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SITE Centers (SITC) Buys Shoppes at Addison Place, Stock Up

·3 min read

Shares of SITE Centers Corp. SITC rallied 1.56% during Tuesday’s regular trading session after the retail REIT announced expansion of its portfolio with the acquisition of Shoppes at Addison Place in Delray Beach, FL, for $40 million. The transaction, which comes as part of the company’s strategy to deploy capital into the convenience-oriented investments in affluent communities with above-average household incomes, was completed last month.

The buyout seems to be a strategic fit as the acquired shopping center is located in one of the wealthiest sub-markets in the Delray Beach community with solid demand drivers. Also, along with local tenants, the property’s tenant roster has a number of reputed national tenants.

This mix of national and local tenants in the roster will likely support steady cash flows from the property. Further, the REIT has ample opportunities to enhance its revenue with limited capital costs from this property given the sub-market rent growth and its near-term expirations.

The retail REIT has also issued an update on second-quarter 2021 operations. Particularly, as of Jun 2, on a pro rata basis, the company’s tenants had paid roughly 98% and 97% of aggregate base rents for April and May 2021, respectively.

Per David R. Lukes, president and CEO of SITE Centers, “Operational momentum continues to build with improvements in collections and overall leasing velocity from the strong results reported in the first quarter.”

Admittedly, the resumption of operations at its shopping centers, high composition of essential businesses at the REIT’s properties, and a substantial percentage of national tenants in the tenant roster have likely supported rent collections.

In fact, necessity-business component has been saving the grace of retail REITs during the coronavirus mayhem and 84% of SITE Centers’ portfolio is anchored by an essential tenant. As such, as of Jun 2, all of its properties were remain open and operating, with 99.8% of tenants (at its share and based on average base rents) open for business, which is marginally up from Apr 16.

Shares of this Zacks Rank #2 (Buy) company have outperformed its industry in six months’ time. The company’s shares have rallied 51%, while the industry has gained 28.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Stocks to Consider

EPR Properties’s EPR Zacks Consensus Estimate 2021 FFO per share has moved 8.3% north over the past 60 days. The company currently carries a Zacks Rank of 2 (Buy).

OUTFRONT Media Inc. OUT carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised 6% upward in the past two months.

Retail Properties of America, Inc.’s RPAI Zacks Consensus Estimate 2021 FFO per share moved 3.7% north in a month’s time. The stock currently carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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