Phillips Edison & Company(US:PECO)2025-10-24 20:13Portfolio Overview - As of September 30, 2025, the company owned equity interests in 328 shopping centers, comprising approximately 36.7 million square feet across 31 states[88]. - The total square footage of the wholly-owned portfolio increased to 34,035 thousand square feet in 2025 from 32,902 thousand square feet in 2024, representing a growth of 3.4%[89]. - Leased occupancy for the total portfolio was 97.6% as of September 30, 2025, slightly down from 97.8% in the previous year[89]. - The average remaining lease term increased to 4.5 years in 2025 from 4.4 years in 2024[89]. - The percentage of ABR from omni-channel grocery-anchored shopping centers was 95.1% in 2025, down from 96.6% in 2024[89]. - Approximately 70% of the company's ABR is generated from neighbors providing necessity-based goods and services[101]. - The top 20 neighbors by ABR accounted for 30.4% of total ABR, with Kroger being the largest at $29.998 million, representing 5.5% of total ABR[102]. Financial Performance - The company's ABR (Annual Base Rent) rose to $537,067 thousand in 2025, up from $497,082 thousand in 2024, indicating an increase of 8.1%[89]. - Rental income for the three months ended September 30, 2025, increased by $16.5 million, or 10.2%, to $178.3 million compared to $161.8 million in 2024[105]. - Total revenues rose by $17.1 million, or 10.4%, to $182.7 million for the three months ended September 30, 2025[105]. - Net income attributable to stockholders increased by $13.1 million, or 112.8%, to $24.7 million for the three months ended September 30, 2025[105]. - Total revenues for the nine months ended September 30, 2025, increased by $50.4 million, or 10.3%, to $538.7 million compared to $488.3 million in 2024[111]. - Net income attributable to stockholders increased by $19.2 million, or 43.2%, reaching $63.8 million for the nine months ended September 30, 2025, compared to $44.5 million in 2024[111]. Expenses and Costs - Operating expenses decreased by $4.2 million, or 3.3%, to $130.8 million for the three months ended September 30, 2025[105]. - Operating expenses totaled $393.9 million, an increase of $30.8 million, or 8.5%, driven by higher property operating expenses and real estate taxes[111]. - General and administrative expenses increased by $3.7 million, or 10.9%, primarily due to growth initiatives and higher performance-based compensation[112]. - Total operating expenses for the three months ended September 30, 2025, were $43,875, an increase of $1,601, or 3.8%, from $42,274 in 2024[121]. Debt and Financing - The company issued $350 million of 5.250% senior notes due 2032 in June 2025, enhancing its capital structure[89]. - Interest expense, net increased by $3.5 million, or 14.2%, to $28.5 million due to increased debt outstanding[108]. - The weighted-average interest rate as of the end of the period was 4.4%[108]. - The company has a weighted-average term of debt of 5.3 years as of the end of the period[110]. - As of September 30, 2025, total debt obligations increased to $2,413.7 million from $2,137.3 million as of December 31, 2024, reflecting a growth of approximately 12.9%[133]. - Net debt as of September 30, 2025, was $2,451.7 million, up from $2,160.9 million as of December 31, 2024, representing a 13.4% increase[138]. - The net debt to Adjusted EBITDAre ratio increased to 5.3x as of September 30, 2025, compared to 5.0x as of December 31, 2024[138]. Capital Expenditures and Investments - Total capital expenditures for real estate during the nine months ended September 30, 2025, were $89.3 million, significantly higher than $48.7 million in the same period of 2024, marking an increase of 83.5%[140]. - The company acquired 11 properties for a total contract price of $280.8 million during the nine months ended September 30, 2025, compared to 8 properties for $203.4 million in 2024[143]. - Real estate acquisitions totaled $282.0 million for the nine months ended September 30, 2025, up from $205.0 million in the same period of 2024[153]. - Capital expenditures increased to $95.7 million during the nine months ended September 30, 2025, a rise of $40.1 million compared to the same period in 2024, primarily due to development activities[153]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $2.8 million to $5.8 million as of September 30, 2025[150]. - Net cash provided by operating activities was $252.1 million for the nine months ended September 30, 2025, a slight increase of 0.5% from $250.7 million in 2024[150]. - The company expects its current sources of liquidity to be sufficient to meet short- and long-term cash demands[129]. - The company entered into an ATM program allowing for the potential sale of up to $250 million in common stock, with approximately $1.7 million raised from the issuance of shares[130]. Other Notable Metrics - The company reported a portfolio retention rate that provides insight into its ability to retain tenants as leases approach expiration[84]. - The portfolio retention rate improved to 92.8% for the nine months ended September 30, 2025, compared to 89.3% in 2024[116]. - Same-Center NOI for the nine months ended September 30, 2025, reflects operating trends for 279 properties, highlighting occupancy levels and rental rates[118]. - Same-Center NOI for the three months ended September 30, 2025, was $115,478, reflecting a $3,696 increase, or 3.3%, from $111,782 in 2024[122]. - Nareit FFO attributable to stockholders and OP unit holders for the three months ended September 30, 2025, was $89,253, an increase from $81,554 in 2024[125]. - Core FFO attributable to stockholders and OP unit holders for the three months ended September 30, 2025, was $90,557, compared to $84,410 in 2024[125].