EDGAR 10-K Filing

Company CIK: 894315
Filing Year: 2023
Filename: 894315_10-K_2023_0000950170-23-003924.json

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ITEM 1. BUSINESS
Item 1. BUSINESS
Overview
SITE Centers Corp., an Ohio corporation (the “Company” or “SITE Centers”), is a self-administered and self-managed Real Estate Investment Trust (“REIT”) engaged in the business of owning, leasing, acquiring, redeveloping, developing and managing shopping centers. Unless otherwise provided, references herein to the Company or SITE Centers include SITE Centers Corp. and its wholly-owned subsidiaries and consolidated and unconsolidated joint ventures.
The Company is self-administered and self-managed, and therefore, has not engaged, nor does it expect to retain, any REIT advisor. The Company manages all of its shopping centers which are collectively referred to herein as the "Portfolio Properties". At December 31, 2022, the Company owned 119 shopping centers (including 18 shopping centers owned through unconsolidated joint ventures) aggregated 27.0 million square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture). At December 31, 2022, the aggregate occupancy of the Company’s operating shopping center portfolio was 92.4% on a pro rata basis, and the average annualized base rent per occupied square foot was $19.52, on a pro rata basis.
The primary source of the Company’s income is generated from the rental of the Company’s Portfolio Properties to tenants. In addition, the Company generates revenue from its management contracts with its unconsolidated joint ventures and, in 2021 and 2020, from its management contract with Retail Value Inc. ("RVI").
On July 1, 2018, SITE Centers completed the spin-off of RVI. At the time of the spin-off, RVI owned 48 shopping centers, composed of 36 assets in the continental U.S. and 12 assets in Puerto Rico, representing $2.7 billion of gross book asset value and 16 million square feet of GLA. On April 12, 2022, RVI sold its last asset, and the Company is currently engaged by RVI to administer the wind-up of RVI's business.
Strategy
The overall investment, operating and financing policies of the Company, which govern a variety of activities, such as capital allocations, dividends and status as a REIT, are determined by management and the Board of Directors. Although management and the Board of Directors have no present intention to materially amend or revise the Company’s policies, the Board of Directors may do so from time to time without a vote of the Company’s shareholders.
The Company's mission is to own and manage open-air shopping centers located in suburban, high household income communities. The Company strives to deliver total shareholder returns through earnings and cash flow growth, a sustainable dividend and a strong balance sheet that is well positioned through various economic cycles.
Looking forward, growth opportunities within the Company's core property operations include rental rate increases, continued lease-up of the portfolio and the adaptation of existing site plans and square footage to generate higher blended rental rates and operating cash flows. Additional growth opportunities include acquisitions and tactical redevelopment. Management intends to use retained cash flow, proceeds from the sale of lower growth assets and proceeds from equity offerings and debt financings to fund capital expenditures relating to new leasing activity, acquisitions, opportunistic investments and tactical redevelopment activity. In recent years, the Company’s acquisition activities have largely focused on unanchored, convenience retail properties that offer enhanced prospects for cash flow growth through rent increases and lower capital expenditure requirements.
The Company believes the following serve as cornerstones for the execution of its strategy:
•Maximization of recurring cash flows through strong leasing and core property operations;
•Growth in Company cash flows through capital recycling, especially the redeployment of capital from mature, slower growing assets into acquisitions that offer greater prospects for growth in property-level cash flows;
•Enhancement of property cash flows through creative, proactive tactical redevelopment efforts that result in the profitable adaptation of site plans to better suit retail tenant and community demands;
•Risk mitigation through continuous focus on maintaining prudent leverage levels and lengthy average debt maturities, as well as access to a diverse selection of capital sources, including the secured and unsecured debt markets, unsecured lines of credit, common equity and capital from a wide range of joint venture partners and
•Sustainability of growth through a constant focus on relationships with employee, community and investor constituencies.
COVID-19 Pandemic
In March 2020, the World Health Organization categorized COVID-19 as a pandemic, which had significant impact on the Company’s collections rates in 2020. The Company’s collection rates improved throughout 2021, and collection rates in 2022 were generally consistent with pre-pandemic levels. The Company's tenants, including tenants previously on the cash basis of accounting, are paying their monthly rent in a manner consistent with periods prior to the COVID-19 pandemic and have generally repaid deferred rents relating to prior periods. As of December 31, 2022, the COVID-19 related rent deferral arrangements for tenants that are not accounted for on the cash basis have been repaid. Included in 2022 and 2021 results was $3.6 million and $13.8 million of prior-period rental revenue, at SITE Centers’ share, respectively, primarily from cash-basis tenants.
Any new surges in contagion or new COVID-19 variants could adversely impact the Company’s ability to lease space and collect rents. Certain tenant categories remain especially vulnerable to the impact of the COVID-19 pandemic, including movie theaters, fitness centers and restaurants that rely on in-person dining, activities and entertainment. For a further discussion of the impact of the COVID-19 pandemic on the Company’s business, see Item 1A. Risk Factors in Part I of this Report on Form 10-K and “Liquidity, Capital Resources and Financing Activities” and “Economic Conditions” included in Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations in Part II of this Report on Form 10-K.
Narrative Description of Business
The Company’s portfolio as of December 31, 2022, consisted of 119 shopping centers (including 18 centers owned through unconsolidated joint ventures) located in 20 states. The following tables present the operating statistics affecting base and percentage rental revenues summarized by the following portfolios: pro rata combined shopping center portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio:
Pro Rata Combined
Shopping Center Portfolio
December 31,
Centers owned (at 100%)
Aggregate occupancy rate
92.4
%
90.0
%
Average annualized base rent per occupied square foot
$
19.52
$
18.33
Wholly-Owned
Shopping Centers
December 31,
Joint Venture
Shopping Centers
December 31,
Centers owned
Aggregate occupancy rate
92.6
%
90.0
%
90.7
%
89.4
%
Average annualized base rent per occupied
square foot
$
19.61
$
18.52
$
16.20
$
15.15
Recent Developments
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K, which are incorporated herein by reference, for information on certain recent developments of the Company.
Tenants and Competition
The Company has established close relationships with a large number of major national and regional tenants. The Company’s management is associated with, and actively participates in, many shopping center and REIT industry organizations. Notwithstanding these relationships, numerous real estate companies and developers, private and public, compete with the Company in leasing space in shopping centers to tenants. The Company competes with other real estate companies and developers in terms of rental rate, property location, availability of space, management services and property condition.
The Company’s five largest tenants based on the Company’s aggregate annualized base rental revenues, including its proportionate share of joint venture aggregate annualized base rental revenues, are TJX Companies, Inc., Dick's Sporting Goods, Inc., PetSmart, Inc., Michaels Companies, Inc. and Ross Stores, Inc., representing 5.9%, 2.7%, 2.4%, 2.2% and 2.1%, respectively, of the Company’s aggregate annualized base rental revenues at December 31, 2022. For more information on the Company’s tenants, see
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Company Fundamentals.”
Qualification as a Real Estate Investment Trust
As of December 31, 2022, the Company met the qualification requirements of a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company, with the exception of its taxable REIT subsidiary (“TRS”), will not be subject to federal income tax to the extent it meets certain requirements of the Code.
Human Capital Management
As of December 31, 2022, the Company’s workforce was composed of 267 full-time equivalent employees compared to 293 full-time equivalent employees at December 31, 2021. At the end of 2022, the Company’s workforce was approximately 37% male and 63% female, and women represented approximately 46% of the Company’s managers (defined by reference to the EEO-1 job class categories to include executive/senior-level officials and managers and first/mid-level officials and managers). The ethnicity of the Company’s workforce at the end of 2022 was approximately 77% White, 14% Black, 4% Hispanic, 2% Asian and 3% other (based on EEO categories). Of the Company’s employees, 71% of employees were assigned to work in the corporate headquarters in Beachwood, Ohio, with the rest working in regional offices or remotely. Many of the Company’s employees have a long tenure with the Company, with approximately 79% of the Company’s employees having been with the Company for over 5 years and 53% for over 10 years.
The Company’s primary human capital management objective is to attract, develop, engage and retain the highest quality talent. To support this objective, the Company offers competitive pay and benefit programs, a broad focus on wellness and flexible work arrangements designed to allow employees to meet personal and family needs. The Company also takes steps to measure and improve upon its level of employee engagement and to create a diverse and inclusive workplace. The Company’s employees are expected to exhibit honest, ethical and respectful conduct in the workplace. At least once every two years the Company requires its employees to complete training modules on sexual harassment and discrimination and to acknowledge and certify their compliance with the Company’s Code of Business Conduct and Ethics. Senior members of its accounting, finance and capital markets and asset management departments are also required to acknowledge and agree to the Company’s Code of Ethics for Senior Financial Officers on an annual basis. The Company’s culture is also underpinned by its employees’ commitment to the Company’s core values of being Fearless, Authentic, Curious and Thoughtful (the Company’s "Matters of FACT") in the conduct of their responsibilities.
Employees returned to the Company's offices on a hybrid schedule in September 2022. The hybrid approach has allowed the Company to provide employees with flexibility for work/life balance while continuing to cultivate relationships and learning, which are key elements of the Company’s culture.
Information Technology and Cybersecurity
The Company depends on the proper functioning, availability and security of its information systems, including financial, data processing, communications and operating systems, as well as proprietary software programs that are important to the efficient operation of the business. The Company also utilizes certain software applications provided by third parties, grants access to certain of the Company’s systems to third parties who provide outsourced functions or other services and increasingly stores and transmits data by means of connected information technology or “cloud” systems. Any significant failures or other disruption of the Company’s critical information systems, including as a result of ransomware attacks or other cyber incidents, that impact the availability or other proper functioning of these systems or that result in the compromise of sensitive or confidential information, including information of tenants, employees and others, could result in liability to third parties and have a significant impact on the Company’s operations and reputation.
The frequency and sophistication of global cybersecurity threats have increased in recent years, primarily through phishing and ransomware campaigns. The Company’s objective for managing increasing cybersecurity risk is to avoid or minimize the impacts of external threat events or other efforts to breach the Company’s systems. The Company works to achieve this objective by hardening its networks and systems against attack. The Company has a formal process in place for incident response and business continuity, which the Company refers to as its Cybersecurity Incident Response Plan, which encompasses tactics related to cybersecurity, systems and facilities availability and information privacy. The Company has established an internal Security and Privacy Governance Committee comprised of members of management to help review and discuss cybersecurity matters on a periodic basis. The role of the committee is to oversee the development and implementation of the Company’s Cybersecurity Incident Response Plan, to discuss the implementation of various security measures and to receive reports on the Company’s cybersecurity training and awareness program and engagement of third parties to conduct periodic external security testing. The Company’s audit services and technology teams conduct third-party risk assessments during the procurement of solutions and services and annually on agreement renewal. As a complement to these measures, the Company also conducts annual cybersecurity awareness training for all employees, new-hire
cybersecurity training, periodic simulated phishing tests and additional training for employees who travel outside the United States. The Company’s Audit Committee is briefed on information security matters, including current data security and recovery initiatives and external security testing results, at least once each year by senior members of the Company’s information technology and audit services teams.
The Company’s information technology systems are protected through physical and software safeguards, as well as backup systems the Company considers to be appropriate. However, such safeguards may ultimately prove to be insufficient to protect against all incidents the Company experiences. Furthermore, these systems are vulnerable to interruption from events beyond the Company’s control. To mitigate the potential for such occurrences at the Company’s primary data center, the Company has implemented various systems, including redundant telecommunication facilities, replication of critical data and backups to multiple off-site locations, a fire suppression system to protect the Company’s on-site data center and electrical power protection and generation facilities. The Company also has a catastrophic disaster recovery plan and alternate processing capability available for its critical data processes in the event of a catastrophe that renders the primary data center unusable.
The Company has not experienced any cyber-incidents that have materially obstructed the availability of its information systems and data. The Company has experienced incidents involving malware, email phishing and other events intended to disrupt information systems, wrongfully obtain valuable information or cause other types of malicious events that could have resulted in harm to the business, but to the Company’s knowledge, the various protections the Company has employed have been effective in identifying these types of events at a point when the impacts on the business could be minimized.
The Company also maintains cybersecurity insurance; however, there is no assurance that the insurance the Company maintains will cover all cybersecurity breaches or that policy limits will be sufficient to cover all related losses.
Corporate Responsibility and Sustainability
Detailed information regarding the Company’s approach to sustainability can be found on the Company's website in its Corporate Responsibility and Sustainability Report. This report is based on the Global Reporting Initiative (GRI) standard, which summarizes environmental and social performance, and includes disclosures with respect to certain Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Disclosures (TCFD) standards. The content of the Company’s sustainability report is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document filed with the SEC, unless expressly noted.
Information About the Company’s Executive Officers
The section below provides information regarding the Company’s executive officers as of February 15, 2023:
David R. Lukes, age 53, has served as President and Chief Executive Officer of SITE Centers and has been a member of SITE Centers’ Board of Directors since March 2017. Prior to joining SITE Centers, Mr. Lukes served as Chief Executive Officer and President of Equity One, Inc., an owner, developer and operator of shopping centers, from June 2014 until March 2017 and served as its Executive Vice President from May 2014 to June 2014. Mr. Lukes also served as President and Chief Executive Officer of Sears Holding Corporation affiliate Seritage Realty Trust, a REIT primarily engaged in the re-leasing of shopping centers, from 2012 through April 2014 and as President and Chief Executive Officer of Olshan Properties, a privately-owned real estate firm specializing in commercial real estate, from 2010 through 2012. From 2002 to 2010, Mr. Lukes served in various senior management positions at Kimco Realty Corporation, including serving as its Chief Operating Officer from 2008 to 2010. Mr. Lukes has also served as the President, Chief Executive Officer and Director of RVI since April 2018 and as an Independent Director of Citycon Oyj, an owner and manager of shopping centers in the Nordic region listed on the Nasdaq Helsinki stock exchange, since 2017. Mr. Lukes also serves as a member of the Advisory Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). Mr. Lukes holds a Bachelor of Environmental Design from Miami University, a Master of Architecture from the University of Pennsylvania and a Master of Science in real estate development from Columbia University.
Conor M. Fennerty, age 37, has served as Executive Vice President, Chief Financial Officer and Treasurer of SITE Centers since November 2019. From April 2017 to November 2019, Mr. Fennerty served as SITE Centers’ Senior Vice President of Capital Markets. Mr. Fennerty has also served as Executive Vice President of RVI since November 2020 and Director of RVI since July 2022. Prior to joining SITE Centers, Mr. Fennerty served as a Vice President and Senior Analyst at BlackRock, Inc., a global funds manager, from July 2014 to April 2017, an Analyst at Cohen & Steers Capital Management, a specialist asset manager focused on real assets, from May 2012 to July 2014, and prior to that, a member of the global investment research division of Goldman Sachs from May 2010 to May 2012. Mr. Fennerty earned a Bachelor of Science in Business Administration with a major in finance from Georgetown University.
Christa A. Vesy, age 52, is Executive Vice President and Chief Accounting Officer of SITE Centers, a position she assumed in March 2012. From July 2016 to March 2017, Ms. Vesy also served as SITE Centers’ Interim Chief Financial Officer. In these roles, Ms. Vesy has overseen the property and corporate accounting, tax and financial reporting functions for SITE Centers. Previously, Ms. Vesy served as Senior Vice President and Chief Accounting Officer of SITE Centers since November 2006. Ms. Vesy has also served as Chief Financial Officer and Treasurer of RVI since November 2019, as its Executive Vice President and Chief Accounting Officer since February 2018 and as a Director since May 2021. Prior to joining SITE Centers, Ms. Vesy worked for The Lubrizol Corporation, where she served as manager of external financial reporting and then as controller for the lubricant additives business segment. Prior to joining Lubrizol, from 1993 to September 2004, Ms. Vesy held various positions with the Assurance and Business Advisory Services group of PricewaterhouseCoopers LLP, a registered public accounting firm, including Senior Manager from 1999 to September 2004. Ms. Vesy graduated with a Bachelor of Science in business administration from Miami University. Ms. Vesy is a certified public accountant (CPA) and member of the American Institute of Certified Public Accountants (AICPA).
John M. Cattonar, age 41, has served as Executive Vice President and Chief Investment Officer of SITE Centers since May 2021. Previously, Mr. Cattonar served as Senior Vice President of Investments of SITE Centers from April 2017 to May 2021. Prior to joining SITE Centers, Mr. Cattonar served as Vice President of Asset Management for Equity One from August 2015 to March 2017 and at Sears Holding Corporation affiliate Seritage Realty Trust from July 2012 to July 2015. Mr. Cattonar earned a Master of Science in Real Estate Development from Columbia University and holds a Bachelor of Arts in Economics from the University of North Carolina at Chapel Hill.
Corporate Headquarters
The Company is an Ohio corporation incorporated in 1992. The Company’s executive offices are located at 3300 Enterprise Parkway, Beachwood, Ohio 44122, and its telephone number is (216) 755-5500. The Company’s website is www.sitecenters.com. The Company uses the Investors Relations section of its website as a channel for routine distribution of important information, including press releases, analyst presentations and financial information. The information the Company posts to its website may be deemed to be material, and investors and others interested in the Company are encouraged to routinely monitor and review the information that the Company posts on its website in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts. The Company posts filings made with the SEC to its website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, including the Company’s annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K, respectively, the Company’s proxy statements and any amendments to those reports or statements. All such postings and filings are available on the Company’s website free of charge. In addition, this website allows investors and other interested persons to sign up to automatically receive e-mail alerts when the Company posts news releases and financial information on its website. The SEC also maintains a website (https://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The content on, or accessible through, any website referred to in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022, is not incorporated by reference into, and shall not be deemed part of, this Form 10-K unless expressly noted.

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ITEM 1A. RISK FACTORS
Item 1A. RISK FACTORS
Summary of Risk Factors
The following is a summary of material risks that could affect the Company’s business, results of operations, financial condition, liquidity and cash flows. The risks summarized below are discussed in greater detail in the risk factors that follow and are not the only risks the Company faces. The Company’s business operations could also be affected by additional factors that are not presently known to it or that the Company currently considers to be immaterial to its operations. Investors should carefully consider each of the following risks and all of the other information contained in this Annual Report on Form 10-K. If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be negatively affected.
Risks Related to the Company’s Business, Properties and Strategies
•The economic performance and value of the Company’s shopping centers depend on many factors, including the macro-economic climate and local conditions, each of which could have an adverse impact on the Company’s cash flows and operating results.
•E-commerce may continue to have an adverse impact on the Company’s tenants and business.
•The Company leases a substantial portion of its square footage to large national tenants, making it vulnerable to changes in the business and financial condition of, or demand for, its space by such tenants.
•The Company’s dependence on rental income may adversely affect its ability to meet its debt obligations and make distributions to shareholders.
•Inflationary pressures could adversely impact operating results.
•The Company’s expenses may remain constant or increase even if income from the Company’s properties decreases.
•Property ownership through partnerships and joint ventures could limit the Company’s control of those investments and reduce its expected return.
•The Company’s real estate assets may be subject to impairment charges.
•The Company’s acquisition activities may not produce the cash flows that it expects and may be limited by competitive pressures or other factors.
•Real estate property investments are illiquid; therefore, the Company may not be able to dispose of properties when desired or on favorable terms.
•The Company’s development, redevelopment and construction activities could affect its operating results.
•The Company’s real estate investments may contain environmental risks that could adversely affect its results of operations.
•Expectations relating to environmental, social and governance considerations expose the Company to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business.
•Health pandemics, including the COVID-19 pandemic, could have a significant impact on the Company and its tenants’ businesses.
•The Company’s properties could be subject to damage from natural disasters and weather-related factors; an uninsured loss on the Company’s properties or a loss that exceeds the limits of the Company’s insurance policies could subject the Company to lost capital or revenue on those properties.
•Violent crime, including terrorism and mass shootings, or civil unrest may affect the markets in which the Company operates its business and its profitability.
•A disruption, failure or breach of the Company’s networks or systems, including as a result of cyber-attacks, could harm its business.
Risks Relating to the Company’s Indebtedness and Capital Structure
•The Company depends on external sources of capital. Disruptions in the financial markets could affect the Company’s ability to obtain financing on reasonable terms and have other adverse effects on the Company and the market price of the Company’s common shares.
•Changes in the Company’s credit ratings or the debt markets, as well as market conditions in the credit markets, could adversely affect the Company’s publicly traded debt and credit facilities.
•The Company’s ability to increase its debt could adversely affect its cash flows.
•The Company’s cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of its debt financing.
•The Company’s financial condition could be adversely affected by financial covenants.
•The Company may incur significant debt prepayment costs as a result of repaying indebtedness prior to its stated maturity.
•The Company has variable-rate debt and interest rate risk.
Risks Related to the Company’s Taxation as a REIT
•If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income tax as a regular corporation and could have significant tax liability.
•Compliance with REIT requirements may negatively affect the Company’s operating decisions.
•The Company may be forced to borrow funds to maintain its REIT status, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause the Company to curtail its investment activities and/or to dispose of assets at inopportune times, which could materially and adversely affect the Company.
•Dividends paid by REITs generally do not qualify for reduced tax rates.
•Certain foreign shareholders may be subject to U.S. federal income tax on gain recognized on a disposition of the Company’s common shares if the Company does not qualify as a “domestically controlled” REIT.
•Legislative or other actions affecting REITs could have a negative effect on the Company.
Risks Related to the Company’s Organization, Structure and Ownership
•Provisions of the Company’s Articles of Incorporation and Code of Regulations could have the effect of delaying, deferring or preventing a change in control, even if that change may be considered beneficial by some of the Company’s shareholders.
•The Company has significant shareholders who may exert influence on the Company as a result of their considerable beneficial ownership of the Company’s common shares, and their interests may differ from the interests of other shareholders.
•The Company’s Board of Directors may change significant corporate policies without shareholder approval.
Risks Related to the Company’s Common Shares
•Changes in market conditions could adversely affect the market price of the Company’s publicly traded securities.
•The Company may issue additional securities without shareholder approval.
General Risks Relating to Investments in the Company’s Securities
•The Company may be unable to retain and attract key management personnel.
•The Company is subject to litigation that could adversely affect its results of operations.
•Changes in accounting standards issued by the Financial Accounting Standards Board ("FASB") or other standard-setting bodies may adversely affect the Company’s business.
The risks summarized above are discussed in greater detail below.
Risks Related to the Company’s Business, Properties and Strategies
The Economic Performance and Value of the Company’s Shopping Centers Depend on Many Factors, Including the Macro-Economic Climate and Local Conditions, Each of Which Could Have an Adverse Impact on the Company’s Cash Flows and Operating Results
The economic performance and value of the Company’s real estate holdings can be affected by many factors, including the following:
•Changes in the national, regional, local and international economic climate, including as a result of pandemics;
•Local conditions, such as an oversupply of space or a reduction in demand for real estate in the area and population, demographic and employment trends;
•The attractiveness of the properties to tenants;
•The increase in consumer purchases through the internet;
•The Company’s ability to provide adequate management services and to maintain its properties;
•Increased operating costs if these costs cannot be passed through to tenants and
•The expense of periodically renovating, repairing and re-letting spaces.
Because the Company’s properties consist of retail shopping centers, the Company’s performance is linked to general economic conditions in the retail market, including conditions that affect consumers’ purchasing behaviors and disposable income. The market for retail space historically has been, and may continue to be, adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, increases in consumer internet purchases and the excess amount of retail space in a number of markets. The Company’s performance is affected by its tenants’ results of operations, which are impacted by macroeconomic factors that affect consumers’ ability to purchase goods and services. If the price of the goods and services offered by its tenants materially increases, including as a result of inflationary pressures or increases in taxes or tariffs resulting from, among other things, potential changes in the Code, the operating results and the financial condition of the Company's tenants and demand for retail space could be adversely affected. To the extent that any of these conditions occur, they are likely to affect market rents for retail space. In addition, the Company may face challenges in the management and maintenance of its properties or incur increased operating costs, such as real estate taxes, insurance and utilities, that may make its properties unattractive to tenants.
In addition, the Company’s properties compete with numerous shopping venues, including regional malls, outlet centers, other shopping centers and e-commerce, in attracting and retaining retailers. As of December 31, 2022, leases at the Company’s properties (including the proportionate share of unconsolidated properties) were scheduled to expire on a total of approximately 5.0% of leased GLA during 2023. For those leases that renew, rental rates upon renewal may be lower than current rates. For those leases that do not renew, the Company may not be able to promptly re-lease the space on favorable terms or with reasonable capital investments. In these situations, the Company’s financial condition, operating results and cash flows could be adversely impacted.
E-Commerce May Continue to Have an Adverse Impact on the Company’s Tenants and Business
E-commerce has been broadly embraced by the public, including at an increased rate throughout the COVID-19 pandemic, and growth in the e-commerce share of overall consumer sales is likely to continue in the future. Some of the Company’s tenants have been negatively impacted by increasing competition from internet retailers, and this trend could affect the way current and future tenants lease space. For example, the migration toward e-commerce has led some omni-channel retailers to reduce the number and size of their traditional “brick and mortar” locations, use such locations for curbside pickup of items ordered online and increasingly rely on e-commerce and alternative distribution channels. The Company cannot predict with certainty how continuing growth in e-commerce will impact the demand for space at its properties or how much revenue will be generated at traditional store locations in the future. If the Company is unable to anticipate and respond promptly to trends in retailer and consumer behavior, or if demand for traditional retail space significantly decreases, the Company’s occupancy levels and operating results could be materially and adversely affected.
The Company Leases a Substantial Portion of Its Square Footage to Large National Tenants, Making It Vulnerable to Changes in the Business and Financial Condition of, or Demand for, Its Space by Such Tenants
As of December 31, 2022, the annualized base rental revenues of the Company’s tenants that are equal to or exceed 1.5% of the Company’s aggregate annualized shopping center base rental revenues, including its proportionate share of joint venture aggregate annualized shopping center base rental revenues, are as follows:
Tenant
% of Annualized Base
Rental Revenues
TJX Companies, Inc.
5.9%
Dick's Sporting Goods, Inc.
2.7%
PetSmart, Inc.
2.4%
Michaels Companies, Inc.
2.2%
Ross Stores, Inc.
2.1%
Bed Bath & Beyond Inc.
1.9%
Nordstrom, Inc.
1.8%
Gap Inc.
1.8%
Best Buy Co., Inc.
1.8%
Burlington Stores, Inc.
1.7%
Ulta Beauty, Inc.
1.7%
Kohl's Department Stores, Inc.
1.6%
The Kroger Co.
1.6%
AMC Entertainment Holdings, Inc.
1.6%
The retail shopping sector has been affected by economic conditions, including changing consumer behaviors following the COVID-19 pandemic, increases in consumer internet purchases and the competitive nature of the retail business and the competition for market share. In some cases, these shifts have resulted in weaker retailers losing market share and declaring bankruptcy, closing stores and/or taking advantage of early termination provisions in their leases. Over the past decade, bankruptcies, store closures and reduced expansion plans by conventional department stores and national chains have resulted in a smaller overall number of tenants requiring large store formats. In addition, movie theater operators have struggled to regain profitability following the onset of the COVID-19 pandemic and prospects for releasing any theater vacancies arising in the Company's portfolio may be limited absent the investment of significant capital to repurpose the space.
As information becomes available regarding the status of the Company’s leases with tenants in financial distress or as the future plans for their spaces change, the Company may be required to write off and/or accelerate depreciation and amortization expense associated with a significant portion of the tenant-related deferred charges in future periods. The Company’s income and ability to meet its financial obligations could also be adversely affected in the event of the bankruptcy, insolvency or significant downturn in the business of one of these tenants or any of the Company’s other major tenants. In addition, the Company’s results could be adversely affected if any of these tenants do not renew their leases as they expire on terms favorable to the Company or at all.
The Company’s Dependence on Rental Income May Adversely Affect Its Ability to Meet Its Debt Obligations and Make Distributions to Shareholders
Substantially all of the Company’s income is derived from rental income from real property. As a result, the Company’s performance depends on its ability to collect rent from tenants. The Company’s income and funds available for repayment of
indebtedness and distribution to shareholders would be negatively affected if a significant number of its tenants, or any of its major tenants, were to do the following:
•Experience a downturn in their business that significantly weakens their ability to meet their obligations to the Company;
•Delay lease commencements;
•Decline to extend or renew leases upon expiration;
•Fail to make rental payments when due or
•Close stores or declare bankruptcy.
Any of these actions could result in the termination of tenants’ leases and the loss of rental income attributable to the terminated leases. Lease terminations by an anchor tenant or a failure by that anchor tenant to occupy the premises may also permit other tenants in the same shopping centers to terminate their leases or reduce the amount of rent they pay under the terms of their leases. In addition, the Company cannot be certain that any tenant whose lease expires will renew that lease or that the Company will be able to re-lease space on economically advantageous terms. The loss of rental revenues from a number of the Company’s major tenants and its inability to replace such tenants may adversely affect the Company’s profitability and its ability to meet debt and other financial obligations and make distributions to shareholders.
Inflationary Pressures Could Adversely Impact Operating Results
Inflationary pressures pose risks to the Company’s business, tenants and the U.S. economy. Inflationary pressures and rising interest rates could result in reductions in retailer profitability and consumer discretionary spending which could impact tenant demand for new and existing store locations and the Company’s ability to grow rents. Regardless of inflation levels, base rent under most of the Company’s long-term anchor leases will remain constant (subject to tenants’ exercise of renewal options at pre-negotiated rent increases) until the expiration of their lease terms. Inflation may result in increases in certain shopping center operating expenses including common area maintenance and other operating expenses. Although most of the Company’s leases require tenants to pay their share of these property operating expenses, some tenants may be unable to absorb large expense increases caused by inflation and such increased expenses may limit tenants’ ability to pay higher base rents upon renewal, or renew leases at all. Inflation may also impact other aspects of the Company’s operating costs, including insurance, employee retention costs, the cost to complete redevelopments and build-outs of recently leased vacancies and interest rate costs relating to variable-rate loans and refinancing of fixed-rate indebtedness. Increasing interest rates or capital availability constraints may also adversely impact the transaction market, including the availability of financing asset values and the Company's ability to buy or sell properties. Any of the foregoing risks could have a material adverse effect on the Company’s business, results of operations and financial condition.
The Company’s Expenses May Remain Constant or Increase Even if Income from the Company’s Properties Decreases
Costs associated with the Company’s business, such as common area expenses, utilities, insurance, real estate taxes, mortgage payments and corporate expenses, are relatively inflexible and generally do not decrease in the event that a property is not fully occupied, rental rates decrease, a tenant fails to pay rent or other circumstances cause the Company’s revenues to decrease. In addition, inflation could result in higher operating costs. If the Company is unable to lower its operating costs when revenues decline and/or is unable to pass along cost increases to tenants, the Company’s cash flows, profitability and ability to make distributions to shareholders could be adversely impacted.
Property Ownership Through Partnerships and Joint Ventures Could Limit the Company’s Control of Those Investments and Reduce Its Expected Return
Partnership or joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that the Company’s partner or co-venturer might become bankrupt, that its partner or co-venturer might at any time have different interests or goals than the Company and that its partner or co-venturer may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, the Company’s partner or co-venturer could have different investment criteria that would impact the assets held by the joint venture or its interest in the joint venture, which may also reduce the carrying value of its equity investments if a loss in the carrying value of the investment is realized. These situations could have an impact on the Company’s revenues from its joint ventures. Other risks of joint venture investments include impasse on decisions, such as the decision to sell or finance a property or leasing decisions with anchor tenants, because neither the Company’s partner or co-venturer nor the Company would have full control over the partnership or joint venture. Joint venture platforms typically contain customary buy-sell provisions, which could result in either the sale of the Company’s interest or the use of available cash or borrowings to acquire the Company’s partner’s interest at
inopportune times, as well as the termination of applicable management contracts and fees. In addition, the Company is obligated to maintain the REIT status of the Dividend Trust Portfolio joint venture’s REIT subsidiary and may be obligated to maintain the REIT status of future joint venture platforms and the Company’s failure to do so could result in substantial liability to its partner. These factors could limit the return that the Company receives from such investments, cause its cash flows to be lower than its estimates or lead to business conflicts or litigation. There is no limitation under the Company’s Articles of Incorporation, or its Code of Regulations, as to the amount of funds that the Company may invest in partnerships or joint ventures. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. Furthermore, if credit conditions in the capital markets deteriorate, the Company could be required to reduce the carrying value of its equity method investments if a loss in the carrying value of the investment is realized or considered an other than temporary decline. As of December 31, 2022, the Company had $44.6 million of investments in and advances to unconsolidated joint ventures holding 18 shopping centers.
The Company’s Real Estate Assets May Be Subject to Impairment Charges
On a periodic basis, the Company assesses whether there are any indicators that the value of its real estate assets and other investments may be impaired. A property’s value is impaired only if the estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. In the Company’s estimate of projected cash flows, it considers factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. If the Company is evaluating the potential sale of an asset or development alternatives, the undiscounted future cash flows considerations include the most likely course of action at the balance sheet date based on current plans, intended holding periods and available market information. The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate assets and other investments. These assessments have a direct impact on the Company’s earnings because recording an impairment charge results in an immediate negative adjustment to earnings. There can be no assurance that the Company will not take additional charges in the future related to the impairment of its assets. Any future impairment could have a material adverse effect on the Company’s results of operations in the period in which the charge is taken.
The Company’s Acquisition Activities May Not Produce the Cash Flows That It Expects and May Be Limited by Competitive Pressures or Other Factors
The Company intends to acquire retail properties to the extent that suitable acquisitions can be made at appropriate returns. Acquisitions of commercial properties entail risks such as the following:
•The Company may be unable to identify, or may have difficulty identifying, acquisition opportunities that fit its investment strategy and cost of capital;
•The Company’s estimates on expected occupancy and rental rates may differ from actual conditions;
•The Company’s estimates of the costs of any redevelopment or repositioning of acquired properties may prove to be inaccurate;
•The Company may be unable to operate successfully in new markets where acquired properties are located due to a lack of market knowledge or understanding of local economies;
•The properties may become subject to environmental liabilities that the Company was unaware of at the time the Company acquired the property or
•The Company may be unable to successfully integrate new properties into its existing operations.
In addition, the Company may not be in a position or have the opportunity in the future to make suitable property acquisitions at appropriate returns due to competition for such properties with others engaged in real estate investment, some of which may have greater financial resources or a lower cost of capital than the Company.
Real Estate Property Investments Are Illiquid; Therefore, the Company May Not Be Able to Dispose of Properties When Desired or on Favorable Terms
Real estate investments generally cannot be disposed of quickly. In addition, the Code imposes restrictions, which are not applicable to other types of real estate companies, on the ability of a REIT to dispose of properties. Therefore, the Company may not be able to diversify or alter its portfolio in response to economic conditions or trends in retailer or consumer behavior promptly or on favorable terms. The Company’s inability to quickly respond to such changes or dispose of properties could adversely affect the value of the Company’s portfolio and its ability to repay indebtedness and make distributions to shareholders.
The Company’s Development, Redevelopment and Construction Activities Could Affect Its Operating Results
The Company intends to continue the selective development and redevelopment of retail properties as opportunities arise. The Company’s development and redevelopment activities include the following risks:
•Construction costs of a project may exceed the Company’s original estimates;
•Occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable;
•Rental rates per square foot could be less than projected;
•The Company may not complete construction and lease-up on schedule, resulting in increased construction costs;
•The Company 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 and
•The Company may abandon development or redevelopment opportunities after expending resources to determine feasibility.
Additionally, the time frame required for development and redevelopment and lease-up of these properties means that the Company may wait several years for a significant cash return. If any of the above events occur, the development and redevelopment of properties may hinder the Company’s growth and have an adverse effect on its results of operations and cash flows. In addition, new development activities, regardless of whether they are ultimately successful, typically require substantial time and attention from management.
The Company’s Real Estate Investments May Contain Environmental Risks That Could Adversely Affect Its Results of Operations
The acquisition and ownership of properties may subject the Company to liabilities, including environmental liabilities. The Company’s operating expenses could be higher than anticipated due to the cost of complying with existing or future environmental laws and regulations. In addition, under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or to have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may become liable for the costs of removal or remediation of certain hazardous substances released on or in its properties. The Company may also be liable for other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). The Company may incur such liability whether or not it knew of, or was responsible for, the presence of such hazardous or toxic substances. Such liability could be of substantial magnitude and divert management’s attention from other aspects of the Company’s business and, as a result, could have a material adverse effect on the Company’s operating results and financial condition, as well as its ability to make distributions to shareholders.
Expectations Relating to Environmental, Social and Governance Considerations Expose the Company to Potential Liabilities, Increased Costs, Reputational Harm and Other Adverse Effects on the Company’s Business
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion. The Company makes statements about its environmental, social and governance goals and initiatives through information provided on its website, press releases and other communications, including through its Corporate Responsibility and Sustainability Report. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, including those described under “Forward-Looking Statements” in Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations in Part II of this Report on Form 10-K, requires investments and are impacted by factors that may be outside the Company’s control. In addition, some stakeholders may disagree with the Company’s goals and initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where environmental, social and governance focus should be placed, including differing views of regulators in various jurisdictions in which we operate. Any failure, or perceived failure, by the Company to achieve its goals, further its initiatives, adhere to its public statements, comply with federal or state environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and materially adversely affect the Company’s business, reputation, results of operations, financial condition and stock price.
Health Pandemics, Including the COVID-19 Pandemic, Could Have a Significant Impact on the Company and Its Tenants’ Businesses
The Company’s business and the businesses of its tenants could be significantly impacted by health pandemics and the public perception of and reaction to the related risks. Beginning in March 2020, the COVID-19 pandemic resulted in the closure of many tenant businesses and substantially reduced foot traffic at open tenant businesses as a result of social distancing restrictions. As a result, a significant number of tenants failed to pay some or all of their monthly rent obligations, and the Company and its joint ventures ultimately agreed to defer a significant portion of these unpaid tenant rent obligations until 2021 and beyond. As of December 31, 2022, the COVID-19-related deferred amounts for tenants that are not accounted for on the cash basis have been repaid and the level and pace of tenant collections has largely reverted to pre-pandemic norms.
However, if additional surges in COVID-19 contagion were to occur, or if new pandemics were to emerge, tenant operations could be restricted or adversely impacted and such developments could lead to nonpayment of rents, tenant requests for rent relief and tenant closures and bankruptcies. Certain tenant categories are especially vulnerable to the impacts of pandemics, including movie theaters, fitness centers and restaurants that rely on in-person dining, activities and entertainment.
In addition to the impacts and uncertainties listed above, the occurrence of a pandemic may significantly limit the ability of the Company’s employees to access the Company’s offices and properties, which could adversely impact the Company’s ability to manage its properties and complete other operating and administrative functions that are important to its business. Efforts by the Company’s employees to work remotely could also expose the Company to additional risks, such as increased cybersecurity risk. Furthermore, pandemics could negatively affect global capital markets, which, in turn, could negatively affect the Company’s ability to obtain necessary financing, including property-level refinancing for its joint ventures, on favorable terms, or at all. Reduced rent collections from tenants could also impact the ability of the Company and its joint ventures to satisfy covenants and debt service obligations applicable to their financing arrangements, particularly with respect to mortgage loan indebtedness, and result in the recognition of impairment charges with respect to certain of the Company’s properties. Reduced rent collections from tenants may also have the effect of decreasing management fees collected from the Company’s joint ventures, which are often based on property cash receipts, and may also impact decisions by the Company’s Board of Directors with respect to future dividend policy. The Company’s periodic assessment of tenants’ ability to pay outstanding obligations may also result in reductions to rental revenue on account of previously accrued rents for which collection is no longer considered probable. Any of the foregoing risks could have a material adverse effect on the Company’s business, results of operations and financial condition.
The Company’s Properties Could Be Subject to Damage from Natural Disasters and Weather-Related Factors; An Uninsured Loss on the Company’s Properties or a Loss That Exceeds the Limits of the Company’s Insurance Policies Could Subject the Company to Lost Capital or Revenue on Those Properties
The Company’s properties are generally open-air shopping centers. Extreme weather conditions may impact the profitability of the Company’s tenants by decreasing traffic at or hindering access to the Company’s properties, which may decrease the amount of rent the Company collects. Furthermore, a number of the Company’s properties are located in areas that are subject to natural disasters, including Florida and California. Such properties could therefore be affected by rising sea levels, hurricanes, tropical storms, earthquakes and wildfires, whether caused by global climate changes or other factors. In addition, the Company’s insurance premiums have increased in recent years, and the potential increase in the frequency and intensity of natural disasters, extreme weather-related events and climate change in the future may limit the types of coverage and the coverage limits the Company is able to obtain on commercially reasonable terms.
The Company currently maintains all-risk property insurance with limits of $150 million per occurrence and in the aggregate and general liability insurance with limits of $100 million per occurrence and in the aggregate, in each case subject to various conditions, exclusions, deductibles and sub-limits for certain perils such as flood and earthquake. Coverage for a named windstorm for the Company’s continental U.S. properties is generally subject to a deductible of up to 5% of the total insured value of each property. The amount of any insurance coverage for losses due to damage or business interruption may prove to be insufficient. Should a loss occur that is uninsured or is in an amount exceeding the aggregate limits for the applicable insurance policy, or in the event of a loss that is subject to a substantial deductible under an insurance policy, the Company could lose all or part of its capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on the Company’s operating results and financial condition, as well as its ability to make distributions to shareholders.
Violent Crime, Including Terrorism and Mass Shootings, or Civil Unrest May Affect the Markets in Which the Company Operates Its Business and Its Profitability
Certain of the Company’s properties are located in or near major metropolitan areas or other areas that have experienced, and remain susceptible to, violent crime, including terrorist attacks and mass shootings and civil unrest. Any kind of violent criminal acts, including terrorist acts against public institutions or buildings or modes of public transportation (including airlines, trains or buses), or
civil unrest could alter shopping habits, deter customers from visiting the Company’s shopping centers or result in damage to its properties, which would have a negative effect on the Company’s business, the operations of its tenants and the value of its properties.
A Disruption, Failure or Breach of the Company’s Networks or Systems, Including as a Result of Cyber-Attacks, Could Harm Its Business
The Company relies extensively on computer systems to manage its business. While the Company maintains some of its own critical information technology systems, it also depends on third parties to provide important information technology services relating to several key business functions, such as payroll, human resources, electronic communications and certain finance functions. These systems are subject to damage or interruption from power outages, facility damage, computer or telecommunications failures, computer viruses, security breaches, vandalism, natural disasters, catastrophic events, human error and potential cyber threats, including phishing attacks, ransomware and other sophisticated cyber-attacks. Although the Company and such third parties employ a number of measures to prevent, detect and mitigate cyber threats, including password protection, firewalls, backup servers, threat monitoring and periodic penetration testing, the techniques used to obtain unauthorized access change frequently and there is no guarantee that such efforts will be successful. Should they occur, these threats could compromise the confidential information of the Company’s tenants, employees and third-party vendors; disrupt the Company’s business operations and the availability and integrity of data in the Company’s systems; and result in litigation, violation of applicable privacy and other laws, investigations, actions, fines or penalties. In the event of damage or disruption to the Company’s business due to these occurrences, the Company may not be able to successfully and quickly recover all of its critical business functions, assets and data. Furthermore, while the Company maintains insurance, the coverage may not sufficiently cover all types of losses, claims or fines that may arise. For additional information see Item 1 “Business-Information Technology and Cybersecurity” in Part I of this Annual Report on Form 10-K.
Risks Relating to the Company’s Indebtedness and Capital Structure
The Company Depends on External Sources of Capital. Disruptions in the Financial Markets Could Affect the Company’s Ability to Obtain Financing on Reasonable Terms and Have Other Adverse Effects on the Company and the Market Price of the Company’s Common Shares
To qualify as a REIT, the Company must, among other things, distribute at least 90% of its REIT taxable income (excluding any net capital gains) to its stockholders each year. Because of these distribution requirements, the Company has relied on third-party sources of capital, including debt and preferred equity financings, to fund growth opportunities and capital needs. The U.S. and global equity and credit markets have experienced significant price volatility, dislocations and liquidity disruptions in the past, which have caused market prices of many stocks to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances materially affected liquidity in the financial markets, making terms for certain financings less attractive and, in certain cases, resulting in the unavailability of financing for businesses and assets similar to those operated by the Company. Uncertainty in the equity and credit markets may negatively affect the Company’s ability to access additional financing at reasonable terms or at all, which may negatively affect the Company’s ability to refinance its debt, obtain new financing or make acquisitions. These circumstances may also adversely affect the Company’s tenants, including their ability to enter into new leases, pay their rents when due and renew their leases at rates at least as favorable as their current rates.
A prolonged downturn in the equity or credit markets may cause the Company to seek alternative sources of potentially less attractive financing and may require it to adjust its business plan accordingly. In addition, these factors may make it more difficult for the Company to sell properties or may adversely affect the price it receives for properties that it does sell, as prospective buyers may experience increased costs of financing or difficulties in obtaining financing. These events in the equity and credit markets may make it more difficult or costly for the Company to raise capital through the issuance of its equity or debt securities. These disruptions in the financial markets also may have a material adverse effect on the market value of the Company’s common shares and other adverse effects on the Company or the economy in general. There can be no assurances that government responses to the disruptions in the financial markets will restore consumer confidence, stabilize the markets or increase liquidity and the availability of equity or credit financing.
Changes in the Company’s Credit Ratings or the Debt Markets, as Well as Market Conditions in the Credit Markets, Could Adversely Affect the Company’s Publicly Traded Debt and Credit Facilities
The market value for the Company’s publicly traded debt depends on many factors, including the following:
•The Company’s credit ratings with major credit rating agencies;
•The prevailing interest rates being paid by, or the market price for publicly traded debt issued by, other companies similar to the Company;
•The Company’s financial condition, liquidity, leverage, financial performance and prospects and
•The overall condition of the financial markets.
The condition of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. The U.S. credit markets have experienced severe dislocations and liquidity disruptions in the past. Furthermore, uncertain market conditions can be exacerbated by leverage. The occurrence of these circumstances in the credit markets and/or additional fluctuations in the financial markets and prevailing interest rates could have an adverse effect on the Company’s ability to access capital and its cost of capital.
In addition, credit rating agencies continually review their ratings for the companies they follow, including the Company. For example, credit rating agencies may review and change their credit ratings for the Company as a result of disruptions to retail tenants and property-level revenues caused by macroeconomic trends or other developments such as the COVID-19 pandemic. The credit rating agencies also evaluate the real estate industry as a whole and may change their credit rating for the Company based on their overall view of the industry. Any rating organization that rates the Company’s publicly traded debt may lower the rating or decide, at its sole discretion, not to rate the Company’s publicly traded debt. The ratings of the Company’s publicly traded debt are based primarily on the rating organization’s assessment of the likelihood of timely payment of interest when due and the payment of principal on the maturity date. A negative change in the Company’s rating could have an adverse effect on the Company’s credit facilities and market price of the Company’s publicly traded debt, as well as the Company’s ability to access capital and its cost of capital.
The Company’s Ability to Increase Its Debt Could Adversely Affect Its Cash Flows
At December 31, 2022, the Company had outstanding debt of $1.7 billion (excluding its proportionate share of unconsolidated joint venture mortgage debt aggregating $110.6 million as of December 31, 2022). The Company intends to maintain prudent leverage levels. The Company is subject to limitations under its credit facilities and indentures relating to its ability to incur additional debt; however, the Company’s organizational documents do not contain any limitation on the amount or percentage of indebtedness it may incur. If the Company were to become more highly leveraged, its cash needs to fund debt service would increase accordingly. Under such circumstances, the Company’s risk of decreases in cash flow due to fluctuations in the real estate market, reliance on its major tenants, acquisition and development costs and the other factors discussed in these risk factors could subject the Company to an even greater adverse impact on its financial condition and results of operations. In addition, increased leverage could increase the risk of default on the Company’s debt obligations, which could further reduce its cash available for distribution and adversely affect its ability to dispose of its portfolio on favorable terms, which could cause the Company to incur losses and reduce its cash flows.
The Company’s Cash Flows and Operating Results Could Be Adversely Affected by Required Payments of Debt or Related Interest and Other Risks of Its Debt Financing
The Company is generally subject to the risks associated with debt financing. These risks include the following:
•The Company’s cash flows may not satisfy required payments of principal and interest;
•The Company may not be able to refinance existing indebtedness on its properties as necessary, or the interest rate and other terms of the refinancing may be less favorable to the Company than the interest rate and terms applicable to the existing debt;
•Required debt payments are not reduced if the economic performance of any property declines;
•Debt service obligations could reduce funds available for distribution to the Company’s shareholders and funds available for development, redevelopment and acquisitions;
•Any default on the Company’s indebtedness could result in acceleration of those obligations, which could result in the acceleration of other debt obligations and possible loss of property to foreclosure and
•The Company may not be able to finance necessary capital expenditures for purposes such as re-leasing space on favorable terms or at all.
If a property is mortgaged to secure payment of indebtedness and the Company cannot or does not make the mortgage payments, it may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property, which may also adversely affect the Company’s credit ratings. Any of these risks can place strains on the Company’s cash flows, reduce its ability to grow and adversely affect its results of operations.
The Company’s Financial Condition Could Be Adversely Affected by Financial Covenants
The Company’s credit facilities and the indenture under which its senior unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, leverage ratios and certain coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of its assets and engage in mergers and certain acquisitions. These credit facilities and indenture also contain customary default provisions including, but not limited to, the failure to pay principal and interest issued thereunder in a timely manner, the failure to comply with the Company’s financial and operating covenants and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay when due certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. These covenants could limit the Company’s ability to obtain additional funds needed to address cash shortfalls or pursue growth opportunities or transactions that would provide substantial return to its shareholders. In addition, a breach of these covenants could cause a default or accelerate some or all of the Company’s indebtedness, which could have a material adverse effect on its financial condition.
The Company May Incur Significant Debt Prepayment Costs as a Result of Repaying Indebtedness Prior to Its Stated Maturity
In prudently managing its capital structure and refinancing risk in the past, the Company has chosen to retire debt prior to its stated maturity date, and in doing so, has incurred prepayment or defeasance premiums in accordance with the relevant loan agreements. If the Company chooses to retire debt prior to its stated maturity date in the future, it may incur significant debt prepayment costs or defeasance premiums, which could have an adverse effect on the Company’s cash flows and results of operations.
The Company Has Variable-Rate Debt and Interest Rate Risk
The Company has indebtedness with interest rates that vary depending upon the market index. In addition, the Company has a revolving credit facility that bears interest at a variable rate on any amounts drawn on the facility. The Company may incur additional variable-rate debt in the future. Increases in interest rates on variable-rate debt would increase the Company’s interest expense, which would negatively affect net earnings and cash available for payment of its debt obligations and distributions to its shareholders.
Risks Related to the Company’s Taxation as a REIT
If the Company Fails to Qualify as a REIT in Any Taxable Year, It Will Be Subject to U.S. Federal Income Tax as a Regular Corporation and Could Have Significant Tax Liability
The Company intends to operate in a manner that allows it to qualify as a REIT for U.S. federal income tax purposes. However, REIT qualification requires that the Company satisfy numerous requirements (some on an annual or quarterly basis) established under highly technical and complex provisions of the Code, for which there are a limited number of judicial or administrative interpretations. The Company’s status as a REIT requires an analysis of various factual matters and circumstances that are not entirely within its control. Accordingly, the Company’s ability to qualify and remain qualified as a REIT for U.S. federal income tax purposes is not certain. Even a technical or inadvertent violation of the REIT requirements could jeopardize the Company’s REIT qualification. Furthermore, Congress or the Internal Revenue Service (“IRS”) might change the tax laws or regulations and the courts could issue new rulings, in each case potentially having a retroactive effect that could make it more difficult or impossible for the Company to continue to qualify as a REIT. If the Company fails to qualify as a REIT in any tax year, the following will result:
•The Company would be taxed as a regular domestic corporation, which, among other things, means that it would be unable to deduct distributions to its shareholders in computing its taxable income and would be subject to U.S. federal income tax on its taxable income at regular corporate rates;
•Any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to shareholders and could force the Company to liquidate assets or take other actions that could have a detrimental effect on its operating results and
•Unless the Company were entitled to relief under applicable statutory provisions, it would be disqualified from treatment as a REIT for the four taxable years following the year during which the Company lost its qualification, and its cash available for debt service obligations and distribution to its shareholders, therefore, would be reduced for each of the years in which the Company does not qualify as a REIT.
Even if the Company remains qualified as a REIT, it may face other tax liabilities that reduce its cash flow. The Company’s TRS is subject to taxation, and any changes in the laws affecting the Company’s TRS may increase the Company’s tax expenses. The Company may also be subject to certain federal, state and local taxes on its income and property either directly or at the level of its
subsidiaries. Any of these taxes would decrease cash available for debt service obligations and distribution to the Company’s shareholders.
Compliance with REIT Requirements May Negatively Affect the Company’s Operating Decisions
To maintain its status as a REIT for U.S. federal income tax purposes, the Company must meet certain requirements on an ongoing basis, including requirements regarding its sources of income, the nature and diversification of its assets, the amounts the Company distributes to its shareholders and the ownership of its shares. The Company may also be required to make distributions to its shareholders when it does not have funds readily available for distribution or at times when the Company’s funds are otherwise needed to fund capital expenditures or debt service obligations.
As a REIT, the Company must distribute at least 90% of its annual net taxable income (excluding net capital gains) to its shareholders. To the extent that the Company satisfies this distribution requirement, but distributes less than 100% of its net taxable income, the Company will be subject to U.S. federal corporate income tax on its undistributed taxable income. In addition, the Company will be subject to a 4% non-deductible excise tax if the actual amount paid to its shareholders in a calendar year is less than the minimum amount specified under U.S. federal tax laws. From time to time, the Company may generate taxable income greater than its income for financial reporting purposes, or its net taxable income may be greater than its cash flows available for distribution to its shareholders. If the Company does not have other funds available in these situations, it could be required to borrow funds, sell its securities or a portion of its properties at unfavorable prices or find other sources of funds in order to meet the REIT distribution requirements and avoid corporate income tax and the 4% excise tax.
In addition, the REIT provisions of the Code impose a 100% tax on income from “prohibited transactions.” Prohibited transactions generally include sales of assets, other than foreclosure property, that constitute inventory or other property held for sale to customers in the ordinary course of business. This 100% tax could affect the Company’s decisions to sell property if it believes such sales could be treated as a prohibited transaction. However, the Company would not be subject to this tax if it were to sell assets through its TRS. The Company will also be subject to a 100% tax on certain amounts if the economic arrangements between the Company and its TRS are not comparable to similar arrangements among unrelated parties.
The Company May Be Forced to Borrow Funds to Maintain Its REIT Status, and the Unavailability of Such Capital on Favorable Terms at the Desired Times, or at All, May Cause the Company to Curtail Its Investment Activities and/or to Dispose of Assets at Inopportune Times, Which Could Materially and Adversely Affect the Company
To qualify as a REIT, the Company generally must distribute to shareholders at least 90% of its REIT taxable income each year, determined without regard to the dividends paid deduction and excluding any net capital gains, and the Company will be subject to regular corporate income taxes on its undistributed taxable income to the extent that the Company distributes less than 100% of its REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, each year. In addition, the Company will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by the Company in any calendar year are less than the sum of 85% of the Company’s ordinary income, 95% of its capital gain net income and 100% of its undistributed income from prior years. The Company could have a potential distribution shortfall as a result of, among other things, differences in timing between the actual receipt of cash and recognition of income for U.S. federal income tax purposes or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. In order to maintain REIT status and avoid the payment of income and excise taxes, the Company may need to borrow funds to meet the REIT distribution requirements. The Company may not be able to borrow funds on favorable terms or at all, and the Company’s ability to borrow may be restricted by the terms of the instruments governing the Company’s existing indebtedness. The Company’s access to third-party sources of capital depends on a number of factors, including the market’s perception of the Company’s growth potential, current debt levels, the market price of common shares and current and potential future earnings. The Company cannot assure shareholders that it will have access to such capital on favorable terms at the desired times, or at all, which may cause the Company to curtail its investment activities and/or to dispose of assets at inopportune times and could materially and adversely affect the Company. The Company may make taxable in-kind distributions of common shares, which may cause shareholders to be required to pay income taxes with respect to such distributions in excess of any cash received, or the Company may be required to withhold taxes with respect to such distributions in excess of any cash shareholders receive.
Dividends Paid by REITs Generally Do Not Qualify for Reduced Tax Rates
In general, the maximum U.S. federal income tax rate for dividends paid to individual U.S. shareholders is 20%. Due to its REIT status, the Company’s distributions to individual shareholders generally are not eligible for the reduced rates. However, U.S. shareholders that are individuals, trusts or estates generally may deduct up to 20% of the ordinary dividends (e.g., REIT dividends that are not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning after December 31, 2017, and before January 1, 2026. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs (generally to 29.6%, assuming the shareholder is subject to the 37% maximum rate), such tax rate is still higher than
the tax rate applicable to corporate dividends that constitute qualified dividend income. Accordingly, investors who are individuals, trusts or estates may perceive investments in REITs to be relatively less attractive than investments in stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the shares of REITs, including the per share trading price of the Company’s common shares.
Certain Foreign Shareholders May Be Subject to U.S. Federal Income Tax on Gain Recognized on a Disposition of the Company’s Common Shares if the Company Does Not Qualify as a “Domestically Controlled” REIT
A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to U.S. federal income tax on any gain recognized on the disposition. This tax does not apply, however, to the disposition of stock in a REIT if the REIT is “domestically controlled.” In general, the Company will be a domestically controlled REIT if at all times during the five-year period ending on the applicable stockholder’s disposition of the Company’s stock, less than 50% in value of the stock was held directly or indirectly by non-U.S. persons. If the Company were to fail to qualify as a domestically controlled REIT, gain recognized by a foreign stockholder on a disposition of the Company’s common shares would be subject to U.S. federal income tax unless the common shares were traded on an established securities market and the foreign stockholder did not at any time during a specific testing period directly or indirectly own more than 10% of the Company’s outstanding common stock.
Legislative or Other Actions Affecting REITs Could Have a Negative Effect on the Company
The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect the Company or its shareholders. The Company cannot predict how changes in the tax laws might affect shareholders or the Company. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect the Company’s ability to qualify as a REIT, the U.S. federal income tax consequences of such qualification or the U.S. federal income tax consequences of an investment in the Company. In addition, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT. Furthermore, potential amendments and technical corrections, as well as interpretations and implementation of regulations by the Treasury and IRS, may have or may in the future occur or be enacted, and, in each case, they could lessen or increase the impact of the Tax Cuts and Jobs Act of 2017 (the “TCJA”). In addition, states and localities, which often use federal taxable income as a starting point for computing state and local tax liabilities, continue to react to the TCJA, and these may exacerbate its negative, or diminish its positive, effects on the Company. It is impossible to predict the nature or extent of any new tax legislation, regulation or administrative interpretations, but such items could adversely affect the Company’s operating results, financial condition and/or future business planning.
Risks Related to the Company’s Organization, Structure and Ownership
Provisions of the Company’s Articles of Incorporation and Code of Regulations Could Have the Effect of Delaying, Deferring or Preventing a Change in Control, Even if That Change May Be Considered Beneficial by Some of the Company’s Shareholders
The Company’s Articles of Incorporation and Code of Regulations contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by the Company’s Board of Directors. Among other things, the Articles of Incorporation and Code of Regulations include these provisions:
•Prohibiting any person, except for certain shareholders (including the family of Mr. Alexander Otto) as set forth in the Company’s Articles of Incorporation, from owning more than 5% of the Company’s outstanding common shares in order to maintain the Company’s status as a REIT;
•Authorizing “blank check” preferred stock, which could be issued by the Board of Directors without shareholder approval and may contain voting, liquidation, dividend and other rights superior to the Company’s common shares;
•Providing that any vacancy on the Board of Directors may be filled only by the affirmative vote of a majority of the remaining directors then in office;
•Providing that no shareholder may cumulate the shareholder’s voting power in the election of directors;
•Providing that shareholders may not act by written consent unless such written consent is unanimous and
•Requiring advance notice of shareholder proposals for business to be conducted at meetings of the Company’s shareholders and for nominations of candidates for election to the Board of Directors.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Company’s management. The Company believes these provisions protect its shareholders from coercive or otherwise unfair takeover tactics and are not intended to make the Company immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay, defer or prevent an acquisition that the Board of Directors determines is not in the best interests of the Company and its shareholders, which under certain circumstances could reduce the market price of its common shares.
The Company Has Significant Shareholders Who May Exert Influence on the Company as a Result of Their Considerable Beneficial Ownership of the Company’s Common Shares, and Their Interests May Differ from the Interests of Other Shareholders
The Company has shareholders, including Mr. Alexander Otto, who is a member of the Board of Directors, who, because of their considerable beneficial ownership of the Company’s common shares, are in a position to exert significant influence over the Company. These shareholders may exert influence with respect to matters that are brought to a vote of the Company’s Board of Directors and/or the holders of the Company’s common shares. Among others, these matters include the election of the Company’s Board of Directors, corporate finance transactions and joint venture activity, merger, acquisition and disposition activity, and amendments to the Company’s Articles of Incorporation and Code of Regulations. In the context of major corporate events, the interests of the Company’s significant shareholders may differ from the interests of other shareholders. For example, if a significant shareholder does not support a merger, tender offer, sale of assets or other business combination because the shareholder judges it to be inconsistent with the shareholder’s investment strategy, the Company may be unable to enter into or consummate a transaction that would enable other shareholders to realize a premium over the then-prevailing market prices for common shares. Furthermore, significant shareholders of the Company have sold in the past, and may sell in the future, substantial amounts of the Company’s common shares in the public market to enhance the shareholders’ liquidity positions, fund alternative investments or for other reasons. This has caused in the past, and may cause in the future, the trading price of the Company’s common shares to decline significantly, resulting in other shareholders being unable to sell their common shares at favorable prices. The Company cannot predict or control how the Company’s significant shareholders may use the influence they have as a result of their common share holdings.
The Company’s Board of Directors May Change Significant Corporate Policies Without Shareholder Approval
The Company’s strategies and investment, financing and dividend policies will be determined by its Board of Directors. These strategies and policies may be amended or revised at any time at the discretion of the Board of Directors without a vote of the Company’s shareholders. A change in any of these strategies and policies could have an adverse effect on the Company’s financial condition, operating results and cash flow and on its ability to pay dividends to shareholders.
Risks Related to the Company’s Common Shares
Changes in Market Conditions Could Adversely Affect the Market Price of the Company’s Publicly Traded Securities
As with other publicly traded securities, the market price of the Company’s publicly traded securities depends on various market conditions, which may change from time to time. Among the market conditions that may affect the market price of the Company’s publicly traded securities are the following:
•The extent of institutional investor interest in the Company and the properties it owns;
•The reputation of REITs generally and the reputation of REITs with similar portfolios;
•The attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies or sovereign governments), bank deposits or other investments;
•The Company’s financial condition and performance;
•The market’s perception of the Company’s growth potential and future cash dividends;
•An increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for the Company’s shares and
•General economic and financial market conditions.
The Company May Issue Additional Securities Without Shareholder Approval
The Company can issue preferred shares and common shares without shareholder approval subject to certain limitations in the Company’s Articles of Incorporation. Holders of preferred shares have priority over holders of common shares, and the issuance of additional shares reduces the ownership interest of existing holders in the Company.
General Risks Relating to Investments in the Company’s Securities
The Company May Be Unable to Retain and Attract Key Management Personnel
The Company may be unable to retain and attract talented executives. In the event of the loss of key management personnel to competitors, or upon unexpected death, disability or retirement, the Company may not be able to find replacements with comparable skill, ability and industry expertise. The Company’s operating results and financial condition could be materially and adversely affected until suitable replacements are identified and retained, if at all.
The Company Is Subject to Litigation That Could Adversely Affect Its Results of Operations
The Company is a defendant from time to time in lawsuits and regulatory proceedings relating to its business. Due to the inherent uncertainties of litigation and regulatory proceedings, the Company cannot accurately predict the ultimate outcome of any such litigation or proceedings. An unfavorable outcome could adversely affect the Company’s business, financial condition or results of operations. Any such litigation could also lead to increased volatility of the trading price of the Company’s common shares. For a further discussion of litigation risks, see “Legal Matters” in Note 11, “Commitments and Contingencies,” to the Company’s consolidated financial statements.
Changes in Accounting Standards Issued by the Financial Accounting Standards Board or Other Standard-Setting Bodies May Adversely Affect the Company’s Business
The Company’s financial statements are subject to the application of U.S. generally accepted accounting principles (“GAAP”), which are periodically revised and/or expanded. From time to time, the Company is required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that accounting standards the Company is required to adopt may require changes to the current accounting treatment that it applies to its consolidated financial statements and may require it to make significant changes to its systems. Changes in accounting standards could result in a material adverse impact on the Company’s business, financial condition and results of operations.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
Item 2. PROPERTIES
At December 31, 2022, the Portfolio Properties included 119 shopping centers (including 18 centers owned through unconsolidated joint ventures). At December 31, 2022, the Portfolio Properties aggregated 27.0 million square feet of Company-owned GLA located in 20 states. These centers are principally located in suburban, higher household income communities with the highest concentration of centers located in the Southeast, including Florida, Georgia and North Carolina.
At December 31, 2022, on a pro rata basis, the average annualized base rent per square foot was $19.52. The average annualized base rent of the Company’s 101 wholly-owned shopping centers was $19.61 per square foot, and the average annualized base rent for the 18 shopping centers owned through unconsolidated joint ventures was $16.20 per square foot. The Company’s average annualized base rent per square foot does not consider tenant expense reimbursements.
The majority of the Company’s shopping centers are anchored by national tenant anchors and are designed to provide a highly compelling shopping experience and merchandise mix for retail partners and consumers. The tenants of the shopping centers typically cater to the consumer’s desire for value, service and convenience and offer day-to-day necessities rather than luxury items. The properties often include discounters, specialty grocers, pet supply stores, fitness centers, quick-service restaurants and beauty supply retailers as additional anchors or tenants. In recent years, the Company has also acquired a number of smaller format, convenience retail properties which do not include a traditional anchor tenant. The Company has established close relationships with a large number of major national and regional tenants, many of which occupy space in its shopping centers.
Information as to the Company’s 10 largest tenants based on total annualized rental revenues and Company-owned GLA at December 31, 2022, is set forth in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Executive Summary - Retail Environment and Company Fundamentals” of this Annual Report on Form 10-K. For
additional details related to property encumbrances for the Company’s wholly-owned assets, see “Real Estate and Accumulated Depreciation” (Schedule III) herein. At December 31, 2022, the Company owned an investment in 18 properties through unconsolidated joint ventures, which properties served as collateral for joint venture mortgage debt aggregating approximately $535.1 million (of which the Company’s proportionate share is $110.6 million) and is not reflected in the Company's consolidated indebtedness. The Company’s properties range in size from approximately 2,000 square feet to approximately 1,100,000 square feet of total GLA (with 46 properties exceeding 300,000 square feet of total GLA). On a pro rata basis, the Company’s properties were 92.4% occupied as of December 31, 2022.
Tenant Lease Expirations and Renewals
The following table shows the impact of tenant lease expirations through 2032 at the Company’s 101 wholly-owned shopping centers, assuming that none of the tenants exercise any of their renewal options:
Expiration
Year
No. of
Leases
Expiring
Approximate GLA
in Square Feet
(Thousands)
Annualized Base
Rent Under
Expiring Leases
(Thousands)
Average Base Rent
per Square Foot
Under Expiring
Leases
Percentage of
Total GLA
Represented by
Expiring Leases
Percentage of
Total Base Rental
Revenues
Represented by
Expiring Leases
$
20,462
$
21.42
4.9%
5.9%
2,751
50,080
18.21
14.1%
14.4%
2,591
50,852
19.63
13.2%
14.6%
2,080
37,777
18.17
10.6%
10.9%
2,767
53,978
19.51
14.1%
15.5%
2,291
41,540
18.13
11.7%
11.9%
19,720
21.93
4.6%
5.7%
16,933
20.41
4.2%
4.9%
13,483
17.28
4.0%
3.9%
20,690
21.32
5.0%
5.9%
Total
1,944
16,915
$
325,515
$
19.24
86.4%
93.6%
The following table shows the impact of tenant lease expirations through 2032 at the Company’s 18 shopping centers owned through unconsolidated joint ventures, assuming that none of the tenants exercise any of their renewal options:
Expiration
Year
No. of
Leases
Expiring
Approximate GLA
in Square Feet
(Thousands)
Annualized Base
Rent Under
Expiring Leases
(Thousands)
Average Base Rent
per Square Foot
Under Expiring
Leases
Percentage of
Total GLA
Represented by
Expiring Leases
Percentage of
Total Base Rental
Revenues
Represented by
Expiring Leases
$
5,515
$
19.94
5.9%
8.0%
9,017
13.69
14.0%
13.2%
7,690
15.59
10.5%
11.2%
9,506
14.58
13.9%
13.9%
10,758
17.08
13.4%
15.7%
8,999
15.26
12.5%
13.1%
3,376
16.15
4.4%
4.9%
1,222
18.93
1.4%
1.8%
4,906
17.51
6.0%
7.2%
3,817
17.26
4.7%
5.6%
Total
4,075
$
64,806
$
15.90
86.7%
94.6%
The rental payments under certain of these leases will remain constant until the expiration of their base terms, regardless of inflationary increases. There can be no assurance that any of these leases will be renewed or that any replacement tenants will be obtained if not renewed.
SITE Centers Corp.
Shopping Center Property List at December 31, 2022
Location
Center
Year Developed/
Redeveloped
Year Acquired
SITE Ownership Interest
Owned GLA (000's)
Total Annualized Base Rent (000's)
Average Base Rent
(Per SF)(1)
Key Tenants
Arizona
Chandler, AZ
Chandler Center
100%
$
$
42.45
-
Mesa, AZ
Shops at Power and Baseline
100%
$
$
56.22
-
Phoenix, AZ
Ahwatukee Foothills Towne Center
20%
$
12,142
$
18.14
AMC Theatres, Best Buy, Big Lots, Burlington, HomeGoods, JOANN, Lina Home Furnishing, Marshalls, Michaels, OfficeMax, Ross Dress for Less, Sprouts Farmers Market
Phoenix, AZ
Arrowhead Crossing
100%
$
5,574
$
16.32
Burlington, DSW, Golf Galaxy, Hobby Lobby, HomeGoods, Nordstrom Rack, Staples, T.J. Maxx
Phoenix, AZ
Deer Valley Towne Center
100%
$
3,792
$
20.55
Michaels, PetSmart, Ross Dress for Less
Phoenix, AZ
Paradise Village Gateway
100%
$
4,543
$
25.38
PetSmart, Ross Dress for Less, Sun & Ski Sports
Scottsdale, AZ
Artesia Village
100%
$
$
39.81
-
Scottsdale, AZ
Northsight Plaza
100%
$
$
33.65
-
Tempe, AZ
Broadway Center
100%
$
$
35.45
-
California
Buena Park, CA
Buena Park Place
100%
$
3,652
$
17.58
Aldi, Kohl's, Michaels
Fontana, CA
Falcon Ridge Town Center
100%
$
6,500
$
23.66
24 Hour Fitness, Michaels, Ross Dress for Less, Stater Bros Markets
Lafayette, CA
La Fiesta Square
100%
$
2,451
$
52.21
-
Lafayette, CA
Lafayette Mercantile
100%
$
1,063
$
58.64
-
Long Beach, CA
The Pike Outlets(2)
DEV
100%
$
5,517
$
23.67
Cinemark, H & M, Nike, Restoration Hardware
Oakland, CA
Whole Foods at Bay Place
100%
$
2,919
$
51.02
Whole Foods
Richmond, CA
Hilltop Plaza
20%
$
3,758
$
17.31
99 Cents Only, Century Theatre, City Sports Club, dd's Discounts, Ross Dress for Less
Roseville, CA
Creekside Plaza
100%
$
1,258
$
40.17
-
Roseville, CA
Ridge at Creekside
100%
$
4,845
$
20.04
Bed Bath & Beyond, buybuy BABY, Cost Plus World Market, Macy's Furniture Gallery, REI
San Francisco, CA
1000 Van Ness
100%
$
2,919
$
37.66
CGV Cinemas
Colorado
Centennial, CO
Centennial Promenade
100%
$
6,941
$
21.29
Conn's, Golf Galaxy, HomeGoods, Michaels, Ross Dress for Less, Stickley Furniture, Total Wine & More
Colorado Springs, CO
Chapel Hills
100%
$
5,418
$
13.39
Barnes & Noble, Best Buy, Burlington, DSW, Nordstrom Rack, Old Navy, Pep Boys, PetSmart, Ross Dress for Less, Urban Air Adventure Park, Whole Foods
Denver, CO
Shops on Montview
100%
$
$
38.68
-
Denver, CO
University Hills
100%
$
4,529
$
20.37
King Soopers, Marshalls, Michaels
Parker, CO
FlatAcres MarketCenter/
Parker Pavilions(2)
100%
$
4,340
$
19.36
24 Hour Fitness, Bed Bath & Beyond, Michaels, Office Depot
Connecticut
Guilford, CT
Guilford Commons
DEV
100%
$
2,146
$
18.32
Bed Bath & Beyond, The Fresh Market
Plainville, CT
Connecticut Commons
DEV
20%
$
7,003
$
13.69
AMC Theatres, Dick's Sporting Goods, DSW, Kohl's, Lowe's, Marshalls, Old Navy, PetSmart
Windsor, CT
Windsor Court
100%
$
1,513
$
19.89
Stop & Shop
SITE Centers Corp.
Shopping Center Property List at December 31, 2022
Location
Center
Year Developed/
Redeveloped
Year Acquired
SITE Ownership Interest
Owned GLA (000's)
Total Annualized Base Rent (000's)
Average Base Rent
(Per SF)(1)
Key Tenants
Florida
Boca Raton, FL
Shops at Boca Center
100%
$
4,090
$
41.00
Total Wine & More
Boynton Beach, FL
Village Square at Golf
100%
$
1,780
$
22.16
-
Brandon, FL
Lake Brandon Plaza
100%
$
2,518
$
14.51
JOANN, Nordstrom Rack, Publix, Total Wine & More
Brandon, FL
Lake Brandon Village
100%
$
1,478
$
15.64
buybuy BABY, PetSmart, Sprouts Farmers Market
Brandon, FL
The Collection at Brandon Boulevard(2)
DEV
100%
$
3,053
$
13.73
Bealls Outlet, Chuck E. Cheese's, Crunch Fitness, Kane Furniture
Casselberry, FL
Casselberry Commons
100%
$
3,232
$
15.75
Burlington, Publix, Ross Dress for Less, T.J. Maxx
Delray Beach, FL
Shoppes at Addison Place
100%
$
2,280
$
46.33
-
Fort Walton Beach, FL
Shoppes at Paradise Pointe
100%
$
$
12.71
Publix
Jupiter, FL
Concourse Village
100%
$
2,309
$
17.86
Ross Dress for Less, T.J. Maxx
Melbourne, FL
Melbourne Shopping Center
100%
$
1,409
$
9.08
Big Lots, Club 4 Fitness, Publix
Miami, FL
The Shops at Midtown Miami
DEV
100%
$
9,872
$
21.83
Dick's Sporting Goods, HomeGoods, Marshalls, Nordstrom Rack, Ross Dress for Less, Target, west elm
Naples, FL
Carillon Place
100%
$
3,888
$
15.79
Bealls Outlet, DSW, OfficeMax, Ross Dress for Less, T.J. Maxx, Walmart Neighborhood Market
Orlando, FL
Lee Vista Promenade
DEV
100%
$
5,276
$
17.42
Academy Sports, Bealls Outlet, Epic Theatres, HomeGoods, Michaels, Ross Dress for Less
Orlando, FL
Millenia Crossing
100%
$
2,164
$
25.41
Nordstrom Rack
Palm Harbor, FL
The Shoppes of Boot Ranch
100%
$
1,390
$
28.07
-
Plantation, FL
The Fountains
100%
$
6,876
$
16.79
Dick's Sporting Goods, JOANN, Kohl's, Marshalls/HomeGoods, Total Wine & More,
Urban Air Trampoline & Adventure Park
Tamarac, FL
Midway Plaza
100%
$
2,792
$
14.53
Publix, Ross Dress for Less
Tampa, FL
North Pointe Plaza
IPO
100%
$
1,654
$
15.32
Publix
Tampa, FL
Southtown Center
100%
$
1,265
$
35.92
-
Wesley Chapel, FL
The Shoppes at New Tampa
100%
$
1,956
$
15.77
Publix, Ross Dress for Less
Winter Garden, FL
Winter Garden Village
100%
$
15,945
$
21.57
Bealls, Bed Bath & Beyond, Best Buy, Burlington, Forever 21, Havertys, JOANN, LA Fitness, Marshalls, PetSmart, Ross Dress for Less, Staples
Georgia
Alpharetta, GA
Shoppes of Crabapple
100%
$
$
28.93
-
Atlanta, GA
Hammond Springs
100%
$
1,978
$
30.19
-
Atlanta, GA
Parkwood Shops
100%
$
$
25.39
-
Atlanta, GA
Perimeter Pointe
100%
$
4,504
$
19.32
Dick's Sporting Goods, HomeGoods, LA Fitness, Regal Cinemas
Cumming, GA
Cumming Marketplace
100%
$
4,315
$
14.04
Lowe's, Marshalls, Michaels, OfficeMax
Cumming, GA
Cumming Town Center
100%
$
5,095
$
16.36
Ashley Furniture HomeStore, Best Buy, Burlington, Dick's Sporting Goods, T.J. Maxx/HomeGoods
Cumming, GA
Sharon Greens
100%
$
1,169
$
12.82
Kroger
Decatur, GA
Hairston Crossing
20%
$
$
9.65
Goodwill
Douglasville, GA
Market Square
100%
$
1,516
$
12.71
Aaron's
SITE Centers Corp.
Shopping Center Property List at December 31, 2022
Location
Center
Year Developed/
Redeveloped
Year Acquired
SITE Ownership Interest
Owned GLA (000's)
Total Annualized Base Rent (000's)
Average Base Rent
(Per SF)(1)
Key Tenants
Marietta, GA
Towne Center Prado
20%
$
3,627
$
13.46
Going Going Gone, Publix, Ross Dress for Less
Roswell, GA
Sandy Plains Village
100%
$
2,210
$
13.98
Movie Tavern, Painted Tree Marketplace
Snellville, GA
Presidential Commons
100%
$
4,175
$
15.24
Burlington, buybuy BABY, JOANN, Kroger
Suwanee, GA
Johns Creek Town Center
100%
$
4,249
$
16.09
Kohl's, Market By Macy's, Michaels, PetSmart, Sprouts Farmers Market, Staples
Illinois
Chicago, IL
3030 North Broadway
100%
$
4,538
$
34.45
Mariano's, XSport Fitness
Chicago, IL
The Maxwell
100%
$
5,616
$
27.18
Burlington, Dick's Sporting Goods, Nordstrom Rack, T.J. Maxx
Deer Park, IL
Deer Park Town Center
DEV
50%
$
8,696
$
32.77
Century Theatre, Crate & Barrel, Gap
Schaumburg, IL
Woodfield Village Green
100%
$
7,726
$
22.75
Bloomingdale's The Outlet Store, Container Store, HomeGoods, Marshalls, Michaels, Nordstrom Rack, PetSmart, Sierra Trading Post, Trader Joe's
Tinley Park, IL
Brookside Marketplace
20%
$
4,592
$
15.68
Best Buy, Dick's Sporting Goods, HomeGoods, Michaels, PetSmart, Ross Dress for Less, T.J. Maxx
Indiana
Highland, IN
Highland Grove Shopping Center
20%
$
4,402
$
15.61
Burlington, Kohl's, Michaels
Massachusetts
Everett, MA
Gateway Center
DEV
100%
$
6,098
$
17.23
Costco, Dollar Tree, Home Depot, Michaels, Old Navy, Target, Total Wine & More
Framingham, MA
Shoppers World
100%
$
17,844
$
25.47
AMC Theatres, Barnes & Noble, Best Buy, DSW, Golf Galaxy, Hobby Lobby, HomeSense, Kohl's, Macy's Furniture Gallery, Marshalls, Michaels, Nordstrom Rack, PetSmart, Public Lands, Sierra Trading Post,
T.J. Maxx
Missouri
Brentwood, MO
The Promenade at Brentwood
100%
$
5,305
$
15.71
Burlington, Micro Center, PetSmart, Target, Trader Joe's
Independence, MO
Independence Commons
20%
$
5,713
$
15.51
AMC Theatres, Best Buy, Bob's Discount Furniture, Kohl's, Marshalls, Ross Dress for Less
New Jersey
East Hanover, NJ
East Hanover Plaza
100%
$
2,069
$
21.11
HomeGoods, HomeSense
Edgewater, NJ
Edgewater Towne Center
100%
$
1,618
$
29.60
Whole Foods
Freehold, NJ
Freehold Marketplace
DEV
100%
$
$
37.18
-
Hamilton, NJ
Hamilton Marketplace
100%
$
10,292
$
20.23
Barnes & Noble, Bed Bath & Beyond, Kohl's, Michaels,
Ross Dress for Less, ShopRite, Staples
Princeton, NJ
Nassau Park Pavilion
100%
$
11,393
$
15.64
At Home, Best Buy, Burlington, Dick's Sporting Goods, HomeGoods, HomeSense, Michaels, PetSmart, Raymour & Flanigan, T.J. Maxx, Wegmans
Union, NJ
Route 22 Retail Center
20%
$
1,562
$
15.90
Big Lots, Dick's Sporting Goods
Voorhees, NJ
Echelon Village Plaza
100%
$
$
12.58
The Edge Fitness Clubs
Woodland Park, NJ
West Falls Plaza
20%
$
1,786
$
21.45
andThat!, Cost Plus World Market
SITE Centers Corp.
Shopping Center Property List at December 31, 2022
Location
Center
Year Developed/
Redeveloped
Year Acquired
SITE Ownership Interest
Owned GLA (000's)
Total Annualized Base Rent (000's)
Average Base Rent
(Per SF)(1)
Key Tenants
New York
Hempstead, NY
The Hub
100%
$
3,277
$
13.27
Home Depot, Stop & Shop
North Carolina
Chapel Hill, NC
Meadowmont Village
20%
$
2,297
$
22.60
Harris Teeter
Charlotte, NC
Belgate Shopping Center
DEV
100%
$
4,771
$
16.79
Burlington, Cost Plus World Market, Hobby Lobby, Marshalls, Old Navy, PetSmart, T.J. Maxx
Charlotte, NC
Carolina Pavilion
100%
$
9,735
$
14.10
AMC Theatres, American Freight Outlet Stores, AutoZone, Bed Bath & Beyond, Big Lots, Burlington, buybuy BABY, Conn's, Floor & Decor, Frontgate Outlet Store, JOANN, Nordstrom Rack, Old Navy,
Ross Dress for Less, Value City Furniture
Charlotte, NC
Cotswold Village
100%
$
6,157
$
25.19
Harris Teeter, Marshalls, PetSmart
Cornelius, NC
The Shops at The Fresh Market
100%
$
1,400
$
18.73
The Fresh Market
Raleigh, NC
Poyner Place
20%
$
3,966
$
16.45
Cost Plus World Market, Marshalls, Michaels, Ross Dress for Less, Target, Urban Air Trampoline & Adventure Park
Wilmington, NC
University Centre
IPO
20%
$
4,441
$
11.33
Bed Bath & Beyond, Lowe's, Old Navy, Ollie's Bargain Outlet, Ross Dress for Less
Winston Salem, NC
Shoppes at Oliver's Crossing
20%
$
1,064
$
14.71
Lowes Foods
Ohio
Cincinnati, OH
Kenwood Square
100%
$
7,118
$
18.87
Dick's Sporting Goods, Macy's Furniture Gallery, Marshalls/HomeGoods, Michaels, T.J. Maxx,
The Fresh Market
Columbus, OH
Easton Market
100%
$
7,670
$
15.28
Bed Bath & Beyond, buybuy BABY, DSW, HomeGoods, Marshalls, Michaels, Nordstrom Rack, PetSmart, Ross Dress for Less, Sierra Trading Post, T.J. Maxx, Value City Furniture
Columbus, OH
Polaris Towne Center
100%
$
7,056
$
16.88
Best Buy, Big Lots, JOANN, Kroger, OfficeMax, T.J. Maxx
Mason, OH
Waterstone Center
100%
$
2,774
$
17.15
Best Buy, Michaels, Ross Dress for Less
Stow, OH
Stow Community Center
DEV
100%
$
4,855
$
12.30
Giant Eagle, Hobby Lobby, HomeGoods, Kohl's, T.J. Maxx
Toledo, OH
Springfield Commons
DEV
20%
$
2,433
$
11.72
Burlington, Kohl's, Planet Fitness
Westlake, OH
West Bay Plaza
IPO
100%
$
3,204
$
23.14
Fresh Thyme Farmers Market, HomeSense
Oregon
Hillsboro, OR
Tanasbourne Town Center
100%
$
5,211
$
21.56
Bed Bath & Beyond, Marshalls, Michaels, Ross Dress for Less, Sierra Trading Post
Portland, OR
The Blocks
100%
$
2,678
$
35.71
-
Pennsylvania
Boothwyn, PA
Larkin's Corner
100%
$
2,136
$
9.70
ACME, Walmart
Easton, PA
Southmont Plaza
100%
$
3,916
$
16.11
Barnes & Noble, Bed Bath & Beyond, Best Buy, Dick's Sporting Goods, Michaels, Staples
SITE Centers Corp.
Shopping Center Property List at December 31, 2022
Location
Center
Year Developed/
Redeveloped
Year Acquired
SITE Ownership Interest
Owned GLA (000's)
Total Annualized Base Rent (000's)
Average Base Rent
(Per SF)(1)
Key Tenants
South Carolina
Anderson, SC
Midtowne Park
100%
$
1,655
$
9.89
Dick's Sporting Goods, HomeGoods, Kohl's
Charleston, SC
Ashley Crossing
20%
$
2,215
$
11.17
Food Lion, JOANN, Kohl's, Marshalls
Mount Pleasant, SC
Wando Crossing
100%
$
3,222
$
15.61
Ashley Furniture HomeStore, Marshalls, Michaels, T.J. Maxx, Total Wine & More
Tennessee
Brentwood, TN
Cool Springs Pointe
100%
$
3,158
$
15.94
Best Buy, Restoration Hardware, Ross Dress for Less
Texas
Highland Village, TX
The Marketplace at Highland Village
100%
$
3,680
$
18.72
DSW, LA Fitness, T.J. Maxx/HomeGoods
Houston, TX
Shops at Tanglewood
100%
$
1,187
$
46.45
-
Round Rock, TX
Vintage Plaza
100%
$
$
27.70
-
San Antonio, TX
Bandera Pointe
DEV
100%
$
5,921
$
12.58
Barnes & Noble, Gold's Gym, JOANN, Lowe's, Old Navy, PetSmart, Ross Dress for Less, T.J. Maxx,
Urban Air Trampoline & Adventure Park
San Antonio, TX
Terrell Plaza
100%
$
2,083
$
20.15
Ross Dress for Less
San Antonio, TX
Village at Stone Oak
DEV
100%
$
6,412
$
18.75
Alamo Drafthouse Cinema, Hobby Lobby, HomeGoods,
Ross Dress for Less
Virginia
Charlottesville, VA
Emmet Street North
100%
$
$
86.32
-
Charlottesville, VA
Emmet Street Station
100%
$
$
51.82
-
Fairfax, VA
Boulevard Marketplace
100%
$
$
40.79
-
Fairfax, VA
Fairfax Marketplace
100%
$
$
55.14
-
Fairfax, VA
Fairfax Pointe
100%
$
$
49.39
-
Fairfax, VA
Fairfax Towne Center
100%
$
5,058
$
20.46
Bed Bath & Beyond, JOANN, Regal Cinemas, Safeway,
T.J. Maxx
Midlothian, VA
Commonwealth Center
20%
$
1,965
$
17.94
Michaels, The Fresh Market
Richmond, VA
Downtown Short Pump
100%
$
2,972
$
23.59
Barnes & Noble, Regal Cinemas
Richmond, VA
White Oak Village
100%
$
6,408
$
15.81
JCPenney, K&G Fashion Superstore, Michaels, PetSmart, Publix
Springfield, VA
Springfield Center
100%
$
4,199
$
23.76
Barnes & Noble, Bed Bath & Beyond, DSW, Marshalls, Michaels, The Tile Shop
(1)Calculated as total annualized base rentals divided by Company-owned rent commenced GLA as of December 31, 2022.
(2)Indicates the asset or a portion of the asset is subject to a ground lease. All other assets are owned fee simple.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s common shares are listed on the NYSE under the ticker symbol “SITC.” As of February 15, 2023, there were 3,722 record holders. This figure excludes non-registered holders that held their shares in "street name" through various brokerage firms, and therefore, does not represent the actual number of beneficial owners of the Company’s common shares.
The Company’s Board of Directors is responsible for establishing and, if appropriate, modifying the Company’s dividend policy. The Board of Directors intends to pursue a dividend policy retaining sufficient free cash flow to support the Company’s capital needs while still adhering to REIT payout requirements. In February 2023, the Company declared its first-quarter 2023 dividend of $0.13 per common share, payable on April 6, 2023, to shareholders of record at the close of business on March 17, 2023.
The decision to declare and pay future dividends on the Company’s common shares, as well as the timing, amount and composition of any such future dividends, will be at the discretion of the Company’s Board of Directors and will be subject to the Company’s cash flow from operations, earnings, financial condition, capital and debt service requirements and such other factors as the Board of Directors considers relevant. The Company is required by the Code to distribute at least 90% of its REIT taxable income. The Company intends to continue to declare quarterly dividends on its common shares; however, there can be no assurances as to the timing and amounts of future dividends.
Certain of the Company’s indentures contain financial and operating covenants including the requirement that the cumulative dividends declared or paid from December 31, 1993, through the end of the current period cannot exceed Funds From Operations (as defined in the agreement) plus an additional $20.0 million for the same period unless required to maintain REIT status.
The Company has a dividend reinvestment plan under which shareholders may elect to reinvest their dividends automatically in common shares. Under the plan, the Company may, from time to time, elect that common shares be purchased in the open market on behalf of participating shareholders or may issue new common shares to such shareholders.
ISSUER PURCHASES OF EQUITY SECURITIES
(a)
(b)
(c)
(d)
Total
Number of
Shares
Purchased(1)
Average
Price Paid
per Share
Total Number
of Shares Purchased
as Part of
Publicly Announced
Plans or Programs
Maximum Number
(or Approximate
Dollar Value) of
Shares That May Yet
Be Purchased Under
the Plans or Programs
(Millions)
October 1-31, 2022
$
10.71
-
$
-
November 1-30, 2022
4,958
12.40
-
-
December 1-31, 2022
2,162,904
13.35
2,162,884
-
Total
2,167,882
$
13.34
2,162,884
$
93.4
(1)Includes (i) common shares surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection with the vesting and/or exercise of awards under the Company’s equity-based compensation plans and (ii) common shares purchased under the Company's share repurchase program.
On November 29, 2018, the Company announced that its Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company was authorized to repurchase up to a maximum value of $100 million of its common shares, which authority was fully utilized as of December 20, 2022. In 2022, the Company repurchased 3.2 million of its common shares in open market transactions under this repurchase plan at an aggregate cost of $42.3 million, or $13.04 per share.
On December 20, 2022, the Company announced that its Board of Directors authorized a new common share repurchase program. Under the terms of the new program, the Company is authorized to repurchase up to a maximum value of $100 million of its common shares. In late December 2022, the Company repurchased 0.5 million of its common shares in open market transactions at an aggregate cost of $6.6 million, or $13.47 per share, under this program which settled in January 2023. As of January 31, 2023, the Company did not make any additional purchases of its common shares under this program.

---

ITEM 6. SELECTED FINANCIAL DATA
Item 6. [RESERVED]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE SUMMARY
The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of owning, leasing, acquiring, redeveloping, developing and managing shopping centers. As of December 31, 2022, the Company’s portfolio consisted of 119 shopping centers (including 18 shopping centers owned through unconsolidated joint ventures). At December 31, 2022, the Company owned 27.0 million square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture). At December 31, 2022, the aggregate occupancy of the Company’s operating shopping center portfolio was 92.4% on a pro rata basis, and the average annualized base rent per occupied square foot was $19.52 on a pro rata basis.
Current Strategy
The growth opportunities within the Company’s core property operations include rental rate increases, continued lease-up of the portfolio and the adaptation of existing site plans and square footage to generate higher blended rental rates and operating cash flows. Additional growth opportunities include external acquisitions and tactical redevelopment. Management intends to use retained cash flow, proceeds from the sale of lower growth assets and proceeds from equity offerings and debt financings to fund capital expenditures relating to new leasing activity, acquisitions, including opportunistic investments, and tactical redevelopment activity. In recent years, the Company’s acquisition activities have largely focused on unanchored, convenience retail properties that offer enhanced prospects for cash flow growth through rent increases and lower capital expenditure requirements.
The Company believes the following serve as cornerstones for the execution of its strategy:
•Maximization of recurring cash flows through strong leasing and core property operations;
•Growth in Company cash flows through capital recycling, especially the redeployment of capital from mature, slower growing assets into acquisitions that offer greater prospects for growth in property-level cash flows;
•Enhancement of property cash flows through creative, proactive tactical redevelopment efforts that result in the profitable adaptation of site plans to better suit tenant and community demands;
•Risk mitigation through continuous focus on maintaining prudent leverage levels and lengthy average debt maturities, as well as access to a diverse selection of capital sources, including the secured and unsecured debt markets, unsecured lines of credit, common equity and capital from a wide range of joint venture partners and
•Sustainability of growth through a constant focus on relationships with employee, community and investor constituencies.
Transaction and Capital Markets Highlights
Transaction and investment highlights for the Company during 2022 include the following:
•Acquired 16 shopping centers (including one through the acquisition of a partner's interest) in Arizona, California, Colorado, Florida, Georgia, Texas and Virginia for an aggregate purchase price of $342.4 million;
•Sold 33 shopping centers and land parcels for $885.5 million ($371.1 million at the Company's share), including the Company's 20% interest in the SAU Joint Venture based on a gross asset value of $155.7 million (at 100%) and the Company’s 20% interest in 13 assets owned by the DDRM Joint Venture based on a gross asset value of $387.6 million (at 100%);
•In June 2022, amended and restated its $950 million revolving credit facility to, among other things, extend the maturity date to June 2026 (subject to two six-month extension options) and change the interest rate benchmark from LIBOR to SOFR. The Company also amended and restated its $100 million term loan to, among other things, extend the maturity date to June 2027 and change the interest rate benchmark from LIBOR to SOFR. The Company drew an additional $100.0 million on the term loan facility with total borrowings under the term loan facility aggregating $200.0 million at December 31, 2022. The Company also swapped the variable rate component of the term loan's interest rate to a fixed rate through the loan’s maturity in June 2027;
•In the first and second quarter of 2022, settled 2.4 million common shares which were offered and sold on a forward basis under its $250 million continuous equity program, resulting in gross proceeds of $38.3 million, or $15.79 per share;
•In the third and fourth quarters, repurchased 3.7 million of its common shares in open market transactions at an aggregate cost of $48.9 million, or $13.09 per share (including fees) and
•Declared aggregate cash dividends of $0.52 per common share.
Operational Accomplishments
The Company's 2022 leasing volumes were the highest level in five years despite a decrease in the Company’s GLA. The Company believes that recent strong leasing volumes are attributable to the concentration of the Company’s portfolio in suburban, high household income communities and to national tenants’ strong financial positions and increasing emphasis and reliance on physical store locations to improve the speed and efficiency of fulfillment of online purchases.
Operating highlights for 2022 included:
•Signed new leases and renewals for approximately 4.3 million square feet of GLA, which included 1.1 million square feet of new leasing volume, both on a pro rata basis;
•Achieved new cash lease spreads of 26.0% and renewal spreads of 6.4% at the Company’s pro rata share;
•Increased annualized base rent per occupied square foot on a pro rata basis to $19.52 at December 31, 2022, as compared to $18.33 at December 31, 2021, primarily due to favorable leasing results and transactional activity and
•Aggregate occupancy increased on a pro rata basis to 92.4% at December 31, 2022, from 90.0% at December 31, 2021.
Retail Environment
The Company continued to see demand from a broad range of tenants for its space in 2022, particularly as large national retailers launched new brand concepts and further incorporated omni-channel strategies leveraging brick and mortar infrastructure to fulfill online purchases and drive incremental business. Although certain retailers have recently announced bankruptcies and/or store closures, other retailers, specifically those in the value and convenience category, continue to expand their store fleets and launch new concepts. As a result, the Company believes that its prospects to backfill any spaces vacated by bankrupt or non-renewing tenants are generally good, though such re-tenanting efforts may require additional capital expenditures and opportunities to lease any vacant theater spaces may be more limited. Many of the Company’s largest tenants, including TJX Companies, Dick’s Sporting Goods, Ross, Burlington and Five Below, remain well positioned with access to capital and have outperformed other retail categories on a relative basis.
COVID-19 Pandemic
In March 2020, the World Health Organization categorized COVID-19 as a pandemic, which had a significant impact on the Company's collection rates in 2020. The Company’s collection rates improved throughout 2021 and collection rates in 2022 were generally consistent with pre-pandemic levels. The Company's tenants, including tenants previously on the cash basis of accounting, are paying their monthly rent in a manner consistent with periods prior to the COVID-19 pandemic and have generally repaid deferred rents relating to prior periods. As of December 31, 2022, the COVID-19-related rent deferral arrangements for tenants that are not accounted for on the cash basis have been repaid. Included in 2022 and 2021 results was $3.6 million and $13.8 million of prior-period rental revenue, at SITE Centers’ share, respectively, primarily from cash-basis tenants.
The Company continues to monitor the impact of the COVID-19 pandemic on its business. Any new surges in contagion or new COVID-19 variants could adversely impact the Company’s ability to lease space and collect rents. Certain tenant categories remain especially vulnerable to the impact of the COVID-19 pandemic, including movie theaters, fitness centers and restaurants that rely on in-person dining, activities and entertainment. For a further discussion of the impact of the COVID-19 pandemic on the Company’s business, see Item 1A. Risk Factors in Part I of this Report on Form 10-K and “Liquidity, Capital Resources and Financing Activities” and “Economic Conditions” included in this section.
Company Fundamentals
The following table lists the Company’s 10 largest tenants at its wholly-owned properties and its proportionate share of unconsolidated joint venture properties combined as of December 31, 2022:
At SITE Centers' Share
Tenant
% of Total
Shopping Center
Base Rental
Revenues
% of Company-
Owned Shopping
Center GLA
1.
TJX Companies(A)
5.9%
7.0%
2.
Dick's Sporting Goods(B)
2.7%
2.8%
3.
PetSmart
2.4%
2.3%
4.
Michaels
2.2%
2.4%
5.
Ross Stores(C)
2.1%
2.9%
6.
Bed, Bath & Beyond(D)
1.9%
2.5%
7.
Nordstrom Rack
1.8%
1.6%
8.
Gap(E)
1.8%
1.6%
9.
Best Buy
1.8%
1.9%
10.
Burlington
1.7%
1.9%
The following table lists the Company’s and its unconsolidated joint ventures' 10 largest tenants at 100% as of December 31, 2022:
At 100%
Wholly-Owned Properties
Joint Venture Properties
Tenant
% of
Shopping Center
Base Rental Revenues
% of Company-
Owned Shopping
Center GLA
% of
Shopping Center
Base Rental Revenues
% of Company-
Owned Shopping
Center GLA
TJX Companies(A)
6.0%
5.2%
3.2%
3.4%
Dick's Sporting Goods(B)
2.7%
2.0%
2.9%
3.0%
PetSmart
2.4%
1.7%
1.2%
0.9%
Michaels
2.2%
1.8%
2.1%
2.1%
Ross Stores(C)
2.1%
2.1%
3.8%
3.9%
Nordstrom Rack
1.9%
1.2%
0.0%
0.0%
Bed, Bath & Beyond(D)
1.8%
1.8%
2.4%
1.6%
Gap(E)
1.7%
1.1%
3.0%
2.2%
Best Buy
1.7%
1.4%
2.7%
2.3%
Ulta
1.7%
0.9%
1.9%
1.1%
AMC Theatre
1.4%
0.6%
7.1%
3.9%
Kohl's
1.5%
2.1%
5.0%
7.0%
Lowe's
0.4%
0.9%
2.9%
4.3%
Cinemark Theatre
0.3%
0.3%
2.3%
1.7%
(A)Includes T.J. Maxx, Marshalls, HomeGoods, Sierra Trading, HomeSense and Combo Store
(B)Includes Dick’s Sporting Goods, Golf Galaxy and Public Lands
(C)Includes Ross Dress for Less and dd’s Discounts
(D)Includes Bed Bath & Beyond, buybuy BABY, Combo Store and subleases
(E)Includes Gap, Old Navy and Banana Republic
The Company leased approximately 5.2 million square feet (4.3 million square feet at the Company’s share) of GLA in 2022 in its wholly-owned and joint venture portfolios, composed of 222 new leases and 421 renewals, for a total of 643 leases executed in 2022. At December 31, 2022, the Company had 206 leases expiring in 2023 with an average base rent per square foot of $21.49 on a pro rata basis. For the comparable leases executed in 2022, at the Company’s interest, the Company generated positive cash leasing
spreads of 26.0% for new leases and 6.4% for renewals, or 8.5% on a blended basis. Cash leasing spreads are a key metric in real estate, representing the percentage increase over rental rates on existing leases versus rental rates on new and renewal leases, though leasing spreads exclude consideration of the amount of capital expended in connection with new leasing activity and exclude properties in redevelopment. The Company’s cash leasing spread calculation includes only those deals that were executed within one year of the date the prior tenant vacated, in addition to other factors that limit comparability, and as a result, is a good benchmark to compare the average annualized base rent of expiring leases with the comparable executed market rental rates.
For new leases executed during 2022, the Company expended a weighted-average cost of tenant improvements and lease commissions estimated at $7.42 per rentable square foot, on a pro rata basis, over the lease term, as compared to $8.34 per rentable square foot in 2021. The Company generally does not expend a significant amount of capital on lease renewals.
Summary-2022 Financial Results
The following provides an overview of the Company’s key financial metrics (see “Non-GAAP Financial Measures”) (in thousands except per share amounts):
For the Year Ended
December 31,
Net income attributable to common shareholders
$
157,563
$
106,123
FFO attributable to common shareholders
$
250,991
$
242,774
Operating FFO attributable to common shareholders
$
253,346
$
245,687
Earnings per share - Diluted
$
0.73
$
0.51
For the year ended December 31, 2022, the increase in net income attributable to common shareholders, as compared to the prior year, was primarily attributable to higher gain on sale of wholly-owned and joint venture interests, higher operating results driven by base rent growth at existing assets, the net impact of property transaction activity, lower general and administrative expenses due to mark-to-market activity recorded in 2021 for certain PRSUs and the write-off of preferred share original issuance costs in 2021, partially offset by lower fee income from joint ventures and RVI.
The following discussion of the Company’s financial condition and results of operations provides information that will assist in the understanding of the Company’s financial statements and the factors that accounted for changes in certain key items in the financial statements, as well as critical accounting estimates that affected these financial statements.
CRITICAL ACCOUNTING ESTIMATES
The consolidated financial statements of the Company include the accounts of the Company and all subsidiaries where the Company has financial or operating control. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, management has used available information, including the Company’s history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the Company’s consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by management in formulating its estimates inherent in these financial statements might not materialize. Application of the critical accounting policies described below involves the exercise of judgment and the use of assumptions as to future uncertainties. Accordingly, actual results could differ from these estimates. In addition, other companies may use different estimates that may affect the comparability of the Company’s results of operations to those of companies in similar businesses.
Revenue Recognition and Accounts Receivable
Rental income has been reduced for the elimination of unpaid contractual lease payments for tenants that are on the cash basis of accounting due to collectability concerns. The payment of past due amounts owed by cash basis tenants could occur in a year beyond when the original amount was due creating volatility in the year-over-year presentation of rental income. When a tenant comes off the cash basis, there could be a reinstatement of the straight-line rent receivable, which would result in additional recognition of straight-line income.
The Company makes estimates of the collectability of its accounts receivable related to base rents, including straight-line rents, expense reimbursements and other revenue or income. The Company analyzes tenant credit worthiness, as well as current economic and tenant-specific sector trends when evaluating the probability of collection of accounts receivable. In evaluating tenant credit worthiness, the Company’s assessment may include a review of payment history, tenant sales performance and financial position. For
larger national tenants, the Company also evaluates projected liquidity, as well as the tenant’s access to capital and the overall health of the particular sector. In addition, with respect to tenants in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the probability of collection of the related receivable. The time to resolve these claims may exceed one year. These estimates have a direct impact on the Company’s earnings because once the amount is considered not probable of being collected, earnings are reduced by a corresponding amount until the receivable is collected.
Real Estate and Long-Lived Assets
Impairment Assessment
On a periodic basis, management assesses whether there are any indicators that the value of real estate assets, including undeveloped land and construction in progress, and intangibles may be impaired. Impairment indicators are primarily related to a change in estimated hold periods and significant, prolonged decreases in projected cash flows; however, other impairment indicators could occur. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. The determination of undiscounted cash flows may require significant estimates by management. In management’s estimate of projected cash flows, it considers factors such as hold period, expected future operating income (loss), trends and prospects, the effects of demand, competition and other factors. If the Company is evaluating the potential sale of an asset or development alternatives, the undiscounted future cash flows analysis is probability-weighted based upon management’s best estimate of the likelihood of the alternative courses of action. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists and whether the effects could have a material impact on the Company’s net income. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property.
The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company’s net income because recording an impairment charge results in an immediate negative adjustment to net income. If the Company’s estimates of the anticipated holding periods, projected future cash flows or market conditions change, its evaluation of the impairment charges may be different, and such differences could be material to the Company’s consolidated financial statements. Specifically, plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
Measurement of Fair Value
The Company is required to periodically assess for impairment the value of its consolidated real estate assets. The fair value of real estate investments used in the Company’s impairment calculations is estimated based on the price that would be received for the sale of an asset in an orderly transaction between marketplace participants at the measurement date. Real estate assets without a public market are valued based on assumptions made and valuation techniques used by the Company. The availability of observable transaction data and inputs can make it more difficult and/or subjective to determine the fair value of such real estate assets. As a result, amounts ultimately realized by the Company from real estate assets sold may differ from the fair values presented, and the differences could be material.
The valuation of real estate assets for impairment is determined using widely accepted valuation techniques including the income capitalization approach or discounted cash flow analysis on the expected cash flows of each asset considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations, bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company utilizes a valuation technique that is based on the characteristics of the specific asset when measuring fair value of an investment. However, a single valuation technique is generally used for the Company’s property type. The significant assumptions include the capitalization rate used in the income capitalization valuation, as well as the projected property net operating income. Valuation of real estate assets is calculated based on market conditions and assumptions made by management at the measurement date, which may differ materially from actual results if market conditions or the underlying assumptions change.
Purchase Price Allocations of Property Acquisitions
For the acquisition of real estate assets, the Company allocates the purchase price to assets acquired and liabilities assumed at the date of acquisition. The Company applies various valuation methods, all of which require significant estimates by management, including discount rates, exit capitalization rates, estimated land values (per square foot), capitalization rates and certain market leasing assumptions. Further, the valuation of above- and below-market lease values are significantly impacted by management's estimate of fair market lease rates for each corresponding in-place lease. If the Company determines that an event has occurred after the initial allocation of the asset or liability that would change the estimated useful life of the asset, the Company will reassess the
depreciation and amortization of the asset. The Company is required to make subjective estimates in connection with these valuations and allocations.
RESULTS OF OPERATIONS
For the comparison of the Company’s 2022 performance to 2021 presented below, consolidated shopping center properties owned as of January 1, 2021, are referred to herein as the “Comparable Portfolio Properties.” The discussion of the Company’s 2021 performance compared to 2020 performance is set forth in - “Comparison of 2021 and 2020 Results of Operations” included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Revenues from Operations (in thousands)
$ Change
Rental income(A)
$
537,106
$
490,799
$
46,307
Fee and other income(B)
15,247
42,065
(26,818
)
Total revenues
$
552,353
$
532,864
$
19,489
(A)The following table summarizes the key components of rental income (in thousands):
Contractual Lease Payments
$ Change
Base and percentage rental income(1)
$
391,883
$
353,067
$
38,816
Recoveries from tenants(2)
133,574
120,530
13,044
Uncollectible revenue(3)
1,388
9,383
(7,995
)
Lease termination fees, ancillary and other rental income
10,261
7,819
2,442
Total contractual lease payments
$
537,106
$
490,799
$
46,307
(1)The changes in base and percentage rental income were due to the following (in millions):
Increase (Decrease)
Acquisition of shopping centers
$
25.5
Comparable Portfolio Properties
11.3
Disposition of shopping centers
(0.4
)
Straight-line rents
2.4
Total
$
38.8
The increase in straight-line rents was primarily due to the impact of straight-line rents recorded on properties recently acquired and the re-establishment of the recognition of straight-line rents for tenants that were removed from the cash basis of accounting.
The following tables present the statistics for the Company’s assets affecting base and percentage rental income summarized by the following portfolios: pro rata combined shopping center portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio:
Pro Rata Combined
Shopping Center Portfolio
December 31,
Centers owned (at 100%)
Aggregate occupancy rate
92.4
%
90.0
%
Average annualized base rent per occupied square foot
$
19.52
$
18.33
Wholly-Owned Shopping Centers
December 31,
Centers owned
Aggregate occupancy rate
92.6
%
90.0
%
Average annualized base rent per occupied square foot
$
19.61
$
18.52
Joint Venture Shopping Centers
December 31,
Centers owned
Aggregate occupancy rate
90.7
%
89.4
%
Average annualized base rent per occupied square foot
$
16.20
$
15.15
(2)Recoveries from tenants were approximately 78.6% and 78.9% of operating expenses and real estate taxes for the years ended December 31, 2022 and 2021, respectively.
(3)Primarily relates to the impact of the COVID-19 pandemic on rent collections, including the impact of lease modification accounting and tenants on the cash basis of accounting due to collectability concerns. The net amount reported as income was primarily attributable to rental income paid in each respective year from tenants on the cash basis of accounting, which related to amounts (including deferred rents) originally owed in 2020 and 2021.
(B)In 2022, Fee and Other Income was primarily earned from the Company's unconsolidated joint ventures. The decrease as compared to 2021 primarily related to lower fee revenue from RVI and joint ventures as a result of asset sales, a trend expected to continue in future periods. As of April 2022, RVI no longer owns any real estate investments. The management agreement with RVI in effect as of January 1, 2022, includes a reduced asset management fee to effectuate a wind-up of its operations. In 2022, the DDRM Joint Venture sold 16 assets and the Company expects that the DDRM Joint Venture may sell additional assets in the future. The components of Fee and Other Income are presented in Note 2, “Revenue Recognition,” to the Company’s consolidated financial statements included herein.
Changes in the number of assets under management or the fee structures applicable to such arrangements will adversely impact the amount of revenue recorded in future periods. The Company’s other joint venture partners may also elect to terminate their joint venture arrangements with the Company in connection with a change in investment strategy or otherwise. See “Sources and Uses of Capital” included elsewhere herein.
Expenses from Operations (in thousands)
$ Change
Operating and maintenance(A)
$
89,278
$
76,716
$
12,562
Real estate taxes(A)
80,706
76,071
4,635
Impairment charges(B)
2,536
7,270
(4,734
)
General and administrative(C)
46,564
55,052
(8,488
)
Depreciation and amortization(A)
203,546
185,768
17,778
$
422,630
$
400,877
$
21,753
(A)The changes were due to the following (in millions):
Operating
and
Maintenance
Real Estate
Taxes
Depreciation
and
Amortization
Acquisition of shopping centers
$
5.9
$
4.3
$
20.8
Comparable Portfolio Properties
6.5
0.7
(2.8
)
Disposition of shopping centers
0.2
(0.4
)
(0.2
)
$
12.6
$
4.6
$
17.8
The increase in Operating and Maintenance for the Comparable Portfolio Properties was primarily the result of higher landlord expenses.
(B)For the year ended December 31, 2022 and 2021, the Company recorded impairment charges that were triggered by a change in hold period assumptions. Changes in (i) an asset’s expected future undiscounted cash flows due to changes in market or leasing conditions, (ii) various courses of action that may occur or (iii) holding periods could result in the recognition of additional impairment charges. Impairment charges are presented in Note 14, “Impairment Charges and Reserves,” to the Company’s consolidated financial statements included herein.
(c)General and administrative expenses for the years ended December 31, 2022 and 2021, were approximately 6.8% and 6.7% of total revenues (excluding uncollectible revenue), respectively, including total revenues of unconsolidated joint ventures and managed properties for the comparable periods. Excluding mark-to-market activity recorded in 2021 of $5.6 million for certain PRSUs which were granted in 2018 and settled in 2021, general and administrative expenses were 6.0% of total revenues for the year ended December 31, 2021. The Company continues to expense certain internal leasing salaries, legal salaries and related expenses associated with leasing and re-leasing of existing space.
Other Income and Expenses (in thousands)	
$ Change
Interest expense(A)
$
(77,692
)
$
(76,383
)
$
(1,309
)
Other expense, net
(2,540
)
(1,185
)
(1,355
)
$
(80,232
)
$
(77,568
)
$
(2,664
)
(A)The weighted-average debt outstanding and related weighted-average interest rate are as follows:
For the Year Ended December 31,
Weighted-average debt outstanding (in billions)
$
1.8
$
1.8
Weighted-average interest rate
4.1
%
4.1
%
The Company’s overall balance sheet strategy is to continue to maintain substantial liquidity, prudent leverage levels and lengthy average debt maturities. The weighted-average interest rate (based on contractual rates and excluding fair market value of adjustments and debt issuance costs) was 4.1% and 4.0% at December 31, 2022 and 2021, respectively.
Interest costs capitalized in conjunction with redevelopment projects were $1.1 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively.
Other Items (in thousands)
$ Change
Equity in net income of joint ventures(A)
$
27,892
$
47,297
$
(19,405
)
Gain on sale and change in control of interests, net(B)
45,581
19,185
26,396
Gain on disposition of real estate, net(C)
46,644
6,065
40,579
Tax expense of taxable REIT subsidiaries and state
franchise and income taxes
(816
)
(1,550
)
Income attributable to non-controlling interests, net(D)
(73
)
(481
)
(A)Primarily the result of gains on sale of assets in both years. Amounts in 2022 also reflect the reduction of income as a result of the asset sales closed in 2021 and 2022. Joint venture property sales could significantly impact the amount of income or loss recognized in future periods. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.
(B)In 2022, the Company recorded a $3.3 million gain from the acquisition of its joint venture partner's 80% equity interest in an asset (Casselberry Commons) owned by the DDRM Joint Venture, a $16.8 million gain from the sale of its 20% interest in the SAU Joint Venture to its partner and a $25.4 million gain from the sale of its 50% interest in Lennox Town Center to its partner. The 2021 gain relates to the sale of the Company’s interest in undeveloped land in Richmond Hill, Ontario and the Company's acquisition of the equity interest of six assets owned by the DDRM Joint Venture.
(C)The Company sold five wholly-owned shopping centers and land parcels in 2022 and several land parcels in 2021.
(D)In December 2021, the Company acquired its partner’s 33% non-controlling ownership interest in Paradise Village Gateway (Phoenix, Arizona), which represents the entire amount of the non-controlling interest recorded by the Company with respect to this property.
Net Income (in thousands)
$ Change
Net income attributable to SITE Centers
$
168,719
$
124,935
$
43,784
The increase in net income attributable to SITE Centers, as compared to the prior year, was primarily attributable to higher gain on sale of wholly-owned and joint venture interests, higher operating results driven by base rent growth at existing assets, the net impact of property acquisitions and lower general and administrative expenses due to mark-to-market activity recorded in 2021 for certain PRSUs, partially offset by lower fee income from joint ventures and RVI.
NON-GAAP FINANCIAL MEASURES
Funds from Operations and Operating Funds from Operations
Definition and Basis of Presentation
The Company believes that Funds from Operations (“FFO”) and Operating FFO, both non-GAAP financial measures, provide additional and useful means to assess the financial performance of REITs. FFO and Operating FFO are frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.
FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assume that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from property dispositions, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, interest costs and acquisition, disposition and development activities. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with (GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT.
The Company believes that certain charges, income and gains recorded in its operating results are not comparable or reflective of its core operating performance. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. As a result, the Company also computes Operating FFO and discusses it with the users of its financial statements, in addition to other measures such as net income (loss) determined in accordance with GAAP and FFO. Operating FFO is generally defined and calculated by the Company as FFO excluding certain charges, income and gains that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio. Such adjustments include write-off of preferred share original issuance costs, gains/losses on the early extinguishment of debt, certain transaction fee income, transaction costs and other restructuring type costs. The disclosure of these adjustments is regularly requested by users of the Company’s financial statements.
The adjustment for these charges, income and gains may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. Additionally, the Company provides no assurances that these charges, income and gains are non-recurring. These charges, income and gains could be reasonably expected to recur in future results of operations.
These measures of performance are used by the Company for several business purposes and by other REITs. The Company uses FFO and/or Operating FFO in part (i) as a disclosure to improve the understanding of the Company’s operating results among the investing public, (ii) as a measure of a real estate asset company’s performance, (iii) to influence acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs.
For the reasons described above, management believes that FFO and Operating FFO provide the Company and investors with an important indicator of the Company’s operating performance. They provide recognized measures of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO and Operating FFO in a different manner.
Management recognizes the limitations of FFO and Operating FFO when compared to GAAP’s net income. FFO and Operating FFO do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO or Operating FFO as an indicator of the Company’s cash obligations
and funding requirements for future commitments, acquisitions or development activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP, and neither is necessarily indicative of cash available to fund cash needs. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company’s operating performance. The Company believes that to further understand its performance, FFO and Operating FFO should be compared with the Company’s reported net income (loss) and considered in addition to cash flows determined in accordance with GAAP, as presented in its consolidated financial statements. Reconciliations of these measures to their most directly comparable GAAP measure of net income (loss) have been provided below.
Reconciliation Presentation
FFO and Operating FFO attributable to common shareholders were as follows (in thousands):
For the Year Ended
December 31,
$ Change
FFO attributable to common shareholders
$
250,991
$
242,774
$
8,217
Operating FFO attributable to common shareholders
253,346
245,687
7,659
The increase in FFO for the year ended December 31, 2022, as compared to the prior year, was primarily attributable to higher operating results driven by base rent growth at existing assets, the net impact of property acquisitions, lower general and administrative expenses due to the mark-to-market adjustment on certain PRSUs settled in 2021 and the write-off of preferred share original issuance costs in 2021, partially offset by lower management fees. The change in Operating FFO primarily was due to positive operating results, partially offset by lower fee income.
The Company’s reconciliation of net income attributable to common shareholders computed in accordance with GAAP to FFO attributable to common shareholders and Operating FFO attributable to common shareholders is as follows (in thousands). The Company provides no assurances that these charges and gains are non-recurring. These charges and gains could reasonably be expected to recur in future results of operations.
For the Year Ended December 31,
Net income attributable to common shareholders
$
157,563
$
106,123
Depreciation and amortization of real estate investments
198,662
180,158
Equity in net income of joint ventures
(27,892
)
(47,297
)
Joint ventures' FFO(A)
12,274
21,703
Non-controlling interests (OP Units)
Impairment of real estate
2,536
7,270
Gain on sale and change in control of interests, net
(45,581
)
(19,185
)
Gain on disposition of real estate, net
(46,644
)
(6,065
)
FFO attributable to common shareholders
250,991
242,774
RVI disposition fees
(385
)
(9,016
)
Mark-to-market adjustment (PRSUs)
-
5,589
Debt extinguishment and other, net
1,886
1,047
Joint ventures - debt extinguishment and other, net
Write-off of preferred share original issuance costs
-
5,156
Non-operating items, net
2,355
2,913
Operating FFO attributable to common shareholders
$
253,346
$
245,687
(A)At December 31, 2022 and 2021, the Company had an economic investment in unconsolidated joint ventures which owned 18 and 47 shopping center properties, respectively. These joint ventures represent the investments in which the Company recorded its share of equity in net income or loss and, accordingly, FFO and Operating FFO.
Joint ventures’ FFO and Operating FFO are summarized as follows (in thousands):
For the Year Ended December 31,
Net income attributable to unconsolidated
joint ventures
$
106,846
$
110,032
Depreciation and amortization of real estate investments
46,518
66,618
Impairment of real estate
17,550
-
Gain on disposition of real estate, net
(120,097
)
(89,935
)
FFO
$
50,817
$
86,715
FFO at SITE Centers' ownership interests
$
12,274
$
21,703
Operating FFO at SITE Centers' ownership interests
$
13,128
$
21,840
Net Operating Income and Same Store Net Operating Income
Definition and Basis of Presentation
The Company uses Net Operating Income (“NOI”), which is a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
The Company also presents NOI information on a same store basis, or Same Store Net Operating Income (“SSNOI”). The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income and reimbursements and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI includes assets owned in comparable periods (15 months for prior period comparisons). In addition, SSNOI is presented including activity associated with major and tactical redevelopment. SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI at its effective ownership interest provides investors with additional information regarding the operating performance of comparable assets because it excludes certain non-cash and non-comparable items as noted above. SSNOI is frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.
SSNOI is not, and is not intended to be, a presentation in accordance with GAAP. SSNOI information has its limitations as it excludes any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. SSNOI does not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use SSNOI as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. SSNOI does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. SSNOI should not be considered as an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. A reconciliation of NOI and SSNOI to their most directly comparable GAAP measure of net income (loss) is provided below.
Reconciliation Presentation
The Company’s reconciliation of net income computed in accordance with GAAP to NOI and SSNOI for the Company at 100% and at its effective ownership interest of the assets is as follows (in thousands):
For the Year Ended December 31,
At 100%
At the Company's Interest
Net income attributable to SITE Centers
$
168,719
$
124,935
$
168,719
$
124,935
Fee income
(11,546
)
(40,521
)
(11,546
)
(40,521
)
Interest expense
77,692
76,383
77,692
76,383
Depreciation and amortization
203,546
185,768
203,546
185,768
General and administrative
46,564
55,052
46,564
55,052
Other expense (income), net
2,540
1,185
2,540
1,185
Impairment charges
2,536
7,270
2,536
7,270
Equity in net income of joint ventures
(27,892
)
(47,297
)
(27,892
)
(47,297
)
Tax expense
1,550
1,550
Gain on sale and change in control of interests
(45,581
)
(19,185
)
(45,581
)
(19,185
)
Gain on disposition of real estate, net
(46,644
)
(6,065
)
(46,644
)
(6,065
)
Income from non-controlling interests
Consolidated NOI
$
370,823
$
339,556
$
370,823
$
339,556
Net income from unconsolidated joint ventures
$
106,846
$
110,032
$
22,248
$
49,459
Interest expense
34,055
43,379
7,664
10,557
Depreciation and amortization
46,518
66,618
10,457
15,107
Impairment charges
17,550
-
3,510
-
Other expense (income), net
12,303
12,074
2,766
2,951
Gain on disposition of real estate, net
(120,097
)
(89,935
)
(23,965
)
(42,897
)
Unconsolidated NOI
$
97,175
$
142,168
$
22,680
$
35,177
Total Consolidated + Unconsolidated NOI
$
393,503
$
374,733
Less: Non-Same Store NOI adjustments
(34,404
)
(18,380
)
Total SSNOI including redevelopment
$
359,099
$
356,353
SSNOI % Change including redevelopment
0.8
%
The increase in SSNOI for the year ended December 31, 2022, was impacted by rents and recoveries primarily attributable to sequential increases in occupancy for same-store assets. This increase was negatively impacted by a decrease in the amount of rental revenues received from tenants related to prior-periods primarily from tenants on the cash basis of accounting. SSNOI for the year ended December 31, 2022, included uncollectible revenue of $3.4 million related to prior-period rental revenues as compared to $12.8 million for the year ended December 31, 2021.
LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES
The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders or repurchase or refinance long-term debt as part of its overall strategy to further strengthen its financial position. The Company remains committed to monitoring liquidity and the duration of its indebtedness and to maintaining prudent leverage levels in an effort to manage its overall risk profile.
The Company’s consolidated and unconsolidated debt obligations generally require monthly or semi-annual payments of principal and/or interest over the term of the obligation. While the Company currently believes it has several viable sources to obtain capital and fund its business, including capacity under its Revolving Credit Facility (as defined below), no assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any new debt financings may also entail higher rates of interest than the indebtedness being refinanced, which could have an adverse effect on the Company’s operations.
The Company has historically accessed capital sources through both the public and private markets. Acquisitions and redevelopments are generally financed through cash provided from operating activities, the Revolving Credit Facility, mortgages assumed, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was $1.7 billion at both December 31, 2022 and 2021.
At December 31, 2022, the Company had an unrestricted cash balance of $20.3 million and availability under its Revolving Credit Facility of $950.0 million (subject to satisfaction of applicable borrowing conditions). The Company has $87.2 million aggregate principal amount of senior notes maturing in 2023. In 2024, the Company has $65.6 million aggregate principal amount of senior notes and $27.1 million of consolidated mortgage debt maturing. The Company’s unconsolidated joint ventures have $22.1 million and $88.9 million in mortgage debt at the Company’s share maturing in 2023 and 2024, respectively. As of December 31, 2022, the Company did not have any indebtedness outstanding having an interest rate determined by reference to LIBOR. As of December 31, 2022, the Company anticipates that it has approximately $23 million to be incurred on its pipeline of identified redevelopment projects. The Company declared aggregate common share dividends of $0.52 per share in 2022 and declared a dividend of $0.13 per share in the first quarter of 2023. The Company believes it has sufficient liquidity to operate its business at this time.
Revolving Credit Facility and Term Loan
The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Facility”) that provides for borrowings of up to $950 million, which limit may be increased to $1.45 billion provided that existing or new lenders agree to provide incremental commitments and subject to other conditions precedent. The Revolving Credit Facility matures in June 2026 subject to two six-month options to extend the maturity to June 2027 at the Company’s option (subject to the satisfaction of certain conditions). The Company’s borrowings under the Revolving Credit Facility bear interest at variable rates at the Company’s election, based on either (i) the SOFR rate plus a 10 basis point credit spread adjustment plus an applicable margin (0.85% at December 31, 2022), or (ii) the alternative base rate plus an applicable margin (0.0% at December 31, 2022). The Revolving Credit Facility also provides for an annual facility fee, which was 20 basis points on the entire facility at December 31, 2022. The applicable margins and facility fee vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Investor Services Inc. (“Fitch”) (or their respective successors). The Revolving Credit Facility also features a sustainability-linked pricing component whereby the applicable interest rate margin can be adjusted by one or two basis points if the Company meets certain sustainability performance targets.
In 2022, in connection with the amendment and restatement of the Revolving Credit Facility described above, the Company terminated its separate $20 million unsecured revolving credit facility with PNC Bank, National Association.
The Company also maintains a $200 million unsecured term loan with a syndicate of financial institutions and Wells Fargo Bank, National Association, as administrative agent (the “Term Loan”), that bears interest at variable rates, based on the Company's long-term senior unsecured debt ratings, equal to (i) the SOFR rate plus a 10 basis point credit spread adjustment plus an applicable margin (0.95% at December 31, 2022) or (ii) the alternative base rate plus an applicable margin (0.0% at December 31, 2022). The applicable margins vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s, S&P and Fitch (or their respective successors). In August 2022, the Company swapped the portion of the Term Loan's interest rate calculated by reference to the variable SOFR rate to a fixed rate of 2.75% per annum. The Term Loan matures in June 2027. The Company may increase the principal amount of the Term Loan in the future to up to $800 million in the aggregate provided that existing or new lenders are identified to provide additional loan commitments subject to other customary conditions precedent. The Term Loan also features a sustainability-linked pricing component whereby the applicable interest rate margin can be adjusted by one to two basis points if the Company meets certain sustainability performance targets. The covenants governing the Term Loan are substantially identical to those governing the Revolving Credit Facility.
The Revolving Credit Facility, the Term Loan and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants including, among other things, leverage ratios and debt service coverage and fixed-charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in certain mergers and acquisitions. The Revolving Credit Facility, the Term Loan and the indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay, when due, certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain further funding, and/or an acceleration of any outstanding borrowings may occur. As of December 31, 2022, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company believes it will continue to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities.
Consolidated Indebtedness - as of December 31, 2022
As discussed above, the Company is committed to maintaining prudent leverage levels and may utilize proceeds from equity offerings or the sale of properties or other investments to repay additional debt. These sources of funds could be affected by various risks and uncertainties. No assurance can be provided that the Company’s debt obligations will be refinanced or repaid as currently anticipated. See Item 1A. Risk Factors.
The Company continually evaluates its debt maturities and, based on management’s assessment, believes it has viable financing and refinancing alternatives. The Company has sought to manage its debt maturities through executing a strategy to extend debt duration, increase liquidity, maintain prudent leverage levels and improve the Company’s credit profile with a focus of lowering the Company’s balance sheet risk and cost of capital.
Unconsolidated Joint Ventures’ Mortgage Indebtedness - as of December 31, 2022
The Company’s unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $538.0 million and $876.9 million at December 31, 2022 and 2021, respectively. Such mortgages are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as misappropriation of funds, impermissible transfer, environmental contamination and material misrepresentation. The outstanding indebtedness of the Company’s unconsolidated joint ventures at December 31, 2022, which matures in the subsequent 14-month period (i.e., through February 2024), is $110.6 million ($22.1 million at the Company’s share). All of this amount is attributable to the DDRM Joint Venture, and the Company expects the joint venture to repay the indebtedness with proceeds from asset sales or to exercise the option to extend the loan's maturity date by one year.
No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Similar to SITE Centers, the Company’s joint ventures experienced a reduction in rent collections, beginning in the second quarter of 2020, as a result of the impact of the COVID-19 pandemic. The collection rates improved throughout 2021, and collection rates in 2022 were generally consistent with pre-pandemic levels. However, any future deterioration in property-level revenues may cause one or more of these joint ventures to be unable to refinance maturing obligations or satisfy applicable covenants, financial tests or debt service requirements or loan maturity extension conditions in the future, thereby allowing the mortgage lender to assume control of property cash flows, limit distributions of cash to joint venture members, declare a default, increase the interest rate or accelerate the loan’s maturity. In addition, rising interest rates may adversely impact the ability of the Company's joint ventures to sell assets at attractive prices in order to repay indebtedness.
Cash Flow Activity
The Company’s cash flow activities are summarized as follows (in thousands):
For the Year Ended December 31,
Cash flow provided by operating activities
$
257,262
$
282,515
Cash flow (used for) provided by investing activities
(167,559
)
74,451
Cash flow used for financing activities
(111,741
)
(388,127
)
Changes in cash flow for the year ended December 31, 2022, compared to the prior year are as follows:
Operating Activities: Cash provided by operating activities decreased $25.3 million primarily due to the following:
•Decrease in cash collected from tenants in 2022 related to prior periods primarily from cash-basis tenants;
•Decrease in fees earned from joint ventures and managed properties and
•Increase in income from acquired properties.
.
Investing Activities: Cash (used for) provided by investing activities increased $242.0 million primarily due to the following:
•Increase in real estate assets acquired, developed and improved of $242.8 million;
•Decrease in distributions from unconsolidated joint ventures net of advance payments of $25.0 million;
•2021 distribution by RVI of $190.0 million on account of the Company's preferred investment in RVI and
•Increase in proceeds from disposition of real estate and disposition of joint venture interests of $211.4 million.
Financing Activities: Cash used for financing activities decreased $276.4 million primarily due to the following:
•Increase in proceeds from the Term Loan of $100.0 million;
•Decrease in Revolving Credit Facility and mortgage debt repayments of $279.1 million;
•Increase in dividends paid of $20.5 million;
•Increase of stock repurchase of $42.3 million and
•Decrease in net proceeds from common share offerings net of preferred stock redemption of $38.1 million.
Dividend Distribution
The Company satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with declared common and preferred share cash dividends of $122.3 million in 2022, as compared to $113.0 million of cash dividends paid in 2021. Because actual distributions were greater than 100% of taxable income, federal income taxes were not incurred by the Company in 2022.
The Company declared cash dividends of $0.52 per common share in 2022. In February 2023, the Company declared its first quarter 2023 dividend of $0.13 per common share payable on April 6, 2023, to shareholders of record at the close of business on March 17, 2023. The Board of Directors of the Company intends to monitor the Company’s dividend policy in order to maintain sufficient liquidity for operations and in order to maximize the Company’s free cash flow while still adhering to REIT payout requirements.
SITE Centers’ Equity
In the first and second quarters of 2022, the Company settled 2.4 million common shares, which were offered and sold on a forward basis under its $250 million continuous equity program, resulting in gross proceeds of $38.3 million or $15.79 per share. At February 15, 2023, the Company had approximately $211.7 million available for the future offering of common shares under this program.
In November 2018, the Company’s Board of Directors announced a common share repurchase program. Under the terms of the program, the Company was authorized to repurchase up to a maximum value of $100 million of its common shares, which authority was fully utilized as of December 20, 2022. In 2022, the Company repurchased 3.2 million of its common shares in open market transactions under this program at an aggregate cost of $42.3 million, or $13.04 per share.
On December 20, 2022, the Company announced that its Board of Directors authorized a new common share repurchase program. Under the terms of the new program, the Company is authorized to repurchase up to a maximum value of $100 million of its common shares. In late December 2022, the Company repurchased 0.5 million of its common shares in open market transactions at an aggregate cost of $6.6 million, or $13.47 per share under this program which settled in January 2023. The Company did not make any additional purchases of its common shares under this program in January 2023.
SOURCES AND USES OF CAPITAL
The Company remains committed to maintaining sufficient liquidity, managing debt duration and maintaining prudent leverage levels in an effort to manage its overall risk profile. Equity offerings, debt financings, asset sales and cash flow from operations continue to represent potential sources of proceeds to be used to achieve these objectives.
2023 Transaction Activity
From January 1, 2023 to February 15, 2023, the Company acquired two convenience shopping centers for an aggregate price of $26.1 million, including Parker Keystone (Parker, Colorado) and Foxtail Center (Timonium, Maryland).
2022 Transaction Activity
Acquisitions
The Company remains committed to taking advantage of its financial position, low debt levels, retained cash flows from operations, proceeds from the sale of joint venture investments and lower growth properties and elevated cash resources to prudently grow its portfolio of assets in wealthy suburban communities.
During 2022, the Company acquired the following assets for an aggregate purchase price of $342.4 million:
•Chandler Center (Chandler, Arizona)
•Shops at Power and Baseline (Mesa, Arizona)
•Artesia Village and Northsight Plaza (both in Scottsdale, Arizona)
•Broadway Center (Tempe, Arizona)
•La Fiesta Square and Lafayette Mercantile (both in Lafayette, California)
•Shops on Montview (Denver, Colorado)
•Shops at Boca Center (Boca Raton, Florida)
•Casselberry Commons (Casselberry, Florida) - acquired its joint venture partner's 80% equity interest
•Shoppes of Crabapple (Alpharetta, Georgia)
•Parkwood Shops (Atlanta, Georgia)
•Shops at Tanglewood (Houston, Texas)
•Boulevard at Marketplace, Fairfax Marketplace and Fairfax Pointe (Fairfax, Virginia)
Much of the Company’s acquisition activity in 2022 focused on unanchored, convenience retail properties located in the Southwest and Southeast that benefit from strong population migration and employment growth trends. These properties typically do not include traditional “big box” anchor tenants and are comprised of smaller, more liquid store units that appeal to a broad range of tenants and have shorter lease durations. The Company believes that these acquisitions offer enhanced prospects for property-level revenue growth through rent increases and limited capital expenditure requirements.
Dispositions of Assets and Joint Venture Investments
During 2022, the Company sold five wholly-owned shopping centers and land parcels at wholly-owned shopping centers in addition to three unconsolidated shopping centers generating proceeds totaling $265.2 million, of which the Company’s share was $223.9 million. In addition, the DDRM Joint Venture sold 13 shopping centers for an aggregate sales price of $387.6 million ($77.5 million at the Company's share) with the related mortgage debt of $225.0 million repaid upon closing.
The Company sold its 20% interest in the SAU Joint Venture to its partner, the State of Utah, based on a gross asset value of $155.7 million (at 100%). In addition, the Company sold its 50% interest in Lennox Town Center to its partner based on a gross asset value of $77.0 million (at 100%). These transactions resulted in a Gain of Sale on Interests of $42.2 million.
Changes in investment strategies for assets may impact the Company’s hold-period assumptions for those properties. The disposition of certain assets could result in a loss or impairment recorded in future periods. The Company evaluates all potential sale opportunities taking into account the long-term growth prospects of the assets, the use of proceeds and the impact to the Company’s balance sheet, in addition to the impact on operating results.
Equity Transactions
In the first and second quarters of 2022, the Company settled 2.4 million common shares which were offered and sold on a forward basis under its $250 million continuous equity program, resulting in gross proceeds of $38.3 million, or $15.79 per share. In the third and fourth quarters of 2022, the Company repurchased 3.7 million of its common shares in open market transactions at an aggregate cost of $48.9 million, or $13.09 per share.
Redevelopment Opportunities
The Company selectively evaluates its portfolio for tactical redevelopment opportunities in order to make the most efficient use of the underlying real estate. The Company will generally commence construction on redevelopment projects only after substantial tenant leasing has occurred. At December 31, 2022, the Company anticipates that it has approximately $23 million to be incurred on its pipeline of identified redevelopment projects.
Redevelopment Projects
As part of its strategy to expand, improve and re-tenant various properties, at December 31, 2022, the Company had approximately $56 million in construction in progress in various active consolidated redevelopment and other projects on a net basis. The Company’s major redevelopment projects are typically substantially complete within two years of the construction commencement date. Redevelopment projects placed into service in 2022 were completed at a cost of approximately $322 per square
foot. At December 31, 2022, the Company’s large-scale shopping center expansion and repurposing projects were as follows (in thousands):
Location
Estimated
Stabilized
Quarter
Estimated
Gross Cost
Cost Incurred at
December 31, 2022
West Bay Plaza - Phase II (Cleveland, Ohio)
4Q23
$
9,102
$
6,651
Perimeter Pointe (Atlanta, Georgia)
TBD
N/A
1,384
Total
$
9,102
$
8,035
At December 31, 2022, the Company’s tactical redevelopment projects, including outparcels, first generation space and small-scale shopping center expansions and other capital improvements, were as follows (in thousands):
Location
Estimated
Stabilized
Quarter
Estimated
Gross Cost
Cost Incurred at
December 31, 2022
Tanasbourne Town Center (Portland, Oregon)
2Q25
$
13,769
$
1,759
Nassau Park Pavilion (Trenton, New Jersey)
4Q23
7,635
3,388
University Hills (Denver, Colorado)
4Q23
5,972
4,477
Shoppers World (Boston, Massachusetts)
4Q23
4,967
4,263
Carolina Pavilion (Charlotte, North Carolina)
4Q23
2,339
2,031
Shoppers World (Boston, Massachusetts)
1Q24
1,884
Total
$
36,566
$
16,300
2021 Transaction Activity
Acquisitions
During 2021, the Company purchased four shopping centers (one each in Delray Beach, Florida and Atlanta, Georgia and two in Charlottesville, Virginia), one income producing parcel adjacent to Nassau Park Pavilion (Princeton, New Jersey) and one land parcel adjacent to Belgate Shopping Center (Charlotte, North Carolina) for an aggregate purchase price of $100.5 million. The Company also acquired its partner’s 33% interest in a consolidated joint venture that owned Paradise Village Gateway (Phoenix, Arizona) for $15.1 million ($45.8 million at 100%), with the $27.6 million mortgage debt repaid at closing.
In December 2021, the Company acquired the equity interest in six assets owned by the DDRM Joint Venture (Village Square at Golf, Boynton Beach, Florida; Shoppes at Paradise Point, Fort Walton Beach, Florida; Midway Plaza, Tamarac, Florida; North Point Plaza, Tampa, Florida; The Shoppes at New Tampa, Wesley Chapel, Florida and Paradise Shoppes of Ellenwood, Ellenwood, Georgia) for $107.2 million ($134.0 million at 100%), with $73.9 million of mortgage debt related to the properties repaid at closing. The transaction resulted in a Gain on Change in Control of Interests of $7.2 million.
Proceeds from Transactional Activity
One of the Company’s unconsolidated joint ventures sold its sole asset, which was a parcel of undeveloped land (approximating 70 acres) in Richmond Hill, Ontario. The Company’s share of net proceeds totaled $22.1 million, after accounting for customary closing costs and foreign currency translation but before income tax. The net proceeds included $6.1 million held in escrow, of which $2.1 million was released to the Company in 2022 after the receipt of certain tax clearance certificates from the Canadian taxing authorities, and the remaining $4.0 million is considered contingent and should be released upon finalization of the tax returns and dissolution of the partnership. The Company recorded an aggregate gain on the transaction of $14.9 million, which included its $2.8 million share of the gain reported by the joint venture, as well as $12.1 million related to the Company’s promoted interest on the disposition of the investment net of the write-off of the accumulated foreign currency translation and contingent estimated income taxes. Subsequent to the transaction, the Company has no other investments outside the United States.
The Company sold six unconsolidated shopping centers, aggregating 1.0 million square feet, several wholly-owned land parcels, and the Hobby Lobby parcel of a shopping center. These sales collectively generated proceeds totaling $166.6 million, of which the Company’s proportionate share of the proceeds was $96.5 million. The Company’s pro rata share of proceeds is before giving effect to the repayment of indebtedness and transaction costs.
The Company received a cash distribution of $190.0 million on account of its preferred equity investment in RVI, which represented the full amount to be paid by RVI on account of the Company’s preferred investment.
Equity Transactions
The Company issued and sold 17.25 million common shares resulting in net proceeds of $225.3 million.
Redevelopment Projects
The Company invested approximately $57 million in various consolidated active redevelopment and other projects during 2021.
CAPITALIZATION
At December 31, 2022, the Company’s capitalization consisted of $1.7 billion of debt, $175.0 million of preferred shares and $2.9 billion of market equity (calculated as the sum of common shares and OP Units outstanding multiplied by $13.66, the closing price of the Company’s common shares on the New York Stock Exchange at December 30, 2022, the last trading day of 2022). At December 31, 2022, after giving effect to the swap of the variable-rate component of the Term Loan’s interest rate to a fixed rate, the Company’s total debt consisted of all fixed-rate debt.
Management’s strategy is to maintain access to the capital resources necessary to manage the Company’s balance sheet and to repay upcoming maturities. Accordingly, the Company may seek to obtain funds through additional debt or equity financings and/or joint venture capital in a manner consistent with its intention to operate with a prudent debt capitalization policy and to reduce the Company’s cost of capital by maintaining an investment grade rating with Moody’s, S&P and Fitch. A security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. The Company may not be able to obtain financing on favorable terms, or at all, which may negatively affect future ratings.
The Revolving Credit Facility, Term Loan and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, debt service coverage and fixed-charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets, engage in certain mergers and acquisitions and make distribution to its shareholders. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. In addition, the Revolving Credit Facility, Term Loan and the Company’s indentures permit the acceleration of maturity in the event certain other debt of the Company is in default or has been accelerated. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition and results of operations.
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
The Company has $87.2 million of aggregate principal amount of senior notes maturing in 2023. The Company expects to fund future maturities from utilization of its Revolving Credit Facility, proceeds from asset sales and other investments, cash flow from operations and/or additional debt or equity financings. No assurance can be provided that these obligations will be repaid as currently anticipated or refinanced.
Other Guarantees
In conjunction with the redevelopment of various shopping centers, the Company had entered into commitments with general contractors aggregating approximately $24.4 million for its consolidated properties and $4.2 million for its unconsolidated properties as of December 31, 2022. These obligations, composed principally of construction contracts, are generally due within 12 to 24 months, as the related construction costs are incurred, and are expected to be financed through operating cash flow, asset sales or borrowings under the Revolving Credit Facility. These contracts typically can be changed or terminated without penalty.
The Company routinely enters into contracts for the maintenance of its properties. These contracts typically can be canceled upon 30 to 60 days’ notice without penalty. At December 31, 2022, the Company had purchase order obligations, typically payable within one year, aggregating approximately $4.9 million related to the maintenance of its properties and general and administrative expenses.
At December 31, 2022, the Company had letters of credit outstanding of $12.9 million. The Company has not recorded any obligations associated with these letters of credit, the majority of which serve as collateral to secure the Company's obligation to third-party insurers with respect to limited reinsurance provided by the Company's captive insurance company.
The Company has entered into employment contracts with its four executive officers. These contracts generally provide for base salary, bonuses based on factors including the financial performance of the Company and personal performance, participation in the Company’s equity plans and retirement plans, health and welfare benefits and reimbursement of various qualified business
expenses. These employment agreements also provide for certain perquisites (e.g., health insurance coverage, car service, reimbursement of life and disability insurance premiums, etc.) and severance payments and benefits for various departure scenarios. The employment agreement for the Company’s President and Chief Executive Officer extends through September 2024. The employment agreements for the Company’s Chief Financial Officer, Chief Investment Officer and Chief Accounting Officer extend through February 2024, May 2024 and September 2024, respectively. All of the agreements are subject to termination by either the Company or the executive without cause upon at least 90 days’ notice subject to the payment of severance and other amounts to the executive under certain circumstances.
ECONOMIC CONDITIONS
Despite growing economic uncertainty, the Company continues to witness retailer demand for quality real estate locations within well-positioned shopping centers. During 2022, the Company executed new leases and renewals aggregating approximately 4.3 million square feet of space on a pro rata basis, which represented the Company’s highest annual leasing volume in the past five years despite a decrease in the GLA of the Company’s portfolio over that period of time. The Company believes these strong leasing results and tenant demand are attributable to the concentration of the Company’s portfolio in suburban, high household income communities, pandemic-induced work-from-home trends and tenants’ increasing use of physical store locations to improve the speed and efficiency of merchandise distribution.
The Company benefits from a diversified tenant base, with only one tenant whose annualized rental revenue equals or exceeds 3% of the Company’s annualized consolidated revenues plus the Company’s proportionate share of unconsolidated joint venture revenues (TJX Companies at 5.9%). Other significant national tenants generally have relatively strong financial positions, have outperformed other retail categories over time and the Company believes remain well-capitalized. Historically, these national tenants have provided a stable revenue base, and the Company believes they will continue to provide a stable revenue base going forward, given the long-term nature of these leases. The majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus on value and convenience, versus discretionary items, which the Company believes will enable many of its tenants to outperform under a variety of economic conditions. The Company recognizes the risks posed by current economic conditions but believes the position of its portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through a potentially challenging economic environment. The Company has relatively little reliance on overage or percentage rents generated by tenant sales performance.
The Company believes that its shopping center portfolio is well positioned, as evidenced by its recent leasing activity, historical property income growth and consistent growth in average annualized base rent per occupied square foot. Historical occupancy has generally ranged from 89% to 96% since the Company’s initial public offering in 1993. At December 31, 2022 and 2021, the shopping center portfolio occupancy, on a pro rata basis, was 92.4% and 90.0%, respectively, and the total portfolio average annualized base rent per occupied square foot, on a pro rata basis, was $19.52 and $18.33, respectively. The Company’s portfolio was impacted by tenant bankruptcies and closures in 2020, primarily due to the impact of the COVID-19 pandemic, and the Company expects to expend significant amounts of capital in coming periods in connection with recently executed leases to backfill these closures. Although the per square foot cost of leasing capital expenditures has been predominantly consistent with the Company’s historical trends, the high volume of the Company’s recent leasing activity will cause aggregate leasing capital expenditure levels to remain elevated. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred over the expected lease term for new leases executed during the years ended December 31, 2022 and 2021, on a pro rata basis, was $7.42 and $8.34 per rentable square foot, respectively. The Company generally does not expend a significant amount of capital on lease renewals.
Beginning in March 2020, the retail sector was significantly impacted by the COVID-19 pandemic. Though the impact of the COVID-19 pandemic on tenant operations varied by tenant category, local conditions and applicable government mandates, a significant number of the Company’s tenants experienced a reduction in sales and foot traffic, and many tenants were forced to limit their operations or close their businesses for a period of time. The Company worked with tenants to maximize the collection of unpaid 2020 rents by offering rent deferment on a case-by-case basis often in exchange for concessions in the form of tenant extensions of lease terms, the relaxation of leasing restrictions and co-tenancy provisions and, in some cases, alterations of control areas allowing for future redevelopment of the shopping center. The Company’s collection rates showed significant improvements in 2021 and collection rates in 2022 were generally consistent with pre-pandemic levels. As of December 31, 2022, the COVID-19 related rent deferral arrangements for tenants that are not accounted for on the cash basis have been repaid. Any new surges in contagion or new COVID-19 variants could adversely impact the Company’s ability to lease space and collect rents. Certain tenant categories remain especially vulnerable to the impact of the COVID-19 pandemic, including movie theaters, fitness centers and restaurants that rely on in-person dining, activities and entertainment. For additional risks relating to the COVID-19 pandemic, see Item 1A. Risk Factors.
Although disruptions in rent collections stemming from the COVID-19 pandemic have subsided, inflation, rising interest rates, reduced consumer spending, labor shortages, supply chain disruptions and global capital markets volatility pose increasing risks to the Company’s tenants and the U.S. economy. In addition to these macroeconomic challenges, the retail sector has been affected by
changing consumer behaviors following the COVID-19 pandemic, increases in consumer internet purchases, the competitive nature of the retail business and the competition for market share. The Company routinely monitors the credit profiles of its tenants and analyzes their possible impact of any potential tenant credit issues on the financial statements of the Company and its unconsolidated joint ventures. In some cases, changing conditions have resulted in weaker retailers and retail categories losing market share and declaring bankruptcy and/or closing stores. However, other retailers, specifically those in the value and convenience category, continue to express interest in launching new concepts and expanding their store fleets within the suburban, high household income communities in which the Company’s properties are located. As a result, the Company believes that its prospects to backfill any spaces vacated by bankrupt or non-renewing tenants are generally good, though such re-tenanting efforts would likely require additional capital expenditures and the opportunities to lease any vacant theater spaces may be more limited. However, there can be no assurance that vacancy resulting from increasingly uncertain economic conditions will not adversely affect the Company's operating results (see Item 1A. Risk Factors).
FORWARD-LOOKING STATEMENTS
MD&A should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the Company’s consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “will,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company’s actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements (see Item 1A. Risk Factors).
Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
•The Company is subject to general risks affecting the real estate industry, including the need to enter into new leases or renew leases on favorable terms to generate rental revenues, and any economic downturn may adversely affect the ability of the Company’s tenants, or new tenants, to enter into new leases or the ability of the Company’s existing tenants to renew their leases at rates at least as favorable as their current rates;
•The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;
•The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including sales over the internet and the resulting retailing practices and space needs of its tenants, or a general downturn in its tenants’ businesses, which may cause tenants to close stores or default in payment of rent;
•The Company is subject to competition for tenants from other owners of retail properties, and its tenants are subject to competition from other retailers and methods of distribution. The Company is dependent upon the successful operations and financial condition of its tenants, in particular its major tenants, and could be adversely affected by the bankruptcy of those tenants;
•The Company leases a substantial portion of its square footage to large tenants, which makes it vulnerable to changes in the business and financial condition of, or demand for its space by, such tenants;
•The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize improvements in occupancy and operating results. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;
•The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all and other factors;
•The Company may fail to dispose of properties on favorable terms, especially in regions experiencing deteriorating economic conditions. In addition, real estate investments can be illiquid, particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing due to local or global conditions, and could limit the Company’s ability to promptly make changes to its portfolio to respond to economic and other conditions;
•The Company may abandon a development or redevelopment opportunity after expending resources if it determines that the opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the economic environment on prospective tenants’ ability to enter into new leases, or pay contractual rent, or the inability of the Company to obtain all necessary zoning and other required governmental permits and authorizations;
•The Company may not complete development or redevelopment projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn, resulting in limited availability of capital, increased debt service expense and construction costs and decreases in revenue;
•The Company’s financial condition may be affected by required debt service payments, the risk of default, restrictions on its ability to incur additional debt or to enter into certain transactions under its Revolving Credit Facility and Term Loan and other documents governing its debt obligations and the risk of downgrades from debt rating services. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s Revolving Credit Facility are subject to certain representations and warranties and no default or event of default existing thereunder;
•Changes in interest rates could adversely affect the market price of the Company’s common shares, its ability to sell properties and prices realized and its performance and cash flow;
•Debt and/or equity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms;
•Disruptions in the financial markets could affect the Company’s ability to obtain financing on reasonable terms and have other adverse effects on the Company and the market price of the Company’s common shares;
•Inflationary pressures could result in reductions in retailer profitability, consumer discretionary spending and tenant demand to lease space. Inflation could also increase the costs incurred by the Company to operate its properties and finance its operations and could adversely impact the valuation of its properties, all of which could have an adverse effect on the market price of the Company’s common shares;
•The Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to qualify as a REIT;
•The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company must borrow funds to make distributions, those borrowings may not be available on favorable terms or at all;
•Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have interests or goals different from those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture or may seek to terminate the joint venture, resulting in a loss to the Company of property revenues and management fees. The partner could cause a default under the joint venture loan for reasons outside the Company’s control. Furthermore, the Company could be required to reduce the carrying value of its equity investments if a loss in the carrying value of the investment is realized;
•The Company’s decision to dispose of real estate assets, including undeveloped land and construction in progress, would change the holding period assumption in the undiscounted cash flow impairment analyses, which could result in material impairment losses and adversely affect the Company’s financial results;
•The outcome of pending or future litigation, including litigation with tenants or joint venture partners, may adversely affect the Company’s results of operations and financial condition;
•Property damage, expenses related thereto and other business and economic consequences (including the potential loss of revenue) resulting from extreme weather conditions or natural disasters in locations where the Company owns properties may adversely affect the Company’s results of operations and financial condition;
•Sufficiency and timing of any insurance recovery payments related to damages and lost revenues from extreme weather conditions or natural disasters may adversely affect the Company’s results of operations and financial condition;
•The Company and its tenants could be negatively affected by the impacts of pandemics (including the COVID-19 pandemic) and other public health crises;
•The Company is subject to potential environmental liabilities;
•The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties;
•The Company could be subject to potential liabilities, increased costs, reputation harm and other adverse effects on the Company’s business due to stakeholders’, including regulators’, views regarding the Company’s environmental, social and governance goals and initiatives, and the impact of factors outside of our control on such goals and initiatives;
•The Company could incur additional expenses to comply with or respond to claims under the Americans with Disabilities Act or otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations;
•Changes in accounting standards or other standards may adversely affect the Company’s business;
•The Company’s Board of Directors, which regularly reviews the Company’s business strategy and objectives, may change the Company’s strategic plan based on a variety of factors and conditions, including in response to changing market conditions and
•The Company and its vendors could sustain a disruption, failure or breach of their respective networks and systems, including as a result of cyber-attacks, which could disrupt the Company’s business operations, compromise the confidentiality of sensitive information and result in fines or penalties.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s primary market risk exposure is interest rate risk. At December 31, 2022, the Company’s debt, excluding unconsolidated joint venture debt and adjusted to reflect the swap of the variable-rate (SOFR) component of the Company's $200.0 million Term Loan to a fixed rate of 2.75%, is summarized as follows:
December 31, 2022
December 31, 2021
Amount
(Millions)
Weighted-
Average
Maturity
(Years)
Weighted-
Average
Interest
Rate
Percentage
of Total
Amount
(Millions)
Weighted-
Average
Maturity
(Years)
Weighted-
Average
Interest
Rate
Percentage
of Total
Fixed-Rate Debt
$
1,707.0
3.1
4.1
%
100.0
%
$
1,577.6
3.8
4.1
%
94.1
%
Variable-Rate Debt
$
-
-
-
0.0
%
$
99.8
1.1
1.1
%
5.9
%
The Company’s unconsolidated joint ventures’ indebtedness at its carrying value is summarized as follows:
December 31, 2022
December 31, 2021
Joint
Venture
Debt
(Millions)
Company's
Proportionate
Share
(Millions)
Weighted-
Average
Maturity
(Years)
Weighted-
Average
Interest
Rate
Joint
Venture
Debt
(Millions)
Company's
Proportionate
Share
(Millions)
Weighted-
Average
Maturity
(Years)
Weighted-
Average
Interest
Rate
Fixed-Rate Debt
$
363.5
$
72.7
1.3
4.8
%
$
673.9
$
146.2
2.4
4.2
%
Variable-Rate Debt
$
171.6
$
37.9
1.1
5.4
%
$
199.4
$
43.5
1.4
2.2
%
The Company intends to use retained cash flow, proceeds from asset sales, equity and debt financing and variable-rate indebtedness available under its Revolving Credit Facility to repay indebtedness and fund capital expenditures at the Company’s shopping centers. Thus, to the extent the Company incurs additional variable-rate indebtedness or needs to refinance existing fixed-rate indebtedness in a rising interest rate environment, its exposure to increases in interest rates in an inflationary period could increase. The Company does not believe, however, that increases in interest expense will significantly impact the Company’s distributable cash flow given the Company’s outstanding debt maturity profile.
The interest rate risk on a portion of the Company’s variable-rate debt has been mitigated through the use of an interest rate swap agreement with major financial institutions. At December 31, 2022, the variable (SOFR) interest rate component on $200.0 million of the Company’s consolidated debt was swapped to a fixed rate. The Company is exposed to credit risk in the event of nonperformance by the counterparties to the swaps. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions.
The carrying value of the Company’s fixed-rate debt is adjusted to include the $200.0 million of variable-rate debt that was swapped to a fixed rate at December 31, 2022. An estimate of the effect of a 100 basis-point increase at December 31, 2022 and 2021, is summarized as follows (in millions):
December 31, 2022
December 31, 2021
Carrying
Value
Fair
Value
100 Basis-Point
Increase in
Market Interest
Rate
Carrying
Value
Fair
Value
100 Basis-Point
Increase in
Market Interest
Rate
Company's fixed-rate debt
$
1,707.0
$
1,622.2
(A)
$
1,577.7
(B)
$
1,577.6
$
1,687.5
$
1,630.3
Company's proportionate share of
joint venture fixed-rate debt
$
72.7
$
70.5
$
69.6
$
146.2
$
149.7
$
146.8
(A) Includes the fair value of the swap, which was an asset of $8.2 million at December 31, 2022.
(B) Includes the fair value of the swap, which was an asset of $15.6 million at December 31, 2022.
The sensitivity to changes in interest rates of the Company’s fixed-rate debt was determined using a valuation model based upon factors that measure the net present value of such obligations that arise from the hypothetical estimate as discussed above. A 100 basis-point increase in short-term market interest rates on variable-rate debt at December 31, 2022, would not result in any change in interest expense for the Company or its joint ventures. At December 31, 2022, the Company did not have any outstanding consolidated variable-rate debt and all of the variable-rate debt outstanding at the unconsolidated joint ventures is subject to hedging agreements. The estimated increase in interest expense for the year does not give effect to possible changes in the daily balance of the Company’s or joint ventures’ outstanding variable-rate debt.
The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes it has the ability to obtain funds through additional equity and/or debt offerings and joint venture capital. Accordingly, the cost of obtaining such protection agreements versus the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of December 31, 2022, the Company had no other material exposure to market risk.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is included in a separate section at the end of this Annual Report on Form 10-K beginning on page and is incorporated herein by reference thereto.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation, pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b), of the effectiveness of our disclosure controls and procedures. Based on their evaluation as required, the CEO and CFO have concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of December 31, 2022, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and were effective as of December 31, 2022, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) or 15d-15(f). 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. Management assessed the effectiveness of its internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on those criteria, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm as stated in their report which appears herein and is incorporated in this Item 9A. by reference thereto.
Changes in Internal Control over Financial Reporting
During the three months ended December 31, 2022, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. OTHER INFORMATION
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The Company’s Board of Directors has adopted the following corporate governance documents:
•Corporate Governance Guidelines that guide the Board of Directors in the performance of its responsibilities to serve the best interests of the Company and its shareholders;
•Written charters of the Audit Committee, Compensation Committee and Nominating and ESG Committee;
•Code of Ethics for Senior Financial Officers that applies to the Company’s senior financial officers, including the president, chief executive officer, chief financial officer, chief accounting officer, controllers, treasurer and chief internal auditor among others designated by the Company, if any (amendments to, or waivers from, the Code of Ethics for Senior Financial Officers will be disclosed on the Company’s website) and
•Code of Business Conduct and Ethics that governs the actions and working relationships of the Company’s employees, officers and directors with current and potential customers, consumers, fellow employees, competitors, government and self-regulatory agencies, investors, the public, the media and anyone else with whom the Company has or may have contact.
Copies of the Company’s corporate governance documents are available on the Company’s website, www.sitecenters.com, under “Investor Relations-Corporate Governance.”
Certain other information required by this Item 10 is incorporated herein by reference to the information under the headings “Proposal One: Election of Eight Directors-Director Nominees for Election at the Annual Meeting” and “Board Governance” contained in the Company’s Proxy Statement for the Company’s 2023 annual meeting of shareholders to be filed with the SEC pursuant to Regulation 14A (“2023 Proxy Statement”), and the information under the heading “Information About the Company’s Executive Officers” in Part I of this Annual Report on Form 10-K.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
Information required by this Item 11 is incorporated herein by reference to the information under the headings “Board Governance-Compensation of Directors,” “Executive Compensation Tables and Related Disclosure,” “Compensation Discussion and Analysis” and “Proposal Two: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers-Compensation Committee Report” and “-Compensation Committee Interlocks and Insider Participation” contained in the 2023 Proxy Statement.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Certain information required by this Item 12 is incorporated herein by reference to the “Board Governance-Security Ownership of Directors and Management” and “Corporate Governance and Other Matters-Security Ownership of Certain Beneficial Owners” sections of the 2023 Proxy Statement. The following table sets forth the number of securities issued and outstanding under the Company’s existing stock compensation plans, as of December 31, 2022, as well as the weighted-average exercise price of outstanding options.
EQUITY COMPENSATION PLAN INFORMATION
(a)
(b)
(c)
Plan category
Number of Securities
to Be Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(excluding securities
reflected in column (a))
Equity compensation plans approved by security
holders(1)
2,350,364
(2)
$
27.31
(3)
2,809,128
(4)
Equity compensation plans not approved by security
holders
-
-
-
Total
2,350,364
$
27.31
2,809,128
(1)Includes the Company’s 2012 Equity and Incentive Compensation Plan and 2019 Equity and Incentive Compensation Plan.
(2)Includes 226,014 stock options outstanding, 752,779 restricted stock units that are expected to be settled in shares upon vesting and 1,371,571 performance awards assuming maximum payout (as a result, this aggregate reported number may overstate actual dilution).
(3)Restricted stock units and performance awards are not taken into account in the weighted-average exercise price as such awards have no exercise price.
(4)All of these shares may be issued with respect to award vehicles other than just stock options or share appreciation rights or other rights to acquire shares.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required by this Item 13 is incorporated herein by reference to the “Proposal One: Election of Eight Directors-Transactions with the Otto Family” and “Proposal One: Election of Eight Directors-Independent Directors” and “Corporate Governance and Other Matters-Policy Regarding Related-Party Transactions” sections of the Company’s 2023 Proxy Statement.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Incorporated herein by reference to the “Proposal Four: Ratification of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm-Fees Paid to PricewaterhouseCoopers LLP” section of the Company’s 2023 Proxy Statement.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a)1. Financial Statements
The following documents are filed as part of this report:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The following financial statement schedules are filed herewith as part of this Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements of the registrant:
Schedule
II - Valuation and Qualifying Accounts and Reserves
III - Real Estate and Accumulated Depreciation
IV - Mortgage Loans on Real Estate
Schedules not listed above have been omitted because they are not applicable or because the information required to be set forth therein is included in the Company’s consolidated financial statements or notes thereto.
Financial statements of the Company’s unconsolidated joint venture companies have been omitted because they do not meet the significant subsidiary definition of Rule 1-02(w) of Regulation S-X.
Exhibits - The following exhibits are filed as part of, or incorporated by reference into, this report:
Form
10-K
Exhibit
No.
Description
Filed or Furnished
Herewith or Incorporated
Herein by Reference
2.1
Separation and Distribution Agreement, dated July 1, 2018, by and between DDR Corp. and Retail Value Inc.
Current Report on Form 8-K (Filed with the SEC on July 3, 2018; File No. 001-11690)
3.1
Fourth Amended and Restated Articles of Incorporation
Quarterly Report on Form 10-Q (Filed with the SEC on November 2, 2018; File No. 001-11690)
3.2
Amended and Restated Code of Regulations
Quarterly Report on Form 10-Q (Filed with the SEC on November 2, 2018; File No. 001-11690)
4.1
Specimen Certificate for Common Shares
Annual Report on Form 10-K (Filed with the SEC on February 28, 2012; File No. 001-11690)
4.2
Specimen Certificate for 6.375% Class A Cumulative Redeemable Preferred Shares
Registration Statement on Form 8-A (Filed with the SEC on June 2, 2017; File No. 001-11690)
4.3
Deposit Agreement, dated as of June 5, 2017, among the Company, Computershare Inc. and its wholly owned subsidiary, Computershare Trust Company, N.A., jointly as Depositary, and all holders from time to time of depositary shares
Current Report on Form 8-K (Filed with the SEC on June 5, 2017; File No. 001-11690)
4.4
Indenture, dated as of May 1, 1994, by and between the Company and The Bank of New York (as successor to JP Morgan Chase Bank, N.A., successor to Chemical Bank), as Trustee
Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
4.5
Indenture, dated as of May 1, 1994, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank)), as Trustee
Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
4.6
First Supplemental Indenture, dated as of May 10, 1995, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
4.7
Second Supplemental Indenture, dated as of July 18, 2003, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
4.8
Third Supplemental Indenture, dated as of January 23, 2004, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-4 Registration No. 333-117034 (Filed with the SEC on June 30, 2004)
4.9
Fourth Supplemental Indenture, dated as of April 22, 2004, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-4 Registration No. 333-117034 (Filed with the SEC on June 30, 2004)
4.10
Fifth Supplemental Indenture, dated as of April 28, 2005, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Annual Report on Form 10-K (Filed with the SEC on February 21, 2007; File No. 001-11690)
4.11
Sixth Supplemental Indenture, dated as of October 7, 2005, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Annual Report on Form 10-K (Filed with the SEC on February 21, 2007; File No. 001-11690)
4.12
Seventh Supplemental Indenture, dated as of August 28, 2006, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Current Report on Form 8-K (Filed with the SEC on September 1, 2006; File No. 001-11690)
4.13
Eighth Supplemental Indenture, dated as of March 13, 2007, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Current Report on Form 8-K (Filed with the SEC on March 16, 2007; File No. 001-11690)
4.14
Ninth Supplemental Indenture, dated as of September 30, 2009, by and between the Company and U.S. Bank National, Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-3 Registration No. 333-162451 (Filed on October 13, 2009)
4.15
Tenth Supplemental Indenture, dated as of March 19, 2010, by and between the Company and U.S. Bank National, Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Quarterly Report on Form 10-Q (Filed with the SEC on May 7, 2010; File No. 001-11690)
4.16
Eleventh Supplemental Indenture, dated as of August 12, 2010, by and between the Company and U.S. Bank National, Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Quarterly Report on Form 10-Q (Filed with the SEC on November 8, 2010; File No. 001-11690)
4.17
Twelfth Supplemental Indenture, dated as of November 5, 2010, by and between the Company and U.S. Bank National, Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Annual Report on Form 10-K (Filed with the SEC on February 28, 2011; File No. 001-11690)
4.18
Thirteenth Supplemental Indenture, dated as of March 7, 2011, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Quarterly Report on Form 10-Q (Filed with the SEC on May 9, 2011; File No. 001-11690)
4.19
Fourteenth Supplemental Indenture, dated as of June 22, 2012, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Form S-3 Registration No. 333-184221 (Filed with the SEC on October 1, 2012)
4.20
Fifteenth Supplemental Indenture, dated as of November 27, 2012, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Annual Report on Form 10-K (Filed with the SEC on March 1, 2013; File No. 001-11690)
4.21
Sixteenth Supplemental Indenture, dated as of May 23, 2013, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Quarterly Report on Form 10-Q (Filed with the SEC on August 8, 2013; File No. 001-11690)
4.22
Seventeenth Supplemental Indenture, dated as of November 26, 2013, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (successor to National City Bank)), as Trustee
Annual Report on Form 10-K (Filed with the SEC on February 28, 2014; File No. 001-11690)
4.23
Eighteenth Supplemental Indenture, dated as of January 22, 2015, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))
Current Report on Form 8-K (Filed with the SEC on January 22, 2015; File No. 001-11690)
4.24
Nineteenth Supplemental Indenture, dated as of October 21, 2015, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))
Current Report on Form 8-K (Filed with the SEC on October 21, 2015; File No. 001-11690)
4.25
Twentieth Supplemental Indenture, dated as of May 26, 2017, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))
Current Report on Form 8-K (Filed with the SEC on May 26, 2017; File No. 001-11690)
4.26
Twenty-first Supplemental Indenture, dated as of August 16, 2017, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))
Current Report on Form 8-K (Filed with the SEC on August 16, 2017; File No. 001-11690)
4.27
Twenty-second Supplemental Indenture, dated as of February 16, 2018, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))
Quarterly Report on Form 10-Q (Filed with the SEC on May 4, 2018; File No. 001-11690)
4.28
Fourth Amended and Restated Credit Agreement, dated as of June 6, 2022, among SITE Centers Corp., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
Current Report on Form 8-K (Filed with the SEC on June 6, 2022; File No. 001- 11690)
4.29
Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934
Annual Report on Form 10-K (Filed with the SEC on February 24, 2022; File No. 001-11690)
10.1
2005 Directors’ Deferred Compensation Plan (May 9, 2019 Restatement)*
Quarterly Report on 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.2
Elective Deferred Compensation Plan (May 9, 2019 Restatement)*
Quarterly Report on Form 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.3
Adoption Agreement Elective Deferred Compensation Plan (May 9, 2019 Restatement)*
Quarterly Report on Form 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.4
2005 Equity Deferred Compensation Plan (May 9, 2019 Restatement)*
Quarterly Report on Form 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.5
2012 Equity and Incentive Compensation Plan*
Form S-8 Registration No. 333-181422 (Filed with the SEC on May 15, 2012)
10.6
2019 Equity and Incentive Compensation Plan*
Form S-8 Registration No. 333-231319 (Filed with the SEC on May 9, 2019)
10.7
Form of 2019 Plan Restricted Share Units Award Memorandum (governing grants made through February 2021)*
Quarterly Report on 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.8
Form of 2019 Plan Restricted Share Units Award Memorandum (governing certain grants made in 2020, 2021, 2022 and 2023)*
Quarterly Report on Form 10-Q (Filed with the SEC October 30, 2020; File No. 001-11690)
10.9
Form of 2019 Plan Performance-Based Restricted Share Units Award Memorandum (governing grants made in 2020)*
Quarterly Report on Form 10-Q (Filed with the SEC on August 5, 2019; File No. 001-11690)
10.10
Form of 2019 Plan Performance-Based Restricted Share Units Award Memorandum (governing grants made in 2021 and 2022)*
Quarterly Report on Form 10-Q (Filed with the SEC on April 29, 2021, File No. 001-11690)
10.11
Form of Non-Qualified Stock Option Agreement*
Quarterly Report on Form 10-Q (Filed with the SEC May 10, 2013; File No. 001-11690)
10.12
Form of Incentive Stock Option Agreement*
Quarterly Report on Form 10-Q (Filed with the SEC May 10, 2013; File No. 001-11690)
10.13
Form of Stock Option Award Memorandum*
Quarterly Report on Form 10-Q (Filed with the SEC May 4, 2016; File No. 001-11690)
10.14
Employment Agreement, dated as of September 11, 2020, by and between DDR Corp. and David R. Lukes*
Current Report on Form 8-K (Filed with the SEC on September 15, 2020; File No. 001-11690)
10.15
Amended and Restated Employment Agreement, dated as of February 17, 2021, by and between SITE Centers Corp. and Conor Fennerty*
Current Report on Form 8-K (Filed with the SEC on February 19, 2021, File No. 001-11690)
10.16
Employment Agreement, dated as of September 11, 2021, by and between SITE Centers Corp. and Christa A. Vesy*
Current Report on form 8-K (Filed with the SEC on September 13, 2021, File No. 001-11690)
10.17
Employment Agreement, dated as of May 11, 2021, by and between SITE Centers Corp. and John Cattonar*
Quarterly Report on Form 10-Q (Filed with the SEC on July 29, 2021, File No. 001-11690)
10.18
Form of Indemnification Agreement*
Current Report on Form 8-K (Filed with the SEC on November 13, 2017; File No. 001-11690)
10.19
Investors’ Rights Agreement, dated as of May 11, 2009, by and between the Company and Alexander Otto
Current Report on Form 8-K (Filed with the SEC on May 11, 2009; File No. 001-11690)
10.20
Waiver Agreement, dated as of May 11, 2009, by and between the Company and Alexander Otto
Current Report on Form 8-K (Filed with the SEC on May 11, 2009; File No. 001-11690)
21.1
List of Subsidiaries
Submitted electronically herewith
23.1
Consent of PricewaterhouseCoopers LLP
Submitted electronically herewith
31.1
Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
Submitted electronically herewith
31.2
Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
Submitted electronically herewith
32.1
Certification of chief executive officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
Submitted electronically herewith
32.2
Certification of chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
Submitted electronically herewith
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Submitted electronically herewith
101.SCH
Inline XBRL Taxonomy Extension Schema Document
Submitted electronically herewith
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Submitted electronically herewith
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
Submitted electronically herewith
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
Submitted electronically herewith
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Submitted electronically herewith
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 has been formatted in Inline XBRL.
Submitted electronically herewith
* Management contracts and compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.