CTO Realty Growth Provides 2024 Business Update

Rhea-AI Summary

CTO Realty Growth (NYSE: CTO) provided a business update for Q3 and YTD 2024. Key highlights include:

1. Investment activity of $191.3 million in Q3, totaling $273.8 million YTD at a 9.1% weighted average yield.

2. Originated a $43.8 million first mortgage loan with an 11% initial fixed interest rate.

3. Issued 6.9 million common shares under ATM program, raising $125.7 million.

4. Closed a new $100 million unsecured term loan with an initial 4.7% fixed interest rate.

5. Ended Q3 with 29,971,538 common shares outstanding and $200 million available under revolving credit facility.

The company will provide updated investment guidance when reporting full Q3 results on October 24, 2024.

Positive

• Investment activity of $273.8 million YTD at a 9.1% weighted average yield
• Originated a $43.8 million first mortgage loan with 11% initial fixed interest rate
• Raised $125.7 million through ATM program
• Closed $100 million unsecured term loan
• $200 million available under revolving credit facility

Negative

• None.

Insights

Financial Analyst

CTO Realty Growth's recent business update reveals significant financial activity and strategic positioning. The company has demonstrated strong investment performance, closing $274 million in investments year-to-date at an attractive weighted average yield of 9.1%. This exceeds their 2024 guidance, indicating robust growth and potential for increased revenue streams.

The company's financing activities are particularly noteworthy. They successfully raised $126 million through their ATM program, issuing shares at a weighted average price of $18.63. This equity raise, combined with a new $100 million unsecured term loan, significantly strengthens their balance sheet and provides ample liquidity for future growth opportunities.

The fixed interest rate of 4.7% on the term loan, achieved through existing SOFR swap agreements, is favorable in the current interest rate environment. With approximately $200 million in available credit facility capacity, CTO is well-positioned for continued expansion and potential acquisitions in the high-growth Southeast and Southwest markets.

Overall, this update suggests a positive outlook for CTO Realty Growth, with strong investment activity, improved financial flexibility and strategic market positioning. Investors should monitor how effectively the company deploys this capital to generate returns in the coming quarters.

Real Estate Market Analyst

CTO Realty Growth's focus on high-quality, open-air shopping centers in the Southeast and Southwest markets is a strategic move that aligns with current real estate trends. These regions are experiencing higher population growth and economic expansion, which bodes well for retail property demand.

The company's recent $43.8 million first mortgage loan for a mixed-use development near Dulles International Airport is particularly intriguing. This investment showcases CTO's diversification strategy beyond direct property ownership. The 11% interest rate and 1.25% origination fee indicate a high-yield opportunity, while the property's location near a Metrorail station suggests strong potential for long-term value appreciation.

CTO's ability to source transactions with a 9.1% weighted average yield in the current market is impressive, outperforming many peers in the sector. This yield spread over their borrowing costs should contribute positively to the company's net operating income and funds from operations.

The company's external management of Alpine Income Property Trust (PINE) adds another dimension to their business model, potentially providing additional fee income and strategic synergies. Investors should consider how this relationship might evolve and contribute to CTO's overall performance in the future.

- Closed $274 Million in Investments Year-To-Date -

- Raised $126 Million Under ATM Program in Third Quarter -

- Closed $100 Million Unsecured Term Loan -

WINTER PARK, Fla., Sept. 30, 2024 (GLOBE NEWSWIRE) -- CTO Realty Growth, Inc. (NYSE: CTO) an owner and operator of high-quality, open-air shopping centers located in the higher growth Southeast and Southwest markets of the United States (the “Company”), today provided a business update for the third quarter and year-to-date ended September 30, 2024.

Investment Activity

The Company’s investment activity, including acquisitions and structured investments, was $191.3 million in the quarter and now totals $273.8 million year-to-date, at a weighted average yield of 9.1%. As the Company has exceeded its 2024 guidance for investment activity, it will provide updated investment guidance when reporting its full third quarter results on October 24, 2024.

In addition to previously announced investment activity, the Company recently originated a $43.8 million first mortgage loan that has an initial term of two years with a one-year extension option, carries an initial fixed interest rate of 11%, and included an origination fee of 1.25%. The loan is secured by over 100 acres entitled for an over 2 million square foot mixed-use development located in Herdon, Virgina near Dulles International Airport and adjacent to a Metrorail Silver Line station.

Financing Activity

During the quarter, the Company issued approximately 6.9 million common shares at a weighted average price of $18.63 per share under the Company’s ATM common equity program, generating net proceeds of $125.7 million.

On September 30, 2024, the Company closed a new five-year $100 million unsecured term loan bearing interest at SOFR plus a spread based on the Company’s leverage ratio. The Company applied existing SOFR swap agreements, previously used to fix the interest rate on $100 million of borrowings under the Company’s revolving credit facility, to the new term loan resulting in an initial effective fixed interest rate on the new term loan of 4.7%.

At quarter end, the Company had 29,971,538 shares of common stock outstanding and approximately $200 million of borrowing capacity available under its revolving credit facility.

"With nearly $275 million of investment activity year-to-date at a weighted average yield of approximately 9%, we continue to demonstrate our ability to source long-term accretive transactions,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth, Inc. "Further, we are pleased with the support CTO has received from the capital markets enabling the Company to efficiently raise capital and pay down its revolving credit facility, ending the quarter with a strengthened balance sheet, increased market capitalization and liquidity to support future growth.”

About CTO Realty Growth, Inc.

CTO Realty Growth, Inc. owns and operates high-quality, open-air shopping centers located in the higher growth Southeast and Southwest markets of the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE).

We encourage you to review our most recent investor presentation and supplemental financial information, which is available on our website at www.ctoreit.com.

Safe Harbor

Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words. Examples of forward-looking statements in this press release include, without limitation, statements regarding the Company’s balance sheet, increased market capitalization and liquidity supporting the Company’s future growth.

Although forward-looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include, but are not limited to: the Company’s ability to remain qualified as a REIT; the Company’s exposure to U.S. federal and state income tax law changes, including changes to the REIT requirements; general adverse economic and real estate conditions; macroeconomic and geopolitical factors, including but not limited to inflationary pressures, interest rate volatility, distress in the banking sector, global supply chain disruptions, and ongoing geopolitical war; credit risk associated with the Company investing in structured investments; the ultimate geographic spread, severity and duration of pandemics such as the COVID-19 pandemic and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business; the loss or failure, or decline in the business or assets of PINE; the completion of 1031 exchange transactions; the availability of investment properties that meet the Company’s investment goals and criteria; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other risks and uncertainties discussed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission.

There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.

Contact:
Philip R. Mays
Senior Vice President, Chief Financial Officer, and Treasurer
(407) 904-3324
pmays@ctoreit.com

FAQ

What was CTO Realty Growth's investment activity in Q3 2024?

CTO Realty Growth's investment activity was $191.3 million in Q3 2024, bringing the year-to-date total to $273.8 million at a weighted average yield of 9.1%.

How much capital did CTO Realty Growth raise through its ATM program in Q3 2024?

CTO Realty Growth raised $125.7 million by issuing approximately 6.9 million common shares at a weighted average price of $18.63 per share under its ATM common equity program in Q3 2024.

What new loan did CTO Realty Growth close in Q3 2024?

CTO Realty Growth closed a new five-year $100 million unsecured term loan bearing interest at SOFR plus a spread based on the Company's leverage ratio, with an initial effective fixed interest rate of 4.7%.

When will CTO Realty Growth provide updated investment guidance for 2024?

CTO Realty Growth will provide updated investment guidance when reporting its full third quarter results on October 24, 2024.