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Brixmor Property Group Inc. (BRX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid growth: total revenues $328.4M (+3.8% YoY), diluted EPS $0.27 (vs $0.24 YoY), NAREIT FFO/share $0.53, and same‑property NOI growth of 4.7% with base rent contributing 600 bps .
  • Leasing productivity remained robust: 1.5M sf executed, blended rent spreads 21.0% (new leases 34.4%), total leased occupancy 95.2% (anchors 97.2%, small shops 91.1%), leased‑to‑billed spread 380 bps, signed‑but‑not‑commenced ABR $60.7M .
  • 2025 outlook introduced: NAREIT FFO/share $2.19–$2.24, same‑property NOI growth 3.5%–4.5%, revenues deemed uncollectible 75–110 bps; management expects slower H1 with acceleration in H2 as backfills ramp .
  • Balance sheet/liquidity strong: $1.6B liquidity, net principal debt/Adjusted EBITDA 5.7x; Moody’s upgraded credit to Baa2 (stable), enhancing funding optionality for value‑add reinvestments .
  • Near‑term stock catalysts: disciplined external growth (Q4 acquisitions $211.8M at 6–7% initial yields) and box recaptures enabling >50% rent lifts on backfills amid tight supply; offset by bankruptcy‑related occupancy drag in H1 .

What Went Well and What Went Wrong

What Went Well

  • Strong leasing and rent spreads: 1.5M sf executed, 21.0% blended spread and 34.4% new lease spread; “momentum continued… strong bottom line growth and leasing productivity” (CEO) .
  • Same‑property NOI +4.7% in Q4; base rent contributed 600 bps as stacked commencements outweighed disruption (CFO) .
  • Funding capacity and credit: $1.6B liquidity, net principal debt/Adj. EBITDA 5.7x; Moody’s upgrade to Baa2 reflects “consistently strong operating results, asset quality, improved leverage” .

What Went Wrong

  • Bankruptcy disruption: ~70 bps impact for 2024 and ~60 bps in Q4 to billed occupancy; management expects slower H1 growth before H2 acceleration .
  • Margin/expense recovery softness sequentially: NOI margin 72.9% in Q4 (vs 74.4% in Q3); expense recovery ratio dipped vs prior quarter in quarterly metrics despite record annual CAM recovery >92% .
  • Higher interest burden and guide bridge headwinds: Q4 interest expense rose YoY to $55.4M; 2025 FFO/share includes a −$0.06 headwind from lower interest income timing and −$0.01 from interest expense .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenues ($USD Millions)$316.5 $320.7 $328.4
Diluted EPS ($USD)$0.24 $0.32 $0.27
NAREIT FFO per diluted share ($USD)$0.51 $0.52 $0.53
NOI margin (%)72.9% 74.4% 72.9%
Same‑property NOI growth (%) YoY3.1% 4.1% 4.7%

Operating KPIs (sequential comparison):

KPIQ3 2024Q4 2024
Leases executed (M sf)1.1 1.5
Blended rent spread (%)21.8% 21.0%
New leases signed (M sf)0.6 0.8
New lease spread (%)31.8% 34.4%
Total leased occupancy (%)95.6% 95.2%
Anchor leased occupancy (%)97.7% 97.2%
Small shop leased occupancy (%)91.1% 91.1%
Leased‑to‑billed occupancy spread (bps)370 380
Signed but not commenced ABR ($MM)$59.4 $60.7
Commenced ABR in quarter ($MM)$17.7 $16.2

Balance sheet metrics:

MetricQ3 2024Q4 2024
Liquidity ($B)$1.7 $1.6
Net principal debt / Adjusted EBITDA (TTM)5.7x 5.7x
Interest expense ($MM, quarter)$55.4 $55.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NAREIT FFO per diluted share ($)FY2025N/A$2.19 – $2.24 New
Same‑property NOI growth (%)FY2025N/A3.50% – 4.50% New
Revenues deemed uncollectible (bps of revenues)FY2025N/A75 – 110 bps New
Dividend per share (quarterly)Q4 2024$0.2875 (raised in Q3) $0.2875 declared Maintained
2024 NAREIT FFO per diluted share ($)FY2024$2.13 – $2.15 (updated in Q3) Actual $2.13 In line
Guide bridge items (per share)FY2025N/AG&A and other +$0.02; dividends & interest −$0.06; interest expense −$0.01; non‑cash GAAP rental adj −$0.01 to $0.00 New detail

Earnings Call Themes & Trends

TopicQ2 2024 (prev)Q3 2024 (prev)Q4 2024 (current)Trend
Leasing demand & spreadsRecord blended spread 27.7%; new 50.2% Blended 21.8%; new 31.8% Blended 21.0%; new 34.4%; record new lease ABR PSF Strong, slight moderation
Occupancy & leased‑to‑billed95.4% leased; 400 bps spread 95.6%; 370 bps 95.2%; 380 bps; bankruptcy impact discussed Near‑term dip; improving H2
CAM recoverySame‑property expense recovery 92.8% 93.2% Record annual CAM >92%; quarterly recovery 90.3% High, quarterly dip
Reinvestment pipelineIn‑process $509.6M @ 9% $506.8M @ 9% $389.6M @ 10% (deliveries reduced pipeline) Down from peak; yields up
External acquisitions$17.3M $63.9M $211.8M; 6–7% initial yields; value‑add focus Increasing
Tariffs/macro——Retailers prepared; potential cost inflation offset by rents; consumer traffic resilient Watchful, manageable

Management Commentary

  • “Our momentum continued in the fourth quarter, delivering strong bottom line growth and leasing productivity… positioned to capitalize on robust tenant demand… bring in better tenants at better rents.” — James Taylor, CEO .
  • “NAREIT FFO was $0.53 per share in the fourth quarter, driven by same‑property NOI growth of 4.7%… we expect slower growth in the first half… accelerate in the second half as we backfill spaces.” — Steven Gallagher, CFO .
  • “Executed… 1.5 million square feet at a blended cash spread of 21%… record new lease ABR PSF… signed‑but‑not‑commenced pipeline remains strong at $61 million of ABR.” — Brian Finnegan, President & COO .

Q&A Highlights

  • Acquisitions underwriting: Q4 assets acquired at 6–7% initial yields; focus on value‑add to drive unlevered IRRs high‑single to low‑double digits (e.g., Britton Plaza $50–$60M reinvestment potential) .
  • Bankruptcy boxes: ~70 bps 2024 impact; 19 Big Lots boxes in control, ~13 resolved with operators like Planet Fitness/Burlington/Ross; rent growth >50% on recaptures .
  • CAM recovery and lease terms: record annual CAM recovery >92% supported by improved clauses (removing caps/carve‑outs), conservative fixed CAM deployment .
  • Capital and maturities: bonds due early Feb prefunded in 2024; ample liquidity; net principal debt/Adj. EBITDA 5.7x .
  • Tariffs view: retailers better prepared with diversified sourcing; off‑price/value retailers poised to thrive; rents offset potential cost inflation .

Estimates Context

Wall Street consensus EPS/revenue estimates from S&P Global were unavailable at the time of request due to SPGI rate limits, so we could not quantify beats/misses versus consensus [GetEstimates error]*.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • The core REIT engine remains healthy: Q4 NAREIT FFO/share $0.53, same‑property NOI +4.7%, with stacked rent commencements providing 2025 visibility .
  • Tight supply and robust tenant demand underpin high rent spreads and record new lease ABR PSF; signed‑but‑not‑commenced ABR $60.7M is a tailwind for 2025 .
  • Expect near‑term occupancy/NOI growth headwinds from bankruptcies (H1), but H2 acceleration as recaptured boxes re‑lease at materially higher rents (>50% in many cases) .
  • Balance sheet is positioned for value‑add reinvestment: $1.6B liquidity, 5.7x net principal debt/Adj. EBITDA, Baa2 upgrade (Moody’s), and no maturities until June 2026 .
  • External growth is disciplined and accretive: Q4 acquisitions ($211.8M) at 6–7% initial yields with multiple levers (remerchandising, outparcels, redevelopment) to raise ROIs .
  • Margins and recovery ratios may fluctuate quarter‑to‑quarter (NOI margin 72.9% in Q4), but structural lease improvements and high CAM recovery (>92% annually) support durable cash flows .
  • Dividend maintained at $0.2875/quarter; payout ~51–54% of FFO historically, leaving capacity for reinvestment and capital recycling .