Acquisition Activities - JD Properties has acquired the 102-key George Williams Hotel in Brisbane for an estimated AUD34 million, translating to approximately AUD333,333 per key [1] - The Tang Shing-bor family sold the 45-key Hotel Victoria Tsim Sha Tsui for HKD118 million, approximately HKD2.6 million per key, representing a loss of about HKD212 million or 64% from its 2018 purchase price [2] - The Mercure Hotel Townsville has been acquired by a new entrant in Queensland's hotel investment market, featuring 174 keys and located on a substantial 43,300 sqm land parcel [3] - AB Capital has expanded its Japan portfolio with two acquisitions in Osaka, which will be rebranded under City Express by Marriott, marking the brand's debut in the Asia-Pacific region [5] Property Features and Developments - The George Williams Hotel features a leased restaurant, meeting facilities, and has undergone over AUD1.2 million in refurbishments [1] - Hotel Victoria includes retail space leased to a restaurant and has a total gross floor area of 1851 sqm [2] - Mercure Hotel Townsville offers wellness and recreation facilities, including an outdoor swimming pool and 13 conference spaces [3] - Johor Bahru City Square will undergo a multi-phase enhancement to expand its total floor space by approximately 1,858 sqm, adding over 300 retail outlets and various amenities [4] Market Trends and Strategic Moves - The hotel market in Townsville is characterized by limited branded supply and development constraints, reflected in a tight initial yield of sub 7% [3] - The redevelopment of Johor Bahru City Square is timed with the upcoming Johor Bahru–Singapore Rapid Transit System expected in 2026, enhancing connectivity [4] - AB Capital's investment strategy is driven by perceived undersupply in Osaka's midscale accommodation segment and growing demand from travelers [5]

Financial Data and Key Metrics Changes - FFO, excluding certain expenses, was approximately $93.35 per share during Q3 2025, with a Go-Forward Portfolio Centers NOI increase of 1.7% compared to Q3 2024 [20][21] - Net debt to EBITDA at the end of Q3 was 7.76 times, a full turn lower than at the outset of the Path Forward Plan [22] - Portfolio sales at the end of Q3 were $867 per sq ft, up almost 4% compared to the same period in 2024 [12] Business Line Data and Key Metrics Changes - Signed 1.5 million sq ft of new and renewal leases in Q3 2025, an 87% increase from Q3 2024, bringing year-to-date signed leases to 5.4 million sq ft, an 86% increase compared to the same period in 2024 [6][11] - The SNO pipeline grew from $87 million in August to $99 million, with expectations to meet or exceed the $100 million target by year-end [7][8] - Trailing 12-month leasing spreads remained positive at 5.9%, marking 16 consecutive quarters of positive leasing spreads [13] Market Data and Key Metrics Changes - Traffic through the portfolio was flat compared to Q3 2024, but comp sales for the go-forward portfolio increased by 3.5% [12][57] - The retailer environment remains strong, with legacy retailers reinventing themselves and emerging brands rapidly opening stores [17][18] Company Strategy and Development Direction - The company is focused on operational improvement, leasing momentum, and achieving deleveraging targets as part of its Path Forward Plan [5][11] - The acquisition of Crabtree Mall is seen as a compelling investment, with plans to invigorate leasing momentum and drive permanent occupancy [11][49] - The company aims to refine its portfolio and strengthen its balance sheet through a $2 billion disposition target, with almost $1.2 billion completed to date [21][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in hitting 2028 targets due to strong leasing momentum and a healthy retailer environment [5][17] - The company remains patient and disciplined regarding additional external growth opportunities while focusing on leasing and operational improvements [11][22] - Management noted that despite macroeconomic uncertainties, retailer demand across all categories is strong, indicating a robust Class A mall sector [18][75] Other Important Information - The company has approximately $1 billion of liquidity, including $650 million of capacity on its revolving line of credit [22] - The addition of high-profile retailers like Hermès and Level 99 is expected to enhance the portfolio's attractiveness and drive customer traffic [14][15] Q&A Session Summary Question: Follow-up on equity issuance - The main objective was to make Crabtree leverage neutral, with future ATM use evaluated in the context of accretive growth opportunities [29] Question: Clarification on SNO pipeline - The $6 million related to Crabtree includes both in-place NOI and incremental leasing since acquisition [30][31] Question: 2026 lease expirations - 55% of 2026 expiring square footage is committed, with another 30% in the letter of intent stage, significantly ahead of last year [34][35] Question: Anchor leases timing and capital costs - Most anchor leases are expected to commence in the back half of 2027 or early 2028, with capital costs varying by tenant [37][39] Question: Financing appetite for non-Fortress assets - The financing market has improved, with recent loans closed at favorable rates, indicating a positive outlook for refinancing [44][49] Question: Impact of Canadian tourists on sales - There has been a reduction in Canadian tourists, but sales performance at key centers like Scottsdale Fashion Square remains strong [72][73] Question: Conflicting signals in retail performance - Despite some retailers facing challenges, the demand for leasing space in high-quality malls remains robust, driven by a lack of new supply [75]

Financial Distress & Control - A distressed-debt fund is taking control of one of the largest malls in America [1] - The move wiped out some creditors [1] - Holders of bonds once rated AAA are facing steep losses [1] Industry Impact - The situation highlights potential risks in the commercial real estate sector [1] - Distressed-debt funds are actively seeking opportunities in struggling assets [1]

Core Insights - The transformation of struggling malls, such as the Dayton Mall, is being driven by unconventional tenants like churches, which can attract community engagement and foot traffic [2][3][6] - The decline of traditional enclosed malls has been attributed to changing demographics, shopping habits, and the rise of e-commerce, but there are signs of potential revival through innovative repurposing strategies [7][8][15] - Successful mall redevelopment involves subdividing large anchor spaces into niche businesses that encourage cross-shopping, leading to increased revenue [10][11][12] Group 1: Mall Transformations - The Dayton Mall has faced challenges due to anchor store closures, leading to its receivership, but the sale of the former Sears space to Crossroads Church has revitalized the mall [2][4] - Crossroads Church has drawn thousands of visitors, including non-affiliated individuals, contributing to the mall's renewed activity [5][6] - The trend of repurposing anchor spaces is not unique to Dayton, as other malls are also exploring unconventional tenants to fill vacancies [6][12] Group 2: Industry Trends - The trend of repurposing empty anchors has been ongoing for over a decade, with recent data indicating a rebound in mall traffic as these strategies take effect [8][14] - CBL Properties' CEO noted that subdividing former anchor stores has significantly increased revenue, with some locations generating five to six times the previous amounts [11] - The incorporation of experiential categories, such as entertainment and dining, is becoming essential for attracting visitors to malls [13][15] Group 3: Consumer Behavior - Gen Z's affinity for malls as community spaces has been highlighted, with a shift towards seeking in-person experiences post-COVID [13][19] - Malls are increasingly being viewed as destinations for various activities beyond shopping, including seasonal events and dining [15][20] - The nostalgic connection many consumers have with malls is influencing their return, as they seek to recreate memories from their youth [19][20]

Investment Rating - The report maintains a bullish view on AAA and A mall-oriented portfolios owned by Multiplan and Iguatemi, indicating strong performance and growth potential in these segments [1][2][6]. Core Insights - Multiplan malls outperformed Allos malls with an average rent growth of +5% year-over-year, aligning with inflation, while Allos malls experienced a growth of +3.4%, resulting in negative real rent performance [1][6]. - Sales growth for both Multiplan and Allos malls was impacted by the Easter shift, but they grew at the same pace as rent [6]. - AAA malls demonstrated the strongest performance, with a rent growth of +9.4% and nominal sales growth of +9% [7]. - Investor interest in malls has increased, with Brazilian mall stocks rising +26% year-to-date, outperforming the iBovespa index [2]. Summary by Sections Mall Performance Analysis - Multiplan's malls showed a +5% year-over-year increase in rent per square meter, while Allos reported +3.4%, indicating a -1.6% real rent growth for Allos [6][11]. - AAA malls, such as Morumbi Shopping and Barra Shopping, achieved +6% rent growth and +9% nominal sales growth, outperforming A and B tier malls [7][8]. - Allos had a higher percentage of malls with rent increases (90% of NOI) compared to Multiplan (80%), but Multiplan's rent growth for those malls was higher by +100 basis points [7][11]. Market Trends - The implied cap rate spreads for both Iguatemi and Multiplan have compressed significantly, indicating a tightening market, yet they remain above historical averages [2]. - Malls are perceived as rate-sensitive investments, with historical data showing that they were more sensitive to interest rate changes compared to homebuilders prior to the COVID-19 pandemic [2]. Tiered Mall Summary - The report provides a detailed tiered summary of mall performance, highlighting that AAA malls had a monthly rent of BRL 441 and monthly sales of BRL 3,801, with a rent growth of +9.4% [8]. - A tier malls had a monthly rent of BRL 199 and sales of BRL 2,289, with a rent growth of +4.6% [8]. - B and C tier malls showed lower performance metrics, with B malls experiencing a rent growth of +3.3% and C malls declining by -0.9% [8].