SITE Centers (SITC) 29 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Brandon Day	Head IR
David Lukes	President & CEO
Mike Makinen	EVP & COO
Matt Ostrower	EVP, CFO & Treasurer
Todd Thomas	KeyBanc Capital Markets
Caitlin Burrows	Goldman Sachs
Christy McElroy	Citi
Samir Khanal	Evercore
Alexander Goldfarb	Sandler O'Neill
Richard Hill	Morgan Stanley
Shivani Sood	Deutsche Bank
Ki Bin Kim	SunTrust
Wes Golladay	RBC Capital Markets
Vince Tibone	Green Street Advisors
Michael Bilerman	Citi
Craig Smith	Bank of America
Chris Lucas	Capital One Securities
Jonathan Petersen	Jefferies

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the SITE Centers' Reports Second Quarter 2019 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.

I would now like to turn the conference over to Brandon Day, Investor Relations. ahead. go Please

Brandon Day

Matthew thank you and Lukes; joining On Financial us. Operating Good hear you from call, Officer, Chief and will Michael David Chief today's Officer, morning, Makinen; for Ostrower. Executive Chief Officer,

Please statements. Laws. constitute meaning statements may statements may forward-looking and statements forward-looking materially that are be our Federal risks within differ Securities actual and certain uncertainties aware the our today of of These the forward-looking subject from to results

may uncertainties documents be in information the about XX-Q. and Additional today reports the risks press earnings in SEC, recent issued and we found release Form most these our with XX-K on including and our filed

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

those of of presentation, Events earnings on the webcast. like would page visit please during who section follow call phone, along Investor sign to into today's Relations and the For our the you

it Chief introduce pleasure my Officer, David Executive Lukes. time, to this At is our

David Lukes

due guidance. us expected thank lower these factors to for to the and and expectations growth with The our measurably better our leading last was NOI earnings second performance bankruptcies. same-store than property than three quarter largely increase I and morning NOI combination Good you our OFFO is above over am joining expected call. extremely pleased tenant months our of which

Matt components then business leasing, conclude balance results the results with comments to the sheet, I'd over I'll our to our quarterly greater acquisitions, tie and some like of to increase. three quarterly how detail. and in major plan, operations on our hand discuss Mike will and call on redevelopment guidance into five-year our comment the

X.X% was growth quarter to largest easily deceleration in our component compared of a First, expectation quarter. plan growth, the is which first NOI of the same-store our second the from

continues opportunities negotiations. progress team recent has bankruptcies growth strong economic we expect now make all anchor leasing great to impact advanced tenant slowdown from in means spaces. positively the leased generating to in our our work re-tenanting this XX The NOI average XX% occupancy, begun to XX on Our with achieve or these spreads

in work we portfolio tenant SITE curating take means today's years in the own positioned of to estate over two real submarkets last Centers The the did advantage we the highest the country demand. quality

program. We also investment continue advance to our

recycling. reminder, funded million five-year of November acquisition in for a joint program XXXX and three the buyback the investments portfolio plan $XX China of via closing our Dividend our from As goal Trust annual first funded all the with of proceeds assets, calls capital We XXXX. through venture achieved share

close that assets We're first annual working million from year this $XX Village later San the the us Vista that the could acquisitions goal, quarter. largely of on our would exceed sale in allow additional Diego in to funded

up bottoms same is dispositions process, Our as approach in it been and than rather acquisitions the the has spin top-down. to

driven and solving are than convenience out and value-oriented We seeking flow rather geographies. formats for returns simply cash or certain growth by properties

passed County on we Work our redevelopment of to which II third and supplement this growth for progress entitlement projects amendment represents and most Day. Boston. recently to one residential a property of in in progress several five-year which Located the West featured which Atlanta, our uses. four the plans We've Phase our making tax pipeline our DC, was larger are we're date scale made projects we the of this Bay retail projects Investor strategy. process active to Village, of George's advancing quarter at the Finally, our on component new Duvall and on allows October zoning of conversion Prince including continues added

During the of offer receive a all us the multiyear for profits redevelopment. process of to course would our than allow that land immediately we an the rather received over entitlement expected development

the on for balancing opted all our quick we've the and do We a pipeline see offs represents reward. remainder a I sell million but approximately expect positive providing significantly as redevelopment $XX in to NOI, risk of we cap X% Duvall case in-place of reinvest study a in projects, which at property So don't can pay the capital rate on spread.

investor the would Before done Leader Market work Joe Buildings and Department the fifth the sustainable does key of report, Senior Alliance. a examples two work publication President by just Operations, Better daily closing, as Green our our employee, and to as for Silver Lopez our are our These our recognition Energy’s Lease as operations constituencies. healthy of relationships and to the U.S. sustainability the hard by that with also well the I Vice through of as company well as ensure acknowledge community whole like Institute the team of Transformation this growth of annual

in the an position. SITE extremely second quarter strong summary, In closed

to portfolio growth, earnings NAV balance tenant X% X.XX% a great sheet from average in and We've us provides have to generate well and demand, benefit focused that growth. as a NOI progress flexibility opportunistically. to made as We positioned occupancy annual solid our five-year same-store invest uplift, plan

our the hand to Makinen results. I'll operating call over that, discuss to Mike with And

Mike Makinen

and reported was Thank expected the bankruptcies, rent recovery Firm fewer tenant same-store timing, of you, Mattress plan settlement very NOI to bankruptcy. expected due $X.X in of David. pleased rate from due I'm than well the expense partly ahead higher-than expected than which growth commencements, quarter, million receipt with through X.X% earlier our

have this X% would without same-store payment. been NOI Our

the focused robust last of activity that the The despite now over XX saw second seen we've leasing quarter more more months, our portfolio.

identified of represent executed leases XX% a ROI. with We compares at for months This XX vacancies leasing nine XX ago. Investor spread XX different deals These or leases XX have signed lease at blended to brands. Day another anchor XX spaces the in XX just with

openings X the quarter with to the an through continue second in year-end openings accelerate XX in fourth we and mainly additional to openings expect quarter. Importantly, anchor

pro a to basis XX.X%. increase point rata generated this our rate in XX of leasing leased activity All portfolio has

Importantly, quarter. future NOI over our of annual embedded growth the is points, even NOI bankruptcies. XXX point achieve at same-store This increase with last ability for basis spread, our the which commence large spread basis now stands in best indicator lease us tenant five-year to low to growth target reserve X.XX% XX our risk, X.X% provides confidence

solid XX for with spreads were spreads quarter in on historical Leasing leverage with months our the elevated volumes. line trailing

expect translate to our As polio I more quarterly volatility we last into and smaller mentioned metrics. quarter,

XX-month basis. results suggesting of indicator trailing of with were look rents, XX-month we're at overall an still on numbers signing, a also Net leasing tenant effective economics. So I encourage our you to the economics compelling line leases our in trailing the

plan. in part We we ability five-year of goal our continue articulated sharp confident remain driving to sharp our XX% as and the leasing achieve to

future Our space These sharp Despite leasing stores. XX this remain growth. the of high our as the because sharp as deals lease percentage we've other activity, Payless time recaptured quarter along activity more this some high a attractive dropped quarter which seen available economics. in in locations these all source quality with we was have and liquidation of

heroes by leasing of many unsung All in the our especially enormous progress this of effort operational often department. is product

in This our his our delivered spaces work complex of are compressed often for who like construction Joe head this behind required their management of construction, ahead almost to congratulate of an out I'd and team with store positive the team time also our expected quarter efforts and $XXX,XXX. though, Chura schedule openings periods. year to for impact XX call tireless very the specifically budget I outstanding work. of They've thank

I'll to With hand Matt. the that, call over

Matt Ostrower

some I'll some comments Mike. close on on Thanks I'll balance sheet, earnings and matters guidance. our with comment I'll touch first then on

remained First, pro position balance rata the debt-to-EBITDA on strong. in the sheet, our The

Quarter are to times unimproved in leverage at also great X.X of maturities times compared in shape. XQ The XXXX. X.X our

term consolidated years. X.X average weighted have We of

partners ongoing announced result. recast borrowing their also our Friday of measurably our bank our extending for improving of this liquidity, We loan to term a of and facility our as lowering credit costs thank line support past like facility's would maturity, I and the business. the

this by David be mentioned, capital to we impact year, during will expect our factors. levels mitigated but of spending the As three deploy the leverage

quarter, get we which has on remaining in second more reserve ramp prices of our expected NOI, to continues marginally Blackstone did million the the but evaluation as dispositions dispositions the for $XXX Blackstone that repayment preferred. were this preferred later same-store growth on in ongoing to increase primarily our clarity JV ongoing in caused second EBITDA year the First, from close us no to our liquidate. There

basis. compares to mark since million $XX $XX reserve in several market then upward current established though been we Our initially XXXX, million preferred we the the a and on downward quarterly revisions there because to

of remaining $XXX of securities total a inceptions million. $XXX preferred since the received of have value with these repayment We million of net

investment. expect maximum. third occur the Our continue eventually we term and JV but see of long We means, asset sales. next of is additional $XXX quarter, to source and RVI additional to the source the our ultimate related as liquidation million this dispositions repayment a debt-to-EBITDA for of a deleveraging All this receivable limited of final And will over expect X year. capital receive total is leverage had the preferred activity we times

turn now to like items. some related earnings I'd to

the our that not we much the is while smaller $XXX,XXX did XXXX announced or quarter. increase, far will had than recur revenues and in they in close third in Charlie closed anticipated, recognize which that quarter Payless will from impact and Charming has something a of First, so bankruptcies fuel we helping guidance since therefore

the opportunities, are There with will will closures drag lose approximately XXXX and mark-to-market on growth. in less non-anchor We about act though backfill expect the excited downtime to of also quarter. and revenues Dress we be they fourth and these still from Barn significantly $XXX,XXX a associated as capital

XXX,XXX nature. is bad this that reversal included Second, one-time from a impact in debt an positive revenue quarter reserve outside

income. And we settlement Firm bankruptcy finally, included resolution. from $X.X as Mattress Mike was This other million the received in a mentioned,

equivalent year's obviously so this second is While a is for worth impact one in of tenant, and the recoveries large this the quarter rent is push. annual of payment one-time a the item

change now turn guidance. in our to I'll

same-store Given this point in we clarity significant year, OFFO outperformance as estimates. two and greater first in as the at growth NOI the we have increasing the quarters, our are well

a spin OFFO have believe X.X% our X OFFO pennies adjusted the basis. growth measurable at we on increased which by midpoint we Specifically, represents or guidance

We X.XX% the economic by increased throughout tenant same-store bankruptcies. NOI new year better than growth midpoint XXX basis at fewer stemming points a to from have reflect also occupancy expected the

decline rent and in as revenues comp Mike bankrupt other a expect headwinds NOI to mentioned, X%. tenants below anchor now growth bankruptcies of expense quarter-over-quarter known include timing, trough Specific recur, quarter timing and won't we the in tenant third quarterly quarter that income. in Given the of in the XQ, same-store closures commencements, $XXX,XXX a tougher second and

guidance XQ Finally, again and as we as harvest sales. continues in was for assets. asset likely JV lowered OFFO. partners before in equal in million to sales stepping and XXXX expenses, RVI adjusted we to completed continue manage on XXXX to to fees completed decline will fees and previously date, fees property will as act with look mentioned million headwind $XX from XQ we our G&A lower fees RVI also down capital. as modestly lower but as higher due due sell RVI XQ JV a to higher to $X.X approximately significant XXXX to XXXX to asset G&A fees RVI fee income disposition XXXX excluding NOI income fee to Based

for the some hand will comments. back call I David to that, closing With

David Lukes

Thank you, growth. evidence last conclusion, to organization's months six to ability Matt. pivot this increasing of provide In the

NAV now and in the plan to our next on that executing are five redevelopment goals X% over the produce investing and opportunistic growth of average OFFO underlie schedule demonstrably We ahead years. operational

we take questions. Operator, now ready are to

Operator

Our Markets. Thank you. from [Operator KeyBanc ahead. Instructions] with first Todd Thomas Please go comes question Capital

Todd Thomas

you right ahead read? Hi, performance first in for plan, think of plan curious the that's you're particular plan this question, quarter thinking plan track on if ahead of but here related you year's just five-year this the in good why I'm for not and aren’t thanks, was tracking to quarter or operations, much about which the of we as David, the about five-year morning. that commented

David Lukes

Hi Todd, good morning.

just I bear probably taken is change we two one distant too think realistic and are bankruptcies we've future mind in will a is is to think there and fewer speculate on plan quarters there and what two we bankruptcy program outperform in our important we it that just other past think five-year in underperform. the the the have of might very remainder through some a five-year These quarters have than quarters reserve imagined. factors; would been I

still think aggregate I on So we're in plan.

to in have impact burn you is time also that think trending the I puzzle, over keep off the from and has our is, the remember mind of that piece second way. The RVI fee positively, operations NOI very our other but an

Todd Thomas

then, sort fee income and related a two-part and dispositions Okay the question on of there.

of So intentional seems bit bit rates quarter, maybe down slowed on better a dispositions behalf being partners' the in your year-to-date have little demand the off is pace than interest unexpected? little a to with that

your previously some And the income trough Can second to the other would there then on to I had so thoughts current opportunity suggesting and fees you there? commented in us is believe the an likely part I partnership or opportunity an JV related strategic early but fees, would fee decline, they there. to form you maybe the think you're XXXX backfill update

David Lukes

are just you the Todd, you generally? slowdown asking On or Blackstone specifically JVs saying are about

Todd Thomas

touch as on positioning you Yes, Blackstone's could JVs but generally, well. maybe

David Lukes

assets several Todd, really receive of really squarely portfolio RVI does on of and are value sale. we property that and we timing The pace control it noted of so Blackstone RVI all to of our it's been than desire outside it's of those the portfolio affect the also do sales with exercise company's the sell more assets. the fees don't dispositions on, others, the to anchor that purview. for the that options has of more The

the little So beholden bit timing to place. when transactions a take we're of

say we'll a for that of strategically For joint a mature and to over joint to flow then general, those ventures have away is in We ventures working lot go replace is amount of I It as a be and would do that allows it us business deal naturally compelling feel scale. time. certain us.

Todd Thomas

Okay, thank you.

Operator

Burrows question Goldman comes next Our from with Caitlin Please Sachs. ahead. go

Caitlin Burrows

I supports if lease increasing guys. spread comment leasing was regarding morning, which could strategy. your the wondering occupied has good you Hi, versus been

consider are for end future your wondering you comfortable versus for list occupancy, to compensate a you and outlook occupancy this potential having upcoming I that So closures? was tailwind higher when just how will up watch to additional

David Lukes

Hi, Caitlin. business, that and which anchor mean, good got XX out signed that's historically to spread such XX Mike's and XX remarks XX% the to we've take think I the that is more heart is enormous leases different dramatic mean you've think with of a I and I LOIs is I seen really impressive we've even leasing from morning, this at about demand brands. piece prepared point

a side including ourselves on seeing box many which is you're it has tremendous think demand I healthy surprised So amount right a and of the business now.

do submarkets built portfolio is list outs, bankruptcies to the watch continue have the the for that a it So think the tenants in remain there there if and store move certainly real to right the one demand estate but think I industry have right right this and to I mark-to-market. will that of fill the lot be co-tenancy going in up. And has and you

Caitlin Burrows

in projects, the stabilize on then to kind and go on difference that between open like Brandon of it a Nassau that percent one you've scope projects XXXX redevelopment you the the two just planned maybe side, the are maybe it's and the two for about that Boulevard, leased through other take and one Got could seems maybe and will those quarter it year? just to just will take to Park gotten

David Lukes

open a that's Pavilion New the and that was the so reconfiguration happens Kohl quarter as happen leased why tenants one Park effectively recaptured and footage within is Princeton up all a we is a It a fast, box Nassau in seeing a XXX% it it's duration. Jersey. of Yes, stabilization ramp square redevelopment just and of you're

remainder what trending I is when point a proven ago. XX% back that It activity able company Sears we this pretty Boulevard the this of receive year to got have LOIs might that and Brandon a the a occurs. guideline a at this was the and final that about to think stabilization the Kmart Kmart of rate last and were space, XX% we've owned collection about on occupancy recapture we is and half The for

Caitlin Burrows

thank Got you. it, okay,

Operator

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

Christy McElroy

Firm about who Matt just the in you debt out inherent and same-store Hey, the XQ figure good on reversal in question, the trying guidance NOI fees items. was much that of Mattress the morning, just talked NOI to increase payment revision guys. [ph], follow-ups some same-store bad

in that would was recovery guidance how the it better how this rate of much second how of So quarter anticipated of driven previously sure much had I'm your it? you sort versus the better for expectations and growth is define in of range by core not much

Matt Ostrower

thanks Yes, did item budget per transactional of forecast we is know not sometime Christy, to you Mattress which se. willing Firm. not we're kind a That's

see budget. debt really that about would of we've bankruptcies outside bad had. is is that I the one So reversal pace certainly of And

As their remarks than been well, in mentioned David just and we and me Mike lower have prepared both significantly bankruptcies expected. as

the Firm yes we some is So as money about, guidance contributor. Mattress really got back from a

in generally point as going the get rents on seeing we timing little about this clarity a quarter. spaces be of our so expense year of We that's next Mike's bankruptcies we at as construction benefit to And a about part and more getting forward well. we come clarity then we this comments at open. in bit the will more of and year guidance Mike's also had what's the quickly, We're the of looking response, team rest upward mentioned, that get more as now reversed are quarter as operating

Christy McElroy

closings X.X%, the look half piece back more you that growth it of of first [indiscernible], then base of if X.X% the so in about at rent certain but half Okay, offset to is that how further at year, in I look the the impacts mentioned? by should

Matt Ostrower

X.X-ish you that. put so So right? revenues you I increase read from would the saw, together, about Yes,

ancillary. points is All another connected. stuff XX or also We so this got from basis

– see said revenue we than you're to quarter, I in are anchor the The timing the because first of quarter. going of in b) look a you happen because going really quarter slower pace more about think a growth; third third to our if comp a) tough the of at and they commencements, what

more pick in up will growth the the So quarter. fourth

I think profitability to to improve and the happen going our managed we've with. squeeze going year forward. growth what of we're starting happy then this In and at which same-store see is, all view the of you perfectly is, revenue and saying up along meantime, robust things we've out end the pick been margins are portfolio

Christy McElroy

Okay, thanks Matt.

Matt Ostrower

you. Thank

Operator

with comes ISI. go Please question from Khanal ahead. Samir next Evercore Our

Samir Khanal

Good morning, side, I Mike know effective David, net new I at the but new XX and out were mean you or look here. bit everyone. well to months when effective renewals, kind at rents, trailing just looked when leases, I'm of sort on I a then net figure the and there? look your what's a up they've pretty held they going from trying of little I at down when even basis on

Mike Makinen

Hi, Samir.

Mike. When to example look the number bumpiness. And prior that and for is I at aggregately if you have rents. high to so, the portfolio of and actually some relatively portfolio a cause quarter-by-quarter can when this small CapEx rolling portfolio this on and if spread related quarter, look it modest look It fluctuate. kind at going emphasize this example, you to basis, really bump or bumpiness size in is kind some requires last is of Just, you there had a quarter of this to things one a does wanted a and as space across temper of very this at feet have going it an we XX-month quarterly leasing you forward basis, some anchor just you CapEx. to XX,XXX and always have has

Samir Khanal

months, or noneconomic over is, you going clearly of thanks. seen bankruptcies, any three out them? changes changes last question in Mike And asks can months, there is have next any then sort are about are there of are there my noise discussions of I for generally you of how of and maybe tenants, from with potential lot six you talk closures, but sort leasing Okay, sort asks the in economic sort guess a coming there conversations

Mike Makinen

than to say change renewals, answer can for you you with, that dramatic really look are last when the try existing years, deal. terribly doing were continue the get is see the not when see would And estate, talking there a is many, doing best over of they years. that many at No, I tenants tone not and this the you conversations. the no. tenants we've tenants good mean really myriad of about the different to new deals to And were increases. working tenants been conversations With the real five have in to that always we I are

Samir Khanal

guys. Okay, thanks

Operator

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

Alexander Goldfarb

over of others good retailer that question, or have first, bankruptcy, Good there. a commented sorry, guys morning. morning Hey, lot just is closings bad less questions; and Two the store debt than you general a expected. pace

view to a or ailing it that headlines of able those or are means all your economic to – these revamp these don’t So case lot their longer. for that have term is the most part close, lease it announcing last want tenants trying that it pay in are able they're to the or they part them, that business that reality close, of the of plan which to was been is plans to the but bluffing merchandise various see tenants is they we revamp is essentially

or said that long a these is are is just in it's work they under and tenants tenants way, a durable So just be this don't it taking time the expected year we this go different if you be a through, that matter under than to going year proving they'll all will? more if next of to for

David Lukes

question. good really a It’s Alex. morning, Good

up we or there industry overall be many for subject but assets, the retail, that articles and retail last XX our own disruption industry. to hard us particularly There proxy it's since lot, over been two. think it's general want less retail to in difficult about so quarter it's accurate. a company for are And wholly-owned I disruption you newspaper the has for of talk has a of that come and than a size lot in because a

of think good are we change to maybe is ones what estate, if the are are and store our are their money. I probably real fleet, to enough very, tenant wholly-owned And going four are that so, you EBITDA that making own changing very if shops [ph] boxes within I that XX And that they out the proven durable. really saying a comes assets, not wall even be have that think strong is they

flipside is XX keep a question, to The what they back are you're anchor demand we've that working asking space different said I or his the deals of brands. about existing coming Mike is, are during for XX on tenants. The flipside and remarks, done that

of space at demand So there's and puts it market. depth retailers tremendous rents pressure renew their to a portfolio on in existing our for

Alexander Goldfarb

then you color is of headwind. question mentioned a around the XXXX that be to and like there some like magnitude, of And of brackets second JVs? of wind continues wind year sort next down you sort Matt. decline should thinking that's the going we that dollars the you bit year of Okay. next provides some and the is some a fees a JV, of Matt, for to come put or millions Can for for of out it just as sounds JV about RVI down RVI in be range some to of going

Matt Ostrower

third the really your RVI, share spend RVI. And don't we have exactly will visibility or a from this on I but liquidation but what we what’s Thanks, we approach. Alex. Yes, when, One to you somewhat prudent I arbitrarily in know. we comment, JV to following of, coming is going and on three following remind of think -- come thing not a not so trying specific the that’s really because laid I’ll we out so plan. year the because back we’re itself. would lion's part happen some to yet, originally providing forecast year XXXX mark take are

of about. year over think are you assume lion's RVI that in the importantly, So, we course the very the significant and fees share next most I from think of could that reduction headwind talking is I

same landscape to they may are other XX really they Blackstone as not JVs sell partners And always there. expect what motivated some the active make thoughtful then those By don’t sense retail but ago relatively of the five or JV David they mentioned, and own JVs, we assets I and JVs being we is the so control headwinds bought quickly, about think token, the today. changing what years some and are

So I would expect well. there some as headwind

So is I should quantify looking you’re think point, going at it you do XX your not next this into anything consider forward to that am something as months. but I

Alexander Goldfarb

you. Thank

Operator

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

Richard Hill

Hey, good your morning, color the the guys. Thanks in you're on that maybe of some fundamentals for all seeing business.

us what wondering is are an that assets the in trending directly you RVI exactly SITE you're on how the market could maybe the if you think maybe just RVI Centers in active at was that not that sales quality sale recognizing for give Center with market Given update I SITE but and the of looking is you assets, owns? your

David Lukes

RVI's am that from asset is morning. is going say stay sale the will indicator alive the secondary and sales, I I and on to I Yes, and Rich, am commenting away key market going markets. well to for process. asset that CMBS particularly -- good in

So as pretty think is is door decent as transactions and open I market the the alive. I long financing, the for rates think

Richard Hill

think I'm rates asking a is thought sounds it. market you little I color stable about to on maybe rates, characterization? the that RVIs, you bit but it like to talk fair cap what tighter you about sorry, maybe CMBS are cap is, Got And a given wasn't giving even some specifically how open

David Lukes

fair Yes, it’s generalization. think I that's – a

the to think and about with on cap acquisitions can what different most to it’s more than right? us, sometimes talk growth, is durable I think deploy I capital you as look cash flows and is enticing side that rate, we

lot to so and of are in, very effectively this different of for it's growth assets. say of are being durable A I seeing the a in lot a rates I valuable think as coming place, and that our cap comes witnessing very, stable and we’re to to mark-to-market so and competition CapEx IRRs lot underwritten investors would opposed

Richard Hill

Got can about cash obviously foreign maybe having cash from question, follow-up Asia, investors? durability helpful. you seeing it. one you've durable of That's flows Talking from talk you're partnerships been the pretty that flows, from that demand just successful just about

David Lukes

Yes, capital when There really venture a yield, extent our fund seeking and to might a find on have yield. that we can changed asset the want, you for may joint that and has smaller I our million, the deliver dividends nothing than domestic growth with I I think that can from demand think the is institution. U.S. class that durable dollar-denominated $XXX that foreign Chinese closed our assets is think

active more continuing on that to have we’re dialogue So and front.

Richard Hill

Okay. you. Great, Thank guys.

Operator

question next go Please Deutsche ahead. Shivani from Sood Our with Bank. comes

Shivani Sood

This Deutsche is Shivani from Bank. actually Hello. Sood

Just you the the bidding the terms private on following process you have the markets, you to pool guys of change questions on for seen any the there, earlier looking up buy-and-hold are that competitor assets that in sourcing versus asset? of given for more just of be a institutional are from more nuance capital the for, a out some might looking of there strategic perspective

David Lukes

some are we pool. I the on consistent morning, It Shivani. don't Good ones. asset and characterization some are every new buyer really at there's feels there players look that have like any

durable assets I lot for of private an available think together I so you’re think and seeing there’s capital awful competing. public and

Shivani Sood

anchor forefront on efforts edge on that Great. update And anticipated give and can you of might negotiations, have there up, been gain to of leveraging than geographic an at you data leasing your an re-leasing guys us terms the tenant faster boxes? how as have facilitated customer and in follow really the the and a then

Mike Makinen

is Mike. Thanks for question. This that

an We are developing team. internal

we’re that potential and to be we’re tenant something as looking at our acquisition is of the strategies, in front and tremendous strategies, We’re continuing lines value we��re grow we've to the seen going seeing several analysis developing that mix over years. tools next

David Lukes

there their to join there customer to some was data profile market effectively Shivani, going We with couple available a tenant a and we we've in was the And has the property been specific with some asset be whether that to an lineup questions persuade Mike’s coming customer to their examples the intriguing. the had have been to our that able and trying property. that team was proved were frequency. work and on assembled of were there are Atlanta

it the on data to market we that And benefit be to has some that the had a prove property. big have pop is to mom customer department year really a the before, and tenants really to in last their that given never don’t landlords of them big able but and have

So leasing on it's been side. great the

us think also this this lot our I using with data to we’re point of at help acquisitions. a

Shivani Sood

you. color. great That’s Thank

Operator

Our Please ahead. Bin with Ki is next from question SunTrust. Kim go

Ki Bin Kim

quarter. Good Hey, good morning, guys.

the couple XX% to want it The on I you quarter lease tenants curious that XX longevity, as you value. the the tenants Can type questions was rental credit is some of the and or usage of a quality signed? just up you CapEx bringing in, that just in? this provide just economics. of about bring a is of you out ask XX So of on are color a I'm percent

David Lukes

space a right? Mike. it's change in se. a fully and with so simply depending cetera. first to CapEx is some number not loaded peers, are right? spreads number I number is XX% and fully change Mike It's lease your that a And rent number, in talk or Everything that in address there a for that, the per about leases But then over loaded effective hand and net which change all on aware to going be number sample out about to there that about -- of This issues the economics in terms to I’ll over of hand I’ll duration our just we’re the is it that in Bin, doing, et am mix. Ki activity, underlying you like is

Mike Makinen

de Buy, we've much and T.J. Fitness, pretty We’ve Wine, tenants is as months, Bin, to Fleur Core and goes the HomeSense, Five strictly rattle think be that. done DSW, [ph], tenants, offering on. just far I am as Burlington, with, This give the great last important Ki leases this over basically Below, is is proven of best the signed with some deals LOIs it tenants phenomenal credit who of that quality locations in up and Best Total with portfolio a Planet pool looking simply to with ULTA, are that But Sprouts, the and to list this is have we've Ross, of looked at, a few. Yes, you Maxx, going anchors. just I the several

Ki Bin Kim

and over increase it. Okay based the has usage positive the of that a want to get it that just should don’t I CapEx half, the usage trending basis know is reasons, leasing CapEx a that [indiscernible] from expect and time number I and but holistic a SITE know miss the usage higher fully economics trend been the on real I to because at if -- the of leases year CapEx. look a kind at increase, I past the all on actual to you usage the over guys by perspective year, looking are from next we standpoint, signed signed CapEx it for

elevated an we should usage So expect that’s level?

David Lukes

a have but that back to in let me comment and we to and opportunities. numbers when then less give see loaded portfolio with matter excessive think wholly-owned fully pool Bin, you amount this on one I always I’ll have than volatility Ki the to the you with assets, Matt, portfolio is, are mind of going bear of XX transparency it hand the curated our was and an you anchor that’s fact based

there’s the of can think XX leasing an those, occupancy lease you taking industry long-term pool be. place. the kind trailing at bear I in are portfolio looking that we but leasing change, size As larger that just mind our are you fact of averages, that keep or in we lot than space of would then awful stabilizes, the a mind on and looking we’re is run of the dramatically Once see

Mike Makinen

clear, trend just I’ll there. That’s I seen net just see up. we’ve effective that don't followup, a flat to in years marginally been rents something change now. for effective so be even to have rents our net The

have anchor dollar, we’re In the have to sign about order the of absolute dollars XX we on that signed terms just we spending said of leases.

So if our CapEx disclosure, did not go up under those circumstances question you right? should

the So I for be really begin but you’ve of leasing commencements rent this this are that there will the to off that lot at with year, year anchor end number spending. been ramp. volume a seen very commencements pay rent The going we've that think transparent of

that basis. not showing are We increase an CapEx in on

in Ki happens I expect do said, elevated. we happen our the XX year that we you of five you bankruptcy moderation right? to months, or course and expect over depends, ago just an actually with remain forecast therefore some CapEx next points CapEx bankruptcies and in the will compared because of don't we it again. would that remain kind say So ramp it expect That see elevated as bankruptcies. are of Bin, We on what in to elevated CapEx to being six level say years assuming basis per loss, all to XX the of but know, anchors depends should spending, XXX

Ki Bin Kim

thank right, All you.

Operator

question with comes Markets. Our next Wes Please RBC go from Golladay ahead. Capital

Wes Golladay

Good morning, guys.

you may Dressbarn, general and the advance leasing looks well in it in does the at turn you quickly know that space? in for Looking be can space help the you how demand and like how that is tenant just this leaving, how

David Lukes

so that the taking them know budgeting don't a that for been his side, Wes. to opportunity anything case to say leasing If with that spaces think soft us event have remarks and happen but really Mike those going other to know prepared we in in the and I good the this get team, simply to mark-to-market Dressbarn. we're than mentioned we is Hi, back, would the particular from exciting worst leases, I perspective. scenario I Matt’s morning, the older retailer market really what shift he think they marketing does. I don't and have who is happened We

Wes Golladay

contingent have the did signed filed. they where you and soft your that situation In at after Okay. lease day market and a you

get soon them how you space? in the can So

David Lukes

it's I bankruptcies. think don't different the previous than any

get seen how bit shops. You’ve months are leased more little the them I on a that and split many that up many same really size the back of and are serious. we XX to XX space know honestly are the don't and answer and spaces And to depends get the it until spaces of more them profitable is larger What are at are smaller the faster. how

Wes Golladay

Okay. Thank you.

Operator

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

Vince Tibone

I a Dressbarn morning. just well. on good as had Hey, followup

there without be If parent, how would were bit of fourth and quarter you helpful? a specifically, negotiated get leases – could was in process how talk was to about within closure for their bankruptcy the color out able filing just they Dressbarn the little the any

David Lukes

color The our give Vince. I morning, decisions. good Hey, is can only you

and agreement. signed we’re point anything lease Dressbarn not per with at have simply rent as We collecting their this

Vince Tibone

Got it.

Okay.

what So the rent is in and nothing just your executed been is forward that no if then quarter? going -- has starting formally budget so there fourth

David Lukes

yes. December,

Vince Tibone

Got it.

David Lukes

that a am decision, I about are and could arbitrary thinking somewhat October, be October, but is conservative ongoing. negotiations

committed could could worse better on comment [ph]. that -- that that, anything than better be to be than than shouldn’t going it be specifics, not it but other haven’t than thing and We’re those this loss we to or worse it or

Vince Tibone

expect you be think user or or Got leasing backfill but the of And having followup one you of demand split lot do better locations to will economics there? common Dressbarn that a more, the question, single kind it. get somewhat of tenant just then this a up most

David Lukes

certainly be need spaces but some a to The user, have we’ll there's split. be be most single to to common backfill going will that

Vince Tibone

Okay. Thank you. Got all I have. it. That’s

Operator

Please question next ahead. Our from a go is Christy followup Citi. McElroy with

Michael Bilerman

resi able thinking Duvall opportunities deep [indiscernible] you've change for most sell in talked across here or as redevelopment. of being dive either to you Christy. any sort looked shouldn’t terms every the and Bilerman the of about its go look through your you have to asset. I of David embark with the it you know portfolio it. at a Has we quick those lot yourself? of to you done in would project sort these in to cases for monetize expect I that Hey, wanted that forward the redevelopment of likely just payoffs understand Duvall more by the a

David Lukes

and less has there accretive capital a changed my which last great as simply I more admit the are It’s say risk. redevelopments own over even more simple because Yes. will for uses I question, other It's Mike risky, as wouldn't it's that. and are are that couple that it's of years. temperament

mixed-use Duvall and someone, feeling but to that have our that clean that plan, own simple nice allowed I was when perform continue. that we it sense had zoning measured probability made a to more to will a us sell a plan that project amendments

It the in There and lot and find assets our simply or redevelopment good that reward acquisition have the in preferred or good of we investing favor other return of development. if project. a tilts something a a shares takes than lot simply risk can underlying of own assets, stock really is risk time a in our

Michael Bilerman

it’s of half FFO? actually is performance a a impacting guys are from isn't this of all things half one-time fees and share, second this in in of question actually better second did better, the have perspective went second of any was Most that the rate you the terms benefits deceleration. the an $X.XX more came guys what run about – appear of $X.XX guidance, though some beat. so terms then sort that near-term described It about quarter. in increase, talking naturally of simply is other Matt, half guidance impacts, predominantly you as on materially And FFO results boosting you you through the the doesn’t Why be about as

David Lukes

outperformance Thanks, Mike. I by of so the versus the of what logic it with agree you can’t said we’re just Yes, consensus. terms in raising

that have think do that some going could is next Firm visibility based don’t for. to it happen repeat, We could try saw sit again, this see I in again think If you to I going items Mattress down. less what revenues you it's definition doesn't see are you happen that aggregate we quarter not that and so think to on one-time what had guidance by get felt we when we quarter.

are there be will happen. that there numbers, so things know, did trying time and not affect we’re to you things as have quarter we And benefit highlight, from it had overly right? time but then quarter slip the into second just from timing some can expense just I conservative, would our we expense are some happens also kind on third of to that

can they We’re three as slip the big actually half impact year. in that weeks, If opening They and anchors that this spaces. numbers. by of size, much smaller or second of lot a the are our two company as

a I relatively So to we’re approach taking this. think prudent

is to then this here not go we a higher we of If overly all see today. well, as go yes, suppose, could what I see sitting We’re kind but go things base trying be case conservative. numbers

Michael Bilerman

run changed, was trying has around of If piece to I'm in is just half through the hear bit the in you’re a predominantly Because right? is a terms Right? robust rate the right, same-store, strong second really really the just commentary beat some but and conservative? of overly meaningful really relative everything to beat you it in of the am way? be outperformance, go it's in little impacting being confined because zero how terms even year. trying I triangulate are beat, a really about doesn't forward from language half to not leasing, of a [ph] real benefit your flowing if What just together. consensus rolled numbers it not the quarter is full or back such I seem getting the to or to single into then

David Lukes

strong a such use language. we say wouldn’t I

absolutely certainly That will we our outperform I operations part, our and part own did gone estimates have large we than because continue. of our think lower-than-expected in better bankruptcies. expected,

I so those that some items give that recur simply fundamental kind degree hard reserve, were think You of recur. bankruptcy in to can pretend one-time year, but rest comfort, the were don't beat. It investors for to some should assure some that overall is we know, our have there for you me so-called lowered the that

Michael Bilerman

materially than-expected expectations. I our operations was off of above just going measurably stronger

David Lukes

just same-store more like But was and our keep affected in a certain We ROI, is. let’s FFO same-store number. It between so is items that Mike, same-store transactional guidance mind, materially right? FFO larger did guidance. by different items a than there’s one-time increase

does that got investors be represent it that think the outperformance. I that's something of bag, we've kind stronger should in and reassuring to So

even you to open expected well. we as continue upside some than there If earlier could expected, anchor see spaces as or

I in parts involved of various think the we’re just trying to be rest moving the prudent year. about the

Michael Bilerman

Thank Okay. you.

Operator

Craig with from Smith go question next Please comes America. of ahead. Our Bank

Craig Smith

you closing just wondering, Great, Bed talking Mike, are [ph] with about stores? Beyond Bath PureX and been talking thank they & potentially you. have or

Mike Makinen

due all, we we renewals growth mind, are specific you keep bankruptcies, And outlook to of tenant happening to on in that but is are we’re of First for as see continue rents conservative reserve and a things said we XXX portfolio. as attempting maintain can so couple to with of a our there. point modify tenants show generally new I potential again, things won't comment nothing to do out basis tenants, in mindful earlier, when

Craig Smith

by I causing Okay, small takedown, shop the would noticed to that great. that? then or of you the end pickup what's And occupancy year that the expect

Mike Makinen

up. Borrowing would further small vacancies I expect to shop pick that

momentum leasing is continued on shop our really strong. bankruptcies, really, Our

David Lukes

control prepared remarks to volume Craig, downtick the that upward and So can’t mentioned control those the and entire we can In right? bankruptcies. show we Payless, momentum. was going is due we to leasing well continues is What that

Craig Smith

the an consumer Yes, I on you the small would and I the information. to or pizza shops for national the thanks have maybe a not see increased for shop know stronger guess [ph] third less parlor appetite seems full near something, thought that you or but helping been maybe

Operator

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

Chris Lucas

couple Hey, good quick ones. a morning, everybody, just

than end to the XX? more forward expected that any so by are year, the actually that you boxes of any anchor XX pull the open On the chance

David Lukes

for of Probably next from open rare or are into year us open, and time be they pull some very in Chris XQ less XQ would to likely, for normally anchors want scheduling periods year. it certain to you which have open something so this

see we think planned open last an dramatically. I are fourth are continues but the if an upside you it scenario, then if boxes and folks than overachieved the be see more that you quarter, for the if it we’re is looking common improvement on in increasing the of don't opening sooner would sooner. That’s will number get I able to -- quarter on

Chris Lucas

a second a of net one the feels pace guys like from been about have increase there's deal then activity obviously like you And boxes thanks. executing guys velocity, the lease is quarter first the on which below question been before. on just to Okay, well about talking leasing it anchor you quarter XX have

you issue seasonal there? net second what based So in four, to a quarter earnings closed closed but calls. the XX is of issue, from conversations versus the XX number quarter Is that first on you're having

David Lukes

I small portfolio honestly. think you a XX-day are just period in looking a at

Mike Makinen

in that keep of hasn’t recall Chris, Yes, mind fully pool were so holding the number activity of we boxes if kind leasable redevelopments, encompasses XX back where a space boxes almost which these changed have you today.

David Lukes

it’s about feel a I going on. think little just no micro bit down, nothing we pretty view. There’s too of It’s good pace. a much we're there’s -- slow

Chris Lucas

I that. Thank you. Okay. appreciate

Operator

question with Jefferies. Our Jonathan comes from Petersen ahead. Please go next

JonathanPetersen

you Oh, to of more kind stock? as some your of your what great, you versus disposition curious IRRs and could of share hurdles acquisitions, are acquisitions on us just proceeds, repurchases, thanks. am thoughts specifically give maybe kind if property I underwrite the on repurchasing relative redeploying

David Lukes

given trying we’re looking so replacement the to we’ve out we’re and table at any been on as our we a now Sure, in active risk. trying have Right point. certainly with balance the IRR imagine the options it’s We Jon, great proceeds all question. Southern deploy, and sold asset California of we those quarter that to have a last somewhat good you can find to an

cap ago. in months brought our joint Three seven there of higher in six assets I out than a fourth venture at were the believe today they and are about as XX% of We purchased we business quarter. NOIs

on a think is of growth allow stock. type lot risk-adjusted I does that of our basis and So a than IRR asset the much higher

hand, stock the at gets as pretty shown other our on attractive that. execute and would the On that well it's sometimes that we we've point

that lot different I the think and simply at to at have a the got options are we looking to So of we your time levers point, capital. we growth the

Jonathan Petersen

That’s Thanks. all me. Okay. from Thanks.

Operator

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

Michael Mueller

but the I anything materially the answered, been different lease XX terms that XX? need still, wondering you of have was on relative should got first just what economics remaining you we in boxes to on things to hi.Most expect Yes,

David Lukes

that Michael, for boxes in that and like lot fact think those other to Boston. that are a XX don't them Atlanta than between in properties we’re are in so redevelopments, holding of back remember I and the XX

And footage it get and of turned we’re that so, demolished be elsewhere. split they it into type those square using that redevelopment other and could some be could or are that

economics. anything leased be than them down don't I to were you they if see in without So different the turning think

Michael Mueller

it, okay. That it. Got was you. Thank

Operator

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

David Lukes

you very all forward we to and quarter. with you look next talking Thank much

Operator

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

now disconnect. may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.