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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SITE Centers Corp | NYSE:SITC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.22 | 1.55% | 14.42 | 14.46 | 14.23 | 14.27 | 2,004,208 | 01:00:00 |
SITE Centers Corp. (NYSE: SITC), an owner of open-air shopping centers in suburban, high household income communities, announced today operating results for the quarter ended March 31, 2024.
“SITE Centers made additional progress on the announced planned spin-off of the Company’s Convenience assets in the first quarter highlighted by $189 million of year-to-date transaction activity and remains on track to form and scale what is expected to be the first public real estate company focused exclusively on Convenience properties,” commented David R. Lukes, President and Chief Executive Officer. “We remain excited by the prospects and opportunity set for both SITE Centers and Curbline Properties and believe both companies remain positioned to achieve their business plans and create stakeholder value.”
Results for the First Quarter
Significant First Quarter and Recent Activity
Key Quarterly Operating Results
Property NOI Projection
The Company projects, based on the assumptions below, 2024 property level NOI to be as follows:
Portfolio
NOI Projection ($M)
SITE Centers
$252.8 – $260.6
Curbline Properties
$76.9 – $80.2
These projections:
In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, reconciliation of the projected NOI and assumed range of 2024 SSNOI growth to the most directly comparable GAAP financial measure is not provided because the Company is unable to provide such reconciliations without unreasonable effort due to the multiple components of the calculations which for the same-store calculation only includes properties owned for comparable periods and excludes all corporate level activity as described below under Non-GAAP Measures and Other Operational Metrics.
About SITE Centers Corp.
SITE Centers is an owner and manager of open-air shopping centers located in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC. Additional information about the Company is available at www.sitecenters.com. To be included in the Company’s e-mail distributions for press releases and other investor news, please click here.
Conference Call and Supplemental Information
The Company will hold its quarterly conference call today at 8:00 a.m. Eastern Time. To participate with access to the slide presentation, please visit the Investor Relations portion of SITE's website, ir.sitecenters.com, or for audio only, dial 888‑317‑6003 (U.S.), 866-284-3684 (Canada) or 412-317-6061 (international) using pass code 7262807 at least ten minutes prior to the scheduled start of the call. The call will also be webcast and available in a listen-only mode on SITE Centers’ website at ir.sitecenters.com. If you are unable to participate during the live call, a replay of the conference call will also be available at ir.sitecenters.com for further review. You may also access the telephone replay by dialing 877-344-7529 (U.S.), 855-669-9658 (Canada) or 412-317-0088 (international) using passcode 4967980 through May 30, 2024. Copies of the Company’s supplemental package and earnings slide presentation are available on the Company’s website.
Non-GAAP Measures and Other Operational Metrics
Funds from Operations (“FFO”) is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with generally accepted accounting principles in the United States (“GAAP”)), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains/losses. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains/losses to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.
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 information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
The Company presents NOI information herein on a same store basis or “SSNOI.” The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income and reimbursements and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI includes assets owned in comparable periods (15 months for prior period comparisons). In addition, SSNOI is presented including activity associated with redevelopment. SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI at its effective ownership interest provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above.
FFO, Operating FFO, NOI and SSNOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income (loss) computed in accordance with GAAP, as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures have been provided herein. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, reconciliation of the projected NOI and assumed rate of 2024 SSNOI growth to the most directly comparable GAAP financial measure is not provided because the Company is unable to provide such reconciliations without unreasonable effort due to the multiple components of the calculations which for the same-store calculation only includes properties owned for comparable periods and excludes all corporate level activity as noted above.
The Company calculates Cash Leasing Spreads by comparing the prior tenant's annual base rent in the final year of the prior lease to the executed tenant's annual base rent in the first year of the executed lease. Straight-Lined Leasing Spreads are calculated by comparing the prior tenant's average base rent over the prior lease term to the executed tenant's average base rent over the term of the executed lease. For both Cash and Straight-Lined Leasing Spreads, the reported calculation includes only comparable leases which are deals executed within one year of the date that the prior tenant vacated. Deals executed after one year of the date the prior tenant vacated, deals which are a combination of existing units, new leases at redevelopment properties, and deals for units vacant at the time of acquisition are considered non-comparable and excluded from the calculation.
Safe Harbor
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 the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact, including statements regarding the Company's projected operational and financial performance, strategy, prospects and plans, may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, general economic conditions, including inflation and interest rate volatility; local conditions such as the supply of, and demand for, retail real estate space in our geographic markets; the consistency with future results of assumptions based on past performance; the impact of e-commerce; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant and the impact of any such event on rental income from other tenants and our properties; our ability to enter into agreements to buy and sell properties on commercially reasonable terms and to satisfy closing conditions applicable to such sales; our ability to complete the spin-off of Curbline Properties in a timely manner or at all; our ability to secure equity or debt financing on commercially acceptable terms or at all; redevelopment and construction activities may not achieve a desired return on investment; impairment charges; valuation and risks relating to our joint venture investments; the termination of any joint venture arrangements or arrangements to manage real property; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions or natural disasters in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions or natural disasters; any change in strategy; the impact of pandemics and other public health crises; unauthorized access, use, theft or destruction of financial, operations or third party data maintained in our information systems or by third parties on our behalf; our ability to maintain REIT status; and the finalization of the financial statements for the period ended March 31, 2024. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's most recent reports on Forms 10-K and 10-Q. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
SITE Centers Corp.
Income Statement: Consolidated Interests
in thousands, except per share
1Q24
1Q23
Revenues:
Rental income (1)
$119,592
$135,872
Other property revenues
1,029
961
120,621
136,833
Expenses:
Operating and maintenance
20,544
23,166
Real estate taxes
16,738
20,053
37,282
43,219
Net operating income (2)
83,339
93,614
Other income (expense):
JV and other fee income
1,470
1,859
Interest expense
(18,913)
(19,923)
Depreciation and amortization
(43,150)
(54,016)
General and administrative
(11,072)
(10,645)
Other income (expense), net (3)
(105)
(687)
Impairment charges
(66,600)
0
(Loss) income before earnings from JVs and other
(55,031)
10,202
Equity in net income of JVs
17
1,359
Gain on sale and change in control of interests
0
3,749
Gain on disposition of real estate, net
31,714
205
Tax expense
(252)
(213)
Net (loss) income
(23,552)
15,302
Non-controlling interests
0
(18)
Net (loss) income SITE Centers
(23,552)
15,284
Preferred dividends
(2,789)
(2,789)
Net (loss) income Common Shareholders
($26,341)
$12,495
Weighted average shares – Basic – EPS
209,419
209,971
Assumed conversion of diluted securities
0
436
Weighted average shares – Diluted – EPS
209,419
210,407
(Loss) earnings per common share – Basic
$(0.13)
$0.06
(Loss) earnings per common share – Diluted
$(0.13)
$0.06
(1)
Rental income:
Minimum rents
$76,062
$88,973
Ground lease minimum rents
5,444
6,469
Straight-line rent, net
680
676
Amortization of (above)/below-market rent, net
1,152
1,185
Percentage and overage rent
1,927
1,151
Recoveries
29,682
35,316
Uncollectible revenue
355
233
Ancillary and other rental income
1,236
1,757
Lease termination fees
3,054
112
(2)
Includes NOI from wholly-owned assets sold in 1Q24
937
N/A
(3)
Interest income (fees), net
7,294
(23)
Transaction costs
(3,398)
(664)
Debt extinguishment costs
(665)
0
Gain on debt retirement
760
0
Loss on equity derivative instruments
(4,096)
0
SITE Centers Corp. Reconciliation: Net Income to FFO and Operating FFO and Other Financial Information
in thousands, except per share
1Q24
1Q23
Net (loss) income attributable to Common Shareholders
($26,341)
$12,495
Depreciation and amortization of real estate
41,819
52,717
Equity in net income of JVs
(17)
(1,359)
JVs' FFO
1,584
1,982
Non-controlling interests
0
18
Impairment of real estate
66,600
0
Gain on sale and change in control of interests
0
(3,749)
Gain on disposition of real estate, net
(31,714)
(205)
FFO attributable to Common Shareholders
$51,931
$61,899
Gain on debt retirement
(760)
0
Loss on equity derivative instruments
4,096
0
Transaction, debt extinguishment and other (at SITE's share)
4,139
829
Other charges
395
0
Total non-operating items, net
7,870
829
Operating FFO attributable to Common Shareholders
$59,801
$62,728
Weighted average shares & units – Basic: FFO & OFFO
209,419
210,112
Assumed conversion of dilutive securities
802
436
Weighted average shares & units – Diluted: FFO & OFFO
210,221
210,548
FFO per share – Basic
$0.25
$0.29
FFO per share – Diluted
$0.25
$0.29
Operating FFO per share – Basic
$0.29
$0.30
Operating FFO per share – Diluted
$0.28
$0.30
Common stock dividends declared, per share
$0.13
$0.13
Capital expenditures (SITE Centers share):
Redevelopment costs
3,053
4,410
Maintenance capital expenditures
1,286
2,146
Tenant allowances and landlord work
12,035
14,721
Leasing commissions
1,959
2,328
Construction administrative costs (capitalized)
961
796
Certain non-cash items (SITE Centers share):
Straight-line rent
714
696
Straight-line fixed CAM
63
75
Amortization of below-market rent/(above), net
1,269
1,269
Straight-line ground rent expense
(5)
(64)
Debt fair value and loan cost amortization
(1,411)
(1,228)
Capitalized interest expense
293
286
Stock compensation expense
(1,888)
(1,620)
Non-real estate depreciation expense
(1,333)
(1,303)
SITE Centers Corp.
Balance Sheet: Consolidated Interests
$ in thousands
At Period End
1Q24
4Q23
Assets:
Land
$906,727
$930,540
Buildings
3,185,457
3,311,368
Fixtures and tenant improvements
542,875
537,872
4,635,059
4,779,780
Depreciation
(1,575,920)
(1,570,377)
3,059,139
3,209,403
Construction in progress and land
54,148
51,379
Real estate, net
3,113,287
3,260,782
Investments in and advances to JVs
38,607
39,372
Cash
551,285
551,968
Restricted cash
5,433
17,063
Receivables and straight-line (1)
57,159
65,623
Intangible assets, net (2)
79,015
86,363
Other assets, net
47,792
40,180
Total Assets
3,892,578
4,061,351
Liabilities and Equity:
Revolving credit facilities
0
0
Unsecured debt
1,242,191
1,303,243
Unsecured term loan
198,940
198,856
Secured debt
124,100
124,176
1,565,231
1,626,275
Dividends payable
30,161
63,806
Other liabilities (3)
173,242
195,727
Total Liabilities
1,768,634
1,885,808
Preferred shares
175,000
175,000
Common shares
21,437
21,437
Paid-in capital
5,971,666
5,974,904
Distributions in excess of net income
(3,988,449)
(3,934,736)
Deferred compensation
5,052
5,167
Accumulated comprehensive income
8,723
6,121
Common shares in treasury at cost
(69,485)
(72,350)
Total Equity
2,123,944
2,175,543
Total Liabilities and Equity
$3,892,578
$4,061,351
(1)
SL rents (including fixed CAM), net
$31,395
$31,206
(2)
Operating lease right of use assets
17,107
17,373
(3)
Operating lease liabilities
36,847
37,108
Below-market leases, net
43,241
46,096
SITE Centers Corp.
Reconciliation of Net Income Attributable to SITE to Same Store NOI
$ in thousands
1Q24
1Q23
1Q24
1Q23
SITE Centers at 100%
At SITE Centers Share (Non-GAAP)
GAAP Reconciliation:
Net (loss) income attributable to SITE Centers
($23,552)
$15,284
($23,552)
$15,284
Fee income
(1,470)
(1,859)
(1,470)
(1,859)
Interest expense
18,913
19,923
18,913
19,923
Depreciation and amortization
43,150
54,016
43,150
54,016
General and administrative
11,072
10,645
11,072
10,645
Other expense (income), net
105
687
105
687
Impairment charges
66,600
0
66,600
0
Equity in net income of joint ventures
(17)
(1,359)
(17)
(1,359)
Tax expense
252
213
252
213
Gain on sale and change in control of interests
0
(3,749)
0
(3,749)
Gain on disposition of real estate, net
(31,714)
(205)
(31,714)
(205)
Income from non-controlling interests
0
18
0
18
Consolidated NOI
83,339
93,614
83,339
93,614
Less: Non-Same Store NOI adjustments
(6,684)
(18,137)
Total Consolidated SSNOI
$76,655
$75,477
Consolidated SSNOI % Change
1.6%
Net (loss) income from unconsolidated joint ventures
(1,155)
4,767
(176)
1,004
Interest expense
8,271
7,041
1,832
1,587
Depreciation and amortization
7,145
9,062
1,727
2,091
Other expense (income), net
1,896
2,560
441
574
Loss (gain) on disposition of real estate, net
29
(5,304)
6
(1,062)
Unconsolidated NOI
$16,186
$18,126
3,830
4,194
Less: Non-Same Store NOI adjustments
(164)
(547)
Total Unconsolidated SSNOI at SITE share
$3,666
$3,647
Unconsolidated SSNOI % Change
0.5%
SSNOI % Change at SITE Share
1.5%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430566713/en/
Conor Fennerty, EVP and Chief Financial Officer 216-755-5500
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