RPAI - Earnings call transcript Q2 2020 | Retail Properties of America, Inc.

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Operator

Greetings and welcome to the Retail Properties of America Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to your host, Michael Gaiden, Vice President of Capital Markets and Investor Relations. you. Thank

begin. may You

Michael Gaiden

and XXXX the earnings operator, America Properties second quarter conference welcome you, Retail to of Thank call.

expects and those of additional such supplemental In statements words described that distributed factors statements addition that Actual on under a package our will expressions. from quarterly today's forward-looking www.rpai.com. Invest last and forth release and words federal our including, management's earnings filings. any by with factors set information variations evening, and beyond and to without our last anticipates, are we statements website answers and or may similar in in be to recent set most have posted section the materially the details on other use risks forward-looking call, such of as identified XX-Q press differ your affected questions our On results results at the those limitation, laws. Form the constitute in These night are prepared control, remarks may usually XX-K, SEC by include forth statements risk believes, securities issued a release of our in variety

today, As any otherwise. obligation represent estimates a information, August or events as new assume future statements management's reminder, a we X, whether to as forward-looking and forward-looking of XXXX, publicly statements no update result of

conference may non-GAAP we refer measures. this call, on certain Additionally, to financial

over website and earnings our On Chief financial financial will in release, our the With Executive will Operating Swinehart, reconciliation www.rpai.com. in call non-GAAP Chief and up directly Chief to of call, open we measures turn Shane a information of GAAP Grimes, Financial You today's Officer. call of speakers Invest these supplemental section available President are Garrison, Officer; package now President, our questions. that, to Julie Steve and I definitions measures the their find Steve After remarks, non-GAAP Treasurer; our the Grimes. be prepared to numbers at and Officer can the which Vice comparable Executive quarterly these will and your most

Steven Grimes

I Thank you, Mike, today. and joining us morning, good appreciate you everyone.

Our the effectively second reopen operating in the adjust environment. tenants and to once current team stepped quarter, up again helping

face visibility impact Our the quarter. is time, negotiations of positioning having all deliver forward already outlook our footprint, our on July cash add us May efforts continue we and for to XX, team this positives of appreciative helped this to to increases was our challenges June business, July, to to while in our in advanced COVID deeply and the of collections the progress. in the at team's unprecedented on team sequential from our I experienced acknowledging our which remain as XX.X% date. number strength showcase and capital to And of a asset daily our

our steadily one lowest a closed of COVID-XX to by have leverage improving of going liquidity collections, July million public in second robust rent in pace our that solidify bonds helped pandemic of holding the From perspective, terms in quarter positioning. and XX% capital attractive and open. the the issued We group driven due have peer we the further square footage the of already into reopening our $XXX our tenants positions the at now temporarily

in to continue walkability, offering belonging. last tenants, events reflect cash The and in given flows any our a from second of broader will have needs suburban will placemaking increased demand sector of sense. reflect a balanced of intermediate setting, social Although the the of the months materially relevance in community portfolio the for to urban several real largely community long-term flow density, mix quarter performance to cash estate the essential portfolio's a retail of amenities a

assets, tailored merchandising, demands green also on with mixed-use centers and on space residents. lifestyle same events poised centered and our mix. believe our footprint at interdependence to Here, broad continues stand offerings long-term poised multifamily when an office to mixed-use and to the local and retail-centric again asset these strategic sidewalks, the we thrive create are once outlook and is time favor cater These those right. We to demands

flow quarters. from will we our tenants' further deeper normalization the businesses. impact lease even near be that recovery tenants, building, gain However, key and drivers momentum a in us above the on a of U-shape the term, continue of further rent receipts amendments with our With cash helps advance COVID-XX reflected our recovery also profile operational of of more to an take step existing our capital is including tenants and the coming approximate hold understanding open-air from of to estate, will to Yet In seeking structure, our locations. as higher-quality effects COVID-related to migrate Julie inquiry much as interest real macroeconomic realize remains Shane the from we the as increased much well level, And impact detail. backdrop street the XX% we to rebalancing for retail seeking discuss, hard positives mall-based predict. optionality presence tenants on a broader current to to of continue will from break-even the as

our in swift successfully of the on of rate, elevated nearly market encouraged at mortgage and our consumer Informed drew respond plans consumer navigating April COVID-XX and areas during low We unemployment pandemic million rates XXXX and the positives took of $XXX XXXX to of to vertical the we in revolver we halted appropriate experience March. fully mindful construction May. March, Carillon by to bring confidence in the and since parts action for And have other downturn, sector. evidence April. While the strength by the many some seen stabilization should in housing

the factors our And compliance of report, capital, tax our COVID-XX by which of ESG on the half other corporate practices governance mechanism corporate of this governance REIT will Board we for enhancing to our successes and QX. our focused social is our repaid you The responsibility being dividend forthcoming helped of equity our with further remain microsite well year. savings, as business. Since our to G&A continue balance second to via evident in successfully our due of May, disclosure of temporarily budget We some of navigate continually We areas in other the need as in and evaluate revolver like pandemic. review requirements. And know, social dividend. our our holders mindful visibility June us publish and related to in sustainability reinforce categories to multiple strong operational presented our growing the have the suspended plan substantial across and our we sustainability, our which and on our to in to cost our continue as strength sheet importance current challenges lower of various We expense position aspects the amounts quarterly,

historical During to waste the quarter, we an water records. our allows implemented analyze energy, management team and energy system, which

holiday continue while validation a ensuring data Our our are are change benchmarking reporting, In ordinances Juneteenth following local that for adding tenants. observance. heard maintaining category, advocate paid we In experience a in safe and as by collection our continue standards. to sustainability tracks communities required support closing to reporting offices GRI social and voices company by and our social for all we guests the offices,

our even stronger. emerge once end. the before and we and in I around a I our as operating actions our More prudence know over assets, pandemic will communities. for Additionally, but holiday take the experienced broadly, our recover continue to company With taken African-American of the effects that in and not in from results of solace for made And match donations we the we do balance support three come do detail XXXc I ahead only has and to showcase team the here, tough that will investment-grade call for charitable believe the our that strength sheet quarter, pragmatism you will XXX the that, experience, out turn seen I implemented same further we again. curated to organizations the sledding Julie. ensuring

Julie Swinehart

and Steve. will This our our disclosure, you, review and our results, financial positioning. progress structure capital our I incremental second morning, rent COVID-XX-related quarter Thank collection year-to-date

quarter, second generated $X.XX of we $X.XX down year-over-year. operating share FFO diluted sequentially and the During per $X.XX,

June increases of focused many during also compared increased delivered to as FFO, an second by lower starting our lease occupancy quarter; $XX.X expenses, $X.XX our $XX.X second XX, the we that quarter generated eroding hold up on or came we recoverable million declined NOI share XX.X% interrelated And NOI second, XX% rent increasing from I'm per be which tenants. topics offset topic below continued million, NOI also items the rents additional collections, amounts our expenses I'm items. XX, represent in decline XX, of collection we in $X.X from in soon-to-be-filed on drove inclusive increased the for quarter decline. explained also share, previously which review contain particularly same-store Same-store realized or that COVID-XX-related $X.X encouraged on This drawn and basis are fully to which given in decline, the or diluted XXX topics: July. status savings would accounts package, in XX, recognized contractual rent CapEx. XXXX, income to supplemental same-store and disclosures per XX.X% year-to-date our which year-to-date our and half rent QX measured and million of lease COVID-XX-related which XXX I by pattern quarter, to levels. first, revolver rent basis our our collected $X.X operating with XX% a tenants' the that by have of and QX and positive rents in maintenance impact second XX, detail As impact our against flow and Year-to-date the approximate FFO operating accounting and expansion diluted allowance FFO We press our three of through effectively million below interest expense, combined billings our again highlight we to to collecting in on despite or cash quarter sequentially by quarterly year-over-year second from of we XXXX. QX expense which composed March is you we $X.XX as reopening this implications receipts lease to income interest XXX is quarter, the May, basis operating information $X.XX million NOI correlation the against breakeven increases. package, this expense tenants Further, base our points straight-line $XX.X open income reduced for driven million in July second increasing on statistic and in exceeding high operating I position diluted explaining our and want concepts June while third, information payment cash-basis The items the from by first second quarterly like level, can the negative XX.X% we encourage billed pages with higher share, related operating and points Like G&A income. Form million, measures moved detailed June our of cash and I reported which tenants in growth. point also was of COVID-XX-related cash supplemental prominent accelerating and position adjustments reduced nearly in $X.X cash of year-ago progress happy and report the potential FFO XX-Q as uncollected our we release million; as fell we of receivables outlook. per main $X.XX we $XX.X of our emphasize sustained lease quarter in in reporting, allowance XX an basis by we between our related of receivable primarily QX from several among in

X.X%. And reached in As we applied in rent security have representing quarterly agreement existing in signed instances, we adding level XX%, deposits principle detailed for up to our collection another with we addressed. QX tenant or amendments bringing an have of tenants XX, lease either us XX.X%, to certain the XX.X% supplemental page certain additional on

arrangements, context minutes. these few some will workout deferrals tenant these a we which just revenue additional Shane in of terms during the and involved for majority recorded quarter, on provide the deferrals In

trajectory that our decision and our June, repaid many the $XXX tenant during normalization available parts Turning to of ended of amount the our substantial even of reopening than markets in rate second after quarter for on and liquidity revolving our of line total $XXX revolving of line amounts liquidity quarter. Recall remains the of in disclosed, on million upward as on approximately that hand nearly we higher the QX observing collection full a nearly hand. in on credit second cash for available With collections, line of unsecured unsecured our financial more million we levels our credit with We in $XX with ended cash the cash ongoing the And base revolving QX $XXX unsecured credit and we position. cash drawn capital $XXX made in profile threshold million previously of million our check. excess XX% our million. July of and XX.X%, with break-even at on well the

net covenant I as requirements, paydown substantial also trailing continue in times also credit demonstrated or time to the would improve, X% the result four leverage-based issuing for anticipated majority by to a our months we to balance This our dividend the fund to outstanding in market term also position debt quarter debts. have In the times in quarter leverage-neutral improvements points debt on bank from we our our unsecured of our expect to credit the a sheet collection second good existing today. debt breakeven, to repayment in brought reengaged on This ending this portion sustain debt-to-adjusted-EBITDAre. with collection revolving the levels be and consistent coverage full XX million already levels tenant million highlight for line us forma to bond of should above we activity under senior like grids July quarter, basis. and XX brings exhibited unsecured trying $XXX for strengthened our able service capital remain enjoy years, headroom our to us a we interest pricing XXXX. second investment of move, undertook public And of our we improved years, the ratio. metrics development and in the health June. wide for that our our notes healthy of back suspension continued win-win related as the The lowest With five our further incremental the when series. due position $XXX in We our million level for land investors. bond and note proceeds this bank principal an of existing We of expense saving issuance revolver, offering first liquidity added both basis related for a this public pro our our to $XXX net us X.X

benefited which our bond For longest us, term well additional similarly-sized peers the for believe term the liquidity as five the near from this our issuance, XXXX, is year-to-date among year I balance we sheet. of as obtained

of and For certainly are of increased the a public potential tighter benefit. above our increasing related investors, again, and pricing the size for notes bond liquidity $XXX notes the million, the now by the issuance is index-eligible

in door are that both our effort, the that XXXX, it reopened to the not exploring volume is to opportunities levels. early note of trading from will demonstrated public look now funding by back we early in July deep the And and forward activity We as arise key the additional price series broad I since reopening since issued I that and to encouraged terms XXXX be in bonds have say in We had source. may good this market. results this and this

operational strategic current now take long-term our our us and overwhelmingly to will that leverage fluidity liquidity, Steve and will given Shane. to best that in confidence operating the make Shane debt and of mentioned I the I suit modest decisions position abundant goals. detail, environment, call enable And unsecured turn As the as further knowing over

Shane Garrison

Julie. you, Thank

current Our performance both resilience the operating and second reflects quarter the of the platform. of environment our challenges

same-store quality both XX.X%, of retail drove detailed, XX.X%, and gain percentage year-over-year lower, year-to-date to basis same-store Julie on portfolio impacts ongoing our to leased merchandising and team of a reflecting COVID-XX basis occupancy the efforts, underscoring by work As point forward Same-store our materially deliveries. XX QX year-over-year XXX although in delivered our in hard and our NOI XXXX increased focus we retail XXXX. points

our to expirations. remaining Turning

As our And down ABR XX.X% enabling XXXX. XXXX our half near-term of of we focus a just other the ABR X.X% expiring, expiring from reminder, just year, back we entered priorities. on in X.X% the with hold us to over efforts of our

comparable expiring feet of quarter, in set opportunity square smaller the of signed leases XX,XXX up quarter the from Given we XX% first new levels. leases,

this to group execution liquidation of merchandising spread square mix. limited our a anchor credit foot blended upgrading of was Our XX,XXX the of by XX.X% a new driven quality of bankruptcy retailer, leases nonessential on negative backfill and essential

have and quarter, renewals, QX's matching and X.X%. this systematic to total approach our XXX,XXX market. volume blended continue currently awareness a with spread. a we blending comparable square stability up square to QX's for executed largely leasing up we situational In compressed for and completed from feet, downtime volatile X.X% QX, spread merchandising, in of feet renewal at We from a leases the In XX total new comp, with X.X% XXX,XXX of QX's also XX%

increases results last leases of of Importantly, few in signed contractual quarters. with these our the new XXX basis average we with line rent points,

next its elongation continue expect we pipeline. in leasing our disruption forward, volatility Looking given the on macroeconomic to several our the current effects elevated metrics lease quarters for and

reopen XX% commencement previously quality continue to dual demonstrate maintain May of to approximately to we July XX% the adapt tenants and experienced leverage with expectation retention XXXX strength our ability base, of With our our and long-term footage achieve significant Also, XX, we of XX% not our reported any to ability short- XX, support of as our acclimate continue to our present the have platform up to to as of activity to or of changes tenants' rent and date. square focus tenant operating beneficial the to for outcomes of However, asset from and our and demonstrate renewal mutually efforts successfully. and open our delivery collaborate we environment.

While working lease address can to operate requests working amendments. that effectively, on ensure also are our we to and tenant for tenants focused safely

pragmatically negotiating quantity, not We are basis, viewing tenant-by-tenant a exercise a this quality, on bias. with a

where certain Our practices goals current the to adopt flexibility runway to removal secure of progress operational our to with our cash near-term and, needed our for to reflects in collections, provide the increase tenants restrictions succeed a date lease long-term short-term environment. appropriate, the

in that confirms the few experience time Our some in in but the increased total for months last will be the our position while approach the take results of as of long the XX. July of providing broad-scale rent short term. The this will can diligent seen stability our addressed term effort portfolio XX%

rents have good-faith of modest security also in not fall push while gym of more of agreements These deferrals We percentage business who a outstanding dramatic XX% have payback in represent for in periods saw in payments roll XXXX, signed combined categories our we with deposit hit our hardest of their to with continuing and rents rent to to of progress impact movie tenants than a QX. and theater X/X the remaining remaining an addressing accrued many for addressed received amounts or the of in receivables. mix application come quarter. And we cash weekly to agreement in principle continue that XX% or make

not and agreements these cash third receipts. of deferrals, Our abatements, date some tended will have deferral from deals our distract to quarter toward

cognizant tangible manner, status portfolio. with and the mandate governmental we by in due fitness typically progress between the on the of amusement X% tenants. we effective of of quarter, remaining safe relate much in ahead a over theater, rent ability, or footage our are which and closed our to local any to remains square However, reopening focusing much time, second I'm and seeing payment the open regional collection same and encouraged our are of relationship the certain At July month of levels

operating the fluid of categories, use are the and talented mindful in tenant still we health our faced teams public continue footprint high-quality shine. certain and to challenges While backdrop

the pace to just accelerated retail bankruptcies retail filings bankruptcy the few in last has seen COVID-XX XX. we of have While move-outs due seven through months, July

Downtown despite during benefit of one La open-air Tuesday Street GNC not those storefronts. mall-based rejecting vacant portfolio we COVID-XX example, face two date. in and Morning, inquiry been Northbrook, in many from Further, reorganization. rejected we sits Oak have we existing our And at to our the to upgrade held and Barrington. XX long or has leases rejected leases, operators has tenants now locations each but Naperville, leases rejected term been for reverse Main Sur [indiscernible] none And our suburban lease, rationalization, obsolete pandemic, with while only in through believe Table of still including headwinds which retail tenants For of historically locations one increased and looking will growing from Brook nearby pending from growing Promenade

Turning to development.

office Our assets expansion and and role At full best strategic projects include on units Loudoun, Pad our H, continue Pad on to frame and in frame construction construction serve bringing to G wood work to completing our additional a continue roll on rent commencing footage. our potential to we G progress Pads advance diversifying H. and multifamily square vital their

to we accelerating in that time. revenue the COVID-XX paused at pandemic diversification announced component of merits growth many Endecott. technology the early XX.X% Circle East, the project this of of retail resumed and the region. Pad our sources convinced advanced We further the our G, advanced renegotiations in impact marketing in-line tenants opportunities office typifies lease suburban/urban of and investment population branding newly influx of expansion through and across in the rates the March XX.X% the given ongoing portfolio. remain also named our have multifamily-centered existing This for of expansion of the office were One of due the We the with efforts in now and At

activity the buildout of increase, approximately square buildout have fully momentum The continues finish to the in of leases this of feet and with we We also space lease. we deal in at Shack to we XXXX leased in currently at into QX. quarters, plan the the XX,XXX in Allen initiated convert next volatile or And during can begin building pipeline this and will Shake leases the LOI Ethan executed two quarter assuming XX% environment. new approximately

our date While returns the suburban project the pushed despite for and for which cost this has are continued anticipated projected quarters, incremental of implied stabilization the relative holding redevelopment been several center reinforces back strength to urban the this tenants. prospective our carry, enthusiasm of

the two pre-leased the COVID-XX Our projects, development remain growing In redevelopment Quarterfield and budget. pad continue in experience best and summary, remain as smaller-scale of continue turn at impact less on headroom to retail we quarters in Southlake the back XXX% to over are positioned both portfolios. we over that, the estate on and showcase real an will the stand Steve. platforms on amount coming estate, well-positioned and drive the to of progress to call to well With as increasing real high-quality I fundamental plan

Steven Grimes

amid evolving I updates. those given you have for complexities of quarter's this Julie, questions many reporting the and Shane environment. imagine this you, Thank

let's get up open just Thank for Operator, Q&A. please So the you. lines right to it.

Operator

from McElroy Citigroup. your Instructions] state Our Please question comes with first [Operator question. Christy

Christy McElroy

comparable what other to did you are for. lay of in Julie, are billed not the $XX.X the amount Thanks. some which that and companies differences is recoveries pieces the you. in cash-basis supp, uncollected in if out account the the know of question I that and for Good rent is reserving those morning guys. I the quarter, how you about But million, think rent. some companies that's there for first the recognize

would for know looking back rate the we amount reserve be be piece total to we're recoveries? missing the at total how the about had in that thinking amounts you page should collection uncollected, so to guess that rent. it relative we that But the uncollected And on the can that so on the helpful recovery provided XX that I into disclosure piece. for which

Julie Swinehart

Sure, thanks laid few as concepts of the acknowledging we've how Christine. a in for supp. there And out aggregation the

then that have got debt to that aggregate been recoveries have related $XX.X accounting. amounts tenant moved which $X.X primarily and rent, million million, the You're we of tenants bad for and is right. basis not We've to component, to base also across cash collected that the we amounts really the

So the for the you're million. excluding components. kind of but NOI right, piece is impact $XX.X the straight-line for lease I'm all-in NOI income

You're just seen what the right, have to but they've been a side. we below on not on maybe pertaining rent recoveries, collection disclosed touch levels par, we've

maybe So QX, XX% sorry, XX%, XX% range. definitely the in for I'm XX%,

So if get our rent million more round, the which apply it broadly, $XX over recoveries, XX.X%, QX $XX is collection I million, I were area $XXX million, I'll million, call million. to in rent of the then levels which call so to the base, generally the just $XX $XX

I compare $XX aggregate million would the of to kind adjustments, $XX.X and million, debt that base you mentioned, So rent I million, numerator little $XX that bad of get a over half.

in amounts been by those collected covered are yet that that the quarter So a reserves. have billed were the over half of not little

Christy McElroy

Shane, that the next NOI Circle just your for over Okay, talk we be driving on great. years what's pushing date asset? to thinking just out delay? East this about then XXXX, follow-up on And about commencement then, you can and stabilization just comments the And the how two should to

Shane Garrison

is to further I point. driven this virus We driving and just at elongation move think it largely it what's was felt delays, it prudent out.

I possibly XX% 'XX, my obviously, out or up in at remarks picked at to moving getting can six beat again I quarter, think this talked talked of We or we certainly dictated about really prudence but year-end. certainly has point. last Velocity prepared end the about weeks this so. the it specifically,

that's think realistic I a expectation.

standpoint from several now. mall a up working now that, call leasing have in through right tenants We foot lined it, we're XX,XXX population square

take point. time, just that to it's real, and reverse So going inquiry at traffic but is this unsurprisingly,

of As majority this expect it at XX% for year, end then as would the probably XXXX to an through I and maybe far up it NOI 'XX. XX% of in the cadence, of

Christy McElroy

or wondering, back early leased XXXX expect the in sort by And half cadence? we're move-in should of the the just move-in or sort the percentage of guess of I of in that's 'XX? we bulk

Shane Garrison

the move-ins expect would weighted. I of would majority Yes. 'XX be

Christy McElroy

you. Okay, thank

Operator

KeyBanc with Thomas Capital Markets. Todd question. state from comes your question next Our Please

Todd Thomas

Yes, morning. good hi,

the the the mid-July just issuance. straight-line in in wondering specific First rent $XX last question $XX weeks. that alongside range And I the the that came can few drove million anything that that X-K $XX expected the on million, the on the to including million if you was relative I over below disclosed was to guess, notes the reserve, change just lower comment reserve, range

Julie Swinehart

thanks the Well, question, for Todd.

we bond offering. right, an ahead of put X-K our did You're out public

You're right about mid-July.

the we time. we a that just think range I comfortable at with felt put out

make after I And that you the think and we all quarter lines interaction had sure taking that to collection you I had account that in we collaboration across the And on of came vetting. in the we of within course, little a of shortage fronts. cash can of all benefit a July. range have information throw bit all stone's were assure no of of business additional of into

our saw night. collection time release time, July in reported we put in some out we at the published I levels by you last that again X. that June We press think those the improved and

in as saw we've in trends positive July terms it we which related of time every seen collections definitely QX, So to published.

times published at numbers this we I point. April four think

levels sort lot just into of collection benefit a the lot us the with any I again, a and below there entire So judgment peers tell had and hindsight bit with certainly of normal, process. of would for that little And far concept. involved a went was of more you

Todd Thomas

can lease million rate on in income and basis have you what the share tenants today $X.X in July? the quarter from that the how trended that's you tenants, And Okay. was cash a cash-based second of collection for lower

Julie Swinehart

Sure.

cash to right population, them I and move that basis. in line collections below the goes our think them we were And for So average. certainly how with that evaluate

we improvement we've So in just I some seen just of shy collections there. June. were XX% think, And

rent additional June for see we as population I did There's detail, during collected meaning XX% we high some situations element think of not of cash-basis tenants some on footnotes as can XXXX, as July supplemental, there the to that. you concept were on was can XXXX from you a I in and and we XXXX, the the were double-count in to can related XX. tables, there's of of July in you glean that where especially that adjustment read that for collect lot this XX, that that by careful mentioned, as

So and beyond we anything basis, is cash as certainly upside. you collect know, with

when in forward. paid going come that'll So it's

Todd Thomas

the the to out new, $XXX Okay. comments, month, and your issued notes Julie, take the January the on prefund on based should can comment availability decision to might that capacity the notes? you of January that assume then just to notes another And reopen versus and And issue that to a then, of repayment you last $XXX on million you the look issuance offering the million XXXX, line? keep we of longer-term

Julie Swinehart

the that. Sure, mentioned, of to very Todd, I public tap be move the us. as happy I much answer The $XXX million can in XXXX we're really like bond right market. to back the felt

with relationships effort in on we background the year marketing that a same had engaged early been in reestablish deal. investors. Just met some the folks to for little July, fixed-income of In market in we We've time. the exercise with with quite It's them. in that an a some not previously

so attractive. that from investors. on did of some asking And were certain The was They XXXX. reverse we about pricing marketing, based specific inquiries get the some to

So of market having it felt the out like, an been point, appropriate after step for first to years. five your

again, liquidity that of then. some that now seen eligible. since we've trades nice it these index makes XXXX happy So It's so And series to adding bonds.

public those now we're the financing bond a maturities. market still are evaluating out we're that new So to issuance is that XXXX there certainly stand-alone back. our all options But one in repay alternatives of

us So could for in the I'm with forward. mean it July and really execution going pleased what

Todd Thomas

got right, it. All

for last a Shane. Just question

that You much guess experienced filed and others But are that sort fallout in from the have a across GNC few of XXXX process limited to reorganizing? I closures bankruptcy. of you've in and the you've some the and so that how of in portfolio the ABR far bankruptcy you of experienced tenants do mentioned some exposure have

Shane Garrison

basis Ascena call with in it, Todd, points filing and So over a right XXX we're the now Tailored active. little recent of past the at week,

we think one week. had were this I that affirmed two locations or

I which population, one. smaller is GNC, up of Ascena, and that's is XX% liquidation, which piece look obviously Pier and again, a a have at we fluid. it rejected So a little X, if But is made Tailored, that by

bankruptcy or take. current to basis And than XX% exposure reject points, about our So of XXX had date, we've leases. give less

Todd Thomas

Thank great. you. Okay,

Operator

Please question next question. Our comes Johnston from Deutsche state your with Bank. Derek

Derek Johnston

and Well, tenants, you're at put pushback potentially definitely out? understand prospective virus I the the at Yes. shaking risk as discussion you. frankly, given on underwriting Circle here? Thank everybody. in pandemic, especially East. with yields and, demand timing the Hi, Shane, development is the Circle Has speaking East, effective how pre-pandemic net rent

Shane Garrison

want or to in in the market corridor, tell velocity we tangible at have want or will, tenancy; question. now, have be an to right not leasing anymore the really market the tenants great a to that sales have, synergy and a traction you the that's sourced in least enclosed familiar I It's you that just adjacent asset. proven with upgrade have either that the is are do in with unique environment if from we would

that but forward You've of been awareness if dynamic It's it. and suburban/urban also will. three about We've convenience but experience think you for there. is blocks, provides talked brand certainly kind fulfillment, micro also also anchored has we certainly thinking but and entertainment that

it those So looking to lot upgrade point, see on we limited basis. is now tenants your velocity for really I long-term think and/or to reason. But checks to of location a the configuration move a boxes

Derek Johnston

and in at rates Okay. have Texas curious, No, guys you exposure spiking? some just been I Also, have viral understood. what decent are certainly you seeing centers where your Florida. Maybe

those you And states? in the so cases share in anything increase could given

Shane Garrison

mid-XXs all It's of despite for as operators. us the we a frustrating, are, open. don't bit I Yes. been think, headlines, know, I Texas,

rent. about paying That's by box. national but is hasn't retailer just I just San a one literally is XX%. Antonio That's driven still that opened think

a headlines. Texas and been contrast has to unique So the as

think, renewal renewal our would retention QX. really comped than and XXX,XXX a point right you about I I comp, now to obviously did rates best running We're X.X% we Derek, our just We indicative. on feet. in up higher the as

But So as tenants in seen going many just We've large least We're standpoint. with very from rejection how decent this a on as collection of on The year. any north portfolio far seen little XX% diminution really any and issues still conjunction track is population, haven't retention. run to it that, indicative at there. a was are bankruptcy. open we there,

seen So impact the been we've have only or on activity handful. the

entire closed, I know, point. And got, of this in a portfolio. don't in is national those six at the or addition tenants I to obviously are five think bars phenomenon kind we've the which theaters,

has actually mid Texas there, XXs XXs. well. We're held So Arizona held open to up well. extremely high up high has

really know, exposure any don't you Florida. we As in have

we center multi-tenant there, and one have have two centers in We California. left

But the far go, as was almost the So right, flare-up. to continues you're as well. up the at data Texas rent XX% flare-ups the at for hold current exposure, so far, of biggest our least

Derek Johnston

And everyone. you, that's all Thank me. from

Shane Garrison

Thank you.

Operator

comes Boenning Please Dijkum Van your question from with next question. Scattergood. state Our Floris &

Floris Van Dijkum

about wanted located. at reserves, where actually but Compass Point, I'm they're I ask the to you guys

I higher think you're Am be national that your rates to think or your at the I reserves tenants? towards collection small-shop weighted to were tenants your anchor much right than are appear your anchors. on your heavily

Julie Swinehart

the a in also to our reserve. do. the reserves always it's a to element in that Thanks there's And we disclosure, and of reserves, for do Floris. expanded There's specific an of vein of as certainly within there a a some lot wanted But certainly digest. out put pieces general lot and the question, transparency, of we element

months And some a one again, tenants there's size in I'm deal, there's too sizes. if say then even nuanced wouldn't strict reserve. general just rules. supplemental. I two abate cash-basis also page call, the bad the and allow component any on So abatement, get month, of different it's that deferral short, guess, accounting, and is, with a long what one unfortunately, any deal we just debt are There's if not I I'll recognize saying to there's highlight, down accounting reserve, other like to little want does kind you that hedge, some not defer I of to the of of story tenant. element, deferrals bit that don't but and abatement maybe to the fairway. But the XX in footnoted That a element it's you of which have are the

modification. that Again, element an bad there's to that lease but that's we've deferral, narrow disclosed the in might involve of that's signed component. straight anything specific So, and deals debt that and

So of it because June can't signed apply XX, wasn't the as accounting. you

took we in quarter, it's to so the that And NOI knowing the signed July. in impact

well there. together said, So happy hopefully, some always there's all lot like and hangs gives pieces. there's you out but fits, a Again, as It that I to I'm there. offline

Floris Van Dijkum

do obviously, where time us part the position going based you or if in for see part the have suspended help yourself being. improving the fourth earnings know, quarter you the think pay of cash on collections, of to But a might dividend or you about rent as the something like can I And maybe dividend forward. that? reinstate

Steven Grimes

Steve. is This

true. All of the above is

talk we obviously is this decision. Board a As the with Board-level

of take of distribution in We understand we also and will the year perspective. the part take tax in the deal be with from them look facing that talking have All keep that said, perspective a QX September specifically and of to being to preservation might then be it need first what to for essentially liquidity in to angle like from then may terms payout required what early would more look from with Certainly, required for like we really dividend dividend at QX a into and the balance the balance that of any year, sort XXXX. we of further consideration we any XXXX.

for September will XXXX. we possible be may into pullback needs while could year, that or talking about So a it it QX be QX the in it's could what be the be

the that will that on discussed have next and so. clarity month the or within So quarter, you'll coming all be in

Floris Van Dijkum

Thank you.

Steven Grimes

Thanks, Dick.

Operator

state Street Vince Advisors. Next Green question comes question. Please your from Tibone with

Vince Tibone

tenants deals? reported many financials? converting you through is short-term, Are rent-only morning. And good that flowing percentage to how so, your if Hi,

Shane Garrison

a take deal Vince. I'll aspect amount, the don't significant have the accounting. and to We Julie ask finish

one-off thin accounting credit, you any XXXX. of are beginning short-term extent some has rent we locations, Julie, deal-making in been unsurprisingly, fixed typically, that, that go percentage relatively to back to restaurants then have? of would Then where structure lieu. that to form think we revert I have some the of And would be the our of larger the at really

Julie Swinehart

kind treated the are deals percentage rent what deferrals. think mean I'm than down-the-fairway I differently I Yes. of calling

again you choose think the one fact actually really which straight that have, again, including the it's well deferrals, leave down-the-fairway that, of impact. So component peers basically there's down-the-fairway But same we three many record as as choices FASB for straight-line I the you the pattern. alone, deferrals, no if offered the where of revenue,

have longer-term receivable. accounts You a

would combo a take rent percentage abatement I what like Something to as similar of you if and deferral will, tracks, deal. described off like the previously you kind

been would So practice we the instead there NOI have in that of the recognizing in are rent not quarter. percentage the of

Vince Tibone

the a receiving is to almost in percentage deals like rent it or only for like you're rent? basis fair from it's the percentage you're say way? Or recognizing actually that a actually the you're it's revenue of that basically, lot cash So cash receiving the

Julie Swinehart

Correct.

Vince Tibone

your picture, more On just side of the the how then, do sense them And tenants trending like pandemic? today on to restaurant bigger this maybe are restaurants. other the to And you any before crisis? your you Okay. full-service just given are supporting of also relative how have one sales get try to COVID-related to tenants, restrictions restaurant

Shane Garrison

quality in get right? foot, maintained out addition I'm addition actually nice certain the large-format to above of third-party reduced a restaurants blend that's reduced just example are They menu from I have G&A that and to we curbside, have a better, X,XXX figured and etc. sales Yes. in delivery also partnering have to think but best of another that talking And square Look, pre-COVID. XX,XXX

whether of we So menu that certainly product. issue issue that other then kind you the continued And a spectrum a just status tried probably we the or G&A it's the and if maintain have struggle a have bucket. quo, of has will, or commodity at bucket to to end has

outcomes So of Vince. there's in here process, a myriad

interact how they're listen. lot is understand But and to think know, to strive we from in the that can and our the the help extent a shortcomings willing you are to what up, of we doing what is and as to perspective flush possible I tenant that that negotiations.

about with right? I more that fight is go that into or either think of an any joint think and modification think guarantor our when we a credit value we for And relates to a significant several we you think this some as of parts as that that it collectability XX% really consideration interesting have of lease a we of to continue form you parent is current portfolio a credit a think enhancement, on or when or corporate our relative one-off guarantors, downstroke to forward through one through almost well So just that and lease performance. when or specifically forward I SPE the restaurants. some take And going enhancement either about leases it's as about certainly issues. but collectability SPE as will provide the guarantee

Vince Tibone

helpful Thank That's color. you.

Operator

state Our with next comes Capital Chris your question Lucas Please One from question. Securities.

Chris Lucas

Hey, good morning of everybody. Julie, a couple for questions you.

much in that quarter, As it in relates quarter that to cash-basis the from the tenants? second was third of due was how rent maybe

Julie Swinehart

QX QX the of sorry, for in rent that or we so collected much far cash-basis was tenants? How

Chris Lucas

quarter. Third

in So stuff that'll be was was in in third tenants second applied from but quarter that the cash-basis due pay quarter? got late came that

Julie Swinehart

It of of our $XXX,XXX on was supplemental B, XX. in July small. It's as XX the page fairly Footnote

Chris Lucas

terms amended place, I you your an where does haven't stand? then, no the in And you really great. in you the do and Shane, where what have deferrals for leases no collected of option pursuing there? Okay, situations in rent, when guess, become on litigation those And remedies

Shane Garrison

Chris. right, All

to look, we're think, down I XX%, XX%.

no points, bankruptcies isn't there's that as or be give the current want XX%, the at X% deal correlation or deal far between XX%. high XX% take, it's a I out and And open. XX% you clear, back as say and not let's If to basis XXX outstanding

open, look in you whatever X% that X/X, XX% represents more in deferred isn't of we than tenants, the are gym it footage worked have and workout where square XX%, the half at If group, that that's out is, fitness general.

remaining. strip on to that just XX% away want and So I focus minute XX% the XX% a or for

been much we've about So, quality priority exercise, we in has -- as talked a this before. very

really April internally. we In May, the understood We we event, we negotiating take, were this we of just until So up we picked to interested how for. started really and had two-pronged that in some long twofold negotiating what going and really a this in around weren't clear deep initiative very cadence, kind visibility until was we were ran we this virus effort.

So to strategic to the and value focused we there we we case from initiatives other asset densification managers tenants agree standpoint to extent wanted. outlet regard [ph] exclusives, modification XX in top co-tenancy on this to certainly restrictions, significant a lease and in prohibit leasing the was wanted were longer-term one wherein

top they wanted and time to lease-by-lease XX. focused understand So the what we took

traded that items one and lease done, population All more ended up generally deferral, of is with XX about talked form XX% modification, of top or some but we with of and of for I about. our the

that bottom that bottom has through. XX, our you a way we continue to our been will, to the if XX XX%, process Turning work tenants-a-week XX, just

this to Most XX generally, have any You in replace And haven't And because do a application, perspective, the for on liquidity months times to another at a from was saw back four XX%, faith you ticking XX%, again, point. that really and at right? we looking some lot didn't Chris, paid. that which if balance; our XX account But of very a least were liquidity early by the really of of those lacked a it deposit it's our see tenants deferral enabled point, outstanding. it up. mentally, let's week again, really, to tenants looked will, And so I out think I going There's that, XX XX your their off them, they and they a forward. really a to of open they deposit tenants, remaining, just those we're successful would I form regard. security helped a at branch, say, of lot. think we It's or think back that And name, on. security kind of

coming are all and of to outstanding our being the XXXX. deferrals paid We in XX% deferred. generally are XX% paid balance average And the of back

current I in would obviously the on based environment, huge the right that's we flare-up continued assume And So cadence any that, that's now. multiple MSAs. barring

to have wrapped certainly collections, more we of occupancy, cadence by up kind or that on this rate expect and around continue that to would year-end. expect clarity I would have run So

Steven Grimes

is Steve. this Chris,

a little add there. to Just bit

You just does mentioned litigation. when reach this about

lease. Just it's to the for or obvious of the the obvious, letter state we're following

long-term not that we've is on and is decisions pointed So more stance of fronts as been perspective. best. sort mentioned we're going from essentially of all that through in any had But sure required out, making implications. executing monetary this through, And making our default have my and for opening if feel we XXXX before become remarks, litigation, I landlord preparation exercise and value rights certainly may this as Shane what patience short-term in do is we're prudence in a XXXX,

through Shane been to little not we've the the necessarily later understand peers getting it's a probably signed. terms things behind we to, get As alluded in best right a in full in the game, than put and before to what timing, away these I of essentially April, bit we able with that's for local And ultimately these finite the prudent feel execution. and local that very we negotiate little us to backdrop let that But fact have the people we why importantly, the negotiations on is ground this alone presence us, more and, business managing get think, our XXX local assets knowledge on pulse the pandemic. into have especially

Chris Lucas

of can us deferral What that deferral you question Julie, just as weighted Or when average schedule repayment of half back? from terms whether it sense to the it's me. what paid in on about give prepay Last should we duration? think agreements, what some we Okay. like? think the should of looks

Julie Swinehart

can deferrals some very of assure start weighted some to. the XX-Q quarter-end. Sure, to And we've on But term Form months containing the six near we from the I basis, got you average the disclosure that in this happy a in disclosure. file expect specific

call XX So, beginning of XXXX. average repayments. it, And is about months weighted believe the of I

by be end we in, repaid to all So expect of the XXXX. them

Chris Lucas

That's had. all I You. Thank

Julie Swinehart

you. Thank

Operator

Our next state Linda Tsai Jefferies. from with your question. Please question comes

Linda Tsai

taking for my Thanks question.

that In are interest, tenants formats retail showing what are terms they? of mall the

Shane Garrison

beauty, still call soft about I would health We a it, boutique restaurants, leisure, and format. digitally that native. goods, smaller-format medium-sized obviously, and, higher-touch And before. talked say At but

think the continues for compelling the population. about flexibility. sales We've corridor, to in the existing think and out. a again, wider pull as value not format more And a safety, inside but large pull just And that our lot typically you're as an for that reason has And talked full-service they well. provided, be majority seeing ability want sidewalks just for especially and of restaurants, broader our this and are restaurants. is to product, mixed-use our gravitational viability, of an but the So perceived open-air the trade to I to only of sit-down that I example, I think, the for

Linda Tsai

And since Or time, you formats in for it say this happening mentioned? would from the has trend incremental so been of you coming board is just restaurants? is the demand terms the more across some the

Shane Garrison

a That's question. good

know, up push initiative, cadence. think broader two I a more we I pick to don't now felt think point, this bigger the I it with have continues years, it But restaurants are for, probably recency. your and

Linda Tsai

one Got more. it. And then, just

in next bigger rate expirations of retention XX% in the tenant lease do think retention rate the there's terms in you XXXX, a year? In about XXXX. for of bump How

Shane Garrison

and look thoughts back guess I my nebulous quality. our to somewhat at to initial point great a That's have rely you least would this platform just and at XXXX give our on I question. a on

run occupancy. were highs for all-time have we this of point. last At at in multiple at the end years XX-plus We year,

I in anchors on know, still think COVID we on tough of the I pretty side. north XX%. spite don't leased issues. of pushing had, were XX% quarters the given eight boxes anchor only We're two We

on and a I look ran population, blended occupancy comps the tangible the it's high year-to-date north of qualitative an a decent of comps kind given you in at of the renewals, kind at opinion. last quantitative we're X%. when of little year. look a aspects So We you And portfolio, form running think all-time the

migrate the think all our obtain when best from standpoint awareness for generally distribution, assets for tenants look should Again, and and or either So to that the they're better here. to provide new I space. get from I continue certainly think looking quality look, upward profitability things a

to same of in expect So what especially look really like of I this early portfolio. the continues in XXXX, full XXXX, more from the without understanding virus impact the would effect

Linda Tsai

Thanks.

Shane Garrison

you. Thank

Operator

Zhang Our your question comes with from question. next Hong Please state JPMorgan.

Shane Garrison

Daniel. Hong

open. is line Your

Hong Zhang

hear you Can Hi. me?

Shane Garrison

Yes.

Hong Zhang

I your just if deferral and with some you nature was color deviated gym entertainment not of they're they agreements on could your more fully wondering agreements the open. if tenants, given provide that the from normal

Shane Garrison

Yes.

I depends. it think

end back, by it, period the XXXX. a gyms paid longer call but are national of Our generally deferral

have include again X% X%, going most our Theaters in would I to deeply I third value drive as think are mandates. to given argue, are to outside literally don't at been not had theaters they that to is reopen is, toughest a rent. at Those entertainment, the and, I'm probably I there. product far parties open of the the as and ability shot and of of governmental all know, the have mercy affected really

think there. the which and generally we years I remaining, So the six conjunction abatement deals, a new I we with a theater done have to back And deal deferral we or new paid left had, five XX-year again in four XX-year by one end don't term. month five but signed of know, XXXX for did

but So that hybrid point a it's a willing XX-year that term that location. interesting the think there, modified call been has at four that part most this exercise closed months do same is methodology the rent or tenant renewal in but for was the during bit what's of to of I a held a the, theater it, three new

again, and it of in constrained and retention to indicative goes portfolio. back very even volatile the the quality environment So a

Hong Zhang

Or are rent I quarter to security tenants July? did from back And those of in X.X% in paying guess second more the bucket? you of it. received the rent that deposits, deferral/non-pay in the they move Got

Shane Garrison

you very will. I you. that applied with in in again, me, conceivably. into without where and liquidity front that where follow-up or finite the right, buy if they would back security deposits environment, we can tell for of you were constrained generally business, initiative open the helped And having mom-and-pop We numbers tenants was that a had them short-term to none push an and

of are open, still significant you but the we will AR. and them up with true think a follow up I portion on outstanding

Julie Swinehart

detail I I time did deposits you also period. some nonessential. but in cash apply think, for where categories to upward the and, and, there, And in just our an Hong, Yes. also we the you we many include July that point see not in in would do supplemental page trend security XX see And you collections particular, fact, across

I positive say, that amount July the numbers. that very we the security I we that's the but one-for-one seeing that deposits in general applied don't with to So want think small indicative collections, also is and trend you see are, of

Steven Grimes

if Generally, just though. final look well. point A are That's security would to applied, deposits on make well. replenished have to that we like as note one I'd as one, those

Hong Zhang

Got it. thank Well, you.

Steven Grimes

Thank you.

Operator

will question-and-answer now end We the of I closing have call over Grimes Steven the for remarks. the to reached turn session.

Steven Grimes

Well, as thank understand your that of mind end, many short complexities impacts the further financial To you time that peers our you of are against have all other COVID-XX business this try and may hear reporting numbing. from We us we to our questions recognize the those. nothing it's of today. and you benchmark of sector, for the put pandemic has

any good may you a able and the your rest and willing again Thanks today day. clarify to questions of further have for ready, time stand have. and we answer So

Operator

All disconnect. Thank today's conference. great day. a you, may concludes Have parties this

Retail Properties of America (RPAI) 9 Aug 202020 Q2 Earnings call transcript