InvenTrust at BofA Conference: Strategic Moves in Sunbelt Markets

On Wednesday, 10 September 2025, InvenTrust Properties Corp (NYSE:IVT) took the stage at the BofA Securities 2025 Global Real Estate Conference to discuss its strategic positioning and financial performance. The company emphasized its robust presence in the Sunbelt region, with a focus on grocery-anchored shopping centers. While it acknowledged some consumer softness in early 2025, InvenTrust reported strong leasing demand and tenant retention, alongside a notable 30% growth in FFO per share since its 2021 listing.

Key Takeaways

• InvenTrust boasts a 97% lease rate and 95% economic occupancy.
• The company has successfully grown FFO per share by 30% since 2021.
• Strategic capital recycling includes selling California properties and reinvesting in the Sunbelt.
• The firm maintains the lowest leverage in the shopping center space.
• Anticipates 3% to 4% same-property NOI growth.

Financial Results

• FFO per share has increased by approximately 30% since the company’s 2021 listing.
• Enterprise value stands at about $3 billion.
• Same-property NOI has averaged a 5% growth since 2021, with a target of 3% to 4%.
• Leverage is at a low level, around three times on a four basis.
• Capital recycling has yielded over $300 million from California property sales.
• Gross asset acquisitions in 2025 are around $350 million, with more expected by year-end.
• Contractual rent increases contribute 150 to 200 basis points to NOI annually.

Operational Updates

• Tenant retention rate is over 90%, with strong leasing demand allowing rent increases.
• Minimal exposure to bankrupt tenants, with ongoing monitoring of DSW, pet stores, and movie theaters.
• Successfully sold a five-property portfolio in California for over $300 million.
• Reinvestment focuses on the Carolinas, Georgia, and Florida.
• Employs a hub and spoke strategy, operating premier assets in secondary markets from core hubs.

Future Outlook

• Expects 3% to 4% growth in same-property NOI.
• Plans to use free cash flow for external growth and balance sheet expansion.
• Anticipates no significant interest rate headwinds until 2027 due to existing swaps.
• Potential increase in bad debt reserve could impact same-property NOI.

Q&A Highlights

• Current lease rate is at 97.3%, with visibility for maintaining this level.
• Construction costs range from $250 to $350 per square foot, with purchases below replacement costs.
• Plans to enhance AI initiatives in the coming year.
• Sector NOI expected to remain flat over the next year.

InvenTrust’s detailed discussion at the conference provides insights into its strategic focus and financial resilience. For a deeper dive, readers are encouraged to review the full transcript below.

Full transcript - BofA Securities 2025 Global Real Estate Conference:

Samir, Analyst: This is the InvenTrust Roundtable. Happy to have DJ with us here, who’s the CEO of the company. You want to maybe introduce your team?

DJ, CEO, InvenTrust: Yeah, sure. Thank you, Samir. With me today from InvenTrust is Christy David, our Chief Operating Officer, and Mike Phillips, our Chief Financial Officer. I guess I can kick it off with a couple of minutes.

Samir, Analyst: For sure. Yes, I’m opening charts.

DJ, CEO, InvenTrust: If you’re not familiar with InvenTrust, we are about a $3 billion enterprise value, high-quality, open-air shopping center REIT, predominantly, almost exclusively in the Sunbelt region. We have 71 properties, just over 10 million square feet, predominantly grocery-anchored. About 85% of our shopping centers do have some sort of grocery component, and our tenancy is anchored towards essential goods and services. We listed the company in 2021, and since then we’ve grown FFO per share roughly 30% over that time period, at the same time lowering leverage. Our goal is to continue to both grow internally and externally through more acquisitions. We have the platform that can service and hold a lot more properties than 71, and we’re looking forward to taking advantage of those opportunities as they come to fruition.

Samir, Analyst: Thank you for that. I guess maybe as an update, sort of post-earnings, as you talk about what you’re seeing on the ground as it relates to leasing that environment, what are you hearing from retailers given that there’s uncertainty out there still? Help us frame all of that.

DJ, CEO, InvenTrust: Yeah, I’m happy to. Obviously, there has been some softness in the consumer in the early parts of 2025. Good news within our portfolio, we’re not seeing much of any type of distress or any type of slowdown, really any deceleration. We continue to surprise ourselves with lower bad debt than typically has been the case in the past. We were immune to any of the larger discount retail bankruptcies that happened earlier this year. We have no exposure to the likes of Big Lots, At Home, and some of the other companies that did file earlier in the year. From on the ground, we continue to have extremely strong leasing demand.

We are just over 97% leased, over 95% economic occupancy, with more avenues for growth, which is surprising that, you know, we continue to hit a high watermark from an occupancy standpoint, but we do feel like we can continue to march that ever so slightly higher. Even more exciting is as we get closer to frictional vacancy, the demand for our space and our ability to push rents just continues to increase. Our retention rate continues to go higher. We’re just over 90% from a retention, which means we’re signing, we’re doing a lot of renewals with high-quality tenants without a lot of capital out the door, which for us, that just obviously goes straight to the bottom line and accelerates our ability to grow free cash flow.

Samir, Analyst: You mentioned the 97% occupancy, right? You think about a neutral occupancy basis. Help us think through the, you talked about some of the drivers, but talk about your business, how to generate sort of 3% same store NOI growth, more in your sense.

DJ, CEO, InvenTrust: Yeah, I’ll let Mike walk through some of the building blocks. As I mentioned in the onset, we’ve been fortunate enough to be able to really grow this portfolio since listing the company in 2021. We’ve averaged about 5% same-property NOI growth since then. Candidly, obviously 5% in our business is probably not sustainable, but 3% to 4% is. Mike, why don’t you walk through some of those building blocks?

Mike Phillips, Chief Financial Officer, InvenTrust: Yeah, the way we kind of think about our model is the two main drivers on a year-on-year basis is contractual rent bumps. We get about 150 to 200 basis points of contribution to NOI just from contractual rent bumps every year. If we’re staying at 90% retention rate, which is the goal, and we’re getting low double-digit rent spreads on new and renewal leases, that’s another 100 basis points of growth. Those are the two main drivers. We get some benefit from just kind of recurring CapEx and redevelopment in our portfolio, call it 25 to 55 basis points a year as our snow pipeline comes online, goes from leased economic occupancy, that’s another 25 to 50 basis points. We get a benefit on our fixed CAM growth, which is about 4% to 5% for the tenants on fixed CAM growth.

That has typically been about 50 basis points of a benefit to NOI.

DJ, CEO, InvenTrust: As I mentioned, as great as 5% same-property NOI is, I’ll take 3% same-property NOI growth with less capital any day of the week. Although same-property NOI will probably normalize at some point over the next couple of years, we’re hopeful and expect that FFO per share will accelerate.

Samir, Analyst: Is there anything with the Amazon news, you know, the rollout of sort of same-day fresh grocery delivery? Does that help us think about how that impacts the business, or it does not at this point?

DJ, CEO, InvenTrust: It’s a good question. Obviously, Christy and her team spent a lot of time with Whole Foods, and that team is running the Amazon Fresh initiative as well. One of the things that we’ve been very focused on over the last couple of years is making sure not only are we investing in grocery, but we’re investing in centers where the grocers are providing a level of experience. There are plenty of grocers out there that offer convenience and value. We tend to anchor towards ones that are providing some sort of customer experience that makes them more or less a little bit more immune to perhaps that same-day delivery competition. A good example is some of our most recent acquisitions. Obviously, Publix is a big anchor for us in Florida. They do a fantastic job from a consumer experience standpoint. We’ve recently acquired two Wegmans in the Richmond MSA.

If you’re not familiar with Wegmans, it’s a very large format grocer that does an exceptional job on prepared foods and the like. We have plenty of Whole Foods and Trader Joe’s in the portfolio as well. We do expect the same-day delivery and as the logistics continue to improve, I do expect it to continue to grow. We don’t see that as competition. It’s more of a complimentary service to our four walls at our shopping centers.

Samir, Analyst: By the way, I want to keep this interactive. If you guys have any questions, please.

Unidentified speaker: Yeah, five minutes to five minutes to play. You can do the debt of sales.

DJ, CEO, InvenTrust: Thank you. A big initiative for this year was our decision to recycle capital outside of California. We owned six properties in Southern California, both in Northern San Diego, LA, and the Inland Empire. We made the decision probably going back a year and a half or two years to exit out of California, use that cost of capital creatively, and reinvest in markets and assets where the growth profile was higher and we had more conviction in the fundamentals over time. That’s what we’ve seen in the Carolinas and Georgia and Florida specifically. We successfully sold a five-property portfolio. We do have one asset left in California that we’re expecting to sell at the end of the year, brought in proceeds just north of $300 million, and we’ve effectively rotated almost all of it.

Dennis, we’re about $350 million or so gross asset acquisitions this year with the expectation to dig a couple more across the finish line before the end of the year.

Samir, Analyst: Maybe on that California exit, just talk kind of decision to exit, you know, what led to that.

DJ, CEO, InvenTrust: Yeah, it was a difficult decision. If you go back five years, InvenTrust was trying to grow our presence in Southern California and just couldn’t find the right opportunities at the right price to get it to a return that was acceptable for our business. We also, candidly, I’m a native Southern Californian, so I have an affinity to it. California, compared to what we’re seeing in our core Sunbelt markets, has been a little bit more difficult to do business. There have been inflationary pressures, huge inflation specifically. We’ve found better opportunities at better returns. We decided that now was the right time to take advantage of that arbitrage and move into. We sold, I think, two Albertsons, two Kroger banners, a Ralph’s, and one Sprouts. Like I mentioned, we bought a Wegmans, a Whole Foods, and a couple Publix.

We upgraded our grocer anchor, upgraded from a market standpoint, and bought assets that have a similar growth profile to what we’re seeing in the rest of the portfolio.

Samir, Analyst: In terms of the accretion, remind us what, again, I’m sorry, what was the share rate?

DJ, CEO, InvenTrust: You know, what we’ve been guiding to is the cap rate on the California sale was probably somewhere in the mid-fives. We’ve been able to redeploy that capital somewhere closer to 6% or just above that. A nice initial spread, but more exciting is the growth profile underlying the new assets versus the one that we cycled out of.

Samir, Analyst: Can you maybe just talk a little bit more about the upside of those new properties and the NOI list?

DJ, CEO, InvenTrust: Sure. Yeah, so obviously each asset is different. One of the things that at InvenTrust is probably a little bit differentiated to some of our peers is we don’t tend to buy value-add properties. We tend to buy fully stabilized assets. We will buy some vacancy, but more, you know, the majority of the assets that we’ve purchased over the last two years have effectively been 100% leased. What we’re really going in and expecting is little capital outside of the initial acquisition and waiting for roll leases and mark those leases in the market. We like that strategy because almost in every case, going back to 2022, call it, we’ve surpassed our underwriting standards as it relates to where in-place rents are and where market rents are going. That has been the strategy.

I would tell you that the growth profile more or less mimics what we’re seeing in the core portfolio.

Samir, Analyst: In terms of the markets you’re getting into now, how competitive is that market in terms of bids coming in?

DJ, CEO, InvenTrust: It has gotten increasingly competitive. I will say California tends to still be one of the most competitive markets, which was one of the reasons we decided to be a seller instead of an investor in the state. California does, and as it should, get a liquidity premium unlike anywhere else because the assets are very liquid. It’s very easy to buy and sell in California, which is why the pricing remains very, very competitive and very tight. We have seen increased competition, mostly from private operators in some of our core markets, which is why more recently you’ve seen us employ a more hub and spoke strategy, use one of our core markets. I’ll use Charlotte as an example. Charlotte is one of our favorite markets, incredible underlying fundamentals, a lot of businesses coming in, which is supporting a lot of really nice rent growth.

We just recently bought an asset, a Whole Foods anchored asset, one of the nicest assets in Asheville. We can operate it out from our Charlotte hub. You’ll continue to see us do that on a selective basis where we can operate maybe in a secondary market, but one of the premier assets in that secondary market, which obviously always tends to be grocery anchored.

Samir, Analyst: Are there any other markets we need to consider? You talked about the exit of California, but are there, you know, kind of capital recycling? I mean, is there more to do?

DJ, CEO, InvenTrust: It’s probably more of the same of what you’ve seen recently. A couple of the markets that obviously we don’t have a presence in, Nashville. It’s a market that we would love to get in, but it’s priced very competitively. We’ve been very patient in waiting to get into Nashville. We obviously are in the four major markets in Texas. We may add there sparingly. We do have a significant investment in Texas already at close to 50%. Austin is our largest market. We would add selectively there, continue to add selectively there. I think we’ve been spending a lot of our time in Central and West Florida and in the Carolinas.

Samir, Analyst: Any questions here?

Unidentified speaker: Maybe in terms of your acquisition pipeline, what you’re looking at considering, is it just neighborhood grocery center or would you look at like just lifestyle?

DJ, CEO, InvenTrust: Yeah, it’s a great question. Our strategy is the most important piece, and the biggest differentiator for InvenTrust is we’re exclusively in the Sunbelt. That won’t change. We are a little bit more probably format agnostic than maybe some of our peers. We’re predominantly grocery anchored, but we will buy unanchored centers. We will buy the right power center if it’s in the right market. If you were to think of the mix, it’s probably two-thirds core grocery-anchored neighborhood shopping centers and then one-third other types of formats, whether that be power center. We’ve done, we own a couple small unanchored lifestyle centers and then everything in between. The larger the deal size or the larger the asset is, the more core it has to be to our strategy.

Samir, Analyst: It feels like there’s a lot more acquisitions of lifestyle centers these days, right? I mean, you know what I mean? Is that just a function of what’s in the market, like WPG has been selling a lot, or is that like, that’s the format which sort of works now?

DJ, CEO, InvenTrust: I would say it’s a little bit of both. I think lifestyle centers, if they’re the right size, because there are some extremely large lifestyle centers, and some of those have actually transacted recently to your point as well. I do think there’s been more inventory coming to market in that type of format. We’re very careful that it has to be of right size and scale for InvenTrust. The lifestyle centers that we’ve bought have been between $20 million and $50 million, call it 150,000 square feet or so, much smaller than some of the 750,000 square foot centers. We just won’t take that type of risk due to the size of our company at this point in time.

Samir, Analyst: Is there anything next year we need to consider about, or anything? I mean, you guys don’t have a lot of exposure to some of these watch lists or tenant fallout, you know, distressed type tenants. Having said that, is there anything we need to, whether it’s a, you know, shop tenants, the health of the shop tenants, is there anything to consider next year?

DJ, CEO, InvenTrust: Maybe Christy, why don’t you talk about where we’re at from a leasing standpoint, looking into next year and perhaps on the watch list?

Christy David, Chief Operating Officer, InvenTrust: Sure. I think, you know, we have great visibility into our, we have a very healthy current pipeline and great visibility into our next year in terms of leasing and having leasing completed. Most of our expirations actually have renewal options, so we feel very comfortable from that perspective. I’d say when you’re talking about watch lists, as DJ said, we had very minimal exposure to bankrupt tenants this year. We had, you know, one Joann, which was actually purchased at auction, so we had no downtime and no disruption from that perspective. We had two Party City locations that we, you know, honestly already have an LOI on one to backfill, and the other one’s being held open for further redevelopment. As you consider our watch list going forward, you know, we have three DSWs, which are all located in Texas, two in Austin and one in Dallas.

We continue to monitor the pet stores and that concept, but don’t see any real disruption coming in the immediate future. We have two movie theaters that we keep an eye on. One is located in our Houston market and does very well. The other one is in our Southeast Florida in Pembroke Pines. It’s a Regal concept that’s actually putting money into the asset in order to develop it into a bistro concept. We think both of our theaters are well situated. We do think that our disruption should be minimal in terms of our tenant watch list. As far as the small shop spaces, what we’re seeing currently and what we envision, we talk to our tenants regularly, is that we will continue to see just sort of that normal small shop churn that happens from time to time.

No major disruption, no single type of use that we’re concerned about in the small shop life.

DJ, CEO, InvenTrust: Yeah, and the only thing I would add, thanks Christy, is one of the challenges that we’ve gotten from investors, which I think is fair, and I’m sure our peers have gotten the same question, is call it 75 to 100 basis points an appropriate run rate going forward from a bad debt perspective. We always challenge ourselves because our portfolio continues to increase in quality. We’re a much different company and a much different portfolio than we were even four or five years ago. What used to be 100 basis points may not be appropriate anymore. I think we’ve seen over the last several years, most of the open-air shopping center REITs have been lower, have had a materially lower bad debt reserve absent of any bankruptcies than has historically been the case.

I think we’re all a little bit gunshy and waiting for it to normalize again, but that’s something that we’ll continue to assess and think about as it relates to how should we be forecasting our bad debt going forward.

Samir, Analyst: I mean, how much of a concern is DSW? I feel like that’s, and then remind us where I feel like a lot of the bankruptcies we got the space back felt like those rents were lower than where market is. Is DSW more market, or is there even a rent roll down at them?

DJ, CEO, InvenTrust: I can speak for our portfolio. DSW tends to have a lower rent. They actually, we did, they were one of the companies, and I think this isn’t unique to InvenTrust, that we did work with them a little bit through COVID. We got favorable terms in our favor, some economics, some non-economic, and provided them probably with some lower rent, I believe. We have three spaces, as Christy mentioned, all in high-quality centers. The box is very re-leasable, should I say, about 18,000 to 20,000 square feet. It’s a much more plug. You can plug in a new concept quite much easier than you can in some of the other junior anchor boxes. Obviously they’ve been in the news for some of their struggles.

We’re not concerned, certainly not for this year, probably not for next, but it’s something that we’ll keep an eye on and make sure we’re being proactive as it relates to bringing in a new opportunity.

Samir, Analyst: I mean, you guys are in a good spot. If you look throughout the industry, in terms of do they pay, I always thought that in some cases they pay a lot higher rent and maybe that was the concern, but maybe.

DJ, CEO, InvenTrust: I can’t answer that question. I’m not sure.

Samir, Analyst: On the others. Okay. Anything on the balance sheet here?

DJ, CEO, InvenTrust: No, look, I think we’re in a very fortunate spot. Obviously, investment-grade rated. I think we have the lowest leverage in the entire shopping center space at just around three times on a four basis. Obviously, that’s not where we’re going to keep the balance sheet. We’re going to grow into it over time, use the balance sheet to our advantage to continue to grow externally and use free cash flow as well. We got a lot of runway, call it $350 to $400 million on an annual basis for the next couple of years before we actually get anywhere close to our stabilized level from a balance sheet perspective. We’re in great shape. Mike, do you want to talk about the recent refinancing?

Mike Phillips, Chief Financial Officer, InvenTrust: Yeah, a couple of weeks ago we closed on the refinancing of our term loans, the recast of our term loans. They were set to mature in late 2026, early 2027. We worked with the bank group and pushed those out. We’ve got a nice maturity ladder now. Those are five and a half years, so it’ll be 2030 and 2031 when they mature. We have our current swaps in place right now through the initial maturity, late 2026, early 2027. After that, we’ve already forward swapped them at 4.5%.

DJ, CEO, InvenTrust: From a balance sheet perspective, we have no significant maturities until 2029, so in a really, really strong position from a balance sheet perspective.

Samir, Analyst: When I was looking at your numbers for the second quarter, I think percentage rents were up, right?

DJ, CEO, InvenTrust: Yeah.

Samir, Analyst: How do we think about %? I mean, it’s.

DJ, CEO, InvenTrust: Percentage rents is a little tricky because it just depends on when, either when we get information and when the tenant wants to pay us. It is very volatile, so it is very hard to do it from a run rate perspective. Our percentage rent will go down because we have converted some of that percentage rent to real base rent, specifically with one of our largest grocers. Is that fair?

Mike Phillips, Chief Financial Officer, InvenTrust: Yeah, the reason the first three quarters of this year, it’ll look a little bit higher just for that reason. We converted them from percentage rent that we received in the fourth quarter every year to fixed rent that we’ll receive. It’s still technically percentage rent, but we’ll receive it throughout the year now.

Samir, Analyst: That’ll normalize in 2026.

Mike Phillips, Chief Financial Officer, InvenTrust: Yeah.

Samir, Analyst: Help us think through it. Not asking for guidance here, just kind of the building blocks to grow specifically for 2026 as you think about.

DJ, CEO, InvenTrust: Yeah, without getting too ahead of ourselves, look, we’re expecting 2026 to be another solid year from an internal and external growth perspective. Obviously, you know, with our swap still in place, no real interest rate headwinds. Maybe it’s not as much of a headwind as we once thought it would be, but that’s really not until 2027. It comes down to what does the retail landscape look like when we’re assessing the portfolio come January and February as we try and understand what our bad debt reserve should be. The biggest headwind to our business and everyone else’s is the fact that we’ve had no bad debt. At some point, that’s going to reverse itself a little bit, and that will be a small headwind to same-property NOI at some point in time.

Samir, Analyst: Okay, that’s kind of the, when you think about swing factors in the next year.

DJ, CEO, InvenTrust: Even if 75 basis points is the run rate, but we’ve been running at zero, even if we’re at 40 basis points, which is still a really strong year from a bad debt perspective, that is a headwind to the same-property NOI.

Samir, Analyst: Are there any questions?

Unidentified speaker: Steve Cropping said tomorrow, he said 97% lease rate, sales spread or whatever. What do you think is a long-term lease rate? Frictional, so you pop up, you know, spiritual ports of, I hope, 90%. It’s the leasing environment. I know it’s still healthy, but if you have a, do you have something to box, to lease spreads, I’m sure you get to the point the next couple of years, if one’s kind of, I’m saying the same thing for an emergency. What does it look like? We just fell 12%. I know you said it took a decent down that year.

DJ, CEO, InvenTrust: Yeah. No, it’s a good question. I think we continue to surprise ourselves because, you know, I think for a long time, we thought 95% was probably frictional occupancy or full occupancy. What Christy and our operations team has done a fantastic job is finding different uses for space that used to be very difficult to lease, whether it had bad visibility, bad access to parking, or both. There’s always those problematic spaces, no matter what, in any quality center, there’s going to be space that’s a little bit less desirable. Our team’s done a great job either finding a unique use for that space or pricing the rent accordingly. We’re not afraid to take a lower rent, even a percentage rent perhaps, to see if we can make somebody successful in a space that’s predominantly been vacant. That’s how we’ve continued to march that higher.

Dennis, to answer your question directly, we’re at 97.3% today. We do have about 100 basis points of visibility beyond that that’s in the pipeline, not the snow pipeline, but beyond that that’s in some sort of negotiation. We do think we can march higher, but we are getting closer and closer to that ceiling. That’s okay. Going back to my initial point, we’re not banking on occupancy gains and the capital that comes with it to grow our business.

Now that we have a portfolio that we’re satisfied with and a tenant roster that we’re very satisfied with, the goal is to keep those tenants healthy and their businesses healthy, and we can continue to grow rents in a very methodical manner over time with less capital than we’ve had to use in the past, which takes our free cash flow from something that used to be $30 million to something north of $15 million, even $60 million in the future. Yeah, of course. The good news on that is in the past, we’ve had one bidder, and they get to set the rent. Now we have, we’ve had many cases, and the auction process is probably the best example, not just for InvenTrust, but some of our peers, is we’ve had multiple bidders through those auction processes.

You can see that there’s real demand for these 15,000, 20,000 square foot spaces. There’s just no new supply, as we know, and it’s very, very expensive to even build out a new space within an existing center. These tenants, they’re desperate to hit their own growth plans. That’s been a very good dynamic for us in the markets that we’re in. Obviously, the quality of the centers certainly helps as well.

Samir, Analyst: Maybe on that investment side, talk about the costs, how much costs have gone up.

DJ, CEO, InvenTrust: Yeah, it’s hard, you know, not including land. I mean, you know, construction costs have been anywhere between, let’s call it, $250 and $350 a foot. You know, if you’re talking about greenfield development, it’s something much, much higher than that. The reason that we’ve been successful and been, so one, we’re not a developer. We don’t do ground-up development, but we’ve been buying below replacement costs for a long time, and it looks like it’s going to stay that way for the foreseeable future. The cost of construction kind of cuts two ways. One, it’s expensive for us to release space to new tenants, but it’s also keeping the demand in our favor as well.

It’s kind of like, you know, we have to balance how much we’re willing to invest in the space versus how much rent we want to charge, because the worst thing that we can do, especially in a nice part of the cycle like we’re in now, it’s not going to last forever. The last thing we want to do is spend too much capital, put in too high of a gross rent, and then God forbid the cycle turns and or the economy gets even softer and you get space back and you have to put more capital into it, but now you have an above-market rent that you’re trying to, you know, trying to cure for.

Samir, Analyst: In terms of capital allocation, where’s the focus today primarily?

DJ, CEO, InvenTrust: Yeah, so now that we’ve done the recycling out of California, we’ll have probably one or two assets in any given year that we’ll probably exit out of, but most of it’s going to become on balance sheet. We were fortunate enough to do an equity deal last fall. We felt that the cost of capital was in a spot, but most importantly, the opportunity set and the potential uses of those proceeds were going to be accretive to our business and we were going to be able to grow. That bar has gotten higher as private market pricing has continued to be competitive. We have plenty of capacity on the balance sheet, but we will be opportunistic with our cost of equity if we can, but the bar is certainly higher than it used to be.

Samir, Analyst: In terms of power centers today, what are you seeing there? I feel like everybody’s sort of after grocery-anchored. It’s very competitive. Are you seeing more interest in power?

DJ, CEO, InvenTrust: To an extent, going back to your comments on lifestyle centers, there has been more power center inventory that’s come to market as well, and some of the pricing has been rather competitive. I would call it anywhere between low sixes to mid sevens, depending on the quality of the center in the market. The types of power centers we like, very similar to my comments with lifestyle, is ones where maybe they’re about, call it 200,000 to 250,000 square feet, not 600,000 square feet. I think it’s important for us, just having had more exposure to power centers in the past. The larger those centers are, the options become limited because you tend to have every category in your center already.

If that’s the case, if you think about a power center that has six boxes and maybe one large anchor versus some of those larger ones that may have 12 boxes with two anchors, 12 boxes, there’s not that many categories to go around. The ability to backfill is just a lot thinner. Like I said, we will do some power centers. We did buy a nice power center down in Fort Myers last year. It’s a shadow anchor by Home Depot and Target. Fantastic market, a market that we’ve been looking to grow in. Those transactions are going to be very pinpointed and more few and far between than some of the core grocery stuff that we’ve been doing.

Samir, Analyst: Okay, we had a couple of rapid-fire questions.

DJ, CEO, InvenTrust: Sure.

Samir, Analyst: When the Fed does start to cut rates, you expect long-term yields to decline, stay flat, or potentially rise?

DJ, CEO, InvenTrust: I would say stay flat, stay the same.

Samir, Analyst: Okay. AI initiatives, how would you characterize your plans over the next year, higher, flat, or lower?

DJ, CEO, InvenTrust: Higher.

Samir, Analyst: Finally, same-property NOI growth for your sector will be higher, lower, or the same next year?

DJ, CEO, InvenTrust: Where’s the run rate right now? I know where we’re at.

Samir, Analyst: I’ll say it’s been, people have said either flat. I mean, it’s mainly been flat to, yeah, slightly higher.

DJ, CEO, InvenTrust: All right, I’ll go with flat.

Samir, Analyst: Okay. All right. Thanks a lot, everybody.

DJ, CEO, InvenTrust: Thank you.

Unidentified speaker: Appreciate it.

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