Strategic Performance and Portfolio Optimization
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Performance was driven by robust leasing activity and strong same-store NOI growth, supported by a 14% average cash rent increase on comparable leases.
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The acquisition of Palms Crossing in McAllen, Texas for $81.6 million expands the company’s footprint in high-growth Southwest corridors, benefiting from cross-border shopping dynamics.
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Management is actively recycling capital from stabilized assets, such as the pending sale of Madison Yards, to reduce exposure to AMC Theatres and reinvest in higher-yielding opportunities.
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The Signed-Not-Open (SNO) pipeline reached $6.2 million in annual cash base rent, representing 5.5% of in-place rent and serving as a primary earnings tailwind for 2026 and 2027.
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Operational focus on outparcel development is expected to generate low double-digit unlevered yields on approximately $30 million of investment.
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Portfolio quality improved through proactive asset management, specifically at Winter Park Crossing, where high-profile tenants like Williams Sonoma and Pottery Barn Kids filled long-standing vacancies.
Growth Outlook and Strategic Assumptions
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Full-year 2026 guidance was raised to imply approximately 12% growth at the midpoint for both core FFO and AFFO per diluted share.
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The company expects to deploy $175 million to $250 million in total investments, including both property acquisitions and structured investments.
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Management anticipates the $30 million outparcel investment will primarily contribute to earnings starting in 2027, with full benefits realized in 2028.
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Guidance assumes same-property NOI growth for shopping centers between 3.5% and 4.5%, factoring in the commencement of rent from the SNO pipeline.
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The SNO pipeline is expected to be Q3 and Q4 weighted for the remainder of 2026, with nearly all current leases contributing fully by early 2027.
Significant Financial and Operational Factors
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A $75 million preferred equity investment in a Southwest retail property yields 12% and was funded partly by the $30 million repayment of the Watters Creek investment.
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First quarter results included approximately $0.01 per share in non-recurring recovery benefits from final 2025 CAM, real estate taxes, and insurance billings.
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The Albuquerque property vacancy of 98,000 square feet is fully leased to the State of New Mexico, with rent commencement expected in late 2026.
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The pending sale of Madison Yards is under contract with a non-refundable deposit and is expected to close at a cap rate slightly higher than 6% due to theatre exposure.
Q&A Session Highlights
Strategic rationale and funding for the $75 million preferred investment
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