Earnings call transcript Q3 2022

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Operator

Thank you for standing by and welcome to InvenTrust's Third Quarter 2022 Earnings Conference Call. My name is Flora, and I'll be your conference call operator today.

Before we begin, I would like to remind our listeners that today's presentation is being recorded and a replay will be available on the Investors section of the company's Web site at inventrustproperties.com. All lines will remain muted during the presentation portion of the call, with an opportunity for questions and answers at the end. [Operator Instructions].

to call like to now would turn over the Mr. I Relations. Vice President Lombardo, of Dan Investor Please ahead, go sir.

Dan Lombardo

DJ Chief everyone joining Financial Dave room is Heimberger, us. morning Officer; In President Good and Operating Officer. the with thank Christy David, Chief me Officer; Phillips, Investment Officer; Mike Executive you Chief for Busch, Chief and and today

Following the research from and answer the team's questions prepared remarks, community. we will open the lines analyst

the conditions. the future of some comments to contain call, company's today's supplemental or financial as any views in about including to subject statements update current and financial on risks date, or forward-looking based the our As earnings statements a reminder, quarterly no and Any speak of management's performance, of forward-looking may and on and These business made that obligation are forward-looking guidance statements only are expectations, on today's and and various beliefs forward-looking press future are uncertainties. today's we release. assume market

In also reference this financial measures which GAAP non-GAAP addition, Investor Web we comparable are site. are in materials, earnings Relations quarter's will on measures. financial our included The posted certain

it is to to turn my the DJ. call over pleasure that, With

Daniel Busch

our opportunistically one closer in last the acquisitions sourcing of months, to markets, grocery by year and laid throughout of Belt in portfolio at the everyone. little Dan, target is Sun attractive a ago, goals opportunity investment plan REIT stated offered NYSC, our unique a A out XX non-Sun Thanks, our and the retail InvenTrust on We've while business that over morning, XXX% on moving which out a listed we to continued assets. execute our good concentration Belt and rotating anchored time, strategy sector. that

to utilize diversify also and structure. capital fortify grade rating our investment We our

updated as by guidance. business core our XXXX, the simple growth FFO Our results, shown in focused as deliver that of a efforts across all implied solid and our double strategy facets can proved in strong team's digit

this our that is underlying the of year What past outstanding. quality is portfolio also underscored

companies Belt better and of trends Sun Our pressures Further, to of adding further workers, our seen in-migration able the some consumers the from demographic past inflation demographic our skilled to highly are likely the absorb markets decade. over the and economic experience markets continue profiles of in to positive uncertainty.

know months resulting we has and of InvenTrust and the immune we're rising strong rates, of Leasing not continue results. the in While NOI and to for leased high year. delivering to expected inflation, record nine the occupancy growth risks, remains same adverse first robust, consistent is demand interest recessionary impacts property

cost the construction limiting the anchored challenging. affords the centers, from leasing supply and opportunities as new new driving our grocery remain all development tenant On on and to evaluate the ensuring higher opportunity rents. side, portfolio, focus brings additional and hurdles proper demand are us and scenario inflation at to mix our This quality centers, and headwinds of while credit

uniquely said, That our disciplined the in we our remain on see the take advantage front, value and extremely positions we of leverage during may times positioned when opportunities uncertainty. When include strength only also flow our of we sheet, growth not balance economic good, to drive preserve any sheet evaluation balance our of low sector while market. looking acquisitions. new us of transaction cash but the dislocation have times you company are leading to for The in

Mike call discuss guidance to that, and financial going turn results more detail. to over With to our I'm the in

Mike Phillips

from share period XXXX largely to rata property and million per increase increase acquisitions. core year. and thank us. or contributing XXXX $X.XX same pro the Thanks, per $X.XX last of of driven InvenTrust Yesterday, nine months The for an $XX.X representing joining FFO of DJ, XX% was share, for $X.XX NOI, the everyone compared you same additional an reported by first

repurchase in we million, In interest a increase our year-to-date due same $X.XX. of positive offset by rata expense realized million of $X.XX G&A impact gains growing year. period reached $X.XX the well an Pro NOI same share were year. as cost last QX from savings X.X% property $XXX as recurring and nonrecurring addition, in to reduction over last of These $XXX.X

earnings of driven year-to-date The I expected to increase the offset the did was year. did of strong reductions out, decelerate results as rent to half previous in first of gains, for net primarily rent in and by in increases, contractual our given want collected. out by point XXXX, calls, occupancy two our comparison start the abatements discussed period

of the the timing out period contemplating quarter significant third rata periods, of that X.X% NOI X.X% as year. to operating have expenses the and quarter in due have the increased our of rent primarily throughout XXXX, is out guidance comparison of pro the for period rent from Removing collected property would as same This this well year-to-date. been

to sheet. Moving the balance

to debt which As was one the XX, XX% Xx, in was net profile ratio leverage our adjusted of lowest the September sector. our makes and of EBITDA net leverage

Approximately X.X rata is maturity weighted our rate interest fixed pro is average Our of debt and years. XX% weighted our is average X.X% rate.

hand, quarter, million allocation of At liquidity, evaluate the our flow our near-term continue facility. our credit debt. to new available the had $XXX maturities, on we approximately on can end needing in generated without With and our our available total significant opportunities portfolio as address by to cash strategic well plan including of borrowing capital capacity $XXX our we source cash the as revolver, million capacity on third of

guidance. our to on Moving

revision. We to main the $X.XX. to in are increase raising and upward were G&A of the $X.XX range FFO income an our Reduced core drivers interest

growth We NOI at are same X%. property X% maintaining to pro guidance our rata

in are disclosure our provided full assumptions filed guidance yesterday. supplemental Our

portfolio the activity. to to Christy to With our turn discuss that, call I'm going

Christy David

everyone. Good morning,

As Mike and performance. InvenTrust DJ operational have strong continues to experience leasing mentioned, and

XXX,XXX quarter, categories. For feet square the representing signed various we leases from XX retail

ended XX.X%, the XXX year. the same at points last occupancy nine basis first months leased Our period of the year above time

are XX.X% solid volume highs. bolstered was comparable our new locations, irreplaceable at These quarter and spreads the leases results lease portfolio's Our by the showcase small remained to shop at our both for all-time XX%, third our validate to and and of and quarter. anchor tenants. renewal to leasing lease attract The markets, the X% continue retain increased percentage at for for ability strength

annual Our portfolio pro $XX.XX, with rata as same the of increase $XX.XX for QX XX, increases hitting $XX.XX, base XXXX QX XX over and X.X% Anchor XXXX. property September of ABR September of an was ABR both rent, to was XXXX. of Small of Shop compared Tenant

above rate Our year the retention through XX%. is

to deals. We lease continue leasing make expect up to significant of our renewals percentage a

the out leasing brick discussions strategy. expectations. retention our theme, locations remain decisions make to there with is point overall In are in rising robust best a focal opening to long-term In build rate landlords retailers, with downtime will mortar of to our meeting committed an costs, a environment estate that that and a common store real secure eliminates

turning to our rent tenants. into continues team where effectively paying thrilled time. on proficient team's deliver prevalent, In period spaces ability signed remain be supply leases Our chain issues to with are in a we

For of opened and up and year-to-date, InvenTrust the feet third quarter XXX,XXX space, XXX,XXX respectively. square

path efforts properties InvenTrust to to team in helped as our event. Carolina, of portfolio. seven Finally, centers. damage the work were our it the in dedication relates our tenants address InvenTrust this historic to I of near Hurricane and the properties Florida North of in and applaud prepare the XX all impact owns crucial for I Ian storm. the wanted the who Their and limiting hard weather

some the immediately evaluating After water sustain storm, the properties some damage. centers after did wind and

servicing we operating our process, However, and work are and swift and been closely we their to communities. areas report the impacted to ongoing for continue assistance and the to back with tenants remains are tenants pleased provide open, clean-up our The recovery has support needed. an

by that hurricane. their our partners Our impacted thoughts be the continue were to with and families

will I final some over for call turn the Now remarks. DJ to

Daniel Busch

Thanks, announced of Board welcoming she and as array understanding dynamic Smita. as will conclude and to leadership Christy. would an infrastructure will well complex I the Board Board of be appointment global know a the our impressive environmental of a of InvenTrust’s month, to by solutions. perspective Directors. of and Shah add to and new expansion InvenTrust I Last like Smita officially bring our

Smita’s We goal management company, governance of and appointment Board furthers working her the with to levels commitment our the all value. shareholder efforts. to enhancing to of and high maximize in our InvenTrust’s forward caliber rest across professionals look the oversight finding while

any Operator, this concludes open for our questions. prepared line the remarks. Please

Operator

Instructions]. [Operator Absolutely.

first open. question now the with Floris from Dijkum comes is of Our Compass line van your line Point. Floris,

Floris van Dijkum

then industry, for are on your Thanks to to and talking perspective particular, a expect your is, wanted see what -- demand as negative the retail my sort The can to positive continued from one is peers you're forward? rates, going commentary you I'd of well? are that get negative. quite one if going get about of two been upward And retailers. little seeing and love cap particular, I the what rising obviously, on And taking in estate provide leasing trends, and questions, interest on your being and most maybe by real rates retail impacted the in maybe positive you have pressure guys. industry DJ, to that trend put that,

Daniel Busch

morning, Good question. for the Thanks Floris.

first, mention trends, the the than the really same. supply, to on is Obviously, the past. are occupancy demand. inflation, is business continued many positive of had big But strong the seeing we're or to in us We're With The at higher tremendous would lot to across quite supply. peers have our of that on the institutional housing all-time the So a underlying of piece more calls I mentioned positive leasing the continued kind obviously, gives demographic of nail costs, highs, of face well. board experience hit and have the alluded what is, leverage we're favor that's higher all that lack in of the ground the the One fundamentals their our you lack in in-migration, as in that seeing thing we've of much like. the levels address as in markets head.

mobility being You construction of not add the easy tenants probably as be. to costs as the it to is that the elevated, used

How in leasing think remains favor. So those sustainable? be we foreseeable to are demand. two pretty our see traction future, But it to I how seen. dynamics That relates the and our as long for good working

we think financing thereafter the the capital pricing and I with on is look, all before where did in listed with this earlier market of today. company Luckily, lot then we quite a placement look our a right same rates we're based the dealing favorable thing. year, side, On where private hindsight the

a I it rates as can haven't we difficult because As accretive little to return cap to to just we rates, environment. where a much seen as get seen today's we're more data that's that point. to it bit cap thing is rates watching And make one business. relates financing is cap think We're our the trying costs, we've move in

and make Now we returns cap okay where rates if unlevered too. increase increase can money, that’s

bit cap mentioned the can approach So see and wait taking see take remarks, there that rise, a as rates are I little some of we of. prepared in opportunities advantage to a if we're

Floris van Dijkum

North you in of of just cap been just this terms center a they on rate to? your have reflective that Carolina, done rates, at In How at think center where has not I are was smaller deal of an long historical cap that you that in rates you believe bought the cap looking that? are I moved maybe was know Charlotte. going And favor, outside or

Daniel Busch

it for unencumbered, our and so accretive assets quarter, funding, a basis. been subsequent a quickly. on the portfolio, We why very bit flow Sun some is was a negotiation Belt, It's that into to particularly and moving those closed deeper more were an of of just the on yield been question fair getting to the it’s obviously out in remember really It while. we've cash so it’s that deals the it like were the to we tend It’s too. out taking with a comfortable. happy Carolina even move the little to so business. Colorado, obviously made almost which North Also accretive us recycling that's accretive match No, Colorado

Floris van Dijkum

me. from it Thanks, DJ. That’s

Operator

for you question. your Thank

the Craig, of with your is line line next now comes question Craig Our America. Bank open. of from Schmidt

Craig Schmidt

tell I rate? us property operating you. wanted a on continues is driving good Thank expense. to third to increase. that. quarter It run just And And you can focus what's the the maybe

Daniel Busch

question. Thanks Hi. Good Craig. the for morning,

quarter good Third run be rate. a wouldn't

where first at on half the and think this that our some to as operating going you're at expected of were The what fourth was I I the first year demand and or the little going bit half many would the second centers. in to as done say, the half, to at third alluded property But probably quarters run back increase saw property to particularly side, loaded. one-time further the we've to some the rate, and quarter opposed a to the to you some for things first the be quarter of opportunities the the beginning, at levels get I of see our closer that opposed expenses, items, we fourth second would well. in goes it as what non-recoverable to look year,

Craig Schmidt

how Okay, where great. much the your small occupancy occupancy? I'm just And lies. then can and take higher you your bigger wondering anchor opportunity shop

Daniel Busch

at We're highs all-time now. Yes.

quite us can So some think push. least the we is inflationary The the pressures mindful shop think centers would to I tenants. peers have bankruptcies where on no small a of we're continue with of good. feels the shop haven't while, have many the and bankruptcies small right? bogey I just we in any side, else some being exposure, big on obvious struggled, seen everything that say I of our withstanding at

think to the particularly anchors. our versus larger continue any it lease to disruptions barring I bankruptcy national based increase, than it major of some we occupancy on hits the occupancy does expect on But maybe them for physical front. harder

Mike Phillips

the price. in Craig, whole you're though, with is good XXs where any, the we can really can The centers, there's where putting to these return no increasing into news push of capital, And you're lot high levels that's a to but push we renewals once not of rate your start if than and where retention price, mentioned, Christy back as rents. get you a occupancy, better hitting

Craig Schmidt

holiday seeing Thank centers your to bit what retailers, October? talk traffic still for you. their are And a about Are maybe then just when to finally, you little through expectations good you the And your consumer. 'XX? talk

Daniel Busch

Yes.

that tell least I strong. little you will still bit centers, XXXX think consumer, the a is our holiday unknown. quite at at I still is

the is traffic from above levels, modestly pre-pandemic in down which still earlier is great. Our year, but

if won't to whether I that. holiday we is obviously, smaller our or Even that longer inflationary continue it season, if say in our we're options, baskets well. focus good. that think, been, trips the yet, Not focused in our this to the has making we haven't is this center, more and grocers into seen small well. centers offerings are to say kind changes or on be ancillary it food I going is environment of any sure for material But sustainable shops, up down, feel an that What which would that's than do where are quite cautious anticipate. happen do optimistic make going lasting we but relatively services

Craig Schmidt

That's Okay. it Thank you. for me.

Daniel Busch

Craig. Thanks,

Operator

now back concludes Thank our I Thank This session Busch today's question-and-answer you for pass remarks. for will question. call. to DJ you. for your closing

Daniel Busch

this Thank you everyone us joining for morning.

Enjoy If reach you out. hesitate your the day. please rest have any to follow-ups, don't of

Operator

concludes This participation. conference Thank for your call. you today's

You may disconnect. now

InvenTrust Properties (IVT) 7 Nov 222022 Q3 Earnings call transcript