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    BRX
    Earnings call· Jun 2026(Q2 FY26)

    Brixmor Property Group Q2 FY26 earnings call BRX

    Jul 28, 2026 Source

    Executive summary

    Brixmor Property Group Q2 FY26 — Strong NOI Growth and Record Leasing Pipeline

    Brixmor Property Group reported a strong second quarter, driven by robust same-property NOI growth and record leasing activity, particularly in small shops. The company raised its full-year guidance for both same-property NOI and FFO, reflecting confidence in its operating platform and embedded growth. Strategic acquisitions and a substantial reinvestment pipeline further position Brixmor for future earnings expansion, despite a sequential dip in occupancy due to planned recaptures.

    Highlights

    5

    • Delivered 5.8% same-property NOI growth.

    • Achieved $0.58 per share of FFO.

    • Record small shop occupancy and a record signed but not yet commenced pipeline of $71 million annualized base rent.

    • Executed 1.4 million square feet of new and renewal leases at a blended cash spread of 19%, with new lease spreads of 31% and renewal spreads of 16%.

    • Increased 2026 expectations for same property NOI growth (5% to 5.75%) and FFO ($2.35 to $2.37 per share).

    Concerns

    3

    • Total leased occupancy ended the quarter at 94.8%, down 30 basis points sequentially due to proactive move-outs at redevelopment assets and recaptures from Painted Tree and Rent Kitchens.

    • FFO was partially offset by lower noncash rental income resulting from straight-line reversals on the Rem and Painted Tree bankruptcies, a $3 million charge.

    • Implied deceleration in same-property NOI growth in the second half of the year due to strong Q4 FY25 ancillary income comps.

    Guidance & targets

    3
    CategoryTargetConfidence
    Same-property NOI growth
    5% to 5.75%
    high materiality
    High
    FFO per share
    $2.35 to $2.37
    high materiality
    High
    Revenue deemed uncollectible
    60 to 85 basis points of total revenues
    medium materiality
    High

    Operational metrics

    32
    Same-property NOI growth
    5.8
    Q2 FY26

    Driven by strong underlying portfolio performance and cumulative benefit of leasing activity.

    FFO per share
    $0.58
    Q2 FY26

    Partially offset by $3 million charge in straight-line reversals.

    Total leased occupancy
    94.8down 30 bps sequentially
    Q2 FY26 end

    Decline expected due to proactive move-outs at redevelopment assets and recaptures.

    Leasing volume (new and renewal)
    1.4M
    Q2 FY26

    Executed at a blended cash spread of 19%.

    Blended cash lease spread
    19
    Q2 FY26

    Across new and renewal leases.

    New lease cash spread
    31
    Q2 FY26

    Above 30% for 3 years.

    Renewal lease cash spread
    16
    Q2 FY26

    In the mid-teens.

    Embedded rent growth (new and renewal leases)
    2.8
    Q2 FY26

    Record level achieved.

    Small shop occupancy
    92.6
    Q2 FY26 end

    New record level achieved.

    Expected incremental yield on active reinvestments
    10
    Ongoing

    Expected yield on nearly $350 million of active reinvestments.

    Outparcel developments added
    10record
    H1 FY26

    Record number of projects added in the first half of the year.

    Average incremental return on outparcel developments
    16
    H1 FY26

    Average return for the 10 projects added in H1 FY26.

    Senior notes interest rate
    5.375
    Q2 FY26

    Rate for $400 million senior notes issued.

    Forward hedge rate
    3.99
    Q2 FY26

    Settled as part of $400 million senior notes issuance, resulting in effective yield of 5.22%.

    Effective yield on new notes
    5.22approximately
    Q2 FY26

    Resulting from $400 million senior notes issuance and forward hedge settlement.

    Leverage (Net Debt/Adjusted EBITDA)
    5.3
    Q2 FY26

    Leverage ratio on a quarter annualized basis, still in the 5.3x to low 5s range.

    Total liquidity
    $1.5B
    Q2 FY26 end

    Includes cash on hand and unsettled forward ATM issuance.

    Cash on hand
    $100Mover
    Q2 FY26 end

    Part of total liquidity of $1.5 billion.

    Unsettled forward ATM issuance
    $115M
    Q2 FY26 end

    Part of total liquidity.

    Straight-line reversals charge
    $3M
    Q2 FY26

    Partially offset FFO, associated with Rem and Painted Tree bankruptcies.

    Acquisition activity concentration
    45
    Last 2 years

    Represents portion of total acquisition activity over the past 5 years.

    Average Base Rent (ABR) historical
    $12
    Historical

    Baseline ABR from which current ABR of over $19 has risen.

    Average Base Rent (ABR) current
    $19over
    Current

    Current ABR, having risen from $12.

    Embedded rent growth (in-place portfolio)
    1.6
    Current

    Represents the embedded rent growth across the existing portfolio.

    Signed-not-commenced pipeline commencement
    41
    FY26

    Portion of the signed-not-commenced pool expected to commence in 2026.

    Anchor lease expiring rent
    $11
    Next 3 years

    Average rent for anchors expiring, signed at close to 18%.

    Anchor lease new signing rent
    18close to
    Current

    New signing rate for anchors expiring at $11.

    Fixed CAM percentage of ABR
    40
    Current

    Percentage of ABR with fixed CAM.

    Fixed CAM growth rate
    4.2
    Current

    Growth rate across both small shop and anchors.

    Ancillary and other income growth
    doubled
    Since 2016

    Achieved on an asset base 60% of its 2016 size.

    Small shop move-outs (GLA)
    record lows
    Year-to-date

    From a GLA perspective.

    Tenant retention rate
    300up vs prior year
    Year-to-date

    Compared to this point last year.

    Industry KPIs

    2
    MetricValueDetails
    Investment volume and initial cash yield$164MUSD
    Blended acquisition cap rate and spread vs costlow 6%

    Orderbook & backlog

    3
    Signed-not-commenced pipeline$71MQ2 FY26 end

    record

    Annualized base rent; significant portion commences in 2027 and beyond.

    Future reinvestment pipeline$700MQ2 FY26 end

    exceeds

    Across the portfolio, providing a long runway of high-return internal growth.

    Investment volume under contract$50MQ2 FY26 end

    Additional asset in Southern California under hard contract, expected higher cap rate than Q2 acquisitions.

    Deals & partnerships

    3
    VariousAcquisition of high-quality, predominantly grocery-anchored assets.$164 million

    Included Mayfair Shopping Center (Long Island), Jones Crossing (College Station, Texas), Vintage Marketplace (Houston), and Stanford Station (Panama City, Florida).

    Seller of Mayfair Shopping CenterAcquisition using OP units as partial purchase price.Portion of purchase price

    Mayfair Shopping Center on Long Island. Structured as a convertible preferred with conversion rate above equity issuance at negotiation time.

    VariousAdditional asset under hard contract.about $50 million

    Asset located in Southern California, expected cap rate higher than Q2 acquisitions.

    Capital programs

    4
    Active reinvestmentsactive$350M

    Benefit: Expected 10% incremental yield

    Nearly $350 million of active reinvestments, with 8 new projects added during the quarter.

    Morris Hills Redevelopmentunderway
    Start: Q2 FY26

    Benefit: New specialty grocer

    Large-scale redevelopment project in Northern New Jersey.

    Southtown Reconfigurationunderway
    Start: Q2 FY26

    Benefit: Accommodate HomeSense, Sierra, Barnes & Noble

    Reconfiguring center in Dayton, Ohio.

    Market Plaza Repositioningunderway
    Start: Q2 FY26

    Benefit: Elevate asset with Kirby ICs and compelling merchandising mix

    Repositioning underutilized space in Suburban Dallas.

    Risks & headwinds

    3
    Sequential decline in total leased occupancyQ2 FY26

    94.8%, down 30 basis points sequentially

    Mitigation: Expected due to proactive move-outs for redevelopment and recaptures (Painted Tree, Rent Kitchens); already leased 6 of 8 recaptured boxes at >40% spreads, income commencing in 2027; expected to return to growth trajectory in H2 FY26.

    Impact of straight-line reversals on FFOQ2 FY26

    $3 million charge

    Mitigation: Associated with Rem and Painted Tree bankruptcies; noncash rental income expected to return to run rate for the remainder of the year.

    Implied deceleration in same-property NOI growth in H2 FY26H2 FY26

    Comping off strong Q4 FY25 ancillary and other income

    Mitigation: Base rent expected to continue growing from new pipeline commencements, setting up for strong stack rent into FY27.

    What to watch in Q3 FY26

    5

    Total leased occupancy recovery

    H2 FY26
    Current94.8%
    TargetGrowth trajectory

    Why it matters

    Indicates demand strength and successful re-leasing of recaptured spaces, impacting future NOI.

    Total leased occupancy ended the quarter at 94.8%, down 30 basis points sequentially as expected due to proactive move-outs at redevelopment assets and the recaptures from painted tree and rent kitchens. Importantly, we are already at least on 6 of the 8 recaptured rent and painted tree boxes at spreads of over 40%. So occupancy is not always linear. As we talked about, we do expect to get back on the trajectory of growth in the back half of the year.

    Q&A highlights

    7

    Was the Q2 occupancy decline expected, and what's the outlook for recovery and redevelopment projects enabling it?

    The decline was in line with expectations due to proactive move-outs for redevelopment. Occupancy is expected to return to growth trajectory in H2 FY26, with recaptured spaces already leased at over 40% spreads, commencing in 2027.

    “It was definitely in line with what we expected. As we talked about, we do expect to get back on the trajectory of growth in the back half of the year.”

    asked by Michael Goldsmith · answered by Brian Finnegan

    2 min read6 chapters

    Detailed Narrative

    01

    Tribute to Jim Taylor

    The call began with a tribute to the late Jim Taylor, acknowledging his profound impact on Brixmor's culture, values, and people. Management expressed gratitude for his foundational work and the industry's support, emphasizing that his legacy of humility, integrity, and purpose remains deeply embedded in the company.

    02

    Leasing Momentum and Rent Growth

    Brixmor continues to see strong tenant demand, executing 1.4 million square feet of new and renewal leases. New lease spreads remained above 30% for the third consecutive year, while renewal spreads were in the mid-teens. The company also achieved a record embedded rent growth of 2.8% across new and renewal leases, reflecting the value retailers place on their centers and the low rent basis.

    03

    Record Signed-but-Not-Yet-Commenced Pipeline

    The signed but not yet commenced (SNO) pipeline reached a record $71 million of annualized base rent, providing significant visibility into future NOI growth. A substantial portion of this pipeline is expected to commence in 2027 and beyond, extending the earnings growth trajectory well into the future.

    04

    Strategic Reinvestment and Development

    The company maintains a robust reinvestment pipeline, with nearly $350 million in active projects yielding an expected 10% incremental return, and a future pipeline exceeding $700 million. Eight new projects were added, focusing on optimizing tenancy and creating long-term value, alongside 4 new outparcel developments at a 16% average incremental return, indicating a strong runway for future densification.

    05

    Disciplined Acquisitions and Capital Recycling

    Brixmor completed 4 strategic acquisitions totaling $164 million, primarily grocery-anchored assets in existing markets. Notably, Mayfair Shopping Center marked the first use of OP units as acquisition currency, providing a new tool for disciplined external growth. The company emphasizes relationship-driven sourcing and a focus on assets with remerchandising and reinvestment potential.

    06

    Balance Sheet Strength and Liquidity

    S&P revised Brixmor's outlook to positive, reflecting balance sheet improvements. The company addressed its near-term maturity by issuing $400 million of 5.375% senior notes and settling a forward hedge at 3.99%. Leverage stands at 5.3x on a quarter annualized basis, with $1.5 billion in liquidity, including $115 million of unsettled forward ATM issuance, positioning it well for future capital allocation.

    AI-generated summary of the company’s earnings call. Not investment advice.