BRIXMOR PROPERTY GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS
- Record total and small shop leased occupancy
- Net income of $0.24 per diluted share for Q4 2023
- Executed 1.7 million square feet of new and renewal leases
- Increased same property NOI by 3.1%
- Nareit FFO of $154.7 million for Q4 2023 and $615.6 million for 2023
- None.
Insights
The data released by Brixmor Property Group Inc. indicates a strategic growth in leased occupancy rates, with a record total and small shop occupancy. The reported increase in same property Net Operating Income (NOI) and executed new and renewal leases with significant rent spreads are positive indicators of the company's operational strength. The growth in NOI, a key measure of property-level operational performance, suggests an effective management of assets and an ability to generate revenue from its properties.
Moreover, the completion of value enhancing reinvestment projects with high incremental NOI yields demonstrates Brixmor's commitment to improving its portfolio and potentially increasing its long-term value. The repurchase of senior notes and issuance of new senior notes reflect active management of the company's capital structure, aiming to optimize its debt profile and interest expenses.
For investors, the stable outlook from S&P Global Ratings and the credit rating upgrade could be perceived as an endorsement of the company's financial stability and future prospects. The guidance for 2024 with expected growth in same property NOI and Nareit Funds From Operations (FFO) provides a forward-looking perspective that may influence investment decisions.
The financial results of Brixmor Property Group Inc. reveal a nuanced picture. While there is a decline in net income per diluted share both for the quarter and the year, the company's Nareit FFO per diluted share has increased. The divergence between net income and FFO is important for investors to consider, as FFO is often a more accurate indicator of a REIT's performance, as it adds back depreciation and amortization related to real estate, which are non-cash expenses.
The company's capital activities, including the repurchase of senior notes and the issuance of new senior notes, are strategic moves to manage debt obligations and interest expenses. These activities, coupled with the credit rating upgrade, could impact the company's cost of capital and financial flexibility. The declared dividend, which is a key return metric for REIT investors, remains consistent, indicating the company's confidence in its cash flow stability.
Investors should also note the company's guidance for the upcoming year, which includes a modest increase in Nareit FFO per diluted share and same property NOI growth. These projections will be critical benchmarks for evaluating the company's performance in 2024.
Brixmor's operational results, specifically the leased occupancy figures and rent spreads, underscore the company's adept leasing strategy and tenant mix optimization. The record leased occupancy rates highlight the demand for Brixmor's properties and the effectiveness of their management in maintaining high occupancy levels. The high rent spreads on new leases indicate the company's ability to command premium rents, which is a positive signal for revenue growth.
The stabilization of reinvestment projects with robust incremental NOI yields suggests that Brixmor is effectively recycling capital into projects that are expected to deliver above-market returns. This reinvestment strategy could lead to enhanced property values and attract quality tenants, which in turn can drive up the overall portfolio performance.
The dispositions of shopping centers and partial properties are part of the company's portfolio optimization strategy, potentially allowing for redeployment of capital into higher-yielding opportunities or debt reduction. The company's capital structure maneuvers, including the tender offer and issuance of senior notes, indicate a proactive approach to managing its balance sheet, which could serve to reduce financial risk and improve liquidity.
- Achieved Record Total and Small Shop Leased Occupancy -
Key highlights for the three months ended December 31, 2023 include:
- Executed 1.7 million square feet of new and renewal leases, with rent spreads on comparable space of
19.6% , including 0.8 million square feet of new leases, with rent spreads on comparable space of37.4% - Sequentially increased total leased occupancy to a record
94.7% , anchor leased occupancy to96.8% , and small shop leased occupancy to a record90.3% - Commenced
$15.9 million - Leased to billed occupancy spread totaled 410 basis points
- Total signed but not yet commenced lease population represented 3.0 million square feet and a record
$64.0 million
- Commenced
- Reported an increase in same property NOI of
3.1% - Reported Nareit FFO of
$154.7 million $0.51 - Stabilized
$119.5 million 9% , with the in process reinvestment pipeline totaling$429.2 million 9% - Completed
$21.6 million - Received a credit rating upgrade on November 3, 2023 from S&P Global Ratings to 'BBB' from 'BBB-', with a stable outlook
Key highlights for the twelve months ended December 31, 2023 include:
- Executed 6.3 million square feet of new and renewal leases, with rent spreads on comparable space of
19.3% , including 3.0 million square feet of new leases, with rent spreads on comparable space of40.0% - Reported an increase in same property NOI of
4.0% , including a contribution from base rent of 430 basis points - Reported Nareit FFO of
$615.6 million $2.04 - Stabilized
$156.7 million 9% - Completed
$189.9 million - The Company's operating partnership, Brixmor Operating Partnership LP (the "Operating Partnership"), repurchased
$199.6 million 3.650% Senior Notes due 2024 pursuant to a cash tender offer (the "Tender Offer"). The Tender Offer was funded with proceeds from the Operating Partnership's$200.0 million - Promoted Brian T. Finnegan to Senior Executive Vice President and Chief Operating Officer from Executive Vice President, Chief Revenue Officer
- Appointed Sheryl M. Crosland, an independent director since 2016, as chair of the Company's board of directors following the retirement of John G. Schreiber, John Peter ("JP") Suarez, retired Executive Vice President, Regional Chief Executive Officer and Chief Administration Officer, Walmart International, as a director, and Sandra A. J. Lawrence as chair of the Company's audit committee
- Published the Company's annual Corporate Responsibility Report on July 5, 2023 (view the 2022 report at https://www.brixmor.com/corporate-responsibility)
Subsequent events:
- Provided 2024 Nareit FFO per diluted share expectations of
$2.06 $2.10 2.50% -3.50% - Completed
$12.4 million - Issued
$400.0 million 5.500% Senior Notes due 2034 - As previously announced, named Steven Gallagher, the Company's Senior Vice President, Chief Accounting Officer since 2017, as interim Chief Financial Officer, effective January 19, 2024. Mr. Gallagher succeeded Angela M. Aman, who stepped down as the Company's President, Chief Financial Officer and Treasurer, in order to assume the position of Chief Executive Officer of Kilroy Realty Corporation
"Our balanced, value-added business plan continues to deliver, not only driving the transformation of our portfolio, which is reflected in every metric, but also positioning us for continued outperformance," commented James Taylor, Chief Executive Officer and President.
FINANCIAL HIGHLIGHTS
Net Income
- For the three months ended December 31, 2023 and 2022, net income was
$72.7 million $0.24 $107.2 million $0.35 - For the twelve months ended December 31, 2023 and 2022, net income was
$305.1 million $1.01 $354.2 million $1.17
Nareit FFO
- For the three months ended December 31, 2023 and 2022, Nareit FFO was
$154.7 million $0.51 $147.0 million $0.49 $(0.1) million $(0.00) $0.0 million $0.00 - For the twelve months ended December 31, 2023 and 2022, Nareit FFO was
$615.6 million $2.04 $588.9 million $1.95 $4.1 million $0.01 $(1.8) million $(0.01)
Same Property NOI Performance
- For the three months ended December 31, 2023, the Company reported an increase in same property NOI of
3.1% versus the comparable 2022 period. - For the twelve months ended December 31, 2023, the Company reported an increase in same property NOI of
4.0% versus the comparable 2022 period.
Dividend
- The Company's Board of Directors declared a quarterly cash dividend of
$0.27 25$1.09 - The dividend is payable on April 15, 2024 to stockholders of record on April 2, 2024, representing an ex-dividend date of April 1, 2024.
PORTFOLIO AND INVESTMENT ACTIVITY
Value Enhancing Reinvestment Opportunities
- During the three months ended December 31, 2023, the Company stabilized 14 value enhancing reinvestment projects with a total aggregate net cost of approximately
$119.5 million 9% and added four new reinvestment projects to its in process pipeline. Projects added include one anchor space repositioning project, one outparcel development project, and two redevelopment projects, with a total aggregate net estimated cost of approximately$62.8 million 10% . - At December 31, 2023, the value enhancing reinvestment in process pipeline was comprised of 45 projects with an aggregate net estimated cost of approximately
$429.2 million 9% . The in process pipeline includes 20 anchor space repositioning projects with an aggregate net estimated cost of approximately$94.9 million 7% -14% ; nine outparcel development projects with an aggregate net estimated cost of approximately$19.8 million 10% ; and 16 redevelopment projects with an aggregate net estimated cost of approximately$314.5 million 8% . - A virtual road trip highlighting the breadth and depth of the ongoing transformation across the Company's portfolio can be found at this link: https://www.brixmor.com/transformation-tour.
- Follow Brixmor on LinkedIn for video updates on reinvestment projects at https://www.linkedin.com/company/brixmor.
Acquisitions
- During the three months ended December 31, 2023, the Company acquired a land parcel at an existing property for
$0.4 million - During the twelve months ended December 31, 2023, the Company terminated a ground lease and acquired the associated land parcel at an existing property and acquired a land parcel at an existing property, for a combined purchase price of
$2.2 million
Dispositions
- During the three months ended December 31, 2023, the Company generated approximately
$21.6 million - During the twelve months ended December 31, 2023, the Company generated approximately
$189.9 million - Subsequent to December 31, 2023, the Company disposed of one shopping center for
$12.4 million
CAPITAL STRUCTURE
- During the three months ended December 31, 2023, the Operating Partnership entered into new forward-starting swaps related to
$300.0 million $500.0 million 4.08% (plus a credit spread, currently 95 basis points, and SOFR adjustment of 10 basis points), from July 26, 2024 through July 26, 2027, the maturity of the Term Loan, and which will replace existing swaps that fix SOFR at a rate of2.59% (plus a credit spread, currently 95 basis points) and expire on July 26, 2024. - During the twelve months ended December 31, 2023, the Operating Partnership repurchased
$199.6 million 3.650% Senior Notes due 2024 pursuant to the Tender Offer. In connection with the Tender Offer, the Company recognized a gain on extinguishment of debt of$4.4 million $0.01 $200.0 million $300.0 million $500.0 million - At December 31, 2023, the Company had
$1.2 billion $300.4 million - At December 31, 2023, the Company's net principal debt to adjusted EBITDA was 6.0x.
- On January 12, 2024, the Operating Partnership issued
$400.0 million 5.50% Senior Notes due 2034. Proceeds will be utilized for general corporate purposes, including repayment of indebtedness.
GUIDANCE
- The Company expects 2024 NAREIT FFO per diluted share of
$2.06 $2.10 2.50% -3.50% - Expectations for 2024 same property NOI growth include a:
- Contribution from base rent of 350 - 400 basis points
- Detraction from revenues deemed uncollectible of (100) - (50) basis points (this equates to 110 - 75 basis points of total expected revenues in 2024)
- Expectations for 2024 Nareit FFO:
- Do not contemplate any additional tenants moving to or from a cash basis of accounting, either of which may result in significant volatility in straight-line rental income
- Do not include any items that impact FFO comparability, which include transaction expenses, net, litigation and other non-routine legal expenses, and gain or loss on extinguishment of debt, net, or any other one-time items
- The following table provides a bridge from the Company's 2023 Nareit FFO per diluted share to the Company's 2024 estimated Nareit FFO per diluted share:
Low | High | |||
2023 Nareit FFO per diluted share | ||||
Same property NOI growth | 0.07 | 0.10 | ||
General and administrative expense and other 1 | 0.01 | 0.01 | ||
Interest expense, net 2 | (0.03) | (0.03) | ||
Impact of 2023 transaction activity | (0.01) | (0.01) | ||
Items that impact FFO comparability 3 | (0.01) | (0.01) | ||
Non-cash GAAP rental adjustments 4 | (0.01) | 0.00 | ||
2024E Nareit FFO per diluted share |
1. | Includes general and administrative expense, non-same property NOI, lease termination fees, non-real estate depreciation and amortization, and other income (expense). 2024 general and administrative expense includes a favorable impact of approximately |
2. | Includes interest expense and dividends and interest. |
3. | Includes gain on extinguishment of debt, net, and transaction expenses, net recognized in 2023. |
4. | Includes straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, and straight-line ground rent expense. |
- The following table provides a reconciliation of the range of the Company's 2024 estimated net income to Nareit FFO:
(Unaudited, dollars in millions, except per share amounts) | 2024E | 2024E Per | ||
Net income | ||||
Depreciation and amortization related to real estate | 371 | 1.23 | ||
Nareit FFO |
CONNECT WITH BRIXMOR
- For additional information, please visit https://www.brixmor.com;
- Follow Brixmor on:
- LinkedIn at https://www.linkedin.com/company/brixmor
- Facebook at https://www.facebook.com/Brixmor
- Instagram at https://www.instagram.com/brixmorpropertygroup; and
- YouTube at https://www.youtube.com/user/Brixmor.
CONFERENCE CALL AND SUPPLEMENTAL INFORMATION
The Company will host a teleconference on Tuesday, February 13, 2024 at 10:00 AM ET. To participate, please dial 877.704.4453 (domestic) or 201.389.0920 (international) within 15 minutes of the scheduled start of the call. The teleconference can also be accessed via a live webcast at https://www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on February 27, 2024 by dialing 844.512.2921 (domestic) or 412.317.6671 (international) (Passcode:13742799) or via the web through February 13, 2025 at https://www.brixmor.com in the Investors section.
The Company's Supplemental Disclosure will be posted at https://www.brixmor.com in the Investors section. These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.
NON-GAAP PERFORMANCE MEASURES
The Company presents the non-GAAP performance measures set forth below. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company's computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of net income to these non-GAAP performance measures is presented in the attached tables.
Nareit FFO
Nareit FFO is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. Nareit defines FFO as net income (loss), calculated in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated joint ventures calculated to reflect FFO on the same basis. Considering the nature of its business as a real estate owner and operator, the Company believes that Nareit FFO is useful to investors in measuring its operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of the Company's operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets and impairment write-downs of certain real estate assets.
Same Property NOI
Same property NOI is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. Same property NOI is calculated (using properties owned for the entirety of both periods and excluding properties under development and completed new development properties that have been stabilized for less than one year) as total property revenues (base rent, expense reimbursements, adjustments for revenues deemed uncollectible, ancillary and other rental income, percentage rents, and other revenues) less direct property operating expenses (operating costs and real estate taxes). Same property NOI excludes (i) lease termination fees, (ii) straight-line rental income, net, (iii) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (iv) straight-line ground rent expense, net, (v) income or expense associated with the Company's captive insurance company, (vi) depreciation and amortization, (vii) impairment of real estate assets, (viii) general and administrative expense, and (ix) other income and expense (including interest expense and gain on sale of real estate assets). Considering the nature of its business as a real estate owner and operator, the Company believes that NOI is useful to investors in measuring the operating performance of its portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of the Company's properties, such as lease termination fees, straight-line rental income, net, income or expense associated with the Company's captive insurance company, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, straight-line ground rent expense, net, depreciation and amortization, impairment of real estate assets, general and administrative expense, and other income and expense (including interest expense and gain on sale of real estate assets). The Company believes that same property NOI is also useful to investors because it further eliminates disparities in NOI by only including NOI of properties owned for the entirety of both periods presented and excluding properties under development and completed new development properties that have been stabilized for less than one year and therefore provides a more consistent metric for comparing the operating performance of the Company's real estate between periods.
ABOUT BRIXMOR PROPERTY GROUP
Brixmor (NYSE: BRX) is a real estate investment trust (REIT) that owns and operates a high-quality, national portfolio of open-air shopping centers. Its 362 retail centers comprise approximately 64 million square feet of prime retail space in established trade areas. The Company strives to own and operate shopping centers that reflect Brixmor's vision "to be the center of the communities we serve" and are home to a diverse mix of thriving national, regional and local retailers. Brixmor is a proud real estate partner to over 5,000 retailers including The TJX Companies, The Kroger Co., Publix Super Markets and Ross Stores.
Brixmor announces material information to its investors in SEC filings and press releases and on public conference calls, webcasts and the "Investors" page of its website at https://www.brixmor.com. The Company also uses social media to communicate with its investors and the public, and the information Brixmor posts on social media may be deemed material information. Therefore, Brixmor encourages investors and others interested in the Company to review the information that it posts on its website and on its social media channels.
SAFE HARBOR LANGUAGE
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include, but are not limited to, those described under the sections entitled "Forward-Looking Statements" and "Risk Factors" in our Form 10-K for the year ended December 31, 2023, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website at https://www.sec.gov. These factors include (1) changes in national, regional, and local economies, due to global events such as international military conflicts, international trade disputes, a foreign debt crisis, foreign currency volatility, or due to domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, general economic contractions, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending; (2) local real estate market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio (defined hereafter); (3) competition from other available properties and e-commerce; (4) disruption and/or consolidation in the retail sector, the financial stability of our tenants, and the overall financial condition of large retailing companies, including their ability to pay rent and/or expense reimbursements that are due to us; (5) in the case of percentage rents, the sales volumes of our tenants; (6) increases in property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, which are relatively inflexible and generally do not decrease if revenue or occupancy decrease; (7) increases in the costs to repair, renovate, and re-lease space; (8) earthquakes, wildfires, tornadoes, hurricanes, damage from rising sea levels due to climate change, other natural disasters, epidemics and/or pandemics, civil unrest, terrorist acts, or acts of war, any of which may result in uninsured or underinsured losses; and (9) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in our periodic filings. The forward-looking statements speak only as of the date of this press release, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except to the extent otherwise required by law.
CONSOLIDATED BALANCE SHEETS | |||||||
Unaudited, dollars in thousands, except share information | |||||||
As of | As of | ||||||
12/31/2023 | 12/31/2022 | ||||||
Assets | |||||||
Real estate | |||||||
Land | $ 1,794,011 | $ 1,820,358 | |||||
Buildings and tenant improvements | 8,570,874 | 8,405,969 | |||||
Construction in progress | 126,007 | 129,310 | |||||
Lease intangibles | 504,995 | 542,714 | |||||
10,995,887 | 10,898,351 | ||||||
Accumulated depreciation and amortization | (3,198,980) | (2,996,759) | |||||
Real estate, net | 7,796,907 | 7,901,592 | |||||
Cash and cash equivalents | 866 | 16,492 | |||||
Restricted cash | 18,038 | 4,767 | |||||
Marketable securities | 19,914 | 21,669 | |||||
Receivables, net | 278,775 | 264,146 | |||||
Deferred charges and prepaid expenses, net | 164,061 | 154,141 | |||||
Real estate assets held for sale | - | 10,439 | |||||
Other assets | 54,155 | 62,684 | |||||
Total assets | $ 8,332,716 | $ 8,435,930 | |||||
Liabilities | |||||||
Debt obligations, net | $ 4,933,525 | $ 5,035,501 | |||||
Accounts payable, accrued expenses and other liabilities | 548,890 | 535,419 | |||||
Total liabilities | 5,482,415 | 5,570,920 | |||||
Equity | |||||||
Common stock, | |||||||
309,723,386 and 309,042,754 shares issued and 300,596,394 and 299,915,762 | |||||||
shares outstanding | 3,006 | 2,999 | |||||
Additional paid-in capital | 3,310,590 | 3,299,496 | |||||
Accumulated other comprehensive income (loss) | (2,700) | 8,851 | |||||
Distributions in excess of net income | (460,595) | (446,336) | |||||
Total equity | 2,850,301 | 2,865,010 | |||||
Total liabilities and equity | $ 8,332,716 | $ 8,435,930 | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
Unaudited, dollars in thousands, except per share amounts | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||
Revenues | |||||||||
Rental income | $ 316,404 | $ 308,459 | $ 1,243,844 | $ 1,217,362 | |||||
Other revenues | 81 | 110 | 1,192 | 712 | |||||
Total revenues | 316,485 | 308,569 | 1,245,036 | 1,218,074 | |||||
Operating expenses | |||||||||
Operating costs | 39,815 | 38,816 | 146,473 | 141,408 | |||||
Real estate taxes | 42,961 | 42,260 | 173,517 | 170,383 | |||||
Depreciation and amortization | 89,470 | 90,599 | 362,277 | 344,731 | |||||
Impairment of real estate assets | - | 1,127 | 17,836 | 5,724 | |||||
General and administrative | 30,260 | 30,429 | 117,128 | 117,225 | |||||
Total operating expenses | 202,506 | 203,231 | 817,231 | 779,471 | |||||
Other income (expense) | |||||||||
Dividends and interest | 321 | 116 | 666 | 314 | |||||
Interest expense | (47,204) | (48,493) | (190,733) | (192,427) | |||||
Gain on sale of real estate assets | 6,402 | 50,896 | 65,439 | 111,563 | |||||
Gain (loss) on extinguishment of debt, net | - | - | 4,356 | (221) | |||||
Other | (801) | (702) | (2,446) | (3,639) | |||||
Total other income (expense) | (41,282) | 1,817 | (122,718) | (84,410) | |||||
Net income | $ 72,697 | $ 107,155 | $ 305,087 | $ 354,193 | |||||
Net income per common share: | |||||||||
Basic | $ 0.24 | $ 0.36 | $ 1.01 | $ 1.18 | |||||
Diluted | $ 0.24 | $ 0.35 | $ 1.01 | $ 1.17 | |||||
Weighted average shares: | |||||||||
Basic | 301,022 | 300,474 | 300,977 | 299,938 | |||||
Diluted | 302,430 | 302,258 | 302,376 | 301,742 | |||||
FUNDS FROM OPERATIONS (FFO) | ||||||||||
Unaudited, dollars in thousands, except per share amounts | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||
Net income | $ 72,697 | $ 107,155 | $ 305,087 | $ 354,193 | ||||||
Depreciation and amortization related to real estate | 88,374 | 89,570 | 358,088 | 340,561 | ||||||
Gain on sale of real estate assets | (6,402) | (50,896) | (65,439) | (111,563) | ||||||
Impairment of real estate assets | - | 1,127 | 17,836 | 5,724 | ||||||
Nareit FFO | $ 154,669 | $ 146,956 | $ 615,572 | $ 588,915 | ||||||
Nareit FFO per diluted share | $ 0.51 | $ 0.49 | $ 2.04 | $ 1.95 | ||||||
Weighted average diluted shares outstanding | 302,430 | 302,258 | 302,376 | 301,742 | ||||||
Items that impact FFO comparability | ||||||||||
Transaction expenses, net | $ (58) | $ 9 | $ (256) | $ (1,122) | ||||||
Litigation and other non-routine legal expenses | - | (2) | - | (494) | ||||||
Gain (loss) on extinguishment of debt, net | - | - | 4,356 | (221) | ||||||
Total items that impact FFO comparability | $ (58) | $ 7 | $ 4,100 | $ (1,837) | ||||||
Items that impact FFO comparability, net per share | $ (0.00) | $ 0.00 | $ 0.01 | $ (0.01) | ||||||
Additional Disclosures | ||||||||||
Straight-line rental income, net (1) | $ 6,988 | $ 5,575 | $ 23,498 | $ 23,458 | ||||||
Accretion of below-market leases, net of amortization of above-market leases | 2,739 | 2,072 | 9,153 | 8,793 | ||||||
Straight-line ground rent expense, net (2) | 6 | 7 | 31 | (160) | ||||||
Dividends declared per share | $ 0.2725 | $ 0.2600 | $ 1.0525 | $ 0.9800 | ||||||
Dividends declared | $ 81,913 | $ 77,978 | $ 316,364 | $ 293,755 | ||||||
Dividend payout ratio (as % of Nareit FFO) | 53.0 % | 53.1 % | 51.4 % | 49.9 % | ||||||
(1) Includes straight-line rental income reversals and re-establishments of | ||||||||||
(2) Straight-line ground rent expense, net is included in Operating costs on the Consolidated Statements of Operations. |
SAME PROPERTY NOI ANALYSIS | ||||||||||||||
Unaudited, dollars in thousands | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
12/31/2023 | 12/31/2022 | Change | 12/31/2023 | 12/31/2022 | Change | |||||||||
Same Property NOI Analysis | ||||||||||||||
Number of properties | 357 | 357 | - | 345 | 345 | - % | ||||||||
Percent billed | 90.6 % | 90.2 % | 0.4 % | 90.6 % | 90.4 % | 0.2 % | ||||||||
Percent leased | 94.7 % | 93.9 % | 0.8 % | 94.7 % | 94.1 % | 0.6 % | ||||||||
Revenues | ||||||||||||||
Base rent | $ 221,287 | $ 215,399 | $ 847,190 | $ 811,943 | ||||||||||
Expense reimbursements | 74,683 | 70,079 | 266,957 | 251,991 | ||||||||||
Revenues deemed uncollectible | (1,895) | (1,908) | (5,095) | 4,484 | ||||||||||
Ancillary and other rental income / Other revenues | 6,498 | 6,502 | 23,408 | 23,476 | ||||||||||
Percentage rents | 2,012 | 1,829 | 9,187 | 8,832 | ||||||||||
302,585 | 291,901 | 3.7 % | 1,141,647 | 1,100,726 | 3.7 % | |||||||||
Operating expenses | ||||||||||||||
Operating costs | (40,012) | (37,351) | (137,863) | (130,292) | ||||||||||
Real estate taxes | (42,267) | (40,816) | (157,636) | (157,024) | ||||||||||
(82,279) | (78,167) | 5.3 % | (295,499) | (287,316) | 2.8 % | |||||||||
Same property NOI | $ 220,306 | $ 213,734 | 3.1 % | $ 846,148 | $ 813,410 | 4.0 % | ||||||||
NOI margin | 72.8 % | 73.2 % | 74.1 % | 73.9 % | ||||||||||
Expense recovery ratio | 90.8 % | 89.7 % | 90.3 % | 87.7 % | ||||||||||
Percent Contribution to Same Property NOI Performance: | ||||||||||||||
Change | Percent | Change | Percent | |||||||||||
Base rent | $ 5,888 | 2.8 % | $ 35,247 | 4.3 % | ||||||||||
Revenues deemed uncollectible | 13 | 0.0 % | (9,579) | (1.1) % | ||||||||||
Net expense reimbursements | 492 | 0.2 % | 6,783 | 0.8 % | ||||||||||
Ancillary and other rental income / Other revenues | (4) | (0.0) % | (68) | (0.0) % | ||||||||||
Percentage rents | 183 | 0.1 % | 355 | 0.0 % | ||||||||||
3.1 % | 4.0 % | |||||||||||||
Reconciliation of Net Income to Same Property NOI | ||||||||||||||
Net income | $ 72,697 | $ 107,155 | $ 305,087 | $ 354,193 | ||||||||||
Adjustments: | ||||||||||||||
Non-same property NOI | (2,927) | (5,628) | (41,594) | (57,551) | ||||||||||
Lease termination fees | (743) | (477) | (4,622) | (3,231) | ||||||||||
Straight-line rental income, net | (6,988) | (5,575) | (23,498) | (23,458) | ||||||||||
Accretion of below-market leases, net of amortization of above-market | (2,739) | (2,072) | (9,153) | (8,793) | ||||||||||
Straight-line ground rent expense, net | (6) | (7) | (31) | 160 | ||||||||||
Depreciation and amortization | 89,470 | 90,599 | 362,277 | 344,731 | ||||||||||
Impairment of real estate assets | - | 1,127 | 17,836 | 5,724 | ||||||||||
General and administrative | 30,260 | 30,429 | 117,128 | 117,225 | ||||||||||
Total other (income) expense | 41,282 | (1,817) | 122,718 | 84,410 | ||||||||||
Same Property NOI | $ 220,306 | $ 213,734 | $ 846,148 | $ 813,410 | ||||||||||
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SOURCE Brixmor Property Group Inc.
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