InvenTrust Properties Q1 Earnings Call Highlights

Key Points

• Q1 results: Same‑Property NOI rose 2.6% and Nareit FFO was $0.53 per share (up 10.4% YoY), and management raised full‑year guidance to Nareit FFO $2.00–$2.06 and Core FFO $1.92–$1.96, while declaring a $0.25 quarterly dividend (up 5%).
• Leasing and pipeline: Leasing stayed healthy (64 leases, ~329k sq ft; blended spreads 10.5%) with portfolio occupancy at 96.4%, and a mostly small‑shop SNO pipeline (≈80%) that management expects ~90% to be open by year‑end, driving back‑half NOI acceleration.
• Capital deployment and balance sheet: InvenTrust has completed $123M of its $300M investment target with $167M under contract, is underwriting initial yields in the low‑sixes (targeting IRRs in the sevens), finished the quarter with $346M liquidity, and plans a $250M private note placement (avg rate ~5.4%) to fund growth.

InvenTrust Properties NYSE: IVT reported what President and CEO DJ Busch described as “steady operating performance across the portfolio” in the company’s first-quarter 2026 earnings call, highlighted by Same-Property NOI growth of 2.6% and year-over-year increases in FFO per share metrics. Management also raised full-year 2026 FFO per share guidance, citing improved visibility into leasing and acquisitions.

First-quarter results and drivers of NOI growth

Busch said the quarter reflected “meaningful embedded growth from annual escalators, healthy cash-on-cash leasing spreads, and our SNO pipeline,” adding that those factors support expectations for Same-Property NOI growth to build in the back half of the year.

EVP, CFO, and Treasurer Michael Phillips said first-quarter Same-Property NOI totaled $48.7 million, up 2.6% from the first quarter of 2025. Phillips detailed the components behind the increase:

• Embedded rent escalations contributed approximately 170 basis points.
• Positive leasing spreads added roughly 90 basis points.
• Redevelopment activity added about 70 basis points.
• Percentage rents and specialty income contributed 50 basis points.
• Offsets included a 40 basis point headwind from bad debt and a 60 basis point impact from what Phillips called an “expected temporary” occupancy change.

Nareit FFO for the quarter was $41.3 million, or $0.53 per diluted share, a 10.4% increase from the first quarter of 2025, Phillips said. Core FFO rose 6.5% to $0.49 per share year-over-year, driven by higher Same-Property NOI and net acquisition activity, partially offset by interest expense. Phillips also noted the company recognized about $800,000 of lease termination fee income during the quarter, which he said was anticipated and incorporated into initial guidance.

Leasing, occupancy, and back-half acceleration

EVP and COO Christy David said leasing activity “remained healthy” during the quarter. The company executed 64 leases covering approximately 329,000 square feet. Comparable blended spreads were 10.5%, with new leases at 19.8% and renewals at 9.9%.

David said annualized base rent per occupied square foot increased 2.1% year-over-year to $20.63. At quarter end, lease occupancy was 96.4%, including 98.5% for anchors and 92.9% for small shops.

Management attributed the quarter’s expected short-term occupancy change primarily to seven larger-format small shop spaces. David said six of the seven spaces were already “either signed or under LOI,” and that prospective rents for new opportunities and returning spaces were running about 15% to 20% higher.

During Q&A, David added there was “nothing systematic or thematic” about the small shop departures, noting the spaces were “all over the board” by use type and geography, and averaged around 5,000 square feet on a blended basis.

David also discussed vacancies and tenant changes, including five anchor vacancies: three tied to a redevelopment project at Gateway Market Center in Florida, one at a California asset in the disposition pipeline, and one in Texas with an LOI being negotiated. She also noted Painted Tree Marketplace closed stores across the U.S., including one InvenTrust location in Glen Allen, Virginia, representing roughly 30,000 square feet or about 20 basis points of ABR, and said the company was “well-positioned to backfill this space.”

Looking ahead, David said the lease-to-economic occupancy spread ended the quarter at 130 basis points, with 80% attributable to small shop space “that is yet to commence,” providing what she called a “clear line of sight into revenue conversion.” She said the first quarter of 2026 was one of InvenTrust’s highest quarters of new rent commencement since its listing.

On the anticipated back-half NOI acceleration, Phillips said the signed-not-open (SNO) pipeline is mostly small shop, with 80% in that category, and he expects 90% of it to come online by year-end, weighted to the third and fourth quarters. Busch added the company expects the second quarter to be “very similar to the first quarter,” with acceleration in the third quarter but “mostly in the fourth quarter,” and said the SNO pipeline should increase into the back half of the year, positioning the company heading into 2027.

Acquisitions, market expansion, and expected yields

Busch emphasized the company’s Sun Belt focus—“nearly 100%” of the footprint—with approximately 89% grocery-anchored exposure. He said InvenTrust continues investing in core markets while expanding a “corridor strategy into complementary secondary Sun Belt cities” to broaden acquisition sourcing and the opportunity set for capital deployment.

During the quarter, InvenTrust completed $123 million toward its $300 million net investment guidance for the year, Busch said, and had another $167 million of additional deals “awarded or under contract,” with other opportunities in the pipeline.

David highlighted two acquisitions completed during the quarter:

• Marketplace at Hudson Station in Phoenix, Arizona, a neighborhood center anchored by EōS Fitness and shadow anchored by a Fry’s Marketplace.
• Nashville West, a power center located about 15 minutes from downtown Nashville, shadow anchored by Target, Costco, and Publix.

Asked about timing, Busch said the company hopes most of the $167 million under contract or awarded will close in the second quarter, “maybe leaking a little bit into the third quarter.” He also said InvenTrust expects some selective asset sales, but only if the acquisition pipeline remains “actionable.”

On underwriting, Busch said the company has continued to find deals with initial yields “in that low six range or even mid-sixes,” producing “healthy IRRs comfortably in the sevens.” He said the higher acquisition cadence helped support the company’s decision to raise FFO per share guidance.

Discussing Nashville West as an entry into a new market, David called it a “dominant power center” and said the company sees an ability to raise rent and do some remerchandising over time. She said InvenTrust has “a few other assets in the pipeline” in Nashville, though nothing under LOI or near execution, and said she hopes the company can eventually build to three or four assets in the market to operate efficiently.

Busch also pointed to mark-to-market opportunities in acquired properties, saying InvenTrust typically only gets access to a certain number of leases per year. He said the average annual escalators at acquisitions made since 2021 (and “even 2024”) are about half what the company has been able to achieve elsewhere, citing around 3% annual escalators on new deals versus about 1.5% in-place escalators, which he characterized as “a tremendous amount of opportunity.”

Redevelopment activity and outparcel strategy

Busch said InvenTrust continues to pursue selective small-scale redevelopments aimed at repositioning anchors, remerchandising space, and adding small shop or outparcel space where demand is strong. He said the company expects redevelopment to contribute approximately 90 to 100 basis points of Same-Property NOI growth in 2026.

Asked about the redevelopment pipeline, Busch said the company completed some projects early and has “a ton of things” in progress at varying stages, including entitlement work and active construction. He added that some larger redevelopment opportunities over the next couple of years are expected to center on grocery rebuilds or relocations within existing centers, which he called “the best bang for our buck.”

On outparcels, David explained that InvenTrust looks to control as much of a property as possible, “especially the front door of the property.” Addressing an outparcel purchase in Atlanta, she said it was not a redevelopment play by itself, and noted it currently has a new lease with an urgent care tenant that complements existing uses. She added it could create the ability to add an additional outparcel in the future if demand warrants, and said the company consistently evaluates outparcel opportunities across the portfolio to improve control, often tied to OEAs and REAs.

Balance sheet, financing, dividend, and updated guidance

Phillips said the company ended the quarter with total liquidity of $346 million, including $27 million of cash and $319 million available under its revolving credit facility. The weighted average interest rate was 4.1%, with a weighted average term to maturity of four years. Net leverage finished the quarter at 29.7%, and net debt to adjusted EBITDA was 5.2x on a trailing 12-month basis, Phillips said.

Subsequent to quarter end, Phillips said the company signed a definitive note purchase agreement for a $250 million private placement of senior unsecured notes, structured in three tranches: $50 million due in 2029, $100 million due in 2031, and $100 million due in 2033. The notes have a weighted average tenor of about 5.4 years and a weighted average fixed interest rate of 5.4%, with funding expected June 29, 2026, subject to customary closing conditions.

The company also declared a quarterly dividend of $0.25 per share, which Phillips said was a 5% increase over last year.

On guidance, Phillips said InvenTrust reaffirmed its full-year Same-Property NOI growth guidance range of 3.25% to 4.25%. The company raised full-year 2026 Nareit FFO guidance to $2.00 to $2.06 per share, and raised Core FFO guidance to $1.92 to $1.96 per share. Phillips said the Nareit FFO increase was “primarily driven by mark-to-market lease adjustments related to our recent acquisitions.”

About InvenTrust Properties NYSE: IVT

InvenTrust Properties Corp is a self‐managed real estate investment trust specializing in suburban and urban retail real estate. Headquartered in Downers Grove, Illinois, the company focuses on the acquisition, leasing and management of open‐air shopping centers that serve everyday consumer needs.

The company’s portfolio is concentrated in neighborhood and community retail assets anchored by grocery stores, pharmacies and national service tenants. InvenTrust engages in active leasing strategies, property management services and selective development and redevelopment initiatives designed to enhance long‐term cash flow and tenant mix.

InvenTrust Properties was created in 2019 through the spin‐off of its predecessor, Inland Real Estate Investment Corp, and adopted its current name upon separation.

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