SITE Centers (SITC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis for SITE Centers Corp. Item 1. Financial Statements – Unaudited This section presents the unaudited condensed consolidated financial statements of SITE Centers Corp. for the quarter and six months ended June 30, 2025, and comparative periods. Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time. | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :----------------------------- | :------------------------------- | :---------------- | :--------- | | Total real estate assets, net | $711,044 | $772,012 | $(60,968) | -7.9% | | Cash and cash equivalents | $153,789 | $54,595 | $99,194 | 181.7% | | Total Assets | $959,040 | $933,602 | $25,438 | 2.7% | | Indebtedness | $288,442 | $301,373 | $(12,931) | -4.3% | | Dividends payable | $79,054 | $— | $79,054 | N/A | | Total Liabilities | $472,358 | $416,858 | $55,500 | 13.3% | | Total Equity | $486,682 | $516,744 | $(30,062) | -5.8% | Consolidated Statements of Operations This section details the company's revenues, expenses, and net income for the reported periods. | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Rental income | $30,662 | $85,536 | $(54,874) | -64.2% | | Total Revenues from operations | $33,470 | $87,515 | $(54,045) | -61.8% | | Total Rental operation expenses | $33,486 | $73,118 | $(39,632) | -54.2% | | Income from continuing operations | $46,504 | $229,830 | $(183,326) | -79.8% | | Net income | $46,504 | $238,245 | $(191,741) | -80.5% | | Basic EPS (Total) | $0.88 | $4.49 | $(3.61) | -80.4% | | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Rental income | $62,112 | $177,262 | $(115,150) | -64.9% | | Total Revenues from operations | $76,093 | $181,567 | $(105,474) | -58.1% | | Total Rental operation expenses | $67,986 | $215,966 | $(147,980) | -68.5% | | Income from continuing operations | $49,589 | $196,847 | $(147,258) | -74.8% | | Net income | $49,589 | $214,693 | $(165,104) | -76.9% | | Basic EPS (Total) | $0.94 | $3.99 | $(3.05) | -76.4% | | Diluted EPS (Total) | $0.94 | $3.97 | $(3.03) | -76.3% | Consolidated Statements of Comprehensive Income This section presents net income and other comprehensive income components, reflecting total changes in equity from non-owner sources. | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net income | $49,589 | $214,693 | $(165,104) | -76.9% | | Total other comprehensive (loss) income | $(1,280) | $2,451 | $(3,731) | -152.2% | | Comprehensive income | $48,309 | $217,144 | $(168,835) | -77.8% | Consolidated Statements of Equity This section outlines changes in the company's equity, including net income, dividends, and other comprehensive income. | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (Absolute) | Change (%) | | :----------- | :----------------------------- | :------------------------------- | :---------------- | :--------- | | Total Equity | $486,682 | $516,744 | $(30,062) | -5.8% | - Dividends declared for common shares for the six months ended June 30, 2025, totaled $(79,054) thousand[18] - Comprehensive income (loss) for the six months ended June 30, 2025, was $45,803 thousand[18] Consolidated Statements of Cash Flows This section reports cash inflows and outflows from operating, investing, and financing activities. | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net cash flow provided by operating activities | $22,933 | $106,443 | $(83,510) | -78.5% | | Net cash flow provided by investing activities | $86,838 | $726,007 | $(639,169) | -88.0% | | Net cash flow used for financing activities | $(14,915) | $(215,903) | $200,988 | -93.1% | | Net increase in cash, cash equivalents and restricted cash | $94,856 | $616,547 | $(521,691) | -84.6% | | Cash, cash equivalents and restricted cash, end of period | $162,522 | $1,185,578 | $(1,023,056) | -86.3% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering the nature of business, accounting policies, and specific financial line items. 1. Nature of Business and Financial Statement Presentation This note describes the company's business, the impact of the Curbline spin-off, property dispositions, and its single operating segment. - SITE Centers Corp. is primarily engaged in owning, leasing, acquiring, redeveloping, and managing shopping centers, with credit risk concentrated in the retail industry[23] - On October 1, 2024, the Company completed the spin-off of 79 convenience retail properties into Curbline Properties Corp., which is reflected as discontinued operations in the financial statements for periods ended June 30, 2024[24] - For the three and six months ended June 30, 2025, the Company received gross proceeds of $95.3 million from the sale of two wholly-owned shopping centers, resulting in a gain on dispositions of $51.5 million[28] - For the three and six months ended June 30, 2024, the Company received gross proceeds of $764.2 million and $883.6 million, respectively, from the sale of 12 and 15 wholly-owned shopping centers, resulting in gains on dispositions of $233.3 million and $265.0 million, respectively[29] - The Company operates as a single operating segment, with performance assessed by the Chief Operating Decision Maker (CODM) using net income and Net Operating Income (NOI)[32] 2. Investments in and Advances to Joint Ventures This note details the company's ownership interests and financial performance from unconsolidated joint ventures. - As of June 30, 2025, and December 31, 2024, the Company held ownership interests in unconsolidated joint ventures with investments in 11 shopping center properties[36] | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Revenues from operations | $41,554 | $43,303 | $(1,749) | -4.0% | | Net income (loss) attributable to unconsolidated joint ventures | $215 | $6,179 | $(5,964) | -96.5% | | Company's share of equity in net income (loss) of joint ventures | $(29) | $78 | $(107) | -137.2% | - Revenues earned by the Company for providing asset management, property management, leasing, and development services to joint ventures were $2.4 million for the six months ended June 30, 2025, compared to $2.8 million for the same period in 2024[37] 3. Other Assets and Intangibles, net This note provides a breakdown of intangible assets and their associated amortization expense. | Intangible Asset | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (Absolute) | Change (%) | | :--------------- | :----------------------------- | :------------------------------- | :---------------- | :--------- | | In-place leases | $7,248 | $8,323 | $(1,075) | -12.9% | | Above-market leases | $294 | $363 | $(69) | -19.0% | | Lease origination costs | $743 | $848 | $(105) | -12.4% | | Tenant relationships | $3,088 | $3,407 | $(319) | -9.4% | | Total intangible assets, net | $11,373 | $12,941 | $(1,568) | -12.1% | - Amortization expense for intangibles was $1,472 thousand for the six months ended June 30, 2025, a decrease from $4,881 thousand for the same period in 2024[40] 4. Leases This note categorizes rental income into fixed and variable components. | Rental Income Component | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :---------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Fixed lease income | $45,296 | $127,682 | $(82,386) | -64.5% | | Variable lease income | $16,390 | $48,334 | $(31,944) | -66.1% | | Total rental income | $62,112 | $177,262 | $(115,150) | -64.9% | 5. Indebtedness This note details the company's mortgage indebtedness, including fixed and variable rates, and debt extinguishment costs. | Debt Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------- | :----------------------------- | :------------------------------- | :---------------- | :--------- | | Mortgage Indebtedness – Fixed Rate | $99,053 | $99,862 | $(809) | -0.8% | | Mortgage Indebtedness – Variable Rate | $192,985 | $206,900 | $(13,915) | -6.7% | | Total indebtedness | $288,442 | $301,373 | $(12,931) | -4.3% | - The Company closed and funded a $530.0 million mortgage loan (the "Mortgage Facility") on August 7, 2024, with an outstanding balance of $193.0 million as of June 30, 2025[44] - Debt extinguishment costs of $0.5 million were recorded in the second quarter of 2025 in conjunction with the release of one property from the mortgage facility[44] 6. Financial Instruments and Fair Value Measurements This note explains the fair value of financial instruments and the impact of interest rate swaps. - The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and other liabilities approximate fair value due to their short-term maturities[46] - Mortgage indebtedness had a carrying value of $288.4 million and an estimated fair value of $295.8 million at June 30, 2025[48] - A $200.0 million interest rate swap, previously on a term loan, was re-designated to the Mortgage Facility in 2024, with a fair value of $6.4 million remaining in Accumulated Other Comprehensive Income[50] 7. Other Comprehensive Income This note details the components of accumulated other comprehensive income, including cash flow hedges. | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (Absolute) | Change (%) | | :--------------------------------------- | :----------------------------- | :------------------------------- | :---------------- | :--------- | | Balance, Accumulated Other Comprehensive Income | $4,192 | $5,472 | $(1,280) | -23.4% | - The change in cash flow hedges was $(16) thousand, and amounts reclassified from accumulated other comprehensive income to interest expense were $(1,264) thousand for the period ended June 30, 2025[52] 8. Discontinued Operations This note explains the financial impact of the Curbline spin-off, reported as discontinued operations. - The spin-off of 79 convenience properties to Curbline on October 1, 2024, is reflected as discontinued operations for the three and six months ended June 30, 2024[53] | Metric | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | | Revenue from Operations | $56,195 | | Rental operation expenses | $30,689 | | Net income attributable to discontinued operations | $17,846 | - Capital expenditures included in discontinued operations for the six months ended June 30, 2024, were $80.9 million[53] 9. Transactions with Curbline Properties This note describes the agreements and financial obligations arising from the spin-off of Curbline Properties. - The Company completed the spin-off of Curbline Properties on October 1, 2024, and entered into various agreements to govern ongoing relationships, including the Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, and Shared Services Agreement[54] - As of June 30, 2025, the Company has an estimated $30.9 million obligation to complete redevelopment projects at Curbline-owned properties, recorded in "Amounts payable to Curbline"[55][59] - For the six months ended June 30, 2025, the Company recorded a cash fee of $1.5 million (2% of Curbline's gross revenue) and $1.2 million for the incremental fair value of services provided to Curbline in "Fee and other income"[59] - Sublease income of $0.8 million from Curbline for office space was included in "Rental income" for the six months ended June 30, 2025[58][59] 10. Earnings Per Share This note details the calculation of basic and diluted earnings per share, including the effect of a reverse stock split and special dividends. - A one-for-four reverse stock split of common shares was effected on August 16, 2024, with all share and per share data retroactively adjusted[60] | Metric | June 30, 2025 | June 30, 2024 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------------- | :--------- | | Basic EPS (Total) | $0.94 | $3.99 | $(3.05) | -76.4% | | Diluted EPS (Total) | $0.94 | $3.97 | $(3.03) | -76.3% | - The Company declared a special cash dividend of $1.50 per common share for the three and six months ended June 30, 2025[63] 11. Subsequent Events This note reports significant events occurring after the reporting period, such as property sales and dividend declarations. - In July and August 2025, the Company sold three properties for an aggregate sales price of $223.7 million, with $40.4 million utilized to repay indebtedness[64] - On August 1, 2025, the Company declared a special cash dividend of $3.25 per common share, payable on August 29, 2025[65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on SITE Centers Corp.'s financial condition, operational results, and liquidity for the quarter and six months ended June 30, 2025. EXECUTIVE SUMMARY This section provides an overview of the company's business, strategic shifts, financial performance highlights, and future outlook. - SITE Centers Corp. is a self-administered and self-managed Real Estate Investment Trust (REIT) focused on owning, leasing, acquiring, redeveloping, and managing shopping centers[68] - As of June 30, 2025, the Company's portfolio consisted of 31 shopping centers (including 11 owned through unconsolidated joint ventures) totaling approximately 8.3 million square feet of gross leasable area (GLA), plus two adjacent office buildings[68] - The spin-off of Curbline Properties Corp. on October 1, 2024, which included 79 convenience properties, represented a strategic shift and is reflected as discontinued operations for prior periods[69] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Net income attributable to common shareholders | $49,589 | $209,115 | $(159,526) | -76.3% | | FFO attributable to common shareholders | $22,959 | $92,108 | $(69,149) | -75.1% | | Operating FFO attributable to common shareholders | $16,629 | $115,684 | $(99,055) | -85.6% | | Earnings per share – Diluted | $0.94 | $3.97 | $(3.03) | -76.3% | - The decrease in net income for the six months ended June 30, 2025, was primarily due to lower gains from real estate dispositions, decreased rental revenue from property dispositions and the Curbline spin-off, and reduced interest income[70] - From July 1, 2023, to December 31, 2024, the Company generated approximately $3.1 billion from property sales to acquire convenience properties, capitalize Curbline, and redeem/repay outstanding unsecured indebtedness and preferred shares[71] - As of August 5, 2025, the Company generated an additional $319.0 million from the sale of five shopping centers in 2025, using approximately $54.3 million to repay indebtedness[71] - The Company expects future rental income and net income to decrease due to the Curbline spin-off, significant property dispositions, and tenant bankruptcies[73] - Growth opportunities include rental rate increases, continued lease-up of the portfolio, and rent commencement from recently executed leases[74] - Operational highlights through June 30, 2025, include selling five wholly-owned shopping centers for $319.0 million, declaring special cash dividends of $1.50 and $3.25 per common share, and leasing approximately 220,000 square feet of GLA[77] - Cash lease spreads for comparable leases executed in the six months ended June 30, 2025, were (17.6)% for new leases and 0.1% for renewals[77] - Total portfolio average annualized base rent per square foot increased to $19.83 at June 30, 2025, from $19.64 at December 31, 2024[77] - Aggregate occupancy of the operating shopping center portfolio was 87.5% at June 30, 2025, down from 90.6% at December 31, 2024[77] - The weighted-average cost of tenant improvements and lease commissions for new leases in H1 2025 was $3.57 per rentable square foot, a decrease from $6.85 for the full year 2024[77] RESULTS OF OPERATIONS This section analyzes the company's revenues, expenses, and net income, highlighting key drivers and changes over time. - The spin-off of Curbline Properties in October 2024 resulted in its financial results being reported as discontinued operations for all periods presented[79] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :---------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Rental income | $62,112 | $177,262 | $(115,150) | -64.9% | | Fee and other income | $13,981 | $4,305 | $9,676 | 224.8% | | Total revenues | $76,093 | $181,567 | $(105,474) | -58.1% | - The decrease in base and percentage rental income for the six months ended June 30, 2025, was primarily due to the disposition of shopping centers, accounting for an $82.4 million decrease[79] - At June 30, 2025, the Company owned 20 wholly-owned properties with an aggregate occupancy rate of 87.2% and average annualized base rent of $20.01 per occupied square foot[79] - Fee and other income for the six months ended June 30, 2025, included $8.4 million from the resolution of a condemnation proceeding with the State of Florida[81] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Operating and maintenance | $13,589 | $28,996 | $(15,407) | -53.1% | | Real estate taxes | $9,411 | $26,890 | $(17,479) | -65.0% | | Impairment charges | $— | $66,600 | $(66,600) | -100.0% | | General and administrative | $18,813 | $28,424 | $(9,611) | -33.8% | | Depreciation and amortization | $26,173 | $65,056 | $(38,883) | -59.8% | | Total Expenses from Operations | $67,986 | $215,966 | $(147,980) | -68.5% | - The decrease in operating expenses and real estate taxes was primarily due to the disposition of shopping centers[80] - General and administrative expenses decreased primarily due to the transfer of some employees to Curbline at the time of the spin-off[80] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Interest expense | $(10,879) | $(36,923) | $26,044 | -70.5% | | Interest income | $1,083 | $15,843 | $(14,760) | -93.2% | | Debt extinguishment costs | $(504) | $(10,263) | $9,759 | -95.1% | | Loss on derivative instruments | $— | $(5,166) | $5,166 | -100.0% | | Total Other Income and Expenses | $(12,426) | $(35,998) | $23,572 | -65.5% | - Weighted-average debt outstanding decreased from $1.5 billion in H1 2024 to $0.3 billion in H1 2025, while the weighted-average interest rate increased from 4.5% to 6.4%[82] - Interest income decreased due to less excess cash primarily as a result of sale proceeds maintained in money market accounts[82] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Net income | $49,589 | $214,693 | $(165,104) | -76.9% | - The decrease in net income was primarily due to lower gains from real estate dispositions, decreased rental revenue, and reduced interest income, partially offset by lower debt-related charges and impairment[84] NON-GAAP FINANCIAL MEASURES This section defines and reconciles non-GAAP financial measures like FFO and Operating FFO, used to assess REIT performance. - Funds from Operations (FFO) and Operating FFO are non-GAAP financial measures used to assess REIT financial performance, excluding GAAP historical cost depreciation and amortization of real estate and gains/losses from property dispositions[87][88] - FFO is consistent with NAREIT's definition, while Operating FFO further excludes certain non-comparable charges, income, and gains/losses that management believes are not indicative of core operating performance[89][90] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | FFO attributable to common shareholders | $22,959 | $92,108 | $(69,149) | -75.1% | | Operating FFO attributable to common shareholders | $16,629 | $115,684 | $(99,055) | -85.6% | - The decrease in FFO and Operating FFO was primarily attributable to lower Net Operating Income (NOI) resulting from property dispositions and the spin-off of Curbline Properties, as well as lower interest income[96] LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES This section discusses the company's cash flow, debt, and capital management strategies, including asset sales and dividend policies. - The Company's primary capital sources include cash flow from operations, debt financings, and proceeds from asset sales[100] - As of June 30, 2025, consolidated indebtedness was $292.0 million, comprising the Mortgage Facility ($193.0 million) and a mortgage loan on Nassau Park Pavilion ($99.0 million)[101] - Subsequent to quarter-end, as of August 5, 2025, the Mortgage Facility's outstanding principal balance decreased to $152.6 million, secured by 10 assets, due to asset sales and related loan repayments[101] - Unconsolidated joint ventures had $441.2 million of indebtedness ($106.3 million at SITE's share) at June 30, 2025[101] - At June 30, 2025, the Company had an unrestricted cash balance of $153.8 million, with approximately $79.1 million used in July 2025 to pay a special cash dividend[103] - The Company anticipates approximately $30.9 million to be incurred to complete redevelopment projects at properties owned by Curbline[103] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (Absolute) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :---------------- | :--------- | | Cash flow provided by operating activities | $22,933 | $106,443 | $(83,510) | -78.5% | | Cash flow provided by investing activities | $86,838 | $726,007 | $(639,169) | -88.0% | | Cash flow used for financing activities | $(14,915) | $(215,903) | $200,988 | -93.1% | - Cash provided by operating activities decreased $83.5 million primarily due to changes in working capital from disposition activity and a decrease in interest income[106] - Cash provided by investing activities decreased $639.2 million, mainly due to a $116.6 million decrease in real estate assets acquired, developed, and improved, and a $755.5 million decrease in proceeds from disposition of real estate[107][114] - Cash used for financing activities decreased $201.0 million, primarily due to a $104.6 million decrease in repayment of unsecured senior notes, mortgage debt, and loan commitment fees, and a $93.9 million decrease in dividends paid[107][114] - On August 1, 2025, the Company declared a special cash dividend of $3.25 per common share (estimated $171.3 million in aggregate)[108] - The Company does not expect to make regular quarterly dividend payments, intending to retain sufficient free cash flow to support capital needs while adhering to REIT payout requirements[109] - Through June 30, 2025, the Company repurchased 0.5 million common shares for $26.6 million under its $100 million repurchase program[110] SOURCES AND USES OF CAPITAL This section outlines the company's capital sources and how funds are allocated for debt repayment, property sales, and redevelopment projects. - The Company is committed to maintaining liquidity, managing debt duration, and prudent leverage levels, with debt financings, asset sales, and cash flow from operations as key capital sources[112] - The Company is in various stages of marketing or contract negotiations for the sale of several properties, with proceeds generally expected to repay outstanding indebtedness and make distributions to shareholders[113][115] | Date Sold | Property Name | City, State | Total Owned GLA (thousands sq ft) | Gross Sales Price (thousands) | | :-------- | :-------------------------- | :-------------------------- | :-------------------------------- | :---------------------------- | | June 2025 | The Promenade at Brentwood | Brentwood, MO | 338 | $71,600 | | June 2025 | Chapel Hills West | Colorado Springs, CO | 225 | $23,650 | | July 2025 | Sandy Plain Village | Roswell, GA | 174 | $25,000 | | August 2025 | Deer Valley Towne Center | Phoenix, AZ | 152 | $33,725 | | August 2025 | Winter Garden Village | Winter Garden, FL | 629 | $165,000 | | Total | | | 1,518 | $318,975 | - As of June 30, 2025, the Company had approximately $2.7 million in construction in progress for re-tenanting projects at Company-owned properties[117] - The estimated cost to complete redevelopment projects at properties owned by Curbline was approximately $30.9 million as of June 30, 2025[117] CAPITALIZATION This section details the company's capital structure, including debt and equity, and the impact of recent financial actions. - At June 30, 2025, the Company's capitalization consisted of $292.0 million of debt and $593.2 million of market equity[119] - A one-for-four reverse stock split of common shares was announced in July 2024, with split-adjusted trading beginning on August 19, 2024[120] - The Company no longer maintains a revolving line of credit or an investment grade rating after repaying all outstanding unsecured indebtedness using proceeds from the Mortgage Facility and asset sales[121] - The Mortgage Facility contains operating and financial covenants, including net worth and liquidity requirements, which could restrict access to rent collections or accelerate maturities if violated[122] CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS This section summarizes the company's future financial obligations, including debt maturities and construction commitments. - The Company has no consolidated debt maturing in 2025 and expects to fund future maturities from cash on hand, asset sales, cash flow from operations, and/or additional debt financings[124] - As of June 30, 2025, commitments with general contractors for re-tenanting vacancies aggregated approximately $2.0 million, generally due within 12 to 24 months[125] - A liability of approximately $2.4 million was recorded as of June 30, 2025, for guaranteed additional construction costs and deferred maintenance related to two properties sold in 2024[126] - The estimated cost to complete redevelopment projects at properties owned by Curbline, as per the Separation and Distribution Agreement, was $30.9 million as of June 30, 2025[127] - Purchase order obligations for property maintenance and general and administrative expenses aggregated approximately $0.5 million at June 30, 2025, typically payable within one year[128] ECONOMIC CONDITIONS This section assesses the impact of broader economic trends on the company's retail properties, tenant demand, and market outlook. - The Company continues to experience steady retailer demand, attributed to properties in suburban, high household income communities, population growth, remote work trends, limited new retail construction, and tenants' increasing use of physical stores for merchandise distribution[130] - The Company benefits from a diversified tenant base, with only six tenants accounting for 3% or more of annualized base rent, and a majority of tenants focusing on day-to-day consumer necessities[131] - At June 30, 2025, shopping center portfolio occupancy was 87.5% (down from 90.6% at December 31, 2024), and average annualized base rent was $19.83 per square foot (up from $19.64 at December 31, 2024)[132] - The weighted-average cost of tenant improvements and lease commissions for new leases executed during the six months ended June 30, 2025, was $3.57 per rentable square foot, a decrease from $9.46 in the prior year[132] - Macroeconomic challenges include increasing inflation and interest rates, tariff uncertainty, consumer confidence concerns, and global capital market volatility, posing risks to the U.S. economy and retail sector[133] - Despite challenges, the Company believes its prospects to backfill vacant spaces are generally good, particularly with value and convenience retailers expanding in its target communities[133] FORWARD-LOOKING STATEMENTS This section provides cautionary language regarding future expectations and potential risks that could cause actual results to differ. - This section contains forward-looking statements regarding future expectations, including dispositions, capital expenditures, financing sources, and regulatory effects[135] - Readers are cautioned that actual results may differ materially from expectations due to known and unknown risks, uncertainties, and other factors beyond the Company's control[136] - Key risk factors include general real estate industry risks, local market changes, shifts in consumer buying practices (e.g., e-commerce), competition, tenant bankruptcies, illiquidity of real estate investments, and challenges in redevelopment projects[137] - Other risks include debt service payments, default risk, restrictions on debt, interest rate changes, financing availability, financial market disruptions, inflationary pressures, REIT compliance, joint venture risks, potential impairment losses, litigation, natural disasters, environmental liabilities, ADA compliance, and cybersecurity threats[137][138][139] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section details the Company's primary market risk exposure, which is interest rate risk, providing a breakdown of fixed-rate and variable-rate debt for both consolidated operations and unconsolidated joint ventures. - The Company's primary market risk exposure is interest rate risk[140] | Debt Type | June 30, 2025 Amount (Millions) | June 30, 2025 Avg. Maturity (Years) | June 30, 2025 Interest Rate | June 30, 2025 % of Total | Dec 31, 2024 Amount (Millions) | Dec 31, 2024 Avg. Maturity (Years) | Dec 31, 2024 Interest Rate | Dec 31, 2024 % of Total | | :---------------- | :------------------------------ | :---------------------------------- | :-------------------------- | :----------------------- | :----------------------------- | :--------------------------------- | :------------------------- | :---------------------- | | Fixed-Rate Debt | $97.8 | 3.3 | 6.7% | 33.9% | $98.5 | 3.8 | 6.7% | 32.7% | | Variable-Rate Debt | $190.6 | 1.2 | 7.1% | 66.1% | $202.9 | 1.7 | 7.1% | 67.3% | - A 100 basis-point increase in short-term market interest rates on variable-rate debt at June 30, 2025, would result in an increase in interest expense of approximately $1.0 million for the Company for the six months ended June 30, 2025[140] - The Company's fixed-rate debt carrying value was $97.8 million at June 30, 2025, with a fair value of $102.6 million. A hypothetical 100 basis-point increase in market interest rates would reduce its fair value to $99.8 million[142] Item 4. Controls and Procedures This section confirms that the Company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, and concluded they were effective. - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[144] - There were no changes in the Company's internal control over financial reporting that materially affected or are reasonably likely to materially affect it during the three months ended June 30, 2025[145] PART II. OTHER INFORMATION This part includes legal proceedings, risk factors, equity sales, defaults, and other required disclosures. Item 1. Legal Proceedings The Company and its subsidiaries are involved in various legal proceedings, but management believes these, taken together, are not expected to have a material adverse effect on the Company's liquidity, financial position, or results of operations. - Management believes that the final outcome of current legal proceedings and claims will not have a material adverse effect on the Company's liquidity, financial position, or results of operations[148] Item 1A. Risk Factors This section states that there are no new material changes to risk factors from the Company's Annual Report on Form 10-K for the year ended December 31, 2024. - No new material risk factors are reported for the current period[149] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the Company's common share repurchase program. As of June 30, 2025, the Company had repurchased 0.5 million common shares for $26.6 million under a $100 million authorized program, with $73.4 million remaining for repurchase. | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (Millions) | | :----- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------- | | Total | — | $— | — | $73.4 | - As of June 30, 2025, the Company had repurchased 0.5 million common shares for an aggregate cost of $26.6 million under its $100.0 million common share repurchase program[151] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities. - No defaults upon senior securities were reported[152] Item 4. Mine Safety Disclosures This item is not applicable to the Company. - This item is not applicable to the Company[153] Item 5. Other Information This section states that there is no other information to report. - No other information to report[154] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including financial statements in iXBRL format and various certifications and agreements. - Exhibit 101 includes Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Equity, Cash Flows, and Notes to Condensed Consolidated Financial Statements in iXBRL format[156] - Certifications from the principal executive and financial officers (Exhibits 31.1, 31.2, 32.1, 32.2) are included[157] SIGNATURES This section contains the official signatures certifying the accuracy of the report. - The report was signed by Jeffrey A. Scott, Senior Vice President and Chief Accounting Officer, on August 5, 2025[160]