Brixmor Property Group Inc.

Greetings, and welcome to the Brixmore Property Group first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A brief 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 is now my pleasure to introduce your host, Stacey Slatter, Executive Vice President and Investor Relations. Thank you. You may begin.

Thank you, Operator, and thank you all for joining Bricksmore's first quarter conference call. With me on the call today are Brian Finnegan, CEO and President, and Steve Gallagher, Chief Financial Officer. Mark Horgan, Executive Vice President and Chief Investment Officer, will also 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 per person. If you have additional questions, please re-queue. At this time, it's my pleasure to introduce Brian Finnegan.

Thank you, Stacey, and good morning, everyone. I am pleased to report on another quarter of outstanding results by the Bricksmore team as we continue to execute across all facets of our business plan to start the year. We grew same property NOI 6.4% over last year, and delivered 58 cents per share in FFO, results that demonstrate the momentum that is accelerating across the platform, which is also reflected in our improved outlook for the year. These results continue to differentiate Bricksmore in what remains a positive backdrop for open-air grocery-anchored retail. Before providing additional detail on Bricksmore's strong start to the year, I want to share a few thoughts on the broader environment and how Bricksmore is positioned within it. We are operating in a period of heightened uncertainty. Geopolitical tensions and capital markets volatility are real, and we are monitoring them. That said, the fundamentals for our property type remain exceptionally strong. Consumer traffic at our centers continues to grow, with over 220 million visits in the first quarter, up over 3.5% year over year. New supply remains at historic lows. and demand from high-quality retailers for well-located space is as strong as we have seen, as physical stores remain the most cost-effective way to deliver goods to the consumer. These secular tailwinds are attracting institutional capital into our sector at the highest pace in decades. Within this environment, Bricksmore stands apart. We have meaningful embedded upside across our portfolio. enabling us to continue to deliver on industry-leading mark-to-market opportunities. Our reinvestment and sign-but-not-commence pipelines provide exceptional visibility into future cash flow growth. The underlying credit quality of our tenant base is the strongest in our company's history, and we have the talent and experience to continue to deliver for our stakeholders. Now let's turn to our results for the quarter. which highlight the operating strength in our business. Leasing demand from best-in-class tenants remains elevated. We executed 1.3 million square feet of new and renewal leases at a blended cash spread of 27%, with new lease spreads at 42%, and record renewal growth of 21%. Our team is capitalizing on strong tenant demand, as well as the investments we have made across the portfolio, to elevate the quality of our tenant mix. During the quarter, we added first to portfolio locations with Pottery Barn, Williams-Sonoma, L.L. Bean, Rowan, and Tesso Life, while continuing to grow with leading operators across the off-price, health and wellness, and quick service restaurant segments. From an occupancy perspective, total lease occupancy ended the quarter at 95.1%. flat sequentially, and up 100 basis points year over year, while small shop occupancy was 92.1%, up 130 basis points year over year, underscoring sustained demand for space. We are still well below peak occupancy expectations for the portfolio, which represents meaningful future upside. And while we do expect overall occupancy headwinds in the second quarter, Due to a handful of anticipated box recaptures, we expect to return to a growth trajectory in the second half of the year. Our leasing activity during the quarter also increased our signed but not commenced pipeline to $67 million, up 10% year-over-year. Accretive reinvestment remained central to our strategy, and we were active in the first quarter. we stabilized 78 million of projects at a 9% average incremental return. This included two transformational projects, the opening of our first large format target at Wynwood Village in South Dallas, Texas, and phase one of Block 59 in suburban Chicago. Both have been exceptionally well received in their respective markets and demonstrate our team's ability to execute large-scale projects that generate meaningful value creation and growth, with future phases still to come at both locations. We also commenced phase three of our Roosevelt Mall redevelopment in Philadelphia, further densifying the site with exceptional operators like Ulta, Shake Shack, and Victoria's Secret. We continue to make meaningful progress on our out parcel development program, adding a record six new projects at an attractive 16% incremental return. This has been and will continue to be a compelling area of focus, as demand is deep, returns are strong, and the program is highly complementary to our merchandising strategy. In addition, the communities that we serve are increasingly supportive of these projects, as they share our desire to convert large, underutilized parking fields into thriving retail and restaurant destinations. At quarter end, our active reinvestment pipeline stood at $302 million with a 10% average incremental return with another $700 million in our future pipeline, including opportunities and assets we acquired over the last two years. The depth of this pipeline continues to differentiate Bricksmore, providing many years of runway for a creative reinvestment. On the transaction front, the market has been competitive and dynamic. Increasing demand for open-air retail allowed Mark and team to dispose of 108 million of assets where value had been maximized. And while we did not acquire any assets during the quarter, we continue to identify compelling opportunities to put our platform to work, with over 160 million of assets under control in high-growth markets where we have a strong presence and a deep pipeline of additional opportunities we are currently underwriting. To support our capital recycling strategy, we raised $116 million through our Forward ATM, which provides flexibility as we execute. We will remain disciplined in our approach to capital allocation, focused on acquiring assets where our platform can create value and that are accretive to our long-term growth profile. Before I turn it over to Steve, I want to take a moment to thank the entire Bricksmore team. The results we delivered this quarter and the acceleration of our business plan are a direct reflection of your focus, discipline, and commitment to this company. I am incredibly proud of this team and grateful for the energy and thoughtfulness you bring every single day. With that, I will turn the call over to Steve for a deeper review of our financial results and improved 2026 outlook. Steve? Thanks, Brian.

I'm pleased to report solid first quarter results and an improved forward outlook as we continue to capitalize on the strength of the current retail environment and the embedded opportunity within the Bricksmore portfolio. First quarter same property NOI increased 6.4%, supported by a 410 basis point contribution from base rent growth due to the stacking of rent commencements. Angeline's other income contributed an additional 120 basis points, driven in part by the Point Orlando garage restructure discussed last year. While these dollars are recurring, the year-over-year benefit to same property NOI growth is limited to the first quarter, as the garage contribution began in the second quarter of last year. Revenues deemed uncollectible contributed 30 basis points to growth as we continue to benefit from the improving underlying credit quality of the portfolio. Nareed FFO was $0.58 per share in the first quarter, benefiting from the strong St. Property NOI performance. Our Sign But Not Yet Commence pipeline ended the quarter at $67 million at a record $24 per square foot, 25% above in-place ABR per square foot, and ended the period with a 370 basis point spread between leased and billed occupancy. We anticipate approximately $38 million of that Sign But Not Commence ABR to commence ratably throughout 2026. Turning to our forward outlook, we increased our same property NOI growth guidance to 4.75 to 5.5%, and our FFO guidance to $2.34 to $2.37 per share. We expect base rent contribution to growth will accelerate as the year progresses, and we continue to expect revenues deemed uncollectible, a 75 to 100 basis points of total revenues, supported by ongoing positive trends in rent collections. The increase in our FFO guidance reflects the strength and visibility of our same property NOI trajectory. From a balance sheet perspective, we took advantage of our improved cost of capital and proactively raised $115 million of equity under our at-the-market equity program on a forward basis to partially fund our growing acquisition pipeline. As we look to our upcoming bond maturity in June, we proactively entered into a $200 million interest rate hedge at 3.99%. providing us protection against recent volatility in the treasury markets. We ended the period with $1.8 billion of available liquidity, including $425 million in cash, $115 million of unsettled forward ATM proceeds, and $1.25 billion in capacity under our revolving credit facility, leaving us well-positioned with flexibility to execute under our business plan. Debt to EBITDA is 5.3 times as the continued growth and free cash flow of the underlying portfolio has allowed us to naturally deleverage while funding accretive redevelopment and acquisition pipelines. Our first quarter results demonstrate strong fundamentals, sustained leasing momentum, and solid visibility into future earnings. With same property NOI and FFO growth expected to be approximately 5% at the midpoint of our revised guidance. Supported by meaningful embedded growth and a flexible balance sheet, we are well positioned to execute and drive long-term value. And with that, I'll turn the call over to the operator for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. As a reminder, we ask analysts to limit themselves to one question and to re-queue for a follow-up so that other analysts have an opportunity to do so as well. One moment, please, while we poll for questions. Our first question comes from Michael Griffin with Evercore ISI. Please proceed with your question.

Great, thanks. Brian, appreciate your commentary there on the prepared remarks. Curious if you could quantify the expected headwind to occupancy in the second quarter that you detailed, and then maybe as it relates to the snow commencement, Steve, I know you mentioned about $38 million coming on ratably throughout the balance of the year. If that delta between signed and occupied was 370 basis points in the first quarter, how do you expect that to progress throughout the balance of the year? Thank you.

Yeah. Mike, hey, thanks for the question. Just on the first part related to occupancy, we're highlighting because it may impact the growth trajectory throughout the year. It's not always linear. Those boxes are within our improved guidance range outlook. There's opportunity there for mark the market. We knew we were getting them back. We do expect to get back on a path to growth. Overall, we're very pleased with the occupancy trends. in the portfolio we're well below peak occupancy so it's a handful of boxes we expect it to be modest but ultimately expect to be able to put better tenants in at much higher rents steve yeah and on the the commencement side of the snow pipeline i mean i think we do expect it to

to commence ratably, but I think importantly, you know, the entire team is really focused on backfilling that pipeline. So, I think Brian would have mentioned that on the last call of as we continue to backfill and commence around that pipeline, you might see it wider for the remainder of the year as there's some really impactful leases within that snow pipeline that are coming on in 2027. One of our largest pipelines we've had with Publix are in sort of that longer-term pipeline within the snow pipeline.

Thank you.

Our next question comes from Michael Goldsmith with UBS. Please proceed with your question.

Good morning. Thanks a lot for taking my question. Can you talk a little bit about the acquisition environment? What are the opportunities you're seeing if you're seeing any competition and if that's influencing pricing? Clearly, you've disposed of some stuff during the quarter and you've hit the ATM, so you You've got the liquidity to participate, but just kind of get a sense of the opportunities that you can use this capital on things.

Yeah, Michael, I would just say, as I mentioned, it's been competitive, but we also like what we're seeing out there. Mark, why don't you give more detail on it?

Yeah, I think as Brian highlighted in his remarks, we're certainly seeing new capital come into the space, which I think is a real reflection of the healthy fundamentals that everyone's seeing, and I think a good signal for future growth in the overall economy. in open-air retail. From a competitive market perspective, that new capital is certainly compressing cap rates really across all asset types. You're seeing the tightest compression on smaller grocery-anchored deals, smaller unanchored deals. We're also seeing the return of some really low-priced capital that's chasing high-profile deals, have pushed some deals into the high fours in certain cases. From a bricks-and-mortar perspective, we've been at this acquisition game for a long time. We've developed lots of relationships. So as we think about that sourcing of acquisitions, part of it's through broker, like it's been for many years, and the other half really has been direct deals. That's how we compete. We really try to have a good and intentional way of thinking about assets that work for Bricksmore. You should expect us on the transaction front to always remain disciplined. If you look at last year, we didn't close any acquisitions in the first couple quarters. We closed $420 million in the second half of the year. So we really try to drive this business for long-term cash flow and value growth. We're excited about what we see in this $160 million we have under control. And importantly, we see a really healthy pipeline of assets behind that. And we're going to continue to find those assets where we can really put our platform to work and drive strong rent mark-to-market redevelopment opportunities and drive those unlevered IRs in that 9% to 10% range. So we're really, really bullish about what we're seeing in the acquisitions market today, but expect us to remain disciplined as we put capital out.

Yeah, and Michael, I would just add, we've been thrilled with how the team's executing on what we bought. We're ahead of our underwriting on the $400 million that we bought last year. So that gives us a lot of conviction as we are out there in the market in terms of being able to drive a growth profile that's accretive to the growth profile of the company that's in line with what we've been doing. So we're excited about that.

Excellent color here, guys. Thanks. Good luck in the second quarter.

Our next question comes from Alexander Goldfarb with Piper Sandler. Please proceed with your question.

Hey, good morning. A little bit of feedback on this line. So question for you, big picture. We've had massive inflation since COVID the past few years, which fortunately seems to be subsiding. But now we have spiking energy prices. Yet you guys don't seem to talk about any slowdown in tenant leasing. You talked about consumer traffic being up, I think, 3% year over year. So is it just that the consumer and the retailers are just basically impenetrable from price shock? Or how do we sort of manifest this, especially as your portfolio is sort of middle market? It's not like you're super high end. You're middle market. So just trying to get a better sense for how the consumer and the retailers seem to be stomaching when the headlines would suggest otherwise.

Yeah, Alex, it's a great question. I'd say consumers are adapting versus collapsing. I think across the income spectrum, you're seeing consumers look for value. That helps our grocers. That helps our off-price retailers. There's a higher percentage of share going to health and wellness. That helps our fitness operators and helps our higher-quality restaurant options. I think you are seeing some positive trends still in the economy. If you look at there's still decent wage growth. Still a strong job market. Traffic, we've been pleased with those traffic trends. Interestingly, from a leasing perspective, two-thirds of our leasing during the quarter happened after the conflict started. So I think the retailers today have been nimble and have been catering to what the consumers want. I think the other point is, if you look at retailers today, and you heard it a lot on the recent earnings calls from retailers, is that they've got more data today than they ever have on their consumer in terms of understanding what's selling within the stores, understanding what's getting delivered from the stores, and how that fits within an omnichannel strategy. So I think they're much better positioned in terms of being able to adapt to different consumer trends. And we've been encouraged. Look, it's something that we're watching very closely. We don't see any delinquencies picking up in our small shop tenancies today. You can see that coming through in the bad debt numbers for the quarter. So something we continue to watch, but have been encouraged by the trend so far.

Okay. Thank you, and good luck with your flyers.

Thanks, Alex. We appreciate it.

Our next question comes from Todd Thomas with KeyBank Capital Markets. Please proceed with your question.

Yeah, hi, thanks. Good morning. I just wanted to ask on the equity issuance in the quarter, that decision there. I'm just curious if you can speak about that and your interest level to issue additional equity at current prices, just how you're thinking about funding obligations in general and whether you might look to, you know, over-equitize acquisitions here a bit, perhaps drive down leverage more meaningfully than you had previously.

Todd, I'll take the first part. Maybe Steve can chime in if he has anything to add. So we saw a window during the first quarter with the acquisition pipeline growing to utilize the ATM on a forward basis. It's very similar to what we did at the end of 2024 to help fund acquisitions. We're going to continue to be remain very disciplined with our equity. We recognize that it's precious, but we saw an opportunity. So we took it during the first quarter and we're pleased with what we're seeing in the acquisition market.

Yeah. And I mean, these are long-term assets and we think about our balance sheet on the long term. So while the match funding might not always occur in a quarter, we're really thinking about the long-term funding in our business. I think importantly what you've seen in our leverage level is that we've been able to naturally de-lever just through the growth that's coming through in the portfolio without having to issue equity. And that's something, you know, at 5.3 times leverage we feel really comfortable where we are today.

Our next question comes from Handel St. Just with Zuhu Securities.

Please proceed with your question.

Hey there. Thanks for taking my question. So my question is on the leasing capex. A bit of a jump in the quarter. I think it's up 30% year over year. Assuming that's tied to the recent back fillings and why the anchored and leased spreads are up 90%. So maybe some color on what's driving this and should we expect the leasing capex figure to stay elevated near term given the size of the snow pipeline? Thanks.

Yeah, Hendo. We remain pleased with just the overall capex trends in the portfolio. I think it was the nature of the pool this year If you looked at overall CapEx, it was down versus the fourth quarter of last year. We expect CapEx as a percentage of NOI to be in line with where we were a year ago, which were decade lows for this portfolio. All the things that we've been talking about relative to demand for space, tenants taking on more existing conditions, has allowed us to be more efficient in that leasing capital spend. We did lease a lot of space last year, so there are some costs associated with that. But we're filling those boxes much more efficiently. Our payback trends remain at decade lows for the portfolio as well. And just thinking of CapEx overall, maintenance CapEx will continue to be at a level we were at a year ago, which were, again, lowest for the portfolio. So we feel like we're very well positioned in terms of what we're seeing from those CapEx trends. And what you saw during the quarter was just the nature of how some of the deals came through.

Thank you.

Our next question comes from Greg McGinnis with Scotiabank. Please proceed with your question.

Hey, good morning. I appreciate the color so far on the acquisition market, but I'm curious kind of what type of buyer you're running into on the competition side and also who tends to be acquiring your assets and at what cap rates. And then was the comment on high four cap rates related to the types of assets that you'd be interested in acquiring? or is that just a high watermark that you've seen in the market?

Sure on that. That's really just a high watermark you're seeing from some of the lower-priced capital coming in, our high-profile deals. Our strategy is going to remain finding assets where we can drive long-term IRR growth in that 9% to 10% range. That was really just trying to highlight where cap rates have gone for certain assets. With respect to buyers, you've seen a full range of buyers we've talked about, Over the past, you've seen private equity funds come in. You've seen the rise of high net worth buying assets. You've seen smaller private equity funds come to the forefront. The real broad trend you're seeing is that a lot of private capital is saying to itself that the cash flow generation out of open-air retail is very attractive relative to other asset types today. And that's where they're coming into the space. They're seeing very strong fundamentals that Steve and Brian have been talking about, and they like access to this cash flow level. who we're competing with is really that full set of folks, both when we're trying to buy assets, we're selling assets to that same group of folks, and really where it comes back to for Bricksmore is our operating platform. This is a group of great operators, and we try to find those assets where we can put a platform to work to drive value.

Okay, thank you.

Our next question comes from Caitlin Burrows with Goldman Sachs. Please proceed with your question.

Hi, good morning everyone. Maybe just on the same-strand OI growth side, I know you guys gave some comments about a unique factor that drove especially strong results in the first quarter. You mentioned potential like expected occupancy dip in the second quarter. Could you go through what it would take to kind of get you to the low versus high end of the same-strand OI guidance range now?

Yeah, I think importantly, when you look at the trajectory of same property NOI growth, like focusing on that top line base rent, that has been accelerating, right? The contribution from that to same property NOI has really been accelerating since the middle of last year, and we expect that to continue throughout the remainder of this year. When you think about the highs and lows and puts and takes, it's pretty similar to most cores. I know it kind of sounds boring at times, but it's working every day, which the team is doing to get rent commencing sooner, right, pulling those rent commencement dates forward, continuing to lease additional space, getting them open in a year, and then ultimately what will happen on the bad debt side. We've seen some positive trends in there. We still think 75 to 100 basis points is appropriate where we sit at this point in the year, but that's really the puts and takes to the high and the low within that range.

Yeah, and Caitlin, just because you mentioned occupancy again, just to reiterate, we expect that impact to be fairly modest. We do get the question on trajectory a lot. We're expecting to be back on a path to growth towards the end of the year. What we leased in the first quarter was ahead of where we were last year. Our deal flow into committee is ahead of where we were both in rent and square footage, so We remain very excited by what we're seeing in the leasing environment. It's just not always linear in terms of the growth trajectory as it relates to occupancy.

Thanks.

You got it.

Our next question comes from Cooper Clark with Wells Fargo. Please proceed with your question.

Great, thanks for taking the question, and I appreciate the earlier comments on the acquisition pipeline. I just wanted to touch on the transaction market and was curious if you could provide any incremental in terms of liquidity today, as it seems like higher demand for the sector is being met with ample amount of product coming to the market. Also, any colors on some of the products where you might be seeing better opportunity, whether on the large format side or value add?

Yeah, let me start and I'll give it to Marcus. He's going to have more detailed color. I think what you're seeing from institutions and the demand for the space is because of all the great things that are happening. We're in a very low supply environment. traffic continues to grow at our shopping centers, the consumers remain resilient, our retailers are performing, and there continues to be upside in the asset class. So I think that's why you're seeing so much demand just from a wide range of capital sources. Mark, I don't know if you want to provide any more detail on it.

No, but just to reiterate what you said, it's been a big change over the last several years with the amount of capital flowing in. There's plenty of liquidity for assets today. As far as where we're seeing opportunities, It's the same type of opportunity that we've been trying to take advantage of for a long time. We really try to find opportunities where an asset's been under-rented, where there's large rent, mark-to-market, and redevelopment opportunities. That really won't change. It's preferable to split capital. We really want to find a way to split our platform to work and drive long-term value and cash flow.

Great. Thank you.

Our next question comes from Craig Mailman with Citi. Please proceed with your question.

Hey, guys. Just to follow up on the acquisition side of things, as we think about the equity being put to work, how should we view kind of the going-in yields versus that longer-term 9 to 10 IRR? And then also just maybe on the other side of Todd's earlier question about over-equitizing, how do you guys think about just competing with the private guys are using more debt, giving us to build the asset class and you know, the, you and your public peers kind of driving down leverage at the same time. Um, it kind of puts you at a competitive disadvantage on the margin. Just how do you think about the use of equity here versus even expanding leverage a bit on the margin?

Um, yeah, Craig, let me, let me just start cause we are spending a bunch of time on, on acquisitions and we are pleased with what we're seeing in the market. But let's not forget our core business strategy is to accretively reinvest in the portfolio. We had a fantastic quarter on the redevelopment front. The pipeline continues to be very large. Our team is demonstrating the ability to deliver larger projects at scale. You're seeing those come through. So we have been pleased with what we're seeing on the acquisition market. We're going to continue to be opportunistic there. But it is kind of secondary to what we do. We can remain disciplined there. We don't have to buy to drive growth. So I just want to frame that up, and then maybe I can kind of give it to Mark a little bit for the rest of your question in terms of some of the puts and calls.

I can let Steve talk about the balance sheet, but I was going to hit on the same exact point, Brian, how we're competing with the private capitals that they're seeking. simple, more stabilized deals, and we're trying to find assets where we can put our platform to work for future redevelopment like a Britain platform a couple years ago. The private folks aren't really seeking that type of opportunity today.

Yeah, and on the balance sheet side, the issuance of the equity, I mean, we look at all sorts of the capital available to us. We were a net acquirer last year. We didn't issue any equity, right? So it's looking at the long-term financing of the business and providing us with the flexibility to be able to execute under the business plan. I mean, the redevelopment pipeline is still funded. with free cash flow and a leveraged neutral basis. So where we're issuing equity is generally going to be additive to what we can do in the transaction market.

Our next question comes from Samir Canal with Bank of America. Please proceed with your question.

Good morning, everybody. I guess, Brian, maybe talk about bad debt and what's that tracking year to date. and how that compares to your guidance of, I think you said, 75 to 100 basis points. Sounds like you're tracking better from your comments, but you've left the guide unchanged from that perspective. Any categories driving that conservatism? Thanks.

Yeah, Steve can touch a bit on the guide, but this is the best underlying credit profile this portfolio has ever seen. move-outs, which were historic lows for the portfolio last year, are down 10% from a GLA perspective thus far year-to-date. If you were to include the bankruptcies, that's just normal course move-outs. If you include the bankruptcies last year, they're cut in half. And so from a payment trend perspective, all the things that we've been doing to the portfolio to attract higher-quality tenants to The stringent underwriting standards that Steve's team has in place working with our leasing team has positioned us very well. I think as you look out at the balance of the year, we feel like we're adequately provisioned, but we feel very confident in terms of the quality of the cash flows that we have in the portfolio today. From a category perspective, drugstores are going to continue to close stores. It's a very low percentage of what we do. It's about 80 basis points. We cut our office supply exposure in half. They're going to close stores. We leased a number of those boxes to off-price uses over the last few quarters at significant spreads. So even within those categories that may be considered on a quote-unquote watch list, we have very low exposure to. And as you think of a category like restaurants, two-thirds of our restaurant exposure is from national and regional tenants. Our top restaurants are Starbucks, Chipotle, and Darden. So we feel really good about the nature of that tenancy as well. So you take that on a whole, it's in the best position we've ever been from a credit quality perspective.

Yeah, I mean, we were at 54 basis points of total revenues within the quarter. If you just look back to the last several years, there is a little bit of seasonality on when we report that based on the collections, mainly of real estate tax bills for large cash basis tenancy. So when you're looking at the quarter, it's not always a straight trajectory that you would think. I think we've commented on that in previous years. But saying all that, I agree with everything Brian says. We're still seeing a lot of positive trends in collection, but that's where the 54 will sort of balance out at some point, all things considered.

Our next question comes from Eric Forden with BMO Capital Markets. Please proceed with your question.

Hey, thanks. Good morning, everyone. I appreciate the comments around the positive foot traffic seen to start the year, but I was just curious if you could update us on tenant OCRs, you know, and are there any parts of the tenant base where OCRs are improving or deteriorating? Thank you.

Yeah, just from an occupancy cost perspective, tenant sales remain very healthy. You saw that come through in the percentage rent line item this quarter. We've actually seen some wins on the audit front as well. So A lot of our tenants that pay percentage rent, whether that's grocers, whether that's restaurants, we continue to see those numbers stick, and they're elevated a bit this year. Across the board, as we look at occupancy costs and we're assessing those from a renewal perspective, we have renewals at record rates for the portfolio at 21%. Retailers aren't paying that. Operators aren't paying that unless their stores are profitable. So we're seeing positivity there really across the board. And as we talked about in our remarks, this still is the most profitable way to deliver goods to the consumer. And retailers are getting smarter about how they are stocking their stores and the inventory levels within those stores that will ultimately make those more productive. So, from an occupancy cost perspective and from just an overall sales trend perspective, we're encouraged by what we see.

Our next question comes from Floris Van Digium with Leidenberg Thelman. Please proceed with your question.

Hey, thanks, guys. You had really strong ABR growth again this quarter. I think – could you maybe talk a little bit about the differential in ABR between renovated portfolios and non-renovated portfolios and where the future upside potentially could come from in terms of ABR growth?

Yeah, Flores, it's fairly broad-based in terms of what we've been seeing both in assets where we've reinvested. Obviously, in projects where we've been able to bring grocers in, where we've been able to significantly change out what was there previously, you're going to see a higher upside. In terms of the specific percentage, I mean, we can get back to you on that, but I would just say kind of We're now three years running of renewal growth in the mid-teens. We just hit a high for the portfolio. We've taken rents from $1,250 to over $19. We're signing those leases today in the mid-20s. Our anchor rents over the last year were a record at over $17. And we've got leases expiring that we control over the next year at $10. And we've been doing that more efficiently with less capital. So I think it's tough to say because we can point the box opportunities where they've been straight backfills where we've doubled, tripled the rent. And we can also point to things where we've made reinvestments where we're continuing to see the benefit of that. You look at a reinvestment project. like Newtown and suburban Philadelphia, which we stabilized several years ago, we're still achieving the highest rents that we ever have in that center, and that wasn't part of our initial underwriting. So I do think it's tough to kind of differentiate between the two, and we can get back to you if we have some specific numbers on it, but I would say it's been fairly broad-based in terms of the upside that we've had for the portfolio.

Yeah, and I think, and Brian hit on the key point with Newtown, but it's also the amount of properties we've touched at this point, right? There's just a wider range that you've touched getting that growth, right? So you're getting that flywheel effect across a larger percentage of the portfolio. It's about 25% higher in in-place rents based on the assets that we've redeveloped versus the in-place portfolio.

Thanks, Steve.

Appreciate that. Yep. Thanks, Floris.

As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Hang Zeng with JP Morgan. Please proceed with your question.

Yeah, hi. I guess as it relates to the expected box move outs this quarter, could you provide any color on just do you have tenants lined up, what the expected downtime is, anything on just the expected rent spread on releasing?

Yeah, and again, this is why I said it could be modest in terms of what we're seeing. We do have leases out on several of those spaces, a few of them. We are putting grocers in at significantly higher spreads. I just point to the fact that overall our in-place anchor rents are in the low double digits. We've been signing them at records for the portfolio. This is the tightest box supply environment. across the country. It's among the tightest box environments that we've ever had with additional occupancy upside. So it's just the nature of when we get those leases signed, but we're very pleased with the activity on them, the tenants that we're negotiating with, and the rents we're going to be able to achieve as well.

Thank you. You got it. Thanks.

We have reached the end of our question and answer session, which There are no further questions at this time. I would now like to turn the floor back over to Stacey Slater for closing comments.

Thanks, everyone. We'll catch up with you guys soon.

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