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**Key Takeaways**
- **Record Leasing Momentum**: 1.5M sq. ft. of new leases at 18% spread, with small shop occupancy at 91.4%.
- **Strong Reinvestment Returns**: $46M reinvested in 8 projects, yielding 11% incremental returns.
- **FFO Guidance Raised**: $2.23-$2.25 per share, driven by lease settlement income.
- **Capital Recycling Strategy**: $148M in asset sales year-to-date, reinvesting into high-IRR projects.
- **Sustainability Focus**: 82% of ABR from grocery-anchored centers, driving 35% traffic growth.

**【CEO Summary Section】**
- **Record Leasing Performance**: Executed 1.5 million sq. ft. of new and renewal leases with a blended cash spread of 18%, including new leases at $25.85/sq. ft., the highest on record. Small shop occupancy reached 91.4%, with room for further growth.
- **New Tenant Openings**: Notable openings include Sprouts Farmers Market, Trader Joe's, and projects at Davis Collection and Block 59. Reinvestment projects stabilized 8 properties with a total cost of $46 million, yielding an average incremental return of 11%.
- **Reinvestment Momentum**: Added a second phase to Barn Plaza in Philadelphia, featuring Pottery Barn, Williams Sonoma, Sephora, and Lovesac. Grocery-anchored centers now account for 82% of ABR, driving 35% year-over-year traffic growth.
- **Transactions**: Acquired LaCenterra at Cinco Ranch for $223 million, with 7 new leases signed or in process. Year-to-date dispositions total $148 million, with $190 million of value-added acquisitions under control.

**【CFO Financial Commentary】**
- **FFO Performance**: NAREIT FFO of $0.56 per share, driven by 4% same-property NOI growth. Base rent growth decreased by 270 basis points due to lower occupancy, but 2026 growth expected to accelerate as occupancy rebounds.
- **Revenue Growth**: $22 million of new ABR commenced in Q3, with a signed-but-not-commenced pipeline of $60 million. Lease settlement income is expected to be a headwind in 2026.
- **Balance Sheet**: $1.6 billion of available liquidity, including $400 million from a 4.85% bond issuance. Extended buyback program for 3 years. Annual dividend increased 7% to $1.23 per share.
- **Guidance Update**: FFO guidance raised to $2.23-$2.25 per share, reflecting higher-than-expected lease settlement income. Same-property NOI growth maintained at 3.9%-4.3%.

**【Q&A Highlights】**
- **NOI Growth Acceleration**: Q4 same-property NOI growth driven by $22 million of new ABR commencing in Q3 and $19 million commencing in Q4. Reduced exposure to at-risk tenancy supports sustainability.
- **Leasing Pipeline**: 390 basis points spread between leased and build occupancy, with a pipeline of $60 million in net new rents. Strong demand from off-price, health, and wellness retailers.
- **Capital Recycling**: Sold $148 million of low-growth assets year-to-date, reinvesting into high-IRR projects like LaCenterra. Acquisitions cap rate of ~7%, similar to dispositions.
- **Tenant Health**: Bad debt expense trending to the lower end of the 0.3%-0.4% range, supported by reduced exposure to at-risk tenants and strong credit quality of new tenants.


Brixmor Property Group Inc. (BRX) Q3 2025 Earnings Call Transcript

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