CTO Realty Growth, Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the CTO Realty Growth First Quarter 2022 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your telephone keypad. If you require any further assistance, please press star then 0. At this time, I would like to turn the conference over to Mr. Matt Partridge.

Good morning, everyone, and thank you for joining us today for the CTO Realty Growth First Quarter 2022 Operating Results Conference Call. With me today is our CEO and President, John Albright. Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and SEC filings. You can find our SEC reports, earnings release, and supplemental disclosure package on our website at ctoread.com. With that, I'll now turn the call over to John.

Thanks, Matt, and good morning, everyone. We came into 2022 with a lot of opportunity and momentum from a very active 2021, and we've carried that momentum into the first quarter, both transactionally and operationally. We acquired one new retail property in Houston, Texas, originated a new retail development loan for a project adjacent to one of our recent acquisitions, continued to recycle out of properties in our remaining single-tenant portfolio, and we produced strong property NOI growth and leasing activity. On the acquisitions front, we acquired Price Plaza Shopping Center in Houston, Texas, for $39.1 million. The property sits along Katy Freeway, just up the road from Houston's Energy Corridor. and has a stable tenant base anchored by Ross, DeeDee's Discount, and Best Buy. Our dispositions in the quarter were once again centered on our single-tenant net lease assets as we sold our Party City in Long Island and our Carpenter ground lease in Austin, Texas, whereby the LSE of the Carpenter Hotel exercised their contractual repurchase rights. Overall, the two dispositions were completed at a combined sales price of $24 million for a weighted average exit cap rate of 6%. To round out our transaction activities within the quarter, we originated an $8.7 million construction loan on Phase 2 of the exchange at Gwinnett just outside of Atlanta near Simons Mall of Georgia. We purchased Phase 1 of the retail portion of the project this past December As part of the Phase 2 funding commitment, we secured a right of first refusal on the property that gives us the future flexibility in our acquisition pipeline. Following the end of the quarter, we originated a $30 million preferred equity investment in Waters Creek, a grocery-anchored retail property in Allen, Texas, that is just up the road from our shops at Legacy and Plano. This investment was an opportunity to generate a strong yield on an asset we otherwise would like to own, and it provides capital to the acquiring sponsor to reposition the property to be the premier lifestyle experience in this fast-growing sub-market of Dallas. Year-to-date, we've committed more than $77 million of capital to acquisitions and structured investment, with a blended yield of 7.8%. Within our existing portfolio, we sign new leases in the corridor at an average rent of more than $31 per square foot, with notable demand from food and beverage operators. New leases signed were primarily related to existing vacancy associated with units that were acquired as vacant. Of the backfill opportunities we had, we were able to grow rents by more than 8% largely through an office user replacement at our shops at legacy property where we've seen solid demand. That property is now 93% leased up from its 83% occupancy at the time of acquisition just 10 months ago. Of our renewals and extensions during the quarter, we experienced approximately 1.5% growth in the new per square foot lease rates versus the prior rates. The leasing progress we've made over the past year has contributed to our robust same property net operating income, which increased nearly 18% over the first quarter of 2021. Not surprisingly, this was driven by a 27% same property NOI increase from our multi-tenanted properties with Ashford Lane in Atlanta, Crossroads Town Center in Phoenix, and The Strand in Jacksonville, all delivering outside growth. Our Ashford Lane project has been especially active, driven by our repositioning and creation of the lawn, which is scheduled to be completed in June. And finally, we've made good progress with our repositioning of the Santa Fe property we acquired in December. Just in the past two weeks, we signed a lease with a prominent hospitality user who will create four high-end suites on the vacant fourth floor of one of the buildings to satisfy the significant demand they're experiencing from increased tourism and a continued influx of television and movie production in the area. This property is now 86% leased, which is 20 points higher than the 66% in-place occupancy we had at the time of acquisition. We'll have more details regarding this lease and our plan for the property over the coming months. but we're excited about this new partnership and the growth in lease documents that we've experienced in our short period of ownership. With that, I'll now turn the call over to Matt to talk about our first quarter performance.