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BPG(BRX) - 2022 Q2 - Earnings Call Transcript
BPGBPG(US:BRX)2022-08-02 19:10

Financial Data and Key Metrics Changes - Nareit FFO was $0.49 per share in Q2 2022, driven by same property NOI growth of 6.7% [18] - Base rent growth contributed 430 basis points to same property NOI growth this quarter, with a 90-basis point acceleration from the previous quarter [19] - Overall average in-place ABR increased to $15.90 per foot, with an average net effective rent of $16.91 per foot on new leases [7][8] Business Line Data and Key Metrics Changes - Nearly 2 million square feet of new and renewal leases were executed at a cash rent of $18.79, with a blended spread of 14.6% [6] - Small shop occupancy reached a record of 87.7%, while overall occupancy grew to 92.5% [8][22] - The spread between lease and billed occupancy remains at 350 basis points, with a total signed but not commenced pool increasing to $54 million at a blended rate of $19.20 per square foot [23][24] Market Data and Key Metrics Changes - Traffic to centers has averaged in the mid to high single digits compared to 2019, indicating strong demand [9] - The company continues to attract top retailers, with strong leasing activity observed in various sectors including value apparel and specialty grocery [28][35] Company Strategy and Development Direction - The company is focused on a value-add strategy that has shown resilience and outperformance, positioning it well for both strong and weak market environments [12] - Plans to be a net seller of smaller non-core assets while maintaining liquidity for potential acquisitions in a volatile market [15][16] - Ongoing reinvestment pipeline is expected to generate follow-on value through increased occupancy and market rates [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite potential economic disruptions, supported by a strong pipeline of leases and ongoing discussions with tenants [9][42] - The company anticipates same property NOI growth expectations to increase from 3% to a range of 4.5% to 6% for 2022 [26] - Management highlighted the importance of proactive expense management to navigate inflationary pressures [45] Other Important Information - The company has over $1.2 billion of liquidity and no debt maturities until mid-2024, providing financial flexibility [25] - The ongoing execution of the reinvestment pipeline has delivered significant returns, with an incremental return of 11% on $30 million of reinvestment delivered during the quarter [10] Q&A Session Summary Question: Is leasing appetite in the third quarter unchanged despite inflationary pressure? - Management remains encouraged by leasing activity and strong demand from core retailers, with a 17% increase in the forward legal pipeline compared to the previous year [28] Question: Can you provide insights on the appetite for small shops? - There is strong demand from local tenants, particularly in the restaurant space, with local operators making up about 17% of ABR [30] Question: Can you elaborate on being a net seller in the back half of the year? - The company expects to be net sellers of smaller non-core assets while remaining opportunistic in the current market [37] Question: What is the outlook for revenues deemed uncollectible? - While collections from prior periods are expected to moderate, the company anticipates a return to long-term historical levels for reserve numbers [78] Question: What is the expected impact of redevelopment on traffic levels? - Redevelopments have led to significant traffic increases, with some centers experiencing double-digit growth post-redevelopment [86]