Brixmor Property Group Q1 Earnings Call Highlights

Key Points

• Brixmor grew same-property NOI 6.4% YoY and reported Nareit FFO of $0.58 per share, and management raised 2026 guidance to same-property NOI 4.75–5.5% and FFO $2.34–2.37, citing strong grocery-anchored demand and traffic of over 220 million visits (+3.5% YoY).
• The company executed 1.3 million square feet of new and renewal leases at a blended cash spread of 27% (new 42%, renewals 21%), with total occupancy at 95.1% and small-shop occupancy at 92.1%; Brixmor expects modest Q2 occupancy headwinds from a few box recaptures but plans to backfill at higher rents.
• Brixmor stabilized $78 million of projects at a 9% average incremental return and has an active reinvestment pipeline of $302 million (10% average incremental return) plus $700 million of future opportunities, while ending the quarter with about $1.8 billion of available liquidity and a $200 million interest-rate hedge.

Brixmor Property Group NYSE: BRX reported first-quarter 2026 results that management said reflected strengthening demand for open-air, grocery-anchored retail and improving momentum across its portfolio. On the call, CEO and President Brian Finnegan said the company grew same-property net operating income (NOI) 6.4% year over year and delivered Nareit funds from operations (FFO) of $0.58 per share.

Finnegan framed the quarter against what he described as a “period of heightened uncertainty,” citing geopolitical tensions and capital markets volatility. Even so, he said the operating backdrop for Brixmor’s property type remains “exceptionally strong,” supported by low new supply and retailer demand for well-located physical stores.

Leasing spreads, occupancy, and traffic trends

Finnegan said consumer traffic at Brixmor centers exceeded 220 million visits during the quarter, up more than 3.5% year over year. He also pointed to continued leasing strength, with the company executing 1.3 million square feet of new and renewal leases at a blended cash spread of 27%.

• New lease cash spreads: 42%
• Renewal cash spreads: 21% (which Finnegan called record renewal growth)
• Total lease occupancy: 95.1% (flat sequentially, up 100 basis points year over year)
• Small shop occupancy: 92.1% (up 130 basis points year over year)

Finnegan said the tenant roster added first-in-portfolio locations with brands including Pottery Barn, Williams-Sonoma, L.L.Bean, Rowan, and Teso Life, alongside continued growth with off-price, health and wellness, and quick-service restaurant tenants.

Management acknowledged near-term noise in occupancy. Finnegan said the company expects “overall occupancy headwinds in the second quarter due to a handful of anticipated box recaptures,” but expects to return to an occupancy growth trajectory in the second half of the year. In response to questions, he characterized the impact as “modest” and said the company expects to backfill the space with “better tenants” at “much higher rents,” noting that Brixmor is “well below peak occupancy.”

Signed-but-not-commenced pipeline and commencement timing

Chief Financial Officer Steve Gallagher said Brixmor’s signed-but-not-commenced (SNO) pipeline ended the quarter at $67 million, up 10% year over year. Gallagher added that the pipeline was at a record $24 per square foot and stood $25 above in-place average base rent (ABR) per square foot. He also said the quarter ended with a 370 basis point spread between leased and built occupancy.

Gallagher said the company anticipates approximately $38 million of the signed-but-not-commenced ABR to commence “ratably throughout 2026.” However, he also cautioned that the leased-versus-built spread could remain wide as the team continues to backfill and commence rents, noting that some impactful leases in the SNO pipeline are expected to begin in 2027, including what he described as one of the company’s largest pipelines with Publix.

Reinvestment activity, redevelopment pipeline, and outparcel returns

Finnegan emphasized reinvestment as a core driver of value creation, saying the company stabilized $78 million of projects at a 9% average incremental return in the first quarter. He highlighted two projects he called transformational: the opening of Brixmor’s first large-format Target at Wynnewood Village in South Dallas, Texas, and Phase I of Block 59 in suburban Chicago. He said both were well received in their markets, with additional phases planned.

The company also commenced Phase III of its Roosevelt Mall redevelopment in Philadelphia, which Finnegan said will densify the site with operators such as Ulta, Shake Shack, and Victoria’s Secret.

Finnegan also highlighted outparcel development as an area of focus, saying Brixmor added a record six new outparcel projects at a 16% incremental return during the quarter. He said communities have become increasingly supportive of converting underutilized parking fields into retail and restaurant uses.

At quarter end, Finnegan said Brixmor’s active reinvestment pipeline totaled $302 million with a 10% average incremental return, alongside another $700 million of future pipeline opportunities, including at assets acquired over the last two years.

Transactions, capital markets, and guidance raise

On the transaction front, Finnegan said Brixmor disposed of $108 million of assets “where value had been maximized,” while making no acquisitions during the quarter. He said the company had more than $160 million of assets “under control” in high-growth markets and continues to underwrite additional opportunities.

Both Finnegan and Executive Vice President and Chief Investment Officer Mark Horgan described a competitive acquisition environment. Horgan said new capital has been coming into open-air retail and compressing cap rates “across all asset types,” with the “tightest compression” on smaller grocery-anchored and smaller unanchored deals. He said some high-profile deals have been pushed into “the high-4s in certain cases” due to “low-priced capital.” Horgan said Brixmor aims to remain disciplined and focuses on deals where it can generate long-term unlevered internal rates of return in the 9% to 10% range through rent mark-to-market and redevelopment.

Finnegan added that the company is “ahead of our underwriting” on the roughly $400 million acquired last year, which he said supports confidence as the company evaluates new opportunities.

Gallagher said the company increased its 2026 same-property NOI growth guidance to 4.75% to 5.5% and raised FFO guidance to $2.34 to $2.37 per share. He attributed the guidance increase to “strength and visibility” in the same-property NOI trajectory. He said the company expects base rent contribution to growth to accelerate as the year progresses, supported by rent commencements, and continues to expect revenues deemed uncollectible of 75 to 100 basis points of total revenues.

On the balance sheet, Gallagher said Brixmor raised $115 million of equity through its at-the-market program on a forward basis (Finnegan separately referenced $116 million raised through the forward ATM). Gallagher said the company also entered into a $200 million interest rate hedge at 3.99% ahead of a bond maturity in June, citing recent Treasury volatility.

Gallagher said Brixmor ended the quarter with $1.8 billion of available liquidity, including $425 million in cash, $115 million of unsettled forward ATM proceeds, and $1.25 billion of revolving credit capacity. He added that debt to EBITDA was 5.3x, which he said reflects natural deleveraging driven by underlying cash flow growth while funding redevelopment and acquisition pipelines.

Tenant health, bad debt, and consumer backdrop

In Q&A, Finnegan said Brixmor has the “strongest” tenant credit quality in the company’s history and said management has not seen delinquencies rising in small shop tenancy. Addressing bad debt, Gallagher said uncollectible revenues were 54 basis points of total revenues in the quarter and noted seasonality in the timing of reporting based on collections for certain tenants. Finnegan said move-outs were at historic lows last year and are down about 10% year to date on a gross leasable area basis, while bankruptcies were “cut in half” compared with the prior year’s level.

Finnegan also discussed category exposure, noting that drugstores and office supply stores are expected to continue closing locations but represent low exposure for Brixmor. He said restaurant exposure is largely national and regional, with top restaurant tenants including Starbucks, Chipotle, and Darden.

Asked about consumer resilience amid inflation and energy headlines, Finnegan said consumers are “adapting versus collapsing,” with value-seeking behavior benefiting grocers and off-price retailers, and increased spending on health and wellness supporting fitness and restaurant tenants. He added that two-thirds of Brixmor’s leasing activity during the quarter occurred after the start of the conflict referenced in his remarks, suggesting retailers have remained nimble.

About Brixmor Property Group NYSE: BRX

Brixmor Property Group is a publicly traded real estate investment trust (REIT) focused on the ownership, management and development of open-air shopping centers across the United States. The company acquires and leases retail properties that feature everyday, necessity-based tenants such as grocery stores, discount retailers, and service providers. Brixmor's core strategy centers on generating stable, long-term income streams through tenant relationships and targeted property enhancements.

The company's main business activities include proactive leasing, property upkeep and capital improvement projects designed to maximize occupancy and tenant satisfaction.

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