Slide 1MARCH 14-16, 2016
SUSTAINABLE INVESTOR RETURNS THROUGH THE ACTIVE
OPERATION AND REDEVELOPMENT OF HIGH QUALITY
SHOPPING CENTERS IN SUPPLY CONSTRAINED MARKETS.
THE RESILIENCE OF OUR BUSINESS IS A PRODUCT OF OUR
CREATIVE APPROACH, OUR STRONG PORTFOLIO, OUR $1
BILLION REDEVELOPMENT PIPELINE, AND OUR STRONG
RELATIONSHIPS WITH KEY CONSTITUENTS RANGING
FROM EMPLOYEES, RETAILERS, MUNICIPALITIES, AND THE
ENVIRONMENT ITSELF.
Fixed Charge Coverage
2008 2009 2010 2011 2012 2013 2014 2015 S.C. REITS
ABR/SF - All Spaces
96.0% 95.2%
87% 88% 89% 90% 91% 92% 93% 94% 95% 96% 97%
2010 2011 2012 2013 2014 2015 S.C. REITS
Occupancy
OUR STORY
We have a business plan that is positioned to produce both short and enduring long term returns:
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+ As core NOI growth
redevelopment should ramp
= 8-10% EQUITY RETURN
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3.8%
4.2%
0%
1%
2%
3%
4%
5%
$19.48
$10
$12
$14
$16
$18
$20
$22
96.0%
90%
91%
92%
93%
94%
95%
96%
97%
98%
Strong Operating Cash Flow Growth…. …While dramatically improving portfolio quality
STRONG NOI GROWTH SHOULD CONTINUE
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…But shop occupancy remains well below the peer group, suggesting room for ongoing NOI
growth.
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
80%
82%
84%
86%
88%
90%
92%
94%
Change in Small Shop Occupancy 4Q13-4Q15
Small Shop Occupancy 4Q15
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…And with excess shop vs. anchor space Shop occupancy last peaked around 95% range in 2007, with lower quality portfolio…
88.7%
99.6% 96.0%
70.0% 72.5% 75.0% 77.5% 80.0% 82.5% 85.0% 87.5% 90.0% 92.5% 95.0% 97.5% 100.0%
2Q 03
3Q 04
4Q 05
1Q 07
2Q 08
3Q 09
4Q 10
1Q 12
2Q 13
3Q 14
4Q 15
QUANTIFYING SHOP OCCUPANCY OPPORTUNITIES
$148
$0
$25
$50
$75
$100
$125
$150
RE/DEVELOPMENT PIPELINE RELOADED
Serramonte Expansion Project CA $109.1 $103.0
Pablo Plaza FL $18.0 $16.8
Countryside Shops FL $16.4 $15.9
Lake Mary Centre FL $17.3 $5.9
Broadway Plaza NY $73.8 $4.0
101 7th Avenue NY $14.1 $1.2
Cashmere Corners FL $1.6 $0.8
Medford MA TBD TBD
Total Active Projects $250.3 $147.6
Projects pending stabilization $42.9 $2.9
Total Dev / Redev $293.2 $150.5
SERRAMONTE CENTER REDEVELOPMENT
2Q15, announced Daly City approval of $109M, 247k gross (209k net) sf expansion of center; Expected yield of 7-8%
New entertainment wing, retail buildings/ restaurants, interior renovations, and ~1,000 stall parking deck; draw shoppers from much larger trade area 12
BARNEYS/101 7th AVE REDEVELOPMENT
Purchased asset in 2012 with an underperforming Loehmann’s store expiring in 2019 at $25/sf rent.
Upon Loehmann’s bankruptcy, signed new 20 year Barneys lease at $80/sf and $14m incremental investment. 13
PABLO PLAZA REDEVELOPMENT
Transformation of Jacksonville Beach shopping center through lease with Whole Foods, which will replace Office Depot in 2019.
PABLO PLAZA REDEVELOPMENT
Replace 43,000 sq/ft of poorly formatted inline space with new anchors/shops: $18MM expenditure, 7-8% yield on costs
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Debt Service Coverage (5) Total Coverage (5) Net Debt to EBITDA (6)
3.8x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
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of 3+% + Redevelopment spending of $100- 150MM annually + Stable 3+%
dividend yield
SAME STORE NOI GROWTH IS THE FOUNDATION
Improvement of large assets and the high quality of the portfolio should allow for enduring 3+% same store NOI growth.
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0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Anchor contractual rent bumps Anchor option spreads Anchor releasing spreads
Shop contractual rent bumps Shop spreads (option and releasing) Occupancy gains (primarily shop)
100 - 110 bps
65 - 75 bps
20 - 40 bps
55 - 65 bps
~ 20 bps
50TH BIRTHDAY OF GROCERY SHOPPING CENTERS
Anchor leases signed decades ago have had flat rents for many years Expiration presents opportunity to mark to market; significant NOI upside ~50% of EQY’s anchors expire in the next 15 years
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500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55
Golden Age
49% Anchors
Last Expiration
$1 BILLION REDEVELOPMENT OPPORTUNITY
Anchor leases prevented redevelopment for decades, so many of our centers are the last remaining low density sites in high density areas
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$1 BILLION REDEVELOPMENT OPPORTUNITY
12 opportunities to spend $1 billion over the next decade Non-retail components represent value and potential funding
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Redevelopment and enhanced 3+% same store growth should generates growth in EQY’s overall NOI
12 Redevelopment Opportunities
~20% NOI TODAY
12 + 10035% of Future NOI
HOW WE GET THERE
OTHER EXISTING DEV/REDEV
$235 M NOI
Core operations and investment in redevelopment should yield a 70% expansion in total NOI
REDEVELOPMENT IMPROVES PORTFOLIO
8-10% RETURNS WITH LOW LEVERAGE
Combining sustainable same store NOI growth of 3%, redevelopment spending of $100-150MM annually and a stable 3+% dividend results in 8-10 shareholder returns
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50%
75%
100%
125%
150%
175%
200%
225%
250%
275%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
NAV today Same Store NOI Growth (levered)
Redevelopment Activity (Net of funding, and at current cap rates) Cap Rate Compression from Redevelopment Asset Improvement
Expected NAV Growth With 3+% Dividend ~10% CAGR
~7% CAGR
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1
2
3
4
5
6
7
8
4Q11 4Q12 4Q13 4Q14 4Q15 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Net Debt / EBITDA Fixed Charge Coverage
Leverage and Coverage
EMPLOYEES
Sustainable growth is about more than just operations and redevelopment, it depends on healthy relationships with many constituents
RELATIONSHIP + OPPORTUNITY = SUCCESS
Anchor Leasing Anchor occupancy consistently near 100%, still significant upgrade activity 4 new anchor leases since 12/31/15: 2 Ross Dress for Less (Serramonte
and Countryside), Burlington (Point Royale), Cost Plus World Market (Buckhead Station)
No sign of significant change in small shop or anchor leasing momentum
Sports Authority Closing locations are in properties with very attractive demographics,
easing the replacement process Relatively new leases and larger sizes (15-30ksf) Expect blended weighted average new lease rate to be similar to old rates
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Property Avg 3-mi Population
Avg 3-mi HH Income
Plaza Escuela Walnut Creek, CA 98,512 118,847$ The Gallery Garden City, NY 165,091 107,642$ Broadway Plaza Bronx, NY 938,461 52,073$ Average 257,675 102,666$
Avg1
The Sports Authority is closing stores at the following 3 properties Plaza Escuela, Broadway Plaza, and The Gallery at Westbury Plaza.
2016 Annual Base Rent
$ 967,840.00
30,245
$ 32.00
$ 28.00
$ 846,860.00
Average
$ 849,803.33
65,391
$ 38.99
$ 36.50
$ 795,656.67
Total
$ 2,549,410.00
$ 2,386,970.00
Avg2
The Sports Authority is closing stores at the following 3 properties Plaza Escuela, Broadway Plaza, and The Gallery at Westbury Plaza.
2016 Annual Base Rent
BU 3210 - Plaza Escuela
0
0
0
0
0
0
0
0
0
0
0
0
0
117,700,000
98,512
11,594,862,400,000
$ 118,847
$ 13,988,291,900,000
269,000,000
165,091
44,409,479,000,000
$ 107,642
$ 28,955,698,000,000
224,659
$ 100,204
FOOTNOTES
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(1) NOI growth is presented on a same property cash basis for each respective period end. Beginning 1Q15, SS NOI was reported including and excluding redevelopments.
(2) Occupancy is for the consolidated shopping center portfolio as of each respective period end, and excludes development and redevelopment properties, and non-retail assets. Average Base Rent is for the consolidated shopping center portfolio, and beginning 1Q15 includes development and redevelopment properties.
(3) Represents the total budgeted cost of development and redevelopment projects less costs incurred through each respective period end.
(4) Amounts as of 12/31/2015 and in millions (5) Debt Service Coverage is Adjusted EBITDA to Fixed Charges as reported in the Supplemental Information
Package. Total Coverage ratio includes dividends paid. (6) Annual EBITDA for year-ended periods. Calculated as reported in the Supplemental Information Package.
FORWARD-LOOKING STATEMENTS
Certain matters discussed by Equity One in this presentation constitute forward- looking statements within the meaning of the federal securities laws. Forward- looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “might,” “would,” “expect,” “anticipate,” “estimate,” “could,” “should,” “believe,” “intend,” “project,” “forecast,” “target,” “plan,” or “continue” or the negative of these words or other variations or comparable terminology. Although Equity One believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that these expectations will be achieved and actual results could differ materially from current expectations. Factors that could cause actual results to differ from expectations are described in Equity One’s filings with the Securities and Exchange Commission.
This presentation also contains non-GAAP financial measures, including Funds from Operations, or FFO. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in Equity One’s quarterly supplemental information package and in filings made with the SEC which are available on its website at www.equityone.com.
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212.796.1747 mostrower@equityone.com
New York, NY 10022
OUR COMPANY
OUR PURPOSE
OUR COMPANY
OUR STORY
WHY STRONG NOI GROWTH SHOULD CONTINUE
QUANTIFYING SHOP OCCUPANCY OPPORTUNITIES
50TH BIRTHDAY OF GROCERY SHOPPING CENTERS
$1 BILLION REDEVELOPMENT OPPORTUNITY
$1 BILLION REDEVELOPMENT OPPORTUNITY
$1 BILLION REDEVELOPMENT OPPORTUNITY
HOW WE GET THERE
RELATIONSHIP + OPPORTUNITY = SUCCESS