TCO - Earnings call transcript Q1 2019

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Operator

Thank you for holding, and welcome to the Taubman Centers' First Quarter 2019 Earnings Call. the call will begin with the prepared remarks and then we will open the lines to question.

On the call today will be Robert Taubman, Taubman Centers' Chairman, President and Chief Executive Officer; Simon Leopold, Chief Financial Officer; and Ryan Hurren, Vice President, Investor Relations, Interim Chief Accounting Officer.

Now I will turn the call over to Ryan for opening remarks.

Ryan Hurren

Thank you, Michelle, and welcome, everyone, to our first quarter conference call.

this of we'll federal during within forward-looking know, meaning the securities you conference make call, statements As laws. differ although These with statements results performance, respect views may actual to future reflect events and our materially. current financial Please see SEC our and discussion XX-K latest uncertainties a and underlying subsequent for statements. various filings, reports, including and of earnings yesterday's release our risks our forward-looking

on our this In will be link replay website. a of section of call the a Relations addition, through Investor provided

and non-GAAP comparable financial release, G. income NOI, from when and estimates differ discuss to may this not as measures During or performance EBITDA, non-GAAP defined non-GAAP historical Regulation this Such management also our future our call, which net included, SEC of measures Reconciliations significantly amortization, quantified our on properties. and call financial or expense SEC future by we'll may interest earnings after-tax for has measures are periods. our information due in forward-looking the possible, measures GAAP FFO expense, GAAP investment filings. of include these some and/or all measures supplemental of tax referenced depreciation the corresponding of Non-GAAP to the NOI financial measures

up open ask to two. we'll remarks, call limit prepared your today's for questions. We the we Following that questions

you more up please again. queue If have

Now let me turn the Bobby. call to over

Robert Taubman

lease NOI for currency, excluding solid results, Adjusting in quarter of growth, foreign we income, line to first Thanks, expectations. up and NOI released everyone. our Comp morning, X%. impact Ryan, center Yesterday, good was the with was X.X%. cancelation up

occupancy first of would periods, from healthy XX.X%, centers by $XX.X were XX cancellations space expectations. basis our our and also XXXX. up also received center very impacted If FFO $X.X points. last have both XX.X%, or of in is adjusted lease income quarter first First points in $X.XX level years, up at basis was comparable Lease in was FFO comparability met highest of comparable up X lease quarter been adjusted March over XX, quarter termination the X.X%. At removed year. Year-over-year XX

to an Our improved spread trailing XX-month nearly basis. releasing NOI-weighted XX% X.X%, on

Sales sales as per Trailing square the foot center square our with square X sales quarter. now marking XX.X%, up was quarter $XXX, tenant statistics growth. tenant XX-month history. positive Both U.S., $XXX, significant up increases this XX-month has Turning foot XX.X%. sales the CityOn.Zhengzhou were full were per per the sales several XXth were of foot years There include that sales trailing impacted to sales. sales up factors consider In XX.X%.

a of a of delivered First, resulting reports that sales on this the Tesla, tenant sales one XXXX fourth in number Xs positive materially quarter impact to a lag, a quarter. in quarter Model substantial

portfolio. X% the Second, less foreign about impacted X% but Asia exchange than by on negatively rates

the Third, quarter the very comp out positive Easter quarter per against the week XXXX, second in lastly, impact holiday. quarter shifted likely the XX.X% as this comp shift very into of currency, calendar. first Tesla a the of year. had Removing retail And included an and we square the the extra which a also tough tough the of were considering in holiday up foot of after were January first Easter sales we

close. been performers our around exposure and closures Gabbana, everything Lululemon, Lotte, Louis of Fabletics, results. Aerie, we Face, to and time, apparel. tenant the among basis store now strong that Coach, to low, discussion Our of and recent bankruptcies. apparel, could that was last of round There's about about by lot Zara, perform Today, a Vuitton, Saint anticipate stores, call, we bankruptcies. Versace grow. like XX representing we We have about XX with key On in well At is points most We're North were Chanel, stores. expected Water backfilled to and close, continue occupancy XX%. XX but our relatively best Tumi are be X/X maintaining of approximately working stated by shoes those brands actively the Burberry, which which nearly categories, will XX Laurent, posting this impacted of year-end those Gucci, all also to our expect on occupancy. and electronics, of year-end Luxury & space continues XX Dolce UNTUCKit, to guidance retenanting have and

tenant in demand remains generally, So space portfolio our for solid.

generating native the a we're digitally compared retailers, concepts. UNTUCKit brands, tenant XX Many first growing are of Warby Our XX brands such the best and most to more some off deals we additional from coworking with in represent start XX digitally the of having in signed quarter of native pool emerging Casper, digitally and agreements particularly the than In successful and including for good entertainment XXXX, most Scott, to Parker, emerging deals proven locations brands, native Kendra these reached IndoChino. And assets and with interest, concepts. XXXX.

this and have Flower Shoots, Additionally, they in that centers. their leases of brands few year, the Chubbies are our Worth, a first Child, signed

recently the has also has the asset. largest retail of Third-party space concentration confirmed Coworking digitally portfolio become source another and as sector. high-quality research in of demand our native brands for

their with The opening will Jersey locations first their an of upscale mall Industrious, Hills As be year. at later and workspace in Short cities, example, an at provider second XX this New location Mall in flexible XX

traffic We and was use, cash former of have square they flow. completed density conducive taken feet the leasing a to and third XX,XXX and retail, the -- that Saks center was This it floor more greater the box. store on not have but that space unique to of the creating taken adds

of Sears, There XXXX. still and signed is rate producing quality it's jointly northern the overall median. considered our productivity own an additional in release, no Williams-Sonoma, operating includes growth include Palm Mall we're our increasing a sales growing foot extremely family, as and brands with a point Gardens square also owned bullish is taxes former demographics prospects. We A+, a Kendra and Gardens Vineyard of best another The Florida's Food is Orlando acquisition market. Moon The now X% Macy's. partner and retail Co., Kitchen & favorable Salvatore income asset at the growth Naples of in with strong the The Athleta has together the portfolio all also Company, this market. Analysts close markets. from we department Cohen Nordstroms, The center Millennia, the Jimmy at interest press Gardens who, marks XX% our Waterside We Emerging and aging employee's The retailers Its As Saks centers the with The True Beach in levels, weather, economy. per new in luxury and assets X Vuitton, as XX.X% Madewell. Tiffany Shops Forbes and Johnny $XXX such by with delighted others, to top and country's estate affluent family and in above of Choo, Palm contemporary sale. we Ferragamo, of the The South tourism, Florida. Its Florida's Louis store Yurman, our Apple, Chanel center and in Vince, interest generally great David center the is Palatine, Mall to Bloomingdale's, were in Beach, Scott, Was, strong highlighted lineup operating. Under. many population on in best announce which the acquired partnership since its members Vines, the of currently The is a leases owned with about Forbes governance. opening transaction a Like continued

we of consideration We from very that per units negotiated slightly we and were XX.X% off-market our FFO tax The is existing benefited debt. operating the profitable efficient of this this are value contribution $XXX to also our pleased of Total an million relationship our $XX and year. unit. X.X of for leveraged this expected asset the the and partnership our long as agreement partnership to currency and structure able structure of million utilize In with units non-cash Forbes. to transaction, the with pricing neutral to this be was for agreement is the property-level operating acquisition. In operating share deal, consisted share accretive

was transaction, essentially NAVs of that million our this the the mix the true the current share basis -- date the price not share price In value on On the $XX. of X.X units closing, of seller to pricing agreed about accepted reflect and the TCO under partnership. the did operating

about agreed results an in net XX% company, a X% For NOI, third-party the interest we Overall, high top-tier of a share. rate. year significant a of which NAVs, to let of alone, America, per the Using the $XX accretive pleased use on the basis. centers very retail with to purpose best XXXX's in the acquire mixing pricing was we're asset in asset. this all seller budgeted to Clearly, among cap value X% consensus full

in value. buying of a that believe Assets this like a the from investment these we likely trough department current to We're rarely risk, quality trade result and the Mall with is tremendous the disruption positive scarcity We box. this stemming schedule not retail the store are the with in in Green very and be at and environment. The joining pleased that center, existing redevelopment wing will in Hills of the of be in food brands the mall. June. and the expansion the completed both will repurposing all, opportunity, NOI the All center remains have on

also Warby like have and brands, fall. delighted flagship Kitchen, P.F. gallery at already We're opened UNTUCKit, unique-to-market in native like Digitally of Italian Apple Fox, Louis be both and Our center. successfully. Sauce as feet. as year Asia's XX,XXX the True tenants leases opening an square will the that led the and Vuitton North, brands new important open concept signed design & Parker square recently very will our CAV Surrounding has well expand Food this Barrel stores. their IndoChino, Casper has about in by foot substantially Sam XX,XXX to and Sundance, investment Crate Palatine, founder Chang's later food

the expect year-end. to XX% over expansion We leased be by

National on recent of many you is who fire. Conference, at As seen truly the have ULA

assets strongest of a centers, in concepts the two completed centers. Overall, of another that activity market. great and best of the have lot value high-performing we've recognize our the We delighted across we're a variety

with So the over that, call to I'll Simon. turn

Simon Leopold

for the begin for the year-over-year FFO listed per good you, that by first $X.XX. quarter Thank supplemental. morning, FFO our share Bobby, of variances I'll the X on was Page reviewing quarter everybody. are and

AFFO of adjustments modest quarter received share our charge a $X.XX, settlement included This activism its per large resulting mall and primarily in in first last fair to was $X.XX market $X.XXX to all to from AFFO income. prior The of which in quarter related Simon cancellation single the shareholder the of relatively was receipts costs quarter's to shares of Property value on Group share a liquidation, due compares year per restructuring this lease unfavorable first very locations. of and variance tenant It XXXX. primary a quarter closing the change

to $X.XX of variances year-over-year non-comparable $X.XX interest were This the rents; average and and an up was of the centers, proceeds minimum of quarter. higher and to aggregate $X.X other Mall due rates San Juan, Juan included due and higher received in our The Center following: Our borrowings; business Beverly expense occupancy San includes unfavorable rents $X.XX. interruption

next We proceeds which of expect receive to claim. resolve an additional will the or so $X.XX quarter,

end be $XXX approximately the moving Now amount Of was of used X%. we refinancings amount approximately Blackstone new $XX at will the CNYX.X cancel on March, included about X.X% share nonrecourse FFO AFFO range into resulting will the announced are borrowed quarter. the this NOI interest guidance, facility to Embedded of to adjustment quarter. of offset as X%. Updating rate units income, to expected of be maximum Mall This to million impact lease in unwind ultimately includes the of for growth, stated a at in fixed the The amount, guidance agreements cash. $X.XX. a These financing which continue largely adjustments, related be sheet. The from XXXX. CityOn.Xi'an. will million. we in billion, above-market million we assumption And the the $X.XX to amortizing the which at release, from center and be on from of to $XXX of million been addition that mortgage an In the of per in to contribution of financing that an a translates accounting borrowing existing of This the proceeds last Debt loan debt, dilution center expect comp has venture, acquisition. XX-year the stated of all-in purchase positive has XXXX reduce in liquidity The balance $XX bears fully additional arrangements The the This Gardens repatriation rate in the of joint nominal the resulting additional the excluding X.X%. XXXX. by matures expected in effective in including impact several Garden net an rate completed

total unchanged. remains XXXX Our expense guidance interest

updated However, expense will breakout unconsolidated unconsolidated lower we interest associated Offsetting All will Gardens more the this the in unchanged. are and for of be LIBOR measures projections of line. ranges favorable the reflect year, The portions guidance favorable expense. other have which joint variance consolidated with consolidated the interest venture to the

the transaction a guidance remain the CityOn.Zhengzhou and a of Please the aspects loan track reminder, key note assumptions found X excluded year-end. As on that this on refinancing on supplemental. Blackstone from summary complete to of of before of We be guidance. the all can remain transactions Page planned

any activism. associated potential costs is exclude our future continue practice, to shareholder As with we

note payment yesterday's in million of which was is of also $X FFO second expenses, Buildings reimburse quarter our for a included filing, portion will currently You disclosed in in to guidance. should a but & their that be Land proxy not

call XX. share pro of we rata have said NOI Pages included on and in As we supplemental new the to February, on related XX disclosures our on our

our XXXX joint number growing Prompted we included NOI new perspective. of share the centers through for venture, full offer transparency the this level a owned historical into and year some XXXX and the clarity financials. have disclosure We company's of felt provide of will by of to

of our up $XXX XXXX NOI see, was million, XXXX. share As over you'll X.X% pro rata in

pro XXXX was These previous cancel back NOI turn lease I'll to income. year. numbers And the X.X% of rata with quarter's up exclude share the first over that, Bobby. Our NOI call

Robert Taubman

Goldberg for analytics With experience as like be strong would Jon add to report for commerce, as disruption we May Board decided thank to at service Simon. our Michelle Annual well to a retail Her Meeting. her announced and in significant reelection. joining digital Thanks, technology, has data public Recently, and not background will the recommending consumer-facing that Board, finance, stand Litt shareholders company the addition. we're to Michelle Jon time, unique and his to We XX efforts.

first at average strategic the of majority members Gardens a last the Board. transitioned With Independent great the important including have created Directors, productive years. female results, Independent election Directors very Director Over X the a our a added had Mall, We five bringing X completed tenure we new portfolio track independent the increased value. year. Directors, and the of gender period, represent our have X.X also to transaction, asset, nominated they an the years, new position we've Lead In to to of Board. annual will we We've remain start quarter We Michelle, on this X an and and leasing. with on delivered some to The solid Blackstone excellent diversity

instructions] So Michelle, Operator? questions. that, [Operator your take now are there? with we'll you

Operator

Capital Markets. Metz line BMO with [Operator comes the Jeremy instructions] from question first And our of

Jeremy Metz

it a in Great. on pursuing Asia looks Bobby, longer partner like Starfield. you're no

with spoke, times were couple you And it trading like there. so paper partners sounded potential of a we last in few

I you deal had to X think even pointer. It did. like terms agreed you sounded

decided there. or wondering go that something you just So saw now -- pulled alone happened got you keep so it you at where percentage? Was where to more you felt or side driven larger what was you for they like skittish out the should you it it by wanted

Robert Taubman

were complete, really closed Blackstone yes, pricing we things bring We announced way on the closing you simultaneous pursuing We we the down process the And in it in retail pricing. wholesale basis. know, of last you quarter. as a project announced Jeremy, Well, the both we're on once we or transaction. in a it Blackstone versus the our Anseong partner once gives -- is Blackstone, decided to -- decided we

went It's they by have To people They X.X incredible ago. their we're are construction part truly a seen market And going everywhere. people again, It very so to tremendous XXX,XXX Anseong. building. building -- progressing be over just biggest partner continues semiconductor the near in is time new expect leasing ever next And that once XXX,XXX house which -- I to in years. on us. right our and the The Once were life. And building three Hanam. weeks the And is, of budget. I've be there. and they factory, on Samsung there we're was I it's there. center an the And the towers in will the excited about in two well. again, shopping is partner to into Shinsegae people my growing

announce a back had more pull So we to we partner able to decision wholesale been retail it basis on in once a believe a that than Blackstone actually bringing basis. was from prudent

Jeremy Metz

then I felt portfolio. sense. call nice maybe before initial these doing quite sense it terms at shorter-term that quarter. reacceleration a size makes from those really was a made of were lease like the one If know times, here numbers just back, it There's bit or some that, that. Appreciate go down. That given of it you call in fluctuate I ones where your the we a can drag rents. the And last think last still the obviously beyond spread of deals

still small maybe much here? expect And a and Any we these initial too between and spaces So it should those? and here lapping it read therefore, just we shouldn't mix be comps issue Or are finally it? Or some doing into just there? back was better? is to just large color fairly that can -- down of are metrics see those you you go

Simon Leopold

Yes. on we're the think going Simon. do I in direction Jeremy, spread. it's right

on And XX%. that the improving. numbers NOI-weighted if see basis, number XX look goes could almost in you the You an to it at

generate less some so is doing short-term last about We're that still deals down that and XX XX. those. number We affecting of flow. The we occupancy cash are doing the spread. some talked we time spoke, We preserve to

we're direction. in last do we've right going to out feel we're deal I talked will volatile say, it's going there. short-term it's reasons And in we're right a getting are So but the direction. environment things the the not the for better, moving and we like still about,

Operator

the your Alexander Sandler And Goldfarb of with from comes question line next O'Neill.

Alexander Goldfarb

out morning good there. Hey

two questions. So

First, the and Litt. & Buildings on Jon Land

now stepping down between here there however second more settled want is everything we that's or so So you it, settlement, like charges or the is with $X activism you him the million ongoing? X done like characterize anymore, to in see won't everything any still and stuff quarter, is

Simon Leopold

Simon. it's Alex,

we So on in a accrue as them. quarters, exact quarters $X.X most average has and we activism-related the $X amount some between fluctuated. timing advisors. million We've make expenses from we they are incur accrued the quarter and when of for billings because the coming our estimates number million but now, uncertain quarter somewhere have In to XX

quarter, this in look estimates. we again, took charge, some And $X a for that, you includes If million example.

payment in a said wasn't first of remarks, there's quarter. known Land be quarter. it second I recognized the & That reached As the agreement the in in April so Buildings in $X that'll was to million

work in be still So going to was do of up will there April be it's to that that not some made in I needs the guess course things back we a to the amortize compensation that this and to And have over year. done numbers now And the were and will it's work that'll done. effectively really not some arrangements true guidance. that in certain up clean other and need while we're

the is for things don't in quarter. expense. nonrecurring the and second generally guidance unpredictable a it's we million $X comp they're And put that reason and relatively they're So in nature. the small will charge in some There our other them be amount

the arrangements a not There a long we're the saying So as and in more amortize. way done. compensation will bit that's little second be in third, fourth potentially quarter of those

Alexander Goldfarb

ongoing the resolved. just is now, stuff And -- that on when $X is to that like like not confused This seemed still stuff and it if But I point, guidance? all outstanding. put million as Simon, why still I'm know guess Okay. why in there's are guess L&B related was then, you the everything I

Simon Leopold

second -- before. things that be last It's in if don't. there them, quarters sort about said estimate more of will been We them reiterate the what we I in know practice I'll over But quarter. to put the XX as our we means

Alexander Goldfarb

Okay. just And Bobby. then for second question a

the perspectives. seven of people, now lot past nine years, have a the of certainly With of Board you new members a three lot over new refreshed

far anything was -- questions So there the the of their cetera. Board curious Board interaction things had that the of that been of investment if Just way not out or how -- level. that prior strategy, at that that or asking the they're curious with because you've of your operations, surprises, you a they you in asking playing as it's lot sort different style, asking? done be the Board may I'm refresh et some other that's the as

Robert Taubman

the table. -- had we their tension always sets the it. at had have obviously they that matrix people. healthy wisdom across we've that experiences own skill significant new many to and we're Board an -- it's Alex, -- And bring always delighted they mean Board. set outstanding has industries. we're the -- with on have I Their own skill that we all backgrounds, of we their and We're have sets

have We investors.

added bringing real the understand decision-making the have really table. retail. to They're Board tremendous and around estate people value who We the

healthy I the And that the have we that from day important it's outstanding capable a position, people a talked management refreshment all lead we very mean very But public. very in So place we're us we'll for -- of delighted. And the set the positive very them. very And important responsibilities robust of really tension to Board about and an we since time. Board. it's had put at went to director we

Operator

question of line Capital. with the your Todd from And KeyBanc Thomas comes next

Todd Thomas

about feel you leasing? like comment near Can The elaborate update you that question on that terms potential Bobby, on first Sears you're box at mentioned of upside And or maybe Just the looks it trough get the any talk growth is buying there where Sears profile and back on little Gardens acquisition. just a NOI. Mall you for and like is that term? maybe to the box in asset bit what

Robert Taubman

about Sears box XXX,XXX store. still It's the is operating. square-foot Well,

Forbes productive has Nordstroms, Saks, a stores the space recapturing And center. other years. we in at expressed Bloomingdale's, interest are Macy's, the of department mentioned stores, that number for all

for said, So we I of the years has made densify, would But made to period tried improve Forbes deal from there's a -- and a with Sears a Nobody's yet. had some Sears -- as location. I say, -- deal. that

of So a the new on the new has remerchandising. the the trough it food complete of center that NOI, come -- outstanding the True lux center question the -- center, into We native tenants it's Foods. the through coming have that's been going of number a tenants, in digitally like some mentioned

has there's to tenant important very some It's stable many cash to Obviously, And a owners cash on the to flow market The as way. flow led than are the just continued and tremendous volatile table. disproportionately. allowances around for merchandising those many, tenants to it that the had. So years been for a that's I'll excellent, are the lure this been has grow. growing the continues market say, market reworking under of more they've grow historically around demographics to,

significant play has also it the -- tourism also in and are it's market. that snowbirds So at

able on like have number And we're and efforts is a a to But long-term going this like terrific for is transactions basis. the portfolio assets So It delighted are basis. that in of it now asset I right accretive obviously, industry highly that that's about to trough is on. going this to last merchandising disruption buy the everybody our most years. an actually slightly dilutive. when for subject asset retail we mean it do on going is these is to be talk to a NOI, be rare on

estate -- So the would estate cash estate we we see. are flow probably otherwise out time. the passed the delighted. I disruption just here coming that And trough retail enjoyed for the ago. And patriarch opportunity we And XX actually the of mean about years not that away of actually has some see this the

the good there So was It good this good Taubman. decision it a decision Forbes for and -- a for them. for a was Family decision was

Todd Thomas

the the following Okay. up X% Bobby, that then The mentioned that -- on GAAP And cap just Simon, Was non-controlling cash is initial just you the Or clarify, that what Mall. for yield the you think like? the was maybe And cap market asset? share think rate high is to can that rate cap on rate for what looks Gardens I on the -- company's that, interest? you

Simon Leopold

Yes.

me in that pieces, Todd. little a take Let bit

with So tax basis below some was for in Bobby asset mentioned owned Their environment, that was value. they volatile years. interested the similar interest to portfolio in cash They transaction kind current here. the many their well more of in And today's tax exchange broader, similar find center really a wanted flows a efficient diversified to X way this to at quality. overall estate

to really other situations, value One, reasons. add of they're know partner. lot us know of -- mentioned us. is the And for are partner deploy in Bobby are like partner with capital Forbes the process is you doing even a who the They if they manager prepared with bunch stores. opportunities day more a there in also who accretive They wanted if preferred great a partner as is Forbes, it a we can our a department day-to-day. familiar

So our we we when was do that of is the time, on off-market the market for for answer, big the to you of with we mechanism a the how ROP at component, value? market this discount NAV partner is, right landed no current There a particularly which question them. at we And cash view one on transaction had both stock third-party price agree This was us. would such at and right asset The was were really determine value of that trading for same asset. units. their the though,

cap amount for use value is things unit. as acceptable it And us, But of was for a more would or a said cash today rights third-party our value For market a the would by all things that it's you of for we share for with affect out, the really in the where be high a GAAP it's cap be feel opening we GAAP this acceptable of asset, in a asset, NOI view was Beach an for for to was what a agreed below I really the the but to X% non-controlling the market is would this market is good a variety which notable That essentially the units, the it rate then make purposes estimates had partnership per us. One, what Bobby $XX with seller that's talked were NAV is for above price. we we and I make governance adjustments. We also that best the very available described. The than we want used of the Palm do necessarily the lower quality. determine factors a it couple resulted Millennia. feel assets a rate a And these for But what to discount we reasons. interest what consensus the NOI NAV -- our deal. NOI. like value. of Those want of agreement also together, to all things two It and in though, Waterside They remarks, like clear, looks before. When to amended not partnership have be. to we've really much. lot so about talk point the put we about

somewhere rate the than in XX use If points XX to GAAP might wider a cash, on are you you you basis. cap basis on were be to

Operator

of your with Derek question comes next And the Johnston Deutsche line from Bank.

Derrick Johnson

are partnership morning. good you you thoughts And relationship how growth wondering the you doing, future if I was could can Korea? talk China in with this What How quantify regarding and see initiatives Hi, you your Blackstone. expanding? about

Robert Taubman

flow And but them. our in in table capital of relationships, in well China as from demand smart brings to that their added network, Korea, their the specifically, perspective, to that value as if the Asia opportunities think now we'd hadn't to they way capital three, five disappointed found both a years on And of looking together their I four, behalf be look we place back in to clients are the from Well, and really lot relationship. remains. a that the obviously grow

if expand Well, -- we be relationship. So a be platform recognized in structure both the is? will over in us. that deal but found which exactly those their built Where we would over And with we they to there, that created impressive markets. it in hadn't time a two really that likely disappointed they -- way

we're And talking to and daily we're them so together. things looking at

Derrick Johnson

other And And the their notable strong Thanks perform to sales And quantify did Okay. down by was callouts? secondly, driven how you contributed can foot the maybe per Can mix apparel you category performance? perhaps, Tesla? square that any and electronics? much how break

Robert Taubman

And four-week then the the we January. positive as impact. that likely in as foreign about we well think prepared in five have was quarter shift took Well, And Tesla as impact, we and the weeks, talked us about Tesla was through to was what combination of we foreign even. our plus obviously Easter without I without very look the impact And -- at largely this. important. in exchange the comments, Tesla exchange been would talked the

that most about comp from against apparel the we very apparel, time year as of the ago. talked was I good. is those at that quarter that, the And in were that very areas was issue up up XXXX, of about talked tough first and And also think electronics, We which a other areas. XX.X% in we shoes about we're

I foreign of we Tesla of context say very a have pleased think that are we -- -- to the to the able quarter, taking out had be even with. kind exchange positive and taking result likely in we're this So the

Operator

[Operator Morgan Instructions] Rich of comes Stanley. the with line from And your next question Hill

Rich Hill

Simon, -- compared give think you give. that you that and on going it Maybe the maybe in maybe asking quarter's would've you how to would put start sort you you you beginning total us context last this guys. portfolio about is maybe which of impossible guidance on forward? to maybe question that's of of trended X.X%, that something help doing mentioned how I question appreciate report But don't you NOI for historical can an to morning trended call. growth a and you. I'm Good how

Simon Leopold

Rich. can I Yes. try,

guidance was the clearly, been folks not 'XX over year-over-year a telling part growth, bit results that and quite growth. a, those in material outperformance benefited then are they year. adding better we And gave did course that that's the piece during for developments the last a developments. surprising. of That a while that think from We've now of lot. 'XX And and were a of a new our the when big I overall X.X% the was new year

are So developments. of helping. San that lot things of the first over -- I is Juan that 'XX. mean that sort 'XX It's it's 'XX, a of the In about talks about growing. quarter 'XX less over

a assets best are of owned We wholly also -- lot assets. our

the look well you number. center mix, when comp so versus at helps that And that as

the to I think answer best that's question. your way probably

Rich Hill

the want Mall. to And That's in States. Okay. view of that back as fair. one to the We best malls I come United Gardens

about it Gardens your properties, quartile? within I'm properties? as your shakes of how Mall it out portfolio think within Does So rank portfolio does rank -- think it you top you curious do

Robert Taubman

about being median the portfolio. in our talked it Rich, we above

our is about portfolio talked also U.S. which square We $XXX about a where foot, is.

growth And say, time. is So higher but in we grow. that middle an the it's, prospects think excellent I it would has and right over component can performing luxury with

the And We every again, So outperform compared assets, top those great is love the of one just of to we six They rest to the the think, expect we're middle portfolio. at America. great But markets. now. above delighted think those it's the to look we something it's of assets. markets Florida we Florida. and game the in of are in time sort that right We have over one of

fourth the a with in is and great is great the four many family The assets. And over in is here Detroit. have one number this and Detroit partnership they -- Forbes one So asset years. many,

they've history been So and they a great partners. have terrific really

Rich Hill

know just mall? you but Great. managing a Who on one two quick paying And I And maybe are questions, follow-up. the interest? is management your fee

Robert Taubman

with floors all in the get you ones as the Waterside relationships or that the an to. at lead and They retailers in Millennia people. do centers, whether have step the Orlando. we of hand well, that do -- as they'll They team where We them paid And Waterside. managing they're shopping own and of supposed we But you. Millenia their at do their or various management the time. fees. we'll manage They work one center. are with And They They and at every have they for it. they off can paid work incredible mall tell eat glove generally we job. get the operate of take as leasing the let do But they're me

Rich Hill

really looks Bobby, on a nice Got transaction. congrats what it. like

Robert Taubman

you. Thank

Operator

next the with Greg question comes of And from McGinniss line our Scotiabank.

Greg McGinnis

I looks you bankruptcies what So first, provide higher to that information. tenant from -- still continuing it's than Despite thank to to says, ASC touched It say Simon, of I that you want trended. it useful find it be pretty took last volatile do like us. mentioned for environment. rent a GAAP the components have year. XXX And

have I'm that if So is I'm are about It in original the there your much. shifted underlying hasn't expectations curious changed, changed this if declaring drivers tenants you're but year? bankruptcy all? year guidance same-store worried Obviously, with curious NOI line this full now. at hasn't

Simon Leopold

bankruptcies 'XX. in did the first We 'XX did we have than quarter of more in

total for X.X% 'XX, the equivalent that fact, to XXXX. In that in was

compared that's to So higher. even And was history. it elevated

of bankruptcies, doesn't close. affected stores Now say, portfolio these have only to the, mean we in those And bankruptcies, remember, you so our to about are when they're by XX of expect close. going all that that or XX

quite on bankruptcies just will headlines. They tenants. based the pace overall this large slow year We very performance. look granular don't have bankruptcies -- on good it's as your a think So during of make do an effect that always at

you multiply four to you can't get -- a number. X.X% to certainly, total and So by take it can't the

closer on I But And or to affect you of suggest. guidance at for may we probably year. this as X% happen. much first what when as doesn't saying, talked year that see. portfolio think were historically, the the in as see headlines X.X% we year. We you for We'll would it about the X.X% the would have our something prepared

we because built go back sales at you the to environment the was bankruptcies. for conservative projected budget If they're The building time. in we better potential XXXX, than pretty a

year. growth for the sales early were outperform call what in poised so do over level we've of extrapolate we to in said, for still the for that of similar the a the that. from year. would that, still meaningful we appropriate given to people too the to the of significantly It's us year. that guidance first And in XX.X% And conservativism Remember, outperform XXXX. that really are have the don't I way reserves left I Bobby we course year. want into quarter built We've helped budget this at

in year. the first this not that of You've to close seen anything quarter

had pleased this a count don't last fruition, rely you they think us cost you helped really a in that on coming still actually And we this in had also can point happening to even us savings were that We outperform. line bunch -- outperforming had did see year, through that also at all the and can't annualized so that. helped we've there. year the and those last to of though developments on lot I of X trajectory year. And with very that we we're

So were that that it's guidance for we're think But all, and being this working we in earlier the a all still the on well toward we answer We long very bankruptcies question. track a higher. think your managing it, to bit year. gave we're

Greg McGinnis

strength consistently being last Okay. I'm contribution look Great. tenant next And drag you've to best about Do assets In expect demand, the a for curious second a the How of NOI of question, materially mentioned by significant assets? years? different talked how results you're tenant long-term you from generating dragged those properties you are those causing that the going are call those the few thinking couple properties are today. the or is you addressing perspective growth. Bobby, at growth same-store over NOI about exposure to that assets.

Robert Taubman

this and recycle we developed look and assets. many we how how we've many at many No And and time. a we're process assessing look like at When over make we constant had internally or XX over individual went sold we've is And you capital decisions. assets, have. here. Well, always we then when we public, -- how one's our time, we exchanged bought really

end capital were with in that because to we time. grow were The that. XXXX ones the few of ago we at assets for best better We recycling at the see the we did felt we would transaction years the portfolio is much what coming. the we of selling remaining the opposed part portfolio very position was positioning So the as a to

So looking able been we constantly. our find of the kinds deal serious assets all years. we way to for are over have many at with on asset easy but to actually reasons, an It's never

retail from demand best So is right. The assets. best actually our community the you're always in

years in We and this over point. best we our of our today, demand at have complete have very assets leasing XX% good

-- either in so a really -- looking a if group a change isn't and would I it for you wave competitive otherwise, of always focused. we that less-productive the there portfolio, reasons, up we if would and turns wand. just that yet lot and we're asset, -- And magic there's whatever way. or But And we're could

Simon Leopold

that just stats at I average add that, the actuals always our before weighted we look to average look to talked Yes. X.X%, total. the And our X.X% you about just weighted if maybe versus at being way. versus spreads

versus $XXX Our $XXX. trailing XX sales would be

quarter 'XX would occupancy be to rent be first weighted XX%. X.X% average growth the opposed X.X%, and in almost would as average our of Our

quarter we've the actual first had best that's that, So is I'll And the point years. XX.X%, in actual. the out that five XX.X% actually

end just points make portfolio always overall of our better. this to assets. quality it to at top trying We're the the So

that with Palm acquisition. Beach the Gardens see You

opportunity do going an to have we absolutely if So to that, we're take it.

Operator

question line of America. next Craig from Bank comes the your Schmidt of And with

Craig Schmidt

is third Somerset others like Detroit? Collection do the like Given JV-ing potential now you you, Forbes Forbes in any with with that The mentioned Gardens and way is JV they you Properties' had in your clearly there

Robert Taubman

asset. the they Whether own involved We're and we're up asset Belle out a take in Most great delighted country. families the of that own assets Miami time. own at that with. family. family great with Seattle, been in it's Well, a South certainly or own incredibly the And what? whether it's multiple that it's they the assets or things few down they one one that Harbor And one Bellevue three are Coast families asset, we a it's positive Plaza in for Segerstrom whether in high-quality

able for would the to or they've and in what in United be to assets -- the X% There top top, all of States. unusual the is Forbes X% control So They assets. are XX% in all it four to been great States. assets the accomplish United top have easily

Craig Schmidt

do Mall Miami And know you Worldcenter? if they're the at pursuing still

Robert Taubman

and space. effort, on leased. the the leasing We've but it. the had we to move And certain into lead are project is They're we the we to complete once want Together, taking leasing opportunities working Yes. ownership if -- if we we on are would involved. are also

Operator

question Caitlin from Goldman And the of comes Burrows your Sachs. line from next

Caitlin Burrows

good outside Hi, the of morning. just one pool. Maybe question same-store

and You mentioned Center added think the that Beverly Juan San I -- first was quarter. it in year-over-year $X.XX

additional and the of those over forward. just course year this could properties on of you incremental expected I So growth if maybe the going any wondering was two color

Simon Leopold

Juan Well, we That's we $X substantial had second $X in to the We're least was business in had what see at another expect continue interruption San in million. that we quarter. a million. the in It guidance, settlement first and quarter. expecting to for fairly our insurance

San say Juan Beverly Beverly and Both better. quickly. continue to improve. have returned to very, very have sales continue will now So that. They I you do do that right Center,

that. is The Beverly. where would they going cash fact, thought Webster did year, able very of than at seeing sales good the with still finding there underwrote stage, and floor renovation. eighth Total some a historic what to more quarter. we first were lot 'XX, there. for of We're at filled. we're like Total still things A San the and then upside Beverly better. And are opening this lot get getting seeing there highs. versus 'XX. this is hotel the we end quicker we're up its XX% that complete food on to being the near versus 'XX and we we're locals, was but to. is we'll through them the working to got In that really the trajectory of of feeling opportunities excited But about there really Juan XX% There's going We've up expect do lot quarter a are be the rooms toward we're the will we we're pre-hurricane to on shoppers which of not a flows And sales were legs. think the of great, in be tourism that

So about all we're happy that.

We are We open. stores got XX leased. largely

hotels The and food lot with and hurricane. the with people are reviews, they good there. the of the of getting reopened, airport were hotel where With now before the most lots even happening number actually lots And up. the of of passengers a showing our things suppliers are

was happy all particularly San So we're guidance. to proceeds business in happy in there, the those. about the trajectory coming And fruition are that we're our interruption because of that Juan,

Operator

the next St. Haendel your from comes line And question of

from Juste Mizuho.

Haendel St. Juste

close sales. I question's Hey guess So on guess Hi. enough. my guys I

obviously a them bill There that loads. looks appears folks, openings tax And forward. I healthy by some that talks going thoughts like lot year. held in year. earlier been plan produced were store You've sales closures XX%, has what's Do especially It blue by to this U.S. this on sales the on put going A only expect during very shocked horizon, overall of less in consumer you forward? guess headwinds then luxury not was maybe debt number potential stores, states, up open income Tesla. trends -- the latest quarter, some of potential on store on It rising I'm the retail just anymore Tesla? curious, the hold.

and So Tesla sales conversations forward. your on just going portfolio on curious then for thoughts with

Robert Taubman

up think I been expanding the to which would the seeing announce suddenly number had in is announcement. They our and with I us top-driven first but sector. with were our that just incredibly an first leading discussions I about everybody we been quarter, quarter, think, have all stores. their decision They Tesla's, say to their sales our productive tenant, have that weeks not Well, us impacting surprised in of they results across stores by of closing

I can't -- their tell very future to in a got for very tenant be you've holds operating what the a way. stores them. seems you positive So that productive

with they the You talk us. back have with doors, their them. close a leases the -- X one to and was to closed said, just had we do one plus really think obviously And when can't had do They that in have once stepped X I we short-term recognized have want do Well, otherwise, they of would have this? Korea. lease. us that They of we have we But to locations that you

that of out are right really, the nine So operating.

in we our to So shopping car would love XX. continue We they're will two for that center so we actually them unique we to more In have we're there, operate. think had adding and Hanam, X a use. dealers

it's nonetheless, are to but gaining here an proven make for the traction. that U.S. come issues idea dealers complicated it So There more to it clearly be seems that is malls certain into in can it that has something would that work.

that Tesla and -- think the I So addresses question.

and our in an productivity whole sale are very selling -- the we lux in and our a end, -- operates. lux And luxury have critical for the are sales at abatement the is we stores that question, comments right how On Fashion you of seen named prepared high now. not gain. right sales list fashion

lux the really it's -- one of portfolio we customer. is strengths of don't So our see today the

So apparel the we're through and yes, even we full concerns -- good that we're moment, all and but the a as for things like seeing are the over areas electronics. growth big go questions in and mentioned 'XX year. you growth seeing And back

gets that Haendel. think I So it,

Haendel St. Juste

guess market when, follow-up what JV some helpful, acquiring got of tell -- Gardens. maybe lines That's you question further on another I earlier more interest. us can interest, curious on for I to Bobby. perhaps JV The just question appetite the for I'm your what about on curious

out in -- are market looking? -- interest malls? sense seeing perhaps your Beyond you appetite Forbes, just are What any you the for what in of JV high-quality

Simon Leopold

just doesn't the find the that a would for we like it's strong. it's a is that If got are run really leverage, I with and Simon. a our else. it wants to do every operator There single market said, It it's to Haendel, of do asset we is earnings, the as and opportunity long it. transaction with we're partnership. to that limited. that's And exchange the family not do has to we there way adds increase in a can to find situations great as where a time did things be going The it right extraordinarily additive way to portfolio. something say, doesn't these can a like Gardens That to no extremely ton broad there you've into generically,

to find to The what whole we're other open able love did. There lot extremely out a just aren't really to So it. do just exactly of opportunities with there. we We'd to Gardens' happy be We're deal. them

Haendel St. Juste

just Got call it. higher in, if or at material a obviously, too And what increase, or I let's was one $X it like there it. the construction squeeze so, Got caused question. perhaps last if it's Hills. pricing costs? Green on Not it, could And any but project small increase, the looks curious change million

Simon Leopold

that's honest, research something of in that that's But one saw public We to Yes. filings. notes. be not the in written Haendel, our

been I So just think misread have may somebody. from a that

Operator

Christy next Citi. question And comes the of our from with McElroy line

Christy McElroy

than some the follow rents, question on imply fees, usually on out above-market it management the the NOI. debt Gardens just terms up the is trough figuring I in you versus but mentioned color at to impact? higher management cap The you rate you Richard's driver is cap the Thanks. cash then NOI. would on But why impact the the FFO can give that did fee full of GAAP center And give on guess impact GAAP rate? on

Simon Leopold

you Gardens, from $X.XX Maybe the year. between that accretion that somewhere the and of dilution The -- We think Christy, basically year, $X.XX you take would first. where about offset is add get unit. the $X.XX FFO I'll full the if That's by second for had a part of

feel, an to to at process at a the they would to after We at -- very the to a number very figure and you at the all costs, looked -- or today, gotten of the in GAAP you potential to value have rents. a we they rent asset did you would of asset a liabilities when that it's end assets in after today's debt be point it Bobby grow lowest and as revenue we there. and has acquire think every price And you granularly. the that look together, And up they're a at said down. look it close the finalizing tenant, look from up purchase When that expect rents things. be out point debt, at look perspective, really adjustment of market, are to of that where it, and take the marked look you reasonable poised the get earlier every other it's paying, being NOI all will to do every sort amount We really we from try they the piece, end

much see So they tenants irrespective that the the think where be. in you are here GAAP see of in second should the place you and rents quarter, the what with pretty be adjustments, which we are will when there

Christy McElroy

Okay. I an you at of could what it's the That's if your assets helpful. with update wondering on for guidance Asia, And -- each of then in just expectations the maybe not on are that just understand all, provide closing Blackstone. but

Just the that for trying sense parts, earnout? for relates your to get and moving a how expectations the to

Simon Leopold

Sure.

recall time one that to it you'll other closed at down as serially, at X need one was needed Zhengzhou will occur least were pieces of to the we from going quarter over we you in each to correctly, have the we and done. second that then we to joint were well. U.S. X the said JVs to are refinancing that to loans were ventures. X really joint said recall to which in about serially. hoping sort bulk closed The that has related of all the there And of the debt got will this earnings here. from more on the X announced all did The Xi'an to and if are assets almost and that are occur, -- them occur Three the repatriating in accretion JVs ventures pay So there in the of the the already -- presentation, deal, close to going I'm those close. was when of your rest really time getting accretion really cash the try The and we to course they've year. that at done the then the But --

are to And we right to is continue we thought think still not now. It's it's will as go. see feel as see We where we as as -- update that We We'd happen. exactly we like in out, to we hard as uncertain get that we possible. we're closed pointed done. because you where guidance, getting just when like announced it. But were would get this deal to But happening. them accretion working like to as you much to what it guys as quickly going you no to to certainly impediments that we're

much That you helping. where much is tell we that. the is over terms very helping. give year I earnout and it right are as isn't It's year. that year. but simple this day, isn't NOI if affected not an can in this the currency, potentially the we of assets how you end very by we'll above then an really give we which, for a really the on That's can't the as update grow Asia At the now actually early hurting, earnout, still update on continue too go. the a against of last time, on In in calculation. It's you of well, to budget the outlined NOI course I can perform you of

Christy McElroy

to it inherent pool in you are given those be the basis would that of this XX is was -- But your year? three What the point for just that same-store a same-store X% forecast the assets impact now, in negative all impact FX that quarter. FX expectation

Simon Leopold

XX It's small. actually much than the less basis points. It's very

the XX I if that against naturally If year, course of basis of the are really the continue today think it's does not of will to year. over course the we of because on the the those last you that the XX you strengthened continue course of currencies order effect dollar of to where the comps currency flat And points. saw -- we because year. lessen see over over that's

So the based little really year on that in there's X% currency number. very impact

Operator

from Morgan. your Mueller from next JP And Michael question comes

Michael Mueller

one for one. expansion is Green anything in Just there shadow After quick pipeline the redevelopment, domestically development? Hills,

Robert Taubman

in a project say substantial would I not that. like

we're repurposing. big minute. this obviously boxes have ourselves There find we at We that nothing may the looking are that

We Gardens Sears the store. Any repurposed. Beach now could those Palm have of two get stores plus

in And have a substantial Center that like significant also could boxes other that of like of in Green have kinds be nothing but in So expansion a the addressed, other those or the front was Hills certainly that of few are us. there's there. renovation things we we centers context Beverly

Simon Leopold

I'd that's all putting Nothing other that's but about called even Plaza, in the country only capital I'd of Mike. and say shadow. thoughts going what now, close we is, And as to are said known Yes. top thing Nordstroms add projections a Bobby forward. our

Operator

line your And Okusanya the from of question from Jefferies. Tayo comes last

Tayo Okusanya

two ones quick Just from me.

sort about The this first crystal talk looking could bit over to short-term retailers stores you're of a a bit just start and leases a that think you store a underperforming some just few of kind about of years you of store but just next when all one, talk call go rationalization in the things quarter. through could kind of doing -- ball, their little you slowdown did could you as about a the It's kind lot of their count? talk and

Robert Taubman

their the Well, in there all omnichannel XXX. over malls think based decision-making. question happening be in the of transition X,XXX that is some to they're lot on a top take about I are time. talked in the And We've is sector value our that's the going footprint view, XX% publicly America. of And that to their going no with of daily And world. there's resetting that the

you're gain sales and all going to assets in it that, XX be that will to big five as gain start about to assets, for in valuations. years, And those market years? increase really going the market the as going think to three to to share. retailers. It's remake. take this years, you And great They're grow great does, will The when are will time going NOIs it So transition. more are

I rationalization up is, you're all meantime, all be retailers. emerging with So the frame tenants footprints time that a And going And native in in seeing is locations. digitally on anew. coming that great of don't the these but those again, guys know have what the to that they but -- are lot we still want of and

take So everything it's is of going really moving transitions well quickly. And that our And but sort toward to aren't and the hurt a -- positioning time. company. companies -- our positioned footprint as

Simon Leopold

losers. and winners create No question. Transitions Yes.

Robert Taubman

true. That's Yes.

OmotayoOkusanya

And are then concern now what you of a classic helpful. of us, That's look maybe looking Or kind that kind out retailers, are with more are behind of struggling? retailers to Sears it's in who at, you as a seeing kind lot kind you're take in-line-type anchor most still over weak the boxes? more of regards of

Robert Taubman

is think over saying, question to anchors, that there's the with isn't seen Then shakeout a closes time, store I X demand that, hasten and real was we've years Well, in that about. In it. to shift Sears we demise and the a if of pool the you're no that force that Because then other accelerate and seeing good as it's starts a in in large a tenant were same to going great anchors there location. happens over decisions process. make what not emerge group. their is talking a estate specialty new the once lot that box the last I decision asset answer for closure And

be densify be find other to continue good we the -- So you it you'll not -- you'll your and they property outperform. demand retail, to and good have if in there boxes, will put that types, other able there markets -- too. if will and will But assets,

Operator

at this And there time. no questions further are

Robert Taubman

very you We for the And you of still to forward those talking you. look thank months. coming Bye-bye. listening, much. Michelle, you to thank in

Operator

call. conference This does today's conclude

You now disconnect. may

Taubman Centers (TCO) 2 May 192019 Q1 Earnings call transcript