SITE Centers (SITC) - 2024 Q4 - Annual Results

Earnings Release & Financial Statements Press Release SITE Centers reported a Q4 2024 net loss of $13.2 million, a sharp decline from Q4 2023's $193.6 million net income, primarily driven by the Curbline spin-off and preferred share redemption - On October 1, 2024, the company completed the spin-off of 79 convenience properties into a new entity, Curbline Properties, with these assets now treated as discontinued operations for all periods presented[9] - The company redeemed all outstanding 6.375% Class A Cumulative Redeemable Preferred Shares, resulting in a $6.2 million charge for the write-off of original issuance costs[10] Q4 2024 Key Financial and Operating Results (vs. Q4 2023) | Metric | Q4 2024 | Q4 2023 | Change Driver | | :--- | :--- | :--- | :--- | | Net (Loss) Income | ($13.2M) | $193.6M | Curbline spin-off, lower NOI, lower gain on sale | | Net (Loss) Income per Share | ($0.25) | $3.69 | - | | Operating FFO (OFFO) | $8.3M | $54.0M | Curbline spin-off, lower NOI, lower interest income | | OFFO per Share | $0.16 | $1.03 | - | | Pro Rata Leased Rate | 91.1% | 92.2% | - | | Pro Rata Commenced Rate | 90.6% | 89.6% | New tenant store openings | | Cash Renewal Leasing Spreads | 10.6% | N/A | Strong leasing demand | Consolidated Financials Consolidated financials show significant year-over-year decreases in revenues, NOI, and total assets, primarily due to the Curbline spin-off and property dispositions, with total debt dramatically reduced from over $1.6 billion to $301 million Income Statement The consolidated income statement shows a Q4 2024 net loss of $13.2 million, down from $193.6 million net income in Q4 2023, primarily due to reduced rental income and the absence of a large gain on real estate disposition Consolidated Income Statement Highlights (in thousands) | Metric | 4Q24 | 4Q23 | 12M24 | 12M23 | | :--- | :--- | :--- | :--- | :--- | | Rental Income | $32,583 | $97,435 | $269,286 | $444,062 | | Net Operating Income | $19,398 | $65,024 | $175,423 | $301,991 | | Gain on Disposition of Real Estate | $50 | $187,796 | $633,219 | $218,655 | | (Loss) Income from Continuing Operations | ($5,822) | $186,958 | $525,764 | $229,349 | | Net (Loss) Income Common Shareholders | ($13,248) | $193,635 | $516,031 | $254,547 | | Diluted EPS | ($0.25) | $3.69 | $9.77 | $4.85 | FFO Reconciliation Q4 2024 Net Loss of $13.2 million reconciled to an Operating FFO of $8.3 million ($0.16 per share), a significant decrease from Q4 2023's $54.0 million, primarily due to the Curbline spin-off and property sales FFO and Operating FFO Reconciliation (in thousands, except per share) | Metric | 4Q24 | 4Q23 | 12M24 | 12M23 | | :--- | :--- | :--- | :--- | :--- | | Net (Loss) Income Common Shareholders | ($13,248) | $193,635 | $516,031 | $254,547 | | FFO attributable to Common Shareholders | $830 | $52,936 | $79,443 | $240,199 | | Operating FFO attributable to Common Shareholders | $8,287 | $53,979 | $166,724 | $247,872 | | Operating FFO per share – Diluted | $0.16 | $1.03 | $3.17 | $4.73 | Balance Sheet The Q4 2024 consolidated balance sheet reflects a dramatic reduction in total assets from $4.1 billion to $934 million and total liabilities from $1.9 billion to $417 million, primarily due to the Curbline spin-off and asset sales Consolidated Balance Sheet Highlights (in thousands) | Metric | 4Q24 | 4Q23 | | :--- | :--- | :--- | | Real estate, net | $772,012 | $2,386,143 | | Cash | $54,595 | $551,402 | | Total Assets | $933,602 | $4,061,350 | | Secured debt | $301,373 | $98,418 | | Unsecured debt | $0 | $1,303,243 | | Total Liabilities | $416,858 | $1,885,807 | | Total Equity | $516,744 | $2,175,543 | Company Summary Portfolio Summary As of December 31, 2024, SITE Centers' portfolio comprises 33 centers with 5.9 million sq. ft. pro-rata GLA, showing increased commenced occupancy to 90.6% and significant exposure to key MSAs Quarterly Operational Overview (Pro Rata Share) | Metric | 12/31/2024 | 12/31/2023 | | :--- | :--- | :--- | | Commenced Rate | 90.6% | 89.6% | | Leased Rate | 91.1% | 92.2% | | Base Rent PSF | $19.64 | $19.42 | Top 5 MSA Exposure by Pro Rata ABR | MSA | % of ABR | | :--- | :--- | | 1. Chicago-Naperville-Elgin, IL-IN-WI | 15.9% | | 2. Trenton, NJ | 12.7% | | 3. Orlando-Kissimmee-Sanford, FL | 12.3% | | 4. Phoenix-Mesa-Scottsdale, AZ | 7.4% | | 5. Atlanta-Sandy Springs-Roswell, GA | 7.1% | Capital Structure and Debt Detail As of December 31, 2024, SITE Centers' total market capitalization was $1.14 billion, reflecting significant deleveraging with total debt reduced to $413.3 million from $1.75 billion, and all unsecured debt and preferred stock eliminated Capital Structure (in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Common Shares Equity | $801,655 | $2,853,141 | | Perpetual Preferred Stock | $0 | $175,000 | | Total Debt (incl. JV share) | $413,318 | $1,746,640 | | Net Debt | $336,247 | $1,164,880 | | Total Market Capitalization | $1,137,902 | $4,193,020 | Debt Composition (SITE Share) | Rate Type | Balance (in thousands) | Weighted Avg. Years to Maturity | Weighted Avg. Interest Rate | | :--- | :--- | :--- | :--- | | Fixed | $175,982 | 3.9 years | 6.54% | | Variable | $237,336 | 3.5 years | 6.82% | | Total | $413,318 | 3.8 years | 6.70% | Leasing Summary In Q4 2024, SITE Centers executed 5 renewal leases with a strong 10.6% cash leasing spread, contributing to 109 full-year leases totaling 708,011 sq. ft. at a 7.8% combined cash spread Leasing Activity - New + Renewals (Pro Rata Share) | Period | Count | GLA | Cash Leasing Spread | | :--- | :--- | :--- | :--- | | 4Q24 | 5 | 21,015 | 10.6% | | Full Year 2024 | 109 | 708,011 | 7.8% | Net Effective Rents - Full Year 2024 (Pro Rata Share) | Lease Type | GLA | ABR PSF | Total Capex PSF | NER PSF | | :--- | :--- | :--- | :--- | :--- | | New Leases | 42,086 | $33.33 | $6.85 | $26.48 | | Renewals | 665,925 | $18.51 | $0.19 | $18.32 | Lease Expirations The pro-rata lease expiration schedule shows 7.6% of ABR expiring in 2025, peaking at 16.7% in 2027, with 2025 expirations at an average rent of $23.23 PSF, presenting re-leasing opportunities Lease Expirations by ABR (Pro Rata, No Options Exercised) | Year | % of Total ABR Expiring | | :--- | :--- | | 2025 | 7.6% | | 2026 | 8.2% | | 2027 | 16.7% | | 2028 | 15.0% | | 2029 | 15.4% | Top 30 Tenants The tenant base is well-diversified, with the top 30 tenants accounting for 52.2% of pro-rata ABR and the top five, led by TJX Companies at 4.6%, collectively representing 20.2% of total ABR Top 5 Tenants by Pro Rata ABR | Rank | Tenant | % of Total ABR | | :--- | :--- | :--- | | 1 | TJX Companies | 4.6% | | 2 | Dick's Sporting Goods | 4.4% | | 3 | Burlington | 4.3% | | 4 | Kroger | 3.6% | | 5 | PetSmart | 3.3% | Investments Transactions In 2024, SITE Centers was a net seller of assets, with minor acquisitions of $4.5 million and substantial dispositions totaling $2.25 billion at share, with no Q4 2024 activity 2024 Transaction Summary (at Share) | Transaction Type | Total 2024 Price (in thousands) | | :--- | :--- | | Acquisitions | $4,543 | | Dispositions | $2,252,434 | - There were no acquisitions or dispositions in Q4 2024[42] Unconsolidated Joint Ventures JV Overview SITE Centers holds interests in 11 properties through two unconsolidated joint ventures, including a 20% stake in DTP and a 50% interest in the Deer Park property, with combined JV debt totaling $441.8 million at 100% Unconsolidated Joint Venture Summary (at 100%) | Joint Venture | SITE Own % | of Properties | Owned GLA (thousands) | Leased Rate | Debt Balance (thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | DTP | 20% | 10 | 3,397 | 95.0% | $380,600 | | Prudential (RVIP IIIB) | 50% | 1 | 358 | 81.1% | $61,178 | JV Financials On a 100% basis, unconsolidated JVs generated $14.3 million in Q4 2024 Net Operating Income, resulting in a $1.6 million net loss, with SITE's pro-rata FFO share at $1.3 million, and total assets of $596 million Combined JV Income Statement (at 100%, in thousands) | Metric | 4Q24 | 4Q23 | | :--- | :--- | :--- | | Rental income | $19,001 | $21,515 | | Net operating income | $14,308 | $16,368 | | Net income (loss) | ($1,553) | ($926) | | FFO at SITE's ownership interests | $1,337 | $1,654 | Combined JV Balance Sheet (at 100%, in thousands) | Metric | 4Q24 | 4Q23 | | :--- | :--- | :--- | | Real estate, net | $542,973 | $611,858 | | Total Assets | $596,206 | $688,453 | | Mortgage debt | $426,462 | $464,255 | | Total Liabilities | $460,889 | $503,161 | Shopping Center Summary Property List As of December 31, 2024, the company's portfolio consists of 33 wholly-owned and JV properties, primarily open-air shopping centers in high-income suburban areas with major national anchor tenants - The portfolio consists of 33 operating centers, a mix of wholly-owned and joint venture properties[58] - Anchor tenants across the portfolio include major national retailers such as TJX Companies, Dick's Sporting Goods, Best Buy, and various grocery chains like Kroger and Whole Foods[58] Reporting Policies and Other Notable Accounting and Supplemental Policies The company's accounting policies detail the treatment of the Curbline Properties spin-off as discontinued operations, specific revenue recognition for lease terminations, and capitalization policies for construction and renovations - Discontinued Operations: The spin-off of Curbline Properties is considered a strategic shift, and its 79 properties are reflected as discontinued operations for all periods presented[61] - Cash Basis Tenants: For tenants where collection is not probable, the company uses the cash basis of accounting, recognizing no rental income until payment is received and fully reserving existing receivables[64] - Capitalization: Expenditures for maintenance are expensed, while renovations that extend the asset's life are capitalized; interest and certain administrative costs are capitalized during construction[69] Non-GAAP Measures The company uses non-GAAP measures like FFO, Operating FFO (OFFO), and Net Operating Income (NOI) to provide additional performance insights, adjusting for items such as real estate depreciation, property sales, and non-comparable costs - FFO: Calculated per NAREIT definition by adjusting net income for real estate depreciation, gains/losses on property sales, and other items[73] - Operating FFO (OFFO): A further adjusted metric that excludes non-comparable items like preferred share issuance write-offs, debt extinguishment costs, and transaction costs to show core operating results[74] - Net Operating Income (NOI): Calculated as property revenues less property-related expenses to show unleveraged operational performance and trends in occupancy and rental rates[78] Leasing Metrics for Wholly-Owned and Unconsolidated Joint Ventures at 100% This section provides granular 100% basis leasing metrics, distinguishing wholly-owned properties from joint ventures, showing JV properties generally have higher leased rates while wholly-owned properties command higher base rents Portfolio Summary at 100% At 100% basis, the total portfolio leased rate was 92.1% at year-end 2024, with wholly-owned properties at 90.9% leased rate and $19.81 PSF base rent, while JV properties had a 93.7% leased rate and $16.64 PSF base rent Portfolio Metrics at 100% (as of 12/31/2024) | Segment | Base Rent PSF | Leased Rate | | :--- | :--- | :--- | | Wholly Owned SITE | $19.81 | 90.9% | | Joint Venture (100%) | $16.64 | 93.7% | | Total Portfolio (100%) | $18.37 | 92.1% | Wholly-Owned Leasing Summary For full year 2024, the wholly-owned portfolio signed 61 new and renewal leases totaling 554,880 sq. ft. with a 7.9% combined cash leasing spread, and new leases achieving a strong $34.52 PSF net effective rent Wholly-Owned Leasing Activity - Full Year 2024 (at 100%) | Metric | New Leases | Renewals | New + Renewals | | :--- | :--- | :--- | :--- | | Count | 10 | 51 | 61 | | GLA | 24,560 | 530,320 | 554,880 | | Cash Spread | 8.3% | 7.9% | 7.9% | | NER PSF | $34.52 | $19.54 | $20.11 | JV Leasing Summary (at 100%) The unconsolidated joint venture portfolio, at 100%, signed 48 new and renewal leases in 2024 for 765,651 sq. ft. with a 6.9% combined cash leasing spread, and new leases at $15.15 PSF net effective rent JV Leasing Activity - Full Year 2024 (at 100%) | Metric | New Leases | Renewals | New + Renewals | | :--- | :--- | :--- | :--- | | Count | 9 | 39 | 48 | | GLA | 87,628 | 678,023 | 765,651 | | Cash Spread | 44.5% | 4.4% | 6.9% | | NER PSF | $15.15 | $13.50 | $13.03 | Wholly-Owned Lease Expirations For the wholly-owned portfolio (100%, no options), 8.1% of ABR expires in 2025, followed by 7.7% in 2026, and a peak of 17.0% in 2027, indicating a significant medium-term rent roll coming due Wholly-Owned Lease Expirations by ABR (100%, No Options) | Year | % of ABR Expiring | | :--- | :--- | | 2025 | 8.1% | | 2026 | 7.7% | | 2027 | 17.0% | JV Lease Expirations (at 100%) The joint venture portfolio's lease expirations (100%, no options) show 5.1% of ABR expiring in 2025, 12.1% in 2026, and 16.3% in 2027, indicating a more spread-out schedule than wholly-owned assets JV Lease Expirations by ABR (100%, No Options) | Year | % of ABR Expiring | | :--- | :--- | | 2025 | 5.1% | | 2026 | 12.1% | | 2027 | 16.3% |