Seaport Entertainment Group Inc.

Greetings and welcome to the Seaport Entertainment Group fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad as a reminder this conference is being recorded. It is now my pleasure to introduce Jason Wilkes, 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, Lena Eliwot. 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 standalone public company was to address multiple opportunities for improvement, including outsized priorities within the seaport, as we worked 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 Meow Wolf, Flanker Kitchen and Sports Bar, Hidden Boots Saloon, Willits NYC, Cork Wine Bar, and other exciting additions that I'll discuss shortly. Internalizing food and beverage operations across many of our company's wholly-owned, enjoyed venture-owned restaurants in the Seaport neighborhood. The Las Vegas Aviators winning the 2025 Pacific Coast League Championship, the franchise's first PCL title since 1988, and hosting and competing in the Minor League Baseball 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, and the New York City Wine and 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 and evaluating market conditions, we believe this transaction represented the best risk-adjusted outcome for the company. The transaction will generate net proceeds of approximately $75 million after we work through some post-closing obligations, which should largely be resolved in Q3 2026. With the sale complete, we've eliminated $7 million of annual cash burn related to interest expense and carry costs, We now have additional capital on our balance sheet and a clearer runway to execute against our strategic priorities. In addition to the 250 Water Street sale, the other significant announcement in early 2026 was the closure of the Tin Building in its current form as a culinary experience. We are very appreciative of Chef Jean-Georges, his team, and the Tin Building staff for their partnership, dedication, and effort. The Tin Building was an ambitious undertaking, and Chef Jean-Georges created a truly beautiful and distinct destination. Our partnership with Chef and its 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 John 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 its use and operating structure to achieve long-term sustainability. As a result, we signed a new lease with Lux Entertainment to bring their highly successful Balloon Museum experience to the 10 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 Balloon Museum exhibitions have toured through 23 major cities across Europe, North America, and Asia, often within historic and landmark buildings and with works from internationally recognized artists. They welcome more than 7 million visitors globally, and when set alongside Meow Wolf, the rooftop at Pier 17 concerts, existing and new restaurant offerings, our recently announced expanded event space, and other retail, cultural, and event-driven initiatives, 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 five years with two five-year extension options. The base rent includes annual contractual escalations and a percentage rent component above a contractually established revenue threshold. From a capital standpoint, work is underway at an estimated cost of approximately $5 million, with delivery to the tenant expected by the end of Q2 2026. Lux Entertainment will complete its interior, fit out at its own expense, and they anticipate opening this summer. Strategically, this agreement fundamentally changes the financial profile of the TIN building, transitioning it from a negative cash-burning operation to a stabilized, positive free cash-flowing asset that further complements the broader programming of the neighborhood. When compared to the financial performance of the TIN building in 2025, the Bluen Museum lease has the opportunity to improve the company's pro forma annual EBITDA by more than $22 million. This progress has positioned us for long-term financial stability something this collection of assets has not experienced in recent history. In terms of our go-forward focus, we have some very exciting things on the horizon. During the fourth quarter, we signed a 10-year agreement with a renowned Brooklyn-based arts, culture, and hospitality concept to occupy approximately 11,000 square feet in the historic cobblestones. We plan to announce our partner and the name of the project in the coming months, and we believe this new concept, which is centered around a multifaceted, evolving hospitality and music 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 Sadie's. Sadie's will occupy the first and second floors of a previously vacant restaurant space located at 19 Fulton Street and will include the outdoor garden bar that sits at the center of the historic pedestrian-only cobblestones. The restaurant and bar will feature new American food at an accessible price point, filling a need for a larger format communal and approachable restaurant within the seaport. Sadie's will also have a robust programming calendar featuring celebrations for seasonal, sporting, and cultural moments, including events centered around music-driven activations, the Kentucky Derby, People World Cup, U.S. Open, America 250, Oktoberfest, and other evergreen programming. And finally, in January, we made the difficult decision to close the Malibu farm location of Pier 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 tent building. Beyond the incoming entertainment and food and beverage opportunities, we intend to expand the previously announced Pier 17 event space from 17,500 square feet to more than 40,000 square feet across three floors with a focus on premium corporate, not-for-profit, convention, and social events. This will create one of the largest multifaceted event spaces in New York City, featuring iconic expansive views of the East River, Brooklyn Bridge, and Manhattan and Brooklyn skylines. All levels will be accessible via dedicated ground floor, elevator entrance, 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, an 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 caterers, creating a compelling weather contingency option that improves the rooftop's utilization for non-concert events, diversifying our revenue sources with incremental weekday and off-peak demand, leveraging our existing infrastructure and capabilities, which were on display during our campus-wide activations during the New York City Wine and Food Festival and Macy's 4th 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 five years. We will provide more information about the event space on our first quarter earnings call. At the rooftop at Pier 17, which was recently named by the 2026 Rolling Stone Audio Awards as the best outdoor music venue in the United States, our team is ramping up for the 2026 Seaport Concert Series, which begins May 2nd. 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 Patron 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 31st, The seaport neighborhood was approximately 90% leased or programmed, leaving roughly 47,000 square feet of vacancy. For 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 complimentary daily needs and amenity-oriented tenants and incremental food and beverage opportunities where we have existing restaurant infrastructure. Since we became a standalone 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 Street. 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 Enchant back to regular season baseball programming. During the fourth quarter, we internalized the day-to-day operations of Enchant to strengthen our customer engagement and introduce new audiences to the ballpark. This process resulted in some transitional costs, but overall better positions us for improved execution and profitability in 2026. In terms of early demand for the baseball season, group and season ticket sales are pacing ahead of last year, including strong momentum for big league weekend when the Athletics face the Angels on March 7th and 8th, followed by opening day for the Las Vegas Aviators on March 27th. Additionally, after last year's hiatus, the Las Vegas Ballpark will once again host the Savannah Bananas for three games starting April 30th, 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 could be a good long-term capital allocation decision. Both programs are tools for us as a public company that provide the ability to be opportunistic, but neither should be interpreted as an immediate plan to issue or repurchase securities. Finally, before I turn it over to Lena, I want to sincerely thank our team for their resilience, hard work, and compassion. Their support of the company and fellow 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 a year in 2025 and into 2026. With that, I'll now turn the call over to Lena.