Phillips Edison & Co Inc
NASDAQ:PECO
Phillips Edison & Co Inc
In the bustling landscape of commercial real estate, Phillips Edison & Co. Inc. has carved a distinctive niche as a formidable player specializing in grocery-anchored shopping centers. Founded in 1991 by real estate veterans Michael Phillips and Jeffrey Edison, the company has grown into one of the nation’s leading owners and operators of these retail havens. Their core business model revolves around the acquisition, development, and management of shopping centers where grocery stores serve as the primary driver of foot traffic. By focusing on essential goods, Phillips Edison & Co. ensures a steady stream of customers, which in turn supports surrounding retail tenants. This strategic emphasis on necessity-based retail anchors not only bolsters occupancy rates but also insulates the company from the volatility often seen in other sectors of the retail industry.
The company generates revenue by leasing retail spaces in its properties to a diverse mix of national and local tenants. This hybrid approach creates a resilient portfolio that balances stability with growth potential, as grocery-anchored centers frequently yield long-term leases and steady rental income. With a proactive management style, Phillips Edison & Co. continuously seeks value enhancement opportunities through property enhancements, tenant mix optimization, and strategic acquisitions. This holistic approach allows them to maintain competitive leasing rates and tenant satisfaction, ensuring a robust occupancy throughout their sprawling portfolio. By operating as an internally managed REIT, the company maximizes shareholder value by aligning the financial incentives of its management with those of its investors, a testament to its commitment to operational efficiency and sustainable profitability.
In the bustling landscape of commercial real estate, Phillips Edison & Co. Inc. has carved a distinctive niche as a formidable player specializing in grocery-anchored shopping centers. Founded in 1991 by real estate veterans Michael Phillips and Jeffrey Edison, the company has grown into one of the nation’s leading owners and operators of these retail havens. Their core business model revolves around the acquisition, development, and management of shopping centers where grocery stores serve as the primary driver of foot traffic. By focusing on essential goods, Phillips Edison & Co. ensures a steady stream of customers, which in turn supports surrounding retail tenants. This strategic emphasis on necessity-based retail anchors not only bolsters occupancy rates but also insulates the company from the volatility often seen in other sectors of the retail industry.
The company generates revenue by leasing retail spaces in its properties to a diverse mix of national and local tenants. This hybrid approach creates a resilient portfolio that balances stability with growth potential, as grocery-anchored centers frequently yield long-term leases and steady rental income. With a proactive management style, Phillips Edison & Co. continuously seeks value enhancement opportunities through property enhancements, tenant mix optimization, and strategic acquisitions. This holistic approach allows them to maintain competitive leasing rates and tenant satisfaction, ensuring a robust occupancy throughout their sprawling portfolio. By operating as an internally managed REIT, the company maximizes shareholder value by aligning the financial incentives of its management with those of its investors, a testament to its commitment to operational efficiency and sustainable profitability.
Strong 2025 Results: PECO reported NAREIT FFO per share growth of 7.2%, core FFO per share growth of 7%, and same-center NOI growth of 3.8% for 2025.
2026 Guidance: Management reaffirmed strong 2026 guidance with mid-single-digit growth for NAREIT FFO and core FFO per share, projecting net income per share of $0.74 to $0.77 and same-center NOI growth of 3% to 4%.
Leasing Strength: Occupancy ended 2025 at 97.3% overall, anchor occupancy at 98.7%, and in-line leased occupancy hit a record 95.1%. Renewal rent spreads were 20% and new lease spreads 34.3% in Q4.
Active Acquisitions & Dispositions: PECO acquired about $400 million in properties in 2025 and plans $400–500 million in gross acquisitions for 2026, with $100–200 million of dispositions also targeted.
Balance Sheet: Liquidity stood at $925 million at year-end, and net debt to EBITDAre was 5.2x. Management feels well-positioned to execute growth without issuing equity in 2026.
Everyday Retail Growth: PECO highlighted its Everyday Retail strategy, aiming for $1 billion in assets in this segment over 3 years with higher unlevered IRRs than core acquisitions.
Bad Debt Stable: Bad debt was 78 basis points of revenue in 2025 and is expected to remain at similar levels in 2026.
