(Exact Name of Registrant as Specified in Its Charter)
Maryland
(Brixmor Property Group Inc.)
45-2433192
Delaware
(Brixmor Operating Partnership LP)
80-0831163
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
450 Lexington Avenue, New York, New York10017
(Address of Principal Executive Offices) (Zip Code)
212-869-3000
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share.
BRX
New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Brixmor Property Group Inc. Yes☑No ☐ Brixmor Operating Partnership LP Yes☑No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Brixmor Property Group Inc. Yes ☐No☑ Brixmor Operating Partnership LP Yes ☐No☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Brixmor Property Group Inc. Yes☑No ☐ Brixmor Operating Partnership LP Yes☑No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Brixmor Property Group Inc. Yes☑No ☐ Brixmor Operating Partnership LP Yes☑No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Brixmor Property Group Inc.
Brixmor Operating Partnership LP
Large accelerated filer
☑
Non-accelerated filer
☐
Large accelerated filer
☐
Non-accelerated filer
☑
Smaller reporting company
☐
Accelerated filer
☐
Smaller reporting company
☐
Accelerated filer
☐
Emerging growth company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. N/A
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Brixmor Property Group Inc. ☑ Brixmor Operating Partnership LP ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Brixmor Property Group Inc. ☐ Brixmor Operating Partnership LP ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Brixmor Property Group Inc. ☐ Brixmor Operating Partnership LP ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Brixmor Property Group Inc. Yes ☐No ☑ Brixmor Operating Partnership LP Yes ☐No ☑
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants’ most recently completed second fiscal quarter.
Brixmor Property Group Inc. $6,570,963,388 Brixmor Operating Partnership LP N/A
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
As of February 1, 2024, Brixmor Property Group Inc. had 301,292,573 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement to be filed by Brixmor Property Group Inc. with the Securities and Exchange Commission pursuant to Regulation 14A relating to the registrant’s Annual Meeting of Stockholders to be held on April 25, 2024 will be incorporated by reference in this Form 10-K in response to Items 10, 11, 12, 13 and 14 of Part III. The definitive proxy statement will be filed with the SEC not later than 120 days after the registrant’s fiscal year ended December 31, 2023.
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the period ended December 31, 2023 of Brixmor Property Group Inc. and Brixmor Operating Partnership LP. Unless stated otherwise or the context otherwise requires, references to the “Parent Company” or “BPG” mean Brixmor Property Group Inc. and its consolidated subsidiaries, and references to the “Operating Partnership” mean Brixmor Operating Partnership LP and its consolidated subsidiaries. Unless the context otherwise requires, the terms “the Company,” “Brixmor,” “we,” “our,” and “us” mean the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust ("REIT") that owns 100% of the limited liability company interests of BPG Subsidiary LLC ("BPG Sub"), which, in turn, is the sole member of Brixmor OP GP LLC (the "General Partner"), the sole general partner of the Operating Partnership. As of December 31, 2023, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 100% of the outstanding partnership common units (the "OP Units") in the Operating Partnership.
The Company believes combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report:
•Enhances investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole, in the same manner as management views and operates the business;
•Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and
•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as one business. Because the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the Parent Company’s executive officers are the Operating Partnership’s executive officers, and although, as a partnership, the Operating Partnership does not have a board of directors, we refer to the Parent Company’s board of directors as the Operating Partnership’s board of directors.
We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company does not incur any material indebtedness. The Operating Partnership holds substantially all of our assets. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations and its direct or indirect incurrence of indebtedness.
Equity, capital, and non-controlling interests are the primary areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent Company through BPG Sub and the General Partner and has in the past, and may in the future, include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for outside of equity in non-controlling interests in the Parent Company’s financial statements.
The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have material assets other than its indirect interest in the Operating Partnership. Therefore, while equity, capital, and non-controlling interests may differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are materially the same on their respective financial statements.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections of this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, separate certification of periodic report under Section 302 of the Sarbanes-Oxley Act of 2002, and separate certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.
This report 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 (the "Exchange Act"). These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our 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. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in this report, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC’s website at https://www.sec.gov. These factors include (1) changes in national, regional, and local economies, due to global events such as international military conflicts, international trade disputes, a foreign debt crisis, foreign currency volatility, or due to domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, general economic contractions, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending; (2) local real estate market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio (defined hereafter); (3) competition from other available properties and e-commerce; (4) disruption and/or consolidation in the retail sector, the financial stability of our tenants, and the overall financial condition of large retailing companies, including their ability to pay rent and/or expense reimbursements that are due to us; (5) in the case of percentage rents, the sales volumes of our tenants; (6) increases in property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, which are relatively inflexible and generally do not decrease if revenue or occupancy decrease; (7) increases in the costs to repair, renovate, and re-lease space; (8) earthquakes, wildfires, tornadoes, hurricanes, damage from rising sea levels due to climate change, other natural disasters, epidemics and/or pandemics, civil unrest, terrorist acts, or acts of war, any of which may result in uninsured or underinsured losses; and (9) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except to the extent otherwise required by law.
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PART I
Item 1. Business
Brixmor Property Group Inc. and subsidiaries (collectively, "BPG") is an internally-managed corporation that has elected to be taxed as a real estate investment trust ("REIT"). Brixmor Operating Partnership LP and subsidiaries (collectively, the "Operating Partnership") is the entity through which BPG conducts substantially all of its operations and owns substantially all of its assets. BPG owns 100% of the limited liability company interests of BPG Subsidiary LLC ("BPG Sub"), which, in turn, is the sole member of Brixmor OP GP LLC (the "General Partner"), the sole general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, “we,” “our,” and “us” mean BPG and the Operating Partnership, collectively. We own and operate one of the largest publicly-traded open-air retail portfolios by gross leasable area ("GLA") in the United States ("U.S."), comprised primarily of community and neighborhood shopping centers. As of December 31, 2023, our portfolio was comprised of 362 shopping centers (the "Portfolio") totaling approximately 64 million square feet of GLA. Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas ("CBSAs") in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers. As of December 31, 2023, our three largest tenants by annualized base rent ("ABR") were The TJX Companies, Inc., The Kroger Co., and Burlington Stores, Inc. In the opinion of our management, no material part of our business is dependent upon a single tenant, the loss of which would have a material adverse effect on us, and no single tenant or shopping center accounted for 5% or more of our consolidated revenues during 2023.
As of December 31, 2023, BPG beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 100% of the outstanding partnership common units (the "OP Units") in the Operating Partnership. The number of OP Units in the Operating Partnership beneficially owned by BPG is equivalent to the number of outstanding shares of BPG’s common stock, and the entitlement of all OP Units to quarterly distributions and payments in liquidation is substantially the same as those of BPG’s common stockholders. BPG’s common stock is publicly traded on the New York Stock Exchange ("NYSE") under the ticker symbol “BRX.”
Management operates BPG and the Operating Partnership as one business. Because the Operating Partnership is managed by BPG, and BPG conducts substantially all of its operations through the Operating Partnership, BPG’s executive officers are the Operating Partnership’s executive officers, and although, as a partnership, the Operating Partnership does not have a board of directors, we refer to BPG’s board of directors as the Operating Partnership’s board of directors.
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Our Shopping Centers
The following table provides summary information regarding our Portfolio as of December 31, 2023:
Number of Shopping Centers
362
GLA (square feet)(1)
64.5 million
Percent Billed(2)
91%
Percent Leased(3)
95%
ABR Per Square Foot ("PSF")(4)
$16.88
New Lease Volume (square feet)(5)
3.0 million
New and Renewal Lease Volume (square feet)(5)
6.3 million
New, Renewal and Option Lease Volume (square feet)(5)
10.2 million
New Rent Spread(5)(6)
40.0%
New and Renewal Rent Spread(5)(6)
19.3%
New, Renewal and Option Rent Spread(5)(6)
15.3%
Percent Grocery-Anchored Shopping Centers(7)
75%
Percent of ABR in Top 50 U.S. CBSAs
72%
(1) GLA represents the total amount of leasable property square footage.
(2) Billed GLA as a percentage of total GLA. Billed GLA represents the aggregate GLA of all commenced leases with an initial term of one year or greater, as of a specified date.
(3) Leased GLA as a percentage of total GLA. Leased GLA represents the aggregate GLA of all signed or commenced leases with an initial term of one year or greater, as of a specified date, excluding all signed leases on space that will be vacated by existing tenants in the near term.
(4) ABR represents contractual monthly base rent as of a specified date under leases that have been signed or commenced as of the specified date, multiplied by 12. For purposes of calculating ABR, all signed or commenced leases with an initial term of one year or greater are included and all signed leases on space that will be vacated by existing tenants in the near term are excluded. ABR PSF is calculated as ABR divided by leased GLA, excluding the GLA of lessee-owned leasehold improvements.
(5) During the year ended December 31, 2023.
(6) Represents the percentage change in contractual ABR PSF in the first year of the new lease relative to contractual ABR PSF in the last year of the old lease. For purposes of calculating rent spreads, ABR PSF includes the GLA of lessee-owned leasehold improvements. Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months, renewal leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months, and contractual renewal options exercised by tenants in the same location to extend the term of an expiring lease. New leases signed on units that have been vacant for longer than 12 months, new leases signed on first generation space, and new leases that are ancillary in nature regardless of term are deemed non-comparable and excluded from rent spreads. Renewals that include the expansion of an existing tenant into space that has been vacant for longer than 12 months and renewals that are ancillary in nature regardless of term are deemed non-comparable and excluded from rent spreads.
(7) Based on number of shopping centers.
Business Objectives and Strategies
Our primary objective is to maximize total returns to our stockholders through consistent, sustainable growth in cash flow. Our key strategies to achieve this objective include proactively managing our Portfolio to drive internal growth, pursuing value-enhancing reinvestment opportunities, and prudently executing on acquisition and disposition activity, while also maintaining a flexible capital structure positioned for growth. In addition, as we execute on our key strategies, we do so guided by our purpose-driven Corporate Responsibility ("CR") strategy.
Driving Internal Growth. Our primary drivers of internal growth include (i) embedded contractual rent escalations, (ii) below-market rents that may be reset to market as leases expire, (iii) occupancy growth, and (iv) prudent expense management, including proactively navigating inflationary pressure on operating costs and wages. Ongoing strong new leasing productivity, with a key focus on thoughtful merchandising and our rigorous underwriting processes, have also enabled us to consistently improve the credit of our tenancy and the vibrancy and relevancy of our Portfolio to retailers and consumers. During 2023, we executed 577 new leases representing approximately 3.0 million square feet and 1,653 total leases, including new leases, renewals, and options, representing approximately 10.2 million square feet.
We believe that rents across our Portfolio are below market, which provides us with a key competitive advantage in attracting and retaining tenants. During 2023, we achieved rent spreads on new leases of 40.0% and blended rent spreads on new and renewal leases of 19.3% excluding options or 15.3% including options. Looking forward, the weighted average expiring ABR PSF of anchor lease expirations through 2026, assuming no remaining renewal options are exercised, is $10.55 compared to a weighted average ABR PSF of $15.26 for new anchor leases signed during 2023.
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Our high-quality, nationally diversified portfolio of community and neighborhood shopping centers continues to benefit from robust, broad based leasing demand for physical locations, driving record leased occupancy in 2023. We believe there is opportunity for further occupancy gains in our Portfolio, particularly for spaces less than 10,000 square feet, as such spaces will continue to benefit from our value-enhancing reinvestment initiatives. As of December 31, 2023, leased occupancy was a record 90.3% for spaces less than 10,000 square feet, while our total leased occupancy was a record 94.7%. The spread between our total leased occupancy and our total billed occupancy was 410 basis points and our total signed but not yet commenced lease population, which includes an additional 60 basis points of GLA related to space that will soon be vacated by existing tenants, represented 3.0 million square feet and $64.0 million of ABR, providing strong visibility on our future growth.
Pursuing value-enhancing reinvestment opportunities. We believe that we have significant opportunities to realize attractive risk-adjusted returns by investing capital in the repositioning and/or redevelopment of certain assets in our Portfolio. Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers. During 2023, we stabilized 29 anchor space repositioning, outparcel development, and redevelopment projects, with a weighted average incremental net operating income ("NOI") yield of 9% and an aggregate cost of $156.7 million. As of December 31, 2023, we had 45 projects in process with an expected weighted average incremental NOI yield of 9% and an aggregate anticipated cost of $429.2 million. In addition, we have identified a pipeline of future reinvestment projects aggregating approximately $900 million of potential capital investment, which we expect to execute over the next several years at NOI yields that are generally consistent with those that we have recently realized.
Prudently executing on acquisition and disposition activity. We actively pursue acquisition and disposition opportunities in order to further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base. In general, our acquisition strategy focuses on buying assets with strong growth potential that are located in our existing markets and will allow us to leverage our operational platform and expertise to create value, while our disposition strategy focuses on selling assets when we believe value has been maximized, where there may be future downside risk, or where we have limited ability or desire to build critical mass in a particular submarket. Our acquisition activity may include acquisitions of open-air shopping centers and non-owned anchor spaces or outparcels at, or adjacent to, our shopping centers and the timing of acquisition and disposition activity is often dependent on the transactions and capital markets environments.
During 2023, we acquired $2.3 million of assets, including transaction costs and closing credits, and generated aggregate net proceeds of $182.3 million from property dispositions. Proceeds from dispositions were used to repay $106.5 million, net of borrowings, under our $1.25 billion revolving credit facility (the "Revolving Facility"), and to fund value-enhancing reinvestment opportunities. Acquisitions during 2023 were limited as we remained disciplined in navigating a dynamic capital markets environment.
Maintaining a Flexible Capital Structure Positioned for Growth.We believe our capital structure provides us with the financial and operational flexibility and capacity to fund our current capital needs, as well as future growth opportunities. We have access to multiple forms of capital, including secured property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives. We have investment grade credit ratings from all three major credit rating agencies and during 2023, we received a credit rating upgrade from S&P Global Ratings.
We have an unsecured credit facility, as amended and restated on April 28, 2022 (the "Unsecured Credit Facility"), which is comprised of the $1.25 billion Revolving Facility and a $300.0 million term loan, in addition to a $200.0 million delayed draw term loan, which was drawn on April 24, 2023 (together, the "Term Loan Facility"). The Revolving Facility and Term Loan Facility mature in June 2026 and July 2027, respectively. We also have a $400 million share repurchase program and a $400 million at-the-market equity offering program ("ATM"), which together provide us with maximum flexibility to capitalize on a wide range of potential capital markets environments and support the long-term execution of our balanced business plan.
During 2023, we repurchased $199.6 million of our 3.650% Senior Notes due 2024 (the "2024 Notes") pursuant to a cash tender offer (the "Tender Offer"), with $300.4 million aggregate principal amount of the 2024 Notes remaining outstanding. We funded the Tender Offer with proceeds from our $200.0 million delayed draw term loan. As of December 31, 2023, we had $1.25 billion of available liquidity, including $1.23 billion under our Revolving Facility
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and $18.9 million of cash and cash equivalents and restricted cash. We have $300.4 million of debt maturities in 2024 and have $700.0 million of debt maturities in February 2025.
Operating in a Socially Responsible Manner. We believe that prioritizing CR is critical to delivering consistent, sustainable growth. Our CR strategy is integrated throughout our organization and is focused on creating partnerships that improve the social, economic, and environmental well-being of all our stakeholders including our communities, employees, tenants, suppliers and vendors, and investors. Our strong commitment to CR directly aligns with our core values and our vision to be the center of the communities we serve.
Our Board of Directors, through our Nominating and Corporate Governance Committee ("NCGC") oversees our CR initiatives to ensure that our actions demonstrate our strong commitment to operating in an environmentally and socially responsible manner. To facilitate their oversight, the NCGC and our Board of Directors are provided with quarterly updates on our initiatives by our senior leadership team. Our internal steering committee, which is comprised of executive and senior leadership from a variety of functional areas, meets quarterly to set, implement, monitor, and communicate our CR strategy and related initiatives. CR objectives are included as part of our executive officers' goals and the achievement of such goals impacts the individual performance portion of their compensation.
We provide comprehensive CR disclosures, prepared in alignment with standards from the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures and with reference to the Global Reporting Initiative's Sustainability Reporting Standard, and we are a GRESB participant.
•Environmental Responsibility: We recognize that climate change could have an impact on our Portfolio and the communities we serve. We released our Climate Change Policy in 2021, and committed to achieving net zero carbon emissions by 2045 for areas under our operational control. As a signatory of the Science Based Targets initiative ("SBTi"), aligned with the 1.5 degree Celsius pathway, we are also committed to reducing our Scope 1 and 2 emissions by 50% by 2030, as compared to a 2018 baseline, for areas under our operational control. As of December 31, 2022, improvements in energy efficiency and the addition of renewable energy sources to our properties have resulted in an approximately 40% reduction against this interim SBTi goal.
In addition, we continue to make meaningful progress towards achieving our long-term sustainability goals related to energy efficiency projects such as LED lighting conversions and equipment upgrades, on-site renewable energy projects such as solar panel installations, and water conservation projects such as smart irrigation and xeriscaping.
•Human Capital: As of December 31, 2023, we had 513 employees, including 510 full-time employees. Our talented and dedicated employees are the foundation of our success. Together, we strive to promote a culture that is supportive, collaborative, and inclusive, and that provides opportunities for both personal and professional growth. We empower our employees to think and act like owners in order to create value for all stakeholders. We believe this approach enables us to attract and retain diverse and talented professionals while fostering collaborative, skilled, and motivated teams. The pillars of our human capital strategy are:
•Engagement: We believe that employees that are personally engaged in our vision to be the center of the communities we serve and are connected with similarly engaged colleagues will be more effective in their roles. We measure employee engagement through biennial employee engagement surveys and utilize the results from such surveys to continually improve our organization, enhancing benefits and various other forms of support based on employee feedback. Our engagement and connectivity initiatives have contributed to our 99% employee satisfaction score and 100% participation in annual performance reviews and talent development discussions.
•Growth and Development: We encourage our employees to grow and develop their interests, skills, and passions by providing a variety of professional and personal training opportunities. Our annual talent development process is intended to provide a well-rounded perspective on individual performance by recognizing employee strengths, identifying opportunities for growth, and developing actionable plans for professional development. We foster employee growth by providing: comprehensive training programs; innovative development programs, such as two-year intensive apprenticeship programs for entry level employees in leasing, property management, and construction; mentorship programs for early career professionals; Predictive Index Behavioral Assessments to
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enhance self-awareness and effective collaboration; educational assistance for tuition and professional licensure; and personal development accounts, which provide time off and expense reimbursement for a personal or professional development activity chosen by the employee.
•Health and Well-being: Our commitment to the health and well-being of our employees is a crucial component of our culture. We provide a wide-range of employee benefits and encourage healthy lifestyles through initiatives such as annual wellness spending accounts; free access to online wellness applications; live wellness events; health-oriented employee competitions; free access to licensed counselors, financial advisors, legal specialists, and other professionals; and hybrid work schedules to maximize engagement, collaboration, and efficiency, while supporting a healthy work-life balance.
•Inclusive Culture: We believe our performance is enhanced by an inclusive environment that reflects the diversity of the communities we serve. We believe a culture based on inclusion is critical to our ability to attract and retain talented employees and to deliver on our strategic goals and objectives.
For more information on our CR strategy, goals, performance, and achievements, please visit our CR page at https://www.brixmor.com/corporate-responsibility. Information on our website is not incorporated by reference herein and is not a part of this Annual Report on Form 10-K.
Tenants
Our national portfolio is thoughtfully merchandised with non-discretionary and value-oriented retailers, as well as consumer-oriented service providers, and is home to a broad mix of national and regional tenants and local entrepreneurs. As of December 31, 2023, we had over 5,000 diverse tenants in our portfolio, including many vibrant new retailers added over the past several years, and approximately 75% of our properties were anchored by a grocer.
See “Item 2. Properties” for further information on our 20 largest tenants.
Compliance with Government Regulations
We are subject to federal, state, and local regulations, including environmental regulations that apply generally to the ownership of, and the operations conducted on, real property. As of December 31, 2023, we are not aware of any environmental conditions or material costs of complying with environmental or other government regulations that would have a material adverse effect on our overall business, financial condition, or results of operations. However, it is possible that we are not aware of, or may become subject to, potential environmental liabilities or material costs of complying with government regulations that could be material. See “Environmental conditions that exist at some of the properties in our Portfolio could result in significant unexpected costs” and “Compliance with the Americans with Disabilities Act, environmental laws, and fire, safety and other regulations may require us to make expenditures that would adversely affect our financial condition, operating results, and cash flows” in Item 1A. “Risk Factors” for further information regarding our risks related to government regulations.
Financial Information about Industry Segments
Our principal business is the ownership and operation of open-air retail shopping centers. We do not distinguish our principal business or group our operations on a geographical basis for purposes of measuring performance. Accordingly, we have a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles ("GAAP").
REIT Qualification
We have been organized and operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws commencing with our taxable year ended December 31, 2011, have maintained such requirements through our taxable year ended December 31, 2023, and intend to satisfy such requirements for subsequent taxable years. As a REIT, we generally will not be subject to U.S. federal income tax on net taxable income that we distribute annually to our stockholders. In order to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the real estate qualification of sources of our income, the composition and value of our assets, the amounts we distribute to our stockholders, and the diversity of ownership of our stock. In order to comply with REIT requirements, we may need to forgo otherwise attractive opportunities or limit the manner in which we conduct our operations. See “Risks Related to our REIT Status and Certain Other Tax Items” in Item 1A. “Risk Factors” for further information.
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Executive Officers
As of the date of filing this Form 10-K, our executive officers included the following:
Name
Position
Year Joined(1)
Age
James M. Taylor
Chief Executive Officer ("CEO") and President
2016
57
Steven T. Gallagher
Senior Vice President, Chief Accounting Officer and Interim Chief Financial Officer ("CFO") and Treasurer
Executive Vice President, General Counsel and Secretary
1991
63
(1)Includes predecessors of Brixmor Property Group Inc.
Corporate Headquarters
Brixmor Property Group Inc., a Maryland corporation, was incorporated in 2011. The Operating Partnership, a Delaware limited partnership, was formed in 2011. Our principal executive offices are located at 450 Lexington Avenue, New York, New York 10017, and our telephone number is (212) 869-3000.
Our website address is https://www.brixmor.com. Information on our website is not incorporated by reference herein and is not a part of this Annual Report on Form 10-K. We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with or furnished to the SEC. We also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act. You may access these filings by visiting “SEC Filings” under the “Financial Info” section of the “Investors” portion of our website. In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information for issuers, such as us, that file electronically with the SEC at https://www.sec.gov.
Financial and other material information regarding our company is routinely posted on and accessible at the “Investors” portion of our website at https://www.brixmor.com. Investors and others should note that we use our website as a channel of distribution of material information to our investors. Therefore, we encourage investors and others interested in our company to review the information we post on the “Investors” portion of our website. In addition, you may enroll to automatically receive e-mail alerts and other information about our company by visiting “Email Alerts” under the “Additional Info” section of the “Investors” portion of our website.
Dividend Reinvestment & Direct Stock Purchase Plan
Our registrar and stock transfer agent is Computershare Trust Company, N.A. We offer a Dividend Reinvestment and Direct Stock Purchase Plan, providing shareholders and new investors with a simple and convenient method of investing in additional shares of common stock without payment of transaction or processing fees, service charges, or other expenses. Plan inquiries may be directed to (877) 373-6374, or (781) 575-2879 if located outside the U.S. and Canada.
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Item 1A. Risk Factors
Risks Related to Our Portfolio and Our Business
Adverse economic, market, and real estate conditions may adversely affect our financial condition, operating results, and cash flows.
Our Portfolio is predominantly comprised of community and neighborhood shopping centers. Our performance is, therefore, subject to risks associated with owning and operating these types of real estate assets. See “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K for the factors that could affect our rental income and/or property operating expenses and therefore adversely affect our financial condition, operating results, and cash flows.
Recent significant increases in inflation and interest rates could adversely affect us and our tenants.
Inflation has significantly increased over the last three years and may continue to be elevated or increase further. The efforts of the Federal Reserve to combat inflation have led to significant increases in interest rates. These increases have resulted in higher operating and incremental borrowing costs for us and our tenants. Although the terms of our leases, the duration of our indebtedness, and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases, the degree and pace of these changes have had and may continue to have impacts on our business, including as a result of increased financing costs when we refinance our indebtedness, and a potential economic recession, which may lead to higher levels of unemployment and decreases in consumer confidence and/or discretionary spending.
Public health crises could materially and adversely affect our financial condition, operating results, and cash flows.
A future public health crisis could have repercussions across domestic and global economies and financial markets. Government responses to such crises, including quarantines, may force our tenants to temporarily close stores, reduce hours, or significantly limit service which may result in significant economic contractions and a dramatic increase in national unemployment. The direct and indirect impacts of these crises could adversely affect our financial condition, operating results, and cash flows.
We may be required to make rent or other concessions and/or incur significant capital expenditures to retain existing tenants or attract new tenants.
There are numerous shopping venues, including regional malls, outlet malls, other shopping centers, and e-commerce, which compete with our Portfolio in attracting and retaining retailers. As of December 31, 2023, leases are scheduled to expire in our Portfolio on a total of approximately 9.3% of leased GLA during 2024. We may not be able to renew or promptly re-lease expiring space and even if we do renew or re-lease such space, future rental rates may be lower than current rates and other terms may not be as favorable. In addition, we may be required to incur significant capital expenditures in order to retain existing tenants or attract new tenants. In these situations, our financial condition, operating results, and cash flows could be adversely impacted.
Our active value-enhancing reinvestment program subjects us to risks that could adversely affect our financial condition, operating results, and cash flows.
In order to maintain the attractiveness of our Portfolio to retailers and consumers, we actively reinvest in our assets in the form of repositioning and redevelopments projects. In addition to the risks associated with real estate investments in general, as described elsewhere, the risks associated with repositioning and redevelopment projects include: (1) delays or failures in obtaining necessary zoning, occupancy, land use, and other governmental permits; (2) abandonment of projects after expending resources to pursue such opportunities; (3) cost overruns; (4) construction delays; and (5) failure to achieve expected occupancy and/or rent levels within the projected time frame, if at all. If we fail to reinvest in our Portfolio or maintain its attractiveness to retailers and consumers, if our capital improvements are not successful, or if retailers and consumers perceive that shopping at other venues (including e-commerce) is more convenient, cost-effective, or otherwise more compelling, our financial condition, operating results, and cash flows could be adversely impacted.
Significant retailer distress across our Portfolio could adversely affect our financial condition, operating results, and cash flows.
Our income is substantially comprised of rental income from tenants in our Portfolio. Our income would be adversely affected if a significant number of our tenants failed to make rental payments when due as a result of
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either operating challenges or disruptions in credit markets that adversely affect the ability of our tenants to obtain financing on favorable terms or at all. If our tenants are unable to meet their rental obligations, renew leases, or enter into new leases with us, our financial condition, operating results, and cash flows could be adversely impacted.
In certain circumstances, a tenant may have a right to terminate their lease. For example, a failure by an anchor tenant to occupy their leased premises could potentially trigger lease termination rights or reductions in rent due from certain other tenants in that shopping center. In the event of such lease terminations, we cannot be certain that we will be able to re-lease space on similar or economically advantageous terms. The loss of rental income from a significant number of tenants and difficulty in replacing such tenants could adversely affect our financial condition, operating results, and cash flows.
We may be unable to collect outstanding balances and/or future contractual rents due from tenants that file for bankruptcy protection.
When a tenant files for bankruptcy protection, we may not be able to collect amounts owed to us by that party prior to the bankruptcy filing. In addition, after filing for bankruptcy protection, a tenant may terminate any or all of its leases with us, which would result in a general unsecured claim against such tenant that would likely be worth less than the full amount owed to us over the remainder of the lease term. In these situations, we cannot be certain that we will be able to re-lease such space on similar or economically advantageous terms, which could adversely affect our financial condition, operating results, and cash flows.
Our expenses may remain constant or increase, even if income from our Portfolio decreases.
Costs associated with our business, such as common area expenses, utilities, insurance, real estate taxes, and corporate expenses, are relatively inflexible and generally do not decrease due to vacancy, decreasing rental rates, rent collection issues, or other circumstances that may cause our revenues to decrease. In addition, inflation has and could continue to result in higher operating costs. If we are unable to lower our operating costs when revenues decline and/or are unable to fully pass along cost increases to our tenants, our financial condition, operating results, and cash flows could be adversely impacted.
Our real estate investments are relatively illiquid and we may not be able to dispose of assets in a timely manner, on favorable terms, or at all.
Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers, and we cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future. We may be required to expend funds to correct defects or to make capital improvements before a property can be sold and we cannot be certain that we will have the funds available to make such capital improvements; therefore, we may be unable to sell a property on favorable terms or at all. In addition, the ability to sell assets in our Portfolio may also be restricted by certain covenants in our debt agreements, such as the credit agreement governing our Unsecured Credit Facility. As a result, we may be unable to realize our investment objectives through dispositions, which could adversely affect our financial condition, operating results, and cash flows.
Our real estate assets may be subject to impairment charges.
We periodically assess whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of our real estate assets (including any related intangible assets or liabilities) may be impaired. A property’s value is considered to be impaired only if the estimated aggregate future undiscounted and unleveraged property operating cash flows, taking into account the anticipated probability-weighted hold period, are less than the carrying value of the property. Impairment charges have an immediate direct impact on our earnings. We have taken impairment charges on certain of our assets in the past and there can be no assurance that we will not take additional charges in the future. Any future impairment could have an adverse effect on our operating results in the period in which the charge is recognized.
We face competition in pursuing acquisition opportunities, which could increase the cost of such acquisitions and/or limit our ability to grow. To the extent that we are able to complete acquisitions, we may not be able to generate expected returns or successfully integrate such acquisitions into our existing operations.
We continue to evaluate the market for potential acquisitions and we may acquire properties when we believe strategic opportunities exist. Our ability to acquire properties on favorable terms and successfully integrate, operate, reposition, or redevelop such properties is subject to several risks. We may be unable to acquire desired properties
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because of competition from other real estate investors, including from other well-capitalized REITs and institutional investment funds. Even if we are able to acquire desired properties, competition from such investors may significantly increase the price we must pay. In certain circumstances, we may abandon acquisition activities after expending significant resources to pursue such opportunities. Once we acquire new properties, these properties may not yield expected returns for several reasons, including: (1) failure to achieve expected occupancy and/or rent levels within the projected time frame, if at all; (2) inability to successfully integrate new properties into existing operations; and (3) fluctuations in the general economy, including due to the time lag between signing definitive documentation to acquire a new property and the closing of the acquisition. If any of these events occur, our financial condition, operating results, and cash flows could be adversely impacted.
We utilize a significant amount of indebtedness in the operation of our business. Required debt service payments and other risks related to our debt financing could adversely affect our financial condition, operating results, and cash flows.
As of December 31, 2023, we had approximately $4.9 billion aggregate principal amount of indebtedness outstanding. Our indebtedness could have important consequences to us. For example, it could (1) require us to dedicate a substantial portion of our cash flow to principal and interest payments, reducing the cash flow available to fund our business, pay dividends, including those necessary to maintain our REIT qualification, or use for other purposes; (2) increase our vulnerability to an economic downturn or various competitive pressures, as debt payments are not reduced if the economic performance of any property, or the Portfolio as a whole, deteriorates; and (3) limit our flexibility to respond to changing business and economic conditions. Since 2022, interest rates have been significantly higher than in recent years, and as a result we could face increased debt service costs when we refinance our indebtedness in the future. In addition, non-compliance with the terms of our debt agreements could result in the acceleration of a significant amount of indebtedness and could materially impair our ability to borrow unused amounts under existing financing arrangements or to obtain additional financing on favorable terms or at all. Any of these outcomes could adversely affect our financial condition, operating results, and cash flows.
Our variable rate indebtedness subjects us to interest rate risk, and an increase in our debt service obligations may adversely affect our financial condition, operating results, and cash flows.
Since 2022, interest rates have been significantly higher than in recent years. As of December 31, 2023, $500.0 million of borrowings under our Term Loan Facility and $18.5 million of borrowings under our Revolving Facility bear interest at variable rates. In addition, we had $1.23 billion of available liquidity under our Revolving Facility which would bear interest at variable rates upon borrowing. When interest rates increase, our debt service obligations on the variable rate indebtedness increase even though the amount borrowed remains the same, and our net income and cash flows correspondingly decrease. In order to partially mitigate our exposure to interest rate risk, we have entered into interest rate swap agreements on $500.0 million of our variable rate debt, which involve the exchange of variable for fixed rate interest payments. Taking into account our current interest rate swap agreements, a 100 basis point increase in interest rates would result in a $0.2 million increase in annual interest expense.
We may be unable to obtain additional capital through the debt and equity markets on favorable terms or at all.
As a REIT, we must annually distribute at least 90% of our REIT taxable income to our stockholders. As a result, we depend on internally generated free cash flow, proceeds from asset sales, and capital raises in the debt and equity markets to fund our business. Our access to external capital depends upon several factors, including general market conditions, our current and potential future earnings, the market’s perception of our growth potential, our liquidity and leverage ratios, and our cash distributions. Additionally, since 2022, interest rates have been significantly higher than in recent years. Increased interest rates negatively affect our ability to efficiently refinance our outstanding debt. Consequently, we cannot provide assurance that we will be able to access the debt and equity capital markets on favorable terms or at all. Our inability to obtain debt or equity capital could result in the disruption of our ability to: (1) operate, maintain or reinvest in our Portfolio; (2) repay or refinance our indebtedness on or before maturity; (3) acquire new properties; or (4) dispose of some of our assets on favorable terms due to an immediate need for capital. As a result, our financial condition, operating results, and cash flows be adversely impacted.
Adverse changes in our credit rating could affect our borrowing ability and the terms of existing or new financing.
Our creditworthiness is rated by nationally recognized credit rating agencies. The credit ratings assigned are based on our operating performance, liquidity and leverage ratios, financial condition and prospects, and other factors viewed by the credit rating agencies as relevant to our industry. Our credit rating can affect our ability to access debt
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capital, as well as the terms of certain existing and potential future debt financings. Since we depend on debt financing to fund our business, an adverse change in our credit rating, including changes in our credit outlook, or even the initiation of a review of our credit rating that could result in an adverse change, could adversely affect our financial condition, operating results, and cash flows.
Covenants in our debt agreements could, under certain circumstances, result in an acceleration of our indebtedness.
Our debt agreements contain various financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur secured and unsecured debt. A breach of any of these covenants, if not cured within any applicable cure period, could result in a default and acceleration of certain of our indebtedness. If any of our indebtedness is accelerated prior to maturity, we may not be able to repay or refinance such indebtedness on favorable terms, or at all, which could adversely affect our financial condition, operating results, and cash flows.
An uninsured property loss or a loss that exceeds the limits of our insurance policies could result in a loss of our investment or revenue associated with those properties.
We carry comprehensive liability, fire, extended coverage, business interruption, and acts of terrorism insurance with policy specifications and insured limits customarily carried for similar properties. There are, however, certain types of losses, such as from hurricanes, tornadoes, floods, earthquakes, terrorism, or wars, where coverages are limited or deductibles may be higher. In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property on the premises due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination), and to obtain liability and property damage insurance policies at the tenant’s expense, kept in full force during the term of the lease. However, tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of an insured loss that is subject to a substantial deductible, we could lose all or part of the capital invested in, and anticipated revenue from, one or more properties, which could adversely affect our financial condition, operating results, and cash flows.
Environmental conditions that exist at some of the properties in our Portfolio could result in significant unexpected costs.
We are subject to federal, state, and local environmental regulations that apply generally to the ownership of, and the operations conducted on, real property. Under various federal, state, and local laws, ordinances, and regulations, we may be or become liable for the costs of removal or remediation of certain hazardous or toxic substances released on or in our properties or disposed of by us or our tenants, as well as certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). Such liability may be imposed whether or not we knew of, or were responsible for, the presence of these hazardous or toxic substances. As is the case with many community and neighborhood shopping centers, many of our properties had or have on-site dry cleaners and/or on-site gas stations, the prior or current use of which could potentially increase our environmental liability exposure. The costs of investigation and removal or remediation of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to lease such property, to borrow funds using such property as collateral, or to dispose of such property.
In addition, certain of our properties may contain asbestos-containing building materials ("ACBM"). Environmental laws require that ACBM be properly managed and maintained, and may impose fines and penalties on building owners or operators for failure to comply with these requirements. The laws also may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers.
Finally, we can provide no assurance that we are aware of all potential environmental liabilities or that the environmental studies performed by us have identified or will identify all material environmental conditions that may exist with respect to any of the properties in our Portfolio; that any previous owner, occupant, or tenant did not create any material environmental condition unknown to us; that our properties will not be affected by tenants or nearby properties or other unrelated third parties; or that changes in environmental laws and regulations will not result in additional environmental liabilities to us.
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Further information relating to recognition of remediation obligations in accordance with GAAP is discussed under the heading “Environmental matters” in Note 15 – Commitments and Contingencies to our Consolidated Financial Statements in this report.
Compliance with the Americans with Disabilities Act, fire, safety, environmental, and other regulations may require us to make expenditures that could adversely affect our financial condition, operating results, and cash flows.
All of the properties in our Portfolio are required to comply with the Americans with Disabilities Act ("ADA"). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements may necessitate the removal of access barriers and non-compliance could result in the imposition of fines by the U.S. government, awards of damages to private litigants, or both. We are continually assessing our Portfolio to determine our compliance with the current requirements of the ADA. We are required to comply with the ADA within the common areas of our Portfolio and we may not be able to pass on to our tenants the costs necessary to remediate any common area ADA issues, which could adversely affect our financial condition, operating results, and cash flows. In addition, we are required to operate the properties in compliance with fire, safety, and environmental regulations, building codes, and other regulations, as they may be adopted by governmental bodies and become applicable to our Portfolio. As a result, we may be required to make substantial capital expenditures to comply with, and we may be restricted in our ability to renovate or redevelop properties subject to, those requirements. Further, compliance with new or more stringent laws or regulations or stricter interpretations of existing laws may require us to make additional capital expenditures. For example, various federal, state, and local laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency, and waste management. These requirements could increase the costs of maintaining or improving the properties in our Portfolio and could also result in increased compliance costs or additional operating restrictions that could adversely impact the businesses of our tenants and their ability to pay rent, which could adversely affect our financial condition, operating results, and cash flows.
We and our tenants face risks relating to cybersecurity attacks that could cause the loss of confidential information or other business disruptions.
We rely extensively on information technology ("IT") systems to operate and manage our business and process transactions, and as a result, our business is at risk from, and may be impacted by, cybersecurity attacks. These attacks could include attempts to gain unauthorized access to our data and/or computer systems. Attacks may be undertaken by individuals or may be highly organized attempts by very sophisticated organizations. We employ a variety of measures to prevent, detect, and mitigate these threats; however, there is no guarantee that such efforts will be successful in preventing or mitigating a cybersecurity attack. A cybersecurity attack, such as a ransomware attack, could compromise the confidential information, including the personally identifiable information, of our employees, tenants, and vendors, disrupt the proper functioning of our networks, result in misstated financial reports or covenants under various financing agreements, and/or missed reporting deadlines, prevent us from properly monitoring our REIT qualification, result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space, or require significant management attention and resources to remedy any damages that result. A successful attack could also damage our reputation and result in significant remediation costs and potential litigation. Similarly, our tenants rely extensively on IT systems to process transactions and manage their businesses and thus are also at risk from, and may be impacted by, cybersecurity attacks, which could impact their ability to pay rent timely or at all. A cybersecurity attack experienced by us or one of our tenants that results in an interruption in business operations and/or a deterioration in reputation could adversely affect our financial condition, operating results, and cash flows. As of December 31, 2023, we have not had any material incidences involving cybersecurity attacks.
Further information relating to cybersecurity risk management is discussed in Item 1C. "Cybersecurity" in this report.
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The direct and indirect impact on us and our tenants from severe weather, flooding, and other effects of climate change, and the economic and reputational impacts of the transition to non-carbon based energy, could adversely affect our financial condition, operating results, and cash flows.
Our properties have been and may in the future be adversely impacted by flooding, wildfires, high winds and other effects of severe weather conditions that may be caused or exacerbated by climate change. These events have resulted in and may in the future result in property closures, property damage, and delays in value-enhancing reinvestment stabilizations, and may adversely impact the operations of our tenants. Even if these events do not directly impact our properties, they have impacted and may continue to impact us and our tenants through increases in insurance, energy or other costs. In addition, the ongoing transition to non-carbon based energy presents certain risks for us and our tenants, including risks related to high energy costs and energy shortages, among other things. Changes in laws or regulations, including federal, state, or local laws, relating to climate change could result in increased capital expenditures to improve the energy efficiency of our properties.
Risks Related to Our Organization and Structure
BPG’s board of directors may change significant corporate policies without stockholder approval.
BPG’s investment, financing, and dividend policies and our policies with respect to all other business activities, including strategy and operations, will be determined by BPG’s board of directors. These policies may be amended or revised at any time and from time to time at the discretion of BPG’s board of directors without a vote of our stockholders. BPG’s charter also provides that BPG’s board of directors may revoke or otherwise terminate our REIT election without the approval of BPG’s stockholders if it determines that it is no longer in BPG’s best interests to continue to qualify as a REIT. In addition, BPG’s board of directors may change BPG’s policies with respect to conflicts of interest, provided that such changes are consistent with applicable legal requirements. A change in any of these policies could have an adverse effect on our financial condition, operating results, and cash flows.
BPG’s board of directors may approve the issuance of stock, including preferred stock, with terms that may discourage a third party from acquiring us.
BPG’s charter permits its board of directors to authorize the issuance of stock in one or more classes or series. Our board of directors may also classify or reclassify any unissued stock and establish the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption of any such stock, which rights may be superior to those of our common stock. Thus, BPG’s board of directors could authorize the issuance of shares of a class or series of stock with terms and conditions that could have the effect of discouraging an unsolicited acquisition of us or a change of our control in which holders of some or a majority of BPG’s outstanding common stock may receive a premium for their shares over the then-current market price of our common stock.
The rights of BPG and BPG's stockholders to take action against BPG’s directors and officers are limited.
BPG’s charter eliminates the liability of BPG’s directors and officers to us and BPG’s stockholders for money damages to the maximum extent permitted under Maryland law. Under Maryland law and BPG’s charter, BPG’s directors and officers do not have any liability to BPG or BPG’s stockholders for money damages other than liability resulting from:
•the actual receipt of an improper benefit or profit in money, property, or services; or
•active and deliberate dishonesty by the director or officer that was established by a final judgment and is material to the cause of action adjudicated.
BPG’s charter authorizes, and BPG’s bylaws require, BPG to indemnify each of BPG’s directors and officers who is made a party to or witness in a proceeding by reason of his or her service in those capacities (or in a similar capacity at another entity at the request of BPG), to the maximum extent permitted under Maryland law, from and against any claim or liability to which such person may become subject by reason of his or her status as a present or former director or officer of BPG. In addition, BPG may be obligated to pay or reimburse the expenses incurred by BPG’s present and former directors and officers without requiring a preliminary determination of their ultimate entitlement to indemnification. As a result, BPG and BPG’s stockholders may have more limited rights to recover money damages from BPG’s directors and officers than might otherwise exist absent these provisions in BPG’s charter and bylaws or that might exist with other companies, which could limit the recourse of stockholders.
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BPG’s charter contains a provision that expressly permits BPG’s non-employee directors to compete with us.
BPG’s charter provides that, to the maximum extent permitted under Maryland law, BPG renounces any interest or expectancy that BPG has in, or any right to be offered an opportunity to participate in, any business opportunities that are from time to time presented to or developed by BPG’s directors or their affiliates, other than to those directors who are employed by BPG or BPG’s subsidiaries, unless the business opportunity is expressly offered or made known to such person in his or her capacity as a director. Non-employee directors or any of their affiliates will not have any duty to communicate or offer such transaction or business opportunity to us or to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business in which we or our affiliates engage or propose to engage. These provisions may deprive us of opportunities which we may have otherwise wanted to pursue.
BPG’s charter provides that, to the maximum extent permitted under Maryland law, each of BPG’s non-employee directors, and any of their affiliates, may:
•acquire, hold, and dispose of shares of BPG’s stock or OP Units for his or her own account or for the account of others, and exercise all of the rights of a stockholder of Brixmor Property Group Inc. or a limited partner of our Operating Partnership, to the same extent and in the same manner as if he, she, or they were not BPG’s director or stockholder; and
•in his, her, or their personal capacity or in his, her, or their capacity as a director, officer, trustee, stockholder, partner, member, equity owner, manager, advisor, or employee of any other person, have business interests and engage, directly or indirectly, in business activities that are similar to ours or compete with us, that involve a business opportunity that we could seize and develop or that include the acquisition, syndication, holding, management, development, operation, or disposition of interests in mortgages, real property, or persons engaged in the real estate business.
Risks Related to our REIT Status and Certain Other Tax Items
If BPG does not maintain its qualification as a REIT, it will be subject to tax as a regular corporation and could face a substantial tax liability.
BPG intends to continue to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). However, qualification as a REIT involves the application of highly technical and complex Code provisions for which only a limited number of judicial or administrative interpretations exist. Notwithstanding the availability of cure provisions in the Code, BPG could fail to meet various compliance requirements, which could jeopardize its REIT status. Furthermore, new tax legislation, administrative guidance, or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for BPG to qualify as a REIT.
If BPG fails to qualify as a REIT in any taxable year and BPG is not entitled to relief under applicable statutory provisions:
•BPG would be taxed as a non-REIT “C” corporation, which under current laws, among other things, means being unable to deduct dividends paid to stockholders in computing taxable income and being subject to U.S. federal income tax on its taxable income at regular corporate income tax rates, which would reduce BPG’s cash flows and funds available for distribution to stockholders; and
•BPG would be disqualified from taxation as a REIT for the four taxable years following the year in which it failed to qualify as a REIT.
The Internal Revenue Service ("IRS"), the U.S. Treasury Department, and Congress frequently review U.S. federal income tax legislation, regulations, and other guidance. BPG cannot predict whether, when, or to what extent new U.S. federal tax laws, regulations, interpretations, or rulings will be adopted. Any legislative action may prospectively or retroactively modify BPG’s tax treatment and, therefore, may adversely affect taxation of BPG or BPG’s stockholders. Stockholders should consult with their tax advisors with respect to the status of legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in BPG’s stock.
Complying with REIT requirements may force BPG to liquidate or restructure investments or forgo otherwise attractive investment opportunities, and/or may discourage BPG from disposing of certain assets.
In order to qualify as a REIT, BPG must satisfy various requirements relating to the types of assets it holds and the nature of its income. In order to satisfy these technical requirements, BPG may be required to liquidate from its
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portfolio, or contribute to a taxable REIT subsidiary, otherwise attractive investments in order to maintain its qualification as a REIT. These actions could reduce BPG’s income and amounts available for distribution to its stockholders.
In addition, the REIT provisions of the Code impose a 100% tax on income from “prohibited transactions.” Prohibited transactions generally include sales of assets, other than foreclosure property, that constitute inventory or other property held for sale to customers in the ordinary course of business. Although BPG does not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of business, unless a sale or disposition qualifies under certain statutory safe harbors, such characterization is a factual determination and no guarantee can be given that the IRS would agree with BPG’s characterization of its properties or that BPG will be able to make use of the otherwise available safe harbors. The resulting 100% tax could affect BPG’s decisions to sell certain properties if it believes such sales could be treated as prohibited transactions. However, BPG would not be subject to this tax if it were to sell such assets through a taxable REIT subsidiary, instead incurring tax on the asset sale at regular corporate tax rates.
BPG’s charter does not permit any person to own more than 9.8% of BPG’s outstanding common stock or of BPG’s outstanding stock of all classes or series, and attempts to acquire BPG’s common stock or BPG’s stock of all classes or series in excess of these limits would not be effective without an exemption from these limits by BPG’s board of directors.
For BPG to qualify as a REIT under the Code, not more than 50% of the value of BPG’s outstanding stock may be owned directly or indirectly by five or fewer individuals (including certain entities treated as individuals for this purpose) during the last half of a taxable year. For the purpose of assisting BPG’s qualification as a REIT for U.S. federal income tax purposes, among other purposes, BPG’s charter prohibits beneficial or constructive ownership by any individual of more than a certain percentage, currently 9.8%, in value or by number of shares, whichever is more restrictive, of the outstanding shares of BPG’s common stock or 9.8% in value of the outstanding shares of BPG’s capital stock, which BPG refers to as the “ownership limit.” The constructive ownership rules under the Code and BPG’s charter are complex and may cause shares of the outstanding common stock owned by a group of related individuals to be deemed to be constructively owned by one individual. As a result, the acquisition of less than 9.8% of BPG’s outstanding common stock or BPG’s capital stock by an individual could cause the individual to own constructively in excess of 9.8% of BPG’s outstanding common stock or BPG’s capital stock, respectively, and thus violate the ownership limit. Any attempt to own or transfer shares of BPG’s stock in excess of the ownership limit without an exemption from BPG’s board of directors will result either in the shares in excess of the limit being transferred by operation of the charter to a charitable trust or the original transfer being void, and the individual who attempted to acquire such excess shares will not have any rights in such excess shares. In addition, there can be no assurance that BPG’s board of directors, as permitted in the charter, will not decrease this ownership limit in the future.
The ownership limit may have the effect of precluding a change in control of BPG by a third party, even if such change in control would be in the best interests of BPG’s stockholders or would result in BPG’s stockholders receiving a premium for their shares over the then-current market price of BPG’s common stock, and even if such change in control would not reasonably jeopardize BPG’s REIT status.
BPG may choose to make distributions in BPG’s own stock, in which case stockholders may be required to pay income taxes without receiving any cash dividends.
In connection with BPG’s qualification as a REIT, BPG is required to annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. Although it does not currently intend to do so, in order to satisfy this requirement, BPG is permitted, subject to certain conditions and limitations, to make distributions that are in whole or in part payable in shares of BPG’s stock. Taxable stockholders receiving such distributions will be required to include a portion, if not all, of such distributions as ordinary dividend income. As a result, stockholders may be required to pay income taxes with respect to such distributions in excess of the cash portion of the distribution received and may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. In addition, if a significant number of BPG’s stockholders elect to sell shares of BPG’s stock in order to pay taxes owed on dividend income, such sales may put downward pressure on the market price of BPG’s stock.
14
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Given the critical importance of cybersecurity, including data privacy, we believe we have developed a comprehensive cybersecurity program, supported by robust risk management and oversight procedures. We are committed to implementing leading data protection standards and have a comprehensive set of written policies and standards that take into account the guidance of industry-standard cybersecurity frameworks.
Management and Board Oversight
We have dedicated cybersecurity resources led by our Chief Information Officer ("CIO"), who regularly provides reports to our executive officers, including the CEO and CFO. Our CIO has over 20 years of experience in the cybersecurity and IT fields and holds multiple degrees, including a Bachelor of Science in Information Science and a Master of Business Administration. Additionally, our CIO is a Certified Information Security Manager.
We have developed a cybersecurity incident response plan ("CSIRP") for cybersecurity incidents that may jeopardize the confidentiality, integrity, or availability of our IT systems. Our CSIRP guides the internal response to cybersecurity incidents, following a process that generally aligns with the industry-standard cybersecurity frameworks. Pursuant to the CSIRP and its escalation protocols, we engage the incident response team ("IRT"), which includes designated personnel responsible for: (1) analyzing the severity of the incident and associated threat; (2) notifying management of the threat; (3) containing the threat; (4) eradicating the threat; (5) restoring data and access to systems; (6) working with management to determine the reporting and disclosure obligations associated with the incident; and (7) performing post-incident analysis and improvements. The IRT is led by an incident response coordinator, which in the event of a cybersecurity incident would generally be the CIO, and includes members of our IT resources, risk management, legal, communications, finance, and accounting teams, in addition to any other necessary personnel depending on the particular facts and circumstances of the incident. When a cybersecurity incident is detected, the incident response coordinator notifies relevant members of management, as appropriate and consistent with the escalation protocols of the CSIRP, such as the CEO, CFO, and General Counsel, and provides an assessment of the incident and containment strategy, if applicable.
We consider cybersecurity as part of our broader consideration of business strategy and risk management. Our board of directors has delegated to the Audit Committee the responsibility of overseeing our risk management program, including risk assessment, risk management, and risk mitigation policies and programs. A key part of this responsibility is overseeing the cybersecurity program. The Audit Committee receives quarterly updates from our CIO with respect to the cybersecurity program, including current threat levels and ongoing program enhancements. The Audit Committee oversees our compliance with the industry-standard cybersecurity frameworks, our cybersecurity insurance coverage, cybersecurity-related internal controls, penetration testing, the CSIRP, business continuity plans, and threat assessments. The Audit Committee also periodically evaluates our cyber strategy to ensure its effectiveness, including benchmarking against our peers.
Processes for Assessing, Identifying, and Managing Material Risks from Cybersecurity Threats
Our cybersecurity program has four components: (1) preparation and prevention; (2) detection and analysis; (3) incident response including containment, eradication, recovery, and reporting; and (4) post-incident analysis and program enhancements.
Preparation and Prevention
We utilize a variety of tools, processes, software, and hardware that are managed and monitored by our IT resources and third-party vendors, as applicable, to prevent and prepare for cybersecurity threats. We conduct regular internal and external security audits and vulnerability assessments to reduce the risk of a cybersecurity incident and we implement business continuity, contingency, and recovery plans to mitigate the impact of an incident. As part of these efforts, we engage a third party to conduct penetration testing and an external review of our vulnerabilities. We continue to strengthen access management mechanisms including broad adoption of multi-factor authentication, geolocation-based blocking, and network segmentation. To support our preparedness, we perform tabletop exercises at least once a year to test our CSIRP.
15
We recognize that threat actors frequently target employees to gain unauthorized access to information systems. Therefore, a key element of our prevention efforts is comprehensive employee training to recognize and respond to cybersecurity threats. All new hires receive mandatory privacy and information security training. Employees must also complete mandatory ongoing annual cybersecurity and data trainings, which are supplemented throughout the year by regular phishing and other cyber-related testing. Additionally, we conduct specialized training for our high-risk employees on an annual basis and specialized training for employees with access to certain sensitive information systems. These trainings and tests are tracked throughout the year for each employee and are directly tied to their overall compensation.
We recognize that our third-party vendors can be subject to cybersecurity incidents which may impact us. To mitigate third-party risk, vendor access to network resources is reviewed, authorized, and monitored by our IT resources, including requirements for our third-party vendors’ cybersecurity, estimated termination dates for network access, and regular reviews of all third-party vendor accounts and after access is granted, it is managed through various security tools. Third-party IT vendors are also subject to additional diligence such as questionnaires, inquiries, and relevant certifications.
Detection and Analysis
Cybersecurity incidents may be detected through a variety of means and indicators, which may include, but are not limited to, alerts from customers, employees, vendors, service providers, other third parties, and/or automated event-detection notifications. Once a potential cybersecurity incident is identified, including a third-party cybersecurity event, the incident response coordinator follows the procedures pursuant to the CSIRP to investigate the potential incident, including classifying the nature and severity of the event (e.g. malware, ransomware, service interruption, denial of service, distributed denial of service, personal data breach, intellectual property breach, theft, or fraud) and sensitivity of any compromised data.
Containment, Eradication, Recovery, and Reporting
With every cybersecurity incident, the highest priority for the IRT is to contain the cybersecurity incident as quickly as possible. A cybersecurity incident is considered contained when the attacker’s ability to affect the network resources has been effectively controlled or stopped, the affected system(s) have been identified, and compromised data, memory image, and disks have been collected for analysis. The IRT is responsible for deciding on a containment strategy to respond to the cybersecurity incident, coordinating resources, and communicating to management with subsequent notification to the Audit Committee, if warranted.
The IRT also directs and coordinates eradication and recovery efforts. Eradication and recovery activities depend on the nature of the cybersecurity incident, which may include, but are not limited to, rebuilding systems and/or hosts, replacing compromised files with clean versions, validation of files or data that may have been affected, increased network monitoring or logging to identify recurring attacks, or employee re-training.
Containment, eradication, and recovery may be aided by third-party vendors or investigators. The incident response coordinator, in consultation with the IRT and management, will engage all third parties involved in the incident.
Our CSIRP provides clear communication protocols, including with respect to members of management, including the members of the IRT, CEO, CFO, CIO, General Counsel, Audit Committee, and external counsel, particularly with respect to legal obligations to report the incident to tenants, regulators, and law enforcement and, if applicable, our SEC reporting obligations.
Post-Incident Activity
After recovery, the IRT gathers and preserves all incident-related documentation and conducts a post-incident analysis to identify and implement enhancements to the cybersecurity program that can mitigate the risk and/or severity of future incidents. The results of these reviews are shared with management and the Audit Committee. The incident response coordinator typically oversees the preparation of the formal incident report, its distribution, and the implementation of any enhancements identified through these reviews.
Cybersecurity Risks
As of December 31, 2023, we have not had any material incidences involving cybersecurity attacks. However, we face risks associated with security breaches, whether through cyber-attacks or cyber-intrusions over the Internet,
16
ransomware and other forms of malware, computer viruses, attachments to emails, phishing attempts, or other scams. Although we make efforts to maintain the security and integrity of our networks and systems including the proprietary, confidential, and personal information that resides on or is transmitted through them, and we have implemented various cybersecurity policies and procedures to manage the risk of a security incident or disruption. However, there can be no assurance that our cybersecurity efforts and measures will be effective or that attempted cybersecurity incidents or disruptions would not be successful or damaging. See “We and our tenants face risks relating to cybersecurity attacks that could cause the loss of confidential information or other business disruptions” in Item 1A. "Risk Factors" for further information relating to cybersecurity risks.
17
Item 2. Properties
As of December 31, 2023, our Portfolio was comprised of 362 shopping centers totaling approximately 64 million square feet of GLA. Our high-quality national Portfolio is primarily located within established trade areas in the top 50 CBSAs in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers. As of December 31, 2023, our three largest tenants by ABR were The TJX Companies, Inc., The Kroger Co., and Burlington Stores, Inc.
The following table summarizes our top 20 tenants, ranked by ABR, as of December 31, 2023 (dollars in thousands, except for PSF amounts):
Retailer
Owned Leases(1)
Leased GLA(1)
Percent of GLA(1)
ABR(1)
Percent of ABR(1)
ABR PSF(1)
The TJX Companies, Inc.
90
2,624,402
4.1
%
$
33,239
3.4
%
$
12.67
The Kroger Co.
44
2,994,662
4.6
%
22,712
2.3
%
7.58
Burlington Stores, Inc.
40
1,663,459
2.6
%
19,716
2.0
%
11.85
Dollar Tree Stores, Inc.
119
1,364,427
2.1
%
16,423
1.7
%
12.04
Publix Super Markets, Inc.
31
1,431,891
2.2
%
14,559
1.5
%
10.17
Ross Stores, Inc
43
1,110,510
1.7
%
13,946
1.4
%
12.56
L.A Fitness International, LLC
14
566,362
0.9
%
10,994
1.1
%
19.41
Five Below, Inc.
58
550,050
0.9
%
10,964
1.1
%
19.93
Amazon.com, Inc. / Whole Foods Market Services, Inc.
15
595,292
0.9
%
10,630
1.1
%
17.86
PetSmart, Inc.
28
607,653
0.9
%
10,381
1.1
%
17.08
Albertson's Companies, Inc
14
750,202
1.2
%
9,679
1.0
%
12.90
Ahold Delhaize
16
864,919
1.3
%
9,469
1.0
%
10.95
Ulta Beauty, Inc.
34
378,884
0.6
%
9,136
0.9
%
24.11
Kohl's Corporation
14
1,051,137
1.6
%
8,772
0.9
%
8.35
PETCO Animal Supplies, Inc.
35
480,017
0.7
%
8,544
0.9
%
17.80
Big Lots, Inc.
29
975,534
1.5
%
7,242
0.7
%
7.42
The Michaels Companies, Inc.
21
472,884
0.7
%
6,229
0.6
%
13.17
Best Buy Co., Inc.
11
413,875
0.6
%
5,261
0.5
%
12.71
Staples, Inc.
19
397,969
0.6
%
5,146
0.5
%
12.93
CVS Health
15
222,799
0.3
%
5,055
0.5
%
22.69
TOP 20 RETAILERS
690
19,516,928
30.0
%
$
238,097
24.2
%
$
12.20
(1) Includes only locations which are owned or guaranteed by the parent company. Excludes all franchise locations.
18
The following table summarizes the geographic diversity of our Portfolio by state, ranked by ABR, as of December 31, 2023 (dollars in thousands, expect for PSF amounts):
State
Number of Properties
GLA
Percent Billed
Percent Leased
ABR
ABR PSF
Percent of Number of Properties
Percent of GLA
Percent of ABR
1
Florida
49
8,439,815
91.5
%
96.5
%
$
136,003
$
17.07
13.5
%
13.1
%
14.0
%
2
Texas
48
7,404,115
88.2
%
93.7
%
113,092
17.07
13.3
%
11.5
%
11.7
%
3
California
28
5,179,959
92.6
%
97.0
%
111,685
23.98
7.7
%
8.0
%
11.6
%
4
Pennsylvania
24
4,328,200
89.4
%
94.6
%
68,316
20.52
6.6
%
6.7
%
7.1
%
5
New York
26
3,398,142
91.5
%
95.9
%
68,082
21.22
7.2
%
5.3
%
7.1
%
6
Illinois
16
4,219,418
83.5
%
87.9
%
55,701
15.37
4.4
%
6.5
%
5.7
%
7
New Jersey
16
2,821,891
94.6
%
96.2
%
47,386
18.53
4.4
%
4.4
%
5.0
%
8
Georgia
26
3,627,261
93.1
%
94.7
%
46,873
14.16
7.2
%
5.6
%
4.8
%
9
North Carolina
13
3,056,642
94.2
%
95.2
%
40,110
14.55
3.6
%
4.7
%
4.1
%
10
Michigan
15
2,804,178
87.5
%
95.3
%
36,681
14.33
4.1
%
4.4
%
3.8
%
11
Ohio
13
2,893,261
90.9
%
93.6
%
35,990
15.42
3.6
%
4.5
%
3.7
%
12
Tennessee
7
1,790,636
94.5
%
97.3
%
23,518
13.82
1.9
%
2.8
%
2.4
%
13
Colorado
7
1,590,065
90.9
%
94.4
%
22,622
16.01
1.9
%
2.5
%
2.3
%
14
Massachusetts
10
1,504,804
91.9
%
97.7
%
21,363
16.33
2.8
%
2.3
%
2.2
%
15
Connecticut
9
1,464,045
88.7
%
94.5
%
20,655
15.17
2.5
%
2.3
%
2.1
%
16
Kentucky
7
1,676,048
94.5
%
98.4
%
19,643
13.17
1.9
%
2.6
%
2.0
%
17
South Carolina
8
1,453,568
85.4
%
87.7
%
18,419
14.72
2.2
%
2.3
%
1.9
%
18
Minnesota
9
1,269,831
86.0
%
87.0
%
16,347
16.18
2.5
%
2.0
%
1.7
%
19
Indiana
5
1,204,891
94.6
%
98.2
%
14,932
12.73
1.4
%
1.9
%
1.5
%
20
New Hampshire
5
672,051
89.2
%
97.4
%
9,813
15.63
1.4
%
1.0
%
1.0
%
21
Virginia
5
735,614
94.6
%
94.9
%
9,450
14.82
1.4
%
1.1
%
1.0
%
22
Wisconsin
3
520,340
92.5
%
97.6
%
6,379
12.56
0.8
%
0.8
%
0.7
%
23
Maryland
2
371,986
98.8
%
98.8
%
6,240
17.52
0.6
%
0.6
%
0.6
%
24
Missouri
4
495,523
90.4
%
91.5
%
4,620
10.26
1.0
%
0.8
%
0.5
%
25
Alabama
1
410,401
91.5
%
91.7
%
4,273
11.63
0.3
%
0.6
%
0.4
%
26
Kansas
2
376,599
94.0
%
95.6
%
3,728
13.34
0.6
%
0.6
%
0.4
%
27
Vermont
1
223,314
88.5
%
98.6
%
2,251
10.23
0.3
%
0.3
%
0.2
%
28
Arizona
1
165,350
79.3
%
100.0
%
2,194
13.27
0.3
%
0.3
%
0.2
%
29
Maine
1
287,533
97.9
%
100.0
%
2,056
17.26
0.3
%
0.4
%
0.2
%
30
West Virginia
1
75,344
44.8
%
44.8
%
527
15.61
0.3
%
0.1
%
0.1
%
TOTAL
362
64,460,825
90.6
%
94.7
%
$
968,949
$
16.88
100.0
%
100.0
%
100.0
%
The following table summarizes certain information for our Portfolio by unit size, as of December 31, 2023 (dollars in thousands, expect for PSF amounts):
Number of Units
GLA
Percent of GLA
Percent Billed
Percent Leased
ABR
Percent of ABR
ABR PSF
≥ 35,000 SF
401
22,733,414
35.2
%
95.0
%
97.8
%
$
219,190
22.6
%
$
11.21
20,000 – 34,999 SF
491
12,812,019
19.9
%
90.7
%
95.3
%
147,803
15.3
%
12.22
10,000 – 19,999 SF
607
8,290,068
12.9
%
91.4
%
96.5
%
122,645
12.7
%
15.75
5,000 – 9,999 SF
1,108
7,661,299
11.9
%
85.9
%
91.8
%
143,111
14.8
%
21.19
< 5,000 SF
6,056
12,964,025
20.1
%
85.0
%
89.4
%
336,200
34.6
%
30.00
TOTAL
8,663
64,460,825
100.0
%
90.6
%
94.7
%
$
968,949
100.0
%
$
16.88
TOTAL ≥ 10,000 SF
1,499
43,835,501
68.0
%
93.1
%
96.8
%
$
489,638
50.6
%
$
12.41
TOTAL < 10,000 SF
7,164
20,625,324
32.0
%
85.3
%
90.3
%
479,311
49.4
%
26.69
19
The following table summarizes lease expirations for leases in place within our Portfolio for each of the next 10 calendar years and thereafter, assuming no exercise of renewal options and including the GLA of lessee-owned leasehold improvements, as of December 31, 2023:
Number of Leases
Leased GLA
% of Leased GLA
% of In-Place ABR
In-Place ABR PSF
ABR PSF at Expiration
M-M
214
611,355
1.0
%
1.0
%
$
16.40
$
16.40
2024
955
5,671,690
9.3
%
7.7
%
13.23
13.23
2025
1,078
7,780,769
12.7
%
11.9
%
14.77
14.86
2026
1,025
7,020,573
11.5
%
11.7
%
16.12
16.47
2027
1,012
8,190,140
13.4
%
13.0
%
15.39
15.88
2028
968
6,853,350
11.2
%
12.0
%
16.94
17.63
2029
648
6,765,006
11.1
%
10.0
%
14.38
15.67
2030
352
3,154,343
5.2
%
5.2
%
15.98
17.58
2031
306
2,685,993
4.4
%
4.6
%
16.56
18.67
2032
342
2,694,748
4.4
%
5.0
%
17.88
20.10
2033
427
3,368,756
5.5
%
6.4
%
18.34
20.84
2034+
541
6,253,437
10.3
%
11.5
%
17.83
21.05
More specific information with respect to each of our properties is set forth in Exhibit 99.1, which is incorporated herein by reference.
Leases
Our anchor tenants generally have leases with original terms ranging from 10 to 20 years and may or may not have renewal options for one or more additional periods. Smaller tenants typically have leases with original terms ranging from five to 10 years and may or may not have renewal options for one or more additional periods. Leases in our Portfolio generally provide for the payment of fixed monthly base rent. Certain leases also provide for the payment of additional rent based upon a percentage of the tenant’s gross sales above a predetermined threshold. Leases also generally provide for contractual increases in base rent over both the original lease term and any renewal option periods and the reimbursement of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties.
The foregoing general description of the characteristics of the leases of our Portfolio is not intended to describe all leases, and material variations in lease terms may exist.
Insurance
We have a wholly-owned captive insurance company, Brixmor Incap, LLC (“Incap”). Incap underwrites the first layer of general liability insurance for the properties in our Portfolio. We formed Incap as part of our overall risk management program to stabilize insurance costs, manage exposures, and recoup expenses through the function of the captive program. Incap is capitalized in accordance with the applicable regulatory requirements.
We also maintain commercial liability, fire, extended coverage, earthquake, business interruption, and rental loss insurance covering all of the properties in our Portfolio. We select coverage specifications and insured limits which we believe to be appropriate given the relative risk of loss, the cost of coverage, industry practice, and the nature of the shopping centers in our Portfolio. In addition, tenants are generally required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property on the premises due to activities conducted by tenants or their agents at the properties (including without limitation any environmental contamination), and to obtain liability and property damage insurance policies at the tenant’s expense, kept in full force during the term of the lease. In the opinion of our management, all of the properties in our Portfolio are currently adequately insured. We do not carry insurance for generally uninsured losses, such as losses from war. See “Risk Factors – Risks Related to Our Portfolio and Our Business – An uninsured property loss or a loss that exceeds the limits of our insurance policies could result in a loss of our investment or related revenue in those properties.”
20
Item 3. Legal Proceedings
The information contained under the heading “Legal Matters” in Note 15 – Commitments and Contingencies to our Consolidated Financial Statements in this report is incorporated by reference into this Item 3.
Item 4. Mine Safety Disclosures
Not applicable.
21
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
BPG’s common stock trades on the New York Stock Exchange under the trading symbol “BRX.” As of February 1, 2024, the number of holders of record of BPG’s common stock was 624. This figure does not represent the actual number of beneficial owners of BPG’s common stock because shares of BPG’s common stock are frequently held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares.
BPG has elected to qualify as a REIT in accordance with the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a REIT, BPG must meet several organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. Management intends to continue to satisfy these requirements and maintain BPG’s REIT status. As a REIT, BPG generally will not be subject to U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.
BPG’s future distributions will be at the sole discretion of BPG’s board of directors. When determining the amount of future distributions, we expect that BPG’s board of directors will consider, among other factors; (1) the amount of cash generated from our operating activities; (2) the amount of cash required for leasing and maintenance capital expenditures; (3) the amount of cash required for debt repayments, reinvestment activity, net acquisitions, and share repurchases; (4) the amount of cash required to be distributed to maintain BPG’s status as a REIT and to reduce any income and excise taxes that BPG otherwise would be required to pay; (5) any limitations on our distributions contained in our financing agreements, including, without limitation, in our Unsecured Credit Facility; (6) the sufficiency of legally-available assets; and (7) our ability to continue to access external sources of capital.
To the extent BPG is prevented, by provisions in our financing agreements or otherwise, from distributing 100% of BPG’s REIT taxable income, or otherwise does not distribute 100% of BPG’s REIT taxable income, BPG will be subject to income tax, and potentially excise tax, on the retained amounts. If our operations do not generate sufficient cash flow to allow BPG to satisfy the REIT distribution requirements, we may be required to fund distributions with working capital, additional indebtedness, or asset sales, or we may be required to reduce such distributions or make such distributions, in whole or in part, payable in shares of BPG’s stock. See Item 1A. “Risk Factors” for information regarding risk factors that could adversely affect our financial condition, operating results, and cash flows.
Distributions to the extent of the Company’s current and accumulated earnings and profits for federal income tax purposes will be taxable to stockholders as ordinary dividend income or capital gain income. Distributions in excess of taxable earnings and profits generally will be treated as non-taxable return of capital. Non-taxable return of capital distributions, to the extent that they do not exceed the stockholder’s adjusted tax basis in its common shares, have the effect of deferring taxation until the sale of the stockholder’s common shares. To the extent that distributions are both in excess of taxable earnings and profits and in excess of the stockholder’s adjusted tax basis in its common shares, the distributions will be treated as capital gains from the sale of common shares. For the taxable year ended December 31, 2023, 100.0% of the Company’s distributions to stockholders constituted taxable ordinary income. For the taxable year ended December 31, 2022, 100.0% of the Company’s distributions to stockholders constituted taxable ordinary income.
22
BPG’s Total Stockholder Return Performance
The following performance chart compares, for the period from December 31, 2018 through December 31, 2023, the cumulative total return of BPG’s common stock with the cumulative total return of the S&P 500 Index and the FTSE Nareit Equity Shopping Centers Index. All stockholder return performance assumes the reinvestment of dividends. The information in this paragraph and the following performance chart are deemed to be furnished, not filed.
Sales of Unregistered Equity Securities
There were no sales of unregistered equity securities during the year ended December 31, 2023.
Issuer Purchases of Equity Securities
In November 2022, we renewed our share repurchase program (the "Repurchase Program") for up to $400.0 million of our common stock. The Repurchase Program is scheduled to expire on November 1, 2025, unless suspended or extended by our board of directors. The Repurchase Program replaced our prior share repurchase program, which was scheduled to expire on January 9, 2023. During the three months and year ended December 31, 2023, we did not repurchase any shares of common stock. As of December 31, 2023, the Repurchase Program had $400.0 million of available repurchase capacity.
Item 6. [Reserved]
23
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto. Historical results and percentage relationships set forth in the Consolidated Financial Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations.
Executive Summary
Our Company
Brixmor Property Group Inc. and subsidiaries (collectively, "BPG") is an internally-managed corporation that has elected to be taxed as a real estate investment trust ("REIT"). Brixmor Operating Partnership LP and subsidiaries (collectively, the "Operating Partnership") is the entity through which BPG conducts substantially all of its operations and owns substantially all of its assets. BPG owns 100% of the limited liability company interests of BPG Subsidiary LLC ("BPG Sub"), which, in turn, is the sole member of Brixmor OP GP LLC (the "General Partner"), the sole general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, “we,” “our,” and “us” mean BPG and the Operating Partnership, collectively. We own and operate one of the largest publicly-traded open-air retail portfolios by gross leasable area ("GLA") in the United States ("U.S."), comprised primarily of community and neighborhood shopping centers. As of December 31, 2023, our portfolio was comprised of 362 shopping centers (the "Portfolio") totaling approximately 64 million square feet of GLA. Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers. As of December 31, 2023, our three largest tenants by annualized base rent ("ABR") were The TJX Companies, Inc. ("TJX"), The Kroger Co. ("Kroger"), and Burlington Stores, Inc. ("Burlington"). BPG has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws commencing with our taxable year ended December 31, 2011, has maintained such requirements through our taxable year ended December 31, 2023, and intends to satisfy such requirements for subsequent taxable years.
Our primary objective is to maximize total returns to our stockholders through consistent, sustainable growth in cash flow. Our key strategies to achieve this objective include proactively managing our Portfolio to drive internal growth, pursuing value-enhancing reinvestment opportunities, and prudently executing on acquisition and disposition activity, while also maintaining a flexible capital structure positioned for growth. In addition, as we execute on our key strategies, we do so guided by our purpose-driven Corporate Responsibility strategy.
We believe the following set of competitive advantages positions us to successfully execute on our key strategies:
•Expansive Retailer Relationships – We believe that the scale of our asset base and our nationwide footprint represent competitive advantages in supporting the growth objectives of the nation’s largest and most successful retailers. We believe that we are one of the largest landlords by GLA to TJX, Kroger, and Burlington, as well as a key landlord to most major grocers and retail category leaders. We believe that our strong relationships with leading retailers afford us unique insight into their strategies and priority access to their expansion plans.
•Fully-Integrated Operating Platform – We manage a fully-integrated operating platform, leveraging our national scope and demonstrating our commitment to operating with a strong regional and local presence. We provide our tenants with dedicated service through both our national accounts leasing team based in New York and our network of four regional offices in Atlanta, Chicago, Philadelphia and San Diego, as well as our 12 leasing and property management satellite offices throughout the country. We believe that this structure enables us to obtain critical national market intelligence, while also benefiting from the regional and local expertise of our leasing and operations teams.
•Experienced Management – Senior members of our management team are seasoned real estate operators with extensive public company leadership experience. Our management team has deep industry knowledge and well-established relationships with retailers, brokers, and vendors through many years of operational and transactional experience, as well as significant capital markets capabilities and expertise in executing value-enhancing reinvestment opportunities.
24
Factors That May Influence Our Future Results
We derive our rental income primarily from base rent and expense reimbursements paid by tenants to us under existing leases at each of our properties. Expense reimbursements primarily consist of payments made by tenants to us for a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties.
Our ability to maintain or increase rental income is primarily dependent on our ability to maintain or increase rental rates, renew expiring leases, and/or lease available space. Increases in our property operating expenses, including repairs and maintenance, landscaping, snow removal, security, ground rent related to properties for which we are the lessee, utilities, insurance, real estate taxes, and various other costs, to the extent they are not reimbursed by tenants or offset by increases in rental income, will adversely impact our overall performance. See “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K for additional information regarding risk factors that could affect our financial condition, operating results, and cash flows.
Leasing Highlights
As of December 31, 2023, billed and leased occupancy were 90.6% and 94.7%, respectively, compared to 90.2% and 93.8%, respectively, as of December 31, 2022.
The following table summarizes our executed leasing activity for the years ended December 31, 2023 and 2022 (dollars in thousands, except for per square foot ("PSF") amounts):
For the Year Ended December 31, 2023
Leases
GLA
New ABR PSF
Tenant Improvements and Allowances PSF
Third-Party Leasing Commissions PSF
Rent Spread(1)
New, renewal and option leases
1,653
10,169,163
$
18.34
$
4.93
$
2.34
15.3
%
New and renewal leases
1,431
6,327,403
22.02
7.92
3.76
19.3
%
New leases
577
2,981,298
21.92
14.51
7.90
40.0
%
Renewal leases
854
3,346,105
22.10
2.04
0.06
13.3
%
Option leases
222
3,841,760
12.27
—
—
7.7
%
For the Year Ended December 31, 2022
Leases
GLA
New ABR PSF
Tenant Improvements and Allowances PSF
Third-Party Leasing Commissions PSF
Rent Spread(1)
New, renewal and option leases
1,614
10,572,727
$
16.47
$
4.71
$
2.05
12.7
%
New and renewal leases
1,403
7,095,235
18.31
7.02
3.06
16.0
%
New leases
613
3,256,527
19.08
13.05
6.57
37.0
%
Renewal leases
790
3,838,708
17.66
1.91
0.08
11.1
%
Option leases
211
3,477,492
12.72
—
—
6.7
%
(1)Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal or option leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months.
Excludes leases executed for terms of less than one year.
ABR PSF includes the GLA of lessee-owned leasehold improvements.
Acquisition Activity
•During the year ended December 31, 2023, we acquired two land parcels for an aggregate purchase price of $2.3 million, including transaction costs and closing credits.
•During the year ended December 31, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.
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Disposition Activity
•During the year ended December 31, 2023, we disposed of 11 shopping centers and nine partial shopping centers for aggregate net proceeds of $182.0 million, resulting in aggregate gain of $65.3 million and aggregate impairment of $6.1 million. In addition, during the year ended December 31, 2023, we disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in aggregate net gain of $0.1 million.
•During the year ended December 31, 2022, we disposed of 16 shopping centers and 10 partial shopping centers for aggregate net proceeds of $277.0 million, resulting in aggregate gain of $109.2 million and aggregate impairment of $5.7 million. In addition, during the year ended December 31, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in aggregate net gain of $2.4 million.
Results of Operations
The results of operations discussion is combined for BPG and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022
Revenues (in thousands)
Year Ended December 31,
2023
2022
$ Change
Revenues
Rental income
$
1,243,844
$
1,217,362
$
26,482
Other revenues
1,192
712
480
Total revenues
$
1,245,036
$
1,218,074
$
26,962
Rental income
The increase in rental income for the year ended December 31, 2023 of $26.5 million, compared to the corresponding period in 2022, was due to a $40.3 million increase for assets owned for the full period, partially offset by a $13.8 million decrease due to net transaction activity. The increase for assets owned for the full period was due to (i) a $32.5 million increase in base rent; (ii) a $15.0 million increase in expense reimbursements; (iii) a $1.5 million increase in lease termination fees; (iv) a $0.4 million increase in percentage rents; (v) a $0.2 million increase in accretion of below-market leases, net of amortization of above-market leases and tenant inducements; and (vi) a $0.1 million increase in straight-line rental income, net; partially offset by (vii) a $9.2 million decrease in rental income associated with revenues deemed uncollectible; and (viii) a $0.2 million decrease in ancillary and other rental income. The $32.5 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 15.3% during the year ended December 31, 2023 and 12.7% during the year ended December 31, 2022, and an increase in weighted average billed occupancy. The $15.0 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy, reimbursable operating costs, and real estate taxes. The $9.2 million decrease in rental income associated with revenues deemed uncollectible was primarily attributable to reduced cash collections associated with amounts previously reserved.
Other revenues
The increase in other revenues for the year ended December 31, 2023 of $0.5 million, compared to the corresponding period in 2022, was primarily due to an increase in tax increment financing income.
26
Operating Expenses (in thousands)
Year Ended December 31,
2023
2022
$ Change
Operating expenses
Operating costs
$
146,473
$
141,408
$
5,065
Real estate taxes
173,517
170,383
3,134
Depreciation and amortization
362,277
344,731
17,546
Impairment of real estate assets
17,836
5,724
12,112
General and administrative
117,128
117,225
(97)
Total operating expenses
$
817,231
$
779,471
$
37,760
Operating costs
The increase in operating costs for the year ended December 31, 2023 of $5.1 million, compared to the corresponding period in 2022, was due to a $7.2 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance, utilities, and insurance, partially offset by a $2.1 million decrease due to net transaction activity.
Real estate taxes
The increase in real estate taxes for the year ended December 31, 2023 of $3.1 million, compared to the corresponding period in 2022, was primarily due to a $2.5 million increase in real estate taxes due to net transaction activity, in addition to a $0.6 million increase in real estate taxes for assets owned for the full period, primarily due to an increase in current year assessments, partially offset by an increase in favorable adjustments related to prior year assessments and an increase in real estate tax refunds.
Depreciation and amortization
The increase in depreciation and amortization for the year ended December 31, 2023 of $17.5 million, compared to the corresponding period in 2022, was primarily due to a $20.5 million increase for assets owned for the full period, due to capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs, partially offset by a $3.0 million decrease due to net transaction activity.
Impairment of real estate assets
During the year ended December 31, 2023, aggregate impairment of $17.8 million was recognized on two shopping centers and two partial shopping centers as a result of disposition activity, and one operating property. During the year ended December 31, 2022, aggregate impairment of $5.7 million was recognized on two shopping centers and one partial shopping center as a result of disposition activity.
General and administrative
General and administrative costs remained generally consistent for the year ended December 31, 2023 as compared to the corresponding period in 2022.
During the years ended December 31, 2023 and 2022, construction compensation costs of $18.5 million and $17.5 million, respectively, were capitalized to building and improvements and leasing legal costs of $4.6 million and $4.1 million, respectively, and leasing commission costs of $7.9 million and $7.9 million, respectively, were capitalized to deferred charges and prepaid expenses, net.
27
Other Income and Expenses (in thousands)
Year Ended December 31,
2023
2022
$ Change
Other income (expense)
Dividends and interest
$
666
$
314
$
352
Interest expense
(190,733)
(192,427)
1,694
Gain on sale of real estate assets
65,439
111,563
(46,124)
Gain (loss) on extinguishment of debt, net
4,356
(221)
4,577
Other
(2,446)
(3,639)
1,193
Total other expense
$
(122,718)
$
(84,410)
$
(38,308)
Dividends and interest
The increase in dividends and interest for the year ended December 31, 2023 of $0.4 million, compared to the corresponding period in 2022, was primarily due to an increase in interest income.
Interest expense
The decrease in interest expense for the year ended December 31, 2023 of $1.7 million, compared to the corresponding period in 2022, was primarily due to a lower overall debt obligations, partially offset by a higher weighted average interest rate. In addition, capitalized interest increased as a result of higher weighted average interest rates along with higher construction in process balances.
Gain on sale of real estate assets
During the year ended December 31, 2023, nine shopping centers and seven partial shopping centers were disposed of resulting in aggregate gain of $65.3 million. In addition, during the year ended December 31, 2023, we disposed of a non-operating asset and resolved contingencies relating to a previously disposed asset, resulting in aggregate net gain of $0.1 million. During the year ended December 31, 2022, 14 shopping centers and nine partial shopping centers were disposed of resulting in aggregate gain of $109.2 million. In addition, during the year ended December 31, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain, resulting in aggregate gain of $2.4 million.
Gain (loss) on extinguishment of debt, net
During the year ended December 31, 2023, we repurchased $199.6 million of our outstanding 3.650% 2024 Notes pursuant to the Tender Offer, with $300.4 million aggregate principal amount of the 2024 Notes remaining outstanding. We funded the Tender Offer with proceeds from our $200.0 million delayed draw term loan. In connection with the Tender Offer, we recognized a $4.4 million gain on extinguishment of debt during the year ended December 31, 2023. During the year ended December 31, 2022, we amended and restated our Unsecured Credit Facility, which is comprised of the Revolving Facility and the Term Loan Facility, resulting in a $0.2 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.
Other
The decrease in other expense for the year ended December 31, 2023 of $1.2 million, compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.
Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021
See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year ended December 31, 2022, filed with the SEC on February 13, 2023, for a discussion of the comparison of the year ended December 31, 2022 to the year ended December 31, 2021.
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Liquidity and Capital Resources
We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months and beyond for all anticipated uses, including all scheduled payments on our outstanding debt, current and anticipated tenant and other capital improvements, stockholder distributions to maintain our qualification as a REIT, and other obligations associated with conducting our business.
Our primary expected sources and uses of capital are as follows:
Sources
•cash and cash equivalent balances;
•operating cash flow;
•available borrowings under the Unsecured Credit Facility;
•issuance of long-term debt;
•dispositions; and
•issuance of equity securities.
Uses
•debt repayments;
•maintenance capital expenditures;
•leasing capital expenditures;
•dividend/distribution payments;
•value-enhancing reinvestment capital expenditures;
•acquisitions; and
•repurchases of equity securities.
We believe our capital structure provides us with the financial flexibility and capacity to fund our current capital needs as well as future growth opportunities. We generate significant operating cash flow and have access to multiple forms of external capital, including secured property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives. We have investment grade credit ratings from all three major credit rating agencies. As of December 31, 2023, we had $1.25 billion of available liquidity, including $1.23 billion under our Revolving Facility and $18.9 million of cash and cash equivalents and restricted cash. We intend to continue to enhance our financial and operational flexibility through periodic extensions of the duration of our debt.
Material Cash Requirements
Our expected material cash requirements for the twelve months ended December 31, 2024 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; and (iii) opportunistic expenditures.
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Contractually Obligated Expenditures
The following table summarizes our debt maturities (excluding extension options), interest payment obligations, and obligations under non-cancelable operating leases (excluding renewal options), as of December 31, 2023 (dollars in millions):
Contractually Obligated Expenditures
Twelve Months Ended December 31, 2024
Thereafter
Debt maturities (1)
$
300.4
$
4,637.0
Interest payments (1)(2)
181.0
607.6
Operating leases
6.1
46.8
Total
$
487.5
$
5,291.4
(1) Amounts presented do not assume the issuance of new debt upon maturity of existing debt.
(2) Scheduled interest payments for variable rate loans are presented using rates (including the impact of interest rate swaps), as of December 31, 2023. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” for a further discussion of these and other factors that could impact interest payments
Other Essential Expenditures
We incur certain essential expenditures in the ordinary course of business, such as common area expenses, utilities, insurance, real estate taxes, capital expenditures related to the maintenance of our properties, leasing capital expenditures, and corporate level expenses. The amount of common area expenses, utilities, and capital expenditures related to the maintenance of our properties that we incur depends on the scope of services that we provide, prevailing market rates, and the size and composition of our Portfolio. We carry comprehensive insurance to protect our Portfolio against various losses. The amount of insurance expense that we incur depends on the assessed values of our properties, prevailing market rates, and the size and composition of our Portfolio. We incur real estate taxes in the various jurisdictions in which we operate. The amount of real estate taxes that we incur depends on the assessed values of our properties, the tax rates assessed by various jurisdictions, and the size and composition of our Portfolio. Leasing capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions. The amount of leasing capital expenditures that we incur depends on the volume and nature of leasing activity. We incur corporate level expenses such as employee compensation costs, professional fees, corporate office rents, and other platform expenses. The amount of corporate level expenses that we incur depends on the size and composition of our Portfolio and platform and prevailing market wages and rates. Leases typically provide for the reimbursement of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties. However, costs that we incur generally do not decrease if revenue or occupancy decrease, and certain costs that we incur, such as corporate level expenses, are not typically reimbursed.
In order to continue to qualify as a REIT for federal income tax purposes, we must meet several organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. We intend to continue to satisfy these requirements and maintain our REIT status. Our board of directors evaluates our dividend on a quarterly basis, taking into account a variety of relevant factors, including REIT taxable income. The following table summarizes our dividend activity for the fourth quarter of 2023 and the first quarter of 2024:
Fourth Quarter 2023
First Quarter 2024
Dividend declared per common share
$
0.2725
$
0.2725
Dividend declaration date
October 24, 2023
January 31, 2024
Dividend record date
January 3, 2024
April 2, 2024
Dividend payable date
January 16, 2024
April 15, 2024
Opportunistic Expenditures
We also utilize cash for opportunistic expenditures such as value-enhancing reinvestment and acquisition activity.
The amount of value-enhancing reinvestment capital expenditures that we incur depends on a variety of factors that may change from period to period, such as the number, total expected cost, and nature of value-enhancing reinvestment projects that are underway. See “Improvements to and investments in real estate assets” below for further information regarding our in-process reinvestment projects and our pipeline of future redevelopment
30
projects.
The amount of future acquisition expenditures depends on the availability of opportunities that further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base. Our acquisition strategy focuses on buying assets with strong growth potential that are located in our existing markets and will allow us to leverage our operational platform and expertise to create value. Our acquisition activity may include acquisitions of open-air shopping centers or non-owned anchor spaces, retail buildings, and/or outparcels at, or adjacent to, our existing shopping centers.
Our cash flow activities are summarized as follows (dollars in thousands):
Brixmor Property Group Inc.
Year Ended December 31,
2023
2022
$ Change
Net cash provided by operating activities
$
588,794
$
566,382
$
22,412
Net cash used in investing activities
(163,080)
(462,453)
299,373
Net cash used in financing activities
(428,069)
(380,413)
(47,656)
Net change in cash, cash equivalents and restricted cash
(2,355)
(276,484)
274,129
Cash, cash equivalents and restricted cash at beginning of period
21,259
297,743
(276,484)
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
21,259
$
(2,355)
Brixmor Operating Partnership LP
Year Ended December 31,
2023
2022
$ Change
Net cash provided by operating activities
$
588,794
$
566,382
$
22,412
Net cash used in investing activities
(163,080)
(462,453)
299,373
Net cash used in financing activities
(427,142)
(366,182)
(60,960)
Net change in cash, cash equivalents and restricted cash
(1,428)
(262,253)
260,825
Cash, cash equivalents and restricted cash at beginning of period
20,332
282,585
(262,253)
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
20,332
$
(1,428)
Operating Activities
Net cash provided by operating activities primarily consists of cash inflows from tenant rental payments and expense reimbursements and cash outflows for property operating costs, real estate taxes, general and administrative expenses, and interest expense.
During the year ended December 31, 2023, our net cash provided by operating activities increased $22.4 million, as compared to the corresponding period in 2022. The increase was primarily due to (i) an increase in same property net operating income; (ii) an increase from net working capital; (iii) an increase in lease termination fees; and (iv) a decrease in cash outflows for interest expense; partially offset by (v) a decrease in net operating income due to net transaction activity and other non-same property net operating income; and (vi) an increase in cash outflows for general and administrative expense.
Investing Activities
Net cash used in investing activities is primarily impacted by the nature, timing, and magnitude of acquisition and disposition activity and improvements to and investments in our shopping centers, including capital expenditures associated with our value-enhancing reinvestment activity.
During the year ended December 31, 2023, our net cash used in investing activities decreased $299.4 million, as compared to the corresponding period in 2022. The decrease was primarily due to (i) a decrease of $407.4 million in acquisitions of real estate assets and (ii) a decrease of $4.3 million in purchases of marketable securities, net of sales; partially offset by (iii) a decrease of $97.5 million in net proceeds from sales of real estate assets; and (iv) an increase of $14.8 million in improvements to and investments in real estate assets.
31
Improvements to and investments in real estate assets
During the years ended December 31, 2023 and 2022, we expended $345.2 million and $330.4 million, respectively, on improvements to and investments in real estate assets. Included in these amounts are insurance proceeds of $0.7 million and $7.7 million, respectively, which were received during the year ended December 31, 2023 and 2022.
Maintenance capital expenditures represent costs to fund major replacements and betterments to our properties. Leasing related capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions. In addition, we evaluate our Portfolio on an ongoing basis to identify value-enhancing reinvestment opportunities. Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers and enhancing the overall merchandise mix and tenant quality of our Portfolio. As of December 31, 2023, we had 45 in-process anchor space repositioning, redevelopment and outparcel development projects with an aggregate anticipated cost of $429.2 million, of which $197.2 million had been incurred as of December 31, 2023. In addition, we have identified a pipeline of future redevelopment projects aggregating approximately $900 million of potential capital investment, which we expect to execute over the coming years. We expect to fund these projects with cash and cash equivalents, net cash provided by operating activities, proceeds from sales of real estate assets, and/or proceeds from capital markets transactions.
Acquisitions of and proceeds from sales of real estate assets
We continue to evaluate the market for acquisition opportunities and we may acquire shopping centers when we believe strategic opportunities exist, to further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base. During the year ended December 31, 2023, we acquired two land parcels for an aggregate purchase price of $2.3 million, including transaction costs and closing credits. During the year ended December 31, 2022, we acquired seven shopping centers, one outparcel, and one land parcel for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.
We may also dispose of properties when we believe value has been maximized, where there is downside risk, or where we have limited ability or desire to build critical mass in a particular submarket. During the year ended December 31, 2023, we disposed of 11 shopping centers and nine partial shopping centers for aggregate net proceeds of $182.0 million. In addition, during the year ended December 31, 2023, we received aggregate net proceeds of $0.3 million related to a non-operating asset. During the year ended December 31, 2022, we disposed of 16 shopping centers and 10 partial shopping centers for aggregate net proceeds of $277.0 million. In addition, during the year ended December 31, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million.
Financing Activities
Net cash used in financing activities is primarily impacted by the nature, timing, and magnitude of issuances and repurchases of debt and equity securities, as well as borrowings or principal payments associated with our outstanding indebtedness, including our Unsecured Credit Facility, and distributions made to our common stockholders.
During the year ended December 31, 2023, our net cash used in financing activities increased $47.7 million, as compared to the corresponding period in 2022. The increase was primarily due to (i) a $53.1 million decrease in issuances of common stock; (ii) a $25.7 million increase in distributions to our common stockholders; and (iii) a $0.7 million increase in repurchases of common stock; partially offset by (iv) a $24.2 million decrease in debt borrowings, net of repayments; and (v) a $7.6 million decrease in deferred financing and debt extinguishment costs.
Non-GAAP Performance Measures
We present 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. Our 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
32
by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance.
Funds From Operations
Nareit FFO (defined hereafter) is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. Nareit defines funds from operations ("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 our business as a real estate owner and operator, we believe that Nareit FFO is useful to investors in measuring our operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of our 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.
Our reconciliation of net income to Nareit FFO for the years ended December 31, 2023 and 2022 is as follows (in thousands, except per share amounts):
Year Ended December 31,
2023
2022
Net income
$
305,087
$
354,193
Depreciation and amortization related to real estate
358,088
340,561
Gain on sale of real estate assets
(65,439)
(111,563)
Impairment of real estate assets
17,836
5,724
Nareit FFO
$
615,572
$
588,915
Nareit FFO per diluted share
$
2.04
$
1.95
Weighted average diluted shares outstanding
302,376
301,742
Same Property Net Operating Income
Same property net operating income ("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) lease termination fees, (ii) straight-line rental income, net, (iii) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (iv) straight-line ground rent expense, net, (v) income or expense associated with our captive insurance company, (vi) depreciation and amortization, (vii) impairment of real estate assets, (viii) general and administrative expense, and (ix) other income and expense (including interest expense and gain on sale of real estate assets).
Considering the nature of our business as a real estate owner and operator, we believe that NOI is useful to investors in measuring the operating performance of our 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 our properties, such as lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, straight-line ground rent expense, net, income or expense associated with our captive insurance company, depreciation and amortization, impairment of real estate assets, general and administrative expense, and other income and expense (including interest expense and gain on sale of real estate assets). We believe that same property NOI is also useful to investors because it further eliminates disparities in NOI by only including NOI of properties owned for the entirety of both periods presented and excluding properties under development and completed new development properties that have been stabilized for less than one year and
33
therefore provides a more consistent metric for comparing the operating performance of our real estate between periods.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022
Year Ended December 31,
2023
2022
Change
Number of properties
345
345
—
Percent billed
90.6
%
90.4
%
0.2
%
Percent leased
94.7
%
94.1
%
0.6
%
Revenues
Rental income
$
1,140,455
$
1,100,048
$
40,407
Other revenues
1,192
678
514
1,141,647
1,100,726
40,921
Operating expenses
Operating costs
(137,863)
(130,292)
(7,571)
Real estate taxes
(157,636)
(157,024)
(612)
(295,499)
(287,316)
(8,183)
Same property NOI
$
846,148
$
813,410
$
32,738
The following table provides a reconciliation of net income to same property NOI for the periods presented (in thousands):
Year Ended December 31,
2023
2022
Net income
$
305,087
$
354,193
Adjustments:
Non-same property NOI
(41,594)
(57,551)
Lease termination fees
(4,622)
(3,231)
Straight-line rental income, net
(23,498)
(23,458)
Accretion of below-market leases, net of amortization of above-market leases and tenant inducements
(9,153)
(8,793)
Straight-line ground rent expense
(31)
160
Depreciation and amortization
362,277
344,731
Impairment of real estate assets
17,836
5,724
General and administrative
117,128
117,225
Total other expense
122,718
84,410
Same property NOI
$
846,148
$
813,410
Our Critical Accounting Estimates
Our discussion and analysis of our historical financial condition and operating results is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could ultimately differ from those estimates. The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.
Revenue Recognition and Receivables - Estimating Collectability
We enter into agreements with tenants that convey the right to control the use of identified space at our shopping centers in exchange for rental revenue. These agreements meet the criteria for recognition as leases under Accounting Standards Codification ("ASC") 842, Leases. Rental revenue is recognized on a straight-line basis over the terms of the related leases. The cumulative difference between rental revenue recognized on our Consolidated Statements of Operations and contractual payment terms is recognized as deferred rent and included in Receivables,
34
net on our Consolidated Balance Sheets. We commence recognizing rental revenue based on the date we make the underlying asset available for use by the tenant. Leases also typically provide for the reimbursement of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, by the lessee and are recognized in the period the applicable expenditures are incurred and/or contractually required to be reimbursed.
We periodically evaluate the collectability of our receivables related to rental revenue, straight-line rent, expense reimbursements, and those attributable to other revenue generating activities. We analyze individual tenant receivables and consider tenant credit-worthiness, the length of time a receivable has been outstanding, and current economic trends when evaluating collectability. Any receivables that are deemed to be uncollectible are recognized as a reduction to Rental income on our Consolidated Statements of Operations.
Real Estate - Estimates Related to Valuing Acquired Assets and Liabilities
Real estate assets are recognized on our Consolidated Balance Sheets at historical cost, less accumulated depreciation and amortization. Upon acquisition of real estate operating properties, we estimate the fair value of acquired tangible assets (consisting of land, buildings, and tenant improvements) and identifiable intangible assets and liabilities (consisting of above- and below-market leases and in-place leases) based on an evaluation of available information. Transaction costs incurred during the acquisition process are capitalized as a component of the asset’s value.
The fair value of tangible assets is determined as if the acquired property is vacant. Fair value is determined using an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
In allocating fair value to identifiable intangible assets and liabilities, the value of above-market and below-market leases is estimated based on the present value (using a discount rate reflecting the risks associated with the leases acquired) of the difference between: (i) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition and (ii) management’s estimate of fair market lease rates for the property or an equivalent property, measured over a period equal to the lesser of 30 years or the remaining non-cancelable term of the leases, which includes renewal periods with fixed rental terms that are considered to be below-market. The capitalized above-market or below-market intangibles are amortized as a reduction of, or increase to, rental income over the remaining non-cancelable term of the leases.
The value of in-place leases is estimated based on management’s evaluation of the specific characteristics of each tenant lease, including: (i) fair market rent and the reimbursement of property operating expenses, including common area expenses, utilities, insurance, real estate taxes, and certain capital expenditures related to the maintenance of our properties, that would be forgone during a hypothetical expected lease-up period and (ii) costs that would be incurred, including leasing commissions, legal and marketing costs, and tenant improvements and allowances, to execute similar leases. The value assigned to in-place leases is amortized to depreciation and amortization expense over the remaining term of each lease.
Real Estate - Estimates Related to Impairments
We periodically assess whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of our real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if our estimate of aggregate future undiscounted and unleveraged property operating cash flows, taking into account the anticipated probability-weighted hold period, is less than the carrying value of the property. Various factors are considered in the estimation process that are subject to significant management judgment, including the anticipated hold period, current and/or future reinvestment projects, and the effects of demand and competition on future operating income and/or property values. Changes in any estimates and/or assumptions, particularly the anticipated hold period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value of the asset.
When we identify a real estate asset as held for sale, we discontinue depreciating the asset and estimate its sales price, net of estimated selling costs. If the estimated net sales price of an asset is less than its net carrying value, an impairment charge is recognized to reflect the estimated fair value of the asset.
35
Inflation
Prior to 2021, inflation was low and had a minimal impact on our operating and financial performance; however, inflation has significantly increased over the last three years and may continue to be elevated or increase further. With respect to our shopping centers, our long-term leases generally contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay a portion of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, thereby reducing our exposure to increases in property operating expenses resulting from inflation; however, we have exposure to increases in certain non-reimbursable property operating expenses, including expenses incurred on vacant units. We believe that many of our existing rental rates are below current market rates for comparable space and that upon renewal or re-leasing, such rates may be increased to be consistent with, or closer to, current market rates, which may also offset certain non-reimbursed inflationary cost pressures. With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and have and may continue to enter into interest rate protection agreements that mitigate, but do not eliminate, the impact of changes in interest rates on our variable rate loans. With respect to general and administrative costs, we continually seek opportunities to offset inflationary cost pressures through routine evaluations of our spending levels and through ongoing efforts to utilize technology to enhance our operational efficiency.
36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We may be exposed to interest rate changes primarily as a result of long-term debt used to fund operations and capital expenditures. Our use of derivative instruments is intended to manage our exposure to interest rate movements.
With regard to variable-rate financing, we assess interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations, as well as our potential offsetting hedge positions. Our risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.
We may use derivative financial instruments to hedge exposures to changes in interest rates. To the extent we do, we are exposed to market and credit risk. Market risk is the adverse effect on the value of the financial instrument that results from a change in interest rates. Market risk associated with derivative instruments is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of the derivative instrument is positive, the counterparty owes us, which creates credit risk to us. The credit risk associated with derivative instruments is managed by entering into transactions with a variety of highly-rated counterparties.
As of December 31, 2023, we had $518.5 million outstanding variable-rate indebtedness which bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus credit spreads and reference rate adjustments ranging from 95 basis points to 105 basis points. We have interest rate swap agreements on $500.0 million of our variable-rate indebtedness, which effectively convert the base rate on the indebtedness from variable to fixed. If market rates of interest on our variable-rate debt increased or decreased by 100 basis points, the change in annual interest expense on our variable-rate debt would decrease earnings and cash flows by approximately $0.2 million or increase earnings and cash flows by approximately $0.2 million, respectively, after taking into account the impact of the $500.0 million of interest rate swap agreements.
37
The table below presents the maturity profile, weighted average interest rates and fair value of total debt as of December 31, 2023. The table has limited predictive value as average interest rates for variable-rate debt included in the table represent rates that existed as of December 31, 2023 and are subject to change. Furthermore, the table below incorporates only those exposures that existed as of December 31, 2023 and does not consider exposures or positions that may have arisen or expired after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during future periods, our hedging strategies at that time, and actual interest rates.
(dollars in thousands)
2024
2025
2026
2027
2028
Thereafter
Total
Fair Value
Unsecured Debt
Fixed rate
$
300,352
$
700,000
$
607,542
$
400,000
$
357,708
$
2,053,203
$
4,418,805
$
4,155,332
Weighted average interest rate(1)
3.70
%
3.67
%
3.56
%
3.50
%
3.71
%
3.71
%
Variable rate
$
—
$
—
$
18,500
$
500,000
$
—
$
—
$
518,500
$
518,500
Weighted average interest rate(1)(2)(3)
4.06
%
4.06
%
3.98
%
—
%
—
%
—
%
(1) Weighted average interest rates for all years presented include the impact of our interest rate swap agreements in place as of December 31, 2023 and are calculated based on the total debt balances as of the end of each year, assuming the repayment of debt on its scheduled maturity date.
(2) The interest rates on our variable rate Unsecured Credit Facility are based on credit rating grids. The credit rating grids and all-in-rates on outstanding variable rate debt as of December 31, 2023 are as follows:
Credit Spread Grid
As of December 31, 2023
SOFR Rate Loans
Base Rate Loans
Variable Rate Debt
SOFR Rate
Reference Rate Adjustment
Credit Spread
All-in-Rate
Credit Spread
Credit Spread
Revolving Facility(1)(2)
5.38%
0.10%
0.85%
6.33%
0.83% – 1.50%
0.00% – 0.40%
Term Loan Facility(2)
5.34%
0.10%
0.95%
6.39%
0.90% – 1.70%
0.00% – 0.60%
(1) Our Revolving Facility is further subject to a facility fee ranging from 0.13% to 0.30%, which is excluded from the all-in-rate presented above.
(2) The Company's Revolving Facility and Term Loan Facility include a sustainability metric incentive, which can reduce the applicable credit spread by up to two basis points. During the year ended December 31, 2023, the Company concluded that it did not qualify for a reduction to the applicable credit spread during the year ended December 31, 2023 and year ended December 31, 2022 resulting in a less than $0.1 million increase to interest expense.
(3) We have in place seven interest rate swap agreements that convert the variable interest rate on one variable rate debt instrument to a fixed rate. The balance subject to interest rates swaps as of December 31, 2023 is as follows (dollars in thousands):
As of December 31, 2023
Variable Rate Debt
Amount
Weighted Average Fixed SOFR Rate
Credit Spread
Reference Rate Adjustment
Swapped All-in-Rate
Term Loan Facility(1)
$
300,000
2.59%
0.95%
—%
3.54%
Term Loan Facility
$
200,000
3.59%
0.95%
0.10%
4.64%
(1) Reference Rate Adjustment of 10 basis points is embedded in the Weighted Average Fixed SOFR Rate for the interest rate swaps on $300.0 million outstanding under our Term Loan Facility.
Item 8. Financial Statements and Supplementary Data
See the Index to Consolidated Financial Statements and financial statements commencing on page F-1.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
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Item 9A. Controls and Procedures
Controls and Procedures (Brixmor Property Group Inc.)
Evaluation of Disclosure Controls and Procedures
BPG maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. BPG’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, BPG’s principal executive officer, James M. Taylor, and principal financial officer, Steven T. Gallagher, concluded that BPG’s disclosure controls and procedures were effective as of December 31, 2023.
Management’s Report on Internal Control Over Financial Reporting
BPG’s management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of BPG’s financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. BPG’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of BPG’s assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of BPG are being made only in accordance with authorizations of management and directors of BPG; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of its assets that could have a material effect on BPG’s financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of its management, including its principal executive officer and principal financial officer, BPG conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission. Based on its assessment and those criteria, BPG’s management concluded that its internal control over financial reporting was effective as of December 31, 2023.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued a report, included herein, on the effectiveness of BPG’s internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There have been no changes in BPG’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2023 that have materially affected, or that are reasonably likely to materially affect, BPG’s internal control over financial reporting.
Controls and Procedures (Brixmor Operating Partnership LP)
Evaluation of Disclosure Controls and Procedures
The Operating Partnership maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The Operating Partnership’s management, with the participation of its principal
39
executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Operating Partnership’s principal executive officer, James M. Taylor, and principal financial officer, Steven T. Gallagher, concluded that the Operating Partnership’s disclosure controls and procedures were effective as of December 31, 2023.
Management’s Report on Internal Control Over Financial Reporting
The Operating Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of the Operating Partnership’s financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Operating Partnership’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Operating Partnership’s assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Operating Partnership are being made only in accordance with authorizations of management and directors of the Operating Partnership; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of its assets that could have a material effect on the Operating Partnership’s financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of its management, including its principal executive officer and principal financial officer, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the COSO of the Treadway Commission. Based on its assessment and those criteria, the Operating Partnership’s management concluded that its internal control over financial reporting was effective as of December 31, 2023.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued a report, included herein, on the effectiveness of the Operating Partnership’s internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There have been no changes in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2023 that have materially affected, or that are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.
Item 9B. Other Information
During the three months ended December 31, 2023, no director or officer of the Company, nor the Company itself, adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
40
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10 will be included in the definitive proxy statement relating to the 2024 Annual Meeting of Stockholders of Brixmor Property Group Inc. to be held on April 25, 2024 and is incorporated herein by reference. Brixmor Property Group Inc. will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2023 fiscal year covered by this Form 10-K.
Item 11. Executive Compensation
The information required by Item 11 will be included in the definitive proxy statement relating to the 2024 Annual Meeting of Stockholders of Brixmor Property Group Inc. to be held on April 25, 2024 and is incorporated herein by reference. Brixmor Property Group Inc. will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2023 fiscal year covered by this Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 will be included in the definitive proxy statement relating to the 2024 Annual Meeting of Stockholders of Brixmor Property Group Inc. to be held on April 25, 2024 and is incorporated herein by reference. Brixmor Property Group Inc. will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2023 fiscal year covered by this Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 will be included in the definitive proxy statement relating to the 2024 Annual Meeting of Stockholders of Brixmor Property Group Inc. to be held on April 25, 2024 and is incorporated herein by reference. Brixmor Property Group Inc. will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2023 fiscal year covered by this Form 10-K.
Item 14. Principal Accountant Fees and Services
The information required by Item 14 will be included in the definitive proxy statement relating to the 2024 Annual Meeting of Stockholders of Brixmor Property Group Inc. to be held on April 25, 2024 and is incorporated herein by reference. Brixmor Property Group Inc. will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2023 fiscal year covered by this Form 10-K.
41
PART IV
Item 15. Exhibit and Financial Statement Schedules
(a) Documents filed as part of this report
Form 10-K Page
1
CONSOLIDATED STATEMENTS
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
Second Amended and Restated Agreement of Limited Partnership of Brixmor Operating Partnership LP, dated as of October 28, 2019, by and among Brixmor OP GP LLC, as General Partner, BPG Subsidiary Inc., as Limited Partner, BPG Sub LLC, as Limited Partner, and the other limited partners from time to time party thereto
Indenture, dated January 21, 2015, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee (the “2015 Indenture”)
First Supplemental Indenture to the 2015 Indenture, dated January 21, 2015, among Brixmor Operating Partnership LP, as issuer, and Brixmor OP GP LLC and BPG Subsidiary Inc., as possible future guarantors, and The Bank of New York Mellon, as trustee
Third Supplemental Indenture to the 2015 Indenture, dated June 13, 2016, among Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Fifth Supplemental Indenture to the 2015 Indenture, dated March 8, 2017, among Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Sixth Supplemental Indenture to the 2015 Indenture, dated June 5, 2017, among Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Eighth Supplemental Indenture to the 2015 Indenture, dated May 10, 2019, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Amendment No. 1 to the Eighth Supplemental Indenture, dated August 15, 2019, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Amendment No. 1 to the Ninth Supplemental Indenture, dated August 20, 2020, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Eleventh Supplemental Indenture, dated August 16, 2021, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
Twelfth Supplemental Indenture, dated January 12, 2024, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellon, as trustee
First Supplemental Indenture to the 1995 Indenture, dated as of August 5, 1999, by and among New Plan Realty Trust, New Plan Excel Realty Trust, Inc. and State Street Bank and Trust Company
Successor Supplemental Indenture to the 1995 Indenture, dated as of April 20, 2007, by and among Super IntermediateCo LLC and U.S. Bank Trust Company, National Association
Third Supplemental Indenture to the 1995 Indenture, dated as of October 30, 2009, by and among Centro NP LLC and U.S. Bank Trust Company, National Association
Indenture, dated as of February 3, 1999, among the New Plan Excel Realty Trust, Inc., as Primary Obligor, New Plan Realty Trust, as Guarantor, and State Street Bank and Trust Company, as Trustee (the “1999 Indenture”)
Successor Supplemental Indenture to the 1999 Indenture, dated as of April 20, 2007, by and among Super IntermediateCo LLC, New Plan Realty Trust, LLC and U.S. Bank Trust National Association
Third Amended and Restated Revolving Credit Agreement, dated as of April 28, 2022, among Brixmor Operating Partnership LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto
Amended and Restated Term Loan Agreement, dated as of April 28, 2022, among Brixmor Operating Partnership LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto
Amendment No. 1 to Amended and Restated Term Loan Agreement, dated as of July 7, 2022, among Brixmor Operating Partnership LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto
Brixmor Property Group Inc. Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Brixmor Property Group Inc. Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Brixmor Operating Partnership LP Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Brixmor Operating Partnership LP Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Brixmor Property Group Inc. Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Brixmor Operating Partnership LP Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)
x
* Indicates management contract or compensatory plan or arrangement.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
Item 16. Form 10-K Summary
None.
47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
BRIXMOR PROPERTY GROUP INC.
Date: February 12, 2024
By:
/s/ James M. Taylor
James M. Taylor
Chief Executive Officer and President
(Principal Executive Officer)
BRIXMOR OPERATING PARTNERSHIP LP
Date: February 12, 2024
By:
/s/ James M. Taylor
James M. Taylor
Chief Executive Officer and President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: February 12, 2024
By:
/s/ James M. Taylor
James M. Taylor
Chief Executive Officer and President
(Principal Executive Officer, Director, Sole Director of Sole Member of General Partner of Operating Partnership)
Date: February 12, 2024
By:
/s/ Steven T. Gallagher
Steven T. Gallagher
Chief Accounting Officer and Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: February 12, 2024
By:
/s/ Sheryl M. Crosland
Sheryl M. Crosland
Chair of the Board of Directors
Date: February 12, 2024
By:
/s/ Michael Berman
Michael Berman
Director
Date: February 12, 2024
By:
/s/ Juliann Bowerman
Juliann Bowerman
Director
Date: February 12, 2024
By:
/s/ Thomas W. Dickson
Thomas W. Dickson
Director
Date: February 12, 2024
By:
/s/ Daniel B. Hurwitz
Daniel B. Hurwitz
Director
Date: February 12, 2024
By:
/s/ Sandra A. J. Lawrence
Sandra A. J. Lawrence
Director
Date: February 12, 2024
By:
/s/ William D. Rahm
William D. Rahm
Director
Date: February 12, 2024
By:
/s/ John Peter Suarez
John Peter Suarez
Director
48
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
Form 10-K Page
1
CONSOLIDATED STATEMENTS
Reports of Independent Registered Public Accounting Firm
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Brixmor Property Group Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Brixmor Property Group Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Real Estate Assets — Refer to Notes 1 and 5 to the financial statements
Critical Audit Matter Description
Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of aggregate future undiscounted and unleveraged property operating cash flows, taking into account the anticipated probability-weighted hold period, is less than the carrying value of the property. Various factors are considered in the estimation process, including the anticipated hold period, current and/or future reinvestment projects, and the effects of demand and competition on future operating income and/or property values. Changes in any estimates and/or assumptions, particularly the
F-2
anticipated hold period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value of the asset.
The Company utilizes estimates and assumptions when determining potential impairments based on the asset’s projected operating cash flows. We identified management’s estimate of anticipated hold period for the properties evaluated for impairment as a critical audit matter because of the significance of the estimate within management’s evaluation of the recoverability of real estate assets. Changes in the anticipated hold period could have a material impact on the projected operating cash flows and the amount of recorded impairment charge(s). This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assessment of expected remaining hold period.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s estimates in determining the impairment of real estate asset values included the following, among others:
•We tested the effectiveness of controls over management’s impairment analysis, including controls over the estimate of the anticipated hold period of real estate assets.
•We evaluated the Company’s estimate of hold periods by:
◦Performing a retrospective analysis to compare historical estimates for real estate assets that have subsequently been disposed.
◦Obtaining and evaluating financial and operational evidence of the assumption of the anticipated hold period.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 12, 2024
We have served as the Company's auditor since 2015.
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Brixmor Property Group Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Brixmor Property Group Inc. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 12, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 12, 2024
F-4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners and the Board of Directors of Brixmor Operating Partnership LP
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Brixmor Operating Partnership LP and subsidiaries (the "Operating Partnership") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in capital, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2024, expressed an unqualified opinion on the Operating Partnership's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Real Estate Assets — Refer to Notes 1 and 5 to the financial statements
Critical Audit Matter Description
Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Operating Partnership’s real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of aggregate future undiscounted and unleveraged property operating cash flows, taking into account the anticipated probability-weighted hold period, is less than the carrying value of the property. Various factors are considered in the estimation process, including the anticipated hold period, current and/or future reinvestment projects, and the effects of demand and competition on future operating income and/or property values. Changes in any estimates and/or assumptions,
F-5
particularly the anticipated hold period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value of the asset.
The Operating Partnership utilizes estimates and assumptions when determining potential impairments based on the asset’s projected operating cash flows. We identified management’s estimate of anticipated hold period for the properties evaluated for impairment as a critical audit matter because of the significance of the estimate within management’s evaluation of the recoverability of real estate assets. Changes in the anticipated hold period could have a material impact on the projected operating cash flows and the amount of recorded impairment charge(s). This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assessment of expected remaining hold period.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s estimates in determining the impairment of real estate asset values included the following, among others:
•We tested the effectiveness of controls over management’s impairment analysis, including controls over the estimate of the anticipated hold period of real estate assets.
•We evaluated the Operating Partnership’s estimate of hold periods by:
◦Performing a retrospective analysis to compare historical estimates for real estate assets that have subsequently been disposed.
◦Obtaining and evaluating financial and operational evidence of the assumption of the anticipated hold period.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 12, 2024
We have served as the Operating Partnership’s auditor since 2015.
F-6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners and the Board of Directors of Brixmor Operating Partnership LP
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Brixmor Operating Partnership LP and subsidiaries (the “Operating Partnership”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Operating Partnership and our report dated February 12, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 12, 2024
F-7
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
December 31, 2023
December 31, 2022
Assets
Real estate
Land
$
1,794,011
$
1,820,358
Buildings and improvements
9,201,876
9,077,993
10,995,887
10,898,351
Accumulated depreciation and amortization
(3,198,980)
(2,996,759)
Real estate, net
7,796,907
7,901,592
Cash and cash equivalents
866
16,492
Restricted cash
18,038
4,767
Marketable securities
19,914
21,669
Receivables, net
278,775
264,146
Deferred charges and prepaid expenses, net
164,061
154,141
Real estate assets held for sale
—
10,439
Other assets
54,155
62,684
Total assets
$
8,332,716
$
8,435,930
Liabilities
Debt obligations, net
$
4,933,525
$
5,035,501
Accounts payable, accrued expenses and other liabilities
548,890
535,419
Total liabilities
5,482,415
5,570,920
Commitments and contingencies (Note 15)
—
—
Equity
Common stock, $0.01 par value; authorized 3,000,000,000 shares; 309,723,386 and 309,042,754
shares issued and 300,596,394 and 299,915,762 shares outstanding
3,006
2,999
Additional paid-in capital
3,310,590
3,299,496
Accumulated other comprehensive income (loss)
(2,700)
8,851
Distributions in excess of net income
(460,595)
(446,336)
Total equity
2,850,301
2,865,010
Total liabilities and equity
$
8,332,716
$
8,435,930
The accompanying notes are an integral part of these consolidated financial statements.
F-8
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year Ended December 31,
2023
2022
2021
Revenues
Rental income
$
1,243,844
$
1,217,362
$
1,146,304
Other revenues
1,192
712
5,970
Total revenues
1,245,036
1,218,074
1,152,274
Operating expenses
Operating costs
146,473
141,408
132,042
Real estate taxes
173,517
170,383
165,746
Depreciation and amortization
362,277
344,731
327,152
Impairment of real estate assets
17,836
5,724
1,898
General and administrative
117,128
117,225
105,454
Total operating expenses
817,231
779,471
732,292
Other income (expense)
Dividends and interest
666
314
299
Interest expense
(190,733)
(192,427)
(194,776)
Gain on sale of real estate assets
65,439
111,563
73,092
Gain (loss) on extinguishment of debt, net
4,356
(221)
(28,345)
Other
(2,446)
(3,639)
(65)
Total other expense
(122,718)
(84,410)
(149,795)
Net income
$
305,087
$
354,193
$
270,187
Net income per common share:
Basic
$
1.01
$
1.18
$
0.91
Diluted
$
1.01
$
1.17
$
0.90
Weighted average shares:
Basic
300,977
299,938
297,408
Diluted
302,376
301,742
298,835
The accompanying notes are an integral part of these consolidated financial statements.
F-9
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Year Ended December 31,
2023
2022
2021
Net income
$
305,087
$
354,193
$
270,187
Other comprehensive income (loss)
Change in unrealized gain (loss) on interest rate swaps, net (Note 6)
(12,153)
22,226
15,640
Change in unrealized gain (loss) on marketable securities
602
(701)
(256)
Total other comprehensive income (loss)
(11,551)
21,525
15,384
Comprehensive income
$
293,536
$
375,718
$
285,571
The accompanying notes are an integral part of these consolidated financial statements.
F-10
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands, except per share data)
Common Stock
Number
Amount
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Distributions in Excess of Net Income
Total
Beginning balance, January 1, 2021
296,494
$
2,965
$
3,213,990
$
(28,058)
$
(508,196)
$
2,680,701
Common stock dividends ($0.8850 per common share)
—
—
—
—
(265,675)
(265,675)
Equity based compensation expense
—
—
18,597
—
—
18,597
Other comprehensive income
—
—
—
15,384
—
15,384
Issuance of common stock
716
7
4,657
—
—
4,664
Repurchases of common shares in conjunction with equity award plans
—
—
(5,512)
—
—
(5,512)
Net income
—
—
—
—
270,187
270,187
Ending balance, December 31, 2021
297,210
2,972
3,231,732
(12,674)
(503,684)
2,718,346
Common stock dividends ($0.9800 per common share)
—
—
—
—
(296,845)
(296,845)
Equity based compensation expense
—
—
25,185
—
—
25,185
Other comprehensive income
—
—
—
21,525
—
21,525
Issuance of common stock
2,706
27
53,073
—
—
53,100
Repurchases of common shares in conjunction with equity award plans
—
—
(10,494)
—
—
(10,494)
Net income
—
—
—
—
354,193
354,193
Ending balance, December 31, 2022
299,916
2,999
3,299,496
8,851
(446,336)
2,865,010
Common stock dividends ($1.0525 per common share)
—
—
—
—
(319,346)
(319,346)
Equity based compensation expense
—
—
22,345
—
—
22,345
Other comprehensive loss
—
—
—
(11,551)
—
(11,551)
Issuance of common stock
680
7
(6)
—
—
1
Repurchases of common shares in conjunction with equity award plans
—
—
(11,245)
—
—
(11,245)
Net income
—
—
—
—
305,087
305,087
Ending balance, December 31, 2023
300,596
$
3,006
$
3,310,590
$
(2,700)
$
(460,595)
$
2,850,301
The accompanying notes are an integral part of these consolidated financial statements.
F-11
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2023
2022
2021
Operating activities:
Net income
$
305,087
$
354,193
$
270,187
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
362,277
344,731
327,152
Accretion of debt premium and discount, net
(2,944)
(2,863)
(2,862)
Deferred financing cost amortization
6,860
7,012
7,496
Accretion of above- and below-market leases, net
(12,764)
(12,156)
(12,603)
Tenant inducement amortization and other
3,878
3,965
4,944
Impairment of real estate assets
17,836
5,724
1,898
Gain on sale of real estate assets
(65,439)
(111,563)
(73,092)
Equity based compensation
20,777
23,407
17,090
(Gain) loss on extinguishment of debt, net
(4,356)
221
28,345
Changes in operating assets and liabilities:
Receivables, net
(16,512)
(31,951)
2,189
Deferred charges and prepaid expenses
(40,497)
(38,445)
(30,377)
Other assets
(845)
(551)
(448)
Accounts payable, accrued expenses and other liabilities
15,436
24,658
12,320
Net cash provided by operating activities
588,794
566,382
552,239
Investing activities:
Improvements to and investments in real estate assets
(345,157)
(330,356)
(308,575)
Acquisitions of real estate assets
(2,269)
(409,688)
(258,807)
Proceeds from sales of real estate assets
182,255
279,815
237,404
Purchase of marketable securities
(21,346)
(25,294)
(17,475)
Proceeds from sale of marketable securities
23,437
23,070
16,448
Net cash used in investing activities
(163,080)
(462,453)
(331,005)
Financing activities:
Repayment of borrowings under unsecured revolving credit facility
(632,000)
(675,000)
—
Proceeds from borrowings under unsecured revolving credit facility
525,500
800,000
—
Proceeds from unsecured term loans and notes
200,000
—
847,735
Repayment of borrowings under unsecured term loans and notes
(194,254)
(250,000)
(850,000)
Deferred financing and debt extinguishment costs
(783)
(8,387)
(33,718)
Proceeds from issuances of common shares
—
53,100
5,146
Distributions to common stockholders
(315,287)
(289,632)
(257,229)
Repurchases of common shares in conjunction with equity award plans
(11,245)
(10,494)
(5,512)
Net cash used in financing activities
(428,069)
(380,413)
(293,578)
Net change in cash, cash equivalents and restricted cash
(2,355)
(276,484)
(72,344)
Cash, cash equivalents and restricted cash at beginning of period
21,259
297,743
370,087
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
21,259
$
297,743
Reconciliation to consolidated balance sheets:
Cash and cash equivalents
$
866
$
16,492
$
296,632
Restricted cash
18,038
4,767
1,111
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
21,259
$
297,743
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $4,147, $3,081 and $4,009
$
186,957
$
187,293
$
191,048
State and local taxes paid
2,323
1,951
1,652
The accompanying notes are an integral part of these consolidated financial statements.
F-12
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit information)
December 31, 2023
December 31, 2022
Assets
Real estate
Land
$
1,794,011
$
1,820,358
Buildings and improvements
9,201,876
9,077,993
10,995,887
10,898,351
Accumulated depreciation and amortization
(3,198,980)
(2,996,759)
Real estate, net
7,796,907
7,901,592
Cash and cash equivalents
866
15,565
Restricted cash
18,038
4,767
Marketable securities
19,914
21,669
Receivables, net
278,775
264,146
Deferred charges and prepaid expenses, net
164,061
154,141
Real estate assets held for sale
—
10,439
Other assets
54,155
62,684
Total assets
$
8,332,716
$
8,435,003
Liabilities
Debt obligations, net
$
4,933,525
$
5,035,501
Accounts payable, accrued expenses and other liabilities
548,911
535,419
Total liabilities
5,482,436
5,570,920
Commitments and contingencies (Note 15)
—
—
Capital
Partnership common units; 309,723,386 and 309,042,754 units issued and 300,596,394 and
299,915,762 units outstanding
2,852,980
2,855,232
Accumulated other comprehensive income (loss)
(2,700)
8,851
Total capital
2,850,280
2,864,083
Total liabilities and capital
$
8,332,716
$
8,435,003
The accompanying notes are an integral part of these consolidated financial statements.
F-13
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
Year Ended December 31,
2023
2022
2021
Revenues
Rental income
$
1,243,844
$
1,217,362
$
1,146,304
Other revenues
1,192
712
5,970
Total revenues
1,245,036
1,218,074
1,152,274
Operating expenses
Operating costs
146,473
141,408
132,042
Real estate taxes
173,517
170,383
165,746
Depreciation and amortization
362,277
344,731
327,152
Impairment of real estate assets
17,836
5,724
1,898
General and administrative
117,128
117,225
105,454
Total operating expenses
817,231
779,471
732,292
Other income (expense)
Dividends and interest
666
314
299
Interest expense
(190,733)
(192,427)
(194,776)
Gain on sale of real estate assets
65,439
111,563
73,092
Gain (loss) on extinguishment of debt, net
4,356
(221)
(28,345)
Other
(2,446)
(3,639)
(65)
Total other expense
(122,718)
(84,410)
(149,795)
Net income
$
305,087
$
354,193
$
270,187
Net income per common unit:
Basic
$
1.01
$
1.18
$
0.91
Diluted
$
1.01
$
1.17
$
0.90
Weighted average units:
Basic
300,977
299,938
297,408
Diluted
302,376
301,742
298,835
The accompanying notes are an integral part of these consolidated financial statements.
F-14
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Year Ended December 31,
2023
2022
2021
Net income
$
305,087
$
354,193
$
270,187
Other comprehensive income (loss)
Change in unrealized gain (loss) on interest rate swaps, net (Note 6)
(12,153)
22,226
15,640
Change in unrealized gain (loss) on marketable securities
602
(701)
(256)
Total other comprehensive income (loss)
(11,551)
21,525
15,384
Comprehensive income
$
293,536
$
375,718
$
285,571
The accompanying notes are an integral part of these consolidated financial statements.
F-15
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(in thousands)
Partnership Common Units
Accumulated Other Comprehensive Income (Loss)
Total
Beginning balance, January 1, 2021
$
2,698,746
$
(28,059)
$
2,670,687
Distributions to partners
(270,819)
—
(270,819)
Equity based compensation expense
18,597
—
18,597
Other comprehensive income
—
15,384
15,384
Issuance of OP Units
4,664
—
4,664
Repurchases of OP Units in conjunction with equity award plans
(5,512)
—
(5,512)
Net income
270,187
—
270,187
Ending balance, December 31, 2021
2,715,863
(12,675)
2,703,188
Distributions to partners
(282,615)
—
(282,615)
Equity based compensation expense
25,185
—
25,185
Other comprehensive income
—
21,526
21,526
Issuance of OP Units
53,100
—
53,100
Repurchases of OP Units in conjunction with equity award plans
(10,494)
—
(10,494)
Net income
354,193
—
354,193
Ending balance, December 31, 2022
2,855,232
8,851
2,864,083
Distributions to partners
(318,440)
—
(318,440)
Equity based compensation expense
22,345
—
22,345
Other comprehensive loss
—
(11,551)
(11,551)
Issuance of OP Units
1
—
1
Repurchases of OP Units in conjunction with equity award plans
(11,245)
—
(11,245)
Net income
305,087
—
305,087
Ending balance, December 31, 2023
$
2,852,980
$
(2,700)
$
2,850,280
The accompanying notes are an integral part of these consolidated financial statements.
F-16
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2023
2022
2021
Operating activities:
Net income
$
305,087
$
354,193
$
270,187
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
362,277
344,731
327,152
Accretion of debt premium and discount, net
(2,944)
(2,863)
(2,862)
Deferred financing cost amortization
6,860
7,012
7,496
Accretion of above- and below-market leases, net
(12,764)
(12,156)
(12,603)
Tenant inducement amortization and other
3,878
3,965
4,944
Impairment of real estate assets
17,836
5,724
1,898
Gain on sale of real estate assets
(65,439)
(111,563)
(73,092)
Equity based compensation
20,777
23,407
17,090
(Gain) loss on extinguishment of debt, net
(4,356)
221
28,345
Changes in operating assets and liabilities:
Receivables, net
(16,512)
(31,951)
2,189
Deferred charges and prepaid expenses
(40,497)
(38,445)
(30,377)
Other assets
(845)
(551)
(448)
Accounts payable, accrued expenses and other liabilities
15,436
24,658
12,320
Net cash provided by operating activities
588,794
566,382
552,239
Investing activities:
Improvements to and investments in real estate assets
(345,157)
(330,356)
(308,575)
Acquisitions of real estate assets
(2,269)
(409,688)
(258,807)
Proceeds from sales of real estate assets
182,255
279,815
237,404
Purchase of marketable securities
(21,346)
(25,294)
(17,475)
Proceeds from sale of marketable securities
23,437
23,070
16,448
Net cash used in investing activities
(163,080)
(462,453)
(331,005)
Financing activities:
Repayment of borrowings under unsecured revolving credit facility
(632,000)
(675,000)
—
Proceeds from borrowings under unsecured revolving credit facility
525,500
800,000
—
Proceeds from unsecured term loans and notes
200,000
—
847,735
Repayment of borrowings under unsecured term loans and notes
(194,254)
(250,000)
(850,000)
Deferred financing and debt extinguishment costs
(783)
(8,387)
(33,718)
Proceeds from issuances of OP Units
—
53,100
5,146
Partner distributions and repurchases of OP Units
(325,605)
(285,895)
(267,885)
Net cash used in financing activities
(427,142)
(366,182)
(298,722)
Net change in cash, cash equivalents and restricted cash
(1,428)
(262,253)
(77,488)
Cash, cash equivalents and restricted cash at beginning of period
20,332
282,585
360,073
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
20,332
$
282,585
Reconciliation to consolidated balance sheets:
Cash and cash equivalents
$
866
$
15,565
$
281,474
Restricted cash
18,038
4,767
1,111
Cash, cash equivalents and restricted cash at end of period
$
18,904
$
20,332
$
282,585
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $4,147, $3,081 and $4,009
$
186,957
$
187,293
$
191,048
State and local taxes paid
2,323
1,951
1,652
The accompanying notes are an integral part of these consolidated financial statements.
F-17
BRIXMOR PROPERTY GROUP INC. AND BRIXMOR OPERATING PARTNERSHIP LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, unless otherwise stated)
1. Nature of Business and Financial Statement Presentation
Description of Business
Brixmor Property Group Inc. and subsidiaries (collectively, the "Parent Company") is an internally-managed corporation that has elected to be taxed as a real estate investment trust ("REIT"). Brixmor Operating Partnership LP and subsidiaries (collectively, the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operations and owns substantially all of its assets. The Parent Company owns 100% of the limited liability company interests of BPG Subsidiary LLC ("BPG Sub"), which, in turn, is the sole member of Brixmor OP GP LLC (the "General Partner"), the sole general partner of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. The Parent Company, the Operating Partnership, and their consolidated subsidiaries (collectively, the "Company" or "Brixmor") owns and operates one of the largest publicly-traded open-air retail portfolios by gross leasable area ("GLA") in the United States ("U.S."), comprised primarily of community and neighborhood shopping centers. As of December 31, 2023, the Company’s portfolio was comprised of 362 shopping centers (the "Portfolio") totaling approximately 64 million square feet of GLA. The Company’s high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and its shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers.
The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles ("GAAP").
Basis of Presentation
The financial information included herein reflects the consolidated financial position of the Company as of December 31, 2023 and 2022 and the consolidated results of its operations and cash flows for the years ended December 31, 2023, 2022, and 2021.
Principles of Consolidation and Use of Estimates
The accompanying Consolidated Financial Statements include the accounts of the Parent Company, the Operating Partnership, each of their wholly owned subsidiaries and all other entities in which they have a controlling financial interest. All intercompany transactions have been eliminated.
When the Company obtains an economic interest in an entity, management evaluates the entity to determine: (i) whether the entity is a variable interest entity ("VIE"), (ii) in the event the entity is a VIE, whether the Company is the primary beneficiary of the entity, and (iii) in the event the entity is not a VIE, whether the Company otherwise has a controlling financial interest.
The Company consolidates: (i) entities that are VIEs for which the Company is deemed to be the primary beneficiary and (ii) entities that are not VIEs which the Company controls. If the Company has an interest in a VIE but it is not determined to be the primary beneficiary, the Company accounts for its interest under the equity method of accounting. Similarly, for those entities which are not VIEs and the Company does not have a controlling financial interest, the Company accounts for its interests under the equity method of accounting. The Company continually reconsiders its determination of whether an entity is a VIE and whether the Company qualifies as its primary beneficiary. The Company has evaluated the Operating Partnership and has determined it is not a VIE as of December 31, 2023.
The Company acquires properties, from time to time, using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a "thinly capitalized" entity. The Company owns 100% of the EAT, controls the activities that most significantly impact the EAT’s economic performance, and can collapse the reverse 1031
F-18
exchange structure at any time. Therefore, the Company consolidates the EAT because it is the primary beneficiary. Assets of the EAT primarily consist of leased property (real estate and intangibles).
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to impairment of real estate, recovery of receivables, and depreciable lives. These estimates are based on historical experience and other assumptions that management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as new information becomes known. Actual results could differ from these estimates.
Cash and Cash Equivalents
For purposes of presentation on both the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, the Company considers instruments with an original maturity of three months or less to be cash and cash equivalents.
The Company maintains its cash and cash equivalents at major financial institutions. The cash and cash equivalents balance at one or more of these financial institutions exceeds the Federal Depository Insurance Corporation ("FDIC") insurance coverage. The Company periodically assesses the credit risk associated with these financial institutions and believes that the risk of loss is minimal.
Restricted Cash
Restricted cash represents cash deposited in escrow accounts that generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements, as well as legally restricted tenant security deposits and funds held in escrow for pending transactions.
Real Estate
Real estate assets are recognized on the Company’s Consolidated Balance Sheets at historical cost, less accumulated depreciation and amortization. Upon acquisition of real estate operating properties, management estimates the fair value of acquired tangible assets (consisting of land, buildings, and tenant improvements) and identifiable intangible assets and liabilities (consisting of above- and below-market leases and in-place leases) based on an evaluation of available information. Transaction costs incurred during the acquisition process are capitalized as a component of the asset’s value.
The fair value of tangible assets is determined as if the acquired property is vacant. Fair value is determined using an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
In allocating fair value to identifiable intangible assets and liabilities, the value of above-market and below-market leases is estimated based on the present value (using a discount rate reflecting the risks associated with the leases acquired) of the difference between: (i) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition and (ii) management’s estimate of fair market lease rates for the property or an equivalent property, measured over a period equal to the lesser of 30 years or the remaining non-cancelable term of the leases, which includes renewal periods with fixed rental terms that are considered to be below-market. The capitalized above-market or below-market intangibles are amortized as a reduction of, or increase to, rental income over the remaining non-cancelable term of the leases.
The value of in-place leases is estimated based on management’s evaluation of the specific characteristics of each tenant lease, including: (i) fair market rent and the reimbursement of property operating expenses, including common area expenses, utilities, insurance, real estate taxes, and capital expenditures that would be forgone during a hypothetical expected lease-up period and (ii) costs that would be incurred, including leasing commissions, legal and marketing costs, and tenant improvements and allowances, to execute similar leases. The value assigned to in-place leases is amortized to Depreciation and amortization expense over the remaining term of the leases.
F-19
Certain real estate assets are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:
Building and building and land improvements
20 – 40 years
Furniture, fixtures, and equipment
5 – 10 years
Tenant improvements
The shorter of the term of the related lease or useful life
Costs to fund major replacements and betterments, which extend the life of the asset, are capitalized and depreciated over their respective useful lives, while costs for ordinary repairs and maintenance activities are expensed to Operating costs as incurred.
In situations in which a tenant’s non-cancelable lease term has been modified, the Company evaluates the remaining useful lives of depreciable or amortizable assets in the asset group related to the lease (i.e., tenant improvements, above- and below-market lease intangibles, in-place lease value, and leasing commissions). Based upon consideration of the facts and circumstances surrounding the modification, the Company may accelerate the depreciation and amortization associated with the asset group.
Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If an indicator is identified, a real estate asset is considered impaired only if management’s estimate of aggregate future undiscounted and unleveraged property operating cash flows, taking into account the anticipated probability-weighted hold period, is less than the carrying value of the property. Various factors are considered in the estimation process, including the anticipated hold period, current and/or future reinvestment projects, and the effects of demand and competition on future operating income and/or property values. Changes in any estimates and/or assumptions, particularly the anticipated hold period, could have a material impact on the projected operating cash flows. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value of the asset
When management identifies a real estate asset as held for sale, the Company discontinues depreciating the asset and estimates its sales price, net of estimated selling costs. If the estimated net sales price of an asset is less than its net carrying value, an impairment charge is recognized to reflect the estimated fair value of the asset. Properties classified as real estate held for sale represent properties that are under contract for sale and where the applicable pre-sale due diligence period has expired prior to the end of the reporting period.
Real Estate Under Development and Redevelopment
Certain costs are capitalized related to the development and redevelopment of real estate including pre-construction costs, construction costs, real estate taxes, insurance, utilities, and compensation and other related costs of personnel directly involved. Additionally, the Company capitalizes interest expense related to development and redevelopment activities. Capitalization of these costs begins when the activities and related expenditures commence and ceases when the project is substantially complete and ready for its intended use, at which time the project is placed in service and depreciation commences. Additionally, the Company makes estimates as to the probability of certain development and redevelopment projects being completed. If the Company determines the development or redevelopment is no longer probable of completion, the Company expenses all capitalized costs that are not recoverable.
Deferred Leasing and Financing Costs
Direct costs incurred in executing tenant leases and long-term financings are capitalized and amortized using the straight-line method over the term of the related lease or debt agreement, which approximates the effective interest method. For tenant leases, capitalized costs incurred include tenant improvements, tenant allowances, leasing commissions, and leasing legal fees. For long-term financings, capitalized costs incurred include bank and legal fees. The amortization of deferred leasing and financing costs is included in Depreciation and amortization and Interest expense, respectively, on the Company’s Consolidated Statements of Operations and in Operating activities on the Company’s Consolidated Statements of Cash Flows.
F-20
Marketable Securities
The Company classifies its marketable securities, which are comprised of debt securities, as available-for-sale. These securities are carried at fair value, which is based primarily on publicly traded market values in active markets, and is classified accordingly on the fair value hierarchy.
Any unrealized loss on the Company’s financial instruments must be assessed to determine the portion, if any, that is attributable to credit loss and the portion that is due to other factors, such as changes in market interest rates. “Credit loss” refers to any portion of the carrying amount that the Company does not expect to collect over a financial instrument’s contractual life. The Company considers current market conditions and reasonable forecasts of future market conditions to estimate expected credit losses over the life of the financial instrument. Any portion of unrealized losses due to credit loss is recognized through net income and reported in equity as a component of distributions in excess of net income. The portion of unrealized losses due to other factors is recognized through other comprehensive income (loss) and reported in accumulated other comprehensive income (loss).
Derivative Financial Instruments and Hedging
Derivatives are measured at fair value and are recognized in the Company’s Consolidated Balance Sheets as assets or liabilities, depending on the Company’s rights or obligations under the applicable derivative contract. The accounting for changes in the fair value of a derivative varies based on the intended use of the derivative, whether the Company has elected to designate the derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the necessary hedge accounting criteria. Derivatives designated as a hedge of the exposure to variability in expected future cash flows are considered cash flow hedges. In a cash flow hedge, hedge accounting generally provides for the matching of the timing of recognition of gain or loss on the hedging instrument with the recognition of the earnings effect of the hedged transaction.
Revenue Recognition and Receivables
The Company enters into agreements with tenants that convey the right to control the use of identified space at its shopping centers in exchange for rental revenue. These agreements meet the criteria for recognition as leases under Accounting Standards Codification ("ASC") 842, Leases. Rental revenue is recognized on a straight-line basis over the terms of the related leases. The cumulative difference between rental revenue recognized on the Company’s Consolidated Statements of Operations and contractual payment terms is recognized as deferred rent and included in Receivables, net on the accompanying Consolidated Balance Sheets. The Company commences recognizing rental revenue based on the date it makes the underlying asset available for use by the tenant. Leases also typically provide for the reimbursement of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, by the lessee and are recognized in the period the applicable expenditures are incurred and/or contractually required to be reimbursed.
The Company accounts for rental revenue (lease component) and common area expense reimbursements (non-lease component) as one lease component under ASC 842. The Company also includes the non-components of its leases, such as the reimbursement of utilities, insurance, real estate taxes, and certain capital expenditures related to the maintenance of our properties, within this lease component. These amounts are included in Rental income on the Company’s Consolidated Statements of Operations.
Certain leases also provide for percentage rents based upon the sales of a lessee. Percentage rents are recognized upon the achievement of certain predetermined sales thresholds and are included in Rental income on the Company’s Consolidated Statements of Operations.
Gains from the sale of depreciated operating properties are generally recognized under the full accrual method, provided that various criteria relating to the terms of the sale and subsequent involvement by the Company with the applicable property are met.
The Company periodically evaluates the collectability of its receivables related to rental revenue, straight-line rent, expense reimbursements, and those attributable to other revenue generating activities. The Company analyzes individual tenant receivables and considers tenant credit-worthiness, the length of time a receivable has been outstanding, and current economic trends when evaluating collectability. Any receivables that are deemed to be uncollectible are recognized as a reduction to Rental income on the Company’s Consolidated Statements of Operations.
F-21
Leases
The Company periodically enters into agreements in which it is the lessee, including ground leases for shopping centers that it operates and office leases for administrative space. These agreements meet the criteria for recognition as leases under ASC 842. For these agreements the Company recognizes an operating lease right-of-use (“ROU”) asset and an operating lease liability based on the present value of the minimum lease payments over the non-cancelable lease term. As the discount rates implicit in the leases are not readily determinable, the Company uses its incremental secured borrowing rate, based on information available at the commencement date of each lease, to determine the present value of the associated lease payments. The lease terms utilized by the Company may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. The Company evaluates many factors, including current and future lease cash flows, when determining if an option to extend or terminate should be included in the non-cancelable period. Lease expense for minimum lease payments is recognized on a straight-line basis over the non-cancelable lease term. The Company applies the short-term lease exemption within ASC 842 and has not recorded ROU assets or lease liabilities for leases with original terms of less than 12 months. Leases also typically provide for the reimbursement of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the properties, by the Company.
For leases where it is the lessee, the Company accounts for lease payments (lease component) and common area expense reimbursements (non-lease component) as one lease component under ASC 842. The Company also includes the non-components of its leases, such as the reimbursement of utilities, insurance, real estate taxes, and certain capital expenditures related to the maintenance of our properties, within this lease component. These amounts are included in Operating expenses on the Company’s Consolidated Statements of Operations.
Stock Based Compensation
The Company accounts for equity awards in accordance with ASC 718, Compensation - Stock Compensation, which requires that all share-based payments to employees and non-employee directors be recognized in the Consolidated Statements of Operations over the service period based on their fair value. Fair value is determined based on the type of award, using either the grant date market price of the Company’s common stock or the results of a Monte Carlo simulation model. Equity compensation expense is included in General and administrative expenses on the Company’s Consolidated Statements of Operations.
Income Taxes
The Parent Company has elected to qualify as a REIT in accordance with the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a REIT, the Parent Company must meet several organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. Management intends to continue to satisfy these requirements and maintain the Parent Company’s REIT status. As a REIT, the Parent Company generally will not be subject to U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.
The Parent Company conducts substantially all of its operations through the Operating Partnership, which is organized as a limited partnership and treated as a pass-through entity for U.S. federal tax purposes. Therefore, U.S. federal income taxes do not materially impact the Consolidated Financial Statements of the Company.
If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years. Even if the Parent Company qualifies for taxation as a REIT, the Parent Company is subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed taxable income as well as other income items, as applicable.
The Parent Company has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (each a "TRS"), and the Parent Company may in the future elect to treat newly formed and/or other existing subsidiaries as TRSs. A TRS may participate in non-real estate related activities and/or perform non-customary services for tenants and is subject to certain limitations under the Code. A TRS is subject to U.S. federal, state, and local income taxes at regular corporate rates. Income taxes related to the Parent Company’s TRSs do not materially impact the Consolidated Financial Statements of the Company.
F-22
The Company has considered the tax positions taken for the open tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s Consolidated Financial Statements as of December 31, 2023 and 2022. Open tax years generally range from 2020 through 2022 but may vary by jurisdiction and issue. The Company recognizes penalties and interest accrued related to unrecognized tax benefits as income tax expense, which is included in Other on the Company’s Consolidated Statements of Operations.
New Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosure primarily related to the rate reconciliation and income taxes paid information. The standard is effective on for annual periods beginning after December 15, 2024, with early adoption permitted. The Company continues to evaluate the impact of the guidance, but does not expect the adoption of ASU 2023-09 will have a material impact on the Consolidated Financial Statements of the Company.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” ASU 2023-07 improves disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses. The provisions in this amendment are applicable to public entities with a single reportable segment. The standard is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company continues to evaluate the impact of the guidance, but does not expect the adoption of ASU 2023-07 will have a material impact on the Consolidated Financial Statements of the Company.
In October 2023, the FASB issued ASU 2023-06 "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." ASU 2023-06 modifies the disclosure or presentation requirements of a variety of topics in the ASC. These amendments align many disclosure requirements with those already required by the Securities Exchange Commission (the "SEC") under Regulation S-X or Regulation S-K. The ASC amendments in ASU 2023-06 become effective on the date which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment in ASU 2023-06 will not become effective for any entity. The Company does not expect the adoption of the amendments in ASU 2023-06 will have a material impact on the Consolidated Financial Statements of the Company.
Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they either are not relevant to the Company or they are not expected to have a material impact on the Consolidated Financial Statements of the Company.
2. Acquisition of Real Estate
During the year ended December 31, 2023, the Company acquired the following assets, in separate transactions:
Description(1)
Location
Month Acquired
GLA
Aggregate Purchase Price(2)
Land at Aurora Plaza(3)
Aurora, CO
Apr-23
N/A
$
1,914
Paradise Pavilion - Land Parcel
West Bend, WI
Nov-23
N/A
355
—
$
2,269
(1)No debt was assumed related to any of the listed acquisitions.
(2)Aggregate purchase price includes $0.2 million of transaction costs, offset by $0.1 million of closing credits.
(3)The Company terminated a ground lease and acquired the associated land parcel.
F-23
During the year ended December 31, 2022, the Company acquired the following assets, in separate transactions:
Description(1)
Location
Month Acquired
GLA
Aggregate Purchase Price(2)
Brea Gateway
Brea, CA
Jan-22
181,819
$
83,991
Land at Cobblestone Village
St. Augustine, FL
Jan-22
N/A
1,661
Arboretum Village
Dallas, TX
Jan-22
95,354
46,330
Ravinia Plaza
Orland Park, IL
Feb-22
101,800
26,160
Elmhurst Crossing
Elmhurst, IL
Apr-22
347,503
75,096
North Riverside Plaza
Berwyn, IL
Apr-22
383,884
60,114
West U Marketplace
Houston, TX
Apr-22
60,136
33,741
Waterford Commons - Ruby Tuesday
Waterford, CT
May-22
6,781
1,574
Lake Pointe Village
Sugarland, TX
Jun-22
162,263
80,971
Adjustments related to previously acquired assets
Various
Various
N/A
50
1,339,540
$
409,688
(1)No debt was assumed related to any of the listed acquisitions.
(2)Aggregate purchase price includes $2.0 million of transaction costs, offset by $2.9 million of closing credits.
The aggregate purchase price of the assets acquired during the years ended December 31, 2023 and 2022, respectively, has been allocated as follows:
Year Ended December 31,
Assets
2023
2022
Land
$
2,269
$
84,361
Buildings
—
294,241
Building and tenant improvements
—
33,352
Above-market leases(1)
—
701
In-place leases(2)
—
29,607
Total assets
2,269
442,262
Liabilities
Below-market leases(3)
$
—
$
30,748
Other liabilities
—
1,826
Total liabilities
—
32,574
Net assets acquired
$
2,269
$
409,688
(1)The weighted average amortization period at the time of acquisition for above-market leases related to assets acquired during the year ended December 31, 2022 was 6.5 years.
(2)The weighted average amortization period at the time of acquisition for in-place leases related to assets acquired during the year ended December 31, 2022 was 12.1 years.
(3)The weighted average amortization period at the time of acquisition for below-market leases related to assets acquired during the year ended December 31, 2022 was 20.1 years.
3. Dispositions and Assets Held for Sale
During the year ended December 31, 2023, the Company disposed of 11 shopping centers and nine partial shopping centers for aggregate net proceeds of $182.0 million, resulting in aggregate gain of $65.3 million and aggregate impairment of $6.1 million. In addition, during the year ended December 31, 2023, the Company disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in aggregate gain of $0.1 million.
During the year ended December 31, 2022, the Company disposed of 16 shopping centers and 10 partial shopping centers for aggregate net proceeds of $277.0 million resulting in aggregate gain of $109.2 million and aggregate impairment of $5.7 million. In addition, during the year ended December 31, 2022, the Company resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in aggregate gain of $2.4 million.
F-24
As of December 31, 2023, the Company had no properties held for sale. As of December 31, 2022, the Company had one property and two partial properties held for sale. There were no liabilities associated with the properties classified as held for sale. The following table presents the assets associated with the properties classified as held for sale:
Assets
December 31, 2023
December 31, 2022
Land
$
—
$
1,988
Buildings and improvements
—
13,864
Accumulated depreciation and amortization
—
(5,625)
Real estate, net
—
10,227
Other assets
—
212
Assets associated with real estate assets held for sale
$
—
$
10,439
There were no discontinued operations for the years ended December 31, 2023, 2022, and 2021 as none of the dispositions represented a strategic shift in the Company’s business that would qualify as discontinued operations.
4. Real Estate
The Company’s components of Real estate, net consisted of the following:
December 31, 2023
December 31, 2022
Land
$
1,794,011
$
1,820,358
Buildings and improvements:
Buildings and tenant improvements
8,696,881
8,535,279
Lease intangibles(1)
504,995
542,714
10,995,887
10,898,351
Accumulated depreciation and amortization(2)
(3,198,980)
(2,996,759)
Total
$
7,796,907
$
7,901,592
(1)As of December 31, 2023 and 2022, Lease intangibles consisted of $456.8 million and $492.0 million, respectively, of in-place leases and $48.2 million and $50.7 million, respectively, of above-market leases. These intangible assets are amortized over the term of each related lease.
(2)As of December 31, 2023 and 2022, Accumulated depreciation and amortization included $445.5 million and $465.2 million, respectively, of accumulated amortization related to Lease intangibles.
In addition, as of December 31, 2023 and 2022, the Company had intangible liabilities relating to below-market leases of $329.8 million and $349.7 million, respectively, and accumulated accretion of $247.2 million and $252.9 million, respectively. These intangible liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s Consolidated Balance Sheets.
Below-market lease accretion income, net of above-market lease amortization for the years ended December 31, 2023, 2022, and 2021 was $12.8 million, $12.2 million, and $12.6 million, respectively. These amounts are included in Rental income on the Company’s Consolidated Statements of Operations. Amortization expense associated with in-place lease value for the years ended December 31, 2023, 2022, and 2021 was $16.5 million, $18.9 million, and $15.2 million, respectively. These amounts are included in Depreciation and amortization on the Company’s Consolidated Statements of Operations. The Company’s estimated below-market lease accretion income, net of above-market lease amortization expense, and in-place lease amortization expense for the next five years are as follows:
Year ending December 31,
Below-market lease accretion (income), net of above-market lease amortization expense
In-place lease amortization expense
2024
$
(9,169)
$
11,646
2025
(7,963)
8,579
2026
(6,937)
6,125
2027
(5,864)
4,712
2028
(5,418)
3,809
F-25
5. Impairments
Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value.
The Company recognized the following impairments during the year ended December 31, 2023:
Year Ended December 31, 2023
Property Name(1)
Location
GLA
Impairment Charge
The Quentin Collection
Kildeer, IL
171,530
$
11,705
Broadway Faire - Theater Box(2)
Fresno, CA
39,983
2,102
Elk Grove Town Center(2)
Elk Grove Village, IL
47,704
1,796
The Manchester Collection - Crossroads(2)
Manchester, CT
14,867
1,155
Spring Mall(2)
Greenfield, WI
45,920
1,078
320,004
$
17,836
(1)The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers primarily in connection with the Company’s capital recycling program.
(2)The Company disposed of this property during the year ended December 31, 2023.
The Company recognized the following impairments during the year ended December 31, 2022:
Year Ended December 31, 2022
Property Name(1)
Location
GLA
Impairment Charge
Torrington Plaza (2)
Torrington, CT
125,496
$
3,509
Park Hills Plaza - Excluding Outparcels (2)
Altoona, PA
238,829
1,127
New Garden Center (2)
Kennett Square, PA
147,370
1,088
511,695
$
5,724
(1)The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers primarily in connection with the Company’s capital recycling program.
(2)The Company disposed of this property during the year ended December 31, 2022.
The Company recognized the following impairments during the year ended December 31, 2021:
Year Ended December 31, 2021
Property Name(1)
Location
GLA
Impairment Charge
Albany Plaza(2)
Albany, GA
114,169
$
1,467
Erie Canal Centre(2)
DeWitt, NY
123,404
431
237,573
$
1,898
(1)The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers primarily in connection with the Company’s capital recycling program.
(2)The Company disposed of this property during the year ended December 31, 2021.
The Company can provide no assurance that material impairment charges with respect to its Portfolio will not occur in future periods. See Note 3 for additional information regarding impairment charges taken in connection with the Company’s dispositions. See Note 8 for additional information regarding the fair value of operating properties that have been impaired.
6. Financial Instruments – Derivatives and Hedging
The Company’s use of derivative instruments is intended to manage its exposure to interest rate movements and such instruments are not utilized for speculative purposes. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap agreements and interest rate cap agreements that result in the receipt and/or payment of future known and uncertain cash amounts, the value of which are determined by market interest rates.
F-26
Cash Flow Hedges of Interest Rate Risk
Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchanging the underlying notional amount. The Company utilizes interest rate swaps to partially hedge the cash flows associated with variable-rate debt or future cash flows associated with forecasted fixed-rate debt issuances. During the year ended December 31, 2023, the Company entered into 10 interest rate swap agreements. During the year ended December 31, 2022, the Company did not enter into any new interest rate swap agreements. The Company has elected to present its interest rate derivatives on its Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. The gross derivative assets are included in Other assets and the gross derivative liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s Consolidated Balance Sheets.
Detail on the terms and fair value of the Company’s interest rate derivatives designated as cash flow hedges outstanding as of December 31, 2023 is as follows:
Fair Value
Effective Date
Maturity Date
Swapped Variable Rate
Fixed Rate
Notional Amount
Assets
Liabilities
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5875
%
$
50,000
$
710
$
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5960
%
50,000
707
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5860
%
100,000
1,421
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5850
%
100,000
1,421
—
5/1/2023
7/26/2027
1 Month SOFR(2)
3.5890
%
100,000
59
—
5/1/2023
7/26/2027
1 Month SOFR(2)
3.5950
%
75,000
34
—
5/1/2023
7/26/2027
1 Month SOFR(2)
3.5930
%
25,000
12
—
7/26/2024
7/26/2027
1 Month SOFR(3)
4.0767
%
100,000
—
(2,073)
7/26/2024
7/26/2027
1 Month SOFR(3)
4.0770
%
100,000
—
(2,077)
7/26/2024
7/26/2027
1 Month SOFR(3)
4.0767
%
50,000
—
(1,038)
7/26/2024
7/26/2027
1 Month SOFR(3)
4.0770
%
50,000
—
(1,039)
6/14/2024
6/14/2034
Compound SOFR(4)
3.4400
%
100,000
—
(437)
6/14/2024
6/14/2034
Compound SOFR(4)
3.4370
%
25,000
—
(104)
6/14/2024
6/14/2034
Compound SOFR(4)
3.4400
%
25,000
—
(109)
$
950,000
$
4,364
$
(6,877)
(1)Swapped variable rate includes a secured overnight financing rate ("SOFR") adjustment of 10 basis points.
(2)In April 2023, the Company entered into three interest rate swap agreements with an aggregate notional amount of $200.0 million. The interest rate swap agreements were designated as cash flow hedges that effectively fix the SOFR component of the interest rate on a portion of the outstanding debt under the Term Loan Facility (defined hereafter) at 3.59%.
(3)In November 2023, the Company entered into four forward-starting interest rate swap agreements with an aggregate notional amount of $300.0 million. The forward-starting interest rate swap agreements were designated as cash flow hedges that effectively fix the SOFR component of the interest rate on a portion of the outstanding debt under the Term Loan Facility (defined hereafter) at 4.08% beginning on the effective date.
(4)In December 2023, the Company entered into three forward-starting interest rate swap agreements with an aggregate notional amount of $150.0 million to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $150.0 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending June 2026. The forward-starting interest rate swaps were designated as cash flow hedges.
F-27
Detail on the terms and fair value of the Company’s interest rate derivatives designated as cash flow hedges outstanding as of December 31, 2022 is as follows:
Fair Value
Effective Date
Maturity Date
Swapped Variable Rate
Fixed Rate
Notional Amount
Assets
Liabilities
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5875
%
$
50,000
$
1,604
$
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5960
%
50,000
1,599
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5860
%
100,000
3,218
—
6/1/2022
7/26/2024
1 Month SOFR(1)
2.5850
%
100,000
3,219
—
$
300,000
$
9,640
$
—
(1)Swapped variable rate includes a SOFR adjustment of 10 basis points.
All of the Company’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The fair value of the Company’s interest rate derivatives is determined using market standard valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatility. These inputs are classified as Level 2 of the fair value hierarchy. The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recognized in other comprehensive income (loss) and is reclassified into earnings as interest expense in the period that the hedged transaction affects earnings.
The effective portion of the Company’s interest rate swaps that was recognized on the Company’s Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021 is as follows:
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)
Year Ended December 31,
2023
2022
2021
Change in unrealized gain (loss) on interest rate swaps
$
(2,204)
$
19,602
$
5,144
Amortization (accretion) of interest rate swaps to interest expense
(9,949)
2,624
10,496
Change in unrealized gain (loss) on interest rate swaps, net
$
(12,153)
$
22,226
$
15,640
The Company estimates that $6.5 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges during the years ended December 31, 2023, 2022, and 2021.
Non-Designated (Mark-to-Market) Hedges of Interest Rate Risk
The Company does not use derivatives for trading or speculative purposes. As of December 31, 2023 and 2022, the Company did not have any non-designated hedges.
Credit-risk-related Contingent Features
The Company has agreements with its derivative counterparties that contain provisions whereby if the Company defaults on certain of its indebtedness and the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company were to be declared in default on its derivative contracts, it would be required to settle its obligations under such agreements at their termination value, including accrued interest.
F-28
7. Debt Obligations
As of December 31, 2023 and 2022, the Company had the following indebtedness outstanding:
Carrying Value as of
December 31, 2023
December 31, 2022
Stated
Interest
Rate(1)
Scheduled Maturity Date
Notes payable
Unsecured notes(2)
$
4,418,805
$
4,618,453
2.25% – 7.97%
2024 – 2031
Net unamortized premium
20,974
23,787
Net unamortized debt issuance costs
(17,680)
(22,325)
Total notes payable, net
$
4,422,099
$
4,619,915
Unsecured Credit Facility
Revolving Facility
$
18,500
$
125,000
6.33%
2026
Term Loan Facility(3)(4)(5)
500,000
300,000
6.39%
2027
Net unamortized debt issuance costs
(7,074)
(9,414)
Total Unsecured Credit Facility and term loans
$
511,426
$
415,586
Total debt obligations, net
$
4,933,525
$
5,035,501
(1)Stated interest rates as of December 31, 2023 do not include the impact of the Company’s interest rate swap agreements (described below).
(2)The weighted average stated interest rate on the Company’s unsecured notes was 3.70% as of December 31, 2023.
(3)The Company's Revolving Facility (defined hereafter) and Term Loan Facility (defined hereafter) include a sustainability metric incentive, which can reduce the applicable credit spread by up to two basis points. During the year ended December 31, 2023, the Company concluded that it did not qualify for a reduction to the applicable credit spread during the year ended December 31, 2023 and year ended December 31, 2022 resulting in a less than $0.1 million increase to interest expense.
(4)Effective June 1, 2022, the Company has in place four interest rate swap agreements that convert the variable interest rate on $300.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 2.59% (plus a spread of 95 basis points) through July 26, 2024.
(5)Effective May 1, 2023, the Company has in place three interest rate swap agreements that convert the variable interest rate on $200.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 3.59% (plus a spread of 95 basis points and a SOFR adjustment of 10 basis points) through the maturity of the Term Loan Facility (defined hereafter) on July 27, 2027.
2023 Debt Transactions
The Operating Partnership has an unsecured credit facility as amended and restated on April 28, 2022 (the "Unsecured Credit Facility"), which is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $300.0 million term loan, in addition to a $200.0 million delayed draw term loan, which was drawn on April 24, 2023 (together, the "Term Loan Facility"). During the year ended December 31, 2023, the Operating Partnership repaid $106.5 million, net of borrowings, under its $1.25 billion Revolving Facility, with proceeds from dispositions.
During the year ended December 31, 2023, the Operating Partnership repurchased $199.6 million of its outstanding 3.650% Senior Notes due 2024 (the "2024 Notes") pursuant to a cash tender offer (the "Tender Offer"), with $300.4 million aggregate principal amount of the 2024 Notes remaining outstanding. The Operating Partnership funded the Tender Offer with proceeds from its $200.0 million delayed draw term loan. In connection with the Tender Offer, the Company recognized a $4.4 million gain on extinguishment of debt during the year ended December 31, 2023.
Pursuant to the terms of the Company’s unsecured debt agreements, the Company, among other things, is subject to the maintenance of various financial covenants. The Company was in compliance with these covenants as of December 31, 2023.
F-29
Debt Maturities
As of December 31, 2023 and 2022, the Company had accrued interest of $47.1 million and $47.3 million outstanding, respectively. As of December 31, 2023, scheduled maturities of the Company’s outstanding debt obligations were as follows:
Year ending December 31,
2024
$
300,352
2025
700,000
2026
626,042
2027
900,000
2028
357,708
Thereafter
2,053,203
Total debt maturities
4,937,305
Net unamortized premium
20,974
Net unamortized debt issuance costs
(24,754)
Total debt obligations, net
$
4,933,525
As of the date the financial statements were issued, the Company's scheduled debt maturities for the next 12 months were comprised of the $300.4 million outstanding principal balance on the 2024 Notes.
8. Fair Value Disclosures
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s judgment, reasonably approximate their fair values, except those instruments listed below:
December 31, 2023
December 31, 2022
Carrying Amounts
Fair Value
Carrying Amounts
Fair Value
Notes payable
$
4,422,099
$
4,155,332
$
4,619,915
$
4,148,681
Unsecured Credit Facility
511,426
518,500
415,586
425,056
Total debt obligations, net
$
4,933,525
$
4,673,832
$
5,035,501
$
4,573,737
As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in GAAP that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy).
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Based on the above criteria, the Company has determined that the valuations of its debt obligations are classified within Level 3 of the fair value hierarchy. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.
Recurring Fair Value
The Company’s marketable securities and interest rate derivatives are measured and recognized at fair value on a recurring basis. The valuations of the Company’s marketable securities are based primarily on publicly traded market values in active markets and are classified within Levels 1 and 2 of the fair value hierarchy. See Note 6 for fair value information regarding the Company’s interest rate derivatives.
F-30
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and recognized at fair value on a recurring basis:
Fair Value Measurements as of December 31, 2023
Balance
Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities(1)
$
19,914
$
656
$
19,258
$
—
Interest rate derivatives
$
4,364
$
—
$
4,364
$
—
Liabilities:
Interest rate derivatives
$
(6,877)
$
—
$
(6,877)
$
—
Fair Value Measurements as of December 31, 2022
Balance
Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities(1)
$
21,669
$
1,088
$
20,581
$
—
Interest rate derivatives
$
9,640
$
—
$
9,640
$
—
Liabilities:
Interest rate derivatives
$
—
$
—
$
—
$
—
(1)As of December 31, 2023 and 2022, marketable securities included $0.2 million and $0.8 million of net unrealized losses, respectively. As of December 31, 2023, the contractual maturities of the Company’s marketable securities were within the next five years.
Non-Recurring Fair Value
Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. Fair value is determined by offers from third-party buyers, market comparable data, third-party appraisals, or discounted cash flow analyses. The cash flows utilized in such analyses are comprised of unobservable inputs that include forecasted rental revenue and expenses based upon market conditions and future expectations. The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for the respective properties. Based on these inputs, the Company has determined that the valuations of these properties are classified within Level 3 of the fair value hierarchy.
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and recognized at fair value on a non-recurring basis. The table includes information related to properties that were remeasured to fair value as a result of impairment testing during the year ended December 31, 2023, excluding the properties sold prior to December 31, 2023. During the year ended December 31, 2022, no properties were remeasured to fair value as a result of impairment testing that were not sold prior to December 31, 2022.
Fair Value Measurements as of December 31, 2023
Balance
Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Impairment of Real Estate Assets
Assets:
Properties(1)(2)
$
14,987
$
—
$
—
$
14,987
$
11,705
(1)Excludes properties disposed of prior to December 31, 2023.
(2)The carrying value of The Quentin Collection, which was remeasured to fair value based on an income approach valuation using the direct capitalization method during the year ended December 31, 2023, is $15.0 million. The capitalization rate of 8.75% utilized in the analysis was based upon unobservable inputs that the Company believes to be within a reasonable range of current market rates for the property.
F-31
9. Revenue Recognition
The Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers. Revenue is primarily generated through lease agreements and classified as Rental income on the Company’s Consolidated Statements of Operations. These agreements include retail shopping center unit leases; ground leases; ancillary leases or agreements, such as agreements with tenants for cellular towers, ATMs, and short-term or seasonal retail (e.g. Halloween or Christmas-related retail); and reciprocal easement agreements. The agreements range in term from less than one year to 25 or more years, with certain agreements containing renewal options. These renewal options range from as little as one month to five or more years. The Company’s retail shopping center leases generally require tenants to pay a portion of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the Company’s properties.
As of December 31, 2023, the fixed contractual lease payments to be received over the next five years pursuant to the terms of non-cancelable operating leases are included in the table below, assuming that no leases are renewed and no renewal options are exercised. The table below includes payments from tenants who have taken possession of their space and tenants who have been moved to the cash basis of accounting for revenue recognition purposes. The table does not include variable lease payments that may be received under certain leases for the reimbursement of property operating expenses or certain capital expenditures related to the maintenance of the Company’s properties, or percentage rents. These variable lease payments are recognized, in the case of reimbursements, in the period when the applicable expenditures are incurred and/or contractually required to be reimbursed or, in the case of percentage rents, upon the achievement of certain predetermined sales thresholds.
Year ending December 31,
Operating Leases
2024
$
916,493
2025
824,655
2026
723,463
2027
600,788
2028
480,174
Thereafter
1,509,110
The Company recognized $9.3 million, $9.0 million, and $6.0 million of rental income based on percentage rents for the years ended December 31, 2023, 2022, and 2021, respectively. These amounts are included in Rental income on the Company’s Consolidated Statements of Operations. As of December 31, 2023 and 2022, receivables associated with the effects of recognizing rental income on a straight-line basis were $180.8 million and $159.8 million, respectively.
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10. Leases
The Company periodically enters into agreements in which it is the lessee, including ground leases for shopping centers that it operates and office leases for administrative space. The agreements range in term from less than one year to 50 or more years, with certain agreements containing renewal options for up to an additional 100 years. Upon lease execution, the Company recognizes an operating lease ROU asset and an operating lease liability based on the present value of the minimum lease payments over the non-cancelable lease term. As of December 31, 2023 the Company is not including any prospective renewal or termination options in its ROU assets or lease liabilities, as the exercise of such options is not reasonably certain. Certain agreements require the Company to pay a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the properties. These payments are not included in the calculation of the ROU asset or lease liability and are presented as variable lease costs. The following tables present additional information pertaining to the Company’s operating leases:
Year Ended December 31,
Supplemental Statements of Operations Information
2023
2022
2021
Operating lease costs
$
5,645
$
5,937
$
5,920
Short-term lease costs
—
—
1
Variable lease costs
468
207
329
Total lease costs
$
6,113
$
6,144
$
6,250
Year Ended December 31,
Supplemental Statements of Cash Flows Information
2023
2022
2021
Operating cash outflows from operating leases
$
6,017
$
6,145
$
6,147
ROU assets obtained in exchange for operating lease liabilities
711
10,708
—
ROU assets reduction due to dispositions, held for sale, and lease modifications
(144)
(171)
(229)
Operating Lease Liabilities
As of December 31, 2023
Future minimum operating lease payments:
2024
$
6,066
2025
5,820
2026
5,067
2027
2,851
2028
2,052
Thereafter
31,019
Total future minimum operating lease payments
52,875
Less: imputed interest
(16,770)
Operating lease liabilities
$
36,105
As of December 31,
Supplemental Balance Sheets Information
2023
2022
Operating lease liabilities(1)(2)
$
36,105
$
39,923
ROU assets(1)(3)
32,350
35,754
(1)As of December 31, 2023 and 2022, the weighted average remaining lease term was 16.0 years and 16.0 years, respectively, and the weighted average discount rate was 4.48% and 4.43%, respectively.
(2)These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s Consolidated Balance Sheets.
(3)These amounts are included in Other assets on the Company’s Consolidated Balance Sheets.
As of December 31, 2023, there were no material leases that have been executed but not yet commenced.
F-33
11. Equity and Capital
ATM Program
In November 2022, the Company renewed its at-the-market equity offering program (the "ATM Program") through which the Company may sell, from time to time, up to an aggregate of $400.0 million of its common stock through sales agents. The ATM Program also provides that the Company may enter into forward contracts for shares of its common stock with forward sellers and forward purchasers. The ATM Program is scheduled to expire on November 1, 2025, unless earlier terminated or extended by the Company, sales agents, forward sellers, and forward purchasers. The ATM Program replaced the Company's prior at-the-market equity offering program (the "Prior ATM Program"), which was scheduled to expire on January 9, 2023. During the year ended December 31, 2023, the Company did not issue any shares of common stock under the ATM Program. During the year ended December 31, 2022, the Company issued 2.1 million shares of common stock under the Prior ATM Program at an average price per share of $25.40 for total gross proceeds of $53.9 million, excluding commissions. The Company incurred commissions of $0.7 million in conjunction with the Prior ATM Program for the year ended December 31, 2022. During the year ended December 31, 2021, the Company issued 0.2 million shares of common stock under the Prior ATM Program at an average price per share of $25.06 for total gross proceeds of $5.2 million, excluding commissions. The Company incurred commissions of $0.1 million in conjunction with the Prior ATM Program for the year ended December 31, 2021. As of December 31, 2023, $400.0 million of common stock remained available for issuance under the ATM Program.
Share Repurchase Program
In November 2022, the Company renewed its share repurchase program (the "Repurchase Program") for up to $400.0 million of its common stock. The Repurchase Program is scheduled to expire on November 1, 2025, unless suspended or extended by the Company's board of directors. The Repurchase Program replaced the Company’s prior share repurchase program (the "Prior Repurchase Program"), which was scheduled to expire on January 9, 2023. During the years ended December 31, 2023, 2022, and 2021, the Company did not repurchase any shares of common stock. As of December 31, 2023, the Repurchase Program had $400.0 million of available repurchase capacity.
Common Stock
In connection with the vesting of restricted stock units ("RSUs") under the Company’s equity-based compensation plan, the Company withholds shares to satisfy tax withholding obligations. During the years ended December 31, 2023 and 2022, the Company withheld 0.5 million and 0.4 million shares of its common stock, respectively.
Dividends and Distributions
Because Brixmor Property Group Inc. is a holding company and has no material assets other than its ownership of BPG Sub, through which it owns the Operating Partnership, and no material operations other than those conducted by the Operating Partnership, distributions are funded as follows:
•first, the Operating Partnership makes distributions to its partners that are holders of OP Units, including BPG Sub;
•second, BPG Sub distributes to Brixmor Property Group Inc. its share of such distributions; and
•third, Brixmor Property Group Inc. distributes the amount authorized by the Company's board of directors and declared by Brixmor Property Group Inc. to its common stockholders on a pro rata basis.
During the years ended December 31, 2023, 2022, and 2022, the Company's board of directors declared common stock dividends and OP Unit distributions of $1.0525 per share/unit, $0.9800 per share/unit, and $0.8850 per share/unit, respectively. As of December 31, 2023 and 2022, the Company had declared but unpaid common stock dividends and OP Unit distributions of $85.7 million and $81.6 million, respectively. These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s Consolidated Balance Sheets.
F-34
12. Stock Based Compensation
In February 2022, the Company's board of directors approved the 2022 Omnibus Incentive Plan (the “Plan”) and in April 2022, the Company's stockholders approved the Plan. The Plan provides for a maximum of 10.0 million shares of the Company’s common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock, RSUs, OP Units, performance awards, and other stock-based awards. Prior to the approval of the Plan, awards were issued under the 2013 Omnibus Incentive Plan that the Company's board of directors approved in 2013.
During the years ended December 31, 2023, 2022, and 2021, the Company granted RSUs to certain employees. The RSUs are divided into multiple tranches, which are all subject to service-based vesting conditions. Certain tranches are also subject to performance-based criteria or market-based criteria, which contain a threshold, target, above target, and maximum number of units that can be earned. The number of units actually earned for each tranche is determined based on performance during a specified performance period. Tranches that only have a service-based component can only earn a target number of units. The aggregate number of RSUs granted, assuming the achievement of target level performance, was 0.7 million, 0.7 million, and 1.0 million for the years ended December 31, 2023, 2022, and 2021, respectively, with vesting periods ranging from one to five years. For the service-based RSUs granted, fair value is based on the Company’s grant date stock price or the grant date stock price adjusted for dividend or dividend equivalent rights, when applicable. For the market-based RSUs granted, fair value is based on a Monte Carlo simulation model that assesses the probability of satisfying the market performance hurdles over the remainder of the performance period based on the Company’s historical common stock performance relative to the other companies within the FTSE Nareit Equity Shopping Centers Index as well as the following significant assumptions:
Year Ended December 31,
Assumption
2023
2022
2021
Volatility
32.0% - 52.0%
27.0% - 51.0%
50.0% - 64.0%
Weighted average risk-free interest rate
3.79% - 5.18%
1.08% - 1.39%
0.11% - 0.18%
Weighted average common stock dividend yield
4.3% - 4.8%
3.8% - 4.6%
4.1% - 5.8%
Information with respect to RSUs for the years ended December 31, 2023, 2022, and 2021 are as follows (in thousands):
Restricted Shares
Aggregate Intrinsic Value
Outstanding, December 31, 2020
1,974
$
39,628
Vested
(834)
(14,396)
Granted
1,225
22,406
Forfeited
(57)
(1,091)
Outstanding, December 31, 2021
2,308
46,547
Vested
(994)
(18,955)
Granted
981
25,476
Forfeited
(28)
(597)
Outstanding, December 31, 2022
2,267
52,471
Vested
(1,162)
(22,583)
Granted
1,137
25,316
Forfeited
(48)
(1,112)
Outstanding, December 31, 2023
2,194
$
54,092
During the years ended December 31, 2023, 2022, and 2021, the Company recognized $22.3 million, $25.2 million, and $18.6 million of equity compensation expense, respectively, of which $1.6 million, $1.8 million, and $1.5 million was capitalized, respectively. These amounts are included in General and administrative expense on the Company’s Consolidated Statements of Operations. As of December 31, 2023, the Company had $17.4 million of total unrecognized compensation expense related to unvested stock compensation, which is expected to be recognized over a weighted average period of approximately 2.1 years.
F-35
13. Earnings per Share
Basic earnings per share ("EPS") is calculated by dividing net income attributable to the Company’s common stockholders, including any participating securities, by the weighted average number of shares outstanding for the period. Certain restricted shares issued pursuant to the Company’s share-based compensation program are considered participating securities, as such stockholders have rights to receive non-forfeitable dividends. Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Company’s common stock.
The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands, except per share data):
Year Ended December 31,
2023
2022
2021
Computation of Basic Earnings Per Share:
Net income
$
305,087
$
354,193
$
270,187
Non-forfeitable dividends on unvested restricted shares
(828)
(1,002)
(748)
Net income attributable to the Company’s common stockholders for basic earnings per share
$
304,259
$
353,191
$
269,439
Weighted average shares outstanding – basic
300,977
299,938
297,408
Basic earnings per share attributable to the Company’s common stockholders:
Net income per share
$
1.01
$
1.18
$
0.91
Computation of Diluted Earnings Per Share:
Net income attributable to the Company’s common stockholders for diluted earnings per share
$
304,259
$
353,191
$
269,439
Weighted average shares outstanding – basic
300,977
299,938
297,408
Effect of dilutive securities:
Equity awards
1,399
1,804
1,427
Weighted average shares outstanding – diluted
302,376
301,742
298,835
Diluted earnings per share attributable to the Company’s common stockholders:
Net income per share
$
1.01
$
1.17
$
0.90
F-36
14. Earnings per Unit
Basic earnings per unit is calculated by dividing net income attributable to the Operating Partnership’s common unitholders, including any participating securities, by the weighted average number of partnership common units outstanding for the period. Certain restricted units issued pursuant to the Company’s share-based compensation program are considered participating securities, as such unitholders have rights to receive non-forfeitable dividends. Fully-diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Operating Partnership’s common units.
The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands, except per unit data):
Year Ended December 31,
2023
2022
2021
Computation of Basic Earnings Per Unit:
Net income
$
305,087
$
354,193
$
270,187
Non-forfeitable dividends on unvested restricted units
(828)
(1,002)
(748)
Net income attributable to the Operating Partnership’s common units for basic earnings per unit
$
304,259
$
353,191
$
269,439
Weighted average common units outstanding – basic
300,977
299,938
297,408
Basic earnings per unit attributable to the Operating Partnership’s common units:
Net income per unit
$
1.01
$
1.18
$
0.91
Computation of Diluted Earnings Per Unit:
Net income attributable to the Operating Partnership’s common units for diluted earnings per unit
$
304,259
$
353,191
$
269,439
Weighted average common units outstanding – basic
300,977
299,938
297,408
Effect of dilutive securities:
Equity awards
1,399
1,804
1,427
Weighted average common units outstanding – diluted
302,376
301,742
298,835
Diluted earnings per unit attributable to the Operating Partnership’s common units:
Net income per unit
$
1.01
$
1.17
$
0.90
F-37
15. Commitments and Contingencies
Legal Matters
The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, taking into account existing reserves, will have a material impact on the Company’s financial condition, operating results, or cash flows.
Insurance Captive
The Company has a wholly-owned captive insurance company, Brixmor Incap, LLC (“Incap”). Incap underwrites the first layer of general liability insurance for the properties in the Company’s Portfolio. The Company formed Incap as part of its overall risk management program to stabilize insurance costs, manage exposures, and recoup expenses through the function of the captive program. Incap is capitalized in accordance with the applicable regulatory requirements. An actuarial analysis is performed to estimate future projected claims, related deductibles, and projected expenses necessary to fund associated risk management programs. Incap establishes annual premiums based on projections derived from the past loss experience of the Company’s Portfolio. Premiums paid to Incap may be adjusted based on this estimate and may be reimbursed by the Company’s tenants pursuant to specific lease terms.
Activity in the reserve for losses for the years ended December 31, 2023 and 2022 is summarized as follows:
Year End December 31,
2023
2022
Balance at the beginning of the year
$
10,689
$
10,095
Incurred related to:
Current year
3,320
3,002
Prior years
(457)
(86)
Total incurred
2,863
2,916
Paid related to:
Current year
(771)
(98)
Prior years
(2,923)
(2,224)
Total paid
(3,694)
(2,322)
Balance at the end of the year
$
9,858
$
10,689
Environmental Matters
Under various federal, state, and local laws, ordinances, and regulations, the Company may be or become liable for the costs of removal or remediation of certain hazardous or toxic substances released on or in the Company’s properties or disposed of by the Company or its tenants, as well as certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). The Company maintains a reserve for currently known environmental matters and does not believe they will have a material impact on the Company’s financial condition, operating results, or cash flows. During the years ended December 31, 2023, 2022, and 2021, the Company did not incur any material governmental fines resulting from environmental matters.
F-38
16. Income Taxes
The Company incurred income and other taxes of $2.6 million, $2.7 million, and $0.8 million for the years ended December 31, 2023, 2022, and 2021. These amounts are included in Other on the Company’s Consolidated Statements of Operations. See Note 1 for additional information regarding the Company’s income taxes and the Parent Company's REIT status.
17. Related-Party Transactions
As of December 31, 2023 and 2022, there were no material receivables from or payables to related parties. During the years ended December 31, 2023, 2022, and 2021, the Company did not engage in any material related-party transactions.
18. Retirement Plan
The Company has a Retirement and 401(k) Savings Plan (the "Savings Plan") covering officers and employees of the Company. Participants in the Savings Plan may elect to contribute a portion of their earnings to the Savings Plan and the Company makes a matching contribution to the Savings Plan, up to a maximum of 3% of the employee’s eligible compensation. For the years ended December 31, 2023, 2022, and 2021, the Company’s expense for the Savings Plan was $2.0 million, $1.8 million, and $1.6 million, respectively. These amounts are included in General and administrative on the Company’s Consolidated Statements of Operations.
19. Supplemental Financial Information
No retrospective adjustments were made to the Company’s Consolidated Financial Statements for the years ended December 31, 2023, 2022, and 2021.
20. Subsequent Events
In preparing the Consolidated Financial Statements, the Company has evaluated events and transactions occurring after December 31, 2023 for recognition and/or disclosure purposes. Based on this evaluation, there were no subsequent events from December 31, 2023 through the date the financial statements were issued other than the following:
•On January 12, 2024, the Operating Partnership issued $400.0 million aggregate principal amount of 5.500% Senior Notes due 2034 (the "2034 Notes") at 99.816% of par, the Operating Partnership intends to use the net proceeds for general corporate purposes, including the repayment of indebtedness. The 2034 Notes bear interest at a rate of 5.500% per annum, payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2024. The 2034 Notes will mature on February 15, 2034.
F-39
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
None.
F-40
BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
(in thousands)
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
Springdale
Mobile, AL
$
7,460
$
39,380
$
25,724
$
7,460
$
65,104
$
72,564
$
(22,996)
2004
Jun-11
Northmall Centre
Tucson, AZ
3,140
18,882
(2,783)
2,202
17,037
19,239
(7,578)
1996
Jun-11
Bakersfield Plaza
Bakersfield, CA
4,000
25,537
15,156
4,502
40,191
44,693
(18,328)
1970
Jun-11
Brea Gateway
Brea, CA
23,716
68,925
1,897
23,716
70,822
94,538
(6,720)
1994
Jan-22
Carmen Plaza
Camarillo, CA
5,410
19,784
2,401
5,410
22,185
27,595
(7,640)
2000
Jun-11
Plaza Rio Vista
Cathedral, CA
2,465
12,687
1,040
2,465
13,727
16,192
(4,917)
2005
Oct-13
Cudahy Plaza
Cudahy, CA
4,490
13,474
22,109
4,778
35,295
40,073
(10,266)
2021
Jun-11
The Davis Collection (6)
Davis, CA
4,270
18,372
4,541
4,270
22,913
27,183
(5,520)
2024
Jun-11
Felicita Plaza
Escondido, CA
4,280
12,464
1,533
4,280
13,997
18,277
(6,371)
2001
Jun-11
Felicita Town Center
Escondido, CA
11,231
31,381
1,303
11,231
32,684
43,915
(9,205)
1987
Dec-16
Arbor - Broadway Faire
Fresno, CA
5,940
34,123
(7,078)
4,340
28,645
32,985
(11,923)
1995
Jun-11
Lompoc Center
Lompoc, CA
4,670
16,321
6,993
4,670
23,314
27,984
(7,542)
1960
Jun-11
Briggsmore Plaza
Modesto, CA
2,140
12,257
577
1,819
13,155
14,974
(5,386)
1998
Jun-11
Montebello Plaza
Montebello, CA
13,360
33,743
8,228
13,360
41,971
55,331
(18,650)
1974
Jun-11
California Oaks Center
Murrieta, CA
5,180
15,441
5,357
5,180
20,798
25,978
(7,969)
1990
Jun-11
Pacoima Center
Pacoima, CA
7,050
15,955
1,472
7,050
17,427
24,477
(10,505)
1995
Jun-11
Metro 580
Pleasanton, CA
10,500
19,409
1,580
10,500
20,989
31,489
(10,464)
1996
Jun-11
Rose Pavilion
Pleasanton, CA
19,618
63,140
14,717
19,618
77,857
97,475
(27,469)
2019
Jun-11
Puente Hills Town Center (6)
Rowland Heights, CA
15,670
39,997
6,891
15,670
46,888
62,558
(16,510)
2024
Jun-11
Ocean View Plaza
San Clemente, CA
15,750
30,757
2,954
15,750
33,711
49,461
(12,372)
1990
Jun-11
Plaza By The Sea
San Clemente, CA
9,607
5,461
5,889
9,607
11,350
20,957
(1,875)
1976
Dec-17
Village at Mira Mesa
San Diego, CA
14,870
75,271
37,419
14,870
112,690
127,560
(37,112)
2023
Jun-11
San Dimas Plaza
San Dimas, CA
15,101
22,299
4,094
15,101
26,393
41,494
(9,862)
1986
Jun-11
Bristol Plaza
Santa Ana, CA
9,110
21,367
4,833
9,722
25,588
35,310
(8,749)
2003
Jun-11
Gateway Plaza
Santa Fe Springs, CA
9,980
31,263
2,111
9,980
33,374
43,354
(16,829)
2002
Jun-11
Santa Paula Center
Santa Paula, CA
3,520
18,079
1,242
3,520
19,321
22,841
(9,075)
1995
Jun-11
Vail Ranch Center (6)
Temecula, CA
3,750
22,933
10,552
3,750
33,485
37,235
(10,535)
2024
Jun-11
Country Hills Shopping Center
Torrance, CA
3,630
8,716
100
3,589
8,857
12,446
(3,426)
1977
Jun-11
Upland Town Square
Upland, CA
9,051
23,171
1,345
9,051
24,516
33,567
(6,851)
1994
Nov-17
Gateway Plaza - Vallejo
Vallejo, CA
12,947
77,377
28,226
12,947
105,603
118,550
(36,760)
2023
Jun-11
Arvada Plaza
Arvada, CO
1,160
7,378
608
1,160
7,986
9,146
(4,933)
1994
Jun-11
Arapahoe Crossings
Aurora, CO
13,676
56,971
13,968
13,676
70,939
84,615
(24,913)
1996
Jul-13
Aurora Plaza
Aurora, CO
5,824
9,309
10,815
5,824
20,124
25,948
(7,141)
1996
Jun-11
Villa Monaco
Denver, CO
3,090
7,551
4,076
3,090
11,627
14,717
(4,626)
1978
Jun-11
Centennial Shopping Center
Englewood, CO
6,755
11,721
2,355
6,755
14,076
20,831
(2,741)
2013
Apr-19
Superior Marketplace
Superior, CO
7,090
37,670
5,054
6,924
42,890
49,814
(17,233)
1997
Jun-11
Westminster City Center (6)
Westminster, CO
6,040
45,099
18,486
6,040
63,585
69,625
(21,923)
2024
Jun-11
The Shoppes at Fox Run
Glastonbury, CT
3,550
23,162
5,130
3,600
28,242
31,842
(12,201)
1974
Jun-11
Parkway Plaza
Hamden, CT
4,100
7,844
84
4,100
7,928
12,028
(3,290)
2006
Jun-11
The Manchester Collection
Manchester, CT
8,200
51,455
(12,464)
7,627
39,564
47,191
(15,513)
2001
Jun-11
Turnpike Plaza
Newington, CT
3,920
23,880
(2,537)
3,920
21,343
25,263
(9,150)
2004
Jun-11
North Haven Crossing
North Haven, CT
5,430
16,371
3,022
5,430
19,393
24,823
(7,109)
1993
Jun-11
Colonial Commons - Orange
Orange, CT
4,870
15,160
(561)
4,870
14,599
19,469
(4,578)
1996
Jun-11
Stratford Square
Stratford, CT
5,970
12,433
7,633
5,860
20,176
26,036
(8,100)
1984
Jun-11
Waterbury Plaza
Waterbury, CT
5,420
18,062
1,749
4,793
20,438
25,231
(8,504)
2000
Jun-11
Waterford Commons
Waterford, CT
5,437
46,769
5,216
5,437
51,985
57,422
(21,319)
2004
Jun-11
Center of Bonita Springs
Bonita Springs, FL
10,946
38,467
3,655
10,946
42,122
53,068
(5,310)
2014
Apr-21
Coastal Way - Coastal Landing
Brooksville, FL
8,840
34,027
6,572
8,840
40,599
49,439
(15,551)
2008
Jun-11
Clearwater Mall
Clearwater, FL
15,300
55,060
7,434
15,300
62,494
77,794
(22,082)
1973
Jun-11
Coconut Creek Plaza
Coconut Creek, FL
7,400
25,600
6,657
7,400
32,257
39,657
(13,398)
2005
Jun-11
Century Plaza Shopping Center
Deerfield Beach, FL
3,050
8,688
4,389
3,050
13,077
16,127
(4,763)
2006
Jun-11
Northgate Shopping Center
DeLand, FL
3,500
11,008
3,701
3,500
14,709
18,209
(4,781)
1993
Jun-11
Sun Plaza
Fort Walton Beach, FL
4,480
12,658
2,126
4,480
14,784
19,264
(7,532)
2004
Jun-11
Normandy Square
Jacksonville, FL
1,936
5,567
1,849
1,936
7,416
9,352
(3,627)
1996
Jun-11
Regency Park Shopping Center
Jacksonville, FL
6,240
15,561
8,294
6,240
23,855
30,095
(8,807)
1985
Jun-11
Ventura Downs
Kissimmee, FL
3,580
8,237
5,254
3,580
13,491
17,071
(4,555)
2018
Jun-11
Marketplace at Wycliffe
Lake Worth, FL
7,930
16,228
396
7,930
16,624
24,554
(5,466)
2002
Jun-11
Venetian Isle Shopping Ctr
Lighthouse Point, FL
8,270
15,030
1,372
8,270
16,402
24,672
(6,567)
1992
Jun-11
Marco Town Center
Marco Island, FL
7,235
27,490
12,318
7,235
39,808
47,043
(9,526)
2023
Oct-13
Mall at 163rd Street
Miami, FL
9,450
36,810
3,010
9,450
39,820
49,270
(13,561)
2007
Jun-11
Shops at Palm Lakes
Miami, FL
10,896
17,596
24,497
10,896
42,093
52,989
(7,181)
2023
Jun-11
Freedom Square
Naples, FL
4,760
15,328
11,073
4,735
26,426
31,161
(6,794)
2021
Jun-11
F-41
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
Granada Shoppes
Naples, FL
34,061
69,551
3,814
34,061
73,365
107,426
(7,409)
2011
Dec-21
Naples Plaza
Naples, FL
9,200
20,738
10,340
9,200
31,078
40,278
(12,919)
2013
Jun-11
Park Shore Plaza
Naples, FL
7,245
16,555
21,477
7,245
38,032
45,277
(16,091)
2017
Jun-11
Chelsea Place
New Port Richey, FL
3,303
9,879
286
3,303
10,165
13,468
(3,883)
1992
Oct-13
Presidential Plaza West
North Lauderdale, FL
2,070
5,634
2,219
2,070
7,853
9,923
(2,736)
2006
Jun-11
Colonial Marketplace
Orlando, FL
4,230
20,242
3,612
4,230
23,854
28,084
(10,815)
1986
Jun-11
Conway Crossing
Orlando, FL
3,208
12,496
558
3,163
13,099
16,262
(5,317)
2002
Oct-13
Hunter's Creek Plaza
Orlando, FL
3,589
6,907
2,676
3,589
9,583
13,172
(3,622)
1998
Oct-13
Pointe Orlando (6)
Orlando, FL
6,120
56,697
57,389
6,120
114,086
120,206
(32,538)
2024
Jun-11
Martin Downs Town Center
Palm City, FL
1,660
9,945
225
1,660
10,170
11,830
(3,366)
1996
Oct-13
Martin Downs Village Center
Palm City, FL
5,319
28,998
1,696
5,319
30,694
36,013
(10,690)
1987
Jun-11
23rd Street Station
Panama City, FL
3,120
9,115
1,833
3,120
10,948
14,068
(3,388)
1995
Jun-11
Panama City Square
Panama City, FL
5,690
15,789
6,687
5,690
22,476
28,166
(7,060)
1989
Jun-11
East Port Plaza (6)
Port St. Lucie, FL
4,099
22,498
5,294
4,099
27,792
31,891
(7,607)
2024
Oct-13
Shoppes of Victoria Square
Port St. Lucie, FL
3,450
6,789
1,052
3,450
7,841
11,291
(3,532)
1990
Jun-11
Lake St. Charles
Riverview, FL
2,801
6,966
428
2,801
7,394
10,195
(2,529)
1999
Oct-13
Cobblestone Village
Royal Palm Beach, FL
2,700
5,473
718
2,700
6,191
8,891
(2,231)
2005
Jun-11
Beneva Village Shoppes
Sarasota, FL
4,013
19,403
11,295
4,013
30,698
34,711
(9,986)
2020
Oct-13
Sarasota Village
Sarasota, FL
5,190
12,728
4,204
5,190
16,932
22,122
(6,875)
1972
Jun-11
Atlantic Plaza
Satellite Beach, FL
2,630
11,609
4,753
2,630
16,362
18,992
(5,815)
2008
Jun-11
Seminole Plaza
Seminole, FL
3,870
8,410
12,817
3,870
21,227
25,097
(6,487)
2020
Jun-11
Cobblestone Village
St. Augustine, FL
9,850
34,113
5,833
9,850
39,946
49,796
(16,823)
2003
Jun-11
Dolphin Village
St. Pete Beach, FL
9,882
16,220
3,737
9,882
19,957
29,839
(6,233)
1990
Oct-13
Rutland Plaza
St. Petersburg, FL
3,880
8,513
1,636
3,880
10,149
14,029
(4,553)
2002
Jun-11
Tyrone Gardens
St. Petersburg, FL
5,690
10,456
9,090
5,690
19,546
25,236
(6,014)
2023
Jun-11
Downtown Publix
Stuart, FL
1,770
12,909
5,607
1,770
18,516
20,286
(6,383)
2000
Jun-11
Sunrise Town Center
Sunrise, FL
9,166
10,338
(2,158)
7,856
9,490
17,346
(3,842)
1989
Oct-13
Carrollwood Center
Tampa, FL
3,749
15,194
1,192
3,749
16,386
20,135
(6,815)
2002
Oct-13
Ross Plaza
Tampa, FL
2,808
12,205
(192)
2,640
12,181
14,821
(4,521)
1996
Oct-13
Tarpon Mall
Tarpon Springs, FL
7,800
14,221
4,686
7,800
18,907
26,707
(9,863)
2003
Jun-11
Venice Plaza
Venice, FL
3,245
14,650
2,376
3,245
17,026
20,271
(4,876)
1999
Oct-13
Venice Shopping Center
Venice, FL
2,555
6,847
2,927
2,555
9,774
12,329
(2,926)
2000
Oct-13
Venice Village
Venice, FL
7,157
26,773
10,733
7,157
37,506
44,663
(7,330)
2022
Nov-17
Mansell Crossing
Alpharetta, GA
19,840
34,689
(5,953)
15,461
33,115
48,576
(13,720)
1993
Jun-11
Northeast Plaza
Atlanta, GA
6,907
38,776
4,147
6,907
42,923
49,830
(16,015)
1952
Jun-11
Sweetwater Village
Austell, GA
1,080
3,119
989
1,080
4,108
5,188
(2,220)
1985
Jun-11
Vineyards at Chateau Elan
Braselton, GA
2,202
14,690
743
2,202
15,433
17,635
(5,618)
2002
Oct-13
Salem Road Station
Covington, GA
670
11,517
1,084
670
12,601
13,271
(4,464)
2000
Oct-13
Keith Bridge Commons
Cumming, GA
1,601
15,162
1,022
1,601
16,184
17,785
(5,749)
2002
Oct-13
Northside
Dalton, GA
1,320
4,220
1,202
1,320
5,422
6,742
(1,729)
2001
Jun-11
Cosby Station
Douglasville, GA
2,650
6,660
846
2,650
7,506
10,156
(3,143)
1994
Jun-11
Park Plaza
Douglasville, GA
1,470
2,870
1,313
1,470
4,183
5,653
(1,736)
1986
Jun-11
Venture Pointe
Duluth, GA
2,460
7,995
5,797
2,460
13,792
16,252
(8,043)
1995
Jun-11
Banks Station
Fayetteville, GA
3,490
13,060
1,408
3,517
14,441
17,958
(6,705)
2006
Jun-11
Barrett Place
Kennesaw, GA
6,990
14,370
2,083
6,990
16,453
23,443
(6,172)
1992
Jun-11
Shops of Huntcrest
Lawrenceville, GA
2,093
18,230
699
2,093
18,929
21,022
(6,259)
2003
Oct-13
Mableton Walk
Mableton, GA
1,660
9,467
2,422
1,645
11,904
13,549
(4,387)
1994
Jun-11
The Village at Mableton
Mableton, GA
2,040
6,647
19,658
2,040
26,305
28,345
(4,685)
2023
Jun-11
Eastlake Plaza
Marietta, GA
2,650
2,774
2,598
2,650
5,372
8,022
(1,352)
1982
Jun-11
New Chastain Corners
Marietta, GA
3,090
8,243
3,517
3,090
11,760
14,850
(4,670)
2004
Jun-11
Pavilions at Eastlake
Marietta, GA
4,770
12,874
3,623
4,770
16,497
21,267
(7,097)
1996
Jun-11
Creekwood Village
Rex, GA
1,400
4,893
585
1,400
5,478
6,878
(2,627)
1990
Jun-11
Connexion
Roswell, GA
2,627
28,074
885
2,627
28,959
31,586
(2,749)
2016
Dec-21
Holcomb Bridge Crossing
Roswell, GA
1,170
5,633
5,154
1,170
10,787
11,957
(5,263)
1988
Jun-11
Kings Market
Roswell, GA
6,758
33,899
4,053
6,758
37,952
44,710
(4,100)
2005
Dec-21
Victory Square
Savannah, GA
6,230
15,043
1,923
6,080
17,116
23,196
(6,208)
2007
Jun-11
Stockbridge Village
Stockbridge, GA
6,210
17,734
3,361
5,872
21,433
27,305
(9,662)
2008
Jun-11
Stone Mountain Festival
Stone Mountain, GA
5,740
17,078
(6,794)
3,328
12,696
16,024
(3,962)
2006
Jun-11
Wilmington Island
Wilmington Island, GA
2,630
8,108
1,215
2,630
9,323
11,953
(3,490)
1985
Oct-13
Annex of Arlington
Arlington Heights, IL
4,373
19,431
10,655
4,373
30,086
34,459
(12,292)
1999
Jun-11
Ridge Plaza
Arlington Heights, IL
3,720
11,128
3,945
3,720
15,073
18,793
(7,996)
2000
Jun-11
Southfield Plaza
Bridgeview, IL
5,880
18,756
5,386
5,880
24,142
30,022
(10,813)
2006
Jun-11
Commons of Chicago Ridge
Chicago Ridge, IL
4,310
39,714
7,792
4,310
47,506
51,816
(21,836)
1998
Jun-11
Rivercrest Shopping Center
Crestwood, IL
11,010
41,063
12,235
11,010
53,298
64,308
(21,594)
1992
Jun-11
The Commons of Crystal Lake
Crystal Lake, IL
3,660
32,993
5,833
3,660
38,826
42,486
(14,836)
1987
Jun-11
Elmhurst Crossing
Elmhurst, IL
5,816
81,784
1,446
5,816
83,230
89,046
(5,917)
2005
Apr-22
F-42
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
The Quentin Collection
Kildeer, IL
6,002
27,280
(9,242)
3,279
20,761
24,040
(9,808)
2006
Jun-11
Butterfield Square
Libertyville, IL
3,430
13,370
3,527
3,430
16,897
20,327
(6,557)
1997
Jun-11
High Point Centre
Lombard, IL
7,510
21,583
9,128
7,510
30,711
38,221
(9,987)
2019
Jun-11
Long Meadow Commons
Mundelein, IL
4,700
11,597
3,569
4,700
15,166
19,866
(7,873)
1997
Jun-11
Westridge Court
Naperville, IL
11,150
75,719
20,385
10,560
96,694
107,254
(30,958)
1992
Jun-11
North Riverside Plaza
North Riverside, IL
5,117
57,577
825
5,117
58,402
63,519
(5,464)
2007
Apr-22
Ravinia Plaza
Orland Park, IL
2,069
24,288
579
2,069
24,867
26,936
(2,108)
1990
Feb-22
Rollins Crossing
Round Lake Beach, IL
3,040
23,623
(2,167)
2,637
21,859
24,496
(10,472)
1998
Jun-11
Tinley Park Plaza (6)
Tinley Park, IL
12,250
22,511
22,779
12,250
45,290
57,540
(10,179)
2024
Jun-11
Meridian Village
Carmel, IN
2,290
7,746
3,070
2,089
11,017
13,106
(4,771)
1990
Jun-11
Columbus Center
Columbus, IN
1,480
14,740
7,516
1,480
22,256
23,736
(7,803)
1964
Jun-11
Market Centre
Goshen, IN
2,000
17,032
12,616
1,765
29,883
31,648
(8,769)
1994
Jun-11
Speedway Super Center
Speedway, IN
8,410
50,006
26,478
8,410
76,484
84,894
(27,439)
2022
Jun-11
Sagamore Park Centre
West Lafayette, IN
2,390
11,150
2,654
2,390
13,804
16,194
(6,074)
2018
Jun-11
Westchester Square
Lenexa, KS
3,250
14,555
4,068
3,250
18,623
21,873
(7,673)
1987
Jun-11
West Loop Shopping Center
Manhattan, KS
2,800
12,622
5,821
2,800
18,443
21,243
(8,589)
2013
Jun-11
North Dixie Plaza
Elizabethtown, KY
2,370
6,119
(868)
2,108
5,513
7,621
(2,395)
1992
Jun-11
Florence Plaza - Florence Square
Florence, KY
11,014
53,088
28,160
11,014
81,248
92,262
(31,849)
2014
Jun-11
Jeffersontown Commons
Jeffersontown, KY
3,920
14,866
313
3,920
15,179
19,099
(6,544)
1959
Jun-11
London Marketplace
London, KY
1,400
10,362
5,388
1,400
15,750
17,150
(4,724)
1994
Jun-11
Eastgate Shopping Center
Louisville, KY
4,300
13,975
3,660
4,300
17,635
21,935
(8,701)
2002
Jun-11
Plainview Village
Louisville, KY
2,600
10,541
1,729
2,600
12,270
14,870
(5,350)
1997
Jun-11
Stony Brook I & II
Louisville, KY
3,650
17,970
2,182
3,650
20,152
23,802
(8,958)
1988
Jun-11
Points West Plaza
Brockton, MA
2,200
10,605
2,446
2,200
13,051
15,251
(4,222)
1960
Jun-11
Burlington Square I, II & III
Burlington, MA
4,690
13,122
3,343
4,690
16,465
21,155
(6,489)
1992
Jun-11
Holyoke Shopping Center
Holyoke, MA
3,110
12,097
1,671
3,110
13,768
16,878
(6,663)
2000
Jun-11
WaterTower Plaza (6)
Leominster, MA
10,400
40,312
13,991
10,342
54,361
64,703
(16,614)
2024
Jun-11
Lunenberg Crossing
Lunenburg, MA
930
1,991
823
930
2,814
3,744
(1,211)
1994
Jun-11
Lynn Marketplace
Lynn, MA
3,100
5,678
5,155
3,100
10,833
13,933
(2,938)
1968
Jun-11
Webster Square Shopping Center
Marshfield, MA
5,532
27,284
1,428
5,532
28,712
34,244
(9,433)
2005
Jun-15
Berkshire Crossing
Pittsfield, MA
5,210
39,558
(7,156)
2,771
34,841
37,612
(15,686)
1994
Jun-11
Westgate Plaza
Westfield, MA
2,494
9,850
1,635
2,494
11,485
13,979
(3,542)
1996
Jun-11
Perkins Farm Marketplace
Worcester, MA
2,150
17,060
6,749
2,150
23,809
25,959
(10,376)
1967
Jun-11
South Plaza Shopping Center
California, MD
2,174
23,209
164
2,174
23,373
25,547
(7,521)
2005
Oct-13
Fox Run
Prince Frederick, MD
3,560
31,431
23,344
3,396
54,939
58,335
(15,261)
2022
Jun-11
Pine Tree Shopping Center
Portland, ME
2,860
19,182
2,590
2,860
21,772
24,632
(12,872)
1958
Jun-11
Arborland Center
Ann Arbor, MI
20,174
90,938
1,634
20,174
92,572
112,746
(26,838)
2000
Mar-17
Maple Village
Ann Arbor, MI
3,200
19,108
32,492
3,200
51,600
54,800
(15,782)
2020
Jun-11
Grand Crossing
Brighton, MI
1,780
7,540
2,233
1,780
9,773
11,553
(4,592)
2005
Jun-11
Farmington Crossroads
Farmington, MI
1,620
4,542
1,612
1,620
6,154
7,774
(3,171)
1986
Jun-11
Silver Pointe Shopping Center
Fenton, MI
3,840
12,631
4,835
3,840
17,466
21,306
(7,423)
1996
Jun-11
Cascade East
Grand Rapids, MI
1,280
5,433
3,123
1,280
8,556
9,836
(3,507)
1983
Jun-11
Delta Center
Lansing, MI
1,580
9,616
(1,072)
1,518
8,606
10,124
(3,448)
1985
Jun-11
Lakes Crossing
Muskegon, MI
1,440
13,571
771
1,200
14,582
15,782
(6,844)
2008
Jun-11
Redford Plaza
Redford, MI
7,510
20,174
9,386
7,510
29,560
37,070
(11,720)
1992
Jun-11
Hampton Village Centre
Rochester Hills, MI
5,370
48,930
21,976
5,370
70,906
76,276
(25,763)
2004
Jun-11
Southfield Plaza
Southfield, MI
1,320
4,085
2,993
1,320
7,078
8,398
(3,658)
1970
Jun-11
18 Ryan
Sterling Heights, MI
3,160
11,304
(304)
3,160
11,000
14,160
(3,969)
1997
Jun-11
Delco Plaza
Sterling Heights, MI
2,860
7,025
(205)
2,860
6,820
9,680
(2,884)
1996
Jun-11
West Ridge
Westland, MI
1,800
6,640
3,505
1,800
10,145
11,945
(4,405)
1989
Jun-11
Washtenaw Fountain Plaza
Ypsilanti, MI
2,030
7,234
2,517
2,030
9,751
11,781
(3,726)
2005
Jun-11
Southport Centre I - VI
Apple Valley, MN
4,960
18,527
1,294
4,602
20,179
24,781
(7,338)
1985
Jun-11
Champlin Marketplace
Champlin, MN
3,985
11,375
1,338
3,985
12,713
16,698
(1,867)
2005
Jun-21
Burning Tree Plaza
Duluth, MN
4,790
16,279
3,540
4,790
19,819
24,609
(7,656)
1987
Jun-11
Westwind Plaza
Minnetonka, MN
2,630
12,171
2,800
2,630
14,971
17,601
(5,092)
2007
Jun-11
Richfield Hub
Richfield, MN
7,960
19,907
510
7,619
20,758
28,377
(7,216)
1952
Jun-11
Roseville Center
Roseville, MN
1,620
8,593
7,679
1,620
16,272
17,892
(4,402)
2021
Jun-11
Marketplace @ 42
Savage, MN
5,150
13,221
4,806
5,100
18,077
23,177
(7,392)
1999
Jun-11
Sun Ray Shopping Center
St. Paul, MN
5,250
21,447
1,025
4,733
22,989
27,722
(10,723)
1958
Jun-11
White Bear Hills Shopping Center
White Bear Lake, MN
1,790
6,182
2,152
1,790
8,334
10,124
(3,893)
1996
Jun-11
Ellisville Square
Ellisville, MO
4,144
8,003
4,842
4,144
12,845
16,989
(6,287)
1989
Jun-11
Watts Mill Plaza
Kansas City, MO
2,610
13,868
1,812
2,610
15,680
18,290
(5,575)
1997
Jun-11
Liberty Corners
Liberty, MO
2,530
8,918
3,764
2,530
12,682
15,212
(5,664)
1987
Jun-11
Maplewood Square
Maplewood, MO
1,450
4,720
538
1,450
5,258
6,708
(1,609)
1998
Jun-11
Devonshire Place
Cary, NC
940
4,533
4,848
940
9,381
10,321
(5,352)
1996
Jun-11
McMullen Creek Market
Charlotte, NC
10,590
24,266
9,824
10,590
34,090
44,680
(13,419)
1988
Jun-11
F-43
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
The Commons at Chancellor Park
Charlotte, NC
5,240
20,500
2,848
5,240
23,348
28,588
(10,167)
1994
Jun-11
Garner Towne Square
Garner, NC
6,233
23,681
5,100
6,233
28,781
35,014
(7,616)
1997
Oct-13
Franklin Square
Gastonia, NC
7,060
29,355
6,291
7,060
35,646
42,706
(13,921)
1989
Jun-11
Wendover Place
Greensboro, NC
15,990
42,299
3,447
15,881
45,855
61,736
(19,251)
2000
Jun-11
University Commons
Greenville, NC
5,350
26,253
4,197
5,350
30,450
35,800
(12,760)
1996
Jun-11
Roxboro Square
Roxboro, NC
1,550
8,976
706
1,550
9,682
11,232
(6,291)
2005
Jun-11
Innes Street Market
Salisbury, NC
12,180
27,462
836
10,548
29,930
40,478
(14,906)
2002
Jun-11
New Centre Market
Wilmington, NC
5,730
15,217
5,006
5,730
20,223
25,953
(7,304)
1998
Jun-11
University Commons
Wilmington, NC
6,910
26,611
4,083
6,910
30,694
37,604
(12,674)
2007
Jun-11
Parkway Plaza
Winston-Salem, NC
6,910
17,604
5,154
6,740
22,928
29,668
(8,295)
2005
Jun-11
Stratford Commons
Winston-Salem, NC
2,770
9,562
1,163
2,770
10,725
13,495
(3,754)
1995
Jun-11
Bedford Grove
Bedford, NH
3,400
19,065
(2,778)
2,368
17,319
19,687
(4,918)
1989
Jun-11
Capitol Shopping Center
Concord, NH
2,160
11,584
8,269
2,160
19,853
22,013
(6,585)
2001
Jun-11
Willow Springs Plaza
Nashua, NH
3,490
20,288
(110)
3,490
20,178
23,668
(7,570)
1990
Jun-11
Seacoast Shopping Center
Seabrook, NH
2,230
8,967
2,365
2,230
11,332
13,562
(3,024)
1991
Jun-11
Tri-City Plaza
Somersworth, NH
1,900
10,034
5,850
1,900
15,884
17,784
(6,980)
1990
Jun-11
Laurel Square
Brick, NJ
5,400
20,998
14,111
5,400
35,109
40,509
(8,491)
2023
Jun-11
the Shoppes at Cinnaminson
Cinnaminson, NJ
6,030
45,605
5,290
6,030
50,895
56,925
(20,797)
2010
Jun-11
Acme Clark
Clark, NJ
2,630
8,351
140
2,630
8,491
11,121
(4,641)
2007
Jun-11
Collegetown Shopping Center
Glassboro, NJ
1,560
16,336
25,877
1,560
42,213
43,773
(10,567)
2021
Jun-11
Hamilton Plaza
Hamilton, NJ
1,580
8,972
19,058
1,580
28,030
29,610
(6,624)
1972
Jun-11
Bennetts Mills Plaza
Jackson, NJ
3,130
17,126
2,952
3,130
20,078
23,208
(7,859)
2002
Jun-11
Marlton Crossing
Marlton, NJ
5,950
45,874
30,080
5,950
75,954
81,904
(29,837)
2019
Jun-11
Middletown Plaza (6)
Middletown, NJ
5,060
41,800
3,084
5,060
44,884
49,944
(14,884)
2024
Jun-11
Larchmont Centre
Mount Laurel, NJ
4,421
14,985
1,002
4,421
15,987
20,408
(4,846)
1985
Jun-15
Old Bridge Gateway
Old Bridge, NJ
7,200
37,756
15,701
7,200
53,457
60,657
(17,498)
2022
Jun-11
Morris Hills Shopping Center
Parsippany, NJ
3,970
29,879
3,517
3,970
33,396
37,366
(12,564)
1994
Jun-11
Rio Grande Plaza
Rio Grande, NJ
1,660
12,627
7,208
1,660
19,835
21,495
(5,829)
1997
Jun-11
Ocean Heights Plaza
Somers Point, NJ
6,110
34,911
3,744
6,110
38,655
44,765
(13,691)
2006
Jun-11
Springfield Place
Springfield, NJ
1,773
4,577
2,370
1,773
6,947
8,720
(2,795)
1965
Jun-11
Tinton Falls Plaza
Tinton Falls, NJ
3,080
12,385
1,761
3,080
14,146
17,226
(5,633)
2006
Jun-11
Cross Keys Commons
Turnersville, NJ
5,840
33,347
5,405
5,726
38,866
44,592
(14,781)
1989
Jun-11
Parkway Plaza
Carle Place, NY
5,790
19,740
6,157
5,790
25,897
31,687
(7,614)
1993
Jun-11
Suffolk Plaza
East Setauket, NY
2,780
12,321
8,994
2,780
21,315
24,095
(4,777)
1998
Jun-11
Three Village Shopping Center
East Setauket, NY
5,310
15,849
949
5,310
16,798
22,108
(6,511)
1991
Jun-11
Stewart Plaza
Garden City, NY
6,040
21,970
19,491
6,040
41,461
47,501
(10,510)
2022
Jun-11
Dalewood I, II & III Shopping Center (6)
Hartsdale, NY
6,900
57,804
12,272
6,900
70,076
76,976
(20,165)
2024
Jun-11
Unity Plaza
Hopewell Junction, NY
2,100
14,051
95
2,100
14,146
16,246
(5,945)
2005
Jun-11
Cayuga Mall
Ithaca, NY
1,180
11,244
5,421
1,180
16,665
17,845
(5,710)
1969
Jun-11
Kings Park Plaza
Kings Park, NY
4,790
11,367
2,356
4,790
13,723
18,513
(5,427)
1985
Jun-11
Village Square Shopping Center
Larchmont, NY
1,320
5,137
1,010
1,320
6,147
7,467
(2,171)
1981
Jun-11
Falcaro's Plaza
Lawrence, NY
3,410
9,678
5,318
3,410
14,996
18,406
(4,827)
1972
Jun-11
Mamaroneck Centre
Mamaroneck, NY
2,198
1,999
11,742
2,198
13,741
15,939
(2,063)
2020
Jun-11
Sunshine Square
Medford, NY
7,350
24,713
3,580
7,350
28,293
35,643
(11,059)
2007
Jun-11
Wallkill Plaza
Middletown, NY
1,360
8,410
1,927
1,360
10,337
11,697
(4,853)
1986
Jun-11
Monroe ShopRite Plaza
Monroe, NY
1,840
16,111
528
1,840
16,639
18,479
(7,467)
1985
Jun-11
Rockland Plaza
Nanuet, NY
11,097
60,790
14,086
11,097
74,876
85,973
(23,389)
2006
Jun-11
North Ridge Shopping Center
New Rochelle, NY
4,910
9,612
3,691
4,910
13,303
18,213
(4,342)
1971
Jun-11
Nesconset Shopping Center
Port Jefferson Station, NY
5,510
20,473
8,737
5,510
29,210
34,720
(9,227)
1961
Jun-11
Roanoke Plaza
Riverhead, NY
5,050
15,177
2,968
5,050
18,145
23,195
(6,429)
2002
Jun-11
The Shops at Riverhead
Riverhead, NY
6,331
—
36,243
3,899
38,675
42,574
(10,250)
2018
Jun-11
Rockville Centre
Rockville Centre, NY
3,590
6,982
397
3,590
7,379
10,969
(2,838)
1975
Jun-11
College Plaza (6)
Selden, NY
8,270
14,267
13,041
8,270
27,308
35,578
(9,040)
2024
Jun-11
Campus Plaza
Vestal, NY
1,170
16,384
820
1,170
17,204
18,374
(7,761)
2003
Jun-11
Parkway Plaza
Vestal, NY
2,168
18,651
2,148
2,181
20,786
22,967
(8,967)
1995
Jun-11
Shoppes at Vestal
Vestal, NY
1,340
14,730
1,135
1,340
15,865
17,205
(5,077)
2000
Jun-11
Town Square Mall
Vestal, NY
2,520
41,457
17,183
2,520
58,640
61,160
(19,061)
1991
Jun-11
Highridge Plaza
Yonkers, NY
6,020
17,358
3,770
6,020
21,128
27,148
(6,691)
1977
Jun-11
Brunswick Town Center
Brunswick, OH
2,930
18,561
5,001
2,969
23,523
26,492
(8,151)
2004
Jun-11
Brentwood Plaza
Cincinnati, OH
5,090
20,513
2,572
5,090
23,085
28,175
(10,490)
2004
Jun-11
Delhi Shopping Center
Cincinnati, OH
3,690
8,085
2,359
3,690
10,444
14,134
(4,762)
1973
Jun-11
Harpers Station
Cincinnati, OH
3,987
27,804
5,831
3,987
33,635
37,622
(14,376)
1994
Jun-11
Western Hills Plaza
Cincinnati, OH
8,690
27,664
16,386
8,690
44,050
52,740
(12,655)
2021
Jun-11
Western Village
Cincinnati, OH
3,420
12,817
1,302
3,420
14,119
17,539
(6,772)
2005
Jun-11
Crown Point
Columbus, OH
2,120
14,980
2,000
2,120
16,980
19,100
(8,421)
1980
Jun-11
Greentree Shopping Center
Columbus, OH
1,920
12,531
2,339
1,920
14,870
16,790
(7,188)
2005
Jun-11
F-44
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
South Towne Centre
Dayton, OH
4,990
43,152
5,879
4,990
49,031
54,021
(21,550)
1972
Jun-11
Southland Shopping Center
Middleburg Heights, OH
5,940
55,360
(7,530)
4,684
49,086
53,770
(21,316)
1951
Jun-11
The Shoppes at North Olmsted
North Olmsted, OH
510
4,151
5
510
4,156
4,666
(2,263)
2002
Jun-11
Surrey Square Mall
Norwood, OH
3,900
18,402
2,253
3,900
20,655
24,555
(8,813)
2010
Jun-11
Miracle Mile Shopping Plaza
Toledo, OH
1,510
15,792
3,298
1,411
19,189
20,600
(10,563)
1955
Jun-11
Village West
Allentown, PA
4,180
23,402
1,846
4,180
25,248
29,428
(10,128)
1999
Jun-11
Park Hills Plaza
Altoona, PA
4,390
23,218
(21,720)
233
5,655
5,888
(1,088)
1985
Jun-11
Lehigh Shopping Center
Bethlehem, PA
6,980
34,900
4,745
6,980
39,645
46,625
(19,241)
1955
Jun-11
Bristol Park
Bristol, PA
3,180
21,530
2,574
3,241
24,043
27,284
(8,636)
1993
Jun-11
Chalfont Village Shopping Center
Chalfont, PA
1,040
3,818
(225)
1,040
3,593
4,633
(1,513)
1989
Jun-11
New Britain Village Square
Chalfont, PA
4,250
24,449
3,221
4,250
27,670
31,920
(9,914)
1989
Jun-11
Collegeville Shopping Center
Collegeville, PA
3,410
7,451
6,869
3,410
14,320
17,730
(5,993)
2020
Jun-11
Plymouth Square Shopping Center (6)
Conshohocken, PA
17,001
44,208
36,325
17,001
80,533
97,534
(8,863)
2024
May-19
Whitemarsh Shopping Center
Conshohocken, PA
3,410
11,753
7,130
3,410
18,883
22,293
(5,941)
2002
Jun-11
Valley Fair
Devon, PA
1,810
8,161
(5,597)
1,152
3,222
4,374
(1,368)
2001
Jun-11
Dickson City Crossings
Dickson City, PA
4,800
31,423
8,572
4,800
39,995
44,795
(14,981)
2023
Jun-11
Barn Plaza
Doylestown, PA
8,780
29,183
3,048
8,780
32,231
41,011
(12,252)
2002
Jun-11
Pilgrim Gardens
Drexel Hill, PA
2,090
5,043
5,590
2,090
10,633
12,723
(4,989)
1955
Jun-11
North Penn Market Place
Lansdale, PA
3,060
5,253
1,954
3,060
7,207
10,267
(3,005)
1977
Jun-11
Village at Newtown
Newtown, PA
7,690
37,765
45,243
7,690
83,008
90,698
(21,679)
2021
Jun-11
Ivyridge
Philadelphia, PA
7,100
21,004
96
7,100
21,100
28,200
(7,357)
1963
Jun-11
Roosevelt Mall (6)
Philadelphia, PA
10,970
89,141
48,638
10,970
137,779
148,749
(39,160)
2024
Jun-11
Shoppes at Valley Forge
Phoenixville, PA
2,010
13,025
1,738
2,010
14,763
16,773
(6,781)
2003
Jun-11
County Line Plaza
Souderton, PA
910
8,346
3,984
910
12,330
13,240
(4,388)
1971
Jun-11
69th Street Plaza
Upper Darby, PA
640
4,362
1,015
640
5,377
6,017
(2,027)
1994
Jun-11
Warminster Towne Center
Warminster, PA
4,310
35,284
3,681
4,310
38,965
43,275
(15,363)
1997
Jun-11
Shops at Prospect
West Hempfield, PA
760
6,532
799
760
7,331
8,091
(3,096)
1994
Jun-11
Whitehall Square
Whitehall, PA
4,350
33,067
1,699
4,350
34,766
39,116
(13,914)
2006
Jun-11
Wilkes-Barre Township Marketplace
Wilkes-Barre, PA
2,180
17,430
3,658
2,180
21,088
23,268
(11,554)
2004
Jun-11
Belfair Towne Village
Bluffton, SC
4,265
31,801
3,255
4,265
35,056
39,321
(11,092)
2006
Jun-11
Milestone Plaza
Greenville, SC
2,563
15,645
2,956
2,563
18,601
21,164
(7,082)
1995
Oct-13
Circle Center
Hilton Head Island, SC
3,010
5,832
(1,068)
3,010
4,764
7,774
(1,625)
2000
Jun-11
Island Plaza
James Island, SC
2,940
9,252
3,408
2,940
12,660
15,600
(6,015)
1994
Jun-11
Festival Centre
North Charleston, SC
3,630
10,512
4,639
3,630
15,151
18,781
(8,223)
1987
Jun-11
Pawleys Island Plaza
Pawleys Island, SC
5,264
21,804
218
5,264
22,022
27,286
(2,187)
2015
Oct-21
Fairview Corners I & II
Simpsonville, SC
2,370
17,117
2,382
2,370
19,499
21,869
(8,186)
2003
Jun-11
Hillcrest Market Place
Spartanburg, SC
4,190
34,825
14,611
4,190
49,436
53,626
(17,535)
2023
Jun-11
Watson Glen Shopping Center
Franklin, TN
5,220
14,990
4,621
5,220
19,611
24,831
(6,940)
1988
Jun-11
Williamson Square
Franklin, TN
7,730
22,789
7,221
7,730
30,010
37,740
(14,089)
1988
Jun-11
Greeneville Commons
Greeneville, TN
2,880
13,524
3,657
2,880
17,181
20,061
(6,470)
2002
Jun-11
Kingston Overlook
Knoxville, TN
2,060
6,743
780
2,060
7,523
9,583
(2,484)
1996
Jun-11
The Commons at Wolfcreek
Memphis, TN
23,239
58,489
21,115
23,252
79,591
102,843
(31,214)
2014
Jun-11
Georgetown Square
Murfreesboro, TN
3,716
8,598
2,695
3,716
11,293
15,009
(4,195)
2003
Jun-11
Nashboro Village
Nashville, TN
2,243
11,662
303
2,243
11,965
14,208
(5,021)
1998
Oct-13
Parmer Crossing
Austin, TX
5,927
11,282
2,151
5,927
13,433
19,360
(5,788)
1989
Jun-11
Baytown Shopping Center
Baytown, TX
3,410
6,776
1,061
3,410
7,837
11,247
(2,903)
1987
Jun-11
El Camino
Bellaire, TX
1,320
3,816
893
1,320
4,709
6,029
(2,109)
2008
Jun-11
Townshire
Bryan, TX
1,790
6,399
807
1,790
7,206
8,996
(4,568)
2002
Jun-11
Central Station
College Station, TX
4,340
21,704
3,060
4,340
24,764
29,104
(9,372)
1976
Jun-11
Rock Prairie Crossing
College Station, TX
2,460
13,618
254
2,401
13,931
16,332
(6,887)
2002
Jun-11
Carmel Village
Corpus Christi, TX
1,900
4,536
4,844
1,903
9,377
11,280
(2,723)
2019
Jun-11
Arboretum Village
Dallas, TX
17,154
33,384
849
17,154
34,233
51,387
(3,169)
2014
Jan-22
Claremont Village
Dallas, TX
1,700
3,035
(1,117)
1,700
1,918
3,618
(789)
1976
Jun-11
Kessler Plaza
Dallas, TX
1,390
3,702
2,348
1,390
6,050
7,440
(1,761)
1975
Jun-11
Stevens Park Village
Dallas, TX
1,270
3,182
869
1,270
4,051
5,321
(2,321)
1974
Jun-11
Webb Royal Plaza
Dallas, TX
2,470
6,576
(1)
2,470
6,575
9,045
(3,615)
1961
Jun-11
Wynnewood Village (6)
Dallas, TX
16,982
42,953
36,083
17,200
78,818
96,018
(23,514)
2024
Jun-11
Parktown
Deer Park, TX
2,790
7,319
1,285
2,790
8,604
11,394
(4,559)
1999
Jun-11
Ridglea Plaza
Fort Worth, TX
2,770
16,178
1,040
2,770
17,218
19,988
(7,076)
1990
Jun-11
Trinity Commons
Fort Worth, TX
5,780
26,317
3,368
5,780
29,685
35,465
(13,393)
1998
Jun-11
Preston Ridge
Frisco, TX
25,820
127,082
15,917
25,820
142,999
168,819
(54,061)
2018
Jun-11
Village Plaza
Garland, TX
3,230
6,786
3,165
3,230
9,951
13,181
(3,716)
2002
Jun-11
Highland Village Town Center
Highland Village, TX
3,370
7,439
579
3,370
8,018
11,388
(3,071)
1996
Jun-11
Bay Forest
Houston, TX
1,500
6,557
588
1,500
7,145
8,645
(3,068)
2004
Jun-11
Beltway South
Houston, TX
3,340
9,759
856
3,340
10,615
13,955
(5,838)
1998
Jun-11
Braes Heights
Houston, TX
1,700
15,246
9,805
1,700
25,051
26,751
(7,092)
2022
Jun-11
F-45
Costs Capitalized Subsequent to Acquisition(3)
Gross Amount at Which Carried
Initial Cost to Company(2)
at the Close of the Period
Description(1)
Land
Building & Improvements
Land
Building & Improvements(4)
Total
Accumulated Depreciation
Year Built(5)
Date Acquired
Braesgate
Houston, TX
1,570
2,813
711
1,570
3,524
5,094
(1,827)
1997
Jun-11
Broadway
Houston, TX
1,720
5,472
2,618
1,720
8,090
9,810
(3,242)
2006
Jun-11
Clear Lake Camino South
Houston, TX
3,320
12,136
876
3,320
13,012
16,332
(4,994)
1964
Jun-11
Hearthstone Corners
Houston, TX
5,240
14,208
1,996
5,240
16,204
21,444
(5,924)
2019
Jun-11
Jester Village
Houston, TX
1,380
4,623
9,359
1,380
13,982
15,362
(2,981)
2022
Jun-11
Jones Plaza (6)
Houston, TX
2,110
11,450
3,801
2,110
15,251
17,361
(4,832)
2024
Jun-11
Jones Square
Houston, TX
3,210
10,716
2,453
3,210
13,169
16,379
(5,286)
1999
Jun-11
Maplewood
Houston, TX
1,790
5,535
1,717
1,790
7,252
9,042
(3,022)
2004
Jun-11
Merchants Park
Houston, TX
6,580
32,200
4,125
6,580
36,325
42,905
(15,922)
2009
Jun-11
Northgate
Houston, TX
740
1,707
1,067
740
2,774
3,514
(797)
1972
Jun-11
Northshore
Houston, TX
5,970
22,827
5,386
5,970
28,213
34,183
(11,942)
2001
Jun-11
Northtown Plaza
Houston, TX
4,990
18,209
5,289
4,990
23,498
28,488
(8,195)
1960
Jun-11
Orange Grove
Houston, TX
3,670
15,758
5,967
3,670
21,725
25,395
(9,191)
2005
Jun-11
Royal Oaks Village
Houston, TX
4,620
29,536
2,265
4,620
31,801
36,421
(11,902)
2001
Jun-11
Tanglewilde Center
Houston, TX
1,620
7,437
1,898
1,620
9,335
10,955
(4,272)
1998
Jun-11
West U Marketplace
Houston, TX
8,554
25,511
1,044
8,554
26,555
35,109
(2,319)
2000
Apr-22
Westheimer Commons
Houston, TX
5,160
12,866
4,795
5,160
17,661
22,821
(8,295)
1984
Jun-11
Crossroads Centre - Pasadena
Pasadena, TX
4,660
11,153
7,637
4,660
18,790
23,450
(7,387)
1997
Jun-11
Spencer Square
Pasadena, TX
5,360
19,464
817
4,861
20,780
25,641
(8,995)
1998
Jun-11
Pearland Plaza
Pearland, TX
3,020
9,076
2,203
3,020
11,279
14,299
(4,924)
1995
Jun-11
Market Plaza
Plano, TX
6,380
20,529
1,388
6,380
21,917
28,297
(8,864)
2002
Jun-11
Preston Park Village (6)
Plano, TX
8,506
81,652
15,933
8,505
97,586
106,091
(23,407)
2024
Oct-13
Keegan's Meadow
Stafford, TX
3,300
9,947
2,106
3,300
12,053
15,353
(4,359)
1999
Jun-11
Lake Pointe Village
Sugar Land, TX
19,827
65,239
(138)
19,827
65,101
84,928
(4,830)
2010
Jun-22
Texas City Bay
Texas City, TX
3,780
17,928
7,727
3,780
25,655
29,435
(9,769)
2005
Jun-11
Windvale Center
The Woodlands, TX
3,460
9,479
4,703
3,460
14,182
17,642
(2,410)
2002
Jun-11
Culpeper Town Square
Culpeper, VA
3,200
9,235
325
3,200
9,560
12,760
(3,723)
1999
Jun-11
Hanover Square
Mechanicsville, VA
3,540
16,145
7,037
3,557
23,165
26,722
(7,668)
1991
Jun-11
Cave Spring Corners
Roanoke, VA
3,060
11,284
1,362
3,060
12,646
15,706
(6,779)
2005
Jun-11
Hunting Hills
Roanoke, VA
1,150
7,661
2,376
1,116
10,071
11,187
(5,379)
1989
Jun-11
Hilltop Plaza
Virginia Beach, VA
5,170
21,956
5,709
5,154
27,681
32,835
(10,687)
2010
Jun-11
Rutland Plaza
Rutland, VT
2,130
20,924
1,858
2,130
22,782
24,912
(8,611)
1997
Jun-11
Mequon Pavilions
Mequon, WI
7,520
29,714
12,756
7,520
42,470
49,990
(15,663)
1967
Jun-11
Moorland Square Shopping Ctr
New Berlin, WI
2,080
9,256
2,212
2,080
11,468
13,548
(4,798)
1990
Jun-11
Paradise Pavilion
West Bend, WI
1,865
15,704
1,334
1,865
17,038
18,903
(8,519)
2000
Jun-11
Grand Central Plaza
Parkersburg, WV
670
5,704
1,503
670
7,207
7,877
(1,979)
1986
Jun-11
Remaining portfolio
Various
—
—
231
—
231
231
(8)
$
1,826,297
$
7,267,296
$
1,902,294
$
1,794,011
$
9,201,876
$
10,995,887
$
(3,198,980)
(1) As of December 31, 2023, all of the Company’s shopping centers were unencumbered.
(2) The initial cost to the Company represents the original purchase price of the asset, including amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(3) The balance for costs capitalized subsequent to acquisition could include parcels/out-parcels sold, assets held-for-sale, assets written off, and/or provisions for impairment.
(4) Depreciation of the buildings and improvements are calculated over the estimated useful lives which can be up to forty years.
(5) Year of most recent redevelopment or year built if no redevelopment has occurred.
(6) Indicates property is currently in redevelopment.
As of December 31, 2023, the aggregate cost for federal income tax purposes was approximately $12.1 billion.
F-46
Year Ending December 31,
2023
2022
2021
[a] Reconciliation of total real estate carrying value is as follows:
Balance at beginning of year
$
10,898,351
$
10,428,414
$
10,163,561
Acquisitions and improvements
350,928
772,025
579,156
Real estate held for sale
4,459
(15,852)
(23,520)
Impairment of real estate
(17,836)
(5,724)
(1,898)
Cost of property sold
(168,321)
(227,529)
(211,218)
Write-off of assets no longer in service
(71,694)
(52,983)
(77,667)
Balance at end of year
$
10,995,887
$
10,898,351
$
10,428,414
[b] Reconciliation of accumulated depreciation as follows:
