Phillips Edison & Company (PECO) Barclays 24th Annual Global Financial Services Conference summary

Market fundamentals and sector positioning

• Retail REITs benefit from a strong supply-demand imbalance, with limited new construction and high occupancy rates across portfolios.

• High renewal spreads and pricing power are driven by scarce new supply and robust tenant demand, especially in necessity-based and grocery-anchored centers.

• Retailers are adapting quickly, with continued store expansion and high retention rates, despite negative headlines about select brands.

• REIT-owned properties are generally higher quality, attracting top tenants and supporting resilient cash flows.

• The disconnect between public and private market valuations presents investment opportunities, as private demand remains strong.

Growth strategies and capital allocation

• Internal growth is prioritized through re-merchandising, densification, and redevelopment, with double-digit returns on capital for outparcel and expansion projects.

• External growth is achieved via selective acquisitions, capital recycling, and structured investment programs that provide future acquisition options.

• Balance sheets are managed conservatively, with leverage targets typically below sector averages, enabling flexibility in capital deployment.

• Dividend payout ratios are kept lower than industry norms to retain cash for reinvestment and growth.

• Cap rate dislocation between public and private markets allows for accretive asset sales and reinvestment at higher yields.

Earnings growth and return outlook

• Same-store NOI growth targets range from 3% to 4% annually, with mid to high single-digit FFO or EPS growth expected.

• Dividend yields of 3% to 3.5% are combined with earnings growth to target total annual returns of 9% to 10%.

• Focus remains on operational excellence, disciplined capital allocation, and transparent communication to drive long-term shareholder value.

• Dividend growth is closely linked to cash flow growth, with a strong historical correlation to total shareholder returns.

• Maintaining high occupancy, quality tenant mix, and prudent leverage are central to sustaining stable and growing cash flows.