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DATE

Monday, July 28, 2025 at 9:00 p.m. ET

CALL PARTICIPANTS

Chief Executive Officer — David Lukes

Chief Financial Officer — Conor Fennerty

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TAKEAWAYS

Acquisition activity—Properties totaling $415 million were acquired in Q2 and Q3 2025 to date, surpassing the quarterly run-rate implied by the initial $500 million annual acquisition guidance.

Leasing volume—Nearly 50,000 square feet of new leases were signed in Q2 2025, the highest quarterly total since operating metrics tracking began.

Leased rate—Leased rate increased sequentially to 96.1% in Q2 2025, among the highest in the sector.

Blended leasing spreads—22% blended straight line leasing spreads for the trailing twelve months as of Q2 2025, reflecting both new and renewal activity.

Net operating income growth—Driven by both organic growth and recent acquisitions.

Same property NOI growth—4.4% year-to-date same property NOI growth, attributed to operational outperformance and limited capital expenditures.

CapEx as percentage of NOI—Just over 7% in Q2, with management expecting full-year CapEx as a percentage of NOI to remain under 10%.

Retained cash generation—Nearly $25 million in retained cash before distributions in Q2 2025, highlighting capital efficiency.

Major portfolio investments—Closed a $159 million, 23-property Southeastern U.S. portfolio deal in July 2025 through a relationship-driven transaction.

Investment pipeline—Acquisition pipeline is approximately evenly split between marketed and off-market opportunities, according to management (as of Q2 2025).

OFFO guidance raised—2025 OFFO (non-GAAP) guidance increased to $1.00–$1.03 per share, underpinned by an expected $700 million in full-year investments in 2025.

Financing activity—$300 million in new debt capital raised or pending as of Q3 2025, with a weighted average coupon of 5.1% and a 5.7-year duration.

Liquidity position—Quarter-end net cash position of nearly $430 million in Q2 2025, with total liquidity exceeding $1 billion at quarter-end including pending financings.

Portfolio geography—Acquisitions concentrated in Houston, Chicago, Phoenix, Atlanta, with entry into Dallas and the New York Metro Area.

Tenant quality—Over 70% of the portfolio consists of national credit tenants, supporting stability and diversification.

Acquisition cap rates—Year-to-date blended acquisition cap rate is approximately 6% on forward twelve-month NOI, influenced by individual deal vacancy levels.

Credit rating—Fitch investment grade rating awarded during the quarter, reducing borrowing costs and enabling capital market access.

Debt-to-EBITDA outlook—Management projects year-end debt to EBITDA ratio below 1x, providing substantial acquisition capacity.

Shared service agreement—Grossed up $625,000 in noncash G&A during Q2, offset by matching noncash income; both excluded from G&A targets while agreement is active.

SUMMARY

Curbline Properties(NYSE:CURB) accelerated property acquisitions and achieved record-high leasing volume in Q2 2025, outpacing initial operational and investment guidance. The company closed a 23-property portfolio in the Southeastern United States, demonstrating the ability to source and structure large, relationship-driven deals. The leased rate reached 96.1% in Q2 2025, with a 22% trailing twelve-month blended straight line leasing spread. Sequential NOI increased by over 8% in Q2 2025, and same property NOI grew 6.2% in Q2 2025, both delivered with capital expenditures just over 7% of NOI. Guidance for 2025 OFFO (Operating FFO, non-GAAP) was raised to $1.00–$1.03 per share, supported by approximately $700 million in full-year investments and significant balance sheet liquidity, bolstered by a new Fitch investment grade credit rating and associated debt financings.

Lukes stated, "We do not have a disposition pipeline. Do not expect to be doing capital recycling. And we're not buying anything that we don't want to own over the long term," emphasizing long-term asset retention over transaction-driven portfolio churn.

Management confirmed portfolio acquisitions remain mostly individually selected, with entry into new major markets such as Dallas and the New York Metro Area designed for future scale, not immediate operating leverage.

CapEx discipline remains central to the business model, with Fennerty affirming, "There is no plan for redevelopment or expansion of our construction efforts," and maintaining a CapEx-to-NOI target below 10% for the year.

Lukes said, "If you look at our year to date, we're blending to about a 6% cap rate on forward twelve-month NOI. A lot of that depends on the pool that you're measuring as we go through the year. Even among the assets that we bought, we've ranged from low 5% to high 6%, and a lot of that really just depends on whether there's vacancy."

Operational concentration remains in the largest primary markets, with the top five—Miami, Atlanta, Phoenix, Orlando, and Houston—comprising 44% of annual base rent (ABR).

Fennerty noted, "NOI was up over 8% sequentially in Q2 2025, driven by organic growth and acquisitions," directly attributing outperformance to both internal and external expansion.

Fitch awarded the company its inaugural investment grade credit rating in Q2 2025, further differentiating Curbline Properties from typically private acquirers of convenience centers.

INDUSTRY GLOSSARY

OFFO: Operating Funds From Operations; a real estate sector performance metric adjusting traditional FFO to exclude certain non-operational items.

Cap rate: The yield on a real estate investment, calculated as net operating income divided by purchase price; a primary measure for property transactions.

Leasing spread: The percentage change between new or renewal lease rates and expiring lease rates for the same space.

NOI (Net Operating Income): Rental and other property revenue less property-level operating expenses, before interest and depreciation.

Investment grade rating: A credit rating signifying lower default risk and enabling greater access to capital at reduced borrowing costs.

Shared service agreement: Contractual arrangement for allocating operating expenses and services across related companies following a corporate spin-off.

Full Conference Call Transcript

David Lukes: The last four months have been incredibly active period for the company, that highlight the significant growth potential embedded in Curbline. Specifically, we acquired $415 million of properties in the second quarter and third quarter to date, reported our highest quarterly new leasing volume since we began tracking, and have raised or are in the process of raising $300 million of debt capital. And importantly, in terms of investments, our team on the ground are creatively sourcing and reviewing a larger pool of opportunities, than ever before. Including both marketed and off-market deals. In many cases, working directly with owners, where we can come to an agreement on assets that are consistent with our portfolio characteristics. More on that later.

I'd like to start by thanking our incredible team achieving the results that we reported tonight that support our differentiated investment strategy. Capable of generating double-digit earnings and cash flow growth well above the REIT average for a number of years to come. This growth is underpinned by the economics of the convenience property type which is our exclusive focus. The large addressable market in front of us and our unmatched balance sheet that is aligned with the company's business plan. These ingredients clearly position Curbline to outperform in a variety of macro environments.

I'll walk through operations first, and then conclude with more details on acquisitions before turning it over to Conor to talk more specifically about the quarter, the increase in expectations for 2025 outlook and our balance sheet. We began investing in convenience properties almost seven years ago, recognizing the strong financial performance of the small format asset class both within the retail sector and the broader real estate industry. Demand for the right locations in our property type has produced two noteworthy and differentiated outcomes. First, the capital efficiency of the business is superior to many other retail formats. Desirable small format space not only has high tenant renewal rates, but is also inexpensive to prepare for the next tenant.

In the event there is vacancy. When compared to larger buildings that are generally purpose-built, with longer construction periods, the capital efficiency of our simple business is unique. In other words, less capital is needed to generate the same organic growth rate as the rest of the retail real estate industry, and helps generate compounding cash flow growth for Curbline. To that point, in the second quarter, CapEx as a percentage of NOI for Curbline was just over 7%, which led to almost $25 million of retained cash before distributions. As Curb scales, this retained cash flow will increase providing a durable source of capital that's outsized relative to the company's asset base. Boosting earnings and cash flow.

The second outcome is that our space is highly liquid because of the number of tenants that are willing to take a one to 2,000 square foot shop unit is significantly higher than for purpose-built large format units. This liquidity allows the property type to keep up with inflation remarkably well. Improved tenant diversification, reducing credit risk concentration, and provides an opportunity to drive rent growth as we seek to maximize rental income given the productivity of the unit size.

The strength in demand for our units was highlighted by the depth and the breadth of second quarter leasing volume with almost 50,000 square feet of new leases signed which is our highest level since we began tracking operating metrics for the Curbline portfolio. New deals included leases with Chick-fil-A, Just Salad, Chase, Club Champion, and a variety of other service users. Activity remains wide in terms of tenants seeking to lease space, and includes primarily national service tenants, banks, medical and wellness operators, and quick service restaurants. Net leasing volume pushed the company's leased rate up to 96.1% sequentially, among the highest in the sector, and drove 22% blended straight line leasing spreads for the trailing twelve-month period.

The economics of our business, a high return on leasing capital, and the widest pool of tenants to work with along with significant national exposure, position Curbline, for absolute and relative success throughout a cycle. Shifting to the investment side, which is the second driver of Curbline's growth. Part of the thesis behind the Curbline spin-off was the large addressable yet fragmented market that had not been institutionalized. Not every asset is a fit for the company, but we believe there is a significant opportunity set of properties that do share common characteristics with our existing portfolio including excellent visibility, access, and compelling economics highlighted by a broad available tenant universe limited capital needs.

To that point, since the company's spin-off, Curbline has acquired over $750 million of assets, and demonstrated now for five straight quarters the depth and liquidity of the asset class. With acquisition volume of over $100 million per quarter. Our original 2025 guidance range included $500 million of convenience acquisitions for the year, which equates to around $125 million per quarter. We've obviously significantly exceeded that pace with the acceleration in activity, a function of our marketing efforts, as we've seen a larger number of brokers and individual sellers proactively engage with us. This is a distinct change from the pre-spin environment.

The situation also allows us to work directly with sellers on a timeline and a process that works best for both parties. And has increased the visibility and the volume of our pipeline of investments. To this point, just this past week, we closed on a 23 property portfolio $159 million. Over the last several years, we developed a relationship with the principals of one of the larger sophisticated convenience center owners in the country. That relationship led to a joint effort to structure a transaction of individually selected properties that worked for both sides.

The assets acquired have characteristics consistent with our portfolio and our investment thesis and are located primarily throughout the Southeastern United States in markets that we know well. While portfolios remain unique and difficult to find in the convenient space, our ability to source and structure these unique opportunities further differentiates Curbline, as the trusted partner for owners of high-quality assets seeking liquidity. For the second quarter, Curbline acquired nineteen for $155 million via 17 separate transactions. Investments continue to be concentrated in the affluent markets the Curbline currently operates in already, including Houston, Chicago, Phoenix, and Atlanta.

However, we continue to make acquisitions in new submarkets that share the key characteristics we seek including our first properties in Dallas, and the New York Metro Area, where we hope to scale long term. Average household incomes for the second quarter investments were nearly $137,000 with a weighted average lease rate of over 96%. Highlighting our focus on acquiring properties where renewals and lease bumps drive growth, without significant CapEx. Before turning the call over to Conor, I do want to highlight one of the key differentiating aspects of the Curbline spin-off, which is our balance sheet.

The net cash position at quarter end matches the business plan with almost $430 million of cash and over $1 billion of liquidity, including financings, expected to close in the third quarter. I could not be more opportunistic about the opportunity ahead of us. And with that, I'll turn it over to Conor.

Conor Fennerty: Thanks, David. I'll start with second quarter earnings operations before shifting to the company's 2025 guidance raise and then concluding with the balance sheet. Second quarter results were ahead of budget, largely due to higher than forecast NOI driven by stronger base rent, recoveries and other income. NOI was up over 8% sequentially driven by organic growth along with acquisitions. Outside of the quarterly operational outperformance, and some upside from lower G and A, and higher interest income, there are no other material callouts for the quarter. Highlighting the simplicity of the Curbline income statement and business plan.

In terms of operating metrics, as David noted, leasing volume in the second quarter was extremely strong, even after adjusting for the growth in the portfolio. And given the current pipeline, we expect another strong quarter in terms of volume, and spreads in the third quarter. However, as we've noted each quarter since the spin-off, with this small but growing denominator, operating metrics will remain volatile, and be heavily impacted by acquisitions. That said, overall leasing activity remains elevated, and we remain encouraged by the depth of demand for space which we expect to translate into trailing twelve-month spreads over the course of the year consistent with 2024.

It is important to note that Curb's leasing spreads include all units including those that have been vacant for more than twelve months with the only exclusions related to first-generation space and units vacant at the time of acquisition. Same property NOI was up 6.2% for the quarter, and 4.4% year to date, driven in part by the aforementioned operational outperformance. Importantly, this growth was generated by limited capital expenditures with second quarter CapEx as a percentage of NOI of just over 7%.

For the full year, we continue to expect CapEx as a percentage of NOI to remain below 10% though the third quarter is expected to be higher than year to date levels due to the timing of rent commencements and resulting tenant allowances. Moving to our outlook for 2025. We are raising OFFO guidance to a range between $1 and $1.03 per share. The increase is driven by better than projected operations, along with the pacing and visibility on acquisitions that David mentioned.

Underpinning the midpoint of the range is one approximately $700 million of full year investments funded roughly $50.50 with debt and cash on hand, two, a 4% return on cash with interest income declining over the course of the year as cash is invested, and three, G and A of roughly $32 million which includes fees paid to site centers as part of the shared service agreement.

Conor Fennerty: You will note that in the second quarter, recorded a gross up of $625,000 of noncash G and A expense which was offset by $625,000 of noncash other income. This gross up which is a function of the shared service agreement, and nets to zero net income, will continue as long as the agreement is in place and is excluded from the aforementioned G and A target. In terms of same property NOI, we continue to forecast growth of approximately 2.8% at the midpoint in 2025, but there are a few important things to call out. Similar to our leasing spreads, the same property pool but small, and it's comping off of 2024's outperformance.

And it includes only assets owned for at least twelve months as of December 31, 2024, resulting in a larger, nonsame property pool that is growing at a faster rate on an annual basis driven by an expected increase in occupancy. Additionally, uncollectible revenue was a source of income, in both the third and fourth quarters of 2024. So while base rent growth is expected to accelerate, into the third quarter from the second quarter, uncollectible revenue will be a significant year over year headwind despite limited year to date bad debt activity.

In terms of moving pieces between the second and third quarter, due to the timing of acquisitions and debt capital raised, interest expense is set to increase to about $4 million in the third quarter and interest income is forecast to decline also to about $4 million. Those two factors total roughly a 4¢ per share headwind. Additional details on 2025 guidance and expectations can be found on Page 12 of the earnings slides. Ending on the balance sheet, Curbline was spun off with a unique capital structure that positions the company to execute on its business plan, It differentiates Curb from the largely private buyer universe acquiring convenience properties.

In the second quarter, the company received its inaugural investment grade credit rating from Fitch, further separating itself from other bidders. The rating, in addition to resulting in lower credit facility borrowing costs, allowed the company to tap the private placement market in June with a $150 million closed and expected to fund into September. On top of that, in July, the company raised an additional $150 million via new term loan, The $300 million of expected aggregate proceeds have a weighted average coupon of 5.1% and 5.7 years of duration immediately laddering Curbline's maturity ladder and funding second half acquisitions according to plan.

The net result is that the company is expected to end the year with over $300 million of cash on hand assuming $700 million of acquisitions, and a debt to EBITDA ratio less than one times providing substantial dry powder and liquidity to continue to acquire assets and scale. Resulting in significant earnings and cash flow growth well in excess of the REIT average. With that, I'll turn it back to David.

David Lukes: Thank you, Conor. Operator, we are ready to take questions.

Operator: Thank you. If you would like to ask a question, please press 1 on your telephone keypad. If you would like to withdraw your question, simply press 1 again. Please ensure that your phone is not on mute when called upon. Thank you. Your first question comes from Ronald Kamdem with Morgan Stanley. Your line is open.

Ronald Kamdem: Hey. Just on the acquisitions pace and pipeline, obviously, a pretty large portfolio in there. Just love if you, Juan, can comment just a little bit on sort of cap rate trends, And it does seem like there's more portfolios that you guys are looking at maybe even more than the business plan anticipated. I just wonder if you could comment on that as well. And how you're building out those relationships. Thanks.

David Lukes: Sure. Good afternoon, evening, Ron. The cap rates, I would say, have not changed dramatically. If you look at our year to date we're blending to about a six cap on forward twelve-month NOI. A lot of that depends on the pool that you're measuring as we go through the year. Even of the assets that we bought, we've ranged from low fives to high sixes, and a lot of that really just depends on whether there's vacancy. So I would say the cap rate trends are still fairly sticky.

In terms of finding more product, there's a tremendous amount that we've downloaded and worked on with the brokerage market, but I would say as the year goes on, we've definitely had more and more, off-market buyers. I would say right now, about half of our pipeline is marketed and the other half is off-market. So I agree with you. One of our jobs going forward is to continue to build relationships with people that have been in this business for a long time and have built some pretty enviable portfolios.

Ronald Kamdem: Great. And then my, my second question was just it seemed like you know, gain occupancy sequentially as well. Just any commentary on tariff impact, what you're hearing sort of from tenants? It doesn't seem like it's having an impact But I did see the leasing spreads New lease was down a little bit this quarter. Just any comments on that? Thanks.

Conor Fennerty: Well, I'm happy to start on the leasing spreads. As I said in my prepared remarks, we continue to expect leasing spreads for 2025 to be consistent with 2024. So I would just point to the fact that probably a pool shift. You know, we've got small denominator across the board, not to sound like a broken record. So we should just see more evolve volatility in our quarterly operating metrics. Than you would some of our larger peers, but there's been no change either the tone of conversations surrounding tariffs. And no resulting impact to leasing economics or volume.

Ronald Kamdem: Great. That's it for me. Thanks so much.

Conor Fennerty: Thanks, Ron.

Operator: The next question comes from Craig Mailman with Citigroup. Your line is open.

Craig Mailman: Hey, everyone. Just on the portfolios, are you guys could you I guess, you just comment on kind of the process here? Are these ones that you can cherry pick and kind of put together the portfolio you want, or should we expect if, you know, portfolio acquisitions ramp a bit to see some dispositions as you guys you know, get rid of some assets that really just don't fit the criteria. But you had to take as part of the deal.

David Lukes: Hey. Good evening, Craig. Let me start with a punch line so that I can, reverse into this. We do not have a disposition pipeline. Do not expect to be doing capital recycling. And we're not buying anything that we don't want to own over the long term. Most of what we're buying, if you look on the sup and you kinda look through, you know, what our acquisitions have been, they're mostly individual acquisitions. There are some owners throughout the country that have a similar thesis to us and have bought things that are very similar to what we want to buy. And in some cases, they're willing to sell some or all of them to us.

So far, we've done three portfolios. This is certainly the largest one, but we had a six pack and a three pack previously. In all of those cases, they were individually selected and did not represent 100% of what that seller owned.

Craig Mailman: K. Appreciate that. And then just as you guys do continue to build out the portfolio, mean, you have some markets that are still kinda single asset markets. What's the current thought process on how much critical mass that you would look for to enter a market. It's a really good question, Craig. From an operating perspective, we really don't have a challenge with operating, in a market where we're kind of starting with one and slowly growing. It has more to do with how much we think we could get into that market. So said differently, we're a little light right now in the Northeast the Pacific Northwest. We would like to be bigger.

So you may see us buy one property in dominant city with the understanding and belief that we're gonna continue to do that. And that's what you've seen in New York and in Dallas. Those are markets that we expect to be able to be competitive and grow the portfolio. In terms of operating, you remember these properties don't have a lot of touch from a property management standpoint. From an even a leasing standpoint, it's really a renewals business. So I would say that the, the operating leverage of having scale is not quite as important as it is learning the market and understanding it and wanna find the right properties.

Craig Mailman: Great. Thanks.

Conor Fennerty: Thanks, Greg.

Operator: The next question comes from Todd Thomas of KeyBanc Capital Markets. Your line is open.

Todd Thomas: Hi. Thanks. First, I just wanted to follow-up on the acquisitions in the quarter and the year to date activity the portfolio deal in July. I think, David, you said year to date, the cap rates are blending to about a 6%. I think that's down a little bit from last quarter around 6.25 And I'm just curious if there's any outsized embedded mark to market opportunities versus the balance of the curve portfolio on these acquisitions?

And there any expected change at all in the CapEx investment required across these deals that's different than the CapEx profile of the current portfolio as it pertains to, you know, sort of, you know, a little bit of redevelopment or some leasing capital.

David Lukes: Yep. Good evening, Todd. You are correct. In the previous two quarters, we've highlighted that our closings to date average of 6.25%. We're saying that year to date it's a 6% so that obviously means that the pool has changed a little bit, but we bought quite a bit in the last quarter and a half as well. So, the cap rate difference has everything to do with whether there's vacancy. Anything that we can find that has a tenant that's expiring in a number of cases, we've actually asked the seller to not lease that space and let the tenant expire.

That's primarily because there is a pretty big mark to market right now with vintage older and tenants that are losing term. So where a seller might wanna tie up that tenant thinking they're gonna get better value for long term, have a lot of tenant relationships. You look at our top 25 tenants, those are people we're calling all the time and showing them what we're buying. So in many cases, we'd like to have a little bit of vacancy that we can work with and make sure that we've got the credit, and the long term tenant roster that we wanna see.

So in certain quarters, if you see the cap rate, go down, it's not necessarily due to market factors as much as it is vacancy, and I think that's probably more consistent with this past quarter. That's not to say that cap rates might go down. I think that has a lot more to do with you know, how much, competition we see in the bidding 10 Probably has a lot to do with rates. But at this point, I think it's primarily, mark to market and vacancy opportunities that are making that gap.

Conor Fennerty: And, Todd, just on the capital needs, that there is no plan for redevelopment or expansion of our construction efforts. In terms of CapEx percentage NOI, no change in terms of our long term bogey. For less than 10% of CapEx percentage NOI. A big piece of that, one, is not having redevelopment, but the second piece is the structural nature of the business. The sense that, you know, our payback period on leasing volume is about one year. Leasing activity, I should say, is about one year. And it's just hard on a 12 or 1,300 square foot suite to spend more drive you in excess of that 10% figure.

So again, no change in terms of capital needs of the business. That's a key part a key ingredient of the thesis as David outlined in his prepared remarks.

Todd Thomas: Okay. Did you disclose what the occupancy rate or lease rate is on the acquisition volume completed in the in the quarter and year in July?

Conor Fennerty: In the second quarter, Todd, it was roughly in line, which is about 96%, so right in line with the portfolio. For the third quarter to date, and obviously, we're still you know, acquiring and still have a pretty decent pipeline. A little bit lower. It's low nineties. So to David's point, that cap rate's lower because we bought some vacancy. We obviously think we can lease up to portfolio average. So a little bit lower lease and occupancy rate for what we bought in the third quarter to date, But, again, once we once we know, you know, the total numbers for the third quarter, we can give an update on where we are for that.

Todd Thomas: Okay. Alright. Thank you.

Conor Fennerty: You're very welcome.

Operator: The next question comes from Alexander Goldfarb with Piper Sandler. Your line is open.

Alexander Goldfarb: Hey. Good evening. David, first, I have two questions. First question is, you guys are buying not only in the major MSAs, but also know, some of the smaller markets, Mobile, Alabama, and other parts of Alabama. You know, deep in Tennessee and elsewhere. And but you mentioned overall the cap rates seem to be pretty tight. So my question is, we often think of the major metros, the institutional markets trading tighter than you know, sort of the tertiary, but it doesn't sound like that's your experience plus you're obviously going for cash flow.

Which says that the cash flow is pretty attractive Again, whether you're in a major metro or tertiary, So can you just give a little context in how you're looking at where you're acquiring and just some more comparison of yeah, sort of the Alabama's of the world versus the Atlanta's, and I'm using those sort of just as a generic you know, for describing different markets.

David Lukes: Sure. Happy to. Mean, one thing, I guess, I could go back on is normally, when you're thinking primary markets, you know, you would be coming at it, at least in my background, you'd be coming at it from a purchasing power standpoint of how many people live in the area and how many people will go to your destination to go shopping. What's different about this asset class is these assets are so small. The most important feature is whether they're convenient for people not going shopping but running errands. And running errands is a pretty significant part of kind of the daily suburban life.

I certainly think it's probably increased with a lot of the flex flexible work environment. And when you get into markets that have a significant amount of people, but it's not primary, there's still a lot of traffic. For us, traffic count, the right intersection, the right side of the road, and the right format and visibility for the building, does drive a lot of tenant demand. And so our confidence level after, you know, the last seven years of underwriting these properties, our confidence level in primary and secondary market knowledge is pretty high.

So we're open minded to buying assets that we do think have long term growth profile particularly if they're older properties that have vintage releases that are pretty far below market. So that, I guess, is the answer to the first question. The cap rate question I think you're right. The cap rate spread on high quality assets with a strong mark to market are not substantially different between primary and secondary. Where you get a big cap rate expansion in this asset class is when you're off the main road, you have a very low traffic count. It might be more of a neighborhood center, and there's just not enough traffic to make it convenient for running errands.

So that type of higher cap rate property is available in the unanchored strip category. I don't think it's convenient, and, therefore, it doesn't really deserve to be in an institutional portfolio.

Conor Fennerty: Okay. So then the only other as you say, the only thing I would add, if you look at page nine of our supplement, your top five markets, which are Miami, Atlanta, Phoenix, Orlando, and Houston, represent 44% of ABR. So to David's point, the secondary markets that we're in share the common character characteristics, excuse me, of the rest of the portfolio. But the foundation of the portfolio and the vast majority still remains concentrated in the largest primary markets throughout The United States. It feels like the secondary assets we're adding on are just additive to that to that investment pipeline.

Alexander Goldfarb: Yeah. That's that's helpful perspective. The second question is, I'm asking this from curb perspective, not a site perspective. But, you know, your sister company presumably is in, you know, wind down mode selling assets that just paid a special dividend. From Curb's perspective, is there any impact to expenses or the P and L if they accelerate plans, if they you know, finish whatever they're gonna do sooner than expected versus later, Just trying to understand as we think about I know, Connor, you're not giving 26 guidance. But, you know, as we think out over the next year or two, is there are there any additional expenses?

If you could just remind us that we should be thinking about or curb as is unaffected whatever pace site chooses to do whatever it's gonna do.

David Lukes: Let me start with that, and I'll pass it over to Conner who probably has some specific he wants to share. But I'll just remind you that the shared service agreement with the two companies, the purpose of that was to allow one company to grow and one company to shrink while sharing certain expenses that would have been difficult to manage if you were on your own. That has been working very well because we have a lot of departments that serve both companies under the shared service agreement. So I think the base of your question is, you know, over time, will something change if there was an acceleration in site centers?

The only thing that's contractual that you can look at is if you look in the form 10 and you look at the shared service agreement that was published, at the time of the spin-off, there is a defined capability for, termination of that shared service agreement at year two as opposed to year three. But the impact of that happening has to do with a payment from one company to the other. So at the end, guess, of this speech, I would say that there's there's really nothing noteworthy, because Cite happens to be going faster or slower. I don't think that pace is gonna have much of an impact to curb.

Conor Fennerty: Yeah. I would just say, I mean, there's definitely not specifics we'd like to provide this time. To your point, Alex, but the immediate term is as curb scales, as you know, we pay 2% of base revenue excuse me, gross revenue to two sites. So that's the only immediate change. And then to David's point, in the event that there was an early termination, there'd be a significant fee paid to buy side to curb, which would offset any potential expense increase. But in the meantime, you'll just see G and A slowly move higher as curb scales just given that fee relationship.

Alexander Goldfarb: Okay. Thank you.

Conor Fennerty: Alex.

Operator: The next question comes from Floris Van Dijkum with Ladenburg Thalmann. Your line is open.

Floris Van Dijkum: Hey, guys. Quick question here for me. As you think about these portfolio transactions, have you had entered into discussion? Yeah. It doesn't seem like you've done an OP transaction yet, but would you consider doing that? And, you know, would that facilitate some of the tax issues that the sellers might have and how strategic do you expect that could be going forward?

David Lukes: Floris, it's David. It is certainly an arrow in the quiver that would be nice to use. We have certainly expressed that opinion to a lot of sellers, particularly ones that have a basis issue, and a tax obligation. You know, OP units is a very elegant way to know, to structure something that helps both the seller and the buyer. So we're certainly using it as a as an option. I would say that the relative, success of getting those done has been a little bit low. But, again, our company is only, what, nine months old now. So I would say there's still time.

But I would expect that to be something that we could use in the future.

Floris Van Dijkum: Thanks, David. And maybe if I can ask one follow-up. Part of part of I would imagine your value add besides obviously having sort of discovered and institutionalized this space, it ability to manage the portfolios a little bit better. Can you maybe remind us what the you talked a little bit about the pending or the new acquisitions in the third quarter having a lower vacancy. If you look at the average vacancy in the properties that you acquired to where you brought the vac you know, the occupancy levels to today how much of a pickup do you typically have you seen over the over the short history of the company?

David Lukes: I was gonna say that it you know what's funny is that the, the amount of occupancy up or down is so minimal. So far that it's not really a measurable impact. I mean, the vast majority of the growth in cash flow for each asset is renewals. When you can find vacancy, it can be very attractive. And there are certain times recently where we have been forcing vacancy because we think that there's a better credit tenant that can pay more rent and do more business. It's in my prepared remarks I mentioned the productivity of the space. There are some tenants that are simply more profitable out of the same square footage, and they can pay more.

So market rent is less relevant than the profitability of that particular tenant. So I would say that the rental increases on renewals far outpace the occupancy gains right now. It just so happens if we can find something with some vacancy, it's definitely attractive to us.

Conor Fennerty: Yeah. Floris, in terms of specifics, you know, we're 96.1% leased as of second quarter. You look back, again, obviously, we're we're mid ninety fives. At year end. So you know, to David's point, the vast majority of what we bought has been 95, 90% leased. There have been some assets we bought that were high eighties, low nineties. We've driven that up. But there's been very little, I would say, dispersion in terms of the lease rate really across the portfolio.

Floris Van Dijkum: Thanks, Connor. Thanks, David. Laura.

Operator: The next question comes from Michael Mueller with JPMorgan. Your line is open.

Michael Mueller: Yeah. Hi. Two quick ones here. I guess, first, for the 150,000,000 notes closing in September, you know when in September? Is that beginning of the beginning of the month, end of the month? And then for the second question, on the portfolio acquisition, you mentioned you picked 23 assets. Out of curiosity, were there still a substantial number of assets left that you didn't pick that could be interesting for you down the road at some point?

David Lukes: I would say specific number of assets that seller owns is, I'm not at liberty to discuss. But I will say that this is a group that's, very sophisticated. They've done a great job acquiring properties over a long period of time, and, we would be lucky if they would be willing to do business in the future. But the assets that we picked in this particular portfolio are ones that fit our mandate, they fit our submarkets, and they fit the underwriting criteria that we had at this time. So we're certainly we're very proud and happy to get this one across the finish line.

Conor Fennerty: Mike, in terms of the private placement, the September. So or early September to your first question.

Michael Mueller: Got it. Thank you.

Conor Fennerty: You're welcome.

Operator: The next question comes from Paulina Rojas with Green Street. Your line is open.

Paulina Rojas: Hello? Are you using occupancy cost as key metric to monitor rents across your portfolio? And if so, where do you estimate OCR stands today? And do you have any benchmarks you're using to manage and optimize your portfolio performance?

David Lukes: Hi, Polly. It's David. There are some cases, and I would say it's minimal, where we have information where we can manage occupancy cost, I would say that's mostly on tenants that are willing to share that information, which most likely are local or regional tenants. So OCRs are very important if we're underwriting someone who is maybe expanding a business. They have two or three units and they wanna do a fourth, and we wanna understand how much they can afford to pay. Given that over 70% of the portfolio is national credit, we don't have a lot of visibility other than nationally published information, particularly from public companies.

So, you know, if you look at our top 25 list on page 15 of our stuff and you look through those tenants, we don't really have an OCR, capability when it comes to all of those tenants. But we certainly have the ability to underwrite their credit. And we're demanding, you know, credit, be signed, you know, from the guarantor, being the corporate entity. So I would say credit on one side, the OCR underwriting has much more to do with smaller businesses that are growing, and those are relatively few.

Paulina Rojas: Thank you. My second question in circling back to the market distribution. We have seen some rates by assets in the Midwest. And what's your view on the that region specifically? Would you consider establishing a more meaningful presence there I know you have some assets, but would you consider growing there if the right opportunities emerge in terms of Provento? Or you'd prefer to avoid that from them brand or marketing perspective.

David Lukes: I think our acquisitions right now, Paulina, are purely based on the financial returns from the asset that we think we can derive over the long term. There are many cities you know, in the top 20 or 30 MSAs that we would be happy to be in. We certainly have bought a couple of, properties in the Midwest. I would see us continuing to do so, but they have to match the criteria that we want that particular property, which generally falls into demographics scarcity of use, high traffic count, easy layout of the building, ubiquitous small shop spaces, and kind of proven tenure of existing tenants. And those are available in a number of cities.

So I think our activity in the Midwest has been active and it'll continue to be, but I wouldn't say it's a driving force as much as it is, you know, the whole country, I think, is open to us. As long as it's in, a market that we understand and believe in.

Paulina Rojas: Thank you.

David Lukes: Thanks, Melina.

Operator: The next question comes from Tim Billingsley with Compass Point. Your line is open.

Tim Billingsley: Good afternoon. One of the questions I had was just looking at page 13 of the supplement. I'm looking at new leases versus renewals. It looks approximately 30% of the leases that you're signing on a new sign. But the terms are nearly double. So just trying to get an idea. Are you swap is this a case of were you talking about the occupancy Has not really changed much. From your acquisition. Are you bringing in more national people with those new leases, or can you just give me a give me a little bit more color on what's going on with those new leases and getting a longer term?

Conor Fennerty: Sure, Ken. It's Connor. So I would just say traditionally, a national lease is a is a ten year initial term, which is why our new leases are right around ten and a half years. We're 70 plus percent national, so that's what's driving that. On renewals, remember, it's a mix of negotiated renewals and options. Typically, an option, particularly with the nationals, is a five year term, so that's driving that. In general, we are just given the rent growth we're seeing in this market. Pretty focused on keeping our wall at a manageable level. So I would say that's that's driving the other piece of that.

So I would be surprised if our new leases deviated dramatically ten years. I'd be surprised if our renewals moved dramatically from five years think it feels like a pretty standard duration in terms of years.

Tim Billingsley: So is there is there any color you could add on when you are swapping out So we talked about how you're you're wanting to leave some of these acquisitions, leave some vacant space. Are you actively being able to swap them out for more national players, or is it a is it a higher percentage of that versus local?

Conor Fennerty: Yeah. I would just say we are acutely focused on credit. So if there's a jump ball between a local and a national tenant, nine times out of 10, we'll go with that national tenant. It's not necessarily a thesis of what we're buying, kind of swapping out local or national tenants. Generally, if we're buying great real estate, the national's already there. So, again, if there's a vacancy and we see an opportunity to put a national tenant in, great. But the thesis on this property type is not about kind of upgrading tenant roster. To David's point, it's really about pushing rents of who's there.

And, again, if we buy the right real estate, nine times out of 10, the nationals are already there.

Tim Billingsley: Oh, great. I appreciate it. Thank you.

Conor Fennerty: Of course.

Operator: This concludes the question and answer. I'll now turn the call to David Lukes for closing remarks.

David Lukes: Thank you all for joining our call. We'll talk to you next quarter.

Operator: This concludes today's conference call. Thank you for you for joining. You may now disconnect.