CTO Realty Growth(US:CTO)2025-10-29 14:02Financial Data and Key Metrics Changes - The company reported core FFO of $15.6 million for the quarter, an increase of $3 million compared to $12.6 million in the same quarter of the previous year [11] - Core FFO per share was $0.48, down from $0.50 in the comparable quarter of the prior year [11] - Same property NOI increased by 2.3% during the quarter, driven by leasing activity across the portfolio [12] Business Line Data and Key Metrics Changes - Year-to-date leasing activity reached 482,000 square feet, with 424,000 square feet being comparable leasing, achieving a weighted average base rent spread of 21.7% [4] - In the third quarter, the company executed 143,000 square feet of new retail leases, renewals, and extensions at an average base rent of $23 per square foot [4] - The lease percentage of the Shops at Legacy stands at approximately 85% following recent leasing activity [6] Market Data and Key Metrics Changes - The signed-not-open (SNO) pipeline is valued at $5.5 million, representing about 5.3% of annual cash base rents as of quarter-end [5] - Approximately 76% of the SNO pipeline is expected to be recognized in 2026, with 100% in 2027 [5] Company Strategy and Development Direction - The company is focused on enhancing liquidity through recent term loan financings and is actively pursuing acquisitions that align with its leasing and operating strengths [7][9] - The company aims to achieve a positive cash leasing spread of 40%-60% across its vacant anchor spaces [5] - The management is optimistic about the value creation from leasing activities and the potential for earnings growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing progress and the overall operating performance, highlighting strong demand in the retail sector [4][8] - The company anticipates additional deleveraging as vacant anchor boxes are released and tenants in the SNO pipeline commence paying rent [11] - Management noted that the acquisition of the South Florida shopping center is expected to close before year-end, which will further enhance the company's portfolio [7] Other Important Information - The company ended the quarter with approximately $170 million of liquidity, consisting of $161 million available under the revolving credit facility and $9 million in cash [10] - The company repurchased $9.3 million of common stock at a weighted average purchase price of $16.27 per share [10] Q&A Session Summary Question: What is the pro forma debt to EBITDA after the Florida acquisition and revenue from signed-not-open leases? - Management indicated that the Florida asset will be temporarily financed through the line of credit, and the signed-not-open pipeline would reduce debt to EBITDA by about half a turn as it comes online [15] Question: What is the timing for recognizing revenue from the signed-not-open pipeline? - Management expects to recognize about $4 million of the $5.5 million pipeline in 2026, ramping up throughout the year [17] Question: Where is the most significant vacancy currently? - The largest vacancy is a 40,000 square foot space at Carolina Pavilion, with management exploring options to fill it [18] Question: What is the status of structured investments maturing in early 2026? - Management stated that Founders Square will pay off, while Waters Creek may either extend or pay off [21] Question: How is the company approaching capital allocation between buybacks and structured investments? - Management expressed a preference for buying back shares given the current stock price and indicated that they would continue to do so within credit facility restrictions [25] Question: What is the status of leases expiring in the fourth quarter? - Management does not foresee any risk of non-renewal for the leases expiring, as many tenants are below market rent [32] Question: How much of the potential new base rent from anchor box releasing is already set? - Six closed leases represent about $2.5 million of the potential new base rent, with the remaining $2 million contingent on ongoing negotiations [48] Question: Are there any additional acquisitions expected in 2025? - Management does not expect additional acquisitions beyond the South Florida shopping center transaction due to time constraints [50]