Curbline Properties (NYSE:CURB) used its fourth quarter 2025 earnings call to highlight what management described as a strong first year as a standalone public company, pointing to substantial acquisition volume, leasing momentum, and a 2026 outlook centered on continued investment-driven growth.
Management frames 2025 as a high-growth first year
Chief Executive Officer David Lukes said the fourth quarter “capped an incredible first year” for the company following its spin-off, emphasizing Curbline’s focus as “the only public company exclusively focused on acquiring top-tier convenience retail assets across the United States.”
On operations, management cited more than 3% same-property growth in 2025, following 5.8% growth the prior year. Lukes also highlighted capital efficiency, stating capital expenditures were 7% of NOI, which he characterized as among the most capital-efficient profiles in the public REIT sector.
Convenience retail thesis: fragmented market, flexible buildings, diversified tenants
Lukes outlined three pillars supporting the company’s growth strategy: a large addressable investment market, alignment with consumer “errand” behavior, and a balance sheet and team structured to scale.
He said Curbline’s portfolio totals almost 5 million square feet, while describing the broader U.S. convenience retail market as roughly 950 million square feet. While noting that not all space meets Curbline’s standards, he said the company targets assets on primary corridors with strong demographics, high traffic counts, and creditworthy tenants.
Management also discussed sourcing advantages in what it described as a highly fragmented acquisition landscape. Lukes said that of roughly $1 billion of acquisitions completed since the spin-off, 27% were direct/off-market transactions and 73% were sourced through brokers, involving 24 different brokerage companies on marketed deals.
On consumer behavior, Lukes cited third-party geolocation data indicating that about two-thirds of visitors stay less than seven minutes on Curbline’s properties, with customers often returning multiple times per day. He said the company prefers “straightforward rows of shops” that can accommodate a wide range of uses, supporting tenant demand and limiting capital outlay.
He added that the company executed 67 new leases in 2025, including 64 with unique tenants, and said 70% were with national credit operators. Lukes said the tenant roster is highly diversified, with nine tenants contributing more than 1% of base rent and only one tenant above 2%.
Fourth quarter performance: NOI strength and stable occupancy
Chief Financial Officer Conor Fennerty said fourth quarter results came in ahead of budget, driven mainly by higher-than-forecast NOI related to rent commencement timing, higher acquisition volume, and lease termination fees, partially offset by G&A.
Fennerty reported that NOI rose 16% sequentially and nearly 60% year-over-year, driven by acquisitions and organic growth. He also noted a $1 million gross-up of non-cash G&A expense in the quarter offset by $1 million of non-cash other income, describing it as a function of the shared services agreement and “zero net income.” He said this gross-up would continue while the agreement remains in place and is excluded from G&A figures and targets.
Operationally, the lease rate was unchanged from the third quarter at 96.7%, with occupancy up 20 basis points. Leasing volume slowed from the third quarter, which management attributed to less available space rather than weaker demand.
Same-property NOI increased 3.3% for the full year and 1.5% for the fourth quarter, despite what Fennerty called a 50-basis-point headwind from uncollectible revenue. He reiterated the company’s capital efficiency, with fourth quarter capex at 8.9% of NOI and full-year capex just under 7% of NOI.
2026 outlook: FFO growth supported by investment plan and operating leverage
Curbline introduced 2026 FFO guidance of $1.17 to $1.21 per share. At the midpoint, management said it implies 12% year-over-year growth, which Fennerty said would be among the highest in the REIT sector and “certainly in the retail space.”
Key midpoint assumptions for 2026 included:
- Approximately $700 million of full-year investments
- A 3.25% return on cash, with interest income expected to decline as cash is deployed
- Capex below 10% of NOI
- G&A of roughly $32 million, including fees paid to SITE Centers under the shared services agreement
For same-property NOI, management guided to 3% growth at the midpoint (with a 2% to 4% range). Fennerty emphasized that the same-property pool is “growing but small,” because it includes only assets owned for at least 12 months as of Dec. 31, 2025, leaving a large non-same-property pool. He also said uncollectible revenue would remain a year-over-year headwind in the same-property pool, and indicated a “60 basis point bogey” for bad debt in 2026 versus about 30 basis points in 2025 for the same-property pool.
Discussing quarterly cadence, Fennerty said interest expense is expected to rise to about $8 million in the first quarter of 2026 due to the funding of a private placement offering in January. He also said the $1.3 million of lease termination fees recorded in the fourth quarter of 2025 are not expected to recur in the first quarter of 2026. On lease commencements, he said management expects acceleration later in 2026 as space recaptured in the fourth quarter becomes rent-paying, with a “pretty big pickup” expected in the back half of the year.
Capital markets activity and balance sheet position
Fennerty said Curbline ended 2025 with what he described as a “unique capital structure aligned with the company’s business plan.” During the fourth quarter, the company closed the first tranche of a $200 million private placement offering, with the remaining funding completed in January. He said total debt capital raised since formation reached $600 million at a weighted average rate of roughly 5%.
He also said the company sold 5.2 million shares on a forward basis in the fourth quarter and first quarter to date, representing $120 million of expected gross proceeds that are expected to settle in 2026. Including $290 million of cash on hand at year-end, plus debt and equity proceeds, management said the company had $582 million of immediate liquidity to fund investments, leaving less than $100 million remaining to fund investments included in guidance after retained cash flow.
Fennerty said the company ended the year with a leverage ratio of less than 20%, and management emphasized that access to unsecured fixed-rate debt and the ATM provides differentiation versus private buyers in the convenience retail space.
On acquisition underwriting, Lukes said cap rates have remained “just north of 6%” over the last couple of quarters, while noting a wide range from the mid-5% area to the high-6% area depending on asset-specific factors. Management said it currently has visibility on about half of the $700 million acquisition pipeline for 2026 based on deals closed, under contract, or awarded, and added that the current pipeline is exclusively single-asset acquisitions rather than portfolios.
The company also addressed lease termination fees, with Fennerty noting just over $2 million of termination fees in 2025 and just over $4 million in 2024, describing the item as “chunky” but something the company expects to occur at a normal level over time and to grow as the portfolio grows.
Finally, management said it does not have dispositions planned in its 2026 budget. Lukes described a small sale in the fourth quarter—sub-$2 million, characterized as a vacant piece of land—sold to SITE Centers because it was adjacent to a SITE parcel and management viewed the offer as attractive relative to future costs.
About Curbline Properties (NYSE:CURB)
Curbline Properties Corp. is a real estate investment trust which is an owner and manager of convenience shopping centers positioned on the curbline of well-trafficked intersections and major vehicular corridors in suburban. Curbline Properties Corp. is based in NEW YORK.
