Brixmor Operating Partnership 10Q 2023 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____ to_____

Commission File Number: 001-36160 (Brixmor Property Group)

Commission File Number: 333-256637-01 (Brixmor Operating Partnership LP)

Brixmor Property Group Inc.

Brixmor Operating Partnership LP

(Exact Name of Registrant as Specified in Its Charter)


Maryland	(Brixmor Property Group Inc.)	45-2433192
Delaware	(Brixmor Operating Partnership LP)	80-0831163
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

450 Lexington Avenue, New York, New York 10017

(Address of Principal Executive Offices) (Zip Code)

212-869-3000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BRX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Brixmor Property Group Inc. Yes ☑ No ☐ Brixmor Operating Partnership LP Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Brixmor Property Group Inc. Yes ☑ No ☐ Brixmor Operating Partnership LP Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Brixmor Property Group Inc.

Brixmor Operating Partnership LP

Large accelerated filer

☑

Non-accelerated filer

☐

Large accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Accelerated filer

☐

Smaller reporting company

☐

Accelerated filer

☐

Emerging growth company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Brixmor Property Group Inc. ☐ Brixmor Operating Partnership LP ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Brixmor Property Group Inc. Yes ☐ No ☑ Brixmor Operating Partnership LP Yes ☐ No ☑

(APPLICABLE ONLY TO CORPORATE ISSUERS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of October 1, 2023, Brixmor Property Group Inc. had 300,596,394 shares of common stock outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2023 of Brixmor Property Group Inc. and Brixmor Operating Partnership LP. Unless stated otherwise or the context otherwise requires, references to the “Parent Company” or “BPG” mean Brixmor Property Group Inc. and its consolidated subsidiaries, and references to the “Operating Partnership” mean Brixmor Operating Partnership LP and its consolidated subsidiaries. Unless the context otherwise requires, the terms “the Company,” “Brixmor,” “we,” “our,” and “us” mean the Parent Company and the Operating Partnership, collectively.

The Parent Company is a real estate investment trust (“REIT”) that owns 100% of the limited liability company interests of BPG Subsidiary LLC (“BPG Sub”), which, in turn, is the sole member of Brixmor OP GP LLC (the “General Partner”), the sole general partner of the Operating Partnership. As of September 30, 2023, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 100% of the outstanding partnership common units (the “OP Units”) in the Operating Partnership.

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report:

•Enhances investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole, in the same manner as management views and operates the business;

•Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and

•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Parent Company and the Operating Partnership as one business. Because the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the Parent Company’s executive officers are the Operating Partnership’s executive officers, and although, as a partnership, the Operating Partnership does not have a board of directors, we refer to the Parent Company’s board of directors as the Operating Partnership’s board of directors.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company does not incur any material indebtedness. The Operating Partnership holds substantially all of our assets. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations and its direct or indirect incurrence of indebtedness.

Equity, capital, and non-controlling interests are the primary areas of difference between the unaudited Condensed Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent Company through BPG Sub and the General Partner and has in the past, and may in the future, include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for outside of equity in non-controlling interests in the Parent Company’s financial statements.

The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have material assets other than its indirect interest in the Operating Partnership. Therefore, while equity, capital, and non-controlling interests may differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are materially the same on their respective financial statements.

In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections of this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, separate certification of periodic report under Section 302 of the Sarbanes-Oxley Act of 2002, and separate certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.

TABLE OF CONTENTS


Item No.		Page
Part I - FINANCIAL INFORMATION
1.	Financial Statements	1
	Brixmor Property Group Inc. (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022	3
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Brixmor Operating Partnership LP (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	6
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	7
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022	8
	Condensed Consolidated Statements of Changes in Capital for the Three and Nine Months Ended September 30, 2023 and 2022	9
	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2023 and 2022	10
	Brixmor Property Group Inc. and Brixmor Operating Partnership LP (unaudited)
	Notes to Condensed Consolidated Financial Statements	11
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
3.	Quantitative and Qualitative Disclosures about Market Risk	42
4.	Controls and Procedures	42
Part II - OTHER INFORMATION
1.	Legal Proceedings	43
1A.	Risk Factors	43
2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
3.	Defaults Upon Senior Securities	43
4.	Mine Safety Disclosures	43
5.	Other Information	43
6.	Exhibits	44

Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2022 and in this report, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at https://www.sec.gov. These factors include (1) changes in national, regional, and local economies, due to global events such as international military conflicts, international trade disputes, a foreign debt crisis, foreign currency volatility, or due to domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, general economic contractions, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending; (2) local real estate market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio (defined hereafter); (3) competition from other available properties and e-commerce; (4) disruption and/or consolidation in the retail sector, the financial stability of our tenants, and the overall financial condition of large retailing companies, including their ability to pay rent and/or expense reimbursements that are due to us; (5) in the case of percentage rents, the sales volumes of our tenants; (6) increases in property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, which are relatively inflexible and generally do not decrease if revenue or occupancy decrease; (7) increases in the costs to repair, renovate, and re-lease space; (8) earthquakes, wildfires, tornadoes, hurricanes, damage from rising sea levels due to climate change, other natural disasters, epidemics and/or pandemics, civil unrest, terrorist acts, or acts of war, any of which may result in uninsured or underinsured losses; and (9) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except to the extent otherwise required by law.

iii

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share information)
	September 30, 2023		December 31, 2022
Assets
Real estate
Land	$	1,795,807	$	1,820,358
Buildings and improvements	9,128,624		9,077,993
	10,924,431		10,898,351
Accumulated depreciation and amortization	(3,131,183)		(2,996,759)
Real estate, net	7,793,248		7,901,592

Cash and cash equivalents	861		16,492
Restricted cash	17,822		4,767
Marketable securities	20,609		21,669
Receivables, net	262,774		264,146
Deferred charges and prepaid expenses, net	167,997		154,141
Real estate assets held for sale	10,013		10,439
Other assets	62,566		62,684
Total assets	$	8,335,890	$	8,435,930


Liabilities
Debt obligations, net	$	4,919,157	$	5,035,501
Accounts payable, accrued expenses and other liabilities	548,353		535,419
Total liabilities	5,467,510		5,570,920

Commitments and contingencies (Note 15)	—		—

Equity
Common stock, $0.01 par value; authorized 3,000,000,000 shares; 309,723,386 and 309,042,754 shares issued and 300,596,394 and 299,915,762 shares outstanding	3,006		2,999
Additional paid-in capital	3,303,935		3,299,496
Accumulated other comprehensive income	12,192		8,851
Distributions in excess of net income	(450,753)		(446,336)
Total equity	2,868,380		2,865,010
Total liabilities and equity	$	8,335,890	$	8,435,930
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues
Rental income	$	307,118	$	304,643	$	927,440	$	908,903
Other revenues	196		102		1,111		602
Total revenues	307,314		304,745		928,551		909,505

Operating expenses
Operating costs	35,058		33,299		106,658		102,592
Real estate taxes	42,156		44,179		130,556		128,123
Depreciation and amortization	96,254		84,773		272,807		254,132
Impairment of real estate assets	—		—		17,836		4,597
General and administrative	29,182		29,094		86,868		86,796
Total operating expenses	202,650		191,345		614,725		576,240

Other income (expense)
Dividends and interest	273		88		345		198
Interest expense	(47,364)		(48,726)		(143,529)		(143,934)
Gain on sale of real estate assets	6,712		15,768		59,037		60,667
Gain (loss) on extinguishment of debt, net	6		—		4,356		(221)
Other	(555)		(789)		(1,645)		(2,937)
Total other expense	(40,928)		(33,659)		(81,436)		(86,227)

Net income	$	63,736	$	79,741	$	232,390	$	247,038

Net income per common share:
Basic	$	0.21	$	0.26	$	0.77	$	0.82
Diluted	$	0.21	$	0.26	$	0.77	$	0.82
Weighted average shares:
Basic	301,007		300,213		300,955		299,626
Diluted	302,511		301,341		302,447		300,784
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Other comprehensive income
Change in unrealized gain on interest rate swaps, net (Note 6)	962		6,088		3,019		21,469
Change in unrealized gain (loss) on marketable securities	127		(358)		322		(767)
Total other comprehensive income	1,089		5,730		3,341		20,702
Comprehensive income	$	64,825	$	85,471	$	235,731	$	267,740
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, in thousands, except per share data)
	Common Stock
	Number	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Distributions in Excess of Net Income		Total
Beginning balance, January 1, 2022	297,210	$	2,972	$	3,231,732	$	(12,674)	$	(503,684)	$	2,718,346
Common stock dividends ($0.240 per common share)	—	—		—		—		(73,156)		(73,156)
Equity based compensation expense	—	—		4,620		—		—		4,620
Other comprehensive income	—	—		—		10,952		—		10,952
Issuance of common stock	2,278	23		43,825		—		—		43,848
Repurchases of common shares in conjunction with equity award plans	—	—		(10,458)		—		—		(10,458)
Net income	—	—		—		—		79,506		79,506
Ending balance, March 31, 2022	299,488	2,995		3,269,719		(1,722)		(497,334)		2,773,658
Common stock dividends ($0.240 per common share)	—	—		—		—		(72,534)		(72,534)
Equity based compensation expense	—	—		6,500		—		—		6,500
Other comprehensive income	—	—		—		4,020		—		4,020
Issuance of common stock	181	2		3,558		—		—		3,560
Repurchases of common shares in conjunction with equity award plans	—	—		(2)		—		—		(2)
Net income	—	—		—		—		87,791		87,791
Ending balance, June 30, 2022	299,669	2,997		3,279,775		2,298		(482,077)		2,802,993
Common stock dividends ($0.240 per common share)	—	—		—		—		(72,555)		(72,555)
Equity based compensation expense	—	—		6,580		—		—		6,580
Other comprehensive income	—	—		—		5,730		—		5,730
Issuance of common stock	244	2		5,690		—		—		5,692

Net income	—	—		—		—		79,741		79,741
Ending balance, September 30, 2022	299,913	$	2,999	$	3,292,045	$	8,028	$	(474,891)	$	2,828,181

Beginning balance, January 1, 2023	299,916	$	2,999	$	3,299,496	$	8,851	$	(446,336)	$	2,865,010
Common stock dividends ($0.260 per common share)	—	—		—		—		(79,298)		(79,298)
Equity based compensation expense	—	—		4,518		—		—		4,518
Other comprehensive loss	—	—		—		(3,731)		—		(3,731)
Issuance of common stock	632	6		(6)		—		—		—
Repurchases of common shares in conjunction with equity award plans	—	—		(11,229)		—		—		(11,229)
Net income	—	—		—		—		112,246		112,246
Ending balance, March 31, 2023	300,548	3,005		3,292,779		5,120		(413,388)		2,887,516
Common stock dividends ($0.260 per common share)	—	—		—		—		(78,755)		(78,755)
Equity based compensation expense	—	—		5,019		—		—		5,019
Other comprehensive income	—	—		—		5,983		—		5,983
Issuance of common stock	45	1		—		—		—		1

Net income	—	—		—		—		56,408		56,408
Ending balance, June 30, 2023	300,593	3,006		3,297,798		11,103		(435,735)		2,876,172
Common stock dividends ($0.260 per common share)	—	—		—		—		(78,754)		(78,754)
Equity based compensation expense	—	—		6,139		—		—		6,139
Other comprehensive income	—	—		—		1,089		—		1,089
Issuance of common stock	3	—		—		—		—		—
Repurchases of common shares in conjunction with equity award plans	—	—		(2)		—		—		(2)
Net income	—	—		—		—		63,736		63,736
Ending balance, September 30, 2023	300,596	$	3,006	$	3,303,935	$	12,192	$	(450,753)	$	2,868,380
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net income	$	232,390	$	247,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	272,807		254,132
Accretion of debt premium and discount, net	(2,198)		(2,147)
Deferred financing cost amortization	5,163		5,261
Accretion of above- and below-market leases, net	(9,361)		(9,245)
Tenant inducement amortization and other	3,205		2,970
Impairment of real estate assets	17,836		4,597
Gain on sale of real estate assets	(59,037)		(60,667)
Equity based compensation	14,559		16,414
(Gain) loss on extinguishment of debt, net	(4,356)		221
Changes in operating assets and liabilities:
Receivables, net	(937)		(14,369)
Deferred charges and prepaid expenses	(37,619)		(36,775)
Other assets	(760)		(284)
Accounts payable, accrued expenses and other liabilities	21,820		34,014
Net cash provided by operating activities	453,512		441,160

Investing activities:
Improvements to and investments in real estate assets	(254,426)		(233,127)
Acquisitions of real estate assets	(1,914)		(409,688)
Proceeds from sales of real estate assets	162,194		171,017
Purchase of marketable securities	(20,442)		(24,558)
Proceeds from sale of marketable securities	21,566		21,877
Net cash used in investing activities	(93,022)		(474,479)

Financing activities:

Repayment of borrowings under unsecured revolving credit facility	(480,000)		(465,000)
Proceeds from borrowings under unsecured revolving credit facility	360,000		665,000
Proceeds from unsecured term loans	200,000		—
Repayment of borrowings under unsecured notes	(194,254)		(250,000)
Deferred financing and debt extinguishment costs	(700)		(8,398)
Proceeds from issuances of common shares	—		53,100
Distributions to common stockholders	(236,881)		(217,414)

Repurchases of common shares in conjunction with equity award plans	(11,231)		(10,460)
Net cash used in financing activities	(363,066)		(233,172)

Net change in cash, cash equivalents and restricted cash	(2,576)		(266,491)
Cash, cash equivalents and restricted cash at beginning of period	21,259		297,743
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	31,252

Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	861	$	23,591
Restricted cash	17,822		7,661
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	31,252

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,987 and $2,215	$	144,271	$	142,470
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except unit information)
	September 30, 2023		December 31, 2022
Assets
Real estate
Land	$	1,795,807	$	1,820,358
Buildings and improvements	9,128,624		9,077,993
	10,924,431		10,898,351
Accumulated depreciation and amortization	(3,131,183)		(2,996,759)
Real estate, net	7,793,248		7,901,592

Cash and cash equivalents	861		15,565
Restricted cash	17,822		4,767
Marketable securities	20,609		21,669
Receivables, net	262,774		264,146
Deferred charges and prepaid expenses, net	167,997		154,141
Real estate assets held for sale	10,013		10,439
Other assets	62,566		62,684
Total assets	$	8,335,890	$	8,435,003


Liabilities
Debt obligations, net	$	4,919,157	$	5,035,501
Accounts payable, accrued expenses and other liabilities	548,376		535,419
Total liabilities	5,467,533		5,570,920

Commitments and contingencies (Note 15)	—		—

Capital
Partnership common units; 309,723,386 and 309,042,754 units issued and 300,596,394 and 299,915,762 units outstanding	2,856,165		2,855,232
Accumulated other comprehensive income	12,192		8,851
Total capital	2,868,357		2,864,083
Total liabilities and capital	$	8,335,890	$	8,435,003
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues
Rental income	$	307,118	$	304,643	$	927,440	$	908,903
Other revenues	196		102		1,111		602
Total revenues	307,314		304,745		928,551		909,505

Operating expenses
Operating costs	35,058		33,299		106,658		102,592
Real estate taxes	42,156		44,179		130,556		128,123
Depreciation and amortization	96,254		84,773		272,807		254,132
Impairment of real estate assets	—		—		17,836		4,597
General and administrative	29,182		29,094		86,868		86,796
Total operating expenses	202,650		191,345		614,725		576,240

Other income (expense)
Dividends and interest	273		88		345		198
Interest expense	(47,364)		(48,726)		(143,529)		(143,934)
Gain on sale of real estate assets	6,712		15,768		59,037		60,667
Gain (loss) on extinguishment of debt, net	6		—		4,356		(221)
Other	(555)		(789)		(1,645)		(2,937)
Total other expense	(40,928)		(33,659)		(81,436)		(86,227)

Net income	$	63,736	$	79,741	$	232,390	$	247,038



Net income per common unit:
Basic	$	0.21	$	0.26	$	0.77	$	0.82
Diluted	$	0.21	$	0.26	$	0.77	$	0.82
Weighted average units:
Basic	301,007		300,213		300,955		299,626
Diluted	302,511		301,341		302,447		300,784
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Other comprehensive income (loss)
Change in unrealized gain on interest rate swaps, net (Note 6)	962		6,088		3,019		21,469
Change in unrealized gain (loss) on marketable securities	127		(358)		322		(767)
Total other comprehensive income	1,089		5,730		3,341		20,702
Comprehensive income	$	64,825	$	85,471	$	235,731	$	267,740
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Unaudited, in thousands)

	Partnership Common Units		Accumulated Other Comprehensive Income (Loss)		Total
Beginning balance, January 1, 2022	$	2,715,863	$	(12,675)	$	2,703,188
Distributions to partners	(64,527)		—		(64,527)
Equity based compensation expense	4,620		—		4,620
Other comprehensive income	—		10,953		10,953
Issuance of OP Units	43,848		—		43,848
Repurchases of OP Units in conjunction with equity award plans	(10,458)		—		(10,458)
Net income	79,506		—		79,506
Ending balance, March 31, 2022	2,768,852		(1,722)		2,767,130
Distributions to partners	(66,195)		—		(66,195)
Equity based compensation expense	6,500		—		6,500
Other comprehensive income	—		4,020		4,020
Issuance of OP Units	3,560		—		3,560
Repurchases of OP Units in conjunction with equity award plans	(2)		—		(2)
Net income	87,791		—		87,791
Ending balance, June 30, 2022	2,800,506		2,298		2,802,804
Distributions to partners	(73,295)		—		(73,295)
Equity based compensation expense	6,580		—		6,580
Other comprehensive income	—		5,730		5,730
Issuance of OP Units	5,692		—		5,692

Net income	79,741		—		79,741
Ending balance, September 30, 2022	$	2,819,224	$	8,028	$	2,827,252

Beginning balance, January 1, 2023	$	2,855,232	$	8,851	$	2,864,083
Distributions to partners	(78,397)		—		(78,397)
Equity based compensation expense	4,518		—		4,518
Other comprehensive loss	—		(3,731)		(3,731)

Repurchases of OP Units in conjunction with equity award plans	(11,229)		—		(11,229)
Net income	112,246		—		112,246
Ending balance, March 31, 2023	2,882,370		5,120		2,887,490
Distributions to partners	(78,754)		—		(78,754)
Equity based compensation expense	5,019		—		5,019
Other comprehensive income	—		5,983		5,983
Issuance of OP Units	1		—		1

Net income	56,408		—		56,408
Ending balance, June 30, 2023	2,865,044		11,103		2,876,147
Distributions to partners	(78,752)		—		(78,752)
Equity based compensation expense	6,139		—		6,139
Other comprehensive income	—		1,089		1,089

Repurchases of OP Units in conjunction with equity award plans	(2)		—		(2)
Net income	63,736		—		63,736
Ending balance, September 30, 2023	$	2,856,165	$	12,192	$	2,868,357
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net income	$	232,390	$	247,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	272,807		254,132
Accretion of debt premium and discount, net	(2,198)		(2,147)
Deferred financing cost amortization	5,163		5,261
Accretion of above- and below-market leases, net	(9,361)		(9,245)
Tenant inducement amortization and other	3,205		2,970
Impairment of real estate assets	17,836		4,597
Gain on sale of real estate assets	(59,037)		(60,667)
Equity based compensation	14,559		16,414
(Gain) loss on extinguishment of debt, net	(4,356)		221
Changes in operating assets and liabilities:
Receivables, net	(937)		(14,369)
Deferred charges and prepaid expenses	(37,619)		(36,775)
Other assets	(760)		(284)
Accounts payable, accrued expenses and other liabilities	21,820		34,014
Net cash provided by operating activities	453,512		441,160

Investing activities:
Improvements to and investments in real estate assets	(254,426)		(233,127)
Acquisitions of real estate assets	(1,914)		(409,688)
Proceeds from sales of real estate assets	162,194		171,017
Purchase of marketable securities	(20,442)		(24,558)
Proceeds from sale of marketable securities	21,566		21,877
Net cash used in investing activities	(93,022)		(474,479)

Financing activities:

Repayment of borrowings under unsecured revolving credit facility	(480,000)		(465,000)
Proceeds from borrowings under unsecured revolving credit facility	360,000		665,000
Proceeds from unsecured term loans	200,000		—
Repayment of borrowings under unsecured notes	(194,254)		(250,000)
Deferred financing and debt extinguishment costs	(700)		(8,398)
Proceeds from issuances of OP Units	—		53,100
Partner distributions and repurchases of OP Units	(247,185)		(213,645)
Net cash used in financing activities	(362,139)		(218,943)

Net change in cash, cash equivalents and restricted cash	(1,649)		(252,262)
Cash, cash equivalents and restricted cash at beginning of period	20,332		282,585
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	30,323

Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	861	$	22,662
Restricted cash	17,822		7,661
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	30,323

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,987 and $2,215	$	144,271	$	142,470
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRIXMOR PROPERTY GROUP INC. AND BRIXMOR OPERATING PARTNERSHIP LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, dollars in thousands, unless otherwise stated)

1. Nature of Business and Financial Statement Presentation

Description of Business

Brixmor Property Group Inc. and subsidiaries (collectively, the “Parent Company”) is an internally-managed corporation that has elected to be taxed as a real estate investment trust (“REIT”). Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which the Parent Company conducts substantially all of its operations and owns substantially all of its assets. The Parent Company owns 100% of the limited liability company interests of BPG Subsidiary LLC (“BPG Sub”), which, in turn, is the sole member of Brixmor OP GP LLC (the “General Partner”), the sole general partner of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. The Parent Company, the Operating Partnership, and their consolidated subsidiaries (collectively, the “Company” or “Brixmor”) owns and operates one of the largest publicly-traded open-air retail portfolios by gross leasable area (“GLA”) in the United States (“U.S.”), comprised primarily of community and neighborhood shopping centers. As of September 30, 2023, the Company’s portfolio was comprised of 364 shopping centers (the “Portfolio”) totaling approximately 65 million square feet of GLA. The Company’s high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and its shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers.

The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles (“GAAP”).

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the unaudited Condensed Consolidated Financial Statements for the periods presented have been included. The operating results for the periods presented are not necessarily indicative of the results that may be expected for a full fiscal year. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2022 and accompanying notes included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2023.

Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Parent Company, the Operating Partnership, each of their wholly owned subsidiaries, and all other entities in which they have a controlling financial interest. All intercompany transactions have been eliminated.

Income Taxes

The Parent Company has elected to qualify as a REIT in accordance with the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT, the Parent Company must meet several organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. Management intends to continue to satisfy these requirements and maintain the Parent Company's REIT status. As a REIT, the Parent Company generally will not be subject to U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.

The Parent Company conducts substantially all of its operations through the Operating Partnership, which is organized as a limited partnership and treated as a pass-through entity for U.S. federal tax purposes. Therefore, U.S. federal income taxes do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company.

If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years. Even if the Parent Company qualifies for taxation as a REIT, the Parent Company is subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed taxable income as well as other income items, as applicable.

The Parent Company has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (each a “TRS”), and the Parent Company may in the future elect to treat newly formed and/or other existing subsidiaries as TRSs. A TRS may participate in non-real estate related activities and/or perform non-customary services for tenants and is subject to certain limitations under the Code. A TRS is subject to U.S. federal, state, and local income taxes at regular corporate rates. Income taxes related to the Parent Company’s TRSs do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company.

The Company has considered the tax positions taken for the open tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s unaudited Condensed Consolidated Financial Statements as of September 30, 2023 and December 31, 2022. Open tax years generally range from 2020 through 2022 but may vary by jurisdiction and issue. The Company recognizes penalties and interest accrued related to unrecognized tax benefits as income tax expense, which is included in Other on the Company’s unaudited Condensed Consolidated Statements of Operations.

New Accounting Pronouncements

Any recently issued accounting standards or pronouncements have been excluded as they either are not relevant to the Company, or they are not expected to have a material impact on the unaudited Condensed Consolidated Financial Statements of the Company.

2. Acquisition of Real Estate

During the nine months ended September 30, 2023, the Company acquired the following asset:

Description(1)

Location

Month Acquired

GLA

Aggregate Purchase Price(2)

Land at Aurora Plaza(3)

Aurora, CO

Apr-23

N/A

1,914

—

1,914

(1)No debt was assumed related to the listed acquisition.

(2)Aggregate purchase price includes $0.1 million of transaction costs.

(3)The Company terminated a ground lease and acquired the associated land parcel.

During the nine months ended September 30, 2022, the Company acquired the following assets, in separate transactions:

Description(1)

Location

Month Acquired

GLA

Aggregate Purchase Price(2)

Brea Gateway

Brea, CA

Jan-22

181,819

83,991

Land at Cobblestone Village

St. Augustine, FL

Jan-22

N/A

1,661

Arboretum Village

Dallas, TX

Jan-22

95,354

46,330

Ravinia Plaza

Orland Park, IL

Feb-22

101,800

26,160

Elmhurst Crossing

Elmhurst, IL

Apr-22

347,503

75,096

North Riverside Plaza

Berwyn, IL

Apr-22

383,884

60,114

West U Marketplace

Houston, TX

Apr-22

60,136

33,741

Waterford Commons - Ruby Tuesday

Waterford, CT

May-22

6,781

1,574

Lake Pointe Village

Sugarland, TX

Jun-22

162,263

80,971

Adjustments related to previously acquired assets

Various

N/A

1,339,540

409,688

(1)No debt was assumed related to any of the listed acquisitions.

(2)Aggregate purchase price includes $2.0 million of transaction costs, offset by $2.9 million of closing credits.

The aggregate purchase price of the assets acquired during the nine months ended September 30, 2023 and 2022, respectively, has been allocated as follows:


	Nine Months Ended September 30,
Assets	2023		2022
Land	$	1,914	$	84,361
Buildings	—		294,241
Building and tenant improvements	—		33,352
Above-market leases(1)	—		701
In-place leases(2)	—		29,607
Total assets acquired	$	1,914	$	442,262

Liabilities
Below-market leases(3)	$	—	$	30,748
Other liabilities	—		1,826
Total liabilities	—		32,574
Net assets acquired	$	1,914	$	409,688

(1)The weighted average amortization period at the time of acquisition for above-market leases related to assets acquired during the nine months ended September 30, 2022 was 6.5 years.

(2)The weighted average amortization period at the time of acquisition for in-place leases related to assets acquired during the nine months ended September 30, 2022 was 12.1 years.

(3)The weighted average amortization period at the time of acquisition for below-market leases related to assets acquired during the nine months ended September 30, 2022 was 20.1 years.

3. Dispositions and Assets Held for Sale

During the three months ended September 30, 2023, the Company disposed of one shopping center and one partial shopping center for aggregate net proceeds of $16.6 million, resulting in aggregate gain of $6.8 million. In addition, during the three months ended September 30, 2023, the Company resolved contingencies related to previously disposed assets, resulting in a loss of $0.1 million. During the nine months ended September 30, 2023, the Company disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million, resulting in aggregate gain of $58.9 million and aggregate impairment of $6.1 million. In addition, during the nine months ended September 30, 2023, the Company disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in net gain of $0.1 million.

During the three months ended September 30, 2022, the Company disposed of one shopping center and three partial shopping centers for aggregate net proceeds of $28.2 million, resulting in aggregate gain of $13.5 million. In addition, during the three months ended September 30, 2022, the Company had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in aggregate gain of $2.3 million. During the nine months ended September 30, 2022, the Company disposed of 11 shopping centers and seven partial shopping centers for aggregate net proceeds of $168.2 million, resulting in aggregate gain of $58.2 million and aggregate impairment of $4.6 million. In addition, during the nine months ended September 30, 2022, the Company resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in net gain of $2.4 million.

As of September 30, 2023, the Company had one property held for sale. As of December 31, 2022, the Company had one property and two partial properties held for sale. There were no liabilities associated with the properties classified as held for sale. The following table presents the assets associated with the properties classified as held for sale:


Assets	September 30, 2023		December 31, 2022
Land	$	1,818	$	1,988
Buildings and improvements	13,155		13,864
Accumulated depreciation and amortization	(5,285)		(5,625)
Real estate, net	9,688		10,227
Other assets	325		212
Assets associated with real estate assets held for sale	$	10,013	$	10,439

There were no discontinued operations for the three and nine months ended September 30, 2023 and 2022 as none of the dispositions represented a strategic shift in the Company’s business that would qualify as discontinued operations.

4. Real Estate

The Company’s components of Real estate, net consisted of the following:


	September 30, 2023		December 31, 2022
Land	$	1,795,807	$	1,820,358
Buildings and improvements:
Buildings and tenant improvements	8,616,743		8,535,279
Lease intangibles(1)	511,881		542,714
	10,924,431		10,898,351
Accumulated depreciation and amortization(2)	(3,131,183)		(2,996,759)
Total	$	7,793,248	$	7,901,592

(1)As of September 30, 2023 and December 31, 2022, Lease intangibles consisted of $463.0 million and $492.0 million, respectively, of in-place leases and $48.9 million and $50.7 million, respectively, of above-market leases. These intangible assets are amortized over the term of each related lease.

(2)As of September 30, 2023 and December 31, 2022, Accumulated depreciation and amortization included $448.5 million and $465.2 million, respectively, of accumulated amortization related to Lease intangibles.

In addition, as of September 30, 2023 and December 31, 2022, the Company had intangible liabilities relating to below-market leases of $334.0 million and $349.7 million, respectively, and accumulated accretion of $247.7 million and $252.9 million, respectively. These intangible liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets.

Below-market lease accretion income, net of above-market lease amortization for the three months ended September 30, 2023 and 2022 was $3.3 million and $3.3 million, respectively. Below-market lease accretion income, net of above-market lease amortization for the nine months ended September 30, 2023 and 2022 was $9.4 million and $9.2 million, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. Amortization expense associated with in-place lease value for the three months ended September 30, 2023 and 2022 was $4.5 million and $5.1 million, respectively. Amortization expense associated with in-place lease value for the nine months ended September 30, 2023 and 2022 was $12.9 million and $14.0 million, respectively. These amounts are included in Depreciation and amortization on the Company’s unaudited Condensed Consolidated Statements of Operations. The Company’s estimated below-market lease accretion income, net of above-market lease amortization expense, and in-place lease amortization expense for the next five years are as follows:


Year ending December 31,	Below-market lease accretion (income), net of above-market lease amortization expense		In-place lease amortization expense
2023 (remaining three months)	$	(2,445)	$	3,449
2024	(9,380)		11,672
2025	(8,173)		8,605
2026	(7,147)		6,150
2027	(6,074)		4,738

5. Impairments

The Company did not recognize any impairments during the three months ended September 30, 2023.

The Company recognized the following impairments during the nine months ended September 30, 2023:


Nine Months Ended September 30, 2023
Property Name(1)	Location	GLA	Impairment Charge
The Quentin Collection	Kildeer, IL	171,530	$	11,705
Broadway Faire - Theater Box(2)	Fresno, CA	39,983	2,102
Elk Grove Town Center(2)	Elk Grove Village, IL	61,609	1,796
The Manchester Collection - Crossroads(2)	Manchester, CT	14,867	1,155
Spring Mall(2)	Greenfield, WI	45,920	1,078

		333,909	$	17,836

(1)The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third party buyers in connection with the Company’s capital recycling program.

(2)The Company disposed of this property during the nine months ended September 30, 2023

The Company did not recognize any impairments during the three months ended September 30, 2022.

The Company recognized the following impairments during the nine months ended September 30, 2022:


Nine Months Ended September 30, 2022
Property Name(1)	Location	GLA	Impairment Charge
Torrington Plaza(2)	Torrington, CT	125,496	$	3,509
New Garden Center (2)	Kennett Square, PA	147,370	1,088
		272,866	$	4,597

(2)The Company disposed of this property during the year ended December 31, 2022.

The Company can provide no assurance that material impairment charges with respect to its Portfolio will not occur in future periods. See Note 3 for additional information regarding impairment charges taken in connection with the Company’s dispositions. See Note 8 for additional information regarding the fair value of operating properties that have been impaired.

6. Financial Instruments – Derivatives and Hedging

The Company’s use of derivative instruments is intended to manage its exposure to interest rate movements and such instruments are not utilized for speculative purposes. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap agreements and interest rate cap agreements that result in the receipt and/or payment of future known and uncertain cash amounts, the value of which are determined by market interest rates.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchanging the underlying notional amount. The Company utilizes interest rate swaps to partially hedge the cash flows associated with variable-rate debt. During the nine months ended September 30, 2023, the Company entered into three interest rate swap agreements with an effective date of May 1, 2023, an aggregate notional amount of $200.0 million, a weighted average fixed rate of 3.59%, and an expiration date of July 26, 2027. During the year ended December 31, 2022, the Company did not enter into any new interest rate swap agreements.

Detail on the Company’s interest rate derivatives designated as cash flow hedges outstanding as of September 30, 2023 and December 31, 2022 is as follows:


	Number of Instruments		Notional Amount
	September 30, 2023	December 31, 2022	September 30, 2023		December 31, 2022
Interest Rate Swaps	7	4	$	500,000	$	300,000

The Company has elected to present its interest rate derivatives on its unaudited Condensed Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. Detail on the fair value of the Company’s interest rate derivatives on a gross and net basis as of September 30, 2023 and December 31, 2022 is as follows:


	Fair Value of Derivative Instruments
Interest rate swaps classified as:	September 30, 2023		December 31, 2022
Gross derivative assets	$	12,659	$	9,640
Gross derivative liabilities	—		—
Net derivative assets	$	12,659	$	9,640

The gross derivative assets are included in Other assets on the Company’s unaudited Condensed Consolidated Balance Sheets. All of the Company’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The fair value of the Company’s interest rate derivatives is determined using market standard valuation techniques, including discounted cash flow analyses, on the expected

cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatility. These inputs are classified as Level 2 of the fair value hierarchy. The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recognized in other comprehensive income (loss) and is reclassified into earnings as interest expense in the period that the hedged transaction affects earnings.

The effective portion of the Company’s interest rate swaps that was recognized on the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022 is as follows:


Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Change in unrealized gain on interest rate swaps	$	3,932	$	5,818	$	9,906	$	17,979
Amortization (accretion) of interest rate swaps to interest expense	(2,970)		270		(6,887)		3,490
Change in unrealized gain on interest rate swaps, net	$	962	$	6,088	$	3,019	$	21,469

The Company estimates that $10.3 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges during the three and nine months ended September 30, 2023 and 2022.

Non-Designated (Mark-to-Market) Hedges of Interest Rate Risk

The Company does not use derivatives for trading or speculative purposes. As of September 30, 2023 and December 31, 2022, the Company did not have any non-designated hedges.

Credit-risk-related Contingent Features

The Company has agreements with its derivative counterparties that contain provisions whereby if the Company defaults on certain of its indebtedness and the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company were to be declared in default on its derivative contracts, it would be required to settle its obligations under such agreements at their termination value, including accrued interest.

7. Debt Obligations

As of September 30, 2023 and December 31, 2022, the Company had the following indebtedness outstanding:


	Carrying Value as of
	September 30, 2023		December 31, 2022		Stated Interest Rate(1)	Scheduled Maturity Date
Notes payable
Unsecured notes(2)	$	4,418,805	$	4,618,453	2.25% – 7.97%	2024 – 2031
Net unamortized premium	21,721		23,787
Net unamortized debt issuance costs	(18,753)		(22,325)
Total notes payable, net	$	4,421,773	$	4,619,915

Unsecured Credit Facility
Revolving Facility(3)	$	5,000	$	125,000	6.46%	2026
Term Loan Facility(3)(4)(5)	500,000		300,000		6.63%	2027
Net unamortized debt issuance costs	(7,616)		(9,414)
Total Unsecured Credit Facility and term loans	$	497,384	$	415,586

Total debt obligations, net	$	4,919,157	$	5,035,501

(1)Stated interest rates as of September 30, 2023 do not include the impact of the Company’s interest rate swap agreements (described below).

(2)The weighted average stated interest rate on the Company’s unsecured notes was 3.70% as of September 30, 2023.

(3)The Company's Revolving Facility (defined hereafter) and Term Loan Facility (defined hereafter) include a sustainability metric incentive, which can reduce the applicable credit spread by up to two basis points. During the nine months ended September 30, 2023, the Company concluded that it did not qualify for a reduction to the applicable credit spread during the nine months ended September 30, 2023 and year ended December 31, 2022 resulting in a less than $0.1 million increase to interest expense.

(4)Effective June 1, 2022, the Company has in place four interest rate swap agreements that convert the variable interest rate on $300.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 2.59% (plus a spread of 120 basis points) through July 26, 2024.

(5)Effective May 1, 2023, the Company has in place three interest rate swap agreements that convert the variable interest rate on $200.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 3.59% (plus a spread of 120 basis points and a Secured Overnight Financing Rate ("SOFR") adjustment of 10 basis points) through the maturity of the Term Loan Facility (defined hereafter) on July 26, 2027.

2023 Debt Transactions

The Operating Partnership has an unsecured credit facility as amended and restated on April 28, 2022 (the "Unsecured Credit Facility"), which is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $300.0 million term loan, in addition to a $200.0 million delayed draw term loan, which was drawn on April 24, 2023 (together the "Term Loan Facility"). During the nine months ended September 30, 2023, the Operating Partnership repaid $120.0 million, net of borrowings, under its Revolving Facility, with proceeds from dispositions.

In April 2023, the Operating Partnership commenced a cash tender offer (the "Tender Offer") for up to $199.6 million of its outstanding 3.65% Senior Notes due 2024 (the "2024 Notes"), which expired on April 24, 2023. Pursuant to the Tender Offer, the Operating Partnership repurchased $199.6 million of its 2024 Notes on April 25, 2023. Following the Tender Offer, $300.4 million aggregate principal amount of the 2024 Notes remain outstanding. The Operating Partnership funded the Tender Offer with proceeds from its $200.0 million delayed draw term loan, which was drawn on April 24, 2023. In connection with the Tender Offer, the Company recognized a $4.4 million gain on extinguishment of debt during the nine months ended September 30, 2023.

Pursuant to the terms of the Company’s unsecured debt agreements, the Company, among other things, is subject to the maintenance of various financial covenants. The Company was in compliance with these covenants as of September 30, 2023.

Debt Maturities

As of September 30, 2023 and December 31, 2022, the Company had accrued interest of $43.6 million and $47.3 million outstanding, respectively. As of September 30, 2023, scheduled maturities of the Company’s outstanding debt obligations were as follows:


Year ending December 31,
2023 (remaining three months)	$	—
2024	300,352
2025	700,000
2026	612,542
2027	900,000
Thereafter	2,410,911
Total debt maturities	4,923,805
Net unamortized premium	21,721
Net unamortized debt issuance costs	(26,369)
Total debt obligations, net	$	4,919,157

As of the date the financial statements were issued, the Company's scheduled debt maturities for the next 12 months were comprised of the $300.4 million outstanding principal balance on the 2024 Notes.

8. Fair Value Disclosures

All financial instruments of the Company are reflected in the accompanying unaudited Condensed Consolidated Balance Sheets at amounts which, in management’s judgment, reasonably approximate their fair values, except those instruments listed below:


	September 30, 2023				December 31, 2022
	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value

Notes payable	$	4,421,773	$	3,968,052	$	4,619,915	$	4,148,681
Unsecured Credit Facility	497,384		505,000		415,586		425,056
Total debt obligations, net	$	4,919,157	$	4,473,052	$	5,035,501	$	4,573,737

As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in GAAP that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy).

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Based on the above criteria, the Company has determined that the valuations of its debt obligations are classified within Level 3 of the fair value hierarchy. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

Recurring Fair Value

The Company’s marketable securities and interest rate derivatives are measured and recognized at fair value on a recurring basis. The valuations of the Company’s marketable securities are based primarily on publicly traded market values in active markets and are classified within Levels 1 and 2 of the fair value hierarchy. See Note 6 for fair value information regarding the Company’s interest rate derivatives.

The following table presents the placement in the fair value hierarchy of assets that are measured and recognized at fair value on a recurring basis:


	Fair Value Measurements as of September 30, 2023
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities(1)	$	20,609	$	913	$	19,696	$	—
Interest rate derivatives	$	12,659	$	—	$	12,659	$	—




	Fair Value Measurements as of December 31, 2022
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities(1)	$	21,669	$	1,088	$	20,581	$	—
Interest rate derivatives	$	9,640	$	—	$	9,640	$	—

(1)As of September 30, 2023 and December 31, 2022, marketable securities included $0.5 million and $0.8 million of net unrealized losses, respectively. As of September 30, 2023, the contractual maturities of the Company’s marketable securities were within the next five years.

Non-Recurring Fair Value

Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. Fair value is determined by offers from third party buyers, market comparable data, third party appraisals, or discounted cash flow analyses. The cash flows utilized in such analyses are comprised of unobservable inputs that include forecasted rental revenue and expenses based upon market conditions and future expectations. The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for the respective properties. Based on these inputs, the Company has determined that the valuations of these properties are classified within Level 3 of the fair value hierarchy.

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and recognized at fair value on a non-recurring basis. The table includes information related to properties that were remeasured to fair value as a result of impairment testing during the nine months ended September 30, 2023, excluding the properties sold prior to September 30, 2023. During the year ended December 31, 2022, no properties were remeasured to fair value as a result of impairment testing that were not sold prior to December 31, 2022.


	Fair Value Measurements as of September 30, 2023
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment of Real Estate Assets
Assets:
Properties(1)(2)	$	14,987	$	—	$	—	$	14,987	$	11,705

(1)Excludes properties disposed of prior to September 30, 2023.

(2)The carrying value of The Quentin Collection, which was remeasured to fair value based on an income approach valuation using the direct capitalization method during the nine months ended September 30, 2023, is $15.0 million. The capitalization rate of 8.75% utilized in the analysis was based upon unobservable inputs that the Company believes to be within a reasonable range of current market rates for the property.

9. Revenue Recognition

The Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers. Revenue is primarily generated through lease agreements and classified as Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. These agreements include retail shopping center unit leases; ground leases; ancillary leases or agreements, such as agreements with tenants for cellular towers, ATMs, and short-term or seasonal retail (e.g. Halloween or Christmas-related retail); and reciprocal easement

agreements. The agreements range in term from less than one year to 25 or more years, with certain agreements containing renewal options. These renewal options range from as little as one month to five or more years. The Company’s retail shopping center leases generally require tenants to pay a portion of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the Company’s properties.

Additionally, certain leases may require variable lease payments associated with percentage rents, which are calculated based on underlying tenant sales. The Company recognized $1.6 million and $1.3 million of income based on percentage rents for the three months ended September 30, 2023 and 2022, respectively. The Company recognized $7.3 million and $7.1 million of income based on percentage rents for the nine months ended September 30, 2023 and 2022, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations.

10. Leases

The Company periodically enters into agreements in which it is the lessee, including ground leases for shopping centers that it operates and office leases for administrative space. The agreements range in term from less than one year to 50 or more years, with certain agreements containing renewal options for up to an additional 100 years. Upon lease execution, the Company recognizes an operating lease right-of-use (“ROU”) asset and an operating lease liability based on the present value of the minimum lease payments over the non-cancelable lease term. As of September 30, 2023, the Company is not including any prospective renewal or termination options in its ROU assets or lease liabilities, as the exercise of such options is not reasonably certain. Certain agreements require the Company to pay a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the properties. These payments are not included in the calculation of the ROU asset or lease liability and are presented as variable lease costs. The following tables present additional information pertaining to the Company’s operating leases:


	Three Months Ended September 30,				Nine Months Ended September 30,
Supplemental Statements of Operations Information	2023		2022		2023		2022
Operating lease costs	$	1,410	$	1,446	$	4,227	$	4,497

Variable lease costs	88		—		350		163
Total lease costs	$	1,498	$	1,446	$	4,577	$	4,660

	Nine Months Ended September 30,
Supplemental Statements of Cash Flows Information	2023		2022
Operating cash outflows from operating leases	$	4,496	$	4,612
ROU assets obtained in exchange for operating lease liabilities	90		10,708
ROU asset reduction due to dispositions, held for sale, and lease modifications	(144)		(171)

Operating Lease Liabilities	As of September 30, 2023
Future minimum operating lease payments:
2023 (remaining three months)	$	1,512
2024	5,980
2025	5,670
2026	4,917
2027	2,701
2028	1,902
Thereafter	30,956
Total future minimum operating lease payments	53,638
Less: imputed interest	(17,040)
Less: lease liabilities held for sale	—
Operating lease liabilities	$	36,598

Supplemental Balance Sheets Information	As of September 30, 2023		As of December 31, 2022
Operating lease liabilities(1)(2)	$	36,598	$	39,923
ROU assets(1)(3)	32,739		35,754

(1)As of September 30, 2023 and December 31, 2022, the weighted average remaining lease term was 16.1 years and 16.0 years, respectively, and the weighted average discount rate was 4.44% and 4.43%, respectively.

(2)These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets.

(3)These amounts are included in Other assets on the Company’s unaudited Condensed Consolidated Balance Sheets.

As of September 30, 2023, there were no material leases that have been executed but not yet commenced.

11. Equity and Capital

ATM Program

In November 2022, the Company renewed its at-the-market equity offering program (the "ATM Program") through which the Company may sell, from time to time, up to an aggregate of $400.0 million of its common stock through sales agents. The ATM Program also provides that the Company may enter into forward contracts for shares of its common stock with forward sellers and forward purchasers. The ATM Program is scheduled to expire on November 1, 2025, unless earlier terminated or extended by the Company, sales agents, forward sellers, and forward purchasers. The ATM Program replaced the Company's prior at-the-market equity offering program (the "Prior ATM Program"), which was scheduled to expire on January 9, 2023. During the nine months ended September 30, 2023, the Company did not issue any shares of common stock under the ATM Program. During the nine months ended September 30, 2022, the Company issued 2.1 million shares of common stock under the Prior ATM Program at an average price per share of $25.40, for total gross proceeds of $53.9 million, excluding commissions. The Company incurred commissions of $0.7 million in conjunction with the Prior ATM Program for the nine months ended September 30, 2022. As of September 30, 2023, $400.0 million of common stock remained available for issuance under the ATM Program.

Share Repurchase Program

In November 2022, the Company renewed its share repurchase program (the "Repurchase Program") for up to $400.0 million of its common stock. The Repurchase Program is scheduled to expire on November 1, 2025, unless suspended or extended by the Company's board of directors. The Repurchase Program replaced the Company's prior share repurchase program (the "Prior Repurchase Program"), which was scheduled to expire on January 9, 2023. During the nine months ended September 30, 2023 and 2022, the Company did not repurchase any shares of common stock. As of September 30, 2023, the Repurchase Program had $400.0 million of available repurchase capacity.

Common Stock

In connection with the vesting of restricted stock units ("RSUs") under the Company’s equity-based compensation plan, the Company withholds shares to satisfy tax withholding obligations. During the nine months ended September 30, 2023 and 2022, the Company withheld 0.5 million and 0.4 million shares of its common stock, respectively.

Dividends and Distributions

During the three months ended September 30, 2023 and 2022, the Company's board of directors declared common stock dividends and OP Unit distributions of $0.26 per share/unit and $0.24 per share/unit, respectively. During the nine months ended September 30, 2023 and 2022, the board of directors declared common stock dividends and OP Unit distributions of $0.78 per share/unit and $0.72 per share/unit, respectively. As of September 30, 2023 and December 31, 2022, the Company had declared but unpaid common stock dividends and OP Unit distributions of $81.6 million and $81.6 million, respectively. These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets.

12. Stock Based Compensation

In February 2022, the Company's board of directors approved the 2022 Omnibus Incentive Plan (the "Plan") and in April 2022, the Company's stockholders approved the Plan. The Plan provides for a maximum of 10.0 million shares of the Company’s common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock, RSUs, OP Units, performance awards, and other stock-based awards. Prior to the approval of the Plan, awards were issued under the 2013 Omnibus Incentive Plan that the Company's board of directors approved in 2013.

During the nine months ended September 30, 2023 and the year ended December 31, 2022, the Company granted RSUs to certain employees. The RSUs are divided into multiple tranches, which are all subject to service-based vesting conditions. Certain tranches are also subject to performance-based or market-based criteria, which contain a threshold, target, above target, and maximum number of units that can be earned. The number of units actually earned for each tranche is determined based on performance during a specified performance period. Tranches that only have a service-based component can only earn a target number of units. The aggregate number of RSUs granted, assuming the achievement of target level performance, was 0.7 million and 0.7 million for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively, with vesting periods ranging from one to five years. For the service-based and performance-based RSU's granted, fair value is based on the Company's grant date stock price or the grant date stock price adjusted for dividend or dividend equivalent rights, when applicable. For the market-based RSUs granted, fair value is based on a Monte Carlo simulation model that assesses the probability of satisfying the market performance hurdles over the remainder of the performance period based on the Company’s historical common stock performance relative to the other companies within the FTSE Nareit Equity Shopping Centers Index as well as the following significant assumptions:


Assumption	Nine Months Ended September 30, 2023	Year Ended, December 31, 2022
Volatility	32.0% - 52.0%	27.0% - 51.0%
Weighted average risk-free interest rate	3.79% - 5.18%	1.08% - 1.39%
Weighted average common stock dividend yield	4.3% - 4.8%	3.8% - 4.6%

During the three months ended September 30, 2023 and 2022, the Company recognized $6.1 million and $6.6 million of equity compensation expense, respectively, of which $0.4 million and $0.5 million was capitalized, respectively. During the nine months ended September 30, 2023 and 2022, the Company recognized $15.7 million and $17.7 million of equity compensation expense, respectively, of which $1.1 million and $1.3 million was capitalized, respectively. These amounts are included in General and administrative expense on the Company’s unaudited Condensed Consolidated Statements of Operations. As of September 30, 2023, the Company had $22.8 million of total unrecognized compensation expense related to unvested stock compensation, which is expected to be recognized over a weighted average period of approximately 2.1 years.

13. Earnings per Share

Basic earnings per share ("EPS") is calculated by dividing net income attributable to the Company’s common stockholders, including any participating securities, by the weighted average number of shares outstanding for the period. Certain restricted shares issued pursuant to the Company’s share-based compensation program are considered participating securities, as such stockholders have rights to receive non-forfeitable dividends. Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Company’s common stock.

The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Computation of Basic Earnings Per Share:
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Non-forfeitable dividends on unvested restricted shares	(216)		(238)		(620)		(710)
Net income attributable to the Company’s common stockholders for basic earnings per share	$	63,520	$	79,503	$	231,770	$	246,328

Weighted average number shares outstanding – basic	301,007		300,213		300,955		299,626

Basic earnings per share attributable to the Company’s common stockholders:
Net income per share	$	0.21	$	0.26	$	0.77	$	0.82

Computation of Diluted Earnings Per Share:
Net income attributable to the Company’s common stockholders for diluted earnings per share	$	63,520	$	79,503	$	231,770	$	246,328

Weighted average shares outstanding – basic	301,007		300,213		300,955		299,626
Effect of dilutive securities:
Equity awards	1,504		1,128		1,492		1,158
Weighted average shares outstanding – diluted	302,511		301,341		302,447		300,784

Diluted earnings per share attributable to the Company’s common stockholders:
Net income per share	$	0.21	$	0.26	$	0.77	$	0.82

14. Earnings per Unit

Basic earnings per unit is calculated by dividing net income attributable to the Operating Partnership’s common unitholders, including any participating securities, by the weighted average number of partnership common units outstanding for the period. Certain restricted units issued pursuant to the Company’s share-based compensation program are considered participating securities, as such unitholders have rights to receive non-forfeitable dividends. Fully-diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Operating Partnership’s common units.

The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands, except per unit data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Computation of Basic Earnings Per Unit:
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Non-forfeitable dividends on unvested restricted units	(216)		(238)		(620)		(710)
Net income attributable to the Operating Partnership’s common units for basic earnings per unit	$	63,520	$	79,503	$	231,770	$	246,328

Weighted average number common units outstanding – basic	301,007		300,213		300,955		299,626

Basic earnings per unit attributable to the Operating Partnership’s common units:
Net income per unit	$	0.21	$	0.26	$	0.77	$	0.82

Computation of Diluted Earnings Per Unit:
Net income attributable to the Operating Partnership’s common units for diluted earnings per unit	$	63,520	$	79,503	$	231,770	$	246,328

Weighted average common units outstanding – basic	301,007		300,213		300,955		299,626
Effect of dilutive securities:
Equity awards	1,504		1,128		1,492		1,158
Weighted average common units outstanding – diluted	302,511		301,341		302,447		300,784

Diluted earnings per unit attributable to the Operating Partnership’s common units:
Net income per unit	$	0.21	$	0.26	$	0.77	$	0.82

15. Commitments and Contingencies

Legal Matters

The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, taking into account existing reserves, will have a material impact on the Company’s financial condition, operating results, or cash flows.

Environmental Matters

Under various federal, state, and local laws, ordinances, and regulations, the Company may be or become liable for the costs of removal or remediation of certain hazardous or toxic substances released on or in the Company’s properties or disposed of by the Company or its tenants, as well as certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). The Company maintains a reserve for currently known environmental matters and does not believe they will have a material impact on the Company’s financial condition, operating results, or cash flows. During the three and nine months ended September 30, 2023 and 2022, the Company did not incur any material governmental fines resulting from environmental matters.

16. Related-Party Transactions

As of September 30, 2023 and December 31, 2022, there were no material receivables from or payables to related parties. During the three and nine months ended September 30, 2023 and 2022, the Company did not engage in any material related-party transactions.

17. Subsequent Events

In preparing the unaudited Condensed Consolidated Financial Statements, the Company has evaluated events and transactions occurring after September 30, 2023 for recognition and/or disclosure purposes. Based on this evaluation, there were no subsequent events from September 30, 2023 through the date the financial statements were issued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto. Historical results and percentage relationships set forth in the unaudited Condensed Consolidated Financial Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations.

Executive Summary

Our Company

Brixmor Property Group Inc. and subsidiaries (collectively, “BPG”) is an internally-managed corporation that has elected to be taxed as a real estate investment trust (“REIT”). Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which BPG conducts substantially all of its operations and owns substantially all of its assets. BPG owns 100% of the limited liability company interests of BPG Subsidiary LLC (“BPG Sub”), which, in turn, is the sole member of Brixmor OP GP LLC (the “General Partner”), the sole general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, “we,” “our,” and “us” mean BPG and the Operating Partnership, collectively. We own and operate one of the largest publicly-traded open-air retail portfolios by gross leasable area (“GLA”) in the United States (“U.S.”), comprised primarily of community and neighborhood shopping centers. As of September 30, 2023, our portfolio was comprised of 364 shopping centers (the “Portfolio”) totaling approximately 65 million square feet of GLA. Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers. As of September 30, 2023, our three largest tenants by annualized base rent (“ABR”) were The TJX Companies, Inc. (“TJX”), The Kroger Co. (“Kroger”), and Burlington Stores, Inc. (“Burlington”). BPG has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws, commencing with our taxable year ended December 31, 2011, has maintained such requirements through our taxable year ended December 31, 2022, and intends to satisfy such requirements for subsequent taxable years.

Our primary objective is to maximize total returns to our stockholders through consistent, sustainable growth in cash flow. Our key strategies to achieve this objective include proactively managing our Portfolio to drive internal growth, pursuing value-enhancing reinvestment opportunities, and prudently executing on acquisition and disposition activity, while also maintaining a flexible capital structure positioned for growth. In addition, as we execute on our key strategies, we do so guided by our purpose-driven Corporate Responsibility strategy and our commitment to environmental, social, and governance issues.

We believe the following set of competitive advantages positions us to successfully execute on our key strategies:

•Expansive Retailer Relationships – We believe that the scale of our asset base and our nationwide footprint represent competitive advantages in supporting the growth objectives of the nation’s largest and most successful retailers. We believe that we are one of the largest landlords by GLA to TJX, Kroger, and Burlington, as well as a key landlord to most major grocers and retail category leaders. We believe that our strong relationships with leading retailers afford us unique insight into their strategies and priority access to their expansion plans.

•Fully-Integrated Operating Platform – We manage a fully-integrated operating platform, leveraging our national scope and demonstrating our commitment to operating with a strong regional and local presence. We provide our tenants with dedicated service through both our national accounts leasing team based in New York and our network of four regional offices in Atlanta, Chicago, Philadelphia, and San Diego, as well as our 12 leasing and property management satellite offices throughout the country. We believe that this structure enables us to obtain critical national market intelligence, while also benefiting from the regional and local expertise of our leasing and operations teams.

•Experienced Management – Senior members of our management team are seasoned real estate operators with extensive public company leadership experience. Our management team has deep industry knowledge and well-established relationships with retailers, brokers, and vendors through many years of operational and transactional experience, as well as significant capital markets capabilities and expertise in executing value-enhancing reinvestment opportunities.

Factors That May Influence Our Future Results

We derive our rental income primarily from base rent and expense reimbursements paid by tenants to us under existing leases at each of our properties. Expense reimbursements primarily consist of payments made by tenants to us for a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties.

Our ability to maintain or increase rental income is primarily dependent on our ability to maintain or increase rental rates, renew expiring leases, and/or lease available space. Increases in our property operating expenses, including repairs and maintenance, landscaping, snow removal, security, ground rent related to properties for which we are the lessee, utilities, insurance, real estate taxes, and various other costs, to the extent they are not reimbursed by tenants or offset by increases in rental income, will adversely impact our overall performance.

See “Forward-Looking Statements ” included elsewhere in this Quarterly Report on Form 10-Q for the factors that could affect our rental income and/or property operating expenses.

Leasing Highlights

As of September 30, 2023, billed and leased occupancy were 90.0% and 93.9%, respectively, as compared to 89.6% and 93.3%, respectively, as of September 30, 2022.

The following table summarizes our executed leasing activity for the three months ended September 30, 2023 and 2022 (dollars in thousands, except for per square foot (“PSF”) amounts):


For the Three Months Ended September 30, 2023
	Leases	GLA	New ABR PSF		Tenant Improvements and Allowances PSF		Third Party Leasing Commissions PSF		Rent Spread(1)
New, renewal and option leases	427	2,733,476	$	18.51	$	4.29	$	2.14	17.5	%
New and renewal leases	368	1,748,987	21.57		6.71		3.34		22.3	%
New leases	151	789,336	22.74		14.24		7.38		52.7	%
Renewal leases	217	959,651	20.61		0.52		0.02		12.3	%
Option leases	59	984,489	13.06		—		—		8.2	%

For the Three Months Ended September 30, 2022
	Leases	GLA	New ABR PSF		Tenant Improvements and Allowances PSF		Third Party Leasing Commissions PSF		Rent Spread(1)
New, renewal and option leases	417	2,791,073	$	17.09	$	4.91	$	1.62	10.9	%
New and renewal leases	360	1,748,497	19.26		7.83		2.59		14.2	%
New leases	146	661,587	21.20		17.80		6.72		32.2	%
Renewal leases	214	1,086,910	18.08		1.76		0.08		11.8	%
Option leases	57	1,042,576	13.45		—		—		5.8	%

(1) Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal or option leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months.

Excludes leases executed for terms of less than one year.

ABR PSF includes the GLA of lessee-owned leasehold improvements.

The following table summarizes our executed leasing activity for the nine months ended September 30, 2023 and 2022 (dollars in thousands, except for per square foot (“PSF”) amounts):


For the Nine Months Ended September 30, 2023
	Leases	GLA	New ABR PSF		Tenant Improvements and Allowances PSF		Third Party Leasing Commissions PSF		Rent Spread(1)
New, renewal and option leases	1,251	7,489,943	$	18.71	$	4.80	$	2.29	15.2	%
New and renewal leases	1,074	4,588,215	22.36		7.83		3.75		19.2	%
New leases	427	2,182,430	22.27		14.18		7.82		41.3	%
Renewal leases	647	2,405,785	22.44		2.07		0.05		13.1	%
Option leases	177	2,901,728	12.93		—		—		8.4	%

For the Nine Months Ended September 30, 2022
	Leases	GLA	New ABR PSF		Tenant Improvements and Allowances PSF		Third Party Leasing Commissions PSF		Rent Spread(1)
New, renewal and option leases	1,234	7,983,658	$	16.64	$	4.73	$	1.92	12.0	%
New and renewal leases	1,068	5,100,693	18.94		7.40		3.00		15.3	%
New leases	461	2,311,735	19.44		14.07		6.52		34.3	%
Renewal leases	607	2,788,958	18.52		1.87		0.09		11.1	%
Option leases	166	2,882,965	12.59		—		—		6.8	%

Excludes leases executed for terms of less than one year.

ABR PSF includes the GLA of lessee-owned leasehold improvements.

Acquisition Activity

•During the nine months ended September 30, 2023, we acquired one land parcel for an aggregate purchase price of $1.9 million, including transaction costs and closing credits.

•During the nine months ended September 30, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

Disposition Activity

•During the nine months ended September 30, 2023, we disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million, resulting in aggregate gain of $58.9 million and aggregate impairment of $6.1 million. In addition, during the nine months ended September 30, 2023, we disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in net gain of $0.1 million.

•During the nine months ended September 30, 2022, we disposed of 11 shopping centers and seven partial shopping centers for aggregate net proceeds of $168.2 million, resulting in aggregate gain of $58.2 million and aggregate impairment of $4.6 million. In addition, during the nine months ended September 30, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in net gain of $2.4 million.

Results of Operations

The results of operations discussion is combined for BPG and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.

Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022

Revenues (in thousands)


	Three Months Ended September 30,
	2023		2022		$ Change
Revenues
Rental income	$	307,118	$	304,643	$	2,475
Other revenues	196		102		94
Total revenues	$	307,314	$	304,745	$	2,569

Rental income

The increase in rental income for the three months ended September 30, 2023 of $2.5 million, as compared to the corresponding period in 2022, was due to an $8.2 million increase for assets owned for the full period, partially offset by a $5.7 million decrease due to net transaction activity. The increase for assets owned for the full period was due to (i) a $7.3 million increase in base rent; (ii) a $1.8 million increase in expense reimbursements; (iii) a $0.3 million increase associated with revenues deemed uncollectible; (iv) a $0.3 million increase in lease termination fees; and (v) a $0.3 million increase in percentage rents; partially offset by (vi) a $1.2 million decrease in straight-line rental income, net; (vii) a $0.3 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements; and (viii) a $0.3 million decrease in ancillary and other rental income. The $7.3 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 15.2% during the nine months ended September 30, 2023 and 12.7% during the year ended December 31, 2022, and an increase in weighted average billed occupancy. The $1.8 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy and reimbursable operating costs, net of decreases in reimbursable real estate taxes.

Other revenues

Other revenues remained generally consistent for the three months ended September 30, 2023 as compared to the corresponding period in 2022.

Operating Expenses (in thousands)


	Three Months Ended September 30,
	2023		2022		$ Change
Operating expenses
Operating costs	$	35,058	$	33,299	$	1,759
Real estate taxes	42,156		44,179		(2,023)
Depreciation and amortization	96,254		84,773		11,481

General and administrative	29,182		29,094		88
Total operating expenses	$	202,650	$	191,345	$	11,305

Operating costs

The increase in operating costs for the three months ended September 30, 2023 of $1.8 million, as compared to the corresponding period in 2022, was due to a $2.4 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance and insurance, partially offset by a $0.6 million decrease due to net transaction activity.

Real estate taxes

The decrease in real estate taxes for the three months ended September 30, 2023 of $2.0 million, as compared to the corresponding period in 2022, was due to a $1.3 million decrease in real estate taxes for assets owned for the full period, primarily due to an increase in favorable adjustments related to prior year assessments and an increase in real

estate tax refunds, partially offset by an increase in current year assessments, in addition to a $0.7 million decrease due to net transaction activity.

Depreciation and amortization

The increase in depreciation and amortization for the three months ended September 30, 2023 of $11.5 million, as compared to the corresponding period in 2022, was primarily due to a $12.6 million increase for assets owned for the full period, primarily due to an increase in accelerated depreciation and amortization related to tenant move-outs and capital expenditures, partially offset by a $1.1 million decrease attributable to net transaction activity.

General and administrative

General and administrative costs remained generally consistent for the three months ended September 30, 2023, as compared to the corresponding period in 2022.

During the three months ended September 30, 2023 and 2022, construction compensation costs of $4.7 million and $4.4 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.9 million and $0.7 million, respectively, and leasing commission costs of $1.9 million and $2.1 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)


	Three Months Ended September 30,
	2023		2022		$ Change
Other income (expense)
Dividends and interest	$	273	$	88	$	185
Interest expense	(47,364)		(48,726)		1,362
Gain on sale of real estate assets	6,712		15,768		(9,056)
Gain (loss) on extinguishment of debt, net	6		—		6
Other	(555)		(789)		234
Total other expense	$	(40,928)	$	(33,659)	$	(7,269)

Dividends and interest

The increase in dividends and interest for the three months ended September 30, 2023 of $0.2 million, as compared to the corresponding period in 2022 was primarily due to an increase in interest income.

Interest expense

The decrease in interest expense for the three months ended September 30, 2023 of $1.4 million, as compared to the corresponding period in 2022, was primarily due to lower overall debt obligations, partially offset by a higher weighted average interest rate.

Gain on sale of real estate assets

During the three months ended September 30, 2023, one shopping center and one partial shopping center were disposed of resulting in aggregate gain of $6.8 million. In addition, during the three months ended September 30, 2023, we resolved contingencies related to previously disposed assets, resulting in a net loss of $0.1 million. During the three months ended September 30, 2022, one shopping center and three partial shopping centers were disposed of resulting in aggregate gain of $13.5 million. In addition, during the three months ended September 30, 2022, we had land at one shopping center seized through eminent domain resulting in an aggregate gain of $2.3 million.

Other

The decrease in other expense for the three months ended September 30, 2023 of $0.2 million as compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.

Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

Revenues (in thousands)


	Nine Months Ended September 30,
	2023		2022		$ Change
Revenues
Rental income	$	927,440	$	908,903	$	18,537
Other revenues	1,111		602		509
Total revenues	$	928,551	$	909,505	$	19,046

Rental income

The increase in rental income for the nine months ended September 30, 2023 of $18.5 million, as compared to the corresponding period in 2022, was due to a $26.8 million increase for assets owned for the full period, partially offset by an $8.3 million decrease due to net transaction activity. The increase for assets owned for the full period was due to (i) a $25.5 million increase in base rent; (ii) an $11.4 million increase in expense reimbursements; (iii) a $1.1 million increase in lease termination fees; and (iv) a $0.2 million increase in percentage rents; partially offset by (v) a $9.4 million decrease associated with revenues deemed uncollectible; (vi) a $1.2 million decrease in straight-line rental income, net; (vii) a $0.5 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements; and (viii) a $0.3 million decrease in ancillary and other rental income. The $25.5 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 15.2% during the nine months ended September 30, 2023 and 12.7% during the year ended December 31, 2022, and an increase in weighted average billed occupancy. The $11.4 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy, reimbursable operating costs, and real estate taxes. The $9.4 million decrease associated with revenues deemed uncollectible was primarily attributable to reduced cash collections associated with amounts previously reserved.

Other revenues

The increase in other revenues for the nine months ended September 30, 2023 of $0.5 million, as compared to the corresponding period in 2022, was primarily due to an increase in tax increment financing income.

Operating Expenses (in thousands)


	Nine Months Ended September 30,
	2023		2022		$ Change
Operating expenses
Operating costs	$	106,658	$	102,592	$	4,066
Real estate taxes	130,556		128,123		2,433
Depreciation and amortization	272,807		254,132		18,675
Impairment of real estate assets	17,836		4,597		13,239
General and administrative	86,868		86,796		72
Total operating expenses	$	614,725	$	576,240	$	38,485

Operating costs

The increase in operating costs for the nine months ended September 30, 2023 of $4.1 million, as compared to the corresponding period in 2022, was due to a $5.7 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance, utilities, and insurance, partially offset by a $1.6 million decrease due to net transaction activity.

Real estate taxes

The increase in real estate taxes for the nine months ended September 30, 2023 of $2.4 million, as compared to the corresponding period in 2022, was due to a $1.9 million increase in real estate taxes due to net transaction activity, in addition to a $0.5 million increase in real estate taxes for assets owned for the full period, primarily due to an increase in current year assessments, partially offset by an increase in favorable adjustments related to prior year assessments and an increase in real estate tax refunds.

Depreciation and amortization

The increase in depreciation and amortization for the nine months ended September 30, 2023 of $18.7 million, as compared to the corresponding period in 2022, was primarily due to a $19.7 million increase for assets owned for the full period, primarily due to capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs, partially offset by a $1.0 million decrease attributable to net transaction activity.

Impairment of real estate assets

During the nine months ended September 30, 2023, aggregate impairment of $17.8 million was recognized on two shopping centers and two partial shopping centers, as a result of disposition activity, and one operating property. During the nine months ended September 30, 2022, aggregate impairment of $4.6 million was recognized on two shopping centers, as a result of disposition activity.

General and administrative

General and administrative costs remained generally consistent for the nine months ended September 30, 2023, as compared to the corresponding period in 2022.

During the nine months ended September 30, 2023 and 2022, construction compensation costs of $13.6 million and $12.9 million, respectively, were capitalized to building and improvements and leasing legal costs of $3.3 million and $3.1 million, respectively, and leasing commission costs of $5.9 million and $6.0 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)


	Nine Months Ended September 30,
	2023		2022		$ Change
Other income (expense)
Dividends and interest	$	345	$	198	$	147
Interest expense	(143,529)		(143,934)		405
Gain on sale of real estate assets	59,037		60,667		(1,630)
Gain (loss) on extinguishment of debt, net	4,356		(221)		4,577
Other	(1,645)		(2,937)		1,292
Total other income	$	(81,436)	$	(86,227)	$	4,791

Dividends and interest

The increase in dividends and interest for the nine months ended September 30, 2023 of $0.1 million, as compared to the corresponding period in 2022 was primarily due to an increase in interest income.

Interest expense

The decrease in interest expense for the nine months ended September 30, 2023 of $0.4 million, as compared to the corresponding period in 2022, was primarily due to an increase in capitalized interest.

Gain on sale of real estate assets

During the nine months ended September 30, 2023, seven shopping centers and six partial shopping centers were disposed of resulting in aggregate gain of $58.9 million. In addition, during the nine months ended September 30, 2023, we disposed of a non-operating asset and resolved contingencies relating to a previously disposed asset, resulting in net gain of $0.1 million. During the nine months ended September 30, 2022, nine shopping centers and seven partial shopping centers were disposed of resulting in aggregate gain of $58.2 million. In addition, during the nine months ended September 30, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain, resulting in aggregate net gain of $2.4 million.

Gain (loss) on extinguishment of debt, net

During the nine months ended September 30, 2023, we repurchased $199.6 million of the $500.0 million of our 2024 Notes then outstanding, resulting in a $4.4 million gain on extinguishment of debt. During the nine months ended September 30, 2022, we amended and restated our unsecured credit facility agreements (the "Unsecured

Credit Facility"), resulting in a $0.2 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

Other

The decrease in other expense for the nine months ended September 30, 2023 of $1.3 million, as compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.

Liquidity and Capital Resources

We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months and beyond for all anticipated uses, including all scheduled payments on our outstanding debt, current and anticipated tenant and other capital improvements, stockholder distributions to maintain our qualification as a REIT, and other obligations associated with conducting our business.

Our primary expected sources and uses of capital are as follows:

Sources

•cash and cash equivalent balances;

•operating cash flow;

•available borrowings under the Unsecured Credit Facility;

•issuance of long-term debt;

•dispositions; and

•issuance of equity securities.

Uses

•debt repayments;

•maintenance capital expenditures;

•leasing capital expenditures;

•dividend/distribution payments;

•value-enhancing reinvestment capital expenditures;

•acquisitions; and

•repurchases of equity securities.

We believe our capital structure provides us with the financial flexibility and capacity to fund our current capital needs as well as future growth opportunities. We generate significant operating cash flow and have access to multiple forms of external capital, including secured property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives. We have investment grade credit ratings from all three major credit rating agencies. Our Unsecured Credit Facility is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $300.0 million term loan facility, in addition to a $200.0 million delayed draw term loan, which was drawn on April 24, 2023 (together the "Term Loan Facility"). As of September 30, 2023, we had $1.26 billion of available liquidity, including $1.24 billion available under our Revolving Facility and $18.7 million of cash and cash equivalents and restricted cash. We intend to continue to enhance our financial and operational flexibility through periodic extensions of the duration of our debt.

Material Cash Requirements

Our expected material cash requirements for the twelve months ended September 30, 2024 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; and (iii) opportunistic expenditures.

Contractually Obligated Expenditures

The following table summarizes our debt maturities (excluding extension options), interest payment obligations, and obligations under non-cancelable operating leases (excluding renewal options), as of September 30, 2023 (dollars in millions):


Contractually Obligated Expenditures	Twelve Months Ended September 30, 2024		Thereafter
Debt maturities (1)	$	300.4	$	4,623.5
Interest payments (1)(2)	185.0		659.9
Operating leases	6.0		47.6
Total	$	491.4	$	5,331.0

(1) Amounts presented do not assume the issuance of new debt upon maturity of existing debt.

(2) Scheduled interest payments for variable rate loans are presented using rates (including the impact of interest rate swaps), as of September 30, 2023. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a further discussion of these and other factors that could impact interest payments.

Other Essential Expenditures

We incur certain essential expenditures in the ordinary course of business, such as common area expenses, utilities, insurance, real estate taxes, capital expenditures related to the maintenance of our properties, leasing capital expenditures, and corporate level expenses. The amount of common area expenses, utilities, and capital expenditures related to the maintenance of our properties that we incur depends on the scope of services that we provide, prevailing market rates, and the size and composition of our Portfolio. We carry comprehensive insurance to protect our Portfolio against various losses. The amount of insurance expense that we incur depends on the assessed values of our properties, prevailing market rates, and the size and composition of our Portfolio. We incur real estate taxes in the various jurisdictions in which we operate. The amount of real estate taxes that we incur depends on the assessed values of our properties, the tax rates assessed by various jurisdictions, and the size and composition of our Portfolio. Leasing capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions. The amount of leasing capital expenditures that we incur depends on the volume and nature of leasing activity. We incur corporate level expenses such as employee compensation costs, professional fees, corporate office rents, and other platform expenses. The amount of corporate level expenses that we incur depends on the size and composition of our Portfolio and platform and prevailing market wages and rates. Leases typically provide for the reimbursement of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties. However, costs that we incur generally do not decrease if revenue or occupancy decrease, and certain costs that we incur, such as corporate level expenses, are not typically reimbursed.

In order to continue to qualify as a REIT for federal income tax purposes, we must meet several organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. We intend to continue to satisfy these requirements and maintain our REIT status. Our board of directors evaluates our dividend on a quarterly basis, taking into account a variety of relevant factors, including REIT taxable income. The following table summarizes our dividend activity for the third and fourth quarters of 2023:


	Third Quarter 2023		Fourth Quarter 2023
Dividend declared per common share	$	0.2600	$	0.2725
Dividend declaration date	July 26, 2023		October 24, 2023
Dividend record date	October 3, 2023		January 3, 2024
Dividend payable date	October 16, 2023		January 16, 2024

Opportunistic Expenditures

We also utilize cash for opportunistic expenditures such as value-enhancing reinvestment and acquisition activity.

The amount of value-enhancing reinvestment capital expenditures that we incur depends on a variety of factors that may change from period to period, such as the number, total expected cost, and nature of value-enhancing

reinvestment projects that are underway. See “Improvements to and investments in real estate assets” below for further information regarding our in-process reinvestment projects and our pipeline of future redevelopment projects.

The amount of future acquisition expenditures depends on the availability of opportunities that further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base. Our acquisition strategy focuses on buying assets with strong growth potential that are located in our existing markets and will allow us to leverage our operational platform and expertise to create value. Our acquisition activity may include acquisitions of open-air shopping centers or non-owned anchor spaces, retail buildings, and/or outparcels at, or adjacent to, our existing shopping centers.

Our cash flow activities are summarized as follows (dollars in thousands):

Brixmor Property Group Inc.


	Nine Months Ended September 30,
	2023		2022		$ Change
Net cash provided by operating activities	$	453,512	$	441,160	$	12,352
Net cash used in investing activities	(93,022)		(474,479)		381,457
Net cash used in financing activities	(363,066)		(233,172)		(129,894)

Net change in cash, cash equivalents and restricted cash	(2,576)		(266,491)		263,915
Cash, cash equivalents and restricted cash at beginning of period	21,259		297,743		(276,484)
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	31,252	$	(12,569)

Brixmor Operating Partnership LP


	Nine Months Ended September 30,
	2023		2022		$ Change
Net cash provided by operating activities	$	453,512	$	441,160	$	12,352
Net cash used in investing activities	(93,022)		(474,479)		381,457
Net cash used in financing activities	(362,139)		(218,943)		(143,196)

Net change in cash, cash equivalents and restricted cash	(1,649)		(252,262)		250,613
Cash, cash equivalents and restricted cash at beginning of period	20,332		282,585		(262,253)
Cash, cash equivalents and restricted cash at end of period	$	18,683	$	30,323	$	(11,640)

Operating Activities

Net cash provided by operating activities primarily consists of cash inflows from tenant rental payments and expense reimbursements and cash outflows for property operating costs, real estate taxes, general and administrative expenses, and interest expense.

During the nine months ended September 30, 2023, our net cash provided by operating activities increased $12.4 million as compared to the corresponding period in 2022. The increase was primarily due to (i) an increase in same property net operating income; (ii) an increase from net working capital; and (iii) an increase in lease termination fees; partially offset by (iv) a decrease in net operating income due to net transaction activity and other non-same property net operating income; (v) an increase in cash outflows for general and administrative expense; and (vi) an increase in cash outflows for interest expense.

Investing Activities

Net cash used in investing activities is primarily impacted by the nature, timing, and magnitude of acquisition and disposition activity and improvements to and investments in our shopping centers, including capital expenditures associated with our value-enhancing reinvestment activity.

During the nine months ended September 30, 2023, our net cash used in investing activities decreased $381.5 million as compared to the corresponding period in 2022. The decrease was primarily due to (i) a decrease of $407.8 million in acquisitions of real estate assets and (ii) a decrease of $3.8 million in purchases of marketable securities, net of sales; partially offset by (iii) an increase of $21.3 million in improvements to and investments in real estate

assets; and (iv) a decrease of $8.8 million in net proceeds from sales of real estate assets.

Improvements to and investments in real estate assets

During the nine months ended September 30, 2023 and 2022, we expended $254.4 million and $233.1 million, respectively, on improvements to and investments in real estate assets. Included in these amounts are insurance proceeds of $0.5 million and $3.3 million, respectively, which were received during the nine months ended September 30, 2023 and 2022.

Maintenance capital expenditures represent costs to fund major replacements and betterments to our properties. Leasing related capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions. In addition, we evaluate our Portfolio on an ongoing basis to identify value-enhancing reinvestment opportunities. Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers and enhancing the overall merchandise mix and tenant quality of our Portfolio. As of September 30, 2023, we had 55 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $490.7 million, of which $263.6 million had been incurred as of September 30, 2023. In addition, we have identified a pipeline of future redevelopment projects aggregating over $900 million of potential capital investment, which we expect to execute over the coming years. We expect to fund these projects with cash and cash equivalents, net cash provided by operating activities, proceeds from sales of real estate assets, and/or proceeds from capital markets transactions.

Acquisitions of and proceeds from sales of real estate assets

We continue to evaluate the market for acquisition opportunities and we may acquire shopping centers when we believe strategic opportunities exist, to further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base. During the nine months ended September 30, 2023, we acquired one land parcel for an aggregate purchase price of $1.9 million, including transaction costs and closing credits. During the nine months ended September 30, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

We may also dispose of properties when we believe value has been maximized, where there is downside risk, or where we have limited ability or desire to build critical mass in a particular submarket. During the nine months ended September 30, 2023, we disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million. In addition, during the nine months ended September 30, 2023, we received aggregate net proceeds of $0.3 million related to a non-operating asset. During the nine months ended September 30, 2022, we disposed of 11 shopping centers and seven partial shopping centers for aggregate net proceeds of $168.2 million. In addition, during the nine months ended September 30, 2022, we had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million.

Financing Activities

Net cash used in financing activities is primarily impacted by the nature, timing, and magnitude of issuances and repurchases of debt and equity securities, as well as borrowings or principal payments associated with our outstanding indebtedness, including our Unsecured Credit Facility, and distributions made to our common stockholders.

During the nine months ended September 30, 2023, our net cash used in financing activities increased $129.9 million as compared to the corresponding period in 2022. The increase was primarily due to (i) a $64.2 million decrease in debt borrowings, net of repayments; (ii) a $53.1 million decrease in issuances of common stock; (iii) a $19.5 million increase in distributions to our common stockholders; and (iv) a $0.8 million increase in repurchases of common stock; partially offset by (v) a $7.7 million decrease in deferred financing and debt extinguishment costs.

Non-GAAP Performance Measures

We present the non-GAAP performance measures set forth below. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and

accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. Our computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance.

Funds From Operations

Nareit FFO (defined hereafter) is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. Nareit defines funds from operations (“FFO”) as net income (loss), calculated in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated joint ventures calculated to reflect FFO on the same basis.

Considering the nature of our business as a real estate owner and operator, we believe that Nareit FFO is useful to investors in measuring our operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets and impairment write-downs of certain real estate assets.

Our reconciliation of net income to Nareit FFO for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Depreciation and amortization related to real estate	95,160		83,712		269,714		250,991
Gain on sale of real estate assets	(6,712)		(15,768)		(59,037)		(60,667)
Impairment of real estate assets	—		—		17,836		4,597
Nareit FFO	$	152,184	$	147,685	$	460,903	$	441,959
Nareit FFO per diluted share	$	0.50	$	0.49	$	1.52	$	1.47
Weighted average diluted shares outstanding	302,511		301,341		302,447		300,784

Same Property Net Operating Income

Same property net operating income (“NOI”) is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. Same property NOI is calculated (using properties owned for the entirety of both periods and excluding properties under development and completed new development properties that have been stabilized for less than one year) as total property revenues (base rent, expense reimbursements, adjustments for revenues deemed uncollectible, ancillary and other rental income, percentage rents, and other revenues) less direct property operating expenses (operating costs and real estate taxes). Same property NOI excludes (i) lease termination fees, (ii) straight-line rental income, net, (iii) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (iv) straight-line ground rent expense, net, (v) income or expense associated with our captive insurance company, (vi) depreciation and amortization, (vii) impairment of real estate assets, (viii) general and administrative expense, and (ix) other income and expense (including interest expense and gain on sale of real estate assets).

Considering the nature of our business as a real estate owner and operator, we believe that NOI is useful to investors in measuring the operating performance of our portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of our properties, such as lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, straight-line ground rent expense, net, income or expense associated with our captive insurance company, depreciation and amortization, impairment of real estate assets, general and administrative expense, and other income and expense (including interest expense and gain on sale of real estate assets). We believe that same property NOI is also useful to investors because it further eliminates disparities in NOI by only including NOI of properties owned for the entirety of both periods presented and excluding properties under development and completed new development properties that have been stabilized for less than one year and

therefore provides a more consistent metric for comparing the operating performance of our real estate between periods.

Comparison of the Three and Nine Months Ended September 30, 2023 to the Three and Nine Months Ended September 30, 2022


	Three Months Ended September 30,									Nine Months Ended September 30,
	2023			2022			Change			2023			2022			Change
Number of properties	357			357			—			347			347			—
Percent billed	90.0		%	89.7		%	0.3		%	90.1		%	89.8		%	0.3		%
Percent leased	93.9		%	93.4		%	0.5		%	93.8		%	93.5		%	0.3		%

Revenues
Rental income	$	295,644		$	285,080		$	10,564		$	853,733		$	822,833		$	30,900
Other revenues	196			99			97			1,111			584			527
	295,840			285,179			10,661			854,844			823,417			31,427
Operating expenses
Operating costs	(33,983)			(32,287)			(1,696)			(100,391)			(95,061)			(5,330)
Real estate taxes	(41,705)			(42,885)			1,180			(119,086)			(118,506)			(580)
	(75,688)			(75,172)			(516)			(219,477)			(213,567)			(5,910)
Same property NOI	$	220,152		$	210,007		$	10,145		$	635,367		$	609,850		$	25,517

The following table provides a reconciliation of net income to same property NOI for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	63,736	$	79,741	$	232,390	$	247,038
Adjustments:
Non-same property NOI	(1,740)		(7,658)		(29,142)		(41,749)
Lease termination fees	(934)		(694)		(3,879)		(2,754)
Straight-line rental income, net	(5,088)		(6,393)		(16,510)		(17,883)
Accretion of below-market leases, net of amortization of above-market leases and tenant inducements	(2,178)		(2,517)		(6,414)		(6,721)
Straight-line ground rent expense, net	(8)		2		(25)		167
Depreciation and amortization	96,254		84,773		272,807		254,132
Impairment of real estate assets	—		—		17,836		4,597
General and administrative	29,182		29,094		86,868		86,796
Total other expense	40,928		33,659		81,436		86,227
Same property NOI	$	220,152	$	210,007	$	635,367	$	609,850

Inflation

Prior to 2021, inflation was low and had a minimal impact on our operating and financial performance; however, inflation has significantly increased over the last two years and may continue to be elevated or increase further. With respect to our shopping centers, our long-term leases generally contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay a portion of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, thereby reducing our exposure to increases in property operating expenses resulting from inflation; however, we have exposure to increases in certain non-reimbursable property operating expenses, including expenses incurred on vacant units. We believe that many of our existing rental rates are below current market rates for comparable space and that upon renewal or re-leasing, such rates may be increased to be consistent with, or closer to, current market rates, which may also offset certain non-reimbursed inflationary expense pressures. With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and have and may continue to enter into interest rate protection agreements that mitigate, but do not eliminate, the impact of changes in interest rates on our variable rate loans. With respect to general and administrative costs, we continually seek opportunities to offset inflationary cost pressures through routine

evaluations of our spending levels and through ongoing efforts to utilize technology to enhance our operational efficiency.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk disclosed in Item 7A of Part II of our annual report on Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

Controls and Procedures (Brixmor Property Group Inc.)

Evaluation of Disclosure Controls and Procedures

BPG maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. BPG’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, BPG’s principal executive officer, James M. Taylor, and principal financial officer, Angela M. Aman, concluded that BPG’s disclosure controls and procedures were effective as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in BPG’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2023 that have materially affected, or that are reasonably likely to materially affect, BPG’s internal control over financial reporting.

Controls and Procedures (Brixmor Operating Partnership LP)

Evaluation of Disclosure Controls and Procedures

The Operating Partnership maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The Operating Partnership’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Operating Partnership’s principal executive officer, James M. Taylor and principal financial officer, Angela M. Aman concluded that the Operating Partnership’s disclosure controls and procedures were effective as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2023 that have materially affected, or that are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The information contained under the heading “Legal Matters” in Note 15 – Commitments and Contingencies to our unaudited Condensed Consolidated Financial Statements in this report is incorporated by reference into this Item 1.

Item 1A. Risk Factors

In addition to the other information in this Quarterly Report on Form 10-Q, the risks described in our Annual Report on Form 10-K filed for the year ended December 31, 2022, in Part I, Item 1A, Risk Factors, and in our other filings with the SEC should be carefully considered. These factors may materially affect our financial condition, operating results and cash flows. There have been no material changes to the risk factors relating to the Company disclosed in our Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended September 30, 2023, the Company did not repurchase any shares of its common stock. As of September 30, 2023, the Company's repurchase program had $400.0 million of available repurchase capacity.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On August 31, 2023, Brian T. Finnegan, the Company's Senior Executive Vice President and Chief Operating Officer, executed a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act. The plan covers sales of up to an aggregate of 30,000 shares of the Company's common stock at price and volume thresholds and during specified trading periods between December 1, 2023 and December 31, 2024, in each case as set forth in the plan.

Item 6. Exhibits

The following documents are filed as exhibits to this report:


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed Herewith
10.1	Third Amendment to Employment Agreement, dated September 27, 2023, by and between Brixmor Property Group Inc. and Angela M. Aman	8-K	001-36160	9/29/2023	10.1	—
10.2	First Amendment to Employment Agreement, dated September 27, 2023, by and between Brixmor Property Group Inc. and Brian T. Finnegan	8-K	001-36160	9/29/2023	10.2	—
31.1	Brixmor Property Group Inc. Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
31.2	Brixmor Property Group Inc. Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
31.3	Brixmor Operating Partnership LP Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
31.4	Brixmor Operating Partnership LP Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
32.1	Brixmor Property Group Inc. Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
32.2	Brixmor Operating Partnership LP Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	—	x
101.INS	XBRL Instance Document	—	—	—	—	x
101.SCH	XBRL Taxonomy Extension Schema Document	—	—	—	—	x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	—	—	—	—	x
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	—	—	—	—	x

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Date of
Filing

Exhibit
Number

Filed
Herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

—

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

—

104

Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


	BRIXMOR PROPERTY GROUP INC.

Date: October 30, 2023	By:	/s/ James M. Taylor
		James M. Taylor
		Chief Executive Officer
		(Principal Executive Officer)

Date: October 30, 2023	By:	/s/ Angela Aman
		Angela Aman
		Chief Financial Officer and President
		(Principal Financial Officer)

Date: October 30, 2023	By:	/s/ Steven Gallagher
		Steven Gallagher
		Chief Accounting Officer
		(Principal Accounting Officer)


	BRIXMOR OPERATING PARTNERSHIP LP

	By:	Brixmor OP GP LLC, its general partner

	By:	BPG Subsidiary LLC, its sole member

Date: October 30, 2023	By:	/s/ James M. Taylor
		James M. Taylor
		Chief Executive Officer
		(Principal Executive Officer)

Date: October 30, 2023	By:	/s/ Angela Aman
		Angela Aman
		Chief Financial Officer and President
		(Principal Financial Officer)

Date: October 30, 2023	By:	/s/ Steven Gallagher
		Steven Gallagher
		Chief Accounting Officer
		(Principal Accounting Officer)

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Brixmor Operating Partnership 10-Q2023 Q3 Quarterly report

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