Brixmor’s 2026 Push: AI, Occupancy, and $70M in New Rent

Date of Call: Feb 10, 2026

Guidance:

• Same-property NOI growth for 2026 expected to be 4.5% to 5.5%, driven by over 450 basis points of base rent contribution.
• Nareit FFO guidance of $2.33 to $2.37 per share, representing 4.4% growth at the midpoint.
• Anticipates approximately $43 million of signed but not yet commenced pipeline to commence ratably throughout 2026.
• Expects revenues deemed uncollectible to be 75 to 100 basis points of total revenues.

Business Commentary:

Strong Financial Performance and Growth:

• Brixmor Property Group reported a 4.2% increase in same property NOI for the year and 5.6% growth in FFO per share, reaching $2.25 at the high end of guidance.
• The growth was driven by robust demand from high-quality tenants, record leasing activity with $70 million in new rent executed, and significant improvements in occupancy rates, with small shop occupancy reaching 92.2% and overall occupancy increasing by 100 basis points to 95.1%.

Operational Efficiency and Cost Management:

• The company achieved a record expense recovery ratio of 92.3% and reduced overall CapEx spending by 14% year-over-year, marking the lowest since 2021.
• This was due to efficient capital deployment, reduced leasing and maintenance capital expenditures, and proactive asset management initiatives.

Portfolio Transformation and Strategic Acquisitions:

• Brixmor's portfolio transformation led to a 10% incremental yield on $183 million of stabilized projects and a significant reduction in tenant disruption headwinds.
• The company focused on acquiring high-quality grocery-anchored centers, particularly in markets like Denver and Southern California, while also completing $170 million in dispositions where ROI was limited.

Improved Tenant Quality and Credit Profile:

• The tenant base's credit quality improved, with 70% of small shop rent derived from multiunit operators and a strong retention rate of 87%.
• This reflects the company's disciplined underwriting standards and the overall strength of the retail environment, allowing Brixmor to attract higher-quality tenants and reduce credit risk exposure.

Technology and Analytics Integration:

• Brixmor is leveraging AI and automation in areas such as lease abstraction, tenant health analyses, and leasing prospecting tools, yielding positive results.
• This strategic focus on technology aims to enhance operational efficiency and decision-making across the company's platform.

Sentiment Analysis:

Overall Tone: Positive

• Management described results as 'exceptional' and stated the portfolio is 'the strongest it has ever been.' They noted 'record performance,' 'tremendous momentum,' and being 'positioned to accelerate our growth.' Forward guidance anticipates continued strong NOI and FFO growth.

Q&A:

• Question from Michael Goldsmith (UBS): Can you provide more detail on the bad debt guidance of 75 to 100 basis points and how it reflects tenant quality and line of sight into bankruptcies?
  Response: The improved guidance reflects stronger tenant health trends and a reduced top-end expectation by 10 basis points, with no significant future disruption anticipated.

• Question from Todd Thomas (KeyBanc): What are thoughts on the acquisition environment, pipeline, and pricing heading into 2026, and what is the $0.01 FFO growth related to transactions?
  Response: The acquisition pipeline continues to grow, with cap rate compression driving activity; transactions are expected to be neutral in the initial year, with acquired assets having a higher growth profile than those sold.

• Question from Haendel St. Juste (Mizuho): Can you expound on assumptions for the upper end of the same-store NOI guide given a lower credit risk backdrop and lower occupancy?
  Response: Achieving the upper end depends on the team executing to get the signed but not commenced pipeline executed and backfilled early in the year, with rent commencements compounding.

• Question from Michael Griffin (Evercore): As the new permanent CEO, what initiatives or changes do you want to put your mark on the company?
  Response: Strategy of reinvesting and operating assets will not change and is accelerating; will remain disciplined on acquisitions but lean more into technology and AI for data-driven decisions and efficiency.

• Question from Craig Mailman (Citigroup): With increased SNO pipeline and lease rate, is the next batch more accretive to FFO/AFFO due to intentional tenant replacement and lower CapEx?
  Response: Yes, the SNO pipeline now consists of higher rents and stronger tenants, with projects executed more efficiently due to competition and existing conditions, leading to better accretion.

• Question from Juan Sanabria (BMO Capital Markets): What drove the term fees in Q4 and expectations for 2026, and impact on noncash revenues?
  Response: A large term fee in Q4 was specific to a unique opportunity in the East Bay Area; normally, term fees are $4M-$6M annually. Noncash revenue acceleration was due to bankruptcies and is not expected to recur.

• Question from Viktor Fediv (Scotiabank): Are you seeing better risk-adjusted returns in traditional grocery-anchored assets versus value-add lifestyle opportunities currently?
  Response: Focus is on finding assets where the Brixmor platform can drive outsized ROIC, regardless of type; recent acquisitions had great opportunities for platform application and higher yields.

• Question from Caitlin Burrows (Goldman Sachs): What is your view on the SNO pipeline replenishing itself going forward given leasing demand and vacancy?
  Response: Demand environment remains strong; the pipeline has been sticky around $60M despite commencements, with conversations ongoing for store expansion, and occupancy upside still exists.

• Question from Samir Khanal (Bank of America): What is assumed for ancillary income in guidance for 2026, following the parking agreement benefit in Q4?
  Response: Ancillary income is a focus with a strong team driving revenue; while not given specific guidance, it is not expected to meaningfully move the range and recurring contributions are anticipated.

• Question from Cooper Clark (Wells Fargo): What is the disposition pipeline volume and cadence, and depth of bidder pools?
  Response: Dispositions allow Brixmor to sell lower-growth assets at better cap rates and recycle capital into higher-growth opportunities, with diverse buyer interest across pension funds and high net worth individuals.

• Question from Connor Mitchell (Piper Sandler): Can you provide context on the watch list and whether concerns are more about tenant credit or balance sheet issues?
  Response: Watch list is favorable; stringent underwriting standards have attracted multiunit operators with stronger credit profiles, leading to positive trends with low delinquencies and move-outs.

• Question from Michael Mueller (JPMorgan): How is AI used to evaluate tenant health, and has it changed the watch list materially?
  Response: AI is used to detect early signals like payment patterns, enabling proactive conversations; it supports data-driven decisions but does not materially change the overall watch list.

• Question from Linda Yu Tsai (Jefferies): How sustainable is the lower CapEx spend looking out a few years?
  Response: Lower CapEx is sustainable due to competition for space, retailer flexibility, reduced deferred maintenance, and improved expense recovery, with continued focus on accretive reinvestment.

• Question from Paulina Rojas Schmidt (Green Street): Did sold assets with low occupancy have anything in common that made sale more compelling than driving occupancy internally?
  Response: Sales were driven by ROI considerations; capital was recycled into higher-growth opportunities where returns were more accretive, not by occupancy levels.

• Question from Omotayo Okusanya (Deutsche Bank): Are we setting up for a year with rising tide lifts all boats, or will differences persist across platforms?
  Response: Environment is strong, but Brixmor is well-positioned with a low rent basis, occupancy upside, and a robust redevelopment pipeline to capitalize on opportunities.

• Question from Caitlin Burrows (Goldman Sachs) - Follow-up: How are you thinking of the net debt to EBITDA leverage ratio of 5.4x?
  Response: The mid-5x leverage position is comfortable given the growth profile, and the company will keep an eye on it but is well-positioned.

• Question from Paulina Rojas Schmidt (Green Street) - Follow-up: Can you share historical context on the metric that 75% of small shop tenants are multiunit operators?
  Response: This percentage has increased over time, with one-off local tenancy reduced to 17% of ABR, reflecting attraction of higher-quality, established operators and improved tenant profile.

Contradiction Point 1

Acquisition / Disposition Strategy and Focus

Contradiction on the type of assets prioritized for acquisition.

How do you view the acquisition environment and capital recycling in 2026, and what's the $0.01 growth from transactions in the guidance? - Todd Thomas (KeyBanc Capital Markets Inc.)

2025Q4: The transaction pipeline... sees cap rates down into the 5s for smaller deals in high-demand markets. Brixmor remains disciplined... but redevelopment is the first priority for free cash flow. - Brian Finnegan(CEO), Mark Horgan(EVP, Chief Investment Officer)

What's the acquisition pipeline outlook regarding opportunity set, cap rate trends, and potential for near-term FFO accretion, like LaCenterra? - Craig Mailman (Citigroup)

2025Q3: Brixmor is being efficient in recycling capital... into value-added acquisitions. The current pipeline... consists of traditional open-air centers, not lifestyle centers... similar to LaCenterra... - Brian Finnegan(Interim CEO), Mark Horgan(EVP, Chief Investment Officer)

Contradiction Point 2

Leasing Pipeline and Market Outlook

Contradiction on the characterization of the leasing environment and retailer expansion trends.

What is the current pipeline status, timing expectations, and buyer pool strength and activity? - Cooper Clark (Wells Fargo Securities, LLC)

2025Q4: The leasing environment remains very optimistic. The pipeline is higher than a year ago despite signing 10% more GLA in 2025. Retailers are performing well and navigating tariffs with suppliers... - Brian Finnegan(Interim CEO, President & COO)

What's the outlook for the leasing pipeline next year, and are retailers continuing to expand amid macroeconomic uncertainties like tariffs? - Michael Griffin (Evercore ISI)

2025Q4: The disposition market is strong... Buyers include pension funds, HNWI, and private groups. Bid pool size varies with asset size; larger deals see fewer bidders... - Mark Horgan(EVP, Chief Investment Officer)

Contradiction Point 3

Watch List and Tenant Disruption Characterization

Contradiction on whether tenant disruption is largely behind or remains a variable.

Can you explain the watch list and whether concerns are tenant-specific or relate to broader industry trends? - Connor Mitchell (Piper Sandler & Co.)

2025Q4: The portfolio screens favorably compared to peers on watch lists... Trends are positive with low delinquencies, move-outs, and high retention/renewal growth. - Brian Finnegan(CEO)

What's the path and timeline to restore the portfolio's leased rate to 95%, and how will this year's bankruptcies and move-outs impact tenant disruption and vacate activity compared to the outlook for 2025 and 2026? - Todd Thomas (KeyBanc Capital Markets Inc.)

2025Q2: The disruption drag is largely behind them. - Brian Finnegan(COO)

Contradiction Point 4

Cap Rate Environment and Acquisition Appetite

Contradiction on the stability and drivers of the cap rate environment.

What are your thoughts on the acquisition environment and capital recycling through 2026, and how does the $0.01 growth from transactions factor into the guidance? - Todd Thomas (KeyBanc Capital Markets Inc.)

2025Q4: The transaction pipeline continues to grow... The market sees cap rate compression across open-air retail, with competition driving cap rates down into the 5s for smaller deals in high-demand markets. - Brian Finnegan(CEO), Mark Horgan(CIO)

What is the current acquisition pipeline outlook following the LaCenterra acquisition in Q3? Is there interest in further transactions? Which types of buyers are competitors? - Cooper Clark (Wells Fargo Securities, LLC)

2025Q2: Competition is heating up... compressing cap rates. - Mark Horgan(CIO)

Contradiction Point 5

Outlook for Bad Debt and Tenant Bankruptcy Impact

The assessment of disruption risk from tenant bankruptcies shifts from cautious to confident.

Can you elaborate on the tenant quality improvements and the extent to which the 75-100 basis points bad debt guidance reflects visibility into tenant bankruptcies? - Michael Goldsmith (UBS Investment Bank)

2025Q4: The improved bad debt outlook reflects strong tenant health trends and an upgraded portfolio quality... There is limited disruption forecast in the budgeting process, providing comfort in the range. - Steven Gallagher(CFO)

What was the exposure to Big Lots or Party City at quarter-end, and how does year-to-date bankruptcy activity relate to the 100 bps of lease rejections and 100 bps of potential outcomes in guidance? - Todd Thomas (KeyBanc Capital Markets)

2025Q1: The bankruptcy activity has played out as expected, and guidance has additional capacity to absorb further disruption. - Steven Gallagher(CFO)