Q2 2024 Brixmor Property Group Inc Earnings Call

Operator: Welcome to the Brixmor Property Group second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Welcome to the Brixmor Property Group, Second Quarter, 2024 Earnings Conference Call. At this time, all participants are in a list and only mode. A question and answer session will follow the formal presentation.

Speaker Change: Welcome to the Brixmor Property Group second quarter 2024 earnings conference call.

Speaker Change: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press...

Operator: Then, in which required operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: Star Zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Stacy Slater, SVP of Investor Relations and Capital Markets. Thank you.

Stacy Slater: I would now like to turn the call over to Stacy Slater, SVP of Investor Relations and Capital Markets. Thank you. You may begin.

Stacy Slater: Thank you, operator, and thank you all for joining Brixmor's second quarter conference call. With me on the call today are Jim Taylor, Chief Executive Officer, Brian Finnegan, President and Chief Operating Officer, and Steve Gallagher, Executive Vice President and Chief Financial Officer. Mark Horgan, Executive Vice President and Chief Investment Officer, will also be available for Q&A.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 1. Thank you, you may begin. Thank you, Operator, and thank you all for joining Brixmor's second quarter conference call. With me on the call today are Jim Taylor, Chief Executive Officer, Brian Finnegan, President and Chief Operating Officer, and Steve Gallagher, Executive Vice President and Chief Financial Officer. Mark Horgan, Executive Vice President and Chief Investment Officer, will also be available for Q&A.

Stacy Slater: Thank you, Operator, and thank you all for joining Brixmor's second quarter conference call.

Speaker Change: With me on the call today are Jim Taylor, Chief Executive Officer, Brian Finnegan, President and Chief Operating Officer, and Steve Gallagher, Executive Vice President and Chief Financial Officer. Mark Horgan, Executive Vice President and Chief Investment Officer will also be available for Q&A.

Unknown Executive: Before we begin, let me remind everyone that some of our comments today may contain forward-looking statements that are based on certain assumptions and are subject to inherent risk and uncertainties, as described in our SEC filings, and actual future results may differ materially. We assume no obligation to upstate any forward-looking statements.

Operator: Before we begin, let me remind everyone that some of our comments today may contain forward-looking statements that are based on certain assumptions and are subject to inherent risks and uncertainties as described in our SEC filings, and actual future results may differ materially. We assume no obligation to update any forward-looking statements.

Speaker Change: Before we begin, let me remind everyone that some of our comments today may contain forward-looking statements that are based on certain assumptions.

Speaker Change: and are subject to inherent risks and uncertainties as described in our SEC filings and actual future results may differ materially.

Stacy Slater: Also, we will refer today to certain non-GAAP financial measures. Further information regarding our use of these measures and reconciliations of these measures to our GAAP results is available in the earnings release and supplemental disclosure on the investor relations portion of our website. Given the number of participants on the call, we kindly ask that you limit your questions to one or two per person. If you have additional questions regarding the quarter, please requeue. At this time, it's my pleasure to introduce Jim Taylor.

Unknown Executive: Awesome, we will refer today to certain non-GAAP financial measures. Further information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in the earnings release and supplemental disclosure on the investor relations portion of our website.

Speaker Change: We assume no obligation to update any forward-looking statements.

Speaker Change: Also, we will refer today to certain non-GAAP financial measures. Further information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in the earnings release and supplemental disclosure on the investor relations portion of our website.

Unknown Executive: Given the number of participants on the call, we kindly ask that you limit your questions to one or two per person. If you have additional questions regarding the quarter, please read Q.

Speaker Change: Given the number of participants on the call, we kindly ask that you limit your questions to one or two per person.

Jim Taylor: At this time, it's my pleasure to introduce Jim Taylor. Thanks, Stacey, and good morning, everyone. Before speaking to our results and continued execution, I'd like to begin by congratulating Brian, Stephen, Kevin, and Elaine on their well-deserved promotions. Simply put, well done. As a company, our foundational cultural tenant is that great real estate matters, but great people matter even more. It breaks more; we are blessed with the best team in the industry, a team that continues to deliver out performance, quarter in and quarter out as we execute our balanced value-added plan. Speaking of records, we achieve record occupancy and record new and renewal spreads in the quarter.

Speaker Change: If you have additional questions regarding the quarter, please re-queue. At this time, it's my pleasure to introduce Jim Taylor.

James M. Taylor: Thanks, Stacy, and good morning, everyone. Before speaking about our results and continued execution, I'd like to begin by congratulating Brian, Steven, Kevin, and Helaine on their well-deserved promotions. Simply put, well done. As a company, our foundational cultural tenet is that great real estate matters, but great people matter even more. At Brixmor, we are blessed with the best team in the industry, a team that continues to deliver outperformance, quarter in and quarter out, as we execute our balanced value-added plan.

James M. Taylor: Thanks, Stacy, and good morning, everyone. Before speaking to our results and continued execution, I'd like to begin by congratulating Brian , Steven, Kevin, and Helaine on their well-deserved promotions.

Speaker Change: Simply put, well done.

James M. Taylor: As a company, our foundational cultural tenet is that great real estate matters, but great people matter even more. At Brixmor, we are blessed with the best team in the industry, a team that continues to deliver outperformance quarter in and quarter out as we execute our balanced value-added plan.

James M. Taylor: Speaking of records, we achieved record occupancy and record new and renewal spreads in the quarter, once again highlighting the flywheel effect of our portfolio transformation and our ability to capitalize on the embedded mark-to-market opportunity. In fact, we averaged rents of $23.82 a foot versus our average in place of $17.25.

James M. Taylor: Speaking of records, we achieved record occupancy and record new and renewal spreads in the quarter.

Jim Taylor: Once again, highlighting the flywheel effect of our portfolio transformation and our ability to capitalize on the embedded March market opportunity. In fact, we average rents of 2382 a foot versus our average in place of 17 and a quarter. Importantly, we also commence an additional 17 million of ABR in the quarter, ahead of expectations, while our signed but not commenced ABR replenished to 65 million. Again, providing excellent visibility on continued top line growth as those leases commence paying rent over the next several quarters. Overall, that top line revenue growth drove most of our same-store performance of five and a half in a quarter, as growth in operating margins, driven largely by increased occupancy and penetration of fixed cam, delivered the balance of that growth.

James M. Taylor: Once again, highlighting the flywheel effect of our portfolio transformation and our ability to capitalize on the embedded mark-to-market opportunity.

James M. Taylor: In fact, we average rents of $23.82 a foot versus our average in place of $17.25.

James M. Taylor: Importantly, we also commenced an additional $17 million of ABR in the quarter ahead of expectations, while our signed but not yet commenced ABR replenished to $65 million, again providing excellent visibility on continued top-line growth as those leases commence paying rent over the next several quarters. Overall, that top line revenue growth drove most of our same store performance of five and a half and a quarter as growth in operating margins, driven largely by increased occupancy and penetration of fixed cam, delivered the balance of that growth. That same store growth, in turn, drove bottom-line FFO growth of nearly 6% in the quarter when you exclude the prior year gain on debt expense.

James M. Taylor: Importantly, we also commenced an additional $17 million of ABR in the quarter ahead of expectations.

James M. Taylor: While are signed but not commenced, AVR replenished to $65 million.

James M. Taylor: Again, providing excellent visibility on continued top line growth as those leases commence paying rent over the next several quarters.

James M. Taylor: [inaudible]

James M. Taylor: Overall, that top-line revenue growth drove most of our same-store performance of 5.5 in the quarter. As growth in operating margins

James M. Taylor: Driven largely by increased occupancy and penetration of fixed cam delivered the balance of that growth.

Jim Taylor: That same-store growth, in turn, drove bottom line FFO growth of nearly 6% in the quarter when you excluded the prior year gain on TEDx. Management, even with expectations of higher levels of bad debt and lower prior year recoveries of feeble detail in further in a moment. This outperformance led us to raise our FFO guidance to a range of 211-214, an increase of 3 cents at the midpoint. And putting us on track to deliver over 200 million for the full year.

James M. Taylor: That same store growth in turn drove bottom line FFO growth of nearly 6% in the quarter when you exclude the prior year gain on debt extinguishment.

James M. Taylor: Even with expectations of higher levels of bad debt and lower prior year recoveries, as Steve will detail further in a moment, this outperformance led us to raise our FFO guidance to a range of 211 to 214, an increase of three cents at the midpoint on the reinvestment front.

James M. Taylor: Even with expectations.

James M. Taylor: of Higher Levels of Bad Debt and Lower Prior Year Recoveries, as Steve will detail further in a moment.

Steve: This outperformance led us to raise our FFO guidance to a range of $2.11 to $2.14, an increase of three cents at the midpoint.

James M. Taylor: We continue to make excellent progress, delivering $37 million at an incremental return of 9%, putting us on track to deliver over $200 million for the full year. We also commenced $100 million of pre-lease reinvestment projects, including a second phase of Poynter Land and an exciting restaurant out parcel district called Block 59 in Naperville that Brian will discuss further. These and other projects underway provide us with excellent visibility that we will continue to deliver $150 to $200 million for our plans in 25 and 26 and beyond. On the capital recycling front, we closed during the quarter on a $17 million acquisition in Long Island that is immediately adjacent to one of our existing centers.

Steve: On the reinvestment front,

Steve: We continue to make excellent progress, delivering $37 million at an incremental return of 9%.

Jim Taylor: We also commenced 100 million of pre-least reinvestment projects, including a second phase of Point, Orlando, and an exciting restaurant out parcel of the history called Block 59 in Naperville that Brian will discuss further. These and other projects underway provide us with excellent visibility that we will continue to deliver 150 to 200 million for our plan in 25 and 26 and beyond. On the capital recycling front, we were clothed during the quarter on a $17 million acquisition in Long Island that is immediately adjacent to one of our existing centers. And just barely a month into ownership, we identified several groceries to backfill an empty box at highly accretive rents.

Steve: Putting us on track to deliver over $200 million for the full year.

Brian: We also commenced $100 million of pre-lease reinvestment projects, including a second phase at Point Orlando and an exciting restaurant out parcel district called Block 59 in Naperville that Brian will discuss further.

Brian: These and other projects underway provide us with excellent visibility that we will continue to deliver $150 to $200 million.

Brian: for our plan in 25 and 26 and beyond.

Brian: On the capital recycling front, we were closed during the quarter on a $17 million acquisition in Long Island that is immediately adjacent to one of our existing centers. And just barely a month into ownership, we've identified several groceries to backfill an empty box at highly accretive rents.

James M. Taylor: And just barely a month into ownership, we've identified several groceries to backfill an empty box at highly accretive rent. With these and other grocery opportunities that Brian will highlight in a moment, we continue to organically grow our overall grocery anchored percentage to over 80% of AVR. Importantly, in a manner that unlocks huge value through yield in compression and capital. Following quarter end, we also closed on the acquisition of Fresh Market Shops in Hilton.

Jim Taylor: With these and other grocery opportunities that Brian will highlight in a moment, we continue to organically grow our overall grocery-anchored percentage to over 80% of AVR. Importantly, in a manner that unlocks each value through yields in compression and cap rate. Following quarter end, we also close on the acquisition of Fresh Market shops in Hilton Head, a value added acquisition that builds on our critical mass in the fast growing coastal care line and market. Further, our forward acquisition pipeline continues to build, go over 200 million with opportunities in our core markets, the further cluster and leverage our best in class platform.

Brian: With these and other grocery opportunities that Brian will highlight in a moment, we continue to organically grow our overall grocery anchored percentage to over 80% of AVR, importantly in a manner that unlocks huge value through yield in compression and cap rate.

Speaker Change: Following quarter end, we also closed on the acquisition of Fresh Market Shops in Hilton Head.

James M. Taylor: A value-added acquisition that builds on our critical mass in the fast-growing Coastal Carolinas market. Further, our forward acquisition pipeline continues to build to over $200 million with opportunities in our core markets to further cluster and leverage our best-in-class black, Finally, I'm pleased to report that we continue to demonstrate the strength of our balance sheet and the impact of our balanced strategy as we brought our debt dividend down to 5.6 times and have over $1.7 billion of liquidity to fund our business for the next several years. Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change: A value-added acquisition that builds on our critical mass in the fast-growing coastal Carolinas market.

Speaker Change: Further, our forward acquisition pipeline continues to build to over $200 million with opportunities in our core markets to further cluster and leverage our best-in-class platform.

Jim Taylor: Finally, I'm pleased to report that we continue to demonstrate the strength of our balance sheet in the impact of our balanced strategy, as we brought that to evade down to 5.6 times and have over 1.7 billion of liquidity to fund our business for the next several years.

Speaker Change: Finally, I am pleased to report that we continue to demonstrate the strength of our balance sheet and the impact of our balance strategy as we brought debt to EBITDA down to 5.6 times and have over $1.7 billion of liquidity to fund our business for the next several years.

Jim Taylor: In some, our balanced value added business plan not only continues to deliver on all fronts, but also positions us importantly for continued out performance.

Speaker Change: In sum, our balanced value-added business plan not only continues to deliver on all fronts, but also positions us, importantly, for continued outperformance.

Brian Finnegan: With that, I'll turn the call over to Brian for a more detailed discussion of our operating results. Brian. Thanks, Jim, and good morning, everyone. I'm pleased to report another quarter about standing operating results delivered by the BRICS-MORTEAM, as the man to be in our centers from a wide range of high quality operators shows no signs of slowing down. The well-capitalized tenants we are attracting and the rents we are achieving demonstrate not only the continued transformation of our portfolio, but the unmatched strengths of the BRICS-MORTEAM platform. Our leasing activity during the quarter allowed us to achieve records once again in overall anchor and small shop occupancy, with small shops growing sequentially for the 14th consecutive quarter to 90.8%.

Brian T. Finnegan: With that, I'll turn the call over to Brian for a more detailed discussion of our operating results. Thanks, Jim. And good morning, everyone.

Speaker Change: With that, I'll turn the call over to Brian for a more detailed discussion of our operating results.

Brian T. Finnegan: I'm pleased to report another quarter of outstanding operating results delivered by Brixmor, as demand to be in our centers from a wide range of high-quality operators shows no signs of slowing down. The well-capitalized tenants we are attracting and the rents we are achieving demonstrate not only the continued transformation of our portfolio but the unmatched strength of the Brixmor platform. Our leasing activity during the quarter allowed us to achieve records once again in overall anchor and small shop occupancy, with small shops growing sequentially for the 14th consecutive quarter to 90.8%.

Brian: Thanks, Jim, and good morning, everyone. I'm pleased to report another quarter of outstanding operating results delivered by the Brixmor team, as demand to be in our centers from a wide range of high-quality operators shows no signs of slowing down.

Brian T. Finnegan: Record occupancy levels are also enabling our team to push rental rates higher on both new and renewal leases, which was also evident in our results. As we achieved record renewal growth of 19% across 195 renewal leases executed in the quarter to pair with the over 50% growth in our comparable new leases, Jim highlighted. As encouraging as these results are, what's even more encouraging are the tenants we deliver. Tenants like Ulta, Home Goods, Rally House, Skechers, and Boot Barn, along with the company's first new lease with Wayfair in Greensboro, North Carolina, yet another online retailer that is recognizing the importance of having a physical store footprint.

Brian: The well-capitalized tenants we are attracting and the rents we are achieving demonstrate not only the continued transformation of our portfolio, but the unmatched strength of the Brixmor platform.

Brian: Our leasing activity during the quarter allowed us to achieve records once again in overall anchor and small shop occupancy.

Brian: with small shops growing sequentially for the 14th consecutive quarter to 90.8%.

Brian Finnegan: Record occupancy levels are also enabling our team to push rental rates higher in both new and renewal.

Brian: Record occupancy levels are also enabling our team to push rental rates higher in both new and renewal leases.

Brian Finnegan: and Lisa's, which was also evident in our results. As we achieved record renewal growth of 19% across 195 renewal leases executed in the quarter, to pair with the over 50% growth in our comparable new leases, which Jim highlighted. As encouraging as these results are, what's even more encouraging are the tenants we delivered them with. Tenants like Ulta, Home Goods, Rally House, Skechers, and Boot Barn, along with the company's first new lease with Wayfair and Greensboro in North Carolina, yet another online retailer that is recognizing the importance of having a physical store footprint. We also continue to grow our grocery anchor percentage during the quarter, adding another Sprouts Farmers Market to proactively backfill a cons location in Knoxville, Tennessee, at close to triple the in-place rent, demonstrating once again the opportunity that we have in our below market leases and the speed at which our team can capitalize on them.

Brian: Which was also evident in our results.

James M. Taylor: As we achieved record renewal growth of 19% across 195 renewal leases executed in the quarter to pair with the over 50% growth in our comparable new leases which Jim highlighted.

James M. Taylor: As encouraging as these results are, what's even more encouraging are the tenants we delivered them with.

James M. Taylor: Tenants like Ulta, Home Goods, Rally House, Skechers, and Boot Barn, along with the company's first new lease with Wayfair in Greensboro, North Carolina, yet another online retailer that is recognizing the importance of having a physical store footprint.

Brian T. Finnegan: We also continue to grow our grocery anchor percentage during the quarter, adding another Sprouts Farmers Market to proactively backfill a convenience store location in Knoxville, Tennessee at close to triple the in-place rent, demonstrating once again the opportunity that we have in our below-market leadership and the speed at which our team can capitalize. The convenience stores are among the few that are expected to come back to us at a time when box vacancy is at historic lows for the portfolio, and our team is well on its way to backfilling these spaces in markets like Raleigh and Houston with better tenants at higher rents.

James M. Taylor: We also continue to grow our grocery anchor percentage during the quarter, adding another Sprouts Farmers Market to proactively backfill a cons location in Knoxville, Tennessee, at close to triple the in-place rent, demonstrating once again the opportunity that we have in our below-market leases.

Brian Finnegan: The cons boxes are among the few that are expected to come back to us at a time when box vacancy is at historic lows for the portfolio, and our team is well on their way to backfill in these spaces and markets like Rally and Houston with better tenants at higher rents. Briefly on reinvestment, to expand on which I'm highlighted, we are very excited to bring on a hundred million of accretive, pre-least transformative redevelopment projects during the quarter led by the second phase at Pornor Lando and Block 59 in suburban Chicago. Phase two at Pornor Lando is coming online at the perfect time, as we prepare to open live at the point in partnership with the courtish companies later this fall, and Block 59 includes a great mix of well-capitalized restaurant tenants.

James M. Taylor: and the speed at which our team can capitalize on them.

James M. Taylor: The cons boxes are among the few that are expected to come back to us at a time when box vacancy is at historic lows for the portfolio, and our team is well on their way to backfilling these spaces in markets like Raleigh and Houston with better tenants at higher rents.

Brian T. Finnegan: Briefly on reinvestment, to expand on what Jim highlighted, we are very excited to bring on $100 million of accretive, pre-leased, transformative redevelopment projects during the quarter, led by the second phase at Port Orlando and Block 59 in suburban Chicago. Phase 2 of Point Orlando is coming online at the perfect time, as we prepare to open live at the Point in partnership with the Cordish Companies later this fall, and Block 59 includes a great mix of well-capitalized restaurant tenants, complementing the grocery-anchored component of the shopping center in one of the most desirable suburbs in the Chicago market.

James M. Taylor: Briefly on reinvestment, to expand on what Jim highlighted, we are very excited to bring on $100 million of accretive, pre-leased, transformative redevelopment projects during the quarter, led by the second phase at Port Orlando and Block 59 in suburban Chicago.

James M. Taylor: Phase 2 of Point Orlando is coming online at the perfect time, as we prepare to open live at the Point in partnership with the Cordish Companies later this fall, and Block 59 includes a great mix of well-capitalized restaurant tenants.

Brian Finnegan: Complimenting the grocery anchor component of the shopping center in one of the most desirable suburbs in the Chicago market. Looking forward, we remain encouraged by the depth of retailer demand and the forward and legal pipeline, which continues to grow despite the records we continue to set in occupancy. Our team continues to be laser focused on quickly converting this demand into open rent paying tenants, which is feeble highlight further gives us great visibility on future growth.

James M. Taylor: Complimenting the grocery anchor component of the shopping center in one of the most desirable suburbs in the Chicago market.

Steven T. Gallagher: Looking forward, we remain encouraged by the depth of retailer demand and the forwarding legal pipeline, which continues to grow despite the records we continue to set and occupy. Our team continues to be laser-focused on quickly converting this demand into open, rent-paying tenants, which, as Steve will highlight further, gives us great visibility on future growth. Before handing the call over to Steve, I would like to congratulate him, Helaine, and Kevin on their well-deserved promotions and thank Jim and the board for the opportunity to serve as president, as well as the broader Brixmor team for their continued support.

James M. Taylor: Our team continues to be laser-focused on quickly converting this demand into open, rent-paying tenants, which as Steve will highlight further, gives us great visibility on future growth.

Brian Finnegan: Before handing the call over to Steve, I would like to congratulate him, Elaine, and Kevin on their well-deserved promotions and thank Jim and the board for the opportunity to serve as president, as well as the broader Bricksmore team for their continued support. There has never been a better time to be a bricksmore, and I'm grateful to work with the best team in the business.

Speaker Change: Before handing the call over to Steve, I would like to congratulate him, Helaine, and Kevin on their well-deserved promotions, and thank Jim and the board for the opportunity to serve as president, as well as the broader Brixmor team for their continued support.

Steven T. Gallagher: There has never been a better time to be at Brixmor, and I'm grateful to work with the best team in the business. Thanks, Brian. I'm pleased to report on another very strong quarter and improved forward outlook, reflecting the strength of our business plan execution and the compelling growth opportunity within the Brixmor portfolio. Nareed FFO is $0.54 per share in the second quarter, driven by the same property NOI growth of 5.5%.

Speaker Change: There has never been a better time to be at Brixmor, and I'm grateful to work with the best team in the business. Steve?

Steve Gallagher: Steve? Thanks, Brian. I'm pleased to report on another very strong quarter and improve forward outlook, reflecting the strength of our business plan execution and the compelling growth opportunity within the Bricksmore portfolio. Navy Red SFO is 54 cents per share in the second quarter, driven by same property NOI growth of 5.5%. Base rent growth contributed 380 basis points to same property NOI growth this quarter, reflecting continued strong leasing spreads, growth and build occupancy, and improved retention rates. In addition, that expense reimbursements contributed 140 basis points driven by the growth and build occupancy, and its increase in real estate tax expense primarily due to reduced bills in our Chicago market.

Steven T. Gallagher: Base rent growth contributed 380 basis points to same property NOI growth this quarter, reflecting continued strong leasing spreads, growth in build occupancy, and improved retention. In addition, Net Expense Reimbursements contributed 140 basis points driven by the growth in Build October and a decrease in real estate tax expense primarily due to reduced bills in our Chicago market. Revenues deemed uncollectible contributed 20 basis points to the same property NOI group due to higher collection rates and lower tenant disruption.

Steve: Thanks, Brian . I'm pleased to report on another very strong quarter and improved forward outlook reflecting the strength of our business plan execution and the compelling growth opportunity within the Brixmor portfolio.

Speaker Change: The NARED FFO is $0.54 per share in the second quarter, driven by same property NOI growth of 5.5%. Base rent growth contributed 380 basis points to same property NOI growth this quarter, reflecting continued strong leasing spreads, growth in build occupancy, and improved retention rates.

Steve: and a decrease in real estate tax expense primarily due to reduced bills in our Chicago market. Revenues deemed uncollectible contributed 20 basis points to the same property NOI group due to higher collection rates and lower tenant disruption.

Steve Gallagher: Revenue seems uncollectable, contributed 20 basis points to same property NOI growth due to higher collection rates and lower tenant disrupts. We are very pleased with the continued execution by the entire Brixmor team as we end as a quarter with a 400 basis point spread between least and build occupancy. And our assigned but not commenced pool totaled 65 million, which includes 55 million of net new rent. The size of the pool decreased only 3 million, despite commencing approximately 17 million of annualized base rent in the quarter. We expect a vast majority of ABR and assigned but not commenced pool of the commenced over the next 18 months.

Steven T. Gallagher: We are very pleased with the continued execution by the entire Brixmor team as we ended the quarter with a 400-basis point spread between leased and built occupancy. And our Assigned But Not Commenced pool totaled $65 million, which included $55 million of net new rent. The size of the pool decreased only $3 million, despite commencing approximately $17 million of annualized base rent in the quarter.

Steve: We are very pleased with the continued execution by the entire Brixmor team as we end the quarter with a 400 basis point spread between lease and build occupancy.

Steve: And our signed but not commenced pool totaled $65 million, which includes...

Operator: We expect the vast majority of the ABR and Assigned But Not Commenced pool to commence over the next 18 months. From a balance sheet perspective, we repaid $300 million of our 3.65% bonds that matured in June 2024 with the proceeds from our January bond offering. At June 30th, we had total liquidity of $1.7 billion, and our debt to EBITDA on a current quarter annualized basis was 5.6 times, leaving us well positioned to execute on our business plan and with the flexibility to opportunistically access the capital market.

Steve Gallagher: From a balance sheet perspective, we paid 300 million of our 3.65% bonds and matured in June 2024 with the proceeds from our January bond offering. At June 30th, we had total liquidity of 1.7 billion, and our debt to EBITDA on a current quarter annualized basis was 5.6 times, leaving us well positioned to execute on our business plan and with a select ability to opportunistically access the capital markets. In terms of our forward outlook, given the continued strength and the portfolio, we have increased our same property and a wide growth to a range of 4.25 to 5%.

Steve: 5% bonds that matured in June 2024 with the proceeds from our January bond offering.

Steve: At June 30th, we had total liquidity of $1.7 billion and our debt to EBITDA on a current quarter annualized basis was 5.6 times, leaving us well positioned to execute on our business plan and with the flexibility to opportunistically access the capital markets.

Operator: In terms of our forward outlook, given the continued strength in the portfolio, we have increased our same property NOI growth to a range of 4.25 to 5 percent, comprised of a 425 to 475 basis point contribution from base rent, as commencements from this line but not the commence pool accelerate base rent growth in the second half of the year. Additionally, the improvements to the credit quality of our tenants and strong payment trends continue to drive outperformance and revenues deemed uncollectible.

Steve: In terms of our forward outlook, given the continued strength in the portfolio, we have increased our same property NOI growth to a range of 4.25 to 5 percent.

Steve Gallagher: Comprised of a 425 to 475 basis point contribution from base rent, as commenced from the sign but not commenced pool of February's base rent growth in the second half of the year. Additionally, the improvements to the credit quality of our tenants and strong payment trends continue to drive outperformance and revenues deemed uncollectable. We now expect revenues deemed uncollectable to end the year at 50 to 75 basis points of total revenues versus deprived range of 75 to 110 basis points. In conjunction with the increase in our same property and a wide expectation, we have raised our guidance for 2024 and a read FFO to a range of $2.11 to $2.14 per share.

Steve: Comprised of a 425 to 475 basis point contribution from base rent as commencements from the time but not commence pool accelerates base rent growth in the second half of the year.

Operator: In conjunction with the increase in our same property NOI expectation, we have raised our guidance for 2024 NAREED FFO to a range of $2.11 to $2.14 per share. I would like to thank Jim and the board for this CFO opportunity, as well as the larger Brixmor team who supported me along the way. And with that, I'll turn the call over to the operator for Q&A. Thank you. At this time, we'll be conducting a question and answer session.

Steve: In conjunction with the increase in our same property NOI expectation, we have raised our guidance for 2024 NAREED FFO to a range of $2.11 to $2.14 per share.

Steve Gallagher: I would like to thank Jim and the board for the CFO opportunity, as well as the larger Bixmark team who supported me along the way.

James M. Taylor: I would like to thank Jim and the board for this CFO opportunity, as well as the larger Brixmor team who supported me along the way. And with that, I'll turn the call over to the operator for Q&A.

Operator: And with that, I'll turn the call over to the operator for Q&A. Thank you. At this time, we'll be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone key path. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, maybe necessary to pick up your hands at before pressing the star keys. One moment please, while we poll for your questions.

Operator: If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your question. Our first questions come from the line of Todd Thomas with KeyBank Capital Markets. Please proceed with your question. Hi, thanks.

Thomas: Our first questions come from the line of Thomas with Key Bank Capital Markets. Please proceed with your questions. Hi, thanks.

Speaker Change: Our first questions come from the line of Todd Thomas with KeyBank Capital Markets. Please proceed with your questions.

Todd Michael Thomas: Good morning, and congratulations to everyone on their promotions. First question, I just wanted to ask about acquisitions. I'm wondering if there's any change in view around acquisitions and and the company's position toward capital recycling and or capital raising, at all, as we move forward, just given some of the changes, you know, in the C-suite and or given, you know, the improvement in the company's cost of capital. More honestly, I think Todd, Jim, I think the big change has been, honestly, the opportunities that we're seeing.

Todd Thomas: Good morning, and congrats to everyone on their promotions. First question: I just wanted to ask about acquisitions. I'm wondering if there's any change in view around acquisitions and the company's position toward capital recycling and or capital raising at all here, as we move forward, just either given some of the changes in the C-suite and or given the improvement in the company's cost of capital more recently.

Todd Michael Thomas: Hi, thanks. Good morning and congrats to everyone on their promotions.

Todd Michael Thomas: First question, I just wanted to ask about acquisitions. I'm wondering if there's any change in view around acquisitions and the company's position toward capital recycling and or capital raising.

Speaker Change: at all here as we move forward, just either given some of the changes, you know, in the C-suite and or given, you know, the improvement in the company's cost of capital more recently.

Todd Michael Thomas: So we're always going to be opportunistic and direct our activity to those that we think can create huge value for the company. And we're pleased with what we're seeing out there in the transaction market, particularly in our core markets, where we've successfully clustered investments. For example, we mentioned the acquisition of the fresh market in Hilton Head, which further grows our presence in that coastal Carolina market. So, you know, we're pleased with the opportunities that we're seeing and our ability to act.

Jim Taylor: I think, Todd, Jim, I think that big change has been the opportunities that we're seeing. So we're always going to be opportunistic and direct our activity to those that we think can create huge value for the company. And we're pleased with what we're seeing out there in the transaction market, particularly in our core markets where we've successfully clustered investments.

Speaker Change: You know, I think, Todd, Jim, I think the big change has been, honestly, the opportunities that we're seeing.

Todd Michael Thomas: So we're always going to be opportunistic and direct our activity to those.

Todd Michael Thomas: that we think can create huge value for the company and we're pleased

Speaker Change: with what we're seeing out there in the transaction market, particularly in our core markets where we've

Jim Taylor: For example, we mentioned the acquisition of the Fresh Market in Hilton Head, which further grows our presence in that Coastal Carolina market. So we're pleased with the opportunities that we're seeing, and our ability to actually thank you, Donna.

Speaker Change: Successfully Clustered Investments, for example, we mentioned.

Speaker Change: The Acquisition of the Fresh Market in Hilton Head, which further grows our presence in that Coastal Carolina market.

Speaker Change: So, you know, we're pleased with the opportunities that we're seeing and our ability to execute on them.

Jim Taylor: Do you anticipate being a net acquirer in the second half of the year, and can you talk about sort of the going-in yields that you're seeing for acquisitions that you're underwriting today? Yeah, look, as Jim mentioned, we're always going to be opportunistic with respect to acquisitions, and we're certainly seeing a much more active market over the last few months. You know, frankly, what's most interesting about the transactions market today is that sellers really appear to be more interested and kind of quiet direct conversations with folks like Brixmor that aren't relying upon external joint venture capital or, frankly, even the debt market to source deals or finance deals.

Todd Michael Thomas: Do you anticipate being a net acquirer in the second half of the year? And can you talk about, you know, the going in yields that you're seeing for acquisitions that you're underwriting today? Yeah, look, as Jim mentioned, we're always going to be opportunistic with respect.

Speaker Change: Do you anticipate being a net acquirer in the second half of the year? And can you talk about, you know, sort of the going in yields that you that you're seeing for for acquisitions that you're underwriting today?

James M. Taylor: Acquisitions, and we're certainly seeing a much more active market over the last few months. You know, frankly, what's most interesting about the transactions market today is that sellers really appear to be more interested in kind of quiet, direct conversations with folks like Brixmor that aren't relying upon external joint venture capital or frankly even the debt market. Transcripts provided by Transcription Outsourcing, LLC, on acquisitions.

Speaker Change: Yeah, look, as Jim mentioned, we're always going to be opportunistic with respect to acquisitions. And we're certainly seeing a much more active market over the last few months.

Speaker Change: And, you know, frankly, what's most interesting about the transaction, the transactions market today, is that sellers really appear to be more interested in kind of quiet, direct conversations with folks like Brixmor, that aren't relying upon external joint venture capital, or frankly, even the debt market.

Jim Taylor: So this ramp activity that you're seeing us with a couple of acquisitions, we've made this year really has led to a more active pipeline on the acquisition side. So we do expect to be a bit more acquisitive here in the second half. But, as Jim mentioned, over the years, we will always be balanced into this plan with respect to our capital allocation on acquisitions. With respect to yields, you know, you're to date the yields where we bought us in the high sixes. As we look at our four opportunities from a going in perspective, they are in the same yield, so that high six cap rate range.

Speaker Change: to source deals or finance deals.

Speaker Change: So this ramped activity that you're seeing us with a couple of acquisitions we've made this year really has leading to a more active pipeline on the acquisition side. So we do expect to be.

James M. Taylor: A bit more acquisitive here in the second half, but as Jim's mentioned over the years, we will always be balanced and disciplined with respect to our capital allocation.

Brian T. Finnegan: With respect to yields, you know, year to date, the yields for what we've bought are in the high sixes. As we look at our forward opportunities, from a going in perspective, they are in the same yield, so that high six cap rate range. But also, when you think about our cap recycling, what's important to realize is we are a hold IRR type investor. So when we look at assets we've sold, we're seeing a pretty big spread between those IRRs of what we're selling and the IRRs for the assets that we're acquiring. Okay, that's helpful.

James M. Taylor: on acquisitions.

James M. Taylor: With respect to yields, year-to-date, the yields for what we bought is in the high sixes as we look at our forward opportunities.

Todd Thomas: But also when you think about our cap recycling, what's important to realize is we are a whole IRR type investors. So when we look at assets, we sold, we're seeing a pretty big spread between those IRRs of what we're selling and the IRRs for the assets that we're acquiring. Okay, that's helpful.

Speaker Change: We're going in perspective. They are in the same yield so that high six cap rate range But also when you think about our cap recycling what's important to realize is we are a whole IRR type investor So we look at assets we've sold We're seeing a pretty big spread between those IRRs of what we're selling in the IRRs for the assets that we're acquiring

Steven T. Gallagher: And Steve, real quick, in terms of the net recoveries related to the lower property taxes in the quarter that you mentioned, how much of that was, you know, sort of one-time in nature versus what might be more recurring as we think about lower property taxes, potentially going forward? Yeah, you know, I think when you think about the total impact of the quarter, about a million of it related sort of the way Chicago bills are in arrears related to 2023.

Steve Gallagher: And Steve, real quick, in terms of the net recoveries related to the lower property taxes in the quarter that you mentioned, how much of that was, you know, sort of one time in nature versus what might be more recurring, you know, as we think about lower property taxes potentially going forward. Yeah, you know, I think when you look at thinking about the total impact of the quarter, about a million of it related sort of the way Chicago bills is in a rears related to 2023.

Speaker Change: Okay, that's helpful. And Steve, real quick, in terms of the net recoveries related to the lower property taxes in the quarter that you mentioned, how much of that was, you know, sort of one time in nature versus what might be more recurring, you know, as we think about lower property taxes potentially going forward?

Steven T. Gallagher: So that's sort of the non-recurring aspect, but about a half a million will recur in a year and then recur going forward. And I think the important thing to remember with that is, ultimately, it's lowering our occupancy costs for our tenants and will allow us to push rent on those renewals. Okay, that's helpful. Half a million in the year or half a million in the quarter? So it'll be on an annualized basis. Half a million in the year.

Steve: Yeah, you know, I think when you think about the total impact of the quarter, about a million of it related sort of the way Chicago bills is in arrears related to 2023. So that's sort of the non-recurring aspect, but about a half a million will recur in a year and then recur going forward. And I think the important thing to remember with that is ultimately it's lowering our occupancy cost to our tenants and will allow us to push rent on those renewals in the future.

Todd Thomas: So that's sort of a non-recurring aspect. But about a half a million will recur in a year and then recur going forward. And I think the important thing to remember with that is ultimately it's lowering our occupancy cost to our tenants and will allow us to push rent on those renewals in the future. Okay, that's helpful. Half a million in the year or half a million in the quarter. So it'll be a million on an annualized basis. Half a million in the year. Okay, so all right, got it. Thank you.

Speaker Change: Okay, that's helpful. Half a million in the year or half a million in the quarter? So it'll be on an annualized basis. Half a million in the year. Okay. Yep. All right. Got it. Thank you.

Todd Michael Thomas: Okay. Yep. All right. Got it.

Operator: Yeah, Todd, the only other thing I would highlight there is that we're also benefiting from higher recovery rates as our occupancy, our billed occupancy moves up. So while we did benefit in the quarter from the favorable tax assessment, you should expect us to continue to drive and build occupancy. Thank you.

Jim Taylor: Yeah, Todd, the only other thing I would highlight there is, you know, we're benefiting also from higher recovery rates as our occupancy, our billed occupancy, moves up. So, while we did benefit in the quarter from the favorable tax assessments, you should expect us, as we continue to drive billed occupancy recovery more and generate better margins.

Speaker Change: Yeah, Todd, the only other thing I would highlight there is, you know, we're benefiting also from higher recovery rates as our occupancy, our billed occupancy moves up. So while we did benefit in the quarter from the favorable tax assessments,

Speaker Change: You should expect us as we continue to drive, build occupancy, recover more, and generate better margins.

Unknown Executive: Thank you.

Dori Lynn Kesten: Our next questions come from the line of Dori Kesten with Wells Fargo. Please proceed with your question. Thanks. Good morning.

Dori Kesten: Our next question has come from the line of Dory Kestin with Wells Fargo. Please proceed with your questions. Thanks. Good morning.

Speaker Change: Thank you. Our next questions come from the line of Dori Kesten with Wells Fargo. Please proceed with your questions.

Brian T. Finnegan: And again, congrats on the promotion. Can you give us a sense of any incremental DNA that may come along with it? On balance, we don't expect incremental GNA as we look for other opportunities. Okay, then on cons and big lots, what kind of retailers have shown interest in those spaces? And where may rent spreads pencil out, and just anything irregular to note about potential TI or timing to backfill? Dori, hey, this is Brian.

Unknown Executive: And again, congratulations on the promotion. Can you give us a sense of any incremental GNA that may come along with those? On balance, we don't expect incremental DNA as we look for other efficiencies.

Dori Lynn Kesten: Thanks. Good morning. And again, congrats on the promotion. Can you give us a sense of any incremental changes in GNA that may come along with those?

Speaker Change: On balance, we don't expect incremental DNA as we look for other efficiencies.

Brian Finnegan: Then on cons and big lots, what kind of retailers have shown interest in those spaces and where may have rent spreads pencil out and just anything irregular to note about potential PI or timing to back sell?

Speaker Change: Okay, then on cons and big lots, what kind of retailers have shown interest in those spaces and where may rent spreads pencil out and just anything irregular to note about potential TI or timing to backfill?

Brian T. Finnegan: Just as it relates to the cons, first, it's a pretty low exposure for us, about 30 basis points. And as I talked about, these boxes may come back to us in the tightest supply environment that we've seen. And the types of tenants that we're backfilling them with, the types of tenants that continue to expand in the open air space, like those in the value apparel segment and especially the grocery segment, like the first cons that we proactively took back where we were able to put sprouts in and triple the rent. As it relates to the big lots rents, in particular, those rents are $7, just below $8 a foot.

Brian Finnegan: Dori, hey, this is Brian. Just as it relates to Khan's first, it's a pretty low exposure for us, about 30 basis points. And as I talked about, these boxes may come back to us in the tightest supply environment that we've seen. And the types of tenants that we're backfilling them with, the types of tenants that continue to expand in the open air space like those in the value-parallel segments, sorry, in especially grocery segments, like the first cons that we proactively took back where we were able to put Sprouts in and triple the rent. As it relates to the big lots, rents in particular, those rents are $7, just below $8 a foot. We've been signing those, we've been signing anchor leases around $16 a foot over the past year.

Speaker Change: Dori, hey, this is Brian . Just as it relates to the cons first, it's a pretty low exposure for us about

Brian: So the bottom line is that I think we have done 30 basis points. And as I talked about, these boxes may come back to us in the tightest supply environment that we've seen. And the types of tenants that we're back filling them with, or the types of tenants that

Brian: You know, continue to expand in the open air space like those in the value apparel segment, and especially grocery segment, like the first cons that we proactively took back where we were able to put sprouts in and triple the rent.

Brian: As it relates to the big lots rents in particular, those rents are $7, just below $8 a foot. We've been signing anchor leases around $16 a foot over the past year.

Brian T. Finnegan: We've been signing anchor leases for around $16 a foot over the past year, and you can expect a similar level of upside, maybe not double, but we got a significant amount as it relates to those big lot spaces. So we feel very encouraged as, again, we're not getting a lot of box spaces back, and it's the tightest box supply environment that we've seen in terms of our ability to quickly address them to the extent that we get a few boxes back this year. Okay, thank you.

Brian Finnegan: And you can expect a similar level of upside, maybe not double, but particularly we got a significant amount as it relates to those big lots of bases. So we feel very encouraged, as again, we're not going to get a lot of box spaces back. And it's the tightest box supply environment that we've seen in terms of our ability to quickly address them to the extent we get a few boxes back this year.

Brian: And you can expect a similar level of upside, maybe not double, but particularly we got a significant amount as it relates to those big lot spaces.

Brian: So we feel very encouraged as, again, we're not getting a lot of box spaces back and it's the tightest box supply environment that we've seen in terms of our ability to quickly address them to the extent we get a few boxes back this year.

Unknown Executive: All right.

Craig Allen Mailman: Thank you. Our next question has come from the line of Craig Mailman with Citi. Please proceed with your question. Good morning and congratulations again to everyone on the promotions.

Craig Mailman: Our next question has come from the line of Craig Malaman with City. Please proceed with your questions. Hey, good morning. Thanks, grads. Again, everyone on the promotions. Jim, I just want to go back to your kind of the end of Todd's questioning on NLI margins there. I know you guys picked up to about 76%. But you guys are getting every quarter; it seems like another record on least occupancy for anchors and small shop. Just as the portfolio continues to grow, you guys push through some fixed cam; you get some better outcomes on tax appeals. Where do you think NLI margins should shake out for your portfolio, you know, over the next year or two as the still pipeline commences?

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question has come from the line of Craig Mailman with Citi. Please proceed with your questions.

Craig Allen Mailman: Hey, good morning and congrats again, everyone, on the promotions.

James M. Taylor: Jim, just want to go back to your kind of the end of Todd's questioning on NOI margins. I know you guys picked up to about 76%. But you guys are getting, you know, every quarter it seems like another record on the least occupancy for anchors and small shops. Just as the portfolio continues to grow, you guys push through some fixed-kim, and you get some, you know, better outcomes on tax appeals. Where do you think NO You know, over the next year or two as this snow pipeline commences, what's a good normalized level to think about?

Craig Allen Mailman: Unknown Speaker Jim, just want to go back to your kind of the end of Todd's questioning on NOI margins there. I know you guys picked up to about 76%, but you guys are getting, you know, every quarter it seems like another record on, on least occupancy for anchors and small shop.

Speaker Change: Just as the portfolio continues to grow, you guys push through some Fix Kim, you get some, you know, better outcomes on tax appeals.

Speaker Change: Where do you think NOI margins should shake out for your portfolio over the next year or two as this snow pipeline commences? What's a good, normalized level to think about? Rather than giving you specific guidance on a margin, I think we've got a few hundred basis points of reason.

Jim Taylor: Like, what's a good normalized level to think about? Rather than giving you specific guidance on a margin, I think we've got a few hundred basis points of room. And, you know, I think you're going to see us continue to realize how to see point out as our build occupancy grows because there is a 400 basis point difference between least and build. So, as that is that occupancy delivers, obviously we're going to be recovering a higher and higher percentage, which, as you also mentioned, is augmented by the increased penetration of fixed cam that we have in the portfolio.

James M. Taylor: Rather than giving you specific guidance on a margin, I think we've got a few hundred basis points of room. And, you know, I think you're going to see us continue to realize that, as you point out, as our billed occupancy grows, because there is a 400 basis point difference between leased and billed. So as that occupancy delivers, obviously, we're going to be recovering a higher and higher percentage, which, as you also mentioned, is augmented by the increased penetration of fixed CAM that we have in the portfolio.

Speaker Change: We're in.

Speaker Change: And, you know, I think you're going to see us continue to realize that, as you point out, as our bill documency grows, because there is a 400 basis point difference between leased and billed.

Speaker Change: So as that occupancy delivers, obviously we're going to be recovering a higher and higher percentage, which as you also mentioned, is augmented by the increased penetration of FixCam that we have in the portfolio.

Jim Taylor: So I do expect to see continued growth in margin. I think we have more than a few hundred basis points of room, but would rather not give you a specific number for guidance.

James M. Taylor: So I do expect to see continued growth and margin. I think we have more than a few hundred basis points of room. I'd rather not give you a specific number for guidance. And Craig, I would just add our team has been very intentional in terms of improving CAM clauses in our leases, eliminating CAM caps, and eliminating carve-outs. You mentioned fixed CAM.

Speaker Change: So, I do expect to see continued growth and margin. I think we have more than a few hundred basis points of room.

Brian Finnegan: Craig, I would just add that our team has been very intentional in terms of improving CAM clauses in our leases, eliminating CAM caps, and eliminating carve outs. You mentioned fixed cam; we've been very intentional with that as well. Where we've been deploying that across the portfolio, we have a good understanding of where the expense trajectory is. We've been growing that at 4% across both small shop and anchors. So, in addition to everything we're doing on the base ramp front, our teams have been very intentional in terms of improving those cam clauses, which is really helping with margins as well.

Craig Allen Mailman: I'd rather not give you a specific number for guidance. And Craig, I would just add, our team has been very intentional in terms of improving CAM clauses in our leases.

Brian T. Finnegan: We've been very intentional with that as well. Where we've been deploying it across the portfolio, we have a good understanding of where the expense trajectory is at those properties. We've been growing that at 4% across both small shops and anchors. So, in addition to everything we're doing on the base rent front, our team's been very intentional in terms of improving those CAM clauses, which is really helping with margins as well. And Craig, the last thing I would add is that we look at acquisitions. You know, when we think about acquisitions, we do buy from a lot of folks who are not large institutional owners like we are, and they don't have the ability to hit some of those margin topics that Brian's hitting on. We think that's also a piece of the growth. The Bulletproof Executive 2013, That's helpful. Then maybe you should stick on the acquisition side. I don't know Mark or Jim.

Speaker Change: Eliminating Cam Caps, Eliminating Car Valves.

Speaker Change: You mentioned fixed GAM. We've been very intentional with that as well. Where we've been deploying that across the portfolio, we've been, we have a good understanding of where the expense trajectory is at those.

Speaker Change: We've been growing that at 4% across both small shop and anchors. So, in addition to everything we're doing on the base rent front, our team has been very intentional in terms of improving those CAM clauses, which is really helping with margins as well.

Jim Taylor: Craig, the last thing I would add is we look at acquisitions as a whole. You know, when we think about acquisitions, we do buy from a lot of folks who are not large and stucial owner like we are and they don't have the ability to hit some of those margin topics that Brian's sitting on. We think that's also a piece of the growth and deals that we buy on the acquisition side. That's helpful then.

Speaker Change: And Craig, the last thing I would add is we look at acquisitions, this whole...

Craig Allen Mailman: You know when we think about acquisitions we do buy from a lot of folks who are not large institutional owners like we are and they don't have the ability to hit some of those margin topics that Brian's hitting on. We think that's also a piece of the growth in deals that we buy on the acquisition side.

Craig Allen Mailman: It sounds like more of the kind of pipeline you guys have gotten recently is off the market or, you know, softly marketed deals. Is that, am I reading into that correctly? You guys are kind of less of a buyer for fully marketed deals. And that's where you're going to get kind of the better opportunities to not compete with maybe some of the high net worth guys or other people who are just, you know, all cash buyers and have been paying kind of bigger prices more recently.

Jim Taylor: Maybe stick on the acquisition side on the mark or gym. It sounds like more of the kind of pipeline you guys have gotten recently is off market or you know, softly marketed deals. Is that am I reading into that correctly? You guys are kind of less of the buyer for the fully marketed deals, and that's where you're going to get kind of the better opportunities to not compete with maybe some of the hind net worth guys or other people who are just all cash buyers and have been paying kind of bigger prices more recently. You know, we continue to see a mix of deals marketed and off market.

Speaker Change: That's helpful, then.

Speaker Change: May be sticking on the acquisition side, I don't know, Mark or Jim.

Speaker Change: It sounds like more of the kind of pipeline you guys have gotten recently is off-market or...

Speaker Change: Softly marketed deals? Am I reading into that correctly, you guys are kind of less of the buyer for the fully marketed deals and that's where you're gonna get kinda the better opportunities to not compete with maybe some of the high net work guys or other people who are just all cash buyers?

Craig Allen Mailman: You know, we continue to see a mix of deals marketed and off-market. I think Mark's point, though, is that we are a preferred buyer in this capital markets environment, given our liquidity and given our presence in the markets that we're focused on. And that gives us an advantage position. And we're also pleased by the growth in the overall pipeline of opportunities that we're seeing that meet our return. Great, thank you. Thank you.

Speaker Change: have been paying kind of bigger prices more recently.

Jim Taylor: I think Mark's point, though, is that we are a preferred buyer in this capital markets environment, given our liquidity, given our presence in the markets that we're focused on. And that gives us an advantage position. And we're also pleased by the just growth and the overall pipeline of opportunities that we're seeing that meet our return hurdles.

Speaker Change: You know, we continue to see a mix of deals marketed and off-market. I think Mark's point, though, is that we are a preferred buyer in this capital markets environment given our liquidity, given our presence in the markets that we're focused on.

Mark: And that gives us an advantage position. And we're also pleased by the just growth in the overall pipeline of opportunities that we're seeing that meet our return hurdles.

Unknown Executive: Great.

Greg Michael McGinniss: Our next question has come from the line of Greg McGinniss with Scotiabank. Please proceed with your question. Hey, good morning.

Greg Mcginniss: Our next question has come from the line of Greg McGinnis with Scotia Bank. Please proceed with your questions. Hey, good morning. So leasing obviously remains quite healthy, but there are certain tenant categories facing some pressure, like home goods and art, pet and office supply. Are you still renewing tenants in that category, or how are you handling those expectations when they come up?

Speaker Change: Great, thank you. You bet.

Speaker Change: Thank you. Our next questions come from the line of Greg McGinniss with Scotiabank. Please proceed with your questions.

Brian T. Finnegan: So leasing obviously remains quite healthy, but there are certain tenant categories facing some pressure, like home goods and pet supplies. Are you still renewing tenants in that category, or how are you handling those expirations when they come in? Craig, hey, this is Brian.

Greg McGinnis: Hey, good morning. So leasing obviously remains quite healthy, but there are certain tenant categories facing some pressure like home goods and pet and office supply. Are you still renewing tenants in that category or how are you handling those expirations when they come up?

Brian Finnegan: Greg, hey, this is Brian. I mean, we look at these on an individual basis. Our, for instance, our office supply exposure overall has dropped considerably. There still are office supply locations that are doing very well that are four-wall either to positive and our portfolio. So some of those do renew, but you think about some of the staples locations in particular that we've taken back proactively and backfill with the likes of Ross and grocers and other folks that we've been doing a lot of business with. So it's really going to be center specific. We've got a number of our pet store locations that continue to do very well.

Brian T. Finnegan: I mean, we look at these on an individual basis. For instance, our office supply exposure overall has dropped considerably. There are still office supply locations that are doing very well that are four-wall EBITDA positive in our portfolio. So some of those do renew, but you think about some of the grocery locations, in particular, that we've taken back proactively and backfilled with the likes of Ross and Grocers and other folks that we've been doing a lot of business with. So it's really going to be center specific.

Greg McGinnis: Unknown Speaker Greg, hey, this is Brian . I mean, we look at these on an individual basis. They are

Craig Allen Mailman: For instance, our office supply exposure overall has dropped considerably. There still are office supply locations that are doing very well that are four wall EBITDA positive in our portfolio. So some of those do renew. But you think about some of the staples locations in.

Craig Allen Mailman: This is a report that we have taken back proactively and backfilled with the likes of Ross and Grocers and other folks.

Craig Allen Mailman: that we've been doing a lot of business with. So it's really gonna be center specific. We've got.

Brian T. Finnegan: We've got a number of our pet store locations that continue to do very well, and I think in this environment, we're going to continue to be opportunistic where we see weaker tenants in any category to be able to upgrade those spaces at higher rents. And then, particularly on the anchor side, where we do have a lot of demand, we also have a very low rent basis in terms of what's expiring over the next few years.

Brian Finnegan: And I think in this environment, we're going to continue to be opportunistic where we see weaker tenants, really in any category, to be able to upgrade those spaces at higher rents. And then, particularly on the anchor side where we do have a lot of demand, we also have a very low rent basis in terms of what's expiring over the next few years. We've got rents on those spaces expiring at close to nine bucks, and we're signing them at 16. So it really depends on the situation. But where we do see weaker tenants in any category, we're going to use the opportunity to upgrade.

Craig Allen Mailman: A number of our pet store locations that continue to do.

Craig Allen Mailman: very well. And I think in this environment, we're going to continue to be opportunistic, where we see weaker tenants really in any category to be able to upgrade those spaces at higher rents. And then particularly on the anchor side, where we do have a lot of demand, we also have a very low rent basis in terms of

Brian T. Finnegan: We've got rents on those spaces expiring at close to nine bucks, and we're signing them at 16. So it really depends on the situation, but where we do see weaker tenants in any category, we're going to use the opportunity to upgrade. And so for specific boxes, how do you go about evaluating their productivity? Do you get sales information from them or just input your data? How are you going about kind of deciding if they're a higher-risk location or not that you might need to be backfilling or proactively filling? We get both.

Craig Allen Mailman: And I think we got to the bottom of what's expiring over the next few years. We've got rents on those spaces expiring at close to $9, and we're signing them at $16. So it really depends on the situation. But where we do see weaker tenants in any category, we're going to use the opportunity

Brian Finnegan: And so for specific boxes, how do you go about evaluating kind of their productivity? Do you get sales information from them or place or data? How are you going about kind of deciding if they're a higher risk location or not that you might need to be backfilling or correctively filling? We get both. I mean, we get sales for the majority of the portfolio, and we do get traffic for all our tenants. That has certainly helped us be a lot smarter. The other thing is we've got great relationships across our platform, particularly on the national account side where, even where we don't get reported sales, we'll often get a number of those volumes in the conversations with our tenant, and that's conversations with our tenants.

Speaker Change: And so for specific boxes, how do you go about evaluating kind of their productivity? Do you get sales information from them or place your data? How are you going about kind of deciding if

Speaker Change: there a higher risk location or not that you might need to be backfilling more proactively.

Brian T. Finnegan: I mean, we get sales for the majority of the portfolio, and we do get traffic for all our tenants. That has certainly helped us be a lot smarter. The other thing is we've got great relationships across our platform, particularly on the national account side, where even where we don't get reported sales, we'll often get a number of those volumes in the conversations with our tenants, and that's because of the trust our team's built.

Speaker Change: We get both. I mean, we get sales for the majority of the portfolio, and we do get traffic for all our tenants. That has certainly helped us be a lot smarter. The other thing is we've got great relationships across our platform.

Speaker Change: particularly on the national account side where even where we don't get reported sales

Speaker Change: will often get a number of those volumes in the conversations with our tenants, and that's because of the trust our team's built. So we do utilize the tools that you're talking about, whether that's Placer, whether that's other tools related to traffic, but we also get sales from the bulk of our tenants. We're also adding sales reporting.

Brian Finnegan: And that's because of the trust our teams built. So we do utilize the tools that you're talking about, whether that's Place or whether that's other tools related to traffic. But we also get sales from the bulk of our tenants. We're also adding sales reporting when we have renewals coming up in some leases where we're not getting that today. And then again, the relationships that we have with these retailers really shows the trust we're able to get some of those sales volumes. We're in a great supply-to-man environment that allows us to drive the optimal outcome for space that becomes due, and you see it in the spreads; you see it in the renewal spreads as well as the new leasing spreads.

Brian T. Finnegan: So we do utilize the tools that you're talking about, whether that's Placer, whether that's other tools related to traffic, but we also get sales from the bulk of our tenants. We're also adding sales reporting when we have renewals coming up in leases where we're not getting that today. And then again, the relationships that we have with these retailers really show the trust where we're able to get some of those sales volumes. Unknown Speaker Yeah, you know, we're, Go ahead. Now, please.

Speaker Change: When we have renewals coming up in leases where we're not getting that today. And then again, the relationships that we have with these retailers really shows the trust where we're able to get some of those sales volumes as well.

Speaker Change: Unknown Speaker Go ahead.

James M. Taylor: No, I you know, we're in a great supply and demand environment that allows us to drive the optimal outcome for space as it comes due. And you see it in the spreads; you see it in the renewal spreads, as well as the new leasing spread. So we're not only taking this opportunity to upgrade the portfolio and continue to upgrade tenant quality, but we're also using it to drive true organic growth. And it's an, Thanks.

Speaker Change: Now, please.

Speaker Change: We're in a great supply-demand environment that allows us to drive the optimal outcome for space as it comes due. And you see it in the spreads. You see it in the renewal spreads.

Brian Finnegan: So we're not only taking this opportunity to upgrade the portfolio and continue to upgrade tenant quality, we're also using it to drive true organic growth, and it's in the numbers.

Speaker Change: As well as a new leasing spread. So we're not only taking this opportunity to upgrade the portfolio and continue to upgrade tenant quality, we're also using it to drive true organic growth. And it's in the numbers.

Brian Finnegan: Okay, thanks, and just one final point on that is Brian. How many of the stores, or what percentage of the big box stores, are you getting individual store sales on? We get sales from about 70% of the portfolio today; we get it for almost all of our grocers, and that's 70% across all size ranges. So I don't have the particular anchor number today, but again that percentage of tenants that are reporting sales. It has improved as we've been able to add sales reporting as renewals come up. So we've been very intentional about that, and I expect that to continue to grow.

Brian T. Finnegan: And just one final point on that is, Brian, how many of the stores or what percentage of the big box stores are you getting individual store sales? We get sales from about 70% of the portfolio today. We get it for almost all of our grocers, and that's 70% across all size ranges.

Speaker Change: Okay, thanks. And just one final point on that is, Brian , how many of the stores or what percentage of the big box stores are you getting individual store sales on?

Brian: We get sales from about 70% of the portfolio today. We get it for almost all of our grocers, and that's 70% across.

Brian T. Finnegan: So I don't have the particular anchor number today, but again, that percentage of tenants that are reporting sales has improved as we've been able to add sales reporting and as renewals come up. So we've been very intentional about that.

Brian: all size ranges. So I don't have the particular anchor number today, but again, that percentage of tenants that are reporting sales has improved as we've been able to add sales reporting.

Brian: as renewals come up. So we've been very intentional about that. And I expect that to continue to grow.

James M. Taylor: And I expect that to continue. And as Brian alluded to, you know, our national accounts team is held accountable to understand productivity, or sales reporting isn't required. So when you supplement that with the place or AI data, in terms of traffic, which is a great proxy for sales productivity, you have a pretty good view, which not only helps you understand the health of the underlying tenant but also, you know, how you best drive the economics. Thanks, Jen. Thanks, Brian.

Jim Taylor: And as Brian alluded to, you know our national account scheme is held accountable to understand productivity where sales reporting isn't required. So when you supplement that with the place or AI data in terms of traffic, which is a great proxy for sales productivity, you have a pretty good view. Which not only helps you understand the health of the underlying tenant, but also, you know, how you best drive the economics upon renewal.

Brian: And as Brian alluded to, you know, our national accounts team is held accountable to understand productivity where sales reporting isn't required.

Speaker Change: So when you supplement that with the Placer AI data, in terms of traffic, which is a great proxy for sales productivity, you have a pretty good view, which not only helps you understand the health of the underlying tenant, but also

Speaker Change: You know, how you best drive the economics upon renewal.

Unknown Executive: Thanks, Jim. Thanks, Brian.

Unknown Executive: Thanks.

Unknown Executive: Thank you.

Alexander David Goldfarb: Thanks. Thank you. Our next question has come from the line of Alexander Goldfarb with Piper Sandler. Please proceed with your questions. Hey, good morning, and Mazel tov on the promotions all around.

Speaker Change: Thanks, Jim. Thanks, Brian. Thanks.

Alexander Goldfarb: Our next question has come from the line of Alexander Goldforb with Piper Sandler. Please proceed with your questions. Hey, good morning and Mazelkov on the promotions all around. Just a few questions. I guess one question when follow up on the going back to the tenant, you know, clearly McDonald's out with their news on consumer pushback. It's been sort of a common theme for others, especially in the food and area. You know, just an update on what you're seeing across your retail portfolio.

Speaker Change: Thank you. Our next question has come from the line of Alexander Goldfarb with Piper Sandler. Please proceed with your questions.

James M. Taylor: Just a few, two questions, I guess one question, one follow-up, on going back to the tenant. You know, clearly McDonald's out with their news on consumer pushback. It's been sort of a common theme for others, especially in the food in area. All right, you know, just an update on what you're seeing across your retail portfolio. Are retailers really talking in concerned about changes in consumer shopping and purchase patterns?

Alexander David Goldfarb: Hey, good morning and Mazel Tov on the promotions all around. Just a few, two questions, or I guess one question, one follow up.

Speaker Change: On the, going back to the tenant.

Speaker Change: You know clearly McDonald's out with their news on consumer pushback. It's been sort of a common theme for other especially in the food area

Speaker Change: Just an update on what you're seeing across your

Jim Taylor: Are you, are retailers really talking and concerned about changes in consumer shopping and purchase patterns, or is this just people reallocating a little bit within each of the different categories, and overall it's really not affecting the business in any way that affects their leasing? You know, the leasing decision is a long-term decision and not certainly driven by quarterly performance, as the retailers are looking at their pipelines down to 25, 26 and beyond, and they're committed to the stores. You know, as we look at our real-time traffic data, we're actually very pleased with how traffic at our centers and our major tenants within those centers continues to improve as we execute our strategy.

Speaker Change: Retail Portfolio

Speaker Change: Are retailers really talking and concerned about changes in consumer shopping and purchase patterns or is this just people reallocating a little bit within each of the different categories and overall it's really not affecting the business in any way that affects their leasing?

James M. Taylor: Or is this just people reallocating a little bit within each of the different categories? And overall, is it really not affecting the business in any way that affects their leasing decisions? You know, the leasing decision is a long-term decision and not certainly driven by quarterly performance.

Alexander David Goldfarb: As retailers are looking at their pipelines out into 25, 26, and beyond, and they're committed to the stores. You know, as we look at our real-time traffic data, we're actually very pleased with how traffic at our centers and our major tenants within those centers continues to improve as we execute our strategy. , and in terms of whether we're hearing it from tenants, really quite to the contrary. You know, the tenants are still in a posture where they're trying to get their store opening plans filled, and they're being very aggressive to do that.

Speaker Change: You know, the leasing decision is a long-term decision and not certainly driven by quarterly performance.

Speaker Change: As the retailers are looking at their pipelines out into 2025.

Speaker Change: 26 and beyond, and they're committed to the stores. You know, as we look at our real time traffic data, we're actually very pleased with how traffic at our centers and our major tenants within those centers continues to improve as we execute our strategy.

Jim Taylor: And in terms of are we hearing it from tenants, really quite to the contrary, you know, the tenants still are in a posture where they're trying to get their store opening plans filled, and they're being very aggressive to do.

Speaker Change: And in terms of, are we hearing it from tenants, really quite to the contrary. You know, the tenants still are in a posture where they're trying to get their store opening plans filled, and they're being very aggressive to do that.

Alexander Goldfarb: Okay, and then just the follow-up is looking at your releasing the sign, but not yet commence. The wider gap is with this small shop, the under 10,000 square feet, and presumably that's the more lucrative, you know, economics for you guys.

Steven T. Gallagher: Okay, and then just to follow up, is looking at your leasing the sign but not yet commencing, the wider gap is with this small shop, under 10,000 square feet. And presumably that's the more lucrative, you know, economics for you guys. Steve, can you just give us a sort of how we should think about, you know, the impact to earnings from a 100 basis point impact, a 100 basis point increase in occupancy from a small shop versus a 100 basis point increase in over 10,000 square feet, just trying to get a sense of the impact to FFO, because you have to believe that it's much more advantageous to boost from the smaller shop than the bigger shop as your occupancy increases.

Speaker Change: Okay, and then just to follow up, is looking at your leasing the sign but not yet commenced, the wider gap is with this small shop, the under 10,000 square feet, and presumably that's the more lucrative, you know, economics for you guys.

Steve Gallagher: Steve, can you just give a sort of how we should think about, you know, the impact to earnings from a hundred basis point impact, a hundred basis point increase in occupancy from small shop versus a hundred basis point increase in over 10,000 square feet, just trying to get a sense of the impact to FFO because it has to believe that it's much more advantageous to the boost from the smaller shop than the bigger shop as your occupancy increases. Yeah, I mean, I don't know that I can quantify the exact name, but I think your general thesis is correct, right?

Speaker Change: Steve, can you just give a sort of how we should think about, you know, the impact to earnings from 100 basis point impact?

Steve: 100 Basin Point increase in occupancy from small shop.

Steve: This is a question about the impact of FFOs versus 100 basis point increase in over 10,000 square feet. Just trying to get a sense of the impact to FFOs because I have to believe that it's much more advantageous to get a boost from the smaller shop than the bigger shop as your occupancy increases.

Steven T. Gallagher: But I think your general thesis is correct, right? Those smaller shop tenants are going to pay a higher rent and have a higher contribution to recovery than you would on the larger shop. That follows through when you look at the average rents we're achieving, both on the anchors in the small shop. Your point is correct that there's a greater multiplier that's part of that 65 million assigned but not. Okay, thank you. Thank you. Thank you. As a reminder, we ask that you please limit yourself to one or two questions only.

Speaker Change: Yeah, I mean, I don't know that I can quantify the exact input, but I think your general thesis is correct, right? Those smaller shop tenants are going to pay a higher rent and have a higher contribution to recovery than you would on the anchor side.

Alexander Goldfarb: Those smaller shop tenants are going to pay a higher rent and have a higher contribution to recoveries than you would on the anchor side. And that follows through when you look at the average rents we're achieving both on the anchors in the small shop. Your point is correct that there's a greater multiplier that's part of that 65 million of sign but not commence to rent. Okay, thank you.

Speaker Change: And that follows through when you look at the average rents we're achieving, both on the anchors and the small shop, your point is correct, that there's a greater multiplier that's part of that $65 million of signed but not commenced rent.

Unknown Executive: Thank you.

Operator: As a reminder, we ask that you please limit yourself to one or two questions only.

Speaker Change: Thank you. You bet.

Speaker Change: Thank you. As a reminder, we ask that you please limit yourself to one or two questions only.

Caitlin Burrows: Our next questions come from a line of Caitlin Burrows with Goldman Sachs. Please proceed with your questions. Hi, good morning, everyone. Maybe just another pickup on the impact of occupancy improvement. You had a good pickup and build occupancy in the quarter and talked about how the snow pipeline is still quite large. So what's your near to medium-term expectations for build occupancy? Can this sort of pace of openings and rent commencements continue, or maybe even accelerate from what we saw in the quarter?

Caitlin Burrows: Our next questions come from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your question. Hi, good morning, everyone.

Speaker Change: Our next questions come from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your questions.

Brian T. Finnegan: Maybe just another pickup on the impact of occupancy improvements. You had a good pickup in build occupancy in the quarter and talked about how the snow pipeline is still quite large. So what's your near to medium-term expectations for build occupancy? Can this sort of pace of openings and rent commencements continue or maybe even accelerate from what we saw in the quarter? Caitlin, hey, this is Brian.

Caitlin Burrows: Hi, good morning everyone. Maybe just another pickup on the impact of occupancy improvements. You had a good pickup in build occupancy in the quarter and talked about how the snow pipeline is still quite large. So what's your near to medium term expectations for build occupancy? Can this sort of pace of openings and rent commencements continue or maybe even accelerate from what we saw in the quarter?

Brian Finnegan: Caitlin, hey, this is Ryan. You normally would expect build occupancy to continue to trend higher in the back half of the year as we have kind of the bulk of those openings happening in the late third, fourth quarter, particularly with anchors. Now, depending on if we get a few store closures back, you may see a dip in that, but that would be the normal course build occupancy trajectory as we head into the end of the year. And again, we just talked about the spread between Least and Bill, particularly on the small shops. We'd start to have a number of those shops coming online at year end and even in the balances we get into next year.

Brian T. Finnegan: You normally would expect build occupancy to continue to trend higher in the back half of the year as we have kind of the bulk of those openings happening in the late third and fourth quarter, particularly with anchors. Now, depending on if we get a few store closures back, you may see a dip in that, but that would be the normal build occupancy trajectory as we head into the end of the year.

Caitlin Burrows: Caitlin, hey, this is Brian . You normally would expect build occupancy to continue to trend.

Caitlin Burrows: Higher in the back half of the year. We have kind of the bulk of those opening happening in the late third, fourth quarter particularly.

Caitlin Burrows: with Anchors. Now, depending on if we get a few store closures back, you may see a dip in that, but that would be the normal course build occupancy trajectory as we head into the end of the year. And again, we just talked about the spread between lease and build, particularly on the small shops. We'd start to have a number of those shops coming online at year end, and even as the balance as we get into next year, and the pipeline continues to be very strong. We're very encouraged just with the depth of demand and the size of the illegal pipeline, despite the fact that we're raising occupancy to these levels. So...

Brian T. Finnegan: And again, we just talked about the spread between leased and built, particularly for the small shops. We'd start to have a number of those shops coming online at year end and even as the balance as we get into next year. And the pipeline continues to be very strong.

Brian Finnegan: And the pipeline continues to be very strong. We're very encouraged just with the depth of demand and the size of the illegal pipeline, despite the fact that we're raising occupancy to these levels. So, but overall, the trajectory you should expect to see that arises when you go through the balance of the year. Got it. Okay.

Brian T. Finnegan: We're very encouraged by the depth of demand and the size of the illegal pipeline despite the fact that we're raising occupancy to these levels. So, overall, the trajectory, you should expect to see that rise as we go through the. Got it. Okay.

Caitlin Burrows: But overall, the trajectory, you should expect to see that to rise as we go through the balance of the year.

Caitlin Burrows: And then just another one on pricing. So, I mean, your new lease spreads have been very strong for a very long time, and this quarter was a record level. The renewal pricing is also really strong. I guess on the option side, is there anything you can do to limit the kind of drag from the impact of options?

Caitlin Burrows: And then just another one on pricing. So, I mean, your new leaf spreads have been very strong for a very long time, and this quarter was a record level. The renewal pricing is also really strong.

Speaker Change: Got it. Okay. And then just another one on pricing. So, I mean, your new lease spreads have been very strong for a very long time, and this quarter was

Jim Taylor: I guess on the option side, is there anything you can do to limit kind of the drag from the impact of options, and is that anything you can do near term, or is it more related to leases you sign today and the eventual options they may or may not have in the future. Since we began, our focus has been on giving fewer options, and we've been very successful, Brian and team, as we've been executing the plan to do that. And so, you know, not only not giving options but giving fewer options and situations where there are otherwise required.

Speaker Change: Record level, the renewal pricing is also really strong. I guess on the options side, is there anything you can do to limit kind of a drag from the impact of options? And is that anything you can do near term? Or is it more related to leases you signed today and the the eventual options they may or may not have in the future?

James M. Taylor: And is that something you can do near term, or is it more related to leases you signed today and the eventual options they may or may not have in the future? Since we began, our focus has been on giving fewer options. And we've been very successful, Brian and team, as we've been executing the plan to do that. And so, you know, not only not giving options but giving fewer options. [inaudible] Caitlin, I would just add, too, that we're making incremental progress, even when we have to give an option, right?

Speaker Change: Since we began, our focus has been on giving fewer options, and we've been very successful, Brian and team.

Speaker Change: As we've been executing the plan to do that. And so, you know, not only not giving options, but giving fewer options and situations where they're otherwise required.

Brian Finnegan: And that's really how you impact that. It's something that occurs over time as you execute fewer and fewer options across the portfolio. Julia, and Caitlin, I would just add too that we're making incremental progress, even when we have to give an option, right? Like, in this environment where maybe those option increases in the past with anchor tenants were 10%, our teams pushing them to 12.5 or 15, to Jim's point, maybe you're eliminating anchor number of anchor options from, say, 4 to 2.

Speaker Change: And that's really how you impact that. It's something that occurs over time as you execute fewer and fewer options across the portfolio.

Speaker Change: And, Caitlin, I would just add, too, that we're making incremental progress. You only have to give an option, right?

James M. Taylor: In this environment, where maybe those option increases in the past with anchor tenants were 10%, and our team's pushing them to 12.5% or 15%, to Jim's point, maybe you're eliminating the number of anchor options from, say, 4% to 2%. The other thing that we've done is we've introduced the fair market value concept, which is pretty much a California phenomenon, into other parts of the country where we've had to give those primarily with national tenants.

Speaker Change: In this environment where maybe those option increases in the past with anchor tenants were 10% and our team's pushing them to 12.5% or 15%.

Speaker Change: to Jim's point, maybe you're eliminating number of anchor options from, say, four to two. The other thing that we've done is we've introduced the fair market value concept that was

Jim Taylor: The other thing that we've done is we've introduced the fair market value concept; it was pretty much a California phenomenon, into other parts of the country where we've had to give those, primarily with national tenants. We're giving almost no options with local tenants, and to Jim's point, it's something our team is very focused on. If you were to sit in committee on a Friday and hear our head, at least, and David Gerson-Haber, he's asking that question as feels come into committee: do you have to give that option? Can you reduce those options? So it's something we're going to continue to remain focused on, but something we've been doing for a while.

James M. Taylor: It's pretty much a California phenomenon.

James M. Taylor: We're giving almost no options with local tenants, and to Jim's point, it's something our team is very focused on. If you were to sit in committee on a Friday and hear our head of leasing, David Gersenhaver, he's asking that question as deals come into committee: do you have to give that option? Can you reduce those options?

Speaker Change: into other parts of the country where we've had to give those, primarily with national tenants. We're giving almost no options with local tenants, and to Jim's point, it's something our team is very focused on. If you were to sit in committee on a Friday and hear our head of leasing, David Gersenhaver, he's asking that question at a fields committee, do you have to give that option? Can you reduce those options? So it's something we're going to continue to remain focused on, but something we've been doing for a while.

Brian T. Finnegan: So it's something we're going to continue to remain focused on, but something we've been doing for a while. Great, thanks. Thank you. Our next question comes from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your question. Hi, thanks for the time. Just a question with regard to the same store NOI guidance. Obviously, there is a slowdown implied in the second half, can you just give

Caitlin Burrows: Great, thanks. Thank you.

Juan Sanabria: Our next question is come from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your questions. Hi, thanks for the time. Just a question with regards to the same store and why I got it. Obviously, there's a slowdown implied in the second half.

Speaker Change: Great, thanks.

Speaker Change: Thank you. Our next questions come from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your questions.

Juan Carlos Sanabria: Hi, thanks for the time. Just a question with regards to the same-store NOI guidance.

Steve Gallagher: Can you just give us some color details around what's driving the slower, assumed second half and the word of the key. What are your goals within the guidance range? I think the first thing you guys think about when you think about the same property NOI is just the growth and base rent, because ultimately the growth in the same property NOI is going to be largely dependent on that growth. For the first half of the year, it was 380 pieces, point contribution to the same property NOI, and you'll see implied in our base rent guidance of 425 to 475 basis point contribution. You really see that starting to ramp up, sort of what Brian was talking about within the assignment, that comments pool.

Juan Carlos Sanabria: Obviously it's a slowdown implied in the second half. Can you just give us some color details around what's driving the slower assumed second half and what are the key variables within the guidance fringe?

Juan Carlos Sanabria: Unknown Speaker, Unknown Attendee, Unknown Speaker, Unknown Speaker, Unknown Speaker, Unknown Speaker, Yeah, you know, I think the first thing you got to think about when you think about the same property NOI is just the growth in base rent, right? Because, ultimately, the growth in same property NOI is going to be largely dependent on that growth. And for the first half of the year, it was 380 basis points contribution to the

Speaker Change: Yeah, you know, I think the first thing you got to think about when you think about the same property and why is just the growth and base rent, right? Because ultimately, the growth and same property and why it's going to be largely dependent on that growth and

Brian: For the first half of the year, it was 380 basis point contributions to the same property NOI. And you'll see, you know, implied in our base rent guidance of 425 to 475 basis point contribution, you really see that starting to ramp up, sort of what Brian was talking about within the sign but not commence pool.

Juan Carlos Sanabria: And you'll see, implied in our base rent guidance of 425 to 475 basis points of contribution, you really see that starting to ramp up sort of what Brian was talking about within the Bad debt as a percentage of total revenues with 20 basis points. We talked on the last quarter call that that did benefit from just the timing of real estate tax collections. And we expect that to be a headwind for the back half of the year as we get back to that, you know, what we're expecting to be a total run rate of 50 to 75 basis points.

Steve Gallagher: Obviously, in the first half of the year, bad debt as a percentage of total revenues was 20 basis points. We talked on the last quarter call that did benefit from just the timing of real estate tax collections, and we expect that to be a headwind of the back half of the year as we get back to what we're expecting to be a total runner rate of 50 to 75 basis points. So I think that the celebration in the bad debt is sort of all studying a lot of the acceleration that you're seeing in the base rent line.

Juan Carlos Sanabria: So I think that the deceleration in the bad debt is sort of offsetting a lot of the acceleration that you're seeing in the base rent. Okay, great. Thanks. And then just on the acquisitions pipeline, I think you mentioned $200 million in the prepared comments. Just curious about the types of assets. Are there larger assets? or smaller, kind of more traditional neighborhood grocery anchor centers.

Brian: Obviously, you know, in the first half of the year,

Brian: Bad debt as a percentage of total revenues with 20 basis points we talked on the last quarter call that did benefit from just the timing of real estate tax.

Brian: Collection. And we expect that to be a headwind to the back half of the year as we, you know, get back to that, you know, what we're expecting to be a total run rate of 50 to 75 basis points. So I think that deceleration in the bad debt is sort of offsetting a lot of the acceleration that you're seeing in the base rent line.

Juan Sanabria: Okay, great. Thanks.

Jim Taylor: And then just on the acquisitions pipeline, I think you mentioned 200 million in the prepared comments. Just curious on the types of assets or the larger assets, or smaller, kind of more traditional neighborhood grocery anchor centers. Just curious on where you're seeing that the opportunity set with regards to kind of what's in the pipeline today. Yeah, that pipeline is larger; the assets are larger than what we've bought in the first half of the year, in part because what we bought in the first half of the year was smaller. So it's really traditional assets that look a lot like the meat of our portfolio.

Speaker Change: Okay, great, thanks. And then just on the acquisitions pipeline, I think you mentioned $200 million in the prepared comments. Just curious on the types of assets. Are there larger assets?

James M. Taylor: Just curious about where you're seeing the opportunity set with regard to kind of what's in the pipeline today. Yeah, that that pipeline is, you know, larger, and the assets are larger than what we bought in the first half of the year, in part because what we bought in the first half of the year was smaller. So it's really traditional, truly assets that look a lot like the meat of our portfolio.

Speaker Change: or smaller, kind of more traditional neighborhood grocery anchored centers. Just curious on where you're seeing the opportunity set with regards to kind of what's in the pipeline today.

James M. Taylor: And importantly, they're assets where we see the ability to drive strong growth. We sit within our footprint, and we have been targeting a bunch of those for acquisitions for quite some time, so we are excited about the opportunity we are seeing in the existing pipeline and, frankly, beyond the existing pipeline as we continue to try to dig out deals across. And maybe just one more, if I could be a little greedy here, you talked about foot traffic being solid and having an increased number of data points on retailer sales, but given the comments Alex made We're not.

Speaker Change: Yeah, that that pipeline is, you know, is larger, the assets are larger than what we bought in the first in the first half of the year, in part, because what we bought the first half of the year was smaller. So it's really traditional. It's really assets that look a lot like the meat of our portfolio. And importantly, they're assets where we see the ability to drive strong growth.

Jim Taylor: And importantly, their assets where we see the ability to drive strong growth. They sit within our footprint, and we have been targeting a bunch of those strategies for quite some time. So we're excited about the opportunity we're seeing in the existing pipeline. And frankly, beyond the existing pipelines, we continue to try to dig out deals across.

Speaker Change: They sit within our footprint and we have been targeting a bunch of those for acquisitions for quite some time. So we're excited about the opportunity we're seeing in the existing pipeline and frankly beyond the existing pipeline as we continue to try to dig out deals across the country.

Jim Taylor: And maybe just one more if it could be a little greedy here. We talked about for traffic being solid and having all increased amount of data points on retailer sales, but given the comments Alex made about the more cautious comments by both luxury and low-end retailers. Are you seeing any slow down in retail sales from your retailer base across the portfolio? We're not.

Speaker Change: And maybe just one more, if I can be a little greedy here. You talked about foot traffic being solid and having an increased amount of data points on.

Speaker Change: Retailers Sales. But given the comments Alex made about the more cautious comments by both luxury and low-end retailers, are you seeing any slowdown in retail sales from your retailer base across the portfolio?

Juan Sanabria: Okay, thanks. Thank you.

Alex: We're not.

Juan Carlos Sanabria: Thank you. Thank you. Thank you. Our next question has come from the line of Floris Van Dijkum with Compass Point. Please proceed with your question. Hey, good morning, guys.

Floris Dijkum: Our next question has come from the line of Floris Van Dijkum with Compass Point. Please proceed with your questions.

Speaker Change: Okay, thanks.

Speaker Change: Thank you. Our next questions come from the line of Floris Van Dijkum with Compass Point. Please proceed with your questions.

Floris Dijkum: Hey, morning guys, and congrats on the new titles. So, following up on that acquisition pipeline, maybe if you can talk a little bit about what you're seeing in terms of pricing. And maybe to switch the question a little bit more, are you targeting value-add acquisitions, or is it mostly complimentary or infill acquisitions, just like what you've done in the open head next to existing centers? You know, I'll let Mark handle the broader pipeline for us, but we really are looking at kind of core plus value added type opportunities where we can bring our better platform to bear to drive better outcomes and rent and end of wide growth, additional asset densification, et cetera.

Floris Gerbrand Hendrik Van Dijkum: And congrats on the new title. So following up on that acquisition pipeline, maybe if you could talk a little bit about what you're seeing in terms of pricing, and maybe to switch the question a little bit more, are you targeting value-add acquisitions? Or is it mostly complementary or infill acquisitions? Just like what you've done in Hilton Head next to existing centers?

Speaker Change: Good morning, guys, and congrats on the new title.

Speaker Change: So following up on that acquisition pipeline, maybe if you can talk a little bit about what you're seeing in terms of pricing.

Speaker Change: And maybe to switch the question a little bit more, are you targeting value-add acquisitions, or is it mostly complementary or infill acquisitions, just like what you've done in Hilton Head, next to existing centers?

James M. Taylor: You know, I'll let Mark handle the broader pipeline for us, but we really are looking at kind of core plus value-added type opportunities where we can bring our better platform to bear to drive better outcomes in rent and NOI growth, additional asset densification, etc. So you're not seeing us, you know, playing on the core side.

Speaker Change: You know, I'll let Mark handle the broader pipeline for us, but we really are looking at kind of core plus value added type opportunities where we can bring our better platform to bear to drive better outcomes in rent and NOI growth.

Mark T. Horgan: But the encouraging thing is that we're finding really attractive opportunities within our core markets to further cluster infill type investments where we understand where the market rents are, we understand what the tenant demand is for that particular center, and we believe we can generate above average growth. I think it's well said, Jim. And when we look at acquisitions, we're also thinking about those dispositions. I think it's important.

Jim Taylor: So you're not seeing us, you know, playing on the core side, but we're with the encouraging thing is that we're finding really attractive opportunities within our core markets to further cluster infill type investments where we understand where the market runs are.

Mark: Additional Asset Densification, etc. So you're not seeing us, you know, playing on the core side, but the encouraging thing is that we're finding really attractive opportunities.

Mark: within our core markets to further cluster infill type investments, where we understand where the market rents are, we understand what the tenant demand is to be in that particular center, and we believe we can generate above average growth.

Mark Horgan: We understand what the tenant demand is to be in that particular center, and we believe we can generate a Bob average growth. Yeah, I think it's well said, Jim, and when we look at ad acquisitions, we're all so thinking about the dissolution. So I think it's important I said earlier when we're selling assets, we're selling assets where we really maximize value and maximize that that higher are going forward. And when we're looking at that pipeline, we're just seeing much better higher mine versus what we're selling, which we hope will contribute to the launch from growth here.

Mark: Yeah, I think it's well said, Jim. And when we look at acquisitions, we're also thinking about those dispositions. I think it's important. I said it earlier, when we're selling assets, we're selling assets where we really maximize value and maximize that higher R going forward.

Floris Gerbrand Hendrik Van Dijkum: I said it earlier, when we're selling assets, we're selling assets where we really maximize value and maximize that IRR going forward. And when we're looking at that pipeline, we're just seeing much better IRR on buying versus what we're selling, which we hope will contribute to long-term growth. Unknown Speaker Great.

Speaker Change: And when we're looking at that pipeline, we're just seeing much better IRRs buying versus what we're selling, which we hope will contribute to the long-term growth here.

Mark Horgan: Great. And presumably, those the acquisitions and dispositions, are they going to be similar type cap rates? Yeah, it's interesting.

Brian T. Finnegan: And presumably those the acquisitions and dispositions, are they going to be, you know, similar types of copyright? Yeah, it's interesting. And when we look at what we've done year to date, as we talked about last quarter, our blended cap rate for what we sold year to date is,,,,, to the High Sixes. I think that will even out over Great. And then maybe my follow-up question on, I noticed obviously great new leasing spreads, but you're spending a lot of money to achieve some of those spreads.

Speaker Change: Unknown Speaker Great. And presumably those the acquisitions and dispositions, are they going to be, you know, similar type copyrights?

Mark Horgan: When we look at what we've done here today, as we talked about last quarter, our blended cap rate for what we sold here today is into the fours; we're buying today and into the high sixes. I think that will even out over time. Great.

Speaker Change: Yeah, it's interesting. When we look at what we've done year to date, as we talked about last quarter, our blended cap rate for what we sold year to date is into the fours we're buying today and into the high sixes. I think that will even out over time.

Brian Finnegan: And then maybe my follow-up question on I noticed obviously great new leasing spreads, but you're spending a lot of money to achieve some of those spreads. I think I calculate $205 a square foot in lease costs this past quarter. Maybe talk. I suspect it has to do with some of the cons boxes or some of the other boxes that you're, you know, transitioning to Sprouts or other grocers.

Speaker Change: Great. And then maybe my follow-up question on...

Speaker Change: I noticed, obviously, great new leasing spreads, but you're spending a lot of money to achieve some of those spreads. I think I calculated $205 million, $205 a square foot in lease costs.

Brian T. Finnegan: I think I calculated $205 million, $205 a square foot in lease costs this past quarter. Maybe talk to them. I suspect it has to do with some of the checkout boxes or some of the other boxes that you're transitioning to Sprouts or other grocers. But could you talk a little bit about how long will those elevated leasing costs persist in your view? Or do you think that it's going to slow down at some point and have or go even lower? Floris, hey, this is Brian.

Speaker Change #100: This past quarter.

Speaker Change #101: Unknown Speaker I suspect it has to do with some of the cons boxes or some of the other boxes that you're, you know, transitioning to sprouts or other grocers.

Brian Finnegan: But if you could talk a little bit about how long will those elevated leasing costs persist in your view, or do you think that that's going to slow down at some point and, you know, have or go even lower?

Speaker Change #102: But if you could talk a little bit about how long will those elevated leasing costs persist in your view, or do you think that that's going to slow down at some point and, you know, have or go even lower?

Brian Finnegan: Of course, hey, this is Brian. I'm not tying to the $206 foot, but I would just point to the fact that net effective rents were a record for the portfolio this quarter. We show you the net effective rents, so you can ultimately see the impact of cost there. They're coming off a record from last year. What you're seeing in terms of the leasing capex, it was somewhat elevated last year versus historicals, and it will remain at that level this year in terms of the TI. That's just because of the fact that our team has leased so much of the space that we took back last year and leased it very quickly.

Brian T. Finnegan: I'm not tying to the $206 a foot, but I would just point to the fact that net effective rents were a record for the portfolio this quarter. We show you the net effective rents, so you can ultimately see the impact of costs there. They're coming off a record from last year.

Speaker Change #102: Floris, hey, this is Brian . I'm not tying to the $206 a foot, but I would just point to the fact that net effective rents were a record for the portfolio this quarter. We show you the net effective rents so you can ultimately see the impact of costs there. They're coming off a record from last year.

Speaker Change #102: What you're seeing in terms of the leasing CapEx, it was somewhat elevated last year versus historicals and it will remain at that level this year in terms of the TIs. That's just because of the fact that our team has leased.

Brian Finnegan: I'd say, on average, the box backfills that we've done, we've talked about in the past, we average around 50 bucks a foot for the bedbass spaces. That's consistent with what you're seeing, where we are spending a bit more, like the sprouts example that you gave. We're getting it back; we're getting it back in rent, certainly. I'd say just for capex overall, though, we have been very prudent in terms of where we've been spending. You see our maintenance capex now. It was down last year versus 2022. It's trending down again, and we'll be down by year end, and really reflective of the changes that we've made and the improvements that we've made across the portfolio and that leveling off.

Speaker Change #102: So much of the space that we took back last year and leased it very quickly.

Speaker Change #102: I'd say, on average, the box backfills that we've done, we've talked about in the past, we average around 50 bucks a foot for the bath spaces.

Speaker Change #103: consistent with what you're seeing, where we are spending a bit more, like the sprouts example that you gave, we're getting it back We're getting it back in rent certainly. I'd say just for CapEx overall though we have been very prudent in terms of where we've been spending. You see our maintenance CapEx

Speaker Change #102: Now it was down last year versus 2022. It's trending down again and will be down by year-end, really reflective of the

Brian Finnegan: Our reinvestment spend, we talked about that being 150 to 200 million a year, we're going to be at the high end of that range this year as we bring on some of these really strong projects like those that Jim and I both highlighted. But to your point, as occupancy increases and there continues to be demand, our teams leveraging that demand to have tenants take more existing conditions. Tenants are getting much more flexible in terms of the age of the roof, the age of the age back. So you'd expect that to moderate, but I think on the whole why you're seeing some of the leasing costs somewhat elevated is just because our team has addressed so much of that space.

Speaker Change #102: changes that we've made and the improvements that we've made across the portfolio and that leveling off.

Speaker Change #102: Our reinvestment spend, we talked about that being $150 to $200 million a year, we're going to be at the high end of that.

Speaker Change #104: range this year as we bring on some of these really strong projects like those that Jim and I both highlighted. But to your point, as occupancy increases and there continues to be demand, our team's leveraging that demand to have tenants take more existing conditions. Tenants are getting much more flexible in terms of the age of the roof, the age of the HVAC. So you'd expect that to moderate. But I think

Brian T. Finnegan: What you're seeing in terms of the leasing CapEx, it was somewhat elevated last year versus historical averages, and it will remain at that level this year in terms of the TIs. That's just because of the fact that our team has leased so much of the space that we took back last year and leased it very quickly. I'd say on average, the backfills that we've done, and we've talked about in the past, we average around 50 bucks a foot for the bath spaces.

Brian T. Finnegan: That's consistent with what you're seeing. Where we are spending a bit more, like the Sprouts example that you gave, we're getting it back in rent, certainly. I'd say just for CapEx overall, though, we have been very prudent in terms of where we've been spending. You see, our maintenance CapEx. Now, it was down last year versus 2022.

Brian T. Finnegan: It's trending down again and will be down by year-end, really reflective of the changes that we've made and the improvements that we've made across the portfolio and that leveling off. Our reinvestment spend, we've talked about that being $150 to $200 million a year. We're going to be at the high end of that range this year as we bring on some really strong projects like those that Jim and I both highlighted.

Brian T. Finnegan: But to your point, as occupancy increases and there continues to be demand, our team's leveraging that demand to have tenants take more existing conditions. Tenants are getting much more flexible in terms of the age of the roof, the age of the HVAC, so you'd expect that to moderate.

Speaker Change #104: On the whole, why you're seeing some of the leasing costs somewhat elevated is just because our team has addressed so much of that space so quickly.

Operator: But I think, on the whole, why you're seeing some of the leasing costs somewhat elevated is just because our team has addressed so much of that space. Great. Thanks, guys. Thank you. As a reminder, we ask that you please limit yourself to one or two questions only.

Unknown Executive: Thank you.

Operator: As a reminder, we ask that you please limit yourself to one or two questions only.

Speaker Change #105: Thanks, guys. Thanks, guys. You bet.

Speaker Change #106: Thank you. As a reminder, we ask that you please limit yourself to one or two questions only.

Haendel Emmanuel St. Juste: Our next question has come from the line of Haendel St. Juste with Mizzou Health. Please proceed with your question. Hey, thank you for taking my question. I wanted to go back to Big Lots for a moment. You have more exposure there than Kahn's.

Haendel Juste: Our next questions come from the line of Haendel, St. Joseph, with Mizuhau. Please proceed with your questions. Hey, thank you for taking my question. I wanted to go back to big and large for a moment. You have more exposure there than Khan to think of 27 boxes, 70 bits of APR. I'm curious what you've heard on how many of those stores they might be looking to close in your portfolio. And we're hearing that they may be looking at sub-leasing some of their own space directly to the third parties. So I'm curious if you're seeing any of that.

Speaker Change #107: Our next questions come from the line of Haendel St. Juste with Mizuho. Please proceed with your questions.

Haendel Emmanuel St. Juste: Hey, thank you for taking my question.

Brian T. Finnegan: I think it's 27 boxes, 70 bits of APR. I'm curious what you've heard on how many of those stores they might be looking to close in your portfolio. And we're hearing that they may be looking at subleasing some of their own space directly to third parties. So I'm curious if you're seeing any of that, and if you expect that to perhaps limit your opportunity to get back some of those boxes and benefits in the release yourself. Thanks. Hey, this is Brian.

Haendel Emmanuel St. Juste: I wanted to go back to Big Lots.

Speaker Change #109: for a moment. You have more exposure there than Khan's, I think it's 27 boxes, 70 bits of APR.

Speaker Change #109: I'm curious what you've heard on how many of those stores they might be looking to close in your portfolio. And we're hearing that they may be looking at subleasing some of their own space directly to third parties. So I'm curious if you're seeing any of that and if you expect that to perhaps limit your opportunity to get back some of those boxes and benefits in the releasing yourself. Thanks.

Brian Finnegan: If you expect that to perhaps limit your opportunity to get back some of those boxes and benefits and releasing yourself. Thanks.

Brian Finnegan: Haendel, hey, this is Brian. So just as it relates to Big Lots, we reduced our exposure again by 30% since prior to the pandemic. We've signed leases with the likes of Aldi and Sprouts and Ross here recently on reaching recently recaptured big lots of bases. We did have four stores that were on the initial closure list. Two of those are already least one with a great fitness use one with a great off price operator. So as we look and we don't have any additional color in terms of the number of stores that we will get back or the timing as it relates to anything announcing additional store closures.

Brian T. Finnegan: So just as it relates to Big Lots, we've reduced our exposure, again, by 30% since prior to the pandemic. We've signed leases with the likes of Aldi and Sprouts and Ross here recently on recently recaptured Big Lots spaces. We did have four stores that were on the initial closure list. Two of those are already leased, one with a great fitness use, and one with a great off-price

Brian: Hey, this is Brian . So just as it relates to big lots, we've reduced our exposure, again, by 30%. Since prior to the pandemic, we've signed leases with the likes of Aldi and Sprouts and Ross,

Brian: here recently on recently recaptured big lot spaces. We did have four stores that were on the initial closure list.

Brian: Two of those are already leased.

Brian: One with a great fitness use, one with a great off-price operator.

Brian: So as we look, and we don't have any additional color in terms of the number of stores that we will get back or the timing as it relates to anything.

Brian T. Finnegan: So as we look in, and we don't have any additional color in terms of the number of stores that we will get back or the timing as it relates to anything announcing additional store closures. What I could say, though, is we have Big Lots boxes in markets like Philadelphia and Dallas. And we'd be taking some of this space back in the tightest box supply environment that we have. So, we feel really good about the demand we're seeing for that space.

Brian Finnegan: What I could say though is we have big lots boxes and markets like Philadelphia and Dallas and we're we be taking some of this space back in the tightest box supply environment that we've ever seen. So we feel really good about the demand we're seeing for that space. We were very opportunistic early in the bad bad discussions too about taking space back proactively. And we'll look at that as well because we didn't want to ensure that we control our own destiny. But we'll be prudent with those decisions as we assess them center by center. And are you hearing anything on the releasing of the boxes themselves?

Brian: Announcing Additional Store Closures. What I could say, though, is we have big lots boxes in markets like Philadelphia and Dallas, and we'll be taking some of this space back in the tightest box supply environment that we've ever seen.

Brian: So, we feel really good about the demand we're seeing for that space. We were very opportunistic early in the Bed Bath Discussions, too, about taking space back proactively, and we'll look at that as well, because we want to ensure that we control our own destiny. But we'll be prudent with those decisions as we assess them center by center.

Brian T. Finnegan: We were very opportunistic early in the Bed Bath Discussions, too, about taking space back proactively, and we'll look at that as well, because we want to ensure that we control our own destiny. But we'll be prudent with those decisions as we assess them center by center.

Brian T. Finnegan: And are you hearing anything on the release of the boxes themselves to third parties? Yeah, I think look, they probably see the same value that we do. And again, we're going to show up at the auction, we were for Bed Bath and Beyond, and we were able to get control of one of our boxes that we've already leased in New England. So we'll assess that as they come along. And I would say, look, our team has already been very proactive.

Brian Finnegan: Yeah, I think look, they probably see the same value that we do. And again, we're going to we showed up at the auction. We were for bad bath. We were able to get control of one of our boxes that we've already leased in England. So we'll assess that as they come along. And I would say, look, our team has already been very proactive. Again, there were four stores on a closure list that just came out. Two of them are already leased. So we've been getting ahead of a number of these names, particularly when we hear of potential store closures or potential weakness, and feel really confident in our ability to capitalize on them and will be opportunistic as it relates to proactively recapturing that space.

Speaker Change #110: And are you hearing anything on the releasing of the boxes themselves to third parties?

Speaker Change #110: Yeah, I think, look, they probably see the same value that we do. And again, we're going to, we showed up at the auction, we were, for Bed Bath, we were able to get control of one of our boxes that we've already leased in New England. So we'll assess that as they come along. And I would say, look, our team has already been very proactive. Again, there were four stores on a closure list.

Brian T. Finnegan: Again, there were four stores on a closure list that just came out. Two of them are already leased. So we've been getting ahead of a number of these names, particularly when we hear of potential store closures or potential weakness and feel really confident in our ability to capitalize on them and will be opportunistic as it relates to proactively recapturing them. Thank you. And then, just to follow up, you mentioned Bed Bath & Beyond. The new anchor lease spreads were very high in the quarter.

Speaker Change #110: that just came out. Two of them are already leased. So we've been getting ahead of a number of these names, particularly when we hear of potential store closures or potential weakness and feel really confident in our ability to capitalize on them, and we'll be opportunistic as it relates to proactively recapturing that space.

Unknown Executive: Got it. Thank you.

Unknown Executive: And then just follow up. You mentioned bed bath. The new anchor lease spreads were very high in the court.

Speaker Change #111: Unknown Attendee Got it, thank you. And then just to follow up, you mentioned Bed Bath. The new anchor lease spreads were very high in the quarter. I'm curious if any of that included any of the Bed Bath Backfills and remind us again of the timing of the cash flow impact that you expect from the Bed Bath Backfills.

Unknown Executive: I'm curious if any of that included any of the Bed Bath back pills and remind us again of the timing of the cash flow impact to expect from the bath. Bed bath. Well, just starting on the cash flow, that's already started to come online. We do expect the bulk of that to come online next year. We're effectively finished with those boxes. Interestingly, it didn't really include the bed baths because we had already leased all those boxes in the quarters prior to this. And I think what this shows you is the low rent basis that we have and the opportunity that we have across the portfolio, not just with one tenant or one part of the country.

Brian T. Finnegan: I'm curious if any of that included any of the Bed Bath backfills. And remind us again of the timing of the cash flow impact that you expect from the Bed Bath backfills. Well, just starting on the cash flow, that's already started to come online. We do expect the bulk of that to come online next year. We're effectively finished with those boxes. Interestingly, it didn't really include the Bed Baths because we had already leased all those boxes in the quarters prior to this.

Speaker Change #112: Well, just starting on the cash flow, that's already started to come online. We do expect the bulk of that to come online next year. We're effectively finished with those boxes. Interestingly, it didn't really include the vet baths because we had already leased all those boxes in the quarters prior to this. And I think what this shows you is the low rent bases that we have and the opportunity that we have across the portfolio, not just with one tenant or one part of the country. It was fairly broad-based where we saw that this quarter. But ultimately, we're thrilled with how quickly our team is really addressing any space that we've been getting back in this environment.

Brian T. Finnegan: And I think what this shows you is the low rent base that we have and the opportunity that we have across the portfolio, not just with one tenant or one part of the country. It was a fairly broad base where we saw that this quarter. But ultimately, we're thrilled with how quickly our team is really addressing any space that we've been getting back in this environment, and we expect that to continue. All right, thank you, and congrats on the promotion. Thanks again.

Unknown Executive: It was fairly broad base where we saw that this quarter, but ultimately we're thrilled with how quickly our team is really addressing any space that we've been getting back in this environment and expect us to continue. Thanks for doing that.

Unknown Executive: All right, thank you, and congrats on the promotion. Thanks again.

Speaker Change #112: and expect us to continue to do that.

Unknown Executive: Thank you.

Speaker Change #113: All right, thank you, and congrats on the promotion. Thanks again.

Jeffrey Alan Spector: Thank you. Our next questions come from the line of Jeff Spector with Bank of America. Please proceed with your question. Hi, this is Andrew real on behalf of Jeff. Thanks for taking our questions. West Center, about 99% least. What's the least rate at fresh market shops?

Jeff Spector: Our next question comes from the line of Jeff Spector with Bank of America. Please proceed with your questions.

Speaker Change #114: Thank you. Our next questions come from the line of Jeff Spector with Bank of America. Please proceed with your questions.

Andrew Real: Hi, this is Andrew Real on for Jeff. Thanks for taking our questions. What's the least rate at fresh market shops and can you just talk more about the opportunities at the two assets if there are any larger explorations in the near future? What's your term and what market market opportunities look like? Sure, so at West Center that if you've looked at that on the site, plan is really in adjacent to the center. We are behind it called three villages. That's really unlocking the opportunity to figure out what the overall plan is for three villages when you include that out parcel.

Brian T. Finnegan: And can you just talk more about the opportunity set at the two assets if there are any larger expirations in the near term and what mark to market opportunities look like? Sure. So at West Center, that, if you've looked at that on-the-site plan, it's really an adjacency to the center we own behind it called Three Villages, and that's really unlocking the opportunity to figure out what the overall plan is for Three Villages when you include that out parcel.

Andrew Reel: Hi, this is Andrew Riel on for Jeff. Thanks for taking our questions. West Center is about 99% leased. What's the leased rate at fresh market shops? And can you just talk more about the opportunity set at the two assets if there are any larger expirations in the near term, and what mark-to-market opportunities look like?

Speaker Change #116: Sure. So at West Center, that, if you've looked at that on-site plan, it's really an adjacency of the site.

Speaker Change #116: to the center wheel behind it called Three Villages.

Speaker Change #117: And that's really unlocking the opportunity to figure out what the overall plan is for three villages when you include that out parcel. So that vacant box Jim mentioned is the one at Village Center behind West Center, which is early but really exciting steps here in the first couple of months of ownership.

Brian Finnegan: So that vacant box dimension is the one at West Village Center behind West Center, which is early, but really exciting.

Brian T. Finnegan: So that vacant box Jim mentioned is the one at Village Center behind West Center, which is early but really exciting steps here in the first couple of months of ownership. Okay, thanks. You also spoke of adding a few more repositioning and redevelopment projects to the pipeline this quarter. Just curious if it's becoming any easier to find these types of opportunities; any color on your opportunity set to retouch assets and how that's trending would be helpful.

Brian Finnegan: Steps here in the first couple of months of ownership, with respect to Hilton Head, is 100% occupied, and what we see there is an asset that's been under managed and underhanded, and we're very excited about the opportunity to drive low risk, high growth there. Okay, thanks.

Speaker Change #118: With respect to Hilton Head, it's 100% occupied, and what we see there is an asset that's been under-managed and under-rented, and we're very excited about the opportunity to drive low-risk, high-growth there.

Jim Taylor: You also spoke to adding a few more repositioning and redevelopment projects to the pipeline this quarter. Just curious if it's becoming any easier to find these types of opportunities. Any color on your opportunity said to retouch assets and how that's trending would be helpful. Thanks. Yeah, you know, it's really the opposite advantage our platform brings as a team. We look at acquisition opportunities and we really are viewing them through the lens of a value-added investor where we have the opportunity to raise rents but also reposition, densify, and add necessary uses to the acquisition. So the nice part about our strategy is that we've successfully harvested a significant amount of opportunity in our existing portfolio.

Speaker Change #119: Okay, thanks. You also spoke to adding a few more repositioning and redevelopment projects to the pipeline this quarter. Just curious if it's becoming any easier to find these types of opportunities? Any color on your opportunity set to retouch assets and how that's trending would be helpful. Thanks.

James M. Taylor: Thanks. Yeah, you know, it's really the advantage our platform brings as a team when we look at acquisition opportunities. And we really are viewing them through the lens of a value-added investor, where we have the opportunity to raise rents but also reposition, densify, and add necessary use to the acquisition. So, the nice part about our strategy is that we've successfully harvested a significant amount of opportunity in our existing portfolio. Importantly, a significant amount of opportunity remains, several hundred million that we expect to execute over the next couple of years. And then we continually add to that, as we've demonstrated in South Florida, and I think we'll demonstrate in some of these more recent acquisitions.

Speaker Change #120: Yeah, you know, it's really the the advantage our platform brings as a team we look at acquisition opportunities

Speaker Change #120: And we really are viewing them through the lens of a value-added investor.

Speaker Change #120: where we have the opportunity to raise rents, but also reposition, densify, and add necessary uses.

Speaker Change #120: So the nice part about our strategy is that we've successfully harvested a significant amount of opportunity in our existing portfolio.

Jim Taylor: Importantly, a significant amount of opportunity remains several hundred million that we expect to execute over the next couple of years, and then we continually add that as we've demonstrated in South Florida, as I think we'll demonstrate in some of these more recent acquisitions. The opportunity to add value through incremental reinvestment.

Speaker Change #120: Importantly, a significant amount of opportunity remains, several hundred million that we expect to execute over the next couple of years. And then we continually add that, as we've demonstrated in South Florida, as I think we'll demonstrate in some of these more recent acquisitions.

James M. Taylor: The opportunity to add value through incremental reinvestment. Thank you. Thank you. Our next question has come from the line of Samir Khanal with Evercore ISI. Please proceed with your question. Hey, Brian, good morning.

Speaker Change #120: The opportunity to add value through incremental reinvestment.

Samir Khanal: Our next questions come from the line up, Samir Connell with Evercore ISI. Please proceed with your questions. Hey, Brian. Good morning. I guess I mean, you talked about the cons boxes, big lots boxes. I mean, this would be think about the setup in the next year. What does that tenant exposure sort of that watch list look like? I guess for the next six to 12 months. Thanks.

Speaker Change #120: Thank you. Thank you for that.

Speaker Change #121: Thank you. Our next questions come from the line of Samir Khanal with Evercore ISI. Please proceed with your questions.

Samir Upadhyay Khanal: I guess I mean, you talked about the cons boxes, big lots boxes. I mean, this is what we think about the setup for the next year. What does that tenant exposures or that watch list look like, I guess, for the next six to 12 months? Thanks. I just start by saying that the credit base of this portfolio is as strong as it's ever been. We put in a rigorous underwriting process coming out of the pandemic with our financial asset management. And that has really paid off.

Samir Upadhyay Khanal: Hey, Brian , good morning. I guess, I mean, you talked about the cons boxes, the big lots boxes. I mean, just as we think about the setup in the next year, what does that tenant exposure, sort of that watch list look like, I guess, for the next six to twelve months? Thanks.

Brian Finnegan: I just start by saying that the credit base of this portfolio is as strong as it's ever been. We put in a rigorous underwriting process coming out of the pandemic with our financial asset management team, and that has really paid off. And you can see it paid off in record low moveouts for the portfolio. You can see it paying off in terms of the renewal growth that we've been able to drive because we've got better tenants in there that are driving more traffic. Again, as it relates to those two specific situations, we have a very low exposure with cons at 30 basis points.

Speaker Change #123: I just start by saying that the credit base of this portfolio is as strong as it's ever been. We put in a rigorous underwriting process coming out of the pandemic with our financial asset management team.

Brian T. Finnegan: And you can see it pay off in terms of the record low move-out rates for the portfolio. You can see it paying off in terms of the renewal growth that we've been able to drive because we've got better tenants in there that are driving more traffic. Again, as it relates to those two specific situations, we have a very low exposure with a cons at 30 basis points. We've already leased one of the boxes. The other boxes are in places like Raleigh, Houston, and Atlanta, which are great markets.

Speaker Change #123: And that has really paid off, and you can see it paid off in record low move-outs.

Speaker Change #123: For the portfolio, you can see it paying off in terms of the renewal growth that we've been able to drive because we've got better tenants in there that are driving more traffic. Again, as it relates to those two specific situations, we have a very low exposure

Jim Taylor: We've already leased one of the boxes. The other boxes are in places like Rally, Houston, Atlanta, which are great markets. And ultimately, is it relates to big lots. We have consistently been lowering our exposure there and backfilling them with better tenants at higher rent. So I think it's encouraging that we've already out leases on some of the stores that they've announced. And as we think about it ultimately into next year, we are looking to see how we can use this as an opportunity to continue to position ourselves upgrading. I think we're really well positioned, even for a slowdown, given where our rent basis is, and it's a point I've made many times that in a strong environment such as the one that we're in, we're positioned to outperform largely because of that rent basis.

Speaker Change #123: with cons at 30 basis points. We've already leased one of the boxes. The other boxes are in places like Raleigh and Houston and Atlanta, which are great markets.

Brian T. Finnegan: And ultimately, as it relates to big lots, we have consistently been lowering our exposure there and backfilling them with better tenants at higher rents. So I think it's encouraging that we've already got leases on some of the stores that they've announced. And as we think about it ultimately into next year, we are looking to see how we can use this as an opportunity to continue to position ourselves to upgrade. Okay.

Speaker Change #123: and ultimately as it relates to big lots.

Speaker Change #123: We have consistently been lowering our exposure there and backfilling them with better tenants at higher rents. So I think it's encouraging that we've already got leases on some of the stores that they've announced.

Speaker Change #123: And as we think about it ultimately into next year, you know, we are looking to see how we can use this as an opportunity to continue to position ourselves to upgrade these spaces.

James M. Taylor: And I guess, Jim, just shifting over to you, you clearly have occupancy that continues to go up, spreads are strong, and it looks like acquisitions may even be picking up here, at least as we saw in the quarter. I mean, what's the biggest risk to the portfolio or the sector at this time, you think? Thanks. You know, I think we're really well positioned even for a slowdown given where our rent is.

James M. Taylor: Okay, got it. And I guess, Jim, just shifting over to you, you know, you clearly have occupancy that continues to go up, spreads are strong, looks like acquisitions may even be picking up here, at least as we saw in the quarter. I mean, I guess, what's the biggest risk to the portfolio or the sector at this time, you think? Thanks.

James M. Taylor: You know, I think we're really well positioned, even for a slowdown, given where our rent basis is, and it's a point I've made many times, that in a strong environment such as the one that we're in, we're positioned to outperform largely because of that rent basis.

James M. Taylor: I've said many times that in a strong environment such as the one that we're in, we're positioned to outperform largely because of that rent. Should you see a slowdown in retailer demand, which we're not seeing any signs of, again, retailers are doing business out to 25 and 26.

Jim Taylor: Should you see a slowdown and retailer demand, which we're not seeing any signs of, again, retailers are doing business out to 25 and 26, but where are we to? We think we're particularly well positioned, given the transformation of the portfolio, given our rent basis, and given our overall execution. So I don't see any major risks as we look out ahead, you know, beyond general economic trends and cycles. But even given that, I believe we're really well positioned.

James M. Taylor: Should you see a slowdown in retail or demand, which we're not seeing any signs of, again.

James M. Taylor: But were we to, we think we're particularly well positioned, given the transformation of the portfolio, given our rent base, and given our overall execution. So, I don't see any major risks as we look out ahead, you know, beyond general economic trends and cycles, but even given that, I believe we're really well positioned. I'm also very proud of how we've handled our balance sheet, how we continue to drive improvements in overall debt to EBITDA, how we continue to capitalize in this environment on demand, and to continue to term out our balance sheet and put us in a position where we have $1.7 billion of liquidity and no need for external capital to fund our business plan for the next several years. So when you think about, again, the rent basis, the conservative capital structure, upside I think it's one that positions us particularly well, whatever the economic climate.

James M. Taylor: Retailers are doing business out to 25 and 26, but were we to, we think we're particularly well positioned given the transformation of the portfolio, given our rent basis, and given our overall execution.

James M. Taylor: So, um, I don't see any major risks as we look out ahead, you know, beyond, you know,

James M. Taylor: General Economic Trends and Cycles.

Jim Taylor: I'm also very proud of how we've handled our balance sheet, how we continue to drive improvements in overall debt, but how we continue to capitalize in this environment on demand for our fixed income paper to continue to term out our balance sheet, and put us in a position where we have billions seven of liquidity and no need for external capital to fund our business plan for the next several years. So when you think about, again, rent basis, conservative capital structure, upside, the reposition of the portfolio, I think it's an all-weather plan. I think it's one that positions us particularly well, whatever the economic climate is.

James M. Taylor: But even given that, I believe we're really well positioned.

James M. Taylor: I'm also very proud of how we've handled our balance sheet, how we continue to drive improvements in overall debt to EBITDA, how we continue to capitalize in this environment on demand for our fixed income paper.

James M. Taylor: to continue to term out our balance sheet and put us in a position where we have billion seven of liquidity and no need for external capital to fund our business plan for the next several years.

James M. Taylor: So when you think about, again, rent basis, conservative capital structure, upside, the reposition of the portfolio, I think it's an all-weather plan. I think it's one that positions us particularly well whatever the economic climate is.

Jim Taylor: Thank you, Jim.

James M. Taylor: Thank you, Jim. You bet. Thank you. Our next questions come from the line of Linda Tsai with Jeffreys. Please proceed with your question. Hey, Linda, can you check if you're self-muted?

Unknown Executive: You bet. Thank you.

Linda Sy: Our next question has come from the line of Linda Sy with Jeffries. Please proceed with your questions. Hi, Linda. Can you check if you're self-muted, please? Operator, we can put her back in the queue. Oh, sorry. There you are. Linda. Yeah. Sorry about that.

James M. Taylor: Thank you, Jim. You bet.

Speaker Change #124: Thank you. Our next questions come from the line of Linda Tsai with Jeffreys. Please proceed with your questions.

Speaker Change #125: Hi, Linda. Can you check if you're self-muted, please?

Operator: Operator, we can put her back in the queue. Oh, oh, sorry. Yeah, sorry about that. This was closures taking a touch higher in the second half, reverting you to the historical bad debt run rate. From where you sit today, could bad debt range from 75 to 110 BIPs for 2025?

Speaker Change #128: Operator, we can put her back in the queue. Oh, sorry. There you are. Hey, Linda. Yeah, sorry about that.

Linda Sy: Just with the closures taking a touch higher in the second half, you're voting you to the historical bad debt run rate from where you sit today could bad debt range 75 to 110 dips for 2025? I think what it certainly could, I think what we've been pleased by is the overall improvement and credit quality within the portfolio and how that's coming through in terms of the bad debt performance. We do expect a greater amount of revenues deemed uncollectable in the second half of the year, as Steve alluded to. And I don't want to give guidance yet on 25, but I would frame it against the overall improvement in the portfolio.

Speaker Change #126: This was closures taking a touch higher in the second half, reverting you to the historical bad debt run rate. From where you sit today, could bad debt range 75 to 110 BIPs for 2025?

Linda Tsai: You know, I think what one of the things we've been pleased by is the overall improvement in credit quality within the portfolio and how that's coming through in terms of bad debt performance. We do expect a greater amount of revenues deemed uncollectible in the second half of the year, as Steve alluded to, and I don't want to give guidance yet on 25, but I would frame it against the overall improvement in the portfolio. And then would you expect, just given the strength of your overall portfolio? You know, what's kind of like the longer term?

Speaker Change #126: Bye.

Linda Tsai: You know, I think it certainly could. I think what we've been pleased by is the overall improvement in credit quality within the portfolio and how that's coming through in terms of the bad debt performance.

Linda Tsai: We do expect a greater amount of revenues deemed uncollectible in the second half of the year, as Steve alluded to, and I don't want to give guidance yet on 25, but I would frame it against the overall improvement in the portfolio.

Unknown Executive: And then would you expect just given the strength in your overall portfolio, you know, what's kind of like the longer term? Same-store run rate in your portfolio over the next few years. I think we're well positioned to achieve that same-store growth in the four-plus percent range over the next several years. Thanks.

Speaker Change #130: And then would you expect, just given the strength in your overall portfolio,

Speaker Change #129: You know, what's kind of like the longer-term?

Speaker Change #131: same-store run rate in your portfolio over the next few years?

James M. Taylor: [inaudible] I think we're well positioned to achieve that same sort of growth in the four plus percent range over the next several years. Thank you. Our next question has come from the line of Mike Mueller with JPMorgan.

Steve: I think we're well positioned to achieve that same sort of growth in the four plus percent range over the next several years.

Unknown Executive: Thank you.

Michael William Mueller: Please proceed with your question. Thanks. Hi, just a quick one here. We know the redevelopment pipeline is sizable, but are you evaluating any new ground-up development opportunities as well? You know, we've been approached by developers and certain tenants regarding ground-up development opportunities, and to date, they haven't penciled in. You know, you've got a higher risk, lower return, and it just doesn't, This doesn't compare favorably to the opportunities we have to reinvest in our existing assets. So I do think it's going to take a while to see. But also because it's just a difficult environment in which to finance that type of activity.

Mike Mueller: Our next question has come from a line of Mike Mueller with JP Morgan.

Steve: Thanks.

Mike Mueller: Please proceed with your questions. Thanks, I just a quick one here. We know the redevelopment pipeline is sizable. But are you evaluating any new ground-up development opportunities as well? You know, we've been approached by developers. We've been approached by certain tenants regarding ground-up development opportunities. And today they haven't pencil. You know, you've got a higher risk, lower return. And it just doesn't compare favorably to the opportunities we have to reinvest in our existing assets. So I do think it's going to take a while. To see new ground-up development of any meaningful amount, not only because of the higher risk and lower returns, but also because it's just a difficult environment in which to finance that type of activity.

Speaker Change #132: Thank you. Our next questions come from the line of Mike Mueller with J.P. Morgan. Please proceed with your questions.

Michael William Mueller: Thanks. Hi, just a quick one here. We know the redevelopment pipeline is sizable, but are you evaluating any new ground-up development opportunities as well?

Speaker Change #134: You know we we've been approached by

Speaker Change #135: Developers, we've been approached by certain tenants regarding ground-up development opportunities and to date they haven't penciled. You know you've got a higher risk, a lower return and it just doesn't...

Speaker Change #136: It doesn't compare favorably to the opportunities we have to reinvest in our existing assets. So I do think it's going to take a while to see.

Speaker Change #136: New ground up development of any meaningful amount not only because of the higher risk and lower returns But also because it's just a difficult environment in which to finance that type of activity So we've seen some but I don't expect a material increase in the next couple of years

Jim Taylor: So we've seen some, but I don't expect a material increase in the next couple of years. Got it. Okay.

James M. Taylor: So we've seen some, but I don't expect the material... Got it. Okay. Thank you. Thank you. Our next question has come from the line of Ki-Bin Kim with Truist Securities. Please proceed with your question. Thanks. Good morning.

Speaker Change #137: Got it. Okay. Thank you. You bet.

Kevin Kim: Our next question has come from a line of Kevin Kim with Truist Securities.

Ki Bin Kim: Just a couple of follow-ups. You added a couple of new projects to your redevelopment pipeline. Can you just remind us how you define the yields, that 9% yield that you're getting, and if that includes landlord work? And second, if you look at the trend in rents and construction costs, does the next batch of potential redevelopment projects have that yield potential, has it increased over the past year, or is it relatively stable? Yeah, that return is the incremental rent over the project level costs and the total project level costs.

Kevin Kim: Please proceed with your question. Thanks. Good morning. Just a couple of follow-ups. You added a couple of new projects to every development pipeline.

Speaker Change #138: Thank you. Our next question has come from the line of Ki-Bin Kim with Truist Securities. Please proceed with your question. Thanks. Good morning.

Ki Bin Kim: Just a couple follow-ups. You added a couple new projects to your redevelopment pipeline. Can you just remind us how you define the yields, the 9% yields that you're getting, and if that includes landlord work?

Kevin Kim: Can you just remind us how you define the yields that 9 percent yields that you're getting and if they include landlord work? And a second, if you look at the trend on rents and construction costs, does the next batch of potential redevelopment projects that yield potential has that increased over the past year or has it or relatively stable? Yeah, that return is the incremental rent over the project level cost and the total project level cost as we look out in the pipeline because of the strong demand environment we're seeing. We're actually seeing positive upward pressure in some of those returns, as you saw in terms of the overall portfolio of reinvestment growing from an average of 8 to 9.

Speaker Change #140: And second, if you look at the trend on rents and construction costs, does the next batch of potential redevelopment projects, is that yield potential, has it increased over the past year or has it, or relatively stable?

James M. Taylor: As we look out in the pipeline, because of the strong demand environment we're seeing, we're actually seeing positive upward pressure on some of those returns, as you saw in terms of the overall portfolio, reinvestment growing from an average of eight to nine. So we're encouraged by what we're seeing. Okay, thank you. Thank you. Thank you. Our next questions come from the line of Omotayo Okusanya, with Deutsche Bank. Please proceed with your question. Yes, good morning.

Speaker Change #141: Yeah, that return is the incremental rent over the project level cost and the total project level cost. As we look out in the pipeline,

Speaker Change #141: Because of the strong demand environment we're seeing, we're actually seeing positive upward pressure in some of those returns, as you saw in terms of the overall portfolio of reinvestment growing from an average of 8 to 9. So we're encouraged by what we're seeing looking forward.

Kevin Kim: So we're encouraged by what we're seeing looking forward.

Kevin Kim: Okay. Thank you.

Omataya Oksania: Our next question has come from the line of Omataya Oksania with Deutsche Bank. Please proceed with your questions. Yes. Good morning.

Speaker Change #142: Okay, thank you. Thank you.

Speaker Change #143: Thank you. Our next question has come from the line of Omotayo Oksanya with Deutsche Bank. Please proceed with your questions.

Omotayo Tejumade Okusanya: Let me add my own congratulations to the whole team. Quick question on Kroger and Albertsons and kind of the latest developments with, again, the court case getting accelerated to September. Just curious what you guys are hearing, whether it kind of changes how you guys think, thinking about your exposure to those two grocers. Hey, this is Brian.

Omataya Oksania: Let me add my own congratulations to the whole team. Quick question of Kruger Albertsons and kind of the latest developments with again the court case getting accelerated to September. Just curious, what you guys are hearing where they kind of change is how you guys think, thinking about your exposure to those two grosses.

Omotayo Oksanya: Yes, good morning. Let me add my own congratulations to the whole team. Quick question on Kroger Albertsons and kind of the latest developments with, again, the court case getting accelerated to September . I'm just curious what you guys are hearing, whether it kind of changes how you guys are thinking about your exposure to those two grocers.

Brian Finnegan: Hey, this is Brian. We don't have much more to report outside of what's been in the news. We were encouraged by the fact that none of our stores were on the initial divestiture list. We feel good about our fleets in really either scenario. We've got great stores that have been reinvested in for both Kruger and Albertsons. The markets where we do have some overlap are in a very tight supply environment. Some of the tight supply that we have in markets like Dallas and Southern California and Denver. So we have said and continued to believe that a merger would be good for both companies and have been watching this very closely but feel really good about our fleet.

Brian T. Finnegan: We don't have much more to report outside of what's been in the news. However, we were encouraged by the fact that none of our stores were on the initial divestiture list. We feel good about our fleets in really either scenario. We've got great stores that have been reinvested in by both Kroger and Albertsons. The markets where we do have some overlap are in a very tight supply environment, some of the tightest supply that we have in markets like Dallas, Southern California, and Denver.

Omotayo Oksanya: Hey, this is Brian . We don't have much more to report outside of what's been in the news. We were encouraged by the fact that none of our stores were on the initial divestiture list.

Speaker Change #145: We feel good about our fleets in really either scenario. We've got great stores that have been reinvested in for both Kroger and Albertsons.

Speaker Change #145: The markets where we do have some overlap are in a very tight supply environment, some of the tightest supply that we have in markets like Dallas and Southern California and Denver.

Brian T. Finnegan: So we have said and continue to believe that a merger would be good for both companies and have been watching this very closely, but we feel really good about our fleet. I mean, these stores produce higher sales volumes than the over 700 bucks a foot that we're getting from grocers across the portfolio.

Speaker Change #145: So, we have said and continue to believe that a merger would be good for both companies and have been watching this very closely, but feel really good about our fleet. I mean, these stores produce higher sales volumes than the over 700 bucks a foot that we're getting from grocers across the portfolio. And we're really encouraged by the fact that they have been invested in here over the last few years.

Brian Finnegan: I mean, these stores produce higher sales volumes than the over 700 bucks of foot that we're getting from grocers across the portfolio. So, and we're really encouraged by the fact that they have been invested in here over the last. Thank you.

Brian T. Finnegan: Thank you. Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to Stacy Slater for closing remarks.

Operator: We have reached the end of our question and answer session.

Speaker Change #146: Thank you.

Speaker Change #146: Thanks.

Stacy Slater: I want to turn the floor back over to Stacy Slater for closing remarks. Thanks everyone for joining us today. Enjoy the rest of your summers.

Speaker Change #146: Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to Stacy Slater for closing remarks.

Stacy Slater: Thank you, everyone, for joining us today. Enjoy the rest of your summer. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Stacy Slater: Thanks everyone for joining us today. Enjoy the rest of your summer.

Operator: Thank you.

Operator: This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. Thank you.

Speaker Change #147: Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.