BRIXMOR PROPERTY GROUP REPORTS SECOND QUARTER 2022 RESULTS

Aug 12, 2022

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Brixmor Property Group Inc. announced its operating results for the three and six months ended June 30, 2022.  For the three months ended June 30, 2022 and 2021, net income was $0.29 per diluted share and $0.30 per diluted share, respectively.

Key highlights for the three months ended June 30, 2022 include:

• Executed 2.0 million square feet of new and renewal leases, with rent spreads on comparable space of 14.6%, including 0.9 million square feet of new leases, with rent spreads on comparable space of 34.3%


• Sequentially increased total leased occupancy to 92.5%, anchor leased occupancy to 94.8%, and small shop leased occupancy of 87.7%




• Small shop leased occupancy of 87.7% reflects a 70 basis point sequential improvement and represents a new record for the portfolio


• Leased to billed occupancy spread totaled 350 basis points


• Total signed but not yet commenced lease population represented 2.8 million square feet and $53.8 million of annualized base rent




• Reported an increase in same property NOI of 6.7%




• The contribution from base rent - excluding COVID-19 rent deferrals (lease modifications) and rent abatements accelerated 90 basis points this quarter to 370 basis points




• Reported Nareit FFO of $148.9 million, or $0.49 per diluted share


• Stabilized $39.0 million of reinvestment projects at an average incremental NOI yield of 11%, with the in process reinvestment pipeline totaling $398.2 million at an expected average incremental NOI yield of 9%


• Completed $251.1 million of acquisitions and $84.5 million of dispositions


• Amended and restated the Company's unsecured credit facilities, increasing the total amount available by $200 million to $1.75 billion, while extending the maturities and lowering pricing


• Received a credit rating upgrade from Fitch Ratings to 'BBB' from 'BBB-', with a stable outlook


• Published the Company's annual Corporate Responsibility Report (view the 2021 report at https://www.brixmor.com/why-brixmor/corporate-responsibility)

Subsequent events:

• Completed $26.1 million of dispositions


• Updated previously provided NAREIT FFO per diluted share expectations for 2022 to $1.93 - $1.97 from $1.88 - $1.95 and same property NOI growth expectations for 2022 to 5.5% - 6.0% from 3.0% - 4.5%

"We are tremendously pleased to deliver another strong quarter of outperformance, driven by the execution of our value added business plan,"  commented James Taylor, CEO and President. "That performance is reflected in growth in traffic to our centers, strong leasing volumes, compelling lease spreads and net effective rents, record small shop occupancy, record average in place ABR PSF, and strong NOI and bottom line FFO growth. Importantly, these same results, coupled with our forward leasing and reinvestment pipelines, provide great visibility on our continued growth."

FINANCIAL HIGHLIGHTS

Net Income

• For the three months ended June 30, 2022 and 2021, net income was $87.8 million, or $0.29 per diluted share, and $90.4 million, or $0.30 per diluted share, respectively.


• For the six months ended June 30, 2022 and 2021, net income was $167.3 million, or $0.56 per diluted share, and $142.8 million, or $0.48 per diluted share, respectively.

Nareit FFO

• For the three months ended June 30, 2022 and 2021, Nareit FFO was $148.9 million, or $0.49 per diluted share, and $138.6 million, or $0.46 per diluted share, respectively. Results for the three months ended June 30, 2022 and 2021 include items that impact FFO comparability, including transaction expenses, litigation and other non-routine legal expenses, and loss on extinguishment of debt, net, of $(1.4) million, or $(0.00) per diluted share, and $(0.5) million, or $(0.00) per diluted share, respectively.


• For the six months ended June 30, 2022 and 2021, Nareit FFO was $294.3 million, or $0.98 per diluted share, and $269.2 million, or $0.90 per diluted share, respectively. Results for the six months ended June 30, 2022 and 2021 include items that impact FFO comparability, including transaction expenses, litigation and other non-routine legal expenses, and loss on extinguishment of debt, net, of $(1.4) million, or $(0.00) per diluted share, and $(3.6) million, or $(0.01) per diluted share, respectively.

Same Property NOI Performance

• For the three months ended June 30, 2022, the Company reported an increase in same property NOI of 6.7% versus the comparable 2021 period.


• For the six months ended June 30, 2022, the Company reported an increase in same property NOI of 7.6% versus the comparable 2021 period.

Dividend

• The Company's Board of Directors declared a quarterly cash dividend of $0.24 per common share (equivalent to $0.96 per annum) for the third quarter of 2022.


• The dividend is payable on October 17, 2022 to stockholders of record on October 4, 2022, representing an ex-dividend date of October 3, 2022.

PORTFOLIO AND INVESTMENT ACTIVITY 

Value Enhancing Reinvestment Opportunities

• During the three months ended June 30, 2022, the Company stabilized five value enhancing reinvestment projects with a total aggregate net cost of approximately $39.0 million at an average incremental NOI yield of 11% and added six new reinvestment projects to its in process pipeline. Projects added include four anchor space repositioning projects and two outparcel development projects, with a total aggregate net estimated cost of approximately $19.2 million at an expected average incremental NOI yield of 10%.


• At June 30, 2022, the value enhancing reinvestment in process pipeline was comprised of 55 projects with an aggregate net estimated cost of approximately $398.2 million at an expected average incremental NOI yield of 9%. The in process pipeline includes 18 anchor space repositioning projects with an aggregate net estimated cost of approximately $78.5 million at an expected incremental NOI yield of 7% - 14%; 14 outparcel development projects with an aggregate net estimated cost of approximately $26.2 million at an expected average incremental NOI yield of 10%; and 23 redevelopment projects with an aggregate net estimated cost of approximately $293.5 million at an expected average incremental NOI yield of 9%.


• An in-depth review of a recent redevelopment project, which highlights the Company's reinvestment capabilities, Village at Mira Mesa (San Diego-Chula Vista-Carlsbad, CA MSA), can be found at this link: https://www.brixmor.com/blog/village-at-mira-mesa-jim-taylor.


• Follow Brixmor on LinkedIn for video updates on reinvestment projects at https://www.linkedin.com/company/brixmor.

Acquisitions

• During the three months ended June 30, 2022, the Company acquired four shopping centers and one outparcel at an existing property for a combined purchase price of $251.1 million, including:




• Elmhurst Crossing (previously announced), located in Elmhurst, Illinois (Chicago-Naperville-Elgin, IL-IN-WI MSA).


• North Riverside Plaza (previously announced), located in North Riverside, Illinois (Chicago-Naperville-Elgin, IL-IN-WI MSA).


• West U Marketplace (previously announced), located in Houston, Texas (Houston-The Woodlands-Sugar Land, TX MSA).


• Lake Pointe Village, a 162,263 square foot grocery-anchored community shopping center located in Sugar Land, Texas (Houston-The Woodlands-Sugar Land, TX MSA), for $81.0 million in June 2022. Lake Pointe Village is anchored by a highly-productive Whole Foods Market and has compelling near-term leasing and densification opportunities. The property is located in a high-income submarket within ten miles of seven other Brixmor assets and will benefit from leasing and operational synergies resulting from the Company's clustered presence in the trade area.




• During the six months ended June 30, 2022, the Company acquired seven shopping centers, one land parcel at an existing property, and one outparcel at an existing property, for a combined purchase price of $410.6 million.

Dispositions

• During the three months ended June 30, 2022, the Company generated approximately $84.5 million of gross proceeds on the disposition of five shopping centers, as well as three partial properties, comprised of 1.1 million square feet of gross leasable area.


• During the six months ended June 30, 2022, the Company generated approximately $145.5 million of gross proceeds on the disposition of ten shopping centers, as well as four partial properties, comprised of 1.7 million square feet of gross leasable area.


• Subsequent to June 30, 2022, the Company disposed of one shopping center, as well as one partial property, for $26.1 million of gross proceeds.

CAPITAL STRUCTURE  

• During the three months ended June 30, 2022, the Company raised approximately $3.7 million in gross proceeds, excluding commissions, from the sale of approximately 0.1 million shares of common stock at an average price per share of $26.29 through its at-the-market ("ATM") equity offering program.


• During the six months ended June 30, 2022, the Company raised approximately $48.1 million in gross proceeds, excluding commissions, from the sale of approximately 1.9 million shares of common stock at an average price per share of $25.55 through its ATM equity offering program.


• As previously announced, on April 28, 2022, the Company's operating partnership, Brixmor Operating Partnership LP, amended and restated its $1.25 billion revolving credit facility and $300 million term loan facility, while adding a new $200 million delayed draw term loan facility. The restated unsecured credit facilities extend the maturity of the revolving credit facility to June 2026, extend the maturity of the term loan facility to July 2027, and improve the pricing of the unsecured credit facilities.


• The Company has $1.2 billion in liquidity and no debt maturities until June 2024.

GUIDANCE

• The Company has updated its previously provided NAREIT FFO per diluted share expectations for 2022 to $1.93 - $1.97 from $1.88 - $1.95 and its same property NOI growth expectations for 2022 to 5.5% - 6.0% from 3.0% - 4.5%.


• Expectations for 2022 same property NOI growth include a:




• Contribution from base rent of approximately 450 bps


• Contribution from revenues deemed uncollectible of approximately 0 bps to 50 bps


• Contribution from all other line items of approximately 100 bps




• Expectations for 2022 Nareit FFO:




• Do not contemplate any additional tenants moving to or from a cash basis of accounting, either of which may result in significant volatility in straight-line rental income


• Do not include any additional items that impact FFO comparability, including litigation and other non-routine legal expenses, loss on extinguishment of debt, and transaction expenses, or any one-time items




• The following table provides a reconciliation of the range of the Company's 2022 estimated net income attributable to common stockholders to Nareit FFO:

CONNECT WITH BRIXMOR

• For additional information, please visit https://www.brixmor.com;


• Follow Brixmor on:




• Twitter at https://www.twitter.com/Brixmor


• Facebook at https://www.facebook.com/Brixmor


• Instagram at https://www.instagram.com/brixmorpropertygroup


• YouTube at https://www.youtube.com/user/Brixmor; and




• Find Brixmor on LinkedIn at https://www.linkedin.com/company/brixmor.

CONFERENCE CALL AND SUPPLEMENTAL INFORMATION

The Company will host a teleconference on Tuesday, August 2, 2022 at 10:00 AM ET. To participate, please dial 877.704.4453 (domestic) or 201.389.0920 (international) within 15 minutes of the scheduled start of the call. The teleconference can also be accessed via a live webcast at https://www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on August 16, 2022 by dialing 844.512.2921 (domestic) or 412.317.6671 (international) (Passcode: 13730173) or via the web through August 2, 2023 at https://www.brixmor.com in the Investors section.

The Company's Supplemental Disclosure will be posted at https://www.brixmor.com in the Investors section. These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.

URL : https://www.brixmor.com

Contact Information:

investorrelations@brixmor.com or 800.468.7526.

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