BRIXMOR PROPERTY GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS

NEW YORK, Feb. 7, 2022 /PRNewswire/ -- Brixmor Property Group Inc. BRX ("Brixmor" or the "Company") announced today its operating results for the three and twelve months ended December 31, 2021.  For the three months ended December 31, 2021 and 2020, net income was $0.27 per diluted share and $0.08 per diluted share, respectively, and for the twelve months ended December 31, 2021 and 2020, net income was $0.90 per diluted share and $0.41 per diluted share, respectively.

Key highlights for the three months ended December 31, 2021 include:

• Executed 2.1 million square feet of new and renewal leases, with rent spreads on comparable space of 14.5%, including 1.0 million square feet of new leases, with rent spreads on comparable space of 41.7%
• Sequentially increased total leased occupancy to 92.0%, anchor leased occupancy to 94.4%, and small shop leased occupancy to 86.7%
• Leased to billed occupancy spread totaled 330 basis points
• Total signed but not yet commenced lease population represented 2.6 million square feet and $50.3 million of annualized base rent
• Reported an increase in same property NOI of 9.7%
• Reported Nareit FFO of $137.4 million, or $0.46 per diluted share
• Stabilized $67.9 million of reinvestment projects at an average incremental NOI yield of 9%, with the in process reinvestment pipeline totaling $374.3 million at an expected average incremental NOI yield of 9%
• Completed $191.9 million of acquisitions and $116.2 million of dispositions
• Appointed Sandra A.J. Lawrence, former Executive Vice President and Chief Administrative Officer of The Children's Mercy Hospital and Clinics, to the Company's Board of Directors

Key highlights for the twelve months ended December 31, 2021 include:

• Executed 6.8 million square feet of new and renewal leases, with rent spreads on comparable space of 11.4%, including 3.1 million square feet of new leases, with rent spreads on comparable space of 27.6%
• Reported an increase in same property NOI of 8.9%
• Reported Nareit FFO of $522.3 million, or $1.75 per diluted share
• Nareit FFO included items that impact FFO comparability, including a loss on extinguishment of debt, net, litigation and other non-routine legal expenses, and transaction expenses of $(31.3) million, or $(0.10) per diluted share
• Stabilized $168.2 million of reinvestment projects at an average incremental NOI yield of 11%
• Completed $259.4 million of acquisitions and $244.3 million of dispositions
• Issued $850.0 million of Senior Notes and redeemed $500.0 million of Senior Notes due 2023 and a $350.0 million term loan scheduled to mature December 2023

Subsequent events:

• Provided 2022 Nareit FFO per diluted share expectations of $1.86 - $1.95 and same property NOI growth expectations of 2.0% - 4.0%
• Completed $131.9 million of acquisitions and $25.6 million of dispositions

"Our strong leasing volumes and spreads, growing in place ABR, record setting small shop occupancy and rate, and bottom line growth underscore the strength of Brixmor's value-added strategy and the continued execution by our amazing team," commented James Taylor, CEO and President.  "I'm particularly pleased with our prospects for continued outperformance, as evident in our forward leasing and reinvestment pipelines, as well as attractive acquisitions that leverage our value-added platform."

FINANCIAL HIGHLIGHTS

Net Income

• For the three months ended December 31, 2021 and 2020, net income was $81.2 million, or $0.27 per diluted share, and $24.4 million, or $0.08 per diluted share, respectively.
• For the twelve months ended December 31, 2021 and 2020, net income was $270.2 million, or $0.90 per diluted share, and $121.2 million, or $0.41 per diluted share, respectively.

Nareit FFO

• For the three months ended December 31, 2021 and 2020, Nareit FFO was $137.4 million, or $0.46 per diluted share, and $99.7 million, or $0.33 per diluted share, respectively. Results for the three months ended December 31, 2021 and 2020 include items that impact FFO comparability, including a loss on extinguishment of debt, net, litigation and other non-routine legal expenses, and transaction expenses of $(0.3) million, or $(0.00) per diluted share, and $(19.2) million, or $(0.06) per diluted share, respectively.
• For the twelve months ended December 31, 2021 and 2020, Nareit FFO was $522.3 million, or $1.75 per diluted share, and $437.8 million, or $1.47 per diluted share, respectively. Results for the twelve months ended December 31, 2021 and 2020 include items that impact FFO comparability, including losses on extinguishment of debt, net, litigation and other non-routine legal expenses, and transaction expenses of $(31.3) million, or $(0.10) per diluted share, and $(37.7) million, or $(0.13) per diluted share, respectively.

Same Property NOI Performance

• For the three months ended December 31, 2021, the Company reported an increase in same property NOI of 9.7% versus the comparable 2020 period.
• For the twelve months ended December 31, 2021, the Company reported an increase in same property NOI of 8.9% versus the comparable 2020 period.

Dividend

• The Company's Board of Directors declared a quarterly cash dividend of $0.24 per common share (equivalent to $0.96 per annum) for the first quarter of 2022.
• The dividend is payable on April 18, 2022 to stockholders of record on April 5, 2022, representing an ex-dividend date of April 4, 2022.

PORTFOLIO AND INVESTMENT ACTIVITY 

Value Enhancing Reinvestment Opportunities

• During the three months ended December 31, 2021, the Company stabilized nine value enhancing reinvestment projects with a total aggregate net cost of approximately $67.9 million at an average incremental NOI yield of 9% and added 11 new reinvestment projects to its in process pipeline. Projects added include five anchor space repositioning projects, two outparcel development projects, and four redevelopment projects, with a total aggregate net estimated cost of approximately $46.6 million at an expected average incremental NOI yield of 8%.
• At December 31, 2021, the value enhancing reinvestment in process pipeline was comprised of 50 projects with an aggregate net estimated cost of approximately $374.3 million at an expected average incremental NOI yield of 9%. The in process pipeline includes 16 anchor space repositioning projects with an aggregate net estimated cost of approximately $77.1 million at an expected incremental NOI yield of 8% - 14%; 12 outparcel development projects with an aggregate net estimated cost of approximately $23.5 million at an expected average incremental NOI yield of 11%; and 22 redevelopment projects with an aggregate net estimated cost of approximately $273.7 million at an expected average incremental NOI yield of 9%.
• An in-depth review of a project that highlights the Company's reinvestment expertise, Seminole Plaza (Tampa-St. Petersburg-Clearwater, FL MSA), can be found at this link: https://www.brixmor.com/blog/seminole-plaza-redev.

Acquisitions

• During the three months ended December 31, 2021, the Company acquired four shopping centers for a combined purchase price of $191.9 million, including:
• Pawleys Island Plaza located in Pawleys Island, South Carolina (Georgetown, SC MSA).
• Granada Shoppes located in Naples, Florida (Naples-Marco Island, FL MSA).
• Kings Market located in Roswell, Georgia (Atlanta-Sandy Springs-Alpharetta, GA MSA).
• Connexion located in Roswell, Georgia (Atlanta-Sandy Springs-Alpharetta, GA MSA).
• A more detailed update on acquisition activity during the three months ended December 31, 2021 can be found at this link: https://s1.q4cdn.com/531584854/files/doc_news/2022/2021BRXCapitalRecycling.pdf.  
• During the twelve months ended December 31, 2021, the Company acquired six shopping centers, in addition to certain outparcels, ancillary land parcels, and leasehold rights, for a combined purchase price of $259.4 million.
• Subsequent to December 31, 2021, the Company acquired two shopping centers for a combined purchase price of $131.9 million, including:
• Brea Gateway (as previously announced) located in Brea, California (Los Angeles-Long Beach-Anaheim, CA MSA).
• Arboretum Village, an approximately 95,000 square foot grocery-anchored neighborhood center located in Dallas, Texas (Dallas-Fort Worth-Arlington, TX MSA), for $46.2 million. Arboretum Village is anchored by Tom Thumb (Albertsons) and PetSmart and has an undeveloped pad site allowing for near-term growth opportunities. The property complements the Company's 12 other assets in the trade area, which aggregate approximately 2.5 million square feet.

Dispositions

• During the three months ended December 31, 2021, the Company generated approximately $116.2 million of gross proceeds on the disposition of eight shopping centers, as well as two partial properties, comprised of 1.1 million square feet of gross leasable area.
• During the twelve months ended December 31, 2021, the Company generated approximately $244.3 million of gross proceeds on the disposition of 17 shopping centers, as well as 15 partial properties, comprised of 2.6 million square feet of gross leasable area.
• Subsequent to December 31, 2021, the Company disposed of one shopping center for $25.6 million of gross proceeds.

CAPITAL STRUCTURE  

• During the three and twelve months ended December 31, 2021, the Company raised approximately $5.2 million in gross proceeds, excluding commissions, from the sale of approximately 0.2 million shares of common stock at an average price per share of $25.06 through its at-the-market equity offering program. As of December 31, 2021, $394.8 million of common stock remained available for issuance.
• During 2021, the Company's Operating Partnership, Brixmor Operating Partnership LP (the "Operating Partnership"), issued $850.0 million aggregate principal amount of Senior Notes and redeemed $500.0 of Senior Notes due 2023 and a $350.0 million term loan scheduled to mature December 2023.
• At December 31, 2021, the Company had $1.5 billion of total liquidity, comprised of $297.7 million of cash, cash equivalents, and restricted cash and $1.2 billion of availability under its Revolving Credit Facility.
• Subsequent to December 31, 2021, the Company repaid its $250.0 million Floating Rate Senior Notes due on February 1, 2022. The Company has no remaining debt maturities in 2022.

GUIDANCE

• The Company expects 2022 Nareit FFO per diluted share of $1.86 - $1.95 and same property NOI growth of 2.0% - 4.0%
• Expectations for 2022 same property NOI growth include a:
• Contribution from base rent of 400 - 500 bps
• Detraction from revenues deemed uncollectible of (250) bps - (150) bps, based on net reserves of 160 – 90 bps of total revenues
• Contribution from all other line items of 50 bps
• Expectations for 2022 Nareit FFO:
• Do not contemplate any tenants moving to or from a cash basis of accounting, either of which may result in significant volatility in straight-line rental income
• Do not include any items that impact FFO comparability, including loss on extinguishment of debt, litigation and other non-routine legal expenses, and transaction expenses, or any one-time items
• The following table provides a bridge from the Company's 2021 Nareit FFO per diluted share to the Company's 2022 estimated Nareit FFO per diluted share:

The following table provides a reconciliation of the range of the Company's 2022 estimated net income attributable to common stockholders to Nareit FFO:

CONNECT WITH BRIXMOR

• For additional information, please visit https://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/brixmorpropertygroup
• YouTube at https://www.youtube.com/user/Brixmor; and
• Find Brixmor on LinkedIn at https://www.linkedin.com/company/brixmor.

CONFERENCE CALL AND SUPPLEMENTAL INFORMATION

The Company will host a teleconference on Tuesday, February 8, 2022 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 https://www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on February 22, 2022 by dialing 844.512.2921 (domestic) or 412.317.6671 (international) (Passcode: 13725192) or via the web through February 8, 2023 at https://www.brixmor.com in the Investors section.

The Company's Supplemental Disclosure will be posted at https://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 tables.

Nareit FFO           

Nareit FFO is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. 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 and impairment write-downs 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 that 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 and real estate taxes). 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 below-market leases, net of amortization of above-market leases and tenant inducements, (v) straight-line ground rent expense, and (vi) income or expense associated with the Company's captive insurance company.  Considering the nature of its business as a real estate owner 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), lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, and straight-line ground rent expense 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 BRX is a real estate investment trust (REIT) that owns and operates a high-quality, national portfolio of open-air shopping centers. Its 382 retail centers comprise approximately 67 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 over 5,000 retailers including The TJX Companies, The Kroger Co., Publix Super Markets and Ross Stores.

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 https://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," "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, 2021, 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. Currently, one of the most significant factors that could cause actual outcomes or results to differ materially from forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, operating results, and cash flows of the Company, the Company's tenants, the real estate market, the financial markets, and the global economy. The COVID-19 pandemic has significantly impacted the Company and its tenants, and the extent to which it continues to do so will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, the effectiveness of vaccines, booster shots, and treatments against emerging variants of COVID-19 such as the Delta and Omicron variants, the direct and indirect economic effects of the pandemic and containment measures, and potential sustained changes in consumer behavior, among others. 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.

SOURCE Brixmor Property Group Inc.