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    IVT
    Earnings call· Jun 2026(Q2 FY26)

    InvenTrust Properties Q2 FY26 earnings call IVT

    Aug 4, 2026 Source

    Executive summary

    InvenTrust Q2 FY26 — Strong NOI Growth and Sun Belt Expansion Drive Performance

    InvenTrust delivered a solid second quarter, marked by robust same-property NOI growth and strong FFO per share increases, driven by active leasing and strategic acquisitions in Sun Belt markets. The company is focused on disciplined external growth, capital recycling, and leveraging its platform for efficiency, while managing a slight sequential dip in occupancy and increased leverage.

    Highlights

    5

    • Same-property net operating income accelerated to 4.1% in Q2 FY26.

    • NAREIT FFO per diluted share increased 11.1% to $0.50 in Q2 FY26, and Core FFO per share increased 9.1% to $0.48.

    • Acquired 6 properties and 1 outparcel for approximately $290 million year-to-date, expanding into emerging Sun Belt markets.

    • Executed 76 leases covering approximately 464,000 square feet with an 88% retention rate year-to-date.

    • Comparable blended lease spreads were 8.5%, with new lease spreads at 18.7% and renewal spreads at 7.9%.

    Concerns

    3

    • Leased occupancy ended the quarter at 96.2%, down 20 basis points sequentially, primarily due to the former Painted Tree anchor space.

    • Net debt-to-adjusted EBITDA increased to 5.3x on a quarterly annualized basis, up from approximately 4.5x at year-end.

    • Same-property NOI growth is expected to be somewhat uneven for the remainder of the year, with Q3 reflecting timing of operating expenses.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year same-property NOI growth
    3.25% to 4.25%
    high materiality
    High
    Full-year Core FFO per share
    $1.92 to $1.96
    high materiality
    High
    Full-year NAREIT FFO per share
    $2.01 to $2.07
    high materiality
    High
    ABR commencement
    77%
    medium materiality
    High
    ABR recognition
    over $1 million
    medium materiality
    High
    Plantation Grove redevelopment groundbreaking
    break ground in 2026
    medium materiality
    Medium
    Vacant big box space execution
    3 of those into execution
    low materiality
    Medium
    Leased occupancy
    approaching leased occupancy all-time highs
    medium materiality
    Medium
    Economic occupancy
    about third quarter 2027
    medium materiality
    Medium
    Net debt-to-adjusted EBITDA
    still under 5x
    high materiality
    High
    Net debt-to-adjusted EBITDA comfort range
    5 to 6x
    high materiality
    High

    Operational metrics

    34
    Same-property NOI
    $48.5 millionup 4.1% compared with Q2 FY25
    Q2 FY26

    Growth accelerated in the second quarter.

    Same-property NOI
    $97.2 millionup 3.3% compared with first 6 months of 2025
    YTD FY26

    Year-to-date performance.

    NAREIT FFO
    $39.8 million11.1% increase from Q2 FY25
    Q2 FY26

    Driven primarily by higher same-property NOI and net acquisition activity, partially offset by interest expense.

    NAREIT FFO per diluted share
    $0.50
    Q2 FY26

    Reflects an 11.1% increase from Q2 FY25.

    Core FFO per share
    $0.48rose 9.1% year-over-year
    Q2 FY26

    Driven primarily by higher same-property NOI and net acquisition activity, partially offset by interest expense.

    NAREIT FFO
    $81.1 million10.8% year-over-year increase
    YTD FY26

    For the first 6 months of the year.

    NAREIT FFO per diluted share
    $1.03
    YTD FY26

    For the first 6 months of the year, reflecting a 10.8% increase.

    Core FFO per diluted share
    $0.98up 8.9% compared to 2025
    YTD FY26

    For the first 6 months of the year.

    Total liquidity
    $489 million
    quarter end

    Includes cash and available revolving credit facility.

    Cash
    $64 million
    quarter end

    Component of total liquidity.

    Available revolving credit facility
    $425 million
    quarter end

    Component of total liquidity.

    Weighted average interest rate
    4.36%
    quarter end

    For total debt.

    Weighted average term to maturity
    4.3 years
    quarter end

    For total debt.

    Net leverage
    31.9%
    quarter end

    Finished the quarter at this level.

    Net debt-to-adjusted EBITDA
    5.3xup from ~4.5x at year-end
    quarterly annualized basis

    Expected to be under 5x by year-end due to annualized nature of calculation.

    Quarterly dividend payment
    $0.255% increase over last year
    Q2 FY26

    Declared for the quarter.

    Leases executed
    76
    Q2 FY26

    Covering approximately 464,000 square feet.

    Square feet leased
    464,000
    Q2 FY26

    Across 76 leases executed.

    Retention rate
    88%
    YTD FY26

    Year-to-date tenant retention.

    Comparable blended lease spreads
    8.5%
    Q2 FY26

    Overall lease spread.

    New lease spreads
    18.7%
    Q2 FY26

    Spread for new leases.

    Renewal spreads
    7.9%
    Q2 FY26

    Spread for renewal leases.

    Renewal spreads (excluding tenant exercise options)
    14.4%
    Q2 FY26

    Underscores value captured through renewals with limited incremental capital.

    Annualized base rent per square foot
    $20.94increased 3.8% year-over-year
    Q2 FY26

    Portfolio average.

    Leased occupancy
    96.2%down 20 basis points sequentially
    quarter end

    Primarily due to the former Painted Tree anchor space.

    Small shop lease occupancy
    93.2%increased 30 basis points
    quarter end

    Sequential change.

    Anchor lease occupancy
    98.1%down 40 basis points from Q1
    quarter end

    Sequential change.

    Lease economic occupancy spread
    160 bps
    quarter end

    Represents annualized base rent that will commence.

    Vacant big box spaces
    6
    quarter end

    Limited and manageable large-format availability.

    Acquisition volume
    $290 million
    YTD FY26

    Strong progress towards full year net investment guidance.

    Acquisition volume
    $165 million
    Q2 FY26 and subsequent

    Showcases ability to acquire in a competitive transaction environment.

    Initial yield on acquisitions (blended)
    low 6s
    current

    Blended basis for net investment activity.

    Unlevered IRR on acquisitions (blended)
    low to mid-7s
    current

    Blended basis for net investment activity.

    Restaurant exposure
    21%
    current

    Portfolio exposure to the restaurant business.

    Industry KPIs

    3
    MetricValueDetails
    Investment volume and initial cash yield$290 millionUSD
    Rent recapture rate on renewals re leasing14.4%%
    Sourced opportunity volume and selectivity$2 billionUSD

    Orderbook & backlog

    2
    Signed-not-commenced leasing backlog (ABR)$5.6 millionQ2 FY26

    Represents the lease economic occupancy spread of 160 bps; 77% of ABR expected to commence by year-end, over $1 million recognized in 2026.

    Disposition volume remaining2 assetsQ2 FY26

    Two assets currently in the market, hopeful to get done in the second half of this year.

    Deals & partnerships

    4
    VariousAcquisition of 6 properties and 1 outparcel$290 million

    Represents year-to-date acquisition activity.

    VariousAcquisition of 3 properties and 1 asset subsequent to quarter end$165 million

    Includes 3609 South (Charlotte), Western Plaza (Knoxville), Sweetgrass Corner (Charleston MSA), and New Garden Crossing (Greensboro, closed July 1).

    PublixSignificant lease signing for redevelopment project

    Lease signed at Plantation Grove property in the Orlando MSA.

    VariousPrivate placement of senior notes$250 million

    Funded in June.

    Capital programs

    1
    Plantation Grove Publix Redevelopmentplanned
    Start: 2026

    Benefit: replacing existing store with Publix's new prototype

    A significant lease signing with Publix at Plantation Grove property in Orlando MSA, leading to a future redevelopment project expected to break ground in 2026.

    Risks & headwinds

    3
    Uneven Same-Property NOI GrowthQ3 FY26

    Expected to be 'somewhat uneven' for the remainder of the year, with Q3 reflecting timing of operating expenses.

    Mitigation: Expects Q4 to reaccelerate as leases commence and signed not open leases convert into rent-paying occupancy.

    Sequential Decline in Leased OccupancyQ2 FY26

    Leased occupancy down 20 basis points sequentially to 96.2% at quarter end.

    Mitigation: Primarily due to the former Painted Tree anchor space; a letter of intent from a prominent national retailer is in place, with an update expected near-term.

    Competitive Acquisition MarketOngoing

    Pricing is getting competitive, with everything 'compressing'.

    Mitigation: Being very careful and selective on opportunities, focusing on disciplined underwriting and growth profiles.

    What to watch in Q3 FY26

    5

    Leased Occupancy Recovery

    Q1 FY27
    Current96.2%
    TargetSigns of recovery towards all-time highs

    Why it matters

    Occupancy is a key driver of NOI and FFO growth; recovery from the Painted Tree vacancy is important for portfolio performance.

    we think we should be approaching leased occupancy all-time highs by the end of first quarter 2027 with economic occupancy about third quarter 2027.

    Q&A highlights

    5

    What drove the anchor occupancy decline, and what is the expected trajectory for both anchor and small shop occupancy into year-end?

    The anchor decline was primarily due to the former Painted Tree space, for which an LOI is in place. The company expects to approach all-time high leased occupancy by Q1 2027 and economic occupancy by Q3 2027.

    “The primary driver, as you noted, was the Painted Tree, which we lost. It was not in our numbers last quarter, but we noted it on the call. That was at our West Park asset in Glen Allen, Virginia. So that's the primary driver of why the anchor vacancy went down. And as I noted, we only have 6 vacant anchors, of which we expect to hopefully bring 3 of those into execution by the end of the year. And as for the trajectory of where we think occupancy can go, we think we should be approaching leased occupancy all-time highs by the end of first quarter 2027 with economic occupancy about third quarter 2027.”

    asked by Andrew Reale · answered by Christy David

    2 min read6 chapters

    Detailed Narrative

    01

    Portfolio Strategy and Sun Belt Expansion

    InvenTrust continues to focus on high-quality, necessity-based retail centers, strategically expanding into emerging Sun Belt markets such as Charleston, Greensboro, and Knoxville. These markets are selected for their strong fundamentals, including population growth, household formation, relative affordability, and robust retailer demand. This expansion is a natural extension of the company's strategy, leveraging its operating model and retail relationships to create long-term value while maintaining discipline.

    02

    Leasing and Occupancy Dynamics

    Leasing activity remained healthy during the quarter, driven by national tenants with multiyear expansion plans seeking quality space in tight supply markets. The company executed 76 leases covering approximately 464,000 square feet, achieving an 88% retention rate year-to-date. Leased occupancy ended at 96.2%, a sequential decrease of 20 basis points primarily due to the former Painted Tree anchor space, for which a letter of intent from a prominent national retailer is already in place.

    03

    Capital Recycling and Acquisition Pipeline

    The company made strong progress on its external growth strategy, acquiring 6 properties and 1 outparcel for approximately $290 million year-to-date. The acquisition pipeline remains active, with a total 'canvas' of around $2 billion in opportunities, and the company aims for a blended initial yield in the low 6s and unlevered IRR in the low to mid-7s. Future acquisitions are expected to be balanced with selective one-off📎 asset sales to recycle capital into opportunities with stronger growth characteristics, with two assets currently in the market for disposition.

    04

    Technology and Operational Efficiency

    InvenTrust is actively leveraging technology, including artificial intelligence, to enhance operational efficiency. These tools are being implemented to streamline workflows, improve reporting capabilities, and more effectively evaluate investment opportunities. While local market expertise and tenant relationships remain central, technology is expected to support the company's long-term growth and operational scaling.

    05

    Restaurant Exposure and Tenant Trends

    Restaurants constitute approximately 21% of InvenTrust's portfolio, split between full-service and fast-casual concepts. This category typically experiences higher turnover compared to others, but management noted no significant negative trends related to specific food categories. The company continuously monitors a handful of restaurant tenants and proactively identifies potential backfills for any struggling locations.

    06

    Balance Sheet Strength and Financial Flexibility

    The balance sheet remains strong, providing flexibility and liquidity for executing long-term strategy. Total liquidity stood at $489 million at quarter-end, including $64 million of cash and $425 million available on the revolving credit facility. Net debt-to-adjusted EBITDA was 5.3x on a quarterly annualized basis, with management expecting it to be under 5x by year-end and comfortable with a forward range of 5x to 6x.

    AI-generated summary of the company’s earnings call. Not investment advice.