CTO Realty Growth, Inc. Q3 FY2024 earnings call

• Leasing Activity: Strong leasing with over 200k sq ft signed, renewals, and extensions. Comparable lease spreads positive. Occupancy increased to 95.8%. Signed but not open pipeline growing.
• Investments: Acquired 3 shopping centers aligning with investment strategy, expanding geographic reach. Structured investments made.
• Financial Results: Core FFO $0.50 per diluted share, AFFO $0.51 per diluted share, both up ~6% from prior year. Same-property NOI grew 6.3%. Dividend paid, guidance raised.

Leasing: In the quarter, signed over 200,000 square feet of new leases, renewals, and extensions at an average rent of $21.17 per square foot. Year-to-date leasing activity was 385,000 square feet at an average rent of $23.74 per square foot. Comparable lease spreads were 12% in Q3 and 26% in the first 9 months of 2024. Ended Q3 with leased occupancy of 95.8%, an increase of 120 basis points from the previous quarter. Signed but not open pipeline stands at $6.5 million in future rents, over 7% of current in-place cash base rent.

Investments: Acquired three open-air shopping centers for $137.5 million, adding almost 900,000 square feet to the portfolio, growing GLA by over 20%. Also grew structured investment portfolio with a $43.8 million first mortgage loan and a $10 million preferred equity investment. Year-to-date investment activity totals almost $275 million at a weighted average yield of 9.1%.

Disposition: Sold Jordan Landing, resulting in 100% of the portfolio being in the Southeast and Southwest.

• Raised full year 2024 core FFO range to $1.83 to $1.87 per diluted share from $1.81 to $1.86 per diluted share.
• Raised AFFO range to $1.96 to $2 per diluted share from $1.95 to $2 per diluted share.
• Increased investment guidance to a new range of $300 million to $350 million.

• Many comments are forward-looking statements; actual results may differ. Factors causing differences disclosed in SEC filings.

Q: Other than the 14% dividend, what's the attractive thing about the $10 million hospitality investment? And what's the collateral if they wind up not being able to pay over the next 5 years?

A: It's a publicly traded company that raised capital, and the CFO was previously at CTO. Collateral is the property.

Q: How are you thinking about funding the raised acquisition guidance?

A: Will use line of sight, monitoring capital markets, and a few smaller deals hoped to close this year.

Q: When does the $6.5 million of signed but not open leasing start to hit FFO?

A: Ratably ramp up over next 9 to 12 months, approximating how it will come online Q: Any known move-outs of note at this point in 2025 in the portfolio?

A: No, nothing that's a problem, more of an opportunity Q: Are you looking at additional structured finance investments?

A: Looking at one smaller, high-quality one close to an asset Q: Should we expect to see any more remaining earnings from real estate operations after sale of mitigation credits?

A: That is in the rearview mirror Q: Collateral underlying the $44 million mortgage investment?

A: All the property, vast majority value in multifamily Q: CapEx spend expected at acquired properties?

A: Leases in place, execution expected to be easy and fast Q: What drove the cap rate on disposition of Jordan Landing?

A: Small property, home issue leading to decision to sell Q: Lease-up of former WeWork space?

A: About a third leased, remainder to be demised, income to hit 2026 Q: Change in retailer demand?

A: Softness in restaurants, but backfills available for second generation space Q: Same-store NOI growth for 2025?

A: A lot of moving parts, wait until end of year for better guidance Q: How do you think about running leverage going forward?

A: Love leverage down, will run up for short duration on acquisition opportunity then rebalance Q: Any assets that may be sold in the future?

A: Some smaller assets like Daytona and Winter Park mixed-use, waiting for market to strengthen