Curbline Properties Q4 2025 Curbline Properties Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Curbline Properties Corp Earnings Call
Speaker #1: Thank you for standing by
Operator: Thank you for standing by and welcome to the Curbline Properties Q4 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you'd like to ask a question during this time, simply press * followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press * 1. Thank you. I'd now like to turn the call over to Stephanie Rusta, Vice President of Capital Markets. You may begin.
Operator: Thank you for standing by and welcome to the Curbline Properties Q4 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you'd like to ask a question during this time, simply press * followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press * 1. Thank you. I'd now like to turn the call over to Stephanie Rusta, Vice President of Capital Markets. You may begin.
Speaker #1: And welcome to the Curbline Properties 4th Quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the question and answer session,
Speaker #1: If you'd like to ask a question during this time, simply press star followed by the keypad. If you would like to withdraw your question, again, press star one.
Speaker #1: Thank you. I'd now like to turn the call over to Stephanie Perez, Vice President of Begin.
Stephanie Ruys de Perez: Thank you. Good morning and welcome to Curbline Properties Q4 2025 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 curbline.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. Additional information may be found in our earnings press release and in our filings with the SEC, including our most recent reports on Forms 10-K and 10-Q.
Stephanie Ruys de Perez: Thank you. Good morning and welcome to Curbline Properties Q4 2025 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 curbline.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. Additional information may be found in our earnings press release and in our filings with the SEC, including our most recent reports on Forms 10-K and 10-Q.
Speaker #2: Quarter 2025 earnings conference call. Joining me today is 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 curbline.com.
Speaker #2: Remarks during today's call, by pressing the number one on your telephone. Thank you. Welcome to Curbline Properties' Q4. Good morning, and please be aware that certain of our statements today may contain forward-looking statements within laws.
Speaker #2: These forward-looking statements are intended to support our prepared remarks, but are subject to risks and uncertainties, and actual results may differ materially from our forward-looking statements.
Speaker #2: Additional
Speaker #2: Information may be found in our earnings press release and in our filings with the SEC, including our most recent reports on Forms 10-K and 10-Q.
Speaker #2: In addition, we will be discussing non-GAAP financial measures on today's call, including FFO, operating FFO, and same property 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. After the speaker's remarks, there will be a question and answer session.
Stephanie Ruys de Perez: In addition, we will be discussing non-GAAP financial measures on today's call, including FFO, operating FFO, and same property net operating income. Descriptions and reconciliation 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.
Stephanie Ruys de Perez: In addition, we will be discussing non-GAAP financial measures on today's call, including FFO, operating FFO, and same property net operating income. Descriptions and reconciliation 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.
Speaker #2: At this time, it is my pleasure to introduce our Chief Executive Officer, David Lukes, and Chief Executive Officer.
Speaker #2: David Lukes. Good
David Lukes: Good morning and welcome to Curbline Properties Q4 conference call. The Q4 capped an incredible first year as a public company for Curbline, and I couldn't be more pleased with our results. Let me start by thanking the entire team for their tireless efforts to position the company for outperformance. We continue to lead in this unique, capital-efficient sector with a clear first-mover advantage as the only public company exclusively focused on acquiring top-tier convenience retail assets across the United States. Before Conor walks through the quarterly results and our 2026 guidance in detail, I'd like to take a moment to reflect on our first year as a public company along with our expectations going forward. In 2025, we acquired just under $800 million of assets through a combination of individual acquisitions and portfolio deals.
David Lukes: Good morning and welcome to Curbline Properties Q4 conference call. The Q4 capped an incredible first year as a public company for Curbline, and I couldn't be more pleased with our results. Let me start by thanking the entire team for their tireless efforts to position the company for outperformance. We continue to lead in this unique, capital-efficient sector with a clear first-mover advantage as the only public company exclusively focused on acquiring top-tier convenience retail assets across the United States. Before Conor walks through the quarterly results and our 2026 guidance in detail, I'd like to take a moment to reflect on our first year as a public company along with our expectations going forward. In 2025, we acquired just under $800 million of assets through a combination of individual acquisitions and portfolio deals.
Speaker #3: Good morning, and welcome to Curbline Properties' 4th Quarter conference call. The 4th Quarter caps an incredible first year as a public company for Curbline, and I couldn't be more pleased with our results.
Speaker #3: Let me start by thanking the entire team for their outperformance. We continue to sector with a clear first-mover.
Speaker #3: Advantage as the only public company—the meaning of federal securities—exclusively focused on acquiring top-tier convenience retail assets across the United States. Tireless efforts to position the company for—before Conor walks through the quarterly results and our 2026 lead in this unique capital-efficient guidance in detail, I'd like to take a moment to reflect on our first year as a public company, along with our expectations going forward.
Speaker #3: In 2025, we acquired just under $800 million of assets through a combination of individual acquisitions and portfolio deals. We signed over 400,000 square feet of new leases and renewals, with new lease spreads averaging 20% and our renewal spreads just under 10%.
David Lukes: We signed over 400,000 sq ft of new leases and renewals, with new lease spreads averaging 20% and our renewal spreads just under 10%. We generated over 3% same property growth on top of 5.8% growth the prior year, and importantly, our capital expenditures were just 7% of NOI, placing us among the most capital-efficient operators in the entire public REIT sector, an important hallmark of the convenience asset class. We believe that these results are not just reflective of a single year but are representative of the asset class and the opportunities in front of us and help explain our confidence in delivering superior risk-adjusted returns. Specifically, one, we believe that there remains a significant addressable investment market that provides an opportunity to scale this business. Two, we believe that the convenience sector, with simple and flexible buildings, is aligned with consumer behavior.
David Lukes: We signed over 400,000 sq ft of new leases and renewals, with new lease spreads averaging 20% and our renewal spreads just under 10%. We generated over 3% same property growth on top of 5.8% growth the prior year, and importantly, our capital expenditures were just 7% of NOI, placing us among the most capital-efficient operators in the entire public REIT sector, an important hallmark of the convenience asset class. We believe that these results are not just reflective of a single year but are representative of the asset class and the opportunities in front of us and help explain our confidence in delivering superior risk-adjusted returns. Specifically, one, we believe that there remains a significant addressable investment market that provides an opportunity to scale this business. Two, we believe that the convenience sector, with simple and flexible buildings, is aligned with consumer behavior.
Speaker #3: We generated over 3% same-property growth on top of 5.8% growth the prior year, and importantly, our capital expenditures were just 7% of NOI.
Speaker #3: Placing us among the most capital-efficient operators in the entire public REIT sector—an important hallmark of the convenience asset class. We believe that these results are not just reflective of a single year, but are representative of the asset class and the opportunities in front of us, and help explain our confidence in delivering superior risk-adjusted returns.
Speaker #3: is aligned with consumer behavior. And three, we believe that we have the team and the significant addressable investment market—plus the balance sheet—to support our growth returns.
David Lukes: Three, we believe that we have the team and the balance sheet to support our growth and drive compelling returns. In a little more detail, first, our investments. We believe we currently own the largest high-quality portfolio of convenience properties in the US, totaling almost 5 million sq ft. The total US market for this asset class is 950 million sq ft, 190 times larger than our current footprint. Not all of that inventory meets our standards, but our criteria are clear: primary corridors, strong demographics, high traffic counts, and creditworthy tenants. Our track record demonstrates the liquidity of assets that match those metrics, allowing us to grow via a mixture of one-off deals and portfolios while maintaining our industry leadership by acquiring only the best real estate.
David Lukes: Three, we believe that we have the team and the balance sheet to support our growth and drive compelling returns. In a little more detail, first, our investments. We believe we currently own the largest high-quality portfolio of convenience properties in the US, totaling almost 5 million sq ft. The total US market for this asset class is 950 million sq ft, 190 times larger than our current footprint. Not all of that inventory meets our standards, but our criteria are clear: primary corridors, strong demographics, high traffic counts, and creditworthy tenants. Our track record demonstrates the liquidity of assets that match those metrics, allowing us to grow via a mixture of one-off deals and portfolios while maintaining our industry leadership by acquiring only the best real estate.
Speaker #3: In a little more detail, first, our investments. We believe we currently own the largest high-quality portfolio of convenience properties in the US, totaling almost 5 million square feet.
Speaker #3: The total U.S. market for this asset class is 950 million square feet, 190 times larger than our current footprint. Not all of that inventory meets our standards, but our criteria are clear.
Speaker #3: Primary corridors, strong demographics, high traffic counts, and creditworthy—the liquidity of assets that match those grow via a mixture of one-off metrics, allowing us to do deals and portfolios while maintaining our industry leadership by acquiring only the best real tenants.
Speaker #3: Even the top quartile of the convenience sector itself is 50 times larger than our current portfolio. And our track record demonstrates providing a very long runway to grow.
David Lukes: Even the top quartile of the convenience sector itself is 50 times larger than our current portfolio, providing a very long runway to grow. To achieve this growth in a highly fragmented sector, the company must build a significant network of relationships with sellers and brokers across our target markets. We've built that organization over the past seven years, and the results are showing. As an example, of the $1 billion of acquisitions we've completed since the spinoff of Curbline, 27% of those deals were direct and off-market with sellers, and 73% were marketed through the brokerage community. Even within those marketed deals, there were 24 different brokerage companies involved in the listing of individual properties, which highlights not only the highly fractured market but the importance of a national network of relationships that Curbline has built.
David Lukes: Even the top quartile of the convenience sector itself is 50 times larger than our current portfolio, providing a very long runway to grow. To achieve this growth in a highly fragmented sector, the company must build a significant network of relationships with sellers and brokers across our target markets. We've built that organization over the past seven years, and the results are showing. As an example, of the $1 billion of acquisitions we've completed since the spinoff of Curbline, 27% of those deals were direct and off-market with sellers, and 73% were marketed through the brokerage community. Even within those marketed deals, there were 24 different brokerage companies involved in the listing of individual properties, which highlights not only the highly fractured market but the importance of a national network of relationships that Curbline has built.
Speaker #3: To achieve this growth in a highly fragmented sector, the company must build a significant network of relationships with sellers and brokers across our target markets.
Speaker #3: We've built that organization over the past seven years and the example, of the $1 results are showing. As an billion of acquisitions we've completed since the spin-off of Curbline, 27% of those deals were direct and off-market with sellers, and 73% were marketed through the brokerage community.
Speaker #3: Even within those marketed deals, there were 24 different brokerage companies involved in the listing of individual properties, which highlights not only the highly fractured market but the importance of a national network of relationships. Curbline has invested in simple, flexible buildings that are the nexus of consumer behavior.
David Lukes: Second, we invest in simple, flexible buildings that are the nexus of consumer behavior. Our strategy is clear: provide convenient access to customers, running errands woven into their daily lives, and lease to tenants with strong credit who are willing to pay top rent to access those customers. Unlike traditional shopping centers built for destination retailers, our properties serve customers running daily errands. According to third-party geolocation data, 2/3 of our visitors stay less than seven minutes on our properties, often returning multiple times a day. As a result, rather than purpose-built structures, we favor straightforward rows of shops that support a wide variety of uses. This flexibility drives tenant demand from an extremely wide pool of tenants, rising rents, and minimal capital outlay. On page 13 of our supplemental, you'll notice that we completed a total of 67 new leases over the course of 2025.
David Lukes: Second, we invest in simple, flexible buildings that are the nexus of consumer behavior. Our strategy is clear: provide convenient access to customers, running errands woven into their daily lives, and lease to tenants with strong credit who are willing to pay top rent to access those customers. Unlike traditional shopping centers built for destination retailers, our properties serve customers running daily errands. According to third-party geolocation data, 2/3 of our visitors stay less than seven minutes on our properties, often returning multiple times a day. As a result, rather than purpose-built structures, we favor straightforward rows of shops that support a wide variety of uses. This flexibility drives tenant demand from an extremely wide pool of tenants, rising rents, and minimal capital outlay. On page 13 of our supplemental, you'll notice that we completed a total of 67 new leases over the course of 2025.
Speaker #3: Our strategy is clear. Provide convenient access and drive compelling value to customers running errands, woven into their daily lives, and lease to tenants with strong credit who are willing to pay top rent to access those customers.
Speaker #3: Unlike traditional shopping centers built for destination customers running daily retailers, our properties serve errands. According to third-party geolocation data, two-thirds of our visitors stay less than seven minutes on our day.
Speaker #3: As a result, rather than purpose-built structures, properties often return multiple times a week. We favor straightforward rows of shops that support a wide variety of uses.
Speaker #3: This flexibility drives tenant demand from an extremely wide pool of tenants, outlay. On page 13 of our supplemental, you'll see 67 new leases over the course of 2025.
Speaker #3: Notice that we completed a total of 64 of those leases were with unique tenants, and 70% were national credit. Incredibly deep market for leasing to a rising rents, and minimal capital operators.
David Lukes: 64 of those leases were with unique tenants, and 70% were national credit operators, both of which highlight the incredibly deep market for leasing to a wide variety of uses in our simple buildings and that credit tenants are seeking high-traffic intersections. The result for our portfolio is a highly diversified tenant base, with only nine tenants contributing more than 1% of base rent and only one tenant more than 2%. Third, our team and our balance sheet are built to support our growth and structured to scale. Curbline has all of the pieces on hand to generate double-digit cash flow growth for a number of years to come.
David Lukes: 64 of those leases were with unique tenants, and 70% were national credit operators, both of which highlight the incredibly deep market for leasing to a wide variety of uses in our simple buildings and that credit tenants are seeking high-traffic intersections. The result for our portfolio is a highly diversified tenant base, with only nine tenants contributing more than 1% of base rent and only one tenant more than 2%. Third, our team and our balance sheet are built to support our growth and structured to scale. Curbline has all of the pieces on hand to generate double-digit cash flow growth for a number of years to come.
Speaker #3: Wide variety of uses and our simple buildings, and the credit tenants are both of which highlight the seeking high-traffic intersections. The result for our portfolio is a highly diversified tenant base, with only nine tenants contributing more than 1% of base rent and only one tenant more than 2%.
Speaker #3: Third, our team and our balance sheet are built to support our growth and structured to scale. Curbline has all of the pieces on hand to generate double-digit cash flow growth for a number of years to come.
Speaker #3: Based on our 2026 FFO guidance, we're forecasting a 12% year-over-year FFO average, and it's driven not just by external growth but by the into additional investments.
David Lukes: Based on our 2026 FFO guidance, we're forecasting 12% year-over-year FFO growth, which is well above the REIT sector average and is driven not just by external growth but by the capital efficiency of the business, allowing us to reinvest retained cash flow into additional investments. In summary, I couldn't be more optimistic about the opportunity ahead for Curbline as we exclusively focus on scaling the fragmented convenience marketplace and delivering compelling relative and absolute growth for stakeholders. With that, I'll turn it over to Conor.
David Lukes: Based on our 2026 FFO guidance, we're forecasting 12% year-over-year FFO growth, which is well above the REIT sector average and is driven not just by external growth but by the capital efficiency of the business, allowing us to reinvest retained cash flow into additional investments. In summary, I couldn't be more optimistic about the opportunity ahead for Curbline as we exclusively focus on scaling the fragmented convenience marketplace and delivering compelling relative and absolute growth for stakeholders. With that, I'll turn it over to Conor.
Speaker #3: In summary, I couldn't be more optimistic about the opportunity ahead for Curbline as we exclusively focus on scaling the fragmented convenience marketplace and capital efficiency of the business, allowing growth which is well above the REIT sector, delivering compelling, relative, and absolute growth for stakeholders.
Speaker #3: And with that, I'll turn it over.
Speaker #3: to Connor. Thanks,
Conor Fennerty: Thanks, David. I'll start with Q4 earnings and operating metrics before shifting to the company's 2026 guidance and then concluding with the balance sheet. Q4 results were ahead of budget, largely due to higher-than-forecast NOI, driven in part by rent commencement timing along with higher acquisition volume and lease termination fees, partially offset by G&A. NOI was up 16% sequentially and almost 60% year-over-year, driven by acquisitions along with organic growth. Outside of the quarterly operational outperformance, there are no other material variances for the quarter, highlighting the simplicity of the Curbline income statement and business plan. You will note that in the Q4, we recorded a gross up of $1 million of non-cash G&A expense, which was offset by $1 million of non-cash other income.
Conor Fennerty: Thanks, David. I'll start with Q4 earnings and operating metrics before shifting to the company's 2026 guidance and then concluding with the balance sheet. Q4 results were ahead of budget, largely due to higher-than-forecast NOI, driven in part by rent commencement timing along with higher acquisition volume and lease termination fees, partially offset by G&A. NOI was up 16% sequentially and almost 60% year-over-year, driven by acquisitions along with organic growth. Outside of the quarterly operational outperformance, there are no other material variances for the quarter, highlighting the simplicity of the Curbline income statement and business plan. You will note that in the Q4, we recorded a gross up of $1 million of non-cash G&A expense, which was offset by $1 million of non-cash other income.
Speaker #4: David. I'll start with fourth-quarter earnings and operating metrics before shifting to the company's 2026 guidance and then concluding with the balance sheet. We were ahead of budget largely due to fourth-quarter results with higher-than-forecast NOI, driven in part by rent commencement timing, along with higher acquisition volume and lease termination fees, partially offset by G&A.
Speaker #4: NOI was up 16% sequentially, and almost
Speaker #4: 60% year-over-year, driven by acquisitions along with organic US to reinvest retained cash flow growth. Outside of the quarterly operational outperformance, there are no other material variances for the quarter, highlighting the simplicity of the Curbline income statement and business plan.
Speaker #4: You will note a gross-up of $1 million of non-cash G&A expense, which was offset by $1 million of non-cash other income. This gross-up, which is a function of the shared services agreement and nets to zero net income, will continue as long as the agreement is in place and is excluded from any G&A figures or targets.
Conor Fennerty: This gross up, which is a function of the shared services agreement and nets to zero net income, will continue as long as the agreement is in place and is excluded from any G&A figures or targets. In terms of other operating metrics, the lease rate was unchanged from the Q3 at 96.7%, with occupancy up 20 basis points. Leasing volume in the Q4 decelerated from the Q3, though that is simply a function of less available space as overall leasing activity remains elevated. We remain encouraged by the depth of demand and the economics for available space, which we believe is a differentiator for Curbline as compared to other property types. Same Property NOI was up 3.3% for the full year and 1.5% for the Q4, despite a 50 basis point headwind from uncollectible revenue.
Conor Fennerty: This gross up, which is a function of the shared services agreement and nets to zero net income, will continue as long as the agreement is in place and is excluded from any G&A figures or targets. In terms of other operating metrics, the lease rate was unchanged from the Q3 at 96.7%, with occupancy up 20 basis points. Leasing volume in the Q4 decelerated from the Q3, though that is simply a function of less available space as overall leasing activity remains elevated. We remain encouraged by the depth of demand and the economics for available space, which we believe is a differentiator for Curbline as compared to other property types. Same Property NOI was up 3.3% for the full year and 1.5% for the Q4, despite a 50 basis point headwind from uncollectible revenue.
Speaker #4: In terms of other operating metrics, the lease rate was unchanged from the third quarter at 96.7%, with occupancy up 20 basis points. Leasing volume in the fourth quarter decelerated from the third quarter, but that is simply a function of less available space, as overall leasing activity remains elevated.
Speaker #4: We demand and the economics for available remain encouraged by the depth of space, which we believe is a differentiator for Curbline as compared to other property types.
Speaker #4: Same-property NOI was up 3.3% for the full year, and 1.5% for the fourth quarter, despite a 50 basis point headwind from uncollectible revenue.
Speaker #4: Importantly, this growth was generated by limited capital expenditures, with NOI growth of 8.9%, and full-year capex as a percentage of NOI of just under 7%.
Conor Fennerty: Importantly, this growth was generated by limited capital expenditures, with Q4 Capex as a percentage of NOI of 8.9% and full-year Capex as a percentage of NOI of just under 7%. Moving to our outlook for 2026, we are introducing FFO guidance and a range between $1.17 and 1.21 per share, which at the midpoint represents 12% growth. We believe that this level of growth will be the highest, certainly in the retail space, and amongst the highest in the entire REIT sector. Underpinning the midpoint of the range is, one, roughly $700 million of full-year investments. Two, a 3.25% return on cash with interest income declining over the course of the year as cash is invested. Three, Capex as a percentage of NOI of less than 10%. And four, G&A of roughly $32 million, which includes fees paid to SITE Centers as part of the shared services agreement.
Conor Fennerty: Importantly, this growth was generated by limited capital expenditures, with Q4 Capex as a percentage of NOI of 8.9% and full-year Capex as a percentage of NOI of just under 7%. Moving to our outlook for 2026, we are introducing FFO guidance and a range between $1.17 and 1.21 per share, which at the midpoint represents 12% growth. We believe that this level of growth will be the highest, certainly in the retail space, and amongst the highest in the entire REIT sector. Underpinning the midpoint of the range is, one, roughly $700 million of full-year investments. Two, a 3.25% return on cash with interest income declining over the course of the year as cash is invested. Three, Capex as a percentage of NOI of less than 10%. And four, G&A of roughly $32 million, which includes fees paid to SITE Centers as part of the shared services agreement.
Speaker #4: Moving to our outlook for 2026, we are introducing FFO guidance and a range between $1.17 and $1.21 per share which, at the midpoint, represents 12% growth.
Speaker #4: We believe that this level of growth will be the highest, certainly in retail with fourth-quarter capex as a percentage space, and amongst the highest in the entire REIT sector.
Speaker #4: Underpinning the midpoint of the range is, one, roughly $700 million of full-year investments; two, a 3.25% return on cash with interest income declining over the course of the year as cash is invested; three, capex as a percentage of NOI of less than 10%; and four, G&A of roughly $32 million, which includes fees paid to Site Centers as part of the shared services agreement.
Speaker #4: Those fees totaled $970,000 in the fourth quarter. In terms of same-property NOI, we are forecasting growth of 3% at the midpoint in 2026.
Conor Fennerty: Those fees totaled $970,000 in the Q4. In terms of Same Property NOI, we are forecasting growth of 3% at the midpoint in 2026. As I have noted previously, the same property pool is growing but small, and it includes only assets owned for at least 12 months as of 31 December 2025, resulting in a large non-same property pool. That said, we don't expect as large of a gap in terms of relative growth between the two pools in 2026, though uncollectible revenue will remain a year-over-year headwind to same property pool despite limited forecast bad debt activity. For moving pieces between the Q4 of 2025 and the Q1 of 2026, as a result of the funding of the private placement offering in January, interest expense is set to increase to about $8 million in the Q1.
Conor Fennerty: Those fees totaled $970,000 in the Q4. In terms of Same Property NOI, we are forecasting growth of 3% at the midpoint in 2026. As I have noted previously, the same property pool is growing but small, and it includes only assets owned for at least 12 months as of 31 December 2025, resulting in a large non-same property pool. That said, we don't expect as large of a gap in terms of relative growth between the two pools in 2026, though uncollectible revenue will remain a year-over-year headwind to same property pool despite limited forecast bad debt activity. For moving pieces between the Q4 of 2025 and the Q1 of 2026, as a result of the funding of the private placement offering in January, interest expense is set to increase to about $8 million in the Q1.
Speaker #4: As I have noted previously, the same property pool is growing, but small. And it includes months as of November—only assets owned for at least 12/31/2025, resulting in a large non-same property pool.
Speaker #4: That said, we don't expect as large of a gap in terms of relative growth between the two pools in 2026. Though uncollectible revenue will remain a year-over-year headwind to the same property pool, despite limited forecast bad debt activity.
Speaker #4: For moving pieces between the fourth quarter of 2025 and the first quarter of 2026, as a result of the funding of the private placement offering in January, interest expense is set to increase to about $8 million in the first quarter.
Speaker #4: Additionally, we do not expect the $1.3 million of lease termination fees recorded in the fourth quarter to reoccur in the first, which is expected to remain roughly flat quarter over quarter.
Conor Fennerty: Additionally, we do not expect the $1.3 million of lease termination fees recorded in the Q4 to reoccur in the Q1. G&A is also expected to remain roughly flat quarter over quarter. Details on 2026 guidance and expectations can be found on page 11 of the earnings slides. Ending on the balance sheet, Curbline was spun off with a unique capital structure aligned with the company's business plan. In the Q4, Curbline closed on the first tranche of a $200 million private placement offering with the balance funding in January. The offering brings total debt capital raised since formation to $600 million at a weighted average rate of roughly 5%. Additionally, in the Q4 and Q1 to date, the company sold 5.2 million shares on a forward basis with $120 million of expected gross proceeds, which we expect to settle in 2026.
Conor Fennerty: Additionally, we do not expect the $1.3 million of lease termination fees recorded in the Q4 to reoccur in the Q1. G&A is also expected to remain roughly flat quarter over quarter. Details on 2026 guidance and expectations can be found on page 11 of the earnings slides. Ending on the balance sheet, Curbline was spun off with a unique capital structure aligned with the company's business plan. In the Q4, Curbline closed on the first tranche of a $200 million private placement offering with the balance funding in January. The offering brings total debt capital raised since formation to $600 million at a weighted average rate of roughly 5%. Additionally, in the Q4 and Q1 to date, the company sold 5.2 million shares on a forward basis with $120 million of expected gross proceeds, which we expect to settle in 2026.
Speaker #4: Quarter. Details can be found on page 11 of the earnings 2026 guidance and expectations slides. Ending on the balance sheet, GNA is also—Curbline was spun off with a unique capital structure aligned with the company's business plan.
Speaker #4: And in the fourth quarter, Curbline closed on the first tranche of a $200 million private placement offering, with the balance funding in January. The offering brings total debt capital raised since formation to $600 million at a weighted average rate of roughly 5%.
Speaker #4: Additionally, in the fourth quarter and first quarter to date, the company sold 5.2 million shares on a forward basis with $120 million of expected gross proceeds, which we expect to settle in 2026.
Speaker #4: Including cash on hand year-end of $290 million, along with the debt and equity proceeds, Curbline had $582 million of immediate liquidity available to fund investments, leaving a balance of less than $100 million guidance after taking into account retained cash to fund the investments included in flow.
Conor Fennerty: Including cash on hand at year-end of $290 million, along with the debt and equity proceeds, Curbline had $582 million of immediate liquidity available to fund investments, leaving a balance of less than $100 million to fund the investments included in guidance after taking into account retained cash flow. Curbline's proven access to unsecured fixed-rate debt and now the ATM is a key differentiator from the largely private buyer universe acquiring convenience properties. The net result of the capital markets activity since formation is that the company ended the year with a leverage ratio less than 20%, providing substantial dry powder and liquidity to continue to acquire assets and scale, resulting in significant earnings and cash flow growth well in excess of the REIT average. With that, I'll turn it back to David.
Conor Fennerty: Including cash on hand at year-end of $290 million, along with the debt and equity proceeds, Curbline had $582 million of immediate liquidity available to fund investments, leaving a balance of less than $100 million to fund the investments included in guidance after taking into account retained cash flow. Curbline's proven access to unsecured fixed-rate debt and now the ATM is a key differentiator from the largely private buyer universe acquiring convenience properties. The net result of the capital markets activity since formation is that the company ended the year with a leverage ratio less than 20%, providing substantial dry powder and liquidity to continue to acquire assets and scale, resulting in significant earnings and cash flow growth well in excess of the REIT average. With that, I'll turn it back to David.
Speaker #4: Curbline's proven access to unsecured fixed-rate debt and now the ATM is a private buyer universe acquiring convenience properties. The net result of the capital markets activity since formation is that the company ended the year with a leverage ratio less than 20%, providing substantial dry key differentiator from the largely powder and liquidity to continue to acquire assets and scale resulting in significant earnings and cash flow growth well in excess of the read average.
Speaker #4: With that, I'll turn it back to David.
Speaker #2: Thank you, Connor.
David Lukes: Thank you, Conor. Operator, we are now ready to take questions.
David Lukes: Thank you, Conor. Operator, we are now ready to take questions.
Speaker #2: questions.
Speaker #3: Thank you. We will now
Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Ronald Kamdem from Morgan Stanley. Your line is open.
Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Ronald Kamdem from Morgan Stanley. Your line is open.
Speaker #3: We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again.
Speaker #3: Your first question today comes from the line of Ronald Camden from Morgan Stanley. Your line is open.
Speaker #3: open.
Speaker #4: Hey, thanks
Ronald Kamdem: Hey, thanks so much. Can you talk about the acquisition pipeline, how it's building? And I know you mentioned $700 million in the guidance. What sort of cap rate is assumed into that, and how have they been trending? Thanks.
Ronald Kamdem: Hey, thanks so much. Can you talk about the acquisition pipeline, how it's building? And I know you mentioned $700 million in the guidance. What sort of cap rate is assumed into that, and how have they been trending? Thanks.
Speaker #4: So much. Can you talk about the acquisition pipeline—how it's building? And I know you mentioned $700 million in the guidance. What sort of cap rate is assumed into that?
Speaker #4: And how has that been trending? Thanks. Operator, we are now ready to take
David Lukes: Good morning, Ron and David. I'll let Conor talk about the pipeline, but I would say cap rates have remained averaging just north of 6% over the last couple of quarters. I'll remind you, as we've said in previous quarters, that the range can actually be quite wide between mid-fives to high sixes. That really depends a lot on occupancy, the rent roll, mark-to-market, and so forth. But when you blend all these deals together, we're still in the low sixes.
David Lukes: Good morning, Ron and David. I'll let Conor talk about the pipeline, but I would say cap rates have remained averaging just north of 6% over the last couple of quarters. I'll remind you, as we've said in previous quarters, that the range can actually be quite wide between mid-fives to high sixes. That really depends a lot on occupancy, the rent roll, mark-to-market, and so forth. But when you blend all these deals together, we're still in the low sixes.
Speaker #2: would say cap rates have David. I'll let Connor talk about the pipeline. remained averaging just north But I of 6% as they have the last couple of quarters.
Speaker #2: I'll remind you, as we've said in previous quarters, that the range can actually be quite wide—between mid-5s to high-6s. That really depends a lot on occupancy, the rent roll marked to market, and so forth.
Speaker #2: But when you blend all these deals together, we're still in the
Speaker #2: low-sixes. And Ron, just on the
Conor Fennerty: And Ron, just on the pipeline. So as you know, our initial expectations prior to the spinoff were to acquire about $500 million of assets on an annual basis. Obviously, we've ramped that up quite a bit to $700 million this year. And at this point, for what we've either closed under contract or have been awarded, it's about half, or we have visibility about half of that pipeline today. So there's quite a bit of visibility on closings for 2026 already. The only thing I would just caveat is there's risk to that, right, until we get through diligence on each of those assets. But again, I just would frame it versus either even a year ago. We have a much higher level of visibility on the pipeline today than we did at any point.
Conor Fennerty: And Ron, just on the pipeline. So as you know, our initial expectations prior to the spinoff were to acquire about $500 million of assets on an annual basis. Obviously, we've ramped that up quite a bit to $700 million this year. And at this point, for what we've either closed under contract or have been awarded, it's about half, or we have visibility about half of that pipeline today. So there's quite a bit of visibility on closings for 2026 already. The only thing I would just caveat is there's risk to that, right, until we get through diligence on each of those assets. But again, I just would frame it versus either even a year ago. We have a much higher level of visibility on the pipeline today than we did at any point.
Speaker #4: So, as you know, our initial $500 million of assets on annual expectations prior to the spin-off were to acquire about basis.
Speaker #4: Obviously, we've ramped that up quite a bit to $700 million this year. And at this point, for what has been awarded, it's about half, or we have visibility to about half of that pipeline today.
Speaker #4: We've either closed under contract or—so there's quite a bit of visibility on closings for 2026 already. The only thing I would just caveat is there's risk to that, right?
Speaker #4: Until we get through diligence on each of those assets. But again, I just would frame it versus even a year ago: we have a much higher level of visibility on the pipeline today than we did at any point.
Speaker #4: Until we get through diligence on each of those assets. But again, I just would frame it versus even a year ago—we have a much higher level of visibility on the pipeline today than we did at any point.
Speaker #3: Great. My second question was just, I think, the same story on why I had a tough comp. And it looks like leasing spreads decelerated a little bit.
Ronald Kamdem: Great. My second question was just, I think the same store NOI had a tough comp, and it looks like leasing spreads decelerated a little bit. Maybe can you just talk a little bit more about what happened in the quarter? And then looking forward on the 3% same store NOI guidance, presumably that's all sort of based on renewals and no occupancy gains, but any sort of other details was baked into that in terms of bad debt and so forth. Thanks.
Ronald Kamdem: Great. My second question was just, I think the same store NOI had a tough comp, and it looks like leasing spreads decelerated a little bit. Maybe can you just talk a little bit more about what happened in the quarter? And then looking forward on the 3% same store NOI guidance, presumably that's all sort of based on renewals and no occupancy gains, but any sort of other details was baked into that in terms of bad debt and so forth. Thanks.
Speaker #3: Maybe can you just talk a little bit more about what happened in the quarter? And then looking forward on the three percent, same story on why guidance—presumably that's all sort of based on renewals and no occupancy gains.
Speaker #3: But any sort of other details baked into that in terms of bad debt and so forth?
Speaker #3: Thanks. Sure.
Conor Fennerty: Sure. It's Conor again, Ron. So on the leasing spreads first, as I always caveat, I encourage folks to look at trailing 12 months just given how small our denominator is. If we look at the pipeline for leasing activity in Q1 and Q2 of this year, we would expect our new lease spreads to be right back in the low 20s, which was where they were for the full year. I would say a similar comment on renewals: look at TTM as opposed to just one quarter. For same property, similar response, very small pool. We've got 50% of the assets are in the non-same store pool. So a couple of shops moving out can create some volatility. It's clear though; if you look at our lease rate, it's up year-over-year, and it's effectively unchanged quarter-over-quarter.
Conor Fennerty: Sure. It's Conor again, Ron. So on the leasing spreads first, as I always caveat, I encourage folks to look at trailing 12 months just given how small our denominator is. If we look at the pipeline for leasing activity in Q1 and Q2 of this year, we would expect our new lease spreads to be right back in the low 20s, which was where they were for the full year. I would say a similar comment on renewals: look at TTM as opposed to just one quarter. For same property, similar response, very small pool. We've got 50% of the assets are in the non-same store pool. So a couple of shops moving out can create some volatility. It's clear though; if you look at our lease rate, it's up year-over-year, and it's effectively unchanged quarter-over-quarter.
Speaker #2: It's Conor again, Ron. So on these leasing spreads—first, as I always caveat, I encourage folks to look at trailing 12 months, just given how small our pipeline for leasing activity is in the first quarter and the second quarter of this year. We would expect our new lease spreads to be right back in the low 20s, which was where they were for the full year.
Speaker #2: And I would say a similar comment on denominator is, and if we look at the renewals—look at TTM as opposed to just one quarter.
Speaker #2: For same property, similar response. Very small pool. We've got 50% of the assets in the non-same store pool, so a couple of shops moving out can create some volatility.
Speaker #2: It's clear that if you look at our lease rate, it's up year over year, and it's effectively unchanged quarter over quarter. So the fewer spaces we got back in the fourth quarter, we have already leased, and we expect to rent in 2026.
Conor Fennerty: So the fewer spaces we got back in the Q4, we have already leased, and we expect to rent commence in the Q2 and Q3 for 2026. The only other thing I would just say on 2026 Same Property NOI, it's a pretty wide range for all the reasons I just laid out of 2% to 4%. We do expect a pretty big acceleration over the course of the year because of the least occupied gap compressing. And again, that speaks to the fact that these are leases just signed over the last couple of months. It doesn't take a lot; it's a tighter timeline than a larger format center to get those leases rent paying, which speaks to the property type, which is one of the reasons we love it.
Conor Fennerty: So the fewer spaces we got back in the Q4, we have already leased, and we expect to rent commence in the Q2 and Q3 for 2026. The only other thing I would just say on 2026 Same Property NOI, it's a pretty wide range for all the reasons I just laid out of 2% to 4%. We do expect a pretty big acceleration over the course of the year because of the least occupied gap compressing. And again, that speaks to the fact that these are leases just signed over the last couple of months. It doesn't take a lot; it's a tighter timeline than a larger format center to get those leases rent paying, which speaks to the property type, which is one of the reasons we love it.
Speaker #2: The only other thing I would just say—a pretty wide range for all the reasons I just—on 2026 same property and why, it's laid out of 2 to 4 percent.
Speaker #2: We do expect a pretty big acceleration over the course of the year because of the leased-occupied gap compressing. And again, that speaks to the fact that these are leases just signed over the last—commenced in the second and third quarter—for a couple of months.
Speaker #2: A lot of it is a tighter—it doesn't take a longer timeline than a larger format center to get those leases rent-paying, which speaks to the property type, which is one of the reasons we love it.
Speaker #2: A lot of it is tighter. It doesn't take a longer timeline than a larger format center to get those leases rent-paying, which speaks to the property type, which is one of the reasons we love it.
Speaker #3: And bad debt, sorry.
Ronald Kamdem: And bad debt, sorry.
Ronald Kamdem: And bad debt, sorry.
Speaker #2: Oh, yeah, of course. Sorry. Bad debt, we've got about a 60-basis-point bogey for the midpoint of guidance for the year. To put that in contrast or compare it to 2025, we had about the same amount of bad debt in 2025 for the same property pool.
Conor Fennerty: Oh, yeah, of course, sorry. Bad debt, we've got about a 60 basis point bogey for the midpoint of guidance for the year. To put that in contrast or compare it to 2025, we had about 30 basis points of bad debt in 2025 to the same property pool. So we are expecting a normalization. We're not seeing anything that would cause us to expect year-over-year uptick, but it feels just a prudent base case for now, and we'll update that, obviously, over the course of the year.
Conor Fennerty: Oh, yeah, of course, sorry. Bad debt, we've got about a 60 basis point bogey for the midpoint of guidance for the year. To put that in contrast or compare it to 2025, we had about 30 basis points of bad debt in 2025 to the same property pool. So we are expecting a normalization. We're not seeing anything that would cause us to expect year-over-year uptick, but it feels just a prudent base case for now, and we'll update that, obviously, over the course of the year.
Speaker #2: So, we are expecting a normalization. We're not seeing anything that would cause us to expect a year-over-year uptick, but it feels just a prudent base case for now.
Speaker #2: And we'll update that, obviously, over the course of the year.
Speaker #3: Helpful.
Ronald Kamdem: Helpful. That's it for me. Thank you.
Ronald Kamdem: Helpful. That's it for me. Thank you.
Speaker #3: That's it for me. Thank you. Your next question comes from the line of
Speaker #2: You're
Conor Fennerty: You're welcome.
Conor Fennerty: You're welcome.
Operator: Your next question comes from the line of Floris Van Dijkum from Ladenburg Thalmann. Your line is open.
Operator: Your next question comes from the line of Floris Van Dijkum from Ladenburg Thalmann. Your line is open.
Speaker #3: Leidenberg Thalman. Your line is Floris Vandishcomb from—
Speaker #3: open.
Speaker #4: Hey, morning,
Floris van Dijkum: Hey, morning, guys. My question is maybe if you can talk a little bit about the operations. Your portfolio is big enough now where you've got some scale. Are you guys seeing any operating synergies by having multiple properties in single markets? I know you're big in Atlanta and Miami, for example. Maybe talk a little bit about how if there's any additional synergies that you can squeeze out of having more assets in single markets.
Floris van Dijkum: Hey, morning, guys. My question is maybe if you can talk a little bit about the operations. Your portfolio is big enough now where you've got some scale. Are you guys seeing any operating synergies by having multiple properties in single markets? I know you're big in Atlanta and Miami, for example. Maybe talk a little bit about how if there's any additional synergies that you can squeeze out of having more assets in single markets.
Speaker #4: Guys, my welcome. Question is, maybe if you can talk a little bit about the operations. Your portfolio is big enough now where you've got some scale.
Speaker #4: Are you guys seeing any operating synergies by having multiple—know you're big in Atlanta and Miami, for example. Maybe you could talk a little bit about if there's any additional synergies that you can squeeze out of having more assets in single markets.
Speaker #4: I
Speaker #2: Hey, good morning, Floris. Thanks for the question. I would say that the synergies—I would put them in two buckets. One is expense to run a property.
David Lukes: Hey, good morning, Floris. Thanks for the question. I would say that the synergies, I would put them in two buckets. One is G&A and the expense to run a property, and the second is the more you have in a certain market, the more it allows you to have a little bit of a tighter cam pool. In both of those cases, there is some truth that scaling in certain markets does give you a little bit of a tighter cam pool. But I will say that the recovery rate on this asset class is so high that it doesn't really flow through to same store NOI or total property performance as much. So I would say that the synergies are a nice-to-have, but they're not a must-to-have with how this property type operates.
David Lukes: Hey, good morning, Floris. Thanks for the question. I would say that the synergies, I would put them in two buckets. One is G&A and the expense to run a property, and the second is the more you have in a certain market, the more it allows you to have a little bit of a tighter cam pool. In both of those cases, there is some truth that scaling in certain markets does give you a little bit of a tighter cam pool. But I will say that the recovery rate on this asset class is so high that it doesn't really flow through to same store NOI or total property performance as much. So I would say that the synergies are a nice-to-have, but they're not a must-to-have with how this property type operates.
Speaker #2: And the second is, the more you have in a certain market, the more it allows you.
Speaker #2: …to have a little bit of a tighter CAM pool. In both of those cases, there is some truth that scaling in certain properties in single markets…
Speaker #2: Markets does give you a little bit of leverage on both of those costs. But I will say that the recovery rate on this asset class is so high that it doesn't really flow through to same-store NOI or total property performance as much.
Speaker #2: So I would say that the synergies are a nice-to-have.
Speaker #4: Yeah.
Conor Fennerty: Yeah, Floris, it feels like the synergies are much more corporate-focused in the sense that you're leveraging public company costs, and you're seeing that already as you look at just G&A as a percentage of GAV or G&A as a percentage of revenue.
Conor Fennerty: Yeah, Floris, it feels like the synergies are much more corporate-focused in the sense that you're leveraging public company costs, and you're seeing that already as you look at just G&A as a percentage of GAV or G&A as a percentage of revenue.
Speaker #4: Floris, it feels like the synergies are much more corporate-focused. Have— this property type operates G&A.
Speaker #4: Floris, it feels like the synergies are much more corporate-focused, given how this property type operates.
Speaker #4: In the sense that you're leveraging public company costs. And you're seeing that already as you look at just G&A as a percentage of GAV, or G&A as a percentage of—but they're not a must to have with how revenue.
Speaker #3: Thanks. Maybe my follow-up in terms of capital allocation—have you and the team considered going, I guess maybe there hasn't been a need to, but going into more value-add assets with higher vacancies?
Floris van Dijkum: Thanks. Maybe my follow-up in terms of capital allocation. Have you considered going, I guess maybe there hasn't been a need to, but going into more value-added assets with higher vacancies, or are you sticking to your knitting because, frankly, the market is telling you, "Go ahead and keep acquiring"?
Floris van Dijkum: Thanks. Maybe my follow-up in terms of capital allocation. Have you considered going, I guess maybe there hasn't been a need to, but going into more value-added assets with higher vacancies, or are you sticking to your knitting because, frankly, the market is telling you, "Go ahead and keep acquiring"?
Speaker #3: Or are you, frankly, the market is telling you, go ahead and keep acquiring? Sticking to your knitting because
Speaker #2: It's a great question, Floris. I'll probably back up by saying that it is interesting to see in the entire unanchored strip category that there are different strategies that are emerging.
David Lukes: It's a great question, Floris. I'll probably back up by saying that it is interesting to see in the entire unanchored strip category that there are different strategies that are emerging. Some folks focus on value-add, other folks focus on secondary markets. Some people like short lease, no credit. I think you see that in other property types like student housing as a part of multifamily. There's lots of examples you can point to. For us, if you think about where we are in the real estate cycle right now for retail, leasing demand is high, occupancy is high, and rents are growing. And so when we look at our strategy of scaling convenience, I think the three risks that we really don't want to take are execution risk, credit risk, and capital risk.
David Lukes: It's a great question, Floris. I'll probably back up by saying that it is interesting to see in the entire unanchored strip category that there are different strategies that are emerging. Some folks focus on value-add, other folks focus on secondary markets. Some people like short lease, no credit. I think you see that in other property types like student housing as a part of multifamily. There's lots of examples you can point to. For us, if you think about where we are in the real estate cycle right now for retail, leasing demand is high, occupancy is high, and rents are growing. And so when we look at our strategy of scaling convenience, I think the three risks that we really don't want to take are execution risk, credit risk, and capital risk.
Speaker #2: Some folks focus on value-add. Other folks focus on secondary markets. Some people like short wealth, no credit. I think you like student housing as a part of multifamily.
Speaker #2: There are lots of examples you can point to. For us, if you see that in other property types, the real estate cycle right now for retail—leasing demand is high.
Speaker #2: Occupancy is high, and rents are growing. And so, when we look at about where we are in our strategy of scaling convenience, I think the three risks that we really don't want to take are risk, credit risk, and capital risk.
Speaker #2: And if you add those three areas of execution together, it just tells you that the returns we can get on an unlevered IRR basis for buying high-quality real estate that's very well leased with high-credit tenants doesn't feel worth the risk to take in order to generate slightly higher IRRs.
David Lukes: If you add those three together, it just tells you that the returns we can get on an unlevered IRR basis for buying high-quality real estate that's very well leased with high-credit tenants. It doesn't feel worth the risk to take in order to generate slightly higher IRRs. So that strategy for us is allowing us to be very specific about which pieces of real estate we buy. And said differently, if you're buying high-quality real estate that's most likely to outperform in a recession, that's probably a strategy that I think investors would want to see us pursue.
David Lukes: If you add those three together, it just tells you that the returns we can get on an unlevered IRR basis for buying high-quality real estate that's very well leased with high-credit tenants. It doesn't feel worth the risk to take in order to generate slightly higher IRRs. So that strategy for us is allowing us to be very specific about which pieces of real estate we buy. And said differently, if you're buying high-quality real estate that's most likely to outperform in a recession, that's probably a strategy that I think investors would want to see us pursue.
Speaker #2: And so, that strategy for us is allowing us to be very specific about which pieces of real estate we buy, and said differently, if you're buying high-quality real estate, that's most likely to outperform in a recession.
Speaker #2: That's probably a strategy that I think investors would want to see us pursue.
Speaker #3: Thanks, David. Your next question comes from the line of Craig Mailman from Citigroup. Your line is open.
Conor Fennerty: Thanks, David.
Floris van Dijkum: Thanks, David.
Operator: Your next question comes from a line of Craig Mailman from Citigroup. Your line is open.
Operator: Your next question comes from a line of Craig Mailman from Citigroup. Your line is open.
Speaker #4: Hey, good morning, guys. I guess just the first one. On the $1.3 million lease term fees, could you just talk about that? And just in general, kind of how much we should think about lease term fees in a given year, just given you guys have kind of smaller spaces and good—
Craig Mailman: Hey, good morning, guys. I guess just the first one. On the $1.3 million of lease term fees, could you just talk about that and just in general kind of how much we should think about lease term fees in a given year, just given you guys have kind of smaller spaces and good credit at this point?
Craig Mailman: Hey, good morning, guys. I guess just the first one. On the $1.3 million of lease term fees, could you just talk about that and just in general kind of how much we should think about lease term fees in a given year, just given you guys have kind of smaller spaces and good credit at this point?
Speaker #4: Credit at this point? It's really hard.
David Lukes: It's really hard to hear you. Can you try that one more time?
David Lukes: It's really hard to hear you. Can you try that one more time?
Speaker #2: To hear you. Can you try that one more time?
Speaker #4: Oh, sorry. Can you hear
Craig Mailman: Oh, sorry. Can you hear me now?
Craig Mailman: Oh, sorry. Can you hear me now?
Speaker #5: It's marginally better. I think it was about term fees, Craig.
Conor Fennerty: Marginally better. I think it was about term fees, Craig. And stop me if you wouldn't mind just repeating the question, though.
Conor Fennerty: Marginally better. I think it was about term fees, Craig. And stop me if you wouldn't mind just repeating the question, though.
Speaker #5: And stop me if you wouldn't mind just repeating the question, though.
Speaker #4: Yeah. Just on term, can you tell me now—what drove the $1.3 million in the quarter? And how would you think about, kind of, your lease term fees on a recurring basis?
Craig Mailman: Yeah. Just on term fees, can you just tell us what drove the $1.3 million in the quarter and how would you think about kind of your lease term fees on a recurring basis? Just give us a little bit of a smaller portfolio and just in general, our sense that you guys have better credit. Was this driven by you guys, or was this a tenant-driven move?
Craig Mailman: Yeah. Just on term fees, can you just tell us what drove the $1.3 million in the quarter and how would you think about kind of your lease term fees on a recurring basis? Just give us a little bit of a smaller portfolio and just in general, our sense that you guys have better credit. Was this driven by you guys, or was this a tenant-driven move?
Speaker #4: Just give us a little bit of a smaller portfolio. And just, was this driven by you guys, or was this tenant-driven?
Speaker #4: move? Craig, OK.
Conor Fennerty: Craig, okay, I'll take a stab at it and just let me know if I'm answering the questions. So if you look at the last two years, we had just over $2 million in 2025 and just over $4 million in 2024. It does feel like, and again, if you look back in 2023 from our SEC filings pre-spinoff, that there have been some quarters where we've had chunky term fees. Some of those have been one tenant driving the entirety of the fee. Other times, they've been more fragmented. It does feel like it's a pretty, I don't want to say recurring part of the business because of how chunky they are, but we do expect there to be kind of a normal level of term fees over the course of any particular year. And I would expect that number to grow as the portfolio grows.
Conor Fennerty: Craig, okay, I'll take a stab at it and just let me know if I'm answering the questions. So if you look at the last two years, we had just over $2 million in 2025 and just over $4 million in 2024. It does feel like, and again, if you look back in 2023 from our SEC filings pre-spinoff, that there have been some quarters where we've had chunky term fees. Some of those have been one tenant driving the entirety of the fee. Other times, they've been more fragmented. It does feel like it's a pretty, I don't want to say recurring part of the business because of how chunky they are, but we do expect there to be kind of a normal level of term fees over the course of any particular year. And I would expect that number to grow as the portfolio grows.
Speaker #5: I'll take a stab at it, and just let me know if I'm answering the questions. So, if you look at the last two years, we had just over $2 million in 2025 and just over $4 million in 2024.
Speaker #5: I feel like, and again, if you look back in—it does—in 2023 from our SEC filings pre-spin-off, that there have been some quarters where we've had chunky term fees.
Speaker #5: One tenant—some of those have been driving the entirety of the fee. Other times, they've been more fragmented. It does feel like it's a pretty—I don't want to say recurring part of the business, because of how chunky they are.
Speaker #5: But it does. We do expect there to be kind of a normal level of term fees over the course of any particular year, and I would expect that number to grow as the portfolio grows.
Speaker #5: To what's driving those? It could be a function of a number of different things. One, a tenant just deciding a space or a market doesn't work for them.
Conor Fennerty: To what's driving those, it could be a function of a number of different things. One, a tenant just deciding a space or a market doesn't work for them. Others where they go dark and paying, and we come to an agreement. The best thing about it, though, is to David's point, just given the economics of our business, more often than not, we wouldn't consider a term fee until it pays for the CapEx, the downtime. And more often than not, we're actually making money when we get those spaces back. And then the only thing I'd add is, unlike a larger format or purpose of building where we've got to tear that down or spend a year repurposing that space, we generally can get a tenant back in between 3 and 9 months. So for us, we think of it as almost like gravy.
Conor Fennerty: To what's driving those, it could be a function of a number of different things. One, a tenant just deciding a space or a market doesn't work for them. Others where they go dark and paying, and we come to an agreement. The best thing about it, though, is to David's point, just given the economics of our business, more often than not, we wouldn't consider a term fee until it pays for the CapEx, the downtime. And more often than not, we're actually making money when we get those spaces back. And then the only thing I'd add is, unlike a larger format or purpose of building where we've got to tear that down or spend a year repurposing that space, we generally can get a tenant back in between 3 and 9 months. So for us, we think of it as almost like gravy.
Speaker #5: Others, where they go dark in paying, and we come to an agreement. The best thing about it, though, is to David's point—just given the economics of our business—more often than not, we wouldn't consider a term fee until it pays for the CapEx, the downtime, and most—more often than not—we're actually making money when we get those spaces back.
Speaker #5: And then the only thing I'd add is, unlike a larger format or purpose of building where we've got to tear that down or spend a year repurposing that space, we generally can get a tenant back in between three and nine months.
Speaker #5: So for us, we think of it as almost like gravy. But again, there's generally just a pretty wide range of reasons that drive them.
Conor Fennerty: But again, there's generally just a pretty wide range of reasons that drive them. It doesn't feel like it's one specific reason or one specific tenant that drives the vote. And let me know if I answered your question, though. Just again, just challenging to hear you.
Conor Fennerty: But again, there's generally just a pretty wide range of reasons that drive them. It doesn't feel like it's one specific reason or one specific tenant that drives the vote. And let me know if I answered your question, though. Just again, just challenging to hear you.
Speaker #5: It doesn't feel like it's one specific reason or one specific tenant that drives the vote. And let me know if I answered your question, though.
Speaker #5: Just again, there's some challenge in hearing.
Speaker #5: you. Yeah.
Craig Mailman: Yeah, that'll help. Is this better? I switched microphones.
Craig Mailman: Yeah, that'll help. Is this better? I switched microphones.
Speaker #4: No, that's helpful. Is this better? I switched microphones.
Conor Fennerty: Yes.
Conor Fennerty: Yes.
Speaker #4: OK, perfect. Sorry about that. Yes, but you did answer my question. I guess on the second question, just on sources of capital, you guys are sitting on a good amount of cushion here.
Craig Mailman: Okay, perfect. Sorry about that. But you did answer my question. I guess on the second question, just on kind of sources of capital, you guys are sitting on a good amount of cushion here. And net debt to EBITDA, even without the forward, is around 1x. Could you just talk about going forward the thought process on incremental equity issuance versus kind of building out your ladder, becoming a more seasoned issuer, or potentially setting yourself up to become a more seasoned issuer to lower your cost of debt here? And just the decision to use the forward, I guess, versus spot, not to, it's always good in hindsight, but the stock is close to 8-9% higher than where you guys issued the forward earlier this quarter. So just talk in general on that.
Craig Mailman: Okay, perfect. Sorry about that. But you did answer my question. I guess on the second question, just on kind of sources of capital, you guys are sitting on a good amount of cushion here. And net debt to EBITDA, even without the forward, is around 1x. Could you just talk about going forward the thought process on incremental equity issuance versus kind of building out your ladder, becoming a more seasoned issuer, or potentially setting yourself up to become a more seasoned issuer to lower your cost of debt here? And just the decision to use the forward, I guess, versus spot, not to, it's always good in hindsight, but the stock is close to 8-9% higher than where you guys issued the forward earlier this quarter. So just talk in general on that.
Speaker #4: And net debt to EBITDA, even without the forward, is around one times. Could you just talk about, going forward, the thought process on incremental equity issuance versus kind of building out your ladder, becoming a more seasoned issuer, or potentially setting yourself up to become a more seasoned issuer to lower your cost of debt here?
Speaker #4: And just the decision to use the forward, I guess, versus spot—not to say it's always good in hindsight—but the stock is close to 8% or 9% higher than where you guys issued the forward earlier this quarter.
Speaker #4: So just talk in general on that. I know you guys are issuing at least above Miami V, so it's hard to complain. But it feels like, speculating on the stock here, you left a little bit on the table.
Craig Mailman: I know you guys are issuing at least above my NEV, so it's hard to complain, but it feels like speculating on the stock here. You left a little bit on the table.
Craig Mailman: I know you guys are issuing at least above my NEV, so it's hard to complain, but it feels like speculating on the stock here. You left a little bit on the table.
Speaker #5: Sure, Craig. A lot there to unpack. So, I would just say, starting with liquidity on hand, we have about $580 million of cash and unsettled equity versus our target of $700 million investment.
Conor Fennerty: Sure, Craig. A lot there to unpack. So I would just say starting with liquidity on hand. We have about $580 million of cash and unsettled equity versus our target of $700 million investment. So to my comments from the transcript or from the opening remarks, excuse me, we only have about a $100 million funding gap for the remainder of the year, which is pretty insignificant when you think about the enterprise value and the fact that we've got an undrawn line of credit behind that. So the question is, how do we think about sources and uses to kind of fill that gap? To your point, we now are a seasoned private placement issuer. We've got access to the bank market. We have a 0% secured debt ratio, and we now have access on the ATM.
Conor Fennerty: Sure, Craig. A lot there to unpack. So I would just say starting with liquidity on hand. We have about $580 million of cash and unsettled equity versus our target of $700 million investment. So to my comments from the transcript or from the opening remarks, excuse me, we only have about a $100 million funding gap for the remainder of the year, which is pretty insignificant when you think about the enterprise value and the fact that we've got an undrawn line of credit behind that. So the question is, how do we think about sources and uses to kind of fill that gap? To your point, we now are a seasoned private placement issuer. We've got access to the bank market. We have a 0% secured debt ratio, and we now have access on the ATM.
Speaker #5: So to my remarks—excuse me—we only have comments from the transcript or from the opening about a $100 million funding gap for the remainder of the year, which is pretty insignificant.
Speaker #5: We think about the enterprise value and the fact that we've got an undrawn line of that. So the question is, how do we think about sources and uses to kind of fill that gap?
Speaker #5: To your point, we now are a seasoned private placement issuer. We've got access to the bank market. We have a 0% secured debt ratio.
Speaker #5: And we now have access on the ATM. It's a pretty wide range, or a pretty broad menu. We now have options as we think through.
Conor Fennerty: It's a pretty wide range or a pretty broad menu we now have of options as we think through. And I would just tell you, the way we think about it is consistent with the way we thought about at SITE Centers and the way we thought about it last year plus, where if equity at one point in time was accretive to the business plan, we would consider it. But we also like, to your point, to start to build up a market and build up a nice ladder on the Private Placement market, which we're already seeing compression and spreads as we continue to tap that market. So I would just tell you, it's a really wide range of menus of options, which is a fantastic spot to be. And over the course of the year, we'll decide what's the best path.
Conor Fennerty: It's a pretty wide range or a pretty broad menu we now have of options as we think through. And I would just tell you, the way we think about it is consistent with the way we thought about at SITE Centers and the way we thought about it last year plus, where if equity at one point in time was accretive to the business plan, we would consider it. But we also like, to your point, to start to build up a market and build up a nice ladder on the Private Placement market, which we're already seeing compression and spreads as we continue to tap that market. So I would just tell you, it's a really wide range of menus of options, which is a fantastic spot to be. And over the course of the year, we'll decide what's the best path.
Speaker #5: And I would just tell you, the way we think about it is consistent with the way we thought about it at Site Centers and the way we thought about it the last year plus, where if equity at one point in time was accretive to the business plan, we would consider it.
Speaker #5: But we also like, to your point, to start to build up a market and build up a nice ladder on the private placement market, which we're already seeing a compression in spreads as we continue to tap that market.
Speaker #5: So I would just tell you, it's a really wide range of menus of options, which is a fantastic spot to be. And over the course of the year, we'll decide what's the best path.
Speaker #5: But we just have, I would just say, dramatic optionality, just given where we are from a leverage perspective, which is—
Conor Fennerty: But we just have, I would just say, dramatic optionality, just given where we are from a leverage perspective, which is fantastic.
Conor Fennerty: But we just have, I would just say, dramatic optionality, just given where we are from a leverage perspective, which is fantastic.
Speaker #5: fantastic.
Speaker #5: fantastic. You're welcome. Thanks,
Speaker #4: Great. Thank
Craig Mailman: Great. Thank you.
Craig Mailman: Great. Thank you.
Speaker #4: You. Line of Todd Thomas from.
Conor Fennerty: You're welcome.
Conor Fennerty: You're welcome.
David Lukes: Thanks, Craig.
David Lukes: Thanks, Craig.
Speaker #2: Craig.
Speaker #1: Your next question comes from a—
Operator: Your next question comes from a line of Todd Thomas from KeyBanc Capital Markets. Your line is open.
Operator: Your next question comes from a line of Todd Thomas from KeyBanc Capital Markets. Your line is open.
Speaker #1: KeyBank Capital Markets, your line is open.
Ronald Kamdem: Hi, thanks. Good morning. I wanted to go back to acquisitions and some of the comments that you made about having visibility on around half of the $700 million factored into guidance. Are these all single-off deals, or are you seeing any portfolios included in the pipeline? And then is there a limit on the amount of volume that you can do in any given year? Are there any constraints either around your appetite or the amount that you might be able to achieve in terms of acquisitions?
Todd Thomas: Hi, thanks. Good morning. I wanted to go back to acquisitions and some of the comments that you made about having visibility on around half of the $700 million factored into guidance. Are these all single-off deals, or are you seeing any portfolios included in the pipeline? And then is there a limit on the amount of volume that you can do in any given year? Are there any constraints either around your appetite or the amount that you might be able to achieve in terms of acquisitions?
Speaker #6: Thanks. Good morning. I wanted to go back to the point you made about having visibility on around half of the $700 million—factored these all into guidance.
Speaker #6: Single-off deals? Or are you seeing any portfolios included in the pipeline? And then, is there a limit on the amount of volume that you can do in acquisitions in any given year, or any constraints on that?
Speaker #6: Single-off deals? Or are you seeing any portfolios included in the pipeline? And then, is there a limit on the amount of volume that you can do in acquisitions and some of the comments that you made in any given year?
Speaker #6: Either around your appetite or the amount that you might be—are there any—able to achieve in terms of acquisitions?
Speaker #2: Good morning, Todd, it's David. I would say that the first part of your question is that, to date, our pipeline is almost exclusively—actually, it is exclusively—single time, baseline.
David Lukes: Good morning, Todd, it's David. I would say that the first part of your question is that to date, our pipeline is almost exclusively, actually, it is exclusively single asset acquisitions. So I would say this is the one-at-a-time baseline. And I think, as you know, when we went public, we did have a question mark as to how much of our deal flow was going to be portfolios versus individual assets. I think what we found is the more of our G&A that we've allocated towards the transaction side of the business and the more people we've been able to move into the field and build relationships, the more deal flow has come to us. And I would say every quarter that goes by, we're starting to see more inventory that fits our criteria as opposed to simply sifting through all of the inventory that's on the market.
David Lukes: Good morning, Todd, it's David. I would say that the first part of your question is that to date, our pipeline is almost exclusively, actually, it is exclusively single asset acquisitions. So I would say this is the one-at-a-time baseline. And I think, as you know, when we went public, we did have a question mark as to how much of our deal flow was going to be portfolios versus individual assets. I think what we found is the more of our G&A that we've allocated towards the transaction side of the business and the more people we've been able to move into the field and build relationships, the more deal flow has come to us. And I would say every quarter that goes by, we're starting to see more inventory that fits our criteria as opposed to simply sifting through all of the inventory that's on the market.
Speaker #2: And I think, as you know, when we went public, we did have a question mark as to how much of our asset acquisitions—so I would say this is the one—at a deal flow was going to be portfolios versus individual assets.
Speaker #2: I think what we found is, the more of our G&A that we've allocated towards the transaction side of the business, and the more people we've been able to move into the field and build relationships, the more deal flow has come to us.
Speaker #2: And I would say every quarter that goes by, we're starting to see more inventory that fits our sifting through all of the inventory that's on the criteria as opposed to simply market.
Speaker #2: It is a very, very large asset class. And the addressable market for us, even if you look at the top quartile, is still a significant amount of deal volume.
David Lukes: It is a very, very large asset class. The addressable market for us, even if you look at the top quartile, is still a significant amount of deal volume. So I would say our confidence that we can achieve a baseline of our budget simply doing one-off deals is pretty high. If portfolios do come up, I think it's great. I would say that so far, portfolios have been episodic as opposed to kind of a normal quarterly run rate. Given the fact that there's so much inventory on the one-offs that fit all of our filters in terms of quality, I think we're less aggressive with having to stretch for portfolios that might have assets in them that we don't want. So I think that probably answers your question.
David Lukes: It is a very, very large asset class. The addressable market for us, even if you look at the top quartile, is still a significant amount of deal volume. So I would say our confidence that we can achieve a baseline of our budget simply doing one-off deals is pretty high. If portfolios do come up, I think it's great. I would say that so far, portfolios have been episodic as opposed to kind of a normal quarterly run rate. Given the fact that there's so much inventory on the one-offs that fit all of our filters in terms of quality, I think we're less aggressive with having to stretch for portfolios that might have assets in them that we don't want. So I think that probably answers your question.
Speaker #2: So I would say our confidence that we can achieve a baseline of our budget simply doing one-off deals is pretty, come up—I think it's great.
Speaker #2: If portfolios do, I would say that so far, portfolios have been episodic as opposed to kind of a normal quarterly run rate. And given the fact that there's so much inventory on the one-offs that fit all of our filters in terms of quality, I think we're less aggressive with having to stretch for portfolios that might have assets in them that we don't want.
Speaker #2: So I think that probably answers your question. But our confidence is really high that the individual brokerage community and the sellers are starting to approach us with deals that we really find attractive.
David Lukes: But our confidence is really high that the individual brokerage community and the sellers are starting to approach us with deals that we really find attractive.
David Lukes: But our confidence is really high that the individual brokerage community and the sellers are starting to approach us with deals that we really find attractive.
Speaker #1: OK, that's helpful. And then I wanted to just ask—it looked like there was perhaps a disposition in the quarter, perhaps something small. Just curious if you can discuss that.
Ronald Kamdem: Okay. That's helpful. Then I wanted to just ask, it looked like there was perhaps a disposition in the quarter, perhaps something small. Just curious if you can discuss that. It seems like there would not be really much in the way of dispositions, just given your sort of designing and constructing the portfolio from scratch in some sense, but any sort of dispositions or kind of asset management sort of associated activity that you're sort of anticipating in 2026?
Todd Thomas: Okay. That's helpful. Then I wanted to just ask, it looked like there was perhaps a disposition in the quarter, perhaps something small. Just curious if you can discuss that. It seems like there would not be really much in the way of dispositions, just given your sort of designing and constructing the portfolio from scratch in some sense, but any sort of dispositions or kind of asset management sort of associated activity that you're sort of anticipating in 2026?
Speaker #1: And it seems like there would not be really much in the way of dispositions, just given you're sort of designing and constructing the portfolio from scratch, in some sense.
Speaker #1: But any sort of management, sort of associated activity, that you're sort of anticipating in '26?
Speaker #2: Yeah, Todd, it's David again. As we've said prior, one of the benefits of building a portfolio one at a time is that you don't really have the need to
David Lukes: Yeah, Todd, it's David again. As we've said prior, one of the benefits of building a portfolio one at a time is that you don't really have the need to recycle. We don't have in our budget any dispositions planned. Our business plan is not about recycling. We're purely based on buying things that we want to own over the long term. Every now and then, from an asset management perspective, something might come up where it simply is better to sell it. In particular, the asset this last quarter, which was very small, happened to be adjacent to a property that SITE Centers owned. They offered us a price to buy that asset that we thought was attractive because the cost to change out a tenant and do some work on it was such that we felt it was better to exit and sell to SITE Centers.
David Lukes: Yeah, Todd, it's David again. As we've said prior, one of the benefits of building a portfolio one at a time is that you don't really have the need to recycle. We don't have in our budget any dispositions planned. Our business plan is not about recycling. We're purely based on buying things that we want to own over the long term. Every now and then, from an asset management perspective, something might come up where it simply is better to sell it. In particular, the asset this last quarter, which was very small, happened to be adjacent to a property that SITE Centers owned. They offered us a price to buy that asset that we thought was attractive because the cost to change out a tenant and do some work on it was such that we felt it was better to exit and sell to SITE Centers.
Speaker #2: Recycle. We don't have in our budget any dispositions planned. Our business plan is not about recycling. We're purely based on buying things that we want to own over dispositions or kind of asset the long term.
Speaker #2: Every now and then, from an asset management perspective, something might come up where it simply is better to sell it. In particular, the asset this last quarter, which was very small, happened to be adjacent to a property that Site Centers owned.
Speaker #2: They offered us a price to buy that asset that we thought was attractive, because the cost to change out a tenant and do some work on it was such that we felt it was better to exit and sell to Site Centers.
Speaker #2: Site centers, on the other hand, felt like they got more liquidity from owning an adjacent parcel with a property that they're trying to sell.
David Lukes: SITE Centers, on the other hand, felt like they got more liquidity from owning an adjacent parcel with a property that they're trying to sell. Again, it was quite small. It went to both boards for approval, which were separate boards, as you know. But I don't expect this to be a recurring issue.
David Lukes: SITE Centers, on the other hand, felt like they got more liquidity from owning an adjacent parcel with a property that they're trying to sell. Again, it was quite small. It went to both boards for approval, which were separate boards, as you know. But I don't expect this to be a recurring issue.
Speaker #2: Again, it was quite small. It went to both boards for approval, which were separate boards, as you know. But I don't expect this to be a recurring issue.
Speaker #5: Todd, just expand on that. It was a vacant piece of land. So, to David's point, it was sub-$2 million. And there's nothing in the 2026 budget for further dispositions.
Conor Fennerty: Todd, just to expand on that, it was a vacant piece of land. So to David's point, it was sub-$2 million. And there's nothing in the 2026 budget for further dispositions.
Conor Fennerty: Todd, just to expand on that, it was a vacant piece of land. So to David's point, it was sub-$2 million. And there's nothing in the 2026 budget for further dispositions.
Speaker #1: OK. Great. Thank you.
Ronald Kamdem: Okay. Great. Thank you.
Todd Thomas: Okay. Great. Thank you.
David Lukes: Thanks, Todd.
David Lukes: Thanks, Todd.
Speaker #2: Todd.
Speaker #1: Your next
Operator: Your next question comes from a line of Hong Zhang from J.P. Morgan. Your line is open.
Operator: Your next question comes from a line of Hong Zhang from J.P. Morgan. Your line is open.
Speaker #1: The next question comes from the line of Hong Zheng from JP Morgan. Thanks. Your line is open.
Speaker #6: Yeah, hey. I guess I was wondering if you could talk a little bit about your expectations for the cadence of lease commencements this year.
Michael Mueller: Yeah, hey. I guess I was wondering if you could talk a little bit about your expectations for the cadence of lease commencements this year?
Hong Zhang: Yeah, hey. I guess I was wondering if you could talk a little bit about your expectations for the cadence of lease commencements this year?
Speaker #2: Sure, Hong. Framework of the same property in a while, because I guess I would respond by kind of giving you the—expect an acceleration in the—should go hand in hand.
Conor Fennerty: Sure, Hong. I guess I would respond by kind of giving you the framework of Same Property NOI, why, because they should go hand in hand. We do expect an acceleration in Q1 from Q4 on Same Property NOI, and then a modest deceleration in Q2, which is a comp on uncollectible revenue and just on some CapEx recovery items. Then, to my response, I think it was to Floris earlier, we do expect a pretty big pickup in the back half of the year from commencements of a space that's recaptured in Q4. So I would expect that gap to compress, Same Property NOI to accelerate in Q3 and Q4.
Conor Fennerty: Sure, Hong. I guess I would respond by kind of giving you the framework of Same Property NOI, why, because they should go hand in hand. We do expect an acceleration in Q1 from Q4 on Same Property NOI, and then a modest deceleration in Q2, which is a comp on uncollectible revenue and just on some CapEx recovery items. Then, to my response, I think it was to Floris earlier, we do expect a pretty big pickup in the back half of the year from commencements of a space that's recaptured in Q4. So I would expect that gap to compress, Same Property NOI to accelerate in Q3 and Q4.
Speaker #2: First quarter from the fourth quarter on same property. And then a modest deceleration in the second quarter, which is a comp on—we do uncollected revenue and just on some CapEx recovery items.
Speaker #2: And then to my response, I think it was to floors earlier, we do expect a pretty big pickup in the back half of the year from expect that gap to compress in the same property commencements of spaces recaptured in the fourth to accelerate in the third and the fourth
Speaker #2: So I would
Speaker #6: Got it. Thank you.
Michael Mueller: Got it. Thank you.
Hong Zhang: Got it. Thank you.
Speaker #2: You're welcome.
Conor Fennerty: You're welcome.
Conor Fennerty: You're welcome.
Speaker #1: Your next question comes from a line of Alexander Goldfart from Piper Sandler. Your line is:
Operator: Your next question comes from a line of Alexander Goldfarb from Piper Sandler. Your line is open.
Operator: Your next question comes from a line of Alexander Goldfarb from Piper Sandler. Your line is open.
Speaker #1: open. Hey, good
Alexander Goldfarb: Hey, good morning. So just following up on the capital questions, David, you've been speaking for some time about the growth profile, the double-digit growth profile over a number of years. Your acquisition pace has been tremendous. And as Conor pointed out, there's no slowdown in deal flow. Does your trajectory, as you think about debt normalization, has that accelerated, meaning that instead, previously, if you thought maybe you had five years of runway before you get to debt normalization, maybe that's sooner, in which case that double-digit growth profile that you guys outlined may actually truncate? Or the way you see it, you still are fine for the next, I think you talked about five years, where you can grow sort of in this double-digit way without capital events slowing that down?
Alexander Goldfarb: Hey, good morning. So just following up on the capital questions, David, you've been speaking for some time about the growth profile, the double-digit growth profile over a number of years. Your acquisition pace has been tremendous. And as Conor pointed out, there's no slowdown in deal flow. Does your trajectory, as you think about debt normalization, has that accelerated, meaning that instead, previously, if you thought maybe you had five years of runway before you get to debt normalization, maybe that's sooner, in which case that double-digit growth profile that you guys outlined may actually truncate? Or the way you see it, you still are fine for the next, I think you talked about five years, where you can grow sort of in this double-digit way without capital events slowing that down?
Speaker #7: Good morning. So just following up on—
Speaker #7: The capital questions—David, you've been speaking for some time about the growth profile, the quarter.
Speaker #7: double-digit growth profile over a number of years. Your acquisition pace has been tremendous. And as Connor pointed out, there's no slowdown in deal flow.
Speaker #7: Does your trajectory, as you think about debt normalization has that accelerated, meaning that instead previously, if you thought thinking maybe you had five years of runway before you get to debt normalization, maybe that sooner in which case that double-digit growth profile that you guys outlined may actually truncate?
Speaker #7: Or the way you see it, you still are fine for the next, I think you talked about five.
Speaker #7: grow sort of in this quarter. double-digit way without years, where you can capital events slowing that
Speaker #7: down? Good morning, Alex.
David Lukes: Good morning, Alex. It's David. I can turn it over to Conor for the long-term business plan. But I think the short story is accurate in that when we went public, we had a five-year business plan, and we had a $500 million a year guidance for what we thought we could do in the first year. And we obviously exceeded that last year. And I think our budget for this year is certainly higher as well. So I think by definition, that five-year business plan has compressed. On the other hand, I feel like the addressable market has also revealed itself to be surprisingly strong. And I think our reliance on portfolio deals has certainly gone down in our own minds. So the confidence that that cadence will continue is equally as high. But there's no question that the business plan has been pulled forward a little bit.
David Lukes: Good morning, Alex. It's David. I can turn it over to Conor for the long-term business plan. But I think the short story is accurate in that when we went public, we had a five-year business plan, and we had a $500 million a year guidance for what we thought we could do in the first year. And we obviously exceeded that last year. And I think our budget for this year is certainly higher as well. So I think by definition, that five-year business plan has compressed. On the other hand, I feel like the addressable market has also revealed itself to be surprisingly strong. And I think our reliance on portfolio deals has certainly gone down in our own minds. So the confidence that that cadence will continue is equally as high. But there's no question that the business plan has been pulled forward a little bit.
Speaker #2: It's David. I can turn it over to Conor for the long-term business plan. But I think the short story is accurate in that when we went public, we had a five-year business plan.
Speaker #2: And $500 million a year guidance for what we thought we had last year. And I think our budget for this year is certainly higher as well.
Speaker #2: So I think, by definition, that five-year business plan has compressed. On the other hand, I feel like the addressable market has also revealed itself to be surprisingly strong.
Speaker #2: And I think our reliance on portfolio deals has certainly gone down in our own minds. So the confidence that that cadence will continue is equally as high.
Speaker #2: But there's no question that the business plan has been
Speaker #2: pulled forward a little bit.
Speaker #5: Yeah, Alex, just
Conor Fennerty: Yeah, Alex, just expanding on that, I would say the two other significant variances would be one, we've outperformed dramatically on operations versus our initial expectations. That obviously has driven a higher level of EBITDA, more retained cash flow, which extends the timeline. To David's point, we've bought more quickly, which compresses it. And then the second thing is we've already issued some equity. And just given how small our denominator is, that equity issuance expands the pipeline. So whether the five-year business plan is now four and a half or four and a quarter, I'm not sure. But there are other factors that have limited our near-term needs for equity. And again, we just have so much optionality with the balance sheet that runway is still pretty long today.
Conor Fennerty: Yeah, Alex, just expanding on that, I would say the two other significant variances would be one, we've outperformed dramatically on operations versus our initial expectations. That obviously has driven a higher level of EBITDA, more retained cash flow, which extends the timeline. To David's point, we've bought more quickly, which compresses it. And then the second thing is we've already issued some equity. And just given how small our denominator is, that equity issuance expands the pipeline. So whether the five-year business plan is now four and a half or four and a quarter, I'm not sure. But there are other factors that have limited our near-term needs for equity. And again, we just have so much optionality with the balance sheet that runway is still pretty long today.
Speaker #5: Expanding on that, I would say the two other significant variances would be, one, we've outperformed dramatically on operations versus our initial expectations. That obviously has driven a higher level of EBITDA, more retained cash flow, which extends the timeline.
Speaker #5: To David's point, we've bought more quickly, which compresses it. And then the second thing is we've already issued some equity. And just given how small our denominator is, that equity issuance expands the pipeline.
Speaker #5: So, whether the five-year business plan is now 4 and 1/2 or 4 and 1/4, I'm not sure. But there are other factors that have limited our near-term needs for equity.
Speaker #5: And again, we just have so much optionality with the balance sheet that runway is still pretty long today.
Speaker #1: OK. And then the second question is, Conor, it seems like Site could well end up coming to an end, I guess, this year.
Alexander Goldfarb: Okay. Then the second question is, Conor, it seems like SITE could well end up coming to an end, I guess, this year. That's our map. I don't want to put words in their company's face or name. But your 2026 guidance, does that contemplate sort of a complete wind-down, separation, payment, settlement, whatever, resolution from SITE? Or if something happens there, there would be some update to your guidance?
Alexander Goldfarb: Okay. Then the second question is, Conor, it seems like SITE could well end up coming to an end, I guess, this year. That's our map. I don't want to put words in their company's face or name. But your 2026 guidance, does that contemplate sort of a complete wind-down, separation, payment, settlement, whatever, resolution from SITE? Or if something happens there, there would be some update to your guidance?
Speaker #1: Just that's our map. I don't want to put words in their companies' face. Or name. But your '26
Speaker #1: Guidance—does that contemplate sort of a complete wind-down, separation payment, settlement, whatever, resolution from site? Or if something happens there, there would be some update to your guidance?
Speaker #5: Yeah, that's a good question, Alex. So, we have assumed the status quo in guidance, with no changes to the shared service agreement in 2026.
Conor Fennerty: Yes, it's a good question, Alex. So we have assumed the status quo in guidance with no changes to the shared service agreement in 2026. As you know, though, if it's terminated by SITE on the two-year anniversary, which would be 1 October 2026, there would be a pretty significant fee paid by SITE to Curbline, which would more than offset, in our view, any expenses associated with the transition. So it would be a good thing of sorts if it did occur in 2026. Given that, to your point, it's a decision by the independent board of SITE and Curbline to terminate it. We didn't feel it was appropriate to put in our budget. But it would be a good thing in any scenario.
Conor Fennerty: Yes, it's a good question, Alex. So we have assumed the status quo in guidance with no changes to the shared service agreement in 2026. As you know, though, if it's terminated by SITE on the two-year anniversary, which would be 1 October 2026, there would be a pretty significant fee paid by SITE to Curbline, which would more than offset, in our view, any expenses associated with the transition. So it would be a good thing of sorts if it did occur in 2026. Given that, to your point, it's a decision by the independent board of SITE and Curbline to terminate it. We didn't feel it was appropriate to put in our budget. But it would be a good thing in any scenario.
Speaker #5: As you know, though, if it's terminated by site on the two-year anniversary, which would be—could do in the first year—October 1, 2026, there would be a pretty
Speaker #5: Significant fee paid by site to Curb, which would more than—And we obviously exceeded transition. So it would be a good guy of sorts if it did occur in 2026.
Speaker #5: Given that, to your point, it's a decision by the independent board of site. And curb to terminate it, we didn't feel it was appropriate to put in our budget.
Speaker #5: scenario. But it would be a good guy in any.
Speaker #7: OK. And just—if I could just—
Alexander Goldfarb: Okay. If I could just follow up that, I know you're not giving 2027 guidance. But as we think about our 2027, is there something that you would tell us to think about as we model 2027? Or you would just say, "Hey, leave everything status quo right now, and we'll deal with that a year from now on the February call"?
Alexander Goldfarb: Okay. If I could just follow up that, I know you're not giving 2027 guidance. But as we think about our 2027, is there something that you would tell us to think about as we model 2027? Or you would just say, "Hey, leave everything status quo right now, and we'll deal with that a year from now on the February call"?
Speaker #7: Follow up to that, I know you're not giving 2027 guidance. But as we think about our 2027, is there something that you would tell us to think about as we model 2027?
Speaker #7: Or you would just say, hey, leave everything status quo right now and we'll deal
Speaker #7: call?
Speaker #2: It would be the latter, in my opinion.
Conor Fennerty: It would be the latter, in my opinion.
Conor Fennerty: It would be the latter, in my opinion.
Speaker #2: opinion.
Speaker #7: OK. Thank
Alexander Goldfarb: Okay. Thank you.
Alexander Goldfarb: Okay. Thank you.
Speaker #7: you.
Speaker #2: You're welcome. Thanks,
Conor Fennerty: You're welcome.
Conor Fennerty: You're welcome.
David Lukes: Thanks, Alex.
David Lukes: Thanks, Alex.
Speaker #2: Alex.
Speaker #1: Your next question comes
Operator: Your next question comes from a line of Floris Van Dijkum from Ladenburg Thalmann. Your line is open.
Operator: Your next question comes from a line of Floris Van Dijkum from Ladenburg Thalmann. Your line is open.
Speaker #1: From Leidenburg, Thallman. Your line is open.
Speaker #8: Hey, guys. It's a quick follow-up offset in our view any expenses associated with the question that if you don't mind. I was just the site prompted something about your G&A.
Floris van Dijkum: Hey, guys. Just a quick follow-up question, if you don't mind. I was just, the slide prompted something about your G&A. And maybe if you can talk a little bit about what you think your G&A is going to be on a going forward basis once the agreement is settled down and what needs to happen internally to make sure you're properly aligned.
Floris van Dijkum: Hey, guys. Just a quick follow-up question, if you don't mind. I was just, the slide prompted something about your G&A. And maybe if you can talk a little bit about what you think your G&A is going to be on a going forward basis once the agreement is settled down and what needs to happen internally to make sure you're properly aligned.
Speaker #8: And maybe if you can talk a little bit about what you think your G&A is going to be on a
Speaker #8: going-forward basis once the from a line of Floris Vandishkum agreement is settled down. And what needs to happen internally to make sure your properly aligned?
Speaker #2: Sure, Floris. It's Conor. So, we mentioned prior to the spin-off that we felt that Curb could be as, if not more, efficient than Site as it relates to G&A as a percentage of GOV, which is how we look at expenses.
Conor Fennerty: Sure, Floris. It's Conor. So we mentioned prior to the spinoff that we felt that Curb could be as, if not more, efficient than site as it relates to G&A as percentage GAV, which is how we look at expenses. That was about 1.1% or 1% of GAV. To Alex's question from a moment ago, what are some factors or things that have changed? And I would just tell you, one, it was operational performance. Two, we realized we could run this business more efficiently. And so, as I mentioned in my prepared remarks, we're paying about $1 million per quarter to site. Effectively, what we've said to folks is that fee would essentially be replaced by the cost that would come over from site once that agreement is terminated. So it's a long, inelegant way of saying we feel like we've got great visibility.
Conor Fennerty: Sure, Floris. It's Conor. So we mentioned prior to the spinoff that we felt that Curb could be as, if not more, efficient than site as it relates to G&A as percentage GAV, which is how we look at expenses. That was about 1.1% or 1% of GAV. To Alex's question from a moment ago, what are some factors or things that have changed? And I would just tell you, one, it was operational performance. Two, we realized we could run this business more efficiently. And so, as I mentioned in my prepared remarks, we're paying about $1 million per quarter to site. Effectively, what we've said to folks is that fee would essentially be replaced by the cost that would come over from site once that agreement is terminated. So it's a long, inelegant way of saying we feel like we've got great visibility.
Speaker #2: That was about 1.1%. To Alex's question from a moment ago, what are some factors or things that have changed? And I would just tell you, one is operational performance.
Speaker #2: One percent of GOV. Effectively, what we've said to folks is that fee was essentially to be replaced by the cost that would come over from site once that agreement is terminated.
Speaker #2: Two, we've realized we could run this business more efficiently. And so, as I mentioned in my prepared remarks, we're paying about $1 million per quarter to site.
Speaker #2: way of saying we feel like we've got So it's a long, inelegant great visibility. We spent an inordinate amount of time on the expense structure of curb.
Conor Fennerty: We spend an inordinate amount of time on the expense structure of Curb. And I would just tell you, if we look back versus two years ago, it's more efficient. Our expectation is it will be more efficient today than it was pre-spinoff. Other than that, to Alex's point, once we have clarity on the exact timing of the resolution and termination of the SSA, we'll provide the specifics. But I would just tell you, we expect to run really efficiently pro forma for the termination.
Conor Fennerty: We spend an inordinate amount of time on the expense structure of Curb. And I would just tell you, if we look back versus two years ago, it's more efficient. Our expectation is it will be more efficient today than it was pre-spinoff. Other than that, to Alex's point, once we have clarity on the exact timing of the resolution and termination of the SSA, we'll provide the specifics. But I would just tell you, we expect to run really efficiently pro forma for the termination.
Speaker #2: And I would just tell you, if we look back to versus two years ago, it is extremely it's more efficient or expectations will be more efficient Other than that, to Alex's point, once we have clarity on the exact timing of the resolution and termination of the SSA, we'll provide the specifics.
Speaker #2: But I would just tell you, we expect to run really today, better than it was pre-spin-off. Termination.
Speaker #8: So but 1 to 1 and 1/2 percent of GOV is sort—
Floris van Dijkum: But 1% to 1.5% of GAV is sort of a good benchmark?
Floris van Dijkum: But 1% to 1.5% of GAV is sort of a good benchmark?
Speaker #8: benchmark? No.
Conor Fennerty: No. What I said was 1% to 1.1% of GAV. What we're saying is Curb, we expect to be more efficient than that.
Conor Fennerty: No. What I said was 1% to 1.1% of GAV. What we're saying is Curb, we expect to be more efficient than that.
Speaker #2: What I said was 1 to 1.1% of GOV. And what we're saying is Curb, we expect to be more efficient than—
Speaker #2: What I said was 1 to 1.1% of GOV. And what we're saying is, Curb, we expect to be more efficient than that. And, got it.
Floris van Dijkum: Got it. Got it. Got it.
Floris van Dijkum: Got it. Got it. Got it.
Speaker #8: Got it.
Conor Fennerty: That was just after we deployed the $2.5 billion initial business plan. Once you get through that, then you really start to scale the expense, coming back to your first question from the start of the call. Then you really start to scale the corporate expenses. That's where you start to generate pretty significant EBITDA growth.
Speaker #2: That was just after we deployed the efficiently pro forma for the $2.5 billion initial business plan. Once you get through that, then you really start to scale the expense, coming back to your first question from the start of the call.
Conor Fennerty: That was just after we deployed the $2.5 billion initial business plan. Once you get through that, then you really start to scale the expense, coming back to your first question from the start of the call. Then you really start to scale the corporate expenses. That's where you start to generate pretty significant EBITDA growth.
Speaker #2: Then
Speaker #2: You really start to scale the corporate overhead of good expenses, and that's where you start to generate pretty significant EBITDA, welcome.
Speaker #2: growth.
Michael Mueller: Thanks, Conor.
Floris van Dijkum: Thanks, Conor.
Speaker #2: You're
Conor Fennerty: You're welcome.
Conor Fennerty: You're welcome.
Speaker #1: And we have reached the end of our question-and-answer session. I will now turn the call back over to David Lukes for closing remarks.
Operator: We have reached the end of our question and answer session. I will now turn the call back over to David Lukes for closing remarks.
Operator: We have reached the end of our question and answer session. I will now turn the call back over to David Lukes for closing remarks.
David Lukes: Thank you all very much for joining our call. We look forward to speaking with you next quarter.
David Lukes: Thank you all very much for joining our call. We look forward to speaking with you next quarter.
Speaker #2: Look forward to speaking with you next.
Speaker #2: quarter. This concludes
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: This concludes today's conference all. Thank you for your participation. You may now disconnect.
