CTO Realty Growth, Inc.

Good day and thank you for standing by. Welcome to the CTO Realty Growth Q1 2026 earnings 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 1-1 on your telephone. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jenna McKinney, Director of Finance. Please go ahead.

Good morning, everyone, and thank you for joining us today for the CTO Realty Growth First Quarter 2026 Operating Results Conference Call. Participating on the call this morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the executive team that will be available to answer questions during the call. I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities laws. 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 discussed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC reports, earnings release, supplemental, and most recent investor presentation on our website at ctoreet.com. With that, I will turn the call over to John.

Thanks, Jenna, and good morning, everyone. We are pleased to report a strong quarter to start the year, highlighted by a robust leasing and strong same-store NOI growth, as well as the $81.6 million acquisition of a high-quality shopping center in Texas. Our strategic focus on shopping centers located along growth corridors primarily in the southeast and southwest markets of the United States, along with a proactive asset management and leasing, continues to produce strong results. Starting with retail leasing, during the quarter, we executed leases, renewals, and extensions totaling 153,000 square feet, including 146,000 square feet of comparable leases and an average cash rent increase of 14%. Our leasing activity for the quarter was spread across our portfolio, but particularly positive at Millennia Crossing in Orlando, where we signed a lease with Williams Sonoma to fill the former mattress firm's space. And just after quarter end, we signed a lease with Pottery Barn Kids to fill a space that had been vacant since we acquired the property. Combined, this activity has increased Millennia Crossing to 97% lease and improves the quality of the tenant roster and value of the assets. Further, our only shopping center with lease occupancy below 90% is now Carolina Pavilion at 83%. We are in active negotiations with tenants for all the remaining vacancy. We look forward to providing announcements of this leasing activity at this shopping center in the future. We're also making strong progress with the six out parcel opportunities we discussed on our last call. During the quarter, we signed a lease with Swig for a drive-through customized beverage store at Marketplace, a Seminole town center located in Orlando. And just after quarter end, we signed a lease with Cooper's Hawk at Ashley Park located in Atlanta Market. In addition, we have executed LOIs or inactive lease negotiations for the remaining four out parcels. We continue to expect these six out parcels to generate low double-digit unlevered yield on approximately $30 million of investments. We anticipate that this $30 million will primarily be deployed and begin contributing to earnings in 2027 with the full benefit expected to be recognized in 2028. We also look forward to providing additional announcements related to this initiative in the coming quarters. Reflecting our leasing progress at quarter end, our portfolio was 95.4% leased and our signed not open pipeline totaled 6.2 million of annual cash base rent representing approximately 5.5% of in-place annual cash-based rent. We believe this pipeline of new lease revenue will provide a meaningful earnings tailwind beginning as we move through 2026 and into 2027. Further, leasing activity completed over the prior year for which tenants have commenced paying rent is already beginning to benefit NOI. For the quarter, same property NOI for shopping centers increased 6.8%, compared to the comparable prior year period. Excluding the benefit of certain non-recurring items, same property NOI for shopping centers grew at a healthy 4.2%. Moving to investment activity. During the quarter, we announced an acquisition of Palms Crossing, a 399,000 square foot open-air center located in McAllen, Texas for $81.6 million. Palms Crossing is anchored by Best Buy Hobby Lobby Burlington Coat Factory, Barnes & Noble, and Nike is currently 98% leased and benefits from strong cross-border shopping. This property also provides opportunity to build up two additional out parcels beyond the six discussed earlier. With this acquisition, Texas is now our third largest state by ABR and combined contribution from Georgia, Florida, North Carolina, and Texas increased to 85% of total ABR. On the property recycling front, Madison Yards, located in Atlanta, is under contract with a nonrefundable deposit and we expect the sale to close in May. Madison Yards is 99% leased and the anticipated sale would enable us to extract value from a stabilized asset while also reducing our AMC theater exposure to only two locations, which are both high performing. The anticipated sale, along with Palms Crossing acquisition, would complete the recycling proceeds at a positive cap rate spread, contributing to future earnings growth. As we move forward, we're evaluating additional property sales, focusing on recycling capital from stabilized properties into assets at positive initial yield spread, with the potential for value-add opportunities and higher earnings growth in the future. Now, turning to our structured investments, During the quarter, we received full repayment of our 9.5%, $30 million preferred investment in Waters Creek Village. This repayment was expected and represents the only structured investment scheduled to mature in 2026. More notably, just after the quarter end, we completed a $75 million preferred equity investment in a Class A Premier Retail property located in the Southwest. This preferred investment yields 12% and has a term of two years. This activity increased our structured investment portfolio by $45 million to $158 million subsequent to quarter end, with a weighted average yield of 11.6%. In summary, 2026 is off to a great start, and we are in great position to sustain our growth in quarters ahead. Our portfolio continues to perform well and is supported by embedded growth drivers, including in-place below-market rents, our signed not-open pipeline, planned out parcel developments, and disciplined capital recycling. Collectively, we believe that these initiatives can support meaningful earnings growth for several years to come and contribute to our increased guidance for core FFO and AFFO per diluted share to new ranges that imply approximately 12% growth at the midpoints. And with that, I will now hand the call over to Phil.