Q4 2023 SITE Centers Corp Earnings Call

Operator: Good day and welcome to Site Center's fourth quarter 2023 operating results conference call. All participants will be in a listen-only mode.

Good day and welcome to the site centers reports fourth quarter 2023 operating results conference call.

All participants will be in a listen only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. (Inaudible) To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note that this event is being recorded. I would now like to turn the conference over to Stephanie Ruste Perez, Vice President, Capital Markets. Please go ahead.

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Stephanie Perez: Thank you. Good morning, and welcome to CiteCenter's fourth quarter 2023 earnings conference call. Joining me today are Chief Executive Officer David Lukes and Chief Financial Officer Conor Fennerty. In addition to the press release distributed this morning, we have posted our quarterly financial supplement and slide presentation on our website at www.citecenters.com, which are intended to support our prepared remarks during today's call. Please be aware that certain of our statements today may contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from our forward-looking statements.

Thank you good morning, and welcome to the site centers fourth quarter 2023 earnings Conference call. Joining me today are Chief Executive Officer, David Lukes, and Chief Financial Officer Conor Kennedy. In addition to the press release distributed this morning, we have posted our quarterly financial supplement and slide presentation on our website at www.

Site centers Dotcom, which are intended to support our prepared remarks during today's call. Please.

Please be aware that certain of our statements today may contain forward looking statements within the meaning of federal Securities laws. These forward looking statements are subject to risks and uncertainties and actual results may differ materially from our forward looking statements additional information may be found in our earnings press release and in our filings with the SEC, including our most.

Stephanie Perez: Additional information may be found in our earnings press release and in our filings with the SEC, including our most recent reports on Form 10-K and 10-Q. In addition, we will be discussing non-GAAP financial measures on today's call, including FFO, operating FFO, and same-store net operating income. Descriptions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in today's quarterly financial supplement and investor presentation. At this time, it is my pleasure to introduce our Chief Executive Officer, David Lukes.

Recent report on Form 10-K, and 10-Q. In addition, we will be discussing non-GAAP financial measures on today's call, including <unk> operating FSL and same store net operating income descriptions and reconciliations of these non-GAAP financial measures. The most directly comparable GAAP measures can be found in todays quarterly financial supplement.

After a presentation at this time, it's my pleasure to introduce our Chief Executive Officer, David Lukes.

David R. Lukes: Good morning, and thank you for joining our quarterly earnings call. The fourth quarter was significant for site centers, to say the least, highlighted by the announced planned spinoff of the convenience portfolio from within site centers into a new and unique focus growth company called TurbLine Properties. This announcement, along with nearly a billion dollars of transaction activity, has put us on a dual path of growing our curbline portfolio through acquisitions and realizing NAV of the site center's portfolio through dispositions and asset management. We are only three months past the spin-off announcement, but we have made substantial progress on the business plans for both site and curb, with more progress to come. I'll start with an update on Curb Lines, transition next to transactions, and then conclude with an update on the quarter and operations before turning it over to Conor to talk about how all of this impacts the balance sheet and 2024 results.

Good morning, and thank you for joining our quarterly earnings call.

The fourth quarter with significant precise ventas to say the least highlighted by the announced plans to spin off of the convenience portfolio from within site centers into a new and unique focused growth company called curb like properties.

This announcement, along with nearly a $1 billion of transaction activity has put us on a dual path of growing our curb line portfolio through acquisitions and realizing N. A V of the site centers portfolio through dispositions and asset management.

We are only three months past the spinoff announcement, but it made substantial progress on the business plans for both site incur with more progress to come.

I'll start with an update on curb line trends.

Transition next day transactions, and then conclude with an update on the quarter and operations before turning it over to Conor to talk about how all of this impacts the balance sheet and 2024 results.

David R. Lukes: Starting with CurbLine, we began investing in convenience assets over five years ago, and after several years of transaction activity, reviewing data analytics, and financial and tenant analysis, we are more convinced than ever that the convenience sector is both differentiated and a unique growth opportunity. As announced, to seize this opportunity, we are creating CurbLine Properties as a unique first-mover REIT that is differentiated from all other retail REITs and has what we believe to be the highest organic cash flow growth potential, driven by annual bumps, the ability to recapture and mark-to-market units, a high quality and diversified tenant roster with minimal concentration risk and limited CapEx needs as compared to other property types. Same-store NOI for the current Curb Line Portfolio is expected to grow 4.5% in 2024 and average greater than 3% for the next three years when factoring in all of these attributes.

Starting with curb line, we began investing in convenience assets over five years ago and after several years of transaction activity reviewing data analytics and financial and credit analysis, we are more convinced than ever that the convenience sector is both differentiated and unique growth opportunity.

As announced to seize this opportunity we are creating curb line properties as a unique first mover read that is differentiated from all other retail rates and has what we believe to be the highest organic cash flow growth potential.

Driven by annual bumps the ability to recapture and mark to market units are high quality and diversified tenant roster with minimal concentration risk and limited capex needs as compared to other property types.

Yeah.

Same store NOI for the current curb line portfolio is expected to grow four 5% in 2024 and average greater than 3% for the next three years when factoring in all of these attributes.

David R. Lukes: As of the year end, the Curve Line portfolio included 65 wholly owned convenience properties expected to generate about $76 million of NOI in 2024. All these assets share common characteristics, including excellent visibility, access, and what we believe are compelling economics, highlighted by limited CapEx needs. Arguably, what we own today represents the largest, highest quality convenience portfolio in the United States. These properties, which primarily cater to daily customer errands, are an integral part of the suburban lifestyle, which has only become more entrenched with increased suburban migration and the rise of hybrid work. And combined with a balance sheet that is truly unmatched, with no outstanding debt and cash, and a preferred investment on hand, CurbLine Properties is expected to generate best-in-class growth and returns for stakeholders. As of today, we expect the spinoff to be completed on or around October 1st of this year.

As of the yearend the curb line portfolio included 65 wholly owned convenience properties expected to generate about $76 million of NOI in 2024.

All of these assets share common characteristics, including excellent visibility access and what we believe are compelling economics highlighted by limited capex needs.

Arguably what we own today represents the largest highest quality convenience portfolio in the United States.

These properties with primarily cater to daily customer Arens are an integral part of the suburban lifestyle, which has only become more entrenched with increased suburban migration and the rise of hybrid work.

And combined with the balance sheet that is truly unmatched with no outstanding debt and cash and a preferred investment on hand curb line properties is expected to generate best in class growth and returns for stakeholders.

As of today, we expect the spinoff to be completed on or around October one of this year.

David R. Lukes: Based on the transactions completed to date, we now expect Curb to be capitalized with $600 million of liquidity, or $100 million more than a few months ago, in the form of cash and a preferred investment in site center. Additionally, should we make more progress on the dispositions front, it is likely that CURB would not retain a preferred investment in the site and would be capitalized simply with no debt and $600 million of cash. To that point, moving to transactions, we sold $736 million of wholly-owned properties in the fourth quarter at a blended cap rate of 6.5%. Subsequent to year end, we sold another $82 million.

Based on the transactions completed to date, we now expect curb to be capitalized with $600 million of liquidity or $100 million more than a few months ago.

In the form of cash and the preferred investment in site centers.

Additionally, should we make more progress on the dispositions front. It is likely that curb would not retain a preferred investment in site and would be capitalized simply with no debt and $600 million of cash.

To that point moving to transactions, we sold $736 million of wholly owned properties in the fourth quarter at a blended cap rate of six 5%.

Subsequent to year end, we sold another $82 million.

David R. Lukes: As of today, the pace of dispositions has remained robust, and the pricing of those assets has remained strong, resulting in almost $750 million of real estate currently either under LOI or in contract negotiation at a blended cap rate of roughly 7%. The bulk of this inventory is primarily sub-market dominant power centers, with roughly 30% of the assets by value containing a traditional grocery. Needless to say, the level of demand speaks to the quality of the site center's portfolio and highlights the opportunity that we identified with the spinoff announcement. Over the past six years, this management team has sold over $7 billion in shopping. Through that process, Jon Katenauer and his team have gained a very good understanding of which buyers are seeking high-quality assets.

As of today the pace of dispositions has remained robust and the pricing of those assets has remained strong resulting in almost $750 million of real estate currently either under LOI or in contract negotiation at a blended cap rate of roughly 7%.

The bulk of this inventory is primarily sub market dominant power centers with roughly 30% of the assets by value containing a traditional grocer.

Needless to say the level of demand speaks to the quality of the site centers portfolio and highlights the opportunity that we identified with the spinoff announcements.

Over the past six years. This management team has sold over $7 billion of shopping centers grew.

Through that process, John <unk> and his team have gained a very good understanding of which buyers are seeking high quality assets.

David R. Lukes: These parties include a wide range of market participants, including both private buyers and public REITs. In all cases, these buyers know the assets, they know our sub-markets, and they are often unloved acquirers of high-quality real estate. The site center's portfolio fits that mold, having been carefully selected via the RBI spinoff and our joint venture online, and remains extremely attractive to a wide range of buyers looking to invest in open-air retail real estate. The retail operating environment has dramatically shifted post-pandemic with limited supply and higher demand from a broader set of tenants, trends that should support fundamentals for the sector for years. The macro tailwinds, along with company-specific factors like Cite's S&O pipeline, which represents 4.2% of spin-adjusted base rent, along with redevelopment deliveries and the lease-up of vacant units, are expected to generate substantial forward NOI growth.

These parties include a wide range of market participants, including both private buyers and public REIT.

In all cases, these buyers and L. D assets, they know our submarkets and they are often unlevered acquirers of high quality real estate.

The site centers portfolio fits that mold.

Having been carefully selected via the RV I spinoff and our joint venture on the lines and remains extremely attractive to a wide range of buyers looking to invest in open air retail real estate.

The retail operating environment has dramatically shifted post pandemic with limited supply and higher demand from our broader set of tenants trends that should support fundamentals for the sector for years.

The macro tailwind along with company specific factors like sites F. N O pipeline, which represents four 2% of spin adjusted base rent along with redevelopment deliveries and the lease up of vacant units are expected to generate substantial forward NOI growth.

David R. Lukes: These two factors combined, our knowledge of the buyer universe plus sector and specific tailwinds makes us very confident in maximizing value on additional sites on his properties via private market asset sales. Going forward, I would expect CITE to continue to focus on this compelling value creation opportunity and the NAB arbitrage. In terms of acquisitions, we acquired four convenience properties for $62 million in the quarter in Charlotte, Cape Coral, Atlanta, and Phoenix. Average household incomes for the fourth quarter investments were over $104,000 and a weighted average lease rate of almost 100 percent, highlighting our focus on acquiring properties where the renewals and lease bumps drive growth without significant capex. Going forward, we remain encouraged by the unique opportunities in the convenience subsector, including the size of the opportunity itself. The addressable market for convenience assets, according to ICSE, is 950 million square feet.

These two factors combined our knowledge of the buyer universe plus sector in specific tailwind it makes us very confident and maximizing value on additional sites on as properties via private market asset sales.

Going forward I would expect site to continue to focus on this compelling value creation opportunity and the NAV arbitrage.

In terms of acquisitions, we acquired for convenience properties for $62 million in the quarter and Charlotte Cape Coral Atlanta and Phoenix.

Average household incomes for the fourth quarter investments were over $104000 and a weighted average lease rate of almost 100% highlighting our focus on acquiring properties, where the renewals and lease bumps drive growth without significant capex.

Going forward, we remain encouraged by the unique opportunities and the convenience sub sector, including the size of the opportunity itself the.

The addressable market for convenience assets. According to ICSC is 950 million square feet.

David R. Lukes: Curb Line's current portfolio, comprising 2.2 million square feet, represents one quarter of one percent of total U.S. inventory, meaning we have plenty of room to grow. That said, while we expect to acquire additional properties prior to the spin, we are prioritizing dispositions to take advantage of demand for site assets, which will act as a governor of sorts to acquisition volume in 2024. Ending with the quarter and operations, we had a very productive fourth quarter with results ahead of budget. Our property operations teams continue to do a great job getting tenants open for business ahead of schedule, which drove part of our outperformance this quarter. Overall quarterly leasing volume was down sequentially, but this was largely a function of a smaller portfolio and less availability.

<unk> current portfolio, comprising $2 2 million square feet represents one quarter of 1% of total U S inventory, meaning we have plenty of room to grow.

That said, while we expect to acquire additional properties prior to the spin we are prioritizing dispositions to take advantage of demand for sites assets, which will act as a governor of sorts to acquisitions volume in 2024.

Ending with the quarter and operations, we had a very productive fourth quarter with results ahead of budget.

Our property operations teams continued to do a great job getting tenants opened for business ahead of schedule, which drove part of our outperformance this quarter.

Overall quarterly leasing volume was down sequentially, but this was largely a function of a smaller portfolio and less availability.

David R. Lukes: Leasing demand continues to be very strong from both existing retailers and service tenants expanding into key suburban markets, along with new concepts competing for the same space. And, and, and, [inaudible] Ten voices point sequentially due to a 50 basis point headwind from significant fourth quarter asset sales, which averaged 98% lease. Looking forward, we have another 350,000 square feet at share in lease negotiation, including effectively all of our remaining bed bath square footage, which we expect to be completed over the next two quarters at similar spreads and economics than the trailing 12-month figures reported today. We continue to expect commencement of our signed leases to be the material driver of our same property NOI growth over the course of 2024. Before turning the call over to Conor, I want to thank everyone on the CITE Center team for their work leading up to this announcement and over the last few months.

Leasing demand continues to be very strong for both existing retailers and service tenants expanding into key suburban markets, along with new concepts competing for the same space.

Despite the strength of execution from our leasing team our leased rate was down 10%.

10, perhaps 10 basis points sequentially due to a 50 basis point headwind from significant fourth quarter asset sales, which averaged 98% leased.

Looking forward, we have another 350000 square feet at share in lease negotiation, including effectively all of our remaining bed Bath square footage, which we expect to be completed over the next two quarters at similar spreads and economics than the trailing 12 month figures reported today we.

We continue to expect commencement of our signed leases to be a material driver of our same property NOI growth over the course of 2024.

Before turning the call over to Conor I want to thank everyone at the site centers team for their work leading into this announcement and over the last few months.

David R. Lukes: The spinoff of Curb Line Properties is possible due to the work of truly everyone across the organization, and it positions us for growth. We strongly believe that the compelling opportunity in front of us is to create significant value for the company's stakeholders. And with that, I'll turn it over to Conor.

The spin off a curb line properties as possible due to the work of truly everyone across the organization and it positions us for growth. We strongly believe that the compelling opportunity in front of us is to create significant value for the company stakeholders and with that I'll turn it over to Conor.

Conor M. Fennerty: Thanks, David. I'll start with fourth-quarter earnings and operations before concluding with the 2024 outlook and updates to the balance. As David noted, fourth quarter OFFO was ahead of budget due to better than expected operations and higher interest income, partially offset by higher operating and G&A expenses. We had about $2 million of higher landlord and CAM expenses in the quarter related in part to some seasonal items, including snow removal, that we do not expect to reoccur. Outside of these items, there were no other material callouts in the quarter, moving to operations.

Thanks, David I'll start with fourth quarter earnings and operations before concluding with the 'twenty 'twenty four outlook and updates to the balance sheet.

As David noted fourth quarter <unk> was ahead of budget due to better than expected operations and higher interest income, partially offset by higher operating and G&A expenses.

Specific to operating expenses, we had about $2 million of higher landlord and Cam expenses in the quarter related in part to some seasonal items, including snow removal that we do not expect to reoccur.

Outside of these items there were no other material callouts in the quarter.

Moving to operations fourth quarter leasing volume was lower due to the significant dispositions that David highlighted in the back half of the year, along with lots available space.

Conor M. Fennerty: Fourth quarter leasing volume was lower due to the significant dispositions that David highlighted in the back half of the year, along with less available space. With this smaller denominator, operating metrics will become more volatile. But based on the leasing pipeline at year-end, we expect spreads to be consistent with trailing 12-month levels over the course of the year. Overall, leasing activity and economics remain elevated, and we remain confident in the backfill of the remaining vacancies, highlighting the quality of the portfolio and depth of demand. Moving to 2024, as David noted, we're extremely excited to form and scale the first publicly traded REIT focused exclusively on community assets. And based on the mortgage commitment announced in October, along with recent transaction and financing activity, we have positioned both SITE and CurbLine with the balance sheets that they need to execute on their business plans. As a result of the plan spinoff and significant expected asset sales, we are not providing a formal 2024 FFO guidance range.

With this smaller denominator operating metrics will become more volatile based on the leasing pipeline at year end, we expect spreads to be consistent with trailing 12 month levels over the course of the year.

Overall leasing activity economics remain elevated and we remain confident on the backfill of the remaining vacancies highlighting the quality of the portfolio and depth of demand.

Moving to 2024 as David noted we are extremely excited to form and scale. The first publicly traded REIT focused exclusively on convenience assets.

And based on the mortgage commitment announced in October along with recent transaction and financing activity, we have positioned both site and curb line with the balance sheets that they need to execute on their business plans.

As a result of the planned spinoff and significant expected asset sales, we are not providing a formal 2024 <unk> guidance range.

Conor M. Fennerty: We are providing projections, though, for total portfolio NOI for the SITE and CURB portfolios that include all properties owned as of year-end. And as we move forward over the course of the year, we expect to update the projection ranges for transaction activity. For the current portfolio, total NOI is expected to be roughly $76 million at the midpoint of the projected range before any additional acquisitions, and same-store NOI growth is expected to be between 3.5 and 5.5% for 2024. For the site portfolio, total NOI is expected to be roughly $265 million at the midpoint of the projected range before any disposition. Additional details on the assumptions underpinning these ranges are in our press release and earnings slides. In terms of other line items, we expect JBCs to average around $1.25 million per quarter and GNA to average around $12 million per quarter prior to this plan's spin-off.

We are providing projections, though for total portfolio NOI for the site and curb portfolios that include all properties owned as of year end.

And as we move forward over the course of the year, we expect to update the projection ranges for transaction activity.

For the current portfolio total NOI is expected to be roughly $76 million at the midpoint of the projected range before any additional acquisitions and same store NOI growth is expected to be between three and a half and five 5% for 2024.

For the site portfolio total NOI is expected to be roughly $265 million at the midpoint of the projected range before any dispositions.

Additional details on the assumptions underpinning. These ranges are in our press release and earnings slides.

In terms of other line items, we expect JV fees to average around one point to $5 million per quarter.

And G&A to average around $12 million per quarter prior to the planned spin off.

Conor M. Fennerty: Given the significant cash balance on hand, interest income is likely to remain elevated in the first half of the year, though it will obviously be dependent on short-term rates and any debt repayment activity. Transaction volume, particularly the timing of asset sales, is expected to be the largest driver of quarterly FFO, and the fourth quarter included $4.5 million of NOI from assets sold in the quarter, as detailed in the Supplement. Moving to the balance sheet, in terms of leverage, at quarter end, debt to EBITDA was 4.2 times, with a net debt yield north of 20%.

Given our significant cash balance on hand interest income is likely to remain elevated in the first half of the year, but we will obviously be dependent on short term rates and any debt repayment activity.

Transaction volume, particularly the timing of asset sales is expected to be the largest driver of quarterly <unk> in the fourth quarter included $4 $5 million of NOI from assets sold in the quarter as detailed in the supplement.

Moving to the balance sheet in terms of leverage at quarter end debt to EBITDA was four two times with a net debt yield north of 20%.

Conor M. Fennerty: Over the course of 2024, we expect leverage to continue to decline with debt to EBITDA below four times. Prior to drawing on the $1.1 billion mortgage commitment, we expect to maintain a significant, primarily unencumbered asset base, providing additional scale and collateral for site stakeholders. We repaid the 2024 notes and one wholly-owned mortgage in the fourth quarter and expect to retire the majority of outstanding consolidated debt prior to the spin with proceeds from the mortgage commitment. This mortgage will be secured by 40 properties that are expected to be part of Skype Center's post- Funding is expected to occur prior to the spinoff, subject to the satisfaction of closing conditions. For curb line properties, the company at the time of the spin is expected to have no debt.

Over the course of 'twenty 'twenty four we expect leverage to continue to decline with that debt to EBITDA below four times.

Prior to drawing on the $1 $1 billion mortgage commitment, we expect to maintain significant primarily unencumbered asset base, providing additional scale and collateral for site stakeholders.

We repaid the 2024 notes and one wholly on mortgage in the fourth quarter and expect to retire the majority of outstanding consolidated debt prior to spin with proceeds from the mortgage driven.

This mortgage will be secured by 40 properties that are expected to be part of site centers post spin.

Funding is expected to occur prior to the spinoff subject to the SaaS action and closing conditions.

For her buying properties the company at the time to spend is expected to have no debt.

Conor M. Fennerty: Now with $300 million in cash and a $300 million preferred investment in SightCenter, this highly liquid balance sheet will allow CurbLine to focus on scaling its platform while providing the capital to differentiate itself from the largely private buyer universe acquiring communities' property. Additionally, as David noted, depending on the level of asset sales completed prior to the spin, we may look to fund Curve entirely with cash and no preferred investment in sight. Details on sources and uses and projected capital structures can be found on pages 12 and 13 of the earnings log. Lastly, as a result of 2023 transaction activity, site centers paid in January 2024 a special dividend of $0.16 per share. The dividend was funded with cash on hand. The company also declared its first quarter dividend of $0.13 per share, which is unchanged from the fourth quarter.

Now $300 million of cash and a $300 million preferred investment insight centers.

This highly liquid balance sheet will allow curb line to focus on scaling its platform, while providing the capital to differentiate itself from the largely private buyer universe acquiring communities properties. Additionally.

Additionally, as David noted depending on the level of asset sales completed prior to the spin we may look to fund curb entirely with cash and no preferred investment in site.

Details on sources and uses and projected capital structures can be found on pages 12, and 13 of the earnings slides.

Lastly, as a result of 2023 transaction activity site centers paid in January 'twenty 'twenty for a special dividend of <unk> 16 per share.

The dividend was funded with cash on hand.

The company also declared its first quarter dividend of <unk> 13 per share, which is unchanged from the fourth quarter.

David R. Lukes: With that, I'll turn it back to David. Thank you, Conor. Operator, we're now ready to take questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing.

That I will turn it back to David.

Thank you Connor operator, we're now ready to take questions.

We will now begin the question and answer session.

I ask a question you May press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your, [inaudible] At this time, we will pause momentarily to assemble our rockets. The first question today comes from Alexander Goldfarb with Piper Sandler. Please go ahead. Hey, good morning, good morning.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

The first question today comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Hey, good morning, good morning.

Yes.

Hi, Good morning, a few question Hey, good morning, just a few questions here just first the big one Dave.

Alexander David Goldfarb: Hey, morning, just a few questions here, just, you know, first the big one, David. You know, you're not outlining an RVI-type entity for legacy sites, but still, it's hard not to think about sites ultimately, you know, sort of going away, if you will, especially at the pace of dispositions that you're doing. And clearly, management's focus on curb. So can you just give a little bit more color on how we should think about the site, you know, post October 1st, 2024? Sure, Alan would be happy to.

David.

Youre not outlining an RV I type entity for legacy site, but still it's hard not to think about site ultimately sort of going away. If you will especially at the pace of dispositions that youre doing and clearly managements focus on curb so.

Could you just give a little bit more color on how we should think about site.

<unk> October one 2024.

Sure Alex I'd be happy to I think it really depends on.

David R. Lukes: I think it really depends on what signals we're getting from the public markets and what signals we're getting from the private markets. And at this point, the signals are very strong that the private market values assets at a higher value. And so we're listening to those signals, and we continue to sell assets. Should that continue, then those asset sales will probably pick up. You can see how much activity we have going on right now at values that I think are very strong. So moving forward, all I can say is, in the time being between now and the spend date, we will continue to sell assets, and we'll reconsider what the strategy is and what the eventual outcome is at that time. Okay.

What signals, we're getting from the public markets and what signals, we're getting from the private markets and at this point the signals are very strong that the private market values assets.

The higher value and so we're listening to those signals and we continue to sell assets should that continue then those asset sales.

Probably pick up.

You can see how much activity, we have going on right now at values that I think are.

Very strong.

So moving forward all I can say is in the time being between now and it's been date, we will continue to sell assets.

What we consider what the strategy is and what the eventual outcome is at that time.

Okay, and then on cap rates I think the prior batch that you sold.

David R. Lukes: And then on cap rates, I think the prior batch that you sold year end into early this year, I think you averaged a six and a half on dispositions. And you're saying now that the next batch looks to be a seven. And I don't recall what you said about curb asset acquisitions, but could you just talk a little bit more about cap rates? And then also, can you talk about IRRs? So when you look at these assets, the ones you're selling, and then the ones you're buying, it almost sounds like, based on your comments, literally the... Transcribed by https://otter.ai. It sounds incredible, but I just wanted to get a little bit more perspective on that, and then maybe, as part of that, you could just talk about what you're finding on credit quality as far as expectations for bad debt as you Sure.

Year end into early this year I think you averaged six five on dispositions you are seeing now the next batch looks to be a seven.

And I don't recall, what you said on the curb asset acquisitions, but can you just talk a little bit more about cap rates and then also can you talk about IRR. So when you look at these assets the ones you're selling and then the ones you're buying it almost sounds like based on your comments literally the.

Convenience assets not on not only have lower capex needs, but actually have higher returns, which sounds incredible, but just wanted to get a little bit more perspective on that and then maybe as part of that you could just talk about what you are fighting on credit quality as far as expectations for bad debt.

As you underwrite the curb assets.

David R. Lukes: Well, on cap rates, you know, I think you and I have discussed numerous times how it's difficult to pin down cap rates when the number of transactions are, you know, a handful here and there. I will say that the assets closed in the fourth quarter that were averaging a six and a half cap did have a wide range of formats, as well as a wide range of cap rates. We sold some assets in the low fives, and we sold some assets in the high sevens. This next group, where we're under LOI, we've awarded deals, and we're starting to negotiate contracts, it's the same thing. There are some properties that are low sixes; there are some properties that are high sevens. So I think the average is an interesting note, and I do think the average of six and a half in the last batch and seven in this batch is right.

Sure well on cap rates.

And I have discussed numerous times it is difficult to pin down cap rates when the number of transactions are a handful here and there.

We'll say that.

The assets closed in the fourth quarter that were averaging a six five cap did have a wide range.

Formats as well as the right wide range of cap rates, we sold some assets in the low fives and we sold some assets in the high Sevens.

This next group, where we're under LOI, we've awarded deals and we're starting to negotiate contracts.

The same thing there are some properties that are low sixes theres. Some properties that are high sevens. So I think the average is an interesting note and I do think the average of six and a half in the last batch seven in this batch.

David R. Lukes: I don't know what that means going forward. I don't know if the additional properties we have are going to be higher or lower. What I have found is that private market participants are less focused on the retail format, and they're more intrigued by the credit quality, the sub-market that the asset lies in, and the duration of the lease term.

I don't know what that means going forward I don't know it.

The additional properties, we have are going to be higher or lower.

What I have found is that the private market participants are less focused on retail format and theyre more intrigued by the credit quality the submarket that the asset lives in and the duration of the lease term and in that sense. The site centers portfolio fits that mandate of a lot of private buyers because we are in.

David R. Lukes: And in that sense, the site center's portfolio fits that mandate of a lot of private buyers because we are in high-income demographics. The lease-up has been so robust in the last two or three years that the duration is pretty strong. And the weaker tenants, like FedBap and beyond, have largely left the portfolio. So it feels like the private market participants are putting a higher value on those assets, which means that we fit those mandates. One of the things that, as you know, also contributes to a lot of activity is the presence of a grocery store. We still have more than two dozen centers that have a grocery store attached to them in our portfolio today, and the average sales are quite high. There are a number of them that are more than $1,000 a square foot.

High income demographics, the lease up has been so robust in the last two or three years that the duration is pretty strong and the weaker tenants like bed Bath and beyond have largely left the portfolio. So it feels like the private market participants are putting a higher value on those assets, which means that we fit those mandates.

One of the things that as you know also contributes do a lot of activity is the presence of a grocery store.

We still have more than two dozen centers that have a grocery store attached to them in the portfolio today and the average sales are quite high.

There's a number of them that are more than $1000 a square foot. So I do think that the valuation that we'd been seeing feels to be consistent with what I would expect the next couple of months to be.

Craig Allen Mailman: So I do think that the valuation that we've been seeing feels to be consistent with what I would expect the next couple of months to be. So our view on cap rates is that buyers are seeing the value of this duration and this credit quality, and we're seeing the outcome of that. On the buy side, where we're buying convenience properties, the main difference between what we're selling and buying is growth and the cost of that growth. So if we can deliver a much higher same-store number, but the cost to generate that is significantly less, I do agree with you that the unlevered IRR of the convenience properties is higher than what we're selling today. Thank you. Thanks, Alex. The next question comes from Craig Mailman with Citi. Please go ahead.

So our view on cap rates is that buyers are seeing the value of the duration of this credit quality.

And we're seeing the outcome of that.

On the buy side, where we're buying convenience properties. The main difference between what we're selling and buying is that growth and the cost of that growth. So if we can deliver a much higher same store number but the cost to generate that is significantly less I do agree with you that the unlevered IRR of the convenience properties is higher than <unk>.

What we're selling today.

Thank you.

Thanks, Alex.

The next question comes from Craig Mailman with Citi. Please go ahead.

Thank you.

David R. Lukes: Thank you. I just want to follow up on the sales, at least the case for it, because you guys are, you know, the last couple of quarters have averaged almost $800 million a quarter. You guys have $750 million under contract. Beyond the $750, how much is being marketed currently, and maybe not at the under contract or LOI phase, but kind of close, to give us a sense of, you know, what the cadence could be for the balance of the year? Because it seems like you guys have, what, about $3.5 billion left to sell pro forma for $750 million. Is that about right from a volume perspective? Sure, Craig. It's David.

Sort of a follow up on the sales or at least a piece of it because you guys are you know last couple of quarters have averaged $800 million.

It's a quarter.

You guys have 750 million under contract.

Beyond the 750, how much is being marketed currently.

And maybe not at the under contract or LOI phase, but kind of close to give us a sense of what the cadence could be for the balance of the year because it seems like you guys had about $3 5 billion.

Leftist fel pro forma that $750 million is that about right from a volume perspective.

Sure Craig it's David it's a little difficult to hear you, but I think what you're asking is what's the.

David R. Lukes: It's a little difficult to hear you, but I think what you're asking is what's the total volume of assets that we're marketing? Is that where you're going? Yeah, sorry. I'll talk louder on my phone.

Total volume of assets that we're marketing is that is that where youre going yeah, sorry, I'll I'll I'll talk louder to buy forward yeah. The total volume that you're marketing today and just the fact that the $750 million kind of the that's a pretty similar cadence to what you did in the fourth quarter. So is that is that a.

Craig Allen Mailman: Yeah, the total volume that you're marketing today and just the fact that $750 million is a pretty similar cadence to what you did in the fourth quarter. So is that an achievable quarterly run rate here? And as we think about what's left, it feels like about $3.5 billion.

Achievable kind of quarterly run rate here and as we think about what's left.

Feels like about $3 5 billion is that also kind of the right way to think about kind of what's left here in the near term.

David R. Lukes: Is that also the right way to think about what's left here in the near term? Well, let's see, right now, under LOI and negotiating transactions, like I said. It's about $750 million. There are another two dozen properties that are in various forms of marketing with brokers. That equates to somewhere around an $800 million group that's going to be launching sometime in the next 30 days. The real question is, how much of that transacts? There have been properties that we didn't like the pricing on, and we didn't transact; situations where a buyer has wanted to group a couple of assets together into a small portfolio, that has speeded up the process. So it really comes down to simply how much time John's team has to transact, and is it one by one, or is it in small groups or larger portfolios? So it's really difficult for me to say, other than if we closed 800 million in the fourth quarter, we've got another 750 that's spoken for, and then we've got another 800 that's in an early stage of marketing. It feels like there's still plenty of volume out there.

Well, let's see.

Right now under under LOI and negotiating transactions like I said, it's about $750 million. There is another 2000 properties that are in various forms of marketing with brokers.

That equates to somewhere around an $800 million.

A group that's going to be launching sometime in the next 30 days.

The real question is how much of that transact there had been properties that we didn't like the pricing and we didn't transact there have been <unk>.

Situations, where a buyer who wanted to group a couple of assets together into a small portfolio that has speeded up the process. So it really comes down to simply how much time does johns team have to transact and is it one by one or is it in small groups or larger portfolios. So it's really difficult for me to say other than if we closed $800 million.

The fourth quarter, we've got another 750 that spoken for and then we've got another 800, that's in an early stage of marketing it feels like there's still plenty of volume out there.

Conor M. Fennerty: What I don't know is how much of that closes and how much of it actually transacts. Craig, the only thing I just flagged from a timing perspective, just kind of the cadence of David's point on when assets are being listed, et cetera, you're likely to see a lull between the December closings we had and then the next batch, meaning it's probably a month or two from now, just to give you context. So it's likely not a $750 million first quarter run rate, but to David's point, based on how much we have under our wire contract, plus what's being listed, you could see a lot more volume in the second and third quarters. In terms of your question on the valuation, we did provide the projected NOI ranges for site and curb. So I'll defer to you on kind of what capital you want to put in there, but that should help give you a sense of sizing on the remaining asset base. No, that's helpful.

How much of that closes and how much of it actually transact so Greg on slide from a timing perspective, just kind of a cadence of to David's point when assets are being lifted et cetera, youre likely to see a lull between the December closings, we had and then the next batch, meaning it's probably a month or two from now.

Just to give you a context, so it's likely not a $750 million first quarter run rate, but to David's point based off how much we have under LOI or contract plus what's being listed you could see a lot more volume in the second and third quarters in terms of your question on the valuation we did provide the projected NOI ranges fore sight and curb so.

<unk> are you on kind of what cap rate you want to put in there but that should help.

Give you a sense of sizing on the remaining asset base.

No no that's helpful.

Craig Allen Mailman: And, you know, David, to your point of, you know, the hit rate, kind of, what do you think the hit rate is for the kind of decision to sell versus what's being marketed here? And how does that kind of translate into what you think ultimately, or what are the characteristics that are kind of driving the pricing that you're getting versus maybe some bids that don't fall in? And how far outside of the kind of parameters are some of these bids? And why not just at this point, given the fact that you're, you know, fluctuating in a spin?

David to your point of you know.

The hit rate kind of what do you think the hit rate is on the the kind of decision to sell versus what's being marketed here in and how does that.

It's kind of translate into what you think ultimately or what are the characteristics that are kind of driving the pricing that you're getting versus maybe some bids that don't fall in and how far outside of the kind of the parameters or some of these bids and why not just at this point given the fact that your ear affects.

The weighting of spin.

David R. Lukes: I mean, are they so low-ball that it doesn't make sense just to take them versus continuing to hold out for better pricing here since you ultimately need to wind down this portfolio anyway? Yeah, I would say in the fourth quarter, the bid-ask spread was a little wider, and so there were some properties that we chose not to transact on. What feels like it's changed, Craig, is capital flows. In the second half of last year, there were a number of value-add buyers that were looking at strips, and I think most of what we sold in the fourth quarter was off-market, where John had relationships with 1031 buyers or strategic buyers in a certain market. What seems to have changed in the first quarter is that there is just more capital allocated to strips from core and core plus buyers.

I mean are they so low ball, but it doesn't make sense just to take them versus a continued to hold out for better pricing here since you ultimately need to wind down this portfolio anyway.

Yeah, I would say in the fourth quarter the bid ask spread was a little wider.

And so there were some properties that we chose not to transact on.

It feels like it's changed Craig as capital flows.

In the second half of last year, there were a number of value add buyers that were looking at strips and I think most of what we sold in the fourth quarter was off market, where John had relationships with 10, 31 buyers or strategic buyers in a certain market what seemed to have changed in the first quarter is that there's just more.

Capital allocated to strips from core and core plus buyers.

David R. Lukes: The increase in institutional interest in the last 30 days has been noticeable. So it feels to me like the bid-ask spread has come in, the amount of capital looking for core real estate has gone up, the confidence level of core buyers that the sector has really good fundamentals and tailwind seems higher, and therefore, it feels to me like the transaction activity is likely to stay pretty high, and so I do think the hit rate is probably higher than it was in the back half of last year. Okay, and then just one last one.

The increase in institutional interest in the last 30 days has been noticeable so it feels to me like the bid ask spread has come in.

The amount of capital looking for core real estate has has gone up the confidence level of core buyers that the sector has really good fundamentals in tailwind seems higher.

And therefore, it feels to me like the transaction activity is likely to stay pretty high.

And so I do think the hit rate is probably higher than it was in the back half of last year.

Okay, and then just one last one just I know, we're a couple months past the initial kind of announcement here. So do you guys have any more clarity on the you know the.

Craig Allen Mailman: Just I know we're a couple months past the initial kind of announcement here, so do you guys have any more clarity on the, you know, the management structure, the GNA kind of fee structure that goes along with the spin between site and curb? Then let's remember that the purpose of these two companies is very different. One is getting smaller, and one is getting bigger.

The management structure G&A kind of fee structure.

That goes along with the spend between sight and curb.

Let's remember that the purpose of these two companies are very different one is getting smaller and one is getting bigger.

David R. Lukes: And in order to facilitate that transition, the shared services that we'll be putting in place between the two companies will allow for that G&A to migrate from one company to the other. At the end of the day, once the shared services agreement burns off, I don't expect any overlap in staffing between the two companies. I think we're going to know a lot more in the next six months as to which company needs more staff and which type of leadership. And I would expect that in the next couple of months, quarters, we will certainly be able to give more information to the market. Our board of directors is very focused on the issue.

And in order to facilitate that transition the shared services that we'll be putting in place between the two companies will allow for that G&A to migrate from one company to the other.

At the end of the day once the shared services agreement Burns off.

Don't expect any overlapping staffing between the two companies.

I think we're going to know a lot more in the next six months.

Which company needs more staff, and which type of leadership and I would expect in the next couple of months quarters, we would certainly be able to give more information to the market.

Our board of directors is very focused on the issue.

David R. Lukes: Management is very focused on the G&A issue, and our confidence level that we can eventually run CurbLine at a G&A level that's at least as efficient as site centers today is very high. But there's a transition period, and I think we'll be giving you a lot more detail in the next few quarters, but I don't have a lot to add this morning. Yeah, Craig, just going back to my comment about projections, we've got the NOI ranges. We've actually given you the pieces for some of the parts. And to David's point, as we get close to that spin day, remember, we're still six-plus months away.

Management is very focused on the G&A issue and our confidence level that we can eventually run curb line at a G&A level, that's at least as efficient at site centers of today is very high.

But there is a transition period and I think we will be giving you a lot more detail in the next few quarters, but I don't have a lot to add this morning, Greg. If you think about just going back to my comment about projections. We've got the NOI ranges, respectively, giving you the pieces for some of the parts and to David's point as we get closer to that spend may remember, we're still six plus months off you'll start to see a transition more towards the kind of earnings story.

Conor M. Fennerty: You'll start to see us transition more towards the kind of earning story and giving you the ingredients and pieces. The Form 10 is obviously an important part of that. So, again, I think you'll kind of see a dripping out of information, much like we provide additional information today versus October over the next couple of months. Great, thank you. Thanks, Greg. The next question comes from Todd Thomas with KeyBank. Please go ahead. Hi, thanks. Good morning.

Three.

In giving you the ingredients and pieces the form tens obviously, an important part of that so again I think you kind of see a dripping out of information much like we provide additional information today versus October over the next couple of months.

Great. Thank you.

Thanks, Greg.

The next question comes from Todd Thomas with Keybanc. Please go ahead.

Hi, Thanks, good morning.

Todd Michael Thomas: First, can you just expand a little bit on the investment pipeline for curb properties in the market today, just in terms of the product you're seeing and the pricing? And I think, David, you said that you're emphasizing site-centered dispositions today. But, you know, I'm curious about the volume of acquisitions going forward for the curb entities. Yeah, Todd, there's a certain amount of angst internally because we're all excited to be buying assets.

First can you just expand a little bit on the investment pipeline for occur properties in the market today just in terms of product you are seeing in pricing and I think David you said that you are emphasizing.

<unk> center dispositions today, but I'm curious, how we should think about the.

The volume of acquisitions going forward for the curve entity.

Yeah, Todd the there's a certain amount of angst internally because we're all excited to be buying assets.

David R. Lukes: We've got a lot of opportunities that we're underwriting. The volume of curbline assets that are available at any given time in the U.S. is much higher than I would have thought, so it feels like the addressable market is there. We've been buying somewhere in the mid-six cap rate range, and we feel strongly about the financial returns of that investment. The challenge is simply one-of-time management.

We've got a lot of opportunities that we're underwriting the volume of curb line assets that are available at any given time in the U S is much higher than I would've thought so it feels like the addressable market is there.

<unk> been buying somewhere in the mid six cap rate range, we feel strong strongly about the.

Financial returns of that investment the challenge is simply want a time management, we've got an awful lot of disposition activity going on.

David R. Lukes: We've got an awful lot of disposition activity going on. Like I mentioned to Craig, the amount of capital that seems to be very intrigued with strip centers, as we turn the calendar to 24, it's been high, and so we've been allocating internal resources towards dispositions, and that's on the legal side, that's on the transaction side, that's on the due diligence and underwriting side. It has put a little bit of a governor on how much we can allocate to acquisitions, so I would expect the acquisitions to be a little bit slower over the next couple of months because we're awfully busy selling. Okay, and and. You said that Curb's expected to grow, I guess, on a core same-store basis around 3% or more over the next several years, but in 2024, it's expected to grow 3. Why is 2024 same-store growth more elevated relative to that long-term growth rate target? Can you just talk about what's driving that premium growth in the near term for the Curb segment? Hey, Todd, and Conor. Good morning.

As I mentioned to Craig.

The amount of capital that seems to be very intrigued with strip centers.

As we turn the calendar to 'twenty four it has been high and so we've been allocating internal resources towards dispositions and Thats on the legal side Thats on the transaction side that's on.

These due diligence and underwriting side.

And so it has put a little bit of a governor on how much we can allocate to acquisition. So I would expect the acquisitions to be a little bit slower over the next couple of months, because we're awfully busy on selling.

Okay and.

You said that curbs expected to grow.

Yes on the core same store basis around 3% or more over the next several years, but in 'twenty four.

Expected to grow three 5% to five and a half so four and a half to midpoint. What why is 2020 for same store growth more elevated.

You know relative to that long term growth rate target can.

Can you just talk about what's driving that premium growth in the near term for the.

Curb segment.

Sure Hey, Todd, it's Conor and good morning.

Conor M. Fennerty: There are a couple of factors there, the biggest one being simply just the S&O pipeline and the collapse of the kind of lease and occupancy rates. So much like shopping centers, much like our peers, much like the open air sector, there's just been a lot of leasing volume in the CURB portfolio. And then we expect that kind of occupancy gap to compress over time. The other member advantage of the CURB portfolio is you just have less downtime. And so if you think about if you got space back over the last couple of years, the downtime to backfill it is a lot shorter versus an anchor. And so you're just seeing kind of that compression or timeline to get those spaces backfilled in a much shorter period, which is driving the growth. The other thing is we had, remember, it's a small denominator, some very, very significant market opportunities as well. Those are driving as well.

There's a couple of factors there the biggest one being simply just the ethanol pipeline and the collapse of the kind of lease and occupancy rate. So much like site centers much like our peers much like the open air sector, there's been a lot of leasing volume in the current portfolio.

And we expect that kind of occupancy gap to compress over time. The other member advantage of the current portfolio as you just have less downtime and so if you think about if you got space back over the last couple of years the downtime to backfill. It is a lot shorter versus manker, and so youre, just seeing kind of that compression or timeline to get those spaces backfill.

In a much shorter period, which is driving the growth. The other thing is we had remember it's a small denominator some very very significant mark to market opportunities as well those are driving as well. So so again I would say, it's a similar boost.

Conor M. Fennerty: So again, I would say it's a similar boost or driver versus other kinds of open air real estate. It's just a tighter timeline and a smaller denominator. Okay, that makes sense. And one last one, actually, David, you know, so you've mentioned now, I think, twice, that there has been an increase in appetite for retail real estate since the end of the year, you know, the beginning of the year here. Is the disposition activity still best to be executed on a one-off property basis? Or is there any appetite for, you know, a portfolio sale or something larger in the marketplace to take place today on the site disposition? It remains to be seen, Todd.

Boost our drivers versus other kind of opened our real estate, it's just a tighter timeline and a smaller denominator.

Okay, Yeah that makes sense and one last one actually David So you've mentioned now I think twice and increase in appetite.

For retail real estate since the end of the year at the beginning of the year here.

Is the disposition activity still best.

To be executed on a one off property basis or is there any appetite for.

A portfolio sale or something larger in the marketplace to take place.

Today on the site dispositions.

It remains to be seen Todd, we're certainly open minded the portfolios because it makes our job a little bit easier.

David R. Lukes: We're certainly open-minded to portfolios because it makes our job a little bit easier. And, you know, there have been conversations with several groups about potential portfolios. But we're also price-sensitive, and there's been a lot of private capital that's got a 1031 need or that, you know, knows the stock market and really likes an asset. And in certain cases, it just means that it's worth the extra work because of the value. I will be curious as well to see if portfolios increase or if we continue more with one-off transactions. I'll be interested, but I don't really know.

And there have been in conversations with several groups about potential portfolios.

But we are also price sensitive then.

And theres been a lot of private capital that's got a 10 31 need or that.

No the submarket and really likes and asset.

In certain cases, it just means that.

It's worth the extra work because of the value.

I will be curious as well to see if portfolios increase or if we continue more with one off transactions I'll be curious, but I don't I don't really know.

David R. Lukes: Okay, thank you. Thanks, Todd. The next question comes from Samir Khanal with Evercore ISI. Please go ahead. Hi there.

Okay. Thank you.

Thanks Todd.

The next question comes from Samir Khanal with Evercore ISI. Please go ahead.

Hi, there.

Samir Upadhyay Khanal: Hey, David, on the 750 million that's on a contract, you know, the power centers of a seven cap. I mean, that may be a positive read for the market out there, considering that some people may think it was closer to an eight, kind of, you know, what you have remaining to sell. So maybe give us a little bit more color on that.

David on the 750 million that's under contract the power centers are a seven cap.

I mean that may be a positive read for the market out there considering that some people may think it was closer to an eight.

You have remaining to sell so maybe give us a little bit more color on that.

David R. Lukes: I don't know, you know, like the geographic regions where these assets are located. Is this sort of a portfolio? type deal, or just trying to get a bit more more more color on these power centers?

No.

Geographic regions, where these assets are located is it sort of a portfolio.

Type deal or just trying to get a bit more color on these voltage power centers.

David R. Lukes: Yeah, Samir, first of all, just remember, I did not say under contract; I said awarded under LOI or negotiating a contract. So some of those might fall out; they might get replaced by others. But we felt it was important to provide at least some disclosure around how much volume and approximately what type of pricing we're working on today since it is relevant. I feel like what we're working on today is fairly consistent with the majority of the portfolio. You know, the assets that we're currently negotiating contracts for are spread across the country. They're in various retail formats. You know, about 30% of them have a traditional grocery store; about 70% don't.

Yeah Amir first of all just remember.

I would say under contract I said awarded under LOI or negotiating a contract. So some of those might fall out they might get replaced by others, but we felt it was important.

To provide at least some disclosure around how much volume and approximately what type of pricing we're working on today since it is relevant.

I feel like what we're working on today is fairly consistent with the majority of the portfolio.

The assets that were currently negotiating contracts are spread across the country, they're in various retail formats.

About 30% of them have a traditional grocery store about 70% down.

David R. Lukes: Some of them are larger assets, some are smaller assets. And so, to me, it feels like a pretty good mix of the majority of our portfolio. I would say there are some assets that we have not transacted yet that are better, i.e., very high volume grocers. And there are some assets that are not included in that that are probably worse. You know, they might have a theater with a high rent.

Some of them are larger assets some are smaller assets and so to me it feels like a pretty good.

Mix of the majority of our portfolio I would say there are some assets that we have not transacted, yet that are better I E very high volume grocers and there are some assets.

That are not included in that that are probably worse, they might have a theater with a high rent, but for the most part I feel like it's a pretty consistent read through to the majority of the portfolio.

David R. Lukes: But for the most part, I feel like it's a pretty consistent read-through to the majority of the portfolio. Okay, got it. And I guess my second question is around Curbline. I know you said it, you know, have no debt initially, but I guess what's the longer-term leverage plan or even sort of the capital structure for Curb at this time? Thanks. Hey, Samir.

Okay got it and I guess my second question is around curb line I know you said it will have no debt initially, but I guess, what's the longer term leverage plan or are you even sort of the capital structure for curve at this time. Thanks.

Conor M. Fennerty: It's Conor. Good morning. As David and I both mentioned, as of today, we're expecting $300 million of cash at the time of spend and a $300 million preferred investment. However, to David's point, if we continue to sell assets, that likely shifts to just $600 million of cash. And let's call it, yeah, I think we've got $1.2 billion or $1.3 billion of GAV today. Now, to Todd's point, we do expect to acquire more assets, let's call it $25 to $50 million a quarter going into it. So, you know, round numbers, you're talking about a GAV of call $1.4 billion and $600 million of cash and, perhaps, let's call it $2 billion at the time of expenditure.

<unk> hi, good morning.

As Dave and I, both mentioned as of today, and we are expecting $300 of cash the time to spend $300 preferred investment however to David's point, if we continue to sell assets that likely shifts to just $600 million of cash and let's call. It I think we've got 1 billion to $1 three of <unk>.

<unk> today now to Todd's point, we do expect to acquire more assets, let's call it $25 million to $50 million a quarter going into it. So you know.

Round numbers Youre talking about a JV or call it $1 4 billion and $609 of cash and proud so call. It $2 billion time to spin initially I think it's fair to assume that that curve would use that cash to deploy capital and then once you're.

Conor M. Fennerty: Initially, I think it's fair to assume that Curb would use that cash to deploy capital. And then once you've utilized that cash, the question is, you know, what's your kind of leverage path or leverage trajectory? And we'll see how that plays out. I mean, I think if you look at our company or site centers over the last six years, we've generally, you know, looked to maintain a balance sheet that was consistent, if not marginally better than the peer group. And I think for Curb, it's fair to assume that it's a similar path. All that said, that's a ways out from now.

<unk> utilized that cash question is whats your kind of leveraged path or leverage trajectory and there we will see we will see how it plays out I mean, I think if you look at our company are site centers for the last six years, we've generally look to maintain a balance sheet that was consistent without marginally better than the peer group and I think for curve, it's fair to assume.

Fair to see a fair to assume excuse me that it's a similar path all of that said that's a ways out from now so we'll see what.

Conor M. Fennerty: So we'll see how we go from there. But again, I think it's fair to assume it's just a consistent cap structure as we have with sites. I don't know if that helps answer your question. No, it does. That's it for me.

How we go from there but.

I think it's fair to assume it's just a consistent.

Cap structure as we have decided today.

I don't know if that helps answer your question.

No I don't know if it does that's it for me thanks guys.

Thanks Mary.

The next question comes from Floris van to come with Compass point. Please go ahead.

Samir Upadhyay Khanal: Thanks, guys. The next question comes from Floris Zandekum with Compass Point. Please go ahead. Hey, good morning, guys.

Hey, good morning, guys. Thanks, It looks like your are you going to be busy for the next couple of months.

Floris Gerbrand Hendrik Van Dijkum: Thanks. Looks like you're going to be busy for the next couple of months. Pretty exciting. New concept. Higher growth, as you say. I'm just curious about...

Pretty exciting new concept.

Higher growth as you say I'm just curious on.

David R. Lukes: Some of the costs involved, you mentioned the commitment that you've got for the $1.1 billion of debt, mortgage debt. Could you tell us what the cost of that commitment is and what the cost of that debt would be? And then secondly, as part of that, you've said you have That debt is related to 40 assets, I think, post-spin. Have you identified those assets already? Presumably, lenders will want to know what assets they're providing the credit on. And so are those assets some of your better assets, or maybe give a little bit of detail on what's remaining that you expect to be part of the sites post-spin? Hey Floris,

Some of the costs are involved you mentioned the commitments that you've got for the $1 1 billion of debt mortgage debts.

It.

Could you tell us what the cost of that commitment is.

And what the cost of that debt would be and then secondly.

Oh boy as part of that you said.

That debt is related to 440 assets I think post spin have you identified those assets already presumed.

Presumably lenders will want to know what assets are.

They are providing the credit on AR and so does that are those assets some of your better assets or maybe give a little bit of detail on what's what's remaining that you expected to be part of sites post spin.

Conor M. Fennerty: Good morning. It's Conor. If you look at our slides on page 12, we've got sources and uses for the transaction, which we updated as of year-end. If you recall, at the time of – it was announced on October 30th, we provided a similar slide that was as of the third quarter. So we've kind of rolled this forward a quarter to help with the sources and uses. You are correct to point out that we've excluded the commitment fee related to that transaction from those costs.

Hey, Floris good morning, it's Conor.

If you look at our slides on page 12, we've got sources and uses for the transaction, which we updated as of year end. If you recall at the time of the spin.

Then announced on October 30th we provided a similar slide that was as of the third quarter. So we've kind of rolled forward a quarter to help with the sources and uses you are correct to point out that we've excluded the commitment fee related to that transaction from those costs I.

Conor M. Fennerty: I think it's fair to assume there'll be additional details provided in our K, and we file that in the next couple weeks from here, but they're generally market terms. We had a commitment as part of the RBI facility, if you recall, back in 2018. I think it closed actually six years ago or seven years ago this month.

I think it's fair to assume there'll be additional details provided in our K. We filed out in next couple of weeks from here, but but theyre generally market terms, we had a commitment as part of the RBI facility. If you recall back in 2018, I think it closed actually six.

Six years ago or seven years ago. This month.

Conor M. Fennerty: And kind of a market commitment fee is generally around a point up front, and it's fair to assume that the Apollo facility is something very similar. If you come back to who our counterparty with that is, it's Atlas SP. That was actually our counterparty, the old Credit Suisse Securitized Products team, six or seven years ago, as I just mentioned. So it's a group we've worked with on a number of occasions, a group we've done a number of deals with, and it's someone we have a lot of great deal of trust in.

And it kind of a market commitment fees generally around a point upfront and it's fair to assume that the Apollo facility something very similar if you come back to who our counterparty with that is as Atlas SP that with ICR counterparty the old Cross re securitized products team six or seven years ago as I just mentioned so it's a group we've worked with for a number of.

<unk> as a group we've done a number of deals with them and some of them. We have a lot of Greenfield trust and as part of our process for that commitment. We identify those 40 assets, we've already gone through underwriting with them. So yes that pool has been identified guests that lender have worked through that if you recall. There was also a kind of effectively a go shop provision as part of that commitment, where we can take that to market.

Conor M. Fennerty: As part of our process for that commitment, we identified those 40 assets, and we've already gone through underwriting with them. So yes, that pool has been identified.

Conor M. Fennerty: Yes, the lender has worked through that. If you recall, there's also a kind of effectively a go-shop provision as part of that commitment where we can take that to market and go on a different path, or we can continue to work with Atlas or Apollo. So the ultimate financials or ultimate economics, I should say, of that transaction are to be determined. To David's point, I think as Craig earlier said, we'll provide more details as we get closer. But there's a world where we use a much smaller facility based on asset sales. There's even a more aggressive world.

Go on a different path or we can continue to work with Atlas or Apollo So the ultimate financials or ultimate economics, I should say of that transaction or to be determined to David's point I think from from Craig earlier, we will provide more details as we get closer, but theres a world, where we use a much smaller facility based off asset sales theres, even though even more aggressive world. We don't we don't have any bar.

Conor M. Fennerty: We don't have any borrowings of time to spend if the transaction market really remains robust. So again, we'll provide more details as we get closer to the spin. But it's fair to assume it's a market-rate CMBS deal. And again, we'll provide updates as we progress through 2024. Hey, thanks, Conor. And maybe... Go ahead. No, no, you fire away.

Boeing's time to spend if the transaction market really remains robust so.

Again, we will provide more detail as we get closer to spend but it's a marker it's fair to assume it's a market rates MBS deal and again.

We'll provide updates as we progress through 'twenty 'twenty four.

Hey, Thanks Connor.

Yeah.

Go ahead sorry.

I don't know if you fire away.

Floris Gerbrand Hendrik Van Dijkum: I was going to say, let me know if I missed any of these requests. Yeah, no, no. I think that the answer is that part of the question, I think. The other question I had was in relation to your CURB portfolio. There's one other, as far as I'm aware, there's one other sizable portfolio out there that's somewhat similar to yours, which is the Crow portfolio. You must have looked at that

I was going to say, let me know if I mentioned I think the real question there.

Yeah, No no I think that the answer to that part of the question I think.

A question I had was in relation to your.

To your current portfolio, there's one other.

As far as I'm aware Theres one other.

A sizable.

Portfolio out there that somewhat similar.

<unk>, which is the CRO portfolio.

You must have looked at that closely.

David R. Lukes: Maybe you could give a couple of potential differentiating factors for your portfolio versus that portfolio and how people should think about what percentage of your NOI, the $76 million of NOI that you have for the CURB portfolio, how much of that was carve-outs from your existing assets versus actual convenience assets that you've acquired separately as standalone assets? I'll let Conor take Part B, which is the carve-out details, but on Part A, there's so much inventory in the U.S. for convenience. There are a number of smaller and midsize portfolios out there.

Maybe could you give a couple of.

Potential differentiating factors you for your portfolio.

Versus that portfolio or and how how people should think about.

What's your what percentage of your NOI to $76 million of NOI that you have for.

For the for the current portfolio, how much of that was carve outs.

From your existing assets versus actual.

Convenience assets that you've acquired separately as standalone assets.

But two part question I apologize I'll let.

That kind of take part B, which is the carve out details, but on par day theres. So much inventory in the U S and convenience there are a number of smaller and mid size portfolios out there I'd hate to get into a comparison between different portfolios just because you have imperfect information.

David R. Lukes: I'd hate to get into a comparison between different portfolios just because you have imperfect information. I will say that we did hand-select this portfolio. I mean, we chose what to carve out. We chose what to leave behind.

I will say that we did hand select this portfolio I mean, we chose what the carve out which shows what the lead behind which also led to buy in the last five years. So we're very happy with the credit quality of the growth quality of the Submarkets the locations of the daily traffic the cell phone data that we've been tracking for years as you know so we're really happy with the portfolio.

David R. Lukes: We chose what to buy in the last five years, and so we're very happy with the credit quality, the growth quality, the submarkets, the locations, the daily traffic, the cell phone data that we've been tracking for years, as you know. So we're really happy with the portfolio we have. I hate to just start comparing it to other portfolios that we just don't have perfect. As to David's point, I think it's a really important answer to this. We built this from the ground up, literally asset by asset.

So we have.

I hate to start comparing it to other portfolios that we just don't have perfect information on that to David's point I think it's a really important.

Because as we built this from the ground up literally asset by asset so ever again here, we feel really good about the overall metrics on page 15 floors.

Conor M. Fennerty: So at the end here, we feel really good about the overall metrics are on page 15, Floris, which makes the comparisons, I guess, difficult to your point or David's point. The carve-outs are about 25%, maybe marginally more than that, of the overall portfolio in terms of ABR. But that's coming down every day, right, as we buy assets. And you think about, to Samir's question on the balance sheet, if we're $1.2 billion-ish in GAV today, and carve-outs are called $300-400 million of that, as we deploy to $2-3 billion, the carve-outs drop to a fairly insignificant amount. So again, we feel really good about each of those carve-outs.

Which makes the comparisons difficult.

Difficult to your point of David's point.

Carve outs are about 25%, maybe marginally more than that of the overall portfolio in terms of ABR, but thats coming down everyday right as we buy assets when you think about.

To <unk> question on the balance sheet, if were $1 billion two ish, a JV today, and we carve outs or call. It three or 400 million of that as we deployed a two to 3 billion in the carve outs dropped to a fairly insignificant amount. So again, we feel really good about each of those carve outs, we're happy to own them and we hand select of each of them, but that kind of.

Conor M. Fennerty: We're happy to own them, and we hand-selected each of them. But that kind of subset of the portfolio will shrink over time as we lever up or at least deploy the cash. Thanks, guys. The next question comes from Ki-Bin Kim with Truist, please go ahead. Thanks. There are just a couple of housekeeping items here. When you quote Capri on your dispositions, can you talk about what definition that is and if you're including a property management charge and things like that. Hey Ki, Ben, good morning, it's Conor.

Subset of the portfolio will shrink over time as we as we lever up or at least deploy the cash.

Thanks, Chris.

The next question comes from Keybanc, Ken what Truest. Please go ahead.

Thanks, Brian just a couple of housekeeping items here.

You quote cap rates on your dispositions.

Can you just talk about.

<unk> definition that is and if you if you are including a property management charge and things like that.

Hey, good morning, Scott.

Conor M. Fennerty: In our mind, there's only one definition of a cap rate, which is a forward 12-month NOI, including a management fee. And on your $265 million NOI projection for the site center's portfolio, I'm assuming that's as of a 12-31-2023 portfolio. And if you can provide just a high level, what does that translate to from a same-store NOI standpoint? Yeah, you're right. So it includes the two assets that were sold as of January or February date. And so you need to adjust for those.

Our mind Theres only one definition of a cap rate, which is a forward 12 month NOI.

Including a management fee.

Okay.

And on your $265 million NOI projection for the site centers portfolio I'm, assuming that's as of 12 31 2023 portfolio.

And if you can provide just a high level like what does that translate to from a same store NOI standpoint.

Yeah Youre right. So it includes the two assets that were sold as of <unk>.

January or February to date, and so you need to adjust for those so effectively we gave you the balance sheet and the NOI as of 12 31, So it's a good.

Conor M. Fennerty: So effectively, we gave you the balance sheet and the NOIs at 1231. So it's a good point to call out. In terms of same for NOI, we didn't provide a projection for site centers for a couple of reasons. And the biggest reason, and this is something Dave and I both alluded to in our prepared remarks, is that it's just losing relevance. So we sold a billion dollars in real estate effectively in the fourth quarter. But none of those assets had a bed, bath, and beyond.

It's a good point to call out in terms of the same on same store NOI, we didn't provide a projection for site centers for a couple of reasons and the biggest reason and this is something Dave and I both alluded to in our prepared remarks, it's just losing relevance. So we sold $1 billion of real estate effectively in the fourth quarter, none of those assets had a bed bath and beyond if we included those in the 'twenty 'twenty four.

Conor M. Fennerty: If we included those in 2024, our same for would be higher, not because it's better real estate or worse real estate, but simply because of whether or not the bed and baths were in there or not. In the same vein, if we sell a number of our bed and bath assets, which we expect to do in the first half year, our same for will start to go up. Does that mean things are getting better for that portfolio? No, it's just the volatility around operating metrics for site centers is really going to grow. And as a result, it has dropped in terms of relevance.

Our same store would be higher not because it's better real estate, our worst real estate, but simply because of.

Whether or not the bid downs were in there or not in the same vein. If we sell a number of our bed Bath assets, which we expect to in the first half year. Our same store will start to go up does that mean things are getting better for that portfolio. No. It's just the volatility around operating metrics for precise thing or is it really going to grow and as a result, that's dropped in terms of relevance now that if you think about some guideposts on how are you.

Conor M. Fennerty: Now, if you think about some guideposts and how you should think about same for site over the course of the year, it's fair to assume in a static portfolio, growth would look similar to the fourth quarter in the first half of the year as we come through the bed, bath, and beyond. And then you start to see a pretty dramatic acceleration in the back half of the year as the S&O pipeline and also some of those bed and bath backfills come into place. And that gets you to a level that I think is pretty consistent with what we did in 2023 in the back half and what some of our peers are reporting for their guidance for the next 24 months. But I would just give you, again, that caveat that the relevance we think of the metric is pretty low, and the volatility of same stores is so dramatic over the course of 24 based on asset sales that we just don't think it's a relevant number to provide at this time. Okay, thank you, guys. You're welcome. The next question comes from Dori Kesten with Wells Fargo. Please go ahead.

You should think about same store per site over the course of the year, It's fair to assume a static portfolio growth would be look similar to the fourth quarter and the first half of the year as we come through through bed Bath, and then you'd start to see a pretty dramatic acceleration in the back half of the year as the <unk> pipeline and also most of those bed that backfill has come into place and that gets you to a level that I think it's pretty consistent.

What we did in 2020.

<unk> in the back half and what some of our peers reporting for their guidance for 'twenty four but I would just I would just give you again the caveat that the relevance we think of the metric is pretty low and the volatility of same stores me. So dramatic over the course of 'twenty four based off asset sales that we just don't think it's a relevant number or.

To provide at this time.

Okay. Thank you guys.

Youre welcome.

The next question comes from Dori Kesten with Wells Fargo. Please go ahead.

Dori Lynn Kesten: Thanks, good morning. Would you call October a rather firm timeline for the spin at this point, or could material incremental sales move that forward? Hey Dori, good morning. It's Conor.

Hi, Thanks, Good morning would you call October rather firm timelines the spin at this point or could material incremental sales move that forward.

Hey, George Good morning, It's Conor it's a great question at this time, we think October 1st as a great place holder you you're absolutely right. If you saw some dramatic change in transaction positively negatively we might move up or move back that date all of that said remember we don't need to sell another asset to get this transaction done right that was the financing is effectively that Brad.

Conor M. Fennerty: It's a great question. At this time, we think October 1st is a great placeholder. You're absolutely right.

Conor M. Fennerty: If you see some dramatic changes in transactions, positively and negatively, we might, you know, move up or move back that date. All that said, remember, we don't need to sell another asset to get this transaction done, right? That was the financing is effectively that bridge. So everything from here to David's point or responses from earlier is purely upside to both site and curb stakeholders, which are the same stakeholder today. So it's a great question. We'll update you as we go along. As of today, it's our best guess.

So everything from here to David's point or responses from earlier, it's purely upside to both site and curb stakeholders, which is the same stakeholder today. So it's a great question, we'll update you as along as of today, It's our best guess.

Conor M. Fennerty: It feels like transactions are probably the biggest variable to whether that date, you know, moves forward or back a month or so. Okay, and I guess what level of asset sales from this point on would remove the preferred equity stake from the transaction? It's probably a pretty close story to a dollar-for-dollar, meaning if we sold an additional $300 million from here, the preferential treatment would go away. I think to David's point about the level of activity we're seeing, we feel pretty good that it's likely CURB is just cash and no PREF. That said, again, like the financing, we have everything in place. We don't need to sell additional assets today.

It feels like transactions are probably true.

<unk> remains the biggest variable to weather that they move forward or back a month or so.

Okay and what.

I guess what level of asset sales from this point on when to remove the preferred equity stake from the transaction.

Yeah, it's probably pretty close story to a dollar for dollar I mean, if we sold an additional 300 then from here. We are the preferred would go away I think to David's point around.

The level of activity, we're seeing we feel pretty good that that's likely curve is just just cash no prep.

That said again like the financing we have everything in place, we don't need to sell additional assets today.

Dori Lynn Kesten: But it does feel likely, based on the volume of activity we've got going on, that CURB is simply cash. Okay, thank you. The next question comes from Patula Rojas with Green Street. Please go ahead. Good morning.

But it does feel likely based off the volume of activity, we've got going on that it's likely that curve is simply cash.

Okay. Thank you.

The next question comes from Patrick <unk> with Green Street. Please go ahead.

Okay.

Good morning.

Paulina Alejandra Rojas: And my question is about the ABR for curb, and I see it's 36 feet, which is towards the high end of what I see for your peers for small shops. So I was wondering, where do you see the market rent for your space for today? Yeah, it's a good question, Paulina.

My question is about the in place ABR for curb and I see it's 36 to food.

And which is towards the high end of what I see for your peers for small shops. So I was wondering where do you see the market rent for.

For your space today.

Yes, it's a good question.

David R. Lukes: The reality is that shop rents can vary dramatically on a larger property. In other words, the shops that are along the curb line up in the front of the property tend to have higher rents. The properties that we refer to as B-shops, they're in the back of a property adjacent to, you know, a grocery store adjacent to a larger format retailer tend to have lower rents.

The reality is that shop rents can vary dramatically in a larger property in other words the shops that are along the curb line up in the front of the property tend to have higher rents the properties that we referred to as be shops. There in the back of a property adjacent to a grocery store adjacent to a larger format retailers tend to have lower rents.

David R. Lukes: So it's not surprising that the out-parcel buildings or multi-tenant pads that are along the high-traffic intersection tend to generate that higher rent. The mark-to-market is a really good question, and I don't have a succinct answer for that. Part of the reason is that market rents for shops have been growing, specifically coming out of the pandemic with a lot of suburban migration and cell phone data, which is telling us that a hybrid workforce is pretty entrenched.

So it's not surprising that the out parcel buildings or multi tenant pads that are along the high traffic intersection tend to generate the higher rents.

Mark to market is a really good question and.

I don't have a succinct answer on that part of the reason is that market rents for shops have been growing.

Specifically coming out of the pandemic with a lot of that suburban migration the cell phone data, which is telling us that our hybrid workforce is pretty entrenched you are just seeing a lot more tenant demand and so a lot of the rents are growing at a pace that we're not really sure. We don't have great data.

David R. Lukes: You're just seeing a lot more tenant demand, and so a lot of the rents are growing at a pace that we're not really sure about. We don't have great data, but the mark-to-market is certainly present. Yeah, Pauline, I think it's important to point out that, if you look back at our disclosure from October 30th, I think our new lease spreads averaged over 30% in the last four years for the current portfolio. I think one of the things we really like about the property type is that mark-to-market is achievable, meaning the duration of the leases is such that we can actually get at that market rent, as opposed to, you think about The grocer or someone else, and you're never going to get at that mark-to-market.

But the market market is certainly present I think an important if you look back our disclosure from October 30, our new lease spreads averaged over 30%.

And the last four years with the current portfolio I think one of the things we really like about the property type is that mark to markets achievable, meaning the duration of the leases and such that we can actually get out that market rent as opposed to do you think about our grocery anchored asset or a large from an asset the biggest mark to market. It was with the biggest national tenants in the back I E. The grocer or someone else and you're never going to.

Get out that mark to market. So it's an important differentiator of the property type that we really like is theres real mark to market and we can get at it.

Conor M. Fennerty: It's an important differentiator of the property type that we really like, because there's real mark-to-market and we can get at it, which isn't always the case in other open-air formats. Thank you. And then my second question is, you made clear that you are prioritizing this position, and I wonder if it was at all a consideration trying to accelerate acquisitions to maximize during 1031. Yeah, it's a really good question, Paulina.

It isn't always the case in other open air formats.

Thank you and then my second question is you use.

And make sure that you're prioritizing dispositions and I wonder if it wasn't all that consideration trying to accelerate acquisitions to maximize and 10 70 ones.

Yeah, It's a really good question and Paulina just given this is a taxable spin we're actually better off not 10 31 games because effectively then that gains passed on the stakeholders. So.

Paulina Alejandra Rojas: Just given this is a taxable spin, we're actually better off not having 1031 gains because, effectively, then that gain is passed on to the stakeholders. So the other point I would just make is we actually don't have material gains. I should say at the portfolio level, there are certain assets that have significant tax gains, but on an overall blended portfolio basis, I don't think it's significant relative to the enterprise.

The other point I would just make is we actually don't have material gains.

I should say it is at the portfolio level. There are certain assets that have significant tax gains, but on an overall blended portfolio basis I don't think it's significant relative to enterprise so for both of those reasons.

Conor M. Fennerty: So for both of those reasons, the 1031 market is less of a focus for us. Thank you. You're welcome. The next question comes from Mike Mueller with J.P. Morgan. Please go ahead.

10, 31 market is less of a focus for us today.

Thank you.

Youre welcome.

The next question comes from Mike Mueller with Jpmorgan. Please go ahead.

Michael William Mueller: Yeah, hi, just a few questions on curb. First of all, can you give us a sense as to when we look at your blended bread spreads, how they would compare if you would break them out in the shop between curb and kind of the legacy site stuff that you want to sell? Yeah, Mike, we haven't broken them out yet.

Yeah, Hi, just a few questions on curb first of all can you give us a sense as to when we look at your blended rent spreads how they would compare if you would break them out between curb and kind of the legacy stuff that you want to sell.

Yes, Mike we havent broken them out again to my question to Paul in a response to point excuse me the spreads for for occur we provided in October.

Conor M. Fennerty: Again, in my question to Paulina, or response to Paulina, excuse me, the spreads for CURB that we provided with the October presentation. I will point out, though, there is a little bit different approach, or not a little bit, there is a different approach for CURB. We are likely to include all spreads included in that, not just spreads that have a tenant that moved out of the last 12 months for a variety of reasons. One, we just did the bigger pool, and two, we think it's just a more relevant metric. But if you look at it with that kind of differentiated new approach, our spreads have averaged 30%. That's not dramatically different than CITE. It's just that the capital to get that spread is a lot lower.

October presentation, I will point out, though there is a little bit different.

Approach it in a little bit there is a different approach for curve. We are likely to include all spreads included in that not just spreads.

Have a tenant move out in the last 12 months for a variety of reasons. One we just it's a bigger pool and two we think it's just a more relevant metric, but if you look without kind of differentiated new approach our spreads have averaged 30% that's not dramatically different than site. It's just the capital to get that spread is a lot lower.

Conor M. Fennerty: So again, I point you back to the October 30th presentation. Just the only caveat being that it's a little bit different approach, and that includes all spaces, not just those vacant less than 12 months. Now, sorry I missed part of that. I think my signal went out for a little bit during the last question. And then there was one other question, too.

So again I'd point, you back to the October 30 of the presentation.

Just just the only caveat being that it's a little bit different approach and that includes all spaces not just those vacant less than 12 months.

Okay, sorry, I missed part of that I think my signal went out for a little bit during the last question.

Bryan one other question too.

David R. Lukes: I guess in the supplemental, you typically break out redevelopment and expansion. And I guess when we're looking at that, is it safe to say that pretty much everything tied to that goes theoretically with the legacy site? Or when you look at the CURB portfolio, you know, a year out or so, would you imagine having, you know, some activity like that, whether it's like a renovation or expansion? David Lukes, Alexander Goldfarb, Conor Fennerty, Samir Khanal, Todd Thomas, Dori Kesten, Ravi Vaidya, Adam Kramer, Ronald Kamdem, Ki Kim, Linda Tsai, Stephanie Going forward, I certainly think that our redevelopment activity will be minimal at best at this point. It's a renewable energy business. The purpose of the business is to buy real estate where we can raise rents with no capital expenditure. Having said that, the larger the portfolio gets, the more renovation work is required here and there.

I guess in the supplemental you typically break out redevelopment expansion and I guess when we're looking at that is it safe to say that pretty much everything tied to that goes theoretically with the legacy site or when you look at the curb portfolio a year out or so would you envision having you know some some activity like that whether it.

It's like a renovation or expansion.

Spend as well.

Just what's in the site that's up today for site centers shops of Framingham.

Starbucks pad that is part of the curve.

And University hills that as part of the curve as well, but I'll defer to David on the ultimate path.

Going forward.

I, certainly think that our our redevelopment activity will be minimal at best at this point.

It's a renewables business the purpose of the business is to buy real estate, where we can raise rents with low capex, having said that the larger the portfolio gets the more renovation work is required here and there. So I think we will have some activity, but I would not expect us to be having a large redevelopment component in the business.

Michael William Mueller: So I think we will have some activity, but I would not expect us to be having a large redevelopment component in the business. Got it. Okay. Thank you.

Got it okay. Thank you.

David R. Lukes: Thanks, bye. This concludes our question and answer session. I would like to turn the conference back over to David Lukes for any closing or closing remarks. Thank you all for joining our call, and we will talk to you next quarter. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thanks, Mike.

This concludes our question and answer session I would like to turn the conference back over to David Lukes for any closing remarks.

Thank you all for joining our call and we will talk to you next quarter.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Okay.

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