37
SITE CENTERS JUNE 2019
S I T E C E N T E R S N A R E I T 2 0 1 9 1
SITE CENTERS
JUNE 2019
S I T E C E N T E R S N A R E I T 2 0 1 9 2
SITE Centers considers portions of the information in this presentation 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 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, local conditions such as supply of space or a reduction in demand for real estate in
the area; competition from other available space; 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; redevelopment and construction activities
may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions
or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter
into definitive agreements with regard to our financing and joint venture arrangements and our ability to satisfy conditions to the completion of these
arrangements; 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 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; any change in strategy; and our ability to maintain REIT status. 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
Form 10-K for the year ended December 31, 2018. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect
events or circumstances that arise after the date hereof.
In addition, this presentation includes certain non-GAAP financial measures. Non-GAAP financial measures should not be considered replacements
for, and should be read together with, the most comparable GAAP measures. Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP measures can be found in the appendix and in the Company’s quarterly financial supplement located at
www.sitecenters.com/investors.
S A F E H A R B O R S TAT E M E N T
S I T E C E N T E R S N A R E I T 2 0 1 9 3
R E T U R N F O C U S E D
P R E M I E R O P E R A T I N G P L A T F O R M
C O M P E L L I N G R E D E V E L O P M E N T
P I P E L I N E
O P P O R T U N I S T I C I N V E S T I N G
B A L A N C E S H E E T S T R E N G T H
A V G O F F O / N A V G R O W T H
A V G S S N O I G R O W T H
5%
2.75%
S I T E C E N T E R S 5 -Y E A R B U S I N E S S P L A N
S I T E C E N T E R S N A R E I T 2 0 1 9 4
5 -Y E A R E S T I M AT E D N AV G R O W T H
R E D E V E L O P M E N T
O P P O R T U N I S T I C I N V E S T I N G
L E A S I N G
26%
10%
63%
S I T E C E N T E R S I S A L E A S I N G S T O R Y
G OA L : $7 5 M O F A N N UA L I N V ES T M E N T S
U P DAT E : AC Q U I S I T I O N O F 3 P R O P E R T I ES F O R $28 M I N 4 Q 1 8
R E P U R C H A S E D $ 5 0 M O F S TO C K AT $ 1 1 . 74 W E I G H T E D - AV E R AG E P R I C E
R E C E I V E D $1 M F E E R E L AT E D TO M A N AG E M E N T O F S H O P KO P O R T F O L I O
G OA L : $ 1 0 0 M O F A N N UA L S P E N D I N G
U P DAT E : T H E C O L L E C T I O N AT B R A N D O N B LV D ($25 M ) 4 Q 2 0 ES T. S TA B I L I Z AT I O N
1 0 0 0 VA N N ES S ($ 5 M ) 1 Q 2 0 ES T. S TA B I L I Z AT I O N
N A S S AU PA R K PAV I L I O N ($ 1 1 M ) 2 Q 2 0 ES T. S TA B I L I Z AT I O N
G OA L : L E A S E U P 6 0 A N C H O R O P P O R T U N I T I ES
U P DAT E : 3 0 O F 6 0 A N C H O R S L E A S E D AT + 3 0 % S P R E A D S
G OA L : 94 % S H O P L E A S E D R AT E
U P DAT E : 9 0 .1% L E A S E D A S O F 1 Q 19
1AT T R AC T
A N D A DA P T
2A D D
3O P P O R T U N I S T I C
I N V E S T I N G
S I T E C E N T E R S N A R E I T 2 0 1 9 5
2 0 1 9 O U T L O O K
O F F O
I N T E R E S T I N C O M E
S S N O I
I N C R E A S E D F R O M 1 . 0 0 - 2 . 0 0 % W I T H 1 Q 1 9 R E S U LT S
G & AJ V F E E S R V I F E E I N C O M E
$1.14-1.19
$14-17m
1.25-2.00%
$61m$21-25m $22-24m
Note: As of April 23, 2019
S I T E C E N T E R S N A R E I T 2 0 1 9 6
R E D E V E LO P M E N T
L E A S I N GA C Q U I S I T I O N S
1 2 3AT T R AC T
A N D A DA P T
A D D O P P O R T U N I S T I CI N V E S T I N G
S I T E C E N T E R S N A R E I T 2 0 1 9 7
H I G H E R Q U A L I T Y A N D F O C U S E D W H O L LY- O W N E D P O R T F O L I O
160 128 69
A V G H H I N C O M E , A B R P S F & G R E E N S T R E E T T A P S C O R E
I N C R E A S E O F
+20%
W H O L L Y - O W N E D P R O P E R T I E S A S O F
M A R . 3 , 2 0 1 7
A S O F D E C . 1 , 2 0 1 7
A S O F M A R . 3 1 , 2 0 1 9
S I T E C E N T E R S N A R E I T 2 0 1 9 8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$0K↓
$40K
$40K↓
$50K
$50K↓
$60K
$60K↓
$70K
$70K↓
$80K
$80K↓
$90K
$90K↓
$100K
$100K↓
$110K
$110K↓
$120K
$120K↓
$130K
$130K↓
$140K
$140K↓
$150K
$150K +
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0K↓
20K
20K↓
40K
40K↓
60K
60K↓
80K
80K↓
100K
100K↓
120K
120K↓
140K
140K↓
160K
160K↓
180K
180K↓
200K
200K↓
220K
220K↓
240K
240K↓
260K
260K↓
280K
280K↓
300K
300K +
A V G H H I N C O M E ( 3 - M I L E )
PE
RC
EN
TIL
E R
AN
K O
F O
PE
N-A
IR S
HO
PP
ING
CE
NT
ER
PR
OP
ER
TIE
S
PE
RC
EN
TIL
E R
AN
K O
F O
PE
N-A
IR S
HO
PP
ING
CE
NT
ER
PR
OP
ER
TIE
S 116kS I T C P O R T F O L I O
$101kS I T C P O R T F O L I O
P O P U L A T I O N ( 3 - M I L E )
78thP E R C E N T I L E
83rdP E R C E N T I L E
A S SE TS A R E CO N C EN T R AT ED IN A FFLU EN T CO M M U N IT IES W IT H B A R R IERS TO EN T RY A N D CO M PEL L IN G D EM O G R A PH I C S .
S I T E C EN T ERS PR O PERT IES A R E IN T H E TO P Q UA RT I L E W H EN CO M PA R ED TO A L L U . S . O PEN - A IR SH O PP IN G C EN T ERS .
T O P Q U A R T I L E D E M O G R A P H I C S
S I T E C E N T E R S N A R E I T 2 0 1 9 9
S I T E C E N T E R S ’ P O R T F O L I O I S C O N C E N T R AT E D I N M A J O R M S A s
5%
6%
9%
6%
6%
8%
3%
6%
6%
4%
4%
6%
BOSTON
NEW YORK
WASHINGTON, DC
CHARLOTTE
ATLANTA
ORLANDO
MIAMI
PHOENIX
LOS ANGELES
DENVER
CHICAGO
COLUMBUS
T O P 1 2 M A R K E T S A C C O U N T F O R 7 0 % O F P R O R ATA A B R
S I T E C E N T E R S N A R E I T 2 0 1 9 10
SHOPPERS WORLD(BOSTON)
AVG HHI $104K GSA TAP 38
COTSWOLD VILLAGE(CHARLOTTE)
AVG HHI $126K GSA TAP 95
UNIVERSITY HILLS(DENVER)
AVG HHI $103K GSA TAP 98
WINTER GARDEN VILLAGE(ORLANDO)
AVG HHI $103K GSA TAP 94
THE FOUNTAINS(MIAMI)
AVG HHI $80K GSA TAP 66
JOHNS CREEK TOWN CENTER(ATLANTA)
AVG HHI $145K GSA TAP 95
NASSAU PARK PAVILION(NEW YORK)
AVG HHI $160K GSA TAP 85
FAIRFAX TOWNE CENTER(WASHINGTON, DC)
AVG HHI $148K GSA TAP 99
SPRINGFIELD CENTER(WASHINGTON, DC)
AVG HHI $129K GSA TAP 96
THE SHOPS AT MIDTOWN MIAMI(MIAMI)
AVG HHI $63K GSA TAP 35
PROMENADE AT BRENTWOOD(ST. LOUIS)
AVG HHI $112K GSA TAP 99
MARKETPLACE AT HIGHLAND VILLAGE(DALLAS)
AVG HHI $139K GSA TAP 92
PERIMETER POINTE(ATLANTA)
AVG HHI $109K GSA TAP 92
3030 NORTH BROADWAY(CHICAGO)
AVG HHI $122K GSA TAP 99
EDGEWATER TOWNE CENTER(NEW YORK)
AVG HHI $94K GSA TAP 97
D O M I N A N T A S S E T S A C C O U N T F O R A L M O S T 5 0 % O F VA L U E
S I T E C E N T E R S N A R E I T 2 0 1 9 11
R E D E V E L O P M E N T 4%
F I T N E S S / E N T E R TA I N M E N T /D I S C O U N T A N C H O R 3 1%
M A J O R D I S C O U N T E R 23%
T R A D I T I O N A L G R O C E R 23%
GROCEREXPOSURE 40%
S P E C I A LT Y G R O C E R 1 7%
ASSETS WITH GROCERY EXPOSURE ACCOUNT FOR 41% OF THE CONSOLIDATED PORTFOLIO WITH AVERAGE REPORTED SALES OF $636/FT
INCLUDING MASS MERCHANTS WITH A GROCERY COMPONENT, ALMOST 70% OF THE CONSOLIDATED PORTFOLIO BY COUNT IS ANCHORED BY A FOOD COMPONENT
S I G N I F I C A N T E X P O S U R E T O B E S T - I N - C L A S S G R O C E R S
Note: Numbers may not add due to rounding
S I T E C E N T E R S N A R E I T 2 0 1 9 12
AN
NU
ALI
ZED
ABR
($M
)
2019 ANCHOR OPPORTUNITY OPENINGS
2Q191Q19 4Q193Q19
$0
$1.0
$2.0
$3.0
$4.0
$5.0
S T R O N G A N D D I V E R S E D E M A N D F O R A N C H O R O P P O R T U N I T I E S
3 0 O F 6 0 A N C H O R O P P O R T U N I T I E S E X E C U T E D W I T H 2 2 D I F F E R E N T R E TA I L B A N N E R S
A N C H O R O P E N I N G S E X P E C T E D TO A C C E L E R AT E I N 4 Q 19
S I T E C E N T E R S N A R E I T 2 0 1 9 13
RECENT BANKRUPTCIES HAVE HIGHLIGHTED THE QUALIT Y AND EMBEDDED MARK-TO-MARKET OF SITE CENTERS REAL ESTATE
BANKRUPTCIES ALSO PROVIDE AN OPPORTUNIT Y TO RECAPTURE CONTROL OF GL A AND PARKING FIELDS AT DOMINANT ASSETS
FIVE-YEAR FORECASTS ASSUME ANNUAL BANKRUPTCIES CONSISTENT WITH L AST THREE YEARS
S P R E A D
+27%S P R E A D
+48%S P R E A D
+44%( E X C L U D E S V A L U E C R E A T I O N F R O M
C O N T R O L A T S H O P P E R S W O R L D
A N D P E R I M E T E R P O I N T E )
COM PE LL IN G RE LE ASING ECO NO MIC S
S I T E C E N T E R S N A R E I T 2 0 1 9 14
S H O P L E A S I N G M O M E N T U M B U I L D I N G B E H I N D A N C H O R L E A S I N G
T T M S H O P L E A S I N G P E R F O R M A N C E• N E W D E A LS: 23 8 KSF AT +20 .4% SPR E A D• R EN E WA LS: 674 KSF AT + 8 . 3 % SPR E A D
M AT T R E S S F I R M O P P O R T U N I T Y• 8 W H O L LY- O W N E D LO C AT I O N S
( AV G 5 , 5 6 8 S F ) C LO S E D I N 4 Q 1 8• 2 E X E C U T E D L E A S E S A N D 3 D E A L S
I N P R O G R E S S
PAY L E S S O P P O R T U N I T Y• 7 W H O L LY- O W N E D LO C AT I O N S
( AV G 2 , 8 0 0 S F ) C LO S I N G I N 1 H 19• +9 % M A R K -TO - M A R K E T• 2 D E A L S I N P R O G R E S S 3Q14 3Q17 1Q19
TARGET94%
80%
85%
90%
95%
100%
A C C E L E R AT I N G S M A L L S H O P L E A S I N G A C T I V I T Y D R I V E N B Y S E R V I C E A N D Q S R T E N A N T S
S I T E C E N T E R S N A R E I T 2 0 1 9 15
NEGRONI BISTRO
BAR
MID
TOW
N
LOU
NG
E 55
MIDTOWN 2 326 UNITS
HYDE 457 UNITS
MIDTOWN 4 318 UNITS
MIDTOWN 5 400 UNITS
MIDTOWN 6497 UNITS
MIDTOWN 7391 UNITS
MIDTOWN 8387 UNITS
ZONED FOR RESIDENTIAL
HIGH-RISE
THE SHOPS AT MIDTOWN MIAMI
MIAMI, FL
3.1%
RE-MERCHANDISING OPPORTUNITY OF LIFESTYLE CENTER WITH MARK-TO-MARKET OPPORTUNITIES IN A
RAPIDLY DENSIFYING MIAMI SUBMARKET
EST. 5-YEAR NOI CAGR
238K3-MILE POPULATION
1,501UNITS ONLINE
SINCE 2018
+80%ESTIMATED MTM
BACKFILL OF FORMER FURNITURE SPACE
+17%RELEASE SPREAD
TARGETED RESTAURANT REMERCHANDISING
EFFORT
1,225UNITS COMING
ONLINE BY 4Q20
THE SHO PS AT M IDTOWN MIAMI
S I T E C E N T E R S N A R E I T 2 0 1 9 16
CE NTE NNIAL PROM E NADE
CENTENNIAL PROMENADE
CENTENNIAL, CO
6.0%
OPPORTUNITY TO SIGNIFICANTLY INCREASE PROPERTY CASH FLOW
VIA ANCHOR LEASE-UP AND MARK-TO-MARKET OF
SMALL-SHOPS
EST. 5-YEAR NOI CAGR
$125K3-MILE HH INCOME
44%MARK-TO-MARKET
OPPORTUNITY
11%
+16%NOI INCREASE
RELOCATE TOTAL WINE& MORE TO TOYS
”R”US BOX AT +41% MTM
EST. RETURNON STRATEGIC
ACQUISITION OFAN UNOWNED
ANCHOR
S I T E C E N T E R S N A R E I T 2 0 1 9 17
THE SHO PS AT THE FRESH MARKE T
THE SHOPS AT THE FRESH MARKET
CORNELIUS, NC
+50%
GROCER-ANCHORED CENTER WITH SIGNIFICANT MARK-TO-MARKET
ON IN-PLACE RENTS
EST. NOI INCREASE
$109K3-MILE HH INCOME
100%EST. MARK-TO-MARKET
ON ANCHOR BOXES
43%EST. MARK-TO-MARKET
ON SHOPS
S I T E C E N T E R S N A R E I T 2 0 1 9 18
R E D E V E LO P M E N TL E A S I N G A C Q U I S I T I O N S
1 2 3AT T R AC T
A N D A DA P T A D D O P P O R T U N I S T I CI N V E S T I N G
S I T E C E N T E R S N A R E I T 2 0 1 9 19
C O M P E L L I N G L A N D U S E E C O N O M I C S
$0 $0
$0
$30$10 $0
O N LY 2 5 % O F L A N D I S G E N E R A T I N G R E N T A N D T H E R E F O R E . . .
B U I L D I N G S F S I T E S F
A B R A B R
$12 $4
S I T E C E N T E R S N A R E I T 2 0 1 9 20
S H O P P I N G C E N T E R S A R E I N E F F I C I E N T U S E R S O F L A N D
I N D U S T R I A L$ 6 $ 5
S U B U R B A N O F F I C E$ 1 5 $ 9
M U L T I - F A M I LY$ 1 8 $ 1 4
B U I L D I N G S F S I T E S F
A B R A B R
$12 $4
S I T E C E N T E R S N A R E I T 2 0 1 9 21
S T E A DY P I P E L I N E O F R E D E V E L O P M E N T P R O J E C T S
WEST BAY PLAZA ($36M)REDEVELOPMENT OF KMART AND MARC’S BOXES
KEY TENANTS: FRESH THYME, HOMESENSE, ULTA
1000 VAN NESS ($5M)REDEVELOPMENT OF AMC SPACE
KEY TENANT: CGV CINEMAS
THE COLLECTION AT BRANDON BLVD ($25M)REDEVELOPMENT OF KMART BOX
KEY TENANTS: LUCKY’S MARKET, BEALLS OUTLET
NASSAU PARK PAVILION ($11M)REDEVELOPMENT OF KOHL’S BOX
KEY TENANTS: T.J.MAXX, HOMESENSE, BURLINGTON
$ 8 4 M O F R E D E V E L O P M E N T U N D E R WAY AT P R O J E C T E D 8 % Y I E L D
S I T E C E N T E R S N A R E I T 2 0 1 9 22
TA C T I C A L R E D E V E L O P M E N T O P P O R T U N I T I E S
PROPERTY MSA SPEND ($M) EST. DELIVERY
Belgate Shopping Center Charlotte $3.1 2019
Guilford Commons Har t ford $2.3 2019
Johns Creek Town Center Atlanta $2.4 2019
Lee Vista Promenade Orlando $1.9 2019
Chapel Hil ls Denver $1.1 2020
Hamilton Marketplace Trenton $2.8 2020
Tanasbourne Town Center Por tland $3.9 2020
Freehold Marketplace New York $8.8 2021
Nassau Park Pavil ion Trenton $5.2 2021
Woodfield Vil lage Green Chicago $2.8 2021
$ 3 4 M P I P E L I N E O F O U T PA R C E L A N D E X PA N S I O N O P P O R T U N I T I E S AT P R O J E C T E D 1 0 % Y I E L D
S I T E C E N T E R S N A R E I T 2 0 1 9 23
F U T U R E D E N S I F I C AT I O N O P P O R T U N I T I E S P R OV I D E O P T I O N A L I T Y
SHOPPERS WORLD(BOSTON)
AVG HHI $104K GSA TAP 38
DUVALL VILLAGE(WASHINGTON, DC)
AVG HHI $121K GSA TAP 78
FAIRFAX TOWNE CENTER(WASHINGTON, DC)
AVG HHI $148K GSA TAP 99
FREEHOLD MARKETPLACE(NEW YORK)
AVG HHI $107K GSA TAP 64
PERIMETER POINTE(ATLANTA)
AVG HHI $109K GSA TAP 92
S I T E C E N T E R S N A R E I T 2 0 1 9 24
R E D E V E LO P M E N TL E A S I N G
A C Q U I S I T I O N S
1 2 3AT T R AC T
A N D A DA P TA D D O P P O R T U N I S T I C
I N V E S T I N G
S I T E C E N T E R S N A R E I T 2 0 1 9 25
OpportunisticInvesting
M A R K E T D I S L I K E S• Tier II Markets• Large Assets• Power Centers• Short Duration • At Risk Tenancies
M A R K E T L I K E S• Coastal• Grocery Centers• Small Assets• Lease Term • Credit Quality
High Cap Rate
Low Cap Rate
S I T E C E N T E R S N A R E I T 2 0 1 9 26
EncumbrancesM A R K - T O - M A R K E T
ScarcityS U P P LY
FootfallD E M A N D
K E Y ACQ U IS I T I O N AT T R I B U T E S
TA R G E T E D A C Q U I S I T I O N S A R E F I LT E R E D F O R FA C T O R S T H AT D R I V E G R O W T H A N D C R E AT E VA L U E
S I T E C E N T E R S N A R E I T 2 0 1 9 27
S U B S TA N T I A L VA L U E C R E AT I O N AT 4 Q 1 8 A C Q U I S I T I O N P R O P E R T I E S
SIGNED LOIsSPECULATIVE EXECUTED LEASES IN-PLACE COMMENCED RATE
$2.6
$2.8
$3.0
$3.2
$3.4
$3.6
$3.8
$4.0
$4.2
AN
NU
ALI
ZED
ABR
($M
)
2Q191Q194Q18 4Q193Q19 4Q203Q202Q201Q20
LEASING ACTIVITY EXPECTED TO INCREASE BASE RENT BY 27%AT 4Q18 ACQUISITION PROPERTIES WITHIN 2 YEARS
INCREASE+27%
65%
70%
75%
80%
85%
90%
95%
S I T E C E N T E R S N A R E I T 2 0 1 9 28
S H O P K O M A N A G E M E N T A G R E E M E N T H I G H L I G H T S O P P O R T U N I S T I C F O C U S
ENTERED INTO A MANAGEMENT AGREEMENT WITH COLUMN FINANCIAL, INC ., AN AFFILIATE OF CREDIT SUISSE, TO PROVIDE ADVISORY AND OPERATIONAL SERVICES REL ATED TO A PORTFOLIO OF 83 PROPERTIES ANCHORED BY SHOPKO.
THE COMPANY ’S MANAGEMENT OF THE ASSETS GENERATED $1.0M IN FEES.
SITE CENTERS WILL CONTINUE TO SEEK INVOLVEMENT IN SITUATIONS WHICH ARE CONTRARIAN, COMPLEX OR INVOLVE DISTRESS TO SOURCE MISPRICED ASSETS AND CREATE VALUE FOR SHAREHOLDERS.
L E V E R A G E D E X I S T I N G R E L AT I O N S H I P A N D O P E R AT I N G P L AT F O R M
S I T E C E N T E R S N A R E I T 2 0 1 9 29
Balance Sheet
S I T E C E N T E R S N A R E I T 2 0 1 9 30
S I G N I F I C A N T B A L A N C E S H E E T P R O G R E S S
COMMITMENT TO INVESTMENT-GRADE CREDIT RATING
Larger and higher quality unencumbered pool with no Puerto Rico exposure
Minimal consolidated secured debt with just two wholly-owned assets encumbered
BALANCE SHEET POSITIONED FOR GROWTH
Debt / Adjusted EBITDA now 5.5X compared to 6.5X in 1Q18
Minimal near-term refinancing and interest rate risk with just $82M of consolidated debt maturing through 2021
$930M of availability under the company’s $1.0B Line of Credit as of 1Q19
0
$100
$200
$300
$400
$500
20272025 202620242023202220212019 2020
Consolidated Maturities ($M)
LEVERAGE / PUBLIC BOND COVENANTS 1Q18 1Q19
Pro-Rata Net Debt / Adjusted EBITDA 6.5X 5.5X
Total Debt to RE Assets 45% 36%
Secured Debt to Assets Ratio 17% 2%
Unencumbered Assets to Unsecured Debt 213% 249%
Fixed Charge Coverage (Ex. Prepayment Penalties) 3.0X 3.2X
Note: As of 1Q19
S I T E C E N T E R S N A R E I T 2 0 1 9 31
M I N I M A L N E A R -T E R M R E F I N A N C I N G R I S K
Source: Company details, as of 1Q19Source: Company details, as of 1Q19
2019 2020 2021
AKR
RPAI
FRT
KIM
REG
WRI
BRX
ROIC
SITC
UE
0% 10% 20% 30%
RPAI
AKR
BRX
WRI
ROIC
SITC
UE
KIM
REG
FRT
0 2 4 6 8 10 12
% DEBT MATUR ING 2019 - 2021WA
INTERESTRATE
WEIGHTED AVERAGE DEBT MATUR ITY
5.0%
3.6%
3.3%
4.1%
4.0%
4.4%
6.2%
4.7%
4.7%
3.5%
W E I G H T E D AV E R A G E M AT U R I T Y N O W A B O V E P E E R G R O U P AV E R A G E W I T H N O M AT E R I A L C O N S O L I D AT E D M AT U R I T I E S U N T I L 2 0 2 2
S I T E C E N T E R S N A R E I T 2 0 1 9 32
Appendix
S I T E C E N T E R S N A R E I T 2 0 1 9 33
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 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 including reserve adjustments of preferred equity interests, (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 (loss) 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 NAREIT definition. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains 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. In calculating the expected range for or amount of net (loss) income attributable to common shareholders to estimate projected FFO and Operating FFO for future periods, the Company does not include a projection of gain and losses from the disposition of real estate property, potential impairments and reserves of real estate property and related investments, debt extinguishment costs, hurricane-related activity, certain transaction costs or certain fee income. Other real estate companies may calculate expected FFO and Operating FFO in a different manner.
The Company also uses net operating income (“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. The Company presents NOI information herein on a same store basis or “SSNOI.” The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income (including reimbursements) and expenses, lease termination income in excess of lost rent, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI also excludes activity associated with development and major redevelopment and includes assets owned in comparable periods (15 months for quarter comparisons). SSNOI excludes all non-property and corporate level revenue. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above.
The Company believes that FFO, OFFO and SSNOI are not, and are not intended to be, presentations in accordance with GAAP. FFO, Operating FFO and SSNOI information have their limitations as they exclude any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. FFO, Operating FFO and SSNOI do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO, Operating FFO and SSNOI as indicators of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. FFO, Operating FFO and SSNOI do not represent cash generated from operating activities in accordance with GAAP, and are not necessarily indicative of cash available to fund cash needs. FFO, Operating FFO and SSNOI should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of 2019 projected FFO and Operating FFO to the most directly comparable GAAP measure of net income (loss) has been provided herein. Reconciliations of 2019 projected SSNOI and five-year growth targets for SSNOI and Operating FFO to the most directly comparable GAAP financial measure are not provided because the Company is unable to provide such reconciliation without unreasonable effort.
NON - GA AP F INAN CIAL ME ASURES - DE F IN IT IONS
S I T E C E N T E R S N A R E I T 2 0 1 9 34
The Company believes that FFO, OFFO and SSNOI are not, and are not intended to be, presentations in accordance with GAAP. FFO, Operating FFO and SSNOI information have their limitations as they exclude any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. FFO, Operating FFO and SSNOI do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO, Operating FFO and SSNOI as indicators of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. FFO, Operating FFO and SSNOI do not represent cash generated from operating activities in accordance with GAAP, and are not necessarily indicative of cash available to fund cash needs. FFO, Operating FFO and SSNOI should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of 2019 projected FFO and Operating FFO to the most directly comparable GAAP measure of net income (loss) has been provided herein. Reconciliations of 2019 projected SSNOI and five-year growth targets for SSNOI and Operating FFO to the most directly comparable GAAP financial measure are not provided because the Company is unable to provide such reconciliations without unreasonable effort.
The Company uses the ratio Debt to Adjusted EBITDA (“Debt/Adjusted EBITDA”) as it believes it provides a meaningful metric as it relates to the Company’s ability to meet various leverage tests for the corresponding periods. The components of Debt/Adjusted EBITDA include net effective debt divided by adjusted EBITDA (annualized), as opposed to net income determined in accordance with GAAP. Adjusted EBITDA is calculated as net income attributable to SITE before interest, income taxes, depreciation and amortization and further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. Net effective debt is calculated as the Company’s consolidated debt outstanding excluding unamortized loan costs and fair market value adjustments, less cash and restricted cash as of the balance sheet date presented or projected. Such amounts are calculated at the Company’s proportionate share of ownership.
Adjusted EBITDA should not be considered as an alternative to earnings as an indicator of the Company’s financial performance, or an alternative to cash flow from operating activities as a measure of liquidity. The Company’s calculation of Adjusted EBITDA may differ from the methodology utilized by other companies. Investors are cautioned that items excluded from Adjusted EBITDA are significant components in understanding and assessing the Company’s financial condition. Reconciliations of Adjusted EBITDA and net effective debt used in the Debt/Adjusted EBITDA ratio to their most directly comparable GAAP measures of net income (loss) and debt is provided herein.
NON - GA AP F INAN CIAL ME ASURES - DE F IN IT IONS (CONT. )
S I T E C E N T E R S N A R E I T 2 0 1 9 35
RECONCIL IAT ION OF NE T INCO ME AT TR IBUTAB LE TO COMMONSHARE HOLDE RS TO FFO AND O PE R ATING FFO EST IMATE
Per Share - Diluted 2019E
Net income attributable to common shareholders $0.25 - $0.30 Depreciation and amortization of real estate 0.83 - 0.85 Equity in net (income) of JVs (0.02)JVs' FFO 0.14 - 0.16Gain on disposition of real estate (first quarter actual) (0.09)Impairment of real estate/reserve of preferred equity interests (first quarter actual) 0.01FFO (NAREIT) and Operating FFO $1.14 - $1.19
Note: In calculating the expected range for or amount of net (loss) income attributable to common shareholders to estimate projected FFO and Operating FFO for the year ending December 31, 2019, the Company does not include a projection of gain and losses from the disposition of real estate property, potential impairments and reserves of real estate property and related investments, debt extinguishment costs, hurricane-related activity, certain transaction costs or certain fee income.
S I T E C E N T E R S N A R E I T 2 0 1 9 36
RECONCIL IAT ION OF DE BT / ADJUSTE D E B ITDA
1Q19 1Q18
ConsolidatedNet income (loss) to SITE $35,790 ($54,153)Interest expense 21,726 44,040
Income tax expense 272 (18)
Depreciation and amortization 42,608 74,424
Adjustments for non-controlling interests (216) (167)
EBITDA – current quarter 100,180 64,126
Impairments 620 30,444
Equity in net income of JVs (1,043) (8,786)
Reserve of preferred equity interests 1,099 3,961
Gain on disposition of real estate, net (16,377) (10,011)
Other expense, net 921 61,607
Hurricane property loss 0 4,533
Business interruption income 0 (2,000)
JV OFFO (at SITE Share) 7,988 7,625
Adjusted EBITDA – current quarter 93,388 151,499Adjusted EBITDA – annualized 373,552 605,996
Consolidated debt 1,824,164 3,741,520
Partner share of consolidated debt (9,566) (9,723)
Loan costs, net 9,880 46,095
Face value adjustments (1,299) (2,292)
Cash and restricted cash (11,140) (65,132)
Net effective debt $1,812,039 $3,710,468
Debt/Adjusted EBITDA – Consolidated (1) 4.9x 6.1x
(1) Excludes perpetual preferred stock. $ in thousands
S I T E C E N T E R S N A R E I T 2 0 1 9 37
RECONCIL IAT ION OF DE BT / ADJUSTE D E B ITDA (CONT. )
1Q19 1Q18
Pro rata including JVsAdjusted EBITDA – current quarter 98,047 155,288
Adjusted EBITDA – annualized 392,188 621,152
Consolidated net debt 1,812,039 3,710,468
JV debt (at SITE Share) 360,828 335,293
Cash and restricted cash (13,051) (13,477)
Net effective debt $2,159,816 $4,032,284
Debt/Adjusted EBITDA – Pro Rata (1) 5.5x 6.5x
(1) Excludes perpetual preferred stock. $ in thousands
