Curbline Properties Corp. Q2 FY2025 earnings call

• The last 4 months have been active with $415 million of property acquisitions in Q2 and Q3 to date, highest quarterly new leasing volume, and $300 million of debt capital raised. • Capital efficiency of convenience properties is superior; CapEx as % of NOI was ~7% in Q2, retaining cash. • Strong leasing volume in Q2: nearly 50,000 sq ft new leases signed, lease rate up to 96.1% sequentially. • Since spin-off, acquired over $750 million of assets, with acquisition volume over $100 million per quarter for 5 straight quarters. • Focus on affluent markets like Houston, Chicago, Phoenix, Atlanta, and new submarkets like Dallas and NY Metro. • Balance sheet strength: $430 million cash and over $1 billion liquidity at quarter end.

Curbline Properties focuses on convenience properties. In the second quarter, the company acquired 19 properties for $155 million via 17 separate transactions. Year-to-date, it has acquired over $750 million of assets. CapEx as a percentage of NOI for Curbline was just over 7% in the second quarter, leading to almost $25 million of retained cash before distributions. Leasing volume in the second quarter was strong, with almost 50,000 square feet of new leases signed, the highest since tracking began.

• Raised FFO guidance to a range of $1 to $1.03 per share, driven by better-than-projected operations and acquisition pacing. • Expect ~$700 million of full-year investments, funded roughly 50-50 with debt and cash. • CapEx as % of NOI to remain below 10% for full year, though Q3 expected to be higher due to timing. • Expected to end the year with over $300 million of cash on hand, debt-to-EBITDA ratio <1x, providing dry powder for acquisitions.

• Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from forward-looking statements.

Q: Ronald kamden with Morgan Stanley asked about acquisitions pace and pipeline, including cap rate trends.

A: David Lukes said cap rates have not changed dramatically, blending to ~6% year-to-date, with about half the pipeline being off-market.

Q: Craig Mailman with Citigroup asked about portfolio process and market entry.

A: David Lukes said they don't have a disposition pipeline, and on market entry, they're open to buying properties in markets like NY and Dallas with plans to grow.

Q: Todd Thomas of KeyBanc Capital Markets asked about acquisitions cap rates and CapEx.

A: David Lukes discussed cap rate differences due to vacancy and Conor Fennerty talked about CapEx needs.

Q: Alexander Goldfarb with Piper Sandler asked about market acquisition comparison and impact of sister company wind-down.

A: David Lukes and Conor Fennerty discussed market acquisition criteria and no significant impact from sister company wind-down.

Q: Unidentified Analyst asked about portfolio transactions and vacancy pickup.

A: David Lukes and Conor Fennerty talked about portfolio selection and minimal vacancy impact.

Q: Michael Mueller with JPMorgan asked about private placement timing and portfolio assets.

A: David Lukes and Conor Fennerty provided details on private placement timing and portfolio asset selection.

Q: Paulina Rojas with Green Street asked about OCR and Midwest market presence.

A: David Lukes discussed OCR usage and openness to Midwest market presence.

Q: Kenneth Billingsley with Compass Point asked about new leases vs renewals.

A: Conor Fennerty explained new leases being national with longer terms and renewals being shorter terms.