Brixmor Property Group Inc. Q4 FY2024 earnings call

• The team delivered strong growth in NOI and FFO, thriving in a strong demand environment. Leasing activity included over $118M in new and renewal lease ABR, with 97.2% anchor occupancy, driven by the grocery segment. - Redevelopment and construction teams achieved $205M of reinvestment in the year with an average 9% incremental return, and the in-process pipeline was near $400M with a 10% average incremental return. - The investments team completed $212M in dispositions and over $290M in value-add acquisitions. - CAM recovery rate reached a record over 92%, exceeding year-end billed occupancy.

Brixmor Property Group Inc. experienced strong growth in NOI and bottom-line FFO by 5%. Leasing activity was robust, with over $118 million of new and renewal lease ABR during the year, including $32 million in the fourth quarter. 81% of the ABR is derived from grocery-anchored centers, with an average productivity of over $700 per foot. The redevelopment and construction teams delivered $205 million of reinvestment at an average incremental return of 9%, and the in-process pipeline was nearly $400 million at an average incremental return of 10%.

• Same-property NOI growth is guided to be 3.5% to 4.5%, including a 200 basis points drag from tenant disruption. - 2025 NAREIT FFO is guided to be in the range of $2.19 to $2.24 per share, representing 4% growth at the midpoint. - Liquidity was $1.6 billion at December 31st, with debt to EBITDA at 5.7 times, and the credit rating was upgraded to BAA2.

• Tenant disruption from bankruptcies, with a 70 basis point impact on the year and 60 basis points in the fourth quarter. - Potential construction cost inflation and impact from tariffs on tenants. - Uncertainty around auction outcomes and the pace of recapturing and backfilling boxes from bankrupt tenants.

Q: Samir Khanal with Evercore ISI asked about investment opportunities and funding.

A: Jim Taylor discussed capital recycling, acquisition opportunities, and considering equity cost in investment decisions.

Q: Andrew Reale with Bank of America inquired about bankruptcy disruption impact on billed occupancy and recaptured boxes.

A: Brian Finnegan stated about 70 basis point impact from bankruptcies in the year, 60 basis points in the quarter, and progress on recaptured boxes with over 50% rent growth on some.

Q: Greg McGinniss with Scotiabank asked about components of same-store NOI growth and back-half acceleration.

A: Steve Gallagher explained the breakdown of tenant disruption impact, including known and unknown components, and confidence in back-half growth.

Q: Craig Mailman with Citi asked about capital deployment, acquisition cap rates, and auction bidding.

A: Jim Taylor and Brian Finnegan discussed acquisition cap rates of 6-7%, value-add opportunities, and active participation in auctions to control destiny.

Q: Dori Kesten with Wells Fargo asked about rent spread expectations.

A: Jim Taylor stated confidence in continued strong rent growth due to favorable tenant demand and portfolio position.

Q: Juan Sanabria with BMO Capital Markets asked about CAM recovery outlook.

A: Brian Finnegan mentioned CAM recovery rate expected to trend back in the low nineties due to lease clause improvements.

Q: Haendel St. Juste with Mizuho asked about redevelopment pipeline and construction costs.

A: Jim Taylor discussed $120M reinvestment in the quarter, future pipeline opportunities, and confidence in offsetting cost inflation with rent growth.

Q: Conor Mitchell with Piper Sandler asked about bankruptcy watch list and small shop occupancy.

A: Brian Finnegan talked about underlying credit base strength and confidence in small shop occupancy growth long term.

Q: Mike Mueller with JPMorgan asked about same-store NOI guidance and acquisition-disposition cap rate spread.

A: Steve Gallagher explained same-store NOI growth drivers and Jim Taylor discussed acquisition and disposition cap rate spread.

Q: Caitlin Burrows with Goldman Sachs asked about small shop occupancy and tariff impact.

A: Brian Finnegan and Jim Taylor discussed small shop occupancy trajectory and retailers' preparedness for tariffs.

Q: Linda Tsai with Jefferies asked about same-store NOI growth acceleration in the second half.

A: Steve Gallagher discussed base rent stacking and growth trajectory through the year.

Q: Paulina Rojas with Green Street asked about maintenance CapEx savings.

A: Jim Taylor and Brian Finnegan explained savings from reinvestment and portfolio efficiency.

Q: Ken for Floris van Dijkum with Compass Point asked about acquisition pace and Britton acquisition.

A: Jim Taylor and Brian Finnegan discussed acquisition opportunism and excitement about Britton Plaza acquisition.

Q: Omotayo Okusanya with Deutsche Bank asked about tariffs impact on tenants.

A: Jim Taylor and Brian Finnegan discussed retailers' preparedness for tariffs and consumer resilience.

Q: Caitlin Burrows with Goldman Sachs asked about off-price value thrive thinking.

A: Brian Finnegan explained off-price retailers' strong performance and growth plans.

Q: Anthony Powell with KeyBanc Capital Markets asked about G&A contribution to FFO guidance.

A: Jim Taylor discussed G&A realignment benefits.

Q: Conor Mitchell with Piper Sandler asked about auction lease recapture details.

A: Brian Finnegan provided details on auction outcomes and progress on recaptured leases.

Q: Ki Bin Kim with Truist Securities asked about Plaza at Buckland Hills acquisition plan.

A: Jim Taylor discussed upside opportunities and demand for backfilling at the center.