Financial Performance - Same Property NOI increased by 33% for the three months ended June 30, 2025, reaching $144104 million, compared to $139512 million in 2024[88] - Same Property NOI increased by 32% for the six months ended June 30, 2025, reaching $287903 million, compared to $279038 million in 2024[88] - Net income attributable to common shareholders was $110318 million for the three months ended June 30, 2025, compared to a loss of $48638 million in 2024[88] - Net income attributable to common shareholders was $134048 million for the six months ended June 30, 2025, compared to a loss of $34482 million in 2024[88] - NAREIT FFO attributable to common shareholders was $111499 million for the three months ended June 30, 2025, compared to $115541 million in 2024[90] - NAREIT FFO attributable to common shareholders was $231816 million for the six months ended June 30, 2025, compared to $226559 million in 2024[90] - Adjusted EBITDA annualized reached $590690 million[93] Portfolio and Transactions - YTD 2025 transaction activity shows acquisitions of $4766 million at a 65% effective yield and dispositions of $2584 million at a 65% yield, resulting in net transaction activity of +$2182 million[35] - The signed-not-open (SNO) pipeline increased to $316 million, with 37% from anchor tenants and 63% from shop tenants[21] - 88% of the SNO pipeline is from the same property NOI pool, and 12% is from the non-same property NOI pool[21]

Financial Data and Key Metrics Changes - The company reported a solid second quarter with core FFO per share exceeding the midpoint of guidance by $0.07, driven by better same property operations and lower operating expenses [12][4] - Full year core FFO per share guidance was increased by $0.10 to $15.91, reflecting improved same property revenue growth and reduced expenses [13][4] - Same property NOI is expected to grow 3.1% at the midpoint, a 40 basis points improvement from original guidance [14] Business Line Data and Key Metrics Changes - The second quarter saw a 3% blended rate growth for the same store portfolio, with Northern California and Seattle leading at 3.8% and 3.7% respectively, while Southern California lagged at 2% [5][4] - Los Angeles experienced a challenging environment with only 1.3% blended rent growth due to elevated supply deliveries and soft demand [6][4] - The suburban markets of San Mateo and San Jose outperformed with blended rate growth of 5.6% and 4.4% respectively [5] Market Data and Key Metrics Changes - The company expects modest U.S. GDP and job growth, with a stable job environment on the West Coast [8][4] - The transaction market for West Coast multifamily properties remains healthy, with deal volumes slightly higher in the second quarter compared to the previous year [10][4] - Average cap rates for institutional quality assets have remained in the mid-4% range, with some transactions in Northern California occurring in the low 4% range [10][4] Company Strategy and Development Direction - The company plans to maintain disciplined capital allocation by funding acquisitions with select dispositions, aiming to optimize risk-adjusted returns [11][4] - The focus is on fee simple acquisitions relative to cost of capital, with a strategic shift towards stabilized multifamily assets [82][4] - The company is also targeting a reduced size of the structured finance book, aiming for it to be less than 4% of core FFO by year-end [15][4] Management's Comments on Operating Environment and Future Outlook - Management noted that the softness in the macro economy is impacting demand, particularly in Southern California, which mirrors the broader U.S. economy [21][4] - The company anticipates a decline in supply deliveries in the second half of the year, which could improve the leasing environment [22][4] - Infrastructure investments related to the World Cup and Olympics are expected to enhance economic activity in Los Angeles over the next few years [6][4] Other Important Information - The company executed a $300 million delayed draw term loan and expanded its line of credit to $1.5 billion, enhancing balance sheet flexibility [16][4] - Preferred equity redemptions are expected to be backend loaded, impacting sequential core FFO growth [15][4] Q&A Session Summary Question: What drove the weaker blended pricing in Los Angeles? - Management indicated that the underperformance was due to heavier supply in the first half and slow delinquency recovery, not related to fire ordinances [19][4] Question: Can you elaborate on Northern California's performance? - Management noted strength in Northern California with job postings gradually increasing, and the seasonal curve performing slightly better than expected [24][4] Question: What are the expectations for concessions in LA? - Concessions in LA remain elevated compared to the rest of the portfolio, slightly higher than the previous year [44][4] Question: How does the commercial paper program compare to the revolver? - The commercial paper program offers about 70 basis points savings compared to the line of credit, used similarly as a temporary bridge to permanent financing [45][4] Question: What is the expected cadence of earnings from the structured investment book? - The structured finance investments book is expected to decrease significantly over the next few quarters, with repayments anticipated to reduce the book to $200-$250 million by the end of 2026 [97][4] Question: What are the implications of the recent CEQA reform? - Management views the CEQA reform as net positive, potentially encouraging development, although limited near-term impact is expected due to existing economic challenges [101][4]

Core Insights - Brixmor Property Group Inc. reported record small shop occupancy and the highest new lease average base rent (ABR) in its history, indicating strong leasing performance and tenant demand [1][2] - The company updated its 2025 Nareit Funds From Operations (FFO) per diluted share expectations to a range of $2.22 - $2.25, up from $2.19 - $2.24, and same property net operating income (NOI) growth expectations to 3.90% - 4.30% from 3.50% - 4.50% [6][14] Financial Highlights - For the three months ended June 30, 2025, net income attributable to Brixmor was $85.1 million, or $0.28 per diluted share, compared to $70.1 million, or $0.23 per diluted share for the same period in 2024 [6][27] - Nareit FFO for the same period was $171.5 million, or $0.56 per diluted share, compared to $163.8 million, or $0.54 per diluted share in 2024 [6][27] - The company declared a quarterly cash dividend of $0.2875 per common share, equivalent to $1.15 per annum, payable on October 15, 2025 [3] Portfolio and Investment Activity - Brixmor executed 1.7 million square feet of new and renewal leases with rent spreads on comparable space of 24.2%, including 0.9 million square feet of new leases with rent spreads of 43.8% [6][7] - The company achieved a total leased occupancy of 94.2%, with anchor leased occupancy at 95.6% and record small shop leased occupancy at 91.2% [6][7] - Brixmor commenced $14.5 million of annualized base rent and reported a total signed but not yet commenced new lease population of 3.2 million square feet, representing $67.1 million of annualized base rent [6][7] Acquisitions and Dispositions - The company completed $223.0 million in acquisitions, including the recent acquisition of LaCenterra At Cinco Ranch for $223.0 million, a grocery-anchored lifestyle center in Houston [6][7] - Brixmor also completed $22.4 million in dispositions during the reporting period [6][14] Capital Structure and Guidance - As of June 30, 2025, Brixmor had $1.4 billion in liquidity and a net principal debt to adjusted EBITDA ratio of 5.5x for the current quarter annualized [14][17] - The company expects revenues deemed uncollectible to total 75 - 110 basis points of total expected revenues in 2025 [14]