PECO - Earnings call 2 2021 | Phillips Edison & Company, Inc.

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Operator

Good morning, and welcome to Phillips Edison & Company's Second Quarter 2021 Results Presentation. My name is Josh, and I will be your conference call operator today.

Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. A replay of today's presentation will be available this afternoon on the Investors section of the Phillips Edison & Company website at phillipsedison.com/investors. The company's earnings release, quarterly financial supplement and 10-Q were issued yesterday, August 5, after market close. for & the Company available the section are Edison Phillips website documents download Investors on of These at phillipsedison.com/investors.

like Phillips Sir, now Michael would to call the I over Koehler with proceed. Edison please Company. & turn to

Michael Koehler

Thank for us. you, President Investor I you Edison Phillips Vice joining Relations Koehler, operator. with everyone, Michael & thank morning, of Good and am Company.

July this are Devin is XX, history John differentiated Executive and review Officer, also and operational financial Officer, then second our recap President, our our Murphy; Joining then will and as update our XXXX. traded Chief quarter growth our provide John our will first Jeff acquisitions Jeff a me provide Edison's discuss unique Jeff company, our presentation, return our and activity initial background Caulfield. Because and on discuss earnings to call markets during XX-year on our Chairman an strategy. on recent public Phillips guidance. our capital today's Jeff results, Financial and call underwritten will some Chief strategy. publicly closed and Edison; transformative will offering today's long-term that on

prepared questions analyst answer Following we from institutional the remarks, our will community.

our I are be audience begin, to in call filings. SEC risks described our to statements would we and today's like various considered made during Before subject that which remind may forward-looking uncertainties as

pleasure Officer. for refer the our results measures and which also that, certain financial regarding call Edison, download available are non-GAAP will to release our we to of turn to my Chief in website. With Jeff earnings issued reconciliations supplemental our and over these addition, these on Executive yesterday, it's our use available In Jeff? of are to measures. Information disclosure measures our GAAP

Jeffrey Edison

good and you, Thank morning, everyone. Michael,

highlight like our a our growth plans. strategy, to Before the we overview I Edison, Phillips to into for brief differentiated portfolio provide speak and our of our would quarter, results get review

XXX omnichannel grocery-anchored, of years, fully associates experienced, built largest competitive. shopping of for is our owners the of neighborhood are and integrated nation's one and operating team centers. engaged We XX operators platform We've our

Our PECO. over of average senior years' years with XX management team experience has and an XX

is Virginia over center which has net $XXX,XXX. navigated XXXX, We $XXX successfully had deep. This Danville, net operating first XXX of in brought annualized cycles. Today, broad bench million. our in income properties Our a numerous have and operating we and an team income of business

a and team like They own this aligned year company. of also shareholders. PECO who's with better the personally stock having meaningful is It's associate been owners. owns Importantly, think the with PECO approximately skin company. than leadership PECO, alignment over game. share in of to never sold X% I in Every have find X hard the

been for one improve and mission at time. XX communities consistent clear shopping Our a is our and create grocery-anchored we years. experiences, omnichannel, great has We center

think neighbors it retailers centers would like to the and community-focused. One our tenants Because We may tenants are customer and helps that do this community. we in we you Why our neighbors? that work create at We thing our that community we call believe treat our our hear our as our tenants grocery-centered neighbors. during call to remind service to is presentation and organization hard we treat our in today neighbors. we

operate and simple. Our grocery-anchored strategy is We own centers. neighborhood

on a has hours Main home. Exit center sits XX It Interstate centers your It XX. XX,XXX and Our square grocery foot day. and is X from not an the a are open-air Main, typically miles open of at store that's XX corner

you're dinner. than a week, twice other is grilling for forget any center This retailer there you when the more you visit. shop and you to You run ketchup burgers

fast our get also food, centers. square fitness store services your feet dry medical. of goods the XX,XXX from to you lot at small Starbucks, Fargo. cleaning, Wells Chipotle, necessity-based groceries, Orangetheory, and of Walgreens can and addition shops In a Think Think and haircuts,

discount improvement size not home of where goods go electronics our clothing, centers. your supplies. power the are centers get or to you Our or sporting They're twice are office centers. goods, usually Those

types economics. We centers expect, you'd On times and come businesses average, X very are week. nearly of centers in grocers. these XX% rent very have get our our our different to of As a from customers our different X

box retailers. exposure limited have We to big

leasing We average have square pricing in-line power for a spaces. has high X,XXX been foot and demand leasing. Historically, consistently

fully a delivery our are high our goods for necessity-based trade Each It area to on strategy, are critical the demographics our of the BOPIS, and where components to has centers, focus within capabilities. Our we and owning for in with online services, base capital with both favorable occupied a grocer with neighbors selling has and as success. When requirements these omnichannel #X be up the exposure grocer home it centers pick buy drives centers keeping lower significantly or and #X market, that our successful. to or results. neighbors format well. We neighbor comes store, to believe

Our centers neighborhood own in targeted average universe. locations. square is smallest smaller in shopping We XXX,XXX center feet, which center REIT is the the

well best Our square retailer see average our demand. demand We of neighbors' in-line Considering a concentrated centers retailer meet we retailer leasing centers our are positive positioned is create in feet, size smaller to stores. X,XXX the dynamic with and align footprint demand. believe

our growth Our smaller high high for because of spreads. centers and rates re-leasing retention better allow

costs. rates in our cash growth. From re-leasing XXXX, retention meaningful to higher between and downtime growth. to were High TI lower XXXX. NOI spreads less result for rates X.X%, a XX% average XXXX NOI averaged This Our and leads providing XXXX avenue retention

including years, calendar XX%. percentage Over our just a spend averaged CapEx, has total redevelopment the X NOI, of past development as our and

top require format necessity-based way. exposure XXth furnishings. The home than Street like don't means this Lower in in goods can stores categories lower secondary markets services. our centers in we We real retail portfolio smaller estate. CapEx Drive less that markets are neighbors comes we stores School have our compete exposure other This on Minneapolis. We Chicago, at to the Marschall and MSAs. of CapEx high-risk department that offer Denver. our Our anchors to North AFFO. XX% leads in and the higher and Indian We Vierling limited from apparel, to and about retail ABR areas be successful. of where neighborhood Road think Phoenix, compete the and and corner Road and corner our grocers trade Paul of small target in level, don't Minneapolis-St. Dallas, But Atlanta,

We incomes top Our of and where average our household and Publix our that population median neighbors. neighbors money X make top density money. Kroger, make mirror

are demographics, X-mile expect, typically Our of you'd average suburb. as American the

a $XX,XXX We of household have median trade average our income in people X-mile with area. XX,XXX

the goods and average American. to Our shopping centers provide necessity-based services

a are year built an at XXX the Acquisitions our following centers largest we neighborhood million among our one peers for of recently, On part this was rents growth frame. growth time. key More XXXX acquirer strategy. We of of bought properties asset per growth. centers XXXX. between we purchased $X.X were over of story. The are time internal important and during $XXX portfolio base average, over billion Our is Growing XXXX of drivers our XXXX. PECO's between the and

believe over At to increase up X were spreads. XX.X% space we years, We we time. lease vacant the Over to had occupancy. sector-leading this XX, at we June XXXX, We neighbors. in-line have new leasing continue can last

per have into bumps in our been new rent of in-line approximately redevelopment leases neighbors. we to build this rent addition on strong multitenant execute have written the can development These least up project. average, These opportunities. or We or built-in We've made million XX% spreads. We are we able outparcel opportunities on to the from $X build of year, are, existing primarily where single-tenant land. bumps re-leasing space acquired at X%

opportunities targeting and projects. incremental Our XX% also an of rebuild opportunities redevelopment include underwritten with our X% grocers. teardown average to on these yields We're

yield X.X% deliver and XX.X%. are an average Our expected between current underwritten projects to

track focused As new that growing strong we through selectively acquisitions. I record We noted, have strategy. our a assets fit of acquire

X $X billion consistently is has a assets grown Our and of years, years. PECO growth. next plan for over to platform built over XX we scaled for the purchase

our that to the returns. our there strategy work and include the growth. macro, a risk-adjusted buying growth. our to locally. We the that consumers home; for approximately from are the where These shift suburbs in markets, are believe and tailwinds XX% also the shift which superior positions generates believe properties the We We into of balance population have Sunbelt, sheet located; augment will also us demographic economic best-in-class

yields targeted initial XXX acquisition in coastal properties remerchandise Our in centers points strategy than higher purchase XX lower-profile trade at to allows we us areas upgrade We to and acquire. basis markets.

better This lowers creates leads our of going-in value. returns. plus growth and plus growth yields CapEx lower to and risk the superior Better income properties

of our access and Importantly, less well now beta John cycles. to our cost our our alpha performed over shares and year. The motivated success. our XX-year for to in CFO, to we share, growth turn strip but has initial XX, our offering, to year debt our proceeds. With a been public $XX will capital capacity, balance committed ratio stock call external of delivers history, growth our to With is shareholders. Throughout sheet a to of the sheet in per resilient gives proven it beginning. after company, that, balance has of the at On XX.X up major space, issuing John? driver executing the having and a more add key we down capital $XXX focused, adjusted portfolio generated cycles completed This gross EBITDAre I remain This we is REIT IPO low million milestone in with X.Xx. XXXX, the center internal we this million successfully to be strategy. to strongest underwritten July And us Caulfield. generating can the

John Caulfield

everyone. good Thank morning, and you, Jeff,

compared the to occupancy Our business Leased second occupancy of XXXX; points occupancy the as results anchor-leased XX.X% ABR our for for XX.X%; continue in-line economic XX.X% XX to spread portfolio and occupancy reopening was at is economy from quarter. basis totaled quarter. leased totaled consecutive the totaled The the occupancy leased XX, for to benefit XX.X%. XXX% June of open

leases rent During were XX.X% leases spreads were options, feet. and the Comparable we X.X were XXX spreads spreads renewal X%. executed comparable rent new lease square and Combined million totaling renewal and new XXX quarter, XX.X%. rent

executing has high, with Jersey team strong leases in-line UPS Wingstop, to by from Mike's, new illustrated leasing in in-house XX.X% quarter. be well-located, retailers leasing for our and centers and to neighbors the rate Popeyes Our Store, continues our Demand like metrics be retention grocery-anchored been the Starbucks. our busy

growth pre-COVID the were XXXX typically prospects. Collections our the were optimistic and times. outperforms collection challenging be of we're and our during in good to XXX%. necessity-based of long-term thesis reaching second levels continue the performs our billings, the XX% in cusp of quarter our between well on and portfolio validated XX% about times monthly which that COVID We our

XX%, to quarter XXXX XXXX from fourth of and our quarter first increased from collections up XX%. to collections XX%, up Our increased figure announced originally XX%,

million. $XX executed approximately XX, June $X this missed be Of outstanding of As XXXX, was collected balance our payment to under is figure, of plans. approximately billing million

to our billings continue We April of since collect with unpaid represents $XX total our than work order of to less missed billings. billings neighbors XXXX. X% X, million The in

Our for XX.X% the benefited second to On FFO quarter also share $X.XX per shares a December increased improved was lower a expense. increase collections as share by increased The quarter of FFO interest during driven by in to and of $XX.X offer which outstanding $X.XX per core from our second closed tender per in quarter diluted fewer XXXX. share result second FFO XXXX. Core share core basis, million. the FFO per core

and stronger improvement Our was $XX.X the $X.XX base or was increase million, XX.X% from income, January recovery a decrease that to improvements to in NOI increased includes compared primarily same-center primarily foot. Partially a operating second point that offsetting XXXX. rent net same-center basis in Further these square average reductions by This year occupancy XX or lower related in a since XXX income, have XXXX the up Please per to we X.X% owned note occupancy driven XXXX. aforementioned an properties average same-center in driving recovery increase was NOI, decrease. ago. rate collections our quarter and operated

X.X%, years. allotment of XX, adjusted adjusted at received XXXX. IPO was interest our December was December proceeds, of to rate XXXX, rate. for unsecured $XXX closed compared of a of X.X% a facility fixed the X.X EBITDAre years to million to used mature our our a XXXX, credit As rate to interest proceeds weighted XX% EBITDAre was that of $XXX X.Xx. At X.Xx was X.X pay approximately of rate of unsecured the term X.Xx we debt our XX, This net loan weighted to XXXX in million when $XXX average quarter average set XX, debt. Subsequent the greenshoe variable had debt had X XXXX, Adjusting our we revolving to million of of debt week, XX% our and XXXX. and a $XXX maturity rate comprised A full million to loans, this end, XX, including and term debt off June facility net a June weighted separate new extending IPO was maturities senior a compares and the weighted average credit XXXX. we maturity Approximately portion average fixed to

investment-grade with with of for well-laddered unsecured XX% liquidity. profile IPO, preparing $XXX by have over NOI a debt our of been highly unencumbered structure have maturities. We our Post we million creating

strategy, We to momentarily. which liquidity will acquisition this we on will our use touch fund robust

debt maturity and the of We and have Importantly, of we public S&P have investment-grade ability plan extend our market, ratings we our assigned diversify BBB-, respectively. BaaX debt and capital. sources from been Moody's access to and profile now the to

guidance. to Moving

for that to per dispositions. Now core provide growth COVID guidance today like economic we'd acquisition past NOI to substantial our the results share, have no assume FFO and and impact quarter, These financial relating figures we future variants. initial from our same-center covered

expect per acquisition This share. and For for FFO X.X% range of full disposition is estimated per the timing the also between to year, same-center XXXX This core of growth the by the and activity share report NOI potential X.X% half year. for $X.XX year. our between the second and the full $X.XX impacted includes we

call assets on our between strategy. expect remainder $XX of year, the over completing recap $XXX of between the $XXX acquire of of over assets expand Jeff? million that, improvement the to sell over to disposition Jeff the and for I to expect our We long-term the and outlook would turn million quality And million lastly, million back remainder the $XX acquisition year. program. With to we growth XXXX like our and of to remainder

Jeffrey Edison

all demographic growing in targets. over portfolio and strategy. centers Thank markets you, the shopping These through grocery-anchored John. respective that about X,XXX identified in When think our grocer U.S. are we've our we portfolio their by acquisitions, #X #X or our the centers fit meet anchored

right price. We disciplined and buy our acquisition algorithms and relationships grocers, our dedicated have to acquisition team the with properties our ability a very our experienced our at drive right long-term proprietary process. Together, the

unlevered X% Year-to-date, million an assets target we contract. $XX these believe of IRR assets. $XX We additional have hit million on have closed over under of and can on our we

$XXX of acquire we XXXX. additional mentioned, John As an can assets of believe during we half the to $XXX second million million

targeted Our we us the opportunity track goals. and record, current conditions, market market all give confidence can acquisition meet our

of neighborhood in focused, #X So strategy and by grocer operating anchored a conclusion, #X PECO the market. small-format centers, differentiated in has the owning or

grocery-anchored has and grocers neighborhood centers Main. PECO cycle-tested the Our the an money, are America's has top sector XXX Main the where and at nearly team in located make outperformed corner of over experienced, time. shopping

among game, the our management line to growth meaningful highest the company, peers. We're Our team skin expand of has portfolio. positioned a company in owning the our X%

that growth. flow cash strong and sheet support balance investment-grade Our

real our and delivery. call. the e-commerce, economic omnichannel will believe your our Our and last-mile are that, in strategy we begin to estate over lastly, growth for With of that including time brick-and-mortar role strong plans our BOPIS portion will today. there term. Thank Q&A neighbor's long we the plays is Operator? complementary And support a you tailwinds key

Operator

with [Operator comes Instructions] from Stanley. Morgan Rich first Hill question Our

Richard Hill

to as over you where on in that note next wanted anything the years, the buy the but several noted appreciate XQ. you're I I up guidance just follow of acquisitions. to going didn't

between and hoping the anything any think XQ. XQ you your the remainder there provide what's little of about And of wasn't specific? the maybe acquisitions around acquisition in bit So you XQ? year, cadence for Was I was a there detail can why as

Jeffrey Edison

the Thank it's Rich, you question. Jeff. for

it's note important that forward in that place. QX, actually in growth were real the deleveraging a so without company at we to And point time in plan

were rationale the point, that that of so as as and assets, -- we we, going. And at sort we buying were go was balancing there process selling

in pipeline didn't acquisitions. We point of that QX close. start And at the you the process reason moving So can we we've this that's not that see, at million have as got are sort towards point. of the the and -- projects that was $XX did any

is as not of look to contract now of we on your you'll bit fourth at quarter. see product quarter, we contract our there we forward. And quarter things has the market. the fourth to we we're more that the year think both do we and quarter quarter And third that we last I see third product have question? Does between move as pace being a acquisition first accelerate the million half know plan the we year there to through through this particularly sort do as during think being as the year anticipate property meet sell that we and choppy well. as would getting activity answer -- into basically So forward, of more put market we our little of been do we'll under and -- process And get in than [ fourth some dealt as the next all we virus. quarter, then most And the $XXX-plus of in as the climbing third was the third to and that, more move will of see the And a able the year -- some do the buy $XX regards as it now gets to in about we to -- ] quarter. more and million was end under that and look open. We with that very I that -- or it's anticipate there a whether as ton

Richard Hill

-- plus And But for XX% could or this us remind past growth in by be clarify John, I from Jeff. XQ, was what Great. same-store tenants? And you. exactly for, driven that's portion your uncollectible previously may NOI was deemed a rents what looking question you John

John Caulfield

Sure, absolutely.

also on of about recoveries impact kind net reconciliations and -- to down. million impact our collections was then and about amounts. related a the $X on And $X side million recoveries out-of-period of million it that's of impacted. I'll in -- quarter $X collection break the related the So were about reserved that to reduction NOI net and had of we the But COVID

collections offset million $X.X had of So second -- but prior specific, million periods, $X.X about by quarter, be was from more new from reserves. the which in to reserve approximately income of reversals we and

million gets we was about as that those So to neighbors. had million the positive about $X -- we I $X related that things net doing with were impact to our and reconciliations And talking income. to about recoveries then of

Richard Hill

Got it.

-- And basis what do what ask looked lot points? the comparison. on have do a you But only do like know it I clarity XQ point? you apples-to-apples of we so a that basis in to because so that into don't have is that 'XX in

John Caulfield

I it me question to a differently. want right. your little I Let answer make get sure

So neighbors XXX And the basis the been was recorded a are and are it historically we recorded mentioned we our I -- on basis, XX%-plus, out open forward. has mean at new and reserves, think between points. this and that at X.X% quarter, took so our when collections if debt and at out-of-period I about the in remarks XX that bad stabilized are our moving reserves we I our look I look -- about the And I portion when again. operating

still of cash-basis I X.X%, mean not is impacted. or neighbors. portion it the So largest are And quite noncreditworthy there is yet. that XX% at

any the level expect stabilized of we we're not X.X% in back you would about rate current a QX for get the QX, account that at here it's So but to going. do pieces, higher if to

Operator

Thomas comes KeyBanc question Todd from Markets. next Capital Our with

Todd Thomas

pricing And and discuss trend to I see First, about year. you your leasing moving little this activity just the a bit further shops, neighbors. spreads were how wanted about and power you in-line Spreads with a bit. to the expect just just solid little both Can that talk throughout again leasing rents anchor you ask quarter. more

Jeffrey Edison

the very do about you thanks. question. looking the where have leasing And Thanks through excited Todd, Dev, results we're we're the the some we This -- go side. we going And want forward? Jeff. yes, are is and of on for how to

Devin Murphy

leasing you the Thank a for on morning. number driving this factors call Todd, I being Sure. see demand. of we mean,

First, growth a which benefiting Jeff from, remarks population there the is, that in are in continued we're number factors Sunbelt of macro mentioned number one, in his markets. that

XX% we're portfolio know, you of the and getting so Sunbelt, As by our tailwind. in is ABR that

from home alternative of from, continues population an suburban from of dynamic communities suburban migration urban is lastly, also retailer-focused, be the continued portfolio. XXX% last-mile increase portfolio. and ours then for our as the virtually And in we're benefits provide addition, to a the centers importance work last-mile delivery suburban to In And attractive retailers then the delivery. economic benefiting our

and aware So take these trends seeing of retailers. beneficiary stores the level the of leasing therefore, demand they of coming and this retailers looking the to are, national advantage are locate to we're increased of we're trends, macro an these And that. from

another had the feet have at the to We'll And -- of year. by example Humana the for So example, XX the end had XX footprint is this Therapy. high this We are to of location. year. square had Starbucks of year. year. end of ATI then of X,XXX we by the last low XXs. in X end And by last rents this one stores, We'll XX the large year. have XXs those have end end Physical X,XXX X We Starbucks with We'll at

the want national these of smaller, we're grocers top indicated. portfolio. by beneficiaries the tenants presence be as foot are drive So grocers centers that anchored seeing by in in traffic. And these are our centers Jeff our that increase because they traffic. to centers foot their this And dramatically retailers top become our are anchored And

X,XXX feet, the of is tenant square smaller average this leasing XX% from feet. tenants square leasing Our demand in activity and footprint. X,XXX size in less is stores than the U.S. is in

that the we these So to level factors enjoy. high continue to of retention lead

retention. market-leading have We

this year-to-date was over year, for XX%. Our retention

see signed we leases no more In than this we year in of 'XX 'XX. we or slowdown in of activity. July July had of leasing July July, so in And

an strong And as seeing will current we demand occupancy XX.X% that of can hold points can we foreseeable think hundred to leasing spreads the and we've we're factors, believe leasing rate so We up our occupancy we that continue the on to spreads have to levels. we based at these continue increase for believe we last that indicated, occupancy the we with that this to get continued future. And XX%. in-line from been seen do several And we've basis can the to we over able drive XX% levels several years. believe

Todd Thomas

Okay. one -- bit. a And Great. following up my That's helpful. just then acquisitions on second question the little

the exposure XX% portfolio. talked being about about the Sunbelt You for today portfolio,

about product? neighborhood? where As and you've Is important discussed, submarket going to are targets you and the local that think acquisition opportunity it you forward? about think investment Or and more geography we landscape, goals new the add about seeing the is

Jeffrey Edison

each is focused around that on market very center you the are shopping the focus directly on we buy, Well, that side. our Todd, know, as we and acquisition

center. proprietary we at like look are on those that Sunbelt other there algorithm we on have more say, lot have just results. to We're won't more centers of us driving going that or And population the want look, us We have won't is side. hand, focus of algorithm on of just the on That's you helps the Southeast to -- these one we acquisition West in sort hear markets that look business. But to how tell we that see going has we Southwest. growth that a you actually I results risk can market each the a focus the evaluate a and not at to we that the drive can we're Coast. how

Sunbelt choice stores portfolio, the be and continue there can So it out but I think part continue. do fact it Atlanta be. our or that to not can grocers we will of well well well. mean, of in our Miami to small the really been growing that really do But a out we of the as believe has and will

properties we how have but population what growth I So of it that, of than in drive a will upon we and I of would we now grocers incomes, also But think based small stores. success in in do looks terms that -- that the Sunbelt and be that and -- will our terms concentration have the will of from algorithm the years anticipate both higher it. X at

Operator

comes question from with Goldman Sachs. Caitlin next Burrows Our

Caitlin Burrows

Maybe just acquisitions. you that the now the years the market support will choppy Jeff, and [ mentioned another follow-up that acquisitions or so, on ] past will was how hopefully up. picking over and X.X sell it

that as mentioned, you seeing talk even confident if about over wondering next second you're can and of billion Just $X the acquisition what of a volume now years, acquisitions. targets makes you the about half goal X you

Jeffrey Edison

for Yes. Thanks, Caitlin, the question.

our selling looking issues, properties. gains believe also selling see bought. What somewhere rates. be the $XX have going-in We in -- unlevered today. more that and I continue see first we think with the and on I September of what of some the target it we capital in we lot starting just with a bit this issues of we'll year, it taxes. we're we there's because gotten going million And as between market we're the happened, is And to people think to IRR more XXXX focus to seeing more historically are it on has aggressive, and potential yield X.XX% X%-plus cap seeing a think cap -- achievable to the that continues of of our in be think we rates at that we sort are seeing is exchange are little seeing compression some X.XX%

look shopping mean, very I for certainly And So to year issue then of tailwinds year-end we -- sort push there an there's a think to people a the value part more centers X urgency are well. a next sort at of there's will over it. of number into half of of next that the urgency, as selling seriously think I first volume

that X,XXX centers. our -- pace a targeted that the that We're is we've So near XX but said, that's to product own. as more right pace. of we will that And centers million that be as And -- there -- XXX we're now overall every to when market that optimistic get on they normalized $XXX nowhere more sell size. we've is X.X% and know, years, that target if we want that we you

muted today to So market's acquisition there. certainly we little -- we're it's increase. But there's seeing a and that more X It the to than now we continuing we're months do ago, if at you now. product is think anticipate we look that meetings, -- starting our X committee certainly even -- were right

Caitlin Burrows

Got it.

uncollectible And a quarter. then on go going was reserve forward just of rent potential kind expect ] Could collections of where reserve rent wins kind And back outlook and reversals. quarter, it you some. the ability the there and And just maybe In the in caused rent receive additional what to question reserve-level Okay. your today. reversals general then [ going on stands forward. your to those then through

Jeffrey Edison

Great.

want that? John, Okay, Thanks, absolutely. do you to cover Caitlin.

John Caulfield

Sure. Caitlin, the question. thanks for

our happening what is is we're really neighbors paying. are collecting, So

that's now. reported XX% at at the the quarter first quarter. first at we're XX% in second So We XX%, and

were very of collect current that they just they sure doing there -- us our from to has work balances paying so then And could making to it that they're is that open, part and very path well. making proven -- the We start well. back of working rent their sure

basis that happening neighbors rent XX% both in we outstanding -- our of so X% received really what's collections from of cash the quarter. our cash so And are and rule a their is, basis about is

on need Now are protocols going balance, if that. bankruptcy about there's they or cash that's actually basis? Because around they're or how X to to like current they through and months things X why still their be long

So we're and really, it end year, come number some down. But look we appropriately look giving in have I about remainder to at XXXX guidance, of and power midpoint at to period I another it's million us would what the of we the quarter. the anticipate expect that year. to past the is of of And is strength additional still what the based the as balance on had estimate of do in kind collect. the or If collections. reserved leasing But we to $X the collections short, we're seeing you our the of

Operator

comes next St. Haendel Our question from

Juste Mizuho. with

Haendel St. Juste

to for a dispositions the wanted I So second. talk about

your more cap of pool and $XX cap XXX-ish, candidates this what's think on fine-tune what about million those million assets moment the disposition do What makes for is I the at long-term $XX of X IPO? them you for here. spend the the that growing outlined might you then term, Maybe sense think, rate candidates assets longer could And portfolio? sense disposition You've as what demand year. you be of compression portfolio your given the and or to a rates

Jeffrey Edison

disposition Great. is little right Thanks, aggressive. counter Haendel. The is dispositions the a the -- now obviously, the acquisitions. pricing And side of bit

the IRR. to and brought the the model disposition list So we its that things our X- we predicts which we on X-year negative pricing it becomes something of every is be have in a -- forward. And our from is If a the property IRR we pricing each that have the we generating drag our that have when gotten disposition really what with power property, company, And of strong of going that we're thing is which the score on sold acquisition selling relatively of portfolio plan to on and and analysis that is assign would as sell. on kind think strategy risk of a to simple relative can sort potential consistent our -- the we part then sort growth to pretty get property. actually strategy, be a we is going

we've always that some point than will be will because today sort they like more as -- X.X are we have we did been than this on the last what you of selling most be we working and -- -- and years transition those know, of ago. I properties less are portfolio some opportunistic will for years we XX have mean, X at that So we properties

portfolio So we've done the major surgery. sort of

the achieve. buy. that's at more acquisitions, across where portfolio trying balance on that the sure really terms to you worked above unlevered able in again, a are. And markets obviously, dispositions. growth and we how sell returns have being That's we targets well, constantly difficult -- of it's is stuff And and because a with look an where the for And expect you'll X% getting we board to our be challenge that always see to it's can return. the in the Now is unlevered really that, our to make that

always we're we so of And -- but balancing in that act where today. and sort of that's our sort been are --

that, rate of John, on it million, In do the don't I the right $XX cap here? have have terms you

John Caulfield

reason than we X.X% the cap then of contract. those mentioned, the are assets Jeff based $XX one, in them of are X that X.X% quality and are anchors And by in or see I grocers, we're are they're is a quality it's X the by million number the several portfolio under They're lower as assets. The say a higher that that. on Haendel, shadow-anchored now a Jeff, and rates of grocer market names Winn-Dixie, on factors. rate, disposing anchored selling Number several cap the assets them have not that the their lower acquisitions upgrading because, the you'll as dispos, on market. are like centers, Yes, such

the an dispo an we unlevered and at better IRR for the so we've you're where behind And market's capital portfolio strategy Jeff seeing the we redeploy purely higher then rate X% pay is our once do an articulated, mentioned, on on upgrade those volume what get acquisitions. But if that as is a willing dispo dispos And think again, our that we on go that asset forward IRR, through than unlevered us. can believe cap the will we opportunistic, we or X.X% be will that. to

Haendel St. Juste

it. up And Got if could the it. then missed follow on I Got billings.

of balance there. payment other the mentioned that of could you Curious for $X maybe is the million, million, form. you million under And line think is. the $X some about then talk time that the what a $XX expectations industry, the million plan I repayment $X of

Jeffrey Edison

Great. cover that? Thanks, want do you Haendel. to John,

John Caulfield

Yes, Sure. that. take I'll

right. that's So

a chunk of of about good the that includes $XX million We outstanding, have cash-basis neighbors.

So half this million. over is, that half about what X year, of on we the next of next would expect is quarters, it year, that over the it average basically $X weighted

we plans Sorry, that's of payment that have. the $X million

a half we've collect actually million, remaining looked the we'll continue at of of about to So that, we $X to regards portion get it. it it. With and

At and it to then the management rate at we've the and So saying, the are to we going, now frame this the we're it's I got bit teams operations we're the would bit if do a making movement. that But leasing tougher. opportunities, and center. space, a on I we're expect is a be use? time highest see that. And make more of on And decisions especially portfolio trying looking progress the our leasing then best similar for based it so, know positive opportunities And best at if I think they're patient, if right there.

Operator

Paulina Our next question with comes Street. Rojas-Schmidt Green from

Paulina Rojas Schmidt

looks do course, think of analysts. did learn to opposite opinion, completed IPO. the What your on with portfolio? skepticism? investor recently, I'm investors you aspects and most side, community your You of what you talking in the And your the process underappreciated in what of is, curious, the more aspect

Jeffrey Edison

exactly incredible fact process, and We're about probably every the our didn't at the the for because talked company, knowing were And tremendous things we their got piece the an company like, engaged we'll we Thanks, investment in we of the of at questions be a preparation game they finishing that they than about did community length that -- from to the like. Paulina. degree, process. top of It's conversation. we the in fully in and the concerns this terms things was meeting Board ever the just

we of that to in about your to each it at you approach. that be doing you do and you're really how them company, learned, and well say would really I So of prepared had the explain understand looking what how was had to how kind and you you it terms things and investor think was

the believers telling that that obviously, we in had lot So it's up say was has that we've It's and American if providing biggest I be ready believed were and for view that when to end, -- was for -- biggest stock, any Maybe a you the it I have public that very we're underrepresented what bit -- to of like you we've to Devin one that necessity-based the invested. kind that. And -- because we investor the making in public. -- big markets. it's not believe -- to I they goods like. And a very believers those would little bought in did they piece of don't John, us or the is And that that each we them relevant. they story of your in we're And you average found think, who a strategy who ones But get that They -- long who one is of that also you make believe that, groceries truly the were really into a a done a know, for what the is segment. I investors the years, my that every guys that. a don't there because to eye examine my were takeaways. we're other But XX segment the big time. under have it would easier been one doing say were comments. of get big takeaway of is business different be

Devin Murphy

communicate those business are retail we're our low of the and And rent that, to providing had the because successfully and need $XX rents perspective where investors our in necessity was necessity our Yes, don't is the successful. And very services we counter high-end factors number end we're And to peers important not to handbags, would is and Jeff. consumer. the et at it very goods you Paulina, the are we're perspectives the selling demos are of ABR a metric. important investor add is you I any that to know, is in that that, strategy our established kind as be a differentiated to we ABR of -- the and community. that Demos lowest are to shoes What certain just is American cetera, has those that well range. And look, need a of and average of metric.

look FFO growth, results share at NOI have the range. our components and of the And so growth though the to that and we that we end matter, metrics, is at demos the our ABRs same-store in investors even our fact on historical market-leading and per had track which are low educate record X you those if

And convince convince. and strategy so on to per I a that progress and recognize focus I would priority IPO, the on was hard same-store think in the that understand other participated metrics of we have that have growth that to of our FFO that And growth strategy. to focus taken over time. to some continue and And less still these need made we There share work you think, investors that them our a I investors are NOI that, and something will lot we we learned. say

Paulina Rojas Schmidt

good other the color. And your projects. Very question then is about capital

could deliver At going ground-up what which trying impact a projects? pace You of NOI growth multitenant you on could to they small-scale, forward. developments. have do list developments, outparcel think understand I'm mostly have the same-property you that are these

Jeffrey Edison

Yes.

would more cash them they're of to work X% We products of time XX%, a that lot between from very we've takes them. and our and flow far. profitable, a where they $XX million projects just do It's targeted very lot take actually and to about a of it deliver these love incremental properties we those they're we've is So outperformed in because the have difficult, so year. delivered

think can we that on. So the range that, we deliver that's

you build that usually out are center, the includes multitenant either buildings what we existing the shopping It street includes which that It is of to X individual, main things. the properties. talking these about, on the but single-tenant incremental were peripheral on or

one. main the that's So

for million. category where second piece Publix, of we do the that do and and that's that is we is the another The $XX rebuilds money, invest or teardown part

John Caulfield

here. in jump I'll Paulina, And

provide which as 'XX fourth for quarter stabilizations are first 'XX. well And target delivering the the delivering of of kind in So that in supplement, do we many third quarter here of as projects and of in that -- currently are underway. are the our here

you, XX time to those getting Especially there. And a we're So we projects of from of would pipeline have for rebuilds have that basically and lot an ready Publix say, have, I products then a takes like time get -- lines. months you additional what generally year. design, lot of teardown the to about -- by the will begin is it these finish. start and from A permits including through

on it might you pretty over is So timing. evenly the give the that help but quarters,

Operator

concludes This Mr. comments. closing for would session. you. our turn Edison to some question-and-answer I Thank like to it back

Jeffrey Edison

the Great. today. call being We Well, thank on you, appreciate everybody, for really it.

have As team on that has very has you know, the accomplished. we've jamming -- to excited been that The incredible. really We're this been that IPO. performed on

associate PECO, we it at delivered. to team to -- we at and look a accomplish And you this If the -- and process owe And but were obviously we effort. that that they team it, they gotten were couldn't also every able all full by focused contributed. done is and -- touched a have it without

-- testament while who's that at so company one it the difficult, all really the time, really the gotten same side. their is operating a well at And there. doing produced And the but everyone time the shoulder on us it mainly into in that team is we've to and edge together. over put it's pulled this But really

please questions, So spending if obviously, call testament appreciate this all the them. of And there with you a time additional we is And to us today. are us.

thanks great day, call. everybody, a So for have being on and the

Operator

you. Thank

You may disconnect. now

Phillips Edison & Company (PECO) 6 Aug 212021 Q2 Earnings call transcript