Certain statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in these interim condensed
consolidated financial statements for the quarter ended September 30, 2021 (the
"Quarterly Report"), other than purely historical information, are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements include statements about InvenTrust Properties Corp.'s (the
"Company") plans, objectives, strategies, financial performance and outlook,
trends, the amount and timing of future cash distributions, prospects or future
events; and they involve known and unknown risks that are difficult to predict.
As a result, our actual financial results, performance, achievements, or
prospects may differ materially from those expressed or implied by these
forward-looking statements. In some cases, forward-looking statements can be
identified by the use of words such as "may," "could," "expect," "intend,"
"plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict,"
"potential," "continue," "likely," "will," "would," "illustrative," and "should"
and variations of these terms and similar expressions, or the negatives of these
terms or similar expressions. Such forward-looking statements are necessarily
based upon estimates and assumptions that, while we consider reasonable based on
our knowledge and understanding of the business and industry, are inherently
uncertain. These statements are expressed in good faith and are not guarantees
of future performance or results. Our actual results could differ materially
from those expressed in the forward-looking statements and stockholders should
not rely on forward-looking statements in making investment decisions.
There are a number of risks, uncertainties and other important factors, many of
which are beyond our control, and should be interpreted as being heightened as a
result of the ongoing and numerous adverse impacts of the COVID-19 pandemic and
socio-economic environment, that could cause our actual results to differ
materially from the forward-looking statements contained in this Quarterly
Report. Such risks, uncertainties and other important factors, include, among
others, the risks, uncertainties and factors set forth in our filings with the
Securities and Exchange Commission ("SEC"), including our Annual Report on Form
10-K for the year ended December 31, 2020 (the "Annual Report"), and as updated
in this Quarterly Report and other quarterly and current reports, which are on
file with the SEC and are available at the SEC's website (www.sec.gov). Such
risks and uncertainties are related to, among others, the following:
•the effects of the COVID-19 pandemic in the markets where we own and operate
properties, including the effect on our tenants' operations and ability to pay
rent;
•the duration of the COVID-19 pandemic and the timing and nature of an economic
recovery from the pandemic, including the effects of any future resurgence of
COVID-19, the existence and prevalence of variants of the virus, the
distribution of available vaccines and the public's acceptance of such vaccines;
•market, political and economic volatility experienced by the United States
("U.S.") economy or real estate industry as a whole, including as a result of
the COVID-19 pandemic, and the regional and local political and economic
conditions in the markets in which our retail properties are located;
•our ability to collect rent from tenants or to rent space on favorable terms or
at all;
•the consummation of lease amendments on the agreed-upon terms and/or if
consummated, payments as required by the terms of the respective agreements;
•declaration of bankruptcy by our retail tenants;
•the economic success and viability of our anchor retail tenants;
•the continued impact of the COVID-19 pandemic on our cash flows and our ability
to satisfy certain covenants required by our mortgage loans and credit
agreements;
•our ability to maintain the listing requirements of the New York Stock
Exchange;
•our ability to identify, execute and complete disposition opportunities and at
expected valuations;
•our ability to identify, execute and complete acquisition opportunities and to
integrate and successfully operate any retail properties acquired in the future
and manage the risks associated with such retail properties;
•our ability to manage the risks of expanding, developing or re-developing our
retail properties;
•loss of members of our senior management team or other key personnel;
•changes in governmental regulations and U.S. accounting standards or
interpretations thereof;
•our ability to access capital for development, re-development and acquisitions
on terms and at times that are acceptable to us;
•changes in the competitive environment in the leasing market and any other
market in which we operate;
                                       18
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•shifts in consumer retail shopping from brick and mortar stores to e-commerce;
•our ability to re-lease spaces with forthcoming lease expirations and
terminations, and increasing costs associated with leasing activities;
•the impact of leasing and capital expenditures to improve our retail properties
to retain and attract tenants;
•events beyond our control, such as war, terrorist attacks, including acts of
domestic terrorism, civil unrest, natural disasters and severe weather
incidents, and any uninsured or under-insured loss resulting therefrom;
•actions or failures by our joint venture partner;
•the cost of compliance with and liabilities under environmental, health and
safety laws;
•changes in real estate and zoning laws and increases in real property tax
rates;
•our debt financing, including risk of default, loss and other restrictions
placed on us;
•our ability to refinance or repay maturing debt or to obtain new financing on
attractive terms;
•future increases in interest rates;
•the availability of cash flow from operating activities to fund capital and
other expenditures, service our debt and other obligations, and to fund
distributions;
•our status as a real estate investment trust ("REIT") for federal tax purposes;
and
•changes in federal, state or local tax law, including legislative,
administrative, regulatory or other actions affecting REITs.
These factors are not necessarily all of the important factors that could cause
our actual results, performance or achievements to differ materially from those
expressed in or implied by any of our forward-looking statements. Other unknown
or unpredictable factors also could harm our business, financial condition,
results of operations, cash flows and overall value. All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements set forth above.
Forward-looking statements are only as of the date they are made; we do not
undertake or assume any obligation to update publicly any of these
forward-looking statements to reflect actual results, new information, future
events, changes in assumptions or changes in other factors affecting
forward-looking statements, except to the extent required by applicable law. If
we update one or more forward-looking statements, no inference should be drawn
that we will make additional updates with respect to those or other
forward-looking statements.
The following discussion and analysis relates to the three and nine months ended
September 30, 2021 and 2020 and as of September 30, 2021 and December 31, 2020.
It should be read in conjunction with our condensed consolidated financial
statements and the related notes included in this Quarterly Report. All square
feet and dollar amounts are stated in thousands, except per share amounts and
per square foot metrics, unless otherwise noted.
                                       19
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Overview

InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail
REIT that owns, leases, redevelops, acquires and manages grocery-anchored
neighborhood and community centers, as well as high-quality power centers that
often have a grocery component. We seek to continue to execute our strategy by
investing in Sun Belt markets in assets with an essential retail profile, while
exhibiting focused and disciplined capital allocation.
Evaluation of Financial Condition
Historically, management has evaluated our financial condition and operating
performance by focusing on the following financial and nonfinancial indicators,
discussed in further detail herein:
•Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP
measures;
•Funds From Operations ("FFO") Applicable to Common Shares and Dilutive
Securities, a supplemental non-GAAP measure;
•Core FFO Applicable to Common Shares and Dilutive Securities, a supplemental
non-GAAP measure;
•Cash flow from operations as determined in accordance with GAAP;
•Economic and leased occupancy and rental rates;
•Leasing activity and lease rollover;
•Operating expense levels and trends;
•General and administrative expense levels and trends;
•Debt maturities and leverage ratios; and
•Liquidity levels.
Impact of the COVID-19 Pandemic on Our Business and Financial Statements
The impact of the COVID-19 pandemic has not materially changed from the
information included in our Annual Report or other current reports on file with
the SEC. The primary impact of the pandemic was and continues to be related to
our tenants' ability to make their future rental payments in a timely fashion or
at all. We have been working with our tenants to collect rental payments that
are commensurate to our contractual rights under our lease agreements.
At this time, given the uncertainty related to variants of the virus, we are
unable to predict whether cases of COVID-19 in our markets will decrease,
increase, or remain the same, whether the approved COVID-19 vaccines will be
effective against the virus and new variants of the virus, efficiently
distributed in our markets and widely accepted by the public, and whether local
governments will mandate closures of our tenants' businesses or implement other
restrictive measures on their and our operations in the future in response to a
resurgence of the pandemic. We have taken and will continue to consider a number
of measures to mitigate the impact of the pandemic on our business and financial
condition. We continue to believe that the long-term prospects for our business
remain strong despite the uncertainty related to the new variants of COVID-19.
Tenant Assistance Efforts and Deferred Rental Payments
We continue to evaluate our tenants' requests and are negotiating the terms of
potential lease amendments on an individual basis. We do not expect all tenant
requests will result in amended agreements, nor do we intend to forgo our
contractual rights under our lease agreements. There can be no assurance that
all amendments will be consummated on the agreed-upon terms and/or if
consummated, amounts due will be collected as required by terms of the
agreement.
During the nine months ended September 30, 2021, deferred rental payments of
$4.8 million, including our proportionate share of our unconsolidated joint
venture, became due; we have collected $4.7 million of such deferred rental
payments as of September 30, 2021. As of September 30, 2021, we have granted
approximately $5.9 million on a cumulative basis since the start of the
pandemic, including our proportionate share of our unconsolidated joint venture,
of rental payment deferrals, with contractual payment terms through the year
ending December 31, 2023.
In addition to collections on the deferred rental payments, during the nine
months ended September 30, 2021, we collected approximately $1.6 million of
rent, including our proportionate share of our unconsolidated joint venture, we
had previously reserved for as uncollectible credit losses in 2020.
                                       20
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Current Strategy and Outlook
InvenTrust focuses on Sun Belt grocery-anchored neighborhood centers, and select
power centers that often have a grocery component, in markets with favorable
demographics, including above average growth in population, employment, income
and education levels. We believe these conditions create favorable demand
characteristics for grocery-anchored and necessity-based retail centers which
will position us to capitalize on potential future rent increases while enjoying
sustained occupancy at our centers. We believe that our Sun Belt portfolio of
high quality grocery-anchored assets, coupled with our conservatively leveraged
balance sheet, are distinct differentiators for us in the marketplace.
Our strategically located regional field offices are within a two-hour drive of
90% of our properties which affords us the ability to respond to the needs of
our tenants and provides us with in-depth local market knowledge.
Recent Developments
Acquisitions and Dispositions
On July 12, 2021, we purchased Prestonwood Town Center, a 233 thousand square
foot grocery-anchored power center located in Dallas, Texas, from our
unconsolidated joint venture, IAGM Retail Fund I, LLC ("IAGM") for a gross
acquisition price of $52.8 million. On September 12, 2021, we purchased a seven
thousand square foot retail outparcel adjacent to Rio Pinar Plaza for a gross
acquisition price of $1.9 million.
On September 3, 2021, IAGM disposed of Westover Marketplace, a 243 thousand
square foot retail property located in San Antonio, Texas, for a gross disposal
price of $28.8 million and recognized a gain on sale of $0.4 million. Our share
of IAGM's gain on sale was $0.2 million.
On July 20, 2021, we disposed of Kroger Tomball, a 74 thousand square foot
grocery store located in Tomball, Texas, for a gross disposition price of $13.7
million and recognized a gain on the sale of this property of $0.6 million.
Reverse Stock Split
On August 5, 2021 we effected a 1-for-10 reverse stock split of the Company's
common stock. As a result of the reverse stock split, every ten shares of issued
and outstanding common stock were changed into one share of common stock, with
any fractional shares being rounded up to the next higher whole share. Unless
otherwise noted, the share information and the Net Asset Value ("NAV") per share
of our common stock in this report and accompanying condensed consolidated
financial statements have been retroactively adjusted to give effect to the
1-for-10 reverse stock split for all periods presented.
Revolving Credit Agreement
On September 22, 2021, we entered into an amendment to our unsecured revolving
credit agreement, which amended and restated our prior unsecured revolving
credit agreement, and provides for, among other things, an extension of the
maturity of our $350.0 million unsecured revolving line of credit (the "Amended
Revolving Credit Agreement"). The Amended Revolving Credit Agreement has a
4-year term maturing on September 22, 2025 with two six-month extension options.
Unsecured Term Loans
On September 22, 2021, we entered into an amendment to our unsecured term loan
agreement, which amended and restated our prior unsecured term loan agreement,
and provides for, among other things, an extension of the maturity of our
$400.0 million unsecured term loan, and a reallocation of indebtedness under the
two outstanding tranches of term loans thereunder (the "Amended Term Loan
Agreement"). The Amended Term Loan Agreement consists of two tranches: a
$200.0 million 5-year tranche maturing on September 22, 2026, and a
$200.0 million 5.5-year tranche maturing on March 22, 2027.
New York Stock Exchange Listing
On October 12, 2021, our common stock began trading on the New York Stock
Exchange ("NYSE") under the ticker symbol "IVT". Subsequent to September 30,
2021, we incurred approximately $16.6 million of advisory fees for legal,
banking, and other advisory services, related to the direct listing. These costs
were contingent upon a successful direct listing on the NYSE and will be
expensed in fourth quarter 2021.
"Dutch Auction" Tender Offer
On October 12, 2021, in conjunction with the NYSE listing, and in order to
provide liquidity our stockholders and help stabilize
                                       21
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the share price of our common stock, we commenced a modified "Dutch Auction"
tender offer (the "Tender Offer") to purchase for cash up to $100.0 million of
shares of our common stock at a price not greater than $28.00 nor less than
$25.00 per share, net to the seller in cash, less any applicable withholding of
taxes and without interest. The Tender Offer expires at 12:00 midnight, New York
City time, at the end of the day on November 8, 2021.
Important Information and Where to Find It
The foregoing information and other information in this Quarterly Report on Form
10-Q regarding the Tender Offer is for informational purposes only and is
neither an offer to buy nor the solicitation of an offer to sell any securities
of the Company. The full details of the Tender Offer, including complete
instructions on how to tender shares, are included in the offer to purchase, the
letter of transmittal, and other related materials, which we have distributed to
stockholders and have filed with the Securities and Exchange Commission (the
"SEC"). Stockholders are urged to carefully read the offer to purchase, the
letter of transmittal, and other related materials, as they contain important
information, including the terms and conditions of the Tender Offer.
Stockholders may obtain free copies of the offer to purchase, the letter of
transmittal, and other related materials that the Company has filed with the SEC
on the SEC's website at www.sec.gov or by calling Georgeson LLC, the information
agent for the Tender Offer at (888) 877-5360 (toll free).
Our Retail Portfolio
Our wholly-owned and managed retail properties include grocery-anchored
community and neighborhood centers and power centers, including those classified
as necessity-based, as defined in our Annual Report. As of September 30, 2021,
we owned or had an interest in 63 retail properties with a total gross leasable
area ("GLA") of approximately 10.6 million square feet, which includes 8 retail
properties with a GLA of approximately 2.0 million square feet owned through our
55% ownership interest in an unconsolidated joint venture, IAGM.
Where appropriate, we have included results from the IAGM properties at 55% ("at
share") when combined with our wholly-owned properties, defined as "Pro Rata
Combined Retail Portfolio". The following table summarizes our retail portfolio
as of September 30, 2021 and 2020.
                                              Wholly-Owned                                     IAGM                                   Pro Rata Combined
                                           Retail Properties                            Retail Properties                              Retail Portfolio
                                     2021                    2020                 2021                    2020                  2021                     2020
No. of properties                     55                      55                    8                      10                    63                       65
GLA (square feet)                    8,561                   8,329                1,994                   2,470                 9,658                    9,689
Economic occupancy (a)               93.0%                   93.4%                86.6%                   86.4%                 92.2%                    92.4%
Leased occupancy (b)                 94.1%                   94.4%                88.6%                   88.0%                 93.5%                    93.5%
ABR PSF (c)                         $18.66                  $18.39               $16.62                  $17.04                $18.44                   $18.22


(a)Economic occupancy is defined as the percentage of occupied GLA divided by
total GLA (excluding specialty leases) for which a tenant is obligated to pay
rent under the terms of its lease agreement as of the rent commencement date,
regardless of the actual use or occupancy by that tenant of the area being
leased. Actual use may be less than economic occupancy.
(b)Leased Occupancy is defined as economic occupancy plus the percentage of
signed and not yet commenced GLA divided by total GLA.
(c)Annualized Base Rent ("ABR") is the base rent for the period multiplied by
twelve months. Base rent is inclusive of ground rent and any abatement
concessions, but excludes specialty lease income. ABR per square foot ("ABR
PSF") is the ABR divided by the occupied square footage for the period.
                                       22
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Retail Portfolio Summary by Center Type
The following tables summarize our retail portfolio, by center type, as defined
in our Annual Report, as of September 30, 2021 and 2020.
Community and neighborhood centers

                                            Wholly-Owned                                        IAGM                                   Pro Rata Combined
                                         Retail Properties                               Retail Properties                              Retail Portfolio
                                   2021                    2020                     2021                    2020                 2021                     2020
No. of properties                   43                      44                        5                      5                    48                       49
GLA (square feet)                  4,984                   4,986                    1,386                  1,386                 5,747                    5,749
Economic occupancy                 93.6%                   93.7%                    86.2%                  88.0%                 92.6%                    92.9%
Leased occupancy                   94.6%                   95.2%                    86.8%                  88.2%                 93.6%                    94.3%
ABR PSF                           $19.75                  $19.47                   $16.88                  $16.99               $19.40                   $19.16


Power centers

                                            Wholly-Owned                                     IAGM                                   Pro Rata Combined
                                         Retail Properties                            Retail Properties                              Retail Portfolio
                                   2021                    2020                 2021                    2020                  2021                     2020
No. of properties                   12                      11                    3                       5                    15                       16
GLA (square feet)                  3,577                   3,343           
     608                    1,084                 3,911                    3,940
Economic occupancy                 92.1%                   93.0%                87.5%                   84.3%                 91.7%                    91.7%
Leased occupancy                   93.3%                   93.3%                92.5%                   87.8%                 93.3%                    92.4%
ABR PSF                           $17.12                  $16.77               $16.05                  $17.11                $17.03                   $16.82


Same Property Retail Portfolio Summary
The following tables summarize the GLA, economic occupancy and ABR PSF of the
properties included in our retail portfolio classified as same property for the
three and nine months ended September 30, 2021 and 2020. Same Property Retail
Portfolio summaries include results from properties owned for the entirety of
both periods presented.
Three months ended September 30

                                              Wholly-Owned                                       IAGM                                   Pro Rata Combined
                                           Retail Properties                              Retail Properties                              Retail Portfolio
                                    2021                        2020                2021                    2020                  2021                     2020
No. of properties                    54                          54                   8                       8                    62                       62
GLA (square feet)                   8,260                      8,254                1,994                   1,994                 9,357                    9,350
Economic occupancy                  93.2%                      93.3%                86.6%                   88.2%                 92.4%                    92.7%
Leased occupancy                    94.3%                      94.4%                88.6%                   90.2%                 93.7%                    93.9%
ABR PSF                            $18.68                      $18.48              $16.62                  $16.48                $18.45                   $18.26

Nine months ended September 30

                                               Wholly-Owned                                        IAGM                                   Pro Rata Combined
                                            Retail Properties                               Retail Properties                              Retail Portfolio
                                    2021                         2020                 2021                    2020                  2021                     2020
No. of properties                    52                           52                    8                       8                    60                       60
GLA (square feet)                   8,089                       8,082                 1,994                   1,994                 9,186                    9,179
Economic occupancy                  93.1%                       93.2%                 86.6%                   88.2%                 92.3%                    92.6%
Leased occupancy                    94.3%                       94.3%                 88.6%                   90.2%                 93.6%                    93.8%
ABR PSF                            $18.80                       $18.61               $16.62                  $16.48                $18.55                   $18.36


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Lease Expirations
The following table presents the lease expirations of our economic occupied Pro
Rata Combined Retail Portfolio as of September 30, 2021.
                               No. of                    GLA of                   Percent of               ABR of
       Lease                  Expiring              Expiring Leases              Total GLA of             Expiring              Percent of             Expiring
  Expiration Year            Leases (a)              (square feet)             Expiring Leases             Leases               Total ABR               ABR PSF
       2021                      27                          54                      0.6%               $    1,392                 0.8%              $    25.78
       2022                      178                        642                      7.2%                   13,624                 7.8%                   21.22
       2023                      198                        998                     11.2%                   18,569                10.6%                   18.61
       2024                      186                      1,000                     11.2%                   20,077                11.5%                   20.08
       2025                      179                      1,167                     13.1%                   21,011                12.0%                   18.00
       2026                      177                        726                      8.2%                   16,955                 9.7%                   23.35
       2027                      146                      1,554                     17.5%                   28,871                16.5%                   18.58
       2028                      82                         441                      5.0%                   10,074                 5.8%                   22.84
       2029                      90                         512                      5.7%                   11,024                 6.3%                   21.53
       2030                      71                         368                      4.1%                    9,079                 5.2%                   24.67
    Thereafter                   101                      1,419                     15.9%                   23,336                13.4%                   16.45
     Other (b)                   11                          25                      0.3%                      699                 0.4%                   27.96
                                1,446                     8,906                      100%               $  174,711                 100%              $    19.62


(a)No. of expiring leases includes IAGM at 100%.
(b)Other lease expirations include the GLA, ABR and ABR PSF of month-to-month
leases.
For purposes of preparing the table, we have not assumed that unexercised
contractual lease renewal or extension options contained in our leases will, in
fact, be exercised. Our retail business is neither highly dependent on specific
retailers nor subject to lease roll-over concentration. We believe this
minimizes risk to our retail portfolio from significant revenue variances over
time.
                                       24
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Leasing Activity, Pro Rata Combined Retail Portfolio
The following table summarizes the leasing activity for leases that were
executed during the nine months ended September 30, 2021, compared with expiring
or expired leases for the same or previous tenant for renewals and the same unit
for new leases at the 63 properties in our Pro Rata Combined Retail Portfolio.
Except for number of leases, all figures reflect results from our wholly owned
and IAGM properties at share. These tables do not include rent deferral lease
amendments executed as a result of the impact of the COVID-19 pandemic.
In our Pro Rata Combined Retail Portfolio, we had GLA totaling 758 thousand
square feet expiring during the nine months ended September 30, 2021, of which
693 thousand square feet was re-leased. This achieved a retention rate of
approximately 91.5%.
                           No. of Leases                                             New                    Prior                 % Change
                         Executed for the                                        Contractual             Contractual             over Prior             Weighted Average           Tenant Improvement
                         Nine Months Ended                GLA SF                    Rent                    Rent                    Lease                  Lease Term                  Allowance                     Lease
                          Sept. 30, 2021              (in thousands)             ($PSF) (b)              ($PSF) (b)               Rent (b)                   (Years)                     ($PSF)               Commissions ($PSF)
All Tenants
Comparable
Renewal
Leases (a)                      147                        1,118                   $17.53                  $16.96                   3.4%                       5.0                       $0.71                        $-
Comparable New
Leases (a)                      25                          75                     $23.28                  $23.14                   0.6%                       9.4                       $18.07                      $8.99
Non-Comparable
Renewal and New
Leases                          58                          270                    $19.09                    N/A                     N/A                       8.7                       $10.74                      $4.21
Total                           230                        1,463                   $17.89                  $17.34                   3.2%                       5.9                       $3.44                       $1.24

Anchor Tenants (leases ten thousand square feet and over)
Comparable
Renewal
Leases (a)                      25                          848                    $13.65                  $12.94                   5.5%                       5.1                       $0.65                        $-
Comparable New
Leases (a)                       2                          28                     $14.28                  $12.16                   17.4%                     10.4                       $16.04                      $7.43
Non-Comparable
Renewal and New
Leases                           6                          151                    $12.74                    N/A                     N/A                       9.8                       $7.20                       $1.52
Total                           33                         1,027                   $13.67                  $12.91                   5.9%                       6.0                       $2.03                       $0.43

Small Shop Tenants (leases under ten thousand square feet)
Comparable
Renewal
Leases (a)                      122                         270                    $29.69                  $29.55                   0.5%                       4.7                       $0.88                       $0.02
Comparable New
Leases (a)                      23                          47                     $28.62                  $29.67                  (3.5)%                      8.9                       $19.28                      $9.92
Non-Comparable
Renewal and New
Leases                          52                          119                    $27.77                    N/A                     N/A                       7.4                       $15.24                      $7.63
Total                           197                         436                    $29.53                  $29.57                  (0.1)%                      5.9                       $6.77                       $3.15


(a)Comparable leases are leases that meet all of the following criteria: terms
greater than or equal to one year, unit was vacant less than one year prior to
executed lease, square footage of unit remains unchanged or within 10% of prior
unit square footage, and has a rent structure consistent with the previous
tenant.
(b)Non-comparable leases are not included in totals.
                                       25
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Results of Operations
Comparison of results for the three and nine months ended September 30, 2021 and
2020
The following section describes and compares our consolidated results of
operations for the three and nine months ended September 30, 2021 and 2020. We
generate substantially all of our earnings from property operations. Since
January 1, 2020, we have acquired three retail properties, disposed of two
retail properties and completed partial condemnations at six properties.
The following table presents the changes in our income for the three and nine
months ended September 30, 2021 and 2020.
                                         Three months ended September 30,                               Nine months ended September 30,
                                                                         Increase
                                   2021                2020             (Decrease)                 2021                   2020            Increase
Income
Lease income, net             $     53,965          $ 51,489          $      2,476          $    154,869              $ 143,491          $ 11,378
Other property income                  310               177                   133                   760                    576               184
Other fee income                       863               879                   (16)                2,770                  2,555               215
Total income                  $     55,138          $ 52,545          $      2,593          $    158,399              $ 146,622          $ 11,777


Lease income, net, for the three months ended September 30, 2021, increased by
$2.5 million when compared to the same period in 2020, primarily as a result of
net changes in credit losses and related reversals of $3.8 million, increased
minimum rent of $0.7 million, and increased percentage rent of $0.5 million,
which were partially offset by net decreased GAAP rent adjustments of $2.1
million and decreased recovery income of $0.4 million.
Lease income, net, for the nine months ended September 30, 2021, increased by
$11.4 million when compared to the same period in 2020, primarily as a result of
net changes in credit losses and related reversals of $12.5 million, increased
recovery income of $1.4 million, increased short-term lease income of $0.4
million, and increased percentage rent of $0.5 million which were partially
offset by decreased minimum rent of $1.6 million and net decreased GAAP rent
adjustments of $1.8 million.
The following table presents the changes in our operating expenses for the three
and nine months ended September 30, 2021 and 2020.
                                         Three months ended September 30,                                 Nine months ended September 30,
                                                                         Increase                                                           Increase
                                   2021                2020             (Decrease)                 2021                   2020             (Decrease)
Operating expenses
Depreciation and amortization $     21,318          $ 22,170          $       (852)         $     65,000              $  66,697          $     (1,697)
Property operating                   8,143             6,677                 1,466                23,926                 19,969                 3,957
Real estate taxes                    8,490             8,940                  (450)               24,781                 24,647                   134
General and administrative           8,782            10,106                (1,324)               29,043                 25,688                 3,355
Direct listing costs                 1,704                 -                 1,704                 1,704                      -                 1,704

Total operating expenses $ 48,437 $ 47,893 $ (1 160) $ 144,454

              $ 137,001          $      5,749


Property operating expenses, for the three months ended September 30, 2021,
increased $1.5 million when compared to the same period in 2020 primarily as a
result of increased non-recoverable expenses of $0.9 million and increased
recoverable expenses of $0.6 million.
Property operating expenses, for the nine months ended September 30, 2021,
increased $4.0 million when compared to the same period in 2020 primarily as a
result of increased non-recoverable expenses of $2.0 million and increased
recoverable expenses of $2.4 million, which were partially offset by decreased
lease termination expenses of $0.4 million
General and administrative expenses for the three months ended September 30,
2021, decreased $1.3 million when compared to the same period in 2020, primarily
as a result of decreased joint venture related lease commission expense of $1.5
million and decreased stock administration and professional fees of $0.3
million, which were partially offset by increased long-term incentive plan costs
of $0.5 million.
General and administrative expenses for the nine months ended September 30,
2021, increased $3.4 million when compared to the same period in 2020, primarily
as a result of increased long-term incentive plan costs which was driven by the
expected retirement of our former President and Chief Executive Officer in
August 2021 and the appointment of certain executives in establishing a plan of
succession.
                                       26
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During the three and nine months September 30, 2021, we recognized $1.7 million
of costs relating to the subsequent direct listing of our common stock on the
NYSE.
The following table presents the changes in our other income and expenses.
                                              Three months ended September 30,                                 Nine months ended September 30,
                                        2021                2020             Change, net                2021                   2020             Change, net
Other (expense) income
Interest expense, net             $      (3,999)         $ (4,594)         $        595          $    (11,956)             $ (14,327)         $      2,371
Loss on extinguishment of debt             (400)                -                  (400)                 (400)                (2,543)               

2 143

Provision for asset impairment                -                 -                     -                     -                 (9,002)                9,002
Gain on sale of investment
properties, net                             636               424                   212                 1,516                    668                   848
Equity in earnings of
unconsolidated entities                   1,046               951                    95                 2,441                  1,591                   850
Other income and expense, net                 8               244                  (236)                 (155)                 2,572                

(2,727)

Total other expense income, net $ (2 709) $ (2 975) $ 266 $ (8,554)

             $ (21,041)         $     12,487


Interest expense, net
Interest expense, net, for the three months ended September 30, 2021 decreased
$0.6 million when compared to the same period in 2020, primarily as a result of
repaying the line of credit. For general corporate purposes and to increase our
financial flexibility in light of the COVID-19 pandemic, we drew $150.0 million
on the Revolving Credit Agreement at an interest rate reflecting 1-Month LIBOR
plus 1.05% during the second quarter of 2020. The Company subsequently repaid
$100.0 million and $50.0 million of that draw during the fourth quarter of 2020
and the first quarter of 2021, respectively.
Interest expense, net, for the nine months ended September 30, 2021 decreased
$2.4 million when compared to the same period in 2020, primarily as a result of
declining 1-month LIBOR interest rates on our corporate credit facilities of
$1.8 million. The remaining $0.6 million decrease in interest expense, net is
the result of repaying total mortgages payable of $67.5 million across three
retail properties since January 1, 2020.
Loss on extinguishment of debt
During the three and nine months September 30, 2021, we recognized a loss of
$0.4 million in connection with amending our corporate debt facilities.
During the nine months ended September 30, 2020, we recognized a loss of $2.5
million on the extinguishment of total mortgages payable of $26.3 million on two
retail properties, primarily related to prepayment penalties.
Provision for asset impairment
During the nine months ended September 30, 2020, we identified one retail
property that had a reduction in its expected hold period. We recorded a
provision for asset impairment of $9.0 million as a result of the executed sales
contract price being lower than the property's carrying value. This property was
sold on May 1, 2020.
Gain on sale of investment properties, net
During the three months ended September 30, 2021, we recognized a gain of $0.6
million on the sale of one retail property. During the three months ended
September 30, 2020, we recognized a gain of $0.4 million on the completion of a
partial condemnation at one retail property.
During the nine months ended September 30, 2021, we recognized gains of $0.9
million on the completion of partial condemnations at three retail properties
and a gain of $0.6 million on the sale of one retail property. During the nine
months ended September 30, 2020, we recognized gains of $0.9 million on the
completion of partial condemnations at three retail properties and a loss of
$0.2 million on sale of one retail property.
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities for the nine months ended
September 30, 2021, increased $0.9 million when compared to the same period in
2020, primarily as a result of our share of increased gains on sales of
properties of $0.4 million and our share of the decrease in interest expense of
$1.3 million.

                                       27
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Other income and expense, net
Under the federal legislation enacted on March 27, 2020, known as the CARES Act,
certain limitations on the deductibility of net operating losses ("NOLs")
enacted under prior federal tax legislation have been temporarily rolled back.
As a result of the anticipated NOL carryback claims for our taxable REIT
subsidiaries, total additional tax benefits of $1.2 million were recognized
during the nine months ended September 30, 2020. The remaining $1.5 million
decrease in other income and expense, net is the result of decreased interest
income of $0.6 million and net decreases in all other income and expenses of
$0.9 million.
Net Operating Income
We evaluate the performance of our wholly-owned retail properties based on NOI,
which excludes general and administrative expenses, direct listing costs,
depreciation and amortization, provision for asset impairment, other income and
expense, net, gains (losses) from sales of properties, gains (losses) on
extinguishment of debt, interest expense, net, equity in earnings from
unconsolidated entities, lease termination income and expense, and GAAP rent
adjustments (such as straight-line rent, above/below market lease amortization
and amortization of lease incentives). We bifurcate NOI into Same Property NOI
and NOI from other investment properties based on whether the underlying retail
properties meet our same property criteria.
We believe the supplemental non-GAAP financial measures of NOI, same property
NOI, and NOI from other investment properties provide added comparability across
periods when evaluating our financial condition and operating performance that
is not readily apparent from "Operating income" or "Net income" in accordance
with GAAP.
Comparison of Same Property results for the three and nine months ended
September 30, 2021 and 2020
A total of 54 and 52 wholly-owned retail properties met our same property
criteria for the three and nine months ended September 30, 2021 and 2020,
respectively. NOI from other investment properties in the table below for the
three and nine months ended September 30, 2021 and 2020 includes retail
properties that did not meet our same property criteria.
The following table represents the reconciliation of net income (loss), the most
directly comparable GAAP measure, to NOI, Same Property NOI, and Pro Rata Same
Property NOI for the three and nine months ended September 30, 2021 and 2020:
                                           Three months ended September 30,               Nine months ended September 30,
                                               2021                   2020                   2021                   2020
Net income (loss)                       $          3,992          $    1,677          $          5,391          $  (11,420)
Adjustments to reconcile to non-GAAP
metrics:
Other income and expense, net                         (8)               (244)                      155              (2,572)
Equity in earnings of unconsolidated
entities                                          (1,046)               (951)                   (2,441)             (1,591)
Interest expense, net                              3,999               4,594                    11,956              14,327
Loss on extinguishment of debt                       400                   -                       400               2,543
Gain on sale of investment properties,
net                                                 (636)               (424)                   (1,516)               (668)
Provision for asset impairment                         -                   -                         -               9,002
Depreciation and amortization                     21,318              22,170                    65,000              66,697
General and administrative                         8,782              10,106                    29,043              25,688
Direct listing costs                               1,704                   -                     1,704                   -
Other fee income                                    (863)               (879)                   (2,770)             (2,555)
Adjustments to NOI (a)                            (1,825)             (3,548)                   (5,674)             (4,825)
NOI                                               35,817              32,501                   101,248              94,626
NOI from other investment properties                (920)               (292)                   (3,079)             (2,044)
Same Property NOI                                 34,897              32,209                    98,169              92,582
IAGM Same Property NOI at share                    3,720               3,484                    10,351              10,763
Pro Rata Same Property NOI              $         38,617          $   

35,693 $ 108,520 $ 103,345

(a) NOI adjustments include termination fee income and expenses and GAAP rent adjustments.

                                       28
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Comparison of the NOI components of the same properties for the three and nine months ended September 30, 2021 and 2020

                                               Three months ended September 30,                                                Nine months ended September 30,
                                 2021                2020             Change             Var.                   2021                   2020             Change             Var.
Lease income, net           $     50,577          $ 47,658          $ 2,919                 6.1  %       $    144,696              $ 135,301          $ 9,395                 6.9  %
Other property income                311               181              130                71.8  %                758                    554              204                36.8  %
                                  50,888            47,839            3,049                 6.4  %            145,454                135,855            9,599                 7.1  %
Property operating                 7,813             6,690            1,123                16.8  %             23,118                 19,093            4,025                21.1  %
Real estate taxes                  8,178             8,940             (762)               (8.5) %             24,167                 24,180              (13)               (0.1) %
                                  15,991            15,630              361                 2.3  %             47,285                 43,273            4,012                 9.3  %
Same Property NOI           $     34,897          $ 32,209          $ 2,688                 8.3  %       $     98,169              $  92,582          $ 5,587                 6.0  %


Same Property NOI increased by $2.7 million, or 8.3%, when comparing the three
months ended September 30, 2021 to the same period in 2020, and was primarily a
result of:
•net change in credit losses and related reversals of $3.4 million, and
•increased short-term and percentage rent of $0.4 million, and was offset by:
•decreased minimum rent of $0.3 million, and
•increased non-recoverable expenses of $0.8 million.
During the three months ended September 30, 2021, we recognized net reversals of
estimated credit losses relating to billed rent and recoveries of $2.2 million.
Reversals of estimated credit losses occur when we collect rental payments we
previously deemed not probable of collection. The reduction in estimated credit
losses, or the reversal thereof, reflects the resiliency of our tenants and
markets in which we operate. During the three months ended September 30, 2020,
we recognized credit losses relating to billed rent and recoveries of $1.0
million reflecting our assessment of how the COVID-19 pandemic may impact our
tenants' ability to make future rental payments.
The net increase in short-term and percentage rent when comparing the three
months ended September 30, 2021 to the same period in 2020, primarily reflects
increased short-term leasing arrangements and additional percentage rent from
grocers experiencing heightened sales volumes.
The increase in minimum rent when comparing the three months ended September 30,
2021 to the same period in 2020 is primarily attributable to the decrease in
economic occupancy levels.
In line with our improved results of operations when comparing the three months
ended September 30, 2021 to the same period in 2020, non-recoverable operating
expenses relating to compensation costs also increased, primarily reflecting
both higher property-level employee headcount and compensation costs tied to
earnings.
Same Property NOI increased by $5.6 million, or 6.0%, when comparing the nine
months ended September 30, 2021 to the same period in 2020, and was primarily a
result of:
•net change in credit losses and related reversals of $10.1 million,
•increased recovery income of $1.0 million,
•a net increase in short-term and percentage rent of $0.8 million, and was
offset by:
•decreased minimum rent of $2.5 million,
•increased recoverable expenses of $1.9 million, and
•increased non-recoverable expenses of $1.9 million.
During the nine months ended September 30, 2021, we recognized net reversals of
estimated credit losses relating to billed rent and recoveries of $2.4 million.
During the nine months ended September 30, 2020, we recognized credit losses
relating to billed rent and recoveries of $7.8 million reflecting our assessment
of how the COVID-19 pandemic may impact our tenants' ability to make future
rental payments.
Real estate taxes and recoverable operating expenses, net of associated
recoveries, increased $0.9 million when comparing the nine months ended
September 30, 2021 to the same period in 2020, primarily reflecting the decrease
in economic occupancy levels.

                                       29
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The net increase in short-term and percentage rent when comparing the nine
months ended September 30, 2021 to the same period in 2020, primarily reflects
increased short-term leasing arrangements and additional rent from grocers
experiencing heightened sales volumes.
The decrease in minimum rent is primarily attributable to the decrease in
economic occupancy levels when comparing the nine months ended September 30,
2021 to the same period in 2020.
In line with our improved results of operations when comparing the nine months
ended September 30, 2021 to the same period in 2020, non-recoverable operating
expenses relating to compensation costs also increased, primarily reflecting
both higher property-level employee headcount and compensation costs tied to
earnings.

                                       30
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Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT"), an
industry trade group, has promulgated a widely accepted non-GAAP financial
measure of operating performance known as Funds From Operations ("FFO"). Our FFO
is based on the NAREIT definition. Adjustments for unconsolidated joint ventures
are calculated to reflect our proportionate share of the joint venture's funds
from operations on the same basis.
Core Funds From Operations ("Core FFO") is an additional supplemental non-GAAP
financial measure of our operating performance. In particular, Core FFO provides
an additional measure to compare the operating performance of different REITs
without having to account for certain remaining amortization assumptions within
FFO and other unique revenue and expense items which are not pertinent to
measuring a particular company's on-going operating performance. In that regard,
we use Core FFO as an input to our compensation plan to determine cash bonuses
and measure the achievement of certain performance-based equity awards.
See our Annual Report on Form 10-K for an expanded description of FFO. FFO
Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to
Common Shares and Dilutive Securities is calculated as follows:
                                             Three months ended September 30,                Nine months ended September 30,
                                                2021                    2020                    2021                   2020
Net income (loss)                        $          3,992          $      

$ 1,677 5,391 $ (11,420)
Depreciation and amortization related to investment properties

                              21,107                22,165                   64,328                65,726
Provision for asset impairment                          -                     -                        -                 9,002
(Gain) loss on sale of investment
properties, net                                      (636)                 (424)                  (1,516)                 (668)
Unconsolidated joint venture adjustments
(a)                                                 1,787                 2,110                    5,943                 6,872
FFO Applicable to Common Shares and
Dilutive Securities                                26,250                25,528                   74,146                69,512
Amortization of above and below-market
leases and lease inducements, net                  (1,019)               (2,915)                  (3,404)               (5,763)
Straight-line rent adjustments, net                  (633)                 (329)                  (1,902)                1,039
Direct listing costs                                1,704                     -                    1,704                     -
Adjusting items, net (b)                              758                   217                    2,214                 4,123
Unconsolidated joint venture adjusting
items, net (c)                                        260                    53                      566                   972
Core FFO Applicable to Common Shares and
Dilutive Securities                      $         27,320          $     

22,554 $ 73,324 $ 69,883

Weighted average common shares
outstanding - basic                            71,261,403            71,945,847               71,731,832            72,072,252
Dilutive effect of unvested restricted
shares (d)                                        134,222                63,362                   70,250                     -
Weighted average common shares
outstanding - diluted                          71,395,625            72,009,209               71,802,082            72,072,252

Net income (loss) per common share       $           0.06          $       

$ 0.02 0.08 $ (0.16)
Adjustments per share for FFO Applicable to Ordinary shares and dilutive securities

             0.31                  0.33                     0.95                  1.12
FFO Applicable to Common Shares and
Dilutive Securities per share            $           0.37          $       0.35          $          1.03          $       0.96
Per share adjustments for Core FFO
Applicable to Common Shares and Dilutive
Securities                                           0.01                 (0.04)                   (0.01)                 0.01
Core FFO Applicable to Common Shares and
Dilutive Securities per share            $           0.38          $       

$ 0.31 1.02 $ 0.97


(a)Represents our share of depreciation, amortization and gain on sale related
to investment properties held in IAGM.
(b)Adjusting items, net, are primarily related to loss on extinguishment of
debt, amortization of debt premiums, discounts, and financing costs, net,
depreciation and amortization of corporate assets, and non-operating income and
expenses, net, which includes other non-operating revenue and expense items
which are not pertinent to measuring on-going operating performance, such as
miscellaneous income and settlement income.
(c)Represents our share of amortization of above and below-market leases and
lease inducements, net, straight line rent adjustments, net and adjusting items,
net related to IAGM.
(d)For purposes of calculating non-GAAP per share metrics, the same denominator
is used as that which would be used in calculating diluted earnings per share in
accordance with GAAP. For the nine months ended September 30, 2020, unvested
restricted shares were antidilutive and therefore excluded from the denominator
in the diluted net loss per share calculation in accordance with GAAP.
                                       31
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Liquidity and Capital Resources
Development, Re-development, Capital Expenditures and Leasing Activities
The following table summarizes capital resources used through development and
re-development, capital expenditures, and leasing activities at our retail
properties owned during the nine months ended September 30, 2021. These costs
are classified as cash used in capital expenditures and tenant improvements and
investment in development and re-development projects on the condensed
consolidated statements of cash flows during the nine months ended September 30,
2021.
                  Development and
                   Re-development          Capital Expenditures       Leasing          Total
Direct costs     $          1,967   (a)   $               4,886      $ 4,297   (c)   $ 11,150
Indirect costs                586   (b)                   1,058            -            1,644
Total            $          2,553         $               5,944      $ 4,297         $ 12,794


(a)Direct development and re-development costs relate to construction of
buildings at our retail properties.
(b)Indirect development and re-development costs relate to capitalized interest,
real estate taxes, insurance, and payroll attributed to improvements at our
retail properties.
(c)Direct leasing costs relate to improvements to a tenant space that are either
paid directly by or reimbursed to the tenants.
Short-term Liquidity and Capital Resources
On a short-term basis, our principal uses for funds are to pay our operating and
corporate expenses, interest and principal on our indebtedness, property capital
expenditures, and to make distributions to our stockholders. We will also need
to pay the cash purchase price, and related fees and expenses, in connection
with our up to $100.0 million modified "Dutch Auction" tender offer, which we
commenced on October 12, 2021. We intend to fund the purchase price for shares
of common stock accepted for payment pursuant to the Tender Offer, and related
fees and expenses, from our available liquidity.
Our ability to maintain adequate liquidity for our operations in the future is
dependent upon a number of factors, including our revenue, macroeconomic
conditions, our ability to contain costs, including capital expenditures, and to
collect rents and other receivables, and various other factors, many of which
are beyond our control. We will continue to monitor our liquidity position and
may seek to raise funds through debt or equity financing in the future to fund
operations, significant investments or acquisitions that are consistent with our
strategy. Our ability to raise these funds may also be diminished by other
macroeconomic factors.
Long-term Liquidity and Capital Resources
Our objectives are to maximize revenue generated by our retail platform, to
further enhance the value of our retail properties to produce attractive current
yield and long-term returns for our stockholders, and to generate sustainable
and predictable cash flow from our operations to distribute to our stockholders.
Any future determination to pay distributions will be at the discretion of our
board of directors (the "Board") and will depend on our financial condition,
capital requirements, restrictions contained in current or future financing
instruments, and such other factors as our Board deems relevant. In August 2021,
our Board approved an increase to our annual distribution rate effective for the
quarterly distribution paid in January 2022.
Our primary sources and uses of capital are as follows:
Sources                                                 Uses
•Operating cash flows from our real estate              •To pay our operating expenses;
investments;                                            •To make distributions to our stockholders;
•Distributions from our joint venture investment;       •To service or pay down our debt;
•Proceeds from sales of properties;                     •To invest in 

Properties;

•Proceeds from mortgage loan borrowings on              •To fund development, re-development,
properties;                                             maintenance and capital expenditures or leasing
•Proceeds from corporate borrowings; and                incentives; and

• Interest earned on cash and cash equivalents. • To finance other general uses of the business, including

                                                        direct listing 

costs.


We believe our recent listing on the NYSE will facilitate supplementing these
sources by selling equity securities of the Company if and when we believe
appropriate to do so. We may, from time to time, seek to acquire additional
amounts of our outstanding equity through cash purchases or exchanges for other
securities. Such purchases or exchanges, if any, will depend on our liquidity
requirements, contractual restrictions, and other factors.
                                       32
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Division

During the nine months ended September 30, 2021, we declared distributions to
our stockholders totaling $41.9 million and paid cash distributions of $41.6
million. As we execute on our retail strategy and continue to evaluate our
business, results of operations and cash flows, our Board will continue to
evaluate our distribution on a periodic basis.
On August 5, 2021, our Board approved a 5% increase to our annual distribution
rate effective for the quarterly distribution paid in January 2022. All future
dividends remain subject to the discretion of the Company's Board.See "Part I.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations - Current Strategy and Outlook" for more information regarding our
retail strategy.

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