Earnings call transcript: CTO Realty Growth Q1 2025 reports stable EPS

CTO Realty Growth Inc., a $596 million market cap real estate company known for its impressive 8.4% dividend yield, reported its financial results for the first quarter of 2025, meeting analysts’ expectations with an earnings per share (EPS) of $0.01, matching the forecasted EPS. The company’s revenue reached $35.81 million, surpassing the forecast of $34.88 million. Following the announcement, the company’s stock experienced a modest increase of 0.55%, closing at $18.10.

According to InvestingPro, CTO has maintained dividend payments for 50 consecutive years, demonstrating remarkable consistency. InvestingPro analysis reveals 8 additional key insights about the company’s performance and outlook.

Key Takeaways

• CTO Realty Growth’s Q1 2025 EPS matched analysts’ forecasts.
• The company reported higher-than-expected revenue at $35.81 million.
• Stock price increased slightly by 0.55% following the earnings announcement.
• Core FFO rose to $14.4 million, up from $10.7 million in Q1 2024.
• Net debt to EBITDA improved to 6.6x.

Company Performance

CTO Realty Growth demonstrated solid performance in Q1 2025, with a notable increase in Core Funds From Operations (FFO) to $14.4 million, up from $10.7 million in the same quarter last year. The company achieved impressive revenue growth of 14.11% over the last twelve months, and InvestingPro data shows an overall Financial Health Score of "GOOD." Despite a slight decrease in Core FFO per share from $0.48 to $0.46, the company maintained strong liquidity, with nearly $140 million available. The retirement of convertible notes for $71.2 million further strengthened its financial position.

Financial Highlights

• Revenue: $35.81 million, exceeding the forecast of $34.88 million.
• Earnings per share: $0.01, in line with expectations.
• Core FFO: $14.4 million, up $3.7 million from Q1 2024.
• Liquidity: Nearly $140 million.
• Net debt to EBITDA: 6.6x, improved from the previous year.

Earnings vs. Forecast

CTO Realty Growth’s actual EPS of $0.01 met the forecast, while revenue surpassed expectations by approximately $930,000. The modest revenue beat indicates a positive trend in the company’s financial health, aligning with its strategic initiatives.

Market Reaction

Following the earnings announcement, CTO Realty Growth’s stock price rose by 0.55%, reflecting investor confidence in the company’s performance and future prospects. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels. The stock remains within its 52-week range of $16.12 to $21.15, highlighting stability amidst market fluctuations.

Outlook & Guidance

For the full year 2025, CTO Realty Growth projects Core FFO per share between $1.80 and $1.86, and Adjusted Funds From Operations (AFFO) per share between $1.93 and $1.98. The company is focused on high-quality acquisitions and anticipates an investment volume of approximately $200 million.

Executive Commentary

John, an executive at CTO Realty Growth, noted, "Cap rates have stayed consistent or have gone lower," indicating a favorable investment environment. He also mentioned, "The market backdrop for the shopping center space is very strong on the investment side," suggesting continued growth opportunities.

Risks and Challenges

• Potential market saturation in key regions.
• Economic downturns affecting tenant demand.
• Rising interest rates impacting borrowing costs.
• Challenges in leasing vacant spaces from recent bankruptcies.
• Dependence on successful execution of acquisition strategies.

Q&A

During the earnings call, analysts inquired about the potential sale of office properties by year-end and the estimated leasing CapEx of $9-12 million. Executives highlighted the strong investment opportunities and the typical one-year lease-up time for new properties.

The company remains optimistic about its strategic direction, with a focus on expanding its portfolio and enhancing shareholder value.

Full transcript - CTO Realty Growth Inc (CTO) Q1 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the CTO Realty Growth First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jenna McKinney, Director of Finance. Please go ahead.

Jenna McKinney, Director of Finance, CTO Realty Growth: Good morning, everyone, and thank you for joining us today for the CTO Realty Growth First Quarter twenty twenty five Operating Results Conference Call. I would like to remind everyone that many of our comments today are considered forward looking statements under federal securities laws. The company’s actual future results may differ significantly from the matters discussed in these forward looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company’s Form 10 ks, Form 10 Q, and other SEC filings. You can find our SEC reports, earnings release, supplemental, and most recent investor presentation on our website at ctoreit.com.

With that, I will turn the call over to John.

John, Executive (likely CEO), CTO Realty Growth: Thanks, Jenna. I am pleased to share that CTO produced another strong quarter across all areas of our business, once again driven by investment volume and leasing activity. Beginning with investment activity during the quarter, we acquired Ashley Park for $79,800,000 at the going in cash cap rate near the high end of our guidance range. Ashley Park is a 559,000 square foot open air lifestyle center located in Newnan submarket of Atlanta, anchored by well known national brands. Further, Ashley Park has many of the attributes we look for in acquisitions, including lease up potential in place below market rents in a base that’s significantly below replacement costs.

More specifically, we have active tenant interest for nearly half of the approximately 40,000 square feet of vacancy. Approximately 200,000 square feet of the shop space paying below market rent, of which 100,000 square feet have no contractual options. And our acquisition basis is approximately $140 per square foot. Accordingly, we are encouraged by the opportunity that this center provides to grow NOI. In addition, we continue to have a strong pipeline of potential acquisitions across our target growth markets in the Southeast and Southwest.

On the leasing front, we signed more than 112,000 square feet of new leases, renewals and extensions and average rent of $24.14 per square foot, almost 25 percent higher than our in place portfolio average of $19.41 per square foot. Our leasing results continue to demonstrate the strong tenant demand for our high quality properties within our markets. I would now like to provide an update on our anchor leasing activity. As you may recall, we have a unique mark to market opportunity related to the 10 anchor spaces that were leased to several tenants that filed for bankruptcy near the end of twenty twenty four and early twenty twenty five. ’1 of these spaces, former Joann’s at Price Plaza in Houston is in line to be assumed by a national retailer pending court approval.

With regards to the other nine spaces, we have executed leases for two, expect to have two more leases shortly and are actively in discussions for the remaining five. Accordingly, our releasing outlook for these anchor spaces remains positive, and we still expect to achieve a positive cash leasing spread of 40% to 60% in total. We also continue to make progress with respect to our 10 acres of undeveloped land adjacent to our shopping center and collection of foresight located in Atlanta. Lease negotiations continue to progress here in addition to anchor spaces, and we look forward to providing more lease updates in the near term. At quarter end, our portfolio was 93.8% leased and 91% occupied.

Our signed not open leasing pipeline now stands at $4,000,000 of annual base rent, representing 4% of cash rents at the quarter end. The rent commencement associated with this pipeline will be weighted towards the second half of twenty twenty five, and along with our anchor releasing will provide a strong tailwind going into 2026. Finally, I want to provide some comments relating to the recent tariff uncertainty. While there is little visibility today on the ultimate resolution, CTO is positioned well with high quality properties and growing markets in a well diversified tenant base. We will continue to monitor the situation as it evolves across the tenant landscape and remain focused on executing our strategy to deliver growth for our shareholders.

And with that, I will now hand the call over to Phil.

Phil, Executive (likely CFO), CTO Realty Growth: Thanks, John. On this call, I will discuss our balance sheet, earnings results and full year 2025 guidance. At quarter end, we had approximately $6.00 $4,000,000 of debt with $120,000,000 or 20% subject to floating interest rates based on SOFR. However, in April, when interest rates temporarily dropped in connection with the initial tariff announcements, we executed two SOFR swaps, fixing SOFR for $100,000,000 of principal at a weighted average rate of 3.32% for five years beginning April 30. These swaps are initially being applied to $100,000,000 of borrowing currently outstanding on our revolving credit facility, reducing the applicable interest rate by nearly 100 basis points from approximately 5.8% at quarter end to approximately 4.8% based on our anticipated leverage and pricing tier.

Turning to our convertible notes. Our 3.875% convertible notes with an outstanding principal balance of approximately $51,000,000 matured on April 15. As previously discussed, due to our common stock price and dividends paid over the term of these notes, they required settlement at a premium. In early April, prior to maturity, we completed a series of privately negotiated transactions with several of the note holders to settle their holdings with a combination of cash and newly issued common shares. At maturity, we paid off the remaining holders solely in cash.

This strategic approach permitted us to generally settle the face amount of these notes in cash and the premium in shares. Ultimately, the convertible notes were retired in full for approximately $71,200,000 consisting of $50,100,000 of cash and $21,100,000 of common equity. This repayment resulted in an extinguishment of debt charge of approximately $20,500,000 that will be recorded in the second quarter. Consistent with past practice, charges related to the extinguishment of debt are excluded from our computation of both core FFO and AFFO. One last balance sheet note.

We ended the quarter with net debt to EBITDA of 6.6 times. While this is slightly elevated from last quarter end as a result of the Ashley Park acquisition, it is still a full turn lower than one year ago. Furthermore, at the end of this quarter, we had almost $140,000,000 of liquidity and with our convertible notes now extinguished, no debt maturing for the remainder of 2025. Moving briefly to operating results for the quarter. Core FFO was $14,400,000 for the first quarter, a $3,700,000 increase compared to the $10,700,000 reported in the first quarter of twenty twenty four.

On a per share basis, core FFO was $0.46 in the first quarter of twenty twenty five compared to $0.48 in the first quarter of twenty twenty four. This change of $02 per share is primarily the result of our reduction in leverage and downtime associated with the re leasing of the anchor spaces. I would like to provide some additional context related to the releasing of our 10 anchor spaces that John mentioned earlier, specifically the timing of when they vacated that is impacting our 2025 earnings. First, as a reminder, four of the spaces were vacated towards the end of twenty twenty four. In 2025, our three Party City locations paid rent through March before vacating and our three JoAnn’s locations paid rent through April.

We recently got back two of our JoAnn’s and a lease for the third, as discussed, may be assumed by a national retailer. This timing is in line with what we expected and is reflected in our guidance. Similar to last quarter, page eight of our investor presentation summarizes the status and leasing upside related to these anchor spaces. Now on to guidance. We are reaffirming our full year 2025 per share outlook for core FFO of $1.8 to $1.86 and AFFO of $1.93 to $1.98 The assumptions underlying this outlook remain consistent with those initially provided.

And with that operator, please open the line for questions.

Conference Operator: Thank you. And our first question comes from RJ Milligan of Raymond James. Your line is open.

John, Executive (likely CEO), CTO Realty Growth: Hey, good morning, guys.

RJ Milligan, Analyst, Raymond James: John, I was wondering if

John, Executive (likely CEO), CTO Realty Growth: you could give us a little

RJ Milligan, Analyst, Raymond James: bit more detail on the anchor space negotiations. I’m curious if any of the recent volatility has maybe put a pause in retailer discussions or if you’re seeing any impact there as you’re looking to re tenant those boxes?

John, Executive (likely CEO), CTO Realty Growth: Yeah, thanks RJ. Surprisingly, at least to me, the leasing activity has been very consistent and very strong. There not been any sort of backup or pause you know tenants whether they’re public or private or you know moving forward and you probably saw the release that Burlington bought a bunch of Party City leases or in bankruptcy, I’m sorry Jo Ann’s and so you know that’s just kind of testament that you know those tenants are moving forward in this market. So anyway everything’s been very good, strong and robust, so I don’t see any problems there.

RJ Milligan, Analyst, Raymond James: Okay, that’s helpful. And then the new lease spreads, obviously a big number And I’m assuming that it was just maybe one big lease that was driving that number higher. But maybe you could give some detail on that.

Phil, Executive (likely CFO), CTO Realty Growth: Yeah, RJ, this is Phil. It was actually two leases, and they made up the bulk of the square footage in the new leases. One of them was replacing one of the anchors that had vacated and another one was where we had a tenant who had no options and wanted to stay but we knew we could mark it up and had someone in waiting there and signed a new lease with them. And those two leases were really like 54,000 square feet out of the 63,000 square feet of new leasing that we signed, and they drove the leasing spread over 80%.

RJ Milligan, Analyst, Raymond James: And so that sort of aligns to the expectation for the pretty healthy spreads on the retenanting of the boxes.

Phil, Executive (likely CFO), CTO Realty Growth: Is that the way to look at it? Yes, it was on the high end of that.

Participant: Great. Thanks. Thanks, guys. Thanks, RJ.

Conference Operator: Thank you. Our next question comes from Rob Stevenson of Janney Montgomery Scott. Your line is open.

Rob Stevenson, Analyst, Janney Montgomery Scott: Good morning, guys. How much CapEx are you guys having to put into those bankrupt tenant spaces that you’re in the process of releasing or have already signed deals on?

Phil, Executive (likely CFO), CTO Realty Growth: Yeah, Rob, it’s Bill. So we have we included the same slide we did last quarter on page eight of our investor deck. And in addition, we say we’re rolling those up 40% to 60%. And as I was just discussing with RJ we were on the high end of that or actually exceeded the high end of that on the one anchor that we signed this quarter. But we also on that same slide disclose the CapEx which we say is 9,000,000 to $12,000,000 range.

If we’re on the high end of the CapEx, we expect to be on the high end of the spreads, obviously. And that includes everything landlord work, PIs, commissions, the full vote when we say 9,000,000 to 12,000,000 on that slide.

Rob Stevenson, Analyst, Janney Montgomery Scott: Okay. And then what is reasonable these days in terms of after you sign the lease getting these guys to be rent paying? Is it a year? Is it nine months? Is it longer depending on the build out?

How should we be thinking about the sort of timeframe? If you announced that you signed somebody in one of these spaces today, how long would it generally be before you start seeing monthly rents?

John, Executive (likely CEO), CTO Realty Growth: So basically, I would say a safe number is in the year, but we are seeing some tenants that are aggressively trying to get into some of these markets and they’re willing to kind of take as is and start really fairly quick. But you know in those certain circumstances you know for us it’s better to get a higher rent, perhaps a better credit and might take longer more to the duration of a year, but a year is a good number.

Rob Stevenson, Analyst, Janney Montgomery Scott: All right. That’s helpful. And then how are you guys thinking about you said that you’re seeing deals out there. How do you guys think about sort of funding that at the moment? Is that sale of existing assets?

And what are your current thoughts on selling the remaining office property? Is there other sort of ways that you’re thinking about funding stuff with the stock at, call it, 18 or so?

John, Executive (likely CEO), CTO Realty Growth: Yes. Mean, look, it’s not a large number, so we can handle it internally with our liquidity, but you touched on the office building, the one office building we have left and in that one we are going to look to sell closer to the end of the year. We’re very close to finalizing a lease there, and so that will give us kind of the runway we need to get the best price. So that’s something that’s objective for us. But other than that we are looking at perhaps recycling some assets into

Phil, Executive (likely CFO), CTO Realty Growth: you

John, Executive (likely CEO), CTO Realty Growth: know better opportunities properties that have been stabilized and you know given that we’re seeing capital come back into the space as we’ve talked about in the previous quarters, we’re seeing pricing of assets are getting very, very sporty. So there’s maybe an opportunity for us to sell a lower cap rate property and recycle into more kind of a higher yielding and opportunistic sort of properties that we’ve been buying lately. A little bit of a combination of things.

Rob Stevenson, Analyst, Janney Montgomery Scott: Okay. And then last one for me. Phil, you said that the three party cities paid through March and the Joann’s paid through April. Combined, what are those sort of what’s the ballpark in terms of what they were paying you on a monthly basis that we need to start deducting on a relative basis as we finalize second quarter estimates here?

Phil, Executive (likely CFO), CTO Realty Growth: Yeah. So the three parties that these combined, when you include the recoveries and all is close to $900,000 a year. And the three Joann’s, I’ll just give you the two because we you know, it looks like one is gonna be assumed. So out of the two, they were paying actually about $600,000 a year on an annual So that would be and the party cities were there for the full first quarter, and they’ll be dropping off all three JoAnn’s paid for April, then two will drop off. I gave you the number of $600,000 on and then even the other one pretty far along.

Rob Stevenson, Analyst, Janney Montgomery Scott: Okay. That’s helpful. Thanks, guys, and have a good weekend.

John, Executive (likely CEO), CTO Realty Growth: You too. Thank you.

Conference Operator: Thank you. And our next question comes from Matthew Erdner of Jones Trading. Your line is open.

Matthew Erdner, Analyst, Jones Trading: Hey, good morning guys. Thanks for taking the question. As we look at the investment guidance, what’s going to kind of drive it to that high range? Expect to see some dispositions if we’re going to see about $200,000,000 in investments or kind of up at that higher end.

John, Executive (likely CEO), CTO Realty Growth: Well, I mean, I think that given that we’re seeing strong leasing activity, that certainly is one component. But as we talked about, that there is a lag there. And we are seeing starting to see a lot more properties coming to market. And so that’s good news is there’s more opportunities out there. Bad news is there’s a lot more competitors, but we think we’re going to find the opportunities where we can connect with something here.

So it’s a little bit of a combination of things. And then obviously the recycling would be something that would be more for next year given the timing. But certainly that’s sort of an easy putt, if you will, to have that sort of calculation done to enhance our growth earnings growth.

Matthew Erdner, Analyst, Jones Trading: Yeah. Got it. That’s helpful. And then, you know, I’m guessing a majority of this would kind of go on the credit facility and you guys don’t really have a problem with taking that up and using the liquidity that you guys have available.

Phil, Executive (likely CFO), CTO Realty Growth: Yeah. So we’ve been initially placed it on

John Massocca, Analyst, B. Riley Securities: the credit

Phil, Executive (likely CFO), CTO Realty Growth: facility. Our bank group is very supportive. And we did $100,000,000 term loan in September. We’ve had conversations with the bank group. And, you know, they’re all eager to put more money out to work.

And so we could easily term out a significant portion of our credit facility very quickly if we needed to to get that liquidity right back.

Matthew Erdner, Analyst, Jones Trading: Got it. That’s helpful. I appreciate it.

John, Executive (likely CEO), CTO Realty Growth: Great. Thank you.

Conference Operator: Thank you. And our next question comes from John Massocca of B. Riley Securities. Your line is open.

Grace Mehta, Analyst, Alliance Global Partners: Good morning.

Phil, Executive (likely CFO), CTO Realty Growth: Good morning.

Participant: So understanding that you left the investment yield guidance unchanged, have you seen anything since the tariff announcement change in terms of cap rates? Or I was thinking particularly the yields on structured investments, just given some of the widening we’ve seen in credit spreads and kind of bond markets?

John, Executive (likely CEO), CTO Realty Growth: Yes. So it’s a little bit of a disconnect between sort of the credit spreads in the bond market as you mentioned and where we’re seeing sort of traditional core assets and really down the fairway sort of retail shopping centers. That market has not seen a bump whatsoever as far as a higher cap rate. Cap rates have stayed consistent or have gone lower. It used to be last year where a property would come to market, brokers would sort of guide to a number and the pricing of the asset would end up being at a lower number than where the brokers are guiding.

Now we’re seeing almost an offset where the brokers are guiding to a number and the assets are trading for higher than their guidance. And so the market the backdrop for the shopping center space is very strong on the investment side, even with everything that’s going on in capital market, so you know what we’re hearing from the debt side as well is that you know the debt property debt has been very supportive from all the credit funds and banks and even CMBS, so you know very it’s another been really disrupted in the capital markets on the shopping center side, yes.

Participant: Okay, understood. And then just because you’re pretty active on the acquisition front last year, I mean, is the kind of non same store portfolio trending in terms of NOI growth?

John, Executive (likely CEO), CTO Realty Growth: I mean, it’s positive. So we’re not seeing any sort of situations where tenants are rolling down their rents. We’re still able to roll them up.

Phil, Executive (likely CFO), CTO Realty Growth: Know

John, Executive (likely CEO), CTO Realty Growth: given especially given where we’re buying assets right I mean like we’re actually actually in Town Center that we just mentioned that in our earnings that you’re buying that you know less than half our replacement cost you know for tenants is still a bargain for the rental rent levels that we purchased that on, so they’re seeing some really some rent shock in other locations, so there’s no resistance to pushing those rents up given that you know they really got a bargain you know five years ago whenever they did their leases. So it’s really catching up to you know today’s markets obviously the macro being that there’s not any additional inventory being delivered and tenants are doing well and you know traffic’s up and sales are up so you know that’s causing the kind of a good backdrop to raise the rents.

Participant: Okay, but if I think of like the acquisitions you did I believe within 3Q of last year, I mean you know what’s kind of the timeline to mark to market on those? I know it’s kind of potentially accelerated by some of these bankruptcies that occurred late last year, but is that kind of something that could happen this year still? Is that something that’s kind of two, three years out just kind of broad strokes?

John, Executive (likely CEO), CTO Realty Growth: Yes, wouldn’t say two or three years out. I would say I think you’re going to start seeing you know especially as we work through these tenants that went through bankruptcy last year and early this year you know as we talked about there’s kind of a year lag so if we’re doing leases now you know you’re talking about early part of next year through the middle part of next year you know I think I think you can kind of see some real movement middle part of next year for sure.

Participant: Okay, I appreciate the color. That’s it for me. Thank you. Thanks.

Conference Operator: Thank you. Our next question comes from Grave Mehta of Alliance Global Partners. Your line is open.

Grace Mehta, Analyst, Alliance Global Partners: Thank you. Good morning. I wanted to ask you on the Ashley Plaza acquisition. I think in the prepared remarks, you talked about some opportunity for lease and potential and then mark to market as well. Can you provide some numbers around how much mark to market upside is for that acquisition?

John, Executive (likely CEO), CTO Realty Growth: Yeah, I would say you know basically we’re seeing opportunities that are you know call it 10 to 20% at least, could be north of that, but you know given that we bought that at such a kind of high cap rate and we have a fair amount of vacancy to work with, we’re not even like that’s not really kind of where we’re concerned about like the mark to market there’s so much you know low hanging fruit just leasing up vacant space and creating more activity at the property. I mean there’s plenty to do with this property without worrying about mark to market leasing. So we’re really happy with this acquisition. It actually has some outparcels and some unanchored outparcels that we can sell after eighteen months and so those that part of the property would kind of trade in the low 6s and so you could see some recycling there to even enhance the acquisition yield even further getting you know pushing that closer to the double digits. So this is one that’s going to keep us well occupied as far as you know value enhancing this acquisition in the next twelve, twenty four months.

Grace Mehta, Analyst, Alliance Global Partners: Okay, second question on the on the releasing CapEx of 9 to 12,000,000, how much of that is already spent and how much you expect to spend this year?

Phil, Executive (likely CFO), CTO Realty Growth: Yeah, very little that’s been spent so far. The tenants generally have to get open and do their work before we start reimbursing them that. So very little of that’s been spent at this point in time.

Grace Mehta, Analyst, Alliance Global Partners: Okay. Thank you. That’s all I had.

Conference Operator: Thank you. Our next question comes from Craig Kucera of Lucid Capital Markets. Your line is open.

John Massocca, Analyst, B. Riley Securities: Yeah. Hey, good morning, guys. John, last quarter, I think you mentioned that the pipeline was almost entirely core property investments, and you really weren’t seeing much in the way of structured investment opportunities. Is

Matthew Erdner, Analyst, Jones Trading: that still the

John Massocca, Analyst, B. Riley Securities: case here heading into midyear?

John, Executive (likely CEO), CTO Realty Growth: We’re starting to see some interesting other opportunities. So it has changed a little bit as far as the character of the investment opportunity. So we’re excited again on perhaps being active in the next kind of three months.

John Massocca, Analyst, B. Riley Securities: Got it. And I think last quarter you sort of handicapped that you thought you might add anywhere from maybe 40,000,000 to $50,000,000 for the year. Is that still kind of your thinking?

John, Executive (likely CEO), CTO Realty Growth: It could be if things go correctly or our way, it could be higher than that.

John Massocca, Analyst, B. Riley Securities: Okay, great. Following up on some of your comments on Ashley Park, are you expecting any meaningful CapEx at the property to achieve some of that low hanging fruit or is it just a little simpler than that?

John, Executive (likely CEO), CTO Realty Growth: Yes, no, there’s no heavy lift on any kind of renovation there, so it’d be light touch CapEx.

John Massocca, Analyst, B. Riley Securities: Got it. And you had some shifting assumptions in your sign that open ABR recognition timing. Should we expect kind of a quiet second, maybe even third quarter? Or how should we think about the cadence there?

Phil, Executive (likely CFO), CTO Realty Growth: Of the sign out open coming online, Craig?

John Massocca, Analyst, B. Riley Securities: Yes.

Phil, Executive (likely CFO), CTO Realty Growth: Yes. It’ll be the second half, it’ll build more so in the third quarter and then fourth quarter.

John Massocca, Analyst, B. Riley Securities: Okay, great. Appreciate the time, Pat.

John, Executive (likely CEO), CTO Realty Growth: Thank you.

Conference Operator: Thank you. This concludes the question and answer session in today’s conference call. Thank you for participating, and you may now disconnect.

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