Brixmor Property Group Inc. Q4 FY2025 earnings call

• Leadership succession: Brian Finnegan on as permanent CEO, thanking Jim Taylor for leadership. Stacy Slater promoted to Executive Vice President Capital Markets, etc., and Matt Ryan expanding role. - Portfolio transformation: Strong fundamentals in open-air grocery-anchored retail, low rent basis, future reinvestment and pipeline. - Operational realignment: Consolidation from four to three regions yielding efficiency, leasing execution, and capital allocation. - Technology and analytics: Early AI and automation initiatives yielding results in lease abstraction, tenant health analyses, etc. - Reinvestment: Stabilized $183 million of projects in 2025 with 10% incremental yield, including Davis Collection. Active pipeline of $336 million, with shadow pipeline providing runway for redevelopment. - Transaction activity: Acquired two grocery-anchored centers in Q4, completed $170 million of dispositions.

Same property NOI grew by 4.2% for the year. FFO for the year was $2.25 per share, up 5.6% year over year. Record leasing year with $70 million of new rent executed. Small shop occupancy increased to 92.2%, and overall occupancy ended the year at 95.1%, the largest sequential gain in company history. Base rent contributed 360 basis points to same property NOI for the year, with ancillary and other income adding 110 basis points. New lease rent growth was 39% and renewal rent growth was 15% for the year, with a retention rate of 87% at year-end.

• Same property NOI guidance: 4.5% to 5.5% growth driven by over 450 basis points of expected base rent contribution. - FFO guidance: $2.33 to $2.37 per share, representing 4.4% growth at the midpoint. - Balance sheet: Debt to EBITDA is 5.4 times, with $1.6 billion of available liquidity.

• Tenant bankruptcies: Potential impact on bad debt, but portfolio tenant health trends are positive. - Market competition: Impact on cap rates and deal costs. - Balance sheet risks: Consideration of debt levels and capital allocation decisions.

Q: Good morning. Thanks a lot for taking my question. You're guiding for bad debt this year 75 to 100 basis points, I guess as you entered last year, guided to 75 to 110 basis points. I think you called out an upgraded portfolio quality or upgraded tenants. But I guess trying to can you provide a little bit more detail there? And how much does this new guidance range, like, reflect just line of sight into tenant bankruptcies?

A: Yeah. Michael, thanks for the question. And I'll start and let Steve take it. As both of us touched on, we're really encouraged by the tenant health trends and portfolio. When we sat here a year ago, we said that on the other side of these recaptures, you would see improvement in what was already the strongest underlying tenancy that we had. So if you think about our low drugstore exposure, if you look at our low theater exposure, the quality and strengths of our small shop tenants, yeah, as I mentioned, 70% of our small shops are for multi-tenant operators. All the work that we've done to the portfolio has just allowed us to attract a much stronger tenancy. So that's reflected in terms of the guidance going forward and how we're thinking about our expectations for bad debt. Steve, you want to touch on more?

Q: Hi, thanks. Good morning. I wanted to ask about the acquisition environment, and thoughts on investment investments and capital recycling activity going forward. Brian, you touched on this in your prepared remarks and maybe Mark can weigh in as well. But just wanted to get your on the pipeline heading into 2026 in terms of volume and pricing. And then second part, Steve, in the guidance reconciliation, it looks like there is $0.01 of growth related to transactions. Can you just speak to that, whether that's based on 2025 activity or if there's something implied in from the forecast, you know, as a result of that?

A: Thanks for the question, Todd. Maybe I'll touch briefly at the start. We just have been very encouraged by what we've been seeing on the transaction front. What's interesting is 40% of the volume that Mark has done he's been here has happened in the last five quarters. Because in a very competitive environment, we found opportunities to put the platform to work. And that's really what you'll we saw last year and what we expect see going forward. But, Mark, why don't you touch on more of the overall environment?

Q: Hey, guys. Thanks for taking the question. I wanted to go back to the guide for a bit. I was hoping you could expound on some of the assumptions, particularly as it relates to the upper end of the same store NOI guide. It seems a little conservative relative to what you put last year. You mentioned 450 basis points of base rent growth, I think. There's a lower tenant credit risk backdrop. You have lower occupancy. So just curious if you maybe give some more color on the on the pathway or what's embedded at the upper end. Thanks A: Yeah. I mean, to get to the upper end, really, I think if within the same property NOI, it's it's it's kind of the same as every year. Right? It's the team can continue, and you saw it in 2025. The team continue to execute on on getting that snow pipeline executed or, sorry, commenced as early as possible and then continue to backfill that pipeline as we move throughout the year. I mean, think as far as the guide, you just look at we talk a lot about the the compounding of those rent commencements, and you're seeing that come through. But there is a small portion of 2025 income associated with some of those names that we talked about. That that we did recognize income at '25 that you have to hurdle as you head into '26. in that walk down Q: Great, thanks. Brian, I know it's been a little over a month since you've been kind of in the permanent CEO role, and and I realized that, you know, Bricksmore has a a solid history of you know, blocking and tackling, executing on operations, you know, kinda making the main thing the main thing. But, you know, as you kinda get into the top job, are there any things, whether it's initiatives, how you're looking at the portfolio or platform maybe differently that you wanna kinda be able to, you know, put your mark on on the company as you kinda take over in the in the top role?

A: Michael, it's it's a great question. So I'd answer in a few ways. First, our strategy of reinvesting and aggressively operating our assets is not going to change. If anything, it's accelerating from here for all the work that we've done. Meaning that we still have occupancy upside, we still have the ability to drive rents, with the quality of tenants that we've attracted, we're gonna continue to improve our assets going forward. That's gonna continue to be the focus We touched on transactions a bit earlier. I'm very encouraged by what we're seeing there. We're gonna remain very disciplined. We don't need acquisitions to grow. But it has been an awesome opportunity for us with Mark partnering with our regional teams. And Mark had said, we know really well where we have an idea of how we can drive outsized value in a very competitive environment. I think the third thing is, and I and I touched on it, we've always been big on technology here and focused on how we can make more data-driven decisions and really focused on that across the organization. And we challenged leaders across the organization to really look at their business look at ways to improve that through technology. And and I mentioned a few of the early wins that were seeing in lease subtraction and leasing legal in terms of efficiency with our legal spend. We've been doing some work around tenant health analyses and the leasing team, particularly a lot of our junior members in terms of how they're deploying AI and automation, really more AI in terms of their leasing prospecting tool. So continue to lean in there. But overall, I mean, we're in a really good position as a team. I'm I feel really grateful for how the company has grown during the time that I and a number of us in this room have been here. And it's really kind of taking that and all the work that we've done to the portfolio and really turbocharging the business plan going forward.