The Buy Thesis - CTO Realty Growth (NYSE:CTO) is a retail-focused REIT with strong organic leasing prospects and is currently trading at a low multiple of 11X AFFO and a 7.5% dividend yield [1] Why CTO trades cheaply - Retail real estate is experiencing a renaissance, shifting from a feared asset class to a respected growth play, with increasing demand for space and rising market rental rates [2] - The diversified REIT sector, which includes many retail properties, trades at sharp discounts due to its association with office properties, leading to intentional reclassifications among REITs [2][4] Property portfolio and leasing prospects - As of Q2 2024, CTO's portfolio consists of 62.5% retail, 4.5% office, and 33% mixed-use properties, with a significant portion of retail properties benefiting from high job and population growth areas [5] - CTO reported a 41% leasing spread in the first half of 2024, with 128% increases on new leases and 5% increases on renewals [6][5] Balance sheet and interest expense - CTO has a debt to EBITDA ratio of 6.11X, which is above the average for REITs, but its interest expense is covered 3.6X by revenues, and most of its debt is at a low fixed rate of 4.23% [9][11] - The company faces refinancing risks as most of its debt matures in the next three years, with potential increases in interest expenses if market rates rise [10][11] Valuation - The estimated equity value per share for CTO is between $23.65 and $27.06, with a midpoint of over $25 per share, suggesting a fair value of $25.50 per share, representing a 27% upside from the current price of $20.03 [12][14] - CTO's AFFO/share guidance for the full year is $1.97, which would imply a 13X AFFO multiple, lower than the retail peers' average of 17X due to specific risks associated with the company [13][14] Overall Thesis - The properties and growth prospects of CTO are considered substantially stronger than what is implied by its low AFFO multiple, presenting a favorable risk-reward scenario for investors [16]

Company Overview - CTO Realty Growth (CTO) is undergoing a transformation with a focus on retail real estate, having reported strong leasing activity and impressive 2Q24 operating results [4][6] - The company has engaged in $1.2 billion of investment activity in acquiring new retail assets while disposing of $0.7 billion in non-core/non-retail assets [6] Financial Performance - CTO's 2024 AFFO per share guidance is set at $1.975, which positions the company at a 9.93x multiple, significantly lower than the retail REIT peer average of 14.4x [6] - The stock price increased over 12% in July due to a favorable market view of REITs [6] Preferred Shares - The Series A preferred shares (CTO.PR.A) offer a fixed 6.375% coupon, resulting in annual dividend payments of $1.59375, yielding 7.59% against a backdrop of rising interest rates [7][11] - The anticipated decline in Fed Funds Rate could lead to increased demand for yield, potentially driving up the price of CTO.PR.A shares [12][13] Investment Opportunity - The current pricing of CTO.PR.A shares presents an opportunity for capital appreciation, with potential gains of $4 per share (+19%) if interest rates decline significantly [13] - The strong performance in retail real estate leasing trends supports a positive outlook for CTO, making it an attractive option for fixed-income portfolios [14]

CTO Realty Growth, Inc. (NYSE:CTO) Q2 2024 Earnings Conference Call July 26, 2024 9:00 AM ET Company Participants John Albright - Chief Executive Officer and President Philip Mays - Senior Vice President, Chief Financial Officer and Treasurer Conference Call Participants R.J. Milligan - Raymond James Gopal Mehta - Alliance Global Partners Rob Stevenson - Janney Montgomery and Scott Matthew Erdner - Jones Trading John Massocca - B. Riley Securities Michael Gorman - BTIG Operator Good day, and thank you for s ...

| --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|----------------------------------------|-------|-------|------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | _REALTY GROWTH Investor Presentation - | | | | | | | | July 2024 | | | | | | | | | | | The Collection at Forsyth \| Cumming, GA | $37M Small-cap shopping center REIT focused on open air centers in fast growing MSAs in the Southeast and Southwest Investment in Alpine Income Property Tru ...

CTO Realty (CTO) came out with quarterly funds from operations (FFO) of $0.48 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to FFO of $0.48 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of 11.63%. A quarter ago, it was expected that this real estate company would post FFO of $0.42 per share when it actually produced FFO of $0.52, delivering a surprise of 23.81%. Over the last four quarters, the c ...

WINTER PARK, Fla., July 25, 2024 (GLOBE NEWSWIRE) -- CTO Realty Growth, Inc. (NYSE:CTO) (the "Company" or "CTO") today announced its operating results and earnings for the quarter ended June 30, 2024. CEO Comments June 30, 2023 Variance to Comparable Period in the Prior Year Common Stockholders per Common Share - Diluted (2) (1) (2) Year-to-Date Financial Results Highlights | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------------ ...

Investments During the three months ended June 30, 2024, the Company invested $1.5 million into 1.4 acres of land for future development within the West Broad Village property, which was previously acquired in October of 2022. During the six months ended June 30, 2024, the Company invested $72.5 million into two retail properties totaling 319,066 square feet and one vacant land parcel, and originated one $10.0 million first mortgage structured investment. These investments represent a weighted average going ...

| --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------|----------------------|------------------|----------------------|---------------------|----------------|-------------| | Description | Date of Investment | Maturity Date | Original Face Amount | Current Face Amount | Carrying Value | Coupon Rate | | Preferred Investment – Watters Creek – Allen, TX | April 2022 | April 2025 | $30,000 | $30,000 | $ 29,961 | 9.00% | | Mortgage Note – Founders Square ...

Press Release Contact: Philip R. Mays Senior Vice President, Chief Financial Officer & Treasurer (407) 904-3324 pmays@ctoreit.com CEO Comments FOR IMMEDIATE RELEASE CTO Realty Growth Reports Second Quarter 2024 Operating Results WINTER PARK, FL – July 25, 2024 – CTO Realty Growth, Inc. (NYSE: CTO) (the "Company" or "CTO") today announced its operating results and earnings for the quarter ended June 30, 2024. "We are pleased that our strong leasing results over the past year are starting to deliver meaningfu ...

About CTO Realty Growth, Inc. WINTER PARK, Fla., June 26, 2024 (GLOBE NEWSWIRE) -- CTO Realty Growth (NYSE: CTO) (the "Company") announced today that it will report its financial and operating results for the second quarter of 2024 after the market closes on Thursday, July 25, 2024. The Company will host a conference call to discuss its financial and operating results for the second quarter of 2024 at 9:00 AM ET on Friday, July 26, 2024. We encourage you to review our most recent investor presentation and s ...