Phillips Edison & Company Delivers Strong Q1 2025 Results, Affirms Guidance Amid Market Uncertainty
Phillips Edison & Company recently reported its first quarter 2025 earnings, delivering a strong performance amidst an ever-changing macroeconomic environment.
The company's same-center Net Operating Income (NOI) increased by 3.9%, highlighting the continued resilience of its grocery-anchored portfolio. Chairman and Chief Executive Officer Jeff Edison attributed this success to the hard work of PECO associates, who have maintained the company's unique competitive advantages and driven value at the property level.
Despite concerns over tariffs, Phillips Edison & Company remains optimistic about the future. Retailer demand across its portfolio remains strong, with no current signs of slowing. The leasing team has successfully converted this demand into significantly higher rents, with retailers seeking to be located in centers where top grocers drive consistent and recurring foot traffic.
71% of the company's Annual Basis Rent (ABR) comes from necessity-based goods and services, including grocery, restaurants, and health and beauty. Given its diversified neighbor mix and limited exposure to big-box bankruptcies and at-risk retailers, Phillips Edison & Company believes it is relatively more insulated from potential tariff disruption.
The company has a proven track record of delivering strong cash flows during periods of economic uncertainty. History tells us that grocery-anchored and necessity-based formats have been relative outperformers during such times. With its demonstrated ability to deliver solid long-term growth and create value for shareholders, Phillips Edison & Company remains confident in its ability to navigate the current market environment.
Phillips Edison & Company also reported a significant investment in its pipeline, with $146 million in assets purchased during the first quarter. The company is targeting an unlevered Internal Rate of Return (IRR) of 9% for its acquisitions and remains confident in its ability to acquire high-quality centers at attractive returns.
Given these strong results and outlook, Phillips Edison & Company has affirmed its full-year guidance range of $350 million to $450 million in gross acquisitions. With its capabilities and leverage capacity, the company is well-positioned to pivot if the transaction market were to tighten or take advantage of opportunities as they arise.
The PECO team remains focused on delivering long-term value for shareholders, leveraging the stability of their cash flows and solid growth prospects. As Jeff Edison emphasized, an investment in Phillips Edison & Company provides a favorable balance of quality cash flows, mitigation of downside risk, and strong internal and external growth, making it an attractive option for investors seeking to navigate the current market environment."
