Good day, and welcome to CTO Realty Growth F ourth Quarter and Fiscal Year 2024 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would now like to turn the call over to Phil Mays, CFO. Please go ahead. Thank you. I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities laws. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. Today's call will include certain non-GAAP financial measures. For reconciliation of these non-GAAP measures, you should also refer to our earnings release and SEC filings. You can find our SEC filings, earnings release, supplemental, and most recent investor presentation on our website at ctoreit.com. With that, I will turn the call over to John. Thanks, Phil. 2024 was a year of significant accomplishments towards execution of our strategic business plan. Our robust performance was driven by investment volume and leasing activity that both exceeded expectations, and with efficient capital raising, we reported Core FFO of $1.88 per share for the year, a record high for CTO, and growth of 6% from 2023. Beginning with investment activity, in 2024, we completed $331 million of investments at a weighted average yield of 9.3%, consisting of $227 million of retail property acquisitions located in our target markets of the Southeast and Southwest, and $104 million of structured investments. These amounts include two investments closed in the fourth quarter. In November, we originated a $40 million first mortgage loan for the development of an 80,000-sq-ft retail center anchored by Whole Foods Market located in Atlanta. The loan has an initial term of 30 months and an initial fixed interest rate of 12.15%. Additionally, this development neighbors our shopping center known as The Collection at Forsyth, and we have the right of first refusal to purchase it. In December, we acquired Granada Plaza for $17 million, expanding our presence in the Tampa market. Granada Plaza is a 74,000 sq ft shopping center anchored by high-performing Publix and is in a densely populated and growing retail market in the Tampa metro area. Our investment activity over the full year of 2024 increased our portfolio by 1 million sq ft, or 26%, to 4.7 million square feet. Significantly, we were able to complete our first investment in Charlotte, North Carolina market while further expanding our presence in both Orlando and Tampa. With our growth in 2024, I want to note that our total enterprise value rose by 33% to approximately $1.3 billion, and we ended the year with significantly reduced leverage and over $200 million of liquidity. Now, transitioning to leasing, during the fourth quarter, we signed 68,000 sq ft of new leases, renewals, and extensions, bringing full-year leasing activity to more than 450,000 sq ft at an average rent of $24.07 per sq ft. On a comparable lease basis, we signed 352,000 sq ft for the full year 2024 at a positive cash lease spread of 23% and an average rent of $23.36 per sq ft. We believe that our strong comparable leasing spreads are a further indication of the strong tenant demand for our high-quality properties within our strategic markets. Significantly, our signed not-open leasing pipeline now stands at $5.2 million, representing almost 6% of in-place cash rents. The rent commencement associated with this pipeline will be weighted toward the second half of 2025. Accordingly, we expect to recognize just over 50% of it in 2025, and for 2026, we'll receive the full benefit of it. Moving to recently announced retailer bankruptcies, given that all of our impacted leases were for spaces with meaningfully below-market rents and embedded value, we have been proactive in working to quickly regain them. Late in the fourth quarter, we successfully worked through the court process and regained four spaces that were occupied by our two Big Lots, one Conn's, and an American Freight. Furthermore, we are now working on agreements to get possession of our three Party City spaces and three Joann's spaces early in 2025. Notably, we already have LOIs or are negotiating leases with tenants for a majority of these spaces. We believe this is a testament to our favorable markets and locations which drive tenant demand. Based on current lease negotiations, we currently estimate that potential releasing spread for these spaces could be between 40% and 60%. While we are making rapid progress on leases with new tenants, it simply takes time for tenants to obtain permits, complete their build-out, and open. Accordingly, we expect rent from new tenants to commence during 2026. We are also in negotiation with several anchor tenants for our 10 acres of undeveloped land adjacent to our shopping center at Collection at Forsyth. We are targeting to have this property contribute to earnings by late 2026. The leasing opportunity for this property, combined with the releasing opportunities related to the recent retailer bankruptcies and our signed not-open pipeline, should provide strong tailwinds for 2026 earnings growth. As we look ahead, our acquisition pipeline is robust, and we currently anticipate closing one or two acquisitions in the near term. We're excited about these opportunities and the ability to continue our portfolio growth with the high-quality investments that attractive yields in 2025, and look forward to providing more information to you soon, and with that, I will now hand the call back over to Phil. Thanks, John. As John discussed, we had an excellent fourth quarter concluding a strong 2024. Starting with the balance sheet, during the fourth quarter, we raised net proceeds of $33 million at a weighted average price of $19.77 per share, which brought our total net proceeds raised under our ATM program to $165 million for the full year at a weighted average price of $18.79 per share. To place this in context, the capital we raised represents over 40% of our common equity market capitalization at the beginning of 2024. This capital helped us to improve net debt to EBITDA by over a full turn, ending the year at 6.3 times. Further, our 2024 ATM activity, along with closing a $100 million term loan in September of 2024, provided us with capital to significantly grow the company and, importantly, ended the year with $222 million of liquidity and a balance sheet to support continued growth. In 2025, we do have one debt maturity. Our convertible notes, with an outstanding face amount of $51 million and a stated interest rate of 3.78%, mature on April 15th. We have recently sent notices to the holders of the convertible notes of our election to settle these notes in cash. Accordingly, with the terms of the notes, the cash settlement price is not fully fixed until maturity and will change primarily based on our common share price. However, for reference purposes, a $20 common share price is equivalent to approximately a $75 million settlement of all the outstanding notes at maturity. Moving to operating results, Core FFO was $14.2 million for the fourth quarter, a $3.3 million increase compared to the $10.8 million reported in the fourth quarter of 2023. On a per-share basis, Core FFO was $0.46 in the fourth quarter of 2024 compared to $0.48 in the fourth quarter of 2023. This change of $0.02 per share is primarily the result of significant reduction in leverage that I discussed earlier. For the full year 2024, Core FFO was $1.88 per share compared to $1.77 per share in 2023, representing 6% growth. Now, on to guidance. For 2025, we are establishing a Core FFO range of $1.80-$1.86 per share and an AFFO range of $1.93-$1.98 per share. The assumptions that support our guidance are detailed in our earnings press release, but I would like to provide additional context regarding two matters. First, selling our convertible notes for cash will cost approximately $0.05 per share in 2025 due to the settlement price being an added premium to the face amount and rolling the relatively low coupon rate of the convertible notes to our revolving credit facility rate. Second, page eight of our updated investor presentation posted last night includes a summary of the 10 spaces John discussed earlier on the call. Our guidance includes a $0.10 per share impact related to these spaces based on the assumptions that we have regained possession of all of them around the end of the first quarter of 2025. And with that, Operator, please open the line for questions. Thank you. If you'd like to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself from the queue, please press star 11 again. Our first question comes from Gaurav Mehta with Alliance Global Partners. Your line is open. Thank you. Good morning. I wanted to follow up on your comments around convertible notes and just clarify, so that settlement, you guys are expecting that with cash, and there's no expectation of share issuance with that conversion, right? Yeah. Hey, this is Phil. We have given notice that our intention is to settle in cash. And so contractually, that's the only right we have. If we wanted to settle some in shares, generally, the noteholders would still be open to that, and we could do an exchange with them. But at this point, we anticipate settling it in cash. Okay, and so the cash, the source would be the line of credit? Yes. It would initially go on the line, and then we'd be termed out later. Okay. Second question on the guidance. I was hoping if you could provide some more color on your 2025 outlook between acquisitions and structured investments, what kind of mix you're expecting? Yeah. So right now, presently, we're seeing just core acquisition opportunities. We don't have any structured investment opportunities kind of in front of us right now, but we expect to see some later in the year. But right now, it's primarily core acquisitions. Okay, and then lastly, on the Same-Store NOI guidance, can you provide some color on how you expect that to trend from quarter to quarter? Yeah. I mean, first, I would just say I would always kind of focus on the annual number there because like $150,000, it's a small pool. $150,000 in one quarter is like 1%. But generally, pretty even. It's going to bump up and down a little, but it'll be generally pretty even. And then hopefully, in the fourth quarter, it'll start to pick up a little more. Okay. Thank you. That's all I had. Thank you. Thank you. Our next question comes from Rob Stevenson with Janney Montgomery Scott. Your line is open. Good morning, guys. That slide eight in the deck was very helpful, but a question for you, John. Did I understand you say that half of the releasing would impact 2025 and that you'd get the full impact of the $4-$4.5 million of new rent in 2026? Just trying to jive that with the $0.10 a share in the guidance. Hey, it's Phil, and I'll let John add in. But on what he was talking about, 50% in 2025, he was talking about our signed not open pipeline, which is separate from page eight. Page eight is just these recent retailer bankruptcies and vacancies, and that's separate from that. On page eight, all of that we're anticipating to come online in 2026. And then separately, the signed not open pipeline, we're anticipating on picking up about half of that in 2025 and then the full impact of that in 2026 to add to the pickup of these vacancies. Okay. That's helpful. And then you have one of your structured investments, the Watters Creek, maturing in April. What is that looking like in terms of recent conversations with that borrower? Is Is that a repay? Is that an extend? How is that likely to be resolved? And if you're getting the money back, expected to get the money back, then how is that market these days to replace that? Or are you going to wind up bringing the structured investment portfolio down a little bit in size? Yeah. I think I was with the borrower a week ago, and they're doing great on that property. And we're hoping that we stay in there. We expect that we'll have probably a short-term extension. So when I mean short-term, maybe a year or something like that, but we'll see. But having said that, given it's a high-quality grocery anchor center, our pricing there, if we were to get it back, we anticipate that we'd be able to reinvest that at a higher yield. I guess if that's likely to stay in the portfolio and nothing else comes out in the interim, how aggressive should we expect you guys to be in expanding the $107 million portfolio today? Is that likely to end 2025 at $150, pushing $200? Is this the current sort of upper end? Yeah. I would say maybe add $40 to the balance is something to expect. That's something that we got to imagine we can kind of grow that by upper bounds of $50 million this year is sort of the thought process. Okay. That's helpful. And then last one for me, can you talk about how your AMCs are performing these days? Is it you're starting to get back to some more robust releases with the Captain America movie and stuff like that? How are they performing versus where they were in the past? And how much of a concern are they for you at this point in the cycle? Yeah. I mean, they're definitely a lot less concerned because they had a good year last year, and as you mentioned, Captain America has been doing very well, and especially in these locations, so the AMCs that we have are top performers in their market, and so we're actually in Charlotte that the last acquisition, the AMC is not something that you would find to be an exciting experience when you drive up to it, and we're actually going to paint and add lighting and everything. Even though it doesn't look great, it does terrific. I was with someone that lives in the Charlotte area, and they mentioned that they go to this theater even though it's out of the way because it's the most kind of convenient for them to get in and out of, and so long story short, all of them are performing very well. Yeah, the box office, just as a macro backdrop, has been very good for them. Okay. Thanks, guys. Appreciate the time. Have a great weekend. Great. You too. Thank you. Our next question comes from Matthew Erdner with Jones Trading. Your line is open. Hey, good morning, guys. Thanks for taking the question. John, I believe you mentioned something about those 10 additional acres next to Forsyth or up in that area. Could you remind me again what the plan was with that? Yeah. So originally, when we bought it, we had a tenant right off the bat who started paying us sort of a licensing fee. It was really an option sort of fee. They dropped it as they were having trouble with their other operations in other locations, so they wanted to scale back their expansions. And so we obviously took it back, and now we're discussing with several different large tenants that would be very complementary to the collection as far as a great draw and bringing a lot of visitors to the location. So we're in those negotiations right now. So we hopefully expect something in, let's just say, in the next three months. And then this is something that would probably come online, whether it's late 2026 or 2027. But yeah, it's something that we wanted to highlight because we're starting to kind of get closer to a deal there. Yeah. That's helpful. And then I'm guessing that would kind of include the first right of refusal similar to others. And then as a follow-up to that, it's probably a little ways away, but do you ever anticipate kind of closing on some of those right to refusals and taking those properties in? Yeah. So on that one, just to be clear, on the 10 acres, we own that property, so we could build it and have the lease ourselves and not have a first right of refusal. It's not an outside developer. It could be an outside developer, but right now, we're talking to tenants on a primary basis. And then with regard to your question on other deals where we've done loans where we have a first right of refusal, yeah, I think the Whole Foods would be that across the street there at Collection would be highly likely that we would buy that in because it's such a complement to Collection. Got it. That's helpful. Thank you. Thank you. Thank you. Our next question comes from RJ Milligan with Raymond James. Your line is open. Hey, good morning, guys. Appreciate the detail on slide eight. It's helpful. But I'm curious, Phil, for the guidance, what is baked into additional potential bad debt? Sort of you obviously highlight the known or expected vacancies, but I'm curious what you're baking into guidance for unknown? Yeah. So we've taken out all the known. Largely, that's on slide eight, and that's just excluded from 2025. And then after that, as far as the tenants that are in place, it's pretty much our general 1%, nothing different from historical run rate on that. Does that answer your question? It does. And then, I know you guys mentioned for those 10 boxes, you expect the rent to commence in 2026. Can you just give me an idea of the expected timing of that rent commencement in 2026? Yeah. I mean, we're hoping to have most of them online in the first half of 2026, the majority of them. There might be two or three, depending on timing, that could be the latter half, but assuming we can, I mean, we are working really hard, RJ, to get them back as soon as possible and get them released, and if we can get them back sooner, then we would hope to have them all early in the first half or in the first half, but there could be a few boxes that might take a little longer to get a hold of, and then those could be delayed to getting them online in the second half, but we would hope to have a majority of them on, up, and paying rent in the first half. And a little bit of it, RJ, is we do have opportunities to do tenants that could come in faster but would not be as accretive to the whole center and not as good a kind of credit. And so we're willing to kind of take a longer lease delivery rent commencement for a higher quality tenant that just takes a lot longer because they're investment grade and that sort of thing. And that's helpful. That sort of leads into my last question, John, which is who are the tenants that you're talking to that are interested in those spaces? And then just curious how you think about the overall value creation as you get those new tenants into the space? Yeah. I mean, the value creation is definitely low-hanging fruit for sure. I mean, think about Sanford and Orlando that we bought a year ago, roughly an eight-cap. And you have Big Lots coming back at roughly $12 a sq ft. And we're talking to a tenant that is investment grade at basically double that. So I mean, just not only the income accretion, but then the cap rate compression of having that credit versus when we bought it with Big Lots. And that's across the board on these Party Cities. The backfills are enterprising tenants that are growing that are kind of darlings of Wall Street sort of thing. So we're very excited about the mix that we'll be able to backfill here. That's helpful. Thank you, guys. Thanks. Thank you. Our next question comes from John Massocca with B. Riley Securities. Your line is open. Good morning. Maybe kind of going back to slide eight, the $9-$12 million of CapEx. I mean, how does that kind of impact the CapEx outlook for 2025 versus, say, with kind of more run rate or what you were doing in 20 sorry, 2025 versus what you were doing in 2024? Yeah. I mean, so that's incremental to what we are kind of our regular run rate there. So it would be on top of that, John. And the way to think about that CapEx too is if we're on the lower end of that, we'll be on the lower end of the spread there, like 40%. And if we're on the higher end, 12, we'll be on the higher ends of the spread there with a much larger mark-to-market. But that is kind of a one-time incremental to get these boxes up and running again. Okay, and kind of with that in mind, I mean, what lease durations are you kind of talking about today with potential replacement tenants, just given there is a decent amount of CapEx going into these boxes? Yeah. Roughly 10- 15 years. So good lease duration and good credit behind them. Okay. Appreciate that. And then on the kind of the releasing side of things, is the timing you're seeing typical of what you would see for vacancies, maybe kind of smaller vacancies you've seen in the portfolio historically? I know you talked, there's a bit of a variance on big versus maybe some smaller tenants can come in faster. But I mean, is it just indicative of anything in the kind of macro environment or specific to these assets, or is that timing just kind of typical if you were to see other vacancies going forward? Yeah. I mean, it's definitely typical of the macro environment with these highly desired boxes. These national tenants that we're talking to just have their normal pipeline of what they're delivering this year, next year, years out. So it's just if you want the higher quality tenants, you're just kind of getting into their pipeline, and they just have a process. So it just takes more time. Now, if you want to go the local route with a smaller operator, certainly it's a lot faster. But certainly, we're looking at the total value creation of having higher credits in these centers. Okay. And then last one for me, maybe broad strokes if you don't have the exact number in front of you, but what would kind of same-store growth expectations have been for 2025 if you weren't dealing with these vacancies? Yeah. Two to three. So we're putting guidance out at one, but it would have been more in the two to three range. Perfect. That's very helpful. And that's it for me. Thanks. Thank you. Our next question comes from Craig Kucera with Lucid Capital Markets. Your line is open. Yeah. Hey, good morning, guys. We've got a lot of activity planned in 2025 without any dispositions. And I know you're comfortable running the company at higher leverage. But is the plan to be leverage neutral, or did you maybe front-load some equity in 2024 and you're willing to lever up? Yeah. I mean, look, we want to have a trajectory on the leverage to go down. Clearly, the converts are kind of a unique situation this year, but given that what we have kind of in front of us, we feel like the acquisitions that we're seeing right now are accretive even at these lower stock price levels, so just depending on how things go. Remember, when we settle these converts, they are basically hedged against our stock, so they will be covering on the stock, so there should be a good backdrop, and then hopefully, given the size of the company and the growth of what we did last year, we're getting closer to REIT index inclusion, so if you look at the investor base that came in in December, we're starting to get more of that index buying, as you can see. BlackRock bought a lot in the quarter, had a new REIT dedicated come in, so we're starting to get that traction that we always wanted, so I think the backdrop is really good for this year, and so looking forward to kind of executing on acquisitions that are going to be complementary and accretive and see what we have in front of us. Okay. Great. Changing gears, at the time of the Carolina Pavilion acquisition, I think it was 93% occupied. I guess as part of your underwriting process, were you aware you would lose a number of tenants in the fourth quarter or want to kick them out? And was that mark-to-market opportunity part of the attractiveness of the purchase? Yeah, so I think I might have mentioned that in the last earnings call that when we put under contract Carolina Pavilion, and by the time we closed, we had three tenants basically go bankrupt and close their stores, which is highly unusual, and most people would maybe say that would be detrimental and you drop the contract, but actually, it was in our underwriting that it came sooner, of course, on the closings, but the mark-to-market opportunity to happen faster was just so extraordinary for us that the excitement level for what that property can do is pretty exciting, so we have great activity, as we mentioned, on these boxes and in the process of getting these tenants to backfill, so the economics of this property are going to be totally different here in 12-24 months. Right. And just one more for me. Given the changes in the current administration and some job losses in DC, have the folks at NVR communicated any changes to you regarding their development schedule or any of that sort? No, they're seeing great activity on the multifamily front on that project. And they have an incredible amount of activity and demand for that land. That Northern Virginia area, as you know, Loudoun County, the data center market has just been extraordinary. And a lot of the contractors are out in the market, to your point, but there's still such housing demand that there are no bumps at all along the road. Okay. That's it for me. Thanks, guys. Great. Thank you. Our next question comes from Michael Gorman with BTIG. Your line is open. Yeah. Thanks. John, maybe just sticking with some of the discussions around acquisitions and some of your underwriting. I'm curious if maybe not yet, but if you think there'll be some additional opportunities in the acquisition market shaken loose by some of these recent retailer bankruptcies where maybe smaller landlords don't want to have to go through a retenanting or don't want to have to go through another CapEx cycle. Are you seeing or starting to see any opportunities because of these new vacancies in the marketplace for acquisitions? No. We're not seeing that. I think we're seeing almost the opposite. I mean, you're seeing a lot of institutional capital starting to creep into this market. And we expect it's kind of gotten out there in the market a little bit. There's going to be probably a large trade that's going to be very complementary to one of our assets that's in the market. So you're going to see some sort of dramatic acquisitions as you're seeing large pension sovereign capital migrate into the shopping center space. I mean, obviously, you saw the Blackstone ROIC acquisition closed. And that was a little and I think we were all kind of lucky with the horrible Palisades fire and everything going on in California, whether there'd be a situation there, but that closed like clockwork. I mean, so you're starting to see really that sort of wave of capital come in for the long term. And as I mentioned, the Party City and the Big Lots and all the Conn's, kind of that's really opportunity versus headwinds because those tenants are at such low rents and did really nothing for shopping centers and actually probably was a deterrent for some of the shopping centers. So this is more of an opportunity than a headwind. Got it. Great. And then I think I could probably tell just based on the CapEx expectations, but for any of the LOIs you're discussing, would any of that add a grocer to an existing center, or are these all non-grocer tenants? These are all non-grocer. We had a grocer opportunity, but the grocer was just going to deliver it longer than we wanted to really sit around and wait for. They had a lot of things in their pipeline to kind of get done first. And even though having a grocer in one of our shopping centers has been great, we felt like we're not buying green bananas. Perfect. Thanks so much. Thank you. Thank you. Our next question is a follow-up from John Massocca with B. Riley Securities. Your line is open. Just a quick one for me, given some of the conversations on mark-to-market with rents. What's the outlook for the 2025 lease expirations? I mean, just kind of noting it's above your average cash rent per square foot, but everything's kind of bespoke in a portfolio like this. There's nothing where there's a roll-down situation. Everything's a positive. It's definitely not kind of the mark-to-market we're seeing in the page eight of our presentation. But everything, the trajectory is definitely up, but there's no kind of drawdown as far as having higher rents rolling. Okay. Any kind of broad stroke ranges you're kind of looking at for just this year's lease expirations? I would say kind of the 10% range is kind of a good range to say plus or minus where those tenants are rolling to. If they're coming out, the market rents are at least 10% higher. Okay. Very helpful. That's it for me. Thanks. Thank you. There are no further questions at this time. This does conclude the program. Thank you for your participation, and you may now disconnect. Everyone, have a great day.