CTO - Earnings call transcript Q1 2024 | CTO Realty Growth, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the CTO Q1 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your speaker for today, Lisa Vorakoun. Please go ahead.

Lisa Vorakoun

thank Growth joining Results First and the today Conference everyone, Realty CTO Quarter morning, you us for for Call. Good XXXX Operating Albright. today me is CEO President, With our John and

results everyone we Before in matters these risks that are we no discussed forward-looking differ federal duty to these future in update expectations could company's disclosed under materially XX-Q to forward-looking laws. undertake Form statements like significantly results actual begin, are to may considered statements. Factors many our differ comments I'd of today The from actual filings. and securities Form that time cause and other in statements the to remind from from XX-K, SEC and time greater company's detail the

our supplemental investor release, find can and at earnings reports, on presentation SEC recent ctoreit.com. website our most You

to now for John his it prepared turn And I'll over remarks.

John Albright

of Today, search provide CFO and leasing front candidates. our recent to a our assist transactions. new former like We've continued his us. off wish national started Thanks, in by you for company. opportunity. results, our with interviewing brief Lisa. seeing joining us identifying have discuss him our quarter a in the firm in our overview Matt the engaged everyone, we're thank We first well Good his we'll to start and strength contributions to CFO, new I'd been Partridge, and morning, thanking many for highlight

There and in activity past We feet square leasing of of over widespread foot. feet included our was extensions is of in Creek X successful fitness replacement lease the meaningfully with foot given Carolina. place XXX,XXX Starting of operator. Apex, the business. quarter. a tenant regional mid-XXXX. The is $XX.XX for months. tentatively new well-known options yet Regal. leases, with is quarter We at reduced rent under in operating signed than of the rent at renewals, Regal leasing Cinemas lease, North new over activity at open a XX,XXX existing That's in successful Regal rent leasing fitness had the of operator business per the XXX,XXX first average Crossings another and to Beaver of signing The the square square higher relatively The square the bankruptcy activity associated an with scheduled

and rents in the larger Comparable replacement versus same-store Regal includes activity push the at new late expiring under so impressive stood on this XXXX of help anticipate base tenant. when an growth rent cash more XX%, significant benefit we XXXX, rents some in acquired will impact even signed of We a commencement of get which in NOI the our vacancy. leases full

leasing pickup X% activity, X.X% our cash a quarter pipeline quarter over XXXX. X.X% strong with increase our year-end end base flow but now existing signed prospective and recent occupancy, our represents not XX.X% increase Given occupancy from finishing We at of of open rents. of the in ended

from lease XXXX XX.X%. our by increased X% occupancy Additionally, year-end to

Exchange at the for in Georgia, We the grocery-anchored million. Gwinnett $X.X property our the investments to acquired within Turning Buford, Sprouts quarter. for final

Petco, Old Less, is Orlando. World anchored Market, marketplace retail property by Ross multi-tenanted just March, located million. for Dress Below. $XX.X Navy, The XXX,XXX XX square power for center Five Burlington, Center along in over submarket in feet a Orlando, purchased Florida Sanford downtown Marshalls, announced is acres leased as Additionally, I-X the we The Seminole XX Beauty and Ulta is XX% of northeast of Towne miles on over and

cash now over of in markets, our into X base top Florida this the with rent. our has representing the years Orlando cash-based With Metroplex, over X% in-place X moved has annual over which states past few seen And acquisition, our tremendous rent. our growth top XX% is of

million $XX originated a XX%, first during fixed retail which mortgage million rate interest Florida, $X.X first Beach, West funded of on of at loan we in Additionally, was development Palm the a quarter.

the X.X% of exit property a mixed-use pleased Mexico disposition of million Santa cap Fe, $XX at New front, an complete to our rate for million. and in On the we sale $X.X are of gain

company selling From million a will stock for over proceeds opportunities. continue to of we quarter perspective, capital recycling redeployment end, X.X noncore investment X.XX% After our preferred of into $XX shares million. prioritize assets for smaller attractive just net the issued

This debt from $XX our of proceeds of our million rate to limited center retail we with net prepayment buyer very credit able the end. floating quarter the the facility under subsequent down ample liquidity format we Pavilion in a early this what believe loan, environment With and competition. favorable acquisitions seller-financing all the gives Sabal us pay issuance to were to pursue larger is

like the Lisa. I'd that, to With back over hand to call

Lisa Vorakoun

Thanks, John.

space The markets. portfolio located and our Orlando As markets states feet in property X X.X portfolio end Richmond, comprised income of approximately XX the of as of geographic our the includes consisted top-performing Jacksonville. million square and of quarter, such XX rentable Dallas, of of makeup Atlanta, properties

in these have population and delivering value demonstrated underlying potential markets tenants outstanding mentioned of employment for the expansion, bodes which and we've extensive the As are our properties. well for past, growth and our

such Publix. top Restaurants Ross, our Sporting Dick's and of From Buy, Foods, a consist tenant Maxx, Best tenants Whole operators makeup as retail T.J. Darden Goods, perspective, well-known

tenant benefit and grocery John supply. leased continue power the The anchored, from retail of occupancy these those and was overarching assets. As outsized from from and coming fundamentals center are limited mixed-use estate lifestyle for and was real coming our properties rents and cash-based our demand and quarter annualized XX% to strong, at rents XX%, majority mentioned, end, properties, XX% of previously portfolio's occupancy with

the results Jumping for into quarter. our earnings

expectations core compared of share, for first quarter first the to per in share increase at of exceeded quarter XXXX coming XXXX. with earnings the representing Our FFO per a XX% $X.XX

was XXXX $X.XX XX% of a over quarter share, first representing quarter First AFFO per increase XXXX. the

XXXX quarter Plaza included the Center and Marketplace at as dispositions Seminole Equinet of partial the same compared Exchange at XXXX our the impact benefited First by a quarter in to second and of which first AFFO Rockwell core at from quarter's Towne period. the out quarter full asset FFO as XXXX impact acquisition, quarter parcels offset well as of

and FFO commencements several at also Core from AFFO properties. rent benefited

XXXX at XXXX CAM benefits our NOI anticipate reconciliation certain first We Our increase several same-property Forsyth during to Broad West XXXX X% as as was results, will compared largely to of the by growth rents onetime well several percentage same-property XXXX, and at to increased do lease-up first of properties. included finalizing including due quarter collection which of to in remainder the the billing. quarter our normalize related due NOI properties, the primarily our Village increased

and distributed As dividend attractive we yield resulting QX we in share regular first ratio X.X%. February, cash in payout a announced approximately of quarter annualized of per XX% a of AFFO current an XXXX $X.XX

Turning balance to our sheet.

of million. As net $XXX Net and just end was outstanding value was the of debt-to-EBITDA our to was quarter, total over enterprise X.Xx. the total long-term debt our debt XX%

While balance, we have ended on of as debt in debt and the our floating and to quarter able on floating down earlier, $XX and $XX.X pay outstanding John mentioned cash were cash our of with no rate million we the revolver. April, rate restricted nearly had currently revolving revolver we total million credit facility,

$XXX,XXX quarter, common share. nearly of $XX.XX the shares at during average we first the XX,XXX capital per the of our in On an front, stock for open repurchased markets price approximately market

our into issued over our the share. million program earnings year also XXX,XXX an yesterday, stock we per as finally, proceeds of of go-forward XXXX total quarter results full for release ATM a account net price expectations. through FFO common take AFFO We part earnings of average to and at first increased issuance and core $X.X shares guidance $XX.XX our And of

AFFO both by increased Our per XXXX core share. FFO and guidance $X.XX

to million year. our for of the $XX a million disposition We $XX the balance also to reduced range guidance of

that, turn the with questions the And and up to to answers. call back the line for I'll operator open

Operator

today question Global [Operator from Instructions] Gaurav coming from Mehta Partners. And Alliance will be our first

Gaurav Mehta

wanted on on And on maybe in color ask your I Orlando value-add more rent opportunities upside? that any Hoping some mark-to-market get the acquisition. property? to color to some you

John Albright

Yes. Thanks very much.

there And leases what really we a to is some think the square that liked there's roughly feet market. value able below about leased below-market fairly So lot not then add It's there. that XX,XXX a will lot vacancy have stabilized. XX,XXX get there's opportunity, of was of up. to some But be we

even drive some so to future as stabilized growth. very NOI it's though as And far opportunity is some our there occupancy,

Gaurav Mehta

Okay.

Second question why hoping on on lower. And was was that disposition guidance your more some that to color lowered. get

John Albright

some some be assets Yes. we feel certainly side. patient acquisition we don't I want If some we an to we on but to had -- want we larger acquisition, lined sell to would through mean sell to sell move where up, assets. the pressed want

push there's dispositions. through preferred the raise we need so And after to of kind one like real -- kind of doing some

Operator

Our from Montgomery of next Janney Stevenson coming will question Scott. be Rob

Robert Stevenson

theme at at this is looking thinking of be on later? you just we asset How dispositions. point? the about year? incremental point? that like this something transact on guess should this I 'XX that think John, will of Is Or more update Any continuing or it office a the guys on remaining your thinking that

John Albright

Yes. -- is the other the We're to talking their is that and bind be but have year. doesn't things tenant, really I with this working like it mean, in they're for rush. tenant I no don't on. uses, feel facility The going they it's

to when to as kind us. with discussions be as kind we're queue around need So not they -- of we're get can in of the far

unless not you really need see better to positions time acquisition better because with we love transact large again, we getting and the going a the in out what's on only a you take in feel going We're hurry So property with we're that to have time. be to like area, once there like on. able some to that. I'd

bordeaux like a you in nervous a I rightfully this really bottle have seller. a kind through need like obviously moved really exposure. why one, lot only nice you it's we better. about of So to But know people office. getting And of don't that's feel get It's fast. of lot the

Robert Stevenson

the not the with the 'XX in this pop-up financial the vacancy occupancy portion in really portfolio. the 'XX? rent? When Is do biggest and Okay. mostly -- And impact paying then numbers all start in then in leases open it is year bulk your of lease about I comments, late prepared yet in those start commence in but also you'll you of in that line? the talked and seeing think rental actually Or the that that

John Albright

the this It's back of half year. mostly Yes.

replacement a of the love really the one coming really to So XXXX that's the of But back year lot the that probably this rest is but going signed revenue mid-XXXX. forward, not open is get half of the the Regal, year. especially of the on is

Robert Stevenson

any note to at this next on move-outs then Okay. known any XX of coin, of XX the point months? that the -- And other side over

John Albright

for up all issues. incentives No. the But so light. any far, keep It's -- we on having green

Robert Stevenson

And room How at should right to liking? able the thinking isn't stack? preferreds is the still last do preferred one you After for then are cap of deal, Okay. price that's to sort going we where be now in that at the this use maxed a for forward? structure out and how your of your that there me. common incremental think you you on point about preferred? Is fits that about capital to be if thinking Do

John Albright

in Yes. did we the has be size amount. And is thing noticed, qualified preferred index. the gone it's and like ripped the feel what I as preferred one mean -- you out the And to appropriate necessary just probably into we volume. I'd for and the index price did point we

in give into future. the of preferred if on So rest to that's here of the we probably acquisitions, productive nice until the out we capital capital tailwind the going kind a won't of cost structure. get But us balancing lean of some

Operator

from [Operator of will be Raymond Instructions] next Our question James. coming R.J. Milligan

R.J. Milligan

percentage I'm clarify, tenant, not same-store for ups? single Or to CAM is Or NOI big I catch if it, that is growth missed that both? rents? just First, the it in but sure is

John Albright

answer going I'm to let R.J.. Yes, Lisa that,

Lisa Vorakoun

yes. R.J.,

as vacant XXXX. bought have Daytona XXXX. what back of of really that side on kind in in Beach of that is our and we we QX in bought rents properties the board came is So We the on single those tenant

there you're rents of seeing about is what of there year. was none So in in QX XXXX $XXX,XXX QX when last

there. So that's the about increase XX% XX% of

R.J. Milligan

And sellers I'm in environment. higher some there's expectations. helpful. maybe in John, a rate little could interest adjustment seeing Obviously, seller longer bit you the what you're on out curious environment. That's elaborate just of acquisition this terms there just been then, for more and

John Albright

Yes.

plenty So good of the seeing we're news opportunities. is

an it's where there. all-cash And buyer buyer, that of But so the financing. are patient and we're really side, value. appropriately buyers out kind But a there's needing being clearly bidding lot other we given for on we're finding we're of there think the competition seeing

they the buyer a a just the really sellers an subject do which all-cash take financing, to typically analysis. kind lower want want certainty higher to through is of that more go or financing, us So than with Do with to price. who needs a they buyer going risk it's that at they buyer go

And really good for for it's waiting opportunities so those us.

good news out there. there's of the opportunity So is plenty

sellers sort part to to it's the these it was sell, sale partners market really queues think basically I So whether or time their due, thing. coming just now, are in for if redemption plan properties financing the they're whether of own and there's that's there's funds that of -- looking

trying be just patient. So and it's good a to environment, we're

R.J. Milligan

we're tenure just we more there's environment where rates rates? down it said, the to a be down transactions? think just is come Or the add John, lower sidelines. I'm in interest so interest there's to rates? to stay of this what and it later, Because curious lot going sellers Is obviously, to rate that, seeing on are interest morning, stability come going you going that who the think been to is we're

is for more are I'm or just stability looking So general? you curious, in for lower it just -- rates

John Albright

from in If in think the or side, I are waiting. market sell the the to months so. not they now, X sell next need really people they're

cuts I I that kind general some question as and think far with in your knowing the going that stability to as be future. there, rate there's of think

off the going you're see sideline. come to more buyers think I

going good to not transactions all some for good. while of the trying that's we're getting But to get so And be is us. kind

surprised are are we at the So transactions that to tenure. see happen rates some slightly cap just above

that like ever But their it's math of some model. buyers in that so just And there does fits work. how kind are

interest of I of in the rates stability trick. kind does think So really kind is any

Operator

from Erdner coming of And our is JonesTrading. next Matthew question

Matthew Erdner

in little Or difference of and loans can half -- acquisitions? kind term? you're happen Could acquisition seeing more that just then you talk the a the talk bit timing? about Should back is the also overall it that between opportunities And so about to we expect near you asset ended? in

John Albright

Yes.

that we felt year. winner, are would So some half the in half the weren't We the of are first certainly kind some but help the something back hoping out. year, buyers loans, more the of acquisitions need of that didn't financing work With were have the be there to to there acquisitions we would on regards and like side.

I it offered really are value we've little we're heavy a we'll lot property lift. of so as but there -- a there So great up, sort far, no hopeful of some opportunity But add, basis think takers. have that some

structure, gap buyers, not hope these the capital be to a financing going fill. market the in and is will it productive So for pretty big very which be we to

Operator

be Riley And our Securities. coming B. Massocca next will question of John from

John Massocca

the Regal on quickly of kind Just old box.

how Regal's rents, paying. do pre-bankruptcy? what I guess -- mentioned kind You compare is they maybe those of rents versus higher the are Regal to

John Albright

Yes.

from previous basically rent. digits pre-bankruptcy, up it's So percentage their double

John Massocca

helpful. purchase investment loan Lake in options other place. any the put loan or property then drawdown? the of income or And on of the Very the any pieces that to and loan kind moving kind Worth there of that interest you obviously, just Are besides to kind Okay.

John Albright

certain level. certain a right a rates above are There's do have definitely, of if first cap Yes. refusal we

level to of do we So the to yields interest have if get acquire the right us. a to

John Massocca

very of Okay. detail last kind of And helpful. question. That's -- quick kind then

year? to that in given disposition just that? Sabal? occurred think the last of I kind transaction Or we mean, included loan As guidance, seller repayment is the about Or excluded

John Albright

does include it that. Yes, not

Operator

This session. concludes you. our Thank Q&A

for Thank you all concludes the joining. meeting this well, for today. As

may You disconnect.

CTO Realty Growth (CTO) 3 May 242024 Q1 Earnings call transcript