CTO Realty Growth Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : Good morning guys. John, other than the John, other than the 14% dividend, what's the attractive thing about the $10 million hospitality investment and what's the collateral if they wind up not being able to pay over the next five years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, CTO.N - Q3 2024 CTO Realty Growth Inc Earnings Call

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : Okay. Can you hear me

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : So other than the 14% dividend, what's the attractive thing about the $10 million hospitality investment? And what is the collateral if they can't pay over the next five years at some point?

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : And you know, Phil talked about the acquisition, the raised acquisition guidance. How are you thinking about funding that, is that going to be fun through ATM issuance or there are more dispositions that you're teeing up and just won't close until early '25. How are you thinking about the, the funding of the equity portion of you know, deals over the next six months?

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : And how are you thinking about the remaining office asset versus selling today versus holding into the future? How is that sort of math looking like to you in terms of the optimization there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, CTO.N - Q3 2024 CTO Realty Growth Inc Earnings Call

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : Okay. And then, so you guys have talked about the $6.5 million of signed but not open leasing. When does that start to hit ffo and when are the, is it chunky or is it evenly sort of spread throughout when that comes online in 2025.

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : All right, that's helpful. And then last one for me, any known move outs of note at this point in 2025 in the portfolio.

Question: Rob Stevenson - Janney Montgomery and Scott - Analyst : All right, thank you. Thanks guys for the time and have a great weekend.

Question: Craig Kucera - Lucid Capital Markets - Analyst : Hey, good morning guys. Obviously a pretty aggressive acquisition quarter and, and based on guidance, it looks like you could do another 25 to 75 million roughly for the rest of the year. Based on the yield assumptions looks like that would all be properties. But are you looking at any other additional structured finance investments? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, CTO.N - Q3 2024 CTO Realty Growth Inc Earnings Call

Question: Craig Kucera - Lucid Capital Markets - Analyst : Got it and, and with the sale of the medication credits this quarter, should we expect to see any more remaining earnings from real estate operations or is that effectively ceased?

Question: Craig Kucera - Lucid Capital Markets - Analyst : All right,

Question: Craig Kucera - Lucid Capital Markets - Analyst : Yeah, the changing gears. I want to talk about the $44 million mortgage investments, looking at that project up by Dulles. You know, it looks like there's at least at one point some potential hotel space. A lot of office is the collateral underlying loan all of the entire project or is it carved out towards maybe, you know, retail, multi family or something else?

Question: Craig Kucera - Lucid Capital Markets - Analyst : Got it. So they, so they have broken ground at this point.

Question: Craig Kucera - Lucid Capital Markets - Analyst : Got it. And, and looking at the three property portfolio you acquired this quarter, you know, it looks like there's a lot of occupancy upside to where the assets have already been leased. Can you talk about maybe any sort of capex spend that you're expecting at those properties.

Question: John Massocca - B. Riley Securities - Analyst : Good morning, everybody morning. Maybe just kind of curious on the disposition of Jordan landing, kind of what drove the cap rate there? Just give it fully occupied property. In a, in a pretty high growth market, there's going to be more color on that particular asset in that sale.

Question: John Massocca - B. Riley Securities - Analyst : Understood. And then, in terms of correct me if I misheard, but the lease up of the, the former Wework Space, is that a partial lease up or was that all of, of the previously vacated space? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, CTO.N - Q3 2024 CTO Realty Growth Inc Earnings Call

Question: John Massocca - B. Riley Securities - Analyst : And just because it sounds like you have some big close prospects for the remaining two thirds of the space there.

Question: John Massocca - B. Riley Securities - Analyst : And then maybe bigger picture. You know, have you seen any change just given some of the macroeconomic uncertainty around retailer demand for either their existing space or to kind of take over, you know, move outs or reposition space, etcetera.

Question: John Massocca - B. Riley Securities - Analyst : Any change in demand for backfill for those types of assets.

Question: John Massocca - B. Riley Securities - Analyst : Okay. And then last one for me, I know you didn't provide 2025 guidance because we kind of think about same through and I growth for next year. Any kind of notable puts and takes there that could impact, you know, the comparisons versus what you're going to do this year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, CTO.N - Q3 2024 CTO Realty Growth Inc Earnings Call

Question: John Massocca - B. Riley Securities - Analyst : That's fair and that's it for me. Thank you very much.

Question: R J Milligan - Raymond James - Analyst : Hey, good morning guys. Most of my questions have been asked, but I really want to focus on the leverage. And John you mentioned and, and we saw in the release that leverage has come down pretty nice here. And as at one of the lowest levels it's been, and I'm just curious, how do you think about running leverage going forward? Given historically, you've been more willing to run a high leverage. But obviously as the company gets bigger, I'm just curious how, how you're thinking about running the balance sheet over the next two years.

Question: R J Milligan - Raymond James - Analyst : Okay. That makes sense. That's it for me. Thanks guys.

Question: Gaurav Mehta - Alliance Global Partners - Analyst : Yeah, thanks. Good morning. I, I wanted to ask you on your asset recycling. I think earlier in the call, you said that not expect as much recycling going forward as in the past, just wondering within your portfolio. Are there any assets that that may be sold in the future?

Question: Gaurav Mehta - Alliance Global Partners - Analyst : Okay. Thank you. That's all I had.