Cedar Realty Trust (CDR-PB) Q2 2021 Earnings Call Summary

1Key Financial Results and Metrics

Operating Funds from Operations (FFO): $8.5 million, or $0.61 per share.

Property Net Operating Income (NOI): $20.8 million.

Same-property NOI: Increased by 8.2% year-over-year, 10.2% including redevelopment properties.

Leased Occupancy: 88.7% overall, a 0.9% increase from the previous quarter; same-property leased occupancy at 90.9%.

Rent Collection: 97% of billed rent collected during the quarter.

Leasing Activity: Executed 40 leases totaling 209,100 square feet; 15 new comparable leases with a negative spread of 18.7%.

2Strategic Updates and Business Highlights

Asset Sales: Closed the sale of Camp Hill Mall for approximately $90 million at a 6.5% cap rate, indicating strong market demand for grocery-anchored retail.

Leasing Pipeline: Robust pipeline anticipated to drive occupancy and NOI growth, with a focus on grocery-anchored shopping centers.

Redevelopment Projects: Progress on mixed-use developments, including a joint venture with Goldman Sachs for the DGS office building in Washington, D.C.

Refinancing: Closed a $114 million non-recourse mortgage loan, significantly reducing debt on the balance sheet.

3Forward Guidance and Outlook

Management expects continued improvement in leasing activity and occupancy rates, potentially reaching low to mid-90% occupancy levels over the next year.

Anticipates further positive trends in leasing spreads as the market stabilizes and recovers from pandemic impacts.

The company is committed to maximizing shareholder value and addressing the disconnect between share price and underlying asset value.

4Bad News, Challenges, or Points of Concern

Negative Lease Spreads: New leases executed during the quarter reflected a negative spread of 18.7%, primarily due to deals negotiated during the pandemic.

Occupancy Drag: Redevelopment projects are causing some occupancy challenges, particularly in the short term.

Market Risks: Potential resurgence of COVID-19 variants could impact retail operations and leasing activity.

5Notable Q&A Insights

Leasing Momentum: Management expressed optimism about increasing leasing activity and expects to see improvements in lease spreads moving forward.

Board Dynamics: New board members are actively engaged in strategic discussions, particularly regarding the disconnect between public and private market valuations.

Future Asset Sales: Management is considering additional asset sales to exploit market conditions, emphasizing a disciplined approach to capital allocation.

Flexibility in Financing: The recent mortgage allows for asset substitution, providing flexibility in managing the portfolio. Overall, Cedar Realty Trust demonstrated resilience in Q2 2021, with strong financial metrics and a positive outlook, despite facing challenges related to leasing spreads and occupancy due to ongoing redevelopment efforts.