Thank you for joining us for InvenTrust's Fourth Quarter 2023 Earnings Conference Call. My name is Benny, and I will be your operator today. Before we start, I want to remind everyone that this presentation is being recorded, and you can find a replay in the Investors section of the company's website at inventrustproperties.com. Now, I would like to hand the call over to Mr. Dan Lombardo, Vice President of Investor Relations. Please proceed, sir.

Thank you, operator. Good morning, everyone, and thank you for attending our call today. Joining me from the InvenTrust team is DJ Busch, President and Chief Executive Officer; Mike Phillips, Chief Financial Officer; Christy David, Chief Operating Officer; and Dave Heimberger, Chief Investment Officer. Following the team's prepared remarks, we will open the lines for questions. As a reminder, some of today's comments may contain forward-looking statements about the company's views on the future of our business and financial performance, including forward-looking earnings guidance and future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call or that are in the quarterly financial supplemental or press release. In addition, we will also reference certain non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials, which are posted on our Investor Relations website. With that, I will turn the call over to DJ.

Thanks, Dan, and good morning, everyone. Today, I'll start with a brief summary regarding the fourth quarter and the full year of 2023, Mike will provide an overview of our financial results and some color on our 2024 expectations, and Christy will conclude with some of our continued success on the operational front. 2023 was another excellent year for InvenTrust, and our performance continues to demonstrate the strength and resiliency of our simple and focused strategy. It has been a little over two years since InvenTrust introduced its portfolio and strategy to the public market in October of '21, which is to own and operate essential open-air retail centers exclusively in the Sun Belt region of the U.S. while maintaining a simple and low leveraged capital structure and employing a straightforward capital allocation plan. In the two full years since joining the public market, the company has grown same-property net operating income by an average of 4.8% per year, above the NAREIT shopping center average. It has increased core FFO per share by 18%, again, well above the NAREIT shopping center average and completed $240 million of net investment activity, or a 10% expansion of the asset base. The strength in our underlying fundamentals is undoubtedly driven by the favorable demand drivers in the Sun Belt markets in which we operate and a generationally low amount of new retail construction. To take demand dynamics a step further, nearly 85% of our properties are located in states that have disproportionately benefited from positive migration trends, with Texas and Florida leading the way. In spite of an uptick in some well-documented retail bankruptcies in 2023, our leasing velocity remains strong as we continue to push rents and lease up the minimal number of vacancies left in the portfolio. In fact, in the fourth quarter, we executed more new deals than in any quarter since 2019. As a result, lease occupancy continues to be near all-time highs at over 96%, primarily driven by the continued strength in our small shop tenancy, which again reached an all-time high of 92.5% and has increased sequentially for the 11th consecutive quarter. Moreover, the underlying credit strength and predominantly necessity-based offerings within our merchandise mix give us confidence in our tenants' operating ability despite whatever economic disruptions may or may not unfold in the coming years. As indicated in our 2024 guidance, the favorable trends within our business are expected to more than offset some of the downtime related to the bankruptcies noted earlier, a normal cycle within our business. And the anchor leasing efforts today will be sizable contributors for continued growth beyond 2024. On the capital allocation front, we remain selective regarding new acquisitions. We continue to carefully monitor our cost of capital in relation to private market values, and we'll continue to be disciplined as we look to grow the portfolio. During the quarter, we did raise a modest amount of equity through our ATM program for the first time since becoming a publicly traded company. This subtle yet important milestone displays yet another avenue for InvenTrust to raise capital if and when proceeds can be used in a value-accretive manner. Our balance sheet continues to be the core strength of the company. Sector-low leverage levels and de minimis near-term maturities put InvenTrust in an enviable position as we seek new opportunities for growth. On that note, the company did acquire a grocery-anchored center subsequent to the quarter in Chandler, Arizona. This marks InvenTrust's first property in the Phoenix MSA, and we're excited to expand our footprint in a market that exhibits many of the favorable demographic drivers we see in the rest of our Sun Belt markets. Our core operations, coupled with selective external growth opportunities, like the one just described, is the precise recipe on how we expect to deliver sustainable cash flow growth year in and year out, which should translate into superior total returns for our stakeholders. With that, I'll turn the call over to Mike to discuss our financial results.

Thank you, DJ, and good morning, everyone. I will start by taking you through our fourth quarter and full year financial highlights. Then I will discuss the condition of our balance sheet and conclude with our 2024 guidance. To start, NAREIT FFO was $30.8 million or $0.45 per diluted share for the three months ended December 31, 2023. Full year NAREIT FFO was $115.5 million or $1.70 per diluted share. The increases were primarily driven by NOI growth, the acquisition of the remaining 45% of our joint venture, higher interest income, and higher-than-anticipated nonrecurring income from non-operating activities. These items were offset partially by higher interest expense. For core FFO, InvenTrust's fourth quarter results were $27.8 million or $0.41 per diluted share, an increase of 21% over the fourth quarter of 2022. Full year results were $111.9 million or $1.65 per diluted share, an increase of 5% over the previous year. Fourth quarter same-property NOI grew at 6.4% over the same quarter in 2022. Drivers of NOI growth for the quarter were base rent of 260 basis points, net expense reimbursements of 420 basis points, ancillary and percentage rents of 100 basis points and partially offset by 100 basis points of revenues deemed uncollectible. Full year same-property NOI grew at 4.9%, driven primarily by base rent growth of 390 basis points, net expense reimbursements of 190 basis points, and offset by 40 basis points from revenues deemed uncollectible and a 60 basis point headwind from out-of-period rent collected in 2022. Our balance sheet remains well-positioned with $446 million of total liquidity, including a full $350 million of borrowing capacity available on our revolving line of credit. Net leverage ratio was 27%, and our net debt to adjusted EBITDA is 4.9x on a trailing 12-month basis. Our weighted average interest rate ended the year at 4.3% with a weighted average maturity of four years. As a reminder, in October, we extended the maturity on our cross-collateralized pooled loan by executing one of its two one-year extension options. In December, we paid down $20 million of debt, reducing our variable rate debt exposure to 9%. As DJ mentioned, at the end of 2023, we raised $5.4 million of net proceeds through the issuance of approximately 208,000 shares on the open market at a weighted average price of $26.13. In the fourth quarter, we declared a dividend payment of $0.215 per share. And as you saw in our press release yesterday, the Board also announced another 5% increase in our dividend beginning with our April 2024 payment. This brings our annualized dividend to $0.905 per share. I will conclude my remarks by discussing our initial 2024 guidance. Building on our strong 2023 results, we expect NAREIT FFO to be between $1.69 and $1.75 per share. We are setting the guidance range of $1.66 to $1.70 per share for core FFO. Components of FFO growth include same-property NOI and acquisitions, which is offset by higher G&A, increased interest expense, and less interest income. Finally, we expect same-property NOI growth to be in the range of 2.25% to 3.25%. Our same-property NOI guidance range assumes a bad debt reserve of 50 to 100 basis points of total revenue. Growth for same-property NOI is primarily driven by base rent, including 150 basis points coming from contractual rent bumps. Our full year guidance assumptions are provided in our supplemental disclosure filed yesterday. And with that, I'm going to turn the call over to Christy to discuss our portfolio activity.

Thanks, Mike. Let me begin by reemphasizing DJ's earlier remarks. The leasing momentum we have and continue to experience is driven by limited new supply and the scarcity of premium retail space. We believe limited new supply for the strip center space across the country and in particular, the Sun Belt will be far below historical averages for several years to come, keeping premium retail space in high demand. The team is able to capitalize on these market dynamics by increasing rental rates and remerchandising with stronger credit tenants at our centers. The fourth quarter of 2023 was one of the strongest and most active in recent years. We signed 86 leases for over 550,000 square feet. Part of this activity included the signing of two former Bed Bath & Beyond spaces, one with PGA Superstore in La Quinta, California, and the other with Nordstrom Rack in Charlotte, North Carolina. These outstanding tenants will be additive to the tenant mix and customer experience at each of these centers. We are projecting these tenants to open their stores sometime in the next 12 to 18 months with sizable rent spreads of over 30%. We have two remaining Bed Bath & Beyond spaces that each have received multiple LOIs. The team is actively assessing the best tenant for each asset and will proceed to lease execution. During the quarter, we also secured several other leases with tenants, including Yard House, Old Navy, and BJ's Brewhouse. All this activity increased our total portfolio leased occupancy to 96.2%, up 110 basis points from last quarter, reapproaching the portfolio's peak. Our anchor space lease occupancy finished at 98.2%, an increase of 160 basis points from last quarter, and our small shop lease occupancy increased to 92.5%, a new high point for our portfolio. As of December 31, InvenTrust's total portfolio ABR is $19.48, an increase of 2.1% compared to 2022. For the quarter, we posted blended comparable lease spreads of 13.9%. The spreads for new leases were approximately 34% with renewals nearing 8% for the quarter. Our retention rate remains at 90% as we continue to see tenants renew their existing leases at meaningful increases. One of our main focal points for 2024 will be to lease up the few remaining anchor spaces within our portfolio and have our localized experience teams expeditiously work to ensure all the leasing activity in 2023 results in new tenants opening and operating at our centers. Operator, that concludes our prepared remarks, and you can open the line for questions.

Our first question today comes from Dori Kesten from Wells Fargo. Please go ahead. Your line is now open.

Thanks, good morning. Your $75 million in net investment activity this year, how much of that is in your site today? And are you assuming some non-Sun Belt asset sales within that?

Good morning, Dori. Yes, regarding the $75 million net investment assumption included in our guidance, you can look at it in a few ways. We have already closed $30 million of that in the first quarter, and we have good visibility into our pipeline, which typically includes a couple of hundred million dollars in deals. While some of these may not work out due to pricing or decisions made during due diligence, we feel more positive about the acquisition pipeline now compared to last quarter, and I expect that trend to continue throughout the year. Others in the industry are likely experiencing similar visibility. It's important to note that our net investment assumption reflects our current market perspective, and we will adjust it based on our cost of capital. The $75 million is based on our current pipeline and our buying goals, ensuring that they are beneficial for the business. We may increase our investments if market conditions improve or scale back if necessary. Regarding non-Sun Belt assets, we have three properties outside of the Sun Belt—one in Richmond and two in Maryland. These properties are always on our radar, and we have previously indicated that we would consider selling them if we find a suitable replacement for that capital. Disposing of those properties will depend on the opportunities available on the acquisition side.

And I believe your floating exposure now stands around just under 10% with some swaps expired. Are you comfortable at that level throughout the year? Or should we expect, I guess, additional swaps?

Yes, we are. And obviously, we're monitoring the curve as everyone else is. As we look through 2024. We did decide to pay down a little bit of debt with cash on hand at the end of last year to lower that exposure a little bit. I think 10% is a good number for us. It's obviously, if we can't find accretive opportunities in the open market it's not our first choice, but we will choose to chip away with that if rates move in a different direction than what we're expecting. And then we'll look to replace that with permanent debt when the markets are a little bit more accommodative and we'll start to look at that probably in the second half of this year.

Can you explain the reasoning behind the relatively small size of the ATM issuance this quarter? You mentioned that the pricing was beneficial with the acquisition, so I’m curious about the $5 million amount.

Yes, absolutely. One of the challenges we faced was not issuing equity when we decided to list the company, as we didn't go through a traditional IPO. Therefore, the $5 million, although it is a modest amount, was significant for demonstrating our access to capital. By the end of the year, with some momentum in the REIT market, we decided to explore that option and successfully raised a small amount. We will continue to consider this if the price reaches a level that is acceptable to us, where we believe we can effectively utilize the proceeds.

Thank you.

Our next question today comes from the line of Lizzy Doykan from Bank of America. Please go ahead. Your line is now open.

Hi, good morning. It was great to see you finalize the center in Phoenix and enter that new market. I'm interested in understanding your plans for becoming familiar with that market and how you intend to grow your team there. What opportunities do you see for expansion? Also, if you could share any details on pricing or the cap rate, that would be appreciated.

Yes, Lizzy. Good morning. Great question. I'm happy to address most of that. Arizona, and specifically Phoenix, is a market that InvenTrust has been involved with for several years before my time here. The team has experience with larger assets in that area, though it has been some time since we've engaged there. Over the last couple of years, especially since we went public, we've been getting reacquainted with the Phoenix market. We’ve been keen on finding the right asset to establish a presence, and this particular asset meets our criteria. It is a stable, high-quality property that requires minimal management or value-added work. It’s essentially a set-it-and-forget-it situation, and it should perform well. Built in 2016, this asset is relatively new. While newer properties sometimes lack embedded rent growth, the rapid changes in the Phoenix market since 2016 give us confidence that this stable asset presents a bit more potential for growth. Regarding your pricing question, while I can't provide specific cap rates, this asset meets our expected hurdles and unlevered internal rates of return, generally aiming for around 7%, in the high 6s to 7% range, given its core grocery focus and smaller size.

Great. That's helpful. And the credit loss assumption you guys put out within guidance, the 50 to 100 basis points seems fairly wide. Just curious on what the underlying assumptions are for that cushion, whether it's based on scenarios of known tenant disruption versus the unknown. And then I don't know if you can comment specifically on what might be incorporated for Jo-Ann.

Sure, I'm happy to share. We have one Jo-Ann, and that is included in our assumptions within the 50 to 100 basis point range. Additionally, we have one Rite Aid located in California. Rite Aid is currently navigating its process, and if they successfully move forward, we believe it is a site they will be satisfied with, but we will need to wait and see. The remainder consists of smaller shops, and the small shop risk has surprisingly turned out better than expected over the past two years. We do anticipate a return to more normal levels at some point, which would account for the balance. You accurately identified Jo-Ann, and I would also mention Rite Aid. While these two do not represent a significant portion, they are the main anchors to consider, with the rest being primarily unforeseen small shop challenges.

Okay, helpful. Thank you.

The next question today comes from Floris van Dijkum from Compass Point. Please go ahead. Your line is now open.

Hi, good morning. Thank you for taking my question. DJ, great results. The portfolio appears to be performing well. Phoenix is a new market, and I understand you've touched on it a bit, but what can we anticipate? Establishing a presence in Phoenix is significant. What should we expect in terms of dollar volume or assets for IVT to have in a market like Phoenix over the medium term?

That's a great question. One challenge we face is scaling up quickly, which is quite difficult. We have identified an asset that we would be satisfied with, even if it's the only one we have for a while, depending on market pricing and opportunities. Ideally, we believe our portfolio operates at a higher level when we have at least three or four assets in a market, but achieving this will take time. There are very few opportunities to acquire multiple assets in a single market all at once, particularly at reasonable prices. We've been monitoring this asset for some time and feel comfortable about it for the reasons mentioned earlier. Phoenix is high on our priority list for adding to our portfolio due to its appealing characteristics, which are similar to those found in Florida and Texas, as well as North Carolina. We are eager to explore more opportunities in the area, especially with Chandler being the third largest city in the county, providing us confidence that we are positioned well, and we plan to expand further if opportunities arise.

Speaking of those opportunities, I know that the site has listed its portfolio for focus on curb. They had several projects, I believe, in Phoenix as well. Presumably, you would consider that. Is that something you are monitoring?

Without going into details about specific companies or portfolios, we will evaluate everything because, as you know, our portfolio mainly consists of neighborhood centers that are primarily necessity-based or grocery-focused. We are open to different types of properties. We also have some power centers and smaller centers. The key focus for our business model is on location, specifically necessity-based retail in the right areas. I am not dismissing the portfolio of site centers, but I would assume most of those are larger and, as a result, tend to carry a higher level of risk or perceived risk. If we were considering those, the hurdle rates would likely be higher. However, we would definitely explore this if our operations team felt comfortable.

Great. And maybe I have one other question. Your occupancy levels are likely among the highest in your sector, especially regarding your anchor and leased occupancy. Where do you think there is still room for growth? I believe your shop occupancy of 92.5% has potential for further improvement, but I’m interested in your thoughts on how much higher you think you can increase occupancy over the next 18 to 24 months.

That's a good question and observation. To provide some context, we currently have five anchor vacancies across our portfolio, two of which are due to Bed Bath & Beyond closures, and we are actively working on securing leases for those. One vacancy is intentionally being reserved for a larger redevelopment project in Florida, which presents a significant opportunity for us in the coming years. The remaining two vacancies are also under negotiation. Our team is nearing completion on addressing all five vacancies, although we recognize there may still be some challenges. Overall, we are getting close to achieving full occupancy for our anchors. You are correct in noting the 7.5% vacancy in our small shop space represents a significant opportunity. Our team is diligently developing strategies to fill that remaining space, some of which has been vacant for an extended period, and we have made substantial progress in that area. I anticipate that a portion of our growth over the next couple of years will stem from occupancy increases, while the rest will be driven by rate and retention. Retaining tenants at higher rates is likely to yield the best returns with minimal to no capital expenditure, allowing for higher rents with a proven concept.

Thanks DJ.

There are no additional questions waiting at this time. So I'd like to pass the call back over to DJ for any closing remarks.

Thank you. And thank you, everyone, for joining us this morning. As always, if you have any questions, feel free to reach out to our team here. We appreciate you joining and your interest in InvenTrust, and we look forward to seeing many of you in the coming months. Have a great day.

This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.