IVT - Earnings call transcript Q1 2024 | InvenTrust Properties Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to InvenTrust First Quarter 2024 Earnings Conference Call. My name is Harry, and I will 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. Dan Lombardo, Vice President of Investor Relations. sir. ahead, go Please

Dan Lombardo

Good today's and call. operator. your you attendance on morning, you, thank everyone, for Thank

Chief David, Joining DJ Heimberger, Chief Phillips, Busch, from Chief President Officer; me the and Executive InvenTrust Investment Officer. Officer; and Operating Officer; Chief team is Financial Dave Christy Mike

Following prepared will remarks, open questions. lines for the team's we the

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

certain financial which in measures. will will we financial The over non-GAAP turn addition, on the posted are quarter's GAAP comparable website. With this . Investor call our also that, In DJ Relations I included are earnings reference to measures materials,

Daniel Busch

updated not our our commentary Thanks, open-air cycles several conclude type. results continue the our with positioned you Dan, where joining following brief is everyone in this benefit first financial XXXX, Christy color Today, retail sustainable estate cash commentary continues an will grow XXXX start the property off real in our and demand to supply and and Mike I'll to fundamentals and guidance, some XXXX discuss with solid and landscape. in quarter term. sector operating to morning. dynamics, results, from how the a environment will overall seen and additional start be regarding operating leasing to operating us InvenTrust thank on to around long flow provide excellent

previous of discussed properties. demand updates, continues all for the our remain very have robust tenant on We to

offerings nature the InvenTrust we type The experiencing is only is in specifically in due to markets validated has Some not but that operate. of the at to withstood balance demand that our property we which the of which the we are demand to of communities necessity-based the importance of due serve. the

becoming performance, from As have markets that out will we growth the a thesis. aggregated future expectations company, rent since that we said cities some outpace concentration but a is expect important, as market public the we prove believe within our equally the major average national should perspective. our to portfolio, in past that And continue we've

focused capital exclusively capital and essential own and to straightforward Belt playing allow our retail out. is accretive in an our low meet operate Leasing strategy continues appropriate for us to to and do open-air in Sun And activity centers structure continue way will region to levered simple and the Our can an in of the manner, so exceed we or expectations. when, deploy if U.S. shareholders.

up all Our Occupancy on leasing rate XX.X%, at basis, and quarter double-digit a year-over-year spreads. finished blended slightly both while Leased sequentially delivering the

integral to favorable are specifically Certainly retaining we high-quality the Shop ], are annual we the XX%. remained while Small continued minimal the across Importantly, that portfolio, that our with rates but for free leasing preserving above flow continues [ retaining escalations, cash outlay. be better merchandise with higher And tenants we tenants strong. saw are future. mix more first normal occupancy cash [ arbitration which tenants drive Shop the while the Small Shop of proven our tenants' Small centers, negotiating success, are will ], into for for to quarter capital, lease portfolio

quality bring and constituents. better credit higher tenants operators in will and underperforming community replace that serve to continue We their

from I given environment, is understated Belt, that stabilization important next But minutes. few more Cannot our estate that to advantage in time benefit provide how material supply little underappreciated activity the real supply, leasing this way for in retail. appropriately a uniquely ever in the drivers to to detail should What start lead be of in few feels our operating quality open-air positioned means the demand in new a landlord before to take if of with exists out emerge a how the lack it's retail is few starts institutional will felt development finish highlight the in Coupled this materializing. sector. Christy on to begins in years Sun the imbalance. InvenTrust are

improved, our the cost allocation but has set environment we appropriately market ensuring accretive growing frustratingly the capital of an in opportunity new been [ in the heating deals has are selective capital, manner. volatile. that capital, On remain front, deploying of Obviously, capital to ] we

As be we to continue in external would accelerate our much internal to operations, prudent to complement approach. as our like we will growth our

us to a be keep at we Our the markets to opportunistic sector, yet the up balance one favor. in sheet when robust our remains patient, allows to lowest of be the which ready and the levered pipeline open

and center we tenants first And last boasts real also growth-oriented had another piece we generational the on sales, Side of the situated Atlanta. first Upper is supporting estate. a Phoenix subsequent of Publix-anchored property powerful quarter quarter's in a call, acquisition Moores the market Mill XXXX. secured in discussed to our West is on infill As in that of neighborhood quarter grocery the

Mike? Mike that, With over our to going results. discuss call to financial I'm to the turn

Michael Phillips

XXXX the XX, reimbursements driven increase by update with $XX.X and same NAREIT March ending guidance. rent FFO or of share XXX points million NOI the an the period X time an diluted Thank $X.XX then basis was I basis over over X.X% including increase year. to and same XXX start good XXXX, our quarter increase position bumps strong full year. The base InvenTrust results discuss of of for from last for growth everyone. X.X% you, $XX.X DJ, year expense million, of with embedded last property rent, and balance sheet quarter, net for will the reported our morning, months per from points. our end was an

to grew to XXXX. per same-property acquisitions. $X.XX time the FFO FFO for NOI compared share in the quarter, the NOI growth by period driven XX% and core primarily Components of from For are quarter same

borrowing remains quarter including provides our challenging balance mentioned As ability as environment. us available our DJ revolving $XXX million We a $XXX strong to a markets line the million sheet navigate first of capital and earlier, total on remain of finished flexible the we full credit. of capacity liquidity, with

ratio was XX%. leverage net Our

trailing Our net debt to basis. XX-month adjusted X.Xx on a is EBITDA

of ended X.X% years. at rate interest quarter average with average weighted Our the maturity a weighted X.X

are the next limited amount the and over years. manageable, maturing are maturities comfortable debt we with X Our

matures will November. our do We of And we the $XX a a reminder, options markets extension million as as to observe continue pool loan X-year option. we that [ ] have evaluate in for

over share, Finally, we X% $X.XX of increase dividend last declared year. per a an annualized payment

FFO FFO in be to per to finally, by conclude With per and growth will at our $X.XX the basis X.XX%. updating the we midpoint which our $X.XX XXXX, points moving start NAREIT expected same-property to to are X.XX% we XXXX share, now We're $X.XX share. by up core to guidance my to range is $X.XX NOI InvenTrust remarks strong I guidance XX guidance. to of are increasing raising

XX investment $XX remains activity million. debt unchanged bad points for remain net to total at at our will XXX the basis reserve and year Our of revenue,

reaccelerate Finally, to should to and a of quarter the XXXX, & second in place shops as the after in last second Christmas Tree Beyond of we anticipate Bed growth continue impact NOI quarter, quarter. headwind we bankruptcies the mentioned Bath took and due that the

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

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

Christy David

regional looking their footprint. be to DJ demand is and coming and tenants As national mentioned, expand continues strong from equally to local,

tenant openings X:X, by XXXX. is outpaced XXXX the trend store On side, that and continuing in into closings

adding center flow. demand Given contractual the long-term tenants by to strip achieving annual the are dynamics favorable cash key our bumps we securing both growth rent converting space, profile stable to to factors to fixed organic in CAM, and committed

in XXX,XXX backfills Bed stages Brew, pipeline XXXX executed negotiation. with Bath our Turning tenants operating our results. XX Beyond ], & over which various at and signing to started leases leases space. feet X [ of as We additional Cavender's square for such at leases Sephora with by We

one the tenant replacement identified lease & have Bath underway. with remaining negotiations Beyond Bed space and We

Our from last the points XX lease quarter ended quarter. occupancy XX.X%, of total at basis portfolio up an all-time high

Anchor Space and increase quarter Our at Occupancy XX.X%, Small our ended of the an finished Occupancy from points XX.X%. Leased XX last Leased quarter at Shop basis

compared is an XX, $XX.XX, portfolio X.X% XXXX. of of the increase As of first to quarter ABR InvenTrust March total

leasing at For new X.X% and with comparable quarter, of were the quarter. for we spreads blended spreads renewals XX.X% for the leases XX.X%, posted

to see existing remains increases. rate their retention meaningful XX% at Our leases tenants we continue at renew as

base point at come representing points remains $X first pipeline expected with rent nearly XXX to XX% this of year. open, million signed, Our of some at the not annual as quarter, basis online

never closing, In has leasing stronger. demand been

Our portfolio continues its resiliency remarks, to drive and prepared results. can that our has open questions. Operator, concludes you to line and and ability for the prove

Operator

question our Fargo. line today Kesten the from is first [Operator Dori Instructions] Wells And of of

Dori Kesten

good the pricing versus just acquisition guide. you're of late. on the You you today in seen amount Can competition kind headway made your that then underwriting talk . net any maybe you're And months seeing ago? today, X deals you've of or generally about shifts

Daniel Busch

then end. maybe I'll Go Dave. I'm going color start, Sure. Yes. ahead, the Dave and to let add at some

David Heimberger

Yes, sure.

There's more us improved. options to underwrite. for I'll with So volume. start It's

So higher more we the at million towards look of at $XXX any moment. options. in $XXX or million the pipeline, end at It's have could point time, it the

very trying we're sure So make IRRs. capital, underwriting, we've sensitive cost to been our obviously, active targeting being and really of appropriate observing

quarter, those fit again. Phoenix On mentioned the growth but so again, we last the earnings wedge of about that in X the talked release has just Chandler, Phoenix, of there, think what in rent great release, of -- And then unique component we deals to One mold or very Atlanta Mill, it. Sprouts-anchored, we what that of very press very to will Moores again, we significant recap, that of complementary be specialty in own over see growth is Publix and grocer estate to continue already sort we time. real to high-performing piece sort

levers. year. exercising So growth The cost obviously We're goal. full. deals external sensitive added. $XX achieve but to before million that a options our We're this is that's more closing Obviously, very more active. There's capital that again, pipeline want any of two marker to we on

Daniel Busch

part we I The important where out a little -- as time opportunities because is, some most think, obviously, most on a bit point we million, sector $XX Dori about it's think in are it capital cost the way there the our hope the was of today that based And stronger there. would it's in is DJ. people

perhaps go and a expect are rotation to for could about it as of There's over wouldn't and other if could if that. is of opportunities talked us the interesting proceeds materially use there use we've What we I capital out we some there, So in the we those environment same could a use stays markets. properties a source lot. we couple our opportunities find if a of as see

Dori Kesten

acquisition? you are for able rate And Okay. give the the to cap Atlanta

Daniel Busch

No.

we're just the So would I the call to specific IRR tell anywhere which, unlevered is rates, low you to to without mid-Xs. targets, giving in our cap that able get it, still

underwriting So an Both to to from that's level. kind of were get able we and how that we're Atlanta Phoenix, looking it at perspective.

Dori Kesten

can of And range? the you the the walk drivers just is, what were [indiscernible]? one Alright. key through last guidance

Michael Phillips

same property? guidance range for the Yes,

Dori Kesten

Yes, the guidance range.

Michael Phillips

Yes.

to have the X%, bumps, most which base in sometimes then walk XXX executing X% as that's it, down that's drove we're points the especially by to successful XXX and we kind reimbursements. of heavily basis basis basis quarter-to-date, rent call Small of line continue influenced up So did contribution points, and of points Shops XXX where in you getting, we for still it, from the -- rent contractual expense net be And within in deals. new of

QX late this to of XXXX. Our expenses a little were compared quarter

maybe throughout you'll in is lower. kind year-to-date to What that an little the last us increase and bit the year slightly operating a year, of quarters get comparable subsequent see expense

Operator

line the of America. Spector Our Bank question from of of today is next Jeff

Andrew Reale

Jeff. This Reale for on is Andrew

and rent reported First, just in the uncollectible quarter. recoveries an insubstantial with amount of

as reaffirm in why within of well what year? debt to wondering guidance. then have exposure you point bigger And basis for reserves wondering, Just in box as at do to of bad this assumed terms Rite XX the Small XXX points Aid your just Shop

Daniel Busch

we provide more to bit of really think the our explained, net debt range. color. we're way it -- the peers at have a end it basis. lower a I comes Andrew, think bad most is And that way on that trending the of Obviously, happy about, little

points. tenants And as to bad that unforeseen XX from it collection capturing rents, cash a XXX mostly to within of So be can surprises you fallout by it do that are basis. that have some debt, you're out-of-period some on relates basis that offset

is we but the it in got in happened couple implied our prior what we So as collection that first guidance, wins that expected fallout was had -- rents. quarter of period relates actually to the a we of

more which we year, rents Now out-of-period But the is obviously, that maintaining felt have comfortable why of throughout we Rite Aid. expecting much not we're point, the your one balance to range.

have Fabric Joint one ]. [ We

those primary So been in call consist basis are you if will. have the that it, those the retailers XX news, of, points,

of the relates through stay the So, range. be has still the But bankruptcy. at to in, you specifically. to that news so it a the those InvenTrust tenants end run good But tenants far, expect could probably low if for end to were there's us to year been as process those

be But our tenants that with Small pragmatic we it relates would range. I to conservative, year, say, point and appropriately to throughout that basis XXX Shop felt keeping or XX trying to to being as okay the unknown

Andrew Reale

a but Okay. you getting sequential That's I quarter. what and in decline it's latest Shop push quarter? helpful. Still available with in of understand with to just after high little harder color then are space, And saw occupancy Small the leasing discussions hearing your reaching to And record the the from then just maybe the lack healthy, Shop drove a last get think, particular? what on that Small Leased on hoping we Occupancy more tenants decline

Daniel Busch

feet been and think mentioned you about over for in remarks, I between and Christy it XX,XXX prepared released And quarter this to start, the was I'll we've X, think was a But on already in square little of to put. portfolio. XX% you a a Yes. of hand that just I'll Leased of bit see talk It more the discussions it kind was tenants normalized to -- level having. Maybe our We've really, the Economic of we and more can fallout it space. I'll Occupancy. changes -- if the about

We healthily in already that's minimis are [ working de space on at of have then the double space digits. spreads we're another XX% that left. ] replacements And with a that of amount the

you contraction kind So Occupancy. that's the of the Economic why saw a Leased between

seeing of we with holds Small Shop do really kind and high to leasing because watermark nice But point, we space, on your of do year. by we are the still expect amount activity expect if minimal the that of environment to even the to the some the our end side, climb surpass

you talk Christy, in? some categories that activity do to some want about we're seeing

Christy David

would very I Shop general, our pipeline Small in that, just healthy. add remains Sure.

mix of would health those taking main failing and in in actually drivers what's the trying driven demand proactive Small [indiscernible], centers. [ do release the category, primarily course, we to service pipeline personal today. where full to the seeing but the add by some the services, are ] are with QSR quick Shop be We of our struggling see we're tenants that opportunities those at And our or

Operator

Our of next question the Paulina today of [Operator Green from Street. line Instructions] Rojas is

Paulina Rojas Schmidt

demand level this is talking very growth to answer, supply somehow compare And emphasis NOI sector next and us where your lot ability the to your you rents you And something years? aggressively growth frame the or sweet on strong in of for you ahead. could if rent DJ, is is about what today end. hear it's whether landlords help in in is a X of enthusiasm, How trend, spot, about a are bullish push then of limited,

Daniel Busch

No, question. it's Paulina, a great

I it there's years, quarters very remains talked times lead very, get of get several at things to strong for too cost the several the the about three high. starts to takes But because much for minimal do not construction for construction to next least, that because from it tried up sets amount of perspective open-air years. retail in of our anecdotally, of time long retail, built, just -- multi-tenant, if much, it the lack I we've two, fundamentals many in think supply new think these the -- new and to I developments

even the just environment the flip in X want shovels Because And in to next way X And can -- we there back years, the material on. that unless in where don't you an can't. developers that in we are ground. put or switch are are development, changing see that soon. They anytime a

supply not limited. the tenants is on. what And quality we the supply bullish it's really quality So most it, space. institutional side, quality we're we're seeing down trade or call for B lower very is And

in market, almost in. So operating their the are I they're public institutional that strong all folks as that's the folks portfolio it about of most to the positioning relates the think really markets why feel or

Now up the set and that sure making one caveat to pushing obviously for rents the inflation, that economy going we're not is where tenants to is our failure.

shifted many the sustainable why and then base I both appropriately, for our but the that's and with into setting InvenTrust rent spaces, growing rent growth side have the think ourselves peers gears escalations, pushing being much careful of expense capital more CAM better but not on side. through up

So it's us. growth. well set those up up X for I NOI pieces, very And us to then just think, sustained

And [ control of it's to financing really ] sure businesses make to we're our so out appropriately. our extent an

through past flow the to to well. more that the what as robust And in able space. end then But growth expect rate would but headwinds, there are growth the at short NOI curve, on will of interest least property we've remain I pass cash in bit, a little curtail growth companies than flow same probably seen that be the free to our the [indiscernible] cash better

Paulina Rojas Schmidt

a retailer Because this of -- care take of is this Okay. strong, once about business in could demand lack you normal yes, is supply. tenant that do but demand? cyclical. How failure And within way, cyclicality discussion think about

Daniel Busch

It's going mix shopping in open-air good grocery visits COVID change. do the because And times perfect always that's [indiscernible] I space permanently I think merchandise in of or to merchandise question. or better because are post-COVID the done services better for continue would we're the to visits mix, pre-COVID of than why hybrid habit consumers. trying come center ever that frequency the the almost habits to a changing of think do and will -- amount and environment. they they of to years change has always frequency community is doing but There the structural the probably -- that and XX tenant changed of work are in the than of the and today have because of

and that And going relates in particular categories how markets. opportunity not specifically people Those X change office beauty. times medical in the it to and had restaurants a gives cases, certainly week, spend most full-service visiting and a to structural at centers. our because the more to QSR, they're time services time in And them are our

of doubt, monitoring a And have there's benefit business. may going fail, it's it's because those structurally no whether no it there's nature think a cyclical model be. there's should So There's we're and failed to tenants. continue. that whatever always or I that be our business that tenants that do question categories But

Paulina Rojas Schmidt

last question. And the

from I'm you numbers Is seeing? of the that think net saw I'm this were During there but any than in some right, thought. it was if any mature of more quarter, seasonality And CAM had expenses. fixed that expecting these because we normalizing we expectation I that I of benefit a

Michael Phillips

Yes.

-- of Some Paulina. Mike, this is it

of up would throughout lower where expenses our end the I ended XXXX. in subsequent slightly like expect year, quarters, or will said up in and out kind flatten Some of to earlier, I we it's about that timing.

Paulina Rojas Schmidt

to year, terms this Okay. growth... be should full in a NOI contribution But of same-property the

Michael Phillips

between XXX had is too And we be be QX, our our and on a won't the bit, to expenses points. are we little but XXX a of XX% basis of points now. XX% fixed CAM it bit Yes, higher little portfolio that getting lot a because in will closer it we basis also that because tenant down recovery year but be have this will

fixed CAM X% getting to signed with on are when we them bumps So our we new X% tenants.

Operator

in questions the further no this time. at have We queue Instructions] [Operator

like remarks. back for hand DJ So to closing to any I'd Busch

Daniel Busch

Thank joining you, everyone, for us.

New questions, If . in forward great Lombardo. to you your additional Otherwise, feel have or the at seeing look any guys to to we Dan in ICSC a coming York City. either free months, you rest day. Have reach out of

Operator

conference This you joining. all concludes call. for today's Thank

lines. disconnect You may your now

InvenTrust Properties (IVT) 1 May 242024 Q1 Earnings call transcript