Welcome to the Second Quarter 2015 Cedar Reality Trust Earnings Conference Call. As a reminder, this conference is being recorded. At this time, all audience lines have been placed on mute. We will conduct a question-and-answer session following the formal presentation. I’d now turn the call over to Nicholas Partenza. Please proceed.

Good evening and thank you for joining us in the second quarter 2015 Cedar Reality Trust earnings conference call. Participating in today’s call will be Bruce Schanzer, Chief Executive Officer; Philip Mays, Chief Financial Officer; and Nancy Mozzachio, Chief Operating 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. Due to a variety of risks and uncertainties, including those disclosed in the company’s most recent Form 10-K and other periodic filings with the SEC, forward-looking statements speak only as of the date of this call, August 6, 2015 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 Cedar’s earnings press release posted on its website for reconciliation 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. Good evening and thank you for joining us on Cedar’s second quarter 2015 earnings call. Notably having started with Philip Mays, our CFO, during the second quarter of 2011, this call represents the fourth anniversary of having – joined Cedar, which commence the period of reinvention and renewal for this very special organization. Although I feel great about all the teams Cedar has accomplished over the past four years, we have most of the marathon yet to run. Accordingly, on this call, I will spend a few minutes on the ground we have covered and then turn to the road ahead. Before doing so, I would like to acknowledge my senior executive colleagues, who partner with me and challenge me everyday mainly Phil Mays; Nancy Mozzachio, our COO; Mike Winters, our CIO; Lori Manzo, our Head of Leasing; Charles Burkert, our Head of Construction and Development; and Adina Storch our General Counsel. I addition I would like to thank all the members of team Cedar from members of our board of directors to members of our maintenance crews for their enduring commitment to everyday excellence. A relatively small company like ours with ambitions of being among the leading shopping center REITs, we’ll only get there through the collective effort of this very special group of people. The second quarter continues to out process of steady improvement. Our operating FFO of $0.14 per share was generally as expected and allowed us to raise low end of our full year guidance. Our same-store NOI growth, including redevelopment, up 3.2% for the quarter, and 2.9% for the first half are both slightly ahead of expectations though I would note that because of our relatively small same-store pool of growth in any one quarter is not terribly instructive as it can and…

Thank you, Bruce. Operating fundamentals for the quarter evidenced Cedar’s tactical focus on small shop and junior anchor lease shop as well as progress on our new ground-up pad projects. For the second quarter of 2015, we completed 15 new leases representing 67,600 square feet with average first year base rents of $12.36 per square foot and comparable tax spread of 9.8%. We renewed 29 leases representing 114,500 square foot with average first year base rent of $ 19.50 per square foot and 7.2% cash spread and no tenant improvement dollars. To date we have completed approximately 70% of square footage expiring in all of 2015. In addition, our leasing team has completed approximately 15% of 2016 expiration. Notably, small shop occupancy now stands at 83.3% for a 115 basis point increase year-over-year. As discussed on previous calls with small shop occupancy hovering around 83%, we have the opportunity for occupancy gains in this segment of our portfolio. As we start to see green suite to emerge in the broader economy, we are seeing greater momentum and demand from small shop tenants. Junior anchor activities during the quarter was solid with the execution of our second home goods store in 2015. Home goods will occupy approximately 31,000 square feet at Colonial common shopping center in Harrisburg, Pennsylvania and we will open in Late fall. We have systematically upgraded Colonial Common tenancies and rent over the last few years with commitments from Ulta, Old Navy, [indiscernible]. Home goods joins a solid bench of retailers at this asset, which in turn should help us to drive new and renewal rent more generally. With the execution of home goods to Colonial Commons and Trexler Mall, we are now 96% leased and 97% leased respectively. Importantly, the opening of home goods at Trexler Mall…

Thanks, Nancy. On this call, I will discuss our second quarter operating results and provide update on our balance sheet and 2015 guidance, starting with the operating results. Operating FFO was $0.14 per diluted share for the second quarter of 2015, which is $0.01 per share higher than the first quarter of 2015 and consistent with the second quarter of last year. While earnings consistent with a year ago may not initially sound interesting please note that over the last year our adjusted EBITDA has decrease from 7.7 times to 7.1 time and the quality of our portfolio has improved as evidenced by an increase in both three mile population density and ABR per square foot. With this backdrop of an improved balance sheet and portfolio, we are pleased with our operating results. Additionally, these results are consistent with the strategic plan we have been discussing over the last couple of years and with the guidance communicated at the beginning of this year. Turning to the balance sheet. Last quarter, I discussed the $100 million of unsecured term loans we closed in February effectively pre-fund $100 million of mortgages maturing in 2015. As a reminder, these unsecured term loans consists of $50 million five year term loan and $50 million seven year term loan. We fully borrowed the five year term loan at closing and just brought down that proceeds from the seven year term loan in June. With which we repaid all outstanding amounts under our line of credit. Accordingly, the remaining $70 million of mortgages, maturing over the second half of 2015, are being rolled to our line of credit. They are leading us with around $200 million of available borrowing capacity. Notably after repaying these remain mortgages almost 70% of our property NOI will be unencumbered. This is a significant transformation from a company that we relied exclusively on secured debt just four years ago and going forward it will provide increased financing and operating flexibility. And lastly guidance. With half of the year completed, we are raising the low end of our full year 2015 operating FFO guidance, an updated range of $0.52 to $0.54 per diluted share. At this time, no acquisitions are included in our guidance range. It does not mean that we will not acquire any assets prior to the end of the year. However as our acquisition pipeline consists solely of off market acquisition that perceived at a hard to predict pace, we will just update our guidance each quarter based on closed transactions. With that I’ll open the call to questions.

Thank you. At this time, we’ll now be conducting the question-and-answer session [Operator Instructions] Our first question comes from the line of RJ Milligan with Baird. Please proceed with your question.

Hi. Good afternoon guys.

Hi, RJ.

Hi, RJ.

So, Bruce, you were talking about the big dislocation in the public and private market pricing which we would agree. At what point do you think that buying your stock back become attractive? Is there a spread between what you think the appropriate cap rate is and where your stock trading? Where shrinking the company which still be appropriate given that it would be more attractive to buyback stock or just buying properties?

It’s a great question, RJ. The answer is not so simple. We do a fair amount of analysis around this, so it’s certainly something that we look at. The reason why it’s not so simple frankly is because some of the things that you touched on in your question such as being cognizant of the size of the company and maintaining because we’re relatively small sized company and appropriate enterprise value for the platform that we have to make sure that we’re running efficiently. But just moving beyond that with some of the math, we think about buyback our stock, we think about in the context of our investments alternatives. And of course, we look at buying back stock which arguably that it discounts NAV versus say buying another asset or taking our free cash flow and investing it into an opportunity to grow the value of one of our assets. And so ignoring the opportunity to invest outside of our portfolio and just thinking about buying back stock versus making an investment back into one of our centers that generates a higher return. Realistically, we would probably do that before we would buyback our stock. And so I think that realistically we’re not going to buyback our stock, but if you ever want to know what I think about the value of our stock just look at Form 4 filings, I take my own money and buyback our – and buy our stock all the time because I do believe that it’s a terrific value. I just think when we think about using Cedar’s free cash flow the evaluation is a little more complicated.

Okay. That’s helpful. And putting on your former banker hats, can you talk about what – if any there is interest from private equity for the types of assets that you guys have in your portfolio or maybe even though lower to your assets that you guys are looking to dispose of over the next couple of years?

We have found there to be a very deep pool of investors for our assets as you know having been with us right from the beginning RJ, the asset quality has dramatically improved, so it constitutes the lower half of our portfolio. Today it is dramatically different than what constituted to lower half of our portfolio when we first started the process of improving the company. When we first started the process of improving the company, there was a very deep pool of investors for what we’re admittedly lower quality assets. What we find today is that the people who are buying our assets are generally speaking REITs much like Cedar, but who aren’t as focused on the types of metrics and relative asset quality objectives that we have in improving our portfolio. So very often we’re selling to either non-traded REITs or REITs who are willing to own some of the assets we’re selling that are relatively high quality assets [indiscernible] being equal, but just don’t worth well for a company like ours, where we’re aspired to have truly a top tier portfolio.

Okay. And then my last question is about small shop occupancy at about 83%. We’ve seen improved strength in the small shop demands from tenants. Curious where you think you can bring that maybe over the next two years and maybe a question for Phil, what does that equates to in terms of NOI?

Why don’t I touch on the first one and may be I’ll let Nancy to chime in on that as well and then Phil can weigh in on what that does from an earnings perspective. We love to bring out the portfolio broadly speaking is in that kind of 92% to 93% occupied neighborhood and we would love to get that call at 95%-ish, most of that would come from this small shop side of things and to achieve that we would probably pick up a little bit of large shops occupancy but realistically we’ll probably get our 83% to – the higher 80s of course 87% or 88%. And I think that considering our track record during the last cycle and recovery space, I don’t think that’s an unreasonable expectation. Just to teed up for Phil like that would – we invest to call roughly $2.5 million square feet; he would be talking about roughly 125,000 square feet of incremental space being filled. So unless if you want to do that math, but it’s actually probably $20 a foot on a 125,000 square feet.

Yes, if you look at in the supplement, the in-place in all shops RJ are a little north of 18% and actually we’ve been rolling those up around 8% each quarter. So you know you would be talking a higher-end, maybe closer to $20 on that square footage.

Okay, great. Thanks guys.

You got it.

Thank you. Our next question comes from the line of Collin Mings with Raymond James. Please proceed with your question.

Hi, good afternoon.

Hi.

I guess the first question is maybe can you just provide us a little bit more color on where the acquisition pipeline stands and maybe to what extent it’s evolved over the last couple of quarters. I know I mean – I think last call kind of putting the benchmark maybe thinking around a 100 to 150 for the full year. It sounds like may be that’s just giving us the timing of some of the off market metrics going after that maybe pushed out may be into early 2016 now, but just kind of curious how you’re thinking about that pipeline?

So the pipeline hasn’t really changed from where it was when we last spoke and we continue to be very excited about it in terms of the quality of assets and the number of assets we have identified. It’s probably somewhere between 10 and 15 assets that there we’re actively underwriting right now, but we’re relatively small company and we try to do things patiently and in a conservative manner. So we’re not biting off more than we can chew. You’re right that considering where we are in the year and considering where we are in terms of our diligence process on the assets. We alluded to on our last call there is a chance that we don’t get up to 150 million but I would be surprised if we don’t get at least a couple of deals done before the end of the year which would get us over a $100 million. So again, we still very good about every thing, the luxury and one of the ways that we add value through sourcing off market deals is that we have the opportunity to carefully and patiently work these assets make sure that we understand what we were buying before we buy it, which in turn allow us to not only hopefully get slightly more attractive returns on the but also be more assured of achieving those returns through the very careful diligence process that we undertake when buying these deals. So again it takes a little bit longer these aren’t marketed processes with specific times for a specific milestones in terms of buying an asset but at the same time we end up with a more well underwritten acquisition that we’re more sure of achieving the returns on.

Okay, that’s helpful. And then just – just in the context of the recent merger announcement, can you update us on how you are thinking about earlier your collective exposure to Giant, Stop & Shop, and Food Lion right now and any sense on it, if any of your properties could be impacted from this merger?

Great question. Why don’t we break that up, I’ll let Nancy to talk about whether she thinks any of our assets in particular will be impacted. I could tell you that broadly speaking, it’s really a double edged sword. On the one hand, our hold is a terrific operator on the margin, a better operator than Delhaize. Our hold has much, much better balance sheet than Delhaize dose. So in the near-term, it’s a good thing because although we have slightly more exposure in that, dramatically more exposure and we have exposure to when you take both all the data put together, so now we have – now where Delhaize banners are a part of our family that has a better balance sheet and that is overall better operator. That said, as a company, we’ve been trying to reduce our exposure to single credits and certainly despite are being comfortable with our hold in the near term. We’re very mindful of that concentration and overtime you will see us reducing our exposure to what is now four banners verus what was two banners. And Nancy maybe you might want to take a minute just to talk a little bit about our specific assets and whether we’re worried about [indiscernible] or anything like that?

So we have – currently, we have 21 anchor spaces that are part of the combined banner, so it’s our hold and Delhaize, a handful of Food Lions towards. We don’t really see any concern in our Food Lions stores. We thought our comprehensive review and taken the competitive source out to quite a sizable radio. With regard to our hold in Giant and Stop & Shop maybe a few here and there truthfully, but nothing to really cause concern in most cases, what we find is they maybe have a use that is roughly three miles away. And most of us know when you’re in the grocery anchored business three miles is really nothing. In many cases, you can have the same banners three miles away and have two productive stores. So we’re not very concerned there. On the Delhaize side, there is a Hannaford location that has two Stop & Shop locations that surrounded. Again Hannaford has a little bit of a different customer base and they differentiate themselves from Stop & Shop that currently competing with them. So – and something we will keep our eye on but from a competitive standing, let’s say we’re probably okay.

Okay, that’s very helpful. Thanks for all the details there. Really just one last one from me, it’s more of a housekeeping questions. Just as I think about I think now – in addition – with the addition of the properties sold subsequent to the end of the quarter, I think you had $6 million of dispositions for the year. What type of cap rate as far as – are you looking at on kind of what you realized on those sales?

We didn’t even know where to begin. Those are real tag of assets that probably high single digits I would guess.

Okay.

And it’s literally not instructive of anything, one of them was K-Mart that you know was more of redevelopment play, there really is – it’s not cap rate, isn’t the best way to think about any of those assets.

Okay, fair enough. I guess – and then, well, I guess you thought on the disposition front, just going back to the fact of maybe some of the acquisition pipeline being put – is there any way we should think about the dispositions over the remainder of the year just in context of you guys willing to be somewhat match funded and how you look at the timing of those sales?

Yes, I would say the only thing I guided to Collin is that whereas in the past, maybe we would let ourselves to have a little bit more time with the purchase being on the line before it paid down the line with the dispositions. I think I am pushing Mike and his team to try and get a little bit closer from a matching funding perspective just so that we don’t expose ourselves to too long with period where we were mismatched between assets being long and liabilities being too short.

Okay, great. Good luck during the quarter guys.

Thanks.

Thanks.

Thank you. Our next question comes from the line of Todd Thomas with KeyBanc. Please proceed with your question.

Hi, good afternoon. Bruce back to the comments around the disconnect between your stock in the public market and private market valuations. How does that play into your decision making? Does it cause you to pause on certain acquisition opportunities that you might be looking at and maybe execute a little differently in any way as you think about return hurdles or allocating capital at all?

Not really, and I’ll tell you why. It does obviously factor into how we think about the company generally, but it doesn’t really factor into how we think about the process that we’ve undertaken in terms of this capital migration strategy that we speak of. And the reason is because what we’re doing is we’re selling assets and buying assets in a similar market environment where we’re not doing anything that really impacts our NAV per se, right now, that – which we’re selling assets arguably at NAV to buy assets, add NAV, we’re selling assets that we think won’t grow as well as the assets we’re buying and we think that for a lot of reasons our portfolio and our company will be better off having the assets we’re buying and we’ll also better off not having the assets that we’re selling. Obviously, when we look at where our share price is we have to mindful of two things. Right, we have to mindful of what that says about our cost of capital and obviously if over a long period of time that was where our share price settles, we would have to rethink what our reference price is for purpose of things like our – the unlevered IRR, which we underwrite our acquisition, all right. So again that is one place where we potentially think about our share price in evaluating investments. Another is that obviously the market could be wrong for a week or a month but long period of time to be obviously the market probably won’t be wrong. So if we see our share price settling at a point at which we’re commenced to discount NAV. We’re going to have to think about what the market is saying either A) about Cedar, or B) about where real estate prices are likely to go. And so that in turn might impact our investments analysis and how we think they allocating capital. But in terms of today it has much more to do with our executing, our capital migration strategy and then – we think about share price at all, it really have to do with just what this is doing to our weighted average cost of capital.

Okay, it’s helpful. And then just for Phil a couple of balance sheet questions here. The $50 million floating rate term loan that that was drawn down earlier in the year. Any plans to swop that to fix or do you plan what that flows?

Yes, so we swop both of them in the fix, beginning July 1st. And so on the debt page the rates that are disclosed as of June 30, there is a footnote that actually – that either the swop rates beginning July 1st and going forward. And I will just give you the rates. I believe it’s 2.8% for the $50 million, five year and 3.3% for the 50 year – for the $50 million, seven year.

Okay. And then the two October maturities that you spoke about have those been paid down on the line already or when are those open for prepayment?

Yes, I think this week, they will be prepaid or paid off early.

Okay. All right, great, thanks.

Thank you. Our next question comes from the line of Craig Kucera with Wunderlich. Please proceed with your question.

Yes, hi, guys. I appreciate the color on the capital recycling and it sounds like the sales you’ve had year-to-date are not really indicative of a reasonable cap rate to think about as far as the spread between what you’re buying and selling, but are you still thinking that as you attempt to match fund, it should be somewhere in the 200 basis point range.

Yes, probably less than that.

Got it.

I would say it’s probably less than 150...

Okay. And looking back the Quartermaster Plaza, which obviously was a big acquisition last year that’s now annualized. I think at the time of the acquisition or at least the quarter after occupancy was about 98% or at just under 14 and you pushed rent nicely to about [indiscernible] there and your occupancy is at 93%. Do you think that market can handle, do you think you can bring that asset closer to 97%, 98% and can you maintain kind of your rent where you’re at right now or is that sort of kind of a balancing act?

I will let Nancy to expand on that. I could tell you that most of the movements in occupancy there have been one particular tenant that moved out that had a rent that was below the average for the center. We think that there is probably 30-ish percent upside between the rent of that tenant was paying and where we could probably re-lease that space. And so we feel pretty good about being able to push the rent in that space and what that would do the occupancy. I don’t know is there anything else in that center that’s particularly large and we’re…

No I think we – since repurchase the center, [indiscernible] about 10,000 square feet I am going to say. So we’ve taken a step back when we – when we first bought the center and well before of course are in due diligence. We identified the spaces that we thought were lower market, this the tenant that Bruce is referring to would knew is below market, probably lower quality tenants that we would want to have in this particular asset. And we’re trying to be mindful of the fact that we have an asset across the street. And so as we’re looking sort of more generally of tenanting both assets, we’re trying to create the strongest tenant mix. So we don’t want to just plug-in tenant simply for specific rents. We wanted tenant to be able to do quality sales and pay the rents. And so we have to be mindful that tenants who are across the street as well. So this particular tenants [indiscernible] does not compete with the tenant across the street, so we expect very strong sales there. We’re able to drive very strong rents. And we expect that the anchored space that Bruce is referring to 25,000 square feet or so that we will be able to better the rent and certainly off the quality and traffic that would be associated with that kind of thing.

Okay, great thanks.

Sure.

Thank you. [Operator Instructions] There are no questions at this time. I’d like to turn the floor back to management for closing comments.

Thank you for joining us this evening. Our best wishes to you all for an enjoyable rest of the summer.