Phillips Edison & Company, Inc. ((PECO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Phillips Edison & Company, Inc. recently held its 2024 earnings call, showcasing a resilient performance despite facing economic challenges. The sentiment expressed during the call was predominantly positive, driven by strong operational metrics and robust financial health. Key highlights included impressive leasing spreads and a well-executed acquisition strategy, all contributing to a promising outlook for 2025.
Core FFO Per Share Growth
Phillips Edison & Company reported a core FFO per share growth of nearly 4% in 2024, overcoming significant interest expense headwinds. Excluding the impact of increased interest rates, the growth would have reached 6%. This reflects the company’s ability to manage financial pressures while delivering shareholder value.
Strong Leasing Performance
The company achieved remarkable leasing performance, with comparable new rent spreads of 30.2% and renewal rent spreads of 20.8% in the fourth quarter. High occupancy rates were maintained, ending the quarter with 98% leased, underscoring Phillips Edison’s effective tenant management and market positioning.
Successful Acquisitions and Pipeline
Phillips Edison & Company surpassed its original guidance for acquisitions, closing nearly $100 million in the fourth quarter alone. The company has a strong acquisition pipeline for the first quarter of 2025, setting the stage for continued growth and expansion.
Strong Financial Position
The company’s financial stability is highlighted by its $948 million in liquidity and a favorable debt profile, with no significant maturities until 2027 and 93% of total debt at fixed rates. This positions Phillips Edison well to navigate future economic uncertainties.
Bankruptcies and Bad Debt Concerns
While the end of 2024 and early 2025 saw several retailers filing for bankruptcy, Phillips Edison & Company reported minimal exposure to these events. Furthermore, the bad debt experience in 2024 was around 75 basis points, with guidance for 2025 ranging between 60 to 120 basis points.
Interest Rate Headwinds
Significant interest rate headwinds impacted Phillips Edison’s financial results, notably affecting core FFO per share growth. The company continues to strategize on mitigating these challenges to sustain its growth trajectory.
Positive 2025 Guidance
Phillips Edison & Company provided an optimistic outlook for 2025, projecting core FFO growth of 5.1% and same-center NOI growth of 3% to 3.5%. The company also forecasts gross acquisitions between $350 and $450 million, aiming for an unlevered IRR of 9%. This forward-looking guidance reflects a strategic focus on growth through acquisitions and strong operational performance.
In summary, Phillips Edison & Company’s 2024 earnings call highlighted a solid performance amid economic challenges, with positive sentiment and a promising outlook for 2025. Key takeaways include strong leasing and acquisition performance, a robust financial position, and strategic growth plans, positioning the company well for future success.