RETL VALU The Company was formed in
EXECUTIVE SUMMARY
The Company remains focused on realizing value through the sale of its remaining property and the collection of its accounts receivable, the proceeds of which are expected to be used to fund a reserve account from which the Company will pay expenses and claims in connection with the winding up of its operations and make distributions to the Company's common shareholders. See discussion below under "Liquidity, Capital Resources and Financing Activities - Winding up and Dissolution."
COVID-19
In
The pandemic also had a significant impact on transaction markets and the level
of the Company's disposition activity during the remainder of 2020. Although the
level and pace of tenant collections and dispositions improved significantly
during 2021, the Company's ability to sell its remaining property and collect
rents and collection of all of its other accounts receivable may be negatively
impacted by additional surges in COVID-19 contagion, the emergence of new
COVID-19 variants which are more infectious or resistant to existing vaccines,
decreases in the effectiveness of such vaccines and any implementation of
additional restrictions on tenant business as a result thereof. As of
Transaction Highlights
During 2021, the Company completed the following transactions:
• Sold 10 continental U.S. properties for an aggregate sales price of $358.7
million , which included a five-property portfolio transaction in October
2021 for $264.0 million .
• Sold the Company's remaining interests in all 11 Puerto Rico properties for
$574.9 million , which included a nine-property portfolio transaction for
$550.0 million in August 2021 (all Puerto Rico operating results reflected
as "discontinued operations" on a retrospective basis).
• Repaid the outstanding balance on its mortgage loan, which resulted in the
release of all restricted cash balances to the Company by the loan's
servicer, as well as the termination of the Revolving Credit Agreement.
• In October 2021 , made a distribution on the Company's Series A Preferred
Shares (the "RVI Preferred Shares") in the aggregate amount of $190.0
million , and in December 2021 the Company repurchased all of the
outstanding RVI Preferred Shares from SITE Centers for an aggregate
purchase price of $1.00 .
• In October 2021 , paid a cash dividend of $22.04 per common share, and in
January 2022 paid a cash dividend of $3.27 per common share.
21
--------------------------------------------------------------------------------
From its formation in
Total Owned Gross
Date Sold Property Name City, State GLA Sales Price
04/17/18 Silver Spring Square Mechanicsburg, PA 343 $ 80,810 (1)
The Walk at Highwoods
06/27/18 Preserve Tampa, FL 138 25,025 (1)
07/06/18 Tequesta Shoppes Tequesta, FL 110 14,333
07/10/18 Lake Walden Square Plant City, FL 245 29,000
08/01/18 East Lloyd Commons Evansville, IN 160 23,000
08/13/18 Grandville Marketplace Grandville, MI 224 16,700
08/29/18 Brandon Blvd Shoppes Valrico, FL 86 14,650
09/14/18 Gresham Station Gresham, OR 342 64,500
10/18/18 Palm Valley Pavilions West Goodyear, AZ 233 44,800
International Drive Value
11/13/18 Center Orlando, FL 186 26,157
11/20/18 Douglasville Pavilion Atlanta, GA 266 35,120
12/14/18 Kyle Crossing Kyle, TX 121 27,600
02/08/19 Millenia Plaza Orlando, FL 412 56,400
02/27/19 Homestead Pavilion (TD Bank) Homestead, FL 4 4,091
West Allis Center
03/01/19 (Chick-Fil-A) Milwaukee, WI 5 2,211
03/04/19 Lowe's Home Improvement Hendersonville, TN 129 16,058
03/26/19 Midway Marketplace St. Paul, MN 324 31,210
04/05/19 Mariner Square Spring Hill, FL 194 17,000
05/23/19 Shoppers World of Brookfield Brookfield, WI 203 19,450
05/31/19 Homestead Pavilion Homestead, FL 295 62,250
06/13/19 Beaver Creek Crossings Apex, NC 321 52,750
08/07/19 Harbison Court Columbia, SC 242 36,500
08/09/19 West Allis Center West Allis, WI 259 18,100
12/19/19 Marketplace at Towne Centre Mesquite, TX 180 19,150
Newnan Crossing (Except
01/15/20 Lowe's Parcel) Newnan, GA 92 11,600
02/19/20 Hamilton Commons Mays Landing, NJ 403 60,000
Tucson Spectrum Shopping
02/26/20 Center Tucson, AZ 717 84,000
06/30/20 Big Oaks Crossing Tupelo, MS 348 21,000
Newnan Crossing (Lowe's
07/27/20 Parcel) Newnan, GA 130 15,550
09/24/20 Riverdale Village Coon Rapids, MN 788 70,000
Peach Street Marketplace
(Longhorn Steakhouse
12/21/20 Parcel) Erie, PA 5 2,075
12/22/20 Plaza Palma Real Humacao, PR 448 50,000
04/09/21 Marketplace of Brown Deer Brown Deer, WI 405 10,250
04/13/21 Noble Town Center Jenkintown, PA 168 14,000
04/14/21 Plaza Vega Baja Vega Baja, PR 185 4,500
04/21/21 Uptown Solon Solon, OH 182 10,100
06/03/21 Señorial Plaza Rio Piedras, PR 202 20,350
Puerto Rico Portfolio (9
08/27/21 properties) Puerto Rico 3,538 550,000
Continental U.S. Portfolio (5
10/01/21 properties) Various 2,623 264,000
12/06/21 Green Ridge Square Grand Rapids, MI 216 23,250
12/15/21 Willowbrook Plaza Houston, TX 385 37,100
15,857 $ 1,984,640
Asset sales (Post Spin-Off) 15,376 $ 1,878,805
(1) Sold prior to the spin-off which occurred on July 1, 2018 .
Manager
The Company does not have any employees. In connection with the Company's
separation from SITE Centers on
22
--------------------------------------------------------------------------------
Pursuant to the External Management Agreement, prior to
Pursuant to the Property Management Agreements, prior to
Effective
The New Management Agreement also obligates the Company to pay or reimburse the Manager for all commercially reasonable third-party costs and expenses incurred in the performance of its duties under the New Management Agreement, including, but not limited to, all fees and expenses paid to outside advisors (including legal and accounting fees), consultants, architects, engineers and other professionals reasonably required for the performance of the Manager's duties.
CRITICAL ACCOUNTING ESTIMATES
The consolidated financial statements of the Company include the accounts of the Company and all subsidiaries where the Company has financial or operating control. The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, management has used available information, including the Company's and SITE Centers' history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the Company's consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by management in formulating its estimates inherent in these financial statements might not materialize. Application of the critical accounting estimates described below involves the exercise of judgment and the use of assumptions as to future uncertainties. Accordingly, actual results could differ from these estimates. In addition, other companies may use different estimates that may affect the comparability of the Company's results of operations to those companies in similar businesses.
Revenue Recognition and Accounts Receivable
Rental income has been reduced for the elimination of unpaid contractual lease payments for tenants that are on the cash basis of accounting due to collectability concerns. When a tenant comes off the cash basis, there could be a reinstatement of the straight-line rent receivable that would result in additional recognition of straight-line income.
23
--------------------------------------------------------------------------------
The Company makes estimates of the collectability of its accounts receivable related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company analyzes tenant credit worthiness, as well as both current economic and tenant-specific sector trends when evaluating the probability of collection of accounts receivable. In evaluating tenant credit worthiness, the Company's assessment may include a review of payment history, tenant sales performance and financial position. For larger national tenants, the Company also evaluates projected liquidity, as well as the tenant's access to capital and the overall health of the particular sector. In addition, with respect to tenants in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the probability of collection of the related receivable. The time to resolve these claims may exceed one year. These estimates have a direct impact on the Company's earnings because once the amount is not considered probable of being collected earnings are reduced by a corresponding amount until the receivable is collected.
Real Estate and Long-Lived Assets
On a periodic basis, management assesses whether there are any indicators that the value of the Company's remaining real estate asset, including construction in progress, and intangibles may be impaired. Impairment indicators are primarily related to significant decreases in projected cash flows, including estimated fair value or changes in estimated hold periods; however, other impairment indicators could occur. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. The determination of undiscounted cash flows requires significant estimates by management. In management's estimate of projected cash flows, it considers factors such as expected future operating income (loss), trends and prospects, the effects of demand, competition and other factors. As the Company is evaluating the sale of its remaining property, the undiscounted future cash flows analysis is probability-weighted based upon management's best estimate of the likelihood of the alternative courses of action. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists and whether the effects could have a material impact on the Company's net income. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property. The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties. These assessments have a direct impact on the Company's net income because recording an impairment charge results in an immediate negative adjustment to net income. If the Company's estimates of the projected future cash flows, anticipated holding periods or market conditions change, its evaluation of the impairment charges may be different, and such differences could be material to the Company's consolidated financial statements.
Measurement of
The Company is required to assess the value of its real estate assets. The fair value of real estate investments used in the Company's impairment calculations is estimated based on the price that would be received from the sale of an asset in an orderly transaction between marketplace participants at the measurement date. The availability of observable transaction data and inputs can make it more difficult and/or subjective to determine the fair value of such assets. As a result, the amount ultimately realized by the Company from the remaining property to be sold may differ from the fair values presented, and the differences could be material.
The valuation of impaired real estate assets is determined using widely accepted valuation techniques, including the income capitalization approach or discounted cash flow analysis on the expected cash flows of each asset considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations, bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company utilized a valuation technique which is based on the characteristics of the specific asset when measuring fair value of a real estate investment. However, when bona fide purchase offers from third parties are not available, a single valuation is generally used for the Company's property type.
For the remaining real estate asset, the significant assumptions include the capitalization rate used in the income capitalization valuation, as well as the projected property net operating income. Valuation of real estate assets is calculated based on market conditions and assumptions made by management at the measurement date, which may differ materially from actual results if market conditions or the underlying assumptions change.
COMPARISON OF 2021 AND 2020 RESULTS OF OPERATIONS
The discussion of the Company's 2021 performance compared to 2020 appears
below. The discussion of the Company's 2020 performance compared to 2019
performance is set forth in "Comparison of 2020 and 2019 Results of Operations."
Included in Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations in Part II of the Company's Annual Report on Form 10-K
for the fiscal year ended
24
--------------------------------------------------------------------------------
Revenues from Operations (in thousands)
2021 2020 $ Change
Rental income(A) $ 55,603 $ 80,692 $ (25,089 )
Other income 55 45 10
Total revenues(B) $ 55,658 $ 80,737 $ (25,079 ) (A) The following table summarizes the key components of 2021 rental income as
compared to 2020 (in thousands):
Contractual Lease Payments 2021 2020 $ Change
Base and percentage rental income(1)
13,601 22,535 (8,934 )
Uncollectible revenue(2) 3,711 (6,631 ) 10,342
Ancillary rental income 589 781 (192 )
Lease termination fees 147 584 (437 )
Total contractual lease payments
(1) The decrease is a result of property dispositions. The following table
presents the statistics for the Company's continental U.S. portfolio
affecting base and percentage rental revenues reflected as continuing
operations for the periods presented:
Continental U.S.
December 31,
2021 2020
Centers owned 1 11
Aggregate occupancy rate 91.2 % 88.0 %
Average annualized base rent per occupied square foot
(2) Primarily relates to the impact of the COVID-19 pandemic on rent
collections, including the impact of lease modification accounting and
tenants on the cash basis of accounting due to collectability concerns in
2020. For the year ended December 31, 2021 , the net amount reported was
income primarily due to rental income paid in 2021 from tenants on the
cash basis of accounting, which related to amounts contractually owed in
2020.
(B) Continental
Expenses from Operations (in thousands)
2021 2020 $ Change
Operating and maintenance(A)
8,966 15,957 (6,991 )
Property and asset management fees 5,906 8,529 (2,623 ) Impairment charges(B)
1,573 54,370 (52,797 )
General and administrative(C) 3,577 3,612 (35 )
Depreciation and amortization(D) 17,217 28,395 (11,178 )
$ 44,525 $ 122,323 $ (77,798 )
(A) Change is due to the sale of the continental
(B) The Company recorded impairment charges primarily related to shopping centers
marketed for sale. These impairments primarily were triggered by indicative
bids received, held for sale assets and changes in market assumptions due to
the disposition process, as well as changes in projected cash
flows. Impairment charges are presented in Note 9, "Impairment Charges," to
the Company's consolidated financial statements included herein.
(C) Primarily represents legal, audit, tax and compliance services and director
compensation.
(D) Continental
$10.9 million of the decrease in Depreciation Expense. 25
--------------------------------------------------------------------------------
Other Income and Expenses (in thousands)
2021 2020 $ Change
Interest expense, net(A) $ (7,899 ) $ (18,334 ) $ 10,435
Debt extinguishment costs(B) (6,307 ) (5,873 ) (434 )
Gain on disposition of real estate, net(C) 29,596 23,710 5,886 Tax expense
(148 ) (858 ) 710
Loss from discontinued operations(D) (44,074 ) (50,613 ) 6,539
$ (28,832 ) $ (51,968 ) $ 23,136
(A) The decrease in interest expense primarily was due to repayments of the
mortgage loan with asset sale proceeds with the mortgage loan being fully
repaid in August 2021 . At December 31, 2020 , the interest rate of the
Company's mortgage loan was 4.1% per annum.
(B) Debt extinguishment costs (primarily related to the non-cash write-off of
unamortized deferred financing costs) were incurred in both years in
connection with the prepayment of the mortgage loan with asset sale
proceeds.
(C) Related to the sale of ten properties for the year ended
and five properties and one outparcel for the year ended
(D) Related to the sale of the
"Discontinued Operations," to the Company's consolidated financial statements
included herein. Includes impairment charges in 2021 and 2020 of $81.1
million and $61.2 million , respectively.
Net Loss (in thousands)
2021 2020 $ Change
Net loss
The decrease in net loss primarily was attributable to lower impairment charges and higher gain on disposition of real estate both related to the asset sales in 2021 compared to 2020.
NON-GAAP FINANCIAL MEASURES
Funds from Operations and Operating Funds from Operations
Definition and Basis of Presentation
The Company believes that Funds from Operations, or 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) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, if any, (ii) impairment charges on real estate property and related investments and (iii) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles. The Company's calculation of FFO is consistent with the definition of FFO provided by NAREIT.
The Company believes that certain charges and income 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 and income to analyze the results of its operations and assess performance of the core operating real estate portfolio. As a result, the Company also
26
--------------------------------------------------------------------------------
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 and gains 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, net hurricane-related activity, transaction costs and other restructuring type costs. The disclosure of these charges and income is generally requested by users of the Company's financial statements.
The adjustment for these charges and income 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 and income are non-recurring. These charges and income 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's performance and (iii) 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.
The Company's 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. The Company's management does not use FFO or Operating FFO as an indicator of the Company's cash obligations and funding requirements for future commitments or redevelopment activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP, and neither is necessarily indicative of cash available to fund cash needs. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company's operating performance. The Company believes that to further understand its performance, FFO and Operating FFO should be compared with the Company's reported net income (loss) and considered in addition to cash flows determined in accordance with GAAP, as presented in its consolidated financial statements. Reconciliations of these measures to their most directly comparable GAAP measure of net income (loss) have been provided below.
Reconciliation Presentation
FFO and Operating FFO were as follows (in thousands):
For the Year Ended December 31,
2021 2020 $ Change
FFO $ 44,067 $ 56,157 $ (12,090 )
Operating FFO 52,128 61,828 (9,700 )
The decrease in FFO primarily was due to the impact of property sales, as well as the related decrease in interest expense due to the repayments of mortgage debt with sale proceeds. The change in Operating FFO primarily was due to the same factors impacting FFO.
The Company's reconciliation of net loss to FFO and Operating FFO is as follows (in thousands). The Company provides no assurances that these charges and income adjusted in the calculation of Operating FFO are non-recurring. These charges and income could reasonably be expected to recur in future results of operations.
For the Year Ended December 31,
2021 2020
Net loss $ (17,699 ) $ (93,554 )
Depreciation and amortization of real estate investments 33,675 56,986
Impairment of real estate assets 82,633 115,525
Gain on disposition of real estate (54,542 ) (22,800 )
FFO 44,067 56,157
Debt extinguishment and other expenses 8,061 5,671
Operating FFO $ 52,128 $ 61,828
27
--------------------------------------------------------------------------------
LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES
The Company requires capital to fund its operating expenses and capital
expenditures, as well as to establish a reserve fund to satisfy projected
expenses and known and unknown claims which might arise during the anticipated
winding up and dissolution process. The Company's capital sources include
unrestricted cash on the balance sheet related to retained asset sale proceeds,
future cash flow from operations and potential sale proceeds related to
Crossroads Center. Although the Company experienced significant improvement in
rent collections and transaction market activity during the year ended
Mortgage Indebtedness Repayment and Credit Agreement Termination
In connection with the sale of the Company's remaining
The Company had a Credit Agreement (as amended, the "Revolving Credit
Agreement") with
Series A Preferred Stock
In connection with the Company's separation from SITE Centers in
Common Share Dividends
On
Distributions of
The amount of the 2021 dividends is expected to exceed the amount of REIT taxable income generated by the Company in 2021. Accordingly, federal income taxes were not incurred by the REIT in 2021.
28
--------------------------------------------------------------------------------
Dividend Distributions
The Company currently operates in a manner that allows it to qualify as a REIT
and generally not be subject to
Winding Up and Dissolution
There are many factors that may affect the timing and amount of additional distributions to shareholders, including, among other things, the timing and amount received from the disposition of the Company's remaining real estate asset, the Company's ability to collect amounts currently owed to it by third parties and the amount of current cash balances and sale proceeds utilized to establish a reserve fund to satisfy projected expenses and known and unknown claims which might arise during the anticipated winding-up and dissolution process.
In the event the Company is able to sell its remaining property, the Company
will likely seek to file articles of dissolution with the Secretary of State of
the
For example, contracts governing property dispositions typically allow the
purchaser to true-up common area maintenance charges with the seller at the end
of the year in which the disposition occurred and to make claims for breaches of
representations and other provisions under the sale agreement for a period of
nine to 12 months following the disposition, subject to a cap, which is
typically 2% to 3% of the gross sales price. Potential liability for most
representations included in the sale agreements governing the
In addition, the Company expects to de-list its common shares from the NYSE in
connection with the sale of its remaining property in an effort to reduce its
operating expenses and maximize its liquidating distributions. The NYSE also has
discretionary authority to de-list the Company's common shares on an involuntary
basis if the Company sells its remaining property or proceeds with a plan of
dissolution, termination and liquidation. In addition, the NYSE may also
commence de-listing proceedings against the Company if (i) the average closing
price of the Company's common shares falls below
29
--------------------------------------------------------------------------------
Directors be composed of a majority of independent directors. See "Risks Related
to the Company's Common Shares-If an
Through any winding up and dissolution, the Company will be required to continue
to comply with the applicable reporting requirements of the Exchange Act, even
if compliance with these reporting requirements is economically burdensome. In
order to curtail expenses, the Company eventually expects to seek relief from
the
Dispositions
In
In
In addition to the two portfolio transactions discussed above, for the year
ended
Cash Flow Activity
The Company's cash flow activities are summarized as follows (in thousands):
For the Year Ended December 31,
2021 2020
Cash flow provided by operating activities $ 61,741 $ 51,658
Cash flow provided by investing activities 892,013 268,935
Cash flow used for financing activities (1,014,079 ) (331,098 )
Changes in cash flow compared to the prior year are described as follows:
Operating Activities: Cash provided by operating activities increased
• Timing and increase in cash collected from tenants; • Reduction of interest payments and • Decrease in operating income due to asset sales.
Investing Activities: Cash provided by investing activities increased
• Increase in proceeds from dispositions of real estate of$610.9 million and • Decrease in payments for real estate improvements of$12.2 million .
Financing Activities: Cash used for financing activities increased by
• Increase in debt repayments of$34.1 million ; • Dividend paid on redeemable equity of$190.0 million and • Increase in common dividends paid of$458.8 million . 30
--------------------------------------------------------------------------------
CAPITALIZATION
At
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
In
DISPOSITION OUTLOOK
As of
Beginning in
For additional information regarding risks relating to the COVID-19 pandemic and other relevant business uncertainties, see Item 1A. Risk Factors in Part I of this Annual Report on Form 10K.
FORWARD-LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and Results of Operations 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 Exchange Act, both as amended, with respect to the Company's expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words "will," "believes," "anticipates," "plans," "expects," "seeks," "estimates" and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company's actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, see Item 1A. Risk Factors in Part I of this Annual Report on Form 10-K. The impact of the COVID-19 pandemic may also exacerbate the risks discussed therein and herein, any of which could have a material effect on the Company.
31
--------------------------------------------------------------------------------
Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
• The Company may be unable to dispose of its remaining property on favorable
terms or at all, especially given the limited term remaining on its ground
lease;
• The Company is subject to general risks affecting the real estate industry,
including the need to enter into new leases or renew leases on favorable
terms to generate rental revenues, and any economic downturn may adversely
affect the ability of the Company's tenants, or new tenants, to enter into
new leases or the ability of the Company's existing tenants to renew their
leases at rates at least as favorable as their current rates;
• The Company could be adversely affected by changes in the local market
where its remaining property is located, as well as by adverse changes in
regional or national economic and market conditions;
• The Company may fail to anticipate the effects on its remaining property of
changes in consumer buying practices, including sales over the internet and
the resulting retailing practices and space needs of its tenants, or a
general downturn in its tenants' businesses, which may cause tenants to
close stores or default in payment of rent;
• The Company is subject to competition for tenants from other owners of
retail properties, and its tenants are subject to competition from other
retailers and methods of distribution. The Company is dependent upon the
successful operations and financial condition of its tenants, in particular
its major tenants. The bankruptcy of major tenants could result in a loss
of significant rental income and could give rise to termination or rent
abatement by other tenants under the co-tenancy clauses of their leases;
• The Company relies on major tenants, which makes it vulnerable to changes
in the business and financial condition of, or demand for its space by,
such tenants;
• Changes in interest rates could adversely affect the market price of the
Company's common shares, its performance and cash flow and its ability to
sell its remaining real estate asset and the sales price applicable
thereto;
• The outcome of litigation, including litigation with tenants and purchasers
of its properties, may adversely affect amounts available for distribution
to shareholders;
• Property damage, expenses related thereto, and other business and economic
consequences (including the potential loss of revenue) resulting from
natural disasters and extreme weather conditions impacting the Company's
remaining property;
• Sufficiency and timing of any insurance recovery payments related to
damages from extreme weather conditions;
• The Company and its tenants could be negatively affected by the impacts of
pandemics and other public health crises, including the COVID-19 pandemic;
• The Company is subject to potential environmental liabilities;
• The Company may incur losses that are uninsured or exceed policy coverage
due to its liability for certain injuries to persons, property or the
environment occurring on its remaining property;
• The Company could incur additional expenses to comply with or respond to
claims under the Americans with Disabilities Act or otherwise be adversely
affected by changes in government regulations, including changes in
environmental, zoning, tax and other regulations;
• Changes in accounting or other standards may adversely affect the Company's
business;
• The Company's Board of Directors, which regularly reviews the Company's
business strategy and objectives, may change its strategic plan;
• A change in the Company's relationship with SITE Centers and SITE Centers'
ability to retain qualified personnel and adequately manage the Company;
• Potential conflicts of interest with SITE Centers and the Company's ability
to replace SITE Centers as manager (and the fees to be paid to any
replacement manager) in the event the New Management Agreement is
terminated and
32
--------------------------------------------------------------------------------
• The Company and its vendors, including SITE Centers, could sustain a
disruption, failure or breach of their respective networks and systems,
including as a result of cyber-attacks, which could disrupt the Company's
business operations, compromise the confidentiality of sensitive
information and result in fines and penalties.© Edgar Online, source
