Michael Haines

Thanks, Stuart. For the three months ended June 30, 2024, the company had $83 million in total revenues and $28 million in operating income. For the first six months of 2024, the company had $169 million in total revenues and $58 million in operating income. On a same-center cash basis, net operating income for the second quarter of 2024 increased by 1.7% and increased by 3.7% for the first six months. The 3.7% increase for the first half of the year is above our same center NOI guidance range for the full year of 1% to 2%.
However, as we discussed on our last call, given the ongoing anchor space releasing activity, there will be some downtime between leases, which is reflected in our guidance. GAAP net income attributable to common shareholders sold at $7.4 million for the second quarter of 2024, equating to $0.06 per diluted share and for the first six months of 2024, GAAP net income was $18.4 million, or $0.14 per diluted share. Funds from operations for the second quarter of 2024 totaled $34.1 million, equating to $0.25 per diluted share, and for the first six months of 2024, FFO totaled $72.1 million, or $0.54 per diluted share.
Turning to our balance sheet, during the second quarter, we retired in full a $26 million mortgage. As a result, we currently only have one mortgage loan remaining for $34 million, meaning that 94 of our 95 shopping centers are unencumbered, equating to about 99% of our total portfolio GLA. The last remaining mortgage matures in 15 months from now.
With respect to the $250 million of senior notes that mature in December, our objective is to refinance the bonds through a long-term public bond offering, preferably a 10-year deal. Depending on how interest rates in the bond market evolves during the second half of the year, we may also look to refinance, possibly at the same time our $200 million term loan. Assuming we do, then looking ahead, other than the $34 million mortgage, we would have no debt maturing for the next two-plus years.
Now I'll turn the call over to Rich Schobel, our COO, to discuss property operations. Rich?

Richard Schoebel

Thanks, Mike. As Stuart highlighted, demand for space across our portfolio is strong coming from both existing and prospective tenants. In terms of prospective tenants, there's no shortage of demand coming from a broad range of destination tenants, especially new children enrichment concepts, most notably academic, robotics, and exercise themed concepts.
Additionally, mainstay destination tenants in the fitness, self care, and wellness sectors continue to expand along with restaurants, including traditional restaurants as well as new digital kitchen-only concepts. There are two common themes amongst these diverse tenants.
First, they are strategically seeking to expand only in select very specific markets on the west coast, markets where we have a strong established presence. And second, they are seeking to lease space in necessity centric shopping centers that are well situated and highly protected mature communities, which again is exactly what our portfolio offers. From our perspective, these diverse destination tenants serve as a natural value add complement to the grocery-anchored, daily necessity-focused of our portfolio and business.
As Stuart commented, we continue to make the most of the demand. During the second quarter, we leased 393,000 square feet, which is the second most active second quarter on record for the company. Breaking the 393,000 square feet down, we signed 40 new leases totaling 117,000 square feet, achieving a 12% increase in same space base rent as Stuart highlighted.
Additionally, we renewed 276,000 square feet of valued tenants, achieving a 6% increase in base rent. Notwithstanding the bulk of the renewals being tenants that exercised longstanding fixed renewal options, many of which did so early. In step with our second-quarter strong leasing activity, our portfolio lease rate increased to 97% as of June 30. Breaking that down between shop and anchor space, our shop space was 96% leased, and our anchor space was 98% leased.
In terms of getting new tenants open, we had another successful active quarter. Specifically, tenants representing upwards $2 million of incremental annual base rent on a cash basis open their businesses and commenced paying rent during the second quarter. Additionally, in step with our strong leasing activity, new leases signed during the second quarter added over $2.5 million of incremental annual base rent, bringing our total incremental rent from new leases that haven't commenced yet to approximately $7.3 million as of June 30.
Lastly, at June 30, we had 17 anchor leases scheduled to mature next year in 2025. Two of the 17 have already renewed here just recently. As to the other 15, based on tenant discussions to date, we currently expect that at least 13 of the 15 anchors will renew, and possibly all 15 could, which again speaks to the strength of our portfolio and the strength of our anchor tenant base.
Now I'll turn the call back over to Stuart.

Stuart Tanz

Thanks, Rich. Based on our solid portfolio performance during the first half of the year together with what we see on the horizon with our core portfolio in the second half of the year, we have raised the lower end of our initial FFO guidance. In terms of the higher end of our initial guidance, which was largely based on growing our portfolio back at the start of the year, there was increasing activity in the acquisition market driven in part by the market's expectation that interest rates would be cut soon.
Based on the momentum that was building, we expected that 2024 would potentially prove to be another productive year on the acquisition front, and we set our initial guidance accordingly. However, as the year has progressed, debt financing costs have not come down and seller expectations in terms of pricing and cap rates have not moved. As a result, the market has been largely idle.
Additionally, the uncertain economy continues to weigh on the acquisition market, making it unclear as we sit here today when the market could pick back up again and become more favorable. In light of these factors, we are now assuming no additional acquisition activity in terms of our guidance for the second half of the year.
Accordingly, we have lowered the high end of our initial FFO guidance. With respect to dispositions, we do have a couple of properties that we may move forward with selling during the second half of the year, but only totaling around $25 million assuming both properties were to be sold. While the acquisition market remains muted, we continue to focus on growth opportunities within our core portfolio, expanding on Rich's remarks regarding upcoming anchor maturities.
Going forward, over the next several years, a growing number of our maturing longstanding anchor tenants do not have any remaining renewal options to exercise. Given that many of these anchor leases were originated a long time ago, some by as much as 20 to 30 years ago, these anchor leases are significantly below market today. Safe to say we intend to make the most of these releasing opportunities over time, capitalizing on the long term strength and appeal of our grocery anchored, necessity based portfolio and our sought after highly protected markets.
Now we will open up the call for your questions. Operator?

Question and Answer Session

Operator

(Operator instructions) Dori Kesten, Wells Fargo Securities.

Dori Kesten

The deceleration in same-store NOI growth that's implied for the second half of the year, is that evenly spread among Q3 or Q4? Is there anything you'd want to point out as maybe differentiated by quarter?

Stuart Tanz

Well, the same-store, 1.7% for the -- for the second quarter, is --

Dori Kesten

No, for second half of the year.

Stuart Tanz

Second half of the year. Yeah, we're keeping the same-store guidance of 1% to 2% because the back half, we're expecting it to be not as strong as first half obviously because just the way the numbers work comparing this year to last year's results.

Dori Kesten

Okay. And then I think on the updated list of dispositions out of Albertson, Kroger, you guys have a number of. Number of stores potentially to be operated by pricing; can you give us an updated view of the situation from your perspective? And does the new team there, or I guess potentially there ease your operating concerns?

Stuart Tanz

Yeah, I mean, from a lease perspective, we have 32 leases in total, that have with Kroger and Albertsons. Only eight are being sold right now to C&S, six of which are in Oregon, and two are in Washington. None of the 18 leases that we have with Kroger and Albertsons in California are being sold to C&S.
And in terms of the transaction, we continue to communicate with both Kroger and Albertsons and conduct business as usual, including renewing one of their leases in the second quarter. However, because they're still waiting to see if the merger goes through, they're not in a position to discuss the merger, and we haven't spoken to C&S.

Operator

Todd Thomas, KeyBanc Capital Markets.

Todd Thomas

A couple of questions, I guess. First, Stuart, your comments about lower level of net investment activity going forward, we're now talking about rate cuts again later in the year and into 2025. So is it more about timing, just given the uncertainty around rate cuts and what was sort of previously anticipated and that investment activity is delayed, or are sellers just unwilling to transact the current prices? And can you talk a little bit about sort of where that bid ask spread is today?

Stuart Tanz

Sure. Well, I mean, yes, it's timing as it relates to interest rates. And I think, as I said in my comments, sellers are still reluctant to, given the interest rate environment and the fact that the market is somewhat idle, sellers are still reluctant to bring their properties to market going forward. And looking into '25, assuming that interest rates, we do see some movement in interest rates, we do anticipate hopefully that the acquisition market will pick up a bit more.
But as we said in the comments, at the start of the year, we anticipated more activity. And when interest rates didn't come down, that certainly came to a halt very quickly. So sellers are still on the sidelines right now and we'll see how things move on the second half of the year.

Todd Thomas

Okay. And Mike, can you discuss the impact to guidance from the lower levels of net investment activity and the capital raising, the equity issuance, which, which you're now not assuming, relative to your prior expectations, what did that amount to, with the updated guidance?

Michael Haines

Yes. I think in our last call we talked about how for every $100 million, the net of investment activity, it added about a penny of FFO, which is why we, since we're removing all acquisition activity going forward for the balance of the year, that's why we pulled down the high end of the guidance.

Todd Thomas

Okay and then just shifting over to the operational side. So I'm just curious, there's been a little bit of an increase in some tenant credit concerns. You took down your bad debt expense slightly at the midpoint. Can you talk a little bit about the health of the tenant base today versus three months ago? And are some of these bankruptcies or announced store closure announcements, are there any changes to the sort of outlook, the forward outlook, just based on some of these announcements that we've seen more recently?

Michael Haines

The tenant base continues to perform well. Todd, receivables are consistent with historic averages. You know, I think we've been very fortunate. A lot of the names, tenant names you've heard in the news, we have very little exposure to. And where we've had exposure, either leases have been accepted or I purchased through the bankruptcy process, or, the tenants have come out of bankruptcy and kept the leases. So there's been very little impact from the tenants in the news.

Todd Thomas

Okay, got it. Any update on the Kohl's Backfill at Fallbrook? I think there was potential for rent to commence either very late this year or early '25 to the extent that you were able to get a lease signed. Is there any update around the progress there?

Michael Haines

Sure. Yes. I think at this point during the second quarter, we signed leases totaling about 45,000 available anchor space. That leaves a pending 134,000 square feet remaining. We currently have assigned LOI in the largest space, the coal space you're referring to, which is 115,000 square feet. We continue to work to finalize the lease with the prospective tenant, who's a long-term national tenant of ours, and the remaining 19,000 square feet we are contemplating right now splitting the space into two, and we're in discussions with two prospective tenants on that space.

Operator

Craig Mailman, Citi.

Craig Mailman

Just want to follow up on the anchor leasing opportunity. Stuart, I know you've been excited to finally start to get bigger chunks of these back without extension options here. Can you just give us a sense at least in your early talks or analysis here? I know it's hard to get exactly where you think rent spreads could be, but some type of viewpoint to maybe where OCR's on some of these are and what that could indicate, at least in terms of what you think rents could go on some of these renewals?

Stuart Tanz

Sure. And you want that broken down anchor versus non-anchor or just around the anchor?

Craig Mailman

Just around the anchor. Because that, I mean, both too. I mean, I'm just trying to get a sense you guys are impacted a little bit this year on the same-store side by some timing issues around commencements on sign leases as we're looking into next year. Feels like you have an opportunity to maybe get some premium spreads on what's leasing, and then you get the benefit of the commencement of some of these leases. So just trying to get a sense as we look into '25 for all the strips where growth could reaccelerate a little bit without trying to get guidance out of you, but just sort of the pieces to maybe build up to what kind of same-store could look like next year?

Stuart Tanz

Sure. Well, currently, in terms of what we have left with the anchor vacancies, the mark-to-market on the leases that we currently are working on are quite large because the starting rents on these leases were in the mid single digits. So assuming that these leases do get executed, which we are anticipating over the next 30 days, the mark-to-market is extremely strong. Going forward on anchor spaces, as you look at what rich articulated over the next year, looking into '25 again, a number of these leases are well below market, but on a blended basis, I would tell you that trend is probably going to be higher as we move into '25 on the anchor side.
In-line space will vary depending on what is expiring and wherever. But in general, I'm anticipating that trend to also move higher as we get through the balance of this year and into '25. As Rich articulated the strength, the underlying strength and demand that we're seeing on the ground on the west coast continues to be extremely strong. So as we look to the balance of the year and into '25, we're expecting pretty strong growth on both sides of that equation.

Craig Mailman

So, I mean, if you guys did blended spreads of about 7% so far this year, could that blend up into the low teens next year on maybe 10% of your total GLA? Is that sort of a decent way to think about it, then, as the drag burns off this year, which Mike, I don't know if you want to give a sense of what the 1% to 2% savings would have been or what the drag on that is by the, the commencement timing. I mean, are we talking about same-store, potentially above 4% next year, assuming everything hits? Or are there other kind of puts and takes that we should think about as we're looking into '25?

Stuart Tanz

Yes. Again, we're anticipating that those spreads will continue to move higher in terms of same-store that will -- the benefit of what we're now leasing or have leased this year really comes into focus. Mike, I'd say mid '25. So you'll get some benefit next year from what we're doing now from the same-store perspective.
The real punch, though, will come in '26, obviously. Cause you're going to get a full year of a run rate in terms of the NOI. But same-store in '25 should be stronger than '24, given the fact that, given the fact that these spaces that we're finally leasing, that did come pretty quickly after these anchors vacated, that real benefit hits late next year and certainly into '26.
At this point, we're anticipating same-store moving back up to the 3% to 4% range next year, maybe a bit higher, depending on how fast we can get these tenants open.

Craig Mailman

One last one for Mike on the debt refinances. Where do you think spreads are today? On a term-loan and an unsecured debt and then also, as we think about the swaps that mature in August, should we just assume kind of back half of the year, about 150, you revert back to kind of the mid-60s, where the term-loan is just from a modeling perspective?

Stuart Tanz

Well, first of all, on the swap side, our goal is to refinance the term loan, possibly at the same time we refinanced the December bond. So we're not intending to replace the swaps.
So when those revert to floating rate on the term-loan, you're going to be in the lowest, like say 63%, 64%. But looking at where the ten years today and with the credit spreads for us, we probably price a deal around six. So you're going to get some pickup there.
So we're just kind of keeping an eye on the overall market to refinance, obviously the '24 bonds and the term-loan potentially at the same time, and bring that down to about high 5% to 6% range. And if we do finance that, if I'm correct, Mike, we then have nothing due on our balance sheet for several years.

Michael Haines

Correct.

Stuart Tanz

Just that one mortgage next year, which is not meaningful.

Operator

Juan Sanabria, BMO Capital Markets.

Juan Sanabria

Just following up on the line of questioning from earlier, any color you can give on one of the big lot stores, I think, in Lacey, that was the closure list. Any potential term fees that you'd expect or any insights on to when that may close and potential backfills?

Stuart Tanz

Sure. Yes, as we only have one big lots in the portfolio. And, as of now, we've not heard officially from big lots directly, but we do understand that the location we have up in Lacey, Washington is a potential closure. That center has been 100% leased for the past seven years, and we already have offers on the space and the rent is substantially below market. So between any termination fee and the uptick in the rent, we don't see this as a big risk.

Juan Sanabria

And how much term is left on that. Just to get a sense of the quantum of the potential term fee?

Stuart Tanz

There's about -- they just exercised an option, I think, about a year ago. So I think there's about four years remaining. The store has just been renovated. It's in good shape. We expect we can turn this over with limited TI dollars and very little downtime.

Juan Sanabria

Okay, great. And then just on the restaurants, just in general, with the increase in minimum wage in California, I guess, what are you seeing broadly with regards to demand or health of the tenants? I mean, there was some news about a potential bankruptcy on MOD pizza that subsequently was bought after that kind of news broke. So just curious on what you're hearing from tenants and particularly just the health with higher costs running through their income statements?

Stuart Tanz

Sure. I mean, clearly it's something that the tenant base brings up, but, they'll use any angle to negotiate on. Right. So it definitely comes up. Obviously, MOD pizza highlighted that, we only have six mod pizzas in our portfolio that account for less than 0.3% of our total base rent. They're all very modern spaces, as you said. It looks like that one's going to get resolved.
But, from our perspective, the prices have to go up in order to cover this. But it's really not having a huge impact on the rent because, our properties are highly leased in very dense markets, that people buying for restaurant spaces, we normally would have multiple LOI's on anything that came available.

Operator

Jeffrey Spector, Bank of America Securities.

Andrew Rios

You got Andrew Rios on for Jeff this morning. Just one, last quarter, I believe you had $68 million of dispositions under agreement. In July, you sold the one property for $57 million. Is that $11 million delta still under agreement to be disposed or something changed there?

Stuart Tanz

Yes. We still have a couple of assets under contract. We do expect potentially one to close in August, the month we're in. as of yesterday. But the answer is yes. We do still have a couple of dispositions on tap, and we expect at least one may be both to close certainly by year-end, about another $25 million of proceeds, which we'll use just to pay down debt on the balance sheet with.

Andrew Rios

Okay. And was that July disposition still at a low 6 cap rate?

Stuart Tanz

The one that we just sold?

Andrew Rios

Yes.

Stuart Tanz

Yes, low 6s, Jeff.

Operator

Wesley Golladay, Baird.

Wesley Golladay

Just following up on that last question. Can you tell us what asset was sold?

Stuart Tanz

The asset with that was sold. The center that we sold was located here in the San Diego market. And again, the exit cap rate was in the low 6s. It was an ocean side.

Wesley Golladay

Okay. Okay. That helps. Going back to the eight potential C&S properties, do you have any rights as a landlord maybe if a termination fee or -- can you elaborate on that?

Stuart Tanz

Sure. Yes, we do have a number of leases that we do have the right to terminate if this transaction were to go through. We're currently in discussions with Kroger and Albertsons in terms of what we may want to do with these leases. And currently, those discussions continue to take place, and we are making some headway in terms of where, what we might do with these leases long term. The good news is A number of these leases are in the best properties that we own, very high-quality assets and the rents are quite low, but the situation is still very fluid. So we'll continue to monitor things and sort of go from there in terms of where all this might end up.

Wesley Golladay

Okay. And then hopefully, the multifamily industry continues to bottom out here and hopefully goes upward. I'm just curious if you can give us an update if you've seen any more interest in your potential outparcel sales. And then more specifically, is there an update at the Crossroads? I believe they were contemplating an expansion, but I'm not sure where that went?

Stuart Tanz

Yes. I mean at the Crossroads, we continue to -- in terms of the Crossroads, we've completed all the work in terms of pulling the construction permits. However, we're waiting to do so until the market conditions get a bit more favorable. In light of our discussions, the city who is a big supporter of the project granted us a two-year window for pulling the permits. In addition, the city has been proactively engaged about increasing the development density at the Crossroads by a lot, specifically for additional multifamily in the future, and they're keenly interested in the Crossroads given the center's prime location within the city of Bellevue. But what's really happened at the Crossroads in terms of densification over the last couple of months.
As we look forward in the next 5 to 10 years is going to really create a lot of value long term as it relates to the fact that the property is going to be designated subject to City Council approval, a high density now for the whole property. So we're very excited about that in terms of what's happened there over the last several months.

Wesley Golladay

Got it. And then you did make the point about the anchor leases having no renewals and big mark-to-markets there. Just curious if you're going to also get better terms on reimbursements?

Richard Schoebel

Yes. I mean we look at the entire lease when we have the opportunity to plug any leakage as it relates to the triple nets to address any restrictions or co-tenancies that may be in those leases, we look at the lease wholesale when we have the opportunity, absolutely. .

Operator

Hongliang Zhang, JPMorgan.

Hongliang Zhang

I guess, I have a question on the digital kitchens that you mentioned on the call. Do you have any studies or any data around the possibility of those customers cross shopping in your -- in the other stores in your shopping centers?

Richard Schoebel

No specific data about cross shopping that I can give you on this call. But these digital kitchens are not just commissary kitchens. These really are just mostly to go type people are ordering on the app and coming to pick them up. Obviously, they also do DoorDash and all the other delivery services. But it is bringing customers to the shopping centers when they're picking up their orders. And we expect that someone will pick up their groceries at the same time that they're picking up their dinner.

Operator

(Operator instructions) Linda Tsai, Jeffries.

Linda Tsai

Just a follow-up to some of the other questions. So for the signed LOI for Kohl's, the 115,000 square feet and then I know you're working on the remaining space, which you would split. What's the earliest rent could commence based on the info you have today?

Stuart Tanz

Well, right now, it's an extensive -- a pretty extensive TI package which is why it's taken a touch longer to get to the executed lease, but we want to make sure we cross all the eyes and teas as it relates to the construction. We're anticipating if the lease gets executed in the next 30 days that we're about, I would tell you, late next year 4Q of '26 is it looks like the rent would commence. Sorry, of '25, not '26.

Linda Tsai

Got it. And then for the Big Lots and Lacey, what would be a good potential backfill? And then is a lease term fee incorporated in your current guidance?

Stuart Tanz

I didn't get that.

Michael Haines

Can you repeat the first part of the question?

Linda Tsai

Sure. Just like a good potential backfill for that big lots and then do you have a lease term fee in your guidance?

Michael Haines

No, we don't have the termination fee in our guidance, no. No, no.

Stuart Tanz

No termination fee. And again, as Rich said, we haven't had a formal rejection of the lease either. So .

Richard Schoebel

But yes, the minute that hit the news, our leasing team went to work. So when they were excited to hear that potential to get it back as they've already received good interest on the space, long ahead of anyone talking about us getting the space back, right.

Michael Haines

And I think our bad debt guidance range would cover that kind of downtime anyway. .

Linda Tsai

Got it. And then Rite Aid announced more closures last month. Could you just give us an update on anything that might be impacting your portfolio?

Stuart Tanz

Sure. Yes, no impact in terms of the closings. Our Rite Aids continue to operate. Sales continued to gain some traction coming out of bankruptcy. And we're hopeful that we should hear any day that things are done. But right now, no update in terms of our Rite Aid as it relates to where we were last quarter. The only other thing to talk about is Kroger has. We're getting close to signing the very small Rite Aid we got back.
And Kroger is the one who's taking that space, and we're very excited about -- the fact that Kroger has stepped up to, again, continue to build on this location. But more importantly, the downtime in rent no TIs in the downtime and rent will be very short, given the fact that Kroger is just expanding next to their current store.

Linda Tsai

And then just one last one on Walgreens announcing potential store closures, any news or impact to your portfolio?

Stuart Tanz

Yes. I mean, we have very little exposure to Walgreens. In fact, the center we just sold had one of our Walgreens in it. So that's come out of our portfolio over the last quarter. But Rich?

Richard Schoebel

We have four Walgreens in the portfolio, Stuart at the end of the quarter, as Stuart touched on, we sold one of those locations. Another one is location had been previously sublet by Walgreens to Dollar Tree. We're anticipating doing a direct lease with Dollar Tree on that location, which will leave us with two Walgreens up in the Pacific Northwest. .

Operator

Paulina Rojas Schmidt, Green Street.

Paulina Rojas-Schmidt

As for you. So we're owning the same boat here. And my question is I'm looking at your disclosure on new leases for anchor space. I know you only signed a few leases, it's not representative really of your portfolio. But I'm still intrigued by the low ABR per square foot around $10. So can you provide some color on the space market, location or type of tenant -- to better understand the lower -- certainly lower than average in place rent here.

Richard Schoebel

Well, are you referring to the anchor renewals during the quarter?

Paulina Rojas-Schmidt

Both really because let me see if I have them in front of me. If I remember well, both, yeah, the one new lease anchor space has an initial rent of $10 per square foot. And for renewals, it's also around $10, $11 per square foot. So what type of tenants are paying such low rent today?

Richard Schoebel

Well, as it relates to the anchor renewals, in many cases, the anchor tenants are exercising options. And in some cases, those options are flat. And in some cases, those leases were initially structured as ground leases where the anchor tenant actually built the space, which gave them the very low rent. And that's the rent we underwrote when we bought the property.
And so there is some drag on the renewals as it relates to options that may already be in place that are below market for what we could get to the space, and we could actually get it back. And then in terms of new leasing, I mean, it really just depends on the whole package of what the deal structures, whether how much TI we're putting into it, how much the tenant is able to pay.
But on average, we're getting more than what we were previously for the spaces. The anchor space is, if you were to look at them in total throughout the portfolio are below market on average.

Paulina Rojas-Schmidt

Okay. And then big picture, how would you compare demand or the market rent that you have observed in market rent growth that you have observed in the last few years for anchor and shop space. Is it fair to say that the strength of market rent growth has been more strongest for shop space?

Stuart Tanz

Well, yes, typically shop space is going to be -- you're going to capture a lot of that higher rent just because a lot more leases. And if you have more leases that are expiring without any options, and you can capture that space that rent increased quite quickly. I don't know if you want to add anything to that, Rich? .

Richard Schoebel

No, I don't think so.

Paulina Rojas-Schmidt

And a follow-up about the rights that you mentioned or consent for the divestiture of some leases, some uncured leases. And how does that work? So how does it apply to, for example, subleases you also have, in those cases, the right to reject further subleasing the space?

Stuart Tanz

Yes. I mean I think as I articulated a number of these leases are very old leases. So when an anchor tenant goes into a transaction. The one of the -- depending on the lease, of course, it gives the landlord the ability to recapture the space if the net worth of that tenant doesn't meet a certain threshold or we have the right to recapture the space. If a merger is done, if there's a big transaction done.
There's different variables. But correct me if I'm wrong, I don't think any of the identified are actually sublet. They're actually being operated by Albertsons and Kroger, right? .

Michael Haines

Correct. Correct. None have been sublet. .

Stuart Tanz

No, no, no. Nothing has been sublet. They're either operated by Kroger or Kroger and the balance are Albertsons sell.

Michael Haines

Direct leases.

Stuart Tanz

Right. So again, every circumstance, never lease is going to be different. And we're in the midst now of having a conversation around around the ability to either amend the lease or maybe do more than just that. So again, the situation is still very fluid. So this could be a lot conversation if the transaction on August 26 gets voted down by the appellate court. So I think we'll have more clarity next quarter as it relates to what's going on on these leases. But the good news is, not a lot of leases from our perspective when you look at the total amount of exposure .

Paulina Rojas-Schmidt

And then last one, so California in general, used to command lower cap rates, a premium market. Do you think that's still the case today?

Stuart Tanz

Yes. When I look at capital and where capital wants to be in terms of the product that we own and operate, again, dominant grocery drug-anchored assets and very affluent dense markets, Demand from that capital is as strong in California or the whole West Coast as it is anywhere else in the country. And in some cases, even stronger depending on the circumstances of the real estate and the attributes of the real estate. So yes, California is still on a lot of people's radar screen.

Paulina Rojas-Schmidt

And if you compare your markets with perhaps Austin or some Florida markets that are very hot today. How do you think the cap rate compares there for similar products?

Stuart Tanz

Well, I'm not as familiar as Austin or Florida as I am with the West Coast. I've certainly tracked those markets. But I would tell you that cap rates historically have been lower on the West Coast. And I believe as we continue to see some transactions in the market, we're certainly seeing as much demand in cap rates that are as low on the West Coast as they are anywhere else.

Operator

Thank you. This does conclude today's Q&A session. And I would now like to turn the call back over to Stuart for closing remarks. Please go ahead.

Stuart Tanz

In closing, thanks to all of you for joining us today. As always, we appreciate your interest in ROIC. If you have any additional questions, please contact Lauren, Mike, Rich, or me directly. Also, you can find additional information in the company's quarterly supplemental package, which is posted on our website as well as our 10-Q. Thanks again, and have a great day, everyone.

Operator

Thank you, everyone, for joining. You may now disconnect.