InvenTrust Properties Corp. Q4 FY2024 earnings call

• Strategy focuses on maximizing cash flow by optimizing rents, enhancing occupancy, and refining merchandising mix.
• 87% of NOI from grocery-anchored assets; these tenants drive foot traffic.
• Ended 2024 with 97.4% portfolio leased occupancy, a 390 basis point increase from 2021. Anchor space leased occupancy at 99.8%, small shop at 93.3%.
• Signed 210 leases totaling 1.3 million square feet in 2024, including notable tenants like Skechers, Snooze, etc.
• 94% retention rate in 2024; 90% of renewals have rent escalators of 3% or higher.
• Addressed retail news: store closings/bankruptcies are part of retail cycle, portfolio has minimal exposure to affected retailers.
• Acknowledged Southern California wildfires, employees safe, properties unaffected.

InvenTrust Properties Corp.'s total portfolio ABR ended 2024 at $20.07 per square foot, reflecting a 3% increase compared to 2023. 87% of NOI comes from grocery-anchored assets. Blended comparable leasing spreads were 11.3% in 2024, with new lease spreads at 16.6% and renewals at 10.6%. Retention rates stood at 94% in 2024. Portfolio occupancy ended 2024 at 97.4%, up from 93.0% in 2021, with anchor space leased occupancy at 99.8% and small shop lease occupancy at 93.3%.

• Net acquisition assumption for 2025 is $100 million, a 4.5% increase.
• Same-store NOI range 3.5% to 4.5%.
• Gross acquisition figure likely higher depending on disposition activity in California.
• Retention rate expected to be around 90% in 2025.
• Lease spreads expected to be comparable to 2024 levels.

• Store closings/bankruptcies in retail, though below historical averages.
• Potential disruptions from distressed retailers accounted for in guidance.
• Competitive environment in acquisitions.

Q: Based on previous acquisitions, that $100 million net investment figure seemed a bit conservative. Is this meant to be what you're close to closing? Does it assume acceleration in dispositions?

A: DJ Busch says it's a net acquisition assumption, gross number likely higher depending on California disposition success.

Q: Thoughts on the balance sheet and using it to grow faster?

A: DJ Busch mentions equity raise last year and plans to use same recipe, California portfolio strategic, balance sheet capacity to lever up.

Q: Appetite for California assets? Who are potential buyers and cap rates?

A: DJ Busch says California has wide canvas of buyers, demand strong but no executions yet, goal is to redeploy proceeds accretively.

Q: 23 tenants missed option periods last quarter, impact on same-store NOI?

A: Mike Phillips says uncollectible lease income is a big driver of same-store NOI range.

Q: Pricing and growth profile of properties like Nexon Square compared to traditional grocery-anchored?

A: DJ Busch says Nexon Square is a market-driven complement with different growth and risk profiles, risk-adjusted returns considered.