CTO — CTO Realty Growth, Inc.

CTO Realty Growth Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Core FFO: $16.9 million, up from $14.4 million year-over-year; $0.52 per diluted share vs. $0.46.
• AFFO: $18.2 million, an increase from $15.5 million; $0.56 per diluted share vs. $0.49.
• Same-Property NOI: Increased 6.8% year-over-year; 4.2% growth when excluding nonrecurring items.
• Portfolio Occupancy: 95.4% leased overall; 97% leased at key property [indiscernible] Crossing.
• Debt: Total debt at $651.8 million with a weighted average interest rate of 4.6%.
• Liquidity: Approximately $125 million available.

2. Strategic Updates and Business Highlights

• Acquisition: Completed the acquisition of Palms Crossing in Texas for $81.6 million, which is 98% leased and has potential for additional outparcels.
• Leasing Activity: Executed leases totaling 153,000 square feet, with a 14% average cash rent increase on comparable leases.
• Outparcel Development: Progressing on six outparcels, with expectations of low double-digit unlevered yields on a $30 million investment, contributing to earnings starting in 2027.
• Property Recycling: Madison Yards in Atlanta is under contract for sale, expected to close in May, allowing for capital recycling.

3. Forward Guidance and Outlook

• Core FFO Guidance: Increased to $2.06 to $2.11 per diluted share for 2026.
• AFFO Guidance: Raised to $2.19 to $2.24 per diluted share.
• Same-Property NOI Growth: Expected between 3.5% to 4.5%.
• Investment Volume: Anticipated structured investments between $175 million to $250 million.

4. Bad News, Challenges, or Points of Concern

• Vacancy Issues: Carolina Pavilion remains below 90% occupancy at 83%, with ongoing negotiations to fill vacancies.
• Tenant Risks: One tenant vacated 98,000 square feet in Albuquerque, which impacted same-property NOI; however, this space is expected to be leased to the state of New Mexico by late 2026.
• Market Conditions: While there is no current hesitancy in leasing activity, macroeconomic uncertainties could pose future risks.

5. Notable Q&A Insights

• Investment Strategy: The new $75 million preferred equity investment at a 12% yield was funded by recycling the Watters investment and will be supported by upcoming property sales.
• Leasing Pipeline: Progress on remaining vacant anchor spaces is positive, with terms agreed but slow-moving due to the nature of large national tenants.
• Market Dynamics: Increased competition from larger institutional investors in acquisitions could pressure pricing, but CTO's nimbleness is viewed as an advantage.
• Structured Investments Cap: Management indicated a target cap for structured investments at around 15% of the balance sheet.

This summary encapsulates the key points from CTO Realty Growth's Q1 2026 earnings call, highlighting both the positive developments and the challenges faced by the company.