BPG(US:BRX)2025-07-29 15:02Financial Data and Key Metrics Changes - NAREIT FFO was $0.56 per share in the second quarter, driven by same property NOI growth of 3.8% despite a 260 basis point drag from tenant disruption [15][17] - The company expects to update its same property NOI growth guidance to 3.9% to 4.3% and increase FFO guidance to $2.22 to $2.25 [17] Business Line Data and Key Metrics Changes - Leasing activity included 1,700,000 square feet of new and renewal leases at a blended cash spread of 24%, with over 900,000 square feet of new leases at a 44% spread [10][11] - The average in-place annual base rent (ABR) reached a new record, with a signed but not yet commenced pool totaling $67 million [7][16] Market Data and Key Metrics Changes - The company reported a sequential occupancy growth to 94.2%, with small shop leasing reaching a new portfolio high of 91.2% [11][12] - The acquisition of La Centerra, a grocery-anchored lifestyle asset, is expected to drive significant traffic and enhance the portfolio's performance [8][32] Company Strategy and Development Direction - The company is focused on disciplined capital recycling, targeting lower growth assets for sale and redeploying proceeds into higher potential assets [8][9] - The strategy includes enhancing the portfolio through value-add projects and capturing opportunities from tenant disruptions [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumers and the strong demand for retail space, indicating a positive outlook for 2025 and beyond [13][14] - The company highlighted the importance of maintaining a strong credit profile and reducing exposure to at-risk tenants [24][25] Other Important Information - The company has a robust pipeline of identified projects worth several hundred million dollars, providing visibility on growth for the next several years [8] - The management emphasized the importance of capturing additional revenue through ancillary services and renegotiated agreements [37][41] Q&A Session Summary Question: About leasing in the quarter and future tenant disruption - Management noted strong leasing activity and expressed confidence in reaching a lease rate of 95% in the future, with a smaller watch list of at-risk tenants [20][24] Question: Rent collection and economic occupancy - Management indicated that rent commencements from backfills will accelerate base rent growth in the latter half of the year [26][27] Question: Opportunity at Lafayette and cap rate - The acquisition of La Centerra was highlighted as a classic example of value-added investing, with a cap rate in the low-6s and significant growth potential [30][33] Question: Same store NOI growth and other revenue drivers - Management explained that renegotiated agreements and backfilling vacant spaces contributed to the increase in other revenues [36][41] Question: Bad debt expense and leasing demand trends - Management expressed confidence in the underlying credit quality of the portfolio and noted that leasing demand remains strong despite potential headwinds [46][48] Question: Acquisition pipeline and competition - The company is focused on high-growth opportunities and remains disciplined in capital recycling while facing increased competition from private capital [72][74] Question: Future growth and tenant disruption - Management is optimistic about the portfolio's positioning and the potential for growth despite the possibility of additional tenant disruptions [106][107]