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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 | |
---|---|---|---|---|---|---|---|---|
-0.05 | -0.36% | 13.99 | 14.23 | 13.94 | 14.14 | 1,767,894 | 21:07:25 |
SITE Centers Corp. (NYSE: SITC) today announced operating results for the quarter ended September 30, 2020.
“We made continued progress in terms of store openings and collections in the third quarter and we are encouraged by improving leasing activity and volume,” commented David R. Lukes, President and Chief Executive Officer. “With the closing of the first of the two Blackstone joint venture transactions earlier this month, we added to our liquidity position and the Company remains well positioned with no material near-term maturities and no material capital commitments.”
Results for the Quarter
Significant Third Quarter and Recent Activity
Key Quarterly Operating Results
COVID-19 Update
Second Quarter 2020
July 2020
August 2020
September 2020
October 2020
As of October 23, 2020
70%
80%
82%
90%
90%
As of July 24, 2020
64%
71%
N/A
N/A
N/A
BRE DDR Joint Ventures
On July 14, 2020, the Company entered into agreements with affiliates of Blackstone to terminate the BRE DDR III and BRE DDR IV joint ventures. As described above, the BRE DDR IV transaction closed on October 15, 2020. BRE DDR III is expected to close by year end. At the closing of the BRE DDR III transaction, the Company will transfer its common and preferred equity interests in BRE DDR III to an affiliate of Blackstone in exchange for (i) BRE DDR III’s interests in White Oak Village and Midtowne Park, (ii) 50% of the unrestricted cash then held by BRE DDR III (BRE DDR III’s unrestricted cash balance was $18.5 million as of September 30, 2020), and (iii) $1.9 million in cash. At closing, the White Oak Village and Midtowne Park properties will continue to be subject to existing mortgage loans which had an aggregate outstanding principal balance of $50.0 million as of September 30, 2020. This transaction is expected to close in the fourth quarter of 2020 as soon as all applicable conditions have been satisfied including receipt of lender consents.
BRE DDR IV Acquisition Properties (Closed October 15, 2020)
Center
MSA
Location
ST
SITE
Own %
JV
Owned
GLA
Total
GLA
ABR
PSF
Concourse Village
Miami-Fort Lauderdale-West Palm Beach, FL
Jupiter
FL
5%
BREDDR IV
134
134
$17.40
Millenia Crossing
Orlando-Kissimmee-Sanford, FL
Orlando
FL
5%
BREDDR IV
100
100
$26.30
Echelon Village Plaza
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Voorhees
NJ
0%
BREDDR IV
89
89
$20.58
The Hub
New York-Newark-Jersey City, NY-NJ-PA
Hempstead
NY
5%
BREDDR IV
249
249
$12.42
Southmont Plaza
Allentown-Bethlehem-Easton, PA-NJ
Easton
PA
5%
BREDDR IV
251
386
$16.25
Ashbridge Square
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Downingtown
PA
5%
BREDDR IV
386
386
$9.47
Larkin's Corner
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Boothwyn
PA
0%
BREDDR IV
225
225
$9.78
BRE DDR III Acquisition Properties
Center
MSA
Location
ST
SITE
Own %
JV
Owned
GLA
Total
GLA
ABR
PSF
Midtowne Park
Greenville-Anderson-Mauldin, SC
Anderson
SC
5%
BREDDR III
167
174
$9.83
White Oak Village
Richmond, VA
Richmond
VA
5%
BREDDR III
432
956
$15.99
About SITE Centers Corp.
SITE Centers is an owner and manager of open-air shopping centers that provide a highly-compelling shopping experience and merchandise mix for retail partners and consumers. 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 https://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 8:30 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 9120571 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’ web site 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 10148482 through November 27, 2020. Copies of the Company’s Supplemental package and earnings slide presentation are available on the Company’s website.
Non-GAAP Measures
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, including reserve adjustments of preferred equity interests, (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. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains 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 net operating income (“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 (including 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 quarter comparisons). In addition, SSNOI is presented both including and excluding activity associated with development and major 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 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.
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 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, the impact of the COVID-19 pandemic on the Company’s ability to manage its properties and finance its operations and on tenants’ ability to operate their businesses, generate sales and meet their financial obligations, including the obligation to pay ongoing and deferred rents; the Company’s ability to pay dividends; local conditions such as the supply of, and demand for, retail real estate space in the area; 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; redevelopment and construction activities may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; impairment charges; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements and the Company’s ability to satisfy conditions to the completion of these arrangements; valuation and risks relating to our joint venture and preferred equity investments; the termination of any joint venture arrangements or arrangements to manage real property and the ability to satisfy conditions of such terminations; 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 and our ability to maintain REIT status; and the finalization of the financial statements for the period ended September 30, 2020. 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 Form 10-K and Form 10-Q. The impacts of the COVID-19 pandemic may also exacerbate the risks described therein, any of which could have a material effect on the Company. 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
3Q20
3Q19
9M20
9M19
Revenues:
Rental income (1)
$95,874
$108,060
$306,482
$332,555
Other property revenues
70
759
1,804
3,404
Business interruption income
0
885
0
885
95,944
109,704
308,286
336,844
Expenses:
Operating and maintenance
15,775
16,738
50,774
54,322
Real estate taxes
16,542
16,721
51,547
52,262
32,317
33,459
102,321
106,584
Net operating income
63,627
76,245
205,965
230,260
Other income (expense):
Fee income (2)
9,610
12,821
34,149
45,360
Interest income
3,445
4,616
10,480
13,658
Interest expense
(18,089)
(21,160)
(58,487)
(63,973)
Depreciation and amortization
(41,148)
(40,732)
(125,014)
(123,400)
General and administrative (3)
(13,664)
(15,304)
(38,542)
(44,348)
Other expense, net (4)
(186)
(322)
(18,207)
(254)
Impairment charges
0
(2,750)
0
(3,370)
Income before earnings from JVs and other
3,595
13,414
10,344
53,933
Equity in net income of JVs
250
2,612
908
5,446
Adjustment (reserve) of preferred equity interests
3,542
(6,373)
(19,393)
(12,106)
Gain on sale of joint venture interest
82
0
45,635
0
Gain on disposition of real estate, net
218
14,497
993
31,087
Tax expense
(284)
(249)
(859)
(827)
Net income
7,403
23,901
37,628
77,533
Non-controlling interests
(116)
(271)
(621)
(836)
Net income SITE Centers
7,287
23,630
37,007
76,697
Preferred dividends
(5,133)
(8,382)
(15,399)
(25,148)
Net income Common Shareholders
$2,154
$15,248
$21,608
$51,549
Weighted average shares – Basic – EPS
193,203
180,567
193,366
180,555
Assumed conversion of diluted securities
162
940
0
1,064
Weighted average shares – Basic & Diluted – EPS
193,365
181,507
193,366
181,619
Earnings per common share – Basic
$0.01
$0.08
$0.11
$0.28
Earnings per common share – Diluted
$0.01
$0.08
$0.11
$0.28
(1)
Rental income:
Minimum rents
$76,735
$75,293
$228,416
$225,131
Ground lease minimum rents
5,418
5,018
16,319
15,059
Recoveries
25,833
26,018
80,371
81,466
Uncollectible revenue
(14,188)
(505)
(27,918)
(178)
Percentage and overage rent
806
553
1,770
2,839
Ancillary and other rental income
1,194
1,295
4,260
5,233
Lease termination fees
76
388
3,264
3,005
(2)
Fee Income:
JV and other fees
4,037
6,783
15,416
21,905
RVI fees
4,717
5,492
16,111
18,495
RVI disposition fees
856
546
2,622
3,160
RVI refinancing fee
0
0
0
1,800
(3)
Mark-to-market adjustment (PRSUs)
(289)
(1,418)
1,617
(2,818)
Executive separation charge
(1,650)
0
(1,650)
0
(4)
Other income (expense), net
Transaction and other expense, net
(186)
0
(1,021)
164
Debt extinguishment costs, net
0
(322)
(17,186)
(418)
SITE Centers Corp.
Reconciliation: Net Income to FFO and Operating FFO
and Other Financial Information
in thousands, except per share
3Q20
3Q19
9M20
9M19
Net income attributable to Common Shareholders
$2,154
$15,248
$21,608
$51,549
Depreciation and amortization of real estate
39,812
39,329
120,889
118,924
Equity in net income of JVs
(250)
(2,612)
(908)
(5,446)
JVs' FFO
4,388
8,498
14,529
24,169
Non-controlling interests
0
28
28
84
Impairment of real estate
0
2,750
0
3,370
(Adjustment) reserve of preferred equity interests
(3,542)
6,373
19,393
12,106
Gain on sale of joint venture interest
(82)
0
(45,635)
0
Gain on disposition of real estate, net
(218)
(14,497)
(993)
(31,087)
FFO attributable to Common Shareholders
$42,262
$55,117
$128,911
$173,669
RVI disposition and refinancing fees
(856)
(546)
(2,622)
(4,960)
Mark-to-market adjustment (PRSUs)
289
1,418
(1,617)
2,818
Hurricane property income, net
0
(885)
0
(885)
Executive separation charge
1,650
0
1,650
0
Debt extinguishment, transaction, net
186
322
18,207
443
Joint ventures - debt extinguishment, other
0
(52)
42
(6)
Total non-operating items, net
1,269
257
15,660
(2,590)
Operating FFO attributable to Common Shareholders
$43,531
$55,374
$144,571
$171,079
Weighted average shares & units – Basic: FFO & OFFO
193,343
180,708
193,507
180,697
Assumed conversion of dilutive securities
21
940
0
1,064
Weighted average shares & units – Diluted: FFO & OFFO
193,364
181,648
193,507
181,761
FFO per share – Basic
$0.22
$0.31
$0.67
$0.96
FFO per share – Diluted
$0.22
$0.30
$0.67
$0.96
Operating FFO per share – Basic
$0.23
$0.31
$0.75
$0.95
Operating FFO per share – Diluted
$0.23
$0.30
$0.75
$0.94
Common stock dividends declared, per share
$0.00
$0.20
$0.20
$0.60
Capital expenditures (SITE Centers share):
Development and redevelopment costs
3,289
20,207
17,431
41,594
Maintenance capital expenditures
3,394
3,846
10,989
9,673
Tenant allowances and landlord work
2,655
8,600
18,246
23,606
Leasing commissions
786
1,542
2,412
3,625
Construction administrative costs (capitalized)
715
924
2,195
2,484
Certain non-cash items (SITE Centers share):
Straight-line rent
739
566
(390)
1398
Straight-line fixed CAM
155
196
450
581
Amortization of (above)/below-market rent, net
1,230
1,058
3,780
3,328
Straight-line rent expense
(45)
(186)
(167)
(1,020)
Debt fair value and loan cost amortization
(1,233)
(1,166)
(3,587)
(3,429)
Capitalized interest expense
234
400
792
951
Stock compensation expense
(2,710)
(3,628)
(5,088)
(9,095)
Non-real estate depreciation expense
(1,270)
(1,352)
(3,938)
(4,282)
SITE Centers Corp.
Balance Sheet: Consolidated Interests
$ in thousands
At Period End
3Q20
4Q19
Assets:
Land
$881,543
$881,397
Buildings
3,312,645
3,277,440
Fixtures and tenant improvements
501,431
491,312
4,695,619
4,650,149
Depreciation
(1,393,578)
(1,289,148)
3,302,041
3,361,001
Construction in progress and land
52,042
59,663
Real estate, net
3,354,083
3,420,664
Investments in and advances to JVs
79,119
181,906
Investment in and advances to affiliate (1)
190,770
190,105
Receivable – preferred equity interests, net
96,128
112,589
Cash
57,224
16,080
Restricted cash
289
3,053
Notes receivable
0
7,541
Receivables and straight-line (2)
79,208
60,594
Intangible assets, net (3)
67,766
79,813
Other assets, net
20,275
21,277
Total Assets
3,944,862
4,093,622
Liabilities and Equity:
Revolving credit facilities
175,000
5,000
Unsecured debt
1,449,075
1,647,963
Unsecured term loan
99,591
99,460
Secured debt
53,316
94,874
1,776,982
1,847,297
Dividends payable
5,133
44,036
Other liabilities (4)
203,035
220,811
Total Liabilities
1,985,150
2,112,144
Preferred shares
325,000
325,000
Common shares
19,400
19,382
Paid-in capital
5,706,225
5,700,400
Distributions in excess of net income
(4,083,405)
(4,066,099)
Deferred compensation
5,442
7,929
Other comprehensive income
(3,728)
(491)
Common shares in treasury at cost
(12,463)
(7,707)
Non-controlling interests
3,241
3,064
Total Equity
1,959,712
1,981,478
Total Liabilities and Equity
$3,944,862
$4,093,622
(1)
Preferred investment in RVI
$190,000
$190,000
Receivable from RVI
770
105
(2)
SL rents (including fixed CAM), net
32,021
31,909
(3)
Operating lease right of use assets
21,024
$21,792
(4)
Operating lease liabilities
40,174
40,725
Below-market leases, net
43,205
46,961
SITE Centers Corp.
Reconciliation of Net Income Attributable to SITE to Same Store NOI
$ in thousands
3Q20
3Q19
3Q20
3Q19
SITE Centers at 100%
At SITE Centers Share
(Non-GAAP)
GAAP Reconciliation:
Net income attributable to SITE Centers
$7,287
$23,630
$7,287
$23,630
Fee income
(9,610)
(12,821)
(9,610)
(12,821)
Interest income
(3,445)
(4,616)
(3,445)
(4,616)
Interest expense
18,089
21,160
18,089
21,160
Depreciation and amortization
41,148
40,732
41,148
40,732
General and administrative
13,664
15,304
13,664
15,304
Other expense, net
186
322
186
322
Impairment charges
0
2,750
0
2,750
Equity in net income of joint ventures
(250)
(2,612)
(250)
(2,612)
(Adjustment) reserve of preferred equity interests
(3,542)
6,373
(3,542)
6,373
Tax expense
284
249
284
249
Gain on sale of joint venture interest
(82)
0
(82)
0
Gain on disposition of real estate, net
(218)
(14,497)
(218)
(14,497)
Income from non-controlling interests
116
271
116
271
Consolidated NOI
63,627
76,245
63,627
76,245
SITE Centers' consolidated JV
0
0
(320)
(435)
Consolidated NOI, net of non-controlling interests
63,627
76,245
63,307
75,810
Net (loss) income from unconsolidated joint ventures
(4,748)
6,027
59
2,331
Interest expense
14,700
22,530
2,937
3,918
Depreciation and amortization
23,901
36,867
4,250
6,024
Impairment charges
0
0
0
0
Preferred share expense
4,626
5,544
231
277
Other expense, net
3,246
5,017
694
966
(Gain) loss on disposition of real estate, net
(319)
440
(43)
(10)
Unconsolidated NOI
$41,406
$76,425
8,128
13,506
Total Consolidated + Unconsolidated NOI
71,435
89,316
Less: Non-Same Store NOI adjustments
(1,699)
(5,788)
Total SSNOI including redevelopment
69,736
83,528
Less: Redevelopment Same Store NOI adjustments
(5,294)
(5,155)
Total SSNOI excluding redevelopment
$64,442
$78,373
SSNOI % Change including redevelopment
(16.5%)
SSNOI % Change excluding redevelopment
(17.8%)
SITE Centers Corp.
Reconciliation of Net Income Attributable to SITE to Same Store NOI
$ in thousands
9M20
9M19
9M20
9M19
SITE Centers at 100%
At SITE Centers Share
(Non-GAAP)
GAAP Reconciliation:
Net income attributable to SITE Centers
$37,007
$76,697
$37,007
$76,697
Fee income
(34,149)
(45,360)
(34,149)
(45,360)
Interest income
(10,480)
(13,658)
(10,480)
(13,658)
Interest expense
58,487
63,973
58,487
63,973
Depreciation and amortization
125,014
123,400
125,014
123,400
General and administrative
38,542
44,348
38,542
44,348
Other expense, net
18,207
254
18,207
254
Impairment charges
0
3,370
0
3,370
Equity in net income of joint ventures
(908)
(5,446)
(908)
(5,446)
Reserve of preferred equity interests
19,393
12,106
19,393
12,106
Tax expense
859
827
859
827
Gain on sale of joint venture interest
(45,635)
0
(45,635)
0
Gain on disposition of real estate, net
(993)
(31,087)
(993)
(31,087)
Income from non-controlling interests
621
836
621
836
Consolidated NOI
205,965
230,260
205,965
230,260
SITE Centers' consolidated JV
0
0
(1,200)
(1,314)
Consolidated NOI, net of non-controlling interests
205,965
230,260
204,765
228,946
Net (loss) income from unconsolidated joint ventures
(36,455)
13,846
366
4,676
Interest expense
47,555
73,472
9,251
12,742
Depreciation and amortization
77,580
113,340
13,665
18,195
Impairment charges
33,240
12,267
1,890
2,453
Preferred share expense
13,710
16,487
685
824
Other expense, net
10,844
16,358
2,250
2,988
(Gain) loss on disposition of real estate, net
(9,229)
(15,205)
(1,778)
1,515
Unconsolidated NOI
$137,245
$230,565
26,329
43,393
Total Consolidated + Unconsolidated NOI
231,094
272,339
Less: Non-Same Store NOI adjustments
(7,098)
(21,620)
Total SSNOI including redevelopment
223,996
250,719
Less: Redevelopment Same Store NOI adjustments
(15,791)
(16,157)
Total SSNOI excluding redevelopment
$208,205
$234,562
SSNOI % Change including redevelopment
(10.7%)
SSNOI % Change excluding redevelopment
(11.2%)
View source version on businesswire.com: https://www.businesswire.com/news/home/20201027005142/en/
Conor Fennerty, EVP and Chief Financial Officer 216-755-5500
1 Year SITE Centers Chart |
1 Month SITE Centers Chart |
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