Curbline Properties (NYSE:CURB) said its third-quarter results reflected continued acquisition activity, improving occupancy and accelerating same-property net operating income growth, prompting the convenience-focused REIT to raise its full-year operating funds from operations guidance.
Chief Executive Officer David Lukes said the company completed more than $300 million of investments and fundraising during the quarter, supporting liquidity for further growth through the fourth quarter and into 2027. Since its October 2024 spin-off, Curbline has acquired more than $1.7 billion of convenience centers, largely through individual property transactions.
The company funded those acquisitions with $800 million of cash available at the spin-off and another $1.6 billion of raised capital, including nearly $1 billion of common equity, Lukes said. Annualized operating FFO rose from $0.91 per share in the fourth quarter of 2024 to $1.28 per share based on third-quarter 2026 results, an increase of more than 41%, according to the CEO.
Acquisition Pipeline and Market Conditions
Curbline had acquired just over $800 million of assets through the Friday before the earnings call and now expects to exceed its previous target of $1 billion in total investments for 2026. Management said it has visibility into its acquisition pipeline through the early part of next year.
Lukes said deal flow has remained steady despite changes in capital markets, interest rates and geopolitical conditions. He attributed the opportunity set in part to the fragmented ownership structure of the convenience real estate market, where many properties are owned by private families.
“We’ve seen a pretty consistent stream of assets every week,” Lukes said, adding that sellers directly contact Curbline for at least half of the assets the company acquires.
The company owned 239 convenience centers at the end of the third quarter, compared with an estimated more than 68,000 convenience shopping centers nationwide, according to Lukes, citing ICSC data. Curbline is targeting properties located on primary vehicular corridors with strong demographics, high traffic counts and creditworthy tenants.
Management also pointed to a growing opportunity in adjacent parcels and neighboring properties. During the third quarter, Curbline acquired four properties that were adjacent to or part of its existing centers. Lukes said the trend was becoming more meaningful as the company builds density in markets and receives referrals from local owners, though it remains one of several acquisition channels.
On pricing, Lukes said cap rates for lower-quality, lower-growth properties may have moved higher as leveraged buyers face increased borrowing costs. However, he said cap rates may be more resilient for growth-oriented properties with strong tenants, traffic and meaningful rent mark-to-market potential.
Operations and Earnings Outlook
Chief Financial Officer Conor Fennerty said total net operating income increased 11% sequentially and more than 50% from a year earlier, driven by acquisitions and organic growth. Third-quarter NOI was ahead of plan due partly to higher occupancy and recoveries, he said.
The lease rate was 96.4%, down 10 basis points sequentially, while occupancy rose 20 basis points from the prior quarter and 60 basis points year over year. Curbline signed just under 170,000 square feet of new leases and renewals during the quarter.
Same-property NOI growth accelerated to 3.4% in the third quarter, including 2.8% base-rent growth. Management said the improvement reflected lease commencements and an easier comparison on recoveries relative to the second quarter.
The company expects further occupancy-driven improvement as its signed-not-open, or SNO, pipeline commences. Nearly 75% of the almost $8 million SNO pipeline is expected to begin by March 31, 2027, while more than 98% is expected to commence by the end of the third quarter of next year.
Curbline raised its 2026 operating FFO guidance to a range of $1.25 to $1.27 per share. At the midpoint, the outlook represents growth of just over 18%, Fennerty said. The revised forecast assumes more than $1 billion in full-year investments, capital expenditures below 10% of NOI and roughly $32 million of G&A expense, including shared-services fees paid to SITE Centers.
The company now expects same-property NOI growth of 2.5% to 4% for 2026, following 3.3% growth in 2025 and 5.8% growth in 2024. Trailing 12-month capital expenditures were less than 8% of NOI, below the company’s less-than-10% target.
Liquidity and Capital Strategy
Curbline reported $895 million of immediate liquidity, consisting of $133 million of cash and deposits at quarter-end, $612 million of unsettled equity proceeds and $150 million of expected proceeds from a term loan expected to close in the fourth quarter.
During the third quarter and fourth quarter to date, the company sold more than 3.6 million shares on a forward basis, representing about $102 million of expected gross proceeds to fund acquisitions. Fennerty said Curbline expects to finish the year with net debt to EBITDA below 2.5 times; during the question-and-answer session, he described the expected ratio as approximately 2.1 to 2.2 times.
The company’s debt structure provides flexibility, management said. Curbline’s assets are unencumbered, it has no joint ventures and it has no debt maturities until 2029. Fennerty said an expected $150 million term loan would carry an all-in floating rate of about 4.9% if unswapped, while $100 million of the loan had been swapped at rates in the low-5% range.
Management said it would continue to assess debt, equity and other funding sources based on market conditions and acquisition opportunities. Even if Curbline deployed only its available liquidity over 2026 and 2027, Fennerty said the company believes it could generate well into double-digit earnings growth next year.
On tenant credit, management said it has not experienced a material change in accounts receivable, aged receivables or renewal rates. The company has used approximately 60 basis points of uncollected revenue as its annual planning assumption and has been running slightly below that level, Fennerty said.
About Curbline Properties (NYSE:CURB)
Curbline Properties Corp. is a real estate investment trust focused on owning and operating convenience-oriented retail properties. Its portfolio is designed to serve everyday consumer needs and generally includes open-air shopping centers, neighborhood retail centers and other properties occupied by service providers, grocery-related businesses and other necessity-based tenants.
The company primarily targets well-located properties in suburban communities across the United States. Curbline emphasizes assets in high-traffic areas that are convenient for nearby residents and supported by recurring local demand.
