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Item 7. Management’s Discussion and Analysis

2025-02-13 compared with 2024-02-14 · 223 added, 234 removed, 249 unchanged (65% of the section changed)

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Executive Summary

Strategy and Outlook

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

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

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.

Our strategically located regional field offices are within a two-hour drive of over 95% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth local market knowledge.

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

Our strategically located field offices are within a two-hour drive of over 95% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth local market knowledge.

We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct differentiator for us in the marketplace.

Evaluation of Financial Condition and Operating Results

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:

Evaluation of Operating Performance and Financial Condition

In addition to measures of operating performance determined in accordance with U.S.

generally accepted accounting principles ("GAAP"), management evaluates our operating performance and financial condition 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;

• Nareit Funds From Operations ("Nareit FFO") Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;

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

• Core Funds From Operations ("FFO") Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;

• Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), a supplemental non-GAAP measure;

• Adjusted EBITDA, a supplemental non-GAAP measure;

• Economic and leased occupancy and rental rates;

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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

Acquisitions and Mortgage Assumption

During the year ended December 31, 2024, we acquired the following properties:

Date Property Grocer Anchor Metropolitan Area Square Feet Gross

Date Property Anchor Market Square Feet Gross

Acquisition Price Assumption of Mortgage Debt

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 —

2/1/24 The Plant (a) Sprouts Farmers Market Phoenix, AZ 57 $ 29,500 $ 13,000

4/9/24 Moores Mill Publix Atlanta Metro Area, GA 70 28,000 —

6/13/24 Maguire Groves (b) Publix Orlando-Kissimmee, FL 33 16,100 —

8/6/24 Scottsdale North Marketplace AJ's Fine Foods Phoenix, AZ 66 23,000 —

10/9/24 Stonehenge Village Wegmans Richmond, VA 214 62,100 —

11/26/24 The Forum Target Cape Coral-Fort Myers, FL 186 41,370 —

12/18/24 Market at Mill Creek Lowes Foods Charleston-Berkeley-Dorchester, SC 80 27,300 —

12/18/24 Nexton Square N/A Charleston-Berkeley-Dorchester, SC 134 54,700 —

Total 840 $ 282,070 $ 13,000

(a) We acquired these properties from our joint venture, IAGM.

(a) The Company recognized a fair value adjustment of $0.4 million related to the mortgage payable secured by the property.

(b) Maguire Groves is immediately adjacent to Plantation Grove, a Publix anchored neighborhood center wholly-owned by the Company.

The Company operates these properties under the Plantation Grove name.

During the year ended December 31, 2024, we disposed of the following properties:

Date Property Metropolitan Area Square Feet Gross

Disposition Price Gain on Sale

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

Date Property Market Square

Disposition Price Gain (Loss) on Sale, net

7/22/2024 Eldridge Town Center & Windermere Village (a) Houston - Sugar Land - Baytown, TX N/A $ 602 $ 334

10/31/2024 Stevenson Ranch So.

California - Los Angeles, CA 187 57,800 (614)

12/13/2024 Eldridge Town Center & Windermere Village (b) Houston - Sugar Land - Baytown, TX 31 10,150 4,137

Total 218 $ 68,552 $ 3,857

(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.

(b) This disposition included the sale of an outparcel at Eldridge Town Center and the entirety of Windermere Village.

Subsequent to the transaction, the Company continues to operate the remaining property under the Eldridge Town Center name.

On June 5, 2024, we extinguished the $7.3 million and $8.4 million pooled mortgages payable secured by Plantation Grove and Suncrest Village, respectively.

On September 27, 2024, we extinguished the remaining $72.5 million pooled mortgage payable secured by Cyfair Town Center, Bay Colony, and Stables Town Center.

On October 23, 2024, we entered into a third amendment to the Amended Revolving Credit Agreement, which provides for, among other things, an increase in the revolving commitments thereunder from $350.0 million to $500.0 million and an extension of the maturity date to January 15, 2029, with one six-month extension option.

Common Stock Offering

On September 25, 2024, we completed an underwritten public offering of our common stock at a price to the public of $28.00 per share.

We issued and sold 9,200,000 shares of our common stock, including 1,200,000 shares issued in connection with the full exercise of the underwriters' over-allotment option.

We received $247.3 million of net proceeds, after deducting $10.3 million in underwriting discounts and commissions.

During the quarter ended December 31, 2024, we raised $7.8 million of net proceeds, after $0.1 million in commissions, under our at-the-market equity offering program (the "ATM Program"), through the issuance of 254,082 shares of common stock at a weighted average price of $30.96 per share.

As of December 31, 2024, $236.7 million of common stock remains available for issuance under the ATM Program.

Our Retail Portfolio

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.

Retail Properties IAGM

Retail Properties Pro Rata Combined

Retail Portfolio

2023 2022 2023 2022 2023 2022

of properties 62 58 — 4 62 62

GLA (square feet) 10,324 9,171 — 1,125 10,324 9,790

Economic occupancy 93.3% 94.2% —% 90.2% 93.3% 93.9%

Leased occupancy 96.2% 96.2% —% 93.6% 96.2% 96.1%

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

Summary by Center Type

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

• Community and neighborhood centers are generally open-air and designed for tenants that offer a wide array of merchandise and services, including groceries, soft goods and convenience-oriented offerings.

Our community centers contain large anchor stores and a significant presence of national retail tenants.

Our neighborhood centers are generally smaller open-air centers with a grocery store anchor and/or drugstore and other small service-type retailers.

• Power centers are generally larger and consist of several anchors, such as discount department stores, off-price stores, specialty grocers and warehouse clubs.

Typically, the number of specialty tenants is limited and most are national or regional in scope.

The following tables summarize our retail portfolio, by center type, as of December 31, 2023 and 2022.

Community and neighborhood centers

Retail Properties IAGM

Retail Properties Pro Rata Combined

Retail Portfolio

2023 2022 2023 2022 2023 2022

of properties 50 46 — 4 50 50

GLA (square feet) 6,800 5,647 — 1,125 6,800 6,266

Economic occupancy 94.8% 95.0% —% 90.2% 94.8% 94.5%

Leased occupancy 97.1% 96.9% —% 93.6% 97.1% 96.6%

ABR PSF $20.22 $20.36 $— $16.22 $20.22 $19.98

Power centers

Retail Properties IAGM

Retail Properties Pro Rata Combined

Retail Portfolio

2023 2022 2023 2022 2023 2022

The following table summarizes our retail portfolio as of December 31, 2024 and 2023.

Year ended December 31

of properties 68 62

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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%.

The following tables summarize the activity for leases executed during the year ended December 31, 2024, compared with expiring or expired leases for the same or previous tenant for renewals, and the same unit for new leases.

Of the retail portfolio's expiring GLA of 1.22 million square feet during the year ended December 31, 2024, 1.15 million square feet was re-leased, achieving a retention rate of approximately 94%.

of Leases Executed GLA SF

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We generate substantially all of our earnings from property operations.

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

Since January 1, 2023, we have acquired twelve retail properties and disposed of two retail properties.

The following table presents the changes in our income for the years ended December 31, 2024 and 2023.

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Total income $ 273,974 $ 258,676 $ 15,298

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:

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

Lease income, net, for the year ended December 31, 2024 increased $15.3 million when compared to the same period in 2023, as a result of increases from properties acquired of $10.6 million, decreases from properties disposed of $2.1 million, and the following activity related to our Same Properties:

• $4.1 million of increased minimum base rent attributable to increased occupancy and ABR PSF,

• $2.3 million of increased common area maintenance and real estate tax recoveries,

• $0.8 million of net changes in credit losses and related reversals,

• $0.2 million of net increases in all other income, and

• $0.4 million increase in lease termination income, partially offset by:

• $1.0 million of net decreased amortization of market lease intangibles.

The following table presents the changes in our operating expenses for the years ended December 31, 2024 and 2023.

Year ended December 31

2023 2022 Increase (Decrease)

2024 2023 Increase

Operating expenses

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• $0.5 million of decreases from properties disposed, and

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

• $4.8 million of decreased amortization from our Same Properties, primarily driven by in-place lease intangibles.

Property operating expenses increased $0.6 million as a result of:

• $1.2 million of increases from properties acquired, partially offset by:

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

• $0.3 million of net decreased costs from our Same Properties primarily driven by decreased repairs and maintenance costs and increased insurance costs, and

• $0.3 million of decreases from properties disposed.

Real estate taxes increased $1.6 million as a result of:

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

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

• $0.9 million of increases from properties acquired, and

• $1.0 million of increases from our Same Properties, and partially offset by:

• $0.3 million of decreases from properties disposed.

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

• $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.

General and administrative expenses increased $1.4 million as a result of $0.8 million of increased stock-based compensation expense and $0.6 million of increased other compensation costs.

The following table presents the changes in our other income and expenses for the years ended December 31, 2024 and 2023.

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Loss on extinguishment of debt — (15) 15

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

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

Impairment of real estate assets (3,854) — (3,854)

Gain on sale of investment properties, net 3,857 2,691 1,166

Equity in losses of unconsolidated entities — (557) 557

Other income and expense, net 3,755 5,480 (1,725)

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Interest expense, net

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

• 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, 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.

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.

Interest expense, net, decreased $1.0 million primarily as a result of:

• decreased amortization of $1.7 million, partially offset by:

• increased interest expense of $0.7 million related to the $92.5 million pooled mortgage payable assumed from our previously owned unconsolidated joint venture, IAGM Retail Fund I, LLC ("IAGM") on October 17, 2023.

On December 22, 2023, the Company partially paid down this mortgage debt by $20.0 million.

On September 27, 2024, the Company extinguished the remaining $72.5 million pooled mortgage payable.

Impairment of real estate assets

During the year ended December 31, 2024, the Company recorded an impairment of real estate assets of $3.9 million on one retail property after receiving and accepting a letter of intent to purchase the property for less than its carrying value.

Gain on sale of investment properties, net

During the year ended December 31, 2024, the Company recognized a gain of $4.5 million on the completion of a partial condemnation and partial sale of one retail property and a loss of $0.6 million on the sale of one retail property.

During the year ended December 31, 2023, the Company 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.

Equity in losses of unconsolidated entities

Equity in losses of unconsolidated entities decreased $0.6 million primarily as a result of the Company acquiring four retail properties from IAGM since January 1, 2023.

On December 15, 2023, IAGM was fully liquidated.

Investment in Unconsolidated Entities" in the Notes to the Consolidated Financial Statements for additional information about the Company’s former joint venture.

Other income and expense, net

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.

Other income and expense, net, decreased $1.7 million primarily as a result of decreased 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, 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 evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, depreciation and amortization, other income and expense, net, impairment of real estate assets, 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.

Comparison of Same Property results for the years ended December 31, 2023 and 2022

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, the most directly comparable GAAP measure, to NOI and Same Property NOI for the years ended December 31, 2023 and 2022:

A total of 56 retail properties met our Same Property criteria for the years ended December 31, 2024 and 2023.

We believe the supplemental non-GAAP measure of NOI, and the bifurcation into same property NOI and NOI from other investment properties, are important measures in assessing operating performance and provide added comparability across periods when evaluating the Company's financial condition and operating performance that is not readily apparent from Net income in accordance with GAAP.

Reconciliation of Net Income to Non-GAAP Measures

The following table presents the reconciliation of net income, the most directly comparable GAAP measure, to NOI and Same Property NOI:

Year ended December 31

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Other income and expense, net (3,755) (5,480) 1,725

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

Equity in losses of unconsolidated entities — 557 (557)

Interest expense, net 37,100 38,138 (1,038)

Loss on extinguishment of debt — 15 (15)

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

Gain on sale of investment properties, net (3,857) (2,691) (1,166)

Impairment of real estate assets 3,854 — 3,854

Depreciation and amortization 113,948 113,430 518

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Same Property NOI $ 162,555 $ 154,848 $ 7,707

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

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

Comparison of the components of Same Property NOI for the years ended December 31, 2024 and 2023

Year ended December 31 Change

2023 2022 Variance

Lease income, net $ 203,231 $ 198,963 $ 4,268 2.1%

Year ended December 31

2024 2023 Change Variance

Minimum base rent $ 152,502 $ 148,304 $ 4,198 2.8 %

Real estate tax recoveries 29,463 28,184 1,279 4.5 %

Common area maintenance, insurance, and other recoveries 28,788 27,799 989 3.6 %

Ground rent income 14,674 14,760 (86) (0.6) %

Short-term and other lease income 4,496 4,323 173 4.0 %

Provision for uncollectible billed rent and recoveries (266) (1,046) 780 (74.6) %

Other property income 1,305 1,241 64 5.2 %

230,962 223,565 7,397 3.3 %

Property operating expenses 33,841 35,695 (1,854) (5.2)%

Property operating 36,426 37,736 (1,310) (3.5) %

Real estate taxes 31,981 30,981 1,000 3.2 %

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Same Property NOI $ 162,555 $ 154,848 $ 7,707 5.0 %

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:

• $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.

Same Property NOI increased by $7.7 million, or 5.0%, when comparing the year ended December 31, 2024 to the same period in 2023, and was primarily a result of increased occupancy, ABR PSF, favorable lease spreads, and leases with advantageous fixed recovery terms.

Funds From Operations

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In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within Nareit FFO and other unique revenue and expense items which some may consider not pertinent to measuring a particular company's on-going operating performance.

In that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses and measure the achievement of certain performance-based equity awards.

Our adjustments to NAREIT FFO to arrive at Core FFO include removing the impact of (i) amortization of debt discounts and financing costs, (ii) amortization of market-lease intangibles and inducements, net, (iii) depreciation and amortization of corporate assets, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments (vi) other non-operating revenue and expense items which, in our judgement, are not pertinent to measuring on-going operating performance, (vii) adjustments for IAGM to reflect our share of the ventures' Core FFO on the same basis.

In that regard, we have historically used Core FFO as an input to our compensation plan to determine cash bonuses and measure the achievement of certain performance-based equity awards.

Our adjustments to Nareit FFO to arrive at Core FFO include removing the impact of (i) amortization of debt discounts and financing costs, (ii) amortization of market-lease intangibles and inducements, net, (iii) depreciation and amortization of corporate assets, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments (vi) other non-operating revenue and expense items which, in our judgment, are not pertinent to measuring on-going operating performance, and (vii) adjustments for IAGM to reflect our share of the ventures' Core FFO on the same basis.

Our calculation of Core FFO Applicable to Common Shares and Dilutive Securities does not consider any capital expenditures.

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Nor should Nareit FFO and Core FFO be considered as measures of liquidity, our ability to make cash distributions, or our ability to service our debt.

NAREIT FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and Dilutive Securities is calculated as follows:

The following table presents the reconciliation of net income, the most directly comparable GAAP measure, to Nareit FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and Dilutive Securities:

Year ended December 31

Net income $ 13,658 $ 5,269

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

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

Depreciation and amortization of real estate assets 113,055 112,578

Impairment of real estate assets 3,854 —

Gain on sale of investment properties, net (3,857) (2,691)

Unconsolidated joint venture adjustments (a)

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Amortization of debt discounts and financing costs 2,403 4,113

Adjusting items, net (b)

Depreciation and amortization of corporate assets 893 852

Non-operating income and expense, net (b) (1,033) (1,821)

Unconsolidated joint venture adjusting items, net (c)

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Core FFO per diluted share $ 1.73 $ 1.65

(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.

Critical Accounting Estimates

The accompanying consolidated financial statements have been prepared in accordance with GAAP, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, evaluating the collectability of accounts receivable, allocating the purchase price of acquired retail properties, and evaluating the impairment of long-lived assets.

We base these estimates, judgments and assumptions on historical experience and various other factors that we believe to be reasonable under the circumstances.

Actual results may differ from these estimates.

Acquisition of Real Estate

We evaluate the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition.

If an acquisition qualifies as a business combination, the related transaction costs are expensed.

If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and amortized over the useful life of the acquired assets.

Generally, our acquisitions of real estate qualify as asset acquisitions.

We allocate the purchase price of real estate to land, building, other building improvements, tenant improvements, intangible assets and liabilities (such as the value of above- and below-market leases, in-place leases and origination costs associated with in-place leases).

The values of above- and below-market leases are recorded as intangible assets and intangible liabilities, respectively, and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to lease income, net over the remaining term of the associated tenant lease.

The values, if any, associated with in-place leases are recorded in intangible assets and are amortized to depreciation and amortization expense over the remaining lease term.

The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases plus the term of any below-market renewal options.

For the amortization period, the remaining term of leases with renewal options at terms below market reflect the assumed exercise of such below-market renewal options, if reasonably assured.

If a tenant vacates its space prior to the contractual expiration of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible asset or liability is written off.

Tenant improvements are depreciated and origination costs are amortized over the remaining term of the lease or charged against earnings if the lease is terminated prior to its contractual expiration date.

With the assistance of a third-party valuation specialist, we perform the following procedures for assets acquired:

• Estimate the value of the property "as if vacant" as of the acquisition date;

• Allocate the value of the property among land, building, and other building improvements and determine the associated useful life for each;

• Calculate the value and associated life of above- and below-market leases on a tenant-by-tenant basis.

The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining term of the leases (using a discount rate which reflects the risks associated with the leases acquired, including geographical location, size of leased area, tenant profile and credit risk);

• Estimate the fair value of the tenant improvements, legal costs and leasing commissions incurred to obtain the leases and calculate the associated useful life for each;

• Estimate the fair value of assumed debt, if any;

• Estimate the intangible value of the in-place leases based on lease execution costs of similar leases as well as lost rent payments during an assumed lease-up period and their associated useful lives on a tenant-by-tenant basis.

Impairment of Long Lived Assets

We assess the carrying values of our long-lived tangible and intangible assets whenever events or changes in circumstances indicate that they may not be fully recoverable.

An example of an event or changed circumstance is a reduction in the expected holding period of a property.

When such event or circumstances occur, if it is expected that the carrying value is not recoverable, because the expected undiscounted cash flows do not exceed that carrying value, we recognize an impairment loss to the extent that the carrying value exceeds the estimated fair value.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on our continuous process of analyzing each property's economic condition over time and reviewing and updating assumptions about uncertain inherent factors, including observable inputs such as contractual revenues and unobservable inputs such as forecasted revenues and expenses, estimated net disposition proceeds, discount and capitalization rates.

These unobservable inputs are based on market conditions and the property's expected growth rates.

Assumptions and estimates about future cash flows and discount and capitalization rates are complex and subjective.

Changes in economic and operating conditions and in our ultimate investment intent that occur subsequent to the impairment analyses could impact these assumptions and result in additional impairment.

Our assessment of expected hold period for investment properties evaluated for impairment is of particular significance because of the material impact it has on the evaluation of the property's recoverability.

Changes in our disposition strategy or changes in the marketplace may alter the expected hold period of a property which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance.

(a) Reflects the Company’s share of adjustments for IAGM's Nareit FFO on the same basis as InvenTrust.

(b) Reflects items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income, and basis difference recognition arising from acquiring the four remaining properties of IAGM in 2023.

(d) For purposes of calculating non-GAAP per share metrics, the Company applies the same denominator used in calculating diluted earnings per share in accordance with GAAP.

Earnings Before Interest, Taxes, Depreciation, and Amortization

Our measure of EBITDA is net income (or loss) in accordance with GAAP, excluding interest expense, net, income tax expense (or benefit), and depreciation and amortization.

Adjustments for IAGM are calculated to reflect our proportionate share of the joint venture's EBITDA on the same basis.

Adjusted EBITDA is an additional supplemental non-GAAP financial measure of our operating performance.

In particular, Adjusted EBITDA provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within EBITDA, certain gains or losses remaining within EBITDA, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company's on-going operating performance.

Our adjustments to EBITDA to arrive at Adjusted EBITDA include removing the impact of (i) gains (or losses) resulting from dispositions of properties, (ii) impairment charges on depreciable real property, (iii) amortization of market-lease intangibles and inducements, (vi) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments, (vi) other non-operating revenue and expense items which, in our judgment, are not pertinent to measuring on-going operating performance, (vii) adjustments for IAGM to reflect our share of the ventures' Adjusted EBITDA on the same basis.

The following table presents the reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

Year ended December 31

Net income $ 13,658 $ 5,269

Interest expense, net 37,100 38,138

Income tax expense 543 517

Depreciation and amortization 113,948 113,430

Unconsolidated joint venture adjustments (a) — 417

EBITDA 165,249 157,771

Impairment of real estate assets 3,854 —

Gain on sale of investment properties, net (3,857) (2,691)

Amortization of market-lease intangibles and inducements, net (2,804) (3,343)

Straight-line rent adjustments, net (3,400) (3,349)

Non-operating income and expense, net (b) (1,033) (1,821)

Unconsolidated joint venture adjusting items, net (c) — (108)

Adjusted EBITDA $ 158,009 $ 146,459

(a) Reflects the Company's share of adjustments for IAGM's EBITDA on the same basis as InvenTrust.

Liquidity and Capital Resources

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 Tenant Improvements Total

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

Indirect costs 770 (b) 1,929 — 2,699

Total $ 4,558 $ 19,213 $ 8,085 $ 31,856

(a) Direct development and re-development costs relate to construction of buildings at our retail properties.

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

Capital Investments and Leasing Costs

Operating retail properties generally require capital investments, including value-enhancing development and redevelopment projects and leasing commissions.

The following table summarizes the capital resources used for capital investments and leasing costs on a cash basis:

Year ended December 31

Tenant improvements $ 9,096 $ 7,945

Leasing costs 3,762 3,888

Property improvements 11,486 17,424

Capitalized indirect costs (a) 1,435 1,929

Total capital expenditures and leasing costs 25,779 31,186

Development and redevelopment direct costs 9,253 3,788

Development and redevelopment indirect costs (a) 1,084 770

Capital investments and leasing costs (b) $ 36,116 $ 35,744

(a) Indirect costs include capitalized interest, real estate taxes, insurance, and payroll costs.

(b) As of December 31, 2024 and 2023, total accrued capital investments and leasing costs were $3,620 and $2,562, respectively.

Short-Term Liquidity and Capital Resources

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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 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:

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• Proceeds from corporate borrowings and debt financings;

• Proceeds from any ATM Program activities;

• Proceeds from our Series A and Series B Notes offering.

• Proceeds from any ATM Program activities or other equity offerings;

• Proceeds from our Series A and Series B Notes offering or other debt offerings.

• To invest in properties or fund acquisitions;

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• To fund other general corporate uses.

We believe our listing on the NYSE will facilitate supplementing these sources by selling equity securities of the Company if and when we believe appropriate to do so.

Also, from time to time, we may seek to acquire additional amounts of our outstanding common stock through cash purchases or exchanges for other securities.

Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors.

On September 25, 2024, we completed an underwritten public offering of our common stock at a price to the public of $28.00 per share.

We issued and sold 9,200,000 shares of our common stock, including 1,200,000 shares issued in connection with the full exercise of the underwriters' over-allotment option.

We received $247.3 million of net proceeds, after deducting $10.3 million in underwriting discounts and commissions.

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.

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.

During the quarter ended December 31, 2024, we raised $7.8 million of net proceeds, after $0.1 million in commissions, under the ATM Program, through the issuance of 254,082 shares of common stock at a weighted average price of $30.96 per share.

As of December 31, 2024, $236.7 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.

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 believe our status as an NYSE-listed issuer will facilitate supplementing our capital sources by selling equity securities of the Company under the ATM Program or otherwise if and when we believe appropriate to do so.

Also, from time to time, we may seek to acquire amounts of our outstanding common stock through cash purchases or exchanges for other securities.

Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors.

At this time, we believe our current sources of liquidity are sufficient to meet our short- and long-term cash demands.

Off Balance Sheet Arrangements

The Company does not have off balance sheet arrangements other than its joint venture, IAGM, as disclosed in " Part IV.

Investment in Unconsolidated Entities."

Summary of Cash Flows

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Cash used in investing activities (240,535) (79,718) (160,817)

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

Cash provided by (used in) financing activities 95,117 (87,902) 183,019

Decrease in cash, cash equivalents and restricted cash (8,542) (37,999) 29,457

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Cash provided by operating activities increased $7.3 million when comparing 2024 to 2023, 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.

Since January 1, 2023, we have acquired twelve retail properties and disposed of two retail properties.

Cash used in investing activities of $240.5 million for the year ended December 31, 2024, was primarily the result of:

• $268.1 million for acquisitions of investment properties,

• $36.1 million for capital investments and leasing costs, and

• $1.4 million from other investing activities, which was partially offset by:

• $65.1 million from the sale of investment properties.

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

• $152.0 million for acquisitions of investment properties, and

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• $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,

• $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 $95.1 million for the year ended December 31, 2024, was primarily the result of:

• $250.0 million from our issuance of senior notes, and

• $112.0 million drawn from our line of credit, which were partially offset by:

• $143.0 million repaid on our line of credit,

• $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

• $257.6 million in proceeds from the public offering of our common stock,

• $8.4 million from proceeds from the sale of common stock under the ATM and ESPP , which were partially offset by:

• $93.4 million for pay-off of debt and other financing activities,

• $62.8 million to pay distributions,

• $12.1 million for costs incurred in relation to sales of our common stock, and

• $2.6 million for the payment of tax withholdings for share-based compensation.

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

• $57.5 million to pay distributions,

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

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

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

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.

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Acquisitions and Dispositions of Real Estate Investments

In 2024, we acquired seven retail properties for an aggregate gross acquisition price of $282.1 million.

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 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 2024, we disposed of one retail property and an outparcel adjacent to an existing retail property and completed a partial condemnation at one retail property for an aggregate gross disposition price of $68.6 million.

In 2023, we disposed of one retail property for an aggregate gross disposition price of $13.1 million.

Distributions

During the year ended December 31, 2024, we declared cash distributions to our stockholders totaling $65.7 million and paid cash distributions of $62.8 million.

As we execute on our retail strategy, the Board evaluated and expects to continue to evaluate our distribution rate on a periodic basis.

As we execute on our retail strategy, the Board evaluated and expects to continue evaluating our distribution rate on a periodic basis.

See " Part I.

Business - Current Strategy and Outlook " for more information regarding our retail strategy.

Business - Business Strategy " for more information regarding our retail strategy.

The following table presents a historical summary of distributions declared, paid and reinvested.

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Scheduled maturities by year:

As of December 31, 2023

Principal Balance

2025 $ 35,880

Thereafter 31,500

Total mortgages payable $ 93,380

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The following table summarizes the outstanding borrowings under our unsecured term loans as of December 31, 2024.

Principal Balance Interest Rate Maturity Date

$200.0 million 5 year - swapped to fixed rate $ 100,000 2.81% (a) September 22, 2026

$200.0 million 5 year - swapped to fixed rate 100,000 2.81% (a) September 22, 2026

$200.0 million 5.5 year - swapped to fixed rate 50,000 2.77% (a) March 22, 2027

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

Maturity Date Interest Rate Principal Balance

$200.0 million 5 year 9/22/26 2.81% (a) $ 100,000

$200.0 million 5 year 9/22/26 2.81% (a) 100,000

$200.0 million 5.5 year 3/22/27 2.78% (a) 50,000

$200.0 million 5.5 year 3/22/27 2.84% (a) 50,000

$200.0 million 5.5 year 3/22/27 4.99% (a) 100,000

Total $ 400,000

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

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The following table summarizes the outstanding borrowings under our Senior Notes as of December 31, 2024.

Principal Balance Fixed Interest Rate Maturity Date

Maturity Date Fixed Interest Rate Principal Balance

$150.0 million Series A

$ 150,000 5.07% August 11, 2029

8/11/29 5.07% $ 150,000

$100.0 million Series B

100,000 5.20% August 11, 2032

8/11/32 5.20% 100,000

Contractual Obligations

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Debt" in the consolidated financial statements.

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.

The following table presents our obligations to make future payments under debt and lease agreements as of December 31, 2024, exclusive of debt discounts and financing costs which are not future cash obligations.

Payments due by year ending December 31

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Fixed rate debt, principal (a) $ 35,880 $ 200,000 $ 226,000 $ — $ 181,500 $ 100,000 $ 743,380

Variable rate debt, principal 72,468 — — — — — 72,468

Interest 30,467 27,891 17,089 14,853 11,081 13,578 114,959

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(b) Includes leases on corporate office spaces.

Critical Accounting Estimates

Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, evaluating the collectibility of accounts receivable, allocating the purchase price of acquired retail properties, and evaluating the impairment of long-lived assets.