Curbline Properties Corp. Q1 FY2025 earnings call

• Successfully completed a spin-off almost 7 months ago and performed well as a standalone public company.
• Growth driven by capital efficiency of convenience assets, large addressable market, and strong balance sheet.
• Acquisitions: Exceeded initial guidance with over $475 million in acquisitions in the last 9 months, and have a pipeline of over $500 million.
• Operating metrics: Strong leasing volume, high lease rate (96% in Q1), same-property NOI up 2.5% in Q1, and CapEx as a percentage of NOI under 5%.
• Balance sheet: Net cash position at quarter end with $594 million cash and $1 billion liquidity.

Curbline Properties focuses on the convenience property type. They own over 3.3 million square feet of inventory. In the first quarter, they acquired 11 properties for just over $124 million. Capital efficiency is high, with CapEx as a percentage of NOI under 5% in Q1. Revenue contribution is primarily from their convenience property portfolio, with strong leasing volume and high tenant retention.

• Raised FFO guidance to a range between $0.99 and $1.02 per share.
• Expect to fund $500 million of acquisitions in 2025, with funding split 50-50 between debt and cash.
• Same-property NOI forecasted to grow approximately 2.8% at the midpoint in 2025.
• G&A of roughly $32 million, including fees paid to SITE Centers as part of the shared services agreement.

• Macro-economic factors could impact leasing demand and space type.
• Potential widening of bid-ask spread in capital markets.
• Possible credit events or bankruptcies, though none in the last year plus.
• Dependence on successful deal flow and diligence for acquisitions.

Q: On acquisitions, thoughts on rebuilding war chest and funding sources?

A: Conor says they'll use 50-50 cash and debt, with options in bank, bond, and insurance markets.

Q: Pipeline breakdown and deal flow change since April?

A: David says pipeline is high, closing rate is high, sellers are driven by life events, not market timing.

Q: Portfolio performance in recession vs other strip centers?

A: David says small fungible spaces have quicker and cheaper reconfiguring, lower payback period.

Q: Cash rent spreads and bumps?

A: David says typical bumps are 3%, with some new deals at 10% every 5%.

Q: Competition in acquisitions?

A: David says competition is primarily local private investors, with some institutional capital in private funds.