IVT - Earnings call transcript Q4 2024 | InvenTrust Properties Corp.

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Operator

Thank you for standing by, and welcome to InvenTrust Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Elliot, 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.

Instructions] [Operator

to President like to Dan Mr. Now Investor hand Relations. Vice of sir. Please Lombardo, I over go ahead,

Dan Lombardo

operator, everyone, morning, our and you you, attending call and for today. Thank thank good

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

remarks, questions. prepared team's the the be for lines Following opened will

views future forward-looking a the reminder, including today's of our expectations about subject various and future on on As These and company's business comments may of to and based risks statements forward-looking the contain current earnings market some financial uncertainties. are and beliefs are management's performance, guidance conditions. and

of obligation assume and made press as today's in forward-looking that statements or Any date, to today's any quarterly forward-looking no call or the release. on are speak we update supplemental statements financial only

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

Daniel Busch

our After call regarding Mike morning. year welcome. Thank joining ahead. some this everyone everyone, results that, more start as well expectations I'm financial accomplishments on with XXXX and objectives the commentary the XXXX. you, will going strategic and I high-level fourth for us quarter to for full Dan. the morning, Good appreciate and detail key year as provide

report for fourth year by properties will additional highly for pleased and robust and and full activity. offer color results XXXX, capital share on operational the to performance Christy demand highlights deployment. leasing successes and effective driven our Finally, market We're InvenTrust's quarter our of strong

per and the for Core be full flow drive consistent which FFO expense across allocation flow continue year continue economic Increased average leasing year, the strategic cash the and the Healthy and X%, underpinning business quarter to growth. of share our third cash growth occupancy, above-sector in tailwinds solid our to share above factors spreads, consecutive management, per capital marks favorable migration both conditions fourth of perpetual markets. X%. demand by growth, grew

Sun As from population areas, for the Belt national our significant X% Belt's population inflows, by is emphasized, real of forecasts less the approximately decade, next are than particularly driving over consistently which higher-cost X%. project Sun rate cities experiencing retail coastal estate. grow Recent will we've the that demand growth outpacing

foundation logistics job trends, Beyond a these solid and sustained tech, create care demographic for growth. long-term the health sectors regions expanding

about resilience outpace We opportunities our where we are the especially optimistic believe in of strength enhancing further and will these portfolio. markets supply, demand

with across leased next incremental leasing fully point XXX at and expected to quarters. XX.X%, base a upcoming approximately ended year online occupancy properties in annualized We to rent over come we pipeline to Supporting and underscoring retail fell activity disruptions well-documented retail and constrained this bankruptcies exposure in retailer late development level headline operations portfolio of lowest starts for U.S. the across the Leasing and in closures negotiations. million at significant and quarter XXXX, leverage representing XX.X% InvenTrust the minimal first store occupancy has the to dynamic, early impressive $X.X XXXX. centers. expect strip the remain since economic maintain the spread, some our basis several XXXX despite

pay also we and growth. issued acquisition flow to quite growth million off This Due expanded take leasing pipeline rate you while acquisition compelling is an retention the rate the the free mix recipe opportunities, a backdrop a relatively cash expensive AFFO for occupancy, with accretive high the tenants, high-quality our coupled existing variable accelerate all-time built-in our favorable high promising. 'XX, accelerated and consideration meaningfully to and opportunity If in of activity to of into fall early $XXX and capital debt. of approximately summer the of equity markets late taking

a fourth XX,XXX for Foods. foot a X Mill the added market quarter, Creek, at In we acquired by market square high-quality a center Charleston, anchored In an high-performing we InvenTrust, assets. Lowes new

also square open-air strong high-performing acquired lifestyle a and mix center We featuring Nexton of XXX,XXX Square, restaurants retailers. local foot

as In XX% to a our Forum, center mentioned Fort Census, occupancy, U.S. Target. cities Myers, according foot shadow in secured U.S. one anchored of the with square The the fastest-growing XXX,XXX the by October, In for disposed we call properties And $XXX for Stonehenge opportunistically our market Village. grew off million. presence with in and X in properties the million we for we X $XX last total acquired Richmond 'XX, on

As strategy and into continue our for even are holds we on highly InvenTrust. XXXX, we in believe to confident executing promise ability move future greater the our

financial for We expectations turn on our review creating property call focused will portfolio leveraging established value I'll now the operational through results remain discuss to to platform. and XXXX. our and optimization, acquisitions, our in-place Mike for detailed excellence of Mike? a over

Michael Phillips

as by XXXX. represents same-property NOI base XXXX rent, basis The XXX XXX points basis InvenTrust embedded DJ. out million, rent was growing year-over-year a and This our of consecutive our to increase $XXX.X perform over exceeding NOI primarily our X% same-property fourth Thanks, portfolio with points on bumps. reached high strong growth note in year at results. X%. a reflected level to company's The attributed driven as continued team closed full year in

from deemed expense contributed XX basis with points. adding collections revenues basis approximately net uncollectible reimbursement Additionally, XXX better points,

In of compared the NOI same-property X.X% grew XXXX. fourth to quarter, QX

of shape, XXXX. share execute by per acquisitions The year, the $XXX.X rose by $X.XX expense. InvenTrust balance flexibility was an FFO remains over debt diluted excellent FFO and and to per needed offset in providing X.X% Growth primarily For interest sheet $X.XX the and slightly driven our NOI, year-over-year. strategy. liquidity NAREIT full million growth totaled with Core increase or reflecting share, G&A same-property long-term to X.X%

at X.Xx to a on XX-month EBITDA ratio net basis. InvenTrust adjusted with leverage net XX% year-end, our At stood at trailing debt

structure is Our entire fixed. debt now XXX%

with rate a Our X.X years. weighted average maturity of average X% weighted interest was

Finally, of reflected be approved Directors increase of in for new dividend the the in an April company's will of dividend X% cash $X.XX the annualized payment. XXXX. The Board rate

guidance. Moving to

We performance forward our momentum the expect carry into new year. to

year full in XX in debt range to the X.X%, NOI Our a total guidance for revenue. basis to year. we same-property X.X% levels ordinary bad tenant any bankruptcy XXX as reserve as of points well debt reserve bad the of incorporating of recent is growth This given accounts expect assumptions

are providing in increase For representing range of $X.XX $X.XX over per NAREIT X.X% the we XXXX. FFO, the midpoint a share to guidance at

to over guidance per $X.XX year. FFO core increase a reflecting is share, the X.X% midpoint $X.XX Our last at

that, acquisitions acquisition are I'll is our the yesterday. assumption for available over million net to XXXX. dispositions, discuss our supplemental Further details turn expectations and to our $XXX our And filed on in for disclosure With guidance Christy call portfolio assumptions activity. with Christy?

Christy David

InvenTrust positioned growth Thanks, to and targets. Mike. well remain near- We that is achieve long-term confident

end necessity-based of assets in these achieved we assets, occupancy of strengthens our our a listing our point our This high recognize remain portfolio XX.X%, flow our the of XXXX, stood year retail and refining total experienced role leasing Belt Sun last to deliver matching enhancing the across appeal leasing teams value Sun by above-average of our merchandising to management By maximizing Our leased optimizing vital grocery-anchored results. all-time markets. a dynamic retail focused by the XX.X%. additional in rents, cash We the and leverage our portfolio property With centers XXXX, XX.X%, to our at of XXX NOI on quarter. occupancy supported lease we play exceptional and center. thriving strong occupancy the highlighting the the foot basis brings continued Anchor traffic and portfolio. time increase, quality driving achieved coming at from mix tenants of our our centers. space XX% Belt At ended

unprecedented our totaling occupancy Small an especially at the leases category. XXX to shop team we levels, X.X feet. In all-time small Even committed occupancy, for remains million high XX.X%, square further at our XXXX, increasing leased leasing also in shop signed portfolio. finished these quarter

Eatery Farms. Notable include Snooze, the tenants A.M. in quarter signed an Mendocino fourth and SKECHERS,

sales that renewal believe of essential creating right for curating both local regional and the spreads tenant new Beyond mix dynamic and leasing occupancy, a simply drives growth national, and increasing to that leases. environment we retailers maximizes

combination the atmosphere necessity-based of rents. increase prosper, cultivate per total portfolio InvenTrust success assembling ended their of where $XX.XX while square an fueling retailers for best an tenants enhancing each ABR to to at X% XXXX. grow market, we XXXX can strategically By ability reflecting compared foot, our

spreads at lease year, XX.X% leasing new and renewals XX.X%. blended spreads at with we For XX.X% the delivered comparable of

downtime Our retention economics, element of key tenant improvement high costs. portfolio. better rate translates XXXX, in retention and dynamic remains stood significantly lowering tenant to our a reducing This XX% at

growth. NOI in of escalators we Additionally, of higher supporting embedded rent have our XX% renewals long-term X% successfully or

retail we briefly recent retail. part bankruptcies. following store year closing InvenTrust, this are view Disruption Moving the of store closures the and cycle to expected. I want the new to of news. as and and At predictable natural life address

store below historical normalized While the be to returning compared few years. may they averages, last levels remain more to closures

X Party approximately City of contribute As Austin, X reminder, collectively ABR. has locations our portfolio and a in location Jo-Ann that XX Texas points basis

The We Container Lots Big Store. exposure have to or no

are and traffic these long-term in still or many guidance. rent earlier, headlines, mentioned presents distressed assumed targets for remain remains fully for opportunity high-quality growth our is their increasing drive opening to our our retail our accounted locations sales demand and generate. an markets, retailers space mix. further expected Supply recognizing portfolio space are Mike disruptions enhance that vacancies tenant We the these any As within and confident store Despite we from in recapture any retailers strong. can growth constrained

all in truly want the at loss unaffected. Before moment this employees California. our properties acknowledge remain heartbreaking. wildfires and destruction to are The take time, a to Southern concluding, widespread I and Thankfully, are devastating safe, InvenTrust

concludes support the prepared We InvenTrust needed. situation is wherever and monitor communities to continue it closely is and to you Operator, line open our for can that provide to the remarks, our ready tenants questions. and

Operator

[Operator Instructions]

comes Our Dori Kesten question Wells with first Fargo. from

Dori Kesten

the acquisitions said be Is you're close assume meant likely the closing? in you've trajectory guess an million bit this figure dispositions? what year, net of to does I $XXX acceleration what about investment to a on seems it conservative. this Based previously

Daniel Busch

It's a great question.

continue message really think past, a The year. over about initial pace to our what acquisition said this acceleration thinking dependent acquirer being cost to the that net that think capital. when our is are we're trying the we on and in XXXX, course guidance, we're really we when of going the of of So about I is we've

You did mention dispositions.

kind probably portfolio going our pricing think are most in California endeavor our We comes we've XXXX been depending proceeds a attractive on in. those been through We of of properties of excited capital our a with redeploy is kind California in some more of recycling other the when capital more and into in. recently of to cost we've bit use that some markets active about, little or those

$XXX So on to within markets. that California gross that million, the expect in activity of be materially disposition the success depending you our number our than can higher

Dori Kesten

Okay. rate, the this low for year. measure And 'XX. think, then that teens your would about you through related, were talk this of spreads able in year, retention XX% XX%, up expectations this achieve kind to you year Can from somewhat re-leasing then you to XX% your be last in to And 'XX? was expect I comparable

Daniel Busch

relates the a more than and just 'XX only for us may bit The push of Yes. think while and expecting beyond, and a Other probably to expecting kind and rate costs a we and as little is than Jo-Ann we exit is higher XX% to have lower of probability little XX% from a we're XXXX that capital standpoint. us the year Maybe Fabrics. what of on in this touch retention allows what have because then to retention the when low. color we're Christy so then quickly -- we bogey I'll City about also on a Party keeping give it known that, spreads I'll spread rate

Christy David

run current the team similar leasing follow seen I up -- past that Dori, leasing I we run the with and think at you've is that to that mean, deliver focused into on our rate. be able year that XXXX respect I'll continuing should price, and the over rate just say on should to that

Operator

now We America. Jeff turn of to Spector Bank with

Jeffrey Spector

'XX. great a on congratulations and Great,

about to how sheet? guess mean the What faster? thinking the and of around I your and under-leveraged. balance the California. even are best comments capital, thinking about of balance you dispositions Just discussion your that the I using sheet are about some you use grow

Daniel Busch

at our coming So the capital most it's off opportunistic cost Jeff, to Obviously, year, comment. transparency found to importantly, equity the was ability year. recipe same just on of a as the quick acquire visibility to but the show market. which -- the But raise equity we're that great what time, be planning use we it last relates both our pretty proceeds and to and quickly that's to accretively those this and go using and

Now decision private. for as to relates as retail California can we InvenTrust. strategic mean It's appreciate, have our for a both California phenomenal is center core California most and it shopping a you public property, portfolio. REITs, I

to cost little spread or and we and properties that We presents be have we capital an lever opportunity and up capacity those did markets very, because year. we set over the are opportunities on some to if with use -- our just after debt that core to balance sheet time. sheet. to of a given back balance found cost were of are position in that, be look in probably of equity more recycling on do the as in we can last the very attractive saw the that of we'll that the go what that But -- in make that high-quality have capital if markets a And nice where wouldn't you opportunity us half otherwise able is that the going itself other of get to our we we trophy

Jeffrey Spector

grocery-anchored IVT then conversation, how buy lot let's And sellers, centers. owners say, the do there's aggressive, the has changing to to you Okay. Sun I has as like or Fair. Like ability that acquisitions, gotten this a is with say, profile let's Belt think changed, say, versus competition company do that more or assume of on deals let's the others?

Daniel Busch

great a it's question. No,

because where what kind we've that's I between. And and an think comfortable in feel to reason some the of but deals, think I I cost more be multiple say our competitive both in recipe an obviously would try the it think opportunistic, and to competitive aggressive to program active. our we extremely the is then say, is, recycling I of success, of as a successful contemplate course of been capital that's where we confident been appropriately and we year. fully why of I is successful both environment. we have all the on-marketed off-marketed and markets and And it for to in our about been our us our ability seen with would capital, continuing and energy look, invest ability that everything think be environment I over our is, deals think you've

Jeffrey Spector

NOI to leasing Okay. just And same-store guess, let's spreads then range just or you assume on end, it continue X.X%. occupancy of X.X% to high at the move is you're confirm the Or bps. higher say, say, NOI? to the same-store that stronger assuming, bad to say? I there is if are is end, the of point even say out to bottom else versus that range on let's bps the reserve, towards anything debt the more XXX let's the that X,XXX to fair safe Is

Michael Phillips

Yes. Mike. This is

the kind top and the with you've lease it the really lease move just range on but an got of in getting year income bottom, what uncollectible I uncollectible kind be from is it to tenants then can would operating the debt driver bad big of the income. time, think throughout

Operator

Instructions] [Operator

with Jefferies. now Linda Tsai turn We to

Linda Yu Tsai

what And California rate What buyers? kind your those potential the assets? is are appetite the for you Who like apply to centers? cap of

Daniel Busch

funds. extremely market. I thing a international has that's the competitive always I California is public, dynamics smaller of good larger certainly of question, then good and Linda. of California the bad a this and about it's it's of private, that because some mean Yes, canvas would buyers, wide had say sovereign

X several sold market been California with we'll We're assets yet, The and we far, last very, very asset currently. strong year. those. thus has executed or in but demand signed So watch nothing

The we accretively. don't we have California important if can anything thing note to feel to in proceeds we is don't sell those redeploy like

or kind most with the is would because as InvenTrust. the not pace isn't to have satisfied cash buy that accelerate we thing forward or set we're of we important the slow price the hope, flow for we're where moving robust accordingly that on as So if the side opportunity ability

too to and be too pricing spread. positive at in, be expecting But where pricing to comment I earlier, more it's been allow relates kind come -- it of we're it early to to active that say looks like. us on As would pricing, that it is early to markets would appropriately what trophy -- the -- would said aggressive we've I on like in a where properties goal

Linda Yu Tsai

acquisitions, second opportunities recent question your mark-to-market then in think for assets? the my those And about how you do is

Daniel Busch

that mean, and a portfolio of profile Sun rents to I in context thing are look, I market that. is growth our No. the current that one give about Belt our love think you little the we outpacing maybe

instance, date, quarter, -- they renegotiate we we we'll tenants that where in an lease, between, For which would period, in recent XXXX, rent in the and miss given high missed we've quarter about case case notice -- tenants their get most they I option in digits. it, any the have XX think the So single an right? to call had probably increase in option, had which have in

to say. of opposed good to in that we if driven We And our to occupancy like that as at It upside, there XX% our even acquisitions still buy tend below in acquisitions for significant we the rate type able just flow it's what us of spot. in I to a or to well. of it any market would new that cash as slowdown value-add we a The we're in feel -- look economy, And that's -- renegotiate is gives sustainable a confidence were most market allows closer we're the spread. build rents perpetually in those us many portfolio. model

Operator

We now Floris to Compass with Point. Van turn Dijkum

Floris Gerbrand van Dijkum

Interesting, either. in last that your guidance that missed XX normal? in And Presumably, not budget. their Does quarter seem not option it's not tenants periods. was your --

Daniel Busch

Yes, year. me for Floris, XX let clarify, tenants the it was

when it us much, tenants happens. a But date. you throughout that about the is it of be So but year, think forecast their it option missing subset very the not when all it's to a nice surprise for would activities hard

to do rents to you does market where option. lower you If to it's the due but are certainly on people give were it the an of resigning indication where relative end, are percentage,

Floris Gerbrand van Dijkum

higher think talk active the of before buyers you private you're heavily lot that's really than bit rates thing, like where little assets my of a had traffic markets in obviously, are of one where is the should town the more on trafficked. I Southern there. acquisitions, lot and pool the the heavily bigger other find are if is that So returns you've I assets about The markets well. got interesting prompted little a the more not the Charleston new only that playing now Houston, -- like that and rates a means on REITs as the right Presumably, a see Maybe of the question another. REIT X which Tampa, opportunities cap Richmond, mentioned you that as getting Charleston, which and you option missing can bit and like of that things in you're the be -- those and cap I

Daniel Busch

markets canvassing in Asheville, market, to equally larger more like would and around in Charleston, like tends markets yes. it's are a that we have right? it's as Knoxville, markets basis, operate. say, be a we which anchored InvenTrust cities -- -- complement have larger be attractive Floris. And So would those some think good actually can complementary efficient observation, the we risk-adjusted the very time that's great I me, these the to to those or a certainly, spent portfolio, markets. cities, like the of end. already Nashville which No, On markets a are -- Richmond, very But we Charleston even be excuse in on or

being But own more Now Austin, assets. much I criteria but right? not sure in only the own we get We're XX can that retail there markets. assets yet. want in may to assets. markets core smaller we will tell X, of is point those we can Houston, these X you markets, or top the the in or to In centers make In in we stringent, XX they X, are those

bit markets be more So we've can are but that higher, I the we've is to compelling little in larger ones if where, point, the and more think bit your the returns not risk-adjusted equally competitive. bar of some a or identified a seen than little what those

Floris Gerbrand van Dijkum

XXX be or risk-adjusted to are points XX And higher? returns, rates basis the the would cap -- they

Daniel Busch

former those in would I mean, -- markets growth are I great -- nice say some profile. assets the there with quality

to and perspective. So look still to initial buying mid-Xs at still are in anywhere yields but has that to unlevered the on going the low that be the we Xs, make tends to return in from everything we're be sense,

Floris Gerbrand van Dijkum

And I quarter. equity, maybe, your here, you question to last equity last -- of apologize up wanted question, a I cost my my little of but bit I raised if I'm using mean,

Your sort as you a stock your trade -- balance how you know good but sheet is, has pretty -- consensus NAV. a of continues to where it have do at I you thinking maybe equity on talk that. of deals the those you or transactions some about not if why raise that and more your to presumably, you're fund markets, like scouring see

Daniel Busch

contract under set has proceeds. of of an or use immediate well, and was doing good -- and value equity back precious, year what at had No, last and right accretive want to doing we we that were so -- contract is shareholders. think very the pipeline, to current obviously, we're a very, that the in for it and is And point. I very close anything sure our had opportunity the the as deals we're But we're fortuitous And it both is half under make it's to it's that's prospective time. match

cash capital perfectly our continues faster accretive and proceeds an got and platform going because put that. we use do whole grow I'm platform be this that for has matched opportunities options we're cost within is leverage to the to like get it sure absolutely goal the and use we faster Now those make be uses that in attractive or other to of not manner find to that. But than can saying to to sector, to equity can flow more But if attractive capital. our we've

Operator

to with turn Street. now Green Rojas Paulina We

Paulina Rojas Schmidt

Square I compares you unincurred an like interesting center. the a a rate. relative of grocery-anchored growth property, in pricing property and about basis the do terms traditional an us closer to find Nexton with well? lifestyle And to a this as how think Help center for cap risk profile on a

Daniel Busch

great are questions. These

This spaces. And of absolutely reason right. You're It more large lifestyle have add box grocer I'd of or traditional is type a center. unincurred. the any doesn't it's

options growing and very, that this continue very in-place rent quickly. but us. of is relates you market Nexton, some is is some sort serve a And imagine we serving to that, local to the shadow What of as made the that we market market have it up retail dining things near which own but attractive like -- certainly, the attractive -- which at the to they components. grocer So market this is Summerville, in -- tend when we things will particular has. this, that the options very asset found can look the to it is and asset was And or to box market us lot market

in and but many a with and great for we've strategy necessity-based, InvenTrust strategy, I because This we grocery centers discussed format-agnostic it's retail past, food risk-adjusted think is you grocer, the there profile -- say. our really sort a we asset Obviously, the you not complement of should if is anchors or a specific different I when some portfolio remove but we risk towards are strategy attractive. a return's an mostly market-driven asset-specific find

see you do could a like things us So Square. Nexton

we some little we you that Forum, but see to which very can in tends as The a more bit And really, really like it's those got have and a with well. box, things comfortable like, rents us do market

fill these portfolio centers, anchor nice different to complement and always that with going are nicely. we're necessity-based those profiles complements the I but and risk So think growth profiles to out

Paulina Rojas Schmidt

pricing, terms a is cap compares of this something rate like In that high-quality to the how grocery-anchored. for traditional

Daniel Busch

that. a it between let's cap the of grocery-anchored would us And But core between. about center, on think think say are where was going and move size be attractive would somewhere these you the well, can end you rents. kind what returns, low with XXX,XXX centers and aside, of obviously, -- put risk-adjusted of in and you rate -- -- I falling current underwritten obviously we when lifestyle some got feet, smaller so is of And that's the fall. I then of it comfortable which mix center, the kind mention, the when in it a types will as on but so the of or in-place rents would square to tenant consider power to you

Operator

further to any final Busch now hand back remarks. DJ have I'll questions. We no for

Daniel Busch

the come. and to to week. months the joining questions all the the forward of us you Thank seeing today. Enjoy for many for We to you of look in rest

Operator

your now Ladies We'd and gentlemen, today's you thank like to for concluded. participation. call has

lines. disconnect now may your You

InvenTrust Properties (IVT) 12 Feb 252024 Q4 Earnings call transcript