InvenTrust Properties Corp. Q2 FY2026 earnings call

Core Portfolio & Operating Performance

• Solid Q2 2026 results delivered, with accelerating same property NOI growth, strong leasing activity, high tenant retention, and ongoing conversion of signed-but-unopened pipeline to occupied, cash-generating space
• Retail demand is concentrated in well-located open-air necessity-based centers, and limited new supply creates a favorable backdrop for long-term rent growth
• Leasing activity remained healthy: 76 leases covering 464,000 square feet executed in the quarter; national tenants continue multi-year expansion plans but face constrained supply of quality space in desirable trade areas
• The portfolio has only six vacant large-format spaces, most tied to ongoing redevelopment, disposition, or active leasing; a prominent national retailer has already signed a letter of intent for the vacant Painted Tree anchor space
• Renewal retention drives attractive internal growth: retaining productive tenants with limited incremental capital often delivers stronger all-in economics than pursuing higher headline spreads that require downtime and additional leasing costs
• A key large tenant signing with Publix at the Plantation Grove center in Orlando will support a future redevelopment of the center to replace the existing store with Publix's new prototype, with groundbreaking expected in 2026. 77% of signed-but-unopened annualized base rent is expected to commence by the end of 2026

External Growth Strategy

• Strong progress on external growth in H1 2026: six properties and one out parcel acquired for ~$290 million total, with strategic expansion into emerging complementary Sunbelt markets including Charleston, Greensboro, and Knoxville
• New target markets share desirable fundamentals: strong population growth, household formation, relative affordability, and high retailer demand, representing a natural disciplined extension of the company's existing strategy
• The acquisition pipeline remains active, with ~$2 billion of target opportunities under review at any time; the company hits target blended initial yields in the low 6% range and unlevered IRRs in the low to mid 7% range on completed acquisitions
• Recent quarter-end and post-quarter acquisitions include four assets totaling over $165 million: 3609 South (Charlotte, 100% leased unanchored strip), Western Plaza (Knoxville, grocery/fitness anchored community center), Sweetgrass Corner (Charleston, grocery/retail anchored community center), and New Garden Crossing (Greensboro, 100% leased grocery/retail anchored community center)

Balance Sheet & Capital Discipline

• The balance sheet remains strong with ample liquidity and flexibility to pursue attractive risk-adjusted acquisition opportunities
• A $250 million private placement of senior notes closed in June, with proceeds used to partially pay down the revolving line of credit
• A 5% year-over-year increase in the quarterly dividend was declared, setting the new payout at 25 cents per share
• The company's core long-term priorities are: owning high-quality necessity-based retail centers, thoughtful expansion across core and emerging Sunbelt markets, maintaining a disciplined balance sheet, and driving sustainable growth in cash flow, NAV per share, and long-term shareholder value

InvenTrust is a retail real estate firm focused on high-quality open-air necessity-based retail centers. For Q2 2026, same property net operating income (NOI) was $48.5 million, representing 4.1% year-over-year growth. Year-to-date same property NOI totaled $97.2 million, up 3.3% year-over-year. Neighborhood FFO for Q2 2026 was $39.8 million (50 cents per diluted share), an 11.1% year-over-year increase. Core FFO for Q2 2026 was 48 cents per diluted share, a 9.1% year-over-year increase. Year-to-date, Neighborhood FFO was $81.1 million ($1.03 per diluted share), up 10.8% year-over-year, while Core FFO was $0.98 per diluted share, up 8.9% year-over-year. At quarter end, total liquidity was $489 million ($64 million cash, $425 million available on the revolving credit facility), weighted average interest rate was 4.36%, weighted average term to maturity was 4.3 years, net leverage was 31.9%, and net debt to adjusted annualized EBITDA was 5.3x. Leased occupancy ended the quarter at 96.2%, with small shop occupancy at 93.2% and anchor occupancy at 98.1%. Blended lease spreads were 8.5% YTD, new lease spreads were 18.7%, and renewal spreads were 7.9%. Annualized base rent per square foot was $20.94, up 3.8% year-over-year. YTD tenant retention was 88%.

• Full year 2026 same property NOI growth guidance is reaffirmed at a range of 3.25% to 4.25%
• Full year 2026 Core FFO guidance range of $1.92 to $1.96 per share is maintained
• Full year 2026 Neighborhood FFO guidance is raised to a range of $2.01 to $2.07 per share, reflecting a non-cash revenue increase from recent completed acquisitions
• Management expects same property NOI growth to be uneven in the remainder of 2026: Q3 will reflect timing of operating expenses for scheduled projects, while growth is expected to reaccelerate in Q4 as new leases commence and signed-but-unopened properties convert to rent-paying occupancy
• The company's comfortable leverage range is 5.0x to 6.0x forward net debt to EBITDA; management expects to end 2026 below 5.0x even with planned acquisition activity

• Transaction markets for attractive retail properties are increasingly competitive, particularly in core Sunbelt markets, which can compress pricing and limit available opportunities that meet the company's return targets
• Restaurant tenants, which represent 21% of portfolio exposure, have inherently higher turnover than other tenant categories, even though no significant sector-wide credit or performance weakness has been observed
• Equity market volatility leads the company to prioritize patience with equity capital deployment, requiring reliance on self-funding and balance sheet capacity for growth for the foreseeable future
• Expansion into new emerging secondary Sunbelt markets carries inherent unknowns around long-term demographic and retail demand trends, despite management's pre-entry market analysis
• Q2 occupancy saw a temporary sequential decline driven by a single anchor vacancy, and full recovery to all-time high occupancy levels is not expected until 2027

Q: What drove the sequential decline in anchor occupancy, and what is the expected trajectory for occupancy through the end of the year and into 2027? / A: The decline was driven entirely by a single vacancy from the Painted Tree anchor at the West Park asset in Glen Ellyn, Virginia. The company currently holds a letter of intent for the space from a prominent national retailer, and expects to fill three of six total vacant big boxes by the end of 2026. Management projects total leased occupancy will approach all-time highs by Q1 2027, with economic occupancy reaching that level by Q3 2027.

Q: Net debt to EBITDA has risen to 5.3x from ~4.5x at year-end. Are you comfortable at this level, and how will you fund future acquisitions? / A: The elevated current ratio is due to closing acquisitions late in the quarter, and it will decline materially; the company expects to end 2026 below 5.0x, which remains within its 5.0-6.0x comfortable target range. The balance sheet still has plenty of capacity for growth, and amid equity market volatility, the company can self-fund acquisitions for the next several years if needed without issuing new equity.

Q: How large is the current acquisition buy box for new Sunbelt markets, how quickly could you ramp acquisitions, and what is the return target for these purchases? / A: The company's total active pipeline across existing and new markets is ~$2 billion, with fewer opportunities in smaller emerging Sunbelt markets than in larger core markets. The company has closed $290 million in acquisitions year-to-date, hitting its target blended initial yield of ~6% and unlevered IRR in the low-mid 7% range. While the market is competitive, the pipeline has enough attractive opportunities to continue executing on the company's growth plan.

Q: Can you provide an update on portfolio pruning (dispositions) and how disposition pricing compares to acquisition pricing? / A: Two non-core assets that do not fit the company's growth profile are currently on the market, with closings expected in H2 2026. Disposition initial yields are very similar to acquisition yields, resulting in roughly neutral accretion/dilution, while the company trades up to higher-growth assets in more desirable markets. Dispositions will generally follow acquisitions (to match fund capital recycling), and the company has enough balance sheet capacity to pursue additional acquisitions before completing planned sales.