SITE Centers (SITC) 24 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Brandon Day-Anderson	Head of IR
David Lukes	President and Chief Executive Officer
Mike Makinen	EVP and Chief Operating Officer
Matt Ostrower	EVP, Chief Financial Officer and Treasurer
Ki Bin Kim	SunTrust
Christy McElroy	Citi
Todd Thomas	KeyBanc Capital Markets
Derek Johnston	Deutsche Bank
Alexander Goldfarb	Sandler O'Neill
Vince Tibone	Green Street Advisors
Rich Hill	Morgan Stanley
Mike Mueller	JPMorgan
Chris Lucas	Capital One Securities
Michael Bilerman	Citi

Call transcript

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Operator

Good day and welcome to the SITE Center's reports Third Quarter 2018 Operating Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. to conference like Day-Anderson, to now Relations. Investor would turn over the Brandon I ahead. go Please

Brandon Day-Anderson

Operating may and evening call, Chief Lukes, be Chief hear today's for Ostrower. Matthew you from Makinen Please Chief Financial Security our and David Officer, Officer, that may statements are forward-looking statements. today statements within uncertainties Good our These Executive you will actual forward-looking statements thank from certain joining the to Law. risks differ meaning of constitute aware of forward-looking Michael and and Officer, results the us. On materially Federal subject

about that uncertainties statements results may information filed including SEC, we and press recent could forward-looking to in found cause today our earnings with on XX-Q. the Additional actual and risk most Form and XX-K be release our our documents differ reports the from issued that in

non-GAAP will directly and found of FFO, press net release our FFO, we same-store, our be addition, release. available supplement Web in measures quarterly In the on measures financial discussing including at call site can are This on be Operating GAAP measures non-GAAP www.sitecenters.com. to reconciliations today's NOI, today's financial financial these comparable most

along Lukes. visit Officer, Investor who on is Executive pleasure today's you those At time, sign webcast. to this Chief page For the to our David please it into my of would and like presentation events follow Relations section the introduce our phone during of the earnings

David Lukes

plan average we Day. Thank you growth those event and start by who thanking of recent attended OFFO that presented you quarter a deliver you, joining to At Brandon. like evening annual I'd earnings Good and thank NAV Investor call. third for X%. to of five-year our our

originate from this growth expect We sources. three to

XX annual the far the a NOI growth, is opportunities X.XX% portion same-store and plan within First average from portfolio. most of impactful releasing which anchor our generate large our an to is by

and company can five be coming Nearly significant significant over of we we on quarter. we with to three-pronged on upside. of $XX third years. accretively made do growth redevelopment advancements expect capital average everything expect reinvest the properties acquisitions the return each we framed this X% to generate on and returns during an And approach by Second, as spend finally, annually million a

the of our NOI of NOI the rent by we of NOI side, On operating in growth will product which with Michael that by offset posted part moment, anchor quarter a in X.X% discuss I'll from summarize ahead strong and same-store we active commencements was bankruptcies. a budget compelling but key from of leases economics, leasing a variety indicator saying leading for a very activity future had growth. lost

assets not for budget for additional Our wealthy robust. dominant the and fact this our demand in but portfolio obscure in of assumes tenant remains bankruptcies, communities XXXX beyond should space that

as part our redevelopment signed will quarter. Lucky in also expected the West Kmart the than of we the with including We pipeline And last during and be Bay redevelopment location project supermarket, Brand remaining We Cleveland Boulevard our of budget. advanced delivered ahead anchors replacing project. of which initial key and leases our phase earlier

entitlements. And multi-family. make to potential extremely to demand, progress of these well-located that's well. continue have that these we significant on three depends of highlighted latter we're pipeline our have recaptured and phases approvals enough of demand variables, time. Commencement approval piece. we We as each on tenant the office these then users address is tenants, And hotels projects What entitlement. number and assets Day, the where of remains recently from grocers, including spending a tenant space Investor tenant At

Melbourne announce, process. we a first of I'm move from our deals Sharon we'll also for purchase planned venture opportunistic our our plan of next program, the the provide portion of required and updates the in quarters joint million. and several two combined be with assets $XX in in number to Square as on two the entitlement business Greens municipalities a to of front pleased expect progress We large through the the

power. it acquisition redevelopment rate, expertise leasing You tenant focused from will and should geography by program all through near-term expect to share of key flow local supply protected our an growth involve cap recycling retail application diversity attractive to cash relates to valuable ability the large certain and characteristics, as But roster. locations format, and significant the and our achieve spending enhanced superior

near-term the and strength first potential quality anchored. of forward. as They two and to assets as for programs leasing acquisition our additional well upside they redevelopment grocery Our acquisitions demonstrate in programs share going characteristics. those opportunities the They're tactical provide have the the both some significant JV and

We the capital hand long but that, position. value, meaningfully to with and Mike our unlock way opportunities And our and have for months, on XX quality just on I'll come remain our call of focused some a estate real commentary in quickly to improve we sourcing over the operations. demonstrate

Mike Makinen

Thank you, David.

ongoing This perspective a high extremely with from quarter volumes. productive leasing leasing was

and which historic downtown signed a what average. Box of new in Toys are Wine mark-to-market over including where conducting lease with all strong with off over spreads is at line cinemas These historical at X% and renovation an since are the Park our by with in include Post. of high rent. a effectively spreads Trading right more leases gov renewal four caps San and significantly the leases credit anchors we Sierra we quarter in there the Total Ness higher Buena with spreads accompanied at Notable quarter Francisco deals ULTA CGV vacant exciting X% operator roughly combined Additionally, of third property the retenanting Day XX%, near Los Van an this Investor Angeles,

with economics rents line month trailing effective strong Another net key similarly was of XX numbers. measure in our

represent these to merchandise clearly lot with compelling space enhancements leases mix. We Many our the returns new a getting process. are of and leased in of

areas West lineup will program including new last of $X The its Bay opening HomeSense our generate highlight tenants quarter. Fresh after savings page the encourage was and This and safety our of and illumination quarter, modernize view of comprehensive than mentioned Thyme, commenced our Shopper's earnings and also We've among I slides the photos program improve operational I others. you parking the for to our energy and at some would and X earlier ULTA million expected both of for the LED visibility patrons. centers before for World. and

two a LOIs stores. to Us, R identified position Matt. and business of short, to our of for Toys Shoppers negotiating the four SITE's the portfolio tenants spaces. Point by quality for want World, is hand lease remaining and us. the from we six the the these every our we were do leased box in in we single are at credit bankruptcy's There the leasing estate quartile the or have original the compared are and or for several stores prospects and operations consolidated in in with that, In a of mean SITE stores, Finally remaining a Us the years. the tenants downtime Overall, Two With portfolio. last top XX on will to really the Perimeter drag a in our and today on better be Toys teams for R country's of assets quality demand by our over as redevelopment but XXXX, steady to encouraged to I'll acquired. It's landscape of portfolio the of SITE are six retail NOI tenant as are real across well call testament same-store tenant

Matt Ostrower

Mike. Thanks

remaining asset Our cost balance of is securities sheet a preferred expect well-positioned remains in fall would capital are as sales reported and completed term and we almost decline in full Blackstone continue venture a from to RVI these our and adjusted leverage joint EBITDA. Full payment two final repaid. to

our line one quarter maturity X Our years of highest in last remains is weighted average in the roughly with of sector. and

said, As now are earnings finding on I'd to on focused a growth, capital while we focused ways we matters. perspective. and value like on accounting comment are unlock and equally from demonstrate to several David

unchanged. $X.XX Investor at on our guidance First, we as October Day XXXX remained X. $X.XX well the introduced that In it FFO of guidance behind as assumptions to

time. decisions and would the XXXX underlying We at also that the disclosed particular the details transactions XXXX expectation from In XXXX. impact and assumptions and

with JVs will other of to continues its Blackstone As know our as fees unwind in a that venture and well in decline you us joint cause JV most asset sales selective XXXX. as in

current year come and from JV had and We XXXX consider the expect trough the $XXX,XXX to asset of headwind unlock offset the cost from XXXX the of we approximately equities. value we project dilutive is vacate we full since have XXXX. high that rejected. income spaces firm as for XXXX A XXXX third Ness of expect of we in JV year of operator impact Mattress be will In our to capital impact sales result combined bankruptcies. profitability which to in Van especially January existing to quarter, to CGV utilizing finally, The whose January was or and in open Us felt flagged be redevelopment only and And will expect R already XXXX Toys NOI. closed not that we have impact our second

to project As remaining no NOI program. our facilitate there line beyond in Day, is at come we redevelopment Investor to slated order this said off

statement an from detailed more effectively G&A [calls] a You NOI. the expenses decline by RVI net reflect additional will G&A million G&A, in in expect has EBITDA, deck. attempt our XXXX fact to that been in our This same-store impact of and order RVI therefore RVI sales. expenses the no assuming OFFO guidance sell GAAP flat is fees [ph] will $X.X were lower XXXX reclassification will properties or some note that closely reflect on make in operating industrywide third our our practices. as fees a as Staying and million NOI to guidance only $X geography In has FFO, no the in income and for topic asset Slide income, change lowered quarter that of result. on G&A do earnings on classification to We XX

will for and in headwind between would the liquidation expect this XXXX. RVI fee until While preferred some we G&A We a certainly expect one ongoing XXXX redeployed. shift offset RVI lower XXXX, FFO to in repaid declines one from and relationship is almost RVI

which preferred front, reserve that evaluation additional with our disclosure remaining the of Blackstone venture $XXX received in $XX balance preferred see On the JV, our will transaction million. million $XXX the with you brings repayment receipt of of net associated we joint million over to total repayment securities of an

determine to the reserve us levels Blackstone to quarter we asset million. in leverage three to for receive threshold preferred are valuation downward sales million XX a the RVI several assets We marks an over pertaining have to sales site X.X% in the As recognize but in million follows resulting period underwrite. reminder, of in first million get to Switching so on as the forward. value and to quarter. the yield asset investment the of $X cutting prior after $XX from the Puerto JVs book a consolidated centers key financial of great reducing the related asset RBI $XXX earnings assets, at which quarter a just approximately the making small every those sale dollar of of focused Since a securities, assets to interruption ventures these statements. more equivalent lowering allowing resulting equity spin. proceeds variety in we have market and easier XX% achieved ventures the XQ, in last SITE decrease XXXX established by remaining going value business Blackstone We're securities the $X.X assets we joint by and then This of spin, consisted of original to the each September rate. XX Rico paid in BI of mark to recognize quarters. of We Blackstone we progress to all assets income reserve the current X.X% back in selling our book XX that a cap of portfolio upward

closing to RBI owned the Centers the of hand assets of recognized by million note impairments immediately call please million prior spin total to David period SITE we With some rather than back the the the that, was related that in assets $XX today. to for I comments. Finally will $XX

David Lukes

you, Thank Matt.

brand communities. center company reflection a the the fact new our SITE's at of Our is of are that

happy the about our about the growth our team know questions we about and fuel internal line growth. to to drivers and the turn real are external that We back will be opportunities We'd answer our and the operator. enthusiastic estate I'll

Operator

Thank you.

begin We the Instructions]. will question-and-answer now [Operator session.

go Our first Ki question with Kim comes SunTrust. from Bin Please ahead.

Ki Bin Kim

Good Hi. everyone. afternoon

You the have the cadence next NOI about we moving few think year? a of should over how So same-store pieces.

your lose boxes, a You And NOI you will leases accomplished deal, on then, -- dark. you spaces. those go some from have if that lot have have I towards I anchor

think XXXX? just in about run should So how that

David Lukes

would would huge Hi, It's but kind half Ki of favorability I Thanks more question. in back some Bin. loaded, it I half. that for end say difference your generally not back there loaded. call a the back is

Ki Bin Kim

thought XXXX? still historical mix about I that And quarter It running than about into spaces a higher the cut smaller trends. question and CapEx XX% this and on bit we like you're this spent seems one sorry, because should value. of rental Oh, your quick off. towards this think of just how was CapEx. percent a Is was heavier little

Matt Ostrower

lower Well, way in I would say little we bit CapEx the it. quarter was measure a the

We have portfolio now. a smaller

lot. around quite bounce So you're going number to see a that

obviously lot of time period. leasing say be at to evaluate you the raise would kind really But should to that's CapEx I As of the numbers when a numbers so Investor anchor we outlined do, for have we XX-month a trailing going you Day, looking in that.

Ki Bin Kim

Thanks. right. All

Operator

Our Christy next question comes with ahead. McElroy Please go Citi. from

Christy McElroy

Hey Good evening. everyone.

on from Just a that last Ki follow-up Bin. question

said the two XXX,XXX And think point termination in you boxes, anchor was the to higher I XXXX. proactive on CapEx, going it the the Just to of feet. I square be

You XXX% going boxes retenant like to boxes a talk up that, the spreads presentation. lot so it work But releasing you're right requires as about assuming larger to that CapEx. break in to of have those you the

and are a how effective we clean questions XXXX? I CapEx run sort on So net two is about think basis guess, a XXX% should rate for of that the what

David Lukes

we've those very mean I we've dramatically that had right. doing quarters I see that about months expect over And to up saying would generally, clear say XX here. those I I I'm I past think level doing We've leasing the say can not inflated. Yes. have the would that of ex-number saying we're I anchor be months. that, they've as lot think leasing several anchor they are of so level been the numbers, been high for a go numbers going don't from here, CapEx as expect you so can long going last and relatively you XX the CapEx kind now, up let's been been think a at from in stay CapEx of higher you're dramatically

of a onetime have We number items right.

program inflate I to bit we LED say much sit little where the in don't the that's number today. about talk But artificially, the we I a higher you're So trend going sustainably short-term. to would think, going than see this

Christy McElroy

Okay. And then…

Matt Ostrower

bit talked that as not the on a well. Investor our of and center. boxes That's shopping I Day Examples one this Kmart [indiscernible] am David little about about David, the

Christy McElroy

fee why get XXXX. $X million with and $X.X And you then, that a you estimation the at in the just it with what was discussion regard estimated to least on headwind is did consistent quarter original mentioned provided what from the also originally why to lockstep. million in fees, in of XXXX fees And in you sort disposition move G&A the third maybe of it, excluding Matt from that's where obviously the more would of as RVI load guidance sort to wondering raised wouldn't that that for be? little be? how you your color Can provide I'm the

Matt Ostrower

Sure.

you for remind our least that I million. at $X to your on first question, So want guidance was

million the targeting had number of we visibility on. So was absolute weren't we $X kind number that

out to specifically. not those happen in want as we forecast those obviously disposition You pointed and transactions come fees did

to you in me, example remind We specifically well. I'm guidance which some of did the sorry, part forgot. for I nature Christy, not those transactional question your can as leasing degree also we And in second get are commissions our because provide

Christy McElroy

Yes, sure.

the XXXX I mentioned I was why just from to headwind the wondering in would in guess lockstep XXXX. You was decline in your then, decline your, But that a in keep your is. it that question how move happening. there prepared was an answer in would RVI about in remarks fee that in D&A

Matt Ostrower

G&A we have Yes. can significantly for Look time a there right already. we cut is period, -- a very and G&A cut

So G&A we losing limit. completely model that of terms in some match can get But be -- we cut over kind can't as is fees and declines we're things clarity RVI there be definitely time. At more the point that We'll on out providing as we too There'll that those of a XXXX as will be good we in that. well. well. all happening

impression to that's a about for as as leave your modeling for So you massive something you negative to the with the I thinking well. you but are want year, be just it's doing don't

Christy McElroy

way sort ongoing target that G&A a about winds management thinking an down? should a agreement there as we Is like the be RVI of

Matt Ostrower

Yes. early us Christy. specific too bit It's that to just give a on for little guidance you

we So you ourselves. the like if be we'll through there get go specificity I more more giving year said, on we as clarity

Christy McElroy

Thanks so right. All much.

Operator

next Todd KeyBanc Our from with Capital question Markets. Please go comes ahead. Thomas

Todd Thomas

Hi thanks. afternoon. Good

NOI First softer you in other of some from rent to were third of terms quarter impact came receive [beat] were the there of than Us what [ph] question, growth was same-store it drivers better What your expecting expectations? versus quarter. a and second considerably continuing the Toys in from the and the I R think

David Lukes

over second. left. slim we our a that start got quarter properties to like But, than by you down I'd And to Matt hand less in you to I are expecting think to saying still preface I'll a Todd, that numbers need it XX portfolio a lumpy. when

near a past with recent through firm. that bankruptcy Mattress the have in We working we're

cognizant enough. have uncertainty we're ahead we budget headwinds too other some the are definitely being although that on enough of there's there So just been that side

year. but pretty now the the objective can comfortable our Matt by the more give So same we little you end feel of leaving right detail for a

Matt Ostrower

Yes.

about earlier expected I year quarter. from have favorability fees think payments then, the we And every third David's number. lumpiness, came some to a some that RVI did we numbers stronger make And et those as point quarter really and had every through happens to cetera. and onetime helped

Todd Thomas

Okay.

Toys, I of the them? received this empty any missed at detail you think you on of of have some control boxes they rent from October have point, are all all I the and may but have do of

David Lukes

redevelopment assumed never Remember, portfolio Four World can are case that SITE Perimeter leasing. for for them, and that interesting to Two see we're boxes study then up can purposely the in therefore of and leasing are wholly-owned you that say And Toys for behind them very they Centers XX is vacant Framingham our plans portfolio. the in this And rent. Mike because promising. in were were holding there company some detail we a stopped Point. at paying are progress. extremely it's suffice Shopper's down there six But give of

Mike Makinen

the four Right. Buena working out on, Of one LOIs] we're that of in is California. remaining we're [ph]. And it's active were active and fully six demand them. leased lease of in all the very, for been negotiating [on stages One, Park, very

Todd Thomas

indirect And direct last Kmart. or ahead. that here, about exposure either noted as I But, potentially how be company to question or think What just exposure there arising. vacancies malls no you the where you've there major Sears curious are near of some located your being just was centers you the Kmart might has boxes have then, Okay. some remaining you think near seeing

David Lukes

comes the are I been for curating left the you about have there. prescient How years to their be think going of to And we They does entitlement. about more there Kmart. with assets. we tenants it's earlier ended It's lastly and mall market. their a is there's down majority is we inventory bit us recall, what's to this usually is mall then, when I to portfolio that's wealthy us Rarely in immediately in think or assets. surprise properties reciprocal future, a are the include easement municipal think for dominant back be look surrounding very imagine And question. that tend communities. happens now impacted said written future, tenant and all a that different one other of thinking think tend I if up can to you what that mid-market. restrictions, for I much at inventory how mall demand much buried The when zoning mall Since It's agreements a no very, of properties very a two assets mean control asset. words what specifically We our Sears lease and things

definitely so Sears red a multiple And you are changes get than through many different traditional two tape that loading Then story layer one buildings with are the to of more on that stories to of complicated grids. top mall center. the strip docks and column a

a junior just different it's air format. open in boxes so repositioning an business than And

this that of minimis. say portfolio impact that with would de I inventory is pretty showing SITE So we're the kind confident up pretty shadow Centers of the

Mike Ostrower

was I a can Todd of a portfolio that on anyways. locations in will is, more. which really topic, the would our show in portion you things small terms as And kind proximity and of to I But there's of any add helpful. very thought [indiscernible] report report proximate really very I you that's you noted down

So Sears R we fractions Us -- huge come of a of it's question just, to exposure. paying about your rent. you I start answer just think directly about Toys didn't fractions it's wanted I don't back, and And fractions taking

right. now Just -- are now at to they all they be at, clear are all

rent of we any they those So lease. were boxes the assume today getting because

Todd Thomas

Thank helpful. That's Great. Okay. you.

Operator

go next question Derek from Bank. comes Our Deutsche Please ahead. Johnston with

Derek Johnston

private sales? for you and update a go versus Good centers get was as evening. market hoping centers grocery I to RVI power anchored specifically through

David Lukes

great a Derek. our pretty our for I the It's I as whole. now, company industry purposes question. useful would that not small and a a say transactions we're now think proxy the of Hi, are focused so company for

a give come company, we've selling look current that's to whole from it's as information want we encourage RVI, you can last releases kind what's of -- at sold and I our nothing out figure really so for you macro. to disclosure RVI lot the But happening that the out the press can't would see quarter what's on to volumes. you you If and and the of read in there

Derek Johnston

the an you we wage Okay. season. could of hour and especially leasing share? positive demand Well, you head type Amazon's XX that heading are any of update about some light Any on of color movements holiday in towards how then seen increase. and Have sentiment, per retailers there

David Lukes

that think to I'm the you signing noteworthy portfolio, see we've trying within be of a last compared leases of leasing to this you. are But look would volume color to ago, that our very, of years if on volumes very the are retailers got are the active you'll quarter at couple and very active. high that

challenges One enough of finding get of tenants these and the out labor is TIs and the contractors open. course pools to get built

business. very that properties don't are a our active. you have has the you when low have But more in unemployment if Mike, always anything rate So so it's to a add? been challenge I because know,

Mike Makinen

portfolio only demand we so is high in pruned I keep feel would the this thing mind The we very and as what other we've is add that that properties that demand driving well. leasing set to have need that carefully of a that's to you

Derek Johnston

Understood guys. and thanks

Operator

ahead. with from Our O'Neill. Please Alexander question comes go next Sandler Goldfarb

Alexander Goldfarb

Hey, good evening.

here So the Investor or you weeks Day just, guys a big few picture ago. first yes, just had David Matt two questions

continue leasing as been third going the XX% for guidance going assets XXX RVI XXX, you're $X.XX, of sell year next You've in consistent the look to to fees. quarter $X.XX, But bp. on at is you have pretty about great to guidance came the for we least to

better. going be the income is fee presumably RVI to So

year of had sort of of and and already benefit impact backfilling. get some bankruptcies you next stuff You've

XXX north is $X.XX. if the XXX, right range run take you guidance of versus a why So you're $X.XX to already the rate,

of we investor was where street that if at was XXX. the So ahead look day

you next year a based lot for gets this pieces just normal why of quarter what moving -- why seems on your guidance that to higher So be be to of business? range and to want guys what

David Lukes

It's a right. great All question.

a And X% can expose set-up of company a growth. I it Matt. within seems of results you as explain to proposed we those real and then, two estate, up are. vision how can various at our line. I'll we Day X% think me is imagine results it's that as Buried purpose The compelling growth. with a Let course, hand what stable long-term people that, percent three OFFO what think to Investor And are give what we were Conference not the growth, to NOI is straight the little a and we NAV the assumptions to quarter look then do and pretty and

So Matt still feel goal. I change. longer to year this one XQ if conceptually individually the from speaking, can that I a a probably less trying you're Connor term through personally quarters confident at of but match it's is quarter two the time or think a time at relevant you year. modeling next that's questions, and some help more with company And in

Matt Ostrower

And assets, very [indiscernible] That's the you then, to are even really provided RVI will the fees the as assumes point make to though as sure, at is that go you We're RVI, as fees same recognizing back Investor going and we because year. transactions. mean, particularly right, OFFO assets not those seen we we as are up I Right. model. will I'm things, possible, selling -- predict mentioned this that One we I RVI do would sell point our Day. you your next user right. RVI guidance a down friendly trying few fees have disclosure possible, fees decline if

a variety have right. of We headwinds,

but that going next occasions significant to your be year the year, that that a from a headwind. We fees the JV we on a is are JV, continue commented expect in to be of on unwind notes, next you number troughing headwind Blackstone fee to

to continue I'm you're tenants aware We but with firm. saw sure we refilling are anchor boxes as bankruptcy declare as Mattress

remaining which have have hit be out redevelopment we dilutive specific now, a that is we from pointed Toys Ness. our then, So headwind. one firm Van And Mattress will we $X.XX

up add pretty stuff year. all you to a FFO make number have it that when next think together should I it So as straightforward lower we might why

Alexander Goldfarb

partners. guys just Okay. question second then, the bring And about That's as helpful is, venture you joint think Matt. in

projects? be versus case the pad you'd bringing you operating long-term you as weigh that some them perform those sale so have look you person you ownership to joint as where lease an JV How uses that alternative and the who the you that look that at of of way venture that. try you some How outright partner doesn't in joint ground in of densifying venture retain sort weigh can an in and to For the undertaking -- to it three up do options a your in. way different do at and rights venture ends a bringing still reclaim you a want,

David Lukes

wrestle Well, have with issue certainly properties completing time going other in going to have that. some classes year's see deal because pay exercise we're to one and 'XX entitlements can you as has into a with will that a as financial a we're the adjusted so number which highest classes get asset cannot. one lot risk certainly It's asset and to in us in return ground a you some lease to with that know

contribution disparate and you're financial the a would are enough is with can impact. control there pieces those joint of an benefit, over variety two own remaining your simply to suggesting -- it pieces number As to property social have there's some one or But or how ways out figure if then is, to value. land that Is have a retail you're say it's the subdividing benefit as it. pieces, you're we and is doesn't aspect of kind fringe a doing there model, creating a there's ventures I land number far that do there

on other point to agree to interaction with And the addition so I and SITE. components you is financial the with the that's an the important that would equally in consider

right gone we Day, a Investor dilution from For we simply trying and line. of taken through that boxes variety build the certain already off at are projects optionality. to shops now, We've the proved and we've taking pads NOI

trough other in able we're And entitlements and best or at of year I especially --at point it's be with to those we're the to classes. you're two, so what think going sitting with monetize to figure asset light next properties seeing how some our in NOI, out we'll

to the want that's build optionality now So what we'll focused and see. We we're just on. right

Alexander Goldfarb

Thank you, David.

Operator

comes Advisors. Our next Please go Street from Green with Tibone question ahead. Vince

Vince Tibone

in you on points year-over-year the help a physical about Can was XXX -- pro-rata the it points. basis or guys. XX which basis, total me the a is what's and same-store, were about the occupancy between difference XXX driving occupancy about portfolio understand basis Hi, difference down

they -- help me why So, are understand just driving can you that what's disconnect?

David Lukes

the that a projects largely is of I say my in Off the pipeline. top of would redevelopment head, couple

me at collection come more come I you I Boulevard, [indiscernible] give you back will on detail. and Brandon can to Specifically back that. let some but

Matt Ostrower

from question that bought Investor That earlier, and in David thousand talked we Christy's feet of quarter Kmart front. Vince about square that last Day. back a alone so on lease on hundred that couple was

Okay.

the so included not are pool quarter. same-store to Just same-store are Toys that the boxes in two held or the those clarify, being redevelopment for this figures

David Lukes

are they're Those from why specifically held helped being development. in being is not quarter the

Vince Tibone

I in mean pool. it. the point material bps that those of were a a included? -- With were impact trying that the get figures those to if included a impact, have impact I'm XX sense like basis just Got Does on XX of reported just

David Lukes

come to thinking, have to a back specific answer. I'm you'll

Vince Tibone

Mattress Okay. for No will just problem. one more then, the share more That's on any on then it can is NOI. And site impact timing and the the closure, have insights you there firm helpful. bankruptcy me, since

Mike Makinen

will note the lot lot Center. Basically the of The market one we're location for within from right a important a portfolio the an to wholly-owned be regardless say we've are what stores that got have those leases six happens picture below the of rest. is in to Mike. leases I This of our now XX fate And most excellent waiting to part of rejected. been the it's thing Yes. and standpoint, spaces tend a of big these these see

we what we've really undertaken confident, feel program given our and accelerated fits we'll see So, small that our pretty small lately, it shop nicely shot into that efforts happens.

Vince Tibone

all Thank Okay. That's you. have. I

Operator

question Please next Our Morgan comes with Stanley. Rich go from Hill ahead.

Rich Hill

reporting, went that? costs with start-off question. rising how to quarter you CapEx what see about and material guys. from wondering given up, quarter. CapEx were some numbers in some Yes. want But a separate went thinking raw about There are down I'm rising last changes focus construction just any you or your Good labor you're evening costs, are it to starting your this I showing CapEx

David Lukes

pretty Rich, it's something carefully. to trying that we have been track

the labor job very been costs how is a outsized make a difference has vanilla just economic construction an viability to-date the there raw that not is to It's if more and estimating the an reality it's boxes. seen We or that retenating in say on construction so haven't boxes. it in in up Labor figuring that is go might portion, labor we That out inflation of but cheap. a portion materials expensive have that, and of total businesses box it mean And have of have we out not great the bit. is so rising rising change impact. a see, build to overall GMP But to generally an enough department the much little portion much and affects split of contract shell cost escalations materials doesn't center been small. much strip have that usually as I

Rich Hill

Helpful.

give -- to or to maybe some comment you comments year-over-year? is is views fewer retailers Is of and on past about about your quarter you doubt on But back your it do specific a of you watch the love talking list not evolving. that. can I broader, changed on Going over it number you you'll list, how has can maybe how watch it -- could retailers, the to retailers, talk general comment maybe maybe

David Lukes

that whole couple I of last changing that a of don't say around any names the table of list on the would are as of that lot. that most ago. the smaller in smaller to are course we quarters, spaces here mean maybe think lot is those What's happier You different then this June. portfolio back portfolio year And likely is get means a our a we're a were unhappy us

a change know, which we and don't space the a seen the example, Investor XX% in a that. in back. sales site. going than more you'll we've we like Edgewater think in smaller firm they've presented out there's a Jersey market on and them list through Mattress an have as surprise, we I Foods and pretty is gross number there lot mean but New with, because that portfolio project a the are a I portfolio doing better of that Mattress to space XX% really prepared that Day in with be at is probably there's and below I come of numbers Whole the That's whole looked to $XX we're makeup, I So of is that surprise an firm in remember certainly if good idea million example where

So Midtown Miami, Perimeter Point in Atlanta.

portfolio kind to got this we've disruption. of So to think I respond great continued a

Mike Makinen

kind some at And showed would back of, how just we you you of portfolio, Day in recent Rich, bankruptcies in did I Investor you to point and right. analysis this

low-end, example what is the are can't and to a who back. is that, that we exactly have to get at Toys once XX% our tenants showed, those what full repeatedly And the so said you control Investor And we but the space we base at when we happens completely we spread. with control it is portfolio got for

sports other to range. the were Golfsmith XX% authority and XX% of some And percent

spread changed have that dramatically still to we what get those back, going when on exposure basis. if some get, those these hasn't get we're space we we when So

Rich Hill

Okay. Thanks offline. Thanks guys. any If I questions, follow-up will guys. more I have

David Lukes

Rich. Thanks

Operator

a ahead. next Ki Our Bin is Kim with follow-up from question go SunTrust. Please

Ki Bin Kim

Thanks.

Is lost seemingly of split two cases up where anchor footage there an anchors because pretty there box boxes So these as some and spreads. square the put one be you that release in bigger might junior space. element you of some good

of So net square square there foot while smaller chance per is the footage? that increases, is rent a a

David Lukes

I a ask question? can Bin, you Ki

Ki Bin Kim

Sure.

David Lukes

the of definition What's seemingly?

Ki Bin Kim

It means definitely.

David Lukes

usually single the a that's can't we but And is space. generally shops there's demand and I tenant, The we talking Authorities toys small generally box little half junior on space. ago, of when I be been take that that of would business is can convert which leave in When that a left general and by I XX a fill is small that not opportunities had box, a you're it's Toys the type any trying I portion year box feet and also think about we of It What number. a aggressive whole depth Sports on think depends only hope different over, done pretty Us reality boxes, strategy of they mean, boxes didn't. to the the is, to a find think you there the so therefore that them we a think been And different to we much there's a to and split line you and more. be that have those relatively I know XXX. and R mothballing have a

And darn that square footage footage so before. we're that to the square leasing close Toys total gross the is had

Mike Makinen

be JLA done that historical of clear that not Just driver to is around underscore, in the analysis to not change having analysis, is going totally those a spreads. remotely

Ki Bin Kim

the dressed And in leases pipeline? for that's the for the your of boxes that same are anchor XX% Okay.

Mike Makinen

Yes.

Ki Bin Kim

All Thank guys. you right.

Operator

Our next ahead. with Mike from go JPMorgan. question comes Please Mueller

Mike Mueller

hear you me? Can Yes.

David Lukes

you. hear can Yes. We

Mike Mueller

I offset XXXX. JVs elsewhere? going Blackstone more it intend read pop be that in that on great. statement next into about a troughing should just on the that Should JVs an Oh, it's could was income as year wondering see JV away business expanding we up? we the comments X that be that So fee you or

Matt Ostrower

'XX of sell. it to RVI are and the Well, rates I are in is we're continue what if company business hope would cap which troughs think be that comes that, two to is open plan is still categories. successful of and and that, saying we attractive that from that assets, hope markets the One proving selling the we

same business working capital job. And ventures. joint are like think kind there is We likely on to will the that time of of would us. positive of will out it ourselves of the partner with lots partners I be remain that a At we

an partners throughout scale And and can within opportunities so keep economic I us different think cycle find we you'll that recycle our see portfolios. just those enough big

Mike Mueller

Got it.

it. Thank Okay. was you. That

Operator

ahead. Our next Securities. Chris Please One with question from Capital Lucas comes go

Chris Lucas

everybody. evening, good Hey,

Just a questions. detailed couple of

just fee. of versus fee the RVI the two the Operating a is management On to in lease other. sense me to base big that I'm to pieces can fees are the income you trying Matt FFO. what are understand sort included relative how each the asset give as

Matt Ostrower

fees We've the percentages, in Form the and We disclosure did I give individual the you dollar given amounts, not XX, will right. on the Chris.

to: management. that you into kind or if on so want speaking, So management point of asset property percent XX basis you can and generally back X

Chris Lucas

in the on And that operating the a change, from the about presentation move, no… to I'm Okay. there going when guidance talk million, we assuming then, so million G&A is that million G&A of shifts expenses, $XX is $X clean $XX

Matt Ostrower

Correct.

Chris Lucas

me last question might company? just the Okay. for been And whatever lease impact fully have incorporates guidance that to accounting the is, then, there also for on year G&A next change that

Matt Ostrower

Correct.

Chris Lucas

you. Appreciate Thank it. Okay.

Matt Ostrower

Thank you.

Operator

Please next from ahead. a McElroy Citi. go Christy follow-up is with Our question

Michael Bilerman

it's Bilerman Michael Christy. here Hey, with

people new to your Board. two congratulates, first So

I -- a think that's great. And then, question couple of I had a questions.

consider First, versus what what retenating. is you consider just redevelopment you a definitional between on

from So one box if to the replacing does it the a Why you be with the Ness you're would like the where that look a Van so redevelopment cinema. at line retenant, cross versus other?

Mike Makinen

moving you a Then, wall structure. it's at area. historical have external as these of looking looked, a there mean I that Yes. sure it in we are properties that because all you gray kind seen I'm know, are are some companies not

We you could everything is a to moving probably This do building a without else wall. floors. are possibly removing doing absolutely

sitting the dollar So the redevelopment. of your kind large want you impactful if in project math can that also do so so given at much very seems you that spirit we've amount, But right, scale and of you used there the to. we

Michael Bilerman

[indiscernible]? So if would even substantial it capital it's where be involved

Mike Makinen

It's right. guess, it's not. a to reformatting, it an if I I really live, external mean must wall say redevelopment, reform. move if then you a mean is call, we think I I

David Lukes

[Indiscernible] renovation.

Mike Makinen

that that Yes. can that. the more significantly, discloser than in to it looking through out very enough this if [indiscernible]. of I is very you felt of We've -- all the much is you impact, you want spirit you very, building can -- changing figure kind given mean

Michael Bilerman

external the thinking about separate to you or hosting when results call for in just a And terms that provide report as not? RVI guess will for conference you're of going be managers I you them entity. disclosure

David Lukes

We not. will

results. be assets will whenever filing press sell releasing quarterly be our and we We we'll

Michael Bilerman

about using from that? of your should this and be So asking income call we as component perspective, a fee as one performance RVI questions

David Lukes

think that be you're suggest that covering now. I to so Mike, RVI going to

Michael Bilerman

came I'm into your it component saying that evolves. right, clearly of getting And -- RVI that earning it's income disposition of not… entity cash flows But, fees is DDR, income, you you're fees had a both in. stream but million there RVI is No. is flow a $X as

David Lukes

that how left to pace is market The mean there's get plan is that quarter. factor what sold is is really in for the it how the dispose matter of is fees are a and I of the every aspect dispositions. pace much the at the those they're Since reflection rate. fees at I fairly one many you're a pretty we have healthy plan does that, only stated on is, business stated the think private well assets arbitrage is its RVI which goal properties and for between and which or business sold, right

projecting away. thoughts could how the to our RVI fast many about releases I how going come are note So the certainly as assets plan use feet soon. don't or you what square the see they business out how us talking as percentage press But to and of

Matt Ostrower

it's spreads true of to RVI, operating is be we leasing a where are a this not totally The that, same-store and and spirit the making everything in about -- not growth else. business lot going to of of be clear in NOI is not forward-looking statements businesses,

could operate really it a some very, those anyways. technically numbers fees asset lag fees the a PM management SITE comes But spillover onto when Centers. -- and have of effect those with small to all on very right You're

in we've all shareholders statement investors predictions. think business of about help information you'll those we're the that asset pace that be along clear been predict have you sales. the to to at the want So all. we making The doesn't It make the forward-looking us would RVI of all just And would not need. only very

Michael Bilerman

standalone an once at sales is about the entity completed this guess will U.S. I are be That's going what going the Puerto event asset there the be. be to point -- And sales RVI Right. to some -- Rico. what

decision point I a had to think split. completely make you, to may I

whatever So next and maybe accelerate asset you will there the event sales do separation. pace at -- the even be do if complete separation a you all a

is while. drag I'm a for it going to on So at? getting What

David Lukes

Yes.

Michael Bilerman

$X have just I else and I fact a you anything have guess referenced it's of that $X XX, bit Form extra this number that mean $X million? million? $X the so what million least there about had at known, know million was you set came very Is at $X wouldn't in are, it was that million pretty those it the talked versus well. we to be little I Shouldn't there in at been that going least fees terms why

Matt Ostrower

-- the gave same of we lease delta reason not commissions I'm sitting, [indiscernible] we -- sure, we want we to sense to is thing. did spied, be big The the we and are want as

want that to have the to We are make do hit that with or be else We you're guidance conservative trying deal that put to we're prudent to anything expecting, we be number. trying guidance, just any to in right. sure there, our a stupid leasing right? or number don't we out So

there at not is absolutely things. a will, predictable some is least, do That to does should in we but better that. given is of the about positively the you mean huge be to think read sales time and correct than I asset around. going those reality of range that The you and this swing, absolutely to reality year me, case we've a doesn’t upside into any

Michael Bilerman

then, And fees further. you in the will which G&A things get between, complicate you're and you have recording Right. lag the

you. Thank Okay.

Matt Ostrower

like This to conference over back remarks. question-and-answer concludes to Thank our turn any for the closing session. you. I Lukes would David

David Lukes

you Thank your all time. much for very

Operator

you attending for today's now conference presentation. The concluded. has Thank

You may now disconnect.

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