Phillips Edison & Company, Inc.
For the period ended Jun 30, 2025. Filed Jul 25, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 25, 2025
PECO$40.56-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-25.
0001476204-25-000065
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-25.
0001476204-25-000092
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 150 previous paragraphs and 184 current paragraphs.
114 unchanged; 30 reworded; 33 added; 6 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 34 previous and 41 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
2025 SENIOR NOTE ISSUANCES—In June 2025, we issued $350 million of 5.250% senior notes due 2032 at an issue price of 99.832% in an underwritten offering.
Current report
The 2025 senior note issuances are fully and unconditionally guaranteed by us.
Current report
Rental Income increased $15.2 million primarily as follows:
Current report
•$11.4 million increase primarily related to our net acquisition activity.
Current report
Fees and Management Income:
Current report
•The $0.8 million increase in fees and management income was primarily due to higher insurance premium income from our captive insurance company and an increase in fees from our unconsolidated joint ventures.
Current report
Property Operating Expenses increased $1.9 million primarily as follows:
Current report
•$1.6 million increase primarily due to our net acquisition activity.
Current report
General and Administrative Expenses:
Current report
•The $1.8 million increase in general and administrative expenses is primarily due to our growth initiatives resulting in increased compensation expense, owing largely to increased headcount, higher performance-based compensation, and increased overhead attributed to travel expenses and technology-related costs.
Current report
Depreciation and Amortization Expenses:
Current report
•The $10.0 million increase in depreciation and amortization was primarily due to our net acquisition activity and the impact of our tear down and redevelopment of certain Publix locations.
Current report
SUMMARY OF OPERATING ACTIVITIES FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Current report
Rental Income increased $31.3 million as follows:
Current report
•$11.7 million increase related to our same-center portfolio primarily as follows:
Current report
▪$7.1 million increase primarily due to a $0.44 increase in average minimum rent PSF, partially offset by a 0.2% decline in average occupancy;
Current report
•$19.6 million increase primarily related to our net acquisition activity.
Current report
Fees and Management Income:
Current report
•The $1.0 million increase in fees and management income was primarily due to higher insurance premium income and an increase in fees from our unconsolidated joint ventures.
Current report
Property Operating Expenses increased $5.3 million primarily as follows:
Current report
•$2.8 million increase primarily due to our net acquisition activity.
Current report
Real Estate Tax Expenses:
Current report
•The $4.0 million increase in real estate tax expenses was primarily due to our net acquisition activity.
Current report
General and Administrative Expenses:
Current report
•The $2.1 million increase in general and administrative expenses is primarily due to our growth initiatives resulting in increased compensation expense owing largely to higher performance-based compensation and increased headcount; partially offset by lower third-party consultant costs.
Current report
Depreciation and Amortization Expenses:
Current report
•The $15.1 million increase in depreciation and amortization was primarily due to our net acquisition activity and the impact of our tear down and redevelopment of certain Publix locations.
Current report
Interest Expense, Net:
Current report
Other Expense, Net:
Current report
(2)Excludes exercise of options.
Current report
In June 2025, we issued $350 million of 5.250% senior notes due 2032 at an issue price of 99.832% in an underwritten offering.
Current report
The 2025 senior note issuance is fully and unconditionally guaranteed by us.
Current report
•Investment in marketable securities—During the six months ended June 30, 2025, we invested $6.0 million in marketable securities through our captive insurance company.
Removed paragraphs (6)
Previous report
(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.
Previous report
Rental Income increased $16.1 million primarily as follows:
Previous report
•$8.2 million increase primarily related to our net acquisition activity.
Previous report
Property Operating Expenses increased $3.4 million primarily as follows:
Previous report
•$1.2 million increase primarily due to our net acquisition activity.
Previous report
(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.
Reworded paragraphs (30)
Previous wording
As of March 31, 2025, we owned equity interests in 321 shopping centers, including 298 wholly-owned shopping centers and 23 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 36.0 million square feet in 31 states. In addition to managing our shopping centers, our third-party investment management business provides comprehensive real estate management services to the Managed Funds.
Current wording
As of June 30, 2025, we owned equity interests in 327 shopping centers, including 303 wholly-owned shopping centers and 24 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 36.6 million square feet in 31 states. In addition to managing our shopping centers, our third-party investment management business provides comprehensive real estate management services to the Managed Funds.
Previous wording
NECESSITY-BASED GOODS AND SERVICES—We define “necessity-based goods and services” as goods and services that are indispensable, necessary, or common for day-to-day living, or that tend to be inelastic (i.e., those for which the demand does not change based on a consumer’s income level). We estimate that approximately 71% of our ABR, including the pro rata portion attributable to properties owned through our unconsolidated joint ventures, is generated from Neighbors providing necessity-based goods and services.
Current wording
NECESSITY-BASED GOODS AND SERVICES—We define “necessity-based goods and services” as goods and services that are indispensable, necessary, or common for day-to-day living, or that tend to be inelastic (i.e., those for which the demand does not change based on a consumer’s income level). We estimate that approximately 70% of our ABR, including the pro rata portion attributable to properties owned through our unconsolidated joint ventures, is generated from Neighbors providing necessity-based goods and services.
Previous wording
Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities. We define our same-center portfolio as the 280 properties that were owned and operational prior to January 1, 2024. We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing primarily to real estate asset activity occurring after December 31, 2023, which includes one property disposed of and 18 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended March 31, 2025 and 2024:
Current wording
Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities. We define our same-center portfolio as the 280 properties that were owned and operational prior to January 1, 2024. We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing primarily to real estate asset activity occurring after December 31, 2023, which includes one property disposed of and 23 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended June 30, 2025 and 2024:
Previous wording
•$7.8 million increase primarily related to our same-center portfolio as follows:
Current wording
•$3.8 million increase primarily related to our same-center portfolio as follows:
Previous wording
▪$4.3 million increase primarily due to a $0.43 increase in average minimum rent PSF;
Current wording
▪$2.9 million increase primarily due to a $0.43 increase in average minimum rent PSF, partially offset by a 0.2% decline in average occupancy; and
Previous wording
▪$0.7 million increase primarily due to a decrease in amounts reserved for Neighbors identified as credit risks.
Current wording
▪$0.6 million decrease primarily due to an increase in amounts reserved for Neighbors identified as credit risks.
Previous wording
•The $2.2 million increase in real estate tax expenses is primarily due to our net acquisition activity.
Current wording
•The $1.8 million increase in real estate tax expenses is primarily due to our net acquisition activity.
Previous wording
•The $2.3 million increase was primarily due to increased debt outstanding in 2025. Interest Expense, Net was comprised of the following (dollars in thousands):
Current wording
•The $4.1 million increase was primarily due to increased debt outstanding in 2025. Interest Expense, Net was comprised of the following (dollars in thousands):
Previous wording
▪$1.1 million increase primarily due to an increase in recoverable income attributed to an increase in real estate taxes and common area maintenance spending; and
Current wording
▪$2.9 million increase primarily due to an increase in recoverable income attributed to an increase in common area maintenance spending and real estate taxes; and
Previous wording
▪$1.5 million increase primarily due to lease buyout income;
Current wording
▪$1.4 million increase primarily due to lease buyout income.
Previous wording
•$2.2 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation and insurance costs and an increase in common area maintenance spending; and
Current wording
•$2.5 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs; and
Previous wording
SAME-CENTER NOI—Same-Center NOI is presented as a supplemental measure of our performance, as it highlights operating trends such as occupancy levels, rental rates, and operating costs for our same-center portfolio. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our Same-Center NOI may not be comparable to other REITs. For the three months ended March 31, 2025 and 2024, Same-Center NOI represents the NOI for the 280 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.
Current wording
SAME-CENTER NOI—Same-Center NOI is presented as a supplemental measure of our performance, as it highlights operating trends such as occupancy levels, rental rates, and operating costs for our same-center portfolio. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our Same-Center NOI may not be comparable to other REITs. For the three and six months ended June 30, 2025 and 2024, Same-Center NOI represents the NOI for the 280 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.
Previous wording
ATM Program—In February 2022, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, allowing up to $250 million in offerings. During the three months ended March 31, 2024, prior to the entry into the new program described below, we issued approximately 46,000 shares of our common stock
Current wording
ATM Program—In February 2022, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, allowing up to $250 million in offerings. During the six months ended June 30, 2024, prior to the entry into the new program described below, we issued approximately 46,000 shares of our common stock
Previous wording
In February 2024, we entered into a new sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, which replaced the previous agreement. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $250 million from time to time through our sales agents, or, if applicable, as forward sellers. We issued no shares of our common stock under this ATM program during the three months ended March 31, 2025 and 2024. As of March 31, 2025, approximately $177 million of common stock remained available for issuance under the current ATM program.
Current wording
In February 2024, we entered into a new sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, which replaced the previous agreement. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $250 million from time to time through our sales agents, or, if applicable, as forward sellers. We issued no shares of our common stock under this ATM program during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, approximately $177 million of common stock remained available for issuance under the current ATM program.
Previous wording
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.4 million and 138.2 million diluted shares as of March 31, 2025 and December 31, 2024, respectively, and the closing market price per share of $36.49 and $37.46 as of March 31, 2025 and December 31, 2024, respectively.
Current wording
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.4 million and 138.2 million diluted shares as of June 30, 2025 and December 31, 2024, respectively, and the closing market price per share of $35.03 and $37.46 as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
During the three months ended March 31, 2025 and 2024, we had gross capital spend of $26.4 million and $12.9 million, respectively. Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis (in thousands):
Current wording
During the six months ended June 30, 2025 and 2024, we had gross capital spend of $59.4 million and $30.9 million, respectively. Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis (in thousands):
Previous wording
(2)Amounts reported are net of insurance proceeds of $0.1 million and $1.9 million for property damage claims for the three months ended March 31, 2025 and 2024, respectively.
Current wording
(2)Amounts reported are net of insurance proceeds of $0.1 million and $2.8 million for property damage claims for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
Generally, we expect our development and redevelopment projects to stabilize within 24 months. Our underwritten incremental unlevered yields on development and redevelopment projects are expected to range between 9%-12%. Our current in process projects represent an estimated total investment of $46.9 million. Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its actual incremental annual NOI at stabilization. See “Key Performance Indicators and Defined Terms” above for further information.
Current wording
Generally, we expect our development and redevelopment projects to stabilize within 24 months. Our underwritten incremental unlevered yields on development and redevelopment projects are expected to range between 9%-12%. Our current in process projects represent an estimated total investment of $65.0 million. Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its actual incremental annual NOI at stabilization. See “Key Performance Indicators and Defined Terms” above for further information.
Previous wording
(2)During the three months ended March 31, 2024, we acquired an outparcel adjacent to a property that is owned by our unconsolidated joint venture, GRP I. Therefore, the outparcel was an addition to our total property count.
Current wording
(2)During the six months ended June 30, 2024, we acquired an outparcel adjacent to a property that is owned by our unconsolidated joint venture, GRP I. Therefore, the outparcel was an addition to our total property count.
Previous wording
REAL ESTATE DISPOSITION ACTIVITY—We continually evaluate our portfolio of assets for opportunities to make strategic dispositions of assets that no longer meet our growth and investment objectives or assets that have stabilized in order to capture their value. The following table summarizes our real estate disposition activity for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
REAL ESTATE DISPOSITION ACTIVITY—We continually evaluate our portfolio of assets for opportunities to make strategic dispositions of assets that no longer meet our growth and investment objectives or assets that have stabilized in order to capture their value. The following table summarizes our real estate disposition activity for the six months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
(2)We sold no properties during the three months ended March 31, 2024, but we recognized a minimal loss on disposal of property due to miscellaneous write-off activity and expenses related to previous and future potential dispositions.
Current wording
(2)We sold no properties during the six months ended June 30, 2024, but we recognized a minimal loss on disposal of property due to miscellaneous write-off activity and expenses related to previous and future potential dispositions.
Previous wording
(3)During the three months ended March 31, 2025, we sold one property for $24.9 million. We provided secured financing for this property sale, receiving a note receivable of $17.4 million.
Current wording
(3)During the six months ended June 30, 2025, we sold one property for $24.9 million. We provided secured financing for this property sale, receiving a note receivable of $17.4 million.
Previous wording
CASH FLOW ACTIVITIES—As of March 31, 2025, we had cash and cash equivalents and restricted cash of $7.9 million, a net cash decrease of $0.8 million during the three months ended March 31, 2025.
Current wording
CASH FLOW ACTIVITIES—As of June 30, 2025, we had cash and cash equivalents and restricted cash of $9.2 million, a net cash increase of $0.5 million during the six months ended June 30, 2025.
Previous wording
•Property operations—Most of our operating cash comes from rental and tenant recovery income received less property operating expenses, real estate taxes, and general and administrative costs paid. Property operations during the three months ended March 31, 2025 were positively impacted by a $4.4 million, or 3.9%, improvement in Same-Center NOI as compared to the same period in 2024. During the three months ended March 31, 2025, we had a net cash outlay of $27.7 million from changes in working capital as compared to a net cash outlay of $16.2 million during the same period in 2024. This change was primarily driven by the timing of interest payments resulting from our 2024 senior notes issued subsequent to March 31, 2024.
Current wording
•Property operations—Most of our operating cash comes from rental and tenant recovery income received less property operating expenses, real estate taxes, and general and administrative costs paid. Property operations during the six months ended June 30, 2025 were positively impacted by a $9.0 million, or 4.1%, improvement in Same-Center NOI as compared to the same period in 2024.
Previous wording
•Real estate acquisitions—During the three months ended March 31, 2025, our acquisitions resulted in a total cash outlay of $139.1 million, as compared to a total cash outlay of $56.2 million during the same period in 2024.
Current wording
•Real estate acquisitions—During the six months ended June 30, 2025, our acquisitions resulted in a total cash outlay of $268.1 million, as compared to a total cash outlay of $116.2 million during the same period in 2024.
Previous wording
•Capital expenditures—We invest capital into leasing our properties and maintaining or improving the condition of our properties. During the three months ended March 31, 2025, we paid $26.4 million for capital expenditures, an increase of $13.4 million over the same period in 2024.
Current wording
•Capital expenditures—We invest capital into leasing our properties and maintaining or improving the condition of our properties. During the six months ended June 30, 2025, we paid $59.4 million for capital expenditures, an increase of $28.5 million over the same period in 2024.
Previous wording
•Real estate dispositions—During the three months ended March 31, 2025, we sold one property resulting in a net cash inflow of $6.5 million. During the three months ended March 31, 2024, we sold no properties, but we had minimal net cash outflows for expenses related to previous and future potential dispositions.
Current wording
•Real estate dispositions—During the six months ended June 30, 2025, we sold one property resulting in a net cash inflow of $6.4 million. During the six months ended June 30, 2024, we sold no properties, but we had minimal net cash outflows for expenses related to previous and future potential dispositions.
Previous wording
•Investment in unconsolidated joint ventures—During the three months ended March 31, 2025, we invested $3.5 million in our investments in NRV and NGCF.
Current wording
•Investment in unconsolidated joint ventures—During the six months ended June 30, 2025, we invested $3.6 million in our investments in NRV and NGCF.
Previous wording
•Debt borrowings and payments—During the three months ended March 31, 2025, we had $159.6 million in net borrowings primarily as a result of our net borrowings under our revolving credit facility and payments on our mortgage loans. During the three months ended March 31, 2024, we had $45.0 million in net borrowings of debt primarily as a result of our net borrowings under our revolving credit facility.
Current wording
•Debt borrowings and payments—During the six months ended June 30, 2025, we had $273.1 million in net borrowings primarily as a result of our 2025 bond offering, payments on our mortgage loans, and net repayments under our revolving credit facility. During the six months ended June 30, 2024, we had $70.7 million in net borrowings of debt primarily as a result of our May 2024 bond offering, net repayments under our revolving credit facility, and our partial pay down of an outstanding term loan.
Previous wording
•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders increased $17.1 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to the timing of the funding of our December 2024 distribution payment in January 2025 combined with an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution rate increase.
Current wording
•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders increased $33.1 million for the six months ended June 30, 2025 as compared to the same period in 2024, primarily due to the timing of the funding of our December 2024 and June 2024 distribution payments combined with an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution rate increase.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
▪$1.8 million increase primarily due to an increase in recoverable income attributed to an increase in common area maintenance spending and real estate taxes; partially offset by
Current report — wording carried from elsewhere
•$0.2 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs partially offset by lower insurance costs; and
Current report — wording carried from elsewhere
For details surrounding our basis for analyzing significant fluctuations in our results of operations as well as definitions related to our portfolio of real estate assets, please see “Summary of Operating Activities for the Three Months Ended June 30, 2025 and 2024” above. Below are explanations of the significant fluctuations in the results of operations for the six months ended June 30, 2025 and 2024:
Current report — wording carried from elsewhere
•The $6.4 million increase was primarily due to increased debt outstanding in 2025. Interest Expense, Net was comprised of the following (dollars in thousands):
Current report — wording carried from elsewhere
•Other Expense, Net was comprised of the following (in thousands):
Current report — wording carried from elsewhere
Below is a summary of leasing activity for our wholly-owned properties for the six months ended June 30, 2025 and 2024(1):
Current report — wording carried from elsewhere
(1)PSF amounts may not recalculate exactly based on other amounts presented within the table due to rounding.