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| And at this point, the signals are very strong that the private market values assets at a higher value |
| So every in here, we feel really good about the overall metrics on Page 15, Floris, which makes the comparisons, I guess, difficult to your point or David's point |
| We feel strongly about the financial returns of that investment |
| Our property operations teams continue to do a great job getting tenants open for business ahead of schedule, which drove part of our outperformance this quarter |
| As announced, to seize this opportunity, we are creating Curbline Properties as a unique first-mover REIT that is differentiated from all other retail REITs and has what we believe to be the highest organic cash flow growth potential driven by annual bumps, the ability to recapture and mark-to-market units, a high-quality and diversified tenant roster with minimal concentration risk and limited CapEx needs as compared to other property types |
| So we're really happy with the portfolio we have |
| All these assets share common characteristics, including excellent visibility, access and what we believe are compelling economics, highlighted by limited CapEx needs |
| So again, we feel really good about each of those carve-outs |
| And combined with the balance sheet that is truly unmatched with no outstanding debt and cash and a preferred investment on hand, Curbline Properties is expected to generate best-in-class growth and returns for stakeholders |
| We strongly believe that the compelling opportunity in front of us is to create significant value for the company's stakeholders |
| Starting with Curbline, we began investing in convenience assets over five years ago, and after several years of transaction activity, reviewing data analytics and financial and tenant analysis, we are more convinced than ever that the convenience sector is both differentiated and a unique growth opportunity |
| Going forward, we remain encouraged by the unique opportunities in the convenience subsector, including the size of the opportunity itself |
| Leasing demand continues to be very strong from both existing retailers and service tenants expanding into key suburban markets, along with new concepts competing for the same space |
| These two factors combined, our knowledge of the buyer universe plus sector and specific tailwinds, makes us very confident in maximizing value on additional SITE Centers properties via private market asset sales |
| The macro tailwinds, along with company-specific factors like sites SNO pipeline, which represents 4.2% of spin adjusted base rent, along with redevelopment deliveries and the lease-up of vacant units are expected to generate substantial forward NOI growth |
| Ending with the quarter and operations, we had a very productive fourth quarter with results ahead of budget |
| Through that process, John Cattonar and his team have gained a very good understanding of which buyers are seeking high-quality assets |
| So it feels to me like the bid-ask spread has come in, the amount of capital looking for core real estate has gone up, the confidence level of core buyers that the sector has really good fundamentals and tailwinds seems higher, and therefore, it feels to me like the transaction activity is likely to stay pretty high |
| So we're very happy with the credit quality, the growth quality, the submarkets, the locations, the daily traffic, the cell phone data that we've been tracking for years, as you know |
| The lease-up has been so robust in the last two or three years that the duration is pretty strong |
| The spin-off of Curbline Properties is possible due to the work of truly everyone across the organization, and it positions us for growth |
| As of today, the pace of dispositions has remained robust, and the pricing of those assets has remained strong, resulting in almost $750 million of real estate currently either under LOI or in contract negotiation at a blended cap rate of roughly 7% |
| Arguably, what we own today represents the largest, highest-quality convenience portfolio in the United States |
| I think to David's point around the level of activity we're seeing, we feel pretty good that the likely Curb is just cash and no press |
| The SITE Centers portfolio fits that mold, having been carefully selected via the RVI spin-off and our joint venture unwinds and remained extremely attractive to a wide range of buyers looking to invest in open-air retail real estate |
| Overall, leasing activity and economics remain elevated, and we remain confident on the backfill of the remaining vacancies, highlighting the quality of the portfolio and depth of demand |
| As David noted, the fourth quarter OFFO was ahead of budget due to better-than-expected operations and higher interest income, partially offset by higher operating and G&A expenses |
| You can see how much activity we have going on right now at values that I think are very strong |
| inventory meaning we have plenty of room to grow |
| As David noted, we are extremely excited to form and scale the first publicly traded REIT focused exclusively on convenience assets |
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| Despite the strength of execution from our leasing team, our lease rate was down 10% -- 10 basis points sequentially due to a 50-basis-point headwind from significant fourth quarter asset sales, which averaged 98% leased |
| Fourth quarter leasing volume was lower due to the significant dispositions that David highlighted in the back half of the year, along with less available space |
| And the biggest reason, and this is something Dave and I both alluded to in our prepared remarks, is it's just losing relevance |
| The biggest one being simply just the SNO pipeline and the collapse of the kind of lease and occupancy rate |
| Overall quarterly leasing volume was down sequentially, but this was largely a function of a smaller portfolio and less availability |
| With this small denominator, operating metrics will become more volatile |
| And the weaker tenants like Bed Bath & Beyond have largely left the portfolio |
| The challenge is simply one of time management |
| So it really comes down to simply how much time does John's team have to transact, and is it one-by-one or is it in small groups or larger portfolios? So it's really difficult for me to say, other than if we closed $800 million in the fourth quarter, we've got another $750 million that's spoken for, and then we've got another $800 million that's in an early stage of marketing, it feels like there's still plenty of volume out there |
| And there are some assets that we -- that are not included in that, that're probably worse |
| It's difficult to pin down cap rates when the number of transactions are a handful here and there |
| I apologize |
| But I would just give you, again, that caveat that the relevance we think of the metric is pretty low and the volatility of same-store be so dramatic over the course of '24 based off asset sales that we just don't think it's a relevant number or to provide at this time |
| It's just the volatility around operating metrics for SITE Centers is really going to grow and as a result, it's dropped in terms of relatives |
| I'll be curious, but I don't really know |
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