Federal Realty Investment Trust (FRT) 2 Nov 232023 Q3 Earnings call transcript

Hello, and welcome to the Federal Realty Investment Trust Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Leah Brady, Vice President of Investor Relations. Please go ahead.

Good afternoon. us Call. Federal joining XXXX Third for Conference Earnings you today Realty's for Quarter Thank

on the call Operating me and Jeff Executive Joining the President, Treasurer; Berkes, Executive Federal's Vice Vice President Officer; other prepared to Jan Chief Sweetnam, and Wendy executive team our Seher, and Eastern take President, Officer; of Financial Chief Chief questions Vice President, Officer; our Executive G., Region are members here conclusion President; Investment Executive are as remarks. Dan your Officer Don at well Chief Wood, of as that

that discussed within be the reminder XXXX. Litigation this statements deemed the of call of Private Securities A may certain matters meaning Reform forward-looking to be Act on

well Forward-looking results, statements as events or guidance. to including include or anticipated expected any referring annualized as information statements or projected

Although performance expectations Federal forward-looking and and that can no assurance based on in future be differ these assumptions, in expectations can statements give forward-looking may its information materially are such operations Realty Federal the our Realty's attained. that reasonable actual we reflected believes statements, from

supplemental of and may our release disclosure Form operations. of financial provide issued and financial that in-depth and package report that filed earnings The on tonight, our XX-K more a results the documents risk other we factors discussion annual reporting conditions affect [Operator Instructions]

Don? Don begin our to Wood discussion that, with to third the will I quarter our over And results. call turn of

obvious. has whole best estate. results far and It's quarter's afternoon, exceeds and this Leah, made thus time the that own the year in retail-centric everyone. good good stuff, fact, and Demand Thanks, to high-quality supply for a patently real past

comparable deals XXX,XXX only comparable quarter, we leases, our over feet, all XX% other definition relate exclude in quarter. deals to The to the ground-up of be for the square X.X of during construction in For million consecutive done words, we signed third the exact.

mark we've feet which million record was months a more It's record. a never set months of than a and comparable that's hit X over XXXX, itself the first of months than deals, X the which X.X of itself first before. months more XXXX, square For 'XX, of X -- the

see can numbers, occupancy in too. You the it

to reduced the Bed something last points, ], basis Bath our lease expected occupancy by were occupancy XX on demand. it an in XXX That the year basis says quarter basis XX closings a [ end basis. occupied overall and versus declined just points on points While about basis

most XX for small a points look the of future it's to years today. basis and X XX XXX basis past, due the our points has and of trend If the going of bankruptcies XXX XXX at possibilities basis overall basis shop When coming small about, roughly increased X.X and course, reasonable largely expect steady you to This extent another now. by another have to years powerful on dig trend occupancy, another are XX.X% points months occupancy of part basis. an obvious occupied deeper, Bed occupancy XX consternation at Bath, points business forward of to a on the depending, us on you or basis looking shop in we not points the that occupancy anchor been basis lease

leasing I America's suburbs of high-quality health try cities. through first-ring business of properties the really a go this obvious the all home hammer greatest in to to retail-centric around centered

affluent. with here locations capital tenants continue that's the be are likely and reasonable that and bottom reality, line to cost of but will by While higher to results likely in adjust certainly that over rents stay, are historically upward to time will muted especially

tomorrow. interest strong business today underlying the cloud fundamentals and of I that rates exist don't hope appreciation likely that higher investors'

the of rents. year-old rent, about talk term the options. XX% on final new XX% quarter, a was $XX.XX; weighted done basis, total of deals company. a a XX% $XX.XX. again deals, excluding represents X.X plus starting lease square of representative average let's rent years, XXX,XXX straight-line basis, So feet, this XXX That's certainly of comparable on which cash

options profitability, are The more quarter's exercises, contractual An average when lease like you consider you hearing of obvious. bumps TIs and basis, and for term our of future, are. guess this well those with XX years. on sustained the exercised leases higher especially Been bumps. bode years. rent of a Frankly, properties tenant CAGR last $XX.XX was contractual Better they when have rent X.X%. the do. foot part per That $XX.XX have it's rents. economics high for all don't I Better average the option that relative properties volume is XX rents too. of sales foot quarter's the this per better higher leasing

that activity the Third of quarters. quarter results over level from benefited past X

was consensus, a and share internal interest income. quarter for third by $X.XX per expectations despite strong the Bath FFO year's quarter really last of and ahead was X% far third higher us. of is ahead This expense ahead quarter Bed of of lost in

during you on post-acquisition of continues As during to the time, the years exceed underwriting. the know, we XXXX acquisition COVID whereby acquisition to in $X through the core additions total, XXXX. active are new that front billion leasing portfolio the In particularly

undergone recently continued with at above big given while plans slowed Similarly, also in able $XXX invest cost XX. have new acquisitions property our XXXX, have X% outperform that a we've of continue. over IRR that we production to in redevelopment blended million improvement And the higher that expect have also note properties been expectations, capital, to and/or leasing to and

of deployment known Center in smart case. real the under fee in and our Shopping Center; us fee XX acquisition on capital and of in Huntington centers the very the through own; New of acquisition last did Princeton, Square the one We partner's Escondido accretive of secondly, number portion well shopping the best-performing our October, One that the XX% previously one, of each number didn't that Jersey, in the Mercer regional three we interest estate over years, to Shopping

under the has mixed-use leased been occupancy at the at core these far communities been, a occupancy than strong development. neighborhood. center of XX%, stronger. center as counts Powerful occupancy residential have shopping leased buildings operate. make leased large And excluding more XX%, distances XX%; sales which Retail at property draw office the tenant from traffic as they in and They customers business properties the even local

tenant leave multiple the to as it so advanced And half lease strategy building. than that has prior our not on Santana meaningful for to multi-tenant more at and I've mentioned generated calls, out West interest progressed has with tenants negotiations leasing as

are progress is leases our not yet, noteworthy. executed While here

time and one, again. centers, this open-air households with barriers Strength out entry within the the annual over proven of business portfolio always miles higher of are our not always will time Past never no important have available in of own time has there's XX,XXX for grounded large so be. always is business Federal household our one. incomes in sitting simply economy. in cycles density, of public With more than this in uncertain demographics, real More incomes to but X superior an to $XXX,XXX been, investor

lookout American habits their the it's resilient. for consumer Naturally, surprisingly you know, spending as we're because, on and changes remained the of all strength in the

third and data have limited So compared that for we the quarter XXXX to we XXXX sales third tried it quarter. to dissect the the tenant

income eyes sales average for Digging with average were a properties expected our income tenant were As surrounding our a No but portfolio-wide. months indicator with surrounding properties on keeping than saw us, our lowest sales the the year surprise, and deeper, up an the ahead. better that little we're them the highest quarter-over-quarter in significantly them.

As time own to I retail-centric said good real a upfront, estate. it's high-quality

it Dan before up opening Let me to your it questions. now to turn over

you, and Don, Thank hello, everyone.

of driven both of the our range. growth stronger costs. line XXXX's quarter and higher above despite upper bottom the strong beat per end was guidance and by growth quarter Even interest first almost share Another X third the has $X.XX X% headwinds, $X.XX $X.XX POI to months. FFO consensus with FFO

property-level can specialty by With respect strong lower kept quarter. got overage open POI strong and we of higher higher property-level forecast to can costs higher following of we ahead rents driven longer; than this forecast, min G&A, than offset tenants drivers: tenants Despite and as performance, in very, higher fees point rent as the higher percentage to continued the term interest you well very expenses. higher another as as we forecast see, had leasing; in we

growth term With and fees On and months, period basis, ex comparable first rent cash growth excluding rents was Year-to-date respect through prior to was I which POI result will POI the in our contribute comparable third bound prior period This overall that fees to term stands our increase X% also a X.X%, year-to-date. at growth, will the comparable later. metric, X.X%. X for and POI, X.X%. the upper XXXX's for metric, of of touch basis cash an at X.X% POI in helped outlook an upon quarter and expectations

this in X-K. down pool quarter million in was quarter versus for these disclosed Term $X.X the period this to third the fees 'XX, fees quarter rent of million term awash are of quarter rent X adjustments. versus were basically in Prior last year. million third Details $X.X up comparable in our in prior quarter $X.X period and $XXX,XXX the the

impact Net grew by forecasted at XX.X% basis the both percentage basis by with quarter, higher Bath negative metrics showed open departures metric tenants leased leased points, of occupancy our metric we progress had occupancy leasing paying. get our from metric XXX Year-over-year meaningfully XX.X%, team's occupied our due and to and the strong points grew efforts during occupied Bed continued than landing XX our basis rent and overall and the XX at points. our to

at signed-not-occupied in is over in roughly comprised total noncomparable rent total to basis percentage As million signed space incremental $XX are be an pool, $XX or in where result, additional million, our million a and our of of existing $XX portfolio stands leases with the rent points in delivered. our total XXX

largely let with significantly XX% during square caused percentage to came improvements as rollover historically on and higher landlord $XX seen. basis, and renewals. had retail Tenant square foot of in foot, and we've the emphasize quarter, the for signed rollover leases leases square per we share of a per cash new due meaningfully capital less foot meaningfully achieved quarter high which quarter blended per a renewals. having comparable down straight-line Now was mix, than of me with leasing a including resulted to $XX Despite XX% strong which these new a work was last

of third leasing square retail the at vacant was activity of June evidenced leasing, the for totaling Federal's feet representing they Options Bath way Historically, net this driver of XX length for rollover have than been by more a and the space the quarter capital XX, new was tenant, XX% that the one occupancy have and therefore, volume associated. half and new Bed with gains of for are the also XXX,XXX departures. of deals Strong leasing leasing in quarter option metrics strong big transactions reflective not not volume, any do have capital arm's disclosed exercises. negotiated included

improve we supplement. per number square square square this feet of an have the can leasing In X-K quarter total the $XX including Page on total exercise. comparable. more And be disclosure, had our signed also X% per of to X-K retail found We incidentally bring note our include reported are expanded these down when options we continuously to each importantly, capital percentage options exercised of effort which to disclosure This XXX,XXX $XX XX option expanded leases that in highlighted at the quarter, exercise. what solid our of rollover but from total schedules had have foot foot

XX% number we XX-month is community, trailing and comprehensive the picture which a present for by particularly by rollover. Our believe for average GLA, more investment XX%

Xs billion balance held we At With it cash. and to billion in comprised net to roughly steady of be we the into end, sheet. back expect liquidity, Xx, debt-to-EBITDA available $XXX to of revolver under available quarter XXXX. million our ratio at of respect our to $X.X the $X.X and maintained Now continue our total leverage,

figure pipeline to into incremental given remaining and is which of scale only its when active $X.X our news advantage being 'XX, expansions, drive billion This Our capital, large million Federal pipeline available $XXX should of competitive to against a good of for in-process deployed. redevelopments leasing 'XX into liquidity $XXX million a and POI to continue as with that 'XX. chunk spend

guidance. to on Now

the of FFO for X.X% forecast reflects $X.XX up $X.XX. X% to our increasing up XXXX are range midpoint. range X%, We to of XXXX FFO the share of from $X.XX, for XXXX to $X.XX over per previous Guidance at a growth to now

have We small retailer through to relatively expected extremely we I pullout. managed discussed, previously retailer exposure bankruptcies well. And near-term as date have to have

our originally XXX a reserve in The to this will range than Our in points to X expected XXX on fully the come likely basis aforementioned assumed, revised than the of of basis our volumes Shops X with we performance points. lower credit away occupancy the strong as and accelerating XX credit leasing buybuy we reserves BABY forecasted XX locations and commencements and less quarter for much Christmas provided locations went dip strong that coupled with loaded rent was were quarter. Tree at only

comparable adjusting range the to solid to fees, are first period X to our X%. comparable POI range to X% to basis, to the to fees term for growth X% X% increasing and increasing and X% a a On up we're to a rents growth comparable X.XX% prior growth to perspective, period prior we for From X% term cash given X% X.XX% X% rent POI months, adjusting for up X.XX%. X.XX% outlook

least previously million to and Additionally, for G&A down to of through year the discussed million length, for balance Santana $XX at have and XXXX this we the as our $XX for expect refined interest at to West expense assumption year. to capitalize continue

respect on have we provide assumptions provided on our Page X-K. XX the in February. call our summary As for to XXXX always, guidance guidance an With of updated detail of in will we year-end XXXX, key our

operator, open line And the with please for that, up questions.

Goldfarb comes Sandler. with question first Today's Instructions] Alexander [Operator from Piper

you to of changed. for And you. guys Street the best that over Monica. years that, highlight Third one in I -- I Promenade do Don, I'll stick your one one Santa things the sort have it's remember has you question. sold realize sold to guess been but small, of of my assets that's highlights a retail the been I

shift, hold used years And reassessing. as are areas to that of stepping in there you're better other maybe populations But happened back, the opportunity? what's portfolio have few past the now

see may sell. we that we guys assets you more previously sales have of So seen wouldn't

rest are a from Thanks country. frankly, no. that is a Third really hard -- fortune Third we a of Santa for it's till when the I in it the Street. question, situation, showed Alex. Monica the answer We it, spectacular. building, If on is you we IRRs a sold frankly when The made really unique Street owned they the and

yes, not would we Third believers But there change is no doubt downside to continue is that, on that ability in We're the And have. Street the Street. significantly. there what

please would Now at a different reset again. basis, maybe that could make assets some a Street sense that and again be But It's because one-off. portfolio. the extrapolate Promenade unique take other within Third it don't and starting to

from The with Evercore. next question comes Sakwa Steve

market on Don, opportunities. the maybe sticking transaction just looking in for

of sale. to pivoting I your, a any peers on space of guess, if and format number those of larger putting fair kind in hold shopping of market the assets the for One appeal center Federal. might just is assets curious I'm

answer through the I year. it's process that mean each that we go the same us, would perspective is sales for Steve, normally From to really. a not

always As sales We expect $XXX at that really you frankly, we including the the million depending forward. have I of million, positioning this -- I'm looking and happy, million, it can that know, $XXX and for point have. $XXX see marketplace don't don't you is. upon us with what sometimes

be Not to right a side, to there's the situation we'll now, other I'm would the buying that there or see the X in and coming in, next stick X some answer. buying, in not all opportunities my time be hard nice see, terms going that and you imagine today won't to due if the truth, that it it's be be would sure with debt but or really -- banks man. On tell then. year of opportunity, the we to the

next with from Juan Markets. Sanabria is The question BMO Capital

the online a assets, development/redevelopment talk could the the for bit to -- ] you timing pipeline NOI for hoping and [ just occupied the pool. come and kind signed same-store normal that maybe I'm the the perspective little of expectations between about on the course mix denied

you expectations a If color us little that. could give for the on just

sure. Sure,

about number, XX% $XX quarter. you'll roughly million that fourth of the think into coming the see aggregate I the

properties. it I I of out first -- more the little a loaded balance don't course year, of And space the fairly half will half I noncomparable of different for the think front-end back largely year. weighted come coming including the you of think comes the over than at online be it will it everything, will think kind materially not XXXX. terms the bit the of be of online when in it when look

in the XX% largely fourth and balance quarter XXXX. then in at So well the

with question Scotiabank. comes McGinniss next from Greg The

Two-parter here. on guidance

First per $X.XX at than range, $X.XX is usual. on wider a which guidance to bit QX feels FFO the implied share

So top of bottom or what could that take you range? to end the

And guidance expectations. out of to with took regards funding, reasonably quite you but equity maintained funding disposition development

year-end about how should thinking be So we and at funding development into XXXX?

what the narrowed range, Yes. range we there. the It Look, there. it $X.XX to is implied $X.XX is, is

faster job hope getting I We're to we than did we an again. to think this quarter of rents that exceptional expected. started going look, do

been place have keeping good for longer. I tenants doing, job of in think, We a

think of that we had. see the I amount fourth given leasing growth significant we'll occupancy quarter, the in that

it going is I that -- there's not a little be think to probably, wide.

a but of read outside you the there, $X.XX, to want into cents I look few midpoint The that. probably too wouldn't in much

remainder fine-tuning it of is also, happens we'll part year. the think our with what G&A regards I see for the to of we're

quarter will the early, really nice it to relative I think well Hotels what kind through one got in a the of we we expected. of recognition And we is end. quarter that before be entire delivered things Choice did that had And

knows higher the obviously, expected. the we but rates balance terms see our X headwind of may of months, than had last we're happens that. to I And what dictate facing interest And think in timing And some going interest and who the we do the obviously, refinancing of then through obviously, what you're rates. of

development. Funding

have credit to regards undrawn facility. with we $X.X then development, billion And an funding

We alluded can continuing levels to, some done. are in to modest if sales asset Don look we get continuing to at see

need be very perspective done. million of to $X.X next, remaining well end have to it, -- from call to get us done We're certainly quarter get we billion our on to development well very, pipeline. I at The development we positions left the able positioned, $XXX our think, quarters over -- what liquidity million only X $XXX

comes question next Goldsmith The from UBS. with Michael

levels? How on does watch see reserve credit in small momentum compare that, guidance a continue the related tenant the space? of list, anchor you updated And that to to portion the the to watch represent within larger list space. tenant the strong Does historical shop

the to in that's around line. XXX XX regards of to basis With Yes. kind points. end up XX, We about

think did think I we Bed I slightly But had because originally think us I positive we that's less Beyond had we from managing portfolio the Bath been time. forecasted. better historically, & I So that, meaningfully better think over from result a that impact than

list, And are de a people JOANN, of with ballpark Names XX regards any Express Rite names It's that to amount much to have the Lots, our about points. worried of Big minimis the represent just we the nothing. don't really exposure basis exposure rent total Aid, like about. in watch of

balance But for budgeting And pretty think we'll I our good list. get year. term, move XXXX. so that forward process of watch we we near And through the the this as feel we'll assess about through

Kesten with Wells from is Dori question next Fargo. The

occupancy with late remain period? XXX, and spreads the the what believe, the of call XX you years. seen to of to that be small I over months expect of you've comparable You for X Would XXX gained points to expectation over also anchor shop leasing next your started to basis

Yes.

to it terms shopping would, good I they how what I in the notion we about to the lot rest tenants, of It's mean will what picky center. appropriate merchandising, up, think question. how lease we We the Dori. and that. do of the a level a do I talk of are of

you're if leaving money on And up you probably too lease fast, frankly, think the so the table. -- I

get And important that's notion that, for able to us. so paid right and the that's to tenant being the really get of something

most guarantees credit the we rarely credit, almost number small very a the credit got with of type or that those that on that's perspective. with first-time someone -- get with of we player the tenants, regional the lease the the entire of the combine get, It's stores. a of from something a organization time We do And retailer. a shop always

So for the of key value is that's that that the the works we of create the small where company. most off in It shop me, part stuff anchors.

empirically can't the believe And I strength are say leases and that I of the we the those bumps they're on the get, in anchor leases, of deals those superior. but including terms anchor the think I that leases, this,

some those I they're that do. tenants think leases of strongest the

is about just So And it's something really balance occupancy, it's profitability. that seriously. take about not we

Jeff The Bank next from question America. comes Spector with of

update provide you One was there looking on that maybe Santana, any an there? office Can PwC some lease news space at Great. for including progress is

which cannot we're and if $XX. about a made that, cetera, my Jeff, mind. here, are, I'm have, with that you deals on Where Jeff, those where the a said but made we to with don't leases But are yet. be comments name tenant. going respect cost are Jeff, thing. to I close $XX you how just I clear the I comments et Melissa. I no, same way, there if if you comments? in are me me don't we the I real have cost the I you By wouldn't there, said you question signed bill in we getting, made

that. about say can I all really That's

we name optimistic ability But in You because a be should are terms no, tenant. moving cannot of the keep sure forward. to I

question next Zhang with from The is JPMorgan. Hongliang

would in, fully a someone... if the prior proportional fully to we capitalized question. follow-up interest it about Or there? would would guess West, you were if a burn off at the think get a leasing If were I Santana you to amount -- to tenant be

we deliver reduction the interest capitalize of year We up XXXX with expect rent balance would would match starts. be through able tenants. to the expect on to that in to the continue to interest to capitalized the space We

be past, to no expected. there's discussed regards expectation the with with that policy. So Consistent changes our we've in and that what in should number that

question The next from St. Haendel is

Mizuho. with Juste

the This that What's Some 'XX Haendel. you that same-store is articulated could bit average year's pull to next Ravi same-store and line have NOI? read for for Vaidya again. Can your to talk next you achieve for same year? be a of they possibly peers levers expect on above-average store about your level above the early

Look, I on year. think, my as statement, here. February, that But give going I to we guidance store, in to say that's be said XXXX are prepared call detail said okay? same that regard we will this for in With what our to in confirm next I'll We growing about I'm before, point. POI at

The with next question Barclays. is from Anthony Powell

REITs I of Obviously, residential on the earnings season. had business. a the multifamily question guess piece the tough pretty a

So what And renewal in you seeing perform in next rates that few how quarters? or there should of terms whatnot? are the rent

places rents Yes, places, the positive at that. X only where -- they're it's because if in be are. are, where and better rent of in It's you they should growth or mixed-use high very X all about and they have the X on properties about generally residential you is, because is where -- think that our of general

equally particularly of We're Boston. in true Assembly seeing We're at outside just Valley. seeing Silicon in that true that

great home the looks locations that the we're And think when you go kind fully effectively about in amenitized, home markets mortgages of -- cost you awfully and particular there, think and renting in good. so of of and at prices that

business our model. that's And

because projects. these it I residential hope our that's mixed-use So of don't generally I about outside positive the environments world know really it. I Be helpful. X about talk big can't in

Linda The Tsai next question from with Jefferies. comes

consistent there's drive to lower given years. looks It to quarter average each weighted like but just lease pretty X.X wonder supply. desire I if upside terms more lease capture retail the moves your X.X low stays term in to any around the

say that on thing is The the I deal. only it depends would to

it can do. not sitting of key part we'll you that rent, a bumps we you starting can strong in. that's that you're there, what in get strong a when get lock there so And and And is but only

In of X.X, X.X X.X mix. time matter terms this or a years that's the versus simply of

tighter time, are to locations where happening that. of do and it or we we're Now keep like there period are trying purposely certainly things where redevelopment else, certain certain shorter whatever with and stuff

those I for Linda, of the overall, real But love hard differentiator to a portfolio-wide, at you do, and contractual the those understand lease. over because look I'd really they're really bumps term

with a Sandler. Piper The next question Goldfarb Alexander is follow-up from

items as the sort renewals, anchor dwindles optionality think some at the less of leases to traditional give -- we especially space they about tenants availability you tenant cotenancy, and see need as on restrictions, that and on of Don, the the they use are those there's like, starting level?

you they've deals can tangible tough tenants have, of you because some like sort if availability. where And made have give wouldn't of big they examples today negotiating the a where dwindling deals few you've today, seen make that tenants made ago years the of

make specifics. to is. you turn over Wendy the sure that it to really get to It I'm Alex. question, going Good

Overall, of is would answer to looking kind specialty from especially the seeing brands, so better product really, they're Alex, they with we find I are not say the the able yes. that for. are the

us. Bethesda example. and our to growth, was And in demand list for a big of Row I to for XX they'd to and leasing people like for have of just Bethesda format talking the so the to XX join tenants Row, get Row right waiting that a into there some is the are Bethesda we trying

I just that hearing deal. into I'm store over with We a little to into -- of opportunity. we're can't get bit had list, go it's able before. better the department XX,XXX a obviously signed pretty great Bloomingdale's waiting drive So Grove exciting. deal when just We terms those and yes, just The a about than feet, we to square specifics

from you it was lease tell XX But will I the until we it, we the time days. signed started

but strong it desire pretty in our a them benefit on deal area not was we will to that So benefit done get center. clear geographic will feel part their that shopping a only

would you're -- about things it's a necessarily say, Alex of and in mind with. I Jeff. to away lease pretty giving lot on we're talking Keep tough begin terms, that the not that we're

a be on cutting to financial the shifted really lot deals said, terms positive with Wendy to many in the tenants. now, not our landlords given shortage We're great them as environment right definitely, respects, and of terms. now. given right space and good we're proclivity all in is just the tough Really, leverage The of the lease, cutting

Instructions] question follow-up Capital Juan from BMO next with Markets. a [Operator Sanabria The is

Just are quarter to bit implied guide. Dan, call a a of provide guide, question about what going the implied those run implied of quarter in earlier midpoint fourth quarter rate of to in on from the drivers please? little back the FFO bridge you deceleration the fourth the third sequential the could Michael's from Maybe,

conservative I I Look, we're on probably a -- little some that there. numbers of the candidly think think Yes.

we've which a impact G&A, good year, go think up. could would I got which

Those probably I you are probably and kind the to of of is little little gets of guidance. G&A the midpoint a bit the increased the of in midpoint a final of the number or is I conservatism quarter bit implied think kind -- think, what,

The next Joseph with question comes from Nick Citi.

the ] Just [ it's for of Mall plans know expansion the listed conversion. after acquiring Mercer potential I interest. curious and kind or the thoughts fee

timing there and of So current wondering the kind on the thoughts.

the is me Sure. answer Jeff. Yes, this Nick, -- let

walk to going question, can that the some Let got it turn we've Mercer. part answer things Wendy I'm of then first you she of at over through going me to that and the on so

years But happened the acquisition we that fee, which the baked into the October, ago. something was deal of XX in

with what property the would option bearing longer term. that any do have we does So exercising not today on

asset have lot been plans or The are would for that Mercer progressed on that. now property, have without us. a at But -- of we've place it's great the a and with right for got great going things in we

want So to of some details? Wendy, in the do you fill

rebranding on property. working been We've Sure. the

as Mercer rebranded a catchy on kind of be feel One. to will it. it So That's

sign signage that are and the pylon the -- rebranding up of to going seeing be you'll We on property. on execute remerchandising

DSW, think plus We have who's in -- the meaner Bed Bath was the & they to coming Barrel, be last going saw the we as and of tenants I with end Beyond that the and as you of next got, right year. & X it we Crate new backfilled to have downsize portion leaner them,

of a lot at going capital. we investment with market a part on good exciting were on able our on get the of lot rents a demand invested a to those drive So and in that return and things where Mercer

at that, Yes. folks yield. And that investment X.X% $XX remind a million just was to

So opportunity to of this at we inside the the underneath us current the kudos invest ago it. of property fee really significantly with to own folks yield I to who've to allow option great implied capital a to portion on rate it that acquire years a have cap an XX embedded think

-- asset, of middle get but shows got an big am simple the the Jeff for ago. that I so of down it's much kind play I Yes, -- a amazing right were control we of. about chime long a Nick, answer and to we what us. did Mercer an to in. know what's able of about frankly, to a years question piece There's land XX job, going

not own us own And the we there's -- had term, you done. it about going think you the about the or whether talk take chance when fee on contractually -- to We long fee. we're for didn't a

timing is So the now.

you Pembroke was what originally that so reminds Grossmont to land, big today. stream underwrite, inside was it, look was mall what's that they challenges areas, on drop things of that in able It like reminds going. that like happened you are if centers it's piece there around want some things because failing things And of done we such today. that it But dominant to ever. of it and much that stronger The than me a we've of the not It but space me been that at keep around on underwritten. income the community-based do to can't looking large quite with property

Zhang JPMorgan. comes with next Hongliang question from The

projects I most your guess of year. look next pipeline, pipeline? your at by redevelopment projects expected to stabilize When are redevelopment to expansion your expect future start as we in activating I should you

Yes. It's we threshold. here a question a doing. Obviously, return of that higher one level money of around and lot the of spend a great time means cost higher

residential rates component, this, got and do every is of entitlements have, given most the that you've people, And I additional than the ability properties really on that us the retail we so that's different with about where change it's given think, year. is something have we an residential to do what amount redevelopment for

You got year leases.

that now estate. having being when is to of able and in than notion real few of from you're the so in it some talking is it get obviously something years a category started And other for likely more about move piece much

our So do that retail you'll on again and up will redevelopments see more of next we those redevelopments, existing will That continue will properties. start -- year. pick

with the environment next already places residential to. see be larger year stuff, of we've that opportunities later the within also to created to additive particularly respect portfolio, I that retail you'll some But on think,

concludes At would now this time, And am the no hand to to Brady back for I session. call question-and-answer closing like remarks. questions. showing Leah I our this further

you us weeks. We the forward joining Thanks few many in to of today. seeing next look for

concluded. now has participation. conference you for Thank your The

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