InvenTrust Properties Corp.: Form 10-Q for the period ended Mar 31, 2026

Certain statements in this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (this "Quarterly Report"), other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These statements include statements about InvenTrust Properties Corp.'s (the "Company", "InvenTrust", "we", "our", or "us") plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events; and involve known and unknown risks that are difficult to predict.

As a result, our actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," and "should" and variations of these terms and similar expressions, or the negatives of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while we consider reasonable based on our knowledge and understanding of the business and industry, are inherently uncertain. These statements are expressed in good faith and are not guarantees of future performance or results. Our actual results could differ materially from those expressed in the forward-looking statements and readers should not rely on forward-looking statements in making investment decisions.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties, and factors set forth in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report"), and as updated in this Quarterly Report and other quarterly and current reports, which are on file with the SEC and are available at the SEC's website (www.sec.gov (http://www.sec.gov)).

Our operations are subject to a number of risks and uncertainties including, but not limited to:

• our ability to collect rent from tenants or to rent space on favorable terms or at all;
• declaration of bankruptcy by our retail tenants;
• the economic success and viability of our anchor retail tenants;
• our ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any retail properties acquired in the future and manage the risks associated with such retail properties;
• our ability to manage the risks of expanding, developing or redeveloping our retail properties;
• loss of members of our senior management team or other key personnel;
• changes in the competitive environment in the leasing market and any other market in which we operate;
• shifts in consumer retail shopping from brick-and-mortar stores to e-commerce;
• the impact of leasing and capital expenditures to improve our retail properties to retain and attract tenants;
• our ability to refinance or repay maturing debt or to obtain new or additional financing on attractive terms;
• the impact on our business and financial condition of incurring additional debt or issuing new debt or equity securities in the future;
• future increases in interest rates;
• rising inflation;
• the effects of uncertain and evolving tariff activity and changes in global trade policies on the overall state of the economy and on our business, including the impact on our tenants' business, operations and ability to pay rent;
• natural or man-made disasters, severe weather and climate-related events, such as hurricanes, wildfires, earthquakes, tsunamis, tornadoes, droughts, blizzards, severe freezes and winter storms, hailstorms, floods, mudslides, oil spills, nuclear incidents, and outbreaks of pandemics or contagious diseases, or fear of such outbreaks;
• our status as a real estate investment trust ("REIT") for federal tax purposes; and
• changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs.

These factors are not necessarily all of the important factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our business, financial condition, results of operations, cash flows and overall value.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements are only as of the date they are made; we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information, future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included in this Quarterly Report. All square feet and dollar amounts are stated in thousands, except per share amounts and per square foot metrics, unless otherwise noted.

Overview

Strategy and Outlook

InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a grocery component. We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, and maintaining a flexible capital structure.

InvenTrust focuses on Sun Belt markets with favorable demographics, including above-average growth in population, employment, income, and education levels. We believe these conditions create favorable demand characteristics for grocery-anchored and necessity-based retail centers, which will position us to capitalize on potential future rent increases while enjoying sustained occupancy at our centers. Our strategically located field offices support hands-on property oversight, enabling responsive tenant engagement and strong local market knowledge across our portfolio. We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct differentiator for us in the marketplace.

Macroeconomic Trends

Our business, and the business and operations of our tenants, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and the potential for a recession. Although certain indicators suggest that inflation has moderated, the economic outlook remains uncertain due to ongoing geopolitical tensions, evolving global trade policies and tariff actions, and continued supply chain disruptions. These factors, along with volatility in energy prices and interest rates, may contribute to broader economic uncertainty and could adversely impact our tenants' operations. Additionally, other challenging macroeconomic conditions, and the resulting impact on the economy and consumer spending, could negatively impact our business and that of our tenants.

Evaluation of Operating Performance and Financial Condition

In addition to measures of operating performance determined in accordance with U.S. generally accepted accounting principles ("GAAP"), management evaluates our operating performance and financial condition by focusing on the following non-GAAP financial measures and operating metrics, discussed in further detail herein:

20

Recent Developments

Acquisitions

On February 13, 2026, the Company acquired Marketplace at Hudson Station, a 60,000 square foot neighborhood center shadow-anchored by Fry's Marketplace in the Phoenix, Arizona market, for a gross acquisition price of $31.25 million. The Company used available liquidity to fund the acquisition.

On February 20, 2026, the Company acquired Nashville West, a 324,000 square foot power center shadow-anchored by Target, Costco, and Publix in Nashville, Tennessee, for a gross acquisition price of $88.0 million. The Company used available liquidity to fund the acquisition.

On March 12, 2026, the Company acquired a 7,000 square foot single-tenant outparcel adjacent to its neighborhood center, The Centre on Hugh Howell, in the Atlanta, Georgia market, for a gross acquisition price of $3.7 million. The Company used available liquidity to fund the acquisition.

Our Retail Portfolio

The following table summarizes our retail portfolio as of March 31, 2026 and 2025:

(a) Economic occupancy is defined as the percentage of occupied GLA divided by total GLA (excluding Specialty Leases) for which a tenant is obligated to pay rent under the terms of its lease agreement as of the rent commencement date, regardless of the actual use or occupancy by that tenant of the area being leased. Actual use may be less than economic occupancy. Specialty Leases include small shop leases with terms of less than one year and leases of common area space with terms of any length.

(b) Leased occupancy is defined as economic occupancy plus the percentage of signed but not yet commenced GLA divided by total GLA.

(c) Annualized Base Rent ("ABR") is computed as base rent for the last month of the period multiplied by twelve. Base rent is inclusive of ground rent and exclusive of Specialty Lease rent. ABR per square foot ("PSF") is computed as ABR divided by the occupied square footage as of the end of the period.

Summary by Same Property

Properties classified as same property were owned for the entirety of both periods presented ("Same Properties"). The following table summarizes the Same Properties of our retail portfolio for the three months ended March 31, 2026 and 2025.

Lease Expirations

Our retail business is neither highly dependent on specific retailers nor subject to lease rollover concentration. We believe this minimizes risk to our retail portfolio from significant revenue variances over time.

Results of Operations

Comparison of results for the three months ended March 31, 2026 and 2025

We generate substantially all of our earnings from property operations. Since January 1, 2025, we have acquired twelve retail properties and disposed of five retail properties.

The following table presents the comparative results of our income.

Lease income, net, for the three months ended March 31, 2026 increased $8.7 million when compared to the same period in 2025, as a result of increases from properties acquired of $12.3 million, decreases from properties disposed of $6.1 million, and the following activity related to our Same Properties:

• $1.3 million of increased minimum base and ground rent,
• $0.5 million of increased common area maintenance and real estate tax recoveries,
• $0.4 million of increased lease termination income,
• $0.3 million of increased amortization of below-market lease intangibles, and
• $0.2 million of net increases in all other lease income, partially offset by:
• $0.2 million of increased credit losses net of related reversals.

The following table presents the comparative results of our operating expenses.

Depreciation and amortization for the three months ended March 31, 2026 increased $5.8 million when compared to the same period in 2025, as a result of:

• $8.6 million of increases from properties acquired, partially offset by:
• $1.7 million of decreases from properties disposed, and
• $1.1 million of net decreases from our Same Properties.

Property operating expenses for the three months ended March 31, 2026 increased $1.3 million when compared to the same period in 2025, as a result of:

• $2.1 million of increases from properties acquired, and
• $0.5 million of net increases from our Same Properties, partially offset by:
• $1.3 million of decreases from properties disposed.

Real estate taxes for the three months ended March 31, 2026 increased $0.5 million when compared to the same period in 2025, as a result of:

• $1.0 million of increases from properties acquired, and
• $0.2 million of net increases from our Same Properties, partially offset by:
• $0.7 million of decreases from properties disposed.

General and administrative expenses for the three months ended March 31, 2026 increased $0.8 million when compared to the same period in 2025, as a result of $0.6 million of increased compensation costs and $0.2 million of increased other costs.

The following table presents the comparative results of our other income and expenses.

Interest expense, net, for the three months ended March 31, 2026 increased $1.8 million when compared to the same period in 2025, primarily as a result of:

• increased interest expense of $1.4 million from borrowings outstanding on our Revolving Credit Facility during the three months ended March 31, 2026,
• increased interest expense of $0.7 million from an aggregate of $60.5 million of mortgages assumed since April 1, 2025, and
• increased amortization of debt discounts and financing costs of $0.1 million, partially offset by:
• decreased interest expense of $0.4 million from aggregate mortgage payoffs of $35.9 million since April 1, 2025.

Other income and expense, net, decreased $0.3 million during the three months ended March 31, 2026, primarily as a result of decreased interest income.

Net Operating Income

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, depreciation and amortization, other income and expense, net, impairment of real estate assets, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, lease termination income and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and straight-line rent adjustments ("GAAP Rent Adjustments"). We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the retail properties meet our Same Property criteria. NOI from other investment properties includes adjustments for the Company's captive insurance company.

We believe the supplemental non-GAAP measure of NOI, and the bifurcation into same property NOI and NOI from other investment properties, are important measures in assessing operating performance and provide added comparability across periods when evaluating the Company's financial condition and operating performance that is not readily apparent from Net income in accordance with GAAP.

Reconciliation of Net Income to Non-GAAP Measures

The following table reconciles net income, the most directly comparable GAAP measure, to NOI and Same Property NOI:

(a) Adjustments to NOI include lease termination income and expense and GAAP Rent Adjustments.

Comparison of the components of Same Property NOI

A total of 63 retail properties met our Same Property criteria for the three months ended March 31, 2026 and 2025.

The following table presents the changes in Same Property NOI for the three months ended March 31, 2026 and 2025:

Same Property NOI increased by $1.2 million, or 2.6%, when comparing the three months ended March 31, 2026 to the same period in 2025, and was primarily a result of increased ABR PSF from fixed annual rent escalations, favorable lease spreads, and leases with advantageous fixed recovery terms.

Funds From Operations

The National Association of Real Estate Investment Trusts ("Nareit"), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as Funds From Operations ("Nareit FFO"). Our Nareit FFO is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property.

Core FFO is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within Nareit FFO and other unique revenue and expense items, which some may consider not pertinent to measuring a particular company's ongoing operating performance. In that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses.

See our Annual Report for expanded descriptions of Nareit FFO and Core FFO.

The following table reconciles net income, the most directly comparable GAAP measure, to Nareit FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and Dilutive Securities:

(a) Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.

(b) For purposes of calculating non-GAAP per share metrics, we apply the same denominator used in calculating diluted earnings per share in accordance with GAAP.

Earnings Before Interest, Taxes, Depreciation, and Amortization

Our measure of EBITDA is net income (or loss) in accordance with GAAP, excluding interest expense, net, income tax expense (or benefit), and depreciation and amortization.

Adjusted EBITDA is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Adjusted EBITDA provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within EBITDA, certain gains or losses remaining within EBITDA, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company's ongoing operating performance.

Our adjustments to EBITDA to arrive at Adjusted EBITDA include removing the impact of (i) gains (or losses) resulting from dispositions of properties, (ii) impairment charges on depreciable real property, (iii) amortization of market-lease intangibles and inducements, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt transactions, and (vi) other non-operating revenue and expense items which, in our judgment, are not pertinent to measuring ongoing operating performance.

The following table reconciles net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

(a) Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.

Liquidity and Capital Resources

Capital Investments and Leasing Costs

Retail properties generally require capital investments, including value-enhancing development and redevelopment projects and leasing costs.

The following table summarizes the cash paid for capital investments and leasing costs:

(a) Indirect costs include capitalized interest, real estate taxes, insurance, and payroll costs.

(b) As of March 31, 2026 and 2025, total accrued capital investments and leasing costs were $2,947 and $4,950, respectively.

Short-Term Liquidity and Capital Resources

On a short-term basis, our principal uses for funds are to pay our operating and corporate expenses, interest and principal on our indebtedness, property capital expenditures, and to make distributions to our stockholders.

Our ability to maintain adequate liquidity for our operations in the future is dependent upon a number of factors, including our revenue, macroeconomic conditions, our ability to contain costs, including capital expenditures, and to collect rents and other receivables, and various other factors, many of which are beyond our control. We will continue to monitor our liquidity position and may seek to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our strategy. Our ability to raise these funds may also be diminished by other macroeconomic factors.

Long-Term Liquidity and Capital Resources

Our objectives are to maximize revenue generated by our retail platform, to further enhance the value of our retail properties to produce attractive current yield and long-term returns for our stockholders, and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders.

Any future determination to pay distributions will be at the discretion of our board of directors (the "Board") and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board deems relevant.

Capital Sources and Uses

Our primary sources and uses of capital are as follows:

We maintain an at-the-market equity offering program (the "ATM Program") pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $250.0 million. In connection with the ATM Program, we may sell shares of our common stock to or through sales agents, or may enter into separate forward sale agreements with one of the agents, or one of their respective affiliates, as a forward purchaser. During the three months ended March 31, 2026, no shares were issued under the ATM Program. As of March 31, 2026, $236.7 million of common stock remains available for issuance under the ATM Program.

We believe our status as an NYSE-listed issuer facilitates supplementing our capital sources by selling equity securities of the Company under the ATM Program or otherwise if and when we believe appropriate to do so. Also, from time to time, we may seek to acquire amounts of our outstanding common stock through cash purchases or exchanges for other securities. Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors. At this time, we believe our current sources of liquidity are sufficient to meet our short- and long-term cash demands.

Distributions

During the three months ended March 31, 2026, we declared distributions to our stockholders totaling $19.5 million and paid cash distributions of $18.5 million. As we execute on our retail strategy and continue to evaluate our business, results of operations and cash flows, our Board will continue to evaluate our distribution on a periodic basis.

Summary of Cash Flows

Cash provided by operating activities was $20.2 million for each of the three months ended March 31, 2026 and 2025, and was generated primarily from property operations. Operating cash flows remained consistent period over period, as incremental cash flows from our Same Properties and net acquisition activity since January 1, 2025 were offset by timing-related fluctuations in receipts and payments as well as higher interest expense related to borrowings on our Revolving Credit Facility.

Cash used in investing activities of $128.3 million for the three months ended March 31, 2026 was the result of:

• $122.2 million for acquisitions of investment properties and
• $6.1 million for capital investments and leasing costs, and other investing activities.

Cash used in investing activities of $7.1 million for the three months ended March 31, 2025 was the result of:

• $7.4 million for capital investments and leasing costs, partially offset by:
• $0.3 million from other investing activities.

Cash provided by financing activities of $101.9 million for the three months ended March 31, 2026 was the result of:

• $126.0 million from proceeds from the line of credit, and
• $0.2 million in net proceeds from our Employee Stock Purchase Plan (the "ESPP"), partially offset by:
• $18.5 million to pay distributions,
• $5.6 million for payment of tax withholdings on stock-based compensation, and
• $0.2 million for payment of mortgage principal.

Cash used in financing activities of $19.7 million for the three months ended March 31, 2025 was the result of:

• $17.5 million to pay distributions, and
• $2.4 million for the payment of tax withholdings for stock-based compensation, partially offset by:
• $0.2 million in net proceeds from our ESPP.

We consider all demand deposits, money market accounts, and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at major financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage. We periodically assess the credit risk associated with these financial institutions. We believe insignificant credit risk exists related to amounts on deposit in excess of FDIC insurance coverage.

Off Balance Sheet Arrangements

None.

Contractual Obligations

We have obligations related to our mortgage loans, senior notes, term loans, revolving credit facility, and ground lease as described in "Note 6. Debt" in the condensed consolidated financial statements.

The following table presents our obligations to make future payments under debt and lease agreements as of March 31, 2026, exclusive of debt discounts and financing costs, which are not future cash obligations.

(a) Includes variable rate debt swapped to fixed rates through interest rate swaps.

(b) Includes leases on corporate office spaces.

(c) Includes payments related to the finance lease liability related to the ground lease at West Ashley Station.

Critical Accounting Estimates

Our financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, allocating the purchase price of acquired retail properties and evaluating the impairment of long-lived assets. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates.

There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in our "Management’s Discussion and Analysis of Financial Condition and Results of Operations" set forth in our Annual Report.

Interest Rate Risk

The Company is subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt. The Company's interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows. As of March 31, 2026, the Company's debt included outstanding variable-rate debt of $400.0 million, all of which has been swapped to a fixed rate through the maturity dates.

See our Annual Report for expanded descriptions of the Company's market risk associated with changes in interest rates.

As of March 31, 2026, the Company's interest rate risk was limited to $181.0 million on its revolving credit facility. If market rates of interest on all variable-rate debt as of March 31, 2026 permanently increased or decreased by 1%, the annual increase or decrease in interest expense, future earnings, and future cash flows would be approximately $1.8 million.

The following table summarizes our effective interest rate swaps as of March 31, 2026 and December 31, 2025:

(a) Interest rates reflect the Company's current credit spread of 1.15%.

The following table summarizes our forward-starting interest rate swaps as of March 31, 2026 and December 31, 2025:

(a) Interest rates reflect the Company's current credit spread of 1.15%.

Gains or losses resulting from marking-to-market derivatives each reporting period are recognized as an increase or decrease in comprehensive income on the condensed consolidated statements of operations and comprehensive income.

The information presented herein does not consider all exposures or positions that could arise in the future. Therefore, the information represented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the hedging strategies at the time, and the related interest rates.

Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, the Company's management, including its Principal Executive Officer and Principal Financial Officer, evaluated as of March 31, 2026 the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and Rule 15d-15(e). Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures, as of March 31, 2026, were effective at a reasonable assurance level for the purpose of ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes to the Company's internal control over financial reporting during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

As of March 31, 2026, there have been no material changes from the risk factors previously disclosed in response to Item 1A. to Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.