In This Article:
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Core FFO per Share Growth: Nearly 4% in 2024, potentially 6% if adjusted for interest rates.
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Acquisitions: Closed nearly $100 million in Q4; targeting $350 million to $450 million in 2025.
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Comparable New Rent Spreads: 30.2% in Q4.
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Comparable Renewal Rent Spreads: 20.8% in Q4.
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Portfolio Occupancy: 98% leased at the end of Q4.
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NAREIT FFO: $83.8 million or $0.61 per diluted share in Q4, 8.9% YoY growth.
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Core FFO: $85.8 million or $0.62 per diluted share in Q4, 6.9% YoY growth.
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Same-Center NOI Growth: 6.5% in Q4.
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Liquidity: Approximately $948 million as of December 31, 2024.
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Net Debt to Adjusted EBITDAR: 5 times.
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2025 Guidance for NAREIT FFO: $2.47 to $2.54 per share, 5.7% increase over 2024 at midpoint.
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2025 Guidance for Core FFO: $2.52 to $2.59 per share, 5.1% increase over 2024 at midpoint.
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2025 Same-Center NOI Growth Guidance: 3% to 3.5%.
Release Date: February 07, 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) delivered solid core FFO per share growth of nearly 4% in 2024, despite significant interest expense headwinds.
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Retailer demand across PECO's portfolio remains strong, evidenced by high occupancy rates and strong rent spreads.
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PECO exceeded the high end of its original guidance for acquisitions in 2024, closing nearly $100 million in acquisitions in the fourth quarter.
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The company has a high-quality portfolio capable of delivering strong cash flow growth, with approximately 70% of ABR coming from necessity-based goods and services.
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PECO's low leverage provides financial capacity to meet growth targets, with diverse sources of capital including additional debt issuance, dispositions, and equity.
Negative Points
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Significant interest expense headwinds impacted core FFO per share growth, which would have been higher without these expenses.
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Several retailers, including Party City and Big Lots, filed for bankruptcy, although PECO has low exposure to these retailers.
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The transaction market is competitive, with more buyers putting pressure on pricing, which could impact acquisition opportunities.
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PECO's strategy of taking back weaker stores to improve merchandising may temporarily put downward pressure on occupancy and retention rates.
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The company faces potential headwinds from tariffs and higher labor costs, which could impact retailer operations and consumer spending.
Q & A Highlights
Q: How does the current tenant demand and acquisition pipeline compare to last year? A: Jeffrey Edison, CEO, stated that they feel better about the current year compared to last year due to a larger pipeline of projects under contract and controlled. They had a strong fourth quarter with nearly $100 million in acquisitions, and they have higher goals for acquisitions this year. The market continues to show a strong pipeline of products, although there is more competition, which is putting pressure on pricing.