Let me get started here. Welcome to the Phillips Edison & Company Roundtable. You know, Jeff, I'll turn it over to you. Maybe you can introduce the team and also provide some opening remarks. Great. First of all, thank you, everyone, for being here today. We appreciate your time. I'm Jeff Edison. I'm one of the founders of Phillips Edison & Company. With me are John and Bob. You guys want to give a little... Sure. Go ahead, John. My name is John Caulfield. I'm the CFO. I've been in the company for 11 years. I think with regards to opening remarks, I'd like to say that I believe we're doing exactly what we said we would do, which is we believe that the platform, the portfolio, can deliver 3% - 4% NOI growth every year, and that will translate into mid to high single-digit FFO per share growth. This year, we're going to deliver 3% - 4% NOI growth, FFO growth that'll, whether it's NAIRI or CORE, that'll be between 6% and 7%. As we look to next year, we believe that the same thing will hold true. I also forgot to mention we just raised the dividend by almost 6%. Good afternoon, everybody. My name is Bob Myers. I'm the President of Phillips Edison & Company. I've been with the company now for approximately 22 years. It's been a great ride putting together a great portfolio of grocery-anchored neighborhood shopping centers. We have over 300 shopping centers in 31 states, about 32 million sq ft- 33 million sq f t. We've seen a lot of success in our strategy. I'm sure Jeff will speak to this. When I look at our overall occupancy, we're at 97.4%. I look at our anchor occupancy, we're at 98.9%. Inline occupancy is at 94.8%. We have some of the highest spreads in this space. New leasing spreads are between 30% and 35%. Renewal spreads are approximately 20% with 3% CAGRs. We have a retention rate of 94%. You'll also hear that 70% of our rent roll is necessity-based. That's very important because we want to align ourselves with quick service restaurants, health and beauty services, and MedTail. A lot of demand from the retailers in our discussions. They're looking for store counts for 2026, 2027, and 2028. For those of you who don't know us, we started PECO over 30 years ago with a focus on buying grocery-anchored neighborhood shopping centers, adding value to them, and creating value for our shareholders. Over that 30 years, we've been at a fairly boring strategy of continuing to find the number one or two grocer in the market and about 115,000 sq ft shopping centers across the country where we can get outsized growth and we can bring the PECO machine to add really the best operating platform to markets that don't always have the best operating platform. That has given us the ability to show the kind of results that we have. As Bob pointed out, sort of market leading spreads. We think that that's kind of testament to our portfolio, which is, we really focus on getting the best spreads, having the highest occupancy, being in the best markets that have strong growth to them, and then having the number one or two grocer. When you put those pieces together, you get the kind of results that we've been able to put on the board. Maybe talk about kind of post-earnings, like, you know, the state of leasing. What are you seeing on the ground? There is still a lot of uncertainty with the tariffs. I know maybe tariffs have less of an impact, like sort of when you think about your portfolio, but you know, has anything changed on the ground? There was a couple of months of panic over the tariffs. I think that was a real issue that just stopped a lot of things happening for a period of time. I think the markets have kind of gotten to the point where they understand, they at least have a relative understanding. Certainly, there is still some uncertainty, but they seem to have adapted. They have a plan and they're working towards continuing to expand. Bob, you want to add anything on that? I think one of the best indicators in our portfolio is the visibility we have out the next six months. I look at our leasing pipeline and our renewal pipeline. As I mentioned earlier, our new leasing spreads were 30% - 35%. That's going to stay consistent. We're not going to see a slowdown in new leasing spreads. On the renewal front, we were finished at around second quarter 20% renewal spreads with a nice 3% CAGR. With the renewals that we have out for signature, those are going to be elevated. Those are going to continue to go up. We're not seeing any cracks in the portfolio. There was some tariff noise, obviously, in April, May. Some things were put on hold. We didn't have any tenants fall out. The best indication is retention. We're not seeing any slowdown with the 94% retention. I feel very good about the integrity of our portfolio. Not to add on too much, but in our materials, and we have materials available online, we did an analysis at our rent roll and about 85% of our ABR, we believe, will have low impact. I think retailers talked about, you know, oh, we'll bring inventory in advance. Tomatoes and milk don't last that long. For us, we're a heavy service, necessity-based goods and services, and we think the stability of the portfolio will just continue to perform. The one news that did come out was the Amazon same-day delivery on sort of fresh items. Now, I guess what changes for the industry, if anything? Delivery of groceries for all the grocers, Amazon included, is a loser. They have a very difficult time making money at that. We've seen Amazon in relatively recent history try bricks and mortar. It has not been successful. They do have a fairly robust plan to expand Whole Foods by 100 stores over the next, I think, two to three years. We'll watch. Amazon's great. You never kind of, you know, bet against them, but they have had a tough time adapting to the bricks and being profitable in the bricks and mortar business. The delivery, you know, they want to be at your house more often because it brings down their costs. It's a tough business. Kroger made a huge commitment with Ocado to do that with new warehouses that were fully automized, and they've put that on hold. It's not because it was really profitable. They were losing money at it, and they didn't see a runway to continue to grow that. How they compete, we'll see. Our view has been that, you know, from the very beginning, to go from bricks and mortar to online, we think is an easier transition than from online to bricks and mortar. If you look at what Walmart's been able to do, they're making a lot of progress. I'd say the jury's still out. They do want to be in the grocery business because they want to be at your house, you know, once a week, which is when the average customer shops at a grocery store. They'll keep trying, and we'll continue to watch. When you have perishables that you're delivering, it's a different thing than delivering a box. It's more complicated. The time frames are much shorter. It's a difficult thing to do. We will watch. You know, I'd like to keep this interactive. If there's any questions, please let us know. You guys mentioned the occupancy at 97%, right? I think for the overall portfolio, it's even higher for when you think about anchors and 94%. Having these record levels, help me understand how, I mean, you talk about the 3% - 4% growth, but kind of without occupancy pickup, talk about the building blocks to get to that 3% - 4%. Yeah. First of all, we believe that the retailers vote every day when they renew a lease, when they sign a new lease, where the best real estate is in that market. When you have the highest level of occupancy, we believe we have the best properties. That number one or two grocer driving that traffic, that weekly shopping experience is what has driven those results. It's why we have the kind of, we're able to get the kind of returns and renewal spreads as well as renewal% in the market. John, before you go, the only other thing I just want to mention in terms of occupancy, even though we're currently at 97.4%, our inline occupancy is at 94.8%. We believe that we can move that, given the demand that we see currently, up to 96.5% over the next 18 - 24 months. There's still occupancy growth. We do continue to see occupancy growth, as Bob indicates, but we're also using this high occupancy as pricing power. The NOI growth of 3% - 4% really is coming from renewal spreads and new leasing spreads. The best part of renewal spreads, and the reason why we focus on retention rate, is there's no downtime. When you're getting 20% spreads and retaining over 90% of your neighbors, it really adds the continuity of your NOI growth. If we look at it, we believe that new and renewal leasing spreads can be 100 basis points - 200 basis points alone on an annual basis. We also have contractual rent bumps embedded in the portfolio. Today, it's about 110 basis points. I think that's on its way to 125 basis points- 150 basis points because ultimately the inline neighbors are taking these 20% increases as well as 3% escalators on top of that. The other piece is we have an active outparcel development program and redevelopment program, which is going to be things like teardown rebuilds for Publix. That's going to add about 100 basis points- 120 basis points of growth on an annual basis. We spend about $50 million a year in this program. We'd love to do more. We have a meaningful pipeline and the returns are very strong. It's just very hard to do because at every one of our centers, it's a negotiation. You're dealing with municipalities and the grocers and things. We have a platform that is very successful in doing that. We also utilize the acquisitions that we have that will be a headwind to Bob on his occupancy number because we want to buy shopping centers with occupancy, but that continues to give space for our platform to lease. How long do you think until the embedded bumps are in that 125 - 150? It's at 110 now. I still think it's probably another two to three years before it keeps growing there. We had a discussion with investors this week about, you know, could you get a bigger bump if you didn't take 20% off the top? We're still like, we think like owners, I'll take the cash value, but it's a good discussion. Talk about the acquisition pipeline, right? I mean, you look at grocery-anchored centers, pricing is very competitive in that sort of environment. Talk us through the opportunities you're seeing, grocery-anchored and all the other food groups you're looking at. Yeah, I'll take that one. Year to date, we've acquired $303 million worth of shopping centers. In 2023, we acquired $275 million. Last year was around $300 million. We're already at $300 million through the end of, I'll just say year to date, we were $287 million at the end of the second quarter. Our focus on acquisitions has always been to solve for an unlevered IRR above a 9%. The categories that we currently are looking for are core grocery-anchored shopping centers. We also own shadow-anchored shopping centers, and then we have around nine or about $185 million of unanchored shopping centers. That seems to be our category. In terms of the overall environment, what we're seeing, activity is up. Competition is up as well. On the activity side, I would say based on OEMs offering, underwriting, what we've been presenting to investment committee is up 50% over where it was last year. We feel really good about our pipeline. We have another pipeline of deals that have been awarded or are under contract of about $100 million. Right now we're dancing at $400 million, which is right in the mid-range of our guidance, which was $350 million - $450 million. We're sitting in a very good spot for the rest of the year and looking at all opportunities. Is pricing on the product you're looking at? We're solving for 9% unlevered returns. I would tell you on the shadow space, unlevered returns are around 9.5%. The unanchored space would be a 10% to an 11%. Cap rates range anywhere from 5.75% - 6.6%. That typically is what you'll see. The assets we acquired in the first quarter, we were at a 6.3%. In the second quarter, we found some inefficiencies, properties that were undermanaged. We took advantage of that. We were around a 7% cap. As you consider the rest of the year, you know, we'll be somewhere between 6.5% and 6.7%. You're buying this stuff, and how are you sort of, what's the source of funding for these acquisitions? Our guidance does not actually have equity issuance. We did raise equity in the fourth quarter last year that gave us the ability to buy the $400 million that Bob's talking about. As we look at it, we do think that this is a great opportunity for investment because we think that we're undervalued. I know we're the first people in this room today to suggest that they were undervalued, but you heard it here, folks, first. I think it's an opportunity. What we're finding is that the private markets are a bit more efficient currently with regards to pricing than the public markets. What we're going to do is look at our portfolio and dispose of assets that have reached stabilization. We're going to lean into that to maintain our long-term leverage target of about 5.5 x. To date, we're about 5.4 x, but feel really good about the ability to continue to buy the assets in the pipeline that Bob's talking about while leaning into a portfolio management strategy. We think we'll probably be able to sell product in the market today at about a 7% unlevered IRR, the stuff we're selling, and we're buying it at a 9%. There's a 200 basis point spread there in terms of what we're able to buy in the market and the pricing at which we're able to sell. Being sold? They'll be probably pretty comfortable with the numbers that Bob said on the acquisition side. Just given the fact that competition for core grocery has grown so fiercely, we expect you to lean more into the shadow anchored or unanchored type assets? I don't know. I mean, we look at them based upon the returns we need to get, and it'll really be dependent on what comes to market and where the opportunities are. We shop, you know, we're in 31 states. We have an on-the-ground, boots-on-the-ground team that can manage across a wide range, which gives us the ability to find opportunities more broadly than you can if you're in, you know, five or ten markets. That has given us, we think, the ability to find opportunities, you know, in that 9% unlevered basis. I think one piece that I would add there is that, you know, when we look at it, they're not three categories. We think of it really as two categories because in the grocery-anchored shopping center and in the variety of markets that Jeff is describing, 80%, whether the grocer owns their space or we would own their space, the biggest part of our underwriting is understanding the commitment of that grocer to their space. Ultimately, 30% of our rent today comes from grocery, and it's an excellent complement if we're able to have a grocer that's highly committed to their space. Everything we've acquired to year date, the average is $1,000 a foot in terms of their sales. Ultimately, what we have is the ability to get more alpha and better growth by owning that portion in the commitment with them. We kind of look at it as grocery-anchored and then the unanchored space that we've talked about, which again, we've been buying over the last three years. We have a little less than $200 million, but that is a complement that our platform is utilizing for assets in our market. I think to Jeff's point, we are always looking for inefficiencies in the market, and I think that's how we would probably bucket the two. I guess on the unanchored strips, for people not familiar with, just kind of talk about the, you know, you pivoting towards that segment and buying more of that. Talk about the reasons and what are the risks in that type of segment. I think pivot's a little strong. We are finding select opportunities near our existing centers where we have an insight into the market that gives us more confidence in what we're buying. We think that the risk profile, although, I mean, we're getting between 10% and 11% unlevered, so we're getting paid to take some additional risk there. Our results so far have been, you know, in the 180 that we bought, been outstanding. We are optimistic that we can continue with that. Yeah, just to add a little bit more color on the unanchored piece, we have nine currently, so about $185 million. The criteria is very consistent with our core grocery-anchored strategy. They have to be in our core markets. Right now, median incomes are around $120,000 in the strategy. We have about 100,000 people in a three-mile radius. We have higher education around 50%. There are just a lot of positive attributes. On average, we're spending $275 to $325 a foot to acquire these properties. They're typically undermanaged, which gives us an opportunity to go in and re-merchandise and use our national account platform. A lot of this is transitioning some local tenants to national tenants and regional tenants. We've seen early success. We've only done it in this portfolio for less than three years, but we've moved occupancy in a meaningful way. New leasing spreads are between 45% and 50%, and renewal spreads are above 30% in this space. It's a natural extension of what we do very well with one of the best operating teams in the business. I would just be curious to know if you can answer this: the spread between the yield you get on acquiring a number one and number two grocery-anchored center versus a number three or lower. I'm talking, you know. We don't buy number threes. We're probably not the right guys to ask. If they're not the number one or two, we see there's additional risk there. You'd probably guess it's 150 basis points difference in that evaluation though. Anything on the balance sheet at this point? What's the update? We are 5.4 times. We're BBB flat. We were upgraded last year by the rating agencies and continue to argue with them that we have the same balance sheet as some of our peers. They're just bigger than we are. We've been successful in continuing to ladder our maturities. That's been something we've talked about. In the last 12 months, we've issued three bonds, adding duration to the portfolio. We don't have any meaningful maturities until 2027. I think that's our goal is to be a repeat issuer in that market. It's the most liquid. We're committed to a long-term leverage target of mid-5x. One of the things we haven't talked about is sort of redevelopments and repositioning. Talk about kind of where our yields are today at some of these projects, and how they move given higher costs and all that. Right now in our portfolio, we do anywhere between $40 million and $50 million of, let's call it, redevelopment development. We do a lot of teardown rebuilds for Publix. We build $2.5 million - $4 million strip centers in our outparcels currently, and those returns average anywhere between 9% and 12%. That seems to be the wheelhouse, and we're not seeing any shift from those return targets. That 9% - 12% is a cash-on-cash yield, not the IRR. The IRRs would be much higher.