Financial Performance

The company reported a net loss of $3.3 million for the first quarter of 2024, an improvement from the $5.3 million net loss in the first quarter of 2023.

Revenue and Expenses

Rental Income increased by $0.7 million or 1.8% compared to the first quarter of 2023, primarily driven by higher base rents.

Property Expenses increased by $0.4 million or 5.2% compared to the first quarter of 2023, mainly due to higher snow removal costs, repairs and maintenance expenses, and insurance premiums.

Real Estate Tax Expense decreased by $0.5 million or 9.0% due to changes in prior year actual estimates.

General and Administrative Expenses were flat at $1.5 million.

Business Management Fee decreased by $0.5 million or 17.0% due to an amendment to the agreement that reduced the base fee.

Depreciation and Amortization decreased by $0.4 million or 2.4% due to a larger amount of fully amortized assets.

Interest Expense increased slightly by $21,000.

Property Portfolio

As of March 31, 2024, the company owned 52 properties located in 24 states, comprising 7.2 million square feet.

Occupancy Rates: Physical occupancy was 92.1% and economic occupancy was 92.5%.

Anchor Tenants: The top 10 tenants, mostly grocery stores and discount retailers, accounted for 23.7% of annualized base rent. The company has strong anchors but faces risk from further big box retailer bankruptcies.

Lease Expirations: Over the next 3 years, leases expiring comprise 42.2% of annualized base rent, with reasonably strong renewal spreads.

Capital Structure

As of March 31, 2024, the company had:

• Total debt outstanding of $845 million at a weighted average interest rate of 4.78%.
• Weighted average debt maturity of 2.5 years.
  
• $7.7 million of cash on hand.
• $68 million available for borrowing on its credit facility.

The company has no debt maturities in the next 12 months as of May 8, 2024.

Liquidity Analysis

Cash from Operations was $11.9 million for the quarter, in line with distributions paid of $4.9 million.

Capital Expenditures were $3.1 million, up from $1.0 million last year, but expected to be funded from operating cash flows.

Leverage remains reasonable at 52% of gross real estate assets. The company actively manages its leverage and interest rate risk.

Outlook

The company’s focus remains on increasing the proportion of grocery-anchored shopping centers in its portfolio and achieving a liquidity event. However, uncertainty persists around the timing, given evolving market conditions.