In This Article:
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Same-Center NOI Growth: Increased by 3.9% in the first quarter.
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Comparable Renewal Rent Spreads: Achieved a record high of 21.7% in the first quarter.
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Comparable New Leasing Rent Spreads: Reached 28.1% in the first quarter.
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Portfolio Occupancy: Ended the quarter at 97.1% leased.
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Anchor Occupancy: Remained strong at 98.4%.
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In-Line Occupancy: Ended the quarter at 94.6%.
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NAREIT FFO: Increased to $89 million or $0.64 per diluted share, reflecting an 8.5% year-over-year growth.
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Core FFO: Increased to $90.8 million or $0.65 per diluted share, reflecting an 8.3% year-over-year growth.
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Net Debt to Adjusted EBITDAre: 5.3 times as of March 31, 2025.
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Weighted Average Interest Rate: 4.4% on debt.
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Weighted Average Debt Maturity: 5.6 years.
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Liquidity: Approximately $760 million available.
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2025 Guidance for NAREIT FFO Per Share: Reflects a 5.7% increase over 2024 at the midpoint.
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2025 Guidance for Core FFO Per Share: Represents a 5.1% increase over 2024 at the midpoint.
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2025 Same-Center NOI Growth Guidance: 3% to 3.5%.
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Phillips Edison & Co Inc (NASDAQ:PECO) reported a strong quarter with a 3.9% increase in same-center NOI.
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High occupancy rates were maintained, with portfolio occupancy at 97.1% and anchor occupancy at 98.4%.
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The company achieved record high in-line renewal rent spreads of 21.7% and new leasing rent spreads of 28.1%.
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PECO's focus on necessity-based goods and services, which make up 71% of ABR, provides insulation from potential tariff disruptions.
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The company has a strong acquisition pipeline and affirmed its guidance for $350 million to $450 million in gross acquisitions for the year.
Negative Points
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There are concerns about the impact of tariffs and potential economic recession on PECO's operations.
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The company faces challenges with upcoming swap expirations, which could increase variable rate exposure.
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Despite strong leasing activity, there is uncertainty in the capital markets that could affect future growth.
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The economic environment remains volatile, which could impact consumer behavior and retailer demand.
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PECO's stock is trading at a cap rate that is higher than the cap rates of recent acquisitions, indicating tighter investment spreads.
Q & A Highlights
Q: Can you provide insights into the seasonality of leasing and how recent months have performed? A: Bob Myers, President, explained that first-quarter occupancy typically sees a slight decline due to seasonality. However, current occupancy remains strong at 97.1%, with in-line occupancy at 94.6%. Leasing activity is robust, with more leases out for signature now than last year. Retailers are eager to grow, and leasing spreads are expected to improve further.