Phillips Edison & Company (PECO) investor relations material

Business Strategy and Market Positioning

• Focus on necessity-based, grocery-anchored centers, with 94% of ABR from such assets and 82% from top grocers in each market.

• Targeting mid-to-high single-digit FFO per share growth, 3.5% dividend, and 10-11% total returns, with 2026 guidance projecting 5.9% Nareit FFO and 5.8% Core FFO per share growth.

• Growth achieved through core portfolio performance, active acquisitions ($400M–$500M guided for the year), and portfolio recycling to reinvest in higher-growth opportunities.

• Locally Smart™ strategy leverages local market knowledge and technology to optimize merchandising and drive leasing results.

• Emphasis on building a strong, experienced team and leveraging technology for operational efficiency.

Industry Trends and Market Environment

• Minimal new development in grocery-anchored shopping centers over the past 10-15 years due to high construction costs and limited rent growth.

• Strong demand and limited supply have led to record-high occupancy and significant pricing power.

• Merchandising mix has shifted toward more service, quick service, and medical retail tenants, enhancing relevance in communities.

• Everyday Retail™ initiative targets essential retail centers, aiming to scale to $700M–$1B over five years.

• Portfolio is cycle-tested, with 97% leased occupancy and a strong presence in Sun Belt states and growing U.S. cities.

Portfolio Performance and Growth Outlook

• Consistent delivery of 3%-4% same store NOI growth, with 3.5% achieved in Q1 and 3.8% last year.

• High occupancy with potential for further 100-150 basis points improvement over 18-24 months.

• Strong rent spreads: 36% on new leases and 21% on renewals in Q1, with over 20% renewal spreads for three consecutive years.

• Redevelopment projects expected to deliver 9%-12% cash-on-cash returns, contributing to NOI growth.

• Internal growth drivers include occupancy gains, leasing spreads, redevelopment, and contractual rent increases.