Brixmor Property Group Inc. (NYSE:BRX) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 10:00 am ET


Brixmor Property Group Inc. (NYSE:BRX) Q4 2018 Earnings Conference Call Transcript


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Greetings, and welcome to the Brixmor Property Group Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Stacy Slater. Thank you, you may begin.

Stacy Slater

Thank you, operator, and thank you all for joining Brixmor's Fourth Quarter Conference Call. With me on the call today are; Jim Taylor, Chief Executive Officer and President; and Angela Aman, Executive Vice President and Chief Financial Officer; as well as Mark Horgan, Executive Vice President and Chief Investment Officer; and Brian Finnegan, Executive Vice President, Leasing, who will be available for Q&A.

Before we begin, let me remind everyone that some of our comments today may contain forward-looking statements that are based on certain assumptions and are subject to inherent risks and uncertainties as described in our SEC filings, and actual future results may differ materially. We assume no obligation to update any forward-looking statements.

Also, we will refer today to certain non-GAAP financial measures. Further information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in the earnings release and supplemental disclosure on the Investor Relations portion of our website. (Operator Instructions)

At this time, it's my pleasure to introduce Jim Taylor.

James Taylor

Thanks, Stacy. Good morning, and thank you for joining our 2018 fourth quarter conference call. I'm really pleased to report on how our team's accomplishments in 2018 were consistent with, and even better than the plan we set forth at our Investor Day in December of 2017. To a record-setting anchor leasing, a compelling spreads, a value accretive reinvestment pipeline that's delivering now, growing small shop leasing, our opportunistic capital recycling of the bottom quartile of our portfolio and a strengthened balance sheet. We've set the table for accelerating NOI growth of 3% or better in 2019 and beyond. In a few minutes Angela will provide some additional color on the fourth quarter and importantly the impact of the Kmart bankruptcy that we previewed on last quarter's call.

In short, the recapture of the Kmart space created 90 basis points of drag. That coupled with prior year headwinds below the ABR line created a tough comp for the quarter. However, even with those drags, we delivered 190 basis points of contribution from the top line and we're able to hold the full-year range we had originally provided of 1% to 1.5%. But perhaps most importantly recapturing those Kmart boxes is eliminated uncertainty for us, allowing us to advance accretive reinvestment plans, that will transform those centers at very attractive returns.

For the year, we signed a sector-leading 8.5 million square feet of new and renewal leases, achieving average new and renewal rents of $15.72, a comparable spreads of 14%. Our spreads on the 4 million feet of new leases, averaged 34%. Importantly, we created over $45 million of additional