiration, partially offset by Nike termination fees.
• Cost Savings in Landlord Segment -- Achieved $1.1 million, or 14%, in expense savings, with continued efficiencies expected to build through the year.
• Las Vegas Revenue -- Increased by 8% year over year, driven by two sold-out Big League weekend games with over 20,000 attendees and four regular season games versus three in the prior year.
• Las Vegas Expenses -- Increased by 26% year over year due to field replacement following the Enchant activation, front-loaded sponsorship and seasonal costs, and an additional home game.
• Net Loss -- Attributable to common stockholders was $44.1 million, a 38% year-over-year increase; net loss per share was $3.47, up $0.96 year over year, driven by $12 million higher depreciation (primarily from Tin Building repositioning), restructuring costs, and weather-related impacts.
• G&A Expenses -- Totaled $8.1 million for the quarter; excluding $1.4 million in restructuring costs, G&A was $6.7 million, generally in line with the previous quarter, and improved $3.1 million (31%) year over year on a comparable basis.
• Capital Expenditures -- $6.1 million in Q1, focused on Meow Wolf, Flanker Kitchen and Sports Bar, Hidden Boot Saloon, Sadie's, and the Public Service concept; full portfolio stabilization is expected by 2028 with total remaining investment of $70 million–$90 million.
• Cash Position -- Total cash (including restricted) increased by $57.3 million to $144.7 million as of March 31, 2026; net cash position was $105.6 million, with $27 million in restricted cash related to 250 Water Street post-closing obligations.
• Debt -- Only remaining debt is a $39 million Las Vegas ballpark loan after repaying the 250 Water Street loan.
• Segment Model Shift -- Adopted operating EBITDA as the segment reporting measure, excluding nonrecurring and below-the-line income and expenses as a new standard for performance evaluation.
• Nike Lease Early Termination -- Recently negotiated and received early termination and payment for the Nike lease, allowing for accelerated planning and build-out of the event space at Pier 17; opening expected mid-2027.
• Vacancy and Lease Strategy -- One Seaport Plaza remains the largest vacancy (about 20,000 square feet); company is focusing on finding the right anchor tenant and considering splitting the space for smaller tenants.
• Lease Structures -- Recent transitions from internal management to third-party leases or license agreements shift execution risk; percentage rent leases provide potential for cash flow upside beyond contracted minimums.
• Dividend/Buyback Strategy -- Buyback program remains in place as a potential capital allocation tool, with restrictions still in effect until the two-year anniversary mark.

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RISKS

• Net loss attributable to common stockholders increased $12.2 million year over year (38%), driven by elevated depreciation and restructuring costs, particularly from the Tin Building repositioning, and adverse weather impacts.
• Hospitality segment revenue declined 34% ($2.6 million) year over year, primarily due to Tin Building and Malibu Farm closures, with future revenue also expected to decrease until repositioning is complete.
• Las Vegas expenses rose 26% year over year, resulting from field replacement and front-loaded seasonal costs.
• Unconsolidated ventures, including Lawn Club and Jean-Georges Restaurant Group, recorded an approximate $1 million loss for the quarter due to inclement weather and operational disruptions.

SUMMARY

Seaport Entertainment Group Inc. (NYSE:SEG) reported substantial liquidity gains through the 250 Water Street sale, while accelerating asset repositioning with the Tin Building's conversion to a leased, soon-to-be cash-generating property. Management confirmed adoption of operating EBITDA as a segment metric, affirming Hospitality segment EBITDA improvement despite sizable revenue declines attributed mostly to strategic closures and weather-related disruptions. Las Vegas operations delivered 8% revenue growth through major events and robust ticket sales, although elevated expenses pressed margins amid expanded community engagement. The company secured early termination of the Nike lease, expediting development of the Pier 17 event space, and remains positioned for further cash-flow stabilization upon full portfolio activation by 2028.

• The implementation of percentage rent lease structures for new tenants (such as the Balloon Museum and Meow Wolf) is designed to allow for upside participation if tenant performance exceeds projections.
• Management stated, "we have the space back now, and we're able to start the planning and build-out," regarding the Nike lease and Pier 17 event space, indicating accelerated operational timelines.
• GITANO transitioned from internal operation to a third-party lease, reclassifying risk and offering potential for higher cash flow and operational leverage.
• The largest unleased space, One Seaport Plaza (about 20,000 square feet), remains uncommitted, with active discussions and possible subdivision under review to optimize visibility and foot traffic effects.
• Capital allocation remains flexible, with CEO Matthew Partridge stating, "we're going to evaluate all of our options before we put anything to work," reinforcing a cautious, opportunistic deployment approach.
• Pending sale of 85 South Street, with management confirming, "it is on the market, and we are having a whole host of conversations with various potential buyers."

INDUSTRY GLOSSARY

• Operating EBITDA: A company-defined performance measure excluding interest, taxes, depreciation, amortization, other nonrecurring items, gains or losses on asset sales, equity method activity, G&A expenses, and intercompany segment transactions.
• Straight-line rent adjustment: An accounting method that evens out rent expense or income over the life of a lease regardless of payment timing, with one-time impacts when lease terms change due to events like bankruptcy.
• Percentage rent lease: A lease structure where the landlord receives base rent plus a percentage of the tenant’s gross sales, allowing revenues to escalate with tenant performance.

Full Conference Call Transcript

Matthew Partridge: 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.

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

Matthew Erdner: 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?

Matthew Partridge: 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.

Matthew Erdner: 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...

Matthew Partridge: 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.

Lenah Elaiwat: 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.

Matthew Erdner: 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?

Matthew Partridge: 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.

Matthew Erdner: 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?

Matthew Partridge: 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.

Matthew Erdner: 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?

Matthew Partridge: 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.

Operator: Your next question comes from Ross with RLH Investments.

Ross Haberman: 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?

Matthew Partridge: 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.

Ross Haberman: 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?

Matthew Partridge: 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.

Ross Haberman: 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?

Matthew Partridge: 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.

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

Matthew Partridge: 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: [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.

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

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

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