SITC 10-Q
SITE Centers Corp. (SITC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended
OR
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 31, 2025 the registrant had
SITE Centers Corp.
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED September 30, 2025
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
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Item 1. |
Financial Statements – Unaudited |
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Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 |
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Consolidated Statements of Operations for the Three Months Ended September 30, 2025 and 2024 |
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Consolidated Statements of Operations for the Nine Months Ended September 30, 2025 and 2024 |
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6 |
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Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2025 and 2024 |
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 |
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9 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
33 |
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Item 4. |
34 |
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PART II. OTHER INFORMATION |
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Item 1. |
35 |
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Item 1A. |
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Item 2. |
35 |
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Item 3. |
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Item 4. |
35 |
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Item 5. |
35 |
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Item 6. |
36 |
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37 |
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2
SITE Centers Corp.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands, except share amounts)
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September 30, 2025 |
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December 31, 2024 |
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Assets |
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Land |
$ |
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$ |
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Buildings |
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Fixtures and tenant improvements |
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Less: Accumulated depreciation |
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Construction in progress and land |
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Total real estate assets, net |
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Investments in and advances to joint ventures, net |
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Cash and cash equivalents |
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Restricted cash |
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Accounts receivable |
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Amounts receivable from Curbline |
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Other assets, net |
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$ |
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$ |
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Liabilities and Equity |
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Indebtedness |
$ |
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$ |
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Amounts payable to Curbline |
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Accounts payable and other liabilities |
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Total liabilities |
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SITE Centers Equity |
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Common shares, with par value, $ |
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Additional paid-in capital |
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Accumulated distributions in excess of net income |
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Deferred compensation obligation |
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Accumulated other comprehensive income |
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Less: Common shares in treasury at cost: |
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Total equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
SITE Centers Corp.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share amounts)
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Three Months |
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Ended September 30, |
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2025 |
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2024 |
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Revenues from operations: |
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Rental income |
$ |
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$ |
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Fee and other income |
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Rental operation expenses: |
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Operating and maintenance |
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Real estate taxes |
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Impairment charges |
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General and administrative |
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Depreciation and amortization |
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Other income (expense): |
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Interest expense |
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( |
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Interest income |
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Gain on derivative instruments |
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Debt extinguishment costs |
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Transaction costs and other expense |
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( |
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( |
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( |
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( |
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Loss before earnings from discontinued operations, equity method investments |
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( |
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Equity in net (loss) income of joint ventures |
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Gain on disposition of real estate, net |
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(Loss) income before tax expense |
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Tax expense of taxable REIT subsidiary and state franchise and income taxes |
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(Loss) income from continuing operations |
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( |
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Loss from discontinued operations |
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( |
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Net (loss) income |
$ |
( |
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$ |
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Preferred dividends |
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( |
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Net (loss) income attributable to common shareholders |
$ |
( |
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$ |
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Per share data: |
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Basic: |
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(Loss) income from continuing operations |
$ |
( |
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$ |
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Loss from discontinued operations |
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( |
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Total |
$ |
( |
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$ |
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Diluted: |
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(Loss) income from continuing operations |
$ |
( |
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$ |
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Loss from discontinued operations |
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( |
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Total |
$ |
( |
) |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
SITE Centers Corp.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share amounts)
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Nine Months |
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Ended September 30, |
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2025 |
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2024 |
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Revenues from operations: |
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Rental income |
$ |
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$ |
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Fee and other income |
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Rental operation expenses: |
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Operating and maintenance |
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Real estate taxes |
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Impairment charges |
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General and administrative |
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Depreciation and amortization |
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Other income (expense): |
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Interest expense |
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( |
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( |
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Interest income |
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Debt extinguishment costs |
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( |
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( |
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Gain on debt retirement |
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Loss on derivative instruments |
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( |
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Transaction costs and other expense |
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( |
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( |
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( |
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( |
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Loss before earnings from discontinued operations, equity method investments |
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( |
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( |
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Equity in net (loss) income of joint ventures |
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( |
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Gain on sale and change in control of interest |
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Gain on disposition of real estate, net |
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Income before tax expense |
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Tax expense of taxable REIT subsidiary and state franchise and income taxes |
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( |
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( |
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Income from continuing operations |
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Income from discontinued operations |
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Net income |
$ |
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$ |
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Preferred dividends |
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( |
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Net income attributable to common shareholders |
$ |
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$ |
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Per share data: |
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Basic: |
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Income from continuing operations |
$ |
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$ |
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Income from discontinued operations |
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Total |
$ |
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$ |
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Diluted: |
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Income from continuing operations |
$ |
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$ |
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Income from discontinued operations |
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Total |
$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
SITE Centers Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(unaudited; in thousands)
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Three Months |
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Nine Months |
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Ended September 30, |
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Ended September 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net (loss) income |
$ |
( |
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$ |
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$ |
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$ |
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Change in cash flow hedges, net of amount reclassed to earnings |
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( |
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( |
) |
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( |
) |
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( |
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Total other comprehensive loss |
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( |
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( |
) |
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( |
) |
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( |
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Comprehensive (loss) income |
$ |
( |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
SITE Centers Corp.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited; in thousands)
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Common |
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Additional |
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Accumulated Distributions |
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Deferred |
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Accumulated Other Comprehensive Income |
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Treasury |
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Total |
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Balance, December 31, 2024 |
$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation, net |
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( |
) |
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( |
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Termination of deferred compensation plan |
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( |
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Dividends declared-common shares |
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( |
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( |
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Comprehensive income (loss) |
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( |
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Balance, June 30, 2025 |
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( |
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( |
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Stock-based compensation, net |
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Dividends declared-common shares |
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( |
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( |
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Comprehensive loss |
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( |
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( |
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( |
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Balance, September 30, 2025 |
$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
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$ |
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Preferred Shares |
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Common |
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Additional |
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Accumulated Distributions |
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Deferred Compensation Obligation |
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Accumulated Other Comprehensive Income |
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Treasury |
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Total |
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Balance, December 31, 2023 |
$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation, net |
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( |
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( |
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Dividends declared-common shares |
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( |
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( |
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Dividends declared-preferred shares |
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( |
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( |
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Comprehensive income |
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Balance, June 30, 2024 |
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( |
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( |
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Cancellation of treasury stock |
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( |
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( |
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Stock-based compensation, net |
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( |
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Dividends declared-preferred shares |
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( |
) |
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( |
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Comprehensive income (loss) |
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( |
) |
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Balance, September 30, 2024 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
7
SITE Centers Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
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Nine Months |
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Ended September 30, |
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2025 |
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2024 |
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Cash flow from operating activities: |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash flow provided by operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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Amortization and write-off of debt issuance costs, commitment fees and fair market value of debt adjustments |
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Gain on debt retirement |
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( |
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Loss on derivative instruments |
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Equity in net loss (income) of joint ventures |
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( |
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Gain on sale and change in control of interests |
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( |
) |
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Gain on disposition of real estate, net |
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( |
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( |
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Impairment charges |
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Loss on abandoned tenant lease costs |
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Assumption of building due to ground lease termination |
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( |
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Net change in accounts receivable |
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Net change in accounts payable and accrued expenses |
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( |
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Net change in other operating assets and liabilities |
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( |
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( |
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Total adjustments |
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( |
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( |
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Net cash flow provided by operating activities |
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Cash flow from investing activities: |
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Real estate acquired, net of liabilities and cash assumed |
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( |
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Real estate developed and improvements to operating real estate |
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( |
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( |
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Proceeds from disposition of real estate |
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Equity contributions to joint ventures |
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( |
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( |
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Repayment of joint venture advance |
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Distributions from unconsolidated joint ventures |
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Net cash flow provided by investing activities |
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Cash flow from financing activities: |
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Proceeds from mortgage debt |
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Payment of debt issuance costs |
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( |
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( |
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Payment of loan commitment fees |
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( |
) |
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Prepayment of Curbline loan costs |
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( |
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Repayment of senior notes |
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( |
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Repayment of mortgage debt and term loan |
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( |
) |
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( |
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Payment of debt extinguishment costs |
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( |
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( |
) |
Proceeds from terminations of derivatives |
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Repurchase of common shares in conjunction with equity award plans and dividend reinvestment plan |
|
( |
) |
|
|
( |
) |
Dividends paid |
|
( |
) |
|
|
( |
) |
Net cash flow used for financing activities |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Notes to Condensed Consolidated Financial Statements
Nature of Business
SITE Centers Corp. and its related consolidated real estate subsidiaries (collectively, the “Company” or “SITE Centers”) and unconsolidated joint ventures are primarily engaged in the business of owning, leasing, acquiring, redeveloping and managing shopping centers. Unless otherwise provided, references herein to the Company or SITE Centers include SITE Centers Corp. and its wholly-owned subsidiaries. The Company’s tenant base includes a mixture of national and regional retail chains and local tenants. Consequently, the Company’s credit risk is primarily concentrated in the retail industry.
Use of Estimates in Preparation of Financial Statements
Unaudited Interim Financial Statements
These financial statements have been prepared by the Company in accordance with GAAP for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Principles of Consolidation
Disposition of Real Estate
For the three and nine months ended September 30, 2025, the Company received gross proceeds of $
Revision of prior year balances
The consolidated statement of equity for the comparative periods shown for December 31, 2023 to June 30, 2024 and continuing to September 30, 2024, have been revised to correct an immaterial error in the the Company’s previously filed Quarterly Report on
9
Form 10-Q for the quarter ended September 30, 2024 (the “2024 Q3 Report”) related to a misclassification between additional paid-in capital and treasury stock pertaining to the cancellation of shares of the Company’s treasury stock that took place in August 2024. In the 2024 Q3 Report, the Company had reflected the retroactive impact of canceling shares of the Company’s treasury stock and should have shown the cancellation of shares of the Company’s treasury stock as occurring within the third quarter of 2024. The revised presentation reflects the correction of this error. This error had no impact on the Company’s previously reported total assets, total liabilities, total equity, net income, earnings per share or cash flows.
The table below shows the previously reported balances in the 2024 Q3 Report and revised balances shown within this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, as of the following dates within the consolidated statements of equity for the three and nine months ended September 30, 2024 that were impacted (in thousands):
|
Common Shares |
|
|
Additional Paid-in Capital |
|
|
Treasury Stock at Cost |
|
|||||||||||||||||||||||||||
|
As reported |
|
|
|
|
|
As revised |
|
|
As reported |
|
|
|
|
|
As revised |
|
|
As reported |
|
|
|
|
|
As revised |
|
|||||||||
|
3Q 24 |
|
|
Adjusted |
|
|
3Q 24 |
|
|
3Q 24 |
|
|
Adjusted |
|
|
3Q 24 |
|
|
3Q 24 |
|
|
Adjusted |
|
|
3Q 24 |
|
|||||||||
December 31, 2023 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||||||
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||||||
In addition, a new line is presented in the consolidated statements of equity for the three and nine months ended September 30, 2024, reflecting the cancellation of shares of treasury stock impacting the following components of equity (in thousands):
|
Common Shares |
|
|
Additional Paid-in Capital |
|
|
Treasury Stock at Cost |
|
|||
Cancellation of treasury stock |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Reclassifications
Certain prior period amounts reported have been reclassified to conform with current year presentation.
Statements of Cash Flows and Supplemental Disclosure of Non-Cash Investing and Financing Information
Non-cash investing and financing activities are summarized as follows (in millions):
|
Nine Months |
|
|||||
|
Ended September 30, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Dividends declared, but not paid |
$ |
|
|
$ |
|
||
Accounts payable related to construction in progress |
|
|
|
|
|
||
Assumption of buildings due to ground lease terminations |
|
|
|
|
|
||
Segments
Recently Issued Accounting Standards
Income Taxes. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 which enhances income tax disclosure requirements in accordance with FASB Accounting Standards Codification (“ASC”) 740, Income Taxes. The amendments in this update are effective for annual reporting periods beginning after December 15, 2024. The Company will review the extent of the new disclosure necessary prior to implementation. Other than additional disclosure,
10
the adoption of this ASU is not expected to have a material impact on the Company’s financial position and/or results of operations.
Expense Disaggregation Disclosures. In November 2024, the FASB issued ASU 2024-03, which requires additional disaggregated disclosure about certain income statement expense line items. ASU 2024-03 is effective for annual reporting years beginning after December 15, 2026 and interim periods within the fiscal years beginning after December 15, 2027. Other than additional disclosure, the adoption of this ASU is not expected to have a material impact on the Company’s financial position and/or results of operations.
At both September 30, 2025 and December 31, 2024, the Company had ownership interests in various unconsolidated joint ventures that had investments in
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Condensed Combined Balance Sheets |
|
|
|
|
|
||
Land |
$ |
|
|
$ |
|
||
Buildings |
|
|
|
|
|
||
Fixtures and tenant improvements |
|
|
|
|
|
||
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Construction in progress and land |
|
|
|
|
|
||
Real estate, net |
|
|
|
|
|
||
Cash and restricted cash |
|
|
|
|
|
||
Receivables, net |
|
|
|
|
|
||
Other assets, net |
|
|
|
|
|
||
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Mortgage debt |
$ |
|
|
$ |
|
||
Notes and accrued interest payable to the Company |
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Accumulated equity |
|
|
|
|
|
||
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Company's share of accumulated equity |
$ |
|
|
$ |
|
||
Basis differentials |
|
|
|
|
|
||
Amounts payable to the Company |
|
|
|
|
|
||
Investments in and advances to joint ventures, net |
$ |
|
|
$ |
|
||
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Condensed Combined Statements of Operations |
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from operations |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Expenses from operations: |
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
||||
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before gain on disposition of real estate |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on disposition of real estate, net |
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income attributable to unconsolidated joint ventures |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Company's share of equity in net income (loss) of joint ventures |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Basis differential adjustments(A) |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Equity in net (loss) income of joint ventures |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
11
(A) The difference between the Company’s share of net (loss) income, as reported above, and the amounts included in the Company’s consolidated statements of operations is attributable to the amortization of basis differentials, the recognition of deferred gains and differences in gain (loss) on sale of certain assets recognized due to the basis differentials.
Revenues earned by the Company for providing asset management, property management and leasing and development services to all of the Company’s unconsolidated joint ventures were $
Other assets and intangibles consist of the following (in thousands):
|
September 30, 2025 |
|
|||||||||
|
Asset |
|
|
Accumulated Amortization |
|
|
Net |
|
|||
Intangible assets, net: |
|
|
|
|
|
|
|
|
|||
In-place leases |
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Above-market leases |
|
|
|
|
( |
) |
|
|
|
||
Lease origination costs |
|
|
|
|
( |
) |
|
|
|
||
Tenant relationships |
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets, net |
|
|
|
|
( |
) |
|
|
|
||
Operating lease ROU assets |
|
|
|
|
|
|
|
|
|||
Other assets: |
|
|
|
|
|
|
|
|
|||
Prepaid expenses |
|
|
|
|
|
|
|
|
|||
Other assets |
|
|
|
|
|
|
|
|
|||
Deposits |
|
|
|
|
|
|
|
|
|||
Total other assets, net |
|
|
|
|
|
|
$ |
|
|||
|
Liability |
|
|
Accumulated Amortization |
|
|
Net |
|
|||
Below-market leases |
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
December 31, 2024 |
|
|||||||||
|
Asset |
|
|
Accumulated Amortization |
|
|
Net |
|
|||
Intangible assets, net: |
|
|
|
|
|
|
|
|
|||
In-place leases |
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Above-market leases |
|
|
|
|
( |
) |
|
|
|
||
Lease origination costs |
|
|
|
|
( |
) |
|
|
|
||
Tenant relationships |
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets, net |
|
|
|
|
( |
) |
|
|
|
||
Operating lease ROU assets |
|
|
|
|
|
|
|
|
|||
Other assets: |
|
|
|
|
|
|
|
|
|||
Prepaid expenses |
|
|
|
|
|
|
|
|
|||
Other assets |
|
|
|
|
|
|
|
|
|||
Deposits |
|
|
|
|
|
|
|
|
|||
Total other assets, net |
|
|
|
|
|
|
$ |
|
|||
|
Liability |
|
|
Accumulated Amortization |
|
|
Net |
|
|||
Below-market leases |
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Amortization for the three and nine months ended September 30, 2025 and 2024 related to the Company’s intangibles was as follows (in thousands):
Period |
|
Income |
|
|
Expense |
|
||
Three months ended September 30, 2025 |
|
$ |
|
|
$ |
|
||
Three months ended September 30, 2024 |
|
|
|
|
|
|
||
Nine months ended September 30, 2025 |
|
|
|
|
|
|
||
Nine months ended September 30, 2024 |
|
|
|
|
|
|
||
12
The disaggregation of the Company’s lease income, which is included in Rental income on the Company’s consolidated statements of operations, as either fixed or variable lease income based on the criteria specified in ASC 842, for the three and nine months ended September 30, 2025 and 2024, was as follows (in thousands):
|
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Rental income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed lease income(A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Variable lease income(B) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Above-market and below-market leases amortization, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments for potentially uncollectible revenues and disputed amounts(C) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(A)
(B)
(C)
The following table discloses certain information regarding the Company’s secured indebtedness (in thousands):
|
|
Carrying Value at |
|
|
Interest Rate(A) at |
|
|
|||||||
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
|
September 30, 2025 |
|
December 31, 2024 |
|
Maturity Date |
||
Mortgage Indebtedness – Fixed Rate |
|
$ |
|
|
$ |
|
|
|
|
|||||
Mortgage Indebtedness – Variable Rate |
|
|
|
|
|
|
|
|
|
|||||
Net unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Total indebtedness |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||
(A) The interest rate on variable-rate debt was calculated using the base rate and spread effective at the end of each reporting period.
On August 7, 2024, the Company closed and funded a $
The following methods and assumptions were used by the Company in estimating fair value disclosures of financial instruments.
Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Other Liabilities
The carrying amounts reported in the Company’s consolidated balance sheets for these financial instruments approximated fair value because of their short-term maturities.
Debt
The following methods and assumptions were used by the Company in estimating fair value disclosures of debt. The fair market value for debt is estimated using a discounted cash flow technique that incorporates future contractual interest and principal payments and a market interest yield curve with adjustments for duration, optionality and risk profile, including the Company’s nonperformance risk and loan to value. The Company’s debt is classified as Level 3 in the fair value hierarchy. Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.
13
Carrying values that are different from estimated fair values are summarized as follows (in thousands):
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
||||
Mortgage indebtedness |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cash Flow Hedges of Interest Rate Risk
The Company may use swaps and caps as part of its interest rate risk management strategy. The swaps designated as cash flow hedges involved the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
Prior to the termination and repayment of amounts outstanding under a term loan agreement on August 15, 2024, the Company had one effective swap with a notional amount of $
All components of the swap were included in the assessment of hedge effectiveness. The Company expects to reflect a decrease to interest expense (and a corresponding increase to earnings) of approximately $
The changes in Accumulated Other Comprehensive Income by component are as follows (in thousands):
|
2025 |
|
|
Balance, December 31, 2024 |
$ |
|
|
Change in cash flow hedges |
|
( |
) |
Amounts reclassified from accumulated other comprehensive income |
|
( |
) |
Balance, September 30, 2025(A) |
$ |
|
|
(A) Includes derivative financial instruments entered into by the Company on its term loan and by an unconsolidated joint venture.
14
On October 1, 2024, the Company completed the spin-off of
|
|
Three Months Ended September 30, 2024 |
|
|
Nine Months Ended September 30, 2024 |
|
|
||
Revenue from operations: |
|
|
|
|
|
|
|
||
Rental income |
|
$ |
|
|
$ |
|
|
||
Other income |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Rental operation expenses: |
|
|
|
|
|
|
|
||
Operating and maintenance |
|
|
|
|
|
|
|
||
Real estate taxes |
|
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Other income (expense): |
|
|
|
|
|
|
|
||
Interest expense |
|
|
|
|
|
( |
) |
|
|
Transaction costs and other expense |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
( |
) |
|
|
( |
) |
|
Net (loss) income attributable to discontinued operations |
|
$ |
( |
) |
|
$ |
|
|
|
The following table summarizes non-cash flow data related to discontinued operations (in millions):
|
Nine Months Ended September 30, 2024 |
|
|
|
Accounts payable related to construction in progress |
$ |
|
|
|
Assumption of buildings due to ground lease terminations |
|
|
|
|
Recognition of below-market ground leases |
|
|
|
|
For the nine months ended September 30, 2024, capital expenditures included in discontinued operations was $
On October 1, 2024, the Company completed the spin-off of Curbline Properties. To govern certain ongoing relationships between the Company, Curbline Properties LP (the “Operating Partnership”) and Curbline Properties after the spin-off, and to provide for the allocation among the Company, the Operating Partnership and Curbline Properties of the Company’s assets, liabilities and obligations attributable to periods both prior to and following the separation of Curbline Properties and the Operating Partnership from SITE Centers, the Company, Curbline Properties and the Operating Partnership entered into agreements pursuant to which each provides certain services and has certain rights following the spin-off, and Curbline Properties, the Operating Partnership and SITE Centers indemnify each other against certain liabilities arising from their respective businesses. The Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Shared Services Agreement and other agreements governing ongoing relationships were negotiated between related parties and their terms, including fees and other amounts payable, may not be the same as if they had been negotiated at arm’s length with an unaffiliated third party.
Separation and Distribution Agreement
The Separation and Distribution Agreement contains obligations for the Company to complete certain redevelopment projects at properties that are owned by Curbline Properties. As of September 30, 2025, such redevelopment projects were estimated to cost $
In October 2024, consistent with the contractual obligations set forth in the Separation and Distribution Agreement, the Company entered into a lease agreement with Curbline pursuant to which the Company agreed to lease a portion of a property owned by Curbline in Miami, Florida for one year beginning on April 1, 2025. SITE Centers agreed to pay annual rent of $
15
Shared Services Agreement
The fair value of the services provided by the Company to Curbline Properties in excess of the fees and the fair value of the services received by the Company from Curbline Properties is reflected as $
The Shared Services Agreement provides Curbline Properties the right to use the Company’s office space in New York, New York. This arrangement is considered an embedded lease based on the criteria specified in Topic 842. The sublease income received under the Shared Services Agreement of $
Summary
For the three and nine months ended September 30, 2025, the Company recorded in Fee and other income on the Company’s consolidated statements of operations a cash fee of $
On August 16, 2024, in anticipation of the spin-off of Curbline Properties, the Company effected a reverse stock split of its outstanding common shares at a ratio of one-for-four. Additionally, equitable adjustments were made to outstanding equity compensation awards on account of the dilutive impact of the October 2024 spin-off of Curbline Properties. All share and per share data included in these consolidated financial statements give retroactive effect to the reverse stock split for all periods presented.
The following table provides a reconciliation of net income and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerators – Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing Operations: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Preferred dividends |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Earnings attributable to unvested shares |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net (loss) income attributable to common shareholders after |
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Discontinued Operations: |
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations |
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Denominators – Number of Shares |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic—Average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed conversion of dilutive securities—PRSUs |
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted—Average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
||||
From continuing operations |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
From discontinued operations |
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
||||
From continuing operations |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
From discontinued operations |
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
16
For the three and nine months ended September 30, 2024, Performance Restricted Stock Units (“PRSUs”) issued to certain executives in March 2024, March 2023 and March 2022 were considered in the computation of diluted EPS. In March 2024, the Company issued
Common Share Dividends
The Company declared special cash dividends of $
For the three and nine months ended September 30, 2025 and the nine months ended September 30, 2024, the Company recorded impairment charges aggregating $
Items Measured at Fair Value
The Company is required to assess the fair value of certain impaired consolidated investments. The valuation of impaired real estate assets is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset, as well as the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations and 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 considers multiple valuation techniques when measuring fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate.
These valuations are calculated based on market conditions and assumptions made by management at the time the valuation adjustments and impairments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.
The following table presents information about the fair value of real estate that was impaired, and therefore, measured on a fair value basis, along with the related impairment charge for the three and nine months ended September 30, 2025. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):
|
|
Fair Value Measurements |
|
|||||||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
Total |
|
|||||
September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value (dollars in millions):
|
|
Quantitative Information About Level 3 Fair Value Measurements |
||||||||
|
|
Fair Value at |
|
|
Valuation |
|
|
|
|
|
Description |
|
September 30, 2025 |
|
|
Technique |
|
Unobservable Inputs |
|
Range |
|
Impairment of consolidated assets |
|
$ |
|
|
Indicative Bid |
|
Indicative Bid(A) |
|
N/A |
|
|
|
|
|
|
Discounted Cash Flow |
|
Discount Rate |
|
||
|
|
|
|
|
|
|
Terminal Capitalization Rate |
|
||
|
|
|
|
|
Income Capitalization Approach |
|
Market Capitalization Rate(B) |
|
||
(A) Fair value measurements based upon an indicative bid and developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness. The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values.
17
(B)
In November 2025, the Company sold
On
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the financial condition, results of operations and liquidity of SITE Centers Corp. and its consolidated subsidiaries (collectively, the “Company” or “SITE Centers”) and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2024, as well as other publicly available information.
EXECUTIVE SUMMARY
The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of owning, leasing, acquiring, redeveloping and managing shopping centers. As of September 30, 2025, the Company’s portfolio consisted of 27 shopping centers (including 11 shopping centers owned through unconsolidated joint ventures). At September 30, 2025, the Company owned approximately 7.2 million square feet of gross leasable area (“GLA”) through all its shopping center properties (wholly-owned and joint venture). In addition, the Company owns two adjacent office buildings located in Beachwood, Ohio, totaling approximately 339,000 square feet of GLA, a portion of which currently serves as the Company’s headquarters.
On October 1, 2024, the Company completed the spin-off of Curbline Properties Corp. (“Curbline” or “Curbline Properties”), pursuant to which the Company contributed 79 convenience properties, $800 million of unrestricted cash and certain other assets, liabilities and obligations to Curbline Properties. The spin-off was effected pursuant to the Separation and Distribution Agreement, dated as of October 1, 2024, among the Company, Curbline, and Curbline Properties LP, a subsidiary of Curbline (the “Operating Partnership”). To govern certain ongoing relationships between the Company, Curbline and the Operating Partnership, the Company entered into a Tax Matters Agreement, an Employee Matters Agreement, a Shared Services Agreement and other agreements. The spin-off of the convenience properties represented a strategic shift in the Company’s business and, as such, the Curbline properties were considered as held for sale as of October 1, 2024, and are reflected as discontinued operations for the three and nine months ended September 30, 2024. Except as otherwise noted, operating statistics cited in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2024 have been adjusted to exclude discontinued operations and properties sold during the year ended December 31, 2024.
The following provides an overview of the Company’s key financial metrics (see Non-GAAP Financial Measures described later in this section) (in thousands, except per share amounts):
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income attributable to common shareholders |
$ |
(6,158 |
) |
|
$ |
320,164 |
|
|
$ |
43,431 |
|
|
$ |
529,279 |
|
FFO attributable to common shareholders |
$ |
3,639 |
|
|
$ |
(13,495 |
) |
|
$ |
26,598 |
|
|
$ |
78,614 |
|
Operating FFO attributable to common shareholders |
$ |
5,643 |
|
|
$ |
42,753 |
|
|
$ |
22,272 |
|
|
$ |
158,438 |
|
Earnings per share – Diluted |
$ |
(0.13 |
) |
|
$ |
6.07 |
|
|
$ |
0.80 |
|
|
$ |
10.03 |
|
For the nine months ended September 30, 2025, the decrease in net income, as compared to the prior-year period, primarily was the result of an increase in impairment charges, lower gains from dispositions of real estate recognized in 2025 as compared to the prior-year period, a decrease in rental income due to net property dispositions and the Curbline spin-off in 2024 and a decrease in interest income, partially offset by a decrease in the write-off of fees related to a mortgage financing commitment, Curbline transaction costs, interest expense, preferred dividend expense and an increase in fee and other income.
SITE Centers Strategy
From July 1, 2023 to December 31, 2024, the Company generated approximately $3.1 billion of gross proceeds from sales of properties for the purpose of acquiring additional convenience properties, capitalizing Curbline and, together with proceeds from the closing and funding of a $530.0 million mortgage loan (the “Mortgage Facility”), redeeming and/or repaying all of the Company’s outstanding unsecured indebtedness and preferred shares. As of November 5, 2025, the Company had generated approximately $380.9 million of additional gross proceeds from the sale of seven shopping centers during 2025, of which approximately $60.4 million was used to repay indebtedness outstanding under the Mortgage Facility. As of November 5, 2025, the Company had also entered into agreements to sell five properties for an aggregate sales price of approximately $292.1 million (subject to adjustment for certain closing pro-rations, allocations, credits and closing costs and prior to the required repayment of approximately $160.8 million of related mortgage indebtedness and payment of an estimated make-whole premium of approximately $7.3 million) for which the buyers’ general due diligence periods had expired. These transactions are expected to close in the fourth quarter of 2025. The
19
Company is also in various stages of marketing or contract negotiations for the sale of several other properties, though no assurances can be given that such efforts will result in additional asset sales, particularly in light of the dynamic interest rate environment and uncertain capital markets and economic conditions.
Going forward, the Company intends to realize value through operations and to consider various factors, including market conditions and differences between the public and private valuations of its portfolio, in evaluating when to pursue additional asset sales. The timing of any additional sales may also be impacted by interim leasing, tactical redevelopment activities and other asset management initiatives intended to maximize value. The Company generally expects to use proceeds from any additional asset sales to fund operations, repay outstanding indebtedness where applicable and make distributions to shareholders.
The Company expects that rental income and net operating income will decrease in future periods as compared to corresponding prior year periods as a result of the spin-off of Curbline, the significant volume of dispositions completed in 2024 and 2025 and the impact of tenant bankruptcies. The Company expects that its future dividend policy will be influenced by operations and asset sales, though the Company’s distribution of any sale proceeds to shareholders will be subject to collateral release and repayment requirements set forth in the terms of the Company’s indebtedness and management of liquidity and overall leverage levels in connection with ongoing operations.
Growth opportunities within the Company’s portfolio include rental rate increases, continued lease-up of the portfolio, and rent commencement with respect to recently executed leases.
Transaction and Investment Highlights
Transaction and investment highlights through November 5, 2025 include the following:
Operational Accomplishments
Operational highlights for the Company through September 30, 2025, include the following (excluding discontinued operations and properties sold in 2024):
The comparability of year-over-year and period-over-period operating metrics has been increasingly impacted by the level and composition of the Company’s disposition activities and the reduced size of the Company’s portfolio.
20
RESULTS OF OPERATIONS
The spin-off of Curbline Properties in October 2024 represented a strategic shift in the Company’s business and, as such, the Curbline properties are reflected in the financial results as discontinued operations for all periods presented. Consolidated shopping center properties owned as of January 1, 2024, are referred to herein as the “Comparable Portfolio Properties.”
Revenues from Operations (in thousands)
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Rental income(A) |
$ |
24,203 |
|
|
$ |
59,441 |
|
|
$ |
(35,238 |
) |
Fee and other income(B) |
|
2,897 |
|
|
|
1,559 |
|
|
|
1,338 |
|
Total revenues |
$ |
27,100 |
|
|
$ |
61,000 |
|
|
$ |
(33,900 |
) |
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Rental income(A) |
$ |
86,315 |
|
|
$ |
236,703 |
|
|
$ |
(150,388 |
) |
Fee and other income(B) |
|
16,878 |
|
|
|
5,864 |
|
|
|
11,014 |
|
Total revenues |
$ |
103,193 |
|
|
$ |
242,567 |
|
|
$ |
(139,374 |
) |
|
|
Three Months |
|
|
|
|
||||||
|
|
Ended September 30, |
|
|
|
|
||||||
Contractual Lease Payments |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Base and percentage rental income |
|
$ |
17,784 |
|
|
$ |
43,141 |
|
|
$ |
(25,357 |
) |
Recoveries from tenants |
|
|
5,928 |
|
|
|
15,409 |
|
|
|
(9,481 |
) |
Uncollectible revenue |
|
|
153 |
|
|
|
128 |
|
|
|
25 |
|
Lease termination fees, ancillary and other rental income |
|
|
338 |
|
|
|
763 |
|
|
|
(425 |
) |
Total contractual lease payments |
|
$ |
24,203 |
|
|
$ |
59,441 |
|
|
$ |
(35,238 |
) |
|
|
Nine Months |
|
|
|
|
||||||
|
|
Ended September 30, |
|
|
|
|
||||||
Contractual Lease Payments |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Base and percentage rental income(1) |
|
$ |
62,684 |
|
|
$ |
170,008 |
|
|
$ |
(107,324 |
) |
Recoveries from tenants(2) |
|
|
22,230 |
|
|
|
61,959 |
|
|
|
(39,729 |
) |
Uncollectible revenue |
|
|
273 |
|
|
|
592 |
|
|
|
(319 |
) |
Lease termination fees, ancillary and other rental income(3) |
|
|
1,128 |
|
|
|
4,144 |
|
|
|
(3,016 |
) |
Total contractual lease payments |
|
$ |
86,315 |
|
|
$ |
236,703 |
|
|
$ |
(150,388 |
) |
|
|
Increase (Decrease) |
|
|
Acquisition of shopping centers |
|
$ |
0.7 |
|
Comparable Portfolio Properties |
|
|
0.3 |
|
Disposition of shopping centers |
|
|
(106.6 |
) |
Straight-line rents |
|
|
(1.7 |
) |
Total |
|
$ |
(107.3 |
) |
At September 30, 2025 and 2024, the Company owned 16 and 22 wholly-owned shopping center properties, respectively, with an aggregate occupancy rate of 86.0% and 89.7%, respectively, and average annualized base rent per occupied square foot of $19.80 and $19.78, respectively. The decrease in occupancy rate was primarily due to transactional activity.
21
Expenses from Operations (in thousands)
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Operating and maintenance |
$ |
5,505 |
|
|
$ |
10,537 |
|
|
$ |
(5,032 |
) |
Real estate taxes |
|
3,895 |
|
|
|
8,859 |
|
|
|
(4,964 |
) |
Impairment charges |
|
106,570 |
|
|
|
— |
|
|
|
106,570 |
|
General and administrative |
|
10,295 |
|
|
|
17,179 |
|
|
|
(6,884 |
) |
Depreciation and amortization |
|
10,768 |
|
|
|
23,228 |
|
|
|
(12,460 |
) |
|
$ |
137,033 |
|
|
$ |
59,803 |
|
|
$ |
77,230 |
|
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Operating and maintenance(A) |
$ |
19,094 |
|
|
$ |
39,533 |
|
|
$ |
(20,439 |
) |
Real estate taxes(A) |
|
13,306 |
|
|
|
35,749 |
|
|
|
(22,443 |
) |
Impairment charges(B) |
|
106,570 |
|
|
|
66,600 |
|
|
|
39,970 |
|
General and administrative(C) |
|
29,108 |
|
|
|
45,603 |
|
|
|
(16,495 |
) |
Depreciation and amortization(A) |
|
36,941 |
|
|
|
88,284 |
|
|
|
(51,343 |
) |
|
$ |
205,019 |
|
|
$ |
275,769 |
|
|
$ |
(70,750 |
) |
|
|
Operating |
|
|
Real Estate |
|
|
Depreciation |
|
|||
Acquisition of shopping centers |
|
$ |
0.2 |
|
|
$ |
0.2 |
|
|
$ |
0.3 |
|
Comparable Portfolio Properties |
|
|
(0.3 |
) |
|
|
0.2 |
|
|
|
(3.0 |
) |
Disposition of shopping centers |
|
|
(20.3 |
) |
|
|
(22.8 |
) |
|
|
(48.6 |
) |
|
|
$ |
(20.4 |
) |
|
$ |
(22.4 |
) |
|
$ |
(51.3 |
) |
22
Other Income and Expenses (in thousands)
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Interest expense |
$ |
(3,975 |
) |
|
$ |
(16,706 |
) |
|
$ |
12,731 |
|
Interest income |
|
1,411 |
|
|
|
14,002 |
|
|
|
(12,591 |
) |
Gain on derivative instruments |
|
— |
|
|
|
754 |
|
|
|
(754 |
) |
Debt extinguishment costs |
|
(576 |
) |
|
|
(32,559 |
) |
|
|
31,983 |
|
Transaction costs and other expense |
|
(797 |
) |
|
|
(217 |
) |
|
|
(580 |
) |
|
$ |
(3,937 |
) |
|
$ |
(34,726 |
) |
|
$ |
30,789 |
|
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Interest expense(A) |
$ |
(14,854 |
) |
|
$ |
(53,629 |
) |
|
$ |
38,775 |
|
Interest income(B) |
|
2,494 |
|
|
|
29,845 |
|
|
|
(27,351 |
) |
Debt extinguishment costs(C) |
|
(1,080 |
) |
|
|
(42,822 |
) |
|
|
41,742 |
|
Gain on debt retirement(D) |
|
— |
|
|
|
1,037 |
|
|
|
(1,037 |
) |
Loss on derivative instruments(E) |
|
— |
|
|
|
(4,412 |
) |
|
|
4,412 |
|
Transaction costs and other expense(F) |
|
(2,923 |
) |
|
|
(743 |
) |
|
|
(2,180 |
) |
|
$ |
(16,363 |
) |
|
$ |
(70,724 |
) |
|
$ |
54,361 |
|
|
|
Nine Months |
|
|||||
|
|
Ended September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Weighted-average debt outstanding (in billions) |
|
$ |
0.3 |
|
|
$ |
1.3 |
|
Weighted-average interest rate |
|
|
6.1 |
% |
|
|
5.2 |
% |
In 2024, the Company simplified its debt structure. As of September 30, 2025, the Company’s consolidated indebtedness consisted of two outstanding mortgages (the Mortgage Facility and a mortgage loan encumbering Nassau Park Pavilion) with an aggregate outstanding balance of $251.3 million and a weighted average interest rate (based on contractual rates and excluding amortization of debt issuance costs) of 6.8% at September 30, 2025. At September 30, 2025, the weighted-average maturity (without extensions) was 1.8 years.
23
Other Items (in thousands)
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Equity in net (loss) income of joint ventures |
$ |
(499 |
) |
|
$ |
328 |
|
|
$ |
(827 |
) |
Gain on disposition of real estate, net |
|
108,401 |
|
|
|
368,139 |
|
|
|
(259,738 |
) |
Tax expense of taxable REIT subsidiary and state franchise and |
|
(190 |
) |
|
|
(199 |
) |
|
|
9 |
|
Loss from discontinued operations |
|
— |
|
|
|
(11,786 |
) |
|
|
11,786 |
|
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Equity in net (loss) income of joint ventures(A) |
$ |
(528 |
) |
|
$ |
406 |
|
|
$ |
(934 |
) |
Gain on sale and change in control of interest(B) |
|
— |
|
|
|
2,669 |
|
|
|
(2,669 |
) |
Gain on disposition of real estate, net(C) |
|
162,666 |
|
|
|
633,169 |
|
|
|
(470,503 |
) |
Tax expense of taxable REIT subsidiary and state franchise and |
|
(518 |
) |
|
|
(732 |
) |
|
|
214 |
|
Income from discontinued operations(D) |
|
— |
|
|
|
6,060 |
|
|
|
(6,060 |
) |
Net Income (in thousands)
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Net (loss) income attributable to common shareholders |
$ |
(6,158 |
) |
|
$ |
320,164 |
|
|
$ |
(326,322 |
) |
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Net income attributable to common shareholders |
$ |
43,431 |
|
|
$ |
529,279 |
|
|
$ |
(485,848 |
) |
The decrease in net income, as compared to the prior-year period, primarily was the result of an increase in impairment charges, lower gains from dispositions of real estate recognized in 2025 as compared to the prior-year period, a decrease in rental income due to net property dispositions and the Curbline spin-off in 2024 and a decrease in interest income, partially offset by a decrease in the write-off of fees related to a mortgage financing commitment, Curbline transaction costs, interest expense, preferred dividend expense and an increase in fee and other income.
24
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, and equity income (loss) from joint ventures and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by the National Association of Real Estate Investment Trusts ("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/losses that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio. Such adjustments include gains/losses on the early extinguishment of debt, certain transaction fee income, transaction costs and other restructuring type costs, including employee separation 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
25
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):
|
Three Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
FFO attributable to common shareholders |
$ |
3,639 |
|
|
$ |
(13,495 |
) |
|
$ |
17,134 |
|
Operating FFO attributable to common shareholders |
|
5,643 |
|
|
|
42,753 |
|
|
|
(37,110 |
) |
|
Nine Months |
|
|
|
|
||||||
|
Ended September 30, |
|
|
|
|
||||||
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
FFO attributable to common shareholders |
$ |
26,598 |
|
|
$ |
78,614 |
|
|
$ |
(52,016 |
) |
Operating FFO attributable to common shareholders |
|
22,272 |
|
|
|
158,438 |
|
|
|
(136,166 |
) |
The decrease in FFO for the nine months ended September 30, 2025, as compared to the prior-year period, was primarily attributable to lower NOI as a result of property dispositions and the spin-off of Curbline Properties and lower interest income, partially offset by increased fee and other income, decreased interest expense and preferred dividend expense and decreased debt related charges. The decrease in Operating FFO was primarily due to the spin-off of Curbline Properties, lower NOI as a result of property dispositions and lower interest income, partially offset by decreased interest expense, no preferred dividend expense and decreased debt related charges.
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:
|
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income attributable to common shareholders |
|
$ |
(6,158 |
) |
|
$ |
320,164 |
|
|
$ |
43,431 |
|
|
$ |
529,279 |
|
Depreciation and amortization of real estate investments |
|
|
9,716 |
|
|
|
22,230 |
|
|
|
34,184 |
|
|
|
84,720 |
|
Equity in net income (loss) of joint ventures |
|
|
499 |
|
|
|
(328 |
) |
|
|
528 |
|
|
|
(406 |
) |
Joint ventures’ FFO(A) |
|
|
1,413 |
|
|
|
1,555 |
|
|
|
4,551 |
|
|
|
4,703 |
|
Discontinued operations’ depreciation |
|
|
— |
|
|
|
11,023 |
|
|
|
— |
|
|
|
29,556 |
|
Impairment of real estate |
|
|
106,570 |
|
|
|
— |
|
|
|
106,570 |
|
|
|
66,600 |
|
Gain on sale and change in control of interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,669 |
) |
Gain on disposition of real estate, net |
|
|
(108,401 |
) |
|
|
(368,139 |
) |
|
|
(162,666 |
) |
|
|
(633,169 |
) |
FFO attributable to common shareholders |
|
|
3,639 |
|
|
|
(13,495 |
) |
|
|
26,598 |
|
|
|
78,614 |
|
Gain on debt retirement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,037 |
) |
Discontinued operations’ transaction and other costs |
|
|
— |
|
|
|
23,628 |
|
|
|
— |
|
|
|
30,850 |
|
Debt extinguishment, transaction and other (at SITE Centers’ share)(B) |
|
|
642 |
|
|
|
32,025 |
|
|
|
2,016 |
|
|
|
48,191 |
|
Condemnation revenue |
|
|
— |
|
|
|
— |
|
|
|
(8,379 |
) |
|
|
— |
|
Separation and other charges |
|
|
1,362 |
|
|
|
595 |
|
|
|
2,037 |
|
|
|
1,820 |
|
Non-operating items, net |
|
|
2,004 |
|
|
|
56,248 |
|
|
|
(4,326 |
) |
|
|
79,824 |
|
Operating FFO attributable to common shareholders |
|
$ |
5,643 |
|
|
$ |
42,753 |
|
|
$ |
22,272 |
|
|
$ |
158,438 |
|
26
(A) At September 30, 2025 and 2024, the Company had an economic investment in unconsolidated joint ventures which owned 11 shopping center properties. 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):
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income attributable to unconsolidated joint ventures |
$ |
(1,639 |
) |
|
$ |
985 |
|
|
$ |
(1,424 |
) |
|
$ |
7,164 |
|
Depreciation and amortization of real estate investments |
|
6,826 |
|
|
|
6,383 |
|
|
|
19,210 |
|
|
|
20,313 |
|
Gain on disposition of real estate, net |
|
— |
|
|
|
(1,968 |
) |
|
|
(1 |
) |
|
|
(10,365 |
) |
FFO |
$ |
5,187 |
|
|
$ |
5,400 |
|
|
$ |
17,785 |
|
|
$ |
17,112 |
|
FFO at SITE Centers’ ownership interests |
$ |
1,413 |
|
|
$ |
1,555 |
|
|
$ |
4,551 |
|
|
$ |
4,703 |
|
Operating FFO at SITE Centers’ ownership interests |
$ |
1,413 |
|
|
$ |
1,555 |
|
|
$ |
4,551 |
|
|
$ |
4,892 |
|
(B) For the three and nine months ended September 30, 2024, includes $32.6 million and $42.8 million, respectively, of debt extinguishment costs.
LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES
The Company requires capital to fund its operating expenses, capital expenditures and obligations. The Company’s primary capital sources include cash flow from operations, debt financings and proceeds from asset sales. The Company remains committed to monitoring the duration of its indebtedness, to maintaining prudent leverage levels in an effort to manage its overall risk profile while maintaining strategic flexibility and to closely monitoring liquidity and its cash position following the termination of its revolving credit facility in August 2024.
As of September 30, 2025, the Company had $251.3 million aggregate principal amount of consolidated indebtedness outstanding consisting of the Mortgage Facility secured by 10 assets having an outstanding principal balance of $152.6 million and a mortgage loan secured by Nassau Park Pavilion having an outstanding principal balance of $98.7 million. As a result of asset sales and related loan repayments consummated subsequent to quarter-end, as of November 5, 2025, the Mortgage Facility had an outstanding principal balance of $146.5 million and was secured by nine assets. In addition, as of September 30, 2025, the Company’s unconsolidated joint ventures had $441.0 million of indebtedness ($106.2 million at SITE Centers’ share).
The Company’s consolidated and unconsolidated debt obligations generally require monthly payments of principal and/or interest over the term of the obligation. While the Company currently believes it may be able to obtain additional debt financing in order to fund its business, 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 expects that operating expenses, redevelopment obligations and capital expenditures will generally be financed through cash provided from operating activities and asset sales. At September 30, 2025, the Company had an unrestricted cash balance of $128.2 million, of which approximately $52.7 million will be used in November 2025 to pay the special cash dividend of $1.00 per common share announced in October 2025. As of September 30, 2025, the Company anticipates that it has approximately $28.4 million to be incurred to complete redevelopment projects at properties owned by Curbline pursuant to the terms of the Separation and Distribution Agreement. The Company believes it has sufficient liquidity to operate its business at this time.
Unconsolidated Joint Ventures’ Mortgage Indebtedness – as of September 30, 2025
The outstanding indebtedness of the Company’s unconsolidated joint ventures at September 30, 2025, which matures in the subsequent 13-month period (i.e., through October 2026), consists of $60.4 million ($30.0 million at SITE Centers’ share) which can be extended in accordance with the loan documents.
No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Any future deterioration in property-level revenues may cause the Company or one or both of its 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 or challenged
27
transaction markets may adversely impact the ability of the Company or its 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):
|
Nine Months |
|
|||||
|
Ended September 30, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Cash flow provided by operating activities |
$ |
28,084 |
|
|
$ |
143,199 |
|
Cash flow provided by investing activities |
|
348,712 |
|
|
|
1,849,963 |
|
Cash flow used for financing activities |
|
(306,144 |
) |
|
|
(1,478,067 |
) |
Changes in cash flow for the nine months ended September 30, 2025, compared to the prior comparable period, are as follows:
Operating Activities: Cash provided by operating activities decreased $115.1 million primarily due to changes in working capital from disposition activity and a decrease in interest income partially offset by an increase in fee and other income related to the condemnation proceeds.
Investing Activities: Cash provided by investing activities decreased $1,501.3 million primarily due to the following:
Financing Activities: Cash used for financing activities decreased $1,171.9 million primarily due to the following:
Dividend Distribution
The Company declared special cash common dividends of $250.3 million during the nine months ended September 30, 2025. The Company declared common and preferred cash dividends of $63.1 million for the nine months ended September 30, 2024.
On October 21, 2025, the Company announced a special cash dividend of $1.00 per common share (approximately $52.7 million in the aggregate) to be paid on November 14, 2025.
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. The Company does not currently expect to make regular quarterly dividend payments in the future. Instead, the Company intends to pursue a dividend policy of retaining sufficient free cash flow to support the Company’s capital needs while still adhering to REIT payout requirements and minimizing federal income taxes. The Company expects that the frequency and timing of future dividends will be influenced by operations and asset sales, though the Company’s distribution of any sale proceeds to shareholders will be subject to collateral release and repayment requirements set forth in the terms of the Company’s indebtedness and prudent management of liquidity and overall leverage levels in connection with ongoing operations. The Company is required by the Internal Revenue Code of 1986, as amended, to distribute at least 90% of its REIT taxable income; however, there can be no assurances as to the timing and amounts of future dividends.
SITE Centers’ Equity
In 2022, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company is authorized to repurchase up to a maximum value of $100 million of its common shares. Through September 30, 2025, the Company had repurchased 0.5 million of its common shares in open market transactions under this program at an aggregate cost of approximately $26.6 million.
28
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 while maintaining strategic flexibility. Asset sales, cash flow from operations and debt financings continue to represent potential sources of proceeds to be used to achieve these objectives.
As of November 5, 2025, the Company had entered into agreements to sell five properties for an aggregate sales price of approximately $292.1 million (subject to adjustment for certain closing pro-rations, allocations, credits and closing costs and prior to the required repayment of approximately $160.8 million of related mortgage indebtedness and payment of an estimated make-whole premium of approximately $7.3 million) for which the buyers’ general due diligence periods had expired. These transactions are expected to close in the fourth quarter of 2025. The Company is in various stages of marketing or contract negotiations for the sale of several other properties, though no assurances can be given that such efforts will result in additional asset sales, particularly in light of the dynamic interest rate environment and uncertain capital markets and economic conditions.
Going forward, the Company intends to realize value through operations and to consider various factors, including market conditions and differences between the public and private valuations of its portfolio, in evaluating when to pursue additional asset sales. The timing of any additional sales may also be impacted by interim leasing, tactical redevelopment activities and other asset management initiatives intended to maximize value. The Company generally expects to use proceeds from any additional asset sales to fund operations, repay outstanding indebtedness where applicable and make distributions to shareholders.
Dispositions
From January 1, 2025 through November 5, 2025, the Company sold the following wholly-owned shopping centers (in thousands):
Date Sold |
|
Property Name |
|
City, State |
|
Total Owned GLA |
|
|
Gross |
|
||
June 2025 |
|
The Promenade at Brentwood |
|
Brentwood, MO |
|
|
338 |
|
|
$ |
71,600 |
|
June 2025 |
|
Chapel Hills West |
|
Colorado Springs, CO |
|
|
225 |
|
|
|
23,650 |
|
July 2025 |
|
Sandy Plain Village |
|
Roswell, GA |
|
|
174 |
|
|
|
25,000 |
|
August 2025 |
|
Deer Valley Towne Center |
|
Phoenix, AZ |
|
|
152 |
|
|
|
33,725 |
|
August 2025 |
|
Winter Garden Village |
|
Winter Garden, FL |
|
|
629 |
|
|
|
165,000 |
|
September 2025 |
|
Edgewater Towne Center |
|
Edgewater, NJ |
|
|
76 |
|
|
|
53,500 |
|
November 2025 |
|
Parker Pavilions |
|
Parker, CO |
|
|
51 |
|
|
|
8,425 |
|
|
|
|
|
|
|
|
1,645 |
|
|
$ |
380,900 |
|
Redevelopment Projects
The Company selectively evaluates additional tactical redevelopment potential within the portfolio, particularly as it relates to the efficient use of the underlying real estate, which includes expanding, improving and re-tenanting various properties. The Company generally expects to commence construction on redevelopment projects only after substantial tenant leasing has occurred. At September 30, 2025, the Company had approximately $4.4 million in construction in progress in various active re-tenanting projects at Company-owned properties. At September 30, 2025, the estimated cost to complete redevelopment projects at properties owned by Curbline pursuant to the terms of the Separation and Distribution Agreement was approximately $28.4 million.
CAPITALIZATION
At September 30, 2025, the Company’s capitalization consisted of $251.3 million of debt and $472.5 million of market equity (calculated as the common shares outstanding multiplied by $9.01, the closing price of the Company’s common shares on the New York Stock Exchange at September 30, 2025, the last trading day of September 2025).
In July 2024, the Company announced a one-for-four reverse stock split of its common shares. Split-adjusted trading began on the New York Stock Exchange at the opening of trading on August 19, 2024.
Management seeks 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 financings or asset sales. In connection with the spin-off of Curbline, the Company used proceeds from the Mortgage Facility together with proceeds from asset sales to repay all of the Company’s outstanding unsecured indebtedness and therefore no longer maintains a revolving line of credit or an investment grade rating. The Company may not be able to obtain financing on favorable terms, or at all.
29
The Mortgage Facility contains certain operating and financial covenants, including net worth and liquidity requirements, and includes provisions that could restrict the Company’s access and use of rent collections from mortgaged properties in the event the debt yield falls below a certain threshold or an event of default occurs. 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 Mortgage Facility permits the acceleration of maturity and foreclosure in the event of breaches of affirmative or negative covenants. 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 no consolidated debt maturing in 2025. The Company expects to fund future maturities from cash on hand, proceeds from asset sales, cash flow from operations and/or additional debt financings. No assurance can be provided that these obligations will be repaid as currently anticipated or refinanced.
In conjunction with the re-tenanting of vacancies at its shopping centers, the Company had entered into commitments with general contractors aggregating approximately $0.3 million for its properties (excluding Curbline redevelopment activities noted below) as of September 30, 2025. 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 cash on hand, operating cash flows or asset sales. These contracts typically can be changed or terminated without penalty.
In connection with the sale of two properties in 2024, the Company guaranteed additional construction costs to complete re-tenanting work at the properties and deferred maintenance, all of which were recorded as a liability. As of September 30, 2025, the Company had a liability of approximately $0.9 million. The amount is recorded in Accounts payable and other liabilities on the Company’s consolidated balance sheets.
Additionally, the Separation and Distribution Agreement contains obligations to complete certain redevelopment projects at properties that are owned by Curbline. As of September 30, 2025, such redevelopment projects were estimated to cost $28.4 million to complete.
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 September 30, 2025, the Company had purchase order obligations, typically payable within one year, aggregating approximately $0.4 million related to the maintenance of its properties and general and administrative expenses.
ECONOMIC CONDITIONS
The Company continues to experience retailer demand which it believes is attributable to the location of many of the Company’s properties in communities experiencing population growth, limited new construction of competing retail properties and tenants’ continuing use of physical store locations to improve the speed and efficiency of merchandise distribution.
The Company benefits from a diversified tenant base, where only five tenants’ annualized base rent equals or exceeds 3% of the Company’s annualized base rent plus the Company’s proportionate share of unconsolidated joint venture annualized base rent. 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 that 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 has relatively little reliance on overage or percentage rents generated by tenant sales performance.
The threat of increasing inflation, changing interest rates, uncertainty over tariff policy, concerns over consumer confidence and the volatility of global capital markets pose risks to the U.S. economy, retail sales, and the Company’s tenants. In addition to these macroeconomic challenges, the retail sector has been affected by changing consumer behaviors, including the competitive nature of the retail business and the competition for the share of the consumer wallet. The Company routinely monitors the credit profiles of its tenants and analyzes the 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 launch new concepts and expand their store fleets in communities with attractive demographics. As a result, the Company believes that its prospects (and the prospects of purchasers of it properties) to backfill spaces vacated by non-renewing or bankrupt tenants are generally good, though such re-tenanting efforts would likely require additional capital expenditures and the
30
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 or the valuation of its properties.
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 (the “Exchange Act”), both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to dispositions 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 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
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:
31
32
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s primary market risk exposure is interest rate risk. At September 30, 2025, the Company’s debt, excluding unconsolidated joint venture debt and the impact of the reclassification from accumulated other comprehensive income to interest expense related to the terminated interest rate swap, is summarized as follows:
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||||||||||
|
Amount |
|
|
Weighted- |
|
|
Weighted- |
|
|
Percentage |
|
|
Amount |
|
|
Weighted- |
|
|
Weighted- |
|
|
Percentage |
|
||||||||
Fixed-Rate Debt |
$ |
97.5 |
|
|
|
3.1 |
|
|
|
6.7 |
% |
|
|
39.2 |
% |
|
$ |
98.5 |
|
|
|
3.8 |
|
|
|
6.7 |
% |
|
|
32.7 |
% |
Variable-Rate Debt |
$ |
151.2 |
|
|
|
0.9 |
|
|
|
6.9 |
% |
|
|
60.8 |
% |
|
$ |
202.9 |
|
|
|
1.7 |
|
|
|
7.1 |
% |
|
|
67.3 |
% |
The Company’s unconsolidated joint ventures’ indebtedness at its carrying value is summarized as follows:
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||||||||||
|
Joint |
|
|
Company's |
|
|
Weighted- |
|
|
Weighted- |
|
|
Joint |
|
|
Company's |
|
|
Weighted- |
|
|
Weighted- |
|
||||||||
Fixed-Rate Debt |
$ |
368.3 |
|
|
$ |
73.6 |
|
|
|
3.3 |
|
|
|
6.4 |
% |
|
$ |
365.4 |
|
|
$ |
73.1 |
|
|
|
4.0 |
|
|
|
6.4 |
% |
Variable-Rate Debt |
$ |
60.4 |
|
|
$ |
30.0 |
|
|
|
1.2 |
|
|
|
5.0 |
% |
|
$ |
61.0 |
|
|
$ |
30.3 |
|
|
|
0.9 |
|
|
|
5.0 |
% |
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 September 30, 2025, would result in an increase in interest expense of approximately $1.1 million for the Company for the nine months ended September 30, 2025.
The Company intends to use retained cash flow, proceeds from asset sales, and debt financing 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.
33
An estimate of the fair value for the effect of a 100 basis-point increase in interest rates at September 30, 2025 and December 31, 2024, is summarized as follows (in millions):
|
September 30, 2025 |
|
|
|
December 31, 2024 |
|
|
||||||||||||||||||
|
Carrying |
|
|
Fair |
|
|
100 Basis-Point |
|
|
|
Carrying |
|
|
Fair |
|
|
100 Basis-Point |
|
|
||||||
Company’s fixed-rate debt |
$ |
97.5 |
|
|
$ |
102.2 |
|
|
$ |
99.5 |
|
|
|
$ |
98.5 |
|
|
$ |
102.3 |
|
|
$ |
99.1 |
|
|
Company’s proportionate share |
$ |
73.6 |
|
|
$ |
75.4 |
|
|
$ |
73.3 |
|
|
|
$ |
73.1 |
|
|
$ |
73.5 |
|
|
$ |
71.1 |
|
|
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.
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 debt financings. 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 September 30, 2025, the Company had no other material exposure to market risk.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure and Control 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 the end of the period covered by this Quarterly Report on Form 10-Q 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 Securities and Exchange Commission rules and forms and were effective as of the end of such period 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.
Changes in Internal Control over Financial Reporting
In August 2025, the Company completed the implementation of a new accounting software system. As part of this implementation, the Company updated its internal controls over financial reporting to address changes in business processes resulting from the new system. The design of this application, along with the design of the internal controls included in the Company’s processes, was appropriately evaluated by management for effectiveness.
Other than as noted above, there have not been any changes in the Company’s internal control over financial reporting during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
34
PART II
OTHER INFORMATION
Item 1. 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 1A. RISK FACTORS
None.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ISSUER PURCHASES OF EQUITY SECURITIES
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
(d) |
|
||||
|
Total |
|
|
Average |
|
|
Total Number |
|
|
Maximum Number |
|
||||
July 1–31, 2025 |
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
August 1–31, 2025 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
September 1–30, 2025 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
73.4 |
|
On December 20, 2022, the Company announced that its Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company is authorized to repurchase up to a maximum value of $100.0 million of its common shares. As of September 30, 2025, the Company had repurchased 0.5 million of its common shares in open market purchases under this program at an aggregate cost of approximately $26.6 million.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
35
Item 6. EXHIBITS
10.1 |
|
|
|
|
|
10.2 |
|
|
|
|
|
10.3 |
|
|
|
|
|
10.4 |
|
|
|
|
|
31.1 |
|
|
|
|
|
31.2 |
|
|
|
|
|
32.1 |
|
|
|
|
|
32.2 |
|
|
|
|
|
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 document1 |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Document1 |
|
|
|
104 |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 has been formatted in Inline XBRL and included in Exhibit 101. |
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (ii) Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024, (iii) Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024, (iv) Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2025 and 2024, (v) Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 and (vi) Notes to Condensed Consolidated Financial Statements.
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
SITE CENTERS CORP. |
||||
|
|
|
|
|||
|
|
By: |
|
/s/ Jeffrey A. Scott |
||
|
|
|
|
Name: |
|
Jeffrey A. Scott |
|
|
|
|
Title: |
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
Date: November 5, 2025 |
|
|
|
|
|
|
37