SITE Centers Corp
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
SITC$0.67-81.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088552
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0000950170-24-118598
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 214 previous paragraphs and 247 current paragraphs.
111 unchanged; 68 reworded; 68 added; 33 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (68)
Current report
Curbline Spin-Off
Current report
As of September 30, 2024, the Curbline portfolio consisted of 79 wholly-owned convenience retail assets consisting of approximately 2.7 million square feet of GLA. The separation of Curbline was completed on October 1, 2024.
Current report
On October 1, 2024, the Company, Curbline and Curbline Properties LP (the “Operating Partnership”) entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”), which provided for the principal transactions necessary to consummate the spin-off, including the allocation among the Company, Curbline and the Operating Partnership of the Company’s assets, liabilities and obligations attributable to periods both prior to and following the spin-off. In particular, the Separation and Distribution Agreement provided, among other things, that certain assets relating to Curbline’s business were to be transferred to the Operating Partnership or the applicable Curbline subsidiary, including equity interests of certain Company subsidiaries that held assets and liabilities related to Curbline, interests in real property, certain tangible personal property, cash and cash equivalents held in Curbline accounts (including the transfer to Curbline of unrestricted cash of $800.0 million upon consummation of the spin-off) and other assets primarily used or held primarily for use in Curbline’s business. The Separation and Distribution Agreement also provided that certain liabilities relating to Curbline’s business were to be transferred to the Operating Partnership or the applicable Curbline subsidiary, including liabilities relating to or arising out of the operation of Curbline’s business after the effective time of the spin-off and liabilities expressly allocated to Curbline or one of its subsidiaries by the Separation and Distribution Agreement or certain other agreements entered into in connection with the spin-off.
Current report
Additionally, the Separation and Distribution Agreement contains provisions that obligate the Company to complete certain redevelopment projects at properties that are owned by Curbline. As of September 30, 2024, these redevelopment projects were estimated to cost $33.7 million to complete.
Current report
On October 1, 2024, the Company, Curbline and the Operating Partnership also entered into a Shared Services Agreement (the “Shared Services Agreement”), which provides that, subject to the supervision of the Company’s Board of Directors and executives, the Operating Partnership or its affiliates will provide the Company (i) leadership and management services that are of a nature customarily performed by leadership and management overseeing the business and operation of a REIT similarly situated to the Company, including supervising various business functions of the Company necessary for the day-to-day management operations of the Company and its affiliates and (ii) transaction services that are of a nature customarily performed by a dedicated transactions team within an organization similarly situated to the Company, including the provision of personnel at both the leadership and operational levels necessary to ensure effective and efficient preparation, negotiation, execution and implementation of real estate transactions, as well as overseeing post-transaction activities and alignment with the Company’s strategic objectives. It is expected that the Operating Partnership or its affiliates will provide the Company with a Chief Executive Officer and Chief Investment Officer but that the Company will employ its own Chief Financial Officer, Chief Accounting Officer and General Counsel.
Current report
The Shared Services Agreement also requires the Company to provide the Operating Partnership and its affiliates the services of its employees and the use or benefit of the Company’s assets, offices and other resources as may be necessary or useful to establish and operate various business functions of the Operating Partnership and its affiliates in a manner as would be established and operated for a REIT similarly situated to Curbline.
Current report
The Operating Partnership will have the authority to supervise the employees of the Company and its affiliates and direct and control the day-to-day activities of such employees while such employees are providing services to the Operating Partnership or its affiliates under the Shared Services Agreement.
Current report
The Operating Partnership will pay the Company a fee in the aggregate amount of 2.0% of Curbline’s Gross Revenue (as defined in the Shared Services Agreement) during the term of the Shared Services Agreement to be paid in monthly installments each month in arrears no later than the tenth calendar day of each month based upon Curbline’s Gross Revenue for the prior month. There is no separate fee paid by the Company in connection with the provision of services by the Operating Partnership or its affiliates under the Shared Services Agreement. Unless terminated earlier, the term of the Shared Services Agreement will expire on October 1, 2027. In the event of certain early terminations of the Shared Services Agreement, the Company will be obligated to pay a termination fee to the Operating Partnership equal to $2.5 million multiplied by the number of whole or partial fiscal quarters remaining in the Shared Services Agreement’s three-year term (or $12.0 million in the event the Company terminates the agreement for convenience on its second anniversary).
Current report
The Company, Curbline and the Operating Partnership also entered into a tax matters agreement, which governs the rights, responsibilities and obligations of the parties following the spin-off with respect to various tax matters and provides for the allocation of tax-related assets, liabilities and obligations. In addition, the Company, Curbline and the Operating Partnership entered into an employee matters agreement, which governs the respective rights, responsibilities, and obligations of the parties following the spin-off with respect to transitioning employees, equity plans and retirement plans, health and welfare benefits, and other employment, compensation, and benefit-related matters.
Current report
From July 1, 2023 to September 30, 2024, the Company generated approximately $3.1 billion of gross proceeds from sales of properties for the purpose of acquiring additional convenience properties, capitalizing Curbline and, together with proceeds from the closing and funding of the Mortgage Facility (defined below), redeeming and/or repaying all of the Company’s outstanding unsecured indebtedness. As of October 1, 2024, the Company had completed the sale of substantially all of the properties that had been in its active disposition pipeline prior to the spin-off of Curbline. Going forward, the Company intends to realize value through operations and to consider various factors, including market conditions and differences between the public and private valuations of its portfolio, in evaluating whether and when to pursue additional asset sales. The timing of any additional sales may also be impacted by interim leasing, tactical redevelopment activities and other asset management initiatives intended to maximize value. The Company expects to use proceeds from any additional asset sales to repay outstanding indebtedness and make distributions to shareholders.
Current report
Effected a reverse stock split of its common shares at a ratio of one-for-four;
Current report
Closed and funded a $530.0 million Mortgage Facility which had an outstanding principal balance of $206.9 million as of September 30, 2024;
Current report
Repaid in full the $200.0 million Term Loan (defined below) and terminated the Revolving Credit Facility (defined below) and recorded associated debt extinguishment costs of $0.9 million and $3.9 million, respectively;
Current report
Redeemed all of its remaining outstanding Senior Notes for total cash consideration including expenses of $1,223.0 million and recorded debt extinguishment costs of $6.7 million;
Current report
Provided notice of its intent to redeem all of its outstanding 6.375% Class A Cumulative Redeemable Preferred Shares and the associated depositary shares. In connection with the redemption, the Company expects to record a non-cash charge of approximately $6.1 million to net income attributable to common shareholders in the fourth quarter of 2024.
Current report
Leased approximately 2.3 million square feet of GLA, including 55 new leases and 208 renewals for a total of 263 leases. As of September 30, 2024, the Company has addressed substantially all of its remaining 2024 lease expirations.
Current report
Related primarily to write off of loan costs and commitment fees and payment of debt extinguishment costs due to the termination of the Mortgage Commitment ($21.2 million), the Revolving Credit Facility ($3.9 million), redemption of the Senior Notes ($6.7 million), pay-off of the Term Loan ($0.9 million) and the release of properties from the Mortgage Facility ($10.1 million).
Current report
(F)
Current report
The Company requires capital to fund its operating expenses and capital expenditures. The Company’s primary capital sources include cash flow from operations, debt financings and proceeds from asset sales. The Company remains committed to monitoring the duration of its indebtedness, to maintaining prudent leverage levels in an effort to manage its overall risk profile while maintaining strategic flexibility and to closely monitoring liquidity and its cash position following the termination of its Revolving Credit Facility in August 2024.
Current report
At September 30, 2024, the Company had an unrestricted cash balance of $1,063.1 million of which $800.0 million was used to capitalize Curbline Properties, approximately $21.0 million is expected to be used in the fourth quarter to pay outstanding transaction expenses relating to the spin-off of Curbline and approximately $176.3 million is expected to be used in November to redeem all of the Company’s outstanding preferred shares and associated depositary shares. The Company has addressed all of its consolidated debt maturing in 2024. As of September 30, 2024, the Company anticipates that it has approximately $33.7 million to be incurred to complete redevelopment projects at properties owned by Curbline pursuant to the terms of the Separation and Distribution Agreement. The Company believes it has sufficient liquidity to operate its business at this time.
Current report
On August 15, 2024, the Company terminated all of the lenders’ commitments under its unsecured revolving credit facility with a syndicate of financial institutions and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Facility”) and paid all related fees and expenses then outstanding. At the time of termination of the lenders’ commitments, there were no loans outstanding under the Revolving Credit Facility.
Current report
Repayment of Other Senior Unsecured Indebtedness
Current report
On August 21, 2024, the Company redeemed the entire outstanding principal amount of its 4.700% Notes due 2027 ($448.3 million). On August 23, 2024, the Company redeemed the entire outstanding principal amount of its 3.625% Notes due 2025 ($400.4 million) and 4.250% Notes due 2026 ($370.1 million).
Current report
Mortgage Facility
Current report
On August 7, 2024, the Company closed and funded a $530.0 million mortgage loan (the “Mortgage Facility”) provided by affiliates of Atlas SP Partners, L.P. and Athene Annuity and Life Company (collectively, the “Lenders”). The Company used proceeds from the closing together with cash on hand from asset sales to repay its outstanding senior unsecured indebtedness as described above and to capitalize Curbline.
Current report
In connection with the Mortgage Facility’s closing, certain wholly-owned subsidiaries of the Company (collectively, the “Borrowers”) delivered certain promissory notes (collectively, the “Notes”) evidencing their obligation to pay principal, interest and other amounts under the Mortgage Facility. The Notes are secured by, among other things, mortgages encumbering the Borrowers’ respective properties (a total of 23 properties at closing) (the “Properties”) and related personal property, leases and rents.
Current report
The Mortgage Facility will mature on September 6, 2026 subject to two one-year extensions at the Borrowers’ option (subject to satisfaction of certain conditions). The interest rate applicable to the Notes is equal to 30-day term SOFR (subject to a rate index floor of 3.50%) plus a spread of 2.75% per annum. The Borrowers are required to maintain an interest rate cap with respect to the principal amount of the Notes having a 30-day term SOFR strike rate equal to 6.25%. During the continuance of an event of default, the contract rate of interest on the Notes will increase to the lesser of (i) the maximum rate allowed by law or (ii) 4% above the interest rate then otherwise applicable.
Current report
The Mortgage Facility is structured as an interest only loan throughout the initial two-year term and any exercised extension periods. The principal amount outstanding under the Mortgage Facility may be prepaid (in whole or in part) by the Borrowers at any time without penalty, provided that prepayments made prior to the first anniversary of the closing date in excess of 35% of the initial principal amount of the Mortgage Facility will be subject to the Borrowers’ payment of a spread maintenance premium equal to 2.75% per annum based on the number of days remaining prior to the first anniversary of the closing date. So long as no event of default then exists and subject to other customary release conditions, the Borrowers may cause the Lenders to release Properties from the Mortgage Facility in connection with their sale by paying 115% of the initial loan amount allocated to such Property (plus the spread maintenance premium, if applicable) provided that after giving effect to such release the debt yield of the remaining Properties is equal to or greater than (i) the debt yield on the Mortgage Facility’s closing date and (ii) the debt yield in effect immediately prior to such release.
Current report
All Property rents will be deposited into lockbox accounts in the name of the Borrowers for the benefit of and controlled by the Lenders. So long as no Trigger Period (as defined below) is continuing, Borrowers shall have control over all funds in such lockbox accounts. During a Trigger Period, substantially all amounts in the lockbox accounts will be remitted to a cash management account controlled by the Lenders on a daily basis and will be used by the Lenders to fund monthly debt service, real estate taxes, insurance, required reserves, other amounts owing to the Lenders and other property-level operating costs, with all remaining amounts to be held by the Lenders as additional collateral for the Mortgage Facility. A “Trigger Period” commences (i) upon the occurrence of any event of default under the Mortgage Facility (and ends upon the cure or waiver of the event of default); (ii) when the debt yield falls below 10.5% (and ends when the debt yield exceeds 10.5% for one calendar quarter); or (iii) upon any bankruptcy action with respect to any Borrower or manager of a Property that has not been discharged within 60 days of filing.
Current report
Throughout the term of the Mortgage Facility, the Company is required to maintain (i) a net worth of not less than 15% of the then outstanding principal amount of the loan (but in no event less than $100.0 million) and (ii) minimum liquid assets of not less than 5% of the then outstanding principal amount of the loan (but in no event less than $15.0 million).
Current report
As of September 30, 2024, the Mortgage Facility had an outstanding principal balance of $206.9 million and was secured by 13 Properties.
Current report
Termination of Mortgage Commitment
Current report
In connection with the Mortgage Facility’s closing, the Company terminated the commitment (the “Mortgage Commitment”) that it had obtained from the Lenders in October 2023 to provide a $1.1 billion financing secured by 40 of the Company’s properties.
Current report
In addition to amounts outstanding under the Mortgage Facility, the Company had outstanding consolidated indebtedness at September 30, 2024 of $100.0 million, which consisted of a mortgage loan encumbering one property (Nassau Park Pavilion, Princeton, New Jersey), maturing in November 2028.
Current report
Increase in repayment of Senior Notes of $1.2 billion;
Current report
Proceeds from draws on the Revolving Credit Facility in 2023 of $135.0 million;
Current report
Proceeds from the termination of derivative contracts of $8.1 million;
Current report
Payment of debt extinguishment costs of $8.1 million in 2024;
Current report
Increase in debt issuance costs, commitment fees and Curbline loan costs of $24.6 million and
Current report
Prior to the commencement of trading on August 19, 2024, in anticipation of the Curbline spin-off transaction, the Company effected a reverse stock split of its common shares, at a ratio of one-for-four.
Showing the first 40 of 68 passages. Open the source sections for the rest.
Removed paragraphs (33)
Previous report
Plan to Separate Convenience Retail Portfolio
Previous report
In addition, in October 2023, the Company obtained a financing commitment for a $1.1 billion mortgage facility (the “Mortgage Facility”) which is expected to close prior to the consummation of the spin-off with loan and additional asset sale proceeds expected to be used to repay all of the Company’s outstanding unsecured indebtedness, including all outstanding public notes. In the first and second quarters of 2024, the Company released 13 properties that had previously been identified to serve as collateral for the Mortgage Facility, thereby reducing the committed amount to $554.8 million as of June 30, 2024. For the six months ended June 30, 2024, the Company wrote-off $9.3 million of fees to Other Income (Expense), net, on the Company’s Consolidated Statements of Operations because the maximum amount available to be borrowed under the Mortgage Facility decreased as a result of the release of assets that were originally identified in the lender’s commitment to serve as collateral for the Mortgage Facility.
Previous report
As of June 30, 2024, the Company had a portfolio of 72 wholly-owned convenience assets that are expected to be included in the Curbline portfolio, including properties separated or in the process of being separated from existing Company properties. The median property size within the Curbline portfolio as of June 30, 2024, was approximately 21,000 square feet with 92% of base rent generated by units less than 10,000 square feet. The Company intends to acquire additional convenience properties prior to the spin-off that will be included in the Curbline portfolio, funded through additional Company dispositions, retained cash flow and cash on hand. Following the separation of Curbline, the Company intends to realize value through operations and, depending on market conditions, the sale of additional assets. The timing of certain sales may be impacted by interim leasing, tactical redevelopment activities and other asset management initiatives intended to maximize value.
Previous report
Curbline is expected to be in a net cash position at the time of its separation from the Company with cash on hand, an unsecured, undrawn line of credit and an unsecured, delayed draw term loan. Curbline is not expected to have any debt outstanding at the time of its separation from the Company and therefore Curbline is expected to have significant capacity to utilize cash on hand and sources of debt capital in order to fund asset growth.
Previous report
The Company currently expects to complete the separation of Curbline on or around October 1, 2024.
Previous report
From July 1, 2023 to July 26, 2024, the Company has generated approximately $1.8 billion of gross proceeds from sales of grocery anchored, lifestyle, net lease and power center properties. Prior to the spin-off of Curbline, the Company expects to sell additional properties for the purpose of acquiring additional convenience properties, capitalizing Curbline and, together with proceeds from the closing of the Mortgage Facility, redeeming and/or repaying all of the Company’s outstanding unsecured indebtedness. The Company has received significant interest from a wide variety of private and institutional investors for the properties it has marketed for sale to date in 2024, which it believes is attributable to the quality of its portfolio, leasing prospects and the elevated cost to construct competing retail space. The Company expects that the volume of disposition activity will remain elevated in the third quarter of 2024, though asset sale closings remain subject to a number of uncertainties including capital markets conditions and the completion of buyer due diligence.
Previous report
Following the separation of Curbline, the Company intends to maximize value through operations and the sale of additional properties to the extent that market conditions and pricing are favorable. The Company expects to use any such sale proceeds to repay outstanding indebtedness (including the Mortgage Facility), redeem outstanding preferred stock and make distributions to shareholders. The timing of certain sales may be impacted by interim leasing, tactical redevelopment activities, and other asset management initiatives intended to maximize values. Unfavorable changes in interest rates or the capital markets could adversely impact the Company’s ability to sell additional assets on favorable terms or at all.
Previous report
Leased approximately 1.8 million square feet of GLA, including 37 new leases and 156 renewals for a total of 193 leases. As of June 30, 2024, the remaining 2024 lease expirations aggregated approximately 0.2 million square feet of GLA (representing approximately 22% of total 2024 annualized base rent expiring as of December 31, 2023) as compared to 1.5 million square feet of GLA as of December 31, 2023;
Previous report
For the comparable leases executed in the six months ended June 30, 2024, the Company generated cash lease spreads on a pro rata basis of 33.8% for new leases and 8.6% for renewals. Leasing spreads are a key metric in real estate, representing the percentage increase of rental rates on new and renewal leases over rental rates on existing leases, though leasing spreads exclude consideration of the amount of capital expended in connection with new leasing activity. The Company’s cash lease spreads calculation includes only those deals that were executed within one year of the date the prior tenant vacated, in addition to other factors that limit comparability, and as a result, is a useful benchmark to compare the average annualized base rent of expiring leases with the comparable executed market rental rates;
Previous report
Net Operating Income and Same Store Net Operating Income
Previous report
Definition and Basis of Presentation
Previous report
The Company uses Net Operating Income (“NOI”), which is a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. 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.
Previous report
The Company also presents NOI information on a same store basis, or Same Store Net Operating Income (“SSNOI”). The Company defines SSNOI as property revenues less property-related expenses, which excludes straight-line rental income (including reimbursements) and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI includes assets owned in comparable periods (15 months for quarter comparisons). In addition, SSNOI is presented including activity associated with redevelopment. SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI at its effective ownership interest provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above. SSNOI is frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.
Previous report
Reconciliation Presentation
Previous report
The Company’s reconciliation of net income computed in accordance with GAAP to NOI and SSNOI for the Company at 100% and at its effective ownership interest of the assets is as follows (in thousands):
Previous report
The SSNOI increase for the six months ended June 30, 2024, as compared to the prior-year period, primarily related to increases in annual base rents from lease renewals as well as rent commencements from anchors backfilling previously vacant space.
Previous report
The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders or repurchase or refinance long-term debt as part of its overall strategy to further strengthen its financial position. The Company remains committed to monitoring liquidity and the duration of its indebtedness and to maintaining prudent leverage levels in an effort to manage its overall risk profile while maintaining strategic flexibility.
Previous report
At June 30, 2024, the Company had an unrestricted cash balance of $1,181.3 million. The Company has availability under its Revolving Credit Facility of $950.0 million (subject to satisfaction of applicable borrowing conditions) and a commitment from lenders to fund the $554.8 million Mortgage Facility (as further described below), subject to the satisfaction of various closing conditions. The Company has addressed all of its consolidated debt maturing in 2024. In 2025, the Company has $400.4 million aggregate principal amount of senior notes maturing. As of June 30, 2024, the Company anticipates that it has approximately $5 million to be incurred on its pipeline of identified redevelopment projects. The Company believes it has sufficient liquidity to operate its business at this time. Through July 26, 2024, the Company purchased $88.3 million aggregate principal amount of its outstanding senior unsecured notes due in 2025, 2026 and 2027 for total cash consideration, including expenses, of $87.1 million.
Previous report
The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Facility”) that provides for borrowings of up to $950 million, which limit may be increased to $1.45 billion provided that existing or new lenders agree to provide incremental commitments and subject to other conditions precedent. The Revolving Credit Facility matures in June 2026 subject to two six-month options to extend the maturity to June 2027 at the Company's option (subject to the satisfaction of certain conditions). The Company’s borrowings under the Revolving Credit Facility bear interest at variable rates at the Company’s election, based on either (i) the Secured Overnight Financing Rate (“SOFR”) rate plus a 10-basis point credit spread adjustment plus an applicable margin (0.85% at June 30, 2024) or (ii) the alternative base rate plus an applicable margin (0.0% at June 30, 2024). The Revolving Credit Facility also provides for an annual facility fee, which was 20 basis points on the entire facility at June 30, 2024. The applicable margins and facility fee vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Investor Services Inc. (“Fitch”) (or their respective successors). The Revolving Credit Facility also features a sustainability-linked pricing component whereby the applicable interest-rate margin can be adjusted by one or two basis points if the Company meets certain sustainability performance targets.
Previous report
Mortgage Financing Commitment
Previous report
In October 2023, in preparation for the expected spin-off of the Company’s convenience properties, the Company obtained a commitment (the “Commitment”) from affiliates of Apollo, including ATLAS SP Partners, L.P., to provide a $1.1 billion Mortgage Facility to be secured by approximately 40 of the Company’s retail properties. The Company may proceed to close and draw all or a portion of the Mortgage Facility on any date prior to October 25, 2024 subject to the satisfaction of various closing conditions set forth in the Commitment, including debt yield and loan-to-value thresholds, the lender’s receipt of acceptable third-party reports and satisfaction of other customary closing requirements. To the extent that any of the collateral properties are sold prior to the closing of the Mortgage Facility, the amount available under the Commitment will be reduced. The Company currently expects to close and draw on the Mortgage Facility prior to the spin-off of Curbline, and to use loan and asset sale proceeds to redeem and/or repay all of its outstanding unsecured indebtedness and for general corporate purposes. In the first six months of 2024, the Company released 13 properties that had previously been identified to serve as collateral for the Mortgage Facility, thereby reducing the committed amount to $554.8 million as of June 30, 2024.
Previous report
As set forth in the Commitment, the Mortgage Facility will mature on the second anniversary of the closing date subject to a one-year extension option at the Company’s election and subject to the satisfaction of certain conditions at the time of the extension. Following closing, the Company will be able to effectuate the release of properties serving as collateral for the Mortgage Facility by making a principal prepayment based on the amount of the loan allocated to such property.
Previous report
The Company paid upfront commitment and structuring fees to the lender and its affiliates and will also pay the lender fees during the unfunded commitment period based on the committed loan amount (as such amount may be reduced from time to time by the Company) and a closing fee based on the amount of the loan funded at closing. The Company is not obligated to close or draw on the Mortgage Facility and no assurances can be given that the Company will satisfy the conditions to close the Mortgage Facility or that the Mortgage Facility will close on the terms set forth in the Commitment or at all. For the six months ended June 30, 2024, the Company wrote-off $9.3 million of fees to Other Income (Expense), net on the Company’s Consolidated Statements of Operations in connection with the decrease of the Mortgage Facility’s committed amount to $554.8 million as a result of the release of 13 properties that were originally identified to serve as collateral for the Mortgage Facility.
Previous report
As discussed above, the Company is committed to maintaining prudent leverage levels and may utilize proceeds from financings or the sale of properties or other investments to repay additional debt. These sources of funds could be affected by various risks and uncertainties. No assurance can be provided that the Company’s debt obligations will be refinanced or repaid as currently anticipated. See Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Previous report
The Company continually evaluates its debt maturities and, based on management’s assessment, believes it has viable financing and refinancing alternatives, including the Mortgage Facility. The Company remains committed to maintaining sufficient liquidity, managing debt duration and maintaining prudent leverage levels in an effort to manage its overall risk profile while maintaining strategic flexibility.
Previous report
Increase in repayment of mortgage debt of $25.0 million;
Previous report
Proceeds from Revolving Credit Facility in 2023 of $175.0 million;
Previous report
In October 2023, the Company announced a plan to separate its convenience assets into a separate, publicly traded REIT through the spin-off of Curbline. Prior to the spin-off of Curbline, the Company expects to use proceeds from the closing of the Mortgage Facility and additional asset sales to redeem and/or repay all of the Company’s outstanding unsecured indebtedness. The Company has experienced significant interest from a wide variety of private and institutional investors for the properties it has marketed for sale to date in 2024. As a result, the Company expects that the volume of disposition activity will remain elevated during the third quarter of 2024, though asset sale closings remain subject to a number of uncertainties including capital markets conditions and the completion of buyer due diligence. Following the separation of Curbline, depending on market conditions, the Company intends to sell additional assets and use the proceeds to repay outstanding indebtedness, redeem outstanding preferred stock and make distributions to shareholders. The timing of certain sales may be impacted by interim leasing, tactical redevelopment activities, and other asset management initiatives intended to maximize values.
Previous report
Curbline is expected to be in a net cash position at the time of its separation from the Company with cash on hand, an unsecured, undrawn line of credit and an unsecured, delayed draw term loan. Curbline is not expected to have any debt outstanding at the time of its separation from the Company and therefore Curbline is expected to have significant access to cash on hand and sources of debt capital in order to fund significant asset growth. The Company expects to acquire additional convenience properties prior to the spin-off that will be included in the Curbline portfolio, funded through additional Company dispositions, retained cash flow and cash on hand.
Previous report
In 2023, the Company’s portfolio was impacted by a significant tenant bankruptcy, and the Company expects to expend capital in coming periods in connection with leases executed to backfill these and other closures. Although the per square foot cost of leasing capital expenditures has been predominantly consistent with the Company’s historical trends, the high volume of the Company’s leasing activity in recent years will cause aggregate leasing capital expenditure levels to remain elevated. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred over the expected lease term for new leases executed during the six months ended June 30, 2024 and 2023, on a pro rata basis, was $5.98 and $5.90 per rentable square foot, respectively. The Company generally does not expend a significant amount of capital on lease renewals.
Previous report
The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize improvements in occupancy and operating results. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;
Previous report
The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all and other factors;
Previous report
The Company may fail to complete its previously announced spin-off of Curbline, or the closing of the related Mortgage Facility, which could adversely affect the market price of the Company's common shares;
Reworded paragraphs (68)
Previous wording
The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of owning, leasing, acquiring, redeveloping, developing and managing shopping centers. As of June 30, 2024, the Company’s portfolio consisted of 112 shopping centers (including 11 shopping centers owned through unconsolidated joint ventures). At June 30, 2024, the Company owned approximately 17.9 million square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture).
Current wording
The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of owning, leasing, acquiring, redeveloping, developing and managing shopping centers. As of September 30, 2024, the Company’s portfolio consisted of 112 shopping centers (including 11 shopping centers owned through unconsolidated joint ventures). At September 30, 2024, the Company owned approximately 11.5 million square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture).
Previous wording
For the six months ended June 30, 2024, the increase in net income attributable to common shareholders, as compared to the prior-year period, primarily was the result of the gains from dispositions of real estate recognized in 2024 and an increase in interest income partially offset by the impact of net property dispositions, the write-off of fees related to the Mortgage Facility commitment, Curbline transaction costs and impairment charges (each as defined below).
Current wording
For the nine months ended September 30, 2024, the increase in net income attributable to common shareholders, as compared to the prior-year period, primarily was the result of the gains from dispositions of real estate recognized in 2024 and an increase in interest income, partially offset by the impact of net property dispositions, the write-off of fees related to the Mortgage Commitment (defined below), debt extinguishment costs, Curbline (defined below) spin-off transaction costs and impairment charges.
Previous wording
In October 2023, the Company announced a plan to spin off its convenience assets into a separate, publicly traded REIT to be named Curbline Properties Corp. (“Curbline”) in recognition of the distinct characteristics and opportunities within the Company’s unanchored and grocery and power center portfolios. Convenience properties are generally positioned on the curbline of well-trafficked intersections, and major vehicular corridors, offering enhanced access and visibility along with dedicated parking. The properties generally consist of a homogeneous row of primarily small-shop units leased to a diversified mixture of national and local service and restaurant tenants that cater to daily convenience trips from the growing suburban population. The property type’s site plan and depth of leasing prospects that can utilize existing square footage generally reduce operating capital expenditures relative to other retail real estate formats and provide significant tenant diversification.
Current wording
In October 2023, the Company announced a plan to spin off a portfolio of convenience retail assets into a separate, publicly traded company to be named Curbline Properties Corp. (“Curbline” or “Curbline Properties”) in recognition of the distinct characteristics and opportunities within the Company’s unanchored and grocery, lifestyle and power center portfolios. Convenience properties are generally positioned on the curbline of well-trafficked intersections, and major vehicular corridors, offering enhanced access and visibility along with dedicated parking and often include drive-thru units. The properties generally consist of a homogeneous row of primarily small-shop units leased to a diversified mixture of national and local service and restaurant tenants that cater to daily convenience trips from the growing suburban population.
Previous wording
In the event the Company is able to complete such asset sales, it expects that rental income and net income in subsequent periods will likely decrease, though the extent of any such reduction will depend on several factors including the manner in which the Company uses sale proceeds. The Company expects that its future dividend policy will be influenced by operations, the anticipated spin-off of Curbline and future asset sales, though the Company’s distribution of sale proceeds to shareholders will be subject to restrictions set forth in the terms of the Company’s indebtedness and preferred stock financings and management of liquidity and overall leverage levels in connection with ongoing operations.
Current wording
The Company expects that rental income and net income will decrease in future periods as a result of the spin-off of Curbline and the significant volume of dispositions completed in recent quarters. The Company expects that its future dividend policy will be influenced by operations and asset sales, though the Company’s distribution of any sale proceeds to shareholders will be subject to restrictions set forth in the terms of the Company’s indebtedness and management of liquidity and overall leverage levels in connection with ongoing operations.
Previous wording
Transactional and investment highlights for the Company through July 26, 2024, include the following:
Current wording
Transactional and investment highlights for the Company through October 25, 2024, in addition to the Curbline spin-off, include the following:
Previous wording
Acquired eight convenience centers and a fee interest in a land parcel in Arizona, Florida, Georgia, Illinois; Ohio, Tennessee and Texas for an aggregate purchase price of $75.1 million, as well as the joint venture partners 80% interest in a property in North Carolina for $35.4 million;
Current wording
Acquired 13 convenience centers and a fee interest in a land parcel in Arizona, California, Colorado, Florida, Georgia, Illinois, Ohio, Tennessee and Texas for an aggregate purchase price of $193.6 million, as well as the joint venture partner’s 80% interest in a property in North Carolina (Meadowmont Village) for $35.4 million;
Previous wording
Sold 17 wholly-owned shopping centers (excluding certain retained convenience parcels), a parcel at a shopping center and two joint venture assets for an aggregate sales price of $1,031.8 million ($967.2 million at the Company’s share), including the DDRM Properties Joint Venture’s sale of Meadowmont Village (Chapel Hill, North Carolina) to the Company for $44.2 million ($8.8 million at the Company’s share);
Current wording
Sold 40 wholly-owned shopping centers (excluding certain retained convenience parcels), a parcel at a shopping center and two joint venture assets for an aggregate sales price of $2,325.9 million ($2,261.3 million at the Company’s share);
Previous wording
Repurchased $88.3 million aggregate principal amount of outstanding senior unsecured notes due in 2025, 2026 and 2027 for total cash consideration including expenses of $87.1 million and recorded a gain on retirement of debt of $1.0 million; and
Current wording
Repurchased $88.3 million aggregate principal amount of outstanding senior notes due in 2025, 2026 and 2027 (the “Senior Notes”) for total cash consideration including expenses of $87.1 million and recorded a gain on debt retirement of $1.0 million;
Previous wording
Repaid two wholly-owned mortgages due in 2025 for $25.5 million and a joint venture mortgage for DDRM Properties Joint Venture due in 2024 for $40.9 million ($8.2 million at the Company’s share).
Current wording
Repaid two wholly-owned mortgages due in 2025 for $25.5 million in aggregate and a joint venture mortgage loan for DDRM Properties Joint Venture due in 2024 for $40.9 million ($8.2 million at the Company’s share) and
Previous wording
The Company believes its recent strong leasing results are attributable to the concentration of the Company’s portfolio in suburban, high household income communities which have witnessed significant populations growth, changes in remote work and work-from-home trends, limited new construction of competing retail properties and to national tenants’ strong financial positions and increasing emphasis and reliance on physical store locations.
Current wording
The Company believes its recent strong leasing results are attributable to national tenants’ strong financial positions and increasing emphasis and reliance on physical store locations and the concentration of the Company’s portfolio in primarily suburban, high household income communities which have witnessed significant population growth, changes in remote work and work-from-home trends, and limited new construction of competing retail properties.
Previous wording
Total portfolio average annualized base rent per square foot increased to $21.98 at June 30, 2024, as compared to $20.35 at December 31, 2023 and $19.89 at June 30, 2023, all on a pro rata basis;
Current wording
Total portfolio average annualized base rent per square foot increased to $24.83 at September 30, 2024, as compared to $20.35 at December 31, 2023 and $20.20 at September 30, 2023, all on a pro rata basis;
Previous wording
The aggregate occupancy of the Company’s operating shopping center portfolio was 90.9% at June 30, 2024, as compared to 92.0% at December 31, 2023 and 92.3% at June 30, 2023, all on a pro rata basis and
Current wording
The aggregate occupancy of the Company’s operating shopping center portfolio was 91.1% at September 30, 2024, as compared to 92.0% at December 31, 2023 and 92.2% at September 30, 2023, all on a pro rata basis and
Previous wording
The changes in base and percentage rental income for the six months ended June 30, 2024, were due to the following (in millions):
Current wording
The changes in base and percentage rental income for the nine months ended September 30, 2024, were due to the following (in millions):
Previous wording
At June 30, 2024 and 2023, the Company owned 101 and 108 wholly-owned properties, respectively, with an aggregate occupancy rate of 90.9% and 92.4%, respectively, and average annualized base rent per occupied square foot of $22.21 and $19.97, respectively.
Current wording
At September 30, 2024 and 2023, the Company owned 101 and 106 wholly-owned properties, respectively, with an aggregate occupancy rate of 91.2% and 92.3%, respectively, and average annualized base rent per occupied square foot of $25.58 and $20.29, respectively.
Previous wording
Recoveries from tenants were approximately 80.1% and 81.2% of operating expenses and real estate taxes for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Recoveries from tenants were approximately 79.5% and 82.0% of operating expenses and real estate taxes for the nine months ended September 30, 2024 and 2023, respectively. The decrease in recoveries from tenants is attributable to property dispositions that occurred in 2024.
Previous wording
Fee and Other Income was primarily earned from the Company’s unconsolidated joint ventures. Decreases in the number of assets under management will impact the amount of revenue recorded in future periods. The Company’s joint venture partners may also elect to terminate their joint venture management arrangements with the Company in connection with a change in investment strategy or otherwise.
Current wording
Fee and Other Income was primarily earned from the Company’s unconsolidated joint ventures. Changes in the number of assets under management will impact the amount of revenue recorded in future periods. The Company’s joint venture partners may also elect to terminate their joint venture management arrangements with the Company in connection with a change in investment strategy or otherwise.
Previous wording
The changes for the six months ended June 30, 2024, were due to the following (in millions):
Current wording
The changes for the nine months ended September 30, 2024, were due to the following (in millions):
Previous wording
General and administrative expenses for the six months ended June 30, 2024 and 2023, were approximately 8.5% and 7.6% of total revenues (excluding uncollectible revenue), respectively, including total revenues of unconsolidated joint ventures for the comparable periods. In May 2023, the Company initiated a restructuring plan that included a voluntary retirement offer and recorded a charge to general and administrative costs of $2.9 million in the second quarter of 2023. For the six months ended June 30, 2023, general and administrative expenses of $24.7 million, less the separation charges of $2.9 million, were approximately 6.7% of total revenues described above. The Company continues to expense certain internal leasing salaries, legal salaries and related expenses associated with leasing space.
Current wording
General and administrative expenses for the nine months ended September 30, 2024 and 2023, were approximately 10.0% and 7.3% of total revenues (excluding uncollectible revenue), respectively, including total revenues of unconsolidated joint ventures for the comparable periods. In May 2023, the Company initiated a restructuring plan that included a voluntary retirement offer and recorded a charge to general and administrative costs of $4.0 million for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, the Company recorded separation and other charges of $1.3 million.
Previous wording
The Company’s overall balance sheet strategy is to continue to maintain substantial liquidity and prudent leverage levels and average debt maturities. The weighted-average interest rate (based on contractual rates and excluding fair market value of adjustments and debt issuance costs) was 4.3% at June 30, 2024 and 2023. At June 30, 2024, the weighted-average maturity (without extensions) was 2.1 years. Interest costs capitalized in conjunction with redevelopment projects were $0.2 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and were $0.5 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively.
Current wording
In the third quarter of 2024, the Company simplified its debt structure. As of September 30, 2024, the Company had only two mortgages outstanding (the Mortgage Facility and a mortgage loan encumbering Nassau Park Pavilion) with a weighted average interest rate (based on contractual rates and excluding fair market value adjustments and debt issuance costs) of 7.5% at September 30, 2024. At September 30, 2024, the weighted-average term (without extensions) was 2.6 years. At September 30, 2023, the weighted average interest rate (based on contractual rates and excluding fair market value adjustments and debt issuance costs) was 4.3%.
Previous wording
Related to excess cash as a result of sale proceeds maintained in money market accounts.
Current wording
Income earned related to excess cash as a result of sale proceeds maintained in money market accounts.
Previous wording
Related to the repurchase of unsecured notes due in 2025, 2026 and 2027 for total cash consideration, including expenses, of $87.1 million and fair value discount write-off.
Current wording
Related to the repurchase of a portion of the Senior Notes for total cash consideration, including expenses, of $87.1 million and the write-off of a fair value discount.
Previous wording
Derivative mark-to-market impact related to the partial hedge on the potential interest rate impact to yield maintenance premiums on outstanding unsecured notes.
Current wording
Derivative mark-to-market impact related to the partial hedge on the potential interest rate impact to yield maintenance premiums on the Senior Notes. The hedge was terminated in conjunction with the redemption of the Senior Notes and the Company received a cash payment of $1.3 million during the three months ended September 30, 2024.
Previous wording
In 2024, primarily consists of expense of $9.3 million of fees related to the $1.1 billion Mortgage Facility commitment and transaction costs relating to the anticipated spin-off of Curbline.
Current wording
In 2024, primarily consists of $30.3 million of transaction costs relating to the spin-off of Curbline.
Previous wording
The reduction of income is the result of gains recognized in 2023 from assets sales. During the six months ended June 30, 2023, the DDRM Properties Joint Venture sold five shopping centers for an aggregate sales price of $112.2 million ($22.4 million at the Company’s share). During the six months ended June 30, 2024, the DDRM Properties Joint Venture sold one shopping center for $36.5 million ($7.3 million at the Company’s share) in addition to selling its remaining asset to the Company for $44.2 million ($35.4 million at the Company’s share), for which the Company recorded a Gain on sale and change in control of interest. At June 30, 2024 and 2023, the Company had an economic investment in unconsolidated joint ventures which owned 11 and 13 shopping center properties, respectively. Joint venture property sales could significantly impact the amount of income or loss recognized in future periods and the amount of sale proceeds allocated to the Company may vary based on joint venture return calculations and promoted structures.
Current wording
The reduction of income is the result of gains recognized in 2023 from joint venture assets sales. During the nine months ended September 30, 2023, the DDRM Properties Joint Venture sold five shopping centers for an aggregate sales price of $112.2 million ($22.4 million at the Company’s share). During the nine months ended September 30, 2024, the DDRM Properties Joint Venture sold one shopping center for $36.5 million ($7.3 million at the Company’s share) in addition to selling its remaining asset to the Company for $44.2 million ($35.4 million at the Company’s share), for which the Company recorded a Gain on sale and change in control of interest. At September 30, 2024 and 2023, the Company had an economic investment in unconsolidated joint ventures which owned 11 and 13 shopping center properties, respectively. Joint venture property sales could significantly impact the amount of income or loss recognized in future periods and the amount of sale proceeds allocated to the Company may vary based on joint venture return calculations and promoted structures.
Previous wording
The Company sold 15 wholly-owned shopping centers (excluding certain retained convenience parcels) and one parcel at a wholly-owned shopping center in 2024. See “— Sources and Uses of Capital” included elsewhere herein.
Current wording
The Company sold 40 wholly-owned shopping centers (excluding certain retained convenience parcels) and one parcel at a wholly-owned shopping center in 2024. See “— Sources and Uses of Capital” included elsewhere herein.
Previous wording
The increase in net income attributable to SITE Centers, as compared to the prior-year period, was primarily the result of the gains from dispositions and interest income, partially offset by the impact from net property dispositions and impairment charges.
Current wording
The increase in net income attributable to SITE Centers, as compared to the prior-year period, was primarily the result of the gains from dispositions and higher interest income, partially offset by the impact of net property dispositions, debt extinguishment costs (including the write-off of fees related to the Mortgage Commitment), Curbline Properties spin-off transaction costs and impairment charges.
Previous wording
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by the National Association of Real Estate Investment Trusts ("NAREIT").
Current wording
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income from joint ventures and equity income from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by the National Association of Real Estate Investment Trusts (“NAREIT”).
Previous wording
The decrease in FFO for the six months ended June 30, 2024, as compared to the prior-year period, was primarily attributable to the impact from net property dispositions and the write-off of $9.3 million in fees related to the $1.1 billion Mortgage Facility commitment, partially offset by increased interest income. The decrease in Operating FFO for the six months ended June 30, 2024, as compared to the prior-year period, was primarily attributable to the impact from net property dispositions, partially offset by increased interest income.
Current wording
The decrease in FFO for the nine months ended September 30, 2024, as compared to the prior-year period, was primarily attributable to the impact from net property dispositions, transaction costs related to the Curbline Properties spin-off and debt extinguishment costs, partially offset by increased interest income. The decrease in Operating FFO for the nine months ended September 30, 2024, as compared to the prior-year period, was primarily attributable to the impact from net property dispositions, partially offset by increased interest income.
Previous wording
(B) For the three and six months ended June 30, 2024, includes $8.6 million and $9.3 million, respectively, of expense relating to the write-off of Mortgage Facility fees, and $3.8 million and $6.5 million, respectively of transaction costs relating to the expected spin-off of Curbline Properties.
Current wording
(B) For the three and nine months ended September 30, 2024, includes $32.6 million and $43.0 million, respectively, of debt extinguishment costs and $23.2 million and $30.3 million, respectively of transaction costs relating to the spin-off of Curbline.
Previous wording
The Company’s consolidated and unconsolidated debt obligations generally require monthly or semi-annual payments of principal and/or interest over the term of the obligation. While the Company currently believes it has several viable sources to obtain capital and fund its business, including capacity under its Revolving Credit Facility (as defined below), no assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any new debt financings, including the Mortgage Facility, may also entail higher rates of interest than the indebtedness being refinanced, which could have an adverse effect on the Company’s operations.
Current wording
The Company’s consolidated and unconsolidated debt obligations generally require monthly payments of principal and/or interest over the term of the obligation. While the Company currently believes it has several options to obtain capital and fund its business, no assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any new debt financings may also entail higher rates of interest than the indebtedness being refinanced, which could have an adverse effect on the Company’s operations. See Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
The Company has historically accessed capital sources through both the public and private markets. Acquisitions and redevelopments are generally financed through cash provided from operating activities, the Revolving Credit Facility, mortgages assumed, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was $1.5 billion and $1.6 billion at June 30, 2024 and December 31, 2023, respectively.
Current wording
The Company expects that redevelopment activities and capital expenditures will generally be financed through cash provided from operating activities and asset sales. Total consolidated debt outstanding was $0.3 billion and $1.6 billion at September 30, 2024 and December 31, 2023, respectively.
Previous wording
Revolving Credit Facility and Term Loan
Current wording
Termination of Revolving Credit Facility and Term Loan
Previous wording
The Company also maintains a $200 million unsecured term loan with a syndicate of financial institutions and Wells Fargo Bank, National Association, as administrative agent (the “Term Loan”), that bears interest at variable rates, based on the Company’s long-term senior unsecured debt ratings, equal to (i) the SOFR rate plus a 10-basis point credit spread adjustment plus an applicable margin (0.95% at June 30, 2024) or (ii) the alternative base rate plus an applicable margin (0.0% at June 30, 2024). The applicable margins vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s, S&P and Fitch (or their respective successors). In August 2022, the Company swapped the portion of the Term Loan’s interest rate calculated by reference to the variable SOFR rate to a fixed rate of 2.75% per annum. The Term Loan matures in June 2027. The Company may increase the principal amount of the Term Loan in the future to up to $800 million in the aggregate provided that existing or new lenders are identified to provide additional loan commitments subject to other customary conditions precedent. The Term Loan also features a sustainability-linked pricing component whereby the applicable interest rate margin can be adjusted by one to two basis points if the Company meets certain sustainability performance targets. The covenants governing the Term Loan are substantially identical to those governing the Revolving Credit Facility.
Current wording
On August 15, 2024, the Company also repaid in full all outstanding amounts under its unsecured term loan with a syndicate of financial institutions and Wells Fargo Bank, National Association, as administrative agent (the “Term Loan”). At the time of the repayment, the principal amount of the Term Loan was approximately $200.0 million.
Previous wording
The Revolving Credit Facility, the Term Loan and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants including, among other things, leverage ratios and debt service coverage and fixed-charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in certain mergers and acquisitions. The Revolving Credit Facility, the Term Loan and the indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the financial and operating covenants and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay, when due, certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain further funding and/or an acceleration of any outstanding borrowings may occur. As of June 30, 2024, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company believes it will continue to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities.
Current wording
The Company is required to comply with certain other covenants under the Mortgage Facility. The Company was in compliance with these covenants at September 30, 2024.
Previous wording
The outstanding indebtedness of the Company’s unconsolidated joint ventures at June 30, 2024, which matures in the subsequent 13-month period (i.e., through July 2025), consists of $61.7 million ($30.7 million at SITE Centers’ share) for RVIP IIIB, which is expected to be extended in accordance with the loan documents.
Current wording
The outstanding indebtedness of the Company’s unconsolidated joint ventures at September 30, 2024, which matures in the subsequent 13-month period (i.e., through October 2025), consists of $61.4 million ($30.6 million at SITE Centers’ share) for RVIP IIIB, which is expected to be extended in accordance with the loan documents.
Previous wording
No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any future deterioration in property-level revenues may cause one or more of these joint ventures to be unable to refinance maturing obligations or satisfy applicable covenants, financial tests or debt service requirements or loan maturity extension conditions in the future, thereby allowing the mortgage lender to assume control of property cash flows, limit distributions of cash to joint venture members, declare a default, increase the interest rate or accelerate the loan’s maturity. In addition, rising interest rates or challenged transaction markets may adversely impact the ability of the Company’s joint ventures to sell assets at attractive prices in order to repay indebtedness.
Current wording
No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any future deterioration in property-level revenues may cause the Company or one or more of its joint ventures to be unable to refinance maturing obligations or satisfy applicable covenants, financial tests or debt service requirements or loan maturity extension conditions in the future, thereby allowing the mortgage lender to assume control of property cash flows, limit distributions of cash to joint venture members, declare a default, increase the interest rate or accelerate the loan’s maturity. In addition, rising interest rates or challenged transaction markets may adversely impact the ability of the Company or its joint ventures to sell assets at attractive prices in order to repay indebtedness.
Previous wording
Changes in cash flow for the six months ended June 30, 2024, compared to the prior comparable period, are as follows:
Current wording
Changes in cash flow for the nine months ended September 30, 2024, compared to the prior comparable period, are as follows:
Previous wording
Operating Activities: Cash provided by operating activities decreased $20.4 million primarily due to lower rental income as a result of disposition activity partially offset by an increase in interest income.
Current wording
Operating Activities: Cash provided by operating activities decreased $48.9 million primarily due to lower rental income as a result of disposition activity partially offset by an increase in interest income.
Previous wording
Investing Activities: Cash provided by investing activities increased $839.0 million primarily due to the following:
Current wording
Investing Activities: Cash provided by investing activities increased $1.9 billion primarily due to the following:
Previous wording
Decrease in real estate assets acquired, developed and improved of $4.5 million;
Current wording
Increase in real estate assets acquired, developed and improved of $101.1 million;
Showing the first 40 of 68 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
For new leases executed in the six months ended June 30, 2024, the Company expended a weighted-average cost of tenant improvements and lease commissions estimated at $5.98 per rentable square foot, on a pro rata basis, over the lease term, as compared to $4.90 per rentable square foot for the full year of 2023. The Company generally does not expend a significant amount of capital on lease renewals.
Previous report — wording carried elsewhere
SSNOI is not, and is not intended to be, a presentation in accordance with GAAP. SSNOI 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. SSNOI does not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use SSNOI as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. SSNOI does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. SSNOI should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. A reconciliation of NOI and SSNOI to their most directly comparable GAAP measure of net income (loss) is provided below.