Site Centers Corp. · NYSE:SITC
Site Centers — DDR — NAREIT REITweek June 2017
17 slides from Site Centers's conference presentation, Jun 6, 2017
Slide 1: NAREIT – June 2017 DDR Corp. Investor Presentation
Exhibit 99.1 NAREIT – JUNE 2017DDR CORP. INVESTOR PRESENTATIONS
Slide 2: Safe Harbor Statement
DDR considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Although the Company bel
Slide 3: Summary
SUMMARY Three Month Progress Report Short-Term Strategy Update Portfolio review and dispositions plan Balance sheet Leasing Actively Managing DDR Real Estate Measuring Tenant Risks Best Buy (BBY) case study Sears/Kmart and mall proximity analysis Occupancy cost analysis Long-Term Strategy Summary 20
Slide 4: Three Month Progress Report
THREE MONTH PROGRESS REPORT MONTH 1: ORGANIZATIONAL STREAMLINING Quickly right-sized organization to match smaller operating base 12% head count reduction (65 positions), expected $6MM annual reduction in G&A MONTH 2: INITIAL PORTFOLIO REVIEW AND STRATEGY PLANNING Assessed and sustained disposition
Slide 5: Short-Term Strategy Update: Portfolio Review and Disposition Plan
SHORT-TERM STRATEGY UPDATE PORTFOLIO REVIEW AND DISPOSITION PLAN Completed initial portfolio review Relatively consistent quality across portfolio with small proportion of assets “in the tail” DDR has aggressively disposed of lower quality assets since the GFC Dispositions now motivated by deleverag
Slide 6: Short-Term Strategy Update: Balance Sheet
SHORT-TERM STRATEGY UPDATE BALANCE SHEET Recently completed $625MM of capital markets transactions 10yr Unsecured Notes: $450MM, 4.7% all-in rate, T+245 (minimal new-issue concession) Perpetual Preferred: $175MM, 6.375% (negative new-issue concession) Increase weighted-average maturity 4.0 years as
Slide 7: Short-Term Strategy Update: Balance Sheet Maturities
SHORT-TERM STRATEGY UPDATE BALANCE SHEET MATURITIES ($MM) PRO FORMA MATURITIES ($MM) $1,200 $1,000 FOCUS AREA $800 Goal of initial balance sheet $600 activity has been to significantly $400 extend DDR’s average debt $200 term and minimize short-term $0 maturities 202 Note: Data as of 1Q17, pro forma
Slide 8: Short-Term Strategy Update: Leasing
SHORT-TERM STRATEGY UPDATE LEASING Currently running ahead of 1Q17 budgeted percentage leased guidance Expect to sign 475k SF of anchor leases in next 2-3 months vs. 2yr total quarterly leasing average of 400k SF of new leases Reaffirming expectation to complete TSA releasing by mid-2018 Healthy lis
Slide 9: Actively Managing DDR Real Estate
ACTIVELY MANAGING DDR REAL ESTATE 9
Slide 10: Measuring Tenant Risks: Best Buy Case Study
MEASURING TENANT RISKS BEST BUY CASE STUDY Best Buy (BBY) once seemed like another victim of internet market share loss: commodity products, weak store experience, high price competition Now the company appears to be a “multi-channel” success story, quadrupling the percentage of its sales from the i
Slide 11: Measuring Tenant Risks: Sears and Mall Proximity
MEASURING TENANT RISKS SEARS AND MALL PROXIMITY DDR has low exposure to B-mall and Sears/Kmart shadow supply Most anchors consider 1-2 miles the maximum distance for replacement locations A greater distance is generally seen as a new store rather than a substitute location % OF DDR ASSETS WITHIN 1-2
Slide 12: Measuring Tenant Risks: Occupancy Cost Analysis
MEASURING TENANT RISKS OCCUPANCY COST ANALYSIS Occupancy cost ratios for DDR’s largest tenants have generally fallen over the last 3 years as tenant sales have outpaced rent growth Open air occupancy costs are lower than other retail formats Occupancy Cost (OC) Type Retailers Included # of Reporting
Slide 13: Long-Term Strategy Summary
LONG-TERM STRATEGY SUMMARY Assets must fall into at least one of three categories: 1 2 3 DURABLE UNDERSERVING TRANSFORMATIONAL GROWTH THE 3-MILE RING REDEVELOPMENT POTENTIAL NATURALLY “DE-BOXING” POTENTIAL BELOW MARKET RENTS WITH GROWING NOI GLA EFFICIENCY UPSIDE 13
Slide 14: 2017 Guidance Summary
2017 GUIDANCE SUMMARY Withdrew 2017 FFO guidance due to uncertainty of transaction magnitude and timing Affirming 2017 operating assumptions Same Store NOI -1.5%-0% -1.0%-+0.5% Pro rata, including Puerto Rico Pro rata, excluding Puerto Rico Est. PRS SS NOI Impact Tenant 2016* 2017 2018 Expected Down
Slide 15: Evolution of DDR Leased Rate
EVOLUTION OF DDR LEASED RATE Bankruptcies and natural anchor expirations impacting leased rate Leased and commenced rate variance at the highest level in 2+ years 100% TSA lease-up 99% TSA BK Golfsmith BK, two anchor HHG BK, SHLD less PR anchor Expirations (one Dark) Expiration expiration 98% 97% 96
Slide 16: Significant Portfolio Pruning to Date
SIGNIFICANT PORTFOLIO PRUNING TO DATE 1Q10 1Q17 Variance OPERATING CENTERS 643 309 -51% WHOLLY-OWNED CENTERS 354 158 -55% OWNED GLA (000s) 90,061 67,953 -25% LEASED RATE 91% 94% 310 bps ABR PER SQUARE FOOT $12.37 $15.27 23% DDR has sold more assets as a percentage of GAV than almost any other shoppi
Slide 17: Portfolio Diversity
PORTFOLIO DIVERSITY VALUE/DISCOUNT TILT SIGNIFICANT GROCER COMPONENT SHOP TO ANCHOR BALANCE 35% CENTERS WITH NO MAJOR DISCOUNT COMPONENT 65% CENTERS ANCHORED BY A QUALITY DISCOUNTER 27% PREMIUM TENANT *19% GROCER 32% NON-GROCERY COMPONENT 33% DEDICATED GROCER 35% MASS MERCHANT 22% SHOP BY GLA 37% SH