Q3 2025 Brixmor Property Group Inc Earnings Call

Speaker #3: Greetings . Welcome to Brixmor Property Group Inc. incorporated . Third quarter 2020 Earnings Conference Call . At this time , all participants are in a listen only mode .

Operator: Greetings. Welcome to Brixmor Property Group Inc.'s Third Quarter 2025 Earnings Conference Call. 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 star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Stacy Slater, Senior Vice President, Investor Relations at Capital Markets. Thank you. You may begin.

Speaker #3: A question and answer session will follow the formal presentation . If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad .

Speaker #3: Please note this conference is being recorded . I will now turn the conference over to Stacy Slater Senior Vice President , Investor Relations and Capital Markets .

Speaker #3: Thank you. You may begin.

Speaker #4: Thank you . Operator and thank you all for joining Brixmor was third quarter conference call with me on the call today are Brian Finnegan interim CEO and the company's president and chief operating officer .

Stacy Slater: Thank you, Operator, and thank you all for joining Brixmor Property Group Inc.'s Third Quarter Conference Call. With me on the call today are Brian Finnegan, Interim CEO and the company's President and Chief Operating Officer, and Steven Gallagher, Chief Financial Officer. Mark T. Horgan, Executive Vice President and Chief Investment Officer, will also be available for Q&A. 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, actual future results may differ materially. We assume no obligation to update any forward-looking statements. Also, we will refer today to certain non-GAAP financial measures.

Speaker #4: And Steve Gallagher , chief Financial officer . Mark Horgan , Executive Vice president and chief investment officer , will also be available for Q&A .

Speaker #4: 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 .

Speaker #4: As described in our SEC filings and actual future results may differ materially . We assume no obligation to update any forward looking statements .

Speaker #4: 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 .

Stacy Slater: 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. Before turning the call to Brian, please note that out of respect for Jim's privacy, we will not be addressing any questions regarding his medical leave, and we refer you to the company's October 16th press release. We do ask that you join our Brixmor family in wishing Jim good health. Given the number of participants on the call, we kindly ask that you limit your questions to one per person. If you have additional questions, please re-queue. At this time, it's my pleasure to introduce Brian Finnegan.

Speaker #4: Before turning the call over to Brian, please note that out of respect for Jim's privacy, we will not be addressing any questions regarding his medical leave, and we refer you to the company's October 16th press release.

Speaker #4: We do ask that you join our Brixmor family and wishing Jim good health . Given the number of participants on the call , we kindly ask that you limit your questions to one per person .

Speaker #4: If you have additional questions , please requeue . At this time , it's my pleasure to introduce Brian Finnegan .

Speaker #5: Thanks , Stacey and good morning everyone . I first want to say on behalf of the entire Brixmor team that our thoughts go out to Jim and his family .

Brian Finnegan: Thanks, Stacy, and good morning, everyone. I first want to say on behalf of the entire Brixmor team that our thoughts go out to Jim and his family. We care about him deeply and are grateful for the well-wishes and support for him that we have received from across the industry. In the meantime, the team he built remains focused on executing our business plan, which, as demonstrated in the third quarter, continues to deliver outstanding results. As usual, those results begin with leasing. This quarter, we executed 1.5 million square feet of new and renewal leases at a blended cash spread of 18%. New leases during the quarter were signed at a record rate of $2,585 per square foot, as our team continues to capitalize on healthy demand to be in our well-located shopping centers.

Speaker #5: We care about him deeply and are grateful for the well wishes and support for him that we have received from across the industry .

Speaker #5: In the meantime , the team he built remains focused on executing our business plan , which is demonstrated in the third quarter , continues to deliver outstanding results .

Speaker #5: As usual , those results begin with leasing as this quarter we executed one point 5,000,000ft² of new and renewal leases at a blended cash spread of 18% .

Speaker #5: New leases during the quarter were signed at a record rate of 2585 per square foot . As our team continues to capitalize on healthy demand to be in our well-located shopping centers , we're seeing strong activity in both anchors and small shops , with small shop occupancy hitting another record at 91.4% with room to run as we deliver our reinvestment program .

Brian Finnegan: We're seeing strong activity in both anchors and small shops, with small shop occupancy hitting another record at 91.4%, with room to run as we deliver our reinvestment program. On the anchor front, the team is making progress on backfilling the spaces recaptured over the past year, with new leases executed during the quarter on those spaces with the likes of Marshalls, Total Wine & More, Bob’s Discount Furniture, and Cavender’s Boot City. Thanks to the continued strength in leasing, the signed-but-not-yet-commenced pipeline remains above $60 million, despite commencing a record $22 million of ABR during the quarter, which Steve will comment on further.

Speaker #5: And on the anchor front , the team is making progress on backfilling the spaces recaptured over the past year with new leases executed during the quarter .

Speaker #5: On those spaces with the likes of Marshalls , Total Wine and more . Bob's Discount Furniture and Cavender's Boot City . Thanks to the continued strength in leasing the sign , but not yet commenced , pipeline remains above $60 million despite commencing a record 22 million of ABR during the quarter , which Steve will comment on further new tenant openings are among the most exciting aspects of our business and the third quarter included Sprouts Farmers Market in Knoxville , Tennessee , Trader Joe's in suburban Denver , and several openings at two of our most impactful redevelopments , the Davis Collection and Davis , California , and block 59 .

Brian Finnegan: New tenant openings are among the most exciting aspects of our business, and the third quarter included Sprouts Farmers Market in Knoxville, Tennessee, Trader Joe’s in suburban Denver, and several openings at two of our most impactful redevelopments, the Davis Collection in Davis, California, and Block 59 in suburban Chicago. Staying with reinvestment, during the quarter, we stabilized eight value-enhancing projects with a total cost of approximately $46 million at an average incremental yield of 11%. This included College Plaza in Long Island, New York, where we added a new Chick-fil-A outparcel and reconfigured existing inline space for Burlington, Five Below, and Ulta, to complement a strong-performing ShopRite supermarket. We also stabilized the first phase of Barn Plaza in suburban Philadelphia, where earlier this year we opened Bucks County’s first new Whole Foods Market.

Speaker #5: In suburban Chicago . Staying with reinvestment during the quarter , we stabilized eight value enhancing projects with a total cost of approximately $46 million at an average incremental yield of 11% .

Speaker #5: This included College Plaza in Long Island , New York , where we added a new chick fil A Outparcel and reconfigured existing inline space for Burlington five below and Ulta to complement a strong performing Shoprite supermarket .

Speaker #5: We also stabilized the first phase of Barn Plaza in suburban Philadelphia , where earlier this year we opened Bucks County's first new Whole Foods Market .

Speaker #5: Thanks to the successful execution of the initial phase of that project by our North Region team . We're adding a second phase into our active pipeline .

Brian Finnegan: Thanks to the successful execution of the initial phase of that project by our North Region team, we're adding a second phase into our active pipeline this quarter, which includes first the portfolio new leases with Pottery Barn, Williams-Sonoma, Sephora, and Love's Set. This is one of the many examples across the portfolio where our reinvestment program is enabling us to attract a much higher caliber of tenant than we have historically. Finally, on reinvestment, our partnership with Publix Super Markets continues to grow as we announced our second new project of the year in Hilton Head, SC, with several more to follow in the future pipeline. Our percentage of ABR from grocery-anchored centers now sits at 82%. As we've seen a 35% increase in year-over-year traffic when we add a grocer, we're thrilled with the opportunities to add more grocers to the portfolio as we execute our reinvestment program.

Speaker #5: This quarter , which includes , first , the portfolio , new leases with Pottery Barn , Williams-Sonoma , Sephora , and Lovesac . This is one of the many examples across the portfolio where our reinvestment program is enabling us to attract a much higher caliber of tenant than we have historically .

Speaker #5: Finally , on reinvestment , our partnership with Publix continues to grow . As we announced our second new project of the year in Hilton Head , South Carolina , with several more to follow in the future .

Speaker #5: Pipeline . Our percentage of ABR from grocery anchored centers now sits at 82% , and as we've seen , at 35% increase in year over year traffic , when we add a grocer , we're thrilled with the opportunities to add more grocers to the portfolio as we execute our reinvestment program .

Speaker #5: Switching to transactions . As we discussed at length on our second quarter call , we closed on the $223 million acquisition of La Centerra at Cinco Ranch in suburban Houston and are pleased with our team's progress out of the gate .

Brian Finnegan: Switching to transactions, as we discussed at length on our second quarter call, we closed on the $223 million acquisition of LaCenterra at Cinco Ranch in suburban Houston and are pleased with our team's progress out of the gate, with seven new leases either signed or in process, all well ahead of our initial underwriting. Mark and team continue to raise attractive capital as we exited eight assets where we had maximized value since our last earnings call, bringing our total disposition volume year to date to $148 million. We continue to evaluate opportunities to put our platform to work and still expect to be net acquirers at year-end. To that end, we have approximately $190 million of value-add acquisitions under control and look forward to sharing more about these exciting acquisitions soon.

Speaker #5: With seven new leases, either signed or in process, all well ahead of our initial underwriting mark, and the team to continue to raise attractive capital.

Speaker #5: As we exited eight assets where we had maximized value since our last earnings call , bringing our total disposition volume year to date to 148 million .

Speaker #5: We continue to evaluate opportunities to put our platform to work and still expect to be net acquirers at year end . To that we have approximately 190 million of value added acquisitions under control and look forward to sharing more about these exciting acquisitions soon .

Speaker #5: To summarize , our team continues to execute on all end , , attracting great tenants in a supply fronts constrained environment at the highest rents we've ever achieved .

Brian Finnegan: To summarize, our team continues to execute on all fronts, attracting great tenants in a supply-constrained environment at the highest rents we've ever achieved. Our redevelopment platform continues to deliver low-risk, compelling returns with several years of runway for future growth. On the transaction front, we're well-positioned to continue to recycle capital out of low-growth assets into those where we see the opportunity to create value through our operating platform. Thank you to the Brixmor team for your continued focus and effort as we continue to create value for our stakeholders. With that, I'll hand the call over to Steve for a more detailed review of our financial results. Steve.

Speaker #5: Our redevelopment platform continues to deliver low risk , compelling returns , with several years of runway for future growth . And on the transaction front , we're well positioned to continue to recycle capital out of low growth assets into those where we see the opportunity to create value through our operating platform .

Speaker #5: Thank you to the Brixmor team for your continued focus and effort as we continue to create value for our stakeholders . With that , I'll hand the call over to Steve for a more detailed review of our financial results .

Speaker #5: Steve . Thanks , Brian . I'm pleased to report on another strong quarter of execution by the Brixmor team . As we continue to .

Steven Gallagher: Thanks, Brian. I'm pleased to report on another strong quarter of execution by the Brixmor team as we continue to stack rent commencements from the SNK pipeline that will accelerate growth over the next several quarters. NAREIT FFO was $0.56 per share in the third quarter, driven by same-property NOI growth of 4%. As expected, base rent growth decreased to a 270 basis point contribution due to a 150 basis point drop in billed occupancy compared to the third quarter of last year. We expect base rent growth to accelerate into 2026 as billed occupancy rebounds, and we continue to commence rent from the SNK pipeline at higher rents.

Speaker #6: Stack rent commencement from the snow pipeline that will accelerate growth over the next several quarters . Nareit FFO was $0.56 per share in the third quarter , driven by same NOI growth of 4% .

Speaker #6: As expected , base rent growth decreased to a 270 basis point contribution due to a 150 basis point drop in blood occupancy compared to the third quarter of last year .

Speaker #6: We expect base rent growth to accelerate into 2026 , as build occupancy rebounds , and we continue to commence rent from this pipeline at higher rents .

Speaker #6: Additionally , revenues deemed uncollectible contributed 80 basis points to growth in the quarter . As we turned to the lower end of our historical run rate of 75 to 110 basis points of total revenue .

Steven Gallagher: Additionally, revenue deemed uncollectible contributed 80 basis points to growth in the quarter as we trend to the lower end of our historical run rate of 75 to 110 basis points of total revenue, given the improvement in our underlying tenant credit. As Brian noted, we commenced a record high $22 million of new ABR in the quarter, and capitalizing on the strong leasing environment, we executed $16 million of new leases at a record high $25.85 per square foot and ended the third quarter with a 390 basis point spread between leased and billed occupancy. Our signed-but-not-yet-commenced pipeline totaled $60 million, which includes $53 million of net new rent. In addition, the blended annualized rent per square foot on the signed-but-not-yet-commenced pool is $22.30 per square foot, approximately 21% above our portfolio average, reflecting the below-market rent basis in our centers.

Speaker #6: Given the improvement in our underlying tenant credit . As Brian noted , we commenced a record high 22 million of new ABR in the quarter and capitalizing on the strong leasing environment , we executed 16 million of new leases at a record high $25.85 per square foot , and ended the third quarter with a 390 basis point spread between leased and build occupancy .

Speaker #6: Our assigned , but not yet , commenced , pipeline totaled 60 million , which includes 53 million of net new rent . In addition , the blended annualized rent per square foot on the sign , but not yet commenced pool is $22.30 per square foot , approximately 21% above our portfolio average , reflecting the below market rent basis in our centers .

Speaker #6: We expect 80% of this pipeline to commence by the end of 2026 , with 2026 commencements slightly weighted to the first half of that period .

Steven Gallagher: We expect 80% of the SNK pipeline to commence by the end of 2026, with 2026 commencements slightly weighted to the first half of that period. From a balance sheet perspective, as of September 30, we had $1.6 billion of available liquidity, including approximately $400 million from our September 2025 4.85% issuance, which pre-funded our June 2026 maturity of $600 million at 4.125%. One note on the capital markets front, our SEC shelf registration statement is due to expire next month, so we'll be filing a replacement shelf registration statement this week. As part of that process, we'll also be reviewing our existing ATM program and DRIP. We will also be extending our buyback program for another three years, which together will continue to provide Brixmor with maximum flexibility to capitalize on a wide range of potential capital market environments and support the long-term execution of our business plan.

Speaker #6: From a balance sheet perspective , at September 30th , we had 1.6 billion of available liquidity , including approximately 400 million from our September 2025 , 4.85% issuance , which pre-funded our June 2026 maturity of 600 million at 4.125 .

Speaker #6: One note on the capital markets front , our SEC shelf registration statement is due to expire next month , so we'll be filing a replacement shelf registration statement this week as part of that process , we'll also be reviewing our existing ATM program and Drip .

Speaker #6: We will also be extending our buyback program for another three years , which together will continue to provide bricks more with maximum flexibility to capitalize on a wide range of potential capital market environments and support the long term execution of our business plan .

Speaker #6: We are pleased to announce a 7% increase in our annual dividend to a rate of $1.23 . The revised dividend , which approximates taxable income , allows the company to retain as much free cash flow as possible while meeting our REIT dividend requirements .

Steven Gallagher: We are pleased to announce a 7% increase in our annual dividend to a rate of $1.23. The revised dividend, which approximates taxable income, allows the company to retain as much free cash flow as possible while meeting our dividend requirements. In terms of our forward outlook, we have updated our FFO guidance to $2.23 to $2.25 and affirmed our same-property NOI range of 3.9% to 4.3%. Our increased FFO expectations are driven by higher than expected lease settlement income in the fourth quarter as we continue to capitalize on opportunities to proactively recapture and accretively backfill space. We expect lease settlement income to be a headwind to 2026 FFO growth.

Speaker #6: In terms of our forward outlook , we have updated our FFO guidance to $2.23 to $2.25 and affirmed our same property NOI range of 3.9 to 4.3% .

Speaker #6: Our increased FFO expectations is driven by higher than expected lease income in the fourth quarter . As we continue to capitalize on opportunities to proactively recapture and backfill space .

Speaker #6: As such, we expect lease income to be a headwind to 2026 FFO growth. We are excited about how we are positioned heading into next year with significant tailwinds from 2025.

Steven Gallagher: We are excited about how we are positioned heading into next year with significant tailwinds from 2025 rent commencements, a strong snow pipeline, and reduced exposure to at-risk tenancy, coupled with the strong demand from tenants to locate in our centers. With that, I'll turn the call over to the operator for Q&A.

Speaker #6: Rent commencements , a strong snow pipeline , and reduced exposure to at risk tenancy coupled with the strong demand from tenants to locate in our centers .

Speaker #6: And with that , I'll turn the call over to the operator for Q&A .

Speaker #3: Thank you. If you would like to ask a question, please press Star One on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions. Our first question is from Michael Goldsmith with UBS. Please proceed.

Speaker #3: You may press *2 if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker #3: One moment while we pull for questions . Our first question is from Michael Goldsmith with UBS . Please proceed .

Speaker #7: Good morning . Thanks a lot for taking my question . Steve , question for you on the implied acceleration of the same trend .

[Analyst 1]: Good morning. Thanks a lot for taking my question. Steve, question for you on the implied acceleration of the same-store NOI growth in the fourth quarter. Can you walk through kind of the contributing factors there? Is that a function of the SNO pipeline being activated, what you've already done, what is due in the fourth quarter? Also, can you just talk about the role of the comparisons in the accelerations and just the sustainability of that? Thanks.

Speaker #7: Growth in the fourth quarter. Can you walk through kind of the contributing factors there? You know, is that a function of the snow pipeline being activated?

Speaker #7: What you've already done , what you've what what is due in the fourth quarter . And then also , can you just talk about the role of the comparisons in the acceleration to just the sustainability of that ?

Speaker #7: Thanks .

Speaker #6: Sure . Yeah . I mean , as we talked about , we commenced 22 million of rent in the quarter , right . And we've talked a lot over the last several quarters about just the stacking of rent and how that provides growth heading into future quarters .

Steven Gallagher: Sure. Yeah. I mean, as we talked about, we commenced $22 million of rent in the quarter, right? We've talked a lot over the last several quarters about just the stacking of rent and how that provides growth heading into future quarters. You obviously get a partial benefit of that rent that commenced in the quarter, and then you get another partial benefit in Q4 as it's fully in for the entire quarter. You also have approximately $19 million of rent that we expect to commence between the end of the third quarter and fourth quarter that will provide growth into that quarter as well. I think the only other thing I would just remind you is when you look to the prior year quarter ending 9/30, the entirety of the tenant disruption that we've experienced over the last year was in and billing as of that period.

Speaker #6: So you obviously get a partial benefit of that rent that commenced in the quarter . And then you get another partial benefit in Q4 as it fully in for the entire quarter .

Speaker #6: And then you also have approximately 19 million of rent that we expect to commence between , you know , the end of the third quarter and fourth quarter .

Speaker #6: That will provide growth into that quarter as well . I think the only other thing I would just , remind you is when you look to the the prior year , quarter ending 930 , you know , the entirety of the tenant disruption that we've experienced over the last year was in and billing as of that period .

Speaker #6: So that that rent starts to fall off the fourth quarter and then through 2025 , just as you're thinking about the year over year comparisons .

Steven Gallagher: That rent starts to fall off the fourth quarter and then through 2025, just as you're thinking about the year-over-year comparisons. What we're really looking forward to is that tailwind that the commencements of the snow pipeline is providing.

Speaker #6: But what we're really , you know , looking forward to is that tailwind that the commencement of the snow pipeline is providing .

Speaker #5: Yeah . Michael , I would just add what we're really excited about there on the commencement front too , is some of these larger redevelopments starting to come online , like block 59 in Chicago , which I mentioned .

Brian Finnegan: Yeah. Michael, I would just add what we're really excited about there on the commencement front, too, is some of these larger redevelopments starting to come online, like Block 59 in Chicago, which I mentioned. We're also seeing the first of the boxes that we backfilled last year that we took back at the end of the year starting to come online as well, two Ross boxes that we opened last week. Everything that Steve said, again, gives us good visibility to the end of the year, but some anecdotes there in terms of the nature of that as well.

Speaker #5: We're also seeing the first of the boxes that we backfilled last year, which we took back at the end of the year, starting to come online as well.

Speaker #5: To Ross, the boxes that we opened last week. So everything that Steve said again gives us good visibility to the end of the year.

Speaker #5: But some anecdotes there in terms of the nature of that as well .

Speaker #7: Thank you very much. Good luck in the fourth quarter.

[Analyst]: Thank you very much. Good luck in the fourth quarter.

Speaker #8: Thanks , Michael .

Steven Gallagher: Thanks, Michael.

Speaker #3: Our next question is from near Canal with Bank of America . Please proceed .

Operator: Our next question is from Sneha Kanal with Bank of America. Please proceed.

Speaker #9: Thank you . I guess , Brian , in your opening remarks , you talked about shop occupancy hitting another record , and you also stated there's more room to run .

[Analyst 2]: Thank you. I guess, Brian, in your opening remarks, you talked about shop occupancy hitting another record, and you also stated there's more room to run. Maybe expand on those comments as we think about occupancy in the next year. Thanks.

Speaker #9: Maybe expand on those comments as we think about occupancy in the next year . Thanks .

Speaker #5: Yeah , we've been pleased with the progress on the on the shop front . As I mentioned . But if you look at that future reinvestment pipeline , we're several hundred basis points below where occupancy sits today .

Brian Finnegan: Yeah. We've been pleased with the progress on the shop front, as I mentioned. If you look at that future reinvestment pipeline, we're several hundred basis points below where occupancy sits today. When we've seen historically, as we bring those projects on, you're seeing a lift in shop occupancy. We do feel like we have several hundred basis points more to run. You think about the nature of those projects in that future reinvestment pipeline, a great future pipeline that we have with Publix. Think about Plano, Texas, other projects that we have in Florida, suburban Atlanta, metro New York, which gives us real good visibility in our ability to drive that forward. That's really that piece in terms of what's left and our ability to get it even higher than it is today, which, again, we're pretty pleased about.

Speaker #5: And what we've seen historically as we bring those projects on , you're seeing a lift in shop occupancy . So we do feel like we have several several hundred basis points more to run .

Speaker #5: And then you think about the nature of those projects in that future reinvestment pipeline , a great future pipeline that we have with Publix .

Speaker #5: Think about Plano , Texas , other projects that we have in Florida , suburban Atlanta , metro New York , which gives us real good visibility in our ability to drive that forward .

Speaker #5: So that's really that piece in terms of what's left . And our ability to get it even higher than it is today , which again , we're pretty pleased about .

Speaker #9: Thank you .

[Analyst 2]: Thank you.

Speaker #5: You got it .

Brian Finnegan: You got it.

Speaker #3: Our next question is from Craig Mailman with Citigroup . Please proceed .

Operator: Our next question is from Craig Melman with Citigroup. Please proceed.

Speaker #10: Hey . Good morning guys . Brian , you had mentioned some additional acquisitions that are in the pipeline . Could you just go through what the opportunity set looks like and where cap rates are trending and kind of are these going to be more like Los and Terra that are longer term opportunities that maybe aren't initially accretive ?

[Analyst]: Hey, good morning, guys. Brian, you had mentioned some additional acquisitions that are in the pipeline. Could you just go through what the opportunity set looks like, and you know where cap rates are trending? Are these going to be more like LaCenterra that are longer-term opportunities that maybe aren't initially accretive, or are there some stabilizing there that can kind of boost FFO in the near term as well?

Speaker #10: Or are there some stabilized in there that can kind of boost FFO in the near term as well ?

Speaker #5: Craig , I'll hand this to Mark , but I would just say we're really pleased with what we're seeing on the transaction front , but also pleased with not just what we're doing out of the gate in Los and Terra , but what we're doing out of the gate with the 300 million of acquisitions that we closed last year .

Brian Finnegan: Okay. Craig, I'll hand this to Mark, but I would just say we're really pleased with what we're seeing on the transaction front, also pleased with not just what we're doing out of the gate at LaCenterra, but what we're doing out of the gate with the $300 million of acquisitions that we closed last year. Maybe I'll hand it to Mark to give an overview on what he's seeing in the market.

Speaker #5: So maybe I'll hand it to Mark to give an overview on what he's seeing in the market. Sure.

Mark T. Horgan: Sure. You know the market remains really competitive. As we've discussed on past calls, we're seeing new entrants, and capital actually on the sidelines really seeking exposure to open-air retail. A lot of that capital is actually seeking smaller, simple grocery anchor deals. What's interesting is that that's really allowing us the opportunity to be efficient when we capital recycle. We're selling some assets where we see low hold IRRs from our perspective, well below IRRs than we'd like to generate. We've got the ability to recycle that capital into assets like LaCenterra at Cinco Ranch, where we see really strong growth and the ability to drive strong IRRs and really drive our return on invested capital from here. With respect to the deals that we're buying, we really try to focus on, from an acquisition perspective, value-add opportunities.

Speaker #11: You know , the market remains remains really competitive . As we've discussed on past calls , we're seeing new entrants in capital actually on the sidelines , really seeking exposure to open air retail .

Speaker #11: A lot of that capital is actually seeking smaller , simple , grocery anchored deals . And so it's interesting is that that's really allowing us the opportunity to be efficient when we capital recycle and we're selling some assets where we see low hold IRR from our perspective well below IR .

Speaker #11: And we'd like to generate . We've got the ability to recycle that capital into assets like Los and Terra , where we see really strong growth and the ability to drive strong , strong IRR and really drive our return on invested capital from here .

Speaker #11: With respect to the deals that that we're buying , we really try to focus on from an acquisition perspective , value added opportunities .

Speaker #11: So the ones that were in the pipeline today , which we think will continue to grow over time , that pipeline will continue to grow .

Mark T. Horgan: The ones that are in the pipeline today, which we think will continue to grow over time, that pipeline will continue to grow. They look pretty similar to LaCenterra at Cinco Ranch in that they have very strong growth opportunities where we're going to leverage our platform to drive strong cash flows through occupancy gain, through rent mark-to-market, and some redevelopment. I would say the ones that we're looking at today are not lifestyle centers. They're more traditional open-air retail centers that fit right into our platform.

Speaker #11: They look pretty similar to to Los and Terra in that they have very strong growth opportunities . We're going to leverage our platform to drive strong cash flows through occupancy gain through rent mark to market , and some redevelopment .

Speaker #11: I would say they're the ones that we're looking at today , are not lifestyle centers . They're more traditional open air , open air retail centers that fit right right into our platform .

Speaker #11: A good example on one of those assets , we're using a platform to drive an immediate increase in an anchor rent that's giving us better growth through the term of that anchor rent and increasing the going in cap rate by about 50 basis points , which you feel is very compelling from an acquisition perspective .

Mark T. Horgan: A good example on one of those assets is we're using our platform to drive an immediate increase in an anchor rent that's giving us better growth through the term of that anchor rent and increasing the going-in cap rate by about 50 basis points, which you'd feel is very compelling from an acquisition's perspective and really, I think, speaks to the strength of the platform as we think about future acquisitions from here.

Speaker #11: And really, I think this speaks to the strength of the platform as we think about future acquisitions from here.

Speaker #5: Thanks .

Speaker #11: Craig .

Brian Finnegan: Thanks, Craig.

Speaker #3: Our next question is from Michael Griffin with Evercore ISI . Please proceed .

Operator: Our next question is from Michael Griffin with Evercore ISI. Please proceed.

Speaker #12: Great . Thanks . And first of all , my thought to Jim and his family wishing him a speedy recovery . Brian , maybe you could talk a little bit about how the leasing pipeline looks as we head into next year ?

[Analyst]: Great. Thanks. First of all, my thoughts to Jim and his family, wishing him a speedy recovery. Brian, maybe you could talk a little bit about how the leasing pipeline looks as we head into next year. I mean, are retailers still looking to expand and grow their business? You guys have done some pretty strong new leasing year to date, but just give us a sense of what those conversations are like, kind of caveating that, you know, while it seems like we've gotten some trade deals done, there is still this macro uncertainty as it relates to tariffs and the potential impact to retailers. Thank you.

Speaker #12: I mean , are retailers still looking to expand and grow their business ? You guys have done some pretty strong new but just give us a sense of what those conversations are like .

Speaker #12: Kind of caveating that , you know , while it seems like we've gotten some trade deals done , there is still this macro uncertainty as it relates to tariffs and the potential impact to retailers .

Speaker #12: Thank you .

Speaker #5: We appreciate the kind words about Jim Michael, and we remain very optimistic and encouraged by what we're seeing in the leasing environment.

Brian Finnegan: We appreciate the kind words about you, Michael. We remain very optimistic and encouraged by what we're seeing in the leasing environment. The pipeline today is higher than it was a year ago, despite the fact that we've signed 10% more in GLA this year. The retailers who we're growing with are not only looking to add store count in both infill locations and where they have additional white space with specialty grocers, off-price apparel, health and wellness operators. The tenants are performing. If you listen to those second quarter calls, you saw you heard some very strong results from a lot of the retailers that we continue to grow with. From a tariff perspective, they've been able to navigate this with suppliers.

Speaker #5: The pipeline today is higher was a year ago . Despite the fact that we've signed 10% more in GLA this year . The retailers who were growing with are not only looking to add store count in both infill locations and where they have additional white space with specialty grocers off price apparel , health and wellness operators .

Speaker #5: The tenants are performing . If you listen to those second quarter calls you saw , you heard some very strong results from a lot of the retailers that we continue to grow with from a tariff perspective , they've been able to navigate this with suppliers .

Speaker #5: And so as we think about our core tenant mix , as well as the new operators who are expanding with us in the portfolio , they continue to have strong open to buys as they head into 2026 .

Brian Finnegan: As we think about our core tenant mix, as well as the new operators who are expanding with us in the portfolio, they continue to have strong open to buys as they head into 2026. Interestingly, we have a full slate for New York ICSE coming up in a few weeks. Those discussions will be primarily around 2027, right? There's still deals that we're signing towards the end of the year that we're going to get open in late 2026. Part of that focus, too, is 2027 pipeline. We remain very encouraged. We continue to keep a close eye to see if there are any cracks in that, but to date, we're really not seeing it.

Speaker #5: And interestingly , we have a full slate for New York iCSC coming up in a few weeks . Those discussions will be primarily around 27 , right ?

Speaker #5: There's still deals that we're signing towards the end of the year that we're going to get open in late 26 . Part of that focus , too , is 2027 pipeline .

Speaker #5: So we remain very encouraged . We continue to keep a close eye to see if there are any cracks in that . But to date , we're really not seeing it .

Speaker #5: .

Speaker #12: Great . Thanks so much .

[Analyst]: Great, thanks so much.

Brian Finnegan: Welcome.

Speaker #3: Our next question is from Todd Thomas with KeyBanc Capital Markets . Please proceed .

Operator: Our next question is from Todd Thomas with KeyBank Capital Markets. Please proceed.

Speaker #13: Hi . Thanks . I wanted to go back to the same store growth and ask a bit about the building blocks for 26 .

[Analyst 3]: Hi. Thanks. I wanted to go back to the same-store growth and ask a bit about the building blocks for 2026, if I could. You talked about the headwinds from bankruptcies and tenant disruptions for the year. I think you noted it was about 230 basis points last quarter. Any early thoughts about how we should think about that drag today as we look into 2026, whether you expect that to alleviate or do you see a similar level of drag?

Speaker #13: If I could . You talked about the headwinds from bankruptcies and tenant disruptions for the year . I think you noted it was about 230 basis points last quarter .

Speaker #13: Any early thoughts about how we should think about that drag today as we look into 26 , whether you expect that to alleviate or do you see a similar level of drag ?

Speaker #6: Yeah . I mean , as we sit here today , right . I think the one thing we've talked about a lot over the last couple of quarters is just the reduced exposure we have to at risk tenants .

Brian Finnegan: Yeah. I mean, as we sit here today, I think the one thing we've talked about a lot over the last couple of quarters is just the reduced exposure we have to at-risk tenancy. When you look at our watchlist today versus even versus our peer, but especially compared to 5, 10 years ago, you just see a lot less exposure to some of those names that you all were worried about, as were we, Big Lots, Party City, JoAnn's. You're seeing more exposure to things like Whole Foods, Sprouts, Publix. I think as you look into 2026, obviously, one of the headwinds is going to be we did recognize rent for that bankruptcy space in 2025. That's not going to recur in 2026. I think sitting here today, there doesn't look to be a lot of significant tenant disruption out there moving forward.

Speaker #6: Right . When you look at our our watch list today versus even versus our peer . But especially compared to five , ten years ago .

Speaker #6: Right . You just see a lot less exposure to some of those names that you all were worried about , as were we big Lots , Party City , Jo-ann's and and you're seeing more exposure to things like Whole Foods , sprouts , Publix .

Speaker #6: Right . So so I think as you look into 26 , I mean , obviously one of the headwinds is going to be we did recognize rent for that space in 25 .

Speaker #6: That's not going to recur in 26 . Right . But I think sitting here today there doesn't look to be a lot of significant tenant disruption out there moving forward .

Speaker #6: Obviously , you know , we'll see how the next couple of quarters play out . But you know we really feel comfortable sitting here today with the tailwind from that snow pipeline commencing in in 25 .

Brian Finnegan: Obviously, you know we'll see how the next couple of quarters play out. You know we really feel comfortable sitting here today with the tailwind from that snow pipeline commencing in 2025 and then also into 2026. Obviously, you know just reminding that there is some BK headwind for the rent we recognize in 2025.

Speaker #6: And then also into 26 . But but obviously , you know , just reminding that there is some headwind for the rent we recognized in 25 .

Speaker #13: Okay . Thank you .

[Analyst 3]: Okay, thank you.

Speaker #5: Thanks , Todd .

Brian Finnegan: Thanks, Todd.

Speaker #3: Our next question is from Greg McGinnis with Scotiabank. Please proceed.

Operator: Our next question is from Greg Manguinis with Scotiabank. Please proceed.

Speaker #14: Hey , good morning Brian . I just wanted to touch back on the tenant health commentary . You know , looking at the bad debt expense guidance was maintained .

[Analyst 4]: Hey, good morning. Brian, I just wanted to touch back on the tenant health commentary. You know, looking at the bad debt expense, guidance was maintained, and despite previously trending towards the low end, Q3 was up versus Q2. Could you just provide some insight on that increase? Then generally, more generally, how you're feeling about the range in the year end?

Speaker #14: And despite previously trending towards the low end, Q3 was up versus Q2. Could you just provide some insight on that increase?

Speaker #14: And then generally more generally , how you're feeling about the range in the year at .

Speaker #5: Well , I'll let Steve hit the guidance piece , but just to expand on what he just said . Right . Our office supply exposure has been cut in half .

Brian Finnegan: I'll let Steve hit the guidance piece, but just to expand on what he just said, right? Our office supply exposure has been cut in half. We have a very low drugstore exposure. If you look, we have 17% of our ABR comes from local tenants. The underlying credit quality of the tenants who backfilled the space we took back over the last year is very strong. We feel very confident in terms of where that watchlist exposure sits today. There are always categories that we're keeping a close eye on. As Steve noted, that has dropped meaningfully from where this portfolio was historically. Steve, maybe you could touch on the guidance piece.

Speaker #5: We have a very low drugstore exposure . If you look , we have 17% of our ABR comes from local tenants and the and the underlying credit quality of the tenants who backfilled the space .

Speaker #5: We took back over the last year is very strong . So we feel very confident in terms of where that watch list exposure sits today .

Speaker #5: There's always categories that we're keeping a close eye on, but as Steve noted, that has dropped meaningfully from where this portfolio was historically.

Speaker #5: And Steve , maybe you could touch on the guidance piece .

Speaker #6: Yeah , I mean , obviously we are trending to the lower end of the range . I'm still within the range . I just remind you about things we've talked about over the last couple of years .

Steven Gallagher: Yeah. I mean, obviously, we are trending to the lower end of the range. I'm still within the range. I'd just remind you about things we've talked about over the last couple of years, right, is the first half of the year, due to some of the out-of-period cash collections on real estate taxes, generally has a lower when you're just looking at it as a % of total revenue. The back end is typically a little bit higher. You know, I think we feel comfortable where we're headed within the range. I'd just remind you that third and fourth quarter, when you're looking at it as a %, is a little bit higher. I think when you're comparing to the prior year, obviously, it's a favorable trend.

Speaker #6: Right . Is the first half of the year due to some of the out of period cash collections on real estate taxes generally has a lower when you're just looking at as a percentage of total revenue .

Speaker #6: And then the back end is typically a little bit higher . So , you know , I think we feel comfortable where we're headed within the range .

Speaker #6: But I just remind you that the third and fourth quarters, when you're looking at as a percentage, are a little bit higher.

Speaker #6: But I think when you're comparing to the prior year , obviously it's a favorable trend .

Speaker #14: Okay . Thank you .

[Analyst 4]: Okay, thank you.

Speaker #5: Thanks , Greg .

Steven Gallagher: Thanks, Craig.

Speaker #3: Our next question is from Alexander Goldfarb with Piper Sandler . Please proceed .

Operator: Our next question is from Alexander Goldfarb with Piper Sandler. Please proceed.

Speaker #15: Hey , good morning . And just echoing the speedy recovery thoughts for Jim . Mark , you know , the cap rates in the acquisition world are definitely come in .

[Analyst 3]: Hey, good morning. Just echoing the speedy recovery thoughts for Jim. Mark, you know the cap rates in the acquisition world have definitely come in, even Power Center. I know you guys really aren't looking at that, but even that's getting a strengthening bid. As you look at your opportunity set, do you sort of have a minimum threshold where you're like, "We can't buy below X yield because the deals need to be accretive from day one"? Just trying to understand, with more focus on REITs delivering earnings growth, true earnings cash flow growth, do you find that you have a floor that you won't go below, or how do you balance that given the increased competition for assets?

Speaker #15: Even power center . I know you guys really aren't looking at that , but even that's getting a strengthening bid as you look at your opportunity set , do you sort of have a minimum threshold where you're like , we can't buy below X yield because the deals need to be accretive from day one ?

Speaker #15: Just trying to understand , you know , with more focus on REITs delivering earnings growth through , you know , true earnings , cash flow growth , do you find that you have a floor that you won't go below , or how do you balance that given the increased competition for assets ?

Speaker #11: Look , I think everyone in the room understands that our job is to grow earnings , and that's what we're going to be focused on over time .

Mark T. Horgan: Look, I think everyone in the room understands that our job is to grow earnings at Brixmor, and that's what we're going to be focused on over time. Our acquisitions program historically and today remains focused on driving high unlevered IRRs. When we look at the deals we've been delivering, that tends to be in that 9.5% to 10.5% range. When we find compelling opportunities, we're going to go after them to acquire. Last year, we acquired Britain Plaza, pardon me, down in Tampa, which was a lower going-in yield where we see very, very significant value-add opportunities in that asset. We're not going to pass up the ability to buy something like a Britain Plaza in the future. With that said, the assets we're working on today, we think have attractive going-in yields and growth. We're really focused on both parts of that plan from an acquisitions perspective.

Speaker #11: Our acquisitions program historically and today remains focused on driving high unlevered IRR . When we look at the deals we've been delivering that that tends to be in that nine and a half to 10.5% range .

Speaker #11: So when we find compelling opportunities , we're going to go after them to to acquire . Last year we acquired Plaza Britain or Britain Plaza down in Tampa , which was a lower going in yield where we see very , very significant value add opportunities in that asset .

Speaker #11: So we're not going to pass up the ability to buy something like a plaza . Britain in the future . With that said , the assets are working on today , we think have attractive going in yields and growth .

Speaker #11: So we're really focused on on both parts of that plan from an acquisitions . .

Speaker #5: And now since we're funding that through capital recycling , we're funding that with assets that we don't see that long term growth potential into assets .

Brian Finnegan: Since we're funding that through capital recycling, we're funding that with assets that we don't see that long-term growth potential into assets, just to Mark's point, where we do. With everything Mark said, we feel that there are a lot of compelling opportunities out there for us today, despite the fact that it is a competitive market.

Speaker #5: To Mark's point , where we do so with everything , Mark said , we feel that there are a lot of compelling opportunities out there for us today , despite the fact that it is a .

Speaker #16: Competitive market .

Speaker #11: The other thing I would add , and we've talked about this in the past , we continue to mine out things like land parcels in this portfolio , which , you know , are not yielding any , any cash flow today or yielding negative cash flow given the carry costs .

Mark T. Horgan: The other thing I would add, we've talked about this in the past, we continue to mine out things like land parcels in this portfolio, which you know are not yielding any cash flow today or yielding negative cash flow given the carry cost. We did that earlier this year. We have some in our pipeline today that, again, will provide us some really well-priced capital to put to work in the acquisitions market.

Speaker #11: We did that earlier this year . We have some we have some in our pipeline today that again , will provide us some some really well-priced capital to put to work in the acquisitions market .

Speaker #15: Thank you .

[Analyst]: Thank you.

Speaker #16: Thanks , Alex .

Mark T. Horgan: Thanks, Alex.

Speaker #3: Our next question is from Cooper Clarke with Wells Fargo. Please proceed.

Operator: Our next question is from Cooper Clark with Wells Fargo. Please proceed.

Speaker #17: Great . Thanks for taking the question . It looks like MNA came down in the quarter around 2 to 3 million . Curious what drove this .

[Analyst 4]: Great. Thanks for taking the question. It looks like G&A came down in the quarter around $2 to $3 million. Curious what drove this and if $26 million is a good run rate moving forward or if it was driven by a more one-time item.

Speaker #17: And if 26 million is a good run rate ? Moving forward , or if it was driven by a more one timing item ?

Speaker #6: Yeah . I mean , we're obviously not going to provide guidance on G&A right now , but if you just look at the comparison to the prior quarter , we did do a restructuring in the prior year , which did have a charge in that quarter .

Brian Finnegan: Yeah. I mean, we're obviously not going to provide guidance on G&A right now. If you just look at the comparison to the prior quarter, we did do a restructuring in the prior year, which did have a charge in that quarter and importantly gave us a better run rate going forward of a reduced G&A, which you're seeing in that line year to date. It's really about the comparison and what happened in the prior quarter. You know we feel pretty comfortable where G&A is today.

Speaker #6: And importantly, it gave us a better run rate going forward of a reduced G&A, which you're seeing in that line year to date.

Speaker #6: So it's really about the comparison of what happened in the prior quarter . You know , we we feel pretty comfortable where where G&A is today .

Speaker #17: Great . Thank you .

[Analyst 4]: Great, thank you.

Speaker #5: Thank you .

Mark T. Horgan: Thank you.

Speaker #3: Our next question is from Juan Sanabria with BMO Capital Markets . proceed .

Operator: Our next question is from Juan Sanabrio with BMO Capital Markets. Please proceed.

Speaker #3: Please

Speaker #18: Hi . Good morning . And thoughts with Jim and his family . I just wanted to ask about the public's relationship . You kind of noted at the top in your prepared remarks and what we could see going forward .

[Analyst]: Hi. Good morning. Thoughts with Jim and his family. I just wanted to ask about the Publix relationship you kind of noted at the top in your prepared remarks and what we could see going forward, any opportunities for some greenfield developments?

Speaker #18: Any opportunities for some greenfield developments ?

Speaker #5: Yeah . Well , first , touching on the public's relationship , one , our South Region team has had a long standing relationship with them .

Brian Finnegan: Yeah. First, touching on the Publix Super Markets relationship, Juan, our South Region team has had a longstanding relationship with them. We've done into the double-digit projects in terms of in-place redevelopments. We've got two new projects that we've done this quarter in Southeast Florida and Hilton Head, South Carolina, which we recently announced. We just announced yesterday another redevelopment in St. Pete with them. We've got a long pipeline with them and a great partnership in terms of they've been reinvesting, like a lot of our grocery partners, in their stores in both Florida and some other Southeast markets. The team in the South Region has done a fantastic job with them, and we look forward to continuing to see that grow. You can see many of those projects in the future pipeline. As it relates to new development, our focus is on redevelopment.

Speaker #5: We've done into the double digit projects in terms of in redevelopments . We've got two new projects that we've done this quarter and Southeast Florida and Hilton Head , South Carolina , which we recently announced .

Speaker #5: We just announced yesterday another redevelopment in

Speaker #5: So the team in the South region has done a fantastic job with them , and we look forward to continuing to see that grow .

Speaker #5: And you can see many of those projects in the future . Pipeline . As it relates to new development . Our focus is on redevelopment .

Speaker #5: We've got several years of runway , a future growth and that future reinvestment pipeline . As Mark touched on , he's adding additional opportunities to that as well .

Brian Finnegan: We've got several years of runway of future growth in that future reinvestment pipeline. As Mark T. Horgan touched on, he's adding additional opportunities to that as well. Never say never because we do have great relationships with the likes of Publix Super Markets, The Kroger Co., HEB. I could go down the list that we have a lot of we've had a lot of good rapport, not just rapport with, but we've been able to execute with historically. We'll continue to look at things, but generally, that focus is going to be on redevelopment.

Speaker #5: Never say never because we do have great relationships with the likes of Publix , Kroger , H-e-b . I could go down the list that we have a lot of .

Speaker #5: We've had a lot of good report , not just rapport with , but we've been able to execute with historically . So we'll continue to look at things .

Speaker #5: But generally that focus is going to be on redevelopment .

Speaker #3: Our next question is from Handel Saint Juste, with Mizuho Securities. Please proceed.

Operator: Our next question is from Handeul St. Juste with Mizuho Securities. Please proceed.

Speaker #19: Hey there. Thanks for taking my question, and best wishes to Jim. I wanted to build on the last question. It looked like the average yield for redevelopment projects ticked down a bit sequentially to 9% versus 10% last quarter.

[Analyst 5]: Hey there. Thanks for taking my question. Best wishes to Jim. I wanted to build on the last question. It looks like the average yield for redevelopment projects ticked down a bit sequentially to 9% versus 10% last quarter. Is that a mix issue? Are you starting to see the impact of tariffs or higher costs? Maybe this is a new level we should expect near term. Some thoughts broadly, I guess, on minimum yield or hurdles in light of the lower debt costs. I'm curious if you're changing that at all in light of lower debt costs. Thanks.

Speaker #19: Is that a mixed issue ? We starting to see the impact of tariffs or higher costs . And maybe this is a new level .

Speaker #19: We should expect near term . And then some thoughts broadly I guess on minimum yield or hurdles in light of the lower debt costs .

Speaker #19: And curious if if you're changing that at all in light of lower debt costs . Thanks .

Speaker #20: Yeah .

Brian Finnegan: If you look at where we've said historically and where we've been delivering, it's been high single-digit, low double-digit returns. It's just effectively the mix that we had of what was stabilizing during the quarter. As we look out in that future reinvestment pipeline, we still see, as I said, several years of runway for similar returns. There have been instances where there have been some cost increases, but we're getting it back in terms of our rents. We continue to be able to invest accretively. These are incremental returns. We're also not including in those returns the follow-on leasing that we continue to see in these projects several years after. We remain very encouraged by what we're seeing in terms of the projects going forward and the nature of what those returns look like. We're not changing our thresholds.

Speaker #5: Juan , I'm sorry we if you look at where we've said historically and where we've been delivering , it's been high single digit , low double digit returns .

Speaker #5: So it's just effective . Effectively the mix that we had of what was stabilizing during the quarter as we look out in that future reinvestment pipeline , we still see , as I said , several years of runway for similar returns .

Speaker #5: There have been instances where there have been some cost increases, but we're getting it back in terms of our rents, and we continue to be able to invest.

Speaker #5: These are incremental returns . We're also not including in those returns , the follow on leasing that we continue to see in these projects several years after .

Speaker #5: So we remain very encouraged by what we're seeing in terms of the projects going forward and the nature of what those returns look like.

Speaker #5: We're not changing our thresholds . If anything , as we've done some of these larger projects , we want to hire Pre-lease threshold from where we've been historically to limit our risk .

Brian Finnegan: If anything, as we've done some of these larger projects, we want a higher pre-lease threshold from where we've been historically to limit our risk. These projects are still fully bought out, and we have a great line of sight on where costs are going to go. Generally, we're very pleased with what we've been seeing both in the existing and future pipeline as it relates to those returns.

Speaker #5: These projects are still fully bought out , and we have a great line of sight on where costs are going to go . But generally , we're very pleased with what we've been seeing , both in the existing and future pipeline as it relates to those returns .

Speaker #21: Thank you .

[Analyst 5]: Thank you.

Speaker #5: Thanks .

Speaker #3: And our next question is from Caitlin Burrows with Goldman Sachs. Please proceed.

Mark T. Horgan: Thanks, Handeul.

Operator: Our next question is from Caitlin Burrows with Goldman Sachs. Please proceed.

Speaker #22: Hi . Good morning everyone . A big part of the Bricks More story is your ability to quarter after quarter , achieve large leasing spreads as you bring rents up to market rates .

[Analyst 6]: Hi. Good morning, everyone. A big part of the Brixmor Property Group Inc. story is your ability to quarter after quarter achieve large leasing spreads as you bring rents up to market rates. I guess with Jim having become CEO almost 10 years ago, it would seem like a lot of this opportunity has been realized by now, but maybe that's not true. Could you give some detail on how you think about what portion of that upside, the outsized leasing spreads, has been realized, how much is left, and how long leasing spreads can continue in the mid-teens rate?

Speaker #22: So I guess with Jim having become CEO almost ten years ago , it would seem like a lot of this opportunity has been realized by now .

Speaker #22: But maybe that's not true . So could you give some detail on how you think about what portion of that upside , the outsized leasing spreads has been realized ?

Speaker #22: How much is left and how long leasing spreads can continue in the mid-teens , rate ?

Speaker #5: Yeah . Well , Caitlin , I would just say we're very pleased with the rent growth trends and the portfolio , both with what we've been able to execute as well as what we see coming down the pike .

Brian Finnegan: Caitlin, I would just say we're very pleased with the rent growth trends in the portfolio, both with what we've been able to execute as well as what we see coming down the pike. If you think about the quarter, we signed the highest rents we ever have in overall small shop and anchors. Over the last year, we've signed the highest rents that we ever have in all those categories as well. If you look at that future leasing pipeline, it sits at about 40% higher than our in-place rents today. As we continue to reinvest in the portfolio, we expect to continue to drive rents higher. We still have a low rent basis in terms of the spaces that we are taking back, and we're backfilling these boxes accretively. We still see a long runway for future rent growth.

Speaker #5: So, if you think about the quarter we signed, the highest rents we ever have in overall small shop and anchors over the last year, we've signed the highest rents that we ever have in all those categories as well.

Speaker #5: If you look at that future leasing pipeline , it sits at about 40% higher than our in-place rents today . And as we continue to reinvest in the portfolio , we expect to continue to drive rents higher .

Speaker #5: And we still have a low rent basis in terms of the spaces that we are taking back . And we're backfilling these boxes creatively .

Speaker #5: So, we still see a long runway for future rent growth. You could see some fluctuation in a given quarter, but we're really pleased with what we're seeing from the team.

Brian Finnegan: You could see some fluctuation in a given quarter, but really pleased with what we're seeing from the team.

Speaker #22: Thanks .

Operator: Thanks.

Speaker #5: Thank you .

Mark T. Horgan: Thank you.

Speaker #3: As a reminder , it is star one . If you would like to ask a question or a follow up question , our next question is from Floris van Dyck with Ladenburg Thalmann .

Operator: As a reminder, just star one if you would like to ask a question or a follow-up question. Our next question is from Floris van Dijkum with Ladenburg Thalmann. Please proceed.

Speaker #3: Please proceed .

Speaker #23: Hey guys , thanks for taking my question . And Jim , I hope you're enjoying the Cavaliers and your time off because the football season is a little bit special .

[Analyst]: Hey, guys. Thanks for taking my question. Jim, I hope you're enjoying the Cavaliers in your time off because the football season is a little bit special. We haven't had that in a couple of years. I wanted to ask about the recycling of capital. One of the unique elements that you guys had is selling stabilized low-growth assets at attractive cap rates and reinvesting into your significant redevelopment activity. As I noticed, you haven't sold that much year to date. I think it's $190 million-ish or thereabouts, less than what you've acquired. Could you talk about the pipeline of dispositions and what the impact of that is going to be? You do have a significant redevelopment pipeline as well that is in the works and you're adding on to it.

Speaker #23: We haven't had that in a couple of years . Wanted to ask about the recycling of capital . One of the unique elements that you guys had is selling .

Speaker #23: You know stabilized low growth assets that , you know , you know , attractive cap rates and reinvesting into your significant redevelopment activity .

Speaker #23: As I notice you haven't sold that much year to date . I think it's 190 million or thereabouts , less than what you've acquired .

Speaker #23: Could you talk about the pipeline of dispositions and you know what the impact of that is going to be ? Because you do have a significant redevelopment pipeline as well .

Speaker #23: You that is in the in the works and you're adding on to it .

Speaker #5: Well , Floris , I'll start and then maybe I'll hand it to Mark . There's always going to be and Jim has said this historically , a portion of the portfolio where we've maximized value , and then we're going to take that capital and recycle it in to places where we see more compelling growth opportunities that align with the growth profile of the company .

Brian Finnegan: For Floris, I'll start and then maybe I'll hand it to Mark. There is always going to be, and Jim has said this historically, a portion of the portfolio where we've maximized value. We're going to take that capital and recycle it into places where we see more compelling growth opportunities that align with the growth profile of the company. With that, maybe I'll hand it to Mark in terms of some more detail on the pipeline.

Speaker #5: So with that , maybe I'll hand it to mark in terms of some more detail on the pipeline .

Speaker #11: Yeah , sure . The other comment I'd make with respect to our funding of the business plan , don't forget , we do generate significant free cash flows here post dividend post .

Mark T. Horgan: I'm sure that the other account I'd make with respect to our funding of the business plan, don't forget, we do generate significant free cash flows here post-dividend, post our normal leasing spend. That's really what's funding the vast majority of our redevelopment program. There's probably some limited amount of dispositions that go into keeping us leveraged and neutral there. Ultimately, I wouldn't forget that as you think about how we're funding the business. On the pipeline for dispositions, as I mentioned, what's most interesting to us in the market today is this new capital coming in that, again, is seeking exposure to the space.

Speaker #11: Our normal leasing spend . And that's really what's funding our the vast majority our redevelopment program . So yeah , there's probably some limited amount of disposals that go into keeping us leveraged in neutral there .

Speaker #11: But but ultimately I wouldn't forget that . As you think about how we're funding the business on the pipeline for dispositions , as I mentioned , what's what's most interesting to us in the market today is this new capital coming in .

Speaker #11: That , again , is is seeking exposure to the space . We think we've got an ability here to be opportunistic and sell assets that that Brian highlighted that have less growth than our overall portfolio .

Mark T. Horgan: We think we've got an ability here to be opportunistic and sell assets that Brian Finnegan highlighted that have less growth in our overall portfolio and put it back to work in assets where we are compelled to see higher growth rates and really drive that ROIC for us over time.

Speaker #11: And put it back to work in assets . Where we are compelled to to see higher growth rates and really drive that ROIC for us over time .

Speaker #23: And just to make sure the cap rates on the disposals are broadly in line with what you're acquiring, except maybe the lifestyle center.

[Analyst]: Just to make sure, the cap rates on the dispositions are broadly in line with what you're acquiring, except maybe the lifestyle center, but you know that it should be on a sort of a cap-rate neutral basis, or if there's a little bit of dilution involved there?

Speaker #23: But you know that it should be on a , on a , you know , sort of a cap rate neutral basis or there's a little bit of dilution involved there

Speaker #23: .

Speaker #11: If you're looking at a cap rate like it's been for many years, around 7%, then the acquisitions are going to be slightly, slightly lower than that when you blend them all together.

Mark T. Horgan: Our year-to-date cap rate, like it's been for many years, is in and around a 7. The acquisitions are going to be slightly lower than that when you blend them all together this year. Last year, we think it was about neutral. It depends on the mix of what we're selling. Importantly, we're really focused on that long-term hold IRR, and we think that growth of what we're buying is significantly better than what we're selling. We're seeing that through looking back at the assets we bought, so we remained convicted in the acquisition program to add value to the company over time.

Speaker #11: This year . Last year we think it was about neutral . So it depends on the mix of what we're selling . But importantly , we're really focused on that long term hold IRR .

Speaker #11: And we think that growth of what we're buying is significantly better than what we're selling . And we're seeing that through , you know , through looking back at the assets we bought .

Speaker #11: So we remained convicted in the acquisition program to add value to the company . Over time .

Speaker #23: Thanks , guys .

[Analyst]: Thanks, guys.

Speaker #5: Thanks for .

Mark T. Horgan: Thanks, Floris.

Speaker #3: Our next question is from Linda Tsai with Jefferies . Please proceed .

Operator: Our next question is from Linda Sy with Jefferies. Please proceed.

Speaker #24: Hi . Thanks for taking my question . Can you comment on the yield for Lacentra ? And then in terms of traditional open air centers , being in your acquisition pipeline , just wondering why you highlighted that they are not lifestyle centers ?

[Analyst 6]: Hi. Thanks for taking my question. Can you comment on the yield for Los Santera? In terms of traditional open-air centers being in your acquisition pipeline, just wondering why you highlighted that they are not lifestyle centers.

Speaker #5: Well , I'll take the second part first . The second part first . Linda , sorry about that . And we and we did touch on lots of terabit last quarter .

Brian Finnegan: I'll take the second part first, Linda. Sorry about that. We did touch on LaCenterra at Cinco Ranch a bit last quarter, but Mark can spend a little bit more time on that. I think what Mark was saying is we are looking for assets that have compelling growth profiles. If you look at that in terms of what we bought historically, it's been a mix. When Mark was comparing it to LaCenterra at Cinco Ranch, these assets are very similar in that they're grocery-anchored, and we feel like we can put our platform to work to have compelling growth out of those properties. Maybe, Mark, I don't know if there's a little bit more to add on for LaCenterra at Cinco Ranch.

Speaker #5: But Mark and spent a little bit more time on that . I think when Mark was saying is we're looking for assets that have compelling growth profiles .

Speaker #5: And if you look at that in terms of what we bought historically , it's been a mix . And so when Mark was comparing it to Lacentra , it's very these

Speaker #5: assets are very similar in that they're grocery anchored . And we feel like we can put our platform to work to have compelling growth out of those properties .

Speaker #5: So maybe Mark , I don't know if a little bit more to add on for Lacentra .

Speaker #11: Yeah , I would really point to the comments we made made last quarter . We went through it in detail , and what I would highlight is that since last quarter , we've we've outperformed what our expectations were in the initial ownership period .

Mark T. Horgan: Yeah. I would really point to the comments we made last quarter. We went through it in detail. What I would highlight is that since last quarter, we've outperformed what our expectations were in the initial ownership period. We remain convicted in the growth that we're generating. We remain convicted that the yields are going to be a little bit higher in year one. Moreover, the growth that we see coming from that asset, we think, is a really compelling opportunity for Brixmor Property Group Inc. Just to highlight, what I was trying to highlight was the assets that we're buying, we have high conviction in growth just like we did with Los Santera. The ones in the pipeline today that we have under control just look more like traditional shopping centers. We're always going to focus on growth.

Speaker #11: So the main convicted in the growth that we're generating , we're convicted of the yields . We will be a little bit higher in year one .

Speaker #11: And moreover , the growth that we see coming from that asset , we think is a really compelling opportunity for Brixmor . And just to highlight what I was trying to highlight was the assets that we're buying .

Speaker #11: We have high conviction and growth , just like we did with Lawson Terra . The ones in the pipeline today that we have under control are just they look more like traditional shopping centers .

Speaker #11: We're always going to focus on growth.

Speaker #24: Thank you .

[Analyst 6]: Thank you.

Speaker #5: Thanks , Linda .

Mark T. Horgan: Thanks, Linda.

Speaker #3: As a reminder to ask a question or follow up question , it is star one on your telephone keypad . Our next question is from Hong Zheng with JPMorgan .

Operator: As a reminder, to ask a question or follow-up question, it is star one on your telephone keypad. Our next question is from Hong Zhang with JP Morgan. Please proceed.

Speaker #3: Please proceed .

Speaker #25: Yeah . Hey , I guess your lease to occupied spread has gone down throughout this year , but still remains above historic levels .

[Analyst 5]: Yeah. Hey, I guess your lease-to-occupy spread has gone down throughout this year, but still remains above historic levels. Just given the strong rent commencements you expect in Q4 and Q2 in 2026, do you expect to be back to more historic levels by the end of 2026, going to 2027?

Speaker #25: Just given the strong rent commencements you expect in for Q and 2026 , do you expect to be back to more stock levels by the end of 2026 ?

Speaker #25: Going into 2027 .

Speaker #5: I'll take that . I would I would expect that to still remain wide . I mean , obviously you'd expect it to tighten since we commenced a record amount of ABR during the quarter , but we're also leasing a lot of space and we've got a large legal pipeline that we continue to fill deals into leasing committee .

Brian Finnegan: I'll take that. I would expect that to still remain wide. Obviously, you'd expect it to tighten since we commenced a record amount of ABR during the quarter, but we're also leasing a lot of space. We've got a large legal pipeline that we continue to fill deals in. The leasing committee, in terms of the flow in the leasing committee on a weekly basis, remains strong. The pipeline remains elevated. We like what we're seeing from a demand perspective. You should expect that to remain somewhat elevated, but it is exciting in terms of the commencements that we've had here that we had in the third quarter and that we look forward to seeing in the fourth.

Speaker #5: In terms of the flow into leasing committee on a weekly basis remains strong . So the pipeline remains elevated . We like what we're seeing from a demand perspective .

Speaker #5: You should expect that to remain somewhat elevated , but it is exciting in terms of the commencements that we've had here . We have in the third quarter , and that we look forward to seeing in the fourth .

Speaker #25: Thank you .

[Analyst 5]: Thank you.

Speaker #5: You got it. Thanks.

Brian Finnegan: You got it. Thanks.

Speaker #3: There are no further questions at this time . I would like to turn the floor back over to Stacey for closing remarks .

Operator: There are no further questions at this time. I would like to turn the floor back over to Stacy Slater for closing remarks.

Speaker #4: Thank you, guys, for all joining today.

Stacy Slater: Thank you, guys, for all joining today.

Speaker #3: Thank you . This will conclude today's conference . You may disconnect your lines at this time . And thank you for your participation .

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.