InvenTrust Properties Corp. Reports 2024 First Quarter Results
First Quarter 2024 Highlights:
-
Nareit FFO of
$0.45 per diluted share -
Core FFO of
$0.44 per diluted share - Same Property Net Operating Income (“NOI”) growth of 4.1%
-
Leased Occupancy as of
March 31, 2024 of 96.3% - Executed 41 leases totaling approximately 180,000 square feet of GLA, of which 165,000 square feet was executed at a blended comparable lease spread of 11.2%
- Executed one anchor tenant lease at a comparable lease spread of 32.5%
-
Acquired The Plant, a 57,000 square foot neighborhood center anchored by Sprouts Farmers Market in
Chandler, Arizona
“InvenTrust’s 2024 is off to an excellent start, driven by persistent robust leasing activity with over 180,000 square feet of leases executed at double-digit leasing spreads in the first quarter,” said DJ Busch, CEO and President. “Our team continues to find new ways to unlock additional growth and value as we benefit from the strong demand for high-quality retail space in our
NET INCOME
-
Net Income for the three months ended
March 31, 2024 was$2.9 million , or$0.04 per diluted share, compared to Net Income of$1.1 million , or$0.02 per diluted share, for the same period in 2023.
NAREIT FFO
-
Nareit FFO for the three months ended
March 31, 2024 was$30.8 million , or$0.45 per diluted share, compared to$28.0 million , or$0.41 per diluted share, for the same period in 2023.
CORE FFO
-
Core FFO for the three months ended
March 31, 2024 was$30.0 million , or$0.44 per diluted share, compared to$27.4 million , or$0.40 per diluted share, for the same period in 2023.
SAME PROPERTY NOI
-
Same Property NOI for the three months ended
March 31, 2024 was$41.5 million , a 4.1% increase, compared to the same period in 2023.
DIVIDEND
-
For the quarter ended
March 31, 2024 , the Board of Directors declared a quarterly cash distribution of$0.2263 per share, paid onApril 15, 2024 .
PORTFOLIO PERFORMANCE & INVESTMENT ACTIVITY
-
As of
March 31, 2024 , the Company’s Leased Occupancy was 96.3%.- Anchor Leased Occupancy, which includes spaces greater than or equal to 10,000 square feet, was 98.6% and Small Shop Leased Occupancy was 92.1%. Anchor Leased Occupancy increased 40 basis points, and Small Shop Leased Occupancy decreased 40 basis points, each on a sequential basis compared to the previous quarter.
-
Leased to Economic Occupancy spread of 290 basis points, which equates to approximately
$7.6 million of base rent on an annualized basis.
- Blended re-leasing spreads for comparable new and renewal leases signed in the first quarter were 11.2%.
-
Annualized Base Rent PSF (“ABR”) as of
March 31, 2024 was$19.61 , an increase of 2.6% compared to the same period in 2023. Anchor Tenant ABR PSF was$12.56 and Small Shop ABR PSF was$33.16 for the first quarter. -
On
February 1, 2024 , the Company acquired The Plant, a 57,000 square foot neighborhood center anchored by Sprouts Farmers Market inChandler, Arizona for a gross acquisition price of$29.5 million . The Company used cash on hand and assumed$13.0 million of existing mortgage debt to fund the acquisition.
LIQUIDITY AND CAPITAL STRUCTURE
-
On
February 1, 2024 , the Company assumed$13.0 million of existing mortgage debt on The Plant, which matures onMay 10, 2025 . -
InvenTrust had
$421.2 million of total liquidity, as ofMarch 31, 2024 , comprised of$71.2 million of cash and cash equivalents and$350.0 million of availability under its Revolving Credit Facility. -
InvenTrust has
$88.2 million of debt maturing in 2024 and$35.9 million of debt maturing in 2025, as ofMarch 31, 2024 . -
The Company's weighted average interest rate on its debt as of
March 31, 2024 was 4.28% and the weighted average remaining term was 3.7 years.
SUBSEQUENT EVENTS
-
On
April 9, 2024 , the Company acquiredMoores Mill , a 70,000 square foot neighborhood center anchored byPublix inAtlanta, Georgia for a gross acquisition price of$28.0 million . The Company used cash on hand to fund the acquisition.
2024 GUIDANCE
InvenTrust has updated its 2024 guidance, as summarized in the table below.
(Unaudited, dollars in thousands, except per share amounts) |
Current (1) (2) |
|
Previous |
||||
Net Income per diluted share |
|
— |
|
|
|
— |
|
Nareit FFO per diluted share |
|
— |
|
|
|
— |
|
Core FFO per diluted share (3) |
|
— |
|
|
|
— |
|
Same Property NOI (“SPNOI”) Growth |
2.75% |
— |
3.75% |
|
2.25% |
— |
3.25% |
General and administrative |
|
— |
|
|
|
— |
|
Interest expense, net (4) |
|
— |
|
|
|
— |
|
Net investment activity (5) |
~ |
|
~ |
(1) |
The Company’s guidance excludes projections related to gains or losses on dispositions, gains or losses on debt transactions, and depreciation, amortization, and straight-line rent adjustments related to acquisitions. |
|
(2) |
The Company’s guidance includes an expectation of uncollectibility, reflected as 50-100 basis points of expected total revenue. |
|
(3) |
Core FFO per diluted share excludes amortization of market-lease intangibles and inducements, debt extinguishment charges, straight-line rent adjustments, depreciation and amortization of corporate assets, and non-operating income and expense. |
|
(4) |
Interest expense, net, excludes amortization of debt discounts and financing costs, and expected interest income of approximately |
|
(5) |
Net investment activity represents anticipated acquisition activity less disposition activity. |
In addition to the foregoing assumptions, the Company's guidance incorporates a number of other assumptions that are subject to change and may be outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurances that InvenTrust will achieve these results.
The following table provides a reconciliation of the range of the Company's 2024 estimated net income per diluted share to estimated Nareit FFO and Core FFO per diluted share:
(Unaudited) |
Low End |
|
High End |
||||
Net income per diluted share |
$ |
0.06 |
|
|
$ |
0.12 |
|
Depreciation and amortization related to investment properties |
|
1.65 |
|
|
|
1.65 |
|
Nareit FFO per diluted share |
|
1.71 |
|
|
|
1.77 |
|
Amortization of market-lease intangibles and inducements, net |
|
(0.03 |
) |
|
|
(0.04 |
) |
Straight-line rent adjustments, net |
|
(0.04 |
) |
|
|
(0.05 |
) |
Amortization of debt discounts and financing costs |
|
0.03 |
|
|
|
0.03 |
|
Core FFO per diluted share |
$ |
1.67 |
|
|
$ |
1.71 |
|
This press release does not include a reconciliation of forward-looking SPNOI to forward-looking GAAP Net Income because the Company is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to the Company’s results.
EARNINGS CALL INFORMATION
Date: |
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Time: |
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Dial-in: |
(833) 470-1428 / Access Code: 228906 |
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Webcast & Replay Link: |
A webcast replay will be available shortly after the conclusion of the presentation using the webcast link above.
NON-GAAP FINANCIAL MEASURES
This Press Release includes certain financial measures and other terms that are not in accordance with
SAME PROPERTY NOI or SPNOI
Information provided on a same property basis includes the results of properties that were owned and operated for the entirety of both periods presented. NOI excludes general and administrative expenses, depreciation and amortization, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and straight-line rent adjustments (“GAAP Rent Adjustments”). NOI from other investment properties includes adjustments for the Company's captive insurance company.
NAREIT FUNDS FROM OPERATIONS (NAREIT FFO) and CORE FFO
The Company’s non-GAAP measure of Nareit Funds from Operations ("Nareit FFO"), based on the
ADJUSTED EBITDA
The Company’s non-GAAP measure of Adjusted EBITDA excludes gains (or losses) resulting from debt extinguishments, straight-line rent adjustments, amortization of above and below market leases and lease inducements, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance. Adjustments for the Company’s unconsolidated joint venture are calculated to reflect the Company’s proportionate share of the joint venture's Adjusted EBITDA on the same basis.
NET DEBT-TO-ADJUSTED EBITDA
Net Debt-to-Adjusted EBITDA is Net Debt divided by trailing twelve month Adjusted EBITDA.
FORMER JOINT VENTURE
On
Financial Statements |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
In thousands, except share amounts |
|||||||
As of |
|
As of |
|||||
|
2024 |
|
2023 |
||||
Assets |
(unaudited) |
|
|
||||
Investment properties |
|
|
|
||||
Land |
$ |
698,532 |
|
|
$ |
694,668 |
|
Building and other improvements |
|
1,979,896 |
|
|
|
1,956,117 |
|
Construction in progress |
|
7,202 |
|
|
|
5,889 |
|
Total |
|
2,685,630 |
|
|
|
2,656,674 |
|
Less accumulated depreciation |
|
(476,541 |
) |
|
|
(461,352 |
) |
Net investment properties |
|
2,209,089 |
|
|
|
2,195,322 |
|
Cash, cash equivalents and restricted cash |
|
75,116 |
|
|
|
99,763 |
|
Intangible assets, net |
|
110,920 |
|
|
|
114,485 |
|
Accounts and rents receivable |
|
29,766 |
|
|
|
35,353 |
|
Deferred costs and other assets, net |
|
51,477 |
|
|
|
42,408 |
|
Total assets |
$ |
2,476,368 |
|
|
$ |
2,487,331 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Debt, net |
$ |
827,527 |
|
|
$ |
814,568 |
|
Accounts payable and accrued expenses |
|
28,764 |
|
|
|
44,583 |
|
Distributions payable |
|
15,360 |
|
|
|
14,594 |
|
Intangible liabilities, net |
|
29,730 |
|
|
|
30,344 |
|
Other liabilities |
|
26,938 |
|
|
|
29,198 |
|
Total liabilities |
|
928,319 |
|
|
|
933,287 |
|
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Stockholders' Equity |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock,
67,874,528 shares issued and outstanding as of
67,807,831 shares issued and outstanding as of |
|
68 |
|
|
|
68 |
|
Additional paid-in capital |
|
5,471,191 |
|
|
|
5,468,728 |
|
Distributions in excess of accumulated net income |
|
(3,945,286 |
) |
|
|
(3,932,826 |
) |
Accumulated comprehensive income |
|
22,076 |
|
|
|
18,074 |
|
Total stockholders' equity |
|
1,548,049 |
|
|
|
1,554,044 |
|
Total liabilities and stockholders' equity |
$ |
2,476,368 |
|
|
$ |
2,487,331 |
|
Financial Statements, continued | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
|||||||
In thousands, except share and per share amounts, unaudited |
|||||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Income |
|
|
|
||||
Lease income, net |
$ |
66,493 |
|
|
$ |
64,830 |
|
Other property income |
|
305 |
|
|
|
295 |
|
Other fee income |
|
— |
|
|
|
80 |
|
Total income |
|
66,798 |
|
|
|
65,205 |
|
|
|
|
|
||||
Operating expenses |
|
|
|
||||
Depreciation and amortization |
|
28,168 |
|
|
|
26,758 |
|
Property operating |
|
9,999 |
|
|
|
10,230 |
|
Real estate taxes |
|
8,981 |
|
|
|
9,628 |
|
General and administrative |
|
7,974 |
|
|
|
7,731 |
|
Total operating expenses |
|
55,122 |
|
|
|
54,347 |
|
|
|
|
|
||||
Other (expense) income |
|
|
|
||||
Interest expense, net |
|
(9,634 |
) |
|
|
(9,509 |
) |
Equity in losses of unconsolidated entities |
|
— |
|
|
|
(663 |
) |
Other income and expense, net |
|
858 |
|
|
|
447 |
|
Total other (expense) income, net |
|
(8,776 |
) |
|
|
(9,725 |
) |
|
|
|
|
||||
Net income |
$ |
2,900 |
|
|
$ |
1,133 |
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic |
|
67,874,528 |
|
|
|
67,508,641 |
|
Weighted-average common shares outstanding - diluted |
|
68,272,050 |
|
|
|
67,654,524 |
|
|
|
|
|
||||
Net income per common share - basic |
$ |
0.04 |
|
|
$ |
0.02 |
|
Net income per common share - diluted |
$ |
0.04 |
|
|
$ |
0.02 |
|
|
|
|
|
||||
Distributions declared per common share outstanding |
$ |
0.23 |
|
|
$ |
0.22 |
|
Distributions paid per common share outstanding |
$ |
0.22 |
|
|
$ |
0.20 |
|
|
|
|
|
||||
Comprehensive income (loss) |
|
|
|
||||
Net income |
$ |
2,900 |
|
|
$ |
1,133 |
|
Unrealized gain (loss) on derivatives, net |
|
7,319 |
|
|
|
(3,317 |
) |
Reclassification to net income |
|
(3,317 |
) |
|
|
(2,892 |
) |
Comprehensive income (loss) |
$ |
6,902 |
|
|
$ |
(5,076 |
) |
Reconciliation of Non-GAAP Measures | |||||
In thousands | |||||
Same Property NOI |
|||||
|
Three Months Ended |
||||
|
2024 |
|
2023 |
||
Income |
|
|
|
||
Minimum base rent |
$ |
38,538 |
|
$ |
37,739 |
Real estate tax recoveries |
|
7,612 |
|
|
8,094 |
Common area maintenance, insurance, and other recoveries |
|
7,100 |
|
|
6,533 |
Ground rent income |
|
3,877 |
|
|
3,954 |
Short-term and other lease income |
|
1,253 |
|
|
1,292 |
Reversal of uncollectible billed rent and recoveries, net |
|
102 |
|
|
300 |
Other property income |
|
271 |
|
|
277 |
Total income |
|
58,753 |
|
|
58,189 |
|
|
|
|
||
Operating Expenses |
|
|
|
||
Property operating |
|
8,934 |
|
|
9,327 |
Real estate taxes |
|
8,346 |
|
|
9,005 |
Total operating expenses |
|
17,280 |
|
|
18,332 |
|
|
|
|
||
Same Property NOI |
$ |
41,473 |
|
$ |
39,857 |
Net Income to Same Property NOI |
|||||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
2,900 |
|
|
$ |
1,133 |
|
Adjustments to reconcile to non-GAAP metrics: |
|
|
|
||||
Other income and expense, net |
|
(858 |
) |
|
|
(447 |
) |
Equity in losses of unconsolidated entities |
|
— |
|
|
|
663 |
|
Interest expense, net |
|
9,634 |
|
|
|
9,509 |
|
Depreciation and amortization |
|
28,168 |
|
|
|
26,758 |
|
General and administrative |
|
7,974 |
|
|
|
7,731 |
|
Other fee income |
|
— |
|
|
|
(80 |
) |
Adjustments to NOI (a) |
|
(2,043 |
) |
|
|
(2,559 |
) |
NOI |
|
45,775 |
|
|
|
42,708 |
|
NOI from other investment properties |
|
(4,302 |
) |
|
|
(2,851 |
) |
Same Property NOI |
$ |
41,473 |
|
|
$ |
39,857 |
|
(a) |
Adjustments to NOI include lease termination income and expense and GAAP Rent Adjustments. |
Reconciliation of Non-GAAP Measures, continued | |||||||
in thousands, except share and per share amounts | |||||||
|
|||||||
Nareit FFO and Core FFO |
|||||||
|
|||||||
The following table presents a reconciliation of Net Income to Nareit FFO and Core FFO Applicable to |
|||||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
2,900 |
|
|
$ |
1,133 |
|
Depreciation and amortization related to investment properties |
|
27,946 |
|
|
|
26,543 |
|
Unconsolidated joint venture adjustments (a) |
|
— |
|
|
|
342 |
|
Nareit FFO Applicable to |
|
30,846 |
|
|
|
28,018 |
|
Amortization of market lease intangibles and inducements, net |
|
(576 |
) |
|
|
(1,516 |
) |
Straight-line rent adjustments, net |
|
(906 |
) |
|
|
(909 |
) |
Amortization of debt discounts and financing costs |
|
575 |
|
|
|
854 |
|
Depreciation and amortization of corporate assets |
|
222 |
|
|
|
215 |
|
Non-operating income and expense, net (b) |
|
(180 |
) |
|
|
865 |
|
Unconsolidated joint venture adjustments (c) |
|
— |
|
|
|
(156 |
) |
Core FFO Applicable to |
$ |
29,981 |
|
|
$ |
27,371 |
|
|
|
|
|
||||
Weighted average common shares outstanding - basic |
|
67,874,528 |
|
|
|
67,508,641 |
|
Dilutive effect of unvested restricted shares (d) |
|
397,522 |
|
|
|
145,883 |
|
Weighted average common shares outstanding - diluted |
|
68,272,050 |
|
|
|
67,654,524 |
|
|
|
|
|
||||
Net income per diluted share |
$ |
0.04 |
|
|
$ |
0.02 |
|
Nareit FFO per diluted share |
$ |
0.45 |
|
|
$ |
0.41 |
|
Core FFO per diluted share |
$ |
0.44 |
|
|
$ |
0.40 |
|
(a) |
Reflects the Company’s share of adjustments for IAGM's Nareit FFO on the same basis as InvenTrust. |
|
(b) |
Reflects items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income, and basis difference recognition arising from acquiring the four remaining properties of IAGM in 2023. |
|
(c) |
Reflects the Company’s share of adjustments for IAGM's Core FFO on the same basis as InvenTrust. |
|
(d) |
For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted earnings per share in accordance with GAAP. |
Reconciliation of Non-GAAP Measures, continued | |||||||
In thousands | |||||||
|
|||||||
EBITDA and Adjusted EBITDA |
|||||||
|
|||||||
The following table presents a reconciliation of Net Income to EBITDA and Adjusted EBITDA, and provides additional information related to its operations: |
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
2024 |
|
2023 |
||||
Net income |
$ |
2,900 |
|
|
$ |
1,133 |
|
Interest expense, net |
|
9,634 |
|
|
|
9,509 |
|
Income tax expense |
|
133 |
|
|
|
126 |
|
Depreciation and amortization |
|
28,168 |
|
|
|
26,758 |
|
Unconsolidated joint venture adjustments (a) |
|
— |
|
|
|
423 |
|
EBITDA |
|
40,835 |
|
|
|
37,949 |
|
Amortization of market-lease intangibles and inducements, net |
|
(576 |
) |
|
|
(1,516 |
) |
Straight-line rent adjustments, net |
|
(906 |
) |
|
|
(909 |
) |
Non-operating income and expense, net (b) |
|
(180 |
) |
|
|
865 |
|
Unconsolidated joint venture adjustments (c) |
|
— |
|
|
|
(172 |
) |
Adjusted EBITDA |
$ |
39,173 |
|
|
$ |
36,217 |
|
|
|
|
|
(a) |
Reflects the Company's share of adjustments for IAGM's EBITDA on the same basis as InvenTrust. |
|
(b) |
Reflects items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income, and basis difference recognition arising from acquiring the four remaining properties of IAGM in 2023. |
|
(c) |
Reflects the Company's share of adjustments for IAGM's Adjusted EBITDA on the same basis as InvenTrust. |
Financial Leverage Ratios |
|||||||
Dollars in thousands |
|||||||
|
|||||||
The following table presents the calculation of net debt and Net Debt-to-Adjusted EBITDA: |
|||||||
|
|
|
|
||||
|
As of |
|
As of |
||||
|
2024 |
|
2023 |
||||
Net Debt: |
|
|
|
||||
Outstanding Debt, net |
$ |
827,527 |
|
|
$ |
814,568 |
|
Less: Cash and cash equivalents |
|
(71,170 |
) |
|
|
(96,385 |
) |
Net Debt |
$ |
756,357 |
|
|
$ |
718,183 |
|
|
|
|
|
||||
Net Debt-to-Adjusted EBITDA (trailing 12 months): |
|
|
|
||||
Net Debt |
$ |
756,357 |
|
|
$ |
718,183 |
|
Adjusted EBITDA (trailing 12 months) |
|
149,415 |
|
|
|
146,459 |
|
Net Debt-to-Adjusted EBITDA |
5.1x |
|
|
4.9x |
|
About
The enclosed information should be read in conjunction with the Company's filings with the
Forward-Looking Statements Disclaimer
Forward-Looking Statements in this press release, or made during the earnings call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements about the Company's 2024 guidance, the amount and timing of payment of the Company's next quarterly dividend, the Company's expectation for continued growth and tenant demand for its centers, strength of and anticipated opportunities based on IVT's low leverage levels, or regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, are typically identified by words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” "continue," “likely,” “will,” “would,” "outlook," "guidance," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain.
The following factors, among others, could cause actual results, financial position and timing of certain events to differ materially from those described in the forward-looking statements: interest rate movements; local, regional, national and global economic performance; the impact of inflation on the Company and on its tenants; competitive factors; the impact of e-commerce on the retail industry; future retailer store closings; retailer consolidation; retailers reducing store size; retailer bankruptcies; government policy changes; and any material market changes and trends that could affect the Company’s business strategy. For further discussion of factors that could materially affect the outcome of management's forward-looking statements and IVT's future results and financial condition, see the Risk Factors included in the Company's most recent Annual Report on Form 10-K, as updated by any subsequent Quarterly Report on Form 10-Q, in each case as filed with the
IVT cautions you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. IVT undertakes no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If IVT updates one or more forward-looking statements, no inference should be drawn that IVT will make additional updates with respect to those or other forward-looking statements.
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Vice President of Investor Relations
630-570-0605
dan.lombardo@inventrustproperties.com
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