Q3 2025 CTO Realty Growth Inc Earnings Call

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Operator: Ladies and gentlemen, thank you for standing by. Welcome to CTO Realty Growth Inc. third quarter 2025 earnings call. At this time all participants are in the listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jenna McKinney, Director of Finance. Please go ahead.

Speaker #2: Ladies and gentlemen , thank you for standing by . Welcome to CTO Realty Growth, Inc. third quarter 2025 Earnings Call . At this time , all participants are in a listen only mode .

Please be advised that today's conference is being recorded I would like now to turn the conference over to Jim Mckinney Director of Finance. Please go ahead.

Speaker #2: After the speakers presentation , there will be a question and answer session . To ask a question during this session , you would need to press star one one on your telephone .

Good morning, everyone and thank you for joining us today for the CTO Realty growth third quarter 2025 operating results conference call.

Participating on the call. This morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the executive team that will be available to answer questions during the call.

I would like to remind everyone that many of our comments today are considered forward looking statements under federal Securities laws.

Jenna McKinney: Good morning everyone and thank you for joining us today for the CTO Realty Growth Inc. Third Quarter 2025 Operating Results Conference call. Participating on the call this morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the Executive Team that will be available to answer questions during the call. I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities laws. The Company's actual future results may differ significantly from the matters discussed in these forward-looking statements and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are discussed from time to time in greater detail in the Company's Form 10-K, Form 10-Q, and other SEC filings.

Company's actual future results may differ significantly from the matters discussed in these forward looking statements and we undertake no duty to update these statements.

Factors and risks that could cause actual results to differ materially from expectations are discussed from time to time in greater detail in the company's Form 10-K Form 10-Q, and other SEC filings.

You can find our SEC reports earnings release supplemental and most recent investor presentation on our website at <unk> Dot com.

With that I will turn the call over to John.

Thanks, Jim we delivered another quarter of strong operating performance driven by the strength of our leasing activity year to date through September 30, we have completed 482000 square feet of overall leasing activity, including 424000 square feet of comparable leasing at a weighted average base rent spread of 21%.

Jenna McKinney: You can find our SEC Reports, Earnings Release, Supplemental, and most recent investor presentation on our website at ctoreit.com. With that, I will turn the call over to John.

7%.

Contributing to this leasing performance was our third quarter in which we executed 143000 square feet of new retail leases renewals and extensions at an average base rent of $23 per square foot. This includes 125000 square feet of comparable leases, a 10, 3% base rent spread.

John Albright: Thanks Jenna. We delivered another quarter of strong operating performance driven by the strength of our leasing activity year to date. Through September 30, we have completed 482,000 square feet of overall leasing activity, including 424,000 square feet of comparable leasing and a weighted average base rent spread of 21.7%. Contributing to this leasing performance was our third quarter in which we executed 143,000 square feet of new retail leases, renewals, and extensions at an average base rent of $23 per square foot. This includes 125,000 square feet of comparable leases, a 10.3% base rent spread. Notably, just after the quarter, we signed a significant lease at the Shops at Legacy, a 243,000 square foot mixed-use lifestyle center located in Dallas, Texas. I will share more details on this lease and the Shops at Legacy shortly. We also continue to make progress on backfilling our 10 anchor spaces.

Notably just after the quarter, we signed a significant lease at the shops at legacy by 243000 square foot mixed use lifestyle center located in Dallas, Texas, I will share more details on this lease and the shops at legacy shortly.

We also continue to make progress on back filling our 10 anchor spaces.

610 vacant anchor spaces have been leased and we remain in active negotiations for the remaining four today. We are encouraged by the rental upside in value creation. These six leases represent and expect the new tenants to increase foot traffic relative to the former tenants.

Furthermore.

We remain on target to achieve our goal of positive cash leasing spread of 40% to 60% across these 10 anchor spaces, and we look forward to providing additional updates on our progress.

John Albright: Six of the 10 vacant anchor spaces have been leased, and we remain in active negotiations for the remaining four to date. We are encouraged by the rental upside and value creation these six leases represent and expect the new tenants to increase foot traffic relative to the former tenants. Furthermore, we remain on target to achieve our goal of positive cash leasing spread of 40% to 60% across these 10 anchor spaces, and we look forward to providing additional updates on our progress more broadly. As of today, our signed-not-open, or SNO, pipeline stands at 5.5 million, representing approximately 5.3% of annual cash base rents in place as of quarter end. We believe that this pipeline positions us for meaningful earnings growth, with approximately 76% of our ABR from the SNO pipeline anticipated to be recognized in 2026 and 100% in 2027.

More broadly as of today, our signed not open or SMO pipeline stands at $5 5 million, representing approximately five 3% of annual cash base rents in place.

As of quarter end.

We believe that this pipeline positions us for meaningful earnings growth with approximately 76% of our ABR from the <unk> pipeline anticipated to be recognized in 2026 and 100% in 2027.

Now I would like to share some exciting updates related to the shops at legacy <unk>.

Just after the quarter end, we signed a 30000 square foot lease with a co working operator expected to open by year end 2026.

This lease along with a 20000 square foot private members only social club that we signed in the third quarter of 2024 substantially fills the space, formerly leased to we work marking a meaningful inflection point in our re leasing efforts. In addition to these large leases over the last two years.

John Albright: Now I would like to share some exciting updates related to the Shops at Legacy. Just after the quarter end, we signed a 30,000 square foot lease with a co-working operator expected to open by year end 2026. This lease, along with the 20,000 square foot private members-only social club that we signed in the third quarter 2024, substantially fills the space formerly leased to WeWork, marking a meaningful inflection point in our re-leasing efforts. In addition to these large leases, over the last two years we have signed smaller shop leases for an aggregate of nearly 60,000 square feet for various restaurants, fitness, and retail concepts that we believe will further increase the vibrancy of the center. Today, reflecting all this leasing activity, the lease percentage of Shops at Legacy stands at approximately 85%.

<unk>, we have signed smaller shop leases for an aggregate of nearly 60000 square feet for various restaurants fitness and retail concepts that we believe will further increase the vibrancy of the center today, reflecting all of this leasing activity.

Percentage of shops at legacy stand at approximately 85%.

Now moving to a recent agreement that we signed to acquire a shopping center in South Florida.

This was a property that I mentioned on our last call that we were targeting we believe this shopping center offers value add potential that aligns well with our leasing and operating strength.

Presents an opportunity to both acquire the asset at an attractive initial yield and drive long term value creation through lease up of acquired vacancy.

We expect to close this transaction before year end and look forward to providing more details when we close.

John Albright: Now moving to a recent agreement that we signed to acquire a shopping center in South Florida. This is a property that I mentioned on our last call that we were targeting. We believe this shopping center offers value add potential that aligns well with our leasing and operating strength and presents an opportunity to both acquire the asset and attract initial yield and drive long term value creation through lease up of acquired vacancy. We expect to close this transaction before year end and look forward to providing more details when we close. From a financing perspective, as Phil will discuss in more detail, we recently termed down some debt and refreshed our revolving credit facility, providing enhanced liquidity. This will give us the ability to initially acquire the South Florida property using our line of credit.

From a financing perspective, as Phil will discuss in more detail, we recently termed out some debt and a refreshed our revolving credit facility, providing enhanced liquidity.

This will give us the ability to initially acquire south Florida property using our line of credit ultimately, though we anticipate funding this acquisition by recycling and asset around year end.

Overall, we are pleased with our leasing progress and the value creation underway as we continue to execute our strategic priorities.

With that I will hand, the call over to Phil.

Thanks, John on this call I will discuss our balance sheet earnings results and updated full year 2025 guidance.

Starting with the balance sheet, just before quarter end, we closed the $150 million in term loan financings, including a new five year $125 million term loan maturing in September of 2030.

John Albright: Ultimately, though, we anticipate funding this acquisition by recycling an asset around year end. Overall, we are pleased with our leasing progress and the value creation underway as we continue to execute our strategic priorities and with that I will hand the call over to Phil.

And a $25 million upsizing of our existing term loan maturing in September of 2029.

Philip Mays: Thanks John. On this call I will discuss our balance sheet, earnings results, and updated full year 2025 guidance. Starting with the balance sheet, just before quarter end, we closed $150 million in term loan financings, including a new five-year $125 million term loan maturing in September of 2030 and a $25 million upsizing of our existing term loan maturing in September of 2029. Both term loans bear interest at SOFR plus a spread based on our leverage ratio at closing. We utilize existing SOFR swap agreements, resulting in an initial fixed interest rate of approximately 4.2% for both loans. In March of 2026, when certain of these applied SOFR swap agreements expire and are replaced by other existing forward swap agreements, the interest rate for both loans will adjust to approximately 4.7% based on the company's current leverage ratio.

Both term loans bear interest at silver plus a spread based on our leverage ratio at closing we utilized existing so for swap agreements, resulting in an initial fixed interest rate of approximately four 2% for both loans.

In March of 2020, when certain of these applied so for swap agreements expire and are replaced by other existing forward swap payments the interest rates on both loans will adjust approximately four 7% based on the company's current leverage ratio.

The proceeds from these new term loan financings were used to retire at $65 million term loan scheduled to mature in March of 2026.

To reduce the balance on our revolving credit facility, providing enhanced liquidity.

Reflecting this financing we ended the quarter with approximately $170 million of liquidity consisting of $161 million available under our revolving credit facility and $9 million and cash available for use.

Philip Mays: The proceeds from these new term loan financings were used to retire a $65 million term loan scheduled to mature in March of 2026 and to reduce the balance on our revolving credit facility, providing enhanced liquidity. Reflecting this financing, we ended the quarter with approximately $170 million of liquidity, consisting of $161 million available under our revolving credit facility and $9 million in cash available for use. Additionally, we have recently repurchased $9.3 million of common stock at a weighted average purchase price of $16.27 per share. These repurchases consisted of $4.3 million towards the end of the third quarter to close out our previous $5 million repurchase program and $5 million in October under our recently announced $10 million common stock repurchase program.

Additionally, we have recently repurchased $9 3 million of common stock at a weighted average purchase price of $16 27 per share.

These repurchases consisted of $4 $3 million towards the end of the third quarter to close out our previous 5 billion repurchase.

The repurchase program and $5 million in October under our recently announced $10 million.

Common stock repurchase program.

Reflecting this quarter's balance sheet activity, we ended the quarter with net debt to EBITDA of six seven times, a slight improvement from six nine times at the end of the second quarter.

Further we anticipate additional deleveraging as we successfully released our vacant anchor boxes and tenants in our signed not open pipeline commenced paying rent.

And notably with our recently completed term loan financing, we now only have $17 $8 million of debt maturing in 2026.

Philip Mays: Reflecting this quarter's balance sheet activity, we ended the quarter with net debt to EBITDA of 6.7x, a slight improvement from 6.9x at the end of the second quarter. Further, we anticipate additional deleveraging as we successfully release our vacant anchor boxes and tenants in our signed-not-open pipeline commence paying rent, and notably, with our recently completed term loan financings, we now only have $17.8 million of debt maturing in 2026. Moving to operating results, core FFO was $15.6 million for the quarter, a $3 million increase compared to $12.6 million in the comparable quarter of the prior year. On a per share basis, core FFO was $0.48 per share compared to $0.50 per share in the comparable quarter of the prior year.

Moving to operating results core <unk> was $15 6 million for the quarter at $3 million increased compared to $12 $6 million in the comparable quarter of the prior year.

On a per share basis core <unk> was <unk> 48 per share compared to <unk> 50 per share in the comparable quarter of the prior year.

The change in core <unk> per share reflects a reduction in leverage that took place from late third quarter of 2024 through the end of 2024, when we reduced net debt to EBITDA by approximately a full turn.

But the same property NOI, our same property NOI increased two 3% during the quarter.

This growth was driven by leasing activity across our portfolio in particular at Beaver Creek, but wouldnt life fitness, replacing the former theater, along with strong small shop leasing at <unk> village.

Philip Mays: The change in core FFO per share reflects a reduction in leverage that took place from late third quarter of 2024 through the end of 2024, when we reduced net debt to EBITDA by approximately a full turn. With regard to same property NOI, our same property NOI increased 2.3% during the quarter. This growth was driven by leasing activity across our portfolio, in particular at Beaver Creek with One Life Fitness replacing the former theater, along with strong small shop leasing at West Broad Village, Playvette, Rockwall, and Ashford Lane. Turning to guidance, we are raising both our core FFO and AFFO outlook for the full year of 2025.

That rockwall and accurately.

Turning to guidance, we are raising both our core <unk> and <unk> outlook for the full year of 2025.

Our new core <unk> range has increased to $1 84 to $1 87 per diluted share from the previous $1 80 to $1 86 per share.

And our new <unk> range has increased to $1 96.

To $1 99 per diluted share from the previous $1 93 to $1 98 per diluted share.

And with that operator, please open the line for questions.

Philip Mays: Our new core FFO range has increased to $1.84 to $1.87 per diluted share from the previous $1.80 to $1.86 per share, and our new AFFO range has increased to $1.96 to $1.99 per diluted share from the previous $1.93 to $1.98 per diluted share. With that, operator, please open the line for questions.

Thank you.

A reminder to ask a question. Please press star one on your telephone and wait for your name to be announced and to withdraw. Your question. Please press star one wanted to begin the first question comes from Rob Stevenson with Janney Montgomery Your line.

Hey, good morning, guys.

Phil.

The pro forma debt to EBITDA look like once you complete the <unk>.

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. The first question comes from Rob Stevenson with Janney Montgomery Scott.

Florida acquisition and sell the existing asset.

And the near term signed but not commenced leases start of.

Drive revenue.

Yes, so and as John discussed on the call the Florida asset will be temporarily parked on the line that we have.

[Analyst 1]: Good morning, guys. Phil, what's the pro forma debt to EBITDA look like once you complete the Florida acquisition and sell the existing asset, and the near term signed but not commenced leases start to drive revenue?

Many of the liquidity, there and capacity to do so but will ultimately be funded with recycling and should not significantly change that to EBITDA.

Not open on pipeline as it stands today, just coming online with take off about a half a turn.

As it comes online.

Okay.

Philip Mays: Yeah, as John discussed on the call, the Florida asset will be temporarily parked on the line, and we have plenty of liquidity there and capacity to do so, but will ultimately be funded with recycling and should not significantly change debt to EBITDA. The SNO pipeline as it stands today just coming online would take off about a half a turn as it comes online.

<unk> of the bulk of that.

Revenue is that.

See any material amount in the fourth quarter or is that a first or second quarter 'twenty six event, how should we be thinking of that one way.

Play around with our models in terms of when the bulk of that.

$5 million starts hitting revenue, it's going to start beginning of next year.

The pipeline is $5 five of base rent.

[Analyst 1]: Okay, what is the timing of the bulk of that revenue? Is that, you know, are you going to see any material amount in the fourth quarter? Is that a first or second quarter 2026 event? How should we be thinking of that when we play around with our models in terms of when the bulk of that $5+ million starts hitting revenue?

I think we said 75% of that is going to be recognized next year, so about $4 million.

The way I would ramp that up as about a half a million dollars in the first quarter of $1 million in the second and a $1 million in the third and then about $1 million and have enough force that kind of growing throughout the year.

A total of about $4 million as the pipeline stands today or about 75% of the pipeline with all of it being recognized in 2007, everybody should be.

Philip Mays: It's going to start beginning of next year. You know, the pipeline is $5.5 million of base rent. I think we said 75% of that is going to be recognized next year, so about $4 million. The way I would ramp that up is about $0.5 million in the first quarter, $1 million in the second, $1 million in the third, and about $1.5 million in the fourth. It is kind of growing throughout the year to a total of about $4 million as the pipeline stands today, or about 75% of the pipeline, with all of it being recognized in 2027. Everybody should be, as currently projected, operating in space, paying cash rent by the end of 2026. You get the full $5.5 million in 2027.

Currently projected.

Operating in space paying cash rent by the end of 2006, So you get the full five five.

<unk> 27.

Okay Thats helpful.

And then John where is your most significant vacancy today.

Not either under contract letter of intent or pretty far down the road would you still have some work to do.

The opportunity for you guys right.

We have a 40000 square foot vacancy at Carolina Pavilion, we've gone through.

Couple tenants prospective tenants, where they were going to take so long that we decided to.

[Analyst 1]: Okay, that's helpful. John, where is your most significant vacancy today that's not either under contract, letter of intent, or pretty far down the road where you still have some work to do? Where's the opportunity for you guys right now?

To switch tact and so we're kind of going down the route of either splitting the box or we're talking to a couple of different groups about taking the whole box again.

So we've had some.

John Albright: We have a 40,000 square foot vacancy at Carolina Pavilion. We've gone through a couple tenants, prospective tenants, where they were going to take so long that we decided to switch tact. We're kind of going down a route of either splitting the box or talking to a couple different groups about taking the whole box again. We've had some false starts with some groups that are just going to be really torturous as far as how long they're going to take to get through the process. That's really the largest vacancy. We have a little bit left to go at Shops at Legacy, but not too much. That's where focus is.

False starts with some groups that are just going to be really torturous as far as how long theyre going to take to get through the process.

And then that's really the largest vacancy and then we have a little bit left to go add legacy.

But not too much so.

That's where our focus is.

Alright, and then last one for me.

<unk> got about $45 million of structured investments.

That are have maturity dates in the first part of 2006.

When you take a look at those today are those likely to be redeemed around that point in time or are those likely to be extended how are you guys thinking about that as the preferred I think its waters Creek and founder square yes.

[Analyst 1]: All right, and then last one for me, you've got about $45 million of structured investments that have maturity dates in the first part of 2026. You know, when you take a look at those today, are those likely to be redeemed around that point in time or are those likely to be expanded, extended? How are you guys thinking about that? Is the preferred? I think it's Waters Creek and Founders Square.

Craig will pay off waters.

I am sorry, founder square will pay off in waters Creek may extend but.

May just pay off as well so.

Seeing where that plays out and just depending on their their how they look at capitalizing that property going forward.

Okay. That's helpful. Thanks, guys. Appreciate the time this morning. Thank you.

John Albright: Founders Square will pay off. Waters Creek may extend, but may just pay off as well. We're seeing where that plays out, just depending on how they look at capitalizing that property going forward.

And the next question will come from Matthew <unk> with Jones trading your line is open.

Hey, good morning, guys. Thanks for taking the question.

You guys touched on what I was going to ask a little bit with the Florida acquisition, but I'm just trying to think about how you guys are going about capital allocation moving forward.

[Analyst 1]: Okay, that's helpful. Thanks, guys. Appreciate the time this morning.

Between buybacks and structured investments.

John Albright: Thank you.

Operator: The next question will come from Matthew Erdner with JonesTrading. Your line is open.

Given where the stocks trading are you guys going to continue to buy back shares down at this level.

Yes, so I mean clearly.

[Analyst 4]: Hey, good morning, guys. Thanks for taking the question. You guys touched on what I was going to ask a little bit with the Florida acquisition. I'm just trying to think about how you guys are going about capital allocation moving forward kind of between buybacks and structured investments. Given where the stock's trading, are you guys going to continue to buy back shares down at this level?

We would we're going to do as.

As much as we can given our credit facility sort of restrictions so absolutely.

Given the stock price kind of where we're trading below a nine multiple on five year lows and almost a 10 dividend yield.

Fairly ridiculous so clearly the best acquisition investments is our own stock.

John Albright: Yeah. I mean, clearly we're going to do as much as we can given our credit facility restrictions. Absolutely. Given the stock price, kind of where trading below a 9 multiple and 5-year lows and almost a 10% dividend yield, it's fairly ridiculous. Clearly the best acquisition investment is our own stock.

Got it and then as a follow up to that do you guys have any restrictions on.

Investing more into pine.

And if not is that something that you guys are considering doing just given that that stock prices trading at similar multiples.

Yes, so we do have a little bit more room, there without hitting our restrictions on what we can own a pine.

[Analyst 4]: Got it. As a follow up to that, do you guys have any restrictions on investing more into PINE? If not, is that something that you guys are considering doing just given that that stock price is trading at similar multiples?

And of course, we're opportunistic.

So just just depending on what happens with the stock price there, but clearly right now feel like CTO the double discount.

Got it that's helpful. Thank you guys. Thank you.

And the next question will come from Craig <unk>.

John Albright: Yeah, we do have a little bit more room there without hitting our restrictions on what we can own of PINE. Of course we're opportunistic, just depending on what happens with the stock price there. You know, clearly right now feel like CTO is the double discount.

<unk> with Citi. Your line is open.

Yeah, Hey, good morning, guys.

You've been pretty active on the structured finance side of Pine are you seeing any pickup in potential loans that worked for CTO or our property investments really more compelling right now.

[Analyst 4]: Got it. That's helpful.

Not so much at CTO as you mentioned, we're seeing a more at pine.

John Albright: Thank you, guys. Thank you.

Operator: The next question will come from Craig Kucera with Lucid Capital Markets. Your line is open.

Given that the CBS market has come back very strong or are these shopping centers are seeing less need for.

John Albright: Yeah.

[Analyst 2]: Hey, good morning guys. You've been pretty active on the structured finance side at PINE. Are you seeing any pickup in potential loans that work for CTO or are property investments really more compelling right now?

Structured finance there.

Certainly keeping our eye out there. So yeah, that's that's kind of where the market is right now.

John Albright: Yeah, not so much at CTO as you mentioned, we're seeing it more at PINE. You know, given that the CMBS market has come back very strong for these shopping centers, seeing less need for structured finance there, but certainly keeping our eye out there. That's kind of where the market is right now.

Got it.

Changing gears you have a decent amount of leases expiring here in the fourth quarter I think about 3% of ABR.

One is an anchor can you talk about your expectations there.

Yeah, we're not really seeing any any.

Risk as far as non renewal.

As you know a lot of these acquisitions had tenants way below market rent and some that we like.

[Analyst 2]: Got it. Changing gears, you have a decent amount of leases expiring here in the fourth quarter. I think about 3% of ABR is an anchor. Can you talk about your expectations there?

Like to get back in.

Replace with higher higher rents, but.

John Albright: Yeah, we're not really seeing any risk as far as non renewal. As you know, a lot of these acquisitions had tenants way below market rent and some that we'd like to get back and replace with higher rents. Yeah, there's no risk that we're kind of seeing out there on the renewal side.

Yes, there is no no risk that we're kind of seeing out there.

On the renewable side.

Okay got it.

Congrats on the shops at legacy leasing I think that's been there's been some vacancy there for a while can you give a sense of how additive that is to the signed not open pipeline.

Yes, I'll, let Phil touch on that but yes. It has been a long time longer than we would like of course.

One thing that that's going to bring to the property that that.

[Analyst 2]: Okay, got it. Congrats on the Shops at Legacy leasing. I think that's been, there's been some vacancies there for a while. Can you give a sense of how additive that is to the signed-not-open pipeline?

People kind of Miss out on a little bit is a lot of vibrancy a lot of bodies coming in.

And it's going to even though the restaurants have done really really well in the leasing without that just having that component for that property is really going to be an enhancement biller bill talk about that.

John Albright: Yeah, I'll let Phil touch on that. It has been a long time, longer than we would like to, of course. One thing that's going to bring to the property that people kind of miss out on a little bit is a lot of vibrancy, a lot of bodies coming in, and it's going to, even though the restaurants have done really, really well on the leasing, without that, just having that component for that property is really going to be an enhancement. Phil, talk about.

Yes.

Our entire pipeline are five and a half of legacy is close to $1 million of that Craig.

And thank you all right.

Private members club and then the co working lease that we just signed in October those two in particular.

Okay.

And just one more for me.

Any change to the credit watch negative list I know, we've talked about maybe homegoods or some of those things, but any change there.

Philip Mays: Yeah. Out of the entire SNO open pipeline of $5.5 million, Shops at Legacy is close to $1 million of that, Craig. In particular, the private members club and then the co-working lease that we just signed in October. Those two in particular.

No not this quarter now the same same sort of tenants and if anything kind of credits or gotten a little better I think.

Okay. Thank you Greg Thank you.

[Analyst 2]: Okay. Just one more for me. Any change to the credit watch negative list? I know we've talked about maybe HomeGoods or some of those things, but any change there?

And our next question is going to come from Gaurav Mehta with.

Alliance Global your line is open yes. Thanks.

Good morning.

Wanted to ask you on the nonrecurring item, but I think you reported.

John Albright: Not this quarter. No, same sort of tenants and, you know, if anything, credits have gotten a little better, I think.

Zero point $5 million of nonrecurring at this quarter and also related to G&A guidance, a little bit I just wanted to get some color on what those items are.

[Analyst 2]: Okay, thank you.

John Albright: Great, thank you.

Yes, so on the nonrecurring.

Operator: Our next question is going to come from Gaurav Mehta with Alliance Global Partners. Your line is open.

Tend to run.

Fluctuate between 100.

Quarter generally averaging around 250 incorrect it was closer to about half a million I believe this quarter that was slightly elevated.

[Analyst 3]: Yeah, thank you. Good morning. I wanted to ask you, on the non-recurring items, I think you reported $0.5 million on non-recurring this quarter. You also raised your G&A guidance a little bit. Just want to get some color on what those items were.

We tend to get a quarter like that every three to four quarters. It tends to pop up to that number but generally for like a good run rate is typically closer to $2 50.

Philip Mays: Yeah, on the non-recurring, those tend to run, you know, fluctuate between $100,000 and $300,000 a quarter. Generally averaged around $250,000, you're correct. It was closer to about $500,000, I believe, this quarter. It's slightly elevated and we tend to get a quarter like that every three or four quarters. It tends to pop up to that number. Generally, for a good run rate, it's typically closer to $250,000. G&A, I think, for the fourth quarter will be similar to this quarter if you're just looking to model that.

G&A I think for the fourth quarter will be similar to this quarter.

If you're just looking to model that.

Okay. Second question I have is on tenant improvement allowance it seemed like it was higher this quarter than last few quarters. How should we think about that line item has us find new leaders.

Yes. So it was very late in the first half of the year.

That volume in that size tends to fluctuate as anchors get moved and complete there.

Construction and get opened this quarter.

[Analyst 3]: Okay, second question I have is on tenant improvement allowances. It seems like it was higher this quarter than last few quarters. How should we think about that line item as you sign new leases?

Had one life at.

At Beaver Creek, and they have to support provide.

Provide invoices and stuff so they can get in and get opened but by the time, we reimburse them can lag a little but you had one life at Beaver Creek, you had boot barn in barns at Rockwell Rockwall, so with elevated this quarter.

Philip Mays: Yeah, so it was very late the first half of the year. You know, that volume and that size kind of tends to fluctuate as anchors get moved in, complete their construction and get open. This quarter you had One Life at Beaver Creek and they have to support, you know, provide invoices and stuff so they can get in and get open. By the time we reimburse them, it can lag a little. You had One Life at Beaver Creek. You had Boot Barn and Barnes at Rockwall. It was elevated this quarter. Currently I would expect the fourth quarter to also be elevated and be similar to the third quarter. Again, that's just going to depend on timing on individual anchors and when they get open and when they get, you know, their paperwork submitted for their tenant improvement allowances reimbursements.

Currently I would expect the fourth quarter to also be elevated in the similar to the third quarter.

But again that just going to depend on timing on individual anchors and when they get open and when they get their paperwork submitted for their Ti reimbursements, but.

We do have a lot of anchors lined up and I would expect the fourth quarter to be pretty elevated again.

Okay, and then lastly on the asset recycling that you talked about to fund the acquisition is that expected to happen this year.

That could happen next year.

We think that.

If something will happen this year, but you just.

You never know as far as.

Philip Mays: We do have a lot of anchors lined up and I would expect the fourth quarter to be pretty elevated again.

Some things kind of come up and need extensions and so forth but.

We're probably at the end of the year.

[Analyst 3]: Okay. Lastly, on the asset recycling that you talked about to fund the acquisition, is that expected to happen this year or is that expected to happen next year?

Okay.

Okay. Thank you that's all I had.

Okay.

And the next question comes from John Masako with B Riley Securities. Your line is open.

John Albright: We think that something will happen this year, you just never know as far as some things kind of come up and need extensions and so forth, but probably at the end of the year.

Good morning.

As you think about the anchor box releasing in the four to $4 $5 million of potential new base rent there how much of that is already set with the six pieces you've closed and how much is still contingent on the four leases.

[Analyst 3]: Okay, thank you. That's all I have.

John Albright: Thank you.

Operator: The next question comes from John Massocca with B. Riley Securities. Your line is open.

Youre negotiating or trying to close here in the next couple of months.

Yes so.

Out of the anchors the six that are done about they represent about two and a half.

[Analyst 2]: Good morning. As you think about the anchor box releasing and the $4 million to $4.5 million of potential new base rent there, how much of that is already set with the six leases you've closed, and how much is still contingent on the four leases that you're negotiating or trying to close here in the next couple of months?

Currently.

So with the ones that are left.

That would be a remaining two.

Okay.

And then maybe switching gears a little bit on the investment front.

Anything else in the pipeline you are seeing that.

Philip Mays: Yes. Out of the anchors, the six that are done represent about $2.5 million currently. With the ones that are left, that would be a remaining $2 million.

That might close in 2025 beyond the kind of Florida shopping center transaction, you talked about earlier.

Given that we're again kind of tight on time I wouldn't expect it but we.

We're not we're not also kind of.

If one of the things that we're looking at we are bidding on quite a bit of assets. So we like but not sure how competitive we'll be but we're certainly saying that we can close by year end. If it's important for a seller so hopeful but I wouldn't expect an additional one.

[Analyst 2]: Maybe switching gears a little bit on the investment front. Anything else in the pipeline you're seeing that might close in 2025, beyond the kind of Florida shopping center transaction you talked about earlier?

John Albright: Given that we're getting kind of tight on time, I wouldn't expect it. We're not also, you know, if one of the things that we're looking at, we are bidding on quite a bit of assets that we like, but not sure how competitive we'll be. We're certainly saying that we can close by year end if it's important for a seller. Hopeful, but I wouldn't expect an additional one.

Okay.

And then in terms of 2026, what's the acquisition environment look like today.

I guess, maybe to the extent you would do new investments how do you think about funding it and is there additional assets within the portfolio that you think are targets for capital recycling.

Beyond the assets youre going to use to.

To fund the Florida acquisition.

Yes, I mean, that's the easy part.

[Analyst 2]: In terms of 2026, what's the acquisition environment look like today? I guess maybe to the extent you would do new investments, how do you think about funding it, and is there additional assets within the portfolio that you think are targets for capital recycling beyond the assets you're going to use to fund the Florida acquisition?

If we find a good acquisition candidate we do have.

Lies assets given how much leasing we've done over last couple of years, and so taking advantage of that lower cap rate sale, maybe slower growth asset and recycling into.

Kind of value add higher growth assets and higher yielding so so we definitely have a nice pipeline of potential upsell opportunities just want to match that up with something we feel really good about.

John Albright: Yeah, I mean, that's the easy part. If we find a good acquisition candidate, we do have some stabilized assets, given how much leasing we've done over the last couple of years. Taking advantage of that, lower cap rate, sell maybe slower growth asset and recycling into value add, higher growth asset, higher yielding, we definitely have a nice pipeline of potential sell opportunities. Just want to match that up with something we feel really good about.

Do you think just fidelity.

Property or the new Mexico property is a potential candidate for that capital recycling either for the acquisition, we talked about earlier on the call or 2026 investment activity for.

For sure we just need to get the lease settled up with the state and then there'll be an condition to sell so thats probably early 2006 I think maybe previously this year I mentioned late this year, but.

[Analyst 2]: Do you think the Fidelity property or the New Mexico property is a potential candidate for that capital recycling, either for the acquisition we talked about earlier on the call or 2026 investment activity?

It takes a while.

Subtly lease expansion and so forth. So we're we're probably looking at early 2006 on selling that asset, but yes, thats definitely a candidate.

John Albright: For sure. We just need to get the lease settled up with the state, and then it will be in condition to sell. That's probably early 2026. I think maybe previously this year I mentioned late this year, but it takes a while to settle the lease, expansion, and so forth. We're probably looking at early 2026 on selling that asset. Yeah, that's definitely a candidate.

Okay.

And then lastly.

The shops at legacy kind of remaining.

Square footage to be leased once you bring in the co working tenant.

What kind of is that just big picture is it all kind of small shop space is there any kind of anchor space still left in that property just kind of curious.

What that looks like.

It's more small small shop space that we've gone through literally.

[Analyst 2]: Okay. Lastly, the Shops at Legacy, the kind of remaining square footage to be leased once you bring in the co-working tenant, what kind is that? Just big picture, is it all kind of small shop space? Is there any kind of anchor space still left in that property? Just curious what that looks like.

Three different tenants that.

We just didn't get there, whether we didn't like their financial or too much Ti so are being a little picky on it.

And then we have a little bit of workspace left but we feel like.

John Albright: Yeah, it's more small shop space that we've gone through. Literally three different tenants that we just didn't get there, whether we didn't like their financials or too much tenant improvement allowances. We're being a little picky on it. We have a little bit of WeWork space left. We feel like when the private club opens, they've expressed some interest that that might be an expansion opportunity for them. Everything's very manageable. We're just trying to kind of be picky about who we put in.

When the private club openings, they've expressed some interest that that might be an expansion of an alternative for them.

So.

Everything is very manageable or just trying to kind of be picky about who we put in.

Okay.

That's it for me. Thank you very much thank you.

This concludes today's Q&A session and today's conference call.

For participating you may now disconnect.

[Analyst 2]: Okay, that's it for me. Thank you very much.

John Albright: Thank you.

Operator: This concludes today's Q&A session and today's conference call. Thank you for participating. You may now disconnect.