What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-14 compared with 2023-02-21 · 134 added, 184 removed, 349 unchanged (48% of the section changed)

9 unchanged sentences

Executive Summary

InvenTrust is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a grocery component.

We pursue our business strategy by:

• Acquiring retail properties in Sun Belt markets;

• Opportunistically disposing of retail properties;

• Maintaining a flexible capital structure;

• Enhancing our environmental, social and governance practices and standards.

InvenTrust Properties Corp.

is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a grocery component.

We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, maintaining a flexible capital structure, and enhancing our environmental, social and governance practices and standards.

Current Strategy and Outlook

InvenTrust focuses on Sun Belt grocery-anchored neighborhood and community centers, and select power centers that often have a grocery component, in markets with favorable demographics, including above average growth in population, employment, income and education levels.

InvenTrust focuses on Sun Belt markets with favorable demographics, including above average growth in population, employment, income and education levels.

We believe these conditions create favorable demand characteristics for grocery-anchored and necessity-based essential retail centers, which will position us to capitalize on potential future rent increases while benefiting from sustained occupancy at our centers.

2 unchanged sentences

Evaluation of Financial Condition and Operating Results

Historically, management has evaluated our financial condition and operating performance by focusing on the following financial and non-financial indicators, discussed in further detail herein:

In addition to measures of operating performance determined in accordance with U.S generally accepted accounting principles ("GAAP"), management evaluates our financial condition and operating performance by focusing on the following financial and non-financial indicators, discussed in further detail herein:

• Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP measures;

1 unchanged sentence

• Core FFO Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;

• Cash flow from operations as determined in accordance with GAAP;

• Economic and leased occupancy and rental rates;

5 unchanged sentences

Recent Developments

Joint Venture Acquisition and IAGM Dispositions

On January 18, 2023, we acquired the four remaining retail properties from IAGM for an aggregate purchase price of $222.3 million by acquiring 100% of the membership interests in each of IAGM's wholly owned subsidiaries.

Subsequent to the transaction, IAGM proportionately distributed substantially all net proceeds from the sale, of which the Company's share was approximately $71.4 million .

On December 15, 2023, IAGM was fully liquidated.

During the year ended December 31, 2023, IAGM disposed of the following properties:

Date Property Metropolitan Area Square Feet Gross

Disposition Price (a) Gain on Sale

January 18, 2023 Bay Colony Houston, TX 416 $ 79,100 $ 22,327

January 18, 2023 Blackhawk Town Center Houston, TX 127 26,300 12,632

January 18, 2023 Cyfair Town Center Houston, TX 433 79,200 4,713

January 18, 2023 Stables Town Center Houston, TX 148 37,000 5,536

Total 1,124 $ 221,600 $ 45,208

(a) Disposition price and square feet for the joint venture disposition activity are reflected at 100%.

Acquisitions and Mortgage Assumptions

2 unchanged sentences

Acquisition Price Assumption of Mortgage Debt

February 2, 2022 Shops at Arbor Trails Costco,

Whole Foods Market Austin-Round Rock, TX 357 $ 112,190 $ 31,500

February 2, 2022 Escarpment Village HEB Austin-Round Rock, TX 170 77,150 26,000

April 21, 2022 The Highlands of Flower Mound (a) Target Dallas-Fort Worth-Arlington, TX 175 38,000 22,880

May 4, 2022 Bay Landing The Fresh Market Cape Coral-Fort Myers, FL 63 10,425 —

June 10, 2022 Kyle Marketplace - Outparcel N/A Austin-Round Rock, TX — 705 —

October 28, 2022 Eastfield Village Food Lion Charlotte-Gastonia-Concord, NC 96 22,500 —

December 16, 2022 Stone Ridge Market (a) HEB Plus San Antonio, TX 219 58,100 —

January 18, 2023 Bay Colony (a) HEB Houston, TX 416 $ 79,100 $ 41,969

January 18, 2023 Blackhawk Town Center (a) HEB Houston, TX 127 26,300 13,008

January 18, 2023 Cyfair Town Center (a) Kroger Houston, TX 433 79,200 30,880

January 18, 2023 Stables Town Center (a) Kroger Houston, TX 148 37,000 6,611

June 2, 2023 The Shoppes at Davis Lake Harris Teeter Charlotte, NC 91 22,400 —

Total 1,215 $ 244,000 $ 92,468

3 unchanged sentences

Disposition Price Gain on Sale

June 30, 2022 Centerplace of Greeley Denver, CO 152 $ 37,550 $ 25,147

June 30, 2022 Cheyenne Meadows Denver, CO 90 17,900 11,709

December 15, 2022 The Shops at Walnut Creek (a) Denver, CO 225 55,000 1,393

Total 467 $ 110,450 $ 38,249

(a) The property's buyer assumed a $28.6 million mortgage payable secured by the property.

We recognized a loss on debt extinguishment of $0.08 million related to the buyer's assumption.

IAGM Dispositions and Mortgage Payoffs

During the year ended December 31, 2022, IAGM disposed of the following properties:

Date Property Metropolitan Area Square Feet Gross

Disposition Price Gain (Loss) on Sale Our Share of Gain (Loss) on Sale

March 3, 2022 Price Plaza (a) Houston-Sugar Land-Baytown, TX 206 $ 39,100 $ 3,751 $ 2,063

April 21, 2022 The Highlands of Flower Mound (b) Dallas-Fort Worth-Arlington, TX 175 38,000 1,244 684

December 16, 2022 Stone Ridge Market (b)(c) San Antonio, TX 219 58,100 12,287 6,758

December 22, 2022 Stables Town Center I (d) Houston-Sugar Land-Baytown, TX 43 7,800 (244) (135)

June 20, 2023 Shops at the Galleria (a) Austin, TX N/A $ 1,692 $ 984

August 25, 2023 Trowbridge Crossing Atlanta, GA 63 11,450 1,707

Total 63 $ 13,142 $ 2,691

(a) The property's buyer assumed a $17.8 million mortgage payable secured by the property.

(b) These properties were acquired by the Company.

(d) IAGM paid down $5.4 million of the senior secured pooled loan with proceeds from the sale.

Share Repurchase Program

On February 23, 2022, we established a share repurchase program (the "SRP") of up to $150.0 million of our outstanding shares of common stock.

The SRP may be suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or particular amount of shares.

As of December 31, 2022, we have not repurchased any common stock under the SRP.

On March 4, 2022, we paid off a $22.3 million mortgage payable at Pavilion at La Quinta using cash on hand and recognized a loss on debt extinguishment of $0.1 million.

On October 6, 2022, we paid off a $24.7 million mortgage payable secured by University Oaks Shopping Center with cash on hand and recognized a loss on debt extinguishment of $0.01 million.

On March 7, 2022,we established an at-the-market equity offering program (the "ATM Program") pursuant to which we may sell from time to time up to an aggregate of $250.0 million shares of our common stock.

In connection with the ATM Program, we may sell shares of our common stock to or through sales agents, or may enter into separate forward sale agreements with one of the agents, or one of their respective affiliates, as a forward purchaser.

As of December 31, 2022, the Company has not sold any common stock under the ATM Program.

Reduction of Authorized Shares

On April 28, 2022, we filed an amendment to our charter to decrease the number of authorized shares of common stock from 1,460,000,000 to 146,000,000, in proportion with the one-for-ten reverse stock split effected by the Company on August 5, 2021.

The authorized shares of preferred stock remain at 40,000,000.

The authorized shares of common stock have been retroactively adjusted within the accompanying consolidated financial statements to give effect to the reduction as of December 31, 2022.

Credit Agreements

On May 11, 2022, we transitioned our revolving credit agreement and term loan agreement from the London Inter-bank Offered Rate ("LIBOR") which repriced monthly ("1-Month LIBOR"), to a Secured Overnight Financing Rate ("SOFR") which reprices monthly ("1-Month Term SOFR").

On June 3, 2022, in connection with and upon effectiveness of the Note Purchase Agreement (as defined below) and in accordance with the terms of the Amended Term Loan Credit Agreement and Amended Revolving Credit Agreement, each of the administrative agents under such agreements released all of the subsidiary guarantors from their guaranty obligations that were previously made for the benefit of the lenders under such agreements.

On August 11, 2022, we issued $250.0 million aggregate principal amount of senior notes in a private placement, of which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii) $100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with the Series A Notes, the "Notes") pursuant to a note purchase agreement (the "Note Purchase Agreement"), dated June 3, 2022, between the Company and the various purchasers named therein.

The Notes were issued at par in accordance with the Note Purchase Agreement and pay interest semiannually on February 11th and August 11th until their respective maturities.

We may prepay at any time all or any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of any series of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount prepaid plus accrued interest and a Make-Whole Amount (as defined in the Note Purchase Agreement).

The Notes will be required to be absolutely and unconditionally guaranteed by certain subsidiaries of the Company that guarantee certain material credit facilities of the Company.

Currently, there are no subsidiary guarantees of the Notes.

(a) This disposition was related to the completion of a partial condemnation at one retail property.

On February 6, 2023, the Company extinguished the $13.7 million mortgage payable secured by Renaissance Center with its available liquidity.

On October 17, 2023, the Company extended the maturity of its $92.5 million cross-collateralized mortgage debt maturing in 2023 by exercising one of its two 12-month extension options.

The maturity date of the mortgage debt is now November 2, 2024.

On December 22, 2023, the Company partially paid down the mortgage debt by $20.0 million, resulting in the release of Blackhawk Town Center from collateralization and an outstanding balance of $72.5 million as of December 31, 2023.

During the quarter ended December 31, 2023, the Company raised $5.4 million of net proceeds, after $0.1 million in commissions, under its at-the-market equity offering program (the "ATM Program"), through the issuance of 208,040 shares of common stock at a weighted average price of $26.13 per share.

As of December 31, 2023, $244.6 million of common stock remains available for issuance under the ATM Program.

Our Retail Portfolio

Our wholly-owned and managed retail properties include grocery-anchored community and neighborhood centers and power centers, including those classified as necessity-based.

As of December 31, 2022, we owned or had an interest in 62 retail properties with a GLA of approximately 10.3 million square feet, which includes 4 retail properties with a GLA of approximately 1.1 million square feet owned through the Company's 55% ownership interest in an unconsolidated joint venture, IAGM.

As of December 31, 2023 and 2022, our wholly-owned and managed retail properties include grocery-anchored community and neighborhood centers and power centers, including those classified as necessity-based.

For the year ended December 31, 2022, we have included results from IAGM properties at share when combined with our wholly-owned properties.

The following table summarizes our retail portfolio, on a wholly-owned, IAGM, and pro rata combined basis, as of December 31, 2023 and 2022.

8 unchanged sentences

ABR PSF $19.48 $19.26 $— $16.22 $19.48 $19.08

Retail Portfolio Summary by Center Type

Summary by Center Type

Our retail properties consist of community and neighborhood centers and power centers.

25 unchanged sentences

ABR PSF $18.00 $17.45 $— $— $18.00 $17.45

Same Property Retail Portfolio Summary

Same Property Summary

Properties classified as same property were owned for the entirety of both periods presented ("Same Properties").

The following table summarizes the GLA, economic occupancy and ABR PSF of Same Properties included in our retail portfolio for the years ended December 31, 2022 and 2021.

Retail Properties IAGM

Retail Properties Pro Rata Combined

Retail Portfolio

2022 2021 2022 2021 2022 2021

The following table summarizes the Same Properties of our retail portfolio for the years ended December 31, 2023 and 2022.

Year ended December 31

of properties 51 51

3 unchanged sentences

ABR PSF $20.15 $19.54

Leasing Activity, Pro Rata Combined Retail Portfolio

The following tables summarize the leasing activity for leases that were executed during the year ended December 31, 2022, compared with expiring or expired leases for the same or previous tenant for renewals and the same unit for new leases at the 62 properties in our Pro Rata Combined Retail Portfolio.

These tables do not include rent deferral lease amendments executed as a result of the impact of the COVID-19 pandemic.

In our Pro Rata Combined Retail Portfolio, we had GLA totaling 1.63 million square feet expiring during the year ended December 31, 2022, of which 1.47 million square feet was re-leased.

Leasing Activity

The following tables summarize the activity for leases that were executed during the year ended December 31, 2023, compared with expiring or expired leases for the same or previous tenant for renewals, and the same unit for new leases at the 62 properties in our retail portfolio.

The Company's retail portfolio had GLA totaling 893 thousand square feet expiring during the year ended December 31, 2023, of which 802 thousand square feet was re-leased.

This achieved a retention rate of approximately 90.0%.

of Leases Executed for the year ended

31, 2022 GLA SF

of Leases Executed GLA SF

(in thousands) New Contractual Rent

2 unchanged sentences

(Years) Tenant Improvement Allowance ($PSF) Lease Commissions ($PSF)

Comparable Renewal

Leases (a) 175 828 $20.91 $19.75 5.9% 5.5 $0.17 $—

Comparable Renewal Leases (a) 190 827 $22.94 $21.39 7.2% 5.2 $0.49 $0.03

Comparable New Leases (a) 32 147 $24.80 $19.80 25.3% 10.3 $27.82 $11.92

17 unchanged sentences

We generate substantially all of our earnings from property operations.

Since January 1, 2021, we have acquired seven retail properties and disposed of four retail properties.

Since January 1, 2022, we have acquired eleven retail properties and disposed of four retail properties.

The following table presents the changes in our income for the years ended December 31, 2023 and 2022.

6 unchanged sentences

Lease income, net increased $24.2 million as a result of increases from properties acquired of $31.5 million, decreases from properties disposed of $9.1 million, and the following activity related to our Same Properties:

• $6.7 million of increased minimum rent attributable to increased occupancy levels and rental rates and $1.8 million of rent abatements in 2021 related to the COVID-19 pandemic,

• $2.1 million of increased recoveries associated with common area maintenance, insurance, and real estate taxes, primarily attributable to tax refunds reflected in 2021 tenant charges,

• $1.1 million of increased amortization of market lease intangibles and straight-line rent adjustments,

• $1.0 million of increased percentage rent attributable to grocers experiencing heightened sales volumes, and was partially offset by:

• $5.3 million of increased minimum rent attributable to increased ABR PSF and favorable lease spreads, and

• $0.3 million of increased common area maintenance and real estate tax recoveries, partially offset by:

• $2.4 million of decreased amortization of market lease intangibles and straight-line rent adjustments, and

• $1.4 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections from our cash basis tenants in 2022 pertaining to prior period rent charges.

Other fee income decreased $1.0 million primarily as a result of real estate sales within IAGM.

Other fee income decreased $2.5 million as a result of the Company acquiring six retail properties from IAGM since January 1, 2022.

The following table presents the changes in our operating expenses for the years ended December 31, 2023 and 2022.

6 unchanged sentences

General and administrative 31,797 33,342 (1,545)

Direct listing costs — 19,769 (19,769)

Total operating expenses $ 222,868 $ 201,458 $ 21,410

Depreciation and amortization increased $18.5 million as a result of:

• $13.4 million of increases from properties acquired, and was partially offset by:

• $23.1 million of increases from properties acquired, partially offset by:

• $2.9 million of decreases from properties disposed, and

• $4.2 million of decreased in-place lease intangible amortization for our Same Properties.

• $1.7 million of decreased in-place lease intangible amortization from our Same Properties.

Property operating expenses increased $2.6 million as a result of:

• $4.4 million of increased costs relating to repairs, maintenance, and landscaping for our Same Properties,

• $3.4 million of increases from properties acquired, and was partially offset by:

• $5.4 million of increases from properties acquired, partially offset by:

• $1.2 million of decreased pre-leasing costs from our Same Properties, and

• $1.6 million of decreases from properties disposed.

Real estate taxes increased $1.9 million as a result of:

• $3.4 million of increased real estate taxes from properties acquired, and was partially offset by:

• $1.0 million of decreased real estate taxes from properties disposed, and

• $0.8 million of decreased real estate taxes for our Same Properties, primarily attributable to tax refunds.

• $4.0 million of increases from properties acquired, partially offset by:

• $0.4 million of decreases from our Same Properties, and

• $1.7 million of decreases from properties disposed.

General and administrative expenses decreased $1.5 million as a result of:

• $2.7 million of long-term incentive plan costs in 2021 related to the expected retirement of its former President and Chief Executive Officer and the appointment of certain executives in establishing a plan of succession,

• $1.2 million of decreased other compensation costs, and

• $1.0 million of decreased non-compensation costs.

During the year ended December 31, 2021, we recognized $19.8 million of expense relating to the direct listing of our common stock on the NYSE.

• $2.1 million of decreased non-compensation costs, and

• $1.7 million of decreased other compensation costs, partially offset by:

• $2.3 million of increased stock-based compensation costs.

The following table presents the changes in our other income and expenses for the years ended December 31, 2023 and 2022.

4 unchanged sentences

Loss on extinguishment of debt (15) (181) 166

Gain on sale of investment properties, net 38,249 1,522 36,727

Equity in earnings of unconsolidated entities 3,663 6,398 (2,735)

Gain on sale of investment properties 2,691 38,249 (35,558)

Equity in (losses) earnings of unconsolidated entities (557) 3,663 (4,220)

Other income and expense, net 5,480 2,030 3,450

Total other income (expense), net $ 16,984 $ (8,135) $ 25,119

Total other (expense) income, net $ (30,539) $ 16,984 $ (47,523)

Interest expense, net

Interest expense, net, increased $11.4 million primarily as a result of:

• $5.0 million of increased interest expense generated from the private placement of our senior notes,

• $3.0 million of increased interest expense generated from the fluctuations in our line of credit balances and interest rates on our corporate credit facilities,

• $2.7 million of increased interest expense from the assumption of mortgages on Shops at Arbor Trails, Escarpment Village, and the Highlands of Flower Mound of $31.5 million, $26.0 million, and $22.9 million, respectively,

• $1.0 million of increased amortization of debt issuance costs, and was partially offset by:

• $1.2 million of decreased interest expense from the pay-off of mortgages on Pavilion at LaQuinta and University Oaks Shopping Center of $22.3 million, and $24.7 million, respectively.

• the private placement of our senior notes in August 2022, generating increased interest expense of $7.8 million,

• increased interest rates on our corporate term loans generating increased interest expense of $2.6 million,

• aggregate assumption of mortgages of $172.8 million since January 1, 2022, generating increased interest expense of $3.0 million, and

• increased amortization of debt issuance costs of $1.3 million, partially offset by:

• decreased balances on our corporate line of credit resulting in decreased interest expense of $1.3 million, and

• aggregate reduction of mortgage payable of $90.3 million since January 1, 2022, generating decreased interest expense of $2.0 million.

Loss on extinguishment of debt

During the year ended December 31, 2022, we recognized an aggregate loss of $0.2 million on the extinguishment of total mortgages payable of $75.6 million on three retail properties.

During the year ended December 31, 2021, we recognized a loss of $0.4 million in connection with amending our corporate debt facilities.

Gain on sale of investment properties, net

During the year ended December 31, 2023, we recognized an insignificant loss on the extinguishment of total mortgages payable of $33.7 million.

During the year ended December 31, 2022, we recognized an aggregate loss of $0.2 million on the extinguishment of total mortgages payable of $75.6 million.

Gain on sale of investment properties

During the year ended December 31, 2023, we recognized a gain of $1.0 million on the completion of a partial condemnation at one retail property and a gain of $1.7 million on the sale of one retail property.

During the year ended December 31, 2022, we recognized a gain of $38.2 million on the sale of three retail properties.

During the year ended December 31, 2021, we recognized a gain of $1.5 million on the sale of one retail property and the completion of partial condemnations at four retail properties.

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities decreased $2.7 million primarily as a result of decreased earnings from property operations of $2.3 million and decreased gains on sales of properties of $1.3 million, which were partially offset by decreased interest expense of $0.9 million.

The aforementioned amounts represent our proportionate share of the activity.

Equity in (losses) earnings of unconsolidated entities

Equity in (losses) earnings of unconsolidated entities decreased $4.2 million primarily as a result of the Company acquiring six retail properties from IAGM since January 1, 2022.

Other income and expense, net

Other income and expense, net increased $1.4 million primarily as a result of increased interest income earned on cash and cash equivalents.

Other income and expense, net increased $3.5 million primarily as a result of increased interest income earned on cash and cash equivalents and non-recurring income from non-operating activities.

Net Operating Income

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, direct listing costs, depreciation and amortization, provision for asset impairment, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as straight-line rent adjustments, amortization of market lease intangibles, and amortization of lease incentives ("GAAP Rent Adjustments").

We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the underlying retail properties meet our same property criteria.

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, depreciation and amortization, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and straight-line rent adjustments ("GAAP Rent Adjustments").

We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the retail properties meet our Same Property criteria.

NOI from other investment properties includes adjustments for the Company's captive insurance company.

We believe the supplemental non-GAAP financial measures of NOI, same property NOI, and NOI from other investment properties provide added comparability across periods when evaluating our financial condition and operating performance that is not readily apparent from "Operating income" or "Net income" in accordance with GAAP.

1 unchanged sentence

A total of 51 wholly-owned retail properties met our Same Property criteria for the years ended December 31, 2023 and 2022.

The following table presents the reconciliation of net income or loss, the most directly comparable GAAP measure, to NOI, Same Property NOI, and Pro Rata Same Property NOI for the years ended December 31, 2022 and 2021:

The following table presents the reconciliation of net income, the most directly comparable GAAP measure, to NOI and Same Property NOI for the years ended December 31, 2023 and 2022:

Year ended December 31

2023 2022 Change, net

Net income (loss) $ 52,233 $ (5,360) $ 57,593

Net income $ 5,269 $ 52,233 $ (46,964)

Adjustments to reconcile to non-GAAP metrics:

Other income and expense, net (5,480) (2,030) (3,450)

Equity in earnings of unconsolidated entities (3,663) (6,398) 2,735

Equity in losses (earnings) of unconsolidated entities 557 (3,663) 4,220

Interest expense, net 38,138 26,777 11,361

Loss on extinguishment of debt 15 181 (166)

Gain on sale of investment properties, net (38,249) (1,522) (36,727)

Gain on sale of investment properties (2,691) (38,249) 35,558

Depreciation and amortization 113,430 94,952 18,478

General and administrative 31,797 33,342 (1,545)

Direct listing costs — 19,769 (19,769)

Other fee income (80) (2,566) 2,486

3 unchanged sentences

Same Property NOI $ 142,124 $ 135,543 $ 6,581

IAGM Same Property NOI at share 7,885 7,380 505

Pro Rata Same Property NOI $ 141,077 $ 134,821 $ 6,256

(a) Adjustments to NOI include termination fee income and expense and GAAP Rent Adjustments.

10 unchanged sentences

Same Property NOI increased by $6.6 million, or 4.9%, when comparing the year ended December 31, 2023 to the same period in 2022, and was primarily a result of:

• $6.7 million of increased minimum rent attributable to increased occupancy levels and rental rates and $1.8 million of rent abatements in 2021 related to the COVID-19 pandemic,

• $1.0 million of increased percentage rent attributable to grocers experiencing heightened sales volumes,

• $1.1 million of decreased real estate tax expense, net of associated recoveries, primarily attributable to tax refunds, and was offset by:

• $5.3 million of increased minimum rent attributable to increased ABR PSF and favorable lease spreads,

• $1.7 million of increased recoveries in excess of recoverable operating expenses, primarily attributable to leases with fixed recovery terms, and

• $1.0 million of decreased non-recoverable pre-leasing costs, partially offset by:

• $1.4 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections from our cash basis tenants in 2022 pertaining to prior period rent charges.

• $1.4 million of increased operating expense, net of associated recoveries, primarily attributable to increased repairs, maintenance, and landscaping costs, and

• $1.2 million of increased non-recoverable operating expenses, primarily attributable to tenant lease negotiations.

Funds From Operations

4 unchanged sentences

Furthermore, because gains and losses from sales of property are excluded from NAREIT FFO, it is consistent and appropriate that impairments, which are often early recognition of losses on prospective sales of property, also be excluded.

If evidence exists that a loss reflected in the investment of an unconsolidated entity is due to the impairment of depreciable real estate assets, our share of these impairments is added back to net income in the determination of NAREIT FFO.

We believe NAREIT FFO Applicable to Common Shares and Dilutive Securities, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because the historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time.

11 unchanged sentences

Year ended December 31,

Net income (loss) $ 52,233 $ (5,360)

Net income $ 5,269 $ 52,233

Depreciation and amortization related to investment properties 112,578 94,142

Gain on sale of investment properties, net (38,249) (1,522)

Unconsolidated joint venture adjusting items, net (a) 3,850 4,713

Gain on sale of investment properties (2,691) (38,249)

Unconsolidated joint venture adjustments (a)

NAREIT FFO Applicable to Common Shares and Dilutive Securities 115,498 111,976

1 unchanged sentence

Straight-line rent adjustments, net (3,349) (3,815)

Direct listing costs — 19,769

Amortization of debt discounts and financing costs 4,113 2,816

Adjusting items, net (b)

3 unchanged sentences

Dilutive effect of unvested restricted shares (d)

281,282 119,702

Weighted average common shares outstanding - diluted 67,813,180 67,525,935

Net income (loss) per common share $ 0.77 $ (0.08)

Per share adjustments for NAREIT FFO Applicable to Common Shares and Dilutive Securities 0.89 1.26

NAREIT FFO Applicable to Common Shares and Dilutive Securities per share $ 1.66 $ 1.18

Per share adjustments for Core FFO Applicable to Common Shares and Dilutive Securities (0.09) 0.22

Core FFO Applicable to Common Shares and Dilutive Securities per share $ 1.57 $ 1.40

(a) Represents our share of depreciation, amortization, impairment, and gains on sale related to investment properties held in IAGM.

(b) Adjusting items, net, are primarily loss on extinguishment of debt, amortization of debt discounts and financing costs, depreciation and amortization of corporate assets, and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income.

(c) Represents our share of amortization of market lease intangibles and lease inducements, net, straight-line rent adjustments, net and adjusting items, net related to IAGM.

Net income per diluted share $ 0.08 $ 0.77

Per share adjustments for NAREIT FFO 1.62 0.89

NAREIT FFO per diluted share $ 1.70 $ 1.66

Per share adjustments for Core FFO (0.05) (0.09)

Core FFO per diluted share $ 1.65 $ 1.57

(a) Represents our share of depreciation, amortization, and gain on sale related to investment properties held in IAGM.

(b) Adjusting items, net, are primarily loss on extinguishment of debt, depreciation and amortization of corporate assets, and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as basis difference recognition arising from acquiring the four remaining properties of IAGM, and miscellaneous and settlement income.

(c) Represents our share of amortization of market lease intangibles and inducements, net, straight line rent adjustments, net and adjusting items, net related to IAGM.

(d) For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted earnings per share in accordance with GAAP.

For the year ended December 31, 2021, unvested restricted shares were antidilutive and therefore excluded from the denominator in the diluted earnings per share calculation in accordance with GAAP.

Critical Accounting Estimates

3 unchanged sentences

Actual results may differ from these estimates.

Revenue Recognition

Credit Losses

We review the collectability of amounts due from our tenants on a regular basis.

Such reviews consider the tenant's financial condition and payment history and other economic conditions impacting the tenant.

Changes in collectability occur when we no longer believes it is probable that substantially all the lease payments will be collected over the term of the lease.

If collection is not probable, regardless of whether we have entered into an amendment to provide the tenant with rent relief, the lease payments will be accounted for on a cash basis, and revenue will be recorded as cash is received.

If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable, the accrual basis of revenue recognition is reestablished.

The provision for estimated credit losses resulting from changes in the expected collectability of lease payments, including variable payments, is recognized as a direct adjustment to lease income, and a direct write-off of the operating lease receivables, including straight-line rent receivable.

Acquisition of Real Estate

29 unchanged sentences

Liquidity and Capital Resources

Development, Re-development, Capital Expenditures and Leasing Activities

The following table summarizes capital resources used through development and re-development, capital expenditures, and leasing activities at our retail properties owned during the year ended December 31, 2022.

Development, Re-development, Capital Expenditures and Tenant Improvements

The following table summarizes capital resources used for development and re-development, capital expenditures, and tenant improvements at our retail properties during the year ended December 31, 2023.

These costs are classified as cash used in capital expenditures and tenant improvements and investment in development and re-development projects on the consolidated statements of cash flows during the year ended December 31, 2023.

Development and

Re-development Capital Expenditures Leasing Total

Re-development Capital Expenditures Tenant Improvements Total

Direct costs $ 3,788 (a) $ 17,284 $ 8,085 (c) $ 29,157

3 unchanged sentences

(b) Indirect development and re-development costs relate to capitalized interest, real estate taxes, insurance, and payroll attributed to improvements at our retail properties.

(c) Direct leasing costs relate to improvements to a tenant space that are either paid directly by us or reimbursed to the tenants.

(c) Direct costs relate to improvements to a tenant space that are either paid directly by us or reimbursed to the tenants.

Short-Term Liquidity and Capital Resources

6 unchanged sentences

Any future determination to pay distributions will be at the discretion of our Board and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board deems relevant.

In November 2022, our Board approved an increase to our annual distribution rate effective for the quarterly distribution paid in April 2023.

In November 2023, our Board approved an increase to our annual distribution rate effective for the quarterly distribution to be paid in April 2024.

Our primary sources and uses of capital are as follows:

• Operating cash flows from our real estate investments;

• Distributions from our joint venture investment;

• Proceeds from sales of properties;

14 unchanged sentences

In the first quarter of 2022, we entered into an ATM Program pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $250.0 million.

As of December 31, 2022, the Company has not sold any common stock under the ATM Program.

In the second quarter of 2022, we received an inaugural investment-grade credit rating from Fitch Ratings, Inc.

In the fourth quarter of 2023, we raised $5.4 million of net proceeds under the ATM Program, after $0.1 million in commissions, through the issuance of 208,040 shares of common stock at a weighted average price of $26.13 per share.

As of December 31, 2023, $244.6 million of common stock remains available for issuance under the ATM Program.

In the third quarter of 2023, Fitch Ratings, Inc.

("Fitch") affirmed our Long-Term Issuer Default Rating (IDR) at 'BBB-'.

In addition, Fitch affirmed our senior unsecured debt at 'BBB-'.

Our investment grade Rating Outlook is Stable.

On August 11, 2022, the Company issued $250.0 million aggregate principal amount of senior notes in a private placement, of which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii) $100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with the Series A Notes, the "Notes") pursuant to the Note Purchase Agreement.

7 unchanged sentences

Cash used in investing activities (79,718) (144,461) 64,743

Cash provided by (used in) financing activities 111,574 (204,171) 315,745

Cash (used in) provided by financing activities (87,902) 111,574 (199,476)

Decrease in cash, cash equivalents and restricted cash (37,999) 92,908 (130,907)

1 unchanged sentence

Cash, cash equivalents and restricted cash at end of year $ 99,763 $ 137,762 $ (37,999)

Cash provided by operating activities of $125.8 million and $90.0 million for the years ended December 31, 2022 and 2021, respectively, was generated primarily from income from property operations and operating distributions from IAGM.

Cash provided by operating activities increased $35.8 million when comparing 2022 to 2021, primarily as a result of direct listing costs of $19.8 million in 2021, increased operating distributions from IAGM, general fluctuations in working capital, and acquisition activity in excess of disposition activity.

Since January 1, 2021, we have acquired seven retail properties and disposed of four retail properties.

Cash provided by operating activities of $129.6 million and $125.8 million for the years ended December 31, 2023 and 2022, respectively, was generated primarily from income from property operations.

Cash provided by operating activities increased $3.8 million when comparing 2023 to 2022, primarily as a result of acquisition activity in excess of disposition activity and general fluctuations in working capital.

Since January 1, 2022, we have acquired eleven retail properties and disposed of four retail properties.

Cash used in investing activities of $79.7 million for the year ended December 31, 2023, was primarily the result of:

• $235.0 million for acquisitions of investment properties,

• $33.2 million for capital investments and leasing costs,

• $1.2 million for other investing cash outflows, and was partially offset by:

• $77.5 million from net proceeds received from the sale of investment properties, and

• $152.0 million for acquisitions of investment properties, and

• $35.8 million for capital investments and leasing costs, which were partially offset by:

• $95.1 million from distributions from unconsolidated entities,

• $12.6 million from the sale of investment properties, and

• $0.4 million from other investing activities.

Cash used in investing activities of $144.5 million for the year ended December 31, 2022, was primarily the result of:

• $235.0 million for acquisitions of investment properties,

• $25.0 million for capital investments and leasing costs,

• $1.4 million for other investing cash outflows, and was partially offset by:

• $14.8 million from net proceeds received from the sale of investment properties.

• $33.2 million for capital investments and leasing costs, and

• $1.2 million for other investing cash outflows, which were partially offset by:

• $77.5 million from the sale of investment properties, and

• $47.4 million from distributions from unconsolidated entities.

Cash used in financing activities of $87.9 million for the year ended December 31, 2023, was primarily the result of:

• $33.8 million for pay-offs of debt, principal payments of mortgage debt, payment of loan fees and other deposits, and other financing activities,

• $57.5 million to pay distributions, and

• $1.6 million for the payment of tax withholdings for share-based compensation, which were partially offset by:

• $5.0 million from net proceeds from the sale of common stock under the ESPP and ATM.

Cash provided by financing activities of $111.6 million for the year ended December 31, 2022, was primarily the result of:

2 unchanged sentences

• $143.0 million repaid on our line of credit,

• $50.5 million for pay-offs of debt, principal payments of mortgage debt, and payment of loan fees and other deposits, and other financing activities,

• $50.5 million for pay-offs of debt, debt prepayment penalties, principal payments of mortgage debt, payment of loan fees and other deposits, and other financing activities,

• $55.3 million to pay distributions, and

• $1.6 million for the payment of tax withholdings for share-based compensation.

Cash used in financing activities of $204.2 million for the year ended December 31, 2021, was primarily the result of:

• $457.8 million for pay-offs of debt, debt prepayment penalties, principal payments of mortgage debt, payment of loan fees and other deposits, and other financing activities,

• $16.7 million for the repurchase of common stock under our share repurchase plan,

• $103.3 million for the repurchase of common stock through a tender offer,

• $55.6 million to pay distributions,

• $1.8 million for the payment of tax withholdings for share-based compensation, which were partially offset by:

• $431.0 million from proceeds received under our unsecured credit agreements.

We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents.

4 unchanged sentences

Acquisitions and Dispositions of Real Estate Investments

In 2023, we acquired five retail properties for an aggregate gross acquisition price of $244.0 million.

In 2022, we acquired six retail properties and an outparcel adjacent to an existing retail property for an aggregate gross acquisition price of $319.1 million.

In 2021, we acquired one retail property and an outparcel adjacent to an existing retail property for an aggregate gross acquisition price of $54.7 million.

In 2023, we disposed of one retail property and completed a partial condemnation at one retail property for an aggregate gross disposition price of $13.1 million.

In 2022, we disposed of three retail properties for an aggregate gross disposition price of $110.5 million.

In 2021, we disposed of one retail property and completed partial condemnations at four retail properties for an aggregate gross disposition price of $15.0 million.

Distributions

10 unchanged sentences

Mortgages Payable, Maturities

The following table reflects the scheduled maturities of the Company's mortgages payable as of December 31, 2022, for each of the next five years and thereafter.

The following table summarizes the scheduled maturities of our mortgages payable as of December 31, 2023.

Scheduled maturities by year:

4 unchanged sentences

Credit Agreements, Maturities

The following table reflects the Company's outstanding borrowings under its unsecured term loans as of December 31, 2022.

The following table summarizes the outstanding borrowings under our unsecured term loans as of December 31, 2023.

Principal Balance Interest Rate Maturity Date

3 unchanged sentences

$200.0 million 5.5 year - swapped to fixed rate 50,000 2.76% (a) March 22, 2027

$200.0 million 5.5 year - variable rate 100,000 1M SOFR + 1.30% (b)

March 22, 2027

$200.0 million 5.5 year - swapped to fixed rate 100,000 4.99% (a) March 22, 2027

Total unsecured term loans $ 400,000

(a) Interest rates reflect the fixed rates achieved through the Company's interest rate swaps.

(b) As of December 31, 2022, 1-Month Term SOFR was 4.3581%.

Senior Notes, Maturities

The following table summarizes the Company's outstanding borrowings under its Senior Notes as of December 31, 2022.

The following table summarizes the outstanding borrowings under our Senior Notes as of December 31, 2023.

Principal Balance Fixed Interest Rate Maturity Date

6 unchanged sentences

Debt" in the consolidated financial statements.

The unconsolidated joint venture in which we have an investment has third party mortgage debt of $92.5 million at December 31, 2022, as described in "Note 6.

Investment in Unconsolidated Entities" in the consolidated financial statements.

It is anticipated that our unconsolidated entity will be able to repay or refinance all of its debt on a timely basis.

The following table presents, on a consolidated basis, our obligations to make future payments under debt and lease agreements.

It excludes debt payable by our unconsolidated joint venture and debt discounts that are not future cash obligations as of December 31, 2022.

The following table presents our obligations to make future payments under debt and lease agreements as of December 31, 2023, exclusive of debt discounts and issuance costs which are not future cash obligations.

Payments due by year ending December 31,

7 unchanged sentences

Grand total $ 122,657 $ 52,923 $ 227,658 $ 242,868 $ 14,625 $ 306,915 $ 967,646

(a) Includes $200.0 million of variable-rate unsecured term loans that have been swapped to a fixed rate until September 22, 2026, and $100.0 million of variable-rate unsecured term loans that have been swapped to a fixed rate until March 22, 2027.

(a) Includes variable rate debt swapped to fixed rates through the Company's interest rate swaps.

(b) Includes leases on corporate office spaces.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis