Q2 2023 Federal Realty Investment Trust Earnings Call
Good afternoon, and welcome to the Federal Realty Investment Trust second quarter, 2023 earnings conference call.
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I would now like to turn the conference over to Leah Brady Vice President of Investor Relations. Please go ahead.
Good afternoon, and thank you for joining us today for Federal Realty's second quarter 2023 earnings Conference call. Joining me on the call are Don Wood Federal Chief Executive Officer, Jack broadcast President and Chief Operating Officer, Dan <unk> Executive Vice President Chief Financial Officer, and Treasurer Yarns sweetener.
Decorative Vice President Chief Investment Officer, Wendy <unk> Executive Vice President Eastern region, President and Dawn Becker Executive Vice President General Counsel and Secretary as well as other members of our executive team that are available to take your questions at the conclusion of our prepared remarks, a reminder, that certain matters discussed on this call may be deemed to be.
Forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements include any annualized or projected information as well as statements, referring to expected or anticipated events or results, including guidance, Although federal Realty believes the expectations reflected in such forward looking statements are based on reasonable assumption that our royalties future operations and its actual performance may differ materially from the information in our forward looking statements and we can.
Give no assurance that these expectations can be attained the earnings release and our supplemental reporting package that we issued yesterday. Our annual report filed on Form 10-K, and our other financial disclosure documents provide a more in depth discussion of risk factors that may affect our financial condition and results of operation.
Given the number of participants on the call. We kindly ask that you limit yourself to one question during the Q&A portion of our call. If you have additional questions. Please re queue and with that I will turn the call over to Don Wood to begin our discussion of our second quarter results Don.
Thanks, Lee and good afternoon, everybody and special Thanks to David Simon for finishing his call more or less one time this afternoon.
All time record setting quarter for federal Realty that start with $1 67 second quarter S. F. O per share result ahead of consensus ahead of internal expectations and ahead of last year's second quarter.
Last year's second quarter was helped by a large termination fee from Amazon as they exited their brick and mortar bookstores ex termination fees. This quarter's bottom line <unk> per share growth grew 5% despite significantly higher interest expense, it's a really strong quarter for us.
Leasing velocity continues to be the highlights we signed 107 comparable leases for 576000 square feet at $35.34, a foot, 7% higher than the cash rent basis rent the previous tenant was paying in the final year of their lease 19% on a straight line basis.
Demand was exceptional.
When you include non comparable leases, which by the way for us largely relates to newly built out space on a redevelopment.
And development projects, along with our office leasing we executed 135 leases in the second quarter for a very robust 652000 square feet, representing $23 million of newly contracted annual rent.
These are production numbers that lie well outside the averages over a very long history and will go a long way toward offsetting the lost bed Bath and beyond and Christmas tree shop income stream in 2024 until they're released and rent paying.
In terms of bed Bath, we lost one of our remaining nine.
Bed Bath leases during the quarter that lease of 25000 square foot box and Mount Vernon Plaza in Northern Virginia has been released Burlington at a 57% rent increase.
Three more bed Bath and that leases were rejected effective June 30, and July rent was received on the remaining five.
Two of the remaining five were bye bye baby locations that were assumed by online baby retailer Dream on me and we therefore expect to continue to receive rents in the future.
The remaining three leases were rejected in the third quarter and accordingly, we will have a hit to occupancy of about 1% and lost rent of two and a half million dollars or so for the balance of 2023, all of which has been considered in our guidance.
We are in the works for all of our bed Bath locations and replacement rent will start to ramp up in late 2024.
Well leased and physical occupancy continued to improve compared with the previous quarter and the previous year.
94, 3% leased 92, 8% physical occupancy at quarter end are up 10, and 20 basis points, respectively, compared with the first quarter, and 20, and 80 basis points, respectively year over year.
Small shop occupancy gains in particular continued their trend during the quarter and increased 20 basis points on a lease basis and 40 on an occupied basis. That's a total increase in small shop occupancy of 310 basis points since Q1 'twenty two.
Quality of our small shop tenants and discerning way that we choose them at our properties, where we create a ton of value.
Small shop vacancy our tendency rather does not equal.
I've noted in the past couple of quarters that leasing productivity and rates that have occurred at the properties. We've acquired over the past several years has significantly exceeded our underwriting and that has continued.
Similarly leasing productivity of properties that have recently undergone redevelopment and property improvement plans have outperformed our expectations and we expect that to continue.
Maybe we can be a bit too conservative at times.
The roughly 3100 apartments that make up an important part of the revenue stream at our mixed use and other properties remain a real differentiating bright spot for our portfolio and continue to add to both cash flow and to value.
In the aggregate our residential portfolio was 98% leased at June 30th and provided 11% more property operating income this quarter when compared with last year's second quarter.
He is in a super important component of our mixed use neighborhoods as is the office component, which is also 98% leased outside Santana West and the choice headquarters building, which is under construction.
We did by the way delivered the newly built office space to choice hotels, this quarter and expect them to finish their work and occupy the building by year end.
So in the same building will follow right behind.
I reported last quarter that inquiries and property tours have seen renewed life at Santana West and that has certainly continued even the northern California presence, starting lower layoffs and dramatic new investment in hiring in areas like AI electric vehicles and related technologies feels like Silicon Valley stabilizer.
Oh.
So I can look back and think about what it is that we're doing and and I cannot tell you that some of the country's most productive and well known mixed use committed communities sitting just outside San Jose Boston, Washington, D C and Miami seem to us It seems to me to be the right right on the Mark is a product that is and will remain high.
Man as resilient consumers continue to prove that to be so let me turn it over to Dan before opening it up to your questions.
Thank you Don and Hello, everyone.
Recording reporting a company record <unk> per share of $1 67, there's very satisfying, particularly given the interest rate headwinds, we face and is a testament to the continued strength of our business model.
To reiterate John's earlier comment we beat our previous record.
In the quarter last year by 5% when adjusting for the outsized term fees that we had last year and also posted 5% sequential growth growth versus the FERC first quarter again, a strong indicator of the health and our underlying business.
With respect to this record performance, which significantly exceeded our expectations, we can point to the following drivers.
Higher property level P O y than was forecast driven by continued strength in rents.
Parking specialty leasing and percentage rent, coupled with lower operating expenses as well.
As a continued focus on cost controls at the corporate level, resulting in lower G&A.
This was offset by the aforementioned higher interest costs.
As you can see.
Very strong quarter.
With respect to our comparable metric COI growth was four 6% excluding the impacts of term fees from prior period rent on.
On a cash basis comparable POI growth excluding term fees from prior period rent was even better four 7%.
Term fees in the comparable pool this quarter were down significantly to $1 6 million versus $5 5 million in the second quarter of last year and prior period rent. This quarter was $1 2 million versus $2 2 million in the second quarter of 'twenty two.
Again. Please note all of these figures are disclosed in detail in our supplemental 8-K on pages 10 and 11.
Year over year occupancy showed continued progress with the roadblock overall occupied metric growing 80 basis points year over year 92 to 92, eight and our lease percentage, increasing 20 bps from $94. One to 94.3 small shop momentum continued year over year with a 92 nine.
Anti <unk>, 2% rate being up 90 basis points.
Over the previous year with a targeted lease rate for small shop.
92%.
Our signed not occupied percentage total stands at approximately 3% or $34 million comprised of roughly 17 million of incremental total rent in our existing portfolio and an additional $17 million of total rent and our non comparable pool, where leases are signed and the space has to be.
Delivered.
Our non comparable signed not occupied pool.
It is an important differentiator of federal's business plan, which is often overlooked.
Total comparable leasing volume for the quarter of 576000 square feet.
Federal record for our second quarter, and the second highest volume for a quarter ever on a comparable basis.
The rollover at 7% on a cash basis and 19% on a straight line basis highlights the straight line growth.
That's driven by sector, leading contractual rent bumps.
Which for our entire portfolio average roughly 2.25% blended across both anchor and small shop.
Now to the balance sheet.
At June 30, we start with $1 3 billion of total available liquidity comprised of $1 2 billion available under our revolver and $100 million of cash.
During the quarter, we successfully demonstrated access to the unsecured market at attractive levels with a $350 million five and three eighths percent Green bond, our second green bond highlighting our focus on sustainability and our commitment with respect to our overall ESG strategy.
Make sure to check out our annual corporate responsibility report on our website that was published in early June .
With respect to leverage our net debt to EBITDA ratio continues to improve each quarter, we fully expect to be back toward targeted level in the mid five times in 2024.
Our in process 750 million dollar pipeline of active Redevelopments and expansions is only $220 million remaining to spend against our $1 3 billion of available liquidity with a large chunk of that remaining figure being leasing capital.
Which is good news when deployed.
Now onto guidance.
We are increasing our forecast for <unk> per share for 2023 by <unk> <unk> per share at the midpoint to $6 52.
From a range of 638 to $6 58 per share to a new range of $6 46 to $6 58 per share.
Guidance now reflects 2023 <unk> growth over 2022 of about 2% to 4% or three 2% at the midpoint.
We have managed through bankruptcies to date in the retail sector extremely well collecting more rent from bed Bath that we had forecasted and having relatively small exposure to other retailer fallout.
As the bed Bath bankruptcy winds down we expect it will result in a 31 basis point hit for the year versus our initial credit reserve of 25% to 60 basis points with respect to the balance of our tendency we are setting that reserve at 50 to 75 basis points.
We will see a dip in occupancy next quarter as the impact of our loss bed Bath locations and one Christmas tree shops.
Become fully reflected.
But expect to finish the year back in the low to mid 92% range.
Also keep that impact in mind for the cadence of <unk> per share for the balance of the year with third quarter forecasted at $1 61, and its mid point in the fourth quarter at 165 at its midpoint.
From a comparable growth perspective, given our solid first half of the year, we are affirming the 2% to 4% range for comparable POI growth.
As well as our 3% to 5% range on a cash basis adjusting for prior period runs from term fees.
Given our focused on cost controls, we lowered our G&A forecast from 54 million to 52 million $52 5 million at the midpoint, but we increased our forecast for contributions from Redevelopments and expansions to $16 million to $19 million up from the previous range of <unk> 15.
The $18 million.
We have provided an update of our updated summary of these key assumptions on our guidance page.
Guidance on page 27 of our 8-K.
Before I close my prepared remarks allow me to highlight that for the 56th consecutive year Federal's Board of directors increased our dividend.
Weak industry record.
It's the sole dividend king in the real estate sector. We are extremely gratified to have stayed the course through yet another challenging economic cycle.
And continue providing our shareholders with comfort and are reliably growing.
Stream of cash flow.
Please note.
That the CAGR over this 56 years at 7%.
Compounded.
So now I'm finished with my prepared remarks, let me turn it back to Don Wood.
Completion of his remarks, thanks, Dan you know as I listened to dance.
<unk> comments, there I thought of one more point that I really wanted to I wanted to make you know theres so much conversation about.
The supermarket part of our business and as part of the industry and how good that is but I want you to know about are our mixed use communities.
Look about the overall outsized performance of the four big for mixed use communities last quarter, but it bears repeating as its strength continued and helped drive the results in this second quarter.
Taken together Assembly row, Bethesda row, Pike, <unk> Rose and Santana row are a real company differentiator for federal as you know and more in demand than ever before with retail leased occupancy at 98% and tenant sales well above 2019 levels.
These properties are humming with estimated foot traffic in excess of 30 million shoppers in the trailing 12 months, that's a big number and it comes from the database a place for AI, which we think is well understated in our estimation. This is the product in the market that consumers in a post COVID-19 world want the most so despite the well.
Publicized bankruptcies of companies like bed, Bath, and Christmas tree shops, and the effects of higher interest rates on our business I'm feeling pretty darn good about the way. This year is playing out and that's been the basis for which we could increase guidance by as much as we did this quarter.
Let's now turn it over and open it up to your questions.
We will now begin the question and answer session.
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Once again that was star then one to ask a good question and at this time, we will pause momentarily to assemble the roster.
And our first question will come from Alexander Goldfarb of Piper Sandler. Please go ahead.
Hey, good afternoon.
Thank you Don for for moving the call to avoid the overlap so appreciate it.
So question I guess on the mixed use you guys had a recent.
There was an article on you guys with Federal Plaza, West, which I guess it is not.
Not too far from Pike <unk> Rose that you got approval for some residential addiction, so maybe a bit more color on this I don't think you're anticipating on doing another pike <unk> Rose you know mega redevelopment, but maybe your thoughts on the apartments here and then in general are you feeling better about sort of ramping back up adding more apartment.
Across your shopping center.
Portfolio or is your view from a capital perspective that you'll do maybe a few of these at a time, but youre not planning to rollout multiple projects.
Just given again cost of capital.
Thanks Al So first of all I'm really impressed that you are reading Montgomery County.
Maryland press releases and get into the detail what's going on at federal It's pretty cool Yeah. We did get full entitlements for apartments at Federal Plaza, and I think I've talked for quite some time about.
Using a downtime.
To get our development team and keep our development team working on entitlements that can be put to work as the economy changes and I know a lot of people talk about residential.
It really is a really important part for us and it's not just <unk> at the mixed use properties, which is also obviously an important part of what we do we right now not only have just gotten federal Plaza entitlements, but there is 500 units that are shovel ready that we could do today and we're really looking hard at the capital.
Allocation the numbers to see how much you know what we really need to get done there on what we can underwrite at Santana row.
And at Valiquette with Pennsylvania. In addition to that there's another dozen.
Properties. Another 3000 units so like 3500 units for which we are actively working on entitlements at our shopping centers. These are places you wouldn't necessarily think about them, particularly like friendship heights like the Avenue outside of Baltimore like like Oh Logan.
In New Jersey.
Panam shopping center at a bunch of people and and when you think about US we've done this stuff before we've been doing it for 20 years. So look at the back of Congressional Plaza Tauzin, Chelsea shopping center previously at Ballard, We do a lot of this stuff and we try to do it with our own capital when the numbers.
Makes sense, so that it moves the needle doing stuff with the capital that we can put to work and get it getting above average return will move the needle for federal and it's one of the key differentiator just given our experience now.
We look at and we'll look at over the next five or six years. Some of those projects don't pencil today no surprise to anybody so what get the entitlements increase the value of the land be ready to put money to work when it makes sense. That's a key part of our growth.
Our next question comes from one Santa Maria.
Capital markets. Please go ahead.
Hi, John Thank you just curious if as you think about getting bigger in and looking for new opportunities, which you've talked about in the paas just how youre thinking about funding would you consider any joint ventures or any of the big.
Four properties that help differentiate your how are you thinking about kind of a full blown fund that funding that.
You know wanted to it's a great question and let let's talk.
You know Holistically about how we fund the company and where we move forward I think one of the Big Differentiators of this company is that we have a ton of equity effectively tied up if you will in the big four.
I've talked about it in the past and today is not the right day to.
You know <unk> taken a joint venture partner on assembly or on Santana, but but.
Those markets will open up and we want to be ready to be able to do that I do think that that when you think about the long term plan.
Federal there that harvesting if you will.
Some of the great work that we've done on I'm sitting here right now at Assembly row. This is where we had our board meeting.
Today, I'm looking out this window and.
We're real proud of what we created here and it's a ton of value. So yes on the over the medium term that is a critical source of funding and one that is I believe will will trade will show up when we show it when we can we can do that at well under.
Well, you know what what instrument common stock would effectively.
Be at because I don't think we're getting paid for the value that that we did here. So that's a critically important part in addition to it when you talk about the nearer term funding plan Dan can talk about you know that the capital markets are open to us and have been open to tell it's even in the worst.
Of time so.
They they the notion of using all of the arrows in our quiver.
Over the next year or so is what you should expect as we normally would run the company, but longer term there is theres a special lower cost of capital tied up in this company, that's going to really help us grow over the medium term.
Okay.
The next question comes from Michael Goldsmith of UBS. Please go ahead.
Good afternoon. Good evening. Thanks, a lot for taking my question questions on Santana row.
And more specifically Santana west whats the latest and greatest.
The leasing conversations that you're having there and.
As you talk to tenants are they thinking through return to office and how return to office looks at a mixed use center versus.
Traditional office setting and is that part of the conversations there.
And is that driving momentum.
This is the kind of return to office kind of continues to.
Thanks.
Yes, Michael that's a great question, let me, let me give you a little bit here, and then and as Jeff where are you on to expand to the extent, there's something else to say.
The important thing to understand here I do believe there's a stabilization.
Happening in in the Valley and I think if you lived out there so the press and everything out there you say huh Navy, we are getting to some sort of a period of time, where things can start happening where in some earnest and frankly advanced negotiations.
With tenants for space right now that are looking at our space simply because of where it is at Santana row simply because that is a brand new product that is fully monetized and look I've been snake bitten a couple of times before so I'm certainly careful about this but.
I'm pretty confident that we'll have.
Some leasing success in the relatively near future.
Hope I'm right, but not you can say I was wrong, but it feels palpably different.
In the valley than it has has over the last year or two in.
And I know that from a product standpoint. This is the stuff that that I mean, we're getting the views because the type of product that we have because of the fully amortize mixed use environment. This is where it's at.
I think the other thing I would add Michael This is Jan is that we're seeing more than our fair share of looks right now in the marketplace.
The reason that dawn laid out everyone were talking to wants to have the courage to bring their people back into the office, where they want to go to work those are the type of tenants. We're talking to you right now and its single path.
Our next question comes from Greg Mcginniss Scotiabank. Please go ahead.
Hey, good evening.
Just hoping you could touch on what you're seeing in terms of acquisition opportunities within the market today, whether you're starting to see a narrowing of bid ask spreads and whether there's properties out there.
Of the quality that you'd be looking to acquire.
Hey, Greg it's Jeff.
The market's starting to pick up a little bit there's been a handful of trades or maybe slightly less than a handful of trades.
In our West coast markets.
Cap rates to start with a five theres probably another couple of handfuls of deals in the marketing process on both east and West Coast.
Well, we would we would look to buy and the expectations. There are sub six so we're starting to see.
More stuff come to the market and.
The bid ask spreads start to narrow.
As you know we have a very active team.
We're always in the market, we're always trying to force stuff before it gets into an auction process.
We'll look at it a lot of stuff, but we're selective to them.
Don't really have anything to talk about at this point, but.
Definitely out there definitely looking in.
Starting to see more activity, so hopefully we'll have something.
Good to report in coming quarters in that regard.
Thanks, Jess and then if I could just follow up on Santana West on the modeling based question, but.
When do you have to stop capitalizing interest on that property is there going to be any sort of disconnect between when a tenant is moving in.
In the interest that's being capitalized there.
Yeah, we fully expect to be able to capitalize them.
Based on our build out plan.
Sure.
The floor by floor and the timing and so forth through the end of 'twenty four.
And we expect to replace.
Yeah.
We expect to have income starting.
As we bring that that capitalized interest are down and so we don't expect the disconnect at the moment, but we'll know more as we get as.
We get leases signed and as we as we continue to build out and see you on the success of the multi tenant approach that we've had in the building.
The next question comes from Handel, St. Joseph Zhou Hao.
Please go ahead.
Hi, there. This is Ravi on the lines are on those and just.
Hope you guys are doing well.
One question here can you comment on your watch list what would you what would you estimate it to be on an ABR basis, and what would you estimate the embedded mark to market would be on that subset.
Look we've done very well with regards to the watch list. So far I mean, I think that with the exception of bed Bath, we've had very little exposure to the failing retailers that we've had to date.
I think that Oh, just generally.
Those that are on our People's radar, whether they'd be joanne or at home or other names like that we have very limited exposure there.
I think Wendy I don't know if there's other comments yeah I mean, we're constantly.
<unk> and <unk>.
And it's not just a watch list.
Going up its size is going down in size and Halloween managing what that means to us and long term. If you look at what bankruptcies I'm feeling pretty good about what I see on our watch list and you look at the bankruptcies Nepad David's bridal on both the buy leases, whereas party city, we have sure.
Like term leases with them and we have one lease out for signature to backfill. The one location in the second location has two letters of intent on it and Tuesday morning, We had three locations with them two of them already signed leases and one is in lease documentation to be executed this quarter, so feeling pretty strong.
The next question comes from Samir Khanal of Evercore. Please go ahead.
Hey, Dan.
I guess similar to last question just on <unk>.
So the watch list and I know you've put into sort of a general reserve I think you said about.
We call it 50 to 75 bps.
I'm just trying to knowing that it's sort of August here and it is that you're just being a little bit conservative or are you do you expect.
Some fallout into the back half of the year, just want to make sure I'm not missing anything and any any insight or any comments you can provide and maybe even <unk>.
Next year right I mean, where do you think that general reserve would be I think it'll be higher lower.
To do this year thanks.
Yeah look.
The first half of the year outside of bed Bath and beyond we're at about 50 basis points of of a credit reserve impact.
Thank you.
As I see.
Stated, we're going to end up with or expect to end up with on bed Bath about 31 basis points for the full year.
Okay, and then with regards to the second half of the year the $50 to 75 basis points. There may be some conservatism in there, but right now we're probably we initially came out with a 100 to 130 basis points to start the year is probably more in the 80 to 100 basis points.
So we've made some real progress there and so hopefully we'll do better than.
And that 50 to 75.
The next question comes from Craig Mailman of Citi. Please go ahead.
Hey, Dan I, just wanted to kind of go through.
There is a fix set essentially.
Sequential dip, which I think is about $4 9 million from <unk>. So I know you already kind of called out the two and a half million dollars.
Three bed Bath rejections could you just kind of bridge the balance of the sequential decline.
For us.
Do you have a big hit there is gonna be the interest expense.
Yeah, we refinanced.
Our bonds.
In the second quarter.
Repaid them effectively on June one so we're going to see the full full quarter there plus the fed continues to raise rates and so yeah. We do have a little bit of exposure on the floating rate side.
And that's probably the lion's share in.
In addition to the bed Bath.
Impact.
<unk> and <unk>.
The next question comes from Lindsay.
Bank of America. Please go ahead.
Hi, everyone and thanks for having me on.
But you did comment upon leasing productivity and that continued to outperform expectations.
Can you talk about the spread that she has done that the leases executed this quarter.
Look less like that.
Moderating, particularly on renewals.
Just wanted to get some more color on you know what tenants are still willing to take and I'm kind of comment on.
The outlook for the.
The trend on on spreads going forward.
I hear you.
I really still believe very much that.
Looking at 7% spread.
Our re leasing spread with the type of bumps that we have inherent in our lease it's really the equivalent of 16% of our company with you you know inherent bumps a 100 basis points less than ours and I think that's a really important thing that we've been talking about over the last few quarters. So when you see seven and you compare.
That that somebody else, who doesn't have the contractual bumps of 11 or 12, we still have better economics, and I don't think thats understood all that well I don't think it's a deceleration it's simply a matter of the mix in the particular quarter. So I don't think you should draw any <unk>.
Trend lines associated with that I've got Italian man when you when you.
I think something that like I'm, making up a number here I'm not sure I get this right, but it's it's it's like three out of four of our leases have have very sick at 3% or better bumps here and there.
That includes anchors and that is a that is a big number and I don't think anybody else can say that I don't know, there's nobody discloses it I get it but when you look at 7%.
Bumps here, let me tell you the economics of that are significantly better because of those pumps.
The next question comes from Stephen Kim of Truest. Please go ahead.
Thanks, and good evening.
Your equity issuance guidance is lowered.
I was just curious how much impact that meet your overall <unk> guidance.
And so from a realistic standpoint is issuing $100 million.
But let's take them, just given where your stock prices.
And when you talked about.
Some of the acquisition opportunities.
<unk> sub six potentially.
Yes.
Is that more attractive than maybe buying back your stock which is trading at.
Mid to high sixes.
And I realize I only have one spectrum, how you make decisions, but just curious overall.
No.
Very good question very good question look with regards to the equity.
It's just an assumption that we layer in for our guidance it doesn't make a huge difference between the $200 million that we I think that we had previously so I wouldn't read too much into that I think that it's just.
A number that is in there too for and assumption to get to that midpoint of $6 52.
And in the range that we have and with respect to buying back stock I mean look I don't think it's a yeah.
Particularly attractive use of our capital today.
Given we've got potentially a we want to preserve our dry powder for better opportunities.
Currently.
And think that.
We will focus on acquisitions and Redevelopments, given where were currently trading and keeping I guess, just just one more time, yes, certainly hear lots of companies, let's say, they're going to buy back stock and share repurchases are great and all but I got to tell you.
Unless you're doing it in size to really you know.
Change the capitalization of the company and effectively have a broader notion of that doesn't move the needle.
So the idea of of of you know him.
Unless it's deeply deeply discounted and stays deeply deeply discounted for a long period of time and and so kind of what we see on the horizon here and the opportunities that we'd like to put money to work on driving up leveraged by a by buying back stock doesn't doesn't make sense for us in the long term even if it does.
Ill provide a little while but again how much in the short term and to the extent, we don't like where our stock is trading we've got a pool of assets that we'll opportunistically look to sell in the market and try and obtain more attractive pricing than where our stocks trading. So we've got multiple arrows in.
Quiver to fund the business going forward.
Our next question comes from Dori Kesten of Wells Fargo. Please go ahead.
Hi, Thanks, good evening.
What refinancing options that you're considering senior 24 maturities and then where is that pricing today.
With regards to the $600 million that we have coming due in January look we are we're in the market.
Assessing it it's not particularly opportunistic today.
We raised 350 million back in April I think we feel pretty good about that at five and three eights coupon for $350 million look we've got access to the market I think today it would be kind of in the upper fives that we were to access the market today, we don't particularly find that attractive, but we've got time and so we've got <unk>.
<unk> arrows in the quiver, there as well and options and we will look to be opportunistic.
So who knows where it will be.
Over the next several months, but.
We'll get it done.
Our next question comes from Mike Mueller of Jpmorgan. Please go ahead.
Yeah, Hi, just a quick follow up on the rent bump discussion, what's the average portfolio escalator for the overall portfolio and then if you look at <unk>.
First half of the year leasing how did the how did the bump on those leases compared to the overall portfolio.
Yes, blended it's in and around roughly two and a quarter across the entire portfolio anchors and small shops.
And this quarter was kind of in line with that maybe a little bit a little bit shocked and that's retail only.
Obviously to the extent that we have other commercial leases they tend to be higher and they tend to have annual bumps that drives that blended spread up.
And by the way my congratulations to those oreos they look fantastic.
Okay.
The next question comes from Floris Van <unk> of Compass point. Please go ahead.
Hey, guys. Thanks by the way.
I ran into Mike one of your competitors centers.
The other night and he was wearing as the oriole scarp. So he is not afraid to launch is a success this year.
Sure.
[laughter] Yankee fans Unfortunately have to suffer this year.
Mike.
Look I.
I think you guys are one of two shopping center companies that have raised your guidance.
Where the midpoint is above consensus if I'm not mistaken.
So again that should be.
Pretty pretty positive.
There are.
Some some.
Obviously, the financing is going to be potentially an issue that everybody has to deal with it at higher rates.
I was actually encouraged by the green bonds, what are the things I'd love to get some more detail on this because I think this is sort of a a virtuous cycle. If you will because I think part of the maybe talk about the rate differential of those green bonds relative to regular bonds, probably not as much today, but also.
Talk about what you need to do to qualify for that and what kind of return on investments.
And and sort of lasting power that will have on the overall portfolio in terms of energy efficiency.
Etc, and water usage.
Okay, and just with regards to pricing look.
We don't do it for the for the incremental pricing you could say that there's probably incremental demand and what that means for pricing with the bonds and so forth I think is it's difficult to quantify.
In today's market, we do it because honestly, we like to highlight the fact that when we develop in our mixed use communities. We develop it lead goals are better we've got a LEED gold.
Certified neighborhood designation of Pike, <unk> Rose, which is one of only a dozen I think in the country.
ESG is an important part I think dawn Becker should may be kind of.
Highlight what we are.
Some of the more specifics, but look we do the green bond because I think it kind of showcases what we do but it also expands the universe of potential investors, who will look at the bonds and if it gives us better pricing that's great, but it just it enhances execution and I think that's the most important thing.
The next question comes from Linda Tsai of Jefferies. Please go ahead.
Hi, the comparable at signed but not occupied pipeline of I think $34 million in the non comp of 17 million, what's the cadence of the about $50 million coming online.
Well, it's not 50, it's 34 I mean, the total is 34 and there are 17.
The existing portfolio and there are 17, and the non comparable portfolio of space to be delivered that'll come online about 45% or $15 million is scheduled to commence the balance of this year.
And then the bad debt the remainder of $19 million.
The lion's share of that almost all of it will come on in 'twenty four.
And it's a little bit more weighted in the fourth quarter than it is in the third quarter of this year.
The next question comes from Paulina Rosa of Green Street. Please go ahead.
Hello.
I'm looking at your disclosure capital expenditure.
Most of them are complex.
<unk> continued to pace nicely.
Yeah.
Hi.
Can you provide some background.
And driving that.
Capex.
Yeah.
The lower Capex that you're seeing this quarter.
Yeah.
But I think you are.
Yes.
Kevin.
But.
<unk> last year.
And as you can see.
Hey, guys Paul anything you know, we're having a hard time hearing you.
I don't know what the connection or not we're going to try to answer this I guess on the on the capital we're not giving you what you want please give us a call directly.
Called banner Melissa after this and we'll get you specifically, what you want but we're going to take a shot I guess.
The numbers that you're referring to I'm not quite sure. So we'll follow up with you after the call.
Kind of follow up on this one thing to notice, yes capital is down on the quarter and.
And I think that.
We feel good about that.
But we can't we can add to your specific question will follow up.
Evening.
Yeah.
This concludes our question and answer session I would like to turn the conference back over to Leah Brady for any closing remarks.
Thanks for joining US Tonight I hope you have a great rest of the summer I look forward to seeing you Tim.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
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Okay.
Okay.
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No.
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Okay.
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