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 October 27, 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 September 30, 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 October 27, 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 September 30, 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: October 27, 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 |
WINTER PARK, FL – October 27, 2022 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended September 30, 2022.
Select Highlights
CEO Comments
Page 1
“We’ve had a very strong few months of asset recycling as we continue to make good progress refining our high-quality, retail-focused portfolio. Our newly built grocery-anchored Madison Yards (Publix) asset in Atlanta, Georgia, and our grocery-anchored West Broad Village (Whole Foods) property in Richmond, Virginia are excellent additions as we continue to add exposure to well-performing markets and attractive demographics,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “These new grocery-anchored acquisitions, combined with our 7.6% current dividend yield, accretive dispositions, 21.5% year-to-date same-store NOI growth, strong leasing activity, newly expanded credit facility and fixed-rate term loan have us well-positioned to drive attractive risk-adjusted cash flows for our shareholders. As we look forward into 2023, we’re confident our shadow disposition pipeline of single tenant office properties and more than $200 million of available liquidity gives us ample capacity to be opportunistic in the quickly evolving transaction market.”
Quarterly Financial Results Highlights
The tables below provide a summary of the Company’s operating results for the three months ended September 30, 2022:
For the Three Months Ended September 30, 2022 |
| For the Three Months Ended September 30, 2021 | | Variance to Comparable Period in the Prior Year | ||||||||||
Net Income Attributable to the Company | $ | 4,817 | | $ | 23,947 | | $ | (19,130) | (79.9%) | |||||
Net Income Attributable to Common Stockholders | $ | 3,622 | | $ | 22,818 | | $ | (19,196) | (84.1%) | |||||
Net Income per Diluted Share Attributable to Common Stockholders (1) | $ | 0.19 | | $ | 1.29 | | $ | (1.10) | (85.3%) | |||||
| | | | | | | | | | |||||
Core FFO Attributable to Common Stockholders (2) | $ | 8,684 | | $ | 5,985 | | $ | 2,699 | 45.1% | |||||
Core FFO per Common Share – Diluted (2) | $ | 0.47 | | $ | 0.34 | | $ | 0.13 | 38.2% | |||||
| | | | | | | | | | |||||
AFFO Attributable to Common Stockholders (2) | $ | 8,957 | | $ | 6,422 | | $ | 2,535 | 39.5% | |||||
AFFO per Common Share – Diluted (2) | $ | 0.49 | | $ | 0.36 | | $ | 0.13 | 36.1% | |||||
| | | | | | | | | | |||||
Dividends Declared and Paid, per Preferred Share | $ | 0.40 | $ | 0.38 | | $ | 0.02 | 5.9% | ||||||
Dividends Declared and Paid, per Common Share | $ | 0.38 | | $ | 0.33 | | $ | 0.05 | 14.0% | |||||
(1) | The denominator for this measure in 2022 includes the impact of 3.1 million 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 for the quarter ended September 30, 2022 was 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 (Loss) 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. |
Year-to-Date Financial Results Highlights
The tables below provide a summary of the Company’s operating results for the nine months ended September 30, 2022:
(in thousands, except per share data) | For the Nine Months Ended September 30, 2022 |
| For the Nine Months Ended September 30, 2021 | | Variance to Comparable Period in the Prior Year | |||||||||
Net Income Attributable to the Company | $ | 6,237 | | $ | 28,008 | | $ | (21,771) | (77.7%) | |||||
Net Income Attributable to Common Stockholders | $ | 2,651 | | $ | 26,879 | | $ | (24,228) | (90.1%) | |||||
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Net Income per Diluted Share Attributable to Common Stockholders (1) | $ | 0.15 | | $ | 1.52 | | $ | (1.37) | (90.1%) | ||||
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Core FFO Attributable to Common Stockholders (2) | $ | 25,396 | | $ | 16,053 | | $ | 9,343 | 58.2% | ||||
Core FFO per Common Share – Diluted (2) | $ | 1.41 | | $ | 0.91 | | $ | 0.50 | 54.9% | ||||
| | | | | | | | | | ||||
AFFO Attributable to Common Stockholders (2) | $ | 26,564 | | $ | 18,403 | | $ | 8,161 | 44.3% | ||||
AFFO per Common Share – Diluted (2) | $ | 1.47 | | $ | 1.04 | | $ | 0.43 | 41.3% | ||||
| | | | | | | | | | ||||
Dividends Declared and Paid, per Preferred Share | $ | 1.20 | $ | 0.38 | | $ | 0.82 | 217.7% | |||||
Dividends Declared and Paid, per Common Share | $ | 1.11 | | $ | 1.00 | | $ | 0.11 | 11.3% | ||||
(1) | The denominator for this measure in 2022 excludes the impact of 3.1 million 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. |
Investments
During the three months ended September 30, 2022, the Company acquired Madison Yards, a 162,500 square foot grocery-anchored property located in the Inman Park/Reynoldstown submarket along the Memorial Drive corridor of Atlanta, Georgia for a purchase price of $80.2 million. The property is 99% occupied, anchored by Publix and AMC Theatres, includes a well-crafted mix of retailers and restaurants, including AT&T, First Watch, and Orangetheory Fitness. The purchase price represents a going-in cap rate below the range of the Company’s prior guidance for initial cash yields.
During the nine months ended September 30, 2022, the Company acquired two multi-tenant retail properties for total income property acquisition volume of $119.3 million and originated three structured investments to provide $57.7 million of funding towards three retail and mixed-use properties. These acquisitions and structured investments represent a blended weighted average going-in yield of 7.2%.
Subsequent to quarter-end, the Company acquired West Broad Village, a 392,000 square foot grocery-anchored lifestyle property located in the Short Pump submarket of Richmond, Virginia for a purchase price of $93.9 million. The property, anchored by Whole Foods and REI, is 83% occupied and comprised of approximately 315,600 square feet of retail and 76,400 square feet of complementary office and includes an attractive combination of national and local tenants spanning the grocery, food & beverage, entertainment, education, home décor, childcare and medical sectors. The purchase price represents a going-in cap rate above the range of the Company’s prior guidance for initial cash yields.
Dispositions
During the three months ended September 30, 2022, the Company sold two single tenant retail properties, its sole remaining multi-tenant office property, and one multi-tenant retail property in Hialeah, Florida that was classified as a commercial loan investment due to the tenant’s repurchase option. Total disposition volume was $57.0 million at a weighted average exit cap rate of 6.3%, generating total gains of $5.0 million.
During the nine months ended September 30, 2022, the Company sold six properties, two of which were classified as a commercial loan investment due to the respective tenants’ repurchase options, for $81.1 million at a weighted average exit cap rate of 6.2%.
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Income Property Portfolio
The Company’s income property portfolio consisted of the following as of September 30, 2022:
Asset Type |
| # of Properties |
| Square Feet |
| Weighted Average Remaining Lease Term |
Single Tenant |
| 5 |
| 407 |
| 5.9 years |
Multi-Tenant |
| 13 |
| 2,337 |
| 6.6 years |
Total / Weighted Average Lease Term |
| 18 |
| 2,744 |
| 6.5 years |
Property Type |
| # of Properties |
| Square Feet |
| % of Cash Base Rent |
Retail |
| 12 |
| 1,944 |
| 67.3% |
Office | | 3 | | 395 | | 13.8% |
Mixed-Use | | 3 | | 405 | | 18.9% |
Total / Weighted Average Lease Term |
| 18 |
| 2,744 |
| 100.0% |
Leased Occupancy | 94.4% | | |
Economic Occupancy | 91.8% | | |
Physical Occupancy | 90.4% | | |
Square feet in thousands.
Operational Highlights
The Company’s Same-Property NOI totaled $8.5 million during the third quarter of 2022, an increase of 12.0% over the comparable prior year period, as presented in the following table.
(in thousands) | For the Three Months Ended September 30, 2022 |
| For the Three Months Ended September 30, 2021 | | Variance to Comparable Period in the Prior Year | ||||
Single Tenant | $ | 1,920 | | $ | 1,746 | | $ | 174 | 10.0% |
Multi-Tenant | | 6,545 | | | 5,815 | | | 730 | 12.6% |
Total | $ | 8,465 | | $ | 7,561 | | $ | 904 | 12.0% |
During the third quarter of 2022, the Company signed leases totaling 75,231 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 | | 43.4 | | 8.7 years | | $36.14 | | $ | 3,025 | | $ | 1,033 |
Renewals & Extensions |
| 31.8 | | 5.8 years | | $29.62 | | $ | — | | $ | 77 |
Total / Weighted Average |
| 75.2 | | 7.6 years | | $33.39 | | $ | 3,025 | | $ | 1,110 |
In thousands except for per square foot and lease term data.
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Subsurface Interests and Mitigation Credits
During the three months ended September 30, 2022, the Company sold approximately 1,500 acres of subsurface oil, gas, and mineral rights for $0.7 million, resulting in aggregate gains of $0.7 million.
During the nine months ended September 30, 2022, the Company sold approximately 14,582 acres of subsurface oil, gas and mineral rights for $1.6 million, resulting in a gain on the sale of $1.5 million. As of September 30, 2022, the Company owns full or fractional subsurface oil, gas, and mineral interests underlying approximately 355,000 “surface” acres of land owned by others in 19 counties in Florida.
During the three months ended September 30, 2022, the Company sold approximately 24.7 state mitigation credits for $2.3 million, resulting in aggregate gains of $0.7 million.
During the nine months ended September 30, 2022, the Company sold approximately 26.6 state mitigation credits for $2.6 million, resulting in a gain on the sale of $0.8 million.
Capital Markets and Balance Sheet
During the quarter ended September 30, 2022, the Company completed the following notable capital markets activity:
| ◾ | On September 20, 2022, the Company amended its senior unsecured Credit Facility. The Credit Facility was increased to $565 million and is comprised of a $300 million unsecured revolving credit facility, a new $100 million unsecured 2028 term loan, and the Company’s existing $165 million of unsecured term loans (altogether, the “Credit Facility”). The Credit Facility includes structural changes to certain financial covenants, a sustainability-linked pricing component that reduces the applicable interest rate margin if the Company meets certain sustainability performance targets, and an accordion option that allows the Company to request additional commitments up to a total of $750 million. |
| ◾ | Issued 565,687 common shares under its ATM offering program at a weighted average gross price of $22.02 per share, for total net proceeds of $12.3 million. |
| ◾ | Repurchased 85,694 shares for approximately $1.6 million at a weighted average gross price of $19.17 per share. |
| ◾ | Completed a three-for-one stock split and began trading at the post-split price on July 1, 2022. The stock split was effected in the form of a stock dividend of two additional shares of common stock for each outstanding share of common stock held as of the record date for the stock dividend. |
The following table provides a summary of the Company’s long-term debt, at face value, as of September 30, 2022:
| Principal |
| Interest Rate |
| Maturity Date | |
Revolving Credit Facility |
| $38.5 million |
| SOFR + 10 bps + [1.25% – 2.20%] |
| January 2027 |
2025 Convertible Senior Notes |
| $51.0 million |
| 3.875% |
| April 2025 |
2026 Term Loan (1) |
| $65.0 million |
| SOFR + 10 bps + [1.25% – 2.20%] |
| March 2026 |
2027 Term Loan (2) |
| $100.0 million |
| SOFR + 10 bps + [1.25% – 2.20%] |
| January 2027 |
2028 Term Loan (3) | | $100.0 million |
| SOFR + 10 bps + [1.20% – 2.15%] |
| January 2028 |
Mortgage Note (4) |
| $17.8 million |
| 4.06% |
| August 2026 |
Total Debt / Weighted Average Interest Rate |
| $372.3 million |
| 3.44% |
|
|
(1) | The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 0.26% plus the 10 bps SOFR adjustment plus the applicable spread. |
(2) | The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap rate of 0.64% plus the 10 bps SOFR adjustment plus the applicable spread. |
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(3) | The Company entered into interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjustment plus the applicable spread. |
(4) | Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. |
As of September 30, 2022, the Company’s net debt to Pro Forma EBITDA was 6.4 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 3.4 times. As of September 30, 2022, the Company’s net debt to total enterprise value was 43.2%. 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.
Dividends
On August 22, 2022, the Company announced a cash dividend on its common stock and Series A Preferred stock for the third quarter of 2022 of $0.38 per share and $0.40 per share, respectively, payable on September 30, 2022 to stockholders of record as of the close of business on September 12, 2022. The third quarter 2022 common stock cash dividend represents a 14.0% increase over the comparable prior year period quarterly dividend and a payout ratio of 80.9% and 77.6% of the Company’s third 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 year-to-date performance and revised expectations regarding the Company’s investment activities, forecasted capital markets transactions, leasing activity, and other significant assumptions.
The Company’s increased outlook for 2022 is as follows:
| 2022 Revised Outlook Range | | Change from Prior Outlook | ||||
| Low | | High | | Low | | High |
Acquisition of Income Producing Assets | $271 million | to | $271 million | | $21 million | to | ($4) million |
Target Investment Initial Cash Yield | 7.25% | to | 7.25% | | 20 bps | to | 0 bps |
Disposition of Assets | $81 million | to | $83 million | | $31 million | to | $3 million |
Target Disposition Cash Yield | 6.15% | to | 6.25% | | (10) bps | to | (50) bps |
| | | | | | | |
Core FFO Per Diluted Share | $1.71 | to | $1.74 | | $0.13 | to | $0.10 |
AFFO Per Diluted Share | $1.79 | to | $1.82 | | $0.09 | to | $0.06 |
| | | | | | | |
Weighted Average Diluted Shares Outstanding | 18.2 million | to | 18.2 million | | (0.1) million | to | (0.3) million |
3rd Quarter Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter ended September 30, 2022 on Friday, October 28, 2022, at 9:00 AM ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.ctoreit.com or at the link provided in the event details below. To access the call by phone, please go to the link provided in the event details below and you will be provided with dial-in details.
Webcast: https://edge.media-server.com/mmc/p/haf26ajs
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Dial-In: https://register.vevent.com/register/BI7d526face25a498fb3ea12784d73ae34
We encourage participants to dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.ctoreit.com.
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 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”),
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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 attributable to the Company 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 loans and 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 loans and 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
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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 the Company’s 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) |
| December 31, | ||
ASSETS | | | | | | |
Real Estate: | | | | | | |
Land, at Cost | | $ | 209,298 | | $ | 189,589 |
Building and Improvements, at Cost | | | 377,758 | | | 325,418 |
Other Furnishings and Equipment, at Cost | | | 746 | | | 707 |
Construction in Process, at Cost | | | 10,717 | | | 3,150 |
Total Real Estate, at Cost | | | 598,519 | | | 518,864 |
Less, Accumulated Depreciation | | | (31,278) | | | (24,169) |
Real Estate—Net | | | 567,241 | | | 494,695 |
Land and Development Costs | | | 685 | | | 692 |
Intangible Lease Assets—Net | | | 87,671 | | | 79,492 |
Assets Held for Sale | | | — | | | 6,720 |
Investment in Alpine Income Property Trust, Inc. | | | 35,260 | | | 41,037 |
Mitigation Credits | | | 2,846 | | | 3,702 |
Mitigation Credit Rights | | | 19,999 | | | 21,018 |
Commercial Loans and Investments | | | 46,201 | | | 39,095 |
Cash and Cash Equivalents | | | 9,532 | | | 8,615 |
Restricted Cash | | | 37,292 | | | 22,734 |
Refundable Income Taxes | | | 448 | | | 442 |
Deferred Income Taxes—Net | | | 61 | | | — |
Other Assets | | | 38,536 | | | 14,897 |
Total Assets | | $ | 845,772 | | $ | 733,139 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Liabilities: | | | | | | |
Accounts Payable | | $ | 1,136 | | $ | 676 |
Accrued and Other Liabilities | | | 18,149 | | | 13,121 |
Deferred Revenue | | | 5,840 | | | 4,505 |
Intangible Lease Liabilities—Net | | | 5,995 | | | 5,601 |
Deferred Income Taxes—Net | | | — | | | 483 |
Long-Term Debt | | | 370,248 | | | 278,273 |
Total Liabilities | | | 401,368 | | | 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 September 30, 2022 and December 31, 2021 | | | 30 | | | 30 |
Common Stock – 500,000,000 shares authorized; $0.01 par value, 18,796,612 shares issued and outstanding at September 30, 2022; and 17,748,678 shares issued and outstanding at December 31, 2021 | | | 188 | | | 60 |
Additional Paid-In Capital | | | 97,419 | | | 85,414 |
Retained Earnings | | | 329,317 | | | 343,459 |
Accumulated Other Comprehensive Income | | | 17,450 | | | 1,517 |
Total Stockholders’ Equity | | | 444,404 | | | 430,480 |
Total Liabilities and Stockholders’ Equity | | $ | 845,772 | | $ | 733,139 |
Page 10
CTO Realty Growth, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share, per share and dividend data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | | September 30, | | September 30, | ||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||
Revenues | | | | | | | | | | | | |
Income Properties | | $ | 17,694 | | $ | 13,734 | | $ | 49,229 | | $ | 36,757 |
Management Fee Income | | | 951 | | | 940 | | | 2,835 | | | 2,361 |
Interest Income From Commercial Loans and Investments | | | 1,323 | | | 726 | | | 3,331 | | | 2,136 |
Real Estate Operations | | | 3,149 | | | 1,177 | | | 4,395 | | | 4,318 |
Total Revenues | | | 23,117 | | | 16,577 | | | 59,790 | | | 45,572 |
Direct Cost of Revenues | | | | | | | | | | | | |
Income Properties | | | (5,115) | | | (3,984) | | | (13,943) | | | (9,688) |
Real Estate Operations | | | (1,661) | | | (252) | | | (1,940) | | | (867) |
Total Direct Cost of Revenues | | | (6,776) | | | (4,236) | | | (15,883) | | | (10,555) |
General and Administrative Expenses | | | (3,253) | | | (2,680) | | | (8,972) | | | (8,477) |
Impairment Charges | | | — | | | — | | | — | | | (16,527) |
Depreciation and Amortization | | | (7,305) | | | (5,567) | | | (20,401) | | | (15,428) |
Total Operating Expenses | | | (17,334) | | | (12,483) | | | (45,256) | | | (50,987) |
Gain on Disposition of Assets | | | 4,973 | | | 22,666 | | | 4,728 | | | 28,106 |
Loss on Extinguishment of Debt | | | — | | | — | | | — | | | (641) |
Other Gains and Income | | | 4,973 | | | 22,666 | | | 4,728 | | | 27,465 |
Total Operating Income | | | 10,756 | | | 26,760 | | | 19,262 | | | 22,050 |
Investment and Other Income (Loss) | | | (3,065) | | | (797) | | | (6,270) | | | 8,438 |
Interest Expense | | | (3,037) | | | (1,986) | | | (7,216) | | | (6,851) |
Income Before Income Tax Benefit (Expense) | | | 4,654 | | | 23,977 | | | 5,776 | | | 23,637 |
Income Tax Benefit (Expense) | | | 163 | | | (30) | | | 461 | | | 4,371 |
Net Income Attributable to the Company | | | 4,817 | | | 23,947 | | | 6,237 | | | 28,008 |
Distributions to Preferred Stockholders | | | (1,195) | | | (1,129) | | | (3,586) | | | (1,129) |
Net Income Attributable to Common Stockholders | | $ | 3,622 | | $ | 22,818 | | $ | 2,651 | | $ | 26,879 |
| | | | | | | | | | | | |
Per Share Attributable to Common Stockholders: | | | | | | | | | | | | |
Basic Net Income per Share | | $ | 0.20 | | $ | 1.29 | | $ | 0.15 | | $ | 1.52 |
Diluted Net Income per Share | | $ | 0.19 | | $ | 1.29 | | $ | 0.15 | | $ | 1.52 |
| | | | | | | | | | | | |
Weighted Average Number of Common Shares | | | | | | | | | | | | |
Basic | | | 18,386,435 | | | 17,703,284 | | | 18,044,299 | | | 17,678,701 |
Diluted | | | 21,505,460 | | | 17,703,284 | | | 18,044,299 | | | 17,678,701 |
| | | | | | | | | | | | |
Dividends Declared and Paid – Preferred Stock | | $ | 0.40 | | $ | 0.38 | | $ | 1.20 | | $ | 0.38 |
Dividends Declared and Paid – Common Stock | | $ | 0.38 | | $ | 0.33 | | $ | 1.11 | | $ | 1.00 |
Page 11
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Same-Property NOI Reconciliation
(Unaudited)
| Three Months Ended | |||||
Net Income Attributable to the Company | $ | 4,817 |
| $ | 23,947 | |
Gain on Disposition of Assets | | (4,973) | | | (22,666) | |
Depreciation and Amortization per Income Statement | | 7,305 | | | 5,567 | |
Amortization of Intangibles to Lease Income | | (507) | | | 86 | |
Straight-Line Rent Adjustment | | 600 | | | 669 | |
COVID-19 Rent Deferrals | | (26) | | | (84) | |
Accretion of Tenant Contribution | | 38 | | | 38 | |
Interest Expense | | 3,037 | | | 1,986 | |
General and Administrative Expenses | | 3,253 | | | 2,680 | |
Investment and Other Loss (Income) | | 3,065 | | | 797 | |
Income Tax Benefit (Expense) | | (163) | | | 30 | |
Real Estate Operations Revenues | | (3,149) | | | (1,177) | |
Real Estate Operations Direct Cost of Revenues | | 1,661 | | | 252 | |
Management Fee Income | | (951) | | | (940) | |
Interest Income from Commercial Loans and Investments | | (1,323) | | | (726) | |
Less: Impact of Properties Not Owned for the Full Reporting Period | | (4,219) | | | (2,898) | |
Same-Property NOI | $ | 8,465 |
| $ | 7,561 | |
Page 12
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, 2022 | | September 30, 2021 | | September 30, 2022 | | September 30, 2021 | ||||
Net Income Attributable to the Company | | $ | 4,817 | | $ | 23,947 | | $ | 6,237 | | $ | 28,008 |
Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) | | | 539 | | | — | | | — | | | — |
Net Income Attributable to the Company, If-Converted | | $ | 5,356 | | $ | 23,947 | | | 6,237 | | | 28,008 |
Depreciation and Amortization of Real Estate | | | 7,283 | | | 5,567 | | | 20,359 | | | 15,428 |
Gains on Disposition of Assets | | | (4,973) | | | (22,666) | | | (4,728) | | | (28,106) |
Gains on Disposition of Other Assets | | | (1,509) | | | (974) | | | (2,473) | | | (3,549) |
Impairment Charges, Net | | | — | | | — | | | — | | | 12,474 |
Unrealized Loss (Gain) on Investment Securities | | | 3,754 | | | 1,326 | | | 8,102 | | | (6,894) |
Funds from Operations | | $ | 9,911 | | $ | 7,200 | | $ | 27,497 | | $ | 17,361 |
Distributions to Preferred Stockholders | | | (1,195) | | | (1,129) | | | (3,586) | | | (1,129) |
Funds From Operations Attributable to Common Stockholders | | $ | 8,716 | | $ | 6,071 | | $ | 23,911 | | $ | 16,232 |
Loss on Extinguishment of Debt | | | — | | | — | | | — | | | 641 |
Amortization of Intangibles to Lease Income | | | 507 | | | (86) | | | 1,485 | | | (820) |
Less: Effect of Dilutive Interest Related to 2025 Notes (1) | | | (539) | | | — | | | — | | | — |
Core Funds From Operations Attributable to Common Stockholders | | $ | 8,684 | | $ | 5,985 | | $ | 25,396 | | $ | 16,053 |
Adjustments: | | | | | | | | | | | | |
Straight-Line Rent Adjustment | | | (600) | | | (669) | | | (1,645) | | | (1,844) |
COVID-19 Rent Repayments | | | 26 | | | 84 | | | 79 | | | 738 |
Other Depreciation and Amortization | | | (29) | | | (154) | | | (199) | | | (528) |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 64 | | | 442 | | | 510 | | | 1,395 |
Non-Cash Compensation | | | 812 | | | 734 | | | 2,423 | | | 2,434 |
Non-Recurring G&A | | | — | | | — | | | — | | | 155 |
Adjusted Funds From Operations Attributable to Common Stockholders | | $ | 8,957 | | $ | 6,422 | | $ | 26,564 | | $ | 18,403 |
| | | | | | | | | | | | |
FFO Attributable to Common Stockholders per Common Share – Diluted | | $ | 0.41 | | $ | 0.34 | | $ | 1.33 | | $ | 0.92 |
Core FFO Attributable to Common Stockholders per Common Share – Diluted | | $ | 0.47 | | $ | 0.34 | | $ | 1.41 | | $ | 0.91 |
AFFO Attributable to Common Stockholders per Common Share – Diluted | | $ | 0.49 | | $ | 0.36 | | $ | 1.47 | | $ | 1.04 |
(1) | A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, upon adoption of ASU 2020-06 effective January 1, 2022, were included in the computation of diluted net income per share attributable to common stockholders for the three months ended September 30, 2022. |
A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, were not included in the computation of diluted net income per share attributable to common stockholders for the nine months ended September 30, 2022 because they were antidilutive to the net income of under $2.6 million.
Page 13
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 | $ | 4,817 |
Depreciation and Amortization of Real Estate | 7,283 | |
Gain on Disposition of Assets | | (4,973) |
Gain on Disposition of Other Assets |
| (1,509) |
Unrealized Loss on Investment Securities |
| 3,754 |
Distributions to Preferred Stockholders | | (1,195) |
Straight-Line Rent Adjustment |
| (600) |
Amortization of Intangibles to Lease Income | 507 | |
Other Non-Cash Amortization |
| (29) |
Amortization of Loan Costs and Discount on Convertible Debt |
| 64 |
Non-Cash Compensation |
| 812 |
Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt |
| 2,819 |
EBITDA | $ | 11,750 |
| | |
Annualized EBITDA | $ | 47,000 |
Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) | | 3,834 |
Pro Forma EBITDA | $ | 50,834 |
| | |
Total Long-Term Debt | | 370,248 |
Financing Costs, Net of Accumulated Amortization | | 1,682 |
Unamortized Convertible Debt Discount | | 404 |
Cash & Cash Equivalents | | (9,532) |
Restricted Cash | | (37,292) |
Net Debt | $ | 325,510 |
| | |
Net Debt to Pro Forma EBITDA | 6.4x | |
| | |
(1) | Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activity during the three months ended September 30, 2022. |
Page 14
| Investor Presentation REALTY GROWTH October 2022 West Broad Village Glen Allen, VA |
| © CTO Realty Growth, Inc. | ctoreit.com Company Highlights 2 Differentiated Investment Strategy Focusing on Asset Recycling and Value - Add Acquisitions Sunbelt Retail & Mixed - Use Multi - tenant portfolio in attractive business - friendly markets with strong demographics and outsized long - term growth potential Stable and Flexible Balance Sheet Ample Liquidity and No Upcoming Debt Maturities Active Asset Management Emphasizing Operational Upside Experienced Leadership Team With Deep REIT and Real Estate Experience West Broad Village Glen Allen, VA West Broad Village Glen Allen, VA Jordan Landing West Jordan, UT The Shops at Legacy Plano, TX The Shops at Legacy Plano, TX Madison Yards Atlanta, GA Madison Yards Atlanta, GA Daytona Beachside Restaurants Daytona Beach, FL The Strand at St. John’s Town Center Jacksonville, FL |
| © CTO Realty Growth, Inc. | ctoreit.com Company Profile 3 As of October 26, 2022, unless otherwise noted. (1) Based on $20.01 per share common stock price as of October 26, 2022. The Exchange at Gwinnet Buford, GA 19 3.1M 8.0% PROPERTIES SQUARE FEET IMPLIED CAP RATE 8.4% IMPLIED INVESTMENT YIELD 93% LEASED OCCUPANCY $376M $427M $871M EQUITY MARKET CAP (1) OUTSTANDING DEBT ENTERPRISE VALUE (NET OF CASH) SERIES A PREFERRED $75M Q3 2022 ANNUALIZED DIVIDEND $1.52/share 7.6% CURRENT ANNUALIZED DIVIDEND YIELD (1) $40M INVESTMENT IN ALPINE INCOME PROPERTY TRUST $1.79 – $1.82 AFFO PER SHARE GUIDANCE RANGE |
| © CTO Realty Growth, Inc. | ctoreit.com NAV Components 4 Net Operating Income of Income Property Portfolio (1) $60.5 $60.5 $60.5 $60.5 $60.5 ÷ Capitalization Rate 6.50% 6.75% 7.00% 7.25% 7.50% Income Portfolio Value $931.3 $896.8 $864.8 $835.0 $807.1 Other Assets: + Estimated Value for Subsurface Interests, Mitigation Credits and Other Assets (2) $16.8 $16.8 $16.8 $16.8 $16.8 + Par Value Outstanding Balance of Structured Investments Portfolio (2) 46.4 46.4 46.4 46.4 46.4 + Cash, Cash Equivalents & Restricted Cash 7.4 7.4 7.4 7.4 7.4 + Value of Shares & Units in Alpine Income Property Trust (PINE) 39.6 39.6 39.6 39.6 39.6 + Value of PINE Management Agreement (3) 10.0 10.0 10.0 10.0 10.0 Other Assets Value $120.2 $120.2 $120.2 $120.2 $120.2 Total Implied Asset Value $1,051.5 $1,017.0 $985.0 $955.2 $927.3 - Total Debt Outstanding $426.8 $426.8 $426.8 $426.8 $426.8 - Series A Preferred Equity $75.0 $75.0 $75.0 $75.0 $75.0 Note: 18,800,010 shares outstanding as of October 27, 2022. (1) Based on estimated net operating income of the existing income property portfolio assets as of October 26, 2022. (2) As of September 30, 2022. (3) Calculated using the trailing 24 - month average management fee paid to CTO by PINE as of September 30, 2022, annualized by mu ltiplying by twelve, and then multiplying by three to account for a termination fee multiple. |
| © CTO Realty Growth, Inc. | ctoreit.com Year - To - Date Highlights 5 Accretive and Opportunistic Investment Activity ▪ Acquired three multi - tenant retail and mixed - used properties (Price Plaza - Houston, TX, Madison Yards – Atlanta, GA, and West Broad Village – Richmond, VA) at a weighted - average going - in cash cap rate of 7 .. 0 % for total acquisition volume of $ 213 .. 2 million ▪ Sold three single tenant income properties, the sole remaining multi - tenant office property, one hotel ground lease, and one muti - tenant retail property for $ 81 .. 1 million at a weighted average exit cap rate of 6 .. 2 % ▪ Entered into three structured investments to provide $ 57 .. 7 million of funding towards the development or redevelopment of retail mixed - use properties in submarkets of Atlanta, GA ; Dallas, TX ; and Orlando, FL at a blended initial yield of 8 .. 1 % ▪ Currently have several legacy single tenant office properties on the market for disposition Strong Financial Performance ▪ Increased Core FFO and AFFO full year 2022 guidance by 17% and 8% per share at the midpoint, respectively, since the beginnin g o f 2022 ▪ Completed three - for - one common stock split, effective July 1, 2022 ▪ Expanded revolving credit facility from $210 million to $300 million and extended the maturity date to January 2027; no debt mat urities until 2025 ▪ Declared a $0.38 Q3 2022 quarterly common stock dividend, representing a 14% increase over the Q3 2021 quarterly common stock di vidend and a Q3 2022 AFFO payout ratio of 78% Attractive and Well Performing Portfolio ▪ Year - to - date Q3 2022 Same - Property NOI increase of 21.5% ▪ 28% of annualized base rents come from grocery - anchored assets; 88% of annualized base rents come from retail and mixed - use prop erties ▪ Currently 91% occupied and 93% leased ▪ Signed 173,363 square feet of new leases, renewals and extensions with an average increase of 18.6% (1) through the first three quarters of 2022 As of October 26, 2022, unless otherwise noted. (1) Excludes newly leased units that were acquired as vacant. |
| © CTO Realty Growth, Inc. | ctoreit.com Differentiated Investment Strategy 6 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 are in higher growth markets and 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 organically drive higher cash flow, FFO 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 and attractive source of management fee income and dividend income through its direct investment of REIT shares and OP unit holdings 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 Peer Comparisons 15.0x 12.7x 11.8x 11.4x 11.4x 10.8x 10.2x 10.0x 9.9x 8.8x 8.6x 4.5% 4.3% 4.6% 4.6% 7.6% 5.3% 4.3% 4.7% 4.5% 5.3% 5.8% 3.50% 4.50% 5.50% 6.50% 7.50% 8.50% 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x FRT KIM AAT UE CTO AKR SITC BRX KRG WSR RPT (1) All 2022E peer FFO multiples and dividend yield information are based on the closing stock price on July 22, 2022, using annu ali zed dividends and 2022E FFO per share estimates from the KeyBank The Leaderboard report dated July 24, 2022; CTO’s FFO multip le and dividend yield is based on its closing stock price on July 22, 2022, using its Q2 annualized dividend announced on May 24, 2022 (split adjusted), and 2022E Cor e FFO per share guidance as included in the Company’s 2022 Guidance provided on July 28, 2022. CTO has an outsized dividend yield and attractive absolute valuation relative to many of its retail - focused peer group, implying valuation upside. 2022E FFO Multiple and Annualized Dividend Yield (1) 7 CTO is trading at an implied 8.0% cap rate on its income producing property NOI and has a current dividend yield of 7.6% |
| © CTO Realty Growth, Inc. | ctoreit.com Real Estate and Investment Strategy CTO’s investment strategy is focused on generating relative outsized returns for our shareholders by acquiring and owning well - located properties in markets and states that are business and tax friendly, where the long - term cash flows and underlying real estate values are supported by significant population and job growth. ▪ Focused on markets/states projected to have outsized job and population growth with favorable business climates ▪ Geographic emphasis set to benefit from strong retailer demand to serve increasing populations ▪ Differentiated asset investment strategy prioritizes value - add retail and mixed - use properties with strong real estate fundamentals ▪ Track record of acquiring at meaningful discounts to replacement cost and below market leases where real estate fundamentals will drive outsized rental rate growth ▪ Seek properties with leasing or repositioning upside or highly stable assets with an identifiable opportunity to drive long - term, outsized risk - adjusted returns Miami Orlando Jacksonvill e Tampa Atlanta Nashville Charlotte Raleigh - Durham Washington, DC Dallas Houston Austin Denver Boulder Salt Lake City Las Vegas Reno Phoenix 8 CTO Target Market |
| © CTO Realty Growth, Inc. | ctoreit.com Meaningful Progress with Portfolio Repositioning 9 $365 $489 $374 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 (1) Reflects the midpoint of 2022 Guidance provided on October 27, 2022. (1) The Shops at Legacy Plano, TX The Shops at Legacy Plano, TX |
| © 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. 10 Stable Cash Flow Essential Retail Repositioning Upside The Shops at Legacy Plano, TX Ashford Lane Atlanta, GA 125 Lincoln & 150 Washington Santa Fe, NM Madison Yards Atlanta, GA The Exchange at Gwinnett Buford, GA The Strand at St. John’s Town Center Jacksonville, FL Crossroads Towne Center Chandler, AZ Beaver Creek Crossings Apex, NC West Broad Village Glen Allen, VA |
| © CTO Realty Growth, Inc. | ctoreit.com Recent Acquisition – West Broad Village, Glen Allen, VA 11 Newly acquired 392,000 square foot grocery - anchored, mixed - use lifestyle center with attractive long - term upside from value - add leasing ▪ Region’s premier mixed - use destination property anchored by Whole Foods (S&P: AA - ) ▪ Built between 2007 and 2014 and prominently situated on 32.6 acres within Richmond’s affluent Short Pump submarket ▪ National and local tenant lineup concentrated in grocery, food & beverage, education, childcare, entertainment, home décor, and medical sectors ▪ Amplified trade area allowing the property to benefit from five - mile average household incomes of more than $140,000 and a five - mile population of nearly 175,000 ▪ Acquired for $239 per square foot, meaningfully below replacement cost ▪ More than 68,000 square feet of acquired vacancy to drive future cash flow West Broad Village Glen Allen, VA West Broad Village Glen Allen, VA West Broad Village Glen Allen, VA West Broad Village West Broad Village Glen Allen, VA |
| © CTO Realty Growth, Inc. | ctoreit.com Recent Acquisition – Madison Yards, Atlanta, GA 12 Recently acquired 162,500 square foot grocery - anchored shopping center that has established Atlanta as CTO’s top investment market ▪ Stable, high barrier - to - entry, in - fill location in Atlanta’s Inman Park/Beltline submarket ▪ Over 445 feet of direct Beltline frontage, Atlanta’s 22 - mile cultural, multiuse outdoor loop that attracts 1.7 million visitors annually ▪ True live, work, play property, anchored by Publix (17 years) and AMC (13 years), complimented by a service, experiential and food driven tenant lineup ▪ All leases except for one have base term rent increases ▪ More than 500 directly adjacent multi - family units and townhomes ▪ Population over 171,500 in a 3 - mile radius; average household income of $130,000 in one mile ▪ High - quality, class A property built in 2019 Madison Yards Atlanta, GA Madison Yards Atlanta, GA The Beltline Madison Yards |
| © CTO Realty Growth, Inc. | ctoreit.com Strong Demographic Portfolio 13 Percentages listed based on Annualized Base Rent. Differences are a result of rounding. (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 23% Dallas, TX 13% Richmond, VA 13% Raleigh, NC 8% Jacksonville, FL 8% Phoenix, AZ 7% Albuquerque, NM 6% Houston, TX 5% Santa Fe, NM 4% Tampa, FL 4% Salt Lake City, UT 3% Las Vegas, NV 3% Washington, DC 2% Daytona Beach, FL 2% Orlando, FL <1% Denotes an MSA with over one million people; Bold denotes a Top 30 ULI Market (2) % of Annualized Rent By State 228,950 Portfolio Average 5 - Mile Population (1) $130,500 Portfolio Average 5 - Mile Household Income (1) 0.9% Portfolio Average 2022 - 2027 Projected Annual Population Growth (1) 68% Percentage of Portfolio ABR from ULI’s Top 30 Markets (1) > 20% 10% - 20% 5% - 10% < 5% |
| © CTO Realty Growth, Inc. | ctoreit.com Meaningful Property Cash Flow & Leasing Momentum 14 1% 5% 4% 6% 15% 10% 18% 9% 6% 5% 6% 15% 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 (1) % of ABR Expiring Leases Signed in 2022 ▪ YTD Q3 2022 Year - Over - Year Same - Property NOI 21.5% o 31.5% YTD Q3 2022 multi - tenant same - property NOI growth o 6.1% YTD Q3 2022 single tenant same - property NOI growth ▪ YTD Q3 2022 Leasing Spreads 18.6% o 58.0% new lease spreads (excluding acquired vacancy) o 4.4% option & renewal spreads ▪ Leased Occupancy 93% o Over 200 bps of future occupancy pickup based on current spread between Occupancy and Leased Occupancy As of September 30, 2022, unless otherwise noted. (1) As of October 26, 2022. |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – Ashford Lane, Atlanta, GA 15 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 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 ▪ 5 - mile population of more than 248,000; 5 - mile average household income of $164,000 THE HALL |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – Ashford Lane, Atlanta, GA 16 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 new leases with the following notable tenants in 2021 and 2022: Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA Ashford Lane Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Repositioning – 125 Lincoln & 150 Washington, Santa Fe, NM 17 Signed a 9,200 square foot lease with the Rosewood Inn of Anasazi 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 ▪ Recently installed paid parking system to drive increased operational cash flow ▪ Currently negotiating letters of intent and forms of lease with multiple prospective tenants ▪ Prime 12,000 square foot street - level vacancy available for lease to anchor the property’s repositioning in the market 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 Consistent Dividend Growth 18 $0.01 $0.01 $0.02 $0.02 $0.02 $0.03 $0.05 $0.07 $0.12 $0.91 $1.33 $1.48 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (1) Implied 2022 dividend calculated as the paid Q1, Q2 and Q3 2022 dividends of $0.36, 0.37 and 0.38 per common share, respecti vely, annualized to indicate the implied dividends that could be paid in all of 2022. The 2022 implied dividend is presented fo r illustrative purposes only and there are no guarantees the Company will pay a dividend in the future. (2) 2022E AFFO per share for CTO is the midpoint of guidance, as provided on October 27, 2022. (3) Based on $20.02 per share common stock price as of October 26, 2022. ▪ 46 consecutive years of paying a common dividend ▪ Under current management (beginning in 2011 ), the Company’s common stock cash dividend has grown in each of the last 10 years ▪ Company policy is to target a payout ratio of 100 % of taxable income ▪ Dividend increases are driven by increasing taxable income and free cash flow ▪ Current midpoint of guidance ( 2 ) implies an 84 % 2022 E AFFO per share dividend payout ratio (1) CTO converted to a REIT in December of 2020, accelerating the required dividend payout Increasing cash flow and earnings have driven a more than 63% increase to CTO’s annualized common stock dividend since 2020 Cash Dividend Per Share Paid (Split Adjusted) Current Annualized Per Share Cash Dividend $1.52 Annualized Per Share Cash Dividend Yield (3) 7.6% |
| © CTO Realty Growth, Inc. | ctoreit.com 2022 Guidance 19 $ and shares outstanding in millions, except per share data. As of October 27, 2022, unless otherwise noted. CTO has provided guidance indicating as much as 55% year - over - year Core FFO per share growth in 2022. Low High Investments $271 million – $271 million $271 million of investments Target Initial Cash Yield 7.25% – 7.25% 7.25% Dispositions $81 million – $83 million $81 million of dispositions Target Disposition Cash Yield 6.15% – 6.25% 6.22% Core FFO Per Diluted Share $1.71 – $1.74 $1.41 YTD in Q3 2022 AFFO Per Diluted Share $1.79 – $1.82 $1.47 YTD in Q3 2022 Weighted Average Diluted Shares Outstanding 18.2 million – 18.2 million 18.0 million YTD in Q3 2022 Revised 2022 Year - To - Date Performance |
| © CTO Realty Growth, Inc. | ctoreit.com Balance Sheet 20 $51 $83 $100 $139 2022 2023 2024 2025 2026 2027 2028 2029 2030 Unsecured Secured Revolving Credit Facility As of September 30, 2022. $ and shares outstanding in millions. (1) Reflects $38.5 million outstanding under the Company’s $300 million senior unsecured revolving credit facility; the Company’ s senior unsecured revolving credit facility matures in January 2027 and includes a one - year extension option to January 2028, s ubject to satisfaction of certain conditions; the maturity date reflected assumes the Company exercises the one - year extension option. (2) The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted aver age fixed swap rate of 0.26% plus the 10 bps SOFR adjustment plus the applicable spread. (3) The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap r ate of 0.64% plus the 10 bps SOFR adjustment plus the applicable spread. (4) The Company entered into interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjustment plus the applicable spread. Debt Maturities ▪ Significant liquidity for opportunistic growth ▪ No near - term debt maturities ▪ Minimal exposure to floating interest rates ▪ 43% net debt - to - total enterprise value (TEV) ▪ 6.4x Net Debt - to - Pro Forma EBITDA (1) Component of Long - Term Debt Type Principal Interest Rate Revolving Credit Facility Floating $38.5 million SOFR + 10 bps + [1.25% - 2.20%] 2025 Convertible Senior Notes Fixed $51.0 million 3.88% 2026 Term Loan (2) Fixed $65.0 million SOFR + 10 bps + [1.25% - 2.20%] 2027 Term Loan (3) Fixed $100.0 million SOFR + 10 bps + [1.25% - 2.20%] 2028 Term Loan (4) Fixed $100.0 million SOFR + 10 bps + [1.20% - 2.15%] Mortgage Note Fixed $17.8 million 4.06% Total Debt 10% Floating $372.3 million 3.44% |
| © 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. 21 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. 22 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 5 of 6 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 23 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 |
| © CTO Realty Growth, Inc. | ctoreit.com Key Takeaways 24 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 paid a $ 0 .. 38 third quarter cash dividend, representing a 7 .. 6 % in - place annualized yield and improved AFFO payout ratio ( 84 % 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 and strong same - store net operating income growth .. Valuation upside to the Peer Group Valuation upside as CTO is faster growing with a comparable 2022 E FFO multiple compared to the slower growing, retail - focused peers .. 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 markets such as Atlanta, Dallas, Raleigh, Richmond, Phoenix, Jacksonville, Tampa, Houston, and Salt Lake City, with acquired vacancy 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 16 % 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 .. As of October 26, 2022, unless otherwise noted. |
| NYSE: CTO Appendix The Shops at Legacy Plano, TX |
| © CTO Realty Growth, Inc. | ctoreit.com Schedule of Properties 26 Property Market Asset Type Property Type Square Feet In - Place Occupancy Leased Occupancy % of ABR West Broad Village – Glen Allen, VA Richmond, VA Multi - Tenant Mixed Use 392,007 83% 83% 13% The Shops at Legacy – Plano, TX Dallas, TX Multi - Tenant Mixed Use 237,366 92% 96% 12% Ashford Lane – Atlanta, GA Atlanta, GA Multi - Tenant Retail 277,407 78% 86% 11% Beaver Creek Crossings – Apex, NC Raleigh, NC Multi - Tenant Retail 321,977 94% 98% 8% Madison Yards – Atlanta, GA Atlanta, GA Multi - Tenant Retail 162,521 99% 99% 8% The Strand – Jacksonville, FL Jacksonville, FL Multi - Tenant Retail 210,973 91% 95% 8% Crossroads Towne Center – Chandler, AZ Phoenix, AZ Multi - Tenant Retail 244,843 100% 100% 7% Fidelity – Albuquerque, NM Albuquerque, NM Single Tenant Office 210,067 100% 100% 6% Price Plaza Shopping Center – Katy, TX Houston, TX Multi - Tenant Retail 205,813 95% 95% 5% 125 Lincoln & 150 Washington - Santa Fe, NM Santa Fe, NM Multi - Tenant Mixed Use 137,209 75% 84% 4% The Exchange at Gwinnett - Buford, GA Atlanta, GA Multi - Tenant Retail 69,266 92% 96% 4% As of October 26, 2022, unless otherwise noted. |
| © CTO Realty Growth, Inc. | ctoreit.com Schedule of Properties 27 Property Market Asset Type Property Type Square Feet In - Place Occupancy Leased Occupancy % of ABR Sabal Pavilion – Tampa, FL Tampa, FL Single Tenant Office 120,500 100% 100% 4% Jordan Landing – West Jordan, UT Salt Lake City, UT Multi - Tenant Retail 170,996 100% 100% 3% Eastern Commons – Henderson, NV Las Vegas, NV Multi - Tenant Retail 133,304 100% 100% 2% General Dynamics – Reston, VA Washington, DC Single Tenant Office 64,319 100% 100% 2% Landshark Bar & Grill – Daytona Beach, FL Daytona Beach, FL Single Tenant Retail 6,264 100% 100% 1% Westcliff Shopping Center – Fort Worth, TX Dallas, TX Multi - Tenant Retail 134,693 61% 61% < 1% 369 N. New York Ave – Winter Park, FL Orlando, FL Multi - Tenant Mixed Use 30,296 84% 100% < 1% Crabby’s Oceanside – Daytona Beach, FL Daytona Beach, FL Single Tenant Retail 5,780 100% 100% < 1% As of October 26, 2022, unless otherwise noted. |
| © CTO Realty Growth, Inc. | ctoreit.com Forward Looking Statements & Non - GAAP Financial Measures 28 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 29 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 30 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 October 27 , 2022 .. ▪ All information is as of September 30 , 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 Third Quarter 2022 Operating Results press release filed on October 27 , 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 October 20 , 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 , 173 , 865 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 18 , 800 , 010 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 31 CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited, in thousands, except share, per share and dividend data) Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenues Income Properties $ 17,694 $ 13,734 $ 49,229 $ 36,757 Management Fee Income 951 940 2,835 2,361 Interest Income From Commercial Loans and Investments 1,323 726 3,331 2,136 Real Estate Operations 3,149 1,177 4,395 4,318 Total Revenues 23,117 16,577 59,790 45,572 Direct Cost of Revenues Income Properties (5,115) (3,984) (13,943) (9,688) Real Estate Operations (1,661) (252) (1,940) (867) Total Direct Cost of Revenues (6,776) (4,236) (15,883) (10,555) General and Administrative Expenses (3,253) (2,680) (8,972) (8,477) Impairment Charges − − − (16,527) Depreciation and Amortization (7,305) (5,567) (20,401) (15,428) Total Operating Expenses (17,334) (12,483) (45,256) (50,987) Gain on Disposition of Assets 4,973 22,666 4,728 28,106 Loss on Extinguishment of Debt − − − (641) Other Gains and Income 4,973 22,666 4,728 27,465 Total Operating Income 10,756 26,760 19,262 22,050 Investment and Other Income (Loss) (3,065) (797) (6,270) 8,438 Interest Expense (3,037) (1,986) (7,216) (6,851) Income Before Income Tax Benefit (Expense) 4,654 23,977 5,776 23,637 Income Tax Benefit (Expense) 163 (30) 461 4,371 Net Income Attributable to the Company 4,817 23,947 6,237 28,008 Distributions to Preferred Stockholders (1,195) (1,129) (3,586) (1,129) Net Income Attributable to Common Stockholders $ 3,622 $ 22,818 $ 2,651 $ 26,879 Earnings Per Share: Basic $ 0.20 $ 1.29 $ 0.15 $ 1.52 Diluted $ 0.19 $ 1.29 $ 0.15 $ 1.52 Weighted Average Number of Common Shares Basic 18,386,435 17,703,284 18,044,299 17,678,701 Diluted 21,505,460 17,703,284 18,044,299 17,678,701 |
| © CTO Realty Growth, Inc. | ctoreit.com Same - Property NOI 32 Three Months Ended September 30, 2022 September 30, 2021 Net Income Attributable to the Company $ 4,817 $ 23,947 Gain on Disposition of Assets (4,973) (22,666) Depreciation and Amortization per Income Statement 7,305 5,567 Amortization of Intangibles to Lease Income (507) 86 Straight - Line Rent Adjustment 600 669 COVID - 19 Rent Deferrals (26) (84) Accretion of Tenant Contribution 38 38 Interest Expense 3,037 1,986 General and Administrative Expenses 3,253 2,680 Investment and Other Loss (Income) 3,065 797 Income Tax Benefit (Expense) (163) 30 Real Estate Operations Revenues (3,149) (1,177) Real Estate Operations Direct Cost of Revenues 1,661 252 Management Fee Income (951) (940) Interest Income from Commercial Loans and Investments (1,323) (726) Less: Impact of Properties Not Owned for the Full Reporting Period (4,219) (2,898) Same - Property NOI $ 8,465 $ 7,561 Year - Over - Year Growth 12.0% CTO Realty Growth, Inc. Same - Property NOI Reconciliation (Unaudited, in thousands) |
| © CTO Realty Growth, Inc. | ctoreit.com Non - GAAP Financial Measures 33 Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net Income Attributable to the Company $ 4,817 $ 23,947 $ 6,237 $ 28,008 Add Back: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) 539 — — — Net Income Attributable to the Company, If - Converted $ 5,356 $ 23,947 $ 6,237 $ 28,008 Depreciation and Amortization 7,283 5,567 20,359 15,428 Gains (Loss) on Disposition of Assets (4,973) (22,666) (4,728) (28,106) Gain on Disposition of Other Assets (1,509) (974) (2,473) (3,549) Impairment Charges, Net — — — 12,474 Unrealized (Gain) Loss on Investment Securities 3,754 1,326 8,102 (6,894) Funds from Operations $ 9,911 $ 7,200 $ 27,497 $ 17,361 Distributions to Preferred Stockholders (1,195) (1,129) (3,586) (1,129) Funds from Operations Attributable to Common Stockholders $ 8,716 $ 6,071 $ 23,911 $ 16,232 Loss on Extinguishment of Debt — — — 641 Amortization of Intangibles to Lease Income 507 (86) 1,485 (820) Less: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes (1) (539) — — — Core Funds from Operations Attributable to Common Stockholders $ 8,684 $ 5,985 $ 25,396 $ 16,053 Adjustments: Straight - Line Rent Adjustment (600) (669) (1,645) (1,844) COVID - 19 Rent Repayments 26 84 79 738 Other Depreciation and Amortization (29) (154) (199) (528) Amortization of Loan Costs and Discount on Convertible Debt 64 442 510 1,395 Non - Cash Compensation 812 734 2,423 2,434 Non - Recurring G&A — — — 155 Adjusted Funds from Operations Attributable to Common Stockholders $ 8,957 $ 6,422 $ 26,564 $ 18,403 FFO Attributable to Common Stockholders per Common Share – Diluted $ 0.41 $ 0.34 $ 1.33 $ 0.92 Core FFO Attributable to Common Stockholders per Common Share – Diluted $ 0.47 $ 0.34 $ 1.41 $ 0.91 AFFO Attributable to Common Stockholders per Common Share – Diluted $ 0.49 $ 0.36 $ 1.47 $ 1.04 CTO Realty Growth, Inc. Non - GAAP Financial Measures (Unaudited, in thousands, except per share data) (1) A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, upon adoption of ASU 2020 - 06 effective January 1, 2022, were included in the computation of diluted net income per share attributable to common stockholders for the three m on ths ended September 30, 2022. A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, were not included in the computation of diluted net in com e per share attributable to common stockholders for the nine months ended September 30, 2022 because they were antidilutive t o t he net income of under $2.6 million. |
| © CTO Realty Growth, Inc. | ctoreit.com Net Debt to Pro Forma EBITDA 34 CTO Realty Growth, Inc. Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited, in thousands) Three Months Ended September 30, 2022 Net Income Attributable to the Company $ 4,817 Depreciation and Amortization 7,283 Gain on Disposition Assets (4,973) Gain on Disposition of Other Assets (1,509) Unrealized Loss on Investment Securities 3,754 Distributions to Preferred Stockholders (1,195) Straight - Line Rent Adjustment (600) Amortization of Intangibles to Lease Income 507 Other Depreciation and Amortization (29) Amortization of Loan Costs and Discount on Convertible Debt 64 Non - Cash Compensation 812 Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 2,819 EBITDA $ 11,750 Annualized EBITDA $ 47,000 Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) 3,834 Pro Forma EBITDA $ 50,834 Total Long - Term Debt 370,248 Financing Costs, Net of Accumulated Amortization 1,682 Unamortized Convertible Debt Discount 404 Cash & Cash Equivalents (9,532) Restricted Cash (37,292) Net Debt $ 325,510 Net Debt to Pro Forma EBITDA 6.4x (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 September 30, 2022. |
| REALTY GROWTH The Strand at St. John’s Town Center Jacksonville, FL |
| © CTO Realty Growth, Inc. | ctoreit.com REALTY GROWTH Supplemental Reporting Information Q3 2022 Madison Yards Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com 1. Third Quarter 2022 Earnings Release 3 2. Key Financial Information ▪ Consolidated Balance Sheets 12 ▪ Consolidated Statements of Operations 13 ▪ Non - GAAP Financial Measures 14 3. Capitalization & Dividends 17 4. Summary of Debt 18 5. Investments 19 6. Dispositions 20 7. Portfolio Detail 21 8. Leasing Summary 23 9. Lease Expirations 24 10. Top Tenant Summary 25 11. Geographic Diversification 26 12. Other Assets 27 13. 2022 Guidance 28 14. Contact Information & Research Coverage 29 15. Safe Harbor, Non - GAAP Financial Measures, and Definitions and Terms 30 Table of Contents |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 3 Press Release Contact: Matthew M. Partridge Senior Vice President , Chief Financial Officer and Treasurer (407) 904 - 3324 mpartridge@ctoreit.com FOR IMMEDIATE RELEASE CTO R EALTY G ROWTH R EPORTS T HIRD Q UARTER 202 2 O PERATING R ESULTS WINTER PARK , FL – October 2 7 , 20 2 2 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO” ) today announced its operating results and earnings for the quarter ended September 30 , 202 2 .. Select Highlights ▪ Reported Net Income per diluted share attributable to common stockholders of $0. 19 for the quarter ended September 30 , 202 2 .. ▪ Reported Core FFO per diluted share attributable to common stockholders of $ 0.4 7 for the quarter ended September 30, 2022, an increase of 38.2 % from the comparable prior year period. ▪ Reported AFFO per diluted share attributable to common stockholders of $ 0.4 9 for the quarter ended September 30, 202 2 , an increase of 36. 1 % from the comparable prior year period .. ▪ A cquired Madison Yards, a newly built, grocery - anchored retail property located in Atlanta, Georgia for a purchase price of $80.2 million. The purchase price represents a going - in cap rate below the range of the Company’s prior guidance for initial cash yields. ▪ Sold two single tenant retail properties , the Company’s sole remaining multi - tenant office property and one multi - tenant retail property for total disposition volume of $ 57 ..0 million at a weighted average exit cap rate of 6. 3 % , generating total gains of $ 5.0 million .. ▪ Reported a 12.0 % increase in Same - Property NOI during the quarter ended September 30, 2022, as compared to the comparable prior year period .. ▪ Expanded revolving credit facility from $ 210 million to $ 30 0 million , extended the revolving credit facility ’s maturity date to Ja nuary 2027 , and entered into a new fixed - rate $100 million unsecured term loan with a maturity date of January 2028 .. ▪ Paid a $0. 38 per share common stock cash dividend for the third quarter of 2022, which represented a 14.0 % increase from the comparable pri or year period quarterly common stock cash dividend and an annualized yield of 7 .. 6 % based on the closing price of the Company’s common stock on October 26 , 2022. ▪ On October 1 4 , 2022, the Company acquired West Broad Village , a m ixed - u se, g rocery - a nchored l ifestyle p roperty in Richmond, Virginia for a purchase price of $ 93.9 million. The purchase price represents a going - in cap rate above the range of the Company’s prior guidance for initial cash yields. |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 4 CEO Comments “ We ’ve had a very strong few months of asset recyclin g as we continue to make good progress refining our high - quality, retail - focused portfolio. Our newly built grocery - anchored Madison Yards (Publix) asset in Atlanta, Georgia, and our grocery - anchored West Broad Village (W hole Foods) property in Richmond, Virginia are excellent additions as we continue to add exposure to well - performing markets and attractive demographics ,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “ These new grocery - anchored acquisitions, combined with our 7 .. 6 % current dividend yield, accretive dispositions, 21.5 % year - to - date same - store NOI growth, strong leasing activity, newly expanded credit facility and fixed - rate term loan have us well - positioned to drive attractive risk - adjusted cash flows for our shareholders .. As we look forward into 2023, we’re confident our shadow disposition pipeline of single tenant office properties and more than $200 million of available liquidity gives us ample capacity to be oppor tunistic in the quickly evolving transaction market. ” Quarterly Financial Results Highlights The table s below provide a summary of the Company’s operating results for the three months ended September 30 , 202 2 : (in thousands, except per share data) For the Three Months Ended September 3 0 , 2022 For the Three Months Ended September 3 0 , 202 1 Variance to Comparable Period in the Prior Year Net Income Attributable to the Company $ 4,817 $ 23,94 7 $ (1 9, 130 ) (7 9.9 % ) Net Income Attributable to Common Stockholders $ 3, 622 $ 22,81 8 $ (1 9,196 ) (8 4.1 % ) Net Income per Diluted Share Attributable to Common Stockholders (1) $ 0. 19 $ 1.29 $ (1. 10 ) (8 5. 3 % ) Core FFO Attributable to Common Stockholders ( 2 ) $ 8, 684 $ 5,985 $ 2,6 99 4 5.1 % Core FFO per Common Share – Diluted ( 2 ) $ 0.4 7 $ 0.34 $ 0. 13 38.2 % AFFO Attributable to Common Stockholders ( 2 ) $ 8, 9 57 $ 6, 422 $ 2, 5 35 39 .. 5 % AFFO per Common Share – Diluted ( 2 ) $ 0.4 9 $ 0.36 $ 0. 13 36.1 % Dividends Declared and Paid, per Preferred Share $ 0.40 $ 0.38 $ 0. 02 5.9 % Dividends Declared and Paid, per Common Share $ 0.38 $ 0.33 $ 0.05 14.0% (1) The denominator for this measure in 2022 includes the impact of 3 .. 1 million 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 for the quarter ended September 30, 202 2 was 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 Incom e (Loss) Attributable to the Company to non - GAAP financial measures, including FFO Attributable t o 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. Year - to - Date Financial Results Highlights The tables below provide a summary of the Company’s operating results for the nine months ended September 30, 2022: (in thousands, except per share data) For the Nine Months Ended September 3 0 , 2022 For the Nine Months Ended September 3 0 , 202 1 Variance to Comparable Period in the Prior Year Net Income Attributable to the Company $ 6, 237 $ 28,008 $ (21, 771 ) (7 7.7 %) Net Income Attributable to Common Stockholders $ 2, 651 $ 26,879 $ (2 4,228 ) ( 90.1 %) |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 5 Net Income per Diluted Share Attributable to Common Stockholders (1) $ 0. 15 $ 1.52 $ ( 1.3 7 ) ( 90. 1 %) Core FFO Attributable to Common Stockholders ( 2 ) $ 2 5,396 $ 16, 053 $ 9,343 58.2 % Core FFO per Common Share – Diluted ( 2 ) $ 1. 41 $ 0.91 $ 0. 50 54.9 % AFFO Attributable to Common Stockholders ( 2 ) $ 26, 5 64 $ 18,403 $ 8, 1 61 4 4 ..3 % AFFO per Common Share – Diluted ( 2 ) $ 1. 47 $ 1.04 $ 0. 43 41.3 % Dividends Declared and Paid, per Preferred Share $ 1.20 $ 0.38 $ 0. 8 2 217.7 % Dividends Declared and Paid, per Common Share $ 1.1 1 $ 1.00 $ 0. 11 11.3% (1) The denominator for this measure in 2022 excludes the impact of 3.1 million 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 o f 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. Investments During the three months ended September 30, 2022, the Company acquired Madison Yards, a 162,500 square foot grocery - anchored property located in the Inman Park/Reynoldstown submarket along the Memorial Drive corridor of Atlanta, Georgia for a purchase price of $80.2 million. The property is 9 9 % occupied, anchored by Publix and AMC Theatres, includes a well - crafted mix of retailers and restaurants, including AT&T, First Watch, and Orangetheory Fitness. The purchase price represents a going - in cap rate below the range of the Company’s prior guidance for initial cash yields. During the nine months ended September 30, 202 2 , the Company acquired two multi - tenant retail propert ies for total income property acquisition volume of $ 119.3 million and originated three structured investments to provide $57.7 million of funding towards three retail and mixed - use properties .. These acq uisitions and structured investments represent a blended weighted average going - in yield of 7. 2 %. Subsequent to quarter - end, the Company acquired West Broad Village , a 392,00 0 square foot grocery - anchored lifestyle property located in the Short Pump submarket of Richmond, Virginia for a purchase price of $ 93. 9 million. The property , anchored by Whole Foods and REI , is 83 % occupied and comprised of approximately 315,600 square feet of retail and 76,400 square feet of complementary office and includes an attractive combination of national and local tenants spanning the grocery, food & beverage, entertainment, education, home décor, childcare and medical sectors. The purchase price represents a going - in cap rate above the range of the Company’ s prior guidance for initial cash yields. Dispositions During the three months ended September 30, 2022, the Company sold two single tenant retail properties , its sole remaining multi - tenant office property , and one multi - tenant retail property in Hialeah, Florida that was classified as a commercial loan investment due to the tenant’s repurchase option .. Total disposition volume was $ 57 ..0 million at a weighted average exit cap rate of 6.3%, generating total gains of $5.0 million. During the nine months ended September 30, 2022, the Company sold six properties , two of which were classified as a commercial loan investment due to the respective tenants ’ repurchase option s , for $ 81.1 million at a weighted average exit cap rate of 6. 2 %. |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 6 Income Property Portfolio The Company’s income property portfolio consisted of the following as of September 3 0 , 2022: Asset Type # of Properties Square Feet Weighted Average Remaining Lease Term Single Tenant 5 407 5.9 years Multi - Tenant 1 3 2,337 6. 6 years Total / Weighted Average Lease Term 18 2 , 744 6. 5 years Property Type # of Properties Square Feet % of Cash Base Rent Retail 1 2 1,9 44 6 7.3 % Office 3 395 1 3.8 % Mixed - Use 3 40 5 1 8.9 % Total / Weighted Average Lease Term 18 2, 7 44 100.0% Leased Occupancy 9 4 .. 4 % Ec onomic Occupancy 9 1. 8 % Physical Occupancy 90. 4 % Square feet in thousands. Operational Highlights The Company’s Same - Property NOI totaled $ 8.5 million during the third quarter of 2022, an increase of 12.0 % over the comparable prior year period, as presented in the following table. (in thousands) For the Three Months Ended September 3 0 , 2022 For the Three Months Ended September 30 , 2021 Variance to Comparable Period in the Prior Year Single Tenant $ 1 , 920 $ 1,746 $ 174 10.0 % Multi - Tenant 6 , 545 5,815 730 12.6 % Total $ 8,465 $ 7,561 $ 904 12.0 % During the third quarter of 2022, the Company signed leases totaling 75,231 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 43.4 8.7 years $ 3 6.14 $ 3,025 $ 1,033 Renewals & Extensions 31.8 5.8 years $ 29 ..62 $ — $ 77 T otal / Weighted Average 75.2 7.6 years $3 3.39 $ 3,025 $ 1,110 In thousands except for per square foot and lease term data. |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 7 Subsurface Interests and Mitigation Credits During the three months ended September 3 0 , 2022, the Company sold approximately 1,500 acres of subsurface oil, gas, and mineral rights for $0. 7 million, resulting in aggregate gains of $0. 7 million. During the nine months ended September 30, 202 2 , the Company sold approximately 1 4,582 acres of subsurface oil, gas and mineral rights for $ 1.6 million, resulting in a gain on the sale of $ 1.5 million. As of September 30 , 202 2 , the Company owns full or fractional subsurface oil, gas, and mineral interest s underlying approximately 355 ,000 “surface” acres of land owned by others in 19 counties in Florida. During the three months ended September 3 0 , 2022, the Company sold approximately 24.7 state mitigation credits for $ 2.3 million, resulting in aggregate gains of $0. 7 million. During the nine months ended September 30, 2022, the Company sold approximately 26.6 state mitigation credits for $ 2.6 million, resulting in a gain on the sale of $ 0. 8 million. Capital Markets and Balance Sheet During the quarter ended September 3 0 , 2022, the Company completed the following notable capital markets activity: ▪ On September 2 0, 2022, the Company amended its senior unsecured Credit Facility. The Credit Facility was increased to $565 million and is comprised of a $300 million unsecured revolving credit facility, a new $100 million unsecured 2028 term loan, and the Company’s existing $165 million of unsecured term loans (altogether, the “Credit Facility”). The Credit F acility includes structural changes to certain financial covenants, a sustainability - linked pricing component that reduces the applicable interest rate margin if the Company meets certain sustainability performance targets, and an accordion option that all ows the Company to request additional commitments up to a total of $750 million. ▪ I ssued 565,687 common shares under its ATM offering program at a weighted average gross price of $ 22.02 per share, for total net proceeds of $ 12.3 million. ▪ Repurchased 85,694 shares for approximately $1. 6 million at a weighted average gross price of $ 19.17 per share. ▪ Completed a three - for - one stock split and began trading at the post - split price on July 1, 2022. The stock split was effected in the form of a stock dividend of two additional shares of common stock for each outstanding share of common stock held as of the record date for the stock dividend. The following table provides a summary of the Company’s long - term debt, at face value, as of September 30, 202 2 : Component of Long - Term Debt Principal Interest Rate Maturity Date Revolving Credit Facility $ 38.5 million SOFR + 10 bps + [1. 2 5% – 2.20 %] January 202 7 2025 Convertible Senior Notes $51.0 million 3.875% April 2025 2026 Term Loan (1) $65.0 million SOFR + 10 bps + [1. 2 5% – 2.20 %] March 2026 2027 Term Loan (2) $100.0 million SOFR + 10 bps + [1 ..25 % – 2.20 %] January 2027 202 8 Term Loan ( 3 ) $100.0 million SOFR + 10 bps + [1. 2 0 % – 2. 15 %] January 202 8 Mortgage Note ( 4 ) $17.8 million 4.06% August 2026 Total Debt / Weighted Average Interest Rate $ 3 72.3 million 3.44 % (1) The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 0.26% plus the 10 bps SOFR adjustment plus the applicable spread .. (2) The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap ra te of 0.64% plus the 10 bps SOFR adjustment plus the applicable spread .. |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 8 (3) The Company entered into interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjust ment plus the applicable spread .. ( 4 ) Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. As of September 3 0 , 2022, the Company’s net debt to Pro Forma EBITDA was 6. 4 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 3.4 times .. As of September 3 0 , 2022, the Company’s net debt to total enterprise value was 4 3 .. 2 %. 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 .. Dividend s On August 22 , 2022, the Company announced a cash dividend on its common stock and Series A Preferred stock for the third quarter of 2022 of $ 0.38 per share and $0. 40 per share, respectively, payable on September 3 0 , 2022 to stockholders of record as of the close of bu siness on September 12 , 2022. The third quarter 2022 common stock cash dividend represents a 1 4 ..0% increase over the comparable prior year period quarterly dividend and a payout ratio of 80.9 % and 77.6 % of the Company’s third quarter 2022 Core FFO per dilu ted share and AFFO per diluted share, respectively. 202 2 Outlook The Company has increased its outlook for 2022 to take into account the Company’s year - to - date performance and revised expectations regarding the Company’s investment activities, forecasted capital markets transactions, leasing activity, and other signific ant assumptions. The Company’s increased outlook for 2022 is as follows : 2022 Revised Outlook Range Change from Prior Outlook Low High Low High Acquisition of Income Producing Assets $ 2 71 million to $2 7 1 million $ 21 million to ( $ 4) million Target Investment Initial Cash Yield 7. 2 5 % to 7. 2 5 % 2 0 bps to 0 bps Disposition of Assets $ 81 million to $ 8 3 million $ 31 million to $ 3 million Target Disposition Cash Yield 6. 15 % to 6. 2 5 % ( 1 0) bps to ( 50 ) bps Core FFO Per Diluted Share $ 1. 71 to $ 1. 7 4 $0. 13 to $0. 10 AFFO Per Diluted Share $ 1.7 9 to $ 1. 82 $0.0 9 to $0.0 6 Weighted Average Diluted Shares Outstanding 18. 2 million to 18 .. 2 million ( 0 ..1) million to ( 0.3 ) million 3rd Quarter Earnings Conference Call & Webcast The Company will host a conference call to present its operating results for the quarter ended September 30, 2022 on Friday, October 2 8 , 2022, at 9:00 AM ET. A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.ctoreit.com or at the link provided in the event details below. To access the call by phone, please go to the link provided in the event details below and you will be provided with dial - in details. Webcast: https://edge.media - server.com/mmc/p/haf26ajs |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 9 Dial - In: https://register.vevent.com/register/BI7d526face25a498fb3ea12784d73ae34 We encourage participants to dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.ctoreit.com .. 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 presentatio n 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 fo rward - 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 ad verse 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 sat isfying 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 t ime 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 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”), |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 10 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 performanc e 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 a lternatives 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 F FO 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 subsi diaries. 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 formul ate corporate goals. To derive Pro Forma EBITDA, GAAP net income or loss attributable to the Company is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write - downs ass ociated 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, amortiz ation 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 di rect cost of revenues, management fee income, and interest income from commercial loan s and 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 ful l 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 s and 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 losse s on sales, which are based on historical costs and implicitly assume that the value |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 11 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 suppl emental 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 suppleme ntal 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 the Company’s propert ies, 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. FF O, 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 © CTO Realty Growth, Inc. | ctoreit.com 12 Consolidated Balance Sheet CTO Realty Growth, Inc. Consolidated Balance Sheet s ( In thousands, except share and per share data ) As of (Unaudited) September 30, 2022 December 31, 2021 ASSETS Real Estate: Land, at Cost $ 209,298 $ 189,589 Building and Improvements, at Cost 3 77, 758 325,418 Other Furnishings and Equipment, at Cost 746 707 Construction in Process, at Cost 10, 717 3,150 Total Real Estate, at Cost 5 9 8,519 518,864 Less, Accumulated Depreciation (31, 278 ) (24,169) Real Estate — Net 5 6 7,241 494,695 Land and Development Costs 6 85 692 Intangible Lease Assets — Net 87, 671 79,492 Assets Held for Sale — 6,720 Investment in Alpine Income Property Trust, Inc. 3 5,260 41,037 Mitigation Credits 2,846 3,702 Mitigation Credit Rights 19,999 21,018 Commercial Loans and Investments 46, 201 39,095 Cash and Cash Equivalents 9,532 8,615 Restricted Cash 37,292 22,734 Refundable Income Taxes 448 442 Deferred Income Taxes — Net 61 — Other Assets 38, 536 14,897 Total Assets $ 8 4 5,772 $ 733,139 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Accounts Payable $ 1 ,13 6 $ 676 Accrued and Other Liabilities 1 8,149 13,121 Deferred Revenue 5, 840 4,505 Intangible Lease Liabilities — Net 5, 995 5,601 Deferred Income Taxes — Net — 483 Long - Term Debt 3 70,248 278,273 Total Liabilities 4 01,368 302,659 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 September 30, 2022 and December 31, 2021 30 30 Common Stock – 500,000,000 shares authorized; $0.01 par value, 18,796,612 shares issued and outstanding at September 30, 2022 ; and 17, 748,678 shares issued and outstanding at December 31, 2021 188 60 Additional Paid - In Capital 97, 419 85,414 Retained Earnings 3 29, 317 343,459 Accumulated Other Comprehensive Income 1 7,450 1,517 Total Stockholders’ Equity 4 44, 404 430,480 Total Liabilities and Stockholders’ Equity $ 8 4 5,772 $ 733,139 |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 13 Consolidated P&L CTO Realty Growth, Inc. Consolidated Statement s of Operations (Unaudited ) (I n thousands, except share, per share and dividend data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Revenues Income Properties $ 17, 694 $ 13,734 $ 49, 229 $ 36,757 Management Fee Income 951 940 2,835 2,361 Interest Income From Commercial Loans and Investments 1 ,323 726 3,331 2,1 36 Real Estate Operations 3,149 1, 177 4,395 4 , 318 Total Revenues 23, 117 1 6,577 59,790 45,572 Direct Cost of Revenues Income Properties ( 5,115 ) ( 3,984 ) ( 13,943 ) ( 9,688 ) Real Estate Operations ( 1,661 ) ( 252 ) ( 1,940 ) ( 867 ) Total Direct Cost of Revenues ( 6,776 ) ( 4,236 ) ( 15,883 ) ( 10,555 ) General and Administrative Expenses ( 3,253 ) (2,6 80 ) ( 8,972 ) ( 8,477 ) Impairment Charges — — — (16,52 7 ) Depreciation and Amortization ( 7,305 ) (5, 567 ) ( 20,401 ) ( 15,428 ) Total Operating Expenses (1 7,334 ) ( 12,48 3 ) ( 45,256 ) ( 50,987 ) Gain on Disposition of Assets 4,973 22,666 4,728 28,106 Loss on Extinguishment of Debt — — — (641) Other Gains and Income 4,973 22,666 4,728 27,465 Total Operating Income 1 0,756 26,76 0 19, 262 22,050 Investment and Other Income (Loss) ( 3,065 ) (79 7 ) ( 6,270) 8,438 Interest Expense ( 3,037 ) ( 1,98 6) (7,216) ( 6,851 ) Income Before Income Tax Benefit (Expense) 4, 654 23,97 7 5,776 2 3,637 Income Tax Benefit (Expense) 163 (30) 461 4,371 Net Income Attributable to the Company 4, 817 23,94 7 6, 237 28,008 Distributions to Preferred Stockholders (1,19 5) (1,129) ( 3,586 ) (1,129) Net Income Attributable to Common Stockholders $ 3, 622 $ 22,81 8 $ 2, 651 $ 26,879 Per Share Attributable to Common Stockholders : Basic Net Income per Share $ 0. 2 0 $ 1.29 $ 0.1 5 $ 1.52 Diluted Net Income per Share $ 0. 19 $ 1.29 $ 0. 15 $ 1.52 Weighted Average Number of Common Shares Basic 18,386,435 17, 703,284 18,044,299 17,678,701 Diluted 21,505,460 17,703,284 18,044,299 17,678,701 Dividends Declared and Paid – Preferred Stock $ 0. 40 $ 0.3 8 $ 1.20 $ 0.38 Dividends Declared and Paid – Common Stock $ 0.38 $ 0.3 3 $ 1.1 1 $ 1 ..00 |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 14 Non - GAAP Financial Measures CTO Realty Growth, Inc. Non - GAAP Financial Measures Same - Property NOI Reconciliation (Unaudited) (In thousands) Three Months Ended September 3 0 , 2022 September 3 0 , 2021 Net Income Attributable to the Company $ 4,817 $ 23, 947 Gain on Disposition of Assets (4,973) ( 2 2,666) Depreciation and Amortization per Income Statement 7,305 5,567 Amortization of Intangibles to Lease Income ( 507) 86 Straight - Line Rent Adjustment 600 669 COVID - 19 Rent Deferrals (26 ) (84) Accretion of Tenant Contribution 38 38 Interest Expense 3,037 1,986 General and Administrative Expenses 3,253 2,680 Investment and Other Loss ( Income) 3,065 797 Income Tax Benefit ( Expense ) (163) 30 Real Estate Operations Revenues ( 3,149) (1, 177) Real Estate Operations Direct Cost of Revenues 1,661 252 Management Fee Income (9 51) ( 940) Interest Income from Commercial Loan s and Investments (1, 323) ( 726) Less: Impact of Properties Not Owned for the Full Reporting Period (4, 219) ( 2,898) Same - Property NOI $ 8,465 $ 7,561 |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 15 Non - GAAP Financial Measures CTO Realty Growth, Inc. Non - GAAP Financial Measures ( Unaudited ) (I n thousands, except per share data ) Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net Income Attributable to the Company $ 4,817 $ 23,947 $ 6, 237 $ 28,008 Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) 539 — — — Net Income Attributable to the Company, If - Converted $ 5, 356 $ 23,947 6, 237 28,008 Depreciation and Amortization of Real Estate 7, 283 5, 567 20 ,359 15,428 Gains on Disposition of Assets (4,973) (22,666) (4,728) (28,106) Gains on Disposition of Other Assets ( 1,509) (974) ( 2,473 ) ( 3,549 ) Impairment Charges, Net — — — 12,474 Unrealized Loss (Gain) on Investment Securities 3,754 1,326 8,102 ( 6, 894 ) Funds from Operations $ 9, 9 11 $ 7,200 $ 27, 497 $ 1 7,361 Distributions to Preferred Stockholders (1,19 5 ) (1,129) ( 3,586 ) (1,129) Funds From Operations Attributable to Common Stockholders $ 8, 7 16 $ 6,071 $ 23, 9 11 $ 1 6,232 Loss on Extinguishment of Debt — — — 641 Amortization of Intangibles to Lease Income 507 ( 86 ) 1,485 ( 820 ) Less: Effect of Dilutive Interest Related to 2025 Notes (1) (539) — — — Core Funds From Operations Attributable to Common Stockholders $ 8, 684 $ 5, 985 $ 25, 396 $ 1 6,053 Adjustments: Straight - Line Rent Adjustment ( 600 ) ( 669 ) (1, 645 ) (1, 844 ) COVID - 19 Rent Repayments 26 84 79 73 8 Other Depreciation and Amortization ( 29 ) (154) ( 199 ) (528) Amortization of Loan Costs , Discount on Convertible Debt , and Capitalized Interest 6 4 442 51 0 1,395 Non - Cash Compensation 812 7 34 2,423 2,434 Non - Recurring G&A — — — 15 5 Adjusted Funds From Operations Attributable to Common Stockholders $ 8, 9 57 $ 6, 422 $ 26, 5 64 $ 1 8,403 FFO Attributable to Common Stockholders per Common Share – Diluted $ 0.4 1 $ 0.34 $ 1. 33 $ 0.92 Core FFO Attributable to Common Stockholders per Common Share – Diluted $ 0.4 7 $ 0.34 $ 1. 41 $ 0.91 AFFO Attributable to Common Stockholders per Common Share – Diluted $ 0.4 9 $ 0.36 $ 1. 47 $ 1.04 (1) A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, upon adoption of ASU 2020 - 06 effective January 1, 2022, were included in the computation of diluted net income per share attributable to common stockholders for the three mon ths ended September 30, 2022. A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, were not included in the computation of dil uted net income per share attributable to common stockholders for the nine months ended September 30, 2022 because they were antidilutive to the net income of under $2.6 million .. |
| © CTO Realty Growth, Inc. | ctoreit.com © CTO Realty Growth, Inc. | ctoreit.com 16 Non - GAAP Financial Measures CTO Realty Growth, Inc. Non - GAAP Financial Measures Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited) (In thousands) Three Months Ended September 3 0 , 2022 Net Income Attributable to the Company $ 4, 817 Depreciation and Amortization of Real Estate 7, 283 Gain on Disposition of Assets (4,9 73) Gain on Disposition of Other Assets ( 1,509) Unrealized Loss on Investment Securities 3,754 Distributions to Preferred Stockholders (1 ,19 5) Straight - Line Rent Adjustment ( 600) Amortization of Intangibles to Lease Income 507 Other Non - Cash Amortization ( 29 ) Amortization of Loan Costs and Discount on Convertible Debt 6 4 Non - Cash Compensation 812 Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 2, 819 EBITDA $ 1 1, 750 Annualized EBITDA $ 4 7,000 Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) 3, 834 Pro Forma EBITDA $ 50, 834 Total Long - Term Debt 3 70,248 Financing Costs, Net of Accumulated Amortization 1, 682 Unamortized Convertible Debt Discount 4 04 Cash & Cash Equivalents ( 9,532) Restricted Cash ( 37,292) Net Debt $ 3 25,510 Net Debt to Pro Forma EBITDA 6. 4 x (1) Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activity during th e three months ended September 30 , 2022. |
| © CTO Realty Growth, Inc. | ctoreit.com Capitalization & Dividends $ and shares outstanding in thousands, except per share data. Equity Capitalization Common Shares Outstanding 18,797 Common Share Price $18.74 Total Common Equity Market Capitalization $352,249 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 $427,249 Debt Capitalization Total Debt Outstanding $372,334 Total Capitalization $799,583 Cash, Restricted Cash & Cash Equivalents $46,825 Total Enterprise Value $752,758 Dividends Paid Common Preferred Q4 2021 $0.33 $0.40 Q1 2022 $0.36 $0.40 Q2 2022 $0.37 $0.40 Q3 2022 $0.38 $0.40 Trailing Twelve Months Q3 2022 $1.45 $1.59 Q3 2022 Core FFO Per Diluted Share $0.47 Q3 2022 AFFO Per Diluted Share $0.49 Q3 2022 Core FFO Payout Ratio 80.9% Q3 2022 AFFO Payout Ratio 77.6% Dividend Yield Q3 2022 $0.38 $0.40 Annualized Q3 2022 Dividend $1.52 $1.59 Price Per Share as of September 30, 2022 $18.74 $21.96 Implied Dividend Yield 8.1% 7.3% 17 |
| © CTO Realty Growth, Inc. | ctoreit.com Debt Summary $ in thousands. (1) See reconciliation as part of Non - GAAP Financial Measures in the Company’s Third Quarter 2022 Earnings Release. Indebtedness Outstanding Face Value Interest Rate Maturity Date Type Revolving Credit Facility $38,500 SOFR + 10 bps + [1.25% – 2.20%] January 2027 Variable 2025 Convertible Senior Notes 51,034 3.88% April 2025 Fixed 2026 Term Loan 65,000 SOFR + 10 bps + [1.25% – 2.20%] March 2026 Fixed 2027 Term Loan 100,000 SOFR + 10 bps + [1.25% – 2.20%] January 2027 Fixed 2028 Term Loan 100,000 SOFR + 10 bps + [1.20% – 2.15%] January 2028 Fixed Mortgage Note 17,800 4.06% August 2026 Fixed Total / Wtd .. Avg. $372,334 3.44% Fixed vs. Variable Face Value Interest Rate % of Total Debt Total Fixed Rate Debt 333,834 3.32% 90% Total Variable Rate Debt 38,500 SOFR + 10 bps + [1.25% – 2.20%] 10% Total / Wtd .. Avg. $372,334 3.44% 100% Leverage Metrics Face Value of Debt $372,334 Cash, Restricted Cash & Cash Equivalents ($46,825) Net Debt $325,509 Total Enterprise Value $752,758 Net Debt to Total Enterprise Value 43% Net Debt to Pro Forma EBITDA (1) 6.4x 18 |
| © CTO Realty Growth, Inc. | ctoreit.com Year - to - Date Investments $ in thousands. Property Acquisitions Market Type Date Acquired Square Feet Price Occupancy At Acq .. Price Plaza Shopping Center – Katy, TX Houston, TX Multi - Tenant Retail March 2022 205,813 $39,100 95% Madison Yards – Atlanta, GA Atlanta, GA Multi - Tenant Retail July 2022 162,521 $80,200 99% Total Acquisitions 368,334 $119,300 19 Structured Investments Market Type Date Originated Capital Commitment Structure Phase II of The Exchange at Gwinnett – Buford, GA Atlanta, GA Retail Outparcels January 2022 $8,700 First Mortgage Watters Creek at Montgomery Farm – Allen, TX Dallas, TX Grocery Anchored Retail April 2022 $30,000 Preferred Equity WaterStar Orlando – Kissimmee, FL Orlando, FL Retail Outparcels April 2022 $19,000 First Mortgage Improvement Loan at Ashford Lane – Atlanta, GA Atlanta, GA Tenant Improvement Loan May 2022 $1,500 Landlord Financing Total Structured Investments $59,200 |
| © 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 January 2022 15,500 $6,949 ($60) The Carpenter Hotel – Austin, TX Austin, TX Hospitality Ground Lease March 2022 73,508 17,095 (178) Westland Gateway Plaza – Hialeah, FL Miami, FL Multi - Tenant Retail Master Lease July 2022 108,029 $22,150 $986 Firebirds Wood Fire Grill – Jacksonville, FL Jacksonville, FL Single Tenant Retail September 2022 6,948 $5,513 $931 Chuy’s – Jacksonville, FL Jacksonville, FL Single Tenant Retail September 2022 7,950 $5,825 ($445) 245 Riverside – Jacksonville, FL Jacksonville, FL Multi - Tenant Office September 2022 136,853 $23,550 $3,501 Total Dispositions 348,788 $81,082 $4,735 Year - to - Date Dispositions 20 $ in thousands. |
| © CTO Realty Growth, Inc. | ctoreit.com Portfolio Detail 21 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 277,407 78% 86% $6,790 $24.48 Madison Yards Multi - Tenant Retail 2022 162,521 99% 99% $4,913 $30.23 The Exchange at Gwinnett Multi - Tenant Retail 2021 69,266 92% 96% 2,044 $29.51 Total Atlanta, GA 509,194 87% 91% $13,747 $27.00 Dallas, TX The Shops at Legacy Multi - Tenant Mixed Use 2021 237,366 92% 96% $7,080 $29.83 Westcliff Shopping Center Multi - Tenant Retail 2017 134,693 61% 61% 566 $4.20 Total Dallas, TX 372,059 81% 83% $7,645 $20.55 Raleigh, NC Beaver Creek Crossings Multi - Tenant Retail 2021 321,977 94% 98% $5,143 $15.97 Phoenix, AZ Crossroads Town Center Multi - Tenant Retail 2020 244,843 100% 100% $4,955 $20.24 Jacksonville, FL The Strand at St. Johns Town Center Multi - Tenant Retail 2019 210,973 91% 95% $4,657 $22.07 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 $ in thousands, except per square foot data. |
| © CTO Realty Growth, Inc. | ctoreit.com Portfolio Detail $ in thousands, except per square foot data. 22 Property Type Year Acquired/ Developed Square Feet In - Place Occupancy Leased Occupancy Cash ABR Cash ABR PSF Santa Fe, NM 125 Lincoln & 150 Washington Multi - Tenant Mixed Use 2021 137,209 75% 84% $2,797 $20.38 Tampa, FL Sabal Pavilion Single Tenant Office 2020 120,500 100% 100% $2,265 $18.80 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% $1,623 $25.24 Las Vegas, NV Eastern Commons Multi - Tenant Retail 2021 133,304 100% 100% $1,569 $11.77 Daytona Beach, FL Landshark Bar & Grill Single Tenant Retail 2018 6,264 100% 100% $705 $112.59 Crabby's Oceanside Single Tenant Retail 2018 5,780 100% 100% 280 $48.46 12,044 100% 100% $985 $81.81 Orlando, FL Winter Park Office Multi - Tenant Mixed Use 2021 30,296 84% 100% $350 $11.55 Total Portfolio 2,743,594 92% 94% $54,138 $19.73 |
| © CTO Realty Growth, Inc. | ctoreit.com Leasing Summary $ and square feet in thousands, except per square foot data. 23 Renewals and Extensions Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 8 5 9 22 Square Feet 32.5 10.2 31.8 74.5 New Cash Rent PSF $31.57 $29.28 $29.62 $30.42 Tenant Improvements $368 $0 $0 $368 Leasing Commissions $36 $28 $77 $141 Weighted Average Term 6.2 3.6 5.8 5.7 New Leases Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 10 7 7 24 Square Feet 24.4 30.9 43.4 98.7 New Cash Rent PSF $31.32 $32.66 36.14 $33.86 Tenant Improvements $691 $2,721 $3,025 $6,437 Leasing Commissions $335 $298 $1,033 $1,666 Weighted Average Term 8.9 12.2 8.7 9.8 All Leases Summary Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Leases 18 12 16 46 Square Feet 56.9 41.1 75.2 173.2 New Cash Rent PSF $31.46 $31.82 $33.39 $32.38 Tenant Improvements $1,059 $2,721 $3,025 $6,805 Leasing Commissions $371 $326 $1,110 $1,807 Weighted Average Term 6.6 10.3 7.6 7.9 |
| © CTO Realty Growth, Inc. | ctoreit.com Lease Expiration Schedule $ and square feet in thousands. 24 Year Leases Expiring Expiring SF % of Total Cash ABR % of Total 2022 7 21 0.8% 310 0.6% 2023 23 150 5.5% 3,468 6.4% 2024 22 75 2.7% 2,111 3.9% 2025 19 108 3.9% 3,160 5.8% 2026 37 397 14.5% 7,272 13.4% 2027 40 382 13.9% 5,750 10.6% 2028 21 463 16.9% 9,134 16.9% 2029 27 258 9.4% 5,353 9.9% 2030 26 130 4.7% 3,304 6.1% 2031 26 88 3.2% 2,689 5.0% Thereafter 33 446 16.2% 11,586 21.4% Total 281 2,518 91.8% 54,138 100.0% Vacant 226 8.2% Total 2,744 |
| © CTO Realty Growth, Inc. | ctoreit.com Top Tenant Summary 25 Tenant/Concept Credit Rating (1) Leases Leased Square Feet % of Total Cash ABR % of Total Fidelity A+ 1 210 7.7% 3,567 6.6% Ford Motor Credit BB+ 1 121 4.4% 2,265 4.2% WeWork CCC+ 1 59 2.1% 1,977 3.7% General Dynamics AA - 1 64 2.3% 1,623 3.0% At Home B - 2 192 7.0% 1,576 2.9% Ross/dd’s DISCOUNT BBB+ 4 106 3.8% 1,334 2.5% Best Buy BBB+ 2 82 3.0% 1,224 2.3% Darden Restaurants BBB 3 27 1.0% 1,207 2.2% AMC CCC + 1 39 1.4% 1,102 2.0% Publix Not Rated 1 54 2.0% 1,076 2.0% Harkins Theatres Not Rated 1 56 2.0% 961 1.8% Regal Cinemas D 1 45 1.6% 948 1.8% The Hall at Ashford Lane Not Rated 1 17 0.6% 877 1.6% Hobby Lobby Not Rated 1 55 2.0% 715 1.3% Landshark Bar & Grill Not Rated 1 6 0.2% 705 1.3% Burlington BB+ 1 47 1.7% 699 1.3% PNC Bank A 2 10 0.4% 684 1.3% TJ Maxx/HomeGoods/Marshalls A 1 50 1.8% 526 1.0% Bob’s Discount Furniture Not Rated 1 42 1.5% 509 0.9% Seafood City Not Rated 1 32 1.2% 483 0.9% Other 253 1,203 43.8% 30,080 55.6% Total 281 2,518 91.8% 54,138 100.0% Vacant 226 8.2% Total 2,744 100.0% $ 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 26 Markets Leases Square Feet % of Total Cash ABR % of Total Atlanta, GA 3 509 18.6% 13,747 25.4% Dallas, TX 2 372 13.6% 7,645 14.1% Raleigh, NC 1 322 11.7% 5,143 9.5% Jacksonville, FL 1 211 7.7% 4,657 8.6% Phoenix, AZ 1 245 8.9% 4,955 9.2% Albuquerque, NM 1 210 7.7% 3,567 6.6% Houston, TX 1 206 7.5% 3,164 5.8% Santa Fe, NM 1 137 5.0% 2,797 5.2% Tampa, FL 1 121 4.4% 2,265 4.2% Salt Lake City, UT 1 171 6.2% 1,670 3.1% Las Vegas, NV 1 133 4.9% 1,569 2.9% Washington, DC 1 64 2.3% 1,623 3.0% Daytona Beach, FL 2 12 0.4% 985 1.8% Orlando, FL 1 30 1.1% 350 0.6% Total 18 2,744 100.0% 54,138 100.0% States Properties Square Feet % of Total Cash ABR % of Total Georgia 3 509 18.6% 13,747 25.4% Texas 3 578 21.1% 10,810 20.0% Florida 5 374 13.6% 8,257 15.3% New Mexico 2 347 12.7% 6,364 11.8% North Carolina 1 322 11.7% 5,143 9.5% Arizona 1 245 8.9% 4,955 9.2% Utah 1 171 6.2% 1,670 3.1% Nevada 1 133 4.9% 1,569 2.9% Virginia 1 64 2.3% 1,623 3.0% Total 18 2,744 100.0% 54,138 100.0% $ and square feet in thousands. |
| © CTO Realty Growth, Inc. | ctoreit.com Other Assets $ and shares outstanding in thousands, except per share data. 27 Investment Securities Shares & Operating Partnership Units Owned Value Per Share September 30, 2022 Estimated Value Annualized Dividend Per Share In - Place Annualized Dividend Income Alpine Income Property Trust 2,174 $16.22 $35,260 $1.10 $2,391 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 8,700 324 7.25% Watters Creek at Montgomery Farm Preferred Investment April 2022 April 2025 30,000 30,000 8.50% WaterStar Orlando Construction Loan April 2022 November 2022 19,000 14,249 12.00% Improvement Loan at Ashford Lane Improvement Loan May 2022 April 2025 1,500 1,053 12.00% Total Structured Investments $59,964 $46,390 Subsurface Interests Acreage Estimated Value Acres Available for Sale 355,000 acres $4,500 Mitigation Credits and Rights State Credits Federal Credits Total Book Value Mitigation Credits 32.0 18.8 $2,800 Mitigation Credit Rights 242.0 156.4 20,000 Total Mitigation Credits 274.0 175.2 $22,800 |
| © CTO Realty Growth, Inc. | ctoreit.com 2022 Guidance $ and shares outstanding in millions, except per share data. 28 Low High Acquisition & Structured Investments $271 - $271 Target Initial Investment Cash Yield 7.25% - 7.25% Dispositions $81 - $83 Target Disposition Cash Yield 6.15% - 6.25% Core FFO Per Diluted Share $1.71 - $1.74 AFFO Per Diluted Share $1.79 - $1.82 Weighted Average Diluted Shares Outstanding 18.2 - 18.2 The Company has increased its outlook for 2022 to take into account the Company’s year - to - date performance and revised expectations regarding the Company’s investment activities, forecasted capital markets transactions, leasing activity, and other significant assumptions .. |
| © 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 Floris van Dijkum fvandijkum@compasspointllc.com (646) 757 - 2621 EF Hutton Guarav Mehta gmehta@efhuttongroup.com (212) 970 - 5261 Janney Rob Stevenson robstevenson@janney.com (646) 840 - 3217 Jones Research Jason Stewart jstewart@jonestrading.com (646) 465 - 9932 Raymond James RJ Milligan rjmilligan@raymondjames.com (727) 567 - 2585 29 |
| © CTO Realty Growth, Inc. | ctoreit.com Safe Harbor 30 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 31 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 32 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 loans and 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 loans and 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 33 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 October 27 , 2022 .. ▪ All information is as of September 30 , 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 Third Quarter 2022 Operating Results press release filed on October 27 , 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 .. ▪ “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 Association 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 , 173 , 865 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 .. |
