On May 2, 2024, CTO Realty Growth Inc (CTO, Financial) announced its first-quarter earnings, revealing a substantial improvement in financial performance compared to analyst expectations. The detailed earnings report, available in the company's recent 8-K filing, highlights a notable turnaround with a reported net income per diluted share of $0.20, against an anticipated loss of $0.03 per share.
Company Overview
CTO Realty Growth Inc, headquartered in Florida, is a real estate investment trust (REIT) known for its diversified portfolio of income properties across the United States. The company's assets include approximately 2.7 million square feet of leasable space, focusing on high-growth markets. CTO's strategic operations encompass income properties, management services, and commercial loans and investments.
Q1 Performance Highlights
The first quarter of 2024 was marked by robust operational achievements for CTO, with a reported net income of $5.842 million, a stark contrast to the $5.993 million loss recorded in the same quarter the previous year. This 197.5% increase significantly outperformed market expectations. Core Funds from Operations (Core FFO) per diluted share also saw a healthy rise from $0.39 to $0.48, and Adjusted Funds from Operations (AFFO) per diluted share increased from $0.43 to $0.52.
CTO's aggressive growth strategy included the acquisition of two retail properties, investing a total of $71.0 million. These acquisitions add 319,066 square feet to its portfolio and are expected to yield an 8.0% cash cap rate. Additionally, the company sold a property for $20.0 million, realizing a gain of $4.6 million.
Operational and Strategic Developments
Leasing activity remained strong with 15 comparable leases signed, covering 94,669 square feet and achieving a 68.2% growth in comparable rent per square foot. The company's leased occupancy rate improved to 94.3%, up from 93.3% at the end of 2023. These figures demonstrate CTO's effective asset management and robust market demand.
John P. Albright, President and CEO of CTO, commented on the quarter's successes, noting the impact of strong acquisition activities and leasing efforts which have led to increased guidance for full-year Core FFO and AFFO.
"We are pleased with our strong acquisition activity to start the year... Due to positive momentum in our leasing efforts and strong Same-Property NOI growth in the first quarter, we have increased our full-year Core FFO and AFFO guidance."
Financial Position and Future Outlook
The company's balance sheet remains solid with a total debt balance of $483.8 million as of May 2, 2024. CTO also revised its full-year 2024 guidance upwards, reflecting confidence in its operational strategies and market conditions.
Overall, CTO Realty Growth Inc's first-quarter results not only exceeded analyst expectations but also positioned the company for sustained growth in 2024. The strategic acquisitions and robust leasing activity underscore the company's strong market presence and operational efficiency, making it a noteworthy entity in the REIT sector.
For more detailed information on CTO Realty Growth Inc's financial performance and strategic initiatives, investors and interested parties are encouraged to view the full earnings report and listen to the upcoming earnings call scheduled for May 3, 2024.
Explore the complete 8-K earnings release (here) from CTO Realty Growth Inc for further details.
