Phillips Edison & Company, Inc. (PECO), an internally-managed REIT, is one of the nation's largest owners and operators of grocery-anchored shopping centers. PECO's diversified portfolio of well-occupied neighborhood shopping centers features a mix of national and regional retailers selling necessity-based goods and services in fundamentally strong markets throughout the United States. Through its vertically-integrated operating platform, the Company manages a portfolio of 309 properties, including 283 wholly-owned properties comprising approximately 31.7 million square feet across 31 states (as of September 30, 2020). PECO has generated strong operating results over its 29+ year history and has partnered with leading institutional commercial real estate investors, including TPG Real Estate and The Northwestern Mutual Life Insurance Company. The Company remains exclusively focused on creating great grocery-anchored shopping experiences and improving the communities it serves one center at a time.
AI Generated Analysis | Feedback
Here is a brief analogy for Phillips Edison (PECO):
Simon Property Group for grocery-anchored shopping centers.
AI Generated Analysis | Feedback
- Leasing of Retail Space: Phillips Edison provides rentable units within grocery-anchored shopping centers to a diverse range of retailers.
- Property Management: The company offers comprehensive management and maintenance services for its shopping centers, benefiting both tenants and shoppers.
AI Generated Analysis | Feedback
Phillips Edison & Company (PECO) is a Real Estate Investment Trust (REIT) that specializes in owning and operating grocery-anchanchored shopping centers. Therefore, its primary customers are the commercial tenants that lease space within its properties.
The company sells primarily to other companies. Its major customers (tenants) include:
- Kroger (NYSE: KR)
- Publix Super Markets (Private Company)
- Ahold Delhaize (OTCQX: ADGSY)
- Walmart (NYSE: WMT)
AI Generated Analysis | Feedback
The management team members of Phillips Edison (symbol: PECO) include:
Jeffrey S. Edison Chairman and CEO
Jeffrey S. Edison co-founded Phillips Edison & Company in 1995 and has served as a principal since then, currently holding the positions of Chairman and Chief Executive Officer. He also founded Phillips Edison LP and Phillips Edison & Co., Inc. in 1991, serving as Principal and Chairman & Chief Executive Officer, respectively. Mr. Edison previously held roles at NationsBank's South Charles Realty Corporation as a Senior Vice President, Morgan Stanley Realty Incorporated, and The Taubman Company. He was also Chairman & Chief Executive Officer of Phillips Edison Grocery Center REIT II, Inc. and Phillips Edison Grocery Center REIT III, Inc., both of which later merged with PECO.
John P. Caulfield Executive Vice President, Chief Financial Officer & Treasurer
John P. Caulfield has served as Chief Financial Officer and Treasurer of Phillips Edison & Company since August 2019, and as Executive Vice President since February 2022. Prior to this, he was Senior Vice President of Finance at Phillips Edison from January 2016 to August 2019. Before joining PECO in March 2014, Mr. Caulfield was Vice President of Treasury and Investor Relations at CyrusOne Inc. from February 2012 to March 2014, where he was instrumental in the company's successful spinoff and IPO from Cincinnati Bell. He also spent seven years at Cincinnati Bell in various treasury, finance, and accounting positions.
Robert F. Myers President
Robert F. Myers has served as President of Phillips Edison & Company since January 1, 2024. He previously held the role of Chief Operating Officer beginning in October 2010 and Executive Vice President starting in August 2020. Mr. Myers joined PECO in 2003 as a Senior Leasing Manager and advanced through several positions including Regional Leasing Manager, Vice President of Leasing, and Senior Vice President of Leasing and Operations. Before joining PECO, he spent six years with Equity Investment Group as a Property Manager.
Tanya E. Brady Executive Vice President, Chief Legal & Administrative Officer
Tanya E. Brady serves as Executive Vice President, Chief Legal and Administrative Officer of Phillips Edison & Company. She has been the General Counsel since January 2015 and Secretary since November 2018. Ms. Brady joined the company in 2013 as Vice President and Assistant General Counsel. She also led the company's Corporate Responsibility and Sustainability Program starting in January 2022.
Cherilyn K. Megill SVP, Chief Marketing Officer
Cherilyn K. Megill holds the position of Senior Vice President, Chief Marketing Officer at Phillips Edison & Company.
AI Generated Analysis | Feedback
The key risks to Phillips Edison (PECO) include:
- Economic Uncertainties and Consumer Spending: Phillips Edison, despite its focus on necessity-based retail, is not immune to broader economic uncertainties. The potential for slower economic growth or a recession could adversely affect consumer spending, which in turn might impact the retail tenants in PECO's properties. This could lead to challenges in maintaining high occupancy rates and consistent rental income growth.
- Interest Rate Sensitivity: PECO's financial performance shows a vulnerability to fluctuations in interest rates. Significant changes in interest rates could affect the company's cost of capital, thereby impacting its profitability and potential for growth. While the company benefits from long-term debt maturities and a high percentage of fixed-rate debt, interest rate volatility remains a concern.
- E-commerce Adoption and Grocery Anchor Performance: Although Phillips Edison specializes in grocery-anchored shopping centers, which are generally considered resilient, accelerated e-commerce adoption or financial difficulties experienced by a major grocery anchor could undermine leasing momentum and put pressure on the company's valuation. The ongoing shift in consumer shopping habits towards online platforms poses a competitive threat to traditional retail models, even for necessity-based goods.
AI Generated Analysis | Feedback
Phillips Edison & Company (PECO) specializes in the ownership, management, and redevelopment of grocery-anchored shopping centers across the United States. This niche positions them within the broader U.S. retail real estate and commercial real estate markets.
The addressable market for Phillips Edison's core business, grocery-anchored retail properties, can be understood through investment volumes within this sector. In 2024, investments in multi-tenant, grocery-anchored retail transactions in the U.S. totaled $7.0 billion, a 1.4% increase from the previous year. This segment saw particularly robust activity in the second half of 2024, with transaction volume rising by 34%. The average price per square foot for these properties reached a record high of $209 in 2024, reflecting strong investor demand.
More broadly, the U.S. commercial real estate market, which includes retail properties, was valued at an estimated $718.2 billion in 2024 and is projected to grow to $991.7 billion by 2033, exhibiting a compound annual growth rate (CAGR) of 3.35% from 2025 to 2033. Within this larger market, the U.S. retail real estate sector has shown resilience, with announced retail openings outpacing closings in 2025 and investment volumes surging 23% year-over-year to $28.5 billion. Grocery-anchored centers represent a significant and resilient portion of this market, having comprised approximately 22% of all retail center acquisitions in 2023.
AI Generated Analysis | Feedback
Phillips Edison (PECO) is expected to drive future revenue growth over the next 2-3 years through several key strategies:
-
Strong Leasing Spreads and High Occupancy Rates: The company continues to benefit from strong demand for its retail spaces, evidenced by record-high comparable renewal rent spreads of 23.2% and new leasing rent spreads of 24.5% in the third quarter of 2025. This strong pricing power, combined with a high portfolio occupancy rate of 97.6%, allows PECO to increase rental income from existing properties.
-
Strategic Acquisitions and Developments: Phillips Edison is actively expanding its portfolio through strategic acquisitions of grocery-anchored shopping centers and land for future development. The company projected annual acquisitions between $350 million and $450 million for 2025, with plans for continued strategic acquisitions and developments to bolster future growth.
-
Same-Center Net Operating Income (NOI) Growth: The company anticipates sustained growth from its existing properties. PECO reaffirmed its 2025 guidance for same-center NOI growth, targeting a 3.35% increase at the midpoint, and expects this portfolio to deliver annual same-center NOI growth between 3% and 4% over the long term.
-
Focus on Necessity-Based, Grocery-Anchored Retail Centers: Phillips Edison's business model is concentrated on well-occupied, grocery-anchored neighborhood and community shopping centers. This focus on necessity-based goods and services provides a resilient and stable revenue stream, even amidst broader retail competition.
-
Portfolio Recycling: PECO plans to optimize its portfolio through strategic dispositions and reinvestment. The company anticipates selling $50 million to $100 million in assets in 2025, with an increase to $100 million to $200 million in dispositions projected for 2026. This strategy allows PECO to divest non-core assets and reallocate capital to higher-growth opportunities.
AI Generated Analysis | Feedback
The capital allocation decisions of Phillips Edison (PECO) over the last three to five years are summarized below, categorized by share repurchases, share issuance, outbound investments, and capital expenditures.
Share Repurchases
- In the fourth quarter of 2020, Phillips Edison intended to launch a voluntary tender offer to repurchase up to 4.5 million shares of common stock, totaling approximately $26 million, at a price of $5.75 per share.
- Effective January 2021, the company planned to recommence repurchases under the death, qualifying disability, and determination of incompetence (DDI) portion of its share repurchase plan.
- A $250 million stock repurchase program was approved in August 2022; however, no repurchases have been made under this program to date.
Share Issuance
- In 2024, PECO generated net proceeds of $73.8 million after commissions through the issuance of 1.9 million common shares via its At-The-Market (ATM) programs.
- In 2023, the company generated net proceeds of $70.1 million after commissions through the issuance of 2.0 million common shares via its ATM program.
Inbound Investments
- No significant inbound investments by third-parties into Phillips Edison have been identified over the last 3-5 years. The company operates a third-party investment management business and holds partial ownership in unconsolidated institutional joint ventures, which reflects a different nature of investment.
Outbound Investments
- For the year ended December 31, 2024, Phillips Edison acquired 14 shopping centers and four land parcels for approximately $306 million, surpassing its revised guidance for the year.
- In the first quarter of 2025, PECO acquired $146 million in assets. Year-to-date gross acquisitions were $287 million as of the second quarter of 2025 and reached $303 million as of September 2025.
- For 2025, the company has affirmed guidance for gross acquisitions ranging from $350 million to $450 million. Additionally, the company plans to divest $50 million to $100 million in assets during 2025.
Capital Expenditures
- In 2024, Phillips Edison's total gross capital spending activity amounted to $91.8 million. This included $21.8 million for capital improvements, $25.2 million for tenant improvements, and $39.1 million for redevelopment and development projects.
- For 2023, the total gross capital spending activity was $92.7 million, with $22.8 million allocated to capital improvements, $26.7 million to tenant improvements, and $38.2 million to redevelopment and development initiatives.
- The primary focus of capital expenditures includes maintenance capital expenditures, tenant improvements, value-enhancing anchor space repositioning and redevelopment, and ground-up outparcel development.
