Cto Realty Growth, Inc. ((CTO)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
CTO Realty Growth, Inc. recently held its earnings call, projecting a generally positive outlook. The company showcased strong leasing activity and financial performance, which helped to outweigh challenges such as certain vacancies and elevated tenant improvement costs.
Strong Leasing Activity
CTO Realty Growth reported impressive leasing activity, completing 482,000 square feet of overall leasing year-to-date through September 30. This activity included a weighted average base rent spread of 21.7%, highlighting the company’s ability to secure favorable leasing terms.
Significant Lease at Shops at Legacy
A notable development was the signing of a 30,000 square foot lease with a co-working operator at the Shops at Legacy. This lease is expected to fill the space formerly occupied by WeWork by the end of 2026, marking a significant milestone in the company’s leasing efforts.
Financial Performance and Guidance Raised
CTO Realty Growth reported a rise in Core FFO to $15.6 million for the quarter, up from $12.6 million in the previous year. The company has also raised its full-year 2025 core FFO guidance to a range of $1.84 to $1.87 per share, reflecting confidence in its financial trajectory.
Debt Management
The company successfully closed $150 million in term loan financings, which has helped reduce maturing debt and enhance liquidity. CTO Realty Growth ended the quarter with $170 million available, positioning it well for future opportunities.
Vacancy Challenges
Despite the positive leasing activity, CTO Realty Growth faces challenges with significant vacancy at Carolina Pavilion, where 40,000 square feet remain unleased. The company has experienced false starts with prospective tenants, indicating ongoing hurdles in this area.
Tenant Improvement Allowances
Tenant improvement allowances were notably higher this quarter, a trend expected to continue into the fourth quarter due to anchor tenant openings. This indicates a strategic investment in enhancing tenant spaces to attract and retain lessees.
Forward-Looking Guidance
Looking ahead, CTO Realty Growth anticipates continued robust leasing activity, with a positive cash leasing spread of 40% to 60% across its spaces. The company has raised its full-year 2025 guidance, with a new core FFO range of $1.84 to $1.87 per diluted share and a new AFFO range of $1.96 to $1.99 per diluted share, signaling strong future performance expectations.
In summary, CTO Realty Growth’s earnings call highlighted a positive sentiment driven by strong leasing activity and improved financial performance. While challenges remain, particularly with vacancies and tenant improvement costs, the company’s strategic initiatives and raised guidance suggest a promising outlook for the future.