[stock_market_widget type=”card” template=”basic2″ assets=”CTO” realtime=”true” api=”yahoo-finance”]
Shopping centers do not usually make for exciting reading, yet the companies that own and run them can tell an interesting story. These businesses buy retail space, lease it to tenants, and sell off properties that no longer fit their plans. One example worth understanding is CTO Realty Growth, Inc. (NYSE: CTO), a real estate investment trust based in Winter Park, Florida, that owns and operates open air shopping centers concentrated in higher growth parts of the Southeast and Southwest United States.
CTO Realty Growth’s core business is straightforward. It buys shopping centers anchored by grocery stores, home goods retailers, and other tenants that draw regular foot traffic, then collects rent over long lease terms. What sets the company apart from a typical landlord is that it also manages, and holds a stake in, a separate publicly traded company called Alpine Income Property Trust, Inc. (NYSE: PINE). That relationship gives CTO an extra source of income beyond rent, including management fees and dividend payments.
The company also uses a strategy known in real estate circles as capital recycling. In practice this means selling properties once their value has been maximized and using the proceeds, along with money raised through stock sales or preferred equity deals, to fund new investments. It keeps the portfolio active rather than simply holding onto real estate indefinitely, an approach that shaped much of the second quarter of 2026.
For the three months ended June 30, 2026, CTO Realty Growth reported net income attributable to common stockholders of $0.38 per diluted share. Two other measures common in the REIT industry, Core Funds from Operations and Adjusted Funds from Operations, came in at $0.53 and $0.55 per diluted share respectively. These figures matter because net income can be distorted by depreciation, so investors in this sector often look to funds from operations for a clearer picture of cash generated.
The quarter’s activity centered on a handful of transactions. CTO closed $153 million in investments during the period at a weighted average initial yield of 10.2%. The largest single deal was the $53.3 million purchase of Gallery on the Parkway, a 152,000 square foot retail center in Dallas, Texas anchored by Dick’s House of Sport. The company also placed $75.0 million into preferred equity tied to a Southwest retail property at a 12.0% initial cash yield and put $21.4 million into a Whole Foods anchored development in the Northeast on similar terms. On the leasing side, CTO signed 184,000 square feet of comparable retail leases at a positive cash rent spread of 6%, meaning new rents came in above what previous tenants had paid.
CTO balanced that buying activity with $90.7 million of property sales at a weighted average exit cap rate of 6.7%, and it has a deal under contract to sell Charlotte, North Carolina space previously leased to Value City Furniture and Jo-Ann Fabrics. Income tied to its stake in Alpine Income Property Trust reached $2.1 million for the quarter, made up of management fees and dividend income, and management expects that figure to run near $8.9 million annually going forward.
To help fund this activity, CTO issued just over 4.18 million common shares through its stock sale program, bringing in $83.6 million in net proceeds at an average price of $20.29 per share. John P. Albright, the company’s President and Chief Executive Officer, pointed to the pace of capital deployment and the quality of the Dallas acquisition as evidence that the company’s disciplined approach to buying and financing retail centers in its core markets is working.
Following the quarter, CTO Realty Growth raised its full year investment guidance to a range of $300 million to $400 million and increased its 2026 Core FFO per diluted share guidance to between $2.09 and $2.13. Both changes suggest management expects the deal activity from the first half of the year to continue. Whether that pace holds through the rest of 2026 will depend on how much retail property remains available at attractive yields, and on how its stake in Alpine Income Property Trust continues to perform.
