Phillips Edison & Company (PECO) BofA NY Global Real Estate Conference 2026 summary

Operating environment and portfolio performance

• Leasing margins and occupancy are at record highs, with strong operating performance across the portfolio.

• Acquisition volume is at its highest since going public, with purchases at a 6.7% initial yield and sales at a 5.9% yield.

• Focus remains on growing FFO per share mid to high single digits and maintaining a 3.5%+ dividend.

• Management has significant ownership, aligning interests with investors and emphasizing long-term growth.

• Local entrepreneurial retailers are renewing leases long-term at a 90% rate, indicating confidence in consumer health.

Consumer and retailer trends

• Consumer spending remains strong, especially in higher-income markets served by the portfolio.

• Local retailers, who best understand consumer trends, are committing to longer-term leases.

• Necessity-based retail is outperforming discretionary segments, with no significant negative consumer reaction observed.

• Large national grocers and local retailers are seen as highly adaptable and resilient.

Industry risks and market dynamics

• Main risks include interest rates and inflation, but necessity-based retail is less exposed to volatility.

• Higher interest rates benefit low-leverage buyers by making acquisitions more expensive for leveraged competitors.

• M&A activity among grocers is expected to avoid closures in the short term, with brand retention prioritized.

• Portfolio strength is tied to having the top grocers in each market, not just the brand but market dominance.