UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER: 001-40896
INVENTRUST PROPERTIES CORP.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
3025 Highland Parkway, Suite 350
Downers Grove, Illinois 60515
(Address of principal executive offices) (Zipcode)
34-2019608
(I.R.S. Employer Identification No.)
(855) 377-0510
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, $0.001 par value
IVT
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
Smaller reporting company
☐ 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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2023, the aggregate market value of the voting and non-voting common stock held by non-affiliates of InvenTrust Properties Corp.
was approximately $1.6 billion, based upon the closing price on the New York Stock Exchange for such equity on June 30, 2023.
As of February 1, 2024, there were 67,807,831 shares of the registrant's common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference certain information that will be contained in InvenTrust Properties Corp.'s Proxy Statement relating to its 2023
Annual Meeting of Stockholders, which InvenTrust Properties Corp. intends to file no later than 120 days after the end of its fiscal year ended
December 31, 2023, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K.
INVENTRUST PROPERTIES CORP.
TABLE OF CONTENTS
Forward-Looking Statements
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Item 3.
Properties
Legal Proceedings
Item 4. Mine Safety Disclosures
Part I
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Item 6.
Securities
Reserved
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Consolidated Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
Part III
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accounting Fees and Services
Item 15.
Item 16.
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
Part IV
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FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 10-K ("Annual Report"), other than purely historical information, are
"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
("Exchange Act"). These statements include statements about InvenTrust Properties Corp.'s (the "Company") plans, objectives,
strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future
events; and they involve known and unknown risks that are difficult to predict.
As a result, our actual financial results, performance, achievements, or prospects may differ materially from those expressed or
implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words
such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential,"
"continue," "likely," "will," "would," "illustrative," and "should" and variations of these terms and similar expressions, or the
negatives of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and
assumptions that, while we consider reasonable based on our knowledge and understanding of the business and industry, are
inherently uncertain. These statements are expressed in good faith and are not guarantees of future performance or results. Our
actual results could differ materially from those expressed in the forward-looking statements and stockholders should not rely
on forward-looking statements in making investment decisions.
Our operations are subject to a number of risks and uncertainties including, but not limited to:
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our ability to collect rent from tenants or to rent space on favorable terms or at all;
declaration of bankruptcy by our retail tenants;
the economic success and viability of our anchor retail tenants;
our ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any
retail properties acquired in the future and manage the risks associated with such retail properties;
our ability to manage the risks of expanding, developing or redeveloping our retail properties;
loss of members of our senior management team or other key personnel;
changes in the competitive environment in the leasing market and any other market in which we operate;
shifts in consumer retail shopping from brick and mortar stores to e-commerce;
the impact of leasing and capital expenditures to improve our retail properties to retain and attract tenants;
our ability to refinance or repay maturing debt or to obtain new financing on attractive terms;
future increases in interest rates;
rising inflation;
natural or man-made disasters, severe weather and climate-related events, such as earthquakes, tsunamis, tornadoes,
hurricanes, droughts, blizzards, hailstorms, floods, wildfires, mudslides, oil spills, nuclear incidents, and outbreaks of
pandemics or contagious diseases, or fear of such outbreaks;
our status as a real estate investment trust ("REIT") for federal tax purposes;
changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting
REITs; and
the risks described under Part I, Item 1A. - Risk Factors" and "Part II, Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations" ("MD&A"), or identified elsewhere in this report.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements set forth above. Forward-looking statements are only as of the date they are made; we do not undertake or
assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information,
future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent
required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will
make additional updates with respect to those or other forward-looking statements.
PART I
As used throughout this Annual Report, the terms "Company," "InvenTrust," "we," "us," or "our" mean InvenTrust Properties
Corp. and its wholly-owned subsidiaries, and, for periods presented prior to January 1, 2023, its unconsolidated joint venture
investment (as further described below). Unless otherwise noted, all dollar amounts and square feet are stated in thousands,
except per share and per square foot amounts. Any references to number of properties, square feet, and tenant and occupancy
data are unaudited.
Item 1. Business
General
On October 4, 2004, InvenTrust Properties Corp. was incorporated as Inland American Real Estate Trust, Inc., a Maryland
corporation, and elected to operate in a manner to be taxed as a REIT for federal tax purposes. The Company changed its name
to InvenTrust Properties Corp. in April 2015 and is focused on owning, leasing, redeveloping, acquiring and managing a multi-
tenant retail platform. On October 12, 2021, the Company's shares of common stock were listed and began trading on the New
York Stock Exchange ("NYSE") under the ticker symbol "IVT."
InvenTrust's wholly-owned and managed retail properties include grocery-anchored community and neighborhood centers and
power centers, including those classified as necessity-based. As of December 31, 2023, the Company owned 62 retail properties
with a total gross leasable area ("GLA") of approximately 10.3 million square feet.
The following table summarizes our retail portfolio as of December 31, 2023.
No. of properties
GLA (square feet)
Economic occupancy (a)
Leased occupancy (b)
ABR PSF (c)
As of December 31, 2023
62
10,324
93.3%
96.2%
$19.48
(a) Economic occupancy is defined as the percentage of occupied GLA divided by total GLA (excluding Specialty Leases) for which a tenant is obligated to
pay rent under the terms of its lease agreement as of the rent commencement date, regardless of the actual use or occupancy by that tenant of the area
being leased. Actual use may be less than economic occupancy. Specialty Leases represent leases of less than one year in duration for small shop space
and include any term length for common area space.
(b) Leased occupancy is defined as economic occupancy plus the percentage of signed but not yet commenced GLA divided by total GLA.
(c) Annualized Base Rent ("ABR") is computed as base rent for the period multiplied by twelve months. Base rent is inclusive of ground rent and any
abatement concessions, but excludes Specialty Lease rent. ABR per square foot ("PSF") is computed as ABR divided by the occupied square footage as of
the end of the period.
Joint Venture Acquisition
As of December 31, 2022, the Company owned a 55% interest in IAGM Retail Fund I, LLC ("IAGM"), an unconsolidated
retail joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). IAGM was formed on
April 17, 2013 for the purpose of acquiring, owning, managing, and disposing of retail properties and sharing in the profits and
losses from those retail properties and their activities. As of December 31, 2022, IAGM was the Company's sole joint venture
and was unconsolidated. On January 18, 2023, the Company acquired the four remaining retail properties from IAGM.
Throughout this Annual Report, where indicated as "Pro Rata," the Company has included the results from its ownership share
of its joint venture properties at 55% ("at share") when combined with the Company's wholly owned properties, defined as "Pro
Rata," except for property and lease count, as of and for the year ended December 31, 2022.
Business Strategy
InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and
manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a
grocery component. We pursue our business strategy by:
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Acquiring retail properties in Sun Belt markets;
Opportunistically disposing of retail properties;
1
• Maintaining a flexible capital structure; and
•
Enhancing our environmental, social and governance practices and standards.
Acquiring retail properties in Sun Belt markets. InvenTrust focuses on Sun Belt markets with favorable demographics,
including above average growth in population, employment, income and education levels. We believe these conditions create
favorable demand characteristics for grocery-anchored and necessity-based essential retail centers, which will position us to
capitalize on potential future rent increases while benefiting from sustained occupancy at our centers. Our strategically located
regional field offices are within a two-hour drive of over 95% of our properties which affords us the ability to respond to the
needs of our tenants and provides us with in-depth local market knowledge. We believe that our Sun Belt portfolio of high
quality grocery-anchored assets is a distinct differentiator for us in the marketplace.
Opportunistically disposing of retail properties. We continue to opportunistically dispose of properties where we believe they
no longer meet our investment criteria. These dispositions will allow the Company to re-deploy the proceeds in more attractive
opportunities in Sun Belt markets.
Maintaining a flexible capital structure. We believe our current capital structure provides us with the financial flexibility and
capacity to fund our current capital needs as well as future growth opportunities. We believe we have the liquidity necessary to
continue executing on our strategic and operational objectives while exhibiting focused and disciplined capital allocation. Our
flexible capital structure and ample liquidity will allow us to take advantage of future growth opportunities that meet our
investment criteria.
Enhancing our environmental, social and governance practices and standards. We continue to focus on environmental, social
and governance ("ESG") practices and standards across our platform. We believe we can enhance our communities, conserve
resources and foster a best-in-class working environment while growing long term stockholder value. We remain committed to
transparency in our investment strategy with a focus on operating efficiency, responding to evolving trends, and addressing the
needs of our tenants and communities by continuing to integrate environmental sustainability, social responsibility, and strong
governance practices throughout our organization. We believe our concentrated portfolio and focused strategy will allow us to
adapt to the evolving needs of stakeholders.
Competition
We compete with numerous companies and individuals engaged in the ownership, development, acquisition, and operation of
shopping centers in Sun Belt markets, resulting in competition for attracting and retaining tenants and acquiring and disposing
shopping centers.
Our commitment to Sun Belt markets and our strategically curated portfolio of predominantly necessity based grocery-anchored
shopping centers provides a number of competitive advantages, including increased concentrations in high growth Sun Belt
locations to capitalize on strong demographic trends, exposure to a strong operational footprint, and distinctive levels of Sun
Belt real estate experience and expertise. Our local market presence is supported by seven field offices staffed with operational
teams within two hours of over 95% of our shopping centers, which allows us to build deep real estate expertise and a strong
reputation with market participants and with our anchor and small shop tenants.
Our ample liquidity, and sector-low leverage, provide an additional competitive advantage of flexibility to transact. Our
concerted focus on Sun Belt markets provides us greater opportunity to carefully evaluate potential acquisitions.
Human Capital Management
Our employees are our greatest asset and the foundation for our success. Together, we focus on building an inclusive culture
where innovative thinking is valued, collaboration is essential, and communicating the "why" is a necessity. We are committed
to creating a corporate culture characterized by high levels of employee engagement, growth and development, and health and
wellness. We seek to attract and retain diverse and talented professionals who provide a wide range of opinions and experiences
to drive our business forward. As of December 31, 2023, we have 104 full-time employees.
We define racial diversity as employees who are African American or Black, Alaskan Native or Native American, Asian,
Hispanic or Latinx, and Native Hawaiian or Pacific Islander. We define gender diversity as employees who identify as women.
Overall diversity across our workforce is approximately 67%, including gender and racial/ethnic groups. Racial diversity across
our workforce is 19%. Women represent approximately 61% of our employees.
2
Our Human Capital strategy is focused on talent management. The basis for hiring, development, training, compensation and
advancement are qualifications, performance, skills and experience. We believe our employees are fairly compensated, without
regard to gender, race, and ethnicity. All of our employees are offered a comprehensive benefits package, including, but not
limited to, paid time off and parental leave, medical, dental and vision insurance, disability, life insurance, 401(k) matching,
tuition reimbursement, flexible Fridays and work from home flexibility.
Employee engagement is critical to our success. We believe in fostering a highly engaged inclusive environment which drives
growth and productivity. We believe that our heightened focus on employee development and health and wellness creates a
more engaged workforce. In 2023, 87% of our employees were highly engaged and we were named of one Chicago's Top
Workplaces by The Chicago Tribune for the second year in a row. We believe that the more engaged our employees are the
more likely productivity will increase and drive empowerment throughout the organization for our employees to act like
owners. Our hybrid work model provides an opportunity for employees to balance work and life whether they are in the office
or at home. We also host monthly events focused on employee education, health and wellness, engagement activities, and
giving back to our communities. Our events consist of company-wide executive led meetings to stay connected with our
employees, wellness competitions, food trucks, game days, happy hours, and charity events serving our communities. We are
proud that 100% of our employees participated in charitable events giving back to our communities in 2023. Our Flexible
Fridays program enables our employees to balance work and life focusing on mental health as well as giving back to our
communities through charitable endeavors.
We celebrate our employees' success through our Circle of Excellence awards. Our monthly, "On The Spot" award recognizes
employees who go above and beyond their job. Our annual awards, the "Rising Star" and "Standing Ovation" recognize new
employees and tenured employees who exhibit exceptional promise, ability, and our InvenTrust values. We monitor our
performance through employee engagement surveys and utilize the results to continually improve our organization.
Environment, Social and Governance
ESG is not new to InvenTrust. Since 2013, we have participated in compiling and reporting on ESG metrics with GRESB
(formerly "Global Real Estate Sustainability Benchmark"), an independent organization providing ESG performance data and
peer benchmarks for investors and organizations. We believe we can enhance our communities, conserve resources, and foster a
best-in-class working environment while growing long-term stockholder value. In 2023, we set energy, water, waste and
greenhouse gas reduction targets, continued progress towards our 5-year goals, and increased our GRESB score by five points
year over year.
We remain committed to transparency in our investment strategy with a focus on operating efficiency, responding to evolving
trends, and addressing the needs of our tenants and communities by continuing to integrate environmental sustainability, social
responsibility, and strong governance practices throughout our organization. For the avoidance of doubt, neither our 2022 ESG
Report nor any portion thereof is incorporated by reference into this Annual Report.
To date, compliance with federal, state and local environmental laws has not had a material adverse effect on our business,
assets, results of operations, financial condition and/or our ability to pay distributions. We do not believe that our existing retail
platform will require us to incur material expenditures to comply with these laws and regulations. However, we acknowledge
that ESG-related regulation, including environmental-related regulation and legislation, is evolving, and we cannot predict the
impact of unforeseen ESG contingencies or new or changed laws or regulations on our properties, operations, and financials.
Tax Status
We have elected and operate in a manner to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended (the "Code"), beginning with the tax year ended December 31, 2005. To qualify as a REIT, we are
generally required to distribute at least 90% of our REIT taxable income (subject to certain adjustments) to our stockholders
each year. As a REIT, we are entitled to a tax deduction for some or all of the dividends paid to stockholders. Accordingly, we
are generally not subject to federal income taxes as long as we currently distribute to stockholders an amount equal to or in
excess of our taxable income. If we fail to qualify as a REIT in any taxable year, without the benefit of certain relief provisions,
we will be subject to federal and state income tax on our taxable income at regular corporate tax rates. Even if we qualify for
taxation as a REIT, we may be subject to certain state and local taxes on our income, property or net worth and federal income
and excise taxes on our undistributed income.
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Our Website and Availability of SEC Reports and Other Information
The Company maintains a website at the following address: www.inventrustproperties.com. The information on the Company's
website is not incorporated by reference in this Annual Report or in any other report or document we file with the U.S.
Securities and Exchange Commission ("SEC"), and any references to our website are intended to be inactive textual references
only. In addition, we reference certain sources included on our website, including our ESG Report, in this Annual Report, and
none of these are incorporated by reference in, or are otherwise to be regarded as part of, this Annual Report.
We make available on or through our website certain reports and amendments to those reports we file with or furnish to the
SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. These include our annual reports on Form 10-K, our quarterly
reports on Form 10-Q, and our current reports on Form 8-K. We make this information available on our website free of charge
as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The SEC also
maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC. The address of the site is http://www.sec.gov.
Investors and others should note that InvenTrust routinely announces material information to investors and the marketplace
using SEC filings, press releases, public conference calls, webcasts and the InvenTrust investor relations website. We also
intend to use certain social media channels as a means of disclosing information about us and our business to our colleagues,
customers, investors and the public (e.g., the InvenTrust X account (twitter.com/inventrustprop); and the InvenTrust LinkedIn
account (linkedin.com/company/inventrustproperties). The information posted on social media channels is not incorporated by
reference in this Annual Report or in any other report or document we file with the SEC. While not all of the information that
the Company posts to the InvenTrust investor relations website or to social media accounts is of a material nature, some
information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested
in InvenTrust to review the information that it shares on the Company's investor relations website at inventrustproperties.com/
investor-relations, and regularly follow the Company's social media accounts.
Item 1A. Risk Factors
You should carefully consider each of the following risks described below and all of the other information in this Annual Report
in evaluating us. Our business, financial condition, cash flows, results of operations and/or ability to pay distributions to our
stockholders could be materially adversely affected by any of these risks. This Annual Report also contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this
Annual Report.
Risk Factors Related to Our Business and Strategy
Economic, political and market conditions could negatively impact our business, results of operations and financial
condition
Our business is affected by economic, political and market challenges experienced by the U.S. or global economies or the real
estate industry as a whole; by the regional or local economic conditions in the markets in which our assets are located, including
any dislocations in the credit markets; or by competitive business market conditions experienced by us. These conditions may
materially affect our value and the performance of our assets and our ability to sell assets, as well as our ability to make
principal and interest payments on, or refinance, outstanding debt when due.
An economic downturn could result in defaults by retail tenants, which could have an adverse impact on our business,
financial condition, result of operations, and ability to make distributions to our stockholders.
An economic downturn could have an adverse impact on the retail industry generally. Rising inflation could also adversely
impact consumer behavior and increase our and our tenant's operating costs. As a result, the retail industry could face further
reductions in sales revenues and increased bankruptcies. Adverse economic conditions may result in an increase in distressed or
bankrupt retail companies, which in turn would result in an increase in defaults by tenants at our commercial properties. Such
conditions may also affect shadow anchor retailers in some of our centers, which we cannot control. Although we do not
generate revenue from shadow anchor retailers, their presence drives traffic to some of our centers. Additionally, continued
slow or negative economic growth could hinder new entrants into the retail market, which may make it difficult for us to fully
lease our real properties. Tenant defaults and decreased demand for retail space would have an adverse impact on the value of
our retail properties and our results of operations.
4
A consumer shift in retail shopping from brick and mortar stores to e-commerce may have an adverse impact on our
revenues and cash flow.
The majority of national retailers operating brick and mortar stores have made e-commerce sales an important part of their
business model. The shift to e-commerce sales may adversely impact their sales for brick and mortar stores, causing those
retailers to adjust the size or number of retail locations in the future. This shift could adversely impact our occupancy and rental
rates, which would, in turn, adversely impact our revenues and cash flows.
Our retail portfolio is subject to geographic concentration, which exposes us to changing economic and retail market
conditions that may reduce our revenues and cash flows.
As of December 31, 2023, approximately 41.7% of the total annualized base rental income in our retail portfolio was generated
by properties located in Texas, with 17.5%, 11.2%, 9.8%, and 3.2% of our total annualized base rental income generated by
properties in Austin, Houston, Dallas-Fort Worth-Arlington, and San Antonio metropolitan areas, respectively. An oversupply
of retail properties without corresponding increases in demand in any of these markets could have a material adverse effect on
our financial condition, our results of operations and our ability to pay distributions.
Our success depends on the success and continued presence of our anchor tenants.
Our properties are largely dependent on the operational success of their anchor tenants (those occupying 10,000 square feet or
more). Anchor tenants occupy significant amounts of square footage, pay a significant portion of the total rents at a property
and contribute to the success of other tenants by drawing consumers to a property. Our net income could be adversely affected
by the loss of revenues in the event a significant tenant becomes bankrupt or insolvent, experiences a downturn in its business,
materially defaults on its leases, does not renew its leases as they expire, or renews at a lower rental rate. Any of these events
could result in a reduction or cessation in rental payments to us, which would adversely affect our financial condition and
results of operations. In addition, if a significant tenant vacates a property or terminates a lease, co-tenancy clauses may allow
other tenants to modify or abate their minimum rent, reduce their share or the amount of payments for common area operating
expenses and property taxes, or terminate their rent or lease obligations. Co-tenancy clauses have several variants and may
allow a tenant to pay reduced levels of rent until a certain number of tenants open their stores within the same property.
If our small shop tenants (tenants occupying less than 10,000 square feet) are not successful and, consequently, terminate
their leases, our cash flow, financial condition and results of operations could be adversely affected.
As of December 31, 2023, approximately 58.0% of our total annualized base rental income is generated by our small shop
tenants. Our small shop tenants may be more vulnerable to negative economic conditions as they generally have more limited
resources than our anchor tenants. If a significant number of our small shop tenants experience financial difficulties or are
unable to remain open, our cash flow, financial condition and result of operations could be adversely affected.
Our financial condition may be impacted by our ability to timely re-lease our space.
Our business and financial condition depend on the financial stability of our tenants and our ability to lease our space. Certain
economic conditions, or center specific conditions may adversely affect one or more of our tenants. Among the factors that
could impact our financial conditions are the following:
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inability to renew, lease vacant space or re-let space as leases expire;
restrictions related to re-leasing space;
co-tenancy constraints which limit our ability to lease to certain operators or reduce our revenues at our properties if
co-tenancy clauses are exercised and;
competition for tenancy of our leases
As of December 31, 2023, economic occupancy and leased occupancy of our retail portfolio was 93.3% and 96.2%,
respectively. As of December 31, 2023, leases representing approximately 5.0% and 12.1% of our retail portfolio GLA were
scheduled to expire in 2024 and 2025, respectively. We cannot assure our stockholders that leases will be renewed or that our
properties will be re-leased on terms equal to or better than the current terms, or at all. We also may not be able to lease space
which is currently not occupied on acceptable terms and conditions, if at all. In addition, some of our tenants have leases that
include early termination provisions that permit the lessee to terminate all or a portion of its lease with us after a specified date
or upon the occurrence of certain events with little or no liability to us. We may be required to offer substantial rent abatements,
tenant improvements, early termination rights or below-market renewal options to retain these tenants or attract new ones.
Portions of our assets may remain vacant for extended periods of time. If the rental rates for our assets decrease, our existing
tenants do not renew their leases or we do not re-lease a significant portion of our available space and space for which leases
will expire, our financial condition, cash flows and results of operations could be adversely affected.
5
Many of our costs and expenses associated with operating our properties may remain constant or increase, even if our lease
income decreases.
Certain costs and expenses associated with our operating our properties, such as real estate taxes, insurance, utilities and
common area expenses, generally do not decrease in the event of reduced occupancy or rental rates, non-payment of rents by
tenants, general economic downturns, pandemics or other similar circumstances. In fact, in some cases, such as real estate taxes
and insurance, they may actually increase despite such events. As such, we may not be able to lower the operating expenses of
our properties sufficiently to fully offset such circumstances and may not be able to fully recoup these costs from our tenants. In
such cases, our cash flows, operating results and financial performance may be adversely impacted.
Pandemics, epidemics or other health crises may have a negative effect on our and our tenants' businesses, financial
condition, results of operations, cash flows, and liquidity.
Our business, and the businesses of our tenants, could be materially and adversely affected by the risks, or the public perception
of the risks, related to a pandemic, epidemic, or other health crisis, especially if there is a negative impact to customers'
willingness or ability to frequent our tenants' businesses.
Such crises could cause significant disruptions to the United States and global economy and contribute to significant volatility
and negative pressure in financial markets. Government responses, including quarantines, restrictions on travel, mandatory
closures of businesses, or other restrictions, as well as changes in consumer behavior, could negatively impact our tenants and
their ability to operate their businesses, which could impact our ability to collect on current or past due rent payments or fully
recover amounts due under the terms of a lease agreement in the event of a default by a tenant.
The unpredictable nature of pandemics, epidemics, and other health crises precludes any prediction as to one’s ultimate adverse
impact. A worsening of the economic, political and social environment as a result presents material risks and uncertainties with
respect to our and our tenants’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy
debt service obligations.
Risk Factors Related to Real Estate Investments
There are inherent risks with investments in retail real estate
Investments in real estate are subject to varying degrees of risk. Among the factors that could have a negative impact on our
assets and the value of an investment in us are the following:
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relative illiquidity of real estate;
competition amongst other owners of commercial real estate for investments in similar markets;
expansion into new markets that we are not as familiar with;
changing market demographics;
risks associated with the possibility that cost increases will outpace revenue increases and that in the event of an
economic slowdown, the high proportion of fixed costs will make it difficult to reduce costs to the extent required to
offset declining revenues;
changes in tax laws and property taxes, or an increase in the assessed valuation of an asset for real estate tax purposes;
adverse changes in the federal, state or local laws and regulations applicable to us, including those affecting zoning,
fuel and energy consumption, water and environmental restrictions, and the related costs of compliance;
an inability to finance real estate assets on favorable terms, if at all;
significant capital expenditures may be required to improve our properties to attract tenants;
the ongoing need for owner-funded capital for improvements and expenditures to maintain or upgrade assets, make
tenant improvements and pay leasing commissions;
fluctuations in real estate values or potential impairments in the value of our assets;
natural disasters, such as earthquakes, droughts, hurricanes, floods, extreme storms and weather or other under-insured
or uninsured losses, which may result from or be exacerbated by climate change, and man-made events, such as
terrorist attacks or events of sabotage; and
changes in interest rates and availability, and cost and terms of financing.
6
We face risks with the expansion, development, and re-development of properties.
We seek to expand, develop and re-develop some of our existing properties and such activity is subject to various risks. We
may not be successful in identifying and pursuing expansion, development and re-development opportunities. In addition, like
newly-acquired properties, expanded, developed and re-developed properties may not perform as well as expected. Risks
include the following:
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we may be unable to lease developments to full occupancy on a timely basis;
the occupancy rates and rents of a completed project may not be sufficient to make the project profitable;
actual costs of a project may exceed original estimates, possibly making the project unprofitable;
delays in the development or construction process may increase our costs;
we may not be able to obtain, or may experience delays in obtaining necessary zoning, land use, building, occupancy
and other required governmental permits and authorizations;
we may abandon a development project and lose our investment;
the size of our development pipeline may strain our labor or capital capacity to complete developments within targeted
timelines and may reduce our investment returns;
a reduction in the demand for new retail space may reduce our future development activities, which in turn may reduce
our net operating income; and
changes in the level of future development activity may adversely impact our results from operations by reducing the
amount of certain internal overhead costs that may be capitalized.
Inflationary pressures, rising interest rates, supply chain disruptions, and labor shortages may exacerbate certain of these risks.
If we fail to reinvest in our properties or maintain their attractiveness to retailers and consumers, if our capital improvements are
not successful, or if retailers or consumers perceive that shopping at other venues (including e-commerce) is more convenient,
cost-effective, or otherwise more compelling, our financial condition, cash flows, and results of operations could be adversely
affected.
Our ongoing strategy depends, in part, upon completing future acquisitions and dispositions, and we may not be successful
in identifying attractive acquisition opportunities and consummating these transactions.
As part of our strategy, we intend to tailor and grow our retail platform. We cannot assure our stockholders that we will be able
to identify opportunities or complete transactions on commercially reasonable terms or at all, or that we will actually realize any
anticipated benefits from such acquisitions or investments. There may be high barriers to entry in many key markets and
scarcity of available acquisition and investment opportunities in desirable locations. We face significant competition for
attractive investment opportunities from an indeterminate number of other real estate investors, including investors with
significant capital resources such as domestic and foreign corporations and financial institutions, sovereign wealth funds, public
and private REITs, private institutional investment funds, domestic and foreign high-net-worth individuals, life insurance
companies and pension funds. As a result of competition, we may be unable to acquire additional properties as we desire or the
purchase price may be significantly elevated. Similarly, we cannot assure our stockholders that we will be able to obtain
financing for acquisitions or investments on attractive terms or at all, or that the ability to obtain financing will not be restricted
by the terms of our credit facility or other indebtedness we may incur.
Additionally, we regularly review our business to identify properties or other assets that we believe may not benefit us as much
as properties in other markets or with different characteristics. One of our strategies is to selectively dispose of retail properties
and use sale proceeds to fund our growth in markets and with properties that will enhance our retail platform. We cannot assure
our stockholders that we will be able to consummate any such sales on commercially reasonable terms or at all, or that we will
actually realize any anticipated benefits from such sales. Additionally, we may be unable to successfully identify attractive and
suitable replacement assets even if we are successful in completing such dispositions. We may face delays in reinvesting net
sales proceeds in new assets, which would impact the return we earn on our assets. Dispositions of real estate assets can be
particularly difficult in a challenging economic environment when uncertainties exist about the impact of e-commerce on
retailers and when financing alternatives are limited for potential buyers. Our inability to sell assets, or to sell such assets at
attractive prices, could have an adverse impact on our ability to realize proceeds for reinvestment. In addition, even if we are
successful in consummating sales of selected retail properties, such dispositions may result in losses.
Any such acquisitions, investments or dispositions could also demand significant attention from management that would
otherwise be available for our regular business operations, which could harm our business.
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We may obtain only limited warranties when we purchase a property and would have only limited recourse if our due
diligence did not identify issues that could decrease the value of our property after the purchase.
The seller of a property often sells the property to us in its "as is" condition on a "where is" basis and "with all faults," without
any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only
limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The
purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the
property, as well as the loss of rental income from that property, and may also require additional investment to make the
property suitable and competitive.
Our assets may be subject to impairment charges that may materially and adversely affect our financial results.
Economic and other conditions may adversely impact the valuation of our assets, resulting in impairment charges that could
have a material adverse effect on our results of operations. On a regular basis, we evaluate our assets for impairments based on
various factors, including changes in the holding periods, projected cash flows of such assets and market conditions.
If we determine that an impairment has occurred, we would be required to make an adjustment to the net carrying value of the
asset, which could have a material adverse effect on our results of operations in the accounting period in which the adjustment
is made. Furthermore, changes in estimated future cash flows due to a change in our plans, policies, or views of market and
economic conditions could result in the recognition of additional impairment losses for already impaired assets, which, under
the applicable accounting guidance, could be substantial and could materially adversely affect our results of operations. We
have incurred and we may incur future impairment charges, which could be material.
Risks Factors Related to the Environment Affecting Our Properties
Geographic concentration makes our business more vulnerable to natural disasters, severe weather, and climate change.
Natural disasters and severe weather such as earthquakes, wildfires, mudslides, droughts, tornadoes, hurricanes, blizzards,
hailstorms or floods may result in significant damage to our properties, decrease demand for certain properties, disrupt
operations at our properties, increase the costs associated with maintaining or insuring our properties, and adversely affect both
the value of our properties and the ability of our tenants and operators to make their scheduled rent payments to us. The extent
of our casualty losses and loss in operating income in connection with such events is a function of the severity of the event and
the total amount of exposure in the affected area. These losses may not be insured or insurable at commercially reasonable
rates. When we have a geographic concentration, a single catastrophe or destructive weather event affecting a region may have
a significant negative effect on our financial condition, results of operations, and cash flows. As a result, our operating and
financial results may vary significantly from one period to the next. We also are exposed to the risk of an increased need for the
maintenance and repair of our buildings due to inclement or extreme weather.
Moreover, climate change may adversely impact our properties directly and may lead to additional compliance obligations and
costs, including insurance premiums, taxes and fees. Changes in federal, state and local legislation and regulation on climate
change could result in increased operating costs (for example, increased utility costs) and/or increased capital expenditures to
improve the energy efficiency of our existing properties (for example, increased costs associated with meeting electric vehicle
charging mandates) and could also require us to spend more on our new properties without a corresponding increase in revenue
and could increase our exposure to new physical risks and liabilities.
Risk Factors Related to Funding Strategies and Capital Structure
Our debt financing may adversely affect our business and financial condition.
Our existing and future debt may subject us to many risks, including the risks that:
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our cash flow from operations will be insufficient to make required payments of principal and interest;
our debt may increase our vulnerability to adverse economic and industry conditions;
we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby
reducing cash available for distribution to our stockholders, funds available for operations and capital expenditures,
future business opportunities or other purposes;
the terms of any refinancing may not be as favorable as the terms of the debt being refinanced; and
the terms of our debt may limit our ability to make distributions to our stockholders and therefore adversely affect the
market price of our stock.
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If we do not have sufficient funds to repay our debt at maturity, it may be necessary to refinance this debt through additional
debt financing, or private or public offerings of debt or equity securities. Adverse economic conditions could cause the terms on
which we borrow or refinance to be unfavorable. If we are unable to refinance our debt on acceptable terms, we may be forced
to dispose of assets on disadvantageous terms or at times which may not permit us to receive an attractive return on our
investments, potentially resulting in losses adversely affecting cash flow from operating activities.
Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition.
Our debt agreements contain various financial and operating covenants, including, among other things, certain coverage ratios
and limitations on our ability to incur secured and unsecured debt. The breach of any of these covenants, if not cured within any
applicable cure period, could result in a default and acceleration of certain of our indebtedness. If any of our indebtedness is
accelerated prior to maturity, we may not be able to repay or refinance such indebtedness on favorable terms, or at all, which
could adversely affect our financial condition, operating results and cash flows.
Increases in interest rates would cause our borrowing costs to rise and negatively impact our results of operations.
As fixed-rate debt matures, we may not be able to borrow at rates equal to or lower than the rates on the expiring debt. In
addition, if rising interest rates cause us to need additional capital to repay indebtedness, we may be forced to sell one or more
of our properties or investments in real estate at times that may not permit us to realize the return on the investments we would
have otherwise realized.
Increases in interest rates would increase our interest expense on any variable rate debt, as well as any debt that must be
refinanced at higher interest rates at the time of maturity. Our future earnings and cash flows could be adversely affected due to
the increased requirement to service our debt and could reduce the amount we are able to distribute to our stockholders.
Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not
yield the economic benefits we anticipate, which may adversely affect us.
We manage our exposure to interest rate volatility by using interest rate hedging arrangements. These arrangements involve
risk, such as the risk that counterparties may fail to honor their obligations under these arrangements, and that these
arrangements may not be effective in reducing our exposure to interest rate changes. There can be no assurance that our hedging
arrangements will qualify for hedge accounting or that our hedging activities will have the desired beneficial impact on our
results of operations. Should we desire to terminate a hedging arrangement, there may be significant costs and cash
requirements involved to fulfill our obligations under the hedging arrangement. In addition, failure to effectively hedge against
interest rate changes may adversely affect our results of operations.
We may issue additional equity or debt securities in the future in order to raise capital. Additional issuances of equity
securities could dilute the investment of our current stockholders.
Issuing additional equity securities to finance future developments and acquisitions instead of incurring additional debt could
dilute the interests of our existing stockholders. Our ability to execute our business and growth plan depends on our access to an
appropriate blend of capital, which could include a line of credit and other forms of secured and unsecured debt, equity
financing, or joint ventures.
Stockholders do not have preemptive rights with respect to any shares issued by us in the future. Our charter authorizes our
Board, without stockholder approval, to amend the charter from time to time to increase or decrease the aggregate number of
shares of stock or the number of shares of stock of any class or series that the Company has authority to issue. Stockholders are
not entitled to vote on whether or not we issue additional shares.
Risk Factors Related to the Market Price for Our Securities
Changes in economic and market conditions may adversely affect the market price of our securities.
The market price of our equity securities may fluctuate significantly in response to many factors, many of which are out of our
control, including:
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actual or anticipated variations in our operating results, liquidity or financial condition;
changes in our earnings estimates or failure to meet earnings estimates;
changes in our funds from operations;
increases in market interest rates that drive purchasers of our stock to demand a higher dividend yield;
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changes in market valuations of similar companies;
adverse market reaction to any additional debt we incur in the future;
additions or departures of key management personnel;
the general reputations of REITs and the attractiveness of equity securities in comparison to other equity securities
including securities issued by other real estate based companies;
our underlying asset value;
strategic actions by the Company or our competitors, such as acquisitions, dispositions or restructurings;
fluctuations in the stock price and operating results of the Company’s competitors;
the passage of legislations or other regulatory developments that may adversely affect the Company or the REIT
industry, including but not limited to Section 1031 of the Code;
investor confidence in the stock and bond markets generally;
changes in tax laws or accounting principles;
publication of research reports about us or the real estate industry in general and recommendations by financial
analysts or actions taken by rating agencies with respect to our securities or those of other REITs;
future equity issuances or the perception that such equity issuances may occur;
failure to maintain our status as a REIT;
actions by institutional stockholders or by corporate governance rating companies;
increased investor focus on sustainability-related risks, including climate change;
changes in our dividend payments; and
general market and economic conditions, including factors unrelated to the Company’s operating performance.
These factors may cause the market price of our securities to decline, regardless of our financial condition, results of operations,
business or prospects. It is impossible to ensure that the market price of our securities, including our common stock, will not fall
in the future. A decrease in the market price of our common stock may reduce our ability to raise additional equity in the public
markets. Selling common stock at a decreased market price would have a dilutive impact on existing stockholders.
There is no assurance that we will continue to pay dividends.
Our ability to continue to pay dividends will depend on a number of factors, including, among others, the following:
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our financial condition and results of future operations;
the terms of our loan covenants; and
our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates.
If we do not maintain the dividend on our common stock, it may have an adverse effect on the market price of our common
stock and other securities.
Funding distributions from sources other than cash flow from operating activities may negatively impact our ability to
sustain or pay future distributions.
If our cash flow from operating activities is not sufficient to fully fund the payment of distributions, the level of our
distributions may not be sustainable.
We may pay distributions from sources other than cash flow from operations or funds from operations, including funding such
distributions from external financing sources, which may not be available at commercially attractive terms. Furthermore, in the
event that we are unable to fund future distributions from our cash flows from operating activities, the value of our
stockholders' shares may be materially adversely affected.
For the year ended December 31, 2023, distributions were paid from cash flow from operations and proceeds from the sales of
properties.
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Risks Factors Related to Our Organization and Corporate Structure
Our charter permits our Board to issue preferred stock on terms that may subordinate the rights of the holders of our
current common stock or discourage a third party from acquiring us.
Our Board may classify or reclassify any unissued shares of common or preferred stock into other classes or series of stock and
establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications, and terms or conditions of redemption of the stock and may amend our charter from time to time to
increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to
issue without stockholder approval. Thus, our Board could authorize us to issue shares of preferred stock with terms and
conditions that could subordinate the rights of the holders of our common stock or shares of preferred stock or common stock
that could have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction
such as a merger, tender offer or sale of all or substantially all of our assets, that might provide a premium price for holders of
our common stock.
Our Board or a committee of our Board may change our investment policies without stockholder approval, which could alter
the nature of our stockholders' investment.
Our investment policies may change over time. The methods of implementing our investment policies may also vary, as new
investment techniques are developed. Our investment policies, the methods for implementing them, and our other objectives,
policies and procedures may be altered by our Board or a committee of our Board without the approval of our stockholders. As
a result, the nature of our stockholders' investment could change without their consent. A change in our investment strategy
may, among other things, increase our exposure to interest rate risk, default risk and real property market fluctuations, all of
which could materially and adversely affect our ability to achieve our investment objectives.
Risks Factors Related to Corporate Matters
We are subject to litigation that could negatively impact our cash flow, financial condition and results of operations.
We are a defendant from time to time in lawsuits and regulatory proceedings relating to our business. Due to the inherent
uncertainties of litigation and regulatory proceedings, we may not be able to accurately predict the ultimate outcome of any
such litigation or proceedings. A significant unfavorable outcome could negatively impact our cash flow, financial condition
and results of operations.
Uninsured losses or premiums for insurance coverage may adversely affect a stockholder's returns.
We maintain insurance coverage with third-party carriers who provide a portion of the coverage of potential losses, including
wind, flood, named windstorm, earthquake, fire, and other property-related perils. We currently self-insure a portion of our
commercial insurance deductible risk through our captive insurance company. To the extent that our captive insurance company
is unable to bear that risk, we may be required to fund additional capital to our captive insurance company or we may be
required to bear that loss. As a result, our operating results may be adversely affected.
Catastrophic losses, including but not limited to, windstorms, earthquakes, floods, and foreign terrorist activities may not be
insurable or may not be economically insurable. Even when insurable, these policies may have high deductibles and/or high
premiums. Lenders may require such insurance. Our failure to obtain such insurance could constitute a default under loan
agreements, and/or our lenders may force us to obtain such insurance at unfavorable rates, which could materially and adversely
affect our profitability.
In the event of a substantial loss, our insurance coverage may not be sufficient to cover the full current market value or
replacement cost of our lost investment. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all
or a portion of the capital we have invested in an asset, as well as the anticipated future revenue from the asset. In that event, we
might nevertheless remain obligated for any mortgage debt or other financial obligations related to the asset. Inflation, changes
in building codes and ordinances, environmental considerations and other factors might require us to come out of pocket to
replace or renovate an asset after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we
receive might be inadequate to restore our economic position on the damaged or destroyed property, which could materially and
adversely affect our profitability.
In addition, insurance risks associated with potential terrorist acts could sharply increase the premiums we pay for coverage
against property and casualty claims.
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We could incur material costs related to government regulation and litigation with respect to environmental matters, which
could materially and adversely affect our revenues and profitability.
Under various federal, state, and local laws, an owner or manager of real property may be liable for the costs to assess and
remediate the presence of hazardous substances on the property, which in our case generally arise from former dry cleaners, gas
stations, asbestos usage, storage tanks, air emissions from emergency generators, storm water and wastewater discharges, lead-
based pain, mold and mildew, waste management, and historic land use practices. These laws often impose liability without
regard to whether the owner knew of, or was responsible for, the presence of hazardous substances. The presence of, or the
failure to properly address the presence of, hazardous substances may adversely affect our ability to sell or lease the property or
borrow using the property as collateral. We can provide no assurance that we are aware of all potential environmental liabilities
or their ultimate cost to address; that our properties will not be affected by tenants or nearby properties or other unrelated third
parties; and that future uses or conditions, or changes in environmental laws and regulations, or their interpretation, will not
result in additional material environmental liabilities to us.
The discovery of material environmental liabilities at our assets could subject us to unanticipated significant costs, which could
significantly reduce or eliminate our profitability and the cash available for distribution to our stockholders.
Moreover, compliance with ESG-related laws, regulations, expectations or reporting requirements may result in increased
compliance costs, as well as additional scrutiny that could heighten all of the risks associated with environmental, social and
sustainability matters. For example, the SEC continues to make moves towards issuing rules relating to climate risk disclosures,
human capital management and other ESG matters and other regulatory bodies, including state governments and stock
exchanges, have issued new laws or regulations relating to board structure, and increased ESG regulations and reporting
requirements are likely to continue. If we fail to comply with new laws, regulations, expectations or reporting requirements, or
if we are perceived as failing, our reputation and business could be adversely impacted. The occurrence of any of the foregoing
could have an adverse effect on the price of the Company's stock and the Company's business, financial condition and results of
operations, including increased development costs, capital expenditures and operating expenses.
If we lose or are unable to obtain and retain key personnel, our ability to implement our business strategies could be delayed
or hindered.
We believe that our future success depends, in large part, on our ability to retain and hire highly-skilled managerial and
operating personnel. Competition for persons with managerial and operational skills is intense, and we cannot assure our
stockholders that we will be successful in retaining or attracting skilled personnel. If we lose or are unable to obtain the services
of our executive officers and other key personnel, or we are unable to establish or maintain the necessary strategic relationships,
our ability to implement our business strategy could be delayed or hindered.
Corporate responsibility related to environmental, social and governance factors, may impose additional costs and expose us
to new risks.
We, as well as our investors, are focused on corporate responsibility, specifically related to environmental, social and
governance factors. Third-party providers of corporate responsibility ratings and reports on companies have increased to meet
growing investor demand for measurement of corporate responsibility and performance. Although the Company makes ESG
disclosures and undertakes sustainability and diversity initiatives, there is no assurance as to how we will rate according to the
metrics. Additionally, the measurement parameters may change over time. We may face reputational damage in the event our
corporate responsibility procedures or standards do not meet the standards set by various constituencies. In addition, our
competitors may receive more favorable ratings. The occurrence of any of the foregoing could have an adverse impact on our
business, financial condition and results of operations, including increased capital expenditures and operating expenses.
We are increasingly dependent on information technology ("IT"), and potential cyber-attacks, security problems, or other
disruptions present risks.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our
information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include an
intruder gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information. As our
reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced.
Although we make efforts to maintain the security and integrity of our IT networks and related systems, and we have
implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security
efforts and measures will be effective or that attempted security breaches would not be successful or damaging. While we
maintain some of our own critical IT systems, we also depend on third parties to provide important IT services relating to
several key business functions. Furthermore, the security measures employed by third-party service providers may prove to be
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ineffective at preventing breaches of their systems. Moreover, cyber incidents perpetrated against our tenants, including
unauthorized access to customers' credit card data and other confidential information, could diminish consumer confidence and
consumer spending and negatively impact our business and reputation.
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly
sophisticated in using techniques and tools – including generative and other artificial intelligence – that circumvent security
controls, evade detection and remove forensic evidence. As a result, we, or our tenants, may be unable to detect, investigate,
remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our or their IT networks and
related systems, confidential information or business. Our and our tenants' primary risks that could directly result from the
occurrence of a cyber incident include operational interruption, damage to our relationships with our tenants or damage to our
tenants' relationships with their customers, as applicable, and private data exposure. Our and our tenants' financial results and
reputation may be negatively impacted by such an incident.
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or
procedures, will be fully implemented, complied with or effective in protecting our systems and information. Further, we
cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing
insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
A failure of our IT infrastructure could adversely impact our business and operations.
We rely upon the capacity, reliability and security of our IT infrastructure and our ability to expand and continually update this
infrastructure in response to changing needs of our business. We continue to face the challenge of integrating new systems and
hardware into our operations. If there are technological impediments, unforeseen complications, errors or breakdowns in the IT
infrastructure, the disruptions could have an adverse effect on our business and financial condition.
Risk Factors Relating to Our Qualification as a REIT
Our failure to qualify as a REIT would have serious adverse consequences to our stockholders.
We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements, for which there is limited
judicial and administrative interpretation, however, are highly technical and complex. Therefore, we cannot guarantee that we
have qualified or will qualify as a REIT in the future. The determination that we are a REIT requires an analysis of various
factual matters that may not be totally within our control. To qualify as a REIT, our assets must be substantially comprised of
real estate assets as defined in the Code, and related guidance and our gross income must generally come from rental and other
real estate or passive related sources that are itemized in the REIT tax laws. We are also required to distribute to security
holders at least 90% of our REIT taxable income excluding net capital gains.
If we fail to qualify as a REIT, we would be subject to U.S. federal income tax at regular corporate rates and would have to pay
significant income taxes unless the Internal Revenue Service (“IRS”) granted us relief under certain statutory provisions. In
addition, we would remain disqualified from taxation as a REIT for four years following the year in which we failed to qualify
as a REIT. We would therefore have less money available for investments or for distributions to security holders and would no
longer be required to make distributions to security holders. This would likely have a significant negative impact on the value
of our securities.
We have a share ownership limit for REIT tax purposes.
In order to continue to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, beneficially or
constructively, more than 50% in value of our issued and outstanding stock at any time during the last half of a taxable year. To
facilitate maintenance of our REIT qualification, our Charter, prohibits ownership by any single stockholder of more than 9.8%
percent of the lesser of the number or value of any outstanding class of common. Our Board may not grant an exemption from
these restrictions to any proposed stockholder whose ownership in excess of the 9.8% stock ownership limit that would result in
our failing to qualify as a REIT. This ownership limit may delay or prevent a transaction or change in control that could affect
our stockholder’s ability to realize a premium over the then prevailing market price for their shares, it could also restrict our
stockholders' ability to acquire or transfer certain amounts of our common stock.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality,
integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a
cybersecurity incident response plan.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework
("NIST CSF"). This does not imply that we meet any particular technical standards, specifications, or requirements, only that
we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares
common methodologies, reporting channels and governance processes that apply across the enterprise risk management
program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program includes:
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risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products,
services, and our broader enterprise IT environment;
a team responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our
response to cybersecurity incidents;
the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security
controls;
cybersecurity awareness training of our employees, incident response personnel, and senior management;
a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
a risk management process for essential third-party service providers, suppliers, and vendors, as identified by
management.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that
have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face
risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business
strategy, results of operations, and/or financial condition.
Cybersecurity Governance
Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the
"Committee") oversight of cybersecurity and other information technology risks. The Committee oversees management's
implementation of our cybersecurity risk management program.
The Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the
Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also
receives briefings from management on our cybersecurity risk management program. Board members receive presentations on
cybersecurity topics from our Vice President of Information Technology ("VP IT") or external experts as part of the Board's
continuing education on topics that impact public companies.
Our management team, including the VP IT, is responsible for assessing and managing our material risks from cybersecurity
threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises our retained
external cybersecurity consultants. Our management team has experience with implementing IT organizational policies and
procedures, working in multiple platform environments, and overseeing corporate networking and hardware framework.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through
various means, which may include briefings from our internal team; threat intelligence and other information obtained from
governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by
security tools deployed in our IT environment.
14
Item 2. Properties
As of December 31, 2023 and 2022, InvenTrust's wholly-owned and managed retail properties include grocery-anchored
community and neighborhood centers and power centers, including those classified as necessity-based. For the year ended
December 31, 2022, we have included results from the properties previously owned by our 55% ownership interest in IAGM at
share when combined with our wholly-owned properties, defined as "Pro Rata Combined Retail Portfolio."
The following table summarizes our retail portfolio, on a wholly-owned, IAGM, and pro-rata combined basis, as of
December 31, 2023 and 2022.
No. of properties
GLA (square feet)
Economic occupancy
Leased occupancy
ABR PSF
Wholly-Owned
Retail Properties
IAGM
Retail Properties
Pro Rata Combined
Retail Portfolio
2023
62
10,324
93.3%
96.2%
$19.48
2022
58
9,171
94.2%
96.2%
$19.26
2023
—
—
—%
—%
$—
2022
4
1,125
90.2%
93.6%
$16.22
2023
62
10,324
93.3%
96.2%
$19.48
2022
62
9,790
93.9%
96.1%
$19.08
The following table represents the geographical diversity of our retail portfolio by ABR as of December 31, 2023.
Market
Austin-Round Rock, TX
Houston-Sugar Land-Baytown, TX
Miami-Fort Lauderdale-Miami Beach, FL
Dallas-Fort Worth-Arlington, TX
Atlanta Metro Area, GA
Raleigh-Cary-Durham, NC
So. California - Los Angeles, CA
Charlotte-Gastonia-Concord, NC
Orlando-Kissimmee, FL
Tampa-St. Petersburg, FL
Washington D.C/Richmond Metro Area
San Antonio, TX
So. California - San Diego, CA
So. California - Inland Empire, CA
Cape Coral-Fort Myers, FL
Total
No. of
Properties
ABR
ABR PSF
ABR as
% of Total
GLA
GLA as
% of Total
32,625
8 $
20,908
6
18,895
3
18,325
7
18,023
9
13,318
5
11,247
3
9,492
4
9,026
4
8,614
3
8,494
3
5,993
2
5,752
2
5,116
2
1
574
62 $ 186,402
$16.74
16.39
23.06
20.02
20.73
20.09
20.94
20.00
24.24
13.26
26.78
25.62
26.04
24.21
9.68
$19.48
17.5 %
11.2 %
10.1 %
9.8 %
9.7 %
7.2 %
6.0 %
5.1 %
4.8 %
4.6 %
4.6 %
3.2 %
3.1 %
2.8 %
0.3 %
100 %
2,056
1,409
859
939
995
688
579
515
378
753
358
261
225
246
63
10,324
19.9 %
13.6 %
8.3 %
9.1 %
9.6 %
6.7 %
5.6 %
5.0 %
3.7 %
7.3 %
3.5 %
2.5 %
2.2 %
2.4 %
0.6 %
100 %
15
The following table presents information regarding the top 10 tenants of our retail portfolio by ABR as of December 31, 2023.
Parent Name
Kroger
Publix Super Markets, Inc.
TJX Companies
Albertson's
H.E.B.
Amazon, Inc.
BC Partners
Best Buy
Apollo Global
Management, Inc.
Ulta Beauty Inc.
Tenant Name/Count
Kroger 7 / Kroger Gas 1 / Harris Teeter 4 /
Ralphs 3
Publix 11 / Publix Liquor 3
Marshalls 7 / HomeGoods 5 / TJ Maxx 2
Safeway 1 / Tom Thumb 2 / Market Street 2 /
Albertsons 1
H.E.B. 4 / H.E.B. Staff Office 1
Whole Foods Market 5
Petsmart 7
Michael's 7
No. of
Leases
ABR
% of Total
ABR
GLA
% of Total
Occ.GLA
15 $ 9,676
5.2 %
14
14
6
5
5
7
4
7
6,204
4,872
4,303
4,220
2,701
2,436
2,270
2,052
3.3 %
2.6 %
2.3 %
2.3 %
1.4 %
1.3 %
1.2 %
1.1 %
864
541
397
365
447
194
151
138
161
8.4 %
5.2 %
3.8 %
3.5 %
4.3 %
1.9 %
1.5 %
1.3 %
1.6 %
8
2,028
85 $ 40,762
1.1 %
21.8 %
83
3,341
0.8 %
32.3 %
The following table presents the lease expirations of our retail portfolio as of December 31, 2023. This table does not include
expirations of signed but not yet commenced leases, nor does it assume that unexercised contractual lease renewal or extension
options contained in our leases will, in fact, be exercised.
Lease
Expiration Year
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Thereafter
Other (b)
Totals
No. of
Expiring
Leases
108
170
216
266
227
153
80
75
90
61
42
10
1,498
GLA of
Expiring Leases
479
1,170
958
1,887
1,054
1,127
383
504
549
386
1,100
34
9,631
Percent of
Total GLA of
Expiring Leases
ABR of
Expiring Leases
10,811
20,178
22,433
38,897
25,602
22,457
9,980
10,563
12,673
9,959
15,048
1,052
199,653
5.0 % $
12.1 %
9.9 %
19.6 %
10.9 %
11.7 %
4.0 %
5.2 %
5.7 %
4.0 %
11.5 %
0.4 %
100 % $
Percent of
Total ABR
Expiring
ABR PSF (a)
5.4 %
10.1 %
11.2 %
19.5 %
12.8 %
11.2 %
5.0 %
5.3 %
6.3 %
5.0 %
7.7 %
0.5 %
100 %
$22.57
17.25
23.42
20.61
24.29
19.93
26.06
20.96
23.08
25.80
13.68
30.94
$20.73
(a) Expiring ABR PSF reflects ABR PSF at the time of lease expiration.
(b) Other lease expirations include the GLA, ABR and ABR PSF of month-to-month leases.
Our retail business is neither highly dependent on specific retailers nor subject to lease roll-over concentration. We believe this
minimizes our risk of significant revenue variances over time.
Certain of our properties are encumbered by mortgages, totaling $168.5 million as of December 31, 2023. Additional detail
about our retail properties can be found on Schedule III – Real Estate and Accumulated Depreciation.
Item 3. Legal Proceedings
We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While
the resolution of these matters cannot be predicted with certainty, we believe, based on currently available information, that the
final outcome of such matters will not have a material adverse effect on our financial condition, results of operations, or
liquidity.
Item 4. Mine Safety Disclosures
Not applicable.
16
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
Market Information
Our common stock trades on the NYSE under the ticker symbol "IVT". As of February 1, 2024, there were 21,964 holders of
record of shares of our outstanding common stock.
In order to comply with certain requirements related to our qualification as a REIT, our charter, subject to certain exceptions,
contains restrictions on the number of shares of our common stock that a person may own. Our charter provides that no person
may beneficially or constructively own more than 9.8% in value or in number of shares, whichever is more restrictive, of the
outstanding shares of any class or series of our capital stock.
Issuer Purchases of Equity Securities
Share Repurchase Program
On February 23, 2022, we established a share repurchase program (the "SRP") of up to $150.0 million of our outstanding shares
of common stock. The SRP may be suspended or discontinued at any time, and does not obligate us to repurchase any dollar
amount or particular amount of shares. As of December 31, 2023, no common stock has been repurchased under the SRP.
Stock-Based Compensation Plans
During the year ended December 31, 2023, certain of the Company's employees surrendered shares of common stock to satisfy
tax withholding obligations associated with the vesting of shares of common stock issued under the InvenTrust Properties Corp.
2015 Incentive Award Plan ("Incentive Award Plan") and the purchase of shares of common stock at a discount under the
Employee Stock Purchase Plan (the "ESPP").
The following table summarizes all share repurchases during the fourth quarter of 2023:
Period
October 1 - October 31, 2023
November 1 - November 30, 2023
December 1 - December 31, 2023
Total No. of
Shares Purchased (a)
Average Price
Paid per Share
— $
— $
39,901 $
—
—
25.73
Total No. of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Approx. Dollar Value of
Shares that May Yet Be
Purchased Under the
Plans or Programs
— $
— $
— $
150,000
150,000
150,000
(a) Consists of shares of common stock surrendered to the Company to satisfy tax withholding obligations.
Distributions
We have been paying cash distributions since October 2005. Our quarterly distributions are paid one quarter in arrears. Any
future determination to pay distributions will be at the discretion of our Board and will depend on our financial condition,
capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board
deems relevant. We currently have capacity and intend to continue to pay a quarterly distribution, subject to Board approval.
During the year ended December 31, 2023 and 2022, we declared and paid cash distributions of $57.5 million and $55.3 million
respectively. For the distribution of $0.2155 declared on December 28, 2023 and paid on January 15, 2024, $0.1030 of the
distribution is reported for the tax year 2023 and included in the tax characterization percentages in the table below.
The tax characterization of our distributions declared for the years ended December 31, 2023 and 2022 was as follows:
Common Stock:
Ordinary distribution
Other forms of distributions
Capital gain distributions (a)
Total distributions per share of common stock
2023
78.50%
—%
21.50%
100.00%
2022
93.20%
6.80%
—%
100.00%
(a) Of the Total Capital Gain Distribution, 0% is excluded under Reg. 1.1061-4(b)(7). The remaining 100% is a Three Year Amount under
Reg. 1.1061-6(c).
17
Stock Performance Graph
The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the
SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange
Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or
otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically
incorporate it by reference into such filing.
The following graph depicts the total cumulative stockholder return of the Company’s common stock from October 12, 2021,
the first day of trading of our common stock on the NYSE, through December 31, 2023, relative to the performance of the
FTSE National Association of Real Estate Investment Trusts Equity REITs Index (the "FTSE NAREIT Equity Index"), the
FTSE National Association of Real Estate Investment Trusts Equity Shopping Centers Index (the "FTSE NAREIT Shopping
Centers Index"), and the Standard and Poor’s 500 Stock Index (S&P 500 Index). The graph assumes an initial investment of
$100.00 at the first NYSE trade price of $23.61 on October 12, 2021 and that all dividends paid by companies included in these
indices have been reinvested. The performance shown in the graph below is not intended to forecast or be indicative of future
stock price performance.
Ticker / Index
IVT
FTSE NAREIT Equity Index
FTSE NAREIT Shopping Centers Index
S&P 500 Index
10/12/2021
$100.00
100.00
100.00
100.00
12/31/2021
$116.32
112.75
107.87
109.88
12/31/2022
$104.34
85.28
94.34
89.98
12/31/2023
$115.87
96.99
105.70
113.63
Recent Sales of Unregistered Securities
None.
Item 6. Reserved
18
DollarsComparison of Cumulative Total ReturnInvenTrust Properties Corp.FTSE NAREIT Equity IndexFTSE NAREIT Shopping Centers IndexS&P 500 Index10/12/202112/31/202112/31/202212/31/202370.0080.0090.00100.00110.00120.00130.00140.00 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis relates to the operations of the Company for the years ended December 31, 2023 and
2022 and its financial position as of December 31, 2023 and 2022. Discussion of 2021 items and year-to-year comparisons
between 2022 and 2021 that are not included in this Annual Report can be found in "Part II, Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended
December 31, 2022. The following discussion and analysis should be read in conjunction with our consolidated financial
statements and the related notes included in this Annual Report. This discussion contains forward-looking statements about our
business. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual
results could differ materially because of factors discussed in "Forward-Looking Statements" and "Part I, Item 1A. Risk
Factors" contained in this Annual Report and in our other reports that we file from time to time with the SEC.
Executive Summary
InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and
manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a
grocery component. We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically
disposing of retail properties, maintaining a flexible capital structure, and enhancing our environmental, social and governance
practices and standards.
Current Strategy and Outlook
InvenTrust focuses on Sun Belt markets with favorable demographics, including above average growth in population,
employment, income and education levels. We believe these conditions create favorable demand characteristics for grocery-
anchored and necessity-based essential retail centers, which will position us to capitalize on potential future rent increases while
benefiting from sustained occupancy at our centers. Our strategically located regional field offices are within a two-hour drive
of over 95% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth
local market knowledge. We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct
differentiator for us in the marketplace.
Evaluation of Financial Condition and Operating Results
In addition to measures of operating performance determined in accordance with U.S generally accepted accounting principles
("GAAP"), management evaluates our financial condition and operating performance by focusing on the following financial
and non-financial indicators, discussed in further detail herein:
•
•
•
•
•
•
•
•
•
Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP measures;
NAREIT Funds From Operations ("NAREIT FFO") Applicable to Common Shares and Dilutive Securities, a
supplemental non-GAAP measure;
Core FFO Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;
Economic and leased occupancy and rental rates;
Leasing activity and lease rollover;
Operating expense levels and trends;
General and administrative expense levels and trends;
Debt maturities and leverage ratios; and
Liquidity levels.
19
Recent Developments
Joint Venture Acquisition and IAGM Dispositions
On January 18, 2023, we acquired the four remaining retail properties from IAGM for an aggregate purchase price of $222.3
million by acquiring 100% of the membership interests in each of IAGM's wholly owned subsidiaries. Subsequent to the
transaction, IAGM proportionately distributed substantially all net proceeds from the sale, of which the Company's share was
approximately $71.4 million. On December 15, 2023, IAGM was fully liquidated.
During the year ended December 31, 2023, IAGM disposed of the following properties:
Date
January 18, 2023
January 18, 2023
January 18, 2023
January 18, 2023
Total
Property
Bay Colony
Blackhawk Town Center
Cyfair Town Center
Stables Town Center
Metropolitan Area
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Square Feet
Gross
Disposition Price (a)
Gain on Sale
416 $
127
433
148
1,124 $
79,100 $
26,300
79,200
37,000
221,600 $
22,327
12,632
4,713
5,536
45,208
(a) Disposition price and square feet for the joint venture disposition activity are reflected at 100%.
Acquisitions and Mortgage Assumptions
During the year ended December 31, 2023, we acquired the following properties:
Date
January 18, 2023
January 18, 2023
January 18, 2023
January 18, 2023
June 2, 2023
Total
Property
Bay Colony (a)
Blackhawk Town Center (a)
Cyfair Town Center (a)
Stables Town Center (a)
The Shoppes at Davis Lake
Grocer Anchor
HEB
HEB
Kroger
Kroger
Harris Teeter
Metropolitan Area
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Charlotte, NC
(a) We acquired these properties from our joint venture, IAGM.
Dispositions
During the year ended December 31, 2023, we disposed of the following properties:
Square
Feet
Gross
Acquisition
Price
Assumption of
Mortgage
Debt
416 $
127
433
148
91
1,215 $
79,100 $
26,300
79,200
37,000
22,400
244,000 $
41,969
13,008
30,880
6,611
—
92,468
Date
June 20, 2023
August 25, 2023
Total
Property
Shops at the Galleria (a)
Trowbridge Crossing
Metropolitan Area
Austin, TX
Atlanta, GA
Square Feet
Gross
Disposition Price
Gain on Sale
N/A $
63
63 $
1,692 $
11,450
13,142 $
984
1,707
2,691
(a) This disposition was related to the completion of a partial condemnation at one retail property.
Debt
On February 6, 2023, the Company extinguished the $13.7 million mortgage payable secured by Renaissance Center with its
available liquidity.
On October 17, 2023, the Company extended the maturity of its $92.5 million cross-collateralized mortgage debt maturing in
2023 by exercising one of its two 12-month extension options. The maturity date of the mortgage debt is now November 2,
2024. On December 22, 2023, the Company partially paid down the mortgage debt by $20.0 million, resulting in the release of
Blackhawk Town Center from collateralization and an outstanding balance of $72.5 million as of December 31, 2023.
ATM Program
During the quarter ended December 31, 2023, the Company raised $5.4 million of net proceeds, after $0.1 million in
commissions, under its at-the-market equity offering program (the "ATM Program"), through the issuance of 208,040 shares of
common stock at a weighted average price of $26.13 per share. As of December 31, 2023, $244.6 million of common stock
remains available for issuance under the ATM Program.
20
Our Retail Portfolio
As of December 31, 2023 and 2022, our wholly-owned and managed retail properties include grocery-anchored community and
neighborhood centers and power centers, including those classified as necessity-based. For the year ended December 31, 2022,
we have included results from IAGM properties at share when combined with our wholly-owned properties.
The following table summarizes our retail portfolio, on a wholly-owned, IAGM, and pro rata combined basis, as of
December 31, 2023 and 2022.
Wholly-Owned
Retail Properties
IAGM
Retail Properties
Pro Rata Combined
Retail Portfolio
2023
62
10,324
93.3%
96.2%
$19.48
2022
58
9,171
94.2%
96.2%
$19.26
2023
—
—
—%
—%
$—
2022
4
1,125
90.2%
93.6%
$16.22
2023
62
10,324
93.3%
96.2%
$19.48
2022
62
9,790
93.9%
96.1%
$19.08
No. of properties
GLA (square feet)
Economic occupancy
Leased occupancy
ABR PSF
Summary by Center Type
Our retail properties consist of community and neighborhood centers and power centers.
•
•
Community and neighborhood centers are generally open-air and designed for tenants that offer a wide array of
merchandise and services, including groceries, soft goods and convenience-oriented offerings. Our community centers
contain large anchor stores and a significant presence of national retail tenants. Our neighborhood centers are generally
smaller open-air centers with a grocery store anchor and/or drugstore and other small service-type retailers.
Power centers are generally larger and consist of several anchors, such as discount department stores, off-price stores,
specialty grocers and warehouse clubs. Typically, the number of specialty tenants is limited and most are national or
regional in scope.
The following tables summarize our retail portfolio, by center type, as of December 31, 2023 and 2022.
Community and neighborhood centers
No. of properties
GLA (square feet)
Economic occupancy
Leased occupancy
ABR PSF
Power centers
No. of properties
GLA (square feet)
Economic occupancy
Leased occupancy
ABR PSF
Wholly-Owned
Retail Properties
IAGM
Retail Properties
Pro Rata Combined
Retail Portfolio
2023
50
6,800
94.8%
97.1%
$20.22
2022
46
5,647
95.0%
96.9%
$20.36
2023
—
—
—%
—%
$—
2022
4
1,125
90.2%
93.6%
$16.22
2023
50
6,800
94.8%
97.1%
$20.22
2022
50
6,266
94.5%
96.6%
$19.98
Wholly-Owned
Retail Properties
IAGM
Retail Properties
Pro Rata Combined
Retail Portfolio
2023
12
3,524
90.2%
94.2%
$18.00
2022
12
3,524
92.9%
95.1%
$17.45
2023
—
—
—%
—%
$—
2022
—
—
—%
—%
$—
2023
12
3,524
90.2%
94.2%
$18.00
2022
12
3,524
92.9%
95.1%
$17.45
21
Same Property Summary
Properties classified as same property were owned for the entirety of both periods presented ("Same Properties"). The following
table summarizes the Same Properties of our retail portfolio for the years ended December 31, 2023 and 2022.
No. of properties
GLA (square feet)
Economic occupancy
Leased occupancy
ABR PSF
Leasing Activity
Year ended December 31
2022
2023
51
51
8,029
8,029
94.1%
93.4%
96.3%
96.3%
$19.54
$20.15
The following tables summarize the activity for leases that were executed during the year ended December 31, 2023, compared
with expiring or expired leases for the same or previous tenant for renewals, and the same unit for new leases at the 62
properties in our retail portfolio. The Company's retail portfolio had GLA totaling 893 thousand square feet expiring during the
year ended December 31, 2023, of which 802 thousand square feet was re-leased. This achieved a retention rate of
approximately 90.0%.
No. of Leases
Executed
GLA SF
(in thousands)
New
Contractual
Rent
($PSF)(b)
Prior
Contractual
Rent
($PSF)(b)
% Change
over Prior
Lease Rent
(b)
Weighted
Average
Lease Term
(Years)
Tenant
Improvement
Allowance
($PSF)
Lease
Commissions
($PSF)
All tenants
Comparable
Renewal Leases (a)
Comparable New
Leases (a)
Non-Comparable
Renewal and New
Leases
Total
190
32
77
299
827
147
444
1,418
$22.94
$21.39
7.2%
$24.80
$19.80
25.3%
$21.64
$23.23
N/A
$21.15
N/A
9.8%
Anchor tenants (leases ten thousand square feet and over)
Comparable
Renewal Leases (a)
Comparable New
Leases (a)
Non-Comparable
Renewal and New
Leases
Total
13
3
8
24
409
85
248
742
$12.47
$11.62
7.3%
$17.50
$12.94
35.2%
$13.25
$13.34
N/A
$11.85
N/A
12.6%
Small shop tenants (leases under ten thousand square feet)
Comparable
Renewal Leases (a)
Comparable New
Leases (a)
Non-Comparable
Renewal and New
Leases
Total
177
29
69
275
418
62
196
676
$33.21
$30.97
7.2%
$34.86
$29.10
19.8%
$32.31
$33.43
N/A
$30.73
N/A
8.8%
5.2
10.3
6.7
6.2
5.0
10.6
5.0
5.6
5.3
9.9
9.0
6.8
$0.49
$0.03
$27.82
$11.92
$14.03
$7.56
$6.83
$3.39
$—
$27.00
$1.21
$3.49
$—
$9.97
$2.15
$1.86
$0.98
$0.06
$28.95
$14.61
$30.34
$12.04
$12.78
$5.08
(a) Comparable leases are leases that meet all of the following criteria: terms greater than or equal to one year, unit was vacant less than one year
prior to executed lease, square footage of unit remains unchanged or within 10% of prior unit square footage, and has a rent structure consistent
with the previous tenant.
(b) Non-comparable leases are not included in totals.
22
Results of Operations
Comparison of results for the years ended December 31, 2023 and 2022
We generate substantially all of our earnings from property operations. Since January 1, 2022, we have acquired eleven retail
properties and disposed of four retail properties.
The following table presents the changes in our income for the years ended December 31, 2023 and 2022.
Income
Lease income, net
Other property income
Other fee income
Total income
2023
Year ended December 31
2022
Increase (Decrease)
$
$
257,146 $
1,450
80
258,676 $
232,980 $
1,161
2,566
236,707 $
24,166
289
(2,486)
21,969
Lease income, net increased $24.2 million as a result of increases from properties acquired of $31.5 million, decreases from
properties disposed of $9.1 million, and the following activity related to our Same Properties:
•
•
•
•
$5.3 million of increased minimum rent attributable to increased ABR PSF and favorable lease spreads, and
$0.3 million of increased common area maintenance and real estate tax recoveries, partially offset by:
$2.4 million of decreased amortization of market lease intangibles and straight-line rent adjustments, and
$1.4 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections
from our cash basis tenants in 2022 pertaining to prior period rent charges.
Other fee income decreased $2.5 million as a result of the Company acquiring six retail properties from IAGM since January 1,
2022.
The following table presents the changes in our operating expenses for the years ended December 31, 2023 and 2022.
Operating expenses
Depreciation and amortization
Property operating
Real estate taxes
General and administrative
Total operating expenses
2023
Year ended December 31
2022
Increase (Decrease)
$
$
113,430 $
42,832
34,809
31,797
222,868 $
94,952 $
40,239
32,925
33,342
201,458 $
18,478
2,593
1,884
(1,545)
21,410
Depreciation and amortization increased $18.5 million as a result of:
•
•
•
$23.1 million of increases from properties acquired, partially offset by:
$2.9 million of decreases from properties disposed, and
$1.7 million of decreased in-place lease intangible amortization from our Same Properties.
Property operating expenses increased $2.6 million as a result of:
•
•
•
$5.4 million of increases from properties acquired, partially offset by:
$1.2 million of decreased pre-leasing costs from our Same Properties, and
$1.6 million of decreases from properties disposed.
Real estate taxes increased $1.9 million as a result of:
•
•
•
$4.0 million of increases from properties acquired, partially offset by:
$0.4 million of decreases from our Same Properties, and
$1.7 million of decreases from properties disposed.
23
General and administrative expenses decreased $1.5 million as a result of:
•
•
•
$2.1 million of decreased non-compensation costs, and
$1.7 million of decreased other compensation costs, partially offset by:
$2.3 million of increased stock-based compensation costs.
The following table presents the changes in our other income and expenses for the years ended December 31, 2023 and 2022.
Other income (expense)
Interest expense, net
Loss on extinguishment of debt
Gain on sale of investment properties
Equity in (losses) earnings of unconsolidated entities
Other income and expense, net
Total other (expense) income, net
Interest expense, net
2023
Year ended December 31
2022
Change, net
$
$
(38,138) $
(15)
2,691
(557)
5,480
(30,539) $
(26,777) $
(181)
38,249
3,663
2,030
16,984 $
(11,361)
166
(35,558)
(4,220)
3,450
(47,523)
Interest expense, net, increased $11.4 million primarily as a result of:
•
•
•
•
•
•
the private placement of our senior notes in August 2022, generating increased interest expense of $7.8 million,
increased interest rates on our corporate term loans generating increased interest expense of $2.6 million,
aggregate assumption of mortgages of $172.8 million since January 1, 2022, generating increased interest expense of
$3.0 million, and
increased amortization of debt issuance costs of $1.3 million, partially offset by:
decreased balances on our corporate line of credit resulting in decreased interest expense of $1.3 million, and
aggregate reduction of mortgage payable of $90.3 million since January 1, 2022, generating decreased interest expense
of $2.0 million.
Loss on extinguishment of debt
During the year ended December 31, 2023, we recognized an insignificant loss on the extinguishment of total mortgages
payable of $33.7 million. During the year ended December 31, 2022, we recognized an aggregate loss of $0.2 million on the
extinguishment of total mortgages payable of $75.6 million.
Gain on sale of investment properties
During the year ended December 31, 2023, we recognized a gain of $1.0 million on the completion of a partial condemnation at
one retail property and a gain of $1.7 million on the sale of one retail property. During the year ended December 31, 2022, we
recognized a gain of $38.2 million on the sale of three retail properties.
Equity in (losses) earnings of unconsolidated entities
Equity in (losses) earnings of unconsolidated entities decreased $4.2 million primarily as a result of the Company acquiring six
retail properties from IAGM since January 1, 2022.
Other income and expense, net
Other income and expense, net increased $3.5 million primarily as a result of increased interest income earned on cash and cash
equivalents and non-recurring income from non-operating activities.
24
Net Operating Income
We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses,
depreciation and amortization, other income and expense, net, gains (losses) from sales of properties, gains (losses) on
extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income
and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and
straight-line rent adjustments ("GAAP Rent Adjustments"). We bifurcate NOI into Same Property NOI and NOI from other
investment properties based on whether the retail properties meet our Same Property criteria. NOI from other investment
properties includes adjustments for the Company's captive insurance company.
We believe the supplemental non-GAAP financial measures of NOI, same property NOI, and NOI from other investment
properties provide added comparability across periods when evaluating our financial condition and operating performance that
is not readily apparent from "Operating income" or "Net income" in accordance with GAAP.
Comparison of Same Property results for the years ended December 31, 2023 and 2022
A total of 51 wholly-owned retail properties met our Same Property criteria for the years ended December 31, 2023 and 2022.
The following table presents the reconciliation of net income, the most directly comparable GAAP measure, to NOI and Same
Property NOI for the years ended December 31, 2023 and 2022:
Net income
Adjustments to reconcile to non-GAAP metrics:
Other income and expense, net
Equity in losses (earnings) of unconsolidated entities
Interest expense, net
Loss on extinguishment of debt
Gain on sale of investment properties
Depreciation and amortization
General and administrative
Other fee income
Adjustments to NOI (a)
NOI
NOI from other investment properties
Same Property NOI
2023
Year ended December 31
2022
Change, net
$
5,269 $
52,233 $
(46,964)
(5,480)
557
38,138
15
(2,691)
113,430
31,797
(80)
(7,528)
173,427
(31,303)
142,124 $
(2,030)
(3,663)
26,777
181
(38,249)
94,952
33,342
(2,566)
(9,743)
151,234
(15,691)
135,543 $
(3,450)
4,220
11,361
(166)
35,558
18,478
(1,545)
2,486
2,215
22,193
(15,612)
6,581
$
(a) Adjustments to NOI include termination fee income and expense and GAAP Rent Adjustments.
25
Comparison of the components of Same Property NOI for the years ended December 31, 2023 and 2022
Lease income, net
Other property income
Property operating expenses
Real estate taxes
Same Property NOI
Year ended December 31
2022
2023
Change
$
$
203,231 $
1,212
204,443
33,841
28,478
62,319
142,124 $
198,963 $
1,127
200,090
35,695
28,852
64,547
135,543 $
4,268
85
4,353
(1,854)
(374)
(2,228)
6,581
Variance
2.1%
7.5%
2.2%
(5.2)%
(1.3)%
(3.5)%
4.9%
Same Property NOI increased by $6.6 million, or 4.9%, when comparing the year ended December 31, 2023 to the same period
in 2022, and was primarily a result of:
•
•
•
•
$5.3 million of increased minimum rent attributable to increased ABR PSF and favorable lease spreads,
$1.7 million of increased recoveries in excess of recoverable operating expenses, primarily attributable to leases with
fixed recovery terms, and
$1.0 million of decreased non-recoverable pre-leasing costs, partially offset by:
$1.4 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections
from our cash basis tenants in 2022 pertaining to prior period rent charges.
Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a widely
accepted non-GAAP financial measure of operating performance known as Funds From Operations ("NAREIT FFO"). Our
NAREIT FFO is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of
properties, plus depreciation and amortization and impairment charges on depreciable real property. Adjustments for IAGM are
calculated to reflect our proportionate share of the joint venture's funds from operations on the same basis.
In calculating NAREIT FFO, impairment charges of depreciable real estate assets are added back even though the impairment
charge may represent a permanent decline in value due to the decreased operating performance of the applicable property.
Furthermore, because gains and losses from sales of property are excluded from NAREIT FFO, it is consistent and appropriate
that impairments, which are often early recognition of losses on prospective sales of property, also be excluded.
We believe NAREIT FFO Applicable to Common Shares and Dilutive Securities, when considered with the financial
statements determined in accordance with GAAP, is helpful to investors in understanding our performance because the
historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements,
which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and
fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be
less informative.
Core Funds From Operations ("Core FFO") is an additional supplemental non-GAAP financial measure of our operating
performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs
without having to account for certain remaining amortization assumptions within NAREIT FFO and other unique revenue and
expense items which some may consider not pertinent to measuring a particular company's on-going operating performance. In
that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses and measure the achievement of
certain performance-based equity awards.
Our adjustments to NAREIT FFO to arrive at Core FFO include removing the impact of (i) amortization of debt discounts and
financing costs, (ii) amortization of market-lease intangibles and inducements, net, (iii) depreciation and amortization of
corporate assets, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments (vi) other non-
operating revenue and expense items which, in our judgement, are not pertinent to measuring on-going operating performance,
(vii) adjustments for IAGM to reflect our share of the ventures' Core FFO on the same basis. Our calculation of Core FFO
Applicable to Common Shares and Dilutive Securities does not consider any capital expenditures.
26
Other REITs may use alternative methodologies for calculating similarly titled measures, which may not be comparable to our
definition and calculation of NAREIT FFO Applicable to Common Shares and Dilutive Securities or Core FFO Applicable to
Common Shares and Dilutive Securities. Furthermore, NAREIT FFO and Core FFO are not necessarily indicative of cash flow
available to fund cash needs and should not be considered as alternatives to net income as an indication of our performance.
NAREIT FFO and Core FFO should not be considered as alternatives to our cash flows from operating, investing, and
financing activities. Nor should NAREIT FFO and Core FFO be considered as measures of liquidity, our ability to make cash
distributions, or our ability to service our debt.
NAREIT FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and
Dilutive Securities is calculated as follows:
Net income
Depreciation and amortization related to investment properties
Gain on sale of investment properties
Unconsolidated joint venture adjustments (a)
NAREIT FFO Applicable to Common Shares and Dilutive Securities
Amortization of market-lease intangibles and inducements, net
Straight-line rent adjustments, net
Amortization of debt discounts and financing costs
Adjusting items, net (b)
Unconsolidated joint venture adjusting items, net (c)
Core FFO Applicable to Common Shares and Dilutive Securities
Weighted average common shares outstanding - basic
Dilutive effect of unvested restricted shares (d)
Weighted average common shares outstanding - diluted
Net income per diluted share
Per share adjustments for NAREIT FFO
NAREIT FFO per diluted share
Per share adjustments for Core FFO
Core FFO per diluted share
Year ended December 31,
2022
2023
5,269 $
112,578
(2,691)
342
115,498
(3,343)
(3,349)
4,113
(969)
(92)
111,858 $
52,233
94,142
(38,249)
3,850
111,976
(5,589)
(3,815)
2,816
(18)
582
105,952
67,531,898
281,282
67,813,180
67,406,233
119,702
67,525,935
0.08 $
1.62
1.70 $
(0.05)
1.65 $
0.77
0.89
1.66
(0.09)
1.57
$
$
$
$
$
(a) Represents our share of depreciation, amortization, and gain on sale related to investment properties held in IAGM.
(b) Adjusting items, net, are primarily loss on extinguishment of debt, depreciation and amortization of corporate assets, and non-operating income
and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as basis difference
recognition arising from acquiring the four remaining properties of IAGM, and miscellaneous and settlement income.
(c) Represents our share of amortization of market lease intangibles and inducements, net, straight line rent adjustments, net and adjusting items, net
related to IAGM.
(d) For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted
earnings per share in accordance with GAAP.
27
Critical Accounting Estimates
General
The accompanying consolidated financial statements have been prepared in accordance with GAAP, which require management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting periods. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not
limited to, evaluating the collectability of accounts receivable, allocating the purchase price of acquired retail properties, and
evaluating the impairment of long-lived assets. We base these estimates, judgments and assumptions on historical experience
and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these
estimates.
Acquisition of Real Estate
We evaluate the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or
asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are expensed. If an
acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and amortized over the useful
life of the acquired assets. Generally, our acquisitions of real estate qualify as asset acquisitions.
We allocate the purchase price of real estate to land, building, other building improvements, tenant improvements, intangible
assets and liabilities (such as the value of above- and below-market leases, in-place leases and origination costs associated with
in-place leases). The values of above- and below-market leases are recorded as intangible assets and intangible liabilities,
respectively, and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-
market leases) to lease income, net over the remaining term of the associated tenant lease. The values, if any, associated with in-
place leases are recorded in intangible assets and are amortized to depreciation and amortization expense over the remaining
lease term.
The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the
remaining non-cancelable term of the leases plus the term of any below-market renewal options. For the amortization period,
the remaining term of leases with renewal options at terms below market reflect the assumed exercise of such below-market
renewal options, if reasonably assured.
If a tenant vacates its space prior to the contractual expiration of the lease and no rental payments are being made on the lease,
any unamortized balance of the related intangible asset or liability is written off. Tenant improvements are depreciated and
origination costs are amortized over the remaining term of the lease or charged against earnings if the lease is terminated prior
to its contractual expiration date.
With the assistance of a third-party valuation specialist, we perform the following procedures for assets acquired:
•
•
•
•
•
•
Estimate the value of the property "as if vacant" as of the acquisition date;
Allocate the value of the property among land, building, and other building improvements and determine the
associated useful life for each;
Calculate the value and associated life of above- and below-market leases on a tenant-by-tenant basis. The difference
between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the
remaining term of the leases (using a discount rate which reflects the risks associated with the leases acquired,
including geographical location, size of leased area, tenant profile and credit risk);
Estimate the fair value of the tenant improvements, legal costs and leasing commissions incurred to obtain the leases
and calculate the associated useful life for each;
Estimate the fair value of assumed debt, if any; and
Estimate the intangible value of the in-place leases based on lease execution costs of similar leases as well as lost rent
payments during an assumed lease-up period and their associated useful lives on a tenant-by-tenant basis.
28
Impairment of Long Lived Assets
We assess the carrying values of our long-lived tangible and intangible assets whenever events or changes in circumstances
indicate that they may not be fully recoverable. An example of an event or changed circumstance is a reduction in the expected
holding period of a property. When such event or circumstances occur, if it is expected that the carrying value is not
recoverable, because the expected undiscounted cash flows do not exceed that carrying value, we recognize an impairment loss
to the extent that the carrying value exceeds the estimated fair value. The valuation and possible subsequent impairment of
investment properties is a significant estimate that can and does change based on our continuous process of analyzing each
property's economic condition over time and reviewing and updating assumptions about uncertain inherent factors, including
observable inputs such as contractual revenues and unobservable inputs such as forecasted revenues and expenses, estimated
net disposition proceeds, discount and capitalization rates. These unobservable inputs are based on market conditions and the
property's expected growth rates. Assumptions and estimates about future cash flows and discount and capitalization rates are
complex and subjective. Changes in economic and operating conditions and in our ultimate investment intent that occur
subsequent to the impairment analyses could impact these assumptions and result in additional impairment.
Our assessment of expected hold period for investment properties evaluated for impairment is of particular significance because
of the material impact it has on the evaluation of the property's recoverability. Changes in our disposition strategy or changes in
the marketplace may alter the expected hold period of a property which may result in an impairment loss and such loss could be
material to the Company's financial condition or operating performance.
Liquidity and Capital Resources
Development, Re-development, Capital Expenditures and Tenant Improvements
The following table summarizes capital resources used for development and re-development, capital expenditures, and tenant
improvements at our retail properties during the year ended December 31, 2023. These costs are classified as cash used in
capital expenditures and tenant improvements and investment in development and re-development projects on the consolidated
statements of cash flows during the year ended December 31, 2023.
Development and
Re-development
Capital Expenditures
Direct costs
Indirect costs
Total
$
$
3,788 (a) $
770 (b)
4,558
$
17,284
1,929
19,213
Tenant Improvements
$
8,085 (c) $
Total
$
—
8,085
$
29,157
2,699
31,856
(a) Direct development and re-development costs relate to construction of buildings at our retail properties.
(b)
Indirect development and re-development costs relate to capitalized interest, real estate taxes, insurance, and payroll attributed to improvements
at our retail properties.
(c) Direct costs relate to improvements to a tenant space that are either paid directly by us or reimbursed to the tenants.
Short-Term Liquidity and Capital Resources
On a short-term basis, our principal uses for funds are to pay our operating and corporate expenses, interest and principal on our
indebtedness, property capital expenditures, and to make distributions to our stockholders.
Our ability to maintain adequate liquidity for our operations in the future is dependent upon a number of factors, including our
revenue, macroeconomic conditions, our ability to contain costs, including capital expenditures, and to collect rents and other
receivables, and various other factors, many of which are beyond our control. We will continue to monitor our liquidity position
and may seek to raise funds through debt or equity financing in the future to fund operations, significant investments or
acquisitions that are consistent with our strategy. Our ability to raise these funds may also be diminished by other
macroeconomic factors.
Long-Term Liquidity and Capital Resources
Our objectives are to maximize revenue generated by our retail platform, to further enhance the value of our retail properties to
produce attractive current yield and long-term returns for our stockholders, and to generate sustainable and predictable cash
flow from our operations to distribute to our stockholders.
29
Any future determination to pay distributions will be at the discretion of our Board and will depend on our financial condition,
capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board
deems relevant. In November 2023, our Board approved an increase to our annual distribution rate effective for the quarterly
distribution to be paid in April 2024.
Our primary sources and uses of capital are as follows:
Sources
•
Operating cash flows from our real estate investments;
Uses
•
To invest in properties or fund acquisitions;
•
•
•
•
•
Proceeds from sales of properties;
Proceeds from mortgage loan borrowings on properties;
Proceeds from corporate borrowings and debt financings;
Proceeds from any ATM Program activities; and
Proceeds from our Series A and Series B Notes offering.
•
•
•
•
•
•
To fund development, re-development, maintenance and
capital expenditures or leasing incentives;
To make distributions to our stockholders;
To service or pay down our debt;
To pay our operating expenses;
To repurchase shares of our common stock; and
To fund other general corporate uses.
We believe our listing on the NYSE will facilitate supplementing these sources by selling equity securities of the Company if
and when we believe appropriate to do so. Also, from time to time, we may seek to acquire additional amounts of our
outstanding common stock through cash purchases or exchanges for other securities. Such purchases or exchanges, if any, will
depend on our liquidity requirements, contractual restrictions, and other factors.
In the first quarter of 2022, we entered into an ATM Program pursuant to which we may sell shares of our common stock up to
an aggregate purchase price of $250.0 million. In the fourth quarter of 2023, we raised $5.4 million of net proceeds under the
ATM Program, after $0.1 million in commissions, through the issuance of 208,040 shares of common stock at a weighted
average price of $26.13 per share. As of December 31, 2023, $244.6 million of common stock remains available for issuance
under the ATM Program.
In the third quarter of 2023, Fitch Ratings, Inc. ("Fitch") affirmed our Long-Term Issuer Default Rating (IDR) at 'BBB-'. In
addition, Fitch affirmed our senior unsecured debt at 'BBB-'. Our investment grade Rating Outlook is Stable.
On August 11, 2022, the Company issued $250.0 million aggregate principal amount of senior notes in a private placement, of
which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii)
$100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with
the Series A Notes, the "Notes") pursuant to the Note Purchase Agreement. The Notes were issued at par in accordance with the
Note Purchase Agreement and pay interest semiannually on February 11th and August 11th until their respective maturities.
Off Balance Sheet Arrangements
The Company does not have off balance sheet arrangements other than its joint venture, IAGM, as disclosed in "Part IV. Item 8.
Note 6. Investment in Unconsolidated Entities."
Summary of Cash Flows
Cash provided by operating activities
Cash used in investing activities
Cash (used in) provided by financing activities
Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
Year ended December 31,
2022
2023
$
$
129,621 $
(79,718)
(87,902)
(37,999)
137,762
99,763 $
125,795 $
(144,461)
111,574
92,908
44,854
137,762 $
Change
3,826
64,743
(199,476)
(130,907)
92,908
(37,999)
Cash provided by operating activities of $129.6 million and $125.8 million for the years ended December 31, 2023 and 2022,
respectively, was generated primarily from income from property operations. Cash provided by operating activities increased
$3.8 million when comparing 2023 to 2022, primarily as a result of acquisition activity in excess of disposition activity and
general fluctuations in working capital. Since January 1, 2022, we have acquired eleven retail properties and disposed of four
retail properties.
30
Cash used in investing activities of $79.7 million for the year ended December 31, 2023, was primarily the result of:
•
•
•
•
•
$152.0 million for acquisitions of investment properties, and
$35.8 million for capital investments and leasing costs, which were partially offset by:
$95.1 million from distributions from unconsolidated entities,
$12.6 million from the sale of investment properties, and
$0.4 million from other investing activities.
Cash used in investing activities of $144.5 million for the year ended December 31, 2022, was primarily the result of:
•
•
•
•
•
$235.0 million for acquisitions of investment properties,
$33.2 million for capital investments and leasing costs, and
$1.2 million for other investing cash outflows, which were partially offset by:
$77.5 million from the sale of investment properties, and
$47.4 million from distributions from unconsolidated entities.
Cash used in financing activities of $87.9 million for the year ended December 31, 2023, was primarily the result of:
•
•
•
•
$33.8 million for pay-offs of debt, principal payments of mortgage debt, payment of loan fees and other deposits, and
other financing activities,
$57.5 million to pay distributions, and
$1.6 million for the payment of tax withholdings for share-based compensation, which were partially offset by:
$5.0 million from net proceeds from the sale of common stock under the ESPP and ATM.
Cash provided by financing activities of $111.6 million for the year ended December 31, 2022, was primarily the result of:
•
•
•
•
•
•
$250.0 million from our issuance of senior notes, and
$112.0 million drawn from our line of credit, which were partially offset by:
$143.0 million repaid on our line of credit,
$50.5 million for pay-offs of debt, debt prepayment penalties, principal payments of mortgage debt, payment of loan
fees and other deposits, and other financing activities,
$55.3 million to pay distributions, and
$1.6 million for the payment of tax withholdings for share-based compensation.
We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements
with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash
equivalents at major financial institutions. The combined account balances at one or more institutions generally exceed the
FDIC insurance coverage. We periodically assess the credit risk associated with these financial institutions. We believe
insignificant credit risk exists related to amounts on deposit in excess of FDIC insurance coverage.
Acquisitions and Dispositions of Real Estate Investments
In 2023, we acquired five retail properties for an aggregate gross acquisition price of $244.0 million. In 2022, we acquired six
retail properties and an outparcel adjacent to an existing retail property for an aggregate gross acquisition price of $319.1
million.
In 2023, we disposed of one retail property and completed a partial condemnation at one retail property for an aggregate gross
disposition price of $13.1 million. In 2022, we disposed of three retail properties for an aggregate gross disposition price of
$110.5 million.
31
Distributions
During the year ended December 31, 2023, we declared cash distributions to our stockholders totaling $58.2 million and paid
cash distributions of $57.5 million.
As we execute on our retail strategy, the Board evaluated and expects to continue to evaluate our distribution rate on a periodic
basis. See "Part I. Item 1. Business - Current Strategy and Outlook" for more information regarding our retail strategy. The
following table presents a historical summary of distributions declared, paid and reinvested.
2023
2022
Year ended December 31,
2021
2020
$
$
$
58,248 $
57,491 $
— $
55,337 $
55,302 $
— $
55,721 $
55,561 $
— $
54,604 $
54,214 $
185 $
2019
53,473
53,250
50
Distributions declared
Distributions paid
Distributions reinvested
Borrowings
Mortgages Payable, Maturities
The following table summarizes the scheduled maturities of our mortgages payable as of December 31, 2023.
Scheduled maturities by year:
2024
2025
2026
2027
2028
Thereafter
Total mortgages payable
Credit Agreements, Maturities
As of December 31, 2023
88,168
$
22,880
—
26,000
—
31,500
168,548
$
The following table summarizes the outstanding borrowings under our unsecured term loans as of December 31, 2023.
$200.0 million 5 year - swapped to fixed rate
$200.0 million 5 year - swapped to fixed rate
$200.0 million 5.5 year - swapped to fixed rate
$200.0 million 5.5 year - swapped to fixed rate
$200.0 million 5.5 year - swapped to fixed rate
Total unsecured term loans
$
$
Principal Balance
100,000
100,000
50,000
50,000
100,000
400,000
(a)
Interest rates reflect the fixed rates achieved through the Company's interest rate swaps.
Senior Notes, Maturities
Interest Rate
2.81% (a)
2.81% (a)
2.77% (a)
2.76% (a)
4.99% (a)
Maturity Date
September 22, 2026
September 22, 2026
March 22, 2027
March 22, 2027
March 22, 2027
The following table summarizes the outstanding borrowings under our Senior Notes as of December 31, 2023.
$150.0 million Series A
$100.0 million Series B
Principal Balance
150,000
100,000
250,000
$
$
Fixed Interest Rate
5.07%
5.20%
Maturity Date
August 11, 2029
August 11, 2032
32
Contractual Obligations
We have obligations related to our mortgage loans, senior notes, term loans, and revolving credit facility as described in "Note
8. Debt" in the consolidated financial statements.
The following table presents our obligations to make future payments under debt and lease agreements as of December 31,
2023, exclusive of debt discounts and issuance costs which are not future cash obligations.
2024
2025
Payments due by year ending December 31,
2027
2028
2026
Thereafter
Total
Long term debt:
Fixed rate debt, principal (a)
Variable rate debt, principal
Interest
Total long term debt
Operating leases (b)
Grand total
$
$
15,700 $
72,468
33,861
122,029
628
122,657 $
22,880 $
—
29,532
52,412
511
52,923 $
200,000 $
—
27,141
227,141
517
227,658 $
226,000 $
—
16,339
242,339
529
242,868 $
— $
—
14,103
14,103
522
14,625 $
281,500 $
—
24,629
306,129
786
306,915 $
746,080
72,468
145,605
964,153
3,493
967,646
(a)
Includes variable rate debt swapped to fixed rates through the Company's interest rate swaps.
(b)
Includes leases on corporate office spaces.
Inflation
With respect to current economic conditions and governmental fiscal policy, inflation has become a greater risk. Rising
inflation may affect our and our tenants' expenses, including, without limitation, by increasing product prices and costs such as
wages, benefits, taxes, property and casualty insurance, borrowing costs and utilities. We rely on the performance of our assets
to increase revenues in order to keep pace with inflation. We may not be able to offset high rates of inflation through rent
increases due to the long-term nature of some of our leases.
A number of our leases contain provisions designed to partially mitigate adverse impacts of inflation. Our leases typically
require the tenant to pay its share of operating expenses, including common area maintenance, real estate taxes and insurance,
thereby reducing our exposure to increases in these costs resulting from inflation, although some larger tenants have capped the
amount of these operating costs they are responsible for. A portion of our leases also include clauses enabling us to receive
percentage rents based on a tenant's gross sales above specified levels or rental escalation clauses which are typically based on
increases in the Consumer Price Index or similar inflation indices.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
The Company is subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price
of new fixed-rate debt upon maturity of existing debt. The Company's interest rate risk management objectives are to limit the
impact of interest rate changes on earnings and cash flows. As of December 31, 2023, our debt included outstanding variable-
rate term loans and mortgages of $472.5 million, of which $400.0 million has been swapped to a fixed rate.
With regard to our variable-rate financing, we assess interest rate cash flow risk by continually identifying and monitoring
changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging
opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both
outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control
systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of
changes in interest rates on our future cash flows. We continue to assess retaining cash flows that may assist us in maintaining a
flexible low leverage balance sheet and managing the impact of debt maturities.
We monitor interest rate risk using a variety of techniques, including periodically evaluating fixed interest rate quotes on all
variable rate debt and the costs associated with converting the debt to fixed rate debt. In addition, existing fixed and variable
rate loans that are scheduled to mature within the next two years are evaluated for possible early refinancing and/or extension
due to consideration given to current interest rates. Refer to our Borrowings table in Item 7 of this Annual Report for debt
principal amounts and expected maturities by year to evaluate the expected cash flows and sensitivity to interest rate changes.
33
We may use financial instruments to hedge exposures to changes in interest rates on loans. To the extent we do, we are exposed
to credit risk and market risk. Credit risk is the risk of failure of the counterparty to perform under the terms of the derivative
contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.
When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not pose credit risk. We
seek to minimize the credit risk in derivative instruments by entering into transactions with what we believe are high-quality
counterparties. Market risk is the adverse effect on the value of a financial instrument resulting from a change in interest rates.
On March 16, 2023, the Company entered into one interest rate swap agreement with a notional amount of $100.0 million at
3.69%, achieving a fixed interest rate of 4.99%. As of the effective date of April 3, 2023, the entirety of the Company's variable
rate term loans were swapped to fixed rates through the maturity dates of the Amended Term Loan Agreement.
As of December 31, 2023, the Company's interest rate risk was limited to $72.5 million of variable rate cross-collateralized
mortgage debt. If market rates of interest on all variable-rate debt as of December 31, 2023 permanently increased or decreased
by 1%, the annual increase or decrease in interest expense on the variable-rate debt and future earnings and cash flows would be
approximately $0.7 million.
The Company is party to five effective interest rate swap agreements and two interest rate forward swap agreements, which
address the periods between the maturity dates of the effective swaps and the maturity dates of the Amended Term Loan
Agreement. In tandem, the interest rate swaps achieve fixed interest rates for a constant notional amount through the maturity
dates of the Amended Term Loan Agreement.
The following table summarizes the Company's five effective and two forward interest rate swaps as of December 31, 2023:
Interest Rate Swap
Effective Date
Termination
Date
InvenTrust Receives
Variable Rate of
InvenTrust Pays
Fixed Rate of
Fixed Rate
Achieved
Notional
Amount
Fair Value as of
December 31, 2023
5.5 Year Term Loan
Dec 2, 2019
Jun 21, 2024
1-Month SOFR
5.5 Year Term Loan
Dec 2, 2019
Jun 21, 2024
1-Month SOFR
5.5 Year Term Loan
Apr 3, 2023
Mar 22, 2027
1-Month SOFR
5 Year Term Loan
Dec 21, 2023
Sep 22, 2026
1-Month SOFR
5 Year Term Loan
Dec 21, 2023
Sep 22, 2026
1-Month SOFR
5.5 year, fixed portion
Jun 21, 2024
Mar 22, 2027
1-Month SOFR
5.5 year, fixed portion
Jun 21, 2024
Mar 22, 2027
1-Month SOFR
1.47%
1.46%
3.69%
1.51%
1.51%
1.48%
1.54%
2.77%
2.76%
4.99%
2.81%
2.81%
2.78%
2.84%
$
50,000 $
50,000
100,000
100,000
100,000
$ 400,000 $
50,000
$
50,000
$ 100,000 $
855
857
(122)
5,820
5,845
13,255
2,451
2,368
4,819
The following table summarizes the Company's four effective and four forward interest rate swaps as of December 31, 2022:
Interest Rate Swap
Effective Date
Termination
Date
InvenTrust Receives
Variable Rate of
InvenTrust Pays
Fixed Rate of
Fixed Rate
Achieved
Notional
Amount
Fair Value as of
December 31, 2022
5 year, fixed portion
Dec 2, 2019
Dec 21, 2023
1-Month SOFR
5 year, fixed portion
Dec 2, 2019
Dec 21, 2023
1-Month SOFR
5.5 year, fixed portion Dec 2, 2019
5.5 year, fixed portion Dec 2, 2019
Jun 21, 2024
Jun 21, 2024
1-Month SOFR
1-Month SOFR
5 year, fixed portion
Dec 21, 2023
Sep 22, 2026
1-Month SOFR
5 year, fixed portion
Dec 21, 2023
Sep 22, 2026
1-Month SOFR
5.5 year, fixed portion
Jun 21, 2024
Mar 22, 2027
1-Month SOFR
5.5 year, fixed portion
Jun 21, 2024
Mar 22, 2027
1-Month SOFR
1.41%
1.42%
1.47%
1.46%
1.51%
1.51%
1.48%
1.54%
2.71%
2.72%
2.77%
2.76%
2.81%
2.81%
2.78%
2.84%
$ 100,000 $
100,000
50,000
50,000
$ 300,000 $
$ 100,000 $
100,000
50,000
50,000
$ 300,000 $
3,222
3,238
2,275
2,281
11,016
4,924
4,949
2,196
2,116
14,185
Gains or losses resulting from marking-to-market the Company's derivatives each reporting period are recognized as an increase
or decrease in comprehensive (loss) income on the consolidated statements of operations and comprehensive (loss) income.
The information presented above does not consider all exposures or positions that could arise in the future. Therefore, the
information represented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest
rate fluctuations will depend on the exposures that arise during the period, the hedging strategies at the time, and the related
interest rates.
34
Item 8. Consolidated Financial Statements and Supplementary Data
See the Index to Consolidated Financial Statements and Financial Statement Schedule commencing on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our Principal
Executive Officer and our Principal Financial Officer evaluated as of December 31, 2023, the effectiveness of our disclosure
controls and procedures as defined in Exchange Act Rules 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our
Principal Executive Officer and our Principal Financial Officer concluded that our disclosure controls and procedures, as of
December 31, 2023, were effective for the purpose of ensuring that information required to be disclosed by us in this report is
recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and
is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer as
appropriate to allow timely decisions regarding required disclosures.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management, including our Principal Executive Officer and
Principal Financial Officer, evaluated as of December 31, 2023, the effectiveness of our internal control over financial reporting
based on the framework in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013). Based on its evaluation, our management has concluded that we maintained effective
internal control over financial reporting as of December 31, 2023.
Independent Registered Public Accounting Firm’s Report on Internal Control Over Financial Reporting
KPMG LLP, an independent registered public accounting firm, has audited the Company's consolidated financial statements
included in this Annual Report and, as part of its audit, has issued its report, included herein on page F-4, on the effectiveness
of our internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during the quarter ended December 31, 2023, that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
35
Part III
Item 10. Directors, Executive Officers and Corporate Governance
The following information with respect to our board of directors and executive officers is presented as of February 13, 2024:
Name
Daniel J. Busch
Christy L. David
Michael D. Phillips
Stuart Aitken
Age
42
45
42
52
Position at IVT
President, Chief Executive Officer & Director
Executive Vice President, Chief Operating Officer,
General Counsel and Secretary
Executive Vice President, Chief Financial Officer and
Treasurer
Director
Amanda Black
48
Director
Thomas F. Glavin
Scott A. Nelson
Paula Saban
Smita N. Shah
Michael A. Stein
Julian Whitehurst
64
67
70
50
74
66
Director
Director
Director
Director
Director
Director
Principal Employment
Same
Same
Same
Senior Vice President and Chief Merchant and
Marketing Officer at The Kroger Co., a grocery
retailer
Managing Director and Global Chief Investment
Officer at JLP Asset Management, a real estate
investment firm
Owner of Thomas F. Glavin & Associates, Inc.,
a certified public accounting firm
Principal of SAN Property Advisors, a retail real
estate advisory firm
Development Director of Interim Execs, a
placement firm for interim CXO's
Chief Executive Officer of SPAAN Tech, Inc.,
an architecture, engineering, and project
management firm
Retired
Retired
Other information called for by this Item is incorporated by reference to the information set forth in our definitive Proxy
Statement, to be filed with the SEC within 120 days after the end of the Company's fiscal year ended December 31, 2023 in
connection with our 2024 Annual Meeting of Stockholders, and is incorporated herein by reference.
Item 11. Executive Compensation
The information called for by this Item is incorporated by reference to the information set forth in our definitive Proxy
Statement, to be filed with the SEC within 120 days after the end of the Company's fiscal year ended December 31, 2023 in
connection with our 2024 Annual Meeting of Stockholders, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information called for by this Item is incorporated by reference to the information set forth in our definitive Proxy
Statement, to be filed with the SEC within 120 days after the end of the Company's fiscal year ended December 31, 2023 in
connection with our 2024 Annual Meeting of Stockholders, and is incorporated herein by reference.
Equity Compensation Plan Information
The following table provides information regarding our equity compensation plans as of December 31, 2023.
Plan Category
Equity compensation plans not
approved by stockholders:
Equity compensation plans
approved by stockholders:
Total
I
Plan Description
Incentive Award Plan (b)
Number of Shares
Issuable Upon Vesting (a)
1,172,363
II
Number of Securities Remaining
Available for Future Issuance Under
Equity Compensation Plans (Excluding
Securities Reflected in column I)
536,429
ESPP
N/A
1,172,363
3,288,272
3,824,701
(a) Represents restricted share unit ("RSU") awards outstanding under the Incentive Award Plan as of December 31, 2023.
(b) The weighted average grant date price per share of common stock underlying the unvested restricted stock units based on total outstanding
restricted stock units as of December 31, 2023 was $19.36.
36
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information called for by this Item is incorporated by reference to the information set forth in our definitive Proxy
Statement, to be filed with the SEC within 120 days after the end of the Company's fiscal year ended December 31, 2023 in
connection with our 2024 Annual Meeting of Stockholders, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information called for by this Item is incorporated by reference to the information set forth in our definitive Proxy
Statement, to be filed with the SEC within 120 days after the end of the Company's fiscal year ended December 31, 2023 in
connection with our 2024 Annual Meeting of Stockholders, and is incorporated herein by reference.
Part IV
Item 15. Exhibits and Financial Statement Schedules
(a) Documents filed as part of this Annual Report
Reports of Independent Registered Public Accounting Firm (PCAOB ID:185)
1 Consolidated Financial Statements
Page
F-2
Consolidated Balance Sheets as of December 31, 2023 and 2022
F-5
Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2023, 2022 and 2021 F-6
F-7
Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021
F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
F-10
Notes to Consolidated Financial Statements
2 Consolidated Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
F-29
All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the
information is presented in the consolidated financial statements or related notes.
3 EXHIBITS
The following documents are filed as exhibits to this report:
EXHIBIT
NO.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
3.1
3.2
DESCRIPTION
Master Modification Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American
Business Manager & Advisor, Inc., Inland American Lodging Corporation, Inland American Holdco Management LLC, Inland
American Retail Management LLC, Inland American Office Management LLC, Inland American Industrial Management LLC and
Eagle I Financial Corp. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC
on March 13, 2014)
Asset Acquisition Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American
Holdco Management LLC, Inland American Retail Management LLC, Inland American Office Management LLC, Inland American
Industrial Management LLC and Eagle I Financial Corp. (incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K, as
filed by the Registrant with the SEC on March 13, 2014)
Separation and Distribution Agreement by and between Inland American Real Estate Trust, Inc. and Xenia Hotels & Resorts, Inc.,
dated as of January 20, 2015 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the
SEC on January 23, 2015)
Separation and Distribution Agreement by and between InvenTrust Properties Corp. and Highlands REIT, Inc., dated as of April 14,
2016 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 14, 2016)
Stock Purchase Agreement by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC
Acquisition Sub LLC, dated as of January 3, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant's Form 10-Q, as filed by
the Registrant on May 10, 2016)
Amendment No. 1 to Stock Purchase Agreement, dated as of May 30, 2016, by and among InvenTrust Properties Corp., University
House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.2 to the Registrant's Form 8-
K, as filed by the Registrant on June 27, 2016)
Amendment No. 2 to Stock Purchase Agreement, dated as of June 20, 2016, by and among InvenTrust Properties Corp., University
House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.3 to the Registrant's Form 8-
K, as filed by the Registrant on June 27, 2016)
Seventh Articles of Amendment and Restatement of InvenTrust Properties Corp., as amended (incorporated by reference to Exhibit 3.1
to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on May 14, 2015)
Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed
by the Registrant with the SEC on August 5, 2021)
37
EXHIBIT
NO.
3.3
3.4
3.5
3.6
3.7
4.1
4.2
4.3*
10.1
10.2^
10.3.1^
10.3.2^
10.4^
10.5^
10.6^
10.7^
10.8^
10.9^
10.10^
10.11^
10.12
10.13.1
10.13.2
10.13.3*
10.14.1
DESCRIPTION
Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed
by the Registrant with the SEC on August 5, 2021)
Articles Supplementary of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed
by the Registrant with the SEC on October 12, 2021)
Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed
by the Registrant with the SEC on April 28, 2022)
Articles of Amendment of InvenTrust Properties Corp. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed
by the Registrant with the SEC on May 8, 2023)
Fourth Amended and Restated Bylaws of the Company, dated as of May 5, 2023 (incorporated by reference to Exhibit 3.2 to the
Registrant’s Form 8-K, as filed by the Registrant with the SEC on May 8, 2023)
Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request
and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.4 to the Registrant’s
Amendment No. 1 to Form S-11 Registration Statement, as filed by the Registrant with the SEC on July 31, 2007 (file number
333-139504))
Third Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Appendix A to the prospectus dated
November 1, 2019 included in Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No.
333-172862) filed November 1, 2019)
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Indemnity Agreement, dated as of August 8, 2014, by and between Inland American Real Estate Trust, Inc., and Xenia Hotels &
Resorts, Inc., and Inland American Lodging Group, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report
on Form 10-Q, as filed by the Registrant with the SEC on August 14, 2014)
Employment Offer Letter, dated as of June 20, 2019, by and between InvenTrust Properties Corp. and Daniel J. Busch (incorporated by
reference to Exhibit 10.2 to the Registrant’s Form 10-Q as filed by the Registrant on August 8, 2019)
InvenTrust Properties Corp. 2015 Incentive Award Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Form S-8
Registration Statement, as filed by the Registrant with the SEC on June 19, 2015)
First Amendment to InvenTrust Properties Corp. 2015 Incentive Award Plan, dated May 6, 2016 (incorporated by reference to Exhibit
10.3 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 15, 2016)
Form of Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q, as
filed by the Registrant with the SEC on August 10, 2017)
Form of Director Restricted Stock Unit Agreement for 2016 Pro Rata Awards (incorporated by reference to Exhibit 10.10.3 to the
Registrant's Form 10-K, as filed by the Registrant with the SEC on March 17, 2017)
Form of Director Restricted Stock Unit Agreement for 2017 Annual Pro Rata Awards (incorporated by reference to Exhibit 10.3 to the
Registrant’s Form 10-Q, as filed by the Registrant with the SEC on August 10, 2017)
Form of Director Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q, as filed
by the Registrant with the SEC on August 10, 2017)
InvenTrust Properties Corp. Director Compensation Program, effective as of May 5, 2022 (incorporated by reference to Exhibit 10.18
to the Registrant’s Form 10-K, as filed by the Registrant with the SEC on February 21, 2023)
InvenTrust Properties Corp. Executive Severance and Change of Control Plan (incorporated by reference to Exhibit 10.1 to the
Registrant’s Form 8-K, as filed by the Registrant on July 13, 2018)
Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K,
as filed by the Registrant with the SEC on May 14, 2019)
Form of Performance-Based Restricted Stock Unit Award Agreement (2022) (incorporated by reference to Exhibit 10.1 to the
Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 25, 2022)
First Amendment to Indemnity Agreement by and among Inland American Real Estate Trust, Inc. and Xenia Hotels & Resorts, Inc.,
dated as of February 3, 2015 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the
SEC on February 9, 2015)
Amended and Restated Term Loan Credit Agreement dated as of December 21, 2018, among InvenTrust Properties Corp., as
Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A and U.S. Bank National
Association, as tranche A-1 Co-Syndication Agents, PNC Bank, National Association and U.S. Bank National Association, as tranche
A-2 Co-Syndication Agents, BMO Harris Bank, N.A. and Fifth Third Bank, as tranche A-1 Co-Documentation Agents, KeyBank
National Association, as tranche A-2 Documentation Agent, and the other lenders from time to time party thereto (incorporated by
reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on December 31, 2018)
First Amendment, dated as of September 22, 2021, to Amended and Restated Term Loan Credit Agreement, among InvenTrust
Properties Corp., Wells Fargo Bank, National Association and the other lenders party thereto (incorporated by reference to Exhibit 10.1
to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 22, 2021)
Second Amendment, dated as of May 11, 2022, to Amended and Restated Term Loan Credit Agreement, among InvenTrust Properties
Corp., the lenders party thereto and Wells Fargo Bank, National Association
Second Amended and Restated Credit Agreement dated as of December 21, 2018, among InvenTrust Properties Corp., as borrower,
KeyBank National Association, as Administrative Agent, KeyBanc Capital Markets Inc. and Wells Fargo Securities, LLC, as Joint
Book Managers, KeyBanc Capital Markets Inc., Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., Bank of America, N.A.,
PNC Bank, National Association, and BMO Harris Bank, N.A., as Joint Lead Arrangers, Wells Fargo Bank, National Association, and
JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Bank of America, N.A., PNC Bank, National Association, and BMO Harris
Bank, N.A., as Co-Documentation Agents, and the other lenders from time to time party thereto (incorporated by reference to Exhibit
10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on December 31, 2018)
38
EXHIBIT
NO.
10.14.2
10.14.3*
10.15^
10.16^
10.17
10.18^
10.19
10.20^
21.1*
23.1*
31.1*
31.2*
32.1**
32.2**
97.1*
101
104
*
**
^
DESCRIPTION
First Amendment, dated as of September 22, 2021, to Second Amended and Restated Credit Agreement, among InvenTrust Properties
Corp., KeyBank, National Association and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant's
Form 8-K, as filed by the Registrant with the SEC on September 22, 2021)
Second Amendment dated as of May 11, 2022 to Second Amended and Restated Credit Agreement, among InvenTrust Properties
Corp., the lenders party thereto and KeyBank National Association
Form of Director Restricted Stock Unit Agreement for Annual Awards (incorporated by reference to Exhibit 10.1 to the Registrant’s
Form 10-Q, as filed by the Registrant with the SEC on August 7, 2020)
Separation and Consulting Agreement, by and between InvenTrust Properties Corp. and Thomas McGuinness, dated as of February 18,
2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 23,
2021)
Third Amended and Restated Share Repurchase Program (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report
on Form 8-K, as filed by the Registrant with the SEC on April 12, 2021)
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q, as filed by the
Registrant with the SEC on November 9, 2017)
Note Purchase Agreement, dated June 3, 2022, by and among InvenTrust Properties Corp. and the purchasers named therein
(incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on June 3, 2022)
InvenTrust Properties Corp. 2023 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form
10-Q, as filed by the Company with the SEC on August 1, 2023)
Subsidiaries of the Registrant
Consent of KPMG LLP
Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
InvenTrust Properties Corp. Policy for Recovery of Erroneously Awarded Compensation
The following financial information from our Annual Report for the year ended December 31, 2023, filed with the Securities and
Exchange Commission on February 14, 2024, is formatted in Extensible Business Reporting Language ("XBRL"): (i) Consolidated
Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive (Loss) Income, (iii) Consolidated Statements of Equity,
(iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements (tagged as blocks of text).
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
Filed as part of this Annual Report
This certification is deemed furnished, and not filed, with the SEC and is not to be incorporated by reference into any filing of the
Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or
after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
Management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None.
39
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
INVENTRUST PROPERTIES CORP.
/s/ Daniel J. Busch
By:
Name: Daniel J. Busch
President and Chief Executive Officer
Date:
February 14, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Daniel J. Busch
By:
Name: Daniel J. Busch
President, Chief Executive Officer and Director (Principal Executive Officer)
February 14, 2024
/s/ Michael Phillips
By:
Name: Michael Phillips
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
/s/ David Bryson
By:
Name: David Bryson
By:
Name:
/s/ Stuart Aitken
Stuart Aitken
/s/ Amanda Black
By:
Name: Amanda Black
/s/ Thomas F. Glavin
By:
Name: Thomas F. Glavin
By:
Name:
/s/ Scott A. Nelson
Scott A. Nelson
By:
Name:
/s/ Paula J. Saban
Paula J. Saban
Senior Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)
Director
Director
Director
Director
Director
By:
/s/ Smita N. Shah
Director
Name:
Smita N. Shah
/s/ Michael A. Stein
By:
Name: Michael A. Stein
By:
Name:
/s/ Julian E. Whitehurst
Julian E. Whitehurst
Director
Director
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
February 14, 2024
40
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
Consolidated Financial Statements and Supplementary Data
Reports of Independent Registered Public Accounting Firm (PCAOB ID:185)
Financial Statements:
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
Schedule III - Real Estate and Accumulated Depreciation
Page
F-2
F-5
F-6
F-7
F-8
F-10
F-29
All other schedules have been omitted as the information is inapplicable, not required, or the information is included elsewhere
in the consolidated financial statements or related notes thereto.
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
InvenTrust Properties Corp.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of InvenTrust Properties Corp. and subsidiaries (the Company)
as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive (loss) income, equity,
and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial
statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results
of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 14, 2024 expressed an unqualified opinion on the effectiveness of the Company's
internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate
opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Expected hold period of investment properties
As discussed in Note 2 to the consolidated financial statements, the Company assesses the carrying values of its investment
properties (including any related intangible assets or liabilities) on an individual basis when events or changes in
circumstances, including changes in the expected holding period, indicate their carrying value may not be fully
recoverable. If it is determined that the carrying value of the investment property is not recoverable because the expected
undiscounted cash flows do not exceed that carrying value of the property, the Company records an impairment loss to the
extent that the carrying value exceeds the estimated fair value. Net investment properties as of December 31, 2023 was
$2,195 million, or 88.3% of total assets.
F-2
We identified the assessment of the expected hold period for the investment properties evaluated for impairment as a
critical audit matter because of the significance of the estimate to the evaluation of the recoverability of the investment
properties. Changes in the expected hold period could have a material impact on the projected operating cash flows utilized
in the recoverability analysis for the investment property. Subjective and challenging auditor judgment was required to
evaluate the reasonableness of management’s assessment of expected hold period.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the Company’s
consideration of individual real estate properties for potential reductions in expected hold period:
•
•
•
•
Inquiring of Company officials to evaluate the likelihood that an investment property will be sold before the end of its
expected hold period.
Inspecting meeting minutes of the board of directors and the management investment committee to evaluate the
likelihood that an investment property will be sold before the end of its expected hold period.
Inquiring and obtaining representations from the Company regarding the status and evaluation of any potential
disposal of properties. We corroborated that information with others in the organization who are responsible for, and
have authority over, disposition activities and compared with the Company’s documented investment plans.
Reading external communications with investors in order to identify information regarding potential sales of the
Company’s properties, or other indicators of a reduction in an investment property’s expected hold period.
/s/ KPMG LLP
We have served as the Company’s auditor since 2005.
Chicago, Illinois
February 14, 2024
F-3
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
InvenTrust Properties Corp.:
Opinion on Internal Control Over Financial Reporting
We have audited InvenTrust Properties Corp. and subsidiaries' (the Company) internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated
statements of operations and comprehensive (loss) income, equity, and cash flows for each of the years in the three-year period
ended December 31, 2023, and the related notes and financial statement schedule III (collectively, the consolidated financial
statements), and our report dated February 14, 2024 expressed an unqualified opinion on those consolidated financial
statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Chicago, Illinois
February 14, 2024
F-4
Assets
Investment properties
Land
Building and other improvements
Construction in progress
Total
Less accumulated depreciation
Net investment properties
Cash, cash equivalents and restricted cash
Investment in unconsolidated entities
Intangible assets, net
Accounts and rents receivable
Deferred costs and other assets, net
Total assets
Liabilities
Debt, net
Accounts payable and accrued expenses
Distributions payable
Intangible liabilities, net
Other liabilities
Total liabilities
Commitments and contingencies
INVENTRUST PROPERTIES CORP.
Consolidated Balance Sheets
(in thousands, except share amounts)
As of December 31,
2023
2022
$
694,668 $
1,956,117
5,889
2,656,674
(461,352)
2,195,322
99,763
—
114,485
35,353
42,408
650,764
1,825,893
5,005
2,481,662
(389,361)
2,092,301
137,762
56,131
101,167
34,528
51,145
2,487,331 $
2,473,034
$
$
814,568 $
44,583
14,594
30,344
29,198
933,287
—
68
5,468,728
(3,932,826)
18,074
1,554,044
754,551
42,792
13,837
29,658
28,287
869,125
—
67
5,456,968
(3,879,847)
26,721
1,603,909
2,473,034
$
2,487,331 $
Stockholders' Equity
Preferred stock, $0.001 par value, 40,000,000 shares authorized, none outstanding
Common stock, $0.001 par value, 146,000,000 shares authorized,
67,807,831 shares issued and outstanding as of December 31, 2023 and
67,472,553 shares issued and outstanding as of December 31, 2022
Additional paid-in capital
Distributions in excess of accumulated net income
Accumulated comprehensive income
Total stockholders' equity
Total liabilities and stockholders' equity
See accompanying notes to the consolidated financial statements.
F-5
INVENTRUST PROPERTIES CORP.
Consolidated Statements of Operations and Comprehensive (Loss) Income
(in thousands, except share and per share amounts)
Income
Lease income, net
Other property income
Other fee income
Total income
Operating expenses
Depreciation and amortization
Property operating
Real estate taxes
General and administrative
Direct listing costs
Total operating expenses
Other (expense) income
Interest expense, net
Loss on extinguishment of debt
Gain on sale of investment properties, net
Equity in (losses) earnings of unconsolidated entities
Other income and expense, net
Total other (expense) income, net
Net income (loss)
Year Ended December 31
2022
2021
2023
$
257,146 $
232,980 $
207,350
1,450
80
1,161
2,566
1,087
3,542
258,676
236,707
211,979
113,430
42,832
34,809
31,797
—
94,952
40,239
32,925
33,342
—
87,143
32,788
31,312
38,192
19,769
222,868
201,458
209,204
(38,138)
(15)
2,691
(557)
5,480
(30,539)
(26,777)
(181)
38,249
3,663
2,030
16,984
(16,261)
(400)
1,522
6,398
606
(8,135)
$
5,269 $
52,233 $
(5,360)
Weighted-average common shares outstanding, basic
Weighted-average common shares outstanding, diluted
67,531,898
67,813,180
67,406,233
67,525,935
71,072,933
71,072,933
Net income (loss) per common share - basic
Net income (loss) per common share - diluted
Distributions declared per common share outstanding
Distributions paid per common share outstanding
Comprehensive (loss) income
Net income (loss)
Unrealized gain on derivatives
Reclassification (to) from net income (loss)
Comprehensive (loss) income
$
$
$
$
$
$
0.08 $
0.08 $
0.86 $
0.85 $
0.77 $
0.77 $
0.82 $
0.82 $
(0.08)
(0.08)
0.78
0.78
5,269 $
52,233 $
(5,360)
6,228
(14,875)
32,052
(1,009)
(3,378) $
83,276 $
3,795
4,332
2,767
See accompanying notes to the consolidated financial statements.
F-6
INVENTRUST PROPERTIES CORP.
Consolidated Statements of Equity
(in thousands, except share amounts)
Beginning balance, January 1, 2021
Net loss
Unrealized loss on derivatives
Reclassification to interest expense, net
Reclassification to equity in losses of unconsolidated entities
Distributions declared
Stock-based compensation, net
Repurchase of common stock under share repurchase plan
Repurchase of common stock through tender offer
Ending balance, December 31, 2021
Net income
Unrealized gain on derivatives
Reclassification from interest expense, net
Reclassification from equity in earnings of unconsolidated
entities
Distributions declared
Stock-based compensation, net
Ending balance, December 31, 2022
Net income
Unrealized gain on derivatives
Reclassification from interest expense, net
Distributions declared
Stock-based compensation, net
Issuance of common stock, net
Ending balance, December 31, 2023
Number of
Shares
71,998,654 $
Common
Stock
—
—
—
—
—
101,363
(755,643)
(4,000,000)
67,344,374
—
—
—
—
—
128,179
67,472,553
—
—
—
—
127,238
208,040
67,807,831 $
72 $
—
—
—
—
—
6
(7)
(4)
67
—
—
—
—
—
—
67
—
—
—
—
1
—
68 $
Distributions
in Excess of
Accumulated
Net Income
Accumulated
Comprehensive
Income (Loss)
Additional
Paid-in
Capital
5,566,902 $
—
—
—
—
—
5,653
(16,678)
(103,327)
5,452,550
—
—
—
—
—
4,418
5,456,968
—
—
—
—
7,427
4,333
5,468,728 $
(3,815,662) $
(5,360)
—
—
—
(55,721)
—
—
—
(3,876,743)
52,233
—
—
—
(55,337)
—
(3,879,847)
5,269
—
—
(58,248)
—
—
(3,932,826) $
(12,449) $
—
3,795
4,198
134
—
—
—
—
(4,322)
—
32,052
(405)
(604)
—
—
26,721
—
6,228
(14,875)
—
—
—
18,074 $
Total
1,738,863
(5,360)
3,795
4,198
134
(55,721)
5,659
(16,685)
(103,331)
1,571,552
52,233
32,052
(405)
(604)
(55,337)
4,418
1,603,909
5,269
6,228
(14,875)
(58,248)
7,428
4,333
1,554,044
See accompanying notes to the consolidated financial statements.
F-7
INVENTRUST PROPERTIES CORP.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2022
2021
2023
$
5,269 $
52,233 $
(5,360)
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization
Amortization of market-lease intangibles and inducements, net
Amortization of debt discounts and financing costs
Straight-line rent adjustment, net
Provision for (reversal of) estimated credit losses
Gain on sale of investment properties, net
Loss on extinguishment of debt
Equity in losses (earnings) of unconsolidated entities
Distributions from unconsolidated entities
Stock-based compensation, net
Changes in operating assets and liabilities:
Accounts and rents receivable
Deferred costs and other assets, net
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of investment properties
Capital expenditures and tenant improvements
Investment in development and re-development projects
Proceeds from the sale of investment properties, net
Distributions from unconsolidated entities
Lease commissions and other leasing costs
Other investing activities, net
Net cash used in investing activities
Cash flows from financing activities:
Payment of tax withholdings for share-based compensation
Repurchases of common stock
Payment of common stock repurchase costs
Proceeds from sale of common stock under ATM
Proceeds from sale of common stock under ESPP
Payment of common stock offering costs
Distributions to stockholders
Term loan proceeds
Term loan repayments
Line of credit proceeds
Line of credit repayments
Senior notes proceeds
Payoffs of debt
Principal payments on mortgage debt
Payment of loan fees and deposits
Other financing activities
Net cash (used in) provided by financing activities
Net decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
$
F-8
113,430
(3,343)
4,113
(3,464)
1,148
(2,691)
15
557
—
9,021
1,483
91
2,054
1,938
129,621
(152,047)
(27,298)
(4,558)
12,559
95,065
(3,888)
449
(79,718)
(1,583)
—
—
5,165
235
(341)
(57,491)
—
—
30,000
(30,000)
—
(33,700)
(32)
(175)
20
(87,902)
(37,999)
137,762
99,763 $
94,952
(5,589)
2,816
(2,645)
(1,437)
(38,249)
181
(3,663)
9,350
6,541
(999)
317
8,411
3,576
125,795
(235,001)
(19,420)
(9,461)
77,538
47,355
(4,302)
(1,170)
(144,461)
(1,581)
—
—
—
—
—
(55,302)
—
—
112,000
(143,000)
250,000
(47,052)
(842)
(2,387)
(262)
111,574
92,908
44,854
137,762 $
87,143
(4,318)
1,816
(3,272)
2,271
(1,522)
400
(6,398)
8,085
9,116
257
(1,834)
1,875
1,697
89,956
(53,078)
(15,361)
(5,466)
14,807
—
(4,055)
(1,548)
(64,701)
(1,833)
(116,397)
(3,619)
—
—
—
(55,561)
400,000
(400,000)
31,000
—
—
(50,000)
(1,306)
(6,065)
(390)
(204,171)
(178,916)
223,770
44,854
INVENTRUST PROPERTIES CORP.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2022
2021
2023
Supplemental disclosure of cash flow information:
Cash flow disclosure, including non-cash investing and financing activities:
Cash paid for interest, net of capitalized interest
Cash paid (refunded) for income taxes, net of (payments) refunds
Previously held equity investments in real estate assets acquired
Distributions payable to stockholders
Accrued capital expenditures and tenant improvements
Capitalized costs placed in service
Gross issuance of shares for share-based compensation
$
33,093 $
209
39,603
14,594
1,680
16,402
4,558
18,705 $
(386)
—
13,837
2,851
17,895
6,224
14,570
276
—
13,802
3,552
7,453
5,040
Purchase of investment properties:
Net investment properties
Accounts and rents receivable, lease intangibles, and deferred
costs and other assets
Accounts payable and accrued expenses, lease intangibles, and
other liabilities
Assumption of mortgage debt, at fair value
Cash outflow for purchase of investment properties, net
Assumption of mortgage principal
Capitalized acquisition costs
Credits and other changes in cash outflow, net
Gross acquisition price of investment properties
Sale of investment properties:
Net investment properties
Accounts and rents receivable, lease intangibles, and deferred
costs and other assets
Accounts payable and accrued expenses, lease intangibles, and
other liabilities
Debt assumed by buyer through disposition of property
Gain on sale of investment properties, net
Loss on extinguishment of debt
Proceeds from sale of investment properties, net
Assumption of mortgage principal
Credits and other changes in cash inflow, net
Gross disposition price of investment properties
$
$
200,085 $
52,871
280,938 $
47,019
45,791
8,734
(9,133)
(13,075)
(1,447)
$
$
(91,776)
152,047
92,468
(150)
(365)
244,000 $
(79,881)
235,001
80,380
(1,079)
4,768
319,070 $
10,086 $
297
66,294 $
4,200
(515)
(2,575)
—
2,691
12,559
—
583
13,142 $
(28,552)
38,249
(78)
77,538
28,630
4,282
110,450 $
—
53,078
—
(59)
1,691
54,710
10,953
2,332
—
—
1,522
—
14,807
—
174
14,981
See accompanying notes to the consolidated financial statements.
F-9
INVENTRUST PROPERTIES CORP.
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
1. Organization
On October 4, 2004, InvenTrust Properties Corp. (the "Company" or "InvenTrust") was incorporated as Inland American Real
Estate Trust, Inc., a Maryland corporation, and elected to operate in a manner to be taxed as a real estate investment trust
("REIT") for federal tax purposes. The Company changed its name to InvenTrust Properties Corp. in April of 2015 and is
focused on owning, leasing, redeveloping, acquiring and managing a multi-tenant retail platform.
The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly-owned
subsidiaries. Subsidiaries generally consist of limited liability companies ("LLCs") and limited partnerships ("LPs"). All
significant intercompany balances and transactions have been eliminated. Each retail property is owned by a separate legal
entity that maintains its own books and financial records. Each separate legal entity's assets are not available to satisfy the
liabilities of other affiliated entities.
The Company has a single reportable segment, multi-tenant retail, for disclosure purposes in accordance with United States
("U.S.") generally accepted accounting principles ("GAAP"). Unless otherwise noted, all square feet and dollar amounts are
stated in thousands, except share, per share and per square foot data. Number of properties and square feet are unaudited.
The following table summarizes the Company's retail portfolio as of December 31, 2023 and 2022:
No. of properties
Gross Leasable Area (square feet)
Wholly-Owned Retail Properties
2022
2023
58
62
9,171
10,324
Unconsolidated Retail Properties at 100%
2023
—
—
2022
4
1,125
2. Basis of Presentation and Summary of Significant Accounting Policies
Estimates, Risks, and Uncertainties
The accompanying consolidated financial statements have been prepared in accordance with GAAP, which requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting periods. Significant estimates, judgments and assumptions are required in a number of areas,
including, but not limited to, evaluating the impairment of long-lived assets, allocating the purchase price of acquired retail
properties, determining the fair value of debt and evaluating the collectability of accounts receivable. The Company bases these
estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be
reasonable under the circumstances. Actual results may differ from these estimates.
Variable Interest Entities
The Company evaluates its investments in LLCs and LPs to determine whether each such entity may be a variable interest
entity ("VIE"). The accounting standards related to the consolidation of VIEs require qualitative assessments to determine
whether the Company is the primary beneficiary. Determination of the primary beneficiary is based on whether the Company
has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that
could be potentially significant to the VIE. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The
equity method of accounting is applied to entities in which the Company is not the primary beneficiary, or if the entity is not a
VIE and the Company does not have control, but can exercise significant influence over the entity with respect to its operations
and major decisions. As of December 31, 2023 and 2022, the Company had no VIEs.
Revenue Recognition
Lease Income
The majority of revenue recognized from the Company's retail properties is comprised of fixed and variable consideration
received from tenants under long-term operating leases with varying terms. Fixed consideration generally consists of minimum
lease payments for the rental of retail space while the variable consideration generally consists of reimbursements of the tenant's
pro-rata share of certain operating expenses incurred by the Company, including real estate taxes, special assessments,
insurance, utilities, common area maintenance, management fees and certain capital repairs. Certain other tenants are subject to
net leases whereby the tenant is responsible for fixed minimum lease payments to the Company, as well as directly paying all
costs and expenses associated with occupancy to third party service providers. Such direct payments to third parties are not
recorded as revenue and expense by the Company.
F-10
In accordance with Accounting Standards Codification ("ASC") 842, Leases, ("Topic 842"), the Company has elected to not
separate lease and non-lease components for all qualifying leases. In effect, this generally relieves the Company from
accounting for certain consideration under ASC 606, Revenue from Contracts with Customers ("Topic 606"). As a result of the
election, all income arising from leases is presented on a combined basis as lease income, net.
Minimum lease payments are recognized on a straight-line basis over the term of each lease. The cumulative difference between
fixed consideration recognized on a straight-line basis and the cash payments due under the provisions of the lease agreements
is recorded as deferred rent receivable and is included as a component of accounts and rents receivable.
The Company records lease termination income when all conditions of a signed termination agreement have been met, the
tenant is no longer occupying the property, and termination income amounts due are considered collectible. The Company
defers recognition of contingent lease income until the specified target that triggers the contingent lease income is achieved.
The Company commences revenue recognition on its leases when the lessee takes possession of, or controls the physical use of,
the leased asset, unless the lessee is constructing improvements for which the Company is deemed to be the owner for
accounting purposes. If the Company is deemed the owner for accounting purposes, the leased asset is the finished space and
revenue recognition commences when the lessee takes possession of it, typically when the improvements are substantially
complete. Alternatively, if the lessee is deemed to be the owner of the improvements for accounting purposes, then the leased
asset is the unimproved space, and any tenant improvement allowances funded under the lease are treated as lease incentives,
which reduce lease income recognized over the lease term, and the Company commences revenue recognition when the lessee
takes possession of the unimproved space.
The determination of who owns the tenant improvements, for accounting purposes, is based on contractual rights and subject to
judgment. In making that judgment, no one factor is determinative. The Company routinely considers:
•
•
•
•
•
•
whether the lease stipulates how and on what a tenant improvement allowance may be spent;
whether the tenant is required to provide evidence supporting the cost of improvements prior to reimbursement;
whether the tenant or landlord retains legal title to the improvements;
the uniqueness of the improvements;
the expected economic life of the tenant improvements relative to the length of the lease; and
who constructs or directs the construction of the improvements.
Credit Losses
The Company reviews the collectability of amounts due from its tenants on a regular basis. Such reviews consider the tenant's
financial condition and payment history and other economic conditions impacting the tenant. Changes in collectability occur
when the Company no longer believes it is probable that substantially all the lease payments will be collected over the term of
the lease. If collection is not probable, the lease payments will be accounted for on a cash basis and revenue will be recorded as
cash is received. If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable,
the accrual basis of revenue recognition is reestablished. The provision for estimated credit losses resulting from changes in the
expected collectability of lease payments, including variable payments, is recognized as a direct adjustment to lease income,
and a direct write-off of the operating lease receivables, including straight-line rent receivable.
Other Fee Income
The Company recognizes other fee income when it satisfies a performance obligation relating to services provided to its joint
venture partnership. The Company generally does not receive prepayments for services or recognize revenue prior to being
legally entitled to payment. As a result, the Company does not generally record contract assets or contract liabilities.
Property management and asset management fees are recognized over time as services are rendered to the joint venture
partnership. The bundled services of the property management performance obligation and asset management performance
obligation each qualify as a series of distinct services satisfied over time. The variability in timing of the property management
and asset management fees, which generally relate to the fluctuation in cash receipts from tenants and potential changes in
equity capitalization, are resolved on a monthly basis.
Leasing commissions and other fees are recognized at a point in time consistent with the underlying service rendered to the
joint venture partnership. Generally, the first and second installments of leasing commissions are paid upon lease execution and
rent commencement, respectively.
F-11
Sale of Real Estate
The Company derecognizes real estate and recognizes a gain or loss when a contract exists and control of the property has
transferred to the buyer. Control of the property, including controlling financial interest, is generally considered to transfer upon
closing through transfer of the legal title and possession of the property, at which point the Company recognizes a gain or loss
equal to the difference between the transaction price and the carrying amount of the property.
Acquisition of Real Estate
The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business
combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are
expensed. If an acquisition qualifies as an asset acquisition, the related transaction costs are capitalized and amortized over the
useful life of the acquired assets. Generally, our acquisitions of real estate qualify as asset acquisitions.
The Company allocates the purchase price of real estate to land, building, other building improvements, tenant improvements,
intangible assets and liabilities (such as the value of above- and below-market leases, and in-place leases). The values of above-
and below-market leases are recorded as intangible assets and intangible liabilities, respectively, and are amortized as either a
decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to lease income, net over the
remaining term of the associated lease. The values, if any, associated with in-place leases are recorded as intangible assets and
amortized to depreciation and amortization expense over the remaining lease term.
The difference between the contractual rental rates and the Company's estimate of market rental rates is measured over a period
equal to the remaining non-cancelable term of the leases plus the term of any below-market renewal options. For the
amortization period, the remaining term of leases with renewal options at terms below market reflect the assumed exercise of
such below-market renewal options, if reasonably assured.
If a tenant vacates its space prior to the contractual expiration of the lease and no rental payments are being made on the lease,
any unamortized balance of the related intangible asset or liability is written off. Tenant improvements are depreciated and
origination costs are amortized over the remaining term of the lease or charged against earnings if the lease is terminated prior
to its contractual expiration date.
With the assistance of a third-party valuation specialist, the Company performs the following procedures for assets acquired:
•
•
•
•
•
•
Estimate the value of the property "as if vacant" as of the acquisition date;
Allocate the value of the property among land, building, and other building improvements and determine the
associated useful life for each;
Calculate the value and associated life of above- and below-market leases on a tenant-by-tenant basis. The difference
between the contractual rental rates and the Company’s estimate of market rental rates is measured over a period equal
to the remaining term of the leases (using a discount rate which reflects the risks associated with the leases acquired,
including geographical location, size of leased area, tenant profile and credit risk);
Estimate the fair value of the tenant improvements, legal costs and leasing commissions incurred to obtain the leases
and calculate the associated useful life for each;
Estimate the fair value of assumed debt, if any; and
Estimate the intangible value of the in-place leases based on lease execution costs of similar leases as well as lost rent
payments during an assumed lease-up period and their associated useful lives on a tenant-by-tenant basis.
Properties Held for Sale
In determining whether to classify a property as held for sale, the Company considers whether: (i) management has committed
to a plan to sell the property; (ii) the property is available for immediate sale, in its present condition; (iii) the Company has
initiated a program to locate a buyer; (iv) the Company believes that the sale of the property is probable; (v) the Company has
received a significant non-refundable deposit for the purchase of the property; (vi) the Company is actively marketing the
property for sale at a price that is reasonable in relation to its estimated fair value; and (vii) actions required for the Company to
complete the plan indicate that it is unlikely that any significant changes will be made to the plan. When all criteria are met, the
property is classified as held for sale and carried at the lower of cost or estimated fair value less costs to sell. Additionally, if the
sale represents a strategic shift that has (or will have) a major effect on the Company's results and operations, the income and
expenses for the period are classified as discontinued operations for all periods presented.
F-12
Impairment of Long Lived Assets
The Company assesses the carrying values of long-lived tangible and intangible assets whenever events or changes in
circumstances indicate that they may not be fully recoverable, such as a reduction in the expected hold period of a property.
When such event or circumstances occur, if it is expected that the carrying value is not recoverable because the expected
undiscounted cash flows do not exceed that carrying value, the Company recognizes an impairment loss to the extent that the
carrying value exceeds the estimated fair value. The valuation and possible subsequent impairment of investment properties is a
significant estimate that can and does change based on the Company's continuous process of analyzing each property's
economic condition over time and reviewing and updating assumptions about uncertain inherent factors, including observable
inputs such as contractual revenues and unobservable inputs such as forecasted revenues and expenses, estimated net
disposition proceeds, and discount rate. These unobservable inputs are based on a property's market conditions and expected
growth rates. Assumptions and estimates about future cash flows and capitalization rates are complex and subjective. Changes
in economic and operating conditions and the Company's ultimate investment intent that occur subsequent to the impairment
analyses could impact these assumptions and result in additional impairment.
The Company's assessment of expected hold period for investment properties evaluated for impairment is of particular
significance because of the material impact it has on the evaluation of the property's recoverability. Changes in the Company's
disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group which may result in an
impairment loss and such loss could be material to the Company's financial condition or operating performance.
Periodically, management assesses whether there are any indicators that the carrying value of the Company's investments in
unconsolidated entities may be other-than-temporarily impaired. To the extent other-than-temporary impairment has occurred,
the loss is measured as the excess of the carrying value of the investment over the estimated fair value of the investment. The
estimated fair value of the investment is generally derived from the cash flows generated from the underlying real property
investments of the investee.
Real Estate Capitalization and Depreciation
Real estate is reflected at cost less accumulated depreciation within investment properties on the consolidated balance sheets.
Ordinary repairs and maintenance are expensed as incurred.
Depreciation expense is computed using the straight-line method. A range of estimated useful lives of 15-30 years is used for
buildings and other improvements, and a range of 3-20 years is used for furniture, fixtures and equipment.
Tenant improvements are amortized on a straight-line basis over the lesser of the life of the tenant improvement or the lease
term. Amortization is included in depreciation and amortization expense.
Deferred leasing costs are recognized as a part of deferred costs and other assets, net and are amortized to depreciation and
amortization expense over the remaining term of the associated tenant lease.
Direct and indirect costs that are clearly related to the construction and improvements of investment properties are capitalized.
Costs incurred for interest, property taxes and insurance are capitalized during periods in which activities necessary to prepare
the property for its intended use are in progress.
Cash, Cash Equivalents and Restricted Cash
The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase
agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its
cash and cash equivalents at financial institutions. The combined account balances at one or more institutions generally exceed
the Federal Deposit Insurance Corporation ("FDIC") insurance coverage. The Company periodically assesses the credit risk
associated with these financial institutions. The Company believes insignificant credit risk exists related to amounts on deposit
in excess of FDIC insurance coverage.
The Company had restricted cash of $3,378 and $142 as of December 31, 2023 and 2022, respectively. Restricted cash often
consists of lenders' escrows, operating real estate escrows for taxes, insurance, capital expenditures and payments required
under certain lease agreements, and funds restricted through lender or other agreements, including funds held in escrow for
future acquisitions.
F-13
Fair Value Measurements
In accordance with ASC 820, Fair Value Measurement and Disclosures ("Topic 820"), the Company defines fair value based
on the price that would be received upon sale of an asset or the exit price that would be paid to transfer or settle a liability in an
orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that
prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of the three broad
levels described below:
•
•
•
Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable inputs.
The Company has estimated the fair value of its financial instruments and non-financial assets using available market
information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment
and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative
of amounts that would be realized upon disposition.
The carrying amounts of cash, cash equivalents and restricted cash, accounts and rents receivables, other assets, accounts
payable, accrued expenses, and other liabilities reasonably approximate fair value, in management’s judgment, because of their
short-term nature. Fair value information pertaining to derivative financial instruments, investment properties, and debt is
provided in "Note 9. Fair Value Measurements".
Stock-Based Compensation Plans
Incentive Award Plan
Effective June 19, 2015, the Company's board of directors (the "Board") adopted the InvenTrust Properties Corp. 2015
Incentive Award Plan (the "Incentive Award Plan"), under which the Company may grant cash and equity incentive awards to
eligible employees, directors, and consultants. The Company has awarded time-based restricted stock units ("RSUs"),
performance-based RSUs, and market-based RSUs with tandem dividend equivalents. Compensation expense related to these
awards, which are generally equity classified, is recognized as a part of general and administrative expense. The tandem
dividend equivalent cash payments of awards granted during the years ended December 31, 2023 and 2022 are recognized
within equity. The tandem dividend equivalent cash payments of awards granted during the year ended December 31, 2021 are
recognized within earnings. Forfeitures of awards are recognized as they occur.
Time-based awards are generally measured at grant date fair value and not subsequently remeasured. Compensation expense
related to these awards is recognized on a straight-line basis over the vesting period. Time-based awards granted to employees
vest equally on each of the first three anniversaries of the applicable vesting commencement date, subject to the employees'
continued service to the Company. The time-based RSU awards granted to directors vest on the earlier of the one-year
anniversary of the applicable grant date or the date of the Company's next annual meeting of its shareholders following the
grant date, subject to the directors' continued service to the Company.
Performance-based awards are measured at grant date fair value and each grantee is eligible to vest in a number of RSUs
ranging from 0% to 100% of the total number granted based on specified performance levels. Performance-based awards vest
within 45 days of the conclusion of the performance period and are generally subject to the recipients' continued service to the
Company. Compensation cost is recognized when the performance condition is considered probable of achievement. If a
performance award has more than one potential outcome, recognition of compensation cost is based on the most likely
outcome. During the service period, a cumulative catch-up approach is used to account for changes in the assessment of which
outcome is most likely to occur.
Market-based awards are valued as of the grant date utilizing a Monte Carlo simulation model that assesses the probability of
satisfying certain market performance thresholds over a three year performance period. Market-based awards vest within 45
days of the conclusion of the performance period and are generally subject to the recipients' continued service to the Company.
The number of common shares ultimately issued is based on the Company's total shareholder return ("TSR") relative to that of
the FTSE NAREIT Shopping Index peer group on a percentile basis. The resulting compensation expense is recorded over the
service period regardless of whether the TSR performance measures are achieved.
F-14
Employee Stock Purchase Plan
Effective May 4, 2023, the Company's Board established an Employee Stock Purchase Plan (the "ESPP") through which
employees may purchase shares of the Company's common stock semi-annually at a price equal to 85% of the lesser of: (a) the
closing price per share on the first day of such period, and (b) the closing price per share on the last day of such period.
Compensation expense related to the ESPP is recognized as a part of general and administrative expense.
Derivative Instruments
In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company's objective in
using interest rate derivatives is to manage its exposure to interest rate movements and add stability to interest expense. To
accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest
rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the
Company making fixed rate payments over the life of the agreement without exchange of the underlying notional amount.
The Company has a policy of only entering into contracts with established financial institutions based upon their credit ratings
and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to
hedge, the Company has not sustained a material loss from those instruments, nor does it anticipate any material adverse effect
on its net income or financial position in the future from the use of derivatives.
The Company recognizes all derivatives on the consolidated balance sheets at fair value. Additionally, changes in fair value will
affect either equity or earnings depending on whether the derivative instruments qualify as a hedge for accounting purposes
and, if so, the nature of the hedging activity. When the underlying transaction is terminated or completed, all changes in the fair
value of the instrument are marked-to-market with changes in value included in earnings each period until the instrument
matures. Any derivative instrument used for risk management that does not meet the criteria for hedge accounting is marked-to-
market each period in earnings. The Company does not use derivatives for trading or speculative purposes.
Income Taxes
The Company has elected and operates in a manner to be taxed as a REIT under the Internal Revenue Code of 1986, as
amended (the "Code") for federal income tax purposes commencing with the tax year ended December 31, 2005. To qualify as
a REIT, the Company is generally required to distribute at least 90% of its REIT taxable income (subject to certain adjustments)
to its stockholders each year (the "90% Distribution Requirement"). As a REIT, the Company is entitled to a tax deduction for
some or all of the dividends paid to stockholders. Accordingly, the Company generally will not be subject to federal income
taxes as long as it currently distributes to stockholders an amount equal to or in excess of the Company's taxable income. If the
Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be
subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for
taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal
income and excise taxes on its undistributed income.
From time to time, the Company may elect to treat certain of its consolidated subsidiaries as taxable REIT subsidiaries
("TRSs") pursuant to the Code. Among other activities, TRSs may participate in non-real estate related activities and/or perform
non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates. Income tax
expense or benefit is recognized as a part of other income and expense, net. During the years ended December 31, 2023, 2022,
and 2021 the Company did not have any operations within TRSs.
Income tax expense for the years ended December 31, 2023, 2022 and 2021 generally pertains to Texas margin tax. The
Company has accrued no material interest or penalties relating to income taxes. As of December 31, 2023, the Company's 2022,
2021, and 2020 tax years remain subject to examination by U.S. and various state tax jurisdictions.
Recently Issued Accounting Pronouncements
Standard
ASU No. 2023-07
Improvements to
Reportable Segment
Disclosures (Topic 280)
Description
ASU No. 2023-07 is intended to improve
financial reporting by requiring disclosure of
incremental segment information on an
annual and interim basis.
Date of
adoption
December 2024
(anticipated)
Effect on the financial statements or other
significant matters
The Company is continuing to evaluate this guidance,
but expects the standard to impact our disclosures
around our single reportable segment and is not
anticipated to have an impact on the Company's
financial position, results of operations, or cash flows.
Other recently issued accounting standards or pronouncements not disclosed in the foregoing table have been excluded because
they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the consolidated
financial statements of the Company.
F-15
3. Revenue Recognition
Operating Leases
Minimum lease payments to be received under long-term operating leases and short-term specialty leases, excluding additional
percentage rent based on tenants' sales volume and tenant reimbursements of certain operating expenses, and assuming no
exercise of renewal options or early termination rights, are as follows:
For the year ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total
As of December 31, 2023
188,912
$
178,186
159,268
127,019
100,057
346,370
1,099,812
$
The foregoing table includes payments from tenants who have taken possession of their space and tenants who have been
moved to the cash basis of accounting for revenue recognition purposes. The remaining lease terms range from less than one
year to fifty-seven years.
The following table reflects the disaggregation of lease income, net:
Minimum base rent
Real estate tax recoveries
Common area maintenance, insurance, and other recoveries
Ground rent income
Amortization of market-lease intangibles and inducements, net
Short-term and other lease income
Termination fee income
Straight-line rent adjustment, net
Reversal of (provision for) uncollectible straight-line rent
Provision for uncollectible billed rent and recoveries
Reversal of uncollectible billed rent and recoveries
Lease income, net
Other Fee Income
Year Ended December 31,
2022
145,467 $
30,107
28,072
14,991
5,589
4,333
339
2,645
1,170
(1,065)
1,332
232,980 $
2023
165,267 $
31,220
30,731
19,044
3,343
4,389
836
3,464
(115)
(1,628)
595
257,146 $
2021
128,716
27,874
23,948
13,167
4,318
3,378
406
3,272
(468)
(2,264)
5,003
207,350
$
$
Other fee income was derived from services provided to the Company's unconsolidated real estate joint venture and deemed to
be related party transactions. The property management, asset management, leasing and other services were provided over the
term of the contract.
The following table reflects the disaggregation of other fee income:
Timing of Satisfaction of
Performance Obligations
Year Ended December 31,
2023
2022
2021
Property management fees
Asset management fees
Leasing commissions and other fees
Other fee income
Over time
Over time
Point in time
$
$
48
32
—
80
$
$
1,301
882
383
2,566
$
$
1,952
1,128
462
3,542
F-16
4. Acquired Properties
The following table reflects the retail properties acquired, accounted for as asset acquisitions, during the year ended
December 31, 2023:
Date
January 18, 2023
January 18, 2023
January 18, 2023
January 18, 2023
June 2, 2023
Property
Bay Colony (a)
Blackhawk Town Center (a)
Cyfair Town Center (a)
Stables Town Center (a)
The Shoppes at Davis Lake
Metropolitan Area
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Charlotte, NC
Square Feet
Gross
Acquisition Price
$
Assumption of
Mortgage Debt
41,969
13,008
30,880
6,611
—
92,468
79,100 $
26,300
79,200
37,000
22,400
244,000 $
416
127
433
148
91
1,215 $
(a) These retail properties were acquired from the Company's unconsolidated joint venture, IAGM, as disclosed in "Note 6. Investment in
Unconsolidated Entities". The Company recognized a fair value adjustment of $692 related to the pooled mortgage debt on these properties.
The following table reflects the retail properties acquired, accounted for as asset acquisitions, during the year ended
December 31, 2022:
Date
February 2, 2022
February 2, 2022
April 21, 2022
May 4, 2022
June 10, 2022
October 28, 2022
December 16, 2022
Property
Shops at Arbor Trails
Escarpment Village
The Highlands of Flower Mound (a)
Bay Landing
Kyle Marketplace - Outparcel (b)
Eastfield Village
Stone Ridge Market (a)
Metropolitan Area
Austin, TX
Austin, TX
Dallas, TX
Fort Myers, FL
Austin, TX
Charlotte, NC
San Antonio, TX
Square Feet
Gross
Acquisition Price
$
112,190 $
357
170
175
63
—
96
219
1,080 $
Assumption of
Mortgage Debt
31,500
26,000
22,880
—
—
—
—
80,380
77,150
38,000
10,425
705
22,500
58,100
319,070 $
(a) These retail properties were acquired from the Company's unconsolidated joint venture. See "Note 6. Investment in Unconsolidated Entities".
The Company recognized a fair value adjustment of $499 related to the pooled mortgage debt on these properties.
(b) The Company acquired a parcel of vacant land adjacent to this retail property. The assets, liabilities and operations of the outparcel acquired are
combined for presentation purposes with the retail property already owned by the Company.
Transaction costs of $150 and $1,079 were capitalized during the years ended December 31, 2023 and 2022, respectively.
5. Disposed Properties
The following table reflects the real property disposed of during the year ended December 31, 2023:
Date
June 20, 2023
August 25, 2023
Property
Shops at Galleria (a)
Trowbridge Crossing
Metropolitan Area
Austin, TX
Atlanta, GA
Square Feet
Gross
Disposition Price
Gain on Sale
N/A $
63
63 $
1,692 $
11,450
13,142 $
984
1,707
2,691
(a) This disposition was related to the completion of a partial condemnation at one retail property.
The following table reflects the real property disposed of during the year ended December 31, 2022:
Date
June 30, 2022
June 30, 2022
December 15, 2022
Property
Centerplace of Greeley
Cheyenne Meadows
The Shops at Walnut Creek (a)
Metropolitan Area
Denver, CO
Denver, CO
Denver, CO
Square Feet
Gross
Disposition Price
Gain (Loss)
on Sale, net
152 $
90
225
467 $
37,550 $
17,900
55,000
110,450 $
25,147
11,709
1,393
38,249
(a) The property's buyer assumed a $28,600 mortgage payable secured by the property. We recognized a loss on debt extinguishment of $80
related to the buyer's assumption.
F-17
6. Investment in Unconsolidated Entities
Joint Venture Interest in IAGM
As of December 31, 2022, the Company owned a 55% interest in one unconsolidated entity, IAGM Retail Fund I, LLC
("IAGM"), a joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). IAGM was
formed on April 17, 2013 for the purpose of acquiring, owning, managing, and disposing of retail properties and sharing in the
profits and losses from those retail properties and their activities.
On January 18, 2023, the Company acquired the four remaining retail properties from IAGM, for an aggregate purchase price
of $222.3 million, by acquiring 100% of the membership interests in each of IAGM's wholly owned subsidiaries. The Company
assumed aggregate mortgage debt of $92.5 million and funded the remaining balance with its available liquidity. IAGM
recognized a gain on sale of $45.2 million, of which the Company's share was approximately $24.9 million. Subsequent to the
transaction, IAGM proportionately distributed substantially all net proceeds from the sale, of which the Company's share was
approximately $71.4 million. In connection with the foregoing, IAGM adopted a liquidation plan on January 11, 2023. On
December 15, 2023, IAGM was fully liquidated.
The Company's aggregate deferred gains related to its previously owned equity interest in real estate acquisitions from IAGM
of $39.9 million are reflected in the basis of the respective acquired assets. Previously, deferred gains were reflected as a
reduction of the Company's investment in IAGM and amortized to equity in earnings of unconsolidated entities.
On January 18, 2023, the Company acquired IAGM's two interest rate swap agreements which achieved fixed interest rates on
an aggregate notional amount of $75.0 million of the assumed pooled mortgage priced in a Secured Overnight Financing Rate
("SOFR"), each of which repriced monthly ("1-Month Term SOFR"). IAGM recognized a gain on sale of $2.6 million
representing the fair value of the derivatives, of which the Company's share was approximately $1.4 million. The Company
deferred its share of IAGM's gain on sale of derivatives, initially reflecting it within accumulated comprehensive income and
amortizing it to interest expense, net, through the instruments' maturity date.
The following table reflects the real property disposed by IAGM since January 1, 2022:
Date
March 3, 2022
April 21, 2022
December 16, 2022
December 22, 2022
January 18, 2023
January 18, 2023
January 18, 2023
January 18, 2023
Property
Price Plaza (a)
The Highlands of Flower Mound (b)
Stone Ridge Market (b)
Stables Town Center (c)
Bay Colony (b)
Blackhawk Town Center (b)
Cyfair Town Center (b)
Stables Town Center (b)
Square
Feet
Gross
Disposition Price
IAGM's
Gain (Loss) on Sale
The Company's
Gain Deferral
$
206
175
219
43
416
127
433
148
39,100 $
38,000
58,100
7,800
79,100
26,300
79,200
37,000
3,751 $
1,244
12,287
(244)
22,327
12,632
4,713
5,536
—
684
6,758
—
12,280
6,948
2,592
3,045
(a) The buyer assumed a $17,800 mortgage payable secured by the property.
(b) The Company purchased these properties at a purchase price determined by a third party real estate valuation specialist.
(c)
IAGM disposed of 43 square feet out of a total 191 square feet through a partial sale of the property.
F-18
Condensed Financial Information
The following table presents condensed balance sheet information for IAGM as of December 31, 2022:
Assets:
Net investment properties
Other assets
Total assets
Liabilities and equity:
Mortgage debt, net
Other liabilities
Equity
Total liabilities and equity
Company's share of equity
Outside basis difference, net (a)
Carrying value of investments in unconsolidated entities
As of
December 31, 2022
$
$
$
$
$
$
161,312
65,565
226,877
92,186
7,392
127,299
226,877
70,869
(14,738)
56,131
(a) The outside basis difference relates to the unamortized deferred gains on historical property sales from IAGM to the Company.
The following table presents condensed income statement information of IAGM:
IAGM
Total income
Depreciation and amortization
Property operating
Real estate taxes
Asset management fees
Interest expense, net
Other income and expense, net
Gain (loss) on debt extinguishment
Gain on sale of real estate, net
Gain on sale of derivatives
Net income
Company's share of net income
Outside basis adjustment for investee's sale of real estate, net
Outside basis adjustment for investee's NCI redemption
Equity in (losses) earnings of unconsolidated entities
Year ended December 31,
2022
2021
2023
952 $
(622)
(232)
(127)
(32)
(143)
447
444
45,208
2,556
48,451 $
26,648 $
(27,175)
(30)
(557) $
27,764 $
(10,508)
(5,149)
(4,086)
(882)
(4,002)
(245)
(219)
17,038
—
19,711 $
10,832 $
(7,169)
—
3,663 $
42,145
(14,437)
(7,265)
(7,507)
(1,128)
(5,637)
(422)
(229)
18,294
—
23,814
13,089
(6,691)
—
6,398
$
$
$
$
F-19
7. Intangible Assets, Liabilities, and Deferred Leasing Costs
The following table summarizes the Company's intangible assets, liabilities, and deferred leasing costs as of December 31, 2023
and 2022:
Intangible assets:
In-place leases
Above-market leases
Intangible assets
Accumulated amortization:
In-place leases
Above-market leases
Accumulated amortization
Intangible assets, net
Intangible liabilities:
Below-market leases
Accumulated amortization
Intangible liabilities, net
Deferred leasing costs:
Leasing costs
Accumulated amortization
Deferred leasing costs, net
As of December 31,
2023
2022
$
$
$
$
$
$
183,139 $
17,967
201,106
(78,177)
(8,444)
(86,621)
114,485 $
52,412 $
(22,068)
30,344 $
22,621 $
(7,626)
14,995 $
158,155
16,082
174,237
(66,347)
(6,723)
(73,070)
101,167
55,501
(25,843)
29,658
20,949
(7,114)
13,835
The following table summarizes the amortization related to intangible assets, liabilities, and deferred leasing costs for the years
ended December 31, 2023, 2022 and 2021:
Intangible assets:
In-place leases
Above-market leases
Amortization of intangible assets
Intangible liabilities:
Amortization of below-market leases
Deferred leasing costs:
Amortization of deferred leasing costs
2023
Year ended December 31,
2022
2021
$
$
$
$
32,179 $
2,977
35,156 $
20,993 $
2,018
23,011 $
5,976 $
7,403 $
2,691 $
2,533 $
18,730
2,036
20,766
6,317
2,138
The following table summarizes the amortization during the next five years and thereafter related to intangible assets, liabilities,
and deferred leasing costs as of December 31, 2023:
Year ending December 31,
In-place leases
Above market leases
Below market leases
Deferred leasing costs
2024
2025
2026
2027
2028
Thereafter
Total
$
24,961 $
2,368 $
4,312 $
19,611
15,047
10,513
7,764
27,066
1,863
1,461
1,002
753
2,076
$
104,962 $
9,523 $
3,762
3,237
2,315
1,840
14,878
30,344 $
3,507
2,290
2,123
1,842
1,515
3,718
14,995
F-20
8. Debt
The Company's debt consists of mortgages payable, unsecured term loans, senior notes, and an unsecured revolving line of
credit. The Company believes it has the ability to repay, refinance or extend any of its debt, and that it has adequate sources of
funds to meet short-term cash needs. It is anticipated that the Company will use proceeds from property sales, cash on hand, and
available capacity on credit agreements, if any, to repay, refinance or extend the mortgages payable maturing in the near term.
The Company's credit agreements and mortgage loans require compliance with certain covenants, such as debt service coverage
ratios, investment restrictions and distribution limitations. As of December 31, 2023 and 2022, the Company was in compliance
with all loan covenants.
On February 6, 2023, the Company extinguished the $13.7 million mortgage payable secured by Renaissance Center with its
available liquidity.
On October 17, 2023, the Company extended the maturity of its $92.5 million cross-collateralized mortgage debt maturing in
2023 by exercising one of its two 12-month extension options. The maturity date of the mortgage debt is now November 2,
2024. On December 22, 2023, the Company partially paid down the mortgage debt by $20.0 million, resulting in the release of
Blackhawk Town Center from collateralization and an outstanding balance of $72.5 million as of December 31, 2023.
Credit Agreements
On September 22, 2021, the Company entered into an amendment to the Revolving Credit Agreement (the "Amended
Revolving Credit Agreement"), which provides for, among other things, an extension of the maturity of the $350.0 million
Revolving Credit Agreement to September 22, 2025, with two six-month extension options.
On September 22, 2021, the Company entered into an amendment to its $400.0 million Term Loan Credit Agreement (the
"Amended Term Loan Agreement"), which provides for, among other things, an extension of the maturity dates and a
reallocation of indebtedness under the two outstanding tranches of term loans thereunder. The Amended Term Loan Agreement
consists of a $200.0 million 5-year tranche maturing on September 22, 2026, and a $200.0 million 5.5-year tranche maturing on
March 22, 2027.
On May 11, 2022, the Company transitioned its Amended Revolving Credit Agreement and Amended Term Loan Agreement
from 1-Month LIBOR to 1-Month Term SOFR.
On June 3, 2022, in connection with and upon effectiveness of the Note Purchase Agreement (as defined below) and in
accordance with the terms of the Amended Term Loan Credit Agreement and Amended Revolving Credit Agreement, each of
the administrative agents under such agreements released all of the subsidiary guarantors from their guaranty obligations that
were previously made for the benefit of the lenders under such agreements.
Senior Notes
On August 11, 2022, the Company issued $250.0 million aggregate principal amount of senior notes in a private placement, of
which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii)
$100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with
the Series A Notes, the "Notes") pursuant to a note purchase agreement (the "Note Purchase Agreement"), dated June 3, 2022,
between the Company and the various purchasers named therein. The Notes were issued at par in accordance with the Note
Purchase Agreement and pay interest semiannually on February 11th and August 11th until their respective maturities.
The Company may prepay at any time all or any part of the Notes, in an amount not less than 5% of the aggregate principal
amount of any series of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount prepaid
plus accrued interest and a Make-Whole Amount (as defined in the Note Purchase Agreement). The Notes will be required to
be absolutely and unconditionally guaranteed by certain subsidiaries of the Company that guarantee certain material credit
facilities of the Company. Currently, there are no subsidiary guarantees of the Notes.
F-21
The following table summarizes the Company's debt as of December 31, 2023 and 2022:
Maturity Date
Interest
Rate Type
As of December 31, 2023
Amount
Interest Rate
As of December 31, 2022
Amount
Interest Rate
Mortgages Payable
Fixed rate mortgages payable
Variable rate mortgages payable
Various
11/2/2024
Fixed
Variable
$
4.01% (a)
1M SOFR
+1.65% (b)
96,080
72,468
3.95% (a)
—
$
Total
Term Loans
$200.0 million 5 years
$200.0 million 5 years
$200.0 million 5.5 years
$200.0 million 5.5 years
$200.0 million 5.5 years
Total
Senior Notes
9/22/2026
9/22/2026
3/22/2027
3/22/2027
3/22/2027
Fixed
Fixed
Fixed
Fixed
Fixed
2.81% (c)
2.81% (c)
2.77% (c)
2.76% (c)
4.99% (d)
$150.0 million Series A Notes
$100.0 million Series B Notes
8/11/2029
8/11/2032
Fixed
Fixed
5.07%
5.20%
Total
Revolving Line of Credit
$350.0 million total capacity
9/22/2025
Variable
Total debt
Debt discounts and issuance costs, net
Debt, net
1M SOFR +
1.14% (b)(e)
4.29%
168,548
100,000
100,000
50,000
50,000
100,000
400,000
150,000
100,000
250,000
2.71% (c)
2.72% (c)
2.77% (c)
2.76% (c)
1M SOFR +
1.30% (b)
5.07%
5.20%
—
1M SOFR +
1.14% (b)(e)
109,812
—
109,812
100,000
100,000
50,000
50,000
100,000
400,000
150,000
100,000
250,000
—
818,548
(3,980)
814,568
$
4.08%
759,812
(5,261)
754,551
$
(a)
Interest rates reflect the weighted average of the Company's mortgages payable.
(b) As of December 31, 2023 and 2022, 1-Month Term SOFR was 5.35% and 4.36%, respectively.
(c)
Interest rates reflect the fixed rates achieved through the Company's interest rate swaps.
(d) As of April 3, 2023, the variable portion was swapped to 3.69%, achieving a fixed rate of 4.99% through the maturity date.
(e)
Interest rate applies to drawn balance only. Additional annual facility fee of 0.15% applies to entire line of credit capacity.
The following table summarizes the scheduled maturities of the Company's mortgages payable as of December 31, 2023:
Scheduled maturities by year:
2024
2025
2026
2027
2028
Thereafter
Total
As of December 31, 2023
$
88,168
22,880
—
26,000
—
31,500
168,548
$
F-22
Interest Rate Swaps
As of December 31, 2023, the Company is party to five effective interest rate swap agreements and two interest rate forward
swap agreements, which address the periods between the maturity dates of the effective swaps and the maturity dates of the
Amended Term Loan Agreement. In tandem, the interest rate swaps achieve fixed interest rates for a constant notional amount
through the maturity dates of the Amended Term Loan Agreement.
On January 18, 2023, the Company acquired IAGM's two interest rate swap agreements, which achieve fixed interest rates on
an aggregate notional amount of $75.0 million of the assumed pooled mortgage, each priced in 1-Month Term SOFR. The two
acquired interest rate swap agreements expired at the maturity date of November 2, 2023.
On March 16, 2023, the Company entered into one interest rate swap agreement with a notional amount of $100.0 million at
3.69%, achieving a fixed interest rate of 4.99%. As of the effective date of April 3, 2023, the entirety of the Company's variable
rate term loans were swapped to fixed rates through the maturity dates of the Amended Term Loan Agreement.
The following table summarizes the Company's five effective and two forward interest rate swaps as of December 31, 2023:
Interest Rate Swaps
5.5 Year Term Loan
5.5 Year Term Loan
5.5 Year Term Loan
5 Year Term Loan
5 Year Term Loan
5.5 Year Term Loan
5.5 Year Term Loan
$
$
Notional
Amount
50,000
50,000
100,000
100,000
100,000
400,000
Company Receives
Variable Rate of
1-Month SOFR
1-Month SOFR
1-Month SOFR
1-Month SOFR
1-Month SOFR
Company Pays
Fixed Rate of
1.47%
1.46%
3.69%
1.51%
1.51%
Fixed Rate
Achieved
2.77%
2.76%
4.99%
2.81%
2.81%
Effective Date Maturity Date
Dec 2, 2019
Dec 2, 2019
Apr 3, 2023
Dec 21, 2023
Dec 21, 2023
Jun 21, 2024
Jun 21, 2024
Mar 22, 2027
Sep 22, 2026
Sep 22, 2026
50,000
1-Month SOFR
50,000
100,000
1-Month SOFR
1.48%
1.54%
2.78%
Jun 21, 2024
Mar 22, 2027
2.84%
Jun 21, 2024
Mar 22, 2027
The following table summarizes the Company's four effective and four forward interest rate swaps as of December 31, 2022:
Interest Rate Swaps
5 Year Term Loan
5 Year Term Loan
5.5 Year Term Loan
5.5 Year Term Loan
5 Year Term Loan
5 Year Term Loan
5.5 Year Term Loan
5.5 Year Term Loan
Notional
Amount
100,000
100,000
50,000
50,000
300,000
100,000
100,000
50,000
50,000
300,000
$
$
$
Company Receives
Variable Rate of
1-Month SOFR
1-Month SOFR
1-Month SOFR
1-Month SOFR
Company Pays
Fixed Rate of
1.41%
1.42%
1.47%
1.46%
Fixed Rate
Achieved
2.71%
2.72%
2.77%
2.76%
Effective Date Maturity Date
Dec 2, 2019
Dec 2, 2019
Dec 2, 2019
Dec 2, 2019
Dec 21, 2023
Dec 21, 2023
Jun 21, 2024
Jun 21, 2024
1-Month SOFR
1-Month SOFR
1-Month SOFR
1-Month SOFR
1.51%
1.51%
1.48%
1.54%
2.81%
2.81%
2.78%
2.84%
Dec 21, 2023
Dec 21, 2023
Jun 21, 2024
Jun 21, 2024
Sep 22, 2026
Sep 22, 2026
Mar 22, 2027
Mar 22, 2027
The following table summarizes the effects of derivative financial instruments on the consolidated financial statements:
Location and amount of gain
recognized in accumulated
comprehensive income
Location and amount of gain (loss)
reclassified from accumulated
comprehensive income into net income (loss)
Total interest expense presented in the
consolidated statements of operations in which
the effects of cash flow hedges are recorded
2023
2022
2021
2023
2022
2021
2023
2022
2021
Unrealized
gain on
derivatives
$
6,228 $ 32,052 $
3,795
Interest
expense,
net
$ 14,875 $
1,009 $
(4,332)
Interest
expense,
net
$ 38,138 $ 26,777 $ 16,261
F-23
9. Fair Value Measurements
Recurring Measurements
The following financial instruments are remeasured at fair value on a recurring basis:
Cash Flow Hedges: (a) (b)
December 31, 2023 (c)
December 31, 2022 (d)
Derivative interest rate swaps
— $
18,074
—
— $
26,721
—
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Fair Value Measurements as of
(a) During the twelve months subsequent to December 31, 2023, an estimated $10,275 of derivative interest rate balances recognized in
accumulated comprehensive income will be reclassified into earnings.
(b) As of December 31, 2023 and 2022, the Company determined that the credit valuation adjustments associated with nonperformance risk are
not significant to the overall valuation of its derivatives. As a result, the Company's derivative valuations in their entirety are classified as
Level 2 of the fair value hierarchy.
(c) The Company's derivative assets or liabilities are recognized as a part of deferred costs and other assets, net or other liabilities, respectively.
(d) The Company's derivative assets or liabilities are recognized as a part of deferred costs and other assets, net or other liabilities, respectively.
IAGM's derivative assets or liabilities were recognized as a part of investment in unconsolidated entities.
Level 1
At December 31, 2023 and 2022, the Company had no Level 1 recurring fair value measurements.
Level 2
To calculate the fair value of the derivative interest rate instruments, the Company primarily uses quoted prices for similar
contracts and inputs based on data that are observed in the forward yield curve that is widely observable in the marketplace. The
Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the
respective counterparty’s nonperformance risk in the fair value measurements that utilize Level 3 inputs, such as estimates of
current credit spreads.
Level 3
At December 31, 2023 and 2022, the Company had no Level 3 recurring fair value measurements.
Non-Recurring Measurements
Investment Properties
During the years ended December 31, 2023 and 2022, the Company had no Level 3 nonrecurring fair value measurements.
Financial Instruments Not Measured at Fair Value
The following table summarizes the estimated fair value of financial instruments presented at carrying values in the Company's
consolidated financial statements as of December 31, 2023 and 2022:
December 31, 2023
Estimated
Fair Value
Carrying Value
Market
Interest Rate
Carrying Value
December 31, 2022
Estimated
Fair Value
Market
Interest Rate
Mortgages payable
$
168,548 $
Senior notes
Term loans
Revolving line of credit
250,000
400,000
—
161,320
233,635
399,539
—
6.86 % $
109,812 $
6.31 %
5.10 %
N/A
250,000
400,000
—
100,218
235,820
401,470
—
6.81 %
6.05 %
5.11 %
N/A
The market interest rates used to estimate the fair value of the Company's mortgages payable, senior notes, term loans, and
revolving line of credit reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar
to that of the Company's. The Company classifies its debt instrument valuations within Level 2 of the fair value hierarchy.
F-24
10. Earnings Per Share and Equity Transactions
Basic earnings per share ("EPS") is computed by dividing net income or loss attributed to common shares by the weighted
average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that may occur from
awards issued pursuant to the stock-based compensation plans.
The following table reconciles the amounts used in calculating basic and diluted EPS:
Numerator:
Net income (loss) attributed to common shares
Earnings allocated to unvested restricted shares
Net income (loss) attributed to common shares - basic and diluted
Denominator:
Weighted average common shares outstanding - basic
Dilutive effect of unvested restricted shares (a)
Weighted average common shares outstanding - diluted
Basic and diluted earnings per common share:
Net income (loss) per common share - basic
Net income (loss) per common share - diluted
Year ended December 31,
2022
2021
2023
$
$
5,269 $
—
5,269 $
52,233 $
—
52,233 $
(5,360)
—
(5,360)
67,531,898
281,282
67,813,180
67,406,233
119,702
67,525,935
71,072,933
—
71,072,933
$
$
0.08 $
0.08 $
0.77 $
0.77 $
(0.08)
(0.08)
(a) For the year ended December 31, 2021, unvested restricted shares were anti-dilutive.
ATM Program
On March 7, 2022, the Company established an at-the-market equity offering program (the "ATM Program") through which the
Company may sell from time to time up to an aggregate of $250.0 million of its common stock. In connection with the ATM
Program, the Company may sell shares of its common stock to or through sales agents, or may enter into separate forward sale
agreements with one of the agents, or one of their respective affiliates, as a forward purchaser.
During the quarter ended December 31, 2023, the Company raised $5.4 million of net proceeds under the ATM Program, after
$0.1 million in commissions, through the issuance of 208,040 shares of common stock at a weighted average price of $26.13
per share. As of December 31, 2023, $244.6 million of common stock remains available for issuance under the ATM Program.
Share Repurchase Programs
On February 23, 2022, the Company established a share repurchase program (the "SRP") of up to $150.0 million of the
Company's outstanding shares of common stock. The SRP may be suspended or discontinued at any time, and does not obligate
the Company to repurchase any dollar amount or particular amount of shares. As of December 31, 2023, the Company has not
repurchased any common stock under the SRP.
During the year ended December 31, 2021, the Company repurchased 755,643 shares of the Company's outstanding common
stock at a price per share of $21.70, reflecting a 25% discount to an estimated Net Asset Value ("NAV") per share of $28.90 as
of December 1, 2020 established by the Company's Board.
F-25
11. Stock-Based Compensation
Incentive Award Plan
The Company is authorized to issue or transfer up to 3,000,000 shares (the "Share Limit") of the Company's common stock
pursuant to awards granted under the Incentive Award Plan. As of December 31, 2023, 536,429 shares were available for future
issuance under the Incentive Award Plan. Outstanding restricted stock unit ("RSU") awards are categorized as either time-based
awards, performance-based awards, or market-based awards. All awards are granted at fair value, earn dividends throughout the
vesting period, and have no voting rights.
Market-based awards are valued as of the grant date utilizing a Monte Carlo simulation model that assesses the probability of
satisfying certain market performance thresholds over a three year performance period.
The following table summarizes the Company's significant assumptions used in the Monte Carlo simulation models:
Volatility
Risk free interest rate
Dividend Yield
At Grant Date
2023
34.00%
4.45%
3.20%
2022
33.89%
0.79 % - 1.76%
3.24%
The following table summarizes the Company's RSU activity during the years ended December 31, 2023, 2022, and 2021:
Outstanding as of January 1, 2021
Shares granted
Shares vested
Shares forfeited
Outstanding as of December 31, 2021
Shares granted
Shares vested
Unearned performance shares added back to Share Limit
Shares forfeited
Outstanding as of December 31, 2022
Shares granted
Shares vested
Unearned performance shares added back to Share Limit
Shares forfeited
Outstanding as of December 31, 2023
Employee Stock Purchase Plan
Unvested Time-
Based RSUs
110,382
Unvested Performance
and Market-Based RSUs
332,095
Weighted Average Grant
Date Price Per Share
$31.40
209,539
(167,806)
(13,880)
138,235
127,862
(135,491)
—
(7,179)
123,427
152,393
(126,885)
—
(1,343)
147,592
218,835
—
(79,562)
471,368
396,338
(76,520)
(61,102)
(18,033)
712,051
445,828
(60,042)
(69,803)
(3,263)
1,024,771
$28.90
$30.04
$30.73
$30.12
$18.97
$29.36
$31.40
$23.42
$23.35
$18.40
$29.50
$31.40
$19.51
$19.36
Employees may purchase up to an aggregate of 3,300,000 shares of the Company's common stock under the ESPP, of which
3,288,272 shares remain available as of December 31, 2023.
The following table summarizes the Company's common stock activity under the ESPP:
Shares purchased
Issuance price
Issuance proceeds
F-26
Year ended
December 31, 2023
11,728
$20.07
$235
Stock-Based Compensation Expense
The following table summarizes the Company's stock-based compensation expense:
Incentive Award Plan, net (a)
Employee Stock Purchase Plan (b)
Stock-based compensation expense, net
2023
Year ended December 31,
2022
2021
$
$
8,953 $
68
9,021
2
1$
6,541 $
—
6,541 $
9,116
—
9,116
(a) As of December 31, 2023, there was $9,975 of total estimated unrecognized compensation expense related to the Incentive Award Plan
which will be recognized through December 2025.
(b) As of December 31, 2023, there was $205 of total estimated unrecognized compensation expense related to the ESPP which will be
recognized through June 2025.
12. Commitments and Contingencies
Legal Matters
The Company is subject, from time to time, to various types of third-party legal claims or litigation that arise in the ordinary
course of business, including, but not limited to, property loss claims, personal injury or other damages resulting from contact
with the Company's properties. These claims and lawsuits and any resulting damages are generally covered by the Company's
insurance policies. The Company accrues for legal costs associated with loss contingencies when these costs are probable and
reasonably estimable. While the resolution of these matters cannot be predicted with certainty, based on currently available
information, management does not expect that the final outcome of any pending claims or legal proceedings will have a
material adverse effect on the financial condition, results of operations or cash flows of the Company.
Captive Insurance Company
In April 2023, the Company formed a wholly-owned captive insurance company (the "Captive") which provides insurance
coverage for all losses below the deductibles of the Company’s third party liability insurance policies relating to wind, flood,
named windstorm, earthquake, fire, and other property-related perils. The Company formed the Captive as part of its overall
risk management program and to stabilize insurance costs, manage exposures, and recoup expenses through the function of the
captive program. The Captive is capitalized in accordance with the applicable regulatory requirements. As of December 31,
2023, the Captive had no outstanding or unpaid claims.
Operating Lease Commitments
The Company is the lessee under various operating leases for corporate office space for which the Company recognizes right-
of-use (“ROU”) assets and related lease liabilities.
The following table summarizes the Company's operating lease arrangements as of December 31, 2023 and 2022:
Operating lease ROU assets
Operating lease ROU accumulated amortization
Operating lease liabilities
Balance Sheet Caption
Deferred costs and other assets, net
Deferred costs and other assets, net
Other liabilities
December 31, 2023
3,220
(967)
3,023
$
$
$
December 31, 2022
3,220
(570)
3,265
$
$
$
As of
Weighted-average remaining lease term
Weighted-average discount rate
6.0 years
4.47 %
6.7 years
4.35 %
The following table summarizes the Company's operating lease arrangements for the years ended December 31, 2023 and 2022:
Statement of Operations and
Comprehensive Income (Loss) Caption
Year ended December 31,
2023
2022
Minimum lease payments
Variable lease payments
Short-term lease payments
Total lease cost
General and administrative
General and administrative
General and administrative
F-27
$
$
570 $
298
114
982 $
528
343
97
968
The following table summarizes the Company's future minimum operating lease obligations as of December 31, 2023:
Scheduled minimum payments by year:
2024
2025
2026
2027
2028
Thereafter
Total expected minimum lease obligation
Less: Amount representing interest (a)
Present value of net minimum lease payments
Future Minimum Lease Payments
$
$
628
511
517
529
522
786
3,493
(470)
3,023
(a)
Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company's
incremental borrowing rate.
13. Subsequent Events
In preparing its consolidated financial statements, the Company evaluated events and transactions occurring after December 31,
2023 through the date the financial statements were issued for recognition and disclosure purposes.
On February 1, 2024, the Company acquired The Plant, a 57,000 square foot neighborhood center, anchored by Sprouts
Farmers Market, in Chandler, Arizona for a gross acquisition price of $29.5 million. The Company used cash on hand and
assumed $13.0 million of existing mortgage debt to fund the acquisition.
F-28
PROPERTY NAME
Location
Antoine Town Center
Houston, TX
Bay Colony
Houston, TX
Bay Landing
Bonita Springs, FL
Bear Creek Village Center
Wildomar, CA
Bent Tree Plaza
Raleigh, NC
Blackhawk Town Center
Houston, TX
Buckhead Crossing
Atlanta, GA
Campus Marketplace
San Marcos, CA
Cary Park Town Center
Cary, NC
Commons at University
Place
Durham, NC
Coweta Crossing
Newnan, GA
Custer Creek Village
Richardson, TX
Cyfair Town Center
Houston, TX
Eastfield Village
Charlotte, NC
Eldorado Marketplace
Frisco, TX
Eldridge Town Center &
Windermere Village
Houston, TX
Escarpment Village
Austin, TX
Garden Village
San Pedro, CA
Gateway Market Center
St. Petersburg, FL
Kennesaw Marketplace
Kennesaw, GA
Kyle Marketplace
Kyle, TX
INVENTRUST PROPERTIES CORP.
Schedule III - Real Estate and Accumulated Depreciation
(amounts stated in thousands)
Initial Cost (A)
Gross amount at which carried at end of period
Encumbrance
Land
Buildings and
Improvements
Adjustments to
Land Basis (B)
Adjustments to
Basis (B)
Land
Buildings and
Improvements
Total (C)
Accumulated
Depreciation
(D,E)
Year
Acquired
$
— $
5,327 $
14,333 $
— $
(612) $
5,327 $
13,721 $
19,048 $
2,524
2020
38,276
—
—
—
—
—
—
—
—
—
—
8,287
1,687
3,523
1,983
10,265
41,714
9,283
12,384
7,093
6,156
7,565
27,104
26,928
43,445
5,555
17,280
3,198
1,143
4,750
17,909
4,590
12,245
28,163
16,184
48,566
2,327
14,321
15,732
49,311
—
—
—
—
—
—
—
—
—
55
—
—
—
—
—
—
—
—
67
426
1,941
8,287
1,687
3,523
1,983
—
10,265
41,714
50,001
1,835
2023
9,350
11,037
666
2022
12,810
16,333
6,685
2009
9,034
6,156
11,017
16,421
4,619
2009
449
2023
3,527
7,565
30,631
38,196
15,491
2009
969
22
(8)
40
1,302
—
119
597
26,983
44,414
71,397
11,125
2017
5,555
17,302
22,857
4,087
2017
3,198
1,143
4,750
17,901
21,099
3,028
2019
4,630
5,773
2,637
2009
13,547
18,297
6,839
2007
16,184
48,566
64,750
2,036
2023
2,327
14,440
16,767
762
2022
15,732
49,908
65,640
7,652
2019
5,380
22,994
1,977
6,095
7,357
29,089
36,446
13,655
2005
26,000
19,641
51,763
—
227
19,641
51,990
71,631
3,939
2022
—
—
—
—
3,188
16,522
3,268
13,600
4,992
12,587
51,860
6,076
48,220
—
—
711
F-29
1,799
5,165
458
626
6,456
18,321
24,777
9,103
2009
13,600
10,157
23,757
3,692
2010
12,587
52,318
64,905
10,272
2018
6,787
48,846
55,633
10,583
2017
INVENTRUST PROPERTIES CORP.
Schedule III - Real Estate and Accumulated Depreciation
(amounts stated in thousands)
Initial Cost (A)
Gross amount at which carried at end of period
Encumbrance
Land
Buildings and
Improvements
Adjustments to
Land Basis (B)
Adjustments to
Basis (B)
Land
Buildings and
Improvements
Total (C)
Accumulated
Depreciation
(D,E)
Year
Acquired
$
— $
16,594 $
41,085 $
— $
(112) $
16,594 $
40,973 $
57,567 $
6,996
2019
1,200
7,591
6,274
21,303
12,545
8,902
15,200
20,947
(64)
—
—
—
(42)
824
502
1,136
7,591
6,232
7,368
3,385
2007
22,127
29,718
5,584
2016
12,545
9,404
21,949
2,613
2016
2,053
15,200
23,000
38,200
11,884
2009
1,742
6,502
4,158
10,368
5,900
16,870
22,770
3,381
2009
PROPERTY NAME
Location
Lakeside & Lakeside
Crossing
Winter Park, FL
Market at Westlake
Westlake Hills, TX
Northcross Commons
Charlotte, NC
Old Grove Marketplace
Oceanside, CA
Pavilion at La Quinta
LaQuinta, CA
Peachland Promenade
Port Charlotte, FL
PGA Plaza Palm Beach
Gardens
Palm Beach Gardens, FL
Plantation Grove
Ocoee, FL
Plaza Midtown
Atlanta, GA
Prestonwood Town Center
Dallas, TX
Renaissance Center
Durham, NC
Rio Pinar Plaza
Orlando, FL
River Oaks
Santa Clarita, CA
Riverview Village
Arlington, TX
Riverwalk Market
Flower Mound, TX
Rose Creek
Woodstock, GA
Sandy Plains Centre
Marietta, GA
Sarasota Pavilion
Sarasota, FL
Scofield Crossing
Austin, TX
Shops at Arbor Trails
Austin, TX
—
—
—
—
—
—
7,300
—
—
—
—
—
—
—
—
—
—
—
10,414
75,730
3,705
5,295
6,300
23,946
22,055
22,140
26,713
96,141
—
—
—
—
—
5,171
26,903
676
24,598
88,418
6,000
5,931
1,443
9,649
23,922
5,630
12,364
27,270
12,000
25,823
8,100
4,992
—
—
—
—
652
—
(576)
—
F-30
31,500
28,233
76,769
1,247
1,009
770
10,414
76,977
87,391
14,505
2018
3,705
5,295
7,309
11,014
2,521
2014
24,716
30,011
5,158
2017
(450)
22,055
21,690
43,745
2,468
2021
6,424
1,918
2,613
448
902
550
2,223
6,684
2,937
26,713
102,565
129,278
28,919
2016
5,847
28,821
34,668
8,127
2015
24,598
91,031
115,629
19,242
2017
6,000
5,931
1,443
10,097
16,097
5,575
2007
24,824
30,755
6,420
2016
6,180
7,623
3,208
2009
13,016
29,493
42,509
5,094
2018
12,000
32,507
44,507
13,823
2010
7,524
7,929
15,453
3,229
2007
144
28,233
76,913
105,146
6,027
2022
PROPERTY NAME
Location
Shops at Fairview Town
Center
Fairview, TX
Shops at the Galleria
Bee Cave, TX
Sonterra Village
San Antonio, TX
Southern Palm Crossing
Royal Palm Beach, FL
Stables Town Center
Houston, TX
Stevenson Ranch
Stevenson Ranch, CA
Stone Ridge Market
San Antonio, TX
Suncrest Village
Orlando, FL
Sycamore Commons
Matthews, NC
The Centre on Hugh
Howell
Tucker, GA
The Highlands of Flower
Mound
Flower Mound, TX
The Parke
Cedar Park, TX
The Pointe at Creedmoor
Raleigh, NC
The Shoppes at Davis Lake
Charlotte, NC
The Shops at Town Center
Germantown, MD
Thomas Crossroads
Newnan, GA
Travilah Square
Rockville, MD
University Oaks Shopping
Center
Round Rock, TX
Westfork Plaza & Paraiso
Parc
Pembroke Pines, FL
INVENTRUST PROPERTIES CORP.
Schedule III - Real Estate and Accumulated Depreciation
(amounts stated in thousands)
Initial Cost (A)
Gross amount at which carried at end of period
Encumbrance
Land
Buildings and
Improvements
Adjustments to
Land Basis (B)
Adjustments to
Basis (B)
Land
Buildings and
Improvements
Total (C)
Accumulated
Depreciation
(D,E)
Year
Acquired
$
— $
7,299 $
25,233 $
— $
1,117 $
7,299 $
26,350 $
33,649 $
4,126
2019
—
—
—
52,104
75,651
5,150
15,095
37,735
49,843
(597)
(181)
(745)
4,433
51,507
80,084
131,591
21,974
2016
880
4,969
15,975
20,944
4,456
2015
2,120
36,990
51,963
88,953
8,844
2019
6,029
5,899
20,439
—
—
8,400
—
—
22,880
—
—
—
—
—
—
—
—
29,519
39,190
8,935
6,742
38,754
6,403
12,500
31,265
2,250
11,091
6,330
9,271
7,507
6,232
24,374
83,078
5,454
12,903
19,998
29,776
1,622
8,964
8,322
39,836
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,899
20,439
26,338
889
2023
1,565
29,519
40,755
70,274
10,804
2016
(6,501)
11,308
8,935
6,742
32,253
41,188
1,477
2022
17,711
24,453
2,443
2014
2,277
12,500
33,542
46,042
16,873
2010
1,013
2,250
12,104
14,354
6,390
2007
(485)
1,371
82
—
1,110
1,944
607
6,330
9,271
7,507
6,232
23,889
30,219
1,852
2022
84,449
93,720
19,332
2017
5,536
13,043
1,670
2016
12,903
19,135
341
2023
19,998
30,886
50,884
7,525
2017
1,622
8,964
10,266
11,888
4,853
2009
40,443
49,407
5,914
2019
7,250
25,326
(170)
8,934
7,080
34,260
41,340
17,141
2010
28,267
124,019
—
6,129
28,267
130,148
158,415
31,238
2017
F-31
INVENTRUST PROPERTIES CORP.
Schedule III - Real Estate and Accumulated Depreciation
(amounts stated in thousands)
PROPERTY NAME
Location
Westpark Shopping Center
Glen Allen, VA
Windward Commons
Alpharetta, GA
Total corporate assets
Total
Construction in progress
Total investment properties
Initial Cost (A)
Gross amount at which carried at end of period
Encumbrance
Land
Buildings and
Improvements
Adjustments to
Land Basis (B)
Adjustments to
Basis (B)
Land
Buildings and
Improvements
Total (C)
Accumulated
Depreciation
(D,E)
Year
Acquired
$
$
— $
7,462 $
24,164 $
(4) $
5,215 $
7,458 $
29,379 $
36,837 $
7,852
2013
—
—
168,548 $
$
12,823
—
685,679 $
—
685,679 $
13,779
—
1,844,726 $
—
1,844,726 $
(171)
—
8,989 $
—
8,989 $
881
3,619
111,391 $
5,889
117,280 $
12,652
—
694,668 $
—
694,668 $
14,660
3,619
1,956,117 $
5,889
1,962,006 $
27,312
3,619
2,650,785 $
5,889
2,656,674 $
4,138
1,382
461,352
—
461,352
2016
-
F-32
INVENTRUST PROPERTIES CORP.
Schedule III - Real Estate and Accumulated Depreciation
(amounts stated in thousands)
Notes to Schedule III
The aggregate cost of real estate owned at December 31, 2023 for federal income tax purposes was approximately $2,996,600 (unaudited).
(A)
(B)
The initial cost to the Company represents the original purchase price of the asset, including amounts incurred subsequent to acquisition which were contemplated at the time
the property was acquired.
Cost capitalized subsequent to acquisition includes additional tangible costs associated with investment properties. Amount also includes impairment charges recorded
subsequent to acquisition to reduce basis.
(C)
Reconciliation of total investment properties:
Balance at January 1,
Acquisitions and capital improvements
Disposals and write-offs of assets no longer in service
Balance at December 31,
(D)
Reconciliation of accumulated depreciation:
Balance at January 1,
Depreciation expense
Disposal and write-offs of assets no longer in service
Balance at December 31,
(E)
Depreciation is computed based upon the following estimated lives:
Buildings and other improvements
Tenant improvements
Furniture, fixtures and equipment
15 - 30 years
Life of the lease
3 - 20 years
2023
2022
2021
2,481,662 $
191,666
(16,654)
2,656,674 $
2,273,103 $
307,177
(98,618)
2,481,662 $
2,221,689
71,324
(19,910)
2,273,103
2023
2022
2021
389,361 $
78,560
(6,569)
461,352 $
350,256 $
71,428
(32,323)
389,361 $
292,248
66,275
(8,267)
350,256
$
$
$
$
F-33