Phillips Edison & Company, Inc.
For the period ended Jun 30, 2026. Filed Jul 24, 2026.
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, 2026 · Filed Jul 24, 2026
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 2026-03-31; filed 2026-04-24.
0001476204-26-000024
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-24.
0001476204-26-000032
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 151 previous paragraphs and 187 current paragraphs.
116 unchanged; 30 reworded; 32 added; 5 removed; 0 previous and 9 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 (32)
Current report
(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.
Current report
Rental Income increased $11.0 million primarily as follows:
Current report
▪$1.2 million increase primarily due to the impact of straight-line rent adjustments;
Current report
•$4.2 million increase primarily related to our net acquisition activity.
Current report
Property Operating Expenses increased $2.8 million primarily as follows:
Current report
•$0.9 million increase primarily due to our net acquisition activity.
Current report
Depreciation and Amortization Expenses:
Current report
•The $4.4 million decrease in depreciation and amortization was primarily due to the prior year impact of our tear down and redevelopment of certain Publix locations, partially offset by our net acquisition activity.
Current report
Gain (Loss) on Disposal of Property, Net:
Current report
•The $19.5 million increase in gain (loss) on disposal of property, net was due to the disposition of two properties and one parcel of land with a net gain of $19.4 million during the three months ended June 30, 2026. During the same period in 2025, we sold no properties but we recognized a minimal loss on disposal of property of $0.1 million due to miscellaneous write-off activity and expenses related to previous and future potential dispositions.
Current report
Other Income (Expense), Net:
Current report
SUMMARY OF OPERATING ACTIVITIES FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
Current report
(1)Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.
Current report
Rental Income increased $23.1 million as follows:
Current report
•$13.2 million increase related to our same-center portfolio primarily as follows:
Current report
▪$0.9 million increase primarily due to the impact of straight-line rent adjustments;
Current report
▪$0.8 million increase primarily due to a decrease in amounts reserved for Neighbors identified as credit risks; and
Current report
•$9.9 million increase primarily related to our net acquisition activity.
Current report
Fees and Management Income:
Current report
•The $1.4 million increase in fees and management income was primarily due to an increase in fees from the growth in our unconsolidated joint ventures.
Current report
Property Operating Expenses increased $5.8 million primarily as follows:
Current report
Real Estate Tax Expenses:
Current report
•The $2.2 million increase in real estate tax expenses was primarily due to our net acquisition activity and higher real estate tax assessments on the value of our portfolio.
Current report
Depreciation and Amortization Expenses:
Current report
•The $4.1 million decrease in depreciation and amortization was primarily due to the prior year impact of our tear down and redevelopment of certain Publix locations, partially offset by our net acquisition activity.
Current report
Interest Expense, Net:
Current report
Gain on Disposal of Property, Net:
Current report
•The $20.7 million increase in gain on disposal of property, net was due to the disposition of four properties and one parcel of land with a net gain of $26.2 million during the six months ended June 30, 2026, as compared to the disposition of one property with a net gain of $5.5 million during the same period in 2025.
Current report
(2)Excludes exercise of options.
Current report
Subsequent to June 30, 2026, we issued approximately 0.2 million additional shares of our common stock at a gross weighted average price of $42.20 per share under the ATM program for net proceeds of $6.4 million, after approximately $0.1 million in commissions.
Current report
•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, 2026, we paid $50.5 million for capital expenditures, a decrease of $8.9 million over the same period in 2025.
Current report
•Issuance of common stock—During the six months ended June 30, 2026, we issued 2.0 million shares of our common stock under the ATM program for net proceeds of $83.1 million, as compared to no shares issued during the same period in 2025.
Removed paragraphs (5)
Previous report
Rental Income increased $12.1 million primarily as follows:
Previous report
•$5.7 million increase primarily related to our net acquisition activity.
Previous report
Property Operating Expenses increased $3.1 million primarily as follows:
Previous report
•$1.1 million increase primarily due to our net acquisition activity.
Previous report
Subsequent to March 31, 2026, we sold one parcel of land for $6.7 million.
Reworded paragraphs (30)
Previous wording
We are a REIT and one of the nation’s largest owners and operators of omni-channel grocery-anchored shopping centers. Our portfolio primarily consists of neighborhood centers anchored by the #1 or #2 grocer tenants by sales within their respective formats by trade area. Our Neighbors are a mix of national, regional, and local retailers that primarily provide necessity-based goods and services.
Current wording
We are a REIT and one of the nation’s largest owners and operators of grocery-anchored shopping centers. Our portfolio primarily consists of neighborhood centers anchored by the #1 or #2 grocer tenants by sales within their respective formats by trade area. Our Neighbors are a mix of national, regional, and local retailers that primarily provide necessity-based goods and services.
Previous wording
As of March 31, 2026, we owned equity interests in 326 shopping centers, including 299 wholly-owned shopping centers and 27 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 36.9 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, 2026, we owned equity interests in 330 shopping centers, including 302 wholly-owned shopping centers and 28 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 37.4 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
LEASE EXPIRATIONS—The following chart shows the aggregate scheduled lease expirations for our over 3,500 unique Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after March 31, 2026 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint ventures:
Current wording
LEASE EXPIRATIONS—The following chart shows the aggregate scheduled lease expirations for our nearly 4,000 unique Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after June 30, 2026 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint ventures:
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 282 properties that were owned for the entirety of both calendar year periods being compared. We define our non-same-center portfolio as those properties that were not fully owned in both calendar year periods being compared owing primarily to real estate asset activity occurring after December 31, 2024, which includes eleven properties disposed of and 17 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended March 31, 2026 and 2025:
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 for the entirety of both calendar year periods being compared. We define our non-same-center portfolio as those properties that were not fully owned in both calendar year periods being compared owing primarily to real estate asset activity occurring after December 31, 2024, which includes 13 properties disposed of and 22 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended June 30, 2026 and 2025:
Previous wording
•$6.4 million increase primarily related to our same-center portfolio as follows:
Current wording
•$6.8 million increase primarily related to our same-center portfolio as follows:
Previous wording
▪$3.7 million increase primarily due to a $0.52 increase in average minimum rent PSF and a 0.3% improvement in average occupancy;
Current wording
▪$4.4 million increase primarily due to a $0.56 increase in average minimum rent PSF and a 0.3% improvement in average occupancy;
Previous wording
•The $1.0 million increase in real estate tax expenses is primarily due to our net acquisition activity.
Current wording
•The $1.2 million increase in real estate tax expenses is primarily due to higher real estate tax assessments on the value of our portfolio.
Previous wording
▪$1.2 million increase primarily due to an increase in recoverable income attributed to an increase in common area maintenance spending.
Current wording
▪$2.1 million increase primarily due to an increase in recoverable income attributed to an increase in common area maintenance spending and real estate taxes;
Previous wording
▪$1.5 million increase primarily due to lease buyout income; and
Current wording
▪$1.4 million increase primarily due to lease buyout income;
Previous wording
•$2.0 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs and an increase in utilities and common area maintenance spending; and
Current wording
•$3.9 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs and an increase in common area maintenance spending and utilities; and
Previous wording
•The $4.1 million increase was primarily due to increased debt outstanding and loss on extinguishment of debt in 2026. Interest Expense, Net was comprised of the following (dollars in thousands):
Current wording
•The $5.8 million increase was primarily due to increased debt outstanding and loss on extinguishment of debt in 2026. Interest Expense, Net was comprised of the following (dollars in thousands):
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, 2026 and 2025, Same-Center NOI represents the NOI for the 282 properties that were wholly-owned for the entirety of both calendar year periods being compared.
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, 2026 and 2025, Same-Center NOI represents the NOI for the 280 properties that were wholly-owned for the entirety of both calendar year periods being compared.
Previous wording
ATM Program—In February 2024, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program. 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
Current wording
ATM Program—In February 2024, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program. 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. During the three and six months ended June 30, 2026, we issued 2.0 million shares of our
Previous wording
ended March 31, 2026 and the year ended December 31, 2025. As of March 31, 2026, approximately $177 million of common stock remained available for issuance under the ATM program.
Current wording
common stock at a gross weighted average price of $42.06 per share under this ATM program for net proceeds of $85.3 million, after approximately $0.9 million in commissions. At June 30, 2026, we had a receivable of $1.9 million for proceeds received subsequent to June 30, 2026 for shares issued during the three and six months ended June 30, 2026. We issued no shares of our common stock under this ATM program during the year ended December 31, 2025. As of June 30, 2026, approximately $91 million of common stock remained available for issuance under the ATM program.
Previous wording
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.7 million and 138.5 million diluted shares as of March 31, 2026 and December 31, 2025, respectively, and the closing market price per share of $37.42 and $35.57 as of March 31, 2026 and December 31, 2025, respectively.
Current wording
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 140.8 million and 138.5 million diluted shares as of June 30, 2026 and December 31, 2025, respectively, and the closing market price per share of $41.62 and $35.57 as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
During the three months ended March 31, 2026 and 2025, we had gross capital spend of $26.5 million and $26.4 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, 2026 and 2025, we had gross capital spend of $50.5 million and $59.4 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 for property damage claims for the three months ended March 31, 2026 and 2025.
Current wording
(2)Amounts reported are net of insurance proceeds of $0.8 million and $0.1 million for property damage claims for the six months ended June 30, 2026 and 2025, 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 $74.4 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 $82.0 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
(1)During the three months ended March 31, 2026, we acquired a property adjacent to one that was already wholly-owned. Therefore, the property was not an addition to our total property count.
Current wording
(1)During the six months ended June 30, 2026, we acquired a property adjacent to one that was already wholly-owned. Therefore, the property was not 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, 2026 and 2025 (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, 2026 and 2025 (dollars in thousands):
Previous wording
(2)During the three months ended March 31, 2025, one of our property sales included a seller financing component. We sold the property for $24.9 million and provided secured financing, receiving a note receivable of $17.4 million.
Current wording
(2)In January 2025, we sold a property for $24.9 million and provided secured financing, receiving a note receivable of $17.4 million.
Previous wording
Subsequent to March 31, 2026, we acquired three properties for $58.9 million.
Current wording
Subsequent to June 30, 2026, we sold three properties for $39.7 million.
Previous wording
CASH FLOW ACTIVITIES—As of March 31, 2026, we had cash and cash equivalents and restricted cash of $22.4 million, a net cash decrease of $21.0 million during the three months ended March 31, 2026.
Current wording
CASH FLOW ACTIVITIES—As of June 30, 2026, we had cash and cash equivalents and restricted cash of $30.0 million, a net cash decrease of $13.4 million during the six months ended June 30, 2026.
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, 2026 were positively impacted by a $4.1 million, or 3.5%, improvement in Same-Center NOI as compared to the same period in 2025. During the three months ended March 31, 2026, we had a net cash outlay of $36.4 million from changes in working capital as compared to a net cash outlay of $27.7 million during the same period in 2025. This change was primarily driven by the timing of interest payments resulting from our senior note issuances.
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, 2026 were positively impacted by an $8.6 million, or 3.7%, improvement in Same-Center NOI as compared to the same period in 2025. During the six months ended June 30, 2026, we had a net cash outlay of $9.7 million from changes in working capital as compared to a net cash outlay of $17.4 million during the same period in 2025. This change was primarily due to a prepayment from a Neighbor for a development project.
Previous wording
•Real estate acquisitions—During the three months ended March 31, 2026, our acquisitions resulted in a total cash outlay of $126.4 million, as compared to a total cash outlay of $139.1 million during the same period in 2025.
Current wording
•Real estate acquisitions—During the six months ended June 30, 2026, our acquisitions resulted in a total cash outlay of $268.4 million, as compared to a total cash outlay of $268.1 million during the same period in 2025.
Previous wording
•Real estate dispositions—During the three months ended March 31, 2026, we sold two properties resulting in a net cash inflow of $20.9 million. During the three months ended March 31, 2025, we sold one property resulting in a net cash inflow of $6.5 million.
Current wording
•Real estate dispositions—During the six months ended June 30, 2026, we sold four properties and one parcel of land resulting in a net cash inflow of $83.4 million. During the six months ended June 30, 2025, we sold one property resulting in a net cash inflow of $6.4 million.
Previous wording
•Investment in unconsolidated joint ventures—During the three months ended March 31, 2026, we invested $0.9 million in our unconsolidated joint ventures, as compared to $3.5 million during the same period in 2025.
Current wording
•Investment in unconsolidated joint ventures—During the six months ended June 30, 2026, we invested $6.1 million in our unconsolidated joint ventures, as compared to $3.6 million during the same period in 2025.
Previous wording
•Investment in marketable securities—During the three months ended March 31, 2026, we had proceeds, net of investments, of $0.8 million from marketable securities through our captive insurance company, as compared to $1.5 million of investments during the same period in 2025.
Current wording
•Investment in marketable securities—During the six months ended June 30, 2026, we had investments, net of proceeds, of $0.4 million from marketable securities through our captive insurance company, as compared to $6.0 million of investments during the same period in 2025.
Previous wording
•Debt borrowings and payments—During the three months ended March 31, 2026 and 2025, we had $111.9 million and $159.6 million, respectively, in net borrowings primarily as a result of our net acquisition activity.
Current wording
•Debt borrowings and payments—During the six months ended June 30, 2026 and 2025, we had $72.3 million and $273.1 million, respectively, in net borrowings primarily as a result of our net acquisition activity.
Previous wording
•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders increased $3.2 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to an increase in our distribution rate.
Current wording
•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders increased $5.7 million for the six months ended June 30, 2026 as compared to the same period in 2025, primarily due to an increase in our distribution rate.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
▪$0.9 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 report — wording carried from elsewhere
•$1.9 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs; and
Current report — wording carried from elsewhere
•The $1.7 million increase was primarily due to increased debt outstanding in 2026. Interest Expense, Net was comprised of the following (dollars in thousands):
Current report — wording carried from elsewhere
•Other Income (Expense), Net was comprised of the following (in thousands):
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, 2026 and 2025” above. Below are explanations of the significant fluctuations in the results of operations for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
▪$8.0 million increase primarily due to a $0.54 increase in average minimum rent PSF and a 0.3% improvement in average occupancy;
Current report — wording carried from elsewhere
•$2.0 million increase primarily due to our net acquisition activity.
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, 2026 and 2025(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.