Q4 2021 RPT Realty Earnings Call

Speaker 1: Greetings and welcome to the RPT Realty Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session...

Greetings and welcome to the RPT Realty fourth quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.

And answer session.

Speaker 1: We'll follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Vinh Chau, Managing Director of Finance and Investments.

We will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Vin Chao managing director of Finance and investments. Please proceed.

Speaker 2: Good morning and thank you for joining us for RPT's fourth quarter 2021 earnings conference call. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Additionally, statements made during the call are made as of the date of the call.

Good morning, and thank you for joining us for Rpt's fourth quarter 2021 earnings Conference call. At this time management would like me to inform you that certain statements made during this conference call, which are not historical maybe deemed forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995. Additionally statements made during the call are made as of the date of this call.

Speaker 2: Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made. Although we believe that the expectations reflected in any forward-looking statement.

Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made although we believe that the expectations reflected in any forward looking statements.

Speaker 2: are based on reasonable assumptions, factors and risks could cause actual results that differ from expectations.

Are based on reasonable assumptions.

And risks could cause actual results to differ from expectations certain of these risk factors are described as risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2021, there'll be filed filed later today and in our earnings release for the fourth quarter of 2021 certain of these statements made on today's call also involve non-GAAP financial measures listeners are.

Speaker 2: Certain of these risk factors are described as risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2021. That will be filed later today and in our earnings release for the fourth quarter 2021. Certain of these statements made on today's call also involve non-GAAP financial measures. Listeners are directed to our fourth quarter 2021 and third quarter 2021 press releases which include definitions of those non-GAAP measures and reconciliations of the nearest GAAP measures and which are available on our website in the investors section.

Wrecked into our fourth quarter 2021, and third quarter of 2021 press releases, which include definitions of those non-GAAP measures and reconciliations to the nearest GAAP measures and which are available on our website in the investors section I would like to now turn the call over to President and CEO , Brian Harper and CFO , Mike Morris for their opening remarks, after which we will open the call for questions.

Speaker 2: I'd like to now turn the call over to President and CEO Brian Harper and CFO Mike Morris for their opening remarks after which we will open the call for.

Speaker 3: Thanks, Ben. Good morning, and thank you for joining our call today.

Thanks Vin.

Morning, and thank you for joining our call today.

Speaker 3: 2021 was a transformational year for RPT across all areas of our business, and we are in better position today than we ever have been in RPT's history to grow earnings and create value for our shareholders.

2021 was a transformational year for RPT across all areas of our business and we are in better position today than we ever have been in Rpt's history to grow earnings and.

Right value for our shareholders.

Speaker 3: Compared to 2020, we expect to grow 2022 operating FFO by a robust 32%, primarily driven by strong operating performance, accretive acquisitions, and fee income.

Compared to 2020, we expect to grow 2022 operating <unk> by a robust 32%, primarily driven by strong operating performance accretive acquisitions and fee income.

Speaker 3: We created another growth lever in our fund business with the formation of our net lease platform to take advantage of dislocations between multi-tenant and single-tenant valuations and to enhance our management fee income stream.

We created another growth lever in our fund business with the formation of our net lease platform to take advantage of dislocations between multi tenant and signaled tenant valuations and to enhance our management fee income stream.

Speaker 3: Through our data-driven approach, we were the top buyer of open-air shopping centers in 2021, with Boston becoming our third largest market in less than a year, vastly improving our geographic footprint and portfolio quality.

Through our data driven approach we were the top buyer of open air shopping centers in 2021, with Boston, becoming our third largest market and less than a year vastly improving our geographic footprint and portfolio quality.

Speaker 3: We lease more space than we have in any year since 2016, and we reported our fourth consecutive year of new lease spreads of 20% or more.

We leased more space than we have in any year since 2016, and we reported our fourth consecutive year of new lease spreads of 20% or more.

Speaker 3: We significantly upgraded our tenancy by replacing weaker credits with top investment grade rated tenants in many cases while our sign not commence backlog continues to accelerate.

We significantly upgraded our tenancy where by replacing weaker credits with top investment grade rated tenants in many cases, why our signed not commenced backlog continues to accelerate.

Speaker 3: We assessed all types of capital, including equity, debt, and joint venture capital, totaling $1.1 billion, while addressing a significant amount of our debt maturities through 2025.

We assessed all types of capital, including equity debt and joint venture capital totaling 1.1 billion, while addressing a significant amount of our debt maturities through 2024.

Speaker 3: That was the case since our current senior management team joined RPT over three years ago. Our actions in 21 were done through the lens of setting up RPT.

As was the case since our current senior management team Joy joined RPT over three years ago, our actions in 'twenty, one were done through the lens of setting up RPT for bottom line earnings growth and NAV growth over the next few years that we believe will lead the sector.

Speaker 3: bottom line earnings growth and NAV growth over the next few years that we believe will lead the sector.

Starting with investments.

Speaker 3: Through our strategic investment platforms, we got an early start on the acquisition.

Through our strategic investment platforms, we got an early start on the acquisition front and we were able to successfully close and almost $550 million of gross multi tenant acquisitions in 2021.

Speaker 3: and were able to successfully close on almost 550 million of gross multi-tenant acquisitions in 2021.

Speaker 3: The timing of our acquisitions could not have been better as we used a COVID-induced downturn to curate a portfolio of 10 high-quality assets in strong markets and attractive capital.

The timing of our acquisitions could not have been better as we use a COVID-19 induced downturn to curated portfolio of 10 high quality assets in strong markets at attractive cap rates.

Speaker 3: Based on today's market comps and our performance against underwriting, we think these assets would trade about 70 basis points tighter than where we bought them, highlighting the opportunistic timing of buying into the short window before cap rates compress considerably.

On today's market comps and our performance against underwriting we think these assets would trade at about 70 basis points tighter than where we bought them highlighting the opportunistic timing of buying into the short window before cap rates compressed considerably.

Speaker 3: In addition, we believe we have a competitive advantage that our data science approach provides us when evaluating acquisition.

In addition, we believe we have a competitive advantage that our data science approach provides us when evaluating acquisitions.

Speaker 3: Over the past several months, we have invested in talent and technology to assess risks, analyze evolving trends, and to better project the future success of a property.

Over the past several months, we have invested in talent and technology to assess risk.

Analyze evolving trends in the better project the future success of our property.

Speaker 3: In the long run, this data-driven approach will optimize our capital allocation decision-making.

In the long run this data driven approach will optimize our capital allocation decision, making.

Clearly it happen in 'twenty one.

Speaker 3: Let me put the benefits of our 21 acquisitions into perspective.

Let me put the benefits of our 21 acquisitions into perspective.

Speaker 3: In just one year, we increased our exposure to the vibrant and growing markets of Boston, Atlanta, Tampa, and Nashville by 12%.

Just one year, we increased our exposure to the vibrant and growing markets, Boston, Atlanta, Tampa and Nashville by 12%.

Speaker 3: while reducing our exposure to Chicago, Detroit, and Cincinnati by 8%.

Reducing our exposure to Chicago, Detroit, Cincinnati by 8%.

Speaker 3: Keep in mind, this was done on an earnings accretive basis with our net

And keep in mind. This was done at an earnings accretive basis with our net acquisition activities.

Speaker 3: including joint venture fees and preferred income, contributing about 8 cents of operating FFO growth in 2021.

<unk> joint venture fees and preferred income contributing about <unk> <unk> of operating <unk> growth in 'twenty one.

Speaker 3: Our 21 acquisitions were also high quality featuring strong grocer anchor tenants such as Wagmans and Whole Foods with sales performance of $775 per square foot.

Our 21 acquisitions were also high quality featuring strong grocery anchored tenants such as wegmans and whole foods with sales performance of $775 per square foot.

Speaker 3: We expect these acquisitions to generate well above trend annual NOI growth of approximately 6% over the next three years.

We expect these acquisitions to generate well above trend annual NOI growth of approximately 6% over the next three years primarily.

Speaker 3: primarily driven by leases signed or in advanced negotiation that have yet to commence totaling $1.6 million in ABR and estimated recovery income.

Primarily driven by leases signed or are in advanced negotiation, so have yet to commence totaling $1 6 million and a b or an estimated recovery income.

Speaker 3: During the fourth quarter, we closed on the acquisition of Highland Lakes in Tampa for $15 million.

During the fourth quarter, we closed on the acquisition of Highland Lakes in Tampa for $15 million.

Speaker 3: The current occupancy is just 51%, but during underwriting, we were able to secure a new lease with a Premier AA rated grocer to replace the former Steinmark box, which will increase occupancy to over 95% upon commencement of the new lease.

The current occupancy is just 51%, but during underwriting we were able to secure a new lease with a premier double a rated grocer to replace a former Stein Mart box, which will increase occupancy to over 95% upon commencement of the new lease.

Speaker 3: This is a great example of the kind of value creation opportunities that we are looking for when we can buy vacancy and utilize our strong leasing platform to generate 150 basis point spread between the stabilized yield of the center and current market cap rate.

This is a great example of the kind of value creation opportunities that we are looking for when we can buy vacancy and utilize our strong leasing platform to generate 150 basis point spread between the stabilized yield at the center and current market cap rates.

Speaker 3: We also closed in the Dedham Shopping Center in Boston through our grocery-focused joint venture platform.

We also closed on the denim shopping center in Boston through our grocery focused joint venture platform.

Speaker 3: This is a great infill property that sits inside the Boston 128 loop and is anchored by a high volume stop and shop that ranked amongst the top 2% of US shopping centers for traffic in 2020.

This is a great infill property that sits inside the Boston 128, Lube and is anchored by a high volume stop and shop that ranked amongst the top 2% of U S shopping centers for traffic in 2020.

Speaker 3: TJX and Dix also do extremely well here.

T J accident decks also do extremely well here. The center features strong demographics with three mile household income of $136000 and population density of 109000 and is a great addition to our Boston portfolio.

Speaker 3: center features strong demographics with three-mile household income of $136,000 and population density of 109,000 and is a great addition to our boss.

Speaker 3: We already have a signed lease with the 25,000 square foot marquee retailer that we look forward to announcing.

We already have a signed lease with a 25000 square foot marquee retailer that we look forward to announcing soon.

Speaker 3: Looking forward, we expect to remain active on the investment.

Looking forward, we expect to remain active on the investment front, our industry, leading acquisition volume in 'twenty. One has led to increased deal flow now, though cap rates have compressed our three investment platforms provide us with a competitive advantage through enhance yields.

Speaker 3: Our industry leading acquisition volume in 2021 has led to increased deal flow. Although cap rates have compressed, our three investment platforms provide us with a competitive advantage through enhanced yields.

Speaker 3: We have a deep acquisition pipeline with a variety of opportunities ranging from portfolio deals where we can allocate properties across our platforms, to larger centers where we can enhance returns by selling parcels to our net lease joint venture.

We have a deep acquisition pipeline with a variety of opportunities ranging from portfolio deals, where we can allocate properties across our platforms to larger centers, where we can enhance returns by selling parcels to our net lease joint venture.

Speaker 3: We're also looking at smaller grocery anchored centers and more granular opportunities in high income infill suburbs. We're existing metros where we...

We're also looking at smaller grocery anchored centers and more granular opportunities and high income infill suburbs, where existing metros, where we already have scale.

Speaker 3: For instance, we are looking at some smaller opportunities outside Cambridge, Massachusetts, where we could curate a portfolio over time.

For instance, we are looking at some smaller opportunities outside of Cambridge, Massachusetts, where we could cure it a portfolio over time.

Speaker 3: with well above portfolio average incomes and then.

With well above portfolio average incomes and densities.

Speaker 3: These properties are currently owned by mom and pops, so we could realize significant NOI growth.

These properties are currently owned by mom and Pops, but we could realize significant NOI growth.

Speaker 3: We're also looking at a high barrier to entry center north of Boston that has two high performing grocers with tenant sales that would be in the top 5% of our portfolio and where we could enhance our yield by selling out parcels to the net lease joint venture.

We're also looking at a high barrier to entry center North of Boston that has two high performing grocers with tenant sales that would be in the top 5%.

Our portfolio and where we could enhance our yield by selling out parcels to the <unk> joint venture.

Speaker 3: In our net lease platform, we closed on $191 million of single tenant net lease properties in 2021.

And our net lease platform, we closed on $191 million of single tenant net lease properties in 'twenty. One we now see opportunities to acquire multi tenant centers outside of Rpt's target markets like we did with our mountain Valley acquisition.

Speaker 3: We now see opportunities to acquire multi-tenant centers outside of RPT's target markets like we did with our Mountain Valley acquisition.

Speaker 3: The inclusion of multi-tenant properties increases the platform's pipeline while preserving the ability to realize multi to single tenant arbitrage opportunities.

The inclusion of multi tenant properties increases the platform's pipeline, while preserving the ability to realize multi to single tenant arbitrage opportunities.

Speaker 3: We expect Tyler and his team to be very busy this year.

We expect Tyler and his team to be very busy this year.

Speaker 3: As we discussed last quarter, the froth we are seeing is also allowing us to revisit potential asset recycling opportunities where we can redeploy proceeds from slower growth markets into higher and better uses like we did with our Market Plaza and Webster Place sales in Chicago, which is a weaker market in our scoring model.

As we discussed last quarter. The froth, we're seeing is also allowing us to revisit potential asset recycling opportunities, where we can redeploy proceeds from slower growth markets into higher and better uses like we did with our market Plaza and Webster place sales in Chicago, which is a weaker market and our scoring model.

Speaker 3: Regarding Webster, after evaluating a multitude of densification and leasing scenarios...

Regarding Webster after evaluating a multitude of densification and leasing scenarios.

Speaker 3: We concluded that we could realize the vast majority of the expected value without any development or leasing risk by selling it and deploying the proceeds into higher risk-adjusted return opportunities.

We concluded that we could realize the vast majority of the expected value without any development or leasing risk by selling it and deploying the proceeds into higher risk adjusted return opportunities.

Speaker 3: At Market Plaza, we simply felt that we had harvested the NOI upside in the asset and selling at a 5.6 cap rate was the best interest of our shareholders.

Our market Plaza, we simply felt that we had harvest the harvest said the NOI upside in the asset and selling it at a 5.6 cap rate was the best interests of our shareholders.

Speaker 3: In both cases, the data and our expected IRRs governed our decisions and we are pleased with the execution.

Both cases, the data and our expected irr's governed our decisions and we are pleased with the execution.

Speaker 3: Given the disconnect between public and private market values, dispositions are an attractive source of capital that also allows us to further reshape and improve our portfolio quality.

Given the disconnect between public and private market values dispositions are an attractive source of capital, but also allows us to further reshape and improve our portfolio quality.

Speaker 3: As Mike will detail later, we have embedded about $100 million of dispositions in non-core markets in our 2022 outlook, which will be match funded with about $125 million of projected acquisition.

As Mike will detail later, we have embedded about $100 million of dispositions and noncore markets and our 2022 outlook, which we match match funded with about $125 million projected acquisitions.

Speaker 3: Turning to leasing, while no one wishes COVID happened, the pandemic has reinforced the importance of brick and mortar to the overall retail distribution channel and has fueled a renaissance of tenant demand.

Turning to leasing while no one wishes COVID-19 happened the pandemic has reinforced the importance of brick and mortar to the overall retail distribution channel and that's fueled a renaissance of tenant demand.

Speaker 3: We are currently in the midst of the strongest leasing environment that I have ever seen in my career.

We are currently in the midst of a strongest leasing environment that I've ever seen in my career.

Speaker 3: Demand is broad-based across all property types, geographies, and tenant categories.

Demand is broad based across all property types geographies and tenant categories.

Speaker 3: During the quarter, we signed 385,000 square feet at nearly $20 per square foot, representing a 25% increase over our portfolio average.

During the quarter, we signed 385000 square feet at nearly $20 per square foot, representing a 25% increase over our portfolio average for.

Speaker 3: For the year, we signed 1.7 million square feet of leases, which is the highest annual level since 2016, and validates our high quality, in-demand portfolio.

For the year, we signed one 7 million square feet of leases, which is the highest annual level since 2016 and validates our high quality in demand portfolio.

Speaker 3: We continue to unlock the embedded growth potential in the portfolio as evidenced by the robust 33% new lease, 9% blended spread we achieved.

We continue to unlock the embedded growth potential in our portfolio as evidenced by the robust 33% new lease 9% blended spread we achieved.

Speaker 3: Our strong leasing performance during the year and in the fourth quarter drove our sign that open backlog to 6.9 million.

Our strong leasing performance during the year and then the fourth quarter drove our signed not open back backlog to $6 9 million.

Speaker 3: In addition to our growing S&O pool, we are also in advanced negotiations with grocers,

In addition to our growing U S. N O pool, we are also in advanced negotiations with grocers.

Speaker 3: exciting fast casual concepts, boutique fitness, wholesale clubs, and more on leases totaling 3.3 million in incremental ABR and estimated recovery income.

Exciting fast casual concepts boutique fitness wholesale clubs and and more on leases totaling $3 3 million in incremental a b or an estimated recovery income.

Speaker 3: equally important to locking in attracted economics of the quality improvements we were able to achieve by replacing weaker credit tenants for stronger.

Equally important to locking in attractive economics, and quality improvements, we were able to achieve by replacing weaker credit tenants for stronger ones.

Speaker 3: We were also able to increase our ABR from centers to the brochure to 71% from 65% in 2019. Overall,

We're also able to increase our ABR from centers with a grocer to 71% from 65% in 2019.

Overall, our Tennessee continues to get stronger.

Speaker 3: We are turning Airtime Trampoline and Game Park, Shopper's Food Warehouse, Lane Bryant and Sky Mart into a AA-rated grocer, Giant Ahold, REI, Sephora, Burlington and Ferguson.

Returning airtime Transplanting game Park shoppers food warehouse Lane Bryant and Stein Mart into a double a rated grocery giant household Rei Sephora Burlington and Ferguson.

Speaker 3: As you can see on page 17 of our investor deck on our website, the rent for these new tenants is about double what they are replacing and cap rate compression for these assets is about 50 to 75 basis.

As you can see on page 17 of our investor deck on our website. The rent for these new tenants is about double what they are replacing and cap rate compression for these assets. It's about 50 to 75 basis points, both metrics representing significant value creation.

Speaker 3: both metrics representing significant value creation.

Speaker 3: As leases come online, you will see that our top tenancy will begin to change more materially as signed leases come out.

As leases come online you will see that our top tenancy will begin to change more materially as signed leases commence.

Speaker 3: Including signed leases and one in advanced negotiation, the previously mentioned premier investment gate grocer is expected to become a top five tenant upon rent commences.

Including signed leases and one in advanced negotiation. The previously mentioned Premier investment grade grocer is expected to become a top five tenant upon rent commencement.

Speaker 3: We also continue to think creatively about the highest and best use of our properties to maximize value.

We also continue to think creatively about the highest and best use of our properties to maximize value.

Speaker 3: We recently executed an agreement with DeBarto Develop.

We recently executed an agreement with Debartolo development.

Speaker 3: Upon completion of certain closing conditions, including obtaining entitlements, we will enter into a joint venture with them to build a roughly 300 unit multi-family property on undeveloped land next to our parkway shops in Jacksonville, Florida.

Upon completion of certain closing conditions, including obtaining entitlements, we will enter into a joint venture with them to build a roughly 300 unit multifamily property on undeveloped land next to our Parkway shops in Jacksonville, Florida.

Speaker 3: We will contribute the land in $500,000 for a 50% equity stake in the venture.

We will contribute the land and 500000 hours for our 50% equity stake in the venture.

Speaker 3: Sticking with development, we're working on an exciting redevelopment plan at Marketplace at Delray, which sits in the highly desirable Delray Beach submarket.

Sticking with development, we're working on an exciting redevelopment plan at marketplace at Delray what sits in the highly desirable.

Delray Beach Submarket of Miami.

Speaker 3: We are seeing robust tenant demand here, given the quality of the real estate and the strength of the market.

We are seeing robust tenant demand here given the quality of the real estate and the strength of the market.

Speaker 3: We are also set to break ground in a few weeks at our Crossroads property in the Miami Mart.

We are also set to break ground in a few weeks at our crossroads property in the Miami market.

Speaker 3: Here we are demolishing the existing public store and building them a new larger prototype that better serve their customers.

Here, we are demolishing the existing public store and building them, a new larger prototype to better serve their customers total cost is $4 4 million with expected return on costs of 6% to 8%. Please.

Speaker 3: Total cost is $4.4 million with expected return on costs of 6 to 8 percent. Please see page 21 of our supplemental.

Please see page 21 of our supplemental for further detail.

Speaker 3: Finally, we have also identified an opportunity at our Hunter Square asset in Oakland County, Michigan, where we expect to redevelop the north side of the city.

Finally, we have also identified an opportunity that our Hunter square asset in Oakland County, Michigan, where we expect to redevelop the north side of the center.

Speaker 3: We have strong interest from a major investment-rated grocer to anchor the project for us.

Strong interest from a major investment grade right.

Grocer to anchor the project for us.

Speaker 3: We expect to share more details on the scope, cost, yields, and timing over the next quarter or two.

We expect to share more details on the scope cost yields and timing over the next quarter or two.

So we look forward in 2022 will be very active on all capital allocation fronts.

Speaker 3: As we look forward in 2022, we will be very active on all capital allocation.

Speaker 3: acquisitions across all three of our investment platforms, opportunistic dispositions, and continued investment in leasing and development.

Acquisition acquisitions across all three of our investment platforms opportunistic dispositions and continued investment in leasing and development.

Speaker 3: all of which will drive future earnings and NAV growth.

All of which will drive future earnings and NAV growth.

Speaker 3: With that, I'll turn the call over to Mike to review our quarterly results and provide color on our 2022 outlook.

With that I'll turn the call over to Mike to review, our quarterly results and provide color on our 2022 outlook.

Speaker 4: Thanks, Brian . Good morning, everyone. Today we'll discuss our fourth quarter 2021 operating and financial results in more detail, recap our financing activities for the year, and end with commentary to help everyone understand the growth drivers for our 2022 earnings outlook.

Thanks, Brian and good morning, everyone today, I will discuss our fourth quarter 2021 operating and financial results in more detail.

Recap our financing activities for the year.

And I know the commentary to help everyone understand the growth drivers for our 2022 earnings outlook.

Speaker 4: Fourth quarter operating FFO per share, 25 cents, was down 2 cents from last quarter primarily due to higher than expected G&A, due to our above target performance against our short-term incentive plan, partially offset by NOI from acquisition.

Fourth quarter operating <unk> per share of 25 cents was down two from last quarter, primarily due to higher than expected G&A due to our above target performance against our short term incentive plan.

Partially offset by NOI from acquisitions.

Speaker 4: For the year, we reported operating FFO per share of 90 to 5 cents, a 22% increase over 2020's results, and about a penny above the high end of our guidance range, primarily driven by higher, same property and Y.

For the year, we reported operating <unk> per share of <unk> 95 cents, a 22% increase over 2000 Twenty's results in about a penny above the high end of our guidance range, primarily driven by higher same property NOI.

Speaker 4: Collections continue to improve with 99% of fourth quarter rent collected up from 98% of third quarter rent collected as reported on our third quarter call.

Collections continue to improve with 99% of fourth quarter rent collected up from 98% of third quarter rent collected as reported on our third quarter call.

Speaker 4: And collection of deferrals continues to exceed our expectations. To date, all material tenants are in compliance with their rent relief agreements, and we only have about $2.5 million of deferred rent, net of reserves yet to be collected.

Collection of deferrals continues to exceed our expectations today, all material tenants are in compliance with their rent relief agreements and we only have about two and a half million of deferred rent net of reserves you have to be collected.

Speaker 4: As Brian mentioned, we had a strong finish to the year as operating fundamentals for our portfolio continue to strengthen.

As Brian mentioned, we had a strong finish to the year as operating fundamentals for our portfolio continue to strengthen we signed 44 comparable leases totaling 230000 square feet at a blended releasing spread of 13%, including a 73% new lease spread and a 7% renewals.

Speaker 4: signed 44 comparable leases, totally 230,000 square feet, at a blended releasing spread of 13%, including a 73% new lease spread and a 7% renewal spread.

Speaker 4: Our newly spread is at its highest quarterly level since the 2nd quarter of 2018, while renewal spreads have steadily increased for the 7th consecutive quarter. As we look at...

Brett.

Our new lease spread is at its highest quarterly level since the second quarter of 2018, while our renewal spreads have steadily increased for the seventh consecutive quarter.

As we look ahead in 2022.

Speaker 4: We expect our new leasing spreads to continue to be in the double digits, demonstrating the continued mark-to-market opportunity in our portfolio.

We expect our new leasing spreads continue to be in the double digits, demonstrating the continued mark to market opportunity in our portfolio.

Speaker 4: Our lease rate ended the quarter at 93.1% up about 60 basis points from last quarter. Our small shop lease percentage is up to 85%, 100 basis points sequential increase in the quarter demonstrating progress to our long-term goal of 91 to 92%. Key categories of demand include boutique fitness, fast casual and service.

Our lease rate ended the quarter at 93, 1% up about 60 basis points from last quarter, our small shop lease percentage is up to 85% Hunter basis points sequential increase in the quarter demonstrating progress toward our long term goal of 91% to 92% key categories of demand include boutiques.

Fitness fast casual and service.

Speaker 4: We ended the year with a signed out open backlog, including leases and advance lease negotiations of 10.2 million or 11 cents per share of operating FFO. In terms of cadence, the annual incremental benefit is 4 cents per share in 2022.

We ended the year with signed not open backlog, including leases in advanced lease negotiations of $10 2 million or <unk> 11 per share of operating <unk> in terms of cadence the annual incremental benefit four cents per share in 2022.

Speaker 4: five cents in 2023 and two cents in 2024. Clearly this is providing a visible tailwind to Ernie.

<unk> in 2023, and two cents in 2024, clearly this is providing a visible tailwind to earnings setting us up for strong growth over the next few years and this of course is absent any incremental growth from our external investment platforms.

Speaker 4: setting us up for strong growth over the next few years. And this, of course, is absent any incremental growth from our external investment platform.

Speaker 4: Turning to the balance sheet liquidity, it was a very busy quarter on the capital markets front. As one of our core tenants to our balance sheet strategy, we continue to proactively and opportunistically address near-term debt maturity.

Turning to the balance sheet and liquidity it was a very busy quarter on the capital markets front. It's one of our core tenants to our balance sheet strategy, we continue to proactively and Opportunistically address near term debt maturities.

Speaker 4: During the quarter and prior to the jump in interest rates, we raised $130 million in nine- and ten-year private placement bonds at a blended rate of 3.75 percent to replay 2023 and 2024 debt maturities, adding about a year of duration to our balance sheet and leaving only about 20 percent of maturing debt through 2024 with no maturities in 2022.

During the quarter and prior to the jump in interest rates, we raised 130 million and nine and 10 year private placement bonds at a blended rate of $3 75 per cent to repay 'twenty 'twenty, three and 'twenty 'twenty four debt maturities, adding about a year of duration to our balance sheet and leaving only about 20% of maturing debt.

Through 2024 with no maturities in 2022. In addition, we closed on $80 million of mortgage debt within our grocery anchored joint venture with GIC. We're very pleased with the weighted average tenor of nine years and an interest rate of under 3%.

Speaker 4: In addition, we close on $80 million of mortgage debt within our grocery-anchored joint venture with GIC. We are very pleased with a weighted average tender of nine years and an interest rate of under 3%.

Speaker 4: On the disposition front, we sold two 9-core assets in the Chicago market for just under $60 million at a weighted average cap rate of under 4%. As a result, we ended the year with $14 million of cash and nearly full availability on our revolver leaving us with total liquidity of approximately $329 million.

On the disposition front, we sold two non core assets in the Chicago market for just under $60 million at a weighted average cap rate of under 4%. As a result, we ended the year with 14 million of cash and nearly full availability on our revolver, leaving us with total liquidity of approximately $329 million.

Speaker 4: We continue to manage leverage very carefully. We enter the fourth quarter with net debt to annualized adjusted EBITDA of 6.8 times, flat from last quarter.

We continue to manage leverage very carefully we ended the court the fourth quarter with net debt to annualized adjusted EBITDA of six eight times flat from last quarter.

Speaker 4: However, including our sign-on commence backlog of 10.2 million that I referenced earlier, our leverage would be 6.3 times.

However, including our signed not commenced backlog of $10 2 million that I referenced earlier, our leverage would be $6. Three times, we continue to expect our leverage to fall towards our target range of five and a half of six and a half times as we drive occupancy towards stabilized, 95% occupancy level and continue to capture our.

Speaker 4: We continue to expect our leverage to fall towards our target range of five and a half to six and a half times as we drive occupancy towards a stabilized 95% occupancy level and continue to capture our embedded mark-to-market opportunity.

Embedded mark to market opportunity.

Speaker 4: And we will also look for opportunities to accelerate this trajectory through various capital allocation options.

And we will also look for opportunities to accelerate this trajectory through various capital allocation options.

Speaker 4: Moving on to our initial 2022 outlook, we are establishing our guidance range of $1 to $1.05 per share, representing 8% growth at the midpoint and 11% growth at the high end. Let's begin with the Eternal Drive.

Moving on to our initial 2022 outlook. We are established in our guidance range of a dollar to $1 five per share representing 8% growth at the midpoint and 11% growth at the high yeah, let's begin with the internal drivers.

Speaker 4: Same property NOI growth is expected to be 3% to 5%, which excludes net impact bad debt reversals in 2021 related to prior periods. This growth is primarily driven by occupancy, which we expect to increase to approximately 91.5% to 92% by the end of the year. Our same property NOI outlook in 2022 embeds about 100 basis points of bad debt as a percentage of same property NOI.

Same property NOI growth is expected to be 3% to 5%, which excludes the net impact bad debt reversal in 2021 related to prior periods. This growth is primarily driven by occupancy, which we expect to increase to approximately 91.5% to 92% by the end of the year our same property NOI.

My outlook in 2022 embed about 100 basis points of bad debt as a percentage of same property NOI.

Speaker 4: Regarding G&A expense, and as I mentioned last quarter, we expect it to be plus or minus $34 million or $8.5 million per quarter.

Regarding G&A expense and as I mentioned last quarter, we expect it to be plus or minus 34 million or eight and a half million dollars per quarter. It's important to note that we do not forecast spec termination revenue or future reversals of prior period reserves, which in total contributed <unk> <unk> per share in 2000.

Speaker 4: It is important to note that we do not forecast spec termination revenue or future reversals of prior period reserves, which in total contributed $0.03 per share in 2021.

'twenty one.

Speaker 4: Let's now move to the external drivers. External assumptions underpinning our 2022 operating FFO guidance range are comprised of acquisitions, fee income,

Let's now move to the external drivers external assumptions underpinning our 2022 operating <unk> guidance range are comprised of acquisitions.

Income and dispositions, we are assuming plus or minus $125 million of acquisitions that we expect to close during the second and third quarters of this year in terms of dispositions, we have embedded about plus or minus $100 million, which is expected to close were ratably over the course of 2022.

Speaker 4: We are assuming plus or minus 125 million of acquisitions that we expect to close during the second and third quarters of this year. In terms of dispositions, we have embedded about plus or minus 100 million, which is expected to close radically over the course of 2022.

Speaker 4: Fee and preferred income related to our joint venture platforms is expected to be up approximately two pennies over 2021 due to the annualization of acquisitions in our grocery-anchored and net lease investment platform.

Fee and preferred income related to our joint venture platforms is expected to be up approximately two pennies over 2021 due to the annual nation of acquisitions in our grocery anchored and that lease investment platforms. As we look out over the coming years, we expect to generate an additional five cents of F O.

Speaker 4: As we look out over the coming years, we expect to generate an additional 5 cents of FFO annually upon full deployment of committed capital between our joint venture platforms.

Annually upon full deployment of Kip committed capital between our joint venture platforms and.

Speaker 4: As for the shape of Operating FFO, we expect it to decelerate in the first half of the year and re-accelerate in the second half of the year.

So the shape of operating <unk>, we expect it to decelerate in the first half of the year and Reaccelerate in the second half of the year.

Speaker 4: The deceleration is a result of the planned re-merchandising of a handful of anchor spaces that already have signed backfills in addition to disposition timing. The re-acceleration in the second half is a result of the sign-not-commence coming online in addition to acquisition timing.

Celebration as a result of the planned re merchandising of a handful of anchor spaces that already have signed backfill. In addition to disposition timing the reacceleration in the second half as a result of the signed not commenced coming online in addition to acquisition timing.

Speaker 4: And with that, I will turn the call back to the operator to open the line for questions.

And with that I will turn the call back to the operator to open the line for questions.

Speaker 1: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question and answer session.

At this time well be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question kill you.

Speaker 1: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we...

You May press star two if he would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star one moment. Please while we poll for question.

Speaker 1: Our first question comes from Derek Johnson with Deutsche Bank. Please proceed with your question.

Our first question comes from Derek Johnson with Deutsche Bank. Please proceed with your question.

Speaker 5: Hi everyone, thank you, good morning. Brian , can you discuss the Net Acquisition and Dispo Guide? I mean last year was very active with over 500 million between On Balance Sheet, R2G, you know, RGMZ and then RGMZ also had some meaningful contributions. But you know, I was hoping you could expand on the Net Acquisition Guide for 22, you know, both On Balance Sheet and with partners, especially since the initial guide is lower than last year's pace.

Hi, everyone. Thank you good morning.

Brian can you discuss the net acquisition and dispose guide I mean last year was very active with over 500 million between on balance sheet are two G. R. G. N Z and then R. J M. D. Also had some meaningful contributions, but I was hoping you could expand on the net acquisition guide for 'twenty two.

On balance sheet, having with partners, especially since the initial guidance is lower than last year's pace.

Speaker 3: Sure, and good morning Derek. I wouldn't read anything into our acquisitions guidance. This is something we typically don't guide to. We didn't last year and you saw those results. The $125 million represents just really what we have visibility on or basically what's in contract or awarded to us at this time.

Sure and good morning, Derek I wouldn't read anything into our acquisitions guidance. So this is something we typically don't guide to we didn't last year end.

You saw those results.

The 125 million Ah represents just really what we have visibility on are basically what's in contract are awarded to us at this time.

Speaker 3: What can I tell you is the following. We are extremely focused on investments. We are as much of an investments company as we are a leasing operations company. We have two investment deal pipeline meetings a week. We have three platforms to deploy. Balance Sheet, Grocer JV, which we recently got a $500 million upsize. And our fund business, which we have $1.1 billion to deploy.

What can I tell you is is it is the following we are extremely focused on investments we are as much a investments company as we are a leasing operations company. We have two investment deal pipeline meetings, a week, we have three platforms to deploy balance sheet grocery JV, which we recently got a $500 million of ups.

Size, and our fund business, which we have $1 1 billion to deploy.

Speaker 3: And as I said earlier, we are looking at all product types now, from grocer to last mile slash power credit centers, shadow anchor, and even infill street retail into our core market.

And as I said earlier, we're looking at all product types now from grocer to last mile Slash power credit centers Shadow anchor and even infill street retail into our core markets.

Speaker 3: It's definitely competitive out there, but as we've shown with our decentralized approach, we are uncovering a lot of unique off-market opportunities where we can immediately add value similar to the Highland Lakes deal where we sign the AA investment grade brochure simultaneously to close.

Definitely combat it is out there, but as we've shown with our decentralized approach. We are uncovering a lot of unique off market opportunities, where we can immediately add value similar to the Highland Lakes deal, where we signed the double a investment grade grocer simultaneously to close I could say to Oh.

Speaker 3: I could say too, obviously cap rates are compressing in all product types, but with our three platforms that we set up and spent a lot of time setting these up, we are seeing ways to create outsize yields with the moat we created with those platforms.

Obviously cap rates are compressing in all product types, but with our three platforms that we set up and spent a lot of time setting. These up we are seeing ways to create outsize yields with the moat, we've created with that plan with those platforms.

Speaker 3: We're also seeing higher unlevered IRRs into the high single digits because of our ability to apply instant value creation with our deep Rolodex of tenants.

Also seeing higher Unlevered IRR is at the high single digits because of our ability to apply instant value creation with our deep rolodex of paths.

Speaker 3: You know, investments, Derek, is something where I'm personally focused on and energized on all fronts, especially coming off a large year of capital deployment.

You know investments Derek is is something where I'm personally focus on and energized on all fronts and this you know, especially coming off a large year of capital deployment.

Speaker 5: No, Brian , thank you. That's very, very helpful and insightful.

No Brian . Thank you, that's very very helpful and insightful.

Speaker 4: All right, I guess the second question was hoping you could expand on the contribution and development agreement to the 300-unit multifamily at Parkway. I mean, first off, it seems like a good basis for a 50% equity in the JV. And is this a new growth avenue RPT is now tapping or more of a one-off deal? How do you view this opportunity set given your portfolio?

Alright, I guess the second question was hoping you could expand on the contribution and development agreement with the 300 unit multifamily at Parkway I mean first off it seems like a good basis for a 50% equity in the JV and is this a new growth Avenue RPT.

He is now tapping or more of a one off deal how do you view this opportunity set given your portfolio.

Speaker 3: Yeah, no, I mean, especially in Southeast and in the Northeast markets, and even some in the Midwest, it is potentially a growth avenue with the selective.

Yeah, No I mean, it makes it especially in the southeast and the northeast markets and even some in the Midwest. It is potentially a growth Avenue with the selective partners as I said, we are a retail company, we're not gonna be a residential company, we have a tremendous relationship with debartolo there based on.

Speaker 3: partners. As I said, we are a retail company. We're not going to be a residential company. We have a tremendous relationship with DeBartolo. They're based in Tampa and have done a number of deals throughout the country. And really this was land that was raw. And going through the entitlement process as we are doing now, we saw this as a very unique and the highest way to drive.

Tampa and have done a number of deals throughout the country.

And really this was land that was raw and going through the entitlement process. As we are doing now we saw this as a very unique in the highest way to drive the.

Speaker 3: the highest IRR possible and to kind of give you a framework on that, we're expecting high 20s maybe even a 30 levered IRR upon exit on this and that's even conservatively.

The highest IRR possible and to kind of give you a framework on that we're expecting high twenty's, maybe even a 30 levered IRR upon exit on this and that's even conservative Lee.

Speaker 3: especially in the cap rate compressing markets of multifamily. So we're excited, we're flattered with the partnership and expect to grow with them and others, maybe even the public REITs on some unused land in our, you know, next to our centers. Excellent.

Especially in the cap rate compressing markets.

Multifamily. So we're excited where we're flattered with the partnership and expect to grow with them and and others, maybe even in the public Reits on some unused land and are you know next to our centers.

Excellent. Thank you guys.

Yep.

Okay.

Speaker 1: Our next question comes from Todd Thomas with KeyBank Capital. Please proceed with your question.

Our next question comes from Todd Thomas with Keybanc Capital. Please proceed with your question.

Speaker 6: Hi, thanks. Good morning. First question, I just wanted to follow up, I guess, on the investment outlook.

Hi, Thanks, good morning.

For first question I, just wanted to follow up I guess on the.

The investment outlook.

Speaker 6: Sounds like there's a lot of opportunity out there across the spectrum of products that you're seeing. You have the additional $500 million commitment from GIC, but can you talk about the importance of RPT's equity cost of capital to the investment formula here? You issued stock equity at about $14 a share, a little under $14 a share. How sensitive are you to the stock price, which today is...

It sounds like Theres, a lot of opportunity out there across the spectrum of our products that you're saying.

You have the additional 500 million dollar commitment from G. I see but can you talk about the importance of Rpt's equity cost of capital to the investment Formula Here you you issued stock.

Equity at about $14, a share little under $14 a share how sensitive are you to the stock price, which today is you know a little under 13, what does that mean for deal flow, particularly as cap rates in the private market has compressed.

Speaker 6: um you know a little under 13. What does that mean for deal flow um particularly as cap rates in the private market have compressed?

Speaker 4: No, sure Todd, I appreciate the question. First, I think from our own portfolio, we have high quality assets that sit in our non-core markets that we can monetize. We were active late last year on that front with two assets.

No sure Todd I appreciate the question.

First I think you know from our from our own portfolio. You know, we have high quality assets that sit in our non core markets that we can we can monetize we were active late last year on that front with two assets in our Chicago market, where we sold together at a sub 4% cap rate.

Speaker 4: in our Chicago market where we sold together at a sub-4% cap rate, where we can absolutely redeploy accretively into acquisitions. And we're taking the same page in that playbook this year with a few assets in non-core markets where we can get a very attractive yield.

Where we can absolutely redeploy accretively into acquisitions, and we're taking the same page and that playbook. This year with a few assets in non core markets, where we can get a very attractive yields.

Speaker 4: be able to redeploy into these better markets that Brian has described time and time again. From an equity standpoint, look, we're going to be opportunistic. You saw us access the equity markets last year through our ATM program at pretty healthy prices and it really comes down to use for us. I mean, Brian's talked about it over and over again. I have talked about it over and over again. We're able to power the platforms, we're able to really enhance our yields.

Being able to redeploy into these better markets you know Brian has described time and time again.

From an equity standpoint look we're gonna be opportunistic.

You saw us access the equity markets last year through our ATM program at pretty healthy prices and it really comes down to use for US I mean, Brian has talked about it over and over again I have talked about it over and over again, where the power of the platforms, we're able to really enhance our yields through the arbitrage opportunities that we have with the re parcels nation.

Speaker 4: through the arbitrage opportunities that we have with reparcelization between the platforms and management fee. You know, that's upward to almost 250 basis points of enhanced yield, so given us the opportunity to raise equity at prices, that makes sense for us. So we'll continue to be opportunistic on that front.

Between the platforms and management fee, that's upward to almost 250 basis points of enhanced yield so give us the opportunity to raise equity at prices that make sense for us. So we'll continue to be opportunistic on that front.

Speaker 6: Okay. Is there any capital raising activity embedded in the guidance?

Okay is there any capital raising activity embedded in the guidance.

No.

Speaker 6: Okay. And then, Mike, you talked about a deceleration in OFFO in the first half of the year, you know, related to some of the move-outs that, you know, it sounds like there's executed leases in place for. I think you previously talked about it, I think 600 or 700,000 of quarterly NOI that's coming offline. Where are we in that process? Is there any?

Okay, and then Mike you talked about a deceleration in N O F O in the first half of the year, you know related to some of the move outs that you know it sounds like theres executed leases in place for them and I think you've previously talked about it a bit.

Ah I think 600 or 700000 of quarterly NOI, that's coming offline, where where are we in that process is any of that NOI offline, yet or will that impact begin in 'twenty two.

Speaker 6: of that NOI offline yet, or will that impact begin in 22?

Speaker 4: Yeah, that impact really will begin in earnest in N22. You're going to see

Yeah, the impact really will begin in earnest then in 'twenty, two youre going to see those.

Speaker 4: No, that's what probably explain this thought is give you the cadence for our occupancy. You're going to see it decelerate in the first quarter near the 90% level and then reaccelerate from there up to the 91.5 to 92%.

But it probably explain the thought is give you the cadence for our occupancy or you're going to see it decelerate in the first quarter.

Near the 90% level, and then reaccelerate from there up to the 91.5% to 92%.

Speaker 4: that we should end the year at because we're taking a pretty significant box back in the first quarter of Baltimore asset.

That we should end the year at because we're taking a pretty significant backpack and the in the first quarter.

L. A baltimore assets are where we took back of shoppers world that was in occupancy at the end of last year. It took it out.

Speaker 4: Uh, where we took back a shoppers world that was in occupancy at the end of last year, took it out. It's already terminated in the first quarter of this year, and that's where we're bringing in the giant.

Already terminated in the first quarter of this year, and that's where we're bringing in the giant groceries to replace that obviously much better crusher them, then shoppers and then from there. It's gonna Ratably go up throughout the year as a sign that commence comes on line.

Speaker 4: grocer to replace that, obviously a much better grocer than shoppers. And then from there, it's going to readily go up throughout the year as the sign that commenced comes online.

Speaker 4: As I mentioned in my prior remarks, it's about a four cent benefit from sign that commenced in 22, but the bigger benefit, which hopeful people hopeful that people are paying attention to is in 23 of about five cent benefit. So really, really nice tail when going into 24 and 25.

As I mentioned in my prepared remarks, it's about a forced them benefit from signed not commenced in 'twenty, two but the bigger benefit which hopefully people hopeful that people are paying attention to is in 'twenty three of about a five cent benefit so really really nice tailwind going into 'twenty.

'twenty four and 'twenty five.

Speaker 6: Okay, and just the last question maybe for Brian . The, on the leasing schedule, the new leasing was obviously very strong. The weighted average lease term, 16 years, stood out a little bit. And it looks like lease term's been increasing a little bit. Are you having discussions with tenants?

Okay and then just the last question, maybe maybe for Brian the Hum on the on the leasing schedule. The new leasing was was obviously very strong the the weighted average lease term 16 year stood stood out a little bit and it looks like lease terms been been increasing a little bit are you are you having discussions with 10.

Speaker 6: that are interested in longer leases and locking in.

Since.

That are interested in in longer leases and locking in leases at this point is that something that you're you're starting to see a little bit more time to discuss our absolutely I mean, we do look at waltz, both obviously on the triple net side, but on the multi tenant as well and I think.

Speaker 6: Leases at this point is that something that you're you're starting to see a little bit more and we're having discussion Absolutely. I mean we do look at Walt's Both obviously on the triple net side, but on the multi-tenant as well And I think to what you're seeing with the longer waltz are the the grocery deals the abundance of the grocery deals that we're doing the public's deal at Crossroads that really led the

To what you're seeing with the longer wallets are but the grocery deal the abundance of the grocery deals that we're doing the public steel at crossroads that really led the elevated leasing cost without that deal you know roughly ta would've been 40 bucks, but that day.

Speaker 3: Without that deal, you know, roughly TA would have been 40 bucks. But that deal got Publix, we're demoing the box, building them a new flagship prototype, 20-year lease.

Deal got Publix, where demo in the demo in the box building them, a new flagship prototype 20 year lease.

Speaker 3: and a very, very healthy yield between 6 to 8%.

And a very very healthy yields between six 6% to 8%.

Speaker 3: And obviously some big favorable Capric compressions of 80 bps conservatively. We saw where the Jamestown deal traded and I would say this stacks right up there. So we're excited about that as well. But I would say the waltz of what you're seeing are really our grocery deals, which have been averaging averaging around 20 years. OK.

And obviously, some big favorable cap rate compressions of 80 bps conservatively and we saw where the Jamestown deal traded and I would say this stacks right up there. So we're excited about that as well, but I would just say the wallets of what you're seeing are really our grocery deals which had been averaging average.

Around 20 years.

Okay, Alright, great. Thank you.

Speaker 1: Our next question comes from Craig Schmidt with Bank of America. Please proceed with your question.

Our next question comes from Craig Schmidt with Bank of America. Please proceed with your question.

Speaker 7: Yes, thanks. I wonder what your expectations for leasing volumes are in 22, you know, given your 1.7 million in 21. And Brian , your observation that this is one of the strongest leasing markets you've ever seen.

Yeah. Thanks, I wonder what's your expectations for leasing volumes are in 'twenty, two given your $1 7 million in 'twenty, one and Brian your observation that one of the strongest leasing markets you've ever seen.

Speaker 3: Craig, I expect it to be up there, I mean, just based on the pipeline and based on

Yeah, Craig I expect it to be up there I mean, just based on the pipeline and based on the deals we have visibility on I expect it.

Speaker 3: The deals we have visibility on, I expect it to be near or maybe even higher than last year.

It to be you know near or maybe even higher than than last year. I mean, if you look at last year I mean, the the number of tenants of which we signed it.

Speaker 3: I mean, if you look at last year, I mean, the number of tenants of which we signed, but more importantly, the former tenants of what we replaced. We took out an airtime trampoline park at Troy Marketplace outside of, in Troy, Michigan, and replaced it with a AA rated grocer.

But more importantly, the former tenants of what we replaced I mean, we took out a airtime trampoline park.

Troy marketplace outside of it in Detroit, Michigan Places with a double a rated grocer Crofton centre replace shoppers world to giant old town and country Stein Mart replace it with Rei and are finalizing a lease with Sephora Winchester Center Stein Mart to Burlington Highland Lakes in Tampa.

Speaker 3: Crofton Center replaced Shoppers World to giant Aho.

Speaker 3: Town and Country, Stuymart replaced it with REI and we're finalizing a lease with Sephora. Winchester Center, Stuymart to Burlington. Highland Lakes and Tampa, Stuymart to the AA-rated Groture again. Front Range Village, Charming Charlie to Nike. Woodbury, Charming Charlie to Lululemon. Providence, Lane Bryant.

<unk> to the double a rated grocer again front range village charming, Charlie the Nike Woodbury charming, Charlie the Lulu Lemon Providence Lane Bryant Ferguson.

Speaker 3: And the beauty of this is it's double the rent of the former tenants.

The beauty of this is it's double the rent of the former tenants at a much higher investment grade credit. So we have a number of deals that will be signed even subsequent to this call. Today that are both large in size and of the same formats of which I, which I talked about yeah.

Speaker 3: at a much higher investment grade credit.

Speaker 3: So we have a number of deals that will be signed even subsequent to this call today that are both large in size and of the same formats of which I talk about. Yeah, just to echo Brian's thoughts around the enhancer with increased volumes that we do expect in 2022.

Just to Echo Brian's thoughts around the enhancer of the increased volumes that we do expect in 'twenty two.

Speaker 4: Just as a reminder, we did execute about 1.6 million square feet.

Just as a reminder, we did execute about one 6 million square feet in <unk> and 'twenty. One we do expect that to increase to Brian's point about 2 million square feet.

Speaker 4: in 21. We do expect that to increase to Brian's point about 2 million square feet.

Speaker 4: So it's going to be up considerably and just a level set.

So it's gonna be up considerably and just to level set.

Speaker 4: percentage of the plan that's done so far for 22 Craig. So if you look at our new leasing plan and our renewal leasing plan it's about 80% done. We're pretty convicted in those values.

The percentage of the plan that's done so far for 'twenty two Craig. So if you look at our new Nuke leasing plan and our renewal leasing plan for about 80%. So we're feeling pretty convicted in those volumes.

Speaker 7: Great. Thank you. And then concerning the compression of cap rates.

Great. Thank you.

And then concerning the compression of cap rates.

Speaker 7: How would you compare the large community center and power center compression to the grocery anchor?

How would you compare the large community center and power center compression to the grocery anchored a comparison.

Speaker 3: It's dropping considerably. I mean, we've been seeing trades in the larger formats in the 5s now. I just saw one at a fixed handle in the Midwest.

It's it's it's dropping considerably I mean, we've been seeing trades and the larger formats in the fives now I just saw one at a at a six handle and in the Midwest.

Speaker 3: I think people are finally realizing great real estate is great real estate and the cash flows on top of it are important But especially with these larger format that the investment grade credit you get on these It's finally kind of flowing through to certainly private buyers, but institutional now as well So we're seeing considerable cap rate compression in all format tabs

I think people are finally, realizing great real estate is great real estate and the cash flows on top of it are important.

But especially with these larger format that the investment grade credit you get on these has finally kind of flowing through to certainly private buyers, but institutional now as well. So we're seeing considerable cap rate compression and all format attached.

Great. Thank you.

Yep.

Speaker 1: Our next question comes from Floris Van Dykem, Compass Point. Please proceed with your question.

Our next question comes from Floris Van Dijk them Compass point. Please proceed with your question.

Hey, guys good morning.

Speaker 8: I just wanted to get a sense of your, your, the midpoint of your guidance has about 3% same store growth. What is your bad debt reserve function in that?

Just wanted to get a sense of your your the midpoint of your guidance says about 3% same store growth what is your bad debt reserve assumptions.

Speaker 4: Hey, good morning, Flores. The bad debt assumption is about 100 basis points of same property and OI, which equates to about 1.3, 1.4 million. To put that in context, the pre-COVID levels for a different portfolio that we owned back in 19 was about 800 grand per year. So we're being a bit conservative on that front, just given where we're at in the year. So we feel it's a pretty good assumption at this point.

Hey, good morning floors, the bad debt assumptions about 100 basis points of same property, NOI, which equates to about one.

You know 1.3 $1.4 million to put that in context, the pre COVID-19 levels for a different portfolio that we owned back in 19 was about a hunter granted per year. So we're being a bit. So they can serve on that front, just given where we're at in the year. So it feels pretty good.

At this point.

Speaker 8: Thanks, Mike. Clearly, you guys have signaled very clearly to the market that you're growing in certain markets and reducing your exposure to some of your competitors.

Thanks, Mike.

And maybe if you can also I mean, clearly you guys are you know you'd signaled very clearly linked to the market that you're you're growing in certain markets and and and and you know reducing your exposure to some of your your historical markets.

Speaker 8: your historical markets. As you look at the dispos as well, would you, the existing assets you have or you continue to own in particular in Detroit and in Cincinnati, would they be suitable for some of your JD platforms and could they go in there in some ways? Or would you be looking to source new acquisitions?

As you look at the dispose as well would you the existing assets you have in your you continue to own it and in particular and in Detroit and in Cincinnati would they be suitable for some of your JV platforms and could they go in there are in some ways or.

Or would you be looking to source.

New acquisitions sports for those platforms.

Speaker 3: They could be both, Floris. I mean we're looking at both angles. I mean we have the levers to pull on both. We're seeing actually...

They could be both Floris I mean, we're looking at both angles I mean, we have the levers to pull on both were seeing actually.

Speaker 3: a pretty good, very good froth from investment appetite in Detroit right now. I think it's been cooling in the state of Illinois and it's kind of gone up to Detroit, and we're seeing good things in Minneapolis and even Cincinnati as well. So we'll look at both angles, and what we need to come up with is obviously the best cap rate for the shareholders. So we've got to run both parallel, but it's something we're exploring on both sides.

Pretty good very good froth from investment appetite in Detroit right now I think there it's been cooling in the state of Illinois and has kind of gone up to Detroit and we're seeing good things in Minneapolis, and even Cincinnati as well. So we'll look at both angles and and what we need to come up with is obviously the.

First a cap rate for the shareholders. So we got to run both parallel.

But it's something we're exploring on both sides.

Great. Thanks, Brian .

Yep.

Speaker 1: Our next question comes from Handel St. Just with Missoula. Please proceed with your question.

Our next question comes from Handel St Juste with Mizuho. Please proceed with your question.

Hey, Good morning, guys I guess, the first question I don't know if I missed it but did you mentioned you mentioned 125 million that you have.

Speaker 8: I guess first question, I don't know if I missed it or not, but you mentioned $125 million that you have under contract. Did you discuss the cap rate, or maybe can you discuss the cap rate and the type of assets that you have in that $125 million?

Under our contract did you discuss the cap rate and maybe can you just have to cap rate and the type of assets that you have met Hubbard.

Speaker 3: Yeah, I'm not going to get into the cap right until we close. But I'll give you one is north of Boston, I said in my prepared remarks where it's a dual anchor.

Yeah, I'm not going to get into the cap rate until we close but I'll give you a one is north of Boston I said in my prepared remarks, where it's a dual anchor.

Speaker 3: very high volume dual anchor grocery center, extremely high volumes would be the top 5% of our current tenant sales across the country. Some others that we're looking at are in our more infill, kind of Boston.

Very high volume grocery group dual anchored grocery center extremely high volumes would be the top 5% of our current tenant sales across the country.

Some others that we're looking hard and are more infill infill kind of Boston Street mom and pop owners, where we can just drive tremendous unlevered IRR.

Speaker 3: street, mom and pop owners where we can just drive tremendous unlevered IRRs.

Speaker 3: But, you know, we were looking at, like, high single-digit IRRs, unlevered. So it's pretty compelling and off-market, I should say, too. So we're excited on that, and that 120 is just really what we have the visibility and what has been awarded, but expect more.

But you know we were looking at like high high single digit Irr's Unlevered. So, it's it's pretty compelling and in an off market I should say too. So we're excited on that and that's 120 is just really what we have the visibility on what has been awarded but expect more.

Speaker 8: Got it, got it, fair enough. A question on the...

Got it got it fair enough.

A question on the.

Speaker 8: signed but not yet open rents. I think you mentioned the $6.9 million that's signed, $3.3 million of discussion. I guess I'm first curious on if you're seeing any impact or concern on timelines for openings, given supply chain labor constraints. And then also, I guess I'm curious why some of this is taking so long. I think you mentioned a couple pennies into 2024, so some color on what you're kind of seeing in the timing and the pace. Thank you.

Assigned but not yet opened rents I think you mentioned the six quite an idea that's fine because we've only been crushing.

Just curious on if you're seeing any impact of concern on.

Timelines for opening a given supply chain labor constraints and then also I guess I'm curious why some of this is taking so long I think you mentioned a couple of pennies into 'twenty 'twenty four so some color on what you're kind of seeing in the timing of them.

And.

Speaker 3: Yes, yes, thankfully, the pace or let me start back with the if there's any worries with the tenants, I'm always worried about their business, but there hasn't been any delays as of yet at all on any of these openings or rent commencement dates flipping back.

The place.

Yes, thankfully the pace Oh, let me just start back with the if there's any worries for the tenants I'm always worried about.

Their business, but there hasn't been any delays as of yet at all on any of these openings or rent commencement dates slipping back.

Speaker 3: The delays are, we're repositioning a lot of the portfolio with top-rated, best-of-the-best investment-grade tenants.

The delays are we're repositioning a lot of the portfolio.

With top rated that's the vast investment grade tenants.

Speaker 3: A lot of these are grocers. We've driven our grocery percentage from 65% of groceries of ABR in 2019 to 71%.

Lot of these are grocers, we've driven you know our our grocery percentage from 65 and 65% of groceries.

We are in 2019% to 71%.

Speaker 3: Pretty impressive. But some of that takes time and some of these tenants are opening late 23 which will hit 24.

It's pretty impressive.

But some of that takes time and some of these tenants are opening late 'twenty, three which will hit 24.

Speaker 3: So really it's just moving tenants around and moving boxes around and demising that and getting them open.

So really it's just moving tenants around and moving box boxes around in devising that and getting them open in time for that so I would say most of this impact is going to be 23.

Speaker 3: in time for that. So I would say most of this impact is going to be 23 and late into 22 with a little bit of that as Mike displayed into 24. Yeah, I mean there's only one lease, you know, tied to the 24 upside handout.

And late into 'twenty, two with a little bit of that that's my displayed into 24, yeah. There's only one lease you know tied to the 24 upside and all that's the lease that we just signed in the fourth quarter at the new acquisition that required on Tampa Highland Lakes.

Speaker 4: That's the lease that we just signed in the fourth quarter at the new acquisition that we acquired on Tampa, Highland Lakes, where we're bringing in the AA investment grade grocer to replace the Steinmark there. So that's the one that's taken a bit of time to come online and it's only one deal.

We're bringing in.

A double a investment grade grocer to replace the Stein Mart there. So that's that's the one that's taken a bit of time to come on line until I wanted deal.

Speaker 8: Got it. Appreciate the color. And if I could, Brian , one more. I guess as you kind of think about the stock price, the multiple here, I guess I'm curious what's at the top of your priorities this year to help close that gap, which remains fairly wide despite the pickup in acquisitions last year, the JVs, and the favorable wind that you're back from leasing demand and cap rates.

Got it appreciate the color and if I could Brian one more I guess.

Kind of think about the the stock price the multiple here I guess I'm curious what's at the top of your priority this year.

Help close that gap with remains very wide. Despite the pick up in acquisition last year of the JV and the favorable wind at your back from leasing demand and cap rates.

Speaker 4: Yeah, I look, I can take some of the part of the question here. But really, the key drivers to getting our, our cost of capital down is really continue to put wins on the board, right? I think, operationally, last year, we had a really, really good year. I think this year is going to be even better. I think to find that commence is very indicative of the leasing volumes that, you know, we expect over the next

Yeah look I can think of some of the smaller part of the question here, but really to keep the key drivers in getting our cost of capital down is really contingent, but when does the board right I think operationally last year, we had a really really good year. I think this year is going to be even better I think a sign up.

<unk> is very indicative of the leasing volumes that we expect over the next few years I think we're experiencing one of the better same property NOI growth rates. This year, and we think that'll have some nice tailwind into 'twenty, four and 'twenty five and I will continue to be very very busy on the acquisition front, yeah, Ryan Yeah. So handle.

Speaker 4: few years. I think we're experiencing one of the better same property in Hawaii.

Speaker 4: growth rates this year. We think that'll have some nice tailwinds into 2024 and 2025. And we'll continue to be very, very busy on the acquisition front. Yeah, so Hendel, I mean, this is all about getting back to 2019 levels where sector leading and it's finally nice to be in the environment.

I mean this is all about getting back to 2019 levels ware sector, leading and it's finally nice to be in an environment, where we can actually compare apples to apples on NOI compare apples to apples on an occupancy compare apples to apples on F. F O growth without all this deferral stuff. So we're on an equal.

Speaker 3: where we can actually compare apples to apples on NOI, compare apples to apples on occupancy, compare apples to apples on FFO growth without all this deferral stuff. So we're on an equal platform now where we.

<unk> platform now are where we are very expectant for for for for Great things I think the number of when I said that double a.

Speaker 3: are very expectant for great things.

Speaker 3: I think the number of, when I said that AA investment grade grocer being a top five tenant,

<unk> grade grocer being a top five tenant that's.

Speaker 3: That's a significant outlier for our peers. When we say these grocery initiatives go into power centers, we're seeing 250 basis points cap rate compression on stuff.

That's a significant an outlier for our peers. When we say these grocery initiatives go into power power centers. I mean, we're seeing 250 basis points cap rate compression on stuff there is massive value creation happening across the board.

Speaker 3: There is massive value creation happening across the board and in new geographies, too. We've reshaped the portfolio, Boston number three, Tampa's moved up, Atlanta's moved up. And you've seen the keggers in our investment deck that we posted last night. So.

And in new geographies to we've reshaped the portfolio Boston number three Tampa has moved up Atlanta has moved up and you've seen the CAGR is in our investor deck that we posted last night so.

Speaker 3: I am about as excited as I've been in my career. Teams focus, teams energize, and we're hitting all cylinders.

I'm I am about as excited as I've been in my career at team's focus team is energized and where we're hitting on all cylinders.

Great guys appreciate the time and the color.

Yes.

Speaker 1: Our next question is from Teo Okusana with Credit Suite. Please proceed with your question.

Our next question is from Tayo Okusanya with credit Suisse. Please proceed with your question.

Speaker 9: Good morning, everyone. The 125 million of acquisitions and guidance so far, could you just discuss, is that all happening at the funds business? Is any of that on balance sheet?

Hi, Yes, good morning, everyone.

125 million of acquisitions in guidance so far.

Can you just discuss is that all happening.

We are at the funds business has any of that on balance sheet.

Speaker 3: No, that's balance sheet, so that's not without the fund at all. It's going to be measured off. I would say, you know, of that, a little bit of spin-off on the arbitrage of the deal in North Boston, but for the most part, that's balance sheet.

That's balance sheet.

That's that's balance sheet, so that's not without the fun at all.

It's gonna be measured measured off I would say you know of that a little bit of spin off on the arbitrage of the deal in north Boston, but for the most part that's balance sheet and we're excited about the grocer JV, we have $500 million of recent upside.

Speaker 3: We're excited about the Grocer JV. We have $500 million of recent upsize and a billion one on the fund platform for the triple net.

<unk>.

One 1 billion one on the on the fund platform for the Triple nets, but that 125 is mostly balance sheet.

Speaker 3: But that $125,000 is mostly balance sheet.

Speaker 9: Okay, thank you. Yep.

Okay. Thank you.

Yep.

Speaker 1: Our next question is from Linda Tsai with Jeffries. Please proceed with your question.

Our next question is from Linda Tsai with Jefferies. Please proceed with your question.

Speaker 1: In terms of 3 cents of prior period reserves, and I know it's a category that's not included in your FY22 guidance.

I am in terms of the three cents of prior period reserves and I know, it's a category. That's not included in your FY 'twenty two guidance.

Speaker 1: What's the potential pool to draw from the extent that there are more reversals in 2020?

What's the potential pool to draw from the extent that there are more reversals in 'twenty two.

Speaker 4: At this point, Linda, we really don't expect a surprise on the favorable side or the unfavorable side as we look out to 2022.

At this point, Linda we really don't expect a surprise on the favorable side or the unfavorable side as we look out to 2022.

Speaker 4: Our reserve, our receivable right now stands at around $14 million of which $12 million is reserved and we have about $2.5 million or so that is yet to be collected. So at this point, most of that reserve is tied to riskier cash flows for tenants that I don't think there's going to be upside there or really downside at this point.

Our AR reserve.

Receivable right now stands at around $14 million of which $12 million is reserved and we have about two and a half million dollars or so.

You have to be collected so at this point and most of that reserve is tied to.

Riskier riskier cash flows.

For tenants.

I don't think there is gonna be upside, there or or really downside at this point.

Speaker 1: Got it. And then just on the strength of the new leasing, I saw there were six leases.

Got it and then just on the strength of the new leasing I saw there were six leases.

Speaker 1: PIs were a little high, but the leasing spread was also 73%. Could you talk about that?

You guys were a little high but.

Leasing spread was also 73% could you talk about that.

Speaker 3: Yeah, I mean really the outlier was the Publix deal, 20 year lease in Palm Beach. Without that deal, Linda, it would have been 40 bucks.

Yeah, I mean really the outlier was the public steel a 20 year lease and Palm Beach.

Without that deal Linda it would've been 40 Bucks.

So and that was.

Speaker 3: you know, a $6 deal going to low 20s. So, again, that is another favorable item for the company where we just have very, very good mark-to-market opportunities. I mean, really, since the second quarter of 18, our new least comparable releasing spreads have averaged 30%.

You know six dollar deal go onto low Twenty's. So again that is another favorable item for the company, where we just have very very good mark to market opportunities I mean really since the second quarter of 18.

Our new lease comparable releasing spreads have averaged 30%.

Speaker 3: Right? So I think everybody just needs to understand that this mark to market is going to happen and will continue to happen and we'll extract a lot of value from that as well.

Right. So I think everybody just needs to understand that this mark to market is going to happen and we will continue to happen and what will extract a lot of value from that as well.

Yeah.

Speaker 1: Just one final question. Just on the transaction environment, given increased competition and cap rate compression, are private owners less inclined to sell because of compression, or are you seeing them put more assets on the market?

Just one final question just on the transaction environment, given increased competition and cap rate compression or private owners less.

Claims yourself.

Crushing or are you seeing them put more assets on the market.

Speaker 3: I think it depends on who. It's broad. I mean, we're

I think it depends on who it's broad I mean, where.

Speaker 3: It's competitive. It's very competitive. We have people knocking on doors, boots on the ground, having calls with you know all the named institutional owners as well. But it's absolutely competitive. I think some private owners are looking to divest some of the retail. I think some private owners love the business and want to hold it. So it's a little bit of little bit of everything.

It's competitive it's very competitive we are people knocking on doors boots on the ground I'm, having calls with all the named institutional owners as well.

But it's absolutely competitive I think some private owners or are looking to divest some of the retail I think some private owners loved the business the amount of hold it so it's a little bit a little bit of everything.

Thank you.

Yep.

Yeah.

Speaker 1: Our next question is from Mike Mueller with JP Morgan. Please proceed with your question.

Our next question is from Mike Mueller with Jpmorgan. Please proceed with your question.

Speaker 10: Yeah, hi, Mike, just to clarify, when you talked about 4 cents of signed but not open coming on in 22 and 5 cents in 23, should we think of those as calendar year impacts or run rates coming on at some point during those years?

Yeah, Hi, Mike just to clarify when you talked about poor sense of signed but not open.

<unk> signed but not open coming on in 'twenty, two and five and 23 should we think of those as calendar year impacts or run rates coming on at some point during those years.

Yeah, those are calendar your impact Mike.

Speaker 10: Okay. And then, as it relates to the RESI development sites,

Got it okay.

And then as it relates to the resi development sites.

Speaker 10: How many do you see in the portfolio today that you think could be actionable over the next few years?

How many do you see in the portfolio today that you think could be actionable over the next few years.

Speaker 4: I mean, we we have we have quite a bit. I mean, I don't want to price a number, but it's several. And we're looking at even some and

I mean, we have we have quite a bit I mean, I don't want to price at a number but it's several and we're looking at even some in Columbus.

Speaker 3: Columbus, Ohio, at our Shops at Lane project, where there's just huge demand. That's a Whole Foods anchored center right in upper Arlington with, you know, tremendous demographics right next to Ohio State. So I don't want to put a number out there, but it's a business that we've been really focused on since I've got here. COVID put kind of more of a halt on that side, but we've kickstarted it back up with this Jacksonville deal and see a larger runway for that.

Columbus, Ohio at our shops at land project, where there's just huge demand that's a whole foods anchored center in upper Arlington with.

Tremendous demographics right next door, Ohio State. So I don't want to put a number out there, but it's a business that we've been really focused on since Ive got here Covid put kind of more of a halt on that side, but we've kick started it back up with this Jacksonville deal and see a larger runway for that.

Got it okay that was it thank you.

Mike.

Speaker 1: Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back over to Brian Harper for closing remarks.

Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back over to Brian Harper for closing remarks.

Speaker 11: Thank you everybody, really appreciate everybody's time. 2021 was a year of tremendous accomplishment for RPT. Our portfolio is stronger, our cash flows are more sustainable, our acquisition pipeline is full, and our balance sheet gives us the flexibility to adjust to changing market conditions.

Thank you everybody.

Really appreciate everybody's time 2021 was a year of tremendous accomplishment for our P. T. Our portfolio is stronger our cash flows are more sustainable our acquisition pipeline is full and our balance sheet gives us the flexibility to adjust to changing market conditions, our success into 'twenty, one would not have.

Speaker 3: Our success in 2021 would not have been possible without the strong foundation that was laid in 2018. And I could not be happier with the progress we have made as a company over the past four years. We expect 2022 to be another year of growth, execution.

Been possible without the strong foundation that was laid in 2018 that cannot be happier with the progress we have made as a company over the past four years, we expect 22 to be another year of growth execution.

Speaker 3: and innovative thinking that will no doubt set us up for continued success in the years to come. Have a wonderful day.

And innovative thinking that will no doubt set us up for continued success in the years to come and have a wonderful day.

Speaker 1: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

In February .

Yeah.

Yeah.

Good.

Yeah.