Open the filing on EDGARTable of Contents
| Section | Page |
| Earnings Release & Financial Statements | |
| Press Release | 1-8 |
| Company Summary | |
| Portfolio Summary | 9 |
| Capital Structure | 10 |
| Debt Detail | 11 |
| Same Property Metrics | 12 |
| Leasing Summary | 13 |
| Lease Expirations | 14 |
| Top 25 Tenants | 15 |
| Investments | |
| Acquisitions | 16 |
| Reporting Policies and Other | |
| Notable Accounting Policies and Non-GAAP Measures | 17-18 |
Curbline Properties Reports Second Quarter 2026 Results
New York, New York, July 28, 2026 - Curbline Properties Corp. (NYSE: CURB) (the “Company” or “Curbline”), an owner of convenience centers in suburban, high household income communities, announced today operating results for the quarter ended June 30, 2026. For the six months ended June 30, 2026, net income attributable to Curbline was $10.5 million, or $0.10 per diluted share, as compared to net income of $20.9 million, or $0.20 per diluted share, in the year-ago period.
“Curbline’s second quarter results highlight the strength of the platform that we have constructed with record investment volume of $375 million, over $500 million of capital raised, and an uptick in leasing volume with the vast majority of the Company’s SNO pipeline expected to commence rent payment by March 2027. Curbline is again raising its full year investment target and OFFO guidance range given the significant outperformance to date with all cash and capital commitments needed to fund the revised investment pipeline on hand,” commented David R. Lukes, President and Chief Executive Officer. “Looking forward, we believe Curbline remains uniquely positioned for growth given its differentiated investment focus, the leasing economics of the Company’s property type, and its balance sheet.”
Results for the Second Quarter
Second quarter net income attributable to Curbline was $6.9 million, or $0.06 per diluted share, as compared to net income of $10.4 million, or $0.10 per diluted share, in the year-ago period. The decrease year-over-year was primarily due to an increase in interest expense and in depreciation and amortization expense, partially offset by the net impact of asset acquisitions.
Second quarter operating funds from operations attributable to Curbline (“Operating FFO” or “OFFO”) was $33.3 million, or $0.31 per diluted share, compared to $26.9 million, or $0.26 per diluted share, in the year-ago period. The increase year-over-year was primarily due to the net impact of asset acquisitions, partially offset by an increase in interest expense and a higher weighted-average share count resulting from shares issued to fund acquisitions.
Significant Second Quarter Activity and Recent Activity
During the second quarter, acquired 30 convenience shopping centers for an aggregate purchase price of $374.1 million.
During the second quarter, sold 6.6 million shares of common stock on a forward basis under its at-the-market equity offering program for expected gross proceeds of $186.5 million before issuance costs.
In June, conducted an offering of 11.5 million shares of common stock on a forward basis generating expected gross proceeds of $354.8 million before issuance costs.
During the second quarter, settled 8.4 million shares of common stock that were sold on a forward basis generating net proceeds of $199.8 million.
In June, issued the Company's 2025 Corporate Sustainability Report marking both the first report as a standalone public company and Curbline’s first full year of sustainability reporting. The report was completed in alignment with the Task Force on Climate Related Financial Disclosure and can be found at (https://curbline.com/our-story#sustainability).
As of June 30, 2026, adjusted for forward equity sales completed year to date, the Company had $850.9 million of cash and capital commitments for future acquisitions, including $154.7 million of cash and $696.2 million of expected gross proceeds from unsettled forward equity sales.
In the third quarter to date, acquired four convenience shopping centers for an aggregate purchase price of $47.1 million.
Significant Year to Date 2026 Activity
Year to date, acquired 48 convenience shopping centers for an aggregate purchase price of $563.7 million.
Year to date, sold 29.3 million shares of common stock on a forward basis in follow-on public offerings and under its at-the-market equity offering program, generating expected gross proceeds of $823.5 million before issuance costs.
Key Quarterly Operating Results
Reported an increase of 2.1% in same-property net operating income (“SPNOI”) for the six-month period ended June 30, 2026 compared to June 30, 2025.
Generated cash new leasing spreads of 20.2% and cash renewal leasing spreads of 7.4%, for the trailing twelve-month period ended June 30, 2026 and cash new leasing spreads of 8.2% and cash renewal leasing spreads of 8.6% for the second quarter of 2026.
Generated straight-lined new leasing spreads of 35.7% and straight-lined renewal leasing spreads of 17.1%, for the trailing twelve-month period ended June 30, 2026 and straight-lined new leasing spreads of 27.1% and straight-lined renewal leasing spreads of 18.1% for the second quarter of 2026.
Reported a leased rate of 96.5% at June 30, 2026 compared to 96.1% at June 30, 2025 and 96.7% at December 31, 2025. The sequential increase was due to an acceleration in net leasing activity, partially offset by an approximately 20 basis point impact from acquisitions.
As of June 30, 2026, the Signed Not Opened spread was 220 basis points, representing $7.6 million of annualized base rent.
2026 Guidance
The Company has updated its guidance for net income attributable to Curbline for 2026 to be from $0.27 to $0.32 per diluted share and Operating FFO to be from $1.24 to $1.26 per diluted share. The Company does not include a projection of gains or losses on asset sales, transaction costs or debt extinguishment costs in guidance.
Reconciliation of Net Income Attributable to Curbline to FFO and Operating FFO estimates:
| FY 2026E (prior) Per Share - Diluted | FY 2026E (revised) Per Share - Diluted |
|---|
| Net income attributable to Curbline | $0.29 - $0.36 | $0.27 - $0.32 |
| Depreciation and amortization of real estate, net | 0.90 - 0.86 | 0.96 - 0.93 |
| FFO attributable to Curbline (NAREIT) | $1.19 - $1.22 | $1.23 - $1.25 |
| Transaction and other costs, net (reported actual) | 0.01 | 0.01 |
| Operating FFO attributable to Curbline | $1.20 - $1.23 | $1.24 - $1.26 |
About Curbline Properties
Curbline Properties is an owner and manager of convenience shopping centers positioned on the curbline of well-trafficked intersections and major vehicular corridors in suburban, high household income communities. The Company is a self-managed real estate investment trust (“REIT”) that is publicly traded under the ticker symbol “CURB” on the NYSE. Additional information about the Company is available at curbline.com. To be included in the Company’s e-mail distributions for press releases and other investor news, please click here.
Conference Call and Supplemental Information
The Company will hold its quarterly conference call today at 8:00 a.m. Eastern Time. To participate with access to the slide presentation, please visit the Investor Relations portion of Curbline's website, ir.curbline.com, or for audio only, dial 833-461-5787 (U.S.) or 626-884-3620 (international) using meeting ID 341781138 at least ten minutes prior to the scheduled start of the call. The call will also be webcast and available in a listen-only mode on Curbline's website at ir.curbline.com. If you are unable to participate during the live call, a replay of the conference call will also be available at ir.curbline.com for future review through July 28, 2027. Copies of the Company’s supplemental package and earnings slide presentation are available on the Company’s website.
Non-GAAP Measures and Other Operational Metrics
Funds from Operations (“FFO”) is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of REIT performance. The Company believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT, more appropriately measure the core operations of the Company, and provide benchmarks to its peer group.
FFO is generally defined and calculated by the Company as net income attributable to Curbline (computed in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”)), adjusted to exclude (i) gains and losses from disposition of real estate property, which are presented net of taxes, (ii) impairment charges on real estate property, (iii) gains and losses from changes in control and (iv) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles net of depreciation allocated to non-controlling interests. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains/losses. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains/losses to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.
In calculating the expected range for or amount of net income attributable to Curbline to estimate projected FFO and Operating FFO for future periods, the Company does not include a projection of gains and losses from the disposition of real estate property, potential impairments and reserves of real estate property, debt extinguishment costs and certain transaction costs. Other real estate companies may calculate expected FFO and Operating FFO in a different manner.
The Company also uses net operating income (“NOI”), a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses and excludes depreciation and amortization expense, interest income and expense and corporate level transactions. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
The Company presents NOI information herein on a same-property basis (“SPNOI”). The Company defines SPNOI as property revenues less property-related expenses, which excludes depreciation and amortization expense, interest income and expense and corporate level transactions, as well as straight-line rental income and reimbursements and expenses, lease termination income, management fee expense and fair market value of leases. SPNOI only includes assets owned for the entirety of both comparable periods. Other real estate companies may calculate NOI and SPNOI in a different manner. The Company believes SPNOI provides investors with additional information regarding the operating performance of comparable assets because it excludes certain non-cash and non-comparable items as noted above.
FFO, Operating FFO, NOI and SPNOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures have been provided herein.
The Company calculates Cash Leasing Spreads by comparing the prior tenant's annual base rent in the final year of the prior lease to the executed tenant’s annual base rent in the first year of the executed lease. Straight-Lined Leasing Spreads are calculated by comparing the prior tenant’s average base rent over the prior lease term to the executed tenant’s average base rent over the term of the executed lease. For both Cash and Straight-Lined Leasing Spreads, the reported calculation excludes first generation units and spaces vacant at the time of acquisition and includes all leases for spaces vacant greater than twelve months along with split and combination deals.
Safe Harbor
Forward-looking statements notice
Curbline Properties Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact, including statements regarding the Company’s projected operational and financial performance, strategy, prospects and plans, may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, changes in the economic performance and value of the Company’s properties as a result of broad economic and local conditions, such as inflation, interest rate volatility and market reaction to tariffs and other trade policies; changes in local conditions such as an increase or decrease in the supply of, or demand for, retail real estate space in our markets; the impact of changes in consumer trends, distribution channels, suburban population, retailing practices and the space needs of tenants; our dependence on rental income which depends on the successful operations and financial condition of tenants, the loss of which, including as a result of store closures or bankruptcy, could result in significant occupancy loss and negatively impact rental income from our properties; our ability to enter into new leases and renew existing leases, in each case, on favorable terms; our ability to identify, acquire, construct or develop additional properties that produce the cash flows that we expect, which may be limited by competitive pressures, and our ability to manage our growth effectively and capture the efficiencies of scale that we expect from expansion; potential environmental liabilities; our ability to secure debt and equity financing on commercially acceptable terms or at all; the illiquidity of real estate investments which could limit our ability to make changes to our portfolio to respond to economic or other conditions; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from natural disasters, public health crises and weather-related factors in locations where we own properties, the ability to estimate accurately the amounts thereof and the sufficiency and timing of any insurance recovery payments related to such damages; any change in strategy; the effect of future offerings of debt and equity securities on the value of our common stock; any disruption, failure or breach of the networks or systems on which the Company relies, including as a result of cyber-attacks; impairment in the value of real estate property that we own; changes in tax laws impacting REITs and real estate in general, as well as our ability to maintain our REIT status; our ability to retain and attract key management personnel; and the finalization of the financial statements for the quarter ended June 30, 2026. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s most recent Annual Report on Form 10-K under “Item 1A. Risk Factors” and our subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Income Statement
| in thousands, except per share | | |
|---|
| | 2Q26 | 2Q25 | 6M26 | 6M25 |
|---|
| Revenues: | | | | |
|---|
| Rental income (1) | $63,077 | $41,104 | $120,748 | $79,542 |
|---|
| Other property revenues | 219 | 298 | 535 | 555 |
|---|
| | 63,296 | 41,402 | 121,283 | 80,097 |
|---|
| Expenses: | | | | |
|---|
| Operating and maintenance | 7,904 | 5,666 | 15,712 | 11,068 |
|---|
| Real estate taxes | 7,545 | 4,971 | 14,821 | 9,792 |
|---|
| | 15,449 | 10,637 | 30,533 | 20,860 |
|---|
| Net operating income | 47,847 | 30,765 | 90,750 | 59,237 |
|---|
| Other income (expense): | | | | |
|---|
| Interest expense | (8,372) | (1,767) | (16,260) | (2,334) |
|---|
| Interest income | 1,477 | 5,580 | 4,385 | 11,233 |
|---|
| Depreciation and amortization | (26,464) | (16,039) | (52,123) | (30,502) |
|---|
| General and administrative (2) | (9,240) | (8,156) | (18,863) | (17,084) |
|---|
| Other income (expense), net (3) | 1,742 | 95 | 2,738 | 553 |
|---|
| Gain on disposition of real estate, net | 0 | 0 | 0 | 42 |
|---|
| Income before taxes | 6,990 | 10,478 | 10,627 | 21,145 |
|---|
| Tax expense | (65) | (72) | (134) | (177) |
|---|
| Net income | 6,925 | 10,406 | 10,493 | 20,968 |
|---|
| Non-controlling interests | (15) | (14) | (20) | (26) |
|---|
| Net income attributable to Curbline | $6,910 | $10,392 | $10,473 | $20,942 |
|---|
| Weighted average shares - Basic - EPS | 106,411 | 105,003 | 105,751 | 104,958 |
|---|
| Assumed conversion of diluted securities | 2,484 | 239 | 1,872 | 232 |
|---|
| Weighted average shares - Diluted - EPS | 108,895 | 105,242 | 107,623 | 105,190 |
|---|
| Earnings per share of common stock - Basic | $0.06 | $0.10 | $0.10 | $0.20 |
|---|
| Earnings per share of common stock - Diluted | $0.06 | $0.10 | $0.10 | $0.20 |
|---|
| Minimum rents | $39,737 | $25,011 | $75,894 | $48,240 |
|---|
| Ground lease minimum rents | 4,046 | 3,586 | 7,911 | 6,790 |
|---|
| Straight-line rent, net | 1,252 | 795 | 2,482 | 1,456 |
|---|
| Amortization of (above)/below-market rent, net | 1,586 | 1,029 | 3,263 | 1,959 |
|---|
| Percentage and overage rent | 275 | 269 | 409 | 362 |
|---|
| Recoveries | 15,785 | 10,365 | 30,564 | 19,815 |
|---|
| Uncollectible revenue | (371) | (215) | (789) | (434) |
|---|
| Ancillary and other rental income | 302 | 264 | 549 | 500 |
|---|
| Lease termination fees | 465 | 0 | 465 | 854 |
|---|
| (1) | Rental income: | | | | |
| (2) | SITE SSA gross up | ($1,759) | ($625) | ($3,522) | ($1,256) |
| (3) | Other income (expense), net: | | | | |
| Transaction costs | ($17) | ($343) | ($784) | ($516) |
| SITE SSA gross up | 1,759 | 625 | 3,522 | 1,256 |
| Debt extinguishment and other | 0 | (187) | 0 | (187) |
Reconciliation: Net Income to FFO and Operating FFO and Other Financial Information
| in thousands, except per share | | |
|---|
| 2Q26 | 2Q25 | 6M26 | 6M25 |
|---|
| Net income attributable to Curbline | $6,910 | $10,392 | $10,473 | $20,942 |
|---|
| Depreciation and amortization of real estate, net of non-controlling interests | 26,406 | 16,018 | 52,023 | 30,464 |
|---|
| Gain on disposition of real estate, net of non-controlling interests | 0 | 0 | 0 | (42) |
|---|
| FFO attributable to Curbline | $33,316 | $26,410 | $62,496 | $51,364 |
|---|
| Transaction costs, net of non-controlling interests | 17 | 529 | 783 | 702 |
|---|
| Operating FFO attributable to Curbline | $33,333 | $26,939 | $63,279 | $52,066 |
|---|
| Weighted average shares & units - Basic: FFO & OFFO | 106,411 | 105,003 | 105,751 | 104,958 |
|---|
| Assumed conversion of dilutive securities | 2,484 | 239 | 1,872 | 232 |
|---|
| Weighted average shares & units - Diluted: FFO & OFFO | 108,895 | 105,242 | 107,623 | 105,190 |
|---|
| FFO per share - Basic | $0.31 | $0.25 | $0.59 | $0.49 |
|---|
| FFO per share - Diluted | $0.31 | $0.25 | $0.58 | $0.49 |
|---|
| Operating FFO per share - Basic | $0.31 | $0.26 | $0.60 | $0.50 |
|---|
| Operating FFO per share - Diluted | $0.31 | $0.26 | $0.59 | $0.49 |
|---|
| Capital expenditures and certain non-cash items: | | | | |
|---|
| Maintenance capital expenditures, net | $1,666 | $1,090 | $2,047 | $1,100 |
|---|
| Tenant allowances and landlord work, net | 2,102 | 826 | 3,972 | 1,628 |
|---|
| External leasing commissions, net | 451 | 351 | 904 | 830 |
|---|
| Loan cost amortization | (579) | (354) | (1,152) | (607) |
|---|
| Stock compensation expense | (2,791) | (3,072) | (5,762) | (6,666) |
|---|
Balance Sheet
| $ in thousands | | |
|---|
| | 2Q26 | 4Q25 |
|---|
| Assets: | | |
|---|
| Land | $919,733 | $759,267 |
|---|
| Buildings | 1,618,627 | 1,304,288 |
|---|
| Fixtures and tenant improvements | 123,166 | 107,013 |
|---|
| | 2,661,526 | 2,170,568 |
|---|
| Accumulated depreciation | (238,583) | (209,429) |
|---|
| | 2,422,943 | 1,961,139 |
|---|
| Construction in progress and land | 40,171 | 27,355 |
|---|
| Real estate, net | 2,463,114 | 1,988,494 |
|---|
| Cash | 154,721 | 289,553 |
|---|
| Receivables and straight-line rents (1) | 26,832 | 22,514 |
|---|
| Amounts receivable from SITE Centers | 9,273 | 21,457 |
|---|
| Intangible assets, net (2) | 169,200 | 137,513 |
|---|
| Other assets, net (3) | 18,074 | 10,259 |
|---|
| Total Assets | 2,841,214 | 2,469,790 |
|---|
| Liabilities and Equity: | | |
|---|
| Revolving credit facilities | 0 | 0 |
|---|
| Unsecured debt | 595,823 | 423,239 |
|---|
| | 595,823 | 423,239 |
|---|
| Dividends payable | 19,630 | 20,872 |
|---|
| Other liabilities (4) | 133,395 | 112,209 |
|---|
| Total Liabilities | 748,848 | 556,320 |
|---|
| Common stock | 1,140 | 1,054 |
|---|
| Paid-in capital | 2,157,037 | 1,958,845 |
|---|
| Distributions in excess of net income | (72,132) | (46,100) |
|---|
| Accumulated comprehensive income (loss) | 135 | (4,606) |
|---|
| Non-controlling interest | 6,186 | 4,277 |
|---|
| Total Equity | 2,092,366 | 1,913,470 |
|---|
| Total Liabilities and Equity | $2,841,214 | $2,469,790 |
|---|
| (1) | Straight-line rents (including fixed CAM), net | $16,440 | $13,929 |
| (2) | Below-market leases (as lessee), net | 14,753 | 14,788 |
| (3) | Acquisition escrow deposits | 8,351 | 3,258 |
| (4) | Below-market leases, net | 78,946 | 66,698 |
Reconciliation of Net Income Attributable to Curbline to Same-Property NOI
| 2Q26 | 2Q25 | 6M26 | 6M25 |
|---|
| $ in thousands | | | | |
| GAAP Reconciliation: | | | | |
| Net income attributable to Curbline | $6,910 | $10,392 | $10,473 | $20,942 |
| Interest expense | 8,372 | 1,767 | 16,260 | 2,334 |
| Interest income | (1,477) | (5,580) | (4,385) | (11,233) |
| Depreciation and amortization | 26,464 | 16,039 | 52,123 | 30,502 |
| General and administrative | 9,240 | 8,156 | 18,863 | 17,084 |
| Other expense (income), net | (1,742) | (95) | (2,738) | (553) |
| Gain on disposition of real estate, net | 0 | 0 | 0 | (42) |
| Tax expense | 65 | 72 | 134 | 177 |
| Non-controlling interests | 15 | 14 | 20 | 26 |
| Total Curbline NOI | 47,847 | 30,765 | 90,750 | 59,237 |
| Less: Non-Same Property NOI | (20,899) | (3,693) | (36,799) | (6,399) |
| Total Same-Property NOI | $26,948 | $27,072 | $53,951 | $52,838 |
| Total Curbline NOI % Change | 55.5% | | 53.2% | |
| Same-Property NOI % Change | (0.5%) | | 2.1% | |
Portfolio Summary
| | | 6/30/2026 | 3/31/2026 | 12/31/2025 | 9/30/2025 | 6/30/2025 |
|---|
| Quarterly Operational Overview | | | | | |
| Properties | 220 | 190 | 176 | 162 | 125 |
| Owned GLA | 5,242 | 4,559 | 4,323 | 3,984 | 3,212 |
| Ground lease GLA | 503 | 481 | 477 | 488 | 477 |
| Total GLA | 5,745 | 5,040 | 4,800 | 4,472 | 3,689 |
| Base Rent PSF | $34.99 | $34.91 | $34.52 | $34.38 | $35.26 |
| Commenced Rate | 94.3% | 94.1% | 94.1% | 93.9% | 93.5% |
| Leased Rate | 96.5% | 96.3% | 96.7% | 96.7% | 96.1% |
| Quarterly SPNOI | -0.5% | 4.8% | 1.5% | 2.6% | 6.2% |
| TTM New Leasing (GLA in 000's) | 106 | 105 | 128 | 115 | 73 |
| TTM Renewals (GLA in 000's) | 415 | 328 | 286 | 264 | 216 |
| TTM Total Leasing (GLA in 000's) | 521 | 433 | 414 | 379 | 289 |
| TTM Cash New Rent Spreads | 20.2% | 20.2% | 19.4% | 20.2% | 15.3% |
| TTM Cash Renewal Rent Spreads | 7.4% | 7.1% | 8.0% | 9.1% | 8.5% |
| TTM Cash Blended New and Renewal Rent Spreads | 10.0% | 10.3% | 11.5% | 12.6% | 10.4% |
| TTM Straight-Lined New Rent Spreads | 35.7% | 35.9% | 34.6% | 36.2% | 33.0% |
| TTM Straight-Lined Renewal Rent Spreads | 17.1% | 17.1% | 18.3% | 19.0% | 18.1% |
| TTM Straight-Lined Blended New and Renewal Rent Spreads | 20.8% | 21.7% | 23.4% | 24.5% | 22.4% |
| Top 20 MSAs | | | | | | |
| MSA | Properties | GLA | % of GLA | ABR | % of ABR | ABR PSF |
| 1 | Atlanta-Sandy Springs-Roswell, GA | 30 | 712 | 12.4% | $21,104 | 11.2% | $31.26 |
| 2 | Miami-Fort Lauderdale-West Palm Beach, FL | 8 | 504 | 8.8% | 17,395 | 9.2% | $37.23 |
| 3 | Phoenix-Mesa-Scottsdale, AZ | 15 | 325 | 5.7% | 12,652 | 6.7% | $40.15 |
| 4 | Houston-The Woodlands-Sugar Land, TX | 12 | 330 | 5.7% | 12,126 | 6.4% | $39.71 |
| 5 | Orlando-Kissimmee-Sanford, FL | 6 | 291 | 5.1% | 10,816 | 5.7% | $39.28 |
| 6 | San Francisco-Oakland-Hayward, CA | 3 | 141 | 2.5% | 6,762 | 3.6% | $57.32 |
| 7 | Jacksonville, FL | 7 | 235 | 4.1% | 6,628 | 3.5% | $28.49 |
| 8 | Charlotte-Concord-Gastonia, NC-SC | 8 | 242 | 4.2% | 5,983 | 3.2% | $25.94 |
| 9 | Dallas-Fort Worth-Arlington, TX | 7 | 211 | 3.7% | 5,947 | 3.1% | $30.94 |
| 10 | Sacramento-Roseville-Arden-Arcade, CA | 5 | 140 | 2.4% | 5,202 | 2.8% | $37.69 |
| 11 | Denver-Aurora-Lakewood, CO | 9 | 157 | 2.7% | 5,078 | 2.7% | $35.34 |
| 12 | Riverside-San Bernardino-Ontario, CA | 4 | 127 | 2.2% | 4,496 | 2.4% | $38.40 |
| 13 | Tampa-St. Petersburg-Clearwater, FL | 5 | 128 | 2.2% | 4,482 | 2.4% | $38.71 |
| 14 | Chicago-Naperville-Elgin, IL-IN-WI | 9 | 160 | 2.8% | 4,480 | 2.4% | $30.00 |
| 15 | Colorado Springs, CO | 3 | 139 | 2.4% | 4,268 | 2.3% | $34.06 |
| 16 | Austin-Round Rock, TX | 4 | 113 | 2.0% | 4,123 | 2.2% | $37.08 |
| 17 | Cleveland-Elyria, OH | 4 | 92 | 1.6% | 3,256 | 1.7% | $36.53 |
| 18 | Minneapolis-St. Paul-Bloomington, MN-WI | 4 | 90 | 1.6% | 3,124 | 1.7% | $34.54 |
| 19 | Columbus, OH | 2 | 82 | 1.4% | 2,994 | 1.6% | $36.39 |
| 20 | Washington-Arlington-Alexandria, DC-VA-MD-WV | 4 | 59 | 1.0% | 2,802 | 1.5% | $47.75 |
| Other | 71 | 1,467 | 25.5% | 45,346 | 24.0% | $33.08 |
| Total | 220 | 5,745 | 100.0% | $189,064 | 100.0% | $34.99 |
| Note: $ and GLA in thousands except property count and base rent PSF. |
Capital Structure
| June 30, 2026 | December 31, 2025 |
|---|
| $, shares and units in thousands, except per share | | |
| Market Value Per Share | $30.40 | $23.21 |
| Common Stock | 114,038 | 105,368 |
| Common Units | 40 | 29 |
| Total Common Stock and Units | 114,078 | 105,397 |
| Total Equity Market Capitalization | $3,467,971 | $2,446,264 |
| Unsecured Revolver | 0 | 0 |
| Unsecured Term Loans | 250,000 | 250,000 |
| Unsecured Notes Payable | 350,000 | 178,000 |
| Total Debt | 600,000 | 428,000 |
| Less: Cash | 154,721 | 289,553 |
| Net Debt | 445,279 | 138,447 |
| Total Enterprise Value | $3,913,250 | $2,584,711 |
| (1) Excludes $8.4 million and $3.3 million of acquisition escrow deposits as of June 30, 2026 and December 31, 2025, respectively. |
| Unsecured Debt Covenants | | |
| Consolidated Outstanding Indebtedness Net of Restricted Cash | 595,823 | 423,239 |
| Consolidated Market Value | 3,146,209 | 2,707,669 |
| Consolidated Outstanding Indebtedness Ratio | 19% | 16% |
| Covenant | 60% | 60% |
| Consolidated Secured Indebtedness Net of Restricted Cash Collateral | 0 | 0 |
| Consolidated Market Value | 3,146,209 | 2,707,669 |
| Consolidated Secured Indebtedness Ratio | 0% | 0% |
| Covenant | 35% | 35% |
| Value of Unencumbered Assets | 3,146,209 | 2,707,669 |
| Consolidated Outstanding Unsecured Indebtedness Net of Restricted Cash | 595,823 | 423,239 |
| Unencumbered Asset Ratio | 5.3X | 6.4X |
| Covenant | 1.7X | 1.7X |
| Consolidated Cash Flow | 143,654 | 124,779 |
| Fixed Charges | 24,916 | 11,400 |
| Fixed Charge Ratio | 5.8X | 10.9X |
| Covenant | 1.5X | 1.5X |
| Unencumbered Adjusted NOI | 135,041 | 112,286 |
| Consolidated Unsecured Interest Expense | 24,044 | 10,669 |
| Unencumbered NOI Coverage Ratio | 5.6X | 10.5X |
| Covenant | 1.8X | 1.8X |
| Credit Ratings (Outlook) | | |
| Fitch | BBB (Stable) | BBB (Stable) |
Debt Detail
| Balance | Maturity Date | Interest Rate |
|---|
| $ in thousands | | | |
| Bank Debt | | | |
| Unsecured Revolver ($400m) | $0 | Sep-29 | SOFR+0.85% |
| Unsecured Term Loan ($100m) | 100,000 | Oct-29 | 4.53% |
| Unsecured Term Loan ($150m) | 150,000 | Jan-31 | 4.61% |
| $250,000 | | |
| Unsecured Debt | | | |
| Unsecured Notes - 2030 | 100,000 | Sep-30 | 5.58% |
| Unsecured Notes - 2031 | 50,000 | Jan-31 | 5.06% |
| Unsecured Notes - 2032 | 50,000 | Sep-32 | 5.79% |
| Unsecured Notes - 2033 | 150,000 | Jan-33 | 5.31% |
| $350,000 | | |
| Subtotal Debt | $600,000 | | 5.07% |
| Unamortized Loan Costs, Net | (4,177) | | |
| Total Debt | $595,823 | | |
| Maturity Schedule | Secured | Unsecured | Total | Interest Rate |
| 2026 | $0 | $0 | $0 | - |
| 2027 | 0 | 0 | 0 | - |
| 2028 | 0 | 0 | 0 | - |
| 2029 | 0 | 100,000 | 100,000 | 4.53% |
| 2030 | 0 | 100,000 | 100,000 | 5.58% |
| 2031 | 0 | 200,000 | 200,000 | 4.72% |
| 2032 | 0 | 50,000 | 50,000 | 5.79% |
| 2033 | 0 | 150,000 | 150,000 | 5.31% |
| 2034 and beyond | 0 | 0 | 0 | - |
| Total | $0 | $600,000 | $600,000 | 5.07% |
| (1) Maturity dates assumed all borrower extension options are exercised. |
| (2) Rate excludes loan fees and unamortized loan costs. Interest rates are shown at hedged all-in rates where applicable. |
Same Property Metrics
| Same-Property Net Operating Income |
|---|
| Quarterly Same-Property NOI | Annual Same-Property NOI |
|---|
| 2Q26 | 2Q25 | Change | 6M26 | 6M25 | Change |
|---|
| Same Property - Leased rate | 96.8% | 96.2% | 0.6% | 96.8% | 96.2% | 0.6% |
| Same Property - Commenced rate | 93.7% | 93.5% | 0.2% | 93.7% | 93.5% | 0.2% |
| Revenues: | | | | | | |
| Minimum rents | $26,633 | $26,029 | | $53,290 | $51,790 | |
| Recoveries | 9,077 | 9,480 | | 18,250 | 18,532 | |
| Uncollectible revenue | (176) | (176) | | (281) | (397) | |
| Percentage and overage rents | 256 | 269 | | 390 | 362 | |
| Ancillary and other rental income | 437 | 548 | | 924 | 1,038 | |
| 36,227 | 36,150 | 0.2% | 72,573 | 71,325 | 1.7% |
| Expenses: | | | | | | |
| Operating and maintenance | (4,676) | (4,617) | | (9,403) | (9,523) | |
| Real estate taxes | (4,603) | (4,461) | | (9,219) | (8,964) | |
| (9,279) | (9,078) | 2.2% | (18,622) | (18,487) | 0.7% |
| Total Comparable SPNOI | $26,948 | $27,072 | -0.5% | $53,951 | $52,838 | 2.1% |
| Non-Same Property NOI | 20,899 | 3,693 | | 36,799 | 6,399 | |
| Total Curbline NOI | $47,847 | $30,765 | 55.5% | $90,750 | $59,237 | 53.2% |
| Same-Property NOI Operating Margin | 74.4% | 74.9% | | 74.3% | 74.1% | |
| Same-Property NOI Recovery Rate | 97.8% | 104.4% | | 98.0% | 100.2% | |
| (1) See the definition in the Notable Accounting Policies and Non-GAAP Measures section and the GAAP reconciliation on page 8. |
Leasing Summary
| Comparable Pool | Total Pool | | | CapEx PSF | | |
|---|
| Count | GLA | ABR PSF | Cash | Straight- lined | Count | GLA | ABR PSF | Term | GLA | ABR PSF | TA & LL | LC | Total | NER PSF | Term |
|---|
| Leasing Activity | Net Effective Rents |
| New Leases | | | | | | | | | | | | | | | | |
| 2Q26 | 11 | 26,154 | $32.69 | 8.2% | 27.1% | 15 | 33,947 | $31.16 | 9.0 | 33,947 | $34.67 | $4.90 | $1.90 | $6.80 | $27.87 | 9.0 |
| 1Q26 | 5 | 10,377 | $41.95 | 33.5% | 55.9% | 10 | 16,768 | $39.10 | 9.1 | 15,538 | $42.67 | $4.46 | $2.44 | $6.90 | $35.77 | 9.1 |
| 4Q25 | 10 | 20,651 | $35.67 | 12.6% | 26.2% | 16 | 32,547 | $36.66 | 8.1 | 29,944 | $39.31 | $5.26 | $2.19 | $7.45 | $31.86 | 7.9 |
| 3Q25 | 16 | 49,186 | $38.60 | 26.9% | 39.7% | 23 | 66,684 | $37.20 | 9.7 | 29,063 | $40.72 | $4.24 | $1.89 | $6.13 | $34.59 | 9.3 |
| 42 | 106,368 | $36.90 | 20.2% | 35.7% | 64 | 149,946 | $35.93 | 9.1 | 108,492 | $38.72 | $4.76 | $2.06 | $6.82 | $31.90 | 8.8 |
| Renewals | | | | | | | | | | | | | | | | |
| 2Q26 | 53 | 133,100 | $33.76 | 8.6% | 18.1% | 53 | 133,100 | $33.76 | 4.9 | 133,100 | $35.31 | $0.37 | $0.00 | $0.37 | $34.94 | 4.9 |
| 1Q26 | 52 | 127,791 | $33.14 | 5.9% | 14.7% | 52 | 127,791 | $33.14 | 5.2 | 127,791 | $34.46 | $0.00 | $0.00 | $0.00 | $34.46 | 5.2 |
| 4Q25 | 33 | 67,446 | $37.32 | 4.7% | 15.2% | 33 | 67,446 | $37.32 | 5.3 | 67,446 | $39.33 | $0.09 | $0.00 | $0.09 | $39.24 | 5.3 |
| 3Q25 | 33 | 86,417 | $34.88 | 10.3% | 20.5% | 33 | 86,417 | $34.88 | 6.7 | 86,417 | $37.20 | $0.37 | $0.14 | $0.51 | $36.69 | 6.7 |
| 171 | 414,754 | $34.38 | 7.4% | 17.1% | 171 | 414,754 | $34.38 | 5.5 | 414,754 | $36.10 | $0.21 | $0.03 | $0.24 | $35.86 | 5.5 |
| New + Renewals | | | | | | | | | | | | | | | | |
| 2Q26 | 64 | 159,254 | $33.59 | 8.6% | 19.6% | 68 | 167,047 | $33.24 | 5.8 | 167,047 | $35.18 | $1.81 | $0.60 | $2.41 | $32.77 | 5.8 |
| 1Q26 | 57 | 138,168 | $33.80 | 7.9% | 17.8% | 62 | 144,559 | $33.83 | 5.7 | 143,329 | $35.35 | $0.78 | $0.43 | $1.21 | $34.14 | 5.6 |
| 4Q25 | 43 | 88,097 | $36.94 | 6.4% | 17.6% | 49 | 99,993 | $37.11 | 6.2 | 97,390 | $39.33 | $2.15 | $0.87 | $3.02 | $36.31 | 6.1 |
| 3Q25 | 49 | 135,603 | $36.23 | 16.2% | 27.4% | 56 | 153,101 | $35.89 | 8.0 | 115,480 | $38.08 | $1.60 | $0.69 | $2.29 | $35.79 | 7.4 |
| 213 | 521,122 | $34.90 | 10.0% | 20.8% | 235 | 564,700 | $34.79 | 6.4 | 523,246 | $36.64 | $1.54 | $0.62 | $2.16 | $34.48 | 6.1 |
Leasing Spreads
Cash Leasing Spreads are calculated by comparing the prior tenant’s annual base rent in the final year of the prior lease to the executed tenant’s annual base rent in the first year of the executed lease.
Straight-Lined Leasing Spreads are calculated by comparing the prior tenant’s average base rent over the prior lease term to the executed tenant’s average base rent over the term of the executed lease.
Both Cash and Straight-Lined Leasing spreads include leases vacant greater than twelve months along with split and combination deals and exclude first generation units and units vacant at the time of acquisition.
Net Effective Rents
Net effective rents are calculated as the weighted average base rent per rentable square foot over the lease term less all costs associated with leasing the space including landlord work which represents property level improvements associated with the lease transaction. Excludes first generation space.
Lease Expiration Schedule
| $ and GLA in thousands | | | | | | |
| Year | # of Leases | Expiring SF | % of SF Total | ABR | % of ABR Total | Rent PSF |
| MTM | 16 | 33 | 0.6% | $1,130 | 0.6% | $34.24 |
| 2026 | 79 | 168 | 3.1% | 5,597 | 3.0% | $33.32 |
| 2027 | 234 | 557 | 10.3% | 19,264 | 10.2% | $34.59 |
| 2028 | 320 | 839 | 15.5% | 27,940 | 14.8% | $33.30 |
| 2029 | 260 | 615 | 11.4% | 20,786 | 11.0% | $33.80 |
| 2030 | 239 | 630 | 11.7% | 21,973 | 11.6% | $34.88 |
| 2031 | 223 | 553 | 10.2% | 18,337 | 9.7% | $33.16 |
| 2032 | 154 | 432 | 8.0% | 16,184 | 8.6% | $37.46 |
| 2033 | 135 | 392 | 7.3% | 13,855 | 7.3% | $35.34 |
| 2034 | 151 | 411 | 7.6% | 15,639 | 8.3% | $38.05 |
| 2035 | 121 | 315 | 5.8% | 12,069 | 6.4% | $38.31 |
| Thereafter | 127 | 458 | 8.5% | 16,290 | 8.6% | $35.57 |
| Total | 2,059 | 5,403 | 100.0% | $189,064 | 100.0% | $34.99 |
| Note: Before exercise of any lease options; includes ground leases. |
Top 25 Tenants
| Tenant | Units | Base Rent | % of Total | GLA | % of Total |
|---|
| $ and GLA in thousands | | | | |
| 1 | Starbucks | 41 | $4,744 | 2.5% | 80 | 1.4% |
| 2 | Verizon | 23 | 2,937 | 1.6% | 71 | 1.2% |
| 3 | Chipotle | 20 | 2,411 | 1.3% | 53 | 0.9% |
| 4 | Inspire Brands (1) | 34 | 2,409 | 1.3% | 66 | 1.1% |
| 5 | JAB Holding (2) | 20 | 2,319 | 1.2% | 58 | 1.0% |
| 6 | AT&T | 25 | 2,008 | 1.1% | 57 | 1.0% |
| 7 | Somnigroup (Mattress Firm) | 13 | 1,929 | 1.0% | 56 | 1.0% |
| 8 | Darden (3) | 8 | 1,674 | 0.9% | 54 | 0.9% |
| 9 | T-Mobile | 19 | 1,555 | 0.8% | 41 | 0.7% |
| 10 | JPMorgan Chase | 8 | 1,540 | 0.8% | 34 | 0.6% |
| 11 | Five Guys | 13 | 1,416 | 0.7% | 32 | 0.6% |
| 12 | Restaurant Brands International (4) | 19 | 1,377 | 0.7% | 43 | 0.7% |
| 13 | AFC Urgent Care | 9 | 1,355 | 0.7% | 44 | 0.8% |
| 14 | Total Wine & More | 2 | 1,345 | 0.7% | 49 | 0.9% |
| 15 | Jersey Mike's | 25 | 1,343 | 0.7% | 39 | 0.7% |
| 16 | GoTo Foods (5) | 15 | 1,266 | 0.7% | 39 | 0.7% |
| 17 | Chick-Fil-A | 7 | 1,257 | 0.7% | 37 | 0.6% |
| 18 | FedEx Office | 10 | 1,233 | 0.7% | 37 | 0.6% |
| 19 | Self Esteem Brands (6) | 14 | 1,174 | 0.6% | 39 | 0.7% |
| 20 | First Watch Restaurant Group | 7 | 1,117 | 0.6% | 30 | 0.5% |
| 21 | Cava | 7 | 1,083 | 0.6% | 18 | 0.3% |
| 22 | Cracker Barrel (7) | 6 | 1,083 | 0.6% | 39 | 0.7% |
| 23 | Xponential Fitness (8) | 15 | 1,023 | 0.5% | 28 | 0.5% |
| 24 | Brinker (Chili's) | 6 | 1,018 | 0.5% | 34 | 0.6% |
| 25 | The UPS Store | 19 | 960 | 0.5% | 28 | 0.5% |
| Top 25 Total | 385 | $41,576 | 22.0% | 1,106 | 19.3% |
| Total Portfolio | | $189,064 | 100.0% | 5,745 | 100.0% |
| (1) Dunkin (14) / Jimmy John's (14) / Buffalo Wild Wings Go (3) / Buffalo Wild Wings (2) / Baskin Robbins (1) | |
| (2) Panera Bread (10) / Einstein Bros. Bagels (7) / Bruegger's Bagels (2) / Caribou Coffee (1) | |
| (3) Longhorn Steakhouse (4) / Olive Garden (3) / Chuy's (1) | |
| (4) Firehouse Subs (13) / Popeye's Chicken (4) / Burger King (2) | |
| (5) Moe's Southwest Grill (5) / McAlister's Deli (5) / Jamba Juice (4) / Schlotzsky's Deli (1) | | |
| (6) Orangetheory Fitness (8) / Waxing the City (3) / Anytime Fitness (2) / Base Camp Fitness (1) | | |
| (7) Cracker Barrel (3) / Maple Street Biscuit (3) | |
| (8) Club Pilates (7) / Stretchlab (3) / YogaSix (3) / Pure Barre (2) | |
Acquisitions
| Property Name | MSA | GLA | Price |
|---|
| $ and GLA in thousands | | | |
| 01/22/26 | Village at Research Park | Charlotte-Concord-Gastonia, NC-SC | 14 | $10,150 |
| 01/23/26 | Shops at Dublin Commons | Colorado Springs, CO | 34 | 20,500 |
| 02/04/26 | Canyon Springs Station | Riverside-San Bernardino-Ontario, CA | 8 | 4,890 |
| 02/04/26 | Corner at Towne Lake | Atlanta-Sandy Springs-Roswell, GA | 9 | 3,950 |
| 02/13/26 | Cypress Creek Corner | Houston-The Woodlands-Sugar Land, TX | 40 | 27,000 |
| 02/13/26 | Southbrook Station | Austin-Round Rock, TX | 34 | 25,750 |
| 02/20/26 | Centennial Place Shops | Milwaukee-Waukesha-West Allis, WI | 14 | 4,950 |
| 02/25/26 | Augusta Crossing | Chicago-Naperville-Elgin, IL-IN-WI | 15 | 5,900 |
| 02/26/26 | Spalding Station | Atlanta-Sandy Springs-Roswell, GA | 5 | 3,000 |
| 02/26/26 | Shops at Avalon Chase | Orlando-Kissimmee-Sanford, FL | 11 | 5,275 |
| 03/12/26 | Corner at Arapahoe Plaza | Denver-Aurora-Lakewood, CO | 8 | 4,925 |
| 03/13/26 | Promenade Shoppes at Pine Gardens | Miami-Fort Lauderdale-West Palm Beach, FL | 28 | 12,900 |
| 03/17/26 | Mission Bend Plaza | Houston-The Woodlands-Sugar Land, TX | 6 | 3,500 |
| 03/27/26 | Bald Hill Corner | Providence-Warwick, RI-MA | 12 | 9,734 |
| | 1Q 2026 Total | 238 | $142,424 |
| 04/07/26 | Village at Arbor Lakes | Minneapolis-St. Paul-Bloomington, MN-WI | 48 | $28,000 |
| 04/16/26 | Arroyo Ridge Shoppes | Las Vegas-Henderson-Paradise, NV | 37 | 18,000 |
| 04/20/26 | 5-Property Portfolio | Various, TX | 91 | 41,085 |
| 04/23/26 | Tech Plaza | Athens-Clarke County, GA | 12 | 6,675 |
| 04/30/26 | Westwind Village | Atlanta-Sandy Springs-Roswell, GA | 9 | 5,900 |
| 05/08/26 | Bridgewater Commons | Orlando-Kissimmee-Sanford, FL | 55 | 23,400 |
| 05/11/26 | Shops at Arrowhead | Phoenix-Mesa-Scottsdale, AZ | 13 | 10,200 |
| 05/11/26 | Shops at Albertville Crossing | Minneapolis-St. Paul-Bloomington, MN-WI | 12 | 3,585 |
| 05/15/26 | Shops at Middletown Station | Louisville/Jefferson County, KY-IN | 99 | 42,200 |
| 05/27/26 | Tuxedo Festival | Atlanta-Sandy Springs-Roswell, GA | 54 | 46,000 |
| 05/28/26 | Market at Olive Shops South | St. Louis, MO-IL | 12 | 7,550 |
| 05/28/26 | Market at Olive Shops North | St. Louis, MO-IL | 7 | 5,800 |
| 05/28/26 | Evergreen Shops | Portland-Vancouver-Hillsboro, OR-WA | 6 | 5,525 |
| 06/08/26 | Shops at HighPointe Park | Denver-Aurora-Lakewood, CO | 11 | 4,731 |
| 06/11/26 | 2-Property Portfolio | Sacramento-Roseville-Arden-Arcade, CA | 36 | 18,230 |
| 06/11/26 | Shops at Centennial | Denver-Aurora-Lakewood, CO | 16 | 6,370 |
| 06/12/26 | University Station | Austin-Round Rock, TX | 13 | 8,900 |
| 06/15/26 | Shops on Milliken | Riverside-San Bernardino-Ontario, CA | 14 | 9,400 |
| 06/18/26 | 24th Street Market | Houston-The Woodlands-Sugar Land, TX | 6 | 4,450 |
| 06/29/26 | Western Waveland Plaza | Chicago-Naperville-Elgin, IL-IN-WI | 18 | 10,450 |
| 06/29/26 | Greenfield Station | Milwaukee-Waukesha-West Allis, WI | 6 | 3,030 |
| 06/30/26 | Shops at Fountain Square | Waterbury-Shelton, CT | 56 | 30,500 |
| 06/30/26 | Clybourn Center | Chicago-Naperville-Elgin, IL-IN-WI | 33 | 18,000 |
| 06/30/26 | Shops at Highbury Centre | Salt Lake City-Murray, UT | 19 | 10,520 |
| 06/30/26 | 79th Street Center | Minneapolis-St. Paul-Bloomington, MN-WI | 20 | 5,619 |
| | 2Q 2026 Total | 703 | $374,120 |
| 07/15/26 | Shoppes at Crescent Park | Tampa-St. Petersburg-Clearwater, FL | 24 | $14,000 |
| 07/17/26 | Carpenter's Landing | Houston-The Woodlands-Sugar Land, TX | 16 | 7,735 |
| 07/17/26 | Shops at Asante Trails | Phoenix-Mesa-Scottsdale, AZ | 21 | 17,136 |
| 07/23/26 | Ironwood Shops | Fort Collins-Loveland, CO | 18 | 8,250 |
| | 3Q 2026 QTD | 79 | $47,121 |
| | 2026 YTD | 1,020 | $563,665 |
Notable Accounting Policies and Non-GAAP Measures
The information contained in the Quarterly Financial Supplement does not purport to disclose all items required by the accounting principles generally accepted in the United States of America (“GAAP”) and is unaudited information. The Company’s Quarterly Financial Supplement should be read in conjunction with the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
Performance Measures
FFO and Operating FFO
The Company believes that Funds from Operations (“FFO”) and Operating FFO, both non-GAAP financial measures, provide additional and useful means to assess the financial performance of REITs. FFO and Operating FFO are frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.
FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assume that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from property dispositions, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, interest costs and acquisition, disposition and development activities. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.
FFO is generally defined and calculated by the Company as net income attributable to Curbline (computed in accordance with GAAP), adjusted to exclude (i) gains and losses from disposition of real estate property, which are presented net of taxes, (ii) impairment charges on real estate property, (iii) gains and losses from changes in control and (iv) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles net of depreciation allocated to non-controlling interests. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT.
The Company believes that certain charges, income and gains/losses recorded in its operating results are not comparable or reflective of its core operating performance. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. As a result, the Company also computes Operating FFO and discusses it with the users of its financial statements, in addition to other measures such as net income (loss) determined in accordance with GAAP and FFO. Operating FFO is generally defined and calculated by the Company as FFO excluding certain charges, income and gains/losses that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio. Such adjustments include gains/losses on the early extinguishments of debt, transaction costs and other restructuring type costs, including employee separation costs. The disclosure of these adjustments is regularly requested by users of the Company’s financial statements. The adjustment for these charges, income and gains/losses may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. Additionally, the Company provides no assurances that these charges, income and gains/losses are non-recurring. These charges, income and gains/losses could be reasonably expected to recur in future results of operations.
These measures of performance are used by the Company for several business purposes and by other REITs. The Company uses FFO and/or Operating FFO in part (i) as a disclosure to improve the understanding of the Company’s operating results among the investing public, (ii) as a measure of a real estate asset’s performance, (iii) to influence acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs. For the reasons described above, management believes that FFO and Operating FFO provide the Company and investors with an important indicator of the Company’s operating performance. They provide recognized measures of performance other than GAAP net income, which may include non-cash items (often significant).
In calculating the expected range for or amount of net income attributable to Curbline to estimate projected FFO and Operating FFO for future periods, the Company does not include a projection of gains and losses from the disposition of real estate property, potential impairments and reserves of real estate property, debt extinguishment costs or transaction costs. Other real estate companies may calculate expected FFO and Operating FFO in a different manner.
Management recognizes the limitations of FFO and Operating FFO when compared to GAAP’s net income. FFO and Operating FFO do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO or Operating FFO as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP, and neither is necessarily indicative of cash available to fund cash needs. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company’s operating performance. The Company believes that to further understand its performance, FFO and Operating FFO should be compared with the Company’s reported net income (loss) and considered in addition to cash flows determined in accordance with GAAP, as presented in its condensed financial statements. Reconciliations of these measures to their most directly comparable GAAP measure of net income (loss) have been provided herein.
Net Operating Income (“NOI”) and Same-Property Net Operating Income (“SPNOI”)
The Company uses NOI, which is a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses and excludes depreciation and amortization expense, interest income and expense and corporate level transactions. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
The Company also presents NOI information on a same-property basis, or SPNOI. The Company defines SPNOI as property revenues less property-related expenses, which excludes depreciation and amortization expense, interest income and expense and corporate level transactions, as well as straight-line rental income and reimbursements and expenses, lease termination income, management fee expense and fair market value of leases. SPNOI only includes assets owned for the entirety of both comparable periods. Other real estate companies may calculate NOI and SPNOI in a different manner. The Company believes SPNOI provides investors with additional information regarding the operating performance of comparable assets because it excludes certain non-cash and non-comparable items as noted above. SPNOI is frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.
SPNOI is not, and is not intended to be, a presentation in accordance with GAAP. SPNOI information has its limitations as it excludes any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. SPNOI does not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use SPNOI as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. SPNOI does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. SPNOI should not be considered as an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. A reconciliation of NOI and SPNOI to its most directly comparable GAAP measure of net income (loss) has been provided herein.