Welcome to the Cedar Realty Trust First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nicholas Partenza, Director of Financial Reporting, please go ahead.

Good evening and thank you for joining us for the first quarter 2019 Cedar Realty Trust earnings conference call. Participating in today's call will be Bruce Schanzer, Chief Executive Officer; Robin Zeigler, Chief Operating Officer and Philip Mays, Chief Financial Officer. Before we begin, please be aware that statements made during the call that are not historical, may be deemed forward-looking statements and actual results may differ materially from those indicated by such forward-looking statements. These statements are subject to numerous risks and uncertainties including those disclosed in the company's most recent Form 10-K for the year ended 2018 as it may be updated or supplemented by our subsequently filed quarterly reports on Form 10-Q and other periodic filings with the SEC. As a reminder, the forward-looking statements speak only as of the date of this call May 2, 2019, and the company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures including funds from operations and net operating income. Please see Cedars earnings press release and supplemental financial information posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures. With that, I will now turn the call over to Bruce Schanzer.

Thanks, Nick. Welcome to the First Quarter 2019 earnings call for Cedar Realty Trust. Before beginning my remarks on the quarter, I wanted to take a moment as always to acknowledge my senior management colleagues, whom I refer to as my kitchen cabinet as well as the balance of team Cedar. I want to thank them for their tireless efforts and for their collective commitment to collaboration, collegiality and everyday excellence. This quarter, my comments will be relatively brief. Earlier this week, we had our first quarter board meeting and annual shareholder meeting. I shared with the board, the very first concept drawings done back in 2012 for the mixed use redevelopment project then contemplated for the South Philadelphia Shopping Center. This project evolved significantly with the acquisition in 2014 of the Quartermaster Plaza Shopping Center across the street and is now known as South Quarter Crossing. In considering this early concept drawing, we were all struck by the fact that back in 2012, we had the foresight to anticipate where the market was going and therefore, the importance of migrating our capital into our highest density submarkets to focus in the years ahead on urban mixed use redevelopment for our open air shopping centers in these high population density areas. Of course, it also was apparent in considering the fact that we were looking at a project that was first contemplated many years ago that it takes a lot of time and human capital to move large scale redevelopment projects, such as South Quarter Crossing from creative vision to tangible milestones where leases are signed and buildings are being built. At long last, we are just about at that point. During these same years, we have refined our portfolio, repaired our balance sheet and strengthened our management team, such that we now have a pipeline of redevelopment projects being advanced similar to South Quarter Crossing in their ambitions and scale. Over the same period, we have also observed the secular dynamics we predicted back in 2012, starting to take a root throughout much of the bricks and mortar retail universe. Despite these prescient strategic decisions, today, our shares trade for roughly 60% of the value they did back in 2012, when we were more highly levered, had an inferior portfolio and had no meaningful plan for creating shareholder value. Moreover, today we trade for approximately 50% of the consensus net asset value for our portfolio. As a management team, we are pursuing these ambitious redevelopments and we generally are keenly focused on astute capital allocation in order to grow the net asset value of Cedar and correspondingly, its share price. In pursuing these redevelopments, we have determined that we can achieve the best risk adjusted returns over our weighted average cost of capital versus other capital allocation alternatives. Accordingly, we continue forging ahead with these projects. As I've noted on earlier earnings conference calls, over the last five years, we have issued equity only when trading at a premium to our consensus net asset value and commenced a share repurchase program when trading at a significant net asset value discount. This conduct is the foundation of our capital allocation scorecard and is what is expected of the best REIT managers. Accordingly, we are puzzled at our trading level relative to our net asset value and our value creation pipeline, since our capital allocation decisions to this point should cause an investor to feel confident about owning our shares. That said, we very much believe that in executing the capital migration plan we have been pursuing for many years now, we will meaningfully grow our net asset value and hopefully will narrow the discount between our prevailing share price and our net asset value. With that, I give you Robin to discuss our leasing results and redevelopment progress.

Thanks Bruce, good evening. Our leasing team continues to make steady progress with the execution of 40 new deals during the first quarter 2019 consisting of 11 new leases and 29 renewals. There were 42 total leases, including two noncomp leases, for the redevelopment signed this quarter totaling 413,200 square feet, our highest volume of square footage leased in the rolling 12 months. These new leases were executed at an overall new lease comp spread of 5.4%. Excluding the new leases that were vacant greater than one year, the new lease comp spread increases to 14.8%. This spread on renewal leases this quarter is 1.6% which is weighted down by a long term renewal with Pat Catan's at the Commons in DuBois, Pennsylvania, accompanied by a conversion to the store to their Michael's concept. The exclusion of this deal increases the renewal lease spread to 4% overall. Approximately 75% of the renewal GLA executed this quarter is attributed to the renewal of four anchors and two junior anchors at a spread of 5.8% excluding Pat Catan's. This type of proactive leasing effort is part of our continued effort to sustain our anchors' occupancy long-term as a catalyst for future leasing activity at our centers. Current same property leased occupancy is 91.1%, down 10 basis points from prior quarter and total property lease occupancy of 90.5%, down 50 basis points from prior quarter. Occupancy decrease was driven by two principal factors: Return of possession primarily from impact of vacant anchors and proactive vacancy to prepare for redevelopment. During first quarter 2019, there was new return of possession totaling approximately 80,000 square feet. Approximately 35,000 square feet or 43% of the total is related to the closing of Just Cabinet's at Golden Triangle and Farm Fresh Floral at Kempsville. The Farm Fresh Floral Box at Kempsville has already been backfilled with an executed lease with a fitness club, which is scheduled to open this week. We are in discussion with multiple prospects for the Golden Triangle box. Total property occupancy is affected by the intentional vacancy to prepare for our redevelopments. This quarter, approximately 29,000 square feet or 34% of the ROP is related to those redevelopments. Redevelopments continue to progress in an orderly phased fashion. As we have discussed in previous quarters, we tend to characterize our redevelopments in two categories: Value add renovations and mixed use redevelopment. In our value add renovation portfolio, Carman's Plaza in Massapequa, New York is nearing stabilization. The facade work is complete 24 Hour Fitness has opened with strong membership and Popcorn Beauty has also opened in 10,600 square feet. There are only two small shops still available to lease and we confidently project that this redevelopment will stabilize with double-digit returns. Port Richmond in Philadelphia, Pennsylvania is poised to start construction in late 2019. In order to commence construction, relocations were required with GameStop and T-Mobile and both leases are now executed. We are creating a new small shop strip building, which will house several new retailers and restaurants including Nifty Fifty Diner, whose lease was executed this quarter. Nifty Fifty is a Philadelphia staple serving shakes and burgers and bringing a local flair to what will become the newly branded Fishtown Crossing. The branding and merchandising is created to directly attract the burgeoning surrounding Fishtown in Northern Liberty's neighborhood. There are several other deals and negotiations for the new pad sites and existing retail which will be announced in subsequent quarters upon execution. Yorktown Plaza in Cockeysville, Maryland is also moving forward apace. In order to create better visibility to the main road and more leasable space, a new small shop building is being developed as well as a facade renovation. Subsequent to the quarter, Panda Express was executed for the small shop building and during the quarter, we executed a deal with IHOP to relocate and build out their new prototype in a new pad building. Similar to Fishtown Crossing, there are several other deals and lease negotiation at Yorktown that will be announced in subsequent quarters upon execution. Our other category of redevelopment is our mixed use redevelopments. We are making significant progress on all three of these projects. In Washington DC, we are redeveloping, our East River Shopping Center and combining it with our newly acquired Senator Square Shopping Center. Based on our latest plan, this project across both parcels can accommodate 200,000 square feet of retail, 1,200 residential units and/or 150,000 square feet of office. The merchandising contemplates two major anchors as catalysts for the leasing strategy. We have strong interest from multiple users and/or LOIs for both of these anchor boxes. While the development is by right, we are working through some of the minor entitlements and incentives and construction is anticipated to commence in late 2020. The redevelopment plan for Riverview Plaza in Philadelphia, Pennsylvania has also crystallized, and construction is anticipated to commence in early 2020. This redevelopment contemplates approximately 155,000 square feet of ground floor retail with over 300 residential units above, the merchandising is heavily entertainment, restaurant focused, and we are in lease negotiations on several deals, which will also be announced in the near term. As Bruce alluded to earlier, South Quarter Crossing has been a long time in the making, and we are very excited about the positioning of this project for commencement. The current plan consists of 800,000 square feet of total retail and 270 residential units. We are in final lease negotiations with several anchors and have multiple LOIs for the project. As you can tell, our development, leasing and operations team at team Cedar have been working tirelessly to realize this vision for our shareholders and the communities we serve. We are very excited about entering this next phase of our redevelopment strategy and at the prospect of what is to come. With that, I will give you Phil.

Thanks Robin. I'm going to add just a few brief highlights to Bruce and Robin's remarks before opening the call to questions. Starting with operating results. For the quarter, operating FFO was $10.2 million or $0.11 per share. Same property NOI when compared to the comparable period in 2018 decreased 1.2%. This decrease in same property NOI was driven equally by two Fallas locations vacating and the downtime associated with replacing the grocer at Oakland Mills. Excluding the impact of these two items, same property NOI growth would have been approximately 0.5% positive. Further, as a new growth at Oakland Mills began paying rent at the end of this quarter, along with our leasing momentum, we do expect the same property NOI growth to improve over 2019 and be relatively flat for the full year. Also as a reminder, our same property portfolio is relatively small, so this quarter's decrease of 1.2% represents only approximately $200,000. Moving to the balance sheet. As previously discussed, our Board of Directors approved in December, a program to repurchase up to $30 million of our common stock. During the quarter, we repurchased 2.1 million shares at an average cost of $3.34 per share. Since approval of the plan, we have repurchased a total 2.8 million shares at an average cost of $3.25 per share. We will continue to provide quarterly updates on our program to accept - there's additional repurchase activity. With regard to dispositions, we closed on the sale of Maxatawny Marketplace for $10.3 million and begin marketing Port Washington Center and Suffolk Plaza for sale. For the full year 2019, we still anticipate approximately $40 million of dispositions. And finally guidance, we are reaffirming our full year 2019 operating FFO per share guidance of $0.44 to $0.46 per share. The key assumptions in this guidance remain unchanged and are detailed in our press release. With that, I will open the call to questions.

Thank you. [Operator Instructions] Our first question comes from the line of Collin Mings with Raymond James.

Thank you, good afternoon. First question for me is just on the capital allocation front, Bruce. It looks like you did pause the share repurchase activity following the February conference call. To your point in the prepared remarks, shares here are still trading well below NAV. Just what's driven the limited amount of activity over the past couple of months? Is that just maybe a matter of timing of some additional asset sales reaching the closing table?

No, it's more of a practical approach to how we're using our relatively limited capital. So certainly our shares remain very attractively priced, however, when we think about our suite of capital allocation alternatives, we have to remember that as a perpetual capital vehicle, our first obligation is to make sure that we don't engender any sort of enterprise risk in buying back stock. So although the stock is very attractively priced and from a personal perspective, I would love to buy more stock, if I didn't have so much of it already, I would tell you that from a corporate perspective, we have to balance a number of different considerations. And so it's not as simple as just saying the stock is attractively priced, let's go out and buy it.

Fair enough. I guess maybe picking up on the comment just on capital, on the last conference call again, there was some reference to potentially looking at some joint venture partners on the redevelopment front. Again, recognizing it's only been a few months, any update that you can provide on that effort?

Just that nothing has changed in terms of our perspective as far as that is concerned since our last earnings call.

Okay. Phil, just a couple of modeling question here. In the prepared remarks, again, it sounds like you're pretty confident that the same store NOI number is going to improve as we go through the year, so it is fair to again think that 1Q here is going to be the weakest comp of the year?

Yes, and there should be gradual improvement throughout the year. So I'm not sure it will be - it probably won't be flat next quarter but the decrease should be a little less and it should continue to improve throughout the year and excluding redevelopments be flat for the full year. I mean I mentioned in my remarks that you always have to keep in mind, it's a little hard for us to give exact guidance on that as like $175,000 is 1%. So it's not a large dollar amount that we're talking about and so the level of precision to forecast same store for us is a lot higher than everyone else to get it exactly right, but we do see a gradual improvement every quarter in our forecast and it currently reflects flat for the full year.

Okay and then just in terms of the asset sales, maybe just any sort of updated way of how we should be thinking about the timing on that front.

I would tell you that the process is pretty consistent with how we described it on the last quarterly earnings call and that the pricing is again pretty much on top of where we expected it to be. I would just broadly characterize the market as continuing to be healthy, our pricing continues to be solid and I would say going back to my earlier observation about the disconnect between our trading level and our net asset value, cap rates certainly haven't softened dramatically, and so again pricing in the private market is pretty solid.

One last one and then I'll turn it over. Just for Robin, just on the leasing activity, during the quarter. Maybe just taking a step back just, maybe update us on the high level of op here of what you're seeing or maybe the areas where you're seeing the most interest, the most encouraging trend on the leasing front and then maybe if there's particular situations or requests from prospective tenants where maybe the dynamics are more challenging.

Sure. So I would say is far as where we're seeing the most interest, given the fact that we are in the mixed use environment, entertainment and restaurants across the board. I think I mentioned that Riverview, that happens to be the focus of our merchandising there but just in general, a lot of interest on the entertainment and restaurant fronts. So we're seeing an interest there. And as far as areas, the second part of your question was where we're seeing concerned, was that what your question was?

Yes, or maybe just the most challenging part of negotiations that you're encountering. Again, I guess this is true for the core portfolio and/or some of the redevelopment initiatives as well.

Sure, so I think I alluded to this in previous calls. But I think the most challenging part is when you're dealing - when we're starting these projects, we typically start with the national retailers and then the focus would be to start national and they get more regional and local as we work through the merchandising strategy. And with the national retailers, there's some retailers who have already morphed their strategy to get into more urban footprints and they have already gotten their operation adjusted to fit into an urban footprint and other national retailers have not quite made all of those adjustments. And so in some cases, they're making those adjustments with us as we're going through the leasing transaction, which makes the leasing take longer. And so that, I would say, is probably the biggest challenge in working with them on the operations side of the of the development, if you will. To get their back of house, their operating footprint and working through those challenges as we go to the lease negotiation and then getting them used to concepts like you can't have a full surface parking lot in front of your space when you're in an urban environment, the parking ratios are different. The exclusives and co-tenancies and how all of those who work in an urban environment, which is different than a suburban environment and working that through their operating shop and going through some of those growing pains with those retailers, that's probably the biggest challenge.

Okay, that's helpful color. I'll turn it over. Thank you everybody.

[Operator Instructions] Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

I just wanted to first follow-up on the dispositions and the $40 million number that's in the guidance. So you closed on Maxatawny and I think last quarter you had two - well you had another one under contract, a second roughly $10 million deal for about a 7.25 cap, I think you described it as. Is that still moving along and if you complete what's held for sale, is that what gets you to the approximately $40 million for the year?

So first of all, I think that on the last call I described it as that we had come to terms with the buyer for another center at a 7.25 cap rate and that deal continues to move apace and more generally, it is those - it is - the $40 million is made up of the assets that we've identified as I guess as one more asset on top of the two that we had already described. So four assets all together.

Okay. Got it. And Robin, so the renewal lease you talked about with Pat Catan's, you mentioned that weighed on the renewal spreads. Are there other leases that you're working through like that at this point, or do you expect to see renewal spreads begin to improve from here?

There aren't any others currently in our pipeline that have that kind of negative spread currently, that I have a purview on. But I will say that part of our strategy, as I mentioned, is to proactively go after our leasing pipeline, our anchor leasing pipeline proactively and out into the future to make sure that we're shoring up those anchor deals and we are being pretty aggressive with making sure that we get those locked down at a pretty positive spread. That being said, there is a lot of anchor vacancy out in the market, so to say that there would never be a negative spread out there, can't necessarily say that, but we don't have any in our pipeline right now that I have a purview to.

Okay and the grocer at Oakland Mills, so that commenced late in the quarter. How much rent was collected in the quarter and what's the annualized rent look like for that tenant?

It was a matter of days, I don't even think it was a full week and so it was very small in the quarter.

Okay. All right and then, just lastly Phil. Just a question on the same store pool. What's excluded from the same store pool, which projects right now are not in the same store?

Yes so, it's the urban mixed use and a value add that Robin discussed. So Riverview, South Philly, East River for the urban mixed use and then Carman's, Port Richmond, Yorktown and I believe - I don't think you talked about Groton, because Groton is almost been stable. It's stabilized for not quite a full year yet but before the end of year because it's stable as for 4 consistent quarters and we'll move it back in. So those are the ones that are included in redevelopment right now. Senator Square, which we acquired recently is also excluded as an acquisition and then other than those Todd, it's just what's held for sale listed in the supplement, the last page, I believe.

Okay. So moving in, so Groton's and Carman's Plaza, those are almost stabilized so they'll move in later this year?

No, so Groton will because, we don't move them in the day they stabilize because to do so, right, you would get a big pop in same store. So I know there's inconsistent practice about this but we wait until it's been stabilized and - so whatever that is, if 95% occupied, cash paying for a full year before we move it in. Otherwise, you'd move it in and you'd be getting buck straw of that lease up, right, from whatever went down in redevelopment, 80% to 95%, right. So we are very diligent to wait until it's been stabilized, stabilized for 4 consistent quarters. So when we put it in the same store pool, it performs like a same store asset and doesn't reduce the same store growth. And Carmen's will stabilize this year but it won't be for a full year, so it'll move in some time next year.

Got it, okay. Makes sense. Okay that's all I have. Thank you.

Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Bruce Schanzer, CEO for closing remarks.

Thank you, all for joining us this evening. We sincerely appreciate your continued focus on our company. We look forward to seeing many of you in the weeks ahead at the ICSC and NAREIT conferences.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.