CTO-PA — CTO Realty Growth, Inc.

CTO Realty Growth Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Core FFO: $16.9 million, up from $14.4 million year-over-year; $0.52 per diluted share vs. $0.46.
• AFFO: $18.2 million, an increase from $15.5 million; $0.56 per diluted share vs. $0.49.
• Same-Property NOI: Increased by 6.8% year-over-year; 4.2% growth excluding nonrecurring items.
• Portfolio Occupancy: 95.4% leased, with notable leasing activity contributing to NOI growth.
• Debt: Total debt of $651.8 million, with a weighted average interest rate of 4.6%.
• Liquidity: Approximately $125 million available.

2. Strategic Updates and Business Highlights

• Acquisition: Completed the acquisition of Palms Crossing in McAllen, Texas for $81.6 million, currently 98% leased.
• Leasing Activity: Executed leases totaling 153,000 square feet, with a 14% average cash rent increase. Notable leases include Williams Sonoma and Pottery Barn Kids.
• Outparcel Development: Progress on 6 outparcels with expected low double-digit unlevered yields; $30 million investment anticipated to contribute to earnings starting in 2027.
• Property Recycling: Madison Yards under contract for sale, expected to close in May, which will reduce AMC Theatres exposure.

3. Forward Guidance and Outlook

• Core FFO Guidance: Raised to a range of $2.06 to $2.11 per diluted share.
• AFFO Guidance: Increased to a range of $2.19 to $2.24 per diluted share.
• Investment Volume: Projected structured investments of $175 million to $250 million.
• Same-Property NOI Growth: Expected growth of 3.5% to 4.5% for shopping centers.

4. Bad News, Challenges, or Points of Concern

• Vacancy Issues: Carolina Pavilion remains at 83% leased, with ongoing negotiations for remaining vacancies.
• Impact of Nonrecurring Items: Some financial metrics may be skewed by nonrecurring recovery benefits, which could affect future comparisons.
• Market Uncertainty: No visible hesitancy in leasing, but macroeconomic factors could impact consumer behavior and retailer confidence.

5. Notable Q&A Insights

• Investment Strategy: The company aims to keep structured investments below 20% of the balance sheet, targeting around 15%.
• Leasing Pipeline: Progress on leasing agreements is ongoing, with potential delays due to the nature of negotiations with large national retailers.
• Market Dynamics: Increased competition for acquisitions due to larger institutional investors, but CTO's nimbleness is seen as an advantage.
• Madison Yards Disposition: Not included in guidance assumptions, but it represents a strategic move to recycle capital effectively.

Overall, CTO Realty Growth reported strong financial results and strategic progress in Q1 2026, with a positive outlook for the year despite some challenges in leasing and market conditions.