Investor Presentation Q U A R T E R E N D E D D E C E M B E R 3 1 , 2 0 1 9
WHO IS BRIXMOR? PORTFOLIO QUICK FACTS • We are one of the largest open-air retail landlords in the US Number of shopping centers 403 • We strive to own properties that are the centers of the communities we serve, by GLA 71M SF thoughtfully merchandising our centers and creating inviting gathering places Average shopping center size 175K SF • Non-discretionary, value-oriented retail mix with strong service component Percent billed 89.3% o ~70% of centers are grocery-anchored Percent leased 92.4% Percent leased – Anchors (≥ 10K SF) 95.2% • High quality, well-diversified portfolio with ~5,000 national, regional, local tenants Percent leased – Small shops (< 10K SF) 86.2% Average grocer sales PSF 1 ~$565 TOP RETAILERS BY ABR Average grocer occupancy cost 1 < 2% % of % of Credit Rating Retailer Stores ABR ABR PSF GLA (S&P/Moody’s) 88 3.4% $11.45 3.8% A+ / A2 50 2.8% 7.50 4.7% BBB / Baa1 FLEXIBLE RETAIL FORMAT 2 126 1.8% 10.91 2.1% BBB- / Baa3 22 1.4% 10.09 1.7% BB+ / Ba1 75% 29 1.4% 9.46 1.8% NR Community / 12% Power center Neighborhood 21 1.3% 10.39 1.6% BBB / Baa1 36 1.3% 11.86 1.4% A- / A2 11% Grocery-anchored 15 1.3% 18.27 0.9% B+ / B2 regional center 16 1.2% 11.50 1.3% B+ / B1 2% Other 32 1.1% 12.41 1.1% BB / Ba2 TOP 10 435 17.0% $10.48 20.4% 3 >
BRIXMOR’S KEY DIFFERENTIATORS PLATFORM & EXECUTION Retooled platform Durable business plan positioned to outperform Over the last four years, we have built a best-in-class operating platform Proven demand for our established, well-located centers • • Delivering sector leading leasing productivity Long-standing partnerships with growing retailers • • o Increasing market share with growing tenants at better rents Below-market in place rents that drive leasing spreads / reinvestment • o Growing small shop occupancy despite redevelopment disruption and $45M of leases signed but not yet commenced, providing tailwinds in to 2020 • bankruptcy activity Diversity and credit strength of our top tenants • Successfully executing on reinvestment pipeline, with >$415M of projects • Strong and flexible balance sheet • completed to date at average incremental NOI yields of 11% 1 Best-in-class Well-located, Posit itio ioned fo for Durable business plan operating platform established portfolio outperf rform rmance Portfolio transformation underway ~60% of the portfolio has been sold or incorporated into reinvestment pipeline • o 25% of portfolio sold, exiting 37 single asset markets o 35% of portfolio reinvested in or identified as a future redevelopment Portfolio Size In-Place ABR PSF Small Shop Active Reinvestments (M SF) Percent Leased ($M) $413 $14.74 87 86.2% 71 $12.85 83.9% $160 518 403 39 55 centers centers projects projects 1Q16 4Q19 1Q16 4Q19 1Q16 4Q19 1Q16 4Q19 4 >
4Q 2019 HIGHLIGHTS Executing on all facets of our balanced, self-funded business plan ABR PSF Trajectory New Lease Rent Spreads 1 New Lease Volume (K SF) $14.74 33.3% 1,026 $14.59 32.7% 949 936 856 $14.39 $14.32 31.5% 694 $14.10 30.5% 30.4% 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Delivering Reinvestment Visible Tailwinds Prudent Capital Allocation Value Now $162 M delivered in 2019 at 10 % 310 bps spread between leased and billed $301 M of dispositions in 2019 incremental returns 2,3 occupancy $79 M of acquisitions in 2019 ~$110 M of value creation 4 $45 M of ABR in leases signed but not yet $15 M of stock repurchases in 2019 commenced $413 M in process at 10 % incremental returns 2,3 ~$275 of value creation 4 5 >
Why Invest With Us At Brixmor ?
WHY BRIXMOR? UNIQUELY POSITIONED TO DRIVE SUSTAINABLE GROWTH • We are a leading landlord to retailers who thrive in today’s environment • We are the most productive leasing platform in the industry • We have unmatched visibility on growth • We have an unparalleled opportunity to invest in our assets and drive future growth • We have a self-funded business plan and disciplined approach to capital allocation • We have an attractive, well-covered dividend • We have a strong balance sheet, providing maximum financial and operational flexibility • We are committed to operating in a socially responsible manner, always guided by our mission to be the “center of the communities we serve” 7 >
We are a leading landlord to retailers who thrive in today’s environment
WHY BRIXMOR? COMPREHENSIVE MERCHANDISING National Reach Locally Sourced Consumer Focused • Trusted partner to growing national • Targeting and developing relationships • Merchandising to meet the changing retailers with successful local merchants… “The needs of today’s consumer, while Local Anchor” reflecting the unique character of each • Proven relationships are driving community outsized market share • Harvesting valuable local market insight • Broadening tenancy with retailers in • Strategy recognizes the importance of growth categories our tenants’ success • Providing best-in-class leasing and Largest New Lease Categories Since 2016 operational service (by % of ABR) % of New Lease ABR 1Q16 - 4Q19 % of Portfolio ABR 21% Services 16% 18% Restaurants 14% 16% Health & Personal 10% 8% Home 6% 6% Grocery 15% 5% Off-Price Apparel 6% 4% Entertainment 2% 9 >
WHY BRIXMOR? THRIVING RETAILERS ARE INVESTING IN PHYSICAL STORES Our centers are essential to retailer success Industry Commentary “ Today, our stores are at the heart of our progress – serving new • Physical stores, online and digital are interdependent – guests, creating an inspiring shopping experience and fueling our digital growth.” creating a “halo effect” that strengthens brand identity “ We fundamentally believe our stores are one of our greatest o Opening a new store in a market results in a 37% assets , and we have very few customers that shop us in only one channel. increase in traffic to retailer’s website They shop us across experiences that doesn't always mean they transact in the store, but they want the ability to leverage across our channels.” • Today’s consumer is demanding a superior customer “ Stores remain critical to our success and we continue to invest to experience and is willing to support brands that elevate the overall experience.” provide a range of omnichannel conveniences “We believe our treasure hunt shopping experience holds tremendous o Omnichannel shoppers account for only 7% of all appeal for consumers… Our great values keep our shopping experience shoppers but produce 27% of all sales simple and authentic for our customers. Our merchandise assortments are constantly changing. So, there's always something new to surprise, excite, and inspire consumers in our stores and online.” o Retailers continue to invest in stores to provide a seamless experience across channels “ More than ever, we’re innovating across the business . We’re experimenting with emerging technologies to improve store operations • Retailers are actively utilizing BOPIS (Buy-Online- and reduce friction in our customers’ lives.” Pickup-In- Store) to cut delivery costs, engage with customers and drive in-store sales “While our stores remain the hub of our business, we know that many of our in- store sales are influenced by online visits… Our customers continue to blend the o 86% of US shoppers make incremental purchases channels of engagement, and we are investing to remove the friction as they do so .” while picking up e-commerce orders “It’s important to remember 97% of the US population shop for groceries in a brick-and-mortar store. For that reason, conveniently located physical stores continue to be vitally important to our customers , and our insights Source: eMarketer, ICSC, IHL Group Radial show that this remains a competitive advantage and a primary reason why customers choose Kroger.” 10 >
We are the most productive leasing platform in the industry
WHY BRIXMOR? LEASING OUTPERFORMANCE Sector leading leasing New lease productivity – TTM 1 New ABR created – TTM 2 4.9% 50% 7% 70 5.6% 5.0% 3.8% 3.8% 45% 3.7% 3.7% 3.5% 6% 5.0% 60 40% 4.0% 2.7% 4.2% 5% 50 35% 2.2% 36% 3.0% 3.4% 3.4% 30% 32% 4% 40 2.0% 25% 3% 30 20% 1.0% 21% 20% 1.3% 15% 2% 20 0.0% 16% 13% 10% 12% 11% 1% 10 -1.0% $10 $18 $19 $32 $39 $50 5% 0% -2.0% 0% 0 FRT SITC REG WRI RPAI KIM BRX KRG FRT SITC RPAI KIM REG BRX New Lease Spreads New Lease GLA (as a % of avg. portfolio GLA) New ABR Created ($M) % of Portfolio ABR Purposeful merchandising Better tenants Better rents 12 >
We have unmatched visibility on growth
WHY BRIXMOR? VISIBILITY ON GROWTH More Upside Less Downside Significant revenue growth opportunity Lower relative retailer watchlist exposure (by GLA) • Historic portfolio under-investment and under-management • Below-market rent profile • Unmatched mark-to-market opportunity 5.1% $11.81 4.7% 47% 4.6% spread 3.7% $8.79 2.6% $8.03 2.5% Old ABR PSF New ABR PSF Available WRI REG BRX RPAI FRT KIM Anchor Leases New Anchor Leases 1Q16 – 4Q19 Source: ISI 2 2020 – 2022 (comparable leases only) (3,742K SF) 1 14 >
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