10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 1-42265

Curbline Properties Corp.

(Exact name of registrant as specified in its charter)


Maryland		93-4224532
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

    320 Park Avenue
New York, New York

    10022

    (Address of principal executive offices)

    (Zip Code)

Registrant’s telephone number, including area code: (216) 755-5500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	CURB	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2024 the registrant had 105,041,594 shares of common stock, $0.01 par value per share, outstanding.

EXPLANATORY NOTE

This quarterly report of Curbline Properties Corp. (the “Company” or “Curbline Properties”, “we” or “us”) includes the financial statements of the Company, as of September 30, 2024 and for the period July 15, 2024 through September 30, 2024, and the Company’s predecessor, Curbline Properties Corp. Predecessor (“Curbline Predecessor”), as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023. Curbline Predecessor means the combination of entities under common control that have been “carved-out” of SITE Centers’ consolidated financial statements and presented on a combined basis.

On October 1, 2024, SITE Centers Corp. (“SITE Centers”) completed the spin-off of Curbline Properties, pursuant to which SITE Centers contributed 79 convenience properties to the Company. The spin-off was effected pursuant to the Separation and Distribution Agreement, dated as of October 1, 2024, among the Company, Curbline Properties LP, a subsidiary of Curbline Properties, and SITE Centers, as further described in the Information Statement (as defined below).

The spin-off is more fully described in the information statement included as Exhibit 99.1 to the Company’s Registration Statement on Form 10 (File No. 001-42265) filed with the Securities and Exchange Commission on September 3, 2024 (the “Information Statement”). The spin-off became effective at 12:01 a.m., Eastern Time, on October 1, 2024.

Following the spin-off, the Company became a separate publicly traded company and intends to qualify and elect to be taxed as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the Company’s initial taxable year ending December 31, 2024. The Company’s common stock trades on the New York Stock Exchange under the symbol “CURB”.

The financial statements of the Company covered in this report present the financial condition of the Company as of September 30, 2024, which is prior to the spin-off. Therefore, the discussion of the Company’s results of operations, cash flows and financial condition set forth in this report is not necessarily indicative of the future results of operations, cash flows or financial condition of the Company as an independent, publicly traded company. Moreover, the combined financial statements for Curbline Predecessor are not necessarily indicative of the Company’s results of operations, cash flows or financial position following the completion of the spin-off. For more information regarding the risks related to our business, refer to the section captioned “Risk Factors” contained in the Information Statement.

Curbline Properties Corp.

QUARTERLY REPORT ON FORM 10-Q

Quarter Ended September 30, 2024

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements – Unaudited
	CURBLINE PROPERTIES CORP.
	Balance Sheet as of September 30, 2024	4
	Statement of Equity for the Period July 15, 2024 Through September 30, 2024	4
	Notes to Financial Statements	4
	CURBLINE PROPERTIES CORP. PREDECESSOR
	Combined Balance Sheets as of September 30, 2024 and December 31, 2023	5
	Combined Statements of Operations for the Three Months Ended September 30, 2024 and 2023	6
	Combined Statements of Operations for the Nine Months Ended September 30, 2024 and 2023	7
	Combined Statements of Equity for the Three and Nine Months Ended September 30, 2024 and 2023	8
	Combined Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	9
	Notes to Combined Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
SIGNATURES		30

Curbline Properties Corp.

BALANCE SHEET

(unaudited; in thousands; except share amounts)


	September 30, 2024
Assets
Cash and cash equivalents	$	1
	$	1
Liabilities and Equity
Equity
Common stock, $0.01 par value per share; 400,000,000 shares authorized; 104,860,322 shares issued at September 30, 2024	$	1,048
Preferred stock, $0.01 par value per share; 100,000,000 shares authorized; 0 shares issued at September 30, 2024	—
Additional paid-in-capital		(1,047	)
Total equity	$	1

Curbline Properties Corp.

STATEMENT OF EQUITY

(unaudited; in thousands)


	Common Stock		Additional Paid-in Capital			Total Equity
Balance, July 15, 2024	$	—	$	1		$	1
Issuance of common stock		1,048		(1,048	)		-
Balance, September 30, 2024	$	1,048	$	(1,047	)	$	1

The accompanying notes are an integral part of these financial statements.

Notes to Financial Statements (Unaudited)

Organization and Description of Business

Curbline Properties Corp. (the “Company” or “Curbline Properties”) was incorporated in the state of Maryland on October 25, 2023 and was capitalized with $1,000 on July 15, 2024. The Company was a direct, wholly owned subsidiary of SITE Centers Corp. (“SITE Centers”), formed in contemplation of a spin-off transaction in which SITE Centers planned to contribute substantially all of its convenience properties to the Company, or its subsidiaries, and distribute all the outstanding shares of common stock of the Company to SITE Centers’ common shareholders. Upon formation, the Company’s authorized capital stock consisted of 100 shares of common stock, $0.01 par value per share, all of which were issued to SITE Centers.

On September 30, 2024, the Company’s charter was amended and restated to, among other things, increase the Company’s authorized capital stock to 400,000,000 shares of common stock, $0.01 par value per share, and 100,000,000 shares of preferred stock, $0.01 par value per share. Also, on September 30, 2024, in connection with the spin-off, the Company issued a dividend to SITE Centers of 104,860,222 shares of Curbline Properties common stock, resulting in a total of 104,860,322 shares outstanding and held by SITE Centers.

Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles as set forth within the Financial Accounting Standards Board’s Accounting Standards Codification. Statements of operations and cash flows have not been prepared as no material substantive transactions related to these statements have taken place during the nine months ended September 30, 2024.

Subsequent Events

Spin-Off

On October 1, 2024, SITE Centers completed the spin-off of the Company pursuant to which SITE Centers contributed 79 convenience properties to the Company. The spin-off was accomplished via a pro rata special distribution of two shares of Curbline Properties common stock for every one SITE Centers common share held by SITE Centers common shareholders on September 23, 2024, the record date, resulting in a distribution of an aggregate of 104,860,322 shares of Curbline Properties common stock. Following the closing of the spin-off, Curbline Properties operates as a separate publicly traded company.

Curbline Properties Corp. Predecessor

COMBINED BALANCE SHEETS

(unaudited; in thousands)


	September 30, 2024			December 31, 2023
Assets
Land	$	409,267		$	316,212
Buildings		736,452			622,414
Fixtures and tenant improvements		72,881			58,676
		1,218,600			997,302
Less: Accumulated depreciation		(156,831	)		(136,168	)
		1,061,769			861,134
Construction in progress		14,053			13,504
Total real estate assets, net		1,075,822			874,638
Cash and cash equivalents		2,541			566
Restricted cash		—			155
Accounts receivable		12,670			11,528
Intangible assets, net		62,909			34,330
Other assets		13,119			415
	$	1,167,061		$	921,632
Liabilities and Equity
Mortgage indebtedness, net	$	—		$	25,758
Below-market leases, net		30,452			21,243
Accounts payable and other liabilities		19,587			11,993
Total liabilities		50,039			58,994
Commitments and contingencies (Note 4)
Equity
Curbline Predecessor equity		1,117,022			862,638
Total equity		1,117,022			862,638
	$	1,167,061		$	921,632

The accompanying notes are an integral part of these combined financial statements.

Curbline Properties Corp. Predecessor

COMBINED STATEMENTS OF OPERATIONS

(unaudited; in thousands)


	Three Months
	Ended September 30,
	2024			2023
Revenues from operations:
Rental income	$	29,576		$	24,061
Other income		186			174
		29,762			24,235
Rental operation expenses:
Operating and maintenance		3,541			2,531
Real estate taxes		3,311			3,441
General and administrative		3,578			1,105
Depreciation and amortization		11,108			7,989
		21,538			15,066
Other income (expense):
Interest expense	—				(388	)
Transaction costs and other expense		(23,634	)		(373	)
Gain on disposition of real estate	—				371
		(23,634	)		(390	)

Net (loss) income	$	(15,410	)	$	8,779

The accompanying notes are an integral part of these combined financial statements.

Curbline Properties Corp. Predecessor

COMBINED STATEMENTS OF OPERATIONS

(unaudited; in thousands)


	Nine Months
	Ended September 30,
	2024			2023
Revenues from operations:
Rental income	$	85,386		$	67,697
Other income		572			493
		85,958			68,190
Rental operation expenses:
Operating and maintenance		9,532			7,540
Real estate taxes		9,307			8,819
General and administrative		7,304			3,414
Depreciation and amortization		29,719			23,183
		55,862			42,956
Other income (expense):
Interest expense		(416	)		(1,166	)
Transaction costs and other expense		(30,879	)		(1,054	)
Gain on disposition of real estate	—				371
		(31,295	)		(1,849	)

Net (loss) income	$	(1,199	)	$	23,385

The accompanying notes are an integral part of these combined financial statements.

Curbline Properties Corp. Predecessor

COMBINED STATEMENTS OF EQUITY

(unaudited; in thousands)


	Curbline Predecessor Equity
Balance, December 31, 2023	$	862,638
Net transactions with SITE Centers		88,671
Net income		14,211
Balance, June 30, 2024		965,520
Net transactions with SITE Centers		166,912
Net loss		(15,410	)
Balance, September 30, 2024	$	1,117,022

	Curbline Predecessor Equity
Balance, December 31, 2022	$	691,778
Net transactions with SITE Centers		56,480
Net income		14,606
Balance, June 30, 2023		762,864
Net transactions with SITE Centers		14,770
Net Income		8,779
Balance, September 30, 2023	$	786,413

The accompanying notes are an integral part of these combined financial statements.

Curbline Properties Corp. Predecessor

COMBINED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)


	Nine Months
	Ended September 30,
	2024			2023
Cash flow from operating activities:
Net (loss) income	$	(1,199	)	$	23,385
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization		29,719			23,183
Amortization and write-off of debt issuance costs		93			116
Assumption of buildings due to ground lease terminations		(2,678	)		—
Gain on disposition of real estate		—			(371	)
Net change in accounts receivable		(1,127	)		(1,529	)
Net change in accounts payable and other liabilities		3,176			3,953
Net change in other operating assets		(2,728	)		238
Total adjustments		26,455			25,590
Net cash flow provided by operating activities		25,256			48,975
Cash flow from investing activities:
Real estate acquired, net of liabilities and cash assumed		(216,198	)		(102,095	)
Real estate improvements to operating real estate		(18,465	)		(17,572	)
Proceeds from disposition of real estate		—			563
Net cash flow used for investing activities		(234,663	)		(119,104	)
Cash flow from financing activities:
Repayment of mortgage debt

SEC Form 10-Q filed by Curbline Properties Corp.