Phillips Edison & Company Delivers Strong Q2 2026 Performance, Sets Stage for Compelling Future Growth
Phillips Edison & Company (PECO) has reported an impressive second quarter 2026 performance, driven by high demand for spaces in its grocery-anchored shopping centers and the company's ability to capture that demand with occupancy gains, great rent spreads, and superior operations.
According to Chairman and CEO Jeff Edison, PECO's team delivered NAREIT FFO per share growth of 8.1%, Core FFO per share growth of 7.8%, and same center NOI growth of 3.8% during the quarter. This strong performance is a testament to the company's disciplined approach to investing in long-term growth, while maintaining a strong balance sheet.
The company's grocery-anchored shopping centers continue to benefit from consumer demand for necessity-based destinations. Traffic resiliency across PECO's portfolio remains consistent, with centers generating 2% year-over-year traffic growth in June and 2% traffic growth year-to-date. This trend is reinforced by the increasing popularity of value-driven consumers making frequent trips to grocery-anchored centers.
The acquisition of Giant Eagle by Kroger further underscores the value large grocers place on growing market share and expanding their brick-and-mortar footprint in attractive markets. As PECO's largest landlord and longtime partner to both companies, this development is viewed as a positive indicator for the long-term strength of the grocery-anchored shopping center sector.
In addition to its strong operating fundamentals, PECO has also continued to strengthen its capital position by raising $92 million of equity to invest accretively in long-term earnings growth. The company's disciplined approach to investing is evident in its decision-making process, where every capital decision begins with a simple question: Where can today's dollar create the highest return opportunities?
PECO's guidance for gross acquisitions has been increased to a range of $500 million-$600 million for the full year, reflecting the company's confidence in its ability to create value through accretive investments. The company continues to target unlevered IRRs of 9% for its grocery-anchored centers and 10% for everyday retail centers.
As PECO looks ahead to the second half of 2026 and into 2027, it is well-positioned to deliver a compelling combination for its investors: more alpha with less beta. The company's strong balance sheet, combined with its disciplined investment approach and focus on creating value through accretive investments, positions PECO for long-term success in the grocery-anchored shopping center sector.
