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Leased Occupancy: 96.4%, a new high watermark for the portfolio.
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Same-Property NOI: $44.8 million for the quarter, a 2.6% increase year-over-year.
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Year-to-Date Same-Property NOI: $82.6 million, a 3.3% increase over the first six months of 2023.
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NAREIT FFO: $60.9 million or $0.89 per diluted share for the first half of the year, a 6% increase over last year.
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Core FFO: $0.87 per share for the first six months, a 4.8% increase compared to the same period in 2023.
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Total Liquidity: $384 million, including $350 million of borrowing capacity on the revolving line of credit.
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Net Leverage Ratio: 20.5%.
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Net Debt to Adjusted EBITDA: 5.2 times on a trailing 12-month basis.
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Weighted Average Interest Rate: 4.3% with a weighted average maturity of 3.5 years.
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Annualized Dividend Payment: $0.91 per share, a 5% increase over last year.
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2024 Full Year Same-Property NOI Growth Guidance: Raised by 75 basis points at the midpoint, now expected to be 3.5% to 4.5%.
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NAREIT FFO Guidance: Increased to $1.73 to $1.77 per share.
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Core FFO Guidance: Raised to $1.69 to $1.73 per share.
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Total Portfolio ABR: $19.71, a 2.8% increase compared to 2023.
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Blended Comparable Leasing Spreads: 10.7% for the first six months of the year.
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Retention Rate: 92%.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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InvenTrust Properties Corp (NYSE:IVT) achieved a new high watermark for leased occupancy at 96.4%, showing strong recovery from previous tenant closures and bankruptcies.
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The company reported a 6% increase in NAREIT FFO for the first half of the year, indicating strong financial performance.
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InvenTrust’s strategy of focusing on open-air retail centers in the Sunbelt region is yielding positive results, with robust demand and sustainable cash flow growth.
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The company maintains a conservative balance sheet with a net leverage ratio of 20.5% and significant liquidity, providing flexibility for future growth opportunities.
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InvenTrust raised its 2024 full-year same-property NOI growth guidance, reflecting confidence in continued strong performance and leasing activity.
Negative Points
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Interest expense on variable rate debt slightly offset the financial gains, indicating potential vulnerability to interest rate fluctuations.
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Despite strong leasing activity, construction and build-out costs remain elevated, which could impact future profitability.
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The company remains cautious with net investment activity, reflecting a conservative approach amidst uncertain market conditions.
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There is a potential risk associated with the Kroger Albertsons merger, as three InvenTrust properties are on the divestment list, though closure risk is deemed small.
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The retail real estate environment remains competitive, requiring InvenTrust to be prudent and disciplined in underwriting new opportunities.
Q & A Highlights
Q: With the acquisitions you’ve completed to-date, you’re in line with your net acquisition guide for the year. Can you talk about what you’re seeing on both the acquisitions and the disposition front and the likelihood of you exceeding your ’24 guidance? A: Daniel Busch, President and CEO, explained that the $75 million net investment is a guidepost based on pipeline, cost of capital, and market conditions. The pipeline remains strong, and if opportunities arise, they may adjust their net investment activity guidance. On the disposition side, they are considering rotating out of assets in the Mid-Atlantic and West Coast regions.
Q: You funded Q2’s acquisitions with cash on hand. Can you remind us how you’re thinking about your equity today around $28 a share as a means to fund further acquisitions? A: Daniel Busch noted that equity is always considered as a source of capital. While the sector has seen a positive run, any use of equity would need to be accretive and value additive to shareholders.
Q: You raised SS NOI guidance to 3.5% to 4.5%. The new range implies we’ll see some acceleration of growth into the back half of the year. Can you discuss what’s behind that acceleration? A: Christy David, COO, stated that the acceleration is due to additional rent coming online from completed leasing activities and continued expense reductions across the portfolio.
Q: Can you quantify the timing of when the signed not open pipeline will come online through the rest of the year and into ’25? How much room does shop occupancy have to run from these current levels? A: Michael Phillips, CFO, indicated that about 60% of the signed not open pipeline will come online by the end of this year, with 100% by the end of next year. They expect shop occupancy to reach an all-time high by year-end, with about 100 basis points to run.
Q: How committed are you to your Sunbelt strategy? Would you consider acquisitions outside the Sunbelt if it offered the opportunity to scale up your business? A: Daniel Busch emphasized their commitment to the Sunbelt strategy, which differentiates them in the market. While they are open to scaling the business in a value-accretive way, any deviation from the Sunbelt focus would need to be compelling and resonate with shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.