Welcome to Citi's 2026 Global Property CEO Conference. I'm Craig Mailman with Citi Research, and we are pleased to have with us today Brixmor and CEO Brian Finnegan. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC26 to submit questions. Brian, I'm gonna turn it over to you to introduce your company and team, provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we can jump into Q&A. Yeah. Thanks. Thanks, Craig. Thank you all for being here today. Use the red button. Sorry about that. Can you hear me now? Okay. Thank you all for being here today. With me, I have Steve Gallagher, our chief financial officer, Mark Horgan, our chief investment officer, and Stacy Slater, our head of investor relations and corporate strategy and capital markets. We are one of the largest owners of open- air shopping centers across the U.S. We have 348 assets in the major markets across the country. We're among the largest landlords to TJX and Kroger, Publix, Ross, and Burlington, Whole Foods as well. Our strategy is a bit differentiated in the sense that we have a very low rent basis in well-located shopping centers, and over the course of the last 10 years have gone on a strategy of continuously reinvesting in those, being able to re-recapture below-market rents and put better tenants in that are driving a lot more traffic at higher rents, and you can see that coming through in almost every observable metric in the portfolio. Why you should own our stock today is the best is yet to come. All the things you liked about the portfolio in the past relative to the low rent basis, the redevelopment opportunity, the platform in place to drive outside growth, is still there from the best foundation that we've ever had relative to our underlying cash flows, relative to the CapEx that we have to deploy, both because of the environment and what we've already touched across the portfolio. The redevelopment pipeline going forward is as exciting as it's ever been. If you think about the pipeline that we have with Publix, the centers that we have in places like Plano, Texas, and Atlanta and Metro New York that we're starting reinvestments in. We're in a fantastic position to continue to drive growth and really excited about what we have going on in the business. Given that this is the first time you're in the hot seat, having taken over, more recently, as you kind of take the position, I know Brixmor is, has been a little bit of a machine with the redevelopment over this cycle. What, as the incoming CEO, are you looking at to tweak or change on the margin, as you take the seat? It's a great question. I'd say the first part in terms of the aggressive operation of our assets, the focus on reinvestment, that's not going to change. If anything, we're putting resources in place to be able to drive that faster. I oversaw the realignment of the team, 18 months ago when we went from four to three regions, when we invested in more execution resources that we could move around more seamlessly across the portfolio, depending on capital needs, and we've seen tremendous benefits from that. We're operators at heart, and that is not going to change. As I mentioned earlier, I'm even more excited about what we have in front of us than what we've already completed. Mark is up here and acquisitions is not a core part of our business strategy. It's not something that we need to do to grow. We have been net acquirers four of the last five years. 40% of the acquisitions that we've done as a company have been in the last five quarters. We've found fantastic opportunities to replenish that redevelopment pipeline, but also where we can put the platform to work in places like Houston and Denver and South Florida. We expect to be opportunistic there. We expect to continue to find opportunities. We're gonna remain disciplined. I think the third thing is we've always leveraged technology very well here. What can we do to lean into that? We've seen some early initiatives in AI and automation really pay off, particularly on the legal front, allowing us to negotiate leases a lot faster. From a leasing perspective, more information in terms of how our tenants will perform at shopping centers, allowing us to make merchandising decisions and understanding our tenant health a bit. We have 8,000 leases. We have 900 million visits to our portfolio over the last year. It's a lot of data, and how can we utilize that to make better decisions? I expect us to lean into technology a bit more there. Since you opened the door with technology- Sure. I'll jump to my AI portion of the show, right off the bat here. You had mentioned legal is one place that you guys are finding efficiencies. Can you describe kinda how deep the initiative is at Brix on this kinda AI implementation outside of maybe legal, where you're seeing the opportunity and how you guys evaluate the ROI on this, or how you evaluate maybe the go, no go on putting time and effort and money into some of these new technologies versus waiting maybe and being the follower on some of these things versus, more of a first mover? Yeah. I think if you could take the crawl, walk, run approach sometimes. People can sprint fast past you. We have been measured in terms of how we're approaching things. You asked coming in, when we challenged every leader in every function to look at their process and say, not particularly just with AI, but what are some things that with technology we can do faster, whether it's automating, whether it's some level of AI tools. Our teams are using it every day to be more efficient, to get faster information. I think what we've seen across the portfolio, Craig, that's been really interesting is we've seen people step up and find things that make themselves more invaluable. For instance, we talked about legal. Some of the things we do in terms of how we're abstracting leases and finding certain things out, and different ways we're doing that across the portfolio was a bit inefficient. We were able to save thousands of dollars with one individual just utilizing some tools to figure out, okay, what consents do we need to put solar on our roofs? Rather than things that were taking us a couple weeks, were taking us 10-15 minutes. That individual is now a business liaison who's helping other people deploy the tool. Some of the things in tenant health, right? You may ask about that today. We may have a sense, everybody in the room, of who's on a watchlist or what tenants you're paying particular attention to. For us, can we go a bit deeper to say, all right, well, who was paying on the second of the month that's now paying on the fifth or sixth? Where we might not get a flag on that because they're still not technically, quote-unquote, "paying late," they're within their grace period. We can start to get some early signals that, hey, maybe we need to send a leasing rep in there, maybe we need to send a property manager in there. We've cut back to the legal front. We've cut three to five hours out of drafting leases through automating those out of the gate. Just think of, okay, well, that's time to be able to work on another lease, to be able to do that faster. Our time in legal was down 10% last year. We're continuing to find ways. To your point about where we're investing, we are looking at the tools that we have and what some of the embedded options are within that, like with Salesforce and other things, and ultimately where we spend time with what we're doing on our own. We've been very encouraged by what we've seen to date and are gonna continue to leverage it to make better data-driven decisions. Do you guys have a preference for platform, you know, Google, OpenAI, Anthropic? Is there any kind of. We're in the Microsoft 365 today. Okay. Copilot's been a tool that we've used, and we like it so far, and it ties into everything else that we're doing from a SharePoint perspective across the portfolio. From that standpoint, that's a tool that we've used, but also leveraging what's embedded in some of the other tools as well. Do you anticipate you guys would be more of a off-the-shelf user of products coming from these providers? With your IT team, is there an initiative to try to build out Brixmor-specific tools? Yeah ... internally and spend the time and money there? I think it's a balance. I wouldn't have an exact% of it today. We try to think about these things as like, what are the gaps we're trying to solve for, or what are the initiatives that we wanna focus on? Think about what are the tools. Always looking, okay, what do we have in place today or what are we doing today that we can leverage? Steve oversees the data analytics team, and we've been going through a process across the portfolio. One of the things that we did when we did the realignment was enable us to figure out how we were measuring certain tasks differently in regions and get that with some standardization across the entire portfolio, primarily through a Power BI initiative. From that standpoint, it will still be a mix, but we do think there's tools that we have in place today that we can certainly leverage. We're talking a lot about how we utilize AI, but I think it's important to recognize, even if you may wanna shift the discussion, but we'll get there relative to our tenants. Our tenants have more data today on their customers than they ever have. They understand what happens when they open a store in a given market, how that store will impact other locations, how that'll impact their online sales. As you see the tenants that are performing well, right, and continue to make investments in expanding their fleet, they're utilizing data and AI more so than they ever have to give visibility in terms of how that store is gonna perform. We'll jump into the tenant side in a second, 'cause this question somewhat dovetails into tenant health is, as you guys are looking at it, As you guys look at headcount today versus future and the benefits of AI, is it more of a headcount reducer or just a slower of headcount growth because you improve productivity? I'd probably answer it this way. We have maintained the headcount reduction that we did from two years ago and are still operating incredibly efficiently across the portfolio. I mean, we are challenging ourselves when we do have open positions to say, "Hey, is this something that we can ultimately absorb?" I go back to there are going to be individuals that spend the time, that are curious, that are gonna improve their skill set, and we've seen it at our company, that are gonna make themselves more invaluable. That's the encouraging thing. I think with this and any other forward-leaning technology is those that are early adopters are gonna be able to increase their value. We've seen it, and we expect to continue to see it going forward. I guess pivoting to the tenant side, you know, you echoed some of the comments I've heard from some of your peers just in, you know, maybe better margins by your tenants, better inventory management. On the other side, there's the talk of agentic commerce and what does that do to brick-and-mortar versus does that just create bigger winners in the e-commerce space? I'm just kind of curious, your views on that and then juxtapose that with sort of your tenant composition and how maybe you guys feel you're positioned if there is that push towards some of the bigger players versus maybe, you know, the role of the off-price retailer and the grocer, right, and some of the roles that these different tenants can fit into? The best tenants today meet the consumer wherever the consumer wants to meet them, and whether that's in the store, whether it's online, whether it's pickup, whether it's on their phone. You see that with operators like Ulta. You see that with great grocery operators. Off-price is a bit differentiated, but those operators are succeeding today because the brands that they're carrying in their store are the best that have ever been. You have seen a shift in terms of consumers from an apparel standpoint looking for value at a discount, and that's why they continue to succeed. I think as it relates to merchandise mix, it's something that we're always thinking about. It's a center-specific discussion, but we love grocery. We love what's happening in the grocery space from the specialty operators that are differentiating themselves to how traditional operators, both the regional players and nationals, continue to invest in their stores. We talked about off-price. Wellness is becoming more essential. People care more today than they ever have about how they look and feel. We're seeing folks less apt to give their gym membership up. You're seeing health and beauty operators like Ulta and Sephora continue to perform, and then the quality of service operations around that. You're also seeing that tie in to quick-serve restaurants. The quality of operators that we're bringing to our centers like the CAVAs of the world, Shake Shack, they're providing value, but they're also providing more of a healthy option than you saw previously from fast food. From that perspective, I think we have been nimble, and that merchandising mix has changed from a consumer standpoint over time and something that we'll continue to focus on. I do think still, though, if you talk to retailers that have an omnichannel platform, they're gonna say they're trying to make the store the center of what they do, and the store is still the most profitable way to deliver goods to the consumer. On the continued kind of tenant health here, leasing has been strong, continues to be strong. You guys are pushing kind of shop occupancy higher. The signed-not-yet-commenced pipeline has grown. As you guys assess sort of the portfolio today and then look at sort of the redevelopment tail you have, how should we expect near-term and long-term frictional vacancy, I guess, in that shop portfolio? Like, where do you think today's portfolio can handle it versus once you're even further through the redevelopment, what long-term potential for your portfolio could be assuming, you know, similar type supply-demand dynamics as today? We have always said that we expected this portfolio to be at a low 90s shop occupancy. It's 92.2%. What is encouraging about what we still have in terms of the growth opportunity there, bless you, is if you were to look at the future redevelopment pipeline. Maybe turning to acquisitions, Mark looks bored down there. We'll He's never bored. We'll put him into the mix. You guys have been fairly active, but you're match funding things, right? It feels like the game plan has been more IRR arbitrage on upgrading the portfolio, you know, harvesting some value. Could you just talk about is that the trend that we should continue, where sort of market cap rates go in, and how much could you do that's more immediately accretive versus longer-term accretive? Well, I'd say a couple of things. I would note, as Brian said earlier, we've been a net acquirer of assets now for the last five years. We have been growing externally. I think you're 100% right. Our focus as an investor is long-term IRR. When we think about our marginal dollar, we're certainly directing that dollar towards redevelopment today, given the yields, I think incremental yields that the team has been delivering. When we're looking at acquisitions, we're comparing that dollar and making sure that we're buying assets where we can put our platform to work and really drive IRRs into that high single digit, low double digit on an unlevered basis. That's how we're gonna continue, I think, to think about it. From a market perspective, the open-air retail market today is quite robust. It's one of the sectors, I think relative to a lot of other ones, that has a lot of new capital coming in. On the margin, cap rates are compressing, particularly for assets that are smaller. From our perspective on that IRR recycling question you had, we've been able to sell some assets in our portfolio at pricing where we think we're selling them at a low high 6%, low 7% IRR, and reinvesting in at that 9%-10% IRR range. We like that about the market today. If you looked at what we've invested over the last couple of years, the deals have been bigger. Our average deal size was somewhere in that, I think $150 last year. What's interesting about those bigger deals is that they're a little bit higher yielding generally. There's less competition for those assets. More importantly, they usually have more moving pieces that we can put our platform to work in today's environment. We're excited about that piece of the environment. For us, acquisitions, as Brian said, it's not necessary for us to grow. We're excited about the opportunity that acquisitions incrementally can add to our company. The other thing I'd leave you with is that it's always gonna be opportunistic for us. It's not a quarter by quarter plan. It's a let's find the right deals to put our platform to work on. Did you guys think about that timeframe to capture that 200 - 300 basis points of IRR lift? Like, what's the... Is there a time hurdle- Yep. internally? What is it? You know, we've done a lot of back testing on our on our acquisitions. They've generally been good deals. What we're finding is it's a three to five year business plan generally when we buy. It's driven by a variety of factors. We're focused on assets that have rent marked to market. Last year, we bought some assets with occupancy gain. The year before, we bought Britton Plaza in Tampa, which is really backfilling the redevelopment pipeline. That plays out over three to five years. What's kind of the opportunity pipeline look today as you kind of evaluate the redevelopment IRRs and incremental returns versus acquisitions that you kind of need to do for the long term backfill and growth? I mean, what's the deal pipeline look like for you, and how do you kind of ultimately decide, here's the bucket of capital, we need this, maybe you could just sell more to fund it, but? Yeah. kind of how do you guys divvy that up internally? I'll take the first part. Mark can talk about the pipeline. Maybe Steve can chime in here. Our focus is going to continue to be on accretive reinvestment. We're funding that with free cash flow. As I mentioned earlier, I'm even more excited about what we have in that future pipeline than what we've already done to date because the projects are larger in scale, but still de-risk in the sense that they are pre-leased, and we have good visibility on costs, and we have them in great markets. That's gonna continue to be the first focus of our capital dollars. Mark, I don't know if you want to touch any more on the market. Yeah. From a pipeline perspective, you know, the market was quite active in Q4. Q1's been a little slower. When we think about the pipeline we've been building, We've been talking to some of these families that we're trying to acquire from for five, seven years at this point. What's interesting is that we are seeing more activity from some of the private families who are saying to themselves, "Hey, I kind of see where the market stabilize. I need to make a transition with my business." We're seeing some more activity on the private side. It's always gonna be, as I said, opportunistic for us. We don't need to do it every quarter. We're trying to find the right deals to put money to work. To your question, we are comparing that marginal dollar to anything we can spend on the redevelopment pipeline. If the returns and the acquisitions don't match those, we're really in pass. We really are trying to find the right deals to drive long-term value for shareholders here. I think implicit in your question, Craig, is the impact on growth in the short term, right? We've been net acquirers now for the past five years. We have continued to grow FFO at the top of the peer group. This has been additive. We are excited with what we're seeing in the market. We want to grow because we have a platform that we feel can drive outsized and incremental results than ultimately what can be achieved by whoever's owning the property today. We're excited about it. Generally, we're growing in markets that we know very, very well, and that we have a good understanding of what the leasing demand is and how far we can push things to drive outsized returns and value. We just had a question come in. You mentioned the deals that you're tracking are with private families. How much do marketed opportunities play in your consideration? The way we think about that question is how many deals have we bought off market versus on market. It's about 60% on market, 40% off market. That's kind of the way it generally trends. It's a widely brokered market. Generally, I would just say, Mark, chime in here if I'm off on this, but even some of the off-market deals will have some level sometimes of broker assistance, and we're generally not getting them, I would say, at a steep discount. We are just getting ahead of them before they're broadly marketed, and there's more competition for them. 100%. The beauty of the off-market deal or the ones that you've been tracking for many years is that you kind of know the business plan day one. You're not getting a broker package saying, "Hey, this is kind of interesting." You're saying, "I've wanted to buy this center for 10 years." That's the beauty, I think, of off-market. You can control that price and really get to your business plan much faster. I brought this up with one of your peers earlier. I'm just kinda curious on your answer. As you guys underwrite different markets, clearly some states and cities are more tax friendly, and others are less tax friendly, and some are moving even more unfriendly, right? Speaking of New York City and some other places. Just how do you underwrite that political risk and which ultimately translates into operating expenses and limits the ability to push rents, right? Maybe impacts demographics in an area where you thought was X, and maybe it changes to Y. I know it doesn't change quickly, but just how much time do you guys think about that versus those are maybe 10-year changes and it's past the point? Are you guys thinking internally now about that and maybe is that leading you towards not only the buy, no buy decision, but also hold, sell decision on assets that you currently have in the portfolio? That's where we start, is more the existing. It's certainly a consideration, Craig, on external growth, but understanding that the decision to hold an asset, it's investment decision as well. As we look out and say, "Okay, what's happening over the next 10 years? What's happening in that market from a tax and legislation standpoint? What's happening in that market in terms of the competition there?" One of the benefits of clustering and having a lot of assets and being the largest landlord in places like Philadelphia, Atlanta, among the largest landlords in Houston, is that you have a good understanding of ultimately what's happening in a given market. We've done some very accretive reinvestments in some high tax states and others that have been much more accommodating from an overall tax perspective. I think where we sit today in terms of the markets that we're in and we have a large presence in, we like, but it's certainly a consideration, not just for what we're buying, but more importantly for what we already own and control. I think importantly too, just the size of the portfolio gives us that diversification, right? Not any one market is that impacted by any one decision by a local jurisdiction. I would reemphasize what Brian said. When we think about new deals that we're buying, the reason why we buy in our footprint is 'cause we know the markets well. We think we understand where taxes are going. We know where operating expenses are going. That's an advantage for us to take to use to find good deals in the market. If you've seen where we bought, we bought a lot in Texas recently. We've bought a lot of assets in Florida. We bought some deals in Chicago that have been big home runs for us because we understood the opportunity some of those assets presented. We're a big landlord in Southern California, and that has a lot of headline risk in that market. Our portfolio in California performs extremely well. We just put money to work in that market at a high 6%, low 7% going in yield with growth that we think is 4%-5%. You have to buy the right assets in these markets, and we do think our platform gives us that advantage to do so. We had another question come in. Can you paint a scenario that would lead to FFO growth in 2026 that trends above the high end of guidance? I think Steve can chime in on this too. It's pretty simple for us. It's ultimately on the execution front. What can we still get done now that we can open this year? What might we be able to pull in from next year? Can we continue to see the compelling move-out trends that we've had across the portfolio where normal course move-outs are now four years running of historic lows? It's kind of simple, but it's more on our ability to continue to execute throughout the year, and we're pretty encouraged out of the gate. Yeah. I think it always comes down to same property NOI. That's the largest component of our growth. It's what Brian said, it's getting leases open sooner. I think, you know, we didn't spend a lot of time talking about tenant disruption, but obviously our watch list compares favorably to a lot of the companies out there. To the extent that is muted as well, I think you could see us drive to the higher end of our same property NOI guidance. I mean, for the, for the rest of it, I think on the interest rate side, we only have a little exposure left, right? I think like we saw in 2025, to the extent there are opportunities for us proactively to get paid to take back space and then ultimately backfill that with more relevant tenants, you may see, you know, an opportunity for lease settlement to be higher. We feel very comfortable where we are set today with our range. From a funding perspective, where you guys kind of sit, what were you anticipating? You know, I don't know how much debt raising was in guidance, if any, but just from a spread perspective, some of your peers have issued debt at, you know, record tight spreads there. How does that factor into what you have kind of baked in? Yeah, I mean, we have a upcoming $600 million maturity. We pre-funded some of that back in September. We're sitting on about $350 million of cash. The remainder exposure for the year is pretty limited. Obviously, you know, we saw those prints, they were great spreads and our fixed income. I know there's some of them in here today. Our fixed income support has been very strong with investors. Obviously, there's a lot more volatility in the 10-year today and where spreads are going. You know, still think we would probably do a ten-year sort of in the five, 10- ish range, ±. You know, still very strong cost of capital of what you've seen over the last couple of years. Then we'll continue to look for a window to be opportunistic in the market as we get closer to that maturity. Just to remind us, I know you talked about a bit on the call, but how much of the bankruptcies from a year and a half ago are still need to be addressed in the portfolio versus where, you know, have been leased? The commencement timing, again, I know we've talked about the still pipeline today, but the tale of that from a commencement standpoint? I might take a crack at it. I might answer it this way. Our occupancy was down 10 basis points year-over-year, despite the fact that we took back 1.6 million sq ft last year and grew it over 4% while we were doing that. I think it gives you visibility in terms of what we've addressed. Now, the bulk of the leases that it generally takes about a year, if you think about it. Maybe a little bit more depending on the work that you're doing in a space. Thinking about the bulk of the anchors that we signed in the fourth quarter, starting to come online in the fourth quarter of 2026. What we're signing today, Craig, will. There's still some anchors that you can get in for the year, but primarily that's gonna be for 2027 and beyond. Even thinking about it, I mean, we signed close to 1 million sq ft of new leases in the fourth quarter. That's only a small fraction of what's coming on in 2026. The bulk of that, the full year impact, is coming on in 2027. Steve, as you mentioned, the tenant credit watchlist type exposure and guidance, it's eased a bit, right? Like, remind us again what you have in there for known versus maybe a cushion for potential. I mean, the way we approach budgeting has been consistent going back ever since I've been here, is we go space by space, property by property, right? To the extent there is an individual bankruptcy at a property, we would remove that out of the underlying amount. Where in the previous years we've given that range of possible outcomes because there were more material, larger bankruptcies out there, I mean, we're not seeing that today. When you look at... You know, you'll still see drugstores, closed stores, you know, The Container Store. We had one Saks at a great property we had in Naples, but there's just not a lot of exposure out there. Then on the traditional revenues deemed uncollectible, where our historical run rate was 75-110 basis points. Based on all the work we've done on their portfolio and the improvement of that underlying tenant credit profile, we've tightened that into 75-100 just to reflect that improved underlying tenant. I would just add, and I know we're coming up on time here, to leave everybody with what I said at the beginning was, this is the strongest underlying tenant credit profile that this company has ever had. If you were to screen a perceived watchlist versus us and any of the peers, the category Steve mentioned, individual names, we would screen very favorably. Four years running of normal course move-outs being historic lows for the portfolio. Retention rates close to all-time highs. The position that we're in today is very strong from an overall tenant credit perspective. Nice. Before we run out of time, same store for the retail group next year? 3.5%. More, fewer, the same amount of companies? Less. Oh. Look at Jeff. Right at it. Thank you, guys. Enjoy the conference. Thanks, guys. We appreciate it.