What changed in this filing

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Item 1A. Risk Factors

2023-02-21 compared with 2022-02-16 · 89 added, 149 removed, 548 unchanged (30% of the section changed)

8 unchanged sentences

• A significant percentage of our revenues is derived from non-anchor Neighbors, and our net income and ability to make distributions to stockholders may be adversely affected if these Neighbors are not successful.

• The ongoing COVID-19 pandemic has had, and may continue to have, a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

• Long-term leases with our Neighbors may not result in fair value over time.

• We may be unable to sell shopping centers when desired, at an attractive price, or at all, and the sale of a property could cause significant tax payments.

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• We share ownership of our unconsolidated joint ventures and do not have exclusive decision-making power, and as such, we are unable to ensure that our objectives will be pursued.

• Our real estate assets may decline in value and be subject to significant impairment losses, which may reduce our net income.

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• Our real estate assets may decline in value and be subject to significant impairment losses, which may reduce our net income.

• We actively reinvest in our portfolio in the form of development and redevelopment projects, which have inherent risks that could adversely affect our financial condition, cash flows, and results of operations.

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• Actual incremental unlevered yields for our development and redevelopment projects may vary from our underwritten incremental unlevered yield range.

• Pandemics, such as the COVID-19 pandemic, had, and may continue to have, a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

Risks Related to Our Indebtedness and Liquidity

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Risks Related to Our Corporate Structure and Organization

• We and our consolidated subsidiary, the Operating Partnership, a Delaware limited partnership formed in December 2009, entered into tax protection agreements with certain protected partners, which may limit the Operating Partnership’s ability to sell or otherwise dispose of certain shopping centers and may require the Operating Partnership to maintain certain debt levels that otherwise would not be required to operate its business.

Risks Related to Our Real Estate Investment Trust (“REIT”) Status and Other Tax Risks

• We and our consolidated subsidiary, the Operating Partnership, entered into tax protection agreements with certain protected partners, which may limit the Operating Partnership’s ability to sell or otherwise dispose of certain shopping centers and may require the Operating Partnership to maintain certain debt levels that otherwise would not be required to operate its business.

Risks Related to Our REIT Status and Other Tax Risks

• Failure to qualify as a REIT would cause us to be taxed as a regular C corporation, which would substantially reduce funds available for distributions to stockholders.

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The leases of some anchor Neighbors may permit the anchor Neighbor to transfer its lease to another retailer.

The transfer to a new anchor Neighbor could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center.

The transfer to a new anchor Neighbor could cause customer traffic in the shopping center to decrease and thereby reduce the potential income generated by that shopping center.

A lease transfer to a new anchor Neighbor could also allow other Neighbors to make reduced rental payments or to terminate their leases.

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In the event that a Neighbor with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we may experience a significant reduction in our revenues and may not be able to collect all pre-petition amounts owed by the bankrupt Neighbor.

The ongoing COVID-19 pandemic has had, and may continue to have, a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

In March 2020, the World Health Organization declared COVID-19 a global pandemic.

The COVID-19 pandemic has caused, and may continue to cause, significant disruptions to the United States and global economy and has contributed to significant volatility and negative pressure in financial markets.

Many countries, including the United States, reacted by instituting quarantines, restrictions on travel, and/or mandatory closures of businesses.

Certain states and cities, including where our

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shopping centers are located, also reacted by instituting quarantines, restrictions on travel, “shelter-in-place” or “stay-at-home” rules, restrictions on types of businesses that could continue to operate, and/or restrictions on the types of construction projects that could continue.

The COVID-19 pandemic impacted our historical business and financial performance.

While we believe our collections have returned to levels consistent with those prior to the onset of the pandemic, there are no assurances that the COVID-19 pandemic, or another pandemic, will not have a further negative impact on our business and financial performance in the future.

Our retail and service-based Neighbors depend on in-person interactions with their customers to generate unit-level profitability.

Especially at its peak, the COVID-19 pandemic decreased customers’ willingness to frequent, and mandated “shelter-in-place” or “stay-at-home” orders prevented customers from frequenting, our Neighbors’ businesses, and a continued or renewed reluctance, or renewed mandates, could result in our Neighbors’ inability to maintain profitability and make timely rental payments to us under their leases or to otherwise seek lease modifications or to declare bankruptcy.

At the peak of the pandemic-related closure activity, for our wholly-owned shopping centers and those owned through our joint ventures, our temporary closures reached approximately 37% of all Neighbor spaces, totaling 27% of our ABR and 22% of our gross leasable area (“GLA”).

All temporarily closed Neighbors have since been permitted to reopen;

however, certain of our Neighbors have permanently closed and/or declared bankruptcy as a result of the effects of the pandemic.

Others may still be limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or as self-elected efforts to reduce the spread of COVID-19.

These actions, as well as the continuing economic impacts of the COVID-19 pandemic, or worsening impacts in the future, could result in increased permanent store closures.

In addition to the permanent closures that have occurred in our portfolio, this could reduce the demand for leasing space in our shopping centers and result in a decline in average rental rates on expiring leases.

We believe substantially all our Neighbors, including those that were required to temporarily close under governmental mandates, are contractually obligated to continue with their rent payments as documented in our lease agreements with them.

However, we negotiated relief for a small subset of our Neighbors, including rent deferrals.

As of January 20, 2022, inclusive of our prorated share of shopping centers owned through our joint ventures, we had approximately $3.3 million of outstanding payment plans with our Neighbors and we expect to receive remaining amounts owed to us from these plans over a weighted-average term of approximately ten months.

As of October 20, 2021, we have collected approximately 96% of rent and recoveries billed during the second through fourth quarter of 2020, and as of January 20, 2022, we have collected approximately 99% of rent and recoveries billed during 2021.

Despite seeing improvements in collections, there is no guarantee that we will ultimately be able to collect on current and past due amounts, particularly if there is a worsening of the pandemic or tightening of restrictions in the future.

Moreover, in the event of any default by a Neighbor under its lease agreement or relief agreement, we may not be able to fully recover, and/or may experience delays in recovering and additional costs in enforcing our rights as landlord to recover, amounts due to us under the terms of the lease agreement and/ or relief agreement.

Moreover, the worsening of the ongoing COVID-19 pandemic, or another pandemic, and/or renewed restrictions intended to prevent and mitigate its spread, and resulting consumer behavior and economic slowdown or recession could have additional adverse effects on our business in the future, including with regards to:

• the ability and willingness of our Neighbors to renew their leases upon expiration, our ability to re-lease the properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing Neighbor, and obligations we may incur in connection with the replacement of an existing Neighbor, particularly in light of the adverse impact to the financial health of many retailers and service providers that has historically occurred as a result of the COVID-19 pandemic;

• our ability to pay distributions to our stockholders, or to make distributions in shares of our common stock rather than solely in cash, which could result in our stockholders having a tax liability with respect to such distributions that exceeds the amount of cash received, if any;

• an increase in unemployment, like what occurred in the short-term in connection with the COVID-19 pandemic, and its effect on consumer behavior, and negative consequences that would occur if these trends are not reversed in a timely way;

• state, local, or industry-initiated efforts, such as a rent freeze for Neighbors or a suspension of a landlord’s ability to enforce evictions, which may affect our ability to collect rent or enforce remedies for the failure to pay rent;

• severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which could make it difficult for us to access debt and equity capital on attractive terms, or at all, and impact our ability to fund business operations and activities and repay liabilities on a timely basis;

• the potential negative impact on the health of our personnel, particularly if a significant number of them and/or key personnel are impacted, and the potential impact of adaptations to our operations in order to protect our personnel, such as remote work arrangements, could introduce operational risk, including but not limited to cybersecurity risks, and could impair our ability to manage our business;

• the heightening of many of the other risks and uncertainties described in this “Risk Factors” section.

While the unpredictable nature of the COVID-19 pandemic precludes any prediction as to its ultimate adverse impact, a worsening of the economic, political, and social environment as a result presents material risks and uncertainties with respect to our and our Neighbors’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy debt service obligations.

Long-term leases with our Neighbors may not result in fair value over time.

From time to time, we enter into long-term leases with our Neighbors.

Long-term leases do not typically allow for significant changes in rental payments and do not expire in the near term.

If we do not accurately judge the potential for increases in

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market rental rates when negotiating these long-term leases, significant increases in future property operating costs could result in receiving less than fair value from these leases, which would adversely affect our revenues and the funds available for distributions to stockholders.

We may be restricted from leasing space to certain retailers.

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These provisions may limit the number and types of prospective retailers to which we are able to lease space in a particular shopping center, which may result in increased costs to find a permissible retailer and decreased revenues if one or more spaces sit vacant or we have to accept lower rental rates or a less qualified retailer to fill the space.

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We may be unable to sell shopping centers when desired, at an attractive price, or at all, and the sale of a property could cause significant tax payments.

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and (vii) our institutional joint venture partners’ business decisions or other actions or omissions may result in harm to our reputation or adversely affect the value of our investments.

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Our real estate assets may decline in value and be subject to significant impairment losses, which may reduce our net income.

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These key assumptions are subjective in nature and may differ materially from actual results.

Changes in our disposition strategy or changes in the marketplace may alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to our financial condition or operating performance.

Changes in our disposition strategy or changes in the marketplace may

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alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to our financial condition or operating performance.

To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value.

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During the years ended December 31, 2022 and 2021, we incurred impairment charges of $0.3 million and $6.8 million, respectively, related to real estate assets that were under contract or actively being marketed for sale at a disposition price that was less than the carrying value.

We have recorded such impairment charges as we have been selling non-core assets to improve the quality of our portfolio.

We continue to sell non-core assets and may potentially recognize impairments in future quarters.

We recorded such impairment charges as we sold assets with greater risk to improve the quality of our portfolio.

We will continue to evaluate the risk profile of each asset and may potentially recognize impairments in future quarters.

Accordingly, there can be no assurance that we will not record additional impairment charges in the future related to our assets.

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• changes in the level of future development activity may adversely impact our results from operations by reducing the amount of internal general overhead costs that may be capitalized.

Inflationary pressures, rising interest rates, supply chain disruptions, and labor shortages may exacerbate certain of these risks.

If we fail to reinvest in our portfolio or maintain its attractiveness to retailers and consumers, if our capital improvements are not successful, or if retailers or consumers perceive that shopping at other venues (including e-commerce) is more convenient, cost-effective, or otherwise more compelling, our financial condition, cash flows, and results of operations could be adversely affected.

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(ix) changes in interest rates and the availability of financing, which may render the sale or refinance of a property or loan difficult or unattractive;

(x) earthquakes, tornadoes, hurricanes, wildfires, or other natural disasters, civil unrest, terrorist acts, or acts of war, which may result in uninsured or underinsured losses;

(x) earthquakes, tornadoes, hurricanes, droughts, wildfires, or other weather and climate-related events and natural disasters, civil unrest, terrorist acts, or acts of war, which may result in uninsured or underinsured losses;

(xi) epidemics, pandemics, or other widespread outbreaks or resulting public fear that disrupt the businesses of our Neighbors causing them to fail to pay rent on time or at all;

and (xii) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes.

Such risks also include, but are not limited to, those that could impact

Such risks also include, but are not limited to, those that could impact the financial stability of our Neighbors, including their ability to pay rent and expense reimbursements, such as supply chain disruptions and constraints, inflationary pressures throughout the supply chain, labor shortages and inflationary pressures on wages, increases in retail theft, and other risks and uncertainties described elsewhere in this "Risk Factors" section.

These and other factors could adversely affect our financial condition, cash flows, and results of operations.

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the financial stability of our Neighbors, including their ability to pay rent and expense reimbursements, such as supply chain disruptions and constraints, inflationary pressures throughout the supply chain, labor shortages and inflationary pressures on wages, increases in retail theft, and other risks and uncertainties described elsewhere in this "Risk Factors" section.

These and other factors could adversely affect our financial condition, cash flows, and results of operations.

The continued shift in retail sales towards e-commerce may adversely affect our financial condition, cash flows, and results of operations.

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Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its incremental NOI at stabilization.

Pandemics, such as the COVID-19 pandemic, had, and may continue to have, a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

In March 2020, the World Health Organization declared COVID-19 a global pandemic.

The COVID-19 pandemic caused, and may continue to cause, significant disruptions to the United States and global economy and has contributed to significant volatility and negative pressure in financial markets.

Many countries, including the United States, as well as certain states and cities, including where our shopping centers are located, initially reacted by instituting quarantines, restrictions on travel, and/or mandatory closures of businesses, as well as other restrictions.

The COVID-19 pandemic impacted our historical business and financial performance.

We believe substantially all our Neighbors are contractually obligated to continue with their rent payments as documented in our lease agreements with them.

There is no guarantee that we will ultimately be able to collect on current and past due amounts, particularly if there are additional pandemics or tightening of restrictions in the future.

Moreover, a resurgence of the COVID-19 pandemic or another pandemic, and/or renewed restrictions intended to prevent and mitigate the spread of the disease, and resulting consumer behavior and economic slowdown or recession could have additional adverse effects on our business in the future, including but not limited to the heightening of many of the other risks and uncertainties described in this “Risk Factors” section.

While the unpredictable nature of pandemics precludes any prediction as to one’s ultimate adverse impact, a worsening of the economic, political, and social environment as a result presents material risks and uncertainties with respect to our and our Neighbors’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy debt service obligations.

An increased focus on metrics and reporting related to ESG factors may impose additional costs and expose us to new risks.

Investors and other stakeholders have become more focused on understanding how companies address a variety of ESG factors.

When evaluating investment decisions, many investors and shareholders look not only at company ESG disclosures,

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but also to ESG rating systems that have been developed by third-party groups to allow comparisons between companies.

Although we participate in a number of these ratings systems, and generally score relatively well in those in which we do participate, we do not participate in, and would not necessarily score as well in, all of the available rating systems.

Further, the criteria used in these ratings systems may change frequently, and we cannot guarantee that we will be able to score well as criteria change.

We supplement our participation in ratings systems with corporate disclosure of our ESG activities, but many investors and other stakeholders may look for disclosures that we do not provide.

In addition, the SEC is currently evaluating rulemaking that is likely to impose additional ESG disclosure and other requirements on us.

Failure to participate in certain of the third-party ratings systems, failure to score well in those ratings systems, or failure to provide certain ESG disclosures could result in reputational harm when investors or others compare us against similar companies in our industry, could result in investor engagement on our ESG initiatives and disclosures or increased costs relating to ESG initiatives, and could cause certain investors to be unwilling to invest in our stock, which could adversely impact our ability to raise capital.

Risks Related to Our Indebtedness and Liquidity

We have substantial indebtedness, and we may need to incur additional indebtedness, including recourse debt, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our stockholders.

We have obtained, and are likely to continue to obtain, lines of credit, and other long-term financing that are secured by our shopping centers and other assets.

We have obtained, and may continue to obtain, lines of credit, and other long-term financing that are secured by our shopping centers and other assets.

On December 31, 2022, we had indebtedness of $1.9 billion comprised of $1.4 billion in unsecured debt, $0.4 billion in outstanding secured loan facilities, and $0.1 billion in mortgage loans and finance lease obligations.

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When we give a guaranty on behalf of an entity that owns one of our shopping centers, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity.

Currently, we are a limited guarantor on a mortgage loan for two of our unconsolidated joint ventures.

In each case, our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

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Currently, we are a limited guarantor on a mortgage loan for our unconsolidated joint venture.

Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

High debt levels c ould have material adverse consequences for the Company, including hindering our ability to adjust to changing market, industry, or economic conditions;

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In addition, loan agreements may limit our ability to enter into or terminate certain operating or lease agreements related to a property.

Mortgage debt and other property-level debt that we incur may also limit our ability to transfer properties from one subsidiary to another.

Mortgage debt and other property-level debt that we may incur may also limit our ability to transfer properties from one subsidiary to another.

These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives, which may adversely affect our financial condition and ability to make distributions to our stockholders.

Covenants in certain of our loan agreements specify that certain named individuals must remain a member of management and/or the Board or require certain level of management or Board continuity in connection with a fundamental transaction.

A number of our loan agreements contain covenants that require certain named individuals, including Mr.

Certain of our loan agreements contain covenants that require certain named individuals, including Mr.

Edison, to continue serving as a member of management and/or the Board or require certain levels of senior management and/or Board continuity following a change of control or other fundamental transaction.

If such individuals were to depart from the Company within a specified time prior to such transaction or within such specified time after such a transaction, we may be required to negotiate waivers of such covenants or obtain replacement financing, which we may not be able to do on satisfactory terms or at all.

If such individuals were to depart from the Company within a

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specified time prior to such transaction or within such specified time after such a transaction, we may be required to negotiate waivers of such covenants or obtain replacement financing, which we may not be able to do on satisfactory terms or at all.

Higher market capitalization rates and lower NOI for our shopping centers may adversely impact our ability to sell shopping centers and fund developments and acquisitions, and may dilute earnings.

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However, there can be no assurance that we will identify exchange shopping centers that meet our investment objectives for acquisitions.

The phase-out, replacement, or unavailability of LIBOR could affect interest rates for a significant portion of our indebtedness, as well as our ability to obtain future debt financing on favorable terms.

As of December 31, 2021, we had approximately $1.0 billion of indebtedness tied to the London Interbank Offered Rate (“LIBOR”), $0.9 billion of which was fixed through the use of interest rate swaps.

Additionally, we have a revolving credit facility tied to LIBOR with a capacity of $500 million, on which we had no outstanding balance (excluding letters of credit in an amount of $10.7 million) as of December 31, 2021.

In 2017, the Financial Conduct Authority (the regulatory authority over LIBOR) stated that it would phase out LIBOR as a benchmark, and in 2021 it announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after December 31, 2021, in the case of 1 week and 2 month U.S.

dollar (“USD”) settings, and immediately after June 30, 2023, in the case of the remaining USD settings.

The Federal Reserve Board has also advised banks to stop writing new USD LIBOR contracts.

The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has identified the Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, backed by U.S.

Treasury securities, as its preferred alternative rate for LIBOR in the U.S.

Working groups formed by financial regulators in other jurisdictions, including the U.K., the European Union, Japan, and Switzerland, have also recommended alternatives to LIBOR denominated in their local currencies.

Although SOFR appears to be the preferred replacement rate for USD LIBOR, it is unclear if other benchmarks may emerge or if other rates will be adopted outside of the United States.

At this time, it is not possible to predict how markets will respond to SOFR or other alternative rates as the transition away from the LIBOR benchmarks is anticipated in the coming years.

Accordingly, the outcome of these reforms is uncertain, and any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR’s phaseout could cause LIBOR to perform differently than in the past or cease to exist.

The consequences of these developments cannot be entirely predicted, and there can be no assurance that they will not result in financial market disruptions, significant increases in benchmark interest rates, substantially higher financing costs or a shortage of available debt financing, any of which could have an adverse effect on us.

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Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to pay distributions to our stockholders.

Increases in interest rates could increase the amount of our interest payments and adversely affect our ability to pay distributions to our stockholders.

Although a significant amount of our outstanding debt has fixed interest rates, we borrow funds at variable interest rates under our credit facilities and term loans.

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As of December 31, 2022, 28 of our 271 wholly-owned shopping centers, four outparcels, and the land under which one of our properties is located, comprising approximately 10.9% of our ABR, are subject to the protection described in clause (i) above, and the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to such protection is approximately $149.0 million.

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We and the Operating Partnership entered into an additional tax protection agreement (the “2021 TPA”) on July 19, 2021 with Mr.

Murphy, our President;

and Robert F.

Myers, our Chief Operating Officer and Executive Vice President, which will become effective upon the expiration of the 2017 TPA.

Murphy, and Mr.

Myers, which will become effective upon the expiration of the 2017 TPA.

The 2021 TPA generally has the following terms:

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Edison relating to structuring such transaction in a manner to avoid or mitigate adverse tax consequences to him.

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Therefore, although it may be in our stockholders’ best interest for us to cause the Operating Partnership to sell, exchange, transfer or otherwise dispose of one or more of these shopping centers, it may be economically prohibitive for us to do so until the expiration of the applicable protection period because of these indemnity obligations.

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federal income tax purposes commencing with our taxable year ended December 31, 2010.

We believe that our organization and method of operation has enabled and will continue to enable us to meet the requirements for qualification and taxation as a REIT for U.S.

We believe that our organization and method of operation has enabled and will continue to enable us to meet the

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requirements for qualification and taxation as a REIT for U.S.

federal income tax purposes.

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• we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

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As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it could adversely affect the value of our common stock.

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Such dividend income should qualify under the 95%, but not the 75%, gross income test.

We will monitor the amount of the dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests.

We will monitor the amount of the

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dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests.

While we expect these actions will prevent a violation of the REIT income tests, we cannot guarantee that such actions will in all cases prevent such a violation.

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The IRC also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.

We will monitor the value of investments in our TRS entities in order to ensure compliance with TRS ownership limitations and will structure our transactions with our TRS entities on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described

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There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.

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It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS.

However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be subject to a corporate income tax.

However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be

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subject to a corporate income tax.

In addition, the IRS may attempt to ignore or otherwise recast such activities in order to impose a prohibited transaction tax on us, and there can be no assurance that such recast will not be successful.

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Additionally, we may deduct our capital losses only to the extent of our capital gains in computing our REIT taxable income for a given taxable year.

Consequently, we could recognize

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substantial amounts of REIT taxable income and would be required to distribute such income to shareholders in a year in which we are not profitable under GAAP or other economic measures.

Consequently, we could recognize substantial amounts of REIT taxable income and would be required to distribute such income to shareholders in a year in which we are not profitable under GAAP or other economic measures.

Our qualification as a REIT could be jeopardized as a result of an interest in joint ventures or investment funds.

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As a result, our operating results may be adversely affected.

There are some types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or sublimits.

Insurance risks associated with potential acts of terrorism could sharply increase the premiums that we pay for coverage against property and casualty claims.

Additionally, mortgage lenders in some cases insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans.

Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our shopping centers.

In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses.

We may not have adequate, or any, coverage for such losses.

Changes in the cost or availability of insurance could expose us to uninsured casualty losses.

If any of our shopping centers incur a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured

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loss, which may reduce the value of our stockholders’ investment.

Terrorist activities or violence occurring at our properties also may directly affect their value through damage, destruction, or loss.

Insurance for such acts may be unavailable or cost more, which could result in an increase to our operating expenses and adversely affect our results of operations.

To the extent that our Neighbors are affected by such attacks or threats of attacks, their businesses may be adversely affected, including their ability to continue to meet obligations under their existing leases.

If any of our shopping centers incur a casualty or other loss that is not fully or adequately insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of our stockholders’ investment.

In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property.

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Physical risks from climate change include an increase in sea level and changes in weather conditions, such as an increase in storm intensity and severity of weather (e.g.

floods, tornadoes, or hurricanes) and extreme temperatures.

The occurrence of sea level rise or one or more natural disasters, such as floods, tornados, hurricanes, tropical storms, wildfires, and earthquakes (whether or not caused by climate change), could cause considerable damage to our shopping centers, disrupt our operations and negatively affect our financial performance.

floods, droughts, tornadoes, or hurricanes) and extreme temperatures.

The occurrence of sea level rise or one or more natural disasters, such as floods, droughts, tornados, hurricanes, tropical storms, wildfires, and earthquakes (whether or not caused by climate change), could cause considerable damage to our shopping centers, disrupt our operations and negatively affect our financial performance.

To the extent any of these events results in significant damage to or closure of one or more of our shopping centers, our operations and financial performance could be adversely affected through lost Neighbors and an inability to lease or re‑lease the space.

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In addition, transition risks associated with new or more stringent laws or regulations or stricter interpretations of existing laws may require material expenditures by us.

For example, various federal, state, and regional laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions.

Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency, and waste management.

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We could become subject to liability in the form of fines or damages for noncompliance with environmental laws and regulations.

T hese laws and regulations generally govern wastewater discharges;

air emissions;

the operation and removal of underground and above-ground storage tanks;

the use, storage, treatment, transportation and disposal of hazardous materials and wastes;

the remediation of contaminated property associated with the release or disposal of hazardous materials and wastes;

and other health and safety-related concerns.

Some of these laws and regulations may impose strict or joint and several liability on tenants, owners, or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal.

Under various federal, state, and local environmental laws, ordinances, and regulations, a current or former owner or operator of real property may be liable for the cost to remove or remediate hazardous or toxic substances, wastes, or petroleum products on, under, from, or in such property.

federal, state, and local laws and regulations relating to the protection of the environment may require us, as a current or previous owner or operator of real property, to investigate and clean up hazardous or toxic substances or petroleum product releases at, on, under, from, or in a property or at impacted neighboring properties, which in our case most typically arise from current or former dry cleaners, gas stations, asbestos usage and historic land use practices.

These costs could be substantial and liability under these laws may attach whether or not the owner or manager knew of, or was responsible for, the presence of such contamination.

Even if more than one person may have been responsible for the contamination, each liable party may be held entirely responsible for all of the clean-up costs incurred.

For example, many of our sites are currently or were formerly used for dry cleaning operations, and there have been and could be releases of chlorinated solvents as a result of these operations, which have resulted in and could give rise in the future to the requirement that we perform clean-up actions.

As another example, many of our sites are currently or were formerly used for motor vehicle filling station and maintenance operations, and there have been and could be releases of petroleum products, hydraulic oil, or other substances associated with these operations, which have resulted in and could give rise in the future to the requirement that we or others investigate or remediate the releases.

We may be subject to regulatory action and may also be held liable to third parties for personal injury or property damage incurred by such parties in connection with exposure to or offsite contamination caused by hazardous or toxic substances.

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Cybersecurity attacks include attempts to gain unauthorized access to our data and/or computer systems to disrupt operations, corrupt data, or steal confidential information.

We may face such cybersecurity attacks through malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our

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organization, and other significant disruptions of our information technology (IT) systems.

We may face such cybersecurity attacks through malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology (IT) systems.

The risk of a cybersecurity attack, including by computer hackers (individual or hacking organizations), foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased.

The techniques and sophistication used to conduct cyber attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

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Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our Neighbors.

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Regulatory and Legal Risks

Compliance or failure to comply with the Americans with Disabilities Act (the “ADA”), and fire, safety, and other regulations could result in substantial costs and may decrease cash available for stockholder distributions.

Compliance or failure to comply with the ADA, and fire, safety, and other regulations could result in substantial costs and may decrease cash available for stockholder distributions.

Our shopping centers are or may become subject to the ADA which generally requires that all places of public accommodation comply with federal requirements related to access and use by disabled persons.

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Risks Related to Our Common Stock

An active trading market for our common stock may not be maintained.

Our common stock only recently began trading on Nasdaq, and we cannot assure you that an active trading market will be sustained.

Whether an active public market for shares of our common stock will be maintained depends on a number of factors, including the extent of institutional investor interest in us, the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate based

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companies), our financial performance, and general stock and bond market conditions.

If an active trading market for shares of our common stock does not develop, you may have difficulty selling shares of our common stock, which could adversely affect the price that you receive for such shares.

The market price and trading volume of shares of our common stock may be volatile.

stock markets, including Nasdaq, on which our common stock recently began trading, have experienced significant price and volume fluctuations.

As a result, the market price of shares of our common stock is likely to be similarly volatile, and investors in shares of our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects.

stock markets, including Nasdaq, on which our common stock trades, have experienced significant price and volume fluctuations.

As a result, the market price of shares of our common stock may be similarly volatile, and investors in shares of our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects.

We cannot assure you that the market price of shares of our common stock will not fluctuate or decline significantly in the future.

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• the annual yield from distributions on shares of our common stock as compared to yields on other financial instruments;

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• equity issuances by us, or future sales of substantial amounts of shares of our common stock by our existing or future stockholders, or the perception that such issuances or future sales may occur;

• the recent automatic conversion of all shares of our Class B common stock into shares of our listed common stock;

• increases in market interest rates or a decrease in our distributions to stockholders that lead purchasers of shares of our common stock to demand a higher yield;

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Future issuances of shares of our common stock may also be dilutive to existing stockholders.

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Future offerings of debt securities, which would be senior to our common stock upon liquidation, and/or preferred equity securities, which may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock.

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Because we may generally issue any such debt or equity securities in the future without obtaining the consent of our stockholders, you will bear the risk of our future offerings reducing the market price of our common stock and diluting your proportionate ownership.

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If we pay distributions from sources other than our cash flows from operations, we may not be able to sustain our distribution rate, we may have fewer funds available for investment in shopping centers and other assets, and our stockholders’ overall returns may be reduced.

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Increases in market interest rates may result in a decrease in the value of shares of our common stock.

One of the factors that may influence the price of shares of our common stock will be the dividend distribution rate on our common stock (as a percentage of the price of shares of our common stock) relative to market interest rates.

If market interest rates rise, prospective purchasers of shares of our common stock may expect a higher distribution rate.

One of the factors that may influence the price of shares of our common stock is the dividend distribution rate on our common stock (as a percentage of the price of shares of our common stock) relative to market interest rates.

If market interest rates rise, as has recently been experienced, prospective purchasers of shares of our common stock may expect a higher distribution rate.

Higher interest rates would not, however, result in more funds being available for distribution and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution.

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If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed.

We are currently required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and as of December 31, 2022, we expect that we will be required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

To date, the audit of our consolidated financial statements by our independent registered public accounting firm has included a consideration of internal control over financial reporting as a basis of designing their audit procedures, but not for the purpose of expressing an opinion (as will be required pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002) on the effectiveness of our internal control over financial reporting.

If a material weakness or significant deficiency was to be identified in our internal control over financial reporting, we may also identify deficiencies in some of our disclosure

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controls and procedures that we believe require remediation.

We are currently required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and as of December 31, 2022, we are required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

If a material weakness or significant deficiency was to be identified in our internal control over financial reporting, we may also identify deficiencies in some of our disclosure controls and procedures that we believe require remediation.

If we or our independent registered public accounting firm discover weaknesses, we will make efforts to improve our internal control over financial reporting and disclosure controls.

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Ineffective internal control over financial reporting and disclosure controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the per share trading price of our common stock.

Prior to our underwritten IPO, we had no operating history as a publicly traded company and may not be able to successfully operate as a publicly traded company.

Prior to our underwritten IPO, we had no operating history as a publicly traded company.

We cannot assure you that the past experience of our senior management team will be sufficient to successfully operate our Company as a publicly traded company.

Upon completion of our underwritten IPO, we were required to comply with the Nasdaq listing standards, and this transition could place a significant strain on our management systems, infrastructure and other resources.

Failure to operate successfully as a publicly traded company would have an adverse effect on our financial condition, results of operations, cash flow, and per share trading price of our common stock.

UNRESOLVED STAFF COMMENTS

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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 1A. Risk Factors