Phillips Edison & Company (PECO) Q3 Earnings call transcript Oct 25, 2024
1min read Phillips Edison & Company (PECO) recently released its third-quarter 2024 earnings report, highlighting a robust financial performance with a focus on growth and strategic acquisitions. PECO's leadership team, including CEO Jeff Edison, President Bob Myers, and CFO John Caulfield, provided insights into the company's operational achievements, financial health, and future outlook during the earnings call.
Financial Highlights
PECO reported solid financial results for the third quarter, with same-center NOI increasing by 3.2%, NAREIT FFO per share growth rising by 9.1%, and core FFO per share growth increasing by 6.9%. These figures underscore the company's consistent growth trajectory and its ability to generate stable earnings. The company's balance sheet remains strong, with approximately $752 million of liquidity and no meaningful maturities until 2027.
Strategic Acquisitions and Expansion
PECO has been actively acquiring high-quality grocery-anchored shopping centers, acquiring 9 shopping centers and several land parcels for a total of $211 million year-to-date. The company updated its acquisitions guidance to $275 million to $325 million for the year, reflecting its confidence in the market and its strategic growth plans. The company's acquisition strategy is focused on expanding its footprint in favorable suburban markets, with a particular emphasis on grocery-anchored centers.
Operational Excellence and Leasing
PECO's operational excellence was evident in its leasing performance, with portfolio occupancy remaining high at 97.8% and anchor occupancy at 99.4%. The company executed 8 anchor leases and secured higher rents at both in-line and anchor levels, demonstrating its ability to effectively navigate the retail landscape and maximize value for its stakeholders. PECO's leasing team continues to capitalize on strong retailer demand, achieving high renewal spreads and in-line new lease spreads of 19.8% and 28.3%, respectively.
Outlook and Future Prospects
Looking ahead, PECO's management team expressed optimism about the company's growth prospects, with a focus on continuing to acquire high-quality centers and drive value at the property level. The company's disciplined approach to acquisitions and balance sheet management, coupled with its experienced team and strategic focus on grocery-anchored centers, position it well for continued success. PECO's updated guidance for 2024 reflects a strong outlook for earnings growth, with NAREIT FFO per share projected to range from $2.35 to $2.39, and core FFO per share projected to range from $2.40 to $2.44.
Conclusion
Phillips Edison & Company's third-quarter 2024 earnings call underscored the company's strong financial performance, strategic acquisitions, and operational excellence. With a focus on grocery-anchored centers in favorable markets and a disciplined approach to balance sheet management, PECO is well-positioned for continued growth and value creation for its stakeholders. The company's confident outlook for 2024 and beyond highlights its commitment to delivering market-leading returns and creating shareholder value.
