UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On April 28, 2022, CTO Realty Growth, Inc., a Maryland corporation (the "Company"), issued an earnings press release, an investor presentation, and a supplemental disclosure package relating to the Company’s financial results for the quarter ended March 31, 2022. Copies of the press release, investor presentation, and supplemental disclosure package are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.
The information in Item 2.02 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 7.01. Regulation FD Disclosure
On April 28, 2022, the Company issued an earnings press release, an investor presentation, and a supplemental disclosure package relating to the Company’s financial results for the quarter ended March 31, 2022. Copies of the earnings press release, investor presentation, and supplemental disclosure package are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the materials include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.
The information in Item 7.01 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 28, 2022
CTO Realty Growth, Inc.
By: /s/Matthew M. Partridge
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Press Release
Contact:Matthew M. Partridge
Senior Vice President, Chief Financial Officer and Treasurer
(407) 904-3324
mpartridge@ctoreit.com
FOR IMMEDIATE RELEASE | CTO REALTY GROWTH REPORTS FIRST QUARTER 2022 OPERATING RESULTS |
WINTER PARK, FL – April 28, 2022 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended March 31, 2022.
Select Highlights
Page 1
CEO Comments
“I’m very pleased with our strong start to the year. We achieved Same-Property NOI growth of nearly 18% in the first quarter as our operational successes in 2021 have driven outsized organic cash flow growth in our recently acquired, retail-focused portfolio,” commented John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “As we look to expand our portfolio, our team has done an excellent job continuing to find attractive opportunities in an increasingly competitive environment, committing more than $77 million of capital to well-located retail properties in the Houston, Atlanta and Dallas markets. For the balance of the year, we have a solid runway of Same-Store NOI growth from new tenants expected to open their doors in the back half of 2022 and we continue to focus on accretively selling our remaining office properties to provide capital for additional acquisitions. Our balance sheet remains well-positioned to fund prospective external growth opportunities and we’re hopeful our newly announced stock split improves the accessibility and liquidity of our stock for the benefit of our current and prospective shareholders.”
Quarterly Financial Results Highlights
The table below provides a summary of the Company’s operating results for the three months ended March 31, 2022:
For the Three Months Ended March 31, 2022 |
| For the Three Months Ended March 31, 2021 | | Variance to Comparable Period in the Prior Year | |||||
Net Income Attributable to the Company | $ | 202 | | $ | 7,785 | | $ | (7,583) | (97.4%) |
Net Income (Loss) Attributable to Common Stockholders | $ | (993) | | $ | 7,785 | | $ | (8,778) | (112.8%) |
Net Income (Loss) per Diluted Share Attributable to Common Stockholders (1) | $ | (0.17) | | $ | 1.32 | | $ | (1.49) | (112.9%) |
| | | | | | | | | |
Core FFO Attributable to Common Stockholders (2) | $ | 8,227 | | $ | 4,850 | | $ | 3,377 | 69.6% |
Core FFO per Common Share – Diluted (2) | $ | 1.39 | | $ | 0.82 | | $ | 0.57 | 69.5% |
| | | | | | | | | |
AFFO Attributable to Common Stockholders (2) | $ | 8,717 | | $ | 5,687 | | $ | 3,030 | 53.3% |
AFFO per Common Share – Diluted (2) | $ | 1.48 | | $ | 0.97 | | $ | 0.51 | 52.6% |
| | | | | | | | | |
Dividends Declared and Paid, per Preferred Share | $ | 0.40 | $ | — | | $ | 0.40 | 100.0% | |
Dividends Declared and Paid, per Common Share | $ | 1.08 | | $ | 1.00 | | $ | 0.08 | 8.0% |
(1) | The denominator for this measure in 2022 excludes the impact of 1,007,294 shares related to the Company’s adoption of ASU 2020-06, effective January 1, 2022, which requires presentation on an if-converted basis for its 2025 Convertible Senior Notes, as the impact would be anti-dilutive. |
(2) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO per Common Share – Diluted, AFFO Attributable to Common Stockholders and AFFO per Common Share - Diluted. |
The decrease in net income attributable to the Company for the three months ended March 31, 2022 is primarily attributable to a decrease in the closing stock price of PINE resulting in a non-cash, unrealized loss of $2.5 million on the mark-to-market of the Company’s investment in PINE, as compared to a non-cash, unrealized gain of $4.8 million during the three months ended March 31, 2021.
Investments
During the three months ended March 31, 2022, the Company acquired one retail property for total income property acquisition volume of $39.1 million and originated one loan agreement to provide $8.7 million of funding towards a retail development project. The Company’s first quarter 2022 investments included the following:
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| ◾ | Purchased Price Plaza Shopping Center, a 206,000 square foot multi-tenant retail property in the Katy submarket of Houston, Texas for $39.1 million. The property is anchored by Best Buy, Ross Dress for Less, dd’s DISCOUNTS and James Avery Artisan Jewelry, includes four single and multi-tenant outparcels, and is shadow anchored by Home Depot, Sam’s Club and Walmart. |
| ◾ | Entered into a loan agreement to provide $8.7 million of funding towards the development of the retail portion of Phase II of The Exchange at Gwinnett. The Company has a negotiated right of first offer on the retail portion of Phase II of The Exchange at Gwinnett, which is anticipated to be 37,000 square feet of retail at completion. The loan matures on January 26, 2024, has a one-year extension option, and bears a fixed interest-only rate of 7.25%. |
Subsequent to quarter-end, the Company entered into a preferred equity agreement to provide $30.0 million of funding towards the acquisition of the Watters Creek at Montgomery Farm, a grocery-anchored, mixed-use property located in Allen, Texas. The Watters Creek at Montgomery Farm is approximately 458,000 square feet of grocery-anchored retail and office, anchored by Market Street, Anthropologie, Mi Cocina, DSW, The Cheesecake Factory, Brio Italian Grille, and Michaels, and includes a variety of national and local retailers and restaurants. The three-year preferred investment for the acquisition was fully funded at closing, is interest-only through maturity, includes an origination fee, and bears a fixed preferred return above the range of the Company’s guidance for initial investment cash yields.
Dispositions
During the three months ended March 31, 2022, the Company sold two single tenant income properties, one of which was classified as a commercial loan and master lease investment due to the tenant’s repurchase option, for $24.0 million at a weighted average exit cap rate of 6.0%.
Income Property Portfolio
The Company’s income property portfolio consisted of the following as of March 31, 2022:
Asset Type |
| # of Properties (1) |
| Square Feet |
| Weighted Average Remaining Lease Term |
Single Tenant |
| 7 |
| 422 |
| 6.5 years |
Multi-Tenant |
| 14 |
| 2,416 |
| 6.9 years |
Total / Weighted Average Lease Term |
| 21 |
| 2,838 |
| 6.8 years |
Property Type |
| # of Properties (1) |
| Square Feet |
| % of Cash Base Rent |
Retail |
| 14 |
| 1,904 |
| 62.5% |
Office | | 4 | | 532 | | 19.1% |
Mixed-Use | | 3 | | 402 | | 18.4% |
Total / Weighted Average Lease Term |
| 21 |
| 2,838 |
| 100.0% |
Leased Occupancy | 93.3% | | |
Economic Occupancy | 90.7% | | |
Physical Occupancy | 89.6% | | |
Square feet in thousands.
(1) | The properties include a property in Hialeah, Florida leased to a master tenant which includes three tenant repurchase options. Pursuant to FASB ASC Topic 842, Leases, the $21.0 million investment has been recorded in the Company’s consolidated balance sheets as Commercial Loan and Master Lease Investment. |
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Operational Highlights
The Company’s Same-Property NOI totaled $6.4 million during the first quarter of 2022, an increase of 17.7% over the comparable prior year period, as presented in the following table.
(in thousands) | For the Three Months Ended March 31, 2022 |
| For the Three Months Ended March 31, 2021 | | Variance to Comparable Period in the Prior Year | ||||
Single Tenant | $ | 2,009 | | $ | 1,984 | | $ | 25 | 1.3% |
Multi-Tenant | | 4,404 | | | 3,465 | | | 939 | 27.1% |
Total | $ | 6,413 | | $ | 5,449 | | $ | 964 | 17.7% |
During the first quarter of 2022, the Company signed leases totaling 56,969 square feet. A summary of the Company’s leasing activity is as follows:
Retail |
| Square Feet | Weighted Average Lease Term | Cash Rent Per Square Foot | | Tenant Improvements | | Leasing Commissions | ||
New Leases | | 24.4 | | 8.9 years | | $31.32 | | $ 691 | | $ 335 |
Renewals & Extensions |
| 32.5 | | 6.2 years | | $31.57 | | 368 | | 36 |
Total / Weighted Average |
| 56.9 | | 6.6 years | | $31.46 | | $ 1,059 | | $ 371 |
In thousands except for per square foot and lease term data.
Subsurface Interests
During the three months ended March 31, 2022, the Company sold approximately 4,750 acres of subsurface oil, gas, and mineral rights for $0.4 million, resulting in aggregate gains of $0.3 million.
Capital Markets and Balance Sheet
During the quarter ended March 31, 2022, the Company completed the following notable capital markets activity:
| ◾ | The Company issued 43,793 common shares under its ATM offering program at a weighted average gross price of $65.47 per share, for total net proceeds of $2.8 million. |
The following table provides a summary of the Company’s long-term debt, at face value, as of March 31, 2022:
| Principal |
| Interest Rate |
| Maturity Date | |
Revolving Credit Facility |
| $66.0 million |
| 30-day LIBOR + [1.35% – 1.95%] |
| May 2023 |
2025 Convertible Senior Notes |
| $51.0 million |
| 3.875% |
| April 2025 |
2026 Term Loan (1) |
| $65.0 million |
| 30-day LIBOR + [1.35% – 1.95%] |
| March 2026 |
2027 Term Loan (2) |
| $100.0 million |
| 30-day LIBOR + [1.35% – 1.95%] |
| January 2027 |
Mortgage Note (3) |
| $17.8 million |
| 4.06% |
| August 2026 |
Total Debt / Weighted Average Interest Rate |
| $299.8 million |
| 2.36% |
|
|
(1) | The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance, including (i) its redesignation of the existing $50.0 million interest rate swap, entered into as of August 31, 2020, and (ii) a $15.0 million interest rate swap effective August 31, 2021, to fix LIBOR and achieve a weighted average fixed interest rate of 0.35% plus the applicable spread. |
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(2) | The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance, including (i) its redesignation of the existing $100.0 million interest rate swap, entered into as of March 31, 2020, and (ii) an additional interest rate swap, effective March 29, 2024, to extend the fixed interest rate through maturity on January 31, 2027, to fix LIBOR and achieve a fixed interest rate of 0.73% plus the applicable spread. |
(3) | Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas during the three months ended March 31, 2022. |
As of March 31, 2022, the Company’s net debt to Pro Forma EBITDA was 6.0 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 3.4 times. As of March 31, 2022, the Company’s net debt to total enterprise value was 35.8%. The Company calculates total enterprise value as the sum of net debt, par value of its 6.375% Series A preferred equity, and the market value of the Company's outstanding common shares.
Subsequent to quarter-end, the Company announced that its Board of Directors has approved a three-for-one stock split of the Company’s common stock to be effected in the form of a stock dividend. Each stockholder of record at the close of business on June 27, 2022 (the “Record Date”), will receive two additional shares of the Company’s common stock for each share held as of the Record Date. The new shares will be distributed on June 30, 2022. The Company’s stock will begin trading at the post-split price on July 1, 2022. The Company’s second quarter regular common stock cash dividend, which will apply to pre-split shares only, will not be impacted by the stock split.
Dividends
On February 23, 2022, the Company announced a cash dividend on its common stock and Series A Preferred stock for the first quarter of 2022 of $1.08 per share and $0.40 per share, respectively, payable on March 31, 2022 to stockholders of record as of the close of business on March 10, 2022. The first quarter 2022 common stock cash dividend represents an 8.0% increase over the comparable prior year period quarterly dividend and a payout ratio of 77.7% and 73.0% of the Company’s first quarter 2022 Core FFO per diluted share and AFFO per diluted share, respectively.
2022 Outlook
The Company has increased its outlook for 2022 to take into account the Company’s first quarter performance and revised expectations regarding the Company’s investment activities, forecasted capital markets transactions, and the impact from implementation of certain accounting standards. The Company’s outlook for 2022 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions. The effect of the Company’s recently announced three-for-one stock split has not been accounted for in the Company’s revised guidance.
The Company’s increased outlook for 2022 is as follows
| 2022 Outlook | |||
| | | Low | High |
Acquisition of Income Producing Assets and Structured Investments |
| $200 million | $250 million | |
Target Initial Cash Yield |
| 6.50% | 7.00% | |
| | | | |
Disposition of Assets |
| $40 million | $70 million | |
Target Disposition Cash Yield |
| 5.25% | 6.50% | |
| | | | |
Core FFO per Diluted Share | | | $4.55 | $4.80 |
AFFO per Diluted Share | | | $4.95 | $5.20 |
| | | | |
Weighted Average Diluted Shares Outstanding | | | 6.1 million | 6.3 million |
1st Quarter Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter ended March 31, 2022, on Friday,
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April 29, 2022, at 9:00 AM ET. Stockholders and interested parties may access the earnings call via teleconference or webcast:
United States:1-877-815-0063
International: 1-631-625-3205
Please dial in at least fifteen minutes prior to the scheduled start time and use the code 3391827 when prompted.
A webcast of the call can be accessed at: https://edge.media-server.com/mmc/p/pujmnp9n.
To access the webcast, log on to the web address noted above or go to www.ctoreit.com and log in at the investor relations section. Please log in to the webcast at least ten minutes prior to the scheduled time of the Earnings Call.
About CTO Realty Growth, Inc.
CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.
We encourage you to review our most recent investor presentation and supplemental financial information, which is available on our website at www.ctoreit.com.
Safe Harbor
Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words.
Although forward-looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include, but are not limited to: the Company’s ability to remain qualified as a REIT; the Company’s exposure to U.S. federal and state income tax law changes, including changes to the REIT requirements; general adverse economic and real estate conditions; macroeconomic and geopolitical factors, including but not limited to inflationary pressures, interest rate volatility, global supply chain disruptions, and ongoing geopolitical war; the ultimate geographic spread, severity and duration of pandemics such as the COVID-19 Pandemic and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business; the loss or failure, or decline in the business or assets of PINE; the completion of 1031 exchange transactions; the availability of investment properties that meet the Company’s investment goals and criteria; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and other risks and uncertainties discussed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission.
There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes
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no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
Non-GAAP Financial Measures
Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, impact fee credits, subsurface sales, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
To derive Pro Forma EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, and other non-cash income or expense. Cash interest expense is also excluded from Pro Forma EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities.
To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude extraordinary items (as defined by GAAP), gain or loss on disposition of assets, gain or loss on extinguishment of debt, impairment charges, and depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, if any, non-cash revenues and expenses such as above- and below-market lease related intangibles, straight-line rental revenue, and other non-cash income or expense. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct cost of revenues, management fee income, and interest income from commercial loan and master lease investments are also excluded from Same-Property NOI. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented. Cash rental income received under the leases pertaining to the Company’s assets
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that are presented as commercial loan and master lease investments in accordance with GAAP is also used in lieu of the interest income equivalent.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. We use Same-Property NOI to compare the operating performance of our assets between periods. It is an accepted and important measurement used by management, investors and analysts because it includes all property-level revenues from of the Company’s rental properties, less operating and maintenance expenses, real estate taxes and other property-specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods. Same-Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company's properties. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same-Property NOI may not be comparable to similarly titled measures employed by other companies.
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CTO Realty Growth, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
|
| As of | ||||
|
| (Unaudited) March 31, 2022 |
| December 31, 2021 | ||
ASSETS |
|
|
|
|
|
|
Real Estate: |
|
|
|
|
|
|
Land, at Cost |
| $ | 205,241 |
| $ | 189,589 |
Building and Improvements, at Cost |
|
| 343,717 |
|
| 325,418 |
Other Furnishings and Equipment, at Cost |
|
| 736 |
|
| 707 |
Construction in Process, at Cost |
|
| 5,163 |
|
| 3,150 |
Total Real Estate, at Cost |
|
| 554,857 |
|
| 518,864 |
Less, Accumulated Depreciation |
|
| (27,844) |
|
| (24,169) |
Real Estate—Net |
|
| 527,013 |
|
| 494,695 |
Land and Development Costs |
|
| 694 |
|
| 692 |
Intangible Lease Assets—Net |
|
| 81,925 |
|
| 79,492 |
Assets Held for Sale |
|
| — |
|
| 6,720 |
Investment in Alpine Income Property Trust, Inc. |
|
| 38,587 |
|
| 41,037 |
Mitigation Credits |
|
| 3,702 |
|
| 3,702 |
Mitigation Credit Rights | | | 21,018 | | | 21,018 |
Commercial Loan and Master Lease Investments |
|
| 21,830 |
|
| 39,095 |
Cash and Cash Equivalents |
|
| 9,450 |
|
| 8,615 |
Restricted Cash |
|
| 26,385 |
|
| 22,734 |
Refundable Income Taxes | | | 413 | | | 442 |
Deferred Income Taxes—Net | | | 75 | | | — |
Other Assets |
|
| 23,127 |
|
| 14,897 |
Total Assets |
| $ | 754,219 |
| $ | 733,139 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
| |
|
| |
Liabilities: |
|
| |
|
| |
Accounts Payable |
| $ | 1,553 |
| $ | 676 |
Accrued and Other Liabilities |
|
| 13,913 |
|
| 13,121 |
Deferred Revenue |
|
| 4,592 |
|
| 4,505 |
Intangible Lease Liabilities—Net |
|
| 5,543 |
|
| 5,601 |
Deferred Income Taxes—Net |
|
| — |
|
| 483 |
Long-Term Debt |
|
| 298,079 |
|
| 278,273 |
Total Liabilities |
|
| 323,680 |
|
| 302,659 |
Commitments and Contingencies |
|
| |
|
| |
Stockholders’ Equity: |
|
| |
|
| |
Preferred Stock – 100,000,000 shares authorized; $0.01 par value, 6.375% Series A Cumulative Redeemable Preferred Stock, $25.00 Per Share Liquidation Preference, 3,000,000 shares issued and outstanding at March 31, 2022 and December 31, 2021 | | | 30 |
|
| 30 |
Common Stock – 500,000,000 shares authorized; $0.01 par value, 6,011,611 shares issued and outstanding at March 31, 2022 and 5,916,226 shares issued and outstanding at December 31, 2021 |
|
| 60 |
|
| 60 |
Additional Paid-In Capital |
|
| 81,092 |
|
| 85,414 |
Retained Earnings |
|
| 339,828 |
|
| 343,459 |
Accumulated Other Comprehensive Income |
|
| 9,529 |
|
| 1,517 |
Total Stockholders’ Equity |
|
| 430,539 |
|
| 430,480 |
Total Liabilities and Stockholders’ Equity |
| $ | 754,219 |
| $ | 733,139 |
Page 9
CTO Realty Growth, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share, per share and dividend data)
| Three Months Ended | ||||
Revenues |
|
|
|
|
|
Income Properties | $ | 15,168 | | $ | 11,449 |
Management Fee Income |
| 936 | |
| 669 |
Interest Income from Commercial Loan and Master Lease Investments |
| 718 | |
| 701 |
Real Estate Operations |
| 388 | |
| 1,893 |
Total Revenues |
| 17,210 | |
| 14,712 |
Direct Cost of Revenues |
| | |
| |
Income Properties |
| (4,016) | |
| (2,917) |
Real Estate Operations |
| (51) | |
| (82) |
Total Direct Cost of Revenues |
| (4,067) | |
| (2,999) |
General and Administrative Expenses |
| (3,043) | |
| (3,132) |
Depreciation and Amortization |
| (6,369) | |
| (4,830) |
Total Operating Expenses |
| (13,479) | |
| (10,961) |
Gain (Loss) on Disposition of Assets |
| (245) | |
| 708 |
Other Gains and Income (Loss) |
| (245) | |
| 708 |
Total Operating Income |
| 3,486 | |
| 4,459 |
Investment and Other Income (Loss) |
| (1,894) | |
| 5,332 |
Interest Expense |
| (1,902) | |
| (2,444) |
Income (Loss) Before Income Tax Benefit |
| (310) | |
| 7,347 |
Income Tax Benefit |
| 512 | |
| 438 |
Net Income Attributable to the Company | $ | 202 | | $ | 7,785 |
Distributions to Preferred Stockholders | | (1,195) | | | — |
Net Income (Loss) Attributable to Common Stockholders | $ | (993) | | $ | 7,785 |
| | | | | |
Per Share Information: | | | | | |
Basic and Diluted Net Income (Loss) Attributable to Common Stockholders | $ | (0.17) | | $ | 1.32 |
| | | | | |
Weighted Average Number of Common Shares: | | | | | |
Basic and Diluted | | 5,908,892 | | | 5,879,085 |
|
| | |
|
|
Dividends Declared and Paid – Preferred Stock | $ | 0.40 | | $ | — |
Dividends Declared and Paid – Common Stock | $ | 1.08 | | $ | 1.00 |
Page 10
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Same-Property NOI Reconciliation
(Unaudited)
(In thousands)
| Three Months Ended | ||||
Net Income Attributable to the Company | $ | 202 |
| $ | 7,785 |
(Gain) Loss on Disposition of Assets | | 245 | | | (708) |
Depreciation and Amortization | | 6,369 | | | 4,830 |
Amortization of Intangibles to Lease Income | | (481) | | | 396 |
Straight-Line Rent Adjustment | | 538 | | | 685 |
COVID-19 Rent Repayments | | (27) | | | (220) |
Other Income Property Related Non-Cash Amortization | | 38 | | | 121 |
Interest Expense | | 1,902 | | | 2,444 |
General and Administrative Expenses | | 3,043 | | | 3,132 |
Investment and Other Income (Loss) | | 1,894 | | | (5,332) |
Income Tax Benefit | | (512) | | | (438) |
Real Estate Operations Revenues | | (388) | | | (1,893) |
Real Estate Operations Direct Cost of Revenues | | 51 | | | 82 |
Management Fee Income | | (936) | | | (669) |
Interest Income from Commercial Loan and Master Lease Investments | | (718) | | | (701) |
Less: Impact of Properties Not Owned the Full Reporting Period | | (5,171) | | | (4,425) |
Cash Rental Income Received from Properties Presented as | | 364 | | | 360 |
Same-Property NOI | $ | 6,413 |
| $ | 5,449 |
Page 11
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | |||||
Net Income Attributable to the Company | $ | 202 |
| $ | 7,785 | |
Add Back: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) | — |
| — | |||
Net Income Attributable to the Company, If-Converted | $ | 202 |
| $ | 7,785 | |
Depreciation and Amortization | 6,369 |
| 4,830 | |||
(Gain) Loss on Disposition of Assets |
| 245 |
|
| (708) | |
Gain on Disposition of Other Assets |
| (332) |
|
| (1,827) | |
Unrealized (Gain) Loss on Investment Securities |
| 2,457 |
|
| (4,834) | |
Funds from Operations | $ | 8,941 | | $ | 5,246 | |
Distributions to Preferred Stockholders | | (1,195) | | | — | |
Funds from Operations Attributable to Common Stockholders | $ | 7,746 | | $ | 5,246 | |
Amortization of Intangibles to Lease Income | | 481 |
| | (396) | |
Less: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) | | — |
| | — | |
Core Funds from Operations Attributable to Common Stockholders | $ | 8,227 | | $ | 4,850 | |
Adjustments: | | | | | | |
Straight-Line Rent Adjustment |
| (538) |
|
| (685) | |
COVID-19 Rent Repayments |
| 27 |
|
| 220 | |
Other Non-Cash Amortization |
| (139) |
|
| (224) | |
Amortization of Loan Costs and Discount on Convertible Debt |
| 234 |
|
| 475 | |
Non-Cash Compensation |
| 906 |
|
| 958 | |
Non-Recurring G&A |
| — |
|
| 93 | |
Adjusted Funds from Operations Attributable to Common Stockholders | $ | 8,717 |
| $ | 5,687 | |
| | | | | | |
FFO Attributable to Common Stockholders per Common Share – Diluted | $ | 1.31 |
| $ | 0.89 | |
Core FFO Attributable to Common Stockholders per Common Share – Diluted | $ | 1.39 |
| $ | 0.82 | |
Page 12
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Reconciliation of Net Debt to Pro Forma EBITDA
(Unaudited)
(In thousands)
|
| |
Net Income Attributable to the Company | $ | 202 |
Depreciation and Amortization | 6,369 | |
Loss on Disposition of Assets |
| 245 |
Gains on Disposition of Other Assets |
| (332) |
Unrealized Loss on Investment Securities |
| 2,457 |
Distributions to Preferred Stockholders | | (1,195) |
Straight-Line Rent Adjustment |
| (538) |
Amortization of Intangibles to Lease Income | 481 | |
Other Non-Cash Amortization |
| (139) |
Amortization of Loan Costs and Discount on Convertible Debt |
| 234 |
Non-Cash Compensation |
| 906 |
Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt |
| 1,669 |
EBITDA | $ | 10,359 |
| | |
Annualized EBITDA | $ | 41,436 |
Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) | | 2,770 |
Pro Forma EBITDA | $ | 44,206 |
| | |
Total Long-Term Debt | | 298,079 |
Financing Costs, Net of Accumulated Amortization | | 1,272 |
Unamortized Convertible Debt Discount | | 483 |
Cash & Cash Equivalents | | (9,450) |
Restricted Cash | | (26,385) |
Net Debt | $ | 263,999 |
| | |
Net Debt to Pro Forma EBITDA | 6.0x | |
| | |
(1) | Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activity during the three months ended March 31, 2022. |
Page 13
| Investor Presentation April 2022 REALTY GROWTH |
| © CTO Realty Growth, Inc. | ctoreit.com Company Profile 2 (1) As of April 22, 2022 for income property assets. (2) Based on $63.65 per share common stock price as of April 22, 2022. $39M INVESTMENT IN ALPINE INCOME PROPERTY TRUST $4.95 – $5.20 AFFO PER SHARE GUIDANCE RANGE 21 2.8M 7.7% PROPERTIES SQUARE FEET IMPLIED CAP RATE (1) 93% LEASED OCCUPANCY Q1 2022 ANNUALIZED DIVIDEND $4.32/share 6.8% CURRENT ANNUALIZED DIVIDEND YIELD (2) $383M $300M $722M EQUITY MARKET CAP (1) OUTSTANDING DEBT TOTAL ENTERPRISE VALUE (Net of Cash) SERIES A PREFERRED $75M The Exchange at Gwinnet Buford, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Key Takeaways 3 Significant Discount to the Peer Group Meaningful potential upside in valuation as CTO has one of the lowest 2022 E AFFO multiple of its primarily retail peer group .. Earnings Growth Through Capital Recycling Strong, long - term track record of monetizing assets at favorable spreads to drive accretive earnings growth and attractive risk - adjusted returns .. Attractive Dividend and Improving Payout Ratio CTO has paid a $ 1 .. 08 first quarter cash dividend, representing a 6 .. 8 % in - place annualized yield and a quickly improving AFFO payout ratio ( 85 % based on the midpoint of 2022 AFFO guidance) driven by the monetization and reinvestment of low cap rate, single tenant properties and non - income producing assets .. Differentiated Investment Strategy Retail - based investment strategy focused on grocery - anchored, traditional retail and mixed - use properties with value - add or long - term residual value opportunities with strong real estate fundamentals in growing markets that can be acquired at meaningful discounts to replacement cost .. High - Quality Portfolio in Faster Growing, Business Friendly Locations with Operational Upside Recently constructed real estate portfolio with a durable, stable tenant base located in faster growing, business friendly states such as Georgia, Florida, Texas, Arizona and North Carolina, and with acquired vacancy that represents notable leasing and/or repositioning upside .. Profitable External Investment Management External management of Alpine Income Property Trust, Inc .. (NYSE : PINE), a high - growth, publicly traded, single tenant net lease REIT, provides excellent in - place cash flow and significant valuation upside through the CTO’s 15 % retained ownership position .. Stable and Flexible Balance Sheet Conservatively levered balance sheet with ample liquidity, no near - term debt maturities and a demonstrated access to multiple capital sources provides financial stability and flexibility .. |
| © CTO Realty Growth, Inc. | ctoreit.com NAV Components 4 Net Operating Income of Income Property Portfolio (1) $47.1 $47.1 $47.1 $47.1 $47.1 ÷ Capitalization Rate 6.00% 6.25% 6.50% 6.75% 7.00% Income Portfolio Value $785.1 $753.7 $724.7 $697.9 $673.0 Other Assets: + Estimated Value for Subsurface Interests, Structured Investments Portfolio, Mitigation Credits and Other Assets $55.8 $55.8 $55.8 $55.8 $55.8 + Cash, Cash Equivalents & Restricted Cash 35.8 35.8 35.8 35.8 35.8 + Value of Shares & Units in Alpine Income Property Trust (PINE) 38.6 38.6 38.6 38.6 38.6 + Value of PINE Management Agreement (2) 9.0 9.0 9.0 9.0 9.0 Other Assets Value $139.2 $139.2 $139.2 $139.2 $139.2 Total Implied Asset Value $924.3 $892.9 $863.9 $837.1 $812.2 - Total Debt Outstanding $299.8 $299.8 $299.8 $299.8 $299.8 - Series A Preferred Equity $75.0 $75.0 $75.0 $75.0 $75.0 Note: 6,011,611 shares outstanding as of March 31, 2022. (1) Based on 2022 budgeted net operating income of the existing income property portfolio assets as of March 31, 2022. (2) Calculated using the trailing 24 - month average management fee paid to CTO by PINE as of March 31, 2022, annualized by multip lying by twelve, and then multiplying by three to account for a termination fee multiple. |
| © CTO Realty Growth, Inc. | ctoreit.com Differentiated Investment Strategy 5 CTO has a retail - oriented real estate strategy that focuses on owning, operating and investing in high - quality properties through direct investment and management structures Multi - Tenant Asset Strategy ▪ Focused on retail - based multi - tenanted assets that have a grocery, lifestyle or community - oriented retail component and a complimentary mixed - use component, located in higher growth MSAs within the continental United States ▪ Acquisition targets exhibit strong current in - place yields with a future potential for increased returns through a combination of vacancy lease - up, redevelopment or rolling in - place leases to higher market rental rates Monetization of Non - Income Producing Assets ▪ CTO has a number of legacy non - income producing assets (mitigation credits and mineral rights) that when monetized, will unlock meaningful equity to be redeployed into income producing assets that can drive higher cash flow and AFFO per share Alpine Income Property Trust and Retained Net Lease Assets ▪ CTO seeded and externally manages Alpine Income Property Trust (NYSE: PINE), a pure play net lease REIT, which is a meaningful source of management fee income and dividend income through its direct investment of REIT shares and OP unit holdings ▪ CTO intends to monetize its remaining net lease properties at market pricing, creating attractive net investment spreads relative to where it is investing in multi - tenanted assets, and resulting in an opportunity to grow PINE through direct asset sales from CTO to PINE Targeting Multi - Tenant, Retail - Based, Value - Add Income Property Acquisitions Monetize Legacy Mitigation Credits, Mineral Rights and Other Assets Manage and Retain Ownership in Alpine REIT (NYSE:PINE) Monetize the Retained Net Lease & Office Properties at Opportunistic Valuations Focused Execution |
| © CTO Realty Growth, Inc. | ctoreit.com Real Estate Strategy CTO’s investment strategy is focused on generating relative outsized returns for our shareholders through a combination of accretive acquisitions and dispositions, asset - level value creation, acquiring at meaningful discounts to replacement cost, and sustainably growing organizational level cash flow. Differentiated asset investment strategy Markets projected to have outsized job and population growth; states with favorable business climates Attractive single tenant asset portfolio identified for future disposition to fund new investments Primary focus on value - add retail and mixed - use properties with strong real estate fundamentals Seek properties with leasing or repositioning upside or highly stable assets with an identifiable opportunity to drive long - term, outsized risk - adjusted returns Acquiring at meaningful discounts to replacement cost and below market rents Miami Orlando Jacksonville Tampa Atlanta Nashville Charlotte Raleigh - Durham Washington, DC Dallas Houston Austin Denver Boulder Salt Lake City Las Vegas Reno Phoenix 6 CTO Target Market |
| © CTO Realty Growth, Inc. | ctoreit.com Meaningful Progress with Portfolio Repositioning 7 $365 $489 $305 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 0.0% 10000.0% 20000.0% 30000.0% 40000.0% 50000.0% 2020 2021 2022 Guidance Monetization of Non-Core Legacy Assets Dispositions Investments Investment and Disposition Activity Cumulative Investment Activity The Shops at Legacy Plano, TX 2022 AFFO is set to benefit from the full - year impact of 2021 transaction activity Price Plaza Shopping Center Katy, TX (1) Reflects the midpoint of 2022 Guidance provided on April 28, 2022. (1) |
| © CTO Realty Growth, Inc. | ctoreit.com Durable Portfolio with Growth Opportunities Recently constructed retail and mixed - use portfolio with a combination of value - add lease up, redevelopment and stable, in - place cash flows in some of the strongest markets in the United States. 8 Stable Cash Flow Essential Retail Repositioning Upside The Shops at Legacy Plano, TX Ashford Lane Atlanta, GA 125 Lincoln & 150 Washington Santa Fe, NM Westcliff Shopping Center Fort Worth, TX The Exchange at Gwinnett Buford, GA The Strand at St. John’s Town Center Jacksonville, FL Jordan Landing West Jordan, UT Crossroads Towne Center Chandler, AZ Beaver Creek Crossings Apex, NC |
| © CTO Realty Growth, Inc. | ctoreit.com Strong Demographic Portfolio 9 Percentages listed based on Annualized Base Rent. (1) Source: Esri; Portfolio average weighted by the Annualized Base Rent of each property. (2) As ranked by Urban Land Institute & PWC in the ‘2022 Emerging Trends in Real Estate’ publication. Income Producing Property Atlanta, GA 16% Jacksonville, FL 15% Dallas, TX 15% Raleigh, NC 10% Phoenix, AZ 8% Albuquerque, NM 7% Houston, TX 6% Santa Fe, NM 5% Tampa, FL 4% Salt Lake City, UT 3% Miami, FL 3% Washington, DC 3% Las Vegas, NV 3% Daytona Beach, FL 2% Orlando, FL 1% > 20% 10% - 20% 5% - 10% < 5% Denotes an MSA with over one million people; Bold denotes a Top 30 ULI Market (2) % of Annualized Rent By State 221,860 Portfolio Average 5 - Mile Population (1) $110,060 Portfolio Average 5 - Mile Household Income (1) 1.7% Portfolio Average 2021 - 2026 Projected Annual Population Growth (1) 71% Percentage of Portfolio ABR from ULI’s Top 30 Markets (1) |
| © CTO Realty Growth, Inc. | ctoreit.com Meaningful Property Cash Flow & Leasing Momentum 10 3% 7% 3% 7% 14% 10% 18% 8% 4% 6% 5% 16% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% Lease Rollover Schedule % of ABR Expiring Leases Signed in Q1 2022 ▪ Q1 2022 Year - Over - Year Same - Property NOI 17.7% o 27.1% Q1 2022 multi - tenant same - property NOI growth o 1.3% Q1 2022 single tenant same - property NOI growth ▪ Q1 2022 Leasing Spreads 2.2% o 8.4% new lease spreads (excluding acquired vacancy) o 1.5% option & renewal spreads ▪ Leased Occupancy 93% o Over 250 bps of future occupancy pickup based on current spread between Occupancy and Leased Occupancy |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – Ashford Lane, Atlanta, GA 11 Acquired as Perimeter Place in 2020, with an opportunity to up - tier through targeted lease - up, an improved tenant mix and market repositioning ▪ High barrier - to - entry location with new residential projects, increasing density and 24 - hour demand ▪ Near southeast corporate headquarters for UPS, State Farm, First Data, IHG and Mercedes Benz ▪ Daytime population over 126,000 in 3 - mile radius; average household income of $139,000 THE HALL Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – Ashford Lane, Atlanta, GA 12 Ashford Lane will incorporate outdoor seating and eating areas, along with a number of new green spaces, including The Lawn , that will drive a more community - focused experience (Not Owned) (Not Owned) (Not Owned) THE HALL Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – Ashford Lane, Atlanta, GA 13 Ashford Lane is being repositioned as a higher - end shopping and dining destination within a growing and relatively affluent submarket of Atlanta ▪ Opportunity to deliver increased rental rates with higher - end tenants supported by new multi - family and office development ▪ Additional green space, outdoor seating and eating areas will support improved foot traffic and offer restaurant - focused amenities ▪ Signed 17,000 square foot lease with a food hall operator who will open in summer/fall 2022 ▪ Signed new leases with the following notable tenants in 2021 and 2022: Ashford Lane Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – 125 Lincoln & 150 Washington, Santa Fe, NM 14 Recently signed 9,200 square foot lease with a prominent hospitality operator who will create four high - end suites on the 4 th floor ▪ Two - building property with dedicated underground parking in the heart of Santa Fe, just north of the historic Santa Fe Plaza ▪ High barrier - to - entry location with 34% vacancy at the time of acquisition ▪ Currently negotiating letters of intent and forms of lease with multiple prospective tenants ▪ Immediate repositioning opportunity to drive increased cash flow and re - vision the property for a higher and better use Plaza 125 Lincoln & 150 Washington Santa Fe, NM 125 Lincoln & 150 Washington Santa Fe, NM 125 Lincoln & 150 Washington Santa Fe, NM |
| © CTO Realty Growth, Inc. | ctoreit.com 13.6x 6.8% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x 18.0x 19.0x 20.0x 21.0x 22.0x CTO Peer Comparisons 21.8x 17.1x 17.0x 16.8x 16.6x 14.7x 13.3x 13.0x 12.7x 12.7x 3.3% 3.5% 3.4% 3.0% 3.3% 3.1% 3.8% 3.6% 3.7% 4.7% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x 18.0x 19.0x 20.0x 21.0x 22.0x FRT AAT AKR KIM UE SITC RPT KRG WSR AHH (1) All 2022E peer FFO multiples and dividend yield information are based on the closing stock price on April 22, 2022, using ann ual ized dividends and 2022E FFO per share estimates from the KeyBank The Leaderboard report dated April 22, 2022; CTO’s FFO mult ipl e and dividend yield is based on its closing stock price on April 22, 2022, using its Q1 annualized dividend announced on February 23, 2022, and 2022E Core FFO pe r s hare guidance as included in the Company’s 2022 Guidance provided on April 28, 2022. CTO has an outsized dividend yield and very attractive valuation relative to its REIT peer group and recent retail M&A multiples (KRG/RPAI and KIM/WRI), implying significant valuation upside. 2022E FFO Multiple and Annualized Dividend Yield (1) |
| © CTO Realty Growth, Inc. | ctoreit.com Balance Sheet 16 $51 $83 $100 $66 2022 2023 2024 2025 2026 2027 Unsecured Secured Revolving Credit Facility Components of Long - Term Debt Principal Interest Rate Type Revolving Credit Facility 66.0 million 30 - Day LIBOR + [1.35% – 1.95%] Floating 2025 Convertible Senior Notes 51.0 million 3.88% Fixed 2026 Term Loan (3) 65.0 million 30 - Day LIBOR + [1.35% – 1.95%] Fixed Mortgage Note 17.8 million 4.06% Fixed 2027 Term Loan (4) 100.0 million 30 - Day LIBOR + [1.35% – 1.95%] Fixed Total Debt $299.8 million $ and shares outstanding in millions. (1) Estimated liquidity is through a combination of revolving credit facility undrawn commitments and existing cash and restric ted cash. (2) Reflects $66.0 million outstanding under the Company’s $210 million senior unsecured revolving credit facility; the Company’ s senior unsecured revolving credit facility matures in May 2023 and includes a one - year extension option, subject to satisfacti on of certain conditions; the maturity date reflected assumes the Company exercises the one - year extension option. (3) The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance, including ( i ) its redesignation of the existing $50.0 million interest rate swap, entered into as of August 31, 2020, and (ii) a $15.0 mi lli on interest rate swap effective August 31, 2021, to fix LIBOR and achieve a weighted average fixed interest rate of 0.35% plus the applicable spread. (4) The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance, including ( i ) its redesignation of the existing $100.0 million interest rate swap, entered into as of March 31, 2020, and (ii) an additio nal interest rate swap, effective March 29, 2024, to extend the fixed interest rate through maturity on January 31, 2027, to fix LIBOR and achieve a fixed interest rate of 0.73% plus the applicable spread. Debt Maturities ▪ More than $170 million of cash and undrawn commitments (1) ▪ No near - term debt maturities ▪ Minimal exposure to floating interest rates ▪ 36% net debt - to - total enterprise value (TEV) ▪ 6.0x Net Debt - to - Pro Forma EBITDA (2) |
| © CTO Realty Growth, Inc. | ctoreit.com 2022 Guidance 17 $ and shares outstanding in millions, except per share data. (1) The effect of the Company’s recently announced three - for - one stock split has not been accounted for in the Company’s revised gui dance. CTO has provided guidance indicating as much as 19% year - over - year AFFO per share growth in 2022. Low High Low High Low High Investments $200 million – $250 million $200 million – $250 million $0 million – $0 million Target Initial Cash Yield 6.25% – 6.75% 6.50% – 7.00% 25 bps – 25 bps Dispositions $40 million – $70 million $40 million – $70 million $0 million – $0 million Target Disposition Cash Yield 6.50% – 7.50% 5.25% – 6.50% (125 bps) – (100 bps) Core FFO Per Diluted Share $4.30 – $4.55 $4.55 – $4.80 $0.25 – $0.25 AFFO Per Diluted Share $4.90 – $5.15 $4.95 – $5.20 $0.05 – $0.05 Weighted Average Diluted Shares Outstanding 6.1 million – 6.3 million 6.1 million – 6.3 million 0 million – 0 million Initial 2022 Revised 2022 (1) Increase (Decrease) |
| © CTO Realty Growth, Inc. | ctoreit.com Experienced Management Team CTO Realty Growth is led by an experienced management team with meaningful shareholder alignment , deep industry relationships and a strong long - term track record. 18 John P. Albright President & Chief Executive Officer ▪ Former Co - Head and Managing Director of Archon Capital, a Goldman Sachs Company; Executive Director of Merchant Banking – Investment Management at Morgan Stanley; and Managing Director of Crescent Real Estate (NYSE: CEI) Daniel E. Smith Senior Vice President, General Counsel & Corporate Secretary ▪ Former Vice President and Associate General Counsel of Goldman Sachs & Co. and Senior Vice President and General Counsel of Crescent Real Estate (NYSE: CEI) Lisa M. Vorakoun Vice President & Chief Accounting Officer ▪ Former Assistant Finance Director for the City of DeLand, Florida and Audit Manager for James Moore & Company, an Accounting and Consulting Firm Matthew M. Partridge Senior Vice President, Chief Financial Officer & Treasurer ▪ Former Chief Operating Officer and Chief Financial Officer of Hutton; Executive Vice President, Chief Financial Officer and Secretary of Agree Realty Corporation (NYSE: ADC); and Vice President of Finance for Pebblebrook Hotel Trust (NYSE: PEB) Steven R. Greathouse Senior Vice President & Chief Investment Officer ▪ Former Director of Finance for N3 Real Estate; Senior Associate of Merchant Banking – Investment Management at Morgan Stanley; and Senior Associate at Crescent Real Estate (NYSE: CEI) Helal A. Ismail Vice President – Investments ▪ Former Associate of Jefferies Real Estate Gaming and Lodging Investment Banking and Manager at B - MAT Homes, Inc. |
| © CTO Realty Growth, Inc. | ctoreit.com ESG – Corporate Responsibility CTO Realty Growth is committed to sustainability, strong corporate governance, and meaningful corporate social responsibility programs. 19 Social Responsibility Inclusive and Supportive Company Culture ▪ Dedicated to an inclusive and supportive office environment filled with diverse backgrounds and perspectives, with a demonstrated commitment to financial, mental and physical wellness Notable Community Outreach ▪ Numerous and diverse community outreach programs, supporting environmental, artistic, civil and social organizations in the community Corporate Governance ▪ Independent Chairman of the Board and 6 of 7 Directors classified as independent ▪ Annual election of all Directors ▪ Annual Board of Director evaluations ▪ Board oversees risk assessment/management, with oversight for specific areas of risk delegated to Board committees ▪ Stock ownership requirements for all Executive Management and Directors ▪ Prohibition against hedging and pledging CTO Realty Growth stock ▪ Robust policies and procedures for approval of related party transactions ▪ All team members adhere to a comprehensive Code of Business Conduct and Ethics policy |
| © CTO Realty Growth, Inc. | ctoreit.com ESG – Environmental Responsibility 20 Over the past nine years, CTO has planted approximately 170,000 pine trees in Florida and has restored over 700 acres of former industrial timberland. These 170,000 trees absorb more than 1,000 tons of carbon each year. Environmental Responsibility Committed Focus & Targeted Investment ▪ Committed to maintaining an environmentally conscious culture, the utilization of environmentally friendly & renewable products, and the promotion of sustainable business practices. Notable achievements: o Formed a conservation mitigation bank on approximately 2,500 acres of land, resulting in the land being barred from development permanently preserved o Invested in LED lighting, recycling and waste reduction strategies, programmable thermostats, energy management systems in our office and/or at our owned properties o Conveyed over 11,000 acres of land to the State of Florida to significantly enlarge the neighboring Tiger Bay State Forest Tenant Alignment ▪ Alignment with environmentally aware tenants who have strong sustainability programs and initiatives embedded into their corporate culture and business practices |
| NYSE: CTO Appendix The Shops at Legacy Plano, TX |
| © CTO Realty Growth, Inc. | ctoreit.com Schedule of Properties 22 Property Market Asset Type Property Type Square Feet Occupancy % of ABR The Shops at Legacy – Plano, TX Dallas, TX Multi - Tenant Mixed Use 237,690 84% 14% Ashford Lane – Atlanta, GA Atlanta, GA Multi - Tenant Retail 283,732 71% 12% Beaver Creek Crossings – Apex, NC Raleigh, NC Multi - Tenant Retail 320,434 96% 10% The Strand – Jacksonville, FL Jacksonville, FL Multi - Tenant Retail 204,552 93% 9% Crossroads Towne Center – Chandler, AZ Phoenix, AZ Multi - Tenant Retail 244,843 100% 8% Fidelity – Albuquerque, NM Albuquerque, NM Single Tenant Office 210,067 100% 7% Price Plaza Shopping Center – Katy, TX Houston, TX Multi - Tenant Retail 205,813 95% 6% 245 Riverside – Jacksonville, FL Jacksonville, FL Multi - Tenant Office 136,853 93% 5% 125 Lincoln & 150 Washington - Santa Fe, NM Santa Fe, NM Multi - Tenant Mixed Use 136,638 73% 5% The Exchange at Gwinnett - Buford, GA Atlanta, GA Multi - Tenant Retail 69,265 92% 4% Sabal Pavilion – Tampa, FL Tampa, FL Single Tenant Office 120,500 100% 4% Blue shading denotes a ground lease property or a property that has parcels that are ground leased, where the Company owns th e land, and the tenant owns the building and the improvements and leases the land from the Company. |
| © CTO Realty Growth, Inc. | ctoreit.com Schedule of Properties 23 Property Market Asset Type Property Type Square Feet Occupancy % of ABR Jordan Landing – West Jordan, UT Salt Lake City, UT Multi - Tenant Retail 170,996 100% 3% Westland Gateway Plaza – Hialeah, FL Miami, FL Multi - Tenant Retail 108,029 100% 3% General Dynamics – Reston, VA Washington, DC Single Tenant Office 64,319 100% 3% Eastern Commons – Henderson, NV Las Vegas, NV Multi - Tenant Retail 133,304 100% 3% Landshark Bar & Grill – Daytona Beach, FL Daytona Beach, FL Single Tenant Retail 6,264 100% 1% Westcliff Shopping Center – Fort Worth, TX Dallas, TX Multi - Tenant Retail 136,185 60% 1% Chuy’s – Jacksonville, FL Jacksonville, FL Single Tenant Retail 7,950 100% < 1% 369 N. New York Ave – Winter Park, FL Orlando, FL Multi - Tenant Mixed Use 28,008 100% < 1% Firebirds – Jacksonville, FL Jacksonville, FL Single Tenant Retail 6,948 100% < 1% Crabby’s Oceanside – Daytona Beach, FL Daytona Beach, FL Single Tenant Retail 5,780 100% < 1% Blue shading denotes a ground lease property or a property that has parcels that are ground leased, where the Company owns th e l and, and the tenant owns the building and the improvements and leases the land from the Company. |
| © CTO Realty Growth, Inc. | ctoreit.com The Shops at Legacy, Plano, TX 24 |
| © CTO Realty Growth, Inc. | ctoreit.com Ashford Lane, Atlanta, GA 25 |
| © CTO Realty Growth, Inc. | ctoreit.com Beaver Creek Crossings, Apex, NC 26 |
| © CTO Realty Growth, Inc. | ctoreit.com Crossroads Town Center, Chandler, AZ 27 |
| © CTO Realty Growth, Inc. | ctoreit.com The Strand, Jacksonville, FL 28 |
| © CTO Realty Growth, Inc. | ctoreit.com Price Plaza Shopping Center, Katy, TX 29 |
| © CTO Realty Growth, Inc. | ctoreit.com 125 Lincoln & 150 Washington, Santa Fe, NM 30 |
| © CTO Realty Growth, Inc. | ctoreit.com The Exchange at Gwinnett, Buford, GA 31 |
| © CTO Realty Growth, Inc. | ctoreit.com Jordan Landing, West Jordan, UT 32 |
| © CTO Realty Growth, Inc. | ctoreit.com Eastern Commons, Henderson, NV 33 |
| © CTO Realty Growth, Inc. | ctoreit.com Forward Looking Statements & Non - GAAP Financial Measures 34 Forward Looking Statements Certain statements contained in this presentation (other than statements of historical fact) are forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended and Section 21 E of the Securities Exchange Act of 1934 , as amended .. Forward - looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words .. Although forward - looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward - looking statements .. Such factors may include, but are not limited to : the Company’s ability to remain qualified as a REIT ; the Company’s exposure to U .. S .. federal and state income tax law changes, including changes to the REIT requirements ; general adverse economic and real estate conditions ; macroeconomic and geopolitical factors, including but not limited to inflationary pressures, interest rate volatility, global supply chain disruptions, and ongoing geopolitical war ; the ultimate geographic spread, severity and duration of pandemics such as the COVID - 19 Pandemic and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations ; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business ; the loss or failure, or decline in the business or assets of PINE ; the completion of 1031 exchange transactions ; the availability of investment properties that meet the Company’s investment goals and criteria ; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales ; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10 - K for the fiscal year ended December 31 , 2021 and other risks and uncertainties discussed from time to time in the Company’s filings with the U .. S .. Securities and Exchange Commission .. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management .. Readers are cautioned not to place undue reliance on these forward - looking statements, which speak only as of the date of this presentation .. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances .. Non - GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) .. We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and Same - Property Net Operating Income (“Same - Property NOI”), each of which are non - GAAP financial measures .. We believe these non - GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs .. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same - Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements ; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures .. |
| © CTO Realty Growth, Inc. | ctoreit.com Non - GAAP Financial Measures 35 Non - GAAP Financial Measures (continued) We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT .. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write - downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries .. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, impact fee credits, subsurface sales, and land sales, in addition to the mark - to - market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive .. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above - and below - market lease related intangibles, and other unforecastable market - or transaction - driven non - cash items .. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non - cash revenues and expenses such as straight - line rental revenue, non - cash compensation, and other non - cash amortization, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive .. Such items may cause short - term fluctuations in net income but have no impact on operating cash flows or long - term operating performance .. We use AFFO as one measure of our performance when we formulate corporate goals .. To derive Pro Forma EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write - downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, non - cash revenues and expenses such as straight - line rental revenue, amortization of deferred financing costs, above - and below - market lease related intangibles, non - cash compensation, and other non - cash income or expense .. Cash interest expense is also excluded from Pro Forma EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities .. To derive Same - Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude extraordinary items (as defined by GAAP), gain or loss on disposition of assets, gain or loss on extinguishment of debt, impairment charges, and depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, if any, non - cash revenues and expenses such as above - and below - market lease related intangibles, straight - line rental revenue, and other non - cash income or expense .. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct cost of revenues, management fee income, and interest income from commercial loan and master lease investments are also excluded from Same - Property NOI .. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented .. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loan and master lease investments in accordance with GAAP is also used in lieu of the interest income equivalent .. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions .. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non - cash revenues or expenses .. We also believe that Pro Forma EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non - cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance .. We use Same - Property NOI to compare the operating performance of our assets between periods .. It is an accepted and important measurement used by management, investors and analysts because it includes all property - level revenues from of the Company’s rental properties, less operating and maintenance expenses, real estate taxes and other property - specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods .. Same - Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company's properties .. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same - Property NOI may not be comparable to similarly titled measures employed by other companies .. |
| © CTO Realty Growth, Inc. | ctoreit.com References & Contacts 36 References and terms used in this presentation that are in addition to terms defined in the Non - GAAP Financial Measures include : ▪ This presentation has been published on April 28 , 2022 .. ▪ All information is as of March 31 , 2022 , unless otherwise noted .. ▪ Any calculation differences are assumed to be a result of rounding .. ▪ “ 2022 Guidance” is based on the 2022 Outlook provided in the Company’s First Quarter 2022 Operating Results press release filed on April 28 , 2022 .. ▪ “Alpine” or “PINE” refers to Alpine Income Property Trust, a publicly traded net lease REIT traded on the New York Stock Exchange under the ticker symbol PINE .. ▪ “Annualized Straight - line Base Rent”, “ABR” or “Rent” and the statistics based on ABR are calculated based on our current portfolio and represent straight - line rent calculated in accordance with GAAP .. ▪ “ 2022 Net Operating Income” or “ 2022 NOI” is budgeted 2022 property - level net operating income based on the Company’s portfolio as of March 31 , 2022 , plus the annualized current quarterly dividend and management fees from PINE based on the Company’s PINE ownership as of March 31 , 2022 .. ▪ “Credit Rated” is a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Associated of Insurance Commissioners (NAIC) (together, the “Major Rating Agencies”) .. An “Investment Grade Rated Tenant” or “IG” references a Credit Rated tenant or the parent of a tenant, or credit rating thereof with a rating of BBB - , Baa 3 or NAIC - 2 or higher from one or more of the Major Rating Agencies .. ▪ “Contractual Base Rent” or “CBR” represents the amount owed to the Company under the terms of its lease agreements at the time referenced .. ▪ “Dividend” or “Dividends”, subject to the required dividends to maintain our qualification as a REIT, are set by the Board of Directors and declared on a quarterly basis and there can be no assurances as to the likelihood or number of dividends in the future .. ▪ “Investment in Alpine Income Property Trust” or “Alpine Investment” or “PINE Ownership” is calculated based on the 2 , 052 , 497 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price .. ▪ “Leased Occupancy” refers to space that is currently leased but for which rent payments have not yet commenced .. ▪ “MSA” or “Metropolitan Statistical Area” is a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U .. S .. Office of Management and Budget .. The names of the MSA have been shortened for ease of reference .. ▪ “Net Debt” is calculated as our total long - term debt as presented on the face of our balance sheet ; plus financing costs, net of accumulated amortization and unamortized convertible debt discount ; less cash, restricted cash and cash equivalents .. ▪ “Net Operating Income” or “NOI” is revenues from all income properties less operating expense, maintenance expense, real estate taxes and rent expense .. ▪ “Total Enterprise Value” is calculated as the Company’s Total Common Shares Outstanding multiplied by the common stock price ; plus the par value of the Series A perpetual preferred equity outstanding and Net Debt .. ▪ “Total Common Shares Outstanding” equaled 6 , 011 , 611 shares .. Investor Inquiries : Matthew M .. Partridge Senior Vice President, Chief Financial Officer and Treasurer ( 407 ) 904 - 3324 mpartridge@ctoreit .. com |
| © CTO Realty Growth, Inc. | ctoreit.com Consolidated Statements of Operations 37 Three Months Ended March 31, 2022 March 31, 2021 Revenues Income Properties $ 15,168 $ 11,449 Management Fee Income 936 669 Interest Income from Commercial Loan and Master Lease Investments 718 701 Real Estate Operations 388 1,893 Total Revenues 17,210 14,712 Direct Cost of Revenues Income Properties (4,016) (2,917) Real Estate Operations (51) (82) Total Direct Cost of Revenues (4,067) (2,999) General and Administrative Expenses (3,043) (3,132) Depreciation and Amortization (6,369) (4,830) Total Operating Expenses (13,479) (10,961) Gain (Loss) on Disposition of Assets (245) 708 Other Gains and Income (Loss) (245) 708 Total Operating Income 3,489 4,459 Investment and Other Income (Loss) (1,894) 5,332 Interest Expense (1,902) (2,444) Income (Loss) Before Income Tax Benefit (310) 7,347 Income Tax Benefit 512 438 Net Income Attributable to the Company $ 202 $ 7,785 Distributions to Preferred Stockholders (1,195) — Net Income (Loss) Attributable to Common Stockholders $ (993) $ 7,785 Per Share Information: Basic and Diluted Net Income (Loss) Attributable to Common Stockholders $ (0.17) $ 1.32 Weighted Average Number of Common Shares: Basic and Diluted 5,908,892 5,879,085 Dividends Declared and Paid – Preferred Stock $ 0.40 $ — Dividends Declared and Paid – Common Stock $ 1.08 $ 1.00 CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited, in thousands, except share, per share and dividend data) |
| © CTO Realty Growth, Inc. | ctoreit.com Same - Property NOI 38 Three Months Ended March 31, 2022 March 31, 2021 Net Income Attributable to the Company $ 202 $ 7,785 (Gain) Loss on Disposition of Assets 245 (708) Depreciation and Amortization 6,369 4,830 Amortization of Intangibles to Lease Income (481) 396 Straight - Line Rent Adjustment 538 685 COVID - 19 Rent Repayments (27) (220) Other Income Property Related Non - Cash Amortization 38 121 Interest Expense 1,902 2,444 General and Administrative Expenses 3,043 3,132 Investment and Other Income (Loss) 1,894 (5,332) Income Tax Benefit (512) (438) Real Estate Operations Revenues (388) (1,893) Real Estate Operations Direct Cost of Revenues 51 82 Management Fee Income (936) (669) Interest Income from Commercial Loan and Master Lease Investments (718) (701) Less: Impact of Properties Not Owned the Full Reporting Period (5,171) (4,425) Cash Rental Income Received from Properties Presented as Commercial Loan and Master Lease Investments 364 360 Same - Property NOI $ 6,413 $ 5,449 Year - Over - Year Growth 17.7% CTO Realty Growth, Inc. Same - Property NOI Reconciliation (Unaudited, in thousands) |
| © CTO Realty Growth, Inc. | ctoreit.com Non - GAAP Financial Measures 39 Three Months Ended March 31, 2022 March 31, 2021 Net Income Attributable to the Company $ 202 $ 7,785 Add Back: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) — — Net Income Attributable to the Company, If - Converted $ 202 $ 7,785 Depreciation and Amortization 6,369 4,830 Gains (Loss) on Disposition of Assets 245 (708) Gain on Disposition of Other Assets (332) (1,827) Unrealized (Gain) Loss on Investment Securities 2,457 (4,834) Funds from Operations $ 8,941 $ 5,246 Distributions to Preferred Stockholders (1,195) — Funds from Operations Attributable to Common Stockholders $ 7,746 $ 5,246 Amortization of Intangibles to Lease Income 481 (396) Less: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) — — Core Funds from Operations Attributable to Common Stockholders $ 8,227 $ 4,850 Adjustments: Straight - Line Rent Adjustment (538) (685) COVID - 19 Rent Repayments 27 220 Other Non - Cash Amortization (139) (224) Amortization of Loan Costs and Discount on Convertible Debt 234 475 Non - Cash Compensation 906 958 Non - Recurring G&A — 93 Adjusted Funds from Operations Attributable to Common Stockholders $ 8,717 $ 5,687 FFO Attributable to Common Stockholders per Common Share – Diluted $ 1.31 $ 0.89 Core FFO Attributable to Common Stockholders per Common Share – Diluted $ 1.39 $ 0.82 AFFO Attributable to Common Stockholders per Common Share – Diluted $ 1.48 $ 0.97 CTO Realty Growth, Inc. Non - GAAP Financial Measures (Unaudited, in thousands, except per share data) (1) Interest related to the 2025 Convertible Senior Notes excluded from net income attributable to the Company to derive FFO effe cti ve January 1, 2022 due to the implementation of ASU 2020 - 06 which requires presentation on an if - converted basis, as the impact to net income attributable to common stockholders would be anti - dilutive. |
| © CTO Realty Growth, Inc. | ctoreit.com Net Debt to Pro Forma EBITDA 40 CTO Realty Growth, Inc. Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited, in thousands) March 31, 2022 Net Income Attributable to the Company $ 202 Depreciation and Amortization 6,369 Loss on Disposition of Assets 245 Gains on the Disposition of Other Assets (332) Unrealized Gain on Investment Securities (2,457) Distributions to Preferred Stockholders (1,195) Straight - Line Rent Adjustment (538) Amortization of Intangibles to Lease Income 481 Other Non - Cash Amortization (139) Amortization of Loan Costs and Discount on Convertible Debt 234 Non - Cash Compensation 906 Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 1,669 EBITDA $ 10,359 Annualized EBITDA $ 41,436 Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) 2,770 Pro Forma EBITDA $ 44,206 Total Long - Term Debt 298,079 Financing Costs, Net of Accumulated Amortization 1,272 Unamortized Convertible Debt Discount 483 Cash & Cash Equivalents (9,450) Restricted Cash (26,385) Net Debt $ 263,999 Net Debt to Pro Forma EBITDA 6.0x (1) Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activity during th e t hree months ended March 31, 2022. |
| REALTY GROWTH Crabby’s Oceanside & Landshark Bar and Grill Daytona Beach, FL |
| © CTO Realty Growth, Inc. | ctoreit.com REALTY GROWTH Supplemental Reporting Information Q1 2022 |
| © CTO Realty Growth, Inc. | ctoreit.com 1. First Quarter 2021 Earnings Release 3 2. Key Financial Information ▪ Consolidated Balance Sheets 11 ▪ Consolidated Statements of Operations 12 ▪ Non - GAAP Financial Measures 13 3. Capitalization & Dividends 16 4. Summary of Debt 17 5. Investments 18 6. Dispositions 19 7. Portfolio Detail 20 8. Leasing Summary 22 9. Lease Expirations 23 10. Top Tenant Summary 24 11. Geographic Diversification 25 12. Other Assets 26 13. 2022 Guidance 27 14. Contact Information & Research Coverage 28 15. Safe Harbor, Non - GAAP Financial Measures, and Definitions and Terms 29 Table of Contents |
| © CTO Realty Growth, Inc. | ctoreit.com Capitalization & Dividends $ and shares outstanding in thousands, except per share data. As of March 31, 2022, unless otherwise noted Equity Capitalization Common Shares Outstanding 6,012 Common Share Price $66.32 Total Common Equity Market Capitalization $398,690 Series A Preferred Shares Outstanding 3,000 Series A Preferred Par Value Per Share $25.00 Series A Preferred Par Value $75,000 Total Equity Capitalization $473,690 Debt Capitalization Total Debt Outstanding $299,834 Total Capitalization $773,524 Cash, Restricted Cash & Cash Equivalents $35,835 Total Enterprise Value $737,689 Dividends Paid Common Preferred Q2 2021 $1.00 - Q3 2021 $1.00 $0.37 Q4 2021 $1.00 $0.40 Q1 2022 $1.08 $0.40 Trailing Twelve Months Q1 2022 $4.08 $1.17 Q1 2022 Core FFO Per Diluted Share $1.39 Q1 2022 AFFO Per Diluted Share $1.48 Q1 2022 Core FFO Payout Ratio 77.7% Q1 2022 AFFO Payout Ratio 73.0% Dividend Yield Q1 2022 $1.08 $0.40 Annualized Q1 2022 Dividend $4.32 $1.59 Price Per Share as of March 31, 2022 $66.32 $25.15 Implied Dividend Yield 6.5% 6.3% 16 |
| © CTO Realty Growth, Inc. | ctoreit.com Debt Summary $ in thousands. As of March 31, 2022, unless otherwise noted. (1) See reconciliation as part of Non - GAAP Financial Measures in the Company’s First Quarter 2022 Earnings Release. Indebtedness Outstanding Face Value Interest Rate Maturity Date Type Revolving Credit Facility $66,000 30 - Day LIBOR + [1.35% – 1.95%] May 2023 Variable 2025 Convertible Senior Notes 51,034 3.88% April 2025 Fixed 2026 Term Loan 65,000 30 - Day LIBOR + [1.35% – 1.95%] March 2026 Fixed Mortgage Note 17,800 4.06% August 2026 Fixed 2027 Term Loan 100,000 30 - Day LIBOR + [1.35% – 1.95%] January 2027 Fixed Total / Wtd .. Avg. $299,834 2.36% Fixed vs. Variable Face Value Interest Rate % of Total Debt Total Fixed Rate Debt 233,834 2.52% 78% Total Variable Rate Debt 66,000 30 - Day LIBOR + [1.35% – 1.95%] 22% Total / Wtd .. Avg. $299,834 2.36% 100% Leverage Metrics Face Value of Debt $299,834 Cash, Restricted Cash & Cash Equivalents ($35,835) Net Debt $263,999 Total Enterprise Value $737,689 Net Debt to Total Enterprise Value 36% Net Debt to Pro Forma EBITDA (1) 6.0x 17 |
| © CTO Realty Growth, Inc. | ctoreit.com Investments $ in thousands. As of March 31, 2022. Property Acquisitions Market Type Date Acquired Square Feet Price Occupancy At Acq .. Price Plaza Shopping Center – Katy, TX Houston, TX Multi - Tenant Retail 3/3/2022 205,813 $39,100 95% Total Acquisitions 205,813 $39,100 18 Structured Investments Market Type Date Originated Capital Commitment Structure Phase II of The Exchange at Gwinnett – Buford, GA Atlanta, GA Grocery - Anchored Retail 1/26/2022 $8,700 First Mortgage Total Acquisitions $8,700 |
| © CTO Realty Growth, Inc. | ctoreit.com Property Market Type Date Sold Square Feet Price Gain (Loss) Party City – Oceanside, NY New York, NY Single Tenant Retail 1/7/2022 15,500 $6,949 ($60) The Carpenter Hotel – Austin, TX Austin, TX Hospitality Ground Lease 3/11/2022 73,508 17,095 (178) Total Dispositions 89,008 $24,044 ($238) Dispositions 19 $ in thousands. As of March 31, 2022. |
| © CTO Realty Growth, Inc. | ctoreit.com Portfolio Detail 20 Property Type Year Acquired/ Developed Square Feet In - Place Occupancy Leased Occupancy Cash ABR Cash ABR PSF Atlanta, GA Ashford Lane Multi - Tenant Retail 2020 283,732 71% 81% $6,018 $21.21 The Exchange at Gwinnett Multi - Tenant Retail 2021 69,265 90% 97% 2,010 $29.01 Total Atlanta, GA 352,997 75% 84% $8,028 $22.74 Jacksonville, FL The Strand at St. Johns Town Center Multi - Tenant Retail 2019 204,552 93% 95% $4,652 $22.74 245 Riverside Multi - Tenant Office 2015 136,853 93% 93% 2,620 $19.15 Firebirds Wood Fired Grill Single Tenant Retail 2018 6,948 100% 100% 298 $42.89 Chuy's Single Tenant Retail 2018 7,950 100% 100% 355 $44.65 Total Jacksonville, FL 356,303 93% 94% $7,925 $22.24 Dallas, TX The Shops at Legacy Multi - Tenant Mixed Use 2021 237,690 84% 93% $6,631 $27.90 Westcliff Shopping Center Multi - Tenant Retail 2017 136,185 60% 60% 489 $3.59 Total Dallas, TX 373,875 75% 81% $7,120 $19.04 Raleigh, NC Beaver Creek Crossings Multi - Tenant Retail 2021 320,434 96% 98% $5,222 $16.30 Phoenix, AZ Crossroads Town Center Multi - Tenant Retail 2020 244,843 100% 100% $4,854 $19.83 Albuquerque, NM Fidelity Single Tenant Office 2018 210,067 100% 100% $3,567 $16.98 Houston, TX Price Plaza Shopping Center Multi - Tenant Retail 2022 205,813 95% 95% $3,164 $15.37 Santa Fe, NM 125 Lincoln & 150 Washington Multi - Tenant Mixed Use 2021 136,638 73% 86% $2,658 $19.45 $ in thousands, except per square foot data. |
| © CTO Realty Growth, Inc. | ctoreit.com Portfolio Detail $ in thousands, except per square foot data. 21 Property Type Year Acquired/ Developed Square Feet In - Place Occupancy Leased Occupancy Cash ABR Cash ABR PSF Tampa, FL Sabal Pavilion Single Tenant Office 2020 120,500 100% 100% $2,199 $18.25 Salt Lake City, UT Jordan Landing Multi - Tenant Retail 2021 170,996 100% 100% $1,670 $9.77 Washington, DC General Dynamics Single Tenant Office 2019 64,319 100% 100% $1,580 $24.56 Las Vegas, NV Eastern Commons Multi - Tenant Retail 2021 133,304 100% 100% $1,539 $11.55 Miami, FL Westland Gateway Plaza Multi - Tenant Retail 2020 108,029 100% 100% $1,460 $13.52 Daytona Beach, FL Landshark Bar & Grill Single Tenant Retail 2018 6,264 100% 100% $628 $100.32 Crabby's Oceanside Single Tenant Retail 2018 5,780 100% 100% 273 $47.28 Total Daytona Beach, FL 12,044 100% 100% $901 $74.86 Orlando, FL Winter Park Office Multi - Tenant Mixed Use 2021 28,008 100% 100% $350 $12.50 Total Portfolio 2,838,170 91% 93% $52,238 $18.41 |
| © CTO Realty Growth, Inc. | ctoreit.com Leasing Summary $ and square feet in thousands, except per square foot data. 22 Renewals and Extensions Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 8 8 Square Feet 32.5 32.5 New Cash Rent PSF $31.57 $31.57 Tenant Improvements $368 $368 Leasing Commissions $36 $36 Weighted Average Term 6.2 6.2 New Leases Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 10 10 Square Feet 24.4 24.4 New Cash Rent PSF $31.32 $31.32 Tenant Improvements $691 $691 Leasing Commissions $335 $335 Weighted Average Term 8.9 8.9 All Leases Summary Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 18 18 Square Feet 56.9 56.9 New Cash Rent PSF $31.46 $31.46 Tenant Improvements $1,059 $1,059 Leasing Commissions $371 $371 Weighted Average Term 6.6 6.6 |
| © CTO Realty Growth, Inc. | ctoreit.com Lease Expiration Schedule $ and square feet in thousands. 23 Year Leases Expiring Expiring SF % of Total Cash ABR % of Total 2022 26 70 2.5% 1,839 3.5% 2023 28 184 6.5% 4,105 7.9% 2024 19 65 2.3% 1,772 3.4% 2025 21 135 4.8% 3,349 6.4% 2026 43 417 14.7% 7,534 14.4% 2027 30 370 13.0% 5,458 10.4% 2028 21 482 17.0% 9,673 18.5% 2029 18 238 8.4% 4,389 8.4% 2030 11 97 3.4% 1,905 3.6% 2031 26 88 3.1% 2,711 5.2% Thereafter 19 428 15.1% 9,501 18.2% Total 262 2,575 90.7% 52,238 100.0% Vacant 263 9.3% Total 2,838 100.0% |
| © CTO Realty Growth, Inc. | ctoreit.com Top Tenant Summary 24 Tenant/Concept Credit Rating (1) Leases Leased Square Feet % of Total Cash ABR % of Total Fidelity A+ 1 210 7.4% 3,567 6.8% Ford Motor Credit BB+ 1 121 4.2% 2,199 4.2% WeWork CCC+ 1 59 2.1% 1,939 3.7% General Dynamics A - 1 64 2.3% 1,580 3.0% At Home B 2 192 6.8% 1,546 3.0% Seritage Growth Properties Not Rated 1 108 3.8% 1,460 2.8% Ross/dd’s DISCOUNT BBB+ 4 106 3.7% 1,333 2.6% Best Buy BBB+ 2 82 2.9% 1,224 2.3% Darden Restaurants BBB 3 27 1.0% 1,207 2.3% Harkins Theatres Not Rated 1 56 2.0% 961 1.8% Regal Cinemas Not Rated 1 45 1.6% 948 1.8% The Hall at Ashford Lane Not Rated 1 17 0.6% 851 1.6% Hobby Lobby Not Rated 1 55 1.9% 715 1.4% Burlington BB+ 1 47 1.6% 699 1.3% PNC Bank A 2 10 0.4% 684 1.3% Landshark Bar & Grill Not Rated 1 6 0.2% 628 1.2% Raymond James & Associates BBB+ 2 24 0.8% 600 1.1% TJ Maxx/HomeGoods/Marshalls A 1 50 1.8% 526 1.0% Bob’s Discount Furniture Not Rated 1 42 1.5% 509 1.0% Seafood City Not Rated 1 32 1.1% 483 0.9% Other 233 1,222 43.0% 28,579 54.7% Total 262 2,575 90.7% 52,238 100.0% Vacant 263 9.3% Total 2,838 100.0% $ and square feet in thousands. (1) A credit rated, or investment grade rated tenant (rating of BBB - , NAIC - 2 or Baa3 or higher) is a tenant or the parent of a t enant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners (NAIC). |
| © CTO Realty Growth, Inc. | ctoreit.com Geographic Diversification 25 Markets Leases Square Feet % of Total Cash ABR % of Total Atlanta, GA 2 353 12.4% 8,028 15.4% Jacksonville, FL 4 356 12.6% 7,925 15.2% Dallas, TX 2 374 13.2% 7,119 13.6% Raleigh, NC 1 320 11.3% 5,222 10.0% Phoenix, AZ 1 245 8.6% 4,854 9.3% Albuquerque, NM 1 210 7.4% 3,567 6.8% Houston, TX 1 206 7.3% 3,164 6.1% Santa Fe, NM 1 137 4.8% 2,658 5.1% Tampa, FL 1 121 4.2% 2,199 4.2% Salt Lake City, UT 1 171 6.0% 1,670 3.2% Las Vegas, NV 1 64 2.3% 1,580 3.0% Washington, DC 1 133 4.7% 1,539 2.9% Miami, FL 1 108 3.8% 1,460 2.8% Daytona Beach, FL 2 12 0.4% 902 1.7% Orlando, FL 1 28 1.0% 350 0.7% Total 21 2,838 100.0% 52,238 100.0% States Properties Square Feet % of Total Cash ABR % of Total Florida 9 625 22.0% 12,835 24.6% Texas 3 580 20.4% 10,283 19.7% Georgia 2 353 12.4% 8,028 15.4% New Mexico 2 347 12.2% 6,225 11.9% North Carolina 1 320 11.3% 5,222 10.0% Arizona 1 245 8.6% 4,854 9.3% Utah 1 171 6.0% 1,670 3.2% Nevada 1 133 4.7% 1,539 2.9% Virginia 1 64 2.3% 1,580 3.0% Total 21 2,838 100.0% 52,238 100.0% $ and square feet in thousands. |
| © CTO Realty Growth, Inc. | ctoreit.com Other Assets $ and shares outstanding in thousands, except per share data. (1) As of March 31, 2022. 26 Investment Securities Shares & Operating Partnership Units Owned Value Per Share March 31, 2022 Estimated Value Annualized Dividend Per Share In - Place Annualized Dividend Income Alpine Income Property Trust 2,052 $18.80 $38,587 $1.08 $2,217 Structured Investments Type Origination Date Maturity Date Original Loan Amount Amount Outstanding Interest Rate 4311 Maple Avenue, Dallas, TX Mortgage Note October 2020 April 2023 $400 $400 7.50% 110 N. Beach St., Daytona Beach, FL Mortgage Note June 2021 December 2022 364 364 10.00% Phase II of The Exchange at Gwinnett Construction Loan January 2022 January 2024 8,700 — 7.25% Total Structured Investments $9,464 $764 7.37% Subsurface Interests Acreage Estimated Value Acres Available for Sale (1) 365,000 acres $6,000 Mitigation Credits and Rights State Credits Federal Credits Federal Credits Mitigation Credits 41.1 18.8 $3,700 Mitigation Credit Rights 257.6 156.4 21,000 Total Mitigation Credits 298.7 175.2 $24,700 |
| © CTO Realty Growth, Inc. | ctoreit.com 2022 Guidance $ and shares outstanding in millions, except per share data. (1) As of April 28, 2022. 27 Low High Acquisition & Structured Investments $200 - $250 Target Initial Investment Cash Yield 6.50% - 7.00% Dispositions $40 - $70 Target Disposition Cash Yield 5.25% - 6.50% Core FFO Per Diluted Share $4.55 - $4.80 AFFO Per Diluted Share $4.95 - $5.20 Weighted Average Diluted Shares Outstanding 6.1 - 6.3 The Company has increased its outlook for 2022 to take into account the Company’s first quarter performance and revised expectations regarding the Company’s investment activities, forecasted capital markets transactions, and the impact from implementation of certain accounting standards .. The Company’s outlook for 2022 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions .. The effect of the Company’s recently announced three - for - one stock split has not been accounted for in the Company’s revised guidance .. |
| © CTO Realty Growth, Inc. | ctoreit.com Contact Information & Research Coverage Contact Information Corporate Office Locations Investor Relations Transfer Agent New York Stock Exchange 369 N. New York Ave., 3 rd Floor Winter Park, FL 32789 1140 N. Williamson Blvd., Suite 140 Daytona Beach, FL 32114 Matt Partridge SVP, CFO & Treasurer (407) 904 - 3324 mpartridge@ctoreit.com Computershare Trust Company, N.A. (800) 368 - 5948 www.computershare.com Ticker Symbol: CTO www.ctoreit.com Research Analyst Coverage Institution Coverage Analyst Email Phone B. Riley Craig Kucera craigkucera@brileyfin.com (703) 312 - 1635 BTIG Michael Gorman mgorman@btig.com (212) 738 - 6138 Compass Point Merrill Ross mross@compasspointllc.com (202) 534 - 1392 Janney Rob Stevenson robstevenson@janney.com (646) 840 - 3217 Jones Research Jason Stewart jstewart@jonestrading.com (646) 465 - 9932 28 |
| © CTO Realty Growth, Inc. | ctoreit.com Safe Harbor 29 Certain statements contained in this presentation (other than statements of historical fact) are forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended and Section 21 E of the Securities Exchange Act of 1934 , as amended .. Forward - looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words .. Although forward - looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward - looking statements .. Such factors may include, but are not limited to : the Company’s ability to remain qualified as a REIT ; the Company’s exposure to U .. S .. federal and state income tax law changes, including changes to the REIT requirements ; general adverse economic and real estate conditions ; macroeconomic and geopolitical factors, including but not limited to inflationary pressures, interest rate volatility, global supply chain disruptions, and ongoing geopolitical war ; the ultimate geographic spread, severity and duration of pandemics such as the COVID - 19 Pandemic and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations ; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business ; the loss or failure, or decline in the business or assets of PINE ; the completion of 1031 exchange transactions ; the availability of investment properties that meet the Company’s investment goals and criteria ; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales ; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10 - K for the fiscal year ended December 31 , 2021 and other risks and uncertainties discussed from time to time in the Company’s filings with the U .. S .. Securities and Exchange Commission .. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management .. Readers are cautioned not to place undue reliance on these forward - looking statements, which speak only as of the date of this presentation .. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances .. |
| © CTO Realty Growth, Inc. | ctoreit.com Non - GAAP Financial Measures 30 Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) .. We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and Same - Property Net Operating Income (“Same - Property NOI”), each of which are non - GAAP financial measures .. We believe these non - GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs .. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same - Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements ; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures .. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT .. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write - downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries .. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, impact fee credits, subsurface sales, and land sales, in addition to the mark - to - market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive .. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above - and below - market lease related intangibles, and other unforecastable market - or transaction - driven non - cash items .. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non - cash revenues and expenses such as straight - line rental revenue, non - cash compensation, and other non - cash amortization, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive .. Such items may cause short - term fluctuations in net income but have no impact on operating cash flows or long - term operating performance .. We use AFFO as one measure of our performance when we formulate corporate goals .. To derive Pro Forma EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write - downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, non - cash revenues and expenses such as straight - line rental revenue, amortization of deferred financing costs, above - and below - market lease related intangibles, non - cash compensation, and other non - cash income or expense .. Cash interest expense is also excluded from Pro Forma EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities .. |
| © CTO Realty Growth, Inc. | ctoreit.com Non - GAAP Financial Measures 31 To derive Same - Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude extraordinary items (as defined by GAAP), gain or loss on disposition of assets, gain or loss on extinguishment of debt, impairment charges, and depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, if any, non - cash revenues and expenses such as above - and below - market lease related intangibles, straight - line rental revenue, and other non - cash income or expense .. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct cost of revenues, management fee income, and interest income from commercial loan and master lease investments are also excluded from Same - Property NOI .. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented .. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loan and master lease investments in accordance with GAAP is also used in lieu of the interest income equivalent .. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions .. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non - cash revenues or expenses .. We also believe that Pro Forma EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non - cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance .. We use Same - Property NOI to compare the operating performance of our assets between periods .. It is an accepted and important measurement used by management, investors and analysts because it includes all property - level revenues from of the Company’s rental properties, less operating and maintenance expenses, real estate taxes and other property - specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods .. Same - Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company's properties .. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same - Property NOI may not be comparable to similarly titled measures employed by other companies .. |
| © CTO Realty Growth, Inc. | ctoreit.com Definitions & Terms 32 References and terms used in this presentation that are in addition to terms defined in the Non - GAAP Financial Measures include : ▪ This presentation has been published on April 28 , 2022 .. ▪ All information is as of March 31 , 2022 , unless otherwise noted .. ▪ Any calculation differences are assumed to be a result of rounding .. ▪ “ 2022 Guidance” is based on the 2022 Outlook provided in the Company’s First Quarter 2022 Operating Results press release filed on April 28 , 2022 .. ▪ “Alpine” or “PINE” refers to Alpine Income Property Trust, a publicly traded net lease REIT traded on the New York Stock Exchange under the ticker symbol PINE .. ▪ “Annualized Straight - line Base Rent”, “ABR” or “Rent” and the statistics based on ABR are calculated based on our current portfolio and represent straight - line rent calculated in accordance with GAAP .. ▪ “ 2022 Net Operating Income” or “ 2022 NOI” is budgeted 2022 property - level net operating income based on the Company’s portfolio as of March 31 , 2022 , plus the annualized current quarterly dividend and management fees from PINE based on the Company’s PINE ownership as of March 31 , 2022 .. ▪ “Credit Rated” is a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Associated of Insurance Commissioners (NAIC) (together, the “Major Rating Agencies”) .. An “Investment Grade Rated Tenant” or “IG” references a Credit Rated tenant or the parent of a tenant, or credit rating thereof with a rating of BBB - , Baa 3 or NAIC - 2 or higher from one or more of the Major Rating Agencies .. ▪ “Contractual Base Rent” or “CBR” represents the amount owed to the Company under the terms of its lease agreements at the time referenced .. ▪ “Dividend” or “Dividends”, subject to the required dividends to maintain our qualification as a REIT, are set by the Board of Directors and declared on a quarterly basis and there can be no assurances as to the likelihood or number of dividends in the future .. ▪ “Investment in Alpine Income Property Trust” or “Alpine Investment” or “PINE Ownership” is calculated based on the 2 , 052 , 497 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price .. ▪ “Leased Occupancy” refers to space that is currently leased but for which rent payments have not yet commenced .. ▪ “MSA” or “Metropolitan Statistical Area” is a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U .. S .. Office of Management and Budget .. The names of the MSA have been shortened for ease of reference .. ▪ “Net Debt” is calculated as our total long - term debt as presented on the face of our balance sheet ; plus financing costs, net of accumulated amortization and unamortized convertible debt discount ; less cash, restricted cash and cash equivalents .. ▪ “Net Operating Income” or “NOI” is revenues from all income properties less operating expense, maintenance expense, real estate taxes and rent expense .. ▪ “Total Enterprise Value” is calculated as the Company’s Total Common Shares Outstanding multiplied by the common stock price ; plus the par value of the Series A perpetual preferred equity outstanding and Net Debt .. ▪ “Total Common Shares Outstanding” equaled 6 , 011 , 611 shares .. |
