Brixmor Property Group Inc.

Greetings and welcome to Bixmore Property Group, Inc. First Quarter 2021 Earnings Conference Call. At this time, all participants are in 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. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Stacey Slater, Senior Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

Thank you, Operator, and thank you all for joining Bricksmoor's first quarter conference call. With me on the call today are Jim Taylor, Chief Executive Officer and President, and Angela Ahman, Executive Vice President and Chief Financial Officer, as well as Mark Horgan, Executive Vice President and Chief Investment Officer, and Brian Finnegan, Executive Vice President, Chief Revenue Officer, who will 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, and 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. 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. Given the number of participants on the call, we kindly ask that you limit your questions to one or two per person. If you have additional questions regarding the quarter, please re-queue. At this time, it's my pleasure to introduce Jim Taylor.

Thank you, Stacey, and good morning, everyone. Thank you for joining our call. I'm extremely grateful for how this Bricksmore team continues to deliver. Our performance prior to, during, and now emerging from the pandemic highlights not only the strength of our portfolio, but also the quality of our team, our value-added platform, and the disciplined execution of the business plan we implemented nearly five years ago. But don't just take my word for it. Simply look at our NOI performance in 2019, 2020, and now emerging from the pandemic in 2021. In each period, our performance stands apart, and when you stack that performance for the entire timeframe, the difference is even more striking. This pandemic has revealed several fundamental truths about the shopping center business, including the durability and resilience of our asset class, the importance of being within the last mile of the consumer, and the flexibility of our format. But among the most important truths is that if you are looking to drive value and growth in ROI, rent basis matters. For a retailer to be successful, you must not only have a location that is convenient to their customer, you must provide a cost of occupancy at which they can be profitable, continue to invest in their stores, grow sales, and thereby afford growing rents. If our job is to grow rents and ROI, we believe having a high rent basis is a potential liability, not an asset. We further believe having an attractive rent basis enhances the cap rate or multiple that should be applied to our centers. Said differently, it's not where ABR is, but where it's going. At Bricksmore, our attractive rent basis and value-added execution position us to substantially outperform as the economy accelerates post-pandemic. The markers of that coming outperformance are evident in our sector-leading leasing volumes, our building forward leasing pipeline, our strong cash spreads on new and renewal leases, our continued delivery of accretive reinvestments, and importantly, the impact those reinvestments have on our asset value. During the quarter, the national and regional teams executed leasing at a blistering pace under Brian's leadership. signing 1.4 million square feet of new and renewal leases, with cash spreads on new leases of over 20%. With 140 new leases executed during the quarter, new lease productivity was on par with the peak in 2019. We will provide additional color in the question and answer session, but encouragingly, we are seeing demand across all of our core tenant categories, including specialty grocery, home, general merchandise, value apparel, pets, restaurants, and health and wellness. Also, we're seeing a remarkable recovery in demand from small shop tenants, including national, regional, and local tenants, which allowed us to drive sequential growth of 40 basis points in our small shop lease occupancy during what is typically a seasonally slow quarter. This improvement in small shop demand, which in part reflects the fruits of our reinvestment program and enhanced operating discipline, will be yet another lever of growth as we move through the recovery. And our forward visibility on growth continued to improve this quarter as our productivity and executed leases drove over $40.4 million of signed but not yet commenced revenue, which is equally balanced between small shop and anchor spaces, and 70% of which is expected to commence before year end. Our strong productivity is also reflected in our forward leasing pipeline, which currently stands at over 2.2 million square feet and 41.2 million of ABR. We continue to execute under our reinvestment program under Bill and Haig's leadership, delivering another $28 million of value-enhancing investment and an incremental return of 11%, with another $400 million of projects underway and an average return of 9%. These projects not only drive great ROI while enhancing our centers, They also create value through reducing the cap rate that would be applied to the centers enhanced through that leasing and reinvestment. Since we've begun the program, we've delivered over $500 million of reinvestment at an average incremental return of nearly 10%. Just on the capital deployed, we've created huge value given those accretive yields. But in fact, those investments have also reduced the applied cap rates on the impacted centers. centers that comprise nearly 30% of our total NOI. That cap rate compression is a value multiplier, and for those of you focused on growth and NAV, I would invite you to review the projects we have completed in our supplement or on our website to fully appreciate that follow-on value creation. We are also seeing positive momentum from an external growth perspective under Mark's leadership. We are pleased to announce subsequent to quarter end the $48.5 million acquisition of the center of Bonita Springs, located on the prime corner of one of the busiest intersections in southwest Florida. With an exceptionally highly productive grocer, this center, which is our 48th in the state, will generate tremendous upside as we execute the repositioning of an underperforming anchor currently paying only $2 a foot in rent, as well as lease up the small shop space, which is currently at 60% occupied. Mark and team continue to see their pipeline and build of target assets in our core markets that will yield great opportunities for us to continue to leverage our platform and generate growth. And under Angela's leadership, our balance sheet remains very strong, with more than ample liquidity to capitalize on what we believe will be a growing pipeline of attractive acquisition opportunities. But most importantly, regardless of what opportunities we deliver from an external growth perspective, I'm particularly pleased with how the ongoing execution of our balanced business plan that we communicated over four years ago has demonstrated outperformance both through the pandemic and as we emerge in 2021, 2022, and beyond. With that, I'll turn the call over to Angela for a more detailed look at our results this quarter and our improved outlook. Angela?