Seaport Entertainment Group (SEG) Q3 2026 earnings review
Seaport Entertainment narrows its losses, but tenant delays postpone profit
Seaport Entertainment Group, the owner of Manhattan's Seaport district and the Las Vegas Aviators baseball team, cut its losses by closing money-losing restaurants while its overall sales shrank. Third-quarter revenue dropped 27% from a year ago to $33 million, but the loss per share excluding one-offs narrowed from $0.57 to $0.23 on lower restaurant and head-office costs. Chief executive Matt Partridge noted a second straight quarter of positive property-level profit, even as the company spent $16 million building out tenant spaces.
| Revenue | $32.7M -27.4% from a year ago |
|---|---|
| Loss per share, excluding one-offs | -$0.23 -$0.57 a year ago |
| Segment Operating EBITDA | $0.36M -$2.85M a year ago |
| Pipeline Operating EBITDA outlook | Cut $3.1M now ~$23.3M per year |
⚖️ Verdict: 🔴 Bearish
The story got worse because property profits barely stayed above zero without last quarter's one-time lease exit fee from Nike, and key tenant openings slipped. In the peak summer quarter, the three operating divisions earned less than $0.4 million before $6 million of corporate overhead, while the Meow Wolf anchor and two restaurants were pushed back into 2027 and 2028. On the positive side, the Balloon Museum opened on time in August and the sale of an apartment building brought in $7 million.
The question now is whether signed leases will turn into rent fast enough to cover corporate overhead before construction spending drains the cash pile. Either the 39% of Seaport space under construction opens on the new schedule and lifts property profits above head-office costs, or further delays force the company to spend its cash cushion covering winter losses. First-quarter openings and fourth-quarter cash burn will show which path holds.
🐂 Bull Case
Shutting Money-Losing Venues Flipped Hospitality to Profit
Seaport Entertainment Group, the owner of lower Manhattan's Seaport district and the Las Vegas Aviators baseball team, is replacing restaurants it ran itself with rent-paying tenants. Chief executive Matt Partridge said the Balloon Museum, an interactive contemporary art exhibit in the former Tin Building food hall, "opened to a strong reception" in August and began paying rent on schedule.
- Hospitality revenue: $7.9 million, down 52.5% from a year ago after closing the Tin Building food hall and Malibu Farm
- Hospitality operating costs: $8.0 million, down 60.1% from a year ago, dropping 19.9 percentage points as a share of total revenue by our math
- Hospitality Operating EBITDA (segment profit before head-office costs, net of internal rent): $234 thousand, up from a $3.5 million loss a year ago
- Entertainment Operating EBITDA: $2.3 million, up 25.8% from a year ago after hosting the New York City Wine & Food Festival
Handing the Tin Building to a tenant cut sales in half, but it removed the restaurant operating losses that drained cash last year. What to watch: fourth-quarter rental revenue from the Tin Building, which will show the first full quarter of rent and ticket-share payments from the museum.
Lower Overhead and Asset Sales Cut Losses
Partridge has spent the past year shrinking corporate overhead and selling non-core buildings. In September, the real estate group sold 85 South Street, an eight-story apartment building at the Seaport, for $8.3 million, bringing in $7.2 million in cash after closing costs and recording a $1.7 million gain.
General and administrative expenses (head-office pay and corporate overhead) dropped from $17.9 million a year ago to $6.2 million, falling 20.8 percentage points as a share of revenue. Last year included $11.5 million of executive departure costs, but by our math underlying head-office spending still fell 6.2% to $6.0 million, helping cut the loss per share excluding one-offs by 60% to $0.23. What to watch: fourth-quarter head-office expenses, to see if quarterly overhead stays near $6 million.
🐻 Bear Case
Operating Profits Still Cannot Cover Head-Office Costs
"Despite weather-related headwinds in Las Vegas and New York City, we delivered positive operating EBITDA for the second consecutive quarter," Partridge said. Operating EBITDA is Seaport Entertainment Group's measure of profit from its properties and baseball team before corporate overhead, interest and taxes.
That milestone leaves out the cost of running the company. Across all three divisions, Operating EBITDA totaled $362 thousand in the third quarter, down from $4.5 million in the second quarter when Nike paid a one-time lease exit fee. Corporate general and administrative expenses were $6.2 million, so the business fell $5.8 million short of paying for its own head office by our math.
This matters because the third quarter is the peak summer season for outdoor concerts at Pier 17 and baseball in Las Vegas. If the properties cannot cover head-office costs in the busiest quarter of the year, the business will burn cash through the winter. What to watch: the gap between total Segment Operating EBITDA and corporate overhead in the fourth quarter, when outdoor concerts stop.
Key Tenant Openings Slipped Into Next Year
The company's turnaround rests on what Partridge called an "exciting pipeline that we expect will drive increased visitation to the Seaport and improve our long-term financial performance." Management estimates that signed leases and planned venues not yet in full results will add $23.3 million in yearly Operating EBITDA once they stabilize.
- Pipeline Operating EBITDA target: $23.3 million, down from $26.4 million in the second quarter and $32.3 million at year-end
- Willett's NYC and Flanker Kitchen + Sports Bar: pushed from late 2026 to the first half of 2027
- Meow Wolf (an 82,279-square-foot immersive art venue at Pier 17): pushed from late 2027 to the first quarter of 2028
Part of the pipeline drop comes from the Balloon Museum opening and moving into current results. But pushing three restaurant and entertainment openings into 2027 and 2028 delays the rent needed to cover corporate overhead. What to watch: whether Willett's NYC opens on time in the first quarter of 2027 without another schedule delay.
Construction Bills Drain Cash While Space Sits Empty
Seaport Entertainment Group reports that 90% of its Manhattan neighborhood is leased or programmed, up from 89% last quarter after signing pizzeria Brooklyn DOP. However, in-place occupancy — the share of space where tenants are actually open and operating — is only 51%, leaving a 39-percentage-point gap.
Getting those signed tenants open requires heavy landlord spending. The company put $15.7 million into capital investments this quarter (48% of revenue by our math) and $37.5 million over the first nine months, mainly to build out vacant space. Even after collecting $7.2 million from selling 85 South Street, total cash fell by $16.7 million in the quarter to $110.3 million. What to watch: quarterly capital spending in the fourth quarter against the roughly $43 million of remaining project commitments implied by our math.
Risks This Quarter Didn't Answer
Several standing risks from prior quarters cannot be measured from the third-quarter earnings release and supplemental presentation.
- Existing restaurant sales: management still does not publish same-store sales for its older restaurants or profit per square foot by building.
- Advance event bookings: deferred ticket and sponsorship balances live in the Form 10-Q footnotes, so the concert and sponsorship backlog after losing founding sponsor Chase is not readable yet.
- Winter losses and geographic concentration: the company still relies on two outdoor-heavy markets in New York and Las Vegas heading into the slow winter quarters.
👓 Other Themes
Weather Headwinds Hit Peak Summer Attendance
Partridge cited "weather-related headwinds in Las Vegas and New York City" during the third quarter. Because the company's biggest revenue drivers are outdoor summer concerts at The Rooftop at Pier 17 and minor-league baseball games in Las Vegas, poor weather helped pull third-quarter Entertainment revenue down 11.1% from a year ago to $19.7 million.
💲 Other KPIs
Rental revenue fell 23.9% from a year ago and dropped 39.4% from the second quarter. Last quarter included $3.7 million of one-time accelerated rent and exit fees from Nike leaving its Pier 17 office, so the third quarter shows the lower baseline before new tenants open.
Total cash, restricted cash and equivalents stood at $110.3 million against $38.1 million of debt, leaving $72.3 million of net cash. After paying off variable-rate debt in February, the only borrowing left is the Las Vegas Ballpark loan at a 4.9% fixed rate due in 2038.
Weighted average diluted shares rose 0.8% from a year ago on employee stock compensation. The real estate group has not used either its $50 million share buyback program or its $150 million stock-issuance registration.
🔮 Guidance
Cut. The company's estimate of future yearly property profit from signed leases and planned openings stepped down by $3.1 million from the second quarter. It is the third straight quarterly drop from $32.3 million at year-end, as the Balloon Museum opened into reported results and three upcoming openings shifted into 2027 and 2028.
❓ Key Questions
Why did the pipeline profit estimate drop by $3.1 million?
The projected Operating EBITDA pool fell from $26.4 million to $23.3 million. Management has not disclosed how much of that $3.1 million left the pipeline because the Balloon Museum opened versus how much came from changing its assumptions.
Why were three major tenant openings delayed into next year?
Willett's NYC, Flanker Kitchen and Meow Wolf all slipped by one to two quarters on the schedule. Investors need to know whether city permitting, landlord construction or tenant build-outs caused the delays.
How are the older Seaport restaurants performing on a like-for-like basis?
The company stopped publishing same-store food and beverage sales at the start of 2026. Without that figure, readers cannot tell if existing restaurants are holding steady or losing diners while new venues are built.
Did advance ticket and sponsorship bookings recover in the third quarter?
Customer contract deposits were down 43% from a year earlier in the second-quarter filing. Until the third-quarter Form 10-Q footnotes are reviewed, the size of the 2027 concert and sponsorship book remains unknown.