SITE Centers (US:SITC)2022-07-28 20:15Financial Performance - For the six months ended June 30, 2022, net income attributable to common shareholders was $68.7 million, a significant increase from $24.6 million in the same period of 2021, driven by higher gains on sales and base rent growth [63]. - Total revenues for the six months ended June 30, 2022, were $275.0 million, an increase of $11.4 million compared to $263.6 million in the same period of 2021 [71]. - For the three months ended June 30, 2022, net income attributable to SITE Centers was $60,390,000, an increase of $38,521,000 compared to $21,869,000 in 2021 [80]. - FFO attributable to common shareholders for the six months ended June 30, 2022, was $127,092, an increase of $17,086 compared to $110,006 in the prior year [91]. - Operating FFO attributable to common shareholders for the same period was $128,011, up by $7,455 from $120,556 in 2021 [92]. - The increase in FFO was primarily driven by higher operating results from base rent growth and lower general and administrative expenses [91]. - Consolidated NOI for the six months ended June 30, 2022, was $183,163, compared to $167,864 in 2021, reflecting improved operational performance [99]. - Total SSNOI for the six months ended June 30, 2022, was $187,442, showing a slight increase of 0.1% compared to $187,299 in the prior year [99]. Leasing Activity - The Company completed 358 leases, including 132 new leases and 226 renewals, during the six months ended June 30, 2022, with positive leasing spreads of 23.7% for new leases and 5.1% for renewals [69]. - The average annualized base rent per occupied square foot increased to $18.86 as of June 30, 2022, compared to $18.39 a year earlier, reflecting the impact of acquisitions and new leases [63]. - The Company executed new leases and renewals totaling approximately 2.1 million square feet for the six months ended June 30, 2022, which is higher than pre-pandemic leasing volumes [141]. - The shopping center portfolio occupancy was 90.9% as of June 30, 2022, compared to 90.0% at December 31, 2021 [143]. Acquisitions and Sales - The Company acquired nine shopping centers for a total purchase price of $269.7 million during the year-to-date period ending July 22, 2022 [67]. - The Company sold its 20% interest in the SAU Joint Venture and its 50% interest in Lennox Town Center for a gross asset value of $155.7 million and $77.0 million, respectively [69]. - The Company recorded a $3.3 million gain from the acquisition of an 80% equity interest in Casselberry Commons in 2022 [79]. - The DDRM Joint Venture sold 13 shopping centers for an aggregate sales price of $387.6 million, with the related mortgage debt of $225 million repaid upon closing [128]. Debt and Financing - The Company had total consolidated debt outstanding of $1.9 billion as of June 30, 2022, an increase from $1.7 billion at the end of 2021 [103]. - The Company amended its $950 million revolving credit facility to extend the maturity date to June 2026 and drew an additional $100 million on its term loan facility, bringing total borrowings to $200 million as of June 30, 2022 [69]. - The Company has a total fixed-rate debt of $1,543 million with a weighted average interest rate of 4.1% and a maturity of 5 years as of June 30, 2022 [152]. - The Company holds variable-rate debt amounting to $323.4 million, which represents 17.3% of its total debt, with a weighted average interest rate of 2.3% [152]. - The Company intends to use retained cash flow, asset sales, and financing to manage its debt and fund capital expenditures at its shopping centers [152]. Cash Flow and Expenses - Cash flow provided by operating activities decreased by $12.6 million to $132.1 million for the six months ended June 30, 2022, compared to $144.8 million in 2021 [115]. - Cash used for investing activities increased by $257.4 million to $289.0 million, primarily due to increased real estate asset acquisitions of $288.3 million [115]. - Total expenses from operations for the six months ended June 30, 2022, were $212,546,000, a slight increase of $3,842,000 from $208,704,000 in 2021 [75]. - Interest expense for the six months ended June 30, 2022, was $37,167,000, down from $38,531,000 in 2021, reflecting a decrease of $1,364,000 [76]. COVID-19 Impact - The Company continues to monitor the impact of the COVID-19 pandemic, with collection rates improving and a substantial majority of tenants paying their monthly rent [65]. - The Company reported uncollectible revenue of $2.3 million for the six months ended June 30, 2022, down from $7.2 million in the same period of 2021 [99]. Redevelopment Projects - The Company anticipates approximately $30 million to be incurred on its pipeline of identified redevelopment projects [105]. - As of June 30, 2022, the Company had approximately $63 million in construction in progress for various redevelopment projects [131]. - The Company's large-scale shopping center expansion projects include West Bay Plaza - Phase II with an estimated gross cost of $9,102,000, and incurred costs of $6,360,000 as of June 30, 2022 [131]. - Redevelopment projects completed in 2022 were finished at a cost of approximately $159 per square foot [131]. Risk Factors - The Company is subject to risks related to tenant bankruptcies, which could adversely affect its financial condition and rental revenues [150]. - The Company may face challenges in completing development projects on schedule due to factors beyond its control, such as weather and labor conditions [150]. - The Company’s financial condition may be impacted by required debt service payments and potential downgrades from debt rating services [150]. - The Company is exposed to interest rate risk, particularly with its variable-rate debt, which could increase in a rising interest rate environment [152]. - A 100 basis-point increase in market interest rates would result in an estimated increase in interest expense of approximately $1.6 million for the Company for the six months ended June 30, 2022 [154].