Brixmor Property Group Inc.

Greetings and welcome to the Brixmore Property Group's fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. The 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. I would now like to turn the call over to Stacy Slater. Thank you. You may begin.

Thank you, Operator, and thank you all for joining Bricksmore's fourth 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 SAC 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.

Thanks, Stacey, and good morning, everyone. I'll be brief in my opening remarks, as I believe our results this quarter and this year truly speak for themselves. As you review them, please dig in and consider how, across every metric, these results demonstrate our accelerating outperformance as we execute our value-add plan, how they set us up for and provide visibility on continued outperformance in 22 and beyond, and importantly, how they underscore the portfolio transformation that has occurred at Brixmore. As always, our outperformance begins with leasing, where for the year we signed 3.1 million feet of new leases at average cash spreads of over 27%. That volume included nearly a million feet of new leases in the fourth quarter, signed at a record ABR of over $20 a foot, and an average spread of 42%. In addition, for the full year, we achieved an all-time record new lease ABR of $18.66 a foot as we leveraged strong demand from growing retailers to be in our centers. We remained disciplined with capital, achieving another all-time record net effective rent of $17.82 a foot. We also achieved an all-time high for small shop occupancy at 86.7%, but have left more room to run as we benefit from the improvements we've made at our centers. And we drove our average in-place ABR to $15.42, another all-time record for the company that also underscores the additional mark-to-market we have yet to harvest as we capitalize on our attractive rent basis. Looking ahead, our visibility on growth remains as strong as ever. as demonstrated by the record $13 million in ABR we commenced during the fourth quarter, the over $50 million of signed but not commenced rent that will commence over the coming quarters, and the additional $45 million of ABR in our forward leasing pipeline. Under Brian, David, and the regional leasing teams, we continue to grow market share with our core tenants while also bringing new concepts to the portfolio including several mall-native retailers seeking the competitive traffic of our well-located open-air centers. We also were successful in signing 14 grocer leases that will catalyze accretive reinvestment activity at the centers impacted, and which grows our pro forma mix of grocer-anchored centers to nearly 80% of our portfolio. Speaking of reinvestments, we delivered another $68 million of projects in the fourth quarter, bringing our total for the year to $168 million. at an average incremental return of 11%. As we often highlight, that is the equivalent value creation of nearly $840 million of ground development delivered this year, but at much, much lower risk. And that reinvestment has a flywheel effect, both in terms of follow-on leasing, which we've demonstrated amply throughout the year, but also compression and applied cap rate as we improve those centers. At the end of the year, we have an additional $374 million of reinvestment underway at an expected incremental return of 9%, and we continue to grow our forward pipeline, which now stands at over $900 million, including some very exciting opportunities of our recent acquisitions that I'll cover in a moment. Under HIG's leadership, our operations team continue to ramp our service levels at the properties while minimizing leakage. We were also able to compress timeframes between lease execution and rent commencement by nearly 20%, despite the headwinds of supply chain disruption, as our construction and tenant coordination teams work with tenants to find practical solutions to get stores open sooner. Perhaps most importantly, I'm very pleased with how the improved operations and appearance at our centers is driving great follow-on leasing activity. Looking forward, our execution and leasing, reinvestments, and operations drives a top-line outlook for 22 of 4 to 5%, which I believe will lead the sector. That expected outperformance is particularly impressive when you stack it with our historical outperformance, both through and emerging from the pandemic, as well as when you look at our prospects beyond this year as we execute our plan. In addition to delivering robust internal growth under Mark's leadership, We are executing upon exciting external growth opportunities through acquisitions of assets like Bonita Springs and Granada Shops in Southwest Florida, Brea Gateway in Orange County, California, Arboretum in Dallas, Texas, and King's Market and Connection, both in Atlanta, Georgia. Since the beginning of last year through today, we've closed on over $390 million of acquisitions that further cluster our investments in markets where we perform well and and in centers that provide further upside through leasing, reinvestment, and operations. Stay tuned in the coming quarters as we announce additional opportunities and also as we launch accretive reinvestments at recently acquired centers. In fact, we're already at least on two new anchor repositions at rents well above the underwritten rents for the acquisitions. Our tenants and communities are very excited about the changes we'll be bringing to these centers. Before turning the call over to Angela for a more detailed discussion of our results and outlook, I'd like to close by observing how pleased I am with how this team continues to deliver under the plan we laid out several years ago, how that performance is accelerating as we've transformed the portfolio, and importantly, how we continue to advance towards our purpose of creating and owning centers that are truly the center of the communities we serve. Angela?