Risks Related to Tenant Operations at Our Properties Conditions that adversely affect the general retail environment could materially and adversely affect us. Our primary source of revenue is derived from retail tenants which means that we could be materially and adversely affected by conditions that materially and adversely affect the retail environment generally, including, without limitation: • macroeconomic and geopolitical conditions, including implemented and threatened tariffs, retaliatory tariffs and trade disputes, energy prices, market dynamics, rising or elevated interest rates, inflation, government policies and regulations, and growth levels of consumer income, consumer perception of such conditions, and the impact on such conditions from global events such as a foreign debt crisis, foreign currency volatility, natural disasters, war, such as the war in Ukraine and the conflict in Israel, Gaza and the surrounding areas, epidemics and pandemics, the fear of spread of contagious disease, civil unrest and terrorism; • levels of consumer spending, changes in consumer preferences, income levels, and fluctuations in seasonal spending in the United States and internationally; • supply chain disruptions and labor shortages; • consumers avoiding in-person shopping generally, or at certain properties, due to a heightened level of concern for safety in public places, whether due to consumer perception of increased risk of criminal activity and civil unrest, including acts of terrorism, riots, random acts of violence, mass shootings, organized retail crime or inappropriate or unacceptable behavior of other patrons, or due to heightened sensitivity to risks associated with transmission of disease; • consumer perceptions of the safety, convenience and attractiveness of our properties; • the impact on our retail tenants and demand for retail space at our properties from the increasing use of the Internet by retailers and consumers; • the creditworthiness of our retail tenants and the availability of new creditworthy tenants and the related impact on our occupancy levels and lease income; • local real estate conditions, such as an oversupply of, or reduction in demand for, retail space or retail goods, decreases in rental rates and declines in real estate values; • the willingness of retailers to lease space in our properties at attractive rents, or at all; • changes in regional and local economies, which may be affected by increased rates of unemployment, increased foreclosures, higher taxes, decreased tourism, industry slowdowns, adverse weather conditions, and other factors; • increased operating costs and capital expenditures, whether from acquisitions, developments, redevelopments, replacing tenants or otherwise; • reductions in international travel and tourism, resulting in fewer international retail consumers; • changes in government policies and applicable laws and regulations, including tax, environmental, safety and zoning and political inefficiencies; and • epidemics, pandemics or other public health crises and the governmental reaction thereto. To the extent that any or a portion of these conditions occur, they are likely to impact the retail industry, our retail tenants, the emergence of new tenants, our own investments in certain retailers and brands, the demand for retail space, market rents and rent growth, the vacancy levels at our properties, and the value of our properties, any of which could directly or indirectly materially and adversely affect our financial condition, operating results and overall asset value. Additionally, a portion of our lease income is derived from overage rents based on reported sales over a stated base amount that directly depend on the reported sales volume of our retail tenants. Accordingly, declines in our tenants’ reported sales performance could reduce the income produced by our properties. Over time, declines in our tenants’ reported sales performance can also negatively impact our ability to sign new and renewal leases at desired rents.
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