SITE Centers (US:SITC)2022-04-28 20:18markdown [PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements – Unaudited](index=2&type=section&id=Item%201.%20Financial%20Statements%20%E2%80%93%20Unaudited) This section presents the unaudited condensed consolidated financial statements of SITE Centers Corp. for the three months ended March 31, 2022 and 2021, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with explanatory notes detailing the company's business, revenue recognition, joint ventures, acquisitions, debt, equity, and subsequent events [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Total real estate assets, net | $3,779,333 | $3,667,312 | | Total Assets | $4,051,481 | $3,967,051 | | Total Indebtedness | $1,758,329 | $1,677,377 | | Total Liabilities | $1,995,363 | $1,924,399 | | Total Equity | $2,056,118 | $2,042,652 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues from operations | $134,320 | $128,139 | | Rental income | $129,884 | $119,890 | | Fee and other income | $4,436 | $8,249 | | Total rental operation expenses | $104,734 | $110,105 | | Net income | $13,955 | $16,181 | | Net income attributable to common shareholders | $11,148 | $10,875 | | Basic EPS | $0.05 | $0.05 | | Diluted EPS | $0.05 | $0.05 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income | $13,955 | $16,181 | | Total other comprehensive income | $0 | $2,682 | | Comprehensive income | $13,955 | $18,863 | | Total comprehensive income attributable to SITE Centers | $13,937 | $18,690 | [Consolidated Statements of Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Equity) | Metric | Balance, December 31, 2021 (in thousands) | Balance, March 31, 2022 (in thousands) | | :--------------------------------- | :------------------------------------ | :----------------------------------- | | Total SITE Centers shareholders' equity | $2,042,652 | $2,056,118 | | Issuance of common shares for cash offering | N/A | $33,781 | | Dividends declared-common shares | N/A | $(27,905) | | Dividends declared-preferred shares | N/A | $(2,789) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash flow provided by operating activities | $50,021 | $56,110 | | Net cash flow (used for) provided by investing activities | $(154,504) | $10,539 | | Net cash flow provided by financing activities | $80,445 | $52,639 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(24,038) | $119,288 | | Cash, cash equivalents and restricted cash, end of period | $19,214 | $193,701 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Nature of Business and Financial Statement Presentation](index=8&type=section&id=1.%20Nature%20of%20Business%20and%20Financial%20Statement%20Presentation) SITE Centers Corp. is a REIT primarily engaged in acquiring, owning, developing, leasing, and managing shopping centers, with a tenant base concentrated in the retail industry. The financial statements are prepared in accordance with GAAP, using estimates that consider the impact of COVID-19, and are condensed interim statements - SITE Centers Corp. is a self-administered and self-managed Real Estate Investment Trust (REIT) focused on acquiring, owning, developing, redeveloping, leasing, and managing shopping centers[23](index=23&type=chunk) - The Company's credit risk is concentrated in the retail industry, with a tenant base primarily consisting of national and regional retail chains and local tenants[23](index=23&type=chunk) - The financial statements are unaudited interim statements prepared in conformity with GAAP, with management making estimates and assumptions, including considering the impacts of COVID-19[24](index=24&type=chunk)[25](index=25&type=chunk) [2. Revenue Recognition](index=8&type=section&id=2.%20Revenue%20Recognition) The COVID-19 pandemic significantly impacted the retail sector, leading to rent deferrals and abatements in 2020. By March 31, 2022, most deferral arrangements were repaid. The company recorded $1.1 million in net uncollectible revenue for Q1 2022, primarily from cash-basis tenants. Fee and other income decreased significantly from $8.2 million in Q1 2021 to $4.4 million in Q1 2022, mainly due to lower fees from Retail Value Inc. (RVI) asset sales - The COVID-19 pandemic significantly impacted the retail sector, leading to rent deferral arrangements and, in some cases, rent abatements, primarily in 2020[28](index=28&type=chunk)[29](index=29&type=chunk) - As of March 31, 2022, the majority of rent deferral arrangements for tenants not on a cash basis have been repaid[29](index=29&type=chunk) | Revenue Type | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue from contracts with customers | $2,715 | $2,953 | | Other property income | $1,523 | $544 | | Revenue from contracts with RVI | $198 | $4,752 | | Total fee and other income | $4,436 | $8,249 | [3. Investments in and Advances to Joint Ventures](index=10&type=section&id=3.%20Investments%20in%20and%20Advances%20to%20Joint%20Ventures) The Company held interests in 46 unconsolidated joint venture shopping centers as of March 31, 2022, down from 47 at December 31, 2021. The Company's share of equity in net income from joint ventures decreased significantly from $4.385 million in Q1 2021 to $0.169 million in Q1 2022, primarily due to a gain on sale of undeveloped land recognized in 2021. In February 2022, the Company acquired its partner's 80% interest in Casselberry Commons for $35.6 million, resulting in a $3.3 million gain on change in control - At March 31, 2022, the Company had ownership interests in **46 unconsolidated joint ventures**, down from **47** at December 31, 2021[33](index=33&type=chunk) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net (loss) income attributable to unconsolidated joint ventures | $(1,378) | $33,516 | | Company's share of equity in net income of joint ventures | $30 | $4,323 | | Equity in net income of joint ventures | $169 | $4,385 | - In February 2022, the Company acquired its partner's **80% interest** in Casselberry Commons for **$35.6 million**, leading to a **$3.3 million Gain on Change in Control of Interests**[35](index=35&type=chunk) [4. Acquisitions](index=11&type=section&id=4.%20Acquisitions) During Q1 2022, the Company acquired three shopping centers: Artesia Village ($14.5 million), Casselberry Commons ($35.6 million for 80% interest), and Shops at Boca Center ($90.0 million), totaling $140.1 million in purchase price. These acquisitions contributed $0.7 million in total revenues from their acquisition dates through March 31, 2022 | Asset | Location | Date Acquired | Purchase Price (in millions) | | :-------------------- | :-------------------- | :------------ | :--------------------------- | | Artesia Village | Scottsdale, Arizona | January 2022 | $14.5 | | Casselberry Commons | Casselberry, Florida | February 2022 | $35.6 | | Shops at Boca Center | Boca Raton, Florida | March 2022 | $90.0 | - Total consideration for these acquisitions was **$141.954 million**, funded by **$133.463 million** in cash, a **$3.319 million** gain on change in control of interest, and **$5.172 million** carrying value of previously held common equity interest[38](index=38&type=chunk) - The three acquired properties generated **$0.7 million** in total revenues from their acquisition dates through March 31, 2022[38](index=38&type=chunk) [5. Other Assets and Intangibles, net](index=12&type=section&id=5.%20Other%20Assets%20and%20Intangibles%2C%20net) The Company's total intangible assets, net, increased to $101.768 million at March 31, 2022, from $94.059 million at December 31, 2021. This includes increases in in-place leases, above-market leases, and lease origination costs, while tenant relationships slightly decreased. Amortization expense for intangibles (excluding above- and below-market leases) was $6.6 million for Q1 2022, up from $5.6 million in Q1 2021 | Intangible Asset | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | In-place leases, net | $71,973 | $64,464 | | Above-market leases, net | $7,759 | $7,390 | | Lease origination costs, net | $7,543 | $6,636 | | Tenant relationships, net | $14,493 | $15,569 | | Total intangible assets, net | $101,768 | $94,059 | - Amortization expense related to intangibles (excluding above- and below-market leases) was **$6.6 million** for the three months ended March 31, 2022, compared to **$5.6 million** for the same period in 2021[39](index=39&type=chunk) [6. Revolving Credit Facilities](index=12&type=section&id=6.%20Revolving%20Credit%20Facilities) The Company maintains an Unsecured Credit Facility of up to $950 million (expandable to $1.45 billion) maturing in January 2024, with two six-month extension options, and a $20 million PNC Facility. Borrowings bear variable interest rates (LIBOR plus 0.90% or Alternative Base Rate plus 0% at March 31, 2022). The Company was in compliance with all financial covenants as of March 31, 2022 - The Company has an Unsecured Credit Facility of up to **$950 million** (with an accordion feature up to **$1.45 billion**) and a **$20 million PNC Facility**, both maturing in January 2024 with extension options[40](index=40&type=chunk)[41](index=41&type=chunk) - Borrowings under these facilities bear variable interest rates, either LIBOR plus a specified spread (**0.90%** at March 31, 2022) or the Alternative Base Rate plus a specified spread (**0%** at March 31, 2022)[42](index=42&type=chunk) - The Company was in compliance with all financial covenants under its Revolving Credit Facilities at March 31, 2022[42](index=42&type=chunk) [7. Fair Value Measurements](index=12&type=section&id=7.%20Fair%20Value%20Measurements) The fair value of the Company's senior notes is determined using a pricing model, while other debt uses a discounted cash flow technique. As of March 31, 2022, the fair value of total indebtedness was $1,785.420 million, slightly higher than its carrying amount of $1,758.329 million - Fair value of senior notes is determined using a pricing model, while other debt uses a discounted cash flow technique incorporating future contractual payments and market interest yield curves[43](index=43&type=chunk)[44](index=44&type=chunk) | Debt Type | March 31, 2022 Carrying Amount (in thousands) | March 31, 2022 Fair Value (in thousands) | December 31, 2021 Carrying Amount (in thousands) | December 31, 2021 Fair Value (in thousands) | | :--------------------------------- | :------------------------------------------ | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Senior Notes | $1,452,307 | $1,479,881 | $1,451,768 | $1,559,973 | | Revolving Credit Facilities and Term Loan | $214,854 | $215,000 | $99,810 | $100,000 | | Mortgage Indebtedness | $91,168 | $90,539 | $125,799 | $127,488 | | Total | $1,758,329 | $1,785,420 | $1,677,377 | $1,787,461 | [8. Equity](index=13&type=section&id=8.%20Equity) The Company declared a common share dividend of $0.13 per share for Q1 2022, an increase from $0.11 per share in Q1 2021. On March 1, 2022, the Company settled 2.2 million common shares from its continuous equity program, generating gross proceeds of $35.1 million | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Common share dividends declared per share | $0.13 | $0.11 | - On March 1, 2022, the Company settled **2.2 million common shares** from its 2021 forward equity offering, resulting in gross proceeds of **$35.1 million**[48](index=48&type=chunk) [9. Earnings Per Share](index=13&type=section&id=9.%20Earnings%20Per%20Share) Basic and diluted EPS remained constant at $0.05 for both Q1 2022 and Q1 2021. Net income attributable to common shareholders after allocation to participating securities was $11.022 million in Q1 2022, compared to $10.760 million in Q1 2021. The average shares outstanding for diluted EPS increased to 213.203 million in Q1 2022 from 199.445 million in Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands, except per share) | Three Months Ended March 31, 2021 (in thousands, except per share) | | :--------------------------------- | :----------------------------------------------------------------- | :----------------------------------------------------------------- | | Net income attributable to common shareholders after allocation to participating securities | $11,022 | $10,760 | | Basic—Average shares outstanding | 212,103 | 198,534 | | Diluted—Average shares outstanding | 213,203 | 199,445 | | Basic EPS | $0.05 | $0.05 | | Diluted EPS | $0.05 | $0.05 | [10. Subsequent Events](index=14&type=section&id=10.%20Subsequent%20Events) In April 2022, the Company acquired Shoppes of Crabapple for $4.4 million and sold its 20% interest in the SAU Joint Venture for a gross asset value of $155.7 million - In April 2022, the Company acquired Shoppes of Crabapple (Alpharetta, Georgia) for **$4.4 million**[53](index=53&type=chunk) - In April 2022, the Company sold its **20% interest** in the SAU Joint Venture to its partner, the State of Utah, based on a gross asset value of **$155.7 million** (at 100%)[53](index=53&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity for the three months ended March 31, 2022. It highlights key financial metrics, operational activities, non-GAAP measures like FFO and NOI, and discusses the Company's capital resources, financing activities, and the economic conditions impacting its business, including the lingering effects of COVID-19 and new risks like inflation [EXECUTIVE SUMMARY](index=15&type=section&id=EXECUTIVE%20SUMMARY) SITE Centers Corp. is a REIT with a portfolio of 138 shopping centers (including JVs) and 32.1 million square feet of GLA as of March 31, 2022. The Company reported increased net income attributable to common shareholders, FFO, and Operating FFO for Q1 2022, driven by revenue growth and acquisitions. Collection rates have improved to near pre-pandemic levels, and the Company focuses on rental rate increases, lease-up, and strategic acquisitions/redevelopment for growth - As of March 31, 2022, the Company's portfolio consisted of **138 shopping centers** (including **46** through unconsolidated joint ventures), owning approximately **32.1 million square feet** of gross leasable area (GLA)[57](index=57&type=chunk) | Metric | Three Months Ended March 31, 2022 (in thousands, except per share) | Three Months Ended March 31, 2021 (in thousands, except per share) | | :--------------------------------- | :----------------------------------------------------------------- | :----------------------------------------------------------------- | | Net income attributable to common shareholders | $11,148 | $10,875 | | FFO attributable to common shareholders | $61,226 | $49,511 | | Operating FFO attributable to common shareholders | $61,558 | $55,302 | | Earnings per share – Diluted | $0.05 | $0.05 | - The increase in net income was primarily due to operating results from revenue growth at existing assets, property acquisitions, and lower impairment charges, partially offset by lower fee income from RVI and lower gain on change in control of interests[58](index=58&type=chunk) - Collection rates improved to near pre-pandemic levels by year-end 2021, with a substantial majority of tenants paying monthly and repaying deferred rents[60](index=60&type=chunk) [RESULTS OF OPERATIONS](index=16&type=section&id=RESULTS%20OF%20OPERATIONS) The Company's operational highlights for Q1 2022 include acquiring three shopping centers for $140.1 million, settling 2.2 million common shares for $35.1 million, and leasing 1.1 million square feet of GLA with positive leasing spreads. Total revenues increased by $6.181 million to $134.320 million, driven by a $9.994 million increase in rental income, partially offset by a $3.813 million decrease in fee and other income. Operating expenses decreased by $5.371 million, mainly due to lower impairment charges and general and administrative expenses. Net income attributable to SITE Centers decreased by $2.071 million to $13.937 million, primarily due to lower fee income and reduced gain on change in control of interests - Acquired two shopping centers (Artesia Village and Shops at Boca Center) for **$104.5 million** and a joint venture partner's interest in Casselberry Commons for **$35.6 million**[63](index=63&type=chunk) - Leased approximately **1.1 million square feet** of GLA, including **71 new leases** and **109 renewals**, generating positive leasing spreads of **15.4%** for new leases and **5.6%** for renewals[63](index=63&type=chunk) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | $ Change | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------- | | Rental income | $129,884 | $119,890 | $9,994 | | Fee and other income | $4,436 | $8,249 | $(3,813) | | Total revenues | $134,320 | $128,139 | $6,181 | | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | $ Change | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------- | | Operating and maintenance | $21,936 | $20,216 | $1,720 | | Real estate taxes | $20,183 | $19,664 | $519 | | Impairment charges | $0 | $7,270 | $(7,270) | | General and administrative | $12,251 | $17,395 | $(5,144) | | Depreciation and amortization | $50,364 | $45,560 | $4,804 | | Total expenses from operations | $104,734 | $110,105 | $(5,371) | - Net income attributable to SITE Centers decreased by **$2.071 million** to **$13.937 million**, primarily due to lower fee income from RVI and reduced gain on change in control of interests, partially offset by revenue growth and lower impairment charges[73](index=73&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=19&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) The Company utilizes non-GAAP financial measures, Funds from Operations (FFO) and Operating FFO, to assess financial performance and core operations, excluding real estate depreciation, property dispositions, and certain non-comparable charges. FFO attributable to common shareholders increased by $11.715 million to $61.226 million in Q1 2022, and Operating FFO increased by $6.256 million to $61.558 million, driven by positive operating results and property acquisitions. Same Store Net Operating Income (SSNOI) at the Company's effective ownership interest increased by 2.9% for Q1 2022, primarily due to higher occupancy and rent commencements - FFO and Operating FFO are non-GAAP measures used to assess financial performance, excluding GAAP historical cost depreciation and amortization of real estate, gains/losses from property dispositions, and certain non-cash items[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | $ Change | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------- | | FFO attributable to common shareholders | $61,226 | $49,511 | $11,715 | | Operating FFO attributable to common shareholders | $61,558 | $55,302 | $6,256 | - The increase in FFO was primarily attributable to operating results driven by revenue growth of existing assets and the impact of property acquisitions, partially offset by lower fee income and lower general and administrative expenses[85](index=85&type=chunk) - Same Store Net Operating Income (SSNOI) at the Company's effective ownership interest increased by **2.9%** for the three months ended March 31, 2022, compared to 2021, primarily due to increases in occupancy and related rent commencements[92](index=92&type=chunk) [LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES](index=22&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20FINANCING%20ACTIVITIES) The Company maintains a strategy of substantial liquidity, prudent leverage, and lengthy debt maturities, utilizing operating cash flow, credit facilities, equity offerings, and asset sales for financing. Total consolidated debt outstanding increased to $1.8 billion at March 31, 2022, from $1.7 billion at December 31, 2021, with $855.0 million available under its Revolving Credit Facilities. Cash flow from operating activities decreased by $6.1 million, while cash used for investing activities increased by $165.0 million, and cash provided by financing activities increased by $27.8 million. The Company declared a common share dividend of $0.13 per share for Q1 2022 and settled 2.2 million common shares for $35.1 million - The Company's strategy is to maintain substantial liquidity, prudent leverage levels, and lengthy average debt maturities, using retained cash flow, asset sales, equity offerings, and debt financings[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - Total consolidated debt outstanding was **$1.8 billion** at March 31, 2022, with **$855.0 million** available under its Revolving Credit Facilities[97](index=97&type=chunk)[98](index=98&type=chunk) - The Company has no remaining consolidated debt maturing in 2022, but **$87.2 million** in senior notes, **$100.0 million** in an unsecured term loan, and **$35.6 million** in consolidated mortgage debt mature in 2023[98](index=98&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Cash flow provided by operating activities | $50,021 | $56,110 | | Cash flow (used for) provided by investing activities | $(154,504) | $10,539 | | Cash flow provided by financing activities | $80,445 | $52,639 | - The Company declared common and preferred cash dividends of **$30.7 million** for Q1 2022, and a quarterly cash dividend of **$0.13 per common share**[108](index=108&type=chunk)[109](index=109&type=chunk) [SOURCES AND USES OF CAPITAL](index=25&type=section&id=SOURCES%20AND%20USES%20OF%20CAPITAL) The Company's capital strategy focuses on maintaining liquidity and managing debt through equity offerings, debt financings, asset sales, and cash flow. In Q1 2022, it settled 2.2 million common shares for $35.1 million, acquired Artesia Village ($14.5M), Shops at Boca Center ($90.0M), and a 80% interest in Casselberry Commons ($35.6M). Post-quarter, it acquired Shoppes of Crabapple ($4.4M) and sold its 20% interest in the SAU Joint Venture. The Company anticipates incurring approximately $32 million on identified redevelopment projects - On March 1, 2022, the Company settled **2.2 million common shares** from its 2021 forward equity program, generating gross proceeds of **$35.1 million**[114](index=114&type=chunk) - During Q1 2022, the Company acquired Artesia Village (**$14.5 million**), Shops at Boca Center (**$90.0 million**), and its partner's **80% equity interest** in Casselberry Commons (**$35.6 million**)[115](index=115&type=chunk) - In April 2022, the Company acquired Shoppes of Crabapple for **$4.4 million** and sold its **20% interest** in the SAU Joint Venture[116](index=116&type=chunk)[117](index=117&type=chunk) - The Company anticipates incurring approximately **$32 million** on its pipeline of identified redevelopment projects[119](index=119&type=chunk) [CAPITALIZATION](index=26&type=section&id=CAPITALIZATION) As of March 31, 2022, the Company's capitalization included $1.8 billion of debt, $175.0 million of preferred shares, and $3.6 billion of market equity, resulting in a debt to total market capitalization ratio of 0.33 to 1.0. The Company aims to maintain an investment-grade rating and operates with a conservative debt capitalization policy, adhering to financial and operating covenants in its credit facilities and indentures - At March 31, 2022, the Company's capitalization consisted of **$1.8 billion** of debt, **$175.0 million** of preferred shares, and **$3.6 billion** of market equity[122](index=122&type=chunk) - The debt to total market capitalization ratio was **0.33 to 1.0** at March 31, 2022, compared to **0.36 to 1.0** at March 31, 2021[122](index=122&type=chunk) - The Company's strategy is to maintain an investment-grade rating and operate with a conservative debt capitalization policy, complying with financial and operating covenants in its credit facilities and indentures[123](index=123&type=chunk)[124](index=124&type=chunk) [CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS](index=27&type=section&id=CONTRACTUAL%20OBLIGATIONS%20AND%20OTHER%20COMMITMENTS) The Company has no consolidated debt maturing in 2022. In 2023, $87.2 million in senior notes, $100.0 million in an unsecured term loan, and $35.6 million in consolidated mortgage debt will mature. Future maturities are expected to be funded through Revolving Credit Facilities, asset sales, operating cash flow, or additional financings. The Company also has $31.8 million in commitments with general contractors for redevelopment projects and $12.1 million in purchase order obligations for property maintenance and G&A - The Company has no remaining consolidated debt maturing in 2022[127](index=127&type=chunk) - In 2023, **$87.2 million** in senior notes, **$100.0 million** in an unsecured term loan, and **$35.6 million** in consolidated mortgage debt are maturing[127](index=127&type=chunk) - The Company has commitments with general contractors totaling approximately **$31.8 million** for consolidated properties and **$12.1 million** in purchase order obligations for property maintenance and general and administrative expenses[128](index=128&type=chunk)[129](index=129&type=chunk) [ECONOMIC CONDITIONS](index=27&type=section&id=ECONOMIC%20CONDITIONS) Despite COVID-19 and e-commerce, the Company sees strong retailer demand for its well-positioned shopping centers, evidenced by high leasing volumes and increased average annualized base rent. Its portfolio benefits from locations in high household income communities and a diversified tenant base focused on necessities. While COVID-19 disruptions have subsided, inflation, labor shortages, and supply chain issues pose new risks, potentially impacting consumer spending, retailer profitability, and operating costs, though the Company believes its portfolio and tenant base are resilient - The Company continues to experience strong retailer demand for quality locations, with leasing volumes higher than typical pre-pandemic levels[131](index=131&type=chunk) - The portfolio's aggregate occupancy rate was **90.2%** at March 31, 2022, and the average annualized base rent per occupied square foot was **$18.55**, both on a pro rata basis[133](index=133&type=chunk) - The Company's diversified tenant base, including major retailers like TJX Companies (**5.7% of annualized revenue**), Dick's Sporting Goods, Ross Stores, Burlington, and Five Below, provides a stable revenue base[132](index=132&type=chunk) - While COVID-19 rent collection disruptions have largely subsided, inflation, labor shortages, supply chain disruptions, and rising interest rates pose new risks to consumer spending, retailer profitability, and operating costs[137](index=137&type=chunk) [FORWARD-LOOKING STATEMENTS](index=28&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section serves as a cautionary statement regarding forward-looking statements within the report, emphasizing that actual results may differ materially from expectations due to known and unknown risks, uncertainties, and other factors beyond the Company's control. It references Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for a comprehensive list of potential factors, including general real estate risks, market conditions, tenant performance, competition, acquisition/disposition challenges, financing risks, interest rate changes, REIT compliance, joint venture risks, and the exacerbating impact of the COVID-19 pandemic - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[139](index=139&type=chunk) - Key risk factors include general real estate industry risks, local and national market conditions, changes in consumer buying practices, competition, dependence on major tenants, acquisition and disposition challenges, development project risks, debt service and financing risks, interest rate changes, REIT compliance, and joint venture risks[140](index=140&type=chunk) - The impact of the COVID-19 pandemic may also exacerbate the discussed risks, potentially having a material effect on the Company[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company's primary market risk is interest rate risk, with 87.8% of its consolidated debt being fixed-rate and 12.2% variable-rate at March 31, 2022. A hypothetical 100 basis-point increase in short-term market interest rates would increase interest expense by approximately $0.5 million for the Company and $0.1 million for its proportionate share of joint ventures' variable-rate debt for the three months ended March 31, 2022. The Company actively monitors and manages interest costs and has access to capital markets to mitigate this risk - The Company's primary market risk exposure is interest rate risk[142](index=142&type=chunk) | Debt Type | March 31, 2022 Amount (Millions) | March 31, 2022 Weighted Average Interest Rate | March 31, 2022 Percentage of Total | | :--------------------------------- | :------------------------------- | :------------------------------------ | :--------------------------------- | | Fixed-Rate Debt | $1,543.5 | 4.1% | 87.8% | | Variable-Rate Debt | $214.8 | 1.4% | 12.2% | - A **100 basis-point increase** in short-term market interest rates on variable-rate debt would result in an approximate **$0.5 million increase** in interest expense for the Company and **$0.1 million** for its proportionate share of joint ventures' interest expense for the three months ended March 31, 2022[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of March 31, 2022. There were no material changes in the Company's internal control over financial reporting during the three months ended March 31, 2022 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2022[145](index=145&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting during the three months ended March 31, 2022[146](index=146&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The Company and its subsidiaries are involved in various legal proceedings, which are not expected to have a material adverse effect on the Company's liquidity, financial position, or results of operations. Most personal injury or property damage claims are covered by insurance - The Company is subject to various legal proceedings, which are not expected to have a material adverse effect on its liquidity, financial position, or results of operations[149](index=149&type=chunk) - Most legal actions for personal injury or property damage arising in the ordinary course of business are covered by insurance[149](index=149&type=chunk) [Item 1A. Risk Factors](index=33&type=page&id=Item%201A.%20Risk%20Factors) There are no new material risk factors for the current reporting period. The Company refers readers to the comprehensive discussion of risk factors in its Annual Report on Form 10-K for the year ended December 31, 2021 - No new material risk factors are reported for the current period; readers are referred to the Annual Report on Form 10-K for a comprehensive list of risk factors[150](index=150&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended March 31, 2022, the Company purchased 341,483 common shares at an average price of $15.87 per share, primarily to satisfy tax withholding obligations related to equity-based compensation plans. The Company has a common share repurchase program authorized for up to $100 million, under which it had repurchased $57.9 million of shares through April 22, 2022, but no shares have been repurchased under this program since March 2020 | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------- | :------------------------------- | :--------------------------- | | January 1–31, 2022 | 134 | $15.83 | | February 1–28, 2022 | 76,040 | $15.48 | | March 1–31, 2022 | 265,309 | $15.99 | | Total | 341,483 | $15.87 | - These purchases were primarily common shares surrendered or deemed surrendered to satisfy statutory minimum tax withholding obligations related to equity-based compensation plans[153](index=153&type=chunk) - The Company has a **$100 million** common share repurchase program, under which **$57.9 million** of shares have been repurchased through April 22, 2022, but no shares have been repurchased since March 2020[154](index=154&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[155](index=155&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[156](index=156&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information is reported under this item[157](index=157&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including financial statements formatted in iXBRL and various certifications (CEO, CFO) - Exhibit 101 includes Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Equity, Cash Flows, and Notes to Condensed Consolidated Financial Statements, formatted in iXBRL[160](index=160&type=chunk) - Certifications from the principal executive officer and principal financial officer (Exhibits 31.1, 31.2, 32.1, 32.2) are submitted electronically[161](index=161&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) [SIGNATURES](index=35&type=section&id=SIGNATURES) The report is duly signed on behalf of SITE Centers Corp. by Christa A. Vesy, Executive Vice President and Chief Accounting Officer, on April 28, 2022 - The report was signed by Christa A. Vesy, Executive Vice President and Chief Accounting Officer, on April 28, 2022[164](index=164&type=chunk)