AFFO per share declined to $0.32 from $0.37 in the prior-year quarter. Pacini said the per-share decline was primarily due to a 1.7 million increase in diluted shares outstanding, reflecting previously disclosed issuance of operating partnership units in the first quarter of 2025 and issuance of common shares through the ATM program and the distribution reinvestment plan.Adjusted funds from operations (AFFO) for the quarter were $4.0 million , compared with $4.1 million a year earlier. Pacini said the rough ...

Management said momentum continued after year-end, with five additional sales completed for GBP 12.3 million and a further 14 disposals “well advanced” (contracted, in solicitors’ hands, or with terms agreed) totaling GBP 29 million.A central theme of the call was the company’s strategic sales program, which executives said was essential to reducing debt and mitigating void costs. Inglis said Regional REIT sold 18 assets in 2025 for GBP 51.6 million, exceeding the company’s GBP 40 million to GBP 50 million ...

Core Insights - The company reported a significant increase in net investment income (NII) to $0.31 per share for the fourth quarter, up from $0.20 per share in the previous quarter, primarily due to higher CLO joint venture income and increased earnings from deployed capital [1][2] Financial Performance - Total investment income increased sequentially, with NII rising over 50% quarter-over-quarter, driven by higher cash income and stronger distributions from the CLO joint venture [2] - The net asset value (NAV) declined to $8.07 per share at December 31, 2025, from $10.01 per share at September 30, 2025, attributed to market volatility and credit-related marks [6][7] - Pro forma NAV, reflecting the incentive fee waiver, would have been $8.23 per share at quarter-end [7] Portfolio Management - The portfolio ended the year with minimal non-accruals, greater diversification, and reduced exposure to higher-risk investments, indicating improved liquidity [3] - Actions taken to de-risk the portfolio included reducing second-lien exposure to about 7% and adding 12 new broadly syndicated credit positions with an average size of approximately $2 million [11] - The company emphasized a focus on performing, more liquid, cash-generative investments, with non-accruals at less than 1% of portfolio fair value [8] Governance and Management Changes - Newly appointed Executive Chairman Jason Reese's role was elevated to enhance direct engagement with management amid challenging credit conditions [5] - The company added Chris Croteau as Head of Credit Research to strengthen risk management [3] Incentive Fee Waiver - Great Elm Capital Management waived all accrued and unpaid incentive fees through March 31, 2026, representing an approximate benefit of $2.3 million, or $0.16 per share, which was immediately accretive to NAV [4] Balance Sheet and Liquidity - As of December 31, 2025, total debt outstanding was $194.4 million, with no borrowings on the $50 million revolver, and cash and money market fund investments totaled approximately $5 million [14] - The asset coverage ratio was 158.1% at quarter-end, compared to 168.2% at September 30, 2025 [14] Dividend Declaration - The board approved a quarterly dividend of $0.30 per share for the first quarter of 2026, equating to a 19.2% annualized yield based on the closing price [16] Strategic Outlook - The company is focusing on cautious deployment and evaluating private credit opportunities while monitoring public and private markets in real time [17] - Management is considering capital allocation strategies, including stock repurchases, to create shareholder value [18] - The company's priorities include protecting capital, generating sustainable NII, and methodically rebuilding NAV over time through disciplined credit execution [19][20]

Financial Data and Key Metrics Changes - Total company sales for 2025 were $1.3 billion, an 8% decline compared to the previous year [8] - Adjusted EBITDA increased by 10% year-over-year to $398 million, with margins expanding by 500 basis points to 30.8% [10] - GAAP net loss for 2025 was $167 million, including $337 million of pre-tax special charges [9] - Free cash flow reached $274 million, the highest level in the past five years, exceeding updated guidance [11] Business Line Data and Key Metrics Changes - Performance Materials sales remained flat at $607 million, despite lower auto production due to industry volatility [12] - Performance Chemicals sales declined by $86 million, primarily due to repositioning actions within Industrial Specialties [8] - Advanced Polymer Technologies faced a 15% sales decline, with segment EBITDA down 18% year-over-year due to volume declines [16] Market Data and Key Metrics Changes - The automotive industry faced significant disruptions from tariff uncertainties and supply chain challenges, impacting production and demand [35] - Pavement Technologies sales remained flat year-over-year, with volume growth in the NAFTA region offset by lower infrastructure spending in South America [14] - The company noted a positive trend in North America regarding the adoption of fuel-efficient ICE vehicles [35] Company Strategy and Development Direction - The company aims to grow adjusted earnings per share by 10% and free cash flow per share by 5% through 2027 [4] - Plans to divest Advanced Polymer Technologies segments and Road Markings product line were announced [4] - Focus on optimizing higher value applications in filtration, particularly in water, pharma, and food and beverage sectors [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in starting 2026 with strong performance in core businesses despite a challenging economic environment [7] - The company expects 2026 Adjusted EPS to be in the range of $4.08-$5.20, with sales projected between $1.1 billion and $1.2 billion [18] - Management highlighted the importance of regulatory changes in China and India as potential growth drivers for Performance Materials [55][56] Other Important Information - The company successfully reduced net leverage to 2.6x, exceeding its target of below 2.8x [12] - Share repurchases of approximately $56 million were executed in 2025, with a remaining authorization of just under $300 million [11] Q&A Session Summary Question: Update on potential asset sales and impact on buybacks - Management confirmed that both APT and Road Markings sales processes are progressing well, with expectations to announce updates before year-end [26] - Share buybacks of $300 million are planned regardless of asset sales, with a ratable cadence throughout the year [27] Question: Stranded costs and their timing - Management confirmed clear visibility to eliminate $15 million in stranded costs by year-end, with accumulation expected more in the latter half of the year [29] Question: Performance Materials auto production assumptions - Management indicated a stable auto production environment, with potential upside if supply chain issues abate [34] Question: Peak margins for new segments - Management expects Performance Materials to maintain margins north of 50%, with Performance Chemicals projected in the mid-teens [44] Question: Opportunities for acquisitions in Pavement Technologies - Management stated that while they see growth potential in existing technologies, acquisitions are not a priority in the near term [58]

Financial Data and Key Metrics Changes - The fourth quarter consolidated volume was 4.2 billion gallons, down 5% year-over-year, with full-year volume totaling 16.9 billion gallons, down approximately 4% [18] - Fourth quarter gross profit was $235 million, down 9% year-over-year, and full-year gross profit was $948 million, down 8% from 2024 [18][19] - Total non-GAAP adjustments in the fourth quarter were $325 million, primarily due to $247 million of non-cash intangible and other asset impairments [17] Business Line Data and Key Metrics Changes - Aviation volumes in the fourth quarter were 1.8 billion gallons, down 5% year-over-year, but gross profit increased approximately 8% to $130 million due to the Universal Trip Support acquisition [19] - Land volumes declined 9% year-over-year in the fourth quarter, with gross profit down 32% to $71 million, driven by unfavorable market conditions and strategic exits [22] - Marine volumes were approximately 4.1 million metric tons in the fourth quarter, flat year-over-year, while gross profit increased 2% to $35 million [25] Market Data and Key Metrics Changes - The company is focusing on North America for its land business, particularly in higher margin areas such as cardlock and retail activities, as well as natural gas [10] - The exit from European power and energy management businesses shifts focus to core businesses that deliver more consistent profitability [11] Company Strategy and Development Direction - The company is reshaping its portfolio to concentrate on businesses that deliver attractive and predictable returns, enhancing efficiency and financial discipline [6][8] - A renewed focus on core business and operational excellence is expected to drive sustainable growth, with significant changes in the land segment aimed at improving profitability [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the fourth quarter performance fell short of expectations due to competitive pressures and underperformance in certain business lines [13] - The outlook for 2026 reflects confidence in structural changes that simplify the business and enhance focus on core growth areas [15] Other Important Information - The company generated $34 million of operating cash flow and $13 million of free cash flow in the fourth quarter, with full-year free cash flow totaling $227 million [30] - An incremental $150 million share repurchase authorization was approved, reflecting confidence in the business [31] Q&A Session Summary Question: Impact of Universal Trip acquisition and tank wagon business sale - The Universal Trip Support business is expected to contribute approximately $70 million in gross profit in 2026, while the tank wagon business exit will shed about 1 billion gallons of volume [36][38] Question: Seasonality in land business post-exits - The seasonality in the land business is expected to improve with the exit of non-core activities, while aviation will still experience seasonal demand fluctuations [44][46] Question: New business model for fuel management - The new model involves owning or leasing sites and partnering with independent operators, which is expected to improve cash flow and margins [48][49] Question: Competitive pressure in aviation - While competitive pressure is anticipated, the company is exploring new opportunities to expand airport locations to offset margin pressures [51] Question: Marine business rebound factors - The marine business is influenced by macro factors such as price and volatility, with expectations for stability in 2026 unless market conditions improve [55]

Industrial: Same-property NOI decreased 9% in Q4 and fell 3.7% for the year. Industrial occupancy declined to 90.7% at Dec. 31, 2025, from 98.9% a year earlier.Retail: Same-property NOI rose 4.4% in Q4 and 6.7% for the full year, driven by occupancy gains at River Landing and “Forex,” according to Froom.Office: Same-property NOI increased 1.5% for both Q4 2025 year-over-year and full-year 2025 versus 2024. Office occupancy was 96% at Dec. 31, 2025, with an average remaining lease term of 5.2 years. Froom sa ...

Core Insights - InvenTrust Properties reported strong same-property NOI growth of 5.3% for 2025, marking the second consecutive year above 5% and the fifth consecutive year above 4% [3] - The company achieved a core FFO of $1.89 per share, reflecting a 6.2% year-over-year increase, with fourth-quarter core FFO at $0.46 [3][6] - Management highlighted a robust balance sheet and continued portfolio repositioning in the Sun Belt as key factors supporting the 2026 outlook, which includes mid-single-digit core FFO growth and approximately $300 million in net investment activity [4] Financial Performance - For the fourth quarter, same-property NOI was reported at $44.3 million, a 3% increase year-over-year [1] - The full-year drivers of same-property NOI growth included embedded rent escalations (160 basis points), occupancy gains (80 basis points), and positive leasing spreads (90 basis points) [2] - The company ended the year with total liquidity of $480 million, including $35 million in cash and $445 million available under its revolving credit facility [13] Dividend and Guidance - InvenTrust announced a 5% increase in the annual cash dividend to $1 per share, effective for the April dividend payment [14] - For 2026, the company guided to same-property NOI growth of 3.25% to 4.25% and core FFO in the range of $1.91 to $1.95 per share [5][17] Acquisition Strategy - In 2025, InvenTrust sold California assets and acquired 10 properties for over $460 million, including two grocery-anchored deals in the fourth quarter totaling $109 million [6][7] - The company plans approximately $300 million in net acquisition activity for 2026, with nearly half of this target already awarded or under contract [18][19] Leasing Trends - Leasing activity in 2025 was steady, with strong demand in grocery, health and wellness, and specialty food sectors [11] - New leases executed achieved a 30.9% spread, while renewals averaged a 10.9% spread, indicating effective leasing strategies [16]

Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [24] - The 2026 FFO guidance range is set at $3.25-$3.45 per diluted share, with average occupancy expected to decline to 76%-78% [26][27] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest performance in six years, leading to full-year leasing of approximately 2.1 million sq ft, a significant year-over-year increase [4][5] - Key leasing highlights included a 93,000 sq ft lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at Kilroy Oyster Point Phase Two [6][8] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline growing by more than 65% over the last year [6] - In San Francisco, premium sublease space is nearly gone, with 47% of the 32% availability not transacted since 2021, indicating a recovery in the market [42][60] Company Strategy and Development Direction - The company is focused on driving leasing across its operating and development portfolios while monetizing non-core assets and redeploying proceeds into select opportunities [4][15] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life science sector, positioning it to capture demand across West Coast markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing environment, particularly in San Francisco, where new business formation is driving demand [81] - The company anticipates a robust M&A environment in the life science sector, with expectations for continued growth in leasing activity [8][9] Other Important Information - The company successfully completed the sale of several non-core assets, including the Sunset Media Center for $61 million and Kilroy Sabre Springs for $125 million, exceeding its goal for land parcel dispositions [12][13][14] - The anticipated yield at Kilroy Oyster Point Phase Two is now in the mid-5% range, approximately 100 basis points below the original underwriting [11] Q&A Session Summary Question: Can you discuss the UCSF anchor lease and its late commencement? - Management indicated that the UCSF lease is part of a new development project in shell condition, requiring time for build-out and space planning [34][35] Question: What are the retention expectations for the 1.05 million sq ft expiring in 2026? - Management expects substantial move-outs from this pool but has already backfilled about 140,000 sq ft and anticipates an additional 50,000-100,000 sq ft in potential renewals [50][51] Question: What is the competitive landscape for KOP and potential monetization? - Management remains committed to the long-term growth potential of KOP, emphasizing the value created in phase one and the strategic leasing efforts in phase two [76][77]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of -$32 million or -$0.49 per share, with a book value of $13.04 as of December 31 [3] - Distributable earnings were $14 million or -$0.22 per share, and a cash dividend of $0.25 was paid for the quarter [3] Business Line Data and Key Metrics Changes - New originations in Q4 totaled $424 million, surpassing repayments of $380 million, indicating a positive trend in loan origination [8] - Over 75% of new originations were concentrated in multifamily and industrial loans, which are showing resilient fundamentals [5] Market Data and Key Metrics Changes - The company ended the year with over $880 million in liquidity, including $85 million in cash and $700 million in undrawn capacity on the corporate revolver [9] - The weighted average risk rating on the portfolio is 3.2, with a debt-to-equity ratio of 2.2 times and a total leverage ratio of 3.9 times, consistent with target ranges [9] Company Strategy and Development Direction - The company aims to strengthen its liquidity position and has successfully closed a $650 million term loan B, reducing the coupon to SOFR plus 250 basis points [4] - A focus on geographic diversification was highlighted, with the company closing its first loan in Europe, which is part of a strategic effort to build its real estate credit platform [4][5] - The company plans to implement an aggressive resolution strategy for watchlist assets and select office assets to compress the discount of its stock price to book value [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market improving and highlighted the importance of engaging with tenants to optimize asset monetization [7] - The dividend policy is under active evaluation as part of a broader capital allocation discussion, balancing near-term earnings visibility with long-term shareholder value [7] Other Important Information - The company downgraded certain loans to risk rating 5, resulting in total incremental CECL provisions of $44 million during the quarter [8] - The company repurchased over $9 million of common stock at a weighted average share price of $8.24 during the quarter, with a total of $43 million repurchased for the full year [10] Q&A Session Summary Question: Will KREF consider a complete overhaul of its business if the stock does not recover? - Management indicated that they are focused on executing their current business plan and believe that progress on REO will lead to better market recognition [12][13] Question: What does success look like for the company by the end of 2026? - Success is defined as monetizing or liquidating the majority of the watchlist and REO assets, with a focus on clarity in the office portfolio [16][18] Question: Will there be a significant portion of the portfolio under-earning in 2026? - Management noted that while some assets are underperforming, they expect contractual payments to continue and see potential upside from resolving REO assets [25][27] Question: How is the dividend policy being evaluated? - The company is taking a rational financial approach to the dividend, focusing on empirical data rather than market sentiment [28][29] Question: What is the outlook for commercial real estate credit demand? - There is an increasing allocation to real estate credit, with institutional investors shifting focus back to the sector, particularly in opportunistic and value-add areas [48][50] Question: How have recent rate cuts affected interest in REO assets? - Management believes that rate cuts are helping liquidity in the market, although the overall sentiment for real estate is positive due to a lack of sellers [54][55] Question: What makes an office loan attractive today? - The company is focused on lending to newer, high-quality assets with stabilized cash flows and long-term leases, minimizing leasing risk [58][59]

Market Performance - The market has experienced a strong year, ending up 16%, with the S&P and Russell 2000 hitting new highs, and international and emerging market equities up over 30% year to date [1][2] - Over the last three years, the market has increased by 80% [3] Investment Outlook - The company maintains a neutral outlook on US large cap equities while being overweight on small caps and favoring international and emerging markets [3][5] - The IPO calendar is expected to strengthen in 2026, with increased M&A activity in the small cap space [5] Currency Impact - A significant portion of the 30% return in international equities is attributed to the decline of the US dollar, with returns in local currency being about half of that in US dollar terms [6]