Good day, and thank you for being here. Welcome to the CTO Realty Growth Fourth Quarter and Year-end 2021 Earnings Call. I would now like to turn the conference over to Matt Partridge, Chief Financial Officer.

Good morning, everyone, and thank you for joining us today for the CTO Realty Growth Fourth Quarter and Year-end 2021 Operating Results Conference Call. With me is our CEO and President, John Albright. Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC reports, earnings release, and supplemental information on our website at ctoreit.com. With that, I will now turn the call over to John.

Thanks, Matt. In our first full year as a REIT, we made significant advancements in refining our portfolio and implementing our retail-focused investment strategy. We concluded the year with multiple acquisitions in grocery-anchored, traditional retail, and mixed-use properties located in desirable markets, strong leasing activity, opportunistic single-tenant sales, and the sale of the last assets in our Land joint venture. The final monetization of the land marks our complete exit from the landowning business, which lasted over 110 years. As we reflect on our recent activities in 2021 and their future implications, I am very pleased with the progress we've made to enhance our high-quality portfolio and position CTO for substantial AFFO growth through a mix of organic and external opportunities. In the fourth quarter, we achieved a record acquisition quarter, acquiring nearly $140 million in property as we redeployed proceeds from our third and fourth quarter sales and a new term loan completed in November. For the entire year, we acquired close to $250 million in assets with an initial yield of 7.2%. The eight acquisitions are situated in strong submarkets of popular cities across the United States, including Raleigh, Dallas, Atlanta, Santa Fe, Las Vegas, Salt Lake City, and Orlando. Some of these acquisitions will drive future growth through repositioning opportunities, while others will provide stable cash flows to support our attractive 7% dividend yield. We anticipate that leasing demand, property cash flows, and the residual value of the real estate will continue to benefit from robust population growth and business-friendly environments in these markets. On the disposition side, we sold 15 properties in 2021, 14 of which were single-tenant assets, totaling $162 million in sales. The weighted average exit cap rate was 6%, resulting in a combined gain of over $28 million and a net investment spread of more than 120 basis points between our acquisition and disposition cap rates. From an operational standpoint, we concluded the quarter with nearly 89% economic occupancy and over 92% leased occupancy, showcasing the progress we've made in executing our repositioning plan at Ashford Lane and the incremental improvements across various properties. During the fourth quarter, we signed new leases at an average rent of over $41 per square foot, primarily at Ashford Lane in Atlanta, where we are currently constructing the lawn, expected to be completed in late spring or early summer. During the quarter, our lease renewals and extensions demonstrated over 15% growth in comparable new per square foot lease rates, highlighting our ability to secure higher rents when expiring leases have no remaining options. The positive impact of our leasing gains on our same-store NOI is anticipated to be significant for 2022 and 2023, and we look forward to sharing these retail metrics starting in the first quarter. At Ashford Lane specifically, we plan for Superica, the hall, Brown Bag Seafood, an indiscernible juice bar, Jeni's ice cream, another indiscernible, Grana, and Sweetgreen to all open in 2022, transforming the property into a dining destination and increasing foot traffic for other retail tenants. As we look towards the upcoming year, we will continue our focus on high-quality, well-located retail and mixed-use acquisition opportunities. This acquisition activity will guide our disposition efforts as we aim to sell our remaining office properties and fully transition our portfolio to retail and mixed-use. With that, I'll hand the call back to Matt.

Thanks, John. As John noted, 2021 was an excellent year of progress for CTO as we made significant financial and operational strides and executed on the transformation of our portfolio. We ended the year with 22 properties comprised of approximately 2.7 million square feet of rentable space located in 10 of 16 markets. Our top market is now Atlanta, where we acquired a newly constructed Sprouts-anchored center just down the road from Simon's Mall of Georgia, and our other top five markets include Jacksonville, Dallas, Raleigh, and Phoenix, all of which are experiencing excellent demographic trends and have strong multiyear catalysts for growth. Our portfolio was 88.5% occupied and 92.6% leased at year-end. And as John highlighted, we had strong leasing spreads in the quarter. Our overall comparable blended spreads were up 12.3% when compared to expiring rents with increases of 15.5% for options and renewals and 6.4% for new leases. Because we've acquired a number of properties over the past two years with meaningful amounts of existing vacancy, we exclude from these calculations new leases that were signed for space that has been vacant since our acquisition. With a transformed portfolio that better reflects the go-forward asset strategy, we do plan to report same-store occupancy and net operating income metrics beginning in the first quarter of 2022, and we've expanded our supplemental disclosure that is available on our website to provide additional industry-standard information. For the fourth quarter, NAREIT FFO was $0.60 per share, core FFO was $1.07 per share, and adjusted FFO was $1.23 per share. We started to report core FFO to adjust for one-time financing transactions, any future mark-to-market adjustments, and certain amortization that is transactional in nature, but not currently permitted within the NAREIT FFO calculation. Our 2021 core FFO results directly aligned with our previously provided 2021 FFO guidance, and as we noted in our earnings release yesterday, our 2022 core FFO guidance accounts for these potential future adjustments. For the year, 2021 NAREIT FFO was $3.35 per share and core FFO was $3.93 per share, which was an $0.08 per share beat at the top end of our guidance range. Our 2021 AFFO was $4.36 per share and represents a $0.16 per share beat at the top end of our AFFO guidance range. As previously announced in November, the company paid a fourth quarter regular common stock cash dividend of $1 per share on December 30. And earlier this week, we announced an 8% increase for our first quarter 2022 regular common stock cash dividend, which will be paid on March 31 to shareholders of record on March 10. Our new first quarter common stock dividend of $1.08 per share represents an annualized yield of approximately 7% and an 86% implied annualized cash payout ratio based on the midpoint of our 2022 AFFO per share guidance. As of year-end 2021, we had total cash and restricted cash of $31 million and total long-term debt outstanding of $283 million. Net debt to total enterprise value at quarter end was approximately 36%, and our net debt-to-EBITDA was 6.1x. We were active in a number of different aspects in the capital markets during the fourth quarter, with the most notable transactions, including entering into a new $100 million term loan in November, repurchasing nearly $11 million of our 2025 senior convertible notes, repurchasing more than 40,000 shares of our common stock at an average price of $54.48 per share. And while modest in dollar value, we did purchase 8,000 shares of Pine stock at an average price of $17.65 per share as we continue to believe there is significant unrealized value embedded in our Pine ownership. As part of the earnings release yesterday, we did release anticipated transaction and earnings guidance for 2022. Our guidance relies on a number of significant assumptions, including but not limited to our ability to raise funds for investment at a reasonable cost of capital, our ability to acquire and sell assets at acceptable valuations, and an overall stable economy that supports our underlying tenants. We expect to invest between $200 million to $250 million in properties at a blended investment yield of 6.25% to 6.75%. Our transaction volume and investment yields take into account the increasingly competitive acquisition environment and also assumes some structured investments in the form of preferred equity or development loans that allow us to gain an interest in assets we would otherwise like to own and where we can potentially obtain a higher yield and a shadow pipeline of opportunities through right of first refusal or right of first offer options within the loan or preferred equity agreements. Our dispositions guidance assumes $40 million to $70 million of asset sales at a blended exit cap rate between 6.5% and 7.5%. As John noted, we expect to focus our disposition efforts on our remaining noncore single-tenant and office properties, which will continue to move our portfolio towards a pure-play multi-tenant retail and mixed-use strategy. Our full year 2022 core FFO guidance range is $4.30 to $4.55 per share, and our full year 2022 AFFO guidance range is $4.90 to $5.15 per share. The midpoint of our AFFO guidance implies 15% year-over-year growth, which is driving our recently increased dividend and significantly improving the overall coverage of our dividend as we look to maximize free cash flow. Overall, 2022 is shaping up to be another strong year of growth as we capitalize on our momentum from 2021. We appreciate the support provided by our shareholders and business partners, and we look forward to continued success. I'll now turn the call back over to John for his closing remarks.

Thanks, Matt. We're very proud to have delivered a 57% total shareholder return in 2021. Part of our outperformance was from our stock being re-rated in our first year as a REIT, which is still a meaningful future opportunity given that there is very limited current REIT dedicated shareholder and index ownership. We think a large part of our outperformance is from the market recognizing our efforts and success throughout the year as we continued our portfolio repositioning process and executed on our business strategy. For 2022, we provided guidance that has the top end of the range poised to deliver 18% AFFO per share growth. Our recently announced dividend increase provides a growing outsized dividend yield with improved AFFO coverage. All of this is driven by our high-quality portfolio, which is based on some of the strongest markets in the United States. And finally, we did announce we are moving our headquarters to Winter Park, Florida. We continue to maintain our Daytona Beach office, but Winter Park is in a larger MSA that will give us access to a deeper employee pool as we look to grow our talented team. We appreciate all of your support. And with that, we will open it up to questions.

Our first question comes from Rob Stevenson with Janney.

John, now that you've gotten rid of the land joint venture, what's the current plan for the subsurface rights portfolio? And Matt, what else do you guys have that would be considered bad income for the REIT at this point going forward?

So on the subsurface mineral rights, we've been selling a lot of individual transactions to service owners. Whether someone owns a small piece of property or a large ranch, we've been proactively reaching out to service owners, and we have a fair amount of activity on that. There are kind of small dollar sizes, but that's the way we're going about it. It is just granularly selling it off. And then also on the mitigation bank, we'll be selling credits throughout the year and looking to try to sell the whole bank, which would bring in some capital for reinvesting in the income properties, and I'll let Matt talk about the accounting part of it.

On the bad income side, the biggest component of income that's flowing through the TRS is the management fee related to Alpine. There's nothing else that's really substantial in there other than that.

Okay. And then what are your leasing expectations for 2022 for the vacancy in the portfolio? I mean, most of your assets are 100% occupied, but you do have a few that are lower occupancy, redevelopment, etc. Any near-term leases that you guys feel confident or likely to be signed? And also any move-outs of size in 2022 on any of the currently occupied space?

Yes. So on the leasing side, the leasing activity is very robust, especially at Ashford Lane, as we discussed. Some of that has to do with tenants that we can move out or have expiring leases. So it may not be pure vacancy leasing, but it’s taking advantage of lower rental rate tenants that might have to be leading. There’s lots of activity on leasing existing occupied space and vacancy. One example I'll give you is we bought, as we mentioned in our press release, an empty building adjacent to Ashford Lane, and we're in discussions, LOI lease negotiations with a tenant to take all of that. Also in Santa Fe, we have lots of active discussions going on with some vacancy there. So we're very optimistic about what we'll be able to do on that building throughout the year. But in general, I would say there's very robust leasing activity, and it has to do with taking advantage of tenants with low rents and vacancy.

And Rob, on the move-out side, I would say we've addressed more than half of the lease expirations in 2022, and for the biggest ones, we have backfill tenants lined up for us. So we're in pretty good shape there.

Okay. What was the cap rate on the Party City disposition to Pine?

I would say it was in the high teens.

Okay. And then last one for me, John, how does the Board balance buying shares of Pine within CTO versus repurchasing CTO shares when the stocks are undervalued, given your unique knowledge of both companies. Obviously, you would repurchase CTO shares. If you're going to do it on a leverage-neutral basis, you're only able to put $0.50 of every dollar to work or even less versus taking cash and buying Pine. How do those allocations work inside the board when you view theoretically both companies as being undervalued? And where do you put your incremental dollar going forward in those situations?

Well, as you can see, we were active on both fronts. It’s basically when there’s dislocation and either opportunity that we have certain levels where we say that we want to invest more in either repurchasing CTO stock or buying Pine stock. It’s really a function of the opportunity and having set levels where we have interest in both. So it’s a little bit of a combination.

Next question comes from Craig Kucera with B. Riley Securities.

I want to first start out with the guidance. And just to confirm, does the disposition guidance include any monetization of the mitigation credits or rights? Or is that just sort of a mix of expected sales of single-tenant, maybe some office properties?

That is just the single-tenant and office properties. The mitigation credits or the mitigation bank or any subsurface would be in addition to the guidance.

Got it. Okay. And it sounded like you've had some success kind of selling the subsurface on a one-off basis, but have you started marketing the mitigation credits as more of a bulk sale? And I guess, how is that going so far? Or is that still TBD?

Yes, we have people that are interested and have made offers and done some analysis. It's a little bit of a complicated investment. So a lot of folks aren't as knowledgeable about it. We've walked them through that. But we'll basically have a price in mind and fairly optimistic that as we sell credits and the bank gets smaller, the price will come up to a level that we're interested in transacting. So anyway, it's been pretty active, and it's a sector that people like. It's just really finding the right capital source for us.

Got it. Changing gears, I appreciate you seeing the increased disclosure on the leasing activity. And I think you noted there's about a 400 basis point spread between what's leased and what's currently occupied. Can you give us a sense of when those tenants who have signed leases but haven't started paying rent will take economic occupancy? Is that somewhere mid-'22? Or just any color there would be helpful.

Yes, I'll start with that. I would say that, as you can imagine, with everything going on in the macro markets as far as inflation, supply chains, labor, and everything, everything is taking a little longer, and tenants that we've signed leases with have multiple locations that they are trying to open, and so they're slotting in our openings within their larger platforms. I would say mid-year to June, July, August is really where the bulk of them will be coming in, and that could slip. It’s just hiring architects and contractors and some contractors are saying that they're not interested in doing this because they have bigger projects going on. So, I would say mid-year and third quarter.

Okay. Fair enough. And just thinking about your investment pipeline, I guess historically, you've done more mezzanine loans and loans, etc., and kind of got out of that business. And I guess, should we expect to see a meaningful amount of those in 2022 as far as investments in preferred equity? And I guess, sort of how are you thinking about that from a risk-adjusted return relative to sort of your investment pipeline outside on the property side?

Yes, I mean, it’s a good question, Craig, and that's why I wanted to highlight it. We are seeing opportunity. It's a little bit different this time on the structured investments, than before when we were doing good risk-adjusted yields on properties that may or may not fit in our portfolio. But now we're looking at structured finance investments in properties that we'd love to have in our portfolio. For instance, what we're seeing is that, let's say, a developer has a project, they've received contractor bids that come back 30% to 40% higher than budget, rather than calling equity that has a price to it, they're bridging the gap with us for a short duration. So we're seeing a fair amount of that sort of opportunity on assets that we really like. We're probably going to get yields higher than if we were the equity, but it just won't be a long duration. We're talking about 1- to 3-year to 5-year sort of duration, but that keeps us basically on top of assets that we'd like to own. It keeps us with relationships with developers or owners that we'd like to do more business with. We feel like it will lead to a transaction that will be kind of long-term equity properties for us in the future or could.

Okay. Great. And just one more for me, kind of in the same vein. 2022 looks like a pretty active year again on the external growth side. Can you give us a sense of kind of what your current pipeline is that you're working on? And kind of what you see may close in the next 3 to 6 months that you can?

Yes. I mean, we do have a property in the pipeline that should close relatively soon, let's say, within the next 30 days. But we have been actively bidding literally on assets almost every week. We're not trying super hard to buy assets; the cap rates have come down quite a bit. We're hoping that some of the macro issues in the market will provide opportunity for us to buy at better yields. So, we're being prudent about the offers that we're putting out. The good news is there's a fair amount of assets that are on the market or coming to market. We're just picking our spots, and we feel optimistic that we'll fill out the acquisition side, given what we're seeing coming to market.

Our next question comes from Jason Stewart with Jones Trading.

I wanted to follow up on the macro environment and your comments around the acquisition and the competitive environment there. It sounds like rate volatility has not impacted people's acquisition appetite. Are you seeing new capital coming into the sector? Or is this from existing players?

It's mainly from existing players that were on the sidelines during the pandemic and have basically said, okay, retail has done fairly well during the pandemic. So people are coming back into the market and feel like they're underrepresented in their portfolio on retail. So you're seeing a lot of catch-up capital, I would say. We're trying to stay out of the way of those people that are investing because they're a little bit behind on their portfolio allocations. Hopefully, that gets taken up pretty soon, and we'll be able to buy at better yields. We're actively pursuing all acquisitions, and we're learning a lot about the players out there and where they're buying properties, so we're just kind of biding our time.

Got it. And then in terms of dispositions, is it your expectation that the rest of the single-tenant net lease properties go to Pine? Or are there required returns too high?

Yes, I mean, there are very few that could go to Pine, but where we're seeing transactions take place, probably the cap rates will be lower than where Pine would have an interest.

Got it. Okay. And then I don't think we've touched on the Wells office. If you could just give us a quick update, that would be great.

You're talking about the wells that Pine owns over in Hillsboro.

Yes, this as it relates to the way you're just thinking about dispositions in terms of CTO and the office portfolio. If it relates, that would be awesome.

Yes. So I’ll just talk about CTO, given that we’ve provided that update at Pine. In CTO, we do have, as you know, 3 or 4 office assets that we want to sell, but we’re trying to basically match those up with acquisitions. The market is strong for the property that we have, even on the multi-tenant side property that we have in Jacksonville. So we’re very confident that we’ll be able to transact on selling those assets. It’s really about finding the acquisition leg of it. So we're pursuing acquisitions, and we plan on using part of that capital from additional office sales.

Our next question comes from Michael Gorman with BTIG.

John, I apologize if I missed it, but could you maybe just talk a little bit about as you continue to shift more towards the income-producing assets, kind of portfolio construction strategy as you think about potential value-add assets versus in-place stable cash flows. What's your comfort level there in terms of the balance between them and occupancy upside versus in-place occupancy?

Yes, I mean, good question. Given that we trade at such a low multiple, and we have such strong cash flow and we're paying a very nice dividend yield, we like finding vacancies where we can have outsized equity returns and are not as concerned about having additional cash flow right off the bat. That allows us to look for assets where, for instance, Santa Fe was a great example, where it was 66% occupied and had a lot of low-hanging fruit. So we like those a lot where we can buy way below replacement costs in good locations, and with the robust leasing and tenant activity, we feel like we can do some good work there. We are bidding on stabilized assets as well, but we're probably not going to be as competitive given the capital out there chasing those sorts of assets right now. You’re seeing a lot of very low cap rates for stabilized assets. We’d rather find something with a bit of vacancy that doesn't fit a lot of the other capital providers.

Okay. Great. And then maybe just one on the dividend. There is a nice increase coming into the report here. Even with that, with the strong AFFO guidance, your payout ratio definitely decreases. Could you discuss the strategy regarding how much you think that is being recognized in the marketplace versus retaining some excess cash flow to fund the investment pipeline? Was that increase driven by necessity or was it more about how you were thinking about the dividend increase in relation to the cash flow?

Yes, I'll let Matt talk about that as it will help you give some background.

Yes, Mike, we're very focused on maximizing cash flow. So when you see us do a dividend increase, it's largely to track to 100% payout of taxable income. We're not increasing it just to continue to increase the dividend for the sake of doing it. We're trying to be pretty efficient with retained cash flow. In terms of the market recognition, I think as we continue to improve the payout ratio, as you noted, we're in the mid-80s now for an AFFO payout ratio, which is much more palatable for people. I think we'll start to get more recognition for the dividend and the outsized yield that we're providing, but obviously, coming into this year, it was more elevated. I think that's a good step forward.

Okay, great. And so I guess, maybe Matt, just the way that we should think about it, is it right to think that the dividend will probably track AFFO growth from this point forward? Or could we still see a little bit of a reduction in the payout ratio? Or how should we think about dividend growth going forward?

Yes. I would say with the status quo, you should assume it tracks FFO growth. And then if we raise additional capital and have a bit more of a depreciation shield on the deployment of that additional capital, you’ll see the payout ratio come down as we continue to try to maximize cash flow.

I'm showing no further questions in queue at this time. I'd like to turn the call back to John Albright for closing remarks.

Thank you very much for attending this call, and we look forward to talking with you throughout the quarter. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.