Inventrust Properties (IVT) Nareit REIT Week: 2024 Investor Conference summary

Portfolio strategy and market positioning

• Owns 63 open-air necessity-based shopping centers, primarily in Sun Belt markets, with Austin as the largest market at 17% of income.

• Over 85% of centers have a grocery component, driving traffic and demand for small shop spaces.

• Leased occupancy is near all-time highs at 96.3%, with economic occupancy at 93.4%, indicating $8 million in potential income growth.

• Maintains a simple, focused portfolio and capital structure, with under 5x net debt to EBITDA and under 30% net leverage.

• Clustering assets in key markets enhances operational efficiency; Phoenix is targeted for further clustering.

Growth plans and capital allocation

• Modest 2024 growth plan with $75 million in net investment activity, nearly achieved by mid-year.

• Pipeline includes $500 million in potential acquisitions, focusing on stabilized, grocery-anchored Sun Belt assets with low-to-mid 6% cap rates and unlevered IRRs in the 7s.

• Selective acquisitions, prioritizing strategic fit and cost of capital; growth beyond $75 million likely funded by non-core asset dispositions.

• Platform can support doubling portfolio size in 3-5 years without significant cost increases, but growth will be paced by capital market conditions.

• Non-core assets in Maryland may be sold to fund acquisitions in clustered markets.

Leasing environment and tenant demand

• Strong tenant demand with a shortage of space; tenants now planning leases out to 2026 and beyond.

• No major distressed tenants; flexibility from larger tenants on space requirements.

• Construction of new supply is limited by high labor costs, likely sustaining supply-demand imbalance for 2-3 years.

• Watch list tenants represent only 4-5% of the portfolio, with minimal near-term risk.