SITE Centers Reports Fourth Quarter 2024 Results

Rhea-AI Summary

SITE Centers (NYSE: SITC) reported its Q4 2024 financial results, marking a period of significant corporate restructuring. The company posted a net loss of $13.2 million ($0.25 per diluted share), compared to net income of $193.6 million ($3.69 per diluted share) in Q4 2023.

Key highlights include:

• Operating FFO of $8.3 million ($0.16 per diluted share), down from $54.0 million ($1.03 per diluted share) year-over-year
• Leased rate of 91.1% as of December 31, 2024
• Commenced rate increased to 90.6%
• Generated cash renewal leasing spreads of 10.6%

The company completed several strategic initiatives, including the redemption of $175 million in preferred shares and the spin-off of Curbline Properties (NYSE: CURB) on October 1, 2024, which included 79 convenience properties and $800 million in cash distribution.

Positive

• 10.6% cash renewal leasing spreads in Q4
• Commenced rate improved to 90.6% from 89.8% in Q3
• Strategic simplification of capital structure through preferred shares redemption

Negative

• Net loss of $13.2M vs profit of $193.6M year-over-year
• Operating FFO declined to $8.3M from $54.0M year-over-year
• Leased rate decreased to 91.1% from 92.2% year-over-year

Insights

Financial Analyst

SITE Centers' Q4 results reveal a company in transition following the significant Curbline Properties spin-off, which has fundamentally altered its financial profile. The $13.2 million net loss ($0.25/share) compared to last year's $193.6 million profit reflects this transformation, with Operating FFO dropping to just $0.16 per share from $1.03 previously.

The completed spin-off of 79 convenience properties and distribution of $800 million cash to Curbline has streamlined SITC's portfolio to focus exclusively on suburban, high-income community shopping centers. This strategic narrowing comes with short-term financial pain but potentially stronger long-term positioning in a single asset class.

Despite the headline numbers, operational metrics show resilience in the remaining portfolio. The 10.6% cash renewal leasing spreads are particularly impressive in today's retail environment, indicating strong tenant demand and pricing power for SITC's remaining properties. The improvement in commenced rate to 90.6% (from 89.8% last quarter) while the leased rate slightly declined suggests new tenants are successfully opening stores, which should translate to revenue growth in coming quarters.

Management's stated intention to market additional shopping centers for sale appears opportunistic rather than defensive, suggesting they see a valuation disconnect between public and private markets for quality retail assets. The redemption of the $175 million in preferred shares eliminates a 6.375% dividend obligation, improving the company's cost of capital and financial flexibility.

For investors, SITC now presents a more focused thesis on suburban retail with simplified operations, reduced dividend obligations, and potential for additional strategic asset sales to unlock value. The key question is whether management can effectively redeploy capital from any future asset sales to drive shareholder returns in a challenging retail environment.

BEACHWOOD, Ohio--(BUSINESS WIRE)-- SITE Centers Corp. (NYSE: SITC), an owner of open-air shopping centers located primarily in suburban, high household income communities, announced today operating results for the quarter ended December 31, 2024.

"SITE Centers furthered the Company’s goal of recognizing value for stakeholders in the fourth quarter by continuing the simplification of its capital structure through the redemption of the remaining $175 million of outstanding preferred shares. The Company’s commenced rate increased through new tenant store openings in an environment of strong leasing demand, and we intend to capitalize where we view strong private market interest in purchasing high quality assets by marketing a subset of shopping centers for sale,” commented David R. Lukes, President and Chief Executive Officer. “Going forward, SITE Centers intends to maximize value through continued leasing, asset management and potential additional asset sales.”

Results for the Fourth Quarter

• Fourth quarter net loss attributable to common shareholders was $13.2 million, or $0.25 per diluted share, as compared to net income of $193.6 million, or $3.69 per diluted share, in the year-ago period. The decrease year-over-year primarily was the result of the spin-off of Curbline Properties Corp. (“Curbline” or “Curbline Properties”) (NYSE: CURB), lower Net Operating Income (“NOI”) as a result of property dispositions, lower gain on sale from dispositions, lower interest income and the write-off of the remaining original issuance costs relating to the 6.375% Class A Cumulative Redeemable Preferred Shares that were redeemed during the quarter.
• Fourth quarter operating funds from operations attributable to common shareholders (“Operating FFO” or “OFFO”) was $8.3 million, or $0.16 per diluted share, compared to $54.0 million, or $1.03 per diluted share, in the year-ago period. The decrease year-over-year primarily was due to the spin-off of Curbline Properties, lower NOI as a result of property dispositions and lower interest income.

Significant Fourth Quarter Activity and Key Operating Results

• On November 20, 2024, redeemed all outstanding 6.375% Class A Cumulative Redeemable Preferred Shares and the associated depositary shares at par. In conjunction with the redemption, a charge of $6.2 million was recorded for the write off of the remaining original issuance costs.
• Reported a leased rate of 91.1% at December 31, 2024 as compared to 91.3% at September 30, 2024 and 92.2% at December 31, 2023, all on a pro rata basis. The September 30, 2024 and December 31, 2023 leased rates have been adjusted to reflect the removal of all properties included in the Curbline Properties spin-off and all properties sold during 2024.
• Reported a commenced rate of 90.6% at December 31, 2024 as compared to 89.8% at September 30, 2024 and 89.6% at December 31, 2023, all on a pro rata basis. The September 30, 2024 and December 31, 2023 commenced rates have been adjusted to reflect the removal of all properties included in the Curbline Properties spin-off and all properties sold during 2024.
• Generated cash renewal leasing spreads of 10.6%, on a pro rata basis, for the fourth quarter of 2024.

Discontinued Operations

On October 1, 2024, the Company completed the spin-off of 79 convenience properties and distributed $800.0 million of cash to Curbline Properties. The spin-off of the convenience properties represented a strategic shift in the Company’s business and, as such, the Curbline properties are reflected as discontinued operations for all periods presented.

About SITE Centers Corp.

SITE Centers is an owner and manager of open-air shopping centers located primarily in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC. Additional information about the Company is available at www.sitecenters.com. To be included in the Company’s e-mail distributions for press releases and other investor news, please click here.

Supplemental Information

Copies of the Company's quarterly financial supplement are available on the Investor Relations portion of the Company's website, ir.sitecenters.com.

Non-GAAP Measures and Other Operational Metrics

Funds from Operations (“FFO”) is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.

FFO is generally defined and calculated by the Company as net income(loss) (computed in accordance with generally accepted accounting principles in the United States (“GAAP”)), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains/losses. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains/losses to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.

The Company also uses NOI, a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.

FFO, Operating FFO and NOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures have been provided herein.

Safe Harbor

SITE Centers Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact, including statements regarding the Company's projected operational and financial performance, strategy, prospects and plans, may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, general economic conditions, including inflation and interest rate volatility; local conditions such as the supply of, and demand for, retail real estate space in our geographic markets; the consistency with future results of assumptions based on past performance; the impact of e-commerce; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant and the impact of any such event on rental income from other tenants and our properties; our ability to enter into agreements to sell properties on commercially reasonable terms and to satisfy closing conditions applicable to such sales; our ability to finance our businesses on commercially acceptable terms or at all; impairment charges; valuation and risks relating to our joint venture investments; the termination of any joint venture arrangements or arrangements to manage real property; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions or natural disasters in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions or natural disasters; any change in strategy; the impact of pandemics and other public health crises; unauthorized access, use, theft or destruction of financial, operations or third party data maintained in our information systems or by third parties on our behalf; our ability to maintain REIT status; and the finalization of the financial statements for the period ended December 31, 2024. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's most recent reports on Forms 10-K and 10-Q. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

SITE Centers Corp.
Income Statement: Consolidated Interests
	in thousands, except per share	4Q24		4Q23		12M24		12M23
	Revenues:
	Rental income (1)	$32,583		$97,435		$269,286		$444,062
	Other property revenues	282		251		1,801		1,736
		32,865		97,686		271,087		445,798
	Expenses:
	Operating and maintenance (2)	8,924		19,218		55,372		78,306
	Real estate taxes	4,543		13,444		40,292		65,501
		13,467		32,662		95,664		143,807
	Net operating income (3)	19,398		65,024		175,423		301,991
	Other income (expense):
	JV and other fee income (4)	2,035		1,510		6,380		6,817
	Interest expense	(5,833)		(19,657)		(59,463)		(80,482)
	Depreciation and amortization	(13,061)		(38,154)		(101,344)		(180,611)
	General and administrative (5)	(8,393)		(14,931)		(47,080)		(50,867)
	Other income (expense), net (6)	335		6,522		(16,761)		5,565
	Impairment charges	0		0		(66,600)		0
	(Loss) income before earnings from discontinued operations, JVs and other	(5,519)		314		(109,445)		2,413
	Equity in net income of JVs	(324)		82		82		6,577
	Gain on sale and change in control of interests	0		0		2,669		3,749
	Gain on disposition of real estate, net	50		187,796		633,219		218,655
	Tax expense	(29)		(1,234)		(761)		(2,045)
	(Loss) income from continuing operations	(5,822)		186,958		525,764		229,349
	Income from discontinued operations (7)	0		9,466		6,060		36,372
	Net (loss) income	(5,822)		196,424		531,824		265,721
	Non-controlling interests	0		0		0		(18)
	Net (loss) income SITE Centers	(5,822)		196,424		531,824		265,703
	Write off of preferred share original issuance costs	(6,155)		—		(6,155)		0
	Preferred dividends	(1,271)		(2,789)		(9,638)		(11,156)
	Net (loss) income Common Shareholders	($13,248)		$193,635		$516,031		$254,547
	Weighted average shares – Basic – EPS (8)	52,430		52,331		52,393		52,365
	Assumed conversion of diluted securities (7)	—		21		191		40
	Weighted average shares – Diluted – EPS (8)	52,430		52,352		52,584		52,405
	Basic earnings per share:
	From continuing operations	$(0.25)		$3.51		$9.69		$4.16
	From discontinued operations	0		0.18		0.12		0.69
	Total	$(0.25)		$3.69		$9.81		$4.85
	Diluted earnings per share:
	From continuing operations	$(0.25)		$3.52		$9.65		$4.16
	From discontinued operations	0		0.17		0.12		0.69
	Total	$(0.25)		$3.69		$9.77		$4.85
(1)	Rental income:
	Minimum rents	$20,826		$65,497		$176,496		$292,449
	Ground lease minimum rents	1,310		3,188		7,968		13,773
	Straight-line rent, net and amortization of (above)/below-market rent, net	786		1,202		4,446		13,208
	Percentage and overage rent	632		1,545		4,651		5,570
	Recoveries	8,401		24,408		70,360		113,214
	Uncollectible revenue	109		(278)		702		(1,010)
	Ancillary and other rental income	519		1,858		3,329		6,300
	Lease termination fees	0		15		1,334		558
(2)	Includes allocated general and administrative expense	1,193		2,779		8,046		10,833
(3)	Includes NOI from wholly-owned assets sold in 2024	43		N/A		88,815		N/A
(4)	Curbline Shared Services Agreement (“SSA”) fee	593		0		593		0
	Curbline SSA gross up	499		0		499		0
	Embedded Lease SSA (included in rental income)	(369)		0		(369)		0
(5)	Separation and other charges	361		1,032		1,709		5,046
(6)	Interest income (fees), net	1,775		4,553		31,620		4,348
	Transaction costs	(941)		(42)		(1,685)		(836)
	Curbline SSA gross up	(499)		0		(499)		0
	Debt extinguishment costs	0		(92)		(42,822)		(50)
	Gain on debt retirement and gain (loss) on equity derivative instruments	0		2,103		(3,375)		2,103
(7)	Curbline assets classified as a "discontinued operation" for financial reporting purposes on a retrospective basis
(8)	Prior periods presented have been adjusted to reflect the Company's one-for-four reverse stock split

SITE Centers Corp.
Reconciliation: Net Income to FFO and Operating FFO
and Other Financial Information
	in thousands, except per share
		4Q24		4Q23		12M24		12M23
	Net (loss) income attributable to Common Shareholders	($13,248)		$193,635		$516,031		$254,547
	Depreciation and amortization of real estate	12,467		36,754		97,186		175,156
	Equity in net income of JVs	324		(82)		(82)		(6,577)
	JVs' FFO	1,337		1,654		6,040		7,981
	Discontinued operations' FFO adjustments (1)	0		8,771		29,556		31,478
	Non-controlling interests	0		0		0		18
	Impairment of real estate	0		0		66,600		0
	Gain on sale and change in control of interests	0		0		(2,669)		(3,749)
	Gain on disposition of real estate, net	(50)		(187,796)		(633,219)		(218,655)
	FFO attributable to Common Shareholders	$830		$52,936		$79,443		$240,199
	Separation and other charges	361		1,308		1,709		5,752
	Discontinued operations' transaction and debt extinguishment costs	0		1,323		30,851		2,376
	Write-off of preferred share original issuance costs	6,155		0		6,155		0
	Transaction, debt extinguishment and other (at SITE's share)	941		515		44,154		1,648
	Derivative mark-to-market	0		(2,103)		4,412		(2,103)
	Total non-operating items, net	7,457		1,043		87,281		7,673
	Operating FFO attributable to Common Shareholders	$8,287		$53,979		$166,724		$247,872
	Weighted average shares & units – Basic: FFO & OFFO (2)	52,430		52,331		52,393		52,377
	Assumed conversion of dilutive securities (2)	0		21		191		40
	Weighted average shares & units – Diluted: FFO & OFFO (2)	52,430		52,352		52,584		52,417
	FFO per share – Basic (2)	$0.02		$1.01		$1.52		$4.59
	FFO per share – Diluted (2)	$0.02		$1.01		$1.51		$4.58
	Operating FFO per share – Basic (2)	$0.16		$1.03		$3.18		$4.73
	Operating FFO per share – Diluted (2)	$0.16		$1.03		$3.17		$4.73
	Common stock dividends declared, per share (2)	$0.00		$1.16		$1.04		$2.72
	Capital expenditures (SITE Centers share) (3):
	Redevelopment costs	39		3,148		4,849		14,462
	Maintenance capital expenditures	753		4,960		4,937		15,413
	Tenant allowances and landlord work	1,897		14,001		25,486		44,892
	Leasing commissions	389		1,477		3,634		6,092
	Construction administrative costs (capitalized)	320		776		2,973		3,171
	Certain non-cash items (SITE Centers share) (3):
	Straight-line rent	670		578		3,159		1,621
	Straight-line fixed CAM	22		98		178		329
	Amortization of below-market rent/(above), net	177		754		1,777		12,057
	Straight-line ground rent expense (income)	18		(25)		20		(155)
	Debt fair value and loan cost amortization	(908)		(1,261)		(5,398)		(4,741)
	Capitalized interest expense	25		322		571		1,238
	Stock compensation expense	(327)		(1,965)		(6,285)		(7,083)
	Non-real estate depreciation expense	(597)		(1,402)		(4,168)		(5,466)
(1)	Discontinued operations' FFO adjustments
	Depreciation and amortization of real estate investments	$0		$8,771		$29,556		$31,849
	Loss (gain) on disposition of real estate, net	0		0		0		(371)
		$0		$8,771		$29,556		$31,478
(2)	Prior periods presented have been adjusted to reflect the Company's one-for-four reverse stock split
(3)	Excludes amounts from discontinued operations for all periods

SITE Centers Corp.
Balance Sheet: Consolidated Interests
	$ in thousands
		At Period End
		4Q24		4Q23
	Assets:
	Land	$204,722		$614,328
	Buildings	964,845		2,688,953
	Fixtures and tenant improvements	254,152		479,196
		1,423,719		3,782,477
	Depreciation	(654,389)		(1,434,209)
		769,330		2,348,268
	Construction in progress and land	2,682		37,875
	Real estate, net	772,012		2,386,143
	Investments in and advances to JVs	30,431		39,372
	Cash	54,595		551,402
	Restricted cash	13,071		16,908
	Receivables and straight-line rents (1)	25,437		54,096
	Intangible assets, net (2)	28,759		86,363
	Amounts receivable from Curbline	1,771		0
	Other assets, net	7,526		5,434
	Assets related to discontinued operations	0		921,632
	Total Assets	933,602		4,061,350
	Liabilities and Equity:
	Revolving credit facilities	0		0
	Unsecured debt	0		1,303,243
	Unsecured term loan	0		198,856
	Secured debt	301,373		98,418
		301,373		1,600,517
	Dividends payable	0		63,806
	Amounts payable to Curbline	33,762		0
	Other liabilities (3)	81,723		162,490
	Liabilities related to discontinued operations	0		58,994
	Total Liabilities	416,858		1,885,807
	Preferred shares	0		175,000
	Common shares	5,247		5,359
	Paid-in capital	3,981,597		5,990,982
	Distributions in excess of net income	(3,473,458)		(3,934,736)
	Deferred compensation	8,041		5,167
	Accumulated other comprehensive income	5,472		6,121
	Common shares in treasury at cost	(10,155)		(72,350)
	Total Equity	516,744		2,175,543
	Total Liabilities and Equity	$933,602		$4,061,350
(1)	Straight-line rents (including fixed CAM), net	$8,653		$23,162
(2)	Operating lease right of use assets	15,818		17,373
(3)	Operating lease liabilities	35,532		37,108
	Below-market leases, net	9,306		24,853

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227530146/en/

For additional information:

Gerald Morgan, EVP and

Chief Financial Officer

216-755-5500

Source: SITE Centers Corp.

FAQ

What caused SITE Centers (SITC) net loss in Q4 2024?

The $13.2M net loss was primarily due to the Curbline Properties spin-off, lower NOI from property dispositions, reduced gain on sale, lower interest income, and preferred shares redemption costs.

How did SITC's Q4 2024 leasing metrics perform?

SITC reported a 91.1% leased rate and 90.6% commenced rate, with cash renewal leasing spreads of 10.6%.

What was the impact of the Curbline Properties spin-off on SITC?

The spin-off included 79 convenience properties and $800M cash distribution, representing a strategic shift that is now reported as discontinued operations.

How much preferred shares did SITC redeem in Q4 2024?

SITC redeemed $175M of outstanding 6.375% Class A Cumulative Redeemable Preferred Shares at par on November 20, 2024.