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EVP, Chief Investment Officer Jan Sweetnam confirmed that competition is lighter for these large assets in new markets. He noted they are competing with fewer bidders compared to a highly sought-after asset in a core coastal market, as the bid list is not as deep.

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CEO Donald Wood viewed the Legacy West deal positively, stating it confirms that sophisticated buyers recognize the value created by integrating different property uses. He believes this supports his view that Federal Realty's own mixed-use assets are undervalued in the public markets relative to their private market value, though he did not comment on a specific cap rate.

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CEO Donald Wood noted that quarterly spreads can be volatile due to the specific mix of deals, but the underlying ability to push rents remains strong. He estimated the portfolio's OCR is around 9%, which he believes suggests there is still room for rent growth. He also pointed to the significant positive gap between new lease rates and the in-place portfolio average as another indicator of continued upside potential.

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President & CEO Lisa Palmer stated that the company is very comfortable with its current national diversification and market exposures. She explained that they will continue to invest in markets they like, such as the recent Nashville acquisition, when opportunities meet their strict criteria for accretion to earnings, growth, and quality. She affirmed they do not have outsized exposure to any single MSA.

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Nicholas Wibbenmeyer, West Region President and CIO, clarified that the development spread is a measure of risk-adjusted return, not a precursor to a sale, and development remains the best use of capital. He noted most new projects are with expanding grocery partners. CEO Lisa Palmer added that Regency's success is built on decades of experience, strong retailer relationships, and a low cost of capital, which allows them to develop through cycles.

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President and CEO Lisa Palmer stated that she does not anticipate a material impact due to the portfolio's strong positioning. She highlighted the resilient consumer in their trade areas and a necessity-focused tenant mix in high-quality centers. She noted that while challenges like rising construction costs could occur, the company has a proven track record of managing them effectively and expects to continue doing so.

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Chairman & CEO Jeffrey Olson explained that CapEx is expected to decrease because they have replaced long-struggling tenants with high-quality, durable retailers. EVP & COO Jeffrey Mooallem added that most heavy-lifting maintenance CapEx (roofs, parking lots) is complete and leasing CapEx is lower due to better negotiating power. EVP & CFO Mark Langer provided specifics, noting maintenance CapEx is projected to fall from $36 million in 2022 to around $15 million as remaining projects are completed.

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COO Jeff Mooallem cited a 10-15% increase in market rent in a recent deal and stated that recent bankruptcies are not viewed as systemic. He argued that Urban Edge's portfolio, with its focus on well-capitalized anchors, is more 'bulletproof' and insulated from a recession than many shop-heavy grocery-anchored centers, which could be more susceptible to a slowdown.

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Chief Operating Officer Jeff Mooallem described sub-6% cap rate assets as typically featuring a strong grocery anchor with good sales, at least 7-10 years of lease term, and additional growth opportunities like shop space or pad sites. He noted these assets are scarce and attract a frenzy of capital, pushing prices up. Chairman and CEO Jeffrey Olson added that while selling low-growth, low-cap-rate assets is the preferred funding source, a modest amount of equity issuance could be considered for the right acquisition deal.

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CEO Jeffrey Olson estimated that cap rates have compressed by 50 to 75 basis points over the last 6 to 9 months. He and COO Jeffrey Mooallem clarified that their disposition strategy targets freestanding, separately subdivided assets (like the Home Depot just sold) or entire shopping centers that trade like credit tenants, not anchors within an integrated center. Mooallem also confirmed they are actively pursuing accretive outparcel developments, such as ground leases and build-to-suits, noting several are already in the pipeline.

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CEO David Lukes explained that obtaining OCRs is difficult for their portfolio, as over 70% of tenants are national credits that do not share store-level data; instead, Curbline focuses on the corporate guarantee and credit quality. Regarding the Midwest, he stated that they are open to acquisitions in any region, including the Midwest, as long as the properties meet their strict underwriting criteria for financial returns, demographics, and traffic, rather than focusing on a specific geography.

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CEO David Lukes pointed to the capital efficiency of the business, highlighting a rapid 5.5-month payback period on total leasing capital. He argued that even in a recession with higher vacancy, the low cost and speed of re-tenanting small, fungible spaces would lead to superior performance compared to large-format retail. CFO Conor Fennerty added that tenant diversification, with few tenants over 1% of ABR, mitigates risk. Regarding tenant health, Lukes stated that it has only been a matter of weeks since macroeconomic concerns intensified, and they have not yet seen any significant anecdotal evidence of a slowdown or increased caution from their service-oriented tenants.

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CEO David Lukes highlighted the portfolio's defensive nature, citing a rapid payback period on leasing capital (5.5 months) due to small, fungible spaces. CFO Conor Fennerty added that high tenant diversification mitigates credit risk. Regarding tenant health, Lukes noted it was too early to see broad weakness, and any slowdown from goods-based retailers has been offset by continued demand from service tenants.

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CEO David Lukes explained that while the recent pace was strong, the company has only been public for 120 days, making the $500 million target a confident and achievable goal that ensures discipline. He stated that while there are no 'hard yes or no' benchmarks, household income and daily traffic counts are two of the most critical factors they evaluate, focusing on overall consumer health in a submarket and visibility on high-traffic intersections.

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David Jamieson, COO, detailed the projects. North Towne Plaza involves adding a Sprouts to anchor a legacy Weingarten site. Gordon Plaza involves demolishing an obsolete center to make way for new ground leases with Home Depot, Aldi, and Chase Bank. He confirmed these projects align with their strategy of identifying the highest and best use for existing land in a risk-adjusted manner.

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CEO Conor Flynn argued that market dynamics and pricing power will not shift materially. He explained that there is very little overlap of vacancies within the same submarket, meaning a newly available box is often the only option for retailers in that trade area. This scarcity, combined with record-low vacancy rates, should maintain the competitive tension that drives rents.

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CEO Conor Flynn described the current environment as the 'very early innings' of a retail revival, driven by a prolonged lack of new supply. He anticipates an inflection point where lower capex and tenant turnover will fuel a stronger growth rate. Given the diverse demand and muted supply outlook, he expressed optimism for an improved growth trajectory.

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CEO Conor Flynn stated he believes the industry is in the 'very early innings' of a retail revival driven by a lack of new supply. He anticipates that as retention rates remain high and CapEx needs decrease, the company should see a stronger growth rate going forward, supported by diverse and sustained tenant demand.

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President & CEO Kenneth Bernstein explained that a broad return of international tourist shoppers has not yet occurred, so recent travel fluctuations have not impacted tenant sales; it remains a future tailwind. On portfolio strategy, he stated that while there is an eventual limit to NYC exposure, the company is not there yet and will continue adding scale in key corridors. He emphasized that they could double or triple holdings in existing corridors while also growing in other markets to ensure portfolio balance.

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CEO Kenneth Bernstein explained that going-in yields for best-in-class street retail and grocery-anchored centers are now similar. However, he projects street retail's long-term growth rate to be roughly double that of grocery-anchored centers, driven by stronger contractual rent bumps and fair market value resets. For the Henderson project, the wide cost range reflects a phased development approach. He confirmed it will have a mixed-use component, but the project is viable even without the office space, and the expansion will lift the value of the entire Henderson portfolio.

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President and COO Brian Finnegan stated they have not seen an impact on leasing from immigration policy and noted continued strength in the restaurant category. CEO Jim Taylor added that the portfolio is well-positioned against broad economic pressures due to its focus on economically resilient tenants in the grocery, specialty grocery, and off-price apparel sectors, which tend to perform well through cycles.

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CEO James Taylor clarified that the savings are a permanent benefit harvested from the company's extensive reinvestment program, which has made the portfolio more efficient and addressed deferred maintenance. He emphasized that this discipline is accelerating free cash flow growth, not cutting corners. President and COO Brian Finnegan added that the centers' presentation is the best it has ever been.

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CEO James Taylor explained that the savings are a permanent benefit harvested from years of significant reinvestment in the portfolio, which has improved efficiency and addressed deferred maintenance, thereby accelerating free cash flow growth. President & COO Brian Finnegan added that the centers are in their best condition ever despite the lower spend.

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CEO Jim Taylor stated that retailer demand is strong across nearly all of the company's markets. He explained that the investment strategy focuses on acquiring under-rented and under-invested assets in strong locations where Brixmor's platform can drive value. He identified Florida, the coastal Carolinas, the upper Northeast, California, and Texas as key markets for future acquisitions.

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CEO James Taylor responded that retailer demand is strong across nearly all of their markets. The company's investment strategy is to find under-rented and under-invested assets in strong locations where its platform can add value. He identified Florida, the coastal Carolinas, the upper Northeast, California, and Texas as key markets for future acquisitions.

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Chairman and CEO John Kite explained that while they have sales-based recapture rights in option periods at top properties, it's difficult to secure them in a primary lease term. He reiterated that the low assumption number for bankrupt leases is a strategic choice to maintain control over tenant quality. He identified boxes over 40,000 sq. ft. as most challenging, noting the current vacancies are in more flexible, smaller sizes.

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President and CEO Daniel Busch acknowledged Nexton Square is a lifestyle center without a traditional grocer anchor. He explained its attractiveness stems from its location in a high-growth market and its strong mix of dining and local retail. He described it as a market-driven strategy, complementing their core grocery-anchored portfolio. In terms of pricing, he positioned its risk-adjusted return profile as falling somewhere between a core grocery-anchored center and a power center, noting its smaller size was also an attractive factor.

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CFO Conor Fennerty explained the guidance range is wide due to the small portfolio size but noted performance is trending toward the midpoint to high end. He broke down the long-term 3%+ growth into components: rent bumps, mark-to-market, occupancy gains, and credit loss. He also stated that he expects occupancy to increase from its current level.

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CEO David Lukes explained that while it is difficult to provide a precise statistic, there has been a consistent anecdotal trend of small shop rents beating budget expectations over the last four years. He described it as a consistent, though not dramatic, rise that allows landlords to select for either the highest rent or the best credit tenant, which has helped offset other market pressures.

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