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 7 450 Lexington Ave New York, NY 10017 800.468.7526 BRIXMOR.COM
WHO IS BRIXMOR? PORTFOLIO QUICK FACTS • One of the largest open-air retail landlords in the US Number of shopping centers 486 • Fully integrated national platform focused on merchandising GLA 83M SF centers to be relevant to communities served Average shopping center size 170K SF • Core tenancy comprises highly productive retail partners Percent billed 90.3% including grocers, value retailers and consumer oriented service providers Percent leased 92.2% • Percent leased – Anchors ( ≥ 10K SF) 95.5% Strong embedded internal growth potential in what is owned and controlled Percent leased – Small shops (< 10K SF) 84.5% • Self-funded reinvestment pipeline with yields of ~10% Average ABR PSF $13.47 4Q 2017 rent spread (new and renewal) 16.0% • Proven access to capital and flexible balance sheet Average grocer sales PSF 1 ~$550 • Attractive, well-covered dividend yield Highly visible internal growth with lower relative risk 2
VISIBLE DRIVERS OF FORWARD INTERNAL GROWTH Sector leading leasing New lease productivity – TTM 1 New ABR created – TTM 2 4.4% 34% 4.1% 450000% 40% 6000% 5.0% 3.9% 29% 4.5% 400000% 3.5% 35% 5000% 4.0% 350000% 23% 23% 2.8% 30% 3.5% 300000% 19% 4000% 2.4% 25% 3.0% 250000% 20% 3000% 2.5% 11% 200000% 9% 2.0% 15% 150000% 2000% 1.5% 10% 100000% 1.0% 353 353 1000% 773 1,188 1,541 2,920 3,195 $14 $15 $18 $31 $41 $42 612 5% 50000% 0.5% 0% 0% 0% 0.0% RPAI WRI FRT REG DDR KIM BRX RPAI FRT DDR REG KIM BRX New Lease GLA (K SF) New Lease Spreads New ABR Created ($M) % of Portfolio ABR Visibility on future growth 2017 New Lease se ABR PSF Rent basis and occupancy costs matter • $16.00 50% • Historic under-investment and under-management has resulted in $16.00 45% below-market rent profile $15.00 $13.32 40% $14.00 35% $12.14 Significant mark-to-market opportunity across the portfolio, • $11.88 $11.72 $13.00 30% particularly in anchor space $12.00 25% 15.2% $11.00 14.1% 20% 13.2% 5.0M SF of anchor leases expiring through 2021 with no – $10.00 15% 8.5% remaining options at an ABR PSF at expiration of $8.78 $9.00 10% $8.00 5% 2017 new anchor leases signed at an ABR PSF of $12.47 – 0% $7.00 2018 2019 2020 2021 Consistent new lease TI PSF costs • % of Leased GLA Expiring ABR PSF at Expiration 3
VISIBLE DRIVERS OF FORWARD INTERNAL GROWTH (CONTINUED) Small shop occupancy opportunity Small shop occupancy change (bps) following reinvestment • Small shop occupancy at centers where a redevelopment or repositioning has been completed 880 in the past five years has improved 600 – 800bps 710 470 – Creating $21M of incremental ABR 260 • Building value in small shop space by: Small shop occupancy 1 year prior to completion vs. – Broadening tenant mix with strong local At completion 1yr after 2yrs after 3yrs after operators completion completion completion – Leveraging new anchor leasing 600 – 800 bps – Driving absorption through targeted marketing ↗ small shop occupancy improvement following reinvestment • Future redevelopments are catalysts for improvement: – Small shop occupancy in future redevelopment 78.5% pipeline is 78.5%, 600bps below portfolio average Small Shop Occupancy Potential Small Shop At Future Occupancy Following Redevelopments Reinvestment 4
PRODUCTIVE RETAILERS RELEVANT TO CONSUMERS TOP RETAILERS BY ABR % of % of Credit Rating Retailer Stores GLA ABR ABR PSF (S&P/Moody’s) Non-discretionary & value-oriented retail mix with strong 90 3.4% 3.2% $10.68 A+ / A2 service component 65 5.1% 3.1% 7.02 BBB / Baa1 155 2.1% 1.9% 10.40 BB+ / Ba1 • Well- suited for today’s consumer environment 37 2.0% 1.7% 9.38 NR Best-in-class retailers with significant growth plans 25 3.7% 1.4% 4.41 AA / Aa2 24 1.6% 1.4% 10.12 BBB/ Baa2 Strong tenant credit profile with meaningful diversification 23 1.9% 1.4% 8.19 BB / Ba2 21 1.4% 1.3% 10.68 B+ / B1 • 10 largest retailers account for only 17.6% of ABR 35 1.2% 1.1% 11.01 A- / A3 • Largest tenant, TJX, accounts for only 3.2% of ABR 33 1.0% 1.1% 12.87 BBB / Baa1 508 23.4% 17.6% $8.61 TOP 10 44 1.8% 1.0% 6.46 BBB / - 29 0.8% 1.0% 14.53 B / B1 Proactive Tenant Management 13 0.7% 0.9% 15.73 B+ / B2 37 0.6% 0.9% 16.88 B / B2 15 0.7% 0.9% 13.47 BBB- / Baa1 Decreased Exposure Increased 32 0.8% 0.8% 11.16 - / B1 Exposure 35 0.6% 0.8% 14.58 B+ / Ba3 14 0.7% 0.8% 13.77 NR 27 0.7% 0.7% 12.48 B+ / B1 26 0.7% 0.7% 11.77 BB+ / Baa2 780 31.5% 26.1% $9.51 TOP 20 5
GROWING TENANCY WITH THRIVING RETAILERS BRX covers 200+ national & regional open-air retailers with plans to open ~13,000 net new stores Broad cross-section of retailers Executing new leases with thriving retailers • Non-discretionary & value-oriented retail with strong • New leasing focused on thriving categories (by ABR) complementary service component (by ABR) Grocery Services Other ( ≤ 3%) 17% 17% 16% Other ( ≤ 3%) 13% Dollar Store 3% Health & Personal Hobby & Party 4% Care Other Value Fashion 4% Services 16% Other Value Fashion 4% 16% General Merchandise 5% Home 6% Hobby & Party 6% Home 12% Off-Price Apparel Restaurants 13% Grocery 7% 6% Health & Personal Off-Price Apparel 10% Restaurants 10% Care 8% General Merchandise … 50+ new national & regional retailers added to portfolio since May 2016 6
PORTFOLIO COMPOSITION PROVIDES COMPETITIVE ADVANTAGES Productive grocery anchors Traditional Specialty • ~70% of shopping centers are grocery-anchored 76% have an additional anchor – • Average sales of ~$550 PSF – 36% above the national average 1 Average grocer occupancy costs below 2% 1 – Warehouse Merchandise mix Retail format National retailers account for 65% of portfolio ABR Flexible format, primarily grocery anchored (by ABR) 2 75% 13% 16% Community / 65% Power center Regional Neighborhood National 10% 19% Grocery-anchored regional center Local 2% Other 7
CAPTURING SHARE FROM CORE TENANCY Institutionalizing relationships Brixmor’s Share of New Store Opening Plans (2018) BRX Share of New Stores BRX Share of Existing Retailer Fleet Taking off-mall 13% 11% 10% 10% 8% 7% 7% 5% 4% 4% 2% 1% 1% 0% < 1% < 1% Ross Burlington Lucky's Sprouts Fitness Kay Jewelers Panera Starbucks Fitness 8
UNLOCKING VALUE THROUGH REINVESTMENT Attractive redevelopment pipeline drives significant value creation & growth potential at lower risk Breadth of opportunity Value Creation Opportunity ($M) • Untapped potential to drive growth through reinvestment Number Net Estimated Expected NOI Projects Costs 1 Yield 1,2 • Future pipeline of > $1B; 45+ centers targeted In Process 47 $295 ~10% • Complimentary densification with 250+ outparcel opportunities Completed YTD 26 $90 12% Attractive relative risk • Low risk / high yield projects Representative BRX Representative Redevelopment vs. • Substantially pre-leased Redevelopment Ground-up Ground-up Only Development Development • Short execution timelines or multi-phased larger projects 1/4 the amount Total investment $200M $800M invested • Funded primarily with free cash flow Yield 10% 7% Sustainable returns Residual cap-rate 6.0% 6.0% Same • Expected annual spend run rate of $150 – 200M by 4Q 2018 Value creation $133M $133M value creation o Requires active pipeline of ~$400M • Expected incremental NOI yields of 9% - 11% Risk of value destruction • Follow-on leasing enhances long-term growth rate Residual cap-rate 6% - 8% 6% - 8% Value creation $50 - $133M ($100) - $133M 9
PRUDENT & RESPONSIBLE CAPITAL RECYCLING Disciplined capital recycling to drive outperformance & create long-term value with attractive risk-adjusted returns Disciplined Capital Allocation Significant Opportunity Accelerated Effort • • • Unlevered IRR focus Lack of historical portfolio strategy 32 assets sold in 2017 for $356M • • • Informed investment decisions based on Granular asset base: largest asset is < Expect to continue to be a net seller in local market knowledge 2% of ABR 2018 • Many vibrant markets not targeted by other public REITs and large institutions Underwriting Holding an asset Buying the asset FINANCIAL HUMAN CAPITAL MARKET • Disciplined underwriting • Value of time spent versus value • Operational and leasing advantages created when a significant landlord in a • Risk-adjusted unlevered hold IRRs and market incremental returns • Focus on exiting non-strategic markets 10
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