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SITE Centers (SITC) Provides Transaction Activity Update
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Amid the rebounding retail real-estate market, SITE Centers Corp. (SITC - Free Report) has provided an update on its transaction activities for fourth-quarter 2022 and from the beginning of 2023 through Jan 9, 2023.
Reflecting broader retail real-estate market concerns, shares of SITC lost 2.55% on Jan 10 normal trading session on the NYSE.
In fourth-quarter 2022, the company disposed of four shopping centers and one parcel at a wholly-owned shopping center for $166.3 million ($157.8 million at company’s share).
Highlighting SITC’s prudent capital-management practices, it used the proceeds to repurchase $28.8 million of common stock at an average price of $13.33 per share, acquire a convenience property worth $5.8 million and repay the outstanding balance on its revolving credit facility.
Further, subsequent to the end of 2022, the company purchased two additional convenience properties for $26.1 million.
Per David R. Lukes, president and CEO of SITC, “In the fourth quarter, we opportunistically sold a select group of assets and recycled the capital into share repurchases and Convenience acquisitions further strengthening SITE’s balance sheet, long-term growth rate and overall portfolio quality.”
SITE Centers has been following an aggressive capital-recycling program through which it is divesting slow-growth assets and redeploying the proceeds for the acquisitions of premium U.S. shopping centers. These centers are convenience-oriented properties that offer strong opportunities for rent growth and redevelopment activities.
Such match-funding initiatives relieve pressure off the company’s balance sheet while paving the way for top-line and cash-flow growth and adding value to the portfolio in the long term.
This retail REIT has a decent balance-sheet position with ample liquidity. As of Sep 30, 2022, it had $891 million of liquidity and an average pro-rata net debt to adjusted EBITDA of 5.3X.
It also enjoys investment-grade credit ratings of BBB-/Baa3/BBB with a stable outlook from S&P/ Moody's/ Fitch, respectively, which render it favorable access to the debt market. With strong financial footing and enough financial flexibility, it is well-placed to capitalize on long-term growth opportunities.
Nonetheless, given the conveniences of online shopping, rising e-commerce adoption is concerning for SITE Centers. Online retailing will likely remain a popular choice among customers, adversely impacting the market share for brick-and-mortar stores.
Also, stiff competition from industry peers and rising interest rates remain key concerns for the company.
Shares of this Zacks Rank #3 (Hold) company have gained 14.9% in the past three months, lower than the industry’s rally of 19.7%.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $1.92.
The Zacks Consensus Estimate for Stag Industrial’s 2022 FFO per share is pegged at $2.21.
The Zacks Consensus Estimate for National Retail Properties’ ongoing year’s FFO per share stands at $3.20.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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SITE Centers (SITC) Provides Transaction Activity Update
Amid the rebounding retail real-estate market, SITE Centers Corp. (SITC - Free Report) has provided an update on its transaction activities for fourth-quarter 2022 and from the beginning of 2023 through Jan 9, 2023.
Reflecting broader retail real-estate market concerns, shares of SITC lost 2.55% on Jan 10 normal trading session on the NYSE.
In fourth-quarter 2022, the company disposed of four shopping centers and one parcel at a wholly-owned shopping center for $166.3 million ($157.8 million at company’s share).
Highlighting SITC’s prudent capital-management practices, it used the proceeds to repurchase $28.8 million of common stock at an average price of $13.33 per share, acquire a convenience property worth $5.8 million and repay the outstanding balance on its revolving credit facility.
Further, subsequent to the end of 2022, the company purchased two additional convenience properties for $26.1 million.
Per David R. Lukes, president and CEO of SITC, “In the fourth quarter, we opportunistically sold a select group of assets and recycled the capital into share repurchases and Convenience acquisitions further strengthening SITE’s balance sheet, long-term growth rate and overall portfolio quality.”
SITE Centers has been following an aggressive capital-recycling program through which it is divesting slow-growth assets and redeploying the proceeds for the acquisitions of premium U.S. shopping centers. These centers are convenience-oriented properties that offer strong opportunities for rent growth and redevelopment activities.
Such match-funding initiatives relieve pressure off the company’s balance sheet while paving the way for top-line and cash-flow growth and adding value to the portfolio in the long term.
This retail REIT has a decent balance-sheet position with ample liquidity. As of Sep 30, 2022, it had $891 million of liquidity and an average pro-rata net debt to adjusted EBITDA of 5.3X.
It also enjoys investment-grade credit ratings of BBB-/Baa3/BBB with a stable outlook from S&P/ Moody's/ Fitch, respectively, which render it favorable access to the debt market. With strong financial footing and enough financial flexibility, it is well-placed to capitalize on long-term growth opportunities.
Nonetheless, given the conveniences of online shopping, rising e-commerce adoption is concerning for SITE Centers. Online retailing will likely remain a popular choice among customers, adversely impacting the market share for brick-and-mortar stores.
Also, stiff competition from industry peers and rising interest rates remain key concerns for the company.
Shares of this Zacks Rank #3 (Hold) company have gained 14.9% in the past three months, lower than the industry’s rally of 19.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) , Stag Industrial (STAG - Free Report) and National Retail Properties (NNN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $1.92.
The Zacks Consensus Estimate for Stag Industrial’s 2022 FFO per share is pegged at $2.21.
The Zacks Consensus Estimate for National Retail Properties’ ongoing year’s FFO per share stands at $3.20.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.