Phillips Edison & Co Inc (PECO, Financial), one of the nation's largest owners and operators of grocery-anchored neighborhood shopping centers, released its financial and operating results for the period ended September 30, 2023, on October 31, 2023. The company also provided updated full year 2023 earnings guidance.
Financial Performance
For the three and nine months ended September 30, 2023, PECO reported a net income attributable to stockholders of $12.2 million, or $0.10 per diluted share, and $43.3 million, or $0.37 per diluted share, respectively. The company reported Nareit FFO of $72.5 million, or $0.55 per diluted share, and Core FFO of $77.0 million, or $0.58 per diluted share for Q3 2023.
Updated Guidance
PECO updated its 2023 Nareit FFO and Core FFO guidance to a range of $2.23 to $2.27 per diluted share and $2.31 to $2.35 per diluted share, respectively. The midpoint of 2023 Core FFO guidance represents a 2.6% year-over-year growth.
Operational Highlights
PECO increased its same-center NOI year-over-year by 3.2% and leased portfolio occupancy by 70 basis points year-over-year to 97.8%. The company executed comparable renewal leases during the quarter at a rent spread of 16.9% and comparable new leases at a rent spread of 26.3%.
Acquisitions and Balance Sheet
PECO acquired one grocery-anchored neighborhood shopping center and one land parcel for a total of $13.4 million. The company generated net proceeds of $70.1 million through the issuance of 2.0 million common shares at a gross weighted average price of $35.59 per common share through its ATM program. As of September 30, 2023, PECO had $713.8 million of total liquidity.
Management Commentary
“The PECO team delivered another solid quarter of growth with same-center NOI increasing by 3.2% and continued strength in occupancy and rent spreads. The continued strength of our operating performance is attributed to our differentiated and focused strategy of exclusively owning grocery-anchored neighborhood shopping centers and our ability to drive results at the property level through our integrated and cycle-tested operating platform, as evidenced by our Neighbor retention rate of 93% during the third quarter. Based on the current pipeline of assets that we expect to acquire during the fourth quarter of 2023, we are confident in our ability to close on $250 to $300 million in net acquisitions this year. We continue to see a resilient consumer and strong retailer demand, and we believe we will end the year with positive earnings growth despite interest expense headwinds.” - Jeff Edison, Chairman and Chief Executive Officer of PECO
Explore the complete 8-K earnings release (here) from Phillips Edison & Co Inc for further details.
