CDR-PB — Cedar Realty Trust, Inc.

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

1. Key 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, or 10.2% including redevelopment properties.
• Leased Occupancy: 88.7%, a 0.9% increase from the prior quarter; same-property leased occupancy at 90.9%.
• Rent Collection: 97% of billed rent collected during the quarter.

2. Strategic Updates and Business Highlights

• Closed the sale of Camp Hill Mall for approximately $90 million at a 6.5% cap rate, indicating strong demand for grocery-anchored retail assets.
• Robust leasing pipeline with 40 leases executed totaling 209,100 square feet, including 15 new comparable leases.
• Positive leasing trends noted, with a focus on grocery-anchored shopping centers due to their resilience during the pandemic.
• Significant progress in redevelopment projects, including a joint venture with Goldman Sachs for the Northeast Heights project in Washington, D.C.
• Completed a $114 million refinancing of five grocery-anchored shopping centers, improving liquidity by reducing debt on the revolving credit facility from $179 million to $12 million.

3. Forward Guidance and Outlook

• Management anticipates continued growth in NOI and occupancy driven by a strong leasing pipeline.
• Expectation to return to pre-pandemic occupancy levels in the low to mid-90% range over the next year.
• Positive outlook on leasing spreads improving as the market stabilizes and demand increases.

4. Bad News, Challenges, or Points of Concern

• New lease spreads were negative at -18.7% due to deals negotiated during the pandemic, although management expects improvements moving forward.
• The overall leased occupancy remains impacted by intentional vacancies related to redevelopment projects.
• Potential risks from new COVID-19 variants could affect retail operations and leasing activity.

5. Notable Q&A Insights

• Management expressed confidence in the leasing momentum, with expectations for continued improvement in occupancy and leasing terms.
• The disconnect between public and private market valuations remains a focus, with discussions on potential asset sales to capitalize on favorable market conditions.
• The board's recent changes have been positively received, with new members contributing to strategic discussions on capital allocation and company direction.
• Flexibility in the recent mortgage financing allows for asset substitution, providing options for future sales without needing to sell the entire package.

Overall, Cedar Realty Trust is navigating a recovery phase post-COVID-19, with strong operational metrics and a strategic focus on grocery-anchored retail, while remaining vigilant about market conditions and potential risks.