{"id":2853,"date":"2021-05-26T21:05:42","date_gmt":"2021-05-27T02:05:42","guid":{"rendered":"https:\/\/1reason.com\/re\/rpt-realty-reports-first-quarter-2021-results-raises-full-year-2021-outlook\/2853\/"},"modified":"2021-05-27T16:05:42","modified_gmt":"2021-05-27T21:05:42","slug":"rpt-realty-reports-first-quarter-2021-results-raises-full-year-2021-outlook","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/rpt-realty-reports-first-quarter-2021-results-raises-full-year-2021-outlook\/2853\/","title":{"rendered":"RPT Realty Reports First Quarter 2021 Results; Raises Full Year 2021 Outlook"},"content":{"rendered":"
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  • Closed on the formation of a new core net lease retail real estate platform (“RGMZ”) with sovereign wealth fund GIC Private Limited (“GIC”), Zimmer Partners (“Zimmer”) and Monarch Alternative Capital LP (“Monarch”).<\/em>\n<\/li>\n
  • Under contract on a grocery-anchored center in the Boston MSA that is expected to be allocated between the Company’s wholly-owned portfolio and new net lease platform.<\/em>\n<\/li>\n
  • Signed 62 leases totaling 556,235 square feet in the first quarter 2021, the highest deal count since the second quarter 2019 including a first-to-state grocer at the Company’s Troy Marketplace property in the Detroit MSA.<\/em>\n<\/li>\n
  • Generated a 50.7% comparable new lease rent spread in the first quarter 2021, the highest quarterly level since the second quarter 2018.<\/em>\n<\/li>\n
  • The Company’s Board of Trustees declared a second quarter 2021 regular cash dividend of $0.075 per common share.<\/em><\/li>\n

    NEW YORK, May 05, 2021 (GLOBE NEWSWIRE) — RPT Realty (NYSE:RPT<\/a>)<\/strong> (“RPT” or the “Company”) today announced its financial and operating results for the quarter ended March31, 2021.<\/p>\n

    “The first quarter of 2021 proved to be another milestone quarter for RPT,” said Brian Harper, President and CEO. “Leasing volumes were up, rent spreads for new leases were 51% and our signed not commenced backlog is over $3 million. We also closed on our ground-breaking new net lease platform with GIC, Zimmer and Monarch. We are already under contract on our first property in the Boston MSA that we expect to be split between our balance sheet and the new net lease platform showcasing the earnings and value accretive arbitrage opportunities we can create for our shareholders with these highly complementary strategies.”<\/p>\n

    FINANCIAL RESULTS<\/strong><\/p>\n

    Net income (loss) attributable to common shareholders for the first quarter 2021 of $15.2 million, or $0.19 per diluted share, compared to $(1.3) million, or $(0.02) per diluted share for the same period in 2020.<\/p>\n

    Funds from operations (“FFO”) for the first quarter 2021 of $15.7 million, or $0.19 per diluted share, compared to $22.5 million, or $0.25 per diluted share for the same period in 2020.<\/p>\n

    Operating FFO for the first quarter 2021 of $15.7 million, or $0.19 per diluted share, compared to $22.8 million or $0.26 per diluted share for the same period in 2020. Operating FFO for the first quarter 2021 excludes certain net income that totaled $0.1 million, primarily attributable to below market lease intangible write-offs. The change in Operating FFO was primarily driven by the impact of the COVID-19 pandemic, resulting in higher rental income not probable of collection and rent abatements. First quarter 2021 rental income not probable of collection and rent abatements were $3.2 million or $0.04 per diluted share, including the Company’s share of unconsolidated joint ventures and including $0.1 million associated with prior periods.<\/p>\n

    Same property NOI for the first quarter 2021 decreased (8.5)% compared to the same period in 2020. The decrease was primarily driven by the impact of the COVID-19 pandemic, resulting in higher rental income not probable of collection, which detracted 5.0% from same property NOI growth. Included in same property NOI forthe first quarter 2021 are $0.1 million of rental income not probable of collection and rent abatements associated with prior periods.<\/p>\n

    During the quarter, the Company\u2019s rent not probable of collection was primarily impacted by the Company\u2019s theater tenants that have remained closed since the onset of the pandemic. The Company expects the majority of its theater tenants to reopen and resume payment over the next few weeks.<\/p>\n

    OPERATING RESULTS<\/strong><\/p>\n

    The Company’s operating results include its consolidated properties and its pro-rata share of unconsolidated joint ventures for the aggregate portfolio.<\/p>\n

    During the first quarter 2021, the Company signed 62 leases totaling 556,235 square feet. Blended re-leasing spreads on comparable leases were 9.1% with ABR of $15.22 per square foot. Re-leasing spreads on 10 comparable new and 38 renewal leases were 50.7% and 3.9%, respectively.<\/p>\n

    As of March31, 2021, the Company had $3.3 million of signed not commenced ABR.<\/p>\n

    The table below summarizes the Company’s leased rate and occupancy results at March31, 2021, December 31, 2020 and March31, 2020. The sequential decline in the leased rate and occupancy results are primarily due to the planned recapture of two anchor spaces that the Company expects to release to high-quality grocers.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
    Consolidated & Joint Ventures at Pro-rata<\/strong><\/td>\nMarch 31, 2021<\/strong><\/td>\nDecember 31, 2020<\/strong><\/td>\nMarch 31, 2020<\/strong><\/td>\n<\/tr>\n
    Aggregate Portfolio<\/strong><\/td>\n\n\n<\/tr>\n
    Leased rate<\/td>\n92.0%<\/td>\n92.8%<\/td>\n94.1%<\/td>\n<\/tr>\n
    Occupancy<\/td>\n90.6%<\/td>\n91.5%<\/td>\n93.3%<\/td>\n<\/tr>\n
    Anchor (GLA of 10,000 square feet or more)<\/strong><\/td>\n\n\n<\/tr>\n
    Leased rate<\/td>\n95.3%<\/td>\n96.1%<\/td>\n96.9%<\/td>\n<\/tr>\n
    Occupancy<\/td>\n94.3%<\/td>\n95.1%<\/td>\n96.5%<\/td>\n<\/tr>\n
    Small Shop (GLA of less than 10,000 square feet)<\/strong><\/td>\n\n\n<\/tr>\n
    Leased rate<\/td>\n84.0%<\/td>\n84.9%<\/td>\n87.3%<\/td>\n<\/tr>\n
    Occupancy<\/td>\n81.5%<\/td>\n83.6%<\/td>\n85.6%<\/td>\n<\/tr>\n<\/table>\n

    BALANCE SHEET<\/strong><\/p>\n

    The Company ended the first quarter 2021 with $143.4 million in consolidated cash, cash equivalents and restricted cash. At March31, 2021, the Company had approximately $928.0 million of consolidated debt and finance lease obligations, which resulted in a first quarter 2021 net debt to annualized adjusted EBITDA ratio of 7.2x. Consolidated debt had a weighted average interest rate of 3.83% and a weighted average maturity, excluding scheduled amortization, of 4.5 years.<\/p>\n

    RGMZ NET LEASE PLATFORM<\/strong><\/p>\n

    During the first quarter 2021, the Company entered into a new core net lease retail platform, of which the initial investment portfolio is to be seeded with 42 single-tenant, net lease retail properties from RPT’s existing portfolio valued at $151 million. RPT will retain a 6.4% equity stake in RMGZ. The Company closed on the sale of the first 13 seed properties from 9 of the Company’s existing properties to RGMZ for $36.2 million on March5, 2021. In conjunction with the closing of the first tranche, the Company also invested $2.6 million in preferred equity directly with Zimmer and Monarch, which will earn a fixed return of 7.0%. Additional details regarding the new platform can be found in the Company’s press release dated March 4, 2021, RPT Realty Announces Formation of New Net Lease Retail Real Estate Platform with Sovereign Wealth Fund GIC, Zimmer and Monarch<\/em> and in the Company’s investor presentation New Net Lease Platform<\/em> both of which can be found on the Company’s website at investors.rptrealty.com<\/a>.<\/em><\/p>\n

    ACQUISITIONS<\/strong><\/p>\n

    The Company entered into a purchase agreement to acquire Northborough Crossing (“Northborough”) through an off-market negotiation for a gross purchase price of $104.0 million. Northborough is a 646,000 square foot grocery-anchored shopping center located in the Boston MSA. The property sits in an affluent area with average household income of $148,000 within a three-mile radius. The property is situated at the intersection of two main thoroughfares and is adjacent to an Avalon Bay complex consisting of over 380 residential units. Northborough is 95.4% occupied and anchored by one of the top performing Wegmans in Boston and BJ’s Wholesale Club. The property is supported by several investment grade tenants including T.J. Maxx, Homesense, Kohl’s and Starbucks with signed leases for two other TJX concepts. The transaction is expected to close during the second quarter 2021, subject to satisfaction of customary closing conditions. The Company plans to sell net lease components to RGMZ later in the year that are expected to enhance the effective yield on the retained multi-tenant center upon close.<\/p>\n

    DIVIDEND<\/strong><\/p>\n

    On April 28, 2021, the Board of Trustees declared a second quarter 2021 regular cash dividend of $0.075 per common share. The Board of Trustees also approved a second quarter 2021 Series D convertible preferred share dividend of $0.90625 per share. The current conversion ratio of the Series D convertible preferred shares can be found on the Company’s website at investors.rptrealty.com\/shareholder-information\/dividends. The dividends, for the period April 1, 2021 through June 30, 2021 are payable on July 1, 2021 for shareholders of record on June 18, 2021.<\/p>\n

    COVID-19 UPDATE<\/strong><\/p>\n

    The Company is closely monitoring the COVID-19 pandemic, including the impact on our business, employees, tenants, shopping centers and communities. The following summary is intended to provide information pertaining to the impacts of the COVID-19 pandemic on the Company\u2019s business. Unless otherwise specified, the statistical and other information regarding the Company\u2019s portfolio are as of April 26, 2021. These estimates are based on information available to the Company and includes its consolidated properties and its pro-rata share of unconsolidated joint ventures.<\/p>\n