• NOI Growth: 5% increase in both NOI and bottom line FFO.
• Occupancy Rate: Overall occupancy increased to 95.2%, with anchor occupancy at 97.2%.
• Leasing Activity: 1.5 million square feet of new and renewal leases executed at a blended cash spread of 21%.
• Same Property NOI Growth: 4.7% in the fourth quarter; 5% for the year.
• Nareit FFO: $0.53 per share in the fourth quarter; $2.13 per share for the year.
• Redevelopment Investment: $205 million with an average incremental return of 9%.
• Dispositions: $212 million completed across 14 transactions.
• Acquisitions: Over $290 million in value-add acquisitions.
• Liquidity: Total liquidity of $1.6 billion.
• Debt to EBITDA: 5.7 times on a current quarter annualized basis.
• 2025 Guidance: Same property NOI growth of 3.5% to 4.5%; Nareit FFO range of $2.19 to $2.24 per share.

• Warning! GuruFocus has detected 5 Warning Signs with BRX.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Brixmor Property Group Inc (NYSE:BRX) achieved a strong growth in both NOI and FFO of 5%, positioning the company to continue outperforming in a strong demand environment.
• The company signed over $118 million in new and renewal lease ABR during the year, demonstrating robust tenant demand and portfolio transformation momentum.
• Brixmor Property Group Inc (NYSE:BRX) increased overall occupancy to 97.2% for anchors, with significant growth in the grocery segment, including new tenants like Sprouts, Whole Foods, and Trader Joe's.
• The redevelopment and construction teams delivered $205 million of reinvestment at an average incremental return of 9%, with a pipeline of nearly $400 million at an average incremental return of 10%.
• The company successfully completed $212 million of dispositions and $290 million of value-add acquisitions, enhancing its portfolio in core markets like Hartford, Tampa, and Boston.

Negative Points

• The company faced a 70 basis point impact on occupancy due to bankruptcy activity, affecting overall occupancy growth.
• Tenant disruption is expected to cause a 200 basis point drag on same property NOI growth in 2025, with additional potential impacts from lease rejections.
• Brixmor Property Group Inc (NYSE:BRX) anticipates slower growth in the first half of 2025 due to the timing of tenant disruptions and lease rejections.
• The company raised $97 million of equity in the quarter, which may indicate reliance on external funding for transaction activities.
• There is a potential risk of increased costs due to tariffs, which could impact tenant operations and construction expenses.

Q & A Highlights

Q: Jim, you mentioned tapping the ATM in 4Q and seeing more acquisition opportunities. Can you elaborate on the market perspective and funding strategy for these investments? A: James Taylor, CEO: Our current share price focuses us on capital recycling for external growth. We're encouraged by the breadth of product flow and target assets becoming available that align with our value-add framework. We'll remain disciplined, considering equity cost and opportunities.

Q: Of the 50 basis points of occupancy loss in 4Q, how much was due to bankruptcy disruption, and what portion of recaptured boxes are resolved? A: Brian Finnegan, COO: We had a 70 basis point impact from bankruptcy, mainly from Big Lots, Conn's, and Lumber Liquidators. We have 19 Big Lots boxes, with 13 resolved with operators like Aldi and Planet Fitness, seeing rent growth over 50%.

Q: Can you provide details on the components of same-store NOI growth and the expected back half acceleration? A: Steven Gallagher, CFO: The growth includes 200 basis points of tenant disruption impact and 75 to 110 basis points for uncollectible revenues. The stacking of rents and contractual rent bumps will drive growth, with acceleration expected in the second half.

Q: What are the cap rates for 4Q acquisitions, and how do they compare to incremental redevelopments? A: James Taylor, CEO: Acquisitions were at 6% to 7% initial yields, with opportunities for growth through better tenants and redevelopments. We target high single to low double-digit unlevered IRRs, focusing on value-add rather than core assets.

Q: How has the watch list changed recently, and what are potential pending credit issues? A: Brian Finnegan, COO: The portfolio's credit base is strong, with record low small shop move-outs. We monitor categories like drugstores and theaters, but overall, we're confident in the portfolio's credit quality.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.