SITE Centers Corp.

Good day, and welcome to the Site Center's Reports, Third Quarter 2022 Operating Results. 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. Please note, this event is being recorded. I would now like to turn the conference over to Monica Kukrasia, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to Site Center's third quarter 2022 earnings conference call. Joining me today is Chief Executive Officer David Lukes and Chief Financial Officer Connor Fenerday. In addition to the press release distributed this morning, we have posted our quarterly financial supplement and slide presentation on our website at www.sitecenters.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 laws. 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, Monica. Good morning, and thank you for joining our third quarter earnings call. We had another very productive quarter with results ahead of budget, significant leasing volume despite having less available space, a number of asset sales with proceeds used to continue to invest in our convenience thesis, and a balance sheet that remains in great shape with debt to EBITDA in the low fives, which remains well ahead of the peer group and the sector overall. Leasing demand continued to be very strong with national tenants looking to expand their footprints in the wealthiest suburban markets where we operate and existing tenants looking to lock in their locations with renewals. This activity, along with execution from our leasing team, resulted in a 60 basis point sequential increase of our portfolio lease rate to 95 percent, which is consistent with our commentary and goals for the year. I'll start my comments for the quarter shift to leasing, then move to transaction activity. As I mentioned, third quarter OFFO was ahead of budget primarily on better operations, which Connor will provide more details on later. Despite no shortage of headwinds, our tenant coordination and construction teams continue to do an amazing job working with tenants to get open ahead of schedule, which drove part of our outperformance this quarter. Moving to leasing, as noted, demand and activity remained very high in the third quarter with 1.5 million square feet leased, which is the largest amount of total square footage this company has leased in five years, despite a materially smaller footprint. In terms of new leasing, we had another quarter of over 200,000 square feet of new deals with strength from national shops as a standout. Our shop leased rate was up 180 basis points sequentially and 520 basis points from the third quarter last year. Quite a bit of this leasing was in our tactical redevelopment pipeline, with deals from Kava, Starbucks, Sweetgreen, VisionWorks, Drybar, Club Champion, and a few other first-to-portfolio deals expected to be signed in the coming months. The projects broken out on our tactical development pipeline that are under construction are now 84% leased with deliveries beginning this year into 2024 with immediate expected accretion. Looking forward, we have another 250,000 square feet at share in lease negotiations, which we expect to be completed over the next two quarters with activity from a mix of national publicly traded credit tenants. Based on the trending strength of small shop leasing and considering our current pipeline of unexecuted lease negotiations, We believe that the lease rate on our portfolio will continue to climb marginally through the end of the year, absent bankruptcies. That said, the absolute level of activity will moderate as we simply have less space to lease. Shifting to transaction activity, we had another quarter recycling capital highlighted by the sale of the previously announced Madison Pool A portfolio for $388 million. Net proceeds were used to pay down debt and reinvest in convenience assets in Atlanta and Phoenix. We also opportunistically sold one wholly owned property in Columbus at a cap rate in the 6% range and used the proceeds to pay down debt and to repurchase stock at a double digit FFO yield and a mid 8% implied cap rate. The largest investment this quarter was the acquisition of a four property portfolio for $23 million in Phoenix, Arizona, which is a top 10 market for the company and a market we've transacted in a number of times in the last year. The properties are 100% leased to a mix of service and quick service restaurants with 76% of the tenancy national credit and a drive-through unit at all four properties. We underwrote a five-year NOI CAGR of 3% plus with minimal CapEx, which is consistent with our existing convenience portfolio and one of the key attributes of our thesis. Moving to Atlanta, we bought another convenience asset in our largest market and remain excited about the potential for more opportunities to grow our portfolio in this key MSA given our presence on the ground. The property is located just a few miles west of Hammond Springs, which was another convenience asset we acquired in 2021. Going forward, we remain encouraged by the unique opportunities in the convenience subsector that are a direct result of local relationships formed over the past several years. Future acquisitions would allow us to continue to grow our portfolio of properties with strong credit and low recurring capex located at high traffic intersections within wealthy suburban communities. Because the cash flow growth profile and risk-adjusted IRRs of this property type are elevated with rents accelerating with inflation, we will continue, as we have in prior years, to utilize retained cash flow and proceeds from recycling fully stabilized assets into this sub-asset class when the right opportunities arise. The decision, as always, will be measured against other capital allocation options that we have at the time and consistent with our goal to generate sustainable OFFO and AFFO growth. In summary, we're pleased with our portfolio and the current strength of operations, our investments, which have increased our long-term growth profile, and future investment prospects, which we believe will create stakeholder value while prudently managing our balance sheet. Thank you to the entire site center's team for another very productive quarter. And with that, I'll turn it over to Connor. Thanks, David.