00:00I want to start first with retail sales. We got a retail sales report the other day,
00:03up 1%, surprised a lot of folks. That's not inflation adjusted, but it kind of contributes
00:08to this narrative we've seen that the consumer is holding up. Are you seeing that in your
00:12properties? We're definitely seeing it, and traffic has continued to maintain itself.
00:16I was saying earlier, like our back to school this year, this period, has been the highest
00:21traffic we've seen in the last four years. So, you know, customers are still coming,
00:26they're being selective. You hear it from the retailers, right? Richard Dixon, listen to them.
00:31You know, their customers are spending, but they're selectives. And so those retailers are
00:35really trying to meet that customer right now. Well, as far as the risk ahead, I mean, we're
00:39talking about maybe potentially new tariffs coming down the pike. Energy prices are still elevated.
00:43Maybe that gets solved by the Fed, maybe or not. Have you sort of looked ahead and thought to
00:49yourself, should we start to prepare for a potential pullback by some consumers? Well,
00:53the last time I visited with you, and I'll have to say our stock went up about 25% to
00:5740%.
00:58And so maybe I'll keep coming back. We raised $1.6 billion of equity and convertible securities
01:04during that period. So our balance sheet is flush with liquidity right now. And obviously,
01:09we're trying to buy properties right now. It's a big part of our story right now. So we feel very,
01:15very secure from that standpoint. And just retailer demand to open stores, as part of our path forward,
01:21we had to open 1000 new stores, backfill 30 vacant acres. And that's about 25% of our entire
01:28portfolio of space. We're basically 950 stores are committed at this point. We have 850 committed
01:37already, 100 letters of intent out. We've got 50 more to go. And we've done that in the last two
01:43years,
01:43in spite of all the noise about tariff, war, rates.
01:48But what are the commitments, though, too? I mean, because yesterday in your presentation,
01:51you were talking about there were 30 of the targeted vacant anchors that were now committed.
01:55But then I looked at it, it was only like, seven were only open.
01:58Yeah, seven are open.
01:59So where are the others right now?
02:01So they're all in various different stages of construction or delivery of the parcel.
02:05So we've got, you know, 13 that are basically leases executed, you know, under construction,
02:11basically, at this point. Five are signed leases and five are lease out, basically, at this point.
02:16Well, give me a sense, too. I mean, I was looking at, I mean, you had, I think it was,
02:20what, eight or nine anchor deals with Dick's Sporting.
02:22Ten. Ten committed.
02:23Ten sporting, Dick's Sporting.
02:25That's much different than the old days, you know, when I was younger. I mean,
02:29shopping malls were always sort of anchored by a big department store.
02:32Dick's, obviously, I mean, you know, it's varied, but still, it's sporting goods.
02:36It's also experiential. And I am curious if that's a deliberate decision.
02:39Yeah, Dick's was, for us, that's a really critical ally for us to try to build more vibrancy,
02:45traffic, dwell time. My job as a landlord, bring traffic, dwell time, and the right traffic spends,
02:52right? So with the two Dick's store, House of Sports that we opened, we had an opening
02:57earlier this year at Freehold. And that, the traffic of the center has maintained a 9% increase.
03:03So it's about a million, two customers we project that will come in just because of the Dick's
03:08House of Sport. The opening weekend for Freehold compared to the year before,
03:12just looking at traffic, traffic was up 25%. Annapolis just opened on the weekend of August,
03:20that second week of August over the weekend. The traffic was about 33% up versus the period before.
03:27I was just talking with the team at Dick's. That's the best opening. It's the most frequent
03:32store right now. I think there were something like 111,000 people that came in over that weekend
03:37into that one store. So we expect that that will have a pretty profound impact. It's just such a
03:43great offering.
03:44Well, just quickly, quickly. I mean, those are a couple of the success stories. You mentioned
03:47Annapolis, Maryland, Freehold, et cetera. I'm curious, what about what's going on with the place
03:52in Colorado, in Boulder, 29th Street? I mean, are you looking at a situation where there are just
03:56certain properties where you're just willing to turn the keys back over?
03:59The challenge of that, that loan's in default. And one of the primary issues with it is not so
04:03much the debt. It's we've got a ground lease right now that it's unfortunately something I
04:09inherited. It doesn't really work. We've been very clear with the ground owner. Hey, we'd like to have
04:13a go at this, but if we can't make an adjustment to this ground lease, it doesn't make sense for
04:19us
04:19to keep operating this property. I'm pretty transparent. So we'll have to see what happens.
04:23They obviously I don't know if they want to see us leave. Yeah, but it's a complicated property
04:28because it's a beautiful asset. Yeah, but half the ground is fee, which we own. Half is under
04:34a ground lease. And there's a mortgage that sits on top of the whole thing. We're showing a map of
04:38a lot
04:39of your properties here. I'm curious about as you expand and look for other properties. And this goes
04:42back to the Fed. I mean, the cost of capital is going up. I mean, I saw you. I mean,
04:45you had an exchangeable
04:46rate deal earlier this year at like two and a quarter. Then I saw on the Deptford Mall, you had
04:50a deal
04:51where it was like six, like seven percent roughly. Kind of make that math work for me and whether
04:56you sort of have to move your finance or change your financing structure in a way to account for
05:01a higher rate environment. I mean, higher rates right now, like we can probably borrow on a first
05:06mortgage basis at about six percent on a mall, not not highly levered. Even with this rate increase,
05:12like our borrowing spreads are compressing. We have access to the term loan market. We raised
05:17convertible debentures at a two and a quarter percent rate. So we've got different sources
05:22of liquidity or cost of capital to pursue. But if you ask me, are cap rates going to go up?
05:28It's kind of a function of just buyer seller. I would have said maybe earlier this year they
05:33were trending down. I personally think they're going to flatten. I don't know if they'll go back
05:37up again. But the thing that's offsetting rates is unprecedented leasing demand on the part
05:43of retailers that need brick and mortar. They need new stores in the better centers. And they're
05:49really trying to partner with better landlords. Like the last thing they want to do is get stuck
05:54with a mall owner that's not investing or it's an over levered asset and eventually it's going to
06:00deteriorate. Yeah. All right. We only have about 20 seconds left, but I have to ask you this holiday
06:04shopping season. Is it going to be better than the last? I believe it'll be really just on par.
06:08Yeah, I really do. The consumer is saving and they'll be getting ready to spend.
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