SITE Centers Corp.

Good day and welcome to the Site Center's third quarter 2020 operating results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-turned phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Brandon Day of Investor Relations. Please go ahead.

Good morning, and thank you for joining us. On today's call, you will hear from Chief Executive Officer David Lukes and Chief Financial Officer Connor Finnerty. Please be aware that certain of our statements today may constitute forward-looking statements within the meaning of the federal security laws. These forward-looking statements are subject to risk and uncertainty, and actual results may differ maturely from our forward-looking statements. Additional information about these risks and uncertainties may be found in our earnings press release issued this morning and in the documents that we file with the SEC, including our most recent reports on Form 10-K and 10-Q. In addition, we will be discussing non-GAAP financial measures on today's call, including FFO, operating FFO, and same-store net operating income. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in today's press release. This release or quarterly financial supplement and accompanying slides may be found on the investor relations section of our website at sitecenters.com. At this time, it is my pleasure to introduce our Chief Executive Officer, David Lukes.

Good morning. Thank you for joining our third quarter earnings call. Our results this quarter reflect continued progress in terms of tenant reopenings and collections, which is a function of the hard work from all of my colleagues at site centers. There's been no shortage of personal and professional headwinds that we faced this year. And despite that, we've accomplished a great deal. So thank you to everyone at site centers for the hard work and the hours and the contributions to date. I'll start today with a summary of the events during the quarter, then give some thoughts on tenant activity and some trends that are building throughout our portfolio of well-located suburban properties. Consistent with the last two quarters, 100% of our properties remain open and operating as we continue to provide access and the necessary support to our tenants. Over the course of the quarter, tenants made more progress reopening in accordance with state and local guidelines and as of this past Friday, 98% of our tenants are open, which is up about 6% from three months ago. Turning to collections, as we've mentioned on prior calls, we believed the trajectory of our collections would generally track our open rate, which in fact has turned out to be the case. Collections continued to tick higher and unpaid rents continued to move lower. As of Friday, we've collected 84% of third quarter and 90% of October rents. We're also continuing to make progress on previous rent due and we've now collected 70% of the second quarter rent, which is up from 64% at the time of our second quarter call. Unresolved monthly rent is now less than 8% and I would expect that we would resolve the majority of these balances through a combination of deferrals and payments by year end. That said, we continue to take a methodical approach to resolving any unpaid rent and we're extremely pleased with the agreements executed to date. Specifically, we've reached agreements with tenants to defer 16% of second quarter rent and 8% of third quarter rent. As you recall, our strategy has been to provide deferrals, where appropriate, of some or all rent for a few months in return for true financial benefit to our company, such as options exercised Conner will provide additional detail on the dollars and the timing of our deferral program, but it's largely concentrated with our top tenants that make up the lion's share of our tenant roster. We believe that these deferrals, which are essentially short-term loans, are well positioned for repayment since our large national tenants have demonstrated significant access to capital. In fact, over the past seven months, 23 of our top 50 tenants have raised over $50 billion in debt and equity. This access to capital as well as improving operations for many of our national tenants has begun to impact overall leasing activity and we're starting to see signs of a pickup in tenant interest and overall leasing demand. In fact, our total leasing volume this quarter is higher than leasing activity was in the same quarter a year ago, with total leasing of 803,000 square feet, up 4% versus the third quarter of last year. We signed three anchor leases in the third quarter with spreads on total new leases up 18% for the trailing 12-month period. Subsequent to the quarter end, we signed an additional two anchors and a few others in the final stages. Whether it's sporting goods, discounters, quick service restaurants, drive-through bank branches, warehouse clubs, or grocery stores, our national tenants see an opportunity to take market share in the future as a result of a change in distribution channels happening today. Our portfolio offers access to high-income suburban communities with strong co-tenancy, convenient access for parking or curbside pickup, and much lower operating costs than malls or street retail. As we look into the next year or so, we are assuming a continued shift of our tenant base to include those tenants that are proving successful in the last mile of wealthy suburbs. Total base rent from our inventory of signed but not open tenants as of quarter end totals just under $11 million, which is roughly 3% of annualized third quarter base rent. These leases, along with the deals signed subsequent to quarter end, will help drive future cash flow growth. We are now eight months into a pandemic that has accelerated many trends in retail. We continue to see some tenants struggle to adjust and close stores or file bankruptcy, and we're realistic that growth will not be linear given the increase in these closures that have been announced today and future fallout that will occur as a result of the pandemic. On the other hand, as we witnessed this quarter, current leasing remains as strong as last year, and retailers clearly value our open-air format and they want to be in the communities where we own properties. And we feel confident that we've not only selected the right real estate but that we're making prudent capital allocation decisions to fund those leases that will inevitably strengthen our properties and future cash flow. Moving to the dividend, as previously announced, the Board suspended the second and the third quarter dividends. The Board continues to monitor our dividend policy and it's possible that the Board will need to declare a dividend during the fourth quarter to satisfy 2020 taxable net income requirements. If declared, the dividend would be paid in the first quarter of 2021 and we will provide additional details by year end. Lastly, before turning the call over to Connor, I wanted to address the decision to eliminate the Chief Operating Officer position which we disclosed in early September. We have a very strong roster of leaders at our company who have proven to work well as a team and make the right operational decisions for our properties. Given our size and the quality and the tenure of our executive team, we've chosen to structure the company without a COO position. This decision has given me much more direct visibility into operations and a chance to spend more time on property business plans with my colleagues. I'd like to thank Mike Mackinnon for his tireless efforts at the company. He's been a great friend and did a fabulous job setting up our operations for continued success. And with that, I'll turn it over to Connor.