Phillips Edison & Company, Inc. (PECO) Bundle
A Brief History of Phillips Edison & Company
Phillips Edison & Company, Inc. (PECO), established in 1991, specializes in the acquisition, development, and management of grocery-anchored shopping centers. As of 2024, the company operates a diverse portfolio across the United States.
Company Growth and Portfolio Expansion
As of September 30, 2024, PECO owns 290 properties across 31 states, up from 275 properties in 2023. The total leased square footage increased to 32,902,000, compared to 31,425,000 square feet in the previous year. The annual base rent (ABR) reached $497,082,000, up from $453,028,000 in 2023, with 96.6% of the ABR generated from grocery-anchored centers.
| Metric | 2024 | 2023 |
|---|---|---|
| Number of Properties | 290 | 275 |
| Total Square Feet (in thousands) | 32,902 | 31,425 |
| Annual Base Rent (ABR) | $497,082,000 | $453,028,000 |
| Leased Occupancy (%) | 97.8% | 97.8% |
Financial Performance
For the nine months ended September 30, 2024, PECO reported total revenues of $165,527,000, an increase from $152,474,000 in 2023. The rental income rose to $161,780,000, reflecting an 8.2% increase year-over-year. However, net income attributable to stockholders decreased slightly to $44,543,000 from $43,315,000 in 2023.
| Financial Metric | 2024 | 2023 |
|---|---|---|
| Total Revenues | $165,527,000 | $152,474,000 |
| Rental Income | $161,780,000 | $149,566,000 |
| Net Income Attributable to Stockholders | $44,543,000 | $43,315,000 |
Debt Management
As of September 30, 2024, PECO's total debt obligations amounted to $2,134,003,000, with a weighted-average interest rate of 4.4%. In 2024, the company executed two significant senior note issuances: $350 million of 5.750% senior notes due 2034 and $350 million of 4.950% senior notes due 2035.
| Debt Metric | Amount (in thousands) | Weighted-Average Rate |
|---|---|---|
| Total Debt Obligations | $2,134,003 | 4.4% |
| Senior Notes Issued (5.750%) | $350,000 | Due 2034 |
| Senior Notes Issued (4.950%) | $350,000 | Due 2035 |
Market Outlook and Challenges
As of 2024, PECO faces challenges including inflationary pressures and potential economic downturns, which may affect tenant performance and overall market conditions. The company has provisions in most lease agreements to mitigate inflation impacts. In late September 2024, Hurricanes Helene and Milton caused estimated damages of approximately $2 million to properties in the southeast United States, highlighting the vulnerability of its portfolio to natural disasters.
A Who Owns Phillips Edison & Company, Inc. (PECO)
Ownership Structure
As of 2024, Phillips Edison & Company, Inc. (PECO) operates as a publicly traded real estate investment trust (REIT) primarily focused on grocery-anchored shopping centers. The ownership of PECO is divided between common stockholders and non-controlling interests associated with its operating partnership (OP).
Common Stock Ownership
As of September 30, 2024, PECO had a total of approximately 122.6 million shares of common stock outstanding. The common stock is publicly traded on the NASDAQ under the ticker symbol "PECO".
Shareholder Composition
The table below summarizes the ownership composition of Phillips Edison & Company as of September 30, 2024:
| Shareholder Type | Number of Shares (millions) | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | 61.4 | 50.1% |
| Retail Investors | 32.5 | 26.5% |
| Company Insiders | 11.5 | 9.4% |
| Non-controlling Interests (OP Units) | 13.6 | 11.0% |
| Total | 119.0 | 100% |
Non-Controlling Interests
As of September 30, 2024, the company had approximately 13.6 million non-voting OP units outstanding. These OP units can be converted into shares of common stock at a 1:1 ratio, providing additional liquidity and investment opportunities for the holders.
Recent Stock Performance
In the third quarter of 2024, PECO's stock price fluctuated between $35.50 and $39.75, reflecting market conditions and investor sentiment towards retail REITs. The stock has shown resilience with a year-to-date return of approximately 8.3% as of September 30, 2024.
Financial Performance Overview
The financial performance of PECO for the nine months ended September 30, 2024, is summarized in the table below:
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Revenues | $488,344 |
| Net Income | $49,515 |
| Net Income Attributable to Stockholders | $44,543 |
| Core FFO Attributable to Stockholders and OP Unit Holders | $246,049 |
| Total Assets | $3,558,407 |
| Total Liabilities | $2,104,788 |
Distributions
For the period from January to September 2024, PECO declared monthly distributions of $0.0975 per share, which was increased to $0.1025 per share starting September 2024. Total distributions paid to stockholders in 2024 amounted to approximately $108.6 million.
Conclusion on Ownership Dynamics
The ownership dynamics of Phillips Edison & Company, Inc. reflect a diverse investor base with significant institutional investment, alongside a substantial portion of non-controlling interests tied to its operating partnership. This structure supports the company's growth and operational strategies within the competitive retail real estate market.
Phillips Edison & Company, Inc. (PECO) Mission Statement
Phillips Edison & Company, Inc. (PECO) is a leading real estate investment trust (REIT) focused on the acquisition, development, and management of grocery-anchored shopping centers. The company’s mission is to enhance the quality of life in the communities it serves by providing accessible grocery and essential retail options. PECO aims to create value for shareholders through disciplined investment strategies, operational excellence, and commitment to sustainability.
Core Values
- Integrity: PECO emphasizes transparency and ethical practices in all its operations.
- Customer-Centric Approach: The company prioritizes tenant relationships and community engagement.
- Innovation: PECO invests in technology and innovative solutions to enhance shopping experiences.
- Sustainability: The company is committed to sustainable practices in property management and development.
Strategic Objectives
PECO's strategic objectives are designed to align with its mission and core values:
- Expand its portfolio of grocery-anchored shopping centers to meet community needs.
- Enhance tenant retention through supportive relationships and responsive management.
- Leverage data analytics to optimize leasing strategies and property performance.
- Invest in sustainable building practices and energy-efficient upgrades.
Financial Performance Overview
As of September 30, 2024, Phillips Edison & Company reported significant financial metrics that reflect its operational efficiency and growth potential:
| Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Total Revenues | $488,344,000 | $455,675,000 | 7.2% |
| Net Income | $49,515,000 | $48,574,000 | 1.9% |
| Cash Flow from Operating Activities | $250,707,000 | $218,988,000 | 14.5% |
| Weighted-Average Interest Rate | 4.4% | 4.1% | 7.3% |
Portfolio Statistics
PECO's real estate portfolio as of September 30, 2024, includes:
| Statistic | Value |
|---|---|
| Number of Properties | 290 |
| Total Square Feet | 32,902,000 |
| Leased Occupancy Rate | 97.8% |
| Annualized Base Rent (ABR) | $497,082,000 |
| Percentage of ABR from Grocery-Anchored Centers | 96.6% |
Recent Acquisitions
In the first nine months of 2024, PECO engaged in several strategic acquisitions:
| Type | 2024 | 2023 | Contract Price ($000) |
|---|---|---|---|
| Properties Acquired | 8 | 5 | $203,402 |
| Outparcels Acquired | 4 | 1 | $205,002 |
Future Outlook
PECO is poised for continued growth, driven by its strategic focus on grocery-anchored centers, community engagement, and sustainable practices. The company plans to maintain its trajectory of expanding its property portfolio while ensuring operational efficiency and enhancing shareholder value.
How Phillips Edison & Company, Inc. (PECO) Works
Business Model
Phillips Edison & Company, Inc. (PECO) operates as a real estate investment trust (REIT) focusing on grocery-anchored shopping centers across the United States. The company primarily invests in and manages a diverse portfolio of retail properties, targeting locations with strong demographics and high consumer traffic.
Portfolio Overview
As of September 30, 2024, PECO's portfolio includes:
- Number of properties: 290
- Number of states: 31
- Total square feet: 32,902,000
- Annualized base rent (ABR): $497,082,000
- Leased occupancy rate: 97.8%
Financial Performance
For the nine months ended September 30, 2024, PECO reported the following financial metrics:
| Metric | 2024 | 2023 | % Change |
|---|---|---|---|
| Total revenues | $488,344,000 | $455,675,000 | 7.2% |
| Net income | $49,515,000 | $48,574,000 | 1.9% |
| Core FFO attributable to stockholders | $246,049,000 | $232,846,000 | 5.7% |
Debt Structure
PECO's total debt obligations as of September 30, 2024, were as follows:
| Debt Type | Amount ($000s) | Interest Rate (%) | Maturity |
|---|---|---|---|
| Revolving credit facility | $181,000 | SOFR + 0.9% | Jan 2026 |
| Term loans | $964,750 | 3.8% - 6.2% | Various |
| Senior unsecured notes (2031) | $350,000 | 2.625% | 2031 |
| Senior unsecured notes (2034) | $350,000 | 5.750% | 2034 |
| Senior unsecured notes (2035) | $350,000 | 4.950% | 2035 |
Acquisition and Disposition Activities
During the nine months ended September 30, 2024, PECO executed the following acquisition activities:
| Activity | 2024 | 2023 |
|---|---|---|
| Number of properties acquired | 8 | 5 |
| Contract price ($000s) | $203,402 | $92,060 |
| Total price of acquisitions ($000s) | $205,002 | $83,073 |
Cash Flow Activities
PECO reported cash flow activities for the nine months ending September 30, 2024, as follows:
| Activity | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Net cash provided by operating activities | $250,707 | $218,988 |
| Net cash used in investing activities | ($259,621) | ($146,339) |
| Net cash provided by financing activities | $9,369 | ($81,759) |
Distributions
In September 2024, PECO declared a monthly distribution of $0.1025 per common share and OP unit, marking a 5.1% increase from previous distributions. Over the nine months, the company declared and paid distributions totaling:
- $0.2975 per share from January to August 2024
- $0.1025 for September 2024
Leasing Activity
PECO's leasing activity for the nine months ended September 30, 2024, includes:
| Activity | 2024 | 2023 |
|---|---|---|
| New leases signed | 255 | 274 |
| Renewals and options executed | 535 | 505 |
Market Position
PECO predominantly focuses on grocery-anchored shopping centers, with approximately 96.6% of its ABR derived from this segment as of September 30, 2024. The company continues to leverage its established market presence and strategic acquisitions to enhance its portfolio and operational efficiency.
How Phillips Edison & Company, Inc. (PECO) Makes Money
Revenue Sources
Phillips Edison & Company, Inc. generates revenue primarily through rental income from its portfolio of grocery-anchored shopping centers. As of September 30, 2024, the company reported:
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Rental Income | $161,780 | $149,566 | $12,214 | 8.2% |
| Fees and Management Income | $2,856 | $2,168 | $688 | 31.7% |
| Other Property Income | $891 | $740 | $151 | 20.4% |
| Total Revenues | $165,527 | $152,474 | $13,053 | 8.6% |
Operating Expenses
The operating expenses related to managing the properties also play a crucial role in determining net income. For Q3 2024, the breakdown of operating expenses is as follows:
| Expense Type | Q3 2024 Amount (in thousands) | Q3 2023 Amount (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Property Operating | $27,528 | $24,274 | $3,254 | 13.4% |
| Real Estate Taxes | $19,569 | $19,028 | $541 | 2.8% |
| General and Administrative | $11,114 | $10,385 | $729 | 7.0% |
| Depreciation and Amortization | $68,328 | $58,706 | $9,622 | 16.4% |
| Total Operating Expenses | $126,539 | $112,393 | $14,146 | 12.6% |
Net Income
Net income for the third quarter of 2024 was reported as follows:
| Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Net Income | $12,903 | $13,729 | ($826) | (6.0%) |
| Net Income Attributable to Stockholders | $11,602 | $12,245 | ($643) | (5.3%) |
Debt and Financing
PECO's financing strategy involves a mix of fixed-rate and variable-rate debt. As of September 30, 2024, the total debt allocation is as follows:
| Debt Type | Total Amount (in thousands) | Interest Rate Range |
|---|---|---|
| Fixed-rate Debt | $1,988,253 | 3.8% - 6.2% |
| Variable-rate Debt | $145,750 | SOFR + 0.9% |
| Total Debt | $2,134,003 | N/A |
Acquisition Activity
PECO actively acquires new properties to expand its portfolio. The following table summarizes acquisition activity for the nine months ended September 30, 2024:
| Metric | 2024 | 2023 |
|---|---|---|
| Number of Properties Acquired | 8 | 5 |
| Contract Price (in thousands) | $203,402 | $92,060 |
| Total Price of Acquisitions (in thousands) | $205,002 | $83,073 |
Distributions
PECO declared and paid monthly distributions of:
| Month | Distribution per Share |
|---|---|
| January 2024 | $0.0975 |
| February 2024 | $0.0975 |
| March 2024 | $0.0975 |
| April 2024 | $0.0975 |
| May 2024 | $0.0975 |
| June 2024 | $0.0975 |
| July 2024 | $0.0975 |
| August 2024 | $0.0975 |
| September 2024 | $0.1025 |
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Article updated on 8 Nov 2024
Resources:
- Phillips Edison & Company, Inc. (PECO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Phillips Edison & Company, Inc. (PECO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Phillips Edison & Company, Inc. (PECO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.