Brixmor Property Group Inc. Hits Stride with Record Lease Activity and Robust Tenant Demand
Brixmor Property Group Inc. recently reported a strong fourth quarter, with the company's team delivering impressive results across various facets of their value-add plan. In a recent conference call, CEO Jim Taylor highlighted the performance of Brixmor's team, stating that they had 'delivered strong growth in both NOI and bottom line FFO of 5%.'
One key area of focus for Brixmor was leasing, where regional and national teams partnered to sign over $118 million of new and renewal lease ABR during the year. This includes a significant $32 million in fourth-quarter activity, demonstrating robust tenant demand and momentum in the company's portfolio transformation.
The company also drove compelling spreads and rates, commenced a record level of new ABR, and achieved a record for average in-place rent that remains well below where they're signing new deals. Furthermore, Brixmor out-indexed their share of tenant store openings and brought several new vibrant concepts into the portfolio, which further drove growth in traffic year-over-year.
According to Placer AI, Brixmor was ranked at the top end of its peer group in terms of year-over-year traffic growth. The company also substantially increased new business with tenants in the grocery segment, including Sprouts, Whole Foods, Trader Joe's, Publix and ALDI, creating huge value as they bring these vibrant retailers into their centers.
With this activity, a record 81% of Brixmor's ABR is derived from grocery-anchored centers with average productivity of over $700 a foot. Additionally, the company saw the flywheel effect of this productive anchor leasing, with small shop occupancy and rate both at record levels.
Brixmor's redevelopment and construction teams continue to execute at the very highest level, delivering $205 million of reinvestment at an average incremental return of 9% during the year. The company also grew their in-process pipeline to nearly $400 million at an average incremental return of 10%, setting them up for several more years of transformative value creation.
The investments team successfully harvested $212 million of dispositions completed advantageously across 14 distinct transactions, while staying disciplined and reviewing over $1 billion of opportunities. Brixmor also completed over $290 million of value-add acquisitions of assets that have long been on their target list, including in Hartford, Tampa, Raleigh, Boston, Ann Arbor, Hilton Head and Long Island.
From a balance sheet perspective, liquidity and free cash flow remain more than ample capacity to fund Brixmor's value-added plan. The company has much to be excited about as they look forward to '25 and beyond.
