SITE Centers Corp.

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. Please note this event is being recorded. And I'd like to turn the conference over to Steve Bakke, Senior Vice President of Capital Markets. Please go ahead.

Thank you, Operator. Good morning and welcome to Site Center's third quarter 2021 earnings conference call. Joining me today is Chief Executive Officer David Lukes and Chief Financial Officer Connor Finnerty. In addition to the press release distributed this morning, we have posted our quarterly financial supplement and slide presentation on our website at www.sightcenters.com, which is intended to support our prepared remarks during today's call. Please be aware that certain of our statements today may contain forward-looking statements within the meaning of the federal securities law. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from our forward-looking statements. Additional information may be found in our earnings press release and in our filings 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 quarterly financial supplement. At this time, it is my pleasure to introduce our Chief Executive Officer, David Lukes.

Thank you, Steve. Good morning, and thank you for joining our third quarter earnings call. We had another strong quarter really across the board. OSFO was ahead of plan. New leasing volume was at its highest in a number of years. We exceeded our 2021 investment goals with the closing of Hammond Springs, and subsequent to quarter end, RBI distributed $190 million to site centers. Thank you to the entire site centers team for working so hard to achieve these accomplishments. which position our company for sustainable growth going forward. I'll start this morning discussing third quarter results, talk briefly about leasing, and then discuss our investments and capital as we look to grow our portfolio of assets in wealthy suburban communities. As I mentioned, third quarter OFFO was ahead of our budget on higher than expected NOI and lower G&A expense. We collected 99% of our build rent for the quarter. Looking back to 2020, we've now collected 96% of 2020 base rent, including $21 million of deferral repayments. Our tenant assistance program, which effectively ended in 2020, has now collected 98% of the deferred rent due, which is really a testament to the durability of our portfolio cash flow, the credit strength of our tenant base, and the quality of our team and our real estate. Moving to leasing, we had a truly outstanding quarter with over 1 million square feet leased, including 237,000 square feet of new leasing, which is our highest in two years, despite having a considerably smaller portfolio. We signed six anchors this past quarter, bringing our year-to-date anchors to 19. These 19 anchors signed year-to-date have a number of interesting characteristics that are indicative of the operational strength we're seeing. First off, 15 of the 19 anchors were signed with publicly traded companies, highlighting the credit quality of our primarily national portfolio. Second, 30% of the square footage is from new concepts that are sponsored by investment-grade parent companies and were launched in the last 18 months. We have 13 more anchors in lease negotiation, which we expect to be completed by the first quarter of next year, with similar characteristics to the deals signed to date. We expect this activity to be a material driver of our growth over the next several years, particularly since new anchors at a property usually drive shop demand in response. We've already seen some of this demand result in positive rental growth and an acceleration in executed shop leases, including over 50 new shop deals in this quarter alone with a number of exciting and well-capitalized new concepts. Shifting to investments, In September, we acquired Hammond Springs in Atlanta for $31 million, which pushes our year-to-date acquisitions to $80 million, ahead of our $75 million goal for 2021. Atlanta is our largest market, and we're very excited about the growth outlook for the city and for this property in particular, with average household incomes in excess of $130,000 and incredible visibility in a high-traffic corridor. Similar to Delray and Charlottesville acquisitions, convenience is the anchor at this site as it does not have a traditional large format tenant. While box demand has been very strong, the advancements in geolocation data mean that we don't have to rely on the anchor as the assumed private driver of traffic. This opens a compelling subsector in open air shopping center and has been the bulk of our acquisitions year to date. That said, going forward, I'd expect us to be active in both anchored and unanchored assets that fit our growth and submarket criteria. Our investment thesis is based on three clear facts that have emerged in the last year and a half. One, there is now more money in wealthy suburbs. Two, there are more frequent customer visits due to a more flexible work-from-home culture. And three, an increasing value and convenience from both tenants and customers alike. These facts are producing occupancy gains, but also rent growth. At a time when buying vacancy is becoming increasingly challenging, given the strength of operating fundamentals, we are heavily focused on finding the right properties in the right submarkets where rent growth is happening, and we have an opportunity to re-tenant existing square footage with stronger credit tenants at higher rents. The foundation of our investments is our balance sheet and our access to capital. As was announced a few weeks ago, RBI declared and paid a distribution on CITE's preferred investment in early October. In this distribution, CITE Centers received $190 million and does not expect to receive any additional distributions from RBI in the future on the account of its preferred investment. The payment, along with recently announced RBI asset sales and a common dividend declaration, leaves RBI with just three remaining properties and a clear path towards a conclusion. It also returns almost $700 million of capital to preferred and common stakeholders, which was part of the original thesis and the business plan for the formation of RBI. All of us at Site Centers are incredibly proud of the thought and work that went into this innovative spin, and we are excited about future investment prospects for the return capital we've received.