Site Centers Corp. · NYSE:SITC
Site Centers — Q2 2024 Earnings Presentation
39 slides from Site Centers's earnings presentation, Jul 30, 2024
Slide 1: 2Q24 Earnings Conference Call
2Q24 EARNINGS CONFERENCE CALL S I T E C E N T E R S | J U LY 3 0 , 2 0 24
Slide 2: Safe Harbor Statement
S A F E H A R B O R S TAT E M E N T SITE Centers Corp. considers portions of the information in this press release 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
Slide 3: Table of Contents
Table of Contents 2 Q 24 K E Y TA K E AWAY S G U I D A N C E A N D E A R N I N G S C O N S I D E R AT I O N S 4 6 SPIN- OFF OVERVIEW 7 CURBLINE PROPERTIES 12 SITE CENTERS 30
Slide 4: 2Q24 Results Key Takeaways
2 Q 24 R E S U LT S K E Y TA K E AWAY S Focused portfolio located in the wealthiest sub-markets of the U.S. 1 0 1 WH O L LY- OWN E D PROPE R T I E S W I TH AVE R AG E H O US E H O LD I NC OM E O F $ 113K (90 TH PE RCE N TILE ) 1 ALMOST $900M OF TOTAL TRANSACTION ACTIVITY 2 SPIN-OFF OF CONVENIENCE PO
Slide 5: Significant unencumbered asset base and liquidity
SIGNIFICANT UNENCUMBERED ASSET BASE AND LIQUIDIT Y A s of 2Q24, SITE has no consolidate d maturities in 2024, no unhe dg e d variable rate debt and $2 .1B of liquidit y ($1.2B of cash and restric te d cash and $950 M of availabilit y on the Company ’s line of credit) During 2Q24, SITE repurchase d $
Slide 6: Projections and Earnings Considerations
2 0 24 P R O J E C T I O N S A N D E A R N I N G S C O N S I D E R AT I O N S 2Q24 EARNINGS CONS I D ER AT IO NS • Assets sold in 2Q24 contributed $11.2 M in PRS NOI t o t he quarter and $225 K of fee incom e • O ther income included $8.6M of interest income • 2Q24 included $1. 6M of lease terminati
Slide 7: Spin-Off Overview
& CURBLINE SPIN-OFF OVERVIEW
Slide 8: Transaction Overview: Unlocking a Unique Scalable Investment Opportunity
TRANSACTION OVERVIEW Unlocking a Unique Scalable Investment Opportunity Focused Growth Vehicle Intended Maximize and Realize NAV Through to Scale Fragmented Property Type Operations and Asset Sales • Spin-off unlocks the first and only public REIT exclusively focused on • SITE Centers intends to max
Slide 9: Transaction Overview: Key Operating Metrics
TRANSACTION OVERVIEW: KEY OPERATING METRICS The Spin separates the Company’s Convenience strategy from SITE Centers, providing investors two distinct investment strategies. 2Q2024 Property Count (including JVs) 72 58 Estimated Property NOI Projection ($M)1 $82.6 – $84.9 $198.3 – $204.4 ABR PSF $
Slide 10: Transaction Overview: Estimated Timeline & Cash Flows
TRANSACTION OVERVIEW: ESTIMATED TIMELINE & CASH FLOWS Public Announcement $0.16 Per Share Spin Special Dividend Complete Form 10 Submission & Review. Pre-Spin Reinvestment Period. OCT NOV-DEC JAN-JUN JUL-SEP OCT 2023 2024 2024 SOURCES USES (3Q24) (3Q24) Mortgage Proceeds1 $555M Unsecured Notes $1,21
Slide 11: Transaction Overview: Pro Forma Balance Sheets
TRANSACTION OVERVIEW: PRO FORMA BALANCE SHEETS 2Q2024 PRO FORMA SITE Centers SITE Centers Curbline Cash & Restricted Cash $1,186M $25M $600M Total Assets $1,186M $25M $600M Pro forma for the Spin, SITE Centers is expected to have no unsecured debt outstanding and CURB is Unsecured Public Debt $1,218
Slide 12: Curbline Properties (CURB)
& CURBLUINE CURBLINE PROPERTIES (CURB)
Slide 13: A Uniquely Positioned Company: Components of Growth
CURBLINE PROPERTIES: A UNIQUELY POSITIONED COMPANY Unmatched Balance Sheet Capacity Limited Operating First Mover Advantage in Capital Needs a Fragmented Market COMPONENTS OF GROWTH Innovative Scalable Investment Management Team Opportunity Set Highly Diversified Portfolio Attractive Leasing by Tena
Slide 14: Portfolio Overview
CURBLINE PROPERTIES: PORTFOLIO OVERVIEW The Curbline Portfolio is a 2M SF portfolio of unanchored Convenience real estate concentrated in the top U.S. sub-markets that has been screened and curated based on demographics, credit profile, mark-to-market and cash flow growth 2.4m $35.27 95.9% SQUARE FE
Slide 15: Differentiated from Public Peers
CURBLINE PROPERTIES: DIFFERENTIATED FROM PUBLIC PEERS SHOPS A S A % OF ABR AVER AGE A S SE T SIZE (SF) TOP 1 0 TENANT CONCENTR ATION 92% 35k sf 13.8% 100% 300 35% 90% 30% 250 80% 25% 70% 200 60% 20% 50% 150 15% 40% 100 30% 10% 20% 50 5% 10% 0% 0 0% CURB ROIC REG PECO KRG FRT BRX KIM UE CURB ROIC PEC
Slide 16: Diversified Geographic Exposure
CURBLINE PROPERTIES: DIVERSIFIED GEOGRAPHIC EXPOSURE The Curbline portfolio is well diversified across the largest MSAs and affluent suburban sub-markets in the United States benefiting from strong population and employment growth along with significant barriers to entry THE CURBLINE PORTFOLIO % OF
Slide 17: Key Convenience Sector Attributes
CURBLINE PROPERTIES: KEY CONVENIENCE SECTOR ATTRIBUTES ATTRACTIVE ECONOMICS Convenience properties are laid out as a ubiquitous line-up of primarily shop units that are attractive to a wide variety SCALABLE of high credit national tenants which limits long-term Convenience assets are among the most
Slide 18: Convenience: Excellent Access, Visibility and Dedicated Parking
CURBLINE PROPERTIES: CONVENIENCE: EXCELLENT ACCESS, VISIBILITY AND DEDICATED PARKING THE ATTRIBUTES OF CONVENIENCE REAL ESTATE Real estate located on the curbline caters to daily, largely necessity-based convenience trips from the growing suburban population of the United States. Convenience DRIVE-T
Slide 19: Convenience: Significant Depth and Breadth of Demand for Space
CURBLINE PROPERTIES: CONVENIENCE: SIGNIFICANT DEPTH AND BREADTH OF DEMAND FOR SPACE Curbline’s access, visibility and standardized unit size attracts a diverse group of primarily national credit tenants, with significant volume from public QSR operators, banks, medical and other service users NEW LE
Slide 20: Convenience: National Convenience Tenants Growing Store Footprints
CURBLINE PROPERTIES: CONVENIENCE: NATIONAL CONVENIENCE TENANTS GROWING STORE FOOTPRINTS There are a significant number of national convenience tenants growing store fleets, introducing new concepts and expanding into new markets providing a wide mix of potential leasing opportunities ANNOUNCED S TOR
Slide 21: Convenience: Supply Demand Imbalance
CURBLINE PROPERTIES: CONVENIENCE: SUPPLY DEMAND IMBALANCE The CURB portfolio leased rate has averaged 96.4% over the last 7 years highlighting the portfolio and property type’s supply and demand imbalance CURB PORTFOLIO LE A SED R ATE VS . PEER SHOP LE A SED R ATE 100% 98% 96% 96.4% 7 YE AR AVG. 94%
Slide 22: Convenience: Traffic, Access & Demand Drive Lease Economics
CURBLINE PROPERTIES: CONVENIENCE: TRAFFIC, ACCESS & DEMAND DRIVE COMPELLING LEASE ECONOMICS CURB portfolio has generated compelling leasing economics in excess of the open-air retail industry driven by Convenience property type tailwinds and the strength of Curbline’s sub-markets. Key metrics includ
Slide 23: Scalable Investment: Significant Total Addressable Market
CURBLINE PROPERTIES: SCALABLE INVESTMENT: SIGNIFICANT TOTAL ADDRESSABLE MARKET Convenience Assets Represent Sizable Portion of Total U.S. Retail GLA and a significant investment opportunity • Convenience real estate accounts for 60% of total shopping centers by count and almost 13% by GLA • CURB’s p
Slide 24: Scalable Investment: Elevated Transaction Volume & Opportunity Set
CURBLINE PROPERTIES: SCALABLE INVESTMENT: ELEVATED TRANSACTION VOLUME & OPPORTUNITY SET Over $41B of convenience properties were sold in 2019 - 2023 providing a broad investment opportunity set 2019 -202 3 CUMUL ATIVE TR ANSAC TION VOLUME ($) $45 $40 $41 $40 $36 $35 $31 $29 $30 $ BILLION $25 $20 $15
Slide 25: Scalable Investment: Limited Public Market Competition
CURBLINE PROPERTIES: SCALABLE INVESTMENT: LIMITED PUBLIC MARKET COMPETITION 92% of Convenience assets were acquired by private Transaction volume is concentrated in the largest MSAs buyers providing a unique opportunity for a public with compelling sub-market demographics where CURB vehicle to scale
Slide 26: Scalable Investment: Curbline Growth Opportunity
CURBLINE PROPERTIES: SCALABLE INVESTMENT: CURBLINE GROWTH OPPORTUNITY CURB’s projected balance sheet -- no debt, $600M of cash on hand – and retained cash flow expected to drive significant capacity to capitalize on opportunities and scale CURBLINE INVESTMENT FULLY INVESTED CAPACITY PORTFOLIO Est. G
Slide 27: Attractive Economics: Renewals Focus Reduces Downtime While Capturing MTM
CURBLINE PROPERTIES: ATTRACTIVE ECONOMICS: RENEWALS FOCUS REDUCES DOWNTIME WHILE CAPTURING MTM The unanchored business has attractive economic returns driven by the sector’s standard lease structures, high retention rates and limited CapEx requirements • Lease structures drive above-average occupanc
Slide 28: Attractive Economics: Standardized Site Plan and Unit Sizes
CURBLINE PROPERTIES: ATTRACTIVE ECONOMICS: STANDARDIZED SITE PLAN AND UNIT SIZES The standardized site plan and unit sizes of unanchored properties require limited operating capital expenditures to backfill vacancies (7% average as % of NOI from 2020 to 2024) generating substantial free cash flow on
Slide 29: Attractive Economics: Diversified National Tenant Exposure
CURBLINE PROPERTIES: ATTRACTIVE ECONOMICS: DIVERSIFIED NATIONAL TENANT EXPOSURE REDUCES TURNOVER RANK TENANT % OF GLA % OF ABR 72% 34% 1 Starbucks 1.4% 2.6% 2 Darden 1.9% 1.7% OF ABR FROM OF ABR FROM PUBLICLY 3 Verizon 0.9% 1.3% NATIONAL TENANTS TRADED TENANTS 4 Inspire Brands 1 1.0% 1.2% 5 JPMorgan
Slide 30: Site Centers (SITC)
SITE CENTERS (SITC)
Slide 31: Pro Forma Site Centers: Curated Shopping Center Portfolio
PRO FORMA SITE CENTERS: C U R AT E D S H O P P I N G C E N T E R P O R T F O L I O 114k 1 OF S H O P P I N G C EN T ER S N AT I O N A L LY 146 56 W O /J V A S S E T S W O /J V A S S E T S SOLD SINCE 3Q18 ACQUIRED SINCE 3Q18 AVG H HI P O P U L AT I O N 89th 78th PERCENTILE PERCENTILE 111k $ SITC PORT
Slide 32: Pro Forma Site Centers: Portfolio Overview
PRO FORMA SITE CENTERS: PORTFOLIO OVERVIEW SITE CENTERS’ CUR ATED PORTFOLIO IS G EOG R APHIC ALLY DIVERSIFIED WITH SIG NIFIC ANT DISCOUNT AND G ROCER E XPOSURE GROCERY-ANCHORED GEOGRAPHIC NATIONAL TENANT ASSETS ACCOUNT FOR 68% DIVERSIFICATION CONCENTRATION OF SITE PORTFOLIO 6% 5% 3% 3% 3% 32% 29% 26
Slide 33: Pro Forma Site Centers: Concentrated in High Income Growth Markets
PRO FORMA SITE CENTERS: C O N C E N T R AT E D I N H I G H I N C O M E G R O W T H M A R K E T S CONCENTR ATED IN AFFLUENT SUBURBAN COMMUNITIES IN TOP U.S. G ROW TH MARKE TS $ 111k AVG H HI CHICAGO 11% P R I N C E TO N / T R E N TO N 1 0 % 115k DENVER 8% RICHMOND 4% P O P U L AT I O N LOS ANGELES 5%
Slide 34: Pro Forma Site Centers: Select Asset Overview
PRO FORMA SITE CENTERS: SELECT ASSET OVERVIEW CUR ATED PORTFOLIO OF ASSE TS CONCENTR ATED IN TOP SUB MARKE TS WINTER GARDEN EAST HANOVER FAIRFAX NASSAU PARK PROMENADE WHOLE FOODS VILLAGE PLAZA TOWNE CENTER PAVILION AT BRENTWOOD AT BAY PLACE ORLANDO NEW YORK WASHINGTON, DC PRINCETON ST. LOUIS SAN FRA
Slide 35: Pro Forma Site Centers: Elevated Anchor Demand Driving Growth
PRO FORMA SITE CENTERS: E L E VAT E D A N C H O R D E M A N D D R I V I N G G R O W T H SITE CENTERS HAS SIG NED 93 ANCHORS, INCLUDING 50 UNIQUE CONCEP TS, SINCE 1Q2020 CONCENTR ATED IN PUB LIC , NATIONAL CREDIT TENANTS O T H E R 81% N E W C O N C E P T 19% New Concept Anchor Leases by ABR O T H E R
Slide 36: Pro Forma Site Centers: SNO Pipeline Expected to Drive Future NOI Growth
PRO FORMA SITE CENTERS: SN O PIPELINE E XPEC TED TO D RIV E FUTURE N OI G ROW TH $6M SNO pipeline represents 3.0% of ABR • National tenants represent 93% of the SNO pipeline as of 2Q24 (70% publicly traded) SIT E CE N T E RS L E AS E D A N D CO M M E N CE D R AT E 2 02 4 + S N O CO M M E N CE M E N
Slide 37: 2024 YTD Disposition Overview
2024 Y T D D ISP OSITI O N OV ERV IE W SITC Management has a strong track record of value realization with over $8B (at 100%) of assets sold in 2017-2024 YTD Completed $1.8B of dispositions since June 30, 2023 including third quarter dispositions of $68M Over $1B of additional assets under contract,
Slide 38: Appendix
APPENDIX
Slide 39: Non-GAAP Financial Measures and Other Operational Metrics - Definitions
NON-GAAP FINANCIAL MEASURES AND OTHER OPERATIONAL METRICS - DEFINITIONS NOI and SSNOI The Company also uses NOI, a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful inform