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SITE Centers Disposes of 11 Shopping Centers and Acquires 4
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In a recent update, SITE Centers Corp. (SITC - Free Report) has announced that from the beginning of the third quarter of 2024 through Aug. 29, 2024, it has sold 11 wholly-owned shopping centers for $552.7 million. This retail REIT also purchased four convenience properties for a gross price of $88 million. This included Crocker Commons in Cleveland, OH; Maple Corner in Nashville, TN; Village Plaza in Houston, TX; and Brookhaven Station in Atlanta, GA.
As previously announced, the company has successfully closed and funded a mortgage facility amounting to $530 million, which is secured by 23 properties. Additionally, it has repaid its unsecured term loan of $200 million, terminated its revolving credit facility of $950 million and executed a one-for-four reverse stock split of its common shares. Moreover, in August, the company redeemed all of its outstanding senior unsecured notes, resulting in no remaining unsecured debt.
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 offer strong opportunities for rent growth and redevelopment activities.
The Initiative Strengthens SITC’s Balance Sheet Position
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 healthy balance sheet position with ample liquidity. As of June 30, 2024, it had $2.1 billion of liquidity and an average pro-rata net debt to adjusted EBITDA of 3.4X and fixed charge coverage was 3.9X.
It also enjoys investment-grade credit ratings of BBB-/Baa3/BBB 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.
However, given the conveniences of online shopping, growing e-commerce adoption is concerning for SITE Centers. Potential tenant bankruptcies in the near term could affect its profitability and hurt occupancy. A high interest rate environment remain concern.
In the past six months, shares of this Zacks Rank #3 (Hold) company have gained 8.4%, outperforming the industry’s growth of 4.7%.
The Zacks Consensus Estimate for Brixmor Properties’ 2024 FFO per share has moved marginally northward over the past month to $2.13.
The Zacks Consensus Estimate for Tanger’s ongoing year’s FFO per share has been raised 1.5% upward over the past month to $2.09.
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 Disposes of 11 Shopping Centers and Acquires 4
In a recent update, SITE Centers Corp. (SITC - Free Report) has announced that from the beginning of the third quarter of 2024 through Aug. 29, 2024, it has sold 11 wholly-owned shopping centers for $552.7 million. This retail REIT also purchased four convenience properties for a gross price of $88 million. This included Crocker Commons in Cleveland, OH; Maple Corner in Nashville, TN; Village Plaza in Houston, TX; and Brookhaven Station in Atlanta, GA.
As previously announced, the company has successfully closed and funded a mortgage facility amounting to $530 million, which is secured by 23 properties. Additionally, it has repaid its unsecured term loan of $200 million, terminated its revolving credit facility of $950 million and executed a one-for-four reverse stock split of its common shares. Moreover, in August, the company redeemed all of its outstanding senior unsecured notes, resulting in no remaining unsecured debt.
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 offer strong opportunities for rent growth and redevelopment activities.
The Initiative Strengthens SITC’s Balance Sheet Position
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 healthy balance sheet position with ample liquidity. As of June 30, 2024, it had $2.1 billion of liquidity and an average pro-rata net debt to adjusted EBITDA of 3.4X and fixed charge coverage was 3.9X.
It also enjoys investment-grade credit ratings of BBB-/Baa3/BBB 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.
However, given the conveniences of online shopping, growing e-commerce adoption is concerning for SITE Centers. Potential tenant bankruptcies in the near term could affect its profitability and hurt occupancy. A high interest rate environment remain concern.
In the past six months, shares of this Zacks Rank #3 (Hold) company have gained 8.4%, outperforming the industry’s growth of 4.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the retail REIT sector are Brixmor Property Group (BRX - Free Report) and Tanger, Inc. (SKT - 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 Brixmor Properties’ 2024 FFO per share has moved marginally northward over the past month to $2.13.
The Zacks Consensus Estimate for Tanger’s ongoing year’s FFO per share has been raised 1.5% upward over the past month to $2.09.
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.