Executive Summary / Key Takeaways

• Strategic Specialization for Value Creation: SITE Centers Corp. (SITC) has undergone a profound transformation, culminating in the spin-off of its high-growth convenience retail portfolio into Curbline Properties. This dual-engine strategy aims to unlock distinct value propositions: aggressive growth and capital efficiency for Curbline, and disciplined value realization through asset sales for the remaining SITE Centers portfolio.
• Curbline: A Tech-Driven Growth Catalyst: Curbline Properties is positioned as a first-mover REIT in the convenience retail sector, leveraging proprietary mobile phone geolocation data for superior site selection and underwriting. This technological edge, combined with a low-CapEx, high-retention business model, is projected to drive robust same-store NOI growth exceeding 3% annually, with 2024 guidance between 3.5% and 5.5%.
• SITE Centers: Focused on NAV Realization: The legacy SITE Centers portfolio, comprising high-quality open-air shopping centers, is actively pursuing asset dispositions to capitalize on favorable private market valuations. Over \$1.8 billion in properties have been sold since July 2023 at a blended cap rate of 7.1%, with an additional \$1 billion in the pipeline, fueling debt reduction and significant special dividends for shareholders.
• Robust Financial Health and Operational Execution: Despite the portfolio's significant restructuring, SITE Centers has demonstrated strong operational performance, with Q2 2025 leasing spreads for new leases at 17.6% and average annualized base rent per square foot increasing to \$19.83. A strong balance sheet, including \$153.8 million in unrestricted cash as of June 30, 2025, and a secured mortgage facility, underpins this strategic pivot.
• Competitive Differentiation and Market Opportunity: Curbline's specialized focus and data-driven approach offer a unique competitive moat in a fragmented convenience retail market. SITE Centers' curated portfolio of high-income demographic assets continues to attract strong buyer interest, differentiating it from broader retail REITs and capitalizing on a resilient open-air retail environment.

A Strategic Metamorphosis: Redefining Retail Real Estate

SITE Centers Corp. (NYSE:SITC) is in the midst of a profound strategic transformation, evolving from a diversified retail REIT into a specialized dual-entity structure designed to unlock distinct value propositions. With a history of proactive portfolio curation, including the spin-off of Retail Value Inc. (RVI) and various joint venture unwinds over the past six years, SITC has consistently refined its asset base. The latest and most significant move is the spin-off of its convenience retail properties into Curbline Properties, a new, focused growth company. This strategic pivot, completed on October 1, 2024, aims to capitalize on the unique dynamics of convenience retail while maximizing the net asset value (NAV) of its remaining traditional shopping center portfolio.

SITC's competitive edge is sharpened by its innovative use of mobile phone geolocation data. This sophisticated tool provides hard facts for underwriting convenience assets, offering unparalleled insights into tenant performance and customer utilization. This technology allows for precise site selection and a deep understanding of consumer behavior, revealing that convenience properties generate 3.5 times the customer traffic per square foot compared to properties with larger units. Furthermore, half of these customers complete their visits in under seven minutes, a statistic that has grown by almost 40% in the past five years. This data-driven approach is a key differentiator, enabling superior underwriting, risk reduction, and a more targeted growth strategy for Curbline. It contrasts sharply with the broader, less data-intensive underwriting often employed by traditional retail REITs like Simon Property Group (SPG) or Kimco Realty (KIM).

The broader retail real estate landscape is characterized by suburban migration, the entrenchment of hybrid work models, and limited new construction, all contributing to sustained retailer demand. SITC's portfolio, whether in its legacy or new Curbline form, is strategically positioned in high household income communities. This focus on necessity-based, value-oriented retail, coupled with a diversified tenant base where only six tenants exceed 3% of annualized base rent, provides a stable revenue foundation. While larger, more diversified REITs like SPG or Federal Realty Investment Trust (FRT) benefit from scale, SITC's specialized focus and technological advantage in convenience retail allow it to compete effectively by targeting specific, high-growth niches.

SITE Centers: The Value Realization Engine

Post-spin, the remaining SITE Centers portfolio is a carefully curated collection of 31 shopping centers, including 11 unconsolidated joint ventures, totaling approximately 8.3 million square feet of gross leasable area (GLA). This portfolio comprises grocery-anchored, power, lifestyle, and net lease assets, strategically located in the top 15th percentile of U.S. demographics. The primary objective for this segment is to maximize value through disciplined asset dispositions and active asset management.

The company has aggressively pursued this strategy, generating over \$3.1 billion in gross proceeds from property sales between July 1, 2023, and December 31, 2024. These sales, executed at a blended cap rate of 7.1%, underscore the strong private market demand for high-quality open-air retail. An additional \$319 million from five shopping center sales in 2025 further demonstrates this momentum. The disposition pipeline remains robust, with over \$1 billion of additional real estate currently under contract or in negotiation at a blended cap rate in the mid-7s. This sustained activity is driven by a deep pool of interest from unlevered private buyers, family offices, and institutional investors who value the portfolio's credit quality, submarket positioning, and lease duration.

Financially, the disposition strategy has led to a decrease in rental income and net income for continuing operations. For the six months ended June 30, 2025, revenues from continuing operations were \$76.09 million, down from \$181.57 million in the prior year, while income from continuing operations was \$49.59 million, compared to \$196.85 million in the same period of 2024. This decline primarily reflects lower gains from real estate dispositions and reduced rental revenue due to the smaller portfolio size. However, these impacts were partially offset by decreased interest expense, lower preferred dividend expense, and an increase in fee and other income, including an \$8.4 million gain from a condemnation proceeding.

Operational metrics for the remaining portfolio remain solid. As of June 30, 2025, aggregate occupancy stood at 87.5% (pro rata), with average annualized base rent per square foot increasing to \$19.83. Cash lease spreads for new leases executed in the first half of 2025 were a strong 17.6%, reflecting healthy market demand. The weighted-average cost of tenant improvements and lease commissions for new leases was \$3.57 per rentable square foot, significantly lower than the \$6.85 for the full year 2024, indicating improved capital efficiency in new leasing.

The proceeds from these asset sales are strategically deployed to repay outstanding indebtedness and fund shareholder distributions. Consolidated indebtedness stood at \$292.0 million as of June 30, 2025, significantly reduced from prior levels. The company declared special cash dividends of \$1.50 per common share in Q2 2025 and an additional \$3.25 per common share on August 1, 2025, signaling a commitment to returning capital to shareholders during this value realization phase. SITE Centers no longer expects to pay regular quarterly dividends, instead focusing on special distributions tied to asset sales and tax net income.

Curbline Properties: The Growth Catalyst

Curbline Properties is positioned as SITC's primary growth vehicle, a "first-mover REIT" in the convenience retail sector. This entity was initially capitalized with no debt and \$600 million of cash, providing an "unmatched" balance sheet to fuel its aggressive acquisition strategy and differentiate it from the largely private buyer universe. The initial portfolio comprises 72 wholly-owned convenience properties, totaling approximately 2.4 million square feet of GLA, projected to generate roughly \$84 million in NOI for 2024.

Curbline's investment thesis is built on three pillars: superior visibility and access, attractive economics, and a high-quality, diversified tenant mix. The properties are typically simple, low-CapEx structures along high-traffic suburban thoroughfares, catering to quick errands. The historical CapEx for these assets is a mere 7% of NOI, driving substantial free cash flow. This capital efficiency is a key differentiator against traditional retail REITs, which often face CapEx burdens of 20-30% of NOI.

The growth outlook for Curbline is compelling. Same-store NOI is projected to grow between 3.5% and 5.5% in 2024, with an average growth rate exceeding 3% for the next three years. This is driven by annual rent bumps, high tenant retention (mid-90s for national, mid-80s for local tenants), and the ability to capture significant mark-to-market gains on renewals (almost 50% straight-line new leasing spreads over the trailing 12 months). The portfolio's average lease term is approximately 5.2 years, providing frequent opportunities to reset rents. Acquisitions are a core component of Curbline's growth strategy, with a target of at least \$500 million annually. Recent acquisitions have been at a GAAP cap rate of around 6.5%, focusing on properties in high household income areas (averaging over \$117,000) with high occupancy (over 96%). The addressable market is vast, with Curbline's current portfolio representing only 0.25% of the 950 million square feet of U.S. convenience retail inventory.

Risks and Challenges

Despite the compelling strategic vision, investors must acknowledge several inherent risks. The execution of SITE Centers' disposition strategy is subject to market conditions, interest rate fluctuations, and buyer demand, with no assurance that all targeted sales will materialize at favorable pricing. The remaining SITE Centers portfolio, while high-quality, faces declining rental income and net income due to the shrinking asset base, and its future dividend policy is less predictable.

For Curbline, while the growth opportunity is significant, scaling acquisitions to \$500 million annually requires consistent deal flow and disciplined underwriting in a competitive market. Although mobile geolocation data provides a technological edge, it does not eliminate all market risks. Both entities are exposed to broader macroeconomic challenges, including inflation, interest rate hikes, and shifts in consumer confidence, which could impact tenant performance and property valuations. Furthermore, the transition of management and operational structures post-spin, governed by a two-year shared services agreement, introduces a period of potential complexity, though management is focused on minimizing G&A friction.

Conclusion

SITE Centers Corp. has embarked on a bold and decisive strategic path, transforming its business model to unlock distinct value propositions for its shareholders. The spin-off of Curbline Properties creates a specialized, high-growth vehicle poised to capitalize on the unique and underserved convenience retail sector, leveraging a data-driven approach and a capital-efficient operating model. Simultaneously, the legacy SITE Centers portfolio is undergoing a disciplined value realization process through strategic asset sales, deleveraging the balance sheet, and returning capital to shareholders via special dividends.

This dual-engine strategy, while complex in its execution, positions SITC's shareholders to benefit from both the robust growth potential of Curbline and the NAV realization of the high-quality, curated SITE Centers portfolio. The company's strong operational performance, evidenced by healthy leasing spreads and increasing average base rents, combined with a solid financial foundation, provides a compelling investment narrative. Success hinges on continued disciplined execution of asset sales, effective scaling of Curbline's acquisition pipeline, and adept management of market dynamics, all of which are critical indicators for investors monitoring this strategic metamorphosis.