Seaport Entertainment: Undervalued, Misunderstood Property Portfolio

Chris Waller of Plural Investing presented his investment thesis on Seaport Entertainment Group (US: SEG) at Best Ideas 2025.

Thesis summary:

Seaport Entertainment was spun out of Howard Hughes (US: HHH) in July 2024. The company is a complex group of loss-making properties primarily in Lower Manhattan that has dragged down HHH’s stock for years and was likely sold down by shareholders post-spin.

HHH invested $1.5 billion into these properties, and SEG recently traded for a market cap of just $340 million, with net cash on the balance sheet.

Many of the properties are just a ten-minute walk from Wall Street, overlook the Brooklyn Bridge, and will benefit from the new management’s background in entertainment and hospitality.

Chris believes the risk/reward is asymmetric, as two stabilized properties alone are worth most of the recent market cap. The upside is harder to estimate, but there should be significant recovery in the other properties. We could be at the beginning of an entire neighborhood of Lower Manhattan appreciating in value.

Chris estimates intrinsic value in three years that is double the recent share price. Insiders seem to agree. Pershing Square owned 38% pre-spin and Bill Ackman was Chairman of HHH for 13 years, including when the spinoff was announced. Pershing backstopped the post-spin rights offering and increased their stake by oversubscribing to the shares. Seaport’s new CEO and CFO have both moved their families to New York to take up their roles and are largely compensated in stock.

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About the instructor:

Chris Waller is the Founder and Portfolio Manager of Plural Investing, LLC. Plural Partners Fund was launched in 2020 with the belief that in-depth primary research can uncover ‘hidden gems’ in the small cap universe. The fund invests in 7-8 of these stocks over a 3-5 year time horizon. Some of our research is published in long form reports and available at the Hidden Gems Investing Substack. Prior to founding Plural, Chris worked in London at Goldman Sachs Asset Management. Chris joined in 2013 and worked as a member of the investment team for the Global and International Small Cap equity funds. He has an MBA from the Value Investing program at Columbia Business School and BA in Economics and Management from Oxford University. Chris lives in New York.