~~Legal, Finance, Accounting, Tax, Marketing, Risk Management, IT, Human Resources, etc.—Our other in-house teams add~~development and redevelopment opportunities to increase the overall yield and value ~~by utilizing technology and broad processes~~of our properties, which will allow us to ~~create efficiencies through scale, creating a better experience~~generate higher returns for our ~~tenants~~stockholders while ~~reducing costs. Our associates are dedicated to the company’s long-term commitment of being the leading owner and operator of~~creating great grocery-anchored shopping ~~centers.~~center experiences.

~~Third-Party~~ •Investment ~~Management Business~~

~~In addition to managing our shopping centers, our third-party~~Management—Our investment management business provides comprehensive real estate, ~~and~~ asset management, and accounting and support services to ~~five non-traded, publicly registered REITS~~third-party funds. Although the uncertainty surrounding the financial and ~~private funds with assets under management of approximately $2.1 billion~~real estate markets as ~~of December 31, 2017.~~

For each of these programs, we raise equity capital through either public or private offerings, invest those funds, and manage their assets in return for fee revenue as specified in our advisory agreements with them.

~~Strategic Alternatives~~

We are continuously evaluating strategic alternatives to create liquidity for our investors. In conjunction with the PELP transaction, we brought on an experienced management team that allows us to fully consider all alternatives. We are focused on maximizing the value for our shareholders while seeking to provide liquidity for our shareholders.

~~Segment Data~~

As of December 31, 2017, we operated through two business segments: Owned Real Estate and Investment Management. Prior to the completion of the PELP transaction on October 4, 2017, we were externally-managed and our only reportable segment was the aggregated operating results of our owned real estate. Therefore, we did not report any segment disclosures for the years ended December 31, 2016 and 2015. For a more detailed discussion regarding these segments, including operating data for the year ended December 31, 2017, see Note 18.

~~Tax Status~~

As a result of the ~~PELP transaction,~~COVID-19 pandemic has slowed the pace of joint venture and other growth opportunities, we ~~hold,~~believe that our investment management business will expand our platform and ~~plan~~relationships while preserving our balance sheet and will afford us the opportunity to ~~continue~~consider acquisitions in the future similar to ~~hold,~~what we have done historically.

Responsible Balance Sheet Management—Our strategy is to improve and monitor our ~~non-qualifying REIT~~leverage ratios and debt maturities and dispose of certain shopping centers in order to maximize our potential future valuation in the public equity markets. We believe this is a critical part of maintaining access to multiple forms of capital, including common stock, unsecured debt, bank debt, and mortgage debt, to maximize availability and minimize our overall cost of capital.

•Disposition Program—We are actively evaluating our portfolio for opportunities to dispose of assets that no longer meet our growth and ~~conduct certain~~investment objectives due to stabilization or perceived future risk. These dispositions provide us with capital to fund acquisitions, fund redevelopment opportunities at owned properties, and reduce our leverage.

•Debt Maturity Profile—We have prioritized maintaining an appropriately staggered debt maturity profile, which will position us for long-term growth. Our outstanding debt obligations are composed primarily of unsecured debt, including term loans and a revolving credit facility, and secured mortgage debt. Certain of our ~~non-qualifying REIT income activities~~upcoming unsecured debt agreements include options to extend their maturities, which provide flexibility in ormanaging refinancing through a taxable REIT subsidiary (“TRS”). A TRS is a corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated as a TRS. A TRS also includes any corporation other than a REIT with respect to which a TRS owns securities possessing more than 35% of the total voting power or value of the outstanding securities of such corporation. A TRS is subject to income tax as a C-corporation.

The net income of our TRS is not required to be distributed to us and income that is not distributed to us will generally not be subject to the REIT income distribution requirement. However, our TRS may pay dividends. Such dividend income should qualify under the 95%, but not the 75%, gross income test. We will monitor the amount of dividend and other income from our TRS and will take actions that are intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests. While we expect these actions will prevent a violation of the REIT income tests, we cannot guarantee that such actions will, in all cases, prevent such a violation.changing market conditions.

Competition

We are subject to significant competition in seeking real estate investments and ~~tenants.~~tenants (whom we refer to as a “Neighbor” or our “Neighbors”). We compete with many third parties engaged in real estate investment activities including other REITs, specialty finance companies, savings and loan associations, banks, ~~mortgage bankers,~~ insurance companies, mutual funds, institutional investors, investment banking firms, ~~lenders,~~ hedge funds, ~~governmental bodies,~~ and other ~~entities.~~persons. Some of these competitors, including larger REITs, have ~~substantially~~ greater financial resources than we do and ~~generally~~may potentially enjoy ~~significant~~ competitive advantages that primarily result from ~~among other things,~~ increased access to capital, lower cost of capital, and enhanced operating efficiencies. In addition to these entities, we also face competition from smaller landlords and companies at the local level in seeking Neighbors to occupy our shopping centers. This further increases the number of competitors we have and the type of competition that we face in seeking to execute on our business objectives and strategies.

~~Employees~~Segment Data

Our principal business is the ownership and operation of community and neighborhood shopping centers. We do not distinguish our principal business or group our operations by geography or size for purposes of measuring performance. Accordingly, we have presented our results as a single reportable segment.

Government Regulation

Compliance with various governmental regulations has an impact on our business, including our capital expenditures, earnings, and competitive position. The impact of these governmental regulations can be material to our business. We incur costs to monitor and take action to comply with governmental regulations that are applicable to our business, which include, among others: federal securities laws and regulations; REIT and other tax laws and regulations; environmental and health and safety laws and regulations; local zoning, usage and other regulations relating to real property; and the Americans with Disabilities Act of 1990, as amended (“ADA”). See “Part I, Item 1A. Risk Factors” of this filing on Form 10-K for a discussion of material risks to us (including those, to the extent material to our competitive position, relating to governmental regulations) and see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this filing on Form 10-K, together with our consolidated financial statements and accompanying footnotes, for a discussion of material information relevant to an assessment of our financial condition and results of operations (including, to the extent material, the effects that compliance with governmental regulations may have upon our capital expenditures and earnings).

Human Capital

As of December 31, ~~2017,~~2020, we had ~~304~~approximately 300 associates located in 20 states across the country, with concentrations in our corporate offices in Cincinnati, Ohio; Park City, Utah; and Atlanta, Georgia. Approximately 55% of our workforce is female and 45% is male. Our senior leadership team is 19% female and 81% male, while manager roles and above are approximately 40% female and 60% male. For the year ended December 31, 2020, our overall turnover rate was 17%, with voluntary turnover being 10%.

Our human capital objectives include, as applicable, identifying, recruiting, retaining, developing, incentivizing, and integrating our existing and prospective employees. ~~Prior~~We provide associates with competitive salaries, bonuses, incentives, and opportunities for equity ownership. One unique aspect of our compensation philosophy is that each associate in the organization, regardless of level or tenure, has the opportunity for equity grants on an annual basis. During the year ended December 31, 2020, 100% of eligible associates received grants of service-based restricted stock units in the Company. Upon vesting, associates will receive actual shares of common stock, which we believe encourages our employees to think like owners of the Company.

We recognize the importance of the health, safety, and environmental well-being of our employees, and are committed to providing and maintaining a healthy work environment. Our 2020 all-associate engagement survey, which had an 89% participation rate, showed 84% overall engagement, and 91% of associates reported they felt proud to tell people where they work, compared to an 80% global average as reported by Qualtrics XM, while 93% of associates felt they could be successful at the Company. In 2020, we were named a top place to work by the Cincinnati Enquirer for the fourth year in a row. We also won special recognition each of the past four years, including being recognized for “clued-in senior management” in 2020.

Our strong culture and commitment to inclusion is reinforced by two associate-led business resource groups: PECO MORE (Multicultural Opportunities, Resources & Education), and PECO NOW (Networking Opportunities for Women). PECO MORE is

dedicated to furthering diversity and inclusion within the Company, the communities that we serve, and the commercial real estate industry. In June 2020, PECO MORE hosted “BEGIN” conversations, a series of 23 small group discussions, attended by approximately 50% of the workforce, designed to “begin” dialogue around diversity, inclusion, and equity. PECO MORE’s programming has focused on providing education, raising awareness, and hosting events around Veterans Day, the Chinese New Year, Black History Month, Pride Month, and Women’s History Month. PECO NOW’s mission is to provide leadership opportunities to women through advocacy, support, scholarship, and development. PECO NOW was recognized for excellence by the International Council of Shopping Centers in 2016.

“Always Keep Learning” is one of our core values. Each year, we sponsor an annual meeting that provides associates with the ability to hear directly from company leadership about our performance, goals, and strategy. We host external speakers to facilitate discussions on relevant industry topics, and educational roundtables are led by internal subject-matter experts. This annual learning event provides associates with the information needed to understand how their roles and responsibilities directly impact the Company’s performance and growth. Associates are also kept apprised of company information through town halls conducted throughout the year. While the COVID-19 pandemic impacted many planned learning opportunities in 2020, we focused on providing managers with skills-based training to coach their associates and navigate through tough conversations while addressing virtual team challenges. We look forward to returning to a regular learning cycle in 2021, adapted for the COVID-19 environment, with an inaugural virtual Core Values Week in February 2021.

Our “Beyond Benefits” wellness program focuses on our associates’ emotional, physical, and financial well-being. Together with an external partner, we offer a full wellness platform providing Health Savings Account incentive contributions for biometric screening results, preventive care, and activity-based items such as step counts, nutrition tracking, and workout activity minutes. To keep remote associates engaged during 2020, we held six wellness challenges where individuals and teams could earn incentive dollars for winning competitions that tracked steps, workout activity, and water consumption. Such efforts have facilitated a continued dedication to wellness and preventive care among our associates, and as a result, we were recognized by Healthiest Employers LLC as one of the “Healthiest Employers of Ohio” in 2020.

We are also committed to ensuring that the operations at all of our properties and corporate offices are conducted in a manner that safeguards the health and safety of employees, Neighbors, contractors, and members of the public who are either present at, or affected by, operations at these locations. This commitment increased in importance in 2020 due to the ~~completion of~~unique challenges posed by the ~~PELP transaction, we did not have any employees. However, PELP’s employees and executive officers were compensated, in part, for their services rendered to us.~~

~~Environmental Matters~~

As an owner of real estate, we are subject to various environmental laws of federal, state, and local governments. Compliance with federal, state, and local environmental laws has not had a material, adverse effect on our business, assets, results of operations, financial condition, and ability to pay distributions,COVID-19 pandemic, and we ~~do not believe that~~continue to work with all of our ~~existing portfolio will require us~~stakeholders to ~~incur material expenditures~~mitigate the pandemic’s impact.

In addition to ~~comply~~the increased number of activity-based individual and team challenges, we maintained a proactive approach to all aspects of well-being during the COVID-19 pandemic, with ~~these laws~~a specific focus on mental health, including offering virtual Meditation and ~~regulations.~~Mindfulness sessions throughout the spring and summer of 2020. We also maintained an intranet page with information related to COVID-19, work-from-home tips, and services available to associates, such as multiple free virtual fitness app memberships and a mental health, meditation and mindfulness app. Our communications team sent out regular company-wide emails to keep associates connected with helpful practical information, as well as fun topics such as healthy recipes and photos of our associates’ at-home office spaces and new “co-workers.”

Corporate Headquarters

Our corporate headquarters, located at 11501 Northlake Drive, Cincinnati, Ohio 45249, is where we conduct a majority of our management, leasing, construction, and investment activities, as well as administrative functions such as accounting and finance. Additionally, we maintain two regional offices located in Atlanta, Georgia and Park City, Utah.

Access to Company Information

We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy and Information statements, and all amendments to those reports with the U.S. Securities and Exchange Commission (“SEC”). The public may read and copy any of the reports that are filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, on official business days during the hours of 10:00 AM to 3:00 PM. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains the reports, proxy and information statements, and other information regarding issuers, including ours that are filed electronically. ~~The contents of our website are not incorporated by reference.~~

We make available, free of charge, ~~by responding to requests addressed to our investor relations group,~~ the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports on our website, www.phillipsedison.com. These reports are available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Also available on our website are (i) our Corporate Governance Guidelines, (ii) our Code of Business Conduct and Ethics, and (iii) our Whistleblower Policy. In the event of any changes to these documents, revised copies will be made available on our website. The contents of our website are not incorporated by reference.

ITEM 1A. RISK FACTORS

You should specifically consider the following material risks in addition to the other information contained in this Annual Report on Form 10-K. The occurrence of any of the following risks might have a material adverse effect on our business, operating results, financial condition, and ~~financial condition. The~~cash flows. Additional risks and uncertainties ~~discussed below are~~ not ~~the only ones we face, but do represent those risks and uncertainties~~presently known to us or that we ~~believe are most significant to~~currently deem immaterial also may impair our business, operating results, financial condition, ~~prospects~~ and ~~forward-looking statements.~~cash flows.

Risks Related to Our Structure and an Investment in Us

Because no public trading market for our shares currently exists and our share repurchase program is limited, it is difficult for our stockholders to sell their shares and, if our stockholders are able to sell their shares, it may be at a discount to the public offering ~~price.~~price at which stockholders originally purchased the shares.

There is no public trading market for our ~~shares.~~shares of common stock. Until our shares of common stock are listed on a stock exchange, if ever, stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase standards.

Under the share repurchase program (“SRP”), ~~we repurchase~~any shares ~~at a price in place~~repurchased will be at the ~~time~~lesser of $5.75 per share or the most recent estimated value per share (“EVPS”) of our common stock. Currently, standard repurchases under the SRP are suspended and repurchases are limited to those upon a stockholder’s qualifying death, disability, or determination of incompetence. In addition, we may choose to repurchase ~~and not based on~~fewer shares than have been requested in any particular month to be repurchased under the ~~price~~SRP, or none at ~~which you initially purchased your shares. It is likely we will~~all, in our discretion at any time. We may repurchase fewer shares than have been requested to be repurchased due to lack of readily available funds ~~under~~because of adverse market conditions beyond our control, the ~~SRP. While~~need to maintain liquidity for our operations, or because we have determined that paying off our debt or investing in real property or other investments or other items is a ~~limited SRP, in its sole discretion,~~better use of our ~~board~~capital than repurchasing our shares. The Board of ~~directors~~Directors (“Board”) ~~could amend,~~may modify, suspend, or terminate ~~our~~the SRP at any time upon 30 days’ notice. ~~Further,~~In addition, because we are not required to authorize the recommencement of a suspension of the SRP, ~~includes numerous restrictions that would limit~~including the currently suspended standard repurchases, within any specified period of time, we may effectively terminate the SRP, or a ~~stockholder’s~~portion of it, by suspending it indefinitely. As a result, your ability to ~~sell his or her~~have your shares repurchased by us may be limited, and at times, you may not be able to ~~us. These restrictions have limited us from repurchasing shares submitted to us under the SRP in the past and may do so again in the future.~~liquidate your investment.

Therefore, it is difficult for our stockholders to sell their shares promptly or at all. If a stockholder is able to sell his or her shares, it may be at a discount to the EVPS and to the public offering price ~~of such~~at which the stockholder originally purchased the shares. It is also likely that our shares would not be accepted as the primary collateral for a loan.

Because of the illiquid nature of our shares, investors should purchase our shares only as a long-term investment and be prepared to hold them for an indefinite period of time.

Our stockholders may not be able to sell their shares under our SRP and, if they are able to sell their shares under the program, they may not be able to recover the amount of their investment in our shares.

Our SRP includes numerous restrictions that limit our stockholders’ ability to sell their shares. During any calendar year, we may repurchase no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. Our stockholders must hold their shares for at least one year in order to participate in the SRP, except for repurchases sought upon a stockholder’s death or “qualifying disability”. The cash available for redemption on any particular date is generally limited to the proceeds from the dividend reinvestment plan (“DRIP”) during the period consisting of the preceding four fiscal quarters, less any cash already used for redemptions since the start of the same period; however, subject to the limitations described above, we may use other sources of cash at the discretionEVPS of our Board. These limitations do not, however, apply to repurchases sought upon a stockholder’s death or “qualifying disability.” Only those stockholders who purchased their shares from us or received their shares from us (directly or indirectly) through one or more non-cash transactions may be able to participate in the SRP. In other words, once our shares are transferred for value by a stockholder, the transferee and all subsequent holders of the shares are not eligible to participate in the SRP. These limits may prevent us from accommodating all repurchase requests made in any year. For example, in 2017 repurchase requests exceeded the funding limits provided under the SRP, and we were unable to repurchase all of the shares submitted to us. These restrictions would severely limit our stockholders’ ability to sell their shares should they require liquidity and would limit their ability to recover the value they invested. Our board is free to amend, suspend or terminate the SRP upon 30 days’ notice.

In addition, the repurchase price per share for all stockholders under the SRP is equal to the estimated value per share as determined periodically by our Board. The actual value per share as of the date on which an investor makes a repurchase request may be significantly different than the repurchase price such investor receives.

~~We use an estimated value of our shares that~~common stock is based on a number of assumptions that may not be accurate or complete and the methodology used to calculate the EVPS is also subject to a number of limitations.

To assist members of the Financial Industry Regulatory Authority (“FINRA”) and their associated persons that participated in our initial public offering, pursuant to applicable FINRA and National Association Security Dealers (“NASD”) conduct rules, we disclose in each annual report distributed to stockholders a per share estimated value of our shares, the method by which it was developed, and the date of the data used to develop the estimated value. For this purpose, we initially estimated the value of our common shares as $10.00 per share based on the offering price of our shares of common stock in our initial public offering of $10.00 per share (ignoring purchase price discounts for certain categories of purchasers). Effective November 1, 2017,On May 6, 2020, our Board ~~approved an estimated value per share~~decreased the EVPS of our common stock ~~of $11.00~~to $8.75 based substantially on the estimated ~~fair~~market value ~~range~~ of our portfolio of real estate ~~portfolio~~properties and our third-party investment management business as ~~indicated in~~of March 31, 2020. The decrease was primarily driven by the negative impact of the COVID-19 pandemic on our non-grocery Neighbors resulting from social distancing and “stay-at-home” guidelines and the uncertainty of the duration and full effect on the overall economy. We engaged a third-party valuation ~~report plus~~firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2020, which reflected certain balance sheet assets and liabilities as of that date. Previously, our EVPS was $11.10, based substantially on the estimated market value of our ~~cash~~portfolio of real estate properties and ~~cash equivalents less the value of~~ our ~~mortgages and loans payable~~third-party investment management business as of ~~October 5, 2017.~~

March 31, 2019. Our ~~estimated value per share~~EVPS is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different ~~estimated value per share,~~EVPS, and this difference could be significant. The ~~estimated value per share~~EVPS is not audited and does not represent a determination of the fair value of our assets or liabilities based on ~~U.S.~~accounting principles generally accepted ~~accounting principles~~in the United States (“GAAP”), nor does it represent a liquidation value of our assets and liabilities, the price a third party would pay to acquire us, the price at which our shares of common stock would trade in secondary markets, or the amount at which our shares of common stock would trade on a national securities exchange.

Accordingly, we can give no assurance that, (i) our shares would trade at or near the EVPS if ~~they were~~ listed on a national securities ~~exchange. Accordingly, with respect to the estimated value per share, there can be no assurance that:~~

exchange; (ii) a stockholder would be able to resell his or her shares at the ~~estimated value per share;~~

EVPS; (iii) a stockholder would ultimately realize distributions per share equal to ~~our estimated value per share~~the EVPS upon a liquidation of our assets and settlement of our ~~liabilities or~~liabilities; (iv) a stockholder would receive an amount per share equal to the EVPS upon a sale of ~~our company;~~

~~our shares of common stock would trade at~~ the ~~estimated value per share on a national securities exchange;~~

Company; (v) a third party would offer the ~~estimated value per share~~EVPS in an arm’s-length transaction to purchase all or substantially all of our shares of common stock;

an (vi) another independent third-party appraiser or third-party valuation firm would agree with our ~~estimated value per share;~~EVPS; or

(vii) the ~~methodology~~methodologies used to calculate our ~~estimated value per share~~EVPS would be acceptable to ~~FINRA~~the Financial Industry Regulatory Authority (“FINRA”) for use on customer account statements or ~~for compliance with~~that the EVPS will satisfy the applicable annual valuation requirements under the Employee Retirement Income Security Act of 1974 (“ERISA”) ~~reporting requirements.~~.

Furthermore, we have not made any adjustments to the valuation of our ~~estimated value per share~~EVPS for the impact of other transactions occurring subsequent to ~~October 5, 2017,~~May 6, 2020, including, but not limited to, ~~(1)~~(i) acquisitions or dispositions of assets; (ii) the issuance of common stock under the ~~DRIP, (2) net operating income~~DRIP; (iii) Net Operating Income (“NOI”) earned and dividends declared ~~(3)~~(see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Same-Center Net Operating Income” of this filing on Form 10-K for the calculation of NOI); (iv) the repurchase of ~~shares~~shares; and ~~(4)~~(v) changes in leases, tenancy, or other business or operational changes. The value of our shares of common stock will fluctuate over time in response to developments related to individual real estate assets, the management of those assets, and changes in the real estate and finance markets. Because of, among other factors, the high concentration of our total assets in real estate and the number of shares of our common stock outstanding, changes in the value of individual real estate assets or changes in valuation assumptions could have a very significant impact on the value of our ~~shares. In addition, the estimated value per share reflects a real estate portfolio premium as opposed to the sum~~shares of ~~the individual property values.~~common stock. The ~~estimated value per share~~EVPS also does not take into account any disposition costs or fees for real estate properties, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations, or the impact of restrictions on the assumption of debt. Accordingly, the ~~estimated value per share of our common stock~~EVPS may or may not be an accurate reflection of the fair market value of our stockholders’ investments and will not likely represent the amount of net proceeds that would result from an immediate sale of our assets.

The actual value of shares that we repurchase under the SRP, or any future tender offer, may be substantially less than the price we are willing to pay under this program.

Under the SRP, we repurchase eligible shares at the lesser of $5.75 per share or the most recent EVPS. The price we pay is likely to differ from the price at which a stockholder could resell his or her shares or the price at which our shares would trade if listed on a national securities exchange. Thus, when we repurchase shares of our common stock, the repurchase may be dilutive to our remaining stockholders.

If we do not successfully implement a ~~Liquidity Event, as defined in~~liquidity transaction, stockholders may have to hold their investment for an indefinite period.

There currently is no public trading market for shares of our ~~Charter,~~common stock, and our charter does not ~~occur by the fifth anniversary of the termination of our initial primary public offering, we may be required~~contain a requirement to ~~adopt a plan of liquidation of our properties and assets.~~

~~Our charter provides that we must~~ effect a ~~Liquidity Event~~liquidity event by a specific date. In the future, our Board may consider various forms of liquidity, each of which ~~includes~~is referred to as a liquidity event, including, but not limited to, (i) the listing of shares of common stock on a national securities

exchange; (ii) the sale of all or substantially all of our ~~assets,~~assets; (iii) a sale or merger that would provide stockholders with cash and/or securities of ~~our company,~~ a ~~listing~~publicly traded company; or (iv) the dissolution of the Company. However, there can be no assurance that we will cause a liquidity event to occur. If we do not pursue a liquidity transaction, shares of our common stock on a national securities exchange, or other similar transaction, on or before the fifth anniversary of the termination of the initial primary public offering. If we do not begin the process of achieving a Liquidity Event by that date, our charter requires that we seek approval from our stockholders to amend the charter to extend the deadline. If we sought and failed to obtain stockholder approval of a charter amendment extending the deadline, our charter requires us to submit a plan of liquidation for the approval of our stockholders. If we sought and failed to obtain stockholder approval of both the charter amendment and our liquidation, we would continue our business. If we sought and obtained stockholder approval of our liquidation, we would begin an orderly sale of our properties and other assets.

The precise timing of any such sales would consider the prevailing real estate and financial markets, the economic conditions in the submarkets where our properties are located and the U.S. federal income tax consequences to our stockholders. The actual amount that we would distribute to stockholders in the liquidation would depend upon the actual amount of our liabilities, the actual proceeds from the sale of our properties, the actual fees and expenses incurred in connection with the sale of our properties, the actual expenses incurred in the administration of our properties prior to disposition, our actual general and administrative expenses, our ability tomay continue to ~~meet the requirements necessary to retain our status as a REIT throughout the liquidation process, our ability to avoid U.S. federal income~~be illiquid and ~~excise taxes throughout the~~stockholders may, for an indefinite period of the liquidation process and other factors. If our liabilities (including, without limitation, tax liabilities and compliance costs) are greater than we currently expect or if the sales prices of our assets are less than we expect, stockholders will receive less in total liquidating distribution. Additionally, our Board will have discretion as to the timing of distributions of net sales proceeds.

~~If we are~~time, be unable to ~~find buyers for our assets~~easily convert their investment to cash and could suffer losses on ~~a timely basis or at our expected sales prices, our liquidating distributions may be delayed or reduced.~~their investments.

If we pay distributions from sources other than our cash flows from operations, we may not be able to sustain our distribution rate, we may have fewer funds available for investment in properties and other assets, and our stockholders’ overall returns may be reduced.

Our organizational documents permit us to pay distributions from any source without ~~limit.~~limit (other than those limits set forth under Maryland law). To the extent we fund distributions from borrowings, ~~or the net proceeds from the issuance of securities, as we have done,~~ we will have fewer funds available for investment in real estate properties and other real estate-related assets, and our stockholders’ overall returns may be reduced.

At times, we may ~~be forced~~need to borrow funds to pay distributions, ~~during unfavorable market conditions or during periods when funds from operations are needed to make capital expenditures and pay other expenses,~~ which could increase the costs to operate our ~~operating costs.~~business. Furthermore, if we cannot cover our distributions with cash flows from operations, we may be unable to sustain our distribution rate. For the year ended December 31, 2017, we paid gross distributions to our common stockholders of $123.3 million, including distributions reinvested through the DRIP of $49.1 million. For the year ended December 31, 2017, our net cash provided by operating activities was $108.9 million, which represents a shortfall of $14.4 million, or 11.7%, of our distributions paid, while our funds from operations (“FFO”) Attributable to Stockholders and Convertible Noncontrolling Interests were $84.2 million, which represents a shortfall of $39.1 million, or 31.7%, of the distributions paid. The shortfall was funded by proceeds from borrowings. For the year ended December 31, 2016, we paid distributions of $123.1 million, including distributions reinvested through the DRIP of $58.9 million. For the year ended December 31, 2016, our net cash provided by operating activities was $103.1 million, which represents a shortfall of $20.0 million, or 16.3%, of our distributions paid, while our FFO was $110.4 million, which represents a shortfall of $14.3 million, or 11.6% of our distributions paid. The shortfall was funded by proceeds from borrowings.

~~The actual value of shares that we repurchase under our SRP may be less than what we pay.~~

We repurchase shares under our SRP at the estimated value per share of our common stock. This value is likely to differ from the price at which a stockholder could resell his or her shares. Thus, when we repurchase shares of our common stock, the repurchase may be dilutive to our remaining stockholders.

~~We recently transitioned to a self-managed real estate investment trust and have limited operating experience being self-managed.~~

Effective October 4, 2017, we transitioned to a self-managed real estate investment trust following the closing of the PELP transaction. While we no longer bear the costs of the various fees and expense reimbursements previously paid to our former external advisor and its affiliates, our expenses now include the compensation and benefits of our officers, employees and consultants, as well as overhead previously paid by our former external advisor or their affiliates. Our employees now provide us services historically provided by our former external advisor and its affiliates. We are also now subject to potential liabilities that are commonly faced by employers, such as workers' disability and compensation claims, potential labor disputes, and other employee-related liabilities and grievances, and we bear the costs of the establishment and maintenance of any employee compensation plans. In addition, we have limited experience operating as a self-managed REIT and we may encounter unforeseen costs, expenses, and difficulties associated with providing those services on a self-advised basis. If we incur unexpected expenses as a result of our self-management, our results of operations could be lower than they otherwise would have been. Furthermore, our results of operations following our transition to self-management may not be comparable to our results prior to the transition.

The loss of or the inability to obtain key real estate professionals could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of our stockholders’ investments.

Our success depends to a significant degree upon the contributions of Jeffrey S. Edison, Chief Executive Officer and the Chairman of our Board; R. Mark Addy, Executive Vice President; Robert Myers, Chief Operating Officer; and Devin I. Murphy, Chief Financial Officer. We do not have employment agreements with these individuals, and they may not remain associated with us. If any of these persons were to cease their association with us, our operating results could suffer. We do not intend to maintain key person life insurance on any person. We believe that our future success depends, in large part, upon our ability to hire and retain highly skilled managerial, operational and marketing professionals. The market for such professionals is competitive, and we may be unsuccessful in attracting and retaining such skilled individuals. Further, we intend to establish strategic relationships with firms, as needed, which have special expertise in certain services or detailed knowledge regarding real properties in certain geographic regions. Maintaining such relationships will be important for us to effectively compete with other investors for properties and tenants in such regions. We may be unsuccessful in establishing and retaining such relationships. If we lose or are unable to obtain the services of highly skilled professionals or do not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of our stockholders’ investments may decline.

We have agreed to nominate Mr. Edison to our Board for each of the next ten succeeding annual meetings and for Mr. Edison to continue serving as Chairman of the Board until the third anniversary of the closing of the PELP transaction.

As part of the PELP transaction, we have agreed to nominate Jeffrey S. Edison, our Chief Executive Officer and the Chairman of our Board, to the Board for each of the ten succeeding annual meetings, subject to certain terminating events. As a result, it is possible that Mr. Edison may continue to be nominated as a director in circumstances when the independent directors would not otherwise have done so.

Our bylaws provide that Mr. Edison will continue to serve as Chairman of the Board until the third anniversary of the closing of the PELP transaction, subject to certain terminating events, including the listing of our common stock on a national securities exchange. As a result, Mr. Edison may continue to serve as Chairman of the Board in circumstances when the independent directors would not otherwise have selected him.

~~We are subject to conflicts of interest relating to the management of multiple REITs by our officers.~~

We and our management team serve as the sponsor and advisor of Phillips Edison Grocery Center REIT II, Inc. (“REIT II”), and Phillips Edison Grocery Center REIT III, Inc. (“REIT III”). We and REIT II and REIT III have overlapping investment objectives and investment strategies. As a result, we may be seeking to acquire properties and real estate-related investments at the same time as REIT II and/or REIT III. We have implemented certain procedures to help manage any perceived or actual conflicts among us and the REIT II and REIT III, including adopting an allocation policy to allocate property acquisitions among the three companies.

If we determine that an investment opportunity may be equally appropriate for more than one entity, then the entity that has had the longest period of time elapse since it was allocated an investment opportunity will be allocated such investment opportunity, subject to an expected right of first offer to be provided to REIT III. There can be no assurance that these policies will be adequate to address all of the conflicts that may arise or will address such conflicts in a manner that is favorable to us. Further, under our advisory agreements with REIT II and REIT III, we receive fees for various services, including, but not limited to, the day-to-day management of the Phillips Edison-sponsored REITs and transaction-related services. The terms of these advisory agreements were not the result of arm’s-length negotiations between independent parties and, as a result, the terms of these agreements may not be as favorable to us as they would have been if we had negotiated these agreements with unaffiliated third parties.

The Operating Partnership’s limited partnership agreement grants certain rights and protections to the limited partners, which may prevent or delay a change of control transaction that might involve a premium price for our shares of common stock.

In connection with the PELP transaction, we amended and restated the Operating Partnership’s limited partnership agreement to, among other things, grant certain rights and protections to the limited partners, including granting limited partners the right to consent to a change of control transaction. Furthermore, Mr. Edison currently has voting control over approximately 9.6% of the Operating Partnership’s operating partnership units (inclusive of those owned by us) and therefore could have a significant influence over votes on change of control transactions.

~~Our future results will suffer if we do not effectively manage our expanded portfolio and operations.~~

With the closing of the PELP transaction, we have an expanded portfolio and operations, and likely will continue to expand our operations through additional acquisitions and other strategic transactions, some of which may involve complex challenges. Our future success will depend, in part, upon our ability to manage expansion opportunities, integrate new operations into our existing business in an efficient and timely manner, successfully monitor our operations, costs, regulatory compliance and service quality and maintain other necessary internal controls.

There can be no assurance, however, regarding when or to what extent we will be able to realize the benefits of the PELP transaction, which may be difficult, unpredictable and subject to delays. We will be required to devote significant management attention and resources to integrating our business practices and operations with the newly acquired companies. It is possible that the integration process could result in the distraction of our management, the disruption of our ongoing business or inconsistencies in our operations, services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with operators, vendors and employees or to fully achieve the anticipated benefits of the PELP transaction. There may also be potential unknown or unforeseen liabilities, increased expenses, or delays associated with integrating the companies we acquired in the PELP transaction.

There can be no assurance that our expansion or acquisition opportunities will be successful, or that it will realize our expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

We cannot assure stockholders that we will be able to continue paying distributions at the rate currently paid.

We ~~expect~~intend to ~~continue our current distribution practices following the closing of the PELP transaction. Stockholders however~~evaluate distributions on a monthly basis throughout 2021. It is possible that stockholders may not receive distributions ~~following the closing of the PELP transaction~~ equivalent to those previously paid by us for various reasons, including the following:

as a result of the PELP transaction and the issuance of OP Units in connection with the PELP transaction, the total amount of cash required for us to pay distributions at our current rate has increased;

•we may not have enough cash to pay such distributions due to changes in our cash requirements, indebtedness, capital spending plans, operating cash flows, or financial ~~position or as a result of unknown or unforeseen liabilities incurred in connection with the PELP transaction;~~position;

•decisions on whether, when, and in what amounts to make any future distributions will remain at all times entirely at the discretion of the Board, which reserves the right to change our distribution practices at any time and for any reason; ~~and~~

•our Board may elect to retain cash to maintain or improve our credit ~~ratings~~ratings; and ~~financial position.~~

~~Existing and~~•the amount of distributions that our subsidiaries may distribute to us may be subject to restrictions imposed by state law, state regulators, and/or the terms of any current or future ~~stockholders~~indebtedness that these subsidiaries may incur.

Stockholders have no contractual or other legal right to distributions that have not been ~~declared.~~authorized by the Board and declared by the Company.

We ~~may be liable for potentially large, unanticipated costs arising from our acquisition of companies contributed in the PELP transaction.~~

Prior to completing the PELP transaction, we performed certain due diligence reviews of the business of PELP. Our due diligence review may not have adequately uncovered all of the contingent or undisclosed liabilities we may incur as a consequence of the PELP transaction. Any such liabilities could cause us to experience potentially significant losses, which could materially adversely affect our business, results of operations and financial condition.

~~In addition, we~~ have agreed to ~~honor~~nominate Mr. Jeffrey S. Edison, Chairman of the Board and ~~fulfill, following~~Chief Executive Officer, to our Board for each annual meeting through 2027.

As part of the ~~closing,~~transaction to acquire certain real estate assets and the ~~rights~~third party investment management business of PELP in exchange for stock and cash (the “PELP transaction”), we agreed to ~~indemnification and exculpation from liabilities for acts or omissions occurring at or prior~~nominate Mr. Jeffrey S. Edison to the ~~closing now existing~~Board for each annual meeting through 2027, subject to certain terminating events. As a result, it is possible that Mr. Edison may continue to be nominated as a director in ~~favor~~circumstances when the independent directors would not otherwise have nominated or elected him.

The Operating Partnership’s limited partnership agreement grants certain rights and protections to the ~~PELP transaction or subsidiary contained in (i)~~limited partners, including granting them the ~~organizational documents~~right to consent to a change of ~~such company or subsidiary~~control transaction. Furthermore, Mr. Edison currently has voting control over approximately 57% of the Operating Partnership’s limited partnership units (exclusive of those owned by us) and ~~(ii) all existing indemnification agreements~~therefore could have a significant influence over votes on change of such companies and their subsidiaries. For six years after the closing, we may not amend, modify or repeal the organizational documents of companies contributed under the PELP transaction and their subsidiaries in any way that would adversely affect such rights. We may incur substantial costs to address such claims and are limited in our ability to modify such indemnification obligations.control transactions.

The tax protection agreement, during its term, could limit the Operating Partnership’s ability to sell or otherwise dispose of certain properties and may require the Operating Partnership to maintain certain debt levels that otherwise would not be required to operate its business.

We and the Operating Partnership entered into a tax protection agreement at the closing of the PELP transaction, pursuant to which if the Operating ~~Partnership~~Partnership: (i) sells, exchanges, transfers, conveys or otherwise disposes of certain properties in a taxable transaction for a period of ten years commencing on the ~~closing,~~closing; or (ii) fails, prior to the expiration of such period, to maintain minimum levels of indebtedness that would be allocable to each protected partner for tax purposes or, alternatively, fails to offer such protected partners the opportunity to guarantee specific types of the Operating ~~Partnership s~~Partnership’s indebtedness in order to enable such partners to continue to defer certain tax liabilities, the Operating Partnership will indemnify each affected protected partner against certain resulting tax liabilities. Therefore, although it may be in the stockholders’ best interest for us to cause the Operating Partnership to sell, exchange, transfer, convey or otherwise dispose of one of these properties, it may be economically prohibitive for us to do so during the ~~10-year~~ten year protection period because of these indemnity obligations. Moreover, these obligations may require us to cause the Operating Partnership to maintain more or different indebtedness than we would otherwise require for our business. As a result, the tax protection agreement will, during its term, restrict our ability to take actions or make decisions that otherwise would be in our best interests.

~~General~~

If the fiduciary of an employee benefit plan subject to ERISA (such as a profit sharing, Section 401(k) or pension plan) or an owner of a retirement arrangement subject to Section 4975 of the Internal Revenue Code (such as an individual retirement account) fails to meet the fiduciary and other standards under ERISA or the Internal Revenue Code (“IRC”) as a result of an investment in our stock, the fiduciary could be subject to penalties and other sanctions.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit sharing, Section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the IRC (such as an individual retirement account or “IRA”) that are investing in shares of our common stock. Fiduciaries and IRA owners investing the assets of such a plan or account in our common stock should satisfy themselves that:

•the investment is consistent with their fiduciary and other obligations under ERISA and the IRC;

•the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

•the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the IRC;

•the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA;

•the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;

•our stockholders will be able to comply with the requirements under ERISA and the IRC to value the assets of the plan or IRA annually; and

•the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the IRC.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the IRC may result in the imposition of civil and criminal penalties and could subject the fiduciary to claims for damages or for equitable remedies, including liability for investment losses, and if an investment in our shares constitutes a prohibited transaction under ERISA or the IRC, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. In addition, the investment transaction must be undone. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified as a tax-exempt account, and all of the assets of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in our common stock.

If stockholders invested in our shares through an IRA or other retirement plan, they may be limited in their ability to withdraw required minimum distributions.

If stockholders established an IRA or other retirement plan through which they invested in our shares, federal law may require them to withdraw required minimum distributions (“RMDs”) from such plan in the future as they may not be able to have their shares repurchased at a time in which they need liquidity to satisfy the RMD requirements under their IRA or other retirement plan. A repurchase, if available, may be at a price that is less than the price at which the shares were initially purchased or the current EVPS. If stockholders fail to withdraw RMDs from their IRA or other retirement plan, they may be subject to certain tax penalties.

Risks Related to ~~Investments~~the Retail Industry

The ongoing COVID-19 pandemic has had, and is expected to continue to have, a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. The COVID-19 pandemic has caused, and is expected to continue to cause, significant disruptions to the United States and global economy and has contributed to significant volatility and negative pressure in ~~Real Estate~~financial markets. The global impact of the outbreak is continually evolving and, as additional cases of the virus are identified, many countries, including the United States, reacted by instituting quarantines, restrictions on travel, and/or mandatory closures of businesses. Certain states and cities, including where our properties are located, also reacted by instituting quarantines, restrictions on travel, “shelter-in-place” or “stay-at-home” rules, restrictions on types of businesses that may continue to operate, and/or restrictions on the types of construction projects that may continue. In May 2020, many state and local governments began lifting, in whole or in part, the “stay-at-home” mandates, effectively removing or lessening the limitations on travel and allowing many businesses to reopen in full or limited capacity.

~~Economic~~The COVID-19 pandemic has impacted our business and ~~regulatory changes~~financial performance, and we expect this impact to continue. Our retail and service-based Neighbors depend on in-person interactions with their customers to generate unit-level profitability, and the COVID-19 pandemic has decreased, and may continue to decrease, customers’ willingness to frequent, and mandated “shelter-in-place” or “stay-at-home” orders may prevent customers from frequenting our Neighbors’ businesses, which may result in their inability to maintain profitability and make timely rental payments to us under their leases or to otherwise seek lease modifications or to declare bankruptcy. At the peak of the pandemic-related closure activity, for our wholly-owned properties and those owned through our joint ventures, our temporary closures reached approximately 2,100 Neighbors, or 37% of all Neighbor spaces, totaling 27% of our annualized base rent (“ABR”) and 22% of our gross leasable area (“GLA”). As of March 8, 2021, 98% of our occupied Neighbor spaces, totaling 99% of our ABR and GLA, are open for business. Certain Neighbors remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the ~~real estate~~spread of COVID-19. These actions could result in increased permanent store closings and could reduce the demand for leasing space in our shopping centers and result in a decline in average rental rates on expiring leases.

While most of our Neighbors have reopened, we cannot presently determine how many of the Neighbors that remain closed will reopen, or whether a portion of those that have reopened will be required by government mandates to temporarily close again or will encounter financial difficulties that require them to close permanently. We believe substantially all Neighbors,

including those that were required to temporarily close under governmental mandates, are contractually obligated to continue with their rent payments as documented in our lease agreements with them. However, we believe it is best to begin negotiation of relief only once a Neighbor has reopened and made payments toward rent and recovery charges accrued. As of March 8, 2021, inclusive of our prorated share of properties owned through our joint ventures, we have executed payment plans with our Neighbors agreeing to defer approximately $8.7 million in rent and related charges, and we granted rent abatements totaling approximately $4.2 million. These payment plans and rent abatements represented approximately 2% and 1% of portfolio ABR, respectively. The weighted-average remaining term over which we expect to receive payment on executed payment plans is approximately twelve months. We are in negotiations with additional Neighbors, which we believe will lead to more Neighbors repaying their past due charges. As of March 8, 2021, we have collected approximately 93% of rent and recoveries billed during the second quarter of 2020, approximately 95% of rent and recoveries billed during the third quarter, and over 95% of rent and recoveries billed during the fourth quarter. Further, as of March 8, 2021, our collections for January and February 2021 were approximately 94% in total. In the event of any default by a Neighbor under its lease agreement or relief agreement, we may not be able to fully recover, and/or may experience delays in recovering and additional costs in enforcing our rights as landlord to recover, amounts due to us under the terms of the lease agreement and/or relief agreement. Additionally, certain Neighbors have declared bankruptcy as a result of the effects of the pandemic. As of December 31, 2020, we have several Neighbors currently in bankruptcy proceedings who continue to occupy space in our centers where we have not yet received notice that the lease has been assumed or rejected, representing an exposure of less than 1% of our total ABR.

Moreover, the ongoing COVID-19 pandemic, restrictions intended to prevent and mitigate its spread, resulting consumer behavior, and the economic slowdown or recession could have additional adverse effects on our business, including with regards to:

•the ability and willingness of our Neighbors to renew their leases upon expiration, our ability to re-lease the properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing Neighbor, and obligations we may incur in connection with the replacement of an existing Neighbor, particularly in light of the adverse impact to the financial health of many retailers and service providers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and the conditions under which certain potential Neighbors will be able to operate physical retail locations in the future;

•a potential sustained or permanent increase in online shopping instead of shopping at physical retail properties, thereby reducing demand for space in our shopping centers and possible related reductions in rent or increased costs to lease space;

•the adverse impact of current economic conditions on the market ~~generally may decrease the~~ value of our ~~investments~~real estate portfolio and ~~weaken~~ our third-party investment management business, and consequently on the estimated value per share of our common stock;

•the adverse impact of the current economic conditions on our ability to effect a liquidity event at an attractive price or at all in the near term and for a potentially lengthy period of time;

•the financial impact and continued economic uncertainty that could continue to negatively impact our ability to pay distributions to our stockholders and/or to repurchase shares;

•to the extent we were seeking to sell properties in the near term, significantly greater uncertainty regarding our ability to do so at attractive prices or at all;

•anticipated returns from development and redevelopment projects, which have been prioritized to support the reopening of our Neighbors and new leasing activity, or deferred if possible;

•the broader impact of the severe economic contraction due to the COVID-19 pandemic, the resulting increase in unemployment that has occurred in the short-term and its effect on consumer behavior, and negative consequences that will occur if these trends are not reversed in a timely way;

•state, local, or industry-initiated efforts, such as a rent freeze for Neighbors or a suspension of a landlord’s ability to enforce evictions, which may affect our ability to collect rent or enforce remedies for the failure to pay rent;

•severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which could make it difficult for us to access debt and equity capital on attractive terms, or at all, and impact our ability to fund business operations and activities and repay liabilities on a timely basis;

•our ability to pay down, refinance, restructure, or extend our indebtedness as it becomes due, and our potential inability to comply with the financial covenants of our credit facility and other debt agreements, which could result in a default and potential acceleration of indebtedness and impact our ability to make additional borrowings under our credit facility or otherwise in the future; and

•the potential negative impact on the health of our personnel, particularly if a significant number of them and/or key personnel are impacted, and the potential impact of adaptations to our operations in order to protect our personnel, such as remote work arrangements, could introduce operational risk, including but not limited to cybersecurity risks, and could impair our ability to manage our business.

We temporarily suspended stockholder distributions beginning with the April 2020 distribution, and subsequently reinstated distributions beginning December 2020, in an effort to preserve cash due to current economic uncertainty, and we may choose to do the same in the future. Additionally, we may in the future choose to pay distributions in shares of our common stock rather than solely in cash, which may result in our stockholders having a tax liability with respect to such distributions that exceed the amount of cash received, if any.

While the rapid developments regarding the COVID-19 pandemic preclude any prediction as to its ultimate adverse impact, the current economic, political, and social environment presents material risks and uncertainties with respect to our and our Neighbors’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy debt service obligations.

The continued shift in retail sales towards e-commerce may adversely affect our revenues and cash flows.

Retailers are increasingly affected by e-commerce and changes in customer buying habits, which have been further accelerated as a result of the COVID-19 pandemic, including the delivery or curbside pick-up of items ordered online. Retailers are considering these e-commerce trends when making decisions regarding their brick and mortar stores and how they will compete and innovate in a rapidly changing e-commerce environment. Many retailers in our shopping centers provide services or sell goods that are unable to be performed online (such as haircuts, massages, and fitness centers) or that have historically been less likely to be purchased online (such as grocery stores, restaurants, and coffee shops); however, the continuing increase in e-commerce sales in all retail categories (including online orders for immediate delivery or pickup in store) may cause retailers to adjust the size or number of retail locations in the future or close stores. Our grocer Neighbors are incorporating e-commerce concepts through home delivery or curbside pickup, which could reduce foot traffic at our centers. This shift may adversely affect our occupancy and rental rates, which would affect our revenues and cash flows. Changes in shopping trends as a result of the growth in e-commerce may also affect the profitability of retailers that do not adapt to changes in market conditions. These conditions may adversely impact our results of operations and cash flows if we are unable to meet the needs of our Neighbors or if our Neighbors encounter financial difficulties as a result of changing market conditions. While we devote considerable effort and resources to analyze and respond to Neighbor trends, Neighbor and consumer preferences, and consumer spending patterns, we cannot predict with certainty what future Neighbors will want, what future retail spaces will look like, or how much revenue will be generated at traditional brick and mortar locations. If we are unable to anticipate and respond promptly to trends in the market (such as space for a drive through or curbside pickup), our occupancy levels and rental rates may decline.

Risks Related to Real Estate Investments and Operations

Adverse economic, regulatory, market, and real estate conditions may adversely affect our financial condition, operating ~~results.~~results, and cash flows.

Our portfolio is predominantly comprised of neighborhood grocery-anchored shopping centers, and during the year ended December 31, 2020, our holdings in Florida and California accounted for 12.5% and 10.4%, respectively, of our ABR (including our wholly-owned portfolio as well as the prorated portion of properties ~~and their~~owned through our joint ventures). Therefore, our performance ~~are~~is subject to ~~the~~ risks ~~typically~~ associated with ~~real estate, including:~~

~~downturns~~owning and operating neighborhood grocery-anchored shopping centers, and may be further subject to additional risk as a result of the geographic concentration noted above. Such risks include, but are not limited to: (i) changes in national, regional, and local economic ~~conditions;~~

climates or demographics; (ii) competition from other available properties and e-commerce, and the attractiveness of our properties to our Neighbors; (iii) increased competition for real estate assets targeted by our investment ~~strategy;~~

strategies; (iv) adverse local conditions, such as oversupply or reduction in demand for similar properties in an area and changes in real estate zoning laws that may reduce the desirability of real estate in an area;

(v) vacancies, changes in market rental rates, and the need to periodically repair, renovate, and ~~re-let~~re-lease space;

(vi) ongoing disruption and/or consolidation in the retail sector, the financial stability of our Neighbors and the overall financial condition of our Neighbors, including their ability to pay rent and expense reimbursements; (vii) increases in operating costs, including common area expenses, utilities, insurance and real estate taxes, which are relatively inflexible and generally do not decrease if revenue or occupancy decreases; (viii) increases in the costs to repair, renovate, and re-lease space; (ix) changes in interest rates and the availability of ~~permanent mortgage~~ financing, which may render the sale or refinance of a property or loan difficult or unattractive;

(x) earthquakes, tornadoes, hurricanes, wildfires, or other natural disasters, civil unrest, terrorist acts, or acts of war, which may result in uninsured or underinsured losses; (xi) epidemics, pandemics, or other widespread outbreaks or resulting public fear that disrupt the businesses of our Neighbors causing them to fail to pay rent on time or at all; and (xii) changes in ~~tax,~~laws and governmental regulations, including those governing usage, zoning, the environment, and taxes. These and other factors could adversely affect our financial condition, operating results, and cash flows.

Our real estate ~~environmental,~~assets may decline in value and ~~zoning laws;~~be subject to significant impairment losses, which may reduce our net income.

Our real estate properties are carried at cost less depreciation unless circumstances indicate that the carrying value of these assets may not be recoverable. We routinely evaluate whether there are any impairment indicators, including property operating performance, property occupancy trends, and actual marketing or listing price of properties being targeted for disposition, such that the value of the real estate properties (including any related tangible or intangible assets or liabilities) may not be recoverable. If, through our evaluation, we determine that a given asset exhibits such indicator, we then compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of Neighbor improvements, leasing commissions, anticipated holding periods, and assumptions regarding the residual value upon disposition, including the estimated exit capitalization rate. These key assumptions are subjective in nature and may differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the holding period of ~~high interest rates~~an asset or asset group, which may result in an impairment loss and ~~tight money supply; and~~such loss may be material to our financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value.

~~the illiquidity~~The fair value of real estate ~~investments generally.~~

~~Any~~assets is subjective and is determined through the use of ~~the above factors, or~~comparable sales information and other market data if available. These subjective assessments have a ~~combination thereof, could result in a decrease in the value of our investments, which would have an adverse~~direct effect on our ~~operations, on~~net income because recording an impairment charge results in an immediate negative adjustment to net income, which may be material. During the years ended December 31, 2020 and 2019, we incurred impairment charges of $2.4 million and $87.4 million, respectively, related to real estate assets currently under contract or actively marketed for sale at a disposition price that was less than the carrying value. We have recorded such impairment charges as we have been selling non-core assets to improve the quality of our ~~ability~~portfolio. We continue to ~~pay distributions~~sell non-core assets and may potentially recognize impairments in future quarters. Accordingly, there can be no assurance that we will not record additional impairment charges in the future related to our ~~stockholders~~assets.

Our revenues and ~~on the value of our stockholders’ investments.~~

~~We depend on our tenants for revenue, and, accordingly, our revenue and our ability to make distributions to our stockholders is dependent upon~~cash flows will be affected by the success and economic viability of our ~~tenants.~~anchor Neighbors.

~~We depend upon tenants for revenue. Rising vacancies~~Anchor Neighbors (a Neighbor occupying 10,000 or more square feet) occupy large stores in our shopping centers, pay a significant portion of the total rent at a property, and contribute to the success of other Neighbors by attracting shoppers to the property. Our revenues and cash flows may be adversely affected by the loss of revenues and additional costs in the event a significant anchor Neighbor: (i) becomes bankrupt or insolvent; (ii) experiences a downturn in its business; (iii) materially defaults on its lease; (iv) decides not to renew its lease as it expires; (v) renews its lease at lower rental rates and/or requires tenant improvements; or (vi) renews its lease but reduces its store size, which results in down-time and additional tenant improvement costs to us to re-lease the space. Some anchors have the right to vacate their space and may prevent us from re-tenanting by continuing to comply and pay rent in accordance with their lease agreement. Vacated anchor space, including space owned by the anchor, can reduce rental revenues generated by the shopping center in other spaces because of the loss of the departed anchor's customer drawing power. In the event that we are unable to re-lease the vacated space to a new anchor Neighbor in such situations, we may incur additional expenses in order to re-model the space to be able to re-lease the space to more than one Neighbor.

If a significant Neighbor vacates a property, co-tenancy clauses in select lease contracts may allow other Neighbors to modify or terminate their rent or lease obligations. Co-tenancy clauses have several variants: they may allow a Neighbor to postpone a store opening if certain other Neighbors fail to open their stores; they may allow a Neighbor to close its store prior to lease expiration if another Neighbor closes its store prior to lease expiration; or they may allow a Neighbor to pay reduced levels of rent until a certain number of Neighbors open their stores within the same shopping center.

The leases of some anchor Neighbors may permit the anchor Neighbor to transfer its lease to another retailer. The transfer to a new anchor Neighbor could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center. A lease transfer to a new anchor Neighbor could also allow other Neighbors to make reduced rental payments or to terminate their leases.

A significant percentage of our revenues is derived from non-anchor Neighbors, and our net income and ability to make distributions to stockholders may be adversely affected if these Neighbors are not successful.

A significant percentage of our revenues is derived from non-anchor Neighbors. Such Neighbors may be more vulnerable to negative economic conditions as they have more limited resources than anchor Neighbors. Significant Neighbor distress across ~~commercial real estate result in increased pressure on real estate investors~~our portfolio could adversely affect our financial condition, operating results, and ~~their property managers to find new tenants and keep existing tenants.~~cash flows. A property may incur vacancies either by the expiration of a ~~tenant~~Neighbor lease, the continued default of a ~~tenant~~Neighbor under its lease, or the early termination of a lease by a ~~tenant.~~Neighbor. If vacancies continue for a long period of time, we may suffer reduced revenues resulting in less cash available to distribute to stockholders. In order to maintain ~~tenants,~~Neighbors, we may have to offer inducements, such as free rent and tenant improvements, to compete for attractive ~~tenants.~~Neighbors. If we are unable to attract the right type or mix of non-anchor Neighbors into our shopping centers, our revenues and cash flows may be adversely affected. In addition, if we are unable to attract additional or replacement ~~tenants,~~Neighbors, the resale value of the property could be diminished, even below our cost to acquire the property, because the market value of a particular property depends principally upon the value of the cash flow generated by the leases associated with that property. Such a reduction on the resale value of a property could also reduce the value of our stockholders’ investments.

~~Our revenue will~~We face considerable competition in the leasing market and may be affected by the success and economic viability of our anchor retail tenants. Our reliance on single or significant tenants in certain buildings may decrease our ability to lease vacated space and adversely affect the returns on our stockholders’ investments.

In the retail sector, a tenant occupying all or a large portion of the gross leasable area of a retail center, commonly referred to as an anchor tenant, may become insolvent, may suffer a downturn in business, may decide notunable to renew ~~its lease,~~leases or re-lease space as leases expire. Consequently, we may ~~decide~~be required to ~~cease its operations at the retail center but continue~~make rent or other concessions and/or incur significant capital expenditures to ~~pay rent. Any of these events could result in a reduction or cessation in rental payments to us~~retain and attract Neighbors, which could adversely affect our financial ~~condition. A~~condition, operating results, and cash flows.

There are numerous shopping venues, including other shopping centers and e-commerce, that compete with our portfolio in attracting and retaining retailers. This competition may hinder our ability to attract and retain Neighbors, leading to increased vacancy rates, reduced rents, and/or increased capital investments. For leases that renew, rental rates upon renewal may be lower than current rates. For those leases that do not renew, we may not be able to promptly re-lease the space on favorable terms or with reasonable capital investments. In these situations, our financial condition, operating results, and cash flows could be adversely affected. See “Part I, Item 2. Properties” of this filing on Form 10-K for information regarding scheduled lease ~~termination~~expirations and leases renewed subsequent to December 31, 2020 and the ABR of new leases signed during 2020.

We may be unable to sell properties when desired, at an attractive price, or ~~cessation~~at all, and the sale of ~~operations~~a property could cause significant income tax payments.

Our properties, including related tangible and intangible assets, represent the majority of our total consolidated assets and they may not be readily convertible to cash. As a result, our ability to sell one or more of our properties, including properties held in joint ventures, in response to changes in economic, industry, or other conditions, may be limited. The real estate market is affected by ~~an anchor tenant could~~many factors, such as general economic conditions, availability and terms of financing, interest rates and other factors, including supply and demand for space, that are beyond our control. There may be less demand for lower quality properties that we have identified for ultimate disposition in markets with uncertain economic or retail environments, and where buyers are more reliant on the availability of third party mortgage financing. If we want to sell a property, we can provide no assurance that we will be able to dispose of it in the desired time period or at all, or that the sales price of a property will be attractive at the relevant time or even exceed the carrying value of our investment. Moreover, if a property is mortgaged, we may not be able to obtain a release of the lien on that property without the payment of a substantial prepayment penalty, which may restrict our ability to dispose of the property, even though the sale might otherwise be desirable.

Some of our properties have a low tax basis, which may result in ~~lease terminations or reductions in rent by other tenants whose leases may permit cancellation or rent reduction if another tenant terminates its lease or ceases its operations at~~a taxable gain on sale. We intend to utilize tax-deferred exchanges under Section 1031 of the IRC to mitigate taxable income (“Section 1031 Exchanges”); however, there can be no assurance that ~~shopping center.~~we will identify exchange properties that meet our investment objectives for acquisitions. In ~~such~~the event that we do not utilize Section 1031 Exchanges, we may be required to distribute the gain proceeds to stockholders or pay income tax, which may reduce our cash flows available to fund our commitments and distributions to stockholders. Moreover, it is possible that future legislation could be enacted that could modify or repeal the laws with respect to Section 1031 Exchanges, which

could make it more difficult or impossible for us to dispose of properties on a tax-deferred basis. The current administration has also indicated its intention to modify the laws with respect to Section 1031 Exchanges in a manner that could make it more difficult or impossible for us to dispose of properties on a tax-deferred basis.

We may be unable to collect balances due from Neighbors in bankruptcy.

The bankruptcy or insolvency of a significant Neighbor or a number of smaller Neighbors may adversely affect our financial condition and our ability to pay distributions to our stockholders. Generally, under bankruptcy law, a debtor Neighbor has the legal right to reject any or all of their leases and close related stores. If the Neighbor rejects the lease, we will have a claim against the Neighbor’s bankruptcy estate. Although rent owing for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense priority and paid in full, pre-bankruptcy arrears and amounts owing under the remaining term of the lease will be afforded general unsecured claim status (absent collateral securing the claim). General unsecured claims are the last claims paid in a bankruptcy, and, therefore, funds may not be available to pay such claims in full. Moreover, amounts owing under the remaining term of the lease will be capped. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to recover our claim and to re-lease the vacated space. Similarly, the leases of some anchor tenants may permit the anchor tenant to transfer its lease to another retailer. The transfer to a new anchor tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center. A lease transfer to a new anchor tenant could also allow other tenants to make reduced rental payments or to terminate their leases. In the event that ~~we are unable to re-lease the vacated space to~~ a ~~new anchor tenant,~~Neighbor with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we may ~~incur additional expenses~~experience a significant reduction in ~~order to re-model the space to~~our revenues and may not be able to ~~re-lease~~collect all pre-petition amounts owed by the ~~space to more than one tenant.~~bankrupt Neighbor.

~~E-commerce can have a negative impact on our business.~~

The use of the internet by consumers continues to gain popularity and the migration towards e-commerce is expected to continue. This increase in internet sales could result in a downturn in the business of our current tenants in their “brick and mortar” locations and could affect the way future tenants lease space. While we devote considerable effort and resources to analyze and respond to tenant trends, preferences and consumer spending patterns, we cannot predict with certainty what future tenants will want, what future retail spaces will look like and how much revenue will be generated at traditional “brick and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market, our occupancy levels and rental amounts may decline.

~~If we enter into long-term~~Long-term leases with ~~retail tenants, those leases~~our Neighbors may not result in fair value over time.

From time to time, we enter into long-term leases with our shopping center Neighbors. Long-term leases do not typically allow for significant changes in rental payments and do not expire in the near term. If we do not accurately judge the potential for increases in market rental rates when negotiating these long-term leases, significant increases in future property operating costs could result in receiving less than fair value from these ~~leases. Such circumstances~~leases, which would adversely affect our revenues and the funds available for ~~distribution.~~

~~The bankruptcy or insolvency of a major tenant may adversely impact our operations and our ability to pay~~ distributions to stockholders.

The bankruptcy or insolvency of a significant tenant or a number of smaller tenants may have an adverse impact on financial condition and our ability to pay distributions to our stockholders. Generally, under bankruptcy law, a debtor tenant has 120 days to exercise the option of assuming or rejecting the obligations under any unexpired lease for nonresidential real property, which period may be extended once by the bankruptcy court. If the tenant assumes its lease, the tenant must cure all defaults under the lease and may be required to provide adequate assurance of its future performance under the lease. If the tenant rejects the lease, we will have a claim against the tenant’s bankruptcy estate. Although rent owing for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense priority and paid in full, pre- bankruptcy arrears and amounts owing under the remaining term of the lease will be afforded general unsecured claim status (absent collateral securing the claim). Moreover, amounts owing under the remaining term of the lease will be capped. Other than equity and subordinated claims, general unsecured claims are the last claims paid in a bankruptcy, and therefore, funds may not be available to pay such claims in full. See Item 2. Properties, for information related to concentration of our tenants.

We may be restricted from re-leasing space to certain Neighbors at our ~~retail properties.~~particular shopping centers.

~~Leases with retail tenants may~~Some of our leases contain provisions ~~giving the particular tenant~~that give a specific Neighbor the exclusive right to sell particular types of ~~merchandise~~goods or ~~provide specific types of~~ services within ~~the particular retail~~that shopping center. These provisions may limit the number and types of prospective ~~tenants interested in leasing~~Neighbors to which we are able to lease space in a particular ~~retail property.~~

~~Competition with third parties~~shopping center, which may result in ~~acquiring properties~~increased costs to find a permissible Neighbor and ~~other investments may reduce our profitability and~~decreased revenues if one or more spaces sit vacant or we have to accept lower rental rates or a less qualified Neighbor to fill the ~~return on our stockholders’ investments.~~space.

We face competition ~~from various entities for investment~~and other risks in pursuing acquisition opportunities ~~in retail properties, including other REITs, pension funds, insurance companies, investment funds~~that could increase the cost of such acquisitions and/or limit our ability to grow, and ~~companies, partnerships, and developers. Many of these entities have substantially greater financial resources than~~ we ~~do and~~ may not be able to ~~accept more~~generate expected returns or successfully integrate completed acquisitions into our existing operations.

We continue to evaluate the market for acquisition opportunities, and we may acquire properties when we believe strategic opportunities exist. Our ability to acquire properties on favorable terms and successfully integrate, operate, reposition, or redevelop them is subject to several risks. We may be unable to acquire a desired property because of competition from other real estate investors, including from other well-capitalized REITs and institutional investment funds. Even if we are able to acquire a desired property, competition from such investors may significantly increase the purchase price. We may also abandon acquisition activities after expending significant resources to pursue such opportunities. Once we acquire new properties, these properties may not yield expected returns for several reasons, including: (i) failure to achieve expected occupancy and/or rent levels within the projected time frame, if at all; (ii) inability to successfully integrate new properties into existing operations; and (iii) exposure to fluctuations in the general economy, including due to the time lag between signing definitive documentation to acquire a new property and the closing of the acquisition. If any of these events occur, the cost of the acquisition may exceed initial estimates or the expected returns may not achieve those originally contemplated, which could adversely affect our financial condition, operating results, and cash flows.

We share ownership of our joint ventures and do not have exclusive decision-making power, and as such, we are unable to ensure that our objectives will be pursued.

We have invested capital, and may invest additional capital, in joint ventures instead of owning directly. In these investments, we do not have exclusive decision-making power over the development, financing, leasing, management, and other aspects of these investments. As a result, the joint venture partners might have interests or goals that are inconsistent with ours, take action contrary to our interests, or otherwise impede our objectives. These activities are subject to the same risks as our investments in our wholly-owned properties. In addition, these investments and other future similar investments may involve risks that would not be present were a third party not involved, including the possibility that the joint venture partners might become bankrupt, suffer a deterioration in their creditworthiness, or fail to fund their share of required capital contributions. Conflicts arising between us and our partners may be difficult to manage and/or resolve and it could be difficult to manage or otherwise monitor the existing business arrangements.

In addition, joint venture arrangements may decrease our ability to manage risk ~~than we can prudently manage, including~~and implicate additional risks, such as: (i) potentially inferior financial capacity, diverging business goals and strategies and the need for our venture partners’ continued cooperation; (ii) our inability to take actions with respect to the ~~creditworthiness of a tenant or the geographic location of its investments. Competition from these entities may reduce the number of suitable investment opportunities offered~~joint ventures’ activities that we believe are favorable to us if our joint venture partners do not agree; (iii) our inability to control the legal entities that have title to the real estate associated with the joint ventures; (iv) our lenders may not be easily able to sell our joint venture assets and investments or ~~increase the bargaining power of property owners seeking to sell.~~

Inmay view them less favorably as collateral, which could negatively affect our ~~due diligence review of potential investments, we may rely on third-party consultants~~liquidity and ~~advisors and representations made by sellers of potential portfolio properties, and~~capital resources; (v) our joint venture partners can take actions that we may not ~~identify all relevant facts that may be necessary or helpful in evaluating potential investments.~~

Before making investments, we will typically conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. Due diligence may entail evaluation of important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants, investment banks and other third parties may be involved in the due diligence process to varying degrees depending on the type of investment, the costs of which will be borne by us. Such involvement of third-party advisors or consultants may present a number of risks primarily relating to our reduced control of the functions that are outsourced. In addition, if we are unable to timely engage third-party providers, the ability to evaluate and acquire more complex targets could be adversely affected. When conducting due diligence and making an assessment regarding a potential investment, we will rely on the resources available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence investigation that the we carry out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful. There can be no assurance that attempts to provide downside protection with respect to investments, including pursuant to risk management procedures described in this Annual Report on Form 10-K, will achieve their desired effect and potential investors should regard an investment in us as being speculative and having a high degree of risk.

~~There can be no assurance that we will~~ be able to ~~detect~~anticipate or prevent, ~~irregular accounting, employee misconduct~~which could result in negative impacts on our debt and equity; and (vi) our joint venture partners’ business decisions or other ~~fraudulent practices during the due diligence phase~~actions or ~~during~~omissions may result in harm to our ~~efforts to monitor the investment on an ongoing basis~~reputation or that any risk management procedures implemented by us will be adequate. In the event of fraud by the seller of any portfolio property, we may suffer a partial or total loss of capital invested in that property. An additional concern is the possibility of material misrepresentation or omission on the part of the seller. Such inaccuracy or incompleteness may adversely affect the value of our investments in such portfolio property. We will rely upon the accuracy and completeness of representations made by sellers of portfolio properties in the due diligence process to the extent reasonable when we make our investments, but cannot guarantee such accuracy or completeness.

~~We may be unable to successfully integrate and operate acquired properties, which may have a material adverse effect on our business and operating results.~~

Even if we are able to make acquisitions on favorable terms, we may not be able to successfully integrate and operate them. We may be required to invest significant capital and resources after an acquisition to maintain or grow the properties that we acquire. In addition, we may need to adapt our management, administrative, accounting, and operational systems, or hire and retain sufficient operational staff, to integrate and manage successfully any future acquisitions of additional assets. These and other integration efforts may disrupt our operations, divert management’s attention away from day-to-day operations and cause us to incur unanticipated costs. The difficulties of integration may be increased by the necessity of coordinating operations in geographically dispersed locations. Our failure to integrate successfully any acquisitions into our portfolio could have a material adverse effect on our business and operating results. Further, acquired properties may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition. The failure to discover such issues prior to such acquisition could have a material adverse effect on our business and results of operations.

~~Our properties may be subject to impairment charges.~~

We routinely evaluate our real estate investments for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, tenant performance and lease structure. For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. Since our investment focus is on properties net leased to a single tenant, the financial failure of, or other default by, a single tenant under its lease may result in a significant impairment loss. If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded. Negative developments in the real estate market may cause us to reevaluate the business and macro-economic assumptions used in its impairment analysis. Changes in our assumptions based on actual results may have a material impact on our financial statements.

~~We may obtain only limited warranties when we purchase a property and would have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property.~~

The seller of a property often sells the property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The

~~purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental income from that property.~~

Changes in supply of or demand for similar real properties in a particular area may increase the price of real properties we seek to purchase and decrease the price of real properties when we seek to sell them.

The real estate industry is subject to market forces. We are unable to predict certain market changes, including changes in supply of, or demand for, similar real properties in a particular area. Any potential purchase of an overpriced asset could decrease our rate of return on these investments and result in lower operating results and overall returns to our stockholders.

~~Our portfolio may be concentrated in a limited number of industries, geographies or~~ investments.

Our portfolio may be heavily concentrated at any time in only a limited number of industries, geographies or investments, and, as a consequence, our aggregate return may be substantially affected by the unfavorable performance of even a single investment. As of December 31, 2017, approximately 14.8% and 10.2% of our properties were located in Florida and Georgia, respectively. To the extent we concentrate our investments in a particular type of asset or geography, our portfolio may become more susceptible to fluctuations in value resulting from adverse economic or business conditions affecting that particular type of asset or geography. For investments that we plan to finance (directly or by selling assets), there is a risk that such financing may not be completed, which could result in us holding a larger percentage of our assets in a single investment and asset type than desired. Investors have no assurance as to the degree of diversification in our investments, either by geographic region or asset type.

We may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so, limiting our ability to pay cash distributions to our stockholders.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties on the terms that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties on the terms we want could reduce our cash flow and limit our ability to make distributions to our stockholders and could reduce the value of our stockholders’ investments. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Our inability to sell a property when we desire to do so may cause us to reduce our selling price for the property. Any delay in our receipt of proceeds, or diminishment of proceeds, from the sale of a property could adversely affect our ability to pay distributions to our stockholders.

We have acquired, and may continue to acquire or finance, properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.

A lock-out provision is a provision that prohibits the prepayment of a loan during a specified period of time. Lock-out provisions may include terms that provide strong financial disincentives for borrowers to prepay their outstanding loan balance and exist in order to protect the yield expectations of lenders. We currently own properties, and may acquire additional properties in the future, that are subject to lock-out provisions. Lock-out provisions could materially restrict us from selling or otherwise disposing of or refinancing properties when we may desire to do so. Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties. Lock-out provisions could impair our ability to take other actions during the lock-out period that could be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of our shares relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.

If we set aside insufficient capital reserves, we may be required to defer necessary capital improvements.

If we do not have enough reserves for capital to supply needed funds for capital improvements throughout the life of the investment in a property and there is insufficient cash available from our operations, we may be required to defer necessary improvements to a property, which may cause that property to suffer from a greater risk of obsolescence or a decline in value, or a greater risk of decreased cash flow as a result of fewer potential ~~tenants~~Neighbors being attracted to the property. If this happens, we may not be able to maintain projected rental rates for affected properties, and our results of operations may be negatively ~~impacted.~~affected.

~~If we are unable to obtain funding for future capital needs, cash distributions to~~We actively reinvest in our ~~stockholders and the value of our investments could decline.~~

When tenants do not renew their leases or otherwise vacate their space, we will often need to expend substantial funds for improvements to the vacated space in order to attract replacement tenants. Even when tenants do renew their leases, we may agree to make improvements to their space as part of our negotiation. If we need additional capitalportfolio in the ~~future to improve or maintain our properties or for any other reason, we may~~form of development and redevelopment projects, which have to obtain financing from sources, beyond our funds from operations, such as borrowings or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both, which would limit our ability to make distributions to our stockholders and could reduce the value of your investment.

~~Our operating expenses may increase in the future, and, to the extent such increases cannot be passed on to tenants, our cash flow and our operating results would decrease.~~

~~Operating expenses, such as expenses for fuel, utilities, labor and insurance, are not fixed and may increase in the future. There is no guarantee~~inherent risks that we will be able to pass such increases on to our tenants. To the extent such increases cannot be passed on to tenants, any such increase would cause our cash flow and our operating results to decrease.

~~Our real properties are subject to property and other taxes that may increase in the future, which~~ could adversely affect our financial condition, operating results, and cash ~~flow.~~flows.

~~Our real properties~~We actively pursue opportunities for outparcel development and existing property redevelopment. Development and redevelopment activities require various government and other approvals for entitlements and any delay in or failure to receive such approvals may significantly delay this process or prevent us from recovering our investment. We may not recover our investment in development or redevelopment projects. We are subject to ~~property and~~ other ~~taxes that may increase as tax rates change and as~~risks associated with these activities, including the real properties are assessed or reassessed by taxing authorities. We anticipate that certain of our leases will generally provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the real properties that they occupy, while other leases will generally provide that following risks:

•we are responsible for such taxes. In any case, as the owner of the properties, we are ultimately responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, our tenants may be unable to lease developments and redevelopments to full occupancy on a timely basis;

•the occupancy rates and rents of a completed project may not be sufficient to make the ~~required tax payments, ultimately requiring us~~project profitable;

•actual costs of a project may exceed original estimates, possibly making the project unprofitable;

•delays in the development or construction process may increase our costs;

•construction cost increases may reduce investment returns on development and redevelopment opportunities;

•we may abandon redevelopment opportunities and lose our investment due to ~~pay~~ adverse market conditions;

•the ~~taxes even if otherwise stated under~~size of our development and redevelopment pipeline may strain our labor or capital capacity to complete projects within targeted timelines and may reduce our investment returns;

•a reduction in the ~~terms~~demand for new retail space may reduce our future development and redevelopment activities, which in turn may reduce our net operating income; and/or

•changes in the level of future development activity may adversely impact our results from operations by reducing the ~~lease.~~ amount of internal general overhead costs that may be capitalized.

If we fail to ~~pay any such taxes, the applicable taxing authority may place a lien on the real property~~reinvest in our portfolio or maintain its attractiveness to retailers and ~~the real property may~~consumers, if our capital improvements are not successful, or if retailers or consumers perceive that shopping at other venues (including e-commerce) is more convenient, cost-effective, or otherwise more compelling, our financial condition, operating results and cash flows could be ~~subject to a tax sale. In addition, we are generally responsible for real property taxes related to any vacant space.~~adversely affected.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on our stockholders’ investments.

We ~~will attempt to adequately insure~~maintain insurance coverage with third-party carriers who provide a portion of the coverage of potential losses, including commercial general liability, fire, flood, extended coverage and rental loss insurance on all of our ~~real properties against casualty losses.~~ properties. We currently self-insure a portion of our commercial insurance deductible risk through our captive insurance company. To the extent that our captive insurance company is unable to bear that risk, we may be required to fund additional capital to our captive insurance company or we may be required to bear that loss. As a result, our operating results may be adversely affected.

There are some types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or ~~co-payments.~~ sublimits. Insurance risks associated with potential acts of terrorism could sharply increase the premiums that we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases ~~have begun to~~ insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate, or any, coverage for such losses. Changes in the cost or availability of insurance could expose us to uninsured casualty losses. If any of our properties incur a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of ~~our~~ stockholders’ investments. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to ~~stockholders.~~stockholders.

Climate change may adversely affect our business, operating results, financial condition, and cash flows.

Climate change, including the impact of global warming, creates physical and financial risk. Physical risks from climate change include an increase in sea level and changes in weather conditions, such as an increase in storm intensity and severity of weather (e.g. floods, tornadoes, or hurricanes) and extreme temperatures. The ~~Terrorism Risk Insurance Act~~occurrence of ~~2002 is designed for a sharing of terrorism losses between insurance companies~~one or more natural disasters, such as hurricanes, tropical storms, tornadoes, wildfires, floods, and ~~the federal government.~~

~~Costs of complying with governmental laws and regulations related to environmental protection and human health and safety may reduce our net income and the cash available for distributions~~earthquakes (whether or not caused by climate change), could cause considerable damage to our ~~stockholders.~~

~~Real property~~properties, disrupt our operations and negatively affect our financial performance. To the extent any of these events result in significant damage to or closure of one or more of our shopping centers, our operations ~~conducted on real property are subject to federal, state~~ and ~~local laws and regulations relating to protection of the environment and human health. We~~financial performance could be ~~subject~~adversely affected through lost Neighbors and an inability to ~~liability~~lease or re‑lease the space. In addition, these events could result in significant expenses to restore or remediate a property, increases in fuel or other energy costs or a fuel shortage, and increases in the ~~form~~costs of ~~fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal~~(or making unavailable) insurance on favorable terms if they result in significant loss of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials, and other health and safety- related concerns.

Some of these laws and regulations may impose joint and several liability on the tenants, owners or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. Our tenants’ operations, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.

The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent or pledge such property as collateral for future borrowings. Environmental laws also may impose liens on property or restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Some of these laws and regulations have been amended so as to requireother insurable damage. In addition, compliance ~~with new or more stringent standards as of future dates. Compliance~~ with new or more stringent laws or regulations or stricter ~~interpretation~~interpretations of existing laws may require material expenditures by us. For example, various federal, state, and regional laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other things, “green” building codes may seek to reduce

emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency, and waste management. Such codes could require us to ~~incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability. Any material expenditures, fines, penalties, or damages we must pay will reduce~~make improvements to our ~~ability to make distributions and may reduce~~existing properties, increase the ~~value of our stockholders’ investments.~~

~~The~~ costs of ~~defending against claims~~maintaining or improving our existing properties or developing new properties, or increase taxes and fees assessed on us or our properties.

As an owner and/or operator of ~~environmental or personal injury liability, or of paying such claims could reduce the amounts available for distribution to our stockholders.~~

Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for the release of and exposure to hazardous substances, including asbestos-containing materials and lead-based paint. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances. The costs of defending against claims of environmental or personal injury liability or of paying such claims could reduce the amounts available for distribution to our stockholders. Generally, we expect that the real estate, ~~properties that~~ we ~~acquire will have been subject to Phase I environmental assessments at the time they were~~

acquired. A Phase I environmental assessment or site assessment is an initial environmental investigation to identify potential environmental liabilities associated with the current and past uses of a given property.

We could become subject to liability for environmental violations, regardless of whether we caused such ~~violations.~~violations, and our efforts to identify environmental liabilities may not be successful.

We could become subject to liability in the form of fines or damages for noncompliance with environmental laws and regulations. ~~These~~These laws and regulations generally govern wastewater ~~discharges,~~discharges; air ~~emissions,~~emissions; the operation and removal of underground and above-ground storage ~~tanks,~~tanks; the use, storage, treatment, transportation and disposal of solid hazardous ~~materials,~~materials; the remediation of contaminated property associated with the disposal of solid and hazardous ~~materials~~materials; and other health and safety-related concerns. U.S. federal, state, and local laws and regulations relating to the protection of the environment may require us, as a current or previous owner or operator of real property, to investigate and clean up hazardous or toxic substances or petroleum product releases at a property or at impacted neighboring properties. Some of these laws and regulations may impose joint and several liability on tenants, owners, or ~~managers~~operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. Under various federal, state, and local environmental laws, ordinances, and regulations, a current or former owner or ~~manager~~operator of real property may be liable for the cost to remove or remediate hazardous or toxic substances, wastes, or petroleum products on, under, from, or in such property. These costs could be substantial and liability under these laws may attach whether or not the owner or manager knew of, or was responsible for, the presence of such contamination.

Even if more than one person may have been responsible for the contamination, each liable party may be held entirely responsible for all of the clean-up costs incurred.

~~In addition,~~We may be subject to regulatory action and may also be held liable to third parties ~~may sue the owner or manager of a property~~ for ~~damages based on~~ personal injury ~~natural resources,~~ or property damage ~~and/~~incurred by the parties in connection with any such laws and regulations or ~~for other~~hazardous or toxic substances. The costs ~~including~~of investigation, removal or remediation of hazardous or toxic substances, and ~~clean-up costs, resulting from the environmental contamination.~~related liabilities, may be substantial and could materially and adversely affect us. The presence of ~~contamination on one of our properties,~~hazardous or toxic substances, or the failure to ~~properly~~ remediate ~~a contaminated property, could give rise to a lien in favor of~~ the ~~government for costs it~~related contamination, may ~~incur to address the contamination, or otherwise~~also adversely affect our ability to sell, lease or ~~lease the~~redevelop a property or to borrow money using ~~the~~a property as collateral. ~~In addition, if contamination~~

Although we believe that our portfolio is ~~discovered on our properties,~~in substantial compliance with U.S. federal, state and local environmental laws ~~may impose restrictions~~and regulations regarding hazardous or toxic substances, this belief is based on the manner in which the property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants. There can be no assurance that future laws, ordinances or regulations will not impose any material environmental liability, or that the environmental conditionlimited testing. Nearly all of our properties ~~will~~have been subjected to Phase I or similar environmental audits. These environmental audits have not ~~be affected by the operations~~revealed, nor are we aware of, ~~the tenants, by the existing condition of the land, by operations in the vicinity of the properties. There can be no assurance~~any environmental liability that ~~these laws, or changes in these laws, will not~~we believe is reasonably likely to have a material adverse effect on ~~our business, results~~us. However, we cannot assure you that: (i) previous environmental studies with respect to the portfolio revealed all potential environmental liabilities; (ii) any previous owner, occupant or tenant of ~~operations~~a property did not create any material environmental condition not known to us; (iii) the current environmental condition of the portfolio will not be affected by tenants and occupants, by the condition of nearby properties, or ~~financial condition.~~by other unrelated third parties; or (iv) future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in environmental liabilities.

Compliance or failure to comply with the Americans with Disabilities Act and fire, safety, and other regulations could result in substantial costs and may decrease cash available for stockholder distributions.

Our properties are or may become subject to the ~~Americans with Disabilities Act of 1990, as amended (the “Disabilities Act”). Under the Disabilities Act,~~ADA which generally requires that all places of public accommodation ~~are required to~~ comply with federal requirements related to access and use by disabled persons. ~~The Disabilities Act has separate compliance~~Compliance with the ADA’s requirements ~~for “public accommodations”~~could require the removal of access barriers and ~~“commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. We~~noncompliance may be required to make substantial capital expenditures to make upgrades at our properties or otherwise comply with Disabilities Act requirements. We are currently, and may be in the future, subject to third party and/or class action litigation with respect to Disabilities Act requirements, which could result in the imposition of injunctive relief, monetary penalties, or in some cases, an award of damages. While we attempt to acquire properties that are already in compliance with the ~~Disabilities Act~~ADA or place the burden of compliance on the seller or other third party, such as a tenant, we cannot assure ~~you~~stockholders that we will be able to acquire properties or allocate responsibilities in this manner. ~~Any of our funds used for Disabilities Act~~In addition, we are required to operate the properties in compliance ~~will~~with fire and safety regulations, building codes, and other land use regulations, as they may be adopted by governmental entities and become applicable to the properties. We may be required to make substantial capital expenditures to comply with these requirements, and these expenditures may reduce our net income and ~~the amount of cash available for~~may have a material adverse effect on our ability to meet our financial obligations and make distributions to our stockholders.

We and our Neighbors face risks relating to cybersecurity attacks, which could cause loss of confidential information and other disruptions to business operations, and compliance with new laws and regulations regarding cybersecurity and privacy may result in substantial costs and may decrease cash available for distributions.

Our business is at risk from and ~~operations would suffer in the event of system failures.~~

~~Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems, our systems are vulnerable~~may be adversely affected by cybersecurity attacks. These attacks could include attempts to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war, and telecommunication failures. Any system failure that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions.

The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaininggain unauthorized access to our data and/or computer systems to disrupt operations, corrupt data, or steal confidential information. Attacks can be both individual and highly organized attempts by very sophisticated hacking organizations. We may face such cybersecurity attacks through malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology (IT) systems. The risk of a cybersecurity attack, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased. The techniques and sophistication used to conduct cyber attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our Neighbors. In addition to our own IT systems, we also depend on third parties to provide IT services relating to several key business functions, such as administration, accounting, communications, document management and storage, human resources, payroll, tax, investor relations, and certain finance functions. Our IT systems and those provided by third parties may contain personal, financial, or other information that is entrusted to us by our Neighbors and employees, as well as proprietary PECO information and other

confidential information related to our business. We and such third parties employ a number of measures to prevent, detect, and mitigate these threats, including password protection, firewalls, backup servers, malware detection, intrusion sensors, threat monitoring, user training, and periodic penetration testing; however, there is no guarantee that such efforts will be successful in preventing a cybersecurity attack.

As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. ~~Our three~~The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our ~~tenants,~~Neighbors, and private data exposure. ~~We have implemented processes, procedures and controls to help mitigate these risks, but these measures, as well as our increased awareness of a risk of a cyber incident, do not guarantee that our~~Our financial results ~~will not~~and business operations may be negatively ~~impacted~~affected by such an ~~incident.~~incident or the resulting negative media attention. A cybersecurity attack could: (i) disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our Neighbors; (ii) compromise the confidential or proprietary information of our Neighbors, employees, and vendors, which others could use to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes; (iii) result in our inability to maintain the building systems relied upon by our Neighbors for the efficient use of their leased space; (iv) require significant management attention and resources to remedy and damages that result; (v) result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; (vi) result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; (vii) subject us to claims for breach of contract, damages, credits, penalties, or termination of leases or other agreements or relationships; (viii) cause reputational damage that adversely affects Neighbor, investor, and employee confidence in us, which could negatively affect our ability to attract and retain Neighbors, investors, and employees; (ix) result in significant remediation costs, some or all of which may not be recoverable from our insurance carriers; and (x) result in increases in the cost of obtaining insurance on favorable terms, or at all, if the attack results in significant insured losses. Such security breaches also could result in a violation of applicable federal and state privacy and other laws, and subject us to private consumer, business partner, or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability, and we may not be able to recover these expenses from our service providers, responsible parties, or insurance carriers. Similarly, our Neighbors rely extensively on IT systems to process transactions and manage their businesses and thus are also at risk from and may be adversely affected by cybersecurity attacks. An interruption in the business operations of our Neighbors or a deterioration in their reputation resulting from a cybersecurity attack, including unauthorized access to customers’ credit card data and other confidential information, could indirectly negatively affect our business and cause lost revenues. As of December 31, 2020, we have not had any material incidents involving cybersecurity attacks.

We could be subject to legal or regulatory proceedings that may adversely affect our cash flows and results of operations.

As an owner and operator of public shopping centers, from time to time, we are party to legal and regulatory proceedings that arise in the ordinary course of business. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. We could experience an adverse effect to our cash flows, financial condition, and results of operations due to an unfavorable outcome.

Risks ~~Associated with Debt Financing~~Related to Capital Recycling Strategy and Capital Structure

Higher market capitalization rates and lower NOI at our properties may adversely impact our ability to sell properties and fund developments and acquisitions, and may dilute earnings.

As part of our capital recycling strategy, we sell properties that no longer meet our growth and investment objectives due to stabilization or perceived future risk. These sales proceeds are used to fund the construction of new outparcel developments, redevelopments, expansions, and acquisitions, and to repay debt. An increase in market capitalization rates or a decline in NOI may cause a reduction in the value of properties identified for sale, which would have an adverse effect on the amount of cash generated. In order to meet the cash requirements of our capital recycling program, we may be required to sell more properties than initially planned, which may have a negative effect on our earnings. Additionally, the sale of properties resulting in significant tax gains may require higher distributions to our stockholders or payment of additional income taxes in order to maintain our REIT status. We intend to utilize Section 1031 Exchanges to mitigate taxable income, however there can be no assurance that we will identify exchange properties that meet our investment objectives for acquisitions.

We have ~~incurred mortgage~~substantial indebtedness, and we ~~are likely~~may need to incur ~~other~~additional indebtedness ~~which increases~~in the future; our debt financing could adversely affect our business ~~risks, could hinder our ability to pay distributions,~~ and ~~could decrease the value of your investment.~~financial condition.

We have obtained, and are likely to continue to obtain, lines of credit, and other long-term financing that are secured by our properties and other assets. ~~Our charter does not limit~~On December 31, 2020, we had indebtedness of $2.3 billion, which comprises $1.6 billion in unsecured debt, $0.4 billion in outstanding secured loan facilities, and $0.3 billion in mortgage loans and finance lease obligations. In connection with executing our business strategies, we expect to evaluate the ~~amount~~possibility of ~~funds that~~additional acquisitions and strategic investments, and we may ~~borrow. In some instances, we may acquire real properties~~elect to finance these endeavors by ~~financing a portion of the price of the properties and mortgaging or pledging some or all of the properties purchased as security for that debt.~~ incurring additional indebtedness. We may also incur mortgage debt on properties that we already own in order to obtain funds to acquire additional ~~properties.~~properties or make other capital investments. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders (computed without regard to the dividends-paid deduction and excluding net capital gain). ~~We, however, can give~~In connection with executing our ~~stockholders no assurance~~business strategies, we expect to evaluate the possibility of additional acquisitions and strategic investments, and we may elect to finance these endeavors by incurring additional indebtedness. However, we cannot guarantee that we will be able to obtain any such borrowings on satisfactory terms.

High debt levels ~~will cause~~could have material adverse consequences for the Company, including hindering our ability to adjust to changing market, industry, or economic conditions; limiting our ability to access the capital markets to refinance maturing debt or to fund acquisitions or emerging businesses; requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on our debt, thereby limiting the amount of free cash flow available for future operations, acquisitions, distributions, stock repurchases, or other uses; making us more vulnerable to ~~incur higher~~economic or industry

downturns, including interest ~~charges, which would result in higher debt service payments~~rate increases; and ~~could be accompanied by restrictive covenants.~~ placing us at a competitive disadvantage compared to less leveraged competitors.

If we do mortgage a property and there is a shortfall between the cash ~~flow~~flows from that property and the cash ~~flow~~flows needed to service mortgage debt on that property, then the amount of cash available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. ~~In that case,~~If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. Additionally, we could lose the property securing the loan that is in default, reducing the value of our stockholders’ investments. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure even though we would not necessarily receive any cash proceeds. We may give full or partial ~~guaranties~~guarantees to lenders of mortgage debt on behalf of the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. ~~If any mortgages contain cross- collateralization or cross-default provisions,~~Currently, we are a ~~default~~limited guarantor on a ~~single property could affect multiple properties.~~mortgage loan for each of our NRP and GRP I joint ventures. In each case, our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

We may also obtain recourse debt to finance our acquisitions and meet our REIT distribution requirements. If we have insufficient income to service our recourse debt obligations, our lenders could institute proceedings against us to foreclose upon our assets. ~~If a lender successfully forecloses upon any of our assets, our ability to pay cash distributions to our stockholders will be limited, and our stockholders could lose all or part of their investment.~~

~~Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to pay distributions to our stockholders.~~

Interest we pay on our loan obligations will reduce cash available for distributions. If we obtain variable rate loans, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to pay distributions to stockholders. In addition, if we need to repay existing loans during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments.

If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties. If we place mortgage debt on properties, we run the risk of being unable to refinance the properties when the debt becomes due or of being unable to refinance on favorable terms. If interest rates are higher when we refinance the properties, our income could be reduced. We may be unable to refinance properties. If any of these events occurs, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to our stockholders and may hinder our ability to raise capital by issuing more stock or borrowing more money.

We may not be able to access financing or refinancing sources on ~~attractive~~favorable terms, ~~which could adversely affect our ability to execute our business plan.~~or at all.

We may finance our assets over the long-term through a variety of means, including repurchase agreements, credit facilities, issuance of commercial mortgage-backed securities, collateralized debt obligations, and other structured financings. Our ability to execute this strategy will depend on various conditions in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long-term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase facilities may not accommodate long-term financing. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders and funds available for operations as well as for future business opportunities.

~~Lenders~~Covenants in our loan agreements may ~~require us to enter into restrictive covenants relating to~~restrict our operations ~~which could limit~~and adversely affect our ~~ability to make distributions to our stockholders.~~financial condition.

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan agreements into which we enter may contain covenants that limit our ability to further mortgage a property or discontinue insurance ~~coverage or replace PE-NTR.~~coverage. In addition, loan documents may limit our ability to replace a property’s property manager or terminate certain operating or lease agreements related to a property. These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives, which may adversely affect our ability to make distributions to our stockholders.

We have acquired, and may continue to acquire or finance, properties with lock-out provisions, which may prohibit us from selling a property or may require us to maintain specified debt levels for a period of years on some properties.

A lock-out provision is a provision that prohibits the prepayment of a loan during a specified period of time. Lock-out provisions may include terms that provide strong financial disincentives for borrowers to prepay their outstanding loan balance and exist in order to protect the yield expectations of lenders. We currently do not own any properties with loans that are subject to lock-out provisions prohibiting prepayment. We may acquire additional properties in the future subject to such provisions. Lock-out provisions could materially restrict us from selling or otherwise disposing of or refinancing properties when we may desire to do so. Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness prior to or at maturity, or increasing the amount of indebtedness with respect to such properties. Lock-out provisions could impair our ability to take other actions during the lock-out period that could be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of our shares relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.

~~Our derivative financial instruments that~~The phase-out, replacement, or unavailability of LIBOR could affect interest rates for a significant portion of our indebtedness, as well as our ability to obtain future debt financing on favorable terms.

As of December 31, 2020, we had approximately $1.6 billion of indebtedness tied to the London Interbank Offered Rate (“LIBOR”), $1.0 billion of which was fixed through the use ~~to hedge against~~of interest rate ~~fluctuations may not~~swaps. Additionally, we have a revolving credit facility tied to LIBOR with a capacity of $500 million, on which we had no outstanding balance (excluding letters of credit in an amount of $9.6 million) as of December 31, 2020. In July 2017, the Financial Conduct Authority (the regulatory authority over LIBOR) stated that it would phase out LIBOR as a benchmark. In November 2020, the Federal Reserve Board announced that banks must stop writing new U.S. dollar (“USD”) LIBOR contracts by the end of 2021 and that, no later than June 30, 2023, when USD LIBOR will no longer be ~~successful in mitigating our risks associated with~~published, market participants should amend legacy contracts to use the Secured Overnight Financing Rate (“SOFR”) or another alternative reference rate. If a published USD LIBOR rate is unavailable after 2021, the interest rates ~~and could reduce the overall returns~~ on our ~~stockholders’ investment.~~indebtedness that is indexed to LIBOR will be determined using alternative methods, any of which may result in interest obligations that are more than, or do not otherwise correlate over time with, the payments that would have been made on such debt if USD LIBOR was available in its current form. Additionally, the phase-out of USD LIBOR and the transition to SOFR or another alternative reference rate may be disruptive to financial markets. Such disruption could have a material adverse effect on our financing costs, and as a result, on our financial condition, operating results, and cash flows.

~~We use derivative financial instruments~~

Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to ~~hedge exposures~~pay distributions to our stockholders.

Although a significant amount of our outstanding debt has fixed interest rates, we do borrow funds at variable interest rates under our credit facilities and term loans. As of December 31, 2020, 25.2% of our outstanding debt was variable rate debt. Increases in interest rates would increase our interest expense on any variable rate debt to the extent we have not hedged

our exposure to changes in interest rates. In addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures, to the extent we have not hedged our exposure to changes in interest rates, ~~on loans secured by our assets, but no hedging strategy can protect us completely. We cannot assure our stockholders that our hedging strategy~~resulting in higher interest rates and ~~the derivatives that we use will adequately offset the risk~~increased interest expense. Either of interest rate volatility or that our hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income test.

~~Interest-only indebtedness may increase our risk of default and ultimately may~~these events would reduce our ~~funds available for distribution to our stockholders.~~

We have financed certain of our property acquisitions using interest-only mortgage indebtedness. During the interest-only period, the amount of each scheduled payment is less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest-only period, we will be required either to make scheduled payments of amortized principalfuture earnings and interest or to make a lump-sum or balloon payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan. If the mortgage loan has an adjustable interest rate, the amount of our scheduled payments also may increase at a time of rising interest rates. Increased payments and substantial principal or balloon maturity payments will reduce the funds available for distribution to our stockholders because cash ~~otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.~~

~~If we enter into financing arrangements involving balloon payment obligations, it~~flows, which may adversely affect our ability to ~~make distributions~~service our debt and meet our other obligations and also may reduce the amount we are able to ~~our~~distribute to stockholders.

~~Some of our financing arrangements~~Hedging activity may ~~require~~expose us to ~~make~~risks, including the risks that a ~~lump-sum or “balloon” payment at maturity. Our ability~~counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect us.

From time to ~~make a balloon payment at maturity is uncertain and~~time, we manage our exposure to interest rate volatility by using interest rate hedging arrangements that involve risk, such as the risk that counterparties may ~~depend upon our ability~~fail to ~~obtain additional financing or our ability to sell the property. At the time the balloon payment is due, we may or~~honor their obligations under these arrangements, that these arrangements may not be ~~able~~effective in reducing our exposure to ~~refinance the balloon payment on terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the~~interest rate ~~of return to stockholders~~changes, and ~~the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts~~that we may ~~leave us with insufficient cash~~be required to pay the ~~distributions~~counterparty if interest rates decrease in the future below the hedged amount. There can be no assurance that ~~we are required to pay to maintain~~ our ~~qualification as a REIT. Any of these results would~~hedging arrangements will qualify for hedge accounting or that our hedging activities will have ~~a significant, negative~~the desired beneficial impact on our ~~stockholders’ investments.~~results of operations. Should we desire to terminate a hedging agreement, there may be significant costs and cash requirements involved to fulfill our obligations under the hedging agreement. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

Risks Related to ~~our~~Corporate Organization and ~~Qualification as a REIT~~Structure

Our stockholders have limited control over changes in our policies and operations, which increases the uncertainty and risks our stockholders face.

Our Board determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our Board may amend or revise these and other policies without a vote of the stockholders. Under the Maryland General Corporation Law (“MGCL”) and our charter, our stockholders have a right to vote only on limited matters. Our ~~board’s~~Board’s broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks our stockholders face.

~~We may change our targeted investments without stockholder consent.~~

Our portfolio is primarily invested in well-occupied, grocery-anchored neighborhood and community shopping centers leased to a mix of national, creditworthy retailers selling necessity-based goods and services in strong demographic markets throughout the United States. Though this is our current target portfolio, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, our current targeted investments. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our common stock and our ability to make distributions to our stockholders.

~~Our stockholders’ interests in us will be diluted if we issue additional shares, which could reduce the overall value of our stockholders’ investment.~~

Our common stockholders do not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1.01 billion shares of capital stock, of which 1 billion shares are designated as common stock and 0.01 billion shares are designated as preferred stock. Our Board may amend our charter to increase or decrease the number of authorized shares of capital stock or the number of shares of stock of any class or series that we have authority to issue without stockholder approval. Additionally, our board may elect to (1) sell additional shares in the DRIP and future public offerings, (2) issue equity interests in private offerings, (3) issue share-based awards to our independent directors or to our officers or employees, or (4) issue shares of our common stock to sellers of properties or assets we acquire in connection with an exchange of limited partnership interests of the Operating Partnership. To the extent we issue additional equity interests, our stockholders’ ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our real estate investments, our investors may also experience dilution in the book value and fair value of their shares.

Although we are not currently afforded the protection of the Maryland General Corporation Law relating to deterring or defending hostile takeovers, our Board could opt into these provisions of Maryland law in the future, which may discourage others from trying to acquire control of us and may prevent our stockholders from receiving a premium price for their stock in connection with a business combination.

Under Maryland law, “business combinations” between a Maryland corporation and certain interested stockholders or affiliates of interested stockholders are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. Also under Maryland law, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Should our board opt into these provisions of Maryland law, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Similarly, provisions of Title 3, Subtitle 8 of the Maryland General Corporation Law could provide similar anti-takeover protection.

Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the ~~Code,~~IRC, among other purposes, our charter prohibits a person from directly or constructively owning more than 9.8% in value of our aggregate outstanding stock or more than 9.8% in value or number of shares, whichever is more restrictive, of our aggregate outstanding common stock, unless exempted by our Board. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.

Our charter, ~~permits our Board to issue stock with~~bylaws and Maryland law contain terms that may ~~subordinate the rights of our common stockholders or~~ discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.

Our charter, bylaws, and the MGCL contain provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest. Our charter permits our Board ~~may~~to classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, and terms or conditions of redemption of any such stock. Thus, our Board could authorize the issuance of preferred stock with priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. ~~Such preferred stock~~In addition, the MGCL permits our Board, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a director. These and other provisions of our charter, bylaws, and Maryland law could ~~also~~ have the effect of delaying, deferring or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

~~Because Maryland law permits our board to adopt certain anti-takeover measures without stockholder approval, investors may be less likely to receive a “control premium” for their shares.~~

In 1999, the State of Maryland enacted legislation that enhances the power of Maryland corporations to protect themselves from unsolicited takeovers. Among other things, the legislation permits our board, without stockholder approval, to amend our charter to:

~~stagger our Board into three classes;~~

~~require a two-thirds stockholder vote for removal of directors;~~

~~provide that only the board can fix the size of the board; and~~

~~require that special stockholder meetings may only be called by holders of a majority of the voting shares entitled to be cast at the meeting.~~

Under Maryland law, a corporation can opt to be governed by some or all of these provisions if it has a class of equity securities registered under the Exchange Act, and has at least three independent directors. Our charter does not prohibit our Board from opting into any of the above provisions permitted under Maryland law. Becoming governed by any of these provisions could discourage an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our securities.

Our rights and the rights of our stockholders to recover claims against our officers and directors are limited, which could reduce our ~~stockholders'~~stockholders’ and our recovery against them if they cause us to incur losses.

Maryland law provides that a director has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in the ~~corporation's~~corporation’s best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter, in the case of our directors ~~officers, employees~~ and ~~agents,~~officers, requires us to indemnify our directors and officers ~~employees and agents for actions taken~~to the maximum extent permitted by ~~them in good faith and without negligence or misconduct.~~Maryland law. Additionally, our charter limits the liability of our directors and officers for monetary damages to the maximum extent permitted under Maryland law. As a result, we and our stockholders may have more limited rights against our directors, officers, employees and agents than might otherwise exist under common law, which could reduce our ~~stockholders'~~stockholders’ and our recovery against them. In addition, we may be obligated to fund the defense costs incurred by our directors, officers, employees and agents in some cases which would decrease the cash otherwise available for distribution to stockholders.

Risks Related to Organization and Qualification as a REIT

If the Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we would fail to qualify as a REIT and would suffer ~~other~~ adverse consequences.

We believe that the Operating Partnership is organized and will be operated in a manner so as to be treated as a partnership, and not an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. As a partnership, the Operating Partnership will not be subject to U.S. federal income tax on its income. Instead, each of its partners, including us, will be allocated that partner’s share of the Operating Partnership’s income. No assurance can be

provided, however, that the Internal Revenue Service will not challenge the Operating Partnership’s status as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the Internal Revenue Service were

successful in treating the Operating Partnership as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of its cash available for debt service and for distribution to its partners, including us.

The Operating Partnership has a carryover tax basis on certain of its assets as a result of the PELP transaction and the Merger, and the amount that we have to distribute to stockholders therefore may be higher.

As a result of each of the PELP transaction and the Merger, certain of the Operating Partnership’s properties have carryover tax bases that are lower than the fair market values of these properties at the time of the acquisition. As a result of this lower aggregate tax basis, the Operating Partnership will recognize higher taxable gain upon the sale of these assets, and the Operating Partnership will be entitled to lower depreciation deductions on these assets than if it had purchased these properties in taxable transactions at the time of the acquisition. Such lower depreciation deductions and increased gains on sales allocated to us generally will increase the amount of our required distribution under the REIT rules, and will decrease the portion of any distribution that otherwise would have been treated as a “return of capital” distribution.

We ~~intend to~~ use ~~TRSs,~~taxable REIT subsidiaries, which may cause us to fail to qualify as a REIT.

To qualify as a REIT for U.S. federal income tax purposes, we hold, and plan to continue to hold, substantially all of our non-qualifying REIT assets and conduct certain of our non-qualifying REIT income activities in or through one or more ~~TRSs.~~taxable REIT subsidiary (“TRS”) entities. A TRS is a corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated as a TRS. A TRS also includes any corporation other than a REIT with respect to which a TRS owns securities possessing more than 35% of the total voting power or value of the outstanding securities of such corporation. Other than some activities relating to lodging and health care facilities, a TRS may generally engage in any business, including the provision of customary or ~~non- customary~~non-customary services to tenants of its parent REIT. A TRS is subject to income tax as a regular ~~C-corporation.~~C-corporation at a current federal rate of 21%.

The net income of our ~~TRSs~~TRS entities is not required to be distributed to us, and income that is not distributed to us will generally not be subject to the REIT income distribution requirement. However, our TRS entities may pay dividends. Such dividend income should qualify under the 95%, but not the 75%, gross income test. We will monitor the amount of the dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests. While we expect these actions will prevent a violation of the REIT income tests, we cannot guarantee that such actions will in all cases prevent such a violation.

Our ownership of ~~TRSs will be~~TRS entities is subject to limitations that could prevent us from growing our management business, and our transactions with our ~~TRSs~~TRS entities could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on an arm’s-length basis.

~~Overall, (i) for taxable years beginning prior to January 1, 2018, no more than 25% of the value of a REIT’s gross assets, and (ii) for taxable years beginning after December 31, 2017, no~~No more than 20% of the value of a REIT’s gross assets may consist of interests in ~~TRSs; compliance~~TRS entities. Compliance with this limitation could limit our ability to grow our management business. ~~In addition, the Internal Revenue Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation.~~ The ~~Internal Revenue Code~~IRC also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of investments in our ~~TRSs~~TRS entities in order to ensure compliance with TRS ownership limitations and will structure our transactions with our ~~TRSs~~TRS entities on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.

~~Our failure~~REIT distribution requirements could adversely affect our ability to ~~continue to qualify as a REIT would subject us to federal income tax and reduce cash available for distribution to~~execute our ~~stockholders.~~

~~We elected to~~business plans, including because we may be taxed as a REIT under the Code commencing with our taxable year ended December 31, 2010. We intend to continue to operate in a manner so as to continue to qualify as a REIT for federal income tax purposes. Qualification as a REIT involves the application of highly technical and complex Code provisions for which only a limited number of judicial and administrative interpretations exist. Even an inadvertent or technical mistake could jeopardize our REIT status. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to continue to qualify as a REIT. If we fail to continue to qualify as a REIT in any taxable year, we would be subject to federal and applicable state and local income tax on our taxable income at corporate rates, in which case we might be required to borrow or liquidate some investments in order to pay the applicable tax. Losing our REIT status would reduce our net income available for investment or distribution to you because of the additional tax liability. In addition, distributions to our stockholders would no longer qualify for the dividends-paid deduction and we would no longer be required to make distributions. Furthermore, if we fail to qualify as a REIT in any taxable year for which we have elected to be taxed as a REIT, we would generally be unable to elect REIT status for the four taxable years following the year in which our REIT status is lost.

~~Complying with REIT requirements may force us~~ to borrow funds to make distributions to ~~you~~stockholders or otherwise depend on external sources of capital to fund such distributions.

~~To continue to qualify as a REIT, we are required to~~We generally must distribute annually at least 90% of our REIT taxable income ~~subject~~(which is determined without regard to ~~certain adjustments,~~the dividends paid deduction or net capital gain for this purpose) in order to ~~our stockholders.~~continue to qualify as a REIT. To the extent that we satisfy the distribution requirement but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we may elect to retain and pay income tax on our net long-term capital gain. In that case, if we so elect, a stockholder would be taxed on its proportionate share of our undistributed long-term gain and would receive a credit or refund for its proportionate

share of the tax we paid. A stockholder, including a tax-exempt or foreign stockholder, would have to file a U.S. federal income tax return to claim that credit or refund. Furthermore, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws.

~~From time-to-time, we may generate taxable~~We intend to make distributions to our stockholders to comply with the REIT requirements of the IRC and to avoid corporate income ~~greater than our net income (loss) for GAAP. In addition, our taxable income~~tax and the 4% excise tax. We may be ~~greater than~~required to make distributions to our stockholders at times when it would be more advantageous to reinvest cash ~~flow~~in its business or when we do not have funds readily available for ~~distribution~~distribution. Thus, compliance with the REIT requirements may hinder our ability to ~~you as a result~~operate solely on the basis of among other things, investments in assets that generate taxable income in advance of the corresponding cash flow from the assets (for instance, if a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise).maximizing profits.

If we do not have other funds available, ~~in the situations described in the preceding paragraphs,~~ we could be required to borrow funds on unfavorable terms, sell investments at disadvantageous prices or find another alternative source of funds to make distributions sufficient to enable us to distribute enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity.

Because of the distribution requirement, it is unlikely that we will be able to fund all future capital needs, including capital needs in connection with investments, from cash retained from operations. As a result, to fund future capital needs, we likely will have to rely on third-party sources of capital, including both debt and equity financing, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital will depend upon a number of factors, including our current and potential future earnings and cash distributions.

Despite our qualification for taxation as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to our stockholders.

Despite our qualification for taxation as a REIT for federal income tax purposes, we may be subject to certain federal, state and local taxes on our income and assets, including taxes on any undistributed income or property. Any of these taxes would decrease cash available for distribution to our stockholders. For instance:

In order to continue to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) to our stockholders.

~~To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income.~~

We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business and do not qualify for a safe harbor in the Code, our gain would be subject to the 100% “prohibited transaction” tax.

Any domestic taxable REIT subsidiary, or TRS, of ours will be subject to federal corporate income tax on its income, and on any non-arm’s-length transactions between us and any TRS, for instance, excessive rents charged to a TRS could be subject to a 100% tax.

~~We may be subject to tax on income from certain activities conducted as a result of taking title to collateral.~~

~~We may be subject to state or local income, property and transfer taxes, such as mortgage recording taxes.~~

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To continue to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to stockholders and the ownership of our stock. As discussed above, we may be required to make distributions to you at disadvantageous

times or when we do not have funds readily available for distribution. Additionally, we may be unable to pursue investments that would be otherwise attractive to us in order to satisfy the requirements for qualifying as a REIT.

We must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified real estate assets, including certain mortgage loans and mortgage-backed securities. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets can consist of the securities of any one issuer (other than government securities and qualified real estate assets) and no more than ~~25%~~20% of the value of our gross assets ~~(20% for tax years after 2017)~~ may be represented by securities of one or more ~~TRSs.~~TRS. Finally, ~~for the taxable years after 2015,~~ no more than 25% of our assets may consist of debt investments that are issued by “publicly offered REITs” and would not otherwise be treated as qualifying real estate assets. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences, unless certain relief provisions apply. As a result, compliance with the REIT requirements may hinder our ability to operate solely on the basis of profit maximization and may require us to liquidate investments from our portfolio, or refrain from making otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to stockholders.

~~Complying with REIT requirements may limit our ability to hedge effectively.~~

The REIT provisions of the Code may limit our ability to hedge our operations effectively. Our aggregate gross income from non-qualifying hedges, fees and certain other non-qualifying sources cannot exceed 5% of our annual gross income. As a result, we might have to limit our use of advantageous hedging techniques or implement those hedges through a TRS. Any hedging income earned by a TRS would be subject to federal, state and local income tax at regular corporate rates. This could increase the cost of our hedging activities or expose us to greater risks associated with interest rate or other changes than we would otherwise incur.

~~Liquidation of assets may jeopardize our REIT qualification.~~

To continue to qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% prohibited transaction tax on any resulting gain if we sell assets that are treated as dealer property or inventory.

The prohibited transactions tax may limit our ability to engage in transactions, including disposition of assets, ~~and certain methods of securitizing loans,~~ which would be treated as sales for U.S. federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of dealer property, other than foreclosure ~~property, but including loans held primarily for sale to customers in the ordinary course of business.~~property. We might be subject to the prohibited transaction tax if we were to dispose of or securitize loans in a manner that is treated as a sale of the loans, for federal income tax purposes. In order to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans and may limit the structures we use for any securitization financing transactions, even though such sales or structures might otherwise be beneficial to us. Additionally, we may be subject to the prohibited transaction tax upon a disposition of real property. Although a safe-harbor exception to prohibited transaction treatment is available, we cannot assure you that we can comply with such safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of our trade or business. Consequently, we may choose not to engage in certain sales of real property or may conduct such sales through a TRS.

It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS. However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be subject to a corporate income tax. In addition, the IRS may attempt to ignore or otherwise recast such activities in order to impose a prohibited transaction tax on us, and there can be no assurance that such recast will not be successful.

We ~~also may not be able to use secured financing structures that would create taxable mortgage pools, other than in a TRS or through a subsidiary REIT.~~

We may recognize substantial amounts of REIT taxable income, which we would be required to distribute to our stockholders, in a year in which we are not profitable under GAAP principles or other economic measures.

We may recognize substantial amounts of REIT taxable income in years in which we are not profitable under GAAP or other economic measures as a result of the differences between GAAP and tax accounting methods. For instance, certain of our assets will be marked-to-market for GAAP purposes but not for tax purposes, which could result in losses for GAAP purposes that are not recognized in computing our REIT taxable income. Additionally, we may deduct our capital losses only to the extent of our capital gains in computing our REIT taxable income for a given taxable year. Consequently, we could recognize substantial amounts of REIT taxable income and would be required to distribute such income to you in a year in which we are not profitable under GAAP or other economic measures.

~~REIT distribution requirements could adversely affect our ability to execute our business plan.~~

We generally must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) in order to continue to qualify as a REIT. We intend to make distributions to our stockholders to comply with the REIT requirements of the Code and to avoid corporate income tax and the 4% excise tax. We may be required to make distributions to stockholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Our qualification as a REIT could be jeopardized as a result of an interest in joint ventures or investment funds.

We may hold certain limited partner or non-managing member interests in partnerships or limited liability companies that are joint ventures or investment funds. If a partnership or limited liability company in which we own an interest takes or expects to take actions that could jeopardize our qualification as a REIT or require us to pay tax, we may be forced to dispose of our interest in such entity. In addition, it is possible that a partnership or limited liability company could take an action which could cause us to fail a REIT gross income or asset test, and that we would not become aware of such action in time to dispose of our interest in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to continue to qualify as a REIT unless we are able to qualify for a statutory REIT “savings” provision, which may require us to pay a significant penalty tax to maintain our REIT qualification.

Distributions paid by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.

The maximum tax rate for “qualified dividends” paid by corporations to non-corporate stockholders is currently 20%. Distributions paid by REITs ~~however,~~to non-corporate stockholders generally are taxed at rates lower than ordinary income rates, ~~(subject to a maximum rate of 39.6% for non-corporate stockholders), rather~~but those rates are higher than the 20% tax rate on qualified dividend income paid by corporations. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the preferential ~~rate applicable~~rates continue to apply to regular corporate qualified ~~dividends.~~dividends, the more favorable rates for corporate dividends may cause non-corporate investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of shares of our common stock.

Legislative or regulatory tax changes could adversely affect us or our stockholders.

At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative

interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. Any such change could result in an increase in our, or our stockholders’, tax liability or require changes in the manner in which we operate in order to minimize increases in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income or be subject to additional restrictions. These increased tax costs could, among other things, adversely affect our financial condition, the results of operations, and the amount of cash available for the payment of dividends. We and our stockholders could be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation, or administrative interpretation.

~~On December 22, 2017, President Trump signed into law H.R. 1, known as~~

In addition, the ~~“Tax Cuts~~COVID-19 pandemic has left many state and ~~Jobs Act” (the “TCJA”). The TCJA is the most far-reaching~~local governments with reduced tax ~~legislation~~revenue, which may lead such governments to ~~be passed in over 30 years. The provisions of the TCJA generally apply~~increase taxes or otherwise make significant changes to taxable years beginning after December 31, 2017. Significant provisions of the TCJA that investors should be aware of include provisions that: (i) lower the corporate income tax rate to 21%, (ii) provide noncorporate taxpayers with a deduction of up to 20% of certain income earned through partnerships and REITs, (iii) limits the net operating loss deduction to 80% of taxable income, where taxable income is determined without regard to the net operating loss deduction itself, generally eliminates net operating loss carrybacks and allows unused net operating losses to be carried forward indefinitely, (iv) expand the ability of businesses to deduct the cost of certain property investments in the year in which the property is purchased, and (v) generally lower tax rates for individuals and other noncorporate taxpayers, while limiting deductions such as miscellaneous itemized deductions andtheir state and local tax deductions. In addition, the TCJA limits the deduction for net interest expense incurred by a business to 30% of the “adjusted taxable income” of the taxpayer. However, the limitation on the interest expense deduction does not apply to certain small-business taxpayers or electing real property trades or businesses,laws. If such as any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business. Making the election to be treated as a real property trade or business requires the electing real property trade or business to depreciate non-residential real property, residential rental property, and qualified improvement property over a longer period using the alternative depreciation system. We generally will decide whether to make any available election to treat as a real property trade or business any direct or indirect investment made through an entity thatchanges occur, we ~~control.~~

Stockholders are urged to consult with their own tax advisors with respect to the impact that the TCJA and other legislation may have on their investment and the status of legislative, regulatory or administrative developments and proposals and their potential effect on their investment in our shares.

If the fiduciary of an employee benefit plan subject to ERISA (such as a profit sharing, Section 401(k) or pension plan) or an owner of a retirement arrangement subject to Section 4975 of the Code (such as an IRA) fails to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in our stock, the fiduciary could be subject to penalties and other sanctions.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit sharing, Section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Code (such as an IRA) that are investing in our shares. Fiduciaries and IRA owners investing the assets of such a plan or account in our common stock should satisfy themselves that:

~~the investment is consistent with their fiduciary and other obligations under ERISA and the Code;~~

~~the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;~~

~~the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;~~

~~the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA;~~

~~the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;~~

~~our stockholders will be able to comply with the requirements under ERISA and the Code to value the assets of the plan or IRA annually; and~~

~~the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.~~

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to claims for damages or for equitable remedies, including liability for investment losses. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Code, the fiduciary or IRA owner who authorized or directed the investment may be ~~subject~~required to ~~the imposition of excise~~pay additional taxes with respect to the amount invested. In addition, the investment transaction must be undone. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified as a tax-exempt account and all of theon our assets ~~of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in our common stock.~~or income.

If our assets are deemed to be plan assets, we may be exposed to liabilities under Title I of ERISA and the ~~Code.~~IRC.

In some circumstances where an ERISA plan holds an interest in an entity, the assets of the entity are deemed to be ERISA plan assets unless an exception applies. This is known as the “look-through rule.” Under those circumstances, the obligations and other responsibilities of plan sponsors, plan fiduciaries and plan administrators, and of parties in interest and disqualified persons, under Title I of ERISA or Section 4975 of the ~~Code,~~IRC, may be applicable, and there may be liability under these and other provisions of ERISA and the ~~Code.~~IRC. We believe that our assets should not be treated as plan assets because the shares of our common stock should qualify as “publicly-offered securities” that are exempt from the look-through rules under applicable Treasury Regulations. We note, however, that because certain limitations are imposed upon the transferability of shares of our common stock so that we may qualify as a REIT, and perhaps for other reasons, it is possible that this exemption may not apply. If that is the case, and if we are exposed to liability under ERISA or the ~~Code,~~IRC, our performance and results of operations could be adversely affected.

~~If stockholders invested in our shares through an IRA or other retirement plan, they may be limited in their ability to withdraw required minimum distributions.~~

If stockholders established an IRA or other retirement plan through which they invested in our shares, federal law may require them to withdraw required minimum distributions (“RMDs”) from such plan in the future. Our SRP limits the amount of repurchases (other than those repurchases as a result of a stockholder’s death or disability) that can be made in a given year. Additionally, our stockholders will not be eligible to have their shares repurchased until they have held their shares for at least one year. As a result, they may not be able to have their shares repurchased at a time in which they need liquidity to satisfy the RMD requirements under their IRA or other retirement plan. Even if they are able to have their shares repurchased, our share repurchase price is based on the estimated value per share of our common stock as determined by our Board, and this value is expected to fluctuate over time. As such, a repurchase may be at a price that is less than the price at which the shares were initially purchased. If stockholders fail to withdraw RMDs from their IRA or other retirement plan, they may be subject to certain tax penalties.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Real Estate Investments

As—The following table details information for our wholly-owned properties and those owned through our joint ventures as of December 31, ~~2017,~~2020, which is the basis for determining the prorated information included in the subsequent tables (dollars and square feet in thousands):


	Ownership Percentage	Number of Properties	ABR		GLA
Wholly-owned properties	100%	283	$	386,516	31,709
Necessity Retail Partners	20%	5	$	7,879	507
Grocery Retail Partners I(1)	14%	20	28,596		2,218

(1)On October 1, 2020, GRP I acquired GRP II, an additional joint venture in which we owned ~~236 properties throughout~~an equity interest. Our ownership in the ~~United States.~~ combined entity was adjusted upon consummation of the transaction.

The following table presents information regarding the ~~geographical~~geographic location of our properties, including wholly-owned and the prorated portion of those owned through our joint ventures, by ~~annualized base rent (“ABR”)~~ABR as of December 31, ~~2017 (dollars and square feet in thousands).~~2020. For additional portfolio information, refer to Schedule III - Real Estate Assets and Accumulated Depreciation ~~herein.~~(dollars and square feet in thousands):


State	ABR(1)		% ABR		ABR/Leased Square Foot		GLA(2)	% GLA		% Leased		Number of Properties
Florida	$	49,082	12.5	%	$	12.78	4,116	12.8	%	93.3	%	53
California	40,612		10.4	%	18.48		2,321	7.2	%	94.7	%	25
Georgia	34,863		8.9	%	12.22		2,925	9.1	%	97.6	%	30
Texas	30,878		7.9	%	15.56		2,167	6.7	%	91.6	%	18
Ohio	28,324		7.2	%	9.98		2,980	9.3	%	95.3	%	26
Illinois	22,810		5.8	%	14.77		1,647	5.1	%	93.8	%	15
Virginia	18,030		4.6	%	13.84		1,351	4.2	%	96.4	%	13
Colorado	17,693		4.5	%	15.79		1,162	3.6	%	96.4	%	10
Massachusetts	15,770		4.0	%	14.07		1,170	3.6	%	95.8	%	10
Pennsylvania	11,676		3.0	%	11.35		1,086	3.4	%	94.7	%	7
Minnesota	11,189		2.9	%	12.51		924	2.9	%	96.7	%	10
South Carolina	10,458		2.7	%	9.16		1,302	4.1	%	87.7	%	11
Arizona	9,824		2.5	%	12.51		845	2.6	%	92.9	%	7
Wisconsin	9,324		2.4	%	10.08		944	2.9	%	98.0	%	8
North Carolina	8,966		2.3	%	11.86		810	2.5	%	93.3	%	13
Maryland	8,895		2.3	%	19.81		464	1.4	%	96.8	%	4
Indiana	6,663		1.7	%	8.14		832	2.6	%	98.4	%	5
Michigan	6,478		1.7	%	9.26		724	2.3	%	96.6	%	5
Tennessee	6,118		1.6	%	8.57		777	2.4	%	91.9	%	6
Connecticut	5,411		1.4	%	13.88		419	1.3	%	93.1	%	4
New Mexico	5,360		1.4	%	13.70		404	1.3	%	96.9	%	3
Oregon	5,195		1.3	%	14.56		374	1.2	%	95.5	%	5
Kentucky	4,836		1.2	%	9.84		502	1.6	%	98.0	%	3
New Jersey	4,659		1.2	%	17.32		276	0.9	%	97.3	%	2
Kansas	4,554		1.2	%	11.12		452	1.4	%	90.6	%	4
Nevada	4,317		1.1	%	20.01		217	0.7	%	99.4	%	2
Iowa	2,726		0.7	%	8.83		360	1.1	%	85.9	%	3
Washington	2,604		0.6	%	15.47		170	0.5	%	98.8	%	2
Missouri	2,528		0.5	%	11.48		222	0.7	%	99.4	%	2
New York	1,801		0.4	%	11.26		163	0.5	%	97.9	%	1
Utah	451		0.1	%	30.97		15	0.1	%	100.0	%	1
Total	$	392,095	100.0	%	$	12.89	32,121	100.0	%	94.7	%	308

(1)We calculate ABR as monthly contractual rent as of December 31, 2020, multiplied by 12 months.

(2)GLA is defined as the total occupied and unoccupied square footage of a building that is available for Neighbors tolease.

State
ABR⁽¹⁾
% ABR ABR/Leased Square Foot
GLA⁽²⁾
% GLA % Leased Number of Properties
Florida $ 35,769
12.8 % $ 12.66
3,069
11.7 % 92.0 % 35
Georgia 24,369
8.7 % 11.19
2,266
8.6 % 96.1 % 24
Ohio 24,361
8.7 % 9.49
2,679
10.2 % 95.8 % 22
California 20,497
7.3 % 17.70
1,233
4.7 % 93.9 % 12
Texas 20,235
7.2 % 13.77
1,560
5.9 % 94.2 % 10
Illinois 14,833
5.3 % 12.15
1,334
5.1 % 91.5 % 9
Virginia 14,015
5.0 % 12.16
1,281
4.9 % 90.0 % 12
North Carolina 11,735
4.2 % 9.72
1,240
4.7 % 97.3 % 13
South Carolina 10,741
3.8 % 9.40
1,271
4.8 % 89.9 % 13
Pennsylvania 9,903
3.5 % 10.40
1,025
3.9 % 92.9 % 6
Massachusetts 9,651
3.5 % 12.87
767
2.9 % 97.8 % 6
Indiana 8,847
3.2 % 7.68
1,244
4.7 % 92.6 % 8
Tennessee 7,993
2.9 % 7.79
1,038
4.0 % 98.8 % 7
Arizona 7,594
2.7 % 11.13
797
3.0 % 85.6 % 7
Maryland 6,360
2.3 % 18.82
347
1.3 % 97.4 % 3
Colorado 6,266
2.2 % 12.87
504
1.9 % 96.6 % 5
Oregon 6,221
2.2 % 13.64
472
1.8 % 96.6 % 6
Minnesota 5,691
2.0 % 11.73
493
1.9 % 98.4 % 6
New Mexico 5,484
2.0 % 13.25
471
1.8 % 87.9 % 5
Michigan 5,252
1.9 % 7.87
701
2.7 % 95.1 % 4
Kentucky 4,868
1.8 % 8.57
598
2.3 % 95.0 % 4
Wisconsin 4,618
1.7 % 11.46
423
1.6 % 95.3 % 5
Iowa 2,888
1.0 % 8.32
360
1.4 % 96.4 % 3
Washington 2,419
0.9 % 14.93
171
0.6 % 94.7 % 2
Nevada 2,307
0.8 % 18.60
128
0.5 % 96.9 % 1
Connecticut 1,806
0.6 % 15.18
124
0.5 % 96.0 % 1
Kansas 1,392
0.5 % 10.01
153
0.6 % 90.8 % 2
Alabama 1,018
0.4 % 6.88
174
0.7 % 85.1 % 1
Missouri 861
0.3 % 7.69
112
0.4 % 100.0 % 1
New Jersey 838
0.3 % 8.06
111
0.4 % 93.7 % 1
Mississippi 628
0.2 % 5.66
112
0.4 % 99.1 % 1
Utah 237
0.1 % 16.93
14
0.1 % 100.0 % 1
Total $ 279,697
100.0 % $ 11.33
26,272
100.0 % 93.9 % 236


⁽¹⁾	~~We calculate ABR as monthly contractual rent as of~~ ~~December 31, 2017, multiplied by 12 months.~~


⁽²⁾	~~Gross leasable area (“GLA”) is defined as the portion of the total square feet of a building that is available for tenant leasing.~~

Lease Expirations

—The following chart shows ~~on an~~the aggregate ~~basis, all of the~~ scheduled lease expirations, excluding our Neighbors who are occupying space on a temporary basis, after December 31, ~~2017,~~2020 for each of the next ten years and thereafter for our ~~236~~wholly-owned properties and the prorated portion of those owned through our joint ventures:

Our ability to create rental rate growth generally depends on our leverage during new and renewal lease negotiations with prospective and existing Neighbors, which typically occurs when occupancy at our centers is high or during periods of economic growth and recovery. Conversely, we may experience rental rate decline when occupancy at our centers is low or during periods of economic recession, as the leverage during new and renewal lease negotiations may shift to prospective and existing Neighbors.

Most of our grocery Neighbors have remained open throughout the COVID-19 pandemic, though their sales may have been impacted by social distancing and “stay-at-home” mandates. The number of our Neighbor spaces that temporarily closed as a result of the COVID-19 pandemic peaked in April 2020 and has significantly decreased as states began to lift in full or in part “stay-at-home” mandates in May 2020. Certain Neighbors remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the spread of COVID-19. These actions could result in increased permanent store closings and could reduce the demand for leasing space in our shopping ~~centers. The chart shows~~centers and result in a decline in average rental rates on expiring leases. For our wholly-owned properties, our average rental rates on new and renewal leases have exceeded the ~~leased~~average rental rates on comparable expiring leases as of December 31, 2020; however, our occupancy declined 0.7% to 94.7% as compared to December 31, 2019, owing largely to the economic impact of COVID-19, and we anticipate our occupancy may decline further in early 2021. We will likely continue to experience pressure in new and renewal rental rates until the business environment becomes more stable, but new leasing volume in early 2021 remains strong.

For our wholly-owned portfolio, during the 2021 fiscal year, we have a total of 585 leases expiring, representing 2.7 million square feet of GLA. These expiring leases have an ABR of $12.43 per square foot. While we cannot predict what rental rates we will achieve in 2021 as we renew or replace these expiring leases, the comparable rent spread of new leases signed during 2020 was 8.2%, and ~~ABR represented by~~ the ~~applicable~~comparable rent spread for lease ~~expiration year (dollars~~renewals and ~~square feet~~options executed in ~~thousands):~~

2020 was 6.7%. Subsequent to December 31, ~~2017,~~2020, we renewed approximately ~~455,000~~0.3 million total square feet and ~~$6.2~~$5.5 million of total ABR of future expiring leases. This includes seven anchor lease renewals, five of which were pursuant to the ~~leases expiring.~~exercise of an option to extend the lease.

~~During the year ended December 31, 2017, rent per square foot for renewed leases increased 8.5% when compared to rent per square foot prior to renewal.~~ See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - ~~Results of Operations~~Overview - Leasing ~~Activity,~~Activity” of this filing on Form 10-K for further discussion of leasing activity. Based on current market base rental rates, we believe we will achieve an overall positive increase in our average ABR for expiring leases. However, changes in base rental income associated with individual signed leases on comparable spaces may be positive or negative, and we can provide no assurance that the base rents on new leases will continue to increase from current levels.

Portfolio Tenancy

Prior to the acquisition of a property, we assess the suitability of the grocery-anchor tenant and other tenants in light of our investment objectives, namely, preserving capital and providing stable cash flows for distributions. Generally, we assess the strength of the tenant by consideration of company factors, such as its financial strength and market share in the geographic area of the shopping center, as well as location-specific factors, such as the store’s sales, local competition, and demographics. When assessing the tenancy of the non-anchor space at the shopping center, we consider the tenant mix at each shopping center in light of our portfolio, the proportion of national and national-franchise tenants, the creditworthiness of specific tenants, and the timing of lease expirations. When evaluating non-national tenancy, we attempt to obtain credit enhancements to leases, which typically come in the form of deposits and/or guarantees from one or more individuals.

—We define national ~~tenants~~Neighbors as those ~~tenants~~Neighbors that operate in at least three states. Regional ~~tenants~~Neighbors are defined as those ~~tenants~~Neighbors that have at least three ~~locations.~~locations in fewer than three states. The following charts present the composition of our portfolio, including our wholly-owned properties and the prorated portion of those owned through our joint ventures, by ~~tenant~~Neighbor type as of December 31, ~~2017:~~2020:

The following charts present the composition of our portfolio by ~~tenant~~neighbor industry as of December 31, ~~2017:~~2020:

We estimate that approximately 51% of our ABR, including the pro rata portion attributable to our properties owned through our joint ventures, is from retail and service businesses generally deemed essential under most state and local mandates issued in response to the COVID-19 pandemic. The composition of our portfolio as a percentage of ABR is as follows:


	December 31, 2020
Essential Retail and Services:
Grocery	35.9	%
Banks	2.4	%
Dollar stores	2.2	%
Pet supply	2.1	%
Medical	1.8	%
Hardware/automotive	1.7	%
Wine, beer, and liquor	1.4	%
Pharmacy	1.0	%
Other essential	2.8	%
Total essential retail and services(1)	51.3	%
Restaurants:
Quick service	9.6	%
Full service	6.0	%
Total restaurants	15.6	%
Other Retail and Services:
Services	16.3	%
Soft goods	12.3	%
Fitness	3.2	%
Entertainment	1.3	%
Total other retail and services	33.1	%
Total ABR	100.0	%

(1)Includes Neighbors that we believe are considered to be essential retail and service businesses but that may have temporarily closed due to decreases in foot traffic and customer patronage as a result of “stay-at-home” mandates and social distancing guidelines implemented in response to the COVID-19 pandemic.

The following table presents our top ~~ten tenants, grouped according to parent company,~~twenty Neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our joint ventures, as of December 31, ~~2017~~2020 (dollars and square feet in thousands):

Tenant ABR % of ABR Leased Square Feet % of Leased Square Feet
Number of Locations⁽¹⁾
Kroger $ 25,820
9.2 % 3,138
12.7 % 55
Publix 17,016
6.1 % 1,672
6.8 % 36
Ahold Delhaize 10,233
3.7 % 854
3.5 % 19
Albertsons-Safeway 9,461
3.4 % 924
3.7 % 17
Giant Eagle 6,797
2.4 % 700
2.8 % 9
Walmart 5,562
2.0 % 1,213
4.9 % 11
Dollar Tree 3,505
1.3 % 399
1.6 % 40
Raley's 3,422
1.2 % 193
0.8 % 3
Lowe's 3,020
1.1 % 474
1.9 % 4
SUPERVALU 2,844
1.0 % 371
1.5 % 9
$ 87,680
31.4 % 9,938
40.2 % 203


⁽¹⁾	~~Number of locations excludes auxiliary leases with grocery anchors such as fuel stations, pharmacies, and liquor stores.~~


Neighbor(1)	ABR		% of ABR		Leased Square Feet	% of Leased Square Feet		Number of Locations(2)
Kroger	$	27,130	6.9	%	3,447	11.3	%	64
Publix	22,003		5.6	%	2,240	7.4	%	56
Ahold Delhaize	17,514		4.5	%	1,264	4.2	%	24
Albertsons-Safeway	16,866		4.3	%	1,637	5.4	%	31
Walmart	8,933		2.3	%	1,770	5.8	%	13
Giant Eagle	8,183		2.1	%	822	2.7	%	12
TJX Companies	4,984		1.3	%	428	1.4	%	15
Sprouts Farmers Market	4,885		1.2	%	334	1.1	%	11
Dollar Tree	4,048		1.0	%	423	1.4	%	44
Raley's	3,884		1.0	%	253	0.8	%	4
SUPERVALU	3,467		0.9	%	376	1.2	%	7
Subway Group	3,048		0.8	%	125	0.4	%	90
Schnuck's	3,025		0.8	%	329	1.1	%	5
Anytime Fitness, Inc.	2,740		0.7	%	180	0.6	%	38
Southeastern Grocers	2,626		0.7	%	291	1.0	%	8
Save Mart	2,619		0.7	%	309	1.0	%	6
Lowe's	2,469		0.6	%	369	1.2	%	4
Kohl's Corporation	2,255		0.6	%	365	1.2	%	4
Food 4 Less (PAQ)	2,215		0.6	%	118	0.4	%	2
Petco Animal Supplies, Inc.	2,103		0.5	%	127	0.4	%	11
Total	$	144,997	37.1	%	15,207	50.0	%	449

(1)Neighbors are grouped by parent company and may represent multiple subsidiaries and banners.

(2)Number of locations excludes auxiliary leases with grocery anchors such as fuel stations, pharmacies, and liquor stores. Additionally, in the event that a parent company has multiple subsidiaries or banners serving as Neighbors in a shopping center, those subsidiaries are included as one location.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings offor which we are not covered by our liability insurance or the outcome is reasonably likely to have a material impact on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.



wPART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

As of March ~~15, 2018,~~1, 2021, we had approximately ~~186.2~~280.7 million shares of common stock outstanding, held by a total of ~~40,019~~61,585 stockholders of record. The number of stockholders is based on the records of our registrar and transfer agent. Our common stock is not currently traded on any exchange, and there is no established trading market for our common stock. Therefore, there is a risk that a stockholder may not be able to sell our stock at a time or price acceptable to the stockholder, or at all.

Valuation Overview

On ~~November 8, 2017,~~May 6, 2020, the independent directors of our Board declared the board of directors (“Independent Directors”) of Phillips Edison & Company, Inc. (“we,” the “Company,” “our,” or “us”), formerly known as Phillips Edison Grocery Center REIT I, Inc., established its estimated value per share (“EVPS”) of our common stock ~~of $11.00.~~as $8.75. The valuation was based substantially on the estimated “as is” market value of our portfolio of real estate properties

in various geographic locations in the United States ~~(“Portfolio”~~as well as our pro rata share of those properties owned through our joint ventures (collectively, our “Portfolio”) and the estimated value of in-place contracts of our ~~recently acquired~~ third-party asset management business as of October 5, 2017. On October 4, 2017, we completed a transaction to acquire certain real estate assets, the third-party investment management business, and the captive insurance company of Phillips Edison Limited Partnership (“PELP”) in a stock and cash transaction (“PELP transaction”).March 31, 2020.

We provided the ~~estimated value per share~~EVPS to assist broker-dealers that participated in our public offering in meeting their customer account statement reporting obligations under ~~National Association of Securities Dealers Conduct Rule 2340 as required by the~~ Financial Industry Regulatory Authority (“FINRA”). Rule 2231. This valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the ~~Investment Program Association~~Institute for Portfolio Alternatives (“IPA”) in April 2013 (“IPA Valuation Guidelines”).

We engaged Duff & Phelps, LLC (“Duff & Phelps”), an independent valuation expert ~~which~~that has expertise in appraising commercial real estate assets, to provide a calculation of the range in ~~estimated value per share~~EVPS of our common stock as of ~~October 5, 2017, the date immediately following the PELP transaction.~~March 31, 2020. Duff & Phelps prepared a valuation report (“Valuation Report”) that provided this range based substantially on its estimate of the “as is” market ~~values~~value of the Portfolio and the

estimated value of in-place contracts of the third-party asset management business. Duff & Phelps made adjustments to the aggregate estimated value of our Portfolio to reflect ~~pro forma~~ balance sheet assets and liabilities provided by our management as of ~~October 5, 2017,~~March 31, 2020, before calculating a range of estimated values based on the number of outstanding shares of our common stock as of ~~October 5, 2017.~~March 31, 2020. The COVID-19 pandemic has impacted the global financial markets. As of the valuation date, Duff & Phelps attached less weight to previous market evidence for comparison purposes to arrive at opinions of value. Due to a dearth of transaction activity that takes into account this impact, they were forced to infer conclusions from public market data (stock prices) and other data, which are very volatile. They surveyed market participants on a daily basis to try to ascertain market inputs, but due to the overall uncertainty of the broader markets, the data points are not widely consistent. The valuation is, therefore, reported on the basis of “material valuation uncertainty”. Consequently, less certainty, and a higher degree of caution, should be attached to the valuation than would normally be the case. These calculations produced an ~~estimated value per share~~EVPS in the range of ~~$10.34~~$8.45 to ~~$11.70~~$9.68 as of ~~October 5, 2017. The Independent Directors ultimately~~March 31, 2020, and the independent directors, after discussions with management, approved ~~$11.00~~$8.75 as the ~~estimated value per share~~EVPS as of ~~our common stock on November 8, 2017.~~March 31, 2020. We previously established an ~~estimated value per share~~EVPS on May 8, 2019 of ~~$10.20~~$11.10 based substantially on the same methodology and process as of ~~July 31, 2015, which was reaffirmed as of April 14, 2016 and~~ March 31, ~~2017.~~2019, with the exception of the weighting adjustments described previously. We expect to review the ~~estimated value per share as of March 31, 2018, and thereafter,~~EVPS at least annually.

The following table summarizes the material components of the ~~estimated value per share~~EVPS of our common stock as of ~~October 5, 2017~~March 31, 2020 (in thousands, except per share amounts):


	Low		High			Low		High
Investment in Real Estate Assets:					Investment in Real Estate Assets:
Phillips Edison real estate valuation	$	3,972,120	$	4,284,420	Phillips Edison real estate valuation	$	5,135,800	$	5,536,300
Management company	90,202		90,202		Management company	23,000		23,000
Joint venture properties(1)					Joint venture properties(1)	87,345		94,290
Total market value	4,062,322		4,374,622		Total market value	5,246,145		5,653,590

Other Assets:					Other Assets:
Cash and cash equivalents	13,068		13,068		Cash and cash equivalents	35,437		35,437
Restricted cash	16,480		16,480		Restricted cash	47,866		47,866
Accounts receivable	45,360		45,360		Accounts receivable	49,645		49,645
Derivative assets					Derivative assets	18		18
Prepaid expenses and other assets	26,701		26,701		Prepaid expenses and other assets	12,009		12,009
Total other assets	101,609		101,609		Total other assets	144,975		144,975

Liabilities:					Liabilities:
Notes payable and credit facility	1,776,636		1,776,636		Notes payable and credit facility	2,420,714		2,420,714
Mark to market of debt	9,014		9,014
Mark to market - debt					Mark to market - debt	10,052		10,052
Derivative liability					Derivative liability	62,756		62,756
Accounts payable and accrued expenses	1,866		1,866		Accounts payable and accrued expenses	82,138		82,138
Security deposits	7,740		7,740
Total liabilities	1,795,256		1,795,256		Total liabilities	2,575,660		2,575,660

Net Asset Value	$	2,368,675	$	2,680,975	Net Asset Value	$	2,815,460	$	3,222,905

Common stock and OP units outstanding	229,077		229,077

Common stock and Operating Partnership units (“OP units”) outstanding					Common stock and Operating Partnership units (“OP units”) outstanding	333,092		333,092
Net Asset Value Per Share	$	10.34	$	11.70	Net Asset Value Per Share	$	8.45	$	9.68

(1)Represents our pro rata share of the properties owned by our joint ventures.

Our goal is to provide an estimate of the market value of our shares. However, the majority of our assets ~~will~~ consist of commercial real estate, and as with any valuation methodology, the methodologies used were based upon a number of assumptions and estimates that may not have been accurate or complete. Different parties with different assumptions and estimates could have derived a different ~~estimated value per share,~~EVPS, and those differences could have been significant. These limitations are discussed further under “Limitations of Estimated Value per Share” below.

Valuation Methodologies—Our goal in calculating an ~~estimated value per share~~EVPS was to arrive at a value that was reasonable and based off of what we deemed to be appropriate valuation and appraisal methodologies and assumptions and a process that was in accordance with the IPA Valuation Guidelines. The following is a summary of the valuation methodologies and components used to calculate the ~~estimated value per share.~~EVPS.

Independent Valuation Firm—Duff & Phelps was retained by us on ~~September 25, 2017,~~February 27, 2020, as authorized by the ~~Conflicts Committee~~independent directors of the Board, ~~of Directors,~~ to provide independent valuation services. ~~The Conflicts Committee was composed of all of our Independent Directors.~~ Duff & Phelps, who is not affiliated with us, is a leading global valuation advisor with expertise in complex valuation ~~work that is not affiliated with us.~~work. Duff & Phelps had previously provided services to us pertaining to the allocation of acquisition purchase prices for financial reporting purposes in connection with the Portfolio, for which it received usual and customary compensation. Duff & Phelps may be engaged to provide professional services to us in the future. The Duff & Phelps personnel who prepared the valuation had no present or prospective interest in the Portfolio and no personal interest with us.

Duff & Phelps’ engagement for its valuation services was not contingent upon developing or reporting predetermined results.

In addition, Duff & Phelps’ compensation for completing the valuation services was not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of us, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of its Valuation Report. We agreed to indemnify Duff & Phelps against certain liabilities arising out of this engagement.

Duff & Phelps’ analyses, opinions, or conclusions were developed, and the Valuation Report was prepared, in conformity with

the Uniform Standards of Professional Appraisal Practice. The Valuation Report was reviewed, approved and signed by individuals with the professional designation of MAI ~~(“Member~~(Member of the Appraisal ~~Institute”)~~Institute). The use of the Valuation Report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Duff & Phelps did not inspect the properties that formed the Portfolio.

In preparing the Valuation Report, Duff & Phelps relied on information provided by us regarding the Portfolio. For example, we provided information regarding building size, year of construction, land size and other physical, financial, and economic characteristics. We also provided lease information, such as current rent amounts, rent commencement and expiration dates, and rent increase amounts and dates. Property-level cash flow projections were negatively impacted for the estimated effects of the COVID-19 pandemic.

Duff & Phelps did not investigate the legal description or legal matters relating to the Portfolio, including title or encumbrances, and title to the properties was assumed to be good and marketable. The Portfolio was also assumed to be free and clear of liens, easements, encroachments and other encumbrances, and to be in full compliance with zoning, use, occupancy, environmental and similar laws unless otherwise stated by us. The Valuation Report contains other assumptions, qualifications and limitations that qualify the analysis, opinions and conclusions set forth therein. Furthermore, the prices at which our real estate properties may actually be sold could differ from their appraised values.

The foregoing is a summary of the standard assumptions, qualifications and limitations that generally apply to the Valuation Report.

Real Estate Portfolio Valuation—Duff & Phelps estimated the “as is” market values of the Portfolio as of ~~October 5, 2017,~~March 31, 2020, using various methodologies. Generally accepted valuation practice suggests assets may be valued using a range of methodologies. Duff & Phelps utilized the income capitalization approach with support from the sales comparison approach for each property. The income approach was the primary indicator of value, with secondary consideration given to the sales approach. Duff & Phelps performed a study of each market to measure current market conditions, supply and demand factors, growth patterns, and their effect on each of the subject properties.

The income capitalization approach simulates the reasoning of an investor who views the cash flows that would result from the anticipated revenue and expense on a property throughout its lifetime. Under the income capitalization approach, Duff & Phelps used an estimated net operating income (“NOI”) for each property, and then converted it to a value indication using a discounted cash flow analysis. The discounted cash flow analysis focuses on the operating cash flows expected from a property and the anticipated proceeds of a hypothetical sale at the end of an assumed holding period, with these amounts then being discounted to their present value. The discounted cash flow method is appropriate for the analysis of investment properties with multiple leases, particularly leases with cancellation clauses or renewal options, and especially in volatile markets.

The sales comparison approach estimates value based on what other purchasers and sellers in the market have agreed to as a price for comparable improved properties. This approach is based upon the principle of substitution, which states that the limits of prices, rents and rates tend to be set by the prevailing prices, rents and rates of equally desirable substitutes. Duff & Phelps gathered comparable sales data throughout various markets as secondary support for its valuation estimate.

The following summarizes the ~~range~~upper and lower bounds of the average terminal capitalization rates and discount rates that were used to arrive at the estimated market values of our Portfolio:



	Range in Values
~~Overall Capitalization Rate~~		~~6.23 - 6.72%~~
Terminal Capitalization Rate	~~6.96~~7.08% - ~~7.46%~~7.58%
Discount Rate		~~7.55~~7.69% - ~~8.05%~~8.19%

Management Company Valuation—Duff & Phelps estimated the aggregate market value associated with our third-party asset management business using various methodologies. Duff & Phelps considered various applications of the income approach, market approach, and underlying assets approach, with the income approach determined to be the most reliable method for purposes of the analysis. The income approach analysis considered the projected fee income earned for services provided pursuant to various management and advisory agreements over the expected duration of that contract, assuming normal and customary renewal provisions. Such services include property management services performed for the properties in the Portfolio, as well as property and asset management services for certain unaffiliated real estate investment portfolios. In performing this analysis, solely fee income related to properties owned as of ~~October 5, 2017~~March 31, 2020 was considered. The income

approach also considered a reasonable level of expenses to support such activities, as well as other adjustments, and a discount rate that accounted for the time value of money and the risk of achieving the projected cash flows. All other assets and liabilities acquired are short term in nature and therefore the carrying value is considered to approximate the fair value. The result of the income approach analysis was the aggregate market value of the third-party asset management business, from which an estimated market value of net tangible assets (liabilities) was subtracted (added), to result in the aggregate intangible value of the management company.

Sensitivity Analysis—While we believe that Duff & Phelps’ assumptions and inputs were reasonable, a change in these assumptions would have impacted the calculations of the estimated value of the Portfolio, the estimated value of ~~its recently acquired~~our third-party asset management business, and our ~~estimated value per share.~~EVPS. The table below illustrates the impact on Duff & Phelps’ range in ~~estimated value per share~~EVPS if the terminal capitalization rates or discount rates were adjusted by 25 basis points and assumes all other factors remain unchanged. Additionally, the table illustrates the impact ~~of a 5% change in these rates in accordance with the IPA Valuation Guidelines. The table illustrates hypothetical results~~ if only one change in assumptions was made, with all other factors held constant. Further, each of these assumptions could change by more than 25 basis points or 5%.

Resulting Range in Estimated Value Per Share

Increase of 25 basis points ~~($)~~

Decrease of 25 basis points ~~($)~~

Increase of 5% ~~($)~~

Decrease of 5% ~~($)~~

Terminal Capitalization Rate

~~10.03~~$8.25 - ~~11.33~~$9.42

~~10.67~~$8.81 - ~~12.10~~$10.10

~~9.91~~$8.13 - ~~11.22~~$9.31

~~10.82~~$8.95 - ~~12.23~~$10.24

Discount Rate

~~10.01~~$8.23 - ~~11.34~~$9.43

~~10.66~~$8.81 - ~~12.05~~$10.07

~~9.83~~$8.06 - ~~11.18~~$9.28

~~10.84~~$8.99 - ~~12.22~~$10.24

Other Assets and Other Liabilities—Duff & Phelps made adjustments to the aggregate estimated values of our investments to reflect our other assets and other liabilities based on ~~pro forma~~ balance sheet information provided by us ~~and the Advisor~~ as of ~~October 5, 2017.~~March 31, 2020.

Role of the Independent Directors—The ~~Independent Directors received a copy of the Valuation Report and~~independent directors discussed the ~~report~~valuation process and results with representatives of Duff & Phelps. The ~~Independent Directors~~independent directors also discussed the ~~Valuation Report,~~results, the Portfolio, the third-party asset management business, our other assets and liabilities, and other matters with management. Management recommended to the ~~Independent Directors~~independent directors that ~~$11.00~~$8.75 per share be approved as the ~~estimated value per share~~EVPS of our common stock. The ~~Independent Directors~~independent directors discussed the rationale for this value with management.

Following the ~~Independent Directors’ receipt~~independent directors’ discussion with Duff & Phelps and ~~review of the Valuation Report,~~ the recommendation of management, and in light of other factors considered by the ~~Independent Directors,~~independent directors, the ~~Independent Directors~~independent directors concluded that the range in ~~estimated value per share~~EVPS of ~~$10.34 and $11.70~~$8.45 to $9.68 was appropriate. ~~Management then recommended to our Independent Directors that it select $11.00 as the estimated value per share of our common stock. Our Independent Directors~~The independent directors agreed to accept the recommendation of management and approved ~~$11.00~~$8.75 as the ~~estimated value per share~~EVPS of our common stock as of ~~October 5, 2017,~~March 31, 2020, which determination was ultimately and solely the responsibility of the ~~Independent Directors.~~independent directors.

Limitations of Estimated Value per Share—We ~~provided~~are providing this ~~estimated value per share~~EVPS to assist broker-dealers that participated in our public offering in meeting our customer account statement reporting obligations. This valuation was performed in accordance with the provisions of the IPA Valuation Guidelines. As with any valuation methodology, the methodologies used were based upon a number of estimates and assumptions that may not have been accurate or complete. Different parties with different assumptions and estimates could have derived a different ~~estimated value per share,~~EVPS, and this difference could have been significant. The ~~estimated value per share~~EVPS is not audited and does not represent a determination of the fair value of our assets or liabilities based on ~~U.S.~~accounting principles generally accepted ~~accounting principles~~in the United States (“GAAP”), nor does it represent a liquidation value of our assets and liabilities, the price a third party would pay to acquire us, the price at which our shares of common stock would trade in secondary markets, or the amount at which our shares of common stock would trade on a national securities exchange.

Accordingly, ~~with respect to the estimated value per share,~~ we can give no assurance that:

•our shares would trade at or near the EVPS if listed on a national securities exchange;

•a stockholder would be able to resell his or her shares at the ~~estimated value per share;~~EVPS;

•a stockholder would ultimately realize distributions per share equal to ~~our estimated value per share~~the EVPS upon a liquidation of our assets and settlement of our ~~liabilities or~~liabilities;

•a stockholder would receive an amount per share equal to the EVPS upon a sale of ~~us;~~the Company;

~~our shares of common stock would trade at the estimated value per share on a national securities exchange;~~

•a third party would offer the ~~estimated value per share~~EVPS in an arm’s-length transaction to purchase all or substantially all of our shares of common stock;

•another independent third-party appraiser or third-party valuation firm would agree with our ~~estimated value per share;~~EVPS; or

•the methodologies used to calculate our ~~estimated value per share~~EVPS would be acceptable to FINRA for use on customer account statements or ~~for compliance with ERISA reporting requirements.~~that the EVPS will satisfy the applicable annual valuation requirements under ERISA.

~~We did~~Further, aside from estimates regarding the impact of the COVID-19 pandemic, we have not ~~make~~made any adjustments to the valuation of our EVPS for the impact of other transactions occurring subsequent to ~~October 5, 2017,~~March 31, 2020, including, but not limited to, (1) acquisitions or dispositions of assets, (2) the issuance of common stock under the ~~distribution reinvestment plan, (2) net operating income earned~~Dividend Reinvestment Plan (“DRIP”), (3) NOI and dividends declared ~~(3)~~(see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Same-Center Net Operating Income” of this filing on Form 10-K for the calculation of NOI), (4) the repurchase of shares, ~~(4) asset acquisitions,~~ and (5) changes in leases, tenancy, or other business orand operational changes. The value of our shares of common stock will fluctuate over time in response to developments related to individual real estate assets, ~~in the Portfolio,~~ the management of those assets, and changes in the real estate and finance markets. Because of, among other factors, the high concentration of our total assets in real estate and the number of shares of our common stock outstanding, changes in the value of individual real estate assets ~~in the Portfolio~~ or changes in valuation assumptions could have a very significant impact on the value of our ~~shares.~~shares of common stock. The ~~estimated value per share does not reflect a portfolio premium or the fact that we are internally-managed. The estimated value per share also~~EVPS does not take into account any disposition costs or fees for real estate properties, debt prepayment penalties that ~~could apply~~may be incurred upon the prepayment of certain of our debt obligations, or the impact of restrictions on the assumption of debt.

~~Amended and Restated Dividend Reinvestment Plan~~

~~We have adopted~~ Accordingly, the ~~dividend reinvestment program (“DRIP”), through which stockholders may elect to reinvest an amount equal to the dividends declared on their shares of common stock into shares~~EVPS of our common stock ~~in lieu of receiving cash dividends. In accordance with the DRIP, participants in the DRIP acquire shares of common stock at a price equal to the estimated value per share. Participants in the DRIP~~ may ~~purchase fractional shares so that 100%~~or may not be an accurate reflection of the ~~dividends may be used to acquire additional shares~~fair market value of our ~~common stock. For~~stockholders’ investments and will not likely represent the ~~year ended December 31, 2017, 4.8 million shares were issued through the DRIP, resulting in~~amount of net proceeds that would result from an immediate sale of ~~approximately $49.1 million. For the year ended December 31, 2016, 5.8 million shares were issued through the DRIP, resulting in proceeds of approximately $58.9 million.~~our assets.

Distributions—We elected to be taxed as a ~~REIT~~real estate investment trust (“REIT”) for federal income tax purposes commencing with our taxable year ended December 31, 2010. As a REIT, we have made, and intend to continue to make, distributions each taxable year equal to at least 90% of our taxable income (excluding capital gains and ~~computing~~computed without regard to the dividends paid deduction). ~~One of our primary goals is to pay regular monthly distributions to our stockholders. During the years ended December 31, 2017 and 2016,~~

On March 27, 2020, our Board suspended stockholder distributions, effective after the payment of ~~Directors (“Board”)~~the March 2020 distribution on April 1, 2020, as a result of the uncertainty surrounding the COVID-19 pandemic. On November 4, 2020, our Board authorized distributions for the month of December 2020, for stockholders of record at the close of business on December 28, 2020, equal to a ~~daily~~monthly amount of ~~$0.00183562 and~~

~~$0.00183060, respectively,~~$0.02833333 per share of common stock, ~~outstanding based on daily~~or $0.34 annualized. On December 14, 2020, our Board announced that the date of record ~~dates. Beginning January 1, 2018, we pay~~for December distributions was moved to ~~stockholders based on monthly record dates. The 2018 monthly distribution rate is currently~~December 31, 2020. OP unit holders received distributions at the same ~~annual distribution~~ rate as ~~2017.~~common stockholders. We paid this distribution on January 12, 2021.

~~The total gross~~Amended and Restated DRIP—We have adopted the DRIP, through which stockholders may elect to reinvest an amount equal to the distributions declared ~~to stockholders for the years ended December 31, 2017 and 2016, were as follows (in thousands):~~

2017 2016
Distributions declared $ 123,363
$ 123,141

~~All distributions declared during the years ended December 31, 2017 and 2016, have been funded by a combination of cash generated through operations and borrowings.~~

~~Distributions declared to common stockholders subsequent to December 31, 2017, were as follows (in thousands):~~

Month⁽¹⁾
Date of Record Distribution Rate Date Distributions Paid Gross Amount of Distributions Paid Distributions Reinvested through the DRIP Net Cash Distributions
December 12/1/2017 - 12/31/2017 $ 0.00183562
1/2/2018 $ 10,544
$ 4,354
$ 6,190
January 1/16/2018 0.05583344
2/1/2018 10,363
4,228
6,135
February 2/15/2018 0.05583344
3/1/2018 10,381
4,186
6,195


⁽¹⁾	~~The distribution for March, payable to shareholders of record as of March 15, 2018, will be paid on April 2, 2018.~~

~~Unregistered Sales of Equity Securities~~

~~During 2017, we did not sell any equity securities that were not registered under the Securities Act.~~

~~Share Repurchases~~

~~Our Share Repurchase Program (“SRP”) may provide a limited opportunity for stockholders to have~~on their shares of common stock ~~repurchased, subject to certain restrictions and limitations that are discussed below:~~

~~During any calendar year, we may repurchase no more than 5%~~into additional shares of ~~the weighted-average number~~our common stock in lieu of ~~shares outstanding during the prior calendar year.~~

We have no obligation to repurchase shares if the repurchase would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

~~The~~receiving cash ~~available for repurchases on any particular date will generally be limited to the proceeds from~~distributions. In accordance with the DRIP, ~~during the preceding four fiscal quarters, less any cash already used for repurchases since the beginning~~participants acquire shares of ~~the same period; however, subject to the limitations described above, we may use other sources of cash~~common stock at ~~the discretion of the Board. The limitations described above do not apply to shares repurchased due to~~ a ~~stockholder’s death, “qualifying disability,” or “determination of incompetence.”~~

Only those stockholders who purchased their shares from us or received their shares from us (directly or indirectly) through one or more non-cash transactions may be able to participate in the SRP. In other words, once our shares are transferred for value by a stockholder, the transferee and all subsequent holders of the shares are not eligible to participate in the SRP.

~~The Board reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase.~~

~~The repurchase~~ price ~~per share for all stockholders is~~ equal to the estimated value per share. ~~Repurchases~~Participants in the DRIP may purchase fractional shares so that 100% of the distributions may be used to acquire additional shares of our common stock. For the year ended December 31, 2020, 1.4 million shares were issued through the DRIP, resulting in proceeds of approximately $15.9 million. For the year ended December 31, 2019, 6.1 million shares were issued through the DRIP, resulting in proceeds of approximately $67.4 million.

On March 27, 2020, the DRIP was suspended, and the March 2020 distribution was paid in all cash on April 1, 2020. On November 4, 2020, our Board reinstated the DRIP, which became effective beginning with the December 2020 distribution paid in January 2021.

Unregistered Sales of Equity Securities—During the year ended December 31, 2020, we issued an aggregate of 3.0 million shares of common stock ~~will be made monthly~~in redemption of 3.0 million OP units. These shares of common stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. We relied on the exemption under Section 4(a)(2) based upon ~~written notice~~factual representations received ~~by us at least five days prior~~from the limited partner who received the shares of common stock.

Share Repurchases—On August 7, 2019, the Board suspended the Share Repurchase Program (“SRP”) with respect to standard repurchases. The SRP for death, qualifying disability, or determination of incompetence (“DDI”) was suspended effective March 27, 2020, in response to the ~~end~~uncertainty of COVID-19.

On January 8, 2021, the ~~applicable month, assuming no limitations,~~Board adopted the Fourth Amended and Restated Share Repurchase Program (“Fourth Amended SRP”), effective January 14, 2021. Under the Fourth Amended SRP, share repurchases for DDI have been reinstated at $5.75 per share, and as ~~noted above, exist. Stockholders may withdraw their repurchase request at any time up~~of March 1, 2021, we have repurchased 0.1 million shares for a total value of $0.4 million. The SRP with respect to ~~five business days prior to the repurchase date. Unfulfilled repurchase requests are treated as requests for repurchase during future months until satisfied or withdrawn.~~standard repurchases remains suspended.

Our Board may amend, suspend, or terminate the program upon 30 days’ notice. We may provide notice by including such information (a) in a current report on Form 8-K or in our annual or quarterly reports, all publicly filed with the ~~SEC,~~U.S. Securities and Exchange Commission (“SEC”), or (b) in a separate mailing to the stockholders.

On November 4, 2020, our Board approved a voluntary tender offer that commenced on November 10, 2020 (the “Tender Offer”) for up to 4.5 million shares of our outstanding common stock at a price of $5.75 per share, for a total value of approximately $26 million. On December 14, 2020, the Tender Offer was amended to extend the expiration date to December 29, 2020, and the offer to purchase shares was increased to approximately 17.4 million shares, for a total value of approximately $100 million. All of the other terms and conditions of the Tender Offer remained unchanged. In connection with the ~~May 2017 announcement~~Tender Offer, we repurchased 13.5 million shares of common stock for a total value of $77.6 million, which includes the ~~PELP transaction (see Note 3),~~issuance of 2.8 million common shares in redemption of 2.8 million OP units converted at the ~~SRP was suspended in May 2017 and resumed in June 2017.~~time of repurchase.

The following table presents all non-employee share repurchases for the years ended December 31, ~~2017~~2020 and ~~2016~~2019 (in thousands, except per share amounts):


	2020(1)		2019
Shares repurchased	13,746		3,311
Cost of repurchases	$	80,398	$	35,963
Average repurchase price	$	5.85	$	10.86

(1)The average repurchase price is comprised of share repurchases in connection with the Tender Offer, and the SRP for DDI prior to its suspension effective March 27, 2020.

In addition, during the year ended December 31, 2020, we repurchased approximately 36,000 shares for an aggregate purchase price of $0.4 million (average price of $11.07 per share) in connection with common shares surrendered to us to

2017 2016
Shares repurchased 4,617
2,019
Cost of repurchases $ 47,157
$ 20,301
Average repurchase price $ 10.21
$ 10.05
satisfy statutory minimum tax withholding obligations associated with the vesting of restricted stock awards under our equity-based compensation plan.

During the quarter ended December 31, ~~2017,~~2020, we repurchased shares as follows (shares in thousands):

Period
Total Number of Shares
Redeemed

Average Price Paid per Share ⁽¹⁾

Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program⁽²⁾
Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
October 2017 68
$ 10.20
68

⁽³⁾
November 2017 22
10.98
22

⁽³⁾
December 2017 56
11.00
56

⁽³⁾


Period	Total Number of Shares Repurchased	Average Price Paid per Share(1)(2)		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program(1)	Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Program
October 2020	—	$	—	—	(2)
November 2020	—	—		—	(2)
December 2020	13,452	5.75		13,452	(2)

⁽¹⁾

On November 8, 2017, our Board increased the estimated value per share of our common stock to $11.00 based substantially on the estimated market value of our portfolio of real estate properties and our recently acquired third-party investment management business as of October 5, 2017, the first full business day after the closing of the PELP transaction. Prior to November 8, 2017, the estimated value per share was $10.20 (see Note 13~~). The repurchase price per share for all stockholders is equal to the estimated value per share on the date of the repurchase.~~


⁽²⁾	~~We announced the commencement of the SRP on August 12, 2010, and it was subsequently amended on September 29, 2011, and on April 14, 2016.~~


⁽³⁾	~~We currently limit~~ (1)Share repurchases made during the three months ended December 31, 2020 were made in connection with the Tender Offer. (2)As the SRP remained suspended as of December 31, 2020, the dollar value ~~and number of shares that may yet be repurchased under the SRP as described above.~~

~~In 2017~~ and ~~2016, repurchase requests surpassed the funding limits under the SRP. Due~~number of shares that may be repurchased were subject to the ~~program’s funding limits, no funds were available for repurchases during~~limitations of the fourth quarter of 2017 and no funds will be available for the the first quarter of 2018. Additionally, repurchases during the remainder of 2018 are expected to be limited. When we are unable to fulfill all repurchase requests in any month, we will honor requests on a pro rata basis to the extent possible.Tender Offer. As of December 31, ~~2017, we had 10.8 million shares of unfulfilled repurchase requests. We will continue to fulfill~~2020 all share repurchases ~~sought upon a stockholder’s death, “qualifying disability,” or “determination of incompetence”~~ in ~~accordance~~connection with the ~~terms of the SRP.~~Tender Offer had been executed.

ITEM 6. SELECTED FINANCIAL DATA


																		As of and for the Years Ended December 31,
As of and for the years ended December 31,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2017⁽¹⁾			2016			2015			2014			2013			(in thousands, except per share amounts)	2020		2019		2018		2017		2016
Balance Sheet Data:⁽²⁾
Investment in real estate assets at cost		$	3,751,927		$	2,584,005		$	2,350,033		$	2,201,235		$	1,136,074
Balance Sheet Data:																	Balance Sheet Data:
Total investment in real estate assets																	Total investment in real estate assets	$	5,295,137	$	5,257,999	$	5,380,344	$	3,751,927	$	2,584,005
Cash and cash equivalents	Cash and cash equivalents	5,716			8,224			40,680			15,649			460,250			Cash and cash equivalents	104,296		17,820		16,791		5,716		8,224
Total assets	Total assets	3,526,082			2,380,188			2,226,248			2,141,196			1,716,256			Total assets	4,678,563		4,828,195		5,163,477		3,526,082		2,380,188
Debt obligations, net	Debt obligations, net	1,806,998			1,056,156			845,515			640,889			195,601			Debt obligations, net	2,292,605		2,354,099		2,438,826		1,806,998		1,056,156
Operating Data:	Operating Data:																Operating Data:
Total revenues	Total revenues	$	311,543		$	257,730		$	242,099		$	188,215		$	73,165		Total revenues	$	498,017	$	536,706	$	430,392	$	311,543	$	257,730
Property operating expenses	Property operating expenses	(53,824		)	(41,890		)	(38,399		)	(32,919		)	(11,896		)	Property operating expenses	87,490		90,900		77,209		53,824		41,890
Real estate tax expenses	Real estate tax expenses	(43,456		)	(36,627		)	(35,285		)	(25,262		)	(9,658		)	Real estate tax expenses	67,016		70,164		55,335		43,456		36,627
General and administrative expenses	General and administrative expenses	(36,348		)	(31,804		)	(15,829		)	(8,632		)	(4,346		)	General and administrative expenses	41,383		48,525		50,412		36,348		31,804
Impairment of real estate assets																	Impairment of real estate assets	2,423		87,393		40,782		—		—
Interest expense, net	Interest expense, net	(45,661		)	(32,458		)	(32,390		)	(20,360		)	(10,511		)	Interest expense, net	85,303		103,174		72,642		45,661		32,458
Net (loss) income		(41,718		)	9,043			13,561			(22,635		)	(12,350		)
Net (loss) income attributable to stockholders		(38,391		)	8,932			13,360			(22,635		)	(12,404		)
Net income (loss)																	Net income (loss)	5,462		(72,826)		46,975		(41,718)		9,043
Net income (loss) attributable to stockholders																	Net income (loss) attributable to stockholders	4,772		(63,532)		39,138		(38,391)		8,932
Other Operational Data:⁽⁴⁾⁽¹⁾	Other Operational Data:⁽⁴⁾⁽¹⁾																Other Operational Data:⁽⁴⁾⁽¹⁾
Owned Real Estate NOI		$	204,519		$	173,910		$	163,017		$	125,816		$	50,152
NOI for real estate investments																	NOI for real estate investments	$	332,023	$	355,796	$	272,450	$	204,407	$	173,910
Funds from operations (“FFO”) attributable to stock- holders and convertible noncontrolling interests	Funds from operations (“FFO”) attributable to stock- holders and convertible noncontrolling interests	84,150			110,406			115,040			56,513			12,769			Funds from operations (“FFO”) attributable to stock- holders and convertible noncontrolling interests	221,681		217,010		156,222		84,150		110,406
Modified funds from operations (“MFFO”)		125,183			107,862			114,344			94,552			28,982
Core FFO																	Core FFO	220,407		230,866		176,126		132,011		114,636
Cash Flow Data:	Cash Flow Data:																Cash Flow Data:
Cash flows provided by operating activities	Cash flows provided by operating activities	$	108,861		$	103,076		$	106,073		$	75,671		$	18,540		Cash flows provided by operating activities	$	210,576	$	226,875	$	153,291	$	108,861	$	103,076
Cash flows used in investing activities		(620,749		)	(226,217		)	(110,774		)	(715,772		)	(776,219		)
Cash flows provided by financing activities		509,380			90,685			29,732			195,500			1,210,275
Cash flows (used in) provided by investing activities																	Cash flows (used in) provided by investing activities	(44,092)		64,183		(258,867)		(640,742)		(191,328)
Cash flows (used in) provided by financing activities																	Cash flows (used in) provided by financing activities	(129,655)		(280,254)		162,435		509,380		90,685
Per Share Data:	Per Share Data:																Per Share Data:
Net (loss) income per share—basic and diluted		$	(0.21	)	$	0.05		$	0.07		$	(0.13	)	$	(0.18	)
Common stock distributions declared		$	0.67		$	0.67		$	0.67		$	0.67		$	0.67
Weighted-average shares outstanding—basic		183,784			183,876			183,678			179,280			70,227
Weighted-average shares outstanding—diluted		183,784			186,665			186,394			179,280			70,227
Net income (loss) per share - basic and diluted																	Net income (loss) per share - basic and diluted	$	0.02	$	(0.22)	$	0.20	$	(0.21)	$	0.05
Common stock distributions declared per share																	Common stock distributions declared per share	$	0.19	$	0.67	$	0.67	$	0.67	$	0.67
Weighted-average shares outstanding - basic																	Weighted-average shares outstanding - basic	290,280		283,909		196,602		183,784		183,876
Weighted-average shares outstanding - diluted																	Weighted-average shares outstanding - diluted	333,466		327,117		241,367		196,497		186,665


⁽¹⁾			~~Property acquisitions include~~See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Funds from Operations and Core Funds from Operations” of this filing on Form 10-K for the ~~76 properties acquired as part~~definition of ~~the PELP transaction.~~Core FFO, or information regarding why we present Core FFO, and for a reconciliation of this non-GAAP financial measure to Net Income (Loss).


⁽²⁾	~~The number of properties does not include additional real estate purchased adjacent to previously acquired centers.~~


⁽³⁾	~~The average remaining lease term in years excludes future options to extend the term of the lease.~~

During 2020, we paid distributions of $0.05583344 per share, or $0.67 annualized, for the months of December 2019 and January, February, and March 2020 until the suspension of stockholder distributions by the Board. During the year ended December 31, 2019, we paid monthly distributions of $0.05583344 per share. The timing and amount of distributions is determined by our Board and is influenced in part by our intention to comply with REIT requirements of the Internal Revenue Code.

~~Market Outlook—Real Estate~~On March 27, 2020, as a result of the uncertainty surrounding the COVID-19 pandemic, our Board suspended stockholder distributions, effective after the payment of the March 2020 distribution on April 1, 2020. The DRIP was also suspended, and ~~Real Estate Finance Markets~~the March 2020 distribution was paid in all cash on April 1, 2020. The suspension of stockholder distributions and the DRIP did not impact our qualification as a REIT.

~~Management reviews a number~~On November 4, 2020, our Board reinstated monthly stockholder distributions beginning December 2020 equal to $0.02833333 per share, or $0.34 annualized. Additionally, the DRIP was reinstated with this distribution. OP unit holders received distributions at the same rate as common stockholders. The distribution and DRIP for December 2020 became effective for stockholders of ~~economic forecasts~~record at the close of business on December 31, 2020, and ~~market commentaries in order~~this distribution was paid on January 12, 2021. Distributions were paid for January and February 2021. Additionally, our Board has approved distributions of $0.02833333 per share for March 2021.

Our Board intends to evaluate ~~general economic conditions~~distributions on a monthly basis throughout 2021.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain, and which does not equal net income (loss) as calculated in accordance with GAAP). We generally will not be subject to U.S. federal income tax on the income that we distribute to our stockholders each year due to meeting the REIT qualification requirements. However, we may be subject to certain state and local taxes on any income, property, or net worth and to ~~formulate~~federal income and excise taxes on our undistributed income.

We have not established a ~~view~~minimum distribution level, and our charter does not require that we make distributions to our stockholders.

Cash Flow Activities—As of December 31, 2020, we had cash and cash equivalents and restricted cash of $131.9 million, a net cash increase of $36.8 million during the year ended December 31, 2020.

Below is a summary of our cash flow activity for the years ended December 31, 2020 and 2019 (dollars in thousands):


	2020		2019		$ Change		% Change
Net cash provided by operating activities	$	210,576	$	226,875	$	(16,299)	(7.2)	%
Net cash (used in) provided by investing activities	(44,092)		64,183		(108,275)		NM
Net cash used in financing activities	(129,655)		(280,254)		150,599		53.7	%

Operating Activities—Our net cash provided by operating activities was primarily impacted by the following:

•Property operations and working capital—Most of our operating cash comes from rental and tenant recovery income and is offset by property operating expenses, real estate taxes, and general and administrative costs. Our change in cash flows from property operations is primarily due to reduced revenue and collections as a result of the ~~current environment’s effect~~COVID-19 pandemic, partially mitigated by expense reduction measures at the property and corporate levels.

•Fee and management income—We also generate operating cash from our third-party investment management business, pursuant to various management and advisory agreements between us and the Managed Funds. Our fee and management income was $9.8 million for the year ended December 31, 2020, a decrease of $1.9 million as compared to the same period in 2019, primarily due to fee and management income no longer received from REIT III following its acquisition by us in October 2019; a decrease in fees received from NRP largely due to property dispositions; and lower rent and recovery collections for our unconsolidated joint ventures, which resulted in lower management fees paid to us, as a result of the COVID-19 pandemic. This offsets improvements in fees received from GRP I and GRP II (prior its acquisition by GRP I).

•Cash paid for interest—During the year ended December 31, 2020, we paid $78.5 million for interest, a decrease of $10.9 million over the same period in 2019, largely due to a decrease in LIBOR and expiring interest rate swaps in 2020, as well as repricing activities occurring in 2019.

Investing Activities—Our net cash (used in) provided by investing activities was primarily impacted by the following:

•Real estate acquisitions—During the year ended December 31, 2020, our third party acquisitions resulted in a total cash outlay of $41.5 million, as compared to a total cash outlay of $71.7 million during the same period in 2019. Additionally, our Merger with REIT III, which included a 10% equity interest in GRP II (prior to its acquisition by GRP I in October 2020), resulted in a total cash outlay of $17.0 million during the year ended December 31, 2019.

•Real estate dispositions—During the year ended December 31, 2020, our dispositions resulted in a net cash inflow of $57.9 million, as compared to a net cash inflow of $223.1 million during the same period in 2019.

•Capital expenditures—We invest capital into leasing our properties and maintaining or improving the condition of our properties. During the year ended December 31, 2020, we paid $64.0 million for capital expenditures, a decrease of $11.5 million over the same period in 2019. This decrease was primarily driven by reduced capital expenditures since the first quarter of 2020, as our capital investments were prioritized to support the reopening of our Neighbors and new leasing activity, or deferred if possible.

Financing Activities—Our net cash used in financing activities was primarily impacted by the following:

•Debt borrowings and payments—Cash from financing activities is primarily affected by inflows from borrowings and outflows from payments on debt. During the ~~real estate markets~~year ended December 31, 2020, we had $64.8 million in net repayment of debt primarily as a result of early repayments of debt utilizing cash from the disposition of properties and cash on hand. During the year ended December 31, 2019, we had $89.1 million in net repayment of debt, primarily using cash received from the disposition of properties.

•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders decreased by $94.0 million during the year ended December 31, 2020 as compared to the same period in 2019, primarily due to the temporary suspension of stockholder distributions.

•Share repurchases—Cash outflows for share repurchases decreased by $29.4 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019, primarily due to the suspension of the SRP. In connection with the Tender Offer, $77.6 million due to shareholders who tendered their shares was not yet paid as of December 31, 2020, and is recorded as Accounts Payable and Other Liabilities on our consolidated balance sheets. The amount was subsequently paid on January 5, 2021 (see Note 13 for more detail).

Off-Balance Sheet Arrangements

We are the limited guarantor for up to $190 million, capped at $50 million in most instances, of NRP’s debt. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor. Additionally, we are the limited

guarantor of a $175 million mortgage loan secured by GRP I properties. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor. We entered into a separate agreement with Northwestern Mutual in which we ~~operate.~~agreed to apportion any potential liability under this guaranty between us and them based on our ownership percentage.

~~According~~

Contractual Commitments and Contingencies

We have debt obligations related to both our secured and unsecured debt. In addition, we have operating leases pertaining to office equipment for our business as well as ground leases at certain of our shopping centers. The table below excludes obligations related to tenant allowances and improvements because such amounts are not fixed or determinable. However, we believe we currently have sufficient financing in place to fund any such amounts as they arise through cash from operations or borrowings. The following table details our contractual obligations as of December 31, 2020 (in thousands):


	Payments Due by Period
	Total		2021		2022		2023		2024		2025		Thereafter
Debt obligations - principal payments(1)	$	2,307,522	$	62,589	$	436,898	$	379,569	$	503,162	$	500,381	$	424,923
Debt obligations - interest payments(2)	285,788		68,710		58,768		50,785		38,767		25,457		43,301
Operating lease obligations	8,896		831		805		654		528		297		5,781
Finance lease obligations	171		102		29		24		16		—		—
Total	$	2,602,377	$	132,232	$	496,500	$	431,032	$	542,473	$	526,135	$	474,005

(1)The revolving credit facility matures in October 2021 and includes an option to extend the maturity to October 2022, with its execution being subject to compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees. We intend to either exercise our option to extend the maturity or to negotiate under new terms. As of December 31, 2020, we have no outstanding balance on our revolving credit facility.

(2)Future variable-rate interest payments are based on interest rates as of December 31, 2020, including the impact of our swap agreements.

Our portfolio debt instruments and the unsecured revolving credit facility contain certain covenants and restrictions. The following is a list of certain restrictive covenants specific to the ~~Bureau~~unsecured revolving credit facility and unsecured term loans that were deemed significant:

•limits the ratio of ~~Economic Analysis,~~total debt to total asset value, as defined, to 60% or less with a surge to 65% following a material acquisition;

•limits the ~~U.S. economy’s real gross domestic product (“GDP”) increased 2.3% in 2017 compared~~ratio of secured debt to ~~1.5% in 2016, according~~total asset value, as defined, to ~~preliminary estimates. The~~40% or less with a surge to 45% following a material acquisition;

•requires the fixed-charge ratio, as defined, to be 1.5:1 or greater, or 1.4:1 following a material acquisition;

•limits the ratio of cash dividend payments to FFO, as defined, to 95%;

•requires the current tangible net worth to exceed the minimum tangible net worth, as defined;

•limits the ratio of unsecured debt to unencumbered total asset value, as defined, to 60% or less with a surge to 65% following a material acquisition; and

•requires the unencumbered NOI to interest expense ratio, as defined, to 1.75:1 or greater, or 1.7:1 following a material acquisition.

Inflation

Inflation has been low historically and has had minimal impact on the operating performance of our shopping centers; however, inflation can increase in ~~real GDP in 2017 reflected positive contributions from personal consumption expenditures (“PCE”), nonresidential fixed investment,~~the future. Certain of our leases contain provisions designed to mitigate the adverse effect of inflation, including rent escalations and ~~exports. These upturns were partially offset by decelerations in residential fixed investment and in state and local government spending. Imports, which are a subtraction in the calculation~~requirements for Neighbors to pay their allocable share of ~~GDP, increased.~~

~~According to J.P. Morgan’s Global Economic Outlook Summary and 2018 REIT Outlook, real GDP is expected to grow approximately 2.5% in 2018.The U.S. retail~~operating expenses, including common area maintenance, utilities, real estate taxes, insurance, and certain capital expenditures. Additionally, many of our leases are for terms of less than ten years, which allows us to target increased rents to current market ~~displayed positive but decelerating fundamentals in 2017, with vacancy~~ rates ~~rising and increased emphasis on redevelopment pipelines.~~upon renewal.

Overall, retail real estate fundamentals remain strong but are expected to decelerate relative to previous years. Short-term interest rates are expected to increase in 2018 more than long-term interest rates. There is less occupancy to be gained in portfolios, new supply levels are below historical averages, and job growth is expected to be 1% monthly in 2018. Reductions to the corporate tax rate will add to economic growth, although commercial real estate is expected to benefit to a lesser extent than other sectors. Tax reform passed by Congress in 2017 is expected to have a minimal to slightly negative impact on REITs, although retailers should benefit from increased consumer spending. Stronger retailers should be better for shopping center owners as tenants can invest more to grow and improve their credit quality, reducing turnover.

~~Critical Accounting Policies~~Results of Operations

Known Trends and ~~Estimates~~Uncertainties of the COVID-19 Pandemic

The COVID-19 pandemic has impacted our results beginning with the second quarter largely in the form of reduced revenue, where our estimates around collectibility have created volatility in our earnings. We anticipate these trends will continue into 2021, and the total impact on revenue in the future cannot be determined at this time. The duration of the pandemic and mitigating measures, and the resulting economic impact, has caused some of our Neighbors to permanently vacate their spaces and/or not renew their leases. Under such circumstances, we may have difficulty leasing these spaces on the same or better terms or at all, and/or incur additional costs to lease vacant spaces, which may reduce our occupancy rates in the future and ultimately reduce our revenue. Extended periods of vacancy or reduced revenues may trigger impairments of our real estate assets. Additionally, these factors may impact disposition activity by decreasing demand and negatively impacting capitalization rates. Our disposition and acquisition activity has been reduced as a result of the pandemic during 2020.

The ongoing impact of the COVID-19 pandemic and the resulting economic downturn will likely continue to be significant to our results of operations into 2021 and potentially beyond as a result of a number of factors outside of our control. These factors include, but are not limited to: overall economic conditions on both a macro and micro level, including consumer demand as well as retailer demand for space within our shopping centers; the impact of social distancing guidelines, recommendations from governmental authorities, and consumer shopping preferences; the nature and effectiveness of any economic stimulus or relief measures; the timing of availability and distribution of vaccines to the general public; and the impact of all of the factors above, including other potentially unknown factors, on our Neighbors’ ability to continue paying rent and related charges on time or at all and Neighbors’ willingness to renew their leases on the same terms or at all. These factors have impacted our results from operations, and may continue to do so into the future. The primary impact to our results has been reduced revenue from Neighbor concessions, increased collectibility reserves, and decreased recovery rates on expenses. Other unforeseen impacts may also arise in the course of operating during these circumstances. See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview” of this filing on Form 10-K for our observation of Neighbor impacts through March 8, 2021.

In December 2020, the United States Food and Drug Administration issued emergency use authorizations for two vaccines for the prevention of COVID-19. The timeline for distribution of the vaccines to the public is determined at the state level, and consequently, the timeline for the removal of governmental mandates implemented to combat the spread of the virus may vary by state or locality. At this time, we are unable to ascertain the timing of any such events, and thus are unable to predict with certainty the impact that the vaccines and their effect in mitigating the spread of COVID-19 may have on our financial results.

Overall, we believe that our investment focus on grocery-anchored shopping centers that provide daily necessities has helped, and will continue to help, lessen the negative effect of the COVID-19 pandemic on our business compared to non-grocery anchored shopping centers. We are closely monitoring the occupancy, operating performance, and Neighbor sales results at our centers, including those Neighbors operating with reduced hours or under government-imposed restrictions. Further, we have taken action to maximize our financial flexibility by implementing expense reductions at the property and corporate level; prioritizing capital projects to support the reopening of our Neighbors and new leasing activity, or deferring if possible; temporarily suspending monthly distributions; and temporarily suspending share repurchases for DDI.

Summary of Operating Activities for the Years Ended December 31, 2020 and 2019


					Favorable (Unfavorable) Change
(dollars in thousands, except per share amounts)	2020		2019		$		%(1)
Revenues:
Rental income	$	485,483	$	522,270	$	(36,787)	(7.0)	%
Fee and management income	9,820		11,680		(1,860)		(15.9)	%
Other property income	2,714		2,756		(42)		(1.5)	%
Total revenues	498,017		536,706		(38,689)		(7.2)	%
Operating Expenses:
Property operating expenses	87,490		90,900		3,410		3.8	%
Real estate tax expenses	67,016		70,164		3,148		4.5	%
General and administrative expenses	41,383		48,525		7,142		14.7	%
Depreciation and amortization	224,679		236,870		12,191		5.1	%
Impairment of real estate assets	2,423		87,393		84,970		97.2	%
Total operating expenses	422,991		533,852		110,861		20.8	%
Other:
Interest expense, net	(85,303)		(103,174)		17,871		17.3	%
Gain on disposal of property, net	6,494		28,170		(21,676)		(76.9)	%
Other income (expense), net	9,245		(676)		9,921		NM
Net income (loss)	5,462		(72,826)		78,288		107.5	%
Net (income) loss attributable to noncontrolling interests	(690)		9,294		(9,984)		(107.4)	%
Net income (loss) attributable to stockholders	$	4,772	$	(63,532)	$	68,304	107.5	%

(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.

Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities. Our non-same-center portfolio includes 28 properties disposed of and seven properties acquired after December 31, 2018. Below are explanations of the significant fluctuations in the results of operations for the years ended December 31, 2020 and 2019:

Rental Income decreased $36.8 million as follows:

•$20.7 million decrease related to our same-center portfolio primarily as follows:

▪$26.8 million decrease largely due to the COVID-19 pandemic and its economic impact. This includes an increased number of Neighbors we have identified as a credit risk which resulted in a decrease to rental income of $24.4 million, including a $3.1 million reduction in revenues due to reserves on straight-line rent adjustments for the related leases. Additionally, we saw a $2.4 million decrease due to rent abatement;

▪$2.8 million decrease primarily due to non-cash straight-line rent amortization;

▪$7.1 million increase primarily due to a $0.23 increase in average minimum rent per square foot and a 0.8% improvement in average occupancy; and

▪$2.0 million increase in recovery income primarily due to a $3.1 million increase owing largely to higher recoverable insurance expenses and higher same-center occupancy, partially offset by a $1.1 million decrease in recoverable utilities.

•$16.1 million decrease related to our net disposition of 21 properties.

Fee and Management Income:

•The $1.9 milliondecrease in fee and management income is primarily due to fees no longer received from REIT III following its acquisition by us in October 2019; a decrease in fees received from NRP, primarily due to property dispositions; and lower rent and recovery collections for our unconsolidated joint ventures as a result of the COVID-19 pandemic, which resulted in lower management fees paid to us. This offsets improvements in fees received from GRP I and GRP II (prior its acquisition by GRP I).

Property Operating Expenses decreased $3.4 million as follows:

•$0.3 million decrease related to our same-center portfolio and corporate operating activities:

▪$1.4 million decrease primarily due to reduced performance compensation;

▪$1.2 million decrease primarily in connection with our expense reduction initiatives, including $0.8 million largely owing to lower maintenance and utility costs, and $0.4 million largely owing to lower travel expenses; and

▪$2.3 million increase in insurance expenses owing to a higher volume of claims and higher market rates.

•$3.1 million decrease related to our net disposition of 21 properties.

Real Estate Taxes decreased $3.1 million as follows:

•$1.1 million decrease related to our same-center portfolio primarily as a result of successful real estate tax appeals; and

•$2.0 million decrease related to our net disposition of 21 properties.

General and Administrative Expenses:

•The $7.1 million decrease in general and administrative expenses was primarily related to expense reductions taken to reduce the impact of the COVID-19 pandemic, with the majority of these decreases related to compensation.

Depreciation and Amortization decreased $12.2 million as follows:

•$7.6 million decrease related to our net disposition of 21 properties; and

•$4.6 million decrease related to our same-center portfolio and corporate operating activities, primarily due to intangible assets becoming fully amortized by December 31, 2019.

Impairment of Real Estate Assets:

•Our decrease in impairment of real estate assets of $85.0 million was due to a lower volume of assets under contract or actively marketed for sale at a disposition price that was less than the carrying value in 2020 as compared to 2019, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes. We continue to sell non-core assets and may potentially recognize impairments in future quarters, but our anticipated disposition activity was reduced due to market conditions as a result of the COVID-19 pandemic.

Interest Expense, Net:

•The $17.9 million decrease during the year ended December 31, 2020 as compared to the same period in 2019 was largely due to the decrease in LIBOR and expiring interest rate swaps in 2020 as well as repricing activities that occurred in 2019. Interest Expense, Net was comprised of the following (dollars in thousands):


	Year Ended December 31,
	2020			2019
Interest on revolving credit facility, net	$	1,668		$	1,827
Interest on term loans, net	46,798			62,745
Interest on secured debt	29,001			23,048
Loss on extinguishment or modification of debt, net	4			2,238
Non-cash amortization and other	7,832			13,316
Interest expense, net	$	85,303		$	103,174

Weighted-average interest rate as of end of year	3.1		%	3.4		%
Weighted-average term (in years) as of end of year	4.1			5.0

Gain on Disposal of Property, Net:

•The $21.7 million decrease was primarily related to the sale of seven properties (plus other miscellaneous disposals and write-offs) with a net gain of $6.5 million during the year ended December 31, 2020, as compared to the sale of 21 properties with net gain of $28.2 million during the year ended December 31, 2019 (see Note 5).

Other Income (Expense), Net:

•The $9.9 million change was largely due to other impairment charges of $9.7 million in connection with the REIT III public offering during the year ended December 31, 2019, which included $7.8 million of impairment charges related

to our corporate intangible asset and $1.9 million of impairment charges related to organization and offering costs. Other Income (Expense), Net was comprised of the following (dollars in thousands):


	Year Ended December 31,
	2020		2019
Change in fair value of earn-out liability	$	10,000	$	7,500
Equity in (loss) income of unconsolidated joint ventures	(31)		1,069
Transaction and acquisition expenses	(539)		(598)
Federal, state, and local income tax expense	(491)		(785)
Other impairment charges	(359)		(9,661)
Settlement of property acquisition-related liabilities	510		1,360
Other	155		439
Other income (expense), net	$	9,245	$	(676)

Summary of Operating Activities for the Years Ended December 31, 2019 and 2018

For a discussion of the year-to-year comparisons in the results of operations for the years ended December 31, 2019 and 2018, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2019 Annual Report on Form 10-K, filed with the SEC on March 12, 2020.

Non-GAAP Measures

Same-Center Net Operating Income—We present Same-Center NOI as a supplemental measure of our performance. We define NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. For the three months and years ended December 31, 2020 and 2019, Same-Center NOI represents the NOI for the 275 properties that were wholly-owned and operational for the entire portion of both comparable reporting periods. We believe Same-Center NOI provides useful information to our investors about our financial and operating performance because it provides a performance measure of the revenues and expenses directly involved in owning and operating real estate assets and provides a perspective not immediately apparent from net income (loss). Because Same-Center NOI excludes the change in NOI from properties acquired or disposed of after December 31, 2018, it highlights operating trends such as occupancy levels, rental rates, and operating costs on properties that were operational for both comparable periods. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our Same-Center NOI may not be comparable to other REITs.

Same-Center NOI should not be viewed as an alternative measure of our financial performance as it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties that could materially impact our results from operations.

The table below compares Same-Center NOI for the years ended December 31, 2020 and 2019 (dollars in thousands):


					Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Revenues:
Rental income(1)	$	364,998	$	360,548	$	4,450
Tenant recovery income	122,835		120,870		1,965
Reserves for uncollectibility(2)	(26,458)		(5,179)		(21,279)
Other property income	2,609		2,552		57
Total revenues	463,984		478,791		(14,807)		(3.1)	%
Operating expenses:
Property operating expenses	70,270		70,208		(62)
Real estate taxes	65,727		66,461		734
Total operating expenses	135,997		136,669		672		0.5	%
Total Same-Center NOI	$	327,987	$	342,122	$	(14,135)	(4.1)	%

(1)Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.

(2)Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or is considered creditworthy.

Same-Center Net Operating Income Reconciliation—Below is a ~~discussion~~reconciliation of Net Income (Loss) for the years ended December 31, 2020 and 2019 (in thousands):


	2020		2019
Net income (loss)	$	5,462	$	(72,826)
Adjusted to exclude:
Fees and management income	(9,820)		(11,680)
Straight-line rental income(1)	(3,356)		(9,079)
Net amortization of above- and below- market leases	(3,173)		(4,185)
Lease buyout income	(1,237)		(1,166)
General and administrative expenses	41,383		48,525
Depreciation and amortization	224,679		236,870
Impairment of real estate assets	2,423		87,393
Interest expense, net	85,303		103,174
Gain on disposal of property, net	(6,494)		(28,170)
Other (income) expense, net	(9,245)		676
Property operating expenses related to fees and management income	6,098		6,264
NOI for real estate investments	332,023		355,796
Less: Non-same-center NOI(2)	(4,036)		(13,674)
Total Same-Center NOI	$	327,987	$	342,122

(1)Includes straight-line rent adjustments for Neighbors deemed to be non-creditworthy.

(2)Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.

Funds from Operations and Core Funds from Operations—FFO is a non-GAAP performance financial measure that is widely recognized as a measure of REIT operating performance. The National Association of Real Estate Investment Trusts (“Nareit”) defines FFO as net income (loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property and gains (or losses) from change in control, plus depreciation and amortization, and after adjustments for impairment losses on real estate and impairments of in-substance real estate investments in investees that are driven by measurable decreases in the fair value of the depreciable real estate held by the unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We calculate FFO Attributable to Stockholders and Convertible Noncontrolling Interests in a manner consistent with the Nareit definition, with an additional adjustment made for noncontrolling interests that are not convertible into common stock.

Core FFO is an additional performance financial measure used by us as FFO includes certain non-comparable items that affect our performance over time. We believe that Core FFO is helpful in assisting management and investors with the assessment of the sustainability of operating performance in future periods. We believe it is more reflective of our ~~critical accounting policies~~core operating performance and ~~estimates.~~provides an additional measure to compare our performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss). To arrive at Core FFO, we adjust FFO attributable to stockholders and convertible noncontrolling interests to exclude certain recurring and non-recurring items including, but not limited to, depreciation and amortization of corporate assets, changes in the fair value of the earn-out liability, amortization of unconsolidated joint venture basis differences, gains or losses on the extinguishment or modification of debt, other impairment charges, and transaction and acquisition expenses.

FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions. Core FFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate our business plan in the manner currently contemplated.

Accordingly, FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. Our ~~accounting policies~~FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.

The following table presents our calculation of FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO and provides additional information related to our operations for the years ended December 31, 2020, 2019, and 2018 (in thousands, except per share amounts):


	2020		2019		2018
Calculation of FFO Attributable to Stockholders and Convertible Noncontrolling Interests
Net income (loss)	$	5,462	$	(72,826)	$	46,975
Adjustments:
Depreciation and amortization of real estate assets	218,738		231,023		177,504
Impairment of real estate assets	2,423		87,393		40,782
Gain on the disposal of property, net	(6,494)		(28,170)		(109,300)
Adjustments related to unconsolidated joint ventures	1,552		(128)		560
FFO attributable to the Company	221,681		217,292		156,521
Adjustments attributable to noncontrolling interests not convertible into common stock	—		(282)		(299)
FFO attributable to stockholders and convertible noncontrolling interests	$	221,681	$	217,010	$	156,222
Calculation of Core FFO
FFO attributable to stockholders and convertible noncontrolling interests	$	221,681	$	217,010	$	156,222
Adjustments:
Depreciation and amortization of corporate assets	5,941		5,847		13,779
Change in fair value of earn-out liability and derivatives	(10,000)		(7,500)		2,393
Other impairment charges	359		9,661		—
Amortization of unconsolidated joint venture basis differences	1,883		2,854		167
Loss (gain) on extinguishment or modification of debt, net	4		2,238		(93)
Transaction and acquisition expenses	539		598		3,426
Other	—		158		232
Core FFO	$	220,407	$	230,866	$	176,126

FFO Attributable to Stockholders and Convertible Noncontrolling Interests/Core FFO per share
Weighted-average common shares outstanding - diluted(1)	333,466		327,510		241,367
FFO attributable to stockholders and convertible noncontrolling interests per share - diluted	$	0.66	$	0.66	$	0.65
Core FFO per share - diluted	$	0.66	$	0.70	$	0.73

(1)Restricted stock awards were dilutive to FFO Attributable to Stockholders and Convertible Noncontrolling Interests per share and Core FFO per share for the years ended December 31, 2020, 2019, and 2018, and, accordingly, their impact was included in the weighted-average common shares used in their respective per share calculations. For the year ended December 31, 2019, restricted stock units had an anti-dilutive effect upon the calculation of earnings per share and thus were excluded. For details related to the calculation of earnings per share, see Note 15.

Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre—Nareit defines EBITDAre as net income (loss) computed in accordance with GAAP before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains or losses from disposition of depreciable property, and (v) impairment write-downs of depreciable property. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDAre on the same basis.

Adjusted EBITDAre is an additional performance measure used by us as EBITDAre includes certain non-comparable items that affect our performance over time. To arrive at Adjusted EBITDAre, we exclude certain recurring and non-recurring items from EBITDAre, including, but not limited to: (i) changes in the fair value of the earn-out liability; (ii) other impairment charges; (iii) amortization of basis differences in our investments in our unconsolidated joint ventures; and (iv) transaction and acquisition expenses.

We have included the calculation of EBITDAre to better align with publicly traded REITs. We use EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow us to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value. Additionally, we believe they are a useful indicator of our ability to support our debt obligations. EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (loss), as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions. Accordingly, EBITDAre and Adjusted EBITDAre should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net

income (loss) or cash flows from operations prepared in accordance with GAAP. Our EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to amounts calculated by other REITs.

The following table presents our calculation of EBITDAre and Adjusted EBITDAre for the years ended December 31, 2020, 2019, and 2018 (in thousands):


	2020		2019		2018
Calculation of EBITDAre
Net income (loss)	$	5,462	$	(72,826)	$	46,975
Adjustments:
Depreciation and amortization	224,679		236,870		191,283
Interest expense, net	85,303		103,174		72,642
Gain on disposal of property, net	(6,494)		(28,170)		(109,300)
Impairment of real estate assets	2,423		87,393		40,782
Federal, state, and local tax expense	491		785		232
Adjustments related to unconsolidated joint ventures	3,355		2,571		446
EBITDAre	$	315,219	$	329,797	$	243,060
Calculation of Adjusted EBITDAre
EBITDAre	$	315,219	$	329,797	$	243,060
Adjustments:
Change in fair value of earn-out liability and derivatives	(10,000)		(7,500)		2,393
Other impairment charges	359		9,661		—
Amortization of unconsolidated joint venture basis differences	1,883		2,854		167
Transaction and acquisition expenses	539		598		3,426
Adjusted EBITDAre	$	308,000	$	335,410	$	249,046

Liquidity and Capital Resources

General—Aside from standard operating expenses, we expect our principal cash demands to be for:

•cash distributions to stockholders;

•investments in real estate;

•capital expenditures and leasing costs;

•redevelopment and repositioning projects;

•repurchases of common stock; and

•principal and interest payments on our outstanding indebtedness.

We expect our primary sources of liquidity to be:

•operating cash flows;

•proceeds received from the disposition of properties;

•reinvested distributions;

•proceeds from debt financings, including borrowings under our unsecured revolving credit facility;

•distributions received from joint ventures; and

•available, unrestricted cash and cash equivalents.

Our cash from operations has been reduced, and we anticipate that it may continue to be negatively impacted, at least in the near term, as a result of the COVID-19 pandemic as we temporarily experience reduced or delayed cash payments and/or revenue from Neighbors. Additionally, our cash from financing activities has been impacted by actions taken to preserve liquidity, such as the suspension of our distributions and the DRIP beginning in April 2020 and continuing through November 2020, and the suspension of the SRP for DDI beginning in March 2020 and continuing through December 2020. The cash on hand resulting from these actions allowed us to execute the Tender Offer as well as reinstate distributions, including the DRIP, beginning in December 2020. Further, the SRP for DDI was reinstated effective January 2021.

We are monitoring events closely and managing our cash usage, which also includes prioritizing our capital spending and redevelopment to support the reopening of our Neighbors and new leasing activity, or deferring if possible, as well as reducing other property and corporate expenses. At this time, we believe our current sources of liquidity, most significantly our operating cash flows and borrowing availability on our revolving credit facility, are sufficient to meet our short- and long-term cash demands.

Debt—The following table summarizes information about our debt as of December 31, 2020 and 2019 (dollars in thousands):


	2020			2019
Total debt obligations, gross	$	2,307,686		$	2,372,521
Weighted-average interest rate	3.1		%	3.4		%
Weighted-average term (in years)	4.1			5.0

Revolving credit facility capacity	$	500,000		$	500,000
Revolving credit facility availability(1)	490,404			489,805
Revolving credit facility maturity(2)	October 2021			October 2021

(1)Net of any outstanding balance and letters of credit.

(2)The revolving credit facility matures in October 2021 and includes an option to extend the maturity to October 2022, with its execution being subject to compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees. We intend to either exercise our option to extend the maturity or to negotiate under new terms.

During the years ended December 31, 2020 and 2019, we took steps to reduce our leverage, lower our cost of debt, and appropriately ladder our debt maturities. Our debt activity during the year ended December 31, 2020 was as follows:

•In January 2020, we paid down $30 million of term loan debt maturing in 2021 using proceeds from property dispositions in 2019. Following this repayment, our next term loan maturity is in April 2022 and includes an option to extend the maturity to October 2022, with its execution being subject to compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees. We intend to either exercise our option to extend the maturity or to negotiate under new terms.

•In April 2020, we borrowed $200 million on our revolving credit facility to meet our operating needs for a sustained period due to the COVID-19 pandemic.

•In June 2020, we fully repaid the outstanding balance on our revolving credit facility as our rent and recovery collections during the second quarter, combined with our COVID-19 expense reduction initiatives, sufficiently funded our operating needs and provided enough stability to allow for this repayment. Further, we did not borrow on our revolving credit facility during the remainder of 2020.

•In the fourth quarter, we executed early repayments of $24.5 million in mortgage debt.

Our debt activity during the year ended December 31, 2019, which we expect will save approximately $1.9 million in interest annually, was as follows:

•In September 2019, we repriced a $200 million term loan, lowering the interest rate spread from 1.75% over LIBOR to 1.25% over LIBOR, while maintaining the current maturity of September 2024.

•In October 2019, we repriced a $175 million term loan from a spread of 1.75% over LIBOR to 1.25% over LIBOR, while maintaining the current maturity of October 2024.

•In December 2019, we executed a $200 million fixed-rate secured loan maturing in January 2030. The proceeds from this loan, along with proceeds from property dispositions, were used to pay down $265.9 million of term loan debt maturing in 2020 and 2021.

Our debt is subject to certain covenants, and as of December 31, 2020, we were in compliance with the restrictive covenants of our outstanding debt obligations. We expect to continue to meet the requirements of our debt covenants over the next twelve months.

Financial Leverage Ratios—We believe our debt to Adjusted EBITDAre, debt to total enterprise value, and debt covenant compliance as of December 31, 2020 allow us access to future borrowings as needed in the near term. The following table presents our calculation of net debt and total enterprise value, inclusive of our prorated portion of net debt and cash and cash equivalents owned through our joint ventures, as of December 31, 2020 and 2019 (dollars in thousands):


	2020		2019
Net debt:
Total debt, excluding market adjustments and deferred financing expenses	$	2,345,620	$	2,421,520
Less: Cash and cash equivalents	104,952		18,376
Total net debt	$	2,240,668	$	2,403,144

Enterprise value:
Total Net debt	$	2,240,668	$	2,403,144
Total equity value(1)	2,797,234		3,682,161
Total enterprise value	$	5,037,902	$	6,085,305

(1)Total equity value is calculated as the number of common shares and OP units outstanding multiplied by the EVPS at the end of the period. There were 319.7 million diluted shares outstanding with an EVPS of $8.75 as of December 31, 2020 and 331.7 million diluted shares outstanding with an EVPS of $11.10 as of December 31, 2019.

The following table presents our calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of December 31, 2020 and 2019 (dollars in thousands):


	December 31, 2020		December 31, 2019
Net debt to Adjusted EBITDAre - annualized:
Net debt	$	2,240,668	$	2,403,144
Adjusted EBITDAre - annualized(1)	308,000		335,410
Net debt to Adjusted EBITDAre - annualized	7.3x		7.2x

Net debt to total enterprise value
Net debt	$	2,240,668	$	2,403,144
Total enterprise value	5,037,902		6,085,305
Net debt to total enterprise value	44.5%		39.5%

(1)Adjusted EBITDAre is based on a trailing twelve months. See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - EBITDAre and Adjusted EBITDAre” of this filing on Form 10-Kfor a reconciliation to Net Income (Loss).

Capital Expenditures and Redevelopment Activity—We make capital expenditures during the course of normal operations, including maintenance capital expenditures and tenant improvements as well as value-enhancing anchor space repositioning and redevelopment, ground-up outparcel development, and other accretive projects. In response to the COVID-19 pandemic, our capital investments have been ~~established~~prioritized to ~~conform~~support the reopening of our Neighbors and new leasing activity, or deferred if possible.

During the years ended December 31, 2020 and 2019, we had capital expenditures of $64.0 million and $75.5 million, respectively. We expect our capital expenditures to reach $85 million - $95 million in 2021, which includes $54.5 million related to development and redevelopment projects. As of December 31, 2020, our redevelopment projects in process include a demolition and rebuild of a Publix anchor at one of our centers for a total investment of approximately $7.6 million, with ~~GAAP.~~the remaining spend of $6.1 million expected to be completed in 2021. We ~~consider these policies critical because they involve significant management judgments~~expect our development and ~~assumptions, require estimates about matters~~redevelopment projects to stabilize within 24 months. We anticipate that ~~are inherently uncertain,~~obligations related to capital improvements as well as redevelopment and ~~are important~~development in 2020 can be met with cash flows from operations, cash flows from dispositions, or borrowings on our

unsecured revolving line of credit. Below is a summary of our capital spending activity for ~~understanding~~the years ended December 31, 2020 and ~~evaluating our reported financial results. These judgments affect~~2019 (in thousands):


	2020		2019
Capital expenditures for real estate:
Maintenance capital and tenant improvements	$	27,747	$	33,842
Redevelopment and development	30,521		37,488
Total capital expenditures for real estate	58,268		71,330
Corporate asset capital expenditures	3,972		1,988
Capitalized indirect costs(1)	1,725		2,174
Total capital spending activity	$	63,965	$	75,492

(1)Amount includes internal salaries and related benefits of personnel who work directly on capital projects as well as capitalized interest expense.

We target an average incremental yield of 8% to 11% for development and redevelopment projects. Incremental yield reflects the ~~reported amounts of assets~~ incremental NOI generated by each project upon expected stabilizationand ~~liabilities~~is calculated as incremental NOI divided by net project investment. Incremental NOI is the difference between the NOI expected to be generated by the stabilized project and ~~our disclosure of contingent assets and liabilities at~~ the ~~dates~~forecasted NOI without the planned improvements. Incremental yield does not include peripheral impacts, such as lease rollover risk or the impact on the long term value of the ~~consolidated financial statements,~~property upon sale or disposition.

Merger and Acquisition Activity—We continually monitor the commercial real estate market for properties that have future growth potential, are located in attractive demographic markets, and support our business objectives. Due to the COVID-19 pandemic, as well as the ~~reported amounts of revenue~~resulting market conditions, our acquisition activity was lower than anticipated during 2020, and ~~expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. Additionally, other companies~~we anticipate that acquisition activity may ~~utilize different estimates that may impact the comparability~~remain low throughout 2021. Below is a summary of our ~~results~~merger and acquisition activity for the years ended December 31, 2020 and 2019 (dollars and square feet in thousands):


	2020		2019
	Third-Party Acquisitions		REIT III Merger(1)		Third-Party Acquisitions
Number of properties purchased	2		3		2
Number of outparcels purchased(2)	2		—		2
Total square footage acquired	216		251		213
Total price of acquisitions	$	41,482	$	16,996	$	71,722

(1)Number of ~~operations~~properties and outparcels excludes those owned through our investment in GRP II, which we acquired through the merger with REIT III in 2019. GRP II was subsequently acquired by GRP I in October 2020.

(2)Outparcels purchased in 2020 and 2019 are parcels of land adjacent to ~~those~~shopping centers that we own.

Disposition Activity—We are actively evaluating our portfolio of ~~companies in similar businesses.~~

~~Real Estate Acquisition Accounting—In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition~~assets for opportunities to make strategic dispositions of ~~a Business. This update amended existing guidance~~assets that no longer meet our growth and investment objectives or assets that have stabilized in order to ~~clarify when an integrated set~~capture their value. Seeding joint venture portfolios is another desirable growth strategy as we retain ownership interests in the seeded properties while simultaneously increasing our high-margin fee revenue earned through the provision of ~~assets~~management services to those properties. We expect to continue to make strategic dispositions during 2021. The following table highlights our property dispositions during the years ended December 31, 2020 and ~~activities is considered a business.~~ 2019 (dollars and square feet in thousands):


	2020		2019
Number of properties sold(1)	7		21
Number of outparcels sold	1		1
Total square footage sold	678		2,564
Proceeds from sale of real estate	$	57,902	$	223,083
Gain on sale of properties, net(2)	10,117		30,039

(1)We ~~adopted ASU 2017-01 on January 1, 2017, and applied it prospectively. Under this new guidance, most~~retained certain outparcels of land associated with one of our ~~real estate acquisition activity is no longer considered a business combination~~property dispositions during the year ended December 31, 2020, and ~~instead is classified~~ as ~~an asset acquisition. As~~ a result, ~~most acquisition-related costs that would have been~~this property is still included in our total property count.

(2)The gain on sale of property, net does not include miscellaneous write-off activity, which is also recorded in Gain on ~~our~~Sale or Contribution of Property, Net on the consolidated statements of operations ~~prior~~and comprehensive income (loss).

Distributions—Distributions to ~~adoption have been capitalized~~our common stockholders and ~~will be amortized over~~OP unit holders, including key financial metrics for comparison purposes, for the ~~life~~years ended December 31, 2020 and 2019, are as follows (in thousands):

Cash distributions to OP unit holders

Net cash provided by operating activities

Cash distributions to common stockholders

Core FFO(1)

Distributions reinvested through the DRIP


(1)See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Funds from Operations and Core Funds from Operations” of this filing on Form 10-K for the definition of Core FFO, or information regarding why we present Core FFO, and for a reconciliation of this non-GAAP financial measure to Net Income (Loss).

On March 27, 2020, as a result of the ~~PELP transaction is considered a business combination, and~~

~~therefore~~uncertainty surrounding the ~~associated transaction expenses were expensed as incurred.~~COVID-19 pandemic, our Board suspended stockholder distributions, effective after the payment of the March 2020 distribution on April 1, 2020. The ~~treatment of acquisition-related costs~~DRIP was also suspended, and the ~~recognition~~March 2020 distribution was paid in all cash on April 1, 2020. The suspension of ~~goodwill are~~stockholder distributions and the ~~primary differences between how~~DRIP did not impact our qualification as a REIT.

On November 4, 2020, our Board reinstated monthly stockholder distributions beginning December 2020 equal to $0.02833333 per share, or $0.34 annualized. Additionally, the DRIP was reinstated with this distribution. OP unit holders received distributions at the same rate as common stockholders. The distribution and DRIP for December 2020 became effective for stockholders of record at the close of business on December 31, 2020, and this distribution was paid on January 12, 2021. Distributions were paid for January and February 2021. Additionally, our Board has approved distributions of $0.02833333 per share for March 2021.

Our Board intends to evaluate distributions on a monthly basis throughout 2021.

To maintain our qualification as a REIT, we ~~account~~must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain, and which does not equal net income (loss) as calculated in accordance with GAAP). We generally will not be subject to U.S. federal income tax on the income that we distribute to our stockholders each year due to meeting the REIT qualification requirements. However, we may be subject to certain state and local taxes on any income, property, or net worth and to federal income and excise taxes on our undistributed income.

We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders.

Cash Flow Activities—As of December 31, 2020, we had cash and cash equivalents and restricted cash of $131.9 million, a net cash increase of $36.8 million during the year ended December 31, 2020.

Below is a summary of our cash flow activity for ~~business combinations~~the years ended December 31, 2020 and ~~asset acquisitions. Regardless~~2019 (dollars in thousands):


	2020		2019		$ Change		% Change
Net cash provided by operating activities	$	210,576	$	226,875	$	(16,299)	(7.2)	%
Net cash (used in) provided by investing activities	(44,092)		64,183		(108,275)		NM
Net cash used in financing activities	(129,655)		(280,254)		150,599		53.7	%

Operating Activities—Our net cash provided by operating activities was primarily impacted by the following:

•Property operations and working capital—Most of ~~whether an acquisition~~our operating cash comes from rental and tenant recovery income and is ~~considered~~offset by property operating expenses, real estate taxes, and general and administrative costs. Our change in cash flows from property operations is primarily due to reduced revenue and collections as a ~~business combination or an asset acquisition, we record the costs~~result of the ~~business or assets acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date.~~

~~We assess the acquisition-date fair values of all tangible assets, identifiable intangibles, and assumed liabilities using methods similar to those used~~COVID-19 pandemic, partially mitigated by independent appraisers (e.g., discounted cash flow analysis and replacement cost) and that utilize appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value ofexpense reduction measures at the property ~~as if it were vacant.~~and corporate levels.

•Fee and management income—We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a new development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize interest expense until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.

We record above-market and below-market lease values for acquired properties based on the present value (using an discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paidalso generate operating cash from our third-party investment management business, pursuant to various management and advisory agreements between us and the ~~in-place leases~~Managed Funds. Our fee and ~~(ii) management’s estimate of market lease rates~~management income was $9.8 million for the ~~corresponding in-place leases, measured over~~year ended December 31, 2020, a ~~period equal to the remaining non-cancelable term~~decrease of the lease. We amortize any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease. We also include fixed-rate renewal options in our calculation of the fair value of below-market leases and the periods over which such leases are amortized. If a tenant has a unilateral option to renew a below-market lease, we include such an option in the calculation of the fair value of such lease and the period over which the lease is amortized if we determine that the tenant has a financial incentive and wherewithal to exercise such option.

~~Intangible assets also include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized,~~$1.9 million as compared to the same period in 2019, primarily due to fee and management income no longer received from REIT III following its acquisition by us in October 2019; a decrease in fees received from NRP largely due to property dispositions; and lower rent and recovery collections for our unconsolidated joint ventures, which resulted in lower management fees paid to us, as a result of the COVID-19 pandemic. This offsets improvements in fees received from GRP I and GRP II (prior its acquisition by GRP I).

Investing Activities—Our net cash ~~flows that would~~(used in) provided by investing activities was primarily impacted by the following:

Financing Activities—Our net cash used in financing activities was primarily impacted by the following:

•Debt borrowings and payments—Cash from financing activities is primarily affected by inflows from borrowings and outflows from payments on debt. During the year ended December 31, 2020, we had $64.8 million in net repayment of debt primarily as a result of early repayments of debt utilizing cash from the disposition of properties and cash on hand. During the year ended December 31, 2019, we had $89.1 million in net repayment of debt, primarily using cash received from the disposition of properties.

Off-Balance Sheet Arrangements

guarantor of a $175 million mortgage loan secured by GRP I properties. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor. We entered into a separate agreement with Northwestern Mutual in which we agreed to apportion any potential liability under this guaranty between us and them based on our ownership percentage.

Contractual Commitments and Contingencies

We have ~~occurred had~~debt obligations related to both our secured and unsecured debt. In addition, we have operating leases pertaining to office equipment for our business as well as ground leases at certain of our shopping centers. The table below excludes obligations related to tenant allowances and improvements because such amounts are not fixed or determinable. However, we believe we currently have sufficient financing in place to fund any such amounts as they arise through cash from operations or borrowings. The following table details our contractual obligations as of December 31, 2020 (in thousands):


	Payments Due by Period
	Total		2021		2022		2023		2024		2025		Thereafter
Debt obligations - principal payments(1)	$	2,307,522	$	62,589	$	436,898	$	379,569	$	503,162	$	500,381	$	424,923
Debt obligations - interest payments(2)	285,788		68,710		58,768		50,785		38,767		25,457		43,301
Operating lease obligations	8,896		831		805		654		528		297		5,781
Finance lease obligations	171		102		29		24		16		—		—
Total	$	2,602,377	$	132,232	$	496,500	$	431,032	$	542,473	$	526,135	$	474,005

(1)The revolving credit facility matures in October 2021 and includes an option to extend the ~~property been vacant at the time of acquisition and~~maturity to October 2022, with its execution being subject to ~~lease-up. Acquired in-place lease~~compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees. We intend to either exercise our option to extend the maturity or to negotiate under new terms. As of December 31, 2020, we have no outstanding balance on our revolving credit facility.

(2)Future variable-rate interest payments are based on interest rates as of December 31, 2020, including the impact of our swap agreements.

Our portfolio debt instruments and the unsecured revolving credit facility contain certain covenants and restrictions. The following is a list of certain restrictive covenants specific to the unsecured revolving credit facility and unsecured term loans that were deemed significant:

•limits the ratio of total debt to total asset value, ~~is amortized~~as defined, to ~~depreciation~~60% or less with a surge to 65% following a material acquisition;

•limits the ratio of secured debt to total asset value, as defined, to 40% or less with a surge to 45% following a material acquisition;

•requires the fixed-charge ratio, as defined, to be 1.5:1 or greater, or 1.4:1 following a material acquisition;

•limits the ratio of cash dividend payments to FFO, as defined, to 95%;

•requires the current tangible net worth to exceed the minimum tangible net worth, as defined;

•limits the ratio of unsecured debt to unencumbered total asset value, as defined, to 60% or less with a surge to 65% following a material acquisition; and ~~amortization~~

•requires the unencumbered NOI to interest expense ~~over~~ratio, as defined, to 1.75:1 or greater, or 1.7:1 following a material acquisition.

Inflation

Inflation has been low historically and has had minimal impact on the ~~average remaining non-cancelable terms~~operating performance of our shopping centers; however, inflation can increase in the ~~respective in-place leases.~~

~~We estimate~~future. Certain of our leases contain provisions designed to mitigate the ~~value~~adverse effect of ~~tenant origination~~inflation, including rent escalations and ~~absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, management includes~~requirements for Neighbors to pay their allocable share of operating expenses, including common area maintenance, utilities, real estate taxes, insurance, and ~~other operating expenses, and estimates~~certain capital expenditures. Additionally, many of ~~lost rentals at~~our leases are for terms of less than ten years, which allows us to target increased rents to current market rates ~~during the expected lease-up periods.~~upon renewal.

Estimates of the fair values of the tangible assets, identifiable intangibles, and assumed liabilities require us to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate estimates would result in an incorrect valuation of our acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of our net income.

We calculate the fair value of assumed long-term debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.

~~Impairment of Real Estate, Goodwill, and Intangible Assets~~—We monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate or intangible assets may be impaired. When indicators of potential impairment suggest that the carrying value of real estate or intangible assets may be greater than fair value, we will assess the recoverability, considering recent operating results, expected net operating cash flow, and plans for future operations. If, based on this analysis of undiscounted cash flows, we do not believe that we will be able to recover the carrying value of the real estate and related intangible assets, we would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate or intangible assets as defined by ASC 360, ~~Property, Plant, and Equipment~~. Particular examples of events and changes in circumstances that could indicate potential impairments are significant decreases in occupancy, rental income, operating income, and market values, or changes in our property or asset management agreements.

~~We adopted ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~, prospectively on January 1, 2018. Therefore, when we perform a quantitative test of goodwill for impairment we will compare the carrying value of net assets to the fair value of the reporting unit. If the fair value of the reporting unit exceeds its carrying amount, we would not consider goodwill to be impaired and no further analysis would be required. If the fair value is determined to be less than its carrying value, the amount of goodwill impairment would be the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Estimates of fair value used in our evaluation of real estate, goodwill, and intangible assets are based upon discounted future cash flow projections, relevant competitor multiples, or other acceptable valuation techniques. These techniques are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

~~Revenue Recognition~~—We recognize minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the terms of the related leases, and we include amounts expected to be received in later years in deferred rents receivable. Our policy for percentage rental income is to defer recognition of contingent rental income until the specified target (i.e., breakpoint) that triggers the contingent rental income is achieved.

We record property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to differ materially from the estimated reimbursement.

We make estimates of the collectability of our tenant receivables related to base rents, expense reimbursements, and other revenue or income. We specifically analyze accounts receivable and historical bad debts, customer creditworthiness, current economic trends, and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, we will make estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. These estimates have a direct impact on our net income because a higher bad debt reserve results in less net income.

We record lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met, collectability is reasonably assured, and the tenant is no longer occupying the property. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets.

~~We recognize gains on sales of real estate pursuant to the provisions of ASC 605-976,~~ ~~Accounting for Sales of Real Estate~~. The specific timing of a sale will be measured against various criteria in ASC 605-976 related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, we will defer gain recognition and account for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment, or cost recovery methods, as appropriate, until the appropriate criteria are met.

Revenues from management, leasing, and other fees charged in accordance with the various management agreements executed, are recognized in the period in which the services have been provided, the earnings process is complete, and collectability is reasonably assured.

~~On January 1, 2018, we adopted ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental revenue. However, the standard will apply to a majority of our fees and management income. We have evaluated the impact of this standard to fees and management income and do not expect a material impact on our revenue recognition, but we do expect to provide additional disclosures around fees and management revenue in our future filings. We are adopting this guidance on a modified retrospective basis.

~~Impact of Recently Issued Accounting Pronouncements—Refer to Note 2 for discussion of the impact of recently issued accounting pronouncements.~~

Results of Operations

Known Trends and Uncertainties of the COVID-19 Pandemic

~~Included~~The COVID-19 pandemic has impacted our results beginning with the second quarter largely in the ~~PELP transaction was~~form of reduced revenue, where our estimates around collectibility have created volatility in our earnings. We anticipate these trends will continue into 2021, and the total impact on revenue in the future cannot be determined at this time. The duration of the pandemic and mitigating measures, and the resulting economic impact, has caused some of our Neighbors to permanently vacate their spaces and/or not renew their leases. Under such circumstances, we may have difficulty leasing these spaces on the same or better terms or at all, and/or incur additional costs to lease vacant spaces, which may reduce our occupancy rates in the future and ultimately reduce our revenue. Extended periods of vacancy or reduced revenues may trigger impairments of our real estate assets. Additionally, these factors may impact disposition activity by decreasing demand and negatively impacting capitalization rates. Our disposition and acquisition activity has been reduced as a result of ~~PELP’s third-party investment management business. Prior~~the pandemic during 2020.

The ongoing impact of the COVID-19 pandemic and the resulting economic downturn will likely continue to be significant to our results of operations into 2021 and potentially beyond as a result of a number of factors outside of our control. These factors include, but are not limited to: overall economic conditions on both a macro and micro level, including consumer demand as well as retailer demand for space within our shopping centers; the impact of social distancing guidelines, recommendations from governmental authorities, and consumer shopping preferences; the nature and effectiveness of any economic stimulus or relief measures; the timing of availability and distribution of vaccines to the ~~completion~~general public; and the impact of all of the ~~transaction, we were externally-managed,~~factors above, including other potentially unknown factors, on our Neighbors’ ability to continue paying rent and related charges on time or at all and Neighbors’ willingness to renew their leases on the same terms or at all. These factors have impacted our ~~only reportable segment was related~~results from operations, and may continue to do so into the future. The primary impact to our results has been reduced revenue from Neighbor concessions, increased collectibility reserves, and decreased recovery rates on expenses. Other unforeseen impacts may also arise in the course of operating during these circumstances. See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview” of this filing on Form 10-K for our observation of Neighbor impacts through March 8, 2021.

In December 2020, the United States Food and Drug Administration issued emergency use authorizations for two vaccines for the prevention of COVID-19. The timeline for distribution of the vaccines to the ~~aggregated~~public is determined at the state level, and consequently, the timeline for the removal of governmental mandates implemented to combat the spread of the virus may vary by state or locality. At this time, we are unable to ascertain the timing of any such events, and thus are unable to predict with certainty the impact that the vaccines and their effect in mitigating the spread of COVID-19 may have on our financial results.

Overall, we believe that our investment focus on grocery-anchored shopping centers that provide daily necessities has helped, and will continue to help, lessen the negative effect of the COVID-19 pandemic on our business compared to non-grocery anchored shopping centers. We are closely monitoring the occupancy, operating performance, and Neighbor sales results at our centers, including those Neighbors operating with reduced hours or under government-imposed restrictions. Further, we have taken action to maximize our financial flexibility by implementing expense reductions at the property and corporate level; prioritizing capital projects to support the reopening of our ~~owned real estate. Therefore, there is no data available prior to 2017~~Neighbors and new leasing activity, or deferring if possible; temporarily suspending monthly distributions; and temporarily suspending share repurchases for ~~the Investment Management segment for comparative purposes. For more detail regarding our segments, see Note 18.~~DDI.

Segment Profit, which is a non-GAAP financial measure, represents revenues less property operating, real estate tax, and general and administrative expenses that are attributable to our reportable segments. We use Segment Profit to evaluate the results of our segments and believe that this measure provides a useful comparison of our revenues based on the source of those revenues and the expenses that are directly related to them. However, Segment Profit should not be viewed as an alternative to results prepared in accordance with GAAP.

Summary of Operating Activities for the Years Ended December 31, ~~2017~~2020 and ~~2016~~2019


					Favorable (Unfavorable) Change
(dollars in thousands, except per share amounts)	2020		2019		$		%(1)
Revenues:
Rental income	$	485,483	$	522,270	$	(36,787)	(7.0)	%
Fee and management income	9,820		11,680		(1,860)		(15.9)	%
Other property income	2,714		2,756		(42)		(1.5)	%
Total revenues	498,017		536,706		(38,689)		(7.2)	%
Operating Expenses:
Property operating expenses	87,490		90,900		3,410		3.8	%
Real estate tax expenses	67,016		70,164		3,148		4.5	%
General and administrative expenses	41,383		48,525		7,142		14.7	%
Depreciation and amortization	224,679		236,870		12,191		5.1	%
Impairment of real estate assets	2,423		87,393		84,970		97.2	%
Total operating expenses	422,991		533,852		110,861		20.8	%
Other:
Interest expense, net	(85,303)		(103,174)		17,871		17.3	%
Gain on disposal of property, net	6,494		28,170		(21,676)		(76.9)	%
Other income (expense), net	9,245		(676)		9,921		NM
Net income (loss)	5,462		(72,826)		78,288		107.5	%
Net (income) loss attributable to noncontrolling interests	(690)		9,294		(9,984)		(107.4)	%
Net income (loss) attributable to stockholders	$	4,772	$	(63,532)	$	68,304	107.5	%

(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.

Rental Income decreased $36.8 million as follows:

•$20.7 million decrease related to our same-center portfolio primarily as follows:

▪$2.8 million decrease primarily due to non-cash straight-line rent amortization;

▪$7.1 million increase primarily due to a $0.23 increase in average minimum rent per square foot and a 0.8% improvement in average occupancy; and

•$16.1 million decrease related to our net disposition of 21 properties.

Favorable (Unfavorable) Change
(in thousands, except per share amounts) 2017 2016 $ %
Segment Profit:
Owned Real Estate $ 206,432
$ 175,802
$ 30,630
17.4 %
Investment Management 1,553
—
1,553
NM
Total segment profit 207,985

175,802
32,183
18.3 %
Corporate general and administrative expenses (30,070 ) (28,393 ) (1,677 ) (5.9 )%
Vesting of Class B units (24,037 ) —
(24,037 ) NM
Termination of affiliate arrangements (5,454 ) —
(5,454 ) NM
Depreciation and amortization (130,671 ) (106,095 ) (24,576 ) (23.2 )%
Interest expense, net (45,661 ) (32,458 ) (13,203 ) (40.7 )%
Transaction and acquisition expenses (16,243 ) (5,803 ) (10,440 ) (179.9 )%
Other income, net 2,433
5,990
(3,557 ) (59.4 )%
Net (loss) income (41,718 )
9,043
(50,761 ) NM
Net loss (income) attributable to noncontrolling interests 3,327
(111 ) 3,438
NM
Net (loss) income attributable to stockholders $ (38,391 ) $ 8,932
$ (47,323 ) NM
Fee and Management Income:

~~Owned~~ •The $1.9 milliondecrease in fee and management income is primarily due to fees no longer received from REIT III following its acquisition by us in October 2019; a decrease in fees received from NRP, primarily due to property dispositions; and lower rent and recovery collections for our unconsolidated joint ventures as a result of the COVID-19 pandemic, which resulted in lower management fees paid to us. This offsets improvements in fees received from GRP I and GRP II (prior its acquisition by GRP I).

Property Operating Expenses decreased $3.4 million as follows:

•$0.3 million decrease related to our same-center portfolio and corporate operating activities:

▪$1.4 million decrease primarily due to reduced performance compensation;

▪$2.3 million increase in insurance expenses owing to a higher volume of claims and higher market rates.

•$3.1 million decrease related to our net disposition of 21 properties.

Real Estate ~~- Segment Profit~~

Favorable (Unfavorable) Change
(in thousands, except per share amounts) 2017 2016 $ %
Total revenues $ 303,410
$ 257,730
$ 45,680
17.7 %
Property operating expenses (50,328 ) (41,890 ) (8,438 ) (20.1 )%
Real estate tax expenses (43,247 ) (36,627 ) (6,620 ) (18.1 )%
General and administrative expenses (3,403 ) (3,411 ) 8
0.2 %
Segment profit $ 206,432

$ 175,802
$ 30,630
17.4 %

~~Total revenues increased~~Taxes decreased $3.1 million as follows:


–	~~$21.1 million~~ ~~was related to the 76 properties acquired in the PELP transaction.~~


–	~~$21.4 million~~ ~~was related to 15 properties acquired after December 31, 2015, exclusive of the PELP transaction, net of two properties disposed of during each reporting period.~~


–	~~The remaining~~ ~~$3.2 million~~ ~~increase was related to the properties acquired before January 1, 2016, outside of the PELP transaction (“same-center portfolio”). The increase was driven by a~~ ~~$0.23~~ ~~increase in minimum rent per square foot and a~~ ~~0.9%~~ ~~increase in occupancy.~~

~~Property operating expenses, which include (i) operating and maintenance expense, which consists~~•$1.1 million decrease related to our same-center portfolio primarily as a result of property-related costs including repairs and maintenance costs, landscaping, snow removal, utilities, property insurance costs, security, and various other property-related expenses; (ii) bad debt expense; and (iii) allocated property management costs prior to the PELP transaction, increased as follows:


–	~~$4.5 million was the impact of the PELP transaction, including additional costs related to the 76 properties acquired and the effect of internalizing our management structure.~~


–	~~$3.7 million was related to properties acquired or disposed of after December 31, 2015, excluding properties acquired in the PELP transaction.~~


–	~~Property operating costs increased by $0.3 million on our same-center portfolio.~~

~~Real~~successful real estate tax ~~expenses increased as follows:~~appeals; and


–	~~$2.2 million was related to the 76 properties acquired in the PELP transaction.~~


–	~~$4.2 million was related to properties acquired or disposed of after December 31, 2015, excluding properties acquired in the PELP transaction.~~

•$2.0 million decrease related to our net disposition of 21 properties.

General and ~~administrative expenses were primarily attributed to costs to manage the administrative activities~~Administrative Expenses:

•The $7.1 million decrease in general and ~~implement the investment strategies of our Owned Real Estate.~~

~~Investment Management - Segment Profit~~

(in thousands, except per share amounts) 2017
Total revenues $ 8,133
Property operating expenses (3,496 )
Corporate real estate tax expenses (209 )
General and administrative expenses (2,875 )
Segment profit $ 1,553

~~Total revenues were primarily compromised of the following:~~


–	~~$4.0 million was attributed to advisory agreements, including acquisition, disposition, and asset management fees, between us and the Managed Funds.~~


–	~~$3.8 million was attributed to property management agreements, including property management fees, leasing commissions, and construction management fees, between us and the Managed Funds.~~


–	~~For additional detail regarding our fees and management income, see Note~~ 14.

~~The~~ ~~$3.5 million~~ ~~in property operating~~administrative expenses was primarily related to ~~employee compensation costs~~expense reductions taken to ~~manage~~reduce the ~~daily property operations~~impact of the ~~Managed Funds,~~COVID-19 pandemic, with the majority of these decreases related to compensation.

Depreciation and Amortization decreased $12.2 million as ~~well as insurance costs~~follows:

•$7.6 million decrease related to our ~~captive insurance company.~~

net disposition of 21 properties; and

General and administrative expenses were primarily attributed to employee compensation costs for managing the day-to-day affairs of the Managed Funds, identifying and making acquisitions and investments on their behalf, and recommending to the respective boards of directors an approach for providing investors of the Managed Funds with liquidity.

~~Corporate General and Administrative Expenses~~

~~The~~ •$~~1.7~~4.6 million ~~increase in corporate general and administrative expenses was~~ decrease related to ~~additional expenses that were not directly attributable to the revenues generated by either of~~ our ~~segments, including adding personnel costs~~same-center portfolio and ~~other~~ corporate ~~expenses in the PELP transaction, offset by the elimination of the asset management fee.~~

~~Vesting of Class B Units~~

~~The~~ ~~$24.0 million~~ expense resulted from the PELP transaction and was a combination of the vesting of 2.8 million Class B units as well as the reclassification of previous distributions on those Class B units to noncontrolling interests. The vesting of the Class B units was a noncash expense of $27.6 million for asset management services rendered between December 2014 and September 2017. Distributions paid on these units totaled $3.6 million over this time period and have been reclassified from the 2017 consolidated statement of operations and reflected as distributions from equity instead.

~~Termination of Affiliate Arrangements~~

~~The~~ ~~$5.5 million~~ expense was related to the redemption of unvested Class B units at the estimated value per share on the date of termination, that had been earned by our former advisor for historical asset management services (see Note 11).

~~Depreciation and Amortization~~

~~The~~ ~~$24.6 million~~ ~~increase in depreciation and amortization included a $16.1 million increase related to the 76 properties and the management contracts acquired in the PELP transaction.~~

The increase included a $12.1 million increase related to properties acquired after December 31, 2015, excluding properties acquired in the PELP transaction, as well as properties classified as redevelopment.

~~The increase was offset by a $1.7 million decrease~~operating activities, primarily due to ~~the disposition of two properties in December 2016 and October 2017.~~

~~The increase was also offset by a $1.8 million decrease attributed to certain~~ intangible ~~lease~~ assets becoming fully amortized onby December 31, 2019.

Impairment of Real Estate Assets:

•Our decrease in impairment of real estate assets of $85.0 million was due to a lower volume of assets under contract or actively marketed for sale at a disposition price that was less than the carrying value in 2020 as compared to 2019, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes. We continue to sell non-core assets and may potentially recognize impairments in future quarters, but our ~~same-center portfolio.~~anticipated disposition activity was reduced due to market conditions as a result of the COVID-19 pandemic.

Interest Expense, ~~Net~~Net:

•The ~~$13.2~~$17.9 million ~~increase~~ decrease during the year ended December 31, 2020 as compared to the same period in 2019 was largely due to the decrease in LIBOR and expiring interest ~~expense~~rate swaps in 2020 as well as repricing activities that occurred in 2019. Interest Expense, Net was comprised of the following (dollars in thousands):


	Year Ended December 31,
	2020			2019
Interest on revolving credit facility, net	$	1,668		$	1,827
Interest on term loans, net	46,798			62,745
Interest on secured debt	29,001			23,048
Loss on extinguishment or modification of debt, net	4			2,238
Non-cash amortization and other	7,832			13,316
Interest expense, net	$	85,303		$	103,174

Weighted-average interest rate as of end of year	3.1		%	3.4		%
Weighted-average term (in years) as of end of year	4.1			5.0

Gain on Disposal of Property, Net:

•The $21.7 million decrease was primarily due to additional borrowings on our revolving credit facility and new secured and unsecured term loan facilities entered into in 2017, including $485 million in loans that were entered into in order to extinguish the corporate debt assumed from PELP in the PELP transaction.

~~The increase was partially offset by a decrease in interest expense from refinancing certain mortgages and improving the associated interest rate.~~

~~Transaction and Acquisition Expenses~~

~~The transaction expenses incurred resulted from costs~~ related to the ~~PELP transaction~~sale of seven properties (plus other miscellaneous disposals and write-offs) with a net gain of $6.5 million during the year ended December 31, 2020, as compared to the sale of 21 properties with net gain of $28.2 million during the year ended December 31, 2019 (see Note 3), primarily third-party professional fees, such as financial advisor, consulting, accounting, legal, and tax fees, as well as fees associated with obtaining debt consents necessary to complete the transaction.

The transaction expenses incurred were partially offset by a decrease in acquisition expenses directly related to asset acquisitions that was attributed to the implementation of ASU 2017-01 on January 1, 2017, resulting in the capitalization of most acquisition-related costs. For a more detailed discussion of this adoption, see Note 25).

Other Income ~~Net~~(Expense), Net:

•The ~~$3.6~~$9.9 million ~~decrease in other income~~ change was ~~primarily~~largely due to ~~a 2016 gain on real estate sold exceeding 2017 gains on sales~~other impairment charges of ~~properties~~$9.7 million in connection with the REIT III public offering during the year ended December 31, 2019, which included $7.8 million of impairment charges related

to our corporate intangible asset and ~~land. It also decreased due to a 2016 gain~~$1.9 million of impairment charges related to ~~hedging ineffectiveness that is no longer realized due to our adoption~~organization and offering costs. Other Income (Expense), Net was comprised of ~~ASU 2017-12 (see Note~~ 8).

the following (dollars in thousands):


	Year Ended December 31,
	2020		2019
Change in fair value of earn-out liability	$	10,000	$	7,500
Equity in (loss) income of unconsolidated joint ventures	(31)		1,069
Transaction and acquisition expenses	(539)		(598)
Federal, state, and local income tax expense	(491)		(785)
Other impairment charges	(359)		(9,661)
Settlement of property acquisition-related liabilities	510		1,360
Other	155		439
Other income (expense), net	$	9,245	$	(676)

Summary of Operating Activities for the Years Ended December 31, ~~2016~~2019 and ~~2015~~

2018

Favorable (Unfavorable) Change
(in thousands, except per share amounts) 2016 2015 $ %
Operating Data:
Total revenues $ 257,730
$ 242,099
$ 15,631
6.5 %
Property operating expenses (41,890 ) (38,399 ) (3,491 ) (9.1 )%
Real estate tax expenses (36,627 ) (35,285 ) (1,342 ) (3.8 )%
General and administrative expenses (31,804 ) (15,829 ) (15,975 ) (100.9 )%
Acquisition expenses (5,803 ) (5,404 ) (399 ) (7.4 )%
Depreciation and amortization (106,095 ) (101,479 ) (4,616 ) (4.5 )%
Interest expense, net (32,458 ) (32,390 ) (68 ) (0.2 )%
Other income, net 5,990
248
5,742
NM
Net income 9,043

13,561

(4,518 )
(33.3 )%
Net income attributable to noncontrolling interests (111 ) (201 ) 90
44.8 %
Net income attributable to stockholders $ 8,932
$ 13,360
$ (4,428 ) (33.1 )%

Net income per share—basic and diluted $ 0.05
$ 0.07
$ (0.02 ) (28.6 )%

~~Below are explanations~~For a discussion of the ~~significant fluctuations~~year-to-year comparisons in ~~our~~the results of operations for the years ended December 31, ~~2016~~2019 and ~~2015.~~2018, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2019 Annual Report on Form 10-K, filed with the SEC on March 12, 2020.

~~Total~~

Non-GAAP Measures

Same-Center Net Operating Income—We present Same-Center NOI as a supplemental measure of our performance. We define NOI as total operating revenues,~~— Of~~ adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. For the ~~$15.6 million increase in total revenues, $5.6 million was from same-center properties, which were~~three months and years ended December 31, 2020 and 2019, Same-Center NOI represents the ~~132~~NOI for the 275 properties that were ~~owned~~wholly-owned and operational for the entire portion of both comparable reporting ~~periods, except for those~~periods. We believe Same-Center NOI provides useful information to our investors about our financial and operating performance because it provides a performance measure of the revenues and expenses directly involved in owning and operating real estate assets and provides a perspective not immediately apparent from net income (loss). Because Same-Center NOI excludes the change in NOI from properties ~~classified as redevelopment as~~acquired or disposed of after December 31, 2016. The remaining $10.0 million was attributable to non-same-center properties, including the 16 properties that were acquired since the beginning of 2015. The increase in same-center revenue was due to a $3.5 million increase in rental income and a $2.4 million increase in tenant recovery income. The increase in same-center rental income was driven by a $0.20 increase in minimum rent per square foot and a 0.2% increase in occupancy since December 31, 2015. The increase in same-center tenant recovery income stemmed from a 2.3% increase in our overall recovery rate.

~~Property operating expenses~~—Of the $3.5 million increase in property operating expenses, $1.8 million was due to the acquisition of 16 properties in 2015 and 2016. The remaining $1.7 million was primarily a result of an increase in recoverable property maintenance expenses due to an increase in additional maintenance projects during 2016, as well as a $0.7 million increase in property management fees due to higher cash receipts from the increase in revenues.

~~General and administrative expenses~~—General and administrative expenses increased $16.0 million, which was primarily related to a $14.6 million increase in cash asset management fees as a result of the change to our advisory fee structure in October 2015. Prior to that date, the asset management fee had been deferred via the issuance of Class B units of our Operating Partnership, which did not result in the recognition of expense in accordance with GAAP. After that date, the asset management fee remained at 1% of the cost of our assets; however, 80% was paid in cash and therefore recognized on a current basis as expense under GAAP, with the remaining 20% paid in Class B units. The remaining $1.4 million increase resulted from both a $1.0 million increase in distributions paid on unvested Class B units as a result of an increase in outstanding Class B units, as well as additional administrative costs associated with managing a larger portfolio.

~~Acquisition expenses—Acquisition expenses increased $0.4 million due to an increase in the purchase price paid for the seven properties acquired in 2016 compared to the nine properties acquired in 2015.~~

~~Other income, net~~—The $5.7 million increase in other income primarily resulted from a gain of $4.7 million on the disposal of a property in December 2016, as well as an increase of $1.3 million stemming from gains recognized on a portion of our derivatives.

~~Leasing Activity~~—The average rent per square foot and cost of executing leases fluctuates based on the tenant mix, size of the space, and lease term. Leases with national and regional tenants generally require a higher cost per square foot than those with local tenants. However, such tenants will also pay for a longer term. As we continue to attract more of these national and regional tenants, our costs to lease may increase.

~~Below is a summary of leasing activity for the years ended December 31, 2017 and 2016:~~

Total Deals
Inline Deals⁽¹⁾
2017 2016 2017 2016
New leases:
Number of leases 185
163
179
156
Square footage (in thousands) 547
690
382
379
First-year base rental revenue (in thousands) $ 8,108
$ 8,469
$ 6,762
$ 6,337
Average rent per square foot (“PSF”) $ 14.81
$ 12.27
$ 17.69
$ 16.70
Average cost PSF of executing new leases⁽²⁾⁽³⁾
$ 27.03
$ 22.53
$ 28.11
$ 33.09
Weighted average lease term (in years) 7.9
9.8
7.0
7.3
Renewals and options:
Number of leases 369
321
334
301
Square footage (in thousands) 1,977
1,639
676
593
First-year base rental revenue (in thousands) $ 25,196
$ 19,581
$ 14,664
$ 12,686
Average rent PSF $ 12.75
$ 11.95
$ 21.68
$ 21.39
Average rent PSF prior to renewals $ 11.74
$ 10.87
$ 19.42
$ 18.94
Percentage increase in average rent PSF 8.5 % 9.9 % 11.6 % 12.9 %
Average cost PSF of executing renewals and options⁽²⁾⁽³⁾
$ 3.12
$ 2.67
$ 4.80
$ 4.70
Weighted average lease term (in years) 5.2
5.3
5.1
5.2
Portfolio retention rate⁽⁴⁾
93.8 % 86.7 % 85.9 % 78.7 %


⁽¹⁾	~~We consider an inline deal to be a lease for less than 10,000 square feet of gross leasable area (“GLA”).~~


⁽²⁾	~~The cost of executing new leases, renewals, and options includes leasing commissions, tenant improvement costs, and tenant concessions.~~


⁽³⁾	~~The costs associated with landlord improvements are excluded for repositioning and redevelopment projects.~~


⁽⁴⁾	~~The portfolio retention rate is calculated by dividing (a) total square feet of retained tenants with current period lease expirations by (b) the square feet of leases expiring during the period.~~

~~Non-GAAP Measures~~

~~Pro Forma Same-Center Net Operating Income~~—Same-Center NOI represents the NOI for the properties that were owned and operational for the entire portion of both comparable reporting periods, except for the properties we currently classify as redevelopment. Redevelopment properties are being repositioned in the market and such repositioning is expected to have a significant impact on property operating income. As such, these properties have been classified as redevelopment and have been excluded from our same-center pool. For purposes of evaluating Same-Center NOI on a comparative basis, and in light of the PELP transaction, we are presenting Pro Forma Same-Center NOI, which is Same-Center NOI on a pro forma basis as if the transaction had occurred on January 1, 2016. This perspective allows us to evaluate Same-Center NOI growth over a comparable period. Pro Forma Same-Center NOI is not necessarily indicative of what actual Same-Center NOI and growth would have been if the PELP transaction had occurred on January 1, 2016, nor does2018, it ~~purport to represent Same-Center NOI and growth for future periods.~~

~~Pro Forma Same-Center NOI~~ highlights operating trends such as occupancy ~~rates,~~levels, rental rates, and operating costs on properties that were operational for both comparable periods. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our ~~Pro Forma~~ Same-Center NOI may not be comparable to other REITs.

~~Pro Forma~~ Same-Center NOI should not be viewed as an alternative measure of our financial performance ~~since~~as it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, ~~acquisition expenses,~~ depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties that could materially impact our results from operations.

The table below compares ~~Pro Forma~~ Same-Center NOI for the years ended December 31, ~~2017~~2020 and ~~2016 (in~~2019 (dollars in thousands):


					Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Revenues:
Rental income(1)	$	364,998	$	360,548	$	4,450
Tenant recovery income	122,835		120,870		1,965
Reserves for uncollectibility(2)	(26,458)		(5,179)		(21,279)
Other property income	2,609		2,552		57
Total revenues	463,984		478,791		(14,807)		(3.1)	%
Operating expenses:
Property operating expenses	70,270		70,208		(62)
Real estate taxes	65,727		66,461		734
Total operating expenses	135,997		136,669		672		0.5	%
Total Same-Center NOI	$	327,987	$	342,122	$	(14,135)	(4.1)	%

(1)Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.

(2)Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or is considered creditworthy.

2017 2016 $ Change % Change
Revenues⁽¹⁾:

Rental income⁽²⁾
$ 220,081
$ 215,398
$ 4,683

Tenant recovery income 69,965
69,066
899

Other property income 1,565
1,048
517

Total revenues 291,611
285,512

6,099

2.1 %
Operating expenses⁽¹⁾:

Property operating expenses 46,504
47,987
(1,483 )

Real estate taxes 40,275
39,569
706

Total operating expenses 86,779

87,556

(777 )
(0.9 )%
Total Pro Forma Same-Center NOI $ 204,832

$ 197,956

$ 6,876

3.5 %


⁽¹⁾	Adjusted for PELP same-center operating results prior to the transaction for these periods. For additional information and details about PELP operating results included herein, refer to the PELP Same-Center NOI table below.


⁽²⁾	~~Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.~~

Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net ~~(Loss)~~ Income ~~to Owned Real Estate NOI and Pro Forma Same-Center NOI~~(Loss) for the years ended December 31, ~~2017~~2020 and ~~2016~~2019 (in thousands):

2017 2016
Net (loss) income $ (41,718 ) $ 9,043
Adjusted to exclude:
Fees and management income (8,156 ) —
Straight-line rental income (3,766 ) (3,512 )
Net amortization of above- and below-market leases (1,984 ) (1,208 )
Lease buyout income (1,321 ) (583 )
General and administrative expenses 36,348
31,804
Transaction expenses 15,713
—
Vesting of Class B units 24,037
—
Termination of affiliate arrangements 5,454
—
Acquisition expenses 530
5,803
Depreciation and amortization 130,671
106,095
Interest expense, net 45,661
32,458
Other (2,336 ) (5,990 )
Property management allocations to third-party assets under management⁽¹⁾
5,386
—
Owned Real Estate NOI⁽²⁾
204,519

173,910
Less: NOI from centers excluded from same-center (34,443 ) (20,015 )
NOI prior to October 4, 2017, from same-center properties acquired in the
PELP transaction
34,756
44,061
Total Pro Forma Same-Center NOI $ 204,832

$ 197,956


⁽¹⁾	This represents property management expenses allocated to third-party owned properties based on the property management fee that is provided for in the individual management agreements under which our investment management business provides services.


⁽²⁾	Segment Profit, presented in Results of Operations, differs from NOI primarily because of revenue exclusions made, including straight-line rental income, net amortization of above- and below market leases, and lease buyout income, when calculating NOI.

~~Below is a breakdown of our property count:~~


	2020		2019
Net income (loss)	$	5,462	$	(72,826)
Adjusted to exclude:
Fees and management income	(9,820)		(11,680)
Straight-line rental income(1)	(3,356)		(9,079)
Net amortization of above- and below- market leases	(3,173)		(4,185)
Lease buyout income	(1,237)		(1,166)
General and administrative expenses	41,383		48,525
Depreciation and amortization	224,679		236,870
Impairment of real estate assets	2,423		87,393
Interest expense, net	85,303		103,174
Gain on disposal of property, net	(6,494)		(28,170)
Other (income) expense, net	(9,245)		676
Property operating expenses related to fees and management income	6,098		6,264
NOI for real estate investments	332,023		355,796
Less: Non-same-center NOI(2)	(4,036)		(13,674)
Total Same-Center NOI	$	327,987	$	342,122



	~~2017~~
~~Same-center properties~~⁽¹⁾	~~200~~
~~Non-same-center properties~~	19
~~Redevelopment properties~~⁽²⁾	17
~~Total properties~~	~~236~~


⁽¹⁾	~~Property count includes 64 same-center properties acquired in the PELP transaction.~~


⁽²⁾	~~Property count includes eight redevelopment properties acquired in the PELP transaction.~~

(1)Includes straight-line rent adjustments for Neighbors deemed to be non-creditworthy.

~~NOI~~(2)Includes operating revenues and expenses from ~~the PELP~~non-same-center properties which includes properties acquired prior to the PELP transaction was obtained from the accounting records of PELP without adjustment. The accounting records were subject to internal review by us. The table below provides Same-Center NOI detail for the non-ownership periods of PELP, which were the periods ended October 3, 2017,or sold and ~~the year ended December 31, 2016.~~corporate activities.



Maryland									27-1106076
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~ incorporation or ~~Organization)~~ organization)									(I.R.S. Employer Identification No.)

11501 Northlake Drive, Cincinnati, Ohio									45249
(Address of ~~Principal Executive Offices)~~principal executive offices)									(Zip Code)



			PART I
ITEM 1.			BUSINESS		35
ITEM 1.1A.			RISK FACTORS	~~BUSINESS~~7	3
ITEM ~~1A.~~ 1B.			~~RISK FACTORS~~	5
~~ITEM 1B.~~	UNRESOLVED STAFF COMMENTS	2122
ITEM 2.			PROPERTIES	~~PROPERTIES~~	22
ITEM 3.			LEGAL PROCEEDINGS	2527
ITEM 4.			MINE SAFETY DISCLOSURES	2527

			PART II		25
ITEM 5.			MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	2527
ITEM 6.			SELECTED FINANCIAL DATA	3132
ITEM 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3233
ITEM 7A.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4354
ITEM 8.			FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	4454
ITEM 9.			CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	4454
ITEM 9A.			CONTROLS AND PROCEDURES	4454
ITEM 9B.			OTHER INFORMATION	4455

			PART III		45
ITEM 10.			DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	4555
ITEM 11.			EXECUTIVE COMPENSATION	4755
ITEM 12.			SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	5760
ITEM 13.			CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	5778
ITEM 14.			PRINCIPAL ACCOUNTANT FEES AND SERVICES	5979

			PART IV		60
ITEM 15.			EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	6081
ITEM 16.			FORM 10-K SUMMARY	6283

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS				F-~~F-1~~1


	December 31, 2020		December 31, 2019
Number of properties	283		287
Number of states	31		31
Total square feet (in thousands)	31,709		32,130
Leased % of rentable square feet:
Total portfolio spaces	94.7	%	95.4	%
Anchor spaces	97.6	%	98.0	%
Inline spaces	88.9	%	90.2	%
Average remaining lease term (in years)(1)	4.5		4.7
% ABR from grocery-anchored properties	97.3	%	97.0	%



	Total Portfolio as of December 31, 2017		Property Acquisitions During the Year Ended December 31, 2017⁽¹⁾
Number of properties⁽²⁾	236		84
Number of states	32		25
Total square feet (in thousands)	26,272		9,595
Leased % of rentable square feet	93.9	%	89.6	%
Average remaining lease term (in years)⁽³⁾	5.0		4.6


	Originally Reported		Current(1)
Q2 2020(2)	86	%	93	%
Q3 2020(3)	94	%	95	%
Q4 2020	N/A		95	%



State	ABR⁽¹⁾		% ABR		ABR/Leased Square Foot		GLA⁽²⁾	% GLA		% Leased		Number of Properties
Florida	$	35,769	12.8	%	$	12.66	3,069	11.7	%	92.0	%	35
Georgia	24,369		8.7	%	11.19		2,266	8.6	%	96.1	%	24
Ohio	24,361		8.7	%	9.49		2,679	10.2	%	95.8	%	22
California	20,497		7.3	%	17.70		1,233	4.7	%	93.9	%	12
Texas	20,235		7.2	%	13.77		1,560	5.9	%	94.2	%	10
Illinois	14,833		5.3	%	12.15		1,334	5.1	%	91.5	%	9
Virginia	14,015		5.0	%	12.16		1,281	4.9	%	90.0	%	12
North Carolina	11,735		4.2	%	9.72		1,240	4.7	%	97.3	%	13
South Carolina	10,741		3.8	%	9.40		1,271	4.8	%	89.9	%	13
Pennsylvania	9,903		3.5	%	10.40		1,025	3.9	%	92.9	%	6
Massachusetts	9,651		3.5	%	12.87		767	2.9	%	97.8	%	6
Indiana	8,847		3.2	%	7.68		1,244	4.7	%	92.6	%	8
Tennessee	7,993		2.9	%	7.79		1,038	4.0	%	98.8	%	7
Arizona	7,594		2.7	%	11.13		797	3.0	%	85.6	%	7
Maryland	6,360		2.3	%	18.82		347	1.3	%	97.4	%	3
Colorado	6,266		2.2	%	12.87		504	1.9	%	96.6	%	5
Oregon	6,221		2.2	%	13.64		472	1.8	%	96.6	%	6
Minnesota	5,691		2.0	%	11.73		493	1.9	%	98.4	%	6
New Mexico	5,484		2.0	%	13.25		471	1.8	%	87.9	%	5
Michigan	5,252		1.9	%	7.87		701	2.7	%	95.1	%	4
Kentucky	4,868		1.8	%	8.57		598	2.3	%	95.0	%	4
Wisconsin	4,618		1.7	%	11.46		423	1.6	%	95.3	%	5
Iowa	2,888		1.0	%	8.32		360	1.4	%	96.4	%	3
Washington	2,419		0.9	%	14.93		171	0.6	%	94.7	%	2
Nevada	2,307		0.8	%	18.60		128	0.5	%	96.9	%	1
Connecticut	1,806		0.6	%	15.18		124	0.5	%	96.0	%	1
Kansas	1,392		0.5	%	10.01		153	0.6	%	90.8	%	2
Alabama	1,018		0.4	%	6.88		174	0.7	%	85.1	%	1
Missouri	861		0.3	%	7.69		112	0.4	%	100.0	%	1
New Jersey	838		0.3	%	8.06		111	0.4	%	93.7	%	1
Mississippi	628		0.2	%	5.66		112	0.4	%	99.1	%	1
Utah	237		0.1	%	16.93		14	0.1	%	100.0	%	1
Total	$	279,697	100.0	%	$	11.33	26,272	100.0	%	93.9	%	236



Tenant	ABR		% of ABR		Leased Square Feet	% of Leased Square Feet		Number of Locations⁽¹⁾
Kroger	$	25,820	9.2	%	3,138	12.7	%	55
Publix	17,016		6.1	%	1,672	6.8	%	36
Ahold Delhaize	10,233		3.7	%	854	3.5	%	19
Albertsons-Safeway	9,461		3.4	%	924	3.7	%	17
Giant Eagle	6,797		2.4	%	700	2.8	%	9
Walmart	5,562		2.0	%	1,213	4.9	%	11
Dollar Tree	3,505		1.3	%	399	1.6	%	40
Raley's	3,422		1.2	%	193	0.8	%	3
Lowe's	3,020		1.1	%	474	1.9	%	4
SUPERVALU	2,844		1.0	%	371	1.5	%	9
	$	87,680	31.4	%	9,938	40.2	%	203



Month⁽¹⁾	Date of Record	Distribution Rate		Date Distributions Paid	Gross Amount of Distributions Paid		Distributions Reinvested through the DRIP		Net Cash Distributions
December	12/1/2017 - 12/31/2017	$	0.00183562	1/2/2018	$	10,544	$	4,354	$	6,190
January	1/16/2018	0.05583344		2/1/2018	10,363		4,228		6,135
February	2/15/2018	0.05583344		3/1/2018	10,381		4,186		6,195



Period	Total Number of Shares Redeemed	Average Price Paid per Share ⁽¹⁾		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program⁽²⁾	Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
October 2017	68	$	10.20	68	⁽³⁾
November 2017	22	10.98		22	⁽³⁾
December 2017	56	11.00		56	⁽³⁾


⁽¹⁾ (1)See “Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures” of this filing on Form 10-K for further discussion and for a reconciliation of the non-GAAP financial measures to Net Income (Loss).	~~Includes the impact of the PELP transaction (see Note~~ 3).


⁽²⁾	~~Certain prior period balance sheet amounts have been restated to conform with our adoption in 2016 of Accounting Standards Update (“ASU”) 2015-03,~~ ~~Simplifying the Presentation of Debt Issuance Costs~~.


⁽³⁾	See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures, for further discussion and for a reconciliation of the non-GAAP financial measures to Net (Loss) Income.


⁽⁴⁾	~~Certain prior period amounts have been restated to conform with current year presentation.~~


	Total Deals (1)						Inline Deals(1)
	2020			2019			2020			2019
New leases:
Number of leases	383			429			363			411
Square footage (in thousands)	1,290			1,475			957			1,050
ABR (in thousands)	$	20,823		$	22,050		$	17,325		$	17,998
ABR per square foot	$	16.14		$	14.95		$	18.11		$	17.14
Cost per square foot of executing new leases	$	26.14		$	24.00		$	28.58		$	26.63
Number of comparable leases	127			140			125			135
Comparable rent spread	8.2		%	13.3		%	10.9		%	11.2		%
Weighted average lease term (in years)	7.6			7.5			6.7			6.8
Renewals and options:
Number of leases	478			597			422			542
Square footage (in thousands)	3,420			3,171			986			1,186
ABR (in thousands)	$	41,290		$	38,969		$	20,976		$	24,675
ABR per square foot	$	12.07		$	12.29		$	21.27		$	20.80
ABR per square foot prior to renewals	$	11.49		$	11.49		$	19.77		$	18.87
Percentage increase in ABR per square foot	5.1		%	7.0		%	7.6		%	10.2		%
Cost per square foot of executing renewals and options	$	2.65		$	2.53		$	4.18		$	4.33
Number of comparable leases	365			460			349			441
Comparable rent spread	6.7		%	8.5		%	8.0		%	11.4		%
Weighted average lease term (in years)	5.1			4.7			3.9			4.4
Portfolio retention rate	85.2		%	85.7		%	72.8		%	77.7		%



	Total Deals						Inline Deals⁽¹⁾
	2017			2016			2017			2016
New leases:
Number of leases	185			163			179			156
Square footage (in thousands)	547			690			382			379
First-year base rental revenue (in thousands)	$	8,108		$	8,469		$	6,762		$	6,337
Average rent per square foot (“PSF”)	$	14.81		$	12.27		$	17.69		$	16.70
Average cost PSF of executing new leases⁽²⁾⁽³⁾	$	27.03		$	22.53		$	28.11		$	33.09
Weighted average lease term (in years)	7.9			9.8			7.0			7.3
Renewals and options:
Number of leases	369			321			334			301
Square footage (in thousands)	1,977			1,639			676			593
First-year base rental revenue (in thousands)	$	25,196		$	19,581		$	14,664		$	12,686
Average rent PSF	$	12.75		$	11.95		$	21.68		$	21.39
Average rent PSF prior to renewals	$	11.74		$	10.87		$	19.42		$	18.94
Percentage increase in average rent PSF	8.5		%	9.9		%	11.6		%	12.9		%
Average cost PSF of executing renewals and options⁽²⁾⁽³⁾	$	3.12		$	2.67		$	4.80		$	4.70
Weighted average lease term (in years)	5.2			5.3			5.1			5.2
Portfolio retention rate⁽⁴⁾	93.8		%	86.7		%	85.9		%	78.7		%



	2017			2016⁽¹⁾			2015⁽¹⁾
Calculation of FFO Attributable to Stockholders and Convertible Noncontrolling Interests
Net (loss) income	$	(41,718	)	$	9,043		$	13,561
Adjustments:
Depreciation and amortization of real estate assets	127,771			106,095			101,479
Gain on sale of property	(1,760		)	(4,732		)	—
FFO attributable to the Company	84,293			110,406			115,040
Adjustments attributable to noncontrolling interests not convertible into common stock	(143		)	—			—
FFO attributable to stockholders and convertible noncontrolling interests	$	84,150		$	110,406		$	115,040
Calculation of MFFO
FFO attributable to stockholders and convertible noncontrolling interests	$	84,150		$	110,406		$	115,040
Adjustments:
Transaction and acquisition expenses	16,243			5,803			5,404
Net amortization of above- and below-market leases	(1,984		)	(1,208		)	(821		)
Amortization of intangible corporate assets	2,900			—			—
(Gain) loss on extinguishment of debt, net	(572		)	(63		)	2,095
Straight-line rent	(3,729		)	(3,512		)	(4,571		)
Amortization of market debt adjustment	(1,115		)	(2,054		)	(2,685		)
Change in fair value of derivatives	(201		)	(1,510		)	(118		)
Noncash vesting of Class B units	24,037			—			—
Termination of affiliate arrangements	5,454			—			—
MFFO	$	125,183		$	107,862		$	114,344

FFO Attributable to Stockholders and Convertible Noncontrolling Interests/MFFO per share
Weighted-average common shares outstanding - diluted⁽²⁾	196,506			186,665			186,394
FFO Attributable to Stockholders and Convertible Noncontrolling Interests per share - diluted	$	0.43		$	0.59		$	0.62
MFFO per share - diluted	$	0.64		$	0.58		$	0.61


⁽²⁾	OP units and restricted stock awards were dilutive to FFO Attributable to Stockholders and Convertible Noncontrolling Interests and MFFO for the years ended December 31, 2017, 2016, and 2015, and, accordingly, were included in the weighted-average common shares used to calculate diluted FFO Attributable to Stockholders and Convertible Noncontrolling Interests/MFFO per share.



	2017			2016
Gross distributions paid to common stockholders	$	123,324		$	123,141
Distributions reinvested through DRIP	(49,126		)	(58,872		)
Net cash distributions paid to common stockholders	74,198			64,269
Cash distributions paid to OP unit holders	7,025			1,866
Net cash distributions	$	81,223		$	66,135
Net (loss) income attributable to stockholders	$	(38,391	)	$	8,932
Net cash provided by operating activities	$	108,861		$	103,076
FFO attributable to stockholders and convertible noncontrolling interests⁽¹⁾	$	84,150		$	110,406


⁽¹⁾			See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Funds from Operations and ~~Modified~~Core Funds from ~~Operations,~~Operations” of this filing on Form 10-K for the definition of Core FFO, or information regarding why we present Core FFO, ~~Attributable to Stockholders~~ and ~~Convertible Noncontrolling Interests, as well as~~ for a reconciliation of this non-GAAP financial measure to ~~net (loss) income on the consolidated statements of operations.~~Net Income (Loss).


⁽²⁾	~~Future variable-rate interest payments are based on interest rates as of~~ ~~December 31, 2017, including the impact of our swap agreements.~~



Name	Position(s)	Age*	Year First Became a Director
Jeffrey S. Edison	Chairman of the Board of Directors (“Board”) and Chief Executive Officer	57	2009
Leslie T. Chao	Independent Director	61	2010
Paul J. Massey, Jr.	Independent Director	58	2010
Stephen R. Quazzo	Independent Director	58	2013
Gregory S. Wood	Independent Director	59	2016
Devin I. Murphy	Chief Financial Officer, Treasurer and Secretary	57	N/A
Robert F. Myers	Chief Operating Officer	45	N/A
R. Mark Addy	Executive Vice President	55	N/A


Jeffrey S. Edison Chairman Director Since 2009 Age 60			Mr. Edison has served as PECO’s Chairman of the Board and Chief Executive Officer since December 2009 and also served as President from October 2017 to August 2019. Mr. Edison also served as Chairman of the Board and Chief Executive Officer of Phillips Edison Grocery Center REIT III, Inc. (“REIT III”) from April 2016 through the date it merged with PECO in October 2019, and served as Chairman of the Board and Chief Executive Officer of Phillips Edison Grocery Center REIT II, Inc. (“REIT II”) from 2013 through the date it merged with PECO in November 2018. Mr. Edison co-founded Phillips Edison Limited Partnership (“PELP”) and has served as a principal of it since 1995. Before founding Phillips Edison, Mr. Edison was a senior vice president from 1993 until 1995 and was a vice president from 1991 until 1993 at Nations Bank’s South Charles Realty Corporation. Mr. Edison was employed by Morgan Stanley Realty Incorporated from 1987 until 1990, and was employed by The Taubman Company from 1984 to 1987. Mr. Edison holds a Bachelor of Arts in mathematics and economics from Colgate University and a Master of Business Administration from Harvard University. Among the most important factors that led to the Board’s recommendation that Mr. Edison serve as a director are his leadership skills, integrity, judgment, knowledge of PECO, his experience as a director and chief executive officer of PECO, REIT II, and REIT III, and his commercial real estate expertise.
Leslie T. Chao Lead Independent Director Director Since 2010 Age 64			Mr. Chao has served as a director since July 2010 and as Lead Independent Director since November 2017. He retired in 2008 as Chief Executive Officer of Chelsea Property Group, Inc., a New York Stock Exchange (“NYSE”) listed shopping center real estate investment trust (“REIT”) with operations in the United States, Asia and Mexico (now part of Simon Property Group, NYSE: SPG), previously serving as President and Chief Financial Officer. He has been a board member of London-based Value Retail PLC since 2009; and a co-founder and chairman of entities comprising Value Retail China, a privately-held owner/developer of retail properties, since 2012. From 2005 to 2008 he was an inaugural member of the board of Link REIT, the first publicly-listed and largest REIT in Hong Kong. Earlier in his career, Mr. Chao was with Manufacturers Hanover Corporation (now part of JPMorgan Chase & Co.), ending in 1987 as a Vice President in the bank holding company treasury group. He received an MBA from Columbia University and an AB from Dartmouth College, where he is a member of the President’s Leadership Council and the advisory board of the Hopkins Center for the Arts. He is based in New York City. Among the most important factors that led to the Board’s recommendation that Mr. Chao serve as a director are his extensive domestic and international commercial real estate expertise, accounting and financial management expertise, public company director experience, integrity, judgment, leadership skills, and independence from management and our affiliates.


Elizabeth Fischer Director Since 2019 Age 61			Ms. Fischer joined Goldman Sachs & Co. LLC in 1998 and most recently served as Managing Director of the Bank Debt Portfolio Group from 2010 until her retirement in May 2019, where she managed Leveraged Finance-led syndicated loans. She also served four years as co-head of Goldman Sachs’ firm-wide Women’s Network for the Americas. Prior to joining Goldman Sachs, she held various positions in the leveraged finance, syndications, and risk management group at the Canadian Imperial Bank of Commerce (CIBC). Ms. Fischer began her career at KPMG LLP. She holds a Bachelor of Arts from Colgate University and a Master of Business Administration from New York University. Among the most important factors that led to the Board’s recommendation that Ms. Fischer serve as a director are her financial and investment expertise, leadership skills, integrity, judgment, and independence from management and our affiliates.
Paul J. Massey, Jr. Director Since 2010 Age 61			Mr. Massey began his career in 1983 at Coldwell Banker Commercial Real Estate Services, now CBRE, in Midtown Manhattan, first as the head of the market research department, and next as an investment sales broker. Together with partner Robert A. Knakal, he founded Massey Knakal Realty Services, which became New York City’s largest investment property sales brokerage firm, of which Mr. Massey served as Chief Executive Officer. With 250 sales professionals serving more than 200,000 property owners, Massey Knakal Realty Services was ranked as New York City’s #1 property sales company in transaction volume by the Costar Group, a national, independent real estate analytics provider. With more than $4.0 billion in annual sales, Massey Knakal was also ranked as one of the nation’s largest privately-owned real estate brokerage firms. On December 31, 2014, Massey Knakal was sold to global commercial real estate firm Cushman & Wakefield, Inc., for which Mr. Massey served as President - New York Investment Sales through April 2018. In July 2018, Mr. Massey founded B6 Real Estate Advisors, a real estate brokerage firm in New York City, and currently serves as its Chief Executive Officer. In 2007, Mr. Massey was the recipient of the Real Estate Board of New York’s (“REBNY’’) prestigious Louis B. Smadbeck Broker Recognition Award. Mr. Massey also serves as Chair for REBNY’s Ethics and Business Practice Subcommittee, was a director on the Commercial Board of Directors of REBNY, is Chairman of the Board of Trustees of the Roxbury Latin School, and serves as a chair or member of numerous other committees. He served as a director of REIT II from July 2014 to August 2017. Mr. Massey holds a Bachelor of Arts in economics from Colgate University. Among the most important factors that led to the Board’s recommendation that Mr. Massey serve as a director are his integrity, judgment, leadership skills, extensive commercial real estate expertise, familiarity with our company, and independence from management and our affiliates.
Stephen R. Quazzo Director Since 2013 Age 61			Mr. Quazzo is co-founder and Chief Executive Officer of Pearlmark Real Estate, L.L.C. From 1991 to 1996, Mr. Quazzo served as President of Equity Institutional Investors, Inc., a subsidiary of investor Sam Zell’s private holding company, Equity Group Investments, Inc. Mr. Quazzo was responsible for raising equity capital and performing various portfolio management services in connection with the firm’s real estate investments, including institutional opportunity funds and public REITs. Prior to joining the Zell organization, Mr. Quazzo was in the Real Estate Department of Goldman, Sachs & Co., where he was a vice president responsible for the firm’s real estate investment banking activities in the Midwest. Mr. Quazzo holds a Bachelor of Arts and a Master of Business Administration from Harvard University, where he serves as a member of the Board of Dean’s Advisors for the business school. He is a Trustee of the Urban Land Institute (ULI), Trustee and immediate past Chair of the ULI Foundation, a member of the Pension Real Estate Association, and a licensed real estate broker in Illinois. In addition, Mr. Quazzo currently serves a director of Marriott Vacations Worldwide (NYSE: VAC) and previously served as a director of ILG, Inc. (Nasdaq: ILG) until September 2018 and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) until September 2016. He also sits on a number of non-profit boards, including Rush University Medical Center, the Chicago Symphony Orchestra Endowment, the Chicago Parks Foundation, Deerfield Academy, and City Year Chicago. Among the most important factors that led to the Board’s recommendation that Mr. Quazzo serve as a director are his commercial real estate expertise, investment management expertise, public company director experience, leadership skills, integrity, judgment, and independence from management and our affiliates.
Jane Silfen Director Since 2019 Age 35			Ms. Silfen is the founder and owner of Mayfair Advisors LLC, which was founded in 2019 to advise clients on sustainability and clean technology investment opportunities. Since 2015, she also has served as Vice President at Mayfair Management Co., Inc., a New York City-based family office, where she is responsible for overseeing and making public and private investments. In February of 2021, Ms. Silfen was named interim CFO of Genera Energy Inc., a sustainable packaging company. Ms. Silfen began her career in investment banking at Goldman Sachs and later served as Vice President at Encourage Capital, LLC. She holds a Bachelor of Arts from the University of Pennsylvania and a Master in Public Policy and Master of Business Administration from Harvard University. Among the most important factors that led to the Board’s recommendation that Ms. Silfen serve as a director are her investment experience, clean technology and sustainability expertise, integrity, judgment, and independence from management and our affiliates.


John A. Strong Director Since 2018 Age 60			Since July 2010, Dr. Strong has served as Chairman and Chief Executive Officer of Bankers Financial Corporation, a diversified financial services company for outsourcing solutions for claims, policy and flood products for insurers; insurance tracking for lenders; human resources solutions for small business; warranties for consumer electronics and new homes; insurance and maintenance services for properties, businesses and builders; and surety bonds for bail. From 2005 to 2010, he served as the President and Managing Partner of Greensboro Radiology. Since 2007, Dr. Strong has served as a board member of Bankers Financial Corporation. He previously served as a director of REIT II from May 2017 to November 2018 when it merged into PECO. Dr. Strong holds a Bachelor of Arts in mathematics from Duke University and a Doctor of Medicine degree from Michigan State University College of Human Medicine as well as his residency and fellowship in radiology from Duke University. Among the most important factors that led to the Board’s recommendation that Dr. Strong serve as a director are his financial and management expertise, judgment, leadership skills, and independence from management and our affiliates.
Gregory S. Wood Director Since 2016 Age 62			Mr. Wood has been Executive Vice President and Chief Financial Officer of EnergySolutions, Inc., a leading services provider to the nuclear industry, since June 2012. Prior to that, Mr. Wood held the role of Chief Financial Officer at numerous public and private companies, including Actian Corporation, Silicon Graphics, Liberate Technologies, and InterTrust Technologies. Mr. Wood was a director of Steinway Musical Instruments, Inc. from October 2011 to October 2013, where he also served as Chairman of the Audit Committee. Mr. Wood, a certified public accountant (inactive), holds a Bachelor of Business Administration in accounting from the University of San Diego and a Juris Doctor from the University of San Francisco School of Law. Among the most important factors that led to the Board’s recommendation that Mr. Wood serve as a director are Mr. Wood’s accounting and financial management expertise, public company director experience, integrity, judgment, and independence from management and our affiliates.


	Audit Committee	Compensation Committee
Leslie T. Chao	Chair
Elizabeth Fischer	Member
Paul J. Massey, Jr.		Member
Stephen R. Quazzo	Member
Jane Silfen		Member
John A. Strong		Chair
Gregory S. Wood	Member


Jeffrey S. Edison Chairman & Chief Executive Officer Age 60			Mr. Edison has served as PECO’s Chairman of the Board and Chief Executive Officer since December 2009 and also served as President from October 2017 to August 2019. Mr. Edison also served as Chairman of the Board and Chief Executive Officer of REIT III from April 2016 through the date it merged with PECO in October 2019, and served as Chairman of the Board and Chief Executive Officer of REIT II from 2013 through the date it merged with PECO in November 2018. Mr. Edison co-founded PELP and has served as a principal of it since 1995. Before founding Phillips Edison, Mr. Edison was a senior vice president from 1993 until 1995 and was a vice president from 1991 until 1993 at Nations Bank’s South Charles Realty Corporation. Mr. Edison was employed by Morgan Stanley Realty Incorporated from 1987 until 1990, and was employed by The Taubman Company from 1984 to 1987. Mr. Edison holds a Bachelor of Arts in mathematics and economics from Colgate University and a Master of Business Administration from Harvard University.
Devin I. Murphy President Age 61			Mr. Murphy has served as our President since August 2019. Prior to that, he served as our Chief Financial Officer from June 2013, when he joined the Company, to August 2019. Before joining Phillips Edison in 2013, Mr. Murphy worked for 28 years as an investment banker and held senior leadership roles at Morgan Stanley and Deutsche Bank. He served as the Global Head of Real Estate Investment Banking at Deutsche Bank. His Deutsche Bank team executed over 500 transactions of all types for clients representing total transaction volume exceeding $400 billion and included initial public offerings, mergers and acquisitions, common stock offerings, secured and unsecured debt offerings, and private placements of both debt and equity. Mr. Murphy began his banking career at Morgan Stanley in 1986 and held a number of senior positions including Vice Chairman, co-head of US Real Estate Investment Banking, and Head of Real Estate Private Capital Markets. He also served on the Investment Committee of the Morgan Stanley Real Estate Funds, a series of global real estate funds with over $35 billion in assets under management. During his 20 years with Morgan Stanley, Mr. Murphy and his teams executed numerous capital markets and merger and acquisition transactions including a number of industry-defining transactions. Mr. Murphy served as a Director of the NYSE-listed real estate services firm Grubb and Ellis prior to its sale to BGC Partners and of the S&P 500 company Apartment Investment and Management (AIV) prior to its spin off transaction. Mr. Murphy currently serves as an independent director of Apartment Income REIT Corp (AIRC), a NYSE-listed apartment REIT, and serves on the Audit, Compensation, and Nominating Committees of AIRC. He is also an independent director of CoreCivic (CXW), a NYSE-listed corporation that provides diversified government solutions in corrections and detention management. He serves on the Audit and Risk Committees at CXW. Mr. Murphy received a Bachelor of Arts in English and History with Honors from the College of William and Mary and a Masters of Business Administration from the University of Michigan.
Robert F. Myers Chief Operating Officer & Executive Vice President Age 48			Mr. Myers has served as our Chief Operating Officer since October 2010. Mr. Myers joined PECO in 2003 as a Senior Leasing Manager, was promoted to Regional Leasing Manager in 2005 and became Vice President of Leasing in 2006. He was named Senior Vice President of Leasing and Operations in 2009, and Chief Operating Officer in 2010. Before joining PECO, Mr. Myers spent six years with Equity Investment Group, where he started as a property manager in 1997. He served as director of operations from 1998 to 2000 and as director of lease renegotiations/leasing agent from 2000 to 2003. He received his Bachelor’s degree in business administration from Huntington College in 1995.
John P. Caulfield Chief Financial Officer, Senior Vice President & Treasurer Age 40			Mr. Caulfield has served as our Chief Financial Officer, Senior Vice President, and Treasurer since August 2019. Prior to that, he served as our Senior Vice President of Finance from January 2016 to August 2019, with responsibility for financial planning and analysis, budgeting and forecasting, risk management, and investor relations. He served as chief financial officer, treasurer, and secretary of REIT III from August 2019 to October 2019 when it merged with PECO. He joined PECO in March 2014 as vice president of treasury and investor relations. Prior to joining PECO, Mr. Caulfield served as vice president of treasury and investor relations with CyrusOne Inc. (Nasdaq: CONE) from February 2012 to March 2014 where he played a key role in the company’s successful spinoff and IPO from Cincinnati Bell (NYSE: CBB); the establishment of its capital structure and treasury function; and creation, positioning, and strategy of messaging and communications with investors and research analysts. Prior to that, he spent seven years with Cincinnati Bell, holding various positions in treasury, finance, and accounting, including assistant treasurer and director of investor relations. Mr. Caulfield has a Bachelor’s degree in accounting and a Master of Business Administration from Xavier University and is a certified public accountant.


Tanya E. Brady General Counsel, Senior Vice President & Secretary Age 53			Ms. Brady has served as our General Counsel and Senior Vice President since January 2015 and as Secretary since November 2018. She joined PECO in 2013 as Vice President and Assistant General Counsel. She has over 20 years of experience in commercial real estate and corporate transactions, including joint venture and fund formation matters, structuring and negotiating asset and entity-level acquisitions and dispositions and related financings, the sales and purchases of distressed loans, and general corporate matters. She also has extensive commercial leasing and sale leaseback experience. Prior to joining PECO, Ms. Brady was a partner at the law firm of Kirkland & Ellis LLP in Chicago, Illinois. Prior to that, she held associate positions at the law firms of Freeborn & Peters LLP (Chicago, Illinois), King & Spalding LLP (Atlanta, Georgia), and Scoggins & Goodman, P.C. (Atlanta, Georgia). Ms. Brady received a Bachelor of Civil Law degree with honors from the National University of Ireland College of Law in Dublin, Ireland, and a Juris Doctor from DePaul University College of Law in Chicago. She is licensed to practice in Illinois, Georgia, Ohio, and Utah.



Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)⁽¹⁾	Total ($)
Leslie T. Chao	73,532	25,000	98,532
Paul J. Massey, Jr.	53,532	25,000	78,532
Stephen R. Quazzo	53,532	25,000	78,532
Gregory S. Wood	52,532	25,000	77,532



	Annual Cash Retainer ($)	Annual Equity Retainer ($)
Board of Directors	30,000	25,000
Audit Committee Chair	20,000	—
Conflicts Committee Chair	3,000	—



	~~Annual Cash Retainer ($)~~
~~Board of Directors~~	~~52,500~~
~~Lead Independent Director~~	~~10,000~~
~~Audit Committee Chair~~	~~10,000~~
~~Compensation Committee Chair~~	~~10,000~~



Plan Category	Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants, and, Rights	Weighted-Average Exercise Price of Outstanding Options, Warrants, and, Rights	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans⁽¹⁾⁽²⁾
Equity compensation plans approved by security holders	17,157	—	9,182,843
Equity compensation plans not approved by security holders	—	—	—
Total / Weighted Average	17,157	—	9,182,843


⁽¹⁾	~~Excludes number of securities to be issued upon exercise of outstanding options, warrants, and rights.~~


⁽²⁾	~~As of December 31, 2017, there were 9,000,000 shares available for grants under the 2010 Plan and 200,000 shares available for grants under the Director Plan.~~


	Element	Form	Description
Fixed Compensation	Base Salary	Cash	• Designed to compensate executive officers for services rendered on a day-to-day basis • Provides guaranteed cash compensation to secure services of our executive talent • Established based on scope of responsibilities, experience, performance, contributions, and internal pay equity considerations • Compensation Committee reviews annually
Variable/ At-Risk Compensation	Annual Incentive Plan	Cash Bonus	• Designed to encourage outstanding individual and Company performance by motivating executives to achieve short-term Company and individual goals by rewarding performance measured against key annual strategic objectives • 2020 Company performance metrics were AFFO per share and Same-Center NOI growth, which metrics were not adjusted during the COVID-19 pandemic
	Long-Term Incentive Plan	Time-Based Restricted Stock Units	• Compensation Committee believes a substantial portion of each executive’s compensation should be in the form of long-term equity incentives • Designed to encourage management to create stockholder value over the long term; value of equity awards directly tied to changes in value of our common stock over time • 2020 awards were 60% performance-based restricted stock units (or operating partnership units) and 40% time-based restricted stock units (or operating partnership units) • Performance-based LTIP Units granted under the 2018 LTIP Program were deemed earned at maximum based on performance through December 31, 2020, but were capped at the target amount due to a decrease in Net Asset Value (“NAV”) per share from the beginning of the performance period
		Performance-Based Restricted Stock Units


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Brixmor Property Group Inc.	Kite Realty Group Trust	SITE Centers Corp. (formerly DDR)
Federal Realty Investment Trust	Regency Centers Corporation	Weingarten Realty Investors
InvenTrust Properties Corp	Retail Opportunity Investments Corp.