UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On October 24, 2024, CTO Realty Growth, Inc., a Maryland corporation (the "Company"), issued an earnings press release, an investor presentation, and a supplemental disclosure package relating to the Company’s financial results for the quarter ended September 30, 2024. Copies of the press release, investor presentation, and supplemental disclosure package are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.
The information in Item 2.02 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 7.01. Regulation FD Disclosure
On October 24, 2024, the Company issued an earnings press release, an investor presentation, and a supplemental disclosure package relating to the Company’s financial results for the quarter ended September 30, 2024. Copies of the earnings press release, investor presentation, and supplemental disclosure package are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the materials include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.
The information in Item 7.01 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 24, 2024
CTO Realty Growth, Inc.
By: /s/ Philip R. Mays
Senior Vice President, Chief Financial Officer,
and Treasurer (Principal Financial Officer)
Press Release
FOR IMMEDIATE RELEASE | CTO Realty Growth Reports Third Quarter 2024 Operating Results |
WINTER PARK, FL – October 24, 2024 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended September 30, 2024.
Third Quarter Highlights
“We are pleased to report another strong quarter with significant accomplishments across all aspects of our business,” stated John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “We experienced significant growth as our GLA increased over 20% from our $137 million portfolio acquisition of high-quality retail centers in our target growth markets, and we originated a $44 million first mortgage development loan with an initial yield of 11%. Importantly, we primarily funded our investment activity with disciplined use of our ATM. Finally, we closed a $100 million 5-year term loan with proceeds used to pay down our credit facility, and ended the quarter with $213 million of available liquidity and decreased leverage.”
Page 1
Quarterly Financial Results Highlights
The table below provides a summary of the Company’s operating results for the three months ended September 30, 2024:
| | Three Months Ended | | | | | |||||
(in thousands, except per share data) |
| September 30, 2024 | | September 30, 2023 | | Variance to Comparable Period in the Prior Year | |||||
Net Income Attributable to the Company | | $ | 6,227 | | $ | 2,686 | | $ | 3,541 | | 131.8% |
Net Income Attributable to Common Stockholders | | $ | 4,349 | | $ | 1,491 | | $ | 2,858 | | 191.7% |
Net Income Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.17 | | $ | 0.07 | | $ | 0.10 | | 142.9% |
| | | | | | | | | | | |
Core FFO Attributable to Common Stockholders (2) | | $ | 12,633 | | $ | 10,462 | | $ | 2,171 | | 20.8% |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 0.50 | | $ | 0.47 | | $ | 0.03 | | 6.4% |
| | | | | | | | | | | |
AFFO Attributable to Common Stockholders (2) | | $ | 13,142 | | $ | 10,766 | | $ | 2,376 | | 22.1% |
AFFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 0.51 | | $ | 0.48 | | $ | 0.03 | | 6.3% |
| | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 0.40 | | $ | 0.40 | | $ | — | | 0.0% |
Dividends Declared and Paid - Common Stock | | $ | 0.38 | | $ | 0.38 | | $ | — | | 0.0% |
| | | | | | | | | | | |
(2) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
Page 2
Year-to-Date Financial Results Highlights
The table below provides a summary of the Company’s operating results for the nine months ended September 30, 2024:
| | Nine Months Ended | | | | | |||||
(in thousands, except per share data) |
| September 30, 2024 | | September 30, 2023 | | Variance to Comparable Period in the Prior Year | |||||
Net Income (Loss) Attributable to the Company | | $ | 13,252 | | $ | (1,507) | | $ | 14,759 | | 979.4% |
Net Income (Loss) Attributable to Common Stockholders | | $ | 8,316 | | $ | (5,092) | | $ | 13,408 | | 263.3% |
Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.35 | | $ | (0.23) | | $ | 0.58 | | 252.2% |
| | | | | | | | | | | |
Core FFO Attributable to Common Stockholders (2) | | $ | 33,723 | | $ | 28,937 | | $ | 4,786 | | 16.5% |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 1.43 | | $ | 1.28 | | $ | 0.15 | | 11.7% |
| | | | | | | | | | | |
AFFO Attributable to Common Stockholders (2) | | $ | 35,840 | | $ | 31,410 | | $ | 4,430 | | 14.1% |
AFFO Attributable to Common Stockholders per Common Share - Diluted (2) | | $ | 1.52 | | $ | 1.39 | | $ | 0.13 | | 9.4% |
| | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 1.20 | | $ | 1.20 | | $ | — | | 0.0% |
Dividends Declared and Paid - Common Stock | | $ | 1.14 | | $ | 1.14 | | $ | — | | 0.0% |
(1) | The denominator for this measure excludes the impact of 3.6 million and 3.3 million shares for the nine months ended September 30, 2024 and 2023, respectively, related to the Company’s adoption of ASU 2020-06, effective January 1, 2022, which requires presentation on an if-converted basis for the Company’s 2025 Convertible Senior Notes, as the impact would be anti-dilutive. |
(2) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income (Loss) Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
Investments
During the three months ended September 30, 2024, the Company invested $191.3 million, at a weighted average yield of 9.5% inclusive of:
| ◾ | Three open-air shopping centers for a purchase price of $137.5 million consisting of Carolina Pavilion in Charlotte, North Carolina; Millenia Crossing in Orlando, Florida; and Lake Brandon Village in Tampa, Florida. |
| ◾ | Origination of a $43.8 million first mortgage loan with an initial term of two years and an initial fixed interest rate of 11.0%. The loan is secured by over 100 acres entitled for an over 2 million square foot mixed-use development located in Herndon, Virginia near Dulles International Airport and adjacent to a Metrorail Silver Line station. |
| ◾ | Completion of a $10.0 million preferred equity investment in a subsidiary of a publicly-traded hospitality, entertainment and real estate company with a dividend rate of 14.0%. The investment is not redeemable prior to July 11, 2029, except upon the occurrence of certain specified events. |
Page 3
During the nine months ended September 30, 2024, the Company invested $273.8 million into five retail properties totaling 1.2 million square feet and one vacant land parcel, originated two first mortgage structured investments for $53.8 million, and invested $10.0 million in a preferred equity investment in a subsidiary of a publicly-traded hospitality, entertainment and real estate company. These investments represent a weighted average going-in cash yield of 9.1%.
Dispositions
During the three months ended September 30, 2024, the Company completed the sale of Jordan Landing, located in West Jordan, Utah for $18.0 million.
During the nine months ended September 30, 2024, the Company sold two retail properties for $38.0 million at a weighted average exit cash cap rate of 8.7%, generating an aggregate gain of $3.8 million.
Portfolio Summary
The Company’s income property portfolio consisted of the following as of September 30, 2024:
| | | | | | Wtd. Avg. Remaining |
Asset Type | | # of Properties | | Square Feet | | Lease Term |
Single Tenant | | 6 | | 252 | | 5.5 years |
Multi-Tenant | | 16 | | 4,360 | | 5.0 years |
Total / Wtd. Avg. | | 22 | | 4,612 | | 4.9 years |
Square Feet in thousands. | | | | | | |
Property Type | | # of Properties | | Square Feet | | % of Cash Base Rent |
Retail | | 17 | | 3,184 | | 66.5% |
Office | | 1 | | 210 | | 4.1% |
Mixed-Use | | 4 | | 1,218 | | 29.5% |
Total | | 22 | | 4,612 | | 100.1% |
Square Feet in thousands. | | | | | | |
Leased Occupancy | | 95.8% |
Occupancy | | 90.0% |
Same Property Net Operating Income
During the three months ended September 30, 2024, the Company’s Same-Property NOI totaled $16.8 million, an increase of 6.3% over the comparable prior year period, as presented in the following table:
| | Three Months Ended | | | | | |||||
|
| September 30, 2024 | | September 30, 2023 | | Variance to Comparable Period in the Prior Year | |||||
Single Tenant | | $ | 1,339 | | $ | 1,365 | | $ | (26) | | (1.9)% |
Multi-Tenant | | | 15,457 | | | 14,439 | | | 1,018 | | 7.1% |
Total | | $ | 16,796 | | $ | 15,804 | | $ | 992 | | 6.3% |
$ in thousands.
Page 4
During the nine months ended September 30, 2024, the Company’s Same-Property NOI totaled $44.6 million, an increase of 5.1% over the comparable prior year period, as presented in the following table:
| | Nine Months Ended | | | | | |||||
|
| September 30, 2024 | | September 30, 2023 | | Variance to Comparable Period in the Prior Year | |||||
Single Tenant | | $ | 3,778 | | $ | 3,505 | | $ | 273 | | 7.8% |
Multi-Tenant | | | 40,834 | | | 38,923 | | | 1,911 | | 4.9% |
Total | | $ | 44,612 | | $ | 42,428 | | $ | 2,184 | | 5.1% |
$ in thousands.
Leasing Activity
During the quarter ended September 30, 2024, the Company signed 20 leases totaling 201,806 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 16 leases totaling 147,648 square feet at an average cash base rent of $21.86 per square foot compared to a previous average cash base rent of $19.52 per square foot, representing 12.0% comparable growth.
A summary of the Company’s overall leasing activity for the quarter ended September 30, 2024, is as follows:
| | | | Wtd. Avg. | | Cash Rent per | | Tenant | | Leasing | |||
| | Square Feet | | Lease Term | | Square Foot | | Improvements | | Commissions | |||
New Leases | | 80 | | 9.2 years | | $ | 25.96 | | $ | 1,657 | | $ | 1,273 |
Renewals & Extensions | | 122 | | 3.6 years | | | 18.04 | | | 53 | | | 36 |
Total / Wtd. Avg. | | 202 | | 6.3 years | | $ | 21.17 | | $ | 1,710 | | $ | 1,309 |
In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings.
During the nine months ended September 30, 2024, the Company signed 54 leases totaling 384,513 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 42 leases totaling 300,225 square feet at an average cash base rent of $23.48 per square foot compared to a previous average cash base rent of $18.63 per square foot, representing 26.0% comparable growth.
A summary of the Company’s overall leasing activity for the nine months ended September 30, 2024, is as follows:
| | | | Wtd. Avg. | | Cash Rent per | | Tenant | | Leasing | |||
| | Square Feet | | Lease Term | | Square Foot | | Improvements | | Commissions | |||
New Leases | | 181 | | 10.2 years | | $ | 27.26 | | $ | 7,364 | | $ | 2,921 |
Renewals & Extensions | | 204 | | 3.7 years | | | 20.62 | | | 78 | | | 133 |
Total / Wtd. Avg. | | 385 | | 7.2 years | | $ | 23.74 | | $ | 7,442 | | $ | 3,054 |
In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings.
Page 5
Capital Markets and Balance Sheet
During the quarter ended September 30, 2024, the Company completed the following notable capital markets activities:
| ◾ | Issued 6,851,375 common shares under its common stock ATM offering program at a weighted average gross price of $18.63 per share, for total net proceeds of $125.7 million. |
| ◾ | Issued 15,844 common shares under its Series A Preferred Stock ATM offering program at a weighted average gross price of $23.22 per share, for total net proceeds of $0.4 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%. |
| ◾ | As of September 30, 2024, the Company has $205 million of undrawn commitments, prior to borrowing base limitations, on our Revolving Credit Facility, and $8.2 million of cash on hand. |
The following table provides a summary of the Company’s long-term debt, as of September 30, 2024:
Component of Long-Term Debt | | | Principal |
| Maturity Date | |
| | Interest Rate |
| | Wtd. Avg. Rate as of September 30, 2024 |
2025 Convertible Senior Notes | | $ | 51.0 million | | April 2025 | | | | 3.875% | | | 3.88% |
2026 Term Loan (1) | | | 65.0 million | | March 2026 | | | | SOFR + 10 bps + | | | 2.72% |
Mortgage Note (2) | | | 17.8 million | | August 2026 | | | | 4.060% | | | 4.06% |
Revolving Credit Facility (3) | | | 95.0 million | | January 2027 | | | | SOFR + 10 bps + | | | 5.82% |
2027 Term Loan (4) | | | 100.0 million | | January 2027 | | | | SOFR + 10 bps + | | | 2.80% |
2028 Term Loan (5) | | | 100.0 million | | January 2028 | | | | SOFR + 10 bps + | | | 5.18% |
2029 Term Loan (6) | | | 100.0 million | | September 2029 | | | | SOFR + 0.10% + | | | 4.68% |
Total Long-Term Debt | | $ | 528.8 million | | | | | | | | | 4.28% |
(1) | The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. |
(2) | Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. |
(3) | Prior to September 30, 2024, the Company utilized interest rate swaps on $150.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.47% plus the 10 bps SOFR adjustment plus the applicable spread. Effective September 30, 2024, the Company assigned $100.0 million of interest rate swaps to the 2029 Term Loan. Accordingly, as of September 30, 2024, the Company had interest rate swaps of $50.0 million of interest rate swaps on the Credit Facility to fix SOFR and achieve a fixed swap rate of 3.85% plus the 10 bps SOFR adjustment plus the applicable spread. |
(4) | The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap rate of 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. |
(5) | The Company utilized interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjustment plus the applicable spread. |
(6) | The Company utilized interest rate swaps on the $100.0 million 2029 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.28% plus the 10 bps SOFR adjustment plus the applicable spread. |
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As of September 30, 2024, the Company’s net debt to Pro Forma Adjusted EBITDA was 6.4 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.7 times. As of September 30, 2024, the Company’s net debt to total enterprise value was 43.1%. The Company calculates total enterprise value as the sum of net debt, par value of its 6.375% Series A preferred equity, and the market value of the Company's outstanding common shares.
Dividends
On August 20, 2024, the Company announced a cash dividend on its common stock and Series A Preferred Stock for the third quarter of 2024 of $0.38 per share and $0.40 per share, respectively, payable on September 30, 2024 to stockholders of record as of the close of business on September 12, 2024. The third quarter 2024 common stock cash dividend represents a payout ratio of 76.0% and 74.5% of the Company’s third quarter 2024 Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted, respectively.
2024 Outlook
The Company has increased its Core FFO and AFFO outlook for 2024 and has revised certain assumptions to take into account the Company’s year-to-date performance and revised expectations regarding the Company’s acquisition activities. The Company’s outlook for 2024 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions.
The Company’s increased outlook for 2024 is as follows:
| | | Revised Outlook Range for 2024 | | | Change from Prior Outlook | ||||||
(Unaudited) | | Low | | High | | Low | | High | ||||
Core FFO per Diluted Share | | $ | 1.83 | to | $ | 1.87 | | $ | 0.02 | to | $ | 0.01 |
AFFO per Diluted Share | | $ | 1.96 | to | $ | 2.00 | | $ | 0.01 | to | $ | - |
The Company’s 2024 guidance includes but is not limited to the following assumptions:
| ◾ | Same-Property NOI growth of 4% to 6%, including the known impact of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy, and/or tenant lease defaults, and before any impact from potential 2024 income property acquisitions and/or dispositions. |
| ◾ | General and administrative expenses within a range of $16.0 million to $16.5 million. |
| ◾ | Weighted average diluted shares outstanding of 25.3 million shares. |
| ◾ | Year-end 2024 leased occupancy projected to be within a range of 96% to 97% before any impact from potential 2024 income property acquisitions and/or dispositions. |
| ◾ | Investment, including structured investments, between $300 million and $350 million at a weighted average initial cash yield between 8.50% and 9.00%. |
| ◾ | Disposition of assets between $35 million and $50 million at a weighted average exit cash yield between 8.50% and 8.75% |
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The following table provides a reconciliation of the revised outlook range of the Company’s 2024 estimated Net Income Attributable to the Company per Diluted Share to estimated Core FFO and AFFO per Diluted Share:
| | Revised Outlook Range for 2024 | ||||
(Unaudited) | | Low | | High | ||
Net Income Attributable to the Company, per Common Share - Diluted | | $ | 0.55 | | $ | 0.59 |
Depreciation and Amortization of Real Estate | | | 1.94 | | | 1.94 |
Gain on Disposition of Assets, Net of Tax (1) | | | (0.33) | | | (0.33) |
Gain on Disposition of Other Assets (1) | | | (0.02) | | | (0.02) |
Provision for Impairment (1) | | | 0.03 | | | 0.03 |
Realized and Unrealized Gain on Investment Securities (1) | | | (0.11) | | | (0.11) |
Funds from Operations, per Common Share - Diluted | | $ | 2.06 | | $ | 2.10 |
Distributions to Preferred Stockholders | | | (0.27) | | | (0.27) |
Funds From Operations Attributable to Common Stockholders, per Common Share - Diluted | | $ | 1.79 | | $ | 1.83 |
Amortization of Intangibles to Lease Income | | | 0.04 | | | 0.04 |
Core Funds From Operations Attributable to Common Stockholders | | $ | 1.83 | | $ | 1.87 |
Adjustments: | | | | | | |
Straight-Line Rent Adjustment | | | (0.07) | | | (0.07) |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 0.05 | | | 0.05 |
Non-Cash Compensation | | | 0.15 | | | 0.15 |
Adjusted Funds From Operations Attributable to Common Stockholders, per Common Share - Diluted | | $ | 1.96 | | $ | 2.00 |
(1) | Represents the actual adjustment for the nine months ended September 30, 2024. The Company’s revised outlook excludes projections related to these measures. |
Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter ended September 30, 2024, on Friday, October 25, 2024, at 9:00 AM ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.ctoreit.com or at the link provided in the event details below. To access the call by phone, please go to the registration link provided in the event details below and you will be provided with dial-in details.
Event Details:
Webcast:https://edge.media-server.com/mmc/p/d5bi9eap
Registration:https://register.vevent.com/register/BI41ec61215d574a4e9274d2d335e1a5a6
We encourage participants to register and dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.ctoreit.com.
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About CTO Realty Growth, Inc.
CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.
We encourage you to review our most recent investor presentation and supplemental financial information, which is available on our website at www.ctoreit.com.
Contact:Investor Relations
ir@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.
Although forward-looking statements are made based upon management’s present expectations and 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.
Non-GAAP Financial Measures
Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma Adjusted EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”),
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each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT.
NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
To derive Pro Forma Adjusted EBITDA, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. Cash interest expense is also excluded from Pro Forma Adjusted EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities.
To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct
Page 10
cost of revenues, management fee income, and interest income from commercial loans and investments are also excluded from Same-Property NOI. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loans and investments in accordance with GAAP is also used in lieu of the interest income equivalent.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma Adjusted EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. We use Same-Property NOI to compare the operating performance of our assets between periods. It is an accepted and important measurement used by management, investors and analysts because it includes all property-level revenues from the Company’s properties, less operating and maintenance expenses, real estate taxes and other property-specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods. Same-Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company’s properties. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI may not be comparable to similarly titled measures employed by other companies.
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CTO Realty Growth, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| | As of | ||||
|
| (Unaudited) September 30, 2024 |
| December 31, 2023 | ||
ASSETS | | | | | | |
Real Estate: | | | | | | |
Land, at Cost | | $ | 253,742 | | $ | 222,232 |
Building and Improvements, at Cost | | | 691,055 | | | 559,389 |
Other Furnishings and Equipment, at Cost | | | 874 | | | 857 |
Construction in Process, at Cost | | | 4,838 | | | 3,997 |
Total Real Estate, at Cost | | | 950,509 | | | 786,475 |
Less, Accumulated Depreciation | | | (70,545) | | | (52,012) |
Real Estate—Net | | | 879,964 | | | 734,463 |
Land and Development Costs | | | 300 | | | 731 |
Intangible Lease Assets—Net | | | 107,658 | | | 97,109 |
Investment in Alpine Income Property Trust, Inc. | | | 42,997 | | | 39,445 |
Mitigation Credits | | | — | | | 1,044 |
Commercial Loans and Investments | | | 103,014 | | | 61,849 |
Cash and Cash Equivalents | | | 8,172 | | | 10,214 |
Restricted Cash | | | 1,696 | | | 7,605 |
Refundable Income Taxes | | | 18 | | | 246 |
Deferred Income Taxes—Net | | | 2,019 | | | 2,009 |
Other Assets | | | 30,286 | | | 34,953 |
Total Assets | | $ | 1,176,124 | | $ | 989,668 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Liabilities: | | | | | | |
Accounts Payable | | $ | 2,075 | | $ | 2,758 |
Accrued and Other Liabilities | | | 26,401 | | | 18,373 |
Deferred Revenue | | | 6,171 | | | 5,200 |
Intangible Lease Liabilities—Net | | | 18,857 | | | 10,441 |
Long-Term Debt | | | 526,838 | | | 495,370 |
Total Liabilities | | | 580,342 | | | 532,142 |
Commitments and Contingencies | | | | | | |
Stockholders’ Equity: | | | | | | |
Preferred Stock – 100,000,000 shares authorized; $0.01 par value, 6.375% Series A Cumulative Redeemable Preferred Stock, $25.00 Per Share Liquidation Preference, 4,713,069 shares issued and outstanding at September 30, 2024 and 2,978,808 shares issued and outstanding at December 31, 2023 | | | 47 | | | 30 |
Common Stock – 500,000,000 shares authorized; $0.01 par value, 29,971,538 shares issued and outstanding at September 30, 2024 and 22,643,034 shares issued and outstanding at December 31, 2023 | | | 300 | | | 226 |
Additional Paid-In Capital | | | 334,467 | | | 168,435 |
Retained Earnings | | | 261,373 | | | 281,944 |
Accumulated Other Comprehensive Income | | | (405) | | | 6,891 |
Total Stockholders’ Equity | | | 595,782 | | | 457,526 |
Total Liabilities and Stockholders’ Equity | | $ | 1,176,124 | | $ | 989,668 |
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CTO Realty Growth, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share, per share and dividend data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | | September 30, | | September 30, | ||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Revenues | | | | | | | | | | | | |
Income Properties | | $ | 28,528 | | $ | 25,183 | | $ | 79,029 | | $ | 70,373 |
Management Fee Income | | | 1,124 | | | 1,094 | | | 3,360 | | | 3,294 |
Interest Income From Commercial Loans and Investments | | | 1,615 | | | 1,114 | | | 4,407 | | | 2,965 |
Real Estate Operations | | | 538 | | | 1,079 | | | 1,981 | | | 2,602 |
Total Revenues | | | 31,805 | | | 28,470 | | | 88,777 | | | 79,234 |
Direct Cost of Revenues | | | | | | | | | | | | |
Income Properties | | | (7,797) | | | (7,060) | | | (22,630) | | | (20,883) |
Real Estate Operations | | | (359) | | | (152) | | | (1,437) | | | (876) |
Total Direct Cost of Revenues | | | (8,156) | | | (7,212) | | | (24,067) | | | (21,759) |
General and Administrative Expenses | | | (4,075) | | | (3,439) | | | (11,750) | | | (10,493) |
Provision for Impairment | | | (538) | | | (929) | | | (653) | | | (1,408) |
Depreciation and Amortization | | | (13,221) | | | (11,669) | | | (35,701) | | | (32,814) |
Total Operating Expenses | | | (25,990) | | | (23,249) | | | (72,171) | | | (66,474) |
Gain (Loss) on Disposition of Assets | | | (855) | | | 2,464 | | | 8,308 | | | 3,565 |
Other Gain (Loss) | | | (855) | | | 2,464 | | | 8,308 | | | 3,565 |
Total Operating Income | | | 4,960 | | | 7,685 | | | 24,914 | | | 16,325 |
Investment and Other Income (Loss) | | | 7,031 | | | 1,184 | | | 5,201 | | | (1,296) |
Interest Expense | | | (5,632) | | | (6,318) | | | (16,765) | | | (16,161) |
Income (Loss) Before Income Tax Benefit (Expense) | | | 6,359 | | | 2,551 | | | 13,350 | | | (1,132) |
Income Tax Benefit (Expense) | | | (132) | | | 135 | | | (98) | | | (375) |
Net Income (Loss) Attributable to the Company | | | 6,227 | | | 2,686 | | | 13,252 | | | (1,507) |
Distributions to Preferred Stockholders | | | (1,878) | | | (1,195) | | | (4,936) | | | (3,585) |
Net Income (Loss) Attributable to Common Stockholders | | $ | 4,349 | | $ | 1,491 | | $ | 8,316 | | $ | (5,092) |
| | | | | | | | | | | | |
Per Share Information: | | | | | | | | | | | | |
Basic and Diluted Net Income (Loss) Attributable to Common Stockholders | | $ | 0.17 | | | 0.07 | | | 0.35 | | | (0.23) |
| | | | | | | | | | | | |
Weighted Average Number of Common Shares | | | | | | | | | | | | |
Basic | | | 25,445,411 | | | 22,484,561 | | | 23,601,389 | | | 22,556,642 |
Diluted | | | 25,521,749 | | | 22,484,561 | | | 23,625,369 | | | 22,556,642 |
| | | | | | | | | | | | |
Dividends Declared and Paid - Preferred Stock | | $ | 0.40 | | $ | 0.40 | | $ | 1.20 | | $ | 1.20 |
Dividends Declared and Paid - Common Stock | | $ | 0.38 | | $ | 0.38 | | $ | 1.14 | | $ | 1.14 |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Same-Property NOI Reconciliation
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | ||||
Net Income (Loss) Attributable to the Company | | $ | 6,227 | | $ | 2,686 | | $ | 13,252 | | $ | (1,507) |
Loss (Gain) on Disposition of Assets, Net of Tax | | | 855 | | | (2,464) | | | (8,308) | | | (3,565) |
Provision for Impairment | | | 538 | | | 929 | | | 653 | | | 1,408 |
Depreciation and Amortization | | | 13,221 | | | 11,669 | | | 35,701 | | | 32,814 |
Amortization of Intangibles to Lease Income | | | (112) | | | (487) | | | (830) | | | (1,793) |
Straight-Line Rent Adjustment | | | 473 | | | 790 | | | 1,512 | | | 919 |
COVID-19 Rent Repayments | | | — | | | (3) | | | — | | | (46) |
Accretion of Tenant Contribution | | | 13 | | | 38 | | | 39 | | | 114 |
Interest Expense | | | 5,632 | | | 6,318 | | | 16,765 | | | 16,161 |
General and Administrative Expenses | | | 4,075 | | | 3,439 | | | 11,750 | | | 10,493 |
Investment and Other Income (Loss) | | | (7,031) | | | (1,184) | | | (5,201) | | | 1,296 |
Income Tax Benefit (Expense) | | | 132 | | | (135) | | | 98 | | | 375 |
Real Estate Operations Revenues | | | (538) | | | (1,079) | | | (1,981) | | | (2,602) |
Real Estate Operations Direct Cost of Revenues | | | 359 | | | 152 | | | 1,437 | | | 876 |
Management Fee Income | | | (1,124) | | | (1,094) | | | (3,360) | | | (3,294) |
Interest Income From Commercial Loans and Investments | | | (1,615) | | | (1,114) | | | (4,407) | | | (2,965) |
Other Non-Recurring Items (1) | | | (699) | | | — | | | (1,252) | | | — |
Less: Impact of Properties Not Owned for the Full Reporting Period | | | (3,568) | | | (2,657) | | | (11,214) | | | (6,256) |
Same-Property NOI | | $ | 16,838 | | $ | 15,804 | | $ | 44,654 | | $ | 42,428 |
| (1) | Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations
Attributable to Common Stockholders
(Unaudited)
(In thousands, except per share data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | ||||
Net Income (Loss) Attributable to the Company | | $ | 6,227 | | $ | 2,686 | | $ | 13,252 | | $ | (1,507) |
Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) | | | — | | | — | | | — | | | — |
Net Income (Loss) Attributable to the Company, If-Converted | | $ | 6,227 | | $ | 2,686 | | $ | 13,252 | | $ | (1,507) |
Depreciation and Amortization of Real Estate | | | 13,204 | | | 11,651 | | | 35,650 | | | 32,769 |
Loss (Gain) on Disposition of Assets, Net of Tax | | | 855 | | | (2,741) | | | (8,308) | | | (3,565) |
Gain on Disposition of Other Assets | | | (181) | | | (926) | | | (550) | | | (1,739) |
Provision for Impairment | | | 538 | | | 929 | | | 653 | | | 1,408 |
Realized and Unrealized Loss (Gain) on Investment Securities | | | (6,244) | | | (429) | | | (2,868) | | | 5,663 |
Extinguishment of Contingent Obligation | | | — | | | — | | | — | | | (2,300) |
Funds from Operations | | $ | 14,399 | | $ | 11,170 | | $ | 37,829 | | $ | 30,729 |
Distributions to Preferred Stockholders | | | (1,878) | | | (1,195) | | | (4,936) | | | (3,585) |
Funds From Operations Attributable to Common Stockholders | | $ | 12,521 | | $ | 9,975 | | $ | 32,893 | | $ | 27,144 |
Amortization of Intangibles to Lease Income | | | 112 | | | 487 | | | 830 | | | 1,793 |
Less: Effect of Dilutive Interest Related to 2025 Notes (1) | | | — | | | — | | | — | | | — |
Core Funds From Operations Attributable to Common Stockholders | | $ | 12,633 | | $ | 10,462 | | $ | 33,723 | | $ | 28,937 |
Adjustments: | | | | | | | | | | | | |
Straight-Line Rent Adjustment | | | (473) | | | (790) | | | (1,512) | | | (919) |
COVID-19 Rent Repayments | | | — | | | 3 | | | — | | | 46 |
Other Depreciation and Amortization | | | (3) | | | 24 | | | (10) | | | (92) |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 235 | | | 199 | | | 752 | | | 636 |
Non-Cash Compensation | | | 750 | | | 868 | | | 2,887 | | | 2,802 |
Adjusted Funds From Operations Attributable to Common Stockholders | | $ | 13,142 | | $ | 10,766 | | $ | 35,840 | | $ | 31,410 |
| | | | | | | | | | | | |
FFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.49 | | $ | 0.44 | | $ | 1.39 | | $ | 1.20 |
Core FFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.50 | | $ | 0.47 | | $ | 1.43 | | $ | 1.28 |
AFFO Attributable to Common Stockholders per Common Share - Diluted (1) | | $ | 0.51 | | $ | 0.48 | | $ | 1.52 | | $ | 1.39 |
| (1) | For the three and nine months ended September 30, 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
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CTO Realty Growth, Inc.
Non-GAAP Financial Measures
Reconciliation of Net Debt to Pro Forma Adjusted EBITDA
(Unaudited)
(In thousands)
| | Three Months Ended | | |
| | September 30, 2024 | | |
Net Income Attributable to the Company | | $ | 6,227 | |
Depreciation and Amortization of Real Estate | | | 13,204 | |
Loss on Disposition of Assets, Net of Tax | | | 855 | |
Gain on Disposition of Other Assets | | | (181) | |
Provision for Impairment | | | 538 | |
Unrealized Gain on Investment Securities | | | (6,244) | |
Distributions to Preferred Stockholders | | | (1,878) | |
Amortization of Intangibles to Lease Income | | | 112 | |
Straight-Line Rent Adjustment | | | (473) | |
Other Depreciation and Amortization | | | (3) | |
Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest | | | 235 | |
Non-Cash Compensation | | | 750 | |
Other Non-Recurring Items (1) | | | (699) | |
Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt | | | 5,396 | |
Adjusted EBITDA | | $ | 17,839 | |
| | | | |
Annualized Adjusted EBITDA | | $ | 71,356 | |
Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net (2) | | | 9,901 | |
Pro Forma Adjusted EBITDA | | $ | 81,257 | |
| | | | |
Total Long-Term Debt | | $ | 526,838 | |
Financing Costs, Net of Accumulated Amortization | | | 1,911 | |
Unamortized Convertible Debt Discount | | | 85 | |
Cash and Cash Equivalents | | | (8,172) | |
Net Debt | | $ | 520,662 | |
| | | | |
Net Debt to Pro Forma Adjusted EBITDA | | | 6.4 | x |
(1) | Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
(2) | Reflects the pro forma annualized impact on Annualized Adjusted EBITDA of the Company’s investments and disposition activity during the three months ended September 30, 2024. |
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| October 2024 Third Quarter 2024 Investor Presentation The Collection at Forsyth | Cumming, GA |
| 2 © CTO Realty Growth, Inc. | ctoreit.com Company Highlights 1. Reflects Jordan Landing disposition on August 15, 2024 and three property portfolio acquisition on August 20, 2024, as described in more detail on page 7. 2. Metrics are as of September 30, 2024, and reflect a $19.02 per share common stock price for CTO as of September 30, 2024 and a $18.20 per share common stock price for PINE as of September 30, 2024. 3. Investment and disposition activity includes both properties and structured investments from Q1 2019 – Q3 2024. 8.6% Implied Cap Rate2 $570M $529M $1. 2B Equity Market Cap2 Outstanding Debt2 Enterprise Value2 (Net of Cash) Series A Preferred2 $118M 8.0% Annualized Dividend Yield2 $43.0M Investment in Alpine Income Property Trust2 $1.83 – $1.87 2024 Core FFO Per Share Guidance Range 2024 Core FFO Multiple at guidance midpoint2 10.3x 4 . 6 M 67% Square Feet1 of Portfolio ABR from Georgia, Texas and Florida1 West Broad Village Glen Allen, VA Total investment activity in past 5-years3 $1.4 billion Total disposition activity in past 5-years3 $0.7 billion Small-cap shopping center REIT focused on open-air centers in fast growing MSAs in the Southeast and Southwest |
| 3 © CTO Realty Growth, Inc. | ctoreit.com Manage and Retain Ownership in Alpine REIT (NYSE:PINE) Third Quarter 2024 Highlights Q3 2024 Portfolio Square Feet 4.6M Portfolio has increased 24% since the beginning of the year Leased to Occupied Spread 580 bps Signed-not-opened pipeline of $6.5M, over 7% of in-place cash ABR Comparable Lease Spreads 12% Signed 148,000 SF of comparable leases at a 12% spread Same-Property NOI Growth 6% Leasing momentum continues to drive NOI growth Investment Activity $191M Included a $138M portfolio acquisition of high-quality shopping centers Total Enterprise Value (TEV) $1.2B TEV has increased 28% since the beginning of the year Liquidity $213M Over $200M of liquidity to support continued growth Portfolio SF Total Enterprise Value $1.2B 22% CAGR 23% CAGR All values are as of for the three months ended September 30, 2024, unless otherwise noted. 1. In , PINE completed it’s IPO with a portfolio contributed from CTO It is also the year CTO changed its investment strategy to focus on multi-tenant, retail-focused properties largely located in CTO’s newly defined target markets 1 1 |
| 4 © CTO Realty Growth, Inc. | ctoreit.com Attractive Valuation and Compelling Dividend Yield CTO has higher dividend yield and lower multiple relative to many in its retail-focused peer group while also demonstrating high growth Ashford Lane Atlanta, GA 2024E FFO Multiple1,2 18.3x 16.9x 16.2x 16.2x 14.4x 13.4x 13.1x 12.9x 11.3x 10.3x 3.2% 3.8% 3.2% 3.2% 4.1% 3.7% 3.9% 3.9% 5.0% 8.0% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% $- 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x 18.0x 19.0x 20.0x AKR FRT IVT UE KIM WSR BRX KRG AAT CTO Annualized Dividend Yield1,2 1. CTO’s E Core FFO multiple and dividend yield are based on per share common stock price as of September , 2. All dividend yields and 2024E FFO multiples are based on the closing stock price on September 30, 2024, using current annualized dividends and 2024E FFO per share estimates for the peer companies from the KeyBanc Leaderboard report dated October 4, 2024. 2024E FFO per share for CTO reflects the midpoint of Core FFO guidance provided on October 24, 2024. |
| 5 © CTO Realty Growth, Inc. | ctoreit.com Investment Highlights West Broad Village Glen Allen, VA The Shops at Legacy North Plano, TX Legacy North Plano, TX The Collection at Forsyth Cumming, GA Ashford Lane Atlanta, GA Madison Yards Atlanta, GA The Collection at Forsyth Cumming, GA 3 4 2 Active Asset Management ▪ Scalable platform and team that aggressively targets lease-up of existing vacancy and/or repositioning upside, resulting in potential robust value creation opportunities Flexible Balance Sheet with Staggered Maturities ▪ Well-laddered debt maturities, adequate liquidity and demonstrated ability to access multiple capital sources to provide financial stability and flexibility Experienced Leadership Team ▪ Seasoned leadership team with deep real estate relationships and experience 1 Southeast and Southwest Shopping Center Portfolio ▪ High quality, large format, retail portfolio in business-friendly markets with supportive demographics and outsized long-term growth potential ▪ Recent portfolio acquisition expands geographic presence into Charlotte and Tampa along with increasing size of Orlando portfolio Lake Brandon Village Tampa, FL |
| 6 © CTO Realty Growth, Inc. | ctoreit.com Focused on high-quality open-air shopping centers primarily located in the Southeast and Southwest. Multi-Tenant, Retail Asset Strategy ▪ Focused on retail-based, large format, multi-tenanted assets that have a grocery, lifestyle or community-oriented retail component and located in higher growth MSAs within the continental United States ▪ Acquisition targets are in higher growth markets and exhibit strong, current in-place yields and basis at discounts to replacement costs with future potential for increased returns through a combination of vacancy lease-up, redevelopment or rolling in-place leases to higher market rental rates Monetization of Legacy Assets ▪ CTO has a select number of legacy assets, that when monetized, are likely to unlock meaningful equity to be redeployed into core strategy assets that may drive higher cash flow and Core FFO Alpine Income Property Trust and Management Fee Income ▪ CTO seeded and externally manages Alpine Income Property Trust (NYSE: PINE), a pure-play net lease REIT, which is a meaningful and attractive source of management fee income and dividend income through CTO’s direct investment in PINE REIT shares and OP units Targeting Retail-Based, Large Format Value-Add Income Property Acquisitions Monetize Legacy and Non-Core Assets to Drive Growth Manage and Retain Ownership in Alpine REIT (NYSE:PINE) Focused Execution Differentiated Investment Strategy |
| 7 © CTO Realty Growth, Inc. | ctoreit.com Transaction Highlights Basis is well below replacement cost at $154 per SF Expands portfolio footprint into Charlotte and Tampa, strengthens Orlando presence and increases grocery anchored properties Near-term value add opportunities include ability to add strong tenancy, bringing rents up to market, and increasing occupancy Purchase Price $137.5 million Carolina Pavilion Millenia Crossing Lake Brandon Village Recent Portfolio Acquisition Closed August 20, 2024 Asset Location Anchors Year Built SF Q3 2024 Leased % Carolina Pavilion Charlotte, NC AMC, Floor & Décor, Nordstrom Rack, Ross, Burlington (shadow anchored by Target) 1995 685,714 94% Millenia Crossing Orlando, FL Nordstrom Rack 2009- 2011 100,385 96% Lake Brandon Village Brandon, FL (Tampa) Sprouts, PetSmart, DSW, Scandinavian Designs Furniture (shadow anchored by Lowe's) 1998 102,022 100% Total / Wtd. 888,121 95% |
| 8 © CTO Realty Growth, Inc. | ctoreit.com Building a Leading Retail-Focused Portfolio All values are as of year-end for their respective years, unless otherwise noted. 1. In , PINE completed it’s IPO with a portfolio contributed from CTO It is also the year CTO changed its investment strategy to focus on multi-tenant, retail-focused properties largely located in CTO’s newly defined target markets 2. Includes properties that are shadow anchored by a grocer. 20191 Q3 2024 Number of Properties 34 22 Total Portfolio Square Feet 1.8M 4.6M Occupancy 95% 90% Annualized Base Rent $27.6M $91.4M % of ABR from Multi-Tenant 28% Multi-Tenant 94% Multi-Tenant % of ABR from Retail & Mixed-Use 60% Retail & Mixed-Use 96% Retail & Mixed-Use % of ABR from Grocery-Anchored Properties2 4% Grocery 20% Grocery Value of PINE Shares & Units $32.4M $43.0M as of September 30, 2024 Ashford Lane Atlanta, GA Madison Yards | Atlanta, GA Beaver Creek Crossings | Apex, NC |
| 9 © CTO Realty Growth, Inc. | ctoreit.com Q2 2024 Q3 2024 State Properties SF (in 000s) $ ABR (in 000s) % State Properties SF (in 000s) $ ABR (in 000s) % Georgia 4 1,098 $28,815 36% Georgia 4 1,098 $29,099 32% Texas 3 885 14,615 18% Florida 10 798 17,877 20% Florida 8 596 13,980 17% Texas 3 885 14,560 16% Virginia 1 392 8,887 11% North Carolina 2 1,008 12,630 14% North Carolina 1 322 4,814 6% Virginia 1 392 9,016 10% Arizona 1 222 4,572 6% Arizona 1 222 4,572 5% New Mexico 1 210 3,646 4% New Mexico 1 210 3,646 4% Utah 1 171 1,733 2% - - - - - Total 20 3,895 $81,061 100% Total 22 4,612 $91,400 100% High-Quality Demographics Percentages listed based on GAAP Annualized Base Rent for the Company’s portfolio as of September , Any differences a result of rounding. 1. As of September 30, 2024. Source: Esri; Portfolio average weighted by the Annualized Base Rent of each property. % of Annualized Rent By State 200,000 Portfolio Average 5-Mile Population1 $136,000 Portfolio Average 5-Mile Household Income1 88% Percentage of Portfolio ABR from ULI’s Top 30 arkets1 CTO Property > 21% 10% - 20% < 6% |
| 10 © CTO Realty Growth, Inc. | ctoreit.com Durable Portfolio with Meaningful Growth Opportunities Repositioning Upside Essential Retail Stable Cash Flow Strong performing, larger format open-air shopping centers with a combination of value-add lease up, redevelopment and stable, in-place cash flows in some of the strongest markets in the United States. Ashford Lane | Atlanta, GA The Collection at Forsyth | Cumming, GA The Shops at Legacy North | Plano, TX West Broad Village | Glen Allen, VA The Exchange at Gwinnett | Buford, GA Madison Yards | Atlanta, GA Crossroads Towne Center | Chandler, AZ Beaver Creek Crossings | Apex, NC The Strand at St. Johns Town Center | Jacksonville, FL |
| 11 © CTO Realty Growth, Inc. | ctoreit.com Active Asset Management Recent transaction and leasing activity results in the Company’s properties now being all located in the Southeast and Southwest and an increased signed not open pipeline Executing on Asset Recycling ▪ Expecting full year 2024 investments of $300 million to $350 million and dispositions of $35 million to $50 million ▪ Year to date, completed structured investments totaling $63.8 million in first mortgages and preferred equity interests with an initial yield of 11.5% ▪ In August 2024, purchased a portfolio consisting of three open-air shopping centers located in Charlotte, Orlando and Tampa markets with 0.9 million of leasable square feet for an aggregate purchase price of $137.5 million ▪ In August 2024, sold Jordan Landing located in West Jordan, Utah for $18.0 million ▪ In March 2024, purchased Marketplace at Seminole Towne Center located in the Orlando market with 0.3 million leasable square feet for $68.7 million ▪ In March 2024, sold 0.1 million square foot mixed-use property in Santa Fe, NM for $20.0 million ▪ In February 2024, sold the remaining non-income producing mineral rights & interests totaling approximately 352,000 acres in 19 counties in the State of Florida for gross proceeds of $5.0 million Leasing Momentum ▪ Year to date, executed new and renewal leases totaling 0.4 million square feet bringing the Company’s leased occupancy to 95.8% compared to 94.6% as of June 30, 2024 ▪ Signed not opened pipeline is now $6.5 million, or 7.2%, of annual in-place cash base rent as of September 30, 2024 Ashford Lane Culinary Dropout |
| 12 © CTO Realty Growth, Inc. | ctoreit.com Strong Leasing Execution 1. Recently signed renewals and leases include leases signed in Q ‘ thru Q ‘ 2. Excludes newly leased units that were acquired as vacant. 3. As of September 30, 2024 Lease Rollover Schedule3 % of ABR Expiring 1% 7% 12% 12% 21% 9% 8% 8% 22% Recently Signed Leases1 ▪ YTD Q3 2024 Comparable Leasing Spreads2 26.0% o 79% new lease spreads (excluding acquired vacancy) o 5% options & renewal spreads ▪ Q3 2024 - Occupancy 90.0% & Leased Occupancy 95.8% o 580 bps of future occupancy pickup based on current spread between Occupancy and Leased Occupancy |
| 13 © CTO Realty Growth, Inc. | ctoreit.com PINE Company Profile 1. Based on PINE’s per share common stock price as of September , CTO seeded and externally manages Alpine Income Property Trust (NYSE: PINE), a pure play net lease REIT, which is a meaningful and attractive source of management fee income and dividend income Dividend Yield1 6.2% Implied Cap Rate 8% Number of Properties 133 Number of States with a Property 34 Total Portfolio Square Feet 3.6M Annualized Base Rent $41.5M % of ABR from Investment Grade Rated Tenants 52% % of ABR from Credit Rated Tenants 83% Diversified Geographic Footprint High-Quality Top Tenancy ≈ 15 3% CTO’s Ownership Interest in Alpine Income Property Trust $43.0 Million CTO’s Investment in Alpine Income Property Trust1 % of Annualized Base Rent By State as of September 30, 2024 (2.36 million shares and units at $18.20 share price) >8% 4% - 7% < 2% |
| 14 © CTO Realty Growth, Inc. | ctoreit.com Component of Long-Term Debt Type Maturity Principal Interest Rate 2025 Convertible Senior Notes Fixed Apr-2025 $51 million 3.88% 2026 Term Loan2 Fixed Mar-2026 $65 million SOFR + 10 bps + [1.25% - 2.20%] Mortgage Note Fixed Aug-2026 $18 million 4.06% Revolving Credit Facility Floating Jan-2027 $45 million SOFR + 10 bps + [1.25% - 2.20%] Revolving Credit Facility3 Fixed Jan-2027 $50 million SOFR + 10 bps + [1.25% - 2.20%] 2027 Term Loan4 Fixed Jan-2027 $100 million SOFR + 10 bps + [1.25% - 2.20%] 2028 Term Loan5 Fixed Jan-2028 $100 million SOFR + 10 bps + [1.20% - 2.15%] 2029 Term Loan6 Fixed Sep-2029 $100 million SOFR + 10 bps + [1.20% - 2.15%] Total Debt $529 million 4.28% Balance Sheet – Q3 2024 Exchange at Gwinnett Buford, GA Yonder Yoga $51 $83 $100 $100 $195 2024 2025 2026 2027 2028 2029 2030 Unsecured Secured Revolving Credit Facility Reflects million outstanding under the Company’s million senior unsecured revolving credit facility; the Company’s senior unsecured revolving credit facility matures in January and includes a one-year extension option to January 2028, subject to satisfaction of certain conditions; the maturity date reflected assumes the Company exercises the one-year extension option. 2. The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. 3. The Company utilized interest rate swaps on $50.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.85% plus the 10 bps SOFR adjustment plus the applicable spread. 4. The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap rate of 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. 5. The Company utilized interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjustment plus the applicable spread. 6. The Company utilized interest rate swaps on the $100.0 million 2029 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.28% plus the 10 bps SOFR adjustment plus the applicable spread. Debt Maturities ▪ Adequate liquidity for opportunistic growth ▪ Well-staggered debt maturity schedule ▪ Forward hedges out to 2033 to minimize interest rate volatility ▪ 43% net debt-to-total enterprise value (TEV) ▪ Q3 2024 quarter-end net debt-to-pro forma EBITDA of 6.4x ▪ $45m of floating rate debt on the Revolving Credit Facility6 ▪ $205 million undrawn commitments on the Revolving Credit Facility 1 |
| 15 © CTO Realty Growth, Inc. | ctoreit.com 2024 Revised Guidance Exchange at Gwinnett Buford, GA Yonder Yoga Previous 2024 Revised 2024 Core FFO Per Diluted Share3 $1.81 – $1.86 $1.83 – $1.87 $0.02 - $0.01 AFFO Per Diluted Share3 $1.95 - $2.00 $1.96 - $2.00 $0.01 - $0.00 The Company’s estimated Core FFO per diluted share and AFFO per diluted share for 2024 is as follows: Same-Property NOI Growth1,2 2% - 4% 4% - 6% 200 bps – 200 bps General and Administrative Expense $15.2 - $16.2 $16.0 - $16.5 $0.8 – $0.3 Weighted Average Diluted Shares Outstanding 22.9 25.3 2.4 Year-end 2024 Leased Occupancy2 95% - 96% 96% - 97% 100 bps – 100 bps Investments $200 - $250 $300 - $350 $100 - $100 Target Initial Investment Cash Yield 8.50% - 9.00% 8.50% - 9.00% No change Dispositions $50 - $75 $35 - $50 ($15) – ($25) Target Disposition Cash Yield 7.50% - 8.25% 8.50% - 8.75% 100 bps – 50 bps The Company’s 2024 revised guidance includes but is not limited to the following assumptions: $ and shares outstanding in millions, except per share data. 1. Includes the known effects of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy and/or tenant lease defaults. 2. Before potential impact from income producing acquisitions and dispositions. 3. See reconciliation of our 2024 Core FFO and AFFO per Diluted Share to Net Income Attributable to the Company on page 26. Increase (Decrease) |
| 16 © CTO Realty Growth, Inc. | ctoreit.com Experienced Management Team Exchange at Gwinnett Buford, GA Yonder Yoga John P. Albright President & Chief Executive Officer ▪ Former Co-Head and Managing Director of Archon Capital, a Goldman Sachs Company; Executive Director of Merchant Banking – Investment Management at Morgan Stanley; and Managing Director of Crescent Real Estate (NYSE: CEI) Daniel E. Smith Senior Vice President, General Counsel & Corporate Secretary ▪ Former Vice President and Associate General Counsel of Goldman Sachs & Co. and Senior Vice President and General Counsel of Crescent Real Estate (NYSE: CEI) Philip R. Mays Senior Vice President, Chief Financial Officer & Treasurer ▪ Former Chief Financial Officer & Treasurer of Shadowbox Studios; EVP, Chief Financial Officer & Treasurer of Cedar Realty; and Vice President and Chief Accounting Officer of Federal Realty (NYSE: FRT) Steven R. Greathouse Senior Vice President & Chief Investment Officer ▪ Former Director of Finance for N3 Real Estate; Senior Associate of Merchant Banking – Investment Management at Morgan Stanley; and Senior Associate at Crescent Real Estate (NYSE: CEI) Lisa M. Vorakoun Senior Vice President & Chief Accounting Officer ▪ Former Assistant Finance Director of the City of DeLand, Florida and Audit Manager for James Moore & Company, an Accounting and Consulting Firm Matt J. Trau Vice President, Investments ▪ Former Senior Director of Transactions at ShopCore Properties; Senior Associate of Transactions at DDR Corp (currently Site Centers NYSE: SITC) Alexander M. Gordon Vice President, Leasing & Investments ▪ Former Senior Associate, Brokerage & Retail Advisory Services at CBRE (NYSE: CBRE) |
| 17 © CTO Realty Growth, Inc. | ctoreit.com Corporate Responsibility Exchange at Gwinnett Buford, GA Yonder Yoga CTO Realty Growth is committed to sustainability, strong corporate governance, and meaningful corporate social responsibility programs. Social Responsibility Inclusive and Supportive Company Culture ▪ Dedicated to an inclusive and supportive office environment filled with diverse backgrounds and perspectives, with a demonstrated commitment to financial, mental and physical wellness Notable Community Outreach ▪ Numerous and diverse community outreach programs, supporting environmental, artistic, civil and social organizations in the community Corporate Governance ▪ Independent Chairman of the Board and 5 of 6 Directors classified as independent ▪ Annual election of all Directors ▪ Annual Board of Director evaluations ▪ Board oversees risk assessment/management, with oversight for specific areas of risk delegated to Board committees ▪ Stock ownership requirements for all Executive Management and Directors ▪ Prohibition against hedging and pledging CTO Realty Growth stock ▪ Robust policies and procedures for approval of related party transactions ▪ All team members adhere to a comprehensive Code of Business Conduct and Ethics policy |
| 18 © CTO Realty Growth, Inc. | ctoreit.com Environmental Responsibility Yonder Yoga Over the past ten years, CTO has planted approximately 170,000 pine trees in Florida and has restored over 700 acres of former industrial timberland. These 170,000 trees absorb more than 1,000 tons of carbon each year. Environmental Responsibility Committed Focus & Targeted Investment ▪ Committed to maintaining an environmentally conscious culture, the utilization of environmentally friendly & renewable products, and the promotion of sustainable business practices. Notable achievements: o Formed a conservation mitigation bank on approximately 2,500 acres of land, resulting in the land being barred from development permanently preserved o Invested in LED lighting, recycling and waste reduction strategies, programmable thermostats, energy management systems in our office and/or at our owned properties o Conveyed over 11,000 acres of land to the State of Florida to significantly enlarge the neighboring Tiger Bay State Forest Tenant Alignment ▪ Alignment with environmentally aware tenants who have strong sustainability programs and initiatives embedded into their corporate culture and business practices |
| 19 © CTO Realty Growth, Inc. | ctoreit.com Forward Looking Statements & Non-GAAP Financial Measures Forward Looking Statements Certain statements contained in this presentation (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. 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 presentation. The Company undertakes no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances. Non-GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma Adjusted EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. |
| 20 © CTO Realty Growth, Inc. | ctoreit.com Non-GAAP Financial Measures Non-GAAP Financial Measures (continued) To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals. To derive Pro Forma Adjusted EBITDA, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. Cash interest expense is also excluded from Pro Forma Adjusted EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities. To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct cost of revenues, management fee income, and interest income from commercial loans and investments are also excluded from Same-Property NOI. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loans and investments in accordance with GAAP is also used in lieu of the interest income equivalent. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma Adjusted EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. We use Same-Property NOI to compare the operating performance of our assets between periods. It is an accepted and important measurement used by management, investors and analysts because it includes all property-level revenues from the Company’s properties, less operating and maintenance expenses, real estate taxes and other property-specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods. Same-Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company’s properties. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI may not be comparable to similarly titled measures employed by other companies. |
| 21 © CTO Realty Growth, Inc. | ctoreit.com References References and terms used in this presentation that are in addition to terms defined in the Non-GAAP Financial Measures include: ▪ This presentation was published on October 24, 2024. ▪ All information is as of September 30, 2024, unless otherwise noted. ▪ Any calculation differences are assumed to be a result of rounding. ▪ “2024 Guidance” in this presentation is based on the 2024 Guidance provided in the Company’s Third Quarter 2024 Operating Results press release filed on October 24, 2024. ▪ “Alpine” or “PINE” refers to Alpine Income Property Trust, a publicly traded net lease REIT traded on the New York Stock Exchange under the ticker symbol PINE. ▪ “Annualized Base Rent”, “ABR” or “Rent” and the statistics based on ABR are calculated based on the current portfolio and represent straight-line rent calculated in accordance with GAAP. ▪ “Annualized Cash Base Rent”, “Cash ABR” and the statistics based on Cash ABR are calculated based on the current portfolio and represent the annualized cash base rent calculated in accordance with GAAP due from the tenants at a specific point in time. ▪ “Credit Rated” is a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, oody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners (NAIC) (together, the “ ajor Rating Agencies”). The Company defines an Investment Grade Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, oody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and oody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. ▪ “Dividend” or “Dividends”, subject to the required dividends to maintain the Company’s qualification as a REIT, are set by the Board of Directors and declared on a quarterly basis and there can be no assurances as to the likelihood or number of dividends in the future. ▪ “Investment in Alpine Income Property Trust” or “Alpine Investment” or “PINE Ownership” is calculated based on the 2,362,475 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price as of the referenced period on the respective slide. ▪ “Leased Occupancy” refers to space that is currently leased but for which rent payments have not yet commenced. ▪ “ SA” or “ etropolitan Statistical Area” is a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U.S. Office of Management and Budget. The names of the MSA have been shortened for ease of reference. ▪ “Net Debt” is calculated as total long-term debt as presented on the face of the balance sheet; plus financing costs, net of accumulated amortization and unamortized convertible debt discount; less cash, restricted cash and cash equivalents. ▪ “Net Operating Income” or “NOI” is revenues from all income properties less operating expense, maintenance expense, real estate taxes and rent expense. ▪ “Total Enterprise Value” is calculated as the Company’s Total Common Shares Outstanding multiplied by the common stock price; plus the par value of the Series A perpetual preferred equity outstanding and Net Debt. |
| 22 © CTO Realty Growth, Inc. | ctoreit.com Consolidated Statements of Operations CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited, in thousands, except share, per share and dividend data) Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Revenues Income Properties $ 28,528 $ 25,183 $ 79,029 $ 70,373 Management Fee Income 1,124 1,094 3,360 3,294 Interest Income From Commercial Loans and Investments 1,615 1,114 4,407 2,965 Real Estate Operations 538 1,079 1,981 2,602 Total Revenues 31,805 28,470 88,777 79,234 Direct Cost of Revenues Income Properties (7,797) (7,060) (22,630) (20,883) Real Estate Operations (359) (152) (1,437) (876) Total Direct Cost of Revenues (8,156) (7,212) (24,067) (21,759) General and Administrative Expenses (4,075) (3,439) (11,750) (10,493) Provision for Impairment (538) (929) (653) (1,408) Depreciation and Amortization (13,221) (11,669) (35,701) (32,814) Total Operating Expenses (25,990) (23,249) (72,171) (66,474) Gain (Loss) on Disposition of Assets (855) 2,464 8,308 3,565 Other Gain (Loss) (855) 2,464 8,308 3,565 Total Operating Income 4,960 7,685 24,914 16,325 Investment and Other Income (Loss) 7,031 1,184 5,201 (1,296) Interest Expense (5,632) (6,318) (16,765) (16,161) Income (Loss) Before Income Tax Benefit (Expense) 6,359 2,551 13,350 (1,132) Income Tax Benefit (Expense) (132) 135 (98) (375) Net Income (Loss) Attributable to the Company 6,227 2,686 13,252 (1,507) Distributions to Preferred Stockholders (1,878) (1,195) (4,936) (3,585) Net Income (Loss) Attributable to Common Stockholders $ 4,349 $ 1,491 $ 8,316 $ (5,092) Per Share Information Basic and Diluted Net Income (Loss) Attributable to Common Stockholders $ 0.17 $ 0.07 $ 0.35 $ (0.23) Weighted Average Number of Common Shares Basic 25,445,411 22,484,561 23,601,389 22,556,642 Diluted 25,521,749 22,484,561 23,625,369 22,556,642 |
| 23 © CTO Realty Growth, Inc. | ctoreit.com Non-GAAP Financial Measures CTO Realty Growth, Inc. Non-GAAP Financial Measures (Unaudited, in thousands, except per share data) 1. For the three and nine months ended September 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net Income (Loss) Attributable to the Company $ 6,227 $ 2,686 $ 13,252 $ (1,507) Add Back: Effect of Dilutive Interest Related to 2025 Convertible Senior Notes1 - - - - Net Income (Loss) Attributable to the Company, If-Converted $ 6,227 $ 2,686 $ 13,252 $ (1,507) Depreciation and Amortization of Real Estate 13,204 11,651 35,650 32,769 Loss (Gain) on Disposition of Assets, Net of Tax 855 (2,741) (8,308) (3,565) Gain on Disposition of Other Assets (181) (926) (550) (1,739) Provision for Impairment 538 929 653 1,408 Realized and Unrealized Loss (Gain) on Investment Securities (6,244) (429) (2,868) 5,663 Extinguishment of Contingent Obligation - - - (2,300) Funds from Operations $ 14,399 $ 11,170 $ 37,829 $ 30,729 Distributions to Preferred Stockholders (1,878) (1,195) (4,936) (3,585) Funds from Operations Attributable to Common Stockholders $ 12,521 $ 9,975 $ 32,893 $ 27,144 Amortization of Intangibles to Lease Income 112 487 830 1,793 Less: Effect of Dilutive Interest Related to 2025 Notes1 - - - - Core Funds from Operations Attributable to Common Stockholders $ 12,633 $ 10,462 $ 33,723 $ 28,937 Adjustments: Straight-Line Rent Adjustment (473) (790) (1,512) (919) COVID-19 Rent Repayments - 3 - 46 Other Depreciation and Amortization (3) 24 (10) (92) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 235 199 752 636 Non-Cash Compensation 750 868 2,887 2,802 Adjusted Funds from Operations Attributable to Common Stockholders $ 13,142 $ 10,766 $ 35,840 $ 31,410 FFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.49 $ 0.44 $ 1.39 $ 1.20 Core FFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.50 $ 0.47 $ 1.43 $ 1.28 AFFO Attributable to Common Stockholders per Common Share – Diluted1 $ 0.51 $ 0.48 $ 1.52 $ 1.39 |
| 24 © CTO Realty Growth, Inc. | ctoreit.com Same-Property NOI CTO Realty Growth, Inc. Same-Property NOI Reconciliation (Unaudited, in thousands) 1. Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. Net Income (Loss) Attributable to the Company $ 6,227 $ 2,686 $ 13,252 $ (1,507) Loss (Gain) on Disposition of Assets, Net of Tax 855 (2,464) (8,308) (3,565) Provision for Impairment 538 929 653 1,408 Depreciation and Amortization 13,221 11,669 35,701 32,814 Amortization of Intangibles to Lease Income (112) (487) (830) (1,793) Straight-Line Rent Adjustment 473 790 1,512 919 COVID-19 Rent Repayments - (3) - (46) Accretion of Tenant Contribution 13 38 39 114 Interest Expense 5,632 6,318 16,765 16,161 General and Administrative Expenses 4,075 3,439 11,750 10,493 Investment and Other Income (Loss) (7,031) (1,184) (5,201) 1,296 Income Tax Benefit (Expense) 132 (135) 98 375 Real Estate Operations Revenues (538) (1,079) (1,981) (2,602) Real Estate Operations Direct Cost of Revenues 359 152 1,437 876 Management Fee Income (1,124) (1,094) (3,360) (3,294) Interest Income from Commercial Loans and Investments (1,615) (1,114) (4,407) (2,965) Other Non-Recurring Items1 (699) - (1,252) - Less: Impact of Properties Not Owned for the Full Reporting Period (3,568) (2,657) (11,214) (6,256) Same-Property NOI $ 16,838 $ 15,804 $ 44,654 $ 42,428 Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 |
| 25 © CTO Realty Growth, Inc. | ctoreit.com Net Debt to Pro Forma Adjusted EBITDA CTO Realty Growth, Inc. Reconciliation of Net Debt to Pro Forma Adjusted EBITDA (Unaudited, in thousands) 1. Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. 2. Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s investments and disposition activity during the three months ended September 30, 2024. Three Months Ended September 30, 2024 Net Income Attributable to the Company $ 6,227 Depreciation and Amortization of Real Estate 13,204 Loss on Disposition of Assets, Net of Tax 855 Gains on the Disposition of Other Assets (181) Provision for Impairment 538 Unrealized Gain on Investment Securities (6,244) Distributions to Preferred Stockholders (1,878) Straight-Line Rent Adjustment (473) Amortization of Intangibles to Lease Income 112 Other Depreciation and Amortization (3) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 235 Non-Cash Compensation 750 Other Non-Recurring Items1 (699) Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 5,396 Adjusted EBITDA $ 17,839 Annualized Adjusted EBITDA $ 71,356 Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net2 9,901 Pro Forma Adjusted EBITDA $ 81,257 Total Long-Term Debt 526,838 Financing Costs, Net of Accumulated Amortization 1,911 Unamortized Convertible Debt Discount 85 Cash and Cash Equivalents (8,172) Net Debt $ 520,662 Net Debt to Pro Forma Adjusted EBITDA 6.4x |
| 26 © CTO Realty Growth, Inc. | ctoreit.com Core FFO & AFFO Guidance Reconciliation CTO Realty Growth, Inc. Reconciliation of Net Income Attributable to the Company per Diluted Share to Core FFO & AFFO Guidance per Diluted Share (Unaudited) 1. Represents the actual adjustment for the nine months ended September , The Company’s revised outlook excludes projections related to these measures. Revised Outlook Range for 2024 Low High Net Income Attributable to the Company, per Common Share - Diluted $ 0.55 $ 0.59 Depreciation and Amortization of Real Estate 1.94 1.94 Gain on Disposition of Assets, Net of Tax1 (0.33) (0.33) Gain on Disposition of Other Assets1 (0.02) (0.02) Provision for Impairment1 0.03 0.03 Realized and Unrealized Gain on Investment Securities1 (0.11) (0.11) Funds from Operations, per Common Share - Diluted $ 2.06 $ 2.10 Distributions to Preferred Stockholders (0.27) (0.27) Funds from Operations Attributable to Common Stockholders, per Common Share - Diluted $ 1.79 $ 1.83 Amortization of Intangibles to Lease Income 0.04 0.04 Core Funds from Operations Attributable to Common Stockholders $ 1.83 $ 1.87 Adjustments: Straight-Line Rent Adjustment (0.07) (0.07) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 0.05 0.05 Non-Cash Compensation 0.15 0.15 Adjusted Funds From Operations Attributable to Common Stockholders, per Common Share - Diluted $ 1.96 $ 2.00 |
| Investor Inquiries: Philip R. Mays, Chief Financial Officer, (407) 904-3324, pmays@ctoreit.com Ashford Lane | Atlanta, GA |
| © CTO Realty Growth, Inc. | ctoreit.com Ashford Lane Atlanta, GA Supplemental Reporting Information Q3 2024 |
| © CTO Realty Growth, Inc. | ctoreit.com 2 Table of Contents Third Quarter 2024 Earnings Release 4 Key Financial Information Consolidated Balance Sheets 1 5 Consolidated Statements of Operations 1 6 Non -GAAP Financial Measures 1 7 Capitalization & Dividends 20 Summary of Debt 2 1 Debt Maturity Schedule 2 2 Current Year Investment Activity 2 3 Current Year Disposition Activity 2 4 Real Estate Portfolio Capital Investments 2 5 Real Estate Portfolio Summary 2 6 Real Estate Portfolio Detail 2 7 |
| © CTO Realty Growth, Inc. | ctoreit.com 3 Table of Contents Leasing Summary 29 Comparable Leasing Summary 30 Same-Property NOI 31 Lease Expirations 32 Top Tenant Summary 34 Geographic Diversification 35 Other Assets 36 2024 Guidance 37 Contact Information & Research Coverage 38 Safe Harbor, Non-GAAP Financial Measures, and Definitions and Terms 39 |
| Page 4 Press Release FOR IMMEDIATE RELEASE CTO REALTY GROWTH REPORTS THIRD QUARTER 2024 OPERATING RESULTS WINTER PARK, FL – October 24, 2024 – CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter ended September 30, 2024. Third Quarter Highlights Net Income per diluted share attributable to common stockholders of $0.17. Core Funds from Operations (“FFO”) of $0.50 per diluted share attributable to common stockholders, an increase of 6.4% from the comparable prior period. Adjusted Funds from Operations (“AFFO”) of $0.51 per diluted share attributable to common stockholders, an increase of 6.3% from the comparable prior period. Raised net proceeds of $125.7 million under the Company’s common stock ATM offering program. Closed a new 5-year $100 million unsecured term loan, resulting in an initial effective interest rate of 4.7%. Liquidity of $213 million as of September 30, 2024. Investments totaled $191.3 million, including property acquisitions and structured investments, at a weighted average yield of 9.5%. Sold one property for $18.0 million at an exit cap rate of 9.2%. Same-Property NOI totaled $16.8 million, an increase of 6.3% from the comparable prior period. Signed-not-open pipeline represents $6.5 million, or 7.3%, of annual cash base rent in place as of September 30, 2024. Increased full year Core FFO guidance to a range of $1.83 to $1.87 per diluted share attributable to common stockholders. Increased full year AFFO guidance to a range of $1.96 to $2.00 per diluted share attributable to common stockholders. “We are pleased to report another strong quarter with significant accomplishments across all aspects of our business,” stated John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “We experienced significant growth as our GLA increased over 20% from our $137 million portfolio acquisition of high-quality retail centers in our target growth markets, and we originated a $44 million first mortgage development loan with an initial yield of 11%. Importantly, we primarily funded our investment activity with disciplined use of our ATM. Finally, we closed a $100 million 5-year term loan with proceeds used to pay down our credit facility, and ended the quarter with $213 million of available liquidity and decreased leverage.” |
| Page 5 Quarterly Financial Results Highlights The table below provides a summary of the Company’s operating results for the three months ended September 30, 2024: Three Months Ended (in thousands, except per share data) September 30, 2024 September 30, 2023 Variance to Comparable Period in the Prior Year Net Income Attributable to the Company $ 6,227 $ 2,686 $ 3,541 131.8% Net Income Attributable to Common Stockholders $ 4,349 $ 1,491 $ 2,858 191.7% Net Income Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.17 $ 0.07 $ 0.10 142.9% Core FFO Attributable to Common Stockholders (2) $ 12,633 $ 10,462 $ 2,171 20.8% Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 0.50 $ 0.47 $ 0.03 6.4% AFFO Attributable to Common Stockholders (2) $ 13,142 $ 10,766 $ 2,376 22.1% AFFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 0.51 $ 0.48 $ 0.03 6.3% Dividends Declared and Paid - Preferred Stock $ 0.40 $ 0.40 $ — 0.0% Dividends Declared and Paid - Common Stock $ 0.38 $ 0.38 $ — 0.0% (1) The denominator for this measure excludes the impact of 3.7 million and 3.4 million shares for the three months ended September 30, 2024 and 2023, respectively, related to the Company’s adoption of ASU 2020-06, effective January 1, 2022, which requires presentation on an if-converted basis for the Company’s 2025 Convertible Senior Notes, as the impact would be anti-dilutive. (2) See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
| Page 6 Year-to-Date Financial Results Highlights The table below provides a summary of the Company’s operating results for the nine months ended September 30, 2024: Nine Months Ended (in thousands, except per share data) September 30, 2024 September 30, 2023 Variance to Comparable Period in the Prior Year Net Income (Loss) Attributable to the Company $ 13,252 $ (1,507) $ 14,759 979.4% Net Income (Loss) Attributable to Common Stockholders $ 8,316 $ (5,092) $ 13,408 263.3% Net Income (Loss) Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.35 $ (0.23) $ 0.58 252.2% Core FFO Attributable to Common Stockholders (2) $ 33,723 $ 28,937 $ 4,786 16.5% Core FFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 1.43 $ 1.28 $ 0.15 11.7% AFFO Attributable to Common Stockholders (2) $ 35,840 $ 31,410 $ 4,430 14.1% AFFO Attributable to Common Stockholders per Common Share - Diluted (2) $ 1.52 $ 1.39 $ 0.13 9.4% Dividends Declared and Paid - Preferred Stock $ 1.20 $ 1.20 $ — 0.0% Dividends Declared and Paid - Common Stock $ 1.14 $ 1.14 $ — 0.0% (1) The denominator for this measure excludes the impact of 3.6 million and 3.3 million shares for the nine months ended September 30, 2024 and 2023, respectively, related to the Company’s adoption of ASU 2020-06, effective January 1, 2022, which requires presentation on an if-converted basis for the Company’s 2025 Convertible Senior Notes, as the impact would be anti-dilutive. (2) See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income (Loss) Attributable to the Company to non-GAAP financial measures, including FFO Attributable to Common Stockholders, FFO Attributable to Common Stockholders per Common Share - Diluted, Core FFO Attributable to Common Stockholders, Core FFO Attributable to Common Stockholders per Common Share - Diluted, AFFO Attributable to Common Stockholders, and AFFO Attributable to Common Stockholders per Common Share - Diluted. Further, the weighted average shares used to compute per share amounts for Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. Investments During the three months ended September 30, 2024, the Company invested $191.3 million, at a weighted average yield of 9.5% inclusive of: Three open-air shopping centers for a purchase price of $137.5 million consisting of Carolina Pavilion in Charlotte, North Carolina; Millenia Crossing in Orlando, Florida; and Lake Brandon Village in Tampa, Florida. Origination of a $43.8 million first mortgage loan with an initial term of two years and an initial fixed interest rate of 11.0%. The loan is secured by over 100 acres entitled for an over 2 million square foot mixed-use development located in Herndon, Virginia near Dulles International Airport and adjacent to a Metrorail Silver Line station. Completion of a $10.0 million preferred equity investment in a subsidiary of a publicly-traded hospitality, entertainment and real estate company with a dividend rate of 14.0%. The investment is not redeemable prior to July 11, 2029, except upon the occurrence of certain specified events. |
| Page 7 During the nine months ended September 30, 2024, the Company invested $273.8 million into five retail properties totaling 1.2 million square feet and one vacant land parcel, originated two first mortgage structured investments for $53.8 million, and invested $10.0 million in a preferred equity investment in a subsidiary of a publicly-traded hospitality, entertainment and real estate company. These investments represent a weighted average going-in cash yield of 9.1%. Dispositions During the three months ended September 30, 2024, the Company completed the sale of Jordan Landing, located in West Jordan, Utah for $18.0 million. During the nine months ended September 30, 2024, the Company sold two retail properties for $38.0 million at a weighted average exit cash cap rate of 8.7%, generating an aggregate gain of $3.8 million. Portfolio Summary The Company’s income property portfolio consisted of the following as of September 30, 2024: Wtd. Avg. Remaining Asset Type # of Properties Square Feet Lease Term Single Tenant 6 252 5.5 years Multi-Tenant 16 4,360 5.0 years Total / Wtd. Avg. 22 4,612 4.9 years Square Feet in thousands. Property Type # of Properties Square Feet % of Cash Base Rent Retail 17 3,184 66.5% Office 1 210 4.1% Mixed-Use 4 1,218 29.5% Total 22 4,612 100.1% Square Feet in thousands. Leased Occupancy 95.8% Occupancy 90.0% Same Property Net Operating Income During the three months ended September 30, 2024, the Company’s Same-Property NOI totaled $16.8 million, an increase of 6.3% over the comparable prior year period, as presented in the following table: Three Months Ended September 30, 2024 September 30, 2023 Variance to Comparable Period in the Prior Year Single Tenant $ 1,339 $ 1,365 $ (26) (1.9)% Multi-Tenant 15,457 14,439 1,018 7.1% Total $ 16,796 $ 15,804 $ 992 6.3% $ in thousands. |
| Page 8 During the nine months ended September 30, 2024, the Company’s Same-Property NOI totaled $44.6 million, an increase of 5.1% over the comparable prior year period, as presented in the following table: Nine Months Ended September 30, 2024 September 30, 2023 Variance to Comparable Period in the Prior Year Single Tenant $ 3,778 $ 3,505 $ 273 7.8% Multi-Tenant 40,834 38,923 1,911 4.9% Total $ 44,612 $ 42,428 $ 2,184 5.1% $ in thousands. Leasing Activity During the quarter ended September 30, 2024, the Company signed 20 leases totaling 201,806 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 16 leases totaling 147,648 square feet at an average cash base rent of $21.86 per square foot compared to a previous average cash base rent of $19.52 per square foot, representing 12.0% comparable growth. A summary of the Company’s overall leasing activity for the quarter ended September 30, 2024, is as follows: Wtd. Avg. Cash Rent per Tenant Leasing Square Feet Lease Term Square Foot Improvements Commissions New Leases 80 9.2 years $ 25.96 $ 1,657 $ 1,273 Renewals & Extensions 122 3.6 years 18.04 53 36 Total / Wtd. Avg. 202 6.3 years $ 21.17 $ 1,710 $ 1,309 In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. During the nine months ended September 30, 2024, the Company signed 54 leases totaling 384,513 square feet. On a comparable basis, which excludes vacancy existing at the time of acquisition, CTO signed 42 leases totaling 300,225 square feet at an average cash base rent of $23.48 per square foot compared to a previous average cash base rent of $18.63 per square foot, representing 26.0% comparable growth. A summary of the Company’s overall leasing activity for the nine months ended September 30, 2024, is as follows: Wtd. Avg. Cash Rent per Tenant Leasing Square Feet Lease Term Square Foot Improvements Commissions New Leases 181 10.2 years $ 27.26 $ 7,364 $ 2,921 Renewals & Extensions 204 3.7 years 20.62 78 133 Total / Wtd. Avg. 385 7.2 years $ 23.74 $ 7,442 $ 3,054 In thousands except for per square foot and weighted average lease term data. Comparable leases compare leases signed on a space for which there was previously a tenant. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. |
| Page 9 Capital Markets and Balance Sheet During the quarter ended September 30, 2024, the Company completed the following notable capital markets activities: Issued 6,851,375 common shares under its common stock ATM offering program at a weighted average gross price of $18.63 per share, for total net proceeds of $125.7 million. Issued 15,844 common shares under its Series A Preferred Stock ATM offering program at a weighted average gross price of $23.22 per share, for total net proceeds of $0.4 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%. As of September 30, 2024, the Company has $205 million of undrawn commitments, prior to borrowing base limitations, on our Revolving Credit Facility, and $8.2 million of cash on hand. The following table provides a summary of the Company’s long-term debt, as of September 30, 2024: Component of Long-Term Debt Principal Maturity Date Interest Rate Wtd. Avg. Rate as of September 30, 2024 2025 Convertible Senior Notes $ 51.0 million April 2025 3.875% 3.88% 2026 Term Loan (1) 65.0 million March 2026 SOFR + 10 bps + [1.25% - 2.20%] 2.72% Mortgage Note (2) 17.8 million August 2026 4.060% 4.06% Revolving Credit Facility (3) 95.0 million January 2027 SOFR + 10 bps + [1.25% - 2.20%] 5.82% 2027 Term Loan (4) 100.0 million January 2027 SOFR + 10 bps + [1.25% - 2.20%] 2.80% 2028 Term Loan (5) 100.0 million January 2028 SOFR + 10 bps + [1.20% - 2.15%] 5.18% 2029 Term Loan (6) 100.0 million September 2029 SOFR + 0.10% + [1.20% - 2.15%] 4.68% Total Long-Term Debt $ 528.8 million 4.28% (1) The Company utilized interest rate swaps on the $65.0 million 2026 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 1.27% plus the 10 bps SOFR adjustment plus the applicable spread. (2) Mortgage note assumed in connection with the acquisition of Price Plaza Shopping Center located in Katy, Texas. (3) Prior to September 30, 2024, the Company utilized interest rate swaps on $150.0 million of the Credit Facility balance to fix SOFR and achieve a weighted average fixed swap rate of 3.47% plus the 10 bps SOFR adjustment plus the applicable spread. Effective September 30, 2024, the Company assigned $100.0 million of interest rate swaps to the 2029 Term Loan. Accordingly, as of September 30, 2024, the Company had interest rate swaps of $50.0 million of interest rate swaps on the Credit Facility to fix SOFR and achieve a fixed swap rate of 3.85% plus the 10 bps SOFR adjustment plus the applicable spread. (4) The Company utilized interest rate swaps on the $100.0 million 2027 Term Loan balance to fix SOFR and achieve a fixed swap rate of 1.35% plus the 10 bps SOFR adjustment plus the applicable spread. (5) The Company utilized interest rate swaps on the $100.0 million 2028 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.78% plus the 10 bps SOFR adjustment plus the applicable spread. (6) The Company utilized interest rate swaps on the $100.0 million 2029 Term Loan balance to fix SOFR and achieve a weighted average fixed swap rate of 3.28% plus the 10 bps SOFR adjustment plus the applicable spread. |
| Page 10 As of September 30, 2024, the Company’s net debt to Pro Forma Adjusted EBITDA was 6.4 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 2.7 times. As of September 30, 2024, the Company’s net debt to total enterprise value was 43.1%. The Company calculates total enterprise value as the sum of net debt, par value of its 6.375% Series A preferred equity, and the market value of the Company's outstanding common shares. Dividends On August 20, 2024, the Company announced a cash dividend on its common stock and Series A Preferred Stock for the third quarter of 2024 of $0.38 per share and $0.40 per share, respectively, payable on September 30, 2024 to stockholders of record as of the close of business on September 12, 2024. The third quarter 2024 common stock cash dividend represents a payout ratio of 76.0% and 74.5% of the Company’s third quarter 2024 Core FFO Attributable to Common Stockholders per Common Share - Diluted and AFFO Attributable to Common Stockholders per Common Share - Diluted, respectively. 2024 Outlook The Company has increased its Core FFO and AFFO outlook for 2024 and has revised certain assumptions to take into account the Company’s year-to-date performance and revised expectations regarding the Company’s acquisition activities. The Company’s outlook for 2024 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions. The Company’s increased outlook for 2024 is as follows: Revised Outlook Range for 2024 Change from Prior Outlook (Unaudited) Low High Low High Core FFO per Diluted Share $ 1.83 to $ 1.87 $ 0.02 to $ 0.01 AFFO per Diluted Share $ 1.96 to $ 2.00 $ 0.01 to $ - The Company’s 2024 guidance includes but is not limited to the following assumptions: Same-Property NOI growth of 4% to 6%, including the known impact of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy, and/or tenant lease defaults, and before any impact from potential 2024 income property acquisitions and/or dispositions. General and administrative expenses within a range of $16.0 million to $16.5 million. Weighted average diluted shares outstanding of 25.3 million shares. Year-end 2024 leased occupancy projected to be within a range of 96% to 97% before any impact from potential 2024 income property acquisitions and/or dispositions. Investment, including structured investments, between $300 million and $350 million at a weighted average initial cash yield between 8.50% and 9.00%. Disposition of assets between $35 million and $50 million at a weighted average exit cash yield between 8.50% and 8.75% |
| Page 11 The following table provides a reconciliation of the revised outlook range of the Company’s 2024 estimated Net Income Attributable to the Company per Diluted Share to estimated Core FFO and AFFO per Diluted Share: Revised Outlook Range for 2024 (Unaudited) Low High Net Income Attributable to the Company, per Common Share - Diluted $ 0.55 $ 0.59 Depreciation and Amortization of Real Estate 1.94 1.94 Gain on Disposition of Assets, Net of Tax (1) (0.33) (0.33) Gain on Disposition of Other Assets(1) (0.02) (0.02) Provision for Impairment (1) 0.03 0.03 Realized and Unrealized Gain on Investment Securities (1) (0.11) (0.11) Funds from Operations, per Common Share - Diluted $ 2.06 $ 2.10 Distributions to Preferred Stockholders (0.27) (0.27) Funds From Operations Attributable to Common Stockholders, per Common Share - Diluted $ 1.79 $ 1.83 Amortization of Intangibles to Lease Income 0.04 0.04 Core Funds From Operations Attributable to Common Stockholders $ 1.83 $ 1.87 Adjustments: Straight-Line Rent Adjustment (0.07) (0.07) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 0.05 0.05 Non-Cash Compensation 0.15 0.15 Adjusted Funds From Operations Attributable to Common Stockholders, per Common Share - Diluted $ 1.96 $ 2.00 (1) Represents the actual adjustment for the nine months ended September 30, 2024. The Company’s revised outlook excludes projections related to these measures. Earnings Conference Call & Webcast The Company will host a conference call to present its operating results for the quarter ended September 30, 2024, on Friday, October 25, 2024, at 9:00 AM ET. A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.ctoreit.com or at the link provided in the event details below. To access the call by phone, please go to the registration link provided in the event details below and you will be provided with dial-in details. Event Details: Webcast: https://edge.media-server.com/mmc/p/d5bi9eap Registration: https://register.vevent.com/register/BI41ec61215d574a4e9274d2d335e1a5a6 We encourage participants to register and dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.ctoreit.com. |
| Page 12 About CTO Realty Growth, Inc. CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT. We encourage you to review our most recent investor presentation and supplemental financial information, which is available on our website at www.ctoreit.com. Contact: Investor Relations ir@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. Although forward-looking statements are made based upon management’s present expectations and 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. Non-GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma Adjusted EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), |
| Page 13 each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals. To derive Pro Forma Adjusted EBITDA, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above-and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. Cash interest expense is also excluded from Pro Forma Adjusted EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities. To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct |
| Page 14 cost of revenues, management fee income, and interest income from commercial loans and investments are also excluded from Same-Property NOI. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loans and investments in accordance with GAAP is also used in lieu of the interest income equivalent. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma Adjusted EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. We use Same-Property NOI to compare the operating performance of our assets between periods. It is an accepted and important measurement used by management, investors and analysts because it includes all property-level revenues from the Company’s properties, less operating and maintenance expenses, real estate taxes and other property-specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods. Same-Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company’s properties. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI may not be comparable to similarly titled measures employed by other companies. |
| Page 15 CTO Realty Growth, Inc. Consolidated Balance Sheets (In thousands, except share and per share data) As of (Unaudited) September 30, 2024 December 31, 2023 ASSETS Real Estate: Land, at Cost $ 253,742 $ 222,232 Building and Improvements, at Cost 691,055 559,389 Other Furnishings and Equipment, at Cost 874 857 Construction in Process, at Cost 4,838 3,997 Total Real Estate, at Cost 950,509 786,475 Less, Accumulated Depreciation (70,545) (52,012) Real Estate—Net 879,964 734,463 Land and Development Costs 300 731 Intangible Lease Assets—Net 107,658 97,109 Investment in Alpine Income Property Trust, Inc. 42,997 39,445 Mitigation Credits — 1,044 Commercial Loans and Investments 103,014 61,849 Cash and Cash Equivalents 8,172 10,214 Restricted Cash 1,696 7,605 Refundable Income Taxes 18 246 Deferred Income Taxes—Net 2,019 2,009 Other Assets 30,286 34,953 Total Assets $ 1,176,124 $ 989,668 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Accounts Payable $ 2,075 $ 2,758 Accrued and Other Liabilities 26,401 18,373 Deferred Revenue 6,171 5,200 Intangible Lease Liabilities—Net 18,857 10,441 Long-Term Debt 526,838 495,370 Total Liabilities 580,342 532,142 Commitments and Contingencies Stockholders’ Equity: Preferred Stock – 100,000,000 shares authorized; $0.01 par value, 6.375% Series A Cumulative Redeemable Preferred Stock, $25.00 Per Share Liquidation Preference, 4,713,069 shares issued and outstanding at September 30, 2024 and 2,978,808 shares issued and outstanding at December 31, 2023 47 30 Common Stock – 500,000,000 shares authorized; $0.01 par value, 29,971,538 shares issued and outstanding at September 30, 2024 and 22,643,034 shares issued and outstanding at December 31, 2023 300 226 Additional Paid-In Capital 334,467 168,435 Retained Earnings 261,373 281,944 Accumulated Other Comprehensive Income (405) 6,891 Total Stockholders’ Equity 595,782 457,526 Total Liabilities and Stockholders’ Equity $ 1,176,124 $ 989,668 |
| Page 16 CTO Realty Growth, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except share, per share and dividend data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2024 2023 2024 2023 Revenues Income Properties $ 28,528 $ 25,183 $ 79,029 $ 70,373 Management Fee Income 1,124 1,094 3,360 3,294 Interest Income From Commercial Loans and Investments 1,615 1,114 4,407 2,965 Real Estate Operations 538 1,079 1,981 2,602 Total Revenues 31,805 28,470 88,777 79,234 Direct Cost of Revenues Income Properties (7,797) (7,060) (22,630) (20,883) Real Estate Operations (359) (152) (1,437) (876) Total Direct Cost of Revenues (8,156) (7,212) (24,067) (21,759) General and Administrative Expenses (4,075) (3,439) (11,750) (10,493) Provision for Impairment (538) (929) (653) (1,408) Depreciation and Amortization (13,221) (11,669) (35,701) (32,814) Total Operating Expenses (25,990) (23,249) (72,171) (66,474) Gain (Loss) on Disposition of Assets (855) 2,464 8,308 3,565 Other Gain (Loss) (855) 2,464 8,308 3,565 Total Operating Income 4,960 7,685 24,914 16,325 Investment and Other Income (Loss) 7,031 1,184 5,201 (1,296) Interest Expense (5,632) (6,318) (16,765) (16,161) Income (Loss) Before Income Tax Benefit (Expense) 6,359 2,551 13,350 (1,132) Income Tax Benefit (Expense) (132) 135 (98) (375) Net Income (Loss) Attributable to the Company 6,227 2,686 13,252 (1,507) Distributions to Preferred Stockholders (1,878) (1,195) (4,936) (3,585) Net Income (Loss) Attributable to Common Stockholders $ 4,349 $ 1,491 $ 8,316 $ (5,092) Per Share Information: Basic and Diluted Net Income (Loss) Attributable to Common Stockholders $ 0.17 0.07 0.35 (0.23) Weighted Average Number of Common Shares Basic 25,445,411 22,484,561 23,601,389 22,556,642 Diluted 25,521,749 22,484,561 23,625,369 22,556,642 Dividends Declared and Paid - Preferred Stock $ 0.40 $ 0.40 $ 1.20 $ 1.20 Dividends Declared and Paid - Common Stock $ 0.38 $ 0.38 $ 1.14 $ 1.14 |
| Page 17 CTO Realty Growth, Inc. Non-GAAP Financial Measures Same-Property NOI Reconciliation (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net Income (Loss) Attributable to the Company $ 6,227 $ 2,686 $ 13,252 $ (1,507) Loss (Gain) on Disposition of Assets, Net of Tax 855 (2,464) (8,308) (3,565) Provision for Impairment 538 929 653 1,408 Depreciation and Amortization 13,221 11,669 35,701 32,814 Amortization of Intangibles to Lease Income (112) (487) (830) (1,793) Straight-Line Rent Adjustment 473 790 1,512 919 COVID-19 Rent Repayments — (3) — (46) Accretion of Tenant Contribution 13 38 39 114 Interest Expense 5,632 6,318 16,765 16,161 General and Administrative Expenses 4,075 3,439 11,750 10,493 Investment and Other Income (Loss) (7,031) (1,184) (5,201) 1,296 Income Tax Benefit (Expense) 132 (135) 98 375 Real Estate Operations Revenues (538) (1,079) (1,981) (2,602) Real Estate Operations Direct Cost of Revenues 359 152 1,437 876 Management Fee Income (1,124) (1,094) (3,360) (3,294) Interest Income From Commercial Loans and Investments (1,615) (1,114) (4,407) (2,965) Other Non-Recurring Items(1) (699) — (1,252) — Less: Impact of Properties Not Owned for the Full Reporting Period (3,568) (2,657) (11,214) (6,256) Same-Property NOI $ 16,838 $ 15,804 $ 44,654 $ 42,428 (1) Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. |
| Page 18 CTO Realty Growth, Inc. Non-GAAP Financial Measures Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations Attributable to Common Stockholders (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net Income (Loss) Attributable to the Company $ 6,227 $ 2,686 $ 13,252 $ (1,507) Add Back: Effect of Dilutive Interest Related to 2025 Notes (1) — — — — Net Income (Loss) Attributable to the Company, If-Converted $ 6,227 $ 2,686 $ 13,252 $ (1,507) Depreciation and Amortization of Real Estate 13,204 11,651 35,650 32,769 Loss (Gain) on Disposition of Assets, Net of Tax 855 (2,741) (8,308) (3,565) Gain on Disposition of Other Assets (181) (926) (550) (1,739) Provision for Impairment 538 929 653 1,408 Realized and Unrealized Loss (Gain) on Investment Securities (6,244) (429) (2,868) 5,663 Extinguishment of Contingent Obligation — — — (2,300) Funds from Operations $ 14,399 $ 11,170 $ 37,829 $ 30,729 Distributions to Preferred Stockholders (1,878) (1,195) (4,936) (3,585) Funds From Operations Attributable to Common Stockholders $ 12,521 $ 9,975 $ 32,893 $ 27,144 Amortization of Intangibles to Lease Income 112 487 830 1,793 Less: Effect of Dilutive Interest Related to 2025 Notes(1) — — — — Core Funds From Operations Attributable to Common Stockholders $ 12,633 $ 10,462 $ 33,723 $ 28,937 Adjustments: Straight-Line Rent Adjustment (473) (790) (1,512) (919) COVID-19 Rent Repayments — 3 — 46 Other Depreciation and Amortization (3) 24 (10) (92) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 235 199 752 636 Non-Cash Compensation 750 868 2,887 2,802 Adjusted Funds From Operations Attributable to Common Stockholders $ 13,142 $ 10,766 $ 35,840 $ 31,410 FFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.49 $ 0.44 $ 1.39 $ 1.20 Core FFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.50 $ 0.47 $ 1.43 $ 1.28 AFFO Attributable to Common Stockholders per Common Share - Diluted (1) $ 0.51 $ 0.48 $ 1.52 $ 1.39 (1) For the three and nine months ended September 30, 2024 and 2023, interest related to the 2025 Convertible Senior Notes was excluded from net income (loss) attributable to the Company to derive FFO, as the impact to net income (loss) attributable to common stockholders would be anti-dilutive. Further, the weighted average shares used to compute per share amounts for FFO Attributable to Common Stockholders per Common Share – Diluted, Core FFO Attributable to Common Stockholders per Common Share - Diluted, and AFFO Attributable to Common Stockholders per Common Share - Diluted do not reflect any dilution related to the ultimate settlement of the 2025 Convertible Senior Notes. |
| Page 19 CTO Realty Growth, Inc. Non-GAAP Financial Measures Reconciliation of Net Debt to Pro Forma Adjusted EBITDA (Unaudited) (In thousands) Three Months Ended September 30, 2024 Net Income Attributable to the Company $ 6,227 Depreciation and Amortization of Real Estate 13,204 Loss on Disposition of Assets, Net of Tax 855 Gain on Disposition of Other Assets (181) Provision for Impairment 538 Unrealized Gain on Investment Securities (6,244) Distributions to Preferred Stockholders (1,878) Amortization of Intangibles to Lease Income 112 Straight-Line Rent Adjustment (473) Other Depreciation and Amortization (3) Amortization of Loan Costs, Discount on Convertible Debt, and Capitalized Interest 235 Non-Cash Compensation 750 Other Non-Recurring Items (1) (699) Interest Expense, Net of Amortization of Loan Costs and Discount on Convertible Debt 5,396 Adjusted EBITDA $ 17,839 Annualized Adjusted EBITDA $ 71,356 Pro Forma Annualized Impact of Current Quarter Investments and Dispositions, Net (2) 9,901 Pro Forma Adjusted EBITDA $ 81,257 Total Long-Term Debt $ 526,838 Financing Costs, Net of Accumulated Amortization 1,911 Unamortized Convertible Debt Discount 85 Cash and Cash Equivalents (8,172) Net Debt $ 520,662 Net Debt to Pro Forma Adjusted EBITDA 6.4 x (1) Includes non-recurring items including termination fees, forfeitures of tenant security deposits, and certain adjustments to estimates related to recently acquired property CAM reconciliations. (2) Reflects the pro forma annualized impact on Annualized Adjusted EBITDA of the Company’s investments and disposition activity during the three months ended September 30, 2024. |
| © CTO Realty Growth, Inc. | ctoreit.com 20 Capitalization & Dividends Equity Capitalization Common Shares Outstanding 29,971 Common Share Price $19.02 Total Common Equity Market Capitalization $570,058 Series A Preferred Shares Outstanding 4,713 Series A Preferred Par Value Per Share $25.00 Series A Preferred Par Value $117,825 Total Equity Capitalization $687,885 Debt Capitalization Total Debt Outstanding $528,834 Total Capitalization $1,216,719 Cash & Cash Equivalents $8,172 Total Enterprise Value $1,208,547 Dividends Paid Common Preferred Q4 2023 $0.38 $0.40 Q1 2024 $0.38 $0.40 Q2 2024 $0.38 $0.40 Q3 2024 $0.38 $0.40 Trailing Twelve Months Q3 2024 $1.52 $1.59 Q3 2024 Core FFO Per Diluted Share $0.50 Q3 2024 AFFO Per Diluted Share $0.51 Q3 2024 Core FFO Payout Ratio 76.0% Q3 2024 AFFO Payout Ratio 74.5% Dividend Yield Q3 2024 $0.38 $0.40 Annualized Q3 2024 Dividend $1.52 $1.59 Price Per Share as of September 30, 2024 $19.02 $23.53 Implied Dividend Yield 8.0% 6.8% $ and shares outstanding in thousands, except per share data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 21 Debt Summary $ in thousands. Any differences are a result of rounding. 1. See reconciliation as part of Non-GAAP Financial Measures in the Company’s Third Quarter 2024 Earnings Release. Indebtedness Outstanding Face Value Interest Rate Maturity Date Type 2025 Convertible Senior Notes $51,034 3.88% April 2025 Fixed 2026 Term Loan 65,000 SOFR + 10 bps + [1.25% – 2.20%] March 2026 Fixed Mortgage Note 17,800 4.06% August 2026 Fixed Revolving Credit Facility 45,000 SOFR + 10 bps + [1.25% – 2.20%] January 2027 Floating Revolving Credit Facility 50,000 SOFR + 10 bps + [1.25% – 2.20%] January 2027 Fixed 2027 Term Loan 100,000 SOFR + 10 bps + [1.25% – 2.20%] January 2027 Fixed 2028 Term Loan 100,000 SOFR + 10 bps + [1.20% – 2.15%] January 2028 Fixed 2029 Term Loan 100,000 SOFR + 10 bps + [1.20% – 2.15%] September 2029 Fixed Total / Weighted Average $528,834 4.28% Leverage Metrics Face Value of Debt $528,834 Cash & Cash Equivalents (8,172) Net Debt $520,662 Total Enterprise Value $1,208,547 Net Debt to Total Enterprise Value 43.1% Net Debt to Pro Forma Adjusted EBITDA1 6.4x |
| © CTO Realty Growth, Inc. | ctoreit.com 22 Debt Maturities Year Outstanding % of Debt Maturing Cumulative % of Debt Maturing Weighted Average Rate 2024 $ − − % − % − % 2025 51,034 10% 10% 3.88% 2026 82,800 16% 25% 3.01% 2027 195,000 37% 62% 4.27% 2028 100,000 19% 81% 5.18% 2029 100,000 19% 100% 4.68% Total $528,834 100% 100% 4.28% $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 23 Year-to-Date Investments Property Acquisitions Market Type Date Acquired Square Feet Price Occupancy At Acquisition Phase II of The Exchange at Gwinnett (5 of 5 parcels) Buford, GA Atlanta, GA Multi-Tenant Retail February 2024 4,000 $2,272 100% Marketplace at Seminole Towne Center Sanford, FL Orlando, FL Multi-Tenant Retail March 2024 315,066 68,700 98% Undeveloped Land Parcel at West Broad Village Glen Allen, VA Richmond, VA Land June 2024 N/A 1,500 0% Carolina Pavilion, Charlotte, NC Charlotte, NC Multi-Tenant Retail August 2024 685,714 94,000 93% Millenia Crossing, Orlando, FL Orlando, FL Retail Power Center August 2024 100,385 27,500 96% Lake Brandon Village, FL Tampa, FL Retail Power Center August 2024 102,022 16,000 100% Total Acquisitions 1,207,187 $209,972 Structured Investments Market Type Date Originated Capital Commitment Initial Interest Rate Structure Hypoluxo Development Loan Lake Worth, FL Miami, FL Retail March 2024 $10,000 11.00% First Mortgage Series A Preferred Investment Various Entertainment RE July 2024 $10,000 14.00% Preferred Equity Rivana Loan Herndon, VA Northern, VA Mixed Use September 2024 $43,818 11.00% First Mortgage Total Structured Investments $63,818 11.47% $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 24 Year-to-Date Dispositions Property Market Type Date Sold Square Feet Price Gain/(Loss) 125 Lincoln & 150 Washington Santa Fe, NM Santa Fe Mixed Use March 2024 136,240 $19,977 $4,618 Jordan Landing, West Jordan UT West Jordan Retail Power Center August 170,996 $18,000 ($855) Total Dispositions 307,236 $37,977 $3,763 $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 25 Real Estate Portfolio Capital Investments Investment in Previously Occupied Space Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures $ − $54 $7 $61 Tenant Improvement Allowances 48 529 936 1,513 Leasing Commissions 541 89 373 1,003 Total Investment in Previously Occupied Space $589 $672 $1,316 $2,577 New Investment in Acquired Vacancy Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures $561 $ − 271 $832 Tenant Improvement Allowances 1,233 1,987 1,773 4,993 Leasing Commissions 489 158 657 1,304 Total New Investment in Acquired Vacancy $2,283 $2,145 $2,701 $7,129 Other Capital Investments Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Property Improvement Costs $427 $568 $402 $1,397 Investment in Property Repositioning 26 42 321 389 Total Other Capital Investments $453 $610 $723 $1,786 Total Capital Investments Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Capital Expenditures and Other Capital Investments $1,014 $664 $1,001 $2,679 Tenant Improvement Allowances 1,281 2,516 2,709 6,506 Leasing Commissions 1,030 247 1,030 2,307 Total Capital Investments $3,325 $3,427 $4,740 $11,492 $ in thousands. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 26 Real Estate Portfolio Summary Total Portfolio as of September 30, 2024 Asset Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Single Tenant 6 252 $22.01 100.0% 100.0% Multi-Tenant 16 4,360 $19.29 89.4% 95.6% Total Portfolio 22 4,612 $19.44 90.0% 95.8% Property Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Retail 17 3,184 $18.63 91.9% 97.7% Office 1 210 $17.49 100.0% 100.0% Mixed Use 4 1,218 $21.87 83.3% 90.1% Total Portfolio 22 4,612 $19.44 90.0% 95.8% Total Portfolio as of September 30, 2023 Asset Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Single Tenant 7 372 $20.64 100.0% 100.0% Multi-Tenant 16 3,746 $18.46 88.6% 92.1% Total Portfolio 23 4,118 $18.66 89.6% 92.8% Property Type Number of Properties Square Feet Cash ABR PSF Occupancy Leased Occupancy Retail 16 2,432 $18.00 93.4% 96.5% Office 2 331 $18.01 100.0% 100.0% Mixed Use 5 1,355 $19.99 80.2% 84.5% Total Portfolio 23 4,118 $18.66 89.6% 92.8% $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 27 Real Estate Portfolio Detail Property Type Year Acquired/ Developed Year Built Acreage Square Feet In-Place Occupancy Leased Occupancy Cash ABR PSF Atlanta, GA The Collection at Forsyth Lifestyle 2022 2006 69.5 560,665 86% 92% $20.47 Ashford Lane Lifestyle 2020 2005 43.7 277,123 90% 95% $29.10 Madison Yards Grocery-Anchored 2022 2019 10.3 162,521 99% 99% $30.85 The Exchange at Gwinnett Grocery-Anchored 2021/2023 2021/2023 16.4 97,366 98% 100% $36.02 Total Atlanta, GA 139.9 1,097,675 90% 95% $25.56 Dallas, TX Plaza at Rockwall Retail Power Center 2023 2007 42.0 446,521 95% 99% $12.50 The Shops at Legacy Lifestyle 2021 2007 12.7 237,572 64% 77% $23.08 Total Dallas, TX 54.7 684,093 84% 91% $16.17 Richmond, VA West Broad Village Grocery-Anchored 2022 2007 32.6 392,146 90% 95% $22.60 Jacksonville, FL The Strand at St. Johns Town Center Retail Power Center 2019 2017 52.0 211,197 99% 100% $25.77 Phoenix, AZ Crossroads Town Center Retail Power Center 2020 2005 31.1 221,658 100% 100% $20.51 Raleigh, NC Beaver Creek Crossings Retail Power Center 2021 2005 51.6 322,113 84% 100% $14.38 Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 28 Real Estate Portfolio Detail Property Type Year Acquired/ Developed Year Built Acreage Square Feet In-Place Occupancy Leased Occupancy Cash ABR PSF Charlotte, NC Carolina Pavilion Retail Power Center 2024 1995 72.2 685,714 81% 94% $11.83 Albuquerque, NM Fidelity Single Tenant Office 2018 2009 25.3 210,067 100% 100% $17.49 Houston, TX Price Plaza Shopping Center Retail Power Center 2022 1999 23.2 200,576 100% 100% $16.77 Daytona Beach, FL Daytona Beach Restaurant Portfolio Single Tenant (5) 2018 / 2022 1915 - 2018 8.3 41,725 100% 100% $44.75 Tampa, FL Lake Brandon Village Retail Power Center 2024 1998 8.2 102,022 100% 100% $12.55 Orlando, FL Winter Park Office Mixed Use 2021 1982 2.3 27,948 100% 100% $29.58 Marketplace at Seminole Towne Center Retail Power Center 2024 2006 40.6 315,066 98% 98% $18.65 Millenia Crossing - Orlando, FL Retail Power Center 2024 2009 11.2 100,385 87% 96% $20.37 Total Orlando, FL 54.1 443,399 96% 98% $19.73 Total Portfolio 553.2 4,612,385 90% 96% $19.44 Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 29 Leasing Summary Renewals and Extensions Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 10 7 11 28 Square Feet 34 48 122 204 New Cash Rent PSF $29.26 $21.06 $18.04 $20.62 Tenant Improvements $15 $10 $53 $78 Leasing Commissions $40 $57 $36 $133 Weighted Average Term 3.8 years 4.0 years 3.6 years 3.7 years New Leases Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 8 9 9 27 Square Feet 70 31 80 181 New Cash Rent PSF $26.09 $33.28 $25.96 $27.26 Tenant Improvements $4,842 $865 $1,657 $7,364 Leasing Commissions $1,133 $515 $1,273 $2,921 Weighted Average Term 12.4 years 8.1 years 9.2 years 10.2 years All Leases Summary Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Leases 18 16 20 55 Square Feet 104 79 202 385 New Cash Rent PSF $27.12 $25.87 $21.17 $23.74 Tenant Improvements $4,857 $875 $1,710 $7,442 Leasing Commissions $1,173 $573 $1,308 $3,054 Weighted Average Term 9.4 years 6.0 years 6.3 years 7.2 years $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. Overall leasing activity does not include lease termination agreements or lease amendments related to tenant bankruptcy proceedings. |
| © CTO Realty Growth, Inc. | ctoreit.com 30 Comparable Leasing Summary Renewals and Extensions - Comparable Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 10 34 $29.26 $26.96 8.5% 3.8 years $15 $40 2nd Quarter 2024 7 48 $21.06 $20.83 1.1% 4.0 years $10 $57 3rd Quarter 2024 11 122 $18.04 $17.14 5.3% 3.6 years $54 $35 4th Quarter 2024 Total / Wtd. Avg. 28 204 $20.62 $19.65 5.0% 3.7 years $78 $133 New Leases – Comparable Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 5 61 $24.32 $9.08 167.9% 13.2 years $4,541 $914 2nd Quarter 2024 4 10 $33.99 $24.36 39.5% 9.2 years $206 $190 3rd Quarter 2024 5 26 $40.03 $30.83 29.8% 9.3 years $916 $709 4th Quarter 2024 Total / Wtd. Avg. 14 96 $29.51 $16.47 79.2% 11.3 years $5,663 $1,813 All Comparable Leases Summary Number of Leases Signed GLA Signed New Cash Rent PSF Expiring Cash Rent PSF % Increase Over Expiring Rent Weighted Average Lease Term Tenant Improvements Lease Commissions 1st Quarter 2024 15 95 $26.09 $15.51 68.2% 9.4 years $4,556 $955 2nd Quarter 2024 11 58 $23.34 $21.45 8.8% 5.3 years $216 $247 3rd Quarter 2024 16 148 $21.86 $19.52 12.0% 5.4 years $970 $744 4th Quarter 2024 Total / Wtd. Avg. 42 300 $23.48 $18.63 26.0% 6.8 years $5,741 $1,946 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. Comparable leases compare leases signed on a space for which there was previously a tenant. |
| © CTO Realty Growth, Inc. | ctoreit.com 31 Same-Property NOI Multi-Tenant Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 12 12 12 11 Same-Property NOI – 2024 $13,966 $13,587 $15,457 $40,834 Same-Property NOI – 2023 $13,305 $13,391 $14,439 $38,923 $ Variance $661 $196 $1,018 $1,911 % Variance 5.0% 1.5% 7.1% 4.9% Single-Tenant Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 6 6 6 6 Same-Property NOI – 2024 $1,148 $1,292 $1,339 $3,778 Same-Property NOI – 2023 $949 $1,191 $1,365 $3,505 $ Variance $199 $101 ($26) $273 % Variance 21.0% 8.5% (1.9%) 7.8% All Properties Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Number of Comparable Properties 18 18 18 17 Same-Property NOI – 2024 $15,114 $14,879 $16,796 $44,612 Same-Property NOI – 2023 $14,254 $14,582 $15,804 $42,428 $ Variance $860 $297 $992 $2,184 % Variance 6.0% 2.0% 6.3% 5.1% $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 32 Lease Expiration Schedule Anchor Tenants (1) Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 1 20 0.5% $204 0.2% $10.00 2025 7 125 3.0% 2,630 2.9% $20.96 2026 11 337 8.1% 5,932 6.6% $17.60 2027 13 455 11.0% 4,936 5.5% $10.84 2028 17 779 18.8% 12,396 13.8% $15.91 2029 8 198 4.8% 3,411 3.8% $17.21 2030 6 173 4.2% 2,004 2.2% $11.58 2031 8 231 5.6% 4,099 4.6% $17.73 2032 6 103 2.5% 1,628 1.8% $15.87 Thereafter 14 387 9.3% 7,527 8.4% $19.46 Total 91 2,809 67.7% $44,767 49.9% $15.94 Small Shop Tenants Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 13 41 1.0% $1,139 1.3% $27.75 2025 36 108 2.6% 3,489 3.9% $32.39 2026 53 195 4.7% 5,681 6.3% $29.10 2027 62 187 4.5% 5,612 6.3% $29.98 2028 51 190 4.6% 6,556 7.3% $34.49 2029 42 149 3.6% 5,029 5.6% $33.71 2030 38 134 3.2% 4,468 5.0% $33.30 2031 34 90 2.2% 3,143 3.5% $34.80 2032 26 80 1.9% 2,929 3.3% $36.53 Thereafter 45 167 4.0% 6,844 7.6% $40.98 Total 400 1,342 32.3% $44,889 50.1% $33.45 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. 1. Anchor Tenant defined as over 10,000 NRA. |
| © CTO Realty Growth, Inc. | ctoreit.com 33 Lease Expiration Schedule Total Year Leases Expiring Expiring SF % of Total Cash ABR % of Total Cash ABR PSF 2024 14 61 1.5% $1,343 1.5% $21.86 2025 43 233 5.6% 6,118 6.8% $26.24 2026 64 532 12.8% 11,613 13.0% $21.82 2027 75 643 15.5% 10,547 11.8% $16.41 2028 68 969 23.3% 18,952 21.1% $19.55 2029 50 347 8.4% 8,441 9.4% $24.30 2030 44 307 7.4% 6,472 7.2% $21.06 2031 42 322 7.7% 7,242 8.1% $22.52 2032 32 183 4.4% 4,556 5.1% $24.94 Thereafter 59 554 13.3% 14,372 16.0% $25.95 Total 491 4,151 100.0% $89,656 100.0% $21.60 $ and square feet in thousands, except per square foot data. Any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 34 Top Tenant Summary Tenant/Concept Credit Rating1 Leases2 Leased Square Feet2 % of Total Cash ABR % of Total AMC CCC+ / Caa2 3 174 3.8% $4,008 4.5% Fidelity A+ / A1 2 218 4.7% 3,674 4.1% Ross/dd’s Discount BBB+ / A2 6 164 3.6% 2,115 2.4% Best Buy BBB+ / A3 3 112 2.4% 1,749 2.0% Southern University NR / NR 1 60 1.3% 1,664 1.9% Whole Foods Market AA- / A1 1 60 1.3% 1,633 1.8% TJ Maxx/HomeGoods/Marshalls A / A2 5 153 3.3% 1,456 1.6% Dick’s Sporting Goods BBB / Baa2 2 95 2.1% 1,244 1.4% Darden Restaurants BBB / Baa2 3 25 0.5% 1,195 1.3% Publix NR 1 54 1.2% 1,076 1.2% Other 464 3,037 65.8% 69,842 77.9% Total Occupied 491 4,151 90.0% $89,656 100.0% Vacant − 461 10.0% Total 491 4,612 100.0% $ and square feet in thousands. Any differences are a result of rounding. 1. Credit Rating is the available rating from S&P Global Ratings and/or Moody’s Investors Service, as of September 30, 2024. “NR” indicates the company is not rated. 2. Excludes leases not yet commenced. |
| © CTO Realty Growth, Inc. | ctoreit.com 35 Geographic Diversification Markets Properties Square Feet % of Total Cash ABR % of Total 5-Mile 2023 Average Household Income 5-Mile 2023 Total Population 2023-2028 Projected Population Annual Growth Atlanta, GA 4 1,098 24% $28,061 31% $158,112 220,379 0.9% Dallas, TX 2 684 15% 11,066 12% 149,562 209,083 0.8% Orlando, FL 3 443 10% 8,747 10% 92,119 173,650 0.5% Richmond, VA 1 392 9% 8,863 10% 146,903 175,023 0.4% Charlotte, NC 1 686 15% 8,115 9% 139,148 202,919 0.8% Jacksonville, FL 1 211 5% 5,442 6% 93,407 201,089 0.6% Raleigh, NC 1 322 7% 4,631 5% 181,119 133,529 0.9% Phoenix, AZ 1 222 5% 4,547 5% 143,944 314,629 0.4% Albuquerque, NM 1 210 5% 3,674 4% 68,911 50,072 6.0% Houston, TX 1 201 4% 3,364 4% 116,635 277,236 0.8% Daytona Beach, FL 5 42 1% 1,867 2% 61,434 110,184 0.1% Tampa, FL 1 102 2% 1,280 1% 98,302 227,049 0.8% Total 22 4,612 100% $89,656 100% $136,257 200,434 1.0% States Properties Square Feet % of Total Cash ABR % of Total 5-Mile 2023 Average Household Income 5-Mile 2023 Total Population 2023-2028 Projected Population Annual Growth Georgia 4 1,098 24% $28,061 31% $158,112 220,379 1.0% Florida 10 798 17% 17,336 19% 89,674 179,339 0.6% Texas 3 885 19% 14,430 16% 141,885 224,973 0.8% North Carolina 2 1,008 22% 12,746 14% 154,397 177,708 0.8% Virginia 1 392 9% 8,863 10% 146,903 175,023 0.4% Arizona 1 222 5% 4,547 5% 143,944 314,629 0.4% New Mexico 1 210 5% 3,674 4% 68,911 50,072 5.9% Total 22 4,612 100% $89,656 100% $136,257 200,434 1.0% $ and square feet in thousands, except for average household income demographic information. Any differences are a result of rounding. Demographic information sourced from Esri. Market, state and portfolio averages weighted by the Annualized Cash Base Rent of each property. |
| © CTO Realty Growth, Inc. | ctoreit.com 36 Other Assets Investment Securities Shares & Operating Partnership Units Owned Value Per Share September 30, 2024 Estimated Value Annualized Dividend Per Share In-Place Annualized Dividend Income Alpine Income Property Trust 2,362 $18.20 $42,997 $1.12 $2,645 Structured Investments Type Origination Date Maturity Date Original Loan Amount Amount Outstanding Interest Rate Watters Creek at Montgomery Farm Preferred Investment April 2022 April 2025 30,000 30,000 9.00% Founders Square First Mortgage March 2023 March 2026 15,000 15,000 8.75% Hypoluxo First Mortgage March 2024 June 2025 5,638 5,638 11.00% Series A Preferred Investment Preferred Investment July 2024 July 2029 10,000 10,000 14.00% Rivana, Herndon, VA Mortgage Note September 2024 September 2026 43,818 43,818 11.00% Total Structured Investments $104,456 $104,456 10.39% $ in thousands, except for per share data any differences are a result of rounding. |
| © CTO Realty Growth, Inc. | ctoreit.com 37 2024 Guidance Low High Core FFO Per Diluted Share3 $1.83 − $1.87 AFFO Per Diluted Share3 $1.96 − $2.00 The Company’s estimated Core FFO per diluted share and AFFO per diluted share for 2024 is as follows: The Company’s 2024 guidance includes but is not limited to the following assumptions: Low High Same-Property NOI Growth1,2 4% − 6% General and Administrative Expenses $16.0 − $16.5 Weighted Average Diluted Shares Outstanding 25.3 − 25.3 Year-end 2024 Leased Occupancy2 96% − 97% Investments $300 − $350 Target Initial Investment Cash Yield 8.50% − 9.00% Dispositions $35 − $50 Target Disposition Cash Yield 8.50% − 8.75% $ and shares outstanding in millions, except per share data. 1. Includes the effects of bad debt expense, occupancy loss and costs associated with tenants in bankruptcy and/or tenant lease defaults. 2. Before potential impact from income producing acquisitions and dispositions. 3. See reconciliation of our 2024 Core FFO and AFFO guidance to Net Income Attributable to the Company, per diluted share, in our Earnings Release, as filed herein on page 11. |
| © CTO Realty Growth, Inc. | ctoreit.com 38 Contact Information & Research Coverage Contact Information Corporate Office Locations Investor Relations Transfer Agent New York Stock Exchange 369 N. New York Ave., Suite 201 Winter Park, FL 32789 1140 N. Williamson Blvd., Suite 140 Daytona Beach, FL 32114 ir@ctoreit.com Computershare Trust Company, N.A. (800) 368-5948 www.computershare.com Ticker Symbol: CTO Series A Preferred Ticker Symbol: CTO-PA www.ctoreit.com Research Analyst Coverage Institution Coverage Analyst Email Phone Alliance Global Partners Gaurav Mehta gmehta@allianceg.com (212) 624-2317 B. Riley John Massocca jmassocca@brileyfin.com (646) 885-5424 BTIG Michael Gorman mgorman@btig.com (212) 738-6138 Janney Rob Stevenson robstevenson@janney.com (646) 840-3217 Jones Research Jason Weaver jweaver@jonestrading.com (646) 454-2710 Lucid Capital Markets Craig Kucera ckucera@lucidcm.com (917) 890-4412 Raymond James RJ Milligan rjmilligan@raymondjames.com (727) 567-2585 |
| © CTO Realty Growth, Inc. | ctoreit.com 39 Safe Harbor Certain statements contained in this presentation (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. 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 presentation. The Company undertakes no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances. |
| © CTO Realty Growth, Inc. | ctoreit.com 40 Non-GAAP Financial Measures Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds From Operations (“AFFO”), Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma Adjusted EBITDA”), and Same-Property Net Operating Income (“Same-Property NOI”), each of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals. To derive Pro Forma Adjusted EBITDA, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities. Cash interest expense is also excluded from Pro Forma Adjusted EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities. |
| © CTO Realty Growth, Inc. | ctoreit.com 41 Non-GAAP Financial Measures (Continued) To derive Same-Property NOI, GAAP net income or loss attributable to the Company is adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, other non-recurring items such as termination fees, forfeitures of tenant security deposits, and certain adjustments to reconciliation estimates related to reimbursable revenue for recently acquired properties, and other non-cash income or expense. Interest expense, general and administrative expenses, investment and other income or loss, income tax benefit or expense, real estate operations revenues and direct cost of revenues, management fee income, and interest income from commercial loans and investments are also excluded from Same-Property NOI. GAAP net income or loss is further adjusted to remove the impact of properties that were not owned for the full current and prior year reporting periods presented. Cash rental income received under the leases pertaining to the Company’s assets that are presented as commercial loans and investments in accordance with GAAP is also used in lieu of the interest income equivalent. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that Core FFO and AFFO are additional useful supplemental measures for investors to consider because they will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma Adjusted EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. We use Same-Property NOI to compare the operating performance of our assets between periods. It is an accepted and important measurement used by management, investors and analysts because it includes all property-level revenues from the Company’s properties, less operating and maintenance expenses, real estate taxes and other property-specific expenses (“Net Operating Income” or “NOI”) of properties that have been owned and stabilized for the entire current and prior year reporting periods. Same-Property NOI attempts to eliminate differences due to the acquisition or disposition of properties during the particular period presented, and therefore provides a more comparable and consistent performance measure for the comparison of the Company’s properties. FFO, Core FFO, AFFO, Pro Forma Adjusted EBITDA, and Same-Property NOI may not be comparable to similarly titled measures employed by other companies. |
| © CTO Realty Growth, Inc. | ctoreit.com 42 Definitions & Terms References and terms used in this presentation that are in addition to terms defined in the Non-GAAP Financial Measures include: This presentation was published on October 24, 2024. All information is as of September 30, 2024, unless otherwise noted. Any calculation differences are assumed to be a result of rounding. “2024 Guidance” in this presentation is based on the 2024 Guidance provided in the Company’s Third Quarter 2024 Operating Results press release filed on October 24, 2024. “Alpine” or “PINE” refers to Alpine Income Property Trust, a publicly traded net lease REIT traded on the New York Stock Exchange under the ticker symbol PINE. “Annualized Base Rent”, “ABR” or “Rent” and the statistics based on ABR are calculated based on our current portfolio and represent straight-line rent calculated in accordance with GAAP. “Annualized Cash Base Rent”, “Cash ABR” and the statistics based on Cash ABR are calculated based on our current portfolio and represent the annualized cash base rent calculated in accordance with GAAP due from the tenants at a specific point in time. “Credit Rated” is a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners (NAIC) (together, the “Major Rating Agencies”). The Company defines an Investment Grade Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and Moody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. “Dividend” or “Dividends”, subject to the required dividends to maintain our qualification as a REIT, are set by the Board of Directors and declared on a quarterly basis and there can be no assurances as to the likelihood or number of dividends in the future. “Investment in Alpine Income Property Trust” or “Alpine Investment” or “PINE Ownership” is calculated based on the 2,362,475 common shares and partnership units CTO owns in PINE and is based on PINE’s closing stock price as of the referenced period on the respective slide. “Leased Occupancy” refers to space that is currently leased but for which rent payments have not yet commenced. “MSA” or “Metropolitan Statistical Area” is a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U.S. Office of Management and Budget. The names of the MSA have been shortened for ease of reference. “Net Debt” is calculated as our total long-term debt as presented on the face of our balance sheet; plus financing costs, net of accumulated amortization and unamortized convertible debt discount; less cash, restricted cash and cash equivalents. “Net Operating Income” or “NOI” is revenues from all income properties less operating expense, maintenance expense, real estate taxes and rent expense. “Total Enterprise Value” is calculated as the Company’s Total Common Shares Outstanding multiplied by the common stock price; plus the par value of the Series A perpetual preferred equity outstanding and Net Debt. |
