CTO - Earnings call transcript Q3 2024 | CTO Realty Growth, Inc.

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Operator

Good day, and thank you for standing by. Welcome to CTO Realty Growth's Third Quarter 2024 Earnings Call. [Operator Instructions]. Please be advised today's conference is being recorded.

I would now like to hand the conference over to your host today, John Albright, President and CEO. ahead. go Please

John Albright

Chief and the everyone, Results for us Mays, joining Call. Good Realty thank Growth for our Phil by CTO joined Operating Officer. Third today I'm morning, today you Financial Quarter Conference XXXX

to Before a to Phil? customary it call. provide today's Phil we regarding turn begin, I'll over disclosure

Philip Mays

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

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

the John. will that, over call With I turn to

John Albright

Phil. quarter, for Thanks, areas shopping In including yield million report business. X.X%, quarter portfolio strong X-property North million our of across another the significant of on accomplishments centers invested a with located weighted all $XXX.X $XXX.X at and average pleased of in Carolina a we I'm to Florida.

front, XXX,XXX to rent rent $XX.XX activity foot. per of at XXX,XXX On square bringing and average an year-to-date $XX.XX feet feet we leasing of than leasing signed more square an renewals square the at of new per extensions leases, square our average foot

Ashford Lane. at Collection feet Fare from Legacy increase Forsyth XX.X%, former The months Plaza, included WeWork With third former the an Price quarter with basis the first XX% facility the Pickler, of spreads XX% Anchor at lease at third of square of we approximately of leased and activity, in Noble, at and Barnes new included The Earth a & the the X Club leasing social high-end were Legacy. XXX feet the Shops Pickleball comparable ended XXXX. Notable to membership-only quarter. Ross of Our Michaels a quarter to The space replacing occupancy leases Collection XX,XXX and previous club renewals XX,XXX square at leased the this points the in

want Before topic pipeline our now current note of that the in leaving at leasing, future continues our I rents, X% not over $X.X to grow open just signed in-place million stands and of base cash rent. to

investments. to turning Now

they Combined aligned Village. shopping Millennia markets. for the mentioned Charlotte, are and our properties earlier, Carolina Brandon to over all X presence feet centers in open-air presence. These XXX,XXX including million, adds As we our with $XXX.X Pavilion strengthen square geographic Carolina Lake existing while grows these and Carolina investment centers our Orlando, strategy markets growth acquired as XX%. Brandon Pavilion, key Florida Crossing reach Crossing almost growing as Tampa, and our Millennia added our to portfolio, our by portfolio, market GLA Village North Florida expand our

publicly in entertainment listed of a million $XXX we August, over average located Inclusive mortgage station. Metrorail loan portfolio $XX $XX.X in is Silver originated for loan Herndon, rate In now we preferred adjacent weighted investment. company structured a with a of adding hospitality we dividend yield with X.X%. in XXX secured activity This both also acquisition by an almost million of a year-to-date and initial subsidiary years In feet property rate entitled acres to mixed-use of structured our of development of interest term a initial and X for over million XX%. X first square our this mortgage investment portfolio, XX%. Line our growing investments, grew and near totals the first a Dulles equity completed addition a quarter, investment to equity the property September, In investment also our and million Virginia preferred Airport

were raise that With we pleased were to able few activity, efficiently moments. investment capital this discuss that of amount we in Phil a will

Jordan in being located in Landing XXX% in Jordan, we the portfolio On and now resulting our Utah, West of front, the Southwest. disposition sold Southeast

With will Phil. over now that, I call hand the to

Philip Mays

John. balance I XXXX will this sheet. briefly Starting revised with Thanks, the full guidance. On strong discuss call, and balance earnings strengthened our sheet, year

with net X.X During a the of at share equity under ATM of of to disposition this our quarter, Jordan we million proceeds per program, needed shares of $XXX.X investment million Landing common capital These over $XX.XX $XXX activity share million. price of average generating issued weighted announced proceeds our $XX from along fund quarter. the proceeds stock of our approximately provided million XX%

The a were already entered closed into term loan. loan which credit that term we was this on for used funds our had out the $XXX million swaps. $XXX revolving new X-year outstanding from company facility, million to Additionally, SOFR

X.Xx total XX% to over $XXX term million and debt value loan last term was turn and quarter, to issuance Utilizing initial and permitted liquidity, of our enterprise support to $XXX continued Notably, growth. this We EBITDA strengthened these swaps, quarter of existing of both loan the SOFR lower providing sheet X.XX%. net X-year ended fixed the of us incrementally a than net balance thereby million improve full with equity leverage rate debt combined a to liquidity.

to $X.XX of AFFO. for $X.XX share Core to per to this growth FFO both the the the quarter reported diluted represents was $X.XX XXXX, approximately third per core for third AFFO results. XXXX. quarter and compared diluted reported in FFO the compared share of was X% in quarter $X.XX Moving quarter in financial

The of commence NOI growth paying Moreover, Plaza. pipeline continue company million continued new Lane, our Shops John among for by growth spread in growth signed-not-open NOI the the the quarter. This result Collection tenants portfolio, take and evident same-property primarily As was same-property is possession Forsyth, at the but momentum of growth will and to of Ashford to rent. Legacy at at and this X.X% momentum our our The driven leasing $X.X Price have add as positive discussed,

of a we with dividend, Regarding AFFO QX dividend common our we of regular past announce distributed our quarterly quarter. resulting fourth end practice for the per a in payout quarter will August, third the of towards XX%. as Consistent approximately in we share, November, cash ratio dividend $X.XX announced

Lastly, guidance. with to regard

balance in equity at pleased pricing investment at that and to our same-property are raise and our growing loan common same market We yields strengthening us attractive increase enables while time term activity NOI our growth guidance capitalization our sheet. attractive the

raising range are a end raising diluted low per core we outlook $X.XX and XXXX our $X.XX diluted from the earnings to The $X and per to share assumptions diluted range $X.XX release. from share AFFO are of $X.XX our of $X.XX to year range a new Accordingly, underlie per FFO per detailed our to to $X our $X.XX press full to that share of guidance in new diluted share.

are However, increased $XXX to $XXX year-to-date, I investments we investment our million new million. The a guidance to of guidance. investment million range increasing do closed want to again our note $XXX of

property reminder, As and a both investments. outlook investment structured acquisitions our includes

please that, With open for line the operator, questions.

Operator

Stevenson [Operator Our Instructions] first the Janney Rob from come line with question Scott. Montgomery will of

Robert Stevenson

able collateral hospitality about what's the wind XX% investment? not to the than being they pay what's years? the million $XX thing X if the over next other dividend, And up the attractive John,

John Albright

lost temporary that? can you connection. repeat Rob, We

Robert Stevenson

now? Okay. hear Do me you

John Albright

Yes, I can.

Robert Stevenson

Okay.

next at if $XX So hospitality million point? about years they is other the over dividend, collateral the pay investment XX% the the and can't X than what's attractive the some what thing

John Albright

CTO XX%. you as might a company the a Well, CFO it's that a there. as previous had had me rights on just and publicly quite of basically, CFO But have at raised capital traded bit offering the

Robert Stevenson

next about thinking won't thinking up through Okay. dispositions 'XX. close are And deals until just that? going ATM are about months? X that over the be the you're teeing are Phil early raised talked you How to guidance. Or there funding of portion more acquisition the funding Is equity issuance? of and you about How funded that the

John Albright

hoped are smaller our leverage we'll Well, few we a now that in use There it's past year. we see a an acquisition, mentioned, deals as we line. recycling we have the us much on won't investments that probably here in feel our to have, seen Phil spot we as haven't to we're liquidity while. level this the quite to obviously this that a monitor would that year, years. it the dependent a And great the in but you as capital finding obviously, But and close were but down like exceeded have markets

Robert Stevenson

to selling the you is are in how future? versus like of And you of thinking the office today remaining asset the terms versus into looking math that there? optimization sort about holding How

John Albright

Albuquerque. university offices, it the Yes. completion. that The plans asset you nearing it. time, the are incredible I and market missile Movie tenant in and needs housing the is environment range. an office experiencing needs they're about we're state It's mean near incredible is space, that, office that same future as monitoring It's their the near amount at Netflix utilizing an no there's the of one building and Studios space know. There's thinking

getting find the Fidelity on just for exit So right been we're to out point, utilize waiting long But we're but in to them, how situation. direction. it. has actually yes, But in going and everything your we a and question, waiting the to better answer we're kind some it better wants at term will of

Robert Stevenson

it FFO? online When then, to And the open does are comes that guys but $X.X leasing. -- in Phil, about it when is And you of of sort chunky? XXXX? Or start evenly spread is signed talked million have Okay. not the when hit that throughout

Philip Mays

Yes.

XX just kind of will up period, over to that X will online. wanted you come that how modeling months, purposes, ramping the it it ramp if next in up somewhere So ratably ratably time for approximate of kind to

Robert Stevenson

helpful. the at for And this note X in Any me. point of XXXX known That's right. in All last move-outs portfolio? then

John Albright

have that No. at tenants. are have strategic only and right, that and rents better tenants quality mean they is higher think can that the I we that of X and a already don't really renewal X wanted

that's a more is problem. opportunity. of nothing, Everything So an

Operator

come will Lucid from next Markets. Craig Capital of the question Our Kucera line with

Craig Kucera

guidance, and Obviously, Based be acquisition investments? the do but structured it it rest a the $XX properties, on all you like looks finance would yield like that could on million assumptions, other roughly quarter additional another year. looks to for million the at you pretty aggressive any of based looking $XX are

John Albright

assets. It's at very one. very but X And high of to looking smaller, our it's -- it actually it's quality. close are We

love such be don't would will would then but that's lower it high a targeting. a line more quality. loan acquisition sight we're of high our And cap than an strategic rate side, opportunity just in it. of an to much to investment. the something on because We quality think it we'll smaller, own. nice we than have have own go kind just so what But for to And We that there's it's

Craig Kucera

we expect is remaining should And see ceased? it. sale estate real quarter, any from the of operations? to more that mitigation Or Got with the effectively this credits earnings

John Albright

in That is the rearview mirror.

Craig Kucera

All right.

John Albright

think will us years. take XXX I it

Craig Kucera

I gears, $XX want investments. to Changing mortgage the talk million about

Looking X is it out Dulles, at Is something the multifamily like that it by Or the maybe potential entire some up all office. point, hotel lot at least else? alone looks project? of at space, there's underlying retail a or of collateral carved towards project

John Albright

No. is It's value multifamily. majority property. there the the all The vast of

looking up imagine, to you As now. developer. multifamily would hotel would contracts, XXX,XXX love developer and feet and X helpful investment I in the permitted X lining sites that say, to to There's for be buy from that retail that the LOIs we can with top-tier themselves. side, square in they're contracts your for, the to right developers are and And maybe they are designed on develop

don't, you Reston it's Town but know, we're a not a more Center like we developer, opportunity. As

would $XXX part as So station the is -- of and Fairfax. the as of data It's million. the top you top closest imagine, of this Fairfax property worth in was land, all data on it center to the -- And if Dulles. metro a County on then can be

awesome it's XX They've So been it development working for years. project. on an

taken You can starting -- imagine now entitlements move? and it's the long, you're that to have dirt now seeing

Craig Kucera

Got it.

broken this have point? So at ground they

John Albright

as development basically developers for more the done horizontal they're the multifamily do next stage. basically to earthwork They've waiting

Craig Kucera

CapEx X-property the where occupancy assets it you're at you spend upside Can Got talk at that looks like this there's maybe any to quarter, it. looking about you of expecting a been already those lot acquired of portfolio And sort properties? leased. have the

John Albright

Yes.

So addressed already in we were far so the it, as these they've CapEx. and when leases place, as been bought

it, the been vacant tenants about what been the Carolina these getting is this, acquired excited transformation very for time -- to the now we're of when to project for boxes of because we So landlord some it it's credit took are Pavilion going build-out side of but we just the the it. side and some be site now have of

part that of tenants thing get Conn's more we of are project interesting were under. multiple to the Big But We -- better, leases gotten open. basically we're back. Lots not the spaces we've The -- going trying have that at those acquisition now favorable signed in bought to process and that those is want the the than after boxes rents those

So looking investment. as this is a fantastic

on is and fast. going knock execution easy fairly here we like the So fairly be wood, feel to

Operator

comes next from Our line Massocca Riley question with John the of Securities. B.

John Massocca

maybe just So the market. a occupied disposition it's the of a given curious cap of of just fully kind drove property Landing, rate on kind there, pretty Jordan in what high-growth

that that color any Just particular in on asset more sale.

John Albright

issue. It's and a mean smaller really Yes. home, property the it at I you're vibrant was It's it a right. market.

demising happened home, we home at decided space home let's amount on held as and to -- a so at time in just it at property. something it looked small of forth, at we sell we the So on if

higher rate. So that's what's driving the cap

John Massocca

And terms a the Understood. previously Or that misheard, vacated partial me lease lease-up? correct in was if -- then I of of space? of was space, the that former but WeWork all the up

John Albright

tenant, about a great like X/X we're of and and of kind a about and investments. pretty excited it's pre-membership Club Yes, a almost It's us SOHO it. feedback they've it, gotten of sort

going up latter until And so not open XXXX. it's part to of unfortunately, the

space. the And to announcement So longer of that help lease-up from income little space primarily waiting rest hit make of the that is WeWork a market that to going the XXXX. with in to we're

this activity So but of to it's is longer, bringing be for property, a there. the going exciting lot tenant taken

So we're excited it. about

John Massocca

have sounds for just of And some X/X prospects space like because you it close remaining big there? the the

John Albright

-- at to demising we're it. going is looking we're doing What

to So smaller going of be it's a tenants. lot

Some longer. of talking the to taking just larger tenants we've been

of get we'd ground and kind it of out here just rather up. let's kind just So -- it leased

John Massocca

existing given have kind picture, seen over to either any move-outs bigger demand take space, of maybe you cetera? change space then retailer of for et And macroeconomic their Okay. around the just some uncertainty reposition or or

John Albright

only that's the that. we're we're -- the a Not more softness seeing commentary the are you're really. the the the mean, challenges definitely would seeing economy, of And say, really, sales monitoring some that of I But on on I restaurants, softness. where restaurants, as and down. is the

John Massocca

Any change in demand of for types backfill for assets? those

John Albright

we're we one no we're that's in of really for sort there's out situations. new ones, of in far, negotiations so kind like mean, we're in lease Legacy. in yes, especially -- Well, were have I --

So lease your -- but space the to land answer restaurant question, second in that's to generation. the is easiest

tenants available. these of succumb, we'll any backfills if have So do readily

John Massocca

the year, me. Okay. NOI about as to provide kind puts And what and we for there one But next could you're then didn't last XXXX guidance. you notable of year? same-store takes kind for any this that versus growth of think impact comparisons I do know going

John Albright

year active wait of we're kind good better the to of is the you all been guidance. it's and so news. news parts year, There's good end on we've investment Next the doing a side, because moving side, side, give work of lot a leasing a until the acquisition lot of

Operator

Our question Raymond comes R.J. Milligan next James. from with

R.J. Milligan

leverage at been the historically, the running gets years? going as want higher curious Most about of John, thinking I nice levels think we is sheet next been. you've you asked, do of my in the just company been it's running balance one the how but saw at leverage. And to X obviously, focus willing I'm you is mentioned bigger, And more the about questions pretty you're the to have over curious, and release on and here how that down I'm run just forward, But lowest leverage given really leverage.

John Albright

mean the being And fantastic us leverage markets I capital were down. goal. where Look, couple we love in of that's months that. the last do the we're for to the able

duration So and for run leverage acquisition to then up would we only rebalance. short the for opportunity an look

taking bit a where to it are up an down. for then is it for don't mind opportunity So back a a But sort look we bring comfortable our very great opportunity, level there's we of if but leverage.

Operator

Partners. question Alliance Gaurav next comes line with Mehta of Our Instructions] Global [Operator the from

Gaurav Mehta

your asset ask on to recycling. wanted you I

the in going I call, earlier said much past. the think in that expect recycling as forward not as you

are the may in be within portfolio, wondering sold future? Just there your assets that any

John Albright

Some looking be assets where just that Daytona the smaller of now. about, could opportunities these talked for assets we're we've scale

And at so continue that. look to we'll

Park, at Here and strong property stronger. little Winter we have that's mixed-use small here. to waiting the is We're a very just market it get for

if of lot may sell size if but sense, the opportunities. we on and gets cleanup doesn't the other nothing something just better makes it on Look, it, horizon. strategically you. a have sort pricing of better, Great. one to and growth So may more some there look be in the of that versus Thank

Operator

gentlemen, today's call. and Ladies participating. conference you concludes that Thank for

may disconnect. You now

CTO Realty Growth (CTO) 25 Oct 242024 Q3 Earnings call transcript