R.J. Milligan • Raymond James

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President & CEO Jonathan Stanner cited stabilizing demand trends, easier year-over-year comparisons in Q4, and a more constructive industry group calendar as reasons for optimism. For future demand, he pointed to the 2026 World Cup. On expenses, Stanner expressed high confidence in the team's ability to continue prudent cost management, highlighting that year-to-date operating expenses were up only 1.5% and that the company's efficient operating model helps protect margins.

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Executive William H. Conkling stated that from Summit's perspective, the capital markets are already very constructive. He noted that various financing channels—secured, unsecured, bank, and convert markets—are open and improving. For the types of assets Summit targets at mid-8% to 9% cap rates, there is already a solid, accretive spread between the cost of financing and acquisition yields.

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Philip Mays, SVP, CFO & Treasurer, calculated the quarterly impact of the $25.5M loan payoff to be a reduction of slightly more than a penny per share per quarter. He also estimated that a new five-year term loan for PINE would price at an all-in rate of around 5%.

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John Albright, an executive, anticipates that leverage will be at or below current levels by year-end, thanks to expected loan payoffs and asset sales. He confirmed there are no tenant issues in the high-quality structured investment portfolio. Philip Mays, an executive, noted the primary NOI impact will be the cessation of rent from Party City starting in Q2, which had paid through Q1.

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Executive John Albright stated that the Walgreens portfolio is manageable, with an average lease duration of 7.6 years and the nearest expiration six years away. He mentioned they are receiving active bids and will continue to reduce exposure opportunistically. Regarding credit risk, Albright expressed confidence in the portfolio's health, identifying At Home as the only potential concern but noted PINE's very low basis in those properties, making them manageable.

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Executive John Albright confirmed that leasing activity for anchor spaces has remained consistently strong and robust, with no pause from tenants despite market volatility. An unnamed executive, Bill, added that the high new lease spread was primarily driven by two large leases totaling 54,000 square feet, which achieved a spread of over 80%, aligning with the high end of their re-tenanting expectations.

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Executive Philip Mays stated that beyond the known vacancies detailed on Slide 8, the guidance incorporates a general 1% bad debt assumption, consistent with historical levels. He expects most new rent to commence in the first half of 2026. Executive John Albright added that they are prioritizing higher-quality, investment-grade tenants, which creates more value through higher rents and cap rate compression, citing one space where rent could double.

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Executive John Albright stated that the company's goal is to maintain lower leverage and that the current level is comfortable. He added that while they might temporarily increase leverage for a significant acquisition opportunity, the strategy would be to rebalance and bring it back down afterward.

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CFO Heath Fear clarified that guidance was raised by $0.01 from termination fees because the actual fee received ($0.03/share) was higher than the $0.02/share originally anticipated. CEO John Kite explained that the Legacy West deal was a long-term process initiated when KRG's stock was at a higher price, and the rare opportunity to acquire an iconic, high-growth asset represented the best long-term value creation.

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CEO Joey Agree responded that development partners have not paused their activities and some are even announcing new stores. He confirmed there are no new additions to the company's watch list, noting they had already proactively reduced exposure to pharmacy and dollar stores. On cap rates, Agree stated he had 'no idea' where they would end the year due to significant volatility in the 10-year Treasury, which he believes creates an unpredictable environment.

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CEO Joey Agree responded that they have not seen any pause in development appetite from retail partners, noting recent expansion announcements from Sam's Club and Kroger. He confirmed there are no new tenants on the watch list beyond the previously discussed pharmacy and dollar store sectors. Regarding year-end cap rates, he stated he has 'no idea' due to extreme market volatility, explaining that cap rates are not moving significantly with daily treasury fluctuations but are more influenced by broader shifts in the 'fear-greed spectrum'.

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CFO Kevin B. Habicht attributed the lower 2024 G&A guidance to minor accrual adjustments and projected a standard inflationary increase for 2025. He identified acquisitions as the primary driver for 2025 growth, supplemented by embedded rent growth across the existing portfolio. He noted that the acquisition pipeline for Q4 and early 2025 looks solid, which will be key to offsetting the known headwinds.

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