Taubman Centers (TCO) 30 Oct 192019 Q3 Earnings call transcript

Thank you for holding, and welcome to the Taubman Centers' Third Quarter 2019 Earnings Call. The call will begin with prepared remarks and then we will open the lines to question.

On the call today will be Robert Taubman, Taubman Centers' Chairman, President and Chief Executive Officer; Simon Leopold, Chief Financial Officer; and Ryan Hurren, Vice President, Investor Relations, Interim Chief Accounting Officer.

Now I will turn the call over to Ryan for opening remarks.

Thank you, operator, and welcome everyone to our third quarter conference call.

this of we'll federal during within forward-looking know, meaning the securities you conference make call, statements As laws. differ although These with statements results performance, respect views may actual to future reflect events and our materially. current financial

Please see SEC our and discussion XX-K latest uncertainties a and underlying subsequent for statements. various filings, reports, including and of earnings yesterday's release our risks our forward-looking

on our this In will be link replay website. a of section of call the a Relations addition, through Investor provided

supplemental non-GAAP comparable FFO this pro financial investment release, G. when discuss after-tax as our measures measures During defined non-GAAP NOI, historical Regulation include this also performance our call, Non-GAAP properties. included, total SEC EBITDA, filings. measures referenced call NOI Reconciliations portfolio of NOI, and financial by we'll rata on our earnings and/or are in possible, information measures GAAP these to estimates our SEC to the financial may of future

measures differ and/or GAAP forward-looking other Such expense, the which the or depreciation income adjustments interest due management corresponding net some measured quantified all may amortization, expense, future for not to of non-GAAP and tax has significantly periods. from

will prepared questions. ask to up you call Following remarks, We questions open two. limit for your today's that we the

up If again. you please have more, queue

Now over let me to turn the call Bobby.

to Yesterday, line our full-year with our Thanks, results. Ryan, remain everyone. expectations, common in reach $X.XX and and good third we track quarter our on diluted released was morning, AFFO Adjusted FFO share we guidance. per

points. income was quarter pro excluding cancellation NOI X.X% XXX center was XX basis year-to-date. growth Our up basis points total of and in the rata share NOI portfolio lease down Comp

September currency unfavorable a rates Forever significant impact. XX’s exchange of rent, with along continued filing foreign bankruptcy the and had non-payment

$XX.XX, was and centers our year-to-date. was X.X% basis, quarter quarter On year. X.X% NOI-weighted compared Removing points the NOI-weighted square up an year-to-date. rent the NOI comp was in in it's rent square-foot and for per for On was year U.S. the X% and average centers, up In X.X% quarter U.S. flat these XX X.X% X.X% and quarter the was per the X.X% year-to-date. foot growth the items, an and Average rent up last to third for quarter year-to-date. for basis basis,

center end, quarter up and last XX.X%, comparable basis our last points occupancy points XX was At year basis from XXX quarter. over

in we While elevated years, recent seen of turnover. levels tenant have

to healthy our maintain We merchandising. levels, continued improving have while occupancy

Beverly square-foot Mall This of quarter notable Crate Center, at some at expansion The additions Gardens El Balenciaga's & The store Hills at at and Green in were XX,XXX a our open new on Paseo, Nashville. KENZO Gucci Barrel

Apple digitally to They respect in With native in us. us. Casper brands, four Parker opened Warby stores locations. have two locations. stores with now have with also opened opened its Peloton They seven two Shops Naples, reopened X,XXX fifth store. At two an Chubbies Vuitton and with square-foot in us. has and Waterside in store, store, in new Louis square-foot expanded reopened X,XXX has now a

Victoria's square-feet. XX Miami At Dolphin Monaco, Reebok, Sephora, Opel, two spaces Aerie XX,XXX Balance, China, in with Nike, Mall, Bose, XX.X% lifted and space of last ahead XX, has NOI slightly last points the This sales others. back-filled we Children's open CityOn.Xi’an At comprising and both centers. quarter and Place Forever Lease and and CityOn.Zhengzhou from at APM New Secret was productivity year. at basis XX up September

square-feet A Detroit. outlet at Adidas this new in a Lakes Rack signed taking few noteworthy and here and Nordstrom's include Crossing quarter, leases Great XX,XXX combined

and Parker, in be concept house Tampa. bowling in Pinstripes, a like adding furniture stores. Plaza Chubbies digitally native Warby square-feet over Beta brands popular will to continue in XX,XXX Our And occupy International

Hills. The We are Mall at with expansion also the and to at delighted related progress our Green leasing renovation

a our will tenants, Fabletics leases have update. square-foot is Nashville next Vuitton space Goose, since square-foot nearly store Gucci, flagship market to others new XX its will including in set have Books, year. XX,XXX signed Amazon unique store, center Morphe, Powerhouse, April Louis EVEREVE, Zara that The and double X,XXX Golden for open their to

We leasing very digitally luxury with merchandising, also open is now have and which XX Overall, program component the native of are pleased our we complete the substantially level to brands, especially expectations. or either committed the exceeded center.

were XX.X%. to on square-foot, sales Trailing last growth year. prior increase Overall up period. centers NOI square-foot, has of the sales sales over in up XX% XX.X% $XXX sales Turning U.S. last $XXX XX-month sales. Including of our continued an XX-month steady Asia, strong per comparable trailing very year this top $X,XXX year. over were weighted sales per were

up XX.X% were in third up we're quarter, This growth. per the is consecutive quarter and the overall. of U.S., sales XX.X% In square-foot XXth our

from we growth deliveries nonetheless. was again benefited quarter, sales solid Although, Tesla's this

of were have quarter the categories X.X% Apparel well Our of increase on eighth third merchandise all sales quarter consecutive year. for the up year. of performed top an largest last in

in categories X%. also up the Growth Omega, apparel, see Versace, were least Bulgari, H&M, Fabletics, Louis X% strong and Zumi's Hermes Apple In luxury Laurent, at Lauren up results. Yurman, quarter in across and David were Aerie, Breitling, strong. remained posted Lululemon, Ralph Salvatore Shoes including and Burch, double-digit Zara, growth. Saint continue all year-to-date. Ferragamo Vuitton, Electronics to Tory

Moving to at Hudson we of Juan. Mall settled San lawsuit Juan. Bay location regarding the The Company the August, In with San Saks

not the a and did Saks September, result reopen. you XXXX significant store as recall, of damage Hurricane sustained Maria As in

We and reopen XX% closed, Saks with nearly was leasing levels clear pre-hurricane and sales along total our agreements and expeditiously possible. the as to Saks required With compared improve. to to that make grew merchandising felt continued repairs were as strongly, necessary

is to paying million. with Nordstrom. nearly issue, exchange co-tenancy including In this $XX every resolve also context, we the in able agreed to us were We Saks sell litigation for

new the would actively Box take be number the with additive of the We tenants are working to merchandising Saks that to of a center.

call I'll So turn to with that, Simon. the over

third good the quarter and received for X the Adjustments you, restructuring million purchase year-over-year Blackstone's was Hanam, shareholder listed to by of that and joint FFO AFFO our related of to $X.XX. fee per Company's morning, quarter for interest promote The by everyone. Thank a the is FFO in activism, on partner. variances I'll charge XX.X% share supplemental. fee from begin owned a per this $X.XX. reviewing related of resulted quarter the Bobby, share Page cost of that institutional our venture Starfield was net promote resulting $X included

per project November to press completion AFFO results largely expense, was primarily of compared interest in this $X.XX this several the quarter quarter's of share that to quarter result capitalized XXXX. variances noted $X.XX the of We affected $X.XX in of Beverly renovation interest, including XXXX. unfavorable due lower the third in the the year-over-year release

formerly from filing. gain are included and that income down last Group income down as by debt and due revenues, shares which $X.XXX bankruptcy unfavorable Forever primarily by income year's $X.XXX Simon Non-operating Property land to tenant a $X.XX were Lease bad in cancellation results. sale due XX also known are to uncollectible dividend was the

unfavorable lastly primarily also the down Our as to well higher Net centers following, by common impacted rent Forever $X.XX. and some offset due was up legal $X.XX, due $X.XX. write-off XX rents the straight We're area by as minimum to expenses, year-over-year XX rents, G&A non-recurring by non-comp recovery line of variances $X.XXX average unanticipated other included were partially is receivable. higher of Forever our spending. unfavorable

unsecured refinance pleased of week. extend balance term the both earlier line sheet. credit this and primary our and loans of to We're Now to our moving one

loan as a maintain principal $XXX of of capacity $X.X now billion of our line and credit a Our balance will term million.

X, the of February date new X, with maturity leverage extension six-month of of which XXXX. bear loan within date exercised a credit total our coincide based Company's XXXX ratio. is our maturity on is February loans interest line The term two range now if options, with Both

rate The February a the effective of X.XX% rate X.XX% rate of Today, to swapped term including loan to has of of X.XX% XXXX of today. of LIBOR a rate in LIBOR credit line an plus X.X%. of rate resulting resulting LIBOR has X.XX% fixed effective plus fee about facility with a through continuing an a be in

slightly Group like effective have for in support. six We're weighted-average our rates banks pleased would refinancing years. facilities. continued improve lower XX maturity I These to to nearly thank our their the borrowing participate our Bank to debt and

we to our to the three sale in for now proceeds interests of The of from ventures Blackstone represents I by Asian joint provide million. Blackstone. on three with the want the on joint Hanam largest In $XXX progress half than of more of completing sale closed an our expected Starfield September, ventures. update transactions the half

around The interest to year-end. Shinsegae Company on ventures the and in two owning now XX% owns the but XX% remain center, owning joint close China the We Blackstone track XX%.

April the the addition, year-end. business. Asia our completed the back there Zhengzhou on are the of Xi'an to overall before recapitalization are and of refinancing part two expect China projects refinancings In of We close loan in that

Page on an can guidance, which assumptions. Now supplemental, key our on X with our reminder found XXXX all along as guidance be of a our update

guidance filed AFFO We of are previous per bankruptcy share. September a fluid in range late situation. $X.XX remains $X.XX The reaffirming to Forever our XX

noted our Based we believe we we for AFFO last happened remains AFFO incorporated what As adequate appropriate. quarter, impact. reserves know on to-date, range year's what guidance and our this we believed has range

our nearly all remain open operating. to relates As our and expectation of current it occupancy, is XX will that locations

measures. we guidance, not guidance three are changing are key we While adjusting AFFO

have revised to X%. growth NOI our expect we flat now We be First, center comp to guidance. growth

through impact basis of exchange have earnings to last points presented XX third quarter. the our to growth our drag continues we foreign NOI that headwinds the rates On Currency highlighted adverse on call, growth. an about

In instances have rent. in addition, or resulted Forever lower XX some tenant frictional elevated non-payments bankruptcies including in vacancy,

also The rates guidance originally for Interest not with debt updating We include did range associated also our lower expense interest previous Hanam are than paydown year. we Starfield transaction. the forecast. are the the

million we income $XX revised at cancellation expected million. our from $XX Finally, share lease to

few I'd like to make Now looked at we as XXXX. comments a

Forever X% to today's FFO $X.XX on NOI to comp impact best we X.X%. XX's estimates, be year growth expect to create estimate to on based next center of $X.XX. First drag bankruptcy The we a resulting

that higher the were the back Next, accretive good that reduction clearly when of at accretion related a was they XXX in be FFO now to $X.XX assumed transactions about were while February, be the at rates will portion of we debt materially today. points announced $X.XX deal believe to Blackstone effect rates than year. will We basis than next lower least are and net

and These we to not the at be San which center. year Juan, in are business interruption of to are year. offset not expected million the AFFO pre-replicate this related XXXX, proceeds about by included Mall and FFO in next growth NOI Lastly, received $X.X will of

hand to With that, back the call over I'll Bobby.

Simon. Thanks,

are to earnings landscape we retail continues portfolio evolve, also on we track our and strong occupancy levels for meet maintained expectations the have the year. and growing sales, to rent While We're NOI.

Asia, and progress development on enhanced our Finally have both Korea. we new on made Blackstone our transactions substantial in South

take we'll questions. your that, with So

your you to Christine, please questions limit said, two. Ryan are As there?

Yes, Our first from the sir. comes question of Christy [Operator McElroy Citi. line Instructions] from

thank you. and morning Good Hey, guys.

to Just closure how XX, be regard is expectations? reading I the detail talk appreciate versus of that into should little in initial, a we really that fluid the thinking be investors the expected list should context process the with and sort all you Forever on was bit understand rent and about that filed how impact XXXX still of closures Can relief? about

said, the yesterday list that's a is and a list bankruptcy, we remains were that fluid there were and two, only was as very closings out, originally for new included XX Christy list much There list shorter on the the the think Well, unresolved. of put there situation that were on it us. I

two. Now there were

on based and of rights them range year. for likely the back, remain is rent what What outcomes we're of will all in open. the range, when likely we that all well will we've that take if be? almost here said that we occurring, said that reasonable now think what's have take rights our have this It's next But outcomes we for them reflecting are and we year back, are those expectations our within the sort levels locations to negotiations that that that to as for

X.X%, So complicated. of is we'll the It's it's but see our tenant It X% happens, its our what actually of roughly It largest process. way space. is through AVR. is very winding single our

impact. your when goes it an it bankruptcy, into So does tenant, largest have

could give to that that it excluding can a understanding into sort permanent flows relief to trend? short-term deterioration be bankrupt even those that rent your spreads remind just related tenants you're does us, increases And through on then releasing of well. But leasing. Maybe rent in you releasing insight spread numbers? like leases some us there's And impacted continued by you been seems impact, as

last the don't. to answer The no. They question is,

tell Christy, that's growing Even up. are the step. We to note. environment, important are story. whole rents the do always still not our through average and They are volatile a rents, complicated Spreads going

centers our in demand remains for say will I broadly very space strong.

We have healthy occupancy numbers.

manage we rent manage healthy we merchandising. We lease quality – our up. NOI. occupancy. space rents move We really able while And centers. manage to that's the able push best have are for numbers, We of all for we We improving, and our to at average of for are

creating some ability be we haul, to NOI getting portfolio any long quarter, us And is are the small volatility Spreads centers drag The our output. are in over they especially grow a lot this better. on think but year, a an can really just in volatile. our extremely for

I've pointed So merchandising, I focusing. rent, really we're the and pointed pointed where I our occupancy, that's average to really at to

Thank time. you your for Okay.

Christy. Thanks,

next of Markets. line BMO comes question Capital Our Jeremy the from from Metz

guys. Hey

finish to as range. that the roughly XX at the at look same-store, you're to points we As as flat the same guidance level X% in quarter basis soon fourth that in performance year-to-date

moving what basis to pay the from is obviously if XX the in here Correct October expecting points here of I rent? Forever actually you but think they wrong pieces some there are there. are what get XX me quarter, third and did you impact So I'm

Yes.

not So straight comp on There rent hit AFFO. the you an was was pay in the just write-off was we quarter. also the million picture about the line September year they piece, the center a and for this maybe That's that to That the on last and guidance rent a quarter that's in in did NOI. give to. refer I'll NOI, not Jeremy, $X.X revision. broad But an that

XX at basis the expected and from the drag, small, China year rates X%, the FX won between points small U.S. We very dollar, included started about very a the Korean RMB. which

of XX expected. basis throughout highlighting originally third have a Rates through the been been quarter. drag It's the points been course – we've have year, than the it about bigger

about versus two, to you year. So that for the closer at a about look when you lot gets that one

lot is the where that here Forever a XXXX about is environment looks XX, XXXX was about but about X% environment. like It volatile had we was XXXX, piece half than where bankruptcies entire more XXXX. also bankruptcy we This it's seeing other more a elevated The lot are but this with an That bankruptcies. looking like half. in

year third reserves expectations year, through the and of Forever the that so we and And XX, elevated we the the and on between we've the level bankruptcies for the what quarter saw overall burned in essentially accommodate our on be wouldn't would had thought we call our much in That's place. Forever reserves, quarter are. we within where XX that in We left. have but we said second that we able to fact

our effectively and year. points million FX and in elevated back And midpoint seen we've reserves $X that So down between million what for of terms quarter, now. to of the XX the of you fourth $X gets a bankruptcies for about right basis that's for to in putting guidance the cushion growth

Yes.

think tenants be In Let XXXX, to it. – year-to-date me We're over I just into augment, of we're about was on was it X% is half. went bankruptcy It over X.X%. X%. Jeremy, In to going our put on just bankruptcy. XXXX, it data XXXX, was In X.X%.

think better. running similar made you feel basis. about you if things really a I that do us XXXX on think But XXXX settling. think and are a they're little So XXXX, about

little we XX mean, and to over a level this watch clearly as tenants from on knew basis Forever XX we're issues, historically, very list, look I had elevated. anywhere you is points but And there's a X% X%.

X%, of time. you So the you the really range, to period over get – now end it three anytime four-year a in above when you're sustained especially really get higher of

a newer years? some concepts, should And leases we over much expect or about spread the account it's mindsets of these in are tenants think we And How space, shifting larger front. native talked of that test about even does incubating and these leasing getting deals, see you've leases here, shorter proportion of two, this three and as terms shorter we kind for think one, retailers digitally to term monthly of time mall whether some dragging month-to-month Yes, these thanks. today? on even our to about the

that there, I create, short-term about they of very is example. has they Casper, say of that a Peloton earlier mean, now centers guys, into we spreads. I turned comments. a there deals as expanding that a good and turned guys real has you lot with native some But prepared into started in lot but when out of the and our tenants. the fast think UNTUCKit, I'll long-term large we're been fashion the digitally seeing don't in – about they they're and concepts think clearly some talked tenants, lower

actually They're been they're which and centers, to of it's they're shopping strategy now taking tenants. whole becoming think a comments really the good but normal they're and we expanding, earlier. So mall broad in get rent in my in space them a you paying heard variety normal

legacy a take on to and take transition new – So into retailers, is really from there the retailers going many hold. shape but it's and beginning

guys. Thanks

Our comes next from Deutsche McGinniss from [Greg line question Bank]. of the

pieces hoping understand Hey. San Good related to was I to tackle and a everyone. Saks, few Juan. morning,

mostly you co-tenancy is So the mentioned with there. dealt

So to negotiations do how co-tenancy retailers with redevelop then space? expect to settle during And anchor I’m and to backfill those of have curious disputes, that you to any spend regards maybe to you up much Nordstrom? give what with especially

it significant they discussion. it. individual about we Nordstrom, I the resolved an can't all, is issue And with is resolved, covenant mean, have that operating specifically of we term first Well, co-tenancy talk on and said, as

in the With we way dozen tenants respect about impacted. tenants, another, Saks that dealt that the with, one a other to or there were closing

against those was were we with think don't material I where so tenants, specifically. And it

be you and possible, asked but it? have Saks attract gain think tenant for much move is the We productive more now to there forward. in allows to ability do we We their us a re-tenant is building. resolution to the going to transaction on capital the It the realize

actively opportunity a We space are tenants. potential number our we the good to about rebuild And showing of to location. that feel

island and returns. center the And frankly tourism is rebuilds the

tourism to have grow. given pleased be to resolution a behind Bahamas. very us. And we has are long to year continue it to about long expect could process. the in the a and we been strong expect have this to we It The optimistic process, center continue We what's happened but are It Saks

issues to impetus then of talk foresee Town property, Thanks. that question, Curious other to the do any situation that was factors mall for second of about that some just the listing Center. Stamford and hoping there what led the Great. finally a the with and market And were bit similar holdings? kind with you

So first situation for a unique of all, Stamford is us.

We represents all comp it challenges we've alternatives rata our on possible NOI our did this We want expect are today. asset. center people, less to of the competitive there are that said about exploring the I X.X% X% than NOI. that of before, remind pro and

the for Again, it in clearly, the now. very, was retail projects major in unique. There portfolio growth, few anywhere United from better right comp say assets compared States this contemplated to our points the performance awhile. the If NOI have rest center we year. asset has we been basis are XX being been And I would lagging for very of would the excluded

So it us. is impacting

we're alternatives. very and it We the looking on are focused all at

right. Bobby. Thanks All

Todd Markets. from KeyBanc Our line from the question comes Capital Thomas of

thanks. Hi,

for And the or terms First of what of understand XX? assuming, Forever of in comments but on XXXX. there on fluid those of you what you yesterday? Forever in and center list you question, Simon, also NOI closures are to comp are terms locations from the the just the understand was just again of that I things impact based of I number closures provided timing that want are consists assumption that what assuming the here, released the in XX’s FFO that around impact

but which you fluid too deep that what Well, We what occupancy at do we gone that into space looked cost, do still our give we a nearly get is we to looked process, think don't will basic open. and is the space what I all want we've at of went into underpinnings can we've believe the situation, remain sense. locations by we've makes and thought

reduction reduction to rent FFO that occupancy be And the locations to that's $X.XX is different reduction NOI the in of one in in those going place. comp so and tenant costs X% a X.X% of center to inherent based of every $X.XX on to

curious that And store business with it just you I'm you if general think about Bobby, XX, or Okay. makes you does Zara, the at fast this new opened you – fashion mentioned whether just make that differently with situation a up all general? Forever in Zara, just H&M in

companies. organizations different totally two they're mean I

Forever two way. XX, and their bunch very, reported, widely the released made We've missteps Europe of locations, I I a it's and Asia. along mentioned already including CityOn.Zhengzhou expansions CityOn.Xi’an way, positive been at the in a think very in

and unfortunate couldn't respect large of did that they and they every they I couldn't large execute stores, execute; fashion this fill unfortunately And documented it's took unique a and the with time. again they in those fast like problem Mervyn's sort country, many this idea, It's very – fill and think, a And is a boxes terrific properly. they them. some long for just the create well spaces they job and did the in really couldn't

I expanded and who've just year, throughout is H&M very broadly has portfolio well and new to this very throughout locations in their very also a H&M few very this been and taking our expansion addition say, at time in in here doing would cautious Zara, portfolio. country. their

a and we're to dramatically. rails Forever think off in it unique of think of I environment last environment, it XX that the the accentuated and given in it is itself the circumstance the went years I retail sort So couple

you. Thank Okay.

line next of America. from the Our question Schmidt Craig comes Bank of from

appetite to are Thank an luxury overall. in you wondering, luxury new better And appears that open stores? just sales sales than doing seeing you. are was increase retailer’s I It

many in Gucci, Saint various occurred, expansions of our stores number These whether Vuitton. whether of Craig, is you Laurent, both expanding. in hear their brands, locations about Louis the number can are whether Balenciaga, that that expanding of whether the Hermes locations. Absolutely comments

volume of all every them or was in one least their those greater individually X% strong is increase. right mean, now. at luxury I tenants mentioned, So I

sometimes look a very good. and pleased takes location It they very selective very and throughout general several go. about They're where we're a planning to luxury get But representation our to its it's our of at location. years them with So move portfolio growth. into

long-term of and maybe then just end year? EBITDA. by And what's year the get on long-term to to be this net goal? Great. view that Where want a next it you Where And to? think debt your ratio might you

Craig, sheet extended I guess cash gave load call the closed on the solid. that our start We credit paydown transaction, balance Starfield I'd XXXX U.S. which our by saying, remains line some here of We the primary we term favorable out noted our us terms. until and at our in Hanam to line larger

interest are now ratios weighted in years. X. our We're are on where in is want one we’re nearly the the coverage sector, costs on we debt to of lowest very over debt it Our below be higher a maturity X%, fixed charges. about average we than and we've got X.X six is sizable Debt of EBITDA healthy. bit And expense, the to Xx

We’re to of opportunistically going Obviously, to growth ways be in is address that. a that. piece looking EBITDA for

every get like with We if and And ongoing find we us. down, try opportunistic time. this is do number that It's – focus focused for to get down did ongoing back we are Xx. an to below and monitoring Blackstone way to for that transaction be But the going very get going more to we're can us.

Okay. Thank you.

of question line comes the Deutsche next Bank. Shivani from from Sood Our

correct? October guidance to one September but Forever wanted they But blabbering that all or item. clarify morning. sounds Simon Good earlier remain the like didn't Is that thought this XX year for pay point, mentioned for just I you Apologies rent. open. that It contemplates that locations FFO XX Hi.

in to We a the think bankruptcy open. Well, at not way effectively they then we That's going recover pay we happened, to any that'll in that'll think into did least there's But we evaluate. not expect a bucket claim timeframe September, don't close. payer. one material in think after any unsecured rent way an the that portfolios. everyone's do they're end That rent rent we in as that up goes remain all can not bankruptcy, huge

Thanks. Okay. guys. it That's

of question from Stanley. comes Rich the Morgan next Our Hill from line

Hey. this retail how you. lot talked short-term any environment? a the Good even quarters now, And maybe maybe there should why some a reflection leases Is about of morning. years. couple Bobby, retailers just not We've question are for of for be a transitory? reason several approaching first

really transitory. do think I it's

We’re it all doing, things it very, We're occupancy, rents, bankruptcies backfilling, to begin go managing but right a would merchandising especially cycle in now. very like are And in we're the when your that a NOI, important. you to push with cycle this, harder. those we like through makes

make you everyday. you sustain are So to of judgments the you're need the then to short-term some terms to center think make tenants that critical deals And center. in you when have willing merchandising, larger in order to them in

six square-feet. in – They need we about basis those higher were talked as we XX are XXX have spaces about, XX,XXX that our our absent - number impact where and decisions did points were over to. there X% would been those making we’re And And tenants. spread we averaged

But of each one the we went tenants. through

tenants. want oh, I a it's of we And of one part small would accentuated But a those numbers. have they're our every volatile portfolio. we You gets all very say, and statistic. mean, Everything

environment you we to So back eventually, I see think it in this of it. get continuing. less will of that will some But

a question, somewhat back, over how should medium-term. but Simon, you growth about of year-ago quarters it. couple we you. unfair Got the nice or Thank about of think statistics some pretty two, a had And maybe maybe

time versus standpoint? is long-term quite for Blackstone the that the from from growth of away some but that got in we developments portfolio properties JV, have the should you think been after there sort think in anyway I about pool new a the growth the

the of That's on materially lot but better in to our of in was performance it the it assets. project outcomes in take XXXX, the two I of our on pretty the try was the those in Largely Asia guidance and able development projects than broad Hawaii better beginning measures I'll A currency outperform. we a bulk little development projected bit we were back question, positive of three to a exceed and the chunks. year. expected of but Asia, core guess, than in at that really in had it, doing

the that dramatically been at we our expectations assets if those you are outperform outperforming not gave to our to again guidance. but we've outperformance you year great, in this And isn’t, year. saying year. we different the of beginning they what closer it And said where are is ability performing we'll be The it we to those when this fine, If told should not would assets. be be than expect

now – all be growth looked really of stabilization. they moving core would in assets towards the of part the kind should more are I see say at would as then of really development assets you that are They're

help the we've to have really with that, assets growth XXXX. in in a as year kind get will with have run and the So are that the Hills, which are now and continue all this we'll numbers tenants in And expansion at open again, continue the those – portfolio you've Green of which of rate. growth the seen that full-year the in we opened earlier that XXXX to will in help lead we exception think the

really into growth would outsize exception will in and gets to producing I boost compared I which rest stabilization. provide year should a of and That's year on, that only should say XXXX end the that the really the the XXXX toward asset is following next the of portfolio to open and advance XXXX a thing, be the with

Green point? that. you me you just Hills real pool Thank this Can in remind it. for the of quickly at same-store Got

is. It

Okay. you. Great. Thanks, Thank guys.

Yep.

Goldman line the next from Our from of question Burrows comes Sachs. Caitlin

there it morning. sales? the the than process Is something making remaining can two one Good else? what's on guess initial you properties joint venture Hi. the it's anything share take to Is just one Blackstone longer the just it there when broader maybe do are and that I on did? harder

Hanam Yes. throughout knew that be be the going We knew Hi, always year. of were the Caitlin. course would serial We closing to always these first.

we've to some which extent work with are a there. really the the our assets of nature, well. that those a in changed that to There related nothing the of to just day So really has end closings, and partners remember Xi'an partners things need and couple both as we out Zhengzhou in administrative got number are of we things at

before year-end There our highly by nothing going really were it's of and just time – one We're believe I that it we say even and are this We happen goes they probability won't that has terms be expectation if were It's year-end, year, happening. at changed will, nothing year. delaying And the least later still the specific into next still is it. knew take – will. year. they to happen. that's we it's that or in of to knew than confident wouldn't to expect the they some delayed. we of they one closings in So highly, next they going longer

and multi-tenant then okay. you're back it, or then one Saks that wondering to the properties just And the it use, don't replacement, what on same-store for would give Got going could maybe thoughts San I in if a pool. considering us be you Juan, think any whether Box

just So it back in? make would go what

if be three On the could to said. additive above could It entertainment be trying tenants. merchandising out tenant. of what be whole could most a what We were people to we could the of be It two would an you've the a be retailer. center. tenant, the of think just talking a It range one to of It figure tenant. any

we're Yes. And right Saks Box, that in the same-store tenant not There's pool, a work and it's doing pool significant base. the amount of on in terms the still the now. with same-store of

are We lease there. fairly well

lease close but in think we're it. XX% the there. still mid-XXs, work We're to occupied there's to do about I

What my be go does it more when probably expectation back occupancy same-store whole. not the levels community like that back the make get same-store a the think investment should next pool go I expectations that the the into of – portfolio is So year. would I the into pool, think look we it as

have we do get point. to it So work to a little to more that

Okay. That's Thanks. all.

Khanal Samir from of line ISI. the Evercore from comes question next Our

about morning. was at one a flow Authority $XX some of Simon, kind at time point going Good about Can Hills million had Saks NOI think you Yes. I talked – million that through the Center, Short redevelopments and you honest we I from that XXXX? tracking of on at the of to was that as Beverly $XX to you're this boxes. Box update what and believe think Sports

general a you give can update. I

and I the longer we do Green taking happened That's to get than bit think is with do But is open of get think it's what's done. The a really that there all folks there. happy longer we that just that contribution expected. great. taking merchandising The Hills to little with originally leasing environment. We're very

a lower contribution we be what bit expected. the XXXX in little So will than

in you'll closer full of have rate to So XXXX. that run

contribution but XXXX that. our restaurants to better we is to uses work still it in like Sports as in boxes, center of terms Beverly a looking in those like much to there, luxury we and is to the Center looking throughout in, be to like process Authority where our be. what positive expect bring in ability expected and pretty are things work process, the ability bring

So XXXX, $XX by be I a to million by we're not the shy XXXX, would of huge say when you going but to $XX amount. at look the million

at on XX%, maybe like does the Okay. to Bob of you're at we you leasing right expirations gears, think next occupancy, you're as dealing as these what the despite again, guess of look about expand XXXX sort distress And occupancy And is of kind year, sort to color that. momentum that. Thanks still now? be with I held in seen we've for switching expecting retail, on the

call. heard have Well, look solid you've throughout as we ways in various demand the

in remains especially say portfolio, I'll our top half the Solid demand the of assets.

Hills. the Simon very You talked hear example just in of good a leasing mean, Green dynamic. I about the it's that can program

expansions Barrel, I tenants, from Restoration shopping Gucci mean, best digital Louis the we the in. attracted Crate brought we the Apple Zara, all that into center, Hardware, Vuitton, and mentioned I & the adding that very natives

all bankruptcies we we on we've I a broad have second They're to we're to a centers. backfilling we do. our the very backfill progress best by year-end. points a XXXX that expected did of group we end you're good lot coming with have in mean shopping more points think XX the XXX due I about to brands. it at I basis Then expected. made and hearing than We closers of but of that bankruptcies getting the of the had quarter, tenants, we backfill basis expected that mean of

Well does Not points since are all, instead a then, locations this to XXX backfill of now points Forever that basis XX have of but basis going assume most. that. XXX. XX we the most of And stay the we're open. maybe expecting And

demand. It So solid. you're seeing is is there

see were basis. weighted up we we in our that You NOI were an on statistics can X.X% up X.X% weighted what NOI

get and we that, XX doing you're So in is Forever portfolio seeing very get we otherwise stronger hit rent getting assets, did we're did on currency on well better in a difficult environment. hit the but the and

for Thanks the call. Okay.

next from Advisor. Our of from comes Tibone Green question Street the line Vince

morning. good Hi,

in a quicker XX stores strategy Forever a on tenant? is these get operates much spaces of XX going than a than back? split a backfilling backfill the footprint retailers. what bigger I'm to to most to you're get think single just you Forever have curious, of the line maybe you some Do

or single think in in locations it on will square number we I locations tenant. a seven XX of be right XX,XXX the split larger. locations, out them And it have will the of likely six are of And number that of And feet those in or ones, discussions now. we're we think I a many a up. cases, other

the ended over couple on we'll the next we frontage up location, So, doing. and of it years the see the depends options what

combination a both. it's yes, of But

I store generally, have not to above – one did say we feet. But again, XX,XXX I think stores. a take feet. have of square XX,XXX those I'll They old were we up lot even above that, think did only and Mervyn's any Mervyn.

with deals those of one made never them. we So

when to box. it NOI some these, of do, split if like But you you sounds sense. makes That were

potentially this would XXXX. that a be online something in versus having maybe, fair multi-year a come statement? Is So a process back

again, negotiating a bankruptcy you to situation certain rent short with to them. that Well, them fluid back rights we locations. that's then And We it's the with in take relief want term. a in a negotiate in and various we're want extent

But also we rents wherever in be prudent be to a a this landlords can. merchandising than sector. process these the be going But all just bankruptcy typical very of obviously will that think I the about going we're improving We're of is on average our XXXX. focused in longer that it So for take will on to centers.

is just, an and property that overall the you open redevelopment, yet is and Thank you. could on the not know, One update helpful That's color. how close Beverly more stabilization? provide Center that to me, for hall you specifically project food

and and the shop by We've all really Well, luxury these strong been it have up and We've fast in the good. the introduced center about the place in we've the food has received only momentum. talked customer. fashion that. has We to very between the LA sales tenants center is strengthened well from luxury, strengthened in everything to the been

near are the there. we they levels And ever achieved historic that

are active as very level far in as goes, eighth negotiations. the So we

has also eighth up center that location XX in their Forever in the level.

entertainment. active with we're co-working, very with food, So with locations

off to destination anchor do the really a there customers and create in level that center floor. other and floor just largely have the trying said, I've or come generically other center will we're of that destinations to eighth reasons what totality, in will so the look eighth And an what you is at on really and non-traditional the eighth in into retail, drive the

That makes sense.

of then up nothing sounds there opening works on like imminent in it hall there's is So the still food terms then? or everything the

we in that it's still is what imminent, but there we're resolve It and doing we the works would not hope imminently.

sense. Got you. it. Makes Thank

of question Our the Goldfarb Sandler next O'Neill. Alexander from comes line from

trying earnings XX well September, out clarification, you I did, we in figure XX the that I that to so points of impact another did, they you how but think go was Forever also that totality Forever there. Simon, and think release few unclear. that contemplating about of is Hey. then said the was should just like on $X.XX They far? $X.XX, and back just to to a skipped morning if out October they you the or – skipped said Good be

paid they the in third I'm rent October. quarter, sorry, No, in

Okay.

the payment. So $X.XX just skip is merely the

payment straight receivable. and write-off rent $X.XX The skip line of the the the is

like prior XXXX that three. was where gives be it year confidence you this your an similar, be three going gives going people? not, Is and of year, expectation then that this most the like that you that Bobby, bankruptcies or next said of past I anomaly XXXX versus expect of into one elevated be went it's is to will like And what if sort improve again to next to north to given heading you bankruptcy years surprised year Okay. things year the think the year what

this year you in over we're heard what XXXX in clearly X%. it Well, is XXXX looks that. But through over that, year-to-date. to half in like and it was working that it say it going be X%, us XXXX, an it's environment was elevated think X.X% was all of I It's

elevated that total is this watch by sense at our their has costs as in look we how tenant and sales we issue. you So sense that culminated list, really year – tenants are has look tenant, are and and at doing occupancy been what as it our a at look XX category is very category, the the our by Forever as

of And XX made their judgements as are specific and were by Forever to think really that business leadership. the I a I said there lot earlier,

I with. So that's we're mean dealing what

our is should on better it should the XXXX in that sense and be front. settle bankruptcy it So

We're not until XXXX. going know through to we lived

beginning have to operating happened that's would we're context all we We currency, Forever what against context of we significant are the the with say are differential. the of getting in XX, reserves you the And still going We're going to even largely reserves. this the getting of that's with have definitely the in year, reserves. we at I are told year. But hit and hit

be XX that there general. that add have next an like having we doing The have that in our about let biggest better is tenant talking seem that no portfolio. to people There's Forever can name single just impact to Ascena, bit. Alex, me out on little And a they are

But the focused to less it's you exposure Forever the And half. Ascena that exposure name XX, underperforming their have brands kind like of a sense, have next people to about are on. larger We we Dressbarn. to versus ADR give that's just that

portfolio. So meaningful in clearly our was Forever XX

year replicate can't terms that next You in tenant. one of any

related on then centers, front was just FX beginning the at correct? think to tourism Simon, the And of call, clarify, the to your you currency, that Okay. said at solely not I

Correct.

Thank you. Okay.

question line of from Mueller JPMorgan. the Our Michael next comes from

may stats the I Simon, lease about see and level, it when spreads you're there not something hear that and was that I think is trend? quarter at whole before last from I saying you not X% X% the short-term was XX% that the or tell Hi. you the and that is but so. positive out strip guess looking as what how may story, mean Yes. leases that be I obvious that

growth, doing of focus everybody merchandising, about of everybody focus our make be occupancy lens. stat. a end look, and At it Mike, excellent, and is the it it the rent be volatile think they better from focus should which understands really what doing on the made. and the and which very sure aren't there, really you think that on is to spreads which are the are spreads limited output quarter-to-quarter. getting should that just is we They're try day think the At on a decisions day, other of we Well, of get stat a really an end of lot levels,

of kind story. and And you only look tell openings don't story they – They the the quarter. give that a directional tell don't in closures about they entire at

you the So rent, day, up, they looking of at down, they're yes, That's what should volatile they the be End most. at quarter-to-quarter. should matters looking occupancy. go be you go

you. Okay. That it. Thank was

Thank you.

comes the Jefferies. from [indiscernible] question line Our from of last

question. taking for look are leases weight a quarter negative out differently little my rate handful acknowledging and Maybe releasing and slightly you it. on the a spread occupancy as given shorter set Thanks this term you How the weighing between decision Hi. further? of

volatile At thing most NOI balance. a It's a volatile and is the about this the the the Linda. thinking balance, a day, it's important particularly is biggest and environment, Well, we're merchandising. thing, it of in that environment end

may we that's spread the decisions. look these that we when though make So even think what not about not great, stat

to at merchandising You able continue a more will going and to those going be the that be sales forward. need customer centers. to there We rents be think there centers to And those think today, have the best even sales still connection merchandising drive forward. continue to there'll and between we in drive to your is linear centers

think looking looking get to at the that's U.S. the we the merchandising we real to the NOI, environment sure. to the great day, today need be navigate able of that At we're So end in what brighter have estate for what future do at is you to a much we're for to volatile

different mediocre spreads. about and to you real not the estate, estate, it's decisions. If drive NOI, about have you in merchandising may about now trying make right it's best it's But real

NOI dividend from Thanks for you could And about troubled feeling It seems how coverage? and retailers CapEx pressure increased then that. the AFFO? are pressure on like

AFFO, coverage is had the XXXX. it focus Well, a sale after is centers FFO for is about with high our on sorry, dividend now $X.XX Starwood a I'm right of seven the us did it's payer is, in ratio in to rise we It – back XXs.

happier our way back into, XX. a with down grown range below it, call not little have We a are which we is that

XX our have We dividends years. in XXx increased

They're it. I with upcoming comfortable on We've our decisions. and is these at will given it. you given our focused capital that, always these The very board never decreased board dividend levels are needs. the liquidity tell

is, comfortable with right board is we're dividend now there's change and that it the this to ultimately those and that no reason think of as So we where going makes decisions.

spaces rents. kick rent do to cuts, a accept dead leases? replaced population in how would closures, terms higher these XXXX this short-term XX one that you of just to variable horse. gain Forever extent to of terms But be or last stores, cuts or agree rent Not And then then or is one. your in And could suggesting at Thanks. willingness comparable XXXX the to rates your out beat to you

Well, I say think largely, whole we again, it's have answered to but negotiation. a those questions

them in Forever overall with one with but doing dealing and what it also phase-by-phase, they're another the the yes, you're location dealing XX, You're matters to relationship versus landlord.

some we'll back they and take and be for like things liked. this and reduce get So we won't. in of outcome stores, we'll some others for things articulated And that some operate the the have to that in is so we broader in been net-net, our year get continue They'll has one-by-one. totally cases term, range will expectation here and they net-net, the of There in relationship to it the can't will here and bookended their others, we next year. terms right

I not Bobby But got think a is you still negotiation. going to public to not this. now, on in focus this is, which what We're Linda, said, negotiate on

resolved to So little we situation for in how detail are more be a provide means and to future. can the some hamstrung ultimately happy on detail whatever think that what is, we we and you. is we'll much When the way give

lot. a Thanks

Thank you.

We Taubman. the call any turn questions. to further don't back Robert I have will now

Bye-bye Thank to you you come to to you, Beverly all. Christine, and seeing forward thank look Los at We you welcome and Angeles, see Center. everybody.

today's concludes you joining. for this gentlemen, and Thank Ladies conference.

now may disconnect. You