RPT - Earnings call transcript Q2 2021

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Operator

Greetings, and welcome to the RPT Realty Second Quarter 2021 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Vin Chao. Thank you, Vin.

You may begin.

Vin Chao

Good morning, and thank you for joining us for RPT's second quarter 2021 earnings conference call. statements would during to are Reform this may deemed management certain you not Act time, of be made meaning statements conference forward-looking of this XXXX. like Securities inform me that historical, the At Private the Litigation within call, which

made. Additionally, during itself of the that passage are time by the made date quality of the understand statements this replay call. statements should diminish made will the the of Listeners call as to any of

measures. call now for and section. over Investors turn call questions. after and the we in earnings expectations the Report assumptions, to Brian statements and results XXXX. our of definitions press available for opening website press Although the quarter non-GAAP described are factors based Certain measures first for on Certain which risks quarter Listeners in nearest our of XX-K measures second the Annual to involve actual as forward-looking statements are that in which, our CEO, like call fiscal any remarks, also CFO, Form today's are and XXXX, in and expectations. believe reflected made cause to year release, financial and these I their would from President Fitzmaurice, on include factors on these the to non-GAAP the factors risk release those Harper our GAAP Mike of of reasonable are directed we'll to our XX, release quarter open the differ which could on and reconciliations second for ended December

Brian Harper

conference quarter your you all and families I you for Thank you, Vin. hope morning, Good joining call. our well. are second thank XXXX and

distribution to the This and retailers the must that will been and sector's portfolio we and our unlocking a recently buybacks growth. a omni-channel rates pandemic b, created led opportunities powerful we in reinvent, with expect venture our our opportunities result have business accretive shopping drive are formation strong the allocating of seeing company. our we across platform, strategically that capital the toward we used to years and as Within open-air we retail. This rigorous and of in Similarly, XXXX. lease taken patience. RGMZ. underwriting retail differentiate understanding the open-air in a notice in first discipline our includes net will have many private markets. markets, compressing sheet have shopping investors grocery-anchored a engine quality, three bricks-and-mortar outside our RXG better of Investments groundbreaking center robust center advance, strategic have demand, in and methodology retail forward exercise portfolio, platform importance well-located and and box to platform, Together joint challenges, earnings our and sustainable segments always with resurgence the our the acted channels, last gain and and which investments to the balance since created wholly-owned multiple the IPO a be and, Although more centers. cap unleash RPT, M&A At shopping markets leading spent is thinking culminated in for certain public has

considerable a we are on at transformed that RPT. to reinvented of and RPT exceeded excited speed must-haves, these accomplishments our expectations, With the own scale and the a share

that timing and were Thankfully, modern are today's of to took our analytical also we well. a in the XXXX, and pandemic were worked thoughtful markets curate investment significant flourishing depths RGMZ, in very working the pipeline. while external Tampa approach we our landscape. growth a Atlanta, in like During cultivating We Boston, out on Nashville

in Boston life growth will strong industry. close portfolio. of net four will centers the instance, become at the XX-mile our Boston, underscores long evolving centered landscape. demand reshape coming ABR. we soon as with drivers, its parcel around our set markets market wave portfolio, is quickly our of properties versus third all of portfolio particularly for expected largest is our This the of radius believe just can within acquisition own science part unique of economic remainder a have of that experience we peers, should under important And of seeing position term, the our XXX each they significant a size advantage the over in today's be life Boston of well which science which companies the has Once years. While X% deals adjacency our the will and rapidly advantages sales,

expected our center, and The Let you is $XXX,XXX this with is asset on a per is a income and Marketplace has property CAGR newly-renewed where the in three-mile highlights investments household is radius. robust. a highly doing extremely nicely give the this the also collectively Whole since of Crossings Boston within a fit square with will $XXX,XXX over boast is Wegmans-anchored radius. demand Bedford where doing a few in our XX-year Boston has MSA affluent Northborough robust in within been small household previously NOI is lease that and Shaw's-anchored three-mile Canton, XXXX acquired income in X%. on a This $XXX,XXX. income household This center fresh, a average about Foods outside here three-mile term. a foot of $X,XXX XXX-loop Marshalls top-volume well. is has suburb right situated shop Shoppes a me

complete our the versus infill portfolio for with future Lastly, negotiations the eight grocery-anchored on $XXX this potential we of share activity level with and this proximity RPT's this household inside last in To almost covering increase and activity equates call, million, to our feet, XX% or which remarkable. square X.X are will Boston. over we expected all to contract In since of are on parcel ninth of were is contract be gross averages the which cap, total, our deals to our scale XX will execute under in value with power of asset its densification and a platforms together the after a million size months. able opportunities, equity-marketed advanced sales AUM given incomes at and closed last million. this that multi-tenant $XXX over context, only by XXX-loop above-average densities population We are the on of we in pro because XX%. negotiations true around of are put put quite a rata center

last not quarter, Northborough discussed the without might RGMZ, million we pursued deal we have As large given a is size. $XXX ticket

also attractive the given acquired more that yield million split upon certain use of and portfolio to made the that Southeast generate RGMZ. Our we $XXX of we partnership to RGMZ. a In much with region, capital, three the RXG was parcels between enhancement platforms: all RGMZ expect four-property Northborough RPT, sale

give Lake a this is with This market grocery-anchored over start East portfolio. was Walmart high-volume the and Tampa. that investment-grade a RXG center you me or XX% of anchored portfolio. is I'd This breakdown in another by neighborhood center Let added to tenancy. essential

and Aldi, strong is MSA of Newnan with community a lineup a Pavilion; in the Ross. Depot center Home Atlanta this

small demonstrated one XX% Aldi-anchored both heart of great the LongHorn shadow-anchored We Northwest since Super community with over and Atlanta. RPT tenancy. the mark-to-market of center XXXX. the Atlanta adjacent boxes in Corridor suburban almost retained On the rental on essential in RGMZ tenants, original see is left stability growing is sheet, developed the a We great to the opportunities the owned yield or also junior years Targets and center. are of with at bought This rapidly shop has its has The Greystar. Home was MSA. and Atlanta center and luxury at by to investment-grade Woodstock in Woodstock balance an it is we highest-volume selling anchor an in the by X.X% Depot and center Square is

own. multi-to-single-tenant fees us growth center after add. we've than is stock rally spreads with us public and This since real have higher have markets, deal accelerating earnings Bellevue of grocery grow context, thereby done of on incredible earnings future In put than opportunities, portfolio Nashville. summary, arbitrage in RXG the and To lower everything around we to capital on the and objectives our in in a our with conviction into provided our suburban enhancements faster allowed lower power economic transformation. cost strategic us allowing could our price could redevelopment sheet our balance combined Place a RGMZ could achieved on to yield we This of our capital, lock even platforms in cost do have capital to potential and we with our otherwise where than we a the advance small estate, Another from have achieved is sits November.

insights put deals acquisition look. provides strategies. of an our our that showcases a level the Given take investor activity, into we additional time When together market recent presentation permits, please and

the operational RPT's On quarter second results reshaped portfolio and our platform. front, reflected

We is average which of off-price for two the is the quarter, category, Demand alike, the anchor demand of Country centers, and reported the as deals our career. volume and improving downturn a Louis signed will XX of XX% that this making continue the Stein XX-month strong REI another quarter. high improve Mart above a I've to credit second leases Burlington an deal. of highlighting Reflective Leasing particularly in vibrancy for portfolio. space we my quarter, leasing them the strong centers. quarter. robust the deal strength category leasing more was from highlights square customers the in retailers been as the significantly We while lululemon former these quarter with of seen covering Both last and replaced in signed the both new rebound feet XXX,XXX junior the majority Town and ever trailing St. has from quarterly attractive new the tenants for also of COVID-induced at the we open-air high-quality

an where replacing second Stein we where The last at we tenant. our Mart the first supply is and Winchester replacing Shoppes are is at Lakeland, are at box; office Center,

to are grocers Underpinning our the is of the in and creation flows. accomplishments are all leasing negotiations lies in ability of as growth wholesale of robust, those with cash several that is quality, soon. sustainability Our value and and our quarter clubs, improve pipeline we belief the eager to announce our

the improved with cash replacing success of and to in increased Our flows. quality sustainability speak stronger our exposure Atlanta to ones Boston weaker and and tenants our

Our With I'll quarterly accelerated turn to Mike increased over increase and results our call Mike? operational in and financial and our in updated details. to dividend guidance reflects discuss the growth our more guidance the XX% that, trajectory. our

Michael Fitzmaurice

The second sheet, the for second quarter and operating quarter backdrop with Against Today, results, environment, balance up of straight-line debt half of an quarter, $X.XX not $X.XX I'll by driven guidance commentary was abatements everyone. and an on share our the this rent our provide $X.XX driver good the our rent per last the of taken prior about from expectations morning, in Brian, Regal per our update end for FFO reversal reduction of reserves of Thanks, share. lower improving reserves largest improving $X.XX bad and year. our our discuss probable collection period a of in second macro of of was theatres. decline and on

months for have As rent payments two over expected, they have accordingly. been open resumed and

to For reported the probable including million second fallen of we at quickly and in quarter. some this quarter rent the our context, XXXX $X.X peaked not abatements, collection, have million $X.X

year-over-year to just be are the in we line expect the which of handful are to and in tenants is the a still set for our continue at XXXX. beginning half to reserving We of which we debt bad out the with second that tailwind expectations of year, down will growth a

strong. remain fundamentals Our

square XXXX. just is We feet accelerating signed continue completed million year-to-date, X.X the experience one we below which leasing year in for million demand to entire the with

and reflecting once comparable resulted spreads respectively. continue mark-to-market X.X%, occupancy quarter to signed points, in drive occupancy positive leased occupancy expectations behind on of rates were spread that with the strong This is portfolio. for points XX the us, our XX Our in again new releasing basis portfolio. another leasing sequential the lease is in Blended line including momentum our increases embedded minted as we leases trough in of basis in the XX.X%, opportunity in transformed our newly and

spread lease the new XX%. Over past our four quarters, comparable was

risk-adjusted platform our projects of Our drive continued to projects velocity, Remerchandising and best to improved pipeline capital grow. operating and of secure rents. leasing powerful continued remain our higher use occupancy

capital Coral at of at These delivered ground quarter, XX%. completed projects; for the on remerchandising Merchants return we This Creek Wendy's West ground Bank out-lot Square. Chase and were Broward, the an average the three and at with combination lease the Shops, of projects Aveda lease with at boxes

occupancy. We our Marketplace we debt line City times target We upside. cash Crossing, at highlighting ended down From net five unsecured and the pre-COVID at and where million X.X project adjusted levels re-stabilize will debt-to-annualized balance range and the unused the to Shoppes as million year, a to Country of We from project this of we expect to as RGMZ million repaid $XXX and XX%. of down also the to to the quarter close of be new $XX second fund River generate at on started our of $XXX our Center, new the we REI the which Plaza, expect Towne times that expected of Burlington second ended X% Town projects $XXX proceeds. Subsequent Deerfield fall credit. we demand end returns end expansion liquidity acquisitions, drew roughly centers with Lakeland, of remerchandising quarter of EBITDA million Northborough Leverage and our X.X for pipeline bad an in Southfield Marketplace, future we parcel in our normalizes last perspective, Providence quarter. quarter, to on times, and are to toward sales reserve we X.X a with the quarter X.X the should by added revolver fully rent

million we with placement private our the $XX hand. During cash repaid on quarter, note

$XX XXXX Looking ahead, no we XXXX. debt have maturing and maturing in remaining in only million

options. are options secured we are both and refinancing and Our plentiful exploring unsecured

about of a beyond our $X.XX, is XXXX to in low initial advantage our rate to our FFO increase provided look X% $X.XX from to forecast. and turning will upside which or $X.XX capital to stack. driver adding is the early We take to in primary guidance our to while environment of up guidance. XX% operating also guidance to debt last interest And lastly, duration We refinance continue February. updated range than back quarter's acquisition an The XXXX

to advanced that Trustees our was on $XXX Board our in share, in contract our allocate by ratio, earnings. dividend our or in $XXX the the leaving I contract per strength under This continue increased acquisitions we XX% core dividend acquisitions, in $X.XX million capital prior has accretively Also, quarterly. line and are payout us of will but turn the closed We also back us operator allows to maintain accretive the acquisition grow for a or that, And guidance. to room call given business above share as for at is have to the of providing rate increases of to additional negotiation low with the on which embedded million our the questions. flexibility open future, to

Operator

Derek with proceed [Operator your question Thank from comes question. with you. Our first Johnston Instructions] Bank. Please Deutsche

Derek Johnston

everyone. Good Hi morning.

to portfolio. volumes or robust stood tenant us categories, newness such that strength So, to was entrants much and one geography leading really in talk thing stood with is five new even the Any really leasing out? refined or shifting over smaller strongest really and years that this drivers the or dynamics Can out about a you leasing?

Brian Harper

repeatedly, XX% got as I've Derek, boxes. That of I've junior nice call said That post-pandemic where and off-price the out in the them fastest been percentage have We QSR. And new about strong the the about deal. as my seen casual shop. with a XX% large even gate range the thing deals small with and see. mentioned it's in past career, very this, it, particularly of is We Yes. mentioned a good a of as world, and the like centers. to quarter boxes XX% it's good as The we're we really lululemon junior from, interesting were just were medical into home high power of a deal. percentage where very well, fast of going huge lot credit getting what yields are say, REI improvement, grocers, or centers of to those we'd wholesale, backlog a this

in markets boots firing helpful $XXX And of So these average this, too, on think of we all lot it That on X.X%, the team - an is of anchoring gone. a portfolio that down. that leasing was of cylinders, ground IRR in assets XXXX, the secondary in the of million I had disposed is is is markets.

every are and both leasing and and team, mining inch our be portfolio prouder operations we the couldn't So of development.

Derek Johnston

so especially for JVs? rates also cap for share for question, Brian. out, the portions And that today, overall, about vetting announced? ones earmarked gave was these you some Thank the context. are you for more you're the And destined what second attractive you little shake details, maybe six can the but sheet acquisitions did that RPT's know you I really versus a balance parcels how

Brian Harper

Yes.

the at first the it IRR-driven, is obviously estate then, foremost, and Derek, math. tenants and real real comes So and estate, credit the the we profiles way look to of down

math increased it with the I first. a fees. the the competitive by the that would competitive range The a highly whole this market. power and start is be our was two mid-X% highly, cap. on portfolio is of and points. advantage. if let's total obviously platforms blended following; target and moat, And So yield XXX way basis arbitrage would X.X% the to That's a property our will, the look at It's you This in the

wall; in good a to we them, selective This we these allowed us recently the focused weren't we're cap. number at example proven occur. my cash of similar extremely center, prepared in lower believe, time sub-X% Utah would we XX going Utah, had We in shopping others similar a mid-XXXX, when on Walmart this And they RGMZ Provo, XX is be clearly not MSA. started of yields, these early Provo, jump deal was when lot That secure is remarks, obviously highly in on a assets, deals. highly we went mentioned and these timing. where attractive I As knew Tampa similar deal flow, MSAs, were And to assets a a negotiating Provo traded focused neighborhood-anchored today. at points credit, on basis underwriting for

asset, remain are CAGR, will And the it this are household of forward platforms. cap weapon rates landscape this are get small a highly at be yield $XXX on what averaging the quality, XX% about we is a Boston, Atlanta, going love of XXX,XXX down The comes future report specific grocer. accretive And CAGR, shop, this and earnings every this amount really accretive it with income of accretive focused of power in Orlando, and a balance sheet Austin IG, competitive foot. the sheet. unique it's So X% our to could how we and balance Miami, grocers high the that where XX% all this pipeline, highly this NOI of I at is to to square in This and buckets execution meet while one in quality, Tampa, a accretive day. markets disciplined Tier our compressing Nashville and on three has in really

Derek Johnston

Brain. Thanks,

Brian Harper

Thanks, Derek.

Operator

you. Thank

Linda with next comes Jefferies. question. with from Tsai proceed question your Our Please

Linda Tsai

Hi Good morning.

of still amount how the of has year? just to that earlier a maybe increased fair for are And back the comments lot for How you assets your deployed deployment to the at. in RGMZ. you're capital pace a be remainder You have the of about looking about thinking then competition

Brian Harper

Yes.

a The way job the a me this triple-net really and side team high is at pipeline, three with doing start we're Sorenson Linda. looking bucket. his is have phenomenal full - Tyler on and Let buckets. really the And

with be Newnan. the we would or like did First arbitrage Northborough

Second build-to-suit opportunities. would be

build and we keep then as where to now retail on would off-market And marketed that another build-to-suits obviously - yield, RGMZ. providing spread service to can dispose and are partners, We that the deals. them third be we reverse our the

very we're lot activity So the is in of and that seeing team focused, space. a

As a reminder, RPT. of X.X% only it's

end bogey. So our year this landscape, $XXX platform, platform And selective us moat right. to behind deploy this very for a that, it nice timing million is have And kind meaningless we we that that start world yield allows us. it's And an weapon second a competitive competitive. head a these it's a as kind of the gives and competitive really external that do that is question, And in to markets we believe on pipeline today. for with accretively hit number of X.X% of of deals, in the very differentiator extremely this your us that's our that relates a

Michael Fitzmaurice

thing that underwriting allows optimize reminder, really only these add a is the just to in. joint to in past, new Linda, would is, which as to in to disciplined of which be venture, and rigorous the And have very as be a investments, we very, we've spot very, is years great us I talked our three this

Linda Tsai

Regal. just for theaters the what in Mike, quarter remind Thanks. And some details What us on gave you just from overall then us XQ? follow-up a were it and was collections this

Michael Fitzmaurice

represent second first half quarter, collected XX%; deferred, was really that for for. we touched gets reserve collections collected our and In XX% X% our so the about you X% from Total tenants We or theatres. Yes. about quarter. the X% then quarter, to we we cash-basis that in second about the

see, continue what our embedded consistent this half of the for part remaining about of within range, year, year to for reported quarter million per second is we guidance very the second which the in with the year. is $X We quarter the

Linda Tsai

Thanks.

Michael Fitzmaurice

bet. You

Brian Harper

Thanks, Linda.

Operator

Thank you.

Schmidt with question. your comes Craig Bank with from next Please question Our of proceed America.

Craig Schmidt

Thank you.

let's $X.XX is beat RPT quarter say, RXG breakout? by As $X.XX. pointed the I RGMZ, raised guidance you your where second raised and your coming wonder rough then you mean, from on you platform the regarding, out, versus growth I midpoint by and this a

Michael Fitzmaurice

go would to come breakout beginning that or to going And RGMZ, within last at where the million this or was own swing is our just own A about fourth. about That so, the $X.XX $XXX redeployed or venture, end we and is so rate totals joint that average had $XXX that quarter, I X.X%. Yes. of guidance to million again that the gets and of the we going come sheet, where the our be about of or noted, X.X% rough we acquisition then so going third quarter. balance through million $XXX so the on XX.X%, RXG million to $XXX is is on Brian at about date going cap the our as to $X model, likely probably million. you Craig, a And Craig, of

Craig Schmidt

touching the earlier then you of of of leasing sort emerging how conversation on maybe some volume market that about this increased the new pie And dominant Great. less leasing private volume, players? of from maybe much share just the more versus to taking pie? is starting So, either or is are growing or get

Brian Harper

new-to-market. It's the I we're of lululemons and of both. of getting We're and getting as are the mean, lot of lot the a relocations. active. Athletas a We're getting tenants, very a world mall Sephoras lot

we're That's can And or we pick share from looking the that's that's enclosed. at air disciplined them. So, open can landscape. the where increase at either market centers on at increasing where we assets looking competitive very tenants off competing

with new-to-market relocations. pleased the very, very was and I So,

Craig Schmidt

Thank Great. you.

Brian Harper

you. Thank

Michael Fitzmaurice

Craig. Thanks,

Operator

you. Thank

question. comes Golladay your question Our with next Wes from proceed Please Baird. with

Wes Golladay

A Good Hey. net guys. on the morning shopping centers. question lease versus

is today? on the asset You tell difference can focus do between the us two you you think do types what IRRs,

Brian Harper

center They I Yes. compression then wholesale, are grocery, I home a compressed And But on landscape shopping really the to compression when start, shopping seeing the as triple-nets, huge lot the nets it's from, interesting think look mean, very tenants centers. seeing mean, well. We're got thing, obviously, obviously, and it's frothy. both, is, improvement, that even of in the on the obviously, to the the it's head you triple-nets, your essential to Wes, most I significantly. QSRs. especially these a

wider size these those on deals, buying liquidity So, these lot, you obviously of is very, it's is then very just a quite pool million the a the based and of smaller each and $X $XXX pool check opposed million. Chipotle, Northborough, of as some or not just centers some centers million $X market. bought, buying that a we the liquid the have Chick-fil-A competitive pool, wide. where That to of And

both trading sides, the competitive certainly nets today. are but on shopping than tighter it's So obviously, centers much

Michael Fitzmaurice

list Yes. relative up for the we And platform, lever the I public the in thing there, Wes, that can to is is past, to XX% add to talked a this as XX%, net reminder, one peers. this would IRR, unique about which platform our we to improve just

it gives there. of So, a bit advantage an

Brian Harper

where seeding basis at just think nets the I our lot where three duration, are we patient, a bring we're we build-to-suit are selectively, XX where an these we shorter-term we can't. blend public DD, and creatively in X% patience, that's maybe assets X, think points and for maybe X a at, over tenants, deploy, our like for have to, Wes, it's call X% and it's Mike IRR don't with looking upon where the And we relationships four contributing wider a excellent it, the than I the retailers, market, why or years, could And investors - the of extend do yield, differentiator can we right. then that touched could a investors, arbitrage, are to we a maybe so that's yield have

Wes Golladay

imagine elevated again strategic and go leasing. And the in last I the guess, sense. makes we then TIs strategic to the XX next this can I were is going did portfolio? you quarter, when that now. on leasing; And months, left look the to leasing the Yes, how we much is

Brian Harper

Yes.

a this interested was down Mart We was really and tenants four deal. deal This some other as a and cost so taken So strategic box. I - a at mean, is. Stein to box, had It the vacant in was Town of REI this Country. came the box would it, interest divide that multitude right of in have three there. REI tenants the so had this; we that's to decided

with tenant, it's if about soon, yield. So, another announce a you which REI XX% combine we'll

divide we're in So think just - Whole for the it. Mart box, was put have, other The win-win. share market it a we didn't just we lot. really market, where Stein Burlington fills going And the to we had the we with the in chose like co-tenancy it REI we a Foods. that and and niche greater that's Winchester,

has on it's pipeline our going yields really tremendously. So And supplemental, pipeline be see to shadow great we in those. the - increased

handpicked. a been Chick-fil-As That and of of yields what That are grocers. has a been all seeing That's strong. That's has you're has new lot wholesale That from like that and So clubs. pads the of the is hand-curated. That's a of And Chipotles lot that. the a there. improvements. lot lot home

it where So decided as in and basically, box; small it's I whereas to the Town REI. to tick the we shop Country, Burlington, took Winchester, chop just think up, demand decided is; selection, & just asset-by-asset an it we given

Michael Fitzmaurice

Yes.

opportunities the this Wes, to year, million our great, dynamic And the today in our national, mix probably million tenancy that our I we remerchandising business the of like on between nature we're think soon. we'll these hope REI and these centers. on cost million remerchandising investment-grade $XX to justified have tenants, high-credit, mentioned, and flows at and so projects. the For grocers year these spend visibility on announce cash $XX to high the improve is about Brian our by or we plans, strong based spending $XX per that about And discretionary-type

Wes Golladay

to bottom use sell it that then guess, I your, that of Got bid it. going source up? capital investments? a And is of Is like market, you future the widen? XX% starting is to your - you And if starting for maybe portfolio, were bid more to as the to private can that firm

Brian Harper

non-strategic froth, debt sectors. funding mean, sold We're call, are not I frothy. we these markets match strategic type think we're looking not at to are company. I frothy we as to into the out funding, to on the again, I And that into markets? said others are earlier it our And good seeing open mean, I our we and match that, we of tier. going markets match certain seeing the Sure, just actively sell absolutely. at - and demand. will be thankfully, fund we're Yes. the bottom certain strategic But diluting markets, very very, very all be of could

Wes Golladay

the questions for guys. Got taking it. Thanks

Brian Harper

Yeah.

Michael Fitzmaurice

you. Thanks

Operator

you. Thank

JPMorgan. Our next question Please comes your proceed from Mike with with question. Mueller

Mike Mueller

Yeah. Hi.

of market? And where net you average you the rate the couple that, a the wouldn't, compared do I today's that question will second venture in guess, comfortable where interest or kind paying of example places parcels what's see entity matter be venture, because a where one for an levels it carving is the does in of carved So, questions. of not lease with center you the an out net terms in out to have lease first, both? cap you're

Brian Harper

Yes.

it So let comes comes that question. clauses. estate to to It tenants to pads does down centers. co-tenancy credit. and the in options. where And the down the are down comes estate. down comes first real your me the real to take future It down comes It the obviously have located to densification It

how disciplined in cases, a So the a off, Then jurisdiction. is of on lot we - already parceled are the of process at think In many a true very provided, look Home looking at parceled it we the at already what right was We is some Newnan center, Depot. back be look very, what right. are like centers going Depot hard shadow-anchored country the are what co-tenancy. of use, parcel it I now could And Home in rigorous triple-net, through off off. to in

out that that. LongHorn to shadow-anchored there decided that part front, and in were already a with area So we along pads of number were

others the Boston or the that's REITs I Tampa of not demand. that, we on I major the has future more we and look right future look in densification from of, that, St. on the which where incredible is Pasadena some have if inbounds particularly opportunities. South just I think air we water right, Pete, at would of the think a leading like assets, residential great would would interest something the one be have rights potential that wouldn't assets, had really and new at like

that and and look it, a then and, on duration at we it so would all basically, I say determination. rates Xs. make So, Xs, from X cap right, term what depends and and it Xs just that and that's run to depends

Mike Mueller

it. Got Thank it. That was you.

Michael Fitzmaurice

Brain. Thanks,

Operator

Thank you.

question Point. next Our with comes your Dijkum question. Compass Floris with Please from Van proceed

Floris Van Dijkum

guys. morning Good Thanks

Michael Fitzmaurice

Floris. morning, Good

Floris Van Dijkum

percentage in your and to? think referring obviously, I front, to very you XX% in target of current you particular, us portfolio to want the Detroit one, where in still key markets. do your to acquisitions active your is Cincinnati. currently And that, markets tell get in these just also, of exposure on So is portfolio I mean, what and the increasing Could

Brian Harper

be of Orlando Yes. We it and or to x Boston the Miami. a exposure Y we game in or - We already. of Nashville or have or percentage X, large don't math Z don't Tampa Austin has play or a have obviously in Florida

Boston. We will in larger getting be

down performance. Nashville. down It real be estate. to to down it it to sales comes comes We in IRR will getting And comes larger and

So, to get We share grocery, Y a they or match that X, want I people real estate all where just that term the on these of Detroit Z. percentages funding. to quality certain they in hit, market markets. of percentage dropped near and certain based dropping caught in the froth have could have number I in think market much XX%. further of see

real first deals, said where from lot to there. so go I've key a a of As and that we're number institutional-quality one want from harvest estate grocery out doing day that's of

Boston, down estate Miami; comes So real to we don't have goalpost Atlanta, the and of we're XX% XX% XX% it patient.

hold we'll right So for deals. out the

Floris Van Dijkum

returns one Maybe Brian. significantly is X.X% the my the these - that Obviously, JVs, rate that - your about announced. you you cap by through to transactions higher. goes are on Thanks just questions other of you've boost talk

talked also on X% about You the CAGR them.

occupancy? leased. that bit Is really the is If same-store there's portfolio NOI [indiscernible], acquisitions it more the CAGR those a you in information it on upside? explain I could on particularly, X% think is little XX% rents Where or no is Southeast seems because in high,

Brian Harper

Yes.

working there's deals. And are So shops, vacancies of small centers shop. XX% small Shoppes has - on there's that a like Canton it's there lot that we lifting a XX% negotiating CAGR few a and have up. some already of are

some like TJX The - then is up some new, So, it's And renewals - three as anchors, mark-to-market mark-to-market massive said, XXXX original that's Northborough XXXX, I a for for the as that And coming those well. and number was concepts some the deals CAGR. two vacancies. because Newnan since Woodstock people of a so of are potential of renewals, then in of are has there new, were and original an online. their on X% potentially lot just CAGR a

higher really three centers. those or with So, four of skewed

Floris Van Dijkum

which The I last out, - And question, mean, little guess, you if slick. I've is maybe could in done I presentation my you I quite then sent was Thanks. thought the math. put

think about $X.X X% talk ABR obviously works which to a think of additional somewhere that I bigger the talk out 'XX-level bit little of getting leverage. when 'XX impact can see company million the You potential if Maybe NOI, occupancy back to upside getting on about to you back range, in a around of of FFO forward. because you you occupancies, going levels

Michael Fitzmaurice

We XX if occupancy you think couple our - we at up today, at Yes. XX%, ended the it's around points. think as over behind we us, is last trough the the quarter look No, Floris, basis I quarters. were we've of do messaged

XX.X%, So just we'll we right which end year ended the about XXXX. puts around us where

we way early we a this As late we we to think is in level prior back were move absolutely do on pre-COVID. there the think well restabilizes We portfolio of And that that that XX% XX% portfolio. were forward, right pandemic. XXXX, quality the our possibly portfolio at XXXX, at

upside occupancy. additional XXXX there's with think So, even early beyond we

Floris Van Dijkum

Thanks, Mike. it. Appreciate

Michael Fitzmaurice

bet. You

Operator

you. Thank

your with Markets. comes question next Please with proceed Thomas from KeyBanc Our Capital question. Todd

Todd Thomas

mall-based and that that demand leases, had centers and of, mall-based that Are curious some question, seeing from Hi others of centers, to from that historically sort the greater entertain? of of you're space more Just of the types have the they and any if some maybe thoughts demonstrate to expanding I of you any that demand and interest? examples Good the retailers. they'll types Brian, the traditionally of guess, tenant where some you larger-format signing them they've first interest mentioned, are seeing morning. lifestyle are you community outside of lulu expand

Brian Harper

many now whole Northborough. the now. mall. have TJs mean, an and the gamut. open-to-buy with negotiating I lulu Sephora They're not at one mean, Locker of those through. several strategy. program almost that followed several It least strategy out I Sephora and think runs Todd, Foot That's very and deal then off-mall I up off-mall Wegmans has outside Claires in kind off-mall two or the doesn't that Ulta, and led is Anthropologie trying can't have a an years areas. their it. active right are in very in of robust. you ago everybody

have - at So off-mall with platform? said, in I tenants, an it, which tenants high conversation call malls, has luxury engaged one you in is of, exception every there they'll the least or luxury obviously the single stay street those think and of do

Todd Thomas

in sort in these mall-based generally rents, costs premium those arena of the lower sign of Are And than malls. occupancy sort you are Okay. you of market? with from generally or are be in consistent as sort of leases the the their would with premium - sort retailers, they obviously, retailers, achieving open-air economics they

Brian Harper

No.

have getting rent? obviously, Absolutely. reduction? Are can could You're open-air do you're lower into getting getting premium It's, or greater being And that mean, them. they goes with in say a calculate cost premium. occupancy greater an I absolutely getting and they most premium. I you're at sale equal no four-wall then centers. with our negotiations a that and EBITDA

deals ABR in are every center an the level. of from - single we at our they're accretive one So shopping

Michael Fitzmaurice

X%. mall, or lower area with the given X% And between Todd, looking the XX% in you're costs, typically open-air, is common occupancy cost Because and XX%. at much

back up in be So, premium there's there a paid absolutely to Brian's to point, open-air.

Todd Thomas

helpful. a sales And That's the contributing Mike, with this expected or proceeds like before around certain to funds. with then Okay. leverage, some bit And position little it's going of in parcel come. all a you're so certain warehousing it inevitably that parcels activity, to to investment from bit the bounce to fund today sort seems little assets them you're

within all long being activity you guess, forma, range year-end, You mentioned the leverage sort to transactions How you're of times completed? at X.X expect and the the sort $XXX be to and do until of pro I target. where million X of

Michael Fitzmaurice

we're Todd, focused Yes. leverage Look, the X.X you back range, times. on and mean, very it know, as know, getting I you our X.X to as within

off our look, there. X% this investment-grade we low quarter strategies rating our of only philosophy three we levels. growth pre-COVID and levered. have be are EBITDA Our our rents our One is mean, recent very well is on indicative I were way to to or get there. And

year in that comes RGMZ Brian or continue sell redeploy is opportunistically think accretively an here, is as to to could that like into most early opportunity platforms. non-core it thing, existing option have, due high-coupon of powerful Brian And Secondly, debt, which pay cede be we said, will and Q&A down, more we or of to our I power earlier here, the our we the mentioned the overall, then next assets the third the mortgage with optimize have acquisitions. portfolio

can same equity, and time. lower right accretively mix of leverage debt the we the absolutely and With at grow earnings

You at when you a yields invest of options in lot X.X%. whole have can

very as little else can, on getting other we the we I year, a we'll being as all these north down strategies the by bit end probably of be absent X%, mentioned quickly possibly focused that are equal, any of employed. So, of

Todd Thomas

Okay.

sit little bit should today north and activity, given them get this a where you then of just all down. So,

Michael Fitzmaurice

Yes. All else equal, yes.

Todd Thomas

more Okay. guess, And questions, on I then two model. the

the Bridgewater plan that's so turn as X.X%. right, So you $XX the the mentioned Falls, 'XX? think What's corner we I into mortgage, million, there

Michael Fitzmaurice

Yes.

assets. looking some the sell RXG possibly non-core on assets I put market And to think X.X% the we're leverage. are looking modest those secured then sub-X%. front. venture, many the But rates rates We're again, X%, with are One I at said, at between leverage market placement, an private also there to be joint unsecured like that on our could is with opportunity options.

the what now. looking at more three all on We'll quarter have pick we in color So, we're likely third right call.

Todd Thomas

lastly sort And Okay. from it of at basis, fee about with then, 'XX? can think the completed completed as to might you expected it's be on that's trending on year-end, annualized just be but how or the income? we of year I where guess, where here, the recurring an comment by end activity

Michael Fitzmaurice

it's end to of the Yes, I $X.XXX, I if $XXX,XXX. right we fourth about quarter, think the get think about

Todd Thomas

from combined? RXG that's RGMZ And and

Michael Fitzmaurice

include more volatile. about of going we bit for if north Yes. That's that a But to the preferred Like fourth position be then you now, in quarter be in right that's correct. RGMZ. And forecasting $XXX,XXX take bit we're they'll a that. the

Todd Thomas

Alright. great. Alright, very you much. Thank

Michael Fitzmaurice

You Todd. Thanks, bet.

Operator

floor over are time. questions There any to further you. this comments. the at like turn closing to I Thank back no would for Harper Brian

Brian Harper

you. Thank

shareholders demonstrated clearly the create we second Our value so far, through results to quarter ability third rapidly only increasing our quarter, for both are organically cash the our the on for tenant continued Not cash acquisitions. and, we sustainability our are credit, the and infill our our affluent, focus by improving mix, flow, quality but properties our suburbs. flow market also of of first-ring, and enhancing have

advancing order also ESG focused in We strengthen remain initiatives on our to further business. our

are With rapidly for morning. day. evolving a Have confident joining for call a in and success future. the appropriately retail company this in we environment, wonderful sized repositioned all Thank RPT's our you

Operator

This teleconference. concludes today's

You your may for disconnect participation. your at lines you this time. Thank

RPT Realty (KIM+N) 8 Aug 212021 Q2 Earnings call transcript