EX-99.1 2 brx8k07292019ex991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
logo.jpg
450 Lexington Avenue : New York, NY 10017 : 800.468.7526





FOR IMMEDIATE RELEASE

CONTACT:
Stacy Slater                            
Senior Vice President, Investor Relations            
800.468.7526                             
stacy.slater@brixmor.com
BRIXMOR PROPERTY GROUP REPORTS SECOND QUARTER 2019 RESULTS
- Accelerating Leasing and Reinvestment Momentum -

NEW YORK, JULY 29, 2019 - Brixmor Property Group Inc. (NYSE: BRX) (“Brixmor” or the “Company”) announced today its operating results for the three and six months ended June 30, 2019. For the three months ended June 30, 2019 and 2018, net income was $0.23 per diluted share and $0.26 per diluted share, respectively.

Key highlights for the three months ended June 30, 2019 include:
•
Executed 2.2 million square feet of new and renewal leases, with rent spreads on comparable space of 13.9%, including 1.0 million square feet of new leases, with rent spreads on comparable space of 30.4%
•
Executed 3.3 million square feet of total leasing volume, including options, with rent spreads on comparable space of 11.7%
•
Grew total leased occupancy to 91.5% and anchor leased occupancy to 94.2%
◦
Realized small shop leased occupancy of 85.3%, a 20 basis point increase from the comparable 2018 period, despite impact of the Payless ShoeSource liquidation, which primarily impacted occupancy in the three months ended June 30, 2019
◦
Leased to billed occupancy spread further expanded to 400 basis points, representing $51.4 million of annualized base rent not yet commenced, providing visibility on future growth
•
Generated same property NOI growth of 1.8%, driven by a 170 basis point contribution from base rent, reflecting the impact of strong rent spreads
•
Grew the total in process reinvestment pipeline to $414.6 million at an expected average incremental NOI yield of 10%, while delivering $16.0 million of projects at an average incremental NOI yield of 14%
•
Completed $52.1 million of dispositions comprised of 0.3 million square feet
•
Completed $78.5 million of acquisitions and repurchased $3.0 million of common stock, excluding commissions
•
Issued $400.0 million of Senior Notes due 2029 and repaid indebtedness under the Company’s unsecured credit facility, including $200.0 million of the Company’s $500.0 million term loan
•
Published inaugural Corporate Responsibility Report
•
Affirmed previously provided NAREIT FFO per diluted share and same property NOI growth expectations for 2019

“We continue to drive substantial, measurable progress on our plan to deliver value through record levels of leasing and reinvestment on a self-funded basis,” commented James Taylor, Chief Executive Officer and President. “The work we have accomplished sets us up well for consistent, sustainable growth, while also driving significant intrinsic value at the real estate level.”

FINANCIAL HIGHLIGHTS
Net Income
•
For the three months ended June 30, 2019 and 2018, net income was $69.0 million, or $0.23 per diluted share, and $80.4 million, or $0.26 per diluted share, respectively.

i

logo.jpg
450 Lexington Avenue : New York, NY 10017 : 800.468.7526

•
For the six months ended June 30, 2019 and 2018, net income was $131.9 million, or $0.44 per diluted share, and $141.4 million, or $0.47 per diluted share, respectively.

NAREIT FFO
•
For the three months ended June 30, 2019 and 2018, NAREIT FFO was $142.7 million, or $0.48 per diluted share, and $154.3 million, or $0.51 per diluted share, respectively. Results for the three months ended June 30, 2019 and 2018 include items that impact FFO comparability of ($1.1) million, or ($0.00) per diluted share, and ($1.1) million, or ($0.00) per diluted share, respectively.
•
For the six months ended June 30, 2019 and 2018, NAREIT FFO was $285.5 million, or $0.96 per diluted share, and $309.1 million, or $1.02 per diluted share, respectively. Results for the six months ended June 30, 2019 and 2018 include items that impact FFO comparability of ($1.8) million, or ($0.01) per diluted share, and ($1.8) million, or ($0.01) per diluted share, respectively.

Same Property NOI Growth
•
Same property NOI growth for the three months ended June 30, 2019 was 1.8% versus the comparable 2018 period.
◦
Same property base rent for the three months ended June 30, 2019 contributed 170 basis points to same property NOI growth.
◦
Sears / Kmart had an impact of approximately (50) basis points on same property NOI growth in the three months ended June 30, 2019.
•
Same property NOI growth for the six months ended June 30, 2019 was 1.9% versus the comparable 2018 period.
◦
Same property base rent for the six months ended June 30, 2019 contributed 170 basis points to same property NOI growth.
◦
Sears / Kmart had an impact of approximately (50) basis points on same property NOI growth in the six months ended June 30, 2019.

Dividend
•
The Company’s Board of Directors declared a quarterly cash dividend of $0.28 per common share (equivalent to $1.12 per annum) for the third quarter of 2019.
•
The dividend is payable on October 15, 2019 to stockholders of record on October 4, 2019, representing an ex-dividend date of October 3, 2019.

PORTFOLIO AND INVESTMENT ACTIVITY
Value Enhancing Reinvestment Opportunities
•
During the three months ended June 30, 2019, the Company delivered nine value enhancing reinvestment projects and added nine new reinvestment opportunities to its in process pipeline.  Projects added include six anchor space repositioning projects, two outparcel development projects and one redevelopment project, with a total aggregate net estimated cost of approximately $21.9 million at an expected average incremental NOI yield of 14%.
•
At June 30, 2019, the value enhancing reinvestment in process pipeline was comprised of 61 projects with an aggregate net estimated cost of approximately $414.6 million.  The in process pipeline includes 28 anchor space repositioning projects with an aggregate net estimated cost of approximately $108.9 million at expected incremental NOI yields of 9 to 14%; 11 outparcel development projects with an aggregate net estimated cost of approximately $26.8 million at an expected average incremental NOI yield of 10%; and 22 redevelopment projects with an aggregate net estimated cost of approximately $278.9 million at an expected average incremental NOI yield of 9%.





ii

logo.jpg
450 Lexington Avenue : New York, NY 10017 : 800.468.7526

Dispositions
•
During the three months ended June 30, 2019, the Company generated approximately $52.1 million of gross proceeds on the disposition of three shopping centers, as well as three partial properties, comprised of 0.3 million square feet.
•
During the six months ended June 30, 2019, the Company generated approximately $98.2 million of gross proceeds on the disposition of six shopping centers, as well as three partial properties, comprised of 0.8 million square feet.

Acquisitions and Share Repurchases
•
During the three months ended June 30, 2019, the Company acquired two shopping centers, one adjacency at an existing center and terminated a lease and acquired the associated subleases at an existing center for a combined purchase price of $78.5 million, including:
◦
Plymouth Square, a 236,000 square foot community shopping center (excluding square footage related to the anticipated relocation of Brixmor's regional office) located in Conshohocken, Pennsylvania (Philadelphia MSA), for $56.0 million. Plymouth Square is anchored by Weis Markets, Marshalls, REI and Sweat Fitness and has significant near-term value creation opportunity. The property is the Company’s twenty-fourth asset in the Philadelphia market and is located directly across from its 100% leased Whitemarsh Shopping Center.
◦
Centennial Shopping Center, a 114,000 square foot neighborhood shopping center located in Englewood, Colorado (Denver MSA), for $17.9 million. Centennial Shopping Center is anchored by a highly productive King Soopers grocer (Kroger) and Pet Supplies Plus and is the Company's sixth asset in the market.
•
During the three months ended June 30, 2019, the Company repurchased 0.2 million shares of common stock under its share repurchase program at an average price per share of $17.05 for a total of approximately $3.0 million, excluding commissions. Since inception of the share repurchase program in December 2017, the Company has repurchased 7.5 million shares of common stock at an average price per share of $16.72 for a total of approximately $125.0 million, excluding commissions. As of June 30, 2019, the share repurchase program had $275.0 million of available repurchase capacity.

CAPITAL STRUCTURE
•
As previously announced, during the three months ended June 30, 2019, the Company’s Operating Partnership, Brixmor Operating Partnership LP, issued $400.0 million aggregate principal amount of 4.125% Senior Notes due 2029. The net proceeds from the offering were utilized to repay indebtedness under the Company’s unsecured credit facility, including $200.0 million of the Company’s $500.0 million Term Loan maturing July 31, 2021.

CONNECT WITH BRIXMOR
•
For additional information, please visit www.brixmor.com;
•
Follow Brixmor on:
◦Twitter at https://twitter.com/Brixmor
◦Facebook at https://www.facebook.com/Brixmor
◦Instagram at https://www.instagram.com/brixmorpopupshop
◦YouTube at https://www.youtube.com/user/Brixmor; and
•
Find Brixmor on LinkedIn at www.linkedin.com/company/brixmor.






iii

logo.jpg
450 Lexington Avenue : New York, NY 10017 : 800.468.7526

CONFERENCE CALL AND SUPPLEMENTAL INFORMATION
The Company will host a teleconference on Tuesday, July 30, 2019 at 10:00 AM ET. To participate, please dial 877.705.6003 (domestic) or 201.493.6725 (international) within 15 minutes of the scheduled start of the call. The teleconference can also be accessed via a live webcast at www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on August 13, 2019 by dialing 844.512.2921 (domestic) or 412.317.6671 (international) (Passcode: 13690707) or via the web through July 30, 2020 at www.brixmor.com in the Investors section.

The Company’s Supplemental Disclosure will be posted at www.brixmor.com in the Investors section.  These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.

NON-GAAP PERFORMANCE MEASURES
The Company presents the non-GAAP performance measures set forth below. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company’s computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of these non-GAAP performance measures to net income is presented in the attached table.
                                                                 
NAREIT FFO
NAREIT FFO is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss), calculated in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated joint ventures calculated to reflect FFO on the same basis. Considering the nature of its business as a real estate owner and operator, the Company believes that NAREIT FFO is useful to investors in measuring its operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of the Company’s operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets.

Same Property NOI
Same property NOI is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. Same property NOI is calculated (using properties owned for the entirety of both periods and excluding properties under development and completed new development properties which have been stabilized for less than one year), as total property revenues (base rent, expense reimbursements, adjustments for revenues deemed uncollectible, ancillary and other rental income, percentage rents and other revenues) less direct property operating expenses (operating costs, real estate taxes and provision for doubtful accounts). Same property NOI excludes (i) corporate level expenses (including general and administrative), (ii) lease termination fees, (iii) straight-line rental income, net, (iv) accretion of above- and below-market leases and tenant inducements, net, (v) straight-line ground rent expense, and (vi) income / expense associated with the Company’s captive insurance company. Considering the nature of its business as a real estate owner

iv

logo.jpg
450 Lexington Avenue : New York, NY 10017 : 800.468.7526

and operator, the Company believes that same property NOI is useful to investors in measuring the operating performance of its property portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of the Company’s properties, such as depreciation and amortization and corporate level expenses (including general and administrative), and because it eliminates disparities in NOI due to the acquisition or disposition of properties or the stabilization of completed new development properties during the period presented and therefore provides a more consistent metric for comparing the operating performance of the Company's real estate between periods.

ABOUT BRIXMOR PROPERTY GROUP
Brixmor (NYSE: BRX) is a real estate investment trust (REIT) that owns and operates a high-quality, national portfolio of open-air shopping centers. Its 421 retail centers comprise approximately 73 million square feet of prime retail space in established trade areas. The Company strives to own and operate shopping centers that reflect Brixmor’s vision “to be the center of the communities we serve” and are home to a diverse mix of thriving national, regional and local retailers. Brixmor is a proud real estate partner to approximately 5,000 retailers including The TJX Companies, The Kroger Co., Publix Super Markets, Wal-Mart, Ross Stores and L.A. Fitness.

Brixmor announces material information to its investors in SEC filings and press releases and on public conference calls, webcasts and the “Investors” page of its website at www.brixmor.com. The Company also uses social media to communicate with its investors and the public, and the information Brixmor posts on social media may be deemed material information. Therefore, Brixmor encourages investors and others interested in the Company to review the information that it posts on its website and on its social media channels.

SAFE HARBOR LANGUAGE
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to the Company’s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

###

v

CONSOLIDATED BALANCE SHEETS
Unaudited, dollars in thousands, except share information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
As of
 
 
 
 
 
6/30/19
 
12/31/18
 
Assets
 
 
 
 
 
Real estate
 
 
 
 
 
 
Land
$
1,805,993

 
$
1,804,504

 
 
 
Buildings and tenant improvements
7,569,557

 
7,535,985

 
 
 
Construction in progress
132,296

 
90,378

 
 
 
Lease intangibles
646,102

 
667,910

 
 
 
 
 
10,153,948

 
10,098,777

 
 
 
Accumulated depreciation and amortization
(2,424,153
)
 
(2,349,127
)
 
 
Real estate, net
7,729,795

 
7,749,650

 
 
Cash and cash equivalents
10,809

 
41,745

 
 
Restricted cash
2,447

 
9,020

 
 
Marketable securities
15,813

 
30,243

 
 
Receivables, net
221,683

 
228,297

 
 
Deferred charges and prepaid expenses, net
144,178

 
145,662

 
 
Real estate assets held for sale
32,085

 
2,901

 
 
Other assets (1)
63,713

 
34,903

 
Total assets
$
8,220,523

 
$
8,242,421

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
Debt obligations, net
$
4,925,537

 
$
4,885,863

 
 
Accounts payable, accrued expenses and other liabilities (1)
530,805

 
520,459

 
Total liabilities
5,456,342

 
5,406,322

 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
Common stock, $0.01 par value; authorized 3,000,000,000 shares;
 
 
 
 
 
 
305,323,128 and 305,130,472 shares issued and 297,846,251 and 298,488,516
 
 
 
 
 
 
shares outstanding
2,978

 
2,985

 
 
Additional paid-in capital
3,223,058

 
3,233,329

 
 
Accumulated other comprehensive income (loss)
(7,887
)
 
15,973

 
 
Distributions in excess of net income
(453,968
)
 
(416,188
)
 
Total equity
2,764,181

 
2,836,099

 
Total liabilities and equity
$
8,220,523

 
$
8,242,421

 
 
 
 
 
 
 
 
(1) In connection with the Company’s adoption of ASC 842 on January 1, 2019, a right-of-use asset and lease liability were recorded and are included in Other assets and Accounts payable, accrued
expenses and other liabilities, respectively. See Supplemental Disclosure for additional information.









 
vi
logo.jpg


CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
Unaudited, dollars in thousands, except per share amounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
6/30/19
 
6/30/18
 
6/30/19
 
6/30/18
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
Rental income (1)
$
290,737

 
$
312,720

 
$
580,692

 
$
629,517

 
 
Other revenues
268

 
310

 
1,452

 
688

 
Total revenues
291,005

 
313,030

 
582,144

 
630,205

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
Operating costs
29,307

 
33,881

 
60,565

 
69,371

 
 
Real estate taxes
43,189

 
44,947

 
86,515

 
90,672

 
 
Depreciation and amortization
81,593

 
91,334

 
166,988

 
181,717

 
 
Provision for doubtful accounts
—

 
949

 
—

 
3,364

 
 
Impairment of real estate assets
6,186

 
11,927

 
9,298

 
27,829

 
 
General and administrative (2)
25,175

 
21,320

 
50,618

 
43,746

 
Total operating expenses
185,450

 
204,358

 
373,984

 
416,699

 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
Dividends and interest
300

 
104

 
447

 
200

 
 
Interest expense
(48,475
)
 
(55,200
)
 
(95,141
)
 
(110,371
)
 
 
Gain on sale of real estate assets
13,043

 
28,262

 
20,645

 
39,710

 
 
Loss on extinguishment of debt, net
(707
)
 
(291
)
 
(677
)
 
(423
)
 
 
Other
(756
)
 
(1,185
)
 
(1,574
)
 
(1,238
)
 
Total other expense
(36,595
)
 
(28,310
)
 
(76,300
)
 
(72,122
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
68,960

 
$
80,362

 
$
131,860

 
$
141,384

 
 
 
 
 
 
 
 
 
 
 
 
 
Per common share:
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
Basic
$
0.23

 
$
0.27

 
$
0.44

 
$
0.47

 
 
 
Diluted
$
0.23

 
$
0.26

 
$
0.44

 
$
0.47

 
 
Weighted average shares:
 
 
 
 
 
 
 
 
 
 
Basic
298,140

 
302,776

 
298,372

 
303,468

 
 
 
Diluted
298,893

 
302,934

 
298,895

 
303,614

 
 
 
 
 
 
 
 
 
 
 
 
(1) In connection with the Company’s adoption of ASC 842 on January 1, 2019, Rental income includes Expense reimbursements and Percentage rents for all periods presented. Additionally, for the
three and six months ended June 30, 2019, Rental income is presented net of Revenues deemed uncollectible. See Supplemental Disclosure for additional information.
(2) The Company capitalized $2.6 million and $5.5 million of leasing payroll and legal costs during the three and six months ended June 30, 2018. In connection with the Company's adoption of ASC
842 on January 1, 2019, the Company is no longer capitalizing such costs.








 
vii
logo.jpg


FUNDS FROM OPERATIONS (FFO)
 
 
 
 
Unaudited, dollars in thousands, except per share amounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
6/30/19
 
6/30/18
 
6/30/19
 
6/30/18
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (1)
$
68,960

 
$
80,362

 
$
131,860

 
$
141,384

 
 
Depreciation and amortization related to real estate
80,621

 
90,236

 
165,018

 
179,588

 
 
Gain on sale of real estate assets
(13,043
)
 
(28,262
)
 
(20,645
)
 
(39,710
)
 
 
Impairment of real estate assets
6,186

 
11,927

 
9,298

 
27,829

 
NAREIT FFO
$
142,724

 
$
154,263

 
$
285,531

 
$
309,091

 
 
 
 
 
 
 
 
 
 
 
 
 
NAREIT FFO per diluted share (1)
$
0.48

 
$
0.51

 
$
0.96

 
$
1.02

 
Weighted average diluted shares outstanding
298,893

 
302,934

 
298,895

 
303,614

 
 
 
 
 
 
 
 
 
 
 
 
 
Items that impact FFO comparability
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt, net
$
(707
)
 
$
(291
)
 
$
(677
)
 
$
(423
)
 
 
Litigation and other non-routine legal expenses
(373
)
 
(604
)
 
(1,070
)
 
(1,188
)
 
 
Transaction expenses
(59
)
 
(166
)
 
(69
)
 
(199
)
 
Total items that impact FFO comparability
$
(1,139
)
 
$
(1,061
)
 
$
(1,816
)
 
$
(1,810
)
 
Items that impact FFO comparability, net per share
$
(0.00
)
 
$
(0.00
)
 
$
(0.01
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Disclosures
 
 
 
 
 
 
 
 
 
Straight-line rental income, net
$
6,184

 
$
3,784

 
$
11,220

 
$
6,881

 
 
Accretion of above- and below-market leases and tenant inducements, net
3,653

 
7,083

 
7,769

 
13,138

 
 
Straight-line ground rent expense (2)
(32
)
 
(30
)
 
(63
)
 
(60
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per share
$
0.280

 
$
0.275

 
$
0.560

 
$
0.550

 
Dividends declared
$
83,397

 
$
83,223

 
$
166,833

 
$
166,500

 
Dividend payout ratio (as % of NAREIT FFO)
58.4
%
 
53.9
%
 
58.4
%
 
53.9
%
 
 
 
 
 
 
 
 
 
 
 
 
(1) The Company capitalized $2.6 million and $5.5 million, or $0.01 and $0.02 per diluted share, of leasing payroll and legal costs during the three and six months ended June 30, 2018. In connection
with the Company’s adoption of ASC 842 on January 1, 2019, the Company is no longer capitalizing such costs.
(2) Straight-line ground rent expense is included in Operating costs on the Consolidated Statements of Operations.









 
viii
logo.jpg


SAME PROPERTY NOI ANALYSIS
 
 
 
 
 
 
 
Unaudited, dollars in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
 
 
 
 
 
 
 
6/30/19
 
6/30/18
 
Change
 
6/30/19
 
6/30/18
 
Change
 
 
Same Property NOI Analysis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of properties
 
415

 
415

 
—
 
415

 
415

 
—
 
 
Percent billed
 
87.8
%
 
89.2
%
 
(1.4%)
 
87.8
%
 
89.2
%
 
(1.4%)
 
 
Percent leased
 
91.8
%
 
92.5
%
 
(0.7%)
 
91.8
%
 
92.5
%
 
(0.7%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base rent
 
$
209,951

 
$
206,392

 
 
 
$
418,366

 
$
411,361

 
 
 
 
 
Expense reimbursements
 
61,939

 
61,343

 
 
 
125,964

 
125,338

 
 
 
 
 
Revenues deemed uncollectible
 
(1,956
)
 
—

 
 
 
(4,767
)
 
—

 
 
 
 
 
Ancillary and other rental income / Other revenues
 
4,626

 
4,276

 
 
 
9,464

 
7,809

 
 
 
 
 
Percentage rents
 
2,046

 
1,609

 
 
 
4,915

 
4,502

 
 
 
 
 
 
 
 
 
276,606

 
273,620

 
1.1%
 
553,942

 
549,010

 
0.9%
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating costs
 
(29,003
)
 
(30,553
)
 
 
 
(59,598
)
 
(62,179
)
 
 
 
 
 
Real estate taxes
 
(42,428
)
 
(41,079
)
 
 
 
(85,195
)
 
(82,747
)
 
 
 
 
 
Provision for doubtful accounts
 
—

 
(514
)
 
 
 
—

 
(2,621
)
 
 
 
 
 
 
 
 
 
(71,431
)
 
(72,146
)
 
(1.0%)
 
(144,793
)
 
(147,547
)
 
(1.9%)
 
 
Same property NOI
 
$
205,175

 
$
201,474

 
1.8%
 
$
409,149

 
$
401,463

 
1.9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOI margin (1)(2)
 
74.2
%
 
73.8
%
 
 
 
73.9
%
 
73.5
%
 
 
 
 
Expense recovery ratio
 
86.7
%
 
85.6
%
 
 
 
87.0
%
 
86.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percent Contribution to Same Property NOI Growth:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
Percent Contribution
 
 
 
Change
 
Percent Contribution
 
 
 
 
 
Base rent
 
$
3,559

 
1.7%
 
 
 
$
7,005

 
1.7%
 
 
 
 
 
Revenues deemed uncollectible / Provision for doubtful accounts
 
(1,442
)
 
(0.7%)
 
 
 
(2,146
)
 
(0.5%)
 
 
 
 
 
Net recoveries
 
797

 
0.4%
 
 
 
759

 
0.2%
 
 
 
 
 
Ancillary and other rental income / Other revenues
 
350

 
0.2%
 
 
 
1,655

 
0.4%
 
 
 
 
 
Percentage rents
 
437

 
0.2%
 
 
 
413

 
0.1%
 
 
 
 
 
 
 
 
 
 
 
1.8%
 
 
 
 
 
1.9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Net Income to Same Property NOI
 
 
 
 
 
 
 
 
 
 
Same property NOI
 
$
205,175

 
$
201,474

 
 
 
$
409,149

 
$
401,463

 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-same property NOI
 
2,015

 
20,577

 
 
 
4,706

 
43,480

 
 
 
 
 
Lease termination fees
 
1,514

 
365

 
 
 
2,283

 
1,896

 
 
 
 
 
Straight-line rental income, net
 
6,184

 
3,784

 
 
 
11,220

 
6,881

 
 
 
 
 
Accretion of above- and below-market leases and tenant inducements, net
 
3,653

 
7,083

 
 
 
7,769

 
13,138

 
 
 
 
 
Straight-line ground rent expense
 
(32
)
 
(30
)
 
 
 
(63
)
 
(60
)
 
 
 
 
 
Depreciation and amortization
 
(81,593
)
 
(91,334
)
 
 
 
(166,988
)
 
(181,717
)
 
 
 
 
 
Impairment of real estate assets
 
(6,186
)
 
(11,927
)
 
 
 
(9,298
)
 
(27,829
)
 
 
 
 
 
General and administrative
 
(25,175
)
 
(21,320
)
 
 
 
(50,618
)
 
(43,746
)
 
 
 
 
 
Total other expense
 
(36,595
)
 
(28,310
)
 
 
 
(76,300
)
 
(72,122
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
68,960

 
$
80,362

 
 
 
$
131,860

 
$
141,384

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) In connection with the Company’s adoption of ASC 842 on January 1, 2019, Revenues is presented net of Revenues deemed uncollectible for the three and six months ended June 30, 2019.
(2) NOI margin includes the impact of Revenues deemed uncollectible / Provision for doubtful accounts within Revenues for all periods presented.





 
ix
logo.jpg