Financial Data and Key Metrics Changes - FFO and core FFO per share for Q3 2025 were both $0.35, down from $0.38 in Q3 2024 [12] - Total operating revenues for Q3 2025 were $40.8 million, compared to $39.2 million in Q3 2024, while operating expenses decreased from $28.5 million to $26 million [13][14] - Net assets increased from $1.21 billion to $1.265 billion due to portfolio acquisition [14] Business Line Data and Key Metrics Changes - The company acquired a six-facility industrial manufacturing portfolio for $54.5 million, increasing industrial concentration to 69% of annualized straight-line rents from 63% at the start of the year [6][19] - The portfolio achieved a 99.1% occupancy rate, the highest since Q1 2019, with a weighted average lease term of 7.5 years [8] Market Data and Key Metrics Changes - The Federal Reserve reduced the funds rate by 50 basis points, contributing to a downward trend in long-term rates [5] - Asking cap rates showed a gradual downward trend, aligning with long-term Treasury yields [5] Company Strategy and Development Direction - The company focuses on growing its industrial concentration, managing existing portfolio assets, and strategically disposing of non-core assets [6][10] - Plans to continue acquiring high-quality industrial assets and support tenant growth through lease extensions and capital improvements [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the capital markets and the company's ability to execute its strategy effectively [5][11] - The company remains aware of challenges in the office environment and will strategically evaluate its portfolio for potential disposals [10] Other Important Information - The company increased its credit facility to $600 million, extending and laddering debt maturities [9][19] - The common stock dividend remains at $0.30 per share per quarter [18] Q&A Session Summary Question: Future of Industrial Allocation - Management anticipates increasing industrial allocation beyond 70% in the foreseeable future [24] Question: Increase in Operating Expenses - Operating expenses have risen due to inflation and insurance costs, which are being passed on to tenants where possible [28][31] Question: Capital Expenditure Insights - Higher capital expenditures were driven by renewals, which are expected to be accretive to the company [32] Question: Dividend Confidence Amid CapEx - Management believes that the capital expenditures are accretive and do not negatively impact the dividend [36] Question: Acquisitions Pipeline for 2026 - Management is optimistic about matching 2025 acquisition levels, with two transactions currently in the pipeline [37] Question: Lease Termination Details - A lease termination occurred with a small tenant, but a new tenant has already taken over the space [44][50] Question: Automotive Exposure and Bankruptcy Concerns - Management maintains confidence in their automotive exposure, emphasizing robust underwriting practices [51][53] Question: Leverage and Asset Sales - The company plans to manage leverage through capital recycling and may issue more equity to reduce leverage [55] Question: Cap Rate Trends - Management sees cap rates compressing and anticipates taking advantage of favorable conditions in the market [61] Question: Impact of Government Shutdown - No significant impact from the government shutdown has been reported by tenants [62]

Core Insights - The company reported its best leasing quarter ever, achieving 727,000 square feet of comparable space leased at an average cash rent of $35.71, which is 28% higher than the previous tenant's rent [1] - Two-thirds of the leased space was for renewals, indicating strong tenant retention, while over half of the new leases were for currently occupied spaces, showcasing the attractiveness of the shopping centers [1][12] - The company experienced a strong comparable operating income growth of 4.4% for the quarter, leading to a Funds From Operations (FFO) per share of $1.77, despite some negative impacts from capitalized interest and operating costs [5][19] Leasing Performance - The company recorded a record 123 comparable deals with impressive rent spreads of 28% over prior rents, reflecting strong demand for its properties [12] - The occupancy rate in the comparable pool increased by 40 basis points quarter-over-quarter and 20 basis points year-over-year, reaching 94% [12] - The overall occupancy rate across all shopping centers stands at 93.8%, with a healthy leased rate of 95.7% expected to grow further due to a strong pipeline of new leases [13][14] Development and Acquisitions - The company is progressing well with residential construction projects in Hoboken, New Jersey, and Balakinwood, Pennsylvania, with a total capital commitment of approximately $280 million [6] - The acquisition of Annapolis Town Center for $187 million is expected to enhance surrounding merchandising and increase rental income, supported by strong existing anchors like Whole Foods and Target [10][17] - The company is actively pursuing additional acquisitions, with another large center expected to close in the fourth quarter, further expanding its portfolio in affluent markets [10][24] Financial Position - The company maintains significant liquidity of approximately $1.3 billion, with a strong balance sheet reflected in a net debt to EBITDA ratio of 5.6 times [20] - The company is executing a capital recycling program, with $400 million in assets at various stages of sale, and expects to close approximately $200 million by year-end [20][22] - Guidance for FFO per share for 2025 has been raised to a range of $7.20 to $7.26, representing a growth of 6.8% at the midpoint over 2024 [23] Market Outlook - The company anticipates continued strong demand for its retail portfolio, with expectations for comparable occupied levels to be in the low 94% range by year-end [24] - The leasing environment remains robust, with a significant portion of new leases being signed for currently occupied spaces, indicating a healthy market dynamic [14][70] - The company is focused on enhancing internal and external growth, leveraging its experienced team to drive leasing performance and operational efficiency [11][62]

Financial Data and Key Metrics Changes - Total revenue increased from $29.6 million in Q3 2024 to $31.1 million in Q3 2025, representing a 4.9% year-over-year growth [10] - Quarter-over-quarter, total revenue grew by 1.1% when normalizing for a $1.7 million reversal of interest receivables in Q2 2025 [10] - Funds from operations (FFO) rose to $13.5 million in Q3 2025, a 5.7% increase from $12.8 million in Q3 2024 [13] - Adjusted funds from operations (AFFO) increased to $15.1 million, a 3.1% year-over-year growth [13] - The AFFO dividend payout ratio remained strong at 85% [14] Business Line Data and Key Metrics Changes - Occupancy decreased from 90.7% to 90.1% during the quarter, but leasing activity is expected to increase occupancy by 50 to 100 basis points by year-end [5][6] - The weighted average lease term increased slightly from 6.6 to 6.7 years [6] - One inpatient rehabilitation facility was acquired for $26.5 million, with an anticipated annual return of approximately 9.4% [7] Market Data and Key Metrics Changes - The company is seeing attractive opportunities in the market with cap rates in the 9%-10% range [17] - The company is focused on capital recycling to fund acquisitions without increasing leverage [20] Company Strategy and Development Direction - The company is being highly selective in acquisitions and is focused on capital recycling to fund new investments [17][20] - The strategy includes disposing of non-core properties to focus on better buildings and markets [36] - The company aims to maintain modest leverage levels while pursuing growth opportunities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing activity and expects a positive impact on occupancy and revenue in 2026 [31] - The company is actively pursuing multiple plans to ensure stable rent from the behavioral health tenant [27] - Management is cautious about the timing of the acquisition related to the behavioral health tenant, indicating it may close in Q1 2026 [26] Other Important Information - The company declared a dividend of $0.4750 per common share for Q3 2025, marking a continuous increase since the IPO [9] - The company expects to close on a property sale with an expected gain of approximately $11.5 million in Q4 2025 [8] Q&A Session Summary Question: Acquisition pipeline and funding - Management indicated that the acquisition pipeline remains attractive, but they are being selective due to current stock prices [17] Question: Impact of asset sales on leverage - Management clarified that they do not expect to increase leverage significantly and plan to match dispositions with acquisitions [20][21] Question: Behavioral health tenant rent payments - The tenant previously paid approximately $800,000 per quarter but only paid $200,000 in the current quarter [25] Question: Timing of acquisition closing - Management hopes to close the acquisition by year-end but realistically expects it to occur in Q1 2026 [26] Question: Plans if the acquisition falls through - Management is exploring multiple paths to ensure stable rent from the tenant [27] Question: Impact of redevelopment properties on earnings - Significant leases from redevelopment properties are expected to commence in 2026, contributing to earnings growth [29]

Financial Data and Key Metrics Changes - Total revenue increased from $29.6 million in Q3 2024 to $31.1 million in Q3 2025, representing a 4.9% year-over-year growth [10] - Quarter-over-quarter, total revenue growth was 1.1% when normalizing for a $1.7 million reversal of interest receivables in Q2 2025 [10] - Funds from operations (FFO) rose to $13.5 million in Q3 2025, a 5.7% increase year-over-year [13] - Adjusted funds from operations (AFFO) totaled $15.1 million, reflecting a 3.1% year-over-year increase [14] - The AFFO dividend payout ratio remained strong at 85% [14] Business Line Data and Key Metrics Changes - Occupancy decreased from 90.7% to 90.1% during the quarter, but new leases signed in October are expected to increase leased occupancy by 50 to 100 basis points by year-end [5][6] - The weighted average lease term increased slightly from 6.6 to 6.7 years [6] - One inpatient rehabilitation facility was acquired for $26.5 million with an anticipated annual return of approximately 9.4% [7] - Six properties are under definitive purchase and sale agreements for an aggregate expected investment of $146 million, with expected returns ranging from 9.1% to 9.75% [7] Market Data and Key Metrics Changes - The company is experiencing strong leasing activity across its portfolio, indicating a positive market environment [33] - The geriatric behavioral hospital operator, a tenant in six properties, paid approximately $200,000 in rent during the quarter, down from $800,000 previously [4][26] Company Strategy and Development Direction - The company is focused on capital recycling to fund acquisitions without increasing leverage, emphasizing selective asset sales and acquisitions [9][20] - The strategy includes maintaining modest leverage levels while evaluating the best uses of capital [9] - The company aims to close on one property in Q4 2025, with the remaining five properties closing throughout 2026 and 2027 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acquisition pipeline, noting attractive opportunities in the 9 to 10% cap rate range [17] - The company is actively pursuing multiple plans to ensure continued rent payments from the behavioral health tenant [28] - Management expects to see a tailwind for growth in 2026 due to strong leasing activity and upcoming lease commencements [33] Other Important Information - The company declared a dividend of $0.4750 per common share for Q3 2025, marking a continuous increase since its IPO [9] - The company is undergoing redevelopment on three properties, with significant impacts expected on earnings starting in 2026 [31] Q&A Session Summary Question: Acquisition pipeline status - Management indicated that they are being highly selective and have a pipeline of quality assets, but the acquisition opportunities are generally attractive [17][18] Question: Funding and leverage concerns - Management reassured that they do not expect to meaningfully increase leverage and plan to match dispositions with acquisitions [20][21] Question: Behavioral health tenant rent payments - The tenant previously paid approximately $800,000 per quarter but only paid $200,000 in the current quarter [26] Question: Timing of acquisition closure - Management expressed hope for a closure by year-end but indicated it is more realistic to expect it in Q1 2026 [27] Question: Plans if the acquisition deal falls through - Management confirmed they are exploring multiple paths to ensure continued rent payments from the tenant [28] Question: Impact of redevelopment properties on earnings - Management noted that significant leases will not commence until after mid-2026, impacting earnings positively [31]

Financial Data and Key Metrics Changes - FFO as adjusted increased by 4% year-over-year for Q3 2025, with year-to-date growth at 7% compared to the first nine months of the previous year [4] - Same property net operating income (NOI) rose by 4.7% for the quarter and 5.4% year-to-date [4] - The company raised its 2025 FFO as adjusted guidance to a new range of $1.42-$1.44 per share, representing 6% growth over 2024 at the midpoint [8][17] Business Line Data and Key Metrics Changes - Leasing activity totaled 31 deals aggregating 347,000 sq ft, including 20 renewals at a 9% spread and 11 new leases at a 61% spread [9] - Same property lease rate stands at 96.6%, a decline of 20 basis points from the previous quarter [10] - Shop occupancy rate remained flat at 92.5% [11] Market Data and Key Metrics Changes - The acquisition market remains competitive, driven by institutional capital and tighter spreads from traditional banks [7] - The company’s Boston portfolio now includes seven properties valued at nearly $500 million, representing about 10% of the company's total value [7] Company Strategy and Development Direction - The company is focused on capital recycling, having acquired nearly $600 million in high-quality shopping centers while disposing of approximately $500 million in non-core assets [7] - The active redevelopment pipeline totals $149 million with a projected yield of 15% [12] - The company aims to generate sustainable 3%+ growth in same property NOI [72] Management's Comments on Operating Environment and Future Outlook - Management expects shopping center fundamentals to remain strong due to favorable supply-demand dynamics and record low vacancy rates [8] - The company is optimistic about the leasing market, with national retailers in expansion mode and willing to pay necessary rents [14][56] - Management believes the supply-demand imbalance in retail will continue to favor their properties for the foreseeable future [68] Other Important Information - The company completed a $39 million acquisition of Brighton Mills, a grocery-anchored shopping center, funded by proceeds from the sale of other properties [4][5] - The company has a strong liquidity position of over $900 million, including $145 million in cash [16] Q&A Session Summary Question: Timeline for lease expirations at Brighton Mills - Management indicated that most leases at Brighton Mills expire in 22 years, with expected NOI growth exceeding 3% [22] Question: Breakdown of one-time items recognized in 2025 - Management highlighted about $2 million in one-time collections and $1.5 million related to CAM recovery billings as non-recurring items [24][25] Question: Opportunities at Shoppers World - Management discussed flexibility with the Kohl's parcel and potential mixed-use opportunities for redevelopment [32] Question: Rent spreads in the quarter - Management noted that the 60% rent spread was driven by unique anchor leases, with expectations for double-digit spreads going forward [34] Question: Creating more shop space in the portfolio - Management is actively studying opportunities to split anchor spaces into shop spaces, with high demand for shop tenants [40][41] Question: Acquisition environment and competition - Management acknowledged a competitive market with increased interest from institutional capital, but emphasized a disciplined approach to acquisitions [46][48] Question: Tenant demand and balance between restaurants and grocers - Management reported strong demand from both grocers and restaurants, with no significant push-pull tension between the two [56] Question: Institutional capital demand in the D.C. metro area - Management noted that while Boston and New York are more in demand, their D.C. centers are performing well [61] Question: Sustainability of high occupancy levels - Management attributed sustained high occupancy levels to a favorable supply-demand dynamic in the retail market [67]

Financial Data and Key Metrics Changes - FFO as adjusted increased by 4% year-over-year for Q3 2025, with year-to-date growth at 7% compared to the first nine months of the previous year [4] - Same property net operating income (NOI) rose by 4.7% for the quarter and 5.4% year-to-date [4] - The company raised its 2025 FFO as adjusted guidance to a new range of $1.42 to $1.44 per share, representing 6% growth over 2024 at the midpoint [8][17] Business Line Data and Key Metrics Changes - Leasing activity totaled 31 deals aggregating 347,000 square feet, including 20 renewals at a 9% spread and 11 new leases at a 61% spread [9] - Same property lease rate stands at 96.6%, with a 20 basis point decline from the previous quarter [10] - Shop occupancy rate remained flat at 92.5%, while the overall same property NOI growth, including redevelopment guidance, was increased to a new midpoint of 5.25% [11][17] Market Data and Key Metrics Changes - The acquisition market remains competitive, driven by institutional capital and tighter spreads from traditional banks [7] - The company’s Boston portfolio now includes seven properties valued at approximately $5,500 million, representing about 10% of the company's total value [7] - The overall leasing market shows strong demand, with year-to-date leasing spreads averaging 40% on new leases and nearly 10% on renewals [8] Company Strategy and Development Direction - The company is focused on capital recycling, having acquired nearly $600 million of high-quality shopping centers at an average 7% cap rate while disposing of approximately $500 million of non-core assets at a 5% cap rate [7] - The active redevelopment pipeline totals $149 million with a projected yield of 15% [12] - The company aims to generate sustainable 3% plus growth through strategic acquisitions and dispositions [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of shopping center fundamentals, driven by favorable supply-demand dynamics and record low vacancy rates [8] - The company anticipates continued strong demand for retail space, particularly in the Northeast Corridor market [14] - Management highlighted the importance of maintaining a balance between restaurant and grocery tenants to ensure overall tenant success [56] Other Important Information - The company completed the acquisition of Brighton Mills, a grocery-anchored shopping center, for $39 million, expecting annual NOI growth to exceed 3% [4][5] - The company has a strong liquidity position of over $900 million, including $145 million in cash [16] Q&A Session Summary Question: Timeline for monetizing opportunities at Brighton Mills - Management indicated that most leases at Brighton Mills have terms extending over the next 10 to 22 years, with confidence in achieving over 3% NOI growth [22] Question: Breakdown of one-time items recognized in 2025 - Management highlighted approximately $2 million in one-time collections related to old receivables and about $1.5 million from CAM recovery billings as non-recurring items [24][25] Question: Opportunities at Shoppers World - Management discussed the flexibility to work with the Kohl's parcel separately and the potential for redevelopment or retenanting to enhance value [32] Question: Rent spreads in the quarter - Management noted that the 60% rent spread was driven by unique anchor leases with HomeGoods and Ross, and while double-digit spreads are expected, 60% is not sustainable every quarter [34][35] Question: Creating more shop space in the portfolio - Management is actively studying opportunities to split anchor spaces into shop spaces, with demand for shop space remaining strong [40][41] Question: Acquisition environment and funding - Management acknowledged a competitive acquisition market with increased interest from institutional capital, while maintaining a disciplined approach to bidding [46][48] Question: Institutional competition for nontraditional assets - Management noted that while there is interest in nontraditional shopping center assets, their platform allows them to differentiate and find value-add opportunities [52][53] Question: Balancing demand between restaurants and grocers - Management indicated that both sectors are in expansion mode, with no significant push-pull tension observed [56] Question: Shift in demand in the D.C. metro area - Management reported strong performance and demand in their D.C. centers, with no significant shifts in institutional capital interest noted [61] Question: Sustaining high occupancy levels - Management emphasized that supply-demand metrics favor sustained high occupancy levels due to limited new retail construction [67]

Financial Data and Key Metrics Changes - FFO as adjusted increased by 4% year-over-year for Q3 2025, with year-to-date growth reaching 7% compared to the first nine months of the previous year [3] - Same property net operating income (NOI) rose by 4.7% for the quarter and 5.4% year-to-date [3] - The company raised its 2025 FFO as adjusted guidance to a new range of $1.42 to $1.44 per share, reflecting a 6% growth over 2024 at the midpoint [6][14] Business Line Data and Key Metrics Changes - Leasing activity totaled 31 deals aggregating 347,000 square feet, including 20 renewals at a 9% spread and 11 new leases at a 61% spread [7] - The overall same property lease rate is at 96.6%, a decline of 20 basis points from the previous quarter [8] - Shop occupancy rate remained flat at 92.5%, while the company continues to explore creating new shop space [9] Market Data and Key Metrics Changes - The Boston portfolio now includes seven properties valued at approximately $5,500 million, representing about 10% of the company's total value [5] - The acquisition market remains competitive, driven by institutional capital and tighter spreads from traditional banks [5] Company Strategy and Development Direction - The company is focused on capital recycling, having acquired nearly $600 million in high-quality shopping centers at an average 7% cap rate while disposing of approximately $500 million in non-core assets at a 5% cap rate [5] - The active redevelopment pipeline totals $149 million with a projected yield of 15% [10] - The company aims to generate sustainable same property NOI growth of 3% or more [92] Management's Comments on Operating Environment and Future Outlook - Management expects shopping center fundamentals to remain strong, driven by favorable supply-demand dynamics and record low vacancy rates [6] - The company is optimistic about the leasing market, with national retailers in expansion mode and willing to pay necessary rents [11] - Management highlighted the importance of balancing the addition of restaurant spaces with grocery stores to avoid oversaturation [77] Other Important Information - The company secured a new $123.6 million four-year non-recourse mortgage at a fixed rate of 5.1% [12] - The liquidity position remains strong at over $900 million, including $145 million in cash [14] Q&A Session Summary Question: Can you provide a breakdown of one-time items recognized in 2025? - Management noted about $2 million in one-time collections related to old receivables and approximately $1.5 million from CAM recovery billings [29][30] Question: What is the opportunity set within Shoppers World? - Management expressed confidence in redeveloping the Kohl's parcel and exploring mixed-use opportunities [41][42] Question: How do you balance demand from restaurants and grocers? - Management indicated that both sectors are expanding, with no significant push-pull tension between them [77] Question: Is there a shift in demand in the D.C. metro area? - Management reported strong performance in D.C. centers, with continued demand for retail space [79] Question: What is the outlook for same property NOI growth? - Management aims for sustainable same property NOI growth of 3% or more, supported by the signed-not-open pipeline [92]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net loss of $7.8 million, or a loss of $0.31 per diluted share, on total revenues of $62.8 million, compared to a net loss of $8.9 million, or a loss of $0.35 per diluted share, on total revenue of $64.1 million in Q3 2024 [4] - The company's NOI for Q3 2025 was $38.8 million on 35 properties, an increase from $38.1 million for Q3 2024 on 36 properties [4] - Core FFO for Q3 2025 was $17.7 million or $0.70 per diluted share, compared to $0.69 per diluted share in Q3 2024 [5] - The company paid a dividend of $0.51 per share for Q3, with a 1.37x coverage by core FFO and a payout ratio of 73.2% [6] Business Line Data and Key Metrics Changes - Same-store rent and occupancy decreased by 0.3% and 1.3% respectively, while same-store revenues decreased by 0.6% and same-store expenses decreased by 6.2%, leading to a 3.5% increase in same-store NOI compared to Q3 2024 [5] - The company completed 365 full and partial upgrades during the quarter, leasing 297 upgraded units with an average monthly rent premium of $72 and a 20.1% return on investment [5] Market Data and Key Metrics Changes - Same-store total revenue was down 60 basis points, with five of the ten markets averaging at least 1% growth, particularly Atlanta and South Florida at +2.8% each [9] - Same-store operating expenses decreased by 6.3% year-over-year, with payroll and R&M down 7.5% and 6.1% respectively [9] - The portfolio's same-store NOI margin registered at 62.2%, with seven of ten markets achieving year-over-year NOI growth of at least 2.5% [10] Company Strategy and Development Direction - The company aims to achieve $170 million of NOI by 2027, focusing on capital recycling and growth strategies [31][50] - The company plans to acquire a 321-unit multifamily community in North Las Vegas, which is expected to generate a 7% same-store NOI CAGR over the next five years [19] - The company is prioritizing stock buybacks in the low $30s while also seeking external growth through strategic acquisitions [21][49] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding expense control and the potential for exceeding expectations in core FFO [26] - The company anticipates a steeper recovery in the market, with expectations for improved performance heading into 2026 [21] - Management noted that the rental market fundamentals are coalescing to support a more bullish outlook for multifamily housing [14] Other Important Information - The company reported a NAV range per share of $43.40 to $56.24, with a midpoint of $49.82, based on stable cap rates [7] - The company has increased its dividend per share by 157.3% since inception [6] Q&A Session Summary Question: Sustainability of Operating Expense Control - Management indicated continued improvement in non-controllable expenses like insurance and real estate taxes, while payroll and R&M are expected to remain consistent [26][27] Question: NAV Discount and Shareholder Value - Management emphasized the company's growth potential and alignment with shareholder interests, stating that they are confident in closing the NAV discount through operational performance [30][32] Question: New Lease Rates and Renewals - New leases were down 4.06% while renewals were up 1.94%, resulting in a blended negative of 44 basis points for the quarter [37] Question: Capital Expenditure Trends - Management noted that maintenance CapEx is currently elevated but expected to moderate as they streamline spending [44][46] Question: Rationale for Acquiring New Assets - Management clarified that acquiring new assets does not conflict with stock buyback strategies, as they see potential for value-add in the new acquisition [49]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net loss of $7.8 million, or a loss of $0.31 per diluted share, on total revenues of $62.8 million, compared to a net loss of $8.9 million, or a loss of $0.35 per diluted share, on total revenue of $64.1 million in Q3 2024 [4] - Net Operating Income (NOI) for Q3 2025 was $38.8 million, an increase from $38.1 million in Q3 2024, despite a decrease in the number of properties from 36 to 35 [4][5] - Core Funds from Operations (FFO) for Q3 2025 was $17.7 million, or $0.70 per diluted share, compared to $0.69 per diluted share in Q3 2024 [5][7] - The company paid a dividend of $0.51 per share for Q3, with a 1.37 times coverage by core FFO and a payout ratio of 73.2% [7] Business Line Data and Key Metrics Changes - Same-store rent and occupancy decreased by 0.3% and 1.3% respectively, while same-store revenues decreased by 0.6% and same-store expenses decreased by 6.2%, leading to a 3.5% increase in same-store NOI compared to Q3 2024 [5][11] - The company completed 365 full and partial upgrades during the quarter, leasing 297 upgraded units with an average monthly rent premium of $72 and a 20.1% return on investment [6][7] Market Data and Key Metrics Changes - Same-store total revenue was down 60 basis points, with five out of ten markets averaging at least 1% growth, particularly Atlanta and South Florida at 2.8% each [10] - The portfolio's same-store NOI margin was 62.2%, with seven out of ten markets achieving year-over-year NOI growth of at least 2.5% [11] - The occupancy rate at the end of Q3 was 93.6%, with a leasing rate of 95.8% [12] Company Strategy and Development Direction - The company aims to achieve $170 million of NOI by 2027, focusing on capital recycling and growth strategies [33][21] - The company plans to acquire a 321-unit multifamily community in North Las Vegas, which is expected to generate a 7% same-store NOI CAGR over the next five years [20][21] - The company is prioritizing stock buybacks in the low $30s while also seeking external growth through capital recycling [22][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the rental market, anticipating a recovery in lease pricing by mid-2026 [34][22] - The company noted that bad debt has stabilized with a 32% year-over-year improvement, indicating strong financial health among tenants [12][22] - Management highlighted the importance of controlling expenses, with a focus on payroll and repair and maintenance costs [26][12] Other Important Information - The company reported a NAV range per share of $43.40 to $56.24, with a midpoint of $49.82, based on stable cap rates [8] - The company has increased its dividend per share by 157.3% since inception [7] Q&A Session Summary Question: Sustainability of Operating Expense Control - Management indicated continued improvement in non-controllable expenses like insurance and real estate taxes, while payroll and R&M are expected to remain consistent [26][27] Question: NAV Discount and Shareholder Value - Management emphasized the company's growth potential and alignment with shareholder interests, stating that they are committed to closing the NAV discount through operational performance and capital recycling [32][33] Question: New Lease Rates and Renewals - New leases were down 4.06% while renewals were up 1.94%, resulting in a blended negative of 44 basis points for the quarter [40] Question: Capital Expenditure Trends - Management noted that maintenance CapEx is currently elevated but expected to moderate as they streamline spending [47][50] Question: Rationale for Acquiring New Assets - Management clarified that acquiring new assets does not conflict with stock buyback strategies, as they see potential for value-add in the new acquisition [52][53]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net loss of $7.8 million, or a loss of $0.31 per diluted share, on total revenues of $62.8 million, compared to a net loss of $8.9 million, or a loss of $0.35 per diluted share, on total revenue of $64.1 million in Q3 2024 [5] - The company's NOI for Q3 2025 was $38.8 million on 35 properties, an increase from $38.1 million for the same period in 2024 on 36 properties [5] - Core FFO for Q3 2025 was $17.7 million or $0.70 per diluted share, compared to $0.69 per diluted share in Q3 2024 [6] Business Line Data and Key Metrics Changes - Same-store rent and occupancy decreased by 0.3% and 1.3% respectively, while same-store revenues decreased by 0.6% and same-store expenses decreased by 6.2%, leading to a 3.5% increase in same-store NOI compared to Q3 2024 [6][10] - The company completed 365 full and partial upgrades during the quarter, leasing 297 upgraded units with an average monthly rent premium of $72 and a 20.1% return on investment [6] Market Data and Key Metrics Changes - Same-store total revenue was down 60 basis points, with five of the ten markets averaging at least 1% growth, particularly Atlanta and South Florida at 2.8% each [10] - The portfolio's same-store NOI margin registered at 62.2%, with seven of the ten markets achieving year-over-year NOI growth of at least 2.5% [11] Company Strategy and Development Direction - The company aims to achieve $170 million of NOI by 2027, focusing on capital recycling and growth strategies [21][52] - The company plans to acquire a 321-unit multifamily community in North Las Vegas, which is expected to generate a 7% same-store NOI CAGR over the next five years [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the rental market, anticipating a recovery in lease pricing by mid-2026, which could catalyze stock performance [34] - The company is focused on maintaining strong expense control and believes it can meet same-store guidance expectations while preparing for improved performance heading into 2026 [23] Other Important Information - The company paid a third-quarter dividend of $0.51 per share, which was 1.37 times covered by core FFO, with a 73.2% payout ratio [7] - The updated NAV estimate per share ranges from $43.40 to $56.24, with a midpoint of $49.82 [8] Q&A Session Summary Question: Sustainability of Operating Expense Control - Management indicated that improvements in non-controllable expenses like insurance and real estate taxes are expected to continue, while payroll and R&M expenses are anticipated to remain consistent [27][28] Question: NAV Discount and Shareholder Value - Management emphasized the company's growth potential and the importance of capital recycling, stating that they are aligned with shareholder interests and confident in the terminal value of the portfolio [32][34] Question: New Lease Rates and Renewals - New leases were down 4.06% while renewals were up 1.94%, resulting in a blended negative of 44 basis points for the quarter [39] Question: CapEx Spend - Management acknowledged that maintenance CapEx is currently elevated but is expected to moderate as they streamline spending and focus on necessary upgrades [46][49] Question: Rationale for Acquiring New Asset - Management clarified that acquiring the new asset in North Las Vegas does not conflict with stock buyback plans and is seen as a precision-based investment opportunity to enhance growth [51][52]