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Cedar Realty Trust Inc (NYSE:CDR)
Q3 2020 Earnings Call
Oct 29, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen welcome to the Third Quarter 2020 Cedar Realty Trust Earnings Conference Call. [Operator Instructions] We will conduct a question-and-answer session following the formal presentation.

I will now turn the call over to Nicholas Partenza. Please proceed.

Nicholas Partenza -- Director, Financial Reporting

Good evening, and thank you for joining us for the third quarter 2020 Cedar Realty Trust earnings conference call. Participating in today's call will be Bruce Schanzer, Chief Executive Officer; Robin Zeigler, Chief Operating Officer; and Philip Mays, Chief Financial Officer.

Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements, and actual results may differ materially from those indicated by such forward-looking statements. These statements are subject to numerous risks and uncertainties, including those disclosed in the company's most recent Form 10-K to the year ended 2019, as updated by our subsequently filed quarterly reports on Form 10-Q and other periodic filings with the SEC. As a reminder, the forward-looking statements speak only as of the date of this call, October 29, 2020, and the company undertakes no duty to update them.

During this call, management may refer to certain non-GAAP financial measures, including funds from operations and net operating income. Please see Cedar's earnings press release and supplemental financial information posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures.

With that, I will now turn the call over to Bruce Schanzer.

Bruce J. Schanzer -- President and Chief Executive Officer

Thanks, Nic. Good evening, and welcome to the third quarter 2020 earnings call for Cedar Realty Trust. It has been a remarkable quarter and year-to-date and I wanted to thank the members of Team Cedar, not to mention our terrific Board of Directors for their focus and efforts on behalf of the company during these unprecedented times.

As you all realize, this has been and continues to be a time of incredible stress, with many folks worrying about contracting a frightening virus, and managing all of the personal challenges this pandemic has engendered. Although, we usually describe our grocery anchored shopping center assets as being resilient, I can proudly say that the members of team Cedar are most valuable assets, have proven themselves to be even more resilient than our shopping centers, as they have performed their jobs with a characteristic focus on everyday excellence, collegiality, and collaboration.

Since the outset of the pandemic, we have focused on a number of pressing matters in order for us to emerge from this period on a strong footing as possible. First and foremost, we have endeavored to help our tenants survive the economic shutdown, and ideally pay their rents or at a minimum agree to a forbearance arrangement, whereby we have the right to collect the rent in the future.

Second, we have awaited the reopening of the real estate debt capital markets in order to arrange the refinancing of our $75 million term loan maturing in February 2021, as well as addressing our other upcoming debt maturities. Third, we have advanced our redevelopment projects, while exploring joint venture arrangements for the initial phases, especially the recently announced DGS building.

Fourth, we have used this period to take a rigorous zero based approach to many G&A categories, and have identified substantial savings that we anticipate benefiting from not only in 2020, but more generally in 2021 and beyond when we see the full-year impact of some of these measures.

Before walking through each of these areas of focus during the pandemic, it is worth reflecting on a remarkable revelation afforded by this period. At Cedar, we have consistently articulated a two pronged long-term business strategy that we have steadfastly pursued for many years through the ups and downs of the market and our stock price performance.

First, we have focused on a core portfolio of grocery anchored shopping centers in the D.C. to Boston corridor, and have therefore systematically divested non-core assets. Second, we have pursued mixed use urban redevelopment projects in high population density submarkets within our D.C. to Boston footprint, with a particular focus on building affordable and market rate workforce housing at these projects.

Remarkably, the pandemic has highlighted the very trends we have anticipated and been building toward with our two pronged strategic plan. Specifically, the accelerated secular demise in many bricks and mortar retail categories has led to grocery anchored shopping centers being the strongest performing category within retail real estate. Notably, our grocer anchors have experienced a growth in sales during this period, and the inline tenants and junior anchors in our centers have benefited from the strong traffic and overall center vitality resulting from the strong grocer performance.

Additionally, the pandemic triggered a wave of de-urbanization from center cities and significant pressure on higher end multifamily, while highlighting the inequality of housing opportunities within our cities, and the growing need for attractive and reasonably priced workforce housing. Thus, the particular multifamily market opportunity which we are targeting with our mixed use projects has grown deeper during this period.

Now some comments on our four primary focus areas over the last few months. First, on the collections front, as was mentioned in our earnings release, we have been particularly effective in growing our collections efforts to 91% for the third quarter. This appears to be among the better collection rates for all retail REITs in the third quarter. Cedar's relatively high degree of success is a direct result of the tirelessness with which the team approach the challenges presented by the pandemic, as well as the aforementioned decision made when we arrived at Cedar back in 2011 to hone our portfolio to focus on a core portfolio of grocery anchored shopping centers in the D.C. to Boston corridor.

At the outset of the pandemic, we formed a cross functional committee within Cedar that engaged with all of our tenants in an effort to make sure that they endure and come out of this crisis as favorably positioned as possible. In addition, this cross functional committee laid the groundwork for a highly detailed and analytical approach that included using legal tools, center and tenant monitoring, as well as repeated tenant outreach. As they say, the proof is in the pudding. And apparently our approach has proven effective as measured by our rent collections over the past two quarters.

Second, on the refinancing front, as we also disclosed in our earnings release this evening, we retired our $75 million unsecured February term loan by putting it on our unsecured revolving credit facility, as we advance a long-term takeout with mortgage debt. We felt this was a prudent move since while we are comfortable that the mortgage debt markets are open and attractive, we didn't want to have to worry about the closing dragging a bit nor do we want to have to deal with the possibility of further dislocation in the capital markets, owing to a second wave in the coming winter months. As Phil will describe, there appear to be interesting and attractive refinancing options for both the term loan, as well as our other near-term financing needs.

Third, as was announced in July, and discussed at our second quarter earnings call, we have finalized a 20-year built-to-suite office deal with DGS at our Northeast Heights project in Washington D.C. This building will serve as an anchor for the project and also represents the first phase of the project. We have been actively engaged with various debt and equity financing sources and are optimistic that we will be able to finalize an arrangement later this year or early next that will allow us to break ground and get started with this exciting project.

More generally, much as our strategic decision early on to focus on grocery anchored to the exclusion of other retail asset types has proven to be a good decision. Our particular redevelopments have proven to be well positioned as we begin to hope we come out of this pandemic period.

Fourth, we have taken a zero based approach to our G&A in evaluating many corporate expenses. A great example of how this approach has borne fruit is our decision to relocate our headquarters office from a building in Port Washington Long Island, where we rent space on a lease expiring in February of 2021 to the back of a Carman's Plaza Shopping Center in Massapequa Long Island, where we are converting a space that has been essentially unrentable during my tenure into office space, which we will occupy rent free.

Considering that our full-year rent expense is approximately $500,000, this is a terrific G&A savings opportunity. More generally, we anticipate reducing year-over-year G&A by an excess of $2 million through the zero based cost savings approach. In sum, we have navigated through this period of unprecedented personal and professional stress remarkably well thus far. First, we have managed to bounce back from the initial shocks to our business with a collections level this past quarter of 91%, representing among the better performances through the third quarter among retail REITs.

Second, we've addressed our near-term debt maturities and are optimistic about closing on a permanent refinancing later this year or in early 2021. Third, we are similarly focused on finalizing both the debt and equity financing needs of our redevelopment projects, especially the DGS building, which will position us to commence the project in early 2021.

Last, we have tightened up our overhead in the face of all distress with full-year G&A savings anticipated to be in excess of $2 million in 2021. Our progress to this point is not an accident. It begins with my colleagues on team Cedar, who have conducted themselves with exceptional resilience and professionalism during this time of great stress. They are supported by decisions we have made many years ago to focus strategically on grocery anchored shopping centers in the D.C. to Boston corridor, and on urban mixed use projects with an affordable or market rate workforce housing component.

In the coming months and quarters, we look forward to announcing continued progress on all these endeavors, while we hope that there is no second wave, and that this terrible pandemic recedes into the rearview mirror.

With that, I give you Robin to provide greater detail on many of these topics.

Robin McBride Zeigler -- Executive Vice President and Chief Operating Officer

Thanks Bruce. Good evening. Not only are we living in unprecedented times, but we are operating shopping centers in unprecedented times as well. While our team has been focused on working with tenants through deferral negotiations and the collections process, we are also laser focused on what happens on the other side of this pandemic.

What do our tenants need from their landlord to maximize their ability to survive this pandemic? How can we help our tenants pursue omnichannel operating measures to hedge their risk and pivot into a new operating environment? What cost savings measures can we put into place that help both the tenants and the landlord from a CAM and capital expenditures standpoint.

These are among the topics we are addressing as we deliberately, thoughtfully and strategically advance our operations. The professionalism of our team has been exemplary as they deal with not only ordinary course business challenges of daily operations, but astutely balancing those with the video conferences, field visits, and the ongoing impact from social unrest in some of our urban markets.

Our centers remained open during the third quarter with 96% of our tenants opened for business. The users that have not reopened are mainly movie theatres, fitness and buffet style restaurants. We have had another successful quarter of rent collections reaching our highest yet collection rates since the inception of COVID of 91%. Moreover, October collections are currently at 91%, which does not reflect one high credit anchor that pays at the end of the month, which will take us to approximately 92.5% for October.

In order to ensure tenant health and occupancy, we have actively engaged with almost all of our over 800 tenants during the pandemic. We completed 105 deferral and waiver agreements through September 30, 2020, totaling $3 million of deferred rent with a required payback beginning over a period ranging between July 2020 and March 2021. The number of months differed averages four months for an average payback period of 10 months. $900,000 of rent was waived as of September 30, 2020, for an average of four months.

These agreements were made with tenants in an effort to not only sustain their viability, but also to achieve some landlord favorable concessions including sales reporting, additional lease term and modification of key lease provisions. Despite the pandemic our leasing momentum remained strong. 32 leases were signed this quarter, eight new deals totaling 72,800 square feet, and 24 renewals totaling 167,300 square feet.

The new deals executed were at a positive spread of 21.5% and include two anchor deal Shoppers Road at Jordan Lane [Phonetic] at a spread of 44% and America Sprayed at Golden Triangle [Phonetic] at a spread of 23%. The renewals were done at a negative spread of 3.1% when analyzed in total. The negative spread is a result of anchor and junior anchor renewals with home goods at New London mall, Goodwill at Groton and Yes! Organic at Shoppes at Arts District, which were done with the objective of retaining these important anchor and junior anchor occupancies and missed the pandemic. The spread increases to positive 2.8% excluding these three tenants.

As of September 30, 2020 our current lease same center occupancy is 91.7%, a 0.2% increase from prior quarter. We continue to have momentum on our redevelopments and value add renovations. At Fishtown crossing Starbucks had their grand opening in September, GameStop and T-Mobile have relocated, Nifty Fifty was delivered in August, and the original Hot Dog Factory was delivered in September.

We expect the IGA grocery store facade renovation to be completed by the end of the year and the remaining facade renovation for the rest of the center to be completed in 2021. Also in Philadelphia, we are making progress on site plan amendments to our Revelry project. Our original site plan was based on a movie theatre anchor. Since the pandemic shutdowns, United Artists Cinema at Revelry has not yet reopened. We are in discussions with the potential replacement anchor tenant for this project, and we expect to regain possession of the theatre space effective in November 2020 incident to the termination of their tenancy. We think that the potential alternate anchor will be a great catalyst for the Revelry redevelopment.

Northeast Heights continues to progress at a steady pace as well. We contunue last -- I'm sorry, we announced last quarter that our lease was executed with the District of Columbia for a 260,000 square foot office building, including ground floor retail for the Department of General Services. This government agency comprises more than 700 skilled professional employees with expertise in the areas of construction, building management and maintenance, portfolio management, sustainability and security at district owned properties. This office building is slated to be built as part of the first phase of Northeast Heights. The DGS lease structure includes a 20-year 10-month term based on a net rent of $22.52 per square foot and a gross rent of $56.43 per square foot, which includes a TI amortization of $14.09 per square foot. Plans are under way to commence construction in early 2021.

The DGS building is a central element of Cedar's vision to realize a true metamorphosis for Ward 7 and is emblematic of the type of neighborhood we are endeavoring to create with Northeast Heights. As always, our team remains focused and motivated to continue to create value even during these unprecedented time.

With that, I will give you Phil.

Philip Mays -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks Robin. Today we announced sequential quarterly improvements in both FFO and same property NOI. FFO increased to $8 million or $0.09 per share, compared to $5.7 million or $0.06 per share reported for the previous quarter. Same property NOI decreased 9.1% over the comparable period in 2019, and marked improvement from the 14.6% decrease we reported in the previous quarter. Both of these improvements were driven by our strong cash collections that Bruce and Robin discussed.

Last quarter, I walked through our cash collections and revenue recognition in a fair amount of detail and received comments that was very helpful in understanding our results. Accordingly, I want to take a minute to once again walk through our revenue recognition in detail.

Our total tenant billings for base rent and recoveries combined for this quarter were $31.6 million. During the quarter, we collected and recognized as revenue $30.1 million or 91% of these billings. Additionally, we recognized another $1.1 million or 3% as revenue that we determined to be collectible, the majority of which is covered by signed deferral agreements. Accordingly for this quarter, we recognize as revenue 94% of our build rent and recoveries for the quarter. The $1.9 million or 6%, that we did not recognize consists of $1.8 million that was not paid by tenants, and which we have determined at this time should be accounted for on a cash basis, and $100,000 that we agreed to waive.

As reminder, just because we have placed certain tenants on the cash basis it does not mean we will not collect anything from them. While some cash basis tenants may fail, we expect some will simply make inconsistent payments or partial payments, which we will recognize as revenue if and when received.

Moving to the balance sheet. On our prior quarter call, we discussed that we were exploring secured debt to refinance our $75 million term loan that was scheduled to mature in February of 2021. As the secured financing market has opened for pressured anchored shopping centers with high cash collection rates, we have engaged with two financial institutions to assist with placing secured debt. We are working diligently toward closing secured loans in amount equal to or greater than $75 million in early 2021.

To that end, earlier this week, we utilized our revolving credit facility and retired the $75 million term loan scheduled to mature in February of 2021. Our revolving credit facility matures in September of 2021 and has a one year extension option. Accordingly, as Bruce noted, this provides us with flexibility concerning the timing of closing these secured loans. And they've been a second wave of COVID should again temporarily dislocate the capital markets.

Another note worth the balance sheet matters, receivable we now have for deferral agreements. As Robin noted, we have signed deferral agreements for $3 million, of which approximately $250,000 was repaid this quarter, and $250,000 relates to the remainder of the year, resulting in us carrying a $2.5 million receivable for deferral agreements at the end of this quarter. The vast majority of this receivable is scheduled to be repaid in 2021, with approximately $700,000 in each Q1 and Q2 of 2021, and approximately $500,000 in each Q3 and Q4 of 2021. The collection of these amounts will increase our cash flows from operations in 2021, but will not impact earnings as they've already been recognized.

One final note, as noted in our press release, our Board of Directors has approved a one for 6.6 reverse common split to be completed prior to the end of this year. This reverse split will not only assist with maintaining compliance with the New York Stock Exchange listing requirements, but will also reset our share price above the $5 minimum requirement of some investment funds and do so while keeping more than 10 million shares outstanding to assist with trading liquidity.

With that, I'll open the call to questions.

Questions and Answers:

Operator

Thank you. We'll now begin the question-and-answer session. [Operator Instructions] The first question comes from Todd Thomas of KeyBanc Capital Markets. Please go ahead.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Hi. Good afternoon. Bruce, first question, you know you mentioned that you expect to be in the position to break ground on the DGS office building in early 2021. Can just provide us an update on your thinking around funding that build out and sort of how you're weighing all of your options today?

Bruce J. Schanzer -- President and Chief Executive Officer

Thanks Todd, and appreciate you calling in and asking about that. With respect to DGS, the plan is fairly simple. We're speaking with your classic capital partners on the equity side, with whom we'll partner. And then we'll couple that equity joint venture with construction financing. So fairly straightforward and we're in the process of advancing all those conversations.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Is there any update on pre-leasing for the ground floor retail? And are you moving forward -- I believe there were some other phases of Northeast Heights. Are you moving forward at all and making progress on additional phases at this time?

Bruce J. Schanzer -- President and Chief Executive Officer

I will let Robin take that one.

Robin McBride Zeigler -- Executive Vice President and Chief Operating Officer

Hi, Todd. How are you? We are actually looking at relocating several of our East River tenants to the ground floor of DGS. And we're in the middle of negotiating some of those deals. So it would be the Dennis [Phonetic] one of the banks and a couple of the other tenants that are existing, East River tenants that we want to keep on the project, we're looking at moving into the ground floor of DGS.

If we complete that relocation program, we would have about 5000 square feet left in the DGS retail. And we're looking at fast casual restaurants, service type users, [Indecipherable] the type of service providers that would be conducive to office tenancy, as well as fast casual type restaurants for the balance of the 5000 square feet.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay, that's helpful. In terms of dispositions, I was just wondering if you could talk a little bit about the market for asset sales today. In general, what you're saying, whether we should expect to see an increase in activity in the coming months, and then maybe you could just touch on Glen Allen and maybe talk about pricing for that disposition.

Bruce J. Schanzer -- President and Chief Executive Officer

Sure. The Cedar disposition program is one topic and then I can give you a little bit of color around what's happening in the market more generally, just because as I've described in the past, we pretty carefully track all the deal activity in our market. The transactions that we have been advancing are pretty consistent and as much as they are all single asset pad deals. And generally speaking, are intended to address just some fairly simple liquidity concerns that we had as everybody else did at the outset of the pandemic as we started marketing some pads and were able to get reasonably compelling offers on them. And are now closing on those deals that we took to market in the spring.

In terms of Glen Allen in particular, that asset close, it was a net lease publics and it closed in the mid-five's. In terms of the bid, again, I don't notice that's very reflective of anything other than just the appetite for high credit quality, net lease grocers. The market more generally for grocery anchored centers is fairly strong in our market right now. So while there hasn't been a huge amount of transaction activity, there are a number of deals that we've been tracking that are teed up. Many of these deals are in the low seven's, there's a deal that we're tracking right now. That's in the low six's. These are generally speaking grocery anchored centers, much like our assets, they've had pretty strong collections through the pandemic period.

And one of the things that we're seeing, which I think is supportive of this type of pricing is that, the financing markets are fairly receptive to these types of assets as Phil described. So when you have high cash collections grocer anchored centers, it seemed to have been fairly successful navigating through the pandemic. You've had a real world stress test of an asset and that is something that lenders find encouraging.

So again, although these aren't Cedar assets, these are very comparable to the assets that we own. And we are seeing a fairly healthy transaction market right now, some of these get close, and some of these are teed up to close. And so I think as we get toward the end of the year, we'll probably have some clarity around nothing else, what is the warranted cap rate for Cedar's portfolio, and therefore, maybe have an even crisper view on the disconnect between our share price and our net asset value.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay, that's helpful. And Phil, sort of I guess pro forma, the paid down of the February term loan on the line, I was just wondering how much borrowing capacity you have remaining on the line today? I don't know if there is any -- there any constraints against drawing down the remaining amount that's available? And also can you talk a little bit more about the terms you're seeing in the mortgage market today. It sounds like it's sort of pegged for like an early '21 transaction and of at least $75 million, but can you just talk a little bit more about some of the terms you're seeing in the market today and what that might look like?

Philip Mays -- Executive Vice President, Chief Financial Officer and Treasurer

Yes Todd. So in our Q we disclosed the remaining capacity on our line, which is about almost $45 million as we speak, plus we have some cash, so approaching kind of $50 million of liquidity there between the line capacity and cash on hand.

Just keep in mind, that is a rolling four quarter covenant. So that could turn -- that will turn down over the next couple of quarters as we get four full quarters in the calculation that are impacted by COVID. But I think that roll down will be offset with the pad sales that Bruce discussed. Along with -- I think you're familiar, our San Souci asset in San Souci Maryland has a JV partner, but the way the waterfall work was completely buried. So we expect for -- a couple hundred thousand dollars to close out the buyout of that partner. And once that occurs, we'll be able to add that to the borrowing base.

So when you combine that four along with the pad site, that should mitigate any roll down and NOI over the next six months. And I don't mean roll down like sequentially, but just as you get four full quarters into that calculation that's been negatively impacted by COVID.

With regard to the secured financing, yes, for grocery anchored centers with other tenants that fall kind of in this central bucket with high cash collections, there is CMBS appetite, there's a live company appetite. Generally loan to values are 65%, but let's just say 60% to 65%. It can -- if there is a fair amount of term left on the anchors, you can get some IO with that, maybe significant IO depending on the remaining term. And rates generally kind of in the mid-three's. I mean, that's what we're seeing right now.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay, it's helpful. And just one last one, Phil. The percentage rent in the quarter was higher -- meaningfully higher? Is that sales based rent that you moved certain tenants to in the quarter?

Philip Mays -- Executive Vice President, Chief Financial Officer and Treasurer

Yes, they was a couple of tenants that moved from base rent to percentage rent. One in particular, because of a core tenancy provision makes up a lot of that -- the majority of that, and that core tenancy provision should be corrected, I think, around year end. But that's why it was elevated. It just moved from base rent, it was more geography, and that moved from base rent to percentage sales, did roll down a little when the guy got to convert to percentage sales, but that should correct itself around the end of the year.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay. Great. All right. Thank you.

Bruce J. Schanzer -- President and Chief Executive Officer

Thanks, Todd.

Operator

Thank you. [Operator Instructions] The next question comes from Floris Van Dijkum from Compass Point. Please go ahead.

Floris Van Dijkum -- Compass Point -- Analyst

Hi. Good afternoon, guys. Thanks for taking my question. Quick update, obviously, a very -- I think investors would be very keen to hear about the refinancing. It sounds like it's going to go via CMBS. And it sounds like there's -- based on the numbers you're talking about, it's not punitive, which would be very encouraging. Maybe if you can -- you've got -- you have number of assets held for sale, how much liquidity you think you can raise? And timing wise, if you were to get rid of the four assets that you listed held for sale?

Bruce J. Schanzer -- President and Chief Executive Officer

I guess I'll take that. These are assets that are all fairly small, but as you could see them with the activity, since the commencement of the pandemic, these singles do add up. And so, for example, we've been able to raise about $30 million since the beginning of the pandemic, just selling off relatively small assets. And I would suspect that these four assets are probably going to be, call it, in the high teens to around $20 million in total when -- if and when they were all divested.

More generally, Floris, the way to think about it is that, we approach this facet of our portfolio management, the balance sheet management pretty dynamically. Again, the back story behind how these pads came to be sold was really that when the pandemic started not knowing what the future look like, but recognizing the deadline for 10/31s was extended, the financing market for single tenant net leased assets was still pretty frothy. We thought it made sense to bring those assets to market in order to tap the capital available in that market at a relatively low cost. That's something that we continue to monitor, obviously, as Phil has described, and I'm going to ask him to go into a little more detail in the financing of these particular -- the particular financing that we're looking at for later this year or early next. At this point, we have other sources of capital.

And so while we're continuing to advance the assets that are held for sale, the notion of continuing to bring out other assets is something that while we monitor we're not as actively pursuing.

Phil, I don't know if you want to comment a little bit on the secured financing or expand on what you said earlier.

Philip Mays -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Floris, I think, you'll see us have a preference for a life company secured debt over CMBS. But we will be looking at both, but definitely toward -- with a preference toward the life company. To extent [Indecipherable], I don't want to get to all the math around our revolver and line of credit, but to the extent we're around at 65% loan to value, we generally pick up a little incremental capacity on our revolver when we do that. To extent, we're down around the 60% loan to value, it's generally close to neutral as far as creating additional capacity. Right now, we are seeing loans close at 65%. So if the market holds steady here, we should be able to play some secured debt on properties and turn out the line a little bit. And maybe even pick up a little capacity on top of that.

Floris Van Dijkum -- Compass Point -- Analyst

Thanks Phil. That's helpful. And just -- do you expect the people who will be the buyers of your assets that are held for sale? Are those financial assets in your view or are those going to be cash buyers?

Bruce J. Schanzer -- President and Chief Executive Officer

Floris that's a great question. Some of these assets are definitely being sold per pound, and those will be cash buyers or low value assets. I think the stabilized assets that are more rural could probably be financed. Again, I'm not an expert in this, but just at this point are becoming pretty knowledgeable about this market. And just based on what we're hearing, they could probably be financed, but not at that kind of level that from an LTV perspective that we're seeing with respect to the assets that are part of our core portfolio that we're looking to finance. So, you could probably put some debt on it. But again, it wouldn't be at that 65% level, again, based on just what we're seeing in the market right now.

Floris Van Dijkum -- Compass Point -- Analyst

Right. One last question, in terms of your leasing, obviously, very encouraging new lease spreads? I noticed the TI numbers were down as well. I'm just [Indecipherable] is it sustainable or where there some one-offs in there?

Bruce J. Schanzer -- President and Chief Executive Officer

I think Robin [Multiple Speech]

Robin McBride Zeigler -- Executive Vice President and Chief Operating Officer

So I...

Bruce J. Schanzer -- President and Chief Executive Officer

We are no together, but we are sort of hand signaling to each other.

Robin McBride Zeigler -- Executive Vice President and Chief Operating Officer

Yeah, So forgive our dance is not as elegant as it sometimes is. Related to leasing and TI, I never want to have a crystal ball from quarter-to-quarter as far as how that will be. I mean, we always look at each deal strategically, and making sure that we are getting the best net effective rent on each deal as it comes through and making sure that for each deal that we're getting the highest rent that we can get and paying the least amount of capital to attract that tenancy.

So, as far as picking a trend and saying that, TI will be lower any specific dollar amount for the same foreseeable future. I wouldn't -- I wouldn't say that, but I wouldn't necessarily say it's going to be higher either. What I would say is that, the same strategic thought and approach that we take on a deal-by-deal basis, we will continue from quarter-to-quarter.

Floris Van Dijkum -- Compass Point -- Analyst

All right. Thanks, Robin.

Operator

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Bruce Schanzer for closing remarks.

Bruce J. Schanzer -- President and Chief Executive Officer

Thank you all for joining us this evening. We wish you all good health and look forward to continuing to advance the interests of Cedar and its shareholders in the months ahead.

Operator

[Operator Closing Remarks]

Duration: 40 minutes

Call participants:

Nicholas Partenza -- Director, Financial Reporting

Bruce J. Schanzer -- President and Chief Executive Officer

Robin McBride Zeigler -- Executive Vice President and Chief Operating Officer

Philip Mays -- Executive Vice President, Chief Financial Officer and Treasurer

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Floris Van Dijkum -- Compass Point -- Analyst

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