Phillips Edison & Company, Inc.

by our Chairman and Chief Executive Officer Jeff Edison, President Bob Myers, and Chief Financial Officer John Caulfield. Once we conclude our prepared remarks, we will open the call to Q&A. After today's call, an archived version will be published on our website. As a reminder, today's discussion may contain forward-looking statements about the company's view of future business and financial performance, including forward earnings guidance and future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties, as described in our SEC filings, specifically in our most recent Form 10-K and 10-Q. In our discussion today, we'll reference certain non-GAAP financial measures. Information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in our Earnings Press Release and Supplemental Information packet, which have been posted on our website. Please note that we have also posted a presentation with additional information. Our caution on forward-looking statements also applies to these materials. Now, I'd like to turn the call over to Jeff Edison, our Chief Executive Officer.

Jeff? Thank you, Kim, and thank you, everyone, for joining us today. The PICO team delivered another solid quarter of growth, with Same Center NOI increasing by 3.7%. NAREID FFO increased 4.9%, and CORE FFO increased 4.5%. The continued strength of our operating performance is attributable to our differentiated and focused strategy of owning grocer-anchored neighborhood shopping centers anchored by the number one or two grocer by sales in the market, the PICO team's ability to drive results at the property level, and the many advantages of the suburban markets where we operate our centers. The continued strong performance of our portfolio has allowed us to affirm our 2024 core FFO guidance range. The midpoint represents year-over-year growth of 3%. Despite significant interest expense headwinds of nearly 10 cents per share, we believe we can continue to deliver positive earnings growth despite interest expense headwinds. Today, we see a continued strong operating environment and a transaction market that is increasingly more active. The consumer remains resilient, and our grocers continue to drive strong, recurring foot traffic to our centers. Occupancy remains high at 97% lease, which gives us pricing power. Leasing demand continues to be elevated for our inline spaces, and we have limited exposure to big box retailers. Retention remains strong, and the PICO team continues to be proactive in getting spaces back and driving significantly higher rents. This is reflected in our continued strong new rent spreads. In addition, PICO continues to benefit from a number of positive macroeconomic trends that create strong tailwinds and drive strong neighbor demand. We have a great balance sheet, and we are well positioned for our creative acquisitions and growth. During the first quarter, we acquired two shopping centers and one land parcel for a total of $56 million. We remain confident in our ability to acquire high quality centers at attractive returns as the transaction market opens up further. While it's early in the year, we continue to successfully find attractive acquisition opportunities. Activity in the second quarter remains strong. Given the current environment, we are reaffirming our guidance of $200 to $300 million of net acquisitions for the year. We have the capabilities and leverage capacity to acquire much more if attractive opportunities materialize. We continue to target unlevered IRRs of 9% or greater for our acquisitions. As a reminder, The acquisitions that we completed in the second half of 2023 underwrote to over 9.5% on levered IRR. We will maintain our disciplined approach and focus on accretively growing our portfolio. We're hopeful that buy-ins will continue to increase throughout the year. Looking beyond 2024 and assuming a more stable interest rate environment and acquisitions market, we continue to believe our portfolio can deliver mid to high single-digit core FFO per share growth on a long-term basis. This will be driven by both internal and external growth. We remain committed to successfully executing our growth strategy. Our high-quality portfolio, anchored by top grocers in favorable suburban markets, supported by one of the best balance sheets in the sector, provides a long-term, steady earnings growth profile. PICA generates more alpha with less beta given our focused and differentiated strategy. As previously announced by Kroger and Albertsons, the estimated closing date for the proposed merger was pushed back to later this year. Also this week, Kroger added 166 stores to the disposition list to CNS. We remain cautiously optimistic about the impact of this merger on PICA. We continue to believe it is ultimately a positive for PECA, for our centers, and for the communities that our centers serve. The market still gives the merger a low probability of occurring. But should the merger close and 579 stores now on the list are sold to CNS, we believe the impact on PECA is a net positive. Our Albertson stores will be operated by Kroger, which reinvests regularly in their stores and produces higher sales volumes. If the merger does not occur, our Albertsons Anchored Centers will continue the strong performance that they have produced to date. I will now turn the call over to Bob to provide more color on the operating environment. Bob?

Thank you, Jeff, and good afternoon, everyone, and thank you for joining us. We had another quarter of strong operating results and leasing momentum. We continue to see high retailer demand with no current signs of slowing down. PICO's leasing team continues to convert retailer demand into high occupancy with higher rents at our centers. Portfolio occupancy remained high and ended the quarter at 97.2% leased. Anchor occupancy remained high at 98.4%. And during the quarter, we executed five anchor leases, including Alta Beauty, at Hill Figer Shopping Center, Five Below, at Bear Creek Plaza, Crunch Fitness at Kirkwood Marketplace, and two Medtail uses, Rise Center at Ocean Breeze Plaza, and a medical center at Colonial Promenade. In the first quarter, we received six anchor boxes back. We currently have just 15 vacant anchor spaces in our portfolio. Importantly, we were able to drive significantly higher rents on these units. For reference, these six spaces had an average ABR of $8.06, and the five we executed this quarter had an average ABR of $18.37, a 128% average increase. Activity for anchor leases currently out for signature is extremely positive, and we are currently experiencing the strongest anchor demand we've seen in over 20 years. Inline occupancy ended the quarter at 94.8%, an increase of 50 basis points year over year, and a sequential increase of 10 basis points, in the fourth quarter. New neighbors added in the first quarter included quick service restaurants such as Nashville Hot Chicken, The Great Greek, Starbucks, and Wingstop, several MedTel uses, health and beauty retailers such as Hand and Stone, Sola Salons, and other necessity-based goods and services. Our acquisitions in the first quarter were 96% leased at closing. Buying centers with some vacancy will continue to allow us to drive growth. Given PICO's unique external growth strategy, we have added new disclosures for same center leased and economic occupancy, which you can find in our supplemental information packet. We continue to believe that we can push same center inline occupancy another 100 to 150 basis points given the continued strong retailer demand. In terms of new lease activity, we continue to have success in driving higher rents. Comparable new rent spreads for the first quarter were 29.1%. Our inline new rent spreads were a record high 37.4% in the first quarter, which compares to our trailing 12-month average of 27.7%. We continue to capitalize on strong renewal demand and are making the most of the opportunity to improve lease language at renewal and drive rents higher. In the first quarter, we achieved a 16.9% increase in comparable renewal rent spreads. Our inline renewal spreads remained high at 19.2% in the first quarter, which compares to our trailing 12-month average of 18.2%. These increases in spreads reflect the continued strength of the leasing and retention environment. We expect new and renewal spreads to continue to be strong throughout the balance of this year and into the foreseeable future. Progress continues in terms of neighbor retention, and while growing rents at attractive rates, PICO's retention rate remained strong in the first quarter. Our inline retention rate is 83%, well ahead of the historical five-year average of 78%. Higher retention means less downtime and lower TI spend. In the first quarter, we spent only 54 cents per square foot on tenant improvements for renewals, We also remain successful at driving higher contractual rent increases. Our new and renewal in-line leases executed in the first quarter had average annual contractual rent bumps of 2% and 3%, respectively, another important contributor to our long-term growth. The leasing spreads that we are achieving and the strength of our leasing pipeline are clear evidence of the continued high demand for space in our grocery-anchored neighborhood shopping centers. PICO's pricing power is a reflection of the strength of our focus strategy and the quality of our portfolio. PICO continues to benefit from a number of positive macroeconomic trends that create strong tailwinds and drive robust neighbor demand. These trends include a resilient consumer, hybrid work, migration to the Sunbelt, population shifts that favor suburban neighborhoods, and the importance of physical locations and last mile delivery. The impact of these demand factors are further amplified due to limited new supply over the last 10 years and going forward, given that current economic returns do not justify new construction. A healthy mix of national, regional, and local retailers adds many benefits to our grocery-anchored portfolio. Seventy percent of our rents come from neighbors offering necessity-based goods and services, and our top grocers continue to drive strong, reoccurring foot traffic to our centers. PICO's three-mile trade area demographics include an average population of 67,000 people and an average median household income of 87,000, which is 12% higher than the U.S. median. These demographics are in line with the store demographics of Kroger and Publix, which are PICO's top two neighbors. Our centers are situated in trade areas where our top grocers are profitable and our neighbors are successful. We also enjoy a well-diversified neighbor base. Our top neighbor list is comprised of the best grocers in the country. Our largest non-grocer neighbor makes up only 1.2% of our rents, and that neighbor is TJ Maxx. All other non-grocer neighbors are below 1% of ABR. To put a finer point on neighbor mix, PECO has no exposure to luxury retail and very limited exposure to distressed retailers. Our top 10 neighbors currently on our watch list represent just 2% of ABR. with no one retailer representing more than 40 basis points of ABR. While our bad debt was slightly elevated in the first quarter, we actively monitor the health of our neighbors. We are not concerned about bad debt in the near term, particularly given the strong retailer demand. To note, this is not attributed to national bankruptcies, as we don't have any meaningful concentrations. From an operations standpoint, we have always taken an aggressive stance to get spaces back, And in today's environment, the PICO team is taking an even more aggressive stance on opportunities where we can get higher spreads. We are seeing 40% in-line rent spreads on the units we are getting back. 27% of our ABR is derived from local neighbors. The majority of our local neighbor rents come from retailers offering necessity-based goods and services. Our local neighbors are successful businesses run by hardworking entrepreneurs. They have healthy credit and are less susceptible to corporate bankruptcy caused by weaker performing locations. Local neighbors offer favorable economic returns. A typical local retailer receives less capital at the beginning of their lease, accepts more PICO-friendly lease terms, and has high retention rates. PICO retained 85% of local neighbors in the first quarter. For in-line local neighbors, renewal rent spreads remain strong at 20.2%. Importantly, local retailers meaningfully differentiate the merchandise mix that our neighborhood centers offer our customers. Our in-line local neighbors are resilient and have been in our shopping centers for 9.7 years on average. In addition to our strong rental growth trends, we continue to expand our pipeline of ground up out parcel development and repositioning projects. During the first quarter, we stabilized four projects and delivered over 180,000 square feet of space to our neighbors. These four projects add incremental NOI of approximately 2.3 million annually. They provide superior risk adjusted returns and have a meaningful impact in our long-term NOI growth. We continue to expect to invest $40 to $50 million annually in ground-up development and repositioning opportunities, with weighted average cash-on-cash yields between 9% and 12%. This activity remains a great use of free cash flow and produces attractive returns with less risk. Our team continues to stay focused on growing this pipeline as the returns are accreted to the portfolio. In summary, the PECO team remains optimistic given the current strong operating environment and the continued positive momentum we're experiencing across leasing, redevelopment, and development. Our healthy neighbor mix and grocery anchored strategy positions PECO well for continued growth. The overall demand environment, the stability of our centers, the strength of our grocers, and the capabilities of our team gives us great confidence in our ability to continue to deliver solid operating results. I will now turn the call over to John. John?