Certain statements in this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (this "Quarterly Report"), other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These statements include statements about InvenTrust Properties Corp.'s (the "Company", "InvenTrust", "we", "our", or "us") plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events; and involve known and unknown risks that are difficult to predict.
As a result, our actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," and "should" and variations of these terms and similar expressions, or the negatives of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while we consider reasonable based on our knowledge and understanding of the business and industry, are inherently uncertain. These statements are expressed in good faith and are not guarantees of future performance or results. Our actual results could differ materially from those expressed in the forward-looking statements and readers should not rely on forward-looking statements in making investment decisions.
There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties, and factors set forth in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report"), and as updated in this Quarterly Report and other quarterly and current reports, which are on file with the SEC and are available at the SEC's website (www.sec.gov).
Our operations are subject to a number of risks and uncertainties including, but not limited to:
•our ability to collect rent from tenants or to rent space on favorable terms or at all;
•declaration of bankruptcy by our retail tenants;
•the economic success and viability of our anchor retail tenants;
•our ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any retail properties acquired in the future and manage the risks associated with such retail properties;
•our ability to manage the risks of expanding, developing or redeveloping our retail properties;
•loss of members of our senior management team or other key personnel;
•changes in the competitive environment in the leasing market and any other market in which we operate;
•shifts in consumer retail shopping from brick-and-mortar stores to e-commerce;
•the impact of leasing and capital expenditures to improve our retail properties to retain and attract tenants;
•our ability to refinance or repay maturing debt or to obtain new or additional financing on attractive terms;
•the impact on our business and financial condition of incurring additional debt or issuing new debt or equity securities in the future;
•future increases in interest rates;
•rising inflation;
•the effects of uncertain and evolving tariff activity and changes in global trade policies on the overall state of the economy and on our business, including the impact on our tenants' business, operations and ability to pay rent;
•natural or man-made disasters, severe weather and climate-related events, such as hurricanes, wildfires, earthquakes, tsunamis, tornadoes, droughts, blizzards, severe freezes and winter storms, hailstorms, floods, mudslides, oil spills, nuclear incidents, and outbreaks of pandemics or contagious diseases, or fear of such outbreaks;
•our status as a real estate investment trust ("REIT") for federal tax purposes; and
•changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs.
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These factors are not necessarily all of the important factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our business, financial condition, results of operations, cash flows and overall value.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements are only as of the date they are made; we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information, future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included in this Quarterly Report. All square feet and dollar amounts are stated in thousands, except per share amounts and per square foot metrics, unless otherwise noted.
Overview
Strategy and Outlook
InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a grocery component. We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, and maintaining a flexible capital structure.
InvenTrust focuses on Sun Belt markets with favorable demographics, including above-average growth in population, employment, income, and education levels. We believe these conditions create favorable demand characteristics for grocery-anchored and necessity-based retail centers, which will position us to capitalize on potential future rent increases while enjoying sustained occupancy at our centers. Our strategically located field offices support hands-on property oversight, enabling responsive tenant engagement and strong local market knowledge across our portfolio. We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct differentiator for us in the marketplace.
Macroeconomic Trends
Our business, and the business and operations of our tenants, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and the potential for a recession. Although certain indicators suggest that inflation has moderated, the economic outlook remains uncertain due to ongoing geopolitical tensions, evolving global trade policies and tariff actions, and continued supply chain disruptions. These factors, along with volatility in energy prices and interest rates, may contribute to broader economic uncertainty and could adversely impact our tenants' operations. Additionally, other challenging macroeconomic conditions, and the resulting impact on the economy and consumer spending, could negatively impact our business and that of our tenants.
Evaluation of Operating Performance and Financial Condition
In addition to measures of operating performance determined in accordance with U.S. generally accepted accounting principles ("GAAP"), management evaluates our operating performance and financial condition by focusing on the following non-GAAP financial measures and operating metrics, discussed in further detail herein:
Non-GAAP Financial Measures Operating Metrics
•Net Operating Income ("NOI") and Same Property NOI•Nareit Funds From Operations ("Nareit FFO") Applicable to Common Shares and Dilutive Securities•Core Funds From Operations ("Core FFO") Applicable to Common Shares and Dilutive Securities•Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA")•Adjusted EBITDA •Economic and leased occupancy and rental rates•Leasing activity and lease rollover•Operating expense levels and trends•General and administrative expense levels and trends•Debt maturities and leverage ratios•Liquidity levels.
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Recent Developments
Acquisitions
On May 8, 2026, the Company acquired 3609 South, a 29,000 square foot unanchored neighborhood center in Charlotte, North Carolina, for a gross acquisition price of $16.6 million. The Company used available liquidity to fund the acquisition.
On June 17, 2026, the Company acquired Sweetgrass Corner, a 95,000 square foot community center anchored by Trader Joe’s in Charleston, South Carolina, for a gross acquisition price of $51.0 million. The Company used available liquidity to fund the acquisition.
On June 18, 2026, the Company acquired Western Plaza, a 162,000 square foot community center anchored by The Fresh Market in Knoxville, Tennessee, for a gross acquisition price of $65.0 million. The Company used available liquidity to fund the acquisition.
Debt
On June 29, 2026, the Company issued $250 million aggregate principal amount of senior notes in a private placement, consisting of $50 million at 5.09% due June 29, 2029, $100 million at 5.32% due June 29, 2031, and $100 million at 5.60% due June 29, 2033 (collectively, the "2026 Notes") pursuant to a note purchase agreement (the "2026 Note Purchase Agreement"), dated April 16, 2026, between the Company and the various purchasers named therein. The 2026 Notes were issued at par and pay interest semiannually on June 29th and December 29th until their respective maturities.
The Company may prepay at any time all, or from time to time any part of, the 2026 Notes, in an amount not less than 5% of the aggregate principal amount of any series of the 2026 Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus accrued interest and a Make-Whole Amount (as defined in the 2026 Note Purchase Agreement). The 2026 Notes are required to be absolutely and unconditionally guaranteed by certain subsidiaries of the Company that guarantee certain primary credit facilities of the Company. Currently, there are no subsidiary guarantees of the 2026 Notes.
Our Retail Portfolio
The following table summarizes our retail portfolio as of June 30, 2026 and 2025:
As of June 30
2026 2025
No. of properties 78 67
GLA (square feet) 12,278 10,556
Economic occupancy (a) 94.6% 95.5%
Leased occupancy (b) 96.2% 97.3%
ABR PSF (c) $20.94 $20.18
(a)Economic occupancy is defined as the percentage of occupied GLA divided by total GLA (excluding Specialty Leases) for which a tenant is obligated to pay rent under the terms of its lease agreement as of the rent commencement date, regardless of the actual use or occupancy by that tenant of the area being leased. Actual use may be less than economic occupancy. Specialty Leases include small shop leases with terms of less than one year and leases of common area space with terms of any length.
(b)Leased occupancy is defined as economic occupancy plus the percentage of signed but not yet commenced GLA divided by total GLA.
(c)Annualized Base Rent ("ABR") is computed as base rent for the last month of the period multiplied by twelve. Base rent is inclusive of ground rent and any abatement concessions and exclusive of Specialty Lease rent. ABR per square foot ("PSF") is computed as ABR divided by the occupied square footage as of the end of the period.
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Summary by Same Property
Properties classified as same property were owned for the entirety of both periods presented ("Same Properties"). The following table summarizes the Same Properties of our retail portfolio for the three and six months ended June 30, 2026 and 2025.
Three and six months ended June 30
2026 2025
No. of properties 63 63
GLA (square feet) 10,243 10,225
Economic occupancy 94.7% 95.5%
Leased occupancy 96.0% 97.3%
ABR PSF $20.61 $20.14
Lease Expirations
Our retail business is neither highly dependent on specific retailers nor subject to lease rollover concentration. We believe this minimizes risk to our retail portfolio from significant revenue variances over time.
Results of Operations
Comparison of results for the three and six months ended June 30, 2026 and 2025
We generate substantially all of our earnings from property operations. Since January 1, 2025, we have acquired fifteen retail properties and disposed of five retail properties.
The following table presents the comparative results of our income.
Three months ended June 30 Six months ended June 30
2026 2025 Increase 2026 2025 Increase
Income
Lease income, net $ 82,343 $ 73,130 $ 9,213 $ 164,453 $ 146,519 $ 17,934
Other property income 487 421 66 958 803 155
Total income $ 82,830 $ 73,551 $ 9,279 $ 165,411 $ 147,322 $ 18,089
Lease income, net, for the three months ended June 30, 2026 increased $9.2 million when compared to the same period in 2025, as a result of increases from properties acquired of $12.8 million, decreases from properties disposed of $4.1 million, and the following activity related to our Same Properties:
•$1.5 million of increased minimum base and ground rent, and
•$0.1 million of net increases in all other lease income, partially offset by:
•$0.5 million of decreased common area maintenance and real estate tax recoveries,
•$0.5 million of decreased below-market lease intangible amortization, and
•$0.1 million of increased credit losses net of related reversals.
Lease income, net, for the six months ended June 30, 2026 increased $17.9 million when compared to the same period in 2025, as a result of increases from properties acquired of $25.2 million, decreases from properties disposed of $10.2 million, and the following activity related to our Same Properties:
•$2.7 million of increased minimum base and ground rent,
•$0.4 million of increased lease termination income, and
•$0.3 million of increased short-term and other lease income, partially offset by:
•$0.3 million of increased credit losses net of related reversals, and
•$0.2 million of net decreased straight-line rent adjustments.
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The following table presents the comparative results of our operating expenses.
Three months ended June 30 Six months ended June 30
2026 2025 Increase (Decrease) 2026 2025 Increase
Operating expenses
Depreciation and amortization $ 38,660 $ 30,738 $ 7,922 $ 75,045 $ 61,352 $ 13,693
Property operating 12,653 11,476 1,177 24,674 22,223 2,451
Real estate taxes 9,907 10,194 (287) 19,809 19,550 259
General and administrative 8,942 8,706 236 18,261 17,253 1,008
Total operating expenses $ 70,162 $ 61,114 $ 9,048 $ 137,789 $ 120,378 $ 17,411
Depreciation and amortization for the three months ended June 30, 2026 increased $7.9 million when compared to the same period in 2025, as a result of:
•$9.0 million of increases from properties acquired, and
•$0.1 million of net increases from our Same Properties, partially offset by:
•$1.2 million of decreases from properties disposed.
Depreciation and amortization for the six months ended June 30, 2026 increased $13.7 million when compared to the same period in 2025, as a result of:
•$17.6 million of increases from properties acquired, partially offset by:
•$2.9 million of decreases from properties disposed, and
•$1.0 million of net decreases from our Same Properties.
Property operating expenses for the three months ended June 30, 2026 increased $1.2 million when compared to the same period in 2025, as a result of:
•$2.5 million of increases from properties acquired, and
•$0.2 million of net increases from our Same Properties, partially offset by:
•$1.5 million of decreases from properties disposed.
Property operating expenses for the six months ended June 30, 2026 increased $2.5 million when compared to the same period in 2025, as a result of:
•$4.6 million of increases from properties acquired, and
•$0.7 million of net increases from our Same Properties, partially offset by:
•$2.8 million of decreases from properties disposed.
Real estate taxes for the three months ended June 30, 2026 decreased $0.3 million when compared to the same period in 2025, as a result of:
•$0.9 million of net decreases from our Same Properties, and
•$0.5 million of decreases from properties disposed, partially offset by:
•$1.1 million of increases from properties acquired.
Real estate taxes for the six months ended June 30, 2026 increased $0.3 million when compared to the same period in 2025, as a result of:
•$2.2 million of increases from properties acquired, partially offset by:
•$1.3 million of decreases from properties disposed, and
•$0.6 million of net decreases from our Same Properties.
General and administrative expenses for the three and six months ended June 30, 2026 increased $0.2 million and $1.0 million, respectively, when compared to the same periods in 2025, primarily as a result of increased compensation costs.
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The following table presents the comparative results of our other income and expenses.
Three months ended June 30 Six months ended June 30
2026 2025 Increase 2026 2025 Increase
Other (expense) income
Interest expense, net $ (11,328) $ (8,346) $ (2,982) $ (21,413) $ (16,668) $ (4,745)
Gain on sale of investment properties — 90,909 (90,909) — 90,909 (90,909)
Other income and expense, net 29 942 (913) 344 1,549 (1,205)
Total other (expense) income, net $ (11,299) $ 83,505 $ (94,804) $ (21,069) $ 75,790 $ (96,859)
The following table presents the disaggregation of interest expense, net:
Three months ended June 30 Six months ended June 30
2026 2025 Increase (Decrease) 2026 2025 Increase (Decrease)
Term loans, including impact of derivatives $ 3,291 $ 3,393 $ (102) $ 6,462 $ 6,713 $ (251)
Senior notes 3,201 3,201 — 6,402 6,402 —
Mortgages payable 1,258 925 333 2,514 1,851 663
Revolving credit facility, including facility fees 2,558 281 2,277 4,166 481 3,685
Capitalized interest (46) (154) 108 (217) (162) (55)
Interest on finance lease liability 138 32 106 275 32 243
Accretion of finance lease liability 51 11 40 102 11 91
Amortization of debt discounts and financing costs 877 657 220 1,709 1,340 369
Total interest expense, net $ 11,328 $ 8,346 $ 2,982 $ 21,413 $ 16,668 $ 4,745
Interest expense, net increased $3.0 million and $4.7 million during the three and six months ended June 30, 2026, respectively, primarily as a result of borrowings outstanding on our $500 million revolving credit facility ("Revolving Credit Facility") to fund acquisitions.
During the three and six months ended June 30, 2025, we completed a portfolio sale of five properties in California for an aggregate gross disposition price of $306.0 million and recognized a gain of $90.9 million.
Other income and expense, net decreased $0.9 million and $1.2 million during the three and six months ended June 30, 2026, respectively, primarily as a result of decreased interest income due to lower cash balances.
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Net Operating Income
We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, depreciation and amortization, other income and expense, net, impairment of real estate assets, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, lease termination income and expense, and GAAP rent adjustments such as amortization of market-lease intangibles, amortization of lease incentives, and straight-line rent adjustments ("GAAP Rent Adjustments"). We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the retail properties meet our Same Property criteria. NOI from other investment properties includes adjustments for the Company's captive insurance company.
We believe the supplemental non-GAAP measure of NOI, and the bifurcation into same property NOI and NOI from other investment properties, are important measures in assessing operating performance and provide added comparability across periods when evaluating the Company's financial condition and operating performance that is not readily apparent from Net income in accordance with GAAP.
Reconciliation of Net Income to Non-GAAP Measures
The following table reconciles net income, the most directly comparable GAAP measure, to NOI and Same Property NOI:
Three months ended June 30 Six months ended June 30
2026 2025 2026 2025
Net income $ 1,369 $ 95,942 $ 6,553 $ 102,734
Adjustments to reconcile to non-GAAP metrics:
Other income and expense, net (29) (942) (344) (1,549)
Interest expense, net 11,328 8,346 21,413 16,668
Gain on sale of investment properties — (90,909) — (90,909)
Depreciation and amortization 38,660 30,738 75,045 61,352
General and administrative 8,942 8,706 18,261 17,253
Adjustments to NOI (a) (2,726) (1,981) (6,964) (3,780)
NOI 57,544 49,900 113,964 101,769
NOI from other investment properties (9,035) (3,306) (16,769) (7,717)
Same Property NOI $ 48,509 $ 46,594 $ 97,195 $ 94,052
(a)Adjustments to NOI include lease termination income and expense and GAAP Rent Adjustments.
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Comparison of the components of Same Property NOI
A total of 63 retail properties met our Same Property criteria for the three and six months ended June 30, 2026 and 2025.
The following table presents the changes in Same Property NOI for the three months ended June 30, 2026 and 2025:
Three months ended June 30
2026 2025 Change Variance
Minimum base rent $ 44,901 $ 43,556 $ 1,345 3.1 %
Real estate tax recoveries 8,028 8,778 (750) (8.5) %
Common area maintenance, insurance, and other recoveries 8,700 8,450 250 3.0 %
Ground rent income 4,889 4,771 118 2.5 %
Short-term and other lease income 978 866 112 12.9 %
Provision for estimated credit losses (278) (170) (108) 63.5 %
Other property income 433 406 27 6.7 %
Total income 67,651 66,657 994 1.5 %
Property operating 10,467 10,509 (42) (0.4) %
Real estate taxes 8,675 9,554 (879) (9.2) %
Total operating expenses 19,142 20,063 (921) (4.6) %
Same Property NOI $ 48,509 $ 46,594 $ 1,915 4.1 %
Same Property NOI increased by $1.9 million, or 4.1%, when comparing the three months ended June 30, 2026 to the same period in 2025, and was primarily a result of increased ABR PSF from fixed annual rent escalations, favorable lease spreads, and leases with advantageous fixed recovery terms.
The following table presents the changes in Same Property NOI for the six months ended June 30, 2026 and 2025:
Six months ended June 30
2026 2025 Change Variance
Minimum base rent $ 89,250 $ 86,740 $ 2,510 2.9 %
Real estate tax recoveries 16,237 16,690 (453) (2.7) %
Common area maintenance, insurance, and other recoveries 17,498 17,095 403 2.4 %
Ground rent income 9,761 9,531 230 2.4 %
Short-term and other lease income 2,306 2,040 266 13.0 %
Provision for estimated credit losses (434) (138) (296) 214.5 %
Other property income 859 754 105 13.9 %
Total income 135,477 132,712 2,765 2.1 %
Property operating 20,750 20,491 259 1.3 %
Real estate taxes 17,532 18,169 (637) (3.5) %
Total operating expenses 38,282 38,660 (378) (1.0) %
Same Property NOI $ 97,195 $ 94,052 $ 3,143 3.3 %
Same Property NOI increased by $3.1 million, or 3.3%, when comparing the six months ended June 30, 2026 to the same period in 2025, and was primarily a result of increased ABR PSF from fixed annual rent escalations, favorable lease spreads, and leases with advantageous fixed recovery terms.
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Funds From Operations
The National Association of Real Estate Investment Trusts ("Nareit"), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as Funds From Operations ("Nareit FFO"). Our Nareit FFO is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property.
Core FFO is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within Nareit FFO and other unique revenue and expense items, which some may consider not pertinent to measuring a particular company's ongoing operating performance. In that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses.
See our Annual Report for expanded descriptions of Nareit FFO and Core FFO.
The following table reconciles net income, the most directly comparable GAAP measure, to Nareit FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and Dilutive Securities:
Three months ended June 30 Six months ended June 30
2026 2025 2026 2025
Net income $ 1,369 $ 95,942 $ 6,553 $ 102,734
Depreciation and amortization of real estate assets 38,395 30,451 74,506 60,817
Gain on sale of investment properties — (90,909) — (90,909)
Nareit FFO Applicable to Common Shares and Dilutive Securities 39,764 35,484 81,059 72,642
Amortization of market-lease intangibles and inducements, net (1,693) (1,089) (3,951) (1,984)
Straight-line rent adjustments, net (1,002) (844) (2,180) (1,738)
Amortization of debt discounts and financing costs 877 657 1,709 1,340
Accretion of finance lease liability 51 11 102 11
Depreciation and amortization of corporate assets 265 287 539 535
Non-operating income and expense, net (a) (152) (170) (416) (241)
Core FFO Applicable to Common Shares and Dilutive Securities $ 38,110 $ 34,336 $ 76,862 $ 70,565
Weighted average common shares outstanding - basic 77,955,027 77,591,538 77,944,558 77,577,831
Dilutive effect of unvested restricted shares (b) 799,244 700,884 640,216 648,850
Weighted average common shares outstanding - diluted 78,754,271 78,292,422 78,584,774 78,226,681
Net income per diluted share $ 0.02 $ 1.23 $ 0.08 $ 1.31
Per share adjustments for Nareit FFO 0.48 (0.78) 0.95 (0.38)
Nareit FFO per diluted share $ 0.50 $ 0.45 $ 1.03 $ 0.93
Per share adjustments for Core FFO (0.02) (0.01) (0.05) (0.03)
Core FFO per diluted share $ 0.48 $ 0.44 $ 0.98 $ 0.90
(a)Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.
(b)For purposes of calculating non-GAAP per share metrics, we apply the same denominator used in calculating diluted earnings per share in accordance with GAAP.
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Earnings Before Interest, Taxes, Depreciation, and Amortization
Our measure of EBITDA is net income (or loss) in accordance with GAAP, excluding interest expense, net, income tax expense (or benefit), and depreciation and amortization.
Adjusted EBITDA is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Adjusted EBITDA provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within EBITDA, certain gains or losses remaining within EBITDA, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company's ongoing operating performance.
Our adjustments to EBITDA to arrive at Adjusted EBITDA include removing the impact of (i) gains (or losses) resulting from dispositions of properties, (ii) impairment charges on depreciable real property, (iii) amortization of market-lease intangibles and inducements, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt transactions, and (vi) other non-operating revenue and expense items which, in our judgment, are not pertinent to measuring ongoing operating performance.
The following table reconciles net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:
Three months ended June 30 Six months ended June 30
2026 2025 2026 2025
Net income $ 1,369 $ 95,942 $ 6,553 $ 102,734
Interest expense, net 11,328 8,346 21,413 16,668
Income tax expense 144 140 291 276
Depreciation and amortization 38,660 30,738 75,045 61,352
EBITDA 51,501 135,166 103,302 181,030
Gain on sale of investment properties — (90,909) — (90,909)
Amortization of market-lease intangibles and inducements, net (1,693) (1,089) (3,951) (1,984)
Straight-line rent adjustments, net (1,002) (844) (2,180) (1,738)
Non-operating income and expense, net (a) (152) (170) (416) (241)
Adjusted EBITDA $ 48,654 $ 42,154 $ 96,755 $ 86,158
(a)Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.
Liquidity and Capital Resources
Capital Investments and Leasing Costs
Retail properties generally require capital investments, including value-enhancing development and redevelopment projects and leasing costs.
The following table summarizes the cash paid for capital investments and leasing costs:
Three months ended June 30 Six months ended June 30
2026 2025 2026 2025
Tenant improvements $ 1,883 $ 1,370 $ 2,431 $ 2,257
Leasing costs 699 1,042 1,276 1,851
Property improvements 2,872 3,975 4,491 7,187
Capitalized indirect costs (a) 513 386 847 814
Total capital expenditures and leasing costs 5,967 6,773 9,045 12,109
Development and redevelopment direct costs 1,536 3,518 4,178 5,312
Development and redevelopment indirect costs (a) 420 440 787 683
Capital investments and leasing costs (b) $ 7,923 $ 10,731 $ 14,010 $ 18,104
(a)Indirect costs include capitalized interest, real estate taxes, insurance, and payroll costs.
(b)As of June 30, 2026 and 2025, total accrued capital investments and leasing costs were $5,346 and $5,240, respectively.
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Short-Term Liquidity and Capital Resources
On a short-term basis, our principal uses for funds are to pay our operating and corporate expenses, interest and principal on our indebtedness, property capital expenditures, and to make distributions to our stockholders.
Our ability to maintain adequate liquidity for our operations in the future is dependent upon a number of factors, including our revenue, macroeconomic conditions, our ability to contain costs, including capital expenditures, and to collect rents and other receivables, and various other factors, many of which are beyond our control. We will continue to monitor our liquidity position and may seek to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our strategy. Our ability to raise these funds may also be diminished by other macroeconomic factors.
Long-Term Liquidity and Capital Resources
Our objectives are to maximize revenue generated by our retail platform, to further enhance the value of our retail properties to produce attractive current yield and long-term returns for our stockholders, and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders.
Any future determination to pay distributions will be at the discretion of our board of directors (the "Board") and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board deems relevant.
Capital Sources and Uses
Our primary sources and uses of capital are as follows:
Sources Uses
•Operating cash flows from our real estate investments;•Proceeds from sales of properties; •Proceeds from mortgage loan borrowings on properties;•Proceeds from corporate borrowings and debt financings;•Proceeds from any ATM Program activities or other equity offerings; and•Proceeds from debt offerings. •To invest in properties or fund acquisitions; •To fund development, redevelopment, maintenance and capital expenditures or leasing incentives; •To make distributions to our stockholders; •To service or pay down our debt; •To pay our operating expenses; •To repurchase shares of our common stock; and•To fund other general corporate uses.
We maintain an at-the-market equity offering program (the "ATM Program") pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $250.0 million. In connection with the ATM Program, we may sell shares of our common stock to or through sales agents, or may enter into separate forward sale agreements with one of the agents, or one of their respective affiliates, as a forward purchaser. During the six months ended June 30, 2026, no shares were issued under the ATM Program. As of June 30, 2026, $236.7 million of common stock remains available for issuance under the ATM Program.
We believe our status as an NYSE-listed issuer facilitates supplementing our capital sources by selling equity securities of the Company under the ATM Program or otherwise if and when we believe appropriate to do so. Also, from time to time, we may seek to acquire amounts of our outstanding common stock through cash purchases or exchanges for other securities. Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors. At this time, we believe our current sources of liquidity are sufficient to meet our short- and long-term cash demands.
Distributions
During the six months ended June 30, 2026, we declared distributions to our stockholders totaling $39.0 million and paid cash distributions of $37.9 million. As we execute on our retail strategy and continue to evaluate our business, results of operations and cash flows, our Board will continue to evaluate our distribution on a periodic basis.
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Summary of Cash Flows
Six months ended June 30 Change
2026 2025
Cash provided by operating activities $ 74,144 $ 68,866 $ 5,278
Cash (used in) provided by investing activities (264,209) 185,207 (449,416)
Cash provided by (used in) financing activities 224,451 (51,255) 275,706
Net increase in cash, cash equivalents, and restricted cash 34,386 202,818 (168,432)
Cash, cash equivalents, and restricted cash at beginning of period 40,518 91,221 (50,703)
Cash, cash equivalents, and restricted cash at end of period $ 74,904 $ 294,039 $ (219,135)
Cash provided by operating activities was $74.1 million and $68.9 million for the six months ended June 30, 2026 and 2025, respectively, and was generated primarily from property operations. Operating cash flows increased period over period, as incremental cash flows from our Same Properties and net acquisitions since January 1, 2025 exceeded higher interest payments related to borrowings on our Revolving Credit Facility and timing-related fluctuations in receipts and payments.
Cash used in investing activities of $264.2 million for the six months ended June 30, 2026 was the result of:
•$250.3 million for acquisitions of investment properties and
•$13.9 million for capital investments and leasing costs, and other investing activities.
Cash provided by investing activities of $185.2 million for the six months ended June 30, 2025 was the result of:
•$299.4 million from the sale of investment properties, and
•$1.3 million from other investing activities, partially offset by:
•$97.4 million for acquisitions of investment properties, and
•$18.1 million for capital investments and leasing costs.
Cash provided by financing activities of $224.5 million for the six months ended June 30, 2026 was the result of:
•$250.0 million from proceeds from the 2026 Notes,
•$20.0 million of net proceeds in excess of repayments on the Revolving Credit Facility, and
•$0.2 million in net proceeds from our Employee Stock Purchase Plan (the "ESPP"), partially offset by:
•$37.9 million to pay distributions,
•$5.6 million for payment of tax withholdings on stock-based compensation, and
•$2.2 million for payment of financing costs and payment of mortgage principal.
Cash used in financing activities of $51.3 million for the six months ended June 30, 2025 was the result of:
•$36.0 million to pay distributions,
•$13.1 million for pay-offs of mortgage debt and other financing activities, and
•$2.4 million for the payment of tax withholdings for stock-based compensation, partially offset by:
•$0.2 million in net proceeds from our ESPP.
We consider all demand deposits, money market accounts, and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at major financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage. We periodically assess the credit risk associated with these financial institutions. We believe insignificant credit risk exists related to amounts on deposit in excess of FDIC insurance coverage.
Off Balance Sheet Arrangements
None.
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Contractual Obligations
We have obligations related to our mortgage loans, senior notes, term loans, Revolving Credit Facility, and ground lease as described in "Note 6. Debt" in the condensed consolidated financial statements.
The following table presents our obligations to make future payments under debt and lease agreements as of June 30, 2026, exclusive of debt discounts and financing costs, which are not future cash obligations.
Payments due by year ending December 31
2026 2027 2028 2029 2030 Thereafter Total
Fixed rate debt:
Term Loan and Senior Notes (a) $ — $ — $ — $ 200,000 $ 200,000 $ 500,000 $ 900,000
Mortgage maturities — 26,000 21,321 61,750 5,853 — 114,924
Mortgage payments 390 810 495 449 154 — 2,298
Interest 23,248 48,815 47,822 42,596 31,434 26,352 220,267
Total fixed rate debt 23,638 75,625 69,638 304,795 237,441 526,352 1,237,489
Variable rate debt:
Revolving Credit Facility — — — 75,000 — — 75,000
Interest 2,245 4,601 4,462 169 — — 11,477
Total variable rate debt 2,245 4,601 4,462 75,169 — — 86,477
Operating leases (b) 262 529 522 493 293 — 2,099
Finance lease (c) 275 578 605 605 605 71,211 73,879
Grand total $ 26,420 $ 81,333 $ 75,227 $ 381,062 $ 238,339 $ 597,563 $ 1,399,944
(a)Includes variable rate debt swapped to fixed rates through interest rate swaps.
(b)Includes leases on corporate office spaces.
(c)Includes payments related to the finance lease liability related to the ground lease at West Ashley Station.
Critical Accounting Estimates
Our financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, allocating the purchase price of acquired retail properties and evaluating the impairment of long-lived assets. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates.
There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in our "Management’s Discussion and Analysis of Financial Condition and Results of Operations" set forth in our Annual Report.
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