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

1Key Financial Results and Metrics

Operating FFO: $8.5 million, or $0.61 per share.

Property NOI: $20.8 million.

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

Leased Occupancy: 88.7%, a 0.9% increase from the previous quarter; same-property leased occupancy at 90.9%, up 0.8%.

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

2Strategic Updates and Business Highlights

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

Leasing Pipeline: Robust with expectations for increased NOI and occupancy driven by ongoing negotiations and signed leases.

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

Value-Add Redevelopments: Significant milestones achieved at several shopping centers, enhancing overall portfolio value.

3Forward Guidance and Outlook

Management anticipates continued growth in NOI and occupancy over the coming quarters, with expectations to reach low to mid-90% occupancy levels.

Positive momentum in leasing activity is expected to persist, with a focus on improving lease spreads as the market stabilizes.

The company is exploring further asset sales to capitalize on the disconnect between public and private market valuations.

4Bad News, Challenges, or Points of Concern

Negative Lease Spreads: The recent new leases executed had a negative spread of 18.7%, primarily due to deals negotiated during the pandemic.

Redevelopment Impact: The occupancy rate is affected by intentional vacancies related to redevelopment projects, which may continue to drag on overall metrics.

Market Risks: Potential resurgence of COVID-19 variants could impact retail operations and leasing activity, posing a risk to recovery.

5Notable Q&A Insights

Leasing Momentum: Management expressed confidence in continued leasing momentum, with expectations for improved lease spreads in the upcoming quarters.

Asset Sales Strategy: The management is considering additional asset sales to exploit the valuation disconnect, indicating a proactive approach to capital allocation.

Board Dynamics: New board members are seen as a positive influence, contributing to strategic discussions about addressing valuation concerns and enhancing shareholder value. Overall, Cedar Realty Trust demonstrated a strong recovery from pandemic impacts with positive financial metrics and strategic initiatives aimed at enhancing portfolio value, despite challenges in lease spreads and occupancy related to redevelopment activities.