CTO Realty Growth (CTO) Q2 2024 earnings summary

Executive summary

• Owns and manages 20 commercial real estate properties totaling 3.9 million sq. ft. across 8 states and 11 markets, with a focus on high-quality retail and mixed-use assets in high-growth Southeast and Southwest MSAs.

• 71% of portfolio ABR and over 70% of rents are from Georgia, Texas, and Florida; 85% from ULI's Top 30 Markets.

• Portfolio repositioned since 2019, doubling square footage and tripling annualized base rent through active asset recycling and value-add acquisitions.

• Business includes income properties, management services, commercial loans/investments, and a significant investment in Alpine Income Property Trust (PINE).

• Management team has deep industry experience and strong shareholder alignment.

Financial highlights

• Q2 2024 revenue was $28.8M, up 10.7% year-over-year; six-month revenue was $57.0M, up 12.2%.

• Q2 2024 Core FFO per share was $0.45 (up 4.7% YoY); AFFO per share was $0.48 (flat YoY); six-month Core FFO per share was $0.93 (up 13.4%), AFFO per share was $1.00 (up 9.9%).

• Q2 2024 net income attributable to common stockholders was $(0.7)M, down from $0.6M YoY; six-month net income was $4.0M, up from $(6.6)M.

• Same-property NOI grew 2% in Q2 2024 and 4% for the first six months year-over-year.

• Q2 2024 AFFO payout ratio was 79%, with an annualized dividend yield of 8.7%.

Outlook and guidance

• Raised 2024 Core FFO guidance to $1.81–$1.86 per share (midpoint up 11.9%) and AFFO guidance to $1.95–$2.00 per share (midpoint up 11%).

• Full-year 2024 investment target is $200M–$250M at 8.5%–9% initial cash yields; disposition guidance is $50M–$75M.

• Same-property NOI growth expected at 2%–4% for 2024; year-end leased occupancy projected at 95%–96%.

• Management believes liquidity is sufficient for operations, capital needs, and debt service over the next 12 months.