Cedar Realty Trust (CDR)

Jennifer Bitterman Investor Relations
Bruce Schanzer Chief Executive Officer
Robin Zeigler Chief Operating Officer
Philip Mays Chief Financial Officer
Todd Thomas KeyBanc Capital Markets
Floris Van Dijkum Compass Point
Call transcript
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Welcome to the Second Quarter 2021 Cedar Realty Trust Earnings Conference Call.

As a reminder, this conference is being recorded. [Operator Instructions] I will now turn the call over to Jennifer Bitterman. Please proceed.

Jennifer Bitterman

Good evening and thank you for joining us for the second quarter 2021 Cedar Realty Trust earnings conference call. will Operating Schanzer, Chief Officer; call Robin Executive Financial today’s Chief Zeigler, and in be Chief Bruce Officer; Officer. Participating Philip Mays,

during such not begin, call may statements by to differ we including recent please ended with those and aware These statements statements uncertainties, Before indicated statements other from by those subject be subsequently and updated actual Form XXXX, for that risks the statements. maybe historical and made are most materially deemed forward-looking disclosed forward-looking that reports the numerous company’s the quarterly year XX-K the as XX-Q on our filed in SEC. Form filings periodic are

XXXX the only no statements speak undertakes reminder, date duty as to a update of forward-looking the July and them. company the As XX, of this call,

on call, release measures. this operations from Cedar’s net Bruce During non-GAAP certain With may supplemental call measures, GAAP of to will turn over with and that, including most financial the website earnings management Schanzer. financial directly Please to financial now the funds measures, posted comparable Bruce? these non-GAAP operating its see press for financial income. I reconciliations and refer information

Bruce Schanzer

XXXX this you evening Cedar for Jennifer joining Thanks, second quarter and all Trust. for earnings for thank us call the Realty

my personal our this and of excellence, and and for in have the exhibited collaboration. collegiality our lifetimes, Team into thrilled to prouder acknowledge thank also never and have on professionalism up of their organization. everyday stewardship. I Directors to is has Board we like my would professional I at unique been thank challenges jumping to I prepared Before that want guidance never imagined. I with for This and been their remarks, commitment Cedar team and down be am to Cedar could continued colleagues and time opportunities period

two team of directors our high meetings the shareholder, aware, am report X X level. company board, constituted CEO directors. beneficiary have with to had a I group earlier our members we our expanded thrilled input happy this new an this at and As new Having see legacy navigate you added and now and newly functioning are year to my our high board directors such as built the in and a to as performing a I capacities as am their that elevated

pandemic, the have of as is of depths XXXX alone The year-over-year we pandemic. reasons, marks for it and we simply the The come as survive idea COVID-XX the the company. results quarter what number of because comparisons a second since most had the highlight would a onset noteworthy from over when of a whether significantly of let year no how individuals, held far we even future our

grateful and and that are foremost look remain is that As resurgence any first we have we spared been we hopeful ahead, we short lived.

confirm single we is drive our this recognizing sales rate. during Significantly, not and cap then, performance an his And we trend been suggest any that purchaser Since was seen outlier. portfolio representing investor Camp on sale a and the appetite their this a we have asset the approximate might centers, over a with of are are roughly seeing the million, for market leasing three X.X% tailwind, of comp later XX assets. and our on in Mall shopping remarkable market economic we these ahead strong year transaction Here both this most anything, complementary of second strategy definitely an guiding dynamics. the the resultant validation robust if this of of confluence trend. and months focusing anchored through $XX essential grocery a What number last quarter, of for pipeline, closed have Hill time

for demand market through in tenant proven the space dynamics. centers, most challenging themselves and First, resilient grocery there productive they anchored our to significant have be since is

specifically real multifamily and investors other they as hotels offer and seeing estate lease are net investable don’t the yields housing, avoiding Second, malls, costly have industrial offices, reasonable because and classes, that too are gotten they risky. so

financing debt high profound between types, the levels. and anchored market our highlights markets value. still remarkably in Third, trend our This market are flexible rates, for asset terms sale price underlying constructive share our only low disconnect with grocery and asset leverage the the

on if Hill, will this it As we we I regarding publicly measures the when focus to to further which appears case. we commented exploit persists, disconnect to be continue which is Camp which sold a take and appropriate

either growth negotiation NOI and have when or are to that grocery finalized result to Moving the our over NOI over leases under coming of I close within in least. is pipeline or a being quarters say been We the will to portfolio. together leasing, robust that anchored as growing pipeline occupancy with and alluded to shopping earlier, taken center leasing substantial occupancy signed our anticipate core

at to continue is major capital are leases, order and metal thanks the to to generally pipeline and required on Robin to and Havener hand team for their and leasing Tim the putting effort invested capital. elaborate capital remarkably in unlevered further. these in the value the returns redevelopment. mixed our I contributions level the attractive urge strong and asset underlying heartfelt pedal considering My finalize our to entire While will the warranted leases this grow use you and the creation to of the on value-add remarkably certainly are effectuate cost

know, you DC. Asland first Goldman building, of representing project in the Northeast call, office the of but construction in Washington announced earnings second DGS venture the last phase and with Heights the we joint for As before quarter, our Sachs a

later Revelry at steady in what be Heights well phases advancing making progress continue will the We Philadelphia. as Northeast as in

leasing Crossing, on the Plaza, Valley Fishtown Robin of remarks. side, and On and prepared have important construction in which at redevelopment will milestones achieved value-add Yorktowne we all Norwood, elaborate her

thank And would unique by our conclude our team price value. again must commitment you, Robin, our I value share shareholders in that, handing repeating and real our of Robin. With the to once between manifest the to face productivity this their and disconnect give I for the estate Before I it period. maximizing the Board underlying to during over

Robin Zeigler

Good Bruce. evening. Thanks,

seen in progress good from the both pandemic. as emergence experienced and operations quarter we leasing have second We

this that of noticed pre-pandemic to relative we executed bring X executed feet. to build And quarter, prior were rent collected quarters. anticipate have square in this of collection us totaling in we not weeks, continue have In the back as new volume leases this if an During we last being XX The leasing XX quarter strong as leasing XX% have a each recent total will compared to we leases rent. discussed is XXX,XXX performance in on comparable leases increase performance executed activity we with quarters, better. strong, quarter two new basis.

While XX.X%. a that certainly the retail This the and restaurant on quarter’s months executed volume has began primarily were negotiation deals increased, ultimately during negative due several to service this new quarter. deals lease spread pandemic this and is is XX type ago several

retailers expect the Honeygrow, are as continue a at additional new for feet see spreads with no executed at stir to a deal XX the there coronavirus Post non-comparable a to better fast variant. or through a Groton We we in salad X%. at Big collectively positive foot a X.X%. non-comparable Fitness second XX,XXX X impact this Swede LA These deal renewals Lots new were of Shopping at were we at Square. quarter, shutdowns at quarter, to to process, These a casual deals completed additional Center, TJ space restaurant two Trexlertown deals, due Maxx spread move Crossing. previously positive at anchor salon executed Fishtown and [indiscernible] Crossing totaled prototype. include deals spread Timpany Plaza, new at assuming Plaza renewals unreleased An of Popeye’s fry including Fishtown square and

at anchor Valley Additionally, X A.C. executed school Kmart These Chester, Lobby Valley a technical were Hobby and and with June at feet Plaza New Porter New Plaza a square XX, a at mall. at after and London. former anchors totaling Moore are replacing Outlet and leases XX,XXX London former Grocery

June have leased we of the occupancy increase As from second prior as leased XX.X%, X.X% of occupancy Same-property which a quarter. of a a quarter. is XX, XX.X% increase X.X% of end from prior quarter, is

in trending for execution. affected is is leased our resulting XX.X% preparing The occupancy redevelopment the redevelopments XX.X%. leased occupancy for still occupancy in is our direction, portfolio is leased by overall right occupancy While of our occupancy XX.X%, the while same-property

new enhanced New Valley by quarter small We X at the continue deals to anchor Crossing. nicely Carmans, X this of work are Yorktowne, at on Plaza, Valley our Fishtown value Plaza, the They Carmans, leasing creation X London and shop anchors London. progressing Fishtown, at each new at new and new at deals the of New a portfolio renovations Norwood,

known DGS redevelopment. Phil. DGS delivery Shopping both venture the Center this anticipate give quarter call, Heights. the we phase last Hill December our and at first Center With detailed million Shopping Camp of for of Northeast represents of closed in as earnings Carmans refinancing, the that, joint the I Northeast Heights dispositions first and $XXX quarter’s Services Construction As we we General venture the is joint will phase in on of underway The this the Department and XXXX. you

Philip Mays

Norwood Norwood at These NOI incurred Thanks, $X.XX enhancement the million larger and be Shopping this to was big sheet. an million. to balance build demolition wise provide will path and quarter, new and for with costs a a Center. store. Operating FFO Robin. costs on operating raising to delivering demolition of operating million $X.X $XX.X operating or a was results share On them expenses update That old will I included results, call, our property highlight Center. Starting briefly relates $X.X significant Shopping space per grocery

operating value these redevelopment practice, required demolition as to our expensed under that GAAP. of is costs such increase property, a be back As FFO the items adds are computation of but our

including X.X% the period XX.X%, properties, having These and portfolio the same-property substantially from increased increases recovered redevelopment of the driven in pandemic. our COVID-XX Excluding redevelopment. by NOI effects over XXXX comparable were

reduce centers. sheet, balance this a and that at the years and revolving repaid a on million. the loan mortgage grocery-anchored from value in the $XX Life payments we of proceeds proceeds Hill the of X credit XXXX $XX Guardian loan loan Utilizing of loan, to XX-year in completed recent outstanding mature million we our aggregate X by term non-recourse was XX.XX%. to $XXX closed This from interest Carmans, facility along the February and with amount to with XX% to rate million fixed interest-only shopping Moving Camp sales the was May, cross-collateralized of a scheduled million with from $XXX loan

maturity. revolving $XX matures will credit revolving our on with facility million Accordingly, its maturity. our in it September our we that begun debt credit about are have facility and we drawn and refinancing so XXXX with discussions represents Our only group now only prior bank do to optimistic

discussing $XX early a are maturing in XXXX. potential we refinancing the term Additionally, of loan million

first note, this open revolvers’ However, I or a questions. this exercise we address option and maturity of I And could year option X year have that, in later the should half revolver extension will for the to our XXXX. with call the and


Capital question KeyBanc question. [Operator with with from Instructions] Markets. Thomas And our Please proceed is first Todd your

Todd Thomas

Hi, good afternoon.

sounds First Do higher inflect you expect the you see XX leased would that you points, quarter? earlier question, You a commented the of through the new new you spreads some lease some those? then that talk also you Do sequentially higher rate And negotiating worked momentum worked power signings, on feel you in by that to leasing move. pricing lease recovery, have trending began basis here? it about continue? see improved solid from that spreads the can the Robin, now you about through in that’s lease like should

Robin Zeigler

Todd. you, thank Yes,

would couple QX in we to I this into So going say of are seeing of some the kind last which of next volume, are end of definitely at quarter. the increased related tail months, and volume,

would their retailers I new we operations, opening opening stores, expanding to that see new are So, expect restaurants, at etcetera. starting look

as many that the are I seeing spreads good of started pandemic quarter during economic the as we were or deals were second the several deals height as the So, there. of Related – terms. the the equally, far to closed momentum of mentioned during that

an And expect the improvement I in terms those month. coming to spreads so see we go to as do through relative

Todd Thomas

development you some XX.X% Okay. at June in If portfolio we there redevelopment but out rate there, If the sort maybe we over of of XX. the the – do project I portfolio, projects maybe, leased the ‘XX, at up overall look end the quarters know, year, is you at? look total I realized sort would loosely don’t leased for to be where – next, where six of portfolio

Robin Zeigler


about. talked momentum So, we that outside the redevelopment we have of

And our there. the already the related occupancy that then So, some to I there see of but as think get kind Northeast removing away. the what’s numbers. of ebbs may to already the maybe related to of would that’s thing tenancy from we that’s portfolio, the that increases, from redevelopment only to in. some so kind say value-add ways renovation this is expect speak we I drag tenants in into But side, and the And relative reflected we Heights on move occupancy is lease the going largely redevelopment see impacted majority increases the the we some in expect ‘XX, the factored But to as currently, next a be phase. but I flows ‘XX, that small by drag into the still impact not would of year would that in redevelopment, probably tenancy at

Todd Thomas


Bruce Schanzer

that as because And we just Robin through out, into we we I going creep for leasing think Todd, really of report leasing the some again, redevelopments. see that’s our and strong. good occupancy statistic function use continue as is that to distorted occupancy pipeline we walking itself do vacancy are the But working things our really very that is and controlling now. the be seeing just we think point, going amplify did just we those that, have level our are going high grocery-anchored and major job to execute the value-add as that people leasing of intentional strength two at low to in that a of to we to right incur that’s to and The you effectuate of up as portfolio of of the I redevelopments account value-add a the and of to on that strength some starts the mixed redevelopment, a the And interject XXs. mid just vacancy pipeline, pipeline

Todd Thomas

Got it.

it’s are sort and at end different back see you things so, a get XX% mid with portfolio, and the so, ‘XX low now range it to realized mix it of basis reasonable I to or the the over So achievable side you past [Technical of XXX points being redevelopment and Difficulty]? the at right but different portfolio, on XX.X%, otherwise, call to

Bruce Schanzer


and that is like in assets see the – the obviously characterization, a tenant, what grocery-anchored a again. intentionally So the clear, I is there between broad is they yes. as is can would non to to is portfolio you in of those be spaces, core get there going kind headline are to is answer we when trending differentiate the where level But as that but what are realistically and operating of action vacate we we seeing exactly the statistic sort no – a described

Todd Thomas

private public Hill like valuations, being Hill market helpful. something disconnect that’s discussed exploit you is sounds similar cap you – Camp then of for sale then plan or And through additional and contemplated the exploit to there to look rate, disconnect? between that disposition it further else that to Okay. And Bruce, Camp the to X.X% is

Bruce Schanzer

would followed you’ve and hopefully we management I at appreciate time, look analytical discipline and really you for can a everything. Todd, to we from What And continue at look it say, us and long perspective, everything. a

we we our is, making and I by making decisions and and And need are about we again, this decisions. what just think that allocation strategic struck am so what board on reflect disconnect as is struck by capital to are as

of considering by as it focus But strength and runs sale it’s Hill the deal. the considering asset gamut. the the us big certainly, this area so Camp evidenced And market, a in disconnect for

Todd Thomas

of guess, company regarding input in the impact and Board months what meetings turnover the and areas the of some in just – and thinking Okay. members, of with public I Board of in valuations kind about the joined new had? the few that last lastly, guess terms the last I disconnect and members new time. But some about over the talking What’s private the quite business? the talking for Board been have the market their those several they Board you’ve about in two And months, have emphasis the

Bruce Schanzer

gone as statement, I with strength broad to all, we strength would say the from of First really Board that a change. have

are before say room, we are new conversations haven’t beat. So they additions. the have, have Board we this this Directors well terrific shareholders are we a they Directors when up Cedar debates members And or Board, same. on our to heated new the and to terrific topic that that or fact before integrated at is our they lot thoughtful approaches independent. to things we in process And our was of This are if on COVID. a literally were a have that any all pre-COVID situation focused have These would they as we with prior how run again, we terrific the and Board And whole of I be activist and describing had the often was and it’s missed earlier. topics. a great thrilled really of the we Directors listening that I the and legacy commented the Board activist And very one the about

high be on certainly, and it’s And focused in very integrity focus Directors have this deliberations. on that change, issue. Board up prior areas folks Board the was our the of the Directors the picked this continues began So that of to one new very Board, to thoughtful, conversation, we

Todd Thomas

you. Thank Okay, alright.

Bruce Schanzer



Van next question. Instructions] proceed Dijkum Please is your Floris with question Our from Point. [Operator with Compass

Floris Van Dijkum

Thanks or afternoon, question. guys. for evening, taking good my good Hi,

or see way do see? bit at maybe Just one in total update to an much is how if stands a occupied Obviously, How can mix little of information you pipeline? now to us that a of right spread, it bit pipeline, your terms it you the looking also look on you but do at robust the of will. leasing of more little you pipeline as lease give if your and demand

Bruce Schanzer

why do will me you I just Robin, extent Let maybe then the necessary? amplify at don’t take and first this. step it, a to

Robin Zeigler


national of for the are the anchor The and anchor question. the I small to your to we end deals kind are or shops So, the Floris I at beginning to say in that thanks the pipeline of, going types from to question. of would everything national starting seeing guess, smalls retailers. local deals national deals

So, through. of the deals there, retailers the we expansion. we low first, that the lot activity wide about, of coming already And breadth hanging kind focused in are types and on growth and with now process pre-pandemic, fruit that were a were a of their seeing talked at are dealing things

we of are the so that the just And are that fellow benefit through in coming in negotiations in seeing the both are executed wise that pipeline. deals that are

quarters So, deal then did of seeing to quarter, I do the we seen we this over are had back said to are are that to have we think, as spreads. of the occupancy And deals kind just then during leased represent I get we coming occupancy that thus structure, pre-pandemic, before, better related seeing And based again, better spreads to really to related on think low-XX%ish what we we expect add far. – on that side. kind that

that So, we continue. activity expecting are to

Floris Van Dijkum

your Xx, forward leasing so are I your I look to obviously in on in into provide you spreads, are of new they you activity? Robin, going for Maybe much insight going it not terms because were does leasing be if of your what still also So your almost mean are basis that how one-offs really They negative But you spread. But spreads really just are costs, were a was what there. a leases. doing buying Obviously, the that. at some were there elevated.

Robin Zeigler

Yes. question Floris. Thanks for the

total we white have deals has comparable to to space or a We a we making the box. that just above a our a going XXX% older the So, to with related this that applied it’s rent all and this look to the give a space shopping for that But be deal box. of be kind said, it capital we we it space some of there an deal. capital our a really the positive that of leased may lease. in apply that for the to often sizable being leasing amount beyond And the try capital provides much leasable just effective spaces lease capital box to for limit net that, how leasable needs hasn’t while, in white on get put centers, term of deals for has certainly been of ability vacant each basis at even if individual to With sure but a deal. been to get and still while, some over forward

the So, may in circumstances, some elevated. individual leasing costs feel

very impact have obviously construction of a capital sense makes some we of for factored make in. and increase the at to deal-by-deal that in also on But sure that commodity is look that for We stringently outlay do particular so pricing deal. it again, basis

Bruce Schanzer

there Floris, I think levels. don’t mean, going that elevated that I capital to was add terms I in on larger trend going of some is just

We cost are of in that capital of deals, remarks. deal-by-deal And when size into attractive perspective, the certainly effect is any that with on are proceed. we grants. on we given my we positive Robin again, we are assuming have as analysis. returns deal-by-deal capital from referenced about satisfy lease of certainly, generally in our fairly putting our a the a ourselves saying. It And as and think enough well focused basis prepared small And capital. sample look at net the outlays that was type And really they a I work we quarter speaking

of a ingredients lot basis, big a identify sort it. aggregated necessarily bowl just different it’s rather of with you on you single trend, basis, So, sort when a soup a are can not of it at quarter look in an in of

Floris Van Dijkum

this the much Thanks. do Life us Phil one have whole comment do that. through mortgage can want was to pay loan? on assets to maybe guys. that? restrictive the Great. the financing. Guardian maybe you does package that, I that if the to or you appreciate and assets, you to did follow-up lender. $XXX on if mortgage whole I walk the sell How on five the sell By how you mean? way, whole And things or off to million flexibility to have or have those swap assets you of you do you Could – the substitute maybe want

Philip Mays

Yes. Floris, went reasons the one company of we to life keep the with flexibility. was

have And we there. rights so do substitution

can substitute approval. an So, larger value. asset rights. slightly we asset, But requires them we our have we or can find and necessary, But work equal do through with an that substitution of

prohibited So, selling one-off of an it’s any from on not those individual basis.

Floris Van Dijkum


last Bruce, like you I for of, obviously, you to mean, out Maybe Hill more got, you the – just do we why sale your maybe of the have success in So, of day. that? question not point sale. can every Camp as the more in if like, terms portfolios

right preventing, is not start and that what’s So, bit do more a it climate break is seller’s we think your view the up – still a of market becoming not little why now? in you are it to or

Bruce Schanzer

different Well, asking questions. you two are

I first Then on. to, is don’t real estate something your we answer. are as was, that individually, So, sell alluded we maybe it’s why certainly I more and will question reflecting

And your estate. to real course, of the estate your our you your this with above value, context, your REIT would in playbook, And stock sell point is, classic selling is the below estate. real your stock if stock. your With us real playbook is estate value, real sell if

seller’s other generally, in a been and recognizing that that made in More particular, that it doing continue something to a pretty is of my categories suffer suffering. going in anchored to I to we remarks is be to doesn’t that selling that actions We Camp the some both seem grocery necessarily we about. much about so about appear that. And secretive market, our retail Hill. are clear, it investment think And haven’t where be more saying explicitly I of retail that think think And estate in situation is community that. real of does the challenges

or return a with opportunities supportive so And you especially it’s that my shopping when retail. as to for auspicious and grocery to pretty very lease, the I out mentioned the industrial certainly, seem compare, reasonable both to frankly, be a in buyer, relative retail, a anchored anchored time, net does or of me grocery center it of financing, remarks, seller a multi-family

we asset it of opportunities state characterizing in rather where this by as that seller’s of equilibrium, are much So, in say the the other they interesting would as a a anchored cap riskiness are are informed the an maybe return market, I as assets trends of on than type. lot grocery rate by particular

drift to anchored anchor not again, industrial and those returns, you So drift continue in cap grocery that rates that retail to were a down. and up, the would down. trend rates think probably the X% extent think continue to I grocery To and see to the deliver I multi-family – drift net will grocery lease cap extent that cap rates

So, pretty that I another think a one they significant in to way. relate

Floris Van Dijkum

Thanks, Bruce. Appreciate that.

Bruce Schanzer



call the I Schanzer have question-and-answer session. will end we the the reached closing remarks. for over of And to turn Bruce now

Bruce Schanzer

an balance forward enjoyable results strong of continuing to look all evening. with you in wish share for us to the and summer our you Thank this progress We for you delivering shareholders. joining our


And may for And you this your concludes this today’s conference. at participation. time. your you disconnect lines Thank