RPT(US:RPT)2023-11-02 20:38Property Portfolio and Leasing - As of September 30, 2023, the company's property portfolio consisted of 43 wholly-owned shopping centers, 13 shopping centers owned through a grocery-anchored joint venture, and 49 retail properties owned through a net lease joint venture, totaling 14.9 million square feet of GLA, with a pro-rata share of 93.5% leased[120]. - The company derives 96.7% of its multi-tenant retail annualized base rent from the top 40 national markets, including cities like Boston, Atlanta, Detroit, and Nashville[127]. - Approximately 66% of existing leases are triple net leases, allowing the company to recover operating expenses, with 97% of leases expected to recover increases in operating expenses during inflationary periods[130]. - The company has long-term lease agreements with 7% - 12% of leases expiring each year over the next three years, allowing for potential rent resets to market rates[133]. - As of September 30, 2023, the total Gross Leasable Area (GLA) for multi-tenant retail properties was 13,295,402 square feet, with an overall leased percentage of 93.4% and an occupied percentage of 88.6%[136]. - The company reported 229 leasing transactions during the nine months ended September 30, 2023, totaling 1,781,230 square feet, with a base rent of $17.32 per square foot[137]. Financial Performance - Total revenue for the three months ended September 30, 2023 was $54.7 million, a slight increase of $0.2 million or 0.3% compared to the same period in 2022[152]. - Total revenue for the nine months ended September 30, 2023 decreased by $7.9 million or 4.8% compared to the same period in 2022[166]. - Funds from operations (FFO) available to common shareholders for the three months ended September 30, 2023, was $16.6 million, compared to $24.1 million for the same period in 2022[214]. - Operating FFO available to common shareholders for the nine months ended September 30, 2023, was $65.9 million, down from $74.6 million in 2022[214]. - The company reported a net loss attributable to common shareholders for the three months ended September 30, 2023, was $7.9 million, compared to a net income of $11.3 million in 2022[214]. - The company reported a net loss available to common shareholders of $7.858 million for Q3 2023, compared to a net income of $11.299 million in Q3 2022[218]. Debt and Capital Structure - As of September 30, 2023, the company had net debt of $898.5 million, representing a net debt to total market capitalization ratio of 46.4%, down from 57.5% a year earlier[139]. - The company had $852.2 million in total debt outstanding as of September 30, 2023, which includes $511.5 million in senior unsecured notes and $310.0 million in unsecured term loan facilities[190]. - The company maintains a strong, flexible, and investment-grade balance sheet, with only 3% of total debt being variable-rate borrowings as of September 30, 2023[132]. - The company has $472.0 million of unused capacity under its $500.0 million unsecured revolving credit facility as of September 30, 2023[179]. - The company anticipates using net proceeds from property sales to reduce outstanding debt and support growth initiatives, subject to restrictions in the Merger Agreement[181]. Merger and Strategic Initiatives - The proposed merger with Kimco is expected to close in early 2024, subject to shareholder approval and customary closing conditions[126]. - Each common share of RPT will be converted into the right to receive 0.6049 shares of common stock of Kimco upon the merger[123]. - The company aims to capitalize on accretive acquisition opportunities and maintain a disciplined capital recycling strategy to enhance shareholder value[129]. - The company intends to pursue growth through strategic acquisitions and redevelopment of existing properties, while selectively disposing of maximized return properties[197]. Operating Expenses and Cost Management - Inflation has significantly increased operating expenses, but long-term leases with contractual rent escalations help mitigate some adverse impacts[130]. - Non-recoverable operating expense increased by $0.2 million or 5.5% for the three months ended September 30, 2023, mainly due to increased legal fees associated with tenant bankruptcies[155]. - General and administrative expense increased by $0.3 million or 3.2% for the three months ended September 30, 2023, mainly due to higher bonus and stock-based compensation expenses[158]. - Recoverable operating expense increased by $0.9 million or 4.1% for the nine months ended September 30, 2023, primarily due to higher common area maintenance expenses[167]. - Non-recoverable operating expense increased by $0.6 million or 7.6% for the nine months ended September 30, 2023, mainly due to increased property-related employee compensation[168]. Cash Flow and Investments - The company reported net cash provided by operating activities of $71.9 million for the nine months ended September 30, 2023, a decrease of $9.4 million compared to $81.3 million in 2022[183][184]. - Net cash used in investing activities decreased significantly by $110.2 million, totaling $(23.2) million for the nine months ended September 30, 2023, compared to $(133.5) million in 2022[183][184]. - The company recorded merger costs of $8.2 million for the three and nine months ended September 30, 2023, related to financial, legal, and tax advisory services[185]. Market and Economic Conditions - The company continues to face risks related to obtaining necessary governmental approvals and potential impairments for development projects[142]. - A 100 basis point increase in interest rates would decrease the fair value of the company's total outstanding debt by approximately $17.3 million as of September 30, 2023[219]. - The company’s fixed-rate debt totaled $824.173 million, with a weighted average interest rate of 3.7%[220]. Occupancy and NOI - Same Property NOI for Q3 2023 was $37.271 million, a 2.6% increase from $36.340 million in Q3 2022[218]. - Total NOI for Q3 2023 was $40.228 million, compared to $41.342 million in Q3 2022, reflecting a decrease of 2.7%[218]. - The period-end occupancy rate for Q3 2023 was 89.9%, slightly down from 90.1% in Q3 2022[218].