Curbline Properties Corp. (NYSE: CURB) (the "Company" or
"Curbline"), an owner of convenience centers in suburban, high
household income communities, announced today operating results for
the quarter ended December 31, 2024.
“Curbline Properties had a very strong start on all fronts in
its inaugural quarter as an independent publicly traded company as
we look to scale the first public real estate company focused
exclusively on convenience properties located on the curbline in
the wealthiest submarkets in the United States,” commented David R.
Lukes, President and Chief Executive Officer. “The Company is
uniquely positioned in the public real estate sector with a
differentiated investment focus and a net cash position at year
end. In the fourth quarter, Curbline closed on the acquisition of
20 convenience shopping centers for $206.1 million along with a
$500 million credit facility providing additional liquidity and
investment capacity. Lastly, demand and interest for available
space remains elevated highlighting the depth of leasing prospects
for the Company’s largely homogenous unit sizes.”
Results for the Fourth Quarter
- On October 1, 2024, Curbline completed the previously announced
spin-off from SITE Centers Corp. (“SITE Centers”) pursuant to which
SITE Centers contributed 79 convenience properties to the Company.
SITE Centers shareholders received two shares of Curbline common
stock for every one common share of SITE Centers held at the close
of business on the record date of September 23, 2024. The timing of
the spin-off may impact comparability between the fourth quarter
and prior periods, as the results prior to the spin-off do not
represent the historical results of a legal entity, but rather a
combination of entities under common control that have been
“carved-out” of SITE Centers’ consolidated financial statements and
presented on a combined basis.
- Fourth quarter net income attributable to Curbline was $11.5
million, or $0.11 per diluted share, as compared to net income of
$7.6 million, or $0.07 per diluted share, in the year-ago period.
The increase year-over-year primarily was due to an increase in net
operating income from acquisitions and an increase in interest
income, partially offset by an increase in general and
administrative expenses.
- Fourth quarter operating funds from operations attributable to
Curbline (“Operating FFO” or “OFFO”) was $23.8 million, or $0.23
per diluted share, compared to $17.9 million, or $0.17 per diluted
share, in the year-ago period. The increase year-over-year
primarily was due to an increase in net operating income from
acquisitions and an increase in interest income, partially offset
by an increase in general and administrative expenses.
Significant Fourth Quarter Activity and Recent
Activity
- Acquired 20 convenience shopping centers during the fourth
quarter for an aggregate price of $206.1 million.
- In October 2024, the Company closed on a $500 million credit
facility which includes a revolving credit facility in the amount
of $400.0 million and an unsecured, delayed draw term loan facility
in the amount of $100.0 million. As of December 31, 2024, there was
no balance on the revolving credit facility and the term loan was
undrawn.
- In October 2024, the Company entered into a forward interest
rate swap agreement to fix the variable-rate component of the
Company's $100.0 million Term Loan Facility. The all-in rate of the
Term Loan Facility will be fixed at 5.078% based on the loan’s
current applicable spread.
- Acquired two convenience shopping centers during the first
quarter to date for an aggregate price of $7.7 million.
Key Quarterly and Annual Operating Results
- Reported an increase of 5.8% in same-property net operating
income (“SPNOI”) for the year ended December 31, 2024 compared to
December 31, 2023.
- Generated cash new leasing spreads of 30.5% and cash renewal
leasing spreads of 10.3% for the year ended December 31, 2024 and
cash new leasing spreads of 15.0% and cash renewal leasing spreads
of 9.5%, for the fourth quarter of 2024.
- Generated straight-lined new leasing spreads of 54.0% and
straight-lined renewal leasing spreads of 21.2% for the year ended
December 31, 2024 and straight-lined new leasing spreads of 36.9%
and straight-lined renewal leasing spreads of 16.9% for the fourth
quarter of 2024.
- Reported a leased rate of 95.5% at December 31, 2024 compared
to 95.4% at September 30, 2024 and 96.7% at December 31, 2023. The
year-over-year decline was primarily related to the impact of
acquisitions.
- As of December 31, 2024, the Signed Not Opened (“SNO”) spread
was 160 basis points, representing $4.6 million of annualized base
rent.
2025 Guidance
The Company estimates net income attributable to Curbline for
2025 to be from $0.48 to $0.56 per diluted share and Operating FFO
to be from $0.97 to $1.01 per diluted share. The Company does not
include a projection of gains or losses on asset sales, transaction
costs or debt extinguishment costs in guidance.
Reconciliation of Net Income Attributable to Curbline to FFO and
Operating FFO estimates:
FY 2025E
Per Share — Diluted
Net income attributable to
Curbline
$0.48 — $0.56
Depreciation and amortization of
real estate
0.49 — 0.45
FFO (NAREIT) and Operating FFO
$0.97 — $1.01
About Curbline Properties
Curbline Properties is an owner and manager of convenience
shopping centers positioned on the curbline of well-trafficked
intersections and major vehicular corridors in suburban, high
household income communities. The Company is publicly traded under
the ticker symbol “CURB” on the NYSE and plans to elect to be
treated as a REIT for U.S. federal income tax purposes. Additional
information about the Company is available at curbline.com. To be
included in the Company’s e-mail distributions for press releases
and other investor news, please click here.
Conference Call and Supplemental Information
The Company will hold its quarterly conference call today at
8:00 a.m. Eastern Time. To participate with access to the slide
presentation, please visit the Investor Relations portion of
Curbline's website, curbline.com, or for audio only, dial
800-715-9871(U.S.) or 646-307-1963 (international) using pass code
6823859 at least ten minutes prior to the scheduled start of the
call. The call will also be webcast and available in a listen-only
mode on Curbline's website at curbline.com. If you are unable to
participate during the live call, a replay of the conference call
will also be available at curbline.com for further review. You may
also access the telephone replay by dialing 800-770-2030 or
609-800-9909 (international) using passcode 6823859 through
February 18, 2025. Copies of the Company’s supplemental package and
earnings slide presentation are available on the Company’s
website.
Non-GAAP Measures and Other Operational Metrics
Funds from Operations (“FFO”) is a supplemental non-GAAP
financial measure used as a standard in the real estate industry
and is a widely accepted measure of real estate investment trust
(“REIT”) performance. The Company believes that both FFO and
Operating FFO provide additional indicators of the financial
performance of a REIT, more appropriately measure the core
operations of the Company, and provide benchmarks to its peer
group.
FFO is generally defined and calculated by the Company as net
income attributable to Curbline (computed in accordance with
Generally Accepted Accounting Principles in the United States
(“GAAP”)), adjusted to exclude (i) gains and losses from
disposition of real estate property, which are presented net of
taxes, (ii) impairment charges on real estate property, (iii) gains
and losses from changes in control and (iv) certain non-cash items.
These non-cash items principally include real property depreciation
and amortization of intangibles and income (loss) from
non-controlling interests. The Company’s calculation of FFO is
consistent with the definition of FFO provided by NAREIT. The
Company calculates Operating FFO as FFO excluding certain
non-operating charges, income and gains/losses. Operating FFO is
useful to investors as the Company removes non-comparable charges,
income and gains/losses to analyze the results of its operations
and assess performance of the core operating real estate portfolio.
Other real estate companies may calculate FFO and Operating FFO in
a different manner.
The Company also uses NOI, a non-GAAP financial measure, as a
supplemental performance measure. NOI is calculated as property
revenues less property-related expenses. The Company believes NOI
provides useful information to investors regarding the Company’s
financial condition and results of operations because it reflects
only those income and expense items that are incurred at the
property level and, when compared across periods, reflects the
impact on operations from trends in occupancy rates, rental rates,
operating costs and acquisition and disposition activity on an
unleveraged basis.
The Company presents NOI information herein on a same-property
basis or “SPNOI.” The Company defines SPNOI as property revenues
less property-related expenses, which exclude straight-line rental
income and reimbursements and expenses, lease termination income,
management fee expense, and fair market value of leases. SPNOI only
includes assets owned for the entirety of both comparable periods.
SPNOI excludes all non-property and corporate level revenue and
expenses. Other real estate companies may calculate NOI and SPNOI
in a different manner. The Company believes SPNOI provides
investors with additional information regarding the operating
performances of comparable assets because it excludes certain
non-cash and non-comparable items as noted above.
FFO, Operating FFO, NOI and SPNOI do not represent cash
generated from operating activities in accordance with GAAP, are
not necessarily indicative of cash available to fund cash needs and
should not be considered as alternatives to net income computed in
accordance with GAAP, as indicators of the Company’s operating
performance or as alternatives to cash flow as a measure of
liquidity. Reconciliations of these non-GAAP measures to their most
directly comparable GAAP measures have been provided herein.
The Company calculates Cash Leasing Spreads by comparing the
prior tenant's annual base rent in the final year of the prior
lease to the executed tenant's annual base rent in the first year
of the executed lease. Straight-Lined Leasing Spreads are
calculated by comparing the prior tenant's average base rent over
the prior lease term to the executed tenant's average base rent
over the term of the executed lease. For both Cash and
Straight-Lined Leasing Spreads, the reported calculation excludes
first generation units and spaces vacant at the time of acquisition
and includes all leases for spaces vacant greater than twelve
months along with split and combination deals.
Safe Harbor
Curbline Properties Corp. considers portions of the information
in this press release to be forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, both as amended, with
respect to the Company's expectation for future periods. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that its expectations will be achieved.
For this purpose, any statements contained herein that are not
historical fact, including statements regarding the Company's
projected operational and financial performance, strategy,
prospects and plans, may be deemed to be forward-looking
statements. There are a number of important factors that could
cause our results to differ materially from those indicated by such
forward-looking statements, including, among other factors, (1)
changes in general economic conditions, including inflation and
interest rate volatility; (2) changes in local conditions such as
an increase or decrease in the supply of, or demand for, retail
real estate space in our geographic markets; (3) the impact of
changes in consumer practices, retailing practices and the space
needs of tenants; (4) dependence on the successful operations and
financial condition of tenants, the loss of which, including as a
result of downsizing or bankruptcy, could negatively impact rental
income from our properties; (5) our ability to enter into new
leases, and renew existing leases, on favorable terms; (6) our
ability to identify, acquire, construct or develop additional
properties that produce a desired yield on invested capital; (7)
potential environmental liabilities; (8) our ability to secure debt
and equity financing on commercially acceptable terms or at all;
(9) the illiquidity of real estate investments which could limit
our ability to make changes to our portfolio to respond to economic
or other conditions; (10) property damage, expenses related thereto
and other business and economic consequences (including the
potential loss of rental revenues) resulting from extreme weather
conditions or natural disasters in locations where we own
properties, and the ability to estimate accurately the amounts
thereof; (11) sufficiency and timing of any insurance recovery
payments related to damages from extreme weather conditions or
natural disasters; (12) any change in strategy; (13) the impact of
pandemics and other public health crises; (14) unauthorized access,
use, theft or destruction of financial, operations or third-party
data maintained in our information systems or by third parties on
our behalf; (15) our ability to qualify as a REIT and to maintain
REIT status once elected; and (16) the finalization of the
financial statements for the period ended December 31, 2024. For
additional factors that could cause the results of the Company to
differ materially from those indicated in the forward-looking
statements, please refer to the Company's Registration Statement on
Form 10 and any subsequent reports that we file with the Securities
and Exchange Commission. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events
or circumstances that arise after the date hereof.
Curbline Properties
Corp.
Income Statement
in thousands, except per share
4Q24
4Q23
12M24
12M23
Revenues:
Rental income (1)
$34,642
$25,307
$120,028
$93,004
Other property revenues
282
163
853
656
34,924
25,470
120,881
93,660
Expenses:
Operating and maintenance
4,628
3,113
14,159
10,653
Real estate taxes
4,137
2,443
13,444
11,261
8,765
5,556
27,603
21,914
Net operating income
26,159
19,914
93,278
71,746
Other income (expense):
Interest expense
(485)
(354)
(901)
(1,520)
Interest income
7,810
0
7,810
0
Depreciation and amortization
(12,192)
(8,810)
(41,911)
(31,993)
General and administrative (2)
(10,134)
(1,801)
(17,439)
(5,215)
Other income (expense), net (3)
318
(1,323)
(30,560)
(2,376)
Gain on disposition of real estate
0
0
0
371
Income before taxes
11,476
7,626
10,277
31,013
Tax expense
(4)
0
(4)
0
Net income
11,472
7,626
10,273
31,013
Non-controlling interests
(11)
0
(11)
0
Net income attributable to
Curbline
11,461
7,626
10,262
31,013
Weighted average shares – Basic –
EPS
104,860
104,860
104,860
104,860
Assumed conversion of diluted
securities
355
0
355
0
Weighted average shares – Diluted –
EPS
105,215
104,860
105,215
104,860
Earnings per share of common stock –
Basic
$0.11
$0.07
$0.10
$0.30
Earnings per share of common stock –
Diluted
$0.11
$0.07
$0.09
$0.30
Note: Amounts prior to October 1,
2024 have been carved out of SITE Centers' consolidated financial
statements which may impact the comparability between the fourth
quarter and prior periods.
(1)
Rental income:
Minimum rents
$21,189
$15,591
$72,804
$57,498
Ground lease minimum rents
2,858
2,541
10,819
9,918
Straight-line rent, net
753
361
1,979
1,553
Amortization of (above)/below-market rent,
net
700
443
2,710
1,505
Percentage and overage rent
424
407
854
880
Recoveries
8,132
5,838
26,539
21,602
Uncollectible revenue
33
(13)
(479)
(407)
Ancillary and other rental income
234
139
635
412
Lease termination fees
319
0
4,167
43
(2)
SITE SSA gross up
($499)
0
($499)
0
(3)
Other income (expense), net:
Transaction costs
($181)
($1,297)
($30,849)
($2,334)
Debt extinguishment costs
0
(26)
(182)
(26)
SITE SSA gross up
499
0
499
0
Other
0
0
(28)
(16)
Curbline Properties
Corp.
Reconciliation: Net Income to FFO
and Operating FFO
and Other Financial
Information
in thousands, except per share
4Q24
4Q23
12M24
12M23
Net income attributable to
Curbline
$11,461
$7,626
$10,262
$31,013
Depreciation and amortization of real
estate
12,192
8,810
41,911
31,993
Income from non-controlling interest
(11)
0
(11)
0
Gain on disposition of real estate,
net
0
0
0
(371)
FFO attributable to Curbline
$23,642
$16,436
$52,162
$62,635
Transaction, debt extinguishment and
other
181
1,443
31,335
2,864
Total non-operating items, net
181
1,443
31,335
2,864
Operating FFO attributable to
Curbline
$23,823
$17,879
$83,497
$65,499
Weighted average shares & units –
Basic: FFO & OFFO
104,860
104,860
104,860
104,860
Assumed conversion of dilutive
securities
355
0
355
0
Weighted average shares & units –
Diluted: FFO & OFFO
105,215
104,860
105,215
104,860
FFO per share – Basic
$0.23
$0.16
$0.50
$0.60
FFO per share – Diluted
$0.22
$0.16
$0.50
$0.60
Operating FFO per share – Basic
$0.23
$0.17
$0.80
$0.62
Operating FFO per share –
Diluted
$0.23
$0.17
$0.79
$0.62
Capital expenditures:
Maintenance capital expenditures
238
Tenant allowances and landlord work,
net
944
Leasing commissions, net
254
Certain non-cash items:
Straight-line rent
753
Amortization of below-market rent/(above),
net
700
Amortization of below-market ground lease
(lessee)
(17)
Loan cost amortization
(253)
Stock compensation expense
(3,825)
Curbline Properties
Corp.
Balance Sheet
$ in thousands
At Period End
4Q24
4Q23
Assets:
Land
$490,563
$316,212
Buildings
841,912
622,414
Fixtures and tenant improvements
80,636
58,676
1,413,111
997,302
Depreciation
(165,350)
(136,168)
1,247,761
861,134
Construction in progress and land
14,456
13,504
Real estate, net
1,262,217
874,638
Cash
626,409
566
Restricted cash
0
155
Receivables and straight-line rents
(1)
15,887
11,528
Amounts receivable from SITE Centers
33,762
0
Intangible assets, net (2)
82,670
34,330
Other assets, net
12,153
415
Total Assets
2,033,098
921,632
Liabilities and Equity:
Revolving credit facilities
0
0
Secured debt
0
25,758
0
25,758
Dividends payable
26,674
0
Other liabilities (3)
63,867
33,236
Total Liabilities
90,541
58,994
Common stock
1,050
0
Paid-in capital
1,954,548
0
Distributions in excess of net income
(15,021)
0
Net parent investment
0
862,638
Accumulated comprehensive income
1,207
0
Non-controlling interest
773
0
Total Equity
1,942,557
862,638
Total Liabilities and Equity
$2,033,098
$921,632
(1)
Straight-line rents (including fixed CAM),
net
$9,949
$8,044
(2)
Below-market leases (as lessee)
14,858
0
(3)
Below-market leases, net
40,149
21,243
Curbline Properties
Corp.
Reconciliation of Net Income
Attributable to Curbline to Same-Property NOI
$ in thousands
4Q24
4Q23
12M24
12M23
GAAP
Reconciliation:
Net income attributable to
Curbline
$11,461
$7,626
$10,262
$31,013
Interest expense
485
354
901
1,520
Interest income
(7,810)
0
(7,810)
0
Depreciation and amortization
12,192
8,810
41,911
31,993
General and administrative
10,134
1,801
17,439
5,215
Other expense (income), net
(318)
1,323
30,560
2,376
Gain on disposition of real estate
0
0
0
(371)
Tax expense
4
0
4
0
Non-controlling interests
11
0
11
0
Total Curbline NOI
26,159
19,914
93,278
71,746
Less: Non-Same Property NOI
(8,575)
(2,845)
(24,845)
(7,040)
Total Same-Property NOI
$17,584
$17,069
$68,433
$64,706
Total Curbline NOI % Change
31.4%
30.0%
Same-Property NOI % Change
3.0%
5.8%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250211202027/en/
For additional information:
Conor Fennerty, EVP and Chief Financial Officer (216)
755-6200
Curbline Properties (NYSE:CURB)
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