Phillips Edison & Company Delivers Market-Leading Operating Results in 2024
Phillips Edison & Company (PECO) recently reported its market-leading operating results for 2024, with solid core FFO per share growth of nearly 4% despite significant interest expense headwinds.
The company's Chairman and Chief Executive Officer, Jeff Edison, attributed the success to the dedication and hard work of PECO associates, who have maintained a unique competitive advantage in the shopping center space. This is evident in their high occupancy rates, strong rent spreads, and leasing pipeline.
PECO's portfolio has remained resilient during times of economic downturn, with a growth tanker portfolio that has performed well following both the 2008 global financial crisis and the 2020 COVID-induced downturn. The company's focused strategy of owning neighborhood shopping centers anchored by top grocers has proven effective in driving consistent daily foot traffic to their centers.
A significant portion (approximately 70%) of PECO's annualized base rent comes from necessity-based goods and services, with a strong presence of small store shops. This unique format allows for better long-term FFO and AFFO per share growth, while also providing a diversified neighbor mix and limited exposure to big box bankruptcies.
PECO's transaction market also improved in 2024, allowing the company to exceed its original guidance for acquisitions. The company's ability to identify quality in their markets with better initial yields and higher growth opportunities is a unique advantage that sets them apart from competitors.
In a statement, Jeff Edison emphasized PECO's commitment to delivering strong cash flow growth, citing the company's cycle-tested performance over more than 30 years. He also highlighted the importance of quality in their cash flows, which is reflected in their market-leading operating metrics and high-quality portfolio acquisition by acquisition.
PECO continues to be strategic in its decision-making, focusing on accretive growth that stays true to their core strategy and creates long-term value for shareholders. As the company moves forward, it remains committed to taking advantage of opportunities for growth both internally and externally, with a strong emphasis on maintaining quality in their cash flows.
