Good day, and thank you for standing by. Welcome to the CTO Realty Growth 2026 Quarter 3 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jenna McKinney, Director of Finance. Jenna, please go ahead.

Good morning, everyone, and thank you for joining us today for the CTO Realty Growth Third Quarter 2026 Operating Results Conference Call. Participating on the call this morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the executive team who will be available to answer questions during the call. I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities laws. The company's actual future results may differ materially from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are discussed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC reports, earnings release, supplemental, and most recent investor presentation on our website at cporeit.com. With that, I will turn the call over to John.

Thanks, Jenna, and good morning, everyone. The third quarter was very productive for CTO as we continued our strong leasing and investment momentum. During the quarter, we signed 467,000 square feet of leases and completed $102.3 million of investments at a weighted average yield of 9.1%. That brings our nine-month totals to 833,000 square feet of leasing and $336.5 million of investments at a weighted average yield of 9.4%. This activity drove core FFO per diluted share growth of 10.4% for the quarter and 13.8% for the nine months. We have now addressed all 11 of our vacated anchor spaces. And just after the quarter end, we signed approximately 75,000 square feet of new leases at Pompano City Center and completed an additional 135.8 million of investments, bringing year-to-date investments to 472 million at a weighted average yield of 9.4%. Reflecting all of this activity, we're raising our 2026 core FFO guidance, which Phil will walk through shortly. Starting with leasing, our third quarter activity included 396,000 square feet of comparable leases at a 7% cash rent spread. Year-to-date comparable leasing totals, 726,000 square feet at a 9% cash rent spread. Regarding the vacated anchor spaces, we addressed the last remaining box this quarter by subdividing the former con space at Carolina Pavilion in Charlotte and signing leases with Cavenders and 2nd and Charles. We're pleased with how this all played out. Of the 11 spaces, nine have been released at approximately 70% positive spread. The remaining two, as previously announced, are under contract to be sold to a national retailer for $20.7 million with closing expected in the fourth quarter. We expect these new anchors to bring more traffic to our centers and benefit the adjacent small shop space. A few other leasing highlights. First, we signed a 55,000 square foot lease with Crunch Fitness at Crossroads Town Center in Phoenix to replace Harkins Theaters. Although the Harkins lease runs through late 2028, we had negotiated an early termination right. that let us proactively backfill the space at a positive cash spread with a use that will drive more foot traffic. We expect roughly 12 months of downtime between Harkins vacating in early 2027 and the crunch lease commencing in 2028. Second, just after the quarter end, Amp Fitness signed a lease to expand by 19,000 square feet at Pompano City Center, bringing this immersive, experience-driven fitness destination to 53,000 square feet. and Amt Affiliate also leased 56,000 square feet for research, development and testing of gym equipment and experiential rooms as well as office operations. This space is part of the 62,000 square feet of unfinished second floor shell space we identified as upsize when we acquired the property last December. Because the space isn't currently in the center square footage, the lease will increase Pompano City Center to 565,000 square feet. Third, our out parcel program. This quarter, we signed four leases at multi-tenant buildings and two out parcel developments, T-Mobile at the Plaza at Rockwall and Jason's Deli, Acapella Nail Spa and Nothing But Cakes at Beaver Creek in Raleigh. Together with the Swig and Cooper's Hawk leases signed earlier this year, we're making steady progress. We continue to expect a blended Low double-digit unlevered yield on about $30 million of investments across these six out-parcels, with earnings contribution beginning in 2027 and a full benefit in 2028. Turning to occupancy, excluding Zona Rosa, leased occupancy increased to 95.7% from 95.4% last quarter. Including Zona Rosa, which was 67% leased when we acquired it, the total portfolio was 92.4% leased at September 30th. Zona Russo gives us real room to grow, which I'll come back to in a moment. At quarter end, our signed not open pipeline was 5.6 million, or about 4.6% of in-place cash rent. That's down modestly from last quarter, mainly because the state of New Mexico began paying rent at our Albuquerque property in September. Though new leasing during the quarter offset most of this impact. We expect the majority of the signed, not open pipeline to commence rent over the course of 2027. Moving to investments, on our last call, we said we expected to close at least one more acquisition this year. We closed two, both in Kansas City, a new market for CTO with more than 2.2 million people in a pro-business climate. Together, these two centers, both in strong local submarkets, add about 1.3 million square feet to our portfolio. First, Zona Rosa, which we acquired in the third quarter for approximately $63 million, or $82 per square foot, well below replacement costs. It's a top lifestyle center in Kansas City's Northland submarket with about 5.5 million annual visits and is anchored by Dick's Sporting Goods, Barnes & Noble, Old Navy, Burlington, and DSW. Beyond the lease-up opportunity, the property includes 10 acres of entitled development land and about 100,000 square feet of underutilized space we can reposition. Second, Summit Woods Crossing, which we acquired in early October for $103 million, or $189 per square foot, also well below replacement costs. It's a 545,000-square-foot power center in Lee's Summit, one of the metro's most affluent submarkets. It's 99% occupied and anchored by Lowe's, Kohl's, Best Buy, TJ Maxx, and Total Wine with a super target on the site that we don't own. With about 7.3 million annual visits, it's among the most visited shopping centers in the Kansas City metro area. These two acquisitions also strengthen our tenant credit with Dick's and Best Buy, both investment grade, becoming our two largest tenants. On the structured investment side, in July, we originated a $37 million loan, of which $29.8 million was funded at closing. It's secured by a leasehold interest in a mixed-use property in Austin, Texas, has a two-year term, and carries a 9.75% initial cash yield. Then, after quarter-end, we closed a $32 million preferred equity investment in a joint venture that owns 10 shopping centers. is fully funded at closing, has a three-year term, and yields 17%, including 7% pay in kind. Our structured investment portfolio now totals approximately $260 million at a blended rate of 12.1%. Finally, during the quarter, we closed a new expanded credit facility that gives us ample capacity to fund this activity. Phil will cover the details. In summary, we're very pleased with the nine months of 2026. We believe our embedded growth drivers, including below-market in-place rents, the sign-not-open pipeline, lease-up opportunities, out-parcel developments, and disciplined capital recycling, position CTO for meaningful earnings growth. With that, I'll turn the call over to Phil.

Thanks, John. On this call, I will briefly highlight our quarterly results and provide an update on our balance sheet and revise full-year outlook, starting with operating results. For the third quarter, Core FFO was 53 cents per diluted share, up 10.4% from 48 cents a year ago. Growth was driven primarily by leases that commenced paying rent over the past year, along with contributions from our property acquisitions and structured investments. Year to date, Core FFO is $1.57 per diluted share, up 13.8%. Shopping Center's same property NOI grew 3.8% for the quarter, and 6.2% for the year to date. As we flagged on our last call, growth moderated as several anchors that opened in late 2025 moved into the prior year comparable period. Including our few non-core properties, total same property NOI grew 2.3% for the quarter. This reflects the downtime at our last significant non-core property in Albuquerque, where space vacated last December is now leased to the state of New Mexico, which recently commenced paying rent, as John noted. Turning to Pine, income from our management agreement and equity investment was $2.2 million for the quarter, and our annualized run rate is now $9 million, consisting of $5.8 million of management fees and $3.2 million of dividend income. Moving to the balance sheet, during the quarter, we closed a $1 billion unsecured credit facility consisting of a $400 million revolver and $600 million of term loans with maturities ranging from September 2029 to March 2032. The facility added $250 million of commitments and liquidity and extended our weighted average debt maturity to 4.3 years from 1.6 years. Also during the quarter, we raised $27.3 million in net proceeds through our ATM program, an average gross price of $21.83 per share, and repaid our only secured mortgage. Our debt is now entirely unsecured. We ended the quarter with net debt to pro forma adjusted EBITDA of 5.9 times, essentially in line with last quarter and down from 6.7 times a year ago, and approximately $255 million of liquidity. Total debt was $723 million at a weighted average interest rate of 4.7%. Finally, turning to guidance. We're raising our 2026 core FFO guidance to a range of $2.11 to $2.14 per diluted share, up from $2.09 to $2.13. At the midpoint, that represents approximately 14% growth over 2025. We're also raising the low end of our AFFO guidance to a new range of $2.22 to $2.25 for diluted share up from $2.21 to $2.25. Key assumptions in our revised guidance include shopping center same property NOI growth of 5% to 6%, investment volume including commercial loans and structured investments of approximately $472 million, up from our prior range of $300 million to $400 million, and general and administrative expenses of $21 million to $21.5 million. With that, operator, please open the line for questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Jay Kornreich of Cantor Fitzgerald. Your line is open.

Hey, thanks. Good morning. Can you talk just about the general supply-demand fundamentals you're seeing across the portfolio? Are the power centers currently a landlord's market where you have pricing power? And if so, is that a trend you expect to continue throughout 2027?

Yeah, thanks, Jay. Yeah, we're seeing still good activity on the leasing front from really good quality tenants. I wouldn't say that it's like a mad grab for space or anything like that, but good, consistent demand and the type of tenants you want.

Okay. And then maybe just shifting to the office property in New Mexico, just curious if there's any update there for, you know, opportunities to start marketing that asset and any updates to timing when a potential sale could happen?

Sure. So, you know, basically, the state of New Mexico is now in, so that's great. You know, we're talking to the other tenant, Fidelity, about kind of what their space needs are going forward and then waiting for the new administration in the state of New Mexico to come online, you know, next year. So, you know, basically next year we'll kind of basically optimize the property rather than hastily sell it when it might be leaving some easy money on the table.

Okay. Thank you. I'll hold it back. Thanks.

Thank you. Our next question comes from Matthew Erdner of Jones. Your line is open.

Hey guys, good morning. Thanks for taking the question. I'd like to kind of touch on the two recent acquisitions in Kansas City. You touched a little bit on why you like the environment there. But, you know, I guess what's the opportunity that you kind of see at Zona Rosa, just the amount that you guys are able to kind of bring online over the next couple of years?

Yeah, so the property had been owned by an entity that had foreclosed on it. So there wasn't very much outreach on the leasing side. and so I feel like the property has some very high performing tenants so we've done this many times before and I think that there's a lot of opportunity on the health and fitness side, on the entertainment side, on the restaurant side and then also talk to hotel developers about the pad sites and so just really attacking on all sides and You know, given that, you know, we bought it at a nice opportunistic current yield and with all that vacancy opportunity to lease up, it's, you know, we're really, really excited about the opportunity there.

Yeah, that's good to hear. And then, you know, as it relates to kind of the leasing opportunity through 28, you know, it's about 25% of ABR right now. I guess how much of that is attributable to, you know, Zona Rosa and kind of the newer acquisitions? and then, you know, again, just the opportunity to kind of drive spread tire there.

I'll let Phil address that. You're asking on the 28th explorations how much is attributable to Zona Rosa? Yeah. There's not too much in there. What is in there we feel really good about. There's the JCPenney's Renewal at Rockwall. You know, it's a very, very low rent. So we feel good they'll renew. There's actually Fidelity's renewal, which is in there, which John was talking about earlier at the Albuquerque. They've recently generally right-sized, so we feel good about that. And then the other really large one in there is Harkins at Crossroads, which John talked about. We've already kind of proactively released that with Crunch Fitness. Those are the larger ones in there. After that, it's a lot of small shop. Some have contractual extensions, some don't. So that'll be where we'll kind of, you know, grow our rents is in those small shop renewals.

Got it. That's helpful. Thank you, guys. Thanks.

Thank you. Our next question comes from Rob Stevenson of Huntington. Your line is now open.

Good morning, guys. How are you thinking about equity funding in the near and intermediate term with the stock now sort of sub-20 at this point?

Yeah, I mean, obviously, we don't think the stock is at the right price. And, you know, now that we've done, you know, the investments, a lot of investments this year, almost, you know, almost sort of like getting close to the market cap of the company, you We're not needing to expect that the stock price be a certain level to raise equity here. So we've done enough investments. We're definitely looking at the recycling side. Can we get premium pricing on some of the assets that are now stabilized and slower growing? And so you probably see more of that. So we don't really need to rely on the equity price to be a certain level.

Okay, I guess given that comment, John, how are higher rates impacting the demand for some of the assets that you want to sell at this point? Are you still seeing decent demand and the brokers think that you could achieve the pricing? Is it a situation where people have sort of pulled back waiting to see what winds up happening over the next couple of months in terms of moves, etc.? How would you characterize that today?

Yeah, you still have a large capital base. of capital that wants to get back into the space or get into the space as far as the retail shopping centers. And they're going to plow through no matter kind of what. Now they'll have pricing adjustments based on rates, but it's not going to inhibit the demand for sure. So the demand is there from the right capital being very core capital. and, of course, there'll be a little pricing adjustment, whether it's probably 25 bps, 30 bps from six months ago, something like that, but nothing dramatic.

Okay. And then, Phil, what is the pace of the $5.6 million sign not open? It doesn't sound like crunch starts until 2028, but when do the big pieces of that $5.6 million start to hit the revenue line for you guys?

Yeah, so we actually put in our investor presentation there. We schedule it out by year, so that might be helpful. But of the 5.6 million, about 3.2 comes online in 27, and pretty much all of it's online for 28. So we get really the full benefit in 28, a little over half the benefit in 27. Okay. And then last one from... That doesn't reflect... The leasing at Pompano that John talked about, excuse me, that happened just after the end of the quarter. And so that'll be a little more incremental positive on top of what's in the sign not open pipeline currently.

Okay. And should we, that 3.2 and 27, is that sort of, you know, weighted throughout the year, weighted fairly evenly throughout the year? Or is there like a big chunk in any specific quarters that we need to be aware of?

Yeah, kind of a weighted basis. It's right around the middle of the year.

Okay. And then last one for me. So the guidance today, what gets you sort of at the high end? I mean, the low end of the guidance range for both core and AFFO is about a penny better than what you did in the third quarter. But the high end of that range is, you know, a few pennies higher than that. What's the sort of variable that gets you from the sort of low end to the high end of the guidance range for the year?

Yeah, I mean, it's a few things. A lot of it's the sign-out open, you know, rent commencement. Some of that could come online late this year, and that would bump us up. That's probably that. And, you know, there's always in the fourth quarter, there's percent rent, right? And we have a significant amount that happens in the fourth quarter. So it's really just rent commencement dates, percent rent. and where those shake out in the fourth quarter.

Okay. Thanks, guys. Appreciate the time. Thanks.

Thank you. Our next question comes from Craig Cucera of Lucid Capital Markets. Your line is open.

Hey, good morning, guys. I want to circle back to Zona Rosa, which is a pretty interesting acquisition. I guess you have about 250,000 square feet of vacancy there and you mentioned you also had 100,000 square feet of underutilized space. Those are independent of each other, correct?

The 100,000 is part of the 250. Okay. Yeah, so it's in total, but there's 100 that's just very underutilized where it sets and not really activated because there's not an anchor to really drive people back there currently. And we're working on finding ways to implement and activate that part of the center to get some leasing momentum for that $100,000 specifically. But the $250,000 includes that, Craig.

Okay, that's helpful. And are you expecting a meaningful amount of CapEx to reposition this acquisition, or is there a lot of low-hanging fruit, maybe like you saw at Carolina Pavilion?

Yeah, there's not a lot of capital needed to basically deferred maintenance or anything. There definitely is deferred maintenance, but it's not a huge amount. We're working on all that landscaping, painting, that sort of thing. But the real capital will come with tenants, so very much revenue-producing sort of capital yielding investment.

Right, that makes sense. And as far as Repositioning there, is this a situation where some of the tenants are paying way below market and you can kind of replace them with markets? Or is it really more what you alluded to before, I think, about bringing in like health and fitness and a restaurant, maybe hotels on the pads?

Yeah, it's more about activating the property to its potential. So there's not any huge mark to market. It's just a lot of vacancy opportunity.

Got it.

And missing uses.

Okay, that makes sense. You're changing gears with the $32 million preferred equity investment you made earlier this quarter. Are you likely to keep that whole investment or sell a portion similar to what you did at Pine for some of the higher yielding investments you have there?

Yeah, that one we're really lucky to have and happy to help out on the transaction that transpired on a portfolio that we tried to buy. and so we lost on the transaction but was able to do this preferred investment at a lower basis than where we were willing to buy the portfolio so we expect that to be a hold.

Okay. And Phil, is the swap on the 2030 term loan the only swap expiring next year?

There's one swap maturing. It's on about 100 million and it rolls up about 180 basis points. I can't remember, Craig, if that's on the 2030 or the 2032 loan, but either way, it's a 2032 loan. It's $100 million, and it'll roll up 180 basis points. That's the only one we have changing in 27. In 28, we got a couple, but they're fairly close to market, so there won't be a significant drag in 28 from any swaps expiring.

Okay. And just one more for me. You mentioned the lease termination at Harkins. How much was that fee and was that recognized in the third quarter or will be recognized this quarter or in the future?

Yeah, that was really more, we just got an early termination option. So we actually just, in order to get that and have the flexibility to exercise it, you know, on timing that works with crunch coming in and limiting the downtime, we just actually just gave them a little bit of break in rent. We didn't get any income and then we got that option in exchange for that break in rent. and Crunch is, you know, well underway of working to get, you know, all their approvals and everything. And then we'll hit that option at the most opportune time to limit the downtime there. So there's no kind of one-time income this quarter related to that.

Okay, great. Thanks for the call.

Thank you. Our next question comes from Grava Mehta at Alliance Global Partners. Your line is open.

Thank you. Good morning. I wanted to follow up on the $32 million loan that you guys did in 4Q. Why is the yield at 17% higher than, I guess, some of the other loans that you've done in the past?

Just because the complexity of the transaction, you know, is fast moving, needed to be done by a date certain. You know, it gave them some flexibility on, you know, when they can kind of repay us, you know, expect it to be More of a two-year duration sort of investment. So it was just really, you know, they had to have the capital by a certain time and didn't have a lot of time to go shop around. So because we, as I mentioned before, tried to acquire the portfolio, we had already underwritten it. And if they went out to other people that would need time to underwrite it, it would be impossible for them to have something closed in the timing they needed to have it closed.

Okay. Second question, your commercial loan investments seem like they're 14% of undepreciated assets. Can you remind us what the target is for the loan investment portfolio?

Yeah, I mean, this is basically the level, you know, 15%, I think we've mentioned before. So, you know, I don't anticipate this going higher than the level where it is right now.

All right. Thank you. That's all I had.

Thank you.

Thank you. Our next question comes from John Mazzucco of B. Reilly Securities. Your line is open.

Good morning. So maybe just give us some moving pieces, particularly happening subsequent to quarter end in your outlook on the capital markets. How are you thinking about leverage currently? And I guess you mentioned a little bit to one of the earlier questions, but, you know, Is that kind of set up for some more maybe systematic dispositions next year, or are you kind of happy at this level and are you more opportunistic with sales? Yeah, I'll take the leverage piece, John.

So, you know, at the end of the quarter, we were a little under six times. With all that activity, I think we go up to maybe six and a half. times Dativita. And then keep in mind, we have a really robust sign-out open pipeline. We have these pads. They're not going to take it down, you know, half a turn or anything, but they will incrementally bring it down, you know, 0.2 or so, right? So, we'd be in the low sixes. So, it's a level we're comfortable with, but, you know, that said, we can always look to recycle, you know, depending on the opportunities we're seeing. On the market side, I'll let John answer.

Yeah, I mean, I think, as I mentioned before, we'll opportunistically recycle if we get the right pricing for some of the assets. So I expect something to happen in the next six months on the recycling side. But, you know, so expect a little bit of that.

And then on the Summit Woods transaction, anything to be aware of, you know, that can be kind of additive there, either kind of, you know, retenanting or releasing, or is it just kind of a very attractive Day One Yield for the quality of asset you purchased?

Yeah, I would say it's the latter. It's a really high-quality property with solid tenant quality, but there are very below-market leases on that property. The colds and the lows are really low rents, so almost sort of like a covered land play, if you will. But yeah, we like the solid nature of the asset.

Okay. And then Pompano City Center, you're kind of adding square footage with the new tenant. Is there any more opportunities for that with some of the second floor space if you can activate it, or is that kind of going to be fully utilized post that lease up?

No, we still have room to go there. There's still opportunity there on the leasing side, and we're getting really good traction. So we're excited about the runway at Pompano. So The AMP expansion is going to do a lot for just driving more energy there. And we're taking out, they're taking over corridor space. So, you know, expenses that we were paying on sort of dead space, you know, that's going to go away. So it's all, you know, kind of lining up, you know, really well for us.

And I mean, how much more square footage could kind of be added either as the, you know, quantum of what AMP is doing or just absolute terms?

Yeah. So the lease at the end of the quarter was low 90%. It's like 92, 93. So there's a lot of runway just there. And that's on the existing square feet. AMP took the vast majority of that unfinished space. And for lack of a better way to describe it, it was like enclosed structure parking. And they took 55,000 square feet. And that space was, I think, right around 60,000 square feet. and we had underwritten that at zero. And when we tend to do that, to be conservative on our underwriting, John and our head of leasing take it very personal and they went out and found a creative use for it there. So that unfinished space now is largely filled with AMP, but we still have a lot of runway just on the property itself because it's relatively, on a relative basis, low leased.

I appreciate all that, Collin. That's it for me. Thank you.

Thank you. I am showing no further questions at this time. This concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.