The following is a summary of the Phillips Edison & Company, Inc. (PECO) Q1 2024 Earnings Call Transcript:
Financial Performance:
PECO saw an increase in same-center Net Operating Income (NOI) by 3.7%.
There was an increase in rental income due to solid property operations.
The company reported a 4.9% increase in NAREIT FFO, with Q1 2024 reaching $80.1 million, or $0.59 per share.
They reported a 4.5% increase in Core FFO, amounting to $81.7 million for Q1 2024, or $0.60 per share.
PECO expects a negative impact of un-expectant reserves and also anticipates headwinds of $0.07 to $0.11 per share for the year due to increasing interest rates.
The financial performance was backed further by the affirmation of the 2024 core FFO guidance range with a midpoint suggesting a 3% YoY growth.
PECO maintained robust debt funding for acquisitions with $570 million liquidity and plans to incorporate long-term fixed-rate debt.
Business Progress:
The company acquired two shopping centers and one land parcel for a total cost of $56 million.
In Q1, they completed four projects and offered more than 180,000 sq ft of space to occupants.
Their projected investment in ground-up development annually is $40 million to $50 million.
They anticipate net volume of acquisitions for the year to fall within $200 million to $300 million.
PECO reported effective expense management that resulted in increased NOI margin and a highly successful leasing effort for anchor and in-line occupancy.
They expect to raise their in-line occupancy by 100 to 150 basis points in the future.
The company is shifting towards acquiring smaller-format, grocery-anchored products and plans to maintain a robust balance sheet without exceeding limits.
PECO experienced high demand in restaurants, quick service restaurants, health and beauty, and Medtail sectors.
A strategic shift was made towards reclaiming spaces from near-insolvent tenants and mark them to market, with a forecast of top-line growth.
More details: Phillips Edison IR
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