Floris van Dijkum

Floris van Dijkum inquired about quantifying the signed, not open pipeline, whether the Q4 average rent indicates the portfolio's mark-to-market potential, and the current shop occupancy relative to historical levels and anchor occupancy.

Answer

Dave Holeman, Chief Executive Officer, explained that Whitestone REIT does not typically report signed, not open figures due to their quick turnaround on smaller spaces, but acknowledged the pipeline is growing due to strong progress. Scott Hogan, Chief Financial Officer, suggested that leasing spreads (18.2% for Q4, consistently over 17% for 15 quarters) are the best indicator for future rent increases, noting that Q4's higher average rent was likely due to a mix of smaller tenants. Dave Holeman, Chief Executive Officer, provided occupancy rates of 97.7% for larger spaces and 92.7% for smaller spaces, indicating more upside potential for small spaces to reach higher occupancy levels.

Floris van Dijkum asked for quantification of Whitestone REIT's signed, not open (SNO) pipeline, its historical comparison, the mark-to-market potential based on Q4 average rents, and the current shop and anchor occupancy levels relative to historical records and future potential.

Answer

Dave Holeman, Chief Executive Officer, stated that Whitestone REIT does not typically report SNO due to its model of quickly commencing leases for smaller spaces, making it a less significant metric. He noted that the strong leasing environment suggests the SNO pipeline is growing, but they move quickly to convert. Scott Hogan, Chief Financial Officer, advised looking at the consistent 17%+ leasing spreads for mark-to-market indications, noting Q4's higher average rent might reflect a mix of smaller tenants. Dave Holeman reported larger space occupancy at 97.7% (up from 97.4% year-over-year) and smaller spaces at 92.7% (up 60 bps from 92.1% year-over-year), both at record levels. He believes there's still room to push occupancy, especially in small spaces, aiming for levels comparable to larger spaces.

Floris Van Dijkum asked for an update on temporary tenancy, noting it has been around 10% recently compared to a historical 5%, and how this trend is expected to evolve, given its impact on profitability per occupancy. He also inquired about foreseen investments and repositioning opportunities at the Kansas City Legends center following the Chiefs stadium relocation.

Answer

Stephen Yalof, President, CEO, and Director, Tanger, explained that the 10% temporary tenancy strategy is crucial for maintaining cash flow when space is returned (e.g., Saks boxes), allowing time for long-term retenanting. This flexible vacancy strategy, supported by 41 new short-term leasing representatives, allows for trying new uses and brands. Regarding Kansas City, Yalof stated the center was acquired with a capital plan in mind, and the Chiefs' move only enhances opportunities, increasing retailer interest and potential for peripheral land development, non-traditional retailers, and expanded food, beverage, and entertainment options.

Floris Van Dijkum requested an update on Tanger's temporary tenancy strategy, its historical and current percentage, and its expected trajectory, noting its impact on profitability compared to permanent occupancy. He also asked about foreseen investments and repositioning opportunities at the Kansas City Legends asset, given the announced Chiefs stadium relocation.

Answer

Stephen Yalof (President, CEO, and Director, Tanger) explained that the 10% temporary tenancy is a crucial strategy to fill spaces quickly (e.g., potential Saks rejections), maintain cash flow, and allow for long-term re-tenanting. He noted that flexible vacancy is always present, and the strategy allows for trying new uses and brands, with 41 new short-term leasing representatives. Regarding Kansas City Legends, Stephen Yalof stated that investments are already underway, and the Chiefs' move is attracting more retailers, creating opportunities for peripheral land development and overall growth, positioning it as a future growth vehicle.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. inquired about the growth potential from converting temporary tenants to permanent, the ability to increase fixed CAM, and the demand from new-to-outlet retailers.

Answer

CFO Michael Bilerman emphasized that the primary goal is driving total rent and NOI, not just a specific metric like fixed CAM. He noted that while temporary occupancy is above historical norms, it provides a strategic pool for future upside with no set timeline for reduction. CEO Stephen Yalof highlighted the success of bringing in new brands like Marc Jacobs, which attract their own loyal customer base, creating a 'win-win' for the centers.

Floris van Dijkum asked about Tanger's pivot to lifestyle centers, inquiring about the potential number of such centers in the portfolio in 18-24 months, and sought details on the fixed CAM structure and its impact on financial results.

Answer

President & CEO Stephen Yalof characterized the move as an evolution, not a pivot, leveraging the company's operational strengths to add value to open-air centers. He did not provide a target number. CFO & CIO Michael Bilerman explained that most tenants are on fixed CAM, which is included in their strong total rent spread calculations, leading to a high expense recovery rate of 87% that is expected to be similar in 2025.

Floris van Dijkum of Compass Point inquired about the target occupancy costs for new tenants, the relationship between high new lease spreads and future tenant sales, and the current acquisition environment, including cap rate trends.

Answer

Executive Vice President of Leasing Justin Stein noted new tenant occupancy costs are in the 10-12% range. President and CEO Stephen Yalof clarified that high rent spreads are driven by replacing tenants with below-market rents and strong demand, not a direct indicator of future sales growth. CFO and CIO Michael Bilerman added that the acquisition strategy is focused on assets where Tanger can add value, acknowledging a competitive market.

Floris van Dijkum asked for more details on the go-forward portfolio, specifically what percentage of total NOI it represents. He also requested additional information on the SNOW pipeline, including its square footage representation and the percentage of the $107 million pipeline that represents luxury tenants, and the foreseen expansion in that segment.

Answer

Dan Swanstrom, Senior EVP and CFO, directed to the supplemental, noting the go-forward portfolio's NOI was $738 million for 2025, representing a substantial majority of the total. Brad Miller, Senior VP of Portfolio Management, and Doug Healey, Senior EVP of Leasing, clarified that luxury is a relatively small part of the SNOW pipeline, primarily concentrated in Scottsdale, where the luxury wings are already 90-91% committed with most luxury retailers having already opened or scheduled for 2027. Jackson Hsieh, President and CEO, added that the 1,000 inline new leases represent 20-25% of the go-forward portfolio's inline floor plan, with 90% of the remaining 1.6 million sq ft in A, B, and C-rated spaces, mostly in fortress properties.

Floris van Dijkum asked about the go-forward portfolio's contribution to total NOI and sought more details on the SNO pipeline, including its square footage representation and luxury component.

Answer

Dan Swanstrom, Senior EVP and CFO, referred to the supplemental, noting the go-forward portfolio's 2025 NOI was $738 million out of $841 million total. Brad Miller, Senior VP of Portfolio Management, and Doug Healey, Senior EVP of Leasing, clarified that luxury is a small part of the $107 million SNO pipeline, with most luxury leasing at Scottsdale and FOC largely complete. Jackson Hsieh, President and CEO, added that 1,000 new inline leases represent 20-25% of the go-forward portfolio's inline population, with remaining uncommitted spaces being high-quality.

Requested detailed information on the S&O pipeline's composition and contribution to NOI, and asked about the strategy and targets for reducing temporary tenancy.

Answer

The S&O pipeline represents about 12% of go-forward NOI, with the majority of future growth coming from high-quality spaces. The company declined to give a specific target for temporary occupancy reduction but emphasized the strategy is to replace temp tenants with permanent ones, highlighting a significant opportunity at the newly acquired Crabtree mall, where retailer interest is very high.

Floris van Dijkum noted that the signed-not-open (SNO) pipeline hadn't significantly moved despite Q4 asset sales and asked about the SNO's location and its impact on potential sales. He also requested an update on the entitlement process for the Ontario land parcel and the sale status of both the Ontario and Carillon land parcels.

Answer

EVP and CFO Heath Fear clarified that the SNO pipeline actually increased by $4 million sequentially, even after accounting for $1.6 million of SNO NOI from sold assets. Chairman and CEO John Kite explained that selling assets with upside is part of analyzing individual deals for capital spend versus sale returns. President and COO Tom McGowan updated that the Ontario entitlement process is lengthy, extending into 2027 but moving in the right direction with county support. John Kite added that the Carillon land sale is also being pursued to maximize value, as both are large parcels with no associated NOI.

Floris van Dijkum from Ladenburg Thalmann & Co. Inc. asked about the investment returns on Legacy West compared to the disposed power centers and sought details on the purchase accounting. He also inquired about the drivers behind KRG's high recovery ratio and its potential ceiling.

Answer

CFO Heath Fear explained that the effective yield on the Legacy West acquisition and the sell yield on the contributed power centers were both around 6.5%, making it an elegant transaction. CEO John Kite attributed the high recovery ratio to a long-term strategy of converting leases to fixed CAM, aggressive expense control, and a disciplined operational focus, noting 95% of new deals this year have been fixed CAM.

Floris van Dijkum from Ladenburg Thalmann & Co. Inc. asked for a comparison of the investment yields between the Legacy West acquisition and the power center disposition, and also inquired about the drivers of the company's high expense recovery ratio.

Answer

CFO Heath Fear explained that the transaction was structured elegantly, with both the effective yield on the Legacy West acquisition and the sell yield on the contributed power centers being approximately 6.5%. CEO John Kite attributed the sector-leading recovery ratio to a long-term, disciplined strategy of converting leases to a fixed CAM structure (95% of deals in 2025), combined with aggressive operational expense management.

Floris van Dijkum from Ladenburg Thalmann & Co. Inc. asked about the 6.5% return on Legacy West compared to the disposed power center yield and sought details on purchase accounting. He also inquired about KRG's sector-leading recovery ratio and potential for further improvement.

Answer

CFO Heath Fear described the transaction as "extremely elegant," confirming both the acquisition yield on Legacy West and the disposition yield on the contributed assets were 6.5%. CEO John Kite attributed the high recovery ratio to a long-term focus on fixed CAM conversions (95% of deals this year) and rigorous expense control, calling it a "way of operating." COO Thomas McGowan added that continuous re-bidding of contracts drives further efficiencies.

Floris van Dijkum inquired about the percentage of Federal Realty's Net Operating Income (NOI) currently captured within its comparable pool and how this impacts the Signed Not Occupied (SNO) pipeline.

Answer

Daniel Guglielmone, Chief Financial Officer, estimated that approximately 85%-90% of NOI is captured within the comparable pool. He stated that the SNO within the existing pipeline is growing significantly, with about $27 million in the existing portfolio and an additional $5-$6 million in the development portfolio. Approximately 75% of this SNO is expected to commence next year, with a split of $10-$11 million in the first half and $14-$15 million in the second half.

Floris van Dijkum asked what percentage of Federal Realty's NOI is currently captured in its comparable pool and how that impacts the signed, not occupied (SNO) pipeline.

Answer

Daniel Guglielmone, CFO, estimated that approximately 85%-90% of NOI is in the comparable pool. He noted that SNO within the existing pipeline is growing significantly, with about $27 million in the existing portfolio and another $5 million-$6 million in the development portfolio. Approximately 75% of this SNO is expected to come online next year, with about $10 million-$11 million in the first half and $14 million-$15 million in the second half.

Floris Van Dijkum asked about capital allocation preferences between buying a single large mixed-use asset versus multiple smaller ones, and about future portfolio construction. He later asked for a quantification of the rental impact from the signed-not-opened (SNO) pipeline.

Answer

CEO Donald Wood stated that capital allocation is driven by the best risk-adjusted IRR, not a preference for a specific property type, emphasizing they don't 'fall in love with properties.' EVP & CFO Daniel Guglielmone quantified the SNO pipeline at ~$42 million in total rent, with about 80% expected to commence in 2025, weighted toward the second half of the year.

Floris van Dijkum asked about Kimco Realty's strategy for its 3,700 entitled multifamily units, specifically its appetite for pursuing development itself, monetizing them through sales, or utilizing joint ventures, and how capital will be used for these projects.

Answer

President and Chief Investment Officer Ross Cooper explained that the company evaluates each opportunity individually, considering monetization of existing and future projects to crystallize value and recycle capital. He mentioned stabilizing Coulter Avenue and breaking ground in Daly City as examples, utilizing CapEx-light ground leases or JV structures where land contribution acts as preferred equity. CEO Conor Flynn highlighted this 'retail plus' strategy in first-ring suburbs as a key differentiator, unlocking embedded value from underutilized FAR and parking lots.

Floris van Dijkum asked about Kimco Realty's strategy for its 3,700 entitled apartment units, specifically whether the company intends to pursue development itself, monetize them through sales, or engage in joint ventures, and how capital will be used for these projects.

Answer

Ross Cooper, President and Chief Investment Officer, explained that Kimco evaluates each opportunity on a one-off basis, considering monetization and recycling of existing and future projects. They utilize CapEx-light ground leases or joint venture structures where land contribution sits as preferred equity. Conor Flynn, CEO, highlighted this 'retail plus' opportunity in first-ring suburbs as a key differentiator, allowing Kimco to unlock embedded value by adding density to underutilized assets.

Floris van Dijkum inquired about Kimco's capital recycling strategy, specifically the sale of ground parcels and ground leases, and expectations for future dispositions, including the mix of asset types.

Answer

Ross Cooper, President and Chief Investment Officer, and Conor Flynn, CEO, stated that capital recycling from low-growth, low-cap-rate ground leases and non-income producing assets is a significant and recurring strategy. They anticipate increasing dispositions in 2026, focusing on maximizing value and backfilling the ground lease pipeline with new leases.

Floris van Dijkum inquired about Kimco's capital recycling strategy, specifically the sale of ground parcels and ground leases, and expectations for future dispositions, including the mix of asset types.

Answer

Ross Cooper, President and Chief Investment Officer, and Conor Flynn, CEO, stated that capital recycling from low-growth, low-cap-rate ground leases and non-income producing assets is a significant and recurring strategy. They anticipate increasing dispositions in 2026, focusing on maximizing value and backfilling the ground lease pipeline with new leases.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. inquired about specific initiatives to improve expense recovery ratios beyond the natural lift from higher occupancy.

Answer

EVP & COO David Jamieson cited multi-year service contracts and data analytics. SVP Will Teichman added that Kimco is transforming its lease administration function, using AI and process simplification to enhance recovery rates and accelerate collections, applying lessons from prior M&A integrations.

Floris Van Dijkum asked President and CEO DJ Busch about his philosophical views on InvenTrust's market penetration and exposure, specifically how the company considers market size (by ABR, properties, or NOI) and the growth prospects for smaller markets like Phoenix (Mesa asset) in comparison to established markets like Charleston. He also inquired about InvenTrust's strategy regarding unanchored centers, particularly shadow-anchored grocers or shop-heavy assets, given the strong leasing spreads on shop tenants.

Answer

President and CEO DJ Busch expressed excitement for InvenTrust's future and the quality of its platform. He discussed growing in larger markets like Phoenix and utilizing a 'hub-and-spoke' strategy with satellites like Tucson or Flagstaff for efficient operations, similar to their approach in Charlotte with Asheville and Savannah. He emphasized focusing on high-quality grocery or essential services centers in these markets. Regarding unanchored centers, Busch acknowledged the debate between sticky anchor income and shop income. He confirmed that InvenTrust has shadow-anchored centers and views it as a viable strategy, especially when the anchor is operator-owned. He noted that unanchored assets can offer growth but with more volatility, and InvenTrust remains open to such acquisitions, particularly if they complement existing properties or are larger-scale lifestyle centers, provided they meet market criteria.

Floris Van Dijkum asked a philosophical question about InvenTrust's market penetration and exposures, specifically how they consider market size (by ABR, properties, or NOI/ABR percentage) and the growth strategy for smaller markets like Phoenix (following the Mesa acquisition), drawing parallels to their approach in Charleston. He also inquired about InvenTrust's thoughts on an unanchored strategy, similar to a peer, and their interest in shop-heavy assets within existing markets.

Answer

President and CEO DJ Busch expressed excitement about the platform's growth. He explained that in larger markets like Phoenix, they plan to grow and use nearby smaller markets like Tucson or Flagstaff as satellites, employing a hub-and-spoke strategy similar to Charlotte with Asheville and Charleston with Savannah. This approach allows for efficient operations while targeting high-quality grocery or essential services centers in markets with strong demographic trends. Regarding unanchored assets, DJ Busch acknowledged the sticky, bond-like nature of anchor income but also the growth potential of small shops. He stated they are comfortable with shadow-anchored centers, especially if the anchor owns its real estate, and would consider unanchored acquisitions, particularly smaller lifestyle centers or those complementary to existing properties, provided they meet market criteria.

Floris Van Dijkum questioned the narrowing cap rate spreads in capital recycling, noting a 50 basis point spread in recent transactions, and asked about the strategy for optimizing rents and growth at Gateway, comparing its potential to the successful redevelopment at Bruckner.

Answer

Jeff Olson, Chairman and Chief Executive Officer, acknowledged the narrower cap rate spreads but highlighted a 200-300 basis point spread in annual growth rates between acquired and disposed assets, aiming to accelerate internal growth. Jeff Mooallem, Chief Operating Officer, explained that Gateway's optimization is constrained by long-term leases and full occupancy, limiting immediate redevelopment opportunities, unlike Bruckner, where a Kmart vacancy allowed for a comprehensive transformation, significantly boosting its NOI.

Floris Van Dijkum questioned the narrowing cap rate spreads in capital recycling and what's driving this trend, and asked about optimizing rents and growth at Gateway and if Bruckner's redevelopment success could be replicated there.

Answer

Jeffrey Olson, Chairman and Chief Executive Officer, acknowledged narrower cap rate spreads but emphasized a 200-300 basis point spread in *growth* between acquired (2.5-3% growth) and sold (1% growth) assets, using capital recycling to accelerate internal growth. Jeffrey Mooallem, Chief Operating Officer, explained that Gateway's long-term leases limit immediate optimization, while Bruckner's success stemmed from gaining space back (Kmart departure), allowing a complete redevelopment that significantly increased NOI. Jeffrey Olson added that Bruckner's NOI is projected to increase from $7 million to $15 million by 2028.

Floris Van Dijkum from Ladenburg inquired about the strategy and opportunities for creating more shop space by splitting anchor boxes, including the potential returns on such capital. He also asked about the current acquisition environment, particularly in competitive markets like New York and Boston, and Urban Edge Properties' appetite for future transactions.

Answer

COO Jeff Mooallem explained that while they actively study opportunities to create shop and pad space, many remaining anchor spaces are more challenging to split. He highlighted strong demand for shop tenants paying $40-$60/sq ft, making the economics favorable when possible. Chairman and CEO Jeff Olson described the acquisition market as highly competitive with many new players, driven by debt availability and attractive cap rates. He noted the company's disciplined approach, having lost bids recently, and emphasized their strategy of pairing acquisitions with dispositions for capital recycling.

Floris van Dijkum asked about the opportunity to create more shop space by splitting anchor boxes, the number of such opportunities available, and the returns for that type of capital. He also inquired about the current acquisition environment, the ability to fund acquisitions, and Urban Edge Properties' appetite for transactions in competitive markets like New York and Boston.

Answer

Jeff Mooallem (COO) explained that while they actively seek opportunities to create shop space, most remaining anchor spaces are more challenging to convert. He noted strong demand for shop space with high rents ($40s-$60s) making the economics attractive when possible, and also mentioned creating pad spaces. Jeff Olson (Chairman and CEO) described a very competitive acquisition market with new players driven by cheaper debt and higher cap rates. He highlighted their disciplined approach, having lost out on deals by 25 basis points, and their strategy of pairing acquisitions with dispositions.

Floris van Dijkum of Ladenburg Thalmann asked about the remaining runway for accretive capital recycling, including the potential sale of non-core assets, and whether market improvements are influencing redevelopment plans for properties like Hudson Mall.

Answer

Chairman & CEO Jeffrey Olson confirmed that the company will test the disposition market in the fall and that all assets, including those in the core New York metro market, are potentially for sale at the right price. He noted that the success of their capital recycling has 'supercharged' the company. He also affirmed that strong tenant demand from underrepresented big-box retailers is making them more confident in deploying capital for redevelopments.

Floris van Dijkum inquired about the expected inflection point for Vornado's cash same-store NOI to turn positive, given the current difference between cash and GAAP same-store NOI. He also asked for an update on Upper Fifth Avenue retail rents relative to in-place rates, potential monetizations, and the status of the Meta lease at 657 Fifth Avenue.

Answer

Michael Franco, President and CFO, stated that the cash same-store NOI is expected to flip positive in the second half of 2026, improving quarter by quarter as free rent periods burn off. Steven Roth, Chairman and CEO, confirmed that the Meta lease at 657 Fifth Avenue is transitioning to a long-term agreement. He noted that while the Upper Fifth Avenue retail market is improving rapidly, it is still striving to reach the top-tier rents seen four to five years ago.

Floris van Dijkum inquired about the expected inflection point for Vornado's cash same-store NOI to turn positive, given the current difference with GAAP same-store NOI, and asked for an update on the Upper Fifth Avenue retail market, including in-place rents, monetization plans, and the status of the Meta lease at 657 Fifth Avenue.

Answer

Michael Franco, President and CFO, reiterated that cash NOI is expected to flip positive in the second half of 2026 as free rent burns off. Steven Roth, Chairman and CEO, added that the retail market on Upper Fifth Avenue and Times Square is improving rapidly but still "struggling" to reach peak rents from four to five years ago, with activity on the Meta lease progressing towards a long-term agreement.

Asked about the positive retail rent spreads, potential for rental growth on Fifth Avenue, and plans for the $450 million unsecured debt maturity in January 2025.

Answer

Retail leasing activity is strong, particularly in the PENN District and Times Square, though there is little near-term vacancy on Fifth Avenue to drive immediate spreads there. The current plan for the maturing debt is to pay it off with cash on hand, though management is monitoring financing markets.

Asked about Vornado's strategy regarding the upcoming wave of office loan maturities, the required returns for distressed acquisitions, and the current state of market rents on Fifth Avenue.

Answer

Vornado sees a significant opportunity to act as a 'solutions provider' for lenders on distressed assets and is actively looking to deploy capital for attractive, high-risk-adjusted returns, well above typical core returns. Market rents on Fifth Avenue have recovered significantly, reaching the mid-to-high $2,000s per square foot and potentially higher for prime luxury locations.

Floris van Dijkum asked about the expected inflection point for Vornado's cash same-store NOI to turn positive, and provided an update on Upper 5th Avenue retail rents, in-place rents for the JV, potential monetizations, and the status of the 657 5th Avenue Meta lease.

Answer

Michael Franco, President and CFO, Vornado Realty Trust, indicated that cash same-store NOI is expected to flip positive in the second half of 2026 as free rent periods burn off. Steven Roth, Chairman and CEO, Vornado Realty Trust, noted that the retail market is improving but still struggling to reach peak rents from four to five years ago, and declined to comment on the Meta lease due to ongoing activity.

Floris van Dijkum asked about the expected inflection point for Vornado's cash same-store NOI to turn positive, the performance of Upper Fifth Avenue retail rents relative to in-place rates, and the status of the 657 Fifth Avenue Meta lease.

Answer

Michael Franco (President and CFO) and Glen Weiss (EVP) stated that cash same-store NOI is expected to flip positive in the second half of 2026 as free rent periods burn off. Steven Roth (Chairman and CEO) noted that the Upper Fifth Avenue and Times Square retail markets are improving rapidly but still struggling to reach peak rents from four or five years ago. He also mentioned ongoing activity regarding the Meta lease at 657 Fifth Avenue, which is inappropriate to discuss further at this time.

Floris van Dijkum inquired about the current signed-not-open pipeline's dollar value and the scope of rents expected to come online over the next two years. He also asked about the expansion opportunities and growth potential of the Penn District billboard business, given Vornado's 100% ownership.

Answer

Michael Franco, President and CFO, Vornado Realty Trust, indicated a pipeline of 'more than $200 million' in income over the next two years, primarily in 2027. Both Michael Franco and Steven Roth, Chairman and CEO, Vornado Realty Trust, highlighted the strategic advantage of 100% ownership in the Penn District, allowing for optimized marketing and a historical annual revenue growth of 4-5% for signage, with quick payback periods for new signs.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked about the signed-not-yet-commenced lease pipeline and the potential upside for the Penn District's stabilized Net Operating Income (NOI) given rising market rents.

Answer

President and CFO Michael Franco noted that the full FFO impact from recent leasing would materialize significantly in 2027. Chairman and CEO Steven Roth expressed strong enthusiasm for the Penn District, stating that as rents approach the $150 per square foot achieved by neighbors, the property could 'easily' generate up to $400 million of NOI within five years from the existing inventory.

Floris van Dijkum of Compass Point inquired about the drivers of positive retail rent spreads, the potential for rental growth on Fifth Avenue, and the company's plans for its $450 million unsecured debt maturity in early 2025.

Answer

Michael Franco, President & CFO, noted a very active retail leasing pipeline, particularly in the PENN District and Times Square, which is driving positive momentum. Regarding the debt maturity, he stated the current plan is to pay it off with cash on hand, given Vornado's strong liquidity position, while also monitoring financing markets for compelling alternatives.

Floris van Dijkum asked about potential operating synergies from having multiple properties in single markets, such as Atlanta and Miami. He also inquired if Curbline Properties has considered acquiring more value-add assets with higher vacancies or if they plan to stick to their current strategy of acquiring high-quality, well-leased properties.

Answer

CEO David Lukes explained that while there are some synergies in G&A and CAM pools from scaling in certain markets, the high recovery rate in this asset class limits their flow-through to NOI. CFO Conor Fennerty added that synergies are more corporate-focused. David Lukes further stated that Curbline Properties prefers to stick to its strategy of acquiring high-quality, well-leased real estate with strong credit tenants to avoid execution, credit, and capital risks, believing this strategy will outperform in a recession.

Floris van Dijkum asked about potential operating synergies from having multiple properties in single markets, such as Atlanta and Miami. He also questioned if Curbline Properties considered value-add assets with higher vacancies or if they would stick to their current acquisition strategy. Additionally, he inquired about the company's G&A expectations on a going-forward basis, particularly after the Shared Services Agreement with SITE Centers is settled.

Answer

David Lukes (CEO) noted that while there are some G&A and CAM pool synergies from market scale, the high recovery rate on this asset class limits their impact on property performance. Conor Fennerty (CFO) emphasized that corporate-focused synergies are more significant. David Lukes (CEO) explained that Curbline's strategy focuses on high-quality, well-leased real estate with strong credit tenants to avoid execution, credit, and capital risks, believing this approach outperforms in various market conditions. Conor Fennerty (CFO) stated that 2026 guidance assumes the status quo for the Shared Services Agreement. He expects the current fees paid to SITE Centers would be replaced by internal costs, aiming for a more efficient G&A structure than SITE's 1-1.1% of GAV post-termination.

Floris Van Dijkum asked about the percentage of Curbline Properties' leasing activity that comes from option renewals, typical option terms, and expected future trends. He also inquired about the rationale behind acquiring larger assets like Mockingbird Central and Spring Ranch, and if they differ from the rest of the portfolio.

Answer

CEO David Lukes stated that option rents for national chains are typically 10% every five years, but Curbline's leases tend to have fewer options, allowing them to capture more growth at renewal. CFO Conor Fennerty added that fixed annual bumps help realize mark-to-market over the lease term. Regarding larger assets, David Lukes explained that their size often relates to zoning in supply-constrained, high-density markets, but they are still generally made up of smaller tenants, with a focus on consumer trip generation and minimal control from larger tenants.

Floris Van Dijkum asked about the percentage of Curbline Properties Corp.'s leasing activity that constitutes option renewals and the company's strategy for limiting tenant options. He also inquired about the rationale behind acquiring larger assets like Mockingbird Central and Spring Ranch, and if there's concern about leasing too much shop space in such properties.

Answer

David Lukes, CEO, explained that while national chains often have 10% every five-year options, they typically have fewer options in the original term, allowing Curbline to capture more growth at renewals. Conor Fennerty, CFO, added that fixed annual bumps allow for realizing mark-to-market over the lease term. David Lukes clarified that larger assets are acquired in highly supply-constrained markets where local business is concentrated, and the focus remains on properties with little control from larger tenants, generally made up of smaller tenants. He is not concerned about too much shop space, viewing it as concentrated inventory in specific zoned areas.

Floris van Dijkum of Ladenburg Thalmann inquired if Curbline would consider using OP units in transactions to address seller tax concerns. He also asked about the typical occupancy lift achieved on acquired properties as a measure of management's value-add.

Answer

CEO David Lukes confirmed that using OP units is an option they offer sellers, describing it as an 'arrow in the quiver,' but noted that success in structuring such deals has been limited in the company's short history. He explained that the primary value-add comes from driving rent growth on renewals and leasing vacant space at a mark-to-market, rather than significant occupancy gains, as they typically buy highly-occupied assets. CFO Conor Fennerty supported this, noting the portfolio lease rate only moved from mid-95% to 96.1% since year-end.

Floris van Dijkum questioned why Phillips Edison & Company's everyday/unanchored retail strategy isn't larger, given its higher IRRs, and if there's a limited opportunity set. He also asked about disposition cap rates and the strategy for renewal options in new leases.

Answer

Chairman and CEO Jeff Edison explained that PECO targets $1 billion in everyday retail assets over the next three years, emphasizing a disciplined approach to ensure outsized returns from the 'PECO machine.' He stated they would acquire more if opportunities meeting their criteria arise. Regarding dispositions, Jeff Edison reiterated the two buckets: stabilized assets (7-7.5% unlevered IRR, e.g., a California property at 5.7-5.8% cap rate) and de-risking opportunities (6.5-7% IRR). President Bob Myers addressed renewal options, noting strong renewal spreads (20% with 3.25% CAGRs) and new leasing spreads (34% with 2-3% CAGRs). For new deals, PECO starts by declining options but, when included, pushes for 20% increases and 3% CAGRs during option periods, incentivizing the leasing team to drive this behavior.

Floris van Dijkum questioned why Phillips Edison & Company's everyday retail strategy isn't larger given its higher IRRs, and asked about disposition cap rates and the strategy for managing options in new leases to improve overall rent spreads.

Answer

Chairman and CEO Jeff Edison explained that the everyday retail strategy targets $1 billion over three years, emphasizing a disciplined approach to ensure outsized returns, and will expand if more opportunities arise. He reiterated disposition cap rates vary by asset type, with stabilized assets selling at 5.7-5.8% cap rates. President Bob Myers detailed the leasing strategy, noting 93% retention and strong renewal spreads, and for new deals, the team aims to avoid options or secure 20% increases plus 3% CAGRs during option periods.

Floris van Dijkum asked about the strategy and returns for acquiring unanchored centers, the speed of lease-up for such assets, and the demand and return expectations from the company's joint venture partners.

Answer

President Robert Myers and CEO Jeffrey Edison described the unanchored strategy as a selective initiative yielding returns ~100 bps wider than core assets, with rapid lease-up potential. Edison added that their two JVs are actively acquiring assets, providing a complementary growth vehicle, with one fund expected to be fully invested by year-end.

Floris Van Dijkum referenced a presentation on PECO's performance during the GFC and asked if that represented a worst-case scenario for a future recession. He also questioned whether market volatility would cause the company to raise its target IRR for new acquisitions.

Answer

CEO Jeffrey Edison characterized the GFC and pandemic as extreme, two-standard-deviation events not comparable to what might be expected from a potential future downturn. He stated that their target unlevered IRR of 9% for acquisitions will likely remain stable. However, a recession would lead to more conservative underwriting assumptions, which would in turn lower acquisition pricing to meet that 9% target, rather than changing the target itself.

Floris Van Dijkum sought clarification on the joint ventures' share of the acquisition guidance and how the company allocates deals between JVs and its balance sheet.

Answer

CEO Jeffrey Edison clarified that JVs are expected to comprise about 10% of the total acquisition target. He explained the allocation process: larger centers are typically directed to the Cohen & Steers JV, while the Northwestern Mutual JV targets unique opportunities that don't strictly meet balance sheet criteria (e.g., a non-#1 or #2 grocer). He stressed that this strategy is additive and broadens the company's investment universe.

Floris van Dijkum inquired about acquisition cap rates, whether they are facing upward or downward pressure, and asked about PECO's appetite for large portfolio transactions.

Answer

CEO Jeffrey Edison stated that PECO is not a cap rate buyer, focusing instead on achieving a target unlevered IRR of over 9%. He noted that cap rates are relatively stable, with a more balanced supply-and-demand environment. Regarding portfolios, Mr. Edison said PECO looks at everything but has not been active because available portfolios have been priced at a premium, not the discount they would require to transact.

Floris van Dijkum asked about capital allocation, specifically the potential for more redevelopment given its higher returns, and any impediments to increasing redevelopment activity over the next two years.

Answer

Nick Wibbenmeyer, West Region President and Chief Investment Officer, confirmed that Regency pursues all accretive opportunities, projecting approximately 25% of the $1 billion three-year pipeline to be redevelopment. He noted that impediments primarily involve gaining access to the real estate. Alan Roth, East Region President and Chief Operating Officer, clarified that the growth in ground-up development is driving the percentage mix, not a reduced focus on redevelopment.

Floris van Dijkum inquired about the potential for increased redevelopment activity, given its higher returns compared to ground-up development, and any impediments to pursuing more redevelopments over the next two years.

Answer

Nick Wibbenmeyer, West Region President and Chief Investment Officer, confirmed that Regency actively seeks redevelopment opportunities within its existing portfolio, with approximately 25% of the projected $1 billion in new investment over the next three years allocated to redevelopment. He noted that the primary impediment is gaining access to the real estate to execute these projects.

Floris van Dijkum asked about the potential to further increase occupancy in shop spaces, given that commenced occupancy is near peak levels, and inquired about current and future trends in renewal percentages, particularly regarding potential churn from rising rents.

Answer

Alan Roth, East Region President and COO, stated that renewal retention typically hovers around 75%, which he finds comfortable for retaining quality tenants and infusing higher-quality merchandising. He expressed confidence in continuing to grow occupancy through proactive leasing, including leasing occupied space and creatively using relocation provisions to optimize the portfolio.

Floris van Dijkum asked about the potential to push shop occupancy higher, given current near-peak levels, and inquired about the current and trending renewal percentage, and expectations for churn.

Answer

Alan Roth, East Region President and Chief Operating Officer, expressed confidence in pushing occupancy higher, noting that a recent 20-basis-point drop was due to Rite Aid bankruptcy. He highlighted proactive strategies like leasing occupied space and using relocation provisions. He stated that renewal retention typically hovers around 75%, which allows for both retaining strong retailers and infusing higher-quality merchandising and rents.

Asked if the company has revised its view on potential peak occupancy levels given the strong operating environment.

Answer

Yes, the company believes it can push occupancy to new, higher peak levels. However, they will continue to strategically create vacancy for accretive redevelopment projects, which can impact the headline number. The team is focused on breaking records but will not sacrifice long-term value creation for a specific occupancy target.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked if management's view on potential peak occupancy levels has evolved given the strong environment and how much more room there is to grow.

Answer

President & CEO Lisa Palmer confirmed their thinking has changed, stating they believe they can continue to push occupancy beyond historical peaks. She noted that strategic vacancy for redevelopments can sometimes obscure the headline number, but the push for higher occupancy is ongoing. COO Alan Roth added emphatically, 'There is no ceiling,' while also noting the commitment to take space offline for accretive redevelopments.

Floris van Dijkum of Ladenburg Thalmann asked if management's view on achievable peak occupancy has changed and how much more room there is for growth.

Answer

CEO Lisa Palmer confirmed their thinking has evolved, and they now believe they can sustain higher occupancy levels than in previous cycles. She noted that they continue to surpass prior peaks. However, she and COO Alan Roth cautioned that they will strategically take space offline for accretive redevelopments, which can temporarily impact the reported occupancy figures.

Floris van Dijkum asked two questions. First, he asked where the Brentwood Place asset's 4.3 million annual visits would rank within Regency's portfolio. Second, he inquired about the potential impact on high-quality landlords as retailers face margin pressure from tariffs.

Answer

Nicholas Wibbenmeyer, West Region President and CIO, confirmed the Brentwood asset is heavily trafficked and would rank at the top end of the portfolio. On the second question, President and CEO Lisa Palmer explained that the scarcity of new, high-quality retail space provides a tailwind. Retailers need the best locations to drive sales and combat margin pressure, which positions high-quality landlords like Regency to continue growing NOI.

Floris van Dijkum inquired about the progression of Simon Property Group's S&O (stores in operation) pipeline, its expected trend throughout 2026, and the percentage of luxury tenants within this pipeline. He also asked if more 'Southdale-like' transformations are anticipated.

Answer

Brian McDade, Chief Financial Officer, reported that S&O was 2.1% at year-end, consistent with prior years, and is expected to increase in the second, third, and fourth quarters of 2026. David Simon, Chairman, Chief Executive Officer, and President, emphasized that the stability of this number indicates positive churn. He did not provide a specific luxury percentage but stressed that quality, not quantity, drives impact, citing Southdale Center's transformation through high-end leasing. Simon confirmed that more 'Southdale-like' projects are expected.

Floris van Dijkum asked about the progression of Simon Property Group's S&O (Small Shop) pipeline, its expected trend in 2026, the percentage of luxury tenants within it, and if more 'Southdales' (transformative redevelopments) are anticipated.

Answer

CFO Brian McDade reported S&O at 2.1% at year-end, consistent with prior years, expecting it to increase throughout 2026. Chairman, CEO, and President David Simon added that the stable S&O percentage indicates positive churn and replacement of tenants. He emphasized that luxury leasing focuses on quality over quantity, with significant impact from smaller, high-end additions, and confirmed that more transformative projects like Southdale are expected.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked for an update on the signed-not-opened (SNO) pipeline and questioned if the Mills' record 99.3% occupancy could become the new normal for other platforms.

Answer

CFO Brian McDade reported the SNO pipeline at 340 basis points and stated the current focus is on optimizing occupancy by improving the merchandise mix. Chairman, CEO & President David Simon downplayed the 99.3% occupancy figure as a fluctuating data point, emphasizing that the goal is to lease every space to the highest-productivity tenant.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked about the signed-not-opened (SNO) pipeline and whether the Mills portfolio's 99.3% occupancy could become the new normal for other platforms.

Answer

CFO Brian McDade stated the SNO pipeline is at 340 basis points and the current focus is on optimizing occupancy by improving the merchandise mix. Chairman, CEO & President David Simon added that while the 99.3% occupancy is a positive data point, the primary goal is leasing every space to the most productive tenant, not hitting a specific number.

Floris van Dijkum asked about BXP's outlook on tenant improvement (TI) packages, specifically how they are trending across different markets and if any markets are seeing improvements.

Answer

President Douglas Linde detailed that TI concessions are becoming lower in the downtown portfolio and stable in the Urban Edge portfolio. In Greater Washington, D.C., CBD concessions are stable, while Northern Virginia is seeing a slight decrease. Midtown is experiencing a modest pullback in concessions. On the West Coast, TI packages remain elevated due to space availability but are not increasing as they did in 2024-2025.

Floris van Dijkum inquired about BXP's outlook on tenant improvement (TI) packages, specifically how they are trending across different markets and if any markets are seeing improvements in terms of lower concessions.

Answer

Douglas Linde, President, provided a market-by-market breakdown: TI concessions are strengthening (decreasing) in the downtown portfolio, stable in Urban Edge, stable in Washington D.C. CBD, slightly lower in Northern Virginia, modestly pulled back in Midtown, and still elevated (but not increasing) on the West Coast due to space availability.

Floris van Dijkum asked about the underlying growth trends, noting positive office growth but declines in hotel and residential, specifically inquiring about a significant occupancy decline in Washington, DC residential.

Answer

CEO Owen Thomas clarified that the perceived decline in residential occupancy was likely due to new developments (Skymark, Signature) coming into service and leasing up, rather than a decline in existing assets. CFO Michael LaBelle confirmed it was a year-over-year portfolio composition change, not a sequential decline in existing assets. He stated that Skymark is leasing up well (around 90%), exceeding expectations, and stabilized residential portfolio occupancy has been strong with rising rents in tight markets like urban Boston and Reston. Owen Thomas added that the residential portfolio will get smaller in 2026 before growing again.

Floris van Dijkum observed positive underlying office growth but noted a decline in hotel and residential, specifically asking about a significant occupancy decline in Washington, DC's residential portfolio.

Answer

Owen Thomas (CEO, BXP Inc), Michael LaBelle (CFO, BXP Inc), and Douglas Linde (President, BXP Inc) clarified that the perceived decline was due to portfolio composition changes, specifically the delivery of new residential buildings like Skymark, which is now leasing up well and ahead of expectations. They emphasized that the stabilized residential portfolio's occupancy remains strong and stable, with rents continuing to rise in tight markets like urban Boston and Reston.

Floris van Dijkum of Compass Point asked about the catalysts needed to increase office transaction activity and how BXP views its cost of equity for funding potential acquisitions.

Answer

Chairman & CEO Owen Thomas identified three potential catalysts: lower interest rates, the reopening of the CMBS market for office assets providing buyer liquidity, and 'fatigue on the sales side' where owners eventually move forward with strategic dispositions. He reiterated that BXP's look-through cost of equity is in the mid-6% range, providing a benchmark for evaluating new investment opportunities.

Floris Van Dijkum from Ladenburg Thalmann asked about Brixmor's capital recycling strategy, noting that dispositions year-to-date were less than acquisitions, and inquired about the disposition pipeline and its impact on redevelopment activity. He followed up by asking if cap rates on dispositions are broadly in line with acquisitions or if there's dilution.

Answer

Brian Finnegan, Interim CEO and COO, stated that Brixmor always has a portion of its portfolio where value has been maximized, and capital is recycled into higher-growth opportunities. Mark Horgan, EVP and CIO, clarified that significant free cash flow post-dividend and normal leasing spend funds the majority of the redevelopment program, with dispositions providing limited capital to maintain leverage neutrality. He emphasized being opportunistic in selling low-growth assets to reinvest in higher-growth assets. Regarding cap rates, he noted year-to-date disposition cap rates are around 7%, with acquisitions slightly lower when blended, but the focus is on long-term hold IRR and superior growth from acquired assets.

Floris Van Dijkum inquired about Brixmor's capital recycling strategy, specifically selling stabilized, low-growth assets, the disposition pipeline, and its impact on the significant redevelopment activity, noting that year-to-date dispositions were less than acquisitions.

Answer

Brian Finnegan, Interim CEO and COO, explained that Brixmor continuously recycles capital from assets where value has been maximized into opportunities with more compelling growth. Mark Horgan, EVP and CIO, added that significant free cash flow funds the majority of the redevelopment program. He noted that new capital entering the market for open-air retail allows for opportunistic selling of lower-growth assets, with year-to-date disposition cap rates around seven, slightly higher than acquisition cap rates, but with a focus on long-term hold IRR and growth.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked about the potential for small shop occupancy, currently at a record high, inquiring about its level in redeveloped assets and its representation in the SNO pipeline.

Answer

CEO James M. Taylor stated there is clear visibility for more than 200 basis points of further growth in small shop occupancy, driven largely by leasing up space at in-process redevelopments. EVP & CFO Steven Gallagher quantified the small shop component of the SNO pipeline at approximately $35 million of ABR. Taylor reiterated that the focus is on long-term growth, not just near-term occupancy.

Floris van Dijkum asked about the redevelopment pipeline, focusing on three larger projects and questioning their strategic importance, given that their returns appeared to be slightly below the pipeline's overall average.

Answer

CEO Jim Taylor emphasized that these are highly valuable, pre-leased projects that create substantial value. President and COO Brian Finnegan provided specific updates, confirming the projects are on time and on budget. He stressed that they are consistent with Brixmor's strategy of executing pre-leased projects with fixed costs, ensuring strong, visible returns.

A representative for Floris van Dijkum asked if the acquisition pace would be back-end loaded in line with NOI growth guidance and questioned the occupancy trajectory for the recently acquired Brittain Plaza.

Answer

CEO James Taylor stated that acquisitions are opportunistic and not guided by timing. Regarding Brittain Plaza, EVP & CIO Mark Horgan highlighted immediate tenant interest for the 70% occupied center. Taylor confirmed its occupancy will remain lower during the repositioning, which he views as a significant value-creation opportunity.

On behalf of Floris van Dijkum of Compass Point, a question was asked about whether the acquisition pace would be back-end loaded in 2025 and for more details on the plan for the recently acquired Britain Plaza.

Answer

CEO James Taylor stated that acquisitions are opportunistic with no guided timing. Regarding Britain Plaza, he described it as a 70% occupied asset in a gentrifying Tampa submarket. EVP & CIO Mark Horgan added that the team is already working on redevelopment plans, fueled by strong tenant interest, viewing it as a significant value-creation opportunity.

Floris van Dijkum of Ladenburg Thalmann asked how investors should evaluate DiamondRock's performance (EBITDA vs. FFO per share) and requested more detail on the development opportunity at Chico Hot Springs.

Answer

CEO Jeffrey Donnelly advocated for investors to use metrics that account for capital expenditures, such as free cash flow per share, to get a complete picture of returns. Regarding Chico, he stated it's too early for specific numbers but confirmed it's a significant opportunity for adding rooms or other developments, with any project likely being smaller in scale than the Sedona renovation.

Floris van Dijkum of Ladenburg Thalmann & Co. Inc. asked which metrics investors should use to judge DiamondRock's performance, what the market might be misconstruing, and for more details on the Chico Hot Springs development opportunity.

Answer

CEO Jeff Donnelly advocated for looking beyond RevPAR and EBITDA to after-CapEx metrics like free cash flow per share, arguing it better reflects true returns on capital. Regarding Chico, he stated it's too early for specific numbers but confirmed it's a significant opportunity for adding rooms or other developments like glamping, with any project requiring returns well in excess of 10%.

Floris Van Dijkum of Compass Point asked if any capital deployment opportunity is currently better than share repurchases and inquired about the percentage of hotels charging resort fees.

Answer

CEO Jeff Donnelly stated that repurchasing shares is superior to acquisitions in the current market. President and COO Justin Leonard estimated that 70-75% of the portfolio by room count charges resort fees, noting implementation depends on brand permissions and market dynamics.

Floris Van Dijkum asked about the attractiveness of share buybacks versus other capital uses, the expected portfolio composition in two years, and how the company drives operational performance with a high concentration of third-party managed hotels.

Answer

CEO Jeff Donnelly confirmed that share repurchases are attractive, alongside internal ROI projects and paying down debt, given the lack of compelling external deals. He expects the portfolio to become more diversified over time. President & COO Justin Leonard explained that their high concentration of third-party managed assets gives them more direct control over operations, staffing, and cost-mitigation policies compared to peers with more brand-managed hotels.

Floris van Dijkum questioned if all 18 non-core hotels would be sold by the end of 2026 and asked whether the Hilton Hawaiian Village's EBITDA is expected to stabilize in 2026 or 2027.

Answer

Chairman and CEO Thomas Baltimore stated that he expects the 'vast majority' of the non-core portfolio to be sold by the end of next year, though a 'straggler or two' might remain. Regarding the Hilton Hawaiian Village, he expressed confidence that its performance in 2026 would be significantly closer to its peak EBITDA of approximately $185 million, implying substantial recovery during that year.

Floris van Dijkum asked about the impact of strong investor demand on cap rates for target acquisitions and whether Acadia would sell suburban assets to fund street retail growth. He also inquired about the future ABR mix.

Answer

President & CEO Kenneth Bernstein confirmed they can recycle capital from suburban assets to fund street retail growth, with a goal to make the core portfolio a vast majority street/urban and potentially double its size. EVP & CIO Reginald Livingston noted that while cap rates are tight, they can find attractive opportunities that meet their criteria.

Floris van Dijkum of Compass Point Research & Trading asked about the transaction market, specifically how many other assets RLJ might have on the market or would be willing to sell before the end of the year.

Answer

President and CEO Leslie D. Hale responded that RLJ's disposition strategy is opportunistic rather than programmatic. She explained that in the current climate, deals that can get done are typically smaller or hold strategic value for a specific buyer. She mentioned they are currently looking at one other potential asset sale but cautioned that deals not already under contract are less likely to close given the market uncertainty.

Floris Van Dijkum asked about the range of returns on stabilized conversion projects and the remaining occupancy upside in the urban portfolio compared to 2019 levels.

Answer

EVP and CFO Sean Mahoney reported that unlevered IRRs on conversions are tracking ahead of the 50%+ target. COO Thomas Bardenett added that these projects see higher EBITDA returns from better brand contribution and customer mix. Mahoney noted that portfolio occupancy is at 94% of 2019 levels, with corporate and group segments around 90%, indicating significant room for demand growth.

Floris Van Dijkum asked about capital allocation, including the potential for further asset sales, the attractiveness of acquisition opportunities, and the current bid-ask spread in the transaction market.

Answer

President and CEO Leslie D. Hale reiterated that RLJ will continue to be opportunistic portfolio managers. She stated that the bid-ask spread remains wide, which is constraining the transaction market in the near term. She anticipates the market could improve in the second half of 2025 as interest rates and the post-election environment settle.

Floris Van Dijkum asked about the transaction market, inquiring if buyers are pulling out of deals, if Host has assets on the market, and about pricing trends.

Answer

President and CEO James Risoleo described the market as being in a 'wait-and-see' mode, with some deal pauses driven by debt market conditions. He believes the market could open up later in the year. He noted that pricing for luxury and upper-upscale assets remains high, supported by low new supply. While Host is always 'testing' the market for its assets, it is under no pressure to sell and has nothing of meaningful size formally listed.

Floris Van Dijkum from Compass Point asked about the portfolio's peak occupancy level compared to the current 67.5% and requested a breakdown of the occupancy gap between resort and urban hotels.

Answer

EVP and CFO Sourav Ghosh confirmed there is an 8-point occupancy gap to the portfolio's peak level. He stated that the expectation for 2025 occupancy is to be similar to 2024 levels. He did not provide a specific breakdown between resort and urban property occupancy on the call.

Floris Van Dijkum of Compass Point questioned what conditions are necessary for Pebblebrook to achieve its $442 million EBITDA bridge target, the potential timeline, and if there's a scenario to exceed it.

Answer

Jon Bortz, Chairman and CEO, identified consistent economic growth (2%+ GDP) as the primary condition needed. He explained that with minimal new supply in their markets, this economic backdrop would drive occupancy and pricing power, potentially leading to mid-to-upper single-digit RevPAR growth. Bortz expressed confidence in achieving the target over the next three years, stating it's a matter of 'when, not if,' contingent on a stable and growing economy.

Floris Van Dijkum asked about capital allocation strategy, specifically where proceeds from sales would be redeployed and how the urban/suburban portfolio mix has shifted. He also inquired about plans for refinancing the $295 million in debt maturing in 2025.

Answer

CEO Justin Knight stated that share repurchases have been the most attractive use of capital recently and that the portfolio's urban exposure is stable at just under 40% by EBITDA. CFO Liz Perkins addressed the debt maturities, noting she is beginning discussions with lenders and would prefer five-year terms, though the market has recently been tighter. She indicated some maturing debt has very attractive rates that will be difficult to replace.

Floris van Dijkum posed a strategic question about long-term portfolio construction, asking if the company prefers to reduce its asset concentration by having more hotels or by focusing on fewer, more meaningful assets.

Answer

Bryan Giglia, Chief Executive Officer, affirmed the core strategy of recycling capital and expressed a desire to accelerate this activity in a more functional transaction market. He indicated that this could involve trading a single large asset for two smaller ones to reduce concentration, but also stressed that the company is not afraid of concentration in high-quality locations.

Floris Van Dijkum asked about the scale of the ancillary revenue opportunity across the portfolio, particularly regarding retail or billboards, as highlighted by the San Antonio property.

Answer

CEO Bryan Giglia described the San Antonio retail opportunity as unique and significant within the portfolio, potentially adding hundreds of thousands in incremental income. He noted that while other properties have some development potential on excess land, there are no other ancillary opportunities of that specific scale, and billboard potential is generally limited.

Floris van Dijkum asked about the difference in occupancy cost ratios (OCR) between national and local tenants, the current renewal percentages, and the future debt strategy for the zero-leverage Curbline entity.

Answer

CEO David Lukes explained that while nationals can often pay more rent, the focus is on the low-CapEx renewals business. He cited renewal rates in the mid-90s for nationals and mid-80s for locals. CFO Conor Fennerty stated that Curbline will have flexibility but will likely favor the efficiency of the unsecured debt market as it scales, similar to SITE Centers' historical strategy.

Floris van Dijkum inquired about the future composition of the Board of Directors for Curbline and SITE Centers post-spin. He also asked for clarification on credit underwriting for tenants like Darden and Chipotle, specifically whether the leases are with the parent company or franchisees.

Answer

CEO David Lukes indicated that while not finalized, it's fair to assume at least one current director will lead the SITE board, with the majority moving to Curbline to steward the growth entity. CFO Conor Fennerty confirmed that their Darden and Chipotle leases are 100% corporate. He elaborated that many modern franchisees are large, well-capitalized organizations, not the 'mom-and-pop' operations of the past, and are underwritten accordingly.