In 2019, retailers that were responsive to consumer preferences did well, in general, amid evolving shopping habits and turbulence in the retail real estate and capital markets.
2019 Portfolio Highlights
- Demonstrated strong leasing volume with 26 new tenants leasing more than 154,000 square feet of retail space
- Attained 81% tenant retention with 102 leases renewed representing more than 645,000 square feet
- Achieved 94.4% economic occupancy, maintaining our multi-year track record of 94% or higher since inception
- Realized 16.6% and 3.6% comparable leasing spread on new leases and renewals, respectively
- Completed two development projects and have a third underway to generate new income streams and leverage the desirable locations of our centers
- Fully covered distributions from net cash flows provided by operating activities
Grocery Assets, Minimizing Big Box Risk
On February 11, 2019, the Inland Income Trust board of directors approved a strategic plan with the goals of providing future liquidity to investors and creating long-term stockholder value. The strategic plan centers around owning a primarily grocery-anchored portfolio with lower exposure to big box retailers. We feel, in general, that big box retailers will continue to be challenged. Through this strategic plan, we are proactively reducing our exposure to concepts that we believe have less relevance, and instead aim to minimize portfolio risk by repositioning away from big box retail centers.
2019 Strategic Plan Timeline
-
feb
Announce
strategic plan -
mar
Evaluate
existing
portfolio -
apr
Identify
potential
assets to sell -
jun
List
properties
for sale -
oct
Evaluate
offers and market
value -
nov
Assets put
under
contract - dec Execute sales
Reduced big box exposure
The 15 recent asset sales positively impacted our portfolio composition, reducing big box exposure from 17 percent to 14 percent and increasing the percent of our portfolio anchored or shadow-anchored by a grocer from 82 percent to 86 percent. In addition, all single-tenant assets have been sold, creating a more homogenous, core portfolio of grocery-anchored or shadow-anchored properties.
Property Type Breakdown by ABR 2018
Property Type Breakdown by ABR 2019*
From Renderings to reality
Leading National Beauty Supplies Retailer
Wedgewood Commons
Olive Branch, MS
Inland Income Trust procured a 10,000 square-foot ground-up development at Wedgewood Commons shopping center for a leading national beauty supplies retailer.
- Est. Delivery Nov. 2020
- Square Feet 10,000
-
Est. Return
on investment 8.6% -
Anchored by
Pet Supplies Plus Development
Pick’n Save Shopping Center
West Bend, WI
Pet Supplies Plus, the largest independent pet retailer known for its ‘minus the hassle’ brick-and-mortar customer experience, built a new storefront at Inland Income Trust’s Pick’n Save shopping center in West Bend, Wisconsin.
- Date Delivered Nov. 2019
- Square Feet 6,600
-
Est. Return
on investment 8.1% -
Anchored by
2019: A year of strong operational performance
Top 10 Tenants
Three leading grocers in our top tenant list comprising 7.8% of the portfolio ABR
-
3.5%
-
3.4%
-
3.4%
-
3.0%
-
2.7%
-
2.4%
-
2.4%
-
2.0%
-
2.0%
-
1.9%
Diverse Geographic Footprints
12% of portfolio in the west, 26% in the south, 21% in the midwest, and 41% in the east
Solid at the financial level in 2019
No Debt Maturing in 2020
(in millions)
Balance Sheet
| (in thousands) | 12/31/19 | 12/31/18 | 12/31/17 | |
|---|---|---|---|---|
| Balance Sheet Data: | ||||
| Total Assets | $1,254,559 | $1,320,069 | $1,375,370 | |
| Mortgage Loans and Credit Facility Payable, net | 681,327 | 705,884 | 691,465 | |
| Operating Data: | ||||
| Net Income (Loss) | (11,420) | (23,276) | (19,102) | |
| Funds from Operations (FFO) | 47,412 | 49,964 | 51,232 | |
| Modified Funds from Operations (MFFO) | 45,167 | 47,291 | 48,893 | |