InvenTrust Properties Corp. Q1 FY2025 earnings call

Strategic Focus

• Concentrated on necessity-based open retail centers in Sunbelt markets, showing resilient performance despite economic challenges.

Financial Performance

• Same property NOI grew 6.1% in Q1; core FFO per diluted share up 4.5%. NAREIT FFO for the quarter was $37.2 million or $0.48 per diluted share, up 6.7% year-over-year.

Capital Allocation

• Evaluating asset sales and capital recycling for portfolio optimization, including planned exit from California. Acquired Plaza Escondida and Carmel Village; pipeline stands at $1.5 billion to $2 billion.

Balance Sheet

• Remains one of the lowest leveraged strip center REITs; net leverage ratio 23.4%, net debt to adjusted EBITDA 4.1 times; weighted average interest rate 4%, weighted average debt maturity 3.1 years, all debt fixed.

InvenTrust had a strong start in 2025 with same property NOI growing 6.1% for the first quarter. Core FFO per diluted share grew 4.5% compared to the same period last year. The Sunbelt Region, where 97% of net operating income is generated, remains a top performer. Portfolio is highly leased with small shop lease occupancy at a record high. Absolute same property NOI for Q1 was $47.3 million, and core FFO was $0.46 per share, with revenue contribution dominated by the Sunbelt Region.

Same Property NOI

• Reaffirmed full year same property NOI growth guidance range of 3.5% to 4.5%, with bad debt reserve at 75 to 100 basis points of total revenue.

NAREIT FFO and Core FFO

• NAREIT FFO guidance range $1.83 to $1.89 per share (4.5% growth midpoint vs 2024); core FFO guidance $1.79 to $1.83 per share (4.6% growth midpoint).

Net Acquisition

• Net acquisition assumptions remain at $100 million for the year, reflecting potential acquisition and disposition activity.

• Uncertainty from pending tariffs and their impact on consumers and tenants.
• Potential bad debt impact later in the year as announced bankruptcies take effect.
• Transaction market ebbs and flows, and timing risks related to capital recycling from California assets.

Q: On the transaction markets, any changes in bidders for California assets or pricing expectations?

A: Transaction market is healthy, competitive, and they feel good about capital recycling timing, with net investment activity assumptions fully contemplating California asset sales and replacements by year-end.

Q: Have you noticed a difference in conversations with larger tenants vs smaller local retailers in the last 30 days?

A: Not yet, but property management and leasing teams regularly communicate with tenants, and no significant bifurcation in conversations so far, though they monitor for potential concerns.