Brixmor Property Group Inc. Q1 FY2025 earnings call

Key Points - Jim Taylor: Highlighted the strength of the all-weather value added plan, robust new and renewal activity, leasing spreads, and the ability to capitalize on tenant disruption to bring in better tenants at better rents. Mentioned the SNO pipeline at $60 million or 6% of total in-place ABR and confidence in outperforming in 2025 and 2026. - Brian Finnegan: Discussed the team's execution on new and renewal leases, backfilling of recaptured spaces like Big Lots boxes with retailers like Ross Dress for Less and Burlington stores, adding best-in-class grocers to the portfolio, and the depth of demand in categories like grocery and off-price apparel in the new leasing pipeline. - Steve Gallagher: Reported on financial results, including same property NOI growth, balance sheet activities such as using proceeds from bond issuance to repay debt, and affirmed same property NOI growth guidance of 3.5% to 4.5% and FFO guidance of $2.19 to $2.24.

Nareit FFO was $0.56 per share in the first quarter, driven by same property NOI growth of 2.8% despite a 160 basis point drag from tenant disruption. Base rent growth contributed 410 basis points to same property NOI growth. We ended the first quarter with a 410 basis point spread between leased and build occupancy and our signed but not yet commenced pool totaled $60 million, which includes $52 million of net new rent. The team executed on 1.3 million square feet of new and renewal leases at a blended cash spread of 21%, with spreads on new leases at 48% and renewals at 14%.

Guidance - Affirmed same property NOI growth guidance of 3.5% to 4.5% and FFO guidance of $2.19 to $2.24. - Expect to commence $48 million or 79% of the $60 million signed but not yet commenced pool ratably through the remainder of 2025. - Still expect revenues deemed uncollectible in 2025 within the historical run-rate of 75 basis points to 110 basis points of total revenues. - Base rent is expected to accelerate into the second half of the year as rents from the new pipeline are commenced.

Risks - Tariff uncertainty which may impact retailers and the overall market. - Potential economic slowdown. - Tenant disruptions from bankruptcies or other issues which can impact occupancy and NOI.

Q: About the sequential decrease in the portfolio's lease rate and bankrupt tenants, including exposure to Big Lots, Party City, JOANN, and tying year-to-date activity to guidance for lease rejections and potential outcomes related to other bankrupt tenants A: Brian Finnegan said there was 140 basis points of bankruptcy impact in the quarter, primarily from Big Lots and Party City spaces coming off, expecting to get JOANN boxes back in May, and Steve Gallagher said bankruptcy activity has played out as expected within the guidance range Q: On leasing discussions and activity post April 2nd, including tenant concerns about supply chain disruptions and inventory levels A: James Taylor said tariffs are a concern but tenants in grocery and value segments are well positioned, and Brian Finnegan said leasing discussions are encouraging with more new lease deal flow and tenants focused on growth plans Q: On redevelopment pipeline, including returns and specific projects like Davis, Block 59, and Preston A: James Taylor said the projects are pre-leased and create substantial value, and Brian Finnegan said teams are making good progress on the projects with pre-leased tenants and good execution Q: On lease term income and normalized level for the rest of the year A: Steven Gallagher said lease term income is part of the business and visibility depends on backfilling space and tenant credit Q: On tenants impacted by tariffs and immigration restrictions A: Brian Finnegan said no real impact seen in leasing decisions from immigration, and James Taylor said the all-weather business plan is well positioned to handle policy uncertainty