BPG(US:BRX)2025-09-09 20:02Financial Data and Key Metrics Changes - The company expects to grow at 4% this year on the NOI line despite over 200 basis points of occupancy headwind [3] - The company has a signed but not commenced pipeline representing about 7% of total ABR, which is expected to commence rapidly over the next several quarters [3][11] - The company has reduced exposure to at-risk tenancy and has a snow pipeline with $40 million of ABR to bring on in the second half of the year [11][12] Business Line Data and Key Metrics Changes - The grocery segment is seeing broad-based demand, with significant growth from specialty grocery tenants like Trader Joe's and Whole Foods [5][6] - The company has transformed its tenancy, with notable additions such as Chipotle and Bath & Body Works, enhancing the overall portfolio [7][8] - The company has achieved rent spreads of 40% to 50% for spaces that have been addressed, particularly from Big Lots and other tenants [20] Market Data and Key Metrics Changes - The company is experiencing increased demand from retailers looking to expand their open-air store footprint, particularly in off-price apparel and specialty grocery [4][5] - The company has seen year-over-year traffic growth, outperforming peers due to its reinvestment strategy [33] Company Strategy and Development Direction - The company aims to capitalize on below-market rents and bring in better tenants, focusing on creative reinvestment in properties [2] - The company has identified over $800 million of future reinvestment potential, with annual goals of $150 to $200 million in accretive spend [29] - The strategy includes capital recycling, where the company exits assets with limited growth potential and reinvests in higher growth opportunities [39][54] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by tenant demand and the overall business environment, expecting to deliver 4% unlevered growth despite short-term disruptions [15][56] - The company is well-positioned with a strong balance sheet and has successfully reduced leverage to the mid-fives [60] - Management acknowledges the competitive market for grocery-anchored assets, with increased interest from private capital [37][40] Other Important Information - The company has seen a moderation in construction costs, with material costs coming in 15% under expectations [34] - The company is focused on enhancing relationships with municipalities to facilitate the entitlement process for redevelopment projects [35] Q&A Session Summary Question: Are you tracking ahead of original assumptions for backfill timing or NOI lift? - Management indicated they entered with the lowest box supply ever and have reduced exposure to at-risk tenants, leading to confidence in demand and growth expectations [13][14] Question: How much of the spaces you got back has been addressed? - Management reported that 80% of the spaces have been addressed, with the remaining expected to be addressed in the next couple of quarters [17] Question: What is the rent uplift from the boxes being addressed? - The company is achieving rent uplifts of 40% to 50% for the spaces addressed, particularly from Big Lots and other tenants [20] Question: What is the biggest pressure on the development process today? - Management noted that costs have moderated, but the entitlement process can be challenging depending on the municipality [34][35] Question: What is the outlook for NOI growth in the sector next year? - Management believes NOI growth will be in line with current expectations [64]