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260129 Radiant Meeting

Portfolio Overview:

Overall revenue was close to budget but varied significantly by property.

Most properties overspent on expenses, cutting into profits.

Net Operating Income (NOI) fell short of budget for most locations, driven by both revenue shortfalls and expense overruns.

Top Performers:

Orange saw a major boost in income from unexpected miscellaneous revenue, more than doubling its budgeted NOI.

Nederland and Tuscaloosa exceeded NOI targets due to strong rental performance and controlled expenses.

Underperformers:

Groves had the worst NOI shortfall (down 75%) due to major bad debt and low income.

Bridge City, Central City, Quinn, and Montgomery all missed NOI targets by 25–55%.

Common issues included revenue underperformance and higher-than-budgeted maintenance, utilities, and admin costs.

Key Takeaways:

Bad debt (uncollected rent) was a major issue in several locations.

Expenses exceeded budget in every property, especially in maintenance and utilities.

Revenue performance varied, but properties with strong ancillary income or high occupancy outperformed.

YTD 2025 Financial Performance Analysis for Radiant Stores Properties

Summary Table: YTD Actuals vs 2025 Budget

Below is a summary of year-to-date (YTD) performance (January–December 2025) for each Radiant Stores property, comparing Actual results to the 2025 Budget for Revenue, Expenses, and Net Operating Income (NOI). Variances are shown in dollar terms and as a percentage of the budget (Actual minus Budget, and Actual as a % of Budget). Shortfalls (unfavorable variances) are indicated by negative variances for Revenue/NOI or positive variances for Expenses. All figures are in US dollars.

Table 20

Table 20

Property

Revenue (Actual)

Revenue (Budget)

Revenue Var ($)

Revenue Var (%)

Expenses (Actual)

Expenses (Budget)

Expenses Var ($)

Expenses Var (%)

NOI (Actual)

NOI (Budget)

NOI Var ($)

NOI Var (%)

Bridge City

$271,202

$311,934

-$40,732

-13.1%

$131,724

$109,885

$21,839

19.9%

$139,478

$202,049

-$62,571

-30.9%

Central City

$143,139

$175,429

-$32,289

-18.4%

$95,193

$88,223

$6,970

7.9%

$47,947

$87,206

-$39,259

-45%

Groves

$250,147

$364,354

-$114,207

-31.4%

$211,481

$210,738

$743

0.4%

$38,666

$153,616

-$114,949

-74.8%

Montgomery

$278,128

$288,121

-$9,993

-3.5%

$159,368

$131,175

$28,193

21.5%

$118,760

$156,947

-$38,186

-24.3%

Nederland

$231,882

$207,591

$24,291

11.7%

$133,472

$128,743

$4,729

3.7%

$98,410

$78,848

$19,562

24.8%

Norwich

$654,598

$638,941

$15,657

2.5%

$252,385

$218,932

$33,453

15.3%

$401,663

$420,009

-$18,345

-4.4%

Orange

$452,207

$253,915

$198,293

78.1%

$138,748

$108,213

$30,535

28.2%

$313,459

$145,702

$167,758

115.1%

Quinn

$129,789

$165,769

-$35,980

-21.7%

$89,190

$75,214

$13,975

18.6%

$40,599

$90,554

-$49,956

-55.2%

Tuscaloosa

$423,586

$395,642

$27,944

7.1%

$173,824

$160,051

$13,773

8.6%

$249,762

$235,591

$14,171

There are no rows in this table

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All values are YTD totals. Variance ($) = Actual – Budget. Variance (%) shows Actual as a percentage of Budget (100% plus/minus variance).

Unfavorable Variance Highlights by Property

Below we highlight each property’s budget shortfalls (unfavorable variances in Revenue, Expense, and NOI), along with notable factors contributing to underperformance or outperformance:

Bridge City: Revenue fell short of budget by about $40.7K (13% under). Expenses were $21.8K (~20%) over budget, driving NOI down to $139.5K, which is $62.6K (31%) below the 2025 target. Lower rental income (occupancy issues) and unplanned maintenance costs (e.g. ~$11.6K maintenance overrun and a $15K one-time expense) contributed to this shortfall.

Central City: Revenue came in $32.3K under budget (18% short), reflecting weaker occupancy or pricing than anticipated. Expenses were kept relatively close to plan (about $7K or 8% over budget). Consequently, NOI of $47.9K was $39.3K (45%) below budget, primarily due to the revenue shortfall.

Groves: This location underperformed significantly. Revenue was $114.2K below budget (31% under) – the largest revenue shortfall of all properties – largely due to lower rentals and a substantial bad-debt write-off of ~$41.6K (uncollected rent). Expenses were on target (virtually at budget), but the lack of income meant NOI totaled only $38.7K for the year, missing the budget by $114.9K (a 75% shortfall).

Montgomery: Achieved near-budget revenue (just $10K or 3.5% under) – solid rental income helped offset weaker ancillary income. However, Expenses ran high at $159.4K, exceeding budget by $28.2K (21.5% over). Notably, repair and maintenance costs were ~$17.6K over plan. As a result, NOI of $118.8K was $38.2K (24%) below the budgeted $156.9K.

Nederland: This property outperformed on the top line – Revenue was $231.9K vs $207.6K budget, about $24.3K (12%) above plan. A strong rental uptake (even after writing off ~$22.6K in bad debt) drove the revenue beat. Expenses were $4.7K (3.7%) over budget, including higher marketing and administrative costs, but the modest overspend was offset by a property tax savings. NOI came in at $98.4K, beating the budget of $78.8K by $19.6K (+24.8%) – a favorable result.

Norwich: Revenue slightly exceeded budget (+$15.7K, ~2.4% above), reflecting steady occupancy and ancillary income close to expectations. However, Expenses were high at $252.4K, about $33.5K (15% over budget). Utility costs, for example, were ~28% over plan, and other operating expenses (repairs, etc.) also ran above budget. This eroded profits, and NOI ended at $401.7K, roughly $18.3K (4.4%) below the $420K target.

Orange: A standout performer on revenue – Actual Revenue was $452.2K, a massive $198.3K (+78%) above the budgeted $253.9K. This was driven by an unexpected surge in other income (categorized as “Misc Income”), which reached $265K vs only $50K budgeted (over 5× the plan, possibly from one-time events or ancillary services). Expenses also ran high at $138.7K (28% over budget, mainly due to higher property taxes), but the expense overrun (+$30.5K) was small relative to the revenue windfall. Consequently, NOI soared to $313.5K, more than double the budget of $145.7K (a favorable variance of $167.8K, +115%).

Quinn: Underperformed expectations. Revenue was $35.98K under budget (-21.7%)【29†L26-L29**, reflecting weaker rentals and little ancillary income. Expenses were $13.98K over budget (+18.6%)【29†L26-L29】, partly due to higher operating costs. These combined to pull NOI down to $40.6K, which is $49.96K (55%) below the budgeted $90.6K. Both reduced income and expense overruns contributed to this shortfall.

Tuscaloosa: Delivered solid results. Revenue beat budget by $27.9K (+7.1%), thanks to higher rental revenues (actual rental income was ~$88.9K above plan, though offset by a large ~$70K bad-debt write-off). Expenses were $13.8K (8.6%) above budget, with some overspending on administration and maintenance. On balance, NOI reached $249.8K, about $14.2K (+6.0%) over the $235.6K budget – a modest favorable variance, even after absorbing the unbudgeted bad-debt loss.

Executive Summary of Overall Performance

Overall Portfolio Performance: Across these nine properties, total YTD revenue slightly exceeded the 2025 budget, but this was offset by higher-than-budgeted operating expenses, resulting in a lower aggregate NOI than planned. In aggregate, the portfolio’s revenue was roughly on target (about 1–2% above budget), but expenses were substantially higher (around 12% over budget), causing total NOI to come in about 8% below the budgeted figure. In other words, the strong revenue outperformance in a few properties was not enough to fully counteract widespread expense overruns and revenue shortfalls elsewhere.

Top Outperformers: The Orange location was the clear outlier on the upside – it generated far more revenue than anticipated (over +78% vs plan) due to significant one-time/ancillary income. This drove Orange’s NOI to more than double its budget, making it the best performer. Nederland and Tuscaloosa also surpassed their NOI targets (by ~25% and 6% respectively) on the strength of higher occupancy and rental rates (each saw revenue ~7–12% above plan) coupled with only modest expense increases. These successes indicate that certain markets achieved greater-than-expected demand and were able to capitalize on it efficiently.

Major Underperformers: Several properties fell well short of their NOI goals. Notably, Groves produced only about 25% of its budgeted NOI – a result of weak revenue generation and heavy rent delinquencies. Groves (along with Tuscaloosa, Bridge City, and Nederland) had to write off significant amounts of uncollectible rent (“Bad Debt”), directly reducing income (e.g. roughly $40K was written off at Groves and $70K at Tuscaloosa). Quinn and Central City also struggled, with NOI about 45–55% below budget, primarily due to lower rental income than planned (each had ~20% revenue shortfalls) combined with expense overruns. Bridge City and Montgomery missed their NOI targets by ~25–31%, influenced by unexpected costs (e.g. Bridge City incurred unbudgeted expenses for maintenance and other items, and Montgomery faced higher repair costs) alongside only slight revenue underperformance.

Expense Management and Drivers: A recurring theme is that operating expenses ran higher than budget at every single property. Some overspending was modest, but several properties saw double-digit percentage overages in expenses – notably Orange (+28% in expenses), Montgomery (+21%), Norwich (+15%), Quinn (+19%), and Bridge City (+20%). Facilities maintenance and repairs were a key driver of over-budget expenses in multiple cases (for example, Montgomery’s R&M costs were ~$17K over plan, and Tuscaloosa and Bridge City also had maintenance overages). Utilities and property taxes exceeded expectations in certain locations (e.g. Orange’s property tax bill was about $16.7K higher than budgeted, and Norwich saw utilities ~28% over budget). Additionally, administrative and marketing expenses were higher in a few cases (Nederland invested more in marketing than planned, etc.). These variances suggest that some budget assumptions for 2025 were too low given actual cost inflation and operational needs.

Revenue Factors: On the revenue side, performance was mixed across the portfolio. Properties like Orange, Nederland, and Tuscaloosa enjoyed higher occupancy or additional revenue streams that pushed income above projections. Orange’s huge revenue surplus was largely from ancillary income (e.g. rentals of additional services or one-time fees) far beyond expectations. In contrast, underperforming sites like Groves, Central, and Quinn suffered from occupancy/vacancy challenges and perhaps competitive pressure, leading to materially lower rental revenues than planned. Furthermore, bad debt (delinquent tenant accounts) emerged as a drag on revenue in several markets – the need to write off unpaid rents directly reduced the effective revenue collected, which was not anticipated in the budgets.

Conclusion: By year-end 2025, Radiant Stores’ portfolio did not fully meet its NOI budget, despite some bright spots. Elevated expenses across the board – whether from maintenance, utilities, or other operational areas – have eroded profitability. Meanwhile, revenue growth was uneven: exceptional in a few properties but underwhelming in others. Going forward, improving collections (reducing bad debts), bolstering occupancy at weaker sites, and tightening expense controls will be critical to closing the performance gap. The 2025 results underscore the importance of conservative budgeting for expenses and aggressive, proactive management of revenue drivers to achieve the company’s financial targets.

YTD 2025 Financial Performance Analysis for Radiant Stores Properties

Summary Table: YTD Actuals vs 2025 Budget

Table 20

Unfavorable Variance Highlights by Property

Executive Summary of Overall Performance

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