Release Date: July 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brixmor Property Group Inc BRX reported a strong quarter with 5.8% same property NOI growth and $0.58 per share of FFO.
- The company achieved record small shop occupancy and a record signed but not yet commenced pipeline, indicating strong future growth potential.
- Leasing activity was robust, with 1.4 million square feet of new and renewal leases executed at a blended cash spread of 19%.
- Brixmor Property Group Inc (BRX) increased its 2026 expectations for both same property NOI growth and FFO, reflecting confidence in its operating platform.
- The company completed strategic acquisitions totaling $164 million, including high-quality, grocery-anchored assets, enhancing its portfolio and growth prospects.
Negative Points
- Total leased occupancy decreased by 30 basis points sequentially due to proactive move-outs and recaptures, although this was anticipated.
- The company experienced a $3 million charge in straight-line reversals due to tenant bankruptcies, impacting FFO growth.
- Despite strong same property NOI growth, the updated FFO guidance did not reflect a corresponding increase, partly due to non-cash rental income adjustments.
- The acquisition environment remains competitive, with significant private capital interest in open-air retail, potentially impacting future acquisition opportunities.
- The company faces challenges in maintaining occupancy levels due to proactive recaptures and redevelopment activities, which could affect near-term earnings.
Q & A Highlights
Q: Occupancy was down sequentially in the second quarter. Was the decline in line with expectations, and what is the outlook for occupancy recovery?
A: Brian Finnegan, CEO, confirmed the decline was expected due to proactive move-outs at redevelopment assets. The company anticipates occupancy growth in the back half of the year, with strong leasing activity already underway for recaptured spaces.
Q: Why isn't the strong same property NOI growth translating into better FFO growth in the updated guidance?
A: Steven Gallagher, CFO, explained that the disconnect is due to a $3 million charge related to straight-line reversals from tenant bankruptcies. The underlying portfolio performance remains strong, and the company is focused on ensuring top-line growth translates to FFO growth.
Q: Can you provide details on the acquisitions made during the quarter and the current acquisition environment?
A: Mark Horgan, CIO, stated that acquisitions were made at a blended cap rate of low 6%, with significant redevelopment opportunities. The acquisition pipeline remains strong, driven by long-term relationship building, and the company is not directly competing with capital focused on core-like assets.
Q: How should we think about the reinvestment pipeline and potential returns as rents climb and supply remains limited?
A: Brian Finnegan, CEO, indicated a consistent movement from the future pipeline to the active pipeline, with expected high-single to low-double-digit returns. The company plans to maintain a steady cadence of reinvestment projects, supported by external opportunities to refuel the pipeline.
Q: What is the outlook for rent spreads given the low rent basis and recent trends?
A: Brian Finnegan, CEO, highlighted that despite rising ABR, new leases are being signed at significantly higher rates, with new lease growth over 30% and renewal growth in the mid-teens. The company continues to see strong rent growth potential across the portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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