Core Insights - Curbline Properties reported revenue of $41.4 million for the quarter ended June 2025, showing no change from the same period last year, with an EPS of $0.26 compared to $0 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $38.37 million by 7.9%, and the EPS also surpassed the consensus estimate of $0.24 by 8.33% [1] Revenue Breakdown - Rental income was reported at $41.1 million, exceeding the average estimate of $37.64 million from three analysts [4] - Other income was reported at $0.3 million, which was below the average estimate of $0.52 million from two analysts [4] Stock Performance - Curbline's shares returned +0.6% over the past month, while the Zacks S&P 500 composite increased by +3.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Curbline Properties Corp.'s unaudited financial statements and management's analysis of its financial condition and operations [Financial Statements – Unaudited](index=4&type=section&id=Item%201.%20Financial%20Statements%20%E2%80%93%20Unaudited) This section presents Curbline Properties Corp.'s unaudited consolidated financial statements, reflecting significant growth post-spin-off driven by property acquisitions [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The financial statements show significant year-over-year growth in revenues and net income, driven by property portfolio expansion and increased assets Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate assets, net | $1,519,183 | $1,262,217 | | Cash and cash equivalents | $429,865 | $626,409 | | Total Assets | $2,133,803 | $2,033,098 | | Indebtedness, net | $99,090 | $0 | | Total Liabilities | $204,822 | $90,541 | | Total Equity | $1,928,981 | $1,942,557 | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Rental Income | $41,104 | $27,944 | $79,542 | $55,810 | | Total Revenues | $41,402 | $28,156 | $80,097 | $56,195 | | Net Income Attributable to Curbline | $10,392 | $6,236 | $20,942 | $14,211 | | Diluted EPS | $0.10 | $0.06 | $0.20 | $0.14 | Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $59,543 | $32,331 | | Net cash flow used for investing activities | ($308,479) | ($80,876) | | Net cash flow provided by financing activities | $52,392 | $49,350 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business, accounting policies, and key financial events, including significant property acquisitions and new debt facilities - During the first six months of 2025, the Company acquired **30 convenience shopping centers** for a gross purchase price of **$279.1 million**[43](index=43&type=chunk) - In June 2025, the company arranged a private placement of **$150.0 million** in unsecured senior notes, consisting of **$100.0 million** due 2030 at **5.58%** and **$50.0 million** due 2032 at **5.87%**, with the sale scheduled to close on September 3, 2025[51](index=51&type=chunk)[52](index=52&type=chunk)[55](index=55&type=chunk) - As of June 30, 2025, **$100.0 million** was drawn and outstanding on the Term Loan Facility, with no amounts drawn on the **$400.0 million** Revolving Credit Facility[62](index=62&type=chunk) - Subsequent to the quarter end, in July 2025, the Company acquired an additional **29 convenience shopping centers** for **$260.4 million** and entered into a new **$150.0 million** term loan, which was fully drawn[91](index=91&type=chunk)[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, strategy, and financial condition, highlighting strong H1 2025 results driven by acquisitions and healthy portfolio metrics [Executive Summary](index=25&type=section&id=EXECUTIVE%20SUMMARY) The company, a public REIT focused on convenience shopping centers, reported significant growth in H1 2025 driven by property acquisitions and a strong BBB rating from Fitch - As of June 30, 2025, the portfolio consisted of **125 convenience shopping centers** with **3.7 million sq. ft. of GLA**, a **96.1% leased rate**, and **93.5% occupancy**[98](index=98&type=chunk) - From January 1 through July 25, 2025, the company acquired **59 properties** for an aggregate purchase price of **$539.5 million**[111](index=111&type=chunk) - In May 2025, Fitch Ratings assigned the Company a Long-Term Issuer Default Rating of **BBB** with a Stable Outlook[111](index=111&type=chunk) H1 2025 Leasing Spreads | Leasing Type | Spread | | :--- | :--- | | New Leases | 16.2% | | Renewals | 8.3% | [Results of Operations](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) This section details operating results for H1 2025 versus 2024, showing significant increases in revenues and net income primarily due to property acquisitions Change in Revenues (Six Months Ended June 30, 2025 vs 2024, in thousands) | Revenue Component | 2025 | 2024 | $ Change | | :--- | :--- | :--- | :--- | | Rental income | $79,542 | $55,810 | $23,732 | | Other income | $555 | $385 | $170 | | **Total revenues** | **$80,097** | **$56,195** | **$23,902** | Change in Expenses (Six Months Ended June 30, 2025 vs 2024, in thousands) | Expense Component | 2025 | 2024 | $ Change | | :--- | :--- | :--- | :--- | | Operating and maintenance | $11,068 | $5,991 | $5,077 | | Real estate taxes | $9,792 | $5,996 | $3,796 | | General and administrative | $17,084 | $3,725 | $13,359 | | Depreciation and amortization | $30,502 | $18,611 | $11,891 | - The increase in revenues and most operating expenses for H1 2025 was primarily driven by the acquisition of convenience shopping centers, with G&A expenses rising due to post-spin-off costs as a standalone public company[117](index=117&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) The company defines and reconciles non-GAAP measures, reporting strong growth in FFO and Operating FFO for H1 2025, alongside a 4.4% increase in Same-Property NOI FFO and Operating FFO Reconciliation (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to Curbline | $20,942 | $14,211 | | Depreciation and amortization | $30,464 | $18,611 | | **FFO attributable to Curbline** | **$51,364** | **$32,822** | | Transaction, debt extinguishment and other costs | $702 | $7,223 | | **Operating FFO attributable to Curbline** | **$52,066** | **$40,163** | - Same-Property NOI increased by **4.4%** for the six months ended June 30, 2025, compared to the prior-year period, rising from **$38.9 million** to **$40.6 million**[139](index=139&type=chunk) [Liquidity, Capital Resources and Financing Activities](index=38&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20FINANCING%20ACTIVITIES) The company maintained strong liquidity as of June 30, 2025, actively engaging in capital markets to fund its acquisition strategy and declaring quarterly dividends - At June 30, 2025, primary sources of capital were unrestricted cash of **$429.9 million** and a **$400.0 million** undrawn unsecured line of credit[141](index=141&type=chunk) - The company drew **$100.0 million** on its Term Loan Facility in March 2025, with the all-in rate on this loan fixed at **4.678%** via an interest rate swap[144](index=144&type=chunk)[146](index=146&type=chunk) - The company declared quarterly cash dividends of **$0.16 per share** for both Q1 and Q2 2025, totaling **$34.2 million** declared year-to-date[157](index=157&type=chunk) [Economic Conditions](index=45&type=section&id=ECONOMIC%20CONDITIONS) Management observes steady retailer demand for its properties in high-income suburban areas, benefiting from a diversified tenant base despite macroeconomic risks - The company continues to experience steady retailer demand, executing new leases and renewals for approximately **217 thousand square feet of GLA** in H1 2025[176](index=176&type=chunk) - The tenant base is diversified, with only one tenant, Starbucks, accounting for **2.6%** of the Company's annualized consolidated rental revenues as of June 30, 2025[177](index=177&type=chunk) - Management acknowledges risks from inflation, higher interest rates, and evolving consumer behaviors, but believes its portfolio is well-positioned due to its location in high-income suburban communities and focus on necessity-based tenants[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, which is mitigated by effectively fixing its variable-rate debt through interest rate swaps - The company's primary market risk exposure is interest rate risk[183](index=183&type=chunk) - The interest rate risk on the **$100.0 million** Term Loan Facility has been mitigated through an interest rate swap, effectively fixing the rate through October 2029, with an all-in interest rate of **4.678%** based on the current spread[183](index=183&type=chunk)[185](index=185&type=chunk) - The company does not plan to enter into any derivative financial instruments for trading or speculative purposes[188](index=188&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the Company's disclosure controls and procedures were effective[189](index=189&type=chunk) - There were no changes in the Company's internal control over financial reporting during Q2 2025 that materially affected, or are reasonably likely to materially affect, internal controls[190](index=190&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, and other required disclosures [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, none of which are expected to have a material adverse effect on its financial position or operations - The company is subject to various legal proceedings which, taken together, are not expected to have a material adverse effect on the Company[192](index=192&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the risk factors set forth in the Annual Report on Form 10-K[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[194](index=194&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[195](index=195&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company reports no other information - None[197](index=197&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including key agreements and certifications - Key exhibits filed include the Note and Guaranty Agreement from June 26, 2025, officer certifications, and Inline XBRL documents[201](index=201&type=chunk)

Financial Data and Key Metrics Changes - Curbline Properties acquired $415 million of properties in Q2 2025 and raised $300 million of debt capital [5][15] - NOI increased over 8% sequentially, driven by organic growth and acquisitions [16] - Same property NOI rose 6.2% for the quarter and 4.4% year-to-date [18] Business Line Data and Key Metrics Changes - Leasing volume reached almost 50,000 square feet, the highest since tracking began, with a lease rate of 96.1% [10][18] - Blended straight-line leasing spreads were 22% for the trailing twelve months [10] Market Data and Key Metrics Changes - Average household incomes for Q2 investments were nearly $137,000, with a weighted average lease rate over 96% [15] - Curbline's top five markets (Miami, Atlanta, Phoenix, Orlando, Houston) represent 44% of ABR [58] Company Strategy and Development Direction - Curbline focuses on convenience properties, emphasizing capital efficiency and high tenant renewal rates [6][8] - The company aims to acquire properties in affluent markets and is expanding into new submarkets like Dallas and New York Metro [13][14] - The company has a unique capital structure and received an investment-grade credit rating from Fitch, enhancing its competitive position [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth potential, citing a strong pipeline of acquisition opportunities and favorable market conditions [5][15] - The company raised OFFO guidance to a range between $1 and $1.03 per share for 2025, driven by better-than-projected operations [19] Other Important Information - Curbline's CapEx as a percentage of NOI was just over 7%, with expectations to remain below 10% for the full year [18] - The company has acquired over $750 million of assets since its spin-off, demonstrating strong acquisition volume [11] Q&A Session Summary Question: Can you comment on cap rate trends and the acquisition pipeline? - Management noted that cap rates have remained stable, blending to about a 6% on forward twelve-month NOI, with half of the pipeline being off-market opportunities [26][27] Question: Any commentary on tariff impacts and leasing spreads? - Management indicated no significant impact from tariffs on leasing economics or volume, with leasing spreads expected to remain consistent with 2024 [30] Question: Will there be any dispositions as you ramp up portfolio acquisitions? - Management confirmed there is no disposition pipeline and they are not buying assets they do not want to own long-term [34][35] Question: What is the current thought process on entering new markets? - Management is open to acquiring in various markets as long as the properties meet their criteria, with a focus on understanding and believing in the market [36][82] Question: How do you manage occupancy costs across your portfolio? - Management stated that occupancy costs are monitored primarily for local or regional tenants, with limited visibility for national tenants [79] Question: Will the shared service agreement with Site Centers impact Curbline? - Management indicated that the shared service agreement allows for efficient management of expenses, and any changes in Site Centers' plans would not significantly impact Curbline [61][62]

Financial Data and Key Metrics Changes - The company reported a sequential increase in Net Operating Income (NOI) of over 8%, driven by stronger base rent, recoveries, and other income [14][15] - Same property NOI increased by 6.2% for the quarter and 4.4% year-to-date [17] - Capital expenditures (CapEx) as a percentage of NOI was just over 7%, with expectations to remain below 10% for the full year [17][21] Business Line Data and Key Metrics Changes - The company achieved its highest quarterly new leasing volume since tracking began, with almost 50,000 square feet of new leases signed [9] - The lease rate increased to 96.1%, among the highest in the sector, with blended straight-line leasing spreads of 22% for the trailing twelve months [9][14] - The company acquired 19 properties for $155 million in the second quarter, continuing to focus on affluent markets [12][13] Market Data and Key Metrics Changes - Average household incomes for second quarter investments were nearly $137,000, with a weighted average lease rate of over 96% [13] - The company has been active in both primary and secondary markets, with significant acquisitions in Houston, Chicago, Phoenix, and Atlanta [12][57] Company Strategy and Development Direction - The company focuses exclusively on convenience properties, which have shown strong financial performance and high tenant renewal rates [6][10] - The strategy includes acquiring properties that share common characteristics with the existing portfolio, emphasizing visibility, access, and compelling economics [10][12] - The company aims to leverage its strong balance sheet and investment-grade credit rating to continue scaling and acquiring assets [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential, highlighting a robust pipeline of acquisition opportunities and strong demand for leasing [4][14] - The company raised its Operating Funds From Operations (OFFO) guidance for 2025 to a range between $1 and $1.03 per share, driven by better-than-expected operations [18] - Management noted that while leasing spreads may experience volatility, overall leasing activity remains elevated [16][30] Other Important Information - The company has raised $300 million in debt capital and has a net cash position of almost $430 million, providing substantial liquidity for future acquisitions [13][21] - The company received its inaugural investment-grade credit rating from Fitch, which is expected to lower borrowing costs [20] Q&A Session Summary Question: Can you comment on cap rate trends and the acquisition pipeline? - Management indicated that cap rates have not changed dramatically, blending to about a 6% on forward twelve-month NOI, with half of the pipeline being off-market opportunities [26][27] Question: Any commentary on tariff impact and leasing spreads? - Management noted that there has been no change in the tone surrounding tariffs, and leasing spreads are expected to remain consistent with previous years despite some quarterly volatility [30] Question: Are there plans for dispositions as acquisitions ramp up? - Management clarified that there is no disposition pipeline and they do not expect to engage in capital recycling, focusing instead on long-term acquisitions [35][36] Question: What is the current thought process on entering new markets? - Management expressed a willingness to enter new markets if the right opportunities arise, emphasizing the importance of understanding market dynamics [37][38] Question: How do you view the Midwest market for acquisitions? - Management stated that acquisitions are based on financial returns, and they are open to opportunities in the Midwest as long as they meet their criteria [80] Question: Are occupancy costs used as key metrics for managing rents? - Management indicated that occupancy costs are minimally used, primarily for local or regional tenants, as most of the portfolio consists of national credit tenants [78][79]

Financial Performance - Earnings per share were $0.10[8] - Operating Funds From Operations (OFFO) per share was $0.26[9] - Same-Property Net Operating Income (SPNOI) growth was +6.2%[7, 10] - New straight-line lease spreads increased by +30%[7, 15] - Renewal straight-line lease spreads increased by +20%[7, 15] - Blended straight-line lease spreads increased by +23.9%[11] Acquisitions and Portfolio - The company acquired 19 properties in 2Q25 for $155 million[7, 11] - The company acquired 29 properties in 3Q25 to date for $260 million, including a 23-property portfolio for $159 million[7] - Total portfolio Net Operating Income (NOI) growth was 39.1% in 2Q25[7, 43] - Leased rate of 96.1%, up 10 basis points sequentially[7, 15] Liquidity and Capital - The company has over $1 billion of liquidity, including $430 million in cash, $400 million of credit facility availability, and $300 million from debt proceeds as of June 30, 2025[7, 31]

[Earnings Release & Financial Statements](index=4&type=section&id=Earnings%20Release%20%26%20Financial%20Statements) [Press Release](index=4&type=section&id=Press%20Release) The company reported strong Q2 2025 results with significant growth in net income and Operating FFO, leading to raised full-year guidance - The CEO highlighted strong Q2 performance driven by **results ahead of expectations**, the **highest quarterly new leasing volume** since formation, **$155 million in acquisitions**, and **$150 million in capital raising**[11](index=11&type=chunk) - Significant recent activities include acquiring 19 centers for **$154.9M in Q2**, obtaining a **'BBB' Fitch rating**, and entering a **$150M private placement** of unsecured senior notes[14](index=14&type=chunk)[20](index=20&type=chunk) Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income Attributable to Curbline | $10.4 million | $6.2 million | | Diluted EPS | $0.10 | $0.06 | | Operating FFO (OFFO) | $26.9 million | $19.8 million | | OFFO per Diluted Share | $0.26 | $0.19 | Key Quarterly Operating Results (Q2 2025) | Metric | Value/Change | | :--- | :--- | | Same-Property NOI Growth (YoY) | +6.2% | | Leased Rate | 96.1% | | Cash New Leasing Spreads | 10.6% | | Cash Renewal Leasing Spreads | 8.3% | | Signed Not Opened Spread | 260 bps ($6.4M annualized rent) | Revised Full-Year 2025 Guidance (per Diluted Share) | Metric | Prior Guidance | Revised Guidance | | :--- | :--- | :--- | | Net Income Attributable to Curbline | $0.43 - $0.50 | $0.37 - $0.44 | | Operating FFO Attributable to Curbline | $0.99 - $1.02 | $1.00 - $1.03 | [Company Summary](index=9&type=section&id=Company%20Summary) [Portfolio Summary](index=12&type=section&id=Portfolio%20Summary) The company's portfolio grew to 125 properties with strong operating metrics, concentrated in top MSAs like Miami, Atlanta, and Phoenix Portfolio Operational Overview (as of 6/30/2025) | Metric | Q2 2025 | | :--- | :--- | | Properties | 125 | | Total GLA (in thousands) | 3,689 | | Base Rent PSF | $35.26 | | Leased Rate | 96.1% | | Commenced Rate | 93.5% | | Quarterly SPNOI | 6.2% | Top 5 MSAs by ABR | MSA | % of ABR | | :--- | :--- | | Miami-Fort Lauderdale-West Palm Beach, FL | 12.9% | | Atlanta-Sandy Springs-Alpharetta, GA | 9.4% | | Phoenix-Mesa-Chandler, AZ | 9.3% | | Orlando-Kissimmee-Sanford, FL | 7.1% | | Houston-The Woodlands-Sugar Land, TX | 5.3% | Trailing Twelve-Month (TTM) Leasing Spreads | Spread Type | New Leases | Renewals | Blended | | :--- | :--- | :--- | :--- | | Cash Rent Spreads | 15.3% | 8.5% | 10.4% | | Straight-Lined Rent Spreads | 33.0% | 18.1% | 22.4% | [Capital Structure](index=13&type=section&id=Capital%20Structure) The company maintained a strong capital structure with a total enterprise value of $2.07 billion and a net cash position of approximately $330 million Capital Structure Summary (as of June 30, 2025) | Metric | Value (in thousands) | | :--- | :--- | | Total Equity Market Capitalization | $2,402,050 | | Total Debt | $100,000 | | Less: Cash | ($429,865) | | Net Debt | ($329,865) | | Total Enterprise Value | $2,072,185 | [Debt Detail](index=14&type=section&id=Debt%20Detail) The company's debt consists of a $100 million unsecured term loan, with an undrawn $400 million revolver providing significant flexibility Debt Composition (as of June 30, 2025) | Debt Instrument | Balance (in thousands) | Maturity Date | Interest Rate | | :--- | :--- | :--- | :--- | | Unsecured Revolver ($400m) | $0 | Sep-29 | SOFR+0.95% | | Unsecured Term Loan ($100m) | $100,000 | Oct-29 | 4.68% | | **Total Debt** | **$100,000** | | | [Same Property Metrics](index=15&type=section&id=Same%20Property%20Metrics) Same-Property NOI grew by a strong 6.2% in Q2 2025, driven by a 6.7% increase in same-property revenues - The same-property leased rate **increased by 20 basis points to 96.5%** as of Q2 2025 compared to 96.3% in Q2 2024[50](index=50&type=chunk) Same-Property NOI Performance (vs. Prior Year) | Period | Revenue Change | Expense Change | SPNOI Change | | :--- | :--- | :--- | :--- | | **Q2 2025** | 6.7% | 8.3% | 6.2% | | **6M 2025** | 6.0% | 11.4% | 4.4% | [Leasing Summary](index=16&type=section&id=Leasing%20Summary) The company executed 42 leases in Q2 2025, achieving blended cash rent spreads of 9.2% and strong TTM leasing activity Q2 2025 Leasing Spreads (Comparable Pool) | Lease Type | Cash Spread | Straight-Lined Spread | | :--- | :--- | :--- | | New Leases | 10.6% | 29.5% | | Renewals | 8.3% | 20.0% | | **New + Renewals** | **9.2%** | **23.9%** | Trailing Twelve-Month Leasing Spreads (Comparable Pool) | Lease Type | Cash Spread | Straight-Lined Spread | | :--- | :--- | :--- | | New Leases | 15.3% | 33.0% | | Renewals | 8.5% | 18.1% | | **New + Renewals** | **10.4%** | **22.4%** | [Lease Expiration Schedule](index=17&type=section&id=Lease%20Expirations) The company maintains a well-staggered lease expiration schedule, with less than 12% of ABR expiring through 2026 Lease Expirations by ABR | Year | % of ABR Expiring | | :--- | :--- | | 2025 | 2.3% | | 2026 | 8.9% | | 2027 | 12.1% | | 2028 | 17.5% | | 2029 | 9.9% | | Thereafter | 48.4% | [Top 25 Tenants](index=18&type=section&id=Top%2025%20Tenants) The tenant base is highly diversified, with the top 25 tenants representing only 24.3% of total ABR - The top 25 tenants contribute **24.3% of total ABR**, demonstrating a diversified tenant roster[60](index=60&type=chunk) Top 5 Tenants by ABR | Rank | Tenant | % of Total ABR | | :--- | :--- | :--- | | 1 | Starbucks | 2.6% | | 2 | Verizon | 1.5% | | 3 | Darden | 1.3% | | 4 | JPMorgan Chase | 1.3% | | 5 | Inspire Brands | 1.2% | [Investments](index=19&type=section&id=Investments) [Acquisitions](index=19&type=section&id=Acquisitions) The company maintained a rapid acquisition pace, investing $539.5 million year-to-date through Q3 2025 2025 Acquisition Summary (YTD) | Period | Owned GLA (in thousands) | Price (in thousands) | | :--- | :--- | :--- | | Q1 2025 | 285 | $124,190 | | Q2 2025 | 306 | $154,906 | | Q3 2025 QTD | 608 | $260,386 | | **Total 2025 YTD** | **1,199** | **$539,482** | [Shopping Center Summary](index=20&type=section&id=Shopping%20Center%20Summary) [Property List](index=20&type=section&id=Property%20List) The portfolio comprises 125 geographically diversified properties with concentrations in high-growth suburban markets - The portfolio comprises **125 properties** as of June 30, 2025[65](index=65&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - The property list indicates a **strong presence in high-growth suburban markets**, including 13 properties in the Phoenix-Mesa-Chandler MSA and 14 in the Atlanta-Sandy Springs-Alpharetta MSA[65](index=65&type=chunk)[67](index=67&type=chunk) [Reporting Policies and Other](index=23&type=section&id=Reporting%20Policies%20and%20Other) [Notable Accounting Policies and Non-GAAP Measures](index=23&type=section&id=Notable%20Accounting%20Policies%20and%20Non-GAAP%20Measures) The company utilizes standard non-GAAP REIT metrics like FFO and SPNOI to evaluate core operating performance - **FFO** is defined according to NAREIT standards, starting with net income and excluding real estate depreciation and gains/losses from property sales to better reflect portfolio performance[75](index=75&type=chunk) - **Operating FFO** is a further refinement of FFO, excluding non-core items like transaction costs to provide a clearer view of ongoing operational performance[76](index=76&type=chunk) - **SPNOI** includes only assets owned for the entirety of both comparable periods and excludes non-cash items to measure performance for a consistent pool of properties[82](index=82&type=chunk)

Core Viewpoint - Curbline Properties (CURB) is a high-end shopping center REIT focusing on small shop retail in affluent areas, recently spun off from Site Centers, and is now being added to the coverage universe at Portfolio Income Solutions [1]. Property Portfolio - CURB owns 107 properties with approximately 3.4 million leasable square feet, primarily located in markets such as Atlanta, Phoenix, Miami, Houston, and Charlotte [2][4]. - The properties are predominantly small shop spaces with minimal anchor store exposure, leading to a higher average rent per square foot of $35.14 [4][5]. Leasing Performance - In Q1'25, CURB reported a +14.2% blended cash renewal spread and a +26.9% blended GAAP spread, indicating strong leasing performance [9]. - Leased occupancy stands at 96%, which is significantly higher than commenced occupancy at 93.5%, suggesting potential for contractually baked-in growth from signed but not yet occupied leases [10]. Growth Outlook - CURB is expected to experience rapid AFFO/share growth driven by moderate organic growth and aggressive external growth through acquisitions, with an anticipated same-store NOI growth of about 3% annually [11][14]. - The company has a substantial cash position of approximately $494 million, allowing for significant acquisition potential without incurring high debt levels [15]. Valuation - CURB's current AFFO multiple is around 23X, which may appear expensive; however, adjustments for its unique capital structure suggest a valuation based on enterprise value rather than traditional multiples [18][20]. - The implied market cap based on various cap rates indicates that CURB is trading at a cap rate in the high 6s on mark-to-market NOI, suggesting it may be undervalued compared to its properties' stabilized cap rates [26][27]. Overall Assessment - CURB is viewed as undervalued with a fair value estimated to be about 10% above its current market price, although it may have less upside compared to other shopping center REITs that are trading at deeper discounts [31][32]. - The company is positioned to deliver slightly above-market returns, with potential for favorable market price movement due to rapid AFFO/share growth from its cash deployment strategy [33].

Financial Performance - For the three months ended March 31, 2025, net income attributable to Curbline increased to $10.55 million, up from $7.98 million in the prior year, representing a year-over-year growth of 32%[97] - Funds from Operations (FFO) attributable to Curbline for the same period rose to $24.95 million, compared to $17.21 million in the previous year, marking a 45% increase[97] - Total revenues for the three months ended March 31, 2025, increased to $38,695,000 from $28,039,000 in 2024, representing a $10,656,000 increase or approximately 38% growth[100] - Rental income rose to $38,438,000 in Q1 2025, up from $27,866,000 in Q1 2024, marking a $10,572,000 increase or about 38%[100] - Net income attributable to Curbline increased to $10,550,000 in Q1 2025 from $7,975,000 in Q1 2024, reflecting a $2,575,000 increase or approximately 32%[104] - Funds from Operations (FFO) attributable to Curbline for Q1 2025 was $24,954,000, up from $17,210,000 in Q1 2024, indicating a $7,744,000 increase or about 45%[116] - Operating Funds from Operations (Operating FFO) for Q1 2025 reached $25,127,000, compared to $20,321,000 in Q1 2024, representing a $4,806,000 increase or approximately 24%[116] - Total Curbline NOI for the same period was $28.472 million, reflecting a 28.9% increase compared to $22.086 million in the prior year[121] Property and Leasing Information - As of March 31, 2025, Curbline Properties Corp. owned 107 convenience shopping centers with a total gross leasable area (GLA) of 3.4 million square feet, achieving an aggregate leased rate of 96.0% and occupancy of 93.5%[86] - The average annualized base rent (ABR) per square foot was $35.14 as of March 31, 2025, a slight decrease from $35.62 at December 31, 2024, and $35.87 at March 31, 2024[98] - New cash leasing spreads were reported at 20.8%, while cash renewal leasing spreads were at 8.3% for the first quarter of 2025[98] - Approximately 54% of the ABR under Curbline's leases is set to expire within the next five years, providing opportunities for rent increases[95] - The Company executed new leases and renewals totaling approximately 124,000 square feet of GLA for the three months ended March 31, 2025[149] - As of March 31, 2025, the convenience property portfolio had leased and occupancy rates of 96.0% and 93.5%, respectively, with an ABR per occupied square foot of $35.14[151] Acquisitions and Investments - Curbline acquired 16 properties for a total purchase price of $139.1 million during the first quarter of 2025[98] - The Company acquired 16 convenience shopping centers for a total purchase price of $139.1 million through April 22, 2025[138] Cash and Debt Management - As of March 31, 2025, the Company had $594 million in unrestricted cash and a $400 million undrawn line of credit, with total debt outstanding at $100 million[123] - The Company maintains a $100 million interest rate swap agreement to fix the variable-rate SOFR component of its Term Loan Facility at 3.578%[128] - The Company had $100.0 million of indebtedness as of March 31, 2025, with a fixed interest rate of 5.078% on its Term Loan Facility[153] - The Company’s fixed-rate debt carrying value was adjusted to include the $100.0 million of variable-rate debt swapped to a fixed rate, with a fair value of the swap as an asset of $19,722 at March 31, 2025[160] - A 100 basis-point increase in market interest rates would adjust the fair value of the swap to an asset of $3.1 million at March 31, 2025[161] Dividend and Shareholder Returns - The company declared a quarterly cash dividend of $0.16 per share of common stock, paid in April 2025[98] - The Company declared a quarterly cash dividend of $0.16 per share, totaling $17.1 million, with $17 million paid on April 8, 2025[130] Operational Challenges and Strategies - Rising interest rates and market volatility pose risks to the Company’s ability to finance future investments and maturities[153] - The Company believes it can backfill spaces vacated by bankrupt or non-renewing tenants due to favorable market conditions[152] - The Company intends to actively manage interest costs on variable-rate debt and may enter into swap positions or interest rate caps[162] - The Company routinely monitors tenant credit profiles to assess potential impacts on financial statements and cash flow[152] - The increase in recoveries from tenants was primarily due to acquisitions, with recoveries at approximately 92.4% of operating expenses for Q1 2025, down from 96.2% in Q1 2024[100] - General and administrative expenses surged to $8,928,000 in Q1 2025 from $1,524,000 in Q1 2024, reflecting a $7,404,000 increase[101] - The company reported a decrease in lease termination fees and ancillary income from $2,090,000 in Q1 2024 to $1,090,000 in Q1 2025, a decline of $1,000,000[100] - The Company has not entered into any derivative financial instruments for trading or speculative purposes as of March 31, 2025[162]

Financial Data and Key Metrics Changes - Curbline Properties reported a nearly 9% sequential increase in NOI, driven by organic growth and acquisitions [27] - CapEx as a percentage of NOI was under 5%, leading to approximately $25 million of retained cash flow before distributions, despite NOI being $28 million [13][29] - The company raised its OFFO guidance to a range between $0.99 and $1.02 per share for 2025, reflecting better-than-projected operations [30] Business Line Data and Key Metrics Changes - The leasing rate increased by 50 basis points sequentially to 96%, with blended straight-line leasing spreads at 27% [15] - Same-property NOI growth is expected to average greater than 3% for the three-year period ending in 2026 [15] - The company signed almost 120,000 square feet of new leases and renewals in Q1, including notable tenants like AT&T and Verizon [14] Market Data and Key Metrics Changes - Curbline owns over 3.3 million square feet of convenience assets, representing less than 1% of the total U.S. inventory of 950 million square feet [16] - The average household income for first-quarter investments was nearly $110,000, with a weighted average lease rate of over 95% [22] Company Strategy and Development Direction - Curbline focuses exclusively on convenience properties, which are expected to outperform in various macro environments due to high tenant retention and low CapEx [7][12] - The company plans to continue acquiring convenience properties, with a current pipeline exceeding $500 million [19][20] - The strategy emphasizes capital efficiency and the ability to generate cash flow growth with minimal capital investment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to generate compelling stakeholder value, supported by a strong balance sheet with nearly $600 million in cash [25] - The demand for available space remains strong, driven by existing retailers and service tenants expanding into suburban markets [23] - Management acknowledged potential impacts from macroeconomic changes but emphasized the attractiveness of small-format retail in affluent areas [24] Other Important Information - The company has a net cash position and $1 billion in liquidity, positioning it well for future investments [25][35] - Curbline's business model allows for quick tenant turnover and lower costs associated with re-leasing spaces [106] Q&A Session Summary Question: Thoughts on funding sources and cost of capital - Management indicated they are exploring various funding sources, including bank, bond, and insurance markets, and will choose the best option as the year progresses [41][42] Question: Details on the acquisition pipeline - The acquisition pipeline consists mostly of single asset purchases, with a blended cap rate around 6.25% [48][49] Question: Impact of tariffs on underwriting and sector exposure - Management noted that most tenants do not carry inventory, minimizing the impact of tariffs, but acknowledged that higher capital costs may affect investment decisions [52][55] Question: Changes in seller willingness to transact - Seller willingness remains firm, primarily driven by life events rather than market timing, leading to consistent inventory levels [64] Question: Same-store growth and occupancy changes - Same-property NOI was up 2.5% for the quarter, with occupancy metrics impacted by a small pool of properties [29][66] Question: Confidence in affluent portfolio amidst consumer pullback - Management emphasized the importance of zoning and scarcity value in affluent areas, which supports tenant demand despite broader consumer trends [88][89] Question: Acquisition guidance for 2025 - The company maintains a $500 million acquisition target for 2025, with potential for exceeding this based on current deal flow [96][97]

Financial Data and Key Metrics Changes - Curbline Properties reported a nearly 9% sequential increase in NOI, driven by organic growth and acquisitions [27] - CapEx as a percentage of NOI was under 5%, leading to approximately $25 million of retained cash flow before distributions, despite NOI being $28 million [13][29] - The company raised its OFFO guidance to a range between $0.99 and $1.02 per share for 2025, reflecting better-than-expected operations and acquisition pacing [30] Business Line Data and Key Metrics Changes - The leasing rate increased by 50 basis points sequentially to 96%, with blended straight-line leasing spreads at 27% [15] - Same-property NOI growth is expected to average greater than 3% for the three-year period ending in 2026 [15] - The company signed almost 120,000 square feet of new leases and renewals in Q1, including notable tenants like AT&T and Verizon [14] Market Data and Key Metrics Changes - Curbline owns over 3.3 million square feet of convenience assets, representing less than 1% of the total U.S. inventory of 950 million square feet [16] - The average household income for the first quarter investments was nearly $110,000, with a weighted average lease rate of over 95% [22] Company Strategy and Development Direction - Curbline focuses exclusively on convenience properties, which are expected to outperform in various macro environments due to high tenant retention and low CapEx [7][12] - The company plans to continue acquiring convenience properties, with a current pipeline exceeding $500 million [19][20] - The strategy emphasizes capital efficiency and the ability to generate cash flow growth with minimal capital investment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to generate compelling stakeholder value, supported by a strong balance sheet with nearly $600 million in cash [25] - The demand for available space remains strong, driven by existing retailers and service tenants expanding into suburban markets [23] - Management acknowledged potential impacts from macroeconomic changes but remains confident in the value proposition of small format retail [24] Other Important Information - The company has a net cash position and $1 billion in liquidity, positioning it well for future investments [25][35] - Curbline's business model allows for quick tenant turnover and lower costs associated with backfilling vacancies, enhancing resilience during economic downturns [106][108] Q&A Session Summary Question: Thoughts on funding sources and cost of capital - Management indicated they are exploring various funding sources, including bank, bond, and insurance markets, and will choose the best option as the year progresses [41][42] Question: Details on the acquisition pipeline - The acquisition pipeline consists mostly of single asset purchases, with a blended cap rate around 6.25% [48][49] Question: Impact of tariffs on underwriting and sector exposure - Management noted that most tenants do not carry inventory, minimizing the impact of tariffs, but acknowledged that higher capital costs may influence investment decisions [52][55] Question: Changes in seller willingness to transact - Seller willingness remains firm, primarily driven by life events rather than market timing, maintaining consistent inventory levels [64] Question: Same-store growth and occupancy changes - Same-store NOI was up 2.5% for the quarter, with occupancy metrics impacted by tenant renewals and terminations [29][66] Question: Confidence in affluent portfolio amidst consumer pullback - Management emphasized the importance of zoning and scarcity value in affluent areas, which supports the business model despite broader consumer trends [88][89] Question: Acquisition guidance for future years - The company plans to maintain a $500 million acquisition target for 2025, with potential for exceeding this based on current deal flow [96][98]