UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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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 July 25, 2024, 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 June 30, 2024. 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 July 25, 2024, 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 June 30, 2024. 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: July 25, 2024
CTO Realty Growth, Inc.
By: /s/ Philip R. Mays
Senior Vice President, Chief Financial Officer,
and Treasurer (Principal Financial Officer)
Press Release
Contact:Philip R. Mays
Senior Vice President, Chief Financial Officer & Treasurer
(407) 904-3324
pmays@ctoreit.com
FOR IMMEDIATE RELEASE | CTO Realty Growth Reports Second Quarter 2024 Operating Results |
WINTER PARK, FL – July 25, 2024 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended June 30, 2024.
Second Quarter and Recent Highlights
Page 1
CEO Comments
“We are pleased that our strong leasing results over the past year are starting to deliver meaningful Same-Property NOI growth, including an increase of 4% for the first half of the year,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “The strength of our leasing continued this quarter with an 8.8% leasing spread on comparable leases. Given our solid earnings and increased investment activity outlook, we have increased our full-year Core FFO and AFFO guidance by 11.9% and 11.0%, respectively, at the mid-points of the ranges, and are looking forward to an active second half of 2024.”
Quarterly Financial Results Highlights
The table below provides a summary of the Company’s operating results for the three months ended June 30, 2024:
| | Three Months Ended | | | | | |||||
(in thousands, except per share data) |
| June 30, 2024 | | June 30, | | Variance to Comparable Period in the Prior Year | |||||
Net Income Attributable to the Company | | $ | 1,183 | | $ | 1,800 | | $ | (617) | | (34.3)% |
Net Income (Loss) Attributable to Common Stockholders | | $ | (688) | | $ | 605 | | $ | (1,293) | | (213.7)% |
Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | (0.03) | | $ | 0.03 | | $ | (0.06) | | (200.0)% |
| | | | | | | | | | | |
Core FFO Attributable to Common Stockholders (2) | | $ | 10,353 | | $ | 9,608 | | $ | 745 | | 7.8% |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 0.45 | | $ | 0.43 | | $ | 0.02 | | 4.7% |
| | | | | | | | | | | |
AFFO Attributable to Common Stockholders (2) | | $ | 11,051 | | $ | 10,781 | | $ | 270 | | 2.5% |
AFFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 0.48 | | $ | 0.48 | | $ | — | | 0.0% |
| | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 0.40 | | $ | 0.40 | | $ | — | | 0.0% |
Dividends Declared and Paid - Common Stock | | $ | 0.38 | | $ | 0.38 | | $ | — | | 0.0% |
(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 Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
Page 2
Year-to-Date Financial Results Highlights
The table below provides a summary of the Company’s operating results for the six months ended June 30, 2024:
| | Six Months Ended | | | | | |||||
(in thousands, except per share data) |
| June 30, 2024 | | June 30, | | Variance to Comparable Period in the Prior Year | |||||
Net Income (Loss) Attributable to the Company | | $ | 7,025 | | $ | (4,193) | | $ | 11,218 | | 267.5% |
Net Income (Loss) Attributable to Common Stockholders | | $ | 3,967 | | $ | (6,583) | | $ | 10,550 | | 160.3% |
Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.17 | | $ | (0.29) | | $ | 0.46 | | 158.6% |
| | | | | | | | | | | |
Core FFO Attributable to Common Stockholders (2) | | $ | 21,090 | | $ | 18,475 | | $ | 2,615 | | 14.2% |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 0.93 | | $ | 0.82 | | $ | 0.11 | | 13.4% |
| | | | | | | | | | | |
AFFO Attributable to Common Stockholders (2) | | $ | 22,699 | | $ | 20,644 | | $ | 2,055 | | 10.0% |
AFFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 1.00 | | $ | 0.91 | | $ | 0.09 | | 9.9% |
| | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 0.80 | | $ | 0.80 | | $ | — | | 0.0% |
Dividends Declared and Paid - Common Stock | | $ | 0.76 | | $ | 0.76 | | $ | — | | 0.0% |
(1) | The denominator for this measure excludes the impact of 3.6 million and 3.3 million shares for the six months ended June 30, 2024 and 2023, respectively, 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 (Loss) Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
Investments
During the three months ended June 30, 2024, the Company invested $1.5 million into 1.4 acres of land for future development within the West Broad Village property, which was previously acquired in October of 2022.
During the six months ended June 30, 2024, the Company invested $72.5 million into two retail properties totaling 319,066 square feet and one vacant land parcel, and originated one $10.0 million first mortgage structured investment. These investments represent a weighted average going-in cash yield of 8.2%.
Dispositions
During the three months ended June 30, 2024, the Company received proceeds of $15.2 million as an early repayment of our Sabal Pavilion seller-financing loan.
During the six months ended June 30, 2024, the Company sold one retail property for $20.0 million at an exit cash cap rate of 8.2%, generating a gain of $4.6 million.
Page 3
Portfolio Summary
The Company’s income property portfolio consisted of the following as of June 30, 2024:
| | | | | | Wtd. Avg. Remaining |
Asset Type | | # of Properties | | Square Feet | | Lease Term |
Single Tenant | | 6 | | 252 | | 5.7 years |
Multi-Tenant | | 14 | | 3,643 | | 5.0 years |
Total / Wtd. Avg. | | 20 | | 3,895 | | 4.9 years |
Square Feet in thousands. | | | | | | |
Property Type | | # of Properties | | Square Feet | | % of Cash Base Rent |
Retail | | 15 | | 2,467 | | 62.5% |
Office | | 1 | | 210 | | 4.5% |
Mixed-Use | | 4 | | 1,218 | | 33.0% |
Total | | 20 | | 3,895 | | 100.0% |
Square Feet in thousands. | | | | | | |
Leased Occupancy | | 94.6% |
Occupancy | | 92.6% |
Same Property Net Operating Income
During the second quarter of 2024, the Company’s Same-Property NOI totaled $14.9 million, an increase of 2.0% over the comparable prior year period, as presented in the following table:
| | Three Months Ended | | | | | |||||
|
| June 30, 2024 | | June 30, | | Variance to Comparable Period in the Prior Year | |||||
Single Tenant | | $ | 1,292 | | $ | 1,191 | | $ | 101 | | 8.5% |
Multi-Tenant | | | 13,587 | | | 13,391 | | | 196 | | 1.5% |
Total | | $ | 14,879 | | $ | 14,582 | | $ | 297 | | 2.0% |
$ in thousands.
During the six months ended June 30, 2024, the Company’s Same-Property NOI totaled $30.0 million, an increase of 4.0% over the comparable prior year period, as presented in the following table:
| | Six Months Ended | | | | | |||||
|
| June 30, 2024 | | June 30, | | Variance to Comparable Period in the Prior Year | |||||
Single Tenant | | $ | 2,439 | | $ | 2,140 | | $ | 299 | | 14.0% |
Multi-Tenant | | | 27,554 | | | 26,696 | | | 858 | | 3.2% |
Total | | $ | 29,993 | | $ | 28,836 | | $ | 1,157 | | 4.0% |
$ in thousands.
Page 4
Leasing Activity
During the quarter ended June 30, 2024, the Company signed 16 leases totaling 78,593 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 11 leases totaling 57,878 square feet at an average cash base rent of $23.34 per square foot compared to a previous average cash base rent of $21.45 per square foot, representing 8.8% comparable growth.
A summary of the Company’s overall leasing activity for the quarter ended June 30, 2024, is as follows:
| | | | Wtd. Avg. | | Cash Rent per | | Tenant | | Leasing | |||
| | Square Feet | | Lease Term | | Square Foot | | Improvements | | Commissions | |||
New Leases | | 31 | | 8.1 years | | $ | 33.28 | | $ | 865 | | $ | 515 |
Renewals & Extensions | | 48 | | 4.0 years | | | 21.06 | | | 10 | | | 57 |
Total / Wtd. Avg. | | 79 | | 6.0 years | | $ | 25.87 | | $ | 875 | | $ | 572 |
In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings.
During the six months ended June 30, 2024, the Company signed 34 leases totaling 182,707 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 26 leases totaling 152,577 square feet at an average cash base rent of $25.05 per square foot compared to a previous average cash base rent of $17.77 per square foot, representing 41.0% comparable growth.
A summary of the Company’s overall leasing activity for the six months ended June 30, 2024, is as follows:
| | | | Wtd. Avg. | | Cash Rent per | | Tenant | | Leasing | |||
| | Square Feet | | Lease Term | | Square Foot | | Improvements | | Commissions | |||
New Leases | | 101 | | 10.9 years | | $ | 28.29 | | $ | 5,707 | | $ | 1,648 |
Renewals & Extensions | | 82 | | 3.9 years | | | 24.48 | | | 25 | | | 97 |
Total / Wtd. Avg. | | 183 | | 8.0 years | | $ | 26.58 | | $ | 5,732 | | $ | 1,745 |
In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings.
Capital Markets and Balance Sheet
During the quarter ended June 30, 2024, the Company completed the following notable capital markets activities:
| ◾ | Issued 248,960 common shares under its ATM offering program at a weighted average gross price of $17.62 per share, for total net proceeds of $4.3 million. |
| ◾ | Completed a follow-on public offering of 1,718,417 shares of the Company’s 6.375% Series A Cumulative Redeemable Preferred Stock. The Company received net proceeds of $33.1 million, after deducting the underwriting discount and offering expenses payable by the Company, which proceeds were used to pay down our Revolving Credit Facility. |
| ◾ | As of June 30, 2024, the Company has $150 million of undrawn commitments on our Revolving Credit Facility, and $4.8 million of cash on hand for total liquidity of $154.8 million. |
Page 5
The following table provides a summary of the Company’s long-term debt, as of June 30, 2024:
Component of Long-Term Debt | | Principal |
| Maturity Date |
| Interest Rate |
| Wtd. Avg. Rate as of June 30, 2024 | ||||
2025 Convertible Senior Notes | | $ | 51.0 million | | April 2025 | | | 3.875% | | | 3.88% | |
2026 Term Loan (1) | | | 65.0 million | | March 2026 | | | SOFR + 10 bps + | | | 2.87% | |
Mortgage Note (2) | | | 17.8 million | | August 2026 | | | 4.060% | | | 4.06% | |
Revolving Credit Facility (3) | | | 150.0 million | | January 2027 | | | SOFR + 10 bps + | | | 5.07% | |
2027 Term Loan (4) | | | 100.0 million | | January 2027 | | | SOFR + 10 bps + | | | 2.95% | |
2028 Term Loan (5) | | | 100.0 million | | January 2028 | | | SOFR + 10 bps + | | | 5.33% | |
Total Long-Term Debt | | $ | 483.8 million | | | | | | | | | 4.23% |
(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 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. |
(2) | Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. |
(3) | The Company utilized interest rate swaps on $150.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.47% plus the 10 bps SOFR adjustment plus the applicable spread. |
(4) | 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 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. |
(5) | The Company utilized 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. |
As of June 30, 2024, the Company’s net debt to Pro Forma EBITDA was 7.5 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.7 times. As of June 30, 2024, the Company’s net debt to total enterprise value was 47.8%. The Company calculates total enterprise value as the sum of net debt, par value of its 6.375% Series A preferred equity, and the market value of the Company's outstanding common shares.
Dividends
On May 28, 2024, the Company announced a cash dividend on its common stock and Series A Preferred Stock for the second quarter of 2024 of $0.38 per share and $0.40 per share, respectively, payable on June 28, 2024 to stockholders of record as of the close of business on June 13, 2024. The second quarter 2024 common stock cash dividend represents a payout ratio of 84.4% and 79.2% of the Company’s second quarter 2024 Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted, respectively.
Page 6
2024 Outlook
The Company has increased its Core FFO and AFFO outlook for 2024 and has revised certain assumptions to take into account the Company’s year-to-date performance and revised expectations regarding the Company’s acquisition activities. The Company’s outlook for 2024 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions.
The Company’s increased outlook for 2024 is as follows:
| | | Revised Outlook Range for 2024 | | | Change from Prior Outlook | ||||||
| | Low | | High | | Low | | High | ||||
Core FFO per Diluted Share | | $ | 1.81 | to | $ | 1.86 | | $ | 0.21 | to | $ | 0.18 |
AFFO per Diluted Share | | $ | 1.95 | to | $ | 2.00 | | $ | 0.21 | to | $ | 0.18 |
The Company’s 2024 guidance includes but is not limited to the following assumptions:
| ◾ | Same-Property NOI growth of 2% to 4%, including the known impact of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy, and/or tenant lease defaults, and before any impact from potential 2024 income property acquisitions and/or dispositions. |
| ◾ | General and administrative expenses within a range of $15.2 million to $16.2 million. |
| ◾ | Weighted average diluted shares outstanding of 22.9 million shares. |
| ◾ | Year-end 2024 leased occupancy projected to be within a range of 95% to 96% before any impact from potential 2024 income property acquisitions and/or dispositions. |
| ◾ | Investment, including structured investments, between $200 million and $250 million at a weighted average initial cash yield between 8.50% and 9.00%. |
| ◾ | Disposition of assets between $50 million and $75 million at a weighted average exit cash yield between 7.50% and 8.25% |
Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter ended June 30, 2024, on Friday, July 26, 2024, 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 registration link provided in the event details below and you will be provided with dial-in details.
Event Details:
Webcast:https://edge.media-server.com/mmc/p/n6cuxiih
Registration:https://register.vevent.com/register/BI83b768fbc540495da856dfd974c470c9
We encourage participants to register and 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.
Page 7
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, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; 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, 2023 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”), 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.
Page 8
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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, subsurface sales, investment securities, 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, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. 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. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. 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, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, 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
Page 9
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 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) June 30, 2024 |
| December 31, 2023 | ||
ASSETS | | | | | | |
Real Estate: | | | | | | |
Land, at Cost | | $ | 236,207 | | $ | 222,232 |
Building and Improvements, at Cost | | | 601,584 | | | 559,389 |
Other Furnishings and Equipment, at Cost | | | 872 | | | 857 |
Construction in Process, at Cost | | | 4,824 | | | 3,997 |
Total Real Estate, at Cost | | | 843,487 | | | 786,475 |
Less, Accumulated Depreciation | | | (63,547) | | | (52,012) |
Real Estate—Net | | | 779,940 | | | 734,463 |
Land and Development Costs | | | 300 | | | 731 |
Intangible Lease Assets—Net | | | 95,054 | | | 97,109 |
Investment in Alpine Income Property Trust, Inc. | | | 36,561 | | | 39,445 |
Mitigation Credits | | | 355 | | | 1,044 |
Commercial Loans and Investments | | | 50,323 | | | 61,849 |
Cash and Cash Equivalents | | | 4,794 | | | 10,214 |
Restricted Cash | | | 1,363 | | | 7,605 |
Refundable Income Taxes | | | 85 | | | 246 |
Deferred Income Taxes—Net | | | 2,147 | | | 2,009 |
Other Assets | | | 38,846 | | | 34,953 |
Total Assets | | $ | 1,009,768 | | $ | 989,668 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Liabilities: | | | | | | |
Accounts Payable | | $ | 1,787 | | $ | 2,758 |
Accrued and Other Liabilities | | | 14,713 | | | 18,373 |
Deferred Revenue | | | 5,371 | | | 5,200 |
Intangible Lease Liabilities—Net | | | 13,421 | | | 10,441 |
Long-Term Debt | | | 482,661 | | | 495,370 |
Total Liabilities | | | 517,953 | | | 532,142 |
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, 4,697,225 shares issued and outstanding at June 30, 2024 and 2,978,808 shares issued and outstanding at December 31, 2023 | | | 47 | | | 30 |
Common Stock – 500,000,000 shares authorized; $0.01 par value, 23,115,110 shares issued and outstanding at June 30, 2024 and 22,643,034 shares issued and outstanding at December 31, 2023 | | | 231 | | | 226 |
Additional Paid-In Capital | | | 207,882 | | | 168,435 |
Retained Earnings | | | 268,269 | | | 281,944 |
Accumulated Other Comprehensive Income | | | 15,386 | | | 6,891 |
Total Stockholders’ Equity | | | 491,815 | | | 457,526 |
Total Liabilities and Stockholders’ Equity | | $ | 1,009,768 | | $ | 989,668 |
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CTO Realty Growth, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share, per share and dividend data)
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | | June 30, | | June 30, | ||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Revenues | | | | | | | | | | | | |
Income Properties | | $ | 25,878 | | $ | 22,758 | | $ | 50,501 | | $ | 45,190 |
Management Fee Income | | | 1,131 | | | 1,102 | | | 2,236 | | | 2,200 |
Interest Income From Commercial Loans and Investments | | | 1,441 | | | 1,056 | | | 2,792 | | | 1,851 |
Real Estate Operations | | | 395 | | | 1,131 | | | 1,443 | | | 1,523 |
Total Revenues | | | 28,845 | | | 26,047 | | | 56,972 | | | 50,764 |
Direct Cost of Revenues | | | | | | | | | | | | |
Income Properties | | | (8,080) | | | (6,670) | | | (14,833) | | | (13,823) |
Real Estate Operations | | | (259) | | | (639) | | | (1,078) | | | (724) |
Total Direct Cost of Revenues | | | (8,339) | | | (7,309) | | | (15,911) | | | (14,547) |
General and Administrative Expenses | | | (3,459) | | | (3,327) | | | (7,675) | | | (7,054) |
Provision for Impairment | | | (67) | | | — | | | (115) | | | (479) |
Depreciation and Amortization | | | (11,549) | | | (10,829) | | | (22,480) | | | (21,145) |
Total Operating Expenses | | | (23,414) | | | (21,465) | | | (46,181) | | | (43,225) |
Gain on Disposition of Assets | | | — | | | 1,101 | | | 9,163 | | | 1,101 |
Other Gain | | | — | | | 1,101 | | | 9,163 | | | 1,101 |
Total Operating Income | | | 5,431 | | | 5,683 | | | 19,954 | | | 8,640 |
Investment and Other Income (Loss) | | | 1,429 | | | 1,811 | | | (1,830) | | | (2,480) |
Interest Expense | | | (5,604) | | | (5,211) | | | (11,133) | | | (9,843) |
Income Before Income Tax Benefit (Expense) | | | 1,256 | | | 2,283 | | | 6,991 | | | (3,683) |
Income Tax Benefit (Expense) | | | (73) | | | (483) | | | 34 | | | (510) |
Net Income (Loss) Attributable to the Company | | | 1,183 | | | 1,800 | | | 7,025 | | | (4,193) |
Distributions to Preferred Stockholders | | | (1,871) | | | (1,195) | | | (3,058) | | | (2,390) |
Net Income (Loss) Attributable to Common Stockholders | | $ | (688) | | $ | 605 | | $ | 3,967 | | $ | (6,583) |
| | | | | | | | | | | | |
Per Share Information: | | | | | | | | | | | | |
Basic and Diluted Net Income (Loss) Attributable to Common Stockholders | | $ | (0.03) | | | 0.03 | | | 0.17 | | | (0.29) |
| | | | | | | | | | | | |
Weighted Average Number of Common Shares | | | | | | | | | | | | |
Basic | | | 22,787,252 | | | 22,482,957 | | | 22,669,246 | | | 22,593,280 |
Diluted | | | 22,828,148 | | | 22,482,957 | | | 22,674,796 | | | 22,593,280 |
| | | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 0.40 | | $ | 0.40 | | $ | 0.80 | | $ | 0.80 |
Dividends Declared and Paid - Common Stock | | $ | 0.38 | | $ | 0.38 | | $ | 0.76 | | $ | 0.76 |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Same-Property NOI Reconciliation
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 | ||||
Net Income (Loss) Attributable to the Company | | $ | 1,183 | | $ | 1,800 | | $ | 7,025 | | $ | (4,193) |
Gain on Disposition of Assets, Net of Tax | | | — | | | (1,101) | | | (9,163) | | | (1,101) |
Provision for Impairment | | | 67 | | | — | | | 115 | | | 479 |
Depreciation and Amortization | | | 11,549 | | | 10,829 | | | 22,480 | | | 21,145 |
Amortization of Intangibles to Lease Income | | | (244) | | | (627) | | | (718) | | | (1,306) |
Straight-Line Rent Adjustment | | | 346 | | | (122) | | | 1,039 | | | 129 |
COVID-19 Rent Repayments | | | — | | | (17) | | | — | | | (43) |
Accretion of Tenant Contribution | | | 13 | | | 38 | | | 26 | | | 76 |
Interest Expense | | | 5,604 | | | 5,211 | | | 11,133 | | | 9,843 |
General and Administrative Expenses | | | 3,459 | | | 3,327 | | | 7,675 | | | 7,054 |
Investment and Other Income (Loss) | | | (1,429) | | | (1,811) | | | 1,830 | | | 2,480 |
Income Tax Benefit (Expense) | | | 73 | | | 483 | | | (34) | | | 510 |
Real Estate Operations Revenues | | | (395) | | | (1,131) | | | (1,443) | | | (1,523) |
Real Estate Operations Direct Cost of Revenues | | | 259 | | | 639 | | | 1,078 | | | 724 |
Management Fee Income | | | (1,131) | | | (1,102) | | | (2,236) | | | (2,200) |
Interest Income From Commercial Loans and Investments | | | (1,441) | | | (1,056) | | | (2,792) | | | (1,851) |
Other Non-Recurring Items (1) | | | (303) | | | — | | | (553) | | | — |
Less: Impact of Properties Not Owned for the Full Reporting Period | | | (2,731) | | | (778) | | | (5,469) | | | (1,387) |
Same-Property NOI | | $ | 14,879 | | $ | 14,582 | | $ | 29,993 | | $ | 28,836 |
| (1) | Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations
Attributable to Common Stockholders
(Unaudited)
(In thousands, except per share data)
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 | ||||
Net Income (Loss) Attributable to the Company | | $ | 1,183 | | $ | 1,800 | | $ | 7,025 | | $ | (4,193) |
Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) | | | — | | | — | | | — | | | — |
Net Income (Loss) Attributable to the Company, If-Converted | | $ | 1,183 | | $ | 1,800 | | $ | 7,025 | | $ | (4,193) |
Depreciation and Amortization of Real Estate | | | 11,532 | | | 10,816 | | | 22,447 | | | 21,118 |
Gain on Disposition of Assets, Net of Tax | | | — | | | (824) | | | (9,163) | | | (824) |
Gain on Disposition of Other Assets | | | (139) | | | (490) | | | (370) | | | (813) |
Provision for Impairment | | | 67 | | | — | | | 115 | | | 479 |
Realized and Unrealized Loss (Gain) on Investment Securities | | | (663) | | | 1,174 | | | 3,376 | | | 6,092 |
Extinguishment of Contingent Obligation | | | — | | | (2,300) | | | — | | | (2,300) |
Funds from Operations | | $ | 11,980 | | $ | 10,176 | | $ | 23,430 | | $ | 19,559 |
Distributions to Preferred Stockholders | | | (1,871) | | | (1,195) | | | (3,058) | | | (2,390) |
Funds From Operations Attributable to Common Stockholders | | $ | 10,109 | | $ | 8,981 | | $ | 20,372 | | $ | 17,169 |
Amortization of Intangibles to Lease Income | | | 244 | | | 627 | | | 718 | | | 1,306 |
Less: Effect of Dilutive Interest Related to 2025 Notes (1) | | | — | | | — | | | — | | | — |
Core Funds From Operations Attributable to Common Stockholders | | $ | 10,353 | | $ | 9,608 | | $ | 21,090 | | $ | 18,475 |
Adjustments: | | | | | | | | | | | | |
Straight-Line Rent Adjustment | | | (346) | | | 122 | | | (1,039) | | | (129) |
COVID-19 Rent Repayments | | | — | | | 17 | | | — | | | 43 |
Other Depreciation and Amortization | | | (3) | | | (57) | | | (7) | | | (116) |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 297 | | | 229 | | | 518 | | | 437 |
Non-Cash Compensation | | | 750 | | | 862 | | | 2,137 | | | 1,934 |
Adjusted Funds From Operations Attributable to Common Stockholders | | $ | 11,051 | | $ | 10,781 | | $ | 22,699 | | $ | 20,644 |
| | | | | | | | | | | | |
FFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.44 | | $ | 0.40 | | $ | 0.90 | | $ | 0.76 |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.45 | | $ | 0.43 | | $ | 0.93 | | $ | 0.82 |
AFFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.48 | | $ | 0.48 | | $ | 1.00 | | $ | 0.91 |
| (1) | For the three and six months ended June 30, 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Reconciliation of Net Debt to Pro Forma EBITDA
(Unaudited)
(In thousands)
| | Three Months Ended | | |
| | June 30, 2024 | | |
Net Income Attributable to the Company | | $ | 1,183 | |
Depreciation and Amortization of Real Estate | | | 11,532 | |
Gain on Disposition of Other Assets | | | (139) | |
Provision for Impairment | | | 67 | |
Unrealized Gain on Investment Securities | | | (663) | |
Distributions to Preferred Stockholders | | | (1,871) | |
Amortization of Intangibles to Lease Income | | | 244 | |
Straight-Line Rent Adjustment | | | (346) | |
Other Depreciation and Amortization | | | (3) | |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 297 | |
Non-Cash Compensation | | | 750 | |
Other Non-Recurring Items (1) | | | (303) | |
Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt | | | 5,308 | |
EBITDA | | $ | 16,056 | |
| | | | |
Annualized EBITDA | | $ | 64,224 | |
Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net (2) | | | (244) | |
Pro Forma EBITDA | | $ | 63,980 | |
| | | | |
Total Long-Term Debt | | $ | 482,661 | |
Financing Costs, Net of Accumulated Amortization | | | 1,048 | |
Unamortized Convertible Debt Discount | | | 125 | |
Cash and Cash Equivalents | | | (4,794) | |
Net Debt | | $ | 479,040 | |
| | | | |
Net Debt to Pro Forma EBITDA | | | 7.5 | x |
(1) | Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
(2) | Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s investments and disposition activity during the three months ended June 30, 2024. |
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| July 2024 Investor Presentation The Collection at Forsyth | Cumming, GA |
| 2 © CTO Realty Growth, Inc. | ctoreit.com Positioned for Performance 1. Based on $17.46 per share common stock price as of June 30, 2024. 2. Based on $15.56 per share common stock price as of June 30, 2024. 3. Investment and disposition activity includes both properties and structured investments from Q1 2019 – Q2 2024. 8.6% Implied Cap Rate1 $404M $484M $1.0B Equity Market Cap1 Outstanding Debt Enterprise Value (Net of Cash) Series A Preferred $117M 8.7% Current Annualized Dividend Yield1 $37M Investment in Alpine Income Property Trust2 $1.95 – $2.00 2024 AFFO Per Share Guidance Range 2024 AFFO Multiple at revised guidance midpoint 8.8x 3.9 M 71% Square Feet of Portfolio ABR from Georgia, Texas and Florida West Broad Village Glen Allen, VA Total investment activity in past 5-years3 $1.2 billion Total disposition activity in past 5-years3 $0.7 billion Small-cap shopping center REIT focused on open air centers in fast growing MSAs in the Southeast and Southwest |
| 3 © CTO Realty Growth, Inc. | ctoreit.com Investment Highlights Differentiated Investment Strategy Focusing on Asset Recycling and Value-Add Acquisitions Southeast and Southwest Retail Portfolio Large format retail portfolio in strong locations within attractive business-friendly markets with supportive demographics and outsized long-term growth potential Active Asset Management Emphasizing Operational Upside West Broad Village Glen Allen, VA Shops at Legacy North Plano, TX Legacy North Plano, TX The Collection at Forsyth Cumming, GA Ashford Lane Atlanta, GA Madison Yards Atlanta, GA The Collection at Forsyth Cumming, GA The Strand at St. John’s Town Center Jacksonville, FL 1. Based on $17.46 per share common stock price as of June 30, 2024. Stable and Flexible Balance Sheet Ample Liquidity and No Upcoming Debt Maturities Investing Below Replacement Cost Implied Real Estate Value is $257 PSF1 Experienced Leadership Team With Deep Real Estate Relationships & Experience |
| 4 © CTO Realty Growth, Inc. | ctoreit.com Levers for Future Growth CTO’s proactive approach to portfolio and asset management has resulted in the execution of multiple strategic transactions and beneficial initiatives to drive future growth. Executing on Asset Recycling ▪ Expecting full year 2024 investments of $200 million to $250 million and dispositions of $50 million to $75 million ▪ In March 2024, purchased Marketplace at Seminole Towne Center, a 315,000 square foot multi-tenant retail power center anchored by Ross Dress for Less and TJX Companies in the Sanford submarket of Orlando, FL for $68.7 million ▪ In March 2024, sold the 136,000 square foot mixed-use property in Santa Fe, NM for $20.0 million, for a total gain of $4.6 million, immediately reinvesting the proceeds into Marketplace at Seminole Towne Center ▪ In February 2024, sold the remaining non-income producing mineral rights & interests totaling approximately 352,000 acres in 19 counties in the State of Florida for gross proceeds of $5.0 million Operational Momentum ▪ YTD 2024, executed 34 leases across approximately 183,000 square feet including a replacement tenant for Regal Theaters at Beaver Creek Commons in Apex, NC ▪ As of June 30, 2024, a signed but not open lease pipeline representing almost $5 million of future base rents Balance Sheet ▪ As of June 30, 2024, CTO had $155 million of liquidity, no debt maturities during the remainder of 2024, and staggered debt maturities thereafter. Ashford Lane Culinary Dropout |
| 5 © CTO Realty Growth, Inc. | ctoreit.com Attractive Relative Valuation is an Opportunity for Mean Reversion CTO has an outsized dividend yield and attractive absolute valuation relative to many in its retail-focused peer group and its long-term growth opportunities. Ashford Lane Atlanta, GA 2024E FFO Multiple1,2 14.9x 14.9x 14.1x 14.1x 14.1x 13.0x 12.2x 11.0x 10.9x 9.8x 9.5x 3.6% 4.3% 3.7% 4.0% 3.7% 3.8% 4.9% 4.7% 4.5% 6.0% 8.7% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x SITC FRT IVT AKR UE WSR KIM BRX KRG AAT CTO Annualized Dividend Yield1,2 1. CTO’s 2024E FFO multiple and dividend yield are based on $17.46 per share common stock price as of June 30, 2024. 2. All dividend yields and 2024E FFO multiples are based on the closing stock price on June 30, 2024, using current annualized dividends and 2024E FFO per share estimates for the peer companies from the KeyBanc Leaderboard report dated June 28, 2024. 2024E FFO per share for CTO reflects the midpoint of Core FFO guidance provided on July 25, 2024. If CTO traded at the 2024E FFO peer average multiple of 12.9x, it’s stock price would be $23.69 per share, implying 44% annual total return1 |
| 6 © CTO Realty Growth, Inc. | ctoreit.com Investment Strategy Focused on high-quality open-air shopping centers primarily located in the Southeast and Southwest. Multi-Tenant, Retail Asset Strategy ▪ Focused on retail-based, large format, 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 ▪ Opportunistic investment structures based on leveraging existing relationships for the risk-adjusted returns and long-term market valuation ▪ 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 Legacy Assets ▪ CTO has a select number of legacy assets, that when monetized, will unlock meaningful equity to be redeployed into core strategy assets that may drive higher cash flow, Core FFO and AFFO per share Alpine Income Property Trust and Management Fee Income ▪ 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 Retail-Based, Large Format Value-Add Income Property Acquisitions Monetize Legacy and Non-Core Assets to Drive Growth Manage and Retain Ownership in Alpine REIT (NYSE:PINE) Focused Execution |
| 7 © CTO Realty Growth, Inc. | ctoreit.com Durable Portfolio with Meaningful Growth Opportunities Repositioning Upside Essential Retail Stable Cash Flow Strong performing, larger format open-air shopping centers 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. Ashford Lane | Atlanta, GA The Collection at Forsyth | Cumming, GA The Shops at Legacy North | Plano, TX West Broad Village | Glen Allen, VA The Exchange at Gwinnett | Buford, GA Madison Yards | Atlanta, GA Crossroads Towne Center | Chandler, AZ Beaver Creek Crossings | Apex, NC The Strand at St. Johns Town Center | Jacksonville, FL |
| 8 © CTO Realty Growth, Inc. | ctoreit.com Building a Leading Retail-Focused Portfolio All values are as of year-end for their respective years, unless otherwise noted. 1. 2019 represents the year Alpine income Property Trust, Inc. (PINE) completed it’s IPO with a portfolio contributed from CTO. It also signifies the year CTO changed its investment strategy to focus on multi-tenant, retail-focused properties largely located in CTO’s newly defined target markets. 20191 2024 Number of Properties 34 20 Total Portfolio Square Feet 1.8M 3.9M Occupancy 95% 93% Annualized Base Rent $27.6M $81.1M % of ABR from Multi-Tenant 28% Multi-Tenant 93% Multi-Tenant % of ABR from Retail & Mixed-Use 60% Retail & Mixed-Use 96% Retail & Mixed-Use % of ABR from Grocery-Anchored Properties 4% Grocery 22% Grocery Top Tenant as a % of ABR 12% Fidelity (S&P: A+) 5% Fidelity (S&P: A+) Top Market as a % of ABR 31% Jacksonville 36% Atlanta Value of PINE Shares & Units at Quarter-End $32.4M $36.6M Ashford Lane Atlanta, GA |
| 9 © CTO Realty Growth, Inc. | ctoreit.com High-Quality Demographic-Driven Portfolio Percentages listed based on Annualized Base Rent for the Company’s portfolio as of June 30, 2024. Any differences 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 “2024 Emerging Trends in Real Estate” publication. CTO Property Atlanta, GA 36% Dallas, TX 14% Richmond, VA 11% Orlando, FL 8% Jacksonville, FL 6% Raleigh, NC 6% Phoenix, AZ 6% Albuquerque, NM 4% Houston, TX 4% Other 5% Denotes an MSA with over one million people; Bold denotes a Top 30 ULI Market2 % of Annualized Rent By State 204,861 Portfolio Average 5-Mile Population1 $134,706 Portfolio Average 5-Mile Household Income1 85% Percentage of Portfolio ABR from ULI’s Top 30 Markets1 > 15% 10% - 15% 5% - 10% < 5% ▪ 22% of ABR from Grocery-Anchored Properties ▪ 39% of ABR from Retail Power Centers ▪ 31% of ABR from Retail-Focused Lifestyle & Mixed-Use Properties |
| 10 © CTO Realty Growth, Inc. | ctoreit.com Faster Growing Markets Shops at Legacy Mexican Sugar 81% 60% 49% 21% 11% 10% 8% 6% 5% 0% WSR AAT CTO KRG UE SITC FRT AKR BRX KIM % of Each Company’s Top 5 Markets in ULI’s Top 10 Markets1 The recent assemblage of CTO’s portfolio has allowed it to focus on acquiring properties in faster growing markets in business-friendly states, benefitting from population growth and corresponding tenant demand. As of June 30, 2024, unless otherwise noted. Peer information based on published information available through each company’s website as of July 24, 2024. Portfolio information for CTO is as of June 30, 2024. 1. As ranked by Urban Land Institute & PWC in the “2024 Emerging Trends in Real Estate” publication. |
| 11 © CTO Realty Growth, Inc. | ctoreit.com Strong Leasing Execution 1. Recently signed renewals and leases include leases signed in Q1 ‘24 thru Q2 ‘24. 2. Excludes newly leased units that were acquired as vacant. Lease Rollover Schedule % of ABR Expiring 3% 8% 13% 12% 23% 9% 7% 5% 20% Recently Signed Leases1 ▪ YTD 2024 Comparable Leasing Spreads2 41.0% o 128% new lease spreads (excluding acquired vacancy) o 5% options & renewal spreads ▪ Current Occupancy 93% Leased Occupancy 95% o More than 200 bps of future occupancy pickup based on current spread between Occupancy and Leased Occupancy ▪ Signed Not Open (SNO) Pipeline represents 6% of the existing portfolio’s Cash ABR |
| 12 © CTO Realty Growth, Inc. | ctoreit.com PINE Company Profile 1. Based on $15.56 per share common stock price as of June 30, 2024. PINE has a high-quality, 100% retail net lease portfolio with a stable and attractive dividend and attractive valuation Dividend Yield1 7.1% Implied Cap Rate 8.5% Number of Properties 137 Number of States with a Property 34 Total Portfolio Square Feet 3.8M Annualized Base Rent $39.8M % of ABR from Investment Grade Rated Tenants 67% % of ABR from Credit Rated Tenants 90% Diversified Geographic Footprint High-Quality Top Tenancy ≈ 16% CTO’s Ownership Interest in Alpine Income Property Trust ≈ $37 Million CTO’s Investment in Alpine Income Property Trust1 % of Annualized Base Rent By State > 7% 3% - 7% 2% - 3% < 2% ≈ $41 Million as of July 22, 2024 (2.35 million shares and units at $17.27 share price) |
| 13 © CTO Realty Growth, Inc. | ctoreit.com Consistent Dividend Growth CTO has been a REIT since 2020 and the company has paid a common dividend each of the last 48 years. 1. Reflects Q2 2024 annualized per share common stock cash dividend. 2. Annualized Per Share Cash Dividend Yield based on $17.46 per share common stock price as of June 30, 2024. $0.01 $0.01 $0.02 $0.02 $0.02 $0.03 $0.05 $0.07 $0.12 $0.91 $1.33 $1.49 $1.52 $1.52 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Common Dividend Per Share Paid Company policy is to target a payout ratio of 100% of taxable income Increasing cash flow and earnings have driven a more than 67% increase to CTO’s annualized common stock dividend since 2020 Current Annualized Per Share Cash Dividend $1.52 Annualized Per Share Cash Dividend Yield 8.7% 2 Under current management (beginning in 2011), the Company’s common stock cash dividend has grown in each of the last 12 years Dividend increases are driven by increasing taxable income and free cash flow Q2 2024 AFFO per share common stock dividend payout ratio of 79% Cash Dividend Per Share Paid (Split Adjusted) 1 |
| 14 © CTO Realty Growth, Inc. | ctoreit.com Balance Sheet Exchange at Gwinnett Buford, GA Yonder Yoga $51 $83 $100 $250 2024 2025 2026 2027 2028 2029 2030 Unsecured Secured Revolving Credit Facility 1. Reflects $150 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, subject 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 average fixed swap rate of 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. 3. The Company utilized interest rate swaps on $150.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.47% plus the 10 bps SOFR adjustment plus the applicable spread. 4. 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 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. 5. The Company utilized 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. 6. As of 6/30/2024 Debt Maturities ▪ Adequate liquidity for opportunistic growth ▪ No near-term debt maturities ▪ Well-staggered debt maturity schedule ▪ Forward hedges out to 2033 to minimize interest rate volatility ▪ 48% net debt-to-total enterprise value (TEV) ▪ Q2 2024 quarter-end net debt-to-pro forma EBITDA of 7.5x ▪ Currently no floating rate debt on the Revolving Credit Facility6 ▪ $150 million undrawn commitments on the Revolving Credit Facility 1 Component of Long-Term Debt Type Principal Interest Rate 2025 Convertible Senior Notes Fixed $51 million 3.88% 2026 Term Loan2 Fixed $65 million SOFR + 10 bps + [1.25% - 2.20%] Mortgage Note Fixed $18 million 4.06% Revolving Credit Facility Floating $0 million SOFR + 10 bps + [1.25% - 2.20%] Revolving Credit Facility3 Fixed $150 million SOFR + 10 bps + [1.25% - 2.20%] 2027 Term Loan4 Fixed $100 million SOFR + 10 bps + [1.25% - 2.20%] 2028 Term Loan5 Fixed $100 million SOFR + 10 bps + [1.20% - 2.15%] Total Debt $484 million 4.23% |
| 15 © CTO Realty Growth, Inc. | ctoreit.com 2024 Revised Guidance Exchange at Gwinnett Buford, GA Yonder Yoga Previous 2024 Revised 2024 Core FFO Per Diluted Share $1.60 - $1.68 $1.81 – $1.86 $0.21 - $0.18 12% AFFO Per Diluted Share $1.74 - $1.82 $1.95 - $2.00 $0.21 - $0.18 11% The Company’s estimated Core FFO per diluted share and AFFO per diluted share for 2024 is as follows: Same-Property NOI Growth1,2 2% - 4% 2% - 4% No Change General and Administrative Expense $15.2 - $16.2 $15.2 - $16.2 No Change Weighted Average Diluted Shares Outstanding 22.5 22.9 0.4 Year-end 2024 Leased Occupancy2 95% - 96% 95% - 96% No Change Investments $100 - $150 $200 - $250 $100 - $100 Target Initial Investment Cash Yield 7.75% - 8.25% 8.50% - 9.00% 75 bps – 75 bps Dispositions $50 - $75 $50 - $75 No Change Target Disposition Cash Yield 7.50% - 8.25% 7.50% - 8.25% No Change The Company’s 2024 revised guidance includes but is not limited to the following assumptions: $ and shares outstanding in millions, except per share data. 1. Includes the known effects of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy and/or tenant lease defaults. 2. Before potential impact from income producing acquisitions and dispositions. Increase (Decrease) Midpoint % Increase |
| 16 © CTO Realty Growth, Inc. | ctoreit.com Experienced Management Team Exchange at Gwinnett Buford, GA Yonder Yoga 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) Philip R. Mays Senior Vice President, Chief Financial Officer & Treasurer ▪ Former Chief Financial Officer & Treasurer of Shadowbox Studios; EVP, Chief Financial Officer & Treasurer of Cedar Realty; and Vice President and Chief Accounting Officer of Federal Realty (NYSE: FRT) 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) CTO Realty Growth is led by an experienced management team with meaningful shareholder alignment, deep industry relationships and a strong long-term track record. Lisa M Vorakoun Senior Vice President and Chief Accounting Officer ▪ Former Assistant Finance Director of the City of DeLand, Florida and Audit Manager for James Moore & Company, an Accounting and Consulting Firm Matt J. Trau Vice President, Investments ▪ Former Senior Director of Transactions at ShopCore Properties; Senior Associate of Transactions at DDR Corp (currently Site Centers NYSE: SITC) |
| 17 © CTO Realty Growth, Inc. | ctoreit.com Corporate Responsibility Exchange at Gwinnett Buford, GA Yonder Yoga CTO Realty Growth is committed to sustainability, strong corporate governance, and meaningful corporate social responsibility programs. 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 |
| 18 © CTO Realty Growth, Inc. | ctoreit.com Environmental Responsibility Yonder Yoga Over the past ten 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 |
| 19 © CTO Realty Growth, Inc. | ctoreit.com Forward Looking Statements & Non-GAAP Financial Measures Forward Looking Statements Certain statements contained in this presentation (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, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; 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, 2023 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 presentation to reflect subsequently occurring events or circumstances. Non-GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, subsurface sales, investment securities, 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. |
| 20 © CTO Realty Growth, Inc. | ctoreit.com Non-GAAP Financial Measures Non-GAAP Financial Measures (continued) 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, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. 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. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. 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, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, 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 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. |
| 21 © CTO Realty Growth, Inc. | ctoreit.com References References and terms used in this presentation that are in addition to terms defined in the Non-GAAP Financial Measures include: ▪ This presentation was published on July 25, 2024. ▪ All information is as of June 30, 2024, unless otherwise noted. ▪ Any calculation differences are assumed to be a result of rounding. ▪ “2024 Guidance” in this presentation is based on the 2024 Guidance provided in the Company’s Second Quarter 2024 Operating Results press release filed on July 25, 2024. ▪ “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 Base Rent”, “ABR” or “Rent” and the statistics based on ABR are calculated based on the current portfolio and represent straight-line rent calculated in accordance with GAAP. ▪ “Annualized Cash Base Rent”, “Cash ABR” and the statistics based on Cash ABR are calculated based on the current portfolio and represent the annualized cash base rent calculated in accordance with GAAP due from the tenants at a specific point in time. ▪ “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”). The Company defines an Investment Grade Rated Tenant as 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 of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and Moody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. ▪ “Dividend” or “Dividends”, subject to the required dividends to maintain the Company’s 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 2,349,651 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price as of the referenced period on the respective slide. ▪ “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 total long-term debt as presented on the face of the 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. |
| 22 © CTO Realty Growth, Inc. | ctoreit.com Consolidated Statements of Operations CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited, in thousands, except share, per share and dividend data) Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Revenues Income Properties $ 25,878 $ 22,758 $ 50,501 $ 45,190 Management Fee Income 1,131 1,102 2,236 2,200 Interest Income From Commercial Loans and Investments 1,441 1,056 2,792 1,851 Real Estate Operations 395 1,131 1,443 1,523 Total Revenues 28,845 26,047 56,972 50,764 Direct Cost of Revenues Income Properties (8,080) (6,670) (14,833) (13,823) Real Estate Operations (259) (639) (1,078) (724) Total Direct Cost of Revenues (8,339) (7,309) (15,911) (14,547) General and Administrative Expenses (3,459) (3,327) (7,675) (7,054) Provision for Impairment (67) — (115) (479) Depreciation and Amortization (11,549) (10,829) (22,480) (21,145) Total Operating Expenses (23,414) (21,465) (46,181) (43,225) Gain on Disposition of Assets — 1,101 9,163 1,101 Other Gain — 1,101 9,163 1,101 Total Operating Income 5,431 5,683 19,954 8,640 Investment and Other Income (Loss) 1,429 1,811 (1,830) (2,480) Interest Expense (5,604) (5,211) (11,133) (9,843) Income Before Income Tax Benefit (Expense) 1,256 2,283 6,991 (3,683) Income Tax Benefit (Expense) (73) (483) 34 (510) Net Income (Loss) Attributable to the Company 1,183 1,800 7,025 (4,193) Distributions to Preferred Stockholders (1,871) (1,195) (3,058) (2,390) Net Income (Loss) Attributable to Common Stockholders $ (688) $ 605 $ 3,967 $ (6,583) Earnings Per Share: Basic and Diluted $ (0.03) $ 0.03 $ 0.17 $ (0.29) Weighted Average Number of Common Shares Basic 22,787,252 22,482,957 22,669,246 22,593,280 Diluted 22,828,148 22,482,957 22,674,796 22,593,280 |
| 23 © CTO Realty Growth, Inc. | ctoreit.com Non-GAAP Financial Measures CTO Realty Growth, Inc. Non-GAAP Financial Measures (Unaudited, in thousands, except per share data) 1. For the three and six months ended June 30, 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Net Income (Loss) Attributable to the Company $ 1,183 $ 1,800 $ 7,025 $ (4,193) Add Back: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes1 — — — — Net Income (Loss) Attributable to the Company, If-Converted $ 1,183 $ 1,800 $ 7,025 $ (4,193) Depreciation and Amortization of Real Estate 11,532 10,816 22,447 21,118 Gain on Disposition of Assets, Net of Tax — (824) (9,163) (824) Gain on Disposition of Other Assets (139) (490) (370) (813) Provision for Impairment 67 — 115 479 Realized and Unrealized Loss (Gain) on Investment Securities (663) 1,174 3,376 6,092 Extinguishment of Contingent Obligation — (2,300) — (2,300) Funds from Operations $ 11,980 $ 10,176 $ 23,430 $ 19,559 Distributions to Preferred Stockholders (1,871) (1,195) (3,058) (2,390) Funds from Operations Attributable to Common Stockholders $ 10,109 $ 8,981 $ 20,372 $ 17,169 Amortization of Intangibles to Lease Income 244 627 718 1,306 Less: Effect of Dilutive Interest Related to 2025 Notes1 — — — — Core Funds from Operations Attributable to Common Stockholders $ 10,353 $ 9,608 $ 21,090 $ 18,475 Adjustments: Straight-Line Rent Adjustment (346) 122 (1,039) (129) COVID-19 Rent Repayments — 17 — 43 Other Depreciation and Amortization (3) (57) (7) (116) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 297 229 518 437 Non-Cash Compensation 750 862 2,137 1,934 Adjusted Funds from Operations Attributable to Common Stockholders $ 11,051 $ 10,781 $ 22,699 $ 20,644 FFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.44 $ 0.40 $ 0.90 $ 0.76 Core FFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.45 $ 0.43 $ 0.93 $ 0.82 AFFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.48 $ 0.48 $ 1.00 $ 0.91 |
| 24 © CTO Realty Growth, Inc. | ctoreit.com Same-Property NOI CTO Realty Growth, Inc. Same-Property NOI Reconciliation (Unaudited, in thousands) 1. Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Net Income (Loss) Attributable to the Company $ 1,183 $ 1,800 $ 7,025 $ (4,193) Gain on Disposition of Assets, Net of Tax — (1,101) (9,163) (1,101) Provision for Impairment 67 — 115 479 Depreciation and Amortization 11,549 10,829 22,480 21,145 Amortization of Intangibles to Lease Income (244) (627) (718) (1,306) Straight-Line Rent Adjustment 346 (122) 1,039 129 COVID-19 Rent Repayments — (17) — (43) Accretion of Tenant Contribution 13 38 26 76 Interest Expense 5,604 5,211 11,133 9,843 General and Administrative Expenses 3,459 3,327 7,675 7,054 Investment and Other Income (Loss) (1,429) (1,811) 1,830 2,480 Income Tax Benefit (Expense) 73 483 (34) 510 Real Estate Operations Revenues (395) (1,131) (1,443) (1,523) Real Estate Operations Direct Cost of Revenues 259 639 1,078 724 Management Fee Income (1,131) (1,102) (2,236) (2,200) Interest Income from Commercial Loans and Investments (1,441) (1,056) (2,792) (1,851) Other Non-Recurring Items (1) (303) — (553) — Less: Impact of Properties Not Owned for the Full Reporting Period (2,731) (778) (5,469) (1,387) Same-Property NOI $ 14,879 $ 14,582 $ 29,993 $ 28,836 |
| 25 © CTO Realty Growth, Inc. | ctoreit.com Net Debt to Pro Forma EBITDA CTO Realty Growth, Inc. Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited, in thousands) 1. Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. 2. Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s investments and disposition activity during the three months ended June 30, 2024. Three Months Ended June 30, 2024 Net Income Attributable to the Company $ 1,183 Depreciation and Amortization of Real Estate 11,532 Gain on Disposition of Other Assets (139) Provision for Impairment 67 Unrealized Gain on Investment Securities (663) Distributions to Preferred Stockholders (1,871) Amortization of Intangibles to Lease Income 244 Straight-Line Rent Adjustment (346) Other Depreciation and Amortization (3) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 297 Non-Cash Compensation 750 Other Non-Recurring Items1 (303) Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 5,308 EBITDA $ 16,056 Annualized EBITDA $ 64,224 Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net2 (244) Pro Forma EBITDA $ 63,980 Total Long-Term Debt 482,661 Financing Costs, Net of Accumulated Amortization 1,048 Unamortized Convertible Debt Discount 125 Cash and Cash Equivalents (4,794) Net Debt $ 479,040 Net Debt to Pro Forma EBITDA 7.5x |
| Investor Inquiries: Philip R. Mays, Chief Financial Officer, (407) 904-3324, pmays@ctoreit.com Ashford Lane | Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Ashford Lane Atlanta, GA Supplemental Reporting Information Q2 2024 |
| © CTO Realty Growth, Inc. | ctoreit.com 2 Table of Contents Second Quarter 2024 Earnings Release 4 Key Financial Information Consolidated Balance Sheets 1 4 Consolidated Statements of Operations 1 5 Non -GAAP Financial Measures 1 6 Capitalization & Dividends 1 9 Summary of Debt 20 Debt Maturity Schedule 21 Current Year Investment Activity 2 2 Current Year Disposition Activity 2 3 Real Estate Portfolio Capital Investments 2 4 Real Estate Portfolio Summary 2 5 Real Estate Portfolio Detail 2 6 |
| © CTO Realty Growth, Inc. | ctoreit.com 3 Table of Contents Leasing Summary 28 Comparable Leasing Summary 29 Same-Property NOI 30 Lease Expirations 31 Top Tenant Summary 33 Geographic Diversification 34 Other Assets 35 2024 Guidance 36 Contact Information & Research Coverage 37 Safe Harbor, Non-GAAP Financial Measures, and Definitions and Terms 38 |
| Page 4 Press Release Contact: Philip R. Mays Senior Vice President, Chief Financial Officer & Treasurer (407) 904-3324 pmays@ctoreit.com FOR IMMEDIATE RELEASE CTO REALTY GROWTH REPORTS SECOND QUARTER 2024 OPERATING RESULTS WINTER PARK, FL – July 25, 2024 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended June 30, 2024. Second Quarter and Recent Highlights Reported Net Loss per diluted share attributable to common stockholders of $(0.03) for the quarter ended June 30, 2024. Reported Core FFO per diluted share attributable to common stockholders of $0.45 for the quarter ended June 30, 2024. Reported AFFO per diluted share attributable to common stockholders of $0.48 for the quarter ended June 30, 2024. Received net proceeds of $33.1 million from the completion of a follow-on public offering of 1,718,417 shares of the Company’s 6.375% Series A Cumulative Redeemable Preferred Stock. Received net proceeds of $4.3 million from the issuance of 248,960 common shares under the Company’s ATM offering program. Received proceeds of $15.2 million as an early repayment of our Sabal Pavilion seller-financing loan. The Company has approximately $155 million of total liquidity as of June 30, 2024, including $150 million of undrawn commitments on our Revolving Credit Facility. Reported an increase in Same-Property NOI of 2.0% as compared to the second quarter of 2023 and an increase of 4.0% for the six months ended June 30, 2024, as compared to the same period of 2023. Signed not open pipeline represents $4.7 million, or 5.9%, of annual cash base rent in place as of June 30, 2024. Increased full year Core FFO guidance to $1.81 to $1.86 per diluted share and full year AFFO guidance to $1.95 to $2.00 per diluted share, representing increases of 11.9% and 11.0%, respectively, at the midpoint of these ranges. |
| Page 5 CEO Comments “We are pleased that our strong leasing results over the past year are starting to deliver meaningful Same-Property NOI growth, including an increase of 4% for the first half of the year,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “The strength of our leasing continued this quarter with an 8.8% leasing spread on comparable leases. Given our solid earnings and increased investment activity outlook, we have increased our full-year Core FFO and AFFO guidance by 11.9% and 11.0%, respectively, at the mid-points of the ranges, and are looking forward to an active second half of 2024.” Quarterly Financial Results Highlights The table below provides a summary of the Company’s operating results for the three months ended June 30, 2024: Three Months Ended (in thousands, except per share data) June 30, 2024 June 30, 2023 Variance to Comparable Period in the Prior Year Net Income Attributable to the Company $ 1,183 $ 1,800 $ (617) (34.3)% Net Income (Loss) Attributable to Common Stockholders $ (688) $ 605 $ (1,293) (213.7)% Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) $ (0.03) $ 0.03 $ (0.06) (200.0)% Core FFO Attributable to Common Stockholders(2) $ 10,353 $ 9,608 $ 745 7.8% Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 0.45 $ 0.43 $ 0.02 4.7% AFFO Attributable to Common Stockholders (2) $ 11,051 $ 10,781 $ 270 2.5% AFFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 0.48 $ 0.48 $ — 0.0% Dividends Declared and Paid - Preferred Stock $ 0.40 $ 0.40 $ — 0.0% Dividends Declared and Paid - Common Stock $ 0.38 $ 0.38 $ — 0.0% (1) The denominator for this measure excludes the impact of 3.6 million and 3.3 million shares for the three months ended June 30, 2024 and 2023, respectively, 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 (Loss) Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
| Page 6 Year-to-Date Financial Results Highlights The table below provides a summary of the Company’s operating results for the six months ended June 30, 2024: Six Months Ended (in thousands, except per share data) June 30, 2024 June 30, 2023 Variance to Comparable Period in the Prior Year Net Income (Loss) Attributable to the Company $ 7,025 $ (4,193) $ 11,218 267.5% Net Income (Loss) Attributable to Common Stockholders $ 3,967 $ (6,583) $ 10,550 160.3% Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.17 $ (0.29) $ 0.46 158.6% Core FFO Attributable to Common Stockholders(2) $ 21,090 $ 18,475 $ 2,615 14.2% Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 0.93 $ 0.82 $ 0.11 13.4% AFFO Attributable to Common Stockholders (2) $ 22,699 $ 20,644 $ 2,055 10.0% AFFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 1.00 $ 0.91 $ 0.09 9.9% Dividends Declared and Paid - Preferred Stock $ 0.80 $ 0.80 $ — 0.0% Dividends Declared and Paid - Common Stock $ 0.76 $ 0.76 $ — 0.0% (1) The denominator for this measure excludes the impact of 3.6 million and 3.3 million shares for the six months ended June 30, 2024 and 2023, respectively, 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 (Loss) Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. Investments During the three months ended June 30, 2024, the Company invested $1.5 million into 1.4 acres of land for future development within the West Broad Village property, which was previously acquired in October of 2022. During the six months ended June 30, 2024, the Company invested $72.5 million into two retail properties totaling 319,066 square feet and one vacant land parcel, and originated one $10.0 million first mortgage structured investment. These investments represent a weighted average going-in cash yield of 8.2%. Dispositions During the three months ended June 30, 2024, the Company received proceeds of $15.2 million as an early repayment of our Sabal Pavilion seller-financing loan. During the six months ended June 30, 2024, the Company sold one retail property for $20.0 million at an exit cash cap rate of 8.2%, generating a gain of $4.6 million. |
| Page 7 Portfolio Summary The Company’s income property portfolio consisted of the following as of June 30, 2024: Wtd. Avg. Remaining Asset Type # of Properties Square Feet Lease Term Single Tenant 6 252 5.7 years Multi-Tenant 14 3,643 5.0 years Total / Wtd. Avg. 20 3,895 4.9 years Square Feet in thousands. Property Type # of Properties Square Feet % of Cash Base Rent Retail 15 2,467 62.5% Office 1 210 4.5% Mixed-Use 4 1,218 33.0% Total 20 3,895 100.0% Square Feet in thousands. Leased Occupancy 94.6% Occupancy 92.6% Same Property Net Operating Income During the second quarter of 2024, the Company’s Same-Property NOI totaled $14.9 million, an increase of 2.0% over the comparable prior year period, as presented in the following table: Three Months Ended June 30, 2024 June 30, 2023 Variance to Comparable Period in the Prior Year Single Tenant $ 1,292 $ 1,191 $ 101 8.5% Multi-Tenant 13,587 13,391 196 1.5% Total $ 14,879 $ 14,582 $ 297 2.0% $ in thousands. During the six months ended June 30, 2024, the Company’s Same-Property NOI totaled $30.0 million, an increase of 4.0% over the comparable prior year period, as presented in the following table: Six Months Ended June 30, 2024 June 30, 2023 Variance to Comparable Period in the Prior Year Single Tenant $ 2,439 $ 2,140 $ 299 14.0% Multi-Tenant 27,554 26,696 858 3.2% Total $ 29,993 $ 28,836 $ 1,157 4.0% $ in thousands. |
| Page 8 Leasing Activity During the quarter ended June 30, 2024, the Company signed 16 leases totaling 78,593 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 11 leases totaling 57,878 square feet at an average cash base rent of $23.34 per square foot compared to a previous average cash base rent of $21.45 per square foot, representing 8.8% comparable growth. A summary of the Company’s overall leasing activity for the quarter ended June 30, 2024, is as follows: Wtd. Avg. Cash Rent per Tenant Leasing Square Feet Lease Term Square Foot Improvements Commissions New Leases 31 8.1 years $ 33.28 $ 865 $ 515 Renewals & Extensions 48 4.0 years 21.06 10 57 Total / Wtd. Avg. 79 6.0 years $ 25.87 $ 875 $ 572 In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. During the six months ended June 30, 2024, the Company signed 34 leases totaling 182,707 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 26 leases totaling 152,577 square feet at an average cash base rent of $25.05 per square foot compared to a previous average cash base rent of $17.77 per square foot, representing 41.0% comparable growth. A summary of the Company’s overall leasing activity for the six months ended June 30, 2024, is as follows: Wtd. Avg. Cash Rent per Tenant Leasing Square Feet Lease Term Square Foot Improvements Commissions New Leases 101 10.9 years $ 28.29 $ 5,707 $ 1,648 Renewals & Extensions 82 3.9 years 24.48 25 97 Total / Wtd. Avg. 183 8.0 years $ 26.58 $ 5,732 $ 1,745 In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. Capital Markets and Balance Sheet During the quarter ended June 30, 2024, the Company completed the following notable capital markets activities: Issued 248,960 common shares under its ATM offering program at a weighted average gross price of $17.62 per share, for total net proceeds of $4.3 million. Completed a follow-on public offering of 1,718,417 shares of the Company’s 6.375% Series A Cumulative Redeemable Preferred Stock. The Company received net proceeds of $33.1 million, after deducting the underwriting discount and offering expenses payable by the Company, which proceeds were used to pay down our Revolving Credit Facility. As of June 30, 2024, the Company has $150 million of undrawn commitments on our Revolving Credit Facility, and $4.8 million of cash on hand for total liquidity of $154.8 million. |
| Page 9 The following table provides a summary of the Company’s long-term debt, as of June 30, 2024: Component of Long-Term Debt Principal Maturity Date Interest Rate Wtd. Avg. Rate as of June 30, 2024 2025 Convertible Senior Notes $ 51.0 million April 2025 3.875% 3.88% 2026 Term Loan (1) 65.0 million March 2026 SOFR + 10 bps + [1.25% - 2.20%] 2.87% Mortgage Note (2) 17.8 million August 2026 4.060% 4.06% Revolving Credit Facility (3) 150.0 million January 2027 SOFR + 10 bps + [1.25% - 2.20%] 5.07% 2027 Term Loan (4) 100.0 million January 2027 SOFR + 10 bps + [1.25% - 2.20%] 2.95% 2028 Term Loan (5) 100.0 million January 2028 SOFR + 10 bps + [1.20% - 2.15%] 5.33% Total Long-Term Debt $ 483.8 million 4.23% (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 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. (2) Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. (3) The Company utilized interest rate swaps on $150.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.47% plus the 10 bps SOFR adjustment plus the applicable spread. (4) 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 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. (5) The Company utilized 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. As of June 30, 2024, the Company’s net debt to Pro Forma EBITDA was 7.5 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.7 times. As of June 30, 2024, the Company’s net debt to total enterprise value was 47.8%. The Company calculates total enterprise value as the sum of net debt, par value of its 6.375% Series A preferred equity, and the market value of the Company's outstanding common shares. Dividends On May 28, 2024, the Company announced a cash dividend on its common stock and Series A Preferred Stock for the second quarter of 2024 of $0.38 per share and $0.40 per share, respectively, payable on June 28, 2024 to stockholders of record as of the close of business on June 13, 2024. The second quarter 2024 common stock cash dividend represents a payout ratio of 84.4% and 79.2% of the Company’s second quarter 2024 Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted, respectively. |
| Page 10 2024 Outlook The Company has increased its Core FFO and AFFO outlook for 2024 and has revised certain assumptions to take into account the Company’s year-to-date performance and revised expectations regarding the Company’s acquisition activities. The Company’s outlook for 2024 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions. The Company’s increased outlook for 2024 is as follows: Revised Outlook Range for 2024 Change from Prior Outlook Low High Low High Core FFO per Diluted Share $ 1.81 to $ 1.86 $ 0.21 to $ 0.18 AFFO per Diluted Share $ 1.95 to $ 2.00 $ 0.21 to $ 0.18 The Company’s 2024 guidance includes but is not limited to the following assumptions: Same-Property NOI growth of 2% to 4%, including the known impact of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy, and/or tenant lease defaults, and before any impact from potential 2024 income property acquisitions and/or dispositions. General and administrative expenses within a range of $15.2 million to $16.2 million. Weighted average diluted shares outstanding of 22.9 million shares. Year-end 2024 leased occupancy projected to be within a range of 95% to 96% before any impact from potential 2024 income property acquisitions and/or dispositions. Investment, including structured investments, between $200 million and $250 million at a weighted average initial cash yield between 8.50% and 9.00%. Disposition of assets between $50 million and $75 million at a weighted average exit cash yield between 7.50% and 8.25% Earnings Conference Call & Webcast The Company will host a conference call to present its operating results for the quarter ended June 30, 2024, on Friday, July 26, 2024, 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 registration link provided in the event details below and you will be provided with dial-in details. Event Details: Webcast: https://edge.media-server.com/mmc/p/n6cuxiih Registration: https://register.vevent.com/register/BI83b768fbc540495da856dfd974c470c9 We encourage participants to register and 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. |
| Page 11 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, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; 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, 2023 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”), 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. |
| Page 12 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, subsurface sales, investment securities, 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, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. 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. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. 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, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, 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 |
| Page 13 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 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. |
| Page 14 CTO Realty Growth, Inc. Consolidated Balance Sheets (In thousands, except share and per share data) As of (Unaudited) June 30, 2024 December 31, 2023 ASSETS Real Estate: Land, at Cost $ 236,207 $ 222,232 Building and Improvements, at Cost 601,584 559,389 Other Furnishings and Equipment, at Cost 872 857 Construction in Process, at Cost 4,824 3,997 Total Real Estate, at Cost 843,487 786,475 Less, Accumulated Depreciation (63,547) (52,012) Real Estate—Net 779,940 734,463 Land and Development Costs 300 731 Intangible Lease Assets—Net 95,054 97,109 Investment in Alpine Income Property Trust, Inc. 36,561 39,445 Mitigation Credits 355 1,044 Commercial Loans and Investments 50,323 61,849 Cash and Cash Equivalents 4,794 10,214 Restricted Cash 1,363 7,605 Refundable Income Taxes 85 246 Deferred Income Taxes—Net 2,147 2,009 Other Assets 38,846 34,953 Total Assets $ 1,009,768 $ 989,668 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Accounts Payable $ 1,787 $ 2,758 Accrued and Other Liabilities 14,713 18,373 Deferred Revenue 5,371 5,200 Intangible Lease Liabilities—Net 13,421 10,441 Long-Term Debt 482,661 495,370 Total Liabilities 517,953 532,142 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, 4,697,225 shares issued and outstanding at June 30, 2024 and 2,978,808 shares issued and outstanding at December 31, 2023 47 30 Common Stock – 500,000,000 shares authorized; $0.01 par value, 23,115,110 shares issued and outstanding at June 30, 2024 and 22,643,034 shares issued and outstanding at December 31, 2023 231 226 Additional Paid-In Capital 207,882 168,435 Retained Earnings 268,269 281,944 Accumulated Other Comprehensive Income 15,386 6,891 Total Stockholders’ Equity 491,815 457,526 Total Liabilities and Stockholders’ Equity $ 1,009,768 $ 989,668 |
| Page 15 CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except share, per share and dividend data) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2024 2023 2024 2023 Revenues Income Properties $ 25,878 $ 22,758 $ 50,501 $ 45,190 Management Fee Income 1,131 1,102 2,236 2,200 Interest Income From Commercial Loans and Investments 1,441 1,056 2,792 1,851 Real Estate Operations 395 1,131 1,443 1,523 Total Revenues 28,845 26,047 56,972 50,764 Direct Cost of Revenues Income Properties (8,080) (6,670) (14,833) (13,823) Real Estate Operations (259) (639) (1,078) (724) Total Direct Cost of Revenues (8,339) (7,309) (15,911) (14,547) General and Administrative Expenses (3,459) (3,327) (7,675) (7,054) Provision for Impairment (67) — (115) (479) Depreciation and Amortization (11,549) (10,829) (22,480) (21,145) Total Operating Expenses (23,414) (21,465) (46,181) (43,225) Gain on Disposition of Assets — 1,101 9,163 1,101 Other Gain — 1,101 9,163 1,101 Total Operating Income 5,431 5,683 19,954 8,640 Investment and Other Income (Loss) 1,429 1,811 (1,830) (2,480) Interest Expense (5,604) (5,211) (11,133) (9,843) Income Before Income Tax Benefit (Expense) 1,256 2,283 6,991 (3,683) Income Tax Benefit (Expense) (73) (483) 34 (510) Net Income (Loss) Attributable to the Company 1,183 1,800 7,025 (4,193) Distributions to Preferred Stockholders (1,871) (1,195) (3,058) (2,390) Net Income (Loss) Attributable to Common Stockholders $ (688) $ 605 $ 3,967 $ (6,583) Per Share Information: Basic and Diluted Net Income (Loss) Attributable to Common Stockholders $ (0.03) 0.03 0.17 (0.29) Weighted Average Number of Common Shares Basic 22,787,252 22,482,957 22,669,246 22,593,280 Diluted 22,828,148 22,482,957 22,674,796 22,593,280 Dividends Declared and Paid - Preferred Stock $ 0.40 $ 0.40 $ 0.80 $ 0.80 Dividends Declared and Paid - Common Stock $ 0.38 $ 0.38 $ 0.76 $ 0.76 |
| Page 16 CTO Realty Growth, Inc. Non-GAAP Financial Measures Same-Property NOI Reconciliation (Unaudited) (In thousands) Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Net Income (Loss) Attributable to the Company $ 1,183 $ 1,800 $ 7,025 $ (4,193) Gain on Disposition of Assets, Net of Tax — (1,101) (9,163) (1,101) Provision for Impairment 67 — 115 479 Depreciation and Amortization 11,549 10,829 22,480 21,145 Amortization of Intangibles to Lease Income (244) (627) (718) (1,306) Straight-Line Rent Adjustment 346 (122) 1,039 129 COVID-19 Rent Repayments — (17) — (43) Accretion of Tenant Contribution 13 38 26 76 Interest Expense 5,604 5,211 11,133 9,843 General and Administrative Expenses 3,459 3,327 7,675 7,054 Investment and Other Income (Loss) (1,429) (1,811) 1,830 2,480 Income Tax Benefit (Expense) 73 483 (34) 510 Real Estate Operations Revenues (395) (1,131) (1,443) (1,523) Real Estate Operations Direct Cost of Revenues 259 639 1,078 724 Management Fee Income (1,131) (1,102) (2,236) (2,200) Interest Income From Commercial Loans and Investments (1,441) (1,056) (2,792) (1,851) Other Non-Recurring Items(1) (303) — (553) — Less: Impact of Properties Not Owned for the Full Reporting Period (2,731) (778) (5,469) (1,387) Same-Property NOI $ 14,879 $ 14,582 $ 29,993 $ 28,836 (1) Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
| Page 17 CTO Realty Growth, Inc. Non-GAAP Financial Measures Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations Attributable to Common Stockholders (Unaudited) (In thousands, except per share data) Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Net Income (Loss) Attributable to the Company $ 1,183 $ 1,800 $ 7,025 $ (4,193) Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) — — — — Net Income (Loss) Attributable to the Company, If-Converted $ 1,183 $ 1,800 $ 7,025 $ (4,193) Depreciation and Amortization of Real Estate 11,532 10,816 22,447 21,118 Gain on Disposition of Assets, Net of Tax — (824) (9,163) (824) Gain on Disposition of Other Assets (139) (490) (370) (813) Provision for Impairment 67 — 115 479 Realized and Unrealized Loss (Gain) on Investment Securities (663) 1,174 3,376 6,092 Extinguishment of Contingent Obligation — (2,300) — (2,300) Funds from Operations $ 11,980 $ 10,176 $23,430 $19,559 Distributions to Preferred Stockholders (1,871) (1,195) (3,058) (2,390) Funds From Operations Attributable to Common Stockholders $ 10,109 $ 8,981 $20,372 $17,169 Amortization of Intangibles to Lease Income 244 627 718 1,306 Less: Effect of Dilutive Interest Related to 2025 Notes(1) — — — — Core Funds From Operations Attributable to Common Stockholders $ 10,353 $ 9,608 $21,090 $18,475 Adjustments: Straight-Line Rent Adjustment (346) 122 (1,039) (129) COVID-19 Rent Repayments — 17 — 43 Other Depreciation and Amortization (3) (57) (7) (116) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 297 229 518 437 Non-Cash Compensation 750 862 2,137 1,934 Adjusted Funds From Operations Attributable to Common Stockholders $ 11,051 $ 10,781 $22,699 $20,644 FFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.44 $ 0.40 $ 0.90 $ 0.76 Core FFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.45 $ 0.43 $ 0.93 $ 0.82 AFFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.48 $ 0.48 $ 1.00 $ 0.91 (1) For the three and six months ended June 30, 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
| Page 18 CTO Realty Growth, Inc. Non-GAAP Financial Measures Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited) (In thousands) Three Months Ended June 30, 2024 Net Income Attributable to the Company $ 1,183 Depreciation and Amortization of Real Estate 11,532 Gain on Disposition of Other Assets (139) Provision for Impairment 67 Unrealized Gain on Investment Securities (663) Distributions to Preferred Stockholders (1,871) Amortization of Intangibles to Lease Income 244 Straight-Line Rent Adjustment (346) Other Depreciation and Amortization (3) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 297 Non-Cash Compensation 750 Other Non-Recurring Items (1) (303) Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 5,308 EBITDA $ 16,056 Annualized EBITDA $ 64,224 Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net (2) (244) Pro Forma EBITDA $ 63,980 Total Long-Term Debt $ 482,661 Financing Costs, Net of Accumulated Amortization 1,048 Unamortized Convertible Debt Discount 125 Cash and Cash Equivalents (4,794) Net Debt $ 479,040 Net Debt to Pro Forma EBITDA 7.5 x (1) Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. (2) Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s investments and disposition activity during the three months ended June 30, 2024. |
| © CTO Realty Growth, Inc. | ctoreit.com 19 Capitalization & Dividends Equity Capitalization Common Shares Outstanding 23,115 Common Share Price $17.46 Total Common Equity Market Capitalization $403,590 Series A Preferred Shares Outstanding 4,697 Series A Preferred Par Value Per Share $25.00 Series A Preferred Par Value $117,431 Total Equity Capitalization $521,020 Debt Capitalization Total Debt Outstanding $483,834 Total Capitalization $1,004,854 Cash, Restricted Cash & Cash Equivalents $4,794 Total Enterprise Value $1,000,060 Dividends Paid Common Preferred Q3 2023 $0.38 $0.40 Q4 2023 $0.38 $0.40 Q1 2024 $0.38 $0.40 Q2 2024 $0.38 $0.40 Trailing Twelve Months Q2 2024 $1.52 $1.59 Q2 2024 Core FFO Per Diluted Share $0.45 Q2 2024 AFFO Per Diluted Share $0.48 Q2 2024 Core FFO Payout Ratio 84.4% Q2 2024 AFFO Payout Ratio 79.2% Dividend Yield Q2 2024 $0.38 $0.40 Annualized Q2 2024 Dividend $1.52 $1.59 Price Per Share as of June 30, 2024 $17.46 $20.13 Implied Dividend Yield 8.7% 7.9% $ and shares outstanding in thousands, except per share data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 20 Debt Summary $ in thousands. Any differences are a result of rounding. 1. See reconciliation as part of Non-GAAP Financial Measures in the Company’s Second Quarter 2024 Earnings Release. Indebtedness Outstanding Face Value Interest Rate Maturity Date Type 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 Mortgage Note 17,800 4.06% August 2026 Fixed Revolving Credit Facility 150,000 SOFR + 10 bps + [1.25% – 2.20%] January 2027 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 Total / Weighted Average $483,834 4.23% Leverage Metrics Face Value of Debt $483,834 Cash, Restricted Cash & Cash Equivalents (4,794) Net Debt $479,040 Total Enterprise Value $1,000,060 Net Debt to Total Enterprise Value 48% Net Debt to Pro Forma EBITDA1 7.5x |
| © CTO Realty Growth, Inc. | ctoreit.com 21 Debt Maturities Year Outstanding % of Debt Maturing Cumulative % of Debt Maturing Weighted Average Rate 2024 $ − − % − % − % 2025 51,034 11% 11% 3.88% 2026 82,800 17% 28% 3.13% 2027 250,000 51% 79% 4.22% 2028 100,000 21% 100% 5.33% Total $483,834 100% 4.23% $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 22 Year-to-Date Investments Property Acquisitions Market Type Date Acquired Square Feet Price Occupancy At Acquisition Phase II of The Exchange at Gwinnett (5 of 5 parcels) Buford, GA Atlanta, GA Multi-Tenant Retail February 2024 4,000 $2,272 100% Marketplace at Seminole Towne Center Sanford, FL Orlando, FL Multi-Tenant Retail March 2024 315,066 68,700 98% Undeveloped Land Parcel at West Broad Village Glen Allen, VA Richmond, VA Land June 2024 N/A 1,500 0% Total Acquisitions 319,066 $72,472 Structured Investments Market Type Date Originated Capital Commitment Initial Interest Rate Structure Hypoluxo Development Loan Lake Worth, FL Miami, FL Retail March 2024 $10,000 11.00% First Mortgage Total Structured Investments $10,000 11.00% $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 23 Year-to-Date Dispositions Property Market Type Date Sold Square Feet Price Gain 125 Lincoln & 150 Washington Santa Fe, NM Santa Fe Mixed Use March 2024 136,240 $19,977 $4,618 Total Dispositions 136,240 $19,977 $4,618 $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 24 Real Estate Portfolio Capital Investments Investment in Previously Occupied Space Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures $ − $54 $54 Tenant Improvement Allowances 48 529 577 Leasing Commissions 541 89 630 Total Investment in Previously Occupied Space $589 $672 $1,262 New Investment in Acquired Vacancy Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures $561 $ − $561 Tenant Improvement Allowances 1,233 1,987 3,220 Leasing Commissions 489 158 647 Total New Investment in Acquired Vacancy $2,283 $2,146 $4,429 Other Capital Investments Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Property Improvement Costs $427 $568 $995 Investment in Property Repositioning 26 42 68 Total Other Capital Investments $453 $610 $1,063 Total Capital Investments Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures and Other Capital Investments $1,014 $664 $1,678 Tenant Improvement Allowances 1,281 2,516 3,798 Leasing Commissions 1,030 247 1,278 Total Capital Investments $3,326 $3,427 $6,753 $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 25 Real Estate Portfolio Summary Total Portfolio as of June 30, 2024 Asset Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Single Tenant 6 252 $21.98 100.0% 100.0% Multi-Tenant 14 3,643 $20.19 92.1% 94.2% Total Portfolio 20 3,895 $20.30 92.6% 94.6% Property Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Retail 15 2,467 $19.98 96.6% 98.4% Office 1 210 $17.49 100.0% 100.0% Mixed Use 4 1,218 $21.45 83.2% 85.9% Total Portfolio 20 3,895 $20.30 92.6% 94.6% Total Portfolio as of June 30, 2023 Asset Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Single Tenant 8 436 $21.30 100.0% 100.0% Multi-Tenant 16 3,748 $19.21 90.4% 92.7% Total Portfolio 24 4,185 $19.43 91.4% 93.4% Property Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Retail 16 2,434 $18.24 93.7% 95.8% Office 3 395 $19.18 100.0% 100.0% Mixed Use 5 1,356 $21.63 84.7% 87.4% Total Portfolio 24 4,185 $19.43 91.4% 93.4% $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 26 Real Estate Portfolio Detail Property Type Year Acquired/ Developed Year Built Acreage Square Feet In-Place Occupancy Leased Occupancy Cash ABR PSF Atlanta, GA The Collection at Forsyth Lifestyle 2022 2006 69.5 560,665 86% 87% $20.26 Ashford Lane Lifestyle 2020 2005 43.7 277,123 88% 95% $28.34 Madison Yards Grocery-Anchored 2022 2019 10.3 162,521 99% 99% $30.83 The Exchange at Gwinnett Grocery-Anchored 2021/2023 2021/2023 16.4 97,366 98% 100% $35.92 Total Atlanta, GA 139.9 1,097,675 89% 92% $25.26 Dallas, TX Plaza at Rockwall Retail Power Center 2023 2007 42.0 446,521 96% 96% $12.66 The Shops at Legacy Lifestyle 2021 2007 12.7 237,572 64% 66% $21.96 Total Dallas, TX 54.7 684,093 85% 86% $15.89 Richmond, VA West Broad Village Grocery-Anchored 2022 2007 32.6 392,146 90% 95% $22.26 Jacksonville, FL The Strand at St. Johns Town Center Retail Power Center 2019 2017 52.0 211,197 94% 100% $24.38 Phoenix, AZ Crossroads Town Center Retail Power Center 2020 2005 31.1 221,658 100% 100% $20.51 Raleigh, NC Beaver Creek Crossings Retail Power Center 2021 2005 51.6 322,113 97% 100% $14.79 Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 27 Real Estate Portfolio Detail Property Type Year Acquired/ Developed Year Built Acreage Square Feet In-Place Occupancy Leased Occupancy Cash ABR PSF Albuquerque, NM Fidelity Single Tenant Office 2018 2009 25.3 210,067 100% 100% $17.49 Houston, TX Price Plaza Shopping Center Retail Power Center 2022 1999 23.2 200,576 100% 100% $16.77 Daytona Beach, FL Daytona Beach Restaurant Portfolio Single Tenant (5) 2018 / 2022 1915 - 2018 8.3 41,725 100% 100% $44.57 Salt Lake City, UT Jordan Landing Retail Power Center 2021 2003 16.1 170,996 100% 100% $10.19 Orlando, FL Winter Park Office Mixed Use 2021 1982 2.3 27,948 100% 100% $29.58 Marketplace at Seminole Towne Center Retail Power Center 2024 2006 40.6 315,066 98% 98% $18.54 Total Orlando, FL 42.9 343,014 98% 98% $19.44 Total Portfolio 477.6 3,895,260 93% 95% $20.30 Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 28 Leasing Summary Renewals and Extensions Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 10 7 17 Square Feet 34 48 82 New Cash Rent PSF $29.26 $21.06 $24.48 Tenant Improvements $15 $10 $25 Leasing Commissions $40 $57 $98 Weighted Average Term 3.8 years 4.0 years 3.9 years New Leases Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 8 9 17 Square Feet 70 31 101 New Cash Rent PSF $26.09 $33.28 $28.29 Tenant Improvements $4,842 $865 $5,707 Leasing Commissions $1,133 $515 $1,648 Weighted Average Term 12.4 years 8.1 years 10.9 years All Leases Summary Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 18 16 34 Square Feet 104 79 183 New Cash Rent PSF $27.12 $25.87 $26.58 Tenant Improvements $4,857 $875 $5,732 Leasing Commissions $1,173 $573 $1,746 Weighted Average Term 9.4 years 6.0 years 8.0 years $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. |
| © CTO Realty Growth, Inc. | ctoreit.com 29 Comparable Leasing Summary Renewals and Extensions - Comparable Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 10 34 $29.26 $26.96 8.5% 3.8 years $15 $40 2nd Quarter 2024 7 48 $21.06 $20.83 1.1% 4.0 years $10 $57 3rd Quarter 2024 4th Quarter 2024 Total 17 82 $24.48 $23.39 4.7% 3.9 years $25 $98 New Leases – Comparable Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 5 61 $24.32 $9.08 167.9% 13.2 years $4,541 $914 2nd Quarter 2024 4 10 $33.99 $24.36 39.5% 9.2 years $206 $190 3rd Quarter 2024 4th Quarter 2024 Total 9 71 $25.71 $11.28 128.0% 12.5 years $4,747 $1,104 All Comparable Leases Summary Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 15 95 $26.09 $15.51 68.2% 9.4 years $4,556 $955 2nd Quarter 2024 11 58 $23.34 $21.45 8.8% 5.3 years $216 $247 3rd Quarter 2024 4th Quarter 2024 Total 26 153 $25.05 $17.77 41.0% 8.0 years $4,772 $1,202 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. Comparable leases compare leases signed on a space for which there was previously a tenant. |
| © CTO Realty Growth, Inc. | ctoreit.com 30 Same-Property NOI Multi-Tenant Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 12 12 12 Same-Property NOI – 2024 $13,966 $13,587 $27,554 Same-Property NOI – 2023 $13,305 $13,391 $26,696 $ Variance $661 $196 $858 % Variance 5.0% 1.5% 3.2% Single-Tenant Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 6 6 6 Same-Property NOI – 2024 $1,148 $1,292 $2,439 Same-Property NOI – 2023 $949 $1,191 $2,140 $ Variance $199 $101 $299 % Variance 21.0% 8.5% 14.0% All Properties Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 18 18 18 Same-Property NOI – 2024 $15,114 $14,879 $29,993 Same-Property NOI – 2023 $14,254 $14,582 $28,836 $ Variance $860 $297 $1,157 % Variance 6.0% 2.0% 4.0% $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 31 Lease Expiration Schedule Anchor Tenants Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 3 76 2.1% $579 0.7% $7.57 2025 6 113 3.1% 2,481 3.1% $21.86 2026 8 266 7.4% 4,883 6.2% $18.37 2027 11 413 11.4% 4,379 5.5% $10.61 2028 15 738 20.5% 11,997 15.2% $16.25 2029 6 185 5.1% 2,445 3.1% $13.24 2030 3 79 2.2% 959 1.2% $12.13 2031 5 75 2.1% 1,463 1.9% $19.44 2032 5 77 2.1% 1,318 1.7% $17.06 Thereafter 11 306 8.5% 6,069 7.7% $19.82 Total 73 2,329 64.6% $36,574 46.2% $15.70 Small Shop Tenants Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 17 54 1.5% $1,420 1.8% $26.29 2025 34 107 3.0% 3,428 4.3% $31.94 2026 52 190 5.3% 5,533 7.0% $29.06 2027 60 181 5.0% 5,402 6.8% $29.90 2028 48 180 5.0% 6,151 7.8% $34.18 2029 38 135 3.7% 4,593 5.8% $34.06 2030 37 125 3.5% 4,305 5.4% $34.41 2031 31 80 2.2% 2,762 3.5% $34.69 2032 26 81 2.3% 2,864 3.6% $33.25 Thereafter 40 145 4.0% 6,057 7.7% $41.90 Total 383 1,278 35.4% $42,515 53.8% $33.27 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 32 Lease Expiration Schedule Total Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 20 131 3.6% $1,999 2.5% $15.32 2025 40 221 6.1% 5,909 7.5% $26.76 2026 60 456 12.6% 10,415 13.2% $22.83 2027 71 593 16.4% 9,781 12.4% $16.49 2028 63 918 25.5% 18,148 22.9% $19.77 2029 44 320 8.9% 7,038 8.9% $22.02 2030 40 204 5.7% 5,264 6.7% $25.78 2031 36 155 4.3% 4,225 5.3% $27.28 2032 31 158 4.4% 4,182 5.3% $26.38 Thereafter 51 462 12.5% 12,127 15.3% $26.90 Total 456 3,607 100.0% $79,089 100.0% $21.47 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 33 Top Tenant Summary Tenant/Concept Credit Rating1 Leases2 Leased Square Feet2 % of Total Cash ABR % of Total Fidelity A+ / A3 1 218 5.6% $3,674 4.6% AMC CCC+ / Caa2 2 90 2.3% 2,189 2.8% Best Buy BBB+ / A3 3 112 2.9% 1,749 2.2% Whole Foods Market AA- / A1 1 60 1.5% 1,633 2.1% Ross/dd’s Discount BBB+ / A2 5 133 3.4% 1,619 2.0% Southern University NR / NR 1 60 1.5% 1,616 2.0% TJ Maxx/HomeGoods/Marshalls A / A2 4 133 3.4% 1,456 1.8% Dick’s Sporting Goods BBB / Baa3 2 95 2.4% 1,244 1.6% Darden Restaurants BBB / Baa2 3 25 0.6% 1,195 1.5% Burlington BB+ / Ba2 2 79 2.0% 1,158 1.5% Other 432 2,601 66.8% 61,556 77.8% Total Occupied 456 3,607 92.6% $79,089 100.0% Vacant − 288 7.4% Total 456 3,895 100.0% $ and square feet in thousands. Any differences are a result of rounding. 1. Credit Rating is the available rating from S&P Global Ratings and/or Moody’s Investors Service, as of June 30, 2024. “NR” indicates the company is not rated. 2. Excludes leases not yet commenced. |
| © CTO Realty Growth, Inc. | ctoreit.com 34 Geographic Diversification Markets Properties Square Feet % of Total Cash ABR % of Total 5-Mile 2023 Average Household Income 5-Mile 2023 Total Population 2023-2028 Projected Population Annual Growth Atlanta, GA 4 1,098 28% $27,723 35% $157,418 220,272 1.0% Dallas, TX 2 684 18% 10,870 14% 149,416 206,507 0.8% Richmond, VA 1 392 10% 8,728 11% 146,903 175,023 0.4% Orlando, FL 2 343 9% 6,669 8% 92,679 146,980 0.5% Jacksonville, FL 1 211 5% 5,149 7% 93,407 201,089 0.6% Raleigh, NC 1 322 8% 4,764 6% 181,119 133,529 0.9% Phoenix, AZ 1 222 6% 4,545 6% 143,944 314,629 0.4% Albuquerque, NM 1 210 5% 3,674 5% 68,911 50,072 5.9% Houston, TX 1 201 5% 3,364 4% 116,635 277,236 0.8% Salt Lake City, UT 1 171 4% 1,743 2% 109,138 363,721 0.4% Daytona Beach, FL 5 42 1% 1,860 2% 61,420 109,883 0.1% Total 20 3,895 100% $79,089 100% $136,701 201,099 1.0% States Properties Square Feet % of Total Cash ABR % of Total 5-Mile 2023 Average Household Income 5-Mile 2023 Total Population 2023-2028 Projected Population Annual Growth Georgia 4 1,098 28% $27,723 34% $157,418 220,272 1.0% Texas 3 885 23% 14,234 19% 141,758 223,030 0.8% Florida 8 596 15% 13,678 17% 88,657 161,945 0.5% Virginia 1 392 10% 8,728 11% 146,903 175,023 0.4% North Carolina 1 322 8% 4,764 6% 181,119 133,529 0.9% Arizona 1 222 6% 4,545 6% 143,944 314,629 0.4% New Mexico 1 210 5% 3,674 5% 68,911 50,072 5.9% Utah 1 171 4% 1,743 2% 109,138 363,721 0.4% Total 20 3,895 100% $79,089 100% $136,701 201,099 1.0% $ and square feet in thousands, except for average household income demographic information. Any differences are a result of rounding. Demographic information sourced from Esri. Market, state and portfolio averages weighted by the Annualized Cash Base Rent of each property. |
| © CTO Realty Growth, Inc. | ctoreit.com 35 Other Assets Investment Securities Shares & Operating Partnership Units Owned Value Per Share June 30, 2024 Estimated Value Annualized Dividend Per Share In-Place Annualized Dividend Income Alpine Income Property Trust 2,350 $15.56 $36,561 $1.10 $2,585 Structured Investments Type Origination Date Maturity Date Original Loan Amount Amount Outstanding Interest Rate Watters Creek at Montgomery Farm Preferred Investment April 2022 April 2025 30,000 30,000 9.00% Founders Square First Mortgage March 2023 March 2026 15,000 15,000 8.75% Hypoluxo First Mortgage March 2024 September 2025 10,000 5,638 11.00% Total Structured Investments $55,000 $50,638 9.15% Mitigation Credits and Rights State Credits Federal Credits Total Book Value Mitigation Credits 6.0 1.8 $355 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. 1. The Phase II Exchange at Gwinnett loan was paid off in January 2024 in conjunction with CTO’s acquisition of the final property that was part of the Phase II Exchange at Gwinnett project. |
| © CTO Realty Growth, Inc. | ctoreit.com 36 2024 Guidance Low High Core FFO Per Diluted Share $1.81 − $1.86 AFFO Per Diluted Share $1.95 − $2.00 The Company’s estimated Core FFO per diluted share and AFFO per diluted share for 2024 is as follows: The Company’s 2024 guidance includes but is not limited to the following assumptions: Low High Same-Property NOI Growth1,2 2% − 4% General and Administrative Expense $15.2 − $16.2 Weighted Average Diluted Shares Outstanding 22.9 − 22.9 Year-end 2024 Leased Occupancy2 95% − 96% Investments $200 − $250 Target Initial Investment Cash Yield 8.50% − 9.00% Dispositions $50 − $75 Target Disposition Cash Yield 7.50% − 8.25% $ and shares outstanding in millions, except per share data. 1. Includes the effects of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy and/or tenant lease defaults. 2. Before potential impact from income producing acquisitions and dispositions. |
| © CTO Realty Growth, Inc. | ctoreit.com 37 Contact Information & Research Coverage Contact Information Corporate Office Locations Investor Relations Transfer Agent New York Stock Exchange 369 N. New York Ave., Suite 201 Winter Park, FL 32789 1140 N. Williamson Blvd., Suite 140 Daytona Beach, FL 32114 Philip Mays SVP, CFO & Treasurer (407) 904-3324 pmays@ctoreit.com Computershare Trust Company, N.A. (800) 368-5948 www.computershare.com Ticker Symbol: CTO Series A Preferred Ticker Symbol: CTO-PA www.ctoreit.com Research Analyst Coverage Institution Coverage Analyst Email Phone B. Riley John Massocca jmassocca@brileyfin.com (646) 885-5424 BTIG Michael Gorman mgorman@btig.com (212) 738-6138 Compass Point Floris van Dijkum fvandijkum@compasspointllc.com (646) 757-2621 Alliance Global Partners Gaurav Mehta gmehta@allianceg.com (212) 624-2317 Janney Rob Stevenson robstevenson@janney.com (646) 840-3217 Jones Research Jason Weaver jweaver@jonestrading.com (646) 454-2710 Raymond James RJ Milligan rjmilligan@raymondjames.com (727) 567-2585 |
| © CTO Realty Growth, Inc. | ctoreit.com 38 Safe Harbor Certain statements contained in this presentation (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, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; 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, 2023 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 presentation to reflect subsequently occurring events or circumstances. |
| © CTO Realty Growth, Inc. | ctoreit.com 39 Non-GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, AFFO, Pro Forma EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, subsurface sales, investment securities, 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, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. 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. 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 real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. 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, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. 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 40 Non-GAAP Financial Measures (Continued) To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, 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, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, 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 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. |
| © CTO Realty Growth, Inc. | ctoreit.com 41 Definitions & Terms References and terms used in this presentation that are in addition to terms defined in the Non-GAAP Financial Measures include: This presentation was published on July 25, 2024. All information is as of June 30, 2024, unless otherwise noted. Any calculation differences are assumed to be a result of rounding. “2024 Guidance” in this presentation is based on the 2024 Guidance provided in the Company’s Second Quarter 2024 Operating Results press release filed on July 25, 2024. “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 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. “Annualized Cash Base Rent”, “Cash ABR” and the statistics based on Cash ABR are calculated based on our current portfolio and represent the annualized cash base rent calculated in accordance with GAAP due from the tenants at a specific point in time. “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”). The Company defines an Investment Grade Rated Tenant as 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 of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and Moody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. “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 2,349,651 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price as of the referenced period on the respective slide. “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. |
