Phillips Edison & Company(PECO) - 2025 Q1 - Quarterly Report

Portfolio Overview - As of March 31, 2025, the company owned equity interests in 321 shopping centers, comprising approximately 36.0 million square feet across 31 states[85]. - The total square footage of the wholly-owned portfolio increased to 33,512 thousand square feet as of March 31, 2025, up from 32,350 thousand square feet in 2024, representing a growth of 3.6%[86]. - The leased occupancy rate for the total portfolio was 97.1% as of March 31, 2025, slightly down from 97.2% in 2024[86]. - The average remaining lease term increased to 4.5 years as of March 31, 2025, compared to 4.3 years in 2024[86]. - The percentage of ABR from omni-channel grocery-anchored shopping centers was 95.3% as of March 31, 2025, down from 96.8% in 2024[86]. - The company has a portfolio of over 3,500 unique neighbors, with a focus on maintaining high occupancy rates to drive rental rate growth[90]. Financial Performance - The company's ABR (Annual Base Rent) reached $518,115 thousand as of March 31, 2025, compared to$479,159 thousand in 2024, indicating an increase of 8.1%[86]. - Rental income for the three months ended March 31, 2025, increased by $16.1 million, or 10.2$174.2 million[102]. - Total revenues for the same period rose to $178.3 million, reflecting a$17.0 million increase, or 10.5% year-over-year[102]. - Net income attributable to stockholders for the three months ended March 31, 2025, was $26.3 million, a 48.9$17.7 million in the same period of 2024[102]. - Operating expenses decreased by 9.3% year-over-year, totaling $128.4 million, primarily due to effective cost management strategies[102]. - Nareit FFO attributable to stockholders and OP unit holders increased to$89.05 million in Q1 2025 from $80.06 million in Q1 2024[114]. - Core FFO attributable to stockholders and OP unit holders rose to$90.77 million in Q1 2025 compared to $81.66 million in Q1 2024[114]. Leasing Activity - The number of new leases decreased from 84 in 2024 to 78 in 2025, while the square footage increased from 255,000 to 326,000[105]. - Average Base Rent (ABR) per square foot for new leases dropped from$25.24 in 2024 to $19.30 in 2025[105]. - The portfolio retention rate improved to 91.4$34.09 in 2024 to $20.84 in 2025[105]. Debt and Liquidity - The net debt to adjusted EBITDAre ratio provides insight into the company's leverage rate based on earnings, which is not impacted by fluctuations in equity price[87]. - As of March 31, 2025, total debt obligations increased to$2,304,162 thousand from $2,137,336 thousand as of December 31, 2024, reflecting a growth of approximately 7.8$24,382 thousand for the three months ended March 31, 2025, compared to $9,810 thousand for the same period in 2024, representing a significant increase of 148.5$138,425 thousand during the three months ended March 31, 2025, compared to 2 properties for $55,902 thousand in the same period of 2024[130]. - Real estate acquisitions totaled$139.1 million for the three months ended March 31, 2025, compared to $56.2 million in the same period of 2024, reflecting a significant increase[137]. - Capital expenditures amounted to$26.4 million for the three months ended March 31, 2025, an increase of $13.4 million from$13.0 million in the same period of 2024[137]. - The company sold one property during the three months ended March 31, 2025, resulting in a net cash inflow of $6.5 million, while no properties were sold in the same period of 2024[137]. - Investment in unconsolidated joint ventures reached$3.5 million during the three months ended March 31, 2025[137]. Cash Flow and Distributions - Net cash provided by operating activities was $60,542 thousand for the three months ended March 31, 2025, a decrease of 4.1$63,138 thousand in the same period of 2024[134]. - The company reported a net cash decrease of $0.8 million during the three months ended March 31, 2025, with cash and cash equivalents totaling$7.9 million[134]. - Cash distributions to common stockholders and OP unit holders increased by $17.1 million for the three months ended March 31, 2025, primarily due to timing and an increase in shares outstanding[137]. - The company declared and paid monthly distributions of$0.1025 per common share and OP unit from January 2025 through March 2025[130]. Economic Outlook - The company estimates that inflation and economic uncertainties could negatively impact consumer spending and overall business performance[100]. - The company anticipates that obligations related to capital improvements and redevelopment in 2025 can be met with cash flows from operations, cash flows from dispositions, or borrowings on the unsecured revolving credit facility[127]. - The company expects development and redevelopment projects to stabilize within 24 months, with expected unlevered yields ranging between 9%-12%[128].