Brixmor Property (BRX) 1 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to the Brixmor Property Group Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Stacy Slater. you. Thank

begin. may You

Aman, and Chief call. all for will call With Chief Vice Finnegan, Chief President; Jim operator, Financial and and second and President Officer; Officer; today joining be Mark quarter also Q&A. Taylor, Brian Angela and Officer conference me Vice Executive Officer, Vice thank you, available President for Chief President, you Executive Brixmor's are Executive Revenue Thank Investment on Executive the Horgan,

Also, remind me may let risks begin, that filings, that no today to some we described SEC and based today we in assume future Before certain as assumptions inherent non-GAAP comments our everyone subject materially. obligation financial contain are results of our - and may measures. uncertainties update to We statements. statements forward-looking and will differ to on refer actual forward-looking certain are any

and our the Further and portion these our these the Investor website. measures of of in available of are Relations our to information use earnings disclosure results on reconciliations measures supplemental regarding release GAAP

we of two person. call, questions on the to that per ask Given the limit number one you participants or kindly your

requeue. If regarding you questions quarter, the have please additional

At pleasure introduce this to time, Jim it's Taylor. my

morning, good and Stacy, you, Thank everyone.

that this basis results platform once Our again matter. quarter demonstrate rent and

As better and plan importantly, this opportunity tenants the to long-awaited in our tenant for transformational value-added setting outperformance. disruption to at future continuing bring providing us up drive better rents, us

spreads continue small year-over-year XXX,XXX occupancy of we leasing an ROI $XX.XX high where be rent disciplined still we nearly capital high quarter average square our of again We we on up bringing in a rents as activity. with our record recaptured net failures, foot, a lease high in as And this X.X% in-place new set demonstrate, a once drive to to basis. foot, effective records. $XX.XX of and realized a to with shop that we rate all-time space feet Consider grew XX.X% overall platform new associated tenant

Importantly, we're returns. to disruption in not rents drive only growth leveraging this and

centers see in value restaurants, trend in the We more are shop demand. which can also traffic, to of but grocery, very in health, only small bringing segments quick-serve home. also well, the to our in not beauty We continues and follow-on impacts grocery, well-located of terms specialty vibrant our uses apparel,

And drive as ROI. attractive we

We are also improving the cap centers terms applied substantially rates. the in of value of impacted

over consider our expect you when new deals our a leasing with for signed Foods, Sprouts, we like fact, we Joe's, Whole with others. centers stores In ALDI increase and ABR Publix, pipeline, XX% forward grocery Trader anchor from as to tenants

it Speaking forward build, of pipeline, our leasing as Brian continues discuss. to rapidly will

top allow will growth continues leases pipeline which did signed, quarter into of in that top end commencements rent rent at as ABR continue to Those stood that Angela of $XX.X with minute. commence deliver will commenced as we our not the the of discuss And a line but contributing at this to basis pool us million rent quarter at points. convert XXX will to sector, base just

began we deliver During reinvestments, an XX% bringing million incremental the highly return. continued since total over to quarter, accretive to we $XXX our at

our grew in million including $XX Roosevelt Philadelphia in in at reinvestment in-process also We Jersey. specialty Middletown adding pipeline in grocers new New projects, Mall with Plaza

the and reinvestment on these growth Importantly, as and through a occupancy returns we've follow-on centers demonstrated, projects impacted. have flywheel at effect our also rate

opportunities importantly, cash years, next and will $XXX rising flow through is continue investment we flows growth that, and by driven of us million self-funded own rate includes environment. even ROI our that drive control. the allow to several additional in for over Remember, a in pipeline Beyond plan shadow our cash to free and attractive

free to pricing ago. seeing opportunistically XX the pay harvesting us, cash less remain acquisition now to coming flow. opportunities begin build same quarters through From than back believe we the to retained in discipline as off dry I as meaningfully and months recently acquisitions the we assets on holding as assets are an coming were priced through disciplined, that continuing perspective, powder external and will growth noncore

our Importantly, and assets we are tenant come to returns. deliver these where compelling can to there. value-added leverage platform More relationships

and give that Finally, stakeholders drive the I'd community to are like and exceptional they team continuing the truly to out so of center who Brixmor expectations, to to fronts, us a our to shout purpose all in our delivering exceed doing, continues owning the creating centers of serve. across towards value

of in provide strength I'll Now additional centers. will tenant be turn Brian, who on to Brian? to color our the the demand over call

Jim, Thanks, and good morning, everyone.

the depth not our highest results we to tenant in to our highlighted, only but during best-in-class evident Jim our forward broad be is achieved. operators in as quarter, continue pipeline the the leasing ever rents in demand attract of at we've As centers

on and renewal executed we highest square year. past in XXX new totaling of number new quarter, executed This leases leases X.X the feet, and the renewal million

this within as the Ross, new activity were retail such tenants with in TJX, Below. Included Five top open-air Burlington, and Chick-fil-A leases

tenants new backfilling several a square foot XX,XXX to quarter, with during including box in lease and repair center we concept. the for the the Houston showroom Tesla, exciting new portfolio addition, Tesla the In added suburbs company's first

also this our new capture team with as XX.X%. in below-market renewal continued with activity spreads of and leases the to Our well embedded upside

during a quarter our of with reflecting ABR XX.X%, small increase ABR. square at new record quarter versus the lease XX% larger our foot over eighth new of were of leasing XX%, $XX.XX per shop mix lease the a spreads in-place and representing spreads lease consecutive New

to execution in the renewal to is XXX The is desire XX.X%, of a this capitalized the which in XX-month average. Brixmor transformation tenants The strength spreads, our in our basis how was our trailing portfolio. points on they above portfolio remain consistent higher and the rate demonstrated also of is leasing the team have overall and driving environment testament for

at Bed that to quarter the were to either with to Bed continue or continue we top the two-thirds at XX% space to in as during of our we our vacancy on well, to the back progress occupancy with the make We XX% on operators grow quarter. on consistent least tenant rent assumed specifically heights, the are portfolio space Bath bankrupt approximately communicated out-leasing space took last open-air Bath leased spreads new

expect XXXX online expected primarily provides disruption We better at to as we come majority back tenant to tenant This of much in a with are opportunity for great the tenants spaces. higher this single negotiating lease to income users these rents. us

the of with had being in in Looking ever new in portfolio, supply the to The more by us are the our we've than sustainable forward, years than three legal currently anchor resiliency lack along a growth. rent transformed in we've Brixmor new environment completely negotiated and had. pipeline more forward of we excellent put position an with leases leasing encouraged over long-term pipeline, drive

I'll to Angela. call that, hand With the over

Thanks, Brian, good morning. and

address on I'm accretively the to pleased to report the quarter NAREIT strength $X.XX NOI current quarter same-property tenant of quickly driven we in FFO another environment X.X%. growth by capitalize second the continued share per was and of disruption. of execution recent as diluted

contributed rent recent points basis this Base related to of quarter XX XXX bankruptcies. drag growth points to despite approximately same-property tenant growth a basis NOI

and XX basis other addition, expense contributed income basis. on rents percentage points combined a In reimbursements, and net ancillary

basis primarily moderation the XXX detracted previously due uncollectible amounts. collections of from out-of-period ongoing NOI of points to seemed reserved revenue anticipated, same As property growth,

comparison of were pleased the during highlighted we any during difficult in XXXX materially commenced other year our signed, pool. higher As quarter the than not quarter, experience XXXX. the but continue significant last second the most We out-of-period creating velocity to with quarter period collections in yet remain within

the $XX representing quarter, of the million approximately from newly million added we representing leases, rent base second executed During leases pool. while commencing nearly $XX annualized

As year. we the a XX, expect record of million result, million $XX signed X.X annualized for the June square pool but annualized $XX base of rent million of or million a square which remainder of commence base totaled not yet to at commenced during X.X rent, feet this feet high

XXX,XXX of from portfolio. commencements second more Christmas David's Morning we occupancy than square expected additional These offset embedded in of & harvest Bridal Tuesday loss Tree half year the Beyond, the and rent feet our as below-market an basis Bath the in Shops, Bed will

positioned and sheet XXXX. $XXX plan of debt-to-EBITDA total debt our remains debt, unencumbered year-end balanced through support maturities Our fully X.X of to only fixed balance rate million liquidity billion well $X.X times, XXX% with business of

our and revenues rent our a for X.X% guidance XXXX NOI at of growth terms for same-property uncollectible expectations outlook, of range to lower raised base forward range. improved deemed we end have to In the the X.X%, reflecting of

revenues on the points. for revenue range Our XX total year assumptions seemed points to of a prior versus to basis to XX XX basis collectible range have the same-property of for XXX full been modified of

while income points the XXX our addition, of In of approximately reflects recovery bankruptcy from activity. anticipated guidance Approximately lost announced NOI experienced year-over-year related range disruption have is rent or points or rejections now basis accommodate same-property remainder the basis impact occurred or recently related additional will during announced to XXXX. XXX been midpoint and store the of be may lease XXX to-date, to that closures that

have range We for share. XXXX $X.XX NAREIT $X.XX FFO our a raised of to guidance also per diluted to

growth quarter, the rental same-property of increase revised into expense. this at factored the and items, GAAP across including interest $X.XX quarter G&A quarter's gain debt other NOI assumptions As $X.XX raise on guidance in line was variety extinguishment guidance this the our adjustments reflects, last change and low FFO a of end noncash

Q&A. over operator I'll with for the And turn call that, to the

Capital Markets. Thomas Please Instructions] [Operator Todd you. go ahead. Thank First question KeyBanc is with

the just today about to I to of you're ask appetite market in deploy talk of What's bit yields to in like Hi. the what back product pricing either your back Thanks. assets in the capital new Jim, higher market? the can to Good today more change question, on that environment coming to about little wanted IRRs of or a some around comments this favorable first with coming investments? pricing. you that underwriting And morning. investment company's new equates light at terms

the little bit, to Mark back. just to maybe a see we the assets the that but Yes. by returns I'll going in be are coming let it's comment available driven table, that set

drive basically returns. density, through privately better held where our So, we be really outsized lease-up take will to what are national can and tenanting, leveraging those typically on IRRs assets drive assets focused we relationships,

ultimately of terms acquire that capital, rate assets pricing cost them they're places where higher starting the where of move, accretively. solely we even it's believe to move In to environment, by price. going can Todd, But this those driven, in to be higher we

- which we'll just constrained the expect as tenant of environment moving by level terms asset is as seeing we to in the financing, disciplined price, capital some in being Mark? we So, as movement encouraged out. requirements, by what lack are of tenants the remain we're see well or us occasioned of credit

somewhat continue I'd I'd low, willing see more to starting is we're to but What time, market. volumes Yes. to real add sellers the be say meet

starts show to our that over a more As pricing a on last from seeing biggest you're to the really high sense deemed And Jim out mentioned, probably years, from the this make hit releasing value. from seeing those assets to we're settle few hit core assets, biggest perspective, at value the those perspective.

You what we're in asked interesting piece more see for see in think bit add into IRR. expect double-digit I low the assets we say, to seeing the growth yield deals, would other today, high And single-digit, is We we'll be $XX $XX million. IRRs larger that and yield a that can about million acquiring. underwrite to to opportunities the about we're unlevered starting we deals given

here. kind opportunity from some higher in growth of those there is and some good think that larger show pocket of yields deals opportunities there We a

or to come more hopefully next quarter So, the in so.

pipeline spend That's of quarter. And And seeing and size, lack increased we to Are to projects demand there see that your helpful. any given might you redevelopment assets value are Okay. good further one-off like more Or to opportunities affect maybe separately, continue that then better during a pretty build you're there, environment what that anything expect seeing, sort sounds transact? vis-à-vis, for you portfolios then you pipeline acquisitions? that space? to is seeing? you're the available the And enhancement accelerate leasing of these of should

of some the accretive on part with compelling the Bed XX% return Bath most bankrupt of terms frankly, highly within we recapture only opportunities this for some own redevelopment of that the those REIT space accelerating to within And obviously, is, in opportunities XX% of boxes. of control what's seeing, where We're ROI and We our still spreads, can pipeline. not example, some Yes. projects. drive

with soft my comments, vibrant backfill I otherwise a that rate Bed applied goods be in Bath when as highlighted grocer would retailer. the with you But specialty cap a a more

portfolios, assets, we terms too. single seeing and But some larger In the driven of are market, what we the of that think transaction is be, returns the can going we and deliver. type of going we to to we're think seeing most the it's are small be opportunities where opportunity by really

do own we of Because opportunity great control. importantly, lot we have in what and a

capital the So for think decisions, us as wanting I opportunities. not for allocation way we're our we good is news

think about really and own has make we we what as external So it of to sense growth, control. light in

Okay. Thank you.

You bet.

Next Markets. question, Capital Please Juan BMO go with Sanabria ahead.

morning. Maybe Angela. question Good a Hi. for

from How main On improved quarter flowing rate debt you've the driver about vacant the $X.XX FFO half? to-date. the debt the in base second think results gain? should occupancy that temporarily? to bad decel that assumptions through the implied is And here that for for coming given kind second of is run that the stripping back we How much the from out

Thanks, Juan. Yes.

the third XXX,XXX currently activity. a into to the quarter, square I quarter remarks, from bankruptcy back As mostly in mentioned but like expecting something bit in feet fourth little the announced come my we're

Christmas Shops, Morning but David's commenced square year signed, X.X Bath, We of Tuesday second that's half well. over as and have, then do feet to in Tree the Bed commence the pipeline, So million the about not Bridal. expected

attrition course expirations, as normal good lease of So from through the some second to position, grow sort occupancy half a think, natural in year we even with the well. of we're

So, we that. about feel good

In of gain second to quarter. relates component $X.XXX couple was $X.XX, deceleration, the things per the that's it terms note the of about FFO as is the on One That a extinguishment. share. debt a of I'd

income reestablishment $X.XX just were, some straight again, under We also share. had a rental line that

together things range. the using our out of the actuals in plus for year, gets second to and to half about first quarter, $X.XXX two of So second annualize about those were stripping the the you those midpoint that half

come as might tenant we From of unanticipated about there, high activity bankruptcy any disruption on much well in at talked we the be the dependent the low going out very end the year. end we to whether or the just half see as second is

brand of And occupancy signed, we've paying. it commencements. that we're And a continually into good as pool but bringing timing It's remarks, her job, rent Angela in on rent getting is commenced. highlighted that not commenced focused done something and pretty

or And hearing question, seeing curious just what guys on pharmacies. some my you second are from the of

Walgreens seen headcount, CVS out to of some You've cut cut came was said he and going today kind headcount. corporate

and just feeling we kind with discussions business how the going curious space and So that expect pharmacies just and on latest that usage might you're of about changes forward?

is Brian. Juan. this Yes, Hi,

those if you locations real think pharmacy we with Aid line. recently. look the some portfolio, in been We attractive at might one very estate CVS that of upside, I across particularly Ulta the or Rite that older have of we've backfilled got them have older locations some like on

smaller some for seen have pharmacies You units too. look of the

So, their we Walgreens locations a executed for in couple Texas concept. smaller of

high-profile the of that that outparcels look some you I those in kind really portfolio. think if that they they the the pad across most the are XXXXs some of on expanding, focused have of at of have, locations early were we

few which boxes. some after purchased did extent we Aid Rite of the would Walgreens So, a experience to the be closures, there

feel We demand for those about overall. the really good

estate. changing their in thinking certainly we upside So, like good some overall, as in terms they're dynamics have space. about our But we pharmacy how of feel pretty said, we real attractive

much. Thank you very

You bet.

Ki question, ahead. Truist Please Bin Securities. Next Kim with go

Thanks.

was? what the was including remainder to I that's not XX how back budgeted the going your are XXX known just like basis to points, bad what evolved think projections and the you year? reserve remind Can by us debt move-outs, that reserve. for of XQ Just it the

Right. Yes.

- pretty was in XXX much guidance XX our you for during that The longer-term line take our pandemic. some basis guidance out when points. the XX XX historical average That's uncollectible current to for of So XX points. with to the prior seemed revenue basis the disruption

going So, average we to net that kind a for out with think on of the basis we're historical in do year, line come number. for this

points We're range the On low basis, below end about of that. at to basis XX within year-to-date pool basis bit same-store quarter. a closer in year-to-date. the the We XX about running little second a points were that we're

run end in towards the second based of guidance of revised been be slightly a So that rate to the imply but and we're historically. we've on within half where good the year, does actually going that lower feel higher the

just question. so you or the forth? look City tenants of Michaels you And might current Joanne, like bankruptcies upside a some that at to deal Big of potential high-level Great. what any to you compared Bath, at-risk When look Party commentary high-level and as on share like Bed had slate challenges the Lots, with such can the or

team tenant talked to We're and I addressing think Yes. would years, we done names, is not our Bath there you we've job proactively on a four but that talking prior Bath of get spaces. back individual ahead watch on I be the Ki keep today. list. fantastic Bed calls, Bin. took there. think mean, of into over a the are Many And space. this went Hi, on names Bed Brian. We about would has this as about

So gotten bankruptcy well. attractive very the ahead those. of leasing, Tuesday ahead as look we and of seen we've as We of the we've Morning got ahead

look we as certainly we opportunities. looking those are So at out,

recapturing of terms We so. overall, I the aggressive of And the availability feel we where in in rents, to have we mean, been do pretty space good. have terms

in are $X the over line years. change rents that three rents are those think, I next here with and expiring

$XX been those a we've between leases and $XX And signing foot.

in with Bath space space, thing for box how there, box bidding some retailers you our So, the much just today competition across tight see what you've the Bed is and out, watch-list the in for portfolio. as it's auction terms environment at of is the what other I'd saw on tenancy point seen of you the upside that look pretty we And at well.

get feel extent do tenants back the in of confident to here few better rents. a pretty backfilling for we that the So, are on quickly the at higher names them those with boxes watch-list we

Okay. you. Thank

Goldman Burrows go Caitlin Please with question, Sachs. Next ahead.

Hi. lease small occupancy. Good at morning everyone. shop XX.X%. a on Maybe It's record

So for you what's kind of of vacant occupancy for kind what's ultimately, been longer of path be description means that give and frictional what Maybe that quickly? and over when small vacancy can time? consider shop availability, XX% process any plus that of occupancy you to overall in the replaced

because for couple in appreciate really I important highlighting growth pipeline, this and of hundred we Yes, platform, a reinvestment for part you're have the an our facades question, drag we on points larger anchors occupancy In lease active doing replacing particular. fully lever assets within where on deliver basis those of we're reinvestments we spaces we'll or that as the reinvestments. doing expect or that

has And when experience small the pick only but XX%, the small it's growth occupancy, projects pickup points. shop can several XX% shop been the the our our that we've in in rate hundred substantially fact, In up spaces in basis and reinvestment we occupancy by XX%, center. not be improved

So, reserve. you we if in will, have that growth,

thing The other think transform is to continue about, to this as portfolio. we

terms we there. run and hundred have more basis We'll continue small occupancy, couple to a shop in of than points to see new of set records we

So an important it is growth lever.

As growth tired I vibrant anchor you mentioned soft or replace it's a in - to flywheel a use. my of goods specialty grocery a somewhat remarks, with effect

that benefit the You spaces you throughout those even don't see impact the property, directly.

we're strategy to vacant that. on of to our we're something projects And very, highlight occupancy. is that. reinvestment focused keeping want portfolio spaces managing our for growth, speaks it not I So,

sense. it. Got the And back Makes to acquisition topic. maybe just

thinking a debt at guess, is the certain about leverage maybe X.X that times. that or like To cash, think certain retain size, that? I at an but up now how extent opportunity, dispositions would look identify you about were over funding we just to until amount, how you a when you're So

noncore capital as And cash dispositions as at harvest We're to disciplined, standpoint always mind lever to we going to from not investment flow some we Well, make continue the is, obviously, capital first, our of responsibly then, it. to asset look up. and we'll a overall to be opportunity relative our what free a do, decision assets. to fund sheet. to We're continue balance going cost

Thanks.

You bet.

ahead. Mailman Craig Please Citi. with question, go Next

bit. kind current I yield went kind cost Mark on putting just the you you're of evaluating kind How know to much versus long-term? yields of IRR accretion are on Jim, I I'm these. in versus guys. versus that there. and of the the of guys side piece and wanted acquisition follow-up just on you going the longer-term balancing capital opportunity a weight Hi, But the year curious little through as

market right? It's opportunities That's looking a a In really on visible great question. the other because parcels also having the opportunities. And we of to very be densify of our our are understanding particular and lot, words, center, add that. And our we're not spec of can focused where because uses that going in we're But the to markets tenant where understanding, and that can returns. understanding flow, drive demand yield. site, in grow we're cash other in-place to is how in we importantly, for rent we out

years. it's return, that very three five yes, also really, going the growth focus And but to within opportunities highly in within a visible first on

look think you past guess. If anybody's it that, much becomes I

underwriting you rents that where or achieved Acquisitions and done our about exceeded think in of returns. as we've been thinking or and consistent. has overall overlay and have Shoppes you'll you our we very historically, California terms So out what actually pattern Brea, and of in Granada growth Benita like see sort

furnace. about just we it our evident, more see don't as it's And to value-added we're think going for competitive. not as if the opportunity, not So, fuel be

that seeing we environment, in this and the to of for you consider is yield we it to encouraging it. expect us find place becomes where upfront to that a pricing things logical that Stay us We'll speak to remain the moving but see, tuned. disciplined. One are

getting risk people talking you was clearly there's guys just in XX pop limited five kind guys more curious just themselves the how kind looking dollar years, And but some or given are the Brian I'm of manage just that anchor that every rent of spaces, retailers know of looking I you anchor pipeline troubles kind gears, you up versus have. of off-price verticals? about that their switching how to Then just balance the other to helpful. That's last How given between going that portfolio at supply, forward? of diversification

in a have of and more do as a diversified laser-focused something tenants any tenants We And diversified tenant part we about and our going It's very, constituting have most great don't diversification business sector. we question really We with. that think we those significant want about any forward, make the one to we're the tenant of we on quality base, rent. think credit decisions. as obviously do

done So that Because also but particular the we're decisions. location. not using and successful also ever it's of the their and more tenants, a a team, productive going how just tenant be. do before understand we've to quality not we're tenant, making of be a data by how to it's in is decision as also really than about going they just in credit underwriting make results, to a are of growth, our the creditworthiness stability led we which We Angela you but see the those credit lot

outperformance going forward. the series, the outperformed the long also, of continued top quality. time through we of our those a to they I things Are have at But be our going So, you you going crucial high that part about. a the tenancy of rate? to if and shock at to credit to types Do likelihood they're going going can improvement renew over higher drive it's just It's think, the we see sales? of look a they're that part And you in pandemic. are think good a renew why

you. Thank Great.

You bet.

Greg McGinniss Scotiabank. with go question, Next Please ahead.

including that just or tenants the of provide Hi, some and leases leases morning. more of good are leases at process, that on you won those new auction the assumed LOIs? color signing and number bankruptcy Bed Bath Could specific tenants outcome

This is Greg. Brian. Sure,

boxes assumed nine Burlington. were here had one end taking remaining we assumed by quarter. plus the at back six by quarter. We're cost the the was So, third of in Two

back to boxes We Northeast about, just depth overall has piggyback we're took the been what for I the in And seeing demand that of as on encouraging. one also talking just box Jim mean, very was well.

in space. of a see fitness. competing see signed this with sector, outside in home that, We've deal top seeing the Tesla operators of boxes of grocery I one you'll the one like sector. for are last operators We off-price operators think operators We And mentioned specialty lease on quarter, our sporting the been week the box in with goods the space. first that you that, wellness

Bath about the encouraged and we're that Bed see back. space So the all on what we we space really overall, so far bankrupt very took

mean I quickly done Tuesday the with has the Five team addressing Sports job of a likes JD Ulta. fantastic and Morning Below and the

as taken, depth with we've on been continue of we're portfolio. and the the overall, to getting of space that this bring some back, So that. have types proactively encouraged to we we're communicate the able into pretty you'll of And see us tenants

tenants occupancy? pursuing optimization might from And Are Holdings. there to other both thanks. occupancy be store when to about thinking Great, Sally one place then point, half over plans that for potential then a loss bad the back debt aside of that any as the opposed you credit concerns Beauty months? or next is in in year, leased And XX mentioned headwind clarify occupancy the growing and

part. the constantly first to again, take I into can tenants, individual tenants. monitoring get I but we're not Greg, mean,

Our watch list is credit. not just

And their are tenants the if Our space, that some back shop is some looking in What demand. the watch you list at we also but at depth of an store fitness. seen though, boutique is anchors, on pulling just on small hit incredible look of we've particularly openings. of

mall-native on we to anchors into as that we're get to portfolio, portfolio, all of at backfill if at more to depth side, getting we there bring low mentioned, as look And you there's a still reinvest in continue the significant attracting the that's the we demand look back. in small may QSR we Jim you restaurants, any If XXs. the as to shop retailers see closures the continue that occupancy

year-end. we in to pipeline I feel third on, banker Angela of good tenants. we that have, occupancy headwinds by terms as we long-term, in those are here with facing hit some potential a grow mean, the look, declines, trajectory But occupancy occupancy the quarter from

think strong our near highlighted, right. about NOI the this pipeline, The that's the to portfolio and I term. the over we build I about ability both continue the were as occupancy flow-through of occupancy feel But same-property very and Yes, leased to transformation specifically and continued growth. the made Brian comments build to higher push about

Great. Thanks the time. for

bet. You

Next of America. Spector Please with go Bank Jeff ahead. question,

Thank is I guess, saying are there and know few the years to follow-up shops your space want quick and it anchors shop. that changes small up held the on a shift Great. the to you on guess, that mix on over space a Maybe between a like almost bit conversation mix. better small earlier than I a expected Jim, certain shops? feels from it you. small anchor every analysis, I would for confirm, small a years, just basically to you lot have right more anchor

center. drive question centers us follow-on allow and our It really great to It's great needed in and that small the a of anchors shops of the other depends to best on the generally We like that what's growth. a junior anchors, particular question submarket. also mix have

also bumps the You terms in growth, both in the need shops, consistent intrinsic get rent more but small of you annual regional the anchor. embedded national and

look really we at asset-by-asset you But have So, I think overall, decision. great the a it's when mix. portfolio

shops comes we'll into I junior on pretty will like. returns, decisions downside facade, really a in It's of asset-based small of industrial small into It's based anchor. the make on to in basically one HVAC class, building the our got a you've particular and a anchors and the junior back. space the where asset roof power, on And consolidate a shop simple with demand market great which flexibilities similarly

the to and So, to serve center you optimize right. community particular mix get the a have the ability

you. thinking about And over clearly bankruptcies. today, concern again, slowing. Thank leasing some the second, there's then on I'm let's some Okay. And just, say, and all remarks the

than higher clarify, worse in go a for it to expectations, bit a year, next year Or we is - if your as Just flagging on maybe the still the BKC about with bit expected? of more are is it again, they higher? And you say, kind let's it's again, in line? back important line December, the to are or think is we

over growth really to year, impact portfolio has of Yes. on number the we've I from think as and the I on clearly that bankruptcy mean NOI this same-property course explicit guidance it given relates improved. the activity

into was on guidance points. tightened our We've this original that XXX a points So, quarter. drag basis, basis year-over-year a basis XXX

names the or David's sort up or Beyond about bucket, and Bridal, that some that been Tuesday make following Tree Shops Bed known time. which and monitoring situations we've for we're of Morning think and includes I talking Bath bankruptcy & Christmas

there's a nothing's for surprises filings continued those we in second that within year, a not really the recognize seen additional of the So materialized pool. that of we potential that haven't lot but last half the have to And over quarter.

overall on has improved clearly the So, bankruptcy front. guidance

Great. Okay.

if confirm. How on on How to, compare are just XX you year I six commencements then over months? or confirm last, about to it next could does schedule? wanted Just let's how say, six are commencements. to And ago a happening commencements - thinking ago? the months And

which of not into earlier second we've to periods, well. just really some with the those have the we're online continue accelerate we on but commence leases actually mean, pleased been in commencements did Yes. which to to the as continue coming time, degree to able quarter we I

I $X think million to into some commencements pulling expected our this expectations $X.X the on third fourth of outperformed quarter leases, to forward million, weren't by year. commence that until we and just the

tenants optimize pretty get been recognize couple the has efficiencies So years and that's quickly. operating trend stable and work open more last over process a really the to in and we to sort as of of order

As ABR not in first time, XXXX. accelerate open year. X.X continuing remarks, $XX online million focus but to just tenants got on of I half even coming prepared the of getting And I'm part those commencements continue some mentioned the on feet. square in Its about those to we of we've will expected the in my second commencements million and of

Great. Thank you.

Thanks.

ahead. Dori question, Fargo. Lynn with Kesten Wells Next go Please

the improvements shop Thanks. a Good of any Have, you morning. seen notable small slowing or within collections of timing within late? rent

the across looking rates small at merchandise anchor consistent to collections We have versus at our not. eight quarters. different The has last categories, shop very stayed portfolio, over six really looking

really that continuing see to we're So, deterioration. hold point to up, any can't and pleased trend to

XX given we total of recognized full portfolio our points of the had you the guidance which about basis that we've my - revenue comments, the low end at expectations to allowed year. below deemed it's year-to-date to I'd also in point and look basis, earlier a really in was uncollectible for on amount us when tighten the the

completion, on your Okay. I And million to expectations, shadow just developments pipeline, leanings? any, then $XXX - your maybe pipeline, regional return I you compare think don't know, said time can you existing to these

today. it's our between of are and have lease ripens, leases to of path to into reason a leases where signing have the rolling, you things very pesky you the and able And comes we're we XX% mark that if continue compelling. that due. opportunity equally place anchor shadow is rolling are called our as are view rents we that our at it expiries tap It to returns look these be today. But pipeline where gives clear as in it over The those

got that not of capital I One substantial we've that think other largely is things the pre-leased. is until appreciate to we're those projects committing important

So, as economic coming be, all-weather an might it's not We're environment, it taking strategy. really the risk. whatever really about you substantial think

we've So, towards them. the working opportunities, we're identified

projects this and really the it in us Bed driven leases that when quarter several couple allow a of years represents reflect to by when Bath that like Things pipeline, part some pipeline, that. we forward the the of of take a added we control and pull expire into of can some forward, of space. And

see very a on marks So, anchor for can pipeline that embedded is you it in based rent. our it us truly visible are and the

Thanks. Okay.

ahead. go Powell Anthony with Barclays. question, Next Please

spreads. there side Hi. down quarter? in shift quarter, question new the spread they be but strong They a in Is lease on a aware on of were guess especially. terms mix morning. either the lease on to the anything in of A were sequentially I comps Good or

Brian. quarter. highest leases We the a higher We rents of the market. about of issue. is sign team's feel leasing still leases good at ability But my did we during ahead that, in about our percentage to that that talked ABR. we very mix remarks our ever to shop in-place it XX% this really had small long-term a was bring have, Yes, Anthony, opening I

on a single those leases anchor As as call, times out $X look been digits and $XX over of we've over high just we this three got signing couple the highlighted years, between expiring - we've we've in and $XX.

to So long-term, lease to ability feel good continue we about drive growth. new our

some the You this fluctuations to given due But quarter. in may was quarter, see mix. really it a

pretty as the maybe basis XXX year-over-year. one with growth, What's could think split rent quarters Okay. bankruptcies on releasing? between above tenant you in and the rent that That's points base And deal stay you And occupancy more X% next strong. there? Thanks. and few growth do these the number

if you guide the sort probably look full the at year rent I at basis base range midpoint mean for points. Yes. of of is about our XXX

get muted really that's first really through impact are impact have you any which by the of impact we a the the as I quarter pointed didn't expecting back on year. deceleration say out, back would that's quarter. of of is, So, you these - One driven the of us to two some coming things. into in situations, as half vacancy that some bankruptcy the the second and more

of part certainly that's it. So

year-over-year quarter out, rent ramp The is third fourth would XXXX. that contribution when of between there. a just other I had the was base factor you and the growth There as about think in point we substantial

you just point contribution at comparison a XXX period. midpoint rent. from the it of gets is of So a challenging sort the more to base basis of range again, more some like That

to net the outside would within basis growth activity. that - on a points, say give contribution, of that occupancy relates or a on basis net it's basis point XXX I about basis XXX take bankruptcy for

driving performance course we're growth. rest is that full The year. to the the really of degree rent increasing some which outsized over the definitely clearly, of So build occupancy is

Thank you.

You bet.

Next question, St. Haendel

Juste ahead. with go Mizuho. Please

Good Hi. morning.

Good morning.

First half I on the back appreciate you, color Angela, question, for the ABR year. the the expected in maybe of

you starting we But about ABR to can the FAS in of a a the mentioned XXX if quarterly million. in potential any bit be recent good growth BKs. need near term as you you start making more And get portfolio's think $XX.X from for light thinking on there? color Thanks. I impact I there's was hoping point

in Nothing of the to at XXX terms FAS Yes. really to this related note point impact bankruptcies.

think, that the XX-Q no we to in the from bankrupt a can back to On had that a outliers I sense some expect XXX of you of the gives real you of quarterly but provide foot ties square to terms FAS the that that balance space kind XXX,XXX if for I perspective. we basis, number. that we back say, of what in disclosure all at expect come look year,

of that bankruptcy on million translates loss quarter. the That about we in as into in quarter third quarter basis and gave $X.X have ABR second the situation. related I would get will the to into QX. earlier been of occupancy terms That in expected recognized QX, be in full quarterly lost a

I'm fill curious higher certainly improved of on has to years. if and industry will less site of outlined, that and couple the steadily But CapEx last that occupancy, And more the CapEx item. the absolute leasing helping you big in percentage and perhaps NOI and velocity, boxes the Okay. start in the grown recent then when line

your thinking near some we Thanks. how maybe on or expectations CapEx should thoughts So about be term?

in better. we came saw was make look the An when opportunity we centers to

certainly saw increasing years, in So foot. us CapEx earlier the you per

we seeing As this CapEx decline get the expect recurring given a on through centers. the we already made it, basis the we've program, we're to improvements and to

where The within show I rents. other area effective to continue net discipline we think is

we our which practice. And you actually not net show is rents, effective common

in it at you're not spreads, the be, and driving, at look ROI I much but terms of how just look we're what you've really should understand other got TAs got giving to you've think because capital. to to

with. really to we've our drive that approached discipline to the So, question in ROI and basis given about given I rent ability high capital good our feel environment, continue that this

Thank me. from it you. That's

Mueller JPMorgan. ahead. Next Please question, go with Mike

pipeline, hi. scale? Yes, shadow reinvestment is return Orlando million any looking on projects Curious, the like it? the pipeline compared how or And $XXX if smaller more it within Or just to there are Point in Rosevelt scale in it, larger the current expectations you're that returns? does

their are them phase returns larger returns, that's - projects. returns I some incremental projects, And larger capital mix. low is We because some The the double-digit think showing you it's single-digit, have high not with a Mike. manage continue to our everybody of risk. do And incremental are. to It's we what at important,

subsequent And rents frankly, in better we even we drive that phases. find through phasing

projects larger which of some Point are initial there there, like in phases started already So, we've many Orlando.

Yes.

up Just break note, $XXX that minor in Mike, by future $XXX that redevelopment disclosure pipeline. projects million projects. to between that we we provide list some the And project, redevelopment make projects down supplemental redevelopment of and that do million major the

So portfolio of get think a haven't project, larger the from the disclosure. in I can opportunities some given specific are by where expected sense of we you that amounts while dollar

it. Got

you. Thank Okay.

go Van Next with question, Floris Dijkum Compass Point. ahead. Please

Hi, Floris.

lower question one a me, Jim, meaningful take historically indication Remind the now the because what in guys your redeveloped, more so to your can Hi, where getting of a it significant shop redeveloped you and should occupancy average is to us your your portfolio shop again once shop been assets you things occupancy be going occupancy. have have of a back portion that's small exciting is that forward. for opportunity

years the delivering. few of project a within typically mid-XXs to low It's

some deliver typically, upon the see anchors Then, shop the we and vacant we overall we as basis the we'll - we small execute go hundred see let the several points redevelopment. reinvestment. of So as of improvement deliver

XXX, a implies it? way left upside, XX.X%, XXX right basis that or that points low XX%, think shop. still - to in it's Is about your I it's about potential the mean, take So read

going so precise, think Yes, to it's we're not range. we be but that in

sort leased just math a is redevelopment Jim did actually we of occupancy of when build The projects where talking stand from occupancy is occupancy small the that shop you about Floris, note, just you Yes. stabilized today. in and some I - would the compares also versus number perspective build XX.X%. the

within we pool shop small on So, lot opportunity stand occupancy note that I the a build would to there's today. where relative of

biggest that I XXs of grocery-anchored, positive. higher. and spreads Thanks. mean, that mean I in that shop And property biggest you're Rosevelt, should some I although of now be - or rents become getting are if, that then in will valuable big rent - place very or are the - your the that, shop like the the maybe recall, a noticed still in I properties obviously, average relatively couple low, projects most

with guess - and I larger residential expand offload a maybe you a about And So an to little large component opportunities see? at growth opportunity the assets But local a exciting can also you if that partner potentially these some that the talk would or so it's on look bit site. developer? growth Mesa? of on you Mira And

Well, let question of me that take the last part first.

my did six we Maryland, instincts as to return. else are the Whether development We build in and add where additional across to not like that that entitled. additional uses, in would opportunities let or Mira could most circumstances, have working College a directly, it we several land density portfolio value harvest Mesa Park, pursue we that somebody get and type entitled will the we're

I to think that's to maximize the value. for us way -

projects, includes launching first larger Sprouts. phase, we're terms Roosevelt, which mentioned In the you of

We to have opportunities leasing and ready densification were exciting there launch. some rapidly that additional getting

bringing rate, a but So, big Dallas, outside value we're of as mentioned, you projects in also of a creation where terms site large Wynnewood density, like target. in both

in or an into have center compelling older other to uses a to lineup Davis, add Joe's. a opportunity the bringing UC really shopping well-located great we existing We're Trader very Davis, where

momentum. them typically, earlier, mentioned So, we leasing leveraging the and across have the I phases, where, portfolio, several that projects them in execute like as deliver we'll

the it to that to entitled. ability of But capital sense it upgrade complementary value you may harvest as add risk versus the typically, do to And development. relates in make the math, density. we'll taking The uses, tenancy, then get when work to those

you. Thank

bet. You

Connor with Next Please question, ahead. Mitchell Piper go Sandler.

Hi. pulling for Bilerman, a I'm Alex. It's so Connor. asking actually

two So questions.

and similar First tenant's rates get? ability perspective, to are obviously, insurance? insurance property property the own insurance tenant the issues business From we're with about their insurance well-known is or off, will business type on issues. insurance that issues operation we're not insurance, insurance there affecting of a solely reading business Or the get that tenants all are on

Brian. is this Alex,

tenants any heard haven't We insurance. access talk about ability to

think hasn't team about hasn't availability from up of the look we from on getting Florida, could terms ahead look, gone and in impacted some some you side, have it platform is of really of of the up, at a perspective, yet. come of country, but particularly tenant rates our in insurance really the understanding parts think I but our and well be and those what a standpoint increases some property that insurance

Haendel's going to Okay. And then on question cash margins. back

question way. this ask the me Let

a and full is your always going and under occupancy, near cash you're that gets the is cash near the matter going full whatever increase. you up that to As Or see occupancy reinvestment? naturally that the increase? for portfolio you small-scale generating flow just It's by the cash after it be gets cash, flow redeployed. space doing net redevelopment won't do So company leases save because that, is will market that really getting way, up used it that

we're we're No, than we that increase sooner high and projects, the single-digit, those net recommencing them investing cash flow budgeted. delivering should continue to what returns, at incremental low we're double-digit have and actually

off impact capital. the cash And flow XXX were see of line really you assets with what very XXX of discipline to with in or our flows. pleased is I'm are follow-on our reflecting cash that a XXX So, portfolio that

that load. in occupancy also that brings as our referring improve CapEx recurring is obviously to addition the was center, occurs recovery what to at recurring program that I upon you capital And your down reinvestment the rates drive

to of our So three net contribute growth to flow. in all those continue things cash

Thank Okay. you, Jim.

You bet.

with Tsai ahead. Jefferies. go Linda Please question, Next

Hi.

seen debt half might we next closures the head specific bad see closures bad guidance in year debt second of function the you into - the while second industry the improved your And cadence of retailer as versus the I implies a as in first building half. second more guidance, of to half, this think historically, was Or year? first half. bad and debt Do there anything this half you year? have more the overall building

late year. of summer tenants historical course fall in periods. work the I the think over concentration back-to-school that back is I holiday right bankruptcy seen and the We've evened as you cycles more or the filings activity build after look over of if mean, really last for couple to inventory out of the bankruptcy holidays

have you seen have the than year bankruptcies later And so, more, you in or years XX ago. would XX

as businesses lots these a interest We're of different of the the costs maintaining, different thoughtful days, kinds environment think and stress lots I are year-to-date. including for given below that you as sectors. of across of we a out, complexities approach think, of look second level running the pointed debt I bad end of all But little low guidance half year. on at bit in the we that, the

particular And then size space more is demand? across depth in there seeing terms demand small of where the a you're shops, of

number Yes. category, if look X,XXX, space, a say in a it's that little in kind square-foot would fitness they've sure. from of a for tenant X,XXX exciting added square probably the we've in-line is from health feet restaurant, bit boutique desserts of that's QSR a to locations. wellness, specialty smaller Brian. this Crumbl across the portfolio that I operators, just one Linda, whether X,XXX mean, like really outparcel been Cookies, and smaller you I at is

to shops parcels pretty But range, then overall, and it's of out that think in So specific the small well for two we've I size thinking X,XXX pleased. if one say for you're been and X,XXX inline. a as to I'd

Thanks.

are There closing you. questions. the to I turn Stacy Slater Thank no over floor for to further like remarks. would

your Thanks, everyone. summer. of Enjoy the rest

teleconference. today's concludes This

this your at time, thank lines participation. your disconnect you for and may You