Phillips Edison & Company (PECO) investor relations material

Business Strategy and Portfolio Overview

• Focus on necessity-based, grocery-anchored neighborhood shopping centers, with 95% of ABR from such assets and 83% from centers anchored by the #1 or #2 grocer in each market, supporting stable, high-quality growth.

• Portfolio includes approximately 324–330 centers across 31 states, with high occupancy rates: 97%–97.3% overall, 95.1% inline, and 98.7% anchor occupancy, and strong presence in Sun Belt and high-growth U.S. cities.

• 70% of ABR comes from necessity-based goods and services, with strong demographic alignment: average 3-mile median household income 15% above U.S. average and above-average population growth in core markets.

• Leasing spreads are robust, with renewal spreads over 20% and new leasing spreads between 30%-35.7%, supported by high tenant retention and low capital expenditure for renewals.

• Ongoing innovation in technology, including award-winning AI initiatives and 21 active projects to enhance operational efficiency.

Financial Performance and Guidance

• 2026 guidance projects Nareit FFO per share of $2.65–$2.71 (5.5% growth at midpoint) and Core FFO per share of $2.71–$2.77 (up 5.4%).

• Same-store/center NOI growth expected at 3.0%–4.0% for 2026, with long-term annual same-store growth guidance of 3%-4%.

• Dividend yield stands at 3%-3.7% as of year-end 2025.

• Maintains a strong balance sheet with $925M in liquidity, net debt to adjusted EBITDAre of 5.2x, and 99% fixed-rate debt.

• Inline tenant health ratios average 10%, with plans to gradually increase to 11-13% while maintaining profitability.

Acquisition, Capital Allocation, and Market Dynamics

• Targeting $400-$500 million in acquisitions for the year, with $300 million achievable without new equity; 2025 acquisitions totaled $395.5M, with early 2026 acquisitions at $77M.

• Acquisition market is competitive, with private buyers aggressive on pricing; company seeks 9% unlevered IRR for grocery-anchored and 10% for Everyday Retail assets.

• Cap rates for acquisitions averaged 6.6% in 2023; Everyday Retail assets show strong leasing and renewal spreads and occupancy improvements.

• Dispositions in 2025 totaled $145.4M, with $100-$200 million expected this year, recycling capital from stabilized assets into higher-growth opportunities.

• Active development pipeline with 20 projects under construction and 23 stabilized in 2025, adding $6.8M in incremental NOI.