• Same-store NOI Growth: Expected to grow 4.5% in 2024, averaging over 3% for the next three years.

• Curbline Portfolio NOI: Projected to generate approximately $79 million in 2024.

• Dispositions: Closed $170 million of wholly owned property sales year-to-date; total transactions since July 1 under $1.1 billion at a cap rate under 7%.

• Acquisitions: Two convenience properties acquired in Q1 for $19 million; over $100 million more under contract.

• Leased Rate: Down 30 basis points sequentially, with over 350,000 square feet in lease negotiations expected to complete in the next two quarters.

• Q1 Results: Ahead of expectations due to lower G&A, higher occupancy, and lease termination fees.

• Total Portfolio NOI: Curbline at $79 million; SITE at $257 million.

• Interest Income: Over $7 million for the quarter, influenced by cash balance and short-term rates.

• Debt Repurchase: $62 million of unsecured bonds repurchased in Q1, gaining approximately $800,000.

• Balance Sheet Leverage: Debt to EBITDA just over four times, expected to drop below four times pre-spinoff.

• Special Dividend: Paid in January 2024, $0.16 per share, funded with cash on hand.

• Warning! GuruFocus has detected 7 Warning Signs with SITC.

Release Date: April 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: You noted a blended cap rate for $1 billion under contract and negotiation of just under 7%, I believe. Is that in line with your initial expectations for these assets? Or has interest been better than expected.A: David Lukes, President and CEO of Site Centers Corp, responded that the pricing has been a little stronger than expected six months ago, indicating a positive market response.

Q: How should we think of the pacing of dispositions ahead of October first?A: David Lukes explained that the confidence level in the buyers is pretty high, suggesting a decent pipeline for the next few months, but an increase in the pipeline is unlikely.

Q: Last quarter you mentioned there might be a slowing in the pace of convenience acquisitions. Should we assume a few per quarter heading up to the spin?A: David Lukes mentioned that while the focus has been more on dispositions due to higher demand, a couple of acquisitions per quarter leading into the spin is likely appropriate.

Q: Have you seen or had any shifting conversations with people who you thought you're going to get under contract or under LOI given any issues in the debt markets?A: David Lukes, President and CEO, noted that the impact of capital markets volatility on cap rates has been pretty muted to date, with a significant amount of demand still present.

Q: What will SITE look like on October second post-spin, and who will be running SITE and Curb?A: David Lukes indicated that some executives will have dedicated roles and some dual roles, with specifics to be announced closer to the spin date.

Q: Can you comment on whether there is a shift in the interest level for retail centers from new private equity and institutional investors?A: David Lukes observed a surprising depth of demand from institutional investors and private wealth, particularly from local and regional families, which has been active in open-air shopping centers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.