Earnings call transcript Q4 2022

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Operator

Thank you for standing by and welcome to InvenTrust's Fourth Quarter 2022 Earnings Conference Call. My name is Emily 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 website at inventrustproperties.com. [Operator Instructions]

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

Dan Lombardo

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

we Following remarks, up lines will the team's and the open prepared answer questions.

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

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

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

Daniel Busch

to morning, in in selling demand, Good capitalize rotated The team first thank properties Belt By while successfully all costs of portfolio Belt expenses leasing year-end, Sun carefully a is out the you three everyone, pipeline. for strategy Colorado, state, investment on with proving all InvenTrust company. out our a our build joining to in leasing full our aspects associated and productive solid of us. XXXX, capital publicly team as markets. operations robust continues Sun out also further and a leading managing focused and we had year business. traded Dan. simple Thanks, The and The investment

through maintained execution placement. capital disciplined management our diversifying balance approach inaugural of sheet to Lastly, sources while the we our private our

positive higher from Sun new trends, The people business jobs tailwinds and sector in grocery-anchored to household to include and markets. specifically of our previous to the for to centers. discussed These structural our of no support continues creating institutional retail investment Belt, on calls, migration retailers InvenTrust to portfolio. macroeconomic the benefit As the brick-and-mortar bringing continued quality by income locations evolving limited omnichannel supply strategies. in consumers And continued the

InvenTrust’s retailers. For existing remain these to and reasons, high-quality desirable new properties extremely

XXXX leased occupancy growth finished rate XX.X%, all-time We full for income operating X.X% year. to and FFO previous double-digit year an high property same the grew by of core delivered at net the compared

our results of initial of ahead forecast. All these were

external Charlotte We search in fourth HEB. one opportunities remain we center venture joint Antonio, shadow-anchored our for grocer the assets is which two in dominant San for and regional our by diligent outside grocery-anchored a of quarter, growth. acquired of In assets, the

company's XXXX the a started our also was We our in remaining acquisition venture. by stake of component It that joint is well-documented acquiring portfolio strategy. this

pleased this execution are We the transaction. with of

our now Sun million XXX% since past totals investment and has JV an line Including With activity over over this is and in InvenTrust our the ESG PGGM simplifies expectations. with InvenTrust's outstanding the transaction, XX initiatives. grocery-anchored net investment story. wholly is and been strategy our supportive $XXX of our years portfolio transaction, Belt owned further listing, partner this

disciplined will being While cap the prudent increase in opportunities, our expand. important we environment we long-term strategic Growing we actively is capital. our portfolio pricing continue current to deploying cost uncertainty remain but borrowing acquisition the for to and plan, recognized rates see when we've look the as are and

over combined store rates sector the the ahead on positive benefited dampen XXXX, economy, and has trends with interest Looking retail of impacts a tenant uncertainty potential the years. some consumer into degree inflationary could from in the closures exists of past the few higher

optimistic necessity-based our the be and of performance pandemic, to grocery-anchored comes about resilient the our of and portfolio Belt This nature continue during our the tenants, business. sheet. confidence our we from investment Sun positive However, balance grade

Our continues the show initial and of builds simple strategy. our strong XXXX to focused upon strength XXXX guidance, results which

it I'm that, Mike to to our color going guidance. more over With to and turn Phillips on provide financials

Mike Phillips

per over share a Thanks, thank reported FFO Yesterday, $XXX.X and us. a I'll start property and XXXX you for The million joining acquisitions. of DJ, rata everyone year finished on strong represents of note. XX% same core by driven the This largely XXXX. $X.XX InvenTrust per XXXX. was NOI $X.XX from growth with or we from share. increase pro recap year full $X.XX

Additionally, our a repurchase higher in These impact we to by and gains due net $X.XX placement interest QX XXXX. of borrowing share the costs. and from funded savings QX offset of realized positive from $X.XX private expense was $X.XX in that XXXX increased of G&A $XXX million were

increases, designed $XXX pro by at growing The by rent year, finished year Full same NOI rata current expenses fully were out occupancy and to period increase the of recoverable. in of reduction and last which and rent we meet the driven not demand some gains, one-time million, property seeing, abatements contractual of X.X% was primarily offset pre-leasing net over year. collected are

Excluding out NOI our pro of same period grew X% rata by over collected, rent property XXXX.

and leverage X.X of XX% balance net times. sheet, the XX, Moving as ratio debt-to-adjusted December net is was to EBITDA our

with capacity million rate pro credit year-end, maturities. average of no facility At borrowing available of a near-term Our our liquidity, is with $XXX million X% total years. full rata of a maturity average including five approximately weighted interest on had we weighted $XXX

beginning our share. April in Finally, as our yesterday, dividend dividend, per annualized This a release saw the increase brings you to in our press payment. XXXX $X.XX Board announced with X% our

guidance, over an full-year and which $X.XX increase X.X% per FFO we the core to be between $X.XX XXXX share, expect of is XXXX. onto to Moving range in X.X%

to a points full Our the of contemplates debt revenue. points X.X% by which increase basis of same total property to expected reserve X% XX to NOI is year, growth bad for basis XXX

the the out-of-period rent these first as placement. and NOI from we the back in first in FFO, anticipate year, In core year the a ease [indiscernible] half rate to property pipeline half run begins half increased of same both of expense interest comparisons expect the due to materialize. lower our we to collected XXXX open and For of private the

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

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

Christy David

Good morning, everyone.

provides As premier a DJ pricing highlighted, and our strong. continues to negotiation. with demand be and is to supply portfolio With new available negotiating scarce. our for leverage markets, online space significant renewal new no across in space limited and lease This to InvenTrust centers coming

of over million year, ended square total to is as square from XXX a XX.X% XXXX leased for X.X feet. XXXX that XXX,XXX last occupancy, activity basis we of the all-time at an space leased well feet the We during bringing our To increase end, high. as leasing which point end quarter,

both anchor to space occupancy to and highs. Our leased increased XX.X%, all-time shop small XX.X% increased our

ABR ABR ABR XX, same property portfolio was of a basis. $XX.XX, Small compared increases Anchor $XX.XX pro As with XX InvenTrust increase of hitting year-over-year sequential rata $XX.XX, X.X% both Shop December December on was to XXXX. an Tenant of and

retention new full X.X% for was Our the renewal above and comparable and spreads blended lease XX% the leases. for year were quarter rate for

space team. becoming market capitalize store space closure, to Theater closure distressed none of concentrated it Bed, this is in embedded positive said, of Party locations now City which and to the to the quickly us environment, are take validates premium. data on. currently well retail With any manner benefit recapturing In opportunity This move and for our centers. are of and orderly operations & portfolio clustered vacant viewed and or we feel our a tenants ahead is as in information local strength and underground pertains scarce Regal announcements. our targeted we at quality key one generated view intelligence allows an is of We action by ready Beyond, that our a our A and portfolio as Bath

remarks by were we we thoughts the currently drive at XXXX, has decade, Finally, on I for several to wholly-owned if our at seamless the of end opportunities are as acquired leasing allowing these my are There the to past on for further team been and centers, assets, transition. some growth acquisition interesting Ridge well leasing portfolio. natural Stone a centers. that operating the conclude they and wanted working property as or PGGM additional JV as These of adding all my

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

Daniel Busch

alternative lot its year the for expected future. unique specialized accomplished exclusive in a publicly shareholders. portfolio and as we're simple, first value and our for is a provides Christy. company to excited investment InvenTrust that more on Sun predominantly grocery-anchored investors a focused is and traded InvenTrust's long-term deliver Thanks, for even Belt, thesis

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

Operator

ahead. comes today with Instructions] please Thank Dijkum from go Floris, Floris you. question Compass van [Operator Point. The first

Floris van Dijkum

the the more pricing, funded wanted I a DJ, Hey, forward, give equity transaction with terms transaction PGGM if could of your in portion that that for impact bit of cash. you. see your on transaction Thank on little presumably what also of maybe you going you leverage be ratio Great. will to the us information and

you happen us that cap cap indicative expect the to you if do rates? going in more is so, think markets give of you of is what can And And bit terms markets little a where in your and rates detail? for are

Daniel Busch

Hey, Floris. Thanks question. for the

actually, great this many the you it getting returns into of the of part and here the folks joint all inception. So at all, or were that folks of on tell we just venture will I that that with without first pricing, sitting a are -- specifics see, was partnership me

years a our these wouldn't joined we I if and like say and but ago, PGGM for strategic that we partner So doing business great going the three or it frankly see made I with forward we what do cannot someone actually that assets. sense mind on in is business, future so

some in we the are As grocers, Houston you dominant assets, and and growth But are larger InvenTrust, we kind the market Kroger one this. are opportunities in some really fit San core excited of that of know, our about strategy in specifically of potential HEB and but see of Antonio. they the obviously, these

real out returns that our kind exit execution excited about we're cap rate, giving -- well. and something we of really properties coming these with of was the without our unlevered very partner are that So happy a see as

As it good a relates question. balance to the it's sheet,

highlighted still tick-up million our $XXX know, capacity year. our within pro and night, as will investment as Difficulty] finished rata this that [Technical little so we still planning bit well activity million $XXX a or this leverage in transaction last times, of of ample range, Our we're below about do is release five to have the you

our expect So footing you trying on of as can still to those that -- in for many capital, the that if a elevated be $XX will the transaction well careful and of very given that expect still some are market, as unique. which is bit us of look find tune to allocating think we in to the million prudent we're capital, and probably transaction opportunities on loaded. I to back and see how be space our little very opportunities more we cost we're But

Floris van Dijkum

debt I higher than NOI a somewhat made Great. around to your can potential year? little also Maybe bad about of guidance, And for some explicit what of your who've bit you've if maybe ask on for reserves the of made assumptions X% reserves sort your comment you of the X.X% some troubled same peers and probably store is can retailers. your if in terms there of exposure

Daniel Busch

one and good I say a to of our -- insight really many obviously of in I having have the very view unique it's smaller properties on is transparency have tenants. of benefits this. around there's these question portfolio provided folks that select great the No, exposure good have we sector would our Yeah. a think

to Bed, to well relates conversation the Bath it from we but of four BABY, retailer get that enter buybuy that the were we are and these that's to properties negotiate to more confident if arise. potential strategy feel our many opportunity retailers undertake & operations ability, Beyond, our as banners, that Bath Bed, unlike with from on -- and the peers, are or as of enter or with insights our to we as of if some our space either prepared -- our in take we've So perspective not itself, that teams' discussions several back opportunities the one to dying have had many then

one it really XX tenants. of or To really that call give back it shop year, latter basis maybe, low little and the it, bit you end much goalpost the that's points at to, from, don't alluded Phillips little the small towards a end comes a we get unforeseen bit boxes Mike the probably if of of of the fallout plus two call

end low the that So to that would of be XX XXX.

from well What -- we're On bring smaller spaces hoping some the releasing in short we some that were opportunities in as XXX back of candidly back kind we boxes is of or shop as spaces do be, would the what do and frankly assets other most if the because expecting unforeseen maybe that's merchandising we're that order, get some those get flip higher of we range. side, upgrade to these bankruptcies, of we're the of what, and to what really at mix see -- opportunities rent. the those other

Floris van Dijkum

you were what Do of mean, rent have have sort some achieved rents actually sort peers idea your spreads some we talked of could re-lease that some spreads that? you big I up they've expect about that in jump if an to to already. of rent of base of achieve? you XX% Should

Daniel Busch

pragmatic the Tuesday I fashion, knowing that the that, not feet square there, exceptions tend be current to Morning those rather to would look we which ability out we to When replace rule. our said like think the are let's in but I -- a portfolio very who XX,XXX to XX,XXX City -- Party is those square and for feels rents. XX% at our than example, around feet. me it take are No, say

larger in have either rents to We very -- four I if it's it spaces, we And tune between, Bath relates think one minimis those reasonable XX% those those total, and the XX% Beyond, we of spread. get probably it, spaces But little call of, then it X% & boxes de of back, anything exposure to any could a were think to to pushed is a be if Bed, to call as tenants. XX%.

Floris van Dijkum

Maybe last question me. from

of XX.X%. your anchor which your the where if forward -- shop of I is going view? almost big of occupancy, -- And least the because I'm What what's shop you're provide occupancy your your in mean there? sorry, the your terms is leased, of occupancy, to but obviously physical a correct, -- you're portfolio chunk going full occupancy your that segment that's In XX.X% growth

Daniel Busch

Yeah. No, small number, you the just think XX.X%. shop I economic occupancy it's to a great and our so, is -- give question

shop, anchor wider a bit As than right there vacancies, So When leg is in which side, growth where that's you XX.X% actually think spread anchor next to small come of mentioned, mentioned the now. as it the is three tad we the the is leased, economic the you occupancy. what XX% I right? on have vacancies about going from, portfolio

to So not a some we like spaces whole lot of discussed. real opportunity there of unless just we get were back the

a where (ph) if shop to [David of spaces. some getting it lot the for because it's demand well can the said the to not ability can those it's side get the our -- that quarter I where is that as of you quarter spaces to really knowing you be leased take of forever, is close be as many pre-leasing given better efforts some and that think those word we put lack been, longtime, it last expenses will so the as spread, of that about making possible, of you pushing our may rents last opportunities a his advantage to but what ourselves call strong Luke] small those a that and position not of we of and relates operating types in your as think I and been today, on opportunities coming what on see comments shop juice as saw do it's to demand the haven't if So elevated, ready more in made good as that about assets fourth in small really we're being you you our think it well

Floris van Dijkum

DJ. Thanks,

Daniel Busch

Floris. Thanks,

Operator

The Craig, next question go with comes please America. from ahead. Craig Schmidt of Bank

Unidentified Participant

this the that Craig. the in Good capital fit your is might fold on of more assets question. of morning. if of Thanks. fits strategy This and $XXX taking concentration Colorado kind guidance? Belt, for within of how within us and of your during quarter [Lucy that net my could for just Colorado again a you Doigen] Sun wondering the detail the million and I rotating into (ph) then investments in was on the plan, remind out increasing how provide Thanks bit

Daniel Busch

market that start current I'll three No. question. we own a think Sun REITs gives I the in Thanks market capital it It was it Dave accretive properties that of basis. exiting great an it's to market. markets did ability Colorado really just out opportunities and been didn't the and concentrated state to a focused the uses on relates But is for frankly, it's us of south capital transparent because and It to in and we capital that our of Heimberger. that Maybe core move being pretty and portfolios. great fit use a capital. find itself, that most or pass on our I'll further over strong a recycle to we've great a example such It's for as for Belt. an can If in it strategy in and

we potential the we that million $XX if The source Virginia, similar but of find it other right own, find DC this is would marketed right the opportunities. that fantastic will. market -- and corridor, further Three we think that fit deploy today, of beyond be would Greater assets long-term, planning properties, being kind not to those if in call the you a if earmarked when are already certainly we're assets capital opportunities DC, the the Maryland strategy that we year

I had want anything you Dave, if you add. don't know, to

David Heimberger

idea just simple the getting match important Belt market to closer Sun to that a obviously it the operational [Technical Colorado was the more other focused. we had Difficulty] to to grow our funding really again, in than And to strategy and and that Nothing place, like in just presence our PGGM trying us was in. sort we in No. add is of difficult make offices

Unidentified Participant

Thanks. those provide any color And rates around on you just sales? could cap the

David Heimberger

Yeah.

I say a rates disclose dispositions, don't these box we to buyers. mainly would So of a on typically on protect the them. couple cap are little here

end of towards seeing rate there. the things cap So you're skewed range the probably higher out of

So enough that's color. hopefully

Unidentified Participant

it. Got Thanks.

with on in As is bps an what if I timing guess the XXX Just could on When any look Has discussions a in economic expectations? track on line tenants? is spread, there the now? been that change question, with lease of that. you delivery second like to update -- your provide

Daniel Busch

Yeah.

question. good So,

all So, of almost year. think to expecting it, come some point or all I of that spread -- this online we're at

points schedule, just half there's round a it, basis -- we as basis. now, weighted, I which to expect back $X.X tends call So would good we get feel this time probably X.X on on million XXX if and to ABR about. the to of be get an give potential annualized stay represents that of you number, think to It year really, really we on half but

Unidentified Participant

Thank Great. you. Okay.

Operator

session will This call, DJ Q&A hand remarks. today's on for concluding I concludes to now the back and

Daniel Busch

us you today. joining Thank for everyone

If Lombardo. your any follow-up day. you to of have Dan questions, please the out to rest free reach enjoy Otherwise, feel

Operator

Thank you today. your now may joining call concludes disconnect you our us This and everyone for lines.

InvenTrust Properties (IVT) 15 Feb 232022 Q4 Earnings call transcript