Seaport Entertainment Group Inc. (SEG) stock intrinsic value fair value estimate & owner earnings analysis

Seaport Entertainment Group owns and operates entertainment-led real estate in two places: the Seaport in Lower Manhattan (about 480,000 square feet, including The Rooftop at Pier 17 concert venue, the 54,000 square foot Tin Building and a cobblestone retail district, mostly under a long-term ground lease from the City of New York running to 2071 with extensions to 2120) and Las Vegas (the Las Vegas Aviators Triple-A baseball team, the Athletics affiliate, and the 10,000-seat Las Vegas Ballpark in Summerlin). It also holds a 25% stake in Jean-Georges Restaurants and a contractual right to form a venture holding 80% of the air rights above the Fashion Show mall in Las Vegas. What the numbers show. The business has never generated cash from operations. Cash used in operations was $29.6 million in 2022, $50.8 million in 2023, $52.7 million in 2024 and $49.7 million in 2025, on 2025 revenue of $130.4 million (2024: $110.2 million). We measure earnings the way an owner would: operating cash flow, less working-capital swings, less stock compensation (a real cost, $15.1 million in 2025 including leadership-transition costs), less the capital spending needed just to keep the properties running (development spending is treated as discretionary). On that basis the business consumed roughly $5 to $8 per share every year from 2022 to 2025 before paying its lenders, so there is no positive earnings level to build on. The window used runs 2022 to 2025 and the middle of that range is about a $6.76 per share loss; we did not adjust it for cash-rich or one-off years because none of the years is positive. The 2022 and 2023 per-share figures use the share count at separation from Howard Hughes Holdings, so they are less precise. What has changed. In February 2026 the company sold 250 Water Street for $143.0 million and repaid the $61.3 million loan against it. Also in February 2026 the Tin Building by Jean-Georges, a large source of losses since the company consolidated it on January 1, 2025, ceased operating, and the building was leased to Lux Entertainment for a Balloon Museum (five-year term, two five-year extensions). Lux does not have to start paying rent until the company finishes a substantial renovation, and the filing says that period could be longer than expected. In the first half of 2026, cash used in operations fell to $11.8 million from $21.2 million a year earlier. The company had $117.8 million of cash at June 30, 2026 and about $38 million of mortgage debt. Growth-path check: in 2025, the burn per share improved slightly (from about $6.99 to $6.52) but the total dollar burn rose from $63.6 million to $83.0 million. Our first-year figure assumes the burn falls to about $44 million (including stock compensation and normal upkeep spending), because the Tin Building closure and the first-half 2026 results already show it. What the company owes. The Las Vegas Ballpark mortgage was $39.1 million at year-end 2025 at a fixed 4.92% due December 15, 2038, cheaper than our 6% yardstick, and we value it at about $36 million. There is also $10.0 million of 14% preferred stock in a subsidiary that ranks ahead of the common shares and cannot be redeemed before July 11, 2029; with its above-market dividend we count it at about $12 million. Against about $118 million of cash, that leaves roughly $70 million, about $5.45 per share on 12.8 million shares, before the cost of continuing losses. Bear case, $0 per share. The losses continue at about $44 million a year for three years with no rent from the Tin Building (renovation delays and cost overruns are a disclosed risk). That would consume more than the $70 million of net cash; on straight arithmetic the shortfall is about $48 million, roughly $3.70 per share, which would have to be met by new funding or asset sales rather than being owed by the company, so we carry shareholders' value at zero. Debt maturities are not the issue here; the burn is. Base case, $0.61 per share. The losses continue at about $44 million a year for the first year and then for six more months before management's cost cutting and new rent take hold, the extent and timing of which we cannot verify. That costs about $62 million in today's money, leaving about $8 million of the $70 million of net cash, or about $0.61 per share. The business itself is worth less than nothing on this path, and the shares are essentially a claim on the cash pile. Bull case, $10.51 per share. The company's own levers work: the losses shrink to about $30 million in year one and $12 million in year two, reach break-even in year three, and then the Entertainment segment (about $2 million of profit in 2025) and the rent roll (contracted minimum rents of $8.4 million in 2026 and $85.2 million in total, with the Meow Wolf lease of about 74,000 square feet at Pier 17 signed in 2025 and the Tin Building lease) produce about $8 million a year for the 45 years to the 2071 ground lease expiry. That business is worth about $65 million, against $70 million of net cash, or about $10.51 per share. What we left out and why. We give no value to the Fashion Show air rights (a right to form a venture, not yet formed), the Jean-Georges stake, the $50 million share repurchase authorised in February 2026 (no purchases had been made by the filing date), or growth from filling the 35% of Seaport space that is leased or programmed but not yet occupied (90% leased or programmed versus 55% occupied at year-end 2025), because the rents on those leases are not disclosed. These are the main sources of upside if the company can turn the losses around. We could not reconcile how quickly the Tin Building will begin paying rent because the filings do not say. The margin-of-safety price of $0.50 per share sits below the base case to allow a wide margin of safety, since the shares depend on the burn falling.